[Senate Report 107-117]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 237
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-117
_______________________________________________________________________




     AGRICULTURE, CONSERVATION, AND RURAL ENHANCEMENT ACT OF 2001

                               ----------                              

                              R E P O R T

                                 of the

           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
                              U.S. SENATE

                              to accompany

                                S. 1731




                December 7, 2001.--Ordered to be printed
                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
76-567                     WASHINGTON : 2001

                                                       Calendar No. 237
107th Congress                                                   Report
                                 SENATE
 1st Session                                                    107-117

======================================================================



 
      AGRICULTURE, CONSERVATION, AND RURAL ENHANCEMENT ACT OF 2001

                                _______
                                

               December 7, 2001.--Ordered to be reported

                                _______
                                

Mr. Harkin, from the Committee on Agriculture, Nutrition, and Forestry, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1731]

    The Committee on Agriculture, Nutrition, and Forestry, 
reports an original 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, and having 
considered the same and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Introduction.....................................................1
 II. Summary..........................................................4
III. Purpose, need, and background...................................29
 IV. Section-by-section analysis.....................................95
  V. Legislative history and votes in the Committee.................219
 VI. Regulatory impact statement....................................234
VII. Budgetary impact of the bill...................................236
VIII.Changes in existing law........................................258


                            I. Introduction

    The Agriculture, Conservation and Rural Enhancement (ACRE) 
Act of 2001, is a comprehensive and balanced farm bill. This 
legislation is, of course, critically important to farm and 
ranch families, but also to the well-being of all Americans, 
whether they live in rural or urban areas. Within the funding 
provided by the budget resolution, the Committee has sought to 
ensure a safe, abundant and affordable food and fiber supply 
for the people of the United States and other nations, while 
promoting fair returns and opportunities for agricultural 
producers and the conservation of natural resources. The bill 
is also designed to promote new and expanded markets at home 
and abroad for U.S. agricultural products while complying with 
international trade agreements. The legislation reflects a deep 
appreciation of the value of farms, ranches and rural 
communities--and the critical need to promote their survival 
and prosperity. It will help rural communities and their 
citizens share in the economic growth, job creation and 
prosperity that the nation, in general, has enjoyed over the 
years.

                                Overview

    The bill will assist the nation's farmers and ranchers, 
many of whom are in economic distress, meet their need for 
income protection by providing a new and improved safety net. 
The safety net provided by the bill consists of four separate 
elements, including marketing assistance loans (and loan 
deficiency payments), direct fixed payments, counter-cyclical 
payments, and a new conservation payment program for working 
farms and ranches. The Committee recognizes the need to protect 
and enhance the long-term health and vitality of agricultural 
lands and thus the bill improves and significantly increases 
funding for the existing USDA conservation programs and creates 
new ones. The legislation also expands support to farm-based 
renewable energy and promotes new economic opportunities and 
improved quality of life in rural communities. In addition, the 
Committee increases nutrition assistance for Americans and in 
developing countries and strengthens agricultural trade, farm 
credit, research and forestry programs.

                         Farm income protection

    This legislation responds to the need heard by the 
Committee to revise and extend the farm bill nearly a full year 
before the current authorization expires. It is widely 
recognized that the current program is not providing the type 
of flexible and market-responsive income protection that is 
needed by farmers and ranchers in the current economic 
environment. When the existing farm legislation, the Federal 
Agriculture Improvement and Reform (FAIR) Act, was considered 
and enacted in 1996, the U.S. farm sector enjoyed high prices 
and a robust expansion of exports. With commodity prices at 
record high levels in 1995-96 and projected to remain high, 
many did not expect the marketing assistance loan program and 
the related loan deficiency payments to trigger significant 
outlays. Unfortunately, this prediction proved wrong. With 
falling exports due to the financial crisis in Asia in late 
1997, and a series of good growing seasons in major producing 
regions without significant weather disruptions, commodity 
prices fell by 50 percent or more from their 1996 peaks. Less 
than two years after enactment of the FAIR Act, the dramatic 
decline in commodity prices created serious cash flow problems 
for farmers and producer incomes fell sharply.
    The income protection features of the farm program were 
limited by the provisions of the FAIR Act that provided farmers 
with fixed and declining ``transitional'' payments during this 
period. The objective of these transitional payments, which 
replaced production-based deficiency payments, is now a subject 
of considerable debate. Some argue the declining fixed payments 
were intended to be a transition to less government support for 
farmers. Others maintain that the fixed payment approach is an 
appropriate farm policy tool for delivering farm income 
assistance into the future. On the other hand, there seems to 
be near universal agreement that the planting flexibility 
provisions of the FAIR Act were well received by farmers. That 
policy has given farmers greater choice and freedom in making 
planting and other decisions on the farm.
    The combination of lower prices and lower Federal support 
payments for farmers in the late 1990's created significant 
problems for farmers all across the country. Congress responded 
by providing emergency supplemental farm assistance totaling 
more than $30 billion over four consecutive years. While these 
payments helped alleviate farmers' cash flow problems, the 
payments did not address whether the underlying agriculture 
policies were performing adequately. Today, the farm income 
data shows that the economic situation in the farm sector has 
only improved slightly since the late 1990's. Commodity prices 
remain quite low and national farm policy must be amended to 
address the need for a more market-sensitive, counter-cyclical 
approach that will respond adequately to periods of low prices.

                   Conservation of natural resources

    To preserve the health and productivity of agricultural 
lands, the new bill also makes very substantial new investments 
in conservation. This investment recognizes that while 
agriculture is primarily about the production of food and 
fiber, there is a strong link between a productive agriculture 
and the conservation of soils, the abundance of wildlife and 
the quality of water supplies. America's farmers and ranchers 
play a critical role as stewards of natural resources for 
future generations. While most farmers do maintain practices to 
enhance natural resources on and off their farms, periods of 
low prices and high costs too often make it difficult for 
farmers to spend time and resources on conservation practices. 
Resources are needed to help farmers and ranchers maintain and 
adopt needed conservation practices on land in agricultural 
production.
    USDA programs have helped farmers make great strides in 
working toward land stewardship goals. The Conservation Reserve 
Program protects some 34 million acres of the nation's land, 
including an increasing acreage in conservation buffers, 
waterways, and filter strips. The Wetlands Reserve Program has 
supported the restoration of over a million acres of wetlands, 
which provide critical wildlife habitat and improve water 
quality. The Farmland Protection Program has helped ease 
development pressures on agricultural land. However, USDA's 
critical conservation programs are oversubscribed and 
underfunded. This bill responds to this need. The bill also 
recognizes that conservation must mean something more than land 
retirement. There is a link between conservation and a 
profitable agriculture. A whollyvoluntary new program is 
established, the Conservation Security Program, which will provide 
payments to farmers who practice sound conservation on working 
farmland, and funding is dramatically increased for the Environmental 
Quality Incentives Program. The legislation also includes new programs 
and enhanced funding for conserving and improving private forest lands.

                      Rural community development

    The Committee is also well aware that rural America 
involves much in addition to agricultural production. Only six 
percent of rural Americans live on farms, and less than two 
percent of the U.S. rural population is engaged in farming as a 
primary occupation. Fewer than one in four farm families 
receive the majority of their income from farming, and so are 
dependent upon the rural economies around their farms. Seven 
out of eight rural counties are dominated by varying mixes of 
manufacturing, services and other non-farming activities. While 
rural development has traditionally focused much attention on 
providing physical infrastructure to rural areas, this bill, in 
addition to supporting infrastructure, includes a number of 
innovative and creative new approaches to rural revitalization. 
For instance, the bill authorizes the National Rural 
Cooperative and Business Equity Fund to spur rural economic 
growth by generating the investment capital critical to rural 
business development.

                      Farm-based renewable energy

    While U.S. agriculture has been a long-time world leader in 
food and fiber production, the Committee recognizes that 
American farms can also generate abundant renewable energy. 
Indeed, much of the nation's renewable energy potential is 
found on agricultural lands and in rural areas. Ethanol, 
biodiesel, wind, biomass and hydrogen energy could become a 
major cash crop for farmers and ranchers, helping to increase 
and diversify income, and counteract swings in commodity 
prices. Ethanol and biodiesel hold great potential for 
increased farm commodity and by-products demand. According to 
the Department of Energy, tripling the use of biomass energy, 
such as fast-growing energy crops like switchgrass, could 
provide as much as $20 billion in new income for farmers and 
rural communities. Increasing the diversity and supply of 
renewable energy and improving energy efficiency will reduce 
the nation's dependence on imported oil, thereby reducing its 
vulnerability to supply and price disruptions and adding to 
overall national security. Accordingly, the Committee has 
provided a major new boost to farm-based renewable energy 
development and production.
    In sum, the Committee has developed a comprehensive new 
farm bill responding to the broad and numerous challenges in 
food, agriculture, conservation and rural policy. It is 
designed to protect farm income while laying a foundation for 
future opportunities for America's farm families, rural 
communities and consumers.

                              II. Summary


                      TITLE I--COMMODITY PROGRAMS


            Subtitle A--Direct and Counter-Cyclical Payments

    The bill authorizes the Secretary to enter into contracts 
with producers of wheat, corn, grain sorghum, barley, oats, 
upland cotton, rice, soybeans and minor oilseeds that will 
entitle the producers to receive both direct payments and 
counter-cyclical payments on eligible cropland for the 2002 
through 2006 crop years. Producers will have the option of 
updating acres and payment yields for all covered commodities 
on the farm or retaining existing base acres and program yields 
and adding oilseeds acres using the recent oilseed yield 
experience.

Contract Acreage Calculation

    (A) the four-year average (1998, 1999, 2000, 2001) of 
acreage actually planted on the farm to a covered commodity for 
harvest, grazing, haying, silage, or other similar purposes 
during the base period and any acreage on the farm that the 
producers were prevented from planting during such crop years 
to the covered commodity because of drought, flood, or other 
natural disaster; or (B) the current contract acreage plus the 
four-year average of oilseeds acreage to a maximum of 100 
percent of actual cropland on the farm.

Payment Yield

    (A) the greater of: (1) the average of the yield per 
harvested acre for the crop of the covered commodity for the 
farm for the 1998 through 2001 crop years excluding: (a) any 
crop year for which the producers on the farm did not plant the 
covered commodity; and (b) at the option of the producers on 
the farm, one additional crop year; or (2) the existing program 
payment yield; or (B) existing program payment yield.
    Producers electing to retain current contract acreage will 
also retain current program payment yields, but will use recent 
production experience to determine any oilseeds payment yields. 
The election will apply to all crops on the farm.

Direct Payments

    For each contract commodity, producers will receive direct 
payments equal to the product of the contract acres times the 
payment yield times the direct payment rate for the current 
fiscal year, as specified below. Direct payments shall be paid 
not later than September 30 of each of the fiscal years 2002 
through 2006. At the option of the producer, 50 percent of the 
direct payment will be paid on or after December 1 of the 
fiscal year.

----------------------------------------------------------------------------------------------------------------
                                                     Income                         Direct payment rate--
                                         Unit      protection   Loan rate  -------------------------------------
                                                     price                   2002/2003   2004/2005       2006
----------------------------------------------------------------------------------------------------------------
Wheat..............................  bu                $3.45        $3.00       $0.450       $0.225      $0.113
Corn...............................  bu                 2.35         2.08        0.270        0.135       0.068
Grain sorghum......................  bu                 2.35         2.08    0.31/0.27        0.135       0.068
Barley.............................  bu                 2.20         2.00        0.200        0.100       0.050
Oats...............................  bu                 1.55         1.50        0.050        0.025       0.013
Upland cotton......................  lb                 0.68         0.55        0.13         0.065       0.0325
Rice...............................  cwt                9.30         6.85        2.45         1.225       0.6125
Soybeans...........................  bu                 5.75         5.20        0.550        0.275       0.138
Minor oilseeds.....................  lb                 0.105        0.095       0.010        0.005       0.0025
----------------------------------------------------------------------------------------------------------------

Counter-Cyclical Payments

    The payment rate for counter-cyclical payments equals the 
difference between the income protection price and the sum of 
the direct payment rate plus the higher of the 5-month average 
price or the loan rate for the crop. For the 2002 and 2003 crop 
years, the higher direct payments will preclude any counter-
cyclical payments. Producers receive counter-cyclical payments 
equal to the product of the contract acres times the payment 
yield times the counter-cyclical payment rate. The counter-
cyclical payment is made after the 5-month price is 
established, but no later than 190 days after the beginning of 
the marketing year.

Contract Requirements

    Producers must meet conservation compliance, wetland 
protection, flexibility restrictions and required agricultural 
use.

Flexibility

    Producers may plant any commodity or crop except fruits, 
vegetables (other than lentils, mung beans, dry peas and 
chickpeas), and wild rice. The bill establishes a penalty for 
first time violations of planting flexibility restrictions 
equal to twice the amount otherwise payable under the contract 
for the applicable crop year on each acre that is inadvertently 
planted to a restricted crop.

             Subtitle B--Loan and Loan Deficiency Payments

    For each of the 2002 through 2006 crops the Secretary shall 
make available nonrecourse marketing assistance loans for 
producers of wheat, corn, grain sorghum, barley, oats, upland 
cotton, extra long staple cotton, rice, soybeans, minor 
oilseeds, wool, mohair, honey, dry peas, lentils, and chickpeas 
who comply with applicable conservation requirements and 
wetland protection.
    Loan rates for marketing assistance loans:

          Wheat--$3.00 per bushel
          Corn--$2.08 per bushel
          Grain sorghum--$2.08 per bushel
          Barley--$2.00 per bushel
          Oats--$1.50 per bushel
          Upland cotton--$0.55 per pound
          Extra long staple cotton--$0.7965 per pound
          Rice--$6.85 per hundredweight
          Soybeans--$5.20 per bushel
          Minor oilseeds--$0.095 per pound
          Graded wool--$1.00 per pound
          Nongraded wool--$0.40 per pound
          Mohair--$2.00 per pound
          Honey--$0.60 per pound
          Dry peas--$6.78 per hundredweight
          Lentils $12.79 per hundredweight
          Large chickpeas $17.44 per hundredweight
          Small chickpeas--$8.10 per hundredweight

Adjustments of Loans

    The Secretary may make appropriate adjustments in the loan 
rates for any commodity for differences in grade, type, 
quality, location, and other factors.

Term of Loans

    In the case of each loan commodity, a marketing assistance 
loan shall have a term of nine months beginning on the first 
day of the first month after the month in which the loan is 
made.

Repayment Rate for Loans

    (1) The local loan rate for the commodity plus interest; or 
(2) (a) for wheat, feed grains, oilseeds, wool, mohair, honey 
and pulses--a rate determined by the Secretary that will 
minimize potential loan forfeitures; minimize the accumulation 
of stocks of the commodity by the Federal Government; minimize 
the cost incurred by the Federal Government in storing the 
commodity; allow the commodity produced in the United States to 
be marketed freely and competitively, both domestically and 
internationally; and minimize discrepancies in marketing 
assistance loan benefits across county and State boundaries; 
(b) for rice and upland cotton--the prevailing world market 
price for the commodity (adjusted to United States quality and 
location), as determined by the Secretary.

Loan deficiency payments

    The Secretary may make loan deficiency payments available 
to producers of all loan commodities except extra long staple 
cotton. The loan deficiency payment rate will equal the 
difference between the loan rate and the loan repayment 
rate.Special marketing loan provisions for upland cotton and the 
special competitive provisions for extra long staple cotton are 
continued.
    Recourse loans for high moisture feed grains and seed 
cotton are continued.

                     Subtitle C--Other Commodities


                            CHAPTER 1--DAIRY

    Extends the milk price support program at $9.90 per 
hundredweight through 2006.
    Establishes a national dairy policy that provides a 
counter-cyclical income support program for dairy farmers 
across the country. Its purpose is to stabilize the production, 
price, and marketing of milk and other dairy products in the 
United States.
    The Secretary is required to amend Federal milk marketing 
orders to establish a minimum price for Class I, or fluid milk 
that is not less than the sum of the adjusted Class I milk 
differential and at least $14.25 per hundredweight.
    The Secretary must provide for uniform national pooling of 
Class I milk among producers of milk under all Federal milk 
marketing orders of all funds equal to the difference between 
the price of Class I milk and the price of Class I milk without 
the national dairy program. After first paying administrative 
costs, any increased costs of State and Federal nutrition 
programs, and additional Commodity Credit Corporation (CCC) 
expense, the Secretary must distribute amounts in the national 
pool to all producers covered by Federal milk marketing orders, 
based on eligible production of up to 500,000 pounds per month.
    During each month when the average Class III price falls 
below $14.25 per hundredweight, the Secretary shall use funds 
of the CCC to make a payment to each producer for eligible 
production of Class II, III and IV milk. The payment rate 
equals 25 percent of the difference between $14.25 per 
hundredweight and the average price for Class III milk during 
the month. Total payments under this provision are limited to 
$300,000,000 per fiscal year.

                            CHAPTER 2--SUGAR

    Reauthorizes the sugar program with amendments to require 
the Secretary to implement the program, to the greatest extent 
possible, at no net cost. Terminates the marketing assessment 
on sugar and eliminates the loan forfeiture penalty. Authorizes 
payment-in-kind to processors in exchange for reduced 
production. Authorizes the Secretary to establish allotments on 
domestic sugar production. Reduces the CCC interest rate on 
price support loans.

                           CHAPTER 3--PEANUTS

    Reforms the quota-based peanut program by establishing a 
new peanut program that establishes payment acres for 
historical peanut producers, payment yields, and marketing 
assistance loans and loan deficiency payments. Provides direct 
payments of $0.018 per pound. Establishes an income protection 
price for peanuts of $520 per ton (on 85 percent of base acres) 
and a loan rate of $400 per ton. Terminates the marketing quota 
program and compensates quota holders for the loss of the quota 
asset value at $.10 per pound per year for five years.

                       Subtitle D--Administration

    Authorizes the Secretary to make adjustments in domestic 
support levels to assure compliance with U.S. commitments under 
the Uruguay Round Agreement.
    Suspends permanent price support authority.
    Requires the Secretary to purchase $130 million of 
commodities in fiscal years 2002 and 2003, $150 million in 
fiscal year 2004, $170 million in fiscal year 2005, and $200 
million in fiscal year 2006. Specifies the amount that must be 
used to purchase specialty crops each year, that not less than 
$50 million must be used to supplement funds already provided 
by USDA to the Department of Defense for the purchase of fresh 
fruits and vegetables for the National School Lunch Program, 
and that not less than $40 million of commodities are to be 
provided to The Emergency Food Assistance Program.
    Designates $40 million of CCC funds to provide an incentive 
payment for production of Hard White Wheat (HWW). The incentive 
will assure sufficient production of HWW to enable the United 
States to establish domestic and overseas markets for this 
specialty wheat.
    Establishes payment limitations for direct and counter-
cyclical payments of not more than $100,000 per year and for 
marketing loan gains and loan deficiency payments of $150,000 
per year.

                         TITLE II--CONSERVATION


Conservation Security Program

    This legislation establishes a conservation incentive 
program that provides payments to producers who adopt or 
maintain conservation practices on lands in production. The 
practices are aimed at improving and protecting natural 
resources, including soil, water, air and wildlife habitat. 
Additional goals include sound management of invasive species, 
enhancement of carbon sequestration, and wetland enhancement or 
restoration.
    The program is open to all agricultural producers, 
including producers of livestock, speciality crops and program 
crops, and of private agricultural lands. Producers are 
encouraged to adopt comprehensive conservation plans, but have 
the flexibility to choose which practices to adopt or maintain. 
In addition, local and State groups provide guidance on 
implementation of the program, including establishing local 
conservation priorities.
    Producers work with the Natural Resource Conservation 
Service (NRCS), or eligible third party providers, to create 
and implement conservation security plans that outline the 
practices,including the schedule of implementation, the 
producer agrees to maintain or implement. The program establishes three 
tiers of participation in the program. Tier I covers the basic level of 
practices, including nutrient, pest, and air quality management, water 
conservation and wildlife habitat management that may apply to all or 
part of an operation. Tier II includes practices focusing on systems-
based approaches to land management, including partial field practices, 
wetlands, grass and prairie restoration and protection. Tier II 
practices must cumulatively address at least one local resource of 
concern across the entire operation. To qualify for Tier III a producer 
must adopt practices that address all resources of concern on the 
entire operation. Tier I contracts last five years and Tier II and III 
contracts last from five to ten years, at the option of the producer.
    Annual payment levels may reach $20,000 for Tier I, $35,000 
for Tier II, and $50,000 for Tier III. Payments are based on a 
combination of factors, including a percentage of average 
county rental rate or appropriate rate to ensure regional 
equity (6 percent for Tier I, 11 percent for Tier II or 20 
percent for Tier III), bonus payments for increased 
environmental benefits and the cost of practices. Bonus 
payments may also be provided for beginning farmers and 
ranchers, for participation in research or demonstration 
projects or pilot programs, and for cumulative participation on 
a watershed basis. The producer receives 100 percent of the 
costs of adopting or maintaining management practices, 100 
percent of the costs of maintaining land-based structural 
practices and 75 percent of the costs of adopting new land-
based structural practices. Payments are not provided for the 
cost of purchasing equipment or for waste storage or treatment 
facilities. An advance payment of the greater of $1,000 or 20% 
under Tier I, $2,000 or 20% under Tier II, or $3,000 or 20% 
under Tier III.
    The Secretary may allow one State to run the Conservation 
Security Program in that State.
    USDA shall begin working on implementation of the 
Conservation Security Program immediately, but contracts will 
not be entered until fiscal year 2003.

Partnerships and cooperation

    The legislation allows USDA to designate special projects 
under all conservation programs to address local needs. The 
Secretary may provide incentives to producers to encourage 
participation in established special projects.

Administrative requirements for conservation programs

    The legislation requires USDA to provide relief, including 
retention of payments, continued participation in programs and 
other relief to producers who in good faith entered contracts 
with the USDA under a conservation program under this title and 
were misled by USDA employees. The legislation allows operators 
and owners to request mediation services or informal hearings 
in the case of adverse decisions relating to an agriculture 
conservation program.
    The legislation requires USDA to coordinate administration 
of the conservation programs to carry out education, outreach, 
monitoring and evaluation under all conservation programs, 
including for socially disadvantaged and limited resource 
owners and operators. The legislation further requires USDA to 
ensure that conservation programs are fully accessible to 
limited resource producers, beginning farmers and ranchers, and 
Indian tribes.
    In order to expand implementation of conservation programs, 
the legislation requires USDA to establish a criteria for third 
party certification and allows USDA to contract with eligible 
third parties to provide education, outreach, monitoring, 
evaluation and technical assistance.
    The legislation prohibits USDA (and other Federal agencies) 
from releasing information gathered from producers through 
participation in conservation programs, including information 
from conservation plans, unless the information is provided in 
an aggregate form that does not provide information specific to 
individual producers.

Reform and assessment of conservation programs

    The legislation requires USDA to provide Congress with a 
plan for coordinating conservation programs for better 
implementation and for delivering conservation programs for 
Indian tribes, including plans to coordinate with the Secretary 
of the Interior. USDA must also prepare a plan and budget for 
implementing the appraisal of soil, water and related resources 
contained in the National Conservation Program.

Comprehensive Conservation Enhancement Program

    The legislation reauthorizes and renames (formerly ECARP) 
an umbrella program that covers the Conservation Reserve 
Program, the Wetlands Reserve Program, and the Environmental 
Quality Incentives Program through fiscal year 2006.

Conservation Reserve Program (CRP)

    The legislation reauthorizes the CRP through fiscal 2006 
and increases the acreage limit to 40 million acres from 36.4 
million acres. It prohibits enrollment of lands that do not 
have a cropping history during the last three of six years and 
prohibits landowners with lands enrolled in CRP from breaking 
out new highly erodible lands without a cropping history unless 
the land is being used as a homestead or a building site at the 
time of purchase of the land. The legislation further opens 
enrollment of lands without cropping history into both the 
Conservation Reserve Enhancement Program and the continuous 
enrollment CRP and requires USDA to provide equal incentive 
payments for all continuous practices.
    The legislation allows producers to enroll full parcels 
through the continuous CRP as buffers in cases in which more 
than 50 percent of the parcel is eligible for enrollment. The 
legislation also allows USDA to extend hardwood tree contracts, 
permanently authorizes the Wetlands Pilot Program, allows 
haying and grazing on continuous CRP enrollment lands for 
management purposes, and allows wind turbines on lands enrolled 
through the general CRP sign-up.

Technical assistance

    The legislation removes restrictions on the funding 
provided for technical assistance to carry out conservation 
programs (i.e. strikes the Section 11 cap).

Wetlands Reserve Program

    The legislation raises the total acreage cap by 1.25 
million acres of wetlands in the program and requires USDA to 
enroll 250,000 acres annually for fiscal years 2002-2006, to 
the maximum extent possible. The legislation further allows 
USDA to enroll up to 25,000 acres of the 250,000 acres annually 
through the Wetlands Reserve Enhancement Program which enables 
the USDA to coordinate with State and local governments and 
private organizations to focus resources on critical 
environmental needs.

Environmental Quality Incentives Program (EQIP)

    The legislation reauthorizes EQIP through fiscal year 2006 
to allow USDA to provide technical assistance, cost-share and 
incentive payments to eligible producers. The legislation 
allows USDA to dedicate up to five percent of total funds to be 
used for special projects in watersheds and other areas of 
regional significance, including for water conservation and 
irrigation projects to increase water management, nutrient 
reduction and wildlife habitat. In addition, USDA may use up to 
$100 million annually for conservation innovation grants to 
encourage public and private entities to use Federal funds as 
leverage for the development of innovative practices.
    The legislation reduces the EQIP minimum contract length to 
three years, from five years, eliminates the procedure for 
producers to bid down payment rates, provides for contract 
payments during the first year of the contract, and provides 
increased cost-share assistance of 90 percent to limited 
resource and beginning producers.
    The legislation sets the total amount an individual may 
receive under an EQIP contract at $150,000, with an annual 
limit of $50,000. The legislation allows not more than one 
contract for structural practices involving livestock nutrient 
management for a producer during the five-year period of the 
farm bill and requires a comprehensive nutrient management 
plan.
    The legislation provides the following levels of EQIP 
funding: for fiscal year 2002: $500 million; for fiscal year 
2003: $1.05 billion; for fiscal year 2004: $1.2 billion; for 
fiscal year 2005: $1.2 billion; and for fiscal year 2006: $1.25 
billion.

Resource Conservation and Development Program (RC&D)

    The legislation permanently authorizes the RC&D program and 
permits USDA to provide technical and financial assistance 
(including loans and grants) for approved RC&D programs.

Wildlife Habitat Incentives Program (WHIP)

    The legislation expands WHIP beyond cost-share restoration 
projects through a pilot program that allows USDA to use up to 
15 percent of the available funds to enroll lands for 15 years 
or longer for critical habitat or species. For the remaining 
funds, USDA shall ensure that at least 15 percent of the funds 
be directed toward restoration of lands important for 
threatened and endangered species.
    The legislation provides the following levels of funding: 
for fiscal year 2002: $50 million; for fiscal year 2003: $100 
million; for fiscal year 2004: $100 million; for fiscal year 
2005: $125 million and for fiscal year 2006: $125 million.

Watershed risk reduction

    The legislation authorizes appropriations for a new program 
through fiscal year 2006 for up to $15 million annually that 
allows USDA to provide assistance, including the ability to 
purchase flood plain easements, in watersheds impaired by 
natural occurrences in order to safeguard lives and property.

Great Lakes Basin Program (GLBP) for soil erosion and sediment control

    The legislation authorizes the GLBP through fiscal year 
2006 for up to $5 million annually. The GLBP allows USDA to 
provide grants, technical assistance and education programs to 
reduce soil erosion and increase sediment control for the Great 
Lakes Basin.

Conservation of Private Grazing Land Initiative (CPGL)

    The legislation reauthorizes the CPGL through fiscal year 
2006 for appropriations up to $60 million annually.

Farmland Protection Program (FPP)

    The legislation expands the FPP to enable State and local 
agencies and private non-profit organizations to leverage 
federal funds to purchase development rights from owners of 
farms and ranches. The legislation also extends FPP to include 
farms and ranches with historical and archaeological resources.
    Of the available funds, the Secretary may use up to $10 
million annually for Farm Viability Grants for participating 
farms and ranches to develop business plans. The legislation 
provides the following levels of funding: for fiscal year 2002: 
$150 million; for fiscal year 2003: $200 million; for fiscal 
year 2004: $200 million; for fiscal year 2005: $225 million; 
and for fiscal year 2006: $250 million.

Grassland Reserve Program (GRP)

    The legislation establishes a new program to purchase 30-
year and permanent easements and for 30 year rental agreements 
on up to two million acres of natural grass and shrub lands 
indigenous to a locality to limit conversion of grazing lands.
    The legislation permits grazing and limited haying and 
mowing in a manner consistent with protecting plant and 
wildlife. The legislation also requires USDA to provide cost-
share and technical assistance for carrying out practices to 
restore grasslands.

State technical committees (STC)

    The legislation expands the responsibilities of STCs to 
conform with the increased responsibilities created under this 
title.

Use of symbols, slogans and logos

    The legislation permits the Secretary to allow the use, 
license or transfer of symbols, slogans and logos of USDA.

                            TITLE III--TRADE


Key food aid provisions

    The bill requires the Administrator of the U.S. Agency for 
International Development (U.S.-AID) and the Secretary of 
Agriculture to establish rules allowing streamlined program 
applications for programs under their control for experienced 
institutional partners. It changes the amount of administrative 
expenses that may be compensated for such projects under PL-
480, Title II, from a dollar range to a range of percentages 
(between five and ten percent) of the value of commodities 
used.
    The bill permits proceeds of sales of commodities for food 
aid projects under Title II, Food for Progress, and Section 
416(b) to be denominated in U.S. dollars.
    It modifies mandatory requirements for the administration 
and composition of Title II commodities and projects, and 
requires the Administrator of U.S.-AID to act on project 
proposals within 120 days of submission.
    PVO's (private voluntary organizations) will now be able to 
convert commodities to cash at prices that are reasonable for 
that particular market under all food aid programs.
    The Food for Progress program, under which donated 
commodities provide for development projects in recipient 
countries, is reauthorized and established at a 400,000 tonnage 
minimum per year.
    The bill also establishes the International Food for 
Education and Nutrition program, which began as a pilot in 
2000. It is designed to improve the educational opportunities 
and nutritional status of children in developing countries. The 
program is funded at $200 million a year for five years, as a 
function within the Food for Progress statute.
    The bill reauthorizes the Farmer-to-Farmer program, which 
funds technical exchanges between U.S. farmers and farmers in 
developing countries, increasing the share (from 0.4 percent to 
0.5 percent) of Title I and Title II funding which can be used 
for support of this program.

Key commercial export provisions

    The maximum loan term for the Supplier Credit Program is 
increased from six months to twelve months, and all other 
export credit programs are reauthorized.
    Funding is increased for the Market Access Program, ramping 
up to $190 million annually. The bill establishes priority for 
new program participants and programs in emerging markets for 
amounts available above the existing level of $90 million 
annually, and creates a quality export initiative program to 
identity high-quality U.S. agricultural products.
    The bill reauthorizes the Export Enhancement Program, and 
defines exchange rate manipulation by competing exporters and 
questionable pricing practices by State trading enterprises as 
unfair trade practices.
    Funding for the Foreign Market Development Cooperator 
Program is increased to $42.5 million annually within three 
years. The bill establishes priority for new program 
participants and programs in emerging markets for amounts 
available above $35 million annually.
    The bill authorizes development of a ``one-stop-shopping'' 
Federal website to assist aspiring exporters learn all they 
need to know about getting started. Authorization of 
appropriations is provided.
    A Biotechnology and Agricultural Trade Program is 
established in USDA that is designed to assist exporters facing 
problems exporting biotech-based products. The program is 
funded at $15 million annually for five years.
    The bill strikes restrictions on private financing of sales 
of food and medicine to Cuba, which were established in the 
Agriculture, Rural Development, Food and Drug Administration 
and Related Agencies Appropriations Act of 2001. A Sense of 
Congress resolution establishes Congressional priorities and 
concerns for bilateral and multilateral agricultural trade 
negotiations.

Additional reauthorizations

    This legislation also reauthorizes the Food Aid 
Consultative Group, assistance for stockpiling and distribution 
of shelf-stable foods, prepositioning commodities for emergency 
distribution, micronutrient fortification of donated 
commodities, the Bill Emerson Humanitarian Trust (emergency 
food reserve), and the Emerging Markets program.

                          TITLE IV--NUTRITION

    Representing the largest of the Federal nutrition programs, 
the Food Stamp Program is the primary focus of the nutrition 
title. The program mainly assists children (50 percent), older 
Americans (10 percent), and Americans with disabilities (10 
percent). Most of the other participants are individuals in 
working families. The Food Stamp Program is essential to 
transition from welfare to work. However, data show that 
reforms to the program are needed. These include simplifying 
the program, ensuring a smoother transition from welfare to 
work, reforming the quality control system used to evaluate 
States' performance, improving outreach efforts to make sure 
that people who qualify for the program are able to 
participate, and providing benefits for certain individuals 
made ineligible by welfare reform. Between 1994-98 the number 
of people who were eligible for the program but did not 
participate increased by 12percentage points, while the 
reliance in emergency feeding sites like soup kitchens and food 
pantries increased dramatically.

Program simplification

    Some of the provisions designed to simplify the Food Stamp 
Program include: allowing the States to conform Food Stamp 
income and resource rules with those in Temporary Assistance to 
Needy Families (TANF) cash assistance or Medicaid; simplifying 
the way in which housing costs are calculated; encouraging the 
States to adopt standard deductions, including ones for utility 
allowances and for people who live in certain group living 
arrangements; amending the procedure for determining earned 
income; extending semi-annual reporting to all households, not 
just those who have earnings; and better conforming to 
recertification rules in Medicaid, Supplemental Security Income 
(SSI), and the State Children's Health Insurance Program 
(SCHIP) by allowing periodic redetermination.

Welfare to work

    Provisions that will help participants more successfully 
transition from welfare to work include: an increase in the 
standard deduction to adjust for family size to provide 
additional benefits and increasing the length of time that a 
household can receive transitional benefits when it stops 
receiving TANF cash assistance. The bill also prohibits cutting 
off electronic benefits for participants, like the elderly, who 
tend to be eligible for a small amount of benefits and may want 
to save them up for up to six months before using them. It also 
allows able-bodied adults without dependents to participate in 
the Food Stamp Program for up to six out of 24 months, rather 
than the current limit of three out of 36 months, to give them 
more time to successfully find employment. However, the bill 
also eliminates the provision that 80 percent of all Food Stamp 
education and training funds be made available to this 
population only. Pilot programs to improve outreach and access 
are also included in the bill.

Quality control reform

    The quality control system used to assess the States' 
performance is revamped to be less punitive. The bill does 
institute new sanction procedures and rewards based on low 
error rates, compliance with a number of deadlines, and a 
State's enrollment of working families. Other provisions in the 
Food Stamp subtitle include expanding the definition of 
eligible food products to include vitamin-mineral supplements, 
eliminating Federal cost-neutrality rules to facilitate use of 
Electronic Benefits Transfer (EBT) systems, and several 
administrative provisions.

Legal immigrants

    The Personal Responsibility and Work Opportunity Act of 
1996 eliminated the ability of most legal aliens to participate 
in the Food Stamp Program. Over time, a number of bills have 
restored some of these benefits to some children, older adults, 
and disabled adults who were in the United States prior to 
August 22, 1996. This bill concentrates on particularly 
vulnerable groups by restoring benefits to all legal alien 
children and the disabled. It also removes a seven-year limit 
on the ability of refugees and people seeking asylum to 
participate in the program. Finally, it reduces, from 40 to 16 
quarters, the length of time that individuals must work in this 
country before they are eligible to participate in the Food 
Stamp Program.

New and reauthorized programs

    The title also reauthorizes a number of programs like The 
Emergency Food Assistance Program (TEFAP), the Food 
Distribution Program on Indian Reservations, the Commodity 
Supplemental Food Program, and the Community Food Projects. It 
consolidates the American Samoa block grant and the Puerto Rico 
Nutrition Assistance Programs and reauthorizes them, and 
increases the funding, by $10 million per year, for TEFAP 
processing, storage, and distribution costs. A Congressional 
Hunger Fellowship is established, a pilot program for providing 
schoolchildren with free fruits and vegetables is established. 
Funding is provided for a Senior Farmers' Market Program and 
for additional commodities for the School Lunch Program.

                            TITLE V--CREDIT


Funding for loans

    The credit title reauthorizes all USDA farm direct and 
guaranteed loan programs and increases the loan authorization 
levels: $3.75 billion in total for each fiscal year. Of the 
$750 million allocated for direct loans, $200 million is for 
farm ownership (FO) loans and $550 million is for farm 
operating (OL) loans. Of the $3 billion allocated for 
guaranteed loans, $1 billion is for FO loans and $2 billion is 
for OL loans.

Beginning farmers and ranchers

    The legislation focuses on making credit more accessible to 
beginning farmers and ranchers. The bill broadens the 
eligibility for direct ownership loans to those who have 
participated, as opposed to being the sole manager of, the 
business operations of a farm operation for at least three 
years; provides USDA the authority to refinance ``bridge 
loans'' made by a commercial lender to a beginning farmer or 
rancher who has been approved for a USDA farm ownership loan 
but is awaiting funding; increases the limit on direct farm 
ownership debt for a beginning farmer or rancher from $200,000 
to $250,000 and indexes the limit to inflation; provides that 
as part of the down payment program for beginning farmers and 
ranchers, USDA shall finance 40 percent of the loan (current 
law is 30 percent) and provides a repayment term of 20 years 
(current law is 10 years); directs the USDA to create a pilot 
program in which the USDA will guarantee loans made by a 
private seller of a farm or ranch to a qualified beginning 
farmer on a contract land sale basis; provides that beginning 
farmers and ranchers will receive an additional one percent 
interest rate subsidy (capped at four percent) over non-
beginning farmers (capped at three percent) who participate in 
the interest rate reduction program and increases the maximum 
amount of funds for this program to $750 million and provides 
that 25 percent of the program's subsidized funds are reserved 
for assisting beginning farmers and ranchers until April 1 of 
each fiscal year.

Farm lending program improvements

    The bill also makes other changes to provisions of the 
Consolidated Farm and Rural Development Act to improve the USDA 
farm lending programs. The legislation allows the Secretary to 
waive term limitations for a farmer or rancher, one time only, 
for an additional period of two years; allows the Secretary to 
waive the seven-year eligibility limitation on direct operating 
loans for Native American farm operations on tribal lands if 
she determines thatcommercial credit is not generally available 
for such operations; expands USDA's authority to allow the interest 
rate on a direct loan that is being rewritten to be the rate in effect 
on the date that a borrower applies for loan; reduces paperwork 
requirements for many farmers by raising the limit on low documentation 
guaranteed loans from $50,000 to $100,000; makes permanent the interest 
rate reduction program; provides that USDA work with the State 
Conservationists to consider selling or granting easements on land in 
USDA inventory for the purpose of farmland preservation; and provides 
those who owe recapture amounts on shared appreciation agreements, or 
those who have amortized the recapture amounts, the option of providing 
farmland protection and conservation use easements on their land in 
return for forgiveness of the recapture amount.

Farm Credit System and Federal Agriculture Mortgage Corporation (FAMC)

    The bill amends the authorities provided to FAMC and the 
Farm Credit System. It increases the number of FAMC Board of 
Directors from 15 to 17 and provides that the chairperson of 
the board will be elected by the board; provides the Farm 
Credit System authority to finance agriculturally-related 
equipment and goods overseas irrespective of whether these 
goods will be used on farms in the importing country; provides 
the Farm Credit System Insurance Corporation the ability to 
weigh the diminished risk associated with the certain 
guaranteed loans and to adjust premiums charged to the Farm 
Credit System accordingly; eliminates certain ``territorial 
concurrence'' requirements on Farm Credit System lenders so 
that the lenders can participate in syndicated or 
``participation'' loans in other Farm Credit System geographic 
territories without seeking the permission of the Farm Credit 
System lender in that territory.

                      TITLE VI--RURAL DEVELOPMENT


National Rural Cooperative and Business Equity Fund

    To revitalize rural communities and enhance farm incomes by 
encouraging sustainable rural business development, this 
provision authorizes the National Rural Cooperative and 
Business Equity Fund. It authorizes the appropriation of $150 
million in funds to be matched by at least an equal amount 
contributed by private investors. USDA will guarantee 50 
percent of each investment made by a private investor, with a 
maximum total guarantee of $300 million in private investments 
in the Fund. Debentures issued by the fund and guaranteed by 
USDA shall not exceed $500 million. The Fund will make equity 
and semi-equity investments in rural businesses. No single 
investment shall exceed the greater of $2 million or seven 
percent of the Fund. The total investment made in a company may 
not exceed 20 percent of the entire equity stake of the company 
nor more than half of the private equity stake of the concern. 
The Fund shall seek to make equity investments in a variety of 
projects with a significant share being smaller enterprises and 
cooperative and noncooperative enterprises, but not retail 
businesses. The fund will be managed by a 14 member board, with 
three of those members determined by USDA and the rest 
determined by private investors.

Rural Business Investment Program

    This provision permits USDA to make grants, guarantee 
debentures and enter into participation agreements with Rural 
Business Investment Companies. To be a Rural Business 
Investment Company (RBIC), a company must be for-profit, have 
an experienced management team, and invest in rural areas. USDA 
may guarantee the issuance of debentures for terms up to 15 
years for up to 300 percent of the private capital of the 
company, increasing the amount of equity that may be invested. 
The program provides for the collection of assets in cases 
where the Federal Government makes a payment on a debenture. It 
provides for grants of up to $1 million to RBICs to provide 
technical assistance to enterprises in which the RBICs invest, 
and sets the minimum private capital requirements of the RBICs 
at $5 million. Generally, $10 million is needed to issue 
insured debentures with flexibility by USDA, and 75 percent of 
the investments must be made in rural areas. Investment by 
banks and Farm Credit System institutions are limited to 5 
percent of capital and with certain additional limitations. The 
program supports issuance of up to $350 million in debentures 
and up to $50 million in grants.

Full funding of pending rural development loan and grant applications

    This provision provides full funding to clear the backlog 
of pending rural development loan and grant applications. 
Pending qualified applications for community facility grants 
and direct loans, water and waste disposal grants and direct 
loans, rural water and wastewater technical assistance and 
training grants, business and industry guaranteed loans, 
emergency community water assistance grants, and solid waste 
management grants will be eligible for funding under this 
provision. Applications in the pre-application phase are not 
eligible for funding under this provision. The funds in the 
account established under this section will be available only 
after funds appropriated in the annual appropriations act for 
fiscal 2002 for these loans, loan guarantees and grants have 
been exhausted.

Rural Endowment Program

    This program provides rural communities with technical and 
financial assistance to develop and implement comprehensive 
economic development strategies. Initial grants to communities 
to develop comprehensive economic development strategies will 
not exceed $100,000. Approved entities will then be eligible 
for an endowment grant of up to $6 million to implement the 
strategy. Each entity's non-Federal share shall be 50 percent 
of the amount received in grant funds, except in cases of 
small, poor rural areas where USDA determines that a lower non-
Federal share is allowable. This provision makes $82 million in 
mandatory funds available to carry out the program during 
fiscal years 2002 and 2003, with not more than $5 million to be 
obligated for planning grants, not less than $75 million for 
endowment grants and not less than $2 million for technical 
assistance. Such appropriations as are necessary are authorized 
to carry out the program for each of fiscal years 2004 through 
2006.

Enhancement of access to broadband service in rural areas

    The bill provides $100 million in mandatory dollars a year 
for fiscal years 2002 through 2006 for grants and loans at four 
percent or market rate interest for broadband access. The 
aggregate value of all loans to be provided cannot exceed $2 
billion. Funding could be used for construction, improvement, 
or acquisition of equipment. The funding would flow through the 
Rural Utilities Service. Initial allocations are made to the 
States based on the number of cities in a State with 
populations under 2500. If the funds are not obligated by April 
1, the funds go intothe national pool. The program would be 
limited to communities with populations under 20,000. Broadband speed 
and other standards are to be reconsidered every three years.

Value-added agricultural product market development grants

    The bill provides $75 million a year for fiscal years 2002 
through 2006 in mandatory funding to make value-added 
agricultural product market development grants, expands the 
eligibility for these grants to nonprofit organizations, and 
broadens the categories of activities eligible for grants. It 
creates a five percent reserve for marketing, packaging or 
processing of certified organic agricultural products. Funding 
for the Agricultural Marketing Resource Center, created by USDA 
as authorized in the original authorization to provide 
technical assistance, is also increased.

National Rural Development Partnership

    USDA will continue the National Rural Development 
Partnership, which is composed of a Coordinating Committee and 
State rural development councils. The Coordinating Committee 
will lead and coordinate the strategic operation and policies 
of the Partnership and will provide annual reports to Congress. 
The role of the Federal Government will be that of a partner 
and facilitator, with Federal agencies providing technical and 
administrative support. Private and nonprofit sector 
organizations act as full partners and cooperate with 
government in developing innovative approaches to solving 
problems in rural development. State rural development councils 
shall have a nonpartisan membership that is broad and 
representative of the economic, social and political diversity 
of the State. The councils shall facilitate collaboration, 
enhance effectiveness and delivery of Federal and State 
programs in rural areas, monitor policies and programs that 
address, or fail to address, rural needs, and facilitate the 
development of strategies to reduce or eliminate conflicting or 
duplicative administrative or regulatory requirements. State 
rural development councils may solicit funds to supplement and 
match Federal funds. A State rural development council shall 
provide matching funds, or in-kind goods or services, to 
support the activities that are not less than 33 percent of the 
amount of Federal funds received.

Water or waste disposal grants

    This provision increases the authorization for 
appropriations for water and waste disposal grants from $590 
million to $1.5 billion, and also authorizes up to $30 million 
per year to USDA to make grants to qualified private nonprofit 
entities to capitalize revolving funds to finance small water 
and wastewater projects, including assistance of up to $100,000 
per project for pre-development, equipment replacement, small 
scale service extension or other small projects.

Rural business opportunity grants

    This grant program is extended to 2006.

Rural Water and Wastewater Circuit Rider Program

    This provision authorizes $15 million a year for fiscal 
years 2003 through 2006 to pay for technical assistance to 
local water systems.

Multi-jurisdictional regional planning organizations

    The bill authorizes $30 million a year for fiscal years 
2003 through 2006 to fund grants of up to $100,000 to multi-
jurisdictional regional planning and development organizations 
to pay for costs of providing assistance to local governments 
to improve the infrastructure, services, and business 
development capabilities of local governments and local 
economic development organizations. A local match is required.

Certified nonprofit organizations sharing expertise

    The legislation provides for certification by USDA of 
nonprofit organizations with experience in providing technical 
assistance in one or more rural development fields who desire 
to share that expertise. The provision authorizes $20 million a 
year for fiscal years 2003 through 2006 for grants to certified 
nonprofit organizations to help them provide this technical 
assistance. To receive grants, nonprofit organizations must 
develop a plan describing how grant funds will be used. USDA 
shall make a list of certified organizations available to the 
public.

Loan guarantees for certain rural development loans

    USDA will be allowed to guarantee community facility and 
water and waste facilities loans for projects financed in part 
by the issuance of tax-exempt bonds.

Rural Firefighters and Emergency Personnel Grants Program

    The bill provides $10 million in fiscal year 2002 and $30 
million a year in fiscal years 2003 through 2006 for 
firefighter and emergency medical first responder training. 
Three areas are covered: firefighting, emergency medical 
practices and responding to hazardous materials and bioagents 
in rural areas. Not less than 60 percent of the funds may go to 
scholarships to provide the training. Up to 40 percent of the 
funds may go to fund facility improvements, equipment or 
operating costs of State or regional training centers.

Emergency Community Water Assistance Grant Program

    The program is extended through 2006.

Water and Waste Facility Grants for Native American Tribes

    The bill provides an authorization of $20 million a year 
for water and waste facility grants to benefit Native American 
tribes.

Water Systems for Rural and Native Villages in Alaska

    The bill extends this provision through 2006.

Rural Cooperative Development Grants

    The grant program is extended through 2006.

Grants to broadcasting systems

    The bill authorizes $5 million a year for fiscal years 2002 
through 2006 in appropriated funds for grants to statewide 
nonprofit public television broadcasting systems.

Business and Industry direct and guaranteed loans

    This provision amends the Consolidated Farm and Rural 
Development Act by: allowing the guarantee of loans to farmers, 
ranchers or cooperatives for the purpose of buying stock for 
the expansion or creation of a cooperative venture that will 
process agricultural products; providing direction to USDA in 
assessing the appropriateness of loan guarantees; allowing 
guaranteed loans to farmers and ranchers to join existing 
cooperatives that will sell the agricultural products produced 
by these farmers and ranchers; allowing processing contracts 
during the initial period after start-up of a new cooperative 
while the new processing facility is being completed; allowing 
guaranteed loans to cooperatives headquartered in metropolitan 
areas, as long as the loans benefit rural areas; allowing 
cooperatives to receive guarantees on refinanced loans in 
certain circumstances; allowing USDA to require appraisals done 
in connection with loan guarantees to be conducted by 
specialized, as opposed to general, appraisers; allowing USDA 
to assess an initial fee for loan guarantees, not to exceed two 
percent of the balance due on the loan.

Value-Added Intermediary Relending Program

    The bill adds a new section to the Intermediary Relending 
Program providing that USDA shall make loans under the terms of 
the program for projects to establish, enlarge and operate 
enterprises that add value to agricultural products. The 
provision establishes a preference for bioenergy projects, and 
limits loans to $2 million except in cases where the eligible 
intermediary is a State agency.

Use of rural development loans and grants for other purposes

    The bill allows USDA to permit a loan or grant recipient to 
use the loan or grant for other purposes, meeting certain 
requirements, when USDA determines that the circumstances under 
which the loan or grant was made have significantly changed.

Simplified application forms for Business and Industry Loans and Loan 
        Guarantees

    This provision allows simplified application forms for 
guarantees of farmer program loans under $100,000 and Business 
and Industry guaranteed loans under $400,000. It also provides 
that after 2003, USDA may increase to $600,000 the limit on the 
size of Business and Industry loans eligible to use the 
simplified application process.

Rural Entrepreneurs and Microenterprise Assistance Program

    This provision establishes a program to provide low and 
moderate income individuals with the skills necessary to 
establish new small businesses in rural areas, and to provide 
continuing technical assistance through local organizations as 
these new small businesses begin operating. The funds will also 
provide the resources for small loans and loan guarantees 
($35,000 or less) to rural entrepreneurs. This program is 
modeled on an existing SBA microloan program that has a proven 
track record. $10 million a year is provided for this program 
for each of the fiscal years 2002 through 2006.

Rural seniors

    The bill establishes an interagency coordinating committee 
to study health care, transportation, technology, housing, 
accessibility, and other areas of need for rural seniors; to 
identify successful examples of senior care programs that can 
serve as models for other rural communities; and to submit 
recommendations to USDA, the House Committee on Agriculture and 
the Senate Committee on Agriculture, Nutrition and Forestry. 
The bill authorizes $25 million a year for fiscal years 2002 
through 2006 for grants to nonprofit organizations of up to 20 
percent of the cost of programs that provide facilities, 
equipment, and technology for seniors in rural areas.

Community facilities

    This provision amends the community facilities program to 
provide a reserve of 12.5 percent of community facilities 
program funds in each fiscal year to be used for senior 
facilities and a reserve of 10 percent of those funds to be 
used for child care facilities. In each case the reserve is 
effective until April 1 of each fiscal year, after which the 
funds may be used for other community facility purposes.

Rural Telework

    This provision authorizes $30 million annually for the 
Program. Nonprofit organizations and educational institutions 
may receive a grant of up to $500,000 for obtaining equipment, 
facilities and operating costs for a Rural Telework Center. A 
match equal to at least 50 percent of the grant from non-
Federal sources is required. The bill provides for the 
selection of a Rural Telework Institute authorized to receive 
up to $5 million a year to provide research, develop best 
practices and develop innovative projects.

Historic barn preservation

    The bill provides that USDA will assist States in 
developing a listing of historic barns, collecting and 
disseminating information on these barns and promoting their 
preservation. The provision authorizes a total of $25 million 
for the period 2002 through 2006 for grants under this section.

Grants for emergency weather radio transmitters

    This provision authorizes $2 million a year to provide 
grants to public and nonprofit entities to acquire radio 
transmitters to increase the coverage of National Oceanic and 
Atmospheric Administration's emergency weather radio broadcast 
system in rural areas.

Bioenergy and biochemical projects

    This provision establishes a preference in rural 
development assistance programs for bioenergy and biochemical 
projects.

Delta Regional Authority

    This provision extends the Delta Regional Authority through 
2006.

Special Environmental Assistance for the Regulation of Communities and 
        Habitat (SEARCH) grants for small communities

    This provision establishes a new grant program administered 
by States through an independent citizens' council for small 
communities with populations under 2,500 for the purpose of 
providing assistance with initial feasibility and environmental 
compliance for rural developmentprojects. States may be awarded 
a grant not to exceed $1 million to award Special Environmental 
Assistance for the Regulation of Communities and Habitat grants to 
small communities. The provision authorizes appropriations of $51 
million to carry out this section.

Northern Great Plains Regional Authority

    This provision re-establishes the Northern Great Plains 
regional authority, to be composed of one member appointed by 
the President and confirmed by the Senate, and the Governors of 
the States participating in the Authority. The bill provides 
that the Authority may approve grants to States and public and 
nonprofit entities for projects including transportation and 
telecommunication infrastructure projects, business development 
and entrepreneurship, and job training. The provision creates a 
priority for funding targeted to areas of extreme economic 
distress and provides that each State is guaranteed at least a 
certain minimum of the overall funding.

Alternative Agricultural Research and Commercialization Corporation

    The bill repeals the corporation's authorization and 
provides for disposition of its assets.

Telemedicine and distance learning services in rural areas

    The provision is extended through 2006.

Guarantees for bonds and notes issued for electrification or telephone 
        purposes

    The bill authorizes USDA to provide guarantees of bonds and 
notes issued by eligible private lenders, the proceeds of which 
are used to provide private capital for rural electric and 
telephone purposes that would otherwise qualify for loans under 
the Rural Electrification Act. USDA may deny the request of a 
lender for a guarantee if the lender does not have the 
expertise or experience, is not qualified, or the bonds are not 
financially sound. Bond-funded electric generation projects are 
specifically excluded from this program. The provision 
establishes a mechanism under which private capital will be 
provided for the Rural Economic Development Loan and Grant 
(REDL&G) Program. Lenders that receive a guarantee shall pay an 
annual fee of 30 basis points, and these fees will be used as 
budget authority to finance economic development projects 
eligible under the program, with up to a third to finance the 
cost of the guarantee program. The provision authorizes 
appropriations to cover the possible costs of the program.

Expansion of 911 access

    The bill authorizes USDA to make telephone loans to State 
or local governments, Indian tribes, or other public entities 
for facilities and equipment to expand 911 access in 
underserved rural areas, and authorizes such appropriations as 
are necessary to carry out the section.

                          TITLE VII--RESEARCH

    The research title extends through 2006 most existing 
research program authorizations established in previous laws. 
The title also creates a number of new research programs. In 
terms of funding overall, this bill provides for $175 million 
per year in mandatory funding for agricultural research, an 
increase of $635 million over baseline for the 2002-06 period.

Research Title Highlights

    Funding for the Initiative for Future Agriculture and Food 
Systems is increased from $120 to $145 million per year for 
fiscal 2002-06. This program directs research funding to 
agriculture priority areas though a competitive grant system. 
The bill directs USDA to ensure, as much as possible, that 
institutions serving minorities receive no less than 10 percent 
of the funding under this program.
    Education grants programs for Hispanic-serving institutions 
are reauthorized through 2006.
    The special authorization for biosecurity planning and 
response is amended to create a special account for 
appropriations for agricultural research, education, and 
extension activities for biosecurity. Under this section funds 
may be used under any authority available to the Secretary to 
reduce the vulnerability of the United States food and 
agricultural system to chemical or biological attack.
    The bill creates a new program for rural research funded at 
$15 million a year. The program would fund rural policy 
research on topics such as: rural sociology, effects of 
demographic change, needs of groups of rural citizens, rural 
community development, rural infrastructure, rural business 
development, rural education and extension programs, and rural 
health. These programs will help develop the policy tools 
necessary to build a solid foundation within rural communities 
for long-term growth and improved quality of life.
    The legislation creates a new program to assist beginning 
farmers and ranchers at a level of $15 million a year. The 
program will provide competitive grants to support new and 
established local and regional training, education, outreach, 
and technical assistance initiatives aimed at beginning farmers 
or ranchers. This program will allow new farmers or ranchers to 
acquire entrepreneurial, financial, and other business skills; 
conservation assistance; risk management education; innovative 
farm and ranch transfer strategies; and basic livestock and 
crop farming practices. In addition, 25 percent of the funds 
are set aside to be used to support programs and services that 
address the needs of limited resource and socially 
disadvantaged beginning farmers or ranchers.
    The bill allows USDA to make competitive grants for the 
acquisition of special purpose scientific research equipment 
for use in the food and agricultural sciences programs of 
eligible institutions which are: (1) a college or university; 
or (2) a State cooperative institution. The amount of the grant 
made to an eligible institution under this section may not 
exceed $500,000. The program is authorized for appropriations 
for up to $50,000,000 annually for each of fiscal years 2003 
through 2006.
    This provision establishes a priority for grants to 
institutions that have the goals of: forming interdisciplinary 
teams to review or conduct research, conducting studies on the 
biosafety of genetically modified agricultural products, 
evaluating identity preservation systems, establishing 
international partnerships, or reviewing the nutritional 
enhancement and environmental effects of genetically modified 
agricultural products.
    The assistive technology program for farmers with 
disabilities is reauthorized through 2006.
    The bill increases the authorizations for formula funds for 
research and extension programs, and makes technical changes 
that facilitate the ability of historically African American 
and Native American institutions to serve their populations.
    The legislation includes a variety of provisions that 
strengthen organic and sustainable agriculture research 
programs, including increased reporting of organic marketing 
data, the use of genomics to improve varieties for organic 
production and research to assess the needs of the organic 
industry regarding identity preservation.
    The bill includes a Sense of Congress provision that calls 
for the doubling of federal investments in food and agriculture 
research over the next five years.

                          TITLE VIII--FORESTRY

    The Department of Agriculture's longstanding commitment to 
provide important forestry assistance to private landowners is 
continued in the forestry title of the farm bill.

New forestry programs

    A sustainable forest management program is created to 
provide cost-share assistance to non-industrial private forest 
landowners who agree to develop a management plan and implement 
approved activities. The program is to be administered by the 
Secretary, in coordination with State foresters and State 
stewardship coordinating committees. Mandatory funding of 
$48,000,000 is available annually.
    A program is established to assist in the development of 
sustainable forestry cooperatives owned by private forest 
landowners, of which at least 51% must be farmers or ranchers. 
The program shall provide competitive grants to non-profit 
organizations that have demonstrated expertise in cooperative 
development. Mandatory funding of $2,000,000 is available 
annually.
    A community and private land fire assistance program is 
established to allow the Secretary to undertake a variety of 
activities aimed at preventing fires on both Federal and non-
federal lands. The program authorizes appropriations of 
$35,000,000 annually.
    A wildfire and hazardous fuel purchase program authorizes 
the Secretary to make grants to eligible entities that use 
hazardous fuels to generate electricity. This provision 
authorizes appropriations of $50,000,000 annually. The program 
also authorizes the Secretary to enter into contracts for the 
removal of hazardous fuels from forest lands to implement the 
National Fire Plan.
    A watershed forestry assistance program authorizes the 
Secretary to establish a cost-share program to provide to 
States, through State foresters, technical, financial, and 
related assistance to address water quality and watershed 
concerns on forest land. $20,000,000 in appropriations is 
authorized annually to carry out the program.
    A sustainable forestry outreach initiative is created to 
educate landowners about sustainable forestry, professional 
forestry advice, and available resources to assist landowners 
in practicing sustainable forestry.

Other provisions

    Other provisions in the bill: (1) require the Secretary to 
establish at least two forest fire research centers at 
institutions of higher education; (2) allow the Secretary to 
make grants or other arrangements to carry out the Cooperative 
Forestry Assistance Act; (3) add the United States Fish and 
Wildlife Service to State Coordinating Committees, and re-
affirm the importance of the McIntire-Stennis Cooperative 
Forestry Act.

Reauthorizations

    The bill reauthorizes the Forestry Incentives Program, the 
Renewable Resources Extension Act (authorization of 
appropriations is increased to $30,000,000 each year) and the 
Office of International Forestry.

                            TITLE IX--ENERGY

    The energy title establishes several new programs providing 
incentives to farmers, ranchers and rural small businesses to 
develop renewable energy supplies on their lands and to 
increase energy efficiency.

New programs

    A competitive grant and loan program is established to have 
eligible entities provide farmers, ranchers, and rural small 
businesses comprehensive energy audits, including renewable 
energy development assessments. Mandatory funding of 
$15,000,000 is available annually.
    A grant and loan program is established so that farmers, 
ranchers, and rural small businesses can purchase renewable 
energy systems and make energy efficiency improvements. 
Mandatory funding of $33,000,000 is available annually.
    A competitive grant and loan program is established to 
assist cooperatives and business ventures at least 51% owned by 
farmers or ranchers for the development of renewable energy 
projects to produce electricity. Mandatory funding of 
$16,000,000 is available annually.
    A competitive grant program is established to support the 
development of plants that produce multiple products such as 
fuels, chemicals and electricity from biomass. Mandatory 
funding of $15,000,000 is available annually.
    A competitive grant program is established to demonstrate 
the use of hydrogen and fuel cell technologies in farm and 
rural applications. Mandatory funding of $5,000,000 is 
available annually.
    A grant and loan program is established to assist rural 
electric cooperatives and rural electric utilities in 
developing renewable energy supplies. Mandatory funding of 
$9,000,000 is available annually.
    New research, development and demonstration programs are 
established to promote understanding of and measurement of 
carbon sequestration in soils and plants. The programs are 
authorized for appropriations at varying levels.

Other provisions

    Other provisions in the bill include a biobased products 
purchasing requirement for federal agencies if the products are 
on a USDA biobased products list and are comparable in price, 
performance, and availability to traditional products. In 
addition, the section includes a requirement that USDA develop 
a labeling program for biobased products. Mandatory funding of 
$2,000,000 is available annually.
    The Biomass Research and Development Act of 2000 is 
extended. Mandatory funding of $15,000,000 is available 
annually.
    A competitive grant program to educate the public and 
entities with vehicle fleets about the benefits of biodiesel 
fuel use is authorized with $5,000,000 in annual 
appropriations.
    The bill includes a stipulation that the Secretary, through 
the Cooperative State Research, Education and Extension 
Service, and in consultation with the Natural Resources 
Conservation Service, may provide education and assistance to 
farmers and ranchers for the development of renewable energy 
resources.
    The bill includes Senses of Congress regarding a national 
renewable fuels standard and the bioenergy program of the 
Department of Agriculture.

                         TITLE X--MISCELLANEOUS


Country of origin and quality grade labeling

    Section 1001 requires retailers of certain commodities 
(beef, lamb, pork, farm-raised fish, perishable agricultural 
commodities and peanuts) to inform consumers of the country of 
origin of the commodity. The requirements of this provision do 
not apply to processed beef, lamb and pork items or to frozen 
entrees containing beef, lamb or pork, nor do they apply to 
food service establishments. Section 1002 prohibits imported 
meat or meat food products from bearing a label indicating a 
quality grade issued by the Secretary.

Crop insurance

    Section 1011 amends Section 508(e)(4) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(e)(4)) by striking the limitation 
on the prohibition against continuous coverage. Section 1012 
amends Section 508(m)(3) of the Federal Crop Insurance Act (7 
U.S.C. 1508(m)(3)) to require that adjustments to the 
procedures described in this subsection be made by the 2003 
reinsurance year. Section 1013 amends and adds to the list of 
loans and payments for which persons who produce agricultural 
commodities on highly erodible land without meeting 
conventional requirements or on converted wetland, are 
ineligible. It also amends and adds to the list of loans and 
payments for which persons convicted of cultivating controlled 
substances are ineligible.

General provisions

    Section 1021 addresses stockyard practices involving 
nonambulatory (or ``downed'') livestock. This section provides 
that it will be unlawful for any stockyard owner, market 
agency, or dealer to buy, sell, give, receive, transfer, 
market, hold, or drag any nonambulatory livestock unless the 
livestock has been humanely euthanized. This provision does not 
apply to animal handling practices on non-GIPSA farms, nor does 
it apply in a case where a downed animal receives veterinary 
care rendering the animal ambulatory.
    Section 1022 reauthorizes and extends through 2006 the 
cotton classification activities of the Department of 
Agriculture under the Cotton Statistics and Estimates Act.
    Section 1023 amends the Food Security Act of 1985 to 
conform to the revised Uniform Commercial Code. It allows 
filings for security interests in farm products to identify the 
State, county, or parish in which the product is located, 
instead of requiring the exact description of property where 
the product is located.
    Sections 1024 and 1025 amend the Animal Welfare Act to 
prohibit the transportation, for fighting purposes, of animals 
in interstate and foreign commerce and increase the penalties 
for violations.
    Section 1026 requires USDA to carry out an outreach and 
technical assistance program to encourage and assist socially 
disadvantaged farmers and ranchers in owning and operating 
farms and ranches, and in participating equitably in the full 
range of agricultural programs offered by USDA. This section 
allows USDA to make grants and enter into contracts with 
qualified entities to provide information and technical 
assistance under this provision. Appropriations are authorized 
to carry out the section.
    Section 1027 requires USDA to report election data related 
to the representation of socially disadvantaged groups on 
county, area, and local committees. It requires USDA to 
promulgate and publish in the Federal Register proposed uniform 
guidelines for conducting elections for members and alternate 
members of county, area, and local committees. The procedures 
must insure, through appointment or other means, that 
additional voting members of the committee fairly represent 
socially disadvantaged groups if they are under-represented 
within that area.
    Section 1028 reauthorizes and extends the Pseudorabies 
Eradication Program through 2006.
    Section 1029 authorizes, subject to appropriations, a Tree 
Assistance Program under which USDA may provide assistance to 
eligible orchardists in case of natural disaster. Assistance 
will consist of reimbursement of 75 percent of the cost of 
replanting trees lost due to a natural disaster, in excess of 
15 percent mortality as adjusted for normal mortality, or at 
the discretion of the Secretary of Agriculture, sufficient 
seedlings to reestablish the stand.
    Section 1030 provides $3.5 million in funds for fiscal year 
2002 for the Secretary to establish a national organic 
certification cost-share program to assist producers and 
handlers of agricultural products in obtaining certification 
under the national organic production program established under 
the Organic Foods Production Act of 1990. Payments to producers 
or handlers are limited to $500, and the federal share of the 
certification cost will be no more than 75 percent of the total 
certification cost incurred.
    Section 1031 authorizes $3 million to be appropriated to 
establish a Food Safety Commission. The Commission will make 
specific recommendations that build on and implement the 
recommendations contained in the National Academy of Sciences 
report entitled ``Ensuring Safe Food from Production to 
Consumption'' and serve as the basis for draft legislation to 
improve the food safety system.
    Section 1032 expresses the sense of Congress that the 
Humane Methods of Slaughter Act should be fully enforced and 
that USDA should resume tracking violations of the Act.

Administration

    Section 1041 allows the Secretary to promulgate regulations 
to implement this Act, and provides for procedures for doing 
this. Section 1042 describes the effect of this Act on existing 
law

                   III. Purpose, Need and Background


                      TITLE I--COMMODITY PROGRAMS


                               Background

    For almost 60 years the United States provided assistance 
to farmers in times of low commodity prices. This practice was 
abandoned in 1996 when Congress passed the Federal Agriculture 
Improvement and Reform Act of 1996 (FAIR) which purported to 
help U.S. farmers make the transition from government 
dependence to greater market reliance.
    When the FAIR Act was being considered, the U.S. farm 
sector enjoyed high prices and a robust market expansion 
period. Commodity prices were high and were projected to remain 
high during the seven years of the farm program. Years of 
favorable weather in major producing regions, the financial 
crisis in East Asia in late 1997, and a strong U.S. dollar all 
contributed to dramatically lower commodity prices than any of 
the experts forecasted.
    After less than two years of farm policy under the FAIR Act 
with commodity prices 50 percent or more below their 1995-1996 
peaks, producers learned that the transition payments were 
inadequate to meet their cash flow needs. Congress responded 
with ad hoc emergency payments in 1998, 1999, 2000 and again in 
2001. While these payments helped alleviate the crisis in the 
farm sector, the payments did nothing to address questions of 
whether the underlying agricultural policies were inadequate 
for U.S. agriculture.
    Although American agriculture is one of the most efficient 
sectors of the U.S. economy, that efficiency has not brought 
prosperity to those who produce the food and fiber in this 
country. Producers of row crops face the fourth consecutive 
year of low commodity prices compounded by rising costs of 
production. The ad hoc assistance of the last four years was 
neither carefully crafted, nor sustainable for the future.
    The budget resolution provided additional funds for the 
Committee on Agriculture, Nutrition and Forestry to improve 
farm programs and provide better income protection for U.S. 
farmers and ranchers.
    The Committee invited numerous agricultural organizations 
to present their views on how farm programs could be modified 
to benefit the producers those organizations represent. 
Predictably, the Committee heard a wide range of suggestions on 
how to improve the current program. There were, however, common 
suggestions and some ideas that won broad support.
    First, every organization supported producer flexibility. 
Even those organizations that suggested supply management in 
one form or another wanted to retain flexibility. The 
flexibility to plant a wide range of agricultural crops without 
losing program benefits is an important component of current 
law that will be continued in the next farm program.
    Producers have had planting flexibility for six years. For 
many producers their recent cropping history is very different 
than the bases on which they have been receiving payments. The 
Committee bill adds soybeans and other oilseeds to the list of 
contract commodities and allows producers to update their 
contract acreage and payment yields to reflect their recent 
production history. However, those producers who choose not to 
update acres and yields will be able to retain their current 
contract acres and yields and add oilseeds acres and recent 
yield experience to a maximum of the eligible cropland on the 
farm.
    This change in policy will provide greater equity for those 
producers who have been growing the covered commodities, but 
who happen to farm land that has a relatively low base or a low 
payment yield. During the years when payment yields were 
established--1981 through 1985--some producers were able to 
establish relatively high yields while neighbors with similar 
production experience were unable to obtain the same advantage 
The payment yield data is a generation old. It is time to give 
producers the option of providing recent acreage and yield 
data.
    Second, most organizations called for some form of counter-
cyclical payment to support farm income when commodity prices 
or farm income falls. This has been the greatest weakness of 
the current program and one which the Committee addresses in 
two ways.

                  Direct and counter-cyclical payments

    The bill provides very substantial direct fixed payments 
during the first two years and lower payments in the third, 
fourth and fifth years. As the direct fixed payments decline, 
the bill authorizes counter-cyclical payments to assure that 
producers receive at least the income protection price on their 
contract acreage. This protection is available as long as the 
producer complies with conservation of highly erodible land and 
wetlands and uses the contract acreage for an agricultural use 
other than the production of prohibited fruits and vegetables.

        Marketing assistance loans and loan deficiency payments

    The marketing assistance loans and loan deficiency payments 
provide additional counter-cyclical support for each bushel, 
pound or hundredweight of each loan commodity produced. Loan 
rates for most commodities have been frozen at 1996 levels. The 
Committee-passed bill raises the loan rates for all commodities 
with the exception of soybeans and extra long staple cotton. 
The soybean loan rate is slightly lower than the $5.26 per 
bushel available for the 2001 crop and the ELS cotton loan rate 
is held constant.
    The loan rates for the three largest row crops--corn, 
soybeans and wheat--are carefully balanced to reduce unintended 
incentives to plant one crop over another. The loan rates for 
other commodities are adjusted to assure that producers are not 
discouraged from planting those crops. For instance, the grain 
sorghum loan rate is established at the same level as the corn 
loan rate so farmers will consider planting grain sorghum 
rather than the alternative corn.
    Likewise, the bill raises the loan rate for minor oilseeds 
to give producers an alternative to wheat. In implementing the 
marketing assistance loan program for minor oilseeds, the 
Committee directs the Department to establish one sunflower 
loan rate and loan repayment rate for eachcounty. The 
Department has established separate loan programs for oil-type and 
confection or other-type sunflower seed. This differentiation does not 
accurately reflect market relationships, and the Committee is concerned 
that this implementation disadvantages confection-type sunflower seed 
growers and threatens the domestic confection industry when oil-type 
sunflower prices are below marketing loan levels. The Committee 
understands under these circumstances grower contracts could be offered 
at levels unrepresentative of world market prices, presenting the 
opportunity for foreign competitors to contract for and export 
confection products at levels that undercut U.S. access to traditional 
foreign markets.
    Under this Act the Committee expects the Department to 
implement a combined loan program that treats all sunflower 
seed equally. The Committee directs the Department to establish 
one county loan rate for sunflower seed according to the 
national average rate for minor oilseeds in this Act ($0.095 
per pound). The Committee expects the Department of continue 
announcement of weekly loan repayment rates for sunflower 
reflecting local market prices which minimize potential loan 
forfeitures. Accordingly, sunflower seed loan repayment rates 
should reflect oil-type sunflower seed local market prices.
    The bill adds a new loan program for the pulse crops--dry 
peas, lentils and chickpeas. These crops compete for acreage 
against those crops that have long-standing loan programs. The 
new loan program for the pulse crops is intended to eliminate 
the disincentive to produce those crops.

                                 Dairy

    At a farm-level value of $23 billion, dairy is the second-
largest farm commodity produced in this country, behind only 
beef.
    The dairy industry is unique among agricultural commodities 
because milk is highly perishable, and not easily transported 
or stored. Dairy farmers must market their production virtually 
every day, regardless of price. As a result, the dairy industry 
has generally been subject to a larger degree of government 
intervention and regulation than most other commodities.
    The price of milk to dairy producers in the United States 
has been supported continuously for over 50 years since the 
enactment of the Agricultural Act of 1949. Since 1981, the 
support level has been established by Congress either at 
specific price levels, or by formula tied to anticipated 
Commodity Credit Corporation (CCC) dairy product purchases. The 
current support price of $9.90 per hundredweight for milk 
containing 3.67 percent milkfat has been in effect since 
January 1, 1999.
    In the early 1980's the price support level was above 
$13.00 per hundredweight. At that level, the program generated 
milk production above market demand and resulted in CCC 
purchasing more than 10 percent of U.S. milk production at a 
cost exceeding $2 billion annually. Starting in December 1983 
the price support level was reduced through a series of $0.50 
per hundredweight reductions. In addition to the price support 
reductions, Congress enacted short-term programs in the mid-
80's that provided incentive payments to dairy producers who 
voluntarily reduced or terminated milk production. To reduce 
CCC price support costs the Congress instituted an assessment 
on milk marketed by producers that was paid to the government. 
The combination of lower prices, incentive payments to reduce 
production and assessments resulted in lower production and 
reduced CCC dairy product purchases.
    The FAIR Act contained provisions to end the Dairy Price 
Support Program effective December 31, 1999 and establish a 
recourse loan program for milk effective January 1, 2000. The 
Act also terminated the authority to assess milk marketed.
    When the FAIR Act was being considered milk prices were 
averaging about $3.00 per hundredweight above the support price 
and dairy products were not being sold to CCC. Milk prices fell 
below the $9.90 per hundredweight support level by the end of 
1999 and remained at low levels throughout 2000. The low prices 
for dairy producers prompted Congress to reconsider the 
decision to end the Dairy Price Support Program on December 31, 
1999 and laws extending the program through 2000 and 
subsequently through 2001 were enacted.
    On three occasions starting in June 1999 USDA has made 
market loss assistance payments amounting to almost $1 billion 
to assist dairy producers facing reduced milk prices. In June 
1999, a total of $200 million was paid to dairy producers. The 
second payment made in April 2000 totaled $125 million. The 
third payment made in December 2000 totaled $645 million.
    The Committee has found that the existing safety net for 
dairy farmers is inadequate and has therefore included a new, 
national, dairy program that will improve dairy farmer income. 
It effectively establishes a new national minimum price per 
hundredweight for raw milk used for Class I, or fluid milk, and 
a supplemental income protection program to provide counter-
cyclical income support payments to producers of raw milk 
during periods of low milk prices. Whenever the Class III price 
falls below $14.25 per hundredweight, producers would receive 
payments under this program.
    The government assists dairy exports through the Dairy 
Export Incentive Program (DEIP). The program is used to help 
U.S. dairy products meet competition from subsidizing 
countries, especially the European Union. Products eligible for 
DEIP are milk powders, butterfat and cheese. The DEIP is 
currently authorized through December 31, 2002. The Committee 
extends it through 2006.
    The Fluid Milk Promotion and Education Program (also known 
as MilkPEP) has contributed to slowing the decades-long erosion 
in milk consumption and positioned the milk industry to better 
compete with soft drinks and other beverages. The program, 
which has been in effect for six years, works in close 
coordination with the dairy producer promotion program to 
maximize the effectiveness of dollars spent to enhance milk 
sales. The Committee extends the MilkPEP program through 2006.
    The Dairy Market Enhancement Act of 2000 provided that the 
Secretary of Agriculture should establish a program of 
mandatory dairy product information reporting to provide 
timely, accurate, and reliable market information. To date, the 
Department of Agriculture has not established aprogram of 
mandatory stored dairy products reporting presumably due to questions 
concerning the authority to establish reporting requirements for 
substantially equivalent dairy products. Therefore, this legislation 
provides explicit authority to establish such a program.
    The Dairy Production Stabilization Act of 1983 (Dairy Act) 
authorized a national producer program for dairy product 
promotion, research, and nutrition education to increase human 
consumption of milk and dairy products and reduce milk 
surpluses. Under the program promotion and research is 
conducted to strengthen the dairy industry's position in the 
marketplace and to maintain and expand domestic and foreign 
markets and uses for fluid milk products and dairy products 
produced in the United States. This legislation extends the 
Dairy Act through 2006 and expands it to include imported 
products.

                                 Sugar

    American sugar producers have been facing sugar prices at 
or near 22-year lows for most of the past two years. The U.S. 
government is no longer able to limit sugar imports 
sufficiently to support prices and avoid sugar forfeitures. 
Last year, for the first time in nearly two decades, sugar 
producers forfeited a significant quantity of sugar to the 
government.
    Since 1996, 17 beet and cane processing mills have closed 
or announced their impending closure. Sugar beets and sugarcane 
are highly perishable and have no commercial value until the 
sugar has been extracted. This makes sugar producers 
particularly dependent on their local processor--without a 
processor, there is no reason to produce sugar beets or 
sugarcane.
    U.S. sugar producers asked the Committee to reestablish 
marketing allotments in an attempt to limit domestic production 
to levels that--with imports--will not exceed demand for sugar 
for human consumption. The allotments should bring supply into 
balance with demand to enable the Secretary to implement the 
program at minimal net cost. However, the bill eliminates other 
assessments, penalties and fees which were implemented to help 
reduce budget deficits. The bill terminates the marketing 
assessment on sugar, eliminates the loan forfeiture penalty and 
reduces the CCC interest rate on price support loans
    To further manage supply, the bill authorizes a payment-in-
kind program to allow the Commodity Credit Corporation (CCC) to 
accept bids from processors of sugar cane and sugar beets to 
obtain raw cane sugar or refined beet sugar in the inventory of 
the CCC in return for reduction in production of raw cane sugar 
or refined beet sugar. This provision clarifies and enhances 
the CCC's authority to dispose of sugar it has obtained through 
forfeitures of sugar or other means. Through this authority, 
the CCC may administer a pre-plant payment-in-kind program for 
sugar cane or sugar beets to assist in the reduction of CCC 
sugar inventories. A pre-plant payment-in-kind program is an 
effective method of reducing CCC inventories of sugar because 
it reduces the CCC's inventory storage and disposal costs and 
avoids significant on-farm production costs.

                                Peanuts

    The Committee is recommending a dramatic change, and a 
significant investment of public resources, in the program for 
peanut producers. The program has long been of great importance 
to peanut producers, primarily in Georgia, North Carolina, and 
Virginia. The program and the peanut itself have had a long and 
colorful history. The lowly ``goober pea'' was and continues to 
be an important part of the economic history and foundation of 
the South. George Washington Carver's efforts to create new and 
useful products from peanuts has made him one of the most 
celebrated agriculturalists in American history. The 
Agricultural Act of 1938 contains the provisions, as amended 
over the years, which provide for peanut quotas and the price 
support activities which have enabled peanut production to 
remain profitable over the course of many changes in 
agriculture and agriculture policy.
    The peanut program has changed and evolved over the years, 
especially when it was moved to a no-net-cost program in the 
1980's. However, there is a concern within some segments of the 
industry that the program must now be fundamentally changed. 
Certainly this view is not universally shared, and especially 
among some farmers. However, looking into the future, there is 
a belief by many that the current program is not sustainable in 
a world of free trade and increasing production of quality 
peanuts in other countries. Moreover, the concern is that 
peanut imports are slowly increasing and will continue to 
increase as the peanut tariff rate quota is eliminated under 
existing trade agreements. The argument is that without 
significant changes the current program will become unworkable 
as the quota is reduced more each year to maintain program 
objectives.
    The Committee bill proposes to change the program and bring 
it more in line with the other commodity programs. 
Specifically, marketing quotas are abolished and a new system 
of peanut base acres and peanut yields are established. The new 
program creates a safety net for producers in the form of 
marketing loans, direct payments, and counter-cyclical 
supports. Quota holders will be compensated at an established 
rate for the value of their quota over a five year period. 
Quota holders that are not involved in peanut production and 
that have depended on annual income from the rent of their 
quota will need to adjust to a future without this source of 
income.
    There will be other adjustments during the transition to 
the new program. It is likely that there will be regional 
impacts and perhaps dislocations among producers, especially in 
higher cost areas of production. The existing program has 
functioned by keeping the supply of peanuts in close proximity 
with demand such that the Government established support rate 
has not resulted in large amounts of forfeited peanuts. The 
result is that over the years processors, product manufacturers 
and consumers have all contributed to sustaining the program. 
Under the new program, this connection will no longer be in 
place. Due to the lower support rates under the new program, 
processors and manufacturers will enjoy significantly cheaper 
peanuts. Whether consumers will ultimately benefit remains to 
be seen. Producers can anticipate a more competitive production 
and marketing environment. Those producers that can continue to 
produce low cost and high quality peanuts may see greater 
rewards from the marketplace. Regardless, all peanut producers 
in the program will benefit from the new safety net provided in 
the Committee bill.

        Adjustment Authority Related to Uruguay Round Compliance

    Although this bill increases support to U.S. producers, 
expenditures under this bill are not expected to exceed the 
total allowable domestic support levels established in the 
Uruguay Round Agreement on Agriculture. However, to ensure that 
the United States meets its international obligations, the 
Committee bill includes authority to allow the Secretary to 
reduce domestic support expenditures to a level that meets but 
does not exceed WTO commitments. The Committee expects the 
Secretary to implement any reductions in a fair, equitable and 
proportionate manner considering the effect that the support 
for a particular commodity has on the Secretary's determination 
that expenditures will otherwise exceed the allowable domestic 
support.

                          Commodity Purchases

    Proper nutrition, including increased consumption of fruits 
and vegetables, is crucial to the health and well being of our 
nation's school children. By requiring the Secretary of 
Agriculture to use CCC funds to assure the purchase of 
specialty crop items for distribution to the National School 
Lunch Program, The Emergency Food Assistance Program, and other 
nutrition programs, the bill will further the objective of 
improved nutrition at the same time it provides much needed 
assistance to producers of specialty crops. At least $50 
million of the funds available each fiscal year would be used 
to supplement an extremely popular program that utilizes the 
expertise of the Department of Defense to purchase fresh fruits 
and vegetables for schools in the National School Lunch 
Program.

                         TITLE II--CONSERVATION


                               Background

    The Department of Agriculture operates several conservation 
programs through both the Natural Resources Conservation 
Service (NRCS) and the Farm Service Agency (FSA). These 
programs provide producers and landowners opportunities to 
manage their privately owned agricultural lands in a manner 
that enhances natural resources, including the implementation 
of practices that protect water and air quality, reduce soil 
erosion, and increase wildlife habitat.
    Conservation programs funded through the Credit Commodity 
Corporation are weighed heavily toward programs that take land 
out of production with the majority of the funds directed 
toward the Conservation Reserve Program (CRP).
    CRP, which is managed by FSA, was originally authorized in 
the Food Security Act of 1985 (the 1985 Farm Bill) for 40-45 
million acres. In the Federal Agriculture Improvement and 
Reform Act of 1996 (the 1996 Farm Bill), the acreage was 
limited to 36.4 million acres. Currently, nearly 34 million 
acres are enrolled in CRP. Starting in 1990, applicants wishing 
to enroll land in CRP had to bid competitively during open 
sign-ups that occurred no more than once a year.
    In addition to general CRP, two programs were established 
under CRP to enroll more environmentally sensitive lands. 
Applicants do not have to bid their land in these programs.
    Originally authorized in the Food, Agriculture, 
Conservation and Trade Act of 1990 (the 1990 Farm Bill), the 
Conservation Reserve Enhancement Program (CREP) is a highly 
successful State-Federal matching program created to address 
specific State and local concerns, including water quality, 
soil erosion and wildlife. Currently, 19 States have CREPs with 
a total of 246,000 acres enrolled. The second program, the 
Continuous Sign-up CRP which began in 1996, allows producers to 
directly contract with FSA to enroll lands that address water 
quality, by enrolling riparian buffers, filter strips, contour 
grass strips, and grass waterways. Approximately 1.56 million 
acres have been enrolled nationally.
    In addition to CRP, the Wetlands Reserve Program (WRP), 
authorizes the Secretary, through NRCS, to work with and 
provide payments to landowners for restoring or protecting 
wetlands. WRP was originally authorized in the 1990 Farm Bill 
as a pilot program under CRP for a total of one million acres. 
In the 1996 Farm Bill, the total acreage was reduced by 25,000 
acres to 975,000 acres and WRP was made an independent program. 
As part of the Agricultural, Rural Development, Food and Drug 
Administration and Related Agencies Appropriations Act for 
fiscal year ending 2001, an additional 100,000 acres was added 
to WRP. The Secretary may enroll wetlands in WRP through 
permanent and 30-year easements and restore wetlands through 
ten-year cost-share contracts.
    The Environmental Quality Incentives Program (EQIP) was 
originally authorized in the 1996 Farm Bill and was funded at 
$200 million annually after the first year. EQIP provides 
technical, financial, and educational assistance to crop and 
livestock producers to address soil, water and related natural 
resource concerns. EQIP provides producers with incentive 
payments for up to three years to implement land-based 
management practices, including nutrient and pest management, 
and cost share for structural practices and equipment, 
including tree planting, filter strips and, for small and 
medium-sized livestock owners, animal waste storage structures. 
By statute, EQIP was required to maximize environmental 
benefits per dollar expended, and as a result, has concentrated 
its funding in priority areas that are identified at the State 
level. Over the years, nearly 74 percent of the funds under 
EQIP were directed toward priority areas. In addition, a 
mandatory split was included that ensure 50 percent of the 
funds were provided for livestock operations. Eligible 
producers enter five-to-ten year contracts and payments are 
limited to $50,000 over the contract period and $10,000 
annually. Because producers need to bid for funds under EQIP 
and funds are directed toward maximizing environmental 
benefits, many producers do not receive funds. Moreover, funds 
under EQIP cannot be used to maintain practices previously 
adopted by producers.
    The Farmland Protection Program (FPP) was originally 
authorized in the 1996 Farm Bill for $35 million after the 
success of a one-State pilot program authorized in the 1990 
Farm Bill. The FPP originally was designed to allow States and 
local governments to leverage Federal funds to purchase 
development easements on agricultural land. Since 1996, changes 
to allow non-profit organizations to participate have allowed 
FPP to expand to many more States. The original $35 million and 
an additional $17.5 million added in the Agricultural Risk 
Protection Act of 2000 (ARPA) was allocated quickly.
    The Wildlife Habitat Incentives Program (WHIP) was 
originally authorized in the 1996 Farm Bill for $50 million. 
The funding under WHIP was allocated by the end of fiscal year 
1999. WHIP provides up to 75 percent cost-share for 
implementing fish and wildlife habitat improvement practices on 
private lands, including lands of Indian tribes. Under WHIP, 
States have great flexibility in determining wildlife 
priorities and which landowners receive assistance. An 
additional $12.5 million was added in through ARPA.
    The Resource Conservation and Development (RC&D) Program 
was authorized in the Food and Agriculture Act of 1981. The 
RC&D program authorized the creation of 450 multi-county 
councils to help develop rural economies while improving 
natural resources at the local level. Currently, there are 348 
Councils.
    The Conservation of Private Grazing Land Program was 
authorized for appropriations at $60 million annually in the 
Federal Agriculture Improvement and Reform Act of 1996. Under 
the program NRCS provides technical, educational, and related 
assistance to owners of private grazing lands to ensure better 
management of grazing lands.
    The 1990 Farm Bill required the Secretary to create a 
technical committees in each State to serve in advisory roles 
on the administration of conservation programs at the State and 
local levels. The wide membership of the technical committees 
was designed to maximize the local involvement and cover a wide 
variety of natural resource disciplines. The technical 
committees have worked well in many States, but in other States 
the technical committees have not functioned as planned because 
meetings and other essential activities do not occur.
    Technical assistance provided through conservation programs 
was restricted in the 1996 Farm Bill as a cost-savings measure 
to $36.2 million. As a result, full implementation of the 
programs have been hampered. In addition, the number of 
employees at NRCS who provide technical assistance has 
decreased by 2,000 employees since 1985, from 13,600 employees 
to 11,600 employees. In some cases, NRCS has successfully 
partnered with governmental and non-governmental organizations, 
like conservation districts, to provide technical assistance.

                            Purpose and Need

    Despite the conservation successes from current USDA 
programs, the Committee recognizes that more can be done. For 
that reason, the Committee improves existing programs and 
creates new ones. The bill increases funding for conservation 
programs by $20.5 billion above the baseline of approximately 
$21.5 billion over the next 10 years. The bill provides over 
$18 billion in total conservation spending over the next five 
years. The bill further improves existing programs, strengthens 
technical assistance, including a new provision that fosters 
technical assistance through third party providers. It also 
creates a critically needed working lands programs, and 
requires the Secretary to better coordinate all programs to 
avoid duplication and ensure better delivery to participating 
producers and landowners. The bill consolidates most 
conservation programs (except for the Resource Conservation & 
Development Program and State Technical Committees) in the Food 
Security Act of 1985 to facilitate use of conservation 
programs. To improve implementation and delivery of 
conservation programs, the Secretary is required to assess all 
USDA conservation programs and provide Congress with reform 
recommendations to improve efficiencies, eliminate overlaps and 
redundancies, and simplify operations.

                     National Conservation Program

    The bill requires the Secretary to develop a plan and 
budget for implementing the National Conservation Program 
(NCP). The NCP is an appraisal of the nation's soil, water, and 
related resources and the Committee intends that the NCP be 
used as the framework for a coordinated national plan for the 
conservation of agricultural lands. Because of the importance 
of proper coordination, the Committee requires the Secretary to 
provide the plan to Congress within 180 days after the 
enactment of this bill and to provide Congress with a status 
report on the NCP plan by April 30, 2005.

                      State and local partnerships

    In order to build upon the many State, local and private 
partnerships the Secretary maintains, the bill authorizes the 
Secretary to continue and expand these partnerships to allow 
producers to address environmental issues affected by 
agricultural production. The bill authorizes the Secretary to 
work, including through partnerships, on special projects in 
environmentally-sensitive areas or watersheds that are not 
currently covered by existing programs or that require special 
attention.

                   conservation technical assistance

    This bill lifts reimbursement restrictions placed during 
the 1996 Farm Bill on the availability of funds by exempting 
technical assistance from the Section 11 cap of the Commodity 
Credit Corporation. Moreover, the Committee recognizes the need 
to increase access for technical assistance from other sources. 
For that reason, the Committee requires the Secretary to create 
a third-party certification program that allows non-USDA 
employees to receive compensation for providing technical 
assistance under all conservation programs.
    The Committee recognizes that many States and local 
governments already employ individuals to provide technical 
assistance. For that reason, funds for third party providers 
shall not be used to reimburse employees of State and local 
governments unless the Secretary is satisfied that the funds 
will increase the base of conservation technical assistance 
provided under the conservation programs.

            Certification of technical assistance providers

    The Committee further recognizes that multiple institutions 
and groups provide certification for the provision of technical 
assistance and the Secretary should implement regulations that 
take these programs into account and do not interfere or 
discourage certification through these groups. The bill 
authorizes the Secretary to grant full or partial waivers for 
certification and for the payment of fees for individuals 
accredited through an equivalent organization, as determined by 
the Secretary. However, the Committee also recognizes that 
certification by an accredited group does not mean that the 
accredited person is qualified to provide all forms of 
technical assistance. In addition to technical assistance, the 
Secretary shall provide education and outreach to allproducers, 
including limited resource producers, Indian tribes and beginning 
farmers and ranchers.

                     Confidentiality of information

    Because of the sensitivity of information provided by 
producers and landowners participating in conservation 
programs, the bill provides for the Secretary to maintain the 
confidentiality of the provided information. The information 
only may be released in an aggregate form that does not reveal 
individual producer information. Moreover, it is not the 
Committee's intention to interfere with Freedom of Information 
Act requirements.

                   Conservation Reserve Program (CRP)

    This bill reauthorizes, through fiscal year 2006, and 
expands CRP from 36.4 million acres to 40 million acres. While 
the Committee does not specifically reserve acreage for the 
continuous sign-up program or CREP it is expected that the 
Department will continue to reserve at least five million acres 
for these very successful programs. The legislation codifies 
these two programs and all references to buffers and successor 
programs shall be read to mean all practices or programs that 
allow a producer to enroll land on an on-going basis, as 
opposed to only during a general sign-up. And, to increase the 
attractiveness of these programs, the legislation provides 
enhanced incentives for all continuous practices. Some 
producers have recently begun cropping previously non-cropped 
lands for the purpose of later enrolling the land in CRP. The 
legislation would prohibit enrollment of highly erodible lands 
that do not have a cropping history during three of the last 
six years as a means of discouraging producers from planting 
crops on non-cropped lands for later CRP enrollment.

                     Wetlands Reserve Program (WRP)

    All authorized acreage available under the highly 
successful WRP has already been enrolled. The Committee 
recognizes the need for additional acreage, as evidenced by the 
large backlog for participation and the continuing loss of 
wetlands. To address this need, this bill reauthorizes WRP, 
through fiscal year 2006, and increases the total acreage cap 
by 1.25 million acres. To build upon the CREP framework, the 
Committee authorizes the Secretary to enroll up to 25,000 acres 
annually in a new Wetlands Reserve Enhancement Program (WREP). 
WREP encourages federal coordination with State and local 
governments and private organizations to focus resources on 
critical environmental needs, including water quality and 
wildlife habitat. Unlike CREP, the State and local governments 
are not required to provide financial cost-share.

            Environmental Quality Incentives Program (EQIP)

    This bill reauthorizes EQIP through fiscal year 2006, EQIP. 
Requests for EQIP assistance far exceed available funds. The 
legislation provides increased funding for EQIP for a total of 
$5.2 billion over the next five years. Increasing funding over 
time will allow NRCS to more effectively implement the program. 
The legislation provides $500 million for fiscal year 2002, 
$1.05 billion for fiscal year 2003, $1.2 billion for each of 
fiscal years 2004 and 2005, and $1.25 billion for fiscal year 
2006.
    Although many federal regulations impacting agriculture 
have been on the books for decades, a recent interest in their 
enforcement, in addition to more active regulation by State and 
local authorities, many producers have turned to the Federal 
Government for assistance to comply with these regulations or 
to implement practices that can help them avoid regulation. To 
make EQIP funds more useful to all producers and to ensure that 
sound environmental practices are properly adopted, the bill 
increases the total amount available under a contract to 
$150,000 and the annual limit to $50,000. Given this increase, 
the Committee believes that these funds should only be made 
available where the Secretary can ensure that the funds are 
limited to one person or entity. In the case of contracts for 
animal waste facilities, a producer can have one contract 
during the five-year period covered by the farm bill. EQIP 
contracts for animal waste structures currently require 
nutrient management plans and the bill continues this 
requirement. The Committee believes that these collective 
requirements are essential to achieve maximum environmental 
benefit in the most equitable manner.
    Under the bill all producers are eligible for EQIP funds 
and it is not the intention of the Committee to give priority 
to producers who are or may be regulated at the expense of 
providing funds for non-regulated producers. In fact, the 
Committee believes that one of the strengths of EQIP is that it 
provides funds to producers with less means to move toward more 
environmentally-sensitive management of their operations. To 
better reach producers with limited resources, including 
beginning farmers and those who rent lands on a short-term 
basis, the bill reduces minimum contract length to three years, 
and increases the level of cost-share provided to limited 
resource producers and beginning farmers and ranchers to 90 
percent. The Committee also recognizes that priorities vary 
across States. To ensure that each State uses the funds in the 
manner that ensures the greatest level of environmental 
benefit, the bill does not mandate a split between livestock 
and non-livestock concerns. The Committee, however, strongly 
discourages NRCS from allowing States to favor one type of 
producer at the expense of others. To facilitate 
implementation, the legislation no longer requires each 
applicant to have a conservation plan developed prior to 
acceptance in EQIP, but still requires development of a 
complete conservation plan by producers who carry out an EQIP 
contract.
    The Committee recognizes the need for the Secretary to have 
flexibility to establish special projects and provides five 
percent of EQIP funds to be used in watersheds and other areas 
of regional significance to address water conservation, 
including irrigation projects to increase water management, 
nutrient management and wildlife habitat.

                 Innovative approaches to conservation

    The Committee further recognizes that many important ideas 
come from the private and non-Federal sector. To encourage 
development of innovative approaches, the Secretary may use up 
to $100 million annually to pay the Federal share of 
competitive grants to stimulate innovative approaches to 
protect environmental quality in conjunction with agricultural 
production. In creating this grant program within EQIP, the 
Committee was particularly concerned with the degradation of 
our nation's waters. This degradation results in the loss of 
productive habitat for fish and wildlife, causes billions of 
dollars in lost economic activity, forces businesses and 
municipalities to bear the cost of cleaning up contamination, 
and may threaten human health.
    The Committee believes that the protection of source water 
for human consumption should be a high priority for the use of 
grants for innovative conservation practices and that water 
utilities should be important partners with agricultural 
producers in the development and implementation of conservation 
projects under this grant program.
    The Committee also believes that the Secretary should place 
a high priority on reducing nutrient loadings--particularly 
nitrogen and phosphorus--from agricultural lands. By 
establishing market-based incentives to reduce nutrient 
discharges from agricultural lands an efficient mechanism is 
created to improve water quality and create environmentally 
beneficial income alternatives for farmers. The Committee 
intends for the Secretary to work with the State and private 
organizations to target investments in nutrient reductions 
where they are most cost effective through competitive 
selection processes; test a variety of reduction techniques; 
encourage alternative land use practices that reduce nutrient 
runoff while still producing income; and contribute to the 
economic viability of agricultural operations. The Committee 
recognizes that the requirement that the Federal share cannot 
exceed 50 percent may mean that not all funds will be expended 
within the fiscal year. Therefore, legislation requires that 
funds not committed by June 1st be made available for use under 
the rest of EQIP.

                   Farmland Protection Program (FPP)

    The Committee further recognizes the importance of FPP in 
preventing the accelerating expansion of urban and suburban 
areas into agricultural lands. The funds for FPP increase over 
time to a total $1.025 billion over five years, but in a manner 
that allow NRCS to implement the programs successfully and work 
with States that do not currently have programs. The 
legislation provides $150 million for fiscal year 2002, $200 
million annually for fiscal years 2003 and 2004, $225 million 
for fiscal year 2005, and $250 million for fiscal year 2006. 
The bill also expands eligible lands to include cropland, 
rangeland, grassland and forested land on farms or ranches. The 
Committee does not intend to open FPP to forest land that is 
not an integral part of an operating farm or ranch. To build 
upon recent successes from expanding the program, this bill 
expands participation in the program to non-profit 
organizations. To help participating farms and ranches to 
develop business plans to remain in agriculture, this bill 
allows the Secretary to dedicate up to $10 million annually for 
Farm Viability Grants.

               Wildlife Habitat Incentives Program (WHIP)

    The bill reauthorizes WHIP, through fiscal year 2006, and 
expands the resources and types of assistance currently 
eligible under the program. Because the Committee recognizes 
the enormous benefits that come from protecting wildlife 
habitat on private lands restored under WHIP, the bill 
increases total funding to $500 million over five years. The 
legislation increases the funding over time to allow NRCS to 
implement the programs in a manner that allows for the 
effective use of funds. The legislation provides $50 million 
for fiscal year 2002, $100 million annually for fiscal years 
2003 and 2004, and $125 million annually for fiscal years 2005 
and 2006.
    The Committee recognizes the unique habitat needs of 
threatened and endangered species, and for that reason requires 
the Secretary to reserve not less than 15 percent of funds 
under WHIP for projects focusing on threatened and endangered 
species. To further address the needs of threatened and 
endangered species, the bill authorizes the Secretary to 
establish a pilot program to use up to an additional 15 percent 
of the available funds under WHIP to enroll lands critical for 
habitat for threatened and endangered species for a period of 
15 years or longer.

                  Conservation Security Program (CSP)

    There are nearly 900 million acres of agricultural land in 
the United States and the Committee recognizes the urgent need 
to address conservation on those lands. While increased funding 
for working land programs like EQIP and WHIP help advance 
conservation on private agricultural working lands, the 
Committee believes that a conservation incentives program will 
fill the gaps in USDA programs. An incentive program, like the 
one established in the Conservation Security Act, provides a 
new direction for agriculture. Through this new Conservation 
Security Program (CSP), which the bill authorizes through 
fiscal year 2006, producers will receive income for maintaining 
or adopting conservation practices. All producers with lands in 
production may participate in the CSP. Moreover, the payments 
are designed to be consistent with international trade 
obligations, and the Committee expects the Secretary to ensure 
that regulations implementing the CSP remain consistent with 
these obligations.
    Because of the importance of CSP, and its design to serve 
all agricultural producers with lands in production, the 
Committee strongly encourages the Secretary to expedite 
implementation of the program. Because the CSP is specifically 
designed to reach all producers, the Secretary shall not create 
an allocation system based on a limited level of funding, but 
instead shall use all funds necessary for full implementation 
as required under the legislation.
    Over the years, it has become clear that producers who 
adopted good conservation practices using their own time and 
money were not eligible for USDA conservation programs. 
Although these good stewards have contributed greatly to 
agriculture's efforts to enhance natural resources and protect 
the environment, the structure of conservation programs did not 
recognize, nor reward, their efforts. While the Secretary shall 
implement the CSP to achieve maximum environmental benefit, the 
regulations should be constructed to promote maintenance of 
conservation practices. Under CSP all producers are eligible to 
participate and do not have to bid into to participate. 
Producers that would not receive funding under other USDA 
conservation programs, may participate in CSP and provide 
important conservation benefits. One important element of CSP 
is that producers may continue to have economic uses of the 
land consistent with the objectives of the conservation 
security plan. This element further enables producers to 
implement conservation practices on working lands.
    The Committee recognizes the importance of ensuring the 
programs work at the State and local level and the CSP requires 
local involvement and participation at all levels. In carrying 
out the CSP, the Secretary shall ensure maximum participation 
by producers at the local and State levels. To ensure maximum 
participation by producers, CSP provides maximum flexibility to 
participating producers to engage in the level of conservation 
that is suitable to each individual operation. Producers may 
adopt or maintain practices that fit into their agricultural 
operation, and receive increased payments by adopting or 
maintaining practices that address local priorities.Because 
many of the best ideas come directly from producers, the CSP rewards 
producers for developing and implementing pilot projects that further 
the development of conservation practices.
    The CSP contains three tiers of participation related to 
the level of conservation applied. The first tier rewards 
producers for implementing basic management practices, the 
second tier promotes adoption of systems-based approaches to 
conservation, and the third tier rewards producers for the 
adoption of a comprehensive approach to conservation on a farm 
or ranch. The annual payments are designed to maximize 
environmental benefit under the CSP. The payments may reach 
$20,000 for Tier I, $35,000 for Tier II, and $50,000 for Tier 
III each year. The payments are based on a combination of 
factors, including a percentage of average county rental rate 
for the type of land use (cropland, rangeland, or pasture) or 
appropriate average county rate for 2001 that would ensure 
regional equity. For land enrolled in CSP, the legislation 
provides a basic payment on enrolled land at the average county 
rate. The legislation sets the payment rates at six percent for 
Tier I, 11 percent for Tier II and 20 percent for Tier III. The 
Committee recognizes that rental rates do not always reflect 
the payment necessary to ensure participation in all regions of 
the country or States, or even within regions. The Secretary 
should ensure that the payments properly reflect an amount 
necessary to ensure participation. Moreover, the Secretary may 
use percentages of other county rates in determining the 
appropriate rate. For example, the Secretary may determine that 
the appropriate alternative rate is a percentage of a rate 
(such as one percent of the market value of the land) to which 
the 6 percent, 11 percent or 20 percent figures apply.
    The annual payments include one-time advance payments equal 
the greater of $1,000 or 20 percent of the annual payment for 
Tier I, $2,000 or 20 percent of the annual payment for Tier II, 
and $3,000 or 20 percent of the annual payment for Tier III, at 
the option of the producer
    In addition to receiving an average county rate payment for 
enrolling land under a contract, a producer may receive bonus 
payments for adopting or maintaining practices that increase 
environmental benefits (including practices that address 
national priority concerns) participation in research projects 
and the extent to which practices exceed local priority 
concerns. Beginning farmers and ranchers may also receive bonus 
payments.
    To best ensure that the payments supply income for 
providing important environmental and conservation benefits, 
producers receive all or most of the cost of practices. 
Producers receive 100 percent of the costs of adopting or 
maintaining management practices, 100 percent of the costs of 
maintaining land-based structural practices, and 75 percent of 
the cost of adopting new land-based structural practices. To 
encourage increased conservation, the total of the base rate 
plus costs cannot exceed 75 percent of the maximum payment 
under the applicable tier. To ensure that practices focus on 
land-based management practices, payments are not provided for 
the cost of purchasing equipment or for waste storage or 
treatment facilities. Producers may receive cost-share payments 
for equipment and facilities through EQIP.

Resource Conservation and Development Councils

    The Committee recognizes the important contributions RC&D 
Councils, created under the Resource Conservation and 
Development Program, have made to rural communities. For that 
reason, the Committee permanently authorizes the RC&D program.

Additional programs

    The bill also reauthorizes, through fiscal year 2006, the 
Conservation of Private Grazing Land Program. The bill 
authorizes two additional conservation programs, the Watershed 
Risk Reduction program at $15,000,000 annually for each of the 
fiscal years 2002 through 2006; the Great Lakes Basin Program 
for Soil Erosion and Sediment Control at $5,000,000 annually 
for each of the fiscal years 2002 through 2006.

Grassland Reserve Program

    Recent years have seen large tracts of grassland being 
converted to cropland or divided into smaller ranches. In 
addition, a program is needed to protect small remnants of 
native grassland. To encourage tracts of land to be restored to 
or to remain as grassland (including prairie), the bill 
requires the Secretary, acting through the NRCS, to enroll up 
to 2,000,000 acres of natural grasslands.

State Technical Committees

    The Committee recognizes the importance of State Technical 
Committees to the administration of conservation programs at 
the State and local level. For that reason, the Committee 
requires an updating of responsibilities that reflect changes 
made to this title, including enhanced responsibilities of 
State conservationists that ensure enhanced participation by 
members of the State technical committees.

                            TITLE III--TRADE


                           Food aid programs

    Over the last several decades, the United States has been 
the world's leading advocate of international food aid 
programs. It began with massive assistance that included 
donations of food to devastated European countries under the 
Marshall Plan in the aftermath of World War II. The tradition 
was continued with providing food aid under the mechanism of 
surplus commodity disposal in Section 416(b) of the Agriculture 
Act of 1949 and the Title II and Title III provisions of the 
Agricultural Trade Development and Assistance Act of 1954, 
popularly known as PL-480. In the 1985 Food Security Act, 
Congress added the Food for Progress program as a tool for U.S. 
delivery of international food assistance for economic 
development and other purposes. During the 1990's, U.S. food 
aid averaged about 7.5 million tons annually, more than all 
other donor nations combined in most years.
    Although the U.S. role in international food aid has been 
substantial, the need for food assistance remains large. For 
2000, USDA estimated that there were 774 million people 
worldwide who were unable to meet their nutritional 
requirements on a daily basis, representing an annualaggregate 
gap in food assistance of as much as 17 million tons. In the face of 
such need, it is important that the United States government be able to 
provide a consistent amount of food aid that is not dependent on the 
existence of commodity surpluses.
    There is also strong demand for resources to help nourish 
and educate children in the developing world. The United 
Nation's World Food Program believes that there are some 300 
million children worldwide who are not receiving an education 
due to economic hardships faced by their families. With a 
desire to address that issue, the committee establishes and 
funds the International Food for Education and Nutrition 
program. This proposal was introduced last year by George 
McGovern and Bob Dole, former Senators and long-time advocates 
of domestic and international nutrition programs. This program 
is based on the simple yet powerful notion that a well-
nourished child is more likely to learn. In addition, the 
availability of food is more likely to bring that child of a 
poor family into school in the first place, and out of the 
factories and sweat shops of the Third World.
    Currently, most food aid programs are funded under 
appropriations. The exception to that is the Food for Progress 
program, which has averaged about $125 million annually in 
recent years from the CCC to conduct development programs in 
countries with emerging democracies. Under this bill, 
additional mandatory funding is provided for this program, that 
includes the International Food for Education and Nutrition 
initiative, which nearly doubles the value of commodities that 
would be available for this program.
    A significant share of U.S. food aid programs are delivered 
to developing countries through the efforts of U.S.-based 
private voluntary organizations (PVO's) and cooperatives. Their 
role is crucial in assuring the continuous flow of food aid and 
development assistance to recipient countries, and their work 
should not be unnecessarily hampered by excessive 
administrative requirements. While recognizing a legitimate and 
appropriate role for public monitoring and oversight of these 
projects, the Committee urges the agencies who conduct the 
various food aid programs to seek a balance that enables smooth 
program operation.
    The Committee believes that overall program operation would 
be improved significantly if the relevant agencies devoted more 
resources to timely approval of program agreements, as required 
under Sections 307 and 325(i) of the bill. These provisions are 
designed to limit the situations under which a major share of 
eligible commodities are shipped during a relatively short time 
period at the end of the year. Better spacing of shipments over 
time would also reduce the bottlenecks that often occur in 
commercial shipping facilities in such circumstances.
    With respect to certifying institutional partners under 
Sections 302, 325, and 334 of the bill, the Committee notes 
that the organizational capacity of the headquarters staff of a 
given eligible organization and its organizational capacity 
within field offices in individual countries where projects are 
conducted should be documented separately. To the maximum 
extent possible, the Administrator of US-AID and Secretary 
should utilize similar procedures in certifying institutional 
partner status.
    With respect to Section 305 of the bill, the Committee asks 
the Administrator to clarify what kinds of documents are 
subject to review by the Food Aid Consultative Group. While 
interaction and consultation with key stakeholders is 
important, the Committee recognizes that the Agency is 
ultimately accountable to the nation's taxpayers for effective 
use of their available funds.
    The Committee notes that the 120-day review period 
designated under Section 307 of the bill is longer than is 
currently permitted for the U.S. Agency for International 
Development (AID) to review PVO proposals. Under such a 
schedule, the Committee believes that the AID Administrator 
should not find it necessary to re-start the clock when seeking 
additional information or clarification from the eligible 
organization submitting the proposal.

                        Farmer-to-farmer program

    The Farmer-To-Farmer Program provides short-term U.S. 
agricultural technical assistance, on a people-to people basis, 
to developing countries and emerging democracies worldwide. Its 
purpose is ``to assist in increasing food production and 
distribution, and improving the effectiveness of the farming 
and marketing operations of farmers.'' The program was 
established in the Food Security Act of 1985, and has utilized 
the volunteer efforts of tens of thousands of farmers and other 
Americans over the years of its operation. Funding provided for 
the program has increased steadily from its initial level of 
0.1 percent of Title I and Title II funds, up to 0.5 percent in 
the current title.
    The Committee urges the President to give priority with 
available additional funding under Section 313 of the bill to 
initiating new projects in African and Caribbean Basin 
countries under this program, making use of the farming 
knowledge of African-American farmers in this country for such 
projects.

                       Commercial export programs

    Over the last few decades, the U.S. agricultural economy 
has derived between 20 and 30 percent of its gross income from 
exports. While it has been demonstrated in recent years that 
export markets do not serve as a fully reliable safety net, 
trade is and will continue to be a key outlet for U.S. 
agricultural products.
    U.S. agricultural exports have exceeded U.S. agricultural 
imports since the late 1950's, generating a surplus in U.S. 
agricultural trade. This surplus helps counter the persistent 
deficit in nonagricultural U.S. merchandise trade. The U.S. 
agricultural export surplus narrowed in recent years from its 
peak in fiscal 1996. However, it began to expand again in 2000 
as exports rose in response to the recovery from the 1997-99 
financial crises. In order to maintain healthy market shares 
for the wide range of agricultural commodities we now enjoy, it 
is important that Congress preserve and strengthen its export 
promotion programs, within the commitments made in the Uruguay 
Round Agreement on Agriculture.
    Historically, the bulk commodities--wheat, rice, coarse 
grains, oilseeds, cotton, and tobacco--accounted for most U.S. 
agricultural exports. However, in the 1990's, as population and 
incomes worldwide rose, U.S. exports of high-value products 
(HVP)--meats, poultry, liveanimals, meals, oils, fruits, 
vegetables, and beverages--expanded steadily in response to demand for 
more food diversity. In fiscal 1991, HVP exports exceeded exports of 
bulk products for the first time. Since then, HVP exports have 
continued to exceed bulk exports, even in years of decline. The market 
promotion programs, specifically the Market Access Program and the 
Foreign Market Development Program, have been extremely helpful in 
achieving the recent gains in HVP exports. Both programs have 
experienced declining funding levels in real terms in recent years, and 
this bill provides additional resources to conduct both programs. Given 
the desire to encourage exploration of new export opportunities, 
priority in distributing the added funds made available to both 
programs in this bill will be given to proposals by new groups and for 
projects in emerging markets.
    In a further effort to support the USDA's primary export 
objective of increasing the U.S. share of world agricultural 
trade, particularly for processed foods, the Committee suggests 
that the Secretary establish a permanent program for the 
Quality Sample Program (QSP). The QSP is designed to encourage 
the development and expansion of export markets for U.S. 
agricultural products, under the authority of the CCC Charter 
Act. On a pilot basis, QSP funds have been used to assist U.S. 
entities in providing product samples to potential foreign 
importers to promote a better understanding and appreciation 
for the high quality of U.S. agricultural products.
    USDA's export credit guarantee programs have been solid 
tools for promoting U.S. agricultural exports over time, and 
were particularly effective during the economic recession in 
East Asia in the late 1990's. In particular, South Korean use 
of the GSM-102 program for purchasing U.S. commodities jumped 
from $14 million in 1997 to $1.38 billion in 1998 as the 
country's economy weakened, thus limiting loss of U.S. 
agricultural exports. The Committee notes that USDA's export 
credit guarantees have been utilized to promote exports of $3 
billion over the last few years. While this is a very 
significant level of exports, it is well below the current 
statutory minimum for the program of $5.5 billion.
    The Committee urges USDA to aggressively utilize GSM export 
credit guarantees in accordance with law to maximize the 
program's effectiveness and enhance the export opportunities 
for U.S. farm products. In addition, the Committee requests 
that USDA evaluate and implement a program to reduce the fees 
charged under the GSM programs. USDA should continue to work 
with exporters and U.S. banks that utilize the program to 
examine and implement these and other initiatives to strengthen 
the GSM programs and build usage.
    Under Section 321, the bill increases from six months to 12 
months the authorized tenor for guarantees under the Supplier 
Credit Guarantee Program (SCGP). The SCGP provides guarantees 
for short-term loans extended directly from U.S. exporters to 
foreign purchasers. Farm and commodity organizations indicate 
that limiting SCGP tenors to only 180 days significantly limits 
the program's effectiveness in assisting U.S. agricultural 
exporters. Extending SCGP guarantee tenors will strengthen the 
program and assist exporters to expand markets for U.S. farm 
products.
    In recent years, USDA has taken action to increase the 
guarantee coverage level under the SCGP from 50 percent to 65 
percent of the transaction value. This initiative increased 
usage to the benefit of U.S. exports. The Committee suggests 
that USDA work with the industry to implement further increases 
in the guarantee coverage to make this export tool even more 
effective.
    According to a USDA study, between April 1995 and September 
2000, the U.S. dollar appreciated 42 percent relative to 
currencies of major exporter competitors. The study found that 
appreciation of the dollar has been a major factor in the 
recent decline of U.S. market share of agricultural exports. 
Although some of that shift in the relative value of the dollar 
in recent years resulted from changing global macroeconomic 
conditions and general fiscal and monetary policy in other 
countries, in some instances exchange rates were altered due to 
deliberate policy actions on the part of governments of 
competing exporters. By broadening the definition of an unfair 
trade practice, Section 323 of the bill allows the Department 
to respond to such actions through use of existing export 
programs.

                     Exporter Assistance Initiative

    Currently, there is no single information resource 
available for those wishing to export agricultural products. 
USDA offers certain information on-line for those wishing to 
export agricultural products, however, the information is not 
comprehensive and does not incorporate information under the 
jurisdiction of other governmental departments or agencies. For 
example, for a dual-use product such as fertilizer, there may 
be restrictions on sales to certain buyers administered by the 
Bureau of Export Administration. Such vital information is not 
currently provided on the USDA website.
    Exporters often need access to information quickly as well 
and lack the time to search multiple sources to access 
necessary information. And, in many cases, exporters are 
unaware of where the necessary information can be located. A 
USDA website would be developed under Section 326 that collates 
all information from all agencies of the Federal Government 
that is relevant to the export of agricultural products.

                   Biotechnology Education Initiative

    The purpose of this program is to enhance foreign 
acceptance of agricultural biotechnology and to protect US 
export interests. The Committee believes that action should be 
taken to address the continuing and increasing market access, 
regulatory and marketing issues facing U.S. agriculture in 
agricultural biotechnology trade.
    Within the program established in Section 333, the 
Committee also recommends the creation of a science, regulatory 
and policy exchange to allow U.S. and foreign scientists, 
regulators, trade officials and other policy decision-makers to 
share ideas and approaches to biotechnology. This action would 
enhance the dialogue between the U.S. and foreign officials 
through U.S. missions to foreign countries and by hosting 
foreign groups to the United States. Such an exchange also 
allows U.S. and foreign officials to participate more 
effectively in various international forums concerning 
biotechnology (e.g., Codex Alimentarius, Bio-safety Protocol, 
World Trade Organization, etc.)

                      Agricultural trade with Cuba

    While Cuba remains a cash-poor economy, it does represent a 
market that imports a substantial share of its food, with 
average value of $660 million annually between 1995-99. In 
particular, it is a significant buyer of rice, and prior to the 
imposition of sanctions in the 1960's, was the single largest 
market for U.S. rice.
    A February 2001 report by the U.S. International Trade 
Commission estimates that in the absence of effective 
sanctions, Cuba could buy as much as 400,000 tons of wheat, 
300,000 tons of rice, and 500,000 tons of feed grains from the 
United States. The Commission estimates that U.S. exports to 
that country could reach about $400 million annually. By 
eliminating the restriction on private financing of sales of 
food and medicine in current law, Section 335 of the bill 
permits U.S. exporters to begin to access this market, without 
committing U.S. government funds to such an effort.

                          TITLE IV--NUTRITION


                     Subtitle A--Food Stamp Program


                               Background

    Representing the largest of the Federal nutrition programs, 
the Food Stamp Program mainly assists children (50 percent) 
single-parent households with children (40 percent), older 
Americans (10 percent), and Americans with disabilities (10 
percent). Most of the other participants, including single-
parents, are individuals in working families.
    The Food Stamp Act authorizes a Food Stamp program for the 
50 States, the District of Columbia, Guam, and the Virgin 
Islands. Food Stamp program rules are generally uniform but 
major revisions to the law in 1996 and 1997 significantly eased 
Federal controls on how States administer the program. The Food 
Stamp program depends, for the most part, on Federal funding. 
Federal appropriations pay for almost all benefits and roughly 
half the cost of administration and work/training activities 
for recipients, and States carry the remaining administrative 
and work/training expenses and the cost of some benefits. At 
the State and local level, the program is administered by the 
offices that run other public assistance programs; they are 
responsible for determining eligibility, calculating and 
issuing benefits, and operating or arranging for work/training 
programs for recipients.
    Applicants for food stamps must have their eligibility 
determined, and, if eligible, their benefits are issued, within 
30 days of application--or seven days if they are very poor. 
The food stamp ``assistance unit'' is a household, typically 
those living together who also purchase and prepare food 
together. Eligibility depends primarily on whether a 
household's cash income and liquid assets fall below Federal 
limits. For most, the income test confines eligibility to 
households with monthly total cash income at or below 130 
percent of the Federal income poverty guidelines, adjusted for 
inflation and household size. For fiscal year 2001, this income 
limit is $1,848 a month for four persons in the 48 contiguous 
States, the District of Columbia, Guam, and the Virgin Islands. 
The liquid asset limit is $3,000 for the elderly and $2,000 for 
all other applicants. Certain assets do not count toward the 
limit. Most notably, when determining financial eligibility for 
the Food Stamp Program, an individual is allowed to exclude up 
to $4,650 to cover the fair market value of a household's 
vehicle and States may elect to use their TANF rules governing 
excluding vehicles as assets if they are more generous.
    Nonfinancial eligibility criteria include those related to 
work, citizen and student status, and institutional residence. 
Unless exempted, most 18-50-year-old able-bodied adults without 
dependents are denied eligibility if, during the prior 36 
months, they received food stamps for three months without (1) 
participating in a workfare program or (2) working or engaging 
in a work/training program for at least 20 hours a week. In 
addition to this new rule added by the Personal Responsibility 
and Work Opportunity Reconciliation Act of 1996, work 
requirements include a directive that most unemployed able-
bodied adult recipients not caring for very young children meet 
various work-related conditions of eligibility, such as 
searching or training for a job or doing public service work, 
and bar eligibility to those who voluntarily quit a job or 
significantly reduce work effort. States may, at their own 
expense, provide food stamps to persons made ineligible by the 
work rule for 18-50-year-old adults without dependents and to 
noncitizens who are ineligible for Federally financed food 
stamps.
    Eligibility rules governing noncitizens greatly restrict 
their participation. Under the 1996 welfare reform law, most 
noncitizens were made ineligible for Federally financed food 
stamp benefits; illegally present aliens and non-immigrant 
aliens were already ineligible. Only a few categories of legal 
immigrants were left eligible: those with long U.S. work 
histories covered by Social Security, veterans and active duty 
military personnel and their families, and refugees and asylum 
seekers for five years after entry. Effective in late 1998, 
P.L. 105-185 restored eligibility to several significant new 
categories of legal immigrants: noncitizen children, who had 
entered as of August 22, 1996, as long as they are children; 
the elderly who were in the U.S. legally and age 65 as of 
August 22, 1996, the disabled who were in the U.S. as of August 
22, 1996, refugees and asylum seekers for seven years after 
entry, and Hmong refugees from Laos and certain Native 
Americans living along the Canadian and Mexican borders.
    Food stamp monthly benefits averaged $72 a person or about 
$170 a month for a typical household in fiscal year 1999. 
Benefits are inflation-adjusted each year, and vary with the 
type and amount of income, household size, and some nonfood 
expenses (e.g., high shelter costs, child support payments, 
dependent care expenses). They are provided monthly, and, 
except for very poor recipients, monthly food stamp benefits 
are not intended to cover all of a household's food costs. To 
determine monthly benefit allotments, a household's total cash 
monthly income is first reduced to a ``net'' income figure by 
allowing a ``standard deduction'' of $134 a month and 
additional deductions for certain expenses.
    Food stamp allotments equal the estimated monthly cost of 
an adequate low-cost diet, as determined by USDA, less 30 
percent of monthly net income. Food stamps are expected to fill 
the deficit between what a household can afford for food and 
the estimated expense of a low-cost, adequate diet. In fiscal 
2001, the maximum monthly benefit in the 48 contiguous States 
and the District of Columbia was $434 for a four-person 
household. Food stamp benefits also may beused for some 
prepared meals and monthly allotments may be spent in approved stores 
for virtually any food item--except alcohol, tobacco, or ready-to-eat 
hot foods.
    Benefits have historically been issued as paper 
``coupons.'' However, food stamp recipients in all or part of 
some 40 States and the District of Columbia now receive their 
benefits through ``electronic benefit transfer'' (EBT) systems 
and all States are expected to issue food stamp benefits 
through EBT systems by 2002.
    Variants of the regular Food Stamp Program operate in 
Puerto Rico, American Samoa, and the Northern Mariana Islands. 
Puerto Rico's Nutrition Assistance Program provides 75 percent 
of its benefits by EBT and 25 percent in cash. Until September 
2001, only cash was distributed. The annual block grant to the 
Commonwealth pays for all benefits, half of administrative 
expenses, and some work/training initiatives. The programs in 
American Samoa and the Northern Marianas also are limited 
grants, each funded at about $5 million a year. They are not 
cash assistance programs and are roughly similar to the regular 
program, although American Samoa's program is limited to the 
elderly and disabled and the Northern Marianas' program has 
special rules directing the use of some benefits to local 
products.

                            Purpose and Need

    Enrollment in the regular Food Stamp Program is responsive 
to changes in the economy, food stamp eligibility rules, 
administrative practices, and participants' perceptions about 
their eligibility for the Food Stamp Program and other public 
assistance programs. All-time peak participation in the program 
was 28 million in 1994. Since then, enrollment has declined 
continuously to a level of 16.9 million people in July 2000. 
While the rate of decline in food stamp enrollment has slowed 
recently, the total caseload is now at the lowest point since 
the late 1970s. By the mid-1990s, U.S. Department of 
Agriculture (USDA) studies indicated that about 71 percent of 
those eligible for food stamps actually participated, but this 
number had dropped to approximately 59 percent in 2000. 
Simultaneously, there has been a dramatic rise in reliance in 
emergency feeding sites like soup kitchens and food pantries.
    The Committee has reaffirmed that the Food Stamp Program is 
essential to transition from welfare to work. The new 
legislation strives to ensure a smoother transition from 
welfare to work; simplify program rules; provide the States 
with additional options, and more standardized benefit and 
eligibility rules that will make it easier for administrators 
and applicants and recipients; reform the quality control 
system used to evaluate States' performance; improve outreach 
efforts to make sure that people who qualify for the program 
are able to participate; extend benefits to certain groups made 
ineligible by welfare reform; and maintain the integrity of the 
program to ensure a nutrition ``safety net'' and a reduction in 
waste and abuse. A key priority for this legislation is the 
overarching goal of ensuring the Food Stamp Program fulfills a 
major role in supporting the working poor.
    In sum, the following were the goals that drove the 
revision to the Food Stamp Act: (1) to institute policies that 
will help participants effectively transition from welfare to 
work; (2) to simplify program rules and improve outreach 
efforts; and (3) to strengthen program benefits, including 
restoring benefits to all poor children.

                    Simplified definition of income

    A number of studies found that overly complex application 
forms were interfering with eligible families' access to food 
stamps. Questions about obscure forms of income, such as the 
proceeds of selling blood plasma or garage sales contribute to 
the length and complexity of many States' forms. This provision 
responds to that problem by allowing States to eliminate 
consideration of any types of income they do not consider when 
judging eligibility for TANF cash assistance or those required 
to be covered by Medicaid. It does not include items that are 
included in the definition of income but part of which are 
disregarded for the purposes of TANF and Medicaid by State 
agencies. This should help States limit the questions on their 
application forms to items that significantly affect families' 
ability to purchase food. Some States have already exercised 
their discretion under Medicaid and TANF to do this.
    The Department is authorized to issue regulations 
preventing other types of income from being excluded to prevent 
distortion of the food stamp benefit.

               Encouragement of payment of child support

    Current law gives non-custodial parents who have child 
support orders a deduction from income for benefit calculation 
for the amount of money they pay in child support. This 
recognizes that money paid to support a child in another 
household is not available to purchase food for the non-
custodial parent's current family. It also rewards the 
responsible behavior of non-custodial parents who make support 
payments. This provision allows the States to exclude 
completely from food stamp income calculations any child 
support payments made by a household member for a child in 
another family. Thus, when determining a household's 
eligibility (not just benefits), a food stamp office can 
disregard any money withheld from a worker's paycheck to meet 
his or her child support obligations. This is also a 
simplification of current procedures.

            Increase in benefits to households with children

    This section makes the Food Stamp Program more responsive 
to the needs of larger households by making benefits sensitive 
to household size. When a household applies for food stamp 
benefits, the State agency must assess its income and expenses. 
After determining income, all households--regardless of size--
are given a ``standard deduction'' of $134 before determining 
what other expenses the household experiences. The notion is 
that the first $134 of income that a household has is not 
available to purchase food. In fact, larger households are 
typically more poor, often because they are stretching the same 
limited income across more people. In addition, extremely poor 
people are often unable to afford their own apartments and have 
to double-up with friends and relatives. Families in these 
situations often have to apply for food stamps as one 
household. In addition, since the Federal poverty line rises 
each year to adjust for increases in inflation, so too would 
the standard deduction. This is a significant improvement over 
the current standard deduction, which has been frozen since 
1995. Prior to 1995, the standard deduction did increase each 
year with the Consumer Price Index.

               Simplified determination of housing costs

    To determine eligibility and benefit levels in the Food 
Stamp Program, States must collect information about shelter 
costs. Some States seek documentation from households breaking 
out the composition of their monthly payments to their 
landlords. The purpose of these requests is toidentify any 
amounts that may be disallowed when calculating the excess shelter 
deduction. This provision should eliminate that administrative burden 
by providing that any payments made to the landlord will be allowed as 
shelter costs without regard to whether they are itemized for these 
other costs.
    The Committee's proposal also simplifies the provision in 
current law concerning the treatment of homeless households' 
occasional shelter expenses. Unfortunately, these payments--to 
operators of single-room occupancy hotels, to friends with 
spare basement rooms, etc.--are almost impossible to verify 
because they occur so irregularly and informally. Yet failing 
to give these households any deduction for these costs would 
result in an overestimate of the amount of money they have 
available to purchase food. Accordingly, legislation from the 
early 1990s (and refined by the 1996 welfare law) provides that 
States may offer these households a $143 deduction for these 
costs. The current statute is ambiguous, however, about the 
relationship between this deduction and the regular shelter 
deduction. The statute should make clear that homeless 
households may claim this $143 deduction when they cannot 
verify sufficient housing costs to obtain a larger shelter 
deduction.

                      Simplified utility allowance

    States complain that the food stamp shelter deduction is 
unnecessarily complex. A significant part of this complexity 
involves the rules for calculating households' utility costs. 
Current law seeks to simplify these determinations by allowing 
States to use Statewide estimates called standard utility 
allowances (SUAs) instead of determining each household's 
actual utility costs. The current law imposes limitations on 
when the SUA may be applied, which undermines the State's 
capacity to simplify the calculation of the deduction. One 
rule, which is eliminated in this section, requires the SUA to 
be pro-rated or disallowed if an eligible family is doubled up 
with another individual or family that is not getting food 
stamps or that is getting food stamps separately because it 
buys and cooks its own food. Another rule, which will be 
eliminated in this section, prohibits granting the SUA to 
certain households in public housing whose utility costs are 
partially covered by the housing authority. Although neither of 
these rules affects large numbers of households, they increase 
the complexity of the procedures States must teach their 
eligibility workers and the instructions they must program into 
their computers.

        Simplified procedure for determination of earned income

    One of the most difficult things for households to verify 
is earned income. Low-wage workers who do not have access to 
multiple pay stubs may have difficulty obtaining food stamps. 
Even if the household can submit all of the required pay stubs, 
the eligibility worker may require a letter from the employer 
or may insist on contacting the employer's payroll department 
to resolve ambiguities. This may cause households to withdraw 
their applications rather than allow their employer to know 
that they are receiving food stamps. Under current law, States 
must convert the earned income of a household that is paid 
weekly or biweekly into a monthly figure. States report that it 
is often difficult to tell the difference between biweekly and 
semi-monthly pay schedules and many low-wage workers may not 
know themselves whether they are paid biweekly or semi-monthly. 
Eliminating the distinction between biweekly and semi-monthly 
income will allow States to reduce their verification demands 
on low-wage workers without risking quality control (QC) 
errors. In so doing, it may make the Food Stamp Program a more 
effective support for low-income working families.
    It is unlikely that most States will have the capacity to 
determine how much to adjust the earned income deduction to 
offset the cost of converting weekly and biweekly income to 
monthly amounts in this simplified manner. Some households are 
paid monthly or semi-monthly; other households have self-
employment income that may be averaged over several months or 
anticipated a month at a time. States are unlikely to have good 
data on what proportion of their caseloads consist of these 
types of households (or others for which the new conversion 
procedures would have no cost). The Department should provide 
States with guidance or a simple rule of thumb by which they 
may determine the amount by which the earned income deduction 
can be adjusted.

                  Simplified computation of deductions

    Current food stamp rules have provisions that lead States 
to require households to report changes in their circumstances 
that affect deductions from income and benefits. In addition, 
States may not disregard reported changes. In both cases, 
constantly changing circumstances can lead to erroneous benefit 
decisions for which States are penalized. This section allows a 
State to decide that it generally will address changes in 
households' deductions and circumstances when it undertakes 
full eligibility review (within 12 months for most 
individuals), without being penalized.

                   Simplified definition of resources

    Food stamp application forms are often unnecessarily 
lengthened by questions about ownership of assets that few 
household own and that States disregard when determining 
eligibility for TANF cash assistance and Medicaid. If States 
are able to exclude these types of resources from consideration 
in all three programs, it is more likely they can remove 
questions about them from common application forms. To guard 
against abuse, USDA is required to specify, by regulation, 
those types of resources that are so essential to equitable 
determinations of eligibility for food stamps that States are 
not permitted to exclude them regardless of the States' 
policies in TANF and Medicaid.

               Alternative issuance systems in disasters

    The Food Stamp Act gives the Secretary of Agriculture broad 
authority to provide emergency food stamp assistance to victims 
of floods, hurricanes, earthquakes, fires, and other disasters. 
The Secretary typically dispenses with many of the usual food 
stamp eligibility requirements and application procedures to 
help those in emergency need quickly. Historically, this has 
been done by issuing paper food stamp coupons to disaster 
victims. With nationwide implementation of electronic benefit 
transfer (EBT) expected within the next couple of years, 
however, paper food stamp coupons will no longer exist. In some 
instances, EBT may be an impractical way to provide aid when it 
is needed most. This proposal allows the Secretary to consider 
other means of delivering assistance, including cash if 
necessary, where EBT is not a feasible benefit delivery system.

             State option to reduce reporting requirements

    Regulations the Secretary of Agriculture promulgated in 
November of 2000 allow States to use semi-annual reporting for 
households with earnings, but not for those without earnings. 
Semi-annual reporting reduces burdens on households and States 
and, to date, thirteen States have either adopted semi-annual 
reporting or are seriously considering it. Some States, 
however, have been reluctant to adopt semi-annual reporting 
because they want most of their caseloads to be under a single 
reporting system. This section extends the semi-annual 
reporting option to all households except the few that the Food 
Stamp Act exempts completely from periodic reporting to prevent 
undue hardship: homeless households, migrant and seasonal 
farmworkers, and households in which all adults are elderly or 
disabled and have no earnings. Like the semi-annual reporting 
option under USDA's regulations, this statutory option requires 
a household subject to semi-annual reporting to notify the food 
stamp office if its income exceeds 130 percent of the poverty 
line, which is the Food Stamp Program's gross income 
eligibility limit.
    This provision essentially codifies the Department's 
current policies for quarterly reporting and semi-annual 
reporting and allows States to extend those policies to the 
majority of their caseloads. In so doing, it would extend to 
these newer forms of periodic reporting the same protections 
currently provided in statute and regulation in monthly 
reporting. In one respect, some clarification may be needed in 
the Department's regulations. This involves periodic reporting 
for households on Indian reservations. Because of limited mail 
service on many reservations, current law allows households on 
reservations an extra month in which to submit their report 
forms. Unfortunately, this has been interpreted to require 
States to assess claims for over-issuances against households 
when the submitted report form indicates a reduced need for 
assistance. This results in an undue burden on working 
households with variable income as well as on the State 
agencies in these States. The Committee expects that the 
Department will promptly clarify this policy so that no 
household is treated as having been overissued food stamps if 
it returns its report form by the extended deadline provided in 
the statute.

                 Benefits for adults without dependents

    The current law related to benefits for able-bodied adults 
without dependents is extremely complex. Under current law, 
this group of people may receive up to three months of food 
stamps within any 36 month period, without working. An 
individual who has exhausted all three of those months can 
potentially re-qualify for an additional three months by going 
through a complex reconstruction of work hours over an extended 
period of time. In addition, individuals subject to the three-
month time limit are required to report some types of changes, 
but not others, that might affect their status and failure to 
make a required report could be prosecuted as food stamp fraud. 
If a quality control reviewer reaches a different conclusion 
about a determination than the eligibility worker did, the 
worker will be assessed an error. Six months represents a more 
reasonable period of time in which to find and keep a job. The 
Committee's provision makes clear that an individual who has 
exhausted her or his six-month eligibility period can re-
qualify by working or entering a work program.
    In addition, current law allows recipients participating 20 
hours per week in employment or training programs to receive 
food stamps without regard to the time limit but rules out job 
search and job search training programs as counting as an 
acceptable employment or training program. The only programming 
most States may offer this population in any substantial 
quantity is job search or job search training. Since welfare 
reform, these types of programs are well known and virtually 
all States are currently operating them in conjunction with 
their cash assistance programs. Allowing intensive job search 
programs that meet standards established by USDA will produce 
more work slots for persons subject to the time limit and can 
also help people actually become employed.

             Preservation of access to electronic benefits

    Current Federal rules allow States to take households' 
benefits off-line if the household does not use its electronic 
benefit transfer (EBT) card for three months. The household 
then can only use its benefits if it contacts its eligibility 
worker to have the benefits reinstated. About half the States 
have taken this option. After an EBT account has been inactive 
for 12 months, the unused benefits are permanently expunged. 
About one-fifth of all elderly and disabled recipients get the 
$10 per month minimum or some other modest food stamp benefit 
and are accustomed to saving up several months of benefits so 
they can spend their food stamps in a single shopping trip. 
They may do this because the monthly benefit is so small or to 
avoid the stigma of being seen shopping with a food stamp EBT 
card. If benefits are taken off-line, some recipients do not 
understand how to reactivate benefits or assume they are no 
longer eligible.
    This legislation prohibits States from taking recipients' 
EBT accounts off-line unless the account has been inactive for 
approximately six months. If a State does take the account off-
line, it is required to send the household a notice informing 
it how to reinstate those benefits and offering assistance to 
households having a difficult time accessing benefits.
    The Committee is interested in seeing that new food 
retailers or retailers implementing new systems in an EBT 
environment are provided the opportunity to test their systems, 
using test cards provided by States, before going on-line. 
Towards this end, the committee encourages FNS to continue to 
work with States to have them provide this service. Minimally, 
as States develop or contract for new EBT systems, the 
Committee expects this ability to be built into those new 
systems and contracts, and then expects the States to provide 
this service.
    The Committee is interested in seeing that the risk to 
retailers is mitigated when the EBT system is down and the 
retailer uses a back-up system. It is the sense of this 
Committee that retailers should have the ability to recover the 
remaining balance in a household's account when that remaining 
balance proved to be insufficient to cover the entire 
transaction that was stored for later submission. It is 
understood in these situations that the transaction would have 
been otherwise approvable. Towards this end, the Committee 
supports the actions being taken by the Food and Nutrition 
Service to ensure that this is an option available for States 
and retailers.

        Cost neutrality for electronic benefit transfer systems

    The Food Stamp Act requires all States to issue food stamp 
benefits through electronic benefit transfer (EBT) systems by 
October 1, 2002. To date, some 43 States have EBT and 80 
percent of food stamp benefits are issued electronically. A few 
States, however, appear to be lagging. USDA reports that some 
of these States have had difficulty obtaining an EBT vendor 
because ofthe requirement in current law that EBT systems not 
cost the Federal Government more than the prior paper issuance systems 
did. These States operate efficient, economic food stamp coupon 
issuance systems and EBT systems that might meet the cost neutrality 
requirement in other States are too expensive for them.
    This section eliminates the formal EBT cost-neutrality 
requirement from the Food Stamp Act. In so doing, the Committee 
is accepting the Department's assurances that it will remain 
vigilant to ensure that costs do not rise inappropriately. 
Because EBT contracts are subject to the Department's approval, 
this change should not be interpreted as an invitation for 
vendors to increase the prices they charge the program.

    Alternative procedures for residents of certain group facilities

    Food stamp benefits for residents of group homes generally 
serve to subsidize the cost of meals in these facilities since 
the residents generally do not purchase or prepare food 
individually. Determining an individual's benefit within this 
type of setting is extremely complex. This proposal allows for 
the use of the standard monthly benefit in homes and centers 
for every full month during which a recipient was in residence 
and would have those benefits pro-rated based for partial 
months of residence. The administration of the group home or 
center is recognized as the authorized representative of the 
residents. Upon leaving the group home or treatment center, the 
recipient will again receive food stamp benefits directly. 
During the month he or she leaves the home or center and the 
following month, the resident can receive food stamps based on 
the same standardized allotment that was paid to the facility 
when he or she was in residence. As soon as the former resident 
reapplies for food stamps, his or her benefits will be based on 
typical food stamp rules.
    This provision simplifies the administration of the Food 
Stamp Program for State agencies and group home and center 
administrators alike. In exchange for this simplification, 
however, this provision requires the home and center 
administrators to take steps to help residents to continue to 
receive food stamps upon moving out of the facility. They 
should be required to provide forwarding addresses for departed 
residents to the food stamp office when possible. Homes and 
centers should not receive food stamps for any part of the 
month when the facility is not providing meals to the 
recipient. This provision should not be construed as limiting 
the ability of eligible individuals who have left a facility to 
receive food stamps under the usual rules.
    It should be noted that the Department's regulations 
correctly limit the definition of an institution to a place 
that provides the majority of meals to its residents. The new 
group home and center procedures do not apply to a facility 
that does not regularly provide most of its residents' meals.

    Availability of food stamp program applications on the Internet

    Working families, in particular, find it very difficult to 
apply for and obtain food stamps. One simple way to make 
applications available is by requiring that States with a 
website post electronic applications on their site, which may 
be downloaded at libraries, community centers, and other 
locations. This provision only requires that States post the 
application in each language in which they already make printed 
applications available. This represents an extension of service 
that is already available. People can obtain applications by 
mail and can begin to fill them out before they walk into the 
food stamp office. This allows them to collect all of the 
information they might need ahead of time and saves time at the 
food stamp office.

          Simplified determinations of continuing eligibility

    In benefit programs like Medicaid, the Supplemental 
Security Income (SSI) Program, and Social Security, the 
administering agency determines when it needs to conduct a 
review of the recipient's circumstances and asks the person to 
provide information or to appear at its office. Recipients who 
do not appear or cooperate in the review, have their benefits 
terminated. The initiative is up to the administering agency, 
which retains substantial flexibility in scheduling and in 
determining which elements of eligibility merit review. Current 
food stamp rules, by contrast, require recipients to apply for 
recertification after a specific number of months fixed at the 
time she or he last applied. Furthermore, States are required 
to conduct reviews of households whose circumstances they 
already know well, and they are required to review all areas of 
eligibility (since the household is treated as a new applicant) 
rather than just those that seem potentially problematic.
    This provision retains the same 12-month (24 for the 
elderly and disabled) limit on the intervals between 
redeterminations of households' eligibility that are found in 
current law, which ensures that States stay in touch with all 
those receiving benefits. It differs from current rules, 
however, in that it does not require the State to schedule each 
redetermination far in advance. It thus gives States greater 
discretion to manage their caseloads by replacing the food 
stamp recertification process with the redetermination process 
used in other benefit programs.
    The current recertification process was designed before the 
present food stamp quality control (QC) was established. With 
States distributing food stamp benefits funded entirely by the 
Federal Government, Congress was concerned that States would 
approve an initial application and then simply leave the 
household on the program indefinitely without bothering to 
determine whether the recipients remained eligible. Today, the 
food stamp QC system imposes fiscal sanctions on States with 
high error rates. States can no longer afford to neglect 
households' continued eligibility for benefits.

        Clearinghouse for successful nutrition education efforts

    Nutrition education in the Food Stamp Program is highly 
recommended but not required. Furthermore, a State that decides 
to conduct nutrition education through the program must use 
administrative funds, subject to a 50-50 State-Federal match. 
As a result, some States do not engage in nutrition education 
and, among the States that do, there is wide variability. In 
some cases, posting posters or making available a brochure is 
considered to be nutrition education. This provision allows 
States that have good models of successful nutrition education 
programs to share them with other States. This will save States 
time and money in designing a program and may serve to 
encourage more States to engage in nutrition education.
    In an effort to further promote nutrition education, the 
Committee encourages the Secretary to use such funds as deemed 
necessary to promote healthy nutrition over the life of the Act 
through the use of the Food Guide Pyramid stressing the 
following areas: (1) Making the Food Guide Pyramid a component 
of nutrition education and also make publications, specifically 
forrecipients of Federal supplemental feeding programs 
including the WIC and food stamp programs; (2) Developing a Food Guide 
Pyramid lesson plan for use in elementary school health or physical 
education classes, or any class that might incorporate nutrition as one 
of its topics; (3) Making available Food Guide Pyramid posters and 
pamphlets to physicians' offices as well as recreation and child care 
centers, cafeterias, and classrooms; and (4) Encouraging private retail 
food outlets to mount and distribute Food Guide Pyramid posters and 
pamphlets.
    The Committee is aware of ongoing efforts at the State 
level through the Food Stamp Program to conduct nutrition 
education activities that reach large numbers of Food Stamp and 
similar low- income households as they transition from welfare 
to work and self-sufficiency. To expand such efforts the 
Committee encourages their State plans to promote achievement 
of the Dietary Guidelines for Americans statewide and in lower 
income communities. Social marketing may include but is not 
limited to: public service and paid advertising; public 
relations; promotions; education; public and private 
partnerships; policy, systems and environmental change; 
community development; media advocacy; and consumer 
empowerment. The Committee also recognizes the need to leverage 
funding for such purposes and encourages utilization of direct 
and in-kind contributions on a 50/50 basis as part of State 
Administrative Expenses.

       Transitional food stamps for families moving from welfare

    This section builds on regulations USDA published in 
November 2000 (not yet in effect) that give States the option 
to continue food stamps for three months to families leaving 
cash assistance without requiring the family to submit any 
additional information. The majority of families leaving the 
welfare rolls still have low incomes and remain eligible for 
food stamps. Nonetheless, States often require them to reapply 
or supply new information in order to continue to receive food 
stamps. Because of the pressures these families are under in 
their first months off of cash assistance, many do not fully 
comply and are terminated. Transitional food stamps allow the 
State to continue the family's food stamps based on the 
information it already has without requiring a new application.
    Under this proposal, families would know that if they find 
a job, their food stamps would be guaranteed to stay in place 
for six months. While the family's earnings fluctuate as its 
hours of work change, transitional food stamps would offer a 
stable source of support to purchase food. Helping families 
retain food stamps after leaving welfare for work can help make 
sure that their transition is successful and can ensure that 
they are better off working than they were on welfare. The 
provision expands upon the Department's existing regulations. 
It is designed to make it easy for the State to determine the 
correct allotment for a household that is in the transitional 
period: it simply freezes the household's prior benefit, 
subject to adjustment for the loss of cash assistance and 
certain reported changes.
    Individuals who leave welfare for work and become 
ineligible for full family coverage under Medicaid are 
currently eligible to receive six months of transitional 
Medicaid benefits. This section harmonizes Food Stamp and 
Medicaid benefits for people who leave welfare.

           Delivery of notices of adverse action to retailers

    Sending a notice via certified mail is no longer the only 
way to ensure confirmation of receipt.

                    Reform of quality control system

    Every year, USDA requires States to audit a random sample 
of more than 50,000 food stamp cases nationwide and then 
estimates payment error rates for each State. The State's error 
rate is the sum of the percentage of overpayments it makes plus 
its percentage of under-issuances to households that receive 
food stamps. States whose combined error rates exceed the 
national average are subject to automatic fiscal penalties. The 
amount of those penalties is calculated based on a complex 
sliding scale that is designed to impose more severe penalties 
on States whose estimated error rates exceed the national 
average by greater margins. By definition, close to half of all 
States are likely to have error rates above the national 
average every year. In addition, the measurement of error rates 
is subject to substantial statistical error. Thus, in any given 
year, over thirty States may be either subject to penalties or 
at risk of penalties if they draw an unlucky sample or if the 
national average unexpectedly drops from its level the prior 
year.
    Because of sampling error, some States are subject to 
penalties when in fact their performance--if properly 
measured--is better than the national average. To avoid this 
problem, this provision treats a State as having a payment 
accuracy problem only if there is 95 percent statistical 
confidence that the State's payment error rate exceeds the 
national average by at least one percentage point. The one 
percentage point margin of error, which was part of the food 
stamp QC system from 1988 until 1993, helps avoid holding about 
half the States liable in any given year regardless of their 
performance, which is the inevitable consequence of measuring 
States against the national average. It also helps prevent 
states with steady performance from potentially being penalized 
because of unexpected drops in the national average.
    This section continues current administrative policy of 
adjusting states' error rates to reflect the impact of high or 
increasing shares of working poor households or immigrants 
within a state's caseloads. The food stamp QC system should not 
punish states that do an especially good job of serving these 
vulnerable but error-prone groups--or of moving families from 
welfare to work. It is the Committee's intent that the policy 
of adjusting states' error rates to reflect the impact of high 
or increasing shares of working poor households or immigrants 
continue to be implemented for fiscal year 2001, in the same 
way it was done for fiscal years 1999 and 2000.
    Finally, ``enhanced funding'' has traditionally served as a 
way to reward States with extremely low error rates. After 
2002, this type of bonus payment is repealed but new 
performance measures are rewarded under section 432.

        improvement of calculation of state performance measures

    For almost two decades, USDA's deadline for announcing 
States' quality control (QC) error rates was June 30. As part 
of legislation enacted in 1993, USDA is now required to issue 
these error rates by mid-April. Reverting to the traditional 
June 30 deadline will relieve State and Federal QC officials of 
unnecessary pressures and allow more time to resolve disputes 
and negotiate reinvestment agreements and corrective action 
plans. The Department remains free to announce the error rates 
in April or at any other time up until the end of June.

               High performance bonus payments to States

    In section 530, the Committee bill has removed enhanced 
funding for States with very low error rates. However, the 
Committee believes that States should be rewarded for excellent 
and improved performance. This provision establishes a more 
targeted payment to States that achieve the goals of the Food 
Stamp Program. The section establishes one measure related to a 
State's participation rate among low-income working families 
and allows the Secretary, in consultation with State 
organizations, to establish four additional measures of State 
performance that reflect the Food Stamp Program's goals of 
preventing hunger among low-income people. One of the measures 
will have to assess timeliness of customer service and the 
other three are to be set at the discretion of the Secretary in 
consultation with the State groups within six months from the 
bill's enactment.

                    Employment and training program

    From the late 1980s through fiscal year 1996, States, 
collectively, received $75 million a year of a 100 percent 
Federal grant to operate FSE&T programs. States received an 
unlimited 50 percent Federal match for any additional funds 
they chose to spend on FSE&T (subject to a $25 per month for 
every recipient cap). When the Food Stamp Program was last 
reauthorized in 1996, Congress gradually increased the $75 
million annual allocation so that it will reach $90 million in 
fiscal year 2002.
    In addition, in 1997 Congress more than doubled the amount 
of unmatched Federal funds available for FSE&T (currently 
running about $150 million per year) to help States meet the 
cost of providing work slots to persons affected by the three-
month time limit. The Balanced Budget Act of 1997 set aside 80 
percent of the total unmatched Federal funding to provide work 
slots that would allow time limited individuals to continue to 
receive food stamps beyond the initial 3 months. To prevent 
States from substituting this new unmatched Federal money for 
their own moneys that they were already expending on FSE&T, the 
1997 legislation required States to meet a maintenance-of-
effort requirement before accessing the new funds it was 
adding. A large share of the new FSE&T money provided in 1997 
remains unspent. States have urged that the 80 percent set-
aside, the maintenance of effort requirement, and the 
reimbursement rate limits be repealed. This will make the 
unmatched Federal FSE&T funds available to provide services to 
other food stamp recipients, primarily families with children. 
Finally, the $25 per month cap is raised to $50 for 
transportation and other work expenses because $25 has often 
not been enough money to adequately help individuals.

              Coordination of program information efforts

    The Food Stamp Act prohibits States from spending TANF 
funds on any activities that could be reimbursed instead as 
food stamp administrative expenses. Since food stamp 
informational activities are reimbursable under the Food Stamp 
Act, this provision prohibits spending TANF funds on them. As a 
result, States have difficulty conducting multi-program 
informational activities that include food stamps. For example, 
if a State wishes to inform TANF applicants and recipients 
about the work support programs available to them, it may use 
TANF funds to discuss child care subsidies, Medicaid, child tax 
credit, etc. If the State also wishes to mention food stamps, 
however, it must undertake a complex cost allocation exercise 
to ensure that the correct share of those costs are charged to 
the Food Stamp Program. Faced with this prospect, some States 
have elected simply to exclude all mention of food stamps in 
their efforts to highlight how work support programs can make 
employment preferable to receipt of cash assistance. Providing 
potentially eligible households information about food stamps, 
and informing current recipients that they may continue to 
qualify after becoming employed, is crucial. These activities 
constitute such a small and isolated aspect of States' 
administrative activities that allowing them to be supported 
with TANF funds without cost allocation will not undermine the 
integrity of the financing system the 1998 law put in place. 
This provision will not allow States to use TANF money as a 
match to get Federal Food Stamp money.

                        expanded grant authority

    The authority of the Secretary to make grants and contracts 
for food stamp research, which includes waivers of food stamp 
rules, has been called into question. Specifically, some have 
questioned USDA's ability to let grants to research 
organizations working on behalf of government entities. This 
provision makes clear the Food and Nutrition Services (FNS) 
ability to issue grants and contracts to non-government 
entities that include waivers.

                   access and outreach pilot programs

    Improvements are needed to make sure the Food Stamp Program 
is more accessible to eligible individuals and families and 
that its benefits are available. For example, there have been 
marked decreases in the participation by Food Stamp 
participants in farmers' markets and road stands. The new 
electronic benefit transfer (EBT) system has made it very 
difficult to redeem food stamp benefits at these sites. USDA 
will be provided with additional funds for grants that would 
improve outreach and access in the Food Stamp Program. Priority 
will be given to State and non-government organization 
partnerships. Examples of initiatives that may receive funding 
include but are not limited to: establishing a single site at 
which individuals may apply for food stamps, Medicaid, SSI, and 
other assistance programs; developing common forms that will 
allow for one-stop-shopping; dispatching caseworkers to conduct 
outreach and enroll individuals in a remote but often visited 
location (like a shopping mall, community center, or food 
bank); developing cost effective ways to encourage shopping in 
farmers' markets, and roadside stands by Food Stamp Program 
participants.

           consolidated block grants and administrative funds

    The Committee's provision consolidates the two nutrition 
assistance grants, now in the Food Stamp Act. In order to 
ensure that the grant for Puerto Rico continues to be indexed 
and to grant the same status to the American Samoa grant, this 
provision consolidates both grants. In addition, Puerto Rico is 
authorized to spend up to $6,000,000 of its 2002 funds to 
modernize computer equipment needed for electronic benefit 
transfer (EBT) systems. This provision authorizes use of 
administrative funds with no requirement for a 50-50 match 
between the Federal government and Puerto Rico.

                 assistance for community food projects

    Community Food Projects are designed to increase food 
security in communities by bringing the whole food system 
together to assess strengths, establish linkages, and create 
systems that improve the self-reliance of community members 
regarding food needs. The 1996 FederalAgriculture Improvement 
and Reform Act (FAIR) established new authority for Federal grants to 
support the development of Community Food Projects to meet the needs of 
low-income people by increasing their access to fresher, more 
nutritious food supplies; enhancing the self-reliance of communities in 
providing for their own food needs; and promoting comprehensive 
responses to local food, farm, and nutrition issues. These grants are 
intended to help eligible private non-profit entities that need a one-
time infusion of Federal assistance to establish and carry out multi-
purpose community food projects. Projects are funded from $10,000-
$250,000 and from one to three years and require a dollar for dollar 
match in resources.

 Availability of commodities for the emergency food assistance program

    The Emergency Food Assistance Program (TEFAP) supports 
local emergency feeding organizations, such as food banks, soup 
kitchens and shelters, churches and food pantries, by offering 
donated foods to lower-income families and individuals. An 
increased demand on emergency feeding facilities necessitates 
an increase in TEFAP funding. According to a recent USDA study, 
reported demand for food assistance at soup kitchens and food 
pantries has increased by between four percent and seven 
percent a year since 1997. Covering the cost of distributing 
the growing amount of Federally and privately donated 
commodities handled by State and local emergency food providers 
is proving to be a significant problem. TEFAP funding for 
distribution expenses can be used to pay for processing 
(including of game meat), storage, transportation, and 
distribution costs associated with both Federally and privately 
donated foods. The $10 million dollar set-aside is in addition 
to the regular appropriation for distribution costs authorized 
under The Emergency Food Assistance Act, but it will be 
allocated to States in the same manner. Note that section 163 
of this bill provides up to $40,000,000 per year in additional 
commodities for The Emergency Food Assistance Program.

          Report on use of electronic benefit transfer systems

    The Food Stamp Act requires all States to issue food stamp 
benefits through electronic benefit transfer (EBT) systems by 
October 1, 2002. To date, some 43 States have EBT and 80 
percent of food stamp benefits are issued electronically. A few 
States, however, appear to be behind schedule. This report will 
provide an assessment of difficulties encountered by States in 
instituting the system and will also request a report on the 
extent of fraud using EBT as opposed to paper coupons. The 
report will also indicate how USDA, States, retailers, and EBT 
contractors are addressing problems that exist.

                    Vitamin and mineral supplements

    The National Academy of Sciences is in the process of 
reviewing and revising nutrient recommendations and is, in many 
cases, recommending higher Dietary Recommended Intakes (DRIs) 
for a number of nutrients for purposes of health promotion and 
disease prevention. As a result, people may not be consuming 
all of the nutrients they need through foods and may need to 
supplement their diets. Dietary supplement intake in this 
country is high (approximately 40 percent of adults consume 
them). Food Stamp participants should have the ability to 
purchase vitamin-mineral supplements to supplement their diets, 
if they so choose. This provision limits purchase of 
supplements to those containing only vitamins and minerals and 
excludes herbals and botanicals. The impacts study will serve 
to assess the ease with which the provision is implemented and 
its consequences, including economic, nutrition, and health 
impacts of implementing this provision.
    The Committee does not intend that this provision be 
interpreted to change the rules for approving stores as food 
stamp retailers.

                  Subtitle B--Miscellaneous Provisions


          Partial restoration of benefits to legal immigrants

    Legal immigrant children who arrived in the U.S. after 
August, 1996 are ineligible for the Food Stamp Program, even 
though adequate nutrition is critical for this age group. By 
restoring benefits to all children, food stamp eligibility 
rules for children will become less complex and easier to 
administer and explain. This provision also will help citizen 
children whose parents are immigrants. The Congressional Budget 
Office (CBO) estimates that restoring benefits to children will 
help some 60,000 children in an average month.
    This section suspends deeming rules for children but not 
for any other group. This means that a great majority of 
sponsored immigrants will continue to be unable to get food 
stamps during their three years in the United States. Even if 
sponsors' income and resources are low enough to allow the 
immigrant to qualify, few sponsors are prepared to comply with 
food stamp reporting and verification requirements.
    Currently, immigrants must work (and therefore pay taxes) 
at least 40 quarters to be able to participate in the program. 
Sixteen quarters of work represents a reasonable amount of time 
in which individuals have established a solid basis of personal 
responsibility, one of the guiding principles of welfare 
reform. CBO estimates that this will potentially help some 
65,000 in an average month.
    Under the welfare law, refugees and people who are seeking 
asylum and met all other eligibility criteria could receive 
food stamp benefits during their first five years in the United 
States. This cap was extended to seven years in 1998. This 
limit assumed that refugees and people seeking asylum could 
become citizens in that period of time. Because of backlogs in 
the naturalization process that is not always the case. CBO 
estimates that removing the cap will help approximately 45,000 
people in an average month.
    Persons are only considered ``disabled'' for food stamp 
purposes if they receive one of a specified list of disability 
programs, like Supplemental Security Income (SSI) or veteran's 
payments. The effect of this provision will be to lift an 
arbitrary bar against the disabled based on their date of 
entry. In effect, however, no additional people will be able to 
participate in the Food Stamp Program since SSI places a strict 
restriction on disabled immigrants who arrived in the U.S. 
after August 1996. These individuals will only be able to 
participate in the Food Stamp Program if SSI law changes.

                          Commodity Purchases

    Schools that participate in the School Lunch Program are 
entitled to a specific dollar value ofcommodities based on the 
number of meals they serve, in addition to cash subsidies. The 
inflation-indexed commodity entitlement is 15 cents a meal for the 
2001-2002 school year. Schools and other providers also receive bonus 
commodities donated from Federal stocks acquired for agricultural 
purposes at the Department's discretion. Entitlement commodities must 
equal 12 percent of the cash and commodity assistance provided under 
the School Lunch Program, and the 15-cents-a-meal guarantee may, in 
effect, be increased to meet this requirement.
    Prior to fiscal year 1999, only the value of entitlement 
commodities was counted toward meeting the 12 percent commodity 
requirement. However, for 1999-2001, the law was revised so 
that the value of ``bonus'' commodities supplied at the 
Agriculture Department's discretion from already acquired 
stocks also counted toward the 12 percent minimum. This 
provision provides a two-year modification so that the issue 
may be more fully addressed during child nutrition programs 
reauthorization in 2003.

    Exclusion of certain military basic allowances for housing for 
     determination of eligibility for free and reduced price meals

    The Basic Allowance for Housing (BAH) for service members 
in private housing is reflected on his or her Military Leave 
and Earnings Statement even though the funding passes directly 
through to the housing owner. This added ``income,'' which is 
not reported for members living in traditional on-base housing, 
causes many service members to lose eligibility for free and 
reduced meals for their children. This provision excludes 
consideration of the BAH for free and reduced price school 
meals. This provision extends through 2003 to coincide with 
child nutrition programs' reauthorization.

  Eligibility for assistance under the Special Supplemental Nutrition 
             Program for Women, Infants, and Children (WIC)

    The Basic Allowance for Housing (BAH) for service members 
in private housing is reflected on his or her Military Leave 
and Earnings Statement even though the funding passes directly 
through to the housing owner. This added ``income,'' which is 
not reported for members living in traditional on-base housing, 
causes the loss of WIC eligibility for many women, infants, and 
children in military families. This provision will prevent 
counting of the BAH in WIC eligibility determination.

                Senior Farmers' Market Nutrition Program

    On January 4, 2001, the USDA announced the award of almost 
$15 million in grants to 31 States and 5 Indian Tribal 
Organizations for a new Seniors Farmers' Market Nutrition Pilot 
Program (SFMNPP). Under the program, CCC made grants to States 
and Indian tribal governments to provide coupons to low-income 
seniors that may be exchanged for eligible foods at farmers' 
markets, roadside stands, and community supported agriculture 
programs. The purposes of the Seniors Farmers' Market Nutrition 
Pilot Program are to (1) help low-income seniors obtain fresh, 
nutritious, unprepared, locally grown fruits, vegetables, and 
herbs from farmers' markets, roadside stands and community 
supported agriculture programs, (2) increase the domestic 
consumption of agricultural commodities by expanding or aiding 
in the expansion of domestic farmers' markets, roadside stands, 
and community support agriculture programs, and (3) develop or 
aid in the development of new and additional farmers' markets, 
roadside stands, and community supported agriculture programs. 
The pilot program has been very successful. The Committee does 
not intend to limit funding for the program to the $15 million 
annual level, if the Department chooses to fund the program at 
a higher level.

                   Fruit and vegetable pilot program

    The purpose of the fruit and vegetable pilot program is to 
determine whether or not children's diets can be improved if 
they are provided with free fruits and vegetables. An 
evaluation will help to determine whether or not students took 
advantage of the program; whether or not interest grew or was 
decreased in the program over time; and what effect, if any, 
this program had on vending machine sales.
    The Committee recommends that the USDA Small Farms/School 
Meals Program be continued for the next two years in the four 
States (Iowa, Kentucky, North Carolina, West Virginia) in which 
it currently operates. This program, facilitates connections 
between school food service officials, State departments of 
agriculture, Cooperative Extension, and the Department of 
Defense's produce procurement program with the goal of 
increasing the sales of locally grown foods to school meals 
programs. The merits of the program should be re-evaluated 
during child nutrition programs' reauthorization in 2003. 
Perhaps the program would warrant expansion at that time.

                    Congressional Hunger Fellowship

    This section formalizes an internship program already being 
carried out by the Congressional Hunger Center and funded under 
annual appropriations bills, as a memorial for the Honorable 
George T. (Mickey) Leland, the late Representative from Texas 
and the Honorable Bill Emerson, the late Representative from 
Missouri.

           Nutrition information and awareness pilot program

    The committee recognizes that there is a very high rate of 
diabetes among Native Americans. In August, 2001, the U.S. 
Department and Health and Human Services announced that proper 
nutrition and exercise could reduce the risk of diabetes by 58 
percent. Therefore, the committee directs USDA to take an 
active role in promoting effective nutrition within those 
programs utilized by Native American populations, such as the 
Food Distribution Program on Indian Reservations and the School 
Lunch Program, in an effort to curb the diabetes epidemic.

                            TITLE V--CREDIT


     Consolidated Farm and Rural Development Act Lending Authority

    The basic statutory authority for the farm loan programs is 
the Consolidated Farm and Rural Development Act, as amended 
(P.L. 87-128), which is commonly referred to as the Con Act. 
The federal government's farm loan programs are operated by the 
Farm Service Agency (FSA) of the U.S. Department of 
Agriculture. FSA provides financial assistance to farmers and 
ranchers through direct, government-funded loans and through 
guarantees on loans made by commercial lenders. To obtain a 
direct FSA loan, a farmer or rancher must be unable to obtain 
commercialcredit at reasonable rates and terms. To obtain a 
loan guarantee, a lender must certify that it is unwilling to make the 
loan without a government-backed guarantee.
    FSA provides various types of direct and guaranteed loans 
to the nation's farmers and ranchers. For example, direct farm 
ownership loans are made for buying farm and ranch real estate 
and making capital improvements. Guaranteed farm ownership 
loans are made for the same purposes and for refinancing 
existing debts. Also, the FSA makes direct farm operating loans 
for purposes such as buying feed, seed, fertilizer, livestock, 
and farm equipment; paying family living expenses; and, subject 
to certain restrictions, refinancing existing debts. Guaranteed 
farm operating loans are made for the same purposes but without 
restriction on refinancing existing debts. Additionally, 
natural disaster emergency loans are direct loans made to 
farmers and ranchers whose operations have been substantially 
damaged by adverse weather or other natural disasters.
    When a borrower has problems repaying his or her direct 
farm loans, FSA has various tools to resolve the delinquency, 
including: (1) rescheduling or reamortizing loan terms, which 
may include changing interest rates and the repayment period; 
(2) restructuring the loans, which may include reducing 
(writing down) some of the outstanding debt, so that the 
borrower can continue in farming; (3) allowing a borrower who 
does not qualify for restructuring to pay an amount based on 
the value of collateral security, which is less than the 
outstanding debt and results in FSA's forgiving (writing off) 
the balance; and (4) reaching a final resolution of the debt 
that may or may not include a payment by the borrower, which 
also results in debt forgiveness. When a borrower defaults on a 
guaranteed loan and a commercial lender incurs a loss, FSA 
reimburses the lender for the guaranteed portion of the loss.

                     Beginning farmers and ranchers

    During the 1990s, Congress began to focus the farm loan 
programs to emphasize assisting beginning farmers and ranchers. 
The future of United States agriculture depends on the ability 
of new family farmers and ranchers to enter agriculture. In 
recent decades, farm entry rates have declined; in many States, 
the farmer ``replacement'' rate has fallen below 50 percent. 
There are twice as many farmers over 65 as under 35 years old. 
Traditional methods of farm entry and farm succession need to 
be augmented to meet current challenges. Many of the changes in 
the credit title follow on earlier Congressional efforts and 
maintain the goal of making it possible for more young people 
to begin farming.
    The title authorizes the Secretary to guarantee loans made 
by State beginning farmer and rancher programs, which includes 
loans that use funds resulting from the issuance of tax-exempt 
Aggie bonds. These bonds include a qualified small issue 
agricultural bond for land or property described in Section 
144(a)(12)(B)(ii) of the Internal Revenue Code of 1986. 
Providing a guarantee on these loans in addition to the tax-
exempt status of the bonds would encourage additional funds at 
favorable terms to beginning farmers and ranchers. Under 
current tax law a State-issued bond that receives a guarantee 
from the U.S. government loses its tax-exempt status. Congress 
has granted exceptions to this rule, including allowing the 
tax-exempt bond issuance for student loans to receive a federal 
guarantee. This proposal takes the first step in granting this 
exception by amending the farm lending law to grant the 
Secretary the authority to provide a guarantee to State 
beginning farmer programs. To effectuate this exception, there 
would need to be a corresponding change in the tax code.
    The credit title also improves programs such as the 
beginning farmer down payment program. The number of beginning 
farmers participating in this program has declined over the 
last several years, with 287 participating in 1998, 260 in 
1999, and 142 in 2000. The down payment program for beginning 
farmers is a preferred loan program. It establishes a 
relationship between the beginning farmer and the commercial 
lender, while the beginning farmer shares in the risk of the 
transaction with the down-payment requirement. Statistics show 
that beginning farmers in the down-payment program were 
delinquent 1.6 percent of the time while beginning farmers in 
the joint participation loan program, where both a bank and the 
USDA directly lend to the beginning farmer, were delinquent 6.3 
percent of the time. For these reasons, the Committee 
recommends the changes made to the beginning farmer down 
payment program so more beginning farmers become involved with 
the program.
    The down payment loan program has been an important 
innovation. Nonetheless, it has been utilized more in certain 
regions than others. Because of this, the Committee urges the 
Secretary to establish performance goals for each State with a 
significant volume of real estate loans under subtitle A, with 
a goal of attaining down payment loan volumes consistent with 
section 346(b)(2)(A)(i)(II) within three years of the date of 
enactment of this subsection.
    In another effort to increase beginning farmers' and 
ranchers' access to farm land, the title increases the time 
period in which a beginning farmer or rancher receives a 
preference to purchase inventory farmland from the Secretary 
from 75 days to 135 days and provides that the Secretary can 
combine or divide parcels of inventory property to maximize 
opportunities for beginning farmers and ranchers to acquire 
such properties. The current 75-day time period has constrained 
the actual time period in which the Secretary has offered these 
inventory lands for sale to beginning farmers and ranchers. 
Extending the time to 135 days ensures that beginning farmers 
and ranchers have a reasonable time period in which to obtain 
notice of the sale of these lands and gain financing for their 
purchase. Also, allowing the Secretary to combine or divide 
tracts of farmland provides additional opportunities for 
beginning farmers and ranchers to acquire such property.
    The title also requires the Secretary to consider selling 
easements on inventory land for the purpose of farmland 
preservation. By providing the Secretary the ability to sell 
development rights, she possesses a greater ability to preserve 
farmland that is inventory property and sold for agricultural 
purposes.
    As an example of innovative ways to provide assistance to 
beginning farmers, the Committee directs the Secretary to 
create a pilot program in which the Secretary will guarantee 
loans made by a private seller of a farm or ranch to a 
qualified beginning farmer on a contract land sale basis. The 
Secretary will guarantee up to five loans per State in 10 
geographically dispersed States per year through 2006, after 
she has made a determination that this type of guarantee 
involves comparable risk to current guarantees to commercial 
lenders. Many farms are sold on a contract land sale basis, 
which in effect makes the seller the financier of the loan. 
Current law does notallow the Secretary to guarantee these 
transactions. Because of tax considerations, this option may be 
attractive to those farmers considering selling to a beginning farmer 
or rancher.

                        Native American farmers

    The title recognizes special situations faced by certain 
farmers. For example, the title requires a 95 percent guarantee 
of an operating loan made to a Native American farmer on an 
Indian Reservation and allows the Secretary to waive the seven-
year term limit for direct operating loans made to Native 
American farm operations on tribal lands if she determines that 
commercial credit is not generally available for such 
operations. Because of the special legal status of some tribal 
lands, many creditors lack confidence that they will be able to 
enforce security agreements and, thus, choose not to lend to 
farmers on the tribal land. The result is that many Native 
American farmers find it very difficult or impossible both to 
find commercial credit and continue farming.

                  Limitation on direct operating loans

    The title also provides the Secretary authority to waive 
the term limitation on direct operating loans to allow all 
farmers to obtain loans for two years beyond the current seven-
year limit. This change applies to all farm operations and 
provides the Secretary the ability to waive the term 
limitations on direct operating loans one time per lifetime for 
a borrower for two years. This change recognizes that certain 
borrowers that have viable farm operations may need this 
extension given the low commodity prices of the past few years.

                     Shared appreciation agreements

    In another example of adapting the law to meet changed 
circumstances, the title provides those who owe recapture 
amounts on shared appreciation agreements or those who have 
amortized the recapture amounts, the option of providing 
farmland protection easements on their land in return for 
forgiveness of the recapture amount. Many borrowers who owe 
significant amounts of money under the recapture provisions of 
shared appreciation agreements feel pressed to sell the land to 
meet the obligation. This is especially true in areas where the 
land values have greatly increased because of development 
pressure. This change allows farmers who want to stay on the 
land to exchange the development rights for their farmland for 
a period of 25 years in return for the forgiveness of the 
recapture amount. With this restriction, the Committee does not 
intend to discourage farmers from undertaking processing, 
storage, or value-added activities on the land directly related 
to the crop produced, in which other producers may take a part 
to make the processing, storage, or value-added activity 
economically viable for the landowner. The Secretary may define 
the extent of such activities by regulation.

                        Low documentation loans

    The title also makes using federal farm credit programs 
easier for all types of borrowers. The title raises the low 
documentation loan amount for a farmer program guaranteed loan 
from $50,000 to $100,000. Under current law, the low 
documentation loan program allows commercial lenders to 
streamline the paperwork involved with qualifying for a loan 
guarantee if the loan amount is $50,000 or less. This amount 
has not been increased since 1992. By raising the limit to 
$100,000, many more loans would qualify for this streamlined 
status. In fiscal year 2000, a total of 2,707 qualified for the 
low documentation program; another 3,070 would have qualified 
if the limit had been set at $100,000. Raising the limit to 
$100,000 is not likely to increase the delinquency rates on 
these loans based on historical evidence. In 2000, loans which 
qualified for the low-doc program had a delinquency rate of 4.3 
percent compared to loans between $50,000 and $100,000, which 
had a delinquency rate of 4.1 percent.

                        Interest rate reduction

    In another example of improving upon successful programs, 
the title makes permanent the interest rate reduction program 
and provides that beginning farmers receive an additional one 
percent interest rate subsidy (capped at four percent) over 
non-beginning farmers (capped at three percent) who participate 
in the program. The title also increases the maximum amount of 
funds for this program to $750 million and provides that 25 
percent of the program's subsidized funds are reserved for 
assisting beginning farmers and ranchers until April 1 of each 
fiscal year.

                   Farm Credit Act Lending Authority

    The basic statutory authority for the Farm Credit System 
(FCS) and for Federal Agricultural Mortgage Corporation (Farmer 
Mac) Farmer Mac is the Farm Credit Act of 1971, as amended 
(P.L. 92-181). These two government-sponsored enterprises 
provide credit assistance to agriculture.
    FCS was created by Congress in 1916 as a nationwide 
financial cooperative that lends to agriculture and rural 
America. Overall FCS supplies about 26 percent of the credit 
provided to American farmers and ranchers and about 85 percent 
of the credit provided to agricultural cooperatives. FCS 
comprises six regional Farm Credit Banks and a specialized 
lending bank with a national charter to finance, among other 
things, agricultural cooperatives, rural utility systems, and 
other rural businesses. Another key element of FCS is the 
Federal Farm Credit Banks Funding Corporation, which obtains 
funds for FCS to lend through the sale of bonds and notes in 
the nation's capital markets. Unlike commercial banks, FCS 
banks and associations do not take deposits. The debt 
securities of FCS are the joint and several liability of all 
the FCS banks. In addition, the Farm Credit System Insurance 
Corporation, which was established in 1988, insures the timely 
payment of principal and interest on FCS debt securities.
    Farmer Mac was created by the Agricultural Credit Act of 
1987 to promote the development of a secondary market for 
agricultural real estate and rural housing loans. Farmer Mac 
does this primarily by purchasing qualified loans from lenders, 
thereby replenishing their source of funds to make new loans.
    The Farm Credit Administration (FCA) is the independent 
federal regulator responsible for examining and ensuring the 
safety and soundness of FCS. FCA also regulates and examines 
Farmer Mac.
    Current law, adopted in 1992, authorizes Farm Credit System 
lenders to purchase interests in certain loans made by non-Farm 
Credit System lenders to customers who are not otherwise 
directly eligible to borrow from the System. This authority was 
provided to enable System institutions to better manage the 
risk in their narrowly focused portfolios. The authority has 
theadded benefits of providing an additional source of capital 
for certain businesses and fostering partnerships between commercial 
and System lenders.
    These multi-lender transactions involve mostly larger 
customers (i.e., businesses with credit needs large enough that 
multiple lenders are needed to spread the risk among financial 
institutions). Such loans are originated by commercial lenders 
and then syndicated or sold to groups of lenders. For System 
institutions to participate in these transactions, the loans 
must involve businesses that are similar to the businesses 
directly eligible to borrow from the System. In addition 
current law provides limits on the volume of such loans the 
System can hold (no more than 15 percent of an institution's 
assets) and the percentage of the total financing package that 
is made available to any one borrower (the combined total 
financing from all System participating lenders must be less 
than one-half of the total financing package). These 
limitations ensure that commercial lenders continue to play the 
predominant role in financing businesses not directly eligible 
to borrow from the System.
    Recognizing the growing sophistication of the secondary 
market for agricultural loans, this title would increase the 
number of Farmer MAC Board of Directors from 15 to 17 so as to 
include two additional management directors. It also would 
provide that the Board of Directors elect its chairperson. 
These changes would bring the Farmer MAC Board of Directors 
organization in line with other government-sponsored 
enterprises such as Fannie Mae, Freddie Mac and Sallie Mae. 
These changes would also recognize the sophistication and 
complexity of managing the risks associated with the 
functioning of a secondary market for agricultural loans and 
the need for operational expertise on the Farmer Mac Board

                      TITLE VI--RURAL DEVELOPMENT

    About 55 million people reside in Rural America, almost a 
fifth of the nation's population. And, in 1997, rural areas 
lagged behind urban areas by about $9,000 in real per capita 
income. Earnings per job shows an even larger discrepancy: 
$35,151 in urban areas compared to $23,619 in rural areas (in 
1998 dollars). The Rural Poverty rate, 14.3 percent, is higher 
than urban poverty, 11.2 percent (for 1999). A significant 
number of counties, particularly in the upper Midwest, have 
seen declining populations decade after decade, some for over a 
century.
    Costs for a wide variety of infrastructure per person in 
rural areas are higher. That is true for transportation, sewer 
systems, drinking water, electricity, telephone service, and 
now broadband communications. The rural economic infrastructure 
is also in many ways at a disadvantage compared to urban areas. 
That may not be true for some routine financing of common 
activities, but it is clearly the case for larger less common 
business enterprises, and it is most clearly true regarding 
equity financing, which is so important for business growth at 
the beginning of the 21st Century.
    The Federal Government has played a crucial role in rural 
economic development from the nation's early days with the 
development of canals, railroads and 1862 Homestead Act. Land 
Distribution and transportation infrastructure defined rural 
policy to the beginning of the 20th Century. In the 1930s, the 
Congress established programs within the Department of 
Agriculture for the electrification of rural America, and the 
first loans for homes and businesses.
    A large number of agencies of the federal government have 
some programs which focus on rural economic development. But, 
since the 1972 Rural Development Act, USDA has been the lead 
agency for coordinating federal programs that target rural 
areas. USDA programs have focused on a number of crucial areas. 
Grants and loans for infrastructure development for 
electricity, telephones, sewer and drinking water systems, and 
most recently, support for bringing broadband access to rural 
areas, have been crucial for creating the backbone that allows 
businesses to exist and grow, as well as providing for an 
improved quality of life for rural Americans.

                            Equity programs

    It has become apparent in recent years that one of the 
major factors limiting economic growth is the lack of equity 
capital in rural America. The reasons are many. But, some 
relate to distance from those with equity expertise and 
resources to invest. And, some relate to the relative 
expectation of profit that can be expected. For many 
manufacturing, particularly value added manufacturing through 
cooperative ventures, the level of profit is not considered to 
be competitive to the profit potential expected in the private 
equity markets. To overcome those difficulties, the Rural 
Development title has included two significant equity 
mechanisms that could spark considerable economic development.
    The first is Section 601, establishing the National Rural 
Cooperative and Business Equity Fund. This proposal was 
introduced in an earlier form by Senators Harkin and Craig in 
the 106th Congress and reintroduced as part of a larger measure 
by Senator Daschle as a part of S. 20 at the beginning of this 
Congress. The measure has enjoyed broad support within the 
rural financial community, including both banking and farm 
credit system organizations.
    It authorizes the appropriation of $150 million in funds to 
be matched by at least an equal amount contributed by private 
investors. USDA will guarantee 50 percent of each investment 
made by a private investor, with a maximum total guarantee of 
$300 million in private investments in the Fund. Debentures 
issued by the fund and guaranteed by USDA shall not exceed $500 
million. The Fund will make equity and semi-equity investments 
in rural businesses. Investments in retail businesses will not 
be allowed. The fund will be managed by a 14 member board, 
three appointed by the Secretary and 11 from the investors. The 
goal is to have a board that operates in a way that has a 
strong goal of increasing economic development in rural areas. 
But, it will also be motivated by profit. The Board is expected 
to hire a staff that fully meets the standards in quality and 
quantity that is expected in the private equity investment 
industry.
    There is a limitation on the investment in a single 
investment of no more than the greater of 7 percent of the 
funds capital or $2 million. The expectation is that all of the 
investments would be far smaller than 7 percent of the fund if 
the fund is of a magnitude near its authorized size. The 
measure allows the Secretary to waive these limits in cases 
where additional funds may be necessary to preserve an existing 
investment. The expectation is that the Secretary would only 
grant this authority in very limited circumstances where the 
need is clear and the expectation thatthe additional funding is 
reasonably likely to result in a successful recovery. It is expected 
that many of the investments will be in cooperative enterprises, 
important to rural America although those investments often have a 
lower rate of return. It is not expected that the fund will be engaged 
in traditional loan activities, but there are occasions when equity 
providing funds provide nonequity assistance. Section 383(a)(B)(ii) is 
designed to place an absolute limit in that area.
    Section 602 creates the Rural Business Investment Program 
which is designed on the Small Business Investment Company 
(SBIC) model. Unfortunately, SBICs have not provided the degree 
of equity investment in rural America desired. The Committee 
has provided several incentives beyond those provided for SBICs 
to attract capital to Rural Business Investment Companies 
(RBIC). These include grants to RBICs to be used to assist 
entities that they invest in, and an increase in the ability of 
the Secretary to provide guarantees on up to 300 percent of an 
entities capital, as opposed to 200 percent. However, the 
expectation is that guarantees will only be made to that level 
when there is comfort with the quality of the RBIC. RBICs are 
designed to provide equity type investments to rural small 
businesses and are not intended to directly compete with 
conventional rural lenders. As a result, the Secretary shall 
prohibit an RBIC from making a loan to an eligible entity 
unless one or more banks have declined the entity for a loan.
    Since the Small Business Administration has considerable 
experience with equity firms receiving government support, it 
is in the Government's expertise to fully use that resource. 
The Secretary is expected to maintain policy controls, within 
the intent of the law, regarding both equity provisions; but 
the expectation is that the professional staff of the SBA will 
make judgements where delegated and otherwise provide 
recommendations in regard to financial issues.

                             Other programs

    Section 603 provides the resources necessary to allow USDA 
to fund the backlog of community facility, sewer, drinking 
water and certain other loan and grant applications. The 
provision requires that the funds in the FY 02 Agriculture, 
Rural Development, FDA and Related Agencies Appropriations 
measure are first used. For too long, large number of important 
projects important to rural America have languished, unfunded. 
This provision will allow the Department to remove this 
backlog. However, this section requires that the Secretary 
follow the rules that are in effect on the date of this 
measure's enactment. Projects that do not meet the requirements 
of those regulations will not receive support.
    Section 604 establishes a Rural Endowment Program. A large 
number of Rural communities lack the resources that are 
necessary to attract business to provide good jobs and 
necessary facilities to allow for a good quality of life for 
the area's citizens.
    The Rural Endowment Act provides grants for the development 
of comprehensive plans for what a rural area may need to help 
it achieve economic growth. The strategy would provide a road 
map for loans or investments. In those cases where an 
organization, governmental or non-profit has developed a 
comprehensive community development strategy of considerable 
quality that is likely to result in a significant improvement 
in the area's ability to improve its economy and community 
development, the Secretary should carefully consider providing 
funds for an endowment. Endowments of up to $6 million, matched 
with local funds are to be invested. And over a period of 10 
years, the endowment will be used to accomplish the 
comprehensive plan. Funds may be used to finance affordable 
housing, infrastructure, and community facilities and economic 
development projects. It is the Committee's hope that a number 
of excellent successful plans will have a major effect on the 
areas involved and will be models for future efforts using non-
categorical funding. It is expected that the Secretary shall 
award all of the endowment funds to specific applicants in 
fiscal year 2003. An additional authorization is provided for 
fiscal years 2004 through 2006 if the Congress determines that 
the initial experience demonstrates that this is an effective 
model for economic development and the resources are available.
    Section 605 provides for $100 million per year in 
assistance for broadband access. Just like the availability of 
electricity was crucial for rural areas in the last century, 
the availability of broadband is necessary for economic 
development in this century. Funds may be made available for 
communities of less than 20,000 people. But, the expectation is 
that resources are most needed for communities that are far 
smaller, perhaps those smaller than 2,500 people. These funds 
can be in the form of grants. But, the Secretary may convert a 
portion of these resources into loans, which is expected to be 
logical in many cases. It is expected that many projects will 
receive both grants and loans, which is the pattern for a 
number of Rural Utilities Service (RUS) programs. It is the 
expectation of the committee that the RUS will give the highest 
priority for grant and loan applications for areas that do not 
have any broadband service. Clearly, unlike RUS water, sewer 
and electric programs, not every eligible user is expected to 
actually acquire broadband service. But, the availability of 
this service is crucial for both economic development and to 
provide a service that a growing number of Americans are 
starting to view as essential. The Secretary is required to 
periodically review and when necessary change the definition of 
broadband service. The Committee expects the Administrator will 
apply a flexible definition of broadband services to encourage 
new broader bandwidth technologies that provide significant 
progress towards higher bandwidth services in rural areas and 
that the program will foster the development of a variety of 
technological applications including terrestrial and satellite 
wireless services. This is a critical function since this is a 
rapidly changing technology. The Committee has taken no 
position on particular technologies and believes that the it is 
very important for the Department not to chose among adequate 
technologies. The Committee expects the Secretary to 
participate in any FCC proceedings or Department of Commerce 
study of the future of broadband services and the markets for 
such services.
    Section 606 provides funding for Value Added Product 
Development Grants. These were first funded in the Agricultural 
Risk Protection Act of 2000 and have proven to be an excellent 
mechanism to assist agricultural producer based groups acquire 
crucial resources so they can successfully develop value added 
enterprises that help producer income and rural development 
generally.
    The Committee defines the term ``value-added agricultural 
product'' to mean any agricultural commodity or product that 
has: (1) undergone a change in physical state; (2) been 
produced in a manner that enhances the value of the 
agricultural commodity or the product, as demonstrated through 
a business plan that shows enhanced value; (3) as a result of 
the change in physical stateor the manner in which the 
agricultural commodity or product was produced, the customer base for 
the product has been expanded; and, (4) a greater portion of the 
revenue derived from the processing of the agricultural commodity or 
product is available to the producer of the commodity or product. The 
Committee intends for USDA to fund value-added marketing and labeling 
projects in instances where the product is produced in a manner that 
enhances its value to the consumer or end user, provided there is an 
adequate business plan.
    The Committee notes that the Value-Added Grant Program has 
demonstrated success towards ensuring that agricultural 
producers retain a higher dollar value for agricultural 
products. While ``value-added'' agriculture is often identified 
with a processed commodity, producers are finding new 
opportunities and higher values for products that do not 
initially change the physical state of the crop. For example, 
identity preserved grains are ineligible under the original 
program. However, growers are producing commodities with 
inherent characteristics that have increased value to end-users 
and which can increase the portion of the value received by the 
producer. Once the value is identified, producers expend 
resources to meet the need. At this point the crop has 
increased value in the marketplace. The program should seek to 
fund sound business plans that will match producers with 
processors/end users for products or commodities in this type 
of value-added circumstance.
    Five purposes for this section are included: (1) to 
increase the share of the food and agricultural system profit 
received by agricultural producers; (2) to increase the number 
and quality of rural self-employment opportunities in 
agriculture and agriculturally-related businesses; (3) to help 
maintain a diversity of size in farms and ranches by 
stabilizing the number of small and mid-sized farms; (4) to 
increase the diversity of food and other agricultural products 
available to consumers, including nontraditional crops and 
products and products grown or raised in a manner that enhances 
the value of the products to the public; (5) to conserve and 
enhance the quality of land, water, and energy resources, 
wildlife habitat, and other landscape values and amenities in 
rural areas. It is the intent of the Committee that USDA 
operate the program in a manner consistent with these purposes. 
The ability of a proposal to meet the purposes of the program 
should be very significant factors in the awarding of grants 
including the number and degree of the purposes met.
    Grants recipients are independent eligible producers (as 
determined by the Secretary) and non-profit organizations. 
Producers shall use the grant to: (1) develop a business plan 
or perform a feasibility study for viable marketing 
opportunities for the value develop strategies that are 
intended to create marketing opportunities for the producer or 
to create a marketing opportunity for the producer. Non-profit 
organizations shall use the grant to: (1) assist the entity to 
develop a business plan for viable marketing opportunities in 
emerging markets for a value-added agricultural product; and 
(2) to develop strategies that are intended to create marketing 
opportunities in emerging markets for the value-added 
agricultural product. It is the intent of the Committee that 
nonprofit organizations shall also receive grants to assist in 
the formation of value-added ventures and alliances that will 
broaden the market for producers.
    A five percent setaside of the grant funds is made for 
certified organic products that expand the customer base of the 
product and increases the portion of product revenue available 
to producers. If there are insufficient appropriate grants 
received under this subsection, the Secretary may release the 
funds for other value added grants after March 31 of the fiscal 
year except that the Secretary should act to provide reasonable 
opportunity for applicants under this section to benefit in 
fiscal year 2002.
    Section 621 enlarges the annual authorization of the 
crucial rural water and wastewater program within the Rural 
Utilities Service. It also provides authorization for the 
establishment of revolving loan funds for the financing of 
small water and wastewater projects through non-profit 
organizations. The selected organizations may make grants and 
loans of up to $100,000 for predevelopment costs for potential 
projects, replacement equipment, small scale extension projects 
and other projects that are not part of the regular operation 
and maintenance activities of existing systems. It is the 
Committee's intent that these funds not be used to provide 
grants that are in addition to other USDA financial support for 
the same project.
    Section 625 Certified Organizations Sharing Expertise is a 
new program through which non-profit organizations with 
experience in specific areas of economic or community 
development may apply to be placed on lists of such 
organizations certified by USDA. The expectation is that such 
organizations will be listed at the State level, except for 
organizations involving specialized expertise in narrow 
categories where the certification may more logically occur at 
the national level. Such organizations may be able to share 
their expertise significantly reducing the costs to rural 
communities and organizations. Funds may be appropriated to 
provide additional resources for organizations willing to help 
those beyond their normal boundary of activity.
    Section 626 provides that the Rural Utilities Service may 
provide financial assistance for projects that receive support 
through tax exempt bonds. The Committee believes that this 
ability would be useful. However, for the section to be in 
used, a companion change will need to be made in the tax code.
    Section 627 provides for a new program to provide training 
for firefighters and emergency personnel in rural areas. While 
the FEMA FIRE program is providing increased assistance for 
firefighters, only a small portion of those funds go to 
training, which is so crucial to the safety of firefighters and 
emergency personnel and to their ability to protect people and 
property. In many cases, those in rural areas are volunteers in 
small departments with very limited resources for training. At 
least 60 percent of the funds are to be devoted to partial 
scholarships for training at approved centers. The expectation 
is that the Department will certify those centers whenever 
logical by following the certification of approved 
organizations or those that have received funding in the past 
from FEMA or other federal agencies for training purposes. The 
Committee believes that travel costs should be minimized with 
the understanding that some areas are more remote than others, 
and a higher cost of travel from a more remote area should not 
be a detriment for funding. However, the use of more localized 
centers of good quality rather than training at distant centers 
should be promoted. Up to 40 percent of the funds provided may 
be allocated for the direct support of State or regional 
training centers, with no center receiving more than $2 million 
in a year.
    Section 633 provides a number of changes in the Business 
and Industry loan and loan guarantee program. It is the 
Committee's desire to maximize the use of guaranteed loans 
under this program with a recognition that care must be taken 
to minimize losses. As losses increase, the amount of loans 
that can be guaranteed with each dollar of budget authority 
will decline. The Committee has provided for a considerable 
expansion of loan guarantees for cooperatives and for producers 
needing assistance to buy stock in cooperatives. These 
provisions will provide increased support for agricultural 
producers to own processing and other facilities that will 
enable them to acquire increased income through the value being 
added to their production and at the same time creating an 
incentive for facilities to be in rural areas where they will 
provide additional jobs and other benefits to the rural economy 
as a whole.
    Reports have reached the Committee that USDA has received 
some appraisals under the program that considerably overvalued 
property to the program's detriment. The bill provides that the 
Department shall acquire appraisals from those who are properly 
qualified to make appraisals regarding the property in 
question. The Committee also has placed a cap on the initial 
fee applied to a loan guarantee principal at the current rate 
of 2 percent. Reluctantly, no prohibition is set on annual fees 
that may be assessed because of the understanding that the 
program level per dollar of budget authority of the program 
would be seriously eroded in the future with such a 
prohibition.
    Section 636 provides for the simplification of a number of 
applications and loan guarantee applications. The Department 
needs to acquire information so that sound decisions can be 
made regarding requested financial assistance. But it is 
essential that the Department work to minimize the paperwork 
burdens on applicants for Rural Development assistance within 
that constraint. The Department is urged to make an analysis of 
its application and other forms to see what can be done to 
further reduce the paperwork burden.
    Section 638 establishes a microenterprise program designed 
to provide the skills that are necessary for individuals to 
start, and in a healthy percentage of cases, succeed at 
starting small businesses important to the individuals involved 
and the rural economy as a whole. It is expected that low- and 
moderate-income individuals will be the main recipients to the 
skills, training and access to capital and credit as well as 
continuing assistance as individuals begin operating their 
small businesses. The expectation is that the Department will 
focus the resources at those organizations and those models 
that have had a high level of success in related government 
programs.
    Section 639 establishes an interagency coordinating 
committee to examine the special problems of rural seniors 
chaired by the Undersecretary for Rural Development. While USDA 
has been the lead agency in government regarding rural economic 
development, programs of importance to rural elderly 
individuals is highly fractured among the departments and 
agencies of the federal government. It is believed that has 
resulted in both considerable inefficiencies and in needs not 
being met. Substantive. Recommendations from the interagency 
task force is expected.
    $25 million is authorized for grants to nonprofit 
organizations including cooperatives for projects of special 
merit that will particularly benefit senior citizens in rural 
areas. The grants under this section may equal up to 20 percent 
of a project's cost in addition to assistance that may be 
available through other federal programs. The intention that a 
high priority will be given to projects that will result in 
examples that may be widely duplicated.
    The section also provides for a reserve within the 
community facility program of not less than 12.5 percent of the 
resources in that program for appropriate projects that meet 
the standards of the program that are for senior citizens or 
mainly benefit them. The Department must maintain this reserve 
through April 1 of each fiscal year.
    Section 640 establishes a reserve within the community 
facility program of not less than 10 percent of the programs 
resources for developing and constructing day care facilities. 
The lack of adequate day care is very significant in most rural 
areas. This prevents many parents from working or leaves their 
children with inadequate care during those periods. Experiences 
in recent years have shown that relatively small sums from the 
community facilities program can be significantly leveraged to 
have a far greater effect per government dollar provided. And, 
the Department is directed to maximize efforts to acquire 
significant leverage to maximize the use of funds.
    Section 641 provides for an authorization to establish 
rural telework centers where those in rural areas will be able 
to continue to live in small communities while working for 
companies whose offices are distant. Many rural institutions, 
from community colleges to some area chambers of commerce, 
could organize such centers. While many talk about teleworking 
from home, there is considerable material that suggests that a 
formal office setting with the resources that can be made 
available at such locations may prove an important alternative. 
A rural telework institute is also authorized. The institute 
will provide as a center for assisting telework centers and 
those who are developing such centers in best practices, 
estimations of costs as well as working to develop new methods 
to best use the structure of telework centers. The center may 
be a consortia of organizations, probably with strong 
educational ties.
    Section 646 authorizes SEARCH grants through which State 
developed councils shall provide grants to small rural 
communities with populations of less than 2500 which face 
significant difficulties meeting environmental requirements. 
Clearly, a large number of communities do have such 
difficulties. It is expected that States will give a priority 
to projects that USDA connected projects and to those where the 
solutions found may be of use to a number of communities in the 
State and the nation.
    Section 647 Authorizes the Great Plaines Regional Authority 
in the State of North Dakota, South Dakota, Nebraska, Minnesota 
and Iowa. The Authority shall develop a series of comprehensive 
an coordinated plans for the economic development of the 
region.
    The authority is also authorized to receive appropriations 
for the purpose of making grants particularly to those counties 
which are distressed with a special emphasis on transportation, 
telecommunications, and basic infrastructure such as sewer and 
water facilities. The Committee recognizes the ongoing rural 
development efforts that have evolved from the recommendations 
of the Northern Great Plains Rural Development Commission. The 
Commission was establishedin 1994 through the passage of P.L. 
103-318 to prepare a 10 year rural development strategy for the 
Northern Great Plains Region. The Committee supports the efforts of the 
Northern Great Plains, Inc to implement the Commission's 
recommendations and urges the Department with this organization to 
continue to advance the findings of the Commission. However, further 
efforts must be made to assure that staff resources of that 
organization are allocated in a balanced manner to the benefit of all 
parts of the region.
    Section 652 Telemedicine and Distance Learning. This 
section extends the authorization of the very effective 
Telemedicine and Distance Learning Services in Rural Areas 
program through fiscal year 2006. The Committee directs that 
public television entities are eligible to receive assistance 
under this section for high speed telecommunication services in 
rural areas to provide educational programming for schools and 
communities in rural areas.
    Section 662 authorizes a revised program to fund the Rural 
Economic Loan and Grant program that was first enacted in 1987 
and which has provided approximately $185 million in economic 
development assistance to rural communities. The funding will 
occur through the payment of an annual 30 basis point fee by 
private lenders that issue bonds or notes guaranteed by the 
Administrator of RUS. These fees are placed in a sub-account 
for the purpose of providing the budget authority for eligible 
economic development projects through intermediaries. The 
provision provides for safety and soundness and permits the 
Administrator of RUS to deny the request of a lender for a 
guarantee if the lender does not have the expertise to or 
experience in rural utility lending or issues bonds that 
without the guarantee would not be financially sound and of 
investment grade quality. As used in this section, the term 
``project'' means any electrification or telephone purpose 
eligible for assistance under the Rural Electrification Act, 
including any purpose specified in section 4 and section 201. 
This provision requires that a private lender make payment on 
the bonds or notes even if a loan made using the proceeds of 
such bond or note is not repaid to the lender. This effectively 
places the lender between the RUS and the borrower minimizing 
the risk to the government.
    Bonds and notes may not be used for electric generation or 
to finance electric generation projects. The proceeds of the 
bonds are to be used to provide private capital for rural 
electric and telephone purposes that would otherwise qualify 
for direct loans under the Rural Electrification Act and to 
refinance bonds or notes used for such purposes. The amount of 
bonds or notes that may be guaranteed for a lender may not 
exceed the amount of outstanding loans of the lender that were 
made concurrently with loans approved under the Rural 
Electrification Act. Up to one-third of the fees collected may 
be used for the cost of providing the guarantee although it is 
expected to be far less than that portion of the fees charged.

                          TITLE VII--RESEARCH


                                Overview

    Food and agriculture research is the backbone upon which 
the vitality of our rural communities depends, the security of 
our food supply rests, and the health of our environment is 
protected. The challenges in food and agriculture related 
research are great. The world today is a challenging place to 
attain these objectives. The world's population continues to 
grow rapidly, placing a strain on a whole range of resources, 
from food and water, to energy, to green spaces and our natural 
environment. Farmers and ranchers are being asked to produce 
more, yet they are also seeking to protect and restore land, 
water, air and wildlife resources. American agriculture faces 
an increasingly competitive international marketplace. 
Biotechnology is presenting challenges that we are just 
beginning to understand and address. If these challenges are 
ignored today, they will cost much more to address in the 
future.
    The U.S. agricultural research program has evolved over the 
past 150 years into a $2.1 billion collection of programs. 
While most organizations agree that investment in food and 
agricultural research should be a high priority for public 
funding, this agreement has rarely been translated into 
meaningful increases in funding. Federal spending on 
agricultural research, extension and education has been flat 
the past several decades. Federally funded research is 
allocated among intramural (or Agricultural Research Service) 
funds, formula funds to universities, competitive grants, and 
special grants.

                               Background

    The Secretary of Agriculture coordinates USDA research, 
education, and extension. Federal funds are distributed to four 
agencies under the direction of the Under Secretary for 
Research, Extension and Economics: the Cooperative State 
Research, Education, and Extension Service (CSREES), the 
Agricultural Research Service (ARS), the Economic Research 
Service (ERS), and the National Agricultural Statistics Service 
(NASS). Of the approximately $2.1 billion in federal money 
spent in fiscal 2001 on agricultural research, education, and 
extension programs, about 46 percent is spent on State-level 
formula programs and competitive grant programs through CSREES, 
43 percent is spent on in-house research programs conducted by 
the ARS, three percent is directed to economic research 
conducted in-house by ERS, five percent is spent on statistical 
services conducted by the NASS, and three percent is used for 
buildings and facilities.
    Congress identified agricultural research as an important 
issue in the 1850's. Starting in the 1860's, Congress passed a 
series of bills designed to promote agricultural development: 
the Morrill Act of 1862, the Second Morrill Act of 1890, the 
Hatch Act of 1887, and the Smith-Lever Act of 1914. Together, 
these acts established our land-grant system.
    The land-grant philosophy has been the foundation of 
America's agricultural productivity for over 130 years. The 
three cornerstones of the land-grant approach--teaching, 
research, and extension--have improved the economic well being 
and quality of life for millions of Americans.
    Congress passed the First Morrill Act in 1862, which 
authorized the establishment of a land-grant institution in 
each State to educate citizens in agriculture, home economics, 
mechanical arts, and other practical professions. Under this 
Act, each State was given public lands, provided that the lands 
be sold or used for profit, and the proceeds used to establish 
at least one agricultural college (land grants for the 
establishment of colleges of agriculture, home economics, and 
mechanical arts were also later given to U.S. territories and 
the District ofColumbia). Public universities existed already 
in some States; however, most States responded to the First Morrill Act 
by legislating new colleges rather than endowing existing State 
institutions. The act gave rise to a network of often poorly financed 
colleges known as ``1862's.''
    The Second Morrill Act passed in 1890, however, provided 
for an annual appropriation to each State to support its land 
grant college. In addition to providing funds for education at 
land grant colleges, the act of 1890 specifically forbade 
racial discrimination in admissions. A State could escape the 
discrimination clause only if separate institutions were 
maintained and the funds divided in a ``just'' manner. Thus, 
the Second Morrill Act led to the establishment of a group of 
historically African-American land grant institutions (1890s). 
Today, there are 19 1890s (including Tuskegee University and 
West Virginia State College) located mostly in southern States.
    Over the decades, as the U.S. economy grew and changed, so 
did the nature and demands for education and scientific 
pursuit. As more and more U.S. citizens began to attend 
college, most colleges of agriculture were transformed into 
full-fledged universities. Today, although many land grant 
universities are still known for their agricultural college 
roots, others have little agricultural identity and students 
are rarely from farm families. Currently, in addition to the 59 
1862's and 19 1890's, there are 15 non-land-grant colleges that 
obtain USDA funds primarily through forestry and natural 
resource programs authorized under the McIntire-Stennis Act, 
and 30 tribal colleges which were afforded land grant college 
status under the Elementary and Secondary Education Re-
authorization Act of 1994.
    The 1862 Morrill Act gave land grant colleges their mandate 
to teach. In 1887, recognizing the need for research in the 
agricultural sciences, Congress passed the Hatch Act to provide 
money to each State for the purpose of establishing, within the 
land-grant college, an agricultural experiment station.
    Today, State Agricultural Experiment Stations (SAES's) 
operate in conjunction with and, in almost all cases, on 
locations at colleges of agriculture. Most faculty at land 
grant colleges of agriculture have SAES appointments. This 
grants them access to Hatch research funds administered by 
USDA's CSREES and distributed to the SAES's on a formula basis.
    In 1914, extension joined teaching and research as the 
third major mission when Congress passed the Smith-Lever Act. 
Under this act, a Cooperative Extension Service was created to 
aid in disseminating to the public useful and practical 
information about subjects relating to agriculture and home 
economics and to encourage its application. Under the authority 
of this act, the land-grant colleges and USDA were to cooperate 
in extension work, which was to consist of instruction and 
practical demonstration in agriculture and home economics to 
persons not attending the land-grant college. Information was 
to be supplied through field demonstration. Agricultural 
extension was designed at the outset to be a cooperative 
program. As a result, funding for these programs has been a 
joint venture between the Federal Government, State and local 
governments, and the land-grant universities. While there is 
certainly variation among individual States, funding is roughly 
one-third from each of the Federal, State and local 
governments.
    Under the authority of the Smith-Lever Act, there are three 
Federal funding mechanisms. Section 3(b) of the Smith-Lever Act 
provides that each State and the Federal Extension Service 
shall be entitled to receive annually a sum of money based on a 
formula that takes into consideration the rural population of 
each State; Section 3(c) provides funding to seven results-
oriented base programs; and Section 3(d) are national 
initiatives, intended to be established for limited time
    The Secretary of Agriculture established the ARS in 1953 
under the authority of the Reorganization Act of 1949. Pursuant 
to the Agricultural Reorganization Act of 1994, ARS includes 
functions previously performed by the Human Nutrition 
Information Service and the National Agricultural Library. ARS 
is USDA's in-house research agency, and as such, conducts basic 
and applied research in the fields of animal sciences, plant 
sciences, entomology, soil and water conservation, agricultural 
engineering, utilization and development, human nutrition and 
consumer use, marketing, development of integrated farming 
systems, and development of methods to eradicate narcotic-
producing plants.
    The National Agricultural Research, Extension, and Teaching 
Policy Act of 1977 amended the research act of 1965 to 
authorize a Competitive Research Grant Program. This program 
was further modified in the 1990 Farm Bill in order to create a 
National Research Initiative (NRI), which was first proposed by 
the National Academy of Sciences. The NRI is currently 
authorized at $500 million per year. While the NRI has received 
enthusiastic support from the research community, funding has 
averaged approximately $100 million/year.
    The National Agricultural Research, Extension, and 
Education Reform Act of 1998 established peer and merit review 
requirements for USDA funded research and extension projects, 
and requirements for integrated and multi-State research. This 
Act also required institutions receiving formula funds from 
USDA to prepare annually a Plan of Work insuring adequate input 
from stakeholder organizations for current and future research 
and extension programs. The Committee has found that 
implementation of the stakeholder input provisions has been 
mixed throughout the country. This Act requires the Secretary 
to establish minimum standards to ensure transparency and 
openness in the priority-setting process.
    The Agricultural Research, Education and Extension Reform 
Act of 1998 also established a research program using mandatory 
funding: the Initiative for Future Agriculture and Food Systems 
(IFAFS) to award competitive grants integrating research, 
education and extension in emerging issues of national scope in 
agriculture.

                            Purpose and Need

    The Committee recognizes that central purposes of this Act 
include ensuring the security and vitality of the nation's 
agricultural and rural communities. As has been previously 
noted, research plays an essential, but often unappreciated, 
role in accomplishing this. The fact that resources devoted to 
agricultural research have been insufficient to keep pace with 
the increasing needs of farms and rural communities has been of 
great concern to the Committee. In this Act, therefore, the 
Committee takes a variety of actions to bolster the nation's 
agricultural research capacity.
    The Committee recognizes that it has been given the 
authority to allocate Federal funds to address the needs of 
farmers, ranchers, and their communities. While it is true, 
that a majority of the economic assistance required by farmers, 
ranchers, and their communities is provided in the form of 
economic and income assistance, the Committee also finds that 
unmet agricultural research needs are a significant roadblock 
to improving farm and rural communities.
    A far larger portion of the U.S. agricultural research 
expenditures today comes from the private sector than in past 
decades. This reflects the private sector's recognition of the 
importance of research and development to ensure the 
productivity, efficiency, and ultimately, profitability of food 
and agriculture industries, and therefore they have stepped in 
to fill the gap left by decades of essentially level federal 
funding.

           Initiative for Future Agriculture and Food Systems

    However, this private sector funding is mostly targeted 
toward a relatively limited set of goals leaving the needs of 
many other areas of the agricultural and rural sector 
unaddressed. The Committee finds that the only way to meet 
these unfulfilled needs is through devoting a portion of the 
funds allocated to the Committee for this legislation to 
research programs. This bill therefore reauthorizes the 
Initiative for Future Agriculture and Food Systems through 2006 
and increases its level of funding to $145 million a year.

                         Rural policy research

    The Committee finds that there are many unmet research 
needs related to the special needs of rural communities. It 
therefore provides $15 million annually in funding for a 
competitive grants program focused on rural policy research. 
This program will provide research grants for rural policy 
research on topics such as: rural sociology; effects of 
demographic change; needs of groups of rural citizens; rural 
community development; rural infrastructure; rural business 
development; rural education and extension programs; and rural 
health issues.

                     Beginning farmers and ranchers

    The Committee recognizes that the changing nature of 
agriculture has created a great need for beginning farmers and 
ranchers to be able to utilize a wide-range of tools such as 
risk management, precision farming, crop protection, and 
business planning. It therefore provides $15 million annually 
in funding for a competitive grants program focused on helping 
beginning farmers and ranchers with the knowledge they need to 
succeed.
    The Committee is concerned that the increasing 
privatization of agricultural research means that valuable 
public expertise is being lost in fields such as biotechnology 
and agricultural genomics. The Committee is also concerned that 
increasingly, more and more of the animal and plant genome may 
no longer be public domain which presents serious issues for 
food security--both domestically and worldwide. The Committee 
expects USDA to heighten its reviews of technology transfer and 
funding for agricultural biotechnology to ensure that public 
funding is sufficient to maintain public availability of animal 
and plant genomics, and that public funding does not lead to 
concentration of animal and plant genomics in private sector 
entities.
    The Committee recognizes that the end of the cold war, 
along with recent tragic terrorist attacks, have focused 
national attention on U.S. vulnerability to biological and 
chemical terrorism. Agriculture is widely considered to be a 
vulnerable target for bioterrorism, also called agroterrorism. 
Production of food and fiber accounts for approximately 13 
percent of the gross domestic product and the employment of 24 
million Americans. In 1997, the food and agriculture industry 
generated over $1 trillion worth of business from its two 
million farms according to Iowa State University.
    A large scale biological attack on our food supply could 
imperil our food supply and cause tens or hundreds of billions 
of dollars in economic losses that would devastate our economy 
and rural America. The Committee has therefore included in this 
title several new authorizations to bolster the Federal 
government's biosecurity planning and response capabilities and 
response. The Committee expects the Department to utilize these 
authorizations to ensure that U.S. food safety and animal 
systems are prepared to address threats to our food and 
agriculture systems from acts of terrorism.
    The Committee strongly supports the enhanced and expanded 
use of programs called for in the Conservation Title of the 
bill to improve water quality in the Great Lakes system. To 
support this effort, the committee believes that wider use of 
advanced information, geo-spatial and decision support 
technologies is needed and will improve both the cost-
effectiveness and positive impact of these conservation 
programs on Great Lakes water quality. The Committee therefore 
encourages the Secretary of Agriculture to initiate an 
integrated study that will: (1) assess the impact and efficacy 
of current and pending USDA conservation programs on the Great 
Lakes; (2) determine how advanced information technologies will 
promote more efficient management and use of these conservation 
and resource programs as tools for improving water quality in 
the Great Lakes and; (3) make specific recommendations 
concerning the design and deployment of an integrated 
information technology tool that will maximize the impact of 
conservation programs in the Great Lakes region.
    The Committee has noted the increasing significance of the 
organic sector of agricultural production. While organic 
production only accounts for about one percent of overall food 
production, it represents a very significant contribution to 
value-added and sustainable agriculture. The Committee expects 
the Department to increase its efforts to promote organic 
agriculture and ensure that it receives resources proportional 
to its contribution to agriculture nationally. Specific actions 
the Committee expects USDA to undertake are to increase the 
resources available for organic on-farm research and 
development through the Initiative for Future Agriculture and 
Food Systems, the Federal agricultural laboratories, and 
Federal organic research programs.
    The Committee is concerned about efforts to provide the 
Secretary with additional authority to determine, at the 
request of State, local or tribal authorities, whether certain 
methyl bromide treatments should be authorized. The Committee 
believes that existing authority provides adequate means to 
prevent the introduction, establishment or spread of plant 
pests, plant diseases, or noxious weeds, and therefore has 
included no corresponding provision in the Senate bill.

                          TITLE VIII--FORESTRY


                       Forestry in the farm bill

    Forestry concerns, particularly those relating to non-
Federal forests, have been included in past farm bills for some 
time. In 1990, a number of new forestry initiatives were 
included, such as the Office of International Forestry and 
Forest Legacy Program. Similarly, the 1996 bill covered 
forestry issues. This year's bill continues to strengthen 
national forestry efforts.

                 Forests and private forest landowners

    Sustainable management of America's non-industrial private 
forest lands is important to Americans future. The majority of 
wood produced in the United States comes from private forest 
lands. These lands provide many benefits to society, including 
air and water quality, fish and wildlife habitat, protection of 
soils and wetlands, and opportunities for recreation and 
solitude. The products and services resulting from stewardship 
of these forests contribute greatly to the economic and 
environmental health of the country. Yet despite the importance 
of these lands, their full public benefit and private value are 
not being captured. Only ten percent of these lands are managed 
in accordance with professional forestry advice. The long term 
investments needed for sustainable management of these lands 
pose a financial challenge to landowners. In addition, non-
industrial forest lands are faced with many threats, including 
the threats of forest fragmentation, catastrophic wildfires, 
and invasive species. Society depends more than ever on 
private, non-industrial forest landowners to provide the market 
commodities and environmental benefits required to maintain a 
high quality of life for the American people.

                           Forestry programs

    There are nearly ten million non-industrial private forest 
landowners in the United States. These individuals own nearly 
half of the nation's 747 million acres of forest land. Yet as 
mentioned above, only a small portion of these landowners 
receive professional forestry assistance. The forestry title 
addresses this issue by establishing a new Sustainable Forest 
Management Program for the nation's private forest landowners 
and participating States. This program will provide assured 
funding for States to address a variety of multiple resource 
objectives, including forest health and productivity, soil, air 
and water quality, agroforestry, preservation of aesthetic 
quality and opportunities for outdoor recreation.
    The Committee recommends the Sustainable Forest Management 
program be administered jointly by the Forest Service and the 
Natural Resources Conservation Service. If the Secretary 
chooses either the Forest Service or Natural Resources 
Conservation Service individually to administer the program, 
the Committee expects that the program will be run in close 
coordination with the other agency.
    Few private forest landowners, on their own, have the 
financial and technical resources to manage their forests. The 
Committee believes that cooperatives provide landowners with 
the tools and market leverage necessary for cost-effective 
forest land management, as well as the economic incentives to 
do so. Because cooperatives are owned by their members, 
landowners enjoy the benefits of collaboration, while retaining 
individual ownership and control of their lands. Sustainable 
forestry cooperatives have demonstrated success in helping 
private forest landowners improve the income earning potential 
and environmental health of their woodlands. Therefore the 
title includes a sustainable forestry cooperative program to 
support their development.
    Due to the interdisciplinary nature of forestry 
cooperatives, the Committee recommends the program be 
administered jointly by the Forest Service, through the 
Cooperative Forestry Landowner Assistance Programs, to provide 
expertise and guidance on sustainable management of woodlots, 
and by the Rural Cooperative-Business Service to provide 
expertise and guidance on cooperative organization and 
development.
    The Committee recognizes that the severity and intensity of 
wildland fires have increased dramatically over the past few 
decades. Decades of aggressive fire suppression, combined with 
rural residential development, have drastically changed the 
look and fire behaviors of forests and rangelands. While 
wildland fires burning under the right conditions can be 
beneficial and sometimes essential to the health of forests and 
rangelands, catastrophic wildfires are devastating, costly to 
control, and can trigger a wide array of detrimental impacts. 
In the urban-wildland interface, these fires not only cause 
damage to the forests and environment, but also pose serious 
risks to human lives, personal property, and other resources. 
There are numerous at- risk communities across the country 
intermingled in the urban-wildland interface.
    To address these threats, the title includes authorization 
for at least two forest fire research centers in western 
States. The centers are to conduct research into ecologically 
sound fire control methods and then to transfer the findings to 
fire and land managers. Additionally, the title establishes a 
wildfire prevention and hazardous fuel purchase program. This 
provision provides grants to entities to use forest biomass 
(near communities with significant risk of fires) to generate 
electricity. It also authorizes contracts to remove hazardous 
fuel from forests, focusing on the urban-wildland interface. 
The Committee also recognizes that protecting people and 
structures in the urban-wildland interface demands close 
coordination between local, State, tribal, and Federal 
firefighting resources. Thus, the title creates a community and 
private land fire assistance program.
    The Forestry title also adds authorization for a 
sustainable forestry outreach initiative to provide educational 
assistance to forest landowners; increases the authorization 
for the Renewable Resources Extension Act; authorizes a 
watershed forestry initiative to provide cost-share and 
technical assistance to protect watersheds and water quality in 
forested areas; and reauthorizes the Forestry Incentives 
Program and Office of International Forestry.

                            TITLE IX--ENERGY


                        Energy and the Farm Bill

    This farm bill includes a comprehensive energy title for 
the first time. The title's presence reflects the increasing 
importance that energy plays in the nation's business, as well 
as the economic, social, public health and environmental 
opportunities that exist for agricultural producers throughout 
the United States.
    It is worth noting, however, that energy matters have been 
addressed periodically in past agricultural legislation. Most 
recently, the 1996 Farm Bill included provisions related to 
energy and global climate change. The Food, Agriculture, 
Conservation and Trade Act of 1990 contained language 
pertaining to biomass energy. The Food Security Act of 1985 
included a biofuels initiative. Finally, the Food and 
Agriculture Act of 1977 included several energy related 
provisions, including those pertaining to renewable energy 
generation.

                 Renewable energy and energy efficiency

    Renewable energy development and increased energy 
efficiency hold great promise for the agricultural sector and 
the nation's farmers and ranchers. Agricultural energy sources 
can increase farmer income, create new jobs, revitalize rural 
communities, add to the nation's energy security, and reduce 
pollution. In addition, cost-effective energy efficiency 
improvements in farm operations can save farmers money which 
they can then invest in other useful ways. This title 
establishes new initiatives to promote agriculturally based 
renewable energy and energy efficiency opportunities.
    Currently, most farmers do not own or market renewable-
based electricity. Some farmers are leasing land for the 
placement of wind turbines or other renewable energy generation 
to large energy companies. However, many would like to produce 
and market electricity derived from renewable sources. This 
title establishes a renewable energy development grant and loan 
program to support utility-scale farmer or rancher owned 
cooperatives or other business ventures to produce electricity 
from renewable sources.
    Rural communities rely on rural electric cooperatives or 
other electric utilities for their electricity supply. Many of 
these utilities are well situated geographically to produce 
clean energy from renewable sources for their customers or 
members. The title assists such utilities in developing 
renewable energy to serve the needs of rural communities and 
provide attendant public health or environmental benefits.
    Agriculture is an energy intensive industry. Equipment and 
various farm processes require significant use of electricity, 
fuel, and other energy sources. Given that many in the 
agricultural community are having difficulty earning sufficient 
income, it is critical that new avenues are pursued to reduce 
costs and increase farmer energy self-sufficiency. The energy 
title meets these needs by creating an energy audit and 
renewable energy assessment competitive grant program. This 
program would allow eligible entities around the country to 
provide farmers, ranchers, and rural small businesses with 
comprehensive energy audits, including assessments of renewable 
energy generation potential. The audits could spur substantial 
savings, and increase on-farm clean energy generation and 
independence. The Committee notes that audit reimbursements may 
be made either directly to farmers, ranchers or rural small 
businesses, or through entities administering the program for 
the Department.
    Often the biggest obstacle to investing in on-farm 
renewable energy or making energy efficiency improvements is 
the lack of capital or ready financing. A grant and loan 
program is established to assist eligible farmers, rancher and 
rural small businesses to purchase renewable energy systems 
like wind turbines, photovoltaic systems, and methane 
digesters, as well as to make energy efficiency improvements 
including motor pump, crop drying or lighting retrofits.
    Additional opportunities exist for farmers and rural 
communities to become energy self-sufficient through the use of 
hydrogen and fuel cell technologies. Fuel cells powered by 
hydrogen hold the potential to provide vast quantities of power 
and heat in a cost effective manner with little environmental 
impact. In addition to fuel cells, hydrogen as well as methane 
produced on farms can be used in emerging advanced energy 
technologies like microturbines and stirling engines. In rural 
areas, hydrogen could ultimately be produced from renewable 
resources including biomass, wind, solar, and geothermal 
technologies. The title provides financial support for projects 
and studies related to hydrogen and fuel cell technologies to 
further promote farm-based and rural clean energy 
opportunities.

                      Biobased product development

    Biobased products create additional markets for 
agricultural resources, leading to greater stability in the 
farm economy. These products are manufactured near the source 
of the raw materials, creating new industries and jobs in rural 
locations. Many biobased products also have reduced impacts on 
human health and the environment, including reduced air 
emissions and impacts on marine environments compared to 
competing products.
    The Federal Government is the nation's single largest 
consumer, purchasing in excess of $200 billion in products each 
year. As such, it can help stimulate markets for agricultural 
products by purchasing biobased products, including fuels, 
chemicals, adhesives, lubricants, coatings, plastics, cleaning 
products and building materials. These purchases would afford 
substantial benefits to farmers, rural communities, national 
security and the environment.
    The intent of the title's biobased product purchasing 
requirement is to stimulate the production of new biobased 
products and to energize emerging markets for those products by 
requiring the Federal Government to purchase such products 
listed by the Department of Agriculture.
    The Department of Agriculture, in consultation with the 
Environmental Protection Agency and the National Institute of 
Standards and Technology, will serve as the final arbitrator of 
what is or is not considered a biobased product to be listed 
and afforded Federal procurement preference.
    The Committee believes there are tremendous opportunities 
to reduce the use of oil by converting domestic sources of 
biomass into petroleum substitutes. Just as petroleum is 
refined into a broad array of products, the nation should 
refine biomass, including agricultural wastes and residues into 
biofuels, chemicals, and electricity.
    The energy title includes a program to help foster the 
development of large-scale plants that produce multiple 
products from biomass. By producing fuels, chemicals and in 
some cases electricity a biorefinery will maximize the 
economics of biomass and minimize the environmental footprint. 
The Department of Agriculture and Department of Energy 
currently carry out research, development, and demonstration 
initiatives in support of biorefineries. Thisprovision would 
add to the resources available at the Department of Agriculture to 
support technologies that produce multiple products from biomass.
    In carrying out this provision of the title, the Department 
should coordinate its new resources with existing efforts and 
with related activities at the Department of Energy. The 
Biomass Research and Development Board, created pursuant to the 
Biomass Research and Development Act of 2000, should be engaged 
in the coordination effort, in addition to its consultative 
role under this section.
    In making selections for competitive awards, the Secretary 
should give particular weight to projects that produce multiple 
products--fuels, chemicals, and power--and do so in a cost 
effective and environmentally sound manner. The Secretary 
should also emphasize different kinds of feedstocks, including 
cellulosics and conversion processes. Additionally, the 
Secretary should seek geographic diversity across the projects 
selected. Finally, the Secretary should give consideration to 
supporting the expansion of existing biorefineries so that they 
may produce new and emerging technologies for converting 
biomass into useful products.
    In addition to biorefinery support, the Committee believes 
biomass research and development also need to be aggressively 
pursued. Thus, the energy title funds the Biomass Research and 
Development Act of 2000 to promote research and development 
leading to the production of biobased industrial products. This 
legislation requires the Secretaries of Agriculture and Energy 
to competitively award grants, contracts and financial 
assistance to eligible entities to carry out research and 
development of low cost and sustainable biobased industrial 
products.
    It should be noted that the term biomass, in the definition 
provision of the title and elsewhere, is not intended to allow 
lands set aside for conservation purposes to be used for 
biomass harvest if such use would limit the water quality 
protection, soil erosion prevention, or wildlife habitat 
enhancement purposes for which the land was primarily set 
aside.

     Carbon sequestration, research, development and demonstration

    Farming as an economic activity is highly vulnerable to 
changes in weather patterns. Recent studies estimate that total 
worldwide crop production could decline significantly over the 
next century as the global average temperature continues to 
increase. The U.S. agricultural sector has a vested interest in 
attempting to forestall such a severe change, and carbon 
sequestration in soils and plants could be an important aspect 
of this strategy.
    In preliminary estimates, USDA and academic scientists 
found that U.S. farmers can sequester additional carbon, 
between 75 and 208 million metric tons of carbon per year, by 
adopting conserving agricultural and forestry practices on a 
wide basis.
    A crucial step in developing an understanding of 
sequestration uncertainties and opportunities will be to devise 
practices to measure, monitor and verify carbon and other 
greenhouse gas accumulation in soils and plants that are both 
accurate and cost-effective. This title provides the U.S. 
Department of Agriculture with the authority to undertake 
necessary research, development and demonstration projects to 
attain such an objective.
    The Committee recognizes that in order to assist land 
managers to select conservation management systems to increase 
soil and plant carbon sequestration, field scale models or 
decision support systems that predict the site-specific carbon 
impact of management alternatives will be needed. This 
technology will also be required to incorporate carbon benefits 
into an environmental benefits index.

              Secretarial discretion and priority setting

    The Committee believes that the development and 
implementation of renewable energy and energy efficiency 
initiatives should be a Department priority. In order to 
implement the provisions of the title, the Committee directs 
the Secretary to provide it with a strategy for accomplishing 
the goals and objectives of the title no later than 90 days 
after the date of enactment. This strategy should identify the 
ways in which the Secretary will accomplish the objectives of 
this title, including the lead organization or individual in 
the Secretary's office who will coordinate this strategy, the 
points of contact in each agency responsible for implementing 
the programs and strategies in this title, and the manner in 
which the Department will coordinate and collaborate with other 
departments and agencies in the Federal Government in 
implementing this renewable energy and energy efficiency 
strategy.

                         TITLE X--MISCELLANEOUS


                       Crop insurance provisions

    The vast majority of crop insurance policy holders appear 
to be satisfied to buy their coverage in five percent 
increments. Consequently, Section 1011 extends the prohibition 
from last year's Agricultural Risk Protection Act against 
continuous coverage, barring purchase of crop insurance 
coverage except at five percentage point intervals, starting at 
50 percent of the record or appraised average crop yield. This 
provision, while providing budgetary savings, did not 
appreciably affect the operation of the federal crop insurance 
system in 2001. Its extension should not be different.
    For certain crops, loss of crop quality in recent years due 
to bad weather has been nearly as problematic as loss of 
production. Farmers have long raised concerns about quality 
loss adjustment procedures in use in the federal crop insurance 
program. Section 1012 clarifies the quality loss provisions of 
the Agricultural Risk Protection Act of 2000, requiring that 
after appropriate review, changes in quality loss adjustment 
procedures be completed prior to the 2003 reinsurance year. 
Thus, it provides a date certain for revised quality loss 
provisions to be included in crop insurance policies
    In general, in order to remain eligible for a range of USDA 
benefits, producers are required to develop conservation plans 
for highly erodible lands and then to carry out those plans. 
Likewise, producers are expected to conserve wetlands to 
preserve eligibility. The list of federal programs covered by 
these conservation rules is broad. It includes AMTA contract 
payments, marketing assistance loans and any type of price 
support or payment. Also included are farm storage facility 
loans, disaster payments, FSA direct or guaranteed loans, EQIP 
payments, CRP payments and other conservation payments.
    Until the 1996 farm bill, crop insurance was also included 
on that list. For the sake of consistency, conservation 
requirements should apply to the entire range of USDA programs 
in USDA that provide direct and indirect benefits to farmers, 
which clearly includes crop insurance. For the small number of 
insured farmers who do not currently have conservation plans 
but do farm highly erodible lands, USDA permits them a grace 
period to develop one. Section 1013 restores crop insurance to 
the list of programs under which conservation compliance 
requirements must be observed.

                       Country of origin labeling

    Many American consumers want to know the country of origin 
of their food. This Act therefore requires retailers to notify 
consumers of the country of origin of beef, pork, lamb, fish, 
fruits, vegetables, and peanuts. This provision provides 
consumers with greater information about the food they buy. 
Most of the products U.S. consumers purchase today are already 
labeled, with the notable exception of many food products. This 
provision brings the United States in line with many of its 
current trade partners, who already have country of origin 
labeling. These countries include Canada, Japan, and the 
countries of the European Union. The Committee expects the 
Secretary to look to verification programs currently used by 
the USDA in enforcing the new provision.

                        Nonambulatory livestock

    The Committee finds that the transport and marketing of 
downed livestock can be inhumane, and that meat from downed 
livestock may involve increased food safety risks. This Act 
therefore makes it unlawful for any stockyard owner, market 
agency, or dealer to buy, sell, give, receive, transfer, 
market, hold, or drag any nonambulatory livestock unless the 
nonambulatory livestock has first been humanely euthanized. 
This provision will not apply to farms not subject to the 
authority of the Grain Inspection, Packers, and Stockyards 
Administration, nor will it apply in a case in which 
nonambulatory livestock receive veterinary care intended to 
render the livestock ambulatory. The Committee intends that 
veterinary care intended to return a downed animal to an 
ambulatory state must be administered by a veterinarian and 
must not include coercive actions such as the use of electric 
prods, pushing or dragging the animal. If veterinary care is 
insufficient to make the animal ambulatory, then the animal 
must be humanely euthanized immediately. The Committee expects 
that this provision will be enforced pursuant to Section 312 of 
the Packards and Stockyards Act, along with other pertinent 
sections.

      Animal Welfare Act amendments to animal fighting provisions

    Sections 1024 and 1025 seek to close loopholes in the 
Animal Welfare Act that have made it difficult for law 
enforcement personnel to enforce laws relating to animal 
fighting. Section 1024 increases the penalties for violations 
of the animal fighting provisions of the Animal Welfare Act and 
broadens the definition of the term ``interstate or foreign 
commerce'' to include movement from any State into any foreign 
country. Section 1025 removes language from the Animal Welfare 
Act that has allowed birds to be moved in interstate or foreign 
commerce for purposes of animal fighting as long as they are 
taken to a State in which cockfighting is legal. These changes 
will make it illegal for anyone to transport birds across State 
lines for fighting purposes, regardless of whether the State or 
foreign country to which they are being sent allows 
cockfighting.
    The Committee notes that there are 142 State and local law 
enforcement agencies that have endorsed the effort to close the 
loopholes in the animal fighting provisions of the Animal 
Welfare Act. Law enforcement officials have indicated to the 
Committee that the current Federal law, which allows shipment 
of birds to States and countries where cockfighting is legal, 
has undermined the effectiveness of their State bans against 
cockfighting.

                         Food Safety Commission

    Food-borne illness continues to be a public health concern 
in the United States. Even though the U.S. food supply is as 
safe as any in the world, every year millions of Americans 
become sick, and many die from food borne pathogens. Changes in 
the ways food is produced, distributed, and consumed present 
new challenges for ensuring the safety of our food. Americans 
are eating a wider variety of foods. While eating a variety of 
foods is beneficial to health, it presents new food safety 
challenges and may lead to different patterns of exposure to 
food-borne illness. More consumers desire a wide variety of 
foods year round, making food safety issues surrounding 
importation, transportation and refrigeration increasingly 
important.
    Americans are also eating more of their meals away from 
home. In fact, fifty cents of every food dollar is spent on 
food prepared outside the home. This food is obtained not only 
from restaurants and grocery stores, but is also consumed in 
institutional settings such as schools, hospitals, and nursing 
homes. This creates a situation where comparatively few people 
are involved in preparing large numbers of meals for others 
such that the potential impact of disease-producing errors 
increases.
    The United States has a fragmented Federal food safety 
system as documented by the Congressionally-mandated study of 
the National Academy of Sciences. At the Federal level, at 
least twelve agencies are involved in the key functions of food 
safety such as monitoring, surveillance, inspection, 
enforcement, outbreak management, research, and education.
    The Committee therefore believes that a commission should 
be established to develop recommendations for how the disparate 
food safety statutes and approaches can be harmonized with one 
another to improve public health, improve coordination of the 
Federal food safety system, minimize inefficiencies, and reduce 
gaps in the system. The Committee expects this work to build 
upon the recommendations of the report of the National Academy 
of Sciences entitled ``Ensuring Safe Food from Production to 
Consumption''.

           National Organic Cost-Share Certification Program

    The Committee has noted the increasing significance of the 
organic sector of agricultural production. While organic 
production only accounts for about one percent of overall food 
production, it represents a very significant contribution to 
value-added and sustainable agriculture. To assist organic 
producers and help implement USDA's National Organics Program, 
the Committee therefore provides in this Act that organic 
farmers may receive up to $500 each from the CCC to help cover 
the cost of obtaining organic certification.

                    IV. Section-by-Section Analysis


                      TITLE I--COMMODITY PROGRAMS


Section 100. Definitions

    This section defines terms necessary for implementation of 
this title, including considered planted, contract acreage, 
contract commodity, contract payment, loan commodity, oilseed, 
payment yield, and producer.

            Subtitle A--Direct and Counter-Cyclical Payments


Section 111. Direct and counter-cyclical payments

    This section authorizes the Secretary to enter into 
contracts with eligible owners or producers on a farm. The 
section establishes contract requirements including 
conservation compliance, wetlands protection, planting 
flexibility restrictions, and agricultural use. The section 
requires the Secretary to protect the interests of tenants and 
sharecroppers and to provide for fair and equitable sharing of 
contract payments among the eligible producers on a farm. The 
section establishes eligible cropland and contract acreage and 
provides the methodology to establish the payment yield for 
each contract commodity. The section allows producers on a farm 
to update contract acreage and payment yields or to retain the 
current base acres and yields and add recent oilseed production 
experience on up to 100 percent of available cropland.
    The Secretary is directed, to the extent practicable, to 
begin entering into contracts not later than 45 days after the 
date of enactment and to complete contracts within 180 days of 
enactment. However, at the beginning of each fiscal year the 
Secretary shall allow an eligible producer to enroll land from 
expiring or terminated conservation reserve contracts. The 
section establishes the duration of the contract as beginning 
with the 2002 crop and extending through the 2006 crop, unless 
earlier terminated by the producer.
    The section provides for direct payments for each of the 
2002 through 2006 fiscal years. The section establishes direct 
payment rates for each contract commodity for each fiscal year. 
The payment amount for each contract commodity on the farm is 
equal to the product of the direct payment rate times the 
contract acreage times the payment yield. Producers may elect 
to receive an initial payment equal to 50 percent of the annual 
payment on or after December 1 of the fiscal year. The 
Secretary will make the final payment not later than September 
30 of the fiscal year.
    The section provides for counter-cyclical payments for each 
of the 2002 through 2006 crop years. The counter-cyclical 
payment rate is equal to the difference between the income 
protection price as established for each of the contract 
commodities and the sum of the higher of the average price of 
the contract commodity during the first 5 months of the 
marketing year and the loan rate for the contract commodity 
plus the applicable direct payment for the contract commodity. 
The payment amount for each contract commodity on the farm is 
equal to the product of the counter-cyclical payment rate times 
the contract acreage times the payment yield. Finally, the 
section provides for counter-cyclical payments to be made not 
later than 190 days after the beginning of the marketing year 
for the crop of the covered commodity.

Section 112. Violations of contracts

    This section establishes a penalty for first time 
violations of planting flexibility restrictions equal to twice 
the amount otherwise payable under the contract for the 
applicable crop year on each acre that is inadvertently planted 
to a restricted crop.

Section 113. Planting flexibility

    This section prohibits the planting of the following crops 
on contract acreage: fruits, vegetables (other than lentils, 
mung beans, dry peas, and chickpeas); and, beginning with the 
2003 crop, wild rice.

Subtitle B--Nonrecourse Marketing Assistance Loans and Loan Deficiency 
                                Payments


Section 121. Nonrecourse marketing assistance loans and loan deficiency 
        payments

    This section makes marketing assistance loans and loan 
deficiency payments available through the 2006 crops for loan 
commodities--wheat, corn, grain sorghum, barley, oats, upland 
cotton, extra long staple cotton (no loan deficiency payment), 
rice, oilseeds, wool, mohair, honey, dry peas, lentils, and 
chickpeas. The section provides for adjustments to the 
prevailing world market price for upland cotton and special 
marketing loan provisions for upland cotton and extra long 
staple cotton through July 31, 2007.

Section 122. Eligible production

    This section makes any quantity of a loan commodity 
produced on the farm eligible for a marketing loan provided the 
producer complies with applicable conservation and wetland 
protection requirements.

Section 123. Loan rates

    This section establishes loan rates for each loan 
commodity. The section allows the Secretary to make appropriate 
adjustments in the loan rates for any loan commodity for 
differences in grade, type, quality, location and other 
factors.

Section 124. Term of loans

    This section establishes a loan term of 9 months beginning 
on the first day of the first month after the month in which 
the loan is made.

Section 125. Repayment of loans

    This section requires the Secretary to permit producers to 
repay loans at the lesser of the loan rate plus interest or a 
rate that the Secretary determines will minimize potential loan 
forfeitures; minimize the accumulation of stocks; minimize the 
cost incurred by the Federal Government in storing the 
commodity; allow the commodity to be marketed freely and 
competitively; and minimize discrepancies in marketing loan 
benefits across State boundaries and across countyboundaries. 
The above repayment criteria apply to all loan commodities except 
upland cotton, extra long staple cotton, and rice.

Section 126. Loan deficiency payments

    This section provides for loan deficiency payments for 
producers on a farm that produce a loan commodity (except extra 
long staple cotton), agree to forgo obtaining a loan, and have 
a beneficial interest in the loan commodity. The section 
requires the Secretary to determine the amount of the payment 
on the earlier of the date on which the producers on the farm 
marketed or otherwise lost beneficial interest in the loan 
commodity or the date the producers on the farm request the 
payment.

                     Subtitle C--Other Commodities


                            CHAPTER 1--DAIRY


Section 131. Milk price support program

    This section extends the milk price support program at the 
support price of $9.90 per hundredweight and requires the 
Secretary to allocate the rate of price support between the 
purchase prices for nonfat dry milk and butter in a manner that 
will result in the lowest level of expenditures by the 
Commodity Credit Corporation.

Section 132. National Dairy Program

    This section establishes a national program that will 
stabilize the production, price and marketing of milk and other 
dairy products in the United States and directs the Secretary 
to carry out the program during each of calendar years 2002 
through 2006. The provisions of the amended section 142 are as 
follows:
    Subsection (a) sets forth the purpose of the program.
    Subsection (b) defines the terms used throughout the 
section, including eligible production, which is capped at 
500,000 pounds of milk per producer per month; Federal milk 
marketing order; marketing area; and producer.
    Subsection (c) requires the Secretary to amend Federal milk 
marketing orders to establish a minimum price per hundredweight 
for Class I milk that is not less than the sum of the adjusted 
Class I milk differential and at least $14.25.
    Subsection (d) requires the Secretary to provide for 
uniform national pooling among producers of milk under all 
Federal milk marketing orders of all funds equal to the 
difference between the price of Class I milk and the price of 
Class I milk if this section were not in effect. The Secretary 
is required to distribute the amounts in the national pool to 
all producers covered by Federal milk marketing orders, based 
on eligible production.
    Subsection (e) provides for payment of administrative 
costs; any increased costs of nutrition programs, both Federal 
and State; and to reimburse the Commodity Credit Corporation 
for any additional costs to carry out the milk price support 
program.
    Subsection (f) provides that during each month when the 
average Class III price falls below $14.25 per hundredweight, 
the Secretary shall use the funds of the Commodity Credit 
Corporation (CCC) to make a payment to each producer for 
eligible production of Class II, III and IV milk. The 
subsection establishes the payment rate equal to 25 percent of 
the difference between $14.25 per hundredweight and the average 
price for Class III milk during the month. Payments under this 
subsection cannot exceed $300,000,000 per fiscal year.

Section 133. Dairy Export Incentive and Dairy Indemnity Programs

    This section extends the dairy export incentive and dairy 
indemnity programs until 2006.

Section 134. Fluid milk promotion

    This section amends the Fluid Milk Promotion Act of 1990 by 
defining fluid milk processor as any person who processes and 
markets commercially more than 3,000,000 pounds of fluid milk 
products in consumer-type packages per month.

Section 135. Dairy product mandatory reporting

    This section amends the Agricultural Marketing Act of 1946 
to define ``dairy products'' as manufactured dairy products and 
substantially identical products designated by the Secretary 
that are used by the Secretary to establish minimum prices for 
Class III and Class IV milk under a Federal milk marketing 
order.

Section 136. Funding of dairy promotion and research program

    This section amends the Dairy Production Stabilization Act 
of 1983 by defining the term ``imported dairy product''; adding 
not more than 2 members who represent importers of dairy 
products to the National Dairy Promotion and Research Board; 
imposing an assessment on imported dairy products; and allowing 
importers to vote in the referendum.

                            CHAPTER 2--SUGAR


Section 141. Sugar program

    This section reauthorizes the sugar program through 2006 
with amendments.
    Subsection (a) allows the Secretary to adjust loan rates, 
if support for foreign competitors is reduced more than is 
required under the Uruguay Round Agreement on Agriculture.
    Subsection (b) requires the Secretary to pay loan benefits 
to a producer of sugar beets or sugarcane if the processor has 
filed for bankruptcy or is otherwise insolvent. The subsection 
prohibits the Secretary from imposing any administrative 
requirement that has the effect of preventing a processor from 
electing to forfeit the loan collateral.
    Subsection (c) terminates the marketing assessment on sugar 
effective October 1, 2001.
    Subsection (d) eliminates the penalty for forfeiture of 
sugar under loan.
    Subsection (e) authorizes nonrecourse loans on in-process 
sugars and syrups.
    Subsection (f) requires the Secretary to operate the sugar 
program, to the extent practicable, at no cost to the Federal 
Government and authorizes the Commodity Credit Corporation to 
accept bids from processors (acting in conjunction with 
producers) for the purchase of sugar inventory in exchange for 
reduced production.
    Subsection (g) requires producers of sugarcane in a State 
with more than 250 producers of sugarcane to report yields and 
acres and allows the Secretary to require similar reports from 
each producer of sugarcane and sugar beets. The subsection 
requires importers of sugars, syrups, or molasses to be used 
for human consumption, other than quantities that are within 
the tariff-rate quota, to report.
    Subsection (h) makes the sugar program available through 
the 2006 crop.
    Subsection (i) reduces the CCC interest rate on sugar loans 
by 100 basis points.

Section 142. Storage facility loans

    This section establishes a sugar storage facility loan 
program to provide financing for processors of domestically-
produced sugarcane and sugar beets to construct or upgrade 
storage and handling facilities for raw sugars and refined 
sugars.

Section 143. Flexible marketing allotments for sugar

    This section amends the Agricultural Adjustment Act of 1938 
to require the Secretary to establish marketing allotments for 
the 2002 through 2006 crops of domestically grown sugar to 
eliminate loan forfeitures.
    Subsection (a) repeals repetitive reporting provisions.
    Subsection (b) provides for estimates of the quantity of 
sugar that will be consumed in the United States and the total 
U.S. sugar supply.
    Subsection (c) updates the allotment formula for current 
U.S. import obligations, assigns allotments between sugarcane 
and sugar beets, and provides for the suspension of allotments 
whenever imports are estimated to exceed a certain level.
    Subsection (d) updates the base period and other factors 
applicable to the allocation of sugarcane and sugar beet 
allotments among sugarcane and sugar beet processors, 
respectively.
    Subsection (e) establishes procedures for the Secretary to 
reassign allotments if a processor cannot meet the allocation.
    Subsection (f) prescribes the manner in which allotment 
disputes are settled and provides for certain adjustments in 
the event a processor closes.
    Subsection (g) defines mainland state and offshore state 
and allows the Secretary to preserve certain acreage base 
history for a period of not more than 5 consecutive years.

                           CHAPTER 3--PEANUTS


Section 151. Peanut program

    This section, in subsection (a), amends Subtitle D of the 
Federal Agriculture Improvement and Reform Act of 1996 by 
adding at the end a new chapter which establishes a revised 
peanut program. Under the chapter, the peanut program will more 
closely resemble the program established by the bill for other 
program commodities. Specifically, the new peanut program 
provides producers with marketing loan assistance, including 
loan deficiency payments, and both direct and counter-cyclical 
payments. The new program will terminate the marketing quota 
system and compensate quota holders for the value of the lost 
quota. The peanut provisions of the new chapter 3 are as 
follows:

Section 158A defines terms as used in the chapter

    Definitions are provided for counter-cyclical payment, 
direct payment, effective price, historical peanut producers on 
a farm, income protection price, payment acres, peanut acres, 
payment yield, and peanut producer. Importantly, the term 
payment acres defined in paragraph (6) means 85 percent of the 
peanut acres on a farm. Under the bill, direct payments and 
counter-cyclical payments are made on payment acres as so 
defined.
    Section 158B, in subsection (a), establishes procedures and 
requirements for the Secretary to determine for each historical 
producer the appropriate payment yields and payment acres. The 
average yield is to be determined on all farms of the 
historical producer for the 1998 through 2001 crop years, 
excluding any year when peanuts were not produced. Average 
acreage for the historical producer is to be based on the four 
year average of acreage planted during 1998 through 2001.
    Subsection (b) requires the Secretary to allow each 
historical producer to assign the average peanut yield and 
average acreage determined under subsection (a) to cropland on 
a farm. The average of all the yields, and the total number of 
acres, assigned to the farm will be considered to be the 
payment yield and peanut acres, respectively, for the farm for 
the purpose of making direct and counter-cyclical payments.
    Subsection (c) requires a historical peanut producer to 
notify the Secretary of the assignments of yield and acres not 
later than 180 days after the date of enactment of the bill.
    Subsection (d) limits payment acres for peanuts on a farm 
to 85 percent of the peanut acres assigned to the farm.
    Subsection (e) requires the Secretary to reduce the peanut 
acres for a farm, or the base acres for some other covered 
commodity, such that the total of the peanut acres, contract 
acreage, and acreage on the farm enrolled in a conservation 
program for which payments are made in exchange for not 
producing a crop, does not exceed the actual cropland acreage 
of the farm. In making this determination, the Secretary must 
take into account additional acreage as a result of an 
established double cropping practice.
    Section 158C requires the Secretary to make, for each of 
the 2002 through 2006 fiscal years, direct payments to peanut 
producers on a farm with peanut acres and payment yields, as 
established under section 158B. The payment rate for direct 
payments is $0.018 per pound. The payment amount is figured by 
multiplying the payment rate times the payment acres times the 
payment yield. The section provides the Secretary guidance with 
respect to when direct payments must be made, and the option of 
producers to receive advance payments.
    Section 158D, in subsections (a) through (c), requires the 
Secretary, for each of the 2002 through 2006 crops of peanuts, 
to make counter-cyclical payments if the effective price is 
less than the income protection price. The effective price is 
defined, based on a 12 month marketing year, as the sum of the 
greater of the national average market price, or the national 
average loan rate, and the payment rate for peanuts established 
for the purpose of making direct payments. The income 
protection price is set at $520 per ton.
    Subsection (d) provides that the payment amount of the 
counter-cyclical payment is to be determined by multiplying the 
payment rate times the payment acres on the farm times the 
payment yield for the farm. The payment rate is defined as the 
difference between the income protection price and the 
effective price.
    Section 158E, in subsection (a), provides that peanut 
producers must comply with certain conservation (highly 
erodible land, and wetland provisions of the Food Security 
Act), planting flexibility, and agriculture or conserving use 
requirements in order to receive either direct or counter-
cyclical payments. The Secretary may issue regulations to 
ensure compliance with this subsection.
    Subsection (b) provides that, in the event of foreclosure, 
peanut producers will not be required to repay a direct or 
counter-cyclical payment if the Secretary finds that forgiving 
the repayment is appropriate and fair.
    Subsection (c) involves the transfer or change of interest 
in a farm. Generally, the transfer or change in the interest of 
a peanut producer in a farm for which direct or counter-
cyclical payments are made will result in the termination of 
payments, unless the transferee or owner agrees to assume the 
obligations described under subsection (a). The Secretary may 
not impose any restrictions on the transfer of peanut acres or 
payment yield of a farm as part of a transfer or change in 
ownership.
    Subsection (d) provides that as a condition of receiving 
payments, the Secretary must require acreage reports for the 
farm.
    Subsection (e) requires the Secretary to provide adequate 
safeguards to protect the interests of tenants and 
sharecroppers.
    Subsection (f) requires the Secretary to provide for the 
sharing of payments among peanut producers on a farm on a fair 
and equitable basis.
    Section 158F restricts planting flexibility as it relates 
to peanut acres on a farm. Generally, any commodity or crop may 
be planted on peanut acres, except fruits, vegetables (other 
than lentils, mung beans, and dry peas), and wild rice (but 
only after the 2002 crop). Special provisions are made in 
situations where there is a history of double-cropping of 
peanuts with other crops, on farms with a history of planting 
crops that would otherwise be prohibited by this section.
    Section 158G provides for marketing assistance loans and 
loan deficiency payments. Subsection (a) requires the Secretary 
to make available, for each of the 2002 through 2006 crops, 
non-recourse marketing assistance loans. Loans are to be made 
under such terms and conditions as determined by the Secretary. 
As appropriate, the Secretary may provide for loan benefits to 
be made available to producers through a designated marketing 
association of peanut producers, the Farm Service Agency, or a 
loan servicing agent approved by the Secretary.
    Subsection (b) establishes the loan rate at $400 per ton.
    Subsection (c) provides that marketing assistance loans 
will be for a term of 9 months, and that loans may not be 
extended.
    Subsection (d) requires the Secretary to permit repayments 
of marketing assistance loans at a rate (loan repayment rate) 
that is the lesser of the loan rate (plus interest) or a rate 
that will minimize forfeitures, accumulation of stocks, storage 
costs, and allow peanuts to be marketed freely and 
competitively both domestically and internationally.
    Subsection (e) authorizes the Secretary to make loan 
deficiency payments available to producers in lieu of marketing 
assistance loans. Generally, the amount of the loan deficiency 
payment is determined by multiplying the loan payment rate 
(amount by which the loan rate exceeds the loan repayment rate) 
by the quantity of peanuts produced on the farm.
    Subsections (f) and (g) require compliance with highly 
erodible land and wetland conservation provisions of the Food 
Security Act, and allows the Secretary to implement 
reimbursable agreements or to otherwise provide for the payment 
of expenses of the program in a manner that is consistent with 
other commodities.
    Section 158H is effective beginning with the 2002 crop. 
Subsection (a) requires that all peanuts placed under a 
marketing assistance loan must be officially inspected and 
graded by a Federal or State inspector. Peanuts not placed 
under loan may be graded at the option of the producer.
    Subsection (b) terminates the Peanut Administrative 
Committee.
    Subsection (c) requires the Secretary to establish a Peanut 
Standards Board for the purpose of assisting in the 
establishment of quality standards with respect to peanuts. The 
Secretary will appoint members to the Board that reflect all 
regions and segments of the peanut industry.
    Section 151 of the bill, in subsection (b), makes certain 
conforming amendments to the Federal Agriculture Improvement 
and Reform Act of 1996.
    Section 152 of the bill, in subsection (a), repeals 
existing authority for marketing quotas for peanuts, effective 
beginning with the 2002 crop.
    Subsection (b) provides for the compensation of quota 
holders affected by the termination of marketing quotas for 
peanuts; defines terms used in the subsection; and requires the 
Secretary to offer contracts with peanut quota holders for the 
purpose of providing compensation for the lost value of quota. 
The Secretary is to make payments to eligible quota holders for 
each of the fiscal years 2002 through 2006. Payments are to be 
made in 5 equal installments and not later than September 30 of 
each fiscal year. The amount of the payment for a fiscal year 
will be determined by multiplying $0.10 per pound times the 
established farm poundage quota (previously in effect). 
Assignments of payments made to quota holders are subject to 
existing law. The Secretary must be informed of the assignment 
of payments made under this section.
    Subsection (c) makes conforming amendments to the 
Agricultural Adjustment Act of 1938.
    Subsection (d) provides that section 152 and the amendments 
made by the section will apply beginning with the 2002 crop of 
peanuts.

                       Subtitle D--Administration


Section 161. Adjustment authority related to Uruguay Round compliance

    This section allows the Secretary to adjust the amount of 
expenditures if the Secretary determines that expenditures will 
exceed total allowable domestic support levels under the 
Uruguay Round Agreement on Agriculture.

Section 162. Suspension of permanent price support authority

    This section suspends certain permanent price support 
authority of the Agricultural Adjustment Act of 1938 and the 
Agricultural Act of 1949 for the 2002 through 2006 crops.

Section 163. Commodity purchases

    This section requires the Secretary to use funds of the 
Commodity Credit Corporation to purchase additional 
commodities, including specific minimum purchases of specialty 
crops. Of the funds, not less than $50,000,000 each fiscal year 
will be made available to the Secretary of Defense to purchase 
fresh fruits and vegetables for distribution to schools and 
service institutions, and not less than $40,000,000 each fiscal 
year to purchase agricultural commodities for distribution 
under the Emergency Food Assistance Act of 1983.

Section 164. Hard white wheat incentive payments

    This section requires the Secretary to use $40,000,000 of 
funds of the Commodity Credit Corporation to provide incentive 
payments to producers of hard white wheat during the 2003 
through 2005 crop years. The program offers wheat producers an 
alternative crop to meet a growing international market 
opportunity.

Section 165. Payment limitations

    This section establishes a limitation of $100,000 for the 
total of direct payments and counter-cyclical payments to a 
person for all contract commodities during any fiscal year, and 
a separate limitation of $100,000 for direct and counter-
cyclical payments for peanuts. The section establishes a 
limitation of $150,000 for marketing loan gains and loan 
deficiency payments for all contract commodities during any 
crop year, and separate limitations of $150,000 for wool and 
mohair, honey and peanuts.

Section 166. Regulations

    This section allows the Secretary to promulgate regulations 
to implement this title without regard to notice and comment 
provisions of section 553 of title 5 United States Code.

Section 167. Effect of amendments

    This section provides that, except as specifically 
provided, the Secretary of Agriculture may carry out existing 
programs for any of the 1996 through 2001 crop, fiscal or 
calendar years under a provision of law in effect immediately 
before the date of enactment of this Act.

                         TITLE II--CONSERVATION


Section 201. Conservation Security Program

    This section amends Subtitle D of title XII of the Food 
Security Act of 1985 by establishing a conservation incentive 
program that pays producers to adopt or maintain conservation 
practices on lands in production, as follows:

Section 1238. Definitions

    This section defines terms used in the program.

Section 1238A. Conservation Security Program

    Subsection (a). This subsection requires the Secretary to 
establish a conservation security program beginning in fiscal 
year 2003 that provides producers a payment to implement 
practices that protect and enhance natural resources, including 
soil, water, air, energy, wildlife habitat, wetlands, 
biodiversity, carbon sequestration, and management of invasive 
species.
    Subsection (b). This subsection defines eligible providers 
and eligible lands. It allows the Secretary to develop 
conservation security plans with all willing producers with 
lands in agricultural lands in production, including forest 
land integrated in an agricultural operation. Lands enrolled in 
CRP and WRP are not eligible for enrollment in the conservation 
securityprogram. To further the advancement of conservation on 
lands in production, the Secretary shall allow a producer to continue 
economic uses of the land consistent with the objectives of the 
conservation security plan.
    Subsection (c). This subsection outlines the contents of 
the conservation security plan, including the land enrolled, 
resources protected, practices adopted or maintained, schedule 
for implementation, and payment. Also, to encourage maximum 
local participation, local and State conservation priorities 
shall be developed and given priority in forming conservation 
security plans. The section also requires the Secretary to 
provide base and bonus payments upon approval of a contract.
    Subsection (d). This subsection describes the eligible 
conservation practices, including land management, vegetative, 
and structural practices, and establishes the three tiers of 
practices that may be adopted or maintained. Including payment 
for maintaining practices ensures proper recognition of those 
producers who already maintain conservation practices. The 
program establishes three tiers of participation to ensure 
maximum participation and flexibility for producers. Tier I 
covers the basic level of practices, including nutrient, pest, 
and air quality management, water conservation, and wildlife 
habitat management that may apply to all or part of an 
operation. Tier II includes practices that focus on systems 
based approaches to land management, including partial field 
practices, and wetland, grass and prairie restoration and 
protection. Tier II practices must cumulatively address at 
least one local resource of concern across the entire 
operation. To qualify for Tier III a producer must adopt 
practices that address all resources of concern on the entire 
operation. In determining eligible practices, the Secretary 
shall encourage the adoption of the lowest cost alternative, 
but not in a manner that limits the adoption of innovative 
practices. Producers with contracts at Tier II or Tier III may 
participate in approved on-farm research and demonstration 
projects. In determining eligible practices, the Secretary 
shall use the National Handbook of Conservation Practices and 
the field office technical guides of the Natural Resources 
Conservation Service. To further develop new technologies, the 
Secretary may approve pilot programs and research projects.
    Subsection (e). This subsection describes the requirements 
for a conservation security contract, including the term which 
shall be five years for a Tier I contract and five-to-ten years 
for a Tier II or Tier III contract, at the option of the 
producer. Also, it describes the circumstances under which the 
contract may be modified or terminated by the Secretary or the 
producer. It further provides the conditions for renewal of a 
conservation security contract.
    Subsection (f). This subsection provides that a producer 
shall not be in violation of a conservation security contract 
for failure to comply due to circumstances beyond the 
producer's control.

Section 1238B. Duties of Producers

    This section describes the producer's duty to implement the 
conservation security contract, to not violate the terms of the 
contract directly or indirectly and to keep and provide to the 
Secretary records showing implementation of practices required 
under the contract.

Section 1238C. Duties of the Secretary

    This section requires the Secretary to provide the producer 
an advance payment of the greater of $1,000, or 20 percent of 
the annual payment for Tier I, the greater of $2,000 or 20 
percent of the annual payment for Tier II, or the greater of 
$3,000 or 20 percent of the annual payment for Tier III at the 
option of the owner or operator.
    Subsection (b). This subsection establishes the payment 
levels under each of the three Tiers. Payments may reach 
$20,000 for Tier I, $35,000 for Tier II, and $50,000 for Tier 
III. Payments are based on a combination of factors, including 
a percentage of the average county rental rate or another 
appropriate rate to ensure regional equity based on the 2001 
rate. For the land enrolled under a CSP contract, a producer 
automatically receives an average county rate equivalent to 6 
percent for Tier I, 11 percent for Tier II and 20 percent for 
Tier III.
    In addition, a producer may receive a bonus payment for 
practices that provide increased environmental benefits, 
including practices that address national priority concerns, 
participation in research projects, and the extent practices 
exceed local priority concerns, and for participating in 
watershed projects. A bonus payment is also provided to 
beginning farmers and ranchers.
    In addition, the legislation covers the cost of practices 
based on the 2001 cost. The producer receives 100 percent of 
the costs of adopting or maintaining management practices, 100 
percent of the costs of maintaining land-based structural 
practices and 75 percent of the cost of adopting new land-based 
structural practices. To encourage increased conservation, the 
total of the base rate plus costs cannot exceed 75 percent of 
the maximum payment under the applicable tier. To ensure that 
practices focus on land-based management practices, payments 
are not provided for the cost of purchasing equipment or for 
waste storage or treatment facilities. The payments under this 
subsection shall not duplicate payments from other conservation 
programs run by the Secretary. To be eligible for payment the 
producer must meet the requirement of commensurate share.
    Subsection (c). This subsection requires producers who must 
meet conservation requirements under USDA run farm programs, 
payments on the lands subject to those requirements cover only 
those practices that exceed the minimal requirements for the 
payments under the other programs.
    Subsection (d). This section requires the Secretary to 
issue regulations to ensure payments are made in accordance 
with the objectives of the conservation security program.
    Subsection (e). This subsection allows a producer in good 
standing to terminate a conservation security contract without 
penalty.
    Subsection (f). This subsection requires the termination of 
a conservation security contract upon transfer of ownership in 
the land under contract, unless the transferee notifies the 
Secretary in writing of his intention to continue the contract.
    Subsection (g). This subsection provides up to 20 percent 
for technical assistance.
    Subsection (h). This subsection authorizes the Secretary to 
establish a program in one eligible State for the State to run 
the conservation security program in the selected State.

Section 202. Funding

    This section provides that funds for the Conservation 
Security Program shall come from the CCC.

Section 203. Partnerships and Cooperation

    This section amends Section 1243 of the Food Security Act 
of 1985 by authorizing the Secretary to designate special 
projects to reflect local needs. Projects may focus on 
environmental concerns including water conservation, irrigation 
methods, conversion to non-irrigated crops, and nutrient 
reduction. The Secretary may enter into special agreements with 
States to specifically address local needs. The Secretary may 
provide incentives to producers to encourage participation in 
established special projects. In addition, the Secretary shall 
use five percent of EQIP funds for the same special projects.

Section 204. Administrative Requirements for Conservation Programs

    This section amends Subtitle E of title XII of the Food 
Security Act of 1985 as follows:
    Subsection (a). This subsection authorizes the Secretary to 
provide relief to producers who relied in good faith on 
inaccurate advice from an employee of the Secretary.
    Subsection (b). This subsection requires the Secretary to 
provide and coordinate administration (including contracting 
with third parties) of the conservation programs to carry out 
education, outreach, monitoring and evaluation under all 
conservation programs, including socially disadvantaged, 
beginning farmers and ranchers, Indian tribes, and limited 
resource producers.
    Subsection (c). This subsection authorizes the Secretary to 
provide special incentives to limited resource producers, 
Indian tribes and beginning farmers and ranchers.
    Subsection (d). This subsection requires the Secretary to 
maintain data to facilitate program administration.
    Subsection (e). This subsection requires the Secretary to 
offer mediation and informal hearings to producers adversely 
affected by a decision under a conservation program.
    Subsection (f). This subsection requires the Secretary to 
provide technical assistance under all conservation programs 
and authorizes the Secretary to contract directly with 
qualified third parties to provide assistance, including 
cooperative agreements with State, local or private 
organizations. This subsection requires the Secretary to 
establish criteria for third party certification and allows the 
Secretary to contract with eligible third parties to provide 
education, outreach, monitoring and evaluation and technical 
assistance. To build upon existing certification programs, the 
Secretary may grant a full or partial waiver for certification 
and fee payment for individuals accredited through an 
equivalent conservation program, as determined by the 
Secretary. The Secretary may also provide assistance to non-
private providers, but only if the provision will lead to 
increasing the base of conservation technical assistance 
provided under the conservation programs.
    Subsection (g). This subsection prohibits the Secretary 
(and other federal agencies) from releasing information 
gathered from producers through participation in conservation 
programs, including information from conservation plans, unless 
the information is provided in an aggregate form that does not 
provide information specific to individual producers.
    Subsection (h). This subsection requires the Secretary to 
work with Indian tribes to ensure, to the maximum extent 
possible, that conservation programs are administered in a fair 
and equitable manner.

Section 205. Reform and Assessment of Conservation Programs

    This amends the Food Security Act of 1985 as follows:
    Subsection (a). This subsection requires the Secretary to 
develop a plan for coordinating conservation programs to ensure 
better implementation and delivery. It specifically requires 
the Secretary to improve delivery of programs for Indian 
tribes, including coordinating with the Secretary of the 
Interior.
    Subsection (b). This subsection requires the Secretary to 
issue a report on the plan developed in subsection (a) no later 
than 180 days after the enactment of this bill.
    Subsection (c). This subsection requires the Secretary to 
prepare a plan and budget for implementing the appraisal of the 
soil, water and related resources contained in the National 
Conservation Program. The Secretary must provide the plan to 
Congress within 180 days after the enactment of this bill and 
to provide Congress with a status report on the National 
Conservation Program plan by April 30, 2005.

Section 206. Conservation Security Program Regulations

    This subsection requires the Secretary to begin working on 
implementation of the Conservation Security Program immediately 
upon enactment of this legislation.

Section 207. Conforming Amendments

    This section amends chapter 1 of subtitle D of title XII of 
the Food Security Act of 1985 by renaming the Environmental 
Conservation Acreage Reserve Program (ECARP) the Comprehensive 
Conservation Enhancement Program (CCEP).

Section 211. Comprehensive Conservation Enhancement Program (CCEP)

    Subsection (a). This subsection authorizes CCEP (replacing 
ECARP) through 2006.
    Subsection (b). This subsection provides that priority 
under programs should go to areas that would facilitate the 
most rapid completion of on-going projects.
    Subsection (c). This subsection provides funding for 
conservation programs, including technical assistance, through 
fiscal year 2006.

Section 212. Conservation Reserve Program (CRP)

    This section amends Chapter 4 of Subtitle D of Title XII of 
the Food Security Act of 1985.
    Subsection (a). This subsection extends the CRP through 
fiscal year 2006.
    Subsection (b). This subsection limits enrollment of highly 
erodible lands that do not have a cropping history during the 
last 3 of 6 years. This subsection also amends the continuous 
enrollment program to allow lands without a cropping history to 
be enrolled and allows full tracts of lands to be enrolled as 
buffer if more than 50 percent of the land in the tract is 
eligible for enrollment and the remaining acreage is not 
feasible to farm. It codifies the continuous sign-up program 
and Conservation Reserve Enhancement Program (CREP). It further 
extends priority enrollment of lands that would facilitate 
completion of ongoing projects.
    Subsection (c). This subsection increases the maximum 
enrollment from 36.4 million acres to 40 million acres.
    Subsection (d). This subsection authorizes the Secretary to 
extend hardwood tree contracts for 15 additional years with a 
50 percent reduction in payment.
    Subsection (e). This subsection authorizes the Pilot 
Program through 2006 for enrollment of wetland and buffer 
acreage in the CRP and modifies it to allow enrollment of 10-
acre tracts, but continues to provide payment for no more than 
five acres.
    Subsection (f). This subsection waives the requirement for 
planting hardwood trees on marginal pasture land if native 
prairie grass may be restored or maintained. It further allows 
haying and grazing for management purposes for lands enrolled 
through the CREP and the continuous sign-up program. It further 
prohibits landowners with lands enrolled in CRP from breaking 
out new highly erodible lands without a cropping history unless 
the land is being used as a homestead or a building site at the 
time of purchase of the land.
    Subsection (g). This subsection authorizes the Secretary to 
permit wind turbines on lands enrolled in the CRP with the 
exception of lands enrolled through the continuous sign-up or 
CREP.
    Subsection (h). This subsection requires the Secretary to 
provide full and equal signing and practice incentive payments 
on all lands enrolled through CREP and continuous CRP sign-up 
(at the highest rate currently paid).
    Subsection (i). This subsection excludes lands enrolled in 
the CREP and continuous sign-up program from being included in 
the 25 percent cap on lands enrolled in a county.
    Subsection (j). This subsection requires the Secretary to 
provide Congress with a report on the economic impacts of the 
CRP on rural communities no later than 270 days after 
enactment.

Section 213. Wetlands Reserve Program (WRP)

    This section amends the Food Security Act of 1985.
    Subsection (a). This subsection amends the provision on 
funding to include technical assistance.
    Subsection (b). This subsection raises the total acreage 
cap by 1.25 million acres and requires the Secretary to enroll 
250,000 acres annually, to the maximum extent possible.
    Subsection (c). This subsection reauthorizes the WRP 
through fiscal year 2006.
    Subsection (d). This subsection authorizes the Secretary to 
enroll up to 25,000 acres annually in a Wetlands Reserve 
Enhancement Program. The Wetlands Reserve Enhancement Program 
authorizes the Secretary to coordinate with State and local 
governments and private organizations to focus resources on 
critical environmental needs.
    Subsection (e). This subsection authorizes the use of 
technical assistance to include monitoring and maintenance.

Section 214. Environmental Quality Incentives Program (EQIP)

    This amends the Food Security Act of 1985.

Section 1240. Purposes

    This subsection defines the purposes of EQIP.

Section 1240A. Definitions

    This section provides the definition of terms used in EQIP.

Section 1240B. Establishment and Administration of Environmental 
        Quality Incentives Program

    Subsection (a). This subsection reauthorizes EQIP through 
fiscal year 2006 to allow the Secretary to provide technical 
assistance, cost-share, and incentive payments to eligible 
producers, defines the eligible practices, and authorizes the 
Secretary to provide education to producers.
    Subsection (b). This subsection changes the minimum 
contract length to three years (from five years), but limits 
the number of contracts for structural practice involving 
livestock nutrient management to one contract during the fiscal 
years 2002-2006.
    Subsection (c). This subsection requires the Secretary to 
establish a process for selecting applications and eliminates 
bidding down of their contracts.
    Subsection (d). This subsection provides for up to 75 
percent cost share for practices in general, but provides cost-
share assistance of 90 percent to limited resource and 
beginning producers.
    Subsection (e). This subsection authorizes the Secretary to 
provide incentives to producers.
    Subsection (f). This subsection authorizes the Secretary to 
provide technical assistance, including provision of payment to 
a producer to get third party technical assistance. This 
subsection also provides special certification provisions for 
technical assistance under EQIP.
    Subsection (g). This subsection provides terms and 
conditions for modification or termination of EQIP contracts.

Section 1240C. Evaluation of Offers and Payments

    Subsection (a). Provides priority for accepting offers 
under EQIP.

Section 1240D. Duties of Producers

    This section provides the duties of the participating 
producers, including implementing a conservation plan.

Section 1240E. Environmental Quality Incentives Program Plan

    Subsection (a). This subsection requires producers to 
submit a plan to be eligible for payments under EQIP.
    Subsection (b). This subsection requires the Secretary to 
eliminate duplication in planning.

Section 1240F. Duties of the Secretary.

    This subsection spells out the obligations of the 
Secretary.

Section 1240G. Limitation of Payments

    The legislation provides cost-share assistance to all 
producers, including all livestock producers and increases the 
total amount a producer may receive under a contract to 
$150,000, with an annual limit of $50,000. The Secretary must 
make all efforts to ensure that payment limitations are 
followed.

Section 1240H. Conservation Innovation Grants

    Subsection (a). This authorizes the Secretary to provide up 
to $100 million annually for fiscal years 2003-2006, in 
conservation innovation grants.
    Subsection (b). This subsection authorizes the Secretary to 
award grants under subsection (a) to governmental and non-
governmental organizations on a competitive basis.
    Subsection (c). This subsection limits federal cost-share 
to 50 percent.
    Subsection (d). This subsection requires that unused funds 
be available for use under EQIP.
    This subsection provides the following funding levels for 
EQIP: for fiscal year 2002: $500 million; for fiscal year 2003: 
$1.05 billion; for fiscal year 2004: $1.2 billion; for fiscal 
year 2005: $1.2 billion; and for fiscal year 2006: $1.25 
billion.
    Section (c). Reimbursements. This section amends Section 11 
of the Commodity Credit Corporation Charter Act to allow 
funding for conservation technical assistance.
    This section amends Subtitle H of title XV of the 
Agriculture and Food Act of 1981 as follows:

Section 1528. Definitions

    This section defines term used in this section.

Section 1529. Resource Conservation and Development Program

    This section permanently authorizes the Resource 
Conservation and Development program.

Section 1530. Selection of Designated Areas

    This section authorizes the Secretary to designate areas 
for assistance.

Section 1531. Powers of the Secretary

    This section authorizes the Secretary to provide technical 
and financial assistance and enter into agreements with the 
councils.

Section 1532. Eligibility; Terms and Conditions

    Subsection (a). This subsection authorizes the Secretary to 
provide assistance for carrying out an approved project if 
specific criteria are met, at the discretion of the Secretary.
    Subsection (b). This subsection authorizes the Secretary to 
provide loans.
    Subsection (c). This subsection requires provision of 
assistance conditioned on approval of a plan by the Secretary.
    Subsection (d). This subsection allows the Secretary to 
withdraw assistance.
    Subsection (e). This subsection allows the Councils to 
obtain outside assistance.

Section 1533. Resource Conservation and Development Policy Advisory 
        Board

    Subsection (a). This subsection requires the Secretary to 
establish a resource conservation and development policy 
advisory board.
    Subsection (b). This subsection provides for the 
composition of the board in subsection (a).
    Subsection (c). This subsection provides for the duties of 
the board.

Section 1534. Evaluation of Program

    Subsections (a) and (b). These subsections require the 
Secretary to evaluate the program and provide Congress with a 
report no later than June 30, 2005.

Section 1535. Limitation of Assistance

    This section limits the number of councils to 450.

Section 1536. Supplemental Authority of the Secretary

    This section authorizes the Secretary to retain additional 
authorities beyond what is provided in this section.

Section 1537. Authorization of Appropriations

    Subsections (a), (b) & (c). This subsection authorizes 
appropriations of sums necessary to carry out the program and 
up to $15,000,000 for loans.

Section 216. Wildlife Habitat Incentives Program

    This section amends Chapter 5 of subtitle D of title XII of 
the Food Security Act of 1985 as follows:

Section 1240M. Wildlife Habitat Incentive Program

    Subsection (a). This subsection defines the terms used in 
this section.
    Subsection (b). This subsection establishes the wildlife 
habitat incentive program.
    Subsection (c). This subsection reauthorizes the provisions 
for cost-share and requires the Secretary to reserve not less 
than 15 percent of funds for projects focusing on threatened 
and endangered species.
    Subsection (d). This subsection authorizes a pilot program 
to use up to 15 percent of the available funds to enroll lands 
for 15 years or longer for critical habitat or species.
    Subsection (e). This subsection provides for funding. For 
fiscal year: 2002: $50 million; for fiscal year 2003: $100 
million; for fiscal year 2004: $100 million; for fiscal year 
2005: $125 million; and for fiscal year 2006: $125 million.

Section 1240N. Watershed Risk Reduction

    This section amends the Food Security Act of 1985 as 
follows:
    Subsection (a). This subsection authorizes the Secretary to 
provide assistance, including the ability to purchase flood 
plain easements, in watersheds impaired by natural occurrences 
in order to safeguard lives and property.
    Subsection (b). This subsection requires the Secretary to 
give priority to impacted areas adjacent to a major river.
    Subsection (c). This subsection prohibits use of funds for 
the same projects from any Federal disaster relief program.
    Subsection (d). This subsection authorizes the 
appropriation of $15,000,000 annually for each of the fiscal 
years 2002 through 2006.

Section 1240O. Great Lakes Basin Program for Soil Erosion and Sediment 
        Control

    This section amends the Food Security Act of 1985 as 
follows:
    Subsection (a). This subsection authorizes the Secretary to 
carry out the Great Lakes Basin Program for Soil Erosion and 
Sediment Control.
    Subsection (b). This subsection authorizes the Secretary to 
provide grants, technical assistance, and education programs.
    Subsection (c). This subsection authorizes the 
appropriation of $5,000,000 annually for each of the fiscal 
years 2002 through 2006.

Section 1240P. Conservation of Private Grazing Land Initiative (CPGL)

    This section amends the Food Security Act of 1985 by 
reauthorizing the CPGL through fiscal year 2006 for $60 million 
annually.

Section 217. Farmland Protection Program (FPP)

    Subsection (a). This section amends Chapter 2 of the Food 
Security Act of 1985 as follows:

Section 1238H. Definitions

    This section provides for definition of terms used in FPP. 
It expands FPP to allow private non-profit organizations to 
participate.

Section 1238I. Farmland Protection

    Subsections (a) and (b). These subsections establish FPP 
and also establish the requirement that highly erodible land 
have a conservation plan.
    This subsection authorizes the Secretary to use up to $10 
million annually for Farm Viability Grants for participating 
farms and ranches to develop business plans.
    Subsection (b). This subsection provides for program 
funding of $150 million for fiscal year 2002; $200 million for 
fiscal years 2003 and 2004; $225 million for fiscal year 2005; 
and $250 million for fiscal year 2006.
    Subsection (c). This subsection repeals FPP from the 1996 
FAIR Act.

Section 218. Grassland Reserve Program (GRP)

    This section amends Chapter 2 of the Food Security Act of 
1985.

Section 1238N. Grassland Reserve Program

    Subsection (a). This subsection establishes a new Grassland 
Reserve Program.
    Subsection (b). This subsection provides for enrollment of 
up to 2 million acres of natural grassland through 30-year and 
permanent easements and 30-year rental agreements.
    Subsection (c). This subsection makes eligible natural 
grassland that can be restored or protected.

Section 1238O. Easements or Agreements

    Subsection (a). This subsection sets out the requirements 
for a landowner to participate in the program.
    Subsection (b). This subsection provides for allowed and 
prohibited practices.
    Subsection (c). This subsection provides for ranking of 
applications.
    Subsection (d). This subsection provides the terms for 
restoration of grass or shrubland.
    Subsection (e). This subsection provides for terms or 
conditions upon violation of an easement or restoration 
agreement.

Section 1238P. Duties of Secretary

    Subsection (a)-(e). These subsections provide for the 
duties of the Secretary, including rental and easement 
payments, provision of technical assistance, and payment for 
cost of restoration.
    Subsection (f). This subsection allows for payments from 
additional federal programs.
    Subsection (g). This subsection requires the Secretary to 
issue regulations.
    (b) Funding. This section provides for funding from the 
Commodity Credit Corporation.

Section 219. State Technical Committees

    This section amends Subtitle G of title XII of the Food 
Security Act of 1985.

Section 1261. Establishment

    Subsection (a). This subsection requires the Secretary to 
establish in each State a technical committee.
    Subsection (b). This subsection requires the Secretary to 
develop standards for the technical committees.
    Subsection (c). This subsection describes the composition 
of the State technical committees.

Section 1262. Responsibilities

    Subsection (a). This subsection requires the technical 
committees to provide recommendations to the Secretary and 
provide for public participation at meetings.
    Subsection (b). This subsection provides for duties and 
responsibilities of the technical committees.
    Subsection (c). This subsection provides for the advisory 
capacity of the committees.
    Subsection (d). This subsection provides that the technical 
committees shall be exempt from FACA (this is current law).
    Subsection (e). This subsection provides for the 
establishment and responsibilities of subcommittees.

Section 220. Use of Symbols, Slogans, and Logos

    This section amends the 1996 Farm Bill to authorize the 
Secretary to use, license or transfer symbols, slogans and 
logos of the Department and use all revenues to carry out 
conservation programs.

                            TITLE III--TRADE


                               Subtitle A


Section 301. U.S. Policy

    This section amends the Agricultural Trade Development and 
Assistance Act by adding conflict resolution as a policy 
objective for U.S. food aid programs.

Section 302. Provision of Agricultural Commodities

    This section amends Section 202(b) of the Agricultural 
Trade Development and Assistance Act as follows:
    Program Diversity--In paragraph (1), the Administrator of 
the U.S. Agency for International Development is required to 
consider proposals for PL-480, Title II projects that address 
any of the program objectives established in law, including 
famine, malnutrition, economic and community development, sound 
environmental practices, and feeding programs.
    Paragraph (2) changes the amount of administrative expenses 
that may be compensated for such projects from a dollar range 
($10 million to $28 million) to a range of percentages (between 
5 and 10 percent) of the value of commodities used.
    Certified Institutional Partners--Paragraph (3) requires 
the Administrator of US-AID or the Secretary to develop 
regulations to permit private voluntary organizations (PVO's) 
to be certified as institutional partners by providing evidence 
of their organizational capacity. Once certified, such PVO's 
would be eligible to submit a single proposal for programs in 
countries in which such capacity has been documented, and 
receive expedited review.

Section 303. Generation and Use of Currencies by Private Voluntary 
        Organizations and Cooperatives

    This section amends the Agricultural Trade Development and 
Assistance Act by permittingproceeds of sales of commodities 
for Title II food aid projects to be denominated in currencies other 
than the local currency. Such sales may be conducted in one or more 
countries.

Section 304. Levels of Assistance

    This section amends the Agricultural Trade Development and 
Assistance Act by increasing the minimum authorized tonnage for 
Title II from 2.025 million tons annually to 2.5 million tons 
annually by the end of the bill.
    Paragraph (2) defines crude degummed soybean oil as an 
eligible value-added commodity for shipment under Title II non-
emergency programs.

Section 305. Food Aid Consultative Group

    This section amends the Agricultural Trade Development and 
Assistance Act by clarifying what kinds of documents governing 
the program must be reviewed by the consultative group.
    Paragraph (3) extends the authority for the group for the 
life of the farm bill.

Section 306. Maximum Level of Expenditures

    This section amends the Agricultural Trade Development and 
Assistance Act by raising the cap on food aid spending under 
that Act from $1 billion annually to $2 billion annually.

Section 307. Administration

    This section amends Section 207(a) of the Agricultural 
Trade Development and Assistance Act as follows:
    Recipient Countries--Paragraph (1) requires that proposals 
for non-emergency food aid projects identify the country or 
countries in which the project is to be conducted. It also 
requires the Administrator of US-AID to act on project 
proposals within 120 days of submission.
    Paragraph (2) adds guidelines to the type of documents 
which US-AID must submit to the Federal Registry for public 
comment.
    Paragraph (3) permits PVO's to directly schedule delivery 
of commodities under approved agreements from the Commodity 
Credit Corporation.
    Timely Approval--Paragraph (4) adds at the end of Section 
207 a new subsection which requires the Administrator to 
finalize program agreements before the beginning of each fiscal 
year, and submit a report on those approvals to the appropriate 
Congressional Committees no later than December 1 of that 
fiscal year.
    Direct Delivery--Under paragraph (5), in addition to other 
established practices, the Secretary may approve direct 
delivery of eligible commodities to mills or other processing 
facilities in recipient countries which are majority-owned by 
U.S. citizens. The proceeds of such transactions are to be 
transferred to eligible organizations to carry out approved 
projects

Section 308. Assistance for Stockpiling and Rapid Transportation, 
        Delivery, and Distribution of Shelf-stable Pre-Packaged Foods

    This section amends the Agricultural Trade Development and 
Assistance Act by extending this program through 2006. Under 
this provision, the Administrator may make grants to eligible 
organizations to prepare and store shelf-stable prepackaged 
foods for carrying out food aid projects. This program is 
authorized for appropriations at $3 million annually.

Section 309. Sales Procedure

    This section amends Section 403 of the Agricultural Trade 
Development and Assistance Act by adding the following:
    In General--Paragraph (1) requires that sales of 
commodities for food aid projects conducted under Section 
416(b) of the Agricultural Act of 1949, and section 1110 of the 
Food for Progress Act avoid disruption of local farmers and 
markets.
    Currencies--Paragraph (2) allows commodities to be 
monetized in dollars or other currencies under Title II 
programs.
    Sale Price--Paragraph (3) requires that sales be made at 
prices that are reasonable for that particular market, as 
determined by the Administrator or Secretary, as appropriate.

Section 310. Prepositioning

    This section amends the Agricultural Trade Development and 
Assistance Act by extending the Administrator's authority to 
use funds to store commodities in locations that are more 
convenient for quick shipment under emergency conditions.

Section 311. Expiration Date

    This section amends the Agricultural Trade Development and 
Assistance Act by extending the authority for appropriations 
for projects and assistance under Titles I and II of PL-480.

Section 312. Micronutrient Fortification Program

    Paragraphs (1) and (2) section amends the Agricultural 
Trade Development and Assistance Act by ending this program's 
pilot status.
    Paragraph (3) extends the program until 2006.

Section 313. Farmer to Farmer Program

    This section amends the Agricultural Trade Development and 
Assistance Act by increasing the share (from 0.4 percent to 0.5 
percent) of Title I and Title II funding which can be assigned 
for support of this program. Paragraph (2) extends the 
authority for the Farmer-to-Farmer program, which funds 
technical exchanges between U.S. farmers and farmers in 
developing countries.

                               Subtitle B


Section 321. Export Credit Guarantee Program

    This section amends the Agricultural Trade Act as follows:
    Term of Supplier Credit--Subsection (a) extends the 
potential length of loans under the Supplier Credit Program 
from 6 months to 12 months.
    Processed and High-Valued Products--Subsection (b) extends 
through 2006 the requirement that not less than 35 percent of 
products exported under U.S. agricultural export credit 
programs be processed or high-valued products.
    Report--Subsection (c) requires the Secretary to submit an 
annual report to the appropriate Congressional Committees on 
the status of multilateral negotiations on agricultural export 
credit programs under the auspices of the Organization for 
Economic Cooperation and Development. Such negotiations have 
been held in keeping with Article 10.2 of the Uruguay Round 
Agreement on Agriculture. The report shall be submitted in 
unclassified form, but may contain a classified annex.
    Reauthorization--Subsection (d) extends authority for 
Export Credit Guarantee Programs through 2006.

Section 322. Market Access Program

    This section amends the Agricultural Trade Act of 1978 as 
follows:
    In general--Subsection (a) increases funding for the Market 
Access Program, at the following levels: not less than $100 
million for fiscal year 2002, $120 million for fiscal year 
2003, $140 million for fiscal year 2004, $160 million for 
fiscal year 2005, and $190 million for fiscal year 2006.
    Program priorities--Paragraph (2) establishes priority for 
new program participants and programs in emerging markets for 
amounts available above existing level of $90 million.
    United States Quality Export Initiative--Subsection (b) 
contains findings, including that: (1) the market access 
program and foreign market development program target generic 
and value-added agricultural products, with little emphasis on 
the high quality of a United States product; and (2) new 
promotional tools are needed to enable United States products 
to compete in higher margin, international markets on the basis 
of quality.
    Paragraph (2) creates a quality export initiative program 
under which the Secretary develops program under which, on a 
competitive basis, several high-quality U.S. agricultural 
products are identified. U.S. agricultural products so 
identified will be permitted to carry the `U.S. Quality' seal, 
and promoted at trade fairs and through electronic and print 
media. This initiative is subject to the availability of 
appropriations.

Section 323. Export Enhancement Program

    This section amends the Agricultural Trade Act of 1978 by 
extending the Export Enhancement Program through 2006. 
Subsection (a) makes up to $478 million available annually from 
the Commodity Credit Corporation for the purpose of encouraging 
commercial sales of U.S. agricultural commodities.
    Unfair Trade Practices--Subsection (b) expands the 
definition of unfair trade practices to include defines 
exchange rate manipulation by competing exporters and 
questionable pricing practices by State trading enterprises. 
Under the Act, use of such practices by competing exporters may 
trigger use of the Export Enhancement Program, although it is 
not limited to such purposes.

Section 324. Foreign Market Development Cooperator Program

    This section amends the Agricultural Trade Act of 1978 by 
increasing funds available to the Foreign Market Development 
Cooperator Program out of mandatory money at the following 
levels: $37.5 million for fiscal year 2002, $40 million for 
fiscal year 2003, $42.5 million for fiscal year 2004 and 
subsequent years.
    Program Priorities--Subsection (b) establishes priority for 
new program participants and programs in emerging markets for 
amounts available above $35 million.

Section 325. Food for Progress and Education Programs

    This section amends the Agricultural Trade Act of 1978 by 
adding a Food for Progress and Education Program title at the 
end of the statute, as follows:

Section 801 includes definitions

    Food for Progress and Education Programs. Section 802 
authorizes these programs under which donated commodities are 
provided to eligible organizations which agree to conduct 
development projects in recipient countries. It establishes the 
Food for Progress Program, which may be entered into with the 
following organizations--
          (1) governments of emerging democracies;
          (2) private voluntary organizations;
          (3) nonprofit agricultural organizations and 
        cooperatives;
          (4) intergovernmental organizations; and
          (5) other private entities.
    Considerations--Subsection (b) requires the Secretary to 
examine an emerging agricultural country before approving 
program agreements, including the following determinations:
    (1) whether or not the country is committed to providing 
economic freedom; (2) whether or not the country carries out 
policies which promote private production of food for domestic 
consumption; and (3) whether or not the country is committed to 
the creation and expansion of efficient domestic markets for 
the purchase and sales of those commodities.
    International Food for Education and Nutrition Program--
This program is established in subsection (c), under which the 
Secretary may provide agricultural commodities and technical 
assistance in connection with education programs in recipient 
countries.
    Paragraph (2) provides the Secretary the authority to enter 
into agreements with eligible organizations to purchase, 
acquire and donate commodities and to provide technical and 
nutritional assistance.
    Under paragraph (3), the Secretary is required to encourage 
other donor countries to contribute goods and funds and provide 
technical and nutritional assistance to recipient countries.
    Paragraph (4) urges the President and Secretary to 
encourage private sector participation in this program.
    Paragraph (5) includes a graduation provision, in order to 
determine how benefits could be sustained in a recipient 
country when the program terminates.
    Paragraph (6) requires the Secretary to report to the 
appropriate Congressional Committees on the results of 
implementing this section, and the level of commitment by other 
donor countries to the program.
    Terms--In subsection (d), the Secretary may provide 
agricultural commodities under this title either on a grant 
basis or on credit terms. Credit is established on the same 
basis as under PL- 480, Title I concessional financing of 
agricultural exports.
    Paragraph (3) bars making commodities available under this 
section if such action will reduce the amount of the commodity 
that is traditionally made available for domestic feeding 
programs.
    Reports--Subsection (e) requires eligible organizations 
with agreements under this title to submit reports to the 
Secretary containing such information as is required relating 
to the use of commodities and funds provided for said 
agreements.
    Coordination--Subsection (f) requires that assistance under 
this title shall be coordinated with other forms of foreign 
assistance under the mechanism designated by the President.
    Quality Assurance--Subsection (g) requires the Secretary to 
ensure that each eligible organization is optimizing the use of 
donated commodities, as follows: (1) taking into account the 
needs of target populations in recipient countries; (2) working 
with recipient countries and institutions or groups within 
those countries to design mutually acceptable programs; (3) 
monitor and report on distribution and sale of eligible 
commodities using accurate and timely reporting methods;
    (4) periodically evaluate the eligible organization's 
program effectiveness; and (5) consider means of improving 
program operation.
    Paragraph (2) requires the Secretary to develop regulations 
to permit PVO's to be certified as institutional partners by 
providing evidence of their organizational capacity. Once 
certified, such PVO's would be eligible to submit a single 
proposal for programs in countries in which such capacity has 
been documented, and receive expedited review. The Secretary is 
encouraged to enter into multi-year agreements, if commodities 
are available and all other requirements of the program have 
been satisfied.
    Transshipment and Re-Sale--In subsection (h), transshipment 
or re-sale within a country other than a recipient country are 
prohibited unless approved by the Secretary.
    Under paragraph (2), eligible commodities may be sold or 
bartered only with the Secretary's approval within the 
recipient country or a nearby country. If the Secretary 
determines that such sales are not practicable, he or she may 
permit sales or barters within other countries if such sales 
will not disrupt commercial markets for the agricultural 
commodities involved. The Secretary may authorize the use of 
proceeds to reimburse costs incurred by an eligible 
organization for the following purposes: (1) programs targeted 
at hunger and malnutrition; (2) development programs involving 
food security or education; (3) transportation, storage, and 
distribution of eligible commodities; and (4) administration, 
sales, monitoring, and technical assistance.
    As appropriate, the Secretary may provide commodities in a 
manner that will encourage development of private sector market 
infrastructure.
    Displacement of Commercial Sales--Under subsection (i), to 
the maximum extent practicable, the Secretary is required to 
avoid: (1) displacing commercial sales of U.S. commodities; (2) 
disrupting world agricultural prices; or (3) disrupting normal 
commercial trade patterns.
    Deadline for Program Announcements--In subsection (j), the 
Secretary is required to make program agreements and 
allocations and announce them before the beginning of each 
fiscal year (to the maximum extent practicable).
    Paragraph (2) requires the Secretary to submit a list of 
those allocations to the appropriate Congressional Committees 
not later than November 1.
    Program Limitations--In subsection (k), agricultural 
commodities shall be made available under this title without 
regard to political, geographic, ethnic, or religious identity 
of the recipient.
    In paragraph (2), the Secretary is barred from providing 
commodities under any agreement that requires or permits the 
distribution or handling of those commodities by any military 
forces, except when non-military channels are not available and 
the Secretary deems that conditions require such distributions 
occur.
    In paragraph (3), the Secretary is required to encourage 
all parties in such a conflict to permit safe passage for 
movement of relief supplies and safe zones for treatment and 
evacuation of wounded persons.
    Budget--Under subsection (l) , the cost of commodities and 
related expenses under this title shall be in addition to the 
level of assistance provided under the Agricultural Trade 
Development and Assistance Act.
    Paragraph (2) precludes such spending from being considered 
expenditures for international affairs and finance.
    Commodity Credit Corporation--Under subsection (m), funds, 
facilities, and authorities of the Commodity Credit Corporation 
may be used to carry out this title.
    Paragraph (2) provides for a minimum tonnage of 400,000 
metric tons per year for this title.
    Paragraph (3) allows additional funds to be appropriated 
for this title.
    Paragraph (4) permits the Corporation to use funds 
appropriated for Title I programs to carry out this title.
    Paragraph (5) allocates no more than $200,000,000 of 
available funds for each fiscal year to be used to carry out 
the International Food for Education and Nutrition Program. 
Tons not allocated by June 30 of each fiscal year shall be made 
available for proposals under Food for Progress.
    Paragraph (6) allows commodities to be purchased for this 
program only if CCC inventories are insufficient to satisfy 
commitments under approved agreements.
    Under Paragraph (7), the Secretary is authorized to pay the 
following costs for the program: (1) acquisition; (2) packaging 
and fortifying the commodity; (3) processing and handling 
before f.o.b. delivery; (4) ocean freight; (5) transport costs 
for landlocked or otherwise inaccessible countries; (6) 
transportation costs for moving commodities from designated 
points of entry to storage and distribution sites; (7) internal 
transport costs for the International Food for Education and 
Nutrition program for recipient countries which are also low-
income net food-importing countries and have demonstrated a 
commitment to education; (8) charges for general average 
contributions arising out of the ocean transport of commodities 
transferred; and (9) assistance for administration, monitoring, 
and technical assistance.
    Except for the costs of acquiring the commodities, these 
costs may not exceed $80 million per year.
    Conforming Amendment--Subsection (n) repeals section 1110 
of the Food Security Act of 1985.

Section 326. Exporter Assistance Initiative

    This section amends the Agricultural Trade Act of 1978, and 
contains findings in subsection (a), including the following: 
(1) information in the possession of Federal agencies other 
than USDA that is necessary for the export of agricultural 
products is available only from multiple, disparate sources; 
and (2) because exporters often need access to information 
quickly, exporters lack the time to search multiple sources to 
access necessary information, and exporters often are unaware 
of where the necessary information can be located.
    Under subsection (b), the Secretary is required to develop 
a website that collects all pertinent information from the 
agencies of the Federal government to assist aspiring 
agricultural exporters learn all they need to know about 
getting started. Authorization of appropriations is provided, 
at the following levels: $1 million for fiscal years 2002 
through 2004, and $500 thousand for fiscal years 2005 and 2006.

                               Subtitle C


Section 331. Emerging Markets

    This section amends the Food, Agriculture, Conservation and 
Trade Act of 1990, by extending this program through 2006. This 
program which offers funding for technical assistance for 
developing market infrastructure in new market economies, such 
as the countries of the Former Soviet Union.

Section 332. Biotechnology and Agricultural Trade Program

    This section amends the Food, Agriculture, Conservation and 
Trade Act of 1990 by establishing a program in USDA intended to 
assist exporters.
    Paragraph (2) establishes the focus of the program, 
exporters facing market access, regulatory, and marketing 
problems in exporting biotech-based products.
    Paragraph (3) determines that U.S. market development 
organizations concerning biotechnology shall target the 
following foreign groups: producers, buyers, consumers, media, 
government officials, scientists, and trade officials. This 
support may be used through the following programs: (1) the 
emerging markets program; (2) the Cochran Fellowship; or (3) 
the Foreign Market Development Program.
    Under paragraph (4), the Secretary shall assist exporters 
of agricultural commodities in situations in which exporters 
are harmed by unwarranted and arbitrary barriers to trade due 
to marketing of biotechnology products, food safety, disease, 
or other sanitary or phytosanitary concerns. These activities 
are authorized appropriations of $1 million for fiscal years 
2002 through 2006.
    Under paragraph (5), CCC funding shall be available at $15 
million for each of fiscal years 2002 through 2006, except for 
paragraph (4).

Section 333. Surplus Commodities for Developing or Friendly Countries

    This section amends Section 416(b) of the Agricultural Act 
as follows:
    Use of Currencies--Subsection (a) permits sales of eligible 
commodities in recipient countries to be transacted in 
currencies other than the local currency.
    Implementation of Agreements--Under subsection (b), in 
addition to other established practices, the Secretary may 
approve direct delivery of eligible commodities to mills or 
other processing facilities in recipient countries which are 
majority-owned by U.S. citizens. The proceeds of such 
transactions are to be transferred to eligible organizations to 
carry out approved projects.
    Certified Institutional Partners--Requires the Secretary 
under subsection (c) to develop regulations to permit private 
voluntary organizations (PVO's) to be certified as 
institutional partners by providing evidence of their 
organizational capacity. Once certified, such PVO's would be 
eligible to submit a single proposal for programs in countries 
in which such capacity has been documented, and receive 
expedited review.

Section 334. Bill Emerson Humanitarian Trust

    This section extends the Bill Emerson Humanitarian Trust 
Act through 2006. The Act provides for government purchase and 
storage of up to 4 million tons of commodities to maintain a 
food security reserve.

Section 335. Agricultural Trade with Cuba

    This section amends the Agriculture, Rural Development, 
Food and Drug Administration and Related Agencies 
Appropriations Act, 2001, by striking restrictions on private 
financing of sales of food and medicine to Cuba.

Section 336. Sense of Congress Resolution Concerning Agricultural Trade

    This section establishes Congressional priorities and 
concerns for bilateral and multilateral agricultural trade 
negotiations, as follows:
    Agricultural Trade Negotiating Objectives--Subsection (a) 
establishes the sense of Congress that the principal 
negotiating objective of the United States with respect to 
agricultural trade in all multilateral, regional, and bilateral 
negotiations is to obtain competitive opportunities for the 
export of United States agricultural commodities in foreign 
markets substantially equivalent to the competitive 
opportunities afforded foreign exports in United States markets 
and to achieve fairer and more open conditions of agricultural 
trade in bulk and value-added commodities by--
          (1) reducing or eliminating, by a date certain, 
        tariffs or other charges that decrease market 
        opportunities for exports of United States agricultural 
        commodities, giving priority to products that are 
        subject to significantly higher tariffs or subsidy 
        regimes of major producing countries;
          (2) immediately eliminating all export subsidies on 
        agricultural commodities while maintaining bona fide 
        food aid and preserving United States agricultural 
        market development and export credit programs that 
        allow the United States to compete with other foreign 
        export promotion efforts;
          (3) leveling the playing field for United States 
        agricultural producers by disciplining domestic 
        supports such that no other country can provide greater 
        support, measured as a percentage of total agricultural 
        production value, than the United States does while 
        preserving existing green box category to support 
        conservation activities, family farms, and rural 
        communities;
          (4) developing, strengthening, and clarifying rules 
        and effective dispute settlement mechanisms to 
        eliminate practices that unfairly decrease United 
        States market access opportunities for United States 
        agricultural commodities or distort agricultural 
        markets to the detriment of the United States, 
        including--
                   unfair or trade-distorting 
                activities of State trading enterprises and 
                other administrative mechanisms, with emphasis 
                on--
                   requiring price transparency in the 
                operation of State trading enterprises and such 
                other mechanisms; and
                   ending discriminatory pricing 
                practices that amount to de facto export 
                subsidies so that the enterprises or other 
                mechanisms do not (except in cases of bona fide 
                food aid) sell in foreign markets at prices 
                below domestic market prices or prices below 
                the full costs of acquiring and delivering 
                agricultural products to the foreign markets;
                   unjustified trade restrictions or 
                commercial requirements affecting new 
                technologies, including biotechnology;
                   unjustified sanitary or 
                phytosanitary restrictions, including 
                restrictions that are not based on scientific 
                principles, in contravention of the Uruguay 
                Round Agreements;
                   other unjustified technical barriers 
                to trade; and
                   restrictive and nontransparent rules 
                in the administration of tariff rate quotas;
          (5) improving import relief mechanisms to recognize 
        the unique characteristics of perishable agriculture;
          (6) taking into account whether a party to the 
        negotiations has--
                   failed to adhere to the provisions 
                of an existing bilateral trade agreement with 
                the United States; or
                   circumvented obligations under a 
                multilateral trade agreement to which the 
                United States is a signatory; or
                   manipulated its currency value to 
                the detriment of United States agricultural 
                producers or exporters; and
          (7) otherwise ensuring that countries that accede to 
        the World Trade Organization--
                   have made meaningful market 
                liberalization commitments in agriculture; and
                   make progress in fulfilling those 
                commitments over time.
    Priority for Agriculture Trade.--Subsection (b) further 
establishes that it is the sense of Congress that: (1) reaching 
a successful agreement on agriculture should be the top 
priority of United States negotiators in World Trade 
Organization talks; and (2) if the primary competitors of the 
United States do not reduce their trade distorting domestic 
supports and eliminate export subsidies in accordance with the 
negotiating objectives expressed in this section, the United 
States should take steps to increase the leverage of United 
States negotiators and level the playing field for United 
States producers in order to improve United States farm income 
and to encourage United States competitors to eliminate export 
subsidies and domestic supports that are harmful to United 
States farmers and ranchers.
    Consultation with Congressional Committees.--Subsection (C) 
establishes the sense of Congress that:
    (1) Before the United States Trade Representative 
negotiates a trade agreement that would reduce tariffs on 
agricultural products or require a change in United States 
agricultural law, the United States Trade Representative shall 
consult with the Committee on Agriculture, Nutrition and 
Forestry and the Committee on Finance of the Senate and the 
Committee on Agriculture and the Committee on Ways and Means of 
the House of Representatives.
    (2) Not less than 48 hours before initialing an agreement 
relating to agricultural trade negotiated under the auspices of 
the World Trade Organization, the United States Trade 
Representative shall consult closely with the committees 
referred to in paragraph (1) regarding--
          (A) the details of the agreement;
          (B) the potential impact of the agreement on United 
        States agricultural producers; and
          (C) any changes in United States law necessary to 
        implement the agreement.
    (3) Any agreement or other understanding (whether verbal or 
in writing) that relates to agricultural trade that is not 
disclosed to the Congress before legislation implementing a 
trade agreement is introduced in either house of Congress shall 
not be considered to be part of the agreement approved by 
Congress and shall have no force and effect under Unites States 
law or in any dispute settlement body.

                          TITLE IV--NUTRITION


                     Subtitle A--Food Stamp Program


Section 411. Simplified definition of income

    This section allows a State option to exclude, from food 
stamp eligibility determination, certain types of income if the 
State also excludes them in its Temporary Assistance for Needy 
Families (TANF) cash assistance or Medicaid programs. It also 
allows States to exclude two infrequently received types of 
income that are disregarded in other programs, including 
certain educational benefits and ``complementary assistance'' 
(such as payments for unusual circumstances, like 
transportation for the disabled). In addition, the section 
requires that wages and salaries, social security benefits, 
regular payments from a government source, workers' 
compensation, and child support be counted as income. Finally, 
the section directs the Secretary to promulgate regulations to 
identify other sources of income that are essential to a fair 
determination of food stamp eligibility. States are not 
permitted to exclude from income calculations sources of income 
identified in USDA regulations, regardless of their TANF or 
Medicaid policies.

Section 412. Encouragement of payment of child support

    Subsection (a) allows a State option to replace the current 
deduction from income for amounts paid in child support with an 
income exclusion in the same amount.
    Subsection (b) states that a State is allowed to continue 
to provide a child support deduction, rather than an exclusion, 
and requires that if a State elects to provide a deduction, it 
must determine the deduction before computing the excess 
shelter expense deduction. The subsection also permits States 
to use information from child support enforcement agencies to 
determine the amount of child support paid and allows States to 
freeze the amount deducted or excluded for child support 
between eligibility reviews.

Section 413. Increase in benefits to households with children

    This section increases the standard deduction by tying it 
to the Federal poverty income guideline, according to household 
size and indexes it for inflation. For fiscal years 2002-2007, 
it would be 8 percent; for fiscal year 2008, 8.25 percent; for 
fiscal years 2009-2010, 8.50 percent; and for fiscal year 2011, 
9 percent. The standard deductions would not be less than those 
provided under current law, nor more than the appropriate 
applicable percentage of the poverty guideline for a household 
of six. Finally, special provisions are included to ensure that 
Guam's standard deduction level will be maintained.

Section 414. Simplified determination of housing costs

    This section simplifies the determination of housing costs 
by allowing households to claim as shelter expenses any 
housing-related money they pay to their landlord on a regular 
basis. It also requires that, instead of an excess shelter 
expense deduction, a State may elect to give homeless 
households with some shelter expenses a flat $143 a month 
deduction without extensive documentation.

Section 415. Simplified utility allowance

    This section simplifies a provision of current law that 
allows a State to determine utility expenses using a Standard 
Utility Allowance (SUA) instead of actual utility bills. The 
first simplification eliminates the current rules requiring 
that the SUA must be prorated, or disallowed, if an eligible 
household lives with another individual or family. The second 
eliminates the rule that specifies that the SUA may not be used 
by certain households in public housing whose utility costs are 
partially covered by the housing authority.

Section 416. Simplified procedure for determination of earned income

    This section creates a new State option to multiply weekly 
paychecks by four and biweekly paychecks by two to determine 
monthly income for purposes of determining eligibility and 
benefits. In States taking the option the earned income 
deduction for all households (equal to 20 percent of all earned 
income) would be lowered to ensure cost neutrality.

Section 417. Simplified determination of deductions

    This section allows States the option to disregard 
household changes in deductible expenses between scheduled 
reviews of eligibility. Two changes that may not be disregarded 
are reported changes of residence and changes in earned income.

Section 418. Simplified definition of resources

    This section creates a State option to exclude from 
eligibility determination certain types of resources if the 
State also excludes them in its Temporary Assistance for Needy 
Families (TANF) cash assistance or Medicaid programs. The 
section also prohibits States from excluding cash, money in 
accounts that are readily available to the household, or any 
other assets the Secretary believes are essential to a fair 
determination of food stamp eligibility.

Section 419. Alternative issuance systems in disasters

    This section provides the Secretary discretion to select 
the most practicable method of issuing emergency food stamps to 
disaster victims, including cash.

Section 420. State option to reduce reporting requirements

    This section allows States the option to adopt semi-annual 
reporting systems for the entire caseload, except for those 
households or groups that are exempt even from periodic 
reporting to prevent undue hardship, such as the homeless; 
migrant workers; and households where everyone is elderly and/
or disabled and has no earnings. Under semi-annual reporting, 
food stamp benefits may be frozen for six months at a time, 
with households required to report only if their income exceeds 
the program's gross income limit.

Section 421. Benefits for adults without dependents

    This section changes the time-limit for participation for 
able-bodied adults without dependents. The current law rule 
limiting their food stamp participation to three out of 36 
months without working or participating in a work program is 
changed to six out of 24 months. It also allows supervised job 
search activities to qualify as a work activity that meets the 
work requirement.

Section 422. Preservation of access to electronic benefits

    This section prohibits States from taking recipients' EBT 
accounts away from electronic access unless the account has 
been inactive for at least 180 days, or approximately six 
months. If a State does close the account it is required to 
send the household a notice informing it how to reinstate those 
benefits and offering assistance to households having a 
difficult time accessing benefits.

Section 423. Cost neutrality for electronic benefit transfer systems

    This section eliminates the current requirement that 
electronic benefit transfer (EBT) systems not cost the Federal 
Government more than paper issuance systems.

Section 424. Alternative procedures for residents of certain group 
        facilities

    This section allows States the option to provide a 
standardized monthly benefit to residents of group homes and 
substance abuse centers, rather than going through an 
individualized benefit calculation for each resident. 
Facilities that receive an allotment for a resident are to 
notify the State agency promptly if the resident leaves the 
facility. Facilities are also obligated to inform residents 
prior to their leaving the facility, that they are eligible to 
continue to participate in the Food Stamp Program and should 
contact the State immediately for information about continuing 
eligibility. An individual who leaves a facility would receive 
the standard monthly benefit for the month of and the month 
following his or her departure, unless the resident reapplies 
sooner to participate in the Food Stamp Program.

Section 425. Availability of food stamp program applications on the 
        Internet

    This section requires States that have a website for the 
State agency that administers food stamps to make Food Stamp 
Program applications available on-line in each language in 
which the State makes a printed application available.

Section 426. Simplified determinations of continuing eligibility

    This section replaces fixed certification periods in which 
a recipient is required to reapply for the Food Stamp Program 
after a specific interval with a more flexible re-determination 
process. Households would continue to be considered eligible 
until the State makes a determination that the household has 
become ineligible, needs to be reviewed, or has failed to 
cooperate in a review of its eligibility. This change is 
consistent with procedures used in other programs that assist 
low-income individuals. The section makes clear that the 
interval between re-determinations of eligibility shall not 
exceed 12 months (or 24 months for elderly or disabled 
recipients).

Section 427. Clearinghouse for successful nutrition education efforts

    This section requires the Secretary to request State 
agencies to submit to the Secretary descriptions of successful 
nutrition education programs designed for use in the food stamp 
and other nutrition assistance programs. It directs the 
Secretary to make the descriptions available on the USDA 
website and to publicize the availability of the website.

Section 428. Transitional food stamps for families moving from welfare

    This section allows a household to receive six months of 
transitional food stamp benefits following termination of TANF 
cash assistance. During the transitional period, the household 
would receive the same amount of benefits received the month 
prior to the end of TANF cash assistance, adjusted for loss of 
TANF cash assistance and any other changes that the household 
elects to report to the State agency that might increase the 
size of the benefits. The section allows re-certification to be 
postponed until the month preceding the end of the transitional 
period. Households that are sanctioned for a failure to perform 
an action required by law related to TANF cash assistance would 
be ineligible for this transitional benefit.

Section 429. Delivery of notices of adverse action to retailers

    This section allows the Secretary to advise retailers of 
adverse action by any method the Secretary determines will 
provide evidence of delivery.

Section 430. Reform of quality control system

    This section eliminates enhanced funding (bonus payments to 
States with error rates less than six percent) for performance 
after 2001. For performance in 2001, enhanced funding is 
retained at half the current level. The section requires the 
Secretary to investigate a State's administration of the Food 
Stamp Program if the Secretary determines there is a 95 percent 
statistical probability that the State is above the threshold 
of the national average error rate plus one percentage point. 
If the Secretary determines that the State agency has been 
seriously negligent (as determined under standards promulgated 
by the Secretary), then the Secretary may impose a sanction of 
up to five percent of the State's administrative funding. If 
the Secretary determines that a 95 percent statistical 
probability exists that the payment error rate of a State 
agency exceeds the national performance measure for payment 
error rates by more than one percentage point and the State 
agency was investigated or sanctioned for each of the two 
immediately preceding fiscal years, the State agency is 
penalized based on the value of over and underpayments relative 
to the threshold. This section also makes a technical 
adjustment to the formula for computing sanctions, which 
prevents individual States' sanctions from becoming more severe 
as the national average declines. The section also requires 
that the State agency to develop and implement corrective 
action plans to reduce payment errors. The Secretary is also 
required to adjust States' error rates to eliminate the impact 
of high or increasing numbers of low-income working households 
or immigrant households. After 2002, the Secretary may also add 
to the list of items for which States' error rates are 
adjusted.

Section 431. Improvement of calculation of State performance measures

    This section extends the deadline for reporting and 
resolving States' quality control (QC) error rates to June 30.

Section 432. High performance bonus payments to States

    This section provides a total of 30 annual incentive 
payments, totaling $30 million a year, to the six states with 
the highest and/or most improved performance with respect to 
each of fivemeasures. The section requires that one of the 
measures assess participation among low-income working families. The 
four additional measures would be determined by the U.S. Department of 
Agriculture, the National Governor's Association, the American Public 
Human Services Association, and the National Conference of State 
Legislatures, within 180 days of the bill's enactment and one of the 
measures would have to relate to provision of timely and appropriate 
services to applications for and recipients of food stamp benefits. The 
final measures would have to be decided within six months from the 
bill's enactment and the bonuses would be allocated in a way that is 
proportional to caseload. State agencies subject to sanctions would not 
be eligible to receive bonus payments.

Section 433. Employment and training program

    This section reduces the amount of unmatched Federal funds 
available for Food Stamp Employment & Training (FSE&T) to 
$90,000,000 but sets aside an additional $25,000,000 a year for 
states that pledge to offer a work slot to able-bodied adults 
without dependents. The section also expands State flexibility 
in spending on the FSE&T program by repealing: 1) the 80 
percent set-aside to serve able-bodied adults without 
dependents, 2) the maintenance-of-effort requirement to access 
new unmatched funds, and 3) the limits on the amount states are 
reimbursed for each work slot offered. The section also 
increases from $25 to $50 the per month cap on the amount 
states may reimburse FSE&T participants for transportation and 
other work expenses with a Federal match.

Section 434. Reauthorization of food stamp program and food 
        distribution program on Indian reservations

    This section reauthorizes the Food Stamp Program and the 
Food Distribution Program on Indian Reservations Program.

Section 435. Coordination of program information efforts

    This section allows states to use TANF or TANF maintenance 
of effort funds to pay for costs related to providing 
information about the food stamp program, as is currently 
allowed for information about other low-income assistance 
programs. This provision would not allow TANF or TANF 
maintenance-of-effort funds to be used as a match to obtain 
food stamp administrative funding.

Section 436. Expanded grant authority

    This section clarifies the Secretary's ability to grant 
waivers to non-governmental entities to conduct research 
related to the Food Stamp Program.

Section 437. Access and outreach pilot programs

    This section provides $3,000,000 by the Secretary to fund, 
on a 75 percent matching basis, competitive grants to states 
and non-government organizations to improve access and outreach 
to people who are eligible for the Food Stamp Program.

Section 438. Consolidated block grants and administrative funds

    This section consolidates the funding structure for 
nutrition assistance in American Samoa and Puerto Rico. Funding 
levels are essentially unchanged, but both programs would be 
adjusted for food price inflation in future years. The 
provision also allows Puerto Rico to spend up to $6 million of 
its 2002 grant to help upgrade and modernize its electronic 
data processing system and its electronic benefit transfer 
system.

Section 439. Assistance for community food projects

    This section continues funding for Community Food Projects 
at $2.5 million each year. It also increases from 50 to 75 
percent the Federal share of the costs of establishing or 
carrying out a community food project.

Section 440. Availability of commodities for The Emergency Food 
        Assistance Program

    This section reauthorizes the Emergency Food Assistance 
Program (TEFAP) and increases the mandatory funding available 
for TEFAP under the Food Stamp Act from $100 million to $110 
million each year. The additional $10 million each year would 
be used to pay for State costs related to processing, storing, 
transporting, and distributing commodities.

Section 441. Innovative programs for addressing common community 
        problems

    This section establishes a Federal-local community 
partnership under which information about innovative ideas that 
have worked well in communities (to reduce the loss of farms, 
reduce hunger, help families leave food stamps, or to otherwise 
help communities help themselves) are provided to other 
communities where such local programs could be replicated. It 
provides $200,000 a year, for each of two years, to a non-
profit organization selected by the Secretary that is 
experienced in gathering and providing such information and 
guidance to other communities. Such a non-profit would also 
contribute some of its own resources.

Section 442. Report on use of electronic benefit transfer systems

    This section directs the Secretary to submit a report to 
Congress, within one year after enactment, on difficulties in 
using electronic benefit transfer (EBT) systems for food stamp 
issuance, including the extent and types of fraud, and efforts 
underway on the part of USDA, States, retailers, and EBT 
contractors to address the problems.

Section 443. Vitamin and mineral supplements

    This section allows the use of food stamp benefits to 
purchase vitamin-mineral supplements and provides $3,000,000 to 
conduct an impact study to evaluate related nutritional, 
health, economic, and other consequences of the program's 
modification. At a minimum, the study is to examine: (a) the 
extent to which problems arise in the purchase of vitamin-
mineral supplements with electronic benefit transfer cards; (b) 
the distinguishing at point-of-sale of vitamin-mineral 
supplements from herbal and botanical supplements for which 
food stamp benefits may not be used; (c) whether participants 
in the food stamp program spend more on vitamin-mineral 
supplements than nonparticipants; (d) to what extent vitamin-
mineral supplements may be substituted for other foods 
purchased with food stamp benefits; (e) the proportion of the 
average food stamp allotment that is used to purchase vitamin-
mineral supplements; and (f) the quality of the diets of 
participants in the food stamp program has changed as a result 
of allowing participants to use food stamp benefits to purchase 
vitamin-mineral supplements.

                  Subtitle B--Miscellaneous Provisions


Section 451. Reauthorization of commodity programs

    Subsection (a) reauthorizes the Secretary's ongoing 
authorities to provide commodities for nutrition assistance.
    Subsection (b) reauthorizes the Commodity Supplemental Food 
Program and redistributes administrative and program funds 
within the Commodity Supplemental Food Program to provide an 
inflation-indexed grant per assigned caseload slot for 
administrative costs incurred by State and local agencies 
administering the program.
    Subsection (c) extends authorization for administrative 
funding for The Emergency Food Assistance Program.

Section 452. Restoration of benefits to legal immigrants

    Subsection (a) restores eligibility to all legal immigrant 
children, regardless of date of entry to the United States. 
This subsection also exempts children from sponsor-deeming 
rules.
    Subsection (b) allows legal immigrants who are able to 
demonstrate 16 quarters of work history to qualify for benefits 
(instead of the current 40 quarters).
    Subsection (c) restores full eligibility to refugees and 
asylum seekers for whom there is currently a seven-year limit 
on eligibility.
    Subsection (d) restores eligibility to disabled legal 
immigrants who entered the United States after August 22, 1996 
and are eligible for a disability benefit such as Supplemental 
Security Income (SSI).

Section 453. Commodities for school lunch programs

    This section extends provisions suspending a requirement 
that any bonus commodities acquired for agricultural program 
purposes and donated to schools be counted toward the 
requirement that, at minimum, 12 percent of all school lunch 
assistance be in the form of commodities.

Section 454. Exclusion of certain military basic allowances for housing 
        for determination of eligibility for free and reduced price 
        meals

    This section excludes from income calculations in 
determining eligibility for free and reduced-price meals, 
military basic allowances for housing (BAH) that are paid for 
private military housing, for 2002 and 2003.

Section 455. Eligibility for assistance under the Special Supplemental 
        Nutrition Program for Women, Infants, and Children (WIC)

    This section excludes from income calculations in 
determining eligibility for the WIC Program, military basic 
allowances for housing (BAH) that are paid for private military 
housing.

Section 456. Senior Farmers' Market Nutrition Program

    This section directs the Secretary to use $15 million from 
the Commodity Credit Corporation (CCC) for each of five years 
to carry out and expand the Seniors Farmers' Market Program and 
grants the Secretary authority to issue regulations.

Section 457. Fruit and vegetable pilot program

    Subsection (a) directs the Secretary to carry out a pilot 
program during the 2002 school year through which fresh fruits 
and vegetables will be distributed, free-of-charge, to 
schoolchildren in each of four states (25 primary and secondary 
schools in each state) and on one American-Indian reservation.
    Subsection (b) directs schools that participate in the 
program to publicize widely the availability of the free fruits 
and vegetables.
    Subsection (c) directs the Secretary to conduct an 
evaluation of the results of the pilot program to determine: 
whether students took advantage of the pilot program; whether 
interest in the pilot program increased or lessened over time; 
and what effect, if any, the pilot program had on vending 
machine sales.

Section 458. Congressional Hunger Fellowship

    This section establishes the Congressional Hunger Fellows 
Program to develop and train future leaders of the United 
States to pursue careers in humanitarian service.

Section 459. Nutrition information and awareness pilot program

    Subsections (a) and (b) authorize the Secretary to 
establish a pilot program, in no more than 15 states, to 
increase the domestic consumption of fresh fruits and 
vegetables and convey related health promotion messages. The 
bill provides funds to States to assist eligible public and 
private sector entities with cost-share assistance to carry out 
the demonstration projects.
    Subsection (c) indicates the Secretary is to give 
preference for participation to States in which the production 
of fruits and vegetables is a significant industry, as 
determined by the Secretary. It also directs the Secretary to 
base the program on strategic initiatives including: health 
promotion and education interventions; public service and paid 
advertising or marketing activities; health promotion campaigns 
relating to locally grown fruits and vegetables; and social-
marketing campaigns.
    Subsection (d) requires that, in selecting States to 
participate in the program, the Secretary shall take into 
consideration (1) experience in carrying out similar projects 
or activities; (2) innovation; and (3) the ability of the State 
to conduct marketing campaigns to promote and track increases 
in levels of produce consumption and to optimize the 
availability of produce.
    Subsection (e) establishes the Federal share of the cost of 
any project carried out using funds provided under this section 
shall be 50 percent.
    Subsection (f) directs that projects shall not be made 
available to any foreign for-profit corporation.
    Subsection (g) authorizes appropriations of $25,000,000 for 
each of fiscal years 2002 through 2006.

Section 460. Effective date

    This section provides that, unless otherwise noted within a 
particular section, all sections of this title take effect on 
September 1, 2002. At the option of a State agency, however, 
implementation of any or all provisions may be delayed until 
October 1, 2002.

                            TITLE V--CREDIT


Subtitle A--Amending Provisions Relating to Farm Ownership Loans in the 
          Consolidated Farm and Rural Development Act Relating


Section 501. Direct loans

    This section provides that direct farm ownership loans are 
available to a farmer or rancher who has participated in the 
business operations of a farm or ranch for not less than three 
years. Current law provides that direct farm ownership loans 
are available to a farmer or rancher who has operated, as 
opposed to merely participated in, a farm or ranch for not less 
than three years. This provision was originally intended to 
ensure that farmers and ranchers have some farming experience 
before taking on direct farm ownership loan debt. With this 
change, the Committee recognizes that some applicants for 
direct farm ownership loans may have actively participated and 
gained experience in operating a farm or ranch but may not have 
been solely responsible for its operations.

Section 502. Financing of bridge loans

    This section provides the Secretary the authority to 
refinance ``bridge loans'' made by a commercial lender to a 
beginning farmer or rancher who has been approved for a USDA 
farm ownership loan but is awaiting funding for the program.

Section 503. Limitations on amount of farm ownership loans

    This section increases the limit on direct farm ownership 
debt for a beginning farmer or rancher to $250,000 and indexes 
the amount to inflation.

Section 504. Joint financing arrangements

    This section provides the Secretary the authority, as part 
of a joint financing arrangement for beginning farmers and 
ranchers, to make the USDA's portion of the financing at an 
interest rate that is 50 basis points less than the rate 
provided to non-beginning farmers and ranchers.

Section 505. Guarantee percentage for beginning farmers and ranchers

    This section provides beginning farmers and ranchers, who 
participate in USDA's down payment loan program for acquiring 
farmland, with a 95 percent guarantee on ownership and 
operating loans. Current law allows, but does not require, the 
Secretary to provide a 95 percent guarantee on a farm ownership 
loan for acquiring a farm or ranch to a borrower who is 
participating in the down payment loan program. The section 
also allows a 95 percent guarantee on an operating loan during 
the period that a borrower who participates in this program has 
an outstanding direct ownership loan. By specifying the 
guarantee at 95 percent, the Committee intends to help 
beginning farmers and ranchers obtain commercial credit.

Section 506. Guarantee of loans made under State beginning farmer or 
        rancher programs

    This section authorizes the Secretary to guarantee loans 
made by State beginning farmer and rancher programs, which 
includes loans that use funds resulting from the issuance of 
tax-exempt Aggie bonds.

Section 507. Down payment loan programs

    This section provides that as part of the down payment 
program for beginning farmers and ranchers, USDA shall finance 
40 percent of the loan (current law is 30 percent) and provide 
a repayment term of 20 years (current law is 10 years).

Section 508. Beginning farmer and rancher contract land sales program

    This section directs the Secretary to create a pilot 
program in which the Secretary will guarantee loans made by a 
private seller of a farm or ranch to a qualified beginning 
farmer on a contract land sale basis.

  Subtitle B--Amending Provisions Relating to Operating Loans in the 
              Consolidated Farm and Rural Development Act


Section 511. Direct loans

    This section provides that direct operating loans are 
available to a qualified beginning farmer or rancher who has 
operated a farm or ranch for not more than 10 years.

Section 512. Amount of guarantee of loans for tribal farm operations; 
        waiver of limitations for tribal farm operations and other farm 
        operations

    This section requires a 95 percent guarantee of an 
operating loan made to a Native American farming on an Indian 
Reservation and allows the Secretary to waive term limits for 
Native American farm operations on tribal lands if she 
determines that commercial credit is not generally available 
for such operations. The section also provides the Secretary 
authority to waive the term limitation on direct operating 
loans to allow farmers to obtain loans for two years beyond the 
current seven-year limit.

Subtitle C--Amending Administrative Provisions in the Consolidated Farm 
                       and Rural Development Act


Section 521. Eligibility of limited liability companies for farm 
        ownership loans, farm operating loans, and emergency loans

    This section adds limited liability companies to the list 
of eligible entities able to receive farm ownership loans, farm 
operating loans, and natural disaster emergency loans.

Section 522. Debt Settlement

    This section streamlines the debt settlement process by 
removing the county committees fromhaving to review and make 
recommendations regarding the debt settlement agreement reached by the 
borrowers and FSA.

Section 523. Temporary authority to enter into contracts; private 
        collection agencies

    This section removes two USDA authorities to enter into 
contracts with private entities for the purpose of servicing 
loans and collecting delinquent debt.

Section 524. Interest rate options for loans in servicing

    This section expands USDA's authority to allow the interest 
rate on a direct loan that is being rewritten to be the rate in 
effect on the date that a borrower applies for servicing. 
Current law provides that the interest rate on a loan being 
rewritten is to be either the original interest rate or the 
rate in effect at the time the loan is rewritten. The proposal 
provides a third option of the rate in effect on the date that 
the borrower applies for servicing.

Section 525. Annual review of borrowers

    This section removes the requirement that county committees 
certify that FSA conducts annual reviews of the credit history 
of the borrowers.

Section 526. Simplified loan applications

    This section raises the low documentation loan amount for a 
farmer program guaranteed loan from $50,000 to $100,000.

Section 527. Inventory property

    This section increases the time period in which a beginning 
farmer or rancher receives a preference to purchase inventory 
farmland from the Secretary from 75 days to 135 days and 
provides that the Secretary can combine or divide parcels of 
inventory property to maximize opportunities for beginning 
farmers and ranchers to acquire such properties. The section 
also requires the Secretary to consider selling or granting 
easements on inventory land for the purpose of farmland 
preservation.

Section 528. Definitions

    This section increases to 30 (from 25 percent) percent the 
amount of land that an applicant may own as a condition of 
meeting the definition of a qualified beginning farmer or 
rancher and excludes from the definition of ``debt 
forgiveness'' any write-down provided as part of a resolution 
of a discrimination complaint against the Secretary.

Section 529. Loan authorization levels

    This section increases the loan authorization levels for 
the direct and guaranteed loan programs by authorizing $3.75 
billion for each fiscal year. Direct loans are authorized $750 
million annually--$200 million for farm ownership (FO) loans 
and $550 million for farm operating loans. Guaranteed loans are 
authorized $3 billion--$1 billion for FO loans and $2 billion 
for farm operating loans.

Section 530. Interest rate reduction program

    This section makes permanent the interest rate reduction 
program and provides that beginning farmers and ranchers 
receive an additional one percent interest rate subsidy (capped 
at four percent) over non-beginning farmers (capped at 3 
percent) who participate in the program. The section also 
increases the maximum amount of funds for this program to $750 
million and provides that 25 percent of the program's 
subsidized funds are reserved for assisting beginning farmers 
and ranchers until April 1 of each fiscal year.

Section 531. Options for satisfaction of obligation to pay recapture 
        amount for shared appreciation agreements

    This section provides those who owe recapture amounts on 
shared appreciation agreements or those who have amortized the 
recapture amounts, the option of providing farmland protection 
easements on their land in return for forgiveness of the 
recapture amount.

Section 532. Waiver of borrower training certification requirement

    This section allows the Secretary to waive the borrower 
training certification requirement if the Secretary determines 
that the borrower demonstrates adequate knowledge in this area 
and requires the Secretary to issue criteria for waivers.

Section 533. Annual review of borrowers

    This section requires FSA to conduct an annual review of 
borrowers rather than a biannual review.

                Subtitle D--Amending the Farm Credit Act


Section 541. Repeal of approval requirements

    This section allows a Title I or II Farm Credit lender to 
participate in a ``similar entity'' loan originated by a 
commercial lender without the need to seek prior approval from 
the Title III lender that functions where the loan is being 
made. Current law requires System institutions to obtain 
permission from one another when participating in these multi-
lender transactions. This section eliminates these requirements 
only as they pertain to multi-lender loans that the System does 
not originate.

Section 542. Banks for cooperatives

    This section contains a provision to strengthen the 
System's international financing authorities. The bank vested 
with these authorities, CoBank, will be authorized to finance 
the export of agriculturally-related equipment and goods 
irrespective of whether these goods will be used on the farm in 
the importing country. Current provisions impose an ``on-farm'' 
use requirement. That requirement hinders export sales. In 
addition, this requirement curtails the bank's ability to 
participate in USDA's facilities credit guarantee program.

Section 543. Insurance Corporation premiums

    This section provides the Farm Credit System Insurance 
Corporation the ability to recognize the lower risk associated 
with the certain guaranteed loans and to adjust premiums 
charged accordingly. While government sponsored entity (GSE) 
guarantees, such as those issued by Fannie Mae, Freddy Mac, and 
Farmer Mac, do not equate to a federal guarantee, they do 
provide a measure of protection against loss. The change allows 
FCSIC to have the flexibility to weigh the diminished risk in 
these loans when setting its insurance premium.

Section 544. Board of Directors of the Federal Agricultural Mortgage 
        Corporation

    This section increases the number of Farmer MAC Board of 
Directors from 15 to 17, provides that the chairperson of the 
board will be elected by the board, and makes other changes to 
the board structure.

                     Subtitle E--General Provisions


Section 551. Inapplicability of finality rule

    This section provides that a farm credit decision by a FSA 
county committee is not subject to the 90-day finality rule in 
the 1994 USDA Reorganization Act. Current law generally 
provides that decisions by FSA county committees become final 
within 90 days after the date that a person applies for 
benefits. This finality originally applied only to commodity 
programs, but inadvertently became applicable to credit 
programs as a result of the merger of the old Agriculture 
Stabilization and Conservation Service (ASCS) and Farmers' Home 
Administration (FmHA) county committees in the 1994 
Reorganization Act. This change provides that this rule does 
not apply to credit decisions.

Section 552. Technical amendments

    This section makes technical amendments to the Consolidated 
Farm and Rural Development Act.

Section 553. Effect of amendments

    This section addresses the effect of these amendments on 
previous law.

Section 554. Effective date

    This section provides the effective date of amendments.

                      TITLE VI--RURAL DEVELOPMENT


                Subtitle A--Empowerment of Rural America


Section 601. National Rural Cooperative and Business Equity Fund

    This section amends the Consolidated Farm and Rural 
Development Act by adding the new subtitle as follows:

Section 383A. Short title

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

Section 383B. Purpose

    This section states that the purpose of this subtitle is to 
revitalize rural communities and enhance farm income through 
sustainable rural business development by providing federal 
funds and credit enhancements to a private equity fund to 
encourage investments by institutional and noninstitutional 
investors for the benefit of rural America.

Section 383C. Definitions

    This section defines terms used in this subtitle.

Section 383D. Establishment

    Subsection (a). Authority:
    Paragraph (1). This paragraph provides that on 
certification by the Secretary that, to the maximum extent 
practicable, the parties proposing to establish the Fund are 
broadly representative of groups of similar authorized private 
investors (as defined in Section 383C), the parties may 
establish a non-Federal entity under State law to purchase 
shares of, and manage, the National Rural Cooperative and 
Business Equity Fund (the ``Fund'') to generate and provide 
equity capital to rural businesses.
    Paragraph (2). This paragraph provides that to the maximum 
extent practicable, equity ownership of the Fund will be 
distributed among authorized private investors. It prohibits 
the exclusion of any group of authorized private investors from 
equity ownership of the Fund if an authorized private investor 
representative of the group is able and willing to invest in 
the Fund.
    Subsection (b). This subsection states that the purposes of 
the Fund are to strengthen the economy of rural areas; to 
further sustainable rural business development; to encourage 
start-up rural businesses, increased opportunities for small 
and minority-owned rural businesses; and the formation of new 
rural businesses; to enhance rural employment opportunities; to 
provide equity capital to rural businesses, many of which have 
difficulty obtaining equity capital; and to leverage non-
Federal funds for rural businesses.
    Subsection (c). This subsection provides that the articles 
of incorporation and by-laws of the Fund will set forth 
purposes of the Fund that are consistent with the purposes 
described in subsection (b).

Section 383E. Investment in the Fund

    Subsection (a): This subsection provides that of the funds 
made available under section 383H, the Secretary will make 
available to the Fund $150,000,000; guarantee 50 percent of 
each investment made by an authorized private investor in the 
Fund; and guarantee the repayment of principal of, and accrued 
interest on, debentures issued by the Fund to authorized 
private investors.
    Subsection (b). Private Investment:
    Paragraph (1). This paragraph provides that the Secretary 
will make an amount available to the Fund only after an equal 
amount has been invested in the Fund by authorized private 
investors.
    Paragraph (2). This paragraph provides that an insured 
depository institution may be an authorized private investor in 
the Fund; and that an investment in the Fund may be considered 
to be part of the record of an institution in meeting the 
credit needs of community in which the institution is located 
under any applicable Federal law. The total investment in the 
Fund of an insured depository institution is not to exceed five 
percent of the capital and surplus of the institution. An 
appropriate Federal banking agency may, by regulation or order, 
impose on any insured depository institution investing in the 
Fund, any safeguard, limitation, or condition appropriate to 
ensure that the institution operates in a financially sound 
manner, and complies with all applicable law.
    Subsection (c). Guarantee of Private Investments:
    Paragraph (1). This paragraph provides that the Secretary 
will guarantee, under terms and conditions determined by the 
Secretary, 50 percent of any loss of the principal of an 
investment made in the Fund by an authorized private investor.
    Paragraph (2). This paragraph provides that the aggregate 
potential liability of the Secretary with respect to all 
guarantees under paragraph (1) will not apply to more than 
$300,000,000 in private investments in the Fund.
    Paragraph (3). This paragraph provides that an authorized 
private investor in the Fund may redeem a guarantee with 
respect to the total investments in the Fund and the total 
losses of the authorized private investor as of the date of 
redemption either on the date that is five years after the date 
of the initial investment by the authorized private investor, 
or annually thereafter. On redemption of a guarantee, the 
shares in the Fund of the authorized private investor will be 
redeemed and the authorized private investor will be prohibited 
from making any future investment in the Fund.
    Subsection (d). Debt Securities:
    Paragraph (1). This paragraph provides that the Fund may, 
at the discretion of the Board, generate additional capital 
through the issuance of debt securities and other means 
determined to be appropriate by the Board.
    Paragraph (2). This paragraph requires the Secretary to 
guarantee 100 percent of the principal of, and accrued interest 
on, debentures issued by the Fund that are approved by the 
Secretary. The outstanding value of debentures issued by the 
Fund and guaranteed by the Secretary shall not exceed the 
lesser of the amount equal to twice the value of the assets 
held by the Fund or $500,000,000. If the Secretary makes a 
payment on a debt security issued by the Fund as a result of a 
guarantee of the Secretary under this paragraph, the Secretary 
will have priority over other creditors for repayment of the 
debt security.
    Paragraph (3). This paragraph provides that an authorized 
private investor may purchase debt securities issued by the 
Fund.

Section 383F. Investments and other activities of the Fund

    Subsection (a). Investments:
    Paragraph (1). This paragraph provides that the Fund may 
make equity investments in a rural business that meets the 
requirements of paragraph (6) and such other requirements as 
the Board may establish, and extend credit to the rural 
business in the form of mezzanine debt or subordinated debt or 
any other form of quasi-equity. A single investment by the Fund 
shall not exceed the greater of an amount equal to seven 
percent of the capital of the Fund or $2,000,000. Except in the 
case of a project to assist a rural cooperative, the total 
amount of nonequity investments described in subparagraph 
(A)(ii) that may be provided by the Fund shall not exceed 20 
percent of the total investments of the Fund in the project. 
The amount of any investment by the Fund in a rural business is 
not to exceed the aggregate amount invested by other private 
entities in that rural business.
    Paragraph (2). This paragraph provides that the Fund must 
implement procedures to ensure that the financing arrangements 
of the Fund meet the Fund's primary focus of providing equity 
capital and the Fund does not compete with conventional sources 
of credit.
    Paragraph (3). This paragraph provides that the Fund must 
seek to make equity investments in a variety of viable 
projects, with a significant share of investments in smaller 
enterprises in rural communities of diverse sizes and in 
cooperative and noncooperative enterprises, and provides that 
the Fund must be managed in such a way as to diversify the 
risks to the Fund among a variety of projects.
    Paragraph (4). This paragraph provides that the Fund shall 
not invest in any rural business that is primarily retail in 
nature, other than a purchasing cooperative.
    Paragraph (5). This paragraph provides that returns on 
investments in and by the Fund and returns on the extension of 
credit by participants in projects assisted by the Fund are not 
subject to any State or Federal law establishing a maximum 
allowable interest rate.
    Paragraph (6). This paragraph provides that any recipient 
of amounts from the Fund must make or obtain a significant 
investment from a source of capital other than the Fund. Rural 
business investment projects to be considered for an equity 
investment from the Fund must be sponsored by a regional, 
State, or local sponsoring or endorsing organization such as a 
financial institution, a development organization, or any other 
established entity engaging or assisting in rural business 
development, including a rural cooperative.
    Subsection (b). This subsection requires the Fund to use 
not less than two percent of capital provided by the Federal 
Government to provide technical assistance to rural businesses 
seeking an equity investment from the Fund.
    Subsection (c). This subsection requires the Board to 
authorize an annual audit of the financial statements of the 
Fund by a nationally recognized auditing firm using generally 
accepted accounting principles, and to make the results of the 
audit available to investors in the Fund.
    Subsection (d). This subsection requires the Board to 
prepare and make available to the public an annual report that 
describes the projects funded with amounts from the Fund, 
specifies the recipients of amounts from the Fund, specifies 
the coinvestors in all projects that receive amounts from the 
Fund, and meets the reporting requirements, if any, of the 
State under the law of which the Fund is established.
    Subsection (e). This subsection allows the Board to 
exercise such other authorities as are necessary to carry out 
this subtitle, and requires the Secretary to enter in to a 
contract with the Administrator of the Small Business 
Administration under which the Administrator of the Small 
Business Administration shall be responsible for the routine 
duties of the Secretary in regard to the Fund.

Section 383G. Governance of the Fund

    Subsection (a). This subsection provides that the Fund will 
be governed by a board of directors that represents all of the 
authorized private investors in the Fund and the Federal 
Government and consists of a designee of the Secretary, two 
members who are appointed by the Secretary and are not Federal 
employees, eight members who are elected by the authorized 
private investors, and one member who is appointed by the Board 
and who is a community banker from an insured depository 
institution that has total assets of not more than $250,000,000 
and has made an investment in the Fund.
    Subsection (b). This subsection provides that no individual 
investor or group of authorized investors may control more than 
25 percent of the votes on the Board.

Section 383H. Authorization of Appropriations

    This section authorizes appropriation of such sums as are 
necessary to carry out the subtitle.

Section 602. Rural Business Investment Program

    This section amends the Consolidated Farm and Rural 
Development Act as follows:

Section 384A. Definitions

    This section defines terms used in this subtitle.

Section 384B. Purposes

    This section states that the purposes of the subtitle are 
(1) to promote economic development and the creation of wealth 
and job opportunities in rural areas and among individuals 
living in those areas by encouraging developmental venture 
capital investments in smaller enterprises primarily located in 
rural areas, and (2) to establish a developmental venture 
capital program with the mission of addressing the unmet equity 
investment needs of small enterprises located in rural areas, 
by authorizing the Secretary to enter into participation 
agreements with Rural Business Investment Companies 
(``RBICs''), to guarantee debentures of RBICs to enable each 
RBIC to make developmental venture capital investments in 
smaller enterprises in rural areas, and to make grants to 
RBICs, and to other entities, for the purpose of providing 
operational assistance to smaller enterprises financed, or 
expected to be financed, by the RBICs.

Section 384C. Establishment

    This section provides that the Secretary will establish a 
Rural Business Investment Program, under which the Secretary 
may enter into participation agreements with RBICs granted 
final approval, guarantee the debentures issued by RBICs, and 
make grants to RBICs and to other entities.

Section 384D. Selection of Rural Business Investment Companies

    Subsection (a). This subsection provides that a company 
will be eligible to apply to participate as a RBIC in the 
program established under this subtitle if (1) the company is a 
newly formed for-profit entity, (2) the company has a 
management team with experience in community development 
financing or relevant venture capital financing, and (3) the 
company will invest in enterprises that will create wealth and 
job opportunities in rural areas, with an emphasis on smaller 
businesses.
    Subsection (b). This subsection provides that to 
participate as a RBIC in the program established under this 
subtitle, a company meeting the eligibility requirements of 
subsection (a) must submit an application to the Secretary that 
includes (1) a business plan describing how the company intends 
to make successful developmental venture capital investments in 
identified rural areas, (2) information regarding the community 
development finance or relevant venture capital qualifications 
and general reputation of the management of the company, (3) a 
description of how the company intends to work with community 
organizations and to seek to address the unmet capital needs of 
the communities served, (4) a proposal describing how the 
company intends to use the grant funds provided under this 
subtitle to provide operational assistance to smaller 
enterprises financed by the company, including information 
regarding whether the company intends to use licensed 
professionals, when necessary, on the staff of the company or 
from an outside entity, (5) with respect to binding commitments 
to be made to the company under this subtitle, an estimate of 
the ratio of cash to in-kind contributions, (6) a description 
of the criteria to be used to evaluate whether and to what 
extent the company meets the objectives of the program 
established under this subtitle, (7) information regarding the 
management and financial strength of any parent firm, 
affiliated firm, or any other firm essential to the success of 
the business plan of the company, and (8) such other 
information as the Secretary may require.
    Subsection (c). Issuance of License:
    Paragraph (1). This paragraph requires each applicant for a 
license to operate as a RBIC to submit an application to the 
Secretary.
    Paragraph (2). This paragraph provides that no later than 
90 days after the initial receipt by the Secretary of an 
application, the Secretary must provide the applicant with a 
written report describing the status of the application and any 
requirements remaining for completion of the application. 
Within a reasonable time after receiving a completed 
application, the Secretary must either approve the application 
and issue a license for the operation, or disapprove the 
application and notify the applicant in writing of the 
disapproval.
    Paragraph (3). This paragraph requires that in reviewing 
and processing an application, the Secretary must determine 
whether the applicant meets the requirements of subsections (d) 
and (e) and whether the management of the applicant is 
qualified and has the knowledge, experience, and capability 
necessary to comply with this subtitle. The Secretary must 
consider the need for and availability of financing for rural 
business concerns in the geographic area in which the applicant 
is to commence business, the general business reputation of the 
owners and management of the applicant, and the probability of 
successful operations of the applicant, including adequate 
profitability and financial soundness. The Secretary may not 
consider any projected shortage or unavailability of leverage.
    Subsection (d). This subsection allows the Secretary to 
approve an applicant to operate as a RBIC and to designate the 
applicant as a RBIC if the Secretary determines that the 
application satisfies the requirements of subsection (b), if 
the area in which the company is to conduct its operations and 
the establishment of branch offices or agencies (if authorized 
by the articles) are approved by the Secretary, and if the 
applicant enters into a participation agreement with the 
Secretary.

Section 384E. Debentures

    Subsection (a). This subsection allows the Secretary to 
guarantee the timely payment of principal and interest, as 
scheduled, on debentures issued by any RBIC.
    Subsection (b). This subsection allows the Secretary to 
make guarantees under this section on such terms and conditions 
as the Secretary considers appropriate, except that the term of 
any debenture guaranteed under this section must not exceed 15 
years.
    Subsection (c). This subsection provides that the full 
faith and credit of the United States is pledged to the payment 
of all guarantees made under this subtitle.
    Subsection (d). This subsection provides that the Secretary 
may guarantee the debentures issued by a RBIC only to the 
extent that the total face amount of outstanding guaranteed 
debentures of the company does not exceed 300 percent of the 
private capital of the company. The Secretary may provide for 
the use of discounted debentures.

Section 384F. Issuance and Guarantee of Trust Certificates

    Subsection (a). This subsection allows the Secretary to 
issue trust certificates representing ownership of all or a 
fractional part of debentures issued by a RBIC and guaranteed 
by the Secretary under this subtitle, if the certificates are 
based on and backed by a trust or pool approved by the 
Secretary and composed solely of guaranteed debentures.
    Subsection (b). Guarantee:
    Paragraph (1). This paragraph allows the Secretary to 
guarantee the timely payment of the principal of and interest 
on trust certificates issued by the Secretary or agents of the 
Secretary for purposes of this section.
    Paragraph (2). This paragraph limits each guarantee under 
this subsection to the extent of principal and interest on the 
guaranteed debentures that compose the trust or pool.
    Paragraph (3). This paragraph provides that in the event a 
debenture in a trust or pool is prepaid, or in the event of 
default of such a debenture, the guarantee of timely payment of 
principal and interest on the trust certificates shall be 
reduced in proportion to the amount of principal and interest 
the prepaid debenture represents in the trust or pool. Interest 
on prepaid or defaulted debentures will accrue and be 
guaranteed by the Secretary only through the date of payment of 
the guarantee. At any time during its term, a trust certificate 
may be called for redemption due to prepayment or default of 
all debentures.
    Subsection (c). This subsection provides that the full 
faith and credit of the United States is pledged to the payment 
of any guarantee of a trust certificate issued by the Secretary 
or agents of the Secretary under this section.
    Subsection (d). This subsection provides that if the 
Secretary pays a claim under a guarantee issued under this 
section, the claim shall be subrogated fully to the rights 
satisfied by the payment. No Federal, State, or local law shall 
preclude or limit the exercise by the Secretary of the 
ownership rights of the Secretary in a debenture residing in a 
trust or pool against which one or more trust certificates are 
issued under this section.
    Subsection (e). Management and Administration:
    Paragraph (1). This paragraph requires the Secretary to 
provide for a central registration of all trust certificates 
issued under this section.
    Paragraph (2). This paragraph allows the Secretary to 
maintain such commercial bank accounts or investments in 
obligations of the United States as may be necessary to 
facilitate the creation of trusts or pools backed by debentures 
guaranteed under this subtitle, and to issue trust certificates 
to facilitate the creation of those trusts or pools.
    Paragraph (3). This paragraph requires any agent performing 
functions on behalf of the Secretary under this paragraph to 
provide a fidelity bond or insurance in such amount as the 
Secretary considers to be necessary to fully protect the 
interests of the United States.
    Paragraph (4). This paragraph allows the Secretary to 
regulate brokers and dealers in trust certificates issued under 
this section.
    Paragraph (5). This paragraph states that nothing prohibits 
the use of a book-entry or other electronic form of 
registration for trust certificates issued under this section.

Section 384G. Fees

    Subsection (a). This subsection allows the Secretary to 
charge such fees as the Secretary considers appropriate with 
respect to any guarantee or grant issued under this subtitle.
    Subsection (b). This subsection prohibits the Secretary 
from collecting a fee for any guarantee of a trust certificate 
under section 384F, except that any agent of the Secretary may 
collect a fee approved by the Secretary for certain functions 
listed in section 384F.
    Subsection (c). This subsection allows the Secretary to 
prescribe fees to be paid by each applicant for a license to 
operate as a RBIC under this subtitle. Fees collected under 
this subsection must be deposited in the account for salaries 
and expenses of the Secretary, and are authorized to be 
appropriated solely to cover the costs of licensing 
examinations.

Section 384H. Operational Assistance Grants

    Subsection (a). This subsection provides that the Secretary 
may make grants to RBICs and to other entities, as authorized 
by this subtitle, to provide operational assistance to smaller 
enterprises financed, or expected to be financed, by the 
entities. Grants made under this subsection will be made over a 
multi-year period not to exceed 10 years. The proceeds of a 
grant made under this paragraph may be used by the RBIC or 
entity receiving the grant only to provide operational 
assistance in connection with an equity investment in a 
business located in a rural area, or to pay operational 
expenses of the company. A RBIC shall be eligible for a grant 
under this section only if the company submits a plan for use 
of the grant. The amount of a grant made under this subsection 
to a RBIC will equal the lesser of 50 percent of the amount of 
resources raised by the RBIC, or $1,000,000. The amount of a 
grant made under this subsection to any entity other than a 
RBIC shall be equal to the resources raised by the entity in 
accordance with the requirements applicable to RBICs under this 
subtitle.
    Subsection (b). This subsection allows the Secretary to 
make supplemental grants to RBICs and to other entities to 
provide additional operational assistance to smaller 
enterprises financed, or expected to be financed, by the RBICs 
and other entities. The Secretary may require, as a condition 
of any supplemental grant made under this subsection, that the 
RBIC or other entity receiving the grant match the supplemental 
grant funds with an equal amount from resources other than 
resources provided by the Secretary.

Section 384I. Rural Business Investment Companies

    Subsection (a). This subsection requires that a RBIC must 
(1) be an incorporated body, a limited liability company, or a 
limited partnership organized and chartered or otherwise 
existing under State law solely for the purpose of performing 
the functions and conducting the activities authorized by this 
subtitle; (2) if incorporated, have succession for a period of 
not less than 30 years unless earlier dissolved by the 
shareholders of the company, or if a limited partnership or 
limited liabilitycompany, have succession for a period of not 
less than 10 years; and (3) possess the powers reasonably necessary to 
perform the functions and conduct the activities authorized by this 
subtitle.
    Subsection (b). This subsection provides that the articles 
of any RBIC must specify in general terms the purposes for 
which the RBIC is formed, the name of the RBIC, the area or 
areas in which the operations of the RBIC are to be carried 
out, the place where the principal office of the RBIC is to be 
located, and the amount and classes of the shares of capital 
stock of the RBIC. The articles may contain any other 
provisions consistent with this subtitle that the RBIC may 
determine appropriate to adopt for the regulation of its 
business and the conduct of its affairs. The articles will be 
subject to the approval of the Secretary.
    Subsection (c). This subsection provides that the private 
capital of each RBIC will be at least $5,000,000, or, with 
respect to RBICs authorized to issue participating securities 
to be purchased or guaranteed by the Secretary, $10,000,000. If 
the Secretary determines that it will not create an 
unreasonable risk of default or loss to the Federal Government 
to allow a RBIC authorized to issue participating securities to 
be purchased or guaranteed by the Secretary to have private 
capital of less than $10,000,000, the Secretary may require at 
least $5,000,000 in private capital from the RBIC rather than 
$10,000,000. The Secretary must also determine whether the 
private capital of each RBIC is adequate to ensure a reasonable 
prospect that the RBIC will be operated soundly and profitably, 
and managed actively and prudently in accordance with the 
articles of the RBIC, and whether the RBIC will be able to 
comply with the requirements of this subtitle. At least 75 
percent of the capital of each RBIC must be invested in rural 
business concerns.
    Subsection (d). This subsection requires the Secretary to 
ensure that the management of each RBIC is sufficiently 
diversified from, and unaffiliated with, the ownership of the 
RBIC so as to ensure independence and objectivity in the 
financial management and oversight of the investments and 
operations of the RBIC.

Section 384J. Financial institution investments

    Subsection (a). This subsection provides that any national 
bank, any member bank of the Federal Reserve System, any 
Federal savings association, or any Farm Credit System 
institution described in section 1.2(a) of the Farm Credit Act 
of 1971 may invest in any RBIC or in any entity established to 
invest solely in RBICs. Any insured bank that is not a member 
of the Federal Reserve System may also invest in any RBIC or 
entity established to invest solely in RBICs to the extent 
permitted under applicable State law.
    Subsection (b). This subsection provides that no bank, 
association, or institution described in subsection (a) may 
make investments described in subsection (a) that are greater 
than five percent of the capital and surplus of the bank, 
association, or institution.
    Subsection (c). This subsection provides that if a Farm 
Credit System institution described in section 1.2(a) of the 
Farm Credit Act of 1971 holds more than 30 percent of the 
voting shares of a RBIC, the RBIC cannot provide equity 
investments in, or provide other financial assistance to, 
entities that are not otherwise eligible to receive financing 
from the Farm Credit System under the Farm Credit Act of 1971.

Section 384K. Reporting Requirement

    Subsection (a). This subsection requires each RBIC that 
participates in the program established under this subtitle to 
provide to the Secretary certain information, including 
information relating to the measurement criteria that the RBIC 
proposed in its application to the program, and, in each case 
in which the RBIC makes an investment in, or a loan or grant 
to, a business that is not located in a rural area, a report on 
the number and percentage of employees of the business who 
reside in those areas.

Section 384L. Examinations

    Subsection (a). This subsection makes each RBIC that 
participates in the program established under this subtitle 
subject to examinations made at the direction of the Secretary 
in accordance with this section.
    Subsection (b). This subsection allows an examination under 
this section to be conducted with the assistance of a private 
sector entity that has the qualifications and the expertise 
necessary to conduct such an examination.
    Subsection (c). This subsection allows the Secretary to 
assess the cost of an examination against the RBIC examined, 
and requires the RBIC to pay those costs.
    Subsection (d). This subsection requires funds collected 
under this section to be deposited in the account that incurred 
the costs for carrying out this section, to be made available 
to the Secretary without further appropriation, and to remain 
available until expended.

Section 384M. Injunctions and other orders

    Subsection (a). This subsection provides that whenever a 
RBIC or any other person has engaged or is about to engage in 
any act or practice that constitutes or will constitute a 
violation of a provision of this subtitle, the Secretary may 
apply to the appropriate district court of the United States 
for an order enjoining the act or practice, or for an order 
enforcing compliance with the provision. The court shall have 
jurisdiction over the action and, on a showing by the Secretary 
that the RBIC or other person has engaged or is about to engage 
in an act or practice described in this subsection, the court 
shall grant without bond a permanent or temporary injunction, 
restraining order, or other order.
    Subsection (b). This subsection provides that in any 
proceeding under subsection (a), the court as a court of equity 
may, to such extent as the court considers necessary, take 
exclusive jurisdiction over the RBIC and its assets, wherever 
located. The court will have jurisdiction to appoint a trustee 
or receiver to hold or administer the assets.
    Subsection (c). This subsection provides that the Secretary 
may act as trustee or receiver of a RBIC. On the request of the 
Secretary, the court shall appoint the Secretary to act as a 
trustee or receiver of a RBIC, unless the court considers the 
appointment inequitable or otherwise inappropriate by reason of 
any special circumstances involved.

Section 384N. Additional penalties for noncompliance

    Subsection (a). This subsection provides that if a RBIC 
violates or fails to comply with this subtitle (including any 
rule, regulation, order, or participation agreement under this 
subtitle), the Secretary may void the participation agreement 
between the Secretary and the RBIC and make the RBIC forfeit 
all of its rights and privileges under this subtitle.
    Subsection (b). This subsection provides that before the 
Secretary may cause a RBIC to forfeit rights or privileges 
under subsection (a), a court of the United States of competent 
jurisdiction must find that the RBIC committed a violation, or 
failed to comply, in a cause of action brought for that purpose 
in the district, territory, or other place subject to the 
jurisdiction of the United States, in which the principal 
office of the RBIC is located. Each cause of action brought by 
the United States under this subsection shall be brought by the 
Secretary or by the Attorney General.

Section 384O. Unlawful acts and omissions; breach of fiduciary duty

    Subsection (a). This subsection provides that whenever any 
RBIC violates this subtitle (including any rule, regulation, 
order, or participation agreement under this subtitle), the 
violation shall also be deemed to be a violation and an 
unlawful act committed by any person that, directly or 
indirectly, authorizes, orders, participates in, causes, brings 
about, counsels, aids, or abets in the commission of any acts, 
practices, or transactions that constitute or will constitute, 
in whole or in part, the violation.
    Subsection (b). This subsection provides that it will be 
unlawful for any officer, director, employee, agent, or other 
participant in the management or conduct of the affairs of a 
RBIC to engage in any act or practice, or to omit any act or 
practice, in breach of the fiduciary duty of the officer, 
director, employee, agent, or participant if, as a result of 
the act or practice, the company suffers or is in imminent 
danger of suffering financial loss or other damage.
    Subsection (c). This subsection makes it unlawful for any 
person to take office as an officer, director, or employee of 
any RBIC, or to become an agent or participant in the conduct 
of the affairs or management of a RBIC, if the person has been 
convicted of a felony, or any other criminal offense involving 
dishonesty or breach of trust, or has been found civilly liable 
in damages, or has been permanently or temporarily enjoined by 
an order, judgment, or decree of a court of competent 
jurisdiction, by reason of any act or practice involving fraud, 
or breach of trust. It will also be unlawful for any person to 
continue to serve in any of the capacities described in this 
subsection if the person is convicted of a felony, or any other 
criminal offense involving dishonesty or breach of trust, or 
the person is found civilly liable in damages, or is 
permanently or temporarily enjoined by an order, judgment, or 
decree of a court of competent jurisdiction, by reason of any 
act or practice involving fraud or breach of trust.

Section 384P. Removal or suspension of directors or officers

    This section provides that the Secretary may remove or 
suspend any director or officer of any RBIC using the 
procedures established by the Secretary pursuant to this 
subtitle for removal and suspension.

Section 384Q. Contracting of Functions

    This section requires the Secretary to enter into an 
interagency agreement with the Administrator of the Small 
Business Administration to carry out the day-to-day management 
and operation of the program authorized by this subtitle.

Section 384R. Regulations

    This section allows the Secretary to promulgate regulations 
necessary to carry out this subtitle.

Section 384S. Funding

    This section provides that the Secretary of the Treasury 
shall transfer to the Secretary of Agriculture such sums as may 
be necessary for the cost of guaranteeing $350,000,000 of 
debentures under this subtitle, and $50,000,000 to make grants 
under this subtitle.

Section 603. Full funding of pending rural development loan and grant 
        applications

    Subsection (a). This subsection defines the term 
``application'' to include an application for a loan, loan 
guarantee, or grant that, as of the date of enactment of this 
Act, is in the preapplication phase of consideration under 
regulations of the Secretary of Agriculture in effect on the 
date of enactment of this Act.
    Subsection (b). This subsection establishes in the Treasury 
of the United States an account to be known as the ``Rural 
America Infrastructure Development Account'' (referred to in 
this section as the ``Account'') to fund rural development 
loans, loan guarantees, and grants described in subsection (d) 
that are pending on the date of enactment of this Act.
    Subsection (c). This subsection provides that 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 such sums as are necessary to carry out this 
section, to remain available until expended. The Secretary will 
be entitled to receive, will accept, and will use to carry out 
this section the funds transferred under this subsection, 
without further appropriation.
    Subsection (d). This subsection requires the Secretary to 
use the funds in the Account to provide funds for applications 
that are pending on the date of enactment of this Act for (A) 
community facility direct loans under section 306(a)(1) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 
1926(a)(1)); (B) community facility grants under paragraph 
(19), (20), or (21) of section 306(a) of that Act (7 U.S.C. 
1926(a)); (C) water or waste disposal grants or direct loans 
under paragraph (1) or (2) of section 306(a) of that Act (7 
U.S.C. 1926(a)); (D) rural water or wastewater technical 
assistance and training grants under section 306(a)(14) of that 
Act (7 U.S.C. 1926(a)(14)); (E) emergency community water 
assistance grants under section 306A of that Act (7 U.S.C. 
1926a); (F) business and industry guaranteed loans authorized 
under section 310B(a)(1)(A) of that Act (7 U.S.C. 
1932(a)(1)(A)); and (G) solid waste management grants under 
section 310B(b) of that Act (7 U.S.C. 1932(b)). Funds in the 
Account will be available to the Secretary to provide funds for 
pending applications for loans, loan guarantees, and grants 
described in this subsection only to the extent that funds for 
the loans, loan guarantees, and grants appropriated in the 
annual appropriations Act for fiscal year 2002 have been 
exhausted. The Secretary may use the Account to provide funds 
for a pending application for a loan, loan guarantee, or grant 
described in this subsection only if theSecretary processes, 
reviews, and approves the application in accordance with regulations in 
effect on the date of enactment of this Act.

Section 604. Rural Endowment Program

    This section amends the Consolidated Farm and Rural 
Development Act as follows:

Section 385A. Purpose

    This section states that the purpose of this subtitle is to 
provide rural communities with technical and financial 
assistance to implement comprehensive community development 
strategies to reduce the economic and social distress resulting 
from poverty, high unemployment, outmigration, plant closings, 
agricultural downturn, declines in the natural resource-based 
economy, or environmental degradation.

Section 385B. Definitions

    This section defines terms used in this subtitle.

Section 385C. Rural Endowment Program

    Subsection (a). Establishment.
    Paragraph (1). This paragraph provides that the Secretary 
may establish a program, to be known as the Rural Endowment 
Program, to provide approved program entities with assistance 
in developing and implementing comprehensive community 
development strategies for eligible rural areas.
    Paragraph (2). This paragraph provides that the purposes of 
the Program are (A) to enhance the ability of an eligible rural 
area to engage in comprehensive community development; (B) to 
leverage private and public resources for the benefit of 
community development efforts in eligible rural areas; (C) to 
make available staff of Federal agencies to directly assist the 
community development efforts of an approved program entity or 
eligible rural area; and (D) to strengthen the asset base of an 
eligible rural area to further long-term, ongoing community 
development.
    Subsection (b). Applications.
    Paragraph (1). This paragraph provides that to receive an 
endowment grant under the Program, the eligible entity must 
submit an application at such time, in such form, and 
containing such information as the Secretary may require.
    Paragraph (2). This paragraph provides that where 
appropriate, the Secretary must encourage regional applications 
from program entities serving more than one eligible rural 
area. To be eligible for an endowment grant for a regional 
application a program entity that submits an application must 
demonstrate that a comprehensive community development strategy 
for the eligible rural area is best accomplished through a 
regional approach, and the combined population of the eligible 
rural area covered by the comprehensive community development 
strategy is 75,000 inhabitants or less. For the purpose of the 
limit on the amount of an endowment grant an approved entity 
may receive, two or more program entities that submit a 
regional application shall be considered to be a single program 
entity.
    Paragraph (3). This paragraph requires the Secretary to 
give preference to a joint application submitted by a private, 
nonprofit community development corporation and a unit of local 
government.
    Subsection (c). This subsection requires the Secretary to 
approve a program entity to receive grants under the Program, 
if the entity meets criteria established by the Secretary, 
including the following: (1) the entity serves a rural area 
that suffers from economic or social distress resulting from 
poverty, high unemployment, outmigration, plant closings, 
agricultural downturn, declines in the natural resource-based 
economy, or environmental degradation; (2) the entity 
demonstrates the capacity to implement a comprehensive 
community development strategy; (3) the goals described in the 
application are consistent with this section; and (4) the 
entity demonstrates the ability to convene and maintain a 
multi-stakeholder, community-based participation process.
    Subsection (d). This subsection provides that the Secretary 
may award supplemental grants to approved program entities to 
assist the entities in the development of a comprehensive 
community development strategy under this subtitle. In 
determining whether to award a supplemental grant to an 
approved program entity, the Secretary must consider the 
economic need of the approved program entity. Supplemental 
grants under this subsection may not exceed $100,000.
    Subsection (e). Endowment Grant Award:
    Paragraph (1). This paragraph provides that to be eligible 
for an endowment grant under the Program, an approved program 
entity must develop and obtain the approval of the Secretary 
for a comprehensive community development strategy that (A) is 
designed to reduce economic or social distress resulting from 
poverty, high unemployment, outmigration, plant closings, 
agricultural downturn, declines in the natural resource-based 
economy, or environmental degradation; (B) addresses a broad 
range of the development needs of a community, including 
economic, social, and environmental needs, for a period of not 
less than 10 years; (C) is developed with input from a broad 
array of local governments and business, civic, and community 
organizations; (D) specifies measurable performance-based 
outcomes for all activities; and (E) includes a financial plan 
for achieving the outcomes and activities of the comprehensive 
community development strategy that identifies sources for, or 
a plan to meet, the requirement for a non-Federal share under 
this section.
    Paragraph (2). This paragraph provides that an approved 
program entity will receive final approval if the Secretary 
determines that (i) the comprehensive community development 
strategy of the approved program entity meets the requirements 
of this section; (ii) the management and organizational 
structure of the approved program entity is sufficient to 
oversee fund and development activities; (iii) the approved 
program entity has established an endowment fund; and (iv) the 
approved program entity will be able to provide the non-Federal 
share required under this section. As part of the final 
approval, the approved program entity must agree to achieve, to 
the maximum extent practicable, performance-based benchmarks, 
and to comply with the terms of the comprehensive community 
development strategy for a period of not less than 10 years.
    Subsection (f). Endowment Grants:
    Paragraph (1). This paragraph provides that under the 
Program, the Secretary may make endowment grants to approved 
program entities with final approval to implement an approved 
comprehensive community development strategy.
    Paragraph (2). This paragraph provides that an endowment 
grant to an approved program entity shall be in an amount of 
not more than $6,000,000, as determined by the Secretary based 
on (A) the size of the population of the eligible rural area 
for which the endowment grant is to be used; (B) the size of 
the eligible rural area for which the endowment grant is to be 
used; (C) the extent ofthe comprehensive community development 
strategy to be implemented using the endowment grant award; and (D) the 
extent to which the community suffers from economic or social distress 
resulting from poverty, high unemployment, outmigration, plant 
closings, agricultural downturn, declines in the natural resource-based 
economy, or environmental degradation.
    Paragraph (3). This paragraph provides that on notification 
from the Secretary that the program entity has been approved 
under subsection (c), the approved program entity shall 
establish an endowment fund. Federal funds provided in the form 
of an endowment grant under the Program will be deposited in 
the endowment fund, will be the sole property of the approved 
program entity, will be used in a manner consistent with this 
subtitle, and will be subject to oversight by the Secretary for 
a period of not more than 10 years. Interest earned on Federal 
funds in the endowment fund will be retained by the grantee and 
treated as Federal funds are treated under this paragraph. The 
Secretary will promulgate regulations on matching funds and 
returns on program-related investments only to the extent that 
such funds or proceeds are used in a manner consistent with 
this subtitle.
    Paragraph (4). This paragraph provides that each endowment 
grant award will be disbursed during a period not to exceed 
five years beginning during the fiscal year containing the date 
of final approval of the approved program entity. The Secretary 
may disburse a grant award in one lump sum or in incremental 
disbursements made each fiscal year. If the Secretary elects to 
make incremental disbursements, for each fiscal year after the 
initial disbursement, the Secretary will make a disbursement 
only if the approved program entity has met the performance-
based benchmarks of the approved program entity for the 
preceding fiscal year, and has provided the non-Federal share 
required for the preceding fiscal year under this paragraph. 
The Secretary may make disbursements under this paragraph 
notwithstanding any provision of law limiting grant 
disbursements to amounts necessary to cover expected expenses 
on a term basis. For each disbursement under this paragraph, 
the Secretary will require the approved program entity to 
provide a non-Federal share in an amount equal to 50 percent of 
the amount of funds received by the entity under the 
disbursement. In the case of an approved program entity that 
serves a small, poor rural area (as determined by the 
Secretary), the Secretary may reduce the non-Federal share to 
not less than 20 percent and allow the non-Federal share to be 
provided in the form of in-kind contributions. For the purpose 
of meeting the non-Federal share requirement with respect to 
the first disbursement of an endowment grant award to the 
approved program entity under the Program, an approved program 
entity must have, at a minimum, binding commitments to provide 
the non-Federal share required with respect to the first 
disbursement of the endowment grant award, and if the Secretary 
is making incremental disbursements of a grant, must develop a 
viable plan for providing the remaining amount of the required 
non-Federal share. Of each disbursement, an approved program 
entity will use not more than 10 percent for administrative 
costs of carrying out program-related investments, not more 
than 20 percent for the purpose of maintaining a loss reserve 
account, and the remainder for program-related investments 
contained in the comprehensive community development strategy. 
If all disbursed funds available under a grant are expended and 
the grant recipient has no expected losses to cover for a 
fiscal year, the recipient may use funds in the loss reserve 
account for program-related investments for which no reserve 
for losses is required. Under the Program, the Secretary will 
provide and coordinate technical assistance for grant 
recipients by designated field staff of federal agencies.
    Subsection (h). This subsection provides that the Secretary 
may make grants to qualified intermediaries to provide 
technical assistance and capacity building to approved program 
entities under the Program. A qualified intermediary that 
receives a grant under this subsection must provide assistance 
to approved program entities in developing, coordinating, and 
overseeing investment strategy, provide technical assistance in 
all aspects of planning, developing, and managing the Program, 
and facilitate Federal and private sector involvement in rural 
community development. To be considered a qualified 
intermediary under this subsection, an intermediary must be a 
private, nonprofit community development organization, have 
expertise in Federal or private rural community development 
policy or programs, and have experience in providing technical 
assistance, planning, and capacity building assistance to rural 
communities and nonprofit entities in eligible rural areas. A 
qualified intermediary may receive a grant under this 
subsection of not more than $100,000. Of the amounts made 
available under section 385D, the Secretary may use to carry 
out this subsection not more than $2,000,000 for each of not 
more than 2 fiscal years.

Section 385D. Funding

    This section provides $82 million in mandatory funds to 
carry out the Rural Endowment Program during fiscal years 2002 
and 2003, with not more than $5 million to be obligated for 
planning grants, not less than $75 million for endowment grants 
and not less than $2 million for technical assistance. It 
authorizes such appropriations as are necessary to carry out 
the program for each of fiscal years 2004 through 2006.

Section 605. Enhancement of access to broadband service in rural areas

    This section amends the Rural Electrification Act of 1936 
(7 U.S.C. 901 et seq.) as follows:
    Section 601. Access to broadband telecommunications 
services in rural areas.
    Subsection (a). This subsection states that the purpose of 
this section is to provide grants, loans, and loan guarantees 
to provide funds for the costs of the construction, 
improvement, and acquisition of facilities and equipment for 
broadband service in eligible rural communities.
    Subsection (b). This section defines terms used in this 
section.
    Subsection (c). This subsection provides that the Secretary 
will make grants to eligible entities described in subsection 
(e)(1) to provide funds for the construction, improvement, or 
acquisition of facilities and equipment for the provision of 
broadband service in eligible rural communities.
    Subsection (d). This subsection provides that the Secretary 
will make or guarantee loans to eligible entities described in 
subsection (e)(2) to provide funds for the construction, 
improvement, or acquisition of facilities and equipment for the 
provision of broadband service in eligible rural communities.
    Subsection (e). Eligible Entities.
    Paragraph (1). This paragraph provides that to be eligible 
to obtain a grant under this section, an entity must (A) be a 
nonprofit entity; (B) be eligible to obtain a loan or loan 
guarantee to furnish, improve, or extend a rural 
telecommunications service under this Act; and (C) submit to 
the Secretary a proposal for a project that meets the 
requirements of subsection (g).
    Paragraph (2). This paragraph provides that to be eligible 
to obtain a loan or loan guarantee under this section, an 
entity must (A) be eligible to obtain a loan or loan guarantee 
to furnish, improve, or extend a rural telecommunications 
service under this Act; and (B) submit to the Secretary a 
proposal for a project that meets the requirements of 
subsection (g).
    Subsection (f). This subsection provides that the Secretary 
shall, from time to time as advances in technology warrant, 
review and recommend modifications of rate-of-data transmission 
criteria for purposes of the identification of broadband 
service technologies under subsection (b).
    Subsection (g). This subsection provides that for purposes 
of determining whether or not to make a grant, loan, or loan 
guarantee for a project under this section, the Secretary will 
not take into consideration the type of technology proposed to 
be used under the project.
    Subsection (h). This subsection provides that a loan or 
loan guarantee under subsection (d) will (1) be made available 
in accordance with the requirements of the Federal Credit 
Reform Act of 1990 (2 U.S.C. 661 et seq.); (2) bear interest at 
an annual rate of, as determined by the Secretary, 4 percent 
per annum, or the current applicable market rate; and (3) have 
a term not to exceed the useful life of the assets constructed, 
improved, or acquired with the proceeds of the loan or 
extension of credit.
    Subsection (i). This subsection provides that 
notwithstanding any other provision of this Act, the proceeds 
of any loan made by the Secretary under this Act may be used by 
the recipient of the loan for the purpose of refinancing an 
outstanding obligation of the recipient on another 
telecommunications loan made under this Act if the use of the 
proceeds for that purpose will further the construction, 
improvement, or acquisition of facilities and equipment for the 
provision of broadband service in eligible rural communities.
    Subsection (j). Funding:
    Paragraph (1). This paragraph provides that not later than 
30 days after the date of enactment of this Act, and on October 
1, 2002, and each October 1 thereafter through October 1, 2005, 
out of any funds in the Treasury not otherwise appropriated, 
the Secretary of the Treasury will transfer to the Secretary of 
Agriculture to carry out this section $100,000,000, to remain 
available until expended.
    Paragraph (2). This paragraph provides that the Secretary 
will be entitled to receive, will accept, and will use to carry 
out this section the funds transferred under paragraph (1), 
without further appropriation.
    Paragraph (3). This paragraph provides that from amounts 
made available for each fiscal year under paragraph (1), the 
Secretary will establish a national reserve for grants, loans, 
and loan guarantees to eligible entities in States under this 
section, and will allocate amounts in the reserve to each State 
for each fiscal year for grants, loans, and loan guarantees to 
eligible entities in the State. The amount of an allocation 
made to a State for a fiscal year will bear the same ratio to 
the amount of allocations made for all States for the fiscal 
year as the number of communities with a population of 2,500 
inhabitants or less in the State bears to the number of 
communities with a population of 2,500 inhabitants or less in 
all States, as determined on the basis of the last available 
census. Any amounts in the reserve established for a State for 
a fiscal year that are not obligated by April 1 of the fiscal 
year will be available to the Secretary to make grants, loans, 
and loan guarantees under this section to eligible entities in 
any State, as determined by the Secretary.
    Subsection (k). This subsection provides that no grant, 
loan, or loan guarantee may be made under this section after 
September 30, 2006, but that any grant, loan, or loan guarantee 
made under this section before that date shall be valid.

Section 606. Value-added agricultural product market development grants

    This section amends Section 231 of the Agricultural Risk 
Protection Act of 2000 (7 U.S.C. 1621 note; Public Law 106-224) 
as follows:
    Subsections (b) through (d) are redesignated subsections 
(c) through (e) and a new subsection (a) and subsection (b) are 
added.
    Subsection (a). This subsection adds a new definition of 
``value-added agricultural product.'' Currently, there is no 
statutory definition of this term. The term ``value-added 
agricultural product'' means any agricultural commodity or 
product that (1) has undergone a change in physical state, or 
was produced in a manner that enhances the value of the 
agricultural commodity or product, as demonstrated through a 
business plan that shows the enhanced value, as determined by 
the Secretary; and (2) as a result of the change in physical 
state or the manner in which the agricultural commodity or 
product was produced, the customer base for the agricultural 
commodity or product has been expanded, and a greater portion 
of the revenue derived from the processing of the agricultural 
commodity or product is available to the producer of the 
commodity or product.
    Subsection (b). Grant Program:
    Paragraph (1). This paragraph adds a list of purposes to 
the section. The purposes of the value-added agricultural 
product market development grant program are (A) to increase 
the share of the food and agricultural system profit received 
by agricultural producers; (B) to increase the number and 
quality of rural self-employment opportunities in agriculture 
and agriculturally-related businesses and the number and 
quality of jobs in agriculturally-related businesses; (C) to 
help maintain a diversity of size in farms and ranches by 
stabilizing the number of small and mid-sized farms; (D) to 
increase the diversity of food and other agricultural products 
available to consumers, including nontraditional crops and 
products and products grown or raised in a manner that enhances 
the value of the products to the public; (E) to conserve and 
enhance the quality of land, water, and energy resources, 
wildlife habitat, and other landscape values and amenities in 
rural areas.
    Paragraph (2). This paragraph provides that for each of 
fiscal years 2002 through 2006, the Secretary will use 
$75,000,000 in funds transferred from the Treasury to the 
Secretary to award competitive grants (A) to an eligible 
independent producer (as determined by the Secretary) of a 
value-added agricultural product to assist the producer in 
developing a business plan for viable marketing opportunities 
for the value-added agricultural product, or in developing 
strategies that are intended to create marketing opportunities 
for the producer; and (B) to an eligible nonprofit entity (as 
determined by the Secretary) to assist the entity in developing 
a business plan for viable marketing opportunities in emerging 
markets for a value-added agricultural product, in developing 
strategies that are intended to create marketing opportunities 
in emerging markets for the value-added agricultural product. 
Also, existing law does not allow nonprofit entities to be 
eligiblefor value-added agricultural product market development 
grants.
    Paragraph (3). This paragraph provides that the total 
amount provided under this subsection to a grant recipient may 
not exceed $500,000. The Secretary must give priority to grant 
proposals for less than $200,000 submitted under this 
subsection.
    Paragraph (4). This paragraph provides that a grantee under 
paragraph (2) will use the grant to develop a business plan or 
perform a feasibility study to establish a viable marketing 
opportunity for a value-added agricultural product, or to 
provide capital to establish alliances or business ventures 
that allow the producer of the value-added agricultural product 
to better compete in domestic or international markets.
    Paragraph (5). This paragraph establishes a new reserve for 
grants for marketing or processing certified organic 
agricultural products. It provides that out of any amount that 
is made available to the Secretary for a fiscal year under 
paragraph (2), the Secretary will use not less than five 
percent of the amount for grants to assist producers of 
certified organic agricultural products in post-farm marketing 
or processing of the products through business or cooperative 
ventures that expand the customer base of the certified organic 
agricultural products, and increase the portion of product 
revenue available to the producers. For the purposes of this 
paragraph, a certified organic agricultural product does not 
have to meet the requirements of the definition of `value-added 
agricultural product' under subsection (a). If, for any fiscal 
year, the Secretary receives an insufficient quantity of 
applications for grants described in this paragraph to use the 
funds reserved, the Secretary may use the excess reserved funds 
to make grants for any other purpose authorized under this 
section.
    This section also increases funding for the Agricultural 
Marketing Resource Center, created to provide technical 
assistance to recipients of grants under this program, from 
$5,000,000 under existing law to 7.5 percent of the funding 
made available under this section.

Section 607. National Rural Development Information Clearinghouse

    This section amends Section 2381 of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (7 U.S.C. 3125b) as 
follows:
    Subsection (a). This subsection provides that the Secretary 
shall establish and maintain, within the rural development 
mission area of the Department of Agriculture, a National Rural 
Development Information Clearinghouse (referred to in this 
section as the ``Clearinghouse'') to perform the functions 
specified in subsection (b).
    Subsection (b). This subsection provides that the 
Clearinghouse will collect information and data from, and 
disseminate information and data to, any person or public or 
private entity about programs and services provided by Federal, 
State, local, and tribal agencies, institutions of higher 
education, and private, for-profit and nonprofit organizations 
and institutions under which a person or public or private 
entity residing or operating in a rural area may be eligible 
for any kind of financial, technical, or other assistance, 
including business, venture capital, economic, credit and 
community development assistance, health care, job training, 
education, and emotional and financial counseling.
    Subsection (c). This subsection provides that in addition 
to other modes for the collection and dissemination of the 
types of information and data specified under subsection (b), 
the Secretary will ensure that the Clearinghouse maintains an 
Internet website that provides for dissemination and 
collection, through voluntary submission or posting, of the 
information and data.
    Subsection (d). This subsection provides that on request of 
the Secretary and to the extent permitted by law, the head of a 
Federal agency will provide to the Clearinghouse such 
information as the Secretary may request to enable the 
Clearinghouse to carry out this section.
    Subsection (e). This subsection provides that the Secretary 
will request State, local, and tribal governments, institutions 
of higher education, and nonprofit and for-profit organizations 
and institutions to provide to the Clearinghouse information 
concerning applicable programs or services described in 
subsection (b).
    Subsection (f). This subsection requires the Secretary 
prominently to promote the existence and availability of the 
Clearinghouse in all activities of the Department of 
Agriculture relating to rural areas of the United States.
    Subsection (g). This subsection provides that the Secretary 
will use to operate and maintain the Clearinghouse not more 
than $600,000 of the funds available to the Rural Housing 
Service, the Rural Utilities Service, and the Rural Business-
Cooperative Service for each fiscal year. Funds available to 
the Rural Housing Service, the Rural Utilities Service, and the 
Rural Business-Cooperative Service for the payment of loan 
costs (as defined in section 502 of Federal Credit Reform Act 
of 1990 (2 U.S.C. 661a)) will not be used to operate and 
maintain the Clearinghouse.

           Subtitle B--National Rural Development Partnership


Section 611. Short title

    This subtitle may be cited as the ``National Rural 
Development Partnership Act of 2001.''

Section 612. National Rural Development Partnership

    This section amends the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1981 et seq.) as follows:

Section 377. National Rural Development Partnership

    Subsection (a). This subsection defines terms used in this 
section.
    Subsection (b). Partnership:
    Paragraph (1). This paragraph provides that the Secretary 
will continue the National Rural Development Partnership 
composed of (A) the Coordinating Committee; and (B) State rural 
development councils.
    Paragraph (2). This paragraph states that the purposes of 
the Partnership are (A) to empower and build the capacity of 
States and rural communities within States to design unique 
responses to their own special rural development needs, with 
local determinations of progress and selection ofprojects and 
activities; (B) to encourage participants to be flexible and innovative 
in establishing new partnerships and trying fresh, new approaches to 
rural development issues, with responses to rural development that use 
different approaches to fit different situations; and (C) to encourage 
all partners in the Partnership (Federal, State, local, and tribal 
governments, the private sector, and nonprofit organizations) to be 
fully engaged and share equally in decisions.
    Paragraph (3). This paragraph provides that a panel 
consisting of representatives of the Coordinating Committee and 
State rural development councils will be established to lead 
and coordinate the strategic operation, policies, and practices 
of the Partnership. In conjunction with the Coordinating 
Committee and State rural development councils, the panel will 
prepare and submit to Congress an annual report on the 
activities of the Partnership.
    Paragraph (4). This paragraph provides that the role of the 
Federal Government in the Partnership will be that of a partner 
and facilitator, with Federal agencies authorized (A) to 
cooperate with States to implement the Partnership; (B) to 
provide States with the technical and administrative support 
necessary to plan and implement tailored rural development 
strategies to meet local needs; (C) to ensure that the head of 
each agency designates a senior-level agency official to 
represent the agency on the Coordinating Committee and directs 
appropriate field staff to participate fully with the State 
rural development council within the jurisdiction of the field 
staff; and (D) to enter into cooperative agreements with, and 
to provide grants and other assistance to State rural 
development councils.
    Paragraph (5). This paragraph provides that private and 
nonprofit sector organizations are encouraged to act as full 
partners in the Partnership and State rural development 
councils, and to cooperate with participating government 
organizations in developing innovative approaches to the 
solution of rural development problems.
    Subsection (c). National Rural Development Coordinating 
Committee:
    Paragraph (1). This paragraph provides that the Secretary 
will establish a National Rural Development Coordinating 
Committee.
    Paragraph (2). This paragraph provides that the 
Coordinating Committee will be composed of (A) one 
representative of each agency with rural responsibilities that 
elects to participate in the Coordinating Committee; and (B) 
representatives, approved by the Secretary, of (i) national 
associations of State, regional, local, and tribal governments 
and intergovernmental and multijurisdictional agencies and 
organizations; (ii) national public interest groups; (iii) 
other national nonprofit organizations that elect to 
participate in the activities of the Coordinating Committee; 
and (iv) the private sector.
    Paragraph (3). This paragraph provides that the 
Coordinating Committee will (A) provide support for the work of 
the State rural development councils; (B) facilitate 
coordination among Federal programs and activities, and with 
State, local, tribal, and private programs and activities, 
affecting rural development; (C) enhance the effectiveness, 
responsiveness, and delivery of Federal programs in rural 
areas; (D) gather and provide to Federal authorities 
information and input for the development and implementation of 
Federal programs impacting rural economic and community 
development; (E) notwithstanding any other provision of law, 
review and comment on policies, regulations, and proposed 
legislation that affect or would affect rural areas; (F) 
provide technical assistance to State rural development 
councils for the implementation of Federal programs; (G) 
notwithstanding any other provision of law, develop and 
facilitate strategies to reduce or eliminate administrative and 
regulatory impediments; and (H) require each State receiving 
funds under this section to submit an annual report on the use 
of the funds by the State, including a description of strategic 
plans, goals, performance measures, and outcomes for the State 
rural development council of the State.
    Paragraph (4). This paragraph provides that an agency with 
rural responsibilities that elects not to participate in the 
Partnership and the Coordinating Committee will submit to 
Congress a report that describes how the programmatic 
responsibilities of the Federal agency that target or have an 
impact on rural areas are better achieved without participation 
by the agency in the Partnership, and that describes a more 
effective means of partnership-building and collaboration to 
achieve the programmatic responsibilities of the agency.
    Subsection (d). State Rural Development Councils:
    Paragraph (1). This paragraph provides that notwithstanding 
chapter 63 of title 31, United States Code, each State may 
elect to participate in the Partnership by entering into an 
agreement with the Secretary to establish a State rural 
development council.
    Paragraph (2). This paragraph provides that each State 
rural development council must have a nonpartisan membership 
that is broad and representative of the economic, social, and 
political diversity of the State, and must carry out programs 
and activities in a manner that reflects the diversity of the 
State.
    Paragraph (3). This paragraph provides that a State rural 
development council must (A) facilitate collaboration among 
Federal, State, local, and tribal governments and the private 
and nonprofit sectors in the planning and implementation of 
programs and policies that target or have an impact on rural 
areas of the State; (B) enhance the effectiveness, 
responsiveness, and delivery of Federal and State programs in 
rural areas of the State; (C) gather and provide to the 
Coordinating Committee and other appropriate organizations 
information on the condition of rural areas in the State; (D) 
monitor and report on policies and programs that address, or 
fail to address, the needs of the rural areas of the State; (E) 
provide comments to the Coordinating Committee and other 
appropriate organizations on policies, regulations, and 
proposed legislation that affect or would affect the rural 
areas of the State; (F) notwithstanding any other provision of 
law, in conjunction with the Coordinating Committee, facilitate 
the development of strategies to reduce or eliminate 
conflicting or duplicative administrative or regulatory 
requirements of Federal, State, local, and tribal governments; 
(G) use grant or cooperative agreement funds provided by the 
Partnership under an agreement entered into under paragraph (1) 
to retain an Executive Director and such support staff as are 
necessary and pay expenses associated with carrying out 
subparagraphs (A) through (F); and (H) provide to the 
Coordinating Committee an annual plan with goals and 
performance measures and submit to the Coordinating Committee 
an annual report on the progress of the State rural development 
council in meeting the goals and measures.
    Paragraph (4). This paragraph provides that a State rural 
development council may solicit funds to supplement and match 
funds provided under paragraph (3)(G), and may engage in 
activities, in addition to those specified in paragraph (3), 
appropriate to accomplish the purposes for which the State 
rural development council is established.
    Paragraph (5). This paragraph provides that a State rural 
development council may provide comments and recommendations to 
an agency with rural responsibilities related to the activities 
of the State rural development council within the State.
    Paragraph (6). This paragraph provides that when carrying 
out a program or activity authorized by a State rural 
development council or this subtitle, a member of the council 
shall beregarded as a full-time employee of the Federal 
Government for purposes of chapter 171 of title 28, United States Code, 
and the Federal Advisory Committee Act (5 U.S.C. App.).
    Paragraph (7). Federal participation in state rural 
development councils.
    Subparagraph (A). This subparagraph provides that the State 
Director for Rural Development of a State, other employees of 
the Department of Agriculture, and employees of other Federal 
agencies that elect to participate in the Partnership shall 
fully participate in the governance and operations of State 
rural development councils on an equal basis with other members 
of the State rural development councils.
    Subparagraph (B). This subparagraph provides that a Federal 
employee who participates in a State rural development council 
cannot participate in the making of any council decision if the 
agency represented by the Federal employee has any financial or 
other interest in the outcome of the decision.
    Subparagraph (C). This subparagraph provides that the 
Office of Government Ethics, in consultation with the Attorney 
General, will issue guidance to all Federal employees that 
participate in State rural development councils that describes 
specific decisions that would constitute a conflict of interest 
for the Federal employee and from which the Federal employee 
must recuse himself or herself.
    Subsection (e). This subsection provides that the head of 
an agency with rural responsibilities that elects to 
participate in the Partnership may, and is encouraged to, 
detail an employee of the agency with rural responsibilities to 
the Partnership without reimbursement for a period of up to 12 
months. The detail will be without interruption or loss of 
civil service status or privilege. The Secretary will provide 
for any additional support staff to the Partnership as the 
Secretary determines to be necessary to carry out the duties of 
the Partnership.
    Subsection (f). This subsection authorizes appropriation of 
such sums as are necessary to carry out this section. In 
providing financial assistance to State rural development 
councils, the Secretary and heads of other Federal agencies 
will provide assistance that, to the maximum extent 
practicable, is uniform in amount and targeted to newly created 
State rural development councils. The Secretary must develop a 
plan to decrease, over time, the Federal share of the cost of 
the core operations of State rural development councils. 
Notwithstanding any other provision of law limiting the ability 
of an agency to provide funds to the Partnership with other 
agencies, in order to carry out the purposes described in 
subsection (b)(3), the Partnership will be eligible to receive 
grants, gifts, contributions, or technical assistance from, or 
enter into contracts with, any Federal agency. Federal agencies 
are encouraged to use funds made available for programs that 
target or have an impact on rural areas to provide assistance 
to, and enter into contracts with, the Partnership. The 
Partnership may accept private contributions. Notwithstanding 
any other provision of law, a Federal agency may use funds made 
available under paragraph (1) or (2) to enter into a 
cooperative agreement, contract, or other agreement with a 
State rural development council to support the core operations 
of the State rural development council, regardless of the legal 
form of organization of the State rural development council.
    Subsection (g). This subsection provides that a State rural 
development council must provide matching funds, or in-kind 
goods or services, to support the activities of the State rural 
development council in an amount that is not less than 33 
percent of the amount of Federal funds received under an 
agreement under subsection (d). This requirement will not apply 
to funds, grants, funds provided under contracts or cooperative 
agreements, gifts, contributions, or technical assistance 
received by a State rural development council from a Federal 
agency that are used to support one or more specific program or 
project activities or to reimburse the State rural development 
council for services provided to the Federal agency providing 
the funds, grants, funds provided under contracts or 
cooperative agreements, gifts, contributions, or technical 
assistance.
    Subsection (h). This subsection provides that the authority 
provided under this section shall terminate on the date that is 
five years after the date of enactment of this section.

        Subtitle C--Consolidated Farm and Rural Development Act


Section 621. Water or waste disposal grants

    This section amends Section 306(a)(2) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1926(a)(2)) by 
increasing the authorization for water, waste disposal, and 
wastewater facility grants from $590,000,000 to $1,500,000,000 
and by adding a new subparagraph providing revolving funds for 
financing water and wastewater projects. Under this 
subparagraph, the Secretary may make grants to qualified 
private, nonprofit entities (as determined by the Secretary) to 
capitalize revolving funds for the purpose of financing water 
and wastewater projects under this section. The amount of a 
grant provided to an entity under this provision will not 
exceed $300,000. An additional authorization of $30,000,000 for 
each of fiscal years 2002 through 2006 is provided to carry out 
this subparagraph.

Section 622. Rural business opportunity grants

    This section extends this grant program through 2006.

Section 623. Rural Water and Wastewater Circuit Rider Program

    This section amends Section 306(a) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1926(a)) by adding a new 
paragraph at the end establishing a rural water and wastewater 
circuit rider program based on the rural water circuit rider 
program of the National Rural Water Association that (as of the 
date of enactment of this paragraph) receives funding from the 
Secretary, acting through the Rural Utilities Service. The 
program established under this paragraph will not affect the 
authority of the Secretary to carry out, during fiscal year 
2002, the circuit rider program for which funds are made 
available under the heading ``Rural Community Advancement 
Program'' of title III of the Agriculture, Rural Development, 
Food and Drug Administration, and Related Agencies 
Appropriations Act, 2002. There is authorized to be 
appropriated to carry out this paragraph $15,000,000 for each 
of fiscal years 2003 through 2006.

Section 624. Multi-jurisdictional regional planning organizations

    This section amends Section 306(a) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1926(a)) (as amended by 
section 623) by adding a new paragraph at the end establishing 
multi-jurisdictional regional planning organizations. The 
Secretary will provide grants to multi-jurisdictional regional 
planning and development organizations to pay the Federal share 
of the cost of providing assistance to local governments to 
improve the infrastructure, services, and businessdevelopment 
capabilities of local governments and local economic development 
organizations. In determining which organizations will receive a grant 
under this paragraph, the Secretary will give priority to an 
organization that (1) serves a rural area that, during the most recent 
five-year period, had a net out-migration of inhabitants, or other 
population loss, from the rural area that equals or exceeds five 
percent of the population of the rural area, or had a median household 
income that is less than the nonmetropolitan median household income of 
the applicable State; and (2) has a history of providing substantive 
assistance to local governments and economic development organizations. 
The Federal share of a grant provided under this paragraph shall be not 
more than 75 percent of the cost of providing assistance. The amount of 
a grant provided to an organization under this paragraph shall not 
exceed $100,000. There is authorized to be appropriated to carry out 
this paragraph $30,000,000 for each of fiscal years 2003 through 2006.

Section 625. Certified nonprofit organizations sharing expertise

    This section amends Section 306(a) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1926(a)) (as amended by 
section 624) by adding at the end a paragraph providing for the 
certification of nonprofit organizations that provide technical 
assistance. To be certified by the Secretary to provide 
technical assistance in one or more rural development fields, 
an organization must be a nonprofit organization (which may 
include an institution of higher education) with experience in 
providing technical assistance in the applicable rural 
development field, must develop a plan, approved by the 
Secretary, describing the manner in which grant funds will be 
used and the source of non-Federal funds, and must meet such 
other criteria as the Secretary may establish, based on the 
needs of eligible entities for the technical assistance. The 
Secretary will make available to the public a list of certified 
organizations in each area that the Secretary determines have 
substantial experience in providing the assistance described in 
this paragraph. The Secretary may provide grants to certified 
organizations to pay for costs of providing technical 
assistance to local governments and nonprofit entities to 
improve the infrastructure, services, and business development 
capabilities of local governments and local economic 
development organizations. There is authorized to be 
appropriated to carry out this paragraph $20,000,000 for each 
of fiscal years 2003 through 2006.

Section 626. Loan guarantees for certain rural development loans

    Subsection (a). This subsection amends Section 306(a) of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 
1925(a)) (as amended by section 625) by adding at the end a new 
paragraph allowing loan guarantees for water, wastewater, and 
essential community facilities loans in cases where the project 
in question is financed by the net proceeds of a bond described 
in section 144(a)(12)(B)(ii) of the Internal Revenue Code of 
1986. To be eligible for a loan guarantee under subparagraph 
(A), an individual or entity offering to purchase the loan must 
demonstrate to the Secretary that the person has the 
capabilities and resources necessary to service the loan in a 
manner that ensures the continued performance of the loan, as 
determined by the Secretary, and the ability to generate 
capital to provide borrowers of the loan with the additional 
credit necessary to properly service the loan.
    Subsection (b). This subsection amends Section 310B of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1932) by 
adding at the end a provision allowing the Secretary to 
guarantee loans made in subsection (a) to finance the issuance 
of bonds for the projects described in section 306(a)(25).

Section 627. Rural Firefighters and Emergency Personnel Grants Program

    This section amends Section 306(a) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1926(a)) (as amended by 
section 626(a)) by adding at the end a paragraph creating a 
rural firefighters and emergency medical personnel grant 
program. The Secretary may make grants to units of general 
local government and Indian tribes (as defined in section 4 of 
the Indian Self-Determination and Education Assistance Act (25 
U.S.C. 450b)) to pay the cost of training firefighters and 
emergency medical personnel in firefighting, emergency medical 
practices, and responding to hazardous materials and bioagents 
in rural areas. Not less than 60 percent of the amounts made 
available for competitively awarded grants under this paragraph 
will be used to provide grants to fund partial scholarships for 
training of individuals at training centers approved by the 
Secretary. In awarding grants under this clause, the Secretary 
shall give priority to grant applicants with relatively low 
transportation costs considering the location of the grant 
applicant and the proposed location of the training. A grant 
may be used to provide financial assistance to State and 
regional centers that provide training for firefighters and 
emergency medical personnel for improvements to the training 
facility, equipment, curricula, and personnel. Not more than 
$2,000,000 shall be provided to any single training center for 
any fiscal year. A grant may be used to provide the Federal 
share of the costs of establishing a regional training center 
for firefighters and emergency medical personnel. The amount of 
a grant under this subclause for a training center shall not 
exceed 50 percent of the cost of establishing the training 
center. Out of any funds in the Treasury not otherwise 
appropriated, the Secretary of the Treasury shall transfer to 
the Secretary of Agriculture to carry out this paragraph (1) 
not later than 30 days after the date of enactment of this Act, 
$10,000,000; and (2) on October 1, 2002, and each October 1 
thereafter through October 1, 2005, $30,000,000. The Secretary 
shall be entitled to receive, shall accept, and shall use to 
carry out this section the funds transferred, without further 
appropriation. Funds transferred under this paragraph shall 
remain available until expended.

Section 628. Emergency Community Water Assistance Grant Program

    This section amends Section 306A(i) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1926c(e)) to extend 
this program through 2006.

Section 629. Water and Waste Facility Grants for Native American Tribes

    This section authorizes appropriations of $20,000,000 a 
year for water and waste facility grants to benefit Indian 
tribes.

Section 630. Water Systems for Rural and Native Villages in Alaska

    This section amends Section 306D(d)(1) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1926d(d)(1)) to extend 
this provision through 2006.

Section 631. Rural Cooperative Development Grants

    This section amends Section 310B(e)(9) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1932(e)(9)) to extend 
the grant program to 2006.

Section 632. Grants to broadcasting systems

    This section amends Section 310B(f) of the Consolidated 
Farm and Rural Development Act by authorizing appropriations of 
$5 million a year for fiscal years 2002 through 2006 in 
appropriated funds for grants to statewide nonprofit public 
television broadcasting systems.

Section 633. Business and Industry Loan modifications

    This section amends Section 310 B of the Consolidated Farm 
and Rural Development Act by striking subsection (g) and 
inserting a new subsection (g) making modifications to the 
business and industry direct and guaranteed loan program.
    Paragraph (1). This paragraph allows the Secretary to 
guarantee a loan under subsection (a) to farmers, ranchers, or 
cooperatives to purchase start up capital stock to expand or 
create a cooperative venture that will process agricultural 
commodities or otherwise process value-added agricultural 
products. In determining the appropriateness of a loan 
guarantee, the Secretary must fully review the feasibility and 
other relevant aspects of the cooperative venture to be 
established, may not require a review of the financial 
condition or statements of any individual in the cooperative 
other than the applicant, and must base any guarantee on the 
merits of the cooperative venture to be established. The 
Secretary is restricted from requiring additional collateral by 
a farmer or rancher other than the stock purchased or issued 
pursuant to the loan and guarantee of the loan. A farmer or 
rancher must produce the agricultural commodity that will be 
processed by the cooperative to be eligible for the loan 
guarantee. The cooperative may contract for services to process 
agricultural commodities, or otherwise process value-added 
agricultural products, during the five-year period beginning on 
the date of the startup in order to provide adequate time for 
planning and construction. With respect to existing 
cooperatives, the Secretary may guarantee a loan under 
subsection (a) to a farmer or rancher to join a cooperative in 
order to sell the agricultural commodities or products produced 
by the farmer or rancher. Financial information required by the 
Secretary will be provided in the manner generally required by 
commercial agricultural lenders in the area.
    Paragraph (2). This paragraph allows the Secretary to make 
or guarantee a loan under subsection (a) to a cooperative that 
is headquartered in a metropolitan area if the loan is used for 
a project or venture described in subsection (a) of Section 310 
B of the Consolidated Farm and Rural Development Act that is 
located in a rural area. A cooperative organization owned by 
farmers or ranchers that is eligible for a business and 
industry loan under made or guaranteed under subsection (a) 
will be eligible to refinance an existing loan with a new 
lender if the cooperative organization is current and 
performing with respect to the existing loan and is not, and 
has not been, in default with respect to the existing loan, and 
if there is adequate security or full collateral for the 
refinanced loan.
    Paragraph (3). This paragraph allows the Secretary to 
require that any appraisal made in connection with a loan made 
or guaranteed under subsection (a) Section 310 B of the 
Consolidated Farm and Rural Development Act be conducted by a 
specialized appraiser that uses standards that are similar to 
standards used for similar purposes in the private sector, as 
determined by the Secretary.
    Paragraph (4). This paragraph allows the Secretary to 
assess an one-time fee for any loan guaranteed under subsection 
(a) Section 310 B of the Consolidated Farm and Rural 
Development Act in an amount that does not exceed 2 percent of 
the guaranteed principal portion of the loan.

Section 634. Value-added Intermediary Relending Program

    This section amends section 310B of the Consolidated Farm 
and Rural Development Act by adding a new subsection 
establishing the ``Value-Added Intermediary Relending 
Program.''
    Paragraph (1). This paragraph directs the Secretary to make 
loans under the terms and conditions of the intermediary 
relending program established under section 1323(b)(2)(C) of 
the Food Security Act of 1985.
    Paragraph (2). Loans. This paragraph directs the Secretary 
to make loans to eligible intermediaries to make loans for 
projects to establish, enlarge, and operate enterprises that 
add value to agricultural commodities and products of 
agricultural commodities.
    Paragraph (3). This paragraph makes State agencies eligible 
as intermediaries to receive loans.
    Paragraph (4). This paragraph directs eligible 
intermediaries to give preference to bioenergy projects in 
accordance with regulations promulgated by the Secretary.
    Paragraph (5). This paragraph provides that the capital 
provided for a project by an ultimate recipient and assisted 
with loan funds made available under paragraph (2) will consist 
of not more than 15 percent of the total cost of a project and 
not less than 50 percent of the equity funds provided by 
agricultural producers.
    Paragraph (6). This paragraph provides that a loan made to 
an intermediary will not exceed a term of 30 years. The 
interest on such a loan will be 0 percent for the first two 
years and 2 percent for each of the remaining years.
    Paragraph (7). This paragraph provides that an intermediary 
or ultimate recipient will be eligible to receive not more than 
$2,000,000 of the loan funds made available under paragraph 
(2), but this limitation will not apply in the case of a State 
agency with respect to loan funds provided to the State agency 
as an intermediary.
    Paragraph (8). This paragraph authorizes $15,000,000 to be 
appropriated for each of fiscal years 2003 through 2006 to 
carry out this subsection.

Section 635. Use of rural development loans and grants for other 
        purposes

    This section amends Subtitle A of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1921 et seq.) (as amended by 
section 508) by adding at the end a section allowing the use of 
rural development loans and grants for other purposes. It 
provides that if, after making a loan or a grant described in 
section 381E(d), the Secretary determines that the 
circumstances under which the loan or grant was made have 
sufficiently changed to make the project or activity for which 
the loan or grant was made available no longer appropriate, the 
Secretary may allow the loan borrower or grant recipient to use 
property (real and personal) purchased or improved with the 
loan or grant funds, or proceeds from the sale of property 
(real and personal) purchased or improved with such funds, for 
another project or activity that (as determined by the 
Secretary): (1) will be carried out in the same area as the 
original project or activity; (2) meets the criteria for a loan 
or a grant described in section 381E(d); and (3) satisfies such 
additional requirements as are established by the Secretary.

Section 636. Simplified application forms for loan guarantees

    This section amends section 333A of the Consolidated Farm 
and Rural Development Act (as amended by section 526) by 
striking subsection (g) and inserting a new subsection (g) that 
directs the Secretary to simplify application forms for loan 
guarantees.
    Paragraph (1). This paragraph directs the Secretary to 
provide to lenders a short, simplified application for 
guarantees under this title of (A) farmer program loans with 
principal of $100,000 or less, and (B) business and industry 
guaranteed loans under section 310B(a)(1) the principal amount 
of which is $400,000 or less in the case of a loan guarantee 
made during fiscal year 2002 or 2003 and, in the case of a loan 
guarantee made during any subsequent fiscal year, $400,000 or 
less, or $600,000 or less if the Secretary determines that 
there is not a significant increased risk of a default on the 
loan.
    Paragraph (2). This paragraph directs the Secretary to 
develop an application process that accelerates, to the maximum 
extent practicable, the processing of applications for water 
and waste disposal grants or direct or guaranteed loans under 
paragraph (1) or (2) of section 306(a) for which the grant 
award amount or principal loan amount, respectively, is 
$300,000 or less.
    Paragraph (3). This paragraph directs the Secretary, in 
developing an application under this subsection, to consult 
with commercial and cooperative lenders and to ensure that (i) 
the form can be completed manually or electronically, at the 
option of the lender; (ii) the form minimizes the documentation 
required to accompany the form; (iii) the cost of completing 
and processing the form is minimal; and (iv) the form can be 
completed and processed in an expeditious manner.

Section 637. Definition of rural and rural area

    Subsection (a). This subsection amends Section 343(a) of 
the Consolidated Farm and Rural Development Act (7 U.S.C. 
1991(a)) by adding at the end a definition of ``rural'' and 
``rural area.'' It states that except as otherwise provided in 
this paragraph, the terms ``rural'' and ``rural area'' mean a 
city, town, or unincorporated area that has a population of 
50,000 inhabitants or less, other than an urbanized area 
immediately adjacent to a city, town, or unincorporated area 
that has a population in excess of 50,000 inhabitants. For the 
purpose of water and waste disposal grants and direct and 
guaranteed loans provided under paragraphs (1) and (2) of 
section 306(a), the terms ``rural'' and ``rural area'' mean a 
city, town, or unincorporated area that has a population of no 
more than 10,000 inhabitants. For the purpose of community 
facility direct and guaranteed loans and grants under 
paragraphs (1), (19), (20), and (21) of section 306(a), the 
terms ``rural'' and ``rural area'' mean a city, town, or 
unincorporated area that has a population of no more than 
50,000 inhabitants. For the purpose of business and industry 
direct and guaranteed loans under section 310B(a)(1), the terms 
``rural'' and ``rural area'' mean any area other than a city or 
town that has a population of greater than 50,000 inhabitants 
and the immediately adjacent urbanized area of such city or 
town. For the purpose of provisions dealing with multi-
jurisdictional regional planning organizations and the national 
rural development partnership (sections 306(a)(23) and 377), 
the term ``rural area'' means (i) all the territory of a State 
that is not within the boundary of any standard metropolitan 
statistical area; and (ii) all territory within any standard 
metropolitan statistical area within a census tract having a 
population density of less than 20 persons per square mile, as 
determined by the Secretary according to the most recent census 
of the United States as of any date. For the purpose of 
provisions dealing with the rural entrepreneurs and 
microenterprise assistance program and national rural 
cooperative and business equity fund (section 378 and subtitle 
G), the term ``rural area'' means an area that is located (i) 
outside a standard metropolitan statistical area; or (ii) 
within a community that has a population of 50,000 inhabitants 
or less.
    Subsection (b) Conforming Amendments. This subsection 
provides for conforming amendments.

Section 638. Rural Entrepreneurs and Microenterprise Program

    This section amends Subtitle D of the Consolidated Farm and 
Rural Development Act (as amended by section 612) by adding at 
the end a section establishing the Rural Entrepreneurs And 
Microenterprise Assistance Program.
    Subsection (a). This subsection defines terms used in this 
section.
    Subsection (b). Establishment:
    Paragraph (1). This paragraph directs the Secretary to use 
$10,000,000 in funds transferred from the Treasury in each of 
fiscal years 2002 through 2006 to establish a rural 
entrepreneur and microenterprise program.
    Paragraph (2). This paragraph establishes that the purpose 
of the program will be to help low and moderate income 
individuals acquire the skills necessary to establish new small 
businesses in rural areas and receive continuing technical 
assistance as the individuals begin operating the small 
businesses.
    Subsection (c). Assistance:
    Paragraph (1). This paragraph allows the Secretary to make 
a grant under this section to a qualified organization to (A) 
provide training, technical assistance, or microcredit to a 
rural entrepreneur; (B) provide training, operational support, 
or a rural capacity building service to a qualified 
organization to assist the qualified organization in developing 
microenterprise training, technical assistance, and other 
related services; (C) assist in researching and developing the 
best practices in delivering training, technical assistance, 
and microcredit to rural entrepreneurs; and (D) to carry out 
such other projects and activities as the Secretary determines 
are consistent with the purposes of this section.
    Paragraph (2). This paragraph provides that of the amount 
of funds made available for a fiscal year to make grants under 
this section, the Secretary must ensure that not less than 75 
percent of funds are used to carry out activities described in 
paragraph (1)(A), and not more than 25 percent of the funds are 
used to carry out activities described in subparagraphs (B) 
through (D) of paragraph (1). No single qualified organization 
may receive more than 10 percent of the total funds that are 
made available for a fiscal year to carry out this section. Not 
more than 15 percent of assistance received by a qualified 
organization for a fiscal year under this section may be used 
for administrative expenses.
    Subsection (d). This subsection allows a qualified 
organization that receives a grant under this section to use it 
to provide assistance to other qualified organizations, such as 
small or emerging qualified organizations, subject to 
regulations the Secretary may promulgate.
    Subsection (e). This subsection requires the Secretary to 
ensure that at least 50 percent of the grant funds under this 
section is used to benefit low-income individuals identified by 
the Secretary, including individuals residing on Indian 
reservations.
    Subsection (f). This subsection requires the Secretary to 
ensure, to the maximum extent practicable, that grant 
recipients include qualified organizations of varying sizes, 
and qualified organizations that serve racially and ethnically 
diverse populations.Subsection (g). This subsection provides 
that the Federal share of the cost of a project carried out using funds 
from a grant under this section shall be 75 percent. The non-Federal 
share of the cost of a project may be provided in cash (including 
through fees, grants (including community development block grants), 
and gifts), or in kind.

Section 639. Rural seniors

    Subsection (a). This subsection amends subtitle D of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et 
seq.) (as amended by section 638) by adding a new section 
establishing an Interagency Coordinating Committee for rural 
seniors. The membership of the Committee will consist of (1) 
the Under Secretary of Agriculture for Rural Development, who 
shall serve as chairperson of the Committee; (2) two 
representatives of the Secretary of Health and Human Services, 
of whom one shall have expertise in the field of health care 
and one shall have expertise in the field of programs under the 
Older Americans Act of 1965; (3) one representative of the 
Secretary of Housing and Urban Development; (4) one 
representative of the Secretary of Transportation; and (5) 
representatives of such other Federal agencies as the Secretary 
may designate. The duties of the Committee will be to (1) study 
health care, transportation, technology, housing, 
accessibility, and other areas of need of rural seniors; (2) 
identify successful examples of senior care programs in rural 
communities that could serve as models for other rural 
communities; and (3) not later than one year after the date of 
enactment of this section, submit recommendations for 
administrative and legislative action to the Secretary, the 
Committee on Agriculture of the House of Representatives, and 
the Committee on Agriculture, Nutrition, and Forestry of the 
Senate. Funds available to any Federal agency may be used to 
carry out interagency activities under this section.
    Subsection (b). This subsection amends Subtitle D of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et 
seq.) (as amended by subsection (a)) to provide for grants for 
programs for rural seniors. It directs the Secretary to make 
grants to nonprofit organizations (including cooperatives) to 
pay the Federal share of the cost of programs that (1) provide 
facilities, equipment, and technology for seniors in a rural 
area; and (2) may be replicated in other rural areas. The 
Federal share of a grant under this section shall be not more 
than 20 percent of the cost of a program. The Secretary must 
give priority to proposals that leverage resources to meet 
multiple rural community goals in selecting programs to receive 
grants under section. Appropriations of $25,000,000 for each of 
fiscal years 2003 through 2006 is authorized to carry out this 
section. This subsection also amends Section 306(a)(19) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 
1926(a)(19)) to provide that for each fiscal year, not less 
than 12.5 percent of the funds made available to carry out that 
section will be reserved for grants to pay the Federal share of 
the cost of developing and constructing senior facilities, or 
carrying out other projects that mainly benefit seniors, in 
rural areas. These funds will be reserved only until April 1 of 
each fiscal year.

Section 640. Children's day care facilities

    This section amends Section 306(a)(19) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1926(a)(19)) (as 
amended by Section 639) by adding a reservation of funds for 
children's day care facilities. For each fiscal year, not less 
than 10 percent of the funds made available to carry out this 
paragraph will be reserved for grants to pay the Federal share 
of the cost of developing and constructing day care facilities 
for children in rural areas. These funds will be reserved only 
until April 1 of each fiscal year.

Section 641. Rural Telework

    This section amends Subtitle D of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by 
section 639(b)) by adding the following:

Section 379B. Rural Telework

    Subsection (a). This subsection defines terms used in this 
section.
    Subsection (b). Rural Telework Institute:
    Paragraph (1). This paragraph directs the Secretary to make 
grants to an eligible organization to pay the Federal share of 
the cost of establishing and operating a regional rural 
telework institute to carry out projects described in this 
section.
    Paragraph (2). This paragraph directs the Secretary to 
establish criteria that an organization shall meet to be 
eligible to receive a grant under this subsection.
    Paragraph (3). This paragraph sets a deadline for the 
Secretary to make initial grants of not later than one year 
after the date on which funds are first made available.
    Paragraph (4). This paragraph directs the institute to use 
grant funds obtained under this subsection to carry out a five-
year project (A) to serve as a clearinghouse for telework 
research and development; (B) to conduct outreach to rural 
communities and rural workers; (C) to develop and share best 
practices in rural telework within the region and throughout 
the United States; (D) to develop innovative, market-driven 
telework projects and joint ventures with the private sector 
that employ workers in rural areas in jobs that promote 
economic self-sufficiency; (E) to share information about the 
design and implementation of telework arrangements; (F) to 
support private sector businesses that are transitioning to 
telework; (G) to support and assist telework projects and 
individuals at the State and local level; and (H) to perform 
such other functions as the Secretary considers appropriate.
    Paragraph (5). This paragraph defines the non-Federal 
share. To receive a grant under this subsection, an eligible 
organization shall agree to obtain, after the application of 
the eligible organization has been approved and notice of award 
has been issued, contributions from non-Federal sources that 
are equal to 50 percent of the amount of the grant during each 
of the first, second, and third years of a project and 100 
percent of the amount of the grant during each of the fourth 
and fifth years of the project. An Indian tribe may use Federal 
funds made available to the tribe for self-governance to pay 
the non-Federal contributions required under this paragraph. 
The non-Federal contributions may be in the form of in-kind 
contributions, including office equipment, office space, and 
services.
    Subsection (c). Telework Grants:
    Paragraph (1). This paragraph directs the Secretary to make 
grants, subject to paragraphs (2) through (5), to eligible 
entities to pay the Federal share of the cost of obtaining 
equipment and facilities to establish or expand telework 
locations in rural areas, and operating telework locations in 
rural areas.
    Paragraph (2). This paragraph provides that to be eligible 
to receive a grant under this subsection, an eligible entity 
must be a nonprofit organization or educational institution in 
a ruralarea and must apply to the Secretary, and receive 
approval, demonstrating that the eligible entity has adequate resources 
and capabilities to establish or expand a telework location in a rural 
area.
    Paragraph (3). This paragraph provides that to receive a 
grant under this section, an eligible organization must agree 
to obtain, after the application of the eligible organization 
has been approved and notice of award has been issued, 
contributions from non-Federal sources that are equal to 50 
percent of the amount of the grant. Indian Tribes may use 
Federal funds made available to the tribe for self-governance 
to pay the non-Federal contributions. The non-Federal 
contributions may be in the form of in-kind contributions, 
including office equipment, office space, and services, and may 
not be made from funds made available for community development 
block grants under title I of the Housing and Community 
Development Act of 1974.
    Paragraph (4). This paragraph prohibits the Secretary from 
providing a grant under this subsection to establish, expand, 
or operate a telework location in a rural area more than two 
years after the establishment of the telework location.
    Paragraph (5). This paragraph provides that the amount of a 
grant provided to an eligible entity will not exceed $500,000.
    Subsection (d). This subsection provides that an entity 
that receives funds under this section will be subject to the 
provisions of Federal law (including regulations), administered 
by the Secretary of Labor or the Equal Employment Opportunity 
Commission, that govern the responsibilities of employers to 
employees.
    Subsection (e). This subsection provides that not later 
than 180 days after the date of enactment of this section, the 
Secretary must promulgate regulations to carry out this 
section.
    Subsection (f). This subsection authorizes to be 
appropriated to carry out this section $30,000,000 for each 
fiscal year, of which $5,000,000 shall be provided to establish 
an institute under subsection (b).

Section 642. Historic Barn Preservation

    This section amends Subtitle D of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by 
section 641) by adding at the end the following section:

Section 379C. Historic Barn Preservation

    Subsection (a). This subsection defines terms used in this 
section.
    Subsection (b). This subsection provides that the Secretary 
will establish a historic barn preservation program (1) to 
assist States in developing a listing of historic barns; (2) to 
collect and disseminate information on historic barns; (3) to 
foster educational programs relating to the history, 
construction techniques, rehabilitation, and contribution to 
society of historic barns; and (4) to sponsor and conduct 
research on the history of barns and best practices to protect 
and rehabilitate historic barns from the effects of decay, 
fire, arson, and natural disasters.
    Subsection (c). This subsection provides that the Secretary 
may make grants to, or enter into contracts or cooperative 
agreements with, eligible applicants to carry out eligible 
projects. Eligible projects are projects (A) to rehabilitate or 
repair a historic barn; (B) to preserve a historic barn through 
the installation of a fire protection system, including 
fireproofing or fire detection system and sprinklers, and the 
installation of a system to prevent vandalism; and (C) to 
identify, document, and conduct research to develop and 
evaluate appropriate techniques or best practices for 
protecting historic barns. An eligible applicant that receives 
a grant for a project under this subsection shall comply with 
any standards established by the Secretary of the Interior for 
historic preservation projects.
    Subsection (d). This subsection authorizes to be 
appropriated to carry out this section, $25,000,000 for the 
period of fiscal years 2002 through 2006, to remain available 
until expended.

Section 643. Grants for Emergency Weather Radio Transmitters

    This section amends Subtitle D of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by 
section 642)) by adding at the end the following section:

Section 379D. Grants for Emergency Weather Radio Transmitters

    Subsection (a). This subparagraph allows the Secretary, 
acting through the Administrator of the Rural Utilities 
Service, to make grants to public and nonprofit entities for 
the Federal share of the cost of acquiring radio transmitters 
to increase coverage of rural areas by the emergency weather 
radio broadcast system of the National Oceanic and Atmospheric 
Administration.
    Subsection (b). This subsection provides that to be 
eligible for a grant under this section, an applicant must 
provide to the Secretary (1) a binding commitment from a tower 
owner to place the transmitter on a tower; and (2) a 
description of how the tower placement will increase coverage 
of a rural area by the emergency weather radio broadcast system 
of the National Oceanic and Atmospheric Administration.
    Subsection (c). This subsection provides that a grant 
provided under this section must be not more than 75 percent of 
the cost of acquiring a radio transmitter described in 
subsection (a).
    Subsection (d). This subsection authorizes to be 
appropriated to carry out this section $2,000,000 for each of 
fiscal years 2002 through 2006.

Section 644. Bioenergy and biochemical projects

    This section amends Subtitle D of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1981 et seq.) (as amended by 
section 643) is by adding at the end a section providing that 
in carrying out rural development loan, loan guarantee, and 
grant programs under this title, the Secretary shall provide a 
priority for bioenergy and biochemical projects.

Section 645. Delta Regional Authority

    This section amends Sections 382M(a) and 382N of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-
12(a) and 13) to extend the Delta Regional Authority through 
2006.

Section 646. SEARCH grants for small communities

    This section amends the Consolidated Farm and Rural 
Development Act (as amended by section 604) by adding at the 
end a new Subtitle J containing the following sections:

Section 386A. Definitions

    This section defines terms used in this subtitle.

Section 386B. SEARCH grant program

    Subsection (a). This subsection states that the SEARCH 
Grant Program is established. The term `SEARCH grant' means a 
grant for special environmental assistance for the regulation 
of communities and habitat awarded under section 386B(e)(3).
    Subsection (b). This subsection provides that not later 
than October 1 of each fiscal year, a State may submit to the 
Secretary an application to receive a grant under subsection 
(c) for the fiscal year. An application must contain a 
certification by the State that the State has appointed members 
to the council of the State under subsection (c), and must 
contain other information as the Secretary may reasonably 
require.
    Subsection (c). This subsection provides that for each 
fiscal year after the date of enactment of this subtitle, not 
later than 60 days after the date on which the Office of 
Management and Budget apportions any amounts made available 
under this subtitle, the Secretary will, on request by a State 
(A) determine whether any application submitted by the State 
under subsection (b) meets the requirements of subsection (b); 
and (B) if the Secretary determines that the application meets 
the requirements of subsection (b), award a grant of not to 
exceed $1,000,000 to the State, to be used by the council of 
the State to award SEARCH grants under subsection (e). The 
aggregate amount of grants awarded to States other than Alaska, 
Hawaii, or one of the 48 contiguous States, under this 
subsection shall not exceed $1,000,000 for any fiscal year.
    Subsection (d). This subsection provides for the 
establishment in each State of an independent citizens' council 
to carry out the duties described in this section. Each council 
will be composed of 9 members, appointed by the Governor of the 
State. Each member of a council will (i) represent an 
individual region of the State, as determined by the Governor 
of the State in which the council is established; (ii) reside 
in a small community of the State; and (iii) be representative 
of the populations of the State. Before a State receives funds 
under this subtitle, the State shall appoint members to the 
council for the fiscal year, except that not more than 1 member 
shall be an agent, employee, or official of the State 
government. Each council shall select a chairperson from among 
the members of the council, except that a member who is an 
agent, employee, or official of the State government shall not 
serve as chairperson. An officer, employee, or agent of the 
Federal Government may participate in the activities of the 
council in an advisory capacity and at the invitation of the 
council. On the request of the council of a State, the State 
Director for Rural Development of the State shall provide 
advice and consultation to the council. Each council shall 
review applications for, and recommend awards of, SEARCH grants 
to small communities that meet the eligibility criteria under 
subsection (c). In awarding a SEARCH grant, a State must follow 
the recommendations of the council of the State, must award the 
funds for any recommended environmental project in a timely and 
expeditious manner, and must not award a SEARCH grant to a 
grantee or project in violation of any law of the State 
(including a regulation). A small community that receives a 
SEARCH grant under this section shall not be required to 
provide matching funds.
    Subsection (e). This subsection provides that a SEARCH 
grant will be awarded under this section only to a small 
community for one or more environmental projects for which the 
small community (A) needs funds to carry out initial 
feasibility or environmental studies before applying to 
traditional funding sources; or (B) demonstrates, to the 
satisfaction of the council, that the small community has been 
unable to obtain sufficient funding from traditional funding 
sources. The council shall establish such deadline by which 
small communities shall submit applications for grants under 
this section as will permit the council adequate time to review 
and make recommendations relating to the applications. A small 
community shall submit an application to the council in the 
State in which the small community is located. An application 
must include (i) a description of the proposed environmental 
project (including an explanation of how the project would 
assist the small community in complying with an environmental 
law (including a regulation)); (ii) an explanation of why the 
project is important to the small community; (iii) a 
description of all actions taken with respect to the project, 
including a description of any attempt to secure funding and a 
description of demonstrated need for funding for the project, 
as of the date of the application; and (iv) a SEARCH grant 
application form provided by the council, completed and with 
all required supporting documentation. Generally, not later 
than March 5 of each fiscal year, each council will review all 
applications received and recommend for award SEARCH grants to 
small communities based on an evaluation of the eligibility 
criteria and the content of the application. The State may 
extend the deadline of March 5 by not more than 10 days in a 
case in which the receipt of recommendations from a council is 
delayed because of circumstances beyond the control of the 
council, as determined by the State. If, for any fiscal year, 
any unexpended funds remain after SEARCH grants are awarded, 
the council may repeat the application and review process so 
that any remaining funds may be recommended for award, and 
awarded, not later than July 30 of the fiscal year. Any 
unexpended funds that are not awarded will be retained by the 
State for award during the following fiscal year. A State that 
accumulates a balance of unexpended funds of more than 
$3,000,000 will be ineligible to apply for additional funds for 
SEARCH grants until such time as the State expends the portion 
of the balance that exceeds $3,000,000.

Section 386C. Report

    This section provides that not later than September 1 of 
the first fiscal year for which a SEARCH grant is awarded by a 
council, and annually thereafter, the council shall submit to 
the Secretary a report that (1) describes the number of SEARCH 
grants awarded during the fiscal year; (2) identifies each 
small community that received a SEARCH grant during the fiscal 
year; (3) describes the project or purpose for which each 
SEARCH grant was awarded, including a statement of the benefit 
to public health or the environment of the environmental 
project receiving the grant funds; and (4) describes the status 
of each project or portion of a project for which a SEARCH 
grant was awarded, including a project or portion of a project 
for which a SEARCH grant was awarded for any fiscal year before 
the fiscal year in which the report is submitted.

Section 386D. Funding

    This section authorizes to be appropriated to carry out 
section 386B(c) $51,000,000, of which not to exceed $1,000,000 
shall be used to make grants under section 386B(c). If funds to 
carry out section 386B(c) are made available for a fiscal year 
in an amount that is less than the amount authorized under 
section 386D(a) for the fiscal year, the appropriated funds 
shall be divided equally among the 50 States. If, for any 
fiscal year, a State does not apply, or does not qualify, to 
receive funds undersection 386B(b), the funds that would have 
been made available to the State under section 386B(c) on submission by 
the State of a successful application under section 386B(b) shall be 
redistributed for award under this subtitle among States, the councils 
of which awarded one or more SEARCH grants during the preceding fiscal 
year. There are authorized to be appropriated such sums as are 
necessary to carry out the provisions of this subtitle (other than 
section 386B(c)).

Section 647. Northern Great Plains Regional Authority

    This section amends the Consolidated Farm and Rural 
Development Act (as amended by section 646) by adding at the 
end the following:

Section 387A. Definitions

    This section defines terms used in this subtitle. The term 
``region'' means the States of Iowa, Minnesota, Nebraska, North 
Dakota, and South Dakota.

Section 387B. Northern Great Plains Regional Authority

    Subsection (a). Establishment:
    Paragraph (1). This paragraph provides that there is 
established the Northern Great Plains Regional Authority.
    Paragraph (2). This paragraph provides that the Authority 
will be composed of (A) a Federal member, to be appointed by 
the President, with the advice and consent of the Senate; and 
(B) the Governor (or a designee of the Governor) of each State 
in the region that elects to participate in the Authority.
    Paragraph (3). This paragraph provides that the Authority 
will be headed by (A) the Federal member, who will serve as the 
Federal cochairperson and as a liaison between the Federal 
Government and the Authority; and (B) a State cochairperson, 
who will be a Governor of a participating State in the region 
and will be elected by the State members for a term of not less 
than one year.
    Subsection (b). Alternate Members:
    Paragraph (1). This paragraph provides that the State 
member of a participating State may have a single alternate, 
who will be a resident of that State and appointed by the 
Governor of the State.
    Paragraph (2). This paragraph provides that the President 
will appoint an alternate Federal cochairperson.
    Paragraph (3). This paragraph provides that a State 
alternate shall not be counted toward the establishment of a 
quorum of the Authority in any instance in which a quorum of 
the State members is required to be present.
    Paragraph (4). This paragraph provides that bo power or 
responsibility of the Authority specified in paragraphs (2) and 
(3) of subsection (c), and no voting right of any Authority 
member, shall be delegated to any person who is not an 
Authority member, or who is not entitled to vote in Authority 
meetings.
    Subsection (c). Voting:
    Paragraph (1). This paragraph provides that a decision by 
the Authority will require a majority vote of the Authority 
(not including any member representing a State that is 
delinquent under subsection (g)(2)) to be effective.
    Paragraph (2). This paragraph provides that a quorum of 
State members will be required to be present for the Authority 
to make any policy decision, including (A) a modification or 
revision of an Authority policy decision; (B) approval of a 
State or regional development plan; and (C) any allocation of 
funds among the States.
    Paragraph (3). This paragraph provides that the approval of 
project and grant proposals will be a responsibility of the 
Authority and will be conducted in accordance with section 
387I.
    Paragraph (4). This paragraph provides that an alternate 
member will vote in the case of the absence, death, disability, 
removal, or resignation of the Federal or State representative 
for which the alternate member is serving.
    Subsection (d). This subsection provides that the Authority 
will (1) develop, on a continuing basis, comprehensive and 
coordinated plans and programs to establish priorities and 
approve grants for the economic development of the region, 
giving due consideration to other Federal, State, and local 
planning and development activities in the region; (2) not 
later than 220 days after the date of enactment of this 
subtitle, establish priorities in a development plan for the 
region (including five-year regional outcome targets); (3) 
assess the needs and assets of the region based on available 
research, demonstrations, investigations, assessments, and 
evaluations of the region prepared by Federal, State, and local 
agencies, universities, local development districts, and other 
nonprofit groups; (4) formulate and recommend to the Governors 
and legislatures of States that participate in the Authority 
forms of interstate cooperation; (5) work with State and local 
agencies in developing appropriate model legislation; (6) 
enhance the capacity of, and provide support for, local 
development districts in the region, or if no local development 
district exists in an area in a participating State in the 
region, foster the creation of a local development district; 
(7) encourage private investment in industrial, commercial, and 
other economic development projects in the region; and (8) 
cooperate with and assist State governments with economic 
development programs of participating States.
    Subsection (e). This subsection provides that in carrying 
out subsection (d), the Authority may (1) hold such hearings, 
sit and act at such times and places, take such testimony, 
receive such evidence, and print or otherwise reproduce and 
distribute a description of the proceedings and reports on 
actions by the Authority as the Authority considers 
appropriate; (2) authorize, through the Federal or State 
cochairperson or any other member of the Authority designated 
by the Authority, the administration of oaths if the Authority 
determines that testimony should be taken or evidence received 
under oath; (3) request from any Federal, State, or local 
department or agency such information as may be available to or 
procurable by the department or agency that may be of use to 
the Authority in carrying out duties of the Authority; (4) 
adopt, amend, and repeal bylaws and rules governing the conduct 
of Authority business and the performance of Authority duties; 
(5) request the head of any Federal department or agency to 
detail to the Authority such personnel as the Authority 
requires to carry out duties of the Authority, each such detail 
to be without loss of seniority, pay, or other employee status; 
(6) request the head of any State department or agency or local 
government to detail to the Authority such personnel as the 
Authority requires to carry out duties of the Authority, each 
such detail to be without loss of seniority, pay, or other 
employee status; (7) provide for coverage of Authority 
employees in a suitable retirement and employeebenefit system 
by making arrangements or entering into contracts with any 
participating State government, or by otherwise providing retirement 
and other employee benefit coverage; (8) accept, use, and dispose of 
gifts or donations of services or real, personal, tangible, or 
intangible property; (9) enter into and perform such contracts, leases, 
cooperative agreements, or other transactions as are necessary to carry 
out Authority duties, including any contracts, leases, or cooperative 
agreements with (A) any department, agency, or instrumentality of the 
United States; (B) any State (including a political subdivision, 
agency, or instrumentality of the State); or (C) any person, firm, 
association, or corporation; and (10) establish and maintain a central 
office and field offices at such locations as the Authority may select.
    Subsection (f). This subsection provides that a Federal 
agency will (1) cooperate with the Authority; and (2) provide, 
on request of the Federal cochairperson, appropriate assistance 
in carrying out this subtitle, in accordance with applicable 
Federal laws (including regulations).
    Subsection (g). Administrative Expenses:
    Paragraph (1). This paragraph provides that administrative 
expenses of the Authority (except for the expenses of the 
Federal cochairperson, including expenses of the alternate and 
staff of the Federal cochairperson, which shall be paid solely 
by the Federal Government) will be paid by the Federal 
Government, in an amount equal to 50 percent of the 
administrative expenses, and by the States in the region 
participating in the Authority, in an amount equal to 50 
percent of the administrative expenses.
    Paragraph (2). This paragraph provides that the share of 
administrative expenses of the Authority to be paid by each 
State shall be determined by the Authority. The Federal 
cochairperson shall not participate or vote in any decision 
under this paragraph. If a State is delinquent in payment of 
the State's share of administrative expenses of the Authority 
under this subsection, no assistance under this subtitle shall 
be furnished to the State (including assistance to a political 
subdivision or a resident of the State), and no member of the 
Authority from the State shall participate or vote in any 
action by the Authority.
    Subsection (h). Compensation:
    Paragraph (1). This paragraph provides that the Federal 
cochairperson will be compensated by the Federal Government at 
level III of the Executive Schedule in subchapter II of chapter 
53 of title 5, United States Code.
    Paragraph (2). This paragraph provides that the alternate 
Federal cochairperson (A) will be compensated by the Federal 
Government at level V of the Executive Schedule described in 
paragraph (1); and (B) when not actively serving as an 
alternate for the Federal cochairperson, will perform such 
functions and duties as are delegated by the Federal 
cochairperson.
    Paragraph (3). This paragraph provides that a State will 
compensate each member and alternate representing the State on 
the Authority at the rate established by law of the State. No 
State member or alternate member shall receive any salary, or 
any contribution to or supplementation of salary from any 
source other than the State for services provided by the member 
or alternate to the Authority.
    Paragraph (4). This paragraph provides that in general, no 
person detailed to serve the Authority under subsection (e)(6) 
shall receive any salary or any contribution to or 
supplementation of salary for services provided to the 
Authority from any source other than the State, local, or 
intergovernmental department or agency from which the person 
was detailed, or the Authority. Any person that violates this 
paragraph shall be fined not more than $5,000, imprisoned not 
more than one year, or both. The Federal cochairperson, the 
alternate Federal cochairperson, and any Federal officer or 
employee detailed to duty on the Authority under subsection 
(e)(5) will not be subject to this paragraph, but will remain 
subject to sections 202 through 209 of title 18, United States 
Code.
    Paragraph (5). This paragraph provides that in general, the 
Authority may appoint and fix the compensation of an executive 
director and such other personnel as are necessary to enable 
the Authority to carry out the duties of the Authority. 
Compensation under this paragraph cannot exceed the maximum 
rate for the Senior Executive Service under section 5382 of 
title 5, United States Code, including any applicable locality-
based comparability payment that may be authorized under 
section 5304(h)(2)(C) of that title. The executive director 
will be responsible for carrying out the administrative duties 
of the Authority, direction of the Authority staff, and such 
other duties as the Authority may assign. No member, alternate, 
officer, or employee of the Authority (except the Federal 
cochairperson of the Authority, the alternate and staff for the 
Federal cochairperson, and any Federal employee detailed to the 
Authority under subsection (e)(5)) will be considered to be a 
Federal employee for any purpose.
    Subsection (i). Conflicts of Interest:
    Paragraph (1). This paragraph provides that in general, 
except as provided under paragraph (2), no State member, 
alternate, officer, or employee of the Authority will 
participate personally and substantially as a member, 
alternate, officer, or employee of the Authority in any 
proceeding, application, request for a ruling or other 
determination, contract, claim, controversy, or other matter in 
which, to knowledge of the member, alternate, officer, or 
employee, he or she--or his or her spouse, minor child, 
partner, or organization (other than a State or political 
subdivision of the State) in which he or she is serving as 
officer, director, trustee, partner, or employee, or any person 
or organization with whom he or she is negotiating or has any 
arrangement concerning prospective employment, has a financial 
interest.
    Paragraph (2). This paragraph provides that Paragraph (1) 
will not apply if the State member, alternate, officer, or 
employee (A) immediately advises the Authority of the nature 
and circumstances of the proceeding, application, request for a 
ruling or other determination, contract, claim, controversy, or 
other particular matter presenting a potential conflict of 
interest; (B) makes full disclosure of the financial interest; 
and (C) before the proceeding concerning the matter presenting 
the conflict of interest, receives a written determination by 
the Authority that the interest is not so substantial as to be 
likely to affect the integrity of the services that the 
Authority may expect from the State member, alternate, officer, 
or employee.
    Paragraph (3). This paragraph provides that any person that 
violates this subsection shall be fined not more than $10,000, 
imprisoned not more than two years, or both.
    Subsection (j). This subsection provides that the Authority 
may declare void any contract, loan, or grant of or by the 
Authority in relation to which the Authority determines that 
there has been a violation of any provision under subsection 
(h)(4), subsection (i), or sections 202 through 209 of title 
18, United States Code.

Section 387C. Economic and Community Development Grants

    Subsection (a). This subsection provides that the Authority 
may approve grants to States, localgovernments, and public and 
nonprofit organizations for projects, approved in accordance with 
section 387I (1) to develop the transportation and telecommunication 
infrastructure of the region for the purpose of facilitating economic 
development in the region (except that grants for this purpose may only 
be made to States, local governments, and nonprofit organizations); (2) 
to assist the region in obtaining the job training, employment-related 
education, and business development (with an emphasis on 
entrepreneurship) that are needed to build and maintain strong local 
economies; (3) to provide assistance to severely distressed and 
underdeveloped areas that lack financial resources for improving basic 
public services; (4) to provide assistance to severely distressed and 
underdeveloped areas that lack financial resources for equipping 
industrial parks and related facilities; and (5) to otherwise achieve 
the purposes of this subtitle.
    Subsection (b). This subsection provides that funds for 
grants under subsection (a) may be provided (A) entirely from 
appropriations to carry out this section; (B) in combination 
with funds available under another Federal or Federal grant 
program; or (C) from any other source. To best build the 
foundations for long-term economic development and to 
complement other Federal and State resources in the region, 
Federal funds available under this subtitle will be focused on 
the activities in the following order of priority: (A) basic 
public infrastructure in distressed counties and isolated areas 
of distress; (B) transportation and telecommunication 
infrastructure for the purpose of facilitating economic 
development in the region; (C) business development, with 
emphasis on entrepreneurship; and (D) job training or 
employment-related education, with emphasis on use of existing 
public educational institutions located in the region.
    Funds appropriated to carry out this section may be used to 
increase a Federal share in a grant program, as the Authority 
determines appropriate.

Section 387D. Supplements to Federal Grant Programs

    Subsection (a). This subsection states that Congress finds 
that certain States and local communities of the region, 
including local development districts, may be unable to take 
maximum advantage of Federal grant programs for which the 
States and communities are eligible because (1) they lack the 
economic resources to meet the required matching share; or (2) 
there are insufficient funds available under the applicable 
Federal grant law authorizing the program to meet pressing 
needs of the region.
    Subsection (b). This subsection provides that in accordance 
with subsection (c), the Federal cochairperson may use amounts 
made available to carry out this subtitle, without regard to 
any limitations on areas eligible for assistance or 
authorizations for appropriation under any other Act, to fund 
all or any portion of the basic Federal contribution to a 
project or activity under a Federal grant program in the region 
in an amount that is above the fixed maximum portion of the 
cost of the project otherwise authorized by applicable law, but 
not to exceed 90 percent of the costs of the project (except as 
provided in section 387F(b)).
    Subsection (c). Certification:
    Paragraph (1). This paragraph provides that in general, in 
the case of any program or project for which all or any portion 
of the basic Federal contribution to the project under a 
Federal grant program is proposed to be made under this 
section, no Federal contribution will be made until the Federal 
official administering the Federal law authorizing the 
contribution certifies that the program or project meets the 
applicable requirements of the applicable Federal grant law, 
and could be approved for Federal contribution under the law if 
funds were available under the law for the program or project.
    Paragraph (2). This paragraph provides that in general, the 
certifications and determinations required to be made by the 
Authority for approval of projects under this subtitle in 
accordance with section 387I will be controlling and will be 
accepted by the Federal agencies. Any finding, report, 
certification, or documentation required to be submitted to the 
head of the department, agency, or instrumentality of the 
Federal Government responsible for the administration of any 
Federal grant program shall be accepted by the Federal 
cochairperson with respect to a supplemental grant for any 
project under the program.

Section 387E. Local Development Districts; Certification and 
        Administrative Expenses

    Subsection (a). This subsection defines the term ``local 
development district.''
    Subsection (b). This subsection provides that the Authority 
may make grants for administrative expenses under this section. 
The amount of any grant cannot exceed 80 percent of the 
administrative expenses of the local development district 
receiving the grant. No grant will be awarded to a State agency 
certified as a local development district for a period greater 
than three years. The contributions of a local development 
district for administrative expenses may be in cash or in kind, 
fairly evaluated, including space, equipment, and services.
    Subsection (c). This subsection provides that a local 
development district will (1) operate as a lead organization 
serving multi-county areas in the region at the local level; 
and (2) serve as a liaison between State and local governments, 
nonprofit organizations (including community-based groups and 
educational institutions), the business community, and citizens 
that are involved in multi-jurisdictional planning, provide 
technical assistance to local jurisdictions and potential 
grantees, and provide leadership and civic development 
assistance.

Section 387F. Distressed Counties and Areas and Nondistressed Counties

    Subsection (a). This subsection provides that not later 
than 90 days after the date of enactment of this subtitle, and 
annually thereafter, the Authority, in accordance with such 
criteria as the Authority may establish, must designate (1) as 
distressed counties, counties in the region that are the most 
severely and persistently distressed and underdeveloped and 
have high rates of poverty, unemployment, or outmigration; (2) 
as nondistressed counties, counties in the region that are not 
designated as distressed counties under paragraph (1); and (3) 
as isolated areas of distress, areas located in nondistressed 
counties (as designated under paragraph (2)) that have high 
rates of poverty, unemployment, or outmigration.
    Subsection (b). This subsection provides that the Authority 
will allocate at least 75 percent of the appropriations made 
available under section 387M for programs and projects designed 
to serve the needs of distressed counties and isolated areas of 
distress in the region. The funding limitations under section 
387D(b) shall not apply to a project providing transportation 
or telecommunication or basic public services to residents of 
one or more distressed counties or isolated areas of distress 
in the region.
    Subsection (c). This subsection provides that in general, 
except as provided in this subsection, no funds shall be 
provided under this subtitle for a project located in a county 
designated as a nondistressed county under subsection (a)(2). 
The funding prohibition under this subsection shall not apply 
to grants to fund the administrative expenses of local 
development districts under section 387E(b). The Authority may 
waive the application of the funding prohibition under 
paragraph (1) of this subsection to a multicounty project that 
includes participation by a nondistressed county, or to any 
other type of project, if the Authority determines that the 
project could bring significant benefits to areas of the region 
outside a nondistressed county. For a designation of an 
isolated area of distress for assistance to be effective, the 
designation shall be supported by the most recent Federal data 
available, or if no recent Federal data are available, by the 
most recent data available through the government of the State 
in which the isolated area of distress is located.
    Subsection (d). This subsection provides that the Authority 
will allocate at least 50 percent of any funds made available 
under section 387M for transportation, telecommunication, and 
basic public infrastructure projects authorized under 
paragraphs (1) and (3) of section 387C(a).

Section 387G. Development Planning Process

    Subsection (a). This subsection provides that in accordance 
with policies established by the Authority, each State member 
must submit a development plan for the area of the region 
represented by the State member.
    Subsection (b). This subsection provides that a State 
development plan submitted under subsection (a) shall reflect 
the goals, objectives, and priorities identified in the 
regional development plan developed under section 387B(d)(2).
    Subsection (c). This subsection provides that in carrying 
out the development planning process (including the selection 
of programs and projects for assistance), a State may consult 
with local development districts and local units of government, 
and may take into consideration the goals, objectives, 
priorities, and recommendations of these entities.
    Subsection (d). This subsection provides that in general, 
the Authority and applicable State and local development 
districts will encourage and assist, to the maximum extent 
practicable, public participation in the development, revision, 
and implementation of all plans and programs under this 
subtitle. The Authority shall develop guidelines for providing 
public participation, including public hearings.

Section 387H. Program Development Criteria

    Subsection (a). This subsection provides that in general, 
in considering programs and projects to be provided assistance 
under this subtitle, and in establishing a priority ranking of 
the requests for assistance provided by the Authority, the 
Authority will follow procedures that ensure, to the maximum 
extent practicable, consideration of (1) the relationship of 
the project or class of projects to overall regional 
development; (2) the per capita income and poverty and 
unemployment and outmigration rates in an area; (3) the 
financial resources available to the applicants for assistance 
seeking to carry out the project, with emphasis on ensuring 
that projects are adequately financed to maximize the 
probability of successful economic development; (4) the 
importance of the project or class of projects in relation to 
other projects or classes of projects that may be in 
competition for the same funds; (5) the prospects that the 
project for which assistance is sought will improve, on a 
continuing rather than a temporary basis, the opportunities for 
employment, the average level of income, or the economic 
development of the area served by the project; and (6) the 
extent to which the project design provides for detailed 
outcome measurements by which grant expenditures and the 
results of the expenditures may be evaluated.
    Subsection (b). This subsection provides that no financial 
assistance authorized by this subtitle will be used to assist a 
person or entity in relocating from one area to another, except 
that financial assistance may be used as otherwise authorized 
by this title to attract businesses from outside the region to 
the region.
    Subsection (c). This subsection provides that funds may be 
provided for a program or project in a State under this 
subtitle only if the Authority determines that the level of 
Federal or State financial assistance provided under a law 
other than this subtitle, for the same type of program or 
project in the same area of the State within the region, will 
not be reduced as a result of funds made available by this 
subtitle.

Section 387I. Approval of Development Plans and Projects

    Subsection (a). This subsection provides that in general, a 
State or regional development plan or any multi-state 
subregional plan that is proposed for development under this 
subtitle will be reviewed by the Authority.
    Subsection (b). This subsection provides that an 
application for a grant or any other assistance for a project 
under this subtitle will be made through and evaluated for 
approval by the State member of the Authority representing the 
applicant.
    Subsection (c). This subsection provides that an 
application for a grant or other assistance for a project must 
be approved only on certification by the State member that the 
application for the project (1) describes ways in which the 
project complies with any applicable State development plan; 
(2) meets applicable criteria under section 387H; (3) provides 
adequate assurance that the proposed project will be properly 
administered, operated, and maintained; and (4) otherwise meets 
the requirements of this subtitle.
    Subsection (d). This subsection provides that on 
certification by a State member of the Authority of an 
application for a grant or other assistance for a specific 
project under this section, an affirmative vote of the 
Authority under section 387B(c) will be required for approval 
of the application.

Section 387J. Consent of States

    This section provides that nothing in this subtitle 
requires any State to engage in or accept any program under 
this subtitle without the consent of the State.

Section 387K. Records

    Subsection (a). This subsection provides that in general, 
the Authority will maintain accurate and complete records of 
all transactions and activities of the Authority. All records 
of the Authority willbe available for audit and examination by 
the Comptroller General of the United States and the Inspector General 
of the Department of Agriculture (including authorized representatives 
of the Comptroller General and the Inspector General of the Department 
of Agriculture).
    Subsection (b). This subsection provides that in general, a 
recipient of Federal funds under this subtitle will, as 
required by the Authority, maintain accurate and complete 
records of transactions and activities financed with Federal 
funds and report on the transactions and activities to the 
Authority. All records will be available for audit by the 
Comptroller General of the United States, the Inspector General 
of the Department of Agriculture, and the Authority (including 
authorized representatives of the Comptroller General, the 
Inspector General of the Department of Agriculture, and the 
Authority).
    Subsection (c). This subsection provides that the Inspector 
General of the Department of Agriculture will audit the 
activities, transactions, and records of the Authority on an 
annual basis.

Section 387L. Annual Report

    This section provides that not later than 180 days after 
the end of each fiscal year, the Authority shall submit to the 
President and to Congress a report describing the activities 
carried out under this subtitle.

Section 387M. Authorization of Appropriations

    This section authorizes the appropriation to the Authority 
to carry out this subtitle $30,000,000 for each of fiscal years 
2002 through 2006, to remain available until expended. Not more 
than 5 percent of the amount appropriated for a fiscal year 
will be used for administrative expenses of the Authority. 
Notwithstanding any other provision of this subtitle, for any 
fiscal year, the aggregate amount of grants received by a State 
and all persons or entities in the State under this subtitle 
shall be not less than \1/3\ of the product obtained by 
multiplying the aggregate amount of grants under this subtitle 
for the fiscal year by the ratio that the population of the 
State bears to the population of the region

Section 387N. Termination of Authority

    This section provides that this subtitle and the authority 
provided under this subtitle expire on October 1, 2006.

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


Section 651. Alternative Agricultural Research and Commercialization 
        Corporation

    Subsection (a). This subsection provides that Subtitle G of 
title XVI of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (7 U.S.C. 5901 et seq.) is repealed.
    Subsection (b). This subsection provides for the 
disposition of assets of the Alternative Agricultural Research 
and Commercialization Corporation (referred to in this section 
as the ``Corporation''), including the funds in the Alternative 
Agricultural Research and Commercialization Revolving Fund as 
of the date of enactment of this Act, are transferred to the 
Secretary of Agriculture.
    Subsection (c). This subsection provides that funds 
transferred under subsection (b), and any income from assets or 
proceeds from the sale of assets transferred under subsection 
(b), will be deposited into an account in the Treasury, and 
will remain available to the Secretary until expended, without 
further appropriation, to pay any outstanding claims or 
obligations of the Corporation and the costs incurred by the 
Secretary in carrying out this section. On final disposition of 
all assets transferred under subsection (b), any funds 
remaining in the account will be transferred into miscellaneous 
receipts in the Treasury.
    Subsection (d). This subsection makes conforming amendments 
consistent with this section.

Section 652. Telemedicine and Distance Learning Services in Rural Areas

    This section amends Section 2335A of the Food, Agriculture, 
Conservation, and Trade Act of 1990 by extending it to 2006.

             Subtitle E--Rural Electrification Act of 1936


Section 661. Bioenergy and Biochemical Projects

    This section amends Title I of the Rural Electrification 
Act of 1936 (7 U.S.C. 901 et seq.) by adding at the end a new 
Section 20 that provides that in carrying out rural electric 
loan, loan guarantee, and grant programs under this Act, the 
Secretary must provide a priority for bioenergy and biochemical 
projects.

Section 662. Guarantees for bonds and notes issued for electrification 
        or telephone purposes

    This section provides that the Rural Electrification Act of 
1936 is amended by inserting after section 313 (7 U.S.C. 940c) 
a new section 313A containing the following subsections:
    Subsection (a). This subsection provides that the Secretary 
will guarantee payments on bonds or notes issued by cooperative 
or other lenders organized on a not-for-profit basis if the 
proceeds of the bonds or notes are used for electrification or 
telephone projects eligible for assistance under this Act, 
including the refinancing of bonds or notes issued for such 
projects.
    Subsection (b). Limitations:
    Paragraph (1). This paragraph provides that a lender will 
not receive a guarantee under this section for a bond or note 
if, at the time of the guarantee, the total principal amount of 
such guaranteed bonds or notes outstanding of the lender would 
exceed the principal amount of outstanding loans of the lender 
for electrification or telephone purposes that have been made 
concurrently with loans approved for such purposes under this 
Act.
    Paragraph (2). This paragraph provides that the Secretary 
will not guarantee payment on a bond or note issued by a 
lender, the proceeds of which are used for the generation of 
electricity.
    Paragraph (3). This paragraph provides that the Secretary 
may deny the request of a lender for the guarantee of a bond or 
note under this section if the Secretary determines that (A) 
the lender does not have appropriate expertise or experience or 
is otherwise not qualified to make loans for electrification or 
telephone purposes; (B) the bond or note issued by the lender 
is not of reasonable and sufficient quality; or (C) the lender 
has not provided sufficient evidence that the proceeds of the 
bond or note are used for eligible projects described in 
subsection (a).
    Paragraph (4). This paragraph provides that a lender may 
not use any amount obtained from the reduction in funding costs 
as a result of the guarantee of a bond or note under this 
section to reduce the interest rate on a new or outstanding 
loan, except a lender may use such an amount to reduce the 
interest rate on a loan if the loan is made by the lender for 
electrification or telephone projects that are eligible for 
assistance under this Act and is made concurrently with a loan 
approved by the Secretary under this Act for such a project, as 
provided in section 307.
    Subsection (c). This subsection provides that in general, a 
lender that receives a guarantee issued under this section on a 
bond or note will pay a fee to the Secretary. The amount of an 
annual fee paid for the guarantee of a bond or note under this 
section will be equal to 30 basis points of the amount of the 
unpaid principal of the bond or note guaranteed under this 
section. A lender will pay the fees required under this 
subsection on a semiannual basis. Subject to subsection (e), 
fees collected under this subsection will be deposited into the 
rural economic development subaccount maintained under section 
313(b)(2)(A), to remain available until expended, and will be 
used for the purposes described in section 313(b)(2)(B).
    Subsection (d). This subsection provides that a guarantee 
issued under this section will be for the full amount of a bond 
or note, including the amount of principal, interest, and call 
premiums, will be fully assignable and transferable, and will 
represent the full faith and credit of the United States. To 
ensure that the Secretary has the resources necessary to 
properly examine the proposed guarantees, the Secretary may 
limit the number of guarantees issued under this section if the 
number of such guarantees exceeds 5 per year. On the timely 
request of an eligible lender, the General Counsel of the 
Department of Agriculture will provide the Secretary with an 
opinion regarding the validity and authority of a guarantee 
issued to the lender under this section.
    Subsection (e). This subsection authorizes appropriations 
of such sums as are necessary to carry out this section. To the 
extent that the amount of funds appropriated for a fiscal year 
under paragraph (1) are not sufficient to carry out this 
section, the Secretary may use up to 1/3 of the fees collected 
under subsection (c) for the cost of providing guarantees of 
bonds and notes under this section before depositing the 
remainder of the fees into the rural economic development 
subaccount maintained under section 313(b)(2)(A).
    Subsection (f). This subsection provides that the authority 
provided under this section will terminate on September 30, 
2006.
    This section also provides that Section 313(b)(2)(B) of the 
Rural Electrification Act of 1936 (7 U.S.C. 940c)(b)(2)(B)) is 
amended by requiring the Secretary to act through the Rural 
Utilities Service. Not later than 180 days after the date of 
enactment of this Act, the Secretary of Agriculture will 
promulgate regulations to carry out the amendments made by this 
section, and not later than 240 days after the date of 
enactment of this Act, the Secretary will implement the 
amendment made by this section.

Section 663. Expansion of 911 access

    This section amends Title III of the Rural Electrification 
Act of 1936 (7 U.S.C. 931 et seq.) by adding a new Section 315 
containing the following subsections:
    Subsection (a). This subsection provides that the Secretary 
may make telephone loans under this title to State or local 
governments, Indian tribes, or other public entities for 
facilities and equipment to expand 911 access in underserved 
rural areas.
    Subsection (b). This subsection authorizes appropriations 
of such sums as are necessary to carry out this section.

                          TITLE VII--RESEARCH


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


Section 701. Definitions

    This section amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 to define the term 
``insular area'' to mean the Commonwealth of Puerto Rico, Guam, 
American Samoa, the Commonwealth of the Northern Mariana 
Islands, the Federated States of Micronesia, the Republic of 
the Marshall Islands, the Republic of Palau, and the Virgin 
Islands of the United States; and the term ``State'' to mean 
any of the States, the District of Columbia, and any insular 
area.

Section 702. National Agricultural Research, Extension, Education, and 
        Economics Advisory Board

    This section reauthorizes the Advisory Board through 2006.

Section 703. Grants and fellowships for food and agricultural sciences 
        education

    This section reauthorizes this program through 2006, and 
expands it to include grants and fellowships for academic 
degrees related to rural economic, community, and business 
development. The Committee wishes to clarify that the existing 
language of this section authorizes support of students seeking 
to obtain academic degrees related to extension teaching.

Section 704. Competitive Research Facilities Grant Program

    This section amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1997 to create a 
competitive grants program for the construction, acquisition, 
modernization, renovation, alteration, and remodeling of food 
and agricultural research facilities.
    Subsection (a) provides that the Secretary will award 
grants to eligible institutions on a competitive basis for the 
construction, acquisition, modernization, renovation, 
alteration, and remodeling of food and agricultural research 
facilities such as buildings, laboratories, and other capital 
facilities (including acquisition of fixtures and equipment).
    Subsection (b) provides that all state cooperative 
institutions (which includes 1862 land grant institutions, 1890 
land grant institutions, 1994 land grant institutions, and 
McIntire-Stennis schools) and Hispanic serving institutions are 
eligible for the grants.
    Subsection (c) provides the Secretary discretion to 
determine the criteria for awarding grants.
    Subsection (d) provides the Secretary discretion to 
determine an appropriate matching requirement.
    Subsection (e) directs the Secretary to target grants to 
particular institutions to enhance their capacity to do 
research.
    Subsection (f) directs the Secretary to promulgate 
appropriate regulations, and to ensure that states have a 
coordinated intrastate program.
    Subsection (g) exempts program advisory committees from the 
Federal Advisory Committee Act.
    Subsection (h) directs the Secretary to consult with the 
Advisory Board.
    Subsection (i) authorizes appropriations of such sums as 
are necessary.

Section 705. Grants for research on the production and marketing of 
        alcohols and industrial hydrocarbons from agricultural 
        commodities and forest products

    This section reauthorizes this program through 2006.

Section 706. Policy research centers

    This section reauthorizes this program through 2006.

Section 707. Human nutrition intervention and health promotion research 
        program

    This section reauthorizes this program through 2006.

Section 708. Pilot research program to combine medical and agricultural 
        research

    This section reauthorizes this program through 2006.

Section 709. Nutrition education program

    This section reauthorizes this program through 2006.

Section 710. Animal health and disease research programs

    This section reauthorizes this program through 2006.

Section 711. Research on national or regional problems

    This section reauthorizes this program through 2006.

Section 712. Education grants for programs for Hispanic-serving 
        institutions

    This section reauthorizes this program through 2006.

Section 713. Competitive grants for international agricultural science 
        and education programs

    This section reauthorizes this program through 2006.

Section 714. Indirect costs

    This section amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 to increase the 
indirect cost cap from 19 percent to the indirect cost rate 
established for an institution by its cognizant Federal audit 
agency, except for certain awards granted through the Small 
Business Act.

Section 715. Research equipment grants

    This section amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977.
    Subsection (a) allows the Secretary to make competitive 
grants for the acquisition of special purpose scientific 
research equipment for use in the food and agricultural 
sciences programs of eligible institutions.
    Subsection (b) defines an eligible institution as a college 
or university or a State cooperative institution.
    Subsection (c) limits an award under this section to not 
more than $500,000.
    Subsection (d) limits recouping of expenses from awards 
under this section as indirect costs under other federal grants 
or programs.
    Subsection (f) authorizes appropriations for this program 
at $50,000,000 for each of fiscal years 2002 through 2006.

Section 716. Agricultural research programs

    The National Agricultural Research, Extension, and Teaching 
Policy Act of 1977 is amended to increase the general 
authorizations for agricultural research from $850 million to 
$1.5 billion for 2002 to 2006.

Section 717. Extension education

    The National Agricultural Research, Extension, and Teaching 
Policy Act of 1977 is amended by changing the authorization 
level for Extension Education from $420,000,000 to $500,000,000 
for 2002 to 2006.

Section 718. Availability of competitive grant funds

    The National Agricultural Research, Extension, and Teaching 
Policy Act of 1977 is amended to provide that funds for 
competitive agricultural research, education, or extension 
grant programs, under this or any other Act, shall remain 
available for obligation for a two-year period beginning on 
October 1 of the fiscal year for which the funds are made 
available.

Section 719. Joint requests for proposal

    The National Agricultural Research, Extension, and Teaching 
Policy Act of 1977 is amended to facilitate joint requests for 
proposals (RFP).
    Subsection (a) expressly provides USDA with authority to 
issue joint RFPs with other agencies (such as the National 
Science Foundation, Environmental Protection Agency, U.S. 
Agency for International Development, and National Air and 
Space Administration) to eliminate duplication of research, 
review, and evaluation resources.
    Subsection (b) allows the Secretary to transfer funds to 
cooperating agencies subject to applicable laws.
    Subsection (c) allows the Secretary to delegate her 
authority to an appropriate coordinating agency.
    Subsection (d) provides the Secretary with authority to 
coordinate regulations and indirect rates with a cooperating 
agency.
    Subsection (e) allows joint peer review panels to be 
established.

Section 720. Supplemental and alternative crops

    This section reauthorizes this program through 2006.

Section 721. Aquaculture

    This section reauthorizes this program through 2006.

Section 722. Rangeland research

    This section reauthorizes this program through 2006.

Section 723. Biosecurity Planning and Response Programs

    Subsection (a) amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 to create a new 
subtitle on biosecurity.

             CHAPTER 1--AGRICULTURE INFRASTRUCTURE SECURITY

    Section 1484 defines terms as used in the subtitle, 
including agricultural research facility.

Section 1485. Agriculture Infrastructure Security Fund

    Subsections (a)-(c) establish an Agriculture Infrastructure 
Security Fund that provides funding to protect and strengthen 
the Federal food safety and agricultural infrastructure. Such 
sums as are necessary are authorized to be appropriated for 
each of fiscal years 2002 through 2006. The Secretary is also 
authorized to accept contributions and other proceeds in the 
Fund as outlined in this section. All funds are available until 
expended.
    Subsection (d) provides that on request by the Secretary, 
the Secretary of the Treasury shall transfer from the Fund to 
the Secretary, and the Secretary shall accept and use without 
further appropriation, such amounts as the Secretary determines 
to be necessary to pay the following:
    Paragraph (A) provides for the costs of planning, design, 
development, construction, acquisition, modernization, leasing, 
and disposal of facilities, equipment, and technology used by 
the Department in carrying out programs relating to the 
purposes specified in this section.
    Paragraph (B) provides for the costs of specialized 
services relating to the purposes specified in this section.
    Paragraph (C) provides for the costs of cooperative 
arrangements authorized to be entered into with State, local 
and tribal governments, and other public and private entities, 
to carry out programs relating to the purposes specified in 
this section.
    Paragraph (D) provides for administrative costs incurred in 
carrying out this section.
    Subsection (e) provides that the Secretary by sale may 
dispose of all or any part of any right or title in land 
(excluding National Forest System land), facilities, or 
equipment in the full control of the Department (including land 
and facilities at the Beltsville Agricultural Research Center). 
Proceeds from the sale are deposited in the Fund established 
under this section.
    Subsection (f) provides that the Secretary may accept gifts 
and bequests of funds, property (real, personal, and 
intangible), equipment, services, and other in-kind 
contributions from State, local, and tribal governments, 
colleges and universities, individuals, and other public and 
private entities subject to the conflict-of-interest 
limitations set out in this subsection.

Section 1486. Agriculture Infrastructure Security Commission

    Subsection (a) provides that the Secretary shall establish 
a commission to be known as the Agriculture Infrastructure 
Security Commission.
    Subsection (b) provides the Commission shall be comprised 
of 15 voting members, appointed by the Secretary based on 
nominations solicited from the public. Commission members shall 
represent a balance of the public and private sectors; and have 
combined expertise in facilities development, modernization, 
construction, security, consolidation, and closure; plant 
diseases and pests; animal diseases and pests; food safety; 
biosecurity; the needs of farmers and ranchers; public health; 
State, local, and tribal government; and any other area related 
to agriculture infrastructure security, as determined by the 
Secretary.
    The following non-voting members shall serve on the 
Commission: the Secretary; four representatives appointed by 
the Secretary of Health and Human Services from the Public 
Health Service, the National Institutes of Health, the Centers 
for Disease Control and Prevention, and the Food and Drug 
Administration; one representative appointed by the Attorney 
General; one representative appointed by the Director of 
Homeland Security; and not more than four representatives of 
the Department appointed by the Secretary.
    Subsection (c) provides that the term of office of a member 
of the Commission shall be 4 years except that initial terms 
shall be staggered.
    Subsection (d) provides for the requirements for meetings 
of the Commission, applicability of the Federal Advisory 
Committee Act, and records requirements.
    Subsection (e) provides that the Secretary shall appoint 
the Chair from among the voting members of the Commission.
    Subsection (f). Duties:
    Paragraph (1) provides that the Commission shall advise the 
Secretary on the uses of the Fund; review all agricultural 
research facilities for research importance, and importance to 
agriculture infrastructure security; identify any agricultural 
research facility that should be closed, realigned, 
consolidated, or modernized to carry out the research agenda of 
the Secretary and protect agriculture infrastructure security; 
develop recommendations concerning agricultural research 
facilities; and evaluate the agricultural research facilities 
acquisition and modernization system.
    Paragraph (2) provides that to assist the Commission in 
carrying out the duties described in paragraph (1), the 
Commission shall use the 10-year strategic plan prepared by the 
Strategic Planning Task Force established under section 4 of 
the Research Facilities Act.
    Paragraph (3) requires the Commission to submit an annual 
report to the Secretary, the Committee on Agriculture and the 
Committee on Appropriations of the House of Representatives, 
and the Committee on Agriculture, Nutrition, and Forestry and 
the Committee on Appropriations of the Senate. Not later than 
90 days after the date of receipt of this report, the Secretary 
shall provide to the Commission a written response concerning 
the manner and extent to which the Secretary will implement the 
recommendations in the report. This report shall be publicly 
available subject to the limitation set forth in this 
paragraph.
    Subsection (g) provides for the compensation of commission 
members.
    Subsection (h) authorizes the appropriation of such sums as 
are necessary for 2002 through 2006.

                 CHAPTER 2.--OTHER BIOSECURITY PROGRAMS


Section 1487. Special authorization for biosecurity planning and 
        response

    This section amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 to create a special 
account for appropriations for agricultural research, 
education, and extension activities for biosecurity planning 
and response.
    Subsection (a) authorizes such sums as are necessary for 
fiscal years 2002 through 2006 to be appropriated.
    Subsection (b) provides that funds provided under this 
section may be used under any authority available to the 
Secretary in order to reduce the vulnerability of the U.S. food 
and agricultural system to chemical or biological attack, to 
counter any such chemical or biological attack, or to respond 
to any such chemical or biological attack.

Section 1488. Agricultural Bioterrorism Research Facilities

    Subsection (a) defines terms used in this section including 
definitions of construction, cost, and eligible entities.
    Subsection (b) provides that to enhance the security of 
agriculture in the United States against threats posed by 
bioterrorism, the Secretary shall make construction grants, on 
a competitive basis, to eligible entities subject to a 
limitation of $10,000,000 in any one fiscal year.
    Subsection (c) sets forth the requirements for grants.
    Subsection (d) provides the Secretary discretion in 
determining the amount of grant awards.
    Subsection (e) requires that the Federal share of the cost 
of any construction carried out using funds from a grant 
provided under this section shall not exceed 50 percent.
    Subsection (f) provides that not later than 180 days after 
the date of enactment of this subtitle, the Secretary shall 
issue guidelines with respect to the provision of grants under 
this section.
    Subsection (g) provides for an authorization of 
appropriations for $100,000,000 for fiscal years 2003 through 
2005.
    Subsection (b) provides a sense of Congress provision that 
funding for the Agricultural Research Service, the Animal and 
Plant Health Inspection Service, and other agencies of the 
Department of Agriculture with responsibilities for biosecurity 
should be increased as necessary to improve the capacity of the 
agencies to conduct research and analysis of, and respond to, 
bioterrorism and animal and plant diseases.

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


Section 731. National genetic resources program

    This section reauthorizes this program through 2006.

Section 732. Biotechnology Risk Assessment Research

    This section reauthorizes this program through 2006, and 
amends the Food, Agriculture, Conservation, and Trade Act of 
1990 to create priority for grants to institutions that have 
the goals of forming interdisciplinary teams to review or 
conduct research, conducting studies on the biosafety of 
genetically modified agricultural products, evaluating of 
identity preservation systems, establishing international 
partnerships, or reviewing the nutritional enhancement and 
environmental effects of genetically modified agricultural 
products.

Section 733. High-priority research and extension initiatives

    This section reauthorizes this program through 2006, and 
amends the Food, Agriculture, Conservation, and Trade Act of 
1990 to create research initiatives for: Animal infectious 
diseases and biosecurity, childhood obesity, integrated pest 
management, and beef cattle genetics.

Section 734. Nutrient management research and extension initiative

    This section reauthorizes this program through 2006.

Section 735. Organic agriculture research and extension initiative

    This section reauthorizes this program through 2006, and 
expands the authorization for organic research to cover use of 
genomics to improve organic agriculture and to address concerns 
about the potential impact of genetically modified organisms on 
organic agriculture.

Section 736. Agricultural telecommunications program

    This section reauthorizes this program through 2006.

Section 737. Assistive technology program for farmers with disabilities

    This section reauthorizes this program through 2006.

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


Section 741. Initiative for Future Agriculture and Food Systems

    This section amends section 401(b) of the Act to preserve, 
continue, and expand funding for this program through 2006.
    New subparagraph (1)(A) of section 401(b) preserves the 
current fiscal year allocations of funding under the existing 
section 401(b)(1) by re-enacting language requiring the 
Secretary of Treasury to transfer to the Initiative Account 
$120,000,000 for each fiscal year through fiscal year 2002.
    New subparagraph (1)(B) of section 401(b) requires the 
Secretary of Treasury to transfer to the Initiative Account 
$145,000,000 for each of fiscal years 2003 through 2006.
    New paragraph (2) provides that the Secretary of 
Agriculture shall receive, accept, and use the funds in the 
Account, without further appropriation. Existing law provides 
that the funds required to be transferred by the Secretary of 
the Treasury for each fiscal year under section 401(b) shall 
remain available for two fiscal years.

Section 742. Partnerships for high-value agricultural product quality 
        research

    This section reauthorizes this program through 2006.

Section 743. Precision agriculture

    This section reauthorizes this program through 2006.

Section 744. Biobased products

    This section reauthorizes this program through 2006.

Section 745. Thomas Jefferson initiative for crop diversification

    This section reauthorizes this program through 2006.

Section 746. Integrated research, education, and extension competitive 
        grants program

    This section reauthorizes this program through 2006.

Section 747. Support for research regarding diseases of wheat and 
        barley caused by fusarium graminearum

    This section reauthorizes this program through 2006.

Section 748. Office of pest management policy

    This section reauthorizes this program through 2006.

Section 749. Senior Scientific Research Service

    The Agricultural Research, Extension, and Education Reform 
Act of 1998 is amended by adding a provision for a senior 
scientific research service for USDA. This allows USDA to offer 
outstanding researchers higher pay than they would be able to 
receive under the general federal civil service scale, which 
will help USDA stay competitive with other federal agencies and 
the private sector.
    Subsection (a) establishes the service.
    Subsection (b) provides that the members of the service 
shall have a doctoral degree and be outstanding in their field. 
One hundred members are authorized and they are exempted from 
many of the provisions applicable to civil service similar to 
federal employees in the Senior Executive Service.
    Subsection (c) directs the Secretary to establish a 
performance appraisal system.
    Subsection (d) provides that the rate of compensation for 
members of the service shall not be less than the minimum GS-15 
rate and not more than Level I of the Executive Schedule unless 
approved by the President.
    Subsection (e) provides that members of the service can 
participate in the Federal Employees Retirement System.
    Subtitle (f) addresses involuntary separation of members of 
the service.

                     Subtitle D--Land-Grant Funding


                      CHAPTER 1--1862 INSTITUTIONS


Section 751. Carryover

    Amends the Hatch Act of 1887 to allow the balance of any 
annual funds provided under this Act to a State agricultural 
experiment station for a fiscal year that remains unexpended at 
the end of the fiscal year to be carried over for use during 
the following fiscal year. If any of the unexpended balance 
carried over by a State is not expended by the end of the 
second fiscal year, an amount equal to the unexpended balance 
shall be deducted from the next succeeding annual allotment to 
the State.

Section 752. Reporting of technology transfer activities

    Amends the Hatch Act of 1887 to require land grant 
institutions to report on technology transfer activities.

Section 753. Compliance with multistate and integration requirements

    Amends the Smith-Lever and Hatch Acts to require a State to 
have spent on multistate extension activities and integrated 
research and extension activities, from all sources of 
cooperative extension and research funding (Federal, State, and 
local), an amount equal to 25 percent of the Federal funds 
provided to the State in the prior fiscal year, before 
receiving its annual allocation of research or extension 
funding.
    Paragraph (1) defines multistate activity.
    Paragraph (2) requires institutions to meet a requirement 
that 25 percent of an institution's activities be multistate as 
measured by Federal, State, and local funding.
    Paragraph (3) provides the Secretary the authority to 
reduce the percentage.
    Paragraph (4) requires a plan of work from an institution 
demonstrating how it will meet the goals of this section.
    Paragraph (5) exempts Native American and territorial 
institutions.
    Subsection (b) amends the Hatch Act:
    Paragraph (1) requires institutions to meet a requirement 
that 25 percent of an institution's activities be integrated as 
measured by Federal, State, and local funding.
    Paragraph (2) provides the Secretary the authority to 
reduce the percentage.
    Paragraph (3) requires a plan of work from an institution 
demonstrating how it will meet the goals of this section.
    Paragraph (4) exempts Native American and territorial 
institutions.
    Paragraph (5) allows funds counted towards meeting the 
multistate extension requirement to be counted towards meeting 
the integrated activities requirement as well.

                      CHAPTER 2--1994 INSTITUTIONS


Section 754. Extension at 1994 institutions

    Amends the Smith-Lever Act to make technical changes to the 
extension program at Native American institutions.
    Subparagraph (A) authorizes the appropriation of such sums 
as are necessary to implement the section.
    Subparagraph (B) directs the Secretary to establish a 
formula for distributing funds among institutions.
    Subparagraph (C) allows cooperative agreements among 
classes of institutions.

Section 755. Equity in Educational Land-Grant Status Act of 1994

    Amends the Equity in Educational Land-Grant Status Act of 
1994.
    Subsection (a) updates the names of 1994 institutions.
    Subsection (b) requires 1994 institutions to be accredited 
to receive research grants.
    Subsection (c) authorizes appropriations of such sums as 
are necessary for formula funds under this section.
    Subsection (d) modifies the definition by which the full-
time equivalent Indian student count is calculated.
    Subsection (e) increases the authorization for 
institutional payments from $50,000 to $100,000 annually.
    Subsection (f) reauthorizes institutional capacity building 
grants through 2006, and authorizes the appropriation of such 
sums as are necessary.
    Subsection (g) reauthorizes research grants through 2006.

Section 756. Eligibility for integrated grants program

    Amends the Agricultural Research, Extension, and Education 
Reform Act of 1998 to allow 1994 institutions to participate in 
the Integrated Grants Program.

                      CHAPTER 3--1890 INSTITUTIONS


Section 757. Authorization percentages for research and extension 
        formula fund

    Subsection (a) amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 to increase the 
authorization for extension formula funds for the 1890 land 
grant institutions to an amount not less than 15 percent of 
that appropriated for extension formula funds for the 1862 
institutions under the Smith-Lever Act.
    Subsection (b) amends the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 to increase the 
formula percentage to 25 percent for 1890 institutions.

Section 758. Carryover

    Amends the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 to allow the carryover of the 
balance of any annual funds provided to an eligible institution 
for a fiscal year that remains unexpended at the end of the 
fiscal year.
    Subsection (a) provides the funds are available for use 
during the following fiscal year.
    Subsection (b) provides that any unexpended balance carried 
over by an eligible institution that is not expended by the end 
of the second fiscal year will be deducted from the next 
succeeding annual allotment to the eligible institution.

Section 759. Reporting of technology transfer activities

    Amends the National Agriculture Research, Extension, and 
Teaching Policy Act of 1977 to require 1890 institutions to 
report on their technology transfer activities.

Section 760. Grants to upgrade agricultural and food sciences 
        facilities at 1890 land-grant colleges, including Tuskegee 
        University

    Amends the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 to increase the grant authorization 
level to $15,000,000 for 1996 to 2002 and $25,000,000 annually 
for 2002 through 2006.

Section 761. National research and training centennial centers

    This section reauthorizes this program through 2006.

Section 762. Matching funds requirement for research and extension 
        activities

    Amends the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 to ramp up the 1890 matching 
requirement to 60 percent in 2003 and 110 percent of the prior 
year's matching requirement from 2004 through 2006. The 
Secretary has discretion to waive the match required above 50 
percent under certain conditions.

                   CHAPTER 4--LAND-GRANT INSTITUTIONS


                         Subchapter A--General


Section 771. Priority setting process

    Amends the Agricultural Research, Extension, and Education 
Reform Act of 1998 to require USDA to establish minimum 
stakeholder review requirements that ensure transparency and 
opportunity for stakeholders to provide input.

Section 772. Termination of certain Schedule A appointments

    Subsection (a) terminates 60 days after enactment of this 
Act all Federal Schedule A civil service appointments for 
extension workers at land-grant institutions who hold dual 
Federal-State appointments.
    Subsection (b) provides for continued eligibility of 
terminated appointees for certain federal benefits subject to 
limitations provided for in this subsection.

         Subchapter B--Land-Grant Institutions in Insular Areas


Section 775. Distance education grants program for insular area land-
        grant institutions

    Amends the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977.
    Subsection (a) authorizes a distance education program for 
insular area land-grant institutions.
    Subsection (b) provides that grants made under the program 
can be used for a broad range of purposes necessary to 
implementing the program.
    Subsection (c) provides that funds shall not be used for 
the planning, acquisition, construction, rehabilitation, or 
repair of a building or facility.
    Subsection (d) requires the Secretary to administer the 
program in a manner that recognizes the needs of state 
cooperative institutions.
    Subsection (e) provides that the Secretary may establish a 
matching funds requirement for funds from non-Federal sources 
that is not less than 50 percent of the grant.
    Subsection (f) authorizes appropriations of $4,000,000 
annually for 2002 through 2006.

Section 776. Matching requirements for research and extension formula 
        funds for insular area land-grant institutions

    Amends the Hatch Act of 1887 and the Smith-Lever Act to 
create a 50 percent matching requirement for insular area land 
grant institutions. The Secretary may waive the matching fund 
requirement for any fiscal year if the Secretary determines 
that the government of the insular area will be unlikely to 
meet the matching requirement for the fiscal year.

                         Subtitle E--Other Laws


Section 781. Critical agricultural materials

    This section reauthorizes this program through 2006.

Section 782. Research facilities

    This section reauthorizes this program through 2006.

Section 783. Federal agricultural research facilities

    This section reauthorizes this program through 2006.

Section 784. Competitive, special, and facilities research grants

    The Competitive, Special, and Facilities Research Grant Act 
(7 U.S.C. 450i) is amended to strike the statutorily set 
research priorities in the National Research Initiative and 
authorize the Secretary of Agriculture to set the priorities in 
consultation with the Advisory Board and stakeholders.

Section 785. Risk management education for beginning farmers and 
        ranchers

    Amends the Federal Crop Insurance Act to allow risk 
management education grants targeted to beginning farmers. 
Grants are for educating producers generally about the full 
range of risk management activities, including futures, 
options, agricultural trade options, crop insurance, cash 
forward contracting, debt reduction, production 
diversification, farm resources risk reduction, and other risk 
management strategies.

Section 786. Aquaculture

    This section reauthorizes this program through 2006.

                      Subtitle F--New Authorities


Section 791. Definitions

    Defines terms used under this subtitle.

Section 792. Regulatory and inspection research

    Allows the Secretary to utilize the best available sources 
for meeting urgent research needs of USDA agencies.
    Subsection (a) defines terms used under this section.
    Subsection (b) requires the Secretary to consider the most 
practicable public or private source that provides the most 
timely and cost-effective research in meeting the needs of the 
research and inspection agencies of the Department such as the 
Food Safety and Inspection Service, Grain Inspection, Packers, 
and Stockyards Administration, Animal and Plant Health 
Inspection Administration, and Agricultural Marketing Service.
    Subsection (c) requires the Secretary to establish 
guidelines to prevent conflicts of interest.
    Subsection (d) allows the Secretary to promulgate necessary 
regulations.

Section 793. Emergency research transfer authority

    Authorizes transfers between USDA appropriations to address 
critical research needs. Transfers are subject to limitations 
on the amount, demonstration of urgency, and approval by the 
Office of Management and Budget.
    Subsection (a) allows the Secretary to transfer up to 2 
percent of any appropriation made available to an office or 
agency of the Department for a fiscal year for agricultural 
research, extension, marketing, animal and plant health, 
nutrition, food safety, nutrition education, or forestry 
programs to any other appropriation for an office or agency of 
the Department for emergency research, extension, or education 
activities needed to address imminent threats to animal and 
plant health, food safety, or human nutrition, including 
bioterrorism.
    Subsection (b) provides that the Secretary may transfer 
funds only on a determination by the Secretary that the need is 
so imminent that the need will not be timely met by annual, 
supplemental, or emergency appropriations. The total amount 
transferred in a fiscal year cannot exceed $5,000,000, and must 
be approved by the Director of the Office of Management and 
Budget.

Section 794. Review of the Agricultural Research Service

    Subsection (a) requires the Secretary to conduct a review 
of the purpose, efficiency, effectiveness, and impact on 
agricultural research of the Agricultural Research Service.
    Subsection (b) requires the Secretary to use persons 
outside the Department including Federal scientists, college 
and university faculty, private and nonprofit scientists, or 
other persons familiar with the Agricultural Research Service 
and its role in conducting agricultural research in the United 
States.
    Subsection (c) requires a report due not later than 
September 30, 2004.
    Subsection (d) Provides that the Secretary shall use to 
carry out this section not more than 0.1 percent of the amount 
of appropriations made available to the Agricultural Research 
Service for each of fiscal years 2002 through 2004.

Section 795. Technology transfer for rural development

    Subsection (a) provides that the Secretary, acting through 
the Rural Business-Cooperative Service and the Agricultural 
Research Service, shall establish a program to promote the 
availability of technology transfer opportunities of the 
Department to rural businesses and residents.
    Subsection (b) requires that, to the maximum extent 
practicable, the program include a website featuring 
information about the program and technology transfer 
opportunities, an annual joint program for State economic 
development directors and Department rural development 
directors regarding technology transfer opportunities, and 
available technology transfer opportunities programs.
    Subsection (c) provides that the Secretary shall use funds 
made available to the Agricultural Research Service and Rural 
Business-Cooperative Service for salaries and expenses for the 
program.

Section 796. Beginning farmer and rancher development program

    Provides for the establishment of a beginning farmer and 
rancher development program.
    Subsection (a) defines terms used in this section.
    Subsection (b) provides that the Secretary shall establish 
a beginning farmer and rancher development program to foster 
training, education, outreach, and technical assistance 
initiatives for beginning farmers or ranchers.
    Subsection (c). Grants:
    Paragraph (1) provides competitive grants to eligible 
institutions to support new and established local and regional 
training, education, outreach, and technical assistance 
initiatives for beginning farmers or ranchers.
    Paragraph (2) provides that to be eligible to receive a 
grant under this subsection, the recipient shall be a 
collaborative State, local, or regionally-based network or 
partnership of public or private entities, which may include a 
State cooperative extension service, a Federal or State agency, 
a community-based nongovernmental organization, a college or 
university (including an institution awarding an associate 
degree), or any other appropriate partner, as determined by the 
Secretary.
    Paragraph (3) provides that grants shall not exceed a term 
of three years.
    Paragraph (4) establishes a 25 percent matching requirement 
for grantees.
    Paragraph (5) requires not less than 25 percent of the 
funds to be set aside to be used to support programs and 
services that address the needs of limited resource and 
socially disadvantaged beginning farmers or ranchers.
    Paragraph (6) provides that a grant made under this 
subsection may not be used for the planning, repair, 
rehabilitation, acquisition, or construction of a building or 
facility.
    Paragraph (7) requires the Secretary to use not more than 
four percent of the funds made available to carry out this 
section for administrative costs incurred by the Secretary in 
carrying out this section.
    Subsection (d):
    Paragraph (1) requires the Secretary to establish beginning 
farmer and rancher education teams to develop curricula and 
conduct educational programs and workshops for beginning 
farmers or ranchers in diverse geographical areas of the United 
States.
    Paragraph (2) provides that in promoting the development of 
curricula, the Secretary shall, to the maximum extent 
practicable, include modules tailored to specific audiences of 
beginning farmers or ranchers, based on crop or regional 
diversity.
    Paragraph (3) requires the Secretary, in establishing an 
education team for a specific program or workshop, to the 
maximum extent practicable, to obtain the short-term services 
of specialists with knowledge and expertise in programs serving 
beginning farmers or ranchers, and use officers and employees 
of the Department with direct experience in programs of the 
Department that may be taught as part of the curriculum for the 
program or workshop.
    Paragraph (4) requires the Secretary to cooperate, to the 
maximum extent practicable, with State cooperative extension 
services, Federal and State agencies, community-based and 
nongovernmental organizations, colleges and universities 
(including an institution awarding an associate's degree), or 
foundations maintained by a college or university, and other 
appropriate partners, as determined by the Secretary.
    Subsection (e) requires the Secretary to establish an 
online clearinghouse that makes available to beginning farmers 
or ranchers education curricula and training materials and 
programs.
    Subsection (f) requires the Secretary to seek stakeholder 
recommendations.
    Subsection (g) provides that nothing in this section 
prohibits the Secretary from allowing farmers and ranchers who 
are not beginning farmers or ranchers from participating in 
programs authorized under this section to the extent that the 
Secretary determines that such participation is appropriate and 
will not detract from the primary purpose of educating 
beginning farmers and ranchers.
    Subsection (h) provides that not later than 30 days after 
the date of enactment of this Act, and on October 1, 2002, and 
each October 1 thereafter through October 1, 2005, the 
Secretary of the Treasury shall transfer $15,000,000, to remain 
available for two years. It also allows the Secretary to charge 
and collect fees.

Section 797. Sense of Congress regarding doubling of funding for 
        agricultural research and increasing capacity for research on 
        biosecurity and animal and plant health diseases

    This section provides a sense of Congress provision that 
federal investments in food and agricultural research should 
double over the next five years.

Section 798. Rural Research

    Subsection (a) establishes a Rural Research Fund Account in 
the U.S. Treasury.
    Subsection (b) provides that not later than 30 days after 
the date of enactment of this Act, and on October 1, 2002, and 
each October 1 thereafter through October 1, 2005, the 
Secretary of the Treasury shall transfer $15,000,000, to remain 
available for two years.
    Subsection (c) requires the Secretary to use the funds in 
the account to make competitive research grants for rural 
policy research on topics such as: rural sociology, effects of 
demographic change, needs of groups of rural citizens, rural 
community development, rural infrastructure, rural business 
development, rural education and extension programs, and rural 
health.
    Subsection (d) requires the Secretary in making grants 
under this section, to solicit and consider public comment from 
persons who conduct or use agricultural research, extension, 
education, or rural development programs, and ensure that 
funded proposals will provide high-quality research that may be 
of use to public policymakers and private entities in making 
decisions that affect development in rural areas.
    Subsection (e) provides that eligible grantees are: an 
individual; a college or university or a research foundation 
maintained by a college or university; a State cooperative 
institution; a community college; a nonprofit organization, 
institution, or association; a business association; an agency 
of a State, local, or tribal government; or a regional 
partnership of public and private agencies.
    Subsection (f) provides that a grant under this section 
shall have a term that does not exceed five years.
    Subsection (g) provides that the Secretary may require that 
the grant funding be matched, in whole or in part, with 
matching funds from a non-Federal source. The Secretary is 
required to implement a 100 percent matching requirement for a 
grant to a business association.
    Subsection (h) provides that the Secretary may use not more 
than four percent of the funds made available for grants under 
this section to pay administrative costs incurred in carrying 
out this section.

Section 798A. Priority for farmers and ranchers participating in 
        conservation programs

    Requires the Secretary to give priority in carrying out the 
programs or projects authorized under this act to using farms 
or ranches of farmers or ranchers who participate in Federal 
agricultural conservation programs.

Section 798B. Organic production and market data initiatives

    Requires the Secretary to collect and disseminate market 
data on the organic agriculture industry.

Section 798C. Organically produced product research and education

    Requires the Secretary to produce a report, in consultation 
with the Small Farm Commission on implementation of the 
National Organic Standards Program about the impact of the 
program on small farms.

Section 798D. International organic research collaboration

    Requires the Agricultural Research Service and the National 
Agricultural Library to facilitate access by research and 
extension professionals to organic research conducted outside 
the United States.

                          TITLE VIII--FORESTRY


Section 801. Office of international forestry

    This section amends the Food, Agriculture, Conservation, 
and Trade Act of 1990 to re-authorize through 2006 the 
international forestry office. Under this office, the Forest 
Service provides technical assistance to other nations, 
especially in the tropics, on such matters as forest management 
for sustainable development and global environmental stability.

Section 802. McIntire-Stennis cooperative forestry research program

    This section reaffirms the importance of Public Law 87-88, 
the McIntire-Stennis Cooperative Forestry Act. Under this 
program, authorized by the McIntire-Stennis Act, the Department 
of Agriculture funds eligible institutions of higher learning 
to support forestry related scientific research.

Section 803. Sustainable forestry outreach initiative; renewable 
        resources extension activities

    This section amends the Renewable Resources Extension Act 
of 1978 (RREA) to re-authorize the Act through 2006 and 
increase its authorization of appropriation from $15,000,000 to 
$30,000,000 each year. The section also creates a sustainable 
forestry outreach initiative within the RREA to educate 
landowners about sustainable forestry, the importance of 
professional forestry advice in achieving sustainable forestry 
objectives, and the resources available to assist landowners in 
planning for and practicing sustainable forestry.

Section 804. Forestry incentives program

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to re-authorize the forestry incentives program through 
fiscal year 2006. This program provides financial assistance 
for forest management such as tree planting, timber stand 
improvement, and reforestation on non-federal lands.

Section 805. Sustainable forestry cooperative program

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to establish a program with $2,000,000 annual mandatory 
funding to assist in the development of sustainable forestry 
cooperatives owned and operated by nonindustrial private forest 
landowners and comprised of members at least 51 percent of whom 
are farmers or ranchers. The program shall provide competitive 
grants to non-profit organizations that have demonstrated 
expertise in cooperative development.

Section 806. Sustainable forest management program

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to establish a program that is administered by the 
Secretary, acting through State foresters, and in coordination 
with State coordinating committees. Mandatory funding of 
$48,000,000 is available annually and is to be distributed via 
a nationwide funding formula. Cost share grants are provided to 
nonindustrial private forest landowners who agree to develop a 
management plan and implement approved activities for a period 
of not less than 10 years. The program ensures that the need 
for expanded technical assistance for non-industrial private 
forest landowners is met in funding priorities for each State.
    The program provides that the Secretary allocate resources 
among States to encourage: forest health and productivity, 
timber stand improvement and growth, riparian buffer and forest 
wetland protection, enhancement of fish and wildlife habitat, 
soil, air and water quality, the reduction of soil erosion and 
soil quality through agroforestry practices, enhancement of the 
forest landbase, reduction of the threat of catastrophic 
wildfire, preservation of aesthetic quality and opportunities 
for outdoor recreation.
    Approved activities include: the restoration of forests for 
shelterbelts, windbreaks, and other conservation purposes; the 
sustainable growth and management of forests for timber 
production, enhancement of forest wetland and riparian areas, 
the protection of water quality and watersheds, preservation of 
habitat for plants, fish and wildlife, the control of the 
spread of invasive species, the acquisition of permanent 
easements, and other activities approved by the Secretary.

Section 807. Forest fire research centers

    This section amends the Forest Rangeland Renewable 
Resources Act of 1978 and requires the Secretary to establish 
at least two forest fire research centers at institutions of 
higher learning, including in two or more western States. The 
centers are established to conduct integrative, 
interdisciplinary research into the ecological, socioeconomic, 
and environmental impact of fire control and to develop new 
fire control technologies. The section also establishes an 
advisory committee to set priorities for research under this 
program. There are authorized such sums as necessary to carry 
out the section.

Section 808. Wildfire prevention and hazardous fuel purchase program

    This section amends the Cooperative Forestry Assistance Act 
of 1978. The first subsection authorizes the Secretary to 
provide grants to eligible entities that use hazardous fuels to 
generate electricity. The subsection authorizes appropriations 
of $50,000,000 annually. The second subsection authorizes the 
Secretary to enter into stewardship contracts for the removal 
of hazardous fuels from National Forest System land to 
implement the National Fire Plan. There are authorized such 
sums as necessary to carry out this subsection.

Section 809. Enhanced community fire protection

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to authorize the Secretary to cooperate with State 
foresters and equivalent State officials to enhance community 
fire protection and enhance tree and forest growth and resource 
conservation. The section also establishes a community and 
private land fire assistance program which enables the 
Secretary to undertake a variety of activities aimed at 
preventing fires on both Federal and non-federal lands. The 
section authorizes appropriations of $35,000,000 annually.

Section 810. Watershed forestry assistance program

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to authorize the Secretary to establish a cost-share 
program to provide to States, through State foresters, 
technical, financial, and related assistance to expand forest 
stewardship capacities and activities, prevent water quality 
degradation, and address watershed issues on non-federal forest 
land. The section authorizes appropriations of $20,000,000 
annually.

Section 811. General provisions

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to allow the Secretary to make grants and enter into 
contracts, agreements or other arrangements to carry out the 
Act.

Section 812. State forest stewardship coordinating committees

    This section amends the Cooperative Forestry Assistance Act 
of 1978 to add the United States Fish and Wildlife Service to 
State coordinating committees under the Act. The section also 
requires that each committee submit to the Secretary and the 
Committee on Agriculture of the House of Representatives and 
the Committee on Agriculture, Nutrition, and Forestry of the 
Senate an annual report that lists the members on the committee 
and an explanation for the reasons members that may be included 
on the committee are not included.

                            TITLE IX--ENERGY


Section 901. Findings

    This section states Congressional findings with respect to 
the development of agriculturally based renewable energy, the 
promotion of energy efficiency and biobased products.

Section 902. Consolidated Farm and Rural Development Act

    This section amends the Act by adding a subtitle L--Clean 
Energy.

Section 388A. Definitions

    This section includes definitions of biomass, renewable 
energy and rural small business.

                CHAPTER 1--BIOBASED PRODUCT DEVELOPMENT


Section 388B. Biobased product purchasing requirement

    This section establishes a mandatory federal purchasing 
requirement of biobased products if they are on a USDA biobased 
products list and are comparable in price, performance and 
availability to non-biobased products. The section also 
instructs the Secretary to develop a labeling program for 
biobased products similar to the Energy Star program of the 
Department of Energy and Environmental Protection Agency. 
Mandatory funding of $2,000,000 is available annually.

Section 388C. Biorefinery development grants

    This section establishes a competitive grant program to 
support the development of biorefineries for the conversion of 
biomass into multiple products such as fuels, chemicals and 
electricity. Mandatory funding of $15,000,000 is available 
annually.

Section 388D. Biodiesel fuel education program

    This section establishes a competitive grant program to 
educate government and private entities with vehicle fleets and 
the public about the benefits of biodiesel fuel use. The 
section authorizes appropriations of $5,000,000 annually.

     CHAPTER 2--RENEWABLE ENERGY DEVELOPMENT AND ENERGY EFFICIENCY


Section 388E. Renewable energy development grant program

    This section establishes a competitive grant and loan 
program to assist new cooperatives and business ventures at 
least 51 percent owned by farmers or ranchers for the 
development of renewable energy projects to produce 
electricity. Mandatory funding of $16,000,000 is available 
annually.

Section 388F. Energy audit and renewable energy development program

    This section establishes a competitive grant program to 
eligible entities to administer farmer, rancher and rural small 
business energy audits and renewable energy development 
assessments. Mandatory funding of $15,000,000 is available 
annually.

Section 388G. Grants and loans to farmers, ranchers and rural small 
        businesses for renewable energy systems and energy efficiency 
        improvements

    This section establishes a grant and loan program to assist 
eligible farmers, ranchers and rural small businesses in 
purchasing renewable energy systems and for making energy 
efficiency improvements. Mandatory funding of $33,000,000 is 
available annually.

Section 388H. Hydrogen and fuel cell technologies program

    This section establishes a competitive grant program to 
eligible entities to demonstrate the use of hydrogen and fuel 
cell technologies in farm and rural applications. Mandatory 
funding of $5,000,000 is available annually.

Section 388I. Technical assistance for farmers and ranchers to develop 
        renewable energy resources

    This section states the Secretary, acting through the 
Cooperative State Research, Education, and Extension Service, 
and in consultation with the Natural Resources Conservation 
Service, may provide education and technical assistance to 
farmers and ranchers for the development and marketing of 
renewable energy resources.

      CHAPTER 3--CARBON SEQUESTRATION RESEARCH, DEVELOPMENT, AND 
                         DEMONSTRATION PROGRAM


Section 388J. Research

    This section establishes a carbon sequestration research 
and development program to promote understanding of the net 
sequestration of organic carbon in soil and net emissions of 
other greenhouse gases from agriculture. Requires that, within 
three years, the Secretary convene a conference of key 
scientific experts on carbon sequestration from various sectors 
to establish benchmark standards for measuring soil carbon 
content and net emissions of other greenhouse gases, designate 
measurement techniques and modeling approaches to achieve such 
standards, and evaluate results of analyses on baseline, 
permanence and leakage issues. The section authorizes 
appropriations of $25,000,000 annually.

Section 388K. Demonstration projects and outreach

    This section establishes carbon sequestration monitoring 
programs; demonstration projects of methods for measuring, 
verifying and monitoring changes in carbon content and 
greenhouse gas emissions; and periodic outreach to farmers and 
ranchers regarding the connection between global climate change 
mitigation strategies and agriculture. The section authorizes 
appropriations of $10,000,000 annually.

Section 903. Biomass Research and Development Act of 2000

    This section extends the Act's termination date to 
September 30, 2006. Mandatory funding of $15,000,000 is 
available annually to carry out the purposes of the Act.

Section 904. Rural Electrification Act of 1936

    Amends the Rural Electrification Act by adding at the end 
the following:

Section 21. Financial and technical assistance for renewable energy 
        projects

    This section establishes a grant and loan program to assist 
rural electric cooperatives and other rural electric utilities 
in developing renewable energy to serve the needs of rural 
communities or for rural economic development. Grants may be 
used to help pay for renewable energy project feasibility 
studies, and technical assistance. Loans are available for 
other costs associated with a project. Mandatory funding of 
$9,000,000 is available annually.

Sec. 905. Carbon sequestration demonstration program

    This section establishes a competitive research and 
development program to test the methodologies by which private 
parties may pay farmers and foresters a market-based fee to 
store carbon and to otherwise reduce net emissions of 
greenhouse gases. Under this program, the Department of 
Agriculture would share in the costs of monitoring, verifying 
and auditing such trades on a demonstration basis and would 
also make grants to researchers to establish the best 
methodologies for measuring additional carbon sequestration in 
soils and plants. The section authorizes appropriations of 
$20,000,000 annually.

Sec. 906. Sense of Congress concerning national renewable fuels 
        standard

    This section expresses the sense of Congress that a 
national renewable fuels program should be adopted and that the 
Department of Agriculture should ensure its policies and 
programs promote the production of fuels from renewable fuel 
sources.

Sec. 907. Sense of Congress concerning the bioenergy program of the 
        Department of Agriculture

    This section expresses the sense of Congress that biofuel 
production capacity will be needed to phase out methyl tertiary 
butyl ether in gasoline and the dependence of the United States 
on foreign oil; and the bioenergy program of the Department of 
Agriculture should be continued and expanded.

                         TITLE X--Miscellaneous


        Subtitle A--Country of Origin and Quality Grade Labeling


Section 1001. Country of origin labeling

    This section amends the Agricultural Marketing Act of 1946 
(7 U.S.C. 1621 et seq.) by adding a new Subtitle C containing 
the following sections:

Section 271. Definitions

    This section defines terms used in the subtitle. For the 
purpose of this subtitle, the term ``covered commodity'' means 
beef, lamb, pork, farm-raised fish, perishable agricultural 
commodities or peanuts but does not include processed beef, 
lamb and pork items or frozen entrees containing beef, lamb and 
pork.

Section 272. Notice of country of origin

    Subsection (a). This subsection requires a retailer of a 
covered commodity to inform consumers of the country of origin 
of the covered commodity. It establishes the requirements that 
must be met before a retailer may designate a covered commodity 
as having a United States country of origin.
    Subsection (b). This subsection provides that the 
notification requirements of this section do not apply to food 
service establishments.
    Subsection (c). This subsection allows the information 
required by this section to be provided to consumers by means 
of a label, stamp, mark, placard, or other clear and visible 
sign on the covered commodity or on the package, display, 
holding unit, or bin containing the commodity at the final 
point of sale to consumers.
    Subsection (d). This subsection allows the Secretary to 
require that any person who prepares, stores, handles, or 
distributes a covered commodity for retail sale must maintain 
records that will permit the Secretary to ensure compliance 
with the regulations promulgated under section 274.
    Subsection (e). This subsection requires any person engaged 
in the business of supplying a covered commodity to a retailer 
to provide information to the retailer indicating the 
commodity's country of origin.
    Subsection (f). This subsection allows the Secretary, in 
developing a program to certify country of origin under this 
section, to use as a model existing certification programs.

Section 273. Enforcement

    This section provides that in general, Section 253 of the 
Agricultural Marketing Act will apply to violations of this 
subtitle. It requires the Secretary to give notice of a 
violation and provide 30 days in which the retailer may remedy 
the violation before assessing a fine.

Section 274. Regulations

    This section allows the Secretary to promulgate regulations 
necessary to carry out this subtitle, and requires the 
Secretary to partner with States, to the maximum extent 
practicable, to enforce this subtitle.

Section 275. Application

    This section provides that this subtitle will apply to the 
retail sale of covered commodities beginning 180 days after the 
date of the enactment.

Section 1002. Quality grade labeling of imported meat and meat food 
        products

    This section amends the Agricultural Marketing Act of 1946 
(7 U.S.C. 1621 et seq.) (as amended by section 1001) by adding 
a new Subtitle D containing the following sections:

Section 281. Definition of Secretary

    This section defines ``Secretary'' for the purpose of this 
subtitle.

Section 282. Quality grade labeling of imported meat and meat food 
        products

    This section prohibits imported meat or meat food products 
from bearing a label that indicates a quality grade issued by 
the Secretary.

Section 283. Regulations

    This section requires the Secretary to promulgate 
regulations necessary to ensure compliance with, and carry out, 
this subtitle.

                       Subtitle B--Crop Insurance


Section 1011. Continuous coverage

    This section amends Section 508(e)(4) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(e)(4)) by removing the time limit 
on the prohibition on continuous coverage in that section.

Section 1012. Quality loss adjustment procedures

    This section amends Section 508(m)(3) of the Federal Crop 
Insurance Act (7 U.S.C. 1508(m)(3)) to require that adjustments 
to the procedures described in this subsection be made by the 
2003 reinsurance year.

Section 1013. Conservation Requirements

    Subsection (a). This subsection amends Section 1211(1)(A) 
of the Food Security Act of 1985 (16 U.S.C. 3811(1)) to provide 
that persons who produce agricultural commodities on highly 
erodible land in any crop year without complying with 
conservation requirements are ineligible during that crop year 
for payments under any contract (as opposed to production 
flexibility contracts specifically, as provided by existing 
law), as well as ineligible for marketing assistance loans and 
any type of price support or payment under the Agricultural 
Market Transition Act. It also adds a new subparagraph (C) 
listing another category of payments for which such persons are 
ineligible--indemnity payments under the Federal Crop Insurance 
Act (7 U.S.C. 1501 et seq.).
    Subsection (b). This subsection amends Section 1221(b) of 
the Food Security Act of 1985 (16 U.S.C. 3821(b)) to provide 
that persons who produce agricultural commodities on converted 
wetland in any crop year are ineligible during that crop year 
for payments under any contract (as opposed to production 
flexibility contracts specifically, as provided by existing 
law), as well as ineligible for marketing assistance loans and 
any type of price support or payment under the Agricultural 
Market Transition Act. It also adds farm storage facility loans 
made under section 4(h) of the Commodity Credit Corporation 
Charter Act (15 U.S.C. 714b(h)), disaster payments, and 
indemnity payments under the Federal Crop Insurance Act (7 
U.S.C. 1501 et seq.) to the list of loans and payments for 
which such persons are ineligible.
    Subsection (c). This subsection amends Section 519(b) of 
the Controlled Substances Act (21 U.S.C. 889) by making 
technical changes, and by adding to the list of loans and 
payments for which persons convicted of cultivating controlled 
substances are ineligible (A) payments made pursuant to a 
contract entered into under the environmental quality 
incentives program under chapter 4 of subtitle D of title XII 
of the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.); 
(B) a payment under any other provision of subtitle D of title 
XII of that Act (16 U.S.C. 3830 et seq.); (C) a payment under 
section 401 or 402 of the Agricultural Credit Act of 1978 (16 
U.S.C. 2201, 2202); or (D) a payment, loan, or other assistance 
under section 3 or 8 of the Watershed Protection and Flood 
Prevention Act (16 U.S.C. 1003 and 1006a).

                     Subtitle C--General Provisions


Section 1021. Unlawful stockyard practices involving nonambulatory 
        livestock

    This section amends Title III of the Packers and Stockyards 
Act, 1921, by inserting after section 317 (7 U.S.C. 217a) the 
following new section:

Section 318. Unlawful stockyard practices involving nonambulatory 
        livestock

    Subsection (a). This subsection defines terms used in this 
section.
    Subsection (b). This subsection provides that in general, 
it will be unlawful under section 312 of this Act for any 
stockyard owner, market agency, or dealer to buy, sell, give, 
receive, transfer, market, hold, or drag any nonambulatory 
livestock unless the nonambulatory livestock has been humanely 
euthanized. This prohibition will not apply to any farm not 
subject to the authority of the Grain Inspection, Packers, and 
Stockyards Administration, nor will it apply in a case in which 
nonambulatory livestock receive veterinary care intended to 
render the livestock ambulatory.

Section 1022. Cotton classification services

    This section re-authorizes and extends the cotton 
classification activities of the Department of Agriculture 
under the Cotton Statistics and Estimates Act through 2006.

Section 1023. Protection for purchasers of farm products

    This section amends the Food Security Act of 1985 to 
conform provisions to the revised Uniform Commercial Code. It 
allows filings for security interests in farm products to 
identify the State, county, or parish in which the product is 
located, instead of requiring the exact description of property 
where the product is located.

Section 1024. Penalties and foreign commerce provisions of the Animal 
        Welfare Act

    This section amends Section 26(e) of the Animal Welfare Act 
(7 U.S.C. 2156(e)) by increasing the penalties for violations 
from a maximum fine of $5,000 to a maximum fine of $15,000, and 
from a maximum of one year in prison to a maximum of two years 
in prison. This section also amends Section 26(g)(2)(B) to add 
a prohibition against the transporting of animals for fighting 
purposes from any State into any foreign country.

Section 1025. Prohibition on interstate movement of animals for animal 
        fighting

    This section amends Section 26(d) of the Animal Welfare Act 
(7 U.S.C. 2156(d)) to prohibit the movement in interstate or 
foreign commerce of live birds for the purpose of animal 
fighting. Existing law allows the interstate movement of birds 
for fighting purposes as long as they are shipped to a state 
where fighting is legal. The prohibition does not apply to the 
selling, buying, transporting, or delivery of birds in 
interstate or foreign commerce for purposes other than the 
participation of the animal in an animal fighting activity.

Section 1026. Outreach and assistance for socially disadvantaged 
        farmers and ranchers

    This section amends Section 2501 of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (7 U.S.C. 2279) by striking 
subsection (a) and inserting a new subsection (a) containing 
the following paragraphs:
    Paragraph (1). This paragraph defines terms used in this 
subsection.
    Paragraph (2). This paragraph requires the Secretary to 
carry out an outreach and technical assistance program to 
encourage and assist socially disadvantaged farmers and 
ranchers in owning and operating farms and ranches and in 
participating equitably in the full range of agricultural 
programs offered by the Department.
    Paragraph (3). This paragraph provides that the outreach 
and technical assistance program under paragraph (2) must 
enhance coordination of the outreach, technical assistance, and 
education efforts authorized under various agriculture 
programs, and must include information on, and assistance with, 
commodity, conservation, credit, rural, and business 
development programs, application and bidding procedures, farm 
and risk management, marketing, and other activities essential 
to participation in the Department's programs.
    Paragraph (4). This paragraph provides that in general, the 
Secretary may make grants to, and enter into contracts and 
other agreements with, an eligible entity to provide 
information and technical assistance under this subsection.
    Paragraph (5). This paragraph authorizes appropriations of 
$25,000,000 for each of fiscal years 2002 through 2006 to carry 
out this subsection. In addition to the funds authorized to be 
appropriated to carry out this subsection, any agency of the 
Department may participate in any grant, contract, or agreement 
entered into under this section by contributing funds if the 
agency determines that the objectives of the grant, contract, 
or agreement will further the authorized programs of the 
contributing agency.

Section 1027. Public disclosure requirements for county committee 
        elections

    This section amends Section 8(b)(5) of the Soil 
Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) 
by striking subparagraph (B) and inserting a new subparagraph 
(B) providing that in general, in each county or area in which 
activities are carried out under this section, the Secretary 
will establish a county or area committee. The Secretary may 
designate local administrative areas within a county or a 
larger area under the jurisdiction of a committee. A committee 
will consist of between three and five members that are fairly 
representative of the agricultural producers within the area 
covered by the county, area, or local committee and are elected 
by the agricultural producers who participate or cooperate in 
programs administered within the area under the jurisdiction of 
the county, area, or local committee. The Secretary is required 
to establish procedures for nominations and elections to 
county, area, or local committees. Each solicitation of 
nominations, and notice of elections, to a county, area, or 
local committee must include the nondiscrimination statement 
used by the Secretary. To be eligible for nomination and 
election to the applicable county, area, or local committee, as 
determined by the Secretary, an agricultural producer must be 
located within the area under the jurisdiction of a county, 
area, or local committee, and participate or cooperate in 
programs administered within that area. In addition to 
establishing nominating procedures, the Secretary must solicit 
and accept nominations from organizations representing the 
interests of socially disadvantaged groups (as defined in 
section 355(e)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2003(e)(1)). At least ten days before 
the date on which ballots are to be opened and counted, a 
county, area, or local committee must announce the date, time, 
and place at which election ballots will be opened and counted, 
and the ballots cannot be opened until that date, time, and 
place. Any person may observe the opening and counting of the 
election ballots. Not later than 20 days after the date on 
which an election is held, a county, area, or local committee 
must file an election report with the Secretary and the State 
office of the Farm Service Agency that includes the number of 
eligible voters in the area covered by the county, area, or 
local committee; the number of ballots cast in the election by 
eligible voters (including the percentage of eligible voters 
who cast ballots); the number of ballots disqualified in the 
election; the percentage that the number of ballots 
disqualified is of the number of ballots received; the number 
of nominees for each seat up for election; the race, ethnicity, 
and gender of each nominee, as provided through the voluntary 
self-identification of each nominee; and the final election 
results (including the number of ballots received by each 
nominee). Not later than 90 days after the date on which the 
first election of a county, area, or local committee that 
occurs after the date of enactment of the Agriculture, 
Conservation, and Rural Enhancement Act of 2001 is held, the 
Secretary must complete a report that consolidates all the 
election data reported to the Secretary under this 
subparagraph. With respect to election reform, if determined 
necessary by the Secretary after analyzing the data contained 
in the report, the Secretary will promulgate and publish in the 
Federal Register proposed uniform guidelines for conducting 
elections for members and alternate members of county, area, 
and local committees not later than one year after the date 
ofcompletion of the report. The procedures promulgated by the Secretary 
must ensure fair representation of socially disadvantaged groups in an 
area covered by the county, area, or local committee, in cases in which 
those groups are underrepresented on the county, area, or local 
committee for that area. The Secretary may ensure inclusion of socially 
disadvantaged farmers and ranchers through provisions allowing for 
appointment of additional voting members to a county, area, or local 
committee or through other methods consistent with the Constitution. 
The term of office for a member of a county, area, or local committee 
will not exceed three years.

Section 1028. Pseudorabies Eradication Program

    This section amends the Food, Agriculture, Conservation, 
and Trade Act of 1990 to reauthorize and extend the 
Pseudorabies Eradication Program through 2006.

Section 1029. Tree Assistance Program

    This section amends Section 194 of the Federal Agriculture 
Improvement and Reform Act of 1996 (Public Law 104-127; 110 
Stat. 945) to read as follows:
    Subsection (a). This subsection defines terms used in this 
section.
    Subsection (b). Eligibility:
    Paragraph (1). This paragraph requires the Secretary to 
provide assistance to eligible orchardists that, as determined 
by the Secretary, planted trees for commercial purposes and 
lost those trees as a result of a natural disaster.
    Paragraph (2). This paragraph provides that an eligible 
orchardist will qualify for assistance only if the tree 
mortality rate of the orchardist, as a result of the natural 
disaster, exceeds 15 percent (adjusted for normal mortality), 
as determined by the Secretary.
    Subsection (c). Assistance:
    Paragraph (1). This paragraph provides that in general, 
assistance provided by the Secretary to eligible orchardists 
for losses described in subsection (b) will consist of 
reimbursement of 75 percent of the cost of replanting trees 
lost due to a natural disaster, as determined by the Secretary, 
in excess of 15 percent mortality (adjusted for normal 
mortality), or at the discretion of the Secretary, sufficient 
tree seedlings to reestablish the stand.
    Paragraph (2). This paragraph limits the total amount of 
payments that a person may receive under this section to 
$100,000 or an equivalent value in tree seedlings. The 
Secretary must promulgate regulations that define the term 
``person'' for the purposes of this section (which will 
conform, to the extent practicable, to the regulations defining 
the term ``person'' promulgated under section 1001 of the Food 
Security Act of 1985 (7 U.S.C. 1308), and prescribe such rules 
as the Secretary determines are necessary to ensure a fair and 
reasonable application of the limitation established under this 
section.
    Subsection (d). This subsection provides that 
notwithstanding section 161, there is authorized to be 
appropriated such sums as are necessary to carry out this 
section for each of fiscal years 2002 through 2006.
    This section applies to tree losses that are incurred as a 
result of a natural disaster after January 1, 2000.

Section 1030. National Organic Certification Cost-Share Program

    Subsection (a). This subsection provides that in general, 
the Secretary (acting through the Agricultural Marketing 
Service) must use $3,500,000 in mandatory funds for fiscal year 
2002 to establish a national organic certification cost-share 
program to assist producers and handlers of agricultural 
products in obtaining certification under the national organic 
production program established under the Organic Foods 
Production Act of 1990 (7 U.S.C. 6501 et seq.).
    Subsection (b). This subsection provides that the Secretary 
will pay not more than 75 percent of the costs incurred by a 
producer or handler in obtaining certification under the 
national organic production program, as certified to and 
approved by the Secretary. The maximum amount of a payment made 
to a producer or handler under this section will be $500.

Section 1031. Food Safety Commission

    Subsection (a). Establishment:
    Paragraph (1). This paragraph provides that there is 
established a commission to be known as the ``Food Safety 
Commission'' (referred to in this section as the 
``Commission'').
    Paragraph (2). This paragraph provides the Commission will 
be composed of 15 members, of whom four will be appointed by 
the Majority Leader of the Senate, three will be appointed by 
the Minority Leader of the Senate, four will be appointed by 
the Speaker of the House of Representatives, three will be 
appointed by the Minority Leader of the House of 
Representatives, and one will be appointed jointly by the 
Speaker of the House of Representatives and the Majority Leader 
of the Senate and will serve as Chairperson. Members of the 
Commission will be knowledgeable about matters within the 
jurisdiction of the Commission, will represent consumer groups, 
food processors, food producers, and food retailers, public 
health professionals, food inspectors, food safety regulators, 
members of academia, or any other interested individuals, and 
will not be Federal employees. Members of the Commission are to 
be appointed no later than 60 days after the date of enactment 
of this Act. The Speaker of the House of Representatives, the 
Minority Leader of the House of Representatives, the Majority 
Leader of the Senate, and the Minority Leader of the Senate 
must consult among themselves prior to appointing the members 
of the Commission to achieve, to the maximum extent 
practicable, consensus on the appointments and fair and 
equitable representation of various points of view with respect 
to matters reviewed by the Commission. A vacancy on the 
Commission will not affect the powers of the Commission, and 
will be filled within 60 days of the vacancy and in the same 
manner as the original appointment was made.
    Paragraph (3). This paragraph provides that the initial 
meeting of the Commission will be conducted not later than 30 
days after the later of the date of appointment of the final 
member of the Commission or the date on which funds authorized 
to be appropriated under subsection (f)(1) are made available. 
The Commission will meet at the call of the Chairperson.
    Paragraph (4). This paragraph provides that a majority of 
the members of the Commission will constitute a quorum to 
conduct business. At the first meeting of the Commission, the 
Commission will adopt standing rules to guide the conduct of 
business and decision making of the Commission. To the maximum 
extent practicable, the Commission will carry out the duties of 
theCommission by reaching consensus. If the Commission is 
unable to achieve consensus with respect to a particular decision, the 
Commission will vote on the decision.
    Subsection (b). Duties:
    Paragraph (1). This paragraph provides that in general, the 
Commission will make specific recommendations that build on and 
implement, to the maximum extent practicable, the 
recommendations contained in the report of the National Academy 
of Sciences entitled ``Ensuring Safe Food from Production to 
Consumption'' and that will serve as the basis for draft 
legislative language to improve the food safety system, improve 
public health, create a harmonized, central framework for 
managing Federal food safety programs (including outbreak 
management, standard-setting, inspection, monitoring, 
surveillance, risk assessment, enforcement, research, and 
education), enhance the effectiveness of Federal food safety 
resources, and eliminate, to the maximum extent practicable, 
gaps, conflicts, duplication, and failures in the food safety 
system. Recommendations made by the Commission will address (i) 
all food available commercially in the United States, including 
meat, poultry, eggs, seafood, and produce; (ii) the application 
of all resources based on risk, including resources for 
inspection, research, enforcement, and education; (iii) 
shortfalls, redundancy, and inconsistency in laws (including 
regulations); and (iv) the use of science-based methods, 
performance standards, and preventative control systems to 
ensure the safety of the food supply of the United States.
    Paragraph (2). This paragraph provides that not later than 
one year after the date on which the Commission first meets, 
the Commission must submit to the President and Congress a 
comprehensive report that includes (A) the findings, 
conclusions, and recommendations of the Commission; (B) a 
summary of any reports submitted to the Commission under 
subsection (e) by the Advisory Commission on Intergovernmental 
Relations and the National Academy of Sciences; (C) a summary 
of any other material used by the Commission in the preparation 
of the report under this paragraph; and (D) if requested by one 
or more members of the Commission, a statement of the minority 
views of the Commission.
    Subsection (c). Powers of the Commission:
    Paragraph (1). This paragraph provides that the Commission 
may, for the purpose of carrying out this section, hold 
hearings, meet and act, take testimony, receive evidence, and 
administer oaths.
    Paragraph (2). This paragraph provides that in general, 
Section 1821 of title 28, United States Code, will apply to 
witnesses requested to appear before the Commission. The per 
diem and mileage allowances for a witness shall be paid from 
funds available to pay the expenses of the Commission.
    Paragraph (3). This paragraph provides that in general, the 
Commission may secure directly, from any Federal department or 
agency, information necessary to carry out its duties. On the 
request of the Commission, the head of a department or agency 
must furnish information requested by the Commission. The 
furnishing of information by a department or agency to the 
Commission will not be considered a waiver of any exemption 
available to the department or agency under section 552 of 
title 5, United States Code. For purposes of section 1905 of 
title 18, United States Code, the Commission will be considered 
an agency of the Federal Government, and any individual 
employed by an individual, entity, or organization that is a 
party to a contract with the Commission under subsection (e) 
will be considered an employee of the Commission. Information 
obtained by the Commission, other than information that is 
available to the public, will not be disclosed to any person in 
any manner except to an employee of the Commission, or in 
compliance with a court order, or, in any case in which the 
information is publicly released by the Commission, in an 
aggregate or summary form that does not directly or indirectly 
disclose the identity of any person or business entity or any 
information the release of which is prohibited under section 
1905 of title 18, United States Code.
    Subsection (d). Commission Personnel Matters:
    Paragraph (1). This paragraph provides that a member of the 
Commission will be compensated at a rate equal to the daily 
equivalent of the annual rate of basic pay prescribed for level 
IV of the Executive Schedule under section 5315 of title 5, 
United States Code, for each day (including travel time) during 
which the member is engaged in the performance of the duties of 
the Commission.
    Paragraph (2). This paragraph provides that a member of the 
Commission will be allowed travel expenses, including per diem 
in lieu of subsistence, at rates authorized for an employee of 
an agency under subchapter I of chapter 57 of title 5, United 
States Code.
    Paragraph (3). This paragraph provides that the Chairperson 
of the Commission may, without regard to the civil service laws 
(including regulations), appoint and terminate an executive 
director and such other additional personnel as are necessary 
to enable the Commission to perform the duties of the 
Commission. The rate of pay for the executive director and 
other personnel shall not exceed the rate payable for level V 
of the Executive Schedule under section 5316 of title 5, United 
States Code.
    Paragraph (4). This paragraph provides that an employee of 
the Federal Government may be detailed to the Commission, 
without reimbursement, for such period of time as the 
Commission may require. The detail of the employee shall be 
without interruption or loss of civil service status or 
privilege.
    Paragraph (5). This paragraph provides that the Chairperson 
of the Commission may procure temporary and intermittent 
services in accordance with section 3109(b) of title 5, United 
States Code, at rates for individuals that do not exceed the 
daily equivalent of the annual rate of basic pay prescribed for 
level V of the Executive Schedule under section 5316 of that 
title.
    Subsection (e). Contracts for Research:
    Paragraph (1). This paragraph provides that in carrying out 
its duties, the Commission may enter into contracts with the 
Advisory Commission on Intergovernmental Relations under which 
the Advisory Commission on Intergovernmental Relations will 
conduct a thorough review of, and will catalogue, all 
applicable Federal, State, local, and tribal laws, regulations, 
and ordinances that pertain to food safety in the United 
States. A contract under this paragraph will require that, not 
later than 240 days after the date on which the Commission 
first meets, the Advisory Commission on Intergovernmental 
Relations will submit a report that describes the results of 
the services rendered by the Advisory Commission on 
Intergovernmental Relations under the contract.
    Paragraph (2). This paragraph provides that in carrying out 
its duties, the Commission may enter into contracts with the 
National Academy of Sciences to obtain research or other 
assistance. A contract under this paragraph will require that, 
not later than 240 days after the date on which the Commission 
first meets, the National Academy of Sciences will submit to 
the Commission a reportthat describes the results of the 
services to be rendered by the National Academy of Sciences under the 
contract.
    Paragraph (3). This paragraph provides that nothing in this 
subsection limits or otherwise affects the ability of the 
Commission to enter into a contract with an entity or 
organization that is not described in paragraph (1) or (2) to 
obtain assistance in conducting research necessary to carry out 
the duties of the Commission.
    Subsection (f). This subsection authorizes appropriations 
of $3,000,000 to carry out this section. No payment may be made 
under subsection (d) or (e) except to the extent provided for 
in advance in an appropriations Act.
    Subsection (g). This subsection provides that the 
Commission will terminate on the date that is 60 days after the 
date on which the Commission submits the recommendations and 
report under subsection (b).

Section 1032. Humane methods of animal slaughter

    This section expresses the sense of Congress that the 
Humane Methods of Slaughter Act should be fully enforced and 
that USDA should resume tracking violations of the Act.

                       Subtitle D--Administration


Section 1041. Regulations

    This section allows the Secretary to promulgate such 
regulations as are necessary to implement this Act and the 
amendments made by this Act, and includes provisions relating 
to rulemaking procedures.

Section 1042. Effect of Amendments

    This section provides that in general, this Act and the 
amendments made by this Act will not affect the authority of 
the Secretary to carry out an agricultural market transition, 
price support, or production adjustment program for any of the 
1996 through 2001 crop, fiscal, or calendar years. A provision 
of this Act or an amendment made by this Act will not affect 
the liability of any person under any provision of law as in 
effect immediately before the date of enactment of this Act.

             V. Legislative History and Votes in Committee


                              (A) HEARINGS

    On January 30, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to review the final 
report of the 21st Century Commission on Production 
Agriculture. The 11-member Commission was created by the 
Federal Agriculture Improvement and Reform (FAIR) Act of 1996 
to identify the appropriate role of the federal government in 
production agriculture following expiration of the FAIR Act in 
2001. Members of the Commission who appeared before the 
committee included Dr. Barry Flinchbaugh, (Chairman of the 
Commission), Kansas State University, Manhattan, Kansas; Bruce 
Brumfield, Duncan Gin, Inc., Iverness, Mississippi; John 
Campbell, Ag Processing, Inc., Omaha, Nebraska; Mr. Donald 
Cook, Pendleton, Oregon; Jim DuPree, Newport, Arkansas; Mr. 
Charles Kruse, Missouri Farm Bureau, Jefferson City, Missouri; 
William Northey, Spirit lake, Iowa; Ralph Paige, Federation of 
Southern Cooperatives, East point, Georgia; Bob Stallman, 
American Farm Bureau, Park Ridge, Illinois; Leland Swenson, 
National Farmers Union, Aurora, Colorado; and Don Villwock, 
Edwardsport, Indiana. The Department of Agriculture's Chief 
Economist, Dr. Keith Collins, also testified about recent 
market and policy developments. In his opening statement, 
Chairman Lugar hailed the Commission's report as the beginning 
of the 2002 farm bill process. He addressed some of the 
structural issues in agriculture, and raised concerns about 
unintended consequences of farm policy that may be hurting some 
farmers more than helping them. Ranking member Harkin applauded 
the hard work undertaken by Commission members, but expressed 
some disappointment that they had chosen not to explore certain 
types of farm policy issues in their report, such as renewable 
energy, nutrition assistance, and rural development. He also 
noted that despite widespread financial difficulty in the farm 
sector, the report recommended only incremental changes to 
existing policy.
    On February 28, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to review the state of 
conservation programs in the current farm bill. Those 
testifying before the committee included: Katherine Smith, 
Director of Resource Economics, USDA Economic Research Service, 
Washington, D.C.; Jeffery Zinn, Resource, Science and Industry 
Division, Congressional Research Service; Thomas Weber, Deputy 
Chief for Programs, USDA Natural Resources Conservation 
Service, Washington, D.C.; and Robert Stephenson, Director of 
Conservation and Environmental Programs, USDA Farm Service 
Agency, Washington, D.C. The witnesses testified about the 
background and current status of conservation programs run by 
the USDA. They provided specific information on the enrollment 
levels, backlog, environmental benefits and need for changes in 
policy for the Conservation Reserve Program, Environmental 
Quality Incentives Program, Wildlife Habitat Incentives 
Program, Wetlands Reserve Program, Farmland Protection Program, 
conservation compliance, and technical assistance.
    On March 1, 2001 the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to continue reviewing the 
state of conservation programs in the current farm bill. Those 
testifyingbefore the committee included: Craig Cox, Executive 
Director, Soil and Water Conservation Society, Ankeny, Iowa; John 
Hassell, Executive Director, Conservation Technology Information 
Center, West Lafayette, Indiana; Nathan Rudgers, Commissioner, New York 
State Department of Agriculture and Markets, National Association of 
State Departments of Agriculture, Washington, D.C.; Paul Johnson, 
farmer from Deborah, Iowa; Bob Stallman, President, American Farm 
Bureau Federation, Washington, D.C.; Dan Specht, Sustainable 
Agriculture Coalition, Washington, D.C.; Tom Buis, Executive Director, 
National Farmers Union, Washington, D.C.; Rollin D. Sparrowe, 
President, Wildlife Management Institute, Washington, D.C.; Ralph 
Grossi, President, American Farmland Trust, Washington, D.C.; David 
Stawick, President, Alliance for Agricultural Conservation, Washington, 
D.C.; and Paul Faeth, Director, World Resources Institute, Washington, 
D.C. The witnesses testified primarily for the need to create a new 
conservation incentives program to bolster conservation on working 
lands. The new conservation incentives program would provide income to 
producers who implement conservation practices and would also reward 
those producers who currently maintain conservation practices on their 
land. Witnesses also testified for the need for increased funding, and 
acreage for existing conservation programs. They also spoke of the need 
for increased technical assistance to implement the programs.
    On March 24, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing in Spencer, Iowa to 
discuss the future of the farm bill and other related 
agricultural and rural issues. Those testifying before the 
committee included: Dr. Neil Harl, Professor of Economics, Iowa 
State University, Ames, Iowa; Joan Blundall, The Seasons Center 
for Community Mental Health, Spencer, Iowa; Don Mason, 
President-Elect, Iowa Corn Growers Association, Nemaha, Iowa; 
Mark Hamilton, Positively Iowa, Iowa Falls, Iowa; Duane Sand, 
Iowa Natural Heritage Foundation, Des Moines, Iowa; and Phil 
Sundblad, Iowa Farm Bureau Federation, Albert City, Iowa. 
Testimony was received on the issues of low commodity prices, 
improving income protection, expanding markets for commodities, 
and strengthening rural communities and economies. Comments and 
remarks were also given by many in the audience.
    On March 24, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing in Lewis, Iowa to discuss 
the future of the farm bill and other related agricultural and 
rural issues. Those testifying before the committee included: 
Michael Duffy, Professor of Economics, Iowa State University; 
David Williams, farmer and Wallace Foundation Learning Center, 
Page County, Iowa; John Askew, President, Iowa Soybean 
Association; Shirley Frederiksen, Golden Hills Resource 
Conservation and Development District; Sam Carney, Vice 
President, Iowa Pork Producers Association; Aaron Heley Lehman, 
Iowa Farmers Union; Denise O'Brien, Atlantic, Iowa; Gayl 
Hopkins; Harold Swanson; Joyce Schulte, Southwest Community 
College; Alan Zellmer, farmer/producer; Erwin Aust, Shenandoah, 
Iowa; Fox Ridge Farms, Carson, Iowa; Rod Bentley, President of 
Pottawattamie County Cattlemen's Association; Ron Brownlee, 
Adair County; Bill Ortner, farmer, Danbury, Iowa; Dan Morgan, 
farmer, Corning, Iowa; and Jim Hanson, New Market, Iowa. 
Testimony was received on the issues of low commodity prices, 
improving income protection, expanding markets for commodities, 
and strengthening rural communities and economies. Comments and 
remarks were also given by many in the audience.
    On March 27, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to review the Research, 
Extension and Education title of the Farm Bill. Those 
testifying before the committee included: Dr. Colien Hefferan, 
Administrator, Cooperative State Research, Education, and 
Extension Service, U.S. Department of Agriculture, Washington, 
D.C.; Dr. Floyd P. Horn, Administrator, Agricultural Research 
Service, U.S. Department of Agriculture, Washington, D.C.; Jon 
Caspers, Board Member, National Coalition for Food and 
Agricultural Research, Swaledale, Iowa; Jay Lemmermen, Producer 
Chair, Animal Ag Coalition, Okeechobee, Florida; Dr. Richard 
Stuckey, Executive Vice President, Council for Agricultural 
Science and Technology, Ames, Iowa; Dr. Phil Robertson, Member, 
Committee on an Evaluation of the U.S. Department of 
Agriculture, National Research Initiative Competitive Grants 
Program National Research Council, Hickory Corners, Michigan; 
Dr. Fred Kirschenmann, Director, Leopold Center for Sustainable 
Agriculture, Ames Iowa; Dr. David Chicoine, Chair, National 
Association of State Universities and Land Grant Colleges Board 
of Agriculture and Dean, College of Agricultural, Consumer, and 
Environmental Sciences, University of Illinois, Urbana, 
Illinois; Dr. Bobby Phills, Chair, 1890 Legislative Committee, 
Dean and Director of Land Grant programs, College of 
Engineering Sciences, Technology and Agriculture, Florida A&M 
University, Tallahassee, Florida; and Dr. Vic Lechtenberg, 
Chair, National Agricultural Research, Extension, Education and 
Economics Advisory Board and Dean of Agriculture, Purdue 
University, West Lafayette, Indiana.
    On April 25, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a full committee hearing to review 
the Trade title of the Farm bill. Those testifying before the 
committee included: Bruce Babcock, Director, Center for 
Agricultural and Rural Development, Iowa State University, 
Ames, Iowa; Ron Heck, Soybean Producer, Perry, Iowa; Robert 
Stallman, President, American Farm Bureau Federation, Columbus, 
Texas; Leland Swenson, President, National Farmers Union, 
Aurora, Colorado; Charles J. O'Mara, president, O'Mara and 
Associates, Washington, D.C.; James Echols, Chairman, National 
Cotton Council, Cordova, Tennessee; Timothy F. Hamilton, 
Executive Director, Mid-America International Agri-Trade 
Council, Executive Director, food Export USA--Northeast, 
Chicago, Illinois; Dennis McDonald, Chairman, Trade Committee 
for R-CALF United Stockgrowers of America, Melville, Montana; 
Judith Lewis, Acting Director of Resources and External 
Relations, World Food Program, Rome, Italy; Ken Hackett, 
Executive Director, Catholic Relief Services, Baltimore, 
Maryland and Gary Martin, President, North American Export 
Grain Association, Washington, D.C. In his opening statement, 
Chairman Lugar emphasized the importance of agricultural trade 
to American farmers, and urged rapid passage of legislation 
granting Trade Promotion Authority to the President. Ranking 
member Harkin noted that while the U.S. domestic market is 
still important, the export market will be crucial for 
absorbing that expanding portion of production which cannot 
find a domestic outlet. He underscored the necessity to not 
consider our trade policy or domestic programs in agriculture 
in isolation, but instead they must be developed in an 
integrated manner.
    On May 16, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a full committee hearing to review 
the Credit Title of the farm bill. Those testifying before the 
committee included: Neil Conklin, Director, Market and Trade 
Economics Division, EconomicResearch Service, U.S. Department 
of Agriculture, Washington, D.C.; Carolyn B. Cooksie, Deputy 
Administrator for Farm Loan Programs, Farm Service Agency, U.S. 
Department of Agriculture, Washington, D.C.; Lawrence J. Dyckman, 
Director of Agricultural Issues, U.S. General Accounting Office, 
Washington, D.C., accompanied by Charles Adams, Assistance Director; 
Jay B. Penick, President and Chief Executive Officer, Northwest Farm 
Credit Services, Washington, D.C., on behalf of the Farm Credit 
Council; Henry D. Edelman, Chief Executive Officer, Farmer Mac, 
Washington, D. C.; John Evans, Jr., Chief Executive Officer, D.L. Evans 
Bank, Burley, Idaho, on behalf of Independent Community Bankers of 
America; Gary R. Canada, President, Bank of England, England, Arkansas, 
on behalf of American Bankers Association; David Carter, President, 
Rocky Mountain Farmers Union, on behalf of the National Farmers Union, 
Washington, D.C.; Frank Brost, Rapid City, South Dakota, Chairman, Tax 
and Credit Committee, National Cattlemen's Beef Association; and Ferd 
Hoefner, Washington Representative, Sustainable Agriculture Coalition, 
Washington, D.C.
    On June 28, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to obtain an overview of 
the major issue areas and issues that the Committee will be 
dealing with in developing a new farm bill. The hearing was 
intended to reflect the breadth of the topics and issues that 
must be dealt with in a comprehensive farm bill. Those 
testifying before the committee included: Leland Swenson, 
President, National Farmers Union, Washington, D.C.; Bob 
Stallman, President, American Farm Bureau Federation, 
Washington, D.C.; Chuck Fluharty, Director, Rural Policy 
Research Institute, Columbia, Missouri; Craig Cox, Executive 
Vice President, Soil and Water Conservation Society, Ankeny, 
Iowa; Howard Learner, Environmental Law and Policy Center, 
Chicago, Illinois; Dr. Barbara Glenn, Member of the Board of 
Directors, National Coalition for Food and Agricultural 
Research, Executive Vice President, Federation of Animal 
Science Societies, Bethesda, Maryland; Sharon Daly, Vice 
President for Social Policy, Catholic Charities, Alexandria, 
Virginia; and Dave Carter, Secretary-Treasurer, Mountain View 
Harvest Cooperative, Longmont, Colorado. In his first hearing 
as Chairman of the Committee, Senator Harkin emphasized the 
need for a comprehensive farm bill, because of its importance 
to the entire nation. He asserted his desire to write a farm 
bill that will look ahead, rather than try to fix the problems 
or settle the issues of the past.
    On July 12, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to consider the next 
federal farm bill. Representatives from the feed grains and oil 
seeds industries presented their comments. The Chairman opened 
the hearing stating that it is his goal to develop policies 
that will help farmers get more of the consumer dollar than 
they are presently getting which is at an historic low. He also 
stated that it is crucial to devote more of our attention to 
looking at ways to generate greater utilization of our crops 
domestically. Those testifying before the committee included: 
Lee Klein, President, National Corn Growers Association, Battle 
Creek, Nebraska accompanied by Ron Litterer, Green, Iowa; Keith 
Dittrich, President, American Corn Growers Association, Tilden, 
Nebraska; Tony Anderson, President, American Soybean 
Association, Mount Sterling, Ohio; John Miller, President, 
Miller Milling, Minneapolis, Minnesota, Trudi Evans, President, 
Barley Growers Association, Merrill, Oregon and Bill Kubecka, 
Vice President for Legislation, Sorghum Growers Association, 
Palacios, Texas.
    On July 17, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to receive testimony 
regarding the next federal farm bill from producer 
representatives and others concerning cotton, wheat, rice, 
sugar and peanuts. In his opening statement, the Chairman 
recognized the many challenges facing producers of these 
diverse crops, which may require very different policies to 
address. Those testifying before the committee included: James 
Echols, Chairman of the Board, National Cotton Council, 
Cordova, Tennessee; Dusty Tallman, President, National 
Association of Wheat Growers, Brando, Colorado; John Denison, 
Chairman, Rice Foundation, Iowa accompanied by Nolan Canon, 
Chairman, U.S. Rice Producers Association Tunica, Mississippi; 
Jack Roney, Director of Economic Analysis, American Sugar 
Alliance, Arlington, Virginia; Art Jaeger, Assistant Director, 
Consumer Coalition of America, Washington, D.C.; Armond Morris, 
Chairman, Georgia Peanut Commission, Ocilla, Georgia 
accompanied by Evans J. Plowden, Jr., General Counsel, American 
Peanut Shellers, Albany, Georgia; and Wilbur Gamble, Producer 
and Chairman of the National Peanut Growers Group, Dawson, 
Georgia.
    On July 19, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to elicit suggestions for 
the Nutrition Title of the new federal farm bill. Those 
testifying included: Eric Bost, Undersecretary for Food, 
Nutrition, and Consumer Services, U.S. Department of 
Agriculture, Washington, D.C.; Robert Greenstein, Executive 
Director, Center on Budget and Policy Priorities, Washington, 
D.C.; Dr. Ron Haskins, Senior Fellow, Brookings Institution, 
Washington, D.C.; Karen Ford, Executive Director, Food Bank of 
Iowa, Des Moines, Iowa; Kevin W. Concannon, Commissioner, Maine 
Department of Human Services, Augusta, Maine; Celine Dieppa, 
Food Stamp Program Participant, Manchester, Connecticut; Dean 
Leavitt, Chairman and CEO, U.S. Wireless Data, Inc., New York, 
New York; Dr. Debra Frank, Director, Growth and Development 
Clinic, Boston, Massachusetts and Dr. Cutberto Garza, 
Professor, Cornel University, Ithaca, New York.
    Undersecretary Bost indicated he supported re-authorization 
of the Food Stamp Program, The Emergency Food Assistance 
Program, the Food Distribution Program on Indian Reservations, 
and the Commodity Supplemental Food Program. His 
recommendations relative to the Food Stamp Program included, 
the need to explore changes to make the program work better for 
working families; facilitate access to the benefits while 
minimizing burdens for State agencies; reduce administrative 
complexity for local administrators; preserve the program's 
national structure and improve the program's effectiveness in 
promoting healthy diets for the people it serves; and remain 
vigilant in the fight against fraud and abuse.
    Mr. Greenstein provided background on the Food Stamp 
Program, mentioned recent changes in the composition of the 
Food Stamp caseload, and provided trends in Food Stamp 
participation and reductions in Food Stamp expenditures. His 
recommendations were in the areas of program simplification, 
reform of the quality control system, granting to states more 
flexibility over various aspects of the delivery of benefits to 
eligible households, and narrowing the gaps in coverage to 
address the overly large reductions of recent years in the food 
purchasing power the program provides to the working poor, the 
elderly, and other households.
    Mr. Haskins' goal was to stress to the Committee that, even 
more than in the past, the Food Stamp Program has become a 
vital support to low-income mothers who work (and indicated 
that a higher percentage of single mothers are working since 
welfare reform than at any time in the past). Secondly, he 
stressed that administrative burdens are keeping many qualified 
people away and suggested that states should be permitted to 
apply a different quality control program to workers versus 
non-workers. In addition, he believes states should have the 
option to grant families leaving welfare for work with a Food 
Stamp benefit that is based on their starting salary and is 
fixed for at least six months. Finally, he stressed the Federal 
government needs greater assurance that states are informing 
low-income families, especially those leaving welfare, of their 
right to continue receiving Food Stamps as long as they 
qualify.
    Ms. Ford requested full funding for the Emergency Food 
Assistance Program, including money for storage, transportation 
and distribution of bonus commodities. She expressed concern at 
the drop in Food Stamp Program participation with a concurrent 
rise in the use of emergency feeding sites. Her recommendations 
focused on rules' and application simplification, modification 
of the quality control system, increases to the minimum 
benefit, and implementation of the EBT system.
    Mr. Concannon spoke about Maine's excellent outreach, 
access, and integrity record and the state's ability to retain 
eligible Food Stamp Program participants at a time when other 
states are seeing dramatic drops. He indicated that they view 
the program as an essential transitional benefit for working 
households and promote it as such. He stated that he is a 
proponent of program and processing simplification, enhanced 
benefits for the elderly and the disabled, doing away with cost 
neutrality rules when implementing EBT, overhauling the quality 
control system to be less punitive and incorporating additional 
performance measures that reward good service.
    Ms. Dieppa shared her experiences as a Food Stamp Program 
participant and a working mother. She indicated the program has 
been an essential work support over the last four years. She 
indicated that an excessive amount of paperwork that must be 
filed during working hours has meant that she has sometimes 
lost food stamp benefits and indicated that it would be 
extremely helpful to reduce the administrative burden for 
participants.
    Mr. Leavitt discussed the benefits of a new technology that 
provides farmers with the ability to wirelessly accept EBT 
cards at farmers' markets throughout the United States. He 
spoke specifically about a pilot program in New York that used 
this technology. Unfortunately, he said that at this time the 
cost of the wireless technology is quite high.
    Dr. Frank, who works with low-income children, presented 
data that indicated that Food Stamps make a dramatic difference 
in the food security of poor-working families with children. In 
turn, she said, the data showed food security is essential for 
physical and cognitive health. She encouraged the Committee to 
consider provisions that would ensure increased participation, 
by children, in the Food Stamp Program.
    Dr. Garza focused his remarks on the need to find more 
cohesive approaches to prevent childhood obesity and the 
increased prevalence of adult diseases (like diabetes) in 
children. He proposed adopting sound nutrition policies for the 
food assistance programs. He also commended Sen. Harkin's 
Global Food for Education Bill, through which children in third 
world countries would be able to receive free school meals to 
improve their micronutrient profiles.
    On July 24, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to discuss livestock 
issues for the new federal farm bill. Those testifying 
included: Jon Caspers, National Pork Producers Council, 
Swaledale, Iowa; Eric Davis, National Cattlemen's Beef 
Association, Bruneau, Idaho; Dennis McDonald, Ranchers-
Cattlemen Action Legal Fund United Stockgrowers of America, 
Billings, Montana; Frank Moore, American Sheep Industry 
Association, Douglas, Wyoming; William Roenigk, National 
Chicken Council, Washington, D.C.; Pete Hermanson, National 
Turkey Federation, Story City, Iowa; and Maria Rosmann, 
Sustainable Agriculture Coalition, Harlen, Iowa. The hearing 
focused on the need for conservation programs to assist 
livestock producers. Most of the witnesses spoke of the need to 
expand the reach of the Environmental Quality Incentives 
Program (EQIP) to all livestock producers, regardless of size. 
However, other witnesses preferred the current system which 
does not provide cost-share assistance to large livestock 
operators to construct animal waste facilities. Some witnesses 
expressed the need for additional programs, like the 
Conservation Security Act, which will help producers to better 
integrate crop and livestock productions in a sustainable 
manner. There was also discussion on the need for programs to 
help producers develop marketing skills and value-added 
enterprises, including organic operations. Witnesses also 
expressed a desire to see trade programs, like the Market 
Access Program, expanded. Some of the witnesses favored current 
commodity programs because of the lower feed prices they 
generate.
    On July 31, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing that focused on the need 
for conservation on lands in production or ``working lands.'' 
Chairman Harkin stated that he is interested in a strong 
conservation title and called the hearing to explore the 
benefits of good conservation practices in agriculture, 
specifically on working lands. Those testifying before the 
committee included: Lee Klein, National Corn Growers 
Association and American Soybean Association, Washington, D.C.; 
George Dunklin, Jr., USA Rice Federation, Dewitt, Arkansas; 
Gary Mast, National Association of Conservation Districts, 
Washington, D.C.; Dave Serfling, Land Stewardship Project, 
Preston, Minnesota; and Mark Shaffer, Defenders of Wildlife, 
Washington, D.C. The witnesses testified primarily for the need 
to create a new conservation incentives program to bolster 
conservation on working lands. The new conservation incentives 
program would provide income to producers who implement 
conservation practices. The program would also reward those 
producers who currently maintain conservation practices on 
their land. Witnesses also testified for the need for increased 
funding and technical assistance for conservation programs for 
working lands, including the Environmental Quality Incentives 
Program, Wildlife Habitat Incentive Program. They also spoke of 
the need for increased technical assistance through third-party 
providers to implement the programs.
    On August 2, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to discuss rural economic 
development issues for the new federal farm bill. Chairman 
Harkin opened the hearing by stating that we must take steps 
now to encourage growth and opportunity in rural America. He 
also said that we must help create the basic infrastructure 
required to do business andcreate jobs. Those testifying before 
the committee included: David Kolsrud, CORN-er Stone Farmers 
Cooperative, Luverene, Minnesota, on behalf of the National Cooperative 
Business Association; Ronald L. Phillips, President, Coastal 
Enterprises, Inc., Wiscaset, Maine; Chuck Hassebrook, Center for Rural 
Affairs, Walthill, Nebraska. Karen Dearlove, president, Indiana 
Association of Regional Councils, Jasper, Indiana. Curtis Wynn, Chief 
Executive Officer, Roanoke Electric Cooperative, Rich Square, North 
Carolina; Deborah M. Markley, Chair, Rural Equity Capital Initiative, 
Rural Policy Research Institute, Chapel Hill, North Carolina; Steve 
Lane, President, Iowa Independent Bankers Association, Gowrie, Iowa, on 
behalf of the Independent Community Bankers of America; Jack Cassidy, 
Senior Vice President, CoBank, Grenwoodville, Colorado.
    On August 4, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a field hearing in Worthington, 
Minnesota to discuss the new federal farm bill. Those 
testifying before the committee included: Al Christopherson, 
Minnesota Farm Bureau, Pennock, Minnesota; Bob Arndt, Minnesota 
NFO, Echo, Minnesota; Dave Frederickson, Minnesota Farmers 
Union, St. Paul, Minnesota; Loren Tusa, Minnesota Corn Growers 
Association, Alpha, Minnesota; Ed Hegland, Minnesota Soybean 
Growers Association, Appleton, Minnesota; Larry Liepold, 
Minnesota Pork Producers Association, Okabena, Minnesota; 
Monica Kahout, LSP, Olivia, Minnesota; Tim Henning, Nobles 
County farmer, Lismore, Minnesota; Dennis Bottem, Minnesota 
Cattlemen's Association, St. James, Minnesota; Ron Anderson, 
Minnesota Wheat Growers Association, Hallock, Minnesota; Dave 
Kolsrud, AgriEnergy, LLC, Luverne, Minnesota; and Bob Kirchner, 
Minnesota Soybean Processing, Brewster, Minnesota.
    On August 13, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a field hearing in Frankenmuth, 
Michigan to discuss speciality crop issues for the new federal 
farm bill. Those testifying before the committee included: 
Alison Fox, Counsel, Senate Committee on Agriculture, 
Nutrition, and Forestry; Hon. James A. Barcia, Member of 
Congress from the State of Michigan; Wayne Wood, President, 
Michigan Farm Bureau; Carl McIlvain, President, Michigan 
Farmers Union; Philip Korson, President, Cherry Marketing 
Institute, Inc., Lansing, Michigan; Elwood Kirkpatrick, 
President, Michigan Milk Producers Association; Jody Pollok, 
Executive Director, Michigan Corn Growers Association; Frank 
Kubik, President, National Commodity Supplemental Food Program 
Association and CSFP Manager for Focus: HOPE; Dr. Lonnie King, 
Dean of the College of Veterinary Medicine at Michigan State 
University; Sam Hines, Michigan Pork Producers Association; 
Curtis Thayer, Director, Michigan Soybean Association; and 
Richard Leach, Executive Vice President, Great Lakes Sugar Beet 
Growers Association.
    On August 13, 2001, the Senate Committee on Agriculture, 
Nutrition, Forestry held a field hearing in Grand Rapids, 
Michigan to discuss specialty crop issues for the new federal 
farm bill. Those testifying before the committee included: 
Alison Fox, Counsel, Senate Committee on Agriculture, Nutrition 
and Forestry; J. Ian Gray, Director, Michigan Agricultural 
Experiment Station; Thomas C. Butler, Manager, Michigan 
Processing Apple Growers Division of Michigan Agricultural 
Cooperative Marketing Association; Julia Baehre Hersey, Board 
Member, Michigan Apple Committee; Perry DeKryger, Executive 
Director, Michigan Asparagus Advisory Board; Bob Green, 
Executive Director, Michigan Bean Commission; Dennis Fox, 
Environmental Policy Specialist, Michigan United Conservation 
clubs; Ron Williams, State conservationist, Natural Resource 
Conservation Service; David Armstrong, Executive Vice 
President, Marketing, GreenStone Farm Credit Services; and 
Joanne Werdel, Policy Analyst and Communications Specialist, 
Center for Civil Justice.
    On August 27, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a field hearing in Athens, Georgia 
to discuss the new federal farm bill. Those testifying before 
the committee included: Robert McLendon, Chairman of the 
Executive Committee, National Cotton Council; Mary Alice McGee, 
Nashville, Georgia; Murray Campbell, Camilla, Georgia and James 
Lee Adams, Camilla, Georgia. The discussion focused on the 
current condition and future of agriculture in the Southeast. 
Leading agriculture representatives and researchers provided 
information in the areas of new farm legislation, trade 
developments, and agricultural technology.
    On August 18, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a field hearing in Tipton, Iowa to 
discuss the new federal farm bill. Chairman Harkin opened the 
hearing stating that farm families and people who live in rural 
America have not shared in our nation's prosperity. He said 
that we need new directions in federal agriculture and rural 
policies. Those testifying before the committee included: Ross 
Paustian, farmer, Walcott, Iowa; Jim Krier, Ollie, Iowa; Deb 
Ryun, Executive Director of Conservation Districts of Iowa; 
Mary Swalla Holmes, ISU Extension; John Helbling, General 
Manager of Economic Market Development, Alliant Energy. 
Comments were also taken from audience participants: Brad 
Wilson, Jerry Heithoff, John Specht, Gary Lamb, Walter Gray, 
Larry Ginter, Wayne Demmer, Rod Stevenson, Francis Thicke, Mike 
Jepson, Gary Bierschenk, Jeff Zacharakis-Jutz, Chris Petersen, 
John Dietrich, Ed McGivern, Ron Bremley, Carrie Holdgrafer, 
Jennifer * * *, Brian Holdgrafer, Bruce Peters, Dwayne Sand, 
Lloyd Holecek, Phil Specht, Tony Serbousek and Therese Smith. 
Testimony was received on the issues of low commodity prices, 
improving income protection, expanding markets for commodities, 
and strengthening rural communities and economies. Comments and 
remarks were also given by many in the audience.
    On August 20, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry conducted a field hearing in 
Stewartville, Minnesota to discuss the new federal farm bill. 
Those testifying before the committee included: Hon. Gil 
Gutknecht, Member of Congress from the State of Minnesota; 
Bishop Bernard J. Harrington; David Ladd, on behalf of the Farm 
Credit Services; Delbert Mandelko, President, Minnesota Milk 
Producers Association; Mike McGrath, on behalf of the Minnesota 
Project; Marcie McLaughlin, on behalf of America's State Rural 
Development Council; Ken Meter, Crossroads Resource Center, 
Minneapolis, Minnesota; Sever Peterson, Eden Prairie, 
Minnesota; John Monson, State Executive Director, Minnesota 
Farm Service Agency, St. Paul, Minnesota; Ted Winter, State 
Representative, State of Minnesota; Mary Ellen Otremba, State 
Representative, State of Minnesota; Kenric Scheevel, State 
Senator, State of Minnesota; Amber Hanson, Racine, Minnesota; 
Colleen Landkramer, Blue Earth County Commissioner, Mankato, 
Minnesota; BarbaraJ. Collins, Legal Services Advocacy Project, 
St. Paul, Minnesota; Gene Paul, Faribault County, Delavan, Minnesota; 
Linda Noble, Organic Dairy Farmer, Kenyon, Minnesota; Eunice Biel, 
Dairy Farmer, Harmony, Minnesota; Jim Riddle, Winona, Minnesota; Nancy 
Adams, LeRoy, Minnesota; Rev. Chuck Purdhim, (Retired), United 
Methodist Church, Brooklyn Center, Minnesota; Phil Specht, Dairy 
Farmer, McGregor, Iowa; Kevin Ristau, Jobs Now Coalition, St. Paul, 
Minnesota; Lewis Reiman, Utica, Minnesota; Niel Ritchie, Institute for 
Agriculture and Trade Policy, Minneapolis, Minnesota; Janice Daley, 
Grain Farmer, Lewiston, Minnesota; Sister Kathleen Storm, Mankato, 
Minnesota; Kevin Scheidecker, Fillmore Soil and Water Conservation 
District, Preston, Minnesota; Mike Noble, Crop and Livestock Producer, 
Kenyon, Minnesota; Ron Durst, on behalf of Associated Milk Producers 
Inc.; Victor Ormsby, Winona, Minnesota; Tom Hoscheit, Caledonia, 
Minnesota; Lorraine Redig, Winona, Minnesota; Keith Speltz, Dairy 
Farmer, Southeast Minnesota; Margaret Zimmerman, Waseca, Minnesota; Les 
Everett, Water Resources Center, University of Minnesota; Gerald 
Tumbleson, Sherburn, Minnesota; Larry Larson, Sargeant, Minnesota; Rick 
Hansen, Inver Grove Heights, Minnesota; Ronald Behounek, Hayfield, 
Minnesota; Mike Muella, Winthrop, Minnesota; Barbara Upton, Fountain, 
Minnesota; Dwight Ault, Austin, Minnesota; Larry Green, Fulda, 
Minnesota; Robert M. Austin, New Prague, Minnesota; Roger Dale, Hanley 
Falls, Minnesota; Chris C. Petersen, Vice President, Iowa Farmers 
Union, Clear Lake, Iowa; Walt Prigge, Byron, Minnesota; Gary Joachim, 
Claremont, Minnesota, and on behalf of Minnesota Soybean Growers 
Association; Donovan Strom, Fountain, Minnesota; Bert Bowman, Eden 
Prairie, Minnesota; Bruce Biederman, Grafton, Iowa; Tim Henning, 
Lismore, Minnesota; Larry Predmore, Rochester, Minnesota; Brian Hanson, 
Racine, Minnesota; Bill McMillin, Dairy Farmer, Kellogg, Minnesota; Al 
Schacht, Zumbro Falls, Minnesota; and Rod Nelson, Chatfield, Minnesota.
    On September 26, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry held a hearing to discuss the 
Administration perspective with regard to the new federal farm 
bill. Secretary of Agriculture, Ann Veneman, appeared before 
the Committee to present the Administration views and its 
report on food and agricultural policy.
    On October 27, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry conducted a field hearing in Boise, 
Idaho to discuss the 2002 Farm Bill.

                     (B) Committee Markup Sessions

    On October 31, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry met in open session to mark up the 
Credit Title of the new federal farm bill. Those members in 
attendance included: Senators Harkin, Leahy, Conrad, Lincoln, 
Miller, Stabenow, Nelson, Dayton, Wellstone, Lugar, Cochran, 
McConnell, Fitzgerald, Thomas, Allard, Hutchison and Crapo. As 
described by Chairman Harkin, the Credit Title, among other 
things, addresses the need to help beginning farmers and 
ranchers gain greater access to federal farm lending programs. 
The Credit Title was adopted by a voice vote.
    On November 6, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry met in open session to mark up the 
Energy and Forestry Titles of the new federal farm bill. Those 
members in attendance included: Senators Harkin, Conrad, 
Stabenow, Dayton, Nelson, Lincoln, Wellstone, Leahy, Baucus, 
Lugar, Cochran, Hutchinson, Allard, Thomas, Crapo, Fitzgerald, 
Roberts, and McConnell. As described by Chairman Harkin, the 
Forestry Title continues the commitment to private forest land 
management of past farm bills and provides various forms of 
assistance to nine million private forest land owners. The 
Title addresses community fire protection and economic 
opportunities for farmers, ranchers, and others derived from 
sustainable forestry practices. A sustainable forest management 
program is established to provide states with financial 
assistance to meet multiple resource objectives on private 
forest lands. Senator Cochran offered an amendment to strike 
the mandatory funding requirement and authorize the 
appropriation of funds in the same amounts in Section 805 and 
806. The Cochran amendment failed by a voice vote. The Chairman 
moved to adopt the Forestry Title of the new federal farm bill. 
The Forestry Title was adopted by a voice vote. The Committee 
then took up the Energy Title. As described by Chairman Harkin, 
the Energy Title establishes several new programs providing 
incentives to farmers, ranchers and rural small businesses to 
develop renewable energy and biomass energy supplies on their 
lands and to increase energy efficiency. Senator Thomas offered 
an amendment to strike Section 388 (B) which requires a bio-
based product purchasing requirement for federal agencies. The 
Thomas amendment failed by a voice vote. Senator Dayton offered 
an amendment to Section 388 (d) that would increase the 
authorized appropriations from $1 million annually to $5 
million annually for the biodiesel fuel education program. The 
Dayton amendment was passed by a voice vote. Senator Cochran 
offered an amendment to strike the mandatory funding in the 
following sections and insert instead an authorization of 
funding in the same amounts that are included in each of the 
sections: Section 388(B), 388(C), 388(E), 388(F), 388(G), 
388(H), and Section 903. The Cochran amendment failed by a 
voice vote. Senator Lugar moved that the Energy Title be 
adopted, and the Title was adopted by a voice vote.
    On November 7, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry met in open session to mark up the Trade 
Title of the new federal farm bill. Those members in attendance 
included: Senators Harkin, Conrad, Baucus, Lincoln, Miller, 
Stabenow, Nelson, Dayton, Wellstone, Lugar, Cochran, Roberts, 
Fitzgerald, Thomas, Allard, Hutchinson, and Crapo. As described 
by Chairman Harkin, the Trade Title, among other things, seeks 
to improve and expand existing export and food programs in 
recognition of their important role in the ability to compete 
internationally. It recognizes that humanitarian activities 
throughout the developing world must be an important component 
of a long-term effort to combat poverty and to build bridges of 
good will to foreign countries. Senator Lugar moved that the 
Trade Title be adopted, and the Title was adopted by a voice 
vote.
    On November 8, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry met in open session to mark up the Rural 
Development and Research Titles of the new federal farm bill. 
Those members in attendance included: Senators Harkin, Conrad, 
Baucus, Lincoln, Miller, Stabenow, Nelson, Dayton, Wellstone, 
Lugar, Cochran, Roberts, Fitzgerald, Thomas, Allard, 
Hutchinson, and Crapo. As described by Chairman Harkin, the 
Rural Development Title contains a number ofcreative programs 
and initiatives designed to make a significant difference in economic 
and community development in rural America. Rural communities have not 
fully shared in our nation's prosperity and the title helps to generate 
the investment needed in rural America by creating and funding the 
Rural Business Investment Program and by authorizing the Rural 
Cooperative and Business Equity Fund. The title also provides 
substantial funding for value-added agricultural product market 
development grants to help develop solid new enterprises owned by 
agricultural producers in rural areas. The Business and Industry Loan 
Guarantee Program is improved and a new way to fund the Rural Economic 
Development Grant and Loan Program is established. To help smaller 
communities, the title provides an initiative to improve broadband 
Internet access. Funding for firefighting and first-responder training 
is also provided. Senator Harkin moved that the Research and the Rural 
Development Titles both be passed subject to amendments that are 
offered and that technical and confirming amendments may be made by 
staff. The motion was passed by a voice vote. Senator Cochran expressed 
his concern that the Rural Development Title would create a variety of 
new programs and provide mandatory funds for them. After allowing an 
opportunity for amendments, Chairman Harkin called the Rural 
Development Title closed and proceeded to the Research Title. Mr. Lugar 
moved an amendment he offered that $360 million a year for the 
Initiative for Future Agriculture and Food Systems be adopted for 
fiscal years 2003 to 2006. After debate, a recorded vote was taken and 
the Lugar amendment failed by a vote of 7 yeas, 13 noes and 1 not 
present. Those voting in favor of the amendment included: Senators 
Lugar, Helms, McConnell, Roberts, Fitzgerald, Allard, Crapo. Those 
voting against the amendment included: Senators Cochran, Hutchinson, 
Leahy, Conrad, Daschle, Baucus, Lincoln, Miller, Stabenow, Nelson, 
Dayton, Wellstone and Harkin. Senator Thomas was not present.
    On November 13, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry met in open session to mark up the 
Competition Title of the new federal farm bill. As described by 
Chairman Harkin, the Competition Title addresses the necessity 
of restoring fairness, transparency and equity to agribusiness. 
Senator Wellstone offered an amendment to the proposed Title 
that would strengthen and amend section 202 of the Packers and 
Stockyards Act of 1921 by prohibiting meat packers from owning 
livestock for 14 days prior to the purchase for slaughter. 
After debate, a roll call vote was taken and the Wellstone 
amendment failed by a vote of 9 yeas, 12 noes. Those Senators 
voting in favor of the amendment included: Leahy, Conrad, 
Daschle, Baucus, Stabenow, Wellstone, Thomas and Harkin. Those 
Senators opposing the amendment included: Lugar, Helms, 
Cochran, McConnell, Roberts, Fitzgerald, Allard, Hutchinson, 
Crapo, Lincoln, Miller and Nelson. Senator Lugar offered an 
amendment to strike the Competition Title from the proposed 
bill. After debate, a roll call vote was taken and the Lugar 
amendment passed by a vote of 12 ayes, 9 noes. Those Senators 
voting in favor of the amendment included: Lugar, Helms, 
Cochran, McConnell, Roberts, Fitzgerald, Thomas, Allard, 
Hutchinson, Crapo, Lincoln and Miller. Those Senators opposing 
the amendment included: Leahy, Conrad, Daschle, Baucus, 
Stabenow, Nelson, Dayton, Wellstone and Harkin. The Competition 
Title was stricken from the bill.
    On November 14, 2001, the Senate Committee on Agriculture, 
Nutrition and Forestry met in open session to mark up the 
Nutrition Title of the new federal farm bill. Those in 
attendance included: Senators Harkin, Conrad, Baucus, Lincoln, 
Miller, Stabenow, Nelson, Dayton, Wellstone, Lugar, Cochran, 
Roberts, Fitzgerald, Thomas, Allard, Hutchinson, and Crapo. As 
described by Chairman Harkin, the chairman's mark strengthens 
the program to help people more successfully transition from 
welfare to work and helps shield low-wage working families from 
the recession. Other provisions in the chairman's mark include: 
extending the period of time that able-bodied adults without 
dependents may participate in the food stamp program allowing 
them time to find and keep a job; simplifying the program and 
lightening the administrative burden; assisting with efforts to 
reach all children who are poor and for whom a proper diet is 
crucial; and increasing the standard deduction for food stamp 
families. It also makes modest changes regarding legal 
immigrants and their children by allowing families into the 
program after working here for four years. Senator Lugar moved 
a substitute amendment for the Harkin language in the nutrition 
title. After debate, a roll call vote was taken and the 
amendment failed by a vote of 9 yeas and 12 noes . Those voting 
for the amendment included: Senators Lugar, Cochran, McConnell, 
Roberts, Fitzgerald, Thomas, Allard, Crapo and Wellstone; those 
voting against the amendment included: Helms, Hutchinson, 
Leahy, Conrad, Daschle, Baucus, Lincoln, Miller, Stabenow, 
Nelson, Dayton, and Harkin. The Chairman moved that the 
Nutrition Title be adopted, and the Title was adopted by a 
voice vote.
    On November 15, 2001, the Senate Committee on Agriculture, 
Nutrition, and Forestry met in open session to mark up the 
Conservation, Commodity and Miscellaneous Titles of the new 
federal farm bill. Those in attendance included: Senators 
Harkin, Leahy, Conrad, Daschle, Baucus, Lincoln, Miller, 
Stabenow, Nelson, Dayton, Wellstone, Lugar, Helms, Cochran, 
McConnell, Roberts, Fitzgerald, Thomas, Allard, Hutchinson and 
Crapo. As described by Chairman Harkin, the Conservation Title 
recognizes that conservation is a cornerstone of sound farm 
policy. The mark will greatly increase the commitment to help 
agricultural producers and landowners conserve and protect 
soil, water, air, and wildlife, especially on land that is in 
production. The title increases funding for conservation on 
land in production, while also expanding support for programs 
that remove land from production. It establishes a new 
incentive payment program, the Conservation Security Program, 
which will both improve farm income and increase agricultural 
conservation. Senator Lugar expressed his support for the title 
and noted that he had worked closely on its drafting. The 
Chairman moved to adopt the Conservation Title and the title 
was adopted by a voice vote. The Committee then took up the 
Commodity Title. As described by Chairman Harkin, the Commodity 
Title is designed to provide a more dependable system of farm 
income protection that reduces the need for ad hoc farm 
assistance legislation year after year. The title addresses the 
lack of income protection in the current policy while 
maintaining planting flexibility. This legislation will 
generally increase loan rates modestly, will continue fixed 
direct payments, and it will create a new counter cyclical 
program to respond to period of low prices. It also provides 
for updating program-based acres and yields at the option of 
the producer. The title creates a stronger system of income 
protection for America's agricultural producers, one that 
responds when prices are low, while reducing program costs when 
the prices are better. This title fulfills the commitment to 
farmers in rural communities to improve the farm income safety 
net within the budget resources available. Senator Roberts 
offered an amendment on behalf of himself and Senator Cochran 
in the form of a substitute to replace the commodity title of 
the bill. After discussion and debate, a roll call vote was 
taken on the Cochran-Roberts amendment. The amendment failed by 
a vote of 9 yeas and 11 noes. Those Senators voting for the 
amendment included: Helms, Cochran, Roberts, Fitzgerald, 
Thomas, Allard, Hutchinson, Crapo and McConnell; those Senators 
voting against the amendment included: Leahy, Conrad, Daschle, 
Baucus, Lincoln, Miller, Stabenow, Nelson, Dayton, Wellstone 
and Harkin. Senator Lugar passed. Senator Dayton offered an 
amendment which he has introduced previously as the Farm Income 
Recovery Act. After discussion, the Dayton amendment failed by 
a voice vote. Chairman Harkin moved to adopt the Commodity 
Title of the farm bill. A roll call vote was taken and the 
Title was passed by a vote of 12 yeas and 9 noes . Those voting 
for the Title included: Senators Leahy, Conrad, Daschle, 
Baucus, Lincoln, Miller, Stabenow, Nelson, Wellstone, Harkin 
and Hutchinson; those voting against the Title included: 
Senators Lugar, Helms, Cochran, McConnell, Roberts, Fitzgerald, 
Thomas, Allard, Crapo and Dayton. The Commodity Title was 
adopted. The committee then took up the Miscellaneous Title of 
the new federal farm bill. Senator Wellstone offered an 
amendment on country-of-origin labeling. The amendment provides 
for country-of-origin labeling for beef, lamb, pork, fruits, 
vegetables, peanuts and farm-raised catfish and shellfish. A 
voice vote was taken on the Wellstone amendment and the 
amendment passed. Senator Lugar called for a roll call vote and 
the amendment passed by a vote of 11 ayes, 10 noes. Those 
Senators voting for the amendment included: Leahy, Conrad, 
Daschle, Baucus, Miller, Stabenow, Nelson, Dayton, Wellstone, 
Harkin and Thomas; those Senators voting against the amendment 
included: Lugar, Helms, Cochran, McConnell, Roberts, 
Fitzgerald, Allard, Hutchinson, Crapo and Lincoln. Senator 
Lincoln offered an amendment to authorize a consortium of land 
grant colleges and universities to establish a network of 
agricultural bioterrorism research facilities. The Lincoln 
amendment was passed by a voice vote. Chairman Harkin moved the 
adoption of the Miscellaneous Title. The Miscellaneous Title 
was adopted by voice vote. The Chairman moved to report the 
bill, as amended, to the Senate. The motion was agreed to by 
voice vote. Without objection, Chairman Harkin declared that 
the bill would be reported favorably and that the staff would 
be authorized to make technical and conforming changes to the 
bill. The Committee was adjourned.

                    VI. Regulatory Impact Statement

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the following evaluation is made 
concerning the regulatory impact of enacting this legislation:
    Nearly every American will be affected in some way by the 
passage of this legislation, a new farm bill for the next five 
years. Moreover, the impact of the bill is overwhelmingly a 
positive one. Not only is needed assistance provided to farmers 
and ranchers across the country, but the federal price and 
income support programs authorized in the bill are routinely 
credited with having a significant and positive effect on the 
production and availability of an abundant and affordable 
supply of food and fiber for consumers. Regardless, the 
Committee believes that the programs authorized by the bill 
are, by and large, not regulatory in nature and thus the 
Committee does not foresee significant regulatory impacts on 
groups or classes of individuals and businesses affected.
    This farm bill, like most farm bills, is a comprehensive, 
multi-year authorization for most programs under the 
jurisdiction of the United States Department of Agriculture 
(USDA). The bill reauthorizes the farm price support, income 
protection, credit, export promotion, and other programs that 
directly and indirectly benefit farmers and ranchers across the 
country. Participation in these programs is completely 
voluntary. The bill also provides for, as well as simplifies 
and improves, the nutritional safety net for many millions of 
needy Americans through the reauthorization and strengthening 
of the food stamp and other nutrition assistance programs of 
the Department. All Americans will benefit from the improvement 
in our Nation's soil and water quality through the 
reauthorization and expansion of the voluntary conservation and 
sustainable forestry programs made available to agricultural 
producers, private forest owners, and others. The bill will 
increase energy efficiency and encourage the production and use 
of renewable and biomass energy by farmers, ranchers, and rural 
small businesses. Millions of rural Americans will benefit from 
the provisions of the rural development title which is designed 
to make a significant difference in economic and community 
development. The bill creates the rural business investment 
program which could result in the creation of thousands of jobs 
across rural America. The bill reauthorizes and extends the 
agricultural research programs of USDA, which over the years 
have been highly successful in, among other things, improving 
the productivity of soils, addressing food safety concerns, and 
minimizing the harmful impacts of plant diseases and insects.
    Primarily, any regulations issued pursuant to the 
implementation of the bill will prescribe and define the 
programs authorized. Significant new regulatory burdens are not 
expected to result from these types of regulations. In 
addition, the Committee does not foresee a significant effect 
on personal privacy, nor are significant new paperwork burdens 
anticipated, particularly with respect to farmers and ranchers 
who wish to participate in the voluntary credit assistance, 
income support and conservation programs. Paperwork burdens 
will be reduced by virtue of the program simplification 
provisions included in the Nutrition title.
    The Committee notes that several provisions of the bill 
will result in regulations or burdens which might be viewed as 
regulatory in nature. First, under title I, the national 
counter-cyclical income support program for dairy producers 
will require the establishment of a national program for dairy 
farmers across the country. Analysis made available to the 
Committee indicates that the program will significantly benefit 
all but a very small number of very large dairy producers. The 
program will result in many dairy farmers being able to stay in 
production that otherwise would be forced out of business. 
Under the bill, a new national minimum price per hundredweight 
is established for raw milk used for class I (fluid) milk. The 
minimum price would take effect whenever the federally set 
class I price mover (higher of class III or IV price) falls 
below $14.25 per hundredweight. During a period of low prices, 
processors having sales of class I fluid milk would pay an 
amount per hundredweight equal to the difference between the 
$14.25 national minimum and the class I price mover. Funds 
collected would ultimately be paid to dairy producers based on 
an eligible production maximum and through the use of regional 
supply management boards. Such boards would have authority to 
manage the supply of milk through the use of bonuses or 
incentives.
    The bill also provides authority for the Secretary to 
enforce a new requirement that retailers of certain covered 
commodities including beef, lamb, pork, farm-raised fish, 
perishable agricultural commodities, and peanuts must inform 
consumers of the country of origin of the commodity. The 
requirement would not apply to such commodities prepared, sold, 
or served at a restaurant other food service establishment. The 
provision authorizes the Secretary to require that retailers 
maintain a verifiable record that will allow the Secretary to 
ensure compliance with regulations issued under the provision. 
Importantly, the bill provides considerable flexibility in the 
method of notification that may be used. The information may be 
provided by a number of means including, a label, stamp, mark, 
placard, or any other clear and visible sign on the commodity 
or on the package, display, holding unit, or bin containing the 
commodity. Many retail food stores and outlets already provide 
such information in order to meet consumer demand.
    The bill amends the Animal Welfare Act to prohibit the 
interstate or foreign movement of animals for the purpose of 
participation in an animal fighting venture. The Secretary 
would enforce this new provision as part of the enforcement 
program for other provisions of the Animal Welfare Act. The 
Committee does not have a current estimate of the number of 
people or animals now being transported across state or 
international boundaries for the purpose of fighting. However, 
the Committee is aware of the intense concern among many 
thousands of individuals who are active in animal health and 
welfare issues who believe that such activities involving 
animals should be prevented to the greatest extent possible.
    Last, the bill amends the Packers and Stockyards Act of 
1921 to address a concern with the movement of nonambulatory 
livestock. The provision would prohibit the sale or other 
movement of nonambulatory livestock that has not been humanely 
euthanized. The provision would not apply to farms that are not 
already under the jurisdiction of the Grain Inspection, Packers 
and Stockyards Administration, or in the case of animals 
receiving veterinary care. The provision will become effective 
one year after date of enactment, and requires the Secretary to 
issue regulations which will address the handling, treatment, 
and disposition of nonambulatory livestock at marketing 
facilities. The Committee believes that the provision will 
affect only a very small number of individuals who choose to 
buy, sell, or move nonambulatory livestock prior to humane 
euthanization. The great majority of all persons involved in 
livestock production, marketing, sales, purchasing, and 
processing understand and follow good animal husbandry 
practices and strongly believe in, and insist on, the humane 
treatment of all livestock and other animals.

                    VII. Budgetary Impact Statement

    In accordance with paragraph 11(a) of rule XXVI of the 
Standing Rules of the Senate, the following letter has been 
received from the Congressional Budget Office regarding the 
budgetary impact of the bill:

                                     U.S. Congress,
                               Congressional Budget Office,
                                                    Washington, DC,
                                                  December 5, 2001.
Hon. Tom Harkin,
Chairman, Committee on Agriculture, Nutrition, and Forestry,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: On November 28, 2001, the Congressional 
Budget Office provided a summary of the estimated effects of S. 
1731, the Agriculture, Conservation and Rural enhancement Act 
of 2001. The enclosed cost estimate provides more detail on 
CBO's estimates of the direct spending effects of S. 1731; 
those estimated costs are unchanged from the numbers provided 
on November 28. This estimate does not encompass the potential 
effects of S. 1731 on spending subject to appropriation.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Jim Langley 
(for federal costs), Marjorie Miller (for the state and local 
impact, and Jean Talarico (for the private-sector impact).
            Sincerely,
                                          Dan L. Crippen, Director.
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 1731--Agriculture, Conservation and Rural Enhancement Act of 2001

    Summary: S. 1731 would amend and extend the major farm 
income support, land conservation, credit assistance, food 
assistance, trade promotion, marketing assistance, and rural 
development programs administered by the U.S. Department of 
Agriculture (USDA). Enacting this legislation would increase 
direct spending for these programs by $6.3 billion in 2002, 
$38.4 billion over the 2002-2006 period, and $71.6 billion over 
the 2002-2011 period. Increased spending would continue beyond 
2011 for a total estimated cost of $73.4 billion. When combined 
with estimated spending under current law, enactment of S. 1731 
would bring total spending to $39.5 billion in 2002, $208.1 
billion over the 2002-2006 period, and $411.9 billion over the 
2002-2011 period. Because enactment of the bill would affect 
direct spending, pay-as-you-go procedures would apply.
    The bill also would authorize discretionary appropriations 
for existing and new programs for research and education, 
nutrition, trade promotion, rural development, credit 
assistance, and forestry initiatives. CBO has not completed an 
estimate of the costs of these provisions.
    S. 1731 contains intergovernmental mandates as defined in 
the Unfunded Mandates Reform Act (UMRA); those mandates include 
preemptions of state laws and extensions of intergovernmental 
mandates already in current law. The preemptions of state law 
would impose minimal, if any, costs on state governments. 
However, CBO cannot determine whether the total costs of other 
intergovernmental mandates in the bill would exceed the 
threshold established in UMRA ($56 million in 2001, adjusted 
annually for inflation) because UMRA is unclear about how the 
costs of extending an existing mandate should be estimated.
    State, local, and tribal governments would receive funds 
through some of the programs reauthorized by this bill and 
probably would receive additional funds from newly authorized 
programs. The bill would also give states additional 
flexibility in determining eligibility for federal programs, 
particularly food stamps. Any costs those governments might 
incur as a result of participating in grant programs or 
changing program options would be voluntary and would be more 
than offset by the overall funding provided by the grants.
    S. 1731 contains several private-sector mandates as defined 
by UMRA. The bill would impose mandates on handlers of fluid 
milk, importers of dairy products, retailers and suppliers of 
certain commodities, and breeders of certain live animals. The 
two most costly mandates would require some handlers of fluid 
milk to pay certain producers higher prices for milk, and 
retailers and suppliers of certain commodities to inform their 
customers of the country of origin of those commodities. CBO 
estimates that the direct costs of the mandate on milk handlers 
would amount to about $1.5 billion a year starting in fiscal 
year 2002, declining slightly in later years. CBO cannot 
estimate independently the direct cost of the mandate requiring 
country-of-origin labeling. Industry sources estimate that such 
labeling could cost as much as $1 billion annually. The 
aggregate direct costs of all the mandates in the bill would be 
well in excess of the annual threshold established by UMRA 
($113 million in 2001, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
impact of the bill on direct spending is shown in Table 1. 
Implementing S. 1731 also would affect spending subject to 
appropriation action, but CBO has not completed an estimate of 
those discretionary costs. The costs of this legislation fall 
within budget functions 270 (energy), 300 (natural resources 
and environment), 350 (agriculture), 450 (community and 
regional development), and 600 (income security).
    Basis of estimate: The bill would make several changes to 
direct spending programs. For this estimate, CBO assumes that 
S. 1731 will be enacted by the end of 2001, and thus would 
affect farm programs for 2002 crops.

                          TABLE 1.--ESTIMATED IMPACT OF S. 1731 ON DIRECT SPENDING \1\
----------------------------------------------------------------------------------------------------------------
                                                                       By fiscal year, in millions of dollars--
                                                                    --------------------------------------------
                                                                       2002     2003     2004     2005     2006
----------------------------------------------------------------------------------------------------------------
                                                 DIRECT SPENDING

Spending under current law: \2\
    Estimated budget authority.....................................   33,520   34,014   34,273   34,333   34,027
    Estimated outlays..............................................   33,219   33,991   34,347   34,161   34,014
Proposed changes:
    Estimated budget authority.....................................    7,349    9,913    6,487    9,586    7,530
    Estimated outlays..............................................    6,276    9,239    6,040    9,394    7,469
Spending under S. 1731:
    Estimated budget authority.....................................   40,869   43,927   40,760   43,919   41,557
    Estimated outlays..............................................   39,495   43,230   40,387   43,555   41,483
----------------------------------------------------------------------------------------------------------------
\1\ The bill also would increase spending subject to appropriation, but CBO has not completed an estimate of
  those costs.
\2\ The amounts shown as direct spending for 2002 are CBO's estimates of farm income support and related
  spending under current law. The 2003-2006 amounts are CBO's current-law baseline levels, which assume that
  assistance under the Federal Agricultural Improvement and Reform Act of 1996 (Public Law 104-127) is continued
  under the terms of that law when it expires at the end of 2002.

    Direct Spending: The bill would amend existing programs and 
establish new programs to be administered by USDA. Under 
current law, spending for the existing programs is governed, in 
large part, by provisions of the Federal Agricultural 
Improvement and Reform Act of 1996 (FAIR Act, Public Law 104-
127). The Congress has supplemented that spending with 
additional farm income support payments over the last four 
years. For example, Public Law 107-25, enacted in early August, 
provided $5.5 billion of additional payments to farmers, 
resulting in total direct spending for agriculture programs in 
fiscal year 2001 of about $44 billion. CBO estimates that 
spending under S. 1731 would be much higher than projected 
under a simple (baseline) extension of the FAIR Act, but that 
such spending would fall slightly below the total spending in 
2001--averaging about $41.6 billion over the 2002-2006 period.
    Relative to CBO's current-law baseline projections for 
direct spending, we estimate that enacting this legislation 
would cost $38.4 billion over the 2002-2006 period and $71.6 
billion over the 2002-2011 period. The following paragraphs 
detail those proposed changes, which are detailed in Table 2.

                                          TABLE 2.--ESTIMATED CHANGES IN DIRECT SPENDING FOR S. 1731, BY TITLE
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                      By fiscal year, in millions of dollars--
                                                           ---------------------------------------------------------------------------------------------
                                                             2002    2003     2004     2005     2006      2007      2008      2009      2010      2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
Title I--Commodity Programs:
Fixed, Decoupled Payments.................................   3,471   3,441     -248     -248    -2,079    -2,079    -2,079    -2,079    -2,079    -2,079
Counter-Cyclical Payments.................................       0       0        0    2,789     2,655     3,891     3,493     2,968     2,628     2,298
Market Assistance Loans...................................   1,251   2,656    2,508    2,415     2,437     2,264     1,929     1,540     1,208     1,103
Wool, Mohair, Honey, Lentils..............................      39      46       46       46        46        45        44        43        42        41
Milk Price Support Program................................      24      90       89       86        85        11         0         0         0         0
National Dairy Program....................................     300     300      300      300       300       300       300       300       300       300
Sugar Program.............................................      50     140       21       17        26        32        52        59        50        83
Peanut Program............................................     299     583      579      574       569       336       333       328       324       320
Commodity Purchase Program................................     130     130      150      170       200         0         0         0         0         0
Hard white wheat payments.................................       0       0       13       13        14         0         0         0         0         0
Payment Limitations.......................................      60      60       60       60        60        60        60        60        60        60
                                                           ---------------------------------------------------------------------------------------------
    Subtotal--Title I.....................................   5,624   7,446    3,518    6,222     4,313     4,860     4,132     3,219     2,533     2,126
Title II--Conservation:
Conservation Security Program.............................       0      11       46      114       216       359       516       674       820       946
Conservation Reserve Program..............................      50     158      185      246       291       294       304       316       290       283
Wetlands Reserve Program..................................     151     260      297      306       250       101        18         0         0         0
Environmental Quality Incentives..........................      92     373      599      760       861       915       954       993     1,018     1,030
Wildlife Habitat Incentives Program.......................      13      41       80      106       113       125       125       125       125       125
Farmland Protection Program...............................       7      42      118      172       203       224       240       248       250       250
Grassland Reserve Program.................................       0       1        5       13        25        38        46        46        40        36
                                                           ---------------------------------------------------------------------------------------------
    Subtotal--Title II....................................     313     886    1,330    1,717     1,959     2,056     2,203     2,402     2,543     2,670
Title III--Trade..........................................      81     130      167      191       215       243       249       249       249       249
Title IV--Nutrition.......................................      51     380      425      602       641       655       735       816       861     1,018
Title V--Credit...........................................      66       0        0        0         0         0         0         0         0         0
Title VI--Rural Development...............................      30     225      352      379       323       249       133        45         0         0
Title VII--Research and Related Items.....................       6      25       87      122       149        99        73        35        15         0
Title VIII--Forestry Initiatives..........................      50      50       51       51        52         3         5         7        11        16
Title IX--Energy..........................................      53      95      110      110       110        57        15         0         0         0
Title X--Miscellaneous Provisions.........................       2       2        0        0      -292      -302      -313      -322      -331      -341
                                                           ---------------------------------------------------------------------------------------------
    Total changes.........................................   6,276   9,239    6,040    9,394     7,469     7,920     7,232     6,451     5,881     5,738
--------------------------------------------------------------------------------------------------------------------------------------------------------

Title I: Commodity Programs

    This title would reauthorize and amend the current 
commodity support programs administered by USDA, and also would 
implement new programs. CBO estimates that enactment of title I 
would increase direct spending by $27.1 billion over the 2002-
2006 period, and by $44.0 billion over the 2002-2011 period.
    Fixed, Decoupled Payments for Covered Commodities. The bill 
would continue, at declining levels, USDA's fixed payments to 
producers of grains and cotton, and would allow producers of 
soybeans and other oilseeds to receive them. Under the bill, 
farmers would have a one-time opportunity to update their 
program acreage and yields--the historical averages used to 
determine their level of program benefits. CBO estimates that 
program costs would increase by $4.3 billion over the 2002-2006 
period because of the cost of adding soybeans and oilseeds to 
the program and allowing producers to update program acreage 
and yields. After the first several years, however, declining 
payment rates would outweigh these initial higher costs and 
result in a savings relative to the baseline of $6.1 billion 
over the 2002-2011 period.
    Counter-Cyclical Payments for Covered Commodities. The bill 
would authorize USDA to make automatic payments to producers to 
offset low prices--known as counter-cyclical payments. Payments 
under the program would begin in 2005. These payments would be 
based in part on a farm's production history. The payment rate 
would be the target price established in the bill less the 
direct payment rate (also specified in the bill) and less the 
crop price or the price-support loan rate if it is higher than 
the crop price. CBO estimates this provision would cost $5.4 
billion over the 2002-2006 period and $20.7 billion over the 
2002-2011 period.
    Marketing Assistance Loans for Covered Commodities. S. 1731 
would authorize USDA to continue crop loans and marketing loan 
programs for major row crops (grains, oilseeds, and cotton). 
Loan rates would be higher than under current law for most of 
these crops, but maximum loan rates for soybeans and other 
oilseeds would decline. CBO estimates these provisions would 
increase spending by $11.3 billion over the 2002-2006 period 
and by $19.3 billion over the 2002-2011 period. Income and 
incentives to grow oilseeds would decline under reduced loan 
rates, resulting in lower spending for oilseed loans, loan 
deficiency payments, and marketing loan gains. These lower 
costs would be offset by increased costs for similar programs 
for corn and other crops, as growers switched their planting 
preferences away from soybeans and other oilseeds.
    Marketing Assistance Loans for Wool, Mohair, Honey, and 
Lentils. S. 1731 would establish a nonrecourse marketing 
assistance loan program for producers of wool, mohair, honey, 
dry peas, lentils, and chickpeas. Marketing loan gains and loan 
deficiency payment provisions would apply to these commodities 
and would be subject to a separate $75,000 payment limitation. 
Over the 2002-2006 period CBO estimates that these new 
provisions would cost $87 million for wool and mohair, $61 
million for honey, and $75 million for dry peas, lentils, and 
chickpeas. Over 10 years, those totals would rise to $187 
million for wool and mohair, $101 million for honey, and $150 
million for dry peas, lentils, and chick peas.
    Milk Price Support Program. S. 1731 would extend the 
current milk price support program through December 31, 2006, 
at the current purchase price of $9.90 per hundredweight. Under 
the bill, the recourse loan program for dairy processors would 
be repealed. CBO estimates this provision would save $65 
million over the next five years. CBO estimates that continuing 
the dairy price support through 2006--when it expires--would 
cost $439 million over the 2002-2006 period. Under the bill, we 
estimate that the net cost of the milk price support program 
would be $374 million over the next five years, and $385 
million over the 10-year period.
    National Milk Program. Section 132 would authorize the 
Secretary of Agriculture to make counter-cyclical payments to 
dairy producers. Payments would be based on a payment rate 
equal to 25 percent of the difference between $14.25 and the 
average price of class III milk (milk used for cheese). The 
payment would be made on total monthly production of milk 
(excluding milk for fluid use). Payments would be limited to 
$300 million a year. CBO estimates that this limitation would 
be binding each year, for a total cost of $1.5 billion over 
five years and $3.0 billion over 10 years.
    Section 132 also would require USDA to amend existing 
federal regulations, known as milk marketing orders, to require 
the use of a minimum target price for class I milk (that is 
milk sold for fluid use) when calculating payments due to 
producers. For the purpose of calculating payments due to 
producers from milk handlers, this minimum target price for 
class I milk would be $14.25 per hundredweight. Handlers that 
are regulated by a milk marketing order could have to pay a 
higher price (for fluid milk) that reflects a national average 
difference between $14.25 and the prices that would otherwise 
be paid each month under current law. In other words, the 
prices received by milk producers would still vary by region, 
but each region's price would be raised by an amount calculated 
by USDA using the weighted average of milk prices across the 
regions that are regulated by federal milk marketing orders. 
(About 80 percent of fluid milk sold in the United States is 
currently regulated by such orders. California, a handful of 
other states, and portions of some other states are not 
currently subject to such federal regulation.) The transactions 
between milk handlers and producers that occur under milk 
marketing orders are part of a regulatory program and are thus 
not accounted for in the budget.
    Sugar Program. The bill would extend and amend USDA's sugar 
program by removing the marketing assessment currently paid by 
growers, lowering the interest rate charged on price-support 
loans, and adding a storage facility loan. In addition, the 
bill would require the Secretary to pay producers loan benefits 
in cases where a processor cannot provide producers with loan 
benefits because of bankruptcy or is otherwise insolvent. We 
estimate these amendments would increase program costs by about 
$600 million over the next 10 years. Moreover, the bill would 
provide new authority to pay farmers with government-owned 
stocks of sugar (payment-in-kind) for idling acreage, and the 
authority to use marketing allotments to control supply if 
sugar imports decline in the future. We estimate these new, 
additional authorities would reduce the cost of the sugar 
program relative to current law, but that net spending for the 
sugar program would increase by $254 million over the 2002-2006 
period and $530 million over the 2002-2011 period.
    Peanuts. S. 1731 would make substantial changes to USDA's 
peanut program. Under the bill, CBO estimates that the peanut 
program would cost $2.6 billion over the 2002-2006 period and 
$4.2 billion over the 2002-2011 period. Peanut marketing quotas 
and support rates for peanuts produced within the marketing 
quotas would be eliminated. Instead, peanut producers would 
become eligible for direct payments, counter-cyclical payments, 
and marketing assistance loan benefits. Under the legislation, 
a single, nonrecourse marketing assistance loan rate would 
apply to all peanut production that is lower than the current 
rate. The bill would compensate some peanut growers for the 
loss of asset value due to the elimination of marketing quotas.
    Over the next five years, CBO estimates that the new peanut 
provisions would cost $315 million for direct payments, $578 
million for counter-cyclical payments, $531 million for 
marketing assistance loans, and $1,180 million for compensation 
to peanut quota holders. Over the next 10 years, CBO estimates 
that these provisions would cost $625 million for direct 
payments, $1,277 million for counter-cyclical payments, and 
$1,163 million for marketing assistance loans, with no 
additional compensation to peanut quota holders after 2006.
    Commodity Purchases. Section 163 provides $780 million over 
the 2002-2006 period to purchase certain speciality crops. 
Purchases would be made on the open market in an effort to 
support the prices of those commodities.
    Hard White Wheat Payments. Section 164 would provide 
funding of $40 million over crop years 2003 through 2005 to 
establish an incentive payment program to encourage production 
of hard white winter wheat. CBO estimates the provision would 
increase spending by $40 million over the 2002-2006 period, 
with no additional cost after 2006.
    Payment Limits. Section 165 would establish a combined 
payment limit of $100,000 for direct and counter-cyclical 
payments. The current payment limit is $40,000 for direct 
payments. Because counter-cyclical payments would be a new 
provision no payment limitation currently applies. Based on 
information from USDA, CBO estimates that a $100,000 payment 
limit would increase payments to producers by $60 million per 
year, or $300 million over the 2002-2006 period and $600 
million over the 2002-2011 period.

Title II: Conservation Programs

    This title would reauthorize and expand land conservation 
programs administered by USDA. CBO estimates these provisions 
would cost $6.2 billion over the 2002-2006 period, and $18.1 
billion over the 2002-2011 period. (Spending would continue for 
a number of years after 2011, for a total estimated cost of 
$20.5 billion.)
    Changes to Existing Programs. The bill would increase the 
maximum acreage enrollment in the Conservation Reserve Program 
to 40 million acres from the current cap of 36.4 million acres, 
and would authorize incentive payments for enrollment of acres 
under the continuous enrollment provisions and under the 
Conservation Reserve Enhancement Program. We estimate that 
thesechanges would cost $930 million over the next five years 
and $2.4 billion over the 2002-2011 period.
    Acreage enrollment in the Wetlands Reserve Program (WRP) 
would expand by up to 250,000 acres per fiscal year under the 
bill, for a total acreage enrollment of 2.325 million acres by 
2011. We estimate that the WRP provisions would cost $1.3 
billion over the next five years and $1.4 billion over the 
2002-2011 period.
    Funding for the Environmental Quality Incentives Program 
(EQIP) would be increased by $300 million in 2002 and would 
rise to an increase of $1.05 billion by 2011. Under the bill, 
CBO estimates EQIP would cost $2.7 billion over the next five 
years and $7.6 billion over the 2002-2011 period. (Additional 
spending would occur after 2011.) Included in the EQIP total is 
$100 million per year for conservation innovation grants. The 
bill also would accelerate the timing of EQIP payments to 
increase outlays by $165 million over the 10-year period.
    In addition, the bill would increase funding for the 
Wildlife Habitat Incentives Program by an average of $98 
million a year, and for the Farmland Protection Program by an 
average of $175 million a year. CBO estimates that the total 
cost for these amendments would be $895 million over the 2002-
2006 period and $2.7 billion over the 2002-2011 period.
    New Conservation Program. S. 1731 would establish a 
conservation security program for producers to receive payments 
from the Commodity Credit Corporation for implementing certain 
conservation practices. Payments would be based on a percentage 
of the average rental rate for farmland in their county, 
depending on the level of conservation practice implemented. 
The program establishes three tiers of payments, with higher 
payments under each successive tier to compensate for higher 
requirements for conservation practices. Eligible producers 
would have to develop a conservation security contract 
describing conservation practices on their land, and have the 
contract approved by the Secretary before annual incentive 
payments were paid.
    CBO estimates that participation in such a new and 
potentially wide-ranging program would likely be slow in the 
beginning as producers obtained information about the program 
and developed their conservation plans. Hence, we expect that 
outlays under the new Farmland Protection program would be 
relatively low in the first five years, but would rise sharply 
in later years as more acres are enrolled. CBO estimates this 
program would cost $387 million over the 2002-2006 period and 
$3.7 billion over the 2002-2011 period.
    S. 1731 would also establish the Grasslands Reserve 
program. This program would authorize the Secretary of 
Agriculture to enroll up to two million acres in permanent and 
30-year easements. CBO estimates that the program would cost 
$44 million over the 2002-2006 period and $250 million over the 
2002-2011 period.

Title III: Trade Programs

    Title III would extend USDA's authority to administer 
programs to promote trade through 2006, and would increase 
funding for the Market Access Program, the Foreign Market 
Development Program, and the Food for Progress Program. The 
bill also would authorize the establishment within the Food for 
Progress Program of an International Food for Education and 
Child Nutrition Program. Title III would specify funding levels 
for most of these trade programs through 2006. CBO estimates 
that enacting title III would cost $784 million over the next 
five years and $2.0 billion over the 2002-2011 period.
    The bill would gradually increase annual funding for the 
Market Access Program from $90 million to $190 million, and 
would increase annual funding for the Foreign Market 
Development Cooperator Program from $27.5 million to $42.5 
million. The bill would cap non-commodity expenditures under 
the Food for Progress Program at $80 million a year. Those 
provisions account for most of the cost of title III.
    Title III also would authorize the establishment of the 
International Food for Education and Child Nutrition Program. 
Annual funding for the new program would be capped at the 
overall funding level provided for the Food for Progress 
Program. Finally, title III would provide annual funding for 
five years to carry out an export assistance program for 
products developed through biotechnology. We estimate this 
provision would cost $145 million over the next 10 years.

Title IV: Nutrition Programs

    Title IV would reauthorize the Food Stamp and related 
nutrition programs through fiscal year 2006. In addition, it 
would make several changes in those nutrition programs. Most of 
these changes would be effective September 1, 2002, although 
states could opt to delay implementation until October 1, 2002. 
CBO estimates that the bill would increase direct spending by 
$51 million in 2002 and by $6.2 billion over the 2002-2011 
period (see Table 3).

     TABLE 3.--ESTIMATED CHANGES IN DIRECT SPENDING FOR FOOD STAMPS AND OTHER NUTRITION PROGRAMS (TITLE IV)
----------------------------------------------------------------------------------------------------------------
                                                    By fiscal year, in millions of dollars--
                               ---------------------------------------------------------------------------------
                                  2002     2003    2004    2005    2006    2007    2008    2009    2010    2011
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Section 412, Definition of
 income:
    Estimated budget authority      \1\        3       6       6       6       7       7       7       7       8
    Estimated outlays.........      \1\        3       6       6       6       7       7       7       7       8
Section 413, Standard
 deduction:
    Estimated budget authority      \1\       55      70      85     100     110     180     250     275     420
    Estimated outlays.........      \1\       55      70      85     100     110     180     250     275     420
Section 415, Standard utility
 allowance:
    Estimated budget authority        2       50      50      55      55      60      60      60      65      65
    Estimated outlays.........        2       50      50      55      55      60      60      60      65      65
Section 417, Determination of
 deductions:
    Estimated budget authority      \2\      \2\     \2\     \2\     \2\     \2\     \2\     \2\     \2\     \2\
    Estimated outlays.........      \2\      \2\     \2\     \2\     \2\     \2\     \2\     \2\     \2\     \2\
Section 418, Definition of
 resources:
    Estimated budget authority      \1\        5      15      20      20      20      25      25      25      25
    Estimated outlays.........      \1\        5      15      20      20      20      25      25      25      25
Section 420, State option for
 reporting requirements:
    Estimated budget authority        2       25      30      35      35      35      35      35      40      40
    Estimated outlays.........        2       25      30      35      35      35      35      35      40      40
Section 421, Time limit for
 adults without dependents:
    Estimated budget authority      \1\       55      60      90      90      90      95      95     100     100
    Estimated outlays.........      \1\       55      60      90      90      90      95      95     100     100
Section 422, Access to
 electronic benefits:
    Estimated budget authority      \1\      \1\       1     \1\     \1\     \1\     \1\     \1\     \1\     \1\
    Estimated outlays.........      \1\      \1\       1     \1\     \1\     \1\     \1\     \1\     \1\     \1\
Section 423, Cost neutrality
 of electronic benefit
 systems:
    Estimated budget authority      \1\        1       1       1       1       1       1       1       1       1
    Estimated outlays.........      \1\        1       1       1       1       1       1       1       1       1
Section 426, Determination of
 continuing eligibility:
    Estimated budget authority      \1\        5       5       5       5       5       5       5       5       5
    Estimated outlays.........      \1\        5       5       5       5       5       5       5       5       5
Section 428, Transitional food
 stamps:
    Estimated budget authority        5       90     120     190     195     200     205     210     215     225
    Estimated outlays.........        5       90     120     190     195     200     205     210     215     225
Section 430, Quality control
 systems:
    Estimated budget authority      -28      -58     -59     -61     -62     -63     -65     -66     -67     -69
    Estimated outlays.........      -28      -58     -59     -61     -62     -63     -65     -66     -67     -69
Section 432, Bonus payments:
    Estimated budget authority        0       30      30      30      30      30      30      30      30      30
    Estimated outlays.........        0       30      30      30      30      30      30      30      30      30
Section 433, Employment and
 training:
    Estimated budget authority     -197     -187     -45     -42     -40     -38     -37     -35     -33     -32
    Estimated outlays.........        4        3      -1      -4      -8     -12     -16     -20     -24     -29
Section 437, Access and
 outreach pilot projects:
    Estimated budget authority        0        3     \1\     \1\     \1\     \1\       0       0       0       0
    Estimated outlays.........        0      \1\       1       1       1     \1\       0       0       0       0
Section 438, Consolidated
 block grants:
    Estimated budget authority        0        6       6       6       6       6       6       6       7       7
    Estimated outlays.........        0        5       6       6       6       6       6       6       7       7
Section 439, Community food
 projects:
    Estimated budget authority        0        3       3       3       3       0       0       0       0       0
    Estimated outlays.........        0        2       3       3       3       1       0       0       0       0
Section 440, TEFAP
 commodities:
    Estimated budget authority       10       10      10      10      10      10      10      10      10      10
    Estimated outlays.........        6       12      10      10      10      10      10      10      10      10
Section 443, Vitamin and
 mineral supplements:
    Estimated budget authority      \1\        3     \1\     \1\     \1\     \1\     \1\     \1\     \1\     \1\
    Estimated outlays.........      \1\        1       1       1     \1\     \1\     \1\     \1\     \1\     \1\
Section 452, Restoration of
 benefits to certain aliens:
    Estimated budget authority      \1\       25      65     110     135     145     150     160     165     170
    Estimated outlays.........      \1\       25      65     110     135     145     150     160     165     170
Effect in TANF program:
    Estimated budget authority        0        0       0       0       0       0       0       0       0       0
    Estimated outlays.........        0      \1\      -5       1       1       1       1       1       0       0
Section 453, Commodity
 purchases:
    Estimated budget authority       50       50       0       0       0       0       0       0       0
    Estimated outlays.........       50       50       0       0       0       0       0       0       0       0
Section 456, Senior farmers'
 market nutrition program:
    Estimated budget authority       15       15      15      15      15       0       0       0       0       0
    Estimated outlays.........       10       15      15      15      15       5       0       0       0       0
Section 457, Fruit and
 vegetable pilot program:
    Estimated budget authority        0        0       0       0       0       0       0       0       0       0
    Estimated outlays.........      \1\        5     \1\       0       0       0       0       0       0       0
Interactions:
    Estimated budget authority      \1\        1       1       3       3       4       6       7       7      10
    Estimated outlays.........      \1\        1       1       3       3       4       6       7       7      10
Total changes in direct
 spending, Title IV:..........
    Estimated budget authority     -141      190     384     561     607     622     713     800     852   1,015
    Estimated outlays.........       51      380     425     602     641     655     735     816     861   1,018
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.
\2\ CBO cannot estimate, but we expect the annual costs to be small.

Notes. Details may not sum to totals because of rounding.

TEFAP = The Emergency Food Assistance Program.
TANF = Temporary Assistance for Needy Families.

    Reauthorization of the Food Stamp Program. Section 434 
would reauthorize the Food Stamp program through fiscal year 
2006. Because it is assumed to continue in CBO's baseline after 
it expires at the end of 2002, CBO would not estimate this 
reauthorization to result in additional federal costs.
    Income Definition. Section 412 would allow a state to 
exclude from gross income in the Food Stamp program any 
educational loans or other educational assistance that the 
state is required to exclude in Medicaid. It would also allow a 
state to exclude the types of income that it excludes in 
Medicaid or Temporary Assistance for Needy Families (TANF). CBO 
estimates that this provision would increase spending by $57 
million over the next 10 years. CBO used Food Stamp Quality 
Control (QC) data to estimate the change in benefits if 
educational assistance that is counted under current law were 
to be excluded from income in determining benefits. CBO 
estimates about 5,000 households would be affected with an 
average benefit increase of $68 per month.
    CBO also added costs for excluding a small portion of 
unearned income. States have flexibility to determine what is 
excluded from the definition of income in Medicaid and TANF, so 
the rules vary by state, but most differences are minor. CBO 
assumes that 90 percent of states would exercise the option to 
exclude income as allowed under this section.
    Standard Deduction. Section 413 would set the amount of the 
standard deduction as a percentage of the net income threshold 
in each fiscal year. Under current law, all households receive 
the same standard deduction from gross income: $134 in the 48 
states and the District of Columbia. (Alaska, Hawaii, Guam, and 
the U.S. Virgin Islands have different standard deductions.) 
This bill would set the standard at 8 percent of the net income 
threshold by household size for fiscal years 2002 through 2007, 
and then incrementally increase the percentage up to 9 percent 
by 2011. Smaller households would be guaranteed the current-law 
standard deduction, and no household could receive a standard 
deduction that is higher than the applicable percentage of the 
net income threshold for a household of six people.
    Under this section, some households would receive higher 
Food Stamp benefits than under current law, because less of 
these households' income would be considered available for 
purchasing food. Most households of 5 people or more would 
receive higher benefits when the standard is set at 8 percent 
of the net income threshold. Using QC data, CBO estimates over 
700,000 households would receive an average increase in 
benefits of more than $6 per month for total costs of $55 
million in 2003. The 10-year costs would total about $1.5 
billion. These costs and the number of affected households 
would increase over time as a result of subsequent increases in 
the standard deduction and the projected growth in the eligible 
population.
    Standard Utility Allowance. Section 415 would allow states 
that choose to make the use of a standard utility allowance 
(SUA) mandatory to use the full SUA for households that share 
utility expenses with individuals not in the Food Stamp unit 
and for public housing residents with central meters who pay 
for excess utility expenses. The SUA is used along with rent or 
mortgage payments to determine the amount of the deduction from 
gross income of excess shelter expenses. Under current law, 
states can choose to make the use of the SUA mandatory for most 
households with utility expenses. States accounting for almost 
25 percent of total benefits have chosen the mandatory SUA. In 
other states, households can choose to use either the SUA or 
actual utility costs.
    CBO estimates this provision would cost $50 million in 2003 
and $522 million over the 10-year period. The costs to end 
proration of shared utility expenses would be $45 million in 
2003, which CBO estimated using QC data on households living 
with non-food stamp unit members and administrative data on the 
value of states' SUAs. This cost also includes savings from 
about half the remaining states adopting a mandatory SUA. A 
mandatory SUA would result in some savings because those 
households with actual utility costs that are higher than the 
SUA would have lower benefits when required to take the SUA. 
Finally, CBO estimates a cost of $5 million a year for using 
the full SUA for households residing in public housing and 
charged for excess utility expenses.
    Resource Definition. Section 418 would allow states to 
exclude from the definition of resources those types of 
resources they do not consider when determining eligibility for 
cash assistance under TANF or for Medicaid, although states 
would not be allowed to exclude resources that are readily 
accessible to the household, such as cash or assets in certain 
financial accounts, or licensed vehicles. Under section 1931 of 
the Social Security Act (which is the section with which states 
would be allowed to conform their Food Stamp resources rules), 
states accounting for about 17 percent of Food Stamp benefits 
have chosen to disregard all assets in determining eligibility 
for Medicaid. CBO assumed that most of these states would 
choose to exclude the types of resources this section allows 
them to exclude. Using data from the Survey of Income and 
Program Participation (SIPP), CBO estimates an additional 
10,000 households would participate once the provision is fully 
phased in by 2005 with an average monthly benefit of $150. This 
section would increase costs by $20million in 2005 and $180 
million over the 10-year period.
    Reporting Requirements. Section 420 would provide states 
with additional options for how households report changes in 
their circumstances. Under final regulations released in 
November 2000, states have the option to allow households with 
earned income to report every six months, unless the 
household's income exceeds the gross income threshold for 
eligibility. This section would allow states to implement this 
option for all households.
    CBO estimates this reporting option would result in states 
missing a net decrease of about one-half of one percent of 
total benefits. Using data from the SIPP, CBO examined changes 
in Food Stamp households' income over a six-month period to 
estimate changes that households would not be required to 
report under the new option. These changes were adjusted for 
households' reporting behavior, the number of households that 
would exceed the gross income limit and become ineligible, and 
the costs of the reporting option under current regulations. 
CBO assumes that states with 45 percent of benefits would 
eventually take this option, given other reporting options that 
are available such as quarterly reporting, for costs of $25 
million in 2003 and $312 million over the 2002-2011 period.
    A related provision--Section 417--would allow states to 
disregard certain changes in deductions from gross income 
during a household's certification period. Under current law, a 
state is required to adjust benefits in response to a 
household's report of changes in spending that affect the 
amount of deductions. CBO cannot estimate the costs of this 
option because there are not sufficient data to assess how the 
spending of Food Stamp recipients on items such as child care, 
medical care, and child support payments fluctuates over the 
course of several months. However, CBO expects that the costs 
of this provision could be several million dollars a year, but 
such costs should be significantly lower than the annual $30 
million to $40 million costs of section 420.
    Time Limit for Adults without Dependents. Section 421 would 
extend the time limit for participation by able-bodied adults 
without dependents (ABAWDs) in the Food Stamp program. Under 
current law, individuals between the ages of 18 and 50 who are 
not disabled and do not have dependents can participate in the 
program for only three months out of 36 months, unless they are 
working or participating in a suitable work activity. The bill 
would change the time limit for this group to six out of 24 
months when not engaged in work or a work activity. CBO 
estimates an additional 55,000 individuals, on average, 
eventually would participate with average monthly benefits of 
$130, for costs of $775 million over the 10-year period. This 
estimate is based on SIPP data on the work participation of 
this group prior to enactment of the time limit in Public Law 
104-193, the Personal Responsibility and Work Opportunities 
Reconciliation Act of 1996 (PRWORA). We adjusted the results 
from the SIPP data for individuals who would be eligible due to 
waivers, discretionary exemptions, or participation in 
employment and training programs under current law.
    Cost Neutrality for Electronic Benefit Transfer Systems. 
Section 423 would eliminate the requirement that a state's 
electronic benefit transfer (EBT) system be cost neutral 
relative to the costs of the state's coupon issuance system. 
Based on information from USDA on actual cost overruns and 
contract negotiations for states, CBO estimates annual costs of 
$1 million beginning in fiscal year 2003.
    Determinations of Continuing Eligibility. Section 426 would 
allow states to redetermine the eligibility of current 
participants on a case-by-case basis, instead of setting 
specific certification periods. States would be required to 
determine eligibility no less than every 12 months (or 24 
months for households in which all adult members are elderly or 
disabled), which are the same limits for current-law 
certification periods. Some households may receive benefits for 
a longer time period than under current law, if a state failed 
to conduct a review.
    Using information from the Food and Nutrition Service (FNS) 
on cases in which a state fails to act on a recertification and 
those cases in which the household is no longer eligible for 
benefits, CBO estimates that fewer than 500 households each 
month would receive benefits for an additional 4.5 months, on 
average, resulting in costs of $5 million each year.
    Transitional Food Stamps. Section 428 would allow states to 
provide up to six months of Food Stamp benefits to households 
leaving the TANF program. These benefits would be set at the 
level received in the month prior to leaving welfare, adjusted 
for the loss of cash assistance. Under final regulations 
released in November 2000, states have the option to provide 
transitional benefits to these households for up to three 
months. This section would allow states to provide transitional 
benefits for an additional three months, even if the 
transitional benefit period extends beyond the household's Food 
Stamp certification period.
    Based on the number of active cases and TANF cases closed 
in 1999, CBO estimates there will be about 1.6 million closed 
cases annually. We adjusted this number for households who 
would continue to be Food Stamp recipients under current law, 
for households who would return to TANF during the transitional 
period, and for households who would not be eligible because of 
sanctions or noncooperation with welfare rules. These 
adjustments are based on various studies of people who leave 
welfare. CBO estimates about 35,000 TANF households, on 
average, could potentially be eligible for transitional 
benefits, and that states accounting for about half these cases 
would choose this option by 2005. These households would 
receive an additional three months of benefits relative to 
current law with average benefits of about $270 per month in 
2003, for costs of $90 million in 2003 and about $1.7 billion 
over the 10-year period.
    Quality Control System and Bonus Payments. Section 430 
would revise the system under which USDA measures payment 
accuracy and section 432 would set up a new system of bonus 
payments for performance. Under current law, USDA measures the 
accuracy of benefit determinations and computes payment error 
rates for every state. States that have payment error rates 
higher than the national performance measure are subject to 
sanctions. Most states subject to sanction enter into 
agreements with USDA to reinvest these liabilities into program 
improvements. The bill would revise the QC system to sanction 
states that have error rates with a 95 percent statistical 
probability of being one percentage point greater than the 
national average for three years in a row. Based on information 
from USDA, CBO assumes that USDA would continue to work with 
states to reinvestliabilities into program improvements so 
there would be no change in collections from sanctions.
    The current system also provides enhanced administrative 
funding for states with a payment error rate below 6 percent. 
The bill would eliminate this system beginning with fiscal year 
2002 error rates, and cut the payments in half for enhanced 
payments made in 2002 for fiscal year 2001 errors. Based on 
actual enhanced funding payments for fiscal year 2000 error 
rates, CBO estimates savings of $28 million in fiscal year 2002 
and total savings of $598 million over the 10-year period.
    Section 432 would create a new system of performance 
measures and bonus payments beginning in fiscal year 2003. Five 
new performance measures would be created and payments of $6 
million for each measure would be given out to states with the 
best or most improved performance, increasing spending by $30 
million each year.
    Funding for Employment and Training Program. Under current 
law, states receive funding for employment and training 
programs that are 100 percent federally financed--$165 million 
in fiscal year 2002. States are required to spend 80 percent of 
these funds on able-bodied adults without dependents, with 
maximum per slot reimbursement rates and a maintenance of 
effort (MOE) requirement for state spending. Section 433 would 
reduce budget authority to $115 million each year and rescind 
all unobligated funds carried over from pre-2002 budget 
authority. It also would end the MOE requirement, the limits on 
slot reimbursement rates, and the requirement to spend at least 
80 percent of funds on able-bodied adults. Of the $115 million 
each year, $90 million would be allocated among all states, and 
the additional $25 million would be available to states that 
spend all of their initial allocation and pledge to serve all 
ABAWDs who would otherwise lose eligibility for the Food Stamp 
program.
    CBO examined the pattern of spending by states in the 
employment and training program. For states likely to spend 
less than their estimated allocation of the base funding amount 
($90 million), CBO assumed these states would increase spending 
of the 100 percent federal funds because of the easing of 
restrictions for spending of those funds, and shift spending 
from matched funding to full federal funding. For states likely 
to spend more than their allocation, CBO assumed these states 
would make up about half of the cut in resources by increasing 
their use of the 50 percent matched funding. These assumptions 
result in net savings of $210 million over the 10-year period.
    This section would also raise the limit on reimbursement of 
participant expenses to $50 per month from the current $25 
limit. Based on the amount spent in 2000 on these expenses, CBO 
estimates the federal share of the higher reimbursement limit 
would total about $10 million annually for costs of $103 
million over the 2002-2011 period. This leads to a net cost of 
$4 million in 2002 and net savings of $107 million over the 
2002-2011 period for section 433.
    Other Changes in the Food Stamp Program. This title would 
make several other changes in the Food Stamp program. Section 
422 would require states to keep electronic benefits accessible 
for at least six months after a household last accessed its 
account. Section 437 would provide $3 million over the 2003-
2005 period for grants to states for pilot programs on 
improving access to andoutreach for the Food Stamp program. 
Finally, section 443 would allow Food Stamp benefits to be used to 
purchase vitamin and mineral supplements and would authorize $3 million 
for an evaluation of this new use of benefits. CBO estimates the costs 
of these provisions would total $10 million over the 2002-2011 period.
    Related Nutrition Programs in the Food Stamp Act. Title IV 
would reauthorize and amend several other nutrition programs 
included in the Food Stamp Act. Section 438 would combine the 
nutrition assistance programs for Puerto Rico and American 
Samoa into one block grant that would be adjusted each year by 
the change in the Thrifty Food Plan. Under current law, the 
nutrition assistance program for American Samoa is authorized 
at $5.3 million each year through 2002. Section 439 would 
reauthorize assistance for community food projects at $2.5 
million each year through 2006. Section 440 would authorize 
$110 million each year for the purchase of commodities for the 
Emergency Food Assistance program, with $10 million set aside 
for the costs associated with distributing such commodities. 
Under current law, $100 million is authorized each year through 
2006. These sections would increase spending by $6 million in 
2002 and by a total of $163 million over the 10-year period.
    Restoration of Eligibility for Certain Legal Aliens. 
Section 452 would restore Food Stamp eligibility for certain 
categories of qualified aliens. PRWORA made most aliens 
ineligible for food stamps until naturalization, except for 
refugees or asylees during their first five years in the United 
States, aliens who have 40 quarters of employment covered by 
Social Security, or aliens who are veterans or active duty 
military personnel. Public Law 105-185, the Agricultural 
Research, Extension, and Education Reform Act of 1998, restored 
eligibility to refugees and asylees in their first seven years 
in the country, and children, elderly, or disabled aliens who 
resided in the United States as of August 22, 1996.
    The bill would restore eligibility to all qualified alien 
children under 18, change the work requirement from 40 quarters 
to 16 quarters of covered employment, lift the time restriction 
for refugees and asylees, and restore eligibility to all 
qualified disabled aliens. This section would be effective 
September 1, 2002, (or at state option October 1, 2002), except 
the provision to restore eligibility to children would be 
effective beginning in fiscal year 2004. Based on fiscal year 
1996 QC data, adjusted for current Food Stamp rules, CBO 
estimates that this section, when fully phased in, would 
increase participation by 150,000 participants in fiscal year 
2006 and cost $25 million in 2003 and $1.1 billion over the 
2002-2011 period.
    Minimum Commodity Assistance in the School Lunch Program. 
USDA provides both cash reimbursement and commodity assistance 
for each meal served under the National School Lunch program, 
and a minimum of 12 percent of the total assistance must be in 
the form of commodities. Section 453 would reverse a 
requirement that the value of bonus commodities (those 
purchased by USDA to remove surpluses or support prices, and 
then donated to the school lunch program) be included in 
calculating this minimum value for fiscal years 2002 and 2003. 
CBO expects that $50 million of bonus commodities would be 
provided and would be counted toward the requirement each year 
under current law. Therefore, the Secretary of Agriculture 
would have to purchase an additional $50 million to meet the 
requirement each year, for total costs of $100 million over the 
two-year period.
    Other Nutrition Programs. Section 456 would establish a 
senior farmers' market nutrition program, funded at $15 million 
each year over the 2002-2006 period. This program would 
continue a pilot program established in 2001 to provide access 
to local produce for low-income seniors. This section would 
increase spending by $10 million in 2002 and by $75 million 
over the 10-year period.
    Section 457 would require the Secretary to use funds 
available under section 32 (funds for strengthening markets, 
income, and supply) to operate a pilot program to provide free 
fresh fruits and vegetables in schools in four states and on 
one Indian reservation for the 2003 school year. Using 
information from FNS and the Bureau of Labor Statistics on the 
prices of fruits and vegetables that are likely to appeal to 
children and on average school enrollment from the National 
Center for Education Statistics, CBO estimates this program 
would increase spending by $5 million.

Title V: Credit Programs

    Under current law, USDA may provide certain loan-servicing 
benefits to delinquent farm credit borrowers, including 
deferral and writeoff of scheduled payments. Borrowers whose 
debt is reduced under these servicing procedures are subject to 
shared appreciation agreements that require a portion of the 
reduced debt be repaid to USDA from appreciation in the value 
of the property over a 10-year period. Under procedures 
established by the Federal Credit Reform Act of 1990, the 
subsidy cost of a direct loan is the estimated long-term cost 
to the government, calculated on a net present value basis. If 
legislation modifies the cost of outstanding loans, the change 
in subsidy cost is recorded the year the legislation is 
enacted. Section 531 would allow the borrower to agree to a 
conservation easement on the property in lieu of repayment 
obligations under the shared appreciation agreement. CBO 
estimates that implementing the new program would reduce 
receipts under the shared appreciation agreements. CBO 
estimates the cost of the provision--the present value of 
reduced receipts--would total $66 million, which would be 
recorded as a loan modification in fiscal year 2002.

Title VI: Rural Development Programs

    CBO estimates that enacting title VI of S. 1731 would 
result in direct spending of $1.7 billion over the 2002-2011 
period, with most of that spending to occur over the next five 
years. Section 602 would establish the Rural Business 
Investment Program (RBIP) to provide federal loan guarantees on 
debentures to qualified venture capital corporations that 
invest in small enterprises in rural communities. The bill 
would authorize USDA to issue up to $350 million of loan 
guarantees. Based on the experience of similar loan guarantee 
programs administered by the Small Business Administration, CBO 
estimates that the subsidy cost to guarantee $350 million in 
loans under the RBIP program would be about $70 million over 
the 2002-2006 period.
    Section 602 also would provide $50 million for grants to 
Rural Business Investment Companies to provide assistance to 
small enterprises financed by these entities. CBO estimates the 
cost of the grants would be $50 million over the 2002-2006 
period.
    Section 603 would provide funding for all pending 
applications for rural water treatment grant and loan programs 
under the Rural Community Advancement Program that cannot be 
funded through the fiscal year 2002 appropriations for such 
programs. Based on information from USDA, CBO estimates that 
this provision would cost $454 million over the 2002-2007 
period.
    In addition, title VI would provide funding for several 
rural development initiatives, including $377 million for 
value-added agricultural product market development grants, 
$500 million for grants to enhance broadband access in rural 
areas, $130 million for grants to rural firefighters and 
emergency personnel for training, $50 million for assistance to 
rural entrepreneurs and micro enterprises, and $113 million for 
the Rural Endowment Program established under this title.

Title VII: Research and Related Items

    This title would increase research spending for the 
Initiative for Future Agriculture and Food Systems by $284 
million over the 2002-2006 period and $460 million over the 
2002-2011 period. This initiative would award funding to 
research projects that address critical emerging issues related 
to future food production, environmental protection, farm 
income, or alternative uses of agricultural products.
    S. 1731 also would establish two new research programs. The 
bill would provide both the Beginning Farmer and Rancher 
Development Program and the Rural Policy Research Program with 
$15 million a year for five years. CBO estimates these two new 
research programs would cost $106 million over the 2002-2006 
period and $150 million over the 2002-2011 period. Finally, 
section 723 would authorize the Secretary to use any proceeds 
from the sale of federal research facilities and equipment for 
infrastructure security. Since such proceeds would, in general, 
be deposited in the Treasury, this new authority for the 
Secretary to use these funds would increase direct spending. 
Based on information from USDA, however, CBO estimates that 
additional spending under this provision would be less than 
$500,000 a year.

Title VIII: Forestry Initiatives

    This title would provide $48 million a year over the 2002-
2006 period for a new program to provide assistance to owners 
of private nonindustrial forest lands. Based on information 
from USDA, we estimate that the proposed program would cost 
$240 million over the 2002-2011 period. Title VIII also would 
establish a new competitive grant program to support forestry 
practices of nonprofit organizations. The bill would provide $2 
million a year for that program, for a cost of $10 million over 
the 2002-2006 period.
    This title also would allow USDA and the Department of the 
Interior to use long-term stewardship contracts to implement 
projects to remove hazardous fuels (overly dense forest 
vegetation) from certain federal lands. Under such contracts, 
the agencies could retain and spend any receipts generated from 
such contracts to implement additional projects. Based on 
information from the Forest Service, we estimate that the net 
increase in direct spending from this provision would total $46 
million over the 2002-2011 period. That estimate assumes that, 
in some cases, the agency would use stewardship contracts to 
implement projects that otherwise would have been completed 
using the agency's existing authorities.

Title IX: Energy Programs

    This title would provide funding for several renewable 
energy programs. Specifically, the title would provide $165 
million over the next 10 years for loans and grants to 
encourage small businesses and farmers to develop and use 
renewable energy. In addition, it would provide $25 million to 
study hydrogen and fuel cell technology and $75 million for 
research and development into the use of biomass products for 
fuel. It would provide an additional $45 million for rural 
electrification loans. Overall, CBO estimates that enacting 
title IX would cost $478 million over the 2002-2006 period, and 
$550 million over the 2002-2011 period.

Title X: Miscellaneous Provisions

    Currently, crop insurance coverage is available in 5 
percent increments (50, 55, 60, 65, 70, 75, 80, and 85 percent 
of expected yields). Beginning in 2006, producers will be able 
to select coverage levels in 1 percent increments. The 
availability of coverage in 1 percent increments, known as 
continuous coverage, will increase the cost of the crop 
insurance program because in some cases a slight reduction in 
the coverage level can result in a substantial increase in the 
subsidy rate. For example, reducing the coverage level from 85 
to 84 percent of expected yields would allow producers to 
increase the subsidy rate from 38 to 48 percent of total 
premium. Section 1011 would prohibit implementing continuous 
coverage until after 2011. CBO estimates this provision would 
save $292 million in 2006 and $1.9 billion over the 2002-2011 
period. Finally, section 1030 would provide $4 million in 2002 
for the National Organic Certification Cost-Share Program.

Spending Subject to Appropriation

    The bill also would authorize discretionary appropriations 
for existing and new programs for research and education, 
nutrition, trade promotion, rural development, credit 
assistance, and forestry initiatives. CBO has not completed an 
estimate of the cost of these provisions.
    Pay-as-you-go Considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in Table 4. For the purposes of enforcing pay-as-you-
go procedures, only the effects in the budget year and the 
succeeding four years are counted.

                     TABLE 4.--ESTIMATED EFFECTS OF S. 1731 ON DIRECT SPENDING AND RECEIPTS
----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2002    2003    2004    2005    2006    2007    2008    2009    2010    2011
----------------------------------------------------------------------------------------------------------------
Changes in outlays..............   6,276   9,239   6,040   9,394   7,469   7,920   7,232   6,451   5,881   5,738
Changes in receipts.............                                  Not applicable
----------------------------------------------------------------------------------------------------------------

    Estimated Impact on State, Local, and Tribal Governments: 
S. 1731 contains intergovernmental mandates as defined in the 
Unfunded Mandates Reform Act; those mandates include 
preemptions of state laws and extensions of intergovernmental 
mandates already in current law. The preemptions of state law 
would impose minimal, if any, costs on state governments. 
However, CBO cannot determine whether the total costs of other 
intergovernmental mandates in the bill would exceed the 
threshold established in UMRA ($56 million in 2001, adjusted 
annually for inflation) because UMRA is unclear about how the 
costs of extending an existing mandate should be estimated.

Intergovernmental Mandates

    The Rural Development title of S. 1731 contains a number of 
preemptions of state law. These preemptions would be 
intergovernmental mandates as defined in UMRA because they 
would prevent the exercise of state or local authority. 
Specifically, the bill would preempt any state limitations on 
interest rates with regard to the newly established National 
Rural Cooperative and Business Equity Fund. It also would 
preempt any state or local limitations on federal ownership of 
debentures issued as part of the Rural Business Investment 
Program, and it would preempt any state laws limiting the 
investment of banks, associations and other institutions in a 
Rural Business Investment Company. Although each of these 
preemptions would limit the application of state or local laws, 
CBO estimates that they would not affect the budgets of state, 
local, or tribal governments because they would impose no 
duties on states that would result in additional spending.
    The bill would require that reductions in federal 
reimbursements for administrative costs in the Food Stamp 
program continue beyond the scheduled expiration date in 
current law (2002) through 2006. In 1997, the Congress enacted 
a cap on administrative costs that could be charged to the Food 
Stamp program (Public Law 105-185). CBO identified that cap as 
an intergovernmental mandate because it would reduce federal 
reimbursement for food stamp administrative costs and because 
states have only limited authority to make programmatic or 
financial changes to offset those costs. At that time, CBO 
estimated annual costs of between $190 million and $280 
million, but the costs have decreased to the lower end of that 
range.
    By extending the reductions in federal reimbursements to 
states through 2006, the bill would extend an intergovernmental 
mandate. UMRA is unclear, however, about how to measure costs 
associated with extending an existing mandate that has not yet 
expired. On the one hand, if the reductions were allowed to 
expire, states might adjust their cost allocation procedures 
and claim larger amounts of federal reimbursement through the 
Food Stamp program. On the other hand, states have already 
altered their budgets to accommodate the initial reduction in 
federal reimbursements, and it is not clear that any state has 
made budget plans for future budget years that assume such 
reductions would end. UMRA is unclear about whether the mandate 
costs should be measured based on current levels of spending or 
on spending in the absence of the intergovernmental mandate (or 
reductions). Consequently, CBO cannot determine whether the 
costs to state governments would exceed the threshold 
established in UMRA.

Other Impacts

    Under current law, states receive an enhanced federal match 
for administrative funding if they have payment error rates 
below 6 percent in the Food Stamp program. This bill would cut 
in half the formula for determining the amount of the increase 
and then eliminate the system of enhanced funding. 
Consequently, states that otherwise would have received the 
enhanced match would receive lesser amounts. CBO estimates that 
those losses would total between $58 million and $69 million 
annually over the 2003-2011 period. The bill also would create 
a new system of performance measures and bonuses in the Food 
Stamp program; CBO estimates that those bonus payments to 
states would total $30 million annually.
    State, local, and tribal governments receive funds through 
some of the other programs reauthorized by this bill and 
probably would receive additional funds from newly authorized 
programs. Some of these programs--both new and existing--
include matching requirements and other conditions of 
assistance. Any costs these governments might incur to comply 
with conditions of this assistance would be voluntary. Such 
costs, however, would be more than offset by the grant funds 
those governments receive.
    Estimated Impact on the Private Sector: S. 1731 contains 
several private-sector mandates as defined by UMRA. CBO 
estimates that the aggregate direct costs of those mandates 
would be well in excess of the annual threshold established by 
UMRA ($113 million in 2001, adjusted annually for inflation) in 
each of the first five years the mandates are in effect.
    The bill would impose mandates on certain handlers of fluid 
milk, importers of dairy products, retailers and suppliers of 
certain commodities, and breeders of certain live animals. 
Handlers of fluid milk that are subject to milk marketing 
orders could be required to pay higher prices, based on the 
bill's minimum target price of $14.25 per hundredweight. 
Importers of dairy products would have to pay a new assessment 
fee. Suppliers of certain commodities would have to inform 
retailersof the country of origin of those commodities and 
retailers would be required to inform consumers of that same 
information. Breeders would be prohibited from exporting live animals 
with the intent to fight, or engaging in interstate transport of live 
birds with the intent to fight.

Dairy Sector Requirements

    Section 132 would set new minimum prices, by region, that 
handlers of class I milk (that is, milk sold for fluid use) 
would be required to pay to producers under the federal milk 
marketing order regulations. Federal milk marketing orders, 
administered by the Agricultural Marketing Service of the U.S. 
Department of Agriculture, set minimum prices for milk 
purchased from producers within areas governed by the orders. 
Federal marketing orders regulate pricing in major milk 
production areas in the United States, except for California, a 
handful of other states, and portions of some other states. 
California operates under state marketing order regulations, 
which would be unaffected by this change in the law.
    CBO estimates that the new minimum class I prices would 
cause handlers to pay more for milk than they would pay under 
current law, with the aggregate increase in their costs 
totaling about $1.5 billion in each of 2002 and 2003, $1.4 
billion in 2004 and 2005, and $1.3 billion in 2006. Most or all 
of those increased costs faced by milk handlers would be passed 
on to consumers of milk and milk products through higher retail 
prices.
    Section 136 would impose a mandate on importers of dairy 
products by expanding a dairy promotion assessment to cover 
imports of dairy products. Under current law, USDA collects an 
assessment from domestic dairy producers to fund activities of 
the National Dairy Promotion and Research Board. The bill would 
require the assessment rate on imported dairy products to be 
determined in the same manner as the assessment rate per 
hundredweight or the equivalent of domestic milk. The funds 
collected from importers of dairy products would be combined 
with collections from domestic producers. Using an assessment 
rate equivalent to the current rate paid by domestic producers 
of dairy products, CBO estimates the cost of the assessment on 
importers would total about $11 million annually.
    In addition, section 135 would amend the Agriculture 
Marketing Act to allow the Secretary of Agriculture to expand 
the reporting requirement now placed on manufacturers and 
persons who store dairy products. That is, the bill would give 
the Secretary the authority to expand the list of products for 
which producers must report on inventories and make records 
available to the government. The provisions would impose a new 
mandate if the Secretary used the authority to make additional 
products subject to current requirements. USDA could not 
indicate which products, if any, would be added to the list. 
Nonetheless, since producers already keep extensive records on 
inventories at storage facilities, the incremental cost of 
complying with such requirements would be small.

Country-of-Origin Labeling Requirements

    Section 1001 would require retailers to inform consumers, 
at the final point of sale, of the country of origin of beef, 
lamb, pork, farm-raised fish, fresh fruits and vegetables, and 
peanuts. Suppliers of those commodities would be required to 
provide the same information to retailers. The major costs 
associated with the new country-of-origin labeling requirements 
are related to the cost to segregate and preserve commodity 
identity, to label the commodity, and to maintain records.
    The incremental cost of this mandate is uncertain. Although 
rare, some grocers, meat packers, and farmers voluntarily use 
labels to identify U.S. products. Also, data to estimate 
compliance costs are not available for some commodities. 
Moreover, compliance costs depend on the specific standards to 
be established by the Secretary. According to information from 
representatives of the industry, the costs to retailers and 
suppliers to provide country-of-origin information on some of 
the commodities covered in this bill could be as high as $1 
billion annually.

Ban on Commerce in Live Animals with the Intent to Fight

    Under current law, any person is prohibited from 
transporting or delivering a dog or other animal--with the 
exception of live birds--between states to participate in an 
animal fighting venture. Section 1025 would amend the Animal 
Welfare Act to remove that exception and to ban the interstate 
movement of live birds for the purpose of fighting. The bill 
would not prohibit breeders from transporting animals for 
reasons other than to fight. In addition, section 1024 would 
prohibit the export of live animals with the intent to fight. 
CBO cannot estimate the direct cost because sufficient 
information about the export of such live animals is not 
available.
    Previous CBO Estimates: On November 28, 2001, CBO 
transmitted a summary of the estimated effects of S. 1731. The 
numbers included in this more-detailed cost estimate are 
unchanged from those provided on November 28.
    On August 23, 2001, CBO transmitted a cost estimate for 
H.R. 2646, the Farm Security Act of 2001, as reported by the 
House Committee on Agriculture on August 2, 2001. That bill 
would have a similar impact on total direct spending for 
agricultural programs over the 2002-2011 period: an increase of 
$69.5 billion (as compared to $71.6 billion over the same 
period for S. 1731). The bills differ significantly, however, 
in the composition of such spending. In addition, S. 1731 would 
increase direct spending more than H.R. 2646 in 2002 ($6.3 
billion verses $1.9 billion) and over the 2002-2006 period 
($38.4 billion verses $33.4 billion).
    H.R. 2646 would impose private-sector mandates by charging 
new assessments on importers of dairy products and U.S. 
producers of caneberries. The House bill also would allow the 
Secretary of Agriculture to expand the reporting requirement 
now placed on manufacturers and persons who store dairy 
products. While most of the mandates in H.R. 2646 are also 
contained in S. 1731, the House bill did not include a minimum 
price restriction on handlers of fluid milk, a country-of-
origin labeling requirement on retailers and suppliers, or a 
prohibition on the interstate transport or exportation of live 
animals with the intent to fight. CBO found that the aggregate 
cost of mandates in H.R. 2646 would fall below the annual 
threshold for private-sector mandates established in UMRA.
    Estimate Prepared by: Federal costs: Jim Langley, Greg 
Hitz, Dave Hull, Lanette Walker, Megan Carroll, Lisa Cash 
Driskill, and Mark Hadley; Joseph Whitehill (226-2840); and 
Valerie Baxter Womer (226-2820). Impact on State, Local, and 
Tribal Governments: Marjorie Miller and Leo Lex. Impact on the 
Private Sector: Roger Hitchner, Jean Talarico, Cecil McPherson; 
and Ralph Smith.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                     VIII. Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made in 
the bill, as reported are shown as follows: existing law 
proposed to be omitted is enclosed in black brackets and new 
material is printed in italic.

                                TITLE 1

           *       *       *       *       *       *       *


                  AGRICULTURAL MARKET TRANSITION ACT

           *       *       *       *       *       *       *


[SEC. 102. DEFINITIONS.

    [In this title:
          [(1) Agricultural act of 1949.--Except in section 
        171, the term ``Agricultural Act of 1949'' means the 
        Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), as in 
        effect prior to the suspensions under section 
        171(b)(1).
          [(2) Considered planted.--The term ``considered 
        planted'' means acreage that is considered planted 
        under title V of the Agricultural Act of 1949 (7 U.S.C. 
        1461 et seq.) and such other acreage as the Secretary 
        considers fair and equitable.
          [(3) Contract.--The terms ``contract'' and 
        ``production flexibility contract'' mean a production 
        flexibility contract entered into under section 111.
          [(4) Contract acreage.--The term ``contract acreage'' 
        means 1 or more crop acreage bases established for 
        contract commodities under title V of the Agricultural 
        Act of 1949 (7 U.S.C. 1461 et seq.) that would have 
        been in effect for the 1996 crop (but for suspension 
        under section 171(b)(1)).
          [(5) Contract commodity.--The term ``contract 
        commodity'' means wheat, corn, grain sorghum, barley, 
        oats, upland cotton, and rice.
          [(6) Contract payment.--The term ``contract payment'' 
        means a payment made under this subtitle pursuant to a 
        contract.
          [(7) Department.--The term ``Department'' means the 
        Department of Agriculture.
          [(8) Extra long staple cotton.--The term ``extra long 
        staple cotton'' means cotton that--
                  [(A) is produced from pure strain varieties 
                of the Barbadense species or any hybrid 
                thereof, or other similar types of extra long 
                staple cotton, designated by the Secretary, 
                having characteristics needed for various end 
                uses for which United States upland cotton is 
                not suitable and grown in irrigated cotton-
                growing regions of the United States designated 
                by the Secretary or other areas designated by 
                the Secretary as suitable for the production of 
                the varieties or types; and
                  [(B) is ginned on a roller-type gin or, if 
                authorized by the Secretary, ginned on another 
                type gin for experimental purposes.
          [(9) Farm program payment yield.--The term ``farm 
        program payment yield'' means the farm program payment 
        yield established for the 1995 crop of a contract 
        commodity under section 505 of the Agricultural Act of 
        1949 (7 U.S.C. 1465). The Secretary shall adjust the 
        farm program payment yield for the 1995 crop of a 
        contract commodity to account for any additional yield 
        payments made with respect to that crop under 
        subsection (b)(2) of the section.
          [(10) Loan commodity.--The term ``loan commodity'' 
        means each contract commodity, extra long staple 
        cotton, and oilseed.
          [(11) Oilseed.--The term ``oilseed'' means a crop of 
        soybeans, sunflower seed, rapeseed, canola, safflower, 
        flaxseed, mustard seed, or, if designated by the 
        Secretary, other oilseeds.
          [(12) Producer.--The term ``producer'' means an 
        owner, operator, landlord, tenant, or sharecropper who 
        shares in the risk of producing a crop and who is 
        entitled to share in the crop available for marketing 
        from the farm, or would have shared had the crop been 
        produced. 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.
          [(13) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
          [(14) State.--The term ``State'' means each of the 
        several States of the United States, the District of 
        Columbia, the Commonwealth of Puerto Rico, and any 
        other territory or possession of the United States.
          [(15) United States.--The term ``United States'', 
        when used in a geographical sense, means all of the 
        States.]

SEC. 102. DEFINITIONS.

    In this title:
          (1) Agricultural act of 1949.--Except in section 171, 
        the term ``Agricultural Act of 1949'' means the 
        Agricultural Act of 1949 (7 U.S.C. 1421 et seq.), as in 
        effect prior to the suspensions under section 
        171(b)(1).
          (2) Considered planted.--The term ``considered 
        planted'' means any acreage on the farm that--
                  (A) producers on a farm were prevented from 
                planting to a crop because of drought, flood, 
                or other natural disaster, or other condition 
                beyond the control of the eligible owners and 
                producers on the farm, as determined by the 
                Secretary; and
                  (B) was not planted to another contract 
                commodity (other than a contract commodity 
                produced under an established practice of 
                double cropping).
          (3) Contract.--The term ``contract'' means a contract 
        entered into under subtitle B.
          (4) Contract acreage.--The term ``contract acreage'' 
        means the contract acreage determined under section 
        111(f).
          (5) Contract commodity.--The term ``contract 
        commodity'' means wheat, corn, grain sorghum, barley, 
        oats, upland cotton, rice, and oilseeds.
          (6) Contract payment.--The term ``contract payment'' 
        means a payment made under subtitle B pursuant to a 
        contract.
          (7) Department.--The term ``Department'' means the 
        Department of Agriculture.
          (8) Extra long staple cotton.--The term `extra long 
        staple cotton' means cotton that--
                  (A) is produced from pure strain varieties of 
                the Barbadense species or any hybrid thereof, 
                or other similar types of extra long staple 
                cotton, designated by the Secretary, having 
                characteristics needed for various end uses for 
                which United States upland cotton is not 
                suitable and grown in irrigated cotton-growing 
                regions of the United States designated by the 
                Secretary or other areas designated by the 
                Secretary as suitable for the production of the 
                varieties or types; and
                  (B) is ginned on a roller-type gin or, if 
                authorized by the Secretary, ginned on another 
                type gin for experimental purposes.
          (9) Loan commodity.--The term ``loan commodity'' 
        means wheat, corn, grain sorghum, barley, oats, upland 
        cotton, extra long staple cotton, rice, oilseeds, wool, 
        mohair, honey, dry peas, lentils, and chickpeas.
          (10) Oilseed.--The term ``oilseed'' means a crop of 
        soybeans, sunflower seed, rapeseed, canola, safflower, 
        flaxseed, mustard seed, and, if designated by the 
        Secretary, other oilseeds.
          (11) Payment yield.--The term ``payment yield'' means 
        a payment yield determined under section 111(g).
          (12) Producer.--
                  (A) In general.--The term ``producer'' means 
                an owner, operator, landlord, tenant, or 
                sharecropper that--
                          (i) shares in the risk of producing a 
                        crop; and
                          (ii) is entitled to share in the crop 
                        available for marketing from the farm, 
                        or would have shared had the crop been 
                        produced.
                (B) Hybrid seed.--In determining whether a 
                grower of hybrid seed is a producer, the 
                Secretary shall not take into consideration the 
                existence of a hybrid seed contract.
          (13) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
          (14) State.--The term ``State'' means--
                  (A) a State;
                  (B) the District of Columbia;
                  (C) the Commonwealth of Puerto Rico; and
                  (D) any other territory or possession of the 
                United States.
          (15) United states.--The term `United States', when 
        used in a geographical sense, means all of the States.

              Subtitle B--Production Flexibility Contracts

[AUTHORIZATION FOR USE OF PRODUCTION FLEXIBILITY CONTRACTS.

    [(a) Offer and Terms.--The Secretary shall offer to enter 
into a production flexibility contract with an eligible owner 
or producer described in subsection (b) on a farm containing 
eligible cropland. Under the terms of a contract, the owner or 
producer shall agree, in exchange for annual contract payments, 
to--
          [(1) comply with applicable conservation requirements 
        under subtitle B of title XII of the Food Security Act 
        of 1985 (16 U.S.C. 3811 et seq.);
          [(2) comply with applicable wetland protection 
        requirements under subtitle C of title XII of the Act 
        (16 U.S.C. 3821 et seq.);
          [(3) comply with the planting flexibility 
        requirements of section 118; and
          [(4) use the land subject to the contract for an 
        agricultural or related activity, but not for a 
        nonagricultural commercial or industrial use, as 
        determined by the Secretary.
    [(b) Eligible Owners and Producers Described.--The 
following producers and owners shall be eligible to enter into 
a contract:
          [(1) An owner of eligible cropland who assumes all or 
        a part of the risk of producing a crop.
          [(2) A producer (other than an owner) on eligible 
        cropland with a share-rent lease of the eligible 
        cropland, regardless of the length of the lease, if the 
        owner enters into the same contract.
          [(3) A producer (other than an owner) on eligible 
        cropland who cash rents the eligible cropland under a 
        lease expiring on or after September 30, 2002, in which 
        case the owner is not required to enter into the 
        contract.
          [(4) A producer (other than an owner) on eligible 
        cropland who cash rents the eligible cropland under a 
        lease expiring before September 30, 2002. The owner of 
        the eligible cropland may also enter into the same 
        contract. If the producer elects to enroll less than 
        100 percent of the eligible cropland in the contract, 
        the consent of the owner is required.
          [(5) An owner of eligible cropland who cash rents the 
        eligible cropland and the lease term expires before 
        September 30, 2002, if the tenant declines to enter 
        into a contract. In the case of an owner covered by 
        this paragraph, contract payments shall not begin under 
        a contract until the lease held by the tenant ends.
          [(6) An owner or producer described in any preceding 
        paragraph regardless of whether the owner or producer 
        purchased catastrophic risk protection for a 1996 crop 
        under section 508(b) of the Federal Crop Insurance Act 
        (7 U.S.C. 1508(b)).
    [(c) Tenants and Sharecroppers.--In carrying out this 
subtitle, the Secretary shall provide adequate safeguards to 
protect the interests of tenants and sharecroppers.
    [(d) Eligible Cropland Described.--Land shall be considered 
to be cropland eligible for coverage under a contract only if 
the land has contract acreage attributable to the land and--
          [(1) for at least 1 of the 1991 through 1995 crops, 
        at least a portion of the land was enrolled in the 
        acreage reduction program authorized for a crop of a 
        contract commodity under section 101B, 103B, 105B, or 
        107B of the Agricultural Act of 1949 or was considered 
        planted;
          [(2) was subject to a conservation reserve contract 
        under section 1231 of the Food Security Act of 1985 (16 
        U.S.C. 3831) whose term expired, or was voluntarily 
        terminated, on or after January 1, 1995; or
          [(3) is released from coverage under a conservation 
        reserve contract by the Secretary during the period 
        beginning on January 1, 1995, and ending on the date 
        specified in section 112(a)(2).
    [(e) Quantity of Eligible Cropland Covered by Contract.--
Subject to subsection (b)(4), an owner or producer may enroll 
as contract acreage all or a portion of the eligible cropland 
on the farm.
    [(f) Voluntary Reduction in Contract Acreage.--Subject to 
subsection (b)(4), an owner or producer who enters into a 
contract may subsequently reduce the quantity of contract 
acreage covered by the contract.

[SEC. 112. ELEMENTS OF CONTRACTS.

    [(a) Time for Contracting.--
          [(1) Commencement.--To the extent practicable, the 
        Secretary shall commence entering into contracts not 
        later than 45 days after the date of enactment of this 
        title.
          [(2) Deadline.--Except as provided in paragraph (3), 
        the Secretary may not enter into a contract after 
        August 1, 1996.
          [(3) Conservation reserve lands.--
                  [(A) In general.--At the beginning of each 
                fiscal year, the Secretary shall allow an 
                eligible owner or producer on a farm covered by 
                a conservation reserve contract entered into 
                under section 1231 of the Food Security Act of 
                1985 (16 U.S.C. 3831) that terminates after the 
                date specified in paragraph (2) to enter into 
                or expand a production flexibility contract to 
                cover the contract acreage of the farm that was 
                subject to the former conservation reserve 
                contract.
                  [(B) Amount.--Contract payments made for 
                contract acreage under this paragraph shall be 
                made at the rate and amount applicable to the 
                annual contract payment level for the 
                applicable crop. For the fiscal year in which 
                the conservation reserve contract is 
                terminated, the owner or producer subject to 
                the production flexibility contract may elect 
                to receive either contract payments or a 
                prorated payment under the conservation reserve 
                contract, but not both.
    [(b) Duration of Contract.--
          [(1) Beginning date.--The term of a contract shall 
        begin with--
                  [(A) the 1996 crop of a contract commodity; 
                or
                  [(B) in the case of acreage that was subject 
                to a conservation reserve contract described in 
                subsection (a)(3), the date the production 
                flexibility contract was entered into or 
                expanded to cover the acreage.
          [(2) Ending date.--The term of a contract shall 
        extend through the 2002 crop, unless earlier terminated 
        by the owner or producer.
    [(c) Estimation of Contract Payments.--At the time the 
Secretary enters into a contract, the Secretary shall provide 
an estimate of the minimum contract payments anticipated to be 
made during at least the first fiscal year for which contract 
payments will be made.
    [(d) Time for Payment.--
          [(1) In general.--An annual contract payment shall be 
        made not later than September 30 of each of fiscal 
        years 1996 through 2002.
                  [(A) Fiscal year 1996.--At the option of the 
                owner or producer, 50 percent of the contract 
                payment for fiscal year 1996 shall be made not 
                later than 30 days after the date on which the 
                contract is entered into and approved by the 
                Secretary and the owner or producer.
                  [(B) Subsequent fiscal years.--At the option 
                of the owner or producer for fiscal year 1997 
                and each subsequent fiscal year, 50 percent of 
                the annual contract payment shall be made on 
                December 15 or January 15 of the fiscal year. 
                The owner or producer may change the date 
                selected under this subparagraph for a 
                subsequent fiscal year by providing advance 
                notice to the Secretary.
          [(2) Advance payments.--
          [(3) Special rule.--Notwithstanding the requirements 
        for making an annual contract payment specified in 
        paragraphs (1) and (2), at the option of the owner or 
        producer, the Secretary shall pay the full amount (or 
        such portion as the owner or producer may specify) of 
        the contract payment required to be paid for any of 
        fiscal years 1999 through 2002 at such time or times 
        during that fiscal year as the owner or producer may 
        specify.

[SEC. 113. AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS.

    [(a) Fiscal Year Amounts.--The Secretary shall, to the 
maximum extent practicable, expend the following amounts to 
satisfy the obligations of the Secretary under all contracts:
          [(1) For fiscal year 1996, $5,570,000,000.
          [(2) For fiscal year 1997, $5,385,000,000.
          [(3) For fiscal year 1998, $5,800,000,000.
          [(4) For fiscal year 1999, $5,603,000,000.
          [(5) For fiscal year 2000, $5,130,000,000.
          [(6) For fiscal year 2001, $4,130,000,000.
          [(7) For fiscal year 2002, $4,008,000,000.
    [(b) Allocation.--The amount made available for a fiscal 
year under subsection (a) shall be allocated as follows:
          [(1) For wheat, 26.26 percent.
          [(2) For corn, 46.22 percent.
          [(3) For grain sorghum, 5.11 percent.
          [(4) For barley, 2.16 percent.
          [(5) For oats, 0.15 percent.
          [(6) For upland cotton, 11.63 percent.
          [(7) For rice, 8.47 percent.
    [(c) Adjustment.--The Secretary shall adjust the amounts 
allocated for each contract commodity under subsection (b) for 
a particular fiscal year by--
          [(1) adding an amount equal to the sum of all 
        repayments of deficiency payments required under 
        section 114(a)(2) of the Agricultural Act of 1949 (7 
        U.S.C. 1445j(a)(2)) for the commodity;
          [(2) adding an amount equal to the sum of all refunds 
        of contract payments received during the preceding 
        fiscal year under section 116 for the commodity; and
          [(3) subtracting an amount equal to the amount, if 
        any, necessary during that fiscal year to satisfy 
        payment requirements for the commodity under sections 
        103B, 105B, or 107B of the Agricultural Act of 1949 for 
        the 1994 and 1995 crop years.
    [(d) Additional Rice Allocation.--In addition to the 
adjustments required under subsection (c), the amount allocated 
under subsection (b) for rice contract payments shall be 
increased by $8,500,000 for each of fiscal years 1997 through 
2002.
    [(e) Exclusion of Certain Amounts From Contract Payments.--
Any amount added pursuant to paragraphs (1) and (2) of 
subsection (c) to the amount available under subsection (a) for 
a fiscal year and paid to owners and producers under a contract 
shall not be treated as a contract payment for purposes of 
section 115(a) of this title or section 1001(1) of the Food 
Security Act of 1985 (7 U.S.C. 1308(1)). However, the amount of 
a payment covered by this subsection may not exceed $50,000 per 
person.
    [(f) Effect of Payment Limitation.--The amount available 
under subsection (a) for a fiscal year shall be reduced by an 
amount equal to the total amount of contract payments for the 
fiscal year that owners and producers forgo as a result of 
operation of the payment limitation under section 1001(1) of 
the Food Security Act of 1985 (7 U.S.C. 1308(1)).

[SEC. 114. DETERMINATION OF CONTRACT PAYMENTS UNDER CONTRACTS.

    [(a) Individual Payment Quantity of Contract Commodities.--
For each contract, the payment quantity of a contract commodity 
for each fiscal year shall be equal to the product of--
          [(1) 85 percent of the contract acreage; and
          [(2) the farm program payment yield.
    [(b) Annual Payment Quantity of Contract Commodities.--The 
payment quantity of each contract commodity covered by all 
contracts for each fiscal year shall be equal to the sum of the 
amounts calculated under subsection (a) for each individual 
contract.
    [(c) Annual Payment Rate.--The payment rate for a contract 
commodity for each fiscal year shall be equal to--
          [(1) the amount made available under section 113 for 
        the contract commodity for the fiscal year; divided by
          [(2) the amount determined under subsection (b) for 
        the fiscal year.
    [(d) Annual Payment Amount.--The amount to be paid under a 
contract in effect for each fiscal year with respect to all 
contract commodities covered by the contract shall be equal to 
the sum of the products of--
          [(1) the payment quantity determined under subsection 
        (a) for each of the contract commodities covered by the 
        contract; and
          [(2) the corresponding payment rate for the contract 
        commodity in effect under subsection (c).
    [(e) Reduction in Payment Amount.--The contract payment 
determined under subsection (d) for an owner or producer for a 
fiscal year shall be immediately reduced by the amount of any 
repayment of deficiency payments that is required under section 
114(a)(2) of the Agricultural Act of 1949 (7 U.S.C. 
1445j(a)(2)) and is not repaid as of the date the contract 
payment is determined. The Secretary shall be required to 
collect the required repayment, or any claim based on the 
required repayment, as soon as the contract payment is 
determined.
    [(f) Assignment of Contract Payments.--The provisions of 
section 8(g) of the Soil Conservation and Domestic Allotment 
Act (16 U.S.C. 590h(g)) (relating to assignment of payments) 
shallapply to contract payments under this section. The owner 
or producer making the assignment, or the assignee, shall provide the 
Secretary with notice, in such manner as the Secretary may require in 
the contract, of any assignment made under this subsection.
    [(g) Sharing of Contract Payments.--The Secretary shall 
provide for the sharing of contract payments among the owners 
and producers subject to the contract on a fair and equitable 
basis.]

SEC. 111. AUTHORIZATION FOR CONTRACTS.

    (a) In General.--The Secretary shall offer to enter into a 
contract with an eligible owner or producer described in 
subsection (b) on a farm containing eligible cropland under 
which the eligible owner or producer will receive direct 
payments and counter-cyclical payments under sections 113 and 
114, respectively.
    (b) Eligible Owners and Producers.--
          (1) In general.--Subject to paragraphs (2) and (3), 
        an owner or producer on a farm shall be eligible to 
        enter into a contract.
          (2) Tenants.--
                  (A) Share-rent tenants.--A producer on 
                eligible cropland that is a tenant with a 
                share-rent lease of the eligible cropland, 
                regardless of the length of the lease, shall be 
                eligible to enter into a contract, if the owner 
                of the eligible cropland enters into the same 
                contract.
                  (B) Cash-rent tenants.--
                          (i) Contracts with long-term 
                        leases.--A producer on eligible 
                        cropland that cash rents the eligible 
                        cropland under a lease expiring on or 
                        after the termination of the contract 
                        shall be eligible to enter into a 
                        contract.
                          (ii) Contracts with short-term 
                        leases.--
                                  (I) In general.--A producer 
                                that cash rents the eligible 
                                cropland under a lease expiring 
                                before the termination of the 
                                contract shall be eligible to 
                                enter into a contract.
                                  (II) Owner's contract 
                                interest.--The owner of the 
                                eligible cropland may also 
                                enter into the same contract.
                                  (III) Consent of owner.--If 
                                the producer elects to enroll 
                                less than 100 percent of the 
                                eligible cropland in the 
                                contract, the consent of the 
                                owner shall be required for a 
                                valid contract.
          (3) Cash-rent owners.--
                  (A) In general.--An owner of eligible 
                cropland that cash rents the eligible cropland 
                under a lease term that expires before the end 
                of 2006 crop year shall be eligible to enter 
                into a contract if the tenant declines to enter 
                into the contract.
                  (B) Contract payments.--In the case of an 
                owner covered by subparagraph (A), the 
                Secretary shall not make contract payments to 
                the owner under the contract until the lease 
                held by the tenant terminates.
    (c) Compliance With Certain Requirements.--Under the terms 
of a contract, the owner or producer shall agree, in exchange 
for annual contract payments--
          (1) to comply with applicable highly erodible land 
        conservation requirements under subtitle B of title XII 
        of the Food Security Act of 1985 (16 U.S.C. 3811 et 
        seq.);
          (2) to comply with applicable wetland conservation 
        requirements under subtitle C of title XII of that Act 
        (16 U.S.C. 3821 et seq.);
          (3) to comply with the planting flexibility 
        requirements of section 118; and
          (4) to use a quantity of land on the farm equal to 
        the contract acreage, for an agricultural or conserving 
        use or related activity, and not for a nonagricultural 
        commercial or industrial use, as determined by the 
        Secretary.
    (d) Protection of Interests of Certain Producers.--
          (1) Tenants and sharecroppers.--In carrying out this 
        subtitle, the Secretary shall provide adequate 
        safeguards to protect the interests of tenants and 
        sharecroppers.
          (2) Sharing of payments.--The Secretary shall provide 
        for the sharing of contract payments among the eligible 
        producers on a farm on a fair and equitable basis.
    (e) Eligible Cropland.--
          (1) In general.--Land shall be considered to be 
        cropland eligible for coverage under a contract only if 
        the land--
                  (A) has with respect to a contract 
                commodity--
                          (i) contract acreage attributable to 
                        the land; and
                          (ii) a payment yield; or
                  (B) was subject to a conservation reserve 
                contract under section 1231 of the Food 
                Security Act of 1985 (16 U.S.C. 3831) with a 
                term that expired, or was voluntarily 
                terminated, on or after the date of enactment 
                of this paragraph.
          (2) Quantity of eligible cropland covered by 
        contract.--An eligible owner or producer may enroll as 
        contract acreage under this subtitle all or a portion 
        of the eligible cropland on the farm.
          (3) Voluntary reduction in contract acreage.--An 
        eligible owner or producer that enters into a contract 
        may subsequently reduce the quantity of contract 
        acreage covered by the contract.
    (f) Contract Acreage.--
          (1) In general.--Subject to subsection (h), for the 
        purpose of making direct payments and counter-cyclical 
        payments to eligible owners and producers on a farm, 
        the Secretary shall provide the eligible owners and 
        producers on the farm with an opportunity to elect 1 of 
        the following methods as the method by which the 
        contract acreages for the 2002 through 2006 crops of 
        all contract commodities for a farm are determined:
                  (A) The 4-year average of acreage planted or 
                considered planted to a contract commodity for 
                harvest, grazing, haying, silage, or other 
                similar purposes during each of the 1998 
                through 2001 crop years.
                  (B) The total of--
                          (i) the contract acreage (as defined 
                        in section 102 (as in effect before the 
                        amendment made by section 101 of the 
                        Agriculture, Conservation, and Rural 
                        Enhancement Act of 2001)) that would 
                        have been used by the Secretary to 
                        calculate the payment for fiscal year 
                        2002 under such section 102 for the 
                        contract commodity on the farm; and
                          (ii) the 4-year average determined 
                        under subparagraph (A) for each oilseed 
                        produced on the farm.
                  (C) In the case of land described in section 
                112(a)(3), land with eligible base, as 
                determined by the Secretary.
          (2) Prevention of excess contract acreages.--
                  (A) Required reduction.--If the total of the 
                contract acreages for a farm, together with the 
                acreage described in subparagraph (C), exceeds 
                the actual cropland acreage of the farm, the 
                Secretary shall reduce the quantity of contract 
                acreages for 1 or more contract commodities for 
                the farm or peanut acres as necessary so that 
                the total of the contract acreages and acreage 
                described in subparagraph (C) does not exceed 
                the actual cropland acreage of the farm.
                  (B) Selection of acres.--The Secretary shall 
                give the eligible owners and producers on the 
                farm the opportunity to select the contract 
                acreages or peanut acres against which the 
                reduction will be made.
                  (C) Other acreage.--For purposes of 
                subparagraph (A), the Secretary shall include--
                          (i) any peanut acres for the farm 
                        under chapter 3 of subtitle D;
                          (ii) any acreage on the farm enrolled 
                        in the conservation reserve program or 
                        wetlands reserve program under chapter 
                        1 of subtitle D of title XII of the 
                        Food Security Act of 1985 (16 U.S.C. 
                        3830 et seq.); and
                          (iii) any other acreage on the farm 
                        enrolled in a voluntary Federal 
                        conservation program under which 
                        production of any agricultural 
                        commodity is prohibited.
                  (D) Double-cropped acreage.--In applying 
                subparagraph (A), the Secretary shall take into 
                account additional acreage as a result of an 
                established double-cropping history on a farm, 
                as determined by the Secretary.
    (g) Payment Yields.--
          (1) In general.--Subject to paragraph (2) and 
        subsection (h), an eligible owner or producer that has 
        entered into a contract under this subtitle may make a 
        1-time election to have the payment yield for a payment 
        for each of the 2002 through 2006 crops of all contract 
        commodities for a farm be equal to--
                  (A) an amount that is the greater of--
                          (i) the average of the yield per 
                        harvested acre for the crop of the 
                        contract commodity for the farm for the 
                        1998 through 2001 crop years, 
                        excluding--
                                  (I) any crop year for which 
                                the producers on the farm did 
                                not plant the contract 
                                commodity; and
                                  (II) at the option of the 
                                producers on the farm, 1 
                                additional crop year; or
                          (ii) the farm program payment yield 
                        described in subparagraph (B); or
                  (B) the farm program payment yield 
                established for the 1995 crop of a contract 
                commodity under section 505 of the Agricultural 
                Act of 1949 (7 U.S.C. 1465), as adjusted by the 
                Secretary to account for any additional yield 
                payments made with respect to that crop under 
                section 505(b)(2) of that Act.
          (2) Assigned yields.--In the case of a farm for which 
        yield records are unavailable for a contract commodity 
        (including land of a farm that is devoted to an oilseed 
        under a former conservation reserve contract described 
        in section 112(a)(3)), the Secretary shall establish an 
        appropriate payment yield for the contract commodity on 
        the farm taking in consideration the payment yields 
        applicable to the contract commodity under paragraph 
        (1) for similar farms in the area, taking into 
        consideration the yield election for the farm under 
        subsection (h).
    (h) Eligible Owner and Producer Election Options.--
          (1) In general.--In making elections under 
        subsections (f) and (g), eligible owners and producers 
        on a farm shall elect to have--
                  (A)(i) contract acreage for the farm 
                determined under subsection (f)(1)(A); and
                  (ii) payment yields determined under 
                subsection (g)(1)(A); or
                  (B)(i) contract acreage for the farm 
                determined under subsection (f)(1)(B); and
                  (ii) payment yields determined under--
                          (I) in the case of contract 
                        commodities other than oilseeds, 
                        subsection (g)(1)(B); and
                          (II) in the case of oilseeds, 
                        subsection (g)(1)(A).
          (2) Single election; time for election.--
                  (A) Single election.--The eligible owners and 
                producers on a farm shall have 1 opportunity to 
                make the election described in paragraph (1).
                  (B) Time for election.--Subject to section 
                112(a)(3), not later than 180 days after the 
                date of enactment of this subsection, the 
                eligible owners and producers on a farm shall 
                notify the Secretary of the election made by 
                the eligible owners and producers on the farm 
                under paragraph (1).
          (3) Effect of failure to make election.--If the 
        producers on a farm fail to make the election under 
        paragraph (1), or fail to timely notify the Secretary 
        of the selected option as required by paragraph (2), 
        the eligible owners and producers on the farm shall be 
        deemed to have made the election described in paragraph 
        (1)(B) for the purpose of determining the contract 
        acreages for all contract commodities on the farm.
          (4) Application of election to all contract 
        commodities.--The election made under paragraph (1) or 
        deemed to be made under paragraph (3) with respect to a 
        farm shall apply to all of the contract commodities 
        produced on the farm.

SEC. 112. ELEMENTS OF CONTRACTS.

    (a) Time for Contracting.--
          (1) Commencement.--To the extent practicable, the 
        Secretary shall commence entering into contracts not 
        later than 45 days after the date of enactment of the 
        Agriculture, Conservation, and Rural Enhancement Act of 
        2001.
          (2) Deadline.--Except as provided in paragraph (3), 
        the Secretary may not enter into a contract after the 
        date that is 180 days after the date of enactment of 
        that Act.
          (3) Conservation reserve land.--
                  (A) In general.--At the beginning of each 
                fiscal year, the Secretary shall allow an 
                eligible owner or producer on a farm covered by 
                a conservation reserve contract entered into 
                under section 1231 of the Food Security Act of 
                1985 (16 U.S.C. 3831) that terminated after the 
                date specified in paragraph (2) to enter into 
                or expand a contract to cover the eligible 
                cropland of the farm that was subject to the 
                former conservation reserve contract.
                  (B) Election.--For the fiscal year and crop 
                year for which a contract acreage adjustment 
                under subparagraph (A) is first made, the 
                eligible owners and producers on the farm shall 
                elect to receive--
                          (i) direct payments and counter-
                        cyclical payments under sections 113 
                        and 114, respectively, with respect to 
                        the acreage added to the farm under 
                        this paragraph; or
                          (ii) a prorated payment under the 
                        conservation reserve contract.
    (b) Duration of Contract.--
          (1) Beginning date.--The term of a contract shall 
        begin with--
                  (A) the 2002 crop of a contract commodity; or
                  (B) in the case of acreage that was subject 
                to a conservation reserve contract described in 
                subsection (a)(3), the date the contract was 
                entered into or expanded to cover the acreage.
          (2) Ending date.--Subject to sections 116 and 117, 
        the term of a contract shall extend through the 2006 
        crop, unless earlier terminated by the eligible owners 
        or producers on a farm.

SEC. 113. DIRECT PAYMENTS.

    (a) In General.--For each of the 2002 through 2006 fiscal 
years, the Secretary shall make direct payments available to 
eligible owners and producers on a farm that have entered into 
a contract to receive payments under this section.
    (b) Payment Amount.--The amount of a direct payment to be 
paid to the eligible owners and producers on a farm for a 
contract commodity for a fiscal year under this section shall 
be obtained by multiplying--
          (1) the payment rate for the contract commodity 
        specified in subsection (c);
          (2) the contract acreage attributable to the contract 
        commodity for the farm; and
          (3) the payment yield for the contract commodity for 
        the farm.
    (c) Payment Rate.--The payment rates used to make direct 
payments with respect to contract commodities for a fiscal year 
under this section are as follows:
          (1) Wheat.--In the case of wheat:
                  (A) For each of fiscal years 2002 and 2003, 
                $0.450 per bushel.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.225 per bushel.
                  (C) For fiscal year 2006, $0.113 per bushel.
          (2) Corn.--In the case of corn:
                  (A) For each of fiscal years 2002 and 2003, 
                $0.270 per bushel.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.135 per bushel.
                  (C) For fiscal year 2006, $0.068 per bushel.
          (3) Grain sorghum.--In the case of grain sorghum:
                  (A) For the 2002 fiscal year, $0.310 per 
                bushel.
                  (B) For the 2003 fiscal year, $0.270 per 
                bushel.
                  (C) For each of fiscal years 2004 and 2005, 
                $0.135 per bushel.
                  (D) For fiscal year 2006, $0.068 per bushel.
          (4) Barley.--In the case of barley:
                  (A) For each of fiscal years 2002 and 2003, 
                $0.200 per bushel.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.100 per bushel.
                  (C) For fiscal year 2006, $0.050 per bushel.
          (5) Oats.--In the case of oats:
                  (A) For each of fiscal years 2002 and 2003, 
                $0.050 per bushel.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.025 per bushel.
                  (C) For fiscal year 2006, $0.013 per bushel.
          (6) Upland cotton.--In the case of upland cotton:
                  (A) For each of fiscal years 2002 and 2003, 
                $0.130 per pound.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.065 per pound.
                  (C) For fiscal year 2006, $0.0325 per pound.
          (7) Rice.--In the case of rice:
                  (A) For each of fiscal years 2002 and 2003, 
                $2.450 per hundredweight.
                  (B) For each of fiscal years 2004 and 2005, 
                $1.225 per hundredweight.
                  (C) For fiscal year 2006, $0.6125 per 
                hundredweight.
          (8) Soybeans.--In the case of soybeans:
                  (A) For each of fiscal years 2002 and 2003, 
                $0.550 per bushel.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.275 per bushel.
                  (C) For fiscal year 2006, $0.138 per bushel.
          (9) Oilseeds (other than soybeans).--In the case of 
        oilseeds (other than soybeans):
                  (A) For each of fiscal years 2002 and 2003, 
                $0.010 per pound.
                  (B) For each of fiscal years 2004 and 2005, 
                $0.005 per pound.
                  (C) For fiscal year 2006, $0.0025 per pound.
    (d) Time for Payments.--
          (1) Initial payment.--At the option of the eligible 
        owners and producers on a farm, the Secretary shall pay 
        50 percent of the direct payment for a crop of a 
        contract commodity for the eligible owners and 
        producers on the farm on or after December 1 of the 
        fiscal year, as determined by the Secretary.
          (2) Final payment.--The Secretary shall pay the final 
        amount of the direct payment that is payable to the 
        eligible owners and producers on a farm for a contract 
        commodity under subsection (a) (less the amount of any 
        initial payment made to the producers on the farm of 
        the contract commodity under paragraph (1)) not later 
        than September 30 of the fiscal year, as determined by 
        the Secretary.

SEC. 114. COUNTER-CYCLICAL PAYMENTS.

    (a) In General.--For each of the 2002 through 2006 crop 
years, the Secretary shall make counter-cyclical payments to 
eligible owners and producers on a farm of each contract 
commodity that have entered into a contract to receive payments 
under this section.
    (b) Payment Amount.--The amount of the payments made to 
eligible owners and producers on a farm for a crop of a 
contract commodity under this section shall equal the amount 
obtained by multiplying--
          (1) the payment rate for the contract comodity 
        specified in subsection (c);
          (2) the contract acreage attributable to the contract 
        commodity for the farm; and
          (3) the payment yield for the contract commodity for 
        the farm.
    (c) Payment Rates.--
          (1) In general.--The payment rate for a crop of a 
        contract commodity under subsection (b)(1) shall equal 
        the difference between--
                  (A) the income protection price for the 
                contract commodity established under paragraph 
                (2); and
                  (B) the total of--
                          (i) the higher of--
                                  (I) the average price of the 
                                contract commodity during the 
                                first 5 months of the marketing 
                                year of the contract commodity, 
                                as determined by the Secretary; 
                                and
                                  (II) the loan rate for the 
                                crop of the contract commodity 
                                under section 132; and
                          (ii) the direct payment for the 
                        contract commodity under section 113 
                        for the fiscal year that precedes the 
                        date of a payment under this section.
          (2) Income protection prices.--The income protection 
        prices for contract commodities under paragraph (1)(A) 
        are as follows:
                  (A) Wheat, $3.45 per bushel.
                  (B) Corn, $2.35 per bushel.
                  (C) Grain sorghum, $2.35 per bushel.
                  (D) Barley, $2.20 per bushel.
                  (E) Oats, $1.55 per bushel.
                  (F) Upland cotton, $0.680 per pound.
                  (G) Rice, $9.30 per hundredweight.
                  (H) Soybeans, $5.75 per bushel.
                  (I) Oilseeds (other than soybeans), $0.105 
                per pound.
    (d) Time for Payment.--The Secretary shall make counter-
cyclical payments for each of the 2002 through 2006 crop years 
not later than 190 days after the beginning of marketing year 
for the crop of the contract commodity.

           *       *       *       *       *       *       *


SEC. 116. VIOLATIONS OF CONTRACT.

    (a) Termination of Contract for Violation.--Except as 
provided in [subsection (b)] subsections (b) and (e), if an 
owner or producer subject to a contract violates a requirement 
of the contract specified in [section 111(a)] this subtitle, 
the Secretary shall terminate the contract with respect to the 
owner or producer on each farm in which the owner or producer 
has an interest. On the termination, the owner or producer 
shall forfeit all rights to receive future contract payments on 
each farm in which the owner or producer has an interest and 
shall refund to the Secretary all contract payments received by 
the owner or producer during the period of the violation, 
together with interest on the contract payments as determined 
by the Secretary.
    (b) Refund or Adjustment.--[If] Except as provided in 
subsection (e), if the Secretary determines that a violation 
does not warrant termination of the contract under subsection 
(a), the Secretary may require the owner or producer subject to 
the contract--

           *       *       *       *       *       *       *

    (d) Review.--A determination of the Secretary under this 
section shall be considered to be an adverse decision for 
purposes of the availability of administrative review of the 
determination.
    (e) Planting Flexibility.--In the case of a first violation 
of section 118(b) by an eligible owner or producer that has 
entered into a contract and that acted in good faith, in lieu 
of terminating the contract under subsection (a), the Secretary 
shall require a refund or reduce a future contract payment 
under subsection (b) in an amount that does not exceed twice 
the amount otherwise payable under the contract on the number 
of acres involved in the violation.

           *       *       *       *       *       *       *


SEC. 118. PLANTING FLEXIBILITY.

    (a) Permitted Crops.--Subject to subsection (b), any 
commodity or crop may be planted on contract acreage on a farm.
    (b) Limitations and Exceptions Regarding Fruits and 
Vegetables.--
          [(1) Limitations.--The planting of fruits and 
        vegetables (other than lentils, mung beans, and dry 
        peas) shall be prohibited on contract acreage.]
          (1) Limitations.--The planting of the following 
        agricultural commodities shall be prohibited on 
        contract acreage:
                  (A) Fruits.
                  (B) Vegetables (other than lentils, mung 
                beans, dry peas, and chickpeas).
                  (C) In the case of the 2003 and subsequent 
                crops of an agricultural commodity, wild rice.
          (2) Exceptions.--Paragraph (1) shall not limit the 
        planting of a fruit or vegetable--
                  (A) in any region in which there is a history 
                of double-cropping of contract commodities with 
                fruits or vegetables, as determined by the 
                Secretary, in which case the double-cropping 
                shall be permitted;
                  (B) on a farm that the Secretary determines 
                has a history of planting fruits or vegetables 
                on contract acreage, except that a contract 
                payment shall be reduced by an acre for each 
                acre planted to the fruit or vegetable; or
                  (C) by a producer who the Secretary 
                determines has an established planting history 
                of a specific fruit or vegetable, except that--
                          (i) the quantity planted may not 
                        exceed the producer's average annual 
                        planting history of the fruit or 
                        vegetable in the [1991 through 1995] 
                        1996 through 2001 crop years (excluding 
                        any crop year in which no plantings 
                        were made), as determined by the 
                        Secretary; and
                          (ii) a contract payment shall be 
                        reduced by an acre for each acre 
                        planted to the fruit or vegetable.

           *       *       *       *       *       *       *


SEC. 131. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE LOANS.

           *       *       *       *       *       *       *


    (a) Nonrecourse Loans Available.--For each of the 1996 
through [2002] 2006 crops of each loan commodity, the Secretary 
shall make available to producers on a farm nonrecourse 
marketing assistance loans for loan commodities produced on the 
farm. The loans shall be made under terms and conditions that 
are prescribed by the Secretary and at the loan rate 
established under section 132 for the loan commodity.
    [(b) Eligible Production.--The following production shall 
be eligible for a marketing assistance loan under subsection 
(a):
          [(1) In the case of a marketing assistance loan for a 
        contract commodity, any production by a producer on a 
        farm containing eligible cropland covered by a 
        production flexibility contract.
          [(2) In the case of a marketing assistance loan for 
        extra long staple cotton and oilseeds, any production.]
    (b) Eligible Production.--The producers on a farm shall be 
eligible for a marketing loan under subsection (a) for any 
quantity of a loan commodity produced on the farm.

           *       *       *       *       *       *       *


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

    [(a) Wheat.--
          [(1) Loan rate.--Subject to paragraph (2), the loan 
        rate for a marketing assistance loan under section 131 
        for wheat shall be--
                  [(A) not less than 85 percent of the simple 
                average price received by producers of wheat, 
                as determined by the Secretary, during the 
                marketing years for the immediately preceding 5 
                crops of wheat, excluding the year in which the 
                average price was the highest and the year in 
                which the average price was the lowest in the 
                period; but
                  [(B) not more than $2.58 per bushel.
          [(2) Stocks to use ratio adjustment.--If the 
        Secretary estimates for any marketing year that the 
        ratio of ending stocks of wheat to total use for the 
        marketing year will be--
                  [(A) equal to or greater than 30 percent, the 
                Secretary may reduce the loan rate for wheat 
                for the corresponding crop by an amount not to 
                exceed 10 percent in any year;
                  [(B) less than 30 percent but not less than 
                15 percent, the Secretary may reduce the loan 
                rate for wheat for the corresponding crop by an 
                amount not to exceed 5 percent in any year; or
                  [(C) less than 15 percent, the Secretary may 
                not reduce the loan rate for wheat for the 
                corresponding crop.
    [(b) Feed Grains.--
          [(1) Loan rate for corn.--Subject to paragraph (2), 
        the loan rate for a marketing assistance loan under 
        section 131 for corn shall be--
                  [(A) not less than 85 percent of the simple 
                average price received by producers of corn, as 
                determined by the Secretary, during the 
                marketing years for the immediately preceding 5 
                crops of corn, excluding the year in which the 
                average price was the highest and the year in 
                which the average price was the lowest in the 
                period; but
                  [(B) not more than $1.89 per bushel.
          [(2) Stocks to use ratio adjustment.--If the 
        Secretary estimates for any marketing year that the 
        ratio of ending stocks of corn to total use for the 
        marketing year will be--
                  [(A) equal to or greater than 25 percent, the 
                Secretary may reduce the loan rate for corn for 
                the corresponding crop by an amount not to 
                exceed 10 percent in any year;
                  [(B) less than 25 percent but not less than 
                12.5 percent, the Secretary may reduce the loan 
                rate for corn for the corresponding crop by an 
                amount not to exceed 5 percent in any year; or
                  [(C) less than 12.5 percent, the Secretary 
                may not reduce the loan rate for corn for the 
                corresponding crop.
          [(3) Other feed grains.--The loan rate for a 
        marketing assistance loan under section 131 for grain 
        sorghum, barley, and oats, respectively, shall be 
        established at such level as the Secretary determines 
        is fair and reasonable in relation to the rate that 
        loans are made available for corn, taking into 
        consideration the feeding value of the commodity in 
        relation to corn.
    [(c) Upland Cotton.--
          [(1) Loan rate.--Subject to paragraph (2), the loan 
        rate for amarketing assistance loan under section 131 
for upland cotton shall be established by the Secretary at such loan 
rate, per pound, as will reflect for the base quality of upland cotton, 
as determined by the Secretary, at average locations in the United 
States a rate that is not less than the smaller of--
                  [(A) 85 percent of the average price 
                (weighted by market and month) of the base 
                quality of cotton as quoted in the designated 
                United States spot markets during 3 years of 
                the 5-year period ending July 31 of the year 
                preceding the year in which the crop is 
                planted, excluding the year in which the 
                average price was the highest and the year in 
                which the average price was the lowest in the 
                period; or
                  [(B) 90 percent of the average, for the 15-
                week period beginning July 1 of the year 
                preceding the year in which the crop is 
                planted, of the 5 lowest-priced growths of the 
                growths quoted for Middling 1 3/3inch cotton 
                C.I.F. Northern Europe (adjusted downward by 
                the average difference during the period April 
                15 through October 15 of the year preceding the 
                year in which the crop is planted between the 
                average Northern European price quotation of 
                such quality of cotton and the market 
                quotations in the designated United States spot 
                markets for the base quality of upland cotton), 
                as determined by the Secretary.
          [(2) Limitations.--The loan rate for a marketing 
        assistance loan for upland cotton shall not be less 
        than $0.50 per pound or more than $0.5192 per pound.
    [(d) Extra Long Staple Cotton.--The loan rate for a 
marketing assistance loan under section 131 for extra long 
staple cotton shall be--
          [(1) not less than 85 percent of the simple average 
        price received by producers of extra long staple 
        cotton, as determined by the Secretary, during 3 years 
        of the 5-year period ending July 31 of the year 
        preceding the year in which the crop is planted, 
        excluding the year in which the average price was the 
        highest and the year in which the average price was the 
        lowest in the period; but
          [(2) not more than $0.7965 per pound.
    [(e) Rice.--The loan rate for a marketing assistance loan 
under section 131 for rice shall be $6.50 per hundredweight.
    [(f) Oilseeds.--
          [(1) Soybeans.--The loan rate for a marketing 
        assistance loan under section 131 for soybeans shall 
        be--
                  [(A) not less than 85 percent of the simple 
                average price received by producers of 
                soybeans, as determined by the Secretary, 
                during the marketing years for the immediately 
                preceding 5 crops of soybeans, excluding the 
                year in which the average price was the highest 
                and the year in which the average price was the 
                lowest in the period; but
                  [(B) not less than $4.92 or more than $5.26 
                per bushel.
          [(2) Sunflower seed, canola, rapeseed, safflower, 
        mustard seed, and flaxseed.--The loan rate for a 
        marketing assistance loan under section 131 for 
        sunflower seed, canola, rapeseed, safflower, mustard 
        seed, and flaxseed, individually, shall be--
                  [(A) not less than 85 percent of the simple 
                average price received by producers of 
                sunflower seed, individually, as determined by 
                the Secretary, during the marketing years for 
                the immediately preceding 5 crops of sunflower 
                seed, individually, excluding the year in which 
                the average price was the highest and the year 
                in which the average price was the lowest in 
                the period; but
                  [(B) not less than $0.087 or more than $0.093 
                per pound.
          [(3) Other oilseeds.--The loan rates for a marketing 
        assistance loan under section 131 for other oilseeds 
        shall be established at such level as the Secretary 
        determines is fair and reasonable in relation to the 
        loan rate available for soybeans, except in no event 
        shall the rate for the oilseeds (other than cottonseed) 
        be less than the rate established for soybeans on a 
        per-pound basis for the same crop.]

SEC. 132. LOAN RATES.

    (a) In General.--Subject to subsection (b), the loan rate 
for a marketing assistance loan under section 131 for a loan 
commodity shall be--
          (1) in the case of wheat, $3.00 per bushel;
          (2) in the case of corn, $2.08 per bushel;
          (3) in the case of grain sorghum, $2.08 per bushel;
          (4) in the case of barley, $2.00 per bushel;
          (5) in the case of oats, $1.50 per bushel;
          (6) in the case of upland cotton, $0.55 per pound;
          (7) in the case of extra long staple cotton, $0.7965 
        per pound;
          (8) in the case of rice, $6.85 per hundredweight;
          (9) in the case of soybeans, $5.20 per bushel;
          (10) in the case of oilseeds (other than soybeans), 
        $0.095per pound;
          (11) in the case of graded wool, $1.00 per pound;
          (12) in the case of nongraded wool, $.40 per pound;
          (13) in the case of mohair, $2.00 per pound;
          (14) in the case of honey, $.60 per pound;
          (15) in the case of dry peas, $6.78 per 
        hundredweight;
          (16) in the case of lentils, $12.79 per 
        hundredweight;
          (17) in the case of large chickpeas, $17.44 per 
        hundredweight; and
          (18) in the case of small chickpeas, $8.10 per 
        hundredweight.
    (b) Adjustments.--
          (1) In general.--The Secretary may make appropriate 
        adjustments in the loan rates for any loan commodity 
        for differences in grade, type, quality, location, and 
        other factors.
          (2) Manner.--The adjustments under this subsection 
        shall, to the maximum extent practicable, be made in 
        such manner that the average loan rate for the loan 
        commodity will, on the basis of the anticipated 
        incidence of the factors described in paragraph (1), be 
        equal to the loan rate provided under this section.

[SEC. 133. TERM OF LOANS.

    [(a) Term of Loan.--In the case of each loan commodity 
(other than upland cotton or extra long staple cotton), a 
marketing assistance loan under section 131 shall have a term 
of 9 months beginning on the first day of the first month after 
the month in which the loan is made.
    [(b) Special Rule for Cotton.--A marketing assistance loan 
for upland cotton or extra long staple cotton shall have a term 
of 10 months beginning on the first day of the month in which 
the loan is made.
    [(c) Extensions Prohibited.--The Secretary may not extend 
the term of a marketing assistance loan for any loan 
commodity.]

SEC. 133. TERM OF LOANS.

    ``In the case of each loan commodity, a marketing loan 
under section 131 shall have a term of 9 months beginning on 
the first day of the first month after the month in which the 
loan is made.

SEC. 134. REPAYMENT OF LOANS.

    (a) Repayment Rates for Wheat, Feed Grains, and Oilseeds.--
The Secretary shall permit a producer to repay a marketing 
assistance loan under section 131 for [wheat, corn, grain 
sorghum, barley, oats, and oilseeds] a loan commodity (other 
than upland cotton, rice, and extra long staple cotton) at a 
rate that is the lesser of--
          (1) the loan rate established for the commodity under 
        section 132, plus interest (as determined by the 
        Secretary); or
          (2) a rate that the Secretary determines will--
                  (A) minimize potential loan forfeitures;
                  (B) minimize the accumulation of stocks of 
                the commodity by the Federal Government;
                  (C) minimize the cost incurred by the Federal 
                Government in storing the commodity; [and]
                  (D) allow the commodity produced in the 
                United States to be marketed freely and 
                competitively, both domestically and 
                internationally[.]; and
                  (E) minimize discrepancies in marketing loan 
                benefits across State boundaries and across 
                county boundaries.

           *       *       *       *       *       *       *


SEC. 135. LOAN DEFICIENCY

           *       *       *       *       *       *       *


    [(a) Availability of Loan Deficiency Payments.--Except as 
provided in subsection (d), the Secretary may make loan 
deficiency payments available to--
          [(1) producers who, although eligible to obtain a 
        marketing assistance loan under section 131 with 
        respect to a loan commodity, agree to forgo obtaining 
        the loan for the commodity in return for payments under 
        this section; and
          [(2) effective only for the 2000 crop year, producers 
        that, although not eligible to obtain such a marketing 
        assistance loan under section 131, produce a contract 
        commodity.]
    (a) In General.--The Secretary may make loan deficiency 
paymentsavailable to producers on a farm that, although 
eligible to obtain a marketing assistance loan under section 131 with 
respect to a loan commodity, agree to forgo obtaining the loan for the 
loan commodity in return for payments under this section.
    (b) Computation.--A loan deficiency payment under this 
section shall be computed by multiplying--
          (1) the loan payment rate determined under subsection 
        (c) for the loan commodity; by
          (2) the quantity of the loan commodity produced by 
        the eligible producers, excluding any quantity for 
        which the producers obtain a loan under section 131.
    (c) Loan Payment Rate.--For purposes of this section, the 
loan payment rate shall be the amount by which--
          (1) the loan rate established under section 132 for 
        the loan commodity; exceeds
          (2) the rate at which a loan for the commodity may be 
        repaid under section 134.
    (d) Exception for Extra Long Staple Cotton.--This section 
shall not apply with respect to extra long staple cotton.
    [(e) Transition.--A payment to a producer eligible for a 
payment under subsection (a)(2) that harvested a commodity on 
or before the date that is 30 days after the promulgation of 
the regulations implementing subsection (a)(2) shall be 
determined as the date the producer lost beneficial interest in 
the commodity, as determined by the Secretary. Subsecs. (e) and 
(f) added by sec. 206(c) of P.L. 106-224, 114 Stat. 405, June 
20, 2000.
    [(f) Beneficial Interest.--Subject to subsection (e), a 
producer shall be eligible for a payment under this section 
only if the producer has a beneficial interest in the 
commodity, as determined by the Secretary.]
    (e) Beneficial Interest.--
          (1) In general.--A producer shall be eligible for a 
        payment for a loan commodity under this section only if 
        the producer has a beneficial interest in the loan 
        commodity, as determined by the Secretary.
          (2) Application.--The Secretary shall make a payment 
        under this section to the producers on a farm with 
        respect to a quantity of a loan commodity as of the 
        earlier of--
                  (A) the date on which the producers on the 
                farm marketed or otherwise lost beneficial 
                interest in the loan commodity, as determined 
                by the Secretary; or
                  (B) the date the producers on the farm 
                request the payment.

           *       *       *       *       *       *       *


SEC. 136. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON.

           *       *       *       *       *       *       *


          (1) Issuance.--During the period ending July 31, 
        [2003] 2007, the Secretary shall issue marketing 
        certificates or cash payments, at the option of the 
        recipient, to domestic users and exporters for 
        documented purchases by domestic users and sales for 
        export by exporters made in the week following a 
        consecutive 4-week period in which--

           *       *       *       *       *       *       *


SEC. 136A. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG STAPLE COTTON.

    (a) Competitiveness Program.--Notwithstanding any other 
provision of law, during the period beginning on October 1, 
1999, and ending on July 31, [2003] 2007, the Secretary shall 
carry out a program to maintain and expand the domestic use of 
extra long staple cotton produced in the United States, to 
increase exports of extra long staple cotton produced in the 
United States, and to ensure that extra long staple cotton 
produced in the United States remains competitive in world 
markets.

           *       *       *       *       *       *       *


SEC. 137. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE FEED GRAINS 
                    AND SEED COTTON AND OTHER FIBERS.

    (a) High Moisture Feed Grains.--
          (1) Recourse loans available.--For each of the 1996 
        through [2002] 2006 crops of corn and grain sorghum, 
        the Secretary shall make available recourse loans, as 
        determined by the Secretary, to producers on a farm 
        containing eligible cropland covered by a production 
        flexibility contract who--

           *       *       *       *       *       *       *

          (3) High moisture state defined.--In this subsection, 
        the term ``high moisture state'' means corn or grain 
        sorghum having a moisture content in excess of 
        Commodity Credit Corporation standards for marketing 
        assistance loans made by the Secretary under section 
        131.
    (b) Recourse Loans Available for Seed Cotton.--
          (1) Upland cotton.--For each of the 1996 through 
        [2002] 2006 crops of upland cotton, the Secretary shall 
        make available recourse seed cotton loans, as 
        determined by the Secretary, to producers on a farm 
        containing eligible cropland covered by a production 
        flexibility contract.
          (2) Extra long staple cotton.--For each of the 1996 
        through [2002] 2006 crops of extra long staple cotton, 
        the Secretary shall make available recourse seed cotton 
        loans, as determined by the Secretary, on any 
        production.

           *       *       *       *       *       *       *


                     Subtitle D--Other Commodities

                            CHAPTER 1--DAIRY


SEC. 141. MILK PRICE SUPPORT PROGRAM.

           *       *       *       *       *       *       *


    (h) Period of Effectiveness.--This section (other than 
subsection (g)) shall be effective only during the period 
beginning on the first day of the first month beginning after 
the date of enactment of this title and ending on December 31, 
[2001] 2006. The program authorized by this section shall 
terminate on December 31, [2001] 2006, and shall be considered 
to have expired notwithstanding section 257 of the Balanced 
Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 
907).

[SEC. 142. RECOURSE LOAN PROGRAM FOR COMMERCIAL PROCESSORS OF DAIRY 
                    PRODUCTS.

    [(a) Recourse Loans Available.--Under such reasonable terms 
and conditions as the Secretary may prescribe, the Secretary 
shall make recourse loans available to commercial processors of 
eligible dairy products to assist the processors to manage 
inventories of eligible dairy products and assure a greater 
degree of price stability for the dairy industry during the 
year. The Secretary shall use the funds, facilities, and 
authorities of the Commodity Credit Corporation to carry out 
this section.
    [(b) Amount of Loan.--The Secretary shall establish the 
amount of a loan for eligible dairy products, which shall 
reflect a milk equivalent value of $9.90 per hundredweight of 
milk containing 3.67 percent butterfat. The rate of interest 
charged participants under this section shall not be less than 
the rate of interest charged the Commodity Credit Corporation 
by the United States Treasury.
    [(c) Period of Loan.--The original term of a recourse loan 
made under this section may not extend beyond the end of the 
fiscal year in which the loan is made. At the end of the fiscal 
year, the Secretary may extend the loan for an additional 
period not to exceed the end of the next fiscal year.
    [(d) Definition of Eligible Dairy Products.--In this 
section, the term ``eligible dairy products'' means cheddar 
cheese, butter, and nonfat dry milk.
    [(e) Effective Date.--This section shall be effective 
beginning January 1, 2002.
    [Sec. 807(b) of the Agriculture, Rural Development, Food 
and Drug Administration, and Related Agencies Appropriations 
Act, 2000 (7 U.S.C. 1421 note; P.L. 106-78; 113 Stat. 1181; 
Oct. 22, 1999) amended this subsec. by striking ``2000'' and 
inserting ``2001''. Sec. 742(b) of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2001 (P.L. 106-387; 114 Stat. 1549, 1549A-
35; Oct. 28, 2000) amended this subsec. by striking ``2001'' 
and inserting ``2002''.]

SEC. 142. NATIONAL DAIRY PROGRAM.

    (a) Purpose.--The purpose of this section is to establish a 
program that will stabilize the production, price, and 
marketing of milk and other dairy products in the United 
States, which is critical to the welfare of the United States.
    (b) Definitions.--In this section:
          (1) Class i, ii, iii, and iv milk.--The terms ``Class 
        I milk'', ``Class II milk'', ``Class III milk'', and 
        ``Class IV milk'' mean milk (including milk components) 
        classified as Class I, II, III, or IV milk, 
        respectively, under a Federal milk marketing order.
          (2) Eligible production.--The term ``eligible 
        production'' means, with respect to each producer that 
        operates a dairy farming operation, the lesser of--
                  (A) the quantity of milk sold by the dairy 
                farming operation under any Federal milk 
                marketing order during the applicable month; or
                  (B) 500,000 pounds of milk per month.
          (3) Federal milk marketing order.--The term ``Federal 
        milk marketing order'' means an order issued under 
        section 8c of the Agricultural Adjustment Act (7 U.S.C. 
        608c), reenacted with amendments by the Agricultural 
        Marketing Agreement Act of 1937.
          (4) Marketing area.--The term ``marketing area'' 
        means a marketing area defined under a Federal milk 
        marketing order.
          (5) Producer.--The term ``producer'' means an 
        individual or entity that directly or indirectly (as 
        determined by the Secretary)--
                  (A) shares in the risk of producing milk; and
                  (B) makes contributions (including land, 
                labor, management, equipment, or capital) to 
                the dairy farming operation of the individual 
                or entity that are at least commensurate with 
                the individual or entity's share of the 
                proceeds of the operation.
          (6) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
    (c) Minimum Price.--Effective beginning January 1, 2001, 
the Secretary shall amend Federal milk marketing orders to 
establish a minimum price per hundredweight for Class I milk 
that is not less than the sum of--
          (1) the adjusted Class I milk differential specified 
        in section 1000.52 of title 7, Code of Federal 
        Regulations (or a successor regulation); and
          (2) the greater of--
                  (A) the advanced Class III milk price (as 
                determined under section 1000.50(q)(4)(i) of 
                title 7, Code of Federal Regulations (or a 
                successor regulation));
                  (B) the advanced Class IV milk price (as 
                determined under section 1000.50(q)(4)(ii) of 
                title 7, Code of Federal Regulations (or a 
                successor regulation)); or
                  (C) $14.25.
    (d) National Pooling.--Notwithstanding any other provision 
of law, the Secretary--
          (1) shall provide for the uniform national pooling 
        among producers of milk under all Federal milk 
        marketing orders of all funds that are equal to the 
        difference between--
                  (A) the price of Class I milk as determined 
                under this section; and
                  (B) the price of Class I milk that would be 
                determined if this section were not in effect;
          (2) subject to subsection (e), shall provide for the 
        distribution of amounts described in paragraph (1) to 
        all producers covered by Federal milk marketing orders, 
        based on eligible production under Federal milk 
        marketing orders, at a uniform rate per hundredweight; 
        and
          (3) may make such modifications in the operation of 
        Federal milk marketing orders as are necessary to carry 
        out this section.
    (e) Administrative and Food Assistance Costs.--The 
Secretary shall use amounts described in subsection (d)(1) to 
provide compensation to--
          (1) the Secretary for--
                  (A) administrative costs incurred by the 
                Secretary in carrying out subsections (c) and 
                (d); and
                  (B) the increased costs incurred by the 
                Secretary of any milk and milk products provided 
                under any food assistance program administered 
                by the Secretary that results from carrying out 
                subsections (c) and (d);
          (2) each State for the increased costs incurred by 
        the State of any milk and milk products provided under 
        the special supplemental nutrition program for women, 
        infants, and children established by section 17 of the 
        Child Nutrition Act of 1966 (42 U.S.C. 1786) that 
        results from carrying out subsections (c) and (d); and
          (3) the Commodity Credit Corporation for any 
        additional costs for a fiscal year to carry out section 
        141 as a result of increased production of milk in a 
        marketing area that results from carrying out 
        subsections (c) and (d).
    (f) Counter-Cyclical Payments From Secretary to 
Producers.--
          (1) In general.--Subject to paragraph (3), if the 
        average price for Class III milk during a month is less 
        than $14.25 per hundredweight, the Secretary shall use 
        the funds of the Commodity Credit Corporation in such 
        amounts as may be necessary to make a payment to each 
        producer for eligible production of milk in an amount 
        determined by multiplying--
                  (A) the payment rate determined under 
                paragraph (2); by
                  (B) the quantity of Class II, Class III, and 
                Class IV milk produced by the producer during 
                the month, as determined by the Secretary.
          (2) Payment rate.--The payment rate for a payment 
        made to a producer for a month under paragraph (1)(A) 
        shall equal 25 percent of the difference between--
                  (A) $14.25 per hundredweight; and
                  (B) the average price for Class III milk 
                during the month, as determined by the 
                Secretary.
          (3) Maximum amount of payments.--The total amount of 
        payments made to producers for a fiscal year under this 
        subsection shall not exceed $300,000,000.

           *       *       *       *       *       *       *


SEC. 152. PROMOTION OF UNITED STATES DAIRY PRODUCTS IN INTERNATIONAL 
                    MARKETS THROUGH DAIRY PROMOTION PROGRAM.

                     CHAPTER 2--[PEANUTS AND] SUGAR


SEC. 155. PEANUT PROGRAM.

    [(a) Quota Peanuts.--
          [(1) Availability of loans.--The Secretary shall make 
        nonrecourse loans available to producers of quota 
        peanuts.
          [(2) Loan rate.--The national average quota loan rate 
        for quota peanuts shall be $610 per ton.
          [(3) Inspection, handling, or storage.--The loan 
        amount may not be reduced by the Secretary by any 
        deductions for inspection, handling, or storage.
          [(4) Location and other factors.--The Secretary may 
        make adjustments in the loan rate for quota peanuts for 
        location of peanuts and such other factors as are 
        authorized by section 162.
          [(5) Offers from handlers.--If a producer markets a 
        quota peanut crop, meeting quality requirements for 
        domestic edible use, through the marketing association 
        loan for two consecutive marketing years and the 
        Secretary determines that a handler provided the 
        producer with a written offer, upon delivery, for the 
        purchase of the quota peanut crops at a price equal to 
        or in excess of the quota support price, the producer 
        shall be ineligible for quota price support for the 
        next marketing year. The Secretary shall establish the 
        method by which a producer may appeal a determination 
        under this paragraph regarding ineligibility for quota 
        price support.
    [(b) Additional Peanuts.--
          [(1) In general.--Subject to paragraph (2), the 
        Secretary shall make nonrecourse loans available to 
        producers of additional peanuts at such rates as the 
        Secretary finds appropriate, taking into consideration 
        the demand for peanut oil and peanut meal, expected 
        prices of other vegetable oils and protein meals, 
        and the demand for peanuts in foreign markets.
          [(2) Limitation.--The Secretary shall establish the 
        support rate on additional peanuts at a level estimated 
        by the Secretary to ensure that there are no losses to 
        the Commodity Credit Corporation on the sale or 
        disposal of the peanuts.
          [(3) Announcement.--The Secretary shall announce the 
        loan rate for additional peanuts of each crop not later 
        than February 15 preceding the marketing year for the 
        crop for which the loan rate is being determined.
    [(c) Area Marketing Associations.--
          [(1) Warehouse storage loans.--
                  [(A) In general.--In carrying out subsections 
                (a) and (b), the Secretary shall make warehouse 
                storage loans available in each of the 
                producing areas (described in section 1446.95 
                of title 7 of the Code of Federal Regulations 
                (January 1, 1989)) to a designated area 
                marketing association of peanut producers that 
                is selected and approved by the Secretary and 
                that is operated primarily for the purpose of 
                conducting the loan activities. The Secretary 
                may not make warehouse storage loans available 
                to any cooperative that is engaged in 
                operations or activities concerning peanuts 
                other than those operations and activities 
                specified in this section and section 358e of 
                the Agricultural Adjustment Act of 1938 (7 
                U.S.C. 1359a).
                  [(B) Administrative and supervisory 
                activities.--An area marketing association 
                shall be used in administrative and supervisory 
                activities relating to loans and marketing 
                activities under this section and section 358e 
                of the Agricultural Adjustment Act of 1938 (7 
                U.S.C. 1359a).
                  [(C) Association costs.--Loans made to the 
                association under this paragraph shall include 
                such costs as the area marketing association 
                reasonably may incur in carrying out the 
                responsibilities, operations, and activities of 
                the association under this section and section 
                358e of the Agricultural Adjustment Act of 1938 
                (7 U.S.C. 1359a).
          [(2) Pools for quota and additional peanuts.--
                  [(A) In general.--The Secretary shall require 
                that each area marketing association establish 
                pools and maintain complete and accurate 
                records by area and segregation for quota 
                peanuts handled under loan and for additional 
                peanuts placed under loan, except that separate 
                pools shall be established for Valencia peanuts 
                produced in New Mexico.
                  [(B) Eligibility to participate in new mexico 
                pools.--
                          [(i) In general.--Except as provided 
                        in clause (ii), in the case of the 1996 
                        and subsequent crops, Valencia peanuts 
                        not physically produced in the State of 
                        New Mexico shall not be eligible to 
                        participate in the pools of the State.
                          [(ii) Exception.--A producer of 
                        Valencia peanuts may enter Valencia 
                        peanuts that are produced in Texas into 
                        the pools of New Mexico in a quantity 
                        not greater than the average annual 
                        quantity of the peanuts that the 
                        producer entered into the New Mexico 
                        pools for the 1990 through 1995 crops.
                  [(C) Types of peanuts.--Bright hull and dark 
                hull Valencia peanuts shall be considered as 
                separate types for the purpose of establishing 
                the pools.
                  [(D) Net gains.--Net gains on peanuts in each 
                pool, unless otherwise approved by the 
                Secretary, shall be distributed only to 
                producers who placed peanuts in the pool and 
                shall be distributed in proportion to the value 
                of the peanuts placed in the pool by each 
                producer. Net gains for peanuts in each pool 
                shall consist of the following:
                          [(i) Quota peanuts.--For quota 
                        peanuts, the net gains over and above 
                        the loan indebtedness and other costs 
                        or losses incurred on peanuts placed in 
                        the pool.
                          [(ii) Additional peanuts.--For 
                        additional peanuts, the net gains over 
                        and above the loan indebtedness and 
                        other costs or losses incurred on 
                        peanuts placed in the pool for 
                        additional peanuts.
    [(d) Losses.--Losses in quota area pools shall be covered 
using the following sources in the following order of priority:
          [(1) Transfers from additional loan pools.--The 
        proceeds due any producer from any pool shall be 
        reduced by the amount of any loss that is incurred with 
        respect to peanuts transferred from an additional loan 
        pool to a quota loan pool by the producer under section 
        358-1(b)(8) of the Agricultural Adjustment Act of 1938 
        (7 U.S.C. 1358-1(b)(8)).
          [(2) Producers in same pool.--Further losses in an 
        area quota pool shall be offset by reducing the gain of 
        any producer in the pool by the amount of pool gains 
        attributed to the same producer from the sale of 
        additional peanuts for domestic and edible export use.
          [(3) Offset within area.--Further losses in an area 
        quota pool shall be offset by any gains or profits from 
        additional peanuts (other than separate type pools 
        established under subsection (c)(2)(A) for Valencia 
        peanuts produced in New Mexico) owned or controlled by 
        the Commodity Credit Corporation in that area and sold 
        for domestic edible use, in accordance with regulations 
        issued by the Secretary. This paragraph shall not apply 
        to profits or gains from a farm with 1 acre or less of 
        peanut production.
          [(4) First use of marketing assessments.--The 
        Secretary shall use funds collected under subsection 
        (g) (except funds attributable to handlers) to offset 
        further losses in area quota pools. The Secretary shall 
        transfer to the Treasury those funds collected under 
        subsection (g) and available for use under this 
        paragraph that the Secretary determines are not 
        required to cover losses in area quota pools.
          [(5) Cross compliance.--Further losses in area quota 
        pools, other than losses incurred as a result of 
        transfers from additional loan pools to quota loan 
        pools under section 358-1(b)(8) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1358-1(b)(8)), shall 
        be offset by any gains or profits from quota pools in 
        other production areas (other than separate type pools 
        established under subsection (c)(2)(A) for Valencia 
        peanuts produced in New Mexico) in such manner as the 
        Secretary shall by regulation prescribe.
          [(6) Offset generally.--If losses in an area quota 
        pool have not been entirely offset under the preceding 
        paragraphs, further losses shall be offset by any gains 
        or profits from additional peanuts (other than separate 
        type pools established under subsection (c)(2)(A) for 
        Valencia peanuts produced in New Mexico) owned or 
        controlled by the Commodity Credit Corporation and sold 
        for domestic edible use, in accordance with regulations 
        issued by the Secretary. This paragraph shall not apply 
        to profits or gains from a farm with 1 acre or less of 
        peanut production.
          [(7) Second use of marketing assessments.--The 
        Secretary shall use funds collected under subsection 
        (g) and attributable to handlers to offset further 
        losses in area quota pools. The Secretary shall 
        transfer to the Treasury those funds collected under 
        subsection (g) and available for use under this 
        paragraph that the Secretary determines are not 
        required to cover losses in area quota pools.
          [(8) Increased assessments.--If use of the 
        authorities provided in the preceding paragraphs is not 
        sufficient to cover losses in an area quota pool, the 
        Secretary shall increase the marketing assessment for 
        producers established under subsection (g) by such an 
        amount as the Secretary considers necessary to cover 
        the losses. The increased assessment shall apply only 
        to quota peanuts in the production area covered by the 
        pool. Amounts collected under subsection (g) as a 
        result of the increased assessment shall be retained by 
        the Secretary to cover losses in that pool.
    [(e) Disapproval of Quotas.--Notwithstanding any other 
provision of law, no loan for quota peanuts may be made 
available by the Secretary for any crop of peanuts with respect 
to which poundage quotas have been disapproved by producers, as 
provided for in section 358-1(d) of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1358-1(d)).
    [(f) Quality Improvement.--
          [(1) In general.--With respect to peanuts under loan, 
        the Secretary shall--
                  [(A) promote the crushing of peanuts at a 
                greater risk of deterioration before peanuts of 
                a lesser risk of deterioration;
                  [(B) ensure that all Commodity Credit 
                Corporation inventories of peanuts sold for 
                domestic edible use must be shown to have been 
                officially inspected by licensed Department 
                inspectors both as farmer stock and shelled or 
                cleaned in-shell peanuts;
                  [(C) continue to endeavor to operate the 
                peanut program so as to improve the quality of 
                domestic peanuts and ensure the coordination of 
                activities under the Peanut Administrative 
                Committee established under Marketing Agreement 
                No. 146, regulating the quality of domestically 
                produced peanuts (under the Agricultural 
                Adjustment Act (7 U.S.C. 601 et seq.), 
                reenacted with amendments by the Agricultural 
                Marketing Agreement Act of 1937); and
                  [(D) ensure that any changes made in the 
                peanut program as a result of this subsection 
                requiring additional production or handling at 
                the farm level shall be reflected as an upward 
                adjustment in the Department loan schedule.
          [(2) Exports and other peanuts.--The Secretary shall 
        require that all peanuts in the domestic and export 
        markets fully comply with all quality standards under 
        Marketing Agreement No. 146.
    [(g) Marketing Assessment.--
          [(1) In general.--The Secretary shall provide for a 
        nonrefundable marketing assessment. The assessment 
        shall be made on a per pound basis in an amount equal 
        to 1.1 percent for each of the 1994 and 1995 crops, 
        1.15 percent for the 1996 crop, and 1.2 percent for 
        each of the 1997 through 2002 crops, of the national 
        average quota or additional peanut loan rate for the 
        applicable crop.
          [(2) First purchasers.--
                  [(A) In general.--Except as provided under 
                paragraphs (3) and (4), the first purchaser of 
                peanuts shall--
                          [(i) collect from the producer a 
                        marketing assessment equal to the 
                        quantity of peanuts acquired multiplied 
                        by--
                                  [(I) in the case of each of 
                                the 1994 and 1995 crops, .55 
                                percent of the applicable 
                                national average loan rate;
                                  [(II) in the case of the 1996 
                                crop, .6 percent of the 
                                applicable national average 
                                loan rate; and
                                  [(III) in the case of each of 
                                the 1997 through 2002 crops, 
                                .65 percent of the applicable 
                                national average loan rate;
                          [(ii) pay, in addition to the amount 
                        collected under clause (i), a marketing 
                        assessment in an amount equal to the 
                        quantity of peanuts acquired multiplied 
                        by .55 percent of the applicable national 
                        average loan rate; and
                          [(iii) remit the amounts required 
                        under clauses (i) and (ii) to the 
                        Commodity Credit Corporation in a 
                        manner specified by the Secretary.
                  [(B) Definition of first purchaser.--In this 
                subsection, the term ``first purchaser'' means 
                a person acquiring peanuts from a producer 
                except that in the case of peanuts forfeited by 
                a producer to the Commodity Credit Corporation, 
                the term means the person acquiring the peanuts 
                from the Commodity Credit Corporation.
          [(3) Other private marketings.--In the case of a 
        private marketing by a producer directly to a consumer 
        through a retail or wholesale outlet or in the case of 
        a marketing by the producer outside of the continental 
        United States, the producer shall be responsible for 
        the full amount of the assessment and shall remit the 
        assessment by such time as is specified by the 
        Secretary.
          [(4) Loan peanuts.--In the case of peanuts that are 
        pledged as collateral for a loan made under this 
        section, the producer portion of the assessment shall 
        be deducted from the proceeds of the loan. The 
        remainder of the assessment shall be paid by the first 
        purchaser of the peanuts. For purposes of computing net 
        gains on peanuts under this section, the reduction in 
        loan proceeds shall be treated as having been paid to 
        the producer.
          [(5) Penalties.--If any person fails to collect or 
        remit the reduction required by this subsection or 
        fails to comply with the requirements for recordkeeping 
        or otherwise as are required by the Secretary to carry 
        out this subsection, the person shall be liable to the 
        Secretary for a civil penalty up to an amount 
        determined by multiplying--
                  [(A) the quantity of peanuts involved in the 
                violation; by
                  [(B) the national average quota peanut rate 
                for the applicable crop year.
          [(6) Enforcement.--The Secretary may enforce this 
        subsection in the courts of the United States.
    [(h) Crops.--Subsections (a) through (g) shall be effective 
only for the 1996 through 2002 crops of peanuts.
    [(i) Poundage Quotas.--]

SEC. 156. SUGAR PROGRAM.

    (a) Sugarcane.--The Secretary shall make loans available to 
processors of domestically grown sugarcane at a rate equal to 
18 cents per pound for raw cane sugar.
    (b) Sugar Beets.--The Secretary shall make loans available 
to processors of domestically grown sugar beets at a rate equal 
to 22.9 cents per pound for refined beet sugar.
    (c) [Reduction in Loan Rates] Loan Rate Adjustments.--
          (1) [Reduction required] In general.--The Secretary 
        [shall] may reduce the loan rate specified in 
        subsection (a) for domestically grown sugarcane and 
        subsection (b) for domestically grown sugar beets if 
        the Secretary determines that negotiated reductions in 
        export subsidies and domestic subsidies provided for 
        sugar of other major sugar growing, producing, and 
        exporting countries in the aggregate exceed the 
        commitments made as part of the Agreement on 
        Agriculture.

           *       *       *       *       *       *       *

          [(2) Processor assurances.--The Secretary shall 
        obtain from each processor that receives a loan under 
        this section such assurances as the Secretary considers 
        adequate to ensure that the processor will provide 
        payments to producers that are proportional to the 
        value of the loan received by the processor for sugar 
        beets and sugarcane delivered by producers served by 
        the processor. The Secretary may establish appropriate 
        minimum payments for purposes of this paragraph. 156-3 
        Sec. 836(2) and (3) of the Agriculture, Rural 
        Development, Food and Drug Administration, and Related 
        Agencies Appropriations Act, 2001 (P.L. 106-387; 114 
        Stat. 1549, 1549A-62; Oct. 28, 2000) struck former 
        para. (2) and redesignated former para. (3) as para. 
        (2).]
          (2) Processor assurances.--
                  (A) In general.--The Secretary shall obtain 
                from each processor that receives a loan under 
                this section such assurances as the Secretary 
                considers adequate to ensure that the processor 
                will provide payments to producers that are 
                proportional to the value of the loan received 
                by the processor for the sugar beets and 
                sugarcane delivered by producers to the 
                processor.
                  (B) Minimum payments.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary may establish 
                        appropriate minimum payments for 
                        purposes of this paragraph.
                          (ii) Limitation.--In the case of 
                        sugar beets, the minimum payment 
                        established under clause (i) shall not 
                        exceed the rate of payment provided for 
                        under the applicable contract between a 
                        sugar beet producer and a sugar beet 
                        processor.
                (C) Bankruptcy or insolvency of processors.--
                          (i) In general.--The Secretary shall 
                        use funds of the Commodity Credit 
                        Corporation to pay a producer of sugar 
                        beets or sugarcane loan benefits 
                        described in clause (ii) if--
                                  (I) a processor that has 
                                entered into a contract with 
                                the producer has filed for 
                                bankruptcy protection or is 
                                otherwise insolvent;
                                  (II) the assurances under 
                                subparagraph (A) are not 
                                adequate to ensure compliance 
                                with subparagraph (A), as 
                                determined by the Secretary;
                                  (III) the producer demands 
                                payments of loan benefits 
                                required under this section 
                                from the processor; and
                                  (IV) the Secretary determines 
                                that the processor is unable to 
                                provide the loan benefits 
                                required under this section.
                          (ii) Amount.--The amount of loan 
                        benefits provided to a producer under 
                        clause (i) shall be equal to--
                                  (I) the maximum amount of 
                                loan benefits the producer 
                                would have been entitled to 
                                receive under this section 
                                during the 30-day period 
                                beginning on the final 
                                settlement date provided for in 
                                the contract between the 
                                producer and processor; less
                                  (II) any such benefits 
                                received by the producer from 
                                the processor.
                          (iii) Administration.--On payment to 
                        a producer under clause (i), the 
                        Secretary shall--
                                  (I) be subrogated to all 
                                claims of the producer against 
                                the processor and other persons 
                                responsible for nonpayment; and
                                  (II) have authority to pursue 
                                such claims as are necessary to 
                                recover the benefits not paid 
                                to the producer by the 
                                processor.
          (3) Administration.--The Secretary may not impose or 
        enforce any prenotification or similar administrative 
        requirement that has the effect of preventing a 
        processor from electing to forfeit the loan collateral 
        on the maturity of the loan.
          [(1) Sugarcane.--Effective for marketings of raw cane 
        sugar during the 1996 through 2003 fiscal years, the 
        first processor of sugarcane shall remit to the 
        Commodity Credit Corporation a nonrefundable marketing 
        assessment in an amount equal to--
                  [(A) in the case of marketings during fiscal 
                year 1996, 1.1 percent of the loan rate 
                established under subsection (a) per pound of 
                raw cane sugar, processed by the processor from 
                domestically produced sugarcane or sugarcane 
                molasses, that has been marketed (including the 
                transfer or delivery of the sugar to a refinery 
                for further processing or marketing); and
                  [(B) in the case of marketings during each of 
                fiscal years 1997 through 2003, 1.375 percent 
                of the loan rate established under subsection 
                (a) per pound of raw cane sugar, processed by 
                the processor from domestically produced 
                sugarcane or sugarcane molasses, that has been 
                marketed (including the transfer or delivery of 
                the sugar to a refinery for further processing 
                or marketing).
          [(2) Sugar beets.--Effective for marketings of beet 
        sugar during the 1996 through 2003 fiscal years, the 
        first processor of sugar beets shall remit to the 
        Commodity Credit Corporation a nonrefundable marketing 
        assessment in an amount equal to--
                  [(A) in the case of marketings during fiscal 
                year 1996, 1.1794 percent of the loan rate 
                established under subsection (a) per pound of 
                beet sugar, processed by the processor from 
                domestically produced sugar beets or sugar beet 
                molasses, that has been marketed; and
                  [(B) in the case of marketings during each of 
                fiscal years 1997 through 2003, 1.47425 percent 
                of the loan rate established under subsection 
                (a) per pound of beet sugar, processed by the 
                processor from domestically produced sugar 
                beets or sugar beet molasses, that has been 
                marketed.
          [(3) Collection.--
                  [(A) Timing.--A marketing assessment required 
                under this subsection shall be collected on a 
                monthly basis and shall be remitted to the 
                Commodity Credit Corporation not later than 
                30 days after the end of each month. Any cane 
                sugar or beet sugar processed during a fiscal year 
                that has not been marketed by September 30 of the 
                year shall be subject to assessment on that date. 
                The sugar shall not be subject to a second 
                assessment at the time that it is marketed.
                  [(B) Manner.--Subject to subparagraph (A), 
                marketing assessments shall be collected under 
                this subsection in the manner prescribed by the 
                Secretary and shall be nonrefundable.
          [(4) Penalties.--If any person fails to remit the 
        assessment required by this subsection or fails to 
        comply with such requirements for recordkeeping or 
        otherwise as are required by the Secretary to carry out 
        this subsection, the person shall be liable to the 
        Secretary for a civil penalty up to an amount 
        determined by multiplying--
                  [(A) the quantity of cane sugar or beet sugar 
                involved in the violation; by
                  [(B) the loan rate for the applicable crop of 
                sugarcane or sugar beets.
          [(5) Enforcement.--The Secretary may enforce this 
        subsection in a court of the United States.
    [(g) Forfeiture Penalty.--
          [(1) In general.--A penalty shall be assessed on the 
        forfeiture of any sugar pledged as collateral for a 
        nonrecourse loan under this section.
          [(2) Cane sugar.--The penalty for cane sugar shall be 
        1 cent per pound.
          [(3) Beet sugar.--The penalty for beet sugar shall 
        bear the same relation to the penalty for cane sugar as 
        the marketing assessment for sugar beets bears to the 
        marketing assessment for sugarcane.
          [(4) Effect of forfeiture.--Any payments owed 
        producers by a processor that forfeits any sugar 
        pledged as collateral for a nonrecourse loan shall be 
        reduced in proportion to the loan forfeiture penalty 
        incurred by the processor.]
    (f) Loans for In-Process Sugar.--
          (1) Definition of in-process sugars and syrups.--In 
        this subsection, the term ``in-process sugars and 
        syrups'' does not include raw sugar, liquid sugar, 
        invert sugar, invert syrup, or other finished product 
        that is otherwise eligible for a loan under subsection 
        (a) or (b).
          (2) Availability.--The Secretary shall make 
        nonrecourse loans available to processors of a crop of 
        domestically grown sugarcane and sugar beets for in-
        process sugars and syrups derived from the crops.
          (3) Loan rate.--The loan rate shall be equal to 80 
        percent of the loan rate applicable to raw cane sugar 
        or refined beet sugar, as determined by the Secretary 
        on the basis of the source material for the in-process 
        sugars and syrups.
          (4) Further processing on forfeiture.--
                  (A) In general.--As a condition of the 
                forfeiture of in-process sugars and syrups 
                serving as collateral for a loan under 
                paragraph (2), the processor shall, within such 
                reasonable time period as the Secretary may 
                prescribe and at no cost to the Commodity 
                Credit Corporation, convert the in-process 
                sugars and syrups into raw cane sugar or 
                refined beet sugar of acceptable grade and 
                quality for sugars eligible for loans under 
                subsection (a) or (b).
                  (B) Transfer to corporation.--Once the in-
                process sugars and syrups are fully processed 
                into raw cane sugar or refined beet sugar, the 
                processor shall transfer the sugar to the 
                Commodity Credit Corporation.
                  (C) Payment to processor.--On transfer of the 
                sugar, the Secretary shall make a payment to 
                the processor in an amount equal to the amount 
                obtained by multiplying--
                          (i) the difference between--
                                  (I) the loan rate for raw 
                                cane sugar or refined beet 
                                sugar, as appropriate; and
                                  (II) the loan rate the 
                                processor received under 
                                paragraph (3); by
                          (ii) the quantity of sugar 
                        transferred to the Secretary.
          (5) Loan conversion.--If the processor does not 
        forfeit the collateral as described in paragraph (4), 
        but instead further processes the in-process sugars and 
        syrups into raw cane sugar or refined beet sugar and 
        repays the loan on the in-process sugars and syrups, 
        the processor may obtain a loan under subsection (a) or 
        (b) for the raw cane sugar or refined beet sugar, as 
        appropriate.
    (g) Avoiding Forfeitures; Corporation Inventory 
Disposition.--
          (1) In general.--Subject to subsection (e)(3), to the 
        maximum extent practicable, the Secretary shall operate 
        the program established under this section at no cost 
        to the Federal Government by avoiding the forfeiture of 
        sugar to the Commodity Credit Corporation.
          (2) Inventory disposition.--
                  (A) In general.--To carry out paragraph (1), 
                the Commodity Credit Corporation may accept 
                bids to obtain raw cane sugar or refined beet 
                sugar in the inventory of the Commodity Credit 
                Corporation from (or otherwise make available 
                such commodities, on appropriate terms and 
                conditions, to) processors of sugarcane and 
                processors of sugar beets (acting in 
                conjunction with the producers of the sugarcane 
                or sugar beets processed by the processors) in 
                return for the reduction of production of raw 
                cane sugar or refined beet sugar, as 
                appropriate.
                  (B) Additional authority.--The authority 
                provided under this paragraph is in addition to 
                any authority of the Commodity Credit 
                Corporation under any other law.
    (h) Information Reporting.--
          (1) Duty of processors and refiners to report.--A 
        sugarcane processor, cane sugar refiner, and sugar beet 
        processor shall furnish the Secretary, on a monthly 
        basis, such information as the Secretary may require to 
        administer sugar programs, including the quantity of 
        purchases of sugarcane, sugar beets, and sugar, and 
        production, importation, distribution, and stock levels 
        of sugar.
          (2) Duty of producers to report.--
                  (A) Proportionate share states.--As a 
                condition of a loan made to a processor for the 
                benefit of a producer, the Secretary shall 
                require each producer of sugarcane located in a 
                State (other than the Commonwealth of Puerto 
                Rico) in which there are in excess of 250 
                producers of sugarcane to report, in the manner 
                prescribed by the Secretary, the sugarcane 
                yields and acres planted to sugarcane of the 
                producer.
                  (B) Other states.--The Secretary may require 
                each producer of sugarcane or sugar beets not 
                covered by paragraph (1) to report, in a manner 
                prescribed by the Secretary, the yields of, and 
                acres planted to sugarcane or sugar beets, 
                respectively, of the producer.
          (3) Duty of importers to report.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall require 
                an importer of sugars, syrups, or molasses to 
                be used for human consumption or to be used for 
                the extraction of sugar for human consumption 
                to report, in the manner prescribed by the 
                Secretary, the quantities of the products 
                imported by the importer and the sugar content 
                or equivalent of the products.
                  (B) Tariff-rate quotas.--Subparagraph (A) 
                shall not apply to sugars, syrups, or molasses 
                that are within the quantities of tariff-rate 
                quotas that are subject to the lower rate of 
                duties.
          [(2)](4) Penalty.--Any person willfully failing or 
        refusing to furnish the information, or furnishing 
        willfully any false information, shall be subject to a 
        civil penalty of not more than $10,000 for each such 
        violation.
          [(3)](5) Monthly reports.--Taking into consideration 
        the information received under [paragraph (1)] this 
        subsection, the Secretary shall publish on a monthly 
        basis composite data on production, imports, 
        distribution, and stock levels of sugar.
                          (i) Crops.--This section [(other than 
                        subsection (f))] shall be effective 
                        only for the 1996 through 2002 2006 
                        crops of sugar beets and sugarcane.

SEC. 157. STORAGE FACILITY LOANS.

    (a) In General.--Notwithstanding any other provision of law 
and as soon as practicable after the date of enactment of this 
section, the Commodity Credit Corporation shall amend part 1436 
of title 7, Code of Federal Regulations, to establish a sugar 
storage facility loan program to provide financing for 
processors of domestically-produced sugarcane and sugar beets 
to construct or upgrade storage and handling facilities for raw 
sugars and refined sugars.
    (b) Eligible Processors.--A storage facility loan shall be 
made available to any processor of domestically produced 
sugarcane or sugar beets that (as determined by the 
Secretary)--
          (1) has a satisfactory credit history;
          (2) has a need for increased storage capacity, taking 
        into account the effects of marketing allotments); and
          (3) demonstrates an ability to repay the loan.
    (c) Term of Loans.--A storage facility loan shall--
          (1) have a minimum term of 7 years; and
          (2) be in such amounts and on such terms and 
        conditions (including terms and conditions relating to 
        downpayments, collateral, and eligible facilities) as 
        are normal, customary, and appropriate for the size and 
        commercial nature of the borrower.

                           CHAPTER 3--PEANUTS

SEC. 158A. DEFINITIONS.

    In this chapter:
          (1) Counter-cyclical payment.--The term ``counter-
        cyclical payment'' means a payment made to peanut 
        producers on a farm under section 158D.
          (2) Direct payment.--The term ``direct payment'' 
        means a payment made to peanut producers on a farm 
        under section 158C.
          (3) Effective price.--The term ``effective price'' 
        means the price calculated by the Secretary under 
        section 158D for peanuts to determine whether counter-
        cyclical payments are required to be made under section 
        158D for a crop year.
          (4) Historical peanut producers on a farm.--The term 
        ``historical peanut producers on a farm'' means the 
        peanut producers on a farm in the United States that 
        produced or were prevented from planting peanuts during 
        any of the 1998 through 2001 crop years.
          (5) Income protection price.--The term ``income 
        protection price'' means the price per ton of peanuts 
        used to determine the payment rate for counter-cyclical 
        payments.
          (6) Payment acres.--The term ``payment acres'' means 
        85 percent of the peanut acres on a farm, as 
        established under section 158B, on which direct 
        payments and counter-cyclical payments are made.
          (7) Peanut acres.--The term ``peanut acres'' means 
        the number of acres assigned to a particular farm for 
        historical peanut producers on a farm pursuant to 
        section 158B(b).
          (8) Payment yield.--The term ``payment yield'' means 
        the yield assigned to a farm by historical peanut 
        producers on the farm pursuant to section 158B(b).
          (9) Peanut producer.--The term ``peanut producer'' 
        means an owner, operator, landlord, tenant, or 
        sharecropper that--
                  (A) shares in the risk of producing a crop of 
                peanuts in the United States; and
                  (B) is entitled to share in the crop 
                available for marketing from the farm or would 
                have shared in the crop had the crop been 
                produced.

SEC. 158B. PAYMENT YIELDS, PEANUT ACRES, AND PAYMENT ACRES FOR FARMS.

    (a) Payment Yields and Payment Acres.--
          (1) Average yield.--
                  (A) In general.--The Secretary shall 
                determine, for each historical peanut producer, 
                the average yield for peanuts on all farms of 
                the historical peanut producer for the 1998 
                through 2001 crop years, excluding any crop 
                year during which the producers did not produce 
                peanuts.
                  (B) Assigned yields.--If, for any of the crop 
                years referred to in subparagraph (A) in which 
                peanuts were planted on a farm by the 
                historical peanut producer, the historical 
                peanut producer has satisfied the eligibility 
                criteria established to carry out section 1102 
                of the Agriculture, Rural Development, Food and 
                Drug Administration, and Related Agencies 
                Appropriations Act, 1999 (7 U.S.C. 1421 note; 
                Public Law 105-277), the Secretary shall assign 
                to the historical peanut producer a yield for 
                the farm for the crop year equal to 65 percent 
                of the average yield for peanuts for the 
                previous 5 crop years.
          (2) Acreage average.--Except as provided in paragraph 
        (3), the Secretary shall determine, for the historical 
        peanut producer, the 4-year average of--
                  (A) acreage planted to peanuts on all farms 
                for harvest during the 1998 through 2001 crop 
                years; and
                  (B) any acreage that was prevented from being 
                planting to peanuts during the crop years 
                because of drought, flood, or other natural 
                disaster, or other condition beyond the control 
                of the historical peanut producer, as determined 
                by the Secretary.
          (3) Selection by producer.--If a county in which a 
        historical peanut producer described in paragraph (2) 
        is located is declared a disaster area during 1 or more 
        of the 4 crop years described in paragraph (2), for 
        purposes of determining the 4-year average acreage for 
        the historical peanut producer, the historical peanut 
        producer may elect to substitute, for not more than 1 
        of the crop years during which a disaster is declared--
                  (A) the State average of acreage actually 
                planted to peanuts; or
                  (B) the average of acreage for the historical 
                peanut producer determined by the Secretary 
                under paragraph (2).
          (4) Time for determinations; factors.--
                  (A) Timing.--The Secretary shall make the 
                determinations required by this subsection not 
                later than 90 days after the date of enactment 
                of this section.
                  (B) Factors.--In making the determinations, 
                the Secretary shall take into account changes 
                in the number and identity of historical peanut 
                producers sharing in the risk of producing a 
                peanut crop since the 1998 crop year, including 
                providing a method for the assignment of 
                average acres and average yield to a farm when 
                a historical peanut producer is no longer 
                living or an entity composed of historical 
                peanut producers has been dissolved.
    (b) Assignment of Yield and Acres to Farms.--
          (1) Assignment by historical peanut producers.--The 
        Secretary shall provide each historical peanut producer 
        with an opportunity to assign the average peanut yield 
        and average acreage determined under subsection (a) for 
        the historical peanut producer to cropland on a farm.
          (2) Payment yield.--The average of all of the yields 
        assigned by historical peanut producers to a farm shall 
        be considered to be the payment yield for the farm for 
        the purpose of making direct payments and counter-
        cyclical payments under this chapter.
          (3) Peanut acres.--Subject to subsection (e), the 
        total number of acres assigned by historical peanut 
        producers to a farm shall be considered to be the 
        peanut acres for the farm for the purpose of making 
        direct payments and counter-cyclical payments under 
        this chapter.
    (c) Election.--Not later than 180 days after the date of 
enactment of this section, a historical peanut producer shall 
notify the Secretary of the assignments described in subsection 
(b).
    (d) Payment Acres.--The payment acres for peanuts on a farm 
shall be equal to 85 percent of the peanut acres assigned to 
the farm.
    (e) Prevention of Excess Peanut Acres.--
          (1) Required reduction.--If the total of the peanut 
        acres for a farm, together with the acreage described 
        in paragraph (3), exceeds the actual cropland acreage 
        of the farm, the Secretary shall reduce the quantity of 
        peanut acres for the farm or contract acreage for 1 or 
        more covered commodities for the farm as necessary so 
        that the total of the peanut acres and acreage 
        described in paragraph (3) does not exceed the actual 
        cropland acreage of the farm.
          (2) Selection of acres.--The Secretary shall give the 
        peanut producers on the farm the opportunity to select 
        the peanut acres or contract acreage against which the 
        reduction will be made.
          (3) Other acreage.--For purposes of paragraph (1), 
        the Secretary shall include--
                  (A) any contract acreage for the farm under 
                subtitle B;
                  (B) any acreage on the farm enrolled in the 
                conservation reserve program or wetlands 
                reserve program under chapter 1 of subtitle D 
                of title XII of the Food Security Act of 1985 
                (16 U.S.C. 3830 et seq.); and
                  (C) any other acreage on the farm enrolled in 
                a conservation program for which payments are 
                made in exchange for not producing an 
                agricultural commodity on the acreage.
          (4) Double-cropped acreage.--In applying paragraph 
        (1), the Secretary shall take into account additional 
        acreage as a result of an established double-cropping 
        history on a farm, asdetermined by the Secretary.

SEC. 158C. DIRECT PAYMENTS FOR PEANUTS.

    (a) In General.--For each of the 2002 through 2006 fiscal 
years, the Secretary shall make direct payments to peanut 
producers on a farm with peanut acres under section 158B and a 
payment yield for peanuts under section 158B.
    (b) Payment Rate.--The payment rate used to make direct 
payments with respect to peanuts for a fiscal year shall be 
equal to $0.018 per pound.
    (c) Payment Amount.--The amount of the direct payment to be 
paid to the peanut producers on a farm for peanuts for a fiscal 
year shall be equal to the product obtained by multiplying--
          (1) the payment rate specified in subsection (b);
          (2) the payment acres on the farm; by
          (3) the payment yield for the farm.
    (d) Time for Payment.--
          (1) In general.--The Secretary shall make direct 
        payments--
                  (A) in the case of the 2002 fiscal year, 
                during the period beginning December 1, 2001, 
                and ending September 30, 2002; and
                  (B) in the case of each of the 2003 through 
                2006 fiscal years, not later than September 30 
                of the fiscal year.
          (2) Advance payments.--
                  (A) In general.--At the option of the peanut 
                producers on a farm, the Secretary shall pay 50 
                percent of the direct payment for a fiscal year 
                for the producers on the farm on a date 
                selected by the peanut producers on the farm.
                  (B) Selected date.--The selected date for a 
                fiscal year shall be on or after December 1 of 
                the fiscal year.
                  (C) Subsequent fiscal years.--The peanut 
                producers on a farm may change the selected 
                date for a subsequent fiscal year by providing 
                advance notice to the Secretary.
          (3) Repayment of advance payments.--If any peanut 
        producer on a farm that receives an advance direct 
        payment for a fiscal year ceases to be eligible for a 
        direct payment before the date the direct payment would 
        have been made by the Secretary under paragraph (1), 
        the peanut producer shall be responsible for repaying 
        the Secretary the full amount of the advance payment.

SEC. 158D. COUNTER-CYCLICAL PAYMENTS FOR PEANUTS.

    (a) In General.--For each of the 2002 through 2006 crops of 
peanuts, the Secretary shall make counter-cyclical payments 
with respect to peanuts if the Secretary determines that the 
effective price for peanuts is less than the income protection 
price for peanuts.
    (b) Effective Price.--For purposes of subsection (a), the 
effective price for peanuts is equal to the total of--
          (1) the greater of--
                  (A) the national average market price 
                received by peanut producers during the 12-
                month marketing year for peanuts, as determined 
                by the Secretary; or
                  (B) the national average loan rate for a 
                marketing assistance loan for peanuts under 
                section 158G in effect for the 12-month 
                marketing year for peanuts under this chapter; 
                and
          (2) the payment rate in effect for peanuts under 
        section 158C for the purpose of making direct payments 
        with respect to peanuts.
    (c) Income Protection Price.--For purposes of subsection 
(a), the income protection price for peanuts shall be equal to 
$520 per ton.
    (d) Payment Amount.--The amount of the counter-cyclical 
payment to be paid to the peanut producers on a farm for a crop 
year shall be equal to the product obtained by multiplying--
          (1) the payment rate specified in subsection (e);
          (2) the payment acres on the farm; by
          (3) the payment yield for the farm.
    (e) Payment Rate.--The payment rate used to make counter-
cyclical payments with respect to peanuts for a crop year shall 
be equal to the difference between--
          (1) the income protection price for peanuts; and
          (2) the effective price determined under subsection 
        (b) for peanuts.
    (f) Time for Payments.--
          (1) In general.--The Secretary shall make counter-
        cyclical payments to peanut producers on a farm under 
        this section for a crop of peanuts as soon as 
        practicable after determining under subsection (a) that 
        the payments are required for the crop year.
          (2) Partial payment.--
                  (A) In general.--At the option of the 
                Secretary, the peanut producers on a farm may 
                elect to receive up to 40 percent of the 
                projected counter-cyclical payment to be made 
                under this section for a crop of peanuts on 
                completion of the first 6 months of the 
                marketing year for the crop, as determined by 
                the Secretary.
                  (B) Repayment.--The peanut producers on a 
                farm shall repay to the Secretary the amount, 
                if any, by which the payment received by 
                producers on the farm (including any partial 
                payments) exceeds the counter-cyclical payment 
                the producers on the farm are eligible for 
                under this section.

SEC. 158E. PRODUCER AGREEMENTS.

    (a) Compliance With Certain Requirements.--
          (1) Requirements.--Before the peanut producers on a 
        farm may receive direct payments or counter-cyclical 
        payments with respect to the farm, the peanut producers 
        on the farm shall agree during the fiscal year or crop 
        year, respectively, for which the payments are 
        received, in exchange for the payments--
                  (A) to comply with applicable highly erodible 
                land conservation requirements under subtitle B 
                of title XII of the Food Security Act of 1985 
                (16 U.S.C. 3811 et seq.);
                  (B) to comply with applicable wetland 
                conservation requirements under subtitle C of 
                title XII of that Act (16 U.S.C. 3821 et seq.);
                  (C) to comply with the planting flexibility 
                requirements of section 158F; and
                  (D) to use a quantity of the land on the farm 
                equal to the peanut acres, for an agricultural 
                or conserving use, and not for a 
                nonagricultural commercial or industrial use, 
                as determined by the Secretary.
          (2) Compliance.--The Secretary may promulgate such 
        regulations as the Secretary considers necessary to 
        ensure peanut producer compliance with paragraph (1).
    (b) Foreclosure.--
          (1) In general.--The Secretary shall not require the 
        peanut producers on a farm to repay a direct payment or 
        counter-cyclical payment if a foreclosure has occurred 
        with respect to the farm and the Secretary determines 
        that forgiving the repayment is appropriate to provide 
        fair and equitable treatment.
          (2) Compliance with requirements.--
                  (A) In general.--This subsection shall not 
                void the responsibilities of the peanut 
                producers on a farm under subsection (a) if the 
                peanut producers on the farm continue or resume 
                operation, or control, of the farm.
                  (B) Applicable requirements.--On the 
                resumption of operation or control over the 
                farm by the peanut producers on the farm, the 
                requirements of subsection (a) in effect on the 
                date of the foreclosure shall apply.
    (c) Transfer or Change of Interest in Farm.--
          (1) Termination.--Except as provided in paragraph 
        (5), a transfer of (or change in) the interest of the 
        peanut producers on a farm in peanut acres for which 
        direct payments or counter-cyclical payments are made 
        shall result in the termination of the payments with 
        respect to the peanut acres, unless the transferee or 
        owner of the acreage agrees to assume all obligations 
        under subsection (a).
          (2) Effective date.--The termination takes effect on 
        the date of the transfer or change.
          (3) Transfer of payment base and yield.--The 
        Secretary shall not impose any restriction on the 
        transfer of the peanut acres or payment yield of a farm 
        as part of a transfer or change described in paragraph 
        (1).
          (4) Modification.--At the request of the transferee 
        or owner, the Secretary may modify the requirements of 
        subsection (a) if the modifications are consistent with 
        the purposes of subsection (a), as determined by the 
        Secretary.
          (5) Exception.--If a peanut producer entitled to a 
        direct payment or counter-cyclical payment dies, 
        becomes incompetent, or is otherwise unable to receive 
        the payment, the Secretary shall make the payment, in 
        accordance with regulations promulgated by the 
        Secretary.
    (d) Acreage Reports.--As a condition on the receipt of any 
benefits under this chapter, the Secretary shall require the 
peanut producers on a farm to submit to the Secretary acreage 
reports for the farm.
    (e) Tenants and Sharecroppers.--In carrying out this 
chapter, the Secretary shall provide adequate safeguards to 
protect the interests of tenants and sharecroppers.
    (f) Sharing of Payments.--The Secretary shall provide for 
the sharing of direct payments and counter-cyclical payments 
among the peanut producers on a farm on a fair and equitable 
basis.

SEC. 158F. PLANTING FLEXIBILITY.

    (a) Permitted Crops.--Subject to subsection (b), any 
commodity or crop may be planted on peanut acres on a farm.
    (b) Limitations and Exceptions Regarding Certain 
Commodities.--
          (1) Limitations.--The planting of the following 
        agricultural commodities shall be prohibited on peanut 
        acres:
                  (A) Fruits.
                  (B) Vegetables (other than lentils, mung 
                beans, and dry peas).
                  (C) In the case of the 2003 and subsequent 
                crops of an agricultural commodity, wild rice.
          (2) Exceptions.--Paragraph (1) shall not limit the 
        planting of an agricultural commodity specified in 
        paragraph (1)--
                  (A) in any region in which there is a history 
                of double-cropping of peanuts with agricultural 
                commodities specified in paragraph (1), as 
                determined by the Secretary, in which case the 
                double-cropping shall be permitted;
                  (B) on a farm that the Secretary determines 
                has a history of planting agricultural 
                commodities specified in paragraph (1) on 
                peanut acres, except that direct payments and 
                counter-cyclical payments shall be reduced by 
                an acre for each acre planted to the 
                agricultural commodity; or
                  (C) by the peanut producers on a farm that 
                the Secretary determines has an established 
                planting history of a specific agricultural 
                commodity specified in paragraph (1), except 
                that--
                          (i) the quantity planted may not 
                        exceed the average annual planting 
                        history of the agricultural commodity 
                        by the peanut producers on the farm 
                        during the 1996 through 2001 crop years 
                        (excluding any crop year in which no 
                        plantings were made), as determined by 
                        the Secretary; and
                          (ii) direct payments and counter-
                        cyclical payments shall be reduced by 
                        an acre for each acre planted to the 
                        agricultural commodity.

SEC. 158G. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR 
                    PEANUTS.

    (a) Nonrecourse Loans Available.--
          (1) Availability.--For each of the 2002 through 2006 
        crops of peanuts, the Secretary shall make available to 
        peanut producers on a farm nonrecourse marketing 
        assistance loans for peanuts produced on the farm.
          (2) Terms and conditions.--The loans shall be made 
        under terms and conditions that are prescribed by the 
        Secretary and at the loan rate established under 
        subsection (b).
          (3) Eligible production.--The producers on a farm 
        shall be eligible for a marketing assistance loan under 
        this section forany quantity of a peanuts produced on 
the farm.
          (4) Treatment of certain commingled commodities.--In 
        carrying out this section, the Secretary shall make 
        loans to peanut producers on a farm that would be 
        eligible to obtain a marketing assistance loan but for 
        the fact the peanuts owned by the peanut producers on 
        the farm are commingled with other peanuts of other 
        producers in facilities unlicensed for the storage of 
        agricultural commodities by the Secretary or a State 
        licensing authority, if the peanut producers on a farm 
        obtaining the loan agree to immediately redeem the loan 
        collateral in accordance with section 158E.
          (5) Options for obtaining loan.--A marketing 
        assistance loan under this subsection, and loan 
        deficiency payments under subsection (e), may be 
        obtained at the option of the peanut producers on a 
        farm through--
                  (A) a designated marketing association of 
                peanut producers that is approved by the 
                Secretary;
                  (B) the Farm Service Agency; or
                  (C) a loan servicing agent approved by the 
                Secretary.
    (b) Loan Rate.--The loan rate for a marketing assistance 
loan for peanuts under subsection (a) shall be equal to $400 
per ton.
    (c) Term of Loan.--
          (1) In general.--A marketing assistance loan for 
        peanuts under subsection (a) shall have a term of 9 
        months beginning on the first day of the first month 
        after the month in which the loan is made.
          (2) Extensions prohibited.--The Secretary may not 
        extend the term of a marketing assistance loan for 
        peanuts under subsection (a).
    (d) Repayment Rate.--The Secretary shall permit peanut 
producers on a farm to repay a marketing assistance loan for 
peanuts under subsection (a) at a rate that is the lesser of--
          (1) the loan rate established for peanuts under 
        subsection (b), plus interest (as determined by the 
        Secretary); or
          (2) a rate that the Secretary determines will--
                  (A) minimize potential loan forfeitures;
                  (B) minimize the accumulation of stocks of 
                peanuts by the Federal Government;
                  (C) minimize the cost incurred by the Federal 
                Government in storing peanuts; and
                  (D) allow peanuts produced in the United 
                States to be marketed freely and competitively, 
                both domestically and internationally.
    (e) Loan Deficiency Payments.--
          (1) Availability.--The Secretary may make loan 
        deficiency payments available to the peanut producers 
        on a farm that, although eligible to obtain a marketing 
        assistance loan for peanuts under subsection (a), agree 
        to forgo obtaining the loan for the peanuts in return 
        for payments under this subsection.
          (2) Amount.--A loan deficiency payment under this 
        subsection shall be obtained by multiplying--
                  (A) the loan payment rate determined under 
                paragraph (3) for peanuts; by
                  (B) the quantity of the peanuts produced by 
                the peanut producers on the farm, excluding any 
                quantity for which the producers on the farm 
                obtain a loan under subsection (a).
          (3) Loan payment rate.--For purposes of this 
        subsection, the loan payment rate shall be the amount 
        by which--
                  (A) the loan rate established under 
                subsection (b); exceeds
                  (B) the rate at which a loan may be repaid 
                under subsection (d).
          (4) Time for payment.--The Secretary shall make a 
        payment under this subsection to the peanut producers 
        on a farm with respect to a quantity of peanuts as of 
        the earlier of--
                  (A) the date on which the peanut producers on 
                the farm marketed or otherwise lost beneficial 
                interest in the peanuts, asdetermined by the 
Secretary; or
                  (B) the date the peanut producers on the farm 
                request the payment.
    (f) Compliance With Conservation Requirements.--As a 
condition of the receipt of a marketing assistance loan under 
subsection (a), the peanut producers on a farm shall comply 
during the term of the loan with--
          (1) applicable highly erodible land conservation 
        requirements under subtitle B of title XII of the Food 
        Security Act of 1985 (16 U.S.C. 3811 et seq.); and
          (2) applicable wetland conservation requirements 
        under subtitle C of title XII of that Act (16 U.S.C. 
        3821 et seq.).
    (g) Reimbursable Agreements and Payment of Expenses.--To 
the maximum extent practicable, the Secretary shall implement 
any reimbursable agreements or provide for the payment of 
expenses under this chapter in a manner that is consistent with 
the implementation of the agreements or payment of the expenses 
for other commodities.

SEC. 158H. QUALITY IMPROVEMENT.

    (a) Official Inspection.--
          (1) Mandatory inspection.--All peanuts placed under a 
        marketing assistance loan under section 158G shall be 
        officially inspected and graded by a Federal or State 
        inspector.
          (2) Optional inspection.--Peanuts not placed under a 
        marketing assistance loan may be graded at the option 
        of the peanut producers on a farm.
    (b) Termination of Peanut Administrative Committee.--The 
Peanut Administrative Committee established under Marketing 
Agreement No. 1436, which regulates the quality of domestically 
produced peanuts under the Agricultural Adjustment Act (7 
U.S.C. 601 et seq.), reenacted with amendments by the 
Agricultural Marketing Agreement Act of 1937, is terminated.
    (c) Establishment of Peanut Standards Board.--
          (1) In general.--The Secretary shall establish a 
        Peanut Standards Board for the purpose of assisting in 
        the establishment of quality standards with respect to 
        peanuts.
          (2) Composition.--The Secretary shall appoint members 
        to the Board that, to the maximum extent practicable, 
        reflect all regions and segments of the peanut 
        industry.
          (3) Duties.--The Board shall assist the Secretary in 
        establishing quality standards for peanuts.
    (d) Crops.--This section shall apply beginning with the 
2002 crop of peanuts.

           *       *       *       *       *       *       *


                       Subtitle E--Administration

SEC. 161. ADMINISTRATION.

           *       *       *       *       *       *       *


    (d) Regulations.--Not later than 90 days after the date of 
enactment of this title, the Secretary and the Commodity Credit 
Corporation, as appropriate, shall issue such regulations as 
are necessary to implement this title. The issuance of the 
regulations 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 know as the ``Paperwork Reduction Act'').
    (e) Adjustment Authority Related to Uruguay Round 
Compliance.--If the Secretary determines that expenditures 
under subtitles A through D that are subject to the total 
allowable domestic support levels under the Uruguay Round 
Agreements (as defined in section 2 of the Uruguay Round 
Agreements Act (19 U.S.C. 3501)), as in effect on the date of 
enactment of this subsection, will exceed the allowable levels 
for any applicable reporting period, the Secretary may make 
adjustments in the amount of the expenditures to ensure that 
the expenditures do not exceed, but are not less than, the 
allowable levels.

           *       *       *       *       *       *       *


SEC. 163. COMMODITY CREDIT CORPORATION INTEREST RATE.

    (a) In General.--Notwithstanding any other provision of 
law, the monthly Commodity Credit Corporation interest rate 
applicable to loans provided for agricultural commodities by 
the Corporation shall be 100 basis points greater than the rate 
determined under the applicable interest rate formula in effect 
on October 1, 1995.
    (b) Sugar.--For purposes of this section, raw cane sugar, 
refined beet sugar, and in-process sugar eligible for a loan 
under section 156 shall not be considered an agricultural 
commodity.

           *       *       *       *       *       *       *


SEC. 171. SUSPENSION AND REPEAL OF PERMANENT PRICE SUPPORT AUTHORITY.

    (a) Agricultural Adjustment Act of 1938.--
          (1) Suspensions.--The following provisions of the 
        Agricultural Adjustment Act of 1938 shall not be 
        applicable to the 1996 through [2002] 2006 crops of 
        loan commodities, peanuts, and sugar and shall not be 
        applicable to milk during the period beginning on the 
        date of enactment of this title and ending on December 
        31, 2002 2006:
                  (A) Parts II through V of subtitle B of title 
                III (7 U.S.C. 1326-1351).
                  (B) Subsections (a) through (j) of section 
                358 (7 U.S.C. 1358).
                  (C) Subsections (a) through (h) of section 
                358a (7 U.S.C. 1358a).
                  (D) Subsections (a), (b), (d), and (e) of 
                section 358d (7 U.S.C. 1359).
                  [(E) Part VII of subtitle B of title III (7 
                U.S.C. 1359aa-1359jj).]
                  [(F)] (E) In the case of peanuts, part I of 
                subtitle C of title III (7 U.S.C. 1361-1368).
                  [(G)] (F) In the case of upland cotton, 
                section 377 (7 U.S.C. 1377).
                  [(H)] (G) Subtitle D of title III (7 U.S.C. 
                1379a-1379j).
                  [(I)] (H) Title IV (7 U.S.C. 1401-1407).
          (2) Reports and records.--
    (b) Agricultural Act of 1949.--
          (1) Suspensions.--The following provisions of the 
        Agricultural Act of 1949 shall not be applicable to the 
        1996 through [2002] 2006 crops of loan commodities, 
        peanuts, and sugar and shall not be applicable to milk 
        during the period beginning on the date of enactment of 
        this title and ending on December 31, [2002] 2006:
                  (A) Section 101 (7 U.S.C. 1441).
                  (B) Section 103(a) (7 U.S.C. 1444(a)).
                  (C) Section 105 (7 U.S.C. 1444b).
                  (D) Section 107 (7 U.S.C. 1445a).
                  (E) Section 110 (7 U.S.C. 1445e).
                  (F) Section 112 (7 U.S.C. 1445g).
                  (G) Section 115 (7 U.S.C. 1445k).
                  (H) Section 201 (7 U.S.C. 1446).
                  (I) Title III (7 U.S.C. 1447-1449).
                  (J) Title IV (7 U.S.C. 1421-1433d), other 
                than sections 404, 412, and 416 (7 U.S.C. 1424, 
                1429, and 1431).
                  (K) Title V (7 U.S.C. 1461-1469).
                  (L) Title VI (7 U.S.C. 1471-1471j).
          (2) Repeals.--The following provisions of the 
        Agricultural Act of 1949 are repealed:
                  (A) Section 101B (7 U.S.C. 1441-2).
                  (B) Section 103B (7 U.S.C. 1444-2).
                  (C) Section 105B (7 U.S.C. 1444f).
                  (D) Section 107B (7 U.S.C. 1445-3a).
                  (E) Section 108B (7 U.S.C. 1445c-3).
                  (F) Section 113 (7 U.S.C. 1445h).
                  (G) Subsections (b) and (c) of section 114 (7 
                U.S.C. 1445j).
                  (H) Sections 205, 206, and 207 (7 U.S.C. 
                1446f, 1446g, and 1446h).
                  (I) Sections 406 and 427 (7 U.S.C. 1426 and 
                1433f).
          (3) Potential price support for rice.--
    (c) Suspension of Certain Quota Provisions.--The joint 
resolution entitled ``A joint resolution relating to corn and 
wheat marketing quotas under the Agricultural Adjustment Act of 
1938, as amended'', approved May 26, 1941 (7 U.S.C. 1330 and 
1340), shall not be applicable to the crops of wheat planted 
for harvest in the calendar years 1996 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 188. TERMINATION OF COMMISSION.

    The Commission shall terminate on submission of the final 
report required by section 184.

             Subtitle H--Miscellaneous Commodity Provisions

[SEC. 191. OPTIONS PILOT PROGRAM.

    [(a) Pilot Programs Authorized.--Until December 31, 2002, 
the Secretary of Agriculture may conduct a pilot program for 1 
or more agricultural commodities supported under this title to 
ascertain whether futures and options contracts can provide 
producers with reasonable protection from the financial risks 
of fluctuations in price, yield, and income inherent in 
theproduction and marketing of the commodities. The pilot program shall 
be an alternative to other related programs of the Department of 
Agriculture.
    [(b) Distribution of Pilot Program.--For each agricultural 
commodity included in the pilot program, the Secretary may 
operate the pilot program in not more than 300 counties, except 
that not more than 25 of the counties may be located in any 1 
State. The pilot program for a commodity shall not be operated 
in any county for more than 3 of the 1996 through 2002 calendar 
years.
    [(c) Eligible Participants.--In operating the pilot 
program, the Secretary may enter into contract with a producer 
who--
          [(1) is eligible for a production flexibility 
        contract, a marketing assistance loan, or other 
        assistance under this title;
          [(2) volunteers to participate in the pilot program 
        during any calendar year in which a county in which the 
        farm of the producer is located is included in the 
        pilot program;
          [(3) operates a farm located in a county selected for 
        the pilot program; and
          [(4) meets such other eligibility requirements as the 
        Secretary may establish.
    [(d) Notice to Producers.--The Secretary shall provide 
notice to each producer participating in the pilot program 
that--
          [(1) the participation of the producer is voluntary; 
        and
          [(2) neither the United States, the Commodity Credit 
        Corporation, the Federal Crop Insurance Corporation, 
        the Department of Agriculture, nor any other Federal 
        agency is authorized to guarantee that participants in 
        the pilot program will be better or worse off 
        financially as a result of participation in the pilot 
        program than the producer would have been if the 
        producer had not participated in the pilot program.
    [(e) Contracts.--The Secretary shall set forth in each 
contract under the pilot program the terms and conditions for 
participation in the pilot program and the notice required by 
subsection (d).
    [(f) Eligible Markets.--Trades for futures and options 
contracts under the pilot program shall be carried out on 
commodity futures and options markets designated as contract 
markets under the Commodity Exchange Act (7 U.S.C. 1 et seq.).
    [(g) Recordkeeping.--A producer participating in the pilot 
program shall compile, maintain, and submit (or authorize the 
compilation, maintenance, and submission) of such documentation 
as the regulations governing the pilot program require.
    [(h) Use of Commodity Credit Corporation.--The Secretary 
shall fund and operate the pilot program through the Commodity 
Credit Corporation, except that the amount of Commodity Credit 
Corporation funds used to carry out this section shall not 
exceed, to the maximum extent practicable, $9,000,000 for 
fiscal year 2001, $15,000,000 for fiscal year 2002, and 
$2,000,000 for fiscal year 2003. To the maximum extent 
practicable, the Secretary shall operate the pilot program in a 
budget neutral manner.
    [(i) Conforming Repeal.--]

SEC. 191. COMMODITY PURCHASES.

    (a) In General.--To purchase agricultural commodities under 
this section, the Secretary shall use funds of the Commodity 
Credit Corporation in an amount equal to--
          (1) for each of fiscal years 2002 and 2003, 
        $130,000,000, of which not less than $100,000,000 shall 
        be used for the purchase of specialty crops;
          (2) for fiscal year 2004, $150,000,000, of which not 
        less than $120,000,000 shall be used for the purchase 
        of specialty crops;
          (3) for fiscal year 2005, $170,000,000, of which not 
        less than $140,000,000 shall be used for the purchase 
        of specialty crops;
          (4) for fiscal year 2006, $200,000,000, of which not 
        lessthan $170,000,000 shall be used for the purchase of 
specialty crops;
          (5) for fiscal year 2007, $0.
    (b) Other Purchases.--The Secretary shall ensure that 
purchases of agricultural commodities under this section are in 
addition to purchases by the Secretary under any other law.
    (c) Purchases by Department of Defense for School Lunch 
Program.--The Secretary shall provide not less than $50,000,000 
for each fiscal year of the funds made available under 
subsection (a) to the Secretary of Defense to purchase fresh 
fruits and vegetables for distribution to schools and service 
institutions in accordance with section 6(a) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1755(a)) in a 
manner prescribed by the Secretary of Agriculture.
    (d) Purchases for Emergency Food Assistance Program.--The 
Secretary shall use not less than $40,000,000 for each fiscal 
year of the funds made available under subsection (a) to 
purchase agricultural commodities for distribution under the 
Emergency Food Assistance Act of 1983 (7 U.S.C. 7501 et seq.).

           *       *       *       *       *       *       *


[SEC. 193. CROP INSURANCE.

    [(a) Catastrophic Risk Protection.--
          [(1) Single delivery.--
          [(2) Waiver of mandatory linkage.--
          [(3) Special rule for 1996.--
                  [(A) Effective period.--This paragraph shall 
                apply only to the 1996 crop year.
                  [(B) Availability.--During a period of not 
                less than 2 weeks, but not more than 4 weeks, 
                beginning on the date of enactment of this 
                title, the Secretary shall provide producers 
                with an opportunity to obtain catastrophic risk 
                protection insurance under section 508(b) of 
                the Federal Crop Insurance Act (7 U.S.C. 
                1508(b)) for a spring-planted crop, and limited 
                additional coverage for malting barley under 
                the Malting Barley Price and Quality 
                Endorsement. The Federal Crop Insurance 
                Corporation may attach such limitations and 
                restrictions on obtaining insurance during this 
                period as the Corporation considers necessary 
                to maintain the actuarial soundness of the crop 
                insurance program.
                  [(C) Attachment.--Insurance coverage under 
                any policy obtained under this paragraph during 
                the extended sales period shall not attach 
                until 10 days after the application.
                  [(D) Cancellation.--During the extended 
                period, a producer may cancel a catastrophic 
                risk protection policy if--
                          [(i) the policy is a continuation of 
                        a policy that was obtained for a 
                        previous crop year; and
                          [(ii) the cancellation request is 
                        made before the acreage reporting date 
                        for the policy for the 1996 crop year.
    [(b) Crop Insurance Pilot Project.--
          [(1) Coverage.--The Secretary of Agriculture shall 
        develop and administer a pilot project for crop 
        insurance coverage that indemnifies crop losses due to 
        a natural disaster such as insect infestation or 
        disease.
          [(2) Actuarial soundness.--A pilot project under this 
        paragraph shall be actuarially sound, as determined by 
        the Secretary and administered at no net cost.
          [(3) Duration.--A pilot project under this paragraph 
        shall be of two years' duration.
    [(c) Crop Insurance for Nursery Crops.--
    [(d) Marketing Windows.--
    [(e) Funding.--
    [(f) Limitation on Multiple Benefits for Same Loss.--]

SEC. 193. HARD WHITE WHEAT INCENTIVE PAYMENTS.

    (a) In General.--For the period of crop years 2003 through 
2005, the Secretary shall use $40,000,000 of funds of the 
Commodity Credit Corporation to provide incentive payments to 
producers of hard white wheat to ensure that hard white wheat, 
produced on a total of not more than 2,000,000 acres, meets 
minimum quality standards established by the Secretary.
    (b) Application.--The amounts payable to producers in the 
form of payments under this section shall be determined through 
the submission of bids by producers in such manner as the 
Secretary may prescribe.
    (c) Demand for Wheat.--To be eligible to obtain a payment 
under this section, a producer shall demonstrate to the 
Secretary the availability of buyers and end-users for the 
wheat that is the covered by the payment.

           *       *       *       *       *       *       *


                  AGRICULTURAL ADJUSTMENT ACT OF 1938

    [[Part VII was made inapplicable to the 1996 through 2002 
crops of sugar.]

      [PART VII--MARKETING QUOTAS--SUGAR AND CRYSTALLINE FRUCTOSE]


           PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR

SEC. 359. DEFINITIONS.

    In this part:
          (1) Mainland state.--The term ``mainland State'' 
        means a State other than an offshore State.
          (2) Offshore state.--The term ``offshore State'' 
        means a sugarcane producing State located outside of 
        the continental United States.
          (3) State.--Notwithstanding section 301, the term 
        ``State'' means--
                  (A) a State;
                  (B) the District of Columbia; and
                  (C) the Commonwealth of Puerto Rico.
          (4) United States.--The term ``United States'', when 
        used in a geographical sense, means all of the States.
[Part VII was made inapplicable to the 1996 through 2002 crops 
of sugar by sec. 171(a)(1)(E) of the Agricultural Market 
Transition Act, P.L. 104-127, 110 Stat. 937, April 4, 1996.

[SEC. 359A. INFORMATION REPORTING.

    [(a) Duty of Processors, Refiners and Manufacturers To 
Report.--
          [(1) Processors and refiners.--All sugarcane 
        processors, cane sugar refiners, and sugar beet 
        processors shall furnish the Secretary, on a monthly 
        basis, such information as the Secretary may require to 
        administer sugar programs, including the quantity of 
        purchases of sugarcane, sugar beets, and sugar, and 
        production, importation, distribution, and stock levels 
        of sugar.
          [(2) Manufacturers of crystalline fructose.--All 
        manufacturers of crystalline fructose from corn 
        (hereafter in this part referred to as ``crystalline 
        fructose'') shall furnish the Secretary, on a monthly 
        basis, such information as the Secretary may require 
        with respect to the manufacturer's distribution of 
        crystalline fructose.
    [(b) Duty of Producers To Report.--The Secretary may 
require a producer of sugarcane or sugar beets to report, in 
the manner prescribed by the Secretary, the producer's 
sugarcane or sugar beet yields and acres planted to sugarcane 
or sugar beets, respectively.
    [(c) Penalty.--Any person willfully failing or refusing to 
furnish the information, or furnishing willfully any false 
information, shall be subject to a civil penalty of not more 
than $10,000 for each such violation.
    [(d) Monthly Reports.--Taking into consideration the 
information received under subsection (a), the Secretary shall 
publish on a monthly basis composite data on production, 
imports, distribution, and stock levels of sugar and composite 
data on distributions of crystalline fructose.]

SEC. 359B. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR [AND CRYSTALLINE 
                    FRUCTOSE].

    (a) Sugar Estimates.--
          (1) In general.--[Before] Not later than August 1 
        before the beginning of each of the fiscal years [1992 
        through 1998] 2002 through 2006, the Secretary shall 
        estimate--
          (2) Exclusion.--The estimates under this subsection 
        shall not apply to sugar imported for the production of 
        polyhydric alcohol or to any sugar refined and 
        reexported in refined form or in products containing 
        sugar.
                  (A) the quantity of sugar that will be 
                consumed in the United States during the fiscal 
                year [(other than sugar imported for the 
                production of polyhydric alcohol or to be 
                refined and reexported in refined form or in 
                sugar containing products) and the quantity of 
                sugar that would provide for reasonable 
                carryover stocks];
                  (B) the quantity of sugar that would provide 
                for reasonable carryover stocks;
                  [(B)] (C) the quantity of sugar that will be 
                available from carry-in stocks [or from 
                domestically-produced sugarcane and sugar 
                beets] for consumption in the United States 
                during the year; [and]
                  (D) the quantity of sugar that will be 
                available from the domestic processing of 
                sugarcane and sugar beets; and
                  [(C)] (E) the [quantity of sugar] quantity of 
                sugars, syrups, and molasses that will be 
                imported for human consumption or to be used 
                for the extraction of sugar for human 
                consumption in the United States during the 
                [year] year, whether such articles are under a 
                tarriff-rate quota or are in excess or outside 
                of a tarriff rate quota. [(other than sugar 
                imported for the production of polyhydric 
                alcohol or to be refined and reexported in a 
                refined form or in sugar containing products), 
                based on the difference between--
                          [(i) the sum of the quantity of 
                        estimated consumption and reasonable 
                        carryover stocks; and
                          [(ii) the quantity of sugar estimated 
                        to be available from domestically-
                        produced sugarcane and sugar beets and 
                        from carry-in stocks.
          [(2)] (3) [Quarterly reestimates] Reestimates.--The 
        Secretary shall make quarterly reestimates of sugar 
        consumption, stocks, production, and imports for a 
        fiscal year as necessary, but no later than the 
        beginning of each of the second through fourth quarters 
        of the fiscal year.
    (b) Sugar Allotments.--
          [(1) In general.--For any fiscal year in which the 
        Secretary estimates, under subsection (a)(1)(C), that 
        imports of sugar for consumption in the United States 
        (other than sugar imported for the production of 
        polyhydric alcohol or to be refined and reexported in 
        refined form or in sugar containing products) will be 
        less than 1,250,000 short tons, raw value, the 
        Secretary shall establish for that year appropriate 
        allotments under section 359c for the marketing by 
        processors of sugar processed from domestically-
        produced sugarcane and sugar beets, at a level that the 
        Secretary estimates will result in imports of sugar of 
        not less than 1,250,000 short tons, raw value, for that 
        year.]
          (1) In general.--By the beginning of each fiscal 
        year, the Secretary shall establish for that fiscal 
        year appropriate allotments under section 359c for the 
        marketing by processors of sugar processed from sugar 
        beets and from domestically-produced sugarcane at a 
        level that the Secretary estimates will result in no 
        forfeitures of sugar to the Commodity Credit 
        Corporation under the loan program for sugar 
        established under section 156 of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7251).''; and
          (2) Products.--The Secretary may include sugar 
        products, whose majority content is sucrose [or 
        crystalline fructose] for human consumption, derived 
        from sugarcane, sugar beets, molasses or sugar in the 
        allotments under paragraph (1) if the Secretary 
        determines it to be appropriate for purposes of this 
        part.
    [(c) Crystalline Fructose Allotments.--For any fiscal year 
in which the Secretary establishes allotments for the marketing 
of sugar under section 359c, the Secretary shall establish for 
that year appropriate allotments for the marketing by 
manufacturers of crystalline fructose manufactured from corn, 
at a total level not to exceed the equivalent of 200,000 tons 
of sugar, raw value, during the fiscal year, in a manner that 
is fair, efficient, and equitable to manufacturers.]
    [(d)] (c) Prohibitions.--
          (1) In general.--During any fiscal year or portion 
        thereof for which marketing allotments have been 
        established, no processor of sugar beets or sugarcane 
        shall market a quantity ofsugar in excess of the 
allocation established for such processor, except to enable another 
processor to fulfill an allocation established for such other processor 
or to facilitate the exportation of such sugar.
          [(2) Crystalline fructose.--At any time crystalline 
        fructose allotments are in effect for manufacturers 
        under subsection (c), no manufacturer may market 
        crystalline fructose in excess of the manufacturer's 
        allotment. No restrictions or allotments shall be 
        established on the marketings of any liquid fructose 
        produced from corn.]
          [(3)] (2) Civil penalty.--Any processor who knowingly 
        violates paragraph (1) [or manufacturer who knowingly 
        violates paragraph (2)] shall be liable to the 
        Commodity Credit Corporation for a civil penalty in an 
        amount equal to 3 times the United States market value, 
        at the time of the commission of the violation, of that 
        quantity of sugar [or crystalline fructose] involved in 
        the violation.
          [(4)] (3) Definition of market.--For purposes of this 
        part, the term ``market'' shall mean to sell or 
        otherwise dispose of in commerce in the United States 
        (including, with respect to any integrated processor 
        and refiner, the movement of raw cane sugar into the 
        refining process).

           *       *       *       *       *       *       *


SEC. 359C. ESTABLISHMENT OF FLEXIBLE MARKETING ALLOTMENTS.

    (a) In General.--The Secretary shall establish flexible 
marketing allotments for sugar for any fiscal year in which the 
allotments are required under section 359b(b) in accordance 
with this section.
    (b) Overall Allotment Quantity.--
          (1) In general.--The Secretary shall establish the 
        overall quantity of sugar to be allotted for the fiscal 
        year (hereafter in this part referred to as the 
        ``overall allotment quantity'') by deducting from the 
        sum of the estimated sugar consumption and reasonable 
        carryover stocks (at the end of the fiscal year) for 
        the fiscal year, as determined under section 359b(a)--
                  (A) [1,250,000] 1,532,000 short tons, raw 
                value; and
                  (B) carry-in stocks of sugar, including sugar 
                in Commodity Credit Corporation inventory.
          (2) Adjustment.--The Secretary shall adjust the 
        overall allotment quantity [to the maximum extent 
        practicable] to avoid the forfeiture of sugar to the 
        Commodity Credit Corporation.
    [(c) Allotment.--The overall allotment quantity for the 
fiscal year shall be allotted among--
          [(1) sugar derived from sugar beets; and
          [(2) sugar derived from sugarcane.]
    (c) Marketing Allotment for Sugar Derived From Sugar Beets 
and Sugar Derived From Sugarcane.--The overall allotment 
quantity for the fiscal year shall be allotted between--
          (1) sugar derived from sugar beets by establishing a 
        marketing allotment for a fiscal year at a quantity 
        equal to the product of multiplying the overall 
        allotment quantity for the fiscal year by 54.35 
        percent; and
          (2) sugar derived from sugarcane by establishing a 
        marketing allotment for a fiscal year at a quantity 
        equal to the product of multiplying the overall 
        allotment quantity for the fiscal year by 45.65 
        percent.'';
    [(d) Percentage Factors.--
          [(1) In general.--The Secretary shall establish 
        percentage factors for the overall beet sugar and cane 
        sugar allotments applicable for a fiscal year. The 
        Secretary shall establish the percentage factors in a 
        fair and equitable manner on the basis of past 
        marketings of sugar (considering for such purposes 
themarketings of sugar processed from sugarcane and sugar beets of any 
or all of the 1985 through 1989 crops), processing and refining 
capacity, and the ability of processors to market the sugar covered 
under the allotments.
          [(2) Publication.--The Secretary shall publish these 
        percentage factors in the Federal Register, along with 
        a description of the Secretary's reasons for 
        establishing the factors, as provided in section 
        359h(c).]
    (d) Filling Cane Sugar and Beet Sugar Allotments.--
          (1) Cane sugar.--Each marketing allotment for cane 
        sugar established under this section may only be filled 
        with sugar processed from domestically grown sugarcane.
          (2) Beet sugar.--Each marketing allotment for beet 
        sugar established under this section may only be filled 
        with sugar domestically processed from sugar beets.
    [(e) Marketing Allotment.--The marketing allotment for 
sugar derived from sugarcane and the marketing allotment for 
sugar derived from sugar beets for a fiscal year, in each case, 
shall be a quantity equal to the product of multiplying the 
overall allotment quantity for the fiscal year by the 
percentage factor established by the Secretary under subsection 
(d)(1) for the allotment.]
    [(f)] (e) State Cane Sugar Allotments.--[The allotment]
          (1) In general.--The allotment for sugar derived from 
        sugarcane shall be further allotted, among [the 5] the 
        States in the United States in which sugarcane is 
        produced, after a hearing (if requested by the affected 
        sugarcane processors and growers) and on such notice as 
        the Secretary by regulation may prescribe, in a fair 
        and equitable manner [on the basis of past marketings 
        of sugar (considering for such purposes the average of 
        marketings of sugar processed from sugarcane in the 2 
        highest years of production from each State from the 
        1985 through 1989 crops), processing capacity, and the 
        ability of processors to market the sugar covered under 
        the allotments.] as provided in this subsection and 
        section 359d (a)(2)(A)(iv).
    (f) Filling Cane Sugar Allotments.--Except as provided in 
section 359e, a State cane sugar allotment established under 
subsection (e) for a fiscal year may be filled only with sugar 
processed from sugarcane grown in the State covered by the 
allotment.
          (2) Offshore allotment.--
                  (A) Collectively.--Prior to the allotment of 
                sugar derived from sugarcane to any other 
                State, 325,000 short tons, raw value shall be 
                allotted to the offshore States.
                  (B) Individually.--The collective offshore 
                State allotment provided for under subparagraph 
                (A) shall be further allotted among the 
                offshore States in which sugarcane is produced, 
                after a hearing (if requested by the affected 
                sugarcane processors and growers) and on such 
                notice as the Secretary by regulation may 
                prescribe, in a fair and equitable manner on 
                the basis of--
                          (i) past marketings of sugar, based 
                        on the average of the 2 highest years 
                        of production of raw cane sugar from 
                        the 1996 through 2000 crops;
                          (ii) the ability of processors to 
                        market the sugar covered under the 
                        allotments for the crop year; and
                          (iii) past processings of sugar from 
                        sugarcane based on the 3-year average 
                        of the 1998 through 2000 crop years.
          (3) Mainland allotment.--The allotment for sugar 
        derived from sugarcane, less the amount provided for 
        under paragraph (2), shall be allotted among the 
        mainland States in the United States in which sugarcane 
        is produced, after a hearing (if requested by the 
        affected sugarcane processors and growers) and on such 
        notice as the Secretary by regulation may prescribe, in 
        a fair and equitable manner on the basis of--
                  (A) past marketings of sugar, based on the 
                average of the 2 highest years of production of 
                raw cane sugar from the 1996 through 2000 
                crops;
                  (B) the ability of processors to market the 
                sugar covered under the allotments for the crop 
                year; and
                  (C) past processings of sugar from sugarcane, 
                based on the 3 crop years with the greatest 
                processings (in the mainland States 
                collectively) during the 1991 through 2000 crop 
                years.
    (g) Adjustment of Marketing Allotments.--
          (1) In general.--The Secretary shall, based on 
        reestimates under section [359b(a)(2)--
                  [(A) adjust upward or downward marketing 
                allotments established under subsections (a) 
                through (f) in a fair and equitable manner;
                  [(B) establish marketing allotments for the 
                fiscal year or any portion of such fiscal year; 
                or
                  [(C) suspend the allotments,]
        359b(a)(3), adjust upward or downward marketing 
        allotments in a fair and equitable manner as the 
        Secretary determines appropriate, to reflect changes in 
        estimated sugar consumption, stocks, production, or 
        imports.
          (2) Allocation to processors.--In the case of any 
        increase or decrease in an allotment, each allocation 
        to a processor of the allotment under section 359d, and 
        each proportionate share established with respect to 
        the allotment under section [359f(b)] 359f(c), shall be 
        increased or decreased by the same percentage that the 
        allotment is increased or decreased.
          (3) [Reductions] Carry-over of reductions.--Whenever 
        a marketing allotment for a fiscal year is required to 
        be reduced during the fiscal year under this 
        subsection, if at the time of the reduction the 
        quantity of sugar marketed, including sugar pledged as 
        collateral for a [price support] nonrecourse loan under 
        section [206 of the Agricultural Act of 1949 (7 U.S.C. 
        1446g), for the fiscal year at the time of the 
        reduction by any individual processor covered by the 
        allotment] 156 of the Federal Agriculture Improvement 
        and Reform Act of 1996 (7 U.S.C. 7251), exceeds the 
        processor's reduced allocation, the allocation of an 
        allotment[, if any,] next established for the processor 
        shall be reduced by the quantity of the excess sugar 
        marketed.
    [(h) Filling Cane Sugar and Beet Sugar Allotments.--Each 
marketing allotment for cane sugar established under this 
section may only be filled with sugar processed from 
domestically grown sugarcane, and each marketing allotment for 
beet sugar established under this section may only be filled 
with sugar processed from domestically grown sugar beets.
    (h) Suspension of Allotments.--Whenever the Secretary 
estimates or reestimates under section 359b(a), or has reason 
to believe, that imports of sugars, syrups or molasses for 
human consumption or to be used for the extraction of sugar for 
human consumption, whether under a tariff-rate quota or in 
excess or outside of a tariff-rate quota, will exceed 1,532,000 
short tons (raw value equivalent), and that the imports would 
lead to a reduction of the overall allotment quantity, the 
Secretary shall suspend the marketing allotments established 
under this section until such time as the imports have been 
restricted, eliminated, or reduced to or below the level of 
1,532,000 short tons (raw value equivalent).

           *       *       *       *       *       *       *


SEC. 359D. ALLOCATION OF MARKETING

           *       *       *       *       *       *       *


          (1) Allocation to processors.--Whenever marketing 
        allotments are established for a fiscal year under 
        section 359c, in order to afford all interested persons 
        an equitable opportunity to market sugar under an 
        allotment, the Secretary shall allocate each such 
        allotment among the processors covered by the 
        allotment.
          (2) Hearing and notice.--
                  (A) Cane sugar.--[The Secretary] (i) In 
                general.--The Secretary shall make allocations 
                for cane sugar after a hearing, if requested by 
                [interested parties] the affected sugar cane 
                processors and growers and on such notice as 
                the Secretary by regulation may prescribe, in 
                such manner and in such quantities as to 
                provide a fair, efficient, and equitable 
                distribution of the allocations [by taking into 
                consideration processing capacity, past 
                marketings of sugar, and the ability of each 
                processor to market sugar covered by that 
                portion of the allotment allocated.] under this 
                subparagraph. Each such allocation shall be 
                subject to adjustment under section 359c(g).
                  (ii) Multiple processor states.--Except as 
                provided in clauses (iii) and (iv), the 
                Secretary shall allocate the allotment for cane 
                sugar among multiple cane sugar processors in a 
                single Statebased on--
                          (I) past marketings of sugar, based 
                        on the average of the 2 highest years 
                        of production of raw cane sugar from 
                        among the 1996 through 2000 crops;
                          (II) the ability of processors to 
                        market sugar covered by that portion of 
                        the allotment allocated for the crop 
                        year; and
                          (III) past processings of sugar from 
                        sugarcane, based on the average of the 
                        3 highest years of production during 
                        the 1996 through 2000 crop years.
                  (iii) Talisman processing facility.--In the 
                case of allotments under clause (ii) 
                attributable to the operations of the Talisman 
                processing facility before the date of 
                enactment of this clause, the Secretary shall 
                allocate the allotment among processors in the 
                State under clause (i) in accordance with the 
                agreements of March 25 and 26, 1999, between 
                the affected processors and the Secretary of 
                the Interior.
                  (iv) Proportionate share states.--In the case 
                of States subject to section 359f(c), the 
                Secretary shall allocate the allotment for cane 
                sugar among multiple cane sugar processors in a 
                single state based on--
                          (I) past marketings of sugar, based 
                        on the average of the 2 highest years 
                        of production of raw cane sugar from 
                        among the 1997 through 2001 crop years;
                          (II) the ability of processors to 
                        market sugar covered by that portion of 
                        the allotments allocated for the crop 
                        year; and
                          (III) past processings of sugar from 
                        sugarcane, based on the average of the 
                        2 highest crop years of crop production 
                        during the 1997 through 2001 crop 
                        years.
                  (v) New entrants.--
                          (I) In general.--Notwithstanding 
                        clauses (ii) and (iv), the Secretary, 
                        on application of any processor that 
                        begins processing sugarcane on or after 
                        the date of enactment of this clause, 
                        and after a hearing (if requested by 
                        the affected sugarcane processors and 
                        growers) and on such notice as the 
                        Secretary by regulation may prescribe, 
                        may provide the processor with an 
                        allocation that provides a fair, 
                        efficient and equitable distribution of 
                        the allocations from the allotment for 
                        the State in which the processor is 
                        located.
                          (II) Proportionate share states.--In 
                        the case of proportionate share States, 
                        the Secretary shall establish 
                        proportionate shares in a quantity 
                        sufficient to produce the sugarcane 
                        required to satisfy the allocations.
                          (III) Limitation.--The allotment for 
                        a new processor under this clause shall 
                        not exceed 50,000 short tons (raw 
                        value).
                  (vi) Transfer of ownership.--Except as 
                otherwise provided in section 359f(c)(8), if a 
                sugarcane processor is sold or otherwise 
                transferred to another owner, or closed as part 
                of an affiliated corporate group processing 
                consolidation, the Secretary shall transfer the 
                allotment allocation for the processor to the 
                purchaser, new owner, or successor in interest, 
                as applicable, of the processor.
                  (B) Beet sugar.--[The Secretary]
                          (i) In general.--The Secretary shall 
                        make allocations for beet sugar after a 
                        hearing, if requested by [interested 
                        parties] the affected sugar beet 
                        processors and growers and on such 
                        notice as the Secretary by regulation 
                        may prescribe, in such manner and in 
                        such quantities as to provide a fair, 
                        efficient, and equitable distribution 
                        of the allocations by taking into 
                        consideration [processing capacity, 
                        past marketings of sugar (considering 
                        for the purposes the marketings of 
                        sugar processed from sugar beets of any 
                        or all of the 1985 through 1989 crops), 
                        and the ability of each processor to 
                        market sugar covered by that portion of 
                        the allotment allocated] the marketings 
                        of sugar processed from sugar beets of 
                        any or all of the 1996 through 2000 
                        crops, and such other factors as the 
                        Secretary may consider appropriate 
                        after consultation with the affected 
                        sugar beet processors and growers. Each 
                        such allocation shall be subject to 
                        adjustment under section 359c(g).
    (b) Filling Cane Sugar Allotments.--Except as otherwise 
provided in section 359e, a State cane sugar allotment 
established under section 359c(f) for a fiscal year may be 
filledonly with sugar processed from sugarcane grown in the 
State covered by the allotment.
                          (ii) New processors.--In the case of 
                        any processor that has started 
                        processing sugar beets after January 1, 
                        1996, the Secretary shall provide the 
                        processor with an allocation that 
                        provides a fair, efficient and 
                        equitable distribution of the 
                        allocations.

           *       *       *       *       *       *       *

                  (B) if after the reassignments the deficit 
                cannot be completely eliminated, the Secretary 
                shall reassign the estimated quantity of the 
                deficit proportionately to the allotments for 
                other cane sugar States, depending on the 
                capacity of each other State to fill the 
                portion of the deficit to be assigned to it, 
                with the reassigned quantity to each State to 
                be allocated among processors in that State in 
                proportion to the allocations of the 
                processors; [and]
                  (C) if after the reassignments, the deficit 
                cannot be completely eliminated, the Secretary 
                shall reassign the estimated quantity of the 
                deficit to the sale of any inventories of sugar 
                held by the Commodity Credit Corporation; and
                  [(C)] (D) if after the reassignments and 
                sales, the deficit cannot be completely 
                eliminated, the Secretary shall reassign the 
                remainder to imports.
          (2) Beet sugar.--If the Secretary determines that a 
        sugar beet processor who has been allocated a share of 
        the beet sugar allotment will be unable to market that 
        allocation--
                  (A) the Secretary first shall reassign the 
                estimated quantity of the deficit to the 
                allotments for other sugar beet processors, 
                depending on the capacity of each other 
                processor to fill the portion of the deficit to 
                be assigned to it and taking into account the 
                interests of producers served by the 
                processors; [and]
                  (B) if after the reassignments, the deficit 
                cannot be completely eliminated, the Secretary 
                shall [reassign the remainder to imports.] use 
                the estimated quantity of the deficit for the 
                sale of any inventories of sugar held by the 
                Commodity Credit Corporation; and
                  (C) if after the reassignments and sales, the 
                deficit cannot be completely eliminated, the 
                Secretary shall reassign the remainder to 
                imports.

           *       *       *       *       *       *       *

          (3) Corresponding increase.--The allocation of each 
        processor receiving a reassigned quantity of an 
        allotment under this subsection for a fiscal year shall 
        be increased to reflect the reassignment.

SEC. 359F. PROVISIONS APPLICABLE TO PRODUCERS.

    (a) Processor Assurances.--[Whenever]
          (1) In general.--If allotments for a fiscal year are 
        allocated to processors under section 359d, the 
        Secretary shall obtain from the processors such 
        assurances as the Secretary considers adequate that the 
        allocation will be shared among producers served by the 
        processor in a fair and equitable manner that 
        adequately reflects producers' production histories. 
        [Any dispute]
          (2) Arbitration._
                  (A) In general.--Any dispute between a 
                processor and a producer, or group of 
                producers, with respect to the sharing of the 
                [processor's allocation] allocation to the 
                processor shall be resolved through arbitration 
                by the Secretary on the request of either 
                party.
                  (B) Period.--The arbitration shall, to the 
                maximum extent practicable, be (i) commenced 
                not more than 45 days after the request; and 
                (ii) shall be completed not more than 60 days 
                after the request.

           *       *       *       *       *       *       *

    (b) Sugar Beet Processing Facility Closures.--
          (1) In general.--If a sugar beet processing facility 
        is closed and the sugar beet growers that previously 
        delivered beets to the facility elect to deliver their 
        beets to another processing company, the growers may 
        petition the Secretary to modify allocations under this 
        part to allow the delivery.
          (2) Increased allocation for processing company.--The 
        Secretary may increase the allocation to the processing 
        company to which the growers elect to deliver their 
        sugar beets, with the approval of the processing 
        company, to a level that does not exceed the processing 
        capacity of the processing company, to accommodate the 
        change in deliveries.
          (3) Decreased allocation for closed company.--The 
        increased allocation shall be deducted from the 
        allocation to the company that owned the processing 
        facility that has been closed and the remaining 
        allocation shall be unaffected.
          (4) Timing.--The determinations of the Secretary on 
        the issuesraised by the petition shall be made within 
60 days after the filing of the petition.
    [(b)] (c) Proportionate Shares of Certain Allotments.--

           *       *       *       *       *       *       *

          (3) Method of determining.--For purposes of 
        determining proportionate shares for any crop of 
        sugarcane:
                  (A) The Secretary shall establish the State's 
                per-acre yield goal for a crop of sugarcane at 
                a level (not less than the average per-acre 
                yield in the State for [the preceding 5 years] 
                the two highest of the 1999, 2000, and 2001 
                crop years, as determined by the Secretary) 
                that will ensure an adequate net return per 
                pound to producers in the State, taking into 
                consideration any available production research 
                data that the Secretary considers relevant.

           *       *       *       *       *       *       *

          (7) Adjustments.--Whenever the Secretary determines 
        that, because of a natural disaster or other condition 
        beyond the control of producers that adversely affects 
        a crop of sugarcane subject to proportionate shares, 
        the amount of sugarcane produced by producers subject 
        to the proportionate shares will not be sufficient to 
        enable processors in the State to meet the State's cane 
        sugar allotment and provide a normal carryover 
        inventory of sugar, the Secretary may uniformly allow 
        producers to harvest an amount of sugarcane in excess 
        of their proportionate share, or suspend proportionate 
        shares entirely, as necessary to enable processors to 
        meet the State allotment and provide a normal carryover 
        inventory of sugar.
          (8) Processing facility closures.--
                  (A) In general.--If a sugarcane processing 
                facility subject to this subsection is closed 
                and the sugarcane growers that delivered 
                sugarcane to the facility prior to closure 
                elect to deliver their sugarcane to another 
                processing company, the growers may petition 
                the Secretary to modify allocations under this 
                part to allow the delivery.
                  (B) Increased allocation for processing 
                company.--The Secretary may increase the 
                allocation to the processing company to which 
                the growers desire to deliver the sugarcane, 
                with the approval of the processing company, to 
                a level that does not exceed the processing 
                capacity of the processing company, to 
                accommodate the change in deliveries;
                  (C) Decreased allocation for closed 
                company.--The increased allocation shall be 
                deducted from the allocation to the company 
                that owned the processing facility that has 
                been closed and the remaining allocation will 
                be unaffected.
                  (D) Timing.--The determinations of the 
                Secretary on the issues raised by the petition 
                shall be made within 60 days after the filing 
                of the petition.

           *       *       *       *       *       *       *


SEC. 359G. SPECIAL RULES.

    (a) Transfer of Acreage Base History.--For the purpose of 
establishing proportionate shares for sugarcane farms under 
section [359f] 359f(c), the Secretary, on application of any 
producer, with the written consent of all owners of a farm, may 
transfer the acreage base history of the farm to any other 
parcels of land of the applicant.
    (b) Preservation of Acreage Base History.--If for reasons 
beyond the control of a producer on a farm, the producer is 
unable to harvest an acreage of sugarcane for sugar or seed 
with respect to all or a portion of the proportionate share 
established for the farm under section [359f] 359f(c), the 
Secretary, on the application of the producer and with the 
written consent of all owners of the farm, may preserve for a 
period of not more than [3 consecutive years] 5 consecutive 
years the acreage base history of the farm to the extent of the 
proportionate share involved. The Secretary may permit the 
proportionate share to be redistributed to other farms, but no 
acreage base history for purposes of establishing acreage bases 
shall accrue to the other farms by virtue of the redistribution 
of the proportionate share.
    (c) Revisions of Allocations and Proportionate Shares.--The 
Secretary, after such notice as the Secretary by regulation may 
prescribe, may revise or amend any allocation of a marketing 
allotment under section 359d, or any proportionateshare 
established or adjusted for a farm under section [359f] 359f(c), on the 
same basis as the initial allocation or proportionate share was 
required to be established.

           *       *       *       *       *       *       *


SEC. 359J. ADMINISTRATION.

    (a) Use of Certain Agencies.--In carrying out this part, 
the Secretary may use the services of local committees of sugar 
beet or sugarcane producers, sugarcane processors, or sugar 
beet processors, State and county committees established under 
section 8(b) of the Soil Conservation and Domestic Allotment 
Act (16 U.S.C. 590h(b)), and the departments and agencies of 
the United States Government.
    (b) Use of Commodity Credit Corporation.--The Secretary 
shall use the services, facilities, funds, and authorities of 
the Commodity Credit Corporation to carry out sections 359a 
through 359i.
    [(c) Definition of United States and State.--
Notwithstanding section 301, for purposes of this part, the 
terms ``United States'' and ``State'' means the 50 States, the 
District of Columbia, and the Commonwealth of Puerto Rico.]

           *       *       *       *       *       *       *

    Sec. 361. This part shall apply to the publication and 
review of farm marketing quotas established for tobacco, corn, 
wheat, cotton, [peanuts,] and rice, established under subtitle 
B.

           *       *       *       *       *       *       *


             PART II--ADJUSTMENT OF QUOTAS AND ENFORCEMENT


SEC. 371. GENERAL ADJUSTMENTS OF QUOTAS

    [Sec. 371 is inapplicable to the 1991 through 1995 crops of 
peanuts.]
    (a) If at any time the Secretary has reason to believe that 
in the case of cotton, rice, [peanuts,] or tobacco the 
operation of farm marketing quotas in effect will cause the 
amount of such commodity which is free of marketing 
restrictions to be less than the normal supply for the 
marketing year for the commodity then current, he shall cause 
an immediate investigation to be made with respect thereto. In 
the course of such investigation due notice and opportunity for 
hearing shall be given to interested persons. If upon the basis 
of such investigation the Secretary finds the existence of such 
fact, he shall proclaim the same forthwith. He shall also in 
such proclamation specify such increase in, or termination of, 
existing quotas as he finds, on the basis of such 
investigation, is necessary to make the amount of such 
commodity which is free of marketing restrictions equal to the 
normal supply.
    (b) If the Secretary has reason to believe that, because of 
a national emergency or because of a material increase in 
export demand, any national marketing quota or acreage 
allotment for cotton, rice, [peanuts] or tobacco should be 
increased or terminated, he shall cause an immediate 
investigation to be made to determine whether the increase or 
termination is necessary to meet such emergency or increase in 
export demand. If, on the basis of such investigation, the 
Secretary finds that such increase or termination is necessary, 
he shall immediately proclaim such finding (and if he finds an 
increase is necessary, the amount of the increase found by him 
to be necessary) and thereupon such quota or allotment shall be 
increased, or shall terminate, as the case may be.

           *       *       *       *       *       *       *


SEC. 373. REPORTS AND RECORDS

    (a) This subsection shall apply to warehousemen, 
processors, and common carriers of corn, wheat, cotton, rice, 
[peanuts,] or tobacco, and all ginners of cotton, all persons 
engaged in the business of purchasing corn, wheat, cotton, 
rice, peanuts, or tobacco from producers and, all persons 
engaged in the business of redrying, prizing, or stemming 
tobacco [for producers, all producers engaged in the production 
of peanuts, 373-1 all brokers and dealers in peanuts, agents 
marketing peanuts for producers, or acquiring peanuts for 
buyers and dealers, and all peanut growers' cooperative 
associations, all persons engaged in the business of cleaning, 
shelling, crushing, and salting of peanuts and the manufacture 
of peanut products, and all persons owning or operating peanut-
picking or peanut-threshing machines.] for producers. Any such 
person shall, from time to time on request of the Secretary, 
report to the Secretary such information and keep such records 
as the Secretary finds to be necessary to enable him to carry 
out the provisions of this title. Such information shall be 
reported and suchrecords shall be kept in accordance with forms 
which the Secretary shall prescribe. For the purpose of ascertaining 
the correctness of any report made or record kept, or of obtaining 
information required to be furnished in any report, but not so 
furnished, the Secretary is hereby authorized to examine such books, 
papers, records, accounts, correspondence, contracts, documents, and 
memoranda as he has reason to believe are relevant and are within the 
control of such person. Any such person failing to make any report or 
keep any record as required by this subsection or making any false 
report or record shall be deemed guilty of a misdemeanor and upon 
conviction thereof shall be subject to a fine of not more than $500; 
and any tobacco warehouseman or dealer who fails to remedy such 
violation by making a complete and accurate report or keeping a 
complete and accurate record as required by this subsection within 
fifteen days after notice to him of such violation shall be subject to 
an additional fine of $100 for each ten thousand pounds of tobacco, or 
fraction thereof, bought or sold by him after the date of such 
violation: Provided, That such fine shall not exceed $5,000; and notice 
of such violation shall be served upon the tobacco warehouseman or 
dealer by mailing the same to him by registered mail or by certified 
mail or by posting the same at any established place of business 
operated by him, or both. The phrase ``all producers engaged in the 
production of peanuts'' was added by sec. 171(a)(2) of the Agricultural 
Market Transition Act, P.L. 104-127, 110 Stat. 937, April 4, 1996, and 
is effective only for the 1996 through 2002 crops of peanuts. For 
similar provisions effective for prior crop years, see p. 12-2 of 
Volume I--Domestic Agricultural Programs (as of Dec. 8, 1994), p. 11-2 
of Volume I--Domestic Agricultural Programs (through P.L. 101-240), and 
p. 16-2 of the Agriculture Handbook No. 476 (revised Jan. 1985).
    (b) Farmers engaged in the production of corn, wheat, 
cotton, rice, [peanuts,] or tobacco for market shall furnish 
such proof of their acreage, yield, storage, and marketing of 
the commodity in the form of records, marketing cards, reports, 
storage under seal, or otherwise as the Secretary may prescribe 
as necessary for the administration of this title.

           *       *       *       *       *       *       *

    (b) The provisions of this section shall not be applicable 
if (1) there is any marketing quota penalty due with respect to 
the marketing of the commodity from the farm acquired by the 
Federal, State, or other agency or by the owner of the farm; 
(2) any of the commodity produced on such farm has not been 
accounted for as required by the Secretary; or (3) the 
allotment next established for the farm acquired by the 
Federal, State, or other agency would have been reduced because 
of false or improper identification of the commodity produced 
on or marketed from such farm or due to a false acreage report.
    (c) This section shall not be applicable, in the case of 
[cotton] cotton and tobacco, [and peanuts,] to any farm from 
which the owner was displaced prior to 1950, in the case of 
wheat and corn, to any farm from which the owner was displaced 
prior to 1954, and in the case of rice, to any farm from which 
the owner was displaced prior to 1955. In any case where the 
cropland acquired for nonfarming purposes from an owner by an 
agency having the right of eminent domain represents less than 
15 per centum of the total cropland on the farm, the allotment 
attributable to that portion of the farm so acquired shall be 
transferred to that portion of the farm not so acquired.

           *       *       *       *       *       *       *


                  AGRICULTURAL MARKETING ACT OF 1946

           *       *       *       *       *       *       *


SEC. 272. DEFINITIONS.

    In this subtitle:
          (1) Dairy products.--The term ``dairy products'' 
        [means manufactured dairy products] means--
                  (A) manufactured dairy products that are used 
                by the Secretary to establish minimum prices 
                for Class III and Class IV milk under a Federal 
                milk marketing order issued under section 8c of 
                the Agricultural Adjustment Act (7 U.S.C. 
                608c), reenacted with amendments by the 
                Agricultural Marketing Agreement Act of 
                1937[.]; and substantially identical products 
                designated by the Secretary.
          (2) Manufacturer.--The term ``manufacturer'' means 
        any person engaged in the business of buying milk in 
        commerce for the purpose of manufacturing dairy 
        products.
          (3) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.

           *       *       *       *       *       *       *


                    FLUID MILK PROMOTION ACT OF 1990

          Subtitle H--Processor-Funded Milk Promotion Program

           *       *       *       *       *       *       *


SEC. 1999C. DEFINITIONS.

    As used in this subtitle:
          (1) Advertising.--The term ``advertising'' means any 
        advertising or promotion program involving only fluid 
        milk products and directed toward increasing the 
        general demand for fluid milk products.
          (2) Board.--The term ``Board'' means the National 
        Processor Advertising and Promotion Board established 
        under section 1999H(b).
          [(3) Fluid milk product.--The term ``fluid milk 
        product''--
                  [(A) means any of the following products in 
                fluid or frozen form: milk, skim milk, lowfat 
                milk, milk drinks, buttermilk, filled milk, and 
                milkshake and ice milk mixes containing less 
                than 20 percent total solids, including any 
                such products that are flavored, cultured, 
                modified with added nonfat milk solids, 
                concentrated (if in a consumer-type package), 
                or reconstituted; and
                  [(B) does not include evaporated or condensed 
                milk (plain or sweetened), evaporated or 
                condensed skim milk (plain or sweetened), 
                formulas specially prepared for infant feeding 
                or dietary use that are packaged in 
                hermetically sealed glass or all-metal 
                containers, any product that contains by weight 
                less than 6.5 percent nonfat milk solids, and 
                whey.]
          (3) Fluid milk product.--The term ``fluid milk 
        product'' has the meaning given the term in--
                  (A) section 1000.15 of title 7, Code of 
                Federal Regulations, subject to such amendments 
                as may be made by the Secretary; or
                  (B) any successor regulation.

           *       *       *       *       *       *       *

          (4) Fluid milk processor.--The term ``fluid milk 
        processor'' means any person who processes and markets 
        commercially more than [500,000] 3,000,000 pounds of 
        fluid milk products in consumer-type packages per 
        month.

           *       *       *       *       *       *       *


SEC. 1999O. SUSPENSION OR TERMINATION OF ORDERS.

    [(a) Termination of Order.--Any order effective under this 
subtitle shall be terminated December 31, 2002. The Secretary 
shall--]
          (1) terminate the collection of assessments under the 
        order upon such date; and
          (2) terminate activities under the order in an 
        orderly manner as soon as practicable after such date.
    [(b)] (a) Suspension or Termination by Secretary.--The 
Secretary shall, whenever the Secretary finds that the order or 
any provision of the order obstructs or does not tend to 
effectuate the declared policy of this subtitle, terminate or 
suspend the operation of the order or provision.
    [(c)] (b) Other Referenda.--

           *       *       *       *       *       *       *


SECTION 1001 OF THE FOOD SECURITY ACT OF 1985 (7 U.S.C. 1308)

           *       *       *       *       *       *       *


          (1) Limitation on direct and counter-cyclical 
        payments.--The total amount of direct payments and 
        counter-cyclical payments to a person during any fiscal 
        year may not exceed $100,000, with a separate 
        limitation for--
                  (A) all contract commodities; and
                  (B) peanuts.
          (2) Limitation on marketing loan gains and loan 
        deficiency payments.--The total amount of the payments 
        specified in paragraph (3) that a person shall be 
        entitled to receive under title I of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7201 et seq.) for 1 or more loan commodities 
        during any crop year may not exceed $150,000, with a 
        separate limitation for--
                  (A) all contract commodities;
                  (B) wool and mohair;
                  (C) honey; and
                  (D) peanuts.
          (3) Description of payments subject to limitation.--
        The payments referred to in paragraph (2) are the 
        following:
                  (A) Any gain realized by a producer from 
                repaying a marketing assistance loan under 
                section 131 or 158G(a) of the Federal 
                Agriculture Improvement and Reform Act of 1996 
                for a crop of any loan commodity or peanuts, 
                respectively, at a lower level than the 
                original loan rate established for the loan 
                commodity or peanuts under section 132 or 
                158G(d) of that Act, respectively.
                  (B) Any loan deficiency payment received for 
                a loan commodity or peanuts under section 135 or 
                158G(e) of that Act, respectively.
          (4) Definitions.--In paragraphs (1) through (3):
                          (A) Contract commodity.--The term 
                        ``contract commodity'' has the meaning 
                        given the term in section 102 of the 
                        Federal Agriculture Improvement and 
                        Reform Act of 1996 (7 U.S.C. 7202).
                          (B) Counter-cyclical payment.--The 
                        term ``counter-cyclical payment'' means 
                        a payment made under section 114 or 
                        158D of that Act.
                          (C) Direct payment.--The term 
                        ``direct payment'' means a payment made 
                        under section 113 or 158C of that Act.
                          (D) Loan commodity.--The term ``loan 
                        commodity'' has the meaning given the 
                        term in section 102 of that Act.

           *       *       *       *       *       *       *


Sec. 713a-14. Dairy export incentive program

    (a) Establishment and Operation.--During the period 
beginning 60 days after December 23, 1985, and ending on 
December 31, [2002] 2006, the Commoodity Credit Corporation 
shall establish and operate an export incentive program as 
described in this section for dairy products under section 714c 
of this title.

           *       *       *       *       *       *       *


Sec. 1308. Payment limitations: production flexibility contracts, 
                    marketing loan gains and deficiencies, contract 
                    commodities and oilseeds; regulations

    Notwithstanding any other provision of law:
          [(1) Limitation on payments under production 
        flexibility contracts.--The total amount of contract 
        payments made under the Agricultural Market Transition 
        Act [7 U.S.C.A. Sec. 7201 et seq.] to a person under 1 
        or more production flexibility contracts during any 
        fiscal year may not exceed $40,000.
          [(2) Limitation on marketing loan gains and loan 
        deficiency payments.--The total amount of the payments 
        specified in paragraph (3) that a person shall be 
        entitled to receive under the Agricultural Market 
        Transition Act [7 U.S.C.A. Sec. 7201 et seq.] for 1 or 
        more contract commodities and oilseeds during any crop 
        year may not exceed $75,000.
          [(3) Description of payments subject to limitation.--
        The payments referred to in paragraph (2) are the 
        following:
                  [(A) Any gain realized by a producer from 
                repaying a marketing assistance loan under 
                section 131 of the Agricultural Market 
                Transition Act [7 U.S.C.A. Sec. 7231] for a 
                crop of any loan commodity at a lower level 
                than the original loan rate established for the 
                loan commodity under section 132 of the Act [7 
                U.S.C.A. Sec. 7232].
                  [(B) Any loan deficiency payment received for 
                a loan commodity under section 135 of the Act 
                [7 U.S.C.A. Sec. 7235].
          [(4) Definitions.--In this title, the terms 
        ``contract commodity'', ``contract payment'', ``loan 
        commodity'', ``oilseed'', and ``production flexibility 
        contract'' have the meaning given those terms in 
        section 102 of the Agricultural Market Transition Act 
        [7 U.S.C.A. Sec. 7202].]
          (1) Limitation on direct and counter-cyclical 
        payments.--The total amount of direct payments and 
        counter-cyclical payments to a person during any fiscal 
        year may not exceed $100,000, with a separate 
        limitation for--
                  (A) all contract commodities; and
                  (B) peanuts.
          (2) Limitation on marketing loan gains and loan 
        deficiency payments.--The total amount of the payments 
        specified in paragraph (3) that a person shall be 
        entitled to receive under title I of the Federal 
        Agricultural Improvement and Reform Act of 1996 (7 
        U.S.C. 7201 et seq.) for 1 or more loan commodities 
        during any crop year may not exceed $150,000, with a 
        separate limitation for--
                  (A) all contract commodities;
                  (B) wool and mohair;
                  (C) honey; and
                  (D) peanuts.
          (3) Description of payments subject to limitation.--
        The payments referred to in paragraph (2) are the 
        following:
                  (A) Any gain realized by a producer from 
                repaying a marketing assistance loan under 
                section 131 or 158G(a) of the Federal 
                Agriculture Improvement and Reform Act of 1996 
                for a crop of any loan commodity or peanuts, 
                respectively, at a lower level than the 
                original loan rate established for the loan 
                commodity or peanuts under section 132 or 
                158G(d) of that Act, respectively.
                  (B) Any loan deficiency payment received for 
                a loan commodity or peanuts under section 135 
                or 158G(e) of that Act, respectively.
          (4) Definitions.--In paragraphs (1) through (3):
                  (A) Contract commodity.--The term ``contract 
                commodity'' has the meaning given the term in 
                section 102 of the Federal Agriculture 
                Improvement and Reform Act of 1996 (7 U.S.C. 
                7202).
                  (B) Counter-cyclical payment.--The term 
                ``counter-cyclical payment'' means a payment 
                made under section 114 or 158D of that Act.
                  (C) Direct payment.--The term ``direct 
                payment'' means a payment made under section 
                113 or 158C of that Act.
                  (D) Loan commodity.--The term ``loan 
                commodity'' has the meaning given the term in 
                section 102 of that Act.

           *       *       *       *       *       *       *


Sec. 6414. Suspension or termination of orders

    [(a) Termination of Order.--Any order effective under this 
chapter shall be terminated December 31, 2002. The Secretary 
shall--
          [(1) terminate the collection of assessments under 
        the order upon such date; and
          [(2) terminate activities under the order in an 
        orderly manner as soon as practicable after such date.]
    [(b)] (a) Suspension or Termination by Secretary.--The 
Secretary shall, whenever the Secretary finds that the order or 
any provision of the order obstructs or does not tend to 
effectuate the declared policy of this chapter, terminate or 
suspend the operation of the order or provision.
    [(c)] (b) Other Referenda.--
          (1) In general.--The Secretary may conduct at any 
        time a referendum of persons who, during a 
        representative period as determined by the Secretary, 
        have been fluid milk processors on whether to suspend 
        or terminate the order, and shall hold such a 
        referendum on request of the Board or any group of such 
        processors that among them marketed during a 
        representative period, as determined by the Secretary, 
        10 percent or more of the volume of fluid milk products 
        marketed by fluid milk processors voting in the 
        preceding referendum.

           *       *       *       *       *       *       *


Sec. 470l. Expiration of dairy farmer indemnity program

    The authority granted under sections 450j to 450l of this 
title shall expire on September 30, 2006.

           *       *       *       *       *       *       *


                         TITLE 2--CONSERVATION

        FEDERAL AGRICULTURE IMPROVEMENT AND REFORM ACT OF 1996

           *       *       *       *       *       *       *


SEC. 356. CORPORATE POWERS AND OBLIGATIONS OF THE FOUNDATION.

    (a) In General.--The Foundation--

           *       *       *       *       *       *       *

          (2) to acquire by purchase or exchange any real or 
        personal property or interest in property, except that 
        funds provided under section 360 may not be used to 
        purchase an interest in real property;
          (3) unless otherwise required by instrument of 
        transfer, to sell, donate, lease, invest, reinvest, 
        retain, or otherwise dispose of any property or income 
        from property;
          (4) on the written approval of the Secretary, to use, 
        license, or transfer symbols, slogans, and logos of the 
        Department;
          [(4)] (5) to borrow money from private sources and 
        issue bonds, debentures, or other debt instruments, 
        subject to section 359, except that the aggregate 
        amount of the borrowing and debt instruments 
        outstanding at any time may not exceed $1,000,000;
          [(5)] (6) to sue and be sued, and complain and defend 
        itself, in any court of competent jurisdiction, except 
        that a member of the Board shall not be personally 
        liable for an action in the performance of services for 
        the Board, except for gross negligence;
          [(6)] (7) to enter into a contract or other agreement 
        with an agency of State or local government, 
        educational institution, or other private organization 
        or person and to make such payments as may be necessary 
        to carry out the functions of the Foundation; and
          [(7)] (8) to do any and all acts that are necessary 
        to carry out the purposes of the Foundation.
    (d) Interests in Property.--
          (1) Interests in real property.--The Foundation may 
        acquire, hold, and dispose of lands, waters, or other 
        interests in real property by donation, gift, devise, 
        purchase, or exchange. An interest in real property 
        shall be treated, among other things, as including an 
        easement or other right for the preservation, 
        conservation, protection, or enhancement of 
        agricultural, natural, scenic, historic, scientific, 
        educational, inspirational, or recreational resources.
          (2) Gifts.--A gift, devise, or bequest may be 
        accepted by the Foundation even though the gift, 
        devise, or bequest is encumbered, restricted, or 
        subject to a beneficial interest of a private person if 
        any current or future interest in the gift, devise, or 
        bequest is for the benefit of the Foundation.
          (3) Use of symbols, slogans, and logos.--
                  (A) In general.--The Secretary may authorize 
                the Foundation to use, license, or transfer 
                symbols, slogans, and logos of the Department.
                  (B) Income.--
                          (i) In general.--All revenue received 
                        by the Foundation from the use, 
                        licensing, or transfer of symbols, 
                        slogans, and logos of the Department 
                        shall be transferred to the Secretary.
                          (ii) Conservation operations.--The 
                        Secretary shall transfer all revenue 
                        received under clause (i) to the 
                        account within the Natural Resources 
                        Conservation Service that is used to 
                        carry out conservation operations.

           *       *       *       *       *       *       *


[SEC. 386. CONSERVATION OF PRIVATE GRAZING LAND.

    [(a) Findings.--Congress finds that--
          [(1) private grazing land constitutes nearly 1/2 of 
        the non-Federal land of the United States and is basic 
        to the environmental, social, and economic stability of 
        rural communities;
          [(2) private grazing land contains a complex set of 
        interactions among soil, water, air, plants, and 
        animals;
          [(3) grazing land constitutes the single largest 
        watershed cover type in the United States and 
        contributes significantly to the quality and quantity 
        of water available for all of the many uses of the 
        land;
          [(4) private grazing land constitutes the most 
        extensive wildlife habitat in the United States;
          [(5) private grazing land can provide opportunities 
        for improved nutrient management from land application 
        of animal manures and other by-product nutrient 
        resources;
          [(6) owners and managers of private grazing land need 
        to continue to recognize conservation problems when the 
        problems arise and receive sound technical assistance 
        to improve or conserve grazing land resources to meet 
        ecological and economic demands;
          [(7) new science and technology must continually be 
        made available in a practical manner so owners and 
        managers of private grazing land may make informed 
        decisions concerning vital grazing land resources;
          [(8) agencies of the Department with private grazing 
        land responsibilities are the agencies that have the 
        expertise and experience to provide technical 
        assistance, education, and research to owners and 
        managers of private grazing land for the long-term 
        productivity and ecological health of grazing land;
          [(9) although competing demands on private grazing 
        land resources are greater than ever before, assistance 
        to private owners and managers of private grazing land 
        is currently limited and does not meet the demand and 
        basic need for adequately sustaining or enhancing the 
        private grazing land resources; and
          [(10) private grazing land can be enhanced to provide 
        many benefits to all citizens of the United States 
        through voluntary cooperation among owners and managers 
        of the land, local conservation districts, and the 
        agencies of the Department responsible for providing 
        assistance to owners and managers of land and to 
        conservation districts.
    [(b) Purpose.--It is the purpose of this section to 
authorize the Secretary to provide a coordinated technical, 
educational, and related assistance program to conserve and 
enhance private grazing land resources and provide related 
benefits to all citizens of the United States by--
          [(1) establishing a coordinated and cooperative 
        Federal, State, and local grazing conservation program 
        for management of private grazing land;
          [(2) strengthening technical, educational, and 
        related assistance programs that provide assistance to 
        owners and managers of private grazing land;
          [(3) conserving and improving wildlife habitat on 
        private grazing land;
          [(4) conserving and improving fish habitat and 
        aquatic systems through grazing land conservation 
        treatment;
          [(5) protecting and improving water quality;
          [(6) improving the dependability and consistency of 
        water supplies;
          [(7) identifying and managing weed, noxious weed, and 
        brush encroachment problems on private grazing land; 
        and
          [(8) integrating conservation planning and management 
        decisions by owners and managers of private grazing 
        land, on a voluntary basis.
    [(c) Definitions.--In this section:
          [(1) Department.--The term ``Department'' means the 
        Department of Agriculture.
          [(2) Private grazing land.--The term ``private 
        grazing land'' means private, State-owned, tribally-
        owned, and any other non-federally owned rangeland, 
        pastureland, grazed forest land, and hay land.
          [(3) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
    [(d) Private Grazing Land Conservation Assistance.--
          [(1) Assistance to grazing landowners and others.--
        Subject to the availability of appropriations for this 
        section, the Secretary shall establish a voluntary 
        program to provide technical, educational, and related 
        assistance to owners and managers of private grazing 
        land and public agencies, through local conservation 
        districts, to enable the landowners, managers, and 
        public agencies to voluntarily carry out activities 
        that are consistent with this section, including--
                  [(A) maintaining and improving private 
                grazing land and the multiple values and uses 
                that depend on private grazing land;
                  [(B) implementing grazing land management 
                technologies;
                  [(C) managing resources on private grazing 
                land, including--
                          [(i) planning, managing, and treating 
                        private grazing land resources;
                          [(ii) ensuring the long-term 
                        sustainability of private grazing land 
                        resources;
                          [(iii) harvesting, processing, and 
                        marketing private grazing land 
                        resources; and
                          [(iv) identifying and managing weed, 
                        noxious weed, and brush encroachment 
                        problems;
                  [(D) protecting and improving the quality and 
                quantity of water yields from private grazing 
                land;
                  [(E) maintaining and improving wildlife and 
                fish habitat on private grazing land;
                  [(F) enhancing recreational opportunities on 
                private grazing land;
                  [(G) maintaining and improving the aesthetic 
                character of private grazing lands; and (
                  [(H) identifying the opportunities and 
                encouraging the diversification of private 
                grazing land enterprises.
          [(2) Program elements.--
                  [(A) Funding.--If funding is provided to 
                carry out this section, it shall be provided 
                through a specific line-item in the annual 
                appropriations for the Natural Resources 
                Conservation Service.
                  [(B) Technical assistance and education.--
                Personnel of the Department trained in pasture 
                and range management shall be made available 
                under the program to deliver and coordinate 
                technical assistance and education to owners 
                and managers of private grazing land, at the 
                request of the owners and managers.
    [(e) Grazing Technical Assistance Self-Help.--
          [(1) Findings.--Congress finds that--
                  [(A) there is a severe lack of technical 
                assistance for farmers and ranchers who graze 
                livestock;
                  [(B) Federal budgetary constraints preclude 
                any significant expansion, and may force a 
                reduction of, current levels of technical 
                support; and
                  [(C) farmers and ranchers have a history of 
                cooperatively working together to address 
                common needs in the promotion of their products 
                and in the drainage of wet areas through 
                drainage districts.
          [(2) Establishment of grazing demonstration.--In 
        accordance with paragraph (3), the Secretary may 
        establish 2 grazing management demonstration districts 
        at the recommendation of the grazing lands conservation 
        initiative steering committee.
          [(3) Procedure.--
                  [(A) Proposal.--Within a reasonable time 
                after the submission of a request of an 
                organization of farmers or ranchers engaged in 
                grazing, the Secretary shall propose that a 
                grazing management district be established.
                  [(B) Funding.--The terms and conditions of 
                the funding and operation of the grazing 
                management district shall be proposed by the 
                producers.
                  [(C) Approval.--The Secretary shall approve 
                the proposal if the Secretary determines that 
                the proposal--
                          [(i) is reasonable;
                          [(ii) will promote sound grazing 
                        practices; and
                          [(iii) contains provisions similar to 
                        the provisions contained in the beef 
                        promotion and research order issued 
                        under section 4 of the Beef Research 
                        and Information Act (7 U.S.C. 2903) in 
                        effect on the date of enactment of this 
                        Act.
                  [(D) Area included.--The area proposed to be 
                included in a grazing management district shall 
                be determined by the Secretary on the basis of 
                a petition by farmers or ranchers.
                  [(E) Authorization.--The Secretary may use 
                authority under the Agricultural Adjustment Act 
                (7 U.S.C. 601 et seq.), reenacted with 
                amendments by the Agricultural Marketing 
                Agreement Act of 1937, to operate, on a 
                demonstration basis, a grazing management 
                district.
                  [(F) Activities.--The activities of a grazing 
                management district shall be scientifically 
                sound activities, as determined by the 
                Secretary in consultation with a technical 
                advisory committee composed of ranchers, 
                farmers, and technical experts.
    [(f) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section--
          [(1) $20,000,000 for fiscal year 1996;
          [(2) $40,000,000 for fiscal year 1997; and
          [(3) $60,000,000 for fiscal year 1998 and each 
        subsequent fiscal year.

           *       *       *       *       *       *       *


[SEC. 388. FARMLAND PROTECTION PROGRAM.

    [(a) In General.--The Secretary of Agriculture shall 
establish and carry out a farmland protection program under 
which the Secretary shall purchase conservation easements or 
other interests in not less than 170,000, nor more than 
340,000, acres of land with prime, unique, or other productive 
soil that is subject to a pending offer from a State or local 
government for the purpose of protecting topsoil by limiting 
nonagricultural uses of the land.
    [(b) Conservation Plan.--Any highly erodible cropland for 
which a conservation easement or other interest is purchased 
under this section shall be subject to the requirements of a 
conservation plan that requires, at the option of the 
Secretary, the conversion of the cropland to less intensive 
uses.
    [(c) Funding.--The Secretary shall use not more than 
$35,000,000 of the funds of the Commodity Credit Corporation to 
carry out this section.]

           *       *       *       *       *       *       *


                        FOOD SECURITY ACT OF 1985

           *       *       *       *       *       *       *


SEC. 1230. [ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM] 
                    COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM.

    (a) Establishment.--
          (1) In general.--During the 1996 through [2002] 2006 
        calendar years, the Secretary shall establish an 
        [environmental conservation acreage reserve program] 
        comprehensive conservation enhancement program 
        (referred to in this section as [``ECARP''] ``CCEP'') 
        to be implemented through contracts and the acquisition 
        of easements to assist owners and operators of farms 
        and ranches to conserve and enhance soil, water, and 
        related natural resources, including grazing land, 
        wetland, and wildlife habitat.
          (2) Means.--The Secretary shall carry out the [ECARP] 
        CCEP by--
                  (A) providing for the long-term protection of 
                environmentally sensitive land; and
                  (B) providing technical and financial 
                assistance to farmers and ranchers to--
                          (i) improve the management and 
                        operation of the farms and ranches; and
                          (ii) reconcile productivity and 
                        profitability with protection and 
                        enhancement of the environment.
          (3) Programs.--The [ECARP] CCEP shall consist of--
                  (A) the conservation reserve program 
                established under subchapter B;
                  (B) the wetlands reserve program established 
                under subchapter C; and
                  (C) the environmental quality incentives 
                program established under chapter 4.
    (b) Administration.--
          (1) In general.--In carrying out the [ECARP] CCEP, 
        the Secretary shall enter into contracts with owners 
        and operators and acquire interests in land through 
        easements from owners, as provided in this chapter and 
        chapter 4.
          (2) Prior enrollments.--Acreage enrolled in the 
        conservation reserve or wetlands reserve program prior 
        to the date of enactment of this paragraph shall be 
        considered to be placed into the [ECARP] CCEP. 

           *       *       *       *       *       *       *


[SEC. 1230A. GOOD FAITH RELIANCE.

    [(a) In General.--Except as provided in subsection (d) and 
notwithstanding any other provision of this chapter, the 
Secretary shall provide equitable relief to an owner or 
operator that has entered into a contract under this chapter, 
and that is subsequently determined to be in violation of the 
contract, if the owner or operator in attempting to comply with 
the terms of the contract and enrollment requirements took 
actions in good faith reliance on the action or advice of an 
authorized representative of the Secretary.
    [(b) Types of Relief.--The Secretary shall--
          [(1) to the extent the Secretary determines that an 
        owner or operator has been injured by good faith 
        reliance described in subsection (a), allow the owner 
        or operator to do any one or more of the following--
                  [(A) to retain payments received under the 
                contract;
                  [(B) to continue to receive payments under 
                the contract;
                  [(C) to keep all or part of the land covered 
                by the contract enrolled in the applicable 
                program under this chapter;
                  [(D) to reenroll all or part of the land 
                covered by the contract in the applicable 
                program under this chapter; or
                  [(E) or any other equitable relief the 
                Secretary deems appropriate; and
          [(2) require the owner or operator to take such 
        actions as are necessary to remedy any failure to 
        comply with the contract.
    [(c) Relation to Other Law.--The authority to provide 
relief under this section shall be in addition to any other 
authority provided in this or any other Act.
    [(d) Exception.--This section shall not apply to a pattern 
of conduct in which an authorized representative of the 
Secretary takes actions or provides advice with respect to an 
owner or operator that the representative and the owner or 
operator know are inconsistent with applicable law (including 
regulations).
    [(e) Applicability of Relief.--Relief under this section 
shall be available for contracts in effect on January 1, 2000 
and for all subsequent contracts.

                  [Subchapter B--Conservation Reserve]


SEC. 1231. CONSERVATION RESERVE.

    (a) In General.--Through the [2002] 2006 calendar year, the 
Secretary shall formulate and carry out the enrollment of lands 
in a conservation reserve program through the use of contracts 
to assist owners and operators of lands specified in subsection 
(b) to conserve and improve the soil and water resources of 
such lands.
    (b) Eligible Lands.--The Secretary may include in the 
program established under this subchapter--
          [(1) highly erodible croplands that--
                  [(A) if permitted to remain untreated could 
                substantially reduce the production capability 
                for future generations; or
                  [(B) can not be farmed in accordance with a 
                plan under section 1212;]
          (1) highly erodible cropland that--
                  (A)(i) if permitted to remain untreated could 
                substantially reduce the production capability 
                for future generations; or
                  (ii) cannot be farmed in accordance with a 
                conservation plan that complies with the 
                requirements of subtitle B; and
                  (B) the Secretary determines had a cropping 
                history or were considered to be planted for 3 
                of the 6 years preceding the date of enactment 
                of the Agriculture, Conservation, and Rural 
                Enhancement Act of 2001 (except for land 
                enrolled in the conservation reserve program on 
                that date);'';
          (2) marginal pasture lands converted to wetland or 
        established as wildlife habitat prior to the enactment 
        of the Food, Agriculture, Conservation, and Trade Act 
        of 1990;
          (3) marginal pasture lands to be devoted to trees in 
        or near riparian areas or for similar water quality 
        purposes, not to exceed 10 percent of the number of 
        acres of land that is placed in the conservation 
        reserve under this subchapter in each of the 1991 
        through [2002] 2006 calendar years;
                  (A) if the Secretary determines that (i) such 
                lands contribute to the degradation of water 
                quality or would pose an on-site or off-site 
                environmental threat to water quality if 
                permitted to remain in agricultural production, 
                and (ii) water quality objectives with respect 
                to such land cannot be achieved under the water 
                quality incentives program established under 
                chapter 2;

           *       *       *       *       *       *       *

    (d) Maximum Enrollment.--The Secretary may maintain up to 
[36,400,000] 40,000,000 acres in the conservation reserve at 
any one time during the 1986 through [2002] 2006 calendar years 
(including contracts extended by the Secretary pursuant to 
section 1437(c) of the Food, Agriculture, Conservation, and 
Trade Act of 1990 (Public Law 101-624; 16 U.S.C. 3831 note)).
    (e) Duration of Contract.--
          (1) In general.--For the purpose of carrying out this 
        subchapter, the Secretary shall enter into contracts of 
        not less than 10, nor more than 15, years.
          (2) Certain lands.--[In the]
                  (A) In general.--In the case of land devoted 
                to hardwood trees, shelterbelts, windbreaks, or 
                wildlife corridors under a contract entered 
                into under this subchapter after October 1, 
                1990, and land devoted to such uses under 
                contracts modified under section 1235A, the 
                owner or operator of such land may, within the 
                limitations prescribed under this section, 
                specify the duration of the contract. [The 
                Secretary]
                  (B) Existing hardwood tree contracts.--The 
                Secretary may, in the case of land that is 
                devoted to hardwood trees under a contract 
                entered into under this subchapter prior to 
                October 1, 1990, extend such contract for not 
                to exceed 5 years, as agreed to by the owner or 
                operator of such land and the Secretary.
                  (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.''.

           *       *       *       *       *       *       *

          (4) Duty of secretary.--In utilizing the authority 
        granted under this subsection, the Secretary shall 
        attempt to maximize water quality and habitat benefits 
        in such watersheds by promoting a significant level of 
        enrollment of lands within such watersheds in the 
        program under this subchapter by whatever means the 
        Secretary determines appropriate and consistent with 
        the purposes of this subchapter.
          (5) Priority.--In designating conservation priority 
        areas under paragraph (1), the Secretary shall give 
        priority to areas in which designated land would 
        facilitate the most rapid completion of projects that--
                  (A) are ongoing as of the date of the 
                application; and
                  (B) meet the purposes of the program 
                established under this subchapter.
    (g) Multi-year Grasses and Legumes.--For purposes of this 
subchapter, alfalfa and othermulti-year grasses and legumes in 
a rotation practice, approved by the Secretary, shall be considered 
agricultural commodities.
    (h) [Pilot] Program for Enrollment of Wetland and Buffer 
Acreage in Conservation Reserve.--
          (1) In general.--[During the 2001 and 2002 calendar 
        years, the Secretary shall carry out a pilot program] 
        During the 2001 and 2002 calendar years, the Secretary 
        shall carry out a program in the States of Iowa, 
        Minnesota, Montana, Nebraska, North Dakota, and South 
        Dakota under which the Secretary shall include eligible 
        acreage described in paragraph (3) in the program 
        established under this subchapter.
          (2) Participation among states.--The Secretary shall 
        ensure, to the maximum extent practicable, that owners 
        and operators in each of the States referred to in 
        paragraph (1) have an equitable opportunity to 
        participate in the [pilot] program established under 
        this subsection.

           *       *       *       *       *       *       *

                  (D) Owner or operator limitations.--
                          (i) Wetland.--The maximum size of any 
                        wetland described in subparagraph 
                        (A)(i) of an owner or operator enrolled 
                        in the conservation reserve under this 
                        subsection shall be [5 contiguous 
                        acres] 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.

           *       *       *       *       *       *       *

                  (C) Incentives.--The amounts payable to 
                owners and operators in the form of rental 
                payments under contracts entered into under 
                this subsection shall reflect incentives that 
                are provided to owners and operators to enroll 
                filterstrips in the conservation reserve under 
                section 1234[.] and
          (5) the portion of land in a field not enrolled in 
        the conservation reserve in a case in which more than 
        50 percent of the land in the field is enrolled as a 
        buffer under a program described in section 1234(i)(1), 
        if the land is enrolled as part of the buffer;
          (6) land (including land that is not cropland) 
        enrolled through continuous signup--
                  (A) 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; or
                  (B) into the conservation reserve enhancement 
                program described in a notice issued on May 27, 
                1998 (63 Fed. Reg. 28965) or a successor 
                program.

           *       *       *       *       *       *       *

                  (A) to forfeit all rights to rental payments 
                and cost sharing payments under the contract; 
                [and]
                  (B) to refund to the United States all rental 
                payments and cost sharing payments received by 
                the owner or operator, or accept such payment 
                adjustments or make such refunds as the 
                Secretary considers appropriate and consistent 
                with the objectives of this subchapter, unless 
                the transferee of such land agrees with the 
                Secretary to assume all obligations of the 
                contract; Provided however, no refund of rental 
                payments and cost sharing payments shall be 
                required when the land is purchased by or for 
                the United States Fish and Wildlife Service, or 
                the transferee and the Secretary agree to 
                modifications to such contract, where such 
                modifications are consistent with the 
                objectives of the program as determined by the 
                Secretary; and
                  (C) in the case of marginal pasture land, an 
                owner or operator shall not be required to 
                plant trees if native prairie grass may be 
                retained or restored;

           *       *       *       *       *       *       *

          (7) not to conduct any harvesting or grazing, nor 
        otherwise make commercial use of the forage, on land 
        that is subject to the contract, nor adopt any similar 
        practice specified in the contract by the Secretary as 
        a practice that would tend to defeat the purposes of 
        the contract, [except that the Secre-
        tary--] except that--
                  [(A) may] (A) the Secretary may permit--
                          (i) harvesting or grazing or other 
                        commercial use of the forage on land 
                        that is subject to the contract in 
                        response to a drought or other similar 
                        emergency; [and]

           *       *       *       *       *       *       *

                  [(B) shall] (B) the Secretary shall approve 
                not more than six projects, no more than one of 
                which may be in any State, under which land 
                subject to the contract may be harvested for 
                recovery of biomass used in energy production 
                if--

           *       *       *       *       *       *       *

                  (C) the total acres for all of the projects 
                shall not exceed 250,000 acres[.]; and
                  (D) for maintenance purposes, the Secretary 
                shall 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.
          (8) not to conduct any planting of trees on land that 
        is subject to the contract unless the contract 
        specifies that the harvesting and commercial sale of 
        trees such as Christmas trees are prohibited, nor 
        otherwise make commercial use of trees on land that is 
        subject to the contract unless it is expressly 
        permitted in the contract, nor adopt any similar 
        practice specified in the contract by the Secretary as 
        a practice that would tend to defeat the purposes of 
        the contract, except that no contract shall prohibit 
        activities consistent with customary forestry practice, 
        such as pruning, thinning, or stand improvement of 
        trees, on lands converted to forestry use;
          (9) not to adopt any practice specified by the 
        Secretary in the contract as a practice that would tend 
        to defeat the purposes of this subchapter; [and]
          (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 paragraph (5); and
          [(10)] (11) to comply with such additional provisions 
        as the Secretary determines are desirable and are 
        included in the contract to carry out this subchapter 
        or to facilitate the practical administration thereof.

           *       *       *       *       *       *       *

    (d) Alley-Cropping.--

           *       *       *       *       *       *       *

    (e) Foreclosure.--Notwithstanding any other provision of 
law, an owner or operator who is a party to a contract entered 
into under this subchapter may not be required to make 
repayments to the Secretary of amounts received under such 
contract if the land that is subject to such contract has been 
foreclosed upon and the Secretary determines that forgiving 
such repayments is appropriate in order to provide fair and 
equitable treatment. This subsection shall not void the 
responsibilities of such an owner or operator under the 
contract if such owner or operator resumes control over the 
property that is subject to the contract within the period 
specified in the contract. Upon the resumption of such control 
over the property by the owner or operator, the provisions of 
the contract in effect on the date of the foreclosure shall 
apply.
    (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.

           *       *       *       *       *       *       *

    Sec. 1234. (a) The Secretary shall provide payment for 
obligations incurred by the Secretary under a contract entered 
into under this subchapter--
          (1) with respect to any cost-sharing payment 
        obligation incurred by the Secretary, as soon as 
        possible after the obligation is incurred; and
          (2) with respect to any annual rental payment 
        obligation incurred by the Secretary--
                  (A) as soon as practicable after October 1 of 
                each calendar year; or
                  (B) at the discretion of the Secretary, at 
                any time prior to such date during the year 
                that the obligation is incurred.
    (b)(1) In making cost sharing payments to an owner or 
operator under a contract entered into under this subchapter, 
[the Secretary] Except for land enrolled under continuous 
signup or under the conservation reserve enhancement program 
described in a notice issued on May 27, 1998 (63 Fed. Reg. 
28965) (or a successor program), the Secretary shall pay 50 
percent of the cost of establishing water quality and 
conservation measures and practices required under such 
contracts for which the Secretary determines that cost-sharing 
is appropriate and in the public interest.

           *       *       *       *       *       *       *

    (h) In addition to any payment under this subchapter, an 
owner or operator may receive cost share assistance, rental 
payments, or tax benefits from a State or subdivision thereof 
for enrolling lands in the conservation reserve program.
    (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.

           *       *       *       *       *       *       *


SEC. 1237. WETLANDS RESERVE PROGRAM.

    (a) Establishment.--The Secretary shall establish a 
wetlands reserve program to assist owners of eligible lands in 
restoring and protecting wetlands (including the provision of 
technical assistance.)
    (b) Enrollment Conditions.--
          [(1) Maximum enrollment.--The total number of acres 
        enrolled in the wetlands reserve program shall not 
        exceed 975,000 acres.]
          (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).

           *       *       *       *       *       *       *

    (g) Easements.--The Secretary shall enroll lands in the 
wetland reserve through the purchase of easements as provided 
for in section 1237A.
    (h) Wetlands Reserve Enhancement Program.--
          (1) In general.--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) Limitation.--The total number of acres that may 
        be covered by agreements entered into under this 
        subsection shall not exceed 25,000 acres for each 
        calendar year.

           *       *       *       *       *       *       *


SEC. 1237C. DUTIES OF THE SECRETARY.

    (a) In General.--In return for the granting of an easement 
by an owner under this subchapter, the Secretary shall--
          (1) share the cost of carrying out the establishment 
        of conservation measures and practices, and the 
        protection of the wetland functions and values, as set 
        forth in the plan to the extent that the Secretary 
        determines that cost sharing is appropriate and in the 
        public interest; and
          (2) provide necessary technical [assistance] 
        assistance (including monitoring and maintenance) to 
        assist owners in complying with the terms and 
        conditions of the easement and the plan.

           *       *       *       *       *       *       *


           [CHAPTER 2--AGRICULTURAL WATER QUALITY INCENTIVES]


        CHAPTER 2--CONSERVATION SECURITY AND FARMLAND PROTECTION

              Subchapter A--Conservation Security Program

SEC. 1238. DEFINITIONS.

    In this subchapter:
          (1) Base payment.--The term ``base payment'' means 
        the amount paid to an producer under a conservation 
        security contract that is equal to the total of the 
        amounts described in clauses (i) and (ii) of 
        subparagraphs (C), (D), or (E) of section 1238C(b)(1), 
        as appropriate.
          (2) 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)).
          (3) Bonus amount.--The term `bonus amount' means the 
        amount paid to a producer under a conservation security 
        contract that is equal to the total of the amounts 
        described in clauses (iii) and (iv) of subparagraph 
        (C), and of clause (iii) of subparagraph (D) or (E), of 
        section 1238C(b)(1), as appropriate.
          (4) Conservation practice.--The term `conservation 
        practice' means a land-based farming technique that--
                  (A) requires planning, implementation, 
                management, and maintenance; and
                  (B) promotes 1 or more of the purposes 
                described in section 1238A(a).
          (5) Conservation security contract.--The term 
        ``conservation security contract'' means a contract 
        described in section 1238A(e).
          (6) Conservation security plan.--The term 
        ``conservation security plan'' means a plan described 
        in section 1238A(c).
          (7) Conservation security program.--The term 
        ``conservation security program'' means the program 
        established under section 1238A(a).
          (8) Continuous signup.--The term ``continuous 
        signup'', with respect to land, means land enrolled in 
        a program described in section 1231(b)(6)(A) on which 
        conservation practices are carried out.
          (9) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
          (10) Nutrient management.--The term ``nutrient 
        management'' means management of the quantity, source, 
        placement, form, and timing of the land application of 
        nutrients and other additions to soil on land enrolled 
        in the conservation security program--
                  (A) to achieve or maintain adequate soil 
                fertility for agricultural production;
                  (B) to minimize the potential for loss of 
                environmental quality, including soil, water, 
                fish and wildlife habitat, and air and water 
                quality; or
                  (C) to reduce energy consumption.
          (11) Producer.--The term ``producer'' has the meaning 
        given the term in section 102 of the Agricultural 
        Market Transition Act (7 U.S.C. 7202).
          (12) Resource of concern.--The term ``resource of 
        concern'' means a conservation priority of a State and 
        locality under section 1238A(c)(3).
          (13) Resource-conserving crop.--The term ``resource-
        conserving crop'' means--
                  (A) a perennial grass;
                  (B) a legume grown for use as--
                          (i) forage;
                          (ii) seed for planting; or
                          (iii) green manure;
                  (C) a legume-grass mixture;
                  (D) a small grain grown in combination with a 
                grass or legume, whether interseeded or planted 
                in succession; and
                  (E) such other plantings, including trees and 
                annual grasses, as the Secretary considers 
                appropriate for a particular area.
          (14) Resource-conserving crop rotation.--The term 
        ``resource-conserving crop rotation'' means a crop 
        rotation that--
                  (A) includes at least 1 resource-conserving 
                crop;
                  (B) reduces erosion;
                  (C) improves soil fertility and tilth; and
                  (D) interrupts pest cycles.
          (15) Resource management system.--The term ``resource 
        management system'' means a system of conservation 
        practices and management relating to land or water use 
        that is designed to prevent resource degradation and 
        permit sustained use of land and water, as defined in 
        accordance with the technical guide of the Natural 
        Resources Conservation Service.
          (16) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture, acting through the Natural 
        Resources Conservation Service.
          (17) Tier i conservation practice.--The term ``Tier I 
        conservation practice'' means a conservation practice 
        described in section 1238A(d)(4)(A)(ii).
          (18) Tier i conservation security contract.--The term 
        ``Tier I conservation security contract'' means a 
        contract described in section 1238A(d)(4)(A).
          (19) Tier ii conservation practice.--The term ``Tier 
        II conservation practice'' means a conservation 
        practice described in section 1238A(d)(4)(B)(ii).
          (20) Tier ii conservation security contract.--The 
        term ``Tier II conservation security contract'' means a 
        contract described in section 1238A(d)(4)(B).
          (21) Tier iii conservation practice.--The term ``Tier 
        III conservation practice'' means a conservation 
        practice described in section 1238A(d)(4)(C)(ii).
          (22) Tier iii conservation security contract.--The 
        term ``Tier III conservation security contract'' means 
        a contract described in section 1238A(d)(4)(C).

SEC. 1238A. CONSERVATION SECURITY PROGRAM.

    (a) In General.--For each of fiscal years 2003 through 
2006, the Secretary shall establish a conservation security 
program to assist owners and operators of agricultural 
operations to promote, as is applicable for each operation--
          (1) conservation of soil, water, energy, and other 
        related resources;
          (2) soil quality protection and improvement;
          (3) water quality protection and improvement;
          (4) air quality protection and improvement;
          (5) soil, plant, or animal health and well-being;
          (6) diversity of flora and fauna;
          (7) on-farm conservation and regeneration of 
        biological resources, including plant and animal 
        germplasm;
          (8) wetland restoration, conservation, and 
        enhancement;
          (9) wildlife habitat management, with special 
        emphasis on species identified by any natural heritage 
        program of the applicable State;
          (10) reduction of greenhouse gas emissions and 
        enhancement of carbon sequestration;
          (11) environmentally sound management of invasive 
        species;
          (12) enhancement of conservation technology and 
        resource management practices approved by the 
        Secretary; or
          (13) any similar conservation purpose (as determined 
        by the Secretary).
    (b) Eligibility.--
          (1) Eligible owners and operators.--To be eligible to 
        participate in the conservation security program (other 
        than to receive technical assistance under section 
        1238C(g) for the development of conservation security 
        contracts), a producer shall--
                  (A) develop and submit to the Secretary, and 
                obtain the approval of the Secretary of, a 
                conservation security plan that meets the 
                requirements of subsection (c)(1); and
                  (B) enter into a conservation security 
                contract with the Secretary to carry out the 
                conservation security plan.
          (2) Eligible land.--
                  (A) In general.--Except as provided in 
                subparagraph (C)(iii), private agricultural 
                land (including cropland, grassland, 
                prairie land, pasture land, and rangeland) 
                and land under the jurisdiction of an Indian 
                tribe shall be eligible for enrollment in the 
                conservation security program.
                  (B) Forested land.--Private forested land 
                shall be eligible for enrollment in the 
                conservation security program if the forested 
                land is part of the agricultural land described 
                in subparagraph (A), including land that is 
                used for--
                          (i) alley cropping;
                          (ii) forest farming;
                          (iii) forest buffers;
                          (iv) windbreaks;
                          (v) silvopasture systems; and
                          (vi) such other integrated 
                        agroforestry uses as the Secretary may 
                        determine to be appropriate.
                (C) Exclusions.-- 
                          (i) Conservation reserve program.--
                        Land enrolled in the conservation 
                        reserve program under subchapter B of 
                        chapter 1 shall not be eligible for 
                        enrollment in the conservation security 
                        program except for land described in 
                        section 1231(b)(6)(A).
                          (ii) Wetlands reserve program.--Land 
                        enrolled in the wetlands reserve 
                        program established under subchapter C 
                        of chapter 1 shall not be eligible for 
                        enrollment in the conservation security 
                        program.
                          (iii) Conversion to cropland.--Land 
                        that is used for crop production after 
                        the date of enactment of this 
                        subchapter that had not been in crop 
                        production for at least 3 of the 10 
                        years preceding that date (except for 
                        land enrolled in the conservation 
                        reserve program under subchapter B of 
                        chapter 1) shall not be eligible for 
                        enrollment in the conservation security 
                        program.
          (3) Sustainable economic uses.--The Secretary shall 
        permit a producer to implement, with respect to 
        eligible land covered by a conservation security plan, 
        sustainable economic uses (including Tier II 
        conservation practices) that--
                  (A) maintain the agricultural nature of the 
                land; and (B) are consistent with the natural 
                resource and environmental benefits of the 
                conservation security plan.
    (c) Conservation Security Plans.--
          (1) In general.--A conservation security plan shall--
                  (A) identify the resources and designated 
                land to be conserved under the conservation 
                security plan;
                  (B) describe--
                          (i) the tier of conservation security 
                        contracts, and the particular 
                        conservation practices to be 
                        implemented, maintained, or improved, 
                        in accordance with subsection (d) on 
                        the land covered by the conservation 
                        security contract for the specified 
                        term; and
                          (ii) as appropriate for the land 
                        covered by the conservation security 
                        contract, at least, the minimum number 
                        and scope of conservation practices 
                        described in clause (i) that are 
                        required to be carried out on the land 
                        before the producer is eligible to 
                        receive--
                                  (I) a base payment; and
                                  (II) a bonus amount;
                  (C) contain a schedule for the 
                implementation, maintenance, or improvement of 
                the conservation practices described in the 
                conservation security plan during the term of 
                the conservation security contract;
                  (D) meet the highly erodible land and wetland 
                conservation requirements of subtitles B and C; 
                and
                  (E) identify, and authorize the 
                implementation of, sustainable economic uses 
                described in subsection (b)(3).
          (2) Comprehensive planning.--The Secretary shall 
        encourage owners and operators that enter into 
        conservation security contracts--
                  (A) to undertake a comprehensive examination 
                of the opportunities for conserving natural 
                resources and improving the profitability, 
                environmental health, and quality of life in 
                relation to their entire agricultural 
                operation;
                  (B) to develop a long-term strategy for 
                implementing, monitoring, and evaluating 
                conservation practices and environmental 
                results in the entire agricultural operation;
                  (C) to participate in other Federal, State, 
                local, or private conservation programs;
                  (D) to maintain the agricultural integrity of 
                the land; and
                  (E) to adopt innovative conservation 
                technologies and management practices.
          (3) State and local conservation priorities.--
                  (A) In general.--To the maximum extent 
                practicable and in a manner consistent with the 
                conservation security program, each 
                conservation security plan shall address, at 
                least, the of conservation priorities of the 
                State and locality in which the agricultural 
                operation is located.
                  (B) Administration.--The conservation 
                priorities of the State and locality in which 
                the agricultural operation is located shall 
                be--
                          (i) determined by the State 
                        conservationist, in consultation with 
                        the State technical committee 
                        established under subtitle G and the 
                        local subcommittee of the State 
                        technical committee; and
                          (ii) approved by the Secretary.
          (4) Submission of plan.--
                  (A) In general.--During the development of a 
                conservation security plan by a producer, at 
                the request of the producer, the Secretary 
                shall supply to the producer a statement of the 
                minimum number, type, and scope of conservation 
                practices described in paragraph (1)(B)(ii).
                  (B) Approval for base payments.--If a 
                conservation security plan submitted to the 
                Secretary contains, at least, the conservation 
                practices referred to in paragraph (1)(B)(ii)--
                          (i) the Secretary shall approve the 
                        conservation security plan; and
                          (ii) the producer of the conservation 
                        security plan, on approval of and 
                        compliance with the plan, as determined 
                        by the Secretary, shall be eligible to 
                        receive a base payment.
                  (C) Approval for bonus amounts.--If a 
                conservation security plan submitted to the 
                Secretary contains a proposal for the 
                implementation, maintenance, or improvement of 
                a conservation practice that qualifies for a 
                bonus amount under section 1238C(b)(1)(C)(iii), 
                the Secretary may increase the base payment of 
                the producer by such bonus amount as the 
                Secretary determines is appropriate.
    (d) Conservation Contracts and Practices.--
          (1) In general.--
                  (A) Establishment of tiers.--The Secretary 
                shall establish 3 tiers of conservation 
                contracts under which a payment under this 
                subchapter may be recieved.
                  (B) Eligible conservation practices.--
                          (i) In general.--The Secretary shall 
                        make eligible for payment under a 
                        conservation security contract land 
                        management, vegetative, and structural 
                        practices that--
                                  (I) are necessary to achieve 
                                the purposes of the 
                                conservation security plan; and
                                  (II) primarily provide for, 
                                and have as a primary purpose, 
                                resource protection and 
                                environmental improvement.
                          (ii) Determination.--
                                  (I) In general.--Subject to 
                                subclause (II), in determining 
                                the eligibility of a practice 
                                described in clause (i), the 
                                Secretary shall require, to the 
                                maximum extent practicable, the 
                                lowest cost alternatives be 
                                used to fulfill the purposes of 
                                the conservation security plan, 
                                as determined by the Secretary.
                                  (II) Innovative 
                                technologies.--Subclause (I) 
                                shall not apply, to the maximum 
                                extent practicable, to the 
                                adoption of innovative 
                                technologies.
          (2) On-farm research and demonstration.--With respect 
        to land enrolled in the conservation security program 
        that will be maintained using a Tier II conservation 
        practice or a Tier III conservation practice, the 
        Secretary may approve a conservation security plan that 
        includes on-farm conservation research and demonstration 
        activities, including--
                  (A) total farm planning;
                  (B) total resource management;
                  (C) integrated farming systems;
                  (D) germplasm conservation and regeneration;
                  (E) greenhouse gas reduction and carbon 
                sequestration;
                  (F) agroecological restoration and wildlife 
                habitat restoration;
                  (G) agroforestry;
                  (H) invasive species control;
                  (I) energy conservation and management;
                  (J) farm and environmental results monitoring 
                and evaluation; or
                  (K) participation in research projects 
                relating to water conservation and management 
                through--
                          (i) recycling or reuse of water; or
                          (ii) more efficient irrigation of 
                        farmland.
          (3) Use of handbook and guides.--
                  (A) In general.--In determining eligible 
                conservation practices under the conservation 
                security program, the Secretary shall use the 
                National Handbook of Conservation Practices of 
                the Natural Resources Conservation Service.
                  (B) Conservation practice standards.--To the 
                maximum extent practicable, the Secretary shall 
                establish guidance standards for implementation 
                of eligible conservation practices that shall 
                include measurable goals for enhancing and 
                preventing degradation of resources.
                  (C) Adjustments.--
                          (i) In general.--After providing 
                        notice and an opportunity for public 
                        participation, the Secretary shall make 
                        such adjustments to the National 
                        Handbook of Conservation Practices, and 
                        the field office technical guides, of 
                        the Natural Resources Conservation 
                        Service as are necessary to carry out 
                        this chapter.
                          (ii) Effect on plan.--If the 
                        Secretary makes an adjustment to a 
                        practice under clause (i), the 
                        Secretary may require an adjustment to 
                        a conservation security plan in effect 
                        as of the date of the adjustment if the 
                        Secretary determines that the plan, 
                        without the adjustment, would 
                        significantly interfere with achieving 
                        the purposes of the conservation 
                        security program.
                  (D) Pilot testing.--
                          (i) In general.--Under any of the 3 
                        tiers of conservation practices 
                        established under paragraph (4), the 
                        Secretary may approve requests by a 
                        producer for pilot testing of new 
                        technologies and innovative 
                        conservation practices and systems.
                          (ii) Incorporation into standards.--
                                  (I) In general.--After 
                                evaluation by the Secretary and 
                                provision of notice and an 
                                opportunity for public 
                                participation, the Secretary 
                                may, as expeditiously as 
                                practicable, approve new 
                                technologies and innovative 
                                conservation practices and 
                                systems.
                                  (II) Incorporation.--If the 
                                Secretary approves a new 
                                technology or innovative 
                                conservation practice under 
                                subclause (I), the Secretary 
                                shall, as expeditiously as 
                                practicable, incorporate the 
                                technology or practice into the 
                                standards for implementation of 
                                conservation practices 
                                established under paragraph 
                                (3).
          (4) Tiers.--Subject to paragraph (5), to carry out 
        this subsection, the Secretary shall establish the 
        following 3 tiers of conservation contracts:
                  (A) Tier i conservation contracts.--
                          (i) In general.--A conservation 
                        security plan for land enrolled in the 
                        conservation security program under a 
                        Tier I conservation security contract 
                        shall be maintained using Tier I 
                        conservation practices and shall, at a 
                        minimum--
                                  (I) if applicable, address at 
                                least 1 resource of concern to 
                                the particular agricultural 
                                operation;
                                  (II) apply to the total 
                                agricultural operation or to a 
                                particular unit of the 
                                agricultural operation;
                                  (III) cover--
                                          (aa) conservation 
                                        practices that are 
                                        being implemented as of 
                                        the date on which the 
                                        conservation security 
                                        contract is entered 
                                        into; and
                                          (bb) conservation 
                                        practices that are 
                                        implemented after the 
                                        date on which the 
                                        conservation security 
                                        contract is entered 
                                        into; and
                                  (IV) meet applicable 
                                standards for implementation of 
                                conservation practices 
                                established under paragraph 
                                (3).
                          (ii) Conservation practices.--Tier I 
                        conservation practices shall consist 
                        of, as appropriate for the agricultural 
                        operation of a producer, 1 or more of 
                        the following basic conservation 
                        activities:
                                  (I) Soil conservation, 
                                quality, and residue 
                                management.
                                  (II) Invasive species 
                                management.
                                  (III) Fish and wildlife 
                                habitat management, with 
                                special emphasis on species 
                                identified by any natural 
                                heritage program of the 
                                applicable State or the 
                                appropriate State agency.
                                  (IV) Fish and wildlife 
                                conservation and enhancement.
                                  (V) Air quality management.
                                  (VI) Energy conservation 
                                measures.
                                  (VII) Biological resource 
                                conservation and regeneration.
                                  (VIII) Animal health 
                                management.
                                  (IX) Plant and animal 
                                germplasm conservation, 
                                evaluation, and development.
                                  (X) Contour farming.
                                  (XI) Strip cropping.
                                  (XII) Cover cropping.
                                  (XIII) Sediment dams.
                                  (XIV) Nutrient management.
                                  (XV) Integrated pest 
                                management.
                                  (XVI) Irrigation, water 
                                conservation, and water quality 
                                management.
                                  (XVII) Grazing pasture and 
                                rangeland management.
                                  (XVIII) Any other 
                                conservation practice that the 
                                Secretary determines to be 
                                appropriate and comparable to 
                                other conservation practices 
                                described in this clause.
                          (iii) Tier ii conservation 
                        contracts.--A conservation security 
                        plan for land enrolled in the 
                        conservation security program that will 
                        be maintained using Tier I conservation 
                        contracts may include Tier II 
                        conservation practices.
                  (B) Tier ii conservation practices.--
                          (i) In general.--A conservation 
                        security plan for land enrolled in the 
                        conservation security program under a 
                        Tier II conservation security contract 
                        shall be maintained using Tier II 
                        conservation practices and shall, at a 
                        minimum--
                                  (I) address at least 1 
                                resource of concern, as 
                                specified in the conservation 
                                security plan covering the 
                                total agricultural operation;
                                  (II) cover--
                                          (aa) conservation 
                                        practices that are 
                                        being implemented as of 
                                        the date on which the 
                                        conservation security 
                                        contract is entered 
                                        into; and
                                          (bb) conservation 
                                        practices that are 
                                        implemented after the 
                                        date on which the 
                                        conservation security 
                                        contract is entered 
                                        into; and
                                  (III) meet applicable 
                                resource management system 
                                criteria for 1 or more 
                                resources of concern of the 
                                agricultural operation, as 
                                specified in the conservation 
                                security contract.
                          (ii) Conservation practices.--Tier II 
                        conservation practices shall consist 
                        of, as appropriate for the agricultural 
                        operation of a producer, any of the Tier 
                        I conservation practices and 1 or more of 
                        the following land use adjustment or 
                        protection practices:
                                  (I) Resource-conserving crop 
                                rotations.
                                  (II) Controlled, rotational 
                                grazing.
                                  (III) Conversion of portions 
                                of cropland from a soil-
                                depleting use to a soil-
                                conserving use, including 
                                production of cover crops.
                                  (IV) Partial field 
                                conservation practices 
                                (including windbreaks, grass 
                                waterways, shelter belts, 
                                filter strips, riparian 
                                buffers, wetland buffers, 
                                contour buffer strips, living 
                                snow fences, crosswind trap 
                                strips, field borders, grass 
                                terraces, wildlife corridors, 
                                and critical area planting 
                                appropriate to the agricultural 
                                operation).
                                  (V) Fish and wildlife habitat 
                                conservation and restoration.
                                  (VI) Native grassland and 
                                prairie protection and 
                                restoration.
                                  (VII) Wetland protection and 
                                restoration.
                                  (VIII) Agroforestry practices 
                                and systems.
                                  (IX) Any other conservation 
                                practice involving modification 
                                of the use of land that the 
                                Secretary determines to be 
                                appropriate and comparable to 
                                other conservation practices 
                                described in this clause.
                  (C) Tier iii conservation contracts.--
                          (i) In general.--A conservation 
                        security plan for land enrolled in the 
                        conservation security program under a 
                        Tier III conservation security contract 
                        shall be maintained using Tier III 
                        conservation contracts and shall, at a 
                        minimum--
                                  (I) address all applicable 
                                resources of concern in the 
                                total agricultural operation;
                                  (II) cover--
                                          (aa) conservation 
                                        practices that are 
                                        being implemented as of 
                                        the date on which the 
                                        conservation security 
                                        contract is entered 
                                        into; and
                                          (bb) conservation 
                                        practices that are 
                                        implemented after the 
                                        date on which the 
                                        conservation security 
                                        contract is entered 
                                        into; and
                                  (III) meet applicable 
                                resource management system 
                                criteria for 1 or more 
                                resources of concern of the 
                                agricultural operation, as 
                                specified in the conservation 
                                security contract.
                          (ii) Conservation practices.--Tier 
                        III conservation practices shall 
                        consist of, as appropriate for the 
                        agricultural operation of a producer 
                        (in addition to appropriate Tier I 
                        conservation practices and Tier II 
                        conservation practices), development, 
                        implementation, and maintenance of a 
                        conservation security plan that, over 
                        the term of the conservation security 
                        contract--
                                  (I) integrates all necessary 
                                conservation practices to 
                                foster environmental 
                                enhancement and the long-term 
                                sustainability of the natural 
                                resource base of an 
                                agricultural operation; and
                                  (II) improves profitability 
                                and sustainability associated 
                                with the agricultural 
                                operation.
          (5) Minimum requirements.--The minimum requirements 
        for each tier of conservation practices described in 
        paragraph (4) shall be--
                  (i) determined by the State conservationist, 
                in consultation with the State technical 
                committee established under subtitle G and the 
                local subcommittee of the State technical 
                committee; and
                  (ii) approved by the Secretary.
    (e) Conservation Security Contracts.--
          (1) Contracts.--
                  (A) In general.--On approval of a 
                conservation security plan of a producer, the 
                Secretary shall enter into a conservation 
                security contract with the producer to enroll 
                the land covered by the conservation security 
                plan in the conservation security program.
                  (B) Required components.--A conservation 
                security contract shall specifically describe 
                the practices that are required under 
                subsection (c)(1)(B).
          (2) Term.--Subject to paragraphs (3) and (4)--
                  (A) a conservation security contract for land 
                enrolled in the conservation security program 
                of a producer that will be maintained using 1 
                or more Tier I conservation practices shall 
                have a term of 5 years; and
                  (B) a conservation security contract for land 
                enrolled in the conservation security program 
                that will be maintained using a Tier II 
                conservation practice or Tier III conservation 
                practice shall have a 5-year to 10-year term, 
                as determined by the producer.
          (3) Modifications.--
                  (A) Optional modifications.--
                          (i) In general.--An owner or operator 
                        may apply to the Secretary to modify 
                        the conservation security plan to 
                        effectuate the purposes of the 
                        conservation security program.
                          (ii) Approval by the secretary.--To 
                        be effective, any modification under 
                        clause (i)--
                                  (I) shall be approved by the 
                                Secretary; and
                                  (II) shall authorize the 
                                Secretary to redetermine, if 
                                necessary, the amount and 
                                timing of the payments under 
                                the conservation security 
                                contract and subsections (a) 
                                and (b) of section 1238C.
                  (B) Other modifications.--
                          (i) In general.--The Secretary may, 
                        in writing, require a producer to 
                        modify a conservation security contract 
                        before the expiration of the 
                        conservation security contract if--
                                  (I) the Secretary determines 
                                that a change made to the type, 
                                size, management, or other 
                                aspect of the agricultural 
                                operation of the producer 
                                would, without the modification 
                                of the contract, significantly 
                                interfere with achieving the 
                                purposes of the conservation 
                                security program; or
                                  (II) the Secretary makes a 
                                change to the National Handbook 
                                of Conservation Practices of 
                                the Natural Resource 
                                Conservation Service under 
                                subsection (d)(3)(C).
                          (ii) Payments.--The Secretary may 
                        adjust the amount and timing of the 
                        payment schedule under the conservation 
                        security contract to reflect any 
                        modifications made under this 
                        subparagraph.
                          (iii) Deadline.--The Secretary may 
                        terminate a conservation security 
                        contract if a modification required 
                        under this subparagraph is not 
                        submitted to the Secretary in the form 
                        of an amended conservation security 
                        contract by the date that is 90 days 
                        after the date on which the Secretary 
                        issues a written request for the 
                        modification.
                          (iv) Termination.--a producer that is 
                        required to modify a conservation 
                        security contract under this 
                        subparagraph may, in lieu of modifying 
                        the contract--
                                  (I) terminate the 
                                conservation security contract; 
                                and
                                  (II) retain payments received 
                                under the conservation security 
                                contract, if the producer fully 
                                complied with the terms and 
                                conditions of the conservation 
                                security contract before 
                                termination of the contract.
          (4) Renewal.--
                  (A) In general.--At the option of a producer, 
                the conservation security contract of the 
                producer may be renewed, for a term described 
                in subparagraph (B), if--
                          (i) the producer agrees to any 
                        modification of the applicable 
                        conservation security contract that the 
                        Secretary determines to be necessary to 
                        achieve the purposes of the 
                        conservation security program;
                          (ii) the Secretary determines that 
                        the producer has complied with the 
                        terms and conditions of the 
                        conservation security contract, 
                        including the conservation security 
                        plan; and
                          (iii) in the case of a Tier I 
                        conservation security contract, the 
                        producer agrees to increase the 
                        conservation practices on land enrolled 
                        in the conservation security program 
                        by--
                                  (I) adopting new conservation 
                                practices; or
                                  (II) expanding existing 
                                practices to meet the resource 
                                management systems criteria.
                  (B) Terms of renewal.--Under subparagraph 
                (A)--
                          (i) a conservation security contract 
                        for land enrolled in the conservation 
                        security program that will be 
                        maintained using Tier I conservation 
                        contracts may be renewed for 5-year 
                        terms;
                          (ii) in the case of a Tier II 
                        conservation security contract or a 
                        Tier III conservation security 
                        contract, the contract shall be renewed 
                        for 5-year to 10-year terms, at the 
                        option of the producer; and
                          (iii) participation in the 
                        conservation security program prior to 
                        the renewal of the conservation 
                        security contract shall not bar renewal 
                        more than once.
    (f) Noncompliance Due to Circumstances Beyond the Control 
of Producers.--The Secretary shall include in the conservation 
security contract a provision, and may modify a conservation 
security contract under subsection (e)(3)(B), to ensure that a 
producer shall not be considered in violation of a conservation 
security contract for failure to comply with the conservation 
security contract due to circumstances beyond the control of 
the producer, including a disaster or related condition, as 
determined by the Secretary.

SEC. 1238B. DUTIES OF PRODUCERS.

    Under a conservation security contract, a producer shall 
agree, during the term of the conservation security contract--
          (1) to implement the applicable conservation security 
        plan approved by the Secretary;
          (2) to maintain, and make available to the Secretary 
        at such times as the Secretary may request, appropriate 
        records showing the effective and timely implementation 
        of the conservation security plan;
          (3) not to engage in any activity that would 
        interfere with the purposes of the conservation 
        security plan; and
          (4) on the violation of a term or condition of the 
        conservation security contract--
                  (A) if the Secretary determines that the 
                violation warrants termination of the 
                conservation security contract--
                          (i) to forfeit all rights to receive 
                        payments under the conservation 
                        security contract; and
                          (ii) to refund to the Secretary all 
                        or a portion of the payments received 
                        by the producer under the conservation 
                        security contract, including any 
                        advance payment and interest on the 
                        payments, as determined by the 
                        Secretary; or
                  (B) if the Secretary determines that the 
                violation does not warrant termination of the 
                conservation security contract, to refund to 
                the Secretary, or accept adjustments to, the 
                payments provided to the producer, as the 
                Secretary determines to be appropriate.

SEC. 1238C. DUTIES OF THE SECRETARY.

    (a) Advance Payment.--At the time at which a producer 
enters into a conservation security contract, the Secretary 
shall, at the option of the producer, make an advance payment 
to the producer in an amount not to exceed--
          (1) in the case of a Tier I conservation security 
        contract, the greater of--
                  (A) $1,000; or
                  (B) 20 percent of the value of the annual 
                payment under the contract, as determined by 
                the Secretary;
          (2) in the case of a Tier II conservation security 
        contract, the greater of--
                  (A) $2,000; or
                  (B) 20 percent of the value of the annual 
                payment under the contract, as determined by 
                the Secretary; and
          (3) in the case of a Tier III conservation security 
        contract, the greater of--
                  (A) $3,000; or
                  (B) 20 percent of the value of the annual 
                payment under the contract, as determined by 
                the Secretary.
    (b) Annual Payments.--
          (1) Criteria for determining amount of payments.--
                  (A) Base rate.--In this paragraph, the term 
                `base rate' means the average county rental 
                rate for the specific land use during the 2001 
                crop year, or another appropriate average 
                county rate for the 2001 crop year, that 
                ensures regional equity, as determined by the 
                Secretary.
                  (B) Payments.--A payment for a conservation 
                practice under this paragraph shall be 
                determined in accordance with subparagraphs (C) 
                through (F).
                  (C) Tier i conservation contracts.--The 
                payment for a Tier I conservation security 
                contract shall be comprised of the total of the 
                following amounts:
                          (i) An amount equal to 6 percent of 
                        the base rate for land covered by the 
                        contract.
                          (ii) An amount equal to the following 
                        costs of practices covered by the 
                        conservation security contract, based 
                        on the average county costs for such 
                        practices for the 2001 crop year, as 
                        determined by the Secretary:
                                  (I) 100 percent of the cost 
                                of--
                                          (aa) the adoption of 
                                        new management 
                                        practices; and
                                          (bb) the maintenance 
                                        of new and existing 
                                        management practices.
                                  (II) 100 percent of the cost 
                                of maintenance of existing 
                                land-based structural practices 
                                approved by the Secretary.
                                  (III)(aa) 75 percent (or, in 
                                the case of a limited resource 
                                producer (as determined by the 
                                Secretary) or a beginning 
                                farmer or rancher, 90 percent) 
                                of the cost of adoption of new 
                                land-based structural 
                                practices; or
                                  (bb) 75 percent (or, in the 
                                case of a limited resource 
                                producer (as determined by the 
                                Secretary) or a beginning 
                                farmer or rancher, 90 percent) 
                                of the cost of the adoption of 
                                a structural practice for which 
                                a similar structural practice 
                                under the environmental quality 
                                incentives program established 
                                under chapter 4 would require 
                                maintenance, if the producer 
                                agrees to provide, without 
                                reimbursement, substantially 
                                equivalent maintenance.
                          (iii) A bonus amount determined by 
                        the Secretary for implementing or 
                        adopting 1 or more of the following 
                        practices:
                                  (I) A practice adopted or 
                                maintained that maximizes the 
                                purposes of the conservation 
                                security program beyond the 
                                minimum requirements of the 
                                practices adopted or 
                                maintained.
                                  (II) A practice adopted or 
                                maintained to address eligible 
                                resource and conservation 
                                concerns beyond those 
                                identified as State or local 
                                conservation priorities.
                                  (III) A practice adopted or 
                                maintained to address national 
                                priority concerns, as 
                                determined by the Secretary.
                                  (IV) Participation by the 
                                producer in a conservation 
                                research, demonstration, or 
                                pilot project.
                                  (V) Participation by the 
                                producer in a watershed or 
                                regional resource conservation 
                                plan that involves at least 75 
                                percent of producers in a 
                                targeted area.
                                  (VI) Recordkeeping, 
                                monitoring, and evaluation 
                                carried out by the producer 
                                that furthers the purposes of 
                                the conservation security 
                                program.
                          (iv) A bonus amount determined by the 
                        Secretary that reflects the status of a 
                        producer as a beginning farmer or 
                        rancher.
                  (D) Tier ii conservation contracts.--The 
                payment for a Tier II conservation security 
                contract shall be comprised of the total of the 
                following amounts:
                          (i) An amount equal to 11 percent of 
                        the base rate for land covered by the 
                        conservation security contract.
                          (ii) An amount equal to the cost of 
                        practices covered by the conservation 
                        security contract, based on the average 
                        county costs for practices for the 2001 
                        crop year, described in subparagraph 
                        (C)(ii).
                          (iii) A bonus amount determined by 
                        the Secretary in accordance with 
                        clauses (iii) and (iv) of subparagraph 
                        (C), except that the bonus amount under 
                        this clause may include any amount for 
                        the adoption or maintenance by the 
                        producer of any practice that exeeds 
                        resource management system standards.
                  (E) Tier iii conservation contracts.--The 
                payment for a Tier III conservation security 
                contract shall be comprised of the total of the 
                following amounts:
                          (i) An amount equal to 20 percent of 
                        the base rate for land covered by the 
                        conservation security contract.
                          (ii) An amount equal to the cost of 
                        practices covered by the conservation 
                        security contract, based on the average 
                        county costs for practices for the 2001 
                        crop year, described in subparagraph 
                        (C)(ii).
                          (iii) A bonus amount determined by 
                        the Secretary in accordance with 
                        subparagraph (D)(iii).
                  (F) Exclusion of costs for purchase or 
                maintenance of equipment or non-land based 
                structures.--A payment under this subchapter 
                shall not include any amount for the purchase 
                or maintenance of equipment or a non-land based 
                structure.
          (2) Time of payment.--The Secretary shall provide 
        payments under a conservation security contract as soon 
        as practicable after October 1 of each fiscal year.
          (3) Limitation on payments.--
                  (A) In general.--Subject to paragraphs (1), 
                (2), (4), and (5), the Secretary shall, in 
                amounts and for a term specified in a 
                conservation security contract and taking into 
                account any advance payments, make an annual 
                payment, directly or indirectly, to the 
                individual or entity covered by the 
                conservation security contract in an amount not 
                to exceed--
                          (i) in the case of a Tier I 
                        conservation security contract, 
                        $20,000;
                          (ii) in the case of a Tier II 
                        conservation security contract, 
                        $35,000; or
                          (iii) in the case of a Tier III 
                        conservation security contract, 
                        $50,000.
                  (B) Limitation on nonbonus payments.--In 
                applying the payment limitation under each of 
                clauses (i), (ii), and (iii) of subparagraph 
                (A), an individual or entity may not receive, 
                directly or indirectly, payments described in 
                clauses (i) and (ii) of paragraph (1)(C), 
                (1)(D), or (1)(E), as appropriate, in an amount 
                that exceeds 75 percent of the applicable 
                payment limitation.
                  (C) Other usda payments.--If a producer has 
                the same practices on the same land enrolled in 
                the conservation security program and 1 or more 
                other conservation programs administered by the 
                Secretary, the Secretary shall include all 
                payments from the conservation security program 
                and the other conservation programs, other than 
                payments for conservation easements, in 
                applying the annual payment limitations under 
                this paragraph.
                  (D) Non-usda payments.--
                          (i) In general.--A payment described 
                        in clause (ii) shall not be considered 
                        an annual payment for purposes of the 
                        annual payment limitations under this 
                        paragraph.
                          (ii) Payment.--A payment referred to 
                        in clause (i) is a payment that--
                                  (I) is for the same practice 
                                on the same land enrolled in 
                                the conservation security 
                                program; and
                                  (II) is received from a 
                                Federal program that is not 
                                administered by the Secretary, 
                                or that is administered by any 
                                State, local, or private 
                                agricultural agency or 
                                organization.
                  (E) Commensurate share.--To be eligible to 
                receive a payment under this chapter, an 
                individual or entity shall make contributions 
                (including contributions of land, labor, 
                management, equipment, or capital) to the 
                operation of the farm that are at least 
                commensurate with the share of the proceeds of 
                the operation of the individual or entity.
          (4) Land enrolled in other conservation programs.--
        Notwithstanding any other provision of law, if a 
        producer has land enrolled in another conservation 
        program administered by the Secretary and has applied 
        to enroll the same land in the conservation security 
        program, the producer may elect to--
                  (A) convert the contract under the other 
                conservation program to a conservation security 
                contract, without penalty, except that this 
                subparagraph shall not apply to a contract 
                entered into under--
                          (i) the conservation reserve program 
                        under subchapter B ofchapter 1; or
                          (ii) the wetlands reserve program 
                        under subchapter C of chapter 1; or
                  (B) have each annual payment to the producer 
                under this subsection reduced to reflect 
                payment for practices the producer receives 
                under the other conservation program, except 
                that the annual payment under this subsection 
                shall not be reduced by the amount of any 
                incentive received under a program referred to 
                in section 1231(b)(6) for qualified practices 
                that enhance or extend the conservation benefit 
                achieved under the other conservation program.
          (5) Waste storage or treatment facilities.--A payment 
        to a producer under this subchapter shall not be 
        provided for the purpose of construction or maintenance 
        of animal waste storage or treatment facilities or 
        associated waste transport or transfer devices for 
        animal feeding operations.
    (c) Minimum Practice Requirement.--In determining a payment 
under subsection (a) or (b) for an owner, operator, or producer 
that receives a payment under another program administered by 
the Secretary that is contingent on complying with requirements 
under subtitle B or C of title XII of the Food Security Act of 
1985 (16 U.S.C. 3811 et seq.) relating to the use of highly 
erodible land or wetland, a payment under this chapter for 1 or 
more practices on land subject to those requirements shall be 
for practices that exceed minimum requirements for the owner, 
operator, or producer under those subtitles, as determined by 
the Secretary.
    (d) Regulations.--
          (1) In general.--The Secretary shall promulgate 
        regulations that--
                  (A) provide for adequate safeguards to 
                protect the interests of tenants and 
                sharecroppers, including provision for sharing 
                payments, on a fair and equitable basis; and
                  (B) prescribe such other rules as the 
                Secretary determines to be necessary to ensure 
                a fair and reasonable application of the 
                limitations established under subsections (a) 
                and (b).
          (2) Penalties for schemes or devices.--
                  (A) In general.--If the Secretary determines 
                that an individual or entity has adopted a 
                scheme or device to evade, or that has the 
                purpose of evading, the regulations promulgated 
                under paragraph (1), the individual or entity 
                shall be ineligible to participate in the 
                conservation security program for--
                          (i) the year for which the scheme or 
                        device was adopted; and
                          (ii) each of the following 5 years.
                  (B) Fraud.--If the Secretary determines that 
                fraud was committed in connection with the 
                scheme or device, the individual or entity 
                shall be ineligible to participate in the 
                conservation security program for--
                          (i) the year for which the scheme or 
                        device was adopted; and
                          (ii) each of the following 10 years.
    (e) Termination.--
          (1) In general.--Subject to section 1238B, the 
        Secretary shall allow a producer to terminate the 
        conservation security contract.
          (2) Payments.--the producer may retain any or all 
        payments received under a terminated conservation 
        security contract if--
                  (A) the producer is in full compliance with 
                the terms and conditions (including any 
                maintenance requirements) of the conservation 
                security contract as of the date of the 
                termination; and
                  (B) the Secretary determines that termination 
                of the contract will not defeat the purposes of 
                the conservation security plan of the producer.
    (f) Transfer or Change of Interest in Land Subject to 
Conservation Security Contract.--
          (1) In general.--Except as provided in paragraph (2), 
        the transfer, or change in the interest, of a producer 
        in land subject to a conservation security contract 
        shall result in the termination of the conservation 
        security contract.
          (2) Transfer of duties and rights.--Paragraph (1) 
        shall not apply if, not later than 60 days after the 
        date of the transfer or change in the interest in land, 
        the transferee of the land provides written notice to 
        the Secretary that all duties and rights under the 
        conservation security contract have been transferred 
        to the transferee.
    (g) Technical Assistance.--
          (1) In general.--For each of fiscal years 2003 
        through 2006, the Secretary shall provide technical 
        assistance to producers for the development and 
        implementation of conservation security contracts, in 
        an amount not to exceed 20 percent of amounts expended 
        for the fiscal year.
          (2) Coordination by the secretary.--The Secretary 
        shall provide overall technical coordination and 
        leadership for the conservation security program, 
        including final approval of all conservation security 
        plans.
    (h) Conservation Security Pilot Program.--
          (1) In general.--Effective October 1, 2004, the 
        Secretary, in cooperation with appropriate State 
        agencies, may establish a pilot program to demonstrate 
        and evaluate the implementation of a conservation 
        security program by a State described in paragraph (2).
          (2) Eligible state.--The State referred to in 
        paragraph (1) shall be a State selected by the 
        Secretary--
                  (A) in consultation with--
                          (i) the Committee on Agriculture of 
                        the House of Representatives; and
                          (ii) the Committee on Agriculture, 
                        Nutrition, and Forestry of the Senate; 
                        and
                  (B) after taking into consideration--
                          (i) the percentage of private land in 
                        agricultural production in the State; 
                        and
                          (ii) infrastructure in the State that 
                        is available to implement the pilot 
                        program under paragraph (1).

               Subchapter B--Farmland Protection Program

SEC. 1238H. DEFINITIONS.

    In this subchapter:
          (1) Eligible land.--
                  (A) In general.--The term ``eligible land'' 
                means land on a farm or ranch that--
                          (i)(I) has prime, unique, or other 
                        productive soil; or (II) contains 
                        historical or archaeological resources; 
                        and
                          (ii) is subject to a pending offer 
                        for purchase from--
                                  (I) any agency of any State 
                                or local government or an 
                                Indian tribe (including a 
                                farmland protection board or 
                                land resource council 
                                established under State law); 
                                or
                                  (II) any organization that--
                                          (aa) is organized 
                                        for, and at all times 
                                        since the formation of 
                                        the organization, has 
                                        been operated 
                                        principally for, 1 or 
                                        more of the 
                                        conservation purposes 
                                        specified in clause 
                                        (i), (ii), or (iii) of 
                                        section 170(h)(4)(A) of 
                                        the Internal Revenue 
                                        Code of 1986;
                                          (bb) is an 
                                        organization described 
                                        in section 501(c)(3) of 
                                        that Code that is 
                                        exempt from taxation 
                                        under section 501(a) of 
                                        that Code; or
                                          (cc) is described in 
                                        section 509(a)(3), and 
                                        is controlled by an 
                                        organization described 
                                        in section 509(a)(2), 
                                        of that Code.
                  (B) Inclusions.--The term ``eligible land'' 
                includes--
                          (i) cropland;
                          (ii) rangeland;
                          (iii) grassland:
                          (iv) pasture land; and
                          (v) forest land that is part of an 
                        agricultural operation, as determined 
                        by the Secretary.
          (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
          (3) Program.--The term ``program'' means the farmland 
        protection program established under section 1238I(a).

SEC. 1238I. FARMLAND PROTECTION.

    (a) In General.--The Secretary shall establish and carry 
out a farmland protection program under which the Secretary 
shall purchase conservation easements or other interests in 
eligible land for the purpose of protecting topsoil by limiting 
nonagricultural uses of the land.
    (b) Conservation Plan.--Any highly erodible cropland for 
which a conservation easement or other interest is purchased 
under this subchapter shall be subject to the requirements of a 
conservation plan that requires, at the option of the 
Secretary, the conversion of the cropland to less intensive 
uses.

SEC. 1238J. MARKET VIABILITY PROGRAM.

    For each year for which funds are made available to carry 
out this subchapter, the Secretary may use not more than 
$10,000,000 to provide matching market viability grants and 
technical assistance to farm and ranch operators that 
participate in the program.

                Subchapter D--Grassland Reserve Program

SEC. 1238N. GRASSLAND RESERVE PROGRAM.

    (a) Establishment.--The Secretary, acting through the 
Natural Resource Conservation Service, shall establish a 
grassland reserve program (referred to in this subchapter as 
the ``program'') to assist owners in restoring and protecting 
eligible land described in subsection (c).
    (b) Enrollment Conditions.--
          (1) In general.--The Secretary shall enroll in the 
        program, from willing owners, not less than--
                  (A) 100 contiguous acres of land west of the 
                98th meridian; or
                  (B) 40 contiguous acres of land east of the 
                98th meridian.
          (2) Maximum enrollment.--The total number of acres 
        enrolled in the program shall not exceed 2,000,000 
        acres, of which not more than 500,00 acres shall be 
        reserved for enrollment of tracts of native grassland 
        of 40 acres or less.
          (3) Methods of enrollment.--The Secretary shall 
        enroll land in the program through--
                  (A) permanent easements or 30-year easements;
                  (B) in a State that imposes a maximum 
                duration for such an easement, an easement for 
                the maximum duration allowed under State law; 
                or
                  (C) a 30-year rental agreement.
    (c) Eligible Land.--Land shall be eligible to be enrolled 
in the program if the Secretary determines that the land is 
private land that is--
          (1) natural grassland (including prairie and land 
        that contains shrubs or forb) that is indigenous to the 
        locality;
          (2) land that--
                  (A) is located in an area that has been 
                historically dominated by natural grassland; 
                and
                  (B) has potential to serve as habitat for 
                animal or plant populations of significant 
                ecological value if the land is restored to a 
                natural condition; or
          (3) land that is incidental to land described in 
        paragraph (1) or (2), if the incidental land is 
        determined by the Secretary to be necessary for the 
        efficient administration of an easement.

SEC. 1238O. EASEMENTS AND AGREEMENTS.

    (a) In General.--To be eligible to enroll land in the 
program, the owner of the land shall enter into an agreement 
with the Secretary--
          (1) to grant an easement that applies to the land to 
        the Secretary;
          (2) to create and record an appropriate deed 
        restriction in accordance with applicable State law to 
        reflect the easement;
          (3) to provide a written statement of consent to 
        the easement signed by persons holding a security interest 
        or any vested interest in the land;
          (4) to provide proof of unencumbered title to the 
        underlying fee interest in the land that is the subject 
        of the easement; and
          (5) to comply with the terms of the easement and 
        restoration agreement.
    (b) Terms of Easement.--An easement under subsection (a) 
shall--
          (1) permit--
                  (A) grazing on the land in a manner that is 
                consistent with maintaining the viability of 
                natural grass, shrub, forb, and wildlife 
                species indigenous to that locality;
                  (B) haying (including haying for seed 
                production) or mowing, except during the 
                nesting and brood-rearing seasons for birds in 
                the area that are in significant decline, as 
                determined by the Natural Resources 
                Conservation Service State conservationist, or 
                are protected Federal or State law; and
                  (C) fire rehabilitation, construction of fire 
                breaks, and fences (including placement of the 
                posts necessary for fences);
          (2) prohibit--
                  (A) the production of row crops, fruit trees, 
                vineyards, or any other agricultural commodity 
                that requires breaking the soil surface; and
                  (B) except as permitted under paragraph 
                (1)(C), the conduct of any other activities 
                that would disturb the surface of the land 
                covered by the easement, including--
                          (i) plowing; and
                          (ii) disking; and
          (3) include such additional provisions as the 
        Secretary determines are appropriate to carry out this 
        subchapter or to facilitate the administration of this 
        subchapter.
    (c) Evaluation and Ranking of Easement Applications.--
          (1) In general.--The Secretary, in conjunction with 
        State technical committees, shall establish criteria to 
        evaluate and rank applications for easements under this 
        subchapter.
          (2) Criteria.--In establishing the criteria, the 
        Secretary shall emphasize support for grazing 
        operations, plant and animal biodiversity, and 
        grassland and land containing shrubs or forb under the 
        greatest threat of conversion.
    (d) Restoration Agreements.--
          (1) In general.--The Secretary shall prescribe the 
        terms by which grassland and shrubland subject to an 
        easement under an agreement entered into under the 
        program shall be restored.
          (2) Requirements.--The restoration agreement shall 
        describe the respective duties of the owner and the 
        Secretary (including paying the share of the cost of 
        restoration provided by the Secretary and the provision 
        of technical assistance).
    (e) Violations.--
          (1) In general.--On the violation of the terms or 
        conditions of an easement or restoration agreement 
        entered into under this section--
                  (A) the easement shall remain in force; and
                  (B) the Secretary may require the owner to 
                refund all or part of any payments received by 
                the owner under this subchapter, with interest 
                on the payments as determined appropriate by 
                the Secretary.
          (2) Periodic inspections.--
                  (A) In general.--After providing notice to 
                the owner, the Secretary shall conduct periodic 
                inspections of land subject to easements under 
                this subchapter to ensure compliance with the 
                terms of the easement and restoration 
                agreement.
                  (B) Limitation.--The Secretary may not 
                prohibit the owner, or a representative of the 
                owner, from being present during a periodic 
                inspection.

SEC. 1238P. DUTIES OF SECRETARY.

    (a) In General.--In return for the granting of an easement 
byan owner under this subchapter, the Secretary shall, in 
accordance with this section--
          (1) make easement payments;
          (2) pay a share of the cost of restoration; and
          (3) provide technical assistance to the owner.
    (b) Payment Schedule.--
          (1) Easement payments.--
                  (A) Amount.--In return for the granting of an 
                easement by an owner under this subchapter, the 
                Secretary shall make easement payments to the 
                owner in an amount equal to--
                          (i) in the case of a permanent 
                        easement, the fair market value of the 
                        land less the grazing value of the land 
                        encumbered by the easement; and
                          (ii) in the case of a 30-year 
                        easement or an easement for the maximum 
                        duration allowed under applicable State 
                        law, 30 percent of the fair market 
                        value of the land less the grazing 
                        value of the land for the period during 
                        which the land is encumbered by the 
                        easement.
                  (B) Schedule.--Easement payments may be 
                provided in not less than 1 payment nor more 
                than 10 annual payments of equal or unequal 
                amount, as agreed to by the Secretary and the 
                owner.
          (2) Rental agreement payments.--
                  (A) Amount.--If an owner enters into a 30-
                year rental agreement authorized under section 
                1238N(b)(3)(C), the Secretary shall make 30 
                annual rental payments to the owner in an 
                amount that equals, to the maximum extent 
                practicable, the 30-year easement payment 
                amount under paragraph (1)(A)(ii).
                  (B) Assessment.--Not less than once every 5 
                years throughout the 30-year rental period, the 
                Secretary shall assess whether the value of the 
                rental payments under subparagraph (A) equals, 
                to the maximum extent practicable, the total 
                amount of 30-year easement payments as of the 
                date of the assessment.
                  (C) Adjustment.--If on completion of the 
                assessment under subparagraph (B), the 
                Secretary determines that the rental payments 
                do not equal, to the maximum extent 
                practicable, the value of payments under a 30-
                year easement, the Secretary shall adjust the 
                amount of the remaining payments to equal, to 
                the maximum extent practicable, the value of a 
                30-year easement over the entire 30-year rental 
                period.
    (c) Cost of Restoration.--The Secretary shall make payments 
to the owner of not more than 75 percent of the cost of 
carrying out measures and practices necessary to restore 
grassland and shrubland functions and values.
    (d) Technical Assistance.--The Secretary shall provide 
owners with technical assistance to execute easement documents 
and restore the grassland and shrubland.
    (e) Payments to Others.--If an owner that is entitled to a 
payment under this subchapter dies, becomes incompetent, is 
otherwise unable to receive the payment, or is succeeded by 
another person who renders or completes the required 
performance, the Secretary shall make the payment, in 
accordance with regulations promulgated by the Secretary and 
without regard to any other provision of law, in such manner as 
the Secretary determines is fair and reasonable in light of all 
the circumstances.
    (f) Other Payments.--Easement payments received by an owner 
under this subchapter shall be in addition to, and not affect, 
the total amount of payments that the owner is otherwise 
eligible to receive under other Federal laws.
    (g) Regulations.--Not later than 180 days after the date of 
enactment of this subchapter, the Secretary shall promulgate 
such regulations as are necessary to carry out this 
subchapter.''.
    (b) Funding.--Section 1241 of the Food Security Act of 1985 
(16 U.S.C. 3841) (as amended by section 217(b)) is amended by 
adding at the end the following:
    (e) Grassland Reserve Program.--The Secretary shall use 
such sums of the Commodity Credit Corporation as are necessary 
to carry out subchapter D of chapter 2 (including the provision 
of technical assistance).

           *       *       *       *       *       *       *


[SEC. 1240. PURPOSES.

    [The purposes of the environmental quality incentives 
program established by this chapter are to--
          [(1) combine into a single program the functions of--
                  [(A) the agricultural conservation program 
                authorized by sections 7 and 8 of the Soil 
                Conservation and Domestic Allotment Act (16 
                U.S.C. 590g and 590h) (as in effect before the 
                amendments made by section 336(a)(1) of the 
                Federal Agriculture Improvement and Reform Act 
                of 1996);
                  [(B) the Great Plains conservation program 
                established under section 16(b) of the Soil 
                Conservation and Domestic Allotment Act (16 
                U.S.C. 590p(b)) (as in effect before the 
                amendment made by section 336(b)(1) of the 
                Federal Agriculture Improvement and Reform Act 
                of 1996);
                  [(C) the water quality incentives program 
                established under chapter 2 (as in effect 
                before the amendment made by section 336(h) of 
                the Federal Agriculture Improvement and Reform 
                Act of 1996); and
                  [(D) the Colorado River Basin salinity 
                control program established under section 
                202(c) of the Colorado River Basin Salinity 
                Control Act (43 U.S.C. 1592(c)) (as in effect 
                before the amendment made by section 336(c)(1) 
                of the Federal Agriculture Improvement and 
                Reform Act of 1996); and
          [(2) carry out the single program in a manner that 
        maximizes environmental benefits per dollar expended, 
        and that provides--
                  [(A) flexible technical and financial 
                assistance to farmers and ranchers that face 
                the most serious threats to soil, water, and 
                related natural resources, including grazing 
                lands, wetlands, and wildlife habitat;
                  [(B) assistance to farmers and ranchers in 
                complying with this title and Federal and State 
                environmental laws, and encourages 
                environmental enhancement;
                  [(C) assistance to farmers and ranchers in 
                making beneficial, cost-effective changes to 
                cropping systems, grazing management, manure, 
                nutrient, pest, or irrigation management, land 
                uses, or other measures needed to conserve and 
                improve soil, water, and related natural 
                resources; and
                  [(D) for the consolidation and simplification 
                of the conservation planning process to reduce 
                administrative burdens on producers.

[SEC. 1240A. DEFINITIONS.

    [In this chapter:
          [(1) Eligible land.--The term ``eligible land'' means 
        agricultural land (including cropland, rangeland, 
        pasture, 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.
          [(2) 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, or other land management practice 
        carried out on eligible land that the Secretary 
        determines is needed to protect, in the most cost-
        effective manner, water, soil, or related resources 
        from degradation.
          [(3) Livestock.--The term ``livestock'' means dairy 
        cattle, beef cattle, laying hens, broilers, turkeys, 
        swine, sheep, and such other animals as determined by 
        the Secretary.
          [(4) Producer.--The term ``producer'' means a person 
        who is engaged in livestock or agricultural production 
        (as defined by the Secretary).
          [(5) 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, 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 the 1996 through 2002 fiscal 
        years, the Secretary shall provide technical 
        assistance, cost-share payments, incentive payments, 
        and education to producers, who enter into contracts 
        with the Secretary, through an environmental quality 
        incentives program in accordance with this chapter.
          [(2) Eligible practices.--
                  [(A) Structural practices.--A producer who 
                implements a structural practice shall be 
                eligible for any combination of technical 
                assistance, cost-share payments, and education.
                  [(B) Land management practices.--A producer 
                who performs a land management practice shall 
                be eligible for any combination of technical 
                assistance, incentive payments, and education.
    [(b) Application and Term.--A contract between a producer 
and the Secretary under this chapter may--
          [(1) apply to 1 or more structural practices or 1 or 
        more land management practices, or both; and
          [(2) have a term of not less than 5, nor more than 
        10, years, as determined appropriate by the Secretary, 
        depending on the practice or practices that are the 
        basis of the contract.
    [(c) Structural Practices.--
          [(1) Offer selection process.--The Secretary shall, 
        to the maximum extent practicable, establish a process 
        for selecting applications for financial assistance if 
        there are numerous applications for assistance for 
        structural practices that would provide substantially 
        the same level of environmental benefits. The process 
        shall be based on--
                  [(A) a reasonable estimate of the projected 
                cost of the proposals and other factors 
                identified by the Secretary for determining 
                which applications will result in the least 
                cost to the program authorized by this chapter; 
                and
                  [(B) the priorities established under this 
                subtitle and such other factors determined by 
                the Secretary that maximize environmental 
                benefits per dollar expended.
          [(2) Concurrence 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 
        concurrence of the owner of the land with respect to 
        the offer.
    [(d) Land Management Practices.--The Secretary shall 
establish an application and evaluation process for awarding 
technical assistance or incentive payments, or both, to a 
producer in exchange for the performance of 1 or more land 
management practices by the producer.
    [(e) Cost-Share Payments, Incentive Payments, and Technical 
Assistance.--
          [(1) Cost-share payments.--
                  [(A) In general.--The Federal share of cost-
                share payments to a producer proposing to 
                implement 1 or more structural practices shall 
                be not more than 75 percent of the projected 
                cost of the practice, as determined by the 
                Secretary, taking into consideration any 
                payment received by the producer from a State 
                or local government.
                  [(B) Limitation.--A producer who owns or 
                operates a large confined livestock operation 
                (as defined by the Secretary) shall not be 
                eligible for cost-share payments to construct 
                an animal waste management facility.
                  [(C) Other payments.--A producer shall not be 
                eligible for cost-share payments for structural 
                practices on eligible land under this chapter 
                if the producer receives cost-share payments or 
                other benefits for the same land under chapter 
                1 or 3.
          [(2) 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 land 
        management practices.
          [(3) Technical assistance.--
                  [(A) Funding.--The Secretary shall allocate 
                funding under this chapter for the provision of 
                technical assistance according to the purpose 
                and projected cost for which the technical 
                assistance is provided for a fiscal year. The 
                allocated amount may vary according to the type 
                of expertise required, quantity of time 
                involved, and other factors as determined 
                appropriate by the Secretary. Funding shall not 
                exceed the projected cost to the Secretary of 
                the technical assistance provided for a fiscal 
                year.
                  [(B) Other authorities.--The receipt of 
                technical assistance under this chapter shall 
                not affect the eligibility of the producer to 
                receive technical assistance under other 
                authorities of law available to the Secretary.
                  [(C) Private sources.--The Secretary shall 
                ensure that the processes of writing and 
                developing proposals and plans for contracts 
                under this chapter, and of assisting in the 
                implementation of structural practices and land 
                management practices covered by the contracts, 
                are open to individuals in agribusiness, 
                including agricultural producers, 
                representatives from agricultural cooperatives, 
                agricultural input retail dealers, and 
                certified crop advisers. The requirements of 
                this subparagraph shall also apply to any other 
                conservation program of the Department of 
                Agriculture that provides incentive payments, 
                technical assistance, or cost-share payments.
    [(f) 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.
    [(g) Non-Federal Assistance.--The Secretary may request the 
services of a State water quality agency, State fish and 
wildlife agency, State forestry agency, or any other 
governmental or private resource considered appropriate to 
assist in providing the technical assistance necessary for the 
development and implementation of a structural practice or land 
management practice.

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

    [In providing technical assistance, cost-share payments, 
and incentive payments to producers, the Secretary shall accord 
a higher priority to assistance and payments that--
          [(1) are provided in conservation priority areas 
        established under section 1230(c);
          [(2) maximize environmental benefits per dollar 
        expended; or
          [(3) are provided in watersheds, regions, or 
        conservation priority areas in which State or local 
        governments have provided, or will provide, financial 
        or technical assistance to producers for the same 
        conservation or environmental purposes.

[SEC. 1240D. DUTIES OF PRODUCERS.

    [To receive technical assistance, cost-share payments, or 
incentive payments under this chapter, a producer shall agree--
          [(1) to implement an environmental quality incentives 
        program plan that describes conservation and 
        environmental goals to be achieved through a structural 
        practice or land management practice, or both, that is 
        approved by the Secretary;
          [(2) not to conduct any practices on the farm or 
        ranch that would tend to defeat the purposes of this 
        chapter;
          [(3) on the violation of a term or condition of the 
        contract at any time the producer has control of the 
        land, to refund any cost-share or incentive payment 
        received with interest, and forfeit any future payments 
        under this chapter, as determined by the Secretary;
          [(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 this chapter, as determined by the 
        Secretary;
          [(5) to supply information as required by the 
        Secretary to determine compliance with the 
        environmental quality incentives 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 
        environmental quality incentives program plan.

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

    [(a) In General.--To be eligible to enter into a contract 
under the environmental quality incentives program, an owner or 
producer of a livestock or agricultural operation must submit 
to the Secretary for approval a plan of operations that 
incorporates such conservation practices, and is based on such 
principles, as the Secretary considers necessary to carry out 
the program, including a description of structural practices 
and land management practices to be implemented and the 
objectives to be met by the plan's implementation.
    [(b) Avoidance of Duplication.--The Secretary shall, to the 
maximum extent practicable, eliminate duplication of planning 
activities under the environmental quality incentives 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 an environmental quality incentives program plan by--
          [(1) providing an eligibility assessment of the 
        farming or ranching operation of the producer as a 
        basis for developing the plan;
          [(2) providing technical assistance in developing and 
        implementing the plan;
          [(3) providing technical assistance, cost-share 
        payments, or incentive payments for developing and 
        implementing 1 or more structural practices or 1 or 
        more land management practices, as appropriate;
          [(4) providing the producer with information, 
        education, and training to aid in implementation of the 
        plan; and
          [(5) 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.--The total amount of cost-share and 
incentive payments paid to a producer under this chapter may 
not exceed--
          [(1) $10,000 for any fiscal year; or
          [(2) $50,000 for any multiyear contract.
    [(b) Exception to Annual Limit.--The Secretary may exceed 
the limitation on the annual amount of a payment under 
subsection (a)(1) on a case-by-case basis if the Secretary 
determines that a larger payment is--
          [(1) essential to accomplish the land management 
        practice or structural practice for which the payment 
        is made; and
          [(2) consistent with the maximization of 
        environmental benefits per dollar expended and the 
        purposes of this chapter specified in section 1240.
    [(c) Timing of Expenditures.--Expenditures under a contract 
entered into under this chapter during a fiscal year may not be 
made by the Secretary until the subsequent fiscal year.

[SEC. 1240H. TEMPORARY ADMINISTRATION OF ENVIRONMENTAL QUALITY 
                    INCENTIVES PROGRAM.

    [(a) Interim Administration.--
          [(1) In general.--During the period beginning on the 
        date of enactment of this section and ending on the 
        termination date provided under paragraph (2), to 
        ensure that technical assistance, cost-share payments, 
        and incentive payments continue to be administered in 
        an orderly manner until such time as assistance can be 
        provided through final regulations issued to implement 
        the environmental quality incentives program 
        established under this chapter, the Secretary shall 
        continue to--
                  [(A) provide technical assistance, cost-share 
                payments, and incentive payments under the 
                terms and conditions of the agricultural 
                conservation program, the Great Plains 
                conservation program, the water quality 
                incentives program, and the Colorado River 
                Basin salinity control program, to the extent 
                the terms and conditions of the program are 
                consistent with the environmental quality 
                incentives program; and
                  [(B) use for those purposes--
                          [(i) any funds remaining available 
                        for the agricultural conservation 
                        program, the Great Plains conservation 
                        program, the water quality incentives 
                        program, and the Colorado River Basin 
                        salinity control program; and
                          [(ii) as the Secretary determines to 
                        be necessary, any funds authorized to 
                        be used to carry out the environmental 
                        quality incentives program.
          [(2) Termination of authority.--The authority of the 
        Secretary to carry out paragraph (1) shall terminate on 
        the date that is 180 days after the date of enactment 
        of this section.
    [(b) Permanent Administration.--Effective beginning on the 
termination date provided under subsection (a)(2), the 
Secretary shall provide technical assistance, cost-share 
payments, and incentive payments for structural practices and 
land management practices related to crop and livestock 
production in accordance with final regulations issued to carry 
out the environmental quality incentives program.]

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 goals 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) 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.
          (8) Practice.--The term ``practice'' means 1 or more 
        structural practices, land management practices, and 
        comprehensive nutrient management planning practices.
          (9) Producer.--The term ``producer'' has the meaning 
        given the term in section 102 of the Agricultural 
        Market Transition Act (7 U.S.C. 7202).
          (10) 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, through an environmental quality incentives 
        program in accordance with this chapter.
          (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 
        environmental quality incentives program to--
                  (A) any producer that is eligible for 
                assistance under this chapter; or
                  (B) any producer that is engaged in the 
                production of an agricultural commodity.
    (b) Application and Term.--With respect to practices 
implemented under this chapter--
          (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 maximizes 
        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 when 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 
                        this chapter 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 this chapter.
    (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.--Any cost-share payments received by a 
                producer from a State or private organization 
                or person for the implementation of 1 or more 
                practices 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 this chapter if the producer receives cost-share 
        payments or other benefits for the same practice on the 
        same land under chapter 1 and this chapter.
    (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 this chapter 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 this chapter 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 this chapter 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 private person.
                  (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 private person 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 private persons 
                        that have been certified by the 
                        Secretary under section 1244 (f)(3) 
                        shall be eligible to provide technical 
                        assistance under this subsection.
                          (ii) Quality assurance.--The 
                        Secretary shall ensure that certified 
                        private 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 environmental 
                        quality incentives 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 private 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.
    (h) 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; or
                  (v) air quality;
          (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 this chapter, a producer shall agree--
          (1) to implement an environmental quality incentives 
        program plan that describes conservation and 
        environmental goals 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 this chapter;
          (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 this chapter, as determined by the 
        Secretary;
          (5) to supply information as required by the 
        Secretary to determine compliance with the 
        environmental quality incentives 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 
        environmental quality incentives 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 environmental quality incentives 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 this chapter, 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 environmental quality incentives 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 an environmental quality incentives 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 this chapter 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 this chapter 
using social security numbers and taxpayer identification 
numbers, respectively.

SEC. 1240H. CONSERVATION INNOVATION GRANTS.

    (a) In General.--From funds made available to carry out 
this chapter, 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 Federal share 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 
environmental quality incentives 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 this chapter;
          (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; and
                  (C) protection of source water for human 
                consumption; and
          (3) leverage funds made available to carry out this 
        chapter with matching funds provided by State and local 
        governments and private organizations to promote 
        environmental enhancement and protection in conjunction 
        with agricultural production.
    (c) 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 June 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.

                  [CHAPTER 5--CONSERVATION FARM OPTION


[SEC. 1240M. CONSERVATION FARM OPTION.

    [(a) In General.--The Secretary shall establish 
conservation farm option pilot programs for producers of wheat, 
feed grains, cotton, and rice.
    [(b) Eligible Owners and Producers.--An owner or producer 
with a farm that has contract acreage enrolled in the 
agricultural market transition program established under the 
Agricultural Market Transition Act shall be eligible to 
participate in the conservation farm option offered under a 
pilot program under subsection (a) if the owner or producer 
meets the conditions established under section (e).
    [(c) Purposes.--The purposes of the conservation farm 
option pilot programs shall include--
          [(1) conservation of soil, water, and related 
        resources;
          [(2) water quality protection or improvement;
          [(3) wetland restoration, protection, and creation;
          [(4) wildlife habitat development and protection; or
          [(5) other similar conservation purposes.
    [(d) Conservation Farm Plan.--
          [(1) In general.--To be eligible to enter into a 
        conservation farm option contract, an owner or producer 
        must prepare and submit to the Secretary, for approval, 
        a conservation farm plan that shall become a part of 
        the conservation farm option contract.
          [(2) Requirements.--A conservation farm plan shall--
                  [(A) describe the resource-conserving crop 
                rotations, and all other conservation 
                practices, to be implemented and maintained on 
                the acreage that is subject to contract during 
                the contract period;
                  [(B) contain a schedule for the 
                implementation and maintenance of the practices 
                described in the conservation farm plan;
                  [(C) comply with highly erodible land and 
                wetland conservation requirements of this 
                title; and
                  [(D) contain such other terms as the 
                Secretary may require.
    [(e) Contracts.--
          [(1) In general.--On approval of a conservation farm 
        plan, the Secretary may enter into a contract with the 
        owner or producer that specifies the acres being 
        enrolled and the practices being adopted.
          [(2) Duration of contract.--The contract shall be for 
        a period of 10 years. The contract may be renewed for a 
        period of not to exceed 5 years on mutual agreement of 
        the Secretary and the owner or producer.
          [(3) Consideration.--In exchange for payments under 
        this subsection, the owner or producer shall not 
        participate in and shall forgo payments under--
                  [(A) the conservation reserve program 
                established under subchapter B of chapter 1;
                  [(B) the wetlands reserve program established 
                under subchapter C of chapter 1; and
                  [(C) the environmental quality incentives 
                program established under chapter 4.
          [(4) Owner or producer responsibilities under the 
        agreement.--Under the terms of the contract entered 
        into under this section, an owner or producer shall 
        agree to--
                  [(A) actively comply with the terms and 
                conditions of the approved conservation farm 
                plan;
                  [(B) keep such records as the Secretary may 
                reasonably require for purposes of evaluation 
                of the implementation of the conservation farm 
                plan; and
                  [(C) not engage in any activity that would 
                defeat the purposes of the conservation farm 
                option pilot program.
          [(5) Payments.--The Secretary shall offer an owner or 
        producer annual payments under the contract that are 
        equivalent to the payments the owner or producer would 
        have received under the conservation reserve program, 
        the wetlands reserve program, and the environmental 
        quality incentives program.
          [(6) Balance of benefits.--The Secretary shall not 
        permit an owner or producer to terminate a conservation 
        reserve program contract and enter a conservation farm 
        option contract if the Secretary determines that such 
        action will reduce net environmental benefits.
    [(f) Secretarial Determinations.--
          [(1) Acreage estimates.--Prior to each year during 
        which the Secretary intends to offer conservation 
        reserve program contracts, the Secretary shall estimate 
        the number of acres that--
                  [(A) will be retired under the conservation 
                farm option under the terms and conditions the 
                Secretary intends to offer for that program; 
                and
                  [(B) would be retired under the conservation 
                reserve program if the conservation farm option 
                were not available.
          [(2) Total land retirement.--The Secretary shall 
        announce a number of acres to be enrolled in the 
        conservation reserve program that will result in a 
        total number of acres retired under the conservation 
        reserve program and the conservation farm option that 
        does not exceed the amount estimated under paragraph 
        (1)(B) for the current or future years.
          [(3) Limitation.--The Secretary shall not enroll 
        additional conservation reserve program contracts to 
        offset the land retired under the conservation farm 
        option.
    [(g) Commodity Credit Corporation.--The Secretary shall use 
the funds, authorities, and facilities of the Commodity Credit 
Corporation to carry out this subsection.
    [(h) Funding.--Of the funds of the Commodity Credit 
Corporation, the Corporation shall make available to carry out 
this section--
          [(1) $7,500,000 for fiscal year 1997;
          [(2) $15,000,000 for fiscal year 1998;
          [(3) $25,000,000 for fiscal year 1999;
          [(4) $37,500,000 for fiscal year 2000;
          [(5) $50,000,000 for fiscal year 2001; and
          [(6) $62,500,000 for fiscal year 2002.

                 CHAPTER 5--OTHER CONSERVATION PROGRAMS

SEC. 1240M. WILDLIFE HABITAT INCENTIVE PROGRAM.

    (a) Definitions.--In this section:
          (1) Endangered species.--The term `endangered 
        species' has the meaning given the term in section 3 of 
        the Endangered Species Act of 1973 (16 U.S.C. 1532).
          (2) Program.--The term `program' means the wildlife 
        habitat incentive program established under subsection 
        (b).
          (3) Threatened species.--The term `threatened 
        species' has the meaning given the term in section 3 of 
        the Endangered Species Act of 1973 (16 U.S.C. 1532).
    (b) Establishment.--In consultation with the State 
technical committees established under section 1261 of the Food 
Security Act of 1985 (16 U.S.C. 3861), the Secretary shall 
establish the wildlife habitat incentive program.
    (c) Cost-Share Payments.--
          (1) In general.--Under the program, the Secretary 
        shall make cost-share payments to owners of eligible 
        land to develop wildlife habitat approved by the 
        Secretary.
          (2) Endangered and threatened species.--Of the funds 
        made available to carry out this subsection, the 
        Secretary shall use at least 15 percent to make cost-
        share payments to carry out projects and activities 
        relating to endangered species and threatened species.
    (d) Pilot Program for Essential Plant and Animal Habitat.--
Under the program, the Secretary may establish procedures to 
use not more than 15 percent of funds made available to acquire 
and enroll eligible land for periods of at least 15 years to 
protect essential (as determined by the Secretary) plant and 
animal habitat.
    (e) Funding.--Of the funds of the Commodity Credit 
Corporation, the Secretary shall use to carry out this section 
(including the provision of technical assistance)--
          (1) $50,000,000 for fiscal year 2002;
          (2) $100,000,000 for each of fiscal years 2003 and 
        2004; and
          (3) $125,000,000 for each of fiscal years 2005 and 
        2006.

SEC. 1240N. WATERSHED RISK REDUCTION.

    (a) In General.--The Secretary, acting through the Natural 
Resources Conservation Service (referred to in this section as 
the ``Secretary''), in cooperation with landowners and land 
users, may carry out such projects and activities (including 
the purchase of floodplain easements for runoff retardation and 
soil erosion prevention) as the Secretary determines to be 
necessary to safeguard lives and property from floods, drought, 
and the products of erosion on any watershed in any case in 
which fire, flood, or any other natural occurrence has caused, 
is causing or may cause a sudden impairment of that watershed.
    (b) Priority.--In carrying out this section, the Secretary 
shall give priority to any project or activity described in 
subsection (a) that is carried out on a floodplain adjacent to 
a major river, as determined by the Secretary.
    (c) Prohibition on Duplicative Funds.--No project or 
activity under subsection (a) that is carried out using funds 
made available under this section may be carried out using 
funds made available under any Federal disaster relief program 
administered by the Secretary relating to floods.
    (d) Funding.--There is authorized to be appropriated to 
carry out this section $15,000,000 for each of fiscal years 
2002 through 2006.

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

    (a) In General.--The Secretary, in consultation with the 
Great Lakes Commission created by Article IV of the Great Lakes 
Basin Compact (82 Stat. 415) and in cooperation with the 
Administrator of the Environmental Protection Agency and the 
Secretary of the Army, may carry out the Great Lakes basin 
program for soil erosion and sediment control (referred to in 
this section as the ``program''.
    (b) Assistance.--In carrying out the program, the Secretary 
may--
          (1) provide project demonstration grants, provide 
        technical assistance, and carry out information and 
        education programs to improve water quality in the 
        Great Lakes basin by reducing soil erosion and 
        improving sediment control; and
          (2) provide a priority for projects and activities 
        that directly reduce soil erosion or improve sediment 
        control.
    (c) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $5,000,000 for 
each of fiscal years 2002 through 2006.

SEC. 1240P. CONSERVATION OF PRIVATE GRAZING LAND.

    (a) Findings.--Congress finds that--
          (1) private grazing land constitutes nearly \1/2\ of 
        the non-Federal land of the United States and is basic 
        to the environmental, social, and economic stability of 
        rural communities;
          (2) private grazing land contains a complex set of 
        interactions among soil, water, air, plants, and 
        animals;
          (3) grazing land constitutes the single largest 
        watershed cover type in the United States and 
        contributes significantly to the quality and quantity 
        of water available for all of the many uses of the 
        land;
          (4) private grazing land constitutes the most 
        extensive wildlife habitat in the United States;
          (5) private grazing land can provide opportunities 
        for improved nutrient management from land application 
        of animal manures and other by-product nutrient 
        resources;
          (6) owners and managers of private grazing land need 
        to continue to recognize conservation problems when the 
        problems arise and receive sound technical assistance 
        to improve or conserve grazing land resources to meet 
        ecological and economic demands;
          (7) new science and technology must continually be 
        made available in a practical manner so owners and 
        managers of private grazing land may make informed 
        decisions concerning vital grazing land resources;
          (8) agencies of the Department with private grazing 
        land responsibilities are the agencies that have the 
        expertise and experience to provide technical 
        assistance, education, and research to owners and 
        managers of private grazing land for the long-term 
        productivity and ecological health of grazing land;
          (9) although competing demands on private grazing 
        land resources are greater than ever before, assistance 
        to private owners and managers of private grazing land 
        is currently limited and does not meet the demand and 
        basic need for adequately sustaining or enhancing the 
        private grazing land resources; and
          (10) private grazing land can be enhanced to provide 
        many benefits to all citizens of the United States 
        through voluntary cooperation among owners and managers 
        of the land, local conservation districts, and the 
        agencies of the Department responsible for providing 
        assistance to owners and managers of land and to 
        conservation districts.
    (b) Purpose.--The purpose of this section is to authorize 
the Secretary to provide a coordinated technical, educational, 
and related assistance program to conserve and enhance private 
grazing land resources and provide related benefits to all 
citizens of the United States by--
          (1) establishing a coordinated and cooperative 
        Federal, State, and local grazing conservation program 
        for management of private grazing land;
          (2) strengthening technical, educational, and related 
        assistance programs that provide assistance to owners 
        and managers of private grazing land;
          (3) conserving and improving wildlife habitat on 
        private grazing land;
          (4) conserving and improving fish habitat and aquatic 
        systems through grazing land conservation treatment;
          (5) protecting and improving water quality;
          (6) improving the dependability and consistency of 
        water supplies;
          (7) identifying and managing weed, noxious weed, and 
        brush encroachment problems on private grazing land; 
        and
          (8) integrating conservation planning and management 
        decisions by owners and managers of private grazing 
        land, on a voluntary basis.
    (c) Definition of Private Grazing Land.--In this section, 
the term ``private grazing land'' means rangeland, pastureland, 
grazed forest land, hay land, and any other non-federally owned 
land that is--
          (1) private;
          (2) owned by a State; or
          (3) under the jurisdicition of an Indian tribe.
    (d) Private Grazing Land Conservation Assistance.--
          (1) In general.--Subject to the availability of 
        appropriations for this section, the Secretary shall 
        establish a voluntary program to provide technical, 
        educational, and related assistance to owners and 
        managers of private grazing land and public agencies, 
        through local conservation districts, to enable the 
        landowners, managers, and public agencies to 
        voluntarily carry out activities that are consistent 
        with this section, including--
                  (A) maintaining and improving private grazing 
                land and the multiple values and uses that 
                depend on private grazing land;
                  (B) implementing grazing land management 
                technologies;
                  (C) managing resources on private grazing 
                land, including--
                          (i) planning, managing, and treating 
                        private grazing land resources;
                          (ii) ensuring the long-term 
                        sustainability of private grazing land 
                        resources;
                          (iii) harvesting, processing, and 
                        marketing private grazing land 
                        resources; and
                          (iv) identifying and managing weed, 
                        noxious weed, and brush encroachment 
                        problems;
                  (D) protecting and improving the quality and 
                quantity of water yields from private grazing 
                land;
                  (E) maintaining and improving wildlife and 
                fish habitat on private grazing land;
                  (F) enhancing recreational opportunities on 
                private grazing land;
                  (G) maintaining and improving the aesthetic 
                character of private grazing land; and
                  (H) identifying the opportunities and 
                encouraging the diversification of private 
                grazing land enterprises.
          (2) Program elements.--
                  (A) Funding.--Funds may be used to carry out 
                this section only if funds are provided through 
                a specific line-item in the annual 
                appropriations for the Natural Resources 
                Conservation Service.
                  (B) Technical assistance and education.--
                Personnel of the Department of Agriculture 
                trained in pasture and range management shall 
                be made available under the program to deliver 
                and coordinate technical assistance and 
                education to owners and managers of private 
                grazing land, at the request of the owners and 
                managers.
    (e) Grazing Technical Assistance Self-Help.--
          (1) Findings.--Congress finds that--
                  (A) there is a severe lack of technical 
                assistance for farmers and ranchers that graze 
                livestock;
                  (B) Federal budgetary constraints preclude 
                any significant expansion, and may force a 
                reduction of, current levels of technical 
                support; and
                  (C) farmers and ranchers have a history of 
                cooperatively working together to address 
                common needs in the promotion of their products 
                and in the drainage of wet areas through 
                drainage districts.
          (2) Establishment of grazing demonstration 
        districts.--In accordance with paragraph (2), the 
        Secretary may establish 2 grazing management 
        demonstration districts on the recommendation of the 
        grazing land conservation initiative steering 
        committee.
          (3) Procedure.--
                  (A) Proposal.--Within a reasonable time after 
                the submission of a proposal of an organization 
                of farmers or ranchers engaged in grazing in a 
                district, subject to subparagraphs (B) through 
                (F), the Secretary establish a grazing 
                management district in accordance with the 
                proposal.
                  (B) Funding.--The terms and conditions of the 
                funding and operation of the grazing management 
                district shall be proposed by the farmers and 
                ranchers engaged in grazing in the district.
                  (C) Approval.--The Secretary shall approve 
                the proposal if the Secretary determines that 
                the proposal--
                          (i) is reasonable;
                          (ii) will promote sound grazing 
                        practices; and
                          (iii) contains provisions similar to 
                        the provisions contained in the beef 
                        promotion and research order issued 
                        under section 4 of the Beef Research 
                        and Information Act (7 U.S.C. 2903) in 
                        effect on April 4, 1996.
                  (D) Area included.--The area proposed to be 
                included in a grazing management district shall 
                be determined by the Secretary on the basis of 
                the proposal submitted by farmers or ranchers 
                under subparagraph (A).
                  (E) Authorization.--The Secretary may use 
                authority under the Agricultural Adjustment Act 
                (7 U.S.C. 601 et seq.), reenacted with 
                amendments by the Agricultural Marketing 
                Agreement Act of 1937, to operate, on a 
                demonstration basis, a grazing management 
                district.
                  (F) Activities.--The activities of a grazing 
                management district shall be scientifically 
                sound activities, as determined by the 
                Secretary in consultation with a technical 
                advisory committee composed of farmers, 
                ranchers and technical experts.
    (f) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $60,000,000 for 
each of fiscal years 2002 through 2006.''.

           *       *       *       *       *       *       *


SEC. 1241. FUNDING.

    (a) Mandatory Expenses.--For each of fiscal years 1996 
through [2002] 2006, the Secretary shall use the funds of the 
Commodity Credit Corporation to carry out the programs 
(including the provision of technical assistance) authorized 
by--
          (1) subchapter B of chapter 1 of subtitle D 
        (including contracts extended by the Secretary pursuant 
        to section 1437 of the Food, Agriculture, Conservation, 
        and Trade Act of 1990 (Public Law 101-624; 16 U.S.C. 
        3831 note));
          (2) [subchapter C] subchapters C and D of chapter 1 
        of subtitle D; and
          (3) chapter 4 of subtitle D.
    [(b) Environmental Quality Incentives Program.--
          [(1) In general.--Of the funds of the Commodity 
        Credit Corporation, the Secretary shall make available 
        $130,000,000 for fiscal year 1996, and $200,000,000 for 
        each of fiscal years 1997 through 2002, for providing 
        technical assistance, cost-share payments, incentive 
        payments, and education under the environmental quality 
        incentives program under chapter 4 of subtitle D.
          [(2) Livestock production.--For each of fiscal years 
        1996 through 2002, 50 percent of the funding available 
        for technical assistance, cost-share payments, 
        incentive payments, and education under the 
        environmental quality incentives program shall be 
        targeted at practices relating to livestock 
        production.]
    (b) Environmental Quality Incentives Program.--
          (1) In general.--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--
                  (A) $500,000,000 for fiscal year 2002;
                  (B) $1,050,000,000 for fiscal year 2003;
                  (C) $1,200,000,000 for fiscal year 2004;
                  (D) $1,200,000,000 for fiscal year 2005; and
                  (E) $1,250,000,000 for fiscal year 2006.
          (2) Obligation of funds.--
                  (A) In general.--If a contract under the 
                environmental quality incentives program under 
                chapter 4 of subtitle D is terminated, or work 
                under the contract is completed, prior to the 
                end of the term of the contract and funds 
                obligated for the contract have not been 
                expended, the unexpended funds may be used to 
                carry out any other contract under the program 
                during the same fiscal year in which the 
                original contract was terminated.
                  (B) Additional uses of funds.--Funding for 
                contracts that terminate under the program 
                administered under subchapter B of chapter 1 
                may be transferred to, and used to carry out, 
                the program under chapter 4 of subtitle D.
    (c) Conservation Security Program.--Of the funds of the 
Commodity Credit Corporation, the Corporation shall make 
available for each of fiscal years 2002 through 2006 such sums 
as are necessary to carry out subchapter A of chapter 2 
(including the provision of technical assistance).
    (d) Farmland Protection Program.--
          (1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use to carry out 
        subchapter B of chapter 2 (including the provision of 
        technical assistance)--
                  (A) $150,000,000 for fiscal year 2002;
                  (B) $200,000,000 for each of fiscal years 
                2003 and 2004;
                  (C) $225,000,000 for fiscal year 2005; and
                  (D) $250,000,000 for fiscal year 2006.
          (2) Cost sharing.--
                  (A) Farmland protection.--
                          (i) In general.--The share of the 
                        cost of purchasing a conservation 
                        easement or other interest described in 
                        section 1238I(a) provided under this 
                        subsection shall not exceed 50 percent.
                          (ii) State and local contributions.--
                        In a case in which a State or local 
                        government purchases an easement under 
                        section 1238I(a), not more than 25 
                        percent of the share of the cost of the 
                        easement contributed by the State or 
                        local government may be provided--
                                  (I) by a private landowner; 
                                or
                                  (II) in the form of in-kind 
                                goods or services.
                  (B) Market viability contributions.--As a 
                condition of receiving a grant under section 
                1238J(a), a grantee shall provide funds in an 
                amount equal to the amount of the grant.

           *       *       *       *       *       *       *


SEC. 1243. [ADMINISTRATION.] ADMINISTRATION OF CCEP.

    (a) Plans.--The Secretary shall, to the extent practicable, 
avoid duplication in--
          (1) the conservation plans required for--
                  (A) highly erodible land conservation under 
                subtitle B;
                  (B) the conservation reserve program 
                established under subchapter B of chapter 1 of 
                subtitle D; and
                  (C) the wetlands reserve program established 
                under subchapter C of chapter 1 of subtitle D; 
                and
          (2) the environmental quality incentives program 
        established under chapter 4 of subtitle D.
    (b) Acreage Limitation.--
          (1) In general.--[The Secretary] Except for land 
        enrolled under continuous signup (as described in 
        section 1231 (b)(6)), the Secretary shall not enroll 
        more than 25 percent of the cropland in any county in 
        the programs administered under the conservation 
        reserve and wetlands reserve programs established under 
        subchapters B and C, respectively, of chapter 1 of 
        subtitle D. Not more than 10 percent of the cropland in 
        a county may be subject to an easement acquired under 
        the subchapters.
          (2) Exception.--The Secretary may exceed the 
        limitations in paragraph (1) if the Secretary 
        determines that--

           *       *       *       *       *       *       *

    (e) Regulations.--Not later than 90 days after the date of 
enactment of the Federal Agriculture Improvement and Reform Act 
of 1996, the Secretary shall issue regulations to implement the 
conservation reserve and wetlands reserve programs established 
under chapter 1 of subtitle D.
    (f) Partnerships and Cooperation.--
          (1) In general.--In carrying out any program under 
        subtitle D, the Secretary may designate special 
        projects, as recommended by the State Conservationist, 
        after consultation with the State technical committee, 
        to enhance technical and financial assistance provided 
        to owners, operators, and producers to address 
        environmental issues affected by agricultural production 
        with respect to--
                  (A) meeting the purposes of--
                          (i) the Federal Water Pollution 
                        Control Act (33 U.S.C. 1251 et seq.) or 
                        comparable State laws in impaired or 
                        threatened watersheds;
                          (ii) the Safe Drinking Water Act (42 
                        U.S.C. 300f et seq.) or comparable 
                        State laws in watersheds providing 
                        water for drinking water supplies; or
                          (iii) the Clean Air Act (42 U.S.C. 
                        7401 et seq.) or comparable State laws; 
                        or
                  (B) watersheds of special significance or 
                other geographic areas of environmental 
                sensitivity, such as wetland, including State 
                or multi-State projects--
                          (i) to facilitate surface and ground 
                        water conservation;
                          (ii) to protect water quality;
                          (iii) to protect endangered or 
                        threatened species or habitat, such as 
                        conservation corridors;
                          (iv) to improve methods of 
                        irrigation;
                          (v) to convert acreage from irrigated 
                        production; or
                          (vi) to reduce nutrient loads of 
                        watersheds.''.
          (2) Incentives.--To realize the purposes of the 
        special projects under paragraph (1), the Secretary may 
        provide incentives to owners, operators, and producers 
        participating in the special projects to encourage 
        partnerships and sharing of technical and financial 
        resources among owners, operators, and producers and 
        among owners, operators, and producers and governmental 
        and nongovernmental organizations.
          (3) Flexibility.--
                  (A) In general.--The Secretary may enter into 
                agreements with States (including State 
                agencies and units of local government) and 
                nongovernmental organizations to allow greater 
                flexibility to adjust the application of 
                eligibility criteria, approved practices, 
                innovative conservation practices, and other 
                elements of the programs under this title to 
                better reflect unique local circumstances and 
                purposes in a manner that is consistent with--
                          (i) environmental enhancement and 
                        long-term sustainability of the natural 
                        resource base; and
                          (ii) the purposes of this title.
                  (B) Plan.--Each party to an agreement under 
                subparagraph (A) shall submit to the Secretary, 
                for approval by the Secretary, a special 
                project area or priority area program plan for 
                each program to be carried out by the party 
                that includes--
                          (i) a description of the proposed 
                        adjustments to program implementation 
                        (including a description of how those 
                        adjustments will accelerate the 
                        achievement of environmental benefits);
                          (ii) an analysis of the contribution 
                        those adjustments will make to the 
                        effectiveness of programs in achieving 
                        the purposes of the special project or 
                        priority area program;
                          (iii) a timetable for reevaluating 
                        the need for or performance of the 
                        proposed adjustments;
                          (iv) a description of non-Federal 
                        programs and resources that will 
                        contribute to achieving the purposes of 
                        the special project or priority area 
                        program; and
                          (v) a plan for regular monitoring, 
                        evaluation, and reporting of progress 
                        toward the purposes of the special 
                        project or priority area program.
          (4) Funding for special projects.--The Secretary may 
        carry out special projects, the purposes of which are 
        to encourage--
                  (A) producers to cooperate in the 
                installation and maintenance of conservation 
                systems that affect multiple agricultural 
                operations;
                  (B) the sharing of information and technical 
                and financial resources;
                  (C) cumulative environmental benefits across 
                operations ofproducers; and
                  (D) the development and demonstration of 
                innovative conservation methods.
          (5) Funding.--
                  (A) In general.--Subject to subparagraph (B), 
                the Secretary shall use 5 percent of the funds 
                made available for each fiscal year under 
                section 1241(b) to carry out activities that 
                are authorized under the environmental quality 
                incentives program established under chapter 4 
                of subtitle D.
                  (B) Unused funding.--Any funds made available 
                for a fiscal year under subparagraph (A) that 
                are not obligated by June 1 of the fiscal year 
                may be used to carry out other activities under 
                the environmental quality incentives program 
                during the fiscal year in which the funding 
                becomes available.

SEC. 1244. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    (a) Good Faith Reliance.--
          (1) In general.--Notwithstanding any other provision 
        of law, except as provided in paragraph (4), the 
        Secretary shall provide equitable relief to an owner, 
        operator, or producer that has entered into a contract 
        under a conservation program administered by the 
        Secretary, and that is subsequently determined to be in 
        violation of the contract, if the owner, operator, or 
        producer, in attempting to comply with the terms of the 
        contract and enrollment requirements--
                  (A) took actions in good faith reliance on 
                the action or advice of an employee of the 
                Secretary; and
                  (B) had no knowledge that the actions taken 
                were in violation of the contract.
          (2) Types of relief.--The Secretary shall--
                  (A) to the extent the Secretary determines 
                that an owner, operator, or producer has been 
                injured by good faith reliance described in 
                paragraph (1), allow the owner, operator, or 
                producer--
                          (i) to retain payments received under 
                        the contract;
                          (ii) to continue to receive payments 
                        under the contract;
                          (iii) to keep all or part of the land 
                        covered by the contract enrolled in the 
                        applicable program;
                          (iv) to reenroll all or part of the 
                        land covered by the contract in the 
                        applicable program; or
                          (v) to receive any other equitable 
                        relief the Secretary considers 
                        appropriate; and
                  (B) require the owner, operator, or producer 
                to take such actions as are necessary to remedy 
                any failure to comply with the contract.
          (3) Relationship to other law.--The authority to 
        provide relief under this subsection shall be in 
        addition to any other authority provided in this or any 
        other Act.
          (4) Exceptions.--This section shall not apply to--
                  (A) any pattern of conduct in which an 
                employee of the Secretary takes actions or 
                provides advice with respect to an owner, 
                operator, or producer that the employee and the 
                owner, operator, or producer know are 
                inconsistent with applicable law (including 
                regulations); or
                  (B) an owner, operator, or producer takes any 
                action, independent of any advice or 
                authorization provided by an employee of the 
                Secretary, that the owner, operator, or 
                producer knows or should have known to be 
                inconsistent with applicable law (including 
                regulations).
          (5) Applicability of relief.--Relief under this 
        section shall be available for contracts in effect on 
        or after the date of enactment of this section.
    (b) Education, Outreach, Monitoring, and Evaluation.--In 
carrying out any conservation program administered by the 
Secretary, the Secretary--
          (1) shall provide education, outreach, training, 
        monitoring, evaluation, technical assistance, and 
        related services to agricultural producers (socially 
        disadvantaged agricultural producers, beginning farmers 
        and ranchers, Indian tribes (as those terms are 
        defined in section 1238), and limited resource 
        agricultural producers);
          (2) may enter into contracts with States (including 
        State agencies and units of local government), private 
        nonprofit, community-based organizations, and 
        educational institutions with demonstrated experience 
        in providing the services described in paragraph (1), 
        to provide those services; and
          (3) shall use such sums as are necessary from funds 
        of the Commodity Credit Corporation to carry out 
        activities described in paragraphs (1) and (2).
    (c) Beginning Farmers and Ranchers and Indian Tribes.--In 
carrying out any conservation program administered by the 
Secretary, the Secretary may provide to beginning farmers and 
ranchers and Indian tribes (as those terms are defined in 
section 1238) and limited resource agricultural producers 
incentives to participate in the conservation program to--
          (1) foster new farming opportunities; and
          (2) enhance environmental stewardship over the long 
        term.
    (d) Program Evaluation.--The Secretary shall maintain data 
concerning conservation security plans, conservation practices 
planned or implemented, environmental outcomes, economic costs, 
and related matters under conservation programs administered by 
the Secretary.
    (e) Mediation and Informal Hearings.--If the Secretary 
makes a decision under a conservation program administered by 
the Secretary that is adverse to an owner, operator, or 
producer, at the request of the owner, operator, or producer, 
the Secretary shall provide the owner, operator, or producer 
with mediation services or an informal hearing on the decision.
    (f) Technical Assistance.--
          (1) In general.--Under any conservation program 
        administered by the Secretary, subject to paragraph 
        (2), technical assistance provided by persons certified 
        under paragraph (3) (including farmers and ranchers) 
        may include--
                  (A) conservation planning;
                  (B) design, installation, and certification 
                of conservation practices;
                  (C) conservation training for producers; and
                  (D) such other conservation activities as the 
                Secretary determines to be appropriate.
          (2) Outside assistance.--
                  (A) In general.--The Secretary may contract 
                directly with qualified persons not employed by 
                the Department to provide conservation 
                technical assistance.
                  (B) Payment by secretary.--Subject to 
                subparagraph (C), the Secretary may provide a 
                payment to an owner, operator, or producer 
                enrolled in a conservation program administered 
                by the Secretary if the owner, operator, or 
                producer elects to obtain technical assistance 
                from a person certified to provide technical 
                assistance under this subsection.
                  (C) Nonprivate providers.--In determining 
                whether to provide a payment under subparagraph 
                (B) to a nonprivate provider, the Secretary 
                shall provide a payment if the provision of the 
                payment would result in an increase in the 
                total amount of technical assistance available 
                to producers, as determined by the Secretary.
          (3) Certification of providers of technical 
        assistance.--
                  (A) Procedures.--
                          (i) In general.--The Secretary shall 
                        establish procedures for certifying 
                        persons not employed by the Department 
                        to provide technical assistance in 
                        planning, designing, or certifying 
                        activities to participate in any 
                        conservation program administered by 
                        the Secretary to agricultural producers 
                        and landowners participating, or 
                        seeking to participate, in conservation 
                        programs administered by the Secretary.
                          (ii) Non-federal assistance.--The 
                        Secretary may request the services of, 
                        and enter into a cooperative agreement 
                        with, a State water quality agency, 
                        State fish and wildlife agency, State 
                        forestry agency, or any other 
                        governmental or nongovernmental 
                        organization or person considered 
                        appropriate to assist in providing the 
                        technical assistance necessary to 
                        develop and implement conservation 
                        plans under this title.
                  (B) Standards.--The Secretary shall establish 
                standards for the conduct of--
                          (i) the certification process 
                        conducted by the Secretary; and
                          (ii) periodic recertification by the 
                        Secretary of providers.
                  (C) Certification required.--
                          (i) In general.--A provider may not 
                        provide to any producer technical 
                        assistance described in paragraph 
                        (3)(A)(i) unless the provider is 
                        certified by the Secretary.
                          (ii) Waiver.--The Secretary may 
                        exempt a provider from any requirement 
                        of this subparagraph if the Secretary 
                        determines that the provider has been 
                        certified or recertified to provide 
                        technical assistance through a program 
                        the standards of which meet or exceed 
                        standards established by the Secretary 
                        under subparagraph (B).
                  (D) Fee.--
                          (i) In general.--In exchange for 
                        certification or recertification, a 
                        provider shall pay a fee to the 
                        Secretary in an amount determined by 
                        the Secretary.
                          (ii) Account.--A fee paid to the 
                        Secretary under clause (i) shall be--
                                  (I) credited to the account 
                                in the Treasury that incurs 
                                costs relating to implementing 
                                this subsection; and
                                  (II) made available to the 
                                Secretary for use for 
                                conservation programs 
                                administered by the Secretary, 
                                without further appropriation, 
                                until expended.
                          (iii) Waiver.--The Secretary may 
                        waive any requirement of any provider 
                        to pay a fee under this subparagraph if 
                        the provider qualifies for a waiver 
                        under subparagraph (C)(ii).
                  (E) Other requirements.--The Secretary may 
                establish such other requirements as the 
                Secretary determines are necessary to carry out 
                this subsection.
    (g) Privacy of Personal Information Relating to Natural 
Resources Conservation Programs.--
          (1) Information received for technical and financial 
        assistance.--
                  (A) In general.--In accordance with section 
                1770 and section 552(b)(3) of title 5, United 
                States Code, except as provided in subparagraph 
                (C) and paragraph (3), information described in 
                subparagraph (B)--
                          (i) shall not be considered to be 
                        public information; and
                          (ii) shall not be released to any 
                        person or Federal, State, local agency 
                        or Indian tribe (as defined in section 
                        1238) outside the Department of 
                        Agriculture.
                  (B) Information.--The information referred to 
                in subparagraph (A) is information--
                          (i) provided to, or developed by, the 
                        Secretary (including a contractor of 
                        the Secretary) for the purpose of 
                        providing technical or financial 
                        assistance to an owner, operator, or 
                        producer with respect to any natural 
                        resources conservation program 
                        administered by the Natural Resources 
                        Conservation Service or the Farm 
                        Service Agency; and
                          (ii) that is proprietary to the 
                        agricultural operation or land that is 
                        a part of an agricultural operation of 
                        the owner, operator, or producer.
                  (C) Exception.--Information compiled by the 
                Secretary, such as a list of owners, operators, 
                or producers that have received payments from 
                the Secretary and the amounts received, shall 
                be--
                          (i) considered to be public 
                        information; and
                          (ii) may be released to any--
                                  (I) person;
                                  (II) Indian tribe (as defined 
                                in section 1238); or
                                  (III) Federal, State, local 
                                agency outside the Department 
                                of Agriculture.
          (2) Inventory, monitoring, and site specific 
        information.--Except as provided in paragraph (3) and 
        notwithstanding any other provision of law, in order to 
        maintain the personal privacy, confidentiality, and 
        cooperation of owners, operators, and producers, and to 
        maintain the integrity of sample sites, the specific 
        geographic locations of data gathering sites of the 
        National Resources Inventory of the Department of 
        Agriculture, and the information generated by 
        those sites--
                  (A) shall not be considered to be public 
                information; and
                  (B) shall not be released to any person or 
                Federal, State, local, or tribal agency outside 
                the Department.
          (3) Exceptions.--
                  (A) Release and disclosure for enforcement.--
                The Secretary may release or disclose to the 
                Attorney General information covered by 
                paragraph (1) or (2) to the extent necessary to 
                enforce the natural resources conservation 
                programs referred to in paragraph (1).
                  (B) Disclosure to cooperating persons and 
                agencies.--
                          (i) In general.--The Secretary may 
                        release or disclose information covered 
                        by paragraph (1) or (2) to a person or 
                        Federal, State, local, or tribal agency 
                        working in cooperation with the 
                        Secretary in providing technical and 
                        financial assistance described in 
                        paragraph (1) or collecting information 
                        from National Resources Inventory data 
                        gathering sites.
                          (ii) Use of information.--The person 
                        or Federal, State, local, or tribal 
                        agency that receives information 
                        described in clause (i) may release the 
                        information only for the purpose of 
                        assisting the Secretary--
                                  (I) in providing the 
                                requested technical or 
                                financial assistance; or
                                  (II) in collecting 
                                information from National 
                                Resources Inventory data 
                                gathering sites.
                  (C) Statistical and aggregate information.--
                Information covered by paragraph (1) or (2) may 
                be disclosed to the public if the information 
                has been transformed into a statistical or 
                aggregate form that does not allow the 
                identification of any--
                          (i) individual owner, operator, or 
                        producer; or
                          (ii) specific data gathering site.
                  (D) Consent of owner, operator, or 
                producer.--
                          (i) In general.--An owner, operator, 
                        or producer may consent to the 
                        disclosure of information described in 
                        paragraph (1) or (2).
                          (ii) Condition of other programs.--
                        The participation of the owner, 
                        operator, or producer in, and the 
                        receipt of any benefit by the owner, 
                        operator, or producer under, this title 
                        or any other program administered by 
                        the Secretary may not be conditioned on 
                        the owner, operator, or producer 
                        providing consent under this paragraph.
          (4) Violations; penalties.--Section 1770(c) shall 
        apply with respect to the release of information 
        collected in any manner or for any purpose prohibited 
        by this subsection.
    (h) Indian Tribes.--In carrying out any conservation 
program administered by the Secretary on land under the 
jurisdiction of an Indian tribe (as defined in section 1238), 
the Secretary shall cooperate with the tribal government of the 
Indian tribe to ensure, to the maximum extent practicable, that 
the program is administered in a fair and equitable manner.

           *       *       *       *       *       *       *


                [Subtitle G--State Technical Committees]

                 Subtitle G--State Technical Committees

SEC. 1261. ESTABLISHMENT.

    (a) In General.--The Secretary shall establish in each 
State a technical committee to assist the Secretary in the 
technical considerations relating to implementation of any 
private land conservation program administered by the 
Secretary.
    (b) Standards.--Not later than 180 days after the date of 
enactment of the Agriculture, Conservation, and Rural 
Enhancement Act of 2001, the Secretary shall develop standards 
to be used by each State technical committee in the development 
of technical guidelines under section 1262(b) for the 
implementation of the conservation programs under this title.
    (c) Composition.--Each State technical committee 
established under subsection (a) shall be composed of 
professional resource managers that represent a variety of 
disciplines in the soil, water, wetland, forest, and wildlife 
sciences, including representatives from among--
          (1) the Natural Resources Conservation Service (a 
        representative of which shall serve as Chair of the 
        Committee);
          (2) the Farm Service Agency;
          (3) the Forest Service;
          (4) the Extension Service;
          (5) the Fish and Wildlife Service;
          (6) such State departments and agencies as the 
        Secretary determines to be appropriate, including--
                  (A) a State fish and wildlife agency;
                  (B) a State forester or equivalent State 
                official;
                  (C) a State water resources agency;
                  (D) a State department of agriculture;
                  (E) a State soil conservation agency;
                  (F) a State association of soil and water 
                conservation districts; and
                  (G) land grant colleges and universities;
          (7) other individuals or agency personnel with 
        expertise in soil, water, wetland, and wildlife or 
        forest management as the Secretary determines to be 
        appropriate;
          (8) agricultural producers with demonstrable 
        conservation expertise;
          (9) nonprofit organizations with demonstrable 
        conservation or forestry expertise;
          (10) persons knowledgeable about conservation or 
        forestry techniques; and
          (11) agribusinesses.

SEC. 1262. RESPONSIBILITIES.

    (a) Information.--
          (1) Provision.--
                  (A) In general.--Each State technical 
                committee established under section 1261 shall 
                meet regularly to provide information, 
                analyses, and recommendations to the Secretary.
                  (B) Manner; form.--Information, analyses, and 
                recommendations described in subparagraph (A) 
                shall--
                          (i) be provided in writing, in a 
                        manner that assists the Secretary in 
                        determining matters of fact, technical 
                        merit, or scientific question; and (ii) 
                        reflect the best professional 
                        information and judgment of the 
                        committee.
          (2) Coordination.--The Secretary shall coordinate 
        activities conducted under this section with activities 
        conducted under section 1628 of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (7 U.S.C. 5831).
          (3) Public participation.--Each State technical 
        committee shall--
                  (A) provide public notice of, and permit 
                public attendance at, meetings considering 
                issues of concern related to any program under 
                this title; and
                  (B) distribute meeting minutes to each person 
                attending a meeting described in subparagraph 
                (A).
          (4) Communication.--Each State conservationist shall 
        communicate regularly with members of the State 
        technical committee concerning status of action on 
        recommendations of the committee.
    (b) Other Duties.--Each State technical committee shall 
provide assistance and offer recommendations with respect to 
the technical aspects of--
          (1) wetland protection, restoration, and mitigation 
        requirements;
          (2) criteria to be used in evaluating bids for 
        enrollment of environmentally-sensitive land in the 
        conservation reserve program established under 
        subchapter B of chapter 1;
          (3) guidelines for haying or grazing and the control 
        of weeds to protect nesting wildlife on designated 
        acreage relating to--
                  (A) highly erodible land conservation under 
                subtitle B;
                  (B) wetland conservation under subtitle C; or
                  (C) other conservation requirements
          (4) addressing common weed and pest problems and 
        programs to control weeds and pests found on acreage 
        enrolled in the conservation reserve program;
          (5) guidelines for planting perennial cover for water 
        quality and wildlife habitat improvement on designated 
        land;
          (6) establishing criteria and priorities for State 
        initiatives under the environmental quality incentives 
        program under chapter 4 of subtitle D;
          (7) establishing State and local conservation 
        priorities under the conservation security program 
        under subchapter A of chapter 2 of subtitle D;
          (8) establishing and maintaining natural resource 
        indicators and conservation program monitoring and 
        evaluation systems;
          (9) developing conservation program education and 
        outreach activities;
          (10) evaluating innovative practices and systems 
        under consideration for inclusion in the field office 
        technical guides; and
          (11) other matters, as determined to be appropriate 
        by the Secretary.
    (c) Authority.--
          (1) In general.--Each State technical committee 
        established under section 1261 shall--
                  (A) serve in an advisory capacity; and
                  (B) have no implementation or enforcement 
                authority.
          (2) Consideration by secretary.--In carrying out any 
        program under this title, the Secretary shall give 
        strong consideration to the recommendations of a State 
        technical committee (including factual, technical, or 
        scientific findings and recommendations relating to 
        areas in which the State technical committee bears 
        responsibility).
    (d) FACA Requirements.--A State technical committee 
established under section 1261 shall be exempt from the Federal 
Advisory Committee Act (5 U.S.C. App.).
    (e) Advisory Subcommittees.--
          (1) In general.--Any State or local work group, task 
        force, or other advisory body authorized by any Federal 
        law (including a regulation) to advise the Secretary on 
        issues that are within the areas of responsibility of a 
        State technical committee established under section 
        1261 shall be considered to be a subcommittee of the 
        State technical committee.
          (2) Composition.--A person eligible to serve on a 
        State technical committee under section 1261(c) shall 
        also be eligible to serve on 1 or more subcommittees of 
        a State technical committee.
          (3) Local working groups.--A local working group 
        shall be considered to be a subcommittee of a State 
        technical committee established under section 1261.''.

           *       *       *       *       *       *       *


                                TITLE 3

                            PUBLIC LAW 480

           *       *       *       *       *       *       *


SEC. 2. UNITED STATES POLICY.

    It is the policy of the United States to use its abundant 
agricultural productivity to promote the foreign policy of the 
United States by enhancing the food security of the developing 
world through the use of agricultural commodities and local 
currencies accruing under this Act to--
          (1) combat world hunger and malnutrition and their 
        causes;
          (2) promote broad-based, equitable, and sustainable 
        development, including agricultural development and 
        conflict prevention;
          (3) expand international trade;
          (4) develop and expand export markets for United 
        States agricultural commodities; and
          (5) foster and encourage the development of private 
        enterprise and democratic participation in developing 
        countries.

           *       *       *       *       *       *       *


SEC. 202. PROVISION OF AGRICULTURAL COMMODITIES.

    (a) Emergency Assistance.--Notwithstanding any other 
provision of law, the Administrator may provide agricultural 
commodities to meet emergency food needs under this title 
through governments and public or private agencies, including 
intergovernmental organizations such as the World Food Program 
and other multilateral organizations, in such manner and on 
such terms and conditions as the Administrator determines 
appropriate to respond to the emergency.
    (b) Nonemergency Assistance.--
          (1) In general.--The Administrator may provide 
        agricultural commodities for nonemergency assistance 
        under this title through eligible organizations (as 
        described in subsection (d)) that have entered into an 
        agreement with the Administrator to use the commodities 
        in accordance with this title.
          (2) Limitation.--The Administrator may not deny a 
        request for funds submitted under this subsection 
        because the program for which the funds are requested--
                  (A) would be carried out by the eligible 
                organization in a foreign country in which the 
                Agency for International Development does not 
                have a mission, office, or other presence; or
                  (B) is not part of a development plan for the 
                country prepared by the Agency.
          (3) Program diversity.--The Administrator shall--
                  (A) encourage eligible organizations to 
                propose and implement program plans to address 
                1 or more aspects of the program under section 
                201; and
                  (B) consider proposals that incorporate a 
                variety of program objectives and strategic 
                plans based on the identification by eligible 
                organizations of appropriate activities to 
                assist development in foreign countries.
    (c) Uses of Assistance.--Agricultural commodities provided 
under this title may be made available for direct distribution, 
sale, barter, or other appropriate disposition.
    (d) Eligible Organizations.--To be eligible to receive 
assistance under subsection (b) an organization shall be--
          (1) a private voluntary organization or cooperative 
        that is, to the extent practicable, registered with the 
        Administrator; or
          (2) an intergovernmental organization, such as the 
        World Food Program.
    (e) Support for Eligible Organizations.--
          (1) In general.--Of the funds made available in each 
        fiscal year under this title to the Administrat, or, 
        [not less than $10,000,000 and not more than 
        $28,000,000,] not less than 5 percent nor more than 10 
        percent of the funds shall be made available in each 
        fiscal year to eligible organizations described in 
        subsection (d), to assist the organizations in--
    (h) Certified Institutional Partners.--
          (1) In general.--The Administrator or the Secretary, 
        as applicable, shall promulgate regulations and issue 
        guidelines to permit private voluntary organizations 
        and cooperatives to be certified as institutional 
        partners.
          (2) Requirements.--To become a certified 
        institutional partner, a private voluntary organization 
        or cooperative shall submit to the Administrator a 
        certification of organizational capacity that 
        describes--
                  (A) the financial, programmatic, commodity 
                management, and auditing abilities and 
                practices of the organization or cooperative; 
                and
                  (B) the capacity of the organization or 
                cooperative to carry out projects in particular 
                countries.
          (3) Multi-country proposals.--A certified 
        institutional partner shall be eligible to--
                  (A) submit a single proposal for 1 or more 
                countries that are the same as, or similar to, 
                those countries in which the certified 
                institutional partner has already demonstrated 
                organizational capacity;
                  (B) receive expedited review and approval of 
                the proposal; and
                  (C) receive commodities and assistance under 
                this section for use in 1 or more countries.

SEC. 203. GENERATION AND USE OF [FOREIGN] CURRENCIES BY PRIVATE 
                    VOLUNTARY ORGANIZATIONS AND COOPERATIVES.

    (a) Local Sale and Barter of Commodities.--An agreement 
entered into between the Administrator and a private voluntary 
organization or cooperative to provide food assistance through 
such organization or cooperative under this title may provide 
for the sale or barter in [the recipient country, or in a 
country] 1 or more recipient countries, or 1 or more countries 
in the same region, of the commodities to be provided under 
such agreement.
    (b) Minimum Level of Local Sales.--In carrying out 
agreements of the type referred to in subsection (a), the 
Administrator shall permit private voluntary organizations and 
cooperatives to sell, [in recipient countries, or in countries] 
1 or more recipient countries, or in 1 or more countries in the 
same region, an amount of commodities equal to not less than 15 
percent of the aggregate amounts of all commodities distributed 
under non-emergency programs under this title for each fiscal 
year, to generate [foreign currency] proceeds to be used as 
provided in this section.
    (c) Description of Intended Uses.--A private voluntary 
organization or cooperative submitting a proposal to enter into 
a non-emergency food assistance agreement under this title 
shall include in such proposal a description of the intended 
uses of any [foreign currency] proceeds that may be generated 
through the sale, in [the recipient country, or in a country 
in] 1 or more recipient countries, or in 1 or more countries in 
the same region, of any commodities provided under an agreement 
entered into between the Administrator and the organization or 
cooperative.
    (d) Use.--[Foreign currencies] Proceeds generated from any 
partial or full sale or barter of commodities by a private 
voluntary organization or cooperative under a non-emergency 
food assistance agreement under this title may--
          (1) be used to transport, store, distribute, and 
        otherwise enhance the effectiveness of the use of 
        agricultural commodities provided under this title;
          (2) be used to implement [income generating] income-
        generating, community development, health, nutrition, 
        cooperative development, agricultural, and other 
        developmental activities within [the recipient country 
        or within a country] 1 or more recipient countries or 
        within 1 or more countries in the same region; or
          (3) be invested, and any interest earned on such 
        investment may be used, for the purposes for which the 
        assistance was provided to that organization, without 
        further appropriation by Congress.

SEC. 204. LEVELS OF ASSISTANCE.

    (a) Minimum Levels.--
          (1) Minimum assistance.--Except as provided in 
        paragraph (3), the Administrator shall make 
        agricultural commodities available for food 
        distribution under this title in an amount [that for 
        each of fiscal years 1996 through 2002 is not less than 
        2,025,000 metric tons] that is not less than--
                  (A) 2,100.000 metric tons for fiscal year 
                2002;
                  (B) 2,200,000 metric tons for fiscal year 
                2003;
                  (C) 2,300,000 metric tons for fiscal year 
                2004;
                  (D) 2,400,000 metric tons for fiscal year 
                2005;
                  (E) 2, 500,000 metric tons for fiscal year 
                2006.
          (2) Minimum non-emergency assistance.--Of the amounts 
        specified in paragraph (1), and except as provided in 
        paragraph (3), the Administrator shall make 
        agricultural commodities available for non-emergency 
        food distribution through eligible organizations under 
        section 202 in an amount that for each of fiscal years 
        1996 through 2002 is not less than 1,550,000 metric 
        tons.

           *       *       *       *       *       *       *

    (b) Use of Value-Added Commodities.--
          (1) Minimum levels.--Except as provided in paragraph 
        (2), in making agricultural commodities available under 
        this title, the Administrator shall ensure that not 
        less than 75 percent of the quantity of such 
        commodities required to be distributed during each 
        fiscal year under subsection (a)(2) be in the form of 
        processed, fortified, or bagged commodities including 
        crude degummed soybean oil and that not less than 50 
        percent of the quantity of the bagged commodities 
        that are whole grain commodities be bagged in the 
        United States.
          (2) Waiver of minimum.--The Administrator may waive 
        the requirement of paragraph (1) for any fiscal year in 
        which the Administrator determines that the 
        requirements of the programs established under this 
        title will not be best served by the enforcement of 
        such requirement under such paragraph.

SEC. 205. FOOD AID CONSULTATIVE GROUP.

    (a) Establishment.--There is established a Food Aid 
Consultative Group (hereinafter referred to in this section as 
the ``Group'') that shall meet regularly to review and address 
issues concerning the effectiveness of the regulations 
policies, guidelines, and procedures that govern food 
assistance programs established and implemented under this 
title, and the implementation of other provisions of this title 
that may involve eligible organizations described in section 
202(d)(1).

           *       *       *       *       *       *       *

    (d) Consultations.--In preparing regulations, handbooks, or 
guidelines implementing this title, or significant revisions 
thereto, the Administrator shall provide such proposals to the 
Group for review and comment. The Administrator shall consult 
and, when appropriate (but at least twice per year), meet with 
the Group regarding such proposed regulations policies, 
handbooks, guidelines, or revisions thereto prior to the 
issuance of such.
    (e) Advisory Committee Act.--The Federal Advisory Committee 
Act (5 U.S.C. App.) shall not apply to the Group.
    (f) Termination.--The Group shall terminate on December 31, 
[2002] 2006.

           *       *       *       *       *       *       *


SEC. 206. MAXIMUM LEVEL OF EXPENDITURES.

    (a) Maximum Expenditures.--Except as provided in subsection 
(b), programs of assistance shall not be undertaken under this 
title during any fiscal year if such programs necessitate an 
appropriation of more than [$1,000,000,000] $2,000,000,000 to 
reimburse the Commodity Credit Corporation for all costs 
incurred in connection with such programs (including the 
Corporation''s investment in commodities made available).
    (b) Waiver by President.--The President may waive the 
limitation contained in subsection (a) if the President 
determines that such waiver is necessary to undertake programs 
of assistance to meet urgent humanitarian or emergency needs.

SEC. 207. ADMINISTRATION.

    (a) Proposals.--
          [(1) Time for decision.--Not later than 45 days after 
        the receipt by the Administrator of a proposal 
        submitted]
          (1) Recipient countries.--A proposal to enter into a 
        nonemergency food assistance agreement under this title 
        shall identify the recipient country or countries that 
        are the subject of the agreement.
          (2) Timing.--Not later than 120 days after the date 
        of submission to the Administrator of a proposal 
        submitted by an eligible organization under this title, 
        the Administrator shall determine whether to accept the 
        proposal.
                  (A) by an eligible organization, with the 
                concurrence of the appropriate United States 
                field mission, for commodities; or
                  (B) by a United States field mission to make 
                commodities available to an eligible 
                organization; under this title, the 
                Administrator shall make a decision concerning 
                such proposal.
          (3) Denial.--If a proposal under paragraph (1) is 
        denied, the response shall specify the reasons for 
        denial and the conditions that must be met for the 
        approval of such proposal.
    (b) Notice and Comment.--Not later than 30 days prior to 
the issuance of a final [guideline] guideline or policy 
determination to carry out this title, the Administrator 
shall--
          (1) provide notice of the existence of a proposed 
        [guideline] guideline or policy determination, and that 
        such [guideline] guideline or policy determination is 
        available for review and comment, to eligible 
        organizations that participate in programs under this 
        title, and to other interested persons;
          (2) make the proposed [guideline] guideline or policy 
        determination available, on request, to the eligible 
        organizations and other persons referred to in 
        paragraph (1); and
          (3) take any comments received into consideration 
        prior to the issuance of the final [guideline] 
        guideline or policy determination.
    (c) Regulations.--
          (1) In general.--The Administrator shall promptly 
        issue all necessary regulations and make revisions to 
        agency guidelines with respect to changes in the 
        operation or implementation of the program established 
        under this title.
          (2) Requirements.--The Administrator shall develop 
        regulations with the intent of--
                  (A) simplifying procedures for participation 
                in the programs established under this title;
                  (B) reducing paperwork requirements under 
                such programs;
                  (C) establishing reasonable and realistic 
                accountability standards to be applied to 
                eligible organizations participating in the 
                programs established under this title, taking 
                into consideration the problems associated with 
                carrying out programs in developing countries; 
                and
                  (D) providing flexibility for carrying out 
                programs under this title.
          (3) Handbooks.--Handbooks developed by the 
        Administrator to assist in carrying out the program 
        under this title shall be designed to foster the 
        development of programs under this title by eligible 
        organizations.
    (d) Deadline for Submission of Commodity Orders.--Not later 
than 15 days after receipt from a [United States field mission] 
an eligible organization with an approved program under this 
title of a call forward for agricultural commodities for 
programs that meet the requirements of this title, the order 
for the purchase or the supply, from inventory, of such 
commodities or products shall be transmitted to the Commodity 
Credit Corporation.
    (e) Timely Approval.--
          (1) In general.--The Administrator shall finalize 
        program agreements and resource requests for programs 
        under this section before the beginning of each fiscal 
        year.
          (2) Report.--Not later than December 1 of each year, 
        the Administrator shall submit to the Committee on 
        Agriculture and the Committee on International 
        Relations of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate a report that contains--
                  (A) a list of programs, countries, and 
                commodities approved to date for assistance 
                under this section; and
                  (B) a statement of the total amount of funds 
                approved to date for transportation and 
                administrative costs under this section.
    (f) Direct Delivery.--In addition to practices in effect on 
the date of enactment of this subsection, the Secretary may 
approve an agreement that provides for direct delivery of 
agricultural commodities to milling or processing facilities 
more than 50 percent of the interest in which is owned by 
United States citizens in foreign countries, with the proceeds 
of transactions transferred in cash to eligible organizations 
described in section 202(d) to carry out approved projects.

           *       *       *       *       *       *       *


SEC. 208. ASSISTANCE FOR STOCKPILING AND RAPID TRANSPORTATION, 
                    DELIVERY, AND DISTRIBUTION OF SHELF-STABLE 
                    PREPACKAGED FOODS.

           *       *       *       *       *       *       *


    (e) Regulations or Guidelines.--Not later than 180 days 
after the date of the enactment of this section, the 
Administrator, in consultation with the Secretary, shall issue 
such regulations or guidelines as the Administrator determines 
to be necessary to carry out this section, including 
regulations or guidelines that provide to United States 
nonprofit organizations eligible to receive grants under 
subsection (a)(1) guidance with respect to the requirements for 
qualified shelf-stable prepackaged foods and the quantity of 
the foods to be stockpiled by the organizations.
    (f) Authorization of Appropriations.--There is authorized 
to be appropriated to the Administrator to carry out this 
section, in addition to amounts otherwise available to carry 
out this section, $3,000,000 for each of fiscal years 2001 [and 
2002] through 2006, to remain available until expended.

           *       *       *       *       *       *       *


                    TITLE III--FOOD FOR DEVELOPMENT

SEC. 403. GENERAL PROVISIONS.

    (l) Sale Procedure.--
          (1) In general.--Subsections (b) shall apply to sales 
        of commodities in recipient countries to generate 
        proceeds to carry out projects under--
                  (A) section 416(b) of the Agricultural Act of 
                1949 (7 U.S.C. 1431(b)); and
                  (B) title VIII of the Agricultural Trade Act 
                of 1978
          (2) Currencies.--Sales of commodities described in 
        paragraph (1) may be in United States dollars or in a 
        different currency.
          (3) Sale price.--Sales of commodities described in 
        paragraph (1) shall be made at a reasonable market 
        prices in the economy where the commodity is to be 
        sold, as determined by the Secretary or the 
        Administrator, as appropriate.
    (a) Prohibition.--No agricultural commodity shall be made 
available under this Act unless it is determined that--

           *       *       *       *       *       *       *


SEC. 408. EXPIRATION DATE.

    No agreements to finance sales or to provide other 
assistance under this Act shall be entered into after December 
31, [2002] 2006.

           *       *       *       *       *       *       *


SEC. 415. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.

    (a) In General.--Subject to the availability of practical 
technology and to cost effectiveness, not later than September 
30, 1997, the Secretary, in consultation with the 
Administrator, shall establish [a micronutrient fortification 
pilot program] micronutrient fortification programs under this 
Act. The purpose of [the program] a program shall be to--
          (1) assist developing countries in correcting 
        micronutrient dietary deficiencies among segments of 
        the populations of the countries; and
          (2) encourage the development of technologies for the 
        fortification of [whole] grains and other commodities 
        that are readily transferable to developing countries 
        [.]; and
          (3) encourage technologies and systems for the 
        improved quality and safety of fortified grains and 
        other commodities that are readily transferable to 
        developing countries.
    (b) Selection of Participating Countries.--From among the 
countries eligible for assistance under this Act, the Secretary 
may select not more than 5 developing countries to participate 
in the pilot program.
    (c) Fortification.--Under [the pilot program, whole] a 
program, grains and other commodities made available to a 
developing country selected to participate in [the pilot 
program may] a program may be fortified with 1 or more 
micronutrients ([including] such as vitamin A, iron, and 
iodine) with respect to which a substantial portion of the 
population in the country is deficient. The commodity may be 
fortified in the United States or in the developing country.
    (d) Termination of Authority.--The authority to carry out 
the pilot program established under this section shall 
terminate on September 30, [2002] 2002.

           *       *       *       *       *       *       *


                        CARGO PREFERENCE LAWS

           *       *       *       *       *       *       *


         FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 1990

    (g) Biotechnology and Agricultural Trade Program.--
          (1) In general.--The Secretary of Agriculture shall 
        establish a program to enhance foreign acceptance of 
        agricultural biotechnology and United States 
        agricultural products developed through biotechnology.
          (2) Focus.--The program shall address the continuing 
        and increasing market access, regulatory, and marketing 
        issues relating to export commerce of United States 
        agricultural biotechnology products.
          (3) Education and outreach.--
                  (A) Foreign markets.--Support for United 
                States agricultural market development 
                organizations to carry out education and other 
                outreach efforts concerning biotechnology shall 
                target such educational initiatives directed 
                toward--
                          (i) producers, buyers, consumers, and 
                        media in foreign markets through 
                        initiatives in foreign markets; and
                          (ii) government officials, 
                        scientists, and trade officials from 
                        foreign countries through exchange 
                        programs.
                  (B) Funding for education and outreach.--
                Funding for activities under subparagraph (A) 
                may be--
                          (i) used through--
                                  (I) the emerging markets 
                                program under this section; or
                                  (II) the Cochran Fellowship 
                                Program under section 1543; or
                          (ii) applied directly to foreign 
                        market development cooperators through 
                        the foreign market development 
                        cooperator program established under 
                        section 702.
          (4) Rapid response.--
                  (A) In general.--The Secretary shall assist 
                exporters of United States agricultural 
                commodities in cases in which the exporters are 
                harmed by unwarranted and arbitrary barriers to 
                trade due to--
                          (i) marketing of biotechnology 
                        products;
                          (ii) food safety;
                          (iii) disease; or
                          (iv) other sanitary or phytosanitary 
                        concerns.
                  (B) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this paragraph $1,000,000 for each of fiscal 
                years 2002 through 2006.
          (5) Funding.--
                  (A) Commodity credit corporation.--The 
                Secretary shall use the funds, facilities, and 
                authorities of the Commodity Credit Corporation 
                to carry out this subsection (other than 
                paragraph (4)).
                  (B) Funding amount.--Of the funds of the 
                Commodity Credit Corporation, the Secretary 
                shall make available to carry out this 
                subsection (other than paragraph (4)) 
                $15,000,000 for each of fiscal years 2002 
                through 2006.

           *       *       *       *       *       *       *


                     AGRICULTURAL TRADE ACT OF 1978

           *       *       *       *       *       *       *


          TITLE VIII--FOOD FOR PROGRESS AND EDUCATION PROGRAMS

SEC. 801. DEFINITIONS.

    In this title:
          (1) Cooperative.--The term ``cooperative'' means a 
        private sector organization the members of which--
                  (A) own and control the organization;
                  (B) share in the profits of the organization; 
                and
                  (C) are provided services (such as business 
                services and outreach in cooperative 
                development) by the organization.
          (2) Corporation.--The term ``Corporation'' means the 
        Commodity Credit Corporation.
          (3) Developing country.--The term ``developing 
        country'' means a foreign country that has--
                  (A) a shortage of foreign exchange earnings; 
                and
                  (B) difficulty meeting all of the food needs 
                of the country through commercial channels and 
                domestic production.
          (4) Eligible commodity.--The term ``eligible 
        commodity'' means an agricultural commodity (including 
        vitamins and minerals) acquired by the Secretary or the 
        Corporation for disposition in a program authorized 
        under this title through--
                  (A) commercial purchases; or
                  (B) inventories of the Corporation.
          (5) Eligible organization.--the term ``eligible 
        organization'' means a private voluntary organization, 
        cooperative, nongovernmental organization, or foreign 
        country as determined by the Secretary.
          (6) Emerging agricultural country.--The term 
        ``emerging agricultural country'' means a foreign 
        country that--
                  (A) is an emerging democracy; and
                  (B) has made a commitment to introduce or 
                expand free enterprise elements in the 
                agricultural economy of the country.
          (7) Food security--.The term ``food security'' means 
        access by all people at all times to sufficient food 
        and nutrition for a healthy and productive life.
          (8) Nongovernmental organization.--
                  (A) In general.--The term ``nongovernmental 
                organization'' means an organization that 
                operates on a local level to solve development 
                problems in a foreign country in which the 
                organization is located.
                  (B) Exclusion.--The term ``nongovernmental 
                organization'' does not include an organization 
                that is primarily an agency or instrumentality 
                of the government of a foreign country.
          (9) Private voluntary organization.--The term 
        ``private voluntary organization'' means a nonprofit, 
        intergovernmental organization that--
                  (A) receives--
                          (i) funds from private sources; and
                          (ii) voluntary contributions of 
                        funds, staff time, or in-kind support 
                        from the public;
                  (B) is engaged in or is planning to engage in 
                nonreligious voluntary, charitable, or 
                development assistance activities; and
                  (C) in the case of an organization that is 
                organized under the laws of the United States 
                or a State, is an organization in the United 
                states, means an organization dexcribed in 
                section 501 (c) (3) of the Internal Revenue 
                Code of 1986 that is exempt from taxation under 
                section 501 (a) of that code.
          (10) Program.--The term ``program'' means a food or 
        nutrition assistance or development initiative proposed 
        by an eligible organization and approved by the 
        Secretary under this title.
          (11) Recipient country.--The term ``recipient 
        country'' means an emerging agricultural country that 
        receives assistance under a program.

SEC. 802. FOOD FOR PROGRESS AND EDUCATION PROGRAMS.

    (a) In General.--To provide agricultural commodities to 
support the introduction or expansion of free trade enterprises 
in national economies in recipient countries, and to provide 
food or nutrition assistance in recipient countries, the 
Secretary shall establish food for progress and education 
programs under which the Secretary may enter into agreements 
(including multiyear agreements and for programs in more than 1 
country) with--
          (1) the governments of emerging agricultural 
        countries;
          (2) private voluntary organizations;
          (3) nonprofit agricultural organizations and 
        cooperatives;
          (4) nongovernmental organizations; and
          (5) other private entities.
    (b) Considerations.--In determining whether to enter into 
an agreement to establish a program under subsection (a), the 
Secretary shall take into consideration whether an emerging 
agricultural country is committed to carrying out, or is 
carrying out, policies that promote--
          (1) economic freedom;
          (2) private production of food commodities for 
        domestic consumption; and
          (3) the creation and expansion of efficient domestic 
        markets for the purchase and sale of those commodities.
    (c) International Food for Education and Nutrition 
Program.--
          (1) In general.--In cooperation with other countries, 
        the Secretary shall establish an initiative within the 
        food for progress and education programs under this 
        title to be known as the ``International Food for 
        Education and Nutrition Program'', through which the 
        Secretary may provide to eligible organizations 
        agricultural commodities and technical and nutritional 
        assistance in connection with education programs to 
        improve food security and enhance educational 
        opportunities for preschool age and primary school age 
        children in recipient countries.
          (2) Agreements.--In carrying out this subsection, the 
        Secretary--
                  (A) shall administer the programs under this 
                subsection in a manner that is consistent with 
                this title; and
                  (B) may enter into agreements with eligible 
                organizations--
                          (i) to purchase, acquire, and donate 
                        eligible commodities to eligible 
                        organizations to carry out agreements 
                        in recipient countries; and
                          (ii) to provide technical and 
                        nutritional assistance to carry out 
                        agreements in recipient countries.
          (3) Other donor countries.--The Secretary shall 
        encourage other donor countries, directly or through 
        eligible organizations--
                  (A) to donate goods and funds to recipient 
                countries; and
                  (B) to provide technical and nutritional 
                assistance to recipient countries.
          (4) Private sector.--The President and the Secretary 
        are urged to encourage the support and active 
        involvement of the private sector, foundations, and 
        other individuals and organizations in programs and 
        activities assisted under this subsection.
          (5) Graduation.--An agreement with an eligible 
        organization under this subsection shall include 
        provisions--
                  (A)(i) to sustain the benefits to the 
                education, enrollment, and attendance of 
                children in schools in the targeted communities 
                when the provision of commodities and 
                assistance to a recipient country under the 
                program under this subsection terminates; and
                  (ii) to estimate the period of time required 
                until the recipient country or eligible 
                organization is able to provide sufficient 
                assistance without additional assistance under 
                this subsection; or
                  (B) to provide other long-term benefits to 
                targeted populations of the recipient country.
          (6) Annual report.--The Secretary shall submit to the 
        Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate an annual report 
        that describes--
                  (A) the results of the implementation of this 
                subsection during the year covered by the 
                report, including the impact on the enrollment, 
                attendance, and performance of children in 
                preschools and primary schools targeted under 
                the program under this subsection; and
                  (B) the level of commitments by, and the 
                potential for obtaining additional goods and 
                assistance from, other countries for subsequent 
                years.
    (d) Terms.--
          (1) In general.--The Secretary may provide 
        agricultural commodities under this title on--
                  (A) a grant basis; or
                  (B) subject to paragraph (2), credit terms.
          (2) Credit terms.--Payment for agricultural 
        commodities made available under this title that 
arepurchased on credit terms shall be made on the same basis as 
payments made under section 103 of the Agricultural Trade Development 
and Assistance Act of 1954 (7 U.S.C. 1703).
          (3) No effect on domestic programs.--The Secretary 
        shall not make an agricultural commodity available for 
        disposition under this section in any amount that will 
        reduce the amount of the commodity that is 
        traditionally made available through donations to 
        domestic feeding programs or agencies, as determined by 
        the Secretary.
    (e) Reports.--Each eligible organization that enters into 
an agreement under this title shall submit to the Secretary, at 
such time as the Secretary may request, a report containing 
such information as the Secretary may request relating to the 
use of agricultural commodities and funds provided to the 
eligible organization under this title.
    (f) Coordination.--To ensure that the provision of 
commodities under this section is coordinated with and 
complements other foreign assistance provided by the United 
States, assistance under this section shall be coordinated 
through the mechanism designated by the President to coordinate 
assistance under the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1691 et seq.).
    (g) Quality Assurance.--
          (1) In general.--The Secretary shall ensure, to the 
        maximum extent practicable, that each eligible 
        organization participating in 1 or more programs under 
        this section--
                  (A) uses eligible commodities made available 
                under this title--
                          (i) in an effective manner;
                          (ii) in the areas of greatest need; 
                        and
                          (iii) in a manner that promotes the 
                        purposes of this title;
                  (B) in using eligible commodities, assesses 
                and takes into account the needs of recipient 
                countries and the target populations of those 
                countries;
                  (C) works with recipient countries and 
                indigenous institutions or groups in recipient 
                countries to design and carry out mutually 
                acceptable programs authorized in subsection 
                (h)(2)(C)(i);
                  (D) monitors and reports on the distribution 
                or sale of eligible commodities provided under 
                this title using methods that, as determined by 
                the Secretary, facilitate accurate and timely 
                reporting;
                  (E) periodically evaluates the effectiveness 
                of the program of the eligible organization, 
                including, as applicable, an evaluation of 
                whether the development or food and nutrition 
                purposes of the program can be sustained in a 
                recipient country if the assistance provided to 
                the recipient country is reduced and eventually 
                terminated; and
                  (F) considers means of improving the 
                operation of the program of the eligible 
                organization.
          (2) Certified institutional partners.--
                  (A) In general.--The Secretary shall 
                promulgate regulations and guidelines to permit 
                private voluntary organizations and 
                cooperatives to be certified as institutional 
                partners.
                  (B) Requirements.--To become a certified 
                institutional partner, a private voluntary 
                organization or cooperative shall submit to the 
                Secretary a certification of organizational 
                capacity that describes--
                          (i) the financial, programmatic, 
                        commodity management, and auditing 
                        abilities and practices of the 
                        organization or cooperative; and
                          (ii) the capacity of the organization 
                        or cooperative to carry out projects in 
                        particular countries.
                  (C) Multicountry proposals.--A certified 
                institutional partner shall be eligible to--
                          (i) submit a single proposal for 1 or 
                        more countries that are the same as, or 
                        similar to, those countries in which 
                        the certified institutional partner has 
                        already demonstrated organizational 
                        capacity;
                          (ii) receive expedited review and 
                        approval of the proposal; and
                          (iii) request commodities and 
                        assistance under this section for use 
                        in 1 or more countries.
                  (D) Multiyear agreements.--In carrying out 
                this title, on request and subject to the 
                availability of commodities, the Secretary is 
                encouraged to approve agreements that provide 
                for commodities to be made available for 
                distribution on a multiyear basis, if the 
                agreements otherwise meet the requirements of 
                this title.
    (h) Transshipment and Resale.--
          (1) In general.--The transshipment or resale of an 
        eligible commodity to a country other than a recipient 
        country shall be prohibited unless the transshipment or 
        resale is approved by the Secretary.
          (2) Monetization.--
                  (A) In general.--Subject to subparagraphs (B) 
                through (D), an eligible commodity provided 
                under this section may be sold for foreign 
                currency or United States dollars or bartered 
                with the approval of the Secretary.
                  (B) Sale or barter of food assistance.--The 
                sale or barter of eligible commodities under 
                this title may be conducted only within (as 
                determined by the Secretary)--
                          (i) a recipient country or country 
                        nearby to the recipient country; or
                          (ii) another country, if
                                  (I) the sale or barter within 
                                the recipient country or 
                                country nearby is not 
                                practicable; and
                                  (II) the sale or barter 
                                within countries other than the 
                                recipient country or country 
                                nearby will not disrupt 
                                commercial markets for the 
                                agricultural commodity 
                                involved.
                  (C) Humanitarian or development purposes.--
                The Secretary may authorize the use of proceeds 
                or exchanges to reimburse, within a recipient 
                country or other country in the same region, 
                the costs incurred by an eligible organization 
                for--
                          (i)(I) programs targeted at hunger 
                        and malnutrition; or
                          (II) development programs involving 
                        food security or education;
                          (ii) transportation, storage, and 
                        distribution of eligible commodities 
                        provided under this title; and
                          (iii) administration, sales, 
                        monitoring, and technical assistance.
                  (D) Exception.--The Secretary shall not 
                approve the use of proceeds described in 
                subparagraph (C) to fund any administrative 
                expenses of a foreign government.
                  (E) Private sector enhancement.--As 
                appropriate, the Secretary may provide eligible 
                commodities under this title in a manner that 
                uses commodity transactions as a means of 
                developing in the recipient countries a 
                competitive private sector that can provide for 
                the importation, transportation, storage, 
                marketing, and distribution of commodities.
    (i) Displacement of Commercial Sales.--In carrying out this 
title, the Secretary shall, to the maximum extent practicable 
consistent with the purposes of this title, avoid--
          (1) displacing any commercial export sale of United 
        States agricultural commodities that would otherwise be 
        made;
          (2) disrupting world prices of agricultural 
        commodities; or
          (3) disrupting normal patterns of commercial trade of 
        agricultural commodities with foreign countries.
    (j) Deadline for Program Announcements.--
          (1) In general.--Before the beginning of the 
        applicable fiscal year, the Secretary shall, to the 
        maximum extent practicable--
                  (A) make all determinations concerning 
                program agreements and resource requests for 
                programs under this title; and
                  (B) announce those determinations.
          (2) Report.--Not later than November 1 of the 
        applicable fiscal year, the Secretary shall submit to 
        the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a list of 
        programs, countries, and commodities, and the total 
        amount of funds for transportation and administrative 
        costs, approved to date under this title.
    (k) Military Distribution of Assistance.--
          (1) In general.--The Secretary shall ensure, to the 
        maximum extent practicable, that agricultural 
        commodities made available under this title are 
        provided without regard to--
                  (A) the political affiliation, geographic 
                location, ethnic, tribal, or religious identity 
                of the recipient; or
                  (B) any other extraneous factors, as 
                determined by the Secretary.
          (2) Prohibition on handling of commodities by the 
        military.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall not enter 
                into an agreement under this title to provide 
                agricultural commodities if the agreement 
                requires or permits the distribution, handling, 
                or allocation of agricultural commodities by 
                the military forces of any foreign government 
                or insurgent group.
                  (B) Exception.--The Secretary may authorize 
                the distribution, handling, or allocation of 
                commodities by the military forces of a country 
                in exceptional circumstances in which--
                          (i) nonmilitary channels are not 
                        available for distribution, handling, 
                        or allocation;
                          (ii) the distribution, handling, or 
                        allocation is consistent with paragraph 
                        (1); and
                          (iii) the Secretary determines that 
                        the distribution, handling, or 
                        allocation is necessary to meet the 
                        emergency health, safety, or 
                        nutritional requirements of the 
                        population of a recipient country.
          (3) Encouragement of safe passage.--In entering into 
        an agreement under this title that involves 1 or more 
        areas within a recipient country that is experiencing 
        protracted warfare or civil unrest, the Secretary 
        shall, to the maximum extent practicable, encourage all 
        parties to the conflict to--
                  (A) permit safe passage of the commodities 
                and other relief supplies; and
                  (B) establish safe zones for--
                          (i) medical and humanitarian 
                        treatment; and
                          (ii) evacuation of injured persons.
          (1) Level of Assistance.--The cost of commodities 
        made available under this title, and the expenses 
        incurred in connection with the provision of those 
        commodities shall be in addition to the level of 
        assistance provided under the Agricultural Trade 
        Development and Assistance Act of 1954 (7 U.S.C. 1691 
        et seq.)
    (m) Commodity Credit Corporation.--
          (1) In general.--Subject to paragraphs (6) through 
        (8), the Secretary may use the funds, facilities, and 
        authorities of the Corporation to carry out this title.
          (2) Minimum tonnage.--Subject to paragraphs (5) and 
        (7)(B), not less than 400,000 metric tons of 
        commodities may be provided under this title for each 
        of fiscal years 2002 through 2006.
          (3) Authorization of appropriations.--In addition to 
        tonnage authorized under paragraph (2), there are 
        authorized to be appropriated such sums as are 
        necessary to carry out this title.
          (4) Title i funds.--In addition to tonnage and funds 
        authorized under paragraphs (2), (3), and (7)(B), the 
        Corporation may use funds appropriated to carry out 
        title I of the Agricultural Trade Development and 
        Assistance Act of 1954 (7 U.S.C. 1701 et seq.)) in 
        carrying out this section with respect to commodities 
        made available under this title.
          (5) International food for education and nutrition 
        program.--
                  (A) In general.--Of the funds that would be 
                available to carry out paragraph (2), the 
                Secretary may use not more than $200,000,000 
                for each fiscal year to carry out the 
                initiative established under subsection (c).
                  (B) Reallocation.--Tons not allocated under 
                subsection (c) by June 30 of each fiscal year 
                shall be made available for proposals submitted 
                under the food for progress and education 
                programs under subsection (a).
          (6) Limitation on purchases of commodities.--The 
        Corporation may purchase agricultural commodities for 
        disposition under this title only if Corporation 
        inventories are insufficient to satisfy commitments 
        made in agreements entered into under this title.
          (7) Eligible costs and expenses.--
                  (A) In general.--Subject to subparagraph (B), 
                with respect to an eligible commodity made 
                available under this title, the Corporation may 
                pay--
                          (i) the costs of acquiring the 
                        eligible commodity;
                          (ii) the costs associated with 
                        packaging, enriching, preserving, and 
                        fortifying of the eligible commodity;
                          (iii) the processing, transportation, 
                        handling, and other incidental costs 
                        incurred before the date on which the 
                        commodity is delivered free on board 
                        vessels in United States ports;
                          (iv) the vessel freight charges from 
                        United States ports or designated 
                        Canadian transshipment ports, as 
                        determined by the Secretary, to 
                        designated ports of entry abroad;
                          (v) the costs associated with 
                        transporting the eligible commodity 
                        from United States ports to designated 
                        points of entry abroad in a case in 
                        which--
                                  (I) a recipient country is 
                                landlocked;
                                  (II) ports of a recipient 
                                country cannot be used 
                                effectively because of natural 
                                or other disturbances;
                                  (III) carriers to a specific 
                                country are unavailable; or
                                  (IV) substantial savings in 
                                costs or time may be gained by 
                                the use of points of entry 
                                other than ports;
                          (vi) the transportation and 
                        associated distribution costs incurred 
                        in moving the commodity (including 
                        repositioned commodities) from 
                        designated points of entry or ports of 
                        entry abroad to storage and 
                        distribution sites;
                          (vii) in the case of an activity 
                        under subsection (c), the internal 
                        transportation, storage, and handling 
                        costs incurred in moving the eligible 
                        commodity, if the Secretary determines 
                        that payment of the costs is appropriate 
                        and that the recipient country is a low 
                        income, net food-importing country that--
                                  (I) meets the poverty 
                                criteria established by the 
                                International Bank for 
                                Reconstruction and Development 
                                for Civil Works Preference; and
                                  (II) has a national 
                                government that is committed to 
                                or is working toward, through a 
                                national action plan, the World 
                                Declaration on Education for 
                                All convened in 1990 in 
                                Jomtien, Thailand, and the 
                                followup Dakar Framework for 
                                Action of the World Education 
                                Forum in 2000;
                          (viii) the charges for general 
                        average contributions arising out of 
                        the ocean transport of commodities 
                        transferred; and
                          (ix) the costs, in addition to costs 
                        authorized by clauses (i) through 
                        (viii), of providing--
                                  (I) assistance in the 
                                administration, sale, and 
                                monitoring of food assistance 
                                activities under this title; 
                                and
                                  (II) technical assistance for 
                                monetization programs.
                  (B) Funding.--Except for costs described in 
                subparagraph (A)(i), not more than $80,000,000 
                of funds that would be made available to carry 
                out paragraph (2) may be used to cover costs 
                under this paragraph unless authorized in 
                advance in an appropriation Act.
          (8) Payment of administrative costs.--An eligible 
        organization that receives payment for administrative 
        costs through monetization of the eligible commodity 
        under subsection (h)(2) shall not be eligible to 
        receive payment for the same administrative costs 
        through direct payments under paragraph (7)(A)(ix)(I).

           *       *       *       *       *       *       *


                      TITLE I--GENERAL PROVISIONS

SEC. 101. PURPOSE.

    It is the purpose of this Act to increase the profitability 
of farming and to increase opportunities for United States 
farms and agricultural enterprises by--
          (1) increasing the effectiveness of the Department of 
        Agriculture in agricultural export policy formulation 
        and implementation;
          (2) improving the competitiveness of United States 
        agricultural commodities and products in the world 
        market; and
          (3) providing for the coordination and efficient 
        implementation of all agricultural export programs.

SEC. 107. EXPORTER ASSISTANCE INITIATIVE.

    (a) In General.--In order to create a single source of 
information for exports of United States agricultural 
commodities, the Secretary shall develop a website on the 
Internet that collates onto a single website all information 
from all agencies of the Federal Government that is relevant to 
the export of United States agricultural commodities.
    (b) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out subsection (a)--
          (1) $1,000,000 for each of fiscal years 2002 through 
        2004;
          (2) $500,000 for each of fiscal years 2005 and 2006.

SEC. 102. DEFINITIONS.

    As used in this Act--
          (1) Agricultural commodity.--The term ``agricultural 
        commodity'' means any agricultural commodity, food, 
        feed, fiber, or livestock (including livestock as it is 
        defined in section 602(2) of the Agricultural Act of 
        1949 (7 U.S.C. 1471(2)) and insects) and any product 
        thereof.
          (2) Developing country.--The term ``developing 
        country'' means a country that--
                  (A) has a shortage of foreign exchange 
                earnings and has difficulty accessing 
                sufficient commercial credit to meet all of its 
                food needs, as determined by the Secretary; and
                  (B) has the potential to become a commercial 
                market for agricultural commodities.
          (3) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
          (4) Service.--The term ``Service'' means the Foreign 
        Agricultural Service of the Department of Agriculture.
          (5) Unfair trade practice.--
                  (A) In general.--Subject to subparagraph (B), 
                the term ``unfair trade practice'' means any 
                act, policy, or practice of a foreign country 
                that--
                          (i) violates, or is inconsistent 
                        with, the provisions of, or otherwise 
                        denies benefits to the United States 
                        under, any trade agreement to which the 
                        United States is a party; [or]
                          (ii) is unjustifiable, unreasonable, 
                        or discriminatory and burdens or 
                        restricts United States commerce[;] 
                        including, in the case of a state 
                        trading enterprise engaged in the 
                        export of an agricultural commodity, 
                        pricing practices that are not 
                        consistent with sound commercial 
                        practices conducted in the ordinary 
                        course of trade; or; and 
                          (iii) changes United States export 
                        terms of trade through a deliberate 
                        change in the dollar exchange rate of a 
                        competing exporter.
                  (B) Consistency with 1974 trade act.--Nothing 
                in this Act may be construed to authorize the 
                Secretary to make any determination regarding 
                an unfair trade practice that is inconsistent 
                with section 301 of the Trade Act of 1974 (19 
                U.S.C. 2411).

           *       *       *       *       *       *       *

    (k) Processed and High-Value Products.--
          (1) In general.--In issuing export credit guarantees 
        under this section, the Commodity Credit Corporation 
        shall, subject to paragraph (2), ensure that not less 
        than 25 percent for each of fiscal years 1996 and 1997, 
        30 percent for each of fiscal years 1998 and 1999, and 
        35 percent for each of fiscal years 2000, [2001, and 
        2002] through 2006, of the total amount of credit 
        guarantees issued for a fiscal year is issued to 
        promote the export of processed or high-value 
        agricultural products and that the balance is issued to 
        promote the export of bulk or raw agricultural 
        commodities.
          (2) Limitation.--The percentage requirement of 
        paragraph (1) shall apply for a fiscal year to the 
        extent that a reduction in the total amount of credit 
        guarantees issued for the fiscal year is not required 
        to meet the percentage requirement.

SEC. 203. MARKET ACCESS PROGRAM.

           *       *       *       *       *       *       *


    (g) Level of Marketing Assistance.--
          (1) In general.--The Secretary shall justify in 
        writing the level of assistance provided to an eligible 
        trade organization under the program under this section 
        and the level of cost-sharing required of such 
        organization.
          (2) Limitation.--Assistance provided under this 
        section for activities described in subsection (e)(4) 
        shall not exceed 50 percent of the cost of implementing 
        the marketing plan, except that the Secretary may 
        determine not to apply such limitation in the case of 
        agricultural commodities with respect to which there 
        has been a favorable decision by the United States 
        Trade Representative under section 301 of the Trade Act 
        of 1974. Criteria for determining that the limitation 
        shall not apply shall be consistent and documented.
          (3) Staged reduction in assistance.--In the case of 
        participants that received assistance under section 
        1124 of the Food Security Act of 1985 prior to November 
        28, 1990, and with respect to which assistance under 
        this section would be limited under paragraph (2), any 
        such reduction in assistance shall be phased down in 
        equal increments over a 5-year period.
    (h) United States Quality Export Initiative.--
          (1) In general.--Subject to the availability of 
        appropriations, using the authorities under this 
        section, the Secretary shall establish a program under 
        which, on a competitive basis, using practical and 
        objective criteria, several agricultural products are 
        selected to carry the ``U.S. Quality'' seal.
          (2) Promotional activities.--Agricultural products 
        selected under paragraph (1) shall be promoted using 
        the ``U.S. Quality'' seal at trade fairs in key markets 
        through electronic and print media.
          (3) Authorization of Appropriations.--There are 
        authorized to be appropriated such sums as are 
        necessary to carry out this subsection.

SEC. 204. BARTER OF AGRICULTURAL COMMODITIES.

           *       *       *       *       *       *       *


SEC. 211. FUNDING LEVELS.

           *       *       *       *       *       *       *


          (2) Limitation on origination fee.--Notwithstanding 
        any other provision of law, the Secretary may not 
        charge an origination fee with respect to any credit 
        guarantee transaction under section 202(a) in excess of 
        an amount equal to 1 percent of the amount of credit to 
        be guaranteed under the transaction, except with 
        respect to an export credit guarantee transaction 
        pursuant to section 1542(b) of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (Public Law 101-
        624; 7 U.S.C. 5622 note).
    (c) Market Access Programs.--The Commodity Credit 
Corporation or the Secretary shall make available for market 
access activities authorized to be carried out by the Commodity 
Credit Corporation under section 203--

           *       *       *       *       *       *       *

                  [(A) in addition to any funds that may be 
                specifically appropriated to implement a market 
                access program,211094 not less than 
                $200,000,000 for each of the fiscal years 1991 
                through 1993, not less than $110,000,000211095 
                for each of the fiscal years 1994 through 1995, 
                and not more than $90,000,000 for each of 
                fiscal years 1996 through 2002,211096 of the 
                funds of, or an equal value of commodities 
                owned by, the Commodity Credit Corporation; 
                and]
                  (A) in addition to any funds that may be 
                specifically appropriated to implement a market 
                access program, not more than $100,000,000 for 
                fiscal year 2002, $120,000,000 for fiscal year 
                2003, $140,000,000 for fiscal year 2004, 
                $160,000,000 for fiscal year 2005, and 
                $190,000,000 for fiscal year 2006, of the funds 
                of, or an equal value of commodities owned by, 
                the Commodity Credit Corporation, except that 
                this paragraph shall not apply to section 203 
                (h); and
          (2) Program priorities.--of funds made available 
        under paragraph (1) (A) in excess of $90,000,000 for 
        any fiscal year, priority shall be given to proposals--
                  (A) made by eligible trade organizations that 
                have never participated in the market access 
                program under this title; or
                  (B) for market access programs in emerging 
                markets.
    (d) Report on Agricultural Export Credit Programs.--
          (1) In general.--Not later than 1 year after the date 
        of enactment of this subsection, and annually 
        thereafter, the Secretary shall submit to the Committee 
        on Agriculture and the Committee on International 
        Relations of the House of Representatives and the 
        Committee on Agriculture, Nutrition and Forestry of the 
        Senate a report on the status of multilateral 
        negotiations regarding agricultural export credit 
        programs at the World Trade Organization and the 
        Organization of Economic cooperation and Development in 
        fulfillment of Article 10.2 of the Agreement on 
        Agriculture (as described in section 101(d)(2) of the 
        Uruguay Round Agreements Act (19 U.S.C. 3511 (d)(2))).
          (2) Classified information.--The report under 
        paragraph (1) shall be submitted in unclassified form, 
        but may contain a classified annex.

                 TITLE III--EXPORT ENHANCEMENT PROGRAM

           *       *       *       *       *       *       *


SEC. 301. EXPORT ENHANCEMENT PROGRAM.

           *       *       *       *       *       *       *


    (d) Inapplicability of Price Restrictions.--Any price 
restrictions that otherwise may be applicable to dispositions 
of agricultural commodities owned by the Commodity Credit 
Corporation shall not apply to agricultural commodities 
provided under this section.
      (e) Funding Levels.--
          (1) In general.--The Commodity Credit Corporation 
        shall make available to carry out the program 
        established under this section not more than--
                  (A) $350,000,000 for fiscal year 1996;
                  (B) $250,000,000 for fiscal year 1997;
                  (C) $500,000,000 for fiscal year 1998;
                  (D) $550,000,000 for fiscal year 1999;
                  (E) $579,000,000 for fiscal year 2000;
                  (F) $478,000,000 for fiscal year 2001; and
                  (G) $478,000,000 for [fiscal year 2002] each 
                of fiscal years 2002 through 2006.
          (2) Set-asides.--(A) For each fiscal year, the 
        Corporation shall, to the extent practicable and 
        subject to subparagraph (B), ensure that no less than 
        25 percent of the total of--
                  (i) the funds expended, and

           *       *       *       *       *       *       *

          (2) assistance for other costs that are necessary or 
        appropriate to carry out the foreign market development 
        cooperator program, including contingent liabilities 
        that are not otherwise funded.

[SEC. 703] SEC. 703. FUNDING.

    (a) In General.--To carry out this title, the Secretary 
shall use funds of the Commodity Credit Corporation, or 
commodities of the Commodity Credit Corporation of a comparable 
value, in the following amounts:
          (1) For fiscal year 2002, $37,500,000.
          (2) For fiscal year 2003, $40,000,000.
          (3) For fiscal year 2004 and each subsequent fiscal 
        year, $42,500,000.
    (b) Program Priorities.--Of funds or commodities provided 
under subsection (a) in excess of $35,000,000 for any fiscal 
year, priority shall be given to proposals--
          (1) made by eligible trade organizations that have 
        never participated in the program established under 
        this title; or
          (2) for programs established under this title in 
        emerging markets.

SEC. 703. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
title such sums as may be necessary for each of fiscal years 
1996 through 2002.

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                  STATUTES RELATED TO PUBLIC LAW 480

           *       *       *       *       *       *       *


                       FOOD SECURITY ACT OF 1985

    Sec. 1110. (a) This section may be cited as the ``[Food for 
Progress Act of 1985] Title VIII of the Agricultural Trade Act 
of 1978''.

           *       *       *       *       *       *       *

    (h) Termination of Authority.--
          (1) In general.--The authority to replenish stocks of 
        eligible commodities to maintain the trust established 
        under this section shall terminate on September 30, 
        [2002] 2006.
          (2) Disposal of eligible commodities.--Eligible 
        commodities remaining in the trust after September 30, 
        [2002] 2006, shall be disposed of by release for use in 
        providing for emergency humanitarian food needs in 
        developing countries as provided in this section.

           *       *       *       *       *       *       *


                        AGRICULTURAL ACT OF 1949

                         TITLE IV--MISCELLANEOUS

           *       *       *       *       *       *       *


                          (iv) Foreign currency proceeds 
                        generated from the sale of commodities 
                        or products under this subparagraph 
                        shall be expended within the country of 
                        origin within a reasonable length of 
                        time, as determined by the Secretary, 
                        except that the Secretary may permit 
                        the use of proceeds in a country other 
                        than the country of origin--
                                  (I) as necessary to expedite 
                                the transportation of 
                                commodities and products 
                                furnished under this 
                                subsection; or
                                  (II) if the proceeds are 
                                generated in a currency 
                                generally accepted in the other 
                                country.
                          (v) The provisions of clause (iii) of 
                        this subparagraph establishing minimum 
                        annual allocations for sales and use of 
                        proceeds shall not apply to the extent 
                        that there have not been sufficient 
                        requests for such sales and use of 
                        proceeds nor to the extent required 
                        under paragraph (3).
                  (E) Sales and barter to cover expenses 
                incurred under paragraph (5)(a).
                  (F) The provisions of sections 403(i) and 
                407(c) of the Agricultural Trade Development 
                and Assistance Act of 1954 shall apply to 
                donations, sales and barters of eligible 
                commodities under this subsection.
          [(8)(A) To the maximum extent practicable, expedited 
        procedures shall be used in the implementation of this 
        subsection.
          [(B) The Secretary]
          (8) Administrative provisions.--
                  (A) Direct delivery.--In addition to 
                practices in effect on the date of enactment of 
                this subparagraph, the Secretary may approve an 
                agreement that provides for direct delivery of 
                eligible commodities to milling or processing 
                facilities more than 50 percent of the interest 
                in which is owned by United States citizens in 
                recipient countries, with proceeds of 
                transactions transferred in cash to eligible 
                organizations to carry out approved projects.
                  (B) Regulations.--The Secretary shall be 
                responsible for regulations governing sales and 
                barter, and the use of foreign currency 
                proceeds, under paragraph (7) of this 
                subsection that will provide reasonable 
                safeguards to prevent the occurrence of abuses 
                in the conduct of activities provided for in 
                paragraph (7).
          (9)(A) Each recipient of commodities and products 
        approved for sale or barter under paragraph (7) shall 
        report to the Secretary information with respect to the 
        items required to be included in the Secretary's report 
        pursuant to clauses (i) through (iv) of subparagraph 
        (B). Reports pursuant to this subparagraph shall be 
        submitted in accordance with regulations of the 
        Secretary. Such regulations shall require at least one 
        report annually, to be submitted not later than 
        December 31 following the end of the fiscal year in 
        which the commodities and products are received; except 
        that a report shall not be required with respect to 
        fiscal year 1985.

           *       *       *       *       *       *       *

    (c) Certified Institutional Partners.--
          (1) In general.--The Secretary shall promulgate 
        regulations and guidelines to permit private voluntary 
        organizations and cooperatives to be certified as 
        institutional partners.
          (2) Requirements.--To become a certified 
        institutional partner, a private voluntary organization 
        or cooperative shall submit to the Secretary a 
        certification of organizational capacity that 
        describes--
                  (A) the financial, programmatic, commodity 
                management, and auditing abilities and 
                practices of the organization or cooperative; 
                and
                  (B) the capacity of the organization or 
                cooperative to carry out projects in particular 
                countries.
          (3) Multi-country proposals.--A certified 
        institutional partner shall be eligible to--
                  (A) submit a single proposal for 1 or more 
                countries that are the same as, or similar to, 
                those countries in which the certified 
                institutional partner has already demonstrated 
                organizational capacity;
                  (B) receive expedited review and approval of 
                the proposal; and
                  (C) request commodities and assistance under 
                this section for use in 1 or more countries.''.

           *       *       *       *       *       *       *


Sec. 7207. Prohibition on United States assistance and financing

    [(a) Prohibition on United States Assistance.--
          [(1) In general.--Notwithstanding.]
    (a) In General.--Notwithstanding any other provision of 
law, no United States Government assistance, including United 
States foreign assistance, United States export assistance, and 
any United States credit or guarantees shall be available for 
exports to Cuba or for commercial exports to Iran, Libya, North 
Korea, or Sudan.
          [(2) Rule of construction.--Nothing in paragraph (1)]
    (b) Rule of Construction.--Nothing in subsection (a) shall 
be construed to alter, modify, or otherwise affect the 
provisions of section 6039 of this title or any other provision 
of law relating to Cuba in effect on the day before October 28, 
2000.
          [(3) Waiver.--The President may waive the application 
        of paragraph (1)]
    (c) Waiver.--The President may waive the application of 
subsection (a) with respect to Iran, Libya, North Korea, and 
Sudan to the degree the President determines that it is in the 
national security interest of the United States to do so, or 
for humanitarian reasons.
    [(b) Payment prohibition on financing of agricultural sales 
to Cuba.--
          [(1) In general.--No United States person may provide 
        or financing terms for sales of agricultural 
        commodities or products to Cuba or any person in Cuba, 
        except in accordance with the following terms 
        (notwithstanding part 515 of title 31, Code of Federal 
        Regulations, or any other provision of law):
                  [(A) Payment of cash in advance.
                  [(B) Financing by third country financial 
                institutions (excluding United Stats persons or 
                Government of Cuba entities), except that such 
                financing may be confirmed or advised by a 
                United States financial institution.
        [Nothing in this paragraph authorizes payment terms or 
        trade financing involving a debit or credit to an 
        account of a person located in Cuba or of the 
        Government of Cuba maintained on the books of a United 
        States depository institution.
          [(2) Penalties.--Any private person or entity that 
        violates paragraph (1) shall be subject to the 
        penalties provided in the Trading With the Enemy Act 
        for violations under that Act.
          [(3) Administration and enforcement.--The President 
        shall issue such regulations as are necessary to carry 
        out this section, except that the President, in lieu of 
        issuing new regulations, may apply any regulations in 
        effect on October 28, 2000, pursuant to the Trading 
        With the Enemy Act [50 U.S.C.A. App. Sec. 1 et seq.], 
        with respect to the conduct prohibited in paragraph 
        (1).
          [(4) Definition.--In this subsection--
                  [(A) the term ``financing'' includes any loan 
                or extension of credit;
                  [(B) the term ``United States depository 
                institution'' means any entity (including its 
                foreign branches or subsidiaries) organized 
                under the laws of any jurisdiction within the 
                United States, or any agency, office or branch 
                located in the United States of a foreign 
                entity, that is engaged primarily in the 
                business of banking (including a bank, savings 
                bank, savings association, credit union, trust 
                company, or United States bank holding 
                company); and
                  [(C) the term ``United States person'' means 
                the Federal Government, any State or local 
                government, or any private person or entity of 
                the United States.]

           *       *       *       *       *       *       *


                         FOOD STAMP ACT OF 1977

    Sec. 3. As used in this Act, the term:
          (a) ``Allotment'' means the total value of coupons a 
        household is authorized to receive during each month.
          (b) ``Authorization card'' means the document issued 
        by the State agency to an eligible household which 
        shows the allotment the household is entitled to be 
        issued.
          (c) [``Certification period''] ``Eligibility review 
        period'' means the period for which households shall be 
        eligible to receive authorization cards. The 
        [certification period] eligibility review period shall 
        not exceed 12 months, except that the [certification 
        period] eligibility review period may be up to 24 
        months if all adult household members are elderly or 
        disabled. A State agency shall have at least 1 contact 
        with each certified household every 12 months. The 
        limits specified in this section may be extended until 
        the end of any transitional benefit period established 
        under section 11(s).
          (d) ``Coupon'' means any coupon, stamp, type of 
        certificate, authorization card, cash or check issued 
        in lieu of a coupon, or access device, including an 
        electronic benefit transfer card or personal 
        identification number, issued pursuant to the 
        provisions of this Act.
          (e) ``Coupon issuer'' means any office of the State 
        agency or any person, partnership, corporation, 
        organization, political subdivision, or other entity 
        with which a State agency has contracted for, or to 
        which it has delegated functional responsibility in 
        connection with, the issuance of coupons to households.
          (f) ``Drug addiction or alcoholic treatment and 
        rehabilitation program'' means any such program 
        conducted by a private nonprofit organization or 
        institution, or a publicly operated community mental 
        health center, under part B of title XIX of the Public 
        Health Service Act (42 U.S.C. 300x et seq.) to provide 
        treatment that can lead to the rehabilitation of drug 
        addicts or alcoholics.
          (g) ``Food'' means (1) any food [or food product], 
        food product, or dietary supplement that provides 
        exclusively 1 or more vitamins or minerals for home 
        consumption except alcoholic beverages, tobacco, and 
        hot foods or hot food products ready for immediate 
        consumption other than those authorized pursuant to 
        clauses (3), (4), (5), (7), (8), and (9) of this 
        subsection, (2) seeds and plants for use in gardens to 
        produce food for the personal consumption of the 
        eligible household, (3) in the case of those persons 
        who are sixty years of age or over or who receive 
        supplemental security income benefits or disability or 
        blindness payments under title I, II, X, XIV, or XVI of 
        the Social Security Act [(42 U.S.C. 1381 et seq.)], and 
        their spouses, meals prepared by and served in senior 
        citizens' centers, apartment buildings occupied 
        primarily by such persons, public or private nonprofit 
        establishments (eating or otherwise) that feed such 
        persons, private establishments that contract with the 
        appropriate agency of the State to offer meals for such 
        persons at concessional prices, and meals prepared for 
        and served to residents of federally subsidized housing 
        for the elderly, (4) in the case of persons sixty years 
        of age or over and persons who are physically or 
        mentally handicapped or otherwise so disabled that they 
        are unable adequately to prepare all of their meals, 
        meals prepared for and delivered to them (and their 
        spouses) at their home by a public or private nonprofit 
        organization or by a private establishment that 
        contracts with the appropriate State agency to perform 
        such services at concessional prices, (5) in the case 
        of narcotics addicts or alcoholics, and their children, 
        served by drug addiction or alcoholic treatment and 
        rehabilitation programs, meals prepared and served 
        under such programs, (6) in the case of certain 
        eligible households living in Alaska, equipment for 
        procuring food by hunting and fishing, such as nets, 
        hooks, rods, harpoons, and knives (but not equipment 
        for purposes of transportation, clothing, or shelter, 
        and not firearms, ammunition, and explosives) if the 
        Secretary determines that such households are located 
        in an area of the State where it is extremely difficult 
        to reach stores selling food and that such households 
        depend to a substantial extent upon hunting and fishing 
        for subsistence, (7) in the case of disabled or blind 
        recipients of benefits under title I, II, X, XIV, or 
        XVI of the Social Security Act, or are individuals 
        described in paragraphs (2) through (7) of subsection 
        (r), who are residents in a public or private nonprofit 
        group living arrangement that serves no more than 
        sixteen residents and is certified by the appropriate 
        State agency or agencies under regulations issued under 
        section 1616(e) of the Social Security Act or under 
        standards determined by the Secretary to be comparable 
        to standards implemented by appropriate State agencies 
        under such section [(42 U.S.C. 1382e(e))], meals 
        prepared and served under such arrangement, (8) in the 
        case of women and children temporarily residing in 
        public or private nonprofit shelters for battered women 
        and children, meals prepared and served, by such 
        shelters, and (9) in the case of households that do not 
        reside in permanent dwellings and households that have 
        no fixed mailing addresses, meals prepared for and 
        served by a public or private nonprofit establishment 
        (approved by an appropriate State or local agency) that 
        feeds such individuals and by private establishments 
        that contract with the appropriate agency of the State 
        to offer meals for such individuals at concessional 
        prices.
          (h) ``Food stamp program'' means the program operated 
        pursuant to the provisions of this Act.
          [(i) ``Household'' means (1) an]
          (i)(1) ``Household'' means--
                  (A) an individual who lives alone or who, 
                while living with others, customarily purchases 
                food and prepares meals for home consumption 
                separate and apart from the [others, or (2) a 
                group] others; or
                  (B) a group of individuals who live together 
                and customarily purchase food and prepare meals 
                together for home consumption. [Spouses]
          (2) Spouses who live together, parents and their 
        children 21 years of age or younger who live together, 
        and children (excluding foster children) under 18 years 
        of age who live with and are under the parental control 
        of a person other than their parent together with the 
        person exercising parental control shall be treated as 
        a group of individuals who customarily purchase and 
        prepare meals together for home consumption even if 
        they do not do so. [Notwithstanding]
          (3) Notwithstanding [the preceding sentences] 
        paragraphs (1) and (2), an individual who lives with 
        others, who is sixty years of age or older, and who is 
        unable to purchase food and prepare meals because such 
        individual suffers, as certified by a licensed 
        physician, from a disability which would be considered 
        a permanent disability under section 221(i) of the 
        Social Security Act (42 U.S.C. 421(i)) or from a 
        severe, permanent, and disabling physical or mental 
        infirmity which is not symptomatic of a disease shall 
        be considered, together with any of the others who is 
        the spouse of such individual, an individual household, 
        without regard to the purchase of food and preparation 
        of meals, if the income (as determined under section 
        5(d)) of the others, excluding the spouse, does not 
        exceed the poverty line, as described in section 
        5(c)(1), by more than 65 per centum. [In no event]
          (4) In no event shall any individual or group of 
        individuals constitute a household if they reside in an 
        institution or boarding house, or else live with others 
        and pay compensation to the others for meals. [For the 
        purposes of this subsection, residents]
          (5) For the purposes of this subsection, the 
        following persons shall not be considered to be 
        residents of institutions and shall be considered to be 
        individual households:
                  (A) Residents of federally subsidized housing 
                for the elderly, disabled or blind recipients 
                of benefits under title I, II, X, XIV, or XVI 
                of the Social Security [Act, or are 
                individuals] Act.
                  (B) Individuals described in paragraphs (2) 
                through (7) of subsection (r), who are 
                residents in a public or private nonprofit 
                group living arrangement that serves no more 
                than sixteen residents and is certified by the 
                appropriate State agency or agencies under 
                regulations issued under section 1616(e) of the 
                Social Security Act or under standards 
                determined by the Secretary to be comparable to 
                standards implemented by appropriate State 
                agencies under [such section [(42 U.S.C. 
                1382e(e))], temporary] that section.
                  (C) Temporary residents of public or private 
                nonprofit shelters for battered women and 
                [children, residents] children.
                  (D) Residents of public or private nonprofit 
                shelters for individuals who do not reside in 
                permanent dwellings or have no fixed mailing 
                addresses, who are otherwise eligible for 
                [coupons, and narcotics] coupons.
                  (E) Narcotics; and addicts or alcoholics, 
                together with their children, who live under 
                the supervision of a private nonprofit 
                institution, or a publicly operated community 
                mental health center, for the purpose of 
                regular participation in a drug or alcoholic 
                treatment program shall not be considered 
                residents of institutions and [shall be 
                considered individual households.].

           *       *       *       *       *       *       *

    (d) A Household income for purposes of the food stamp 
program shall include all income from whatever source 
(including child support payments made to a household member by 
an individual who is legally obligated to make the payments) 
excluding only (1) any gain or benefit which is not in the form 
of money payable directly to a household (notwithstanding its 
conversion in whole or in part to direct payments to households 
pursuant to any demonstration project carried out or authorized 
under Federal law including demonstration projects created by 
the waiver of provisions of Federal law), except as provided in 
subsection (k), (2) any income in [the certification period 
which] that is received too infrequently or irregularly to be 
reasonably anticipated, but not in excess of $30 in a quarter, 
subject to modification by the Secretary in light of subsection 
(f), (3) all educational loans on which payment is deferred, 
grants, scholarships, fellowships, veterans' educational 
benefits, and the like (A) awarded to a household member 
enrolled at a recognized institution of post-secondary 
education, at a school for the handicapped, in a vocational 
education program, or in a program that provides for completion 
of a secondary school diploma or obtaining the equivalent 
thereof, (B) to the extent that they do not exceed the amount 
used for or made available as an allowance determined by such 
school, institution, program, or other grantor, for tuition and 
mandatory fees (including the rental or purchase of any 
equipment, materials, and supplies related to the pursuit of 
the course of study involved), books, supplies, transportation, 
and other miscellaneous personal expenses (other than living 
expenses), of the student incidental to attending such school, 
institution, or program, and (C) to the extent loans include 
any origination fees and insurance premiums, (4) all loans 
other than educational loans on which repayment is deferred, 
(5) reimbursements which do not exceed expenses actually 
incurred and which do not represent a gain or benefit to the 
household and any allowance a State agency provides no more 
frequently than annually to families with children on the 
occasion of those children's entering or returning to school or 
child care for the purpose of obtaining school clothes (except 
that no such allowance shall be excluded if the State agency 
reduces monthly assistance under a State program funded under 
part A of title IV of the Social Security Act (42 U.S.C. 601 et 
seq.) in the month for which the allowance is provided): 
Provided, That no portion of benefits provided under title 
IV09A of the Social Security Act [(42 U.S.C. 601 et seq.)], to 
the extent it is attributable to an adjustment for work-related 
or child care expenses (except for payments or reimbursements 
for such expenses made under an employment, education, or 
training program initiated under such title after the date of 
enactment of the Hunger Prevention Act of 1988 [September 19, 
1988]), and no portion of any educational loan on which payment 
is deferred, grant, scholarship, fellowship, veterans' 
benefits, and the like that are provided for living expenses, 
shall be considered such reimbursement, (6) moneys received and 
used for the care and maintenance of a third-party beneficiary 
who is not a household member and child support payments made 
by a household member to or for an individual who is not a 
member of the household if the household member is legally 
obligated to make the payments, (7) income earned by a child 
who is a member of the household, who is an elementary or 
secondary school student, and who is 17 years of age or 
younger, (8) moneys received in the form of nonrecurring lump-
sum payments, including, but not limited to, income tax 
refunds, rebates, or credits, cash donations based on need that 
are received from one or more private nonprofit 
charitableorganizations, but not in excess of $300 in the aggregate in 
a quarter, retroactive lump-sum social security or railroad retirement 
pension payments and retroactive lump-sum insurance settlements: 
Provided, That such payments shall be counted as resources, unless 
specifically excluded by other laws, (9) the cost of producing self-
employed income, but household income that otherwise is included under 
this subsection shall be reduced by the extent that the cost of 
producing self-employment income exceeds the income derived from self-
employment as a farmer, (10) any income that any other Federal law 
specifically excludes from consideration as income for purposes of 
determining eligibility for the food stamp program except as otherwise 
provided in subsection (k) of this section, (11)(A) any payments or 
allowances made for the purpose of providing energy assistance under 
any Federal law (other than part A of title IV of the Social Security 
Act (42 U.S.C. 601 et seq.)), or (B) a 1-time payment or allowance made 
under a Federal or State law for the costs of weatherization or 
emergency repair or replacement of an unsafe or inoperative furnace or 
other heating or cooling device, (12) through September 30 of any 
fiscal year, any increase in income attributable to a cost-of-living 
adjustment made on or after July 1 of such fiscal year under title II 
or XVI of the Social Security Act (42 U.S.C. 401 et seq.), section 
3(a)(1) of the Railroad Retirement Act of 1974 (45 U.S.C. 231b(a)(1)), 
or section 3112 of title 38, United States Code, if the household was 
certified as eligible to participate in the food stamp program or 
received an allotment in the month immediately preceding the first 
month in which the adjustment was effective, (13) any payment made to 
the household under section 3507 of the Internal Revenue Code of 1986 
(relating to advance payment of earned income credit), (14) any payment 
made to the household under section 6(d)(4)(I) for work related 
expenses or for dependent care, (15) any amounts necessary for the 
fulfillment of a plan for achieving self-support of a household member 
as provided under subparagraph (A)(iii) or (B)(iv) of section 
1612(b)(4) of the Social Security Act (42 U.S.C. 1382a(b)(4)), (16) at 
the option of the State agency, any educational loans on which payment 
is deferred, grants, scholarships, fellowships, veterans' educational 
benefits, and the like (other than loans, grants, scholarships, 
fellowships, veterans' educational benefits, and the like excluded 
under paragraph (3)), to the extent that they are required to be 
excluded under title XIX of the Social Security Act (42 U.S.C. 1396 et 
seq.), (17) at the option of the State agency, any State complementary 
assistance program payments that are excluded for the purpose of 
determining eligibility for medical assistance under section 1931 of 
the Social Security Act (42 U.S.C. 1396u-1), and (18) at the option of 
the State agency, any types of income that the State agency does not 
consider when determining eligibility for (A) cash assistance under a 
program funded under part A of title IV of the Social Security Act (42 
U.S.C. 601 et seq.) or the amount of such assistance, or (B) medical 
assistance under section 1931 of the Social Security Act (42 U.S.C. 
1396u-1), except that this paragraph does not authorize a State agency 
to exclude wages or salaries, benefits under title I, II, IV, X, XIV, 
or XVI of the Social Security Act (42 U.S.C. 1381 et seq.), regular 
payments from a government source (such as unemployment benefits and 
general assistance), worker's compensation, child support payments made 
to a household member by an individual who is legally obligated to make 
the payments, or such other types of income the consideration of which 
the Secretary determines by regulation to be essential to equitable 
determinations of eligibility and benefit levels.

           *       *       *       *       *       *       *

    Section 2605(f)(1) of the Low-Income Home Energy Assistance 
Act of 1981 (42 U.S.C. 8624(f)) requires that any home energy 
assistance payments or allowances not be considered income or 
resources for purposes of the food stamp program.
    (e) Deductions From Income.--
          [(1) Standard deduction.--The Secretary shall allow a 
        standard deduction for each household in the 48 
        contiguous States and the District of Columbia, Alaska, 
        Hawaii, Guam, and the Virgin Islands of the United 
        States of $134, $229, $189, $269, and $118, 
        respectively.]
          (1) Standard deduction.--
                  (A) In general.--Subject to the other 
                provisions of this paragraph, the Secretary 
                shall allow for each household a standard 
                deduction that is equal to the greater of--
                          (i) the applicable percentage 
                        specified in subparagraph (D) of the 
                        applicable income standard of 
                        eligibility established under 
                        subsection (c)(1); or
                          (ii) the minimum deduction specified 
                        in subparagraph (E).
                  (B) Guam.--The Secretary shall allow for each 
                household in Guam a standard deduction that 
                is--
                          (i) equal to the applicable 
                        percentage specified in subparagraph 
                        (D) of twice the income standard of 
                        eligibility established under 
                        subsection (c)(1) for the 48 contiguous 
                        States and the District of Columbia; 
                        but
                          (ii) not less than the minimum 
                        deduction for Guam specified in 
                        subparagraph (E).
                  (C) Households of 6 or more members.--The 
                income standard of eligibility established 
                under subsection (c)(1) for a household of 6 
                members shall be used to calculate the standard 
                deduction for each household of 6 or more 
                members.
                  (D) Applicable percentage.--For the purpose 
                of subparagraph (A), the applicable percentage 
                shall be--
                          (i) 8 percent for each of fiscal 
                        years 2002 through 2007;
                          (ii) 8.25 percent for fiscal year 
                        2008;
                          (iii) 8.5 percent for each of fiscal 
                        years 2009 and 2010; and
                          (iv) 9 percent for fiscal year 2011 
                        and each fiscal year thereafter.
                  (E) Minimum deduction.--The minimum deduction 
                shall be $134, $229, $189, $269, and $118 for 
                the 48 contiguous States and the District of 
                Columbia, Alaska, Hawaii, Guam, and the Virgin 
                Islands of the United States, respectively.
          (2) Earned income deduction.--

           *       *       *       *       *       *       *

                  (B) Excluded expenses.--The excluded expenses 
                referred to in subparagraph (A) are--
                          (i) expenses paid on behalf of the 
                        household by a third party;
                          (ii) amounts made available and 
                        excluded, for the expenses referred to 
                        in subparagraph (A), under subsection 
                        (d)(3); and
                          (iii) expenses that are paid under 
                        section 6(d)(4).
          [(4) Deduction for child support payments.-- 
                  [(A) In general.--A household shall be 
                entitled to a deduction for child support 
                payments made by a household member to or for 
                an individual who is not a member of the 
                household if the household member is legally 
                obligated to make the payments.
                  [(B) Methods for determining amount.--The 
                Secretary may prescribe by regulation the 
                methods, including calculation on a 
                retrospective basis, that a State agency shall 
                use to determine the amount of the deduction 
                for child support payments.]
          (4) Deduction for child support payments.--
                  (A) In general.--In lieu of providing an 
                exclusion for legally obligated child support 
                payments made by a household member under 
                subsection (d)(6), a State agency may elect to 
                provide a deduction for the amount of the 
                payments.
                  (B) Order of determining deductions.--A 
                deduction under this paragraph shall be 
                determined before the computation of the excess 
                shelter expense deduction under paragraph (7).
          [(5) Homeless shelter allowance.--Under rules 
        prescribed by the Secretary, a State agency may develop 
        a standard homeless shelter allowance, which shall not 
        exceed $143 per month, for such expenses as may 
        reasonably be expected to be incurred by households in 
        which all members are homeless individuals but are not 
        receiving free shelter throughout the month. A State 
        agency that develops the allowance may use the 
        allowance in determining eligibility and allotments for 
        the households. The State agency may make a household 
        with extremely low shelter costs ineligible for the 
        allowance.]
          [(6)] (5) Excess medical expense deduction.--
                  (A) In general.--A household containing an 
                elderly or disabled member shall be entitled, 
                with respect to expenses other than expenses 
                paid on behalf of the household by a third 
                party, to an excess medical expense deduction 
                for the portion of the actual costs of 
                allowable medical expenses, incurred by the 
                elderly or disabled member, exclusive of 
                special diets, that exceeds $35 per month.
                  (B) Method of claiming deduction.--
                          (i) In general.--A State agency shall 
                        offer an eligible household under 
                        subparagraph (A) a method of claiming a 
                        deduction for recurring medical 
                        expenses that are initially verified 
                        under the excess medical expense 
                        deduction in lieu of submitting 
                        information on, or verification of, 
                        actual expenses on a monthly basis.
                          (ii) Method.--The method described in 
                        clause (i) shall--
                                  (I) be designed to minimize 
                                the burden for the eligible 
                                elderly or disabled household 
                                member choosing to deduct the 
                                recurrent medical expenses of 
                                the member pursuant to the 
                                method;
                                  (II) rely on reasonable 
                                estimates of the expected 
                                medical expenses of the member 
                                for the [certification period] 
                                eligibility review period 
                                (including changes that can be 
                                reasonably anticipated based on 
                                available information about the 
                                medical condition of the 
                                member, public or private 
                                medical insurance coverage, and 
                                the current verified medical 
                                expenses incurred by the 
                                member); and
                                  (III) not require further 
                                reporting or verification of a 
                                change in medical expenses if 
                                such a change [has been 
                                anticipated for the 
                                certification period] was 
                                anticipated when the household 
                                applied or at the most recent 
                                redetermination of eligibility 
                                for the household.
          [(7)] (6) Excess shelter expense deduction.--
                  (A) In general.--[A household]
                          (i) In general._A household shall be 
                        entitled, with respect to expenses 
                        other than expenses paid on behalf of 
                        the household by a third party, to an 
                        excess shelter expense deduction to the 
                        extent that the monthly amount expended 
                        by a household for shelter exceeds an 
                        amount equal to 50 percent of monthly 
                        household income after all other 
                        applicable deductions have been 
                        allowed.
                          (ii) Inclusion of certain payments.--
                        In determining the shelter expenses of 
                        a household under this paragraph, the 
                        State agency shall include any required 
                        payment to the landlord of the 
                        household without regard to whether the 
                        required payment is designated to pay 
                        specific charges.

           *       *       *       *       *       *       *

                                  (I) In general.--A State 
                                agency may make the use of a 
                                standard utility allowance 
                                mandatory for all households 
                                with qualifying utility costs 
                                if--
                                          (aa) the State agency 
                                        has developed 1 or more 
                                        standards that include 
                                        the cost of heating and 
                                        cooling and 1 or more 
                                        standards that do not 
                                        include the cost of 
                                        heating and cooling; 
                                        and
                                          (bb) the Secretary 
                                        finds (without regard 
                                        to subclause (III)) 
                                        that the standards will 
                                        not result in an 
                                        increased cost to the 
                                        Secretary.
                                  (II) Household election.--A 
                                State agency that has not made 
                                the use of a standard utility 
                                allowance mandatory under 
                                subclause (I) shall allow a 
                                household to switch, at [the 
                                end of a certification period] 
                                each redetermination of the 
                                eligibility of the household, 
                                between the standard utility 
                                allowance and a deduction based 
                                on the actual utility costs of 
                                the household.
                                  (III) Inapplicability of 
                                certain restrictions.--Clauses 
                                (ii)(II) and (ii)(III) shall 
                                not apply in the case of a 
                                State agency that has made the 
                                use of a standard utility 
                                allowance mandatory under 
                                subclause (I).

           *       *       *       *       *       *       *

                                  (IV) Proration of 
                                assistance.--For the purpose of 
                                the food stamp program, 
                                assistance provided under the 
                                Low-Income Home Energy 
                                Assistance Act of 1981 (42 
                                U.S.C. 8621 et seq.) shall be 
                                considered to be prorated over 
                                the entire heating or cooling 
                                season for which the assistance 
                                was provided.
                  (D) Homeless households.--
                          (i) Alternative deduction.--In lieu 
                        of the deduction provided under 
                        subparagraph (A), a State agency may 
                        elect to allow a household in which all 
                        members are homeless individuals, but 
                        that is not receiving free shelter 
                        throughout the month, to receive a 
                        deduction of $143 per month.
                          (ii) Ineligibility.--The State agency 
                        may make a household with extremely low 
                        shelter costs ineligible for the 
                        alternative deduction under clause (i).
    (n) State Options To Simplify Determination of Child 
Support Payments Made by Household Members.--
          (1) In general.--Regardless of whether a State agency 
        elects to provide a deduction under subsection (e)(4), 
        the Secretary shall establish simplified procedures to 
        allow State agencies, at the option of the State 
        agencies, to determine the amount of the legally 
        obligated child support payments made, including 
        procedures to allow the State agency to rely on 
        information from the agency responsible for 
        implementing the program under part D of title IV of 
        the Social Security Act (42 U.S.C. 661 et seq.) 
        concerning payments made in prior months in lieu of 
        obtaining current information from the household.
          (2) Duration of determination of amount of support 
        payments.--If a State agency makes a determination of 
        the amount of support payments of a household under 
        paragraph (1), the State agency may provide that the 
        amount of the exclusion or deduction for the household 
        shall not change until the eligibility of the household 
        is next redetermined under section 11(e)(4).
    (f)(1)(A) Household income for those households that, by 
contract for other than an hourly or piecework basis or by 
self-employment, derive their annual income in a period of time 
shorter than one year shall be calculated by averaging such 
income over a twelve-month period. Notwithstanding the 
preceding sentence, household income resulting from the self-
employment of a member in a farming operation, who derives 
income from such farming operation and who has irregular 
expenses to produce such income, may, at the option of the 
household, be calculated by averaging such income and expenses 
over a 12-month period. Notwithstanding the first sentence, if 
the averaged amount does not accurately reflect the household's 
actual monthly circumstances because the household has 
experienced a substantial increase or decrease in business 
earnings, the State agency shall calculate the self-employment 
income based on anticipated earnings.
    (B) Household income for those households that receive 
nonexcluded income of the type described in subsection (d)(3) 
of this section shall be calculated by averaging such income 
over the period for which it is received.
    (C) Simplified determination of earned income.--
          (i) In general.--A State agency may elect to 
        determine monthly earned income by multiplying weekly 
        income by 4 and biweekly income by 2.
          (ii) Adjustment of earned income deduction.--A State 
        agency that makes an election described in clause (i) 
        shall adjust the earned income deduction under 
        subsection (e)(2)(B) to the extentnecessary to prevent 
the election from resulting in increased costs to the food stamp 
program, as determined consistent with standards promulgated by the 
Secretary.
    (D) Simplified determination of deductions.--
          (i) In general.--Except as provided in clause (ii), 
        for the purposes of subsection (e), a State agency may 
        elect to disregard until the next redetermination of 
        eligibility under section 11(e)(4) 1 or more types of 
        changes in the circumstances of a household that affect 
        the amount of deductions the household may claim under 
        subsection (e).
          (ii) Changes that may not be disregarded.--Under 
        clause (i), a State agency may not disregard--
                  (I) any reported change of residence; or
                  (II) under standards prescribed by the 
                Secretary, any change in earned income.

           *       *       *       *       *       *       *

          (5) The Secretary shall promulgate rules by which 
        State agencies shall develop standards for identifying 
        kinds of resources that, as a practical matter, the 
        household is unlikely to be able to sell for any 
        significant return because the household's interest is 
        relatively slight or because the cost of selling the 
        household's interest would be relatively great. 
        Resources so identified shall be excluded as 
        inaccessible resources. A resource shall be so 
        identified if its sale or other disposition is unlikely 
        to produce any significant amount of funds for the 
        support of the household. The Secretary shall not 
        require the State agency to require verification of the 
        value of a resource to be excluded under this paragraph 
        unless the State agency determines that the information 
        provided by the household is questionable.
          (6) Exclusion of types of financial resources not 
        considered under certain other federal programs.--
                  (A) In general.--Subject to subparagraph (B), 
                the Secretary shall promulgate regulations 
                under which a State agency may, at the option 
                of the State agency, exclude from financial 
                resources under this subsection any types of 
                financial resources that the State agency does 
                not consider when determining eligibility for--
                          (i) cash assistance under a program 
                        funded under part A of title IV of the 
                        Social Security Act (42 U.S.C. 601 et 
                        seq.); or
                          (ii) medical assistance under section 
                        1931 of the Social Security Act (42 
                        U.S.C. 1396u-1).
                  (B) Limitations.--Subparagraph (A) does not 
                authorize a State agency to exclude--
                          (i) cash;
                          (ii) licensed vehicles;
                          (iii) amounts in any account in a 
                        financial institution that are readily 
                        available to the household; or
                          (iv) any other similar type of 
                        resource the inclusion in financial 
                        resources of which the Secretary 
                        determines by regulation to be 
                        essential to equitable determinations 
                        of eligibility under the food stamp 
                        program, except to the extent that any 
                        of those types of resources are 
                        excluded under another paragraph of 
                        this subsection.
    (h)(1) The Secretary shall, after consultation with the 
official empowered to exercise the authority provided for by 
sections 402 and 502 of the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. 5121 et seq.), 
establish temporary emergency standards of eligibility for the 
duration of the emergency for households who are victims of a 
disaster which disrupts commercial channels of food 
distribution, if such households are in need of temporary food 
assistance and if commercial channels of food distribution have 
again become available to meet the temporary food needs of such 
households. Such standards as are prescribed for individual 
emergencies may be promulgated without regard to section 4(c) 
of this Act or the procedures set forth in section 553 of title 
5 of the United States Code.
    (2) The Secretary shall--
          (A) establish a Food Stamp Disaster Task Force to 
        assist States in implementing and operating the 
        disaster program and the regular food stamp program in 
        the disaster area; and
          (B) if the Secretary, in the Secretary's discretion, 
        determines that it is cost-effective to send members of 
        the Task Force to the disaster area, the Secretary 
        shall send them to such area as soon as possible after 
        the disaster occurs to provide direct assistance to 
        State and local officials.
    (3)(A) The Secretary shall provide, by regulation, for 
emergency allotments to eligible households to replace food 
destroyed in a disaster. The regulations shall provide for 
replacement of the value of food actually lost up to a limit 
approved by the Secretary not greater than the applicable 
maximum monthly allotment for the household size.
    (B) The Secretary shall adjust issuance methods reporting 
and other application requirements to be consistent with what 
is practicable under actual conditions in the affected area. In 
making thisadjustment, the Secretary shall consider the 
availability of the State agency's offices and personnel, any 
conditions that make reliance on electronic benefit transfer systems 
described in section 7(i) impracticable, and any damage to or 
disruption of transportation and communication facilities.

           *       *       *       *       *       *       *

    (D) Any sponsor of an alien, and such alien, shall be 
jointly and severably liable for an amount equal to any 
overpayment made to such alien during the period of three years 
after such alien's entry into the United States, on account of 
such sponsor's failure to provide correct information under the 
provisions of this section, except where such sponsor was 
without fault, or where good cause for such failure existed. 
Any such overpayment which is not repaid shall be recovered in 
accordance with the provisions of section 13(b)(2) of this Act.
    (E) The provisions of this subsection shall not apply with 
respect to any alien who is a member of the sponsor's 
household, as defined in section 3(i) of this Act, or to any 
alien who is under 18 years of age.

           *       *       *       *       *       *       *

    (4) Third party energy assistance payments.--
          (A) Energy assistance payments.--For purposes of 
        subsection (d)(1), a payment made under a State law 
        (other than a law referred to in paragraph (2)(H)) to 
        provide energy assistance to a household shall be 
        considered money payable directly to the household.
          (B) Energy assistance expenses.--For purposes of 
        [subsection (e)(7)] subsection (e)(6), an expense paid 
        on behalf of a household under a State law to provide 
        energy assistance shall be considered an out-of-pocket 
        expense incurred and paid by the household.

           *       *       *       *       *       *       *


                     ELIGIBILITY DISQUALIFICATIONS

    Sec. 6. (a) In addition to meeting the standards of 
eligibility prescribed in section 5 of this Act, households and 
individuals who are members of eligible households must also 
meet and comply with the specific requirements of this section 
to be eligible for participation in the food stamp program.

           *       *       *       *       *       *       *

          (4) The Secretary shall prescribe such regulations as 
        the Secretary may deem appropriate to ensure that 
        information concerning any such determination with 
        respect to a specific individual is forwarded to the 
        Office of the Secretary by any appropriate State or 
        Federal entity for the use of the Secretary in 
        administering the provisions of this section. No State 
        shall withhold such information from the Secretary or 
        the Secretary's designee for any reason whatsoever.
    (c) [No household] Except in a case in which a household is 
receiving transitional benefits during the transitional 
benefits period under section 11(s), no household shall be 
eligible to participate in the food stamp program if it refuses 
to cooperate in providing information to the State agency that 
is necessary for making a determination of its eligibility or 
for completing any subsequent review of its eligibility.
          (1)(A) A State agency may require certain categories 
        of households to file periodic reports of income and 
        household circumstances in accordance with standards 
        prescribed by the Secretary, except that a State agency 
        may not require periodic reporting by--
                  (i) migrant or seasonal farmworker 
                households;
                  (ii) households in which all members are 
                homeless individuals; or
                  (iii) households that have no earned income 
                and in which all adult members are elderly or 
                disabled.
          (B) Each household that is not required to file such 
        periodic reports on a monthly basis shall be required 
        to report or cause to be reported to the State agency 
        changes in income or household circumstances that the 
        Secretary considers necessary to assure accurate 
        eligibility and benefit determinations.
          (C) A State agency may require periodic reporting on 
        a monthly basis by households residing on a reservation 
        only if--
                  (i) the State agency reinstates benefits, 
                without requiring a new application, for any 
                household residing on a reservation that 
                submits a report not later than 1 month after 
                the end of the month in which benefits would 
                otherwise be provided;
                  (ii) the State agency does not delay, reduce, 
                suspend, or terminate the allotment of a 
                household that submits a report not later than 
                1 month after the end of the month in which the 
                report is due;
                  (iii) on the date of enactment of this 
                subparagraph, the State agency requires 
                households residing on a reservation to file 
                periodic reports on a monthly basis; and
                  (iv) the [certification period] interval 
                between required redeterminations of 
                eligibility for households residing on a 
                reservation that are required to file 
                periodic reports on a monthly basis is 2 
                years, unless the State demonstrates just 
                cause to the Secretary for a shorter 
                [certification period] interval between 
                required redeterminations of eligibility.
          (D) Frequency of reporting.--
                  (i) In general.--Except as provided in 
                subparagraphs (A) and (C), a State agency may 
                require households that report on a periodic 
                basis to submit reports--
                          (I) not less often than once each 6 
                        months; but
                          (II) not more often than once each 
                        month.
                  (ii) Reporting by households with excess 
                income.--A household required to report less 
                often than once each 3 months shall, 
                notwithstanding subparagraph (B), report in a 
                manner prescribed by the Secretary if the 
                income of the household for any month exceeds 
                the standard established under section 5(c)(2).

           *       *       *       *       *       *       *

                  (v) Selecting a head of household.--
                          (I) In general.--For purposes of this 
                        paragraph, the State agency shall allow 
                        the household to select any adult 
                        parent of a child in the household as 
                        the head of the household if all adult 
                        household members making application 
                        under the food stamp program agree to 
                        the selection.
                          (II) Time for making designation.--A 
                        household may designate the head of the 
                        household under subclause (I) each time 
                        the household is certified for 
                        participation in the food stamp 
                        program, but may not change the 
                        designation during a [certification 
                        period] an eligibility review period 
                        unless there is a change in the 
                        composition of the household.

           *       *       *       *       *       *       *

          (B) a program under section 236 of the Trade Act of 
        1974 (19 U.S.C. 2296); [and]
          (C) a program of employment and training operated or 
        supervised by a State or political subdivision of a 
        State that meets standards approved by the Governor of 
        the State, including a program under subsection (d)(4), 
        other than a job search program or a job search 
        training program; and
          (D) a job search program or job search training 
        program if--
                  (i) the program meets standards established 
                by the Secretary to ensure that the participant 
                is continuously and actively seeking employment 
                in the private sector; and
                  (ii) no position is currently available for 
                the participant in an employment or training 
                program that meets the requirements of 
                subparagraph (C).
          (2) Work requirement.--Subject to the other 
        provisions of this subsection, no individual shall be 
        eligible to participate in the food stamp program as a 
        member of any household if, during the preceding [36-
        month] 24-month period, the individual received food 
        stamp benefits for not less than [3] 6 months 
        (consecutive or otherwise) during which the individual 
        did not--

           *       *       *       *       *       *       *

                  (B) Report.--The Secretary shall report the 
                basis for a waiver under subparagraph (A) to 
                the Committee on Agriculture of the House of 
                Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the 
                Senate.
          [(5) Subsequent eligibility.--
                  [(A) Regaining eligibility.--An individual 
                denied eligibility under paragraph (2) shall 
                regain eligibility to participate in the food 
                stamp program if, during a 30-day period, the 
                individual--
                          [(i) works 80 or more hours;
                          [(ii) participates in and complies 
                        with the requirements of a work program 
                        for 80 or more hours, as determined by 
                        a State agency; or
                          [(iii) participates in and complies 
                        with the requirements of a program 
                        under section 20 or a comparable 
                        program established by a State or 
                        political subdivision of a State.
                  [(B) Maintaining eligibility.--An individual 
                who regains eligibility under subparagraph (A) 
                shall remain eligible as long as the individual 
                meets the requirements of subparagraph (A), 
                (B), or (C) of paragraph (2).
                  [(C) Loss of employment.--
                          [(i) In general.--An individual who 
                        regained eligibility under subparagraph 
                        (A) and who no longer meets the 
                        requirements of subparagraph (A), (B), 
                        or (C) of paragraph (2) shall remain 
                        eligible for a consecutive 3-month 
                        period, beginning on the date the 
                        individual first notifies the State 
                        agency that the individual no longer 
                        meets the requirements of subparagraph 
                        (A), (B), or (C) of paragraph (2).
                          [(ii) Limitation.--An individual 
                        shall not receive any benefits pursuant 
                        to clause (i) for more than a single 3-
                        month period.]
          (5) Eligibility of individuals while meeting work 
        requirement.--Notwithstanding paragraph (2), an 
        individual who would otherwise be ineligible under that 
        paragraph shall be eligible to participate in the food 
        stamp program during any period in which the individual 
        meets the work requirement of subparagraph (A), (B), or 
        (C) of that paragraph.
          (6) 15-percent exemption.--
                  (A) Definitions.--In this paragraph:
                          (i) Caseload.--The term ``caseload'' 
                        means the average monthly number of 
                        individuals receiving food stamps 
                        during the 12-month period ending the 
                        preceding June 30.
                          (ii) Covered individual.--The term 
                        ``covered individual'' means a food 
                        stamp recipient, or an individual 
                        denied eligibility for food stamp 
                        benefits solely due to paragraph (2), 
                        who--
                                  (I) is not eligible for an 
                                exception under paragraph (3);
                                  (II) does not reside in an 
                                area covered by a waiver 
                                granted under paragraph (4);
                                  (III) is not complying with 
                                subparagraph (A), (B), or (C) 
                                of paragraph (2) and;
                                  (IV) is not receiving food 
                                stamp benefits during the [3] 6 
                                months of eligibility provided 
                                under paragraph (2)[; and].
                                  [(V) is not receiving food 
                                stamp benefits under paragraph 
                                (5).]
                  (B) General rule.--Subject to subparagraphs 
                (C) through (G), a State agency may provide an 
                exemption from the requirements of paragraph 
                (2) for covered individuals.

           *       *       *       *       *       *       *

                  (A) Implementation.--Not later than October 
                1, 2002, each State agency shall implement an 
                electronic benefit transfer system under which 
                household benefits determined under section 
                8(a) or 26 are issued from and stored in a 
                central databank, unless the Secretary provides 
                a waiver for a State agency that faces unusual 
                barriers to implementing an electronic benefit 
                transfer system.
                  (B) Timely implementation.--Each State agency 
                is encouraged to implement an electronic 
                benefit transfer system under subparagraph (A) 
                as soon as practicable.
                  (C) State flexibility.--Subject to paragraph 
                (2), a State agency may procure and implement 
                an electronic benefit transfer system under the 
                terms, conditions, and design that the State 
                agency considers appropriate.
                  (D) Operation.--An electronic benefit 
                transfer system should take into account 
                generally accepted standard operating rules 
                based on--
                          (i) commercial electronic funds 
                        transfer technology;
                          (ii) the need to permit interstate 
                        operation and law enforcement 
                        monitoring; and
                          (iii) the need to permit monitoring 
                        and investigations by authorized law 
                        enforcement agencies.
                  (E) Access to ebt systems.--
                          (i) In general.--No benefits shall be 
                        taken off-line or otherwise made 
                        inaccessible because of inactivity 
                        until at least 180 days have elapsed 
                        since a household last accessed the 
                        account of the household.
                          (ii) Notice to household.--In a case 
                        in which benefits are taken off-line or 
                        otherwise made inaccessible, the 
                        household shall be sent a notice that--
                                  (I) explains how to 
                                reactivate the benefits; and
                                  (II) offers assistance if the 
                                household is having difficulty 
                                accessing the benefits of the 
                                household.
          (2) The Secretary shall issue final regulations that 
        establish standards for the approval of such a system. 
        The standards shall include--
                  [(A) determining the cost-effectiveness of 
                the system to ensure that its operational cost, 
                including the pro rata cost of capital 
                expenditures and other reasonable startup 
                costs, does not exceed the operational cost of 
                issuance systems in use prior to the 
                implementation of the electronic benefit 
                transfer system] system;
                  [(B)] (A) defining the required level of 
                recipient protection regarding privacy, ease of 
                use, and access to and service in retail food 
                stores;
                  [(C)] (B) the terms and conditions of 
                participation by retail food stores, financial 
                institutions, and other appropriate parties;
                  [(D)](C)(i) measures to maximize the security 
                of a system using the most recent technology 
                available that the State agency considers 
                appropriate and cost effective and which may 
                include personal identification numbers, 
                photographic identification on electronic 
                benefit transfer cards, and other measures to 
                protect against fraud and abuse; and
                  (ii) effective not later than 2 years after 
                the date of enactment of this clause [August 
                22, 1996], to the extent practicable, measures 
                that permit a system to differentiate items of 
                food that may be acquired with an allotment 
                from items of food that may not be acquired 
                with an allotment;
                  [(E)] (D) system transaction interchange, 
                reliability, and processing speeds;
                  [(F)] (E) financial accountability;
                  [(G)] (F) the required testing of system 
                operations prior to implementation;
                  [(H)] (G) the analysis of the results of 
                system implementation in a limited project area 
                prior to expansion; and
                  [(I)] (H) procurement standards.

           *       *       *       *       *       *       *


                           VALUE OF ALLOTMENT

    Sec. 8. (a) The value of the allotment which State agencies 
shall be authorized to issue to any households certified as 
eligible to participate in the food stamp program shall be 
equal to the cost to such households of the thrifty food plan 
reduced by an amount equal to 30 per centum of the household's 
income, as determined in accordance with section 5 (d) and (e) 
of this Act, rounded to the nearest lower whole dollar: 
Provided, That for households of one and two persons the 
minimum allotment shall be $10 per month.

           *       *       *       *       *       *       *

    (c)(1) The value of the allotment issued to any eligible 
household for the initial month or other initial period for 
which an allotment is issued shall have a value which bears the 
same ratio to the value of the allotment for a full month or 
other initial period for which the allotment is issued as the 
number of days (from the date of application) remaining in the 
month or other initial period for which the allotment is issued 
bears to the total number of days in the month or other initial 
period for which the allotment is issued, except that no 
allotment may be issued to a household for the initial month or 
period if the value of the allotment which such household would 
otherwise be eligible to receive under this subsection is less 
than $10. Households shall receive full months' allotments for 
all months [within a certification period], except as provided 
in the first sentence of this paragraph with respect to an 
initial month.
    (2) As used in this subsection, the term ``initial month'' 
means (A) the first month for which an allotment is issued to a 
household, (B) the first month for which an allotment is issued 
to a household following any period in which such household was 
not participating in the food stamp program under this Act 
after the [expiration of a certification period or after the 
termination of the certification of a household, during a 
certification period,] termination of benefits to the 
household, when the household ceased to be eligible after 
notice and an opportunity for a hearing under section 
11(e)(10), and (C) in the case of a migrant or seasonal 
farmworker household, the first month for which allotment is 
issued to a household that applies following any period of more 
than 30 days in which such household was not participating in 
the food stamp program after previous participation in such 
program.

           *       *       *       *       *       *       *

    (e) Allotments for Households Residing in Centers.--
          (1) In general.--In the case of an individual who 
        resides in a center for the purpose of a drug or 
        alcoholic treatment program described in [the last 
        sentence of section 3(i)] section 3(i)(5), a State 
        agency may provide an allotment for the individual to--
                  (A) the center as an authorized 
                representative of the individual for a period 
                that is less than 1 month; and
                  (B) the individual, if the individual leaves 
                the center.
          (2) Direct payment.--A State agency may require an 
        individual referred to in paragraph (1) to designate 
        the center in which the individual resides as the 
        authorized representative of the individual for the 
        purpose of receiving an allotment.
    (f) Simplified Procedures for Residents of Certain Group 
Facilities.--
          (1) In general.--At the option of the State agency, 
        allotments for residents of facilities described in 
        subparagraph (A), (B), or (E) of section 3(i)(5) may be 
        determined and issued under this subsection in lieu of 
        subsection (a).
          (2) Amount of allotment.--The allotment for each 
        eligible resident described in paragraph (1) shall be 
        calculated in accordance with standardized procedures 
        established by the Secretary that take into account the 
        allotments typically received by residents of 
        facilities described in paragraph (1).
          (3) Issuance of allotment.--
                  (A) In general.--The State agency shall issue 
                an allotment determined under this subsection 
                to the administration of a facility described 
                in paragraph (1) as the authorized representative 
                of the residents of the facility.
                  (B) Adjustment.--The Secretary shall 
                establish procedures to ensure that a facility 
                described in paragraph (1) does not receive a 
                greater proportion of a resident's monthly 
                allotment than the proportion of the month 
                during which the resident lived in the 
                facility.
          (4) Departures of covered residents.--
                  (A) Notification.--Any facility described in 
                paragraph (1) that receives an allotment for a 
                resident under this subsection shall--
                          (i) notify the State agency promptly 
                        on the departure of the resident; and
                          (ii) notify the resident, before the 
                        departure of the resident, that the 
                        resident--
                                  (I) is eligible for continued 
                                benefits under the food stamp 
                                program; and
                                  (II) should contact the State 
                                agency concerning continuation 
                                of the benefits.
                  (B) Issuance to departed residents.--On 
                receiving a notification under subparagraph 
                (A)(i) concerning the departure of a resident, 
                the State agency--
                          (i) shall promptly issue the departed 
                        resident an allotment for the days of 
                        the month after the departure of the 
                        resident (calculated in a manner 
                        prescribed by the Secretary) unless the 
                        departed resident reapplies to 
                        participate in the food stamp program; 
                        and
                          (ii) may issue an allotment for the 
                        month following the month of the 
                        departure (but not any subsequent 
                        month) based on this subsection unless 
                        the departed resident reapplies to 
                        participate in the food stamp program.
                  (C) State option.--The State agency may elect 
                not to issue an allotment under subparagraph 
                (B)(i) if the State agency lacks sufficient 
                information on the location of the departed 
                resident to provide the allotment.
                  (D) Effect of reapplication.--If the departed 
                resident reapplies to participate in the food 
                stamp program, the allotment of the departed 
                resident shall be determined without regard to 
                this subsection.

           *       *       *       *       *       *       *

    Section 705(a)(2)(D) of the Older Americans Act Amendments 
of 1992 (Public Law 102-375; 42 U.S.C. 3058k note) provides 
that the purposes of such section is to provide outreach, 
counseling, and assistance in order to assist older individuals 
in obtaining benefits under public programs under which the 
individuals are entitled to benefits, including benefits under 
the program established under this Act.
          (2)(A) that the State agency shall establish 
        procedures governing the operation of food stamp 
        offices that the State agency determines best serve 
        households in the State, including households with 
        special needs, such as households with elderly or 
        disabled members, households in rural areas with low-
        income members, homeless individuals, households 
        residing on reservations, and households in areas in 
        which a substantial number of members of low-income 
        households speak a language other than English.
          (B) In carrying out subparagraph (A), a State 
        agency--
                  (i) shall provide timely, accurate, and fair 
                service to applicants for, and participants in, 
                the food stamp program;
                  (ii)(I) shall develop an application 
                containing the information necessary to comply 
                with this Act; and
                  (II) if the State agency maintains a website 
                for the State agency, shall make the 
                application available on the website in each 
                language in which the State agency makes a 
                printed application available;
                  (iii) shall permit an applicant household to 
                apply to participate in the program on the same 
                day that the household first contacts a food 
                stamp office in person during office hours;

           *       *       *       *       *       *       *

          [(4) that the State agency shall insure that each 
        participating household receive a notice of expiration 
        of its certification prior to the start of the last 
        month of its certification period advising the 
        household that it must submit a new application in 
        order to renew its eligibility for a new certification 
        period and, further, that each such household which 
        seeks to be certified another time or more times 
        thereafter by filing an application for such 
        recertification no later than fifteen days prior to the 
        day upon which its existing certification period 
        expires shall, if found to be still eligible, receive 
        its allotment no later than one month after the receipt 
        of the last allotment issued to it pursuant to its 
        prior certification, but if such household is found to 
        be ineligible or to be eligible for a smaller allotment 
        during the new certification period it shall not 
        continue to participate and receive benefits on the 
        basis authorized for the preceding certification period 
        even if it makes a timely request for a fair hearing 
        pursuant to paragraph (10) of this subsection: Provided, 
        That the timeliness standards for submitting the notice 
        of expiration and filing an application for recertification 
        may be modified by the Secretary in light of sections 
        5(f)(2) and 6(c) of this Act if administratively necessary;]
          (4)(A) that the State agency shall periodically 
        require each household to cooperate in a 
        redetermination of the eligibility of the household.
          (B) A redetermination under subparagraph (A) shall--
                  (i) be based on information supplied by the 
                household; and
                  (ii) conform to standards established by the 
                Secretary.
          (C) The interval between redeterminations of 
        eligibility under subparagraph (A) shall not exceed the 
        eligibility review period;
          (5) the specific standards to be used in determining 
        the eligibility of applicant households which shall be 
        in accordance with sections 5 and 6 of this Act and 
        shall include no additional requirements imposed by the 
        State agency;

           *       *       *       *       *       *       *

          (10) for the granting of a fair hearing and a prompt 
        determination thereafter to any household aggrieved by 
        the action of the State agency under any provision of 
        its plan of operation as it affects the participation 
        of such household in the food stamp program or by a 
        claim against the household for an overissuance: 
        Provided, That any household which timely requests such 
        a fair hearing after receiving individual notice of 
        agency action reducing or terminating its benefits 
        [within the household's certification period] shall 
        continue to participate and receive benefits on the 
        basis authorized immediately prior to the notice of 
        adverse action until such time as the fair hearing is 
        completed and an adverse decision rendered [or until 
        such time as the household's certification period 
        terminates, whichever occurs earlier], except that in 
        any case in which the State agency receives from the 
        household a written statement containing information 
        that clearly requires a reduction or termination of the 
        household's benefits, the State agency may act 
        immediately to reduce or terminate the household's 
        benefits and may provide notice of its action to the 
        household as late as the date on which the action 
        becomes effective. At the option of a State, at any 
        time prior to a fair hearing determination under this 
        paragraph, a household may withdraw, orally or in 
        writing, a request by the household for the fair 
        hearing. If the withdrawal request is an oral request, 
        the State agency shall provide a written notice to the 
        household confirming the withdrawal request and 
        providing the household with an opportunity to request 
        a hearing;
          (11) upon receipt of a request from a household, for 
        the prompt restoration in the form of coupons to a 
        household of any allotment or portion thereof which has 
        been wrongfully denied or terminated, except that 
        allotments shall not be restored for any period of time 
        more than one year prior to the date the State agency 
        receives a request for such restoration from a 
        household or the State agency is notified or otherwise 
        discovers that a loss to a household has occurred;
          (12) for the submission of such reports and other 
        information as from time to time may be required by the 
        Secretary;

           *       *       *       *       *       *       *

          (16) notwithstanding paragraph (8) of this 
        subsection, for the immediate reporting to the 
        Immigration and Naturalization Service by the State 
        agency of a determination by personnel responsible [for 
        the certification or recertification] determining the 
        eligibility of households that any member of a 
        household is ineligible to receive food stamps because 
        that member is present in the United States in 
        violation of the Immigration and Nationality Act [(8 
        U.S.C. 1101 et seq.)];
          (17) at the option of the State agency, for the 
        establishment and operation of an automatic data 
        processing and information retrieval system that meets 
        such conditions as the Secretary may prescribe and that 
        is designed to provide efficient and effective 
        administration of the food stamp program;

           *       *       *       *       *       *       *

          [(2) Grants.--
                  [(A) In general.--The Secretary shall make 
                available not more than $600,000 for each of 
                fiscal years 1998 through 2001 to pay the 
                Federal share of grants made to eligible 
                private nonprofit organizations and State 
                agencies to carry out subparagraph (B).
                  [(B) Eligibility.--A private nonprofit 
                organization or State agency shall be eligible 
                to receive a grant under subparagraph (A) if 
                the organization or agency agrees--
                          [(i) to use the funds to direct a 
                        collaborative effort to coordinate and 
                        integrate nutrition education into 
                        health, nutrition, social service, and 
                        food distribution programs for food 
                        stamp participants and other low-income 
                        households; and
                          [(ii) to design the collaborative 
                        effort to reach large numbers of food 
                        stamp participants and other low-income 
                        households through a network of 
                        organizations, including schools, child 
                        care centers, farmers' markets, health 
                        clinics, and outpatient education 
                        services.
                  [(C) Preference.--In deciding between 2 or 
                more private nonprofit organizations or State 
                agencies that are eligible to receive a grant 
                under subparagraph (B), the Secretary shall 
                give a preference to an organization or agency 
                that conducted a collaborative effort described 
                in subparagraph (B) and received funding for 
                the collaborative effort from the Secretary 
                before the date of enactment of this paragraph.
                  [(D) Federal share.--
                          [(i) In general.--Subject to 
                        subparagraph (E), the Federal share of 
                        a grant under this paragraph shall be 50 
                        percent.
                          [(ii) No in-kind contributions.--The 
                        non-Federal share of a grant under this 
                        paragraph shall be in cash.
                          [(iii) Private funds.--The non-
                        Federal share of a grant under this 
                        paragraph may include amounts from 
                        private nongovernmental sources.
                  [(E) Limit on individual grant.--The Federal 
                share of a grant under subparagraph (A) may not 
                exceed $200,000 for a fiscal year.]
          (2) Nutrition education clearinghouse.--The Secretary 
        shall--
                  (A) request State agencies to submit to the 
                Secretary descriptions of successful nutrition 
                education programs designed for use in the food 
                stamp program and other nutrition assistance 
                programs;
                  (B) make the descriptions submitted under 
                subparagraph (A) available on the website of 
                the Department of Agriculture; and
                  (C) inform State agencies of the availability 
                of the descriptions on the website.

           *       *       *       *       *       *       *

    (q) Denial of Food Stamps for Prisoners.--The Secretary 
shall assist States, to the maximum extent practicable, in 
implementing a system to conduct computer matches or other 
systems to prevent prisoners described in section 11(e)(20)(B) 
from participating in the food stamp program as a member of any 
household.
    (r) Denial of Food Stamps for Deceased Individuals.--Each 
State agency shall--
          (1) enter into a cooperative arrangement with the 
        Commissioner of Social Security, pursuant to the 
        authority of the Commissioner under section 205(r)(3) 
        of the Social Security Act (42 U.S.C. 405(r)(3)), to 
        obtain information on individuals who are deceased; and
          (2) use the information to verify and otherwise 
        ensure that benefits are not issued to individuals who 
        are deceased.
    (s) Transitional Benefits Option.--
          (1) In general.--A State agency may provide 
        transitional food stamp benefits to a household that 
        ceases to receive cash assistance under a State program 
        funded under part A of title IV of the Social Security 
        Act (42 U.S.C. 601 et seq.).
          (2) Transitional benefits period.--Under paragraph 
        (1), a household may continue to receive food stamp 
        benefits for a period of not more than 6 months after 
        the date on which cash assistance is terminated.
          (3) Amount of benefits.--During the transitional 
        benefits period under paragraph (2), a household shall 
        receive an amount of food stamp benefits equal to the 
        allotment received in the month immediately preceding 
        the date on which cash assistance was terminated, 
        adjusted for--
                  (A) the change in household income as a 
                result of the termination of cash assistance; 
                and
                  (B) any changes in circumstances that may 
                result in an increase in the food stamp 
                allotment of the household and that the 
                household elects to report.
          (4) Determination of future eligibility.--In the 
        final month of the transitional benefits period under 
        paragraph (2), the State agency may--
                  (A) require the household to cooperate in a 
                redetermination of eligibility; and
                  (B) initiate a new eligibility review period 
                for the household without regard to whether the 
                preceding eligibility review period has 
                expired.
          (5) Limitation.--A household shall not be eligible 
        for transitional benefits under this subsection if the 
        household--
                  (A) loses eligibility under section 6;
                  (B) is sanctioned for a failure to perform an 
                action required by Federal, State, or local law 
                relating to a cash assistance program described 
                in paragraph (1); or
                  (C) is a member of any other category of 
                households designated by the State agency as 
                ineligible for transitional benefits.

 CIVIL MONEY PENALTIES AND DISQUALIFICATION OF RETAIL FOOD STORES AND 
                        WHOLESALE FOOD CONCERNS

           *       *       *       *       *       *       *


                   ADMINISTRATIVE AND JUDICIAL REVIEW

    Sec. 14. (a)(1) Whenever an application of a retail food 
store or wholesale food concern to participate in the food 
stamp program is denied pursuant to section 9 of this Act, or a 
retail food store or wholesale food concern is disqualified or 
subjected to a civil money penalty under the provisions of 
section 12 of this Act, or a retail food store or wholesale 
food concern forfeits a bond under section 12(d) of this Act, 
or all or part of any claim of a retail food store or wholesale 
food concern is denied under the provisions of section 13 of 
this Act, or a claim against a State agency is stated pursuant 
to the provisions of section 13 of this Act, notice of such 
administrative action shall be issued to the retail food store, 
wholesale food concern, or State agency involved.
    [(2) Such notice shall be delivered by certified mail or 
personal service.]
    (2) Delivery of notices._A notice under paragraph (1) shall 
be delivered by any form of delivery that the Secretary 
determines will provide evidence of the delivery.
    (3) If such store, concern, or State agency is aggrieved by 
such action, it may, in accordance with regulations promulgated 
under this Act, within ten days of the date of delivery of such 
notice, file a written request for an opportunity to submit 
information in support of its position to such person or 
persons as the regulations may designate.

           *       *       *       *       *       *       *

    Sec. 16. (a) Subject to subsection (k), the Secretary is 
authorized to pay to each State agency an amount equal to 50 
per centum of all administrative costs involved in each State 
agency's operation of the food stamp program, which costs shall 
include, but not be limited to, the cost of (1) the 
certification of applicant households, (2) the acceptance, 
storage, protection, control, and accounting of coupons after 
their delivery to receiving points within the State, (3) the 
issuance of coupons to all eligible households, (4) food stamp 
informational activities, including those undertaken under 
section 11(e)(1)(A), but not including recruitment activities, 
(5) fair hearings, (6) automated data processing and 
information retrieval systems subject to the conditions set 
forth in subsection (g), (7) food stamp program investigations 
and prosecutions, and (8) implementing and operating the 
immigration status verification system established under 
section 1137(d) of the Social Security Act (42 U.S.C. 
1320b097(d)): Provided, That the Secretary is authorized at the 
Secretary's discretion to pay any State agency administering 
the food stamp program on all or part of an Indian reservation 
under section 11(d) of this Act or in a Native village within 
the State of Alaska identified in section 11(b) of Public Law 
9209203, as amended. Such amounts for administrative costs as 
the Secretary determines to be necessary for effective 
operation of the food stamp program, as well as to permit each 
State to retain 35 percent of the value of all funds or 
allotments recovered or collected pursuant to sections 6(b) and 
13(c) and 20 percent of the value of any other funds or 
allotments recovered or collected, except the value of funds or 
allotments recovered or collected that arise from an error of a 
State agency. The officials responsible for making 
determinations of ineligibility under this Act shall not 
receive or benefit from revenues retained by the State under 
the provisions of this subsection.

           *       *       *       *       *       *       *

    (c)(1) The program authorized under this Act shall include 
a system that [enhances payment accuracy by establishing fiscal 
incentives that require State agencies with high error rates to 
share in the cost of payment error and provide enhanced 
administrative funding to States with the lowest error rates. 
Under such system--]
          [(A) the Secretary] enhances payment accuracy and 
        that has the following elements:
          (A) Enhanced administrative funding._With respect to 
        fiscal year 2001, the Secretary shall adjust a State 
        agency's federally funded share of administrative costs 
        pursuant to subsection (a), other than the costs 
        already shared in excess of 50 percent under the 
        proviso in the first sentence of subsection (a) or 
        under subsection (g), by increasing such share of all 
        such administrative costs by [one percentage point to a 
        maximum of 60] 1/2 of 1 percentage point to a maximum 
        of 55 percent of all such administrative costs for each 
        full one-tenth of a percentage point by which the 
        payment error rate is less than 6 percent, except that 
        only States whose rate of invalid decisions in denying 
        eligibility is less than a nationwide percentage that 
        the Secretary determines to be reasonable shall be 
        entitled to the adjustment prescribed in this 
        subsection;.
          [(B) the Secretary shall foster management 
        improvements by the States by requiring State agencies 
        other than those receiving adjustments under 
        subparagraph (A) to develop and implement corrective 
        action plans to reduce payment errors; and]
          (B) Investigation and initial sanctions._
                  (i) Investigation.--Except as provided under 
                subparagraph (C), for any fiscal year in which 
                the Secretary determines that a 95 percent 
                statistical probability exists that the payment 
                error rate of a State agency exceeds the 
                national performance measure for payment error 
                rates announced under paragraph (6) by more 
                than 1 percentage point, other than for good 
                cause shown, the Secretary shall investigate 
                the administration by the State agency of the 
                food stamp program unless the Secretary 
                determines that sufficient information is 
                already available to review the administration 
                by the State agency.
                  (ii) Initial sanctions.--If an investigation 
                under clause (i) results in a determination 
                that the State agency has been seriously 
                negligent (as determined under standards 
                promulgated by the Secretary), the State agency 
                shall pay the Secretary an amount that reflects 
                the extent of such negligence (as determined 
                under standards promulgated by the Secretary), 
                not to exceed 5 percent of the amount provided 
                to the State agency under subsection (a) for 
                the fiscal year.
          (C) Additional sanctions.--If, for any fiscal year, 
        the Secretary determines that a 95 percent statistical 
        probability exists that the payment error rate of a 
        State agency exceeds the national performance measure 
        for payment error rates announced under paragraph (6) 
        by more than 1 percentage point, other than for good 
        cause shown, and that the State agency was sanctioned 
        under this paragraph or was the subject of an 
        investigation or review under subparagraph (B)(i) for 
        each of the 2 immediately preceding fiscal years, the 
        State agency shall pay to the Secretary an amount equal 
        to the product obtained by multiplying--
                  (i) the value of all allotments issued by the 
                State agency in the fiscal year;
                  (ii) the lesser of--
                          (I) the ratio that--
                                  (aa) the amount by which the 
                                payment error rate of the State 
                                agency for the fiscal year 
                                exceeds by more than 1 
                                percentage point the national 
                                performance measure for the 
                                fiscal year; bears to
                                  (bb) 10 percent; or
                          (II) 1; and
                  (iii) the amount by which the payment error 
                rate of the State agency for the fiscal year 
                exceeds by more than 1 percentage point the 
                national performance measure for the fiscal 
                year.
          (D) Corrective action plans.--The Secretary shall 
        foster management improvements by the States by 
        requiring State agencies to develop and implement 
        corrective action plans to reduce payment errors.
          [(C) for any fiscal year in which a State agency's 
        payment error rate exceeds the national performance 
        measure for payment error rates announced under 
        paragraph (6), other than for good cause shown, the 
        State agency shall pay to the Secretary an amount equal 
        to--
                  [(i) the product of--
                          [(I) the value of all allotments 
                        issued by the State agency in the 
                        fiscal year; times
                          [(II) the lesser of--
                                  [(aa) the ratio of--
                                        [(aaa) the amount by 
                                        which the payment error 
                                        rate of the State 
                                        agency for the fiscal 
                                        year exceeds the 
                                        national performance 
                                        measure for the fiscal 
                                        year; to
                                          [(bbb) the national 
                                        performance measure for 
                                        the fiscal year, or
                                  [(bb) 1; times
                          [(III) the amount by which the 
                        payment error rate of the State agency 
                        for the fiscal year exceeds the 
                        national performance measure for the 
                        fiscal year. The amount of liability 
                        shall not be affected by corrective 
                        action under subparagraph (B).]
    (2) As used in this section--
          (A) the term ``payment error rate'' means the sum of 
        the point estimates of an overpayment error rate and an 
        underpayment error rate determined by the Secretary 
        from data collected in a probability sample of 
        participating households, as adjusted downward as 
        appropriate under paragraph (10);
          (B) the term ``overpayment error rate'' means the 
        percentage of the value of all allotments issued in a 
        fiscal year by a State agency that are either--

           *       *       *       *       *       *       *

          (B) Errors resulting from the use by a State agency 
        of correctly processed information concerning 
        households or individuals received from Federal 
        agencies or from actions based on policy information 
        approved or disseminated, in writing, by the Secretary 
        or the Secretary's designee.
    [(4) The Secretary may require a State agency to report any 
factors that the Secretary considers necessary to determine a 
State agency's payment error rate, enhanced administrative 
funding, or claim for payment error, under this subsection.]
    (4) Reporting requirements.--The Secretary may require a 
State agency to report any factors that the Secretary considers 
necessary to determine a State agency's payment error rate, 
enhanced administrative funding, claim for payment error under 
paragraph (1), or performance under the performance measures 
under paragraph (11). If a State agency fails to meet the 
reporting requirements established by the Secretary, the 
Secretary shall base the determination on all pertinent 
information available to the Secretary.
    [(5) To facilitate the implementation of this subsection 
each State agency shall submit to the Secretary expeditiously 
data regarding its operations in each fiscal year sufficient 
for the Secretary to establish the payment error rate for the 
State agency for such fiscal year and determine the amount of 
either incentive payments under paragraph (1)(A) or claims 
underparagraph (1)(C). The Secretary shall make a determination 
for a fiscal year, and notify the State agency of such determination, 
within nine months following the end of each fiscal year.]
    (5) Procedures.--To facilitate the implementation of this 
subsection, each State agency shall expeditiously submit to the 
Secretary data concerning the operations of the State agency in 
each fiscal year sufficient for the Secretary to establish the 
payment error rate for the State agency for the fiscal year, to 
comply with paragraph (10), and to determine the amount of 
enhanced administrative funding under paragraph (1)(A), high 
performance bonus payments under paragraph (11), or claims 
under subparagraph (B) or (C) of paragraph (1). The Secretary 
shall initiate efforts to collect the amount owed by the State 
agency as a claim established under paragraph (1)(C) for a 
fiscal year, subject to the conclusion of any formal or 
informal appeal procedure and administrative or judicial review 
under section 14 (as provided for in paragraph (7)), before the 
end of the fiscal year following such fiscal year.
    (6) At the time the Secretary makes the notification to 
State agencies of their error rates and incentive payments or 
claims pursuant to paragraphs (1)(A) and (1)(C), the Secretary 
shall also announce a national performance measure that shall 
be the sum of the products of each State agency's error rate as 
developed for the notifications under paragraph (8) (but 
determined without regard to paragraph (10)) times that State 
agency's proportion of the total value of national allotments 
issued for the fiscal year using the most recent issuance data 
available at the time of the notifications issued pursuant to 
paragraph (8). Where a State fails to meet reporting 
requirements pursuant to paragraph (4), the Secretary may use 
another measure of a State's error developed pursuant to 
paragraph (8), to develop the national performance measure. The 
announced national performance measure shall be used in 
determining the State share of the cost of payment error under 
paragraph (1)(C) for the fiscal year whose error rates are 
being announced under paragraph (8).
    (7) If the Secretary asserts a financial claim against a 
State agency under paragraph (1)(C), the State may seek 
administrative and judicial review of the action pursuant to 
section 14.
    (8)(A) This paragraph applies to the determination of 
whether a payment is due by a State agency for a fiscal year 
under paragraph (1)(C).
    (B) Not later than [180 days after the end of the fiscal 
year] the first May 31 after the end of the fiscal year 
referred to in subparagraph (A), the case review and all 
arbitrations of State-Federal difference cases shall be 
completed.
    (C) Not later than [30 days thereafter] the first June 30 
after the end of the fiscal year referred to in subparagraph 
(A), the Secretary shall--

           *       *       *       *       *       *       *

    (E) a significant circumstance beyond the control of the 
State agency.
    (10) Adjustments of payment error rate.--
          (A) Fiscal year 2002.--
                  (i) Adjustment for higher percentage of 
                households with earned income.--Subject to 
                subparagraph (E), with respect to fiscal year 
                2002, in applying paragraph (1), the Secretary 
                shall adjust the payment error rate determined 
                under paragraph (2)(A) as necessary to take 
                into account any increases in errors that 
                result from the State agency's serving a higher 
                percentage of households with earned income 
                than the lesser of--
                          (I) the percentage of households with 
                        earned income that receive food stamps 
                        in all States; or
                          (II) the percentage of households 
                        with earned income that received food 
                        stamps in the State in fiscal year 
                        1992.
                  (ii) Adjustment for higher percentage of 
                households with non-citizen members.--Subject 
                to subparagraph (B), with respect to fiscal 
                year 2002, in applying paragraph (1), the 
                Secretary shall adjust the payment error rate 
                determined under paragraph (2)(A) as necessary 
                to take into account any increases in errors 
                that result from the State agency's serving a 
                higher percentage of households with 1 or more 
                members who are not United States citizens than 
                the lesser of--
                          (I) the percentage of households with 
                        1 or more members who are not United 
                        States citizens that receive food 
                        stamps in all States: or
                          (II) the percentage of households 
                        with 1 or more members who are not 
                        United States citizens that received 
                        food stamps in the State in fiscal year 
                        1998.
          (B) Expanded applicability to state agencies subject 
        to sanctions.--In the case of a State agency subject to 
        sanctions for fiscal year 2001 or any fiscal year 
        thereafter under paragraph (1), the adjustments 
        described in subparagraph (A) shall apply to the State 
        agency for the fiscal year.
          (C) Additional adjustments.--For fiscal year 2003 and 
        each fiscal year thereafter, the Secretary may make 
        such additional adjustments to the payment error rate 
        determined under paragraph (2)(A) as the Secretary 
        determines to be consistent with achieving the purposes 
        of this Act.
    (11) High performance bonus payments.--
          (A) In general.--The Secretary shall--
                  (i) with respect to fiscal year 2002 and each 
                fiscal year thereafter, measure the performance 
                of each State agency with respect to each of 
                the performance measures specified in 
                subparagraph (B); and
                  (ii) in fiscal year 2003 and each fiscal year 
                thereafter, subject to subparagraphs (C) 
                and (D), make high performance bonus payments 
                to the State agencies with the highest or most 
                improved performance with respect to those 
                performance measures.
          (B) Performance measures.--The performance measures 
        specified in this subparagraph are--
                  (i) the ratio, expressed as a percentage, 
                that--
                          (I) the number of households in the 
                        State that--
                                  (aa) receive food stamps;
                                  (bb) have incomes less than 
                                130 percent of the poverty line 
                                (as defined in section 673 of 
                                the Community Services Block 
                                Grant Act (42 U.S.C. 9902));
                                  (cc) have annual earnings 
                                equal to at least 1000 times 
                                the Federal minimum hourly rate 
                                under the Fair Labor Standards 
                                Act of 1938 (29 U.S.C. 201 et 
                                seq.); and
                                  (dd) have children under age 
                                18; bears to
                          (II) the number of households in the 
                        State that meet the criteria specified 
                        in items (bb) through (dd) of subclause 
                        (I); and
                  (ii) 4 additional performance measures, 
                established by the Secretary in consultation 
                with the National Governors Association, the 
                American Public Human Services Association, and 
                the National Conference of State Legislatures 
                not later than 180 days after the date of 
                enactment of this paragraph, of which not less 
                than 1 performance measure shall relate to 
                provision of timely and appropriate services to 
                applicants for and recipients of food stamp 
                benefits.
          (C) High performance bonus payments.--
                  (i) Definition of caseload.--In this 
                subparagraph, the term ``caseload'' has the 
                meaning given the term in section 6(o)(6)(A).
                  (ii) Amount of payments.--
                          (I) In general.--In fiscal year 2003 
                        and each fiscal year thereafter, the 
                        Secretary shall--
                                  (aa) make 1 high performance 
                                bonus payment of $6,000,000 for 
                                each of the 5 performance 
                                measures under subparagraph 
                                (B); and
                                  (bb) allocate the high 
                                performance bonus payment with 
                                respect to each performance 
                                measure in accordance with 
                                subclauses (II) and (III).
                          (II) Payment for performance 
                        measures.--In fiscal year 2003 and each 
                        fiscal year thereafter, the Secretary 
                        shall allocate, in accordance with 
                        subclause (III), the high performance 
                        bonus payment made for each performance 
                        measure under subparagraph (B) among 
                        the 6 State agencies with, as 
                        determined by the Secretary by 
                        regulation--
                                  (aa) the greatest improvement 
                                in the level of performance 
                                with respect to the performance 
                                measure between the 2 most 
                                recent years for which the 
                                Secretary determines that 
                                reliable data are available; or
                                  (bb) the highest performance 
                                in the performance measure for 
                                the most recent year for which 
                                the Secretary determines that 
                                reliable data are available; or
                                  (cc) a combination of the 
                                greatest improvement described 
                                in item (aa) and the highest 
                                performance described in item 
                                (bb).
                          (III) Allocation among state agencies 
                        eligible for payments.--A high 
                        performance bonus payment under 
                        subclause (II) or made for a 
                        performance measure shall be allocated 
                        among the State agencies eligible for 
                        the payment in the ratio that--
                                  (aa) the caseload of each of 
                                the 6 State agencies eligible 
                                for the payment; bears to
                                  (bb) the caseloads of the 6 
                                State agencies eligible for the 
                                payment.
          (D) Prohibition on receipt of high performance bonus 
        payments by state agencies subject to sanctions.--If, 
        for any fiscal year, a State agency is subject to a 
        sanction under paragraph (1), the State agency shall 
        not be eligible for a high performance bonus payment 
        for the fiscal year.
          (E) Payments not subject to judicial review.--A 
        determination by the Secretary whether, and in what 
        amount, to make a high performance bonus payment under 
        this paragraph shall not be subject to judicial review.
    (d) The Secretary shall undertake the following studies of 
the payment error improvement system established under 
subsection (c):

           *       *       *       *       *       *       *

          (1) In general.--
                  (A) Amounts.--To carry out employment and 
                training programs, the Secretary shall reserve 
                for allocation to State agencies[, to remain 
                available until expended,] from funds made 
                available for each fiscal year under section 
                18(a)(1) the amount of--
                          (i) for fiscal year 1996, 
                        $75,000,000;
                          (ii) for fiscal year 1997, 
                        $79,000,000;
                          (iii) for fiscal year 1998--
                                  (I) $81,000,000; and
                                  (II) an additional amount of 
                                $131,000,000;
                          (iv) for fiscal year 1999--
                                  (I) $84,000,000; and
                                  (II) an additional amount of 
                                $31,000,000;
                          (v) for fiscal year 2000--
                                  (I) $86,000,000; and
                                  (II) an additional amount of 
                                $86,000,000;
                          (vi) for fiscal year 2001--
                                  (I) $88,000,000; and
                                  (II) an additional amount of 
                                $131,000,000; and
                          [(vii) for fiscal year 2002--]
                          (vii) for each of fiscal years 2002 
                        through 2006, $90,000,000, to remain 
                        available until expended.
                                  [(I) $90,000,000; and
                                  [(II) an additional amount of 
                                $75,000,000.
                  [(B) Allocation.--
                          [(i) Allocation formula.--The 
                        Secretary shall allocate the amounts 
                        reserved under subparagraph (A) among 
                        the State agencies using a reasonable 
                        formula, as determined and adjusted by 
                        the Secretary each fiscal year, to 
                        reflect--
                                  [(I) changes in each State's 
                                caseload (as defined in section 
                                6(o)(6)(A));
                                  [(II) for fiscal year 1998, 
                                the portion of food stamp 
                                recipients who reside in each 
                                State who are not eligible for 
                                an exception under section 
                                6(o)(3); and
                                  [(III) for each of fiscal 
                                years 1999 through 2002, the 
                                portion of food stamp 
                                recipients who reside in each 
                                State who are not eligible for 
                                an exception under section 
                                6(o)(3) and who--
                                          [(aa) do not reside 
                                        in an area subject to a 
                                        waiver granted by the 
                                        Secretary under section 
                                        6(o)(4); or
                                          [(bb) do reside in an 
                                        area subject to a 
                                        waiver granted by the 
                                        Secretary under section 
                                        6(o)(4), if the State 
                                        agency provides 
                                        employment and training 
                                        services in the area to 
                                        food stamp recipients 
                                        who are not eligible 
                                        for an exception under 
                                        section 6(o)(3).
                          [(ii) Estimated factors.--The 
                        Secretary shall estimate the portion of 
                        food stamp recipients who reside in 
                        each State who are not eligible for an 
                        exception under section 6(o)(3) based 
                        on the survey conducted to carry out 
                        subsection (c) for fiscal year 1996 and 
                        such other factors as the Secretary 
                        considers appropriate due to the timing 
                        and limitations of the survey.
                          [(iii) Reporting requirement.--A 
                        State agency shall submit such reports 
                        to the Secretary as the Secretary 
                        determines are necessary to ensure 
                        compliance with this paragraph.]
                  (B) Allocation.--Funds made available under 
                subparagraph (A) shall be made available to and 
                reallocated among State agencies under a 
                reasonable formula that--
                          ``(i) is determined and adjusted by 
                        the Secretary; and
                          ``(ii) takes into account the number 
                        of individuals who are not exempt from 
                        the work requirement under section 
                        6(o).
                  (C) Reallocation.--If a State agency will not 
                expend all of the funds allocated to the State 
                agency for a fiscal year under subparagraph 
                (B), the Secretary shall reallocate the 
                unexpended funds to other States (during the 
                fiscal year or the subsequent fiscal year) as 
                the Secretary considers appropriate and 
                equitable.
                  (D) Minimum allocation.--Notwithstanding 
                subparagraph (B), the Secretary shall ensure 
                that each State agency operating an employment 
                and training program shall receive not less 
                than $50,000 for each fiscal year.
                  [(E) Use of funds.--Of the amount of funds a 
                State agency receives under subparagraphs (A) 
                through (D) for a fiscal year, not less than 80 
                percent of the funds shall be used by the 
                State agency during the fiscal year to serve food 
                stamp recipients who--
                          [(i) are not eligible for an 
                        exception under section 6(o)(3); and
                          [(ii) are placed in and comply with a 
                        program described in subparagraph (B) 
                        or (C) of section 6(o)(2).
                  [(F) Maintenance of effort.--To receive an 
                allocation of an additional amount made 
                available under subclause (II) of each of 
                clauses (iii) through (vii) of subparagraph 
                (A), a State agency shall maintain the 
                expenditures of the State agency for employment 
                and training programs and workfare programs for 
                any fiscal year under paragraph (2), and 
                administrative expenses described in section 
                20(g)(1), at a level that is not less than the 
                level of the expenditures by the State agency 
                to carry out the programs and such expenses for 
                fiscal year 1996.
                  [(G) Component costs.--The Secretary shall 
                monitor State agencies' expenditure of funds 
                for employment and training programs provided 
                under this paragraph, including the costs of 
                individual components of State agencies' 
                programs. The Secretary may determine the 
                reimbursable costs of employment and training 
                components, and, if the Secretary makes such a 
                determination, the Secretary shall determine 
                that the amounts spent or planned to be spent 
                on the components reflect the reasonable cost 
                of efficiently and economically providing 
                components appropriate to recipient employment 
                and training needs, taking into account, as the 
                Secretary deems appropriate, prior expenditures 
                on the components, the variability of costs 
                among State agencies' components, the 
                characteristics of the recipients to be served, 
                and such other factors as the Secretary 
                considers necessary.]
                  (E) Additional allocations for states that 
                ensure availability of work opportunities.--
                          (i) In general.--In addition to the 
                        allocations under subparagraph (A), 
                        from funds made available under section 
                        18(a)(1), the Secretary shall allocate 
                        not more than $25,000,000 for each of 
                        fiscal years 2002 through 2006 to 
                        reimburse a State agency that is 
                        eligible under clause (ii) for the 
                        additional costs incurred in serving 
                        food stamp recipients who--
                                  (I) are not eligible for an 
                                exception under section 
                                6(o)(3); and
                                  (II) are placed in and comply 
                                with a program described in 
                                subparagraph (B) or (C) of 
                                section 6(o)(2).
                          (ii) Eligibility.--To be eligible for 
                        an additional allocation under clause 
                        (i), a State agency shall--
                                  (I) exhaust the allocation to 
                                the State agency under 
                                subparagraph (A) (including any 
                                reallocation that has been made 
                                available under subparagraph 
                                (C)); and
                                  (II) make and comply with a 
                                commitment to offer a position 
                                in a program described in 
                                subparagraph (B) or (C) of 
                                section 6(o)(2) to each 
                                applicant or recipient who--
                                          (aa) is in the last 
                                        month of the 6-month 
                                        period described in 
                                        section 6(o)(2);
                                          (bb) is not eligible 
                                        for an exception under 
                                        section 6(o)(3);
                                          (cc) is not eligible 
                                        for a waiver under 
                                        section 6(o)(4); and
                                          (dd) is not eligible 
                                        for an exemption under 
                                        section 6(o)(6).
          (3) Reduction in payment.--
                  (A) In general.--Notwithstanding any other 
                provision of this section, effective for each 
                of fiscal years 1999 through [2002] 2006, the 
                Secretary shall reduce, for each fiscal year, 
                the amount paid under subsection (a) to each 
                State by an amount equal to the amount 
                determined for the food stamp program under 
                paragraph (2)(B). The Secretary shall, to the 
                extent practicable, make the reductions 
                required by this paragraph on a quarterly 
                basis.
                  (B) Application.--If the Secretary of Health 
                and Human Services does not make the 
                determinations required by paragraph (2) by 
                September 30, 1999--
                          (i) during the fiscal year in which 
                        the determinations are made, the 
                        Secretary shall reduce the amount paid 
                        under subsection (a) to each State by 
                        an amount equal to the sum of the 
                        amounts determined for the food stamp 
                        program under paragraph (2)(B) for 
                        fiscal year 1999 through the fiscal 
                        year during which the determinations 
                        are made; and
                          (ii) for each subsequent fiscal year 
                        through fiscal year [2002] 2006, 
                        subparagraph (A) applies.
          (4) Appeal of determinations.--

           *       *       *       *       *       *       *

                          (ii) Review.--The Board shall review 
                        the decision on the record.
                          (iii) Deadline.--Not later than 60 
                        days after the date on which the appeal 
                        is filed, the Board shall--
                                  (I) make a final decision 
                                with respect to an appeal filed 
                                under clause (i); and
                                  (II) notify the chief 
                                executive officer of the State 
                                of the decision.
                  (D) Judicial review.--The determinations of 
                the Secretary of Health and Human Services 
                under paragraph (2), and a final decision of 
                the administrative law judge or Board under 
                subparagraphs (B) and (C), respectively, shall 
                not be subject to judicial review.
                  (E) Reduced payments pending appeal.--The 
                pendency of an appeal under this paragraph 
                shall not affect the requirement that the 
                Secretary reduce payments in accordance with 
                paragraph (3).
          (5) Allocation of administrative costs.--
                  (A) In general.--[No funds] Except as 
                provided in subparagraph (C), no funds or 
                expenditures described in subparagraph (B) may 
                be used to pay for costs--

           *       *       *       *       *       *       *

                  (B) Funds and expenditures.--Subparagraph (A) 
                applies to--
                          (i) funds made available to carry out 
                        part A of title IV, or title XX, of the 
                        Social Security Act (42 U.S.C. 601 et 
                        seq., 1397 et seq.);
                          (ii) expenditures made as qualified 
                        State expenditures (as defined in 
                        section 409(a)(7)(B) of that Act (42 
                        U.S.C. 609(a)(7)(B)));
                          (iii) any other Federal funds (except 
                        funds provided under subsection (a)); 
                        and
                          (iv) any other State funds that are--
                                  (I) expended as a condition 
                                of receiving Federal funds; or
                                  (II) used to match Federal 
                                funds under a Federal program 
                                other than the food stamp 
                                program.
                  (C) Food stamp informational activities.--
                Subparagraph (A) shall not apply to any funds 
                or expenditures described in clause (i) or (ii) 
                of subparagraph (B) used to pay the costs of 
                any activity that is eligible for reimbursement 
                under subsection (a)(4).

                research, demonstration, and evaluations

    Sec. 17. (a)(1) The Secretary may[, by way of making make 
contracts with or grants to public or private organizations or 
agencies,] enter into contracts with or make grants to public 
or private organizations or agencies under this section to 
undertake research that will help improve the administration 
and effectiveness of the food stamp program in delivering 
nutrition-related benefits. The waiver authority of the 
Secretary under subsection (b) shall extend to all contracts 
and grants under this section.

           *       *       *       *       *       *       *

                          (iii) Restrictions on permissible 
                        projects.--If the Secretary finds that 
                        a project under subparagraph (A) would 
                        reduce benefits by more than 20 percent 
                        for more than 5 percent of households 
                        in the area subject to the project (not 
                        including any household whose benefits 
                        are reduced due to a failure to comply 
                        with work or other conduct 
                        requirements), the project--
                                  (I) may not include more than 
                                15 percent of the State's food 
                                stamp households; and
                                  (II) shall continue for not 
                                more than 5 years after the 
                                date of implementation, unless 
                                the Secretary approves an 
                                extension requested by the 
                                State agency at any time.
                          (iv) Impermissible projects.--The 
                        Secretary may not conduct a project 
                        under subparagraph (A) that--
                                  (I) involves the payment of 
                                the value of an allotment in 
                                the form of cash, unless the 
                                project was approved prior to 
                                the date of enactment of this 
                                subparagraph [August 22, 1996];
                                  (II) has the effect of 
                                substantially transferring 
                                funds made available under this 
                                Act to services or benefits 
                                provided primarily through 
                                another public assistance 
                                program, or using the funds for 
                                any purpose other than the 
                                purchase of food, program 
                                administration, or an 
                                employment or training program;
                                  (III) is inconsistent with--
                                          (aa) [the last 2 
                                        sentences of section 
                                        3(i)] paragraphs (4) 
                                        and (5) of section 
                                        3(i);

           *       *       *       *       *       *       *

    (g) In order to assess the effectiveness of the employment 
and training programs established under section 6(d) in placing 
individuals into the work force and withdrawing such 
individuals from the food stamp program, the Secretary is 
authorized to carry out studies comparing the pre- and post-
program labor force participation, wage rates, family income, 
level of receipt of food stamp and other transfer payments, and 
other relevant information, for samples of participants in such 
employment and training programs as compared to the appropriate 
control or comparison groups that did not participate in such 
programs. Such studies shall, to the maximum extent possible--
          (1) collect such data for up to 3 years after the 
        individual has completed the employment and training 
        program; and
          (2) yield results that can be generalized to the 
        national program as a whole.
    The results of such studies and reports shall be considered 
in developing or updating the performance standards required 
under section 6.
    [(h) The Secretary shall conduct a sufficient number of 
demonstration projects to evaluate the effects, in both rural 
and urban areas, of including in financial resources under 
section 5(g) the fair market value of licensed vehicles to the 
extent the value of each vehicle exceeds $4,500, but excluding 
the value of--
          [(1) any licensed vehicle that is used to produce 
        earned income, necessary for transportation of an 
        elderly or physically disabled household member, or 
        used as the household's home; and
          [(2) one licensed vehicle used to obtain, continue, 
        or seek employment (including travel to and from work), 
        used to pursue employment-related education or 
        training, or used to secure food or the benefits of the 
        food stamp program.]
    (h) Access and Outreach Pilot Projects._
          (1) In general.--The Secretary shall make grants to 
        State agencies and other entities to pay the Federal 
        share of the eligible costs of projects to improve--
                  (A) access by eligible individuals to 
                benefits under the food stamp program; or
                  (B) outreach to individuals eligible for 
                those benefits.
          (2) Federal share.--The Federal share shall be 75 
        percent.
          (3) Types of projects.--To be eligible for a grant 
        under this subsection, a project may consist of--
                  (A) establishing a single site at which 
                individuals may apply for--
                          (i) benefits under the food stamp 
                        program; and
                                  (I) supplemental security 
                                income benefits under title XVI 
                                of the Social Security Act (42 
                                U.S.C. 1381 et seq.);
                                  (II) benefits under the 
                                medicaid program under title 
                                XIX of the Social Security Act 
                                (42 U.S.C. 1396 et seq.);
                                  (III) benefits under the 
                                State children's health 
                                insurance program under title 
                                XXI of the Social Security Act 
                                (42 U.S.C. 1397aa et seq.);
                                  (IV) benefits under the 
                                special supplemental nutrition 
                                program for women, infants, and 
                                children under section 17 of 
                                the Child Nutrition Act of 1966 
                                (42 U.S.C. 1786); and
                                  (V) benefits under such other 
                                programs as the Secretary 
                                determines to be appropriate;
                  (B) developing forms that allow an individual 
                to apply for more than 1 of the programs 
                referred to in subparagraph (A);
                  (C) dispatching State agency personnel to 
                conduct outreach and enroll individuals in the 
                food stamp program and other programs in 
                nontraditional venues (such as shopping malls, 
                schools, community centers, county fairs, 
                clinics, food banks, and job training centers);
                  (D) developing systems to enable increased 
                participation in the provision of benefits 
                under the food stamp program through farmers' 
                markets, roadside stands, and other community-
                supported agriculture programs, including 
                wireless electronic benefit transfer systems 
                and other systems appropriate to open-air 
                settings where farmers and other vendors sell 
                directly to consumers;
                  (E) allowing individuals to submit 
                applications for the food stamp program by 
                means of the telephone or the Internet, in 
                particular individuals who live in rural areas, 
                elderly individuals, and individuals with 
                disabilities;
                  (F) encouraging consumption of fruit and 
                vegetables by developing a cost-effective 
                system for providing discounts for purchases of 
                fruit and vegetables made through use of 
                electronic benefit transfer cards;
                  (G) reducing barriers to participation by 
                individuals, with emphasis on working families, 
                eligible immigrants, elderly individuals, and 
                individuals with disabilities;
                  (H) developing training materials, 
                guidebooks, and other resources to improve 
                access and outreach;
                  (I) conforming verification practices under 
                the food stamp program with verification 
                practices under other assistance programs; and
                  (J) such other activities as the Secretary 
                determines to be appropriate.
          (4) Selection.--
                  (A) In general.--The Secretary shall develop 
                criteria for selecting recipients of grants 
                under this subsection that include the 
                consideration of--
                          (i) the demonstrated record of a 
                        State agency or other entity in serving 
                        low-income individuals;
                          (ii) the ability of a State agency or 
                        other entity to reach hard-to-serve 
                        populations;
                          (iii) the level of innovative 
                        proposals in the application of a State 
                        agency or other entity for a grant; and
                          (iv) the development of partnerships 
                        between public and private sector 
                        entities and linkages with the 
                        community.
                  (B) Preference.--In selecting recipients of 
                grants under paragraph (1), the Secretary shall 
                provide a preference to any applicant that 
                consists of a partnership between a State and a 
                private entity, such as--
                          (i) a food bank;
                          (ii) a community-based organization;
                          (iii) a public school;
                          (iv) a publicly-funded health clinic;
                          (v) a publicly-funded day care 
                        center; and
                          (vi) a nonprofit health or welfare 
                        agency.
                  (C) Geographical distribution of 
                recipients.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary shall select, from 
                        all eligible applications received, at 
                        least 1 recipient to receive a grant 
                        under this subsection from--
                                  (I) each region of the 
                                Department of Agriculture 
                                administering the food stamp 
                                program; and
                                  (II) each additional rural or 
                                urban area that the Secretary 
                                determines to be appropriate.
                          (ii) Exception.--The Secretary shall 
                        not be required to select grant 
                        recipients under clause (i) to the 
                        extent that the Secretary determines 
                        that an insufficient number of eligible 
                        grant applications has been received.
          (5) Project evaluations.--
                  (A) In general.--The Secretary shall conduct 
                evaluations of projects funded by grants under 
                this subsection.
                  (B) Limitation.--Not more than 10 percent of 
                funds made available to carry out this 
                subsection shall be used for project 
                evaluations described in subparagraph (A).
          (6) Maintenance of effort.--A State agency or other 
        entity shall provide assurances to the Secretary that 
        funds provided to the State agency or other entity 
        under this subsection will be used only to supplement, 
        not to supplant, the amount of Federal, State, and 
        local funds otherwise expended to carry out access and 
        outreach activities in the State under this Act.
          (7) Funding.--There is authorized to be appropriated 
        to carry out this subsection $3,000,000 for the period 
        of fiscal years 2003 through 2005.
    (i)(1)(A) Subject to the availability of funds specifically 
appropriated to carry out this subsection and subject to the 
other provisions of this subsection, during each of fiscal 
years 1992 through [2002] 2006, the Secretary shall make grants 
competitively awarded to public or private nonprofit 
organizations to fund food stamp outreach demonstration 
projects (hereinafter in this subsection referred to as the 
``projects'') and related evaluations in areas of the United 
States to increase participation by eligible low-income 
households in the food stamp program. The total amount of 
grants provided during a fiscal year may not exceed $5,000,000. 
Funds appropriated to carry out this subsection shall be used 
in the year during which the funds are appropriated. Not more 
than 20 percent of the funds appropriated to carry out this 
subsection shall be used for evaluations.

           *       *       *       *       *       *       *


                    authorization for appropriations

    Sec. 18. (a)(1) To carry out this Act, there are authorized 
to be appropriated such sums as are necessary for each of the 
fiscal years 1996 through [2002] 2006. Not to exceed one-fourth 
of 1 per centum of the previous year's appropriation is 
authorized in each such fiscal year to carry out the provisions 
of section 17 of this Act, subject to paragraph (3).

           *       *       *       *       *       *       *


                              block grant

    Sec. 19. (a)(1)(A) From the sums appropriated under this 
Act, the Secretary shall, subject to the provisions of this 
section, pay to [the Commonwealth of Puerto Rico] governmental 
entities specified in subparagraph (D)--
          (i) for fiscal year 2000, $1,268,000,000;
          (ii) for fiscal year 2001, the amount required to be 
        paid under clause (i) for fiscal year 2000, as adjusted 
        by the change in the Food at Home series of the 
        Consumer Price Index for All Urban Consumers, published 
        by the Bureau of Labor Statistics of the Department of 
        Labor, for the most recent 12-month period ending in 
        June;[ and
          [(iii) for fiscal year 2002, the amount required to 
        be paid under clause (ii) for fiscal year 2001, as 
        adjusted by the percentage by which the thrifty food 
        plan is adjusted for fiscal year 2002 under section 
        3(o)(4);]
          (iii) for fiscal year 2002, $1,356,000,000; and
          (iv) for each of fiscal years 2003 through 2006, the 
        amount provided in clause (iii), as adjusted by the 
        percentage by which the thrifty food plan has been 
        adjusted under section 3(o)(4) between June 30, 2001, 
        and June 30 of the immediately preceding fiscal year;
to pay the expenditures for nutrition assistance programs for 
needy persons as described in subparagraphs (B) and (C).
[to finance 100 percent of the expenditures for food assistance 
provided to needy persons and 50 percent of the administrative 
expenses related to the provision of the assistance.]
    [(B) The] (B) Maximum payments to commonwealth of puerto 
rico._
          (i) In general.--The payments to the Commonwealth for 
        any fiscal year shall not exceed the expenditures by 
        that jurisdiction during that year for the provision of 
        the assistance the provision of which is included in 
        the plan of the Commonwealth approved under subsection 
        (b) and 50 per centum of the related administrative 
        expenses.
          (ii) Exception for expenditures for certain 
        systems.--Notwithstanding subparagraph (A) and clause 
        (i), the Commonwealth of Puerto Rico may spend not more 
        than $6,000,000 of the amount required to be paid to 
        the Commonwealth for fiscal year 2002 under 
        subparagraph (A) to pay 100 percent of the costs of--
                  (I) upgrading and modernizing the electronic 
                data processing system used to carry out 
                nutrition assistance programs for needy 
                persons; and
                  (II) implementing systems to simplify the 
                determination of eligibility to receive that 
                nutrition assistance; and
                  (III) operating systems to deliver benefits 
                through electronic benefit transfers.
    (C) American samoa.--For each fiscal year, the Secretary 
shall reserve 0.4 percent of the funds made available under 
subparagraph (A) for payment to American Samoa to pay 100 
percent of the expenditures for a nutrition assistance program 
extended under section 601(c) of Public Law 96-597 (48 U.S.C. 
1469d(c)).
    (D) Governmental entity.--A governmental entity specified 
in this subparagraph is--
          (i) the Commonwealth of Puerto Rico; and
          (ii) for fiscal year 2003 and each fiscal year 
        thereafter, American Samoa.

           *       *       *       *       *       *       *


SEC. 25. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

           *       *       *       *       *       *       *


    (b) Authority To Provide Assistance.--
          (1) In general.--From amounts made available to carry 
        out this Act, the Secretary may make grants to assist 
        eligible private nonprofit entities to establish and 
        carry out community food projects.
          (2) Limitation on grants.--The total amount of funds 
        provided as grants under this section may not exceed--
                  (A) $1,000,000 for fiscal year 1996; and
                  (B) $2,500,000 for each of fiscal years 1997 
                through [2002] 2006.
    (c) Eligible Entities.--To be eligible for a grant under 
subsection (b), a private nonprofit entity must--

           *       *       *       *       *       *       *

    (d) Preference for Certain Projects.--In selecting 
community food projects to receive assistance under subsection 
(b), the Secretary shall give a preference to projects designed 
to--
          (1) develop linkages between 2 or more sectors of the 
        food system;
          (2) support the development of entrepreneurial 
        projects;
          (3) develop innovative linkages between the for-
        profit and nonprofit food sectors; [or
          [(4) encourage long-term planning activities and 
        multi-system, interagency approaches.]
          (4) encourage long-term planning activities, and 
        multisystem, interagency approaches with 
        multistakeholder collaborations, that build the long-
        term capacity of communities to address the food and 
        agriculture problems of the communities, such as food 
        policy councils and food planning associations; or
          (5) meet, as soon as practicable, specific 
        neighborhood, local, or State food and agriculture 
        needs, including needs for--
                  (A) infrastructure improvement and 
                development;
                  (B) planning for long-term solutions; or
                  (C) the creation of innovative marketing 
                activities that mutually benefit farmers and 
                low-income consumers.

           *       *       *       *       *       *       *

    (e) Matching Funds Requirements.--
          (1) Requirements.--The Federal share of the cost of 
        establishing or carrying out a community food project 
        that receives assistance under subsection (b) may not 
        exceed [50] 75 percent of the cost of the project 
        during the term of the grant.

           *       *       *       *       *       *       *


SEC. 27. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE 
                    PROGRAM.

    (a) Purchase of Commodities.--From amounts made available 
to carry out this Act, for each of fiscal years [1997 through 
2002] 2002 through 2006, the Secretary shall purchase 
[$100,000,000] $110,000,000 of a variety of nutritious and 
useful commodities of the types that the Secretary has the 
authority to acquire through the Commodity Credit Corporation 
or under section 32 of the Act entitled ``An Act to amend the 
Agricultural Adjustment Act, and for other purposes'', approved 
August 24, 1935 (7 U.S.C. 612c), and distribute the commodities 
to States for distribution in accordance with section 214 of 
the Emergency Food Assistance Act of 1983 (Public Law 98-098; 7 
U.S.C. 612c note).
    (b) Basis for Commodity Purchases.--In purchasing 
commodities under subsection (a), the Secretary shall, to the 
extent practicable and appropriate, make purchases based on--
          (1) agricultural market conditions;
          (2) preferences and needs of States and distributing 
        agencies; and
          (3) preferences of recipients.
    (c) Use of Funds for Related Costs.--
          (1) In general.--For each of fiscal years 2002 
        through 2006, the Secretary shall use $10,000,000 of 
        the funds made available under subsection (a) to pay 
        the direct and indirect costs of States relating to the 
        processing, storing, transporting, and distributing to 
        eligible recipient agencies of--
                  (A) commodities purchased by the Secretary 
                under subsection (a); and
                  (B) commodities acquired from other sources, 
                including commodities acquired by gleaning (as 
                defined in section 111(a) of the Hunger 
                Prevention Act of 1988 (7 U.S.C. 612c note; 
                Public Law 100-435)).
          (2) Allocation of funds.--The amount required to be 
        used in accordance with paragraph (1) shall be 
        allocated in accordance with section 204(a) of the 
        Emergency Food Assistance Act of 1983 (7 U.S.C. 
        7508(a)).

           *       *       *       *       *       *       *


SEC. 28. INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMUNITY PROBLEMS.

    (a) In General.--The Secretary shall offer to enter into a 
contract with a nongovernmental organization described in 
subsection (b) to coordinate with Federal agencies, States, 
political subdivisions, and nongovernmental organizations 
(referred to in this section as `targeted entities') to 
develop, and recommend to the targeted entities, innovative 
programs for addressing common community problems, including 
loss of farms, rural poverty, welfare dependency, hunger, the 
need for job training, juvenile crime prevention, and the need 
for self-sufficiency by individuals and communities.
    (b) Nongovernmental Organization.--The nongovernmental 
organization referred to in subsection (a)--
          (1) shall be selected on a competitive basis; and
          (2) as a condition of entering into the contract--
                  (A) shall be experienced in working with 
                targeted entities, and in organizing workshops 
                that demonstrate programs to targeted entities;
                  (B) shall be experienced in identifying 
                programs that effectively address problems 
                described in subsection (a) that can be 
                implemented by other targeted entities;
                  (C) shall agree--
                          (i) to contribute in-kind resources 
                        toward the establishment and 
                        maintenance of programs described in 
                        subsection (a); and
                          (ii) to provide to targeted entities, 
                        free of charge, information on the 
                        programs;
                  (D) shall be experienced in, and capable of, 
                receiving information from, and communicating 
                with, targeted entities throughout the United 
                States; and
                  (E) shall be experienced in operating a 
                national information clearinghouse that 
                addresses 1 or more of the problems described 
                in subsection (a).
    (c) Audits.--The Secretary shall establish auditing 
procedures and otherwise ensure the effective use of funds made 
available under this section.
    (d) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this section, and on October 1, 
        2002, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture to carry out 
        this section $200,000, to remain available until 
        expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

           *       *       *       *       *       *       *


              RICHARD B. RUSSELL NATIONAL SCHOOL LUNCH ACT

           *       *       *       *       *       *       *


    (e)(1) Subject to paragraph (2), in each school year the 
Secretary shall ensure that not less than 12 percent of the 
assistance provided under section 4, this section, and section 
11 shall be in the form of--
          (A) commodity assistance provided under this section, 
        including cash in lieu of commodities and 
        administrative costs for procurement of commodities 
        under this section; or
          (B) during the period beginning October 1, [2001] 
        2003, and ending September 30, 2009, commodities 
        provided by the Secretary under any provision of law.
    (2) If amounts available to carry out the requirements of 
the sections described in paragraph (1) are insufficient to 
meet the requirement contained in paragraph (1) for a school 
year, the Secretary shall, to the extent necessary, use the 
authority provided under section 14(a) to meet the requirement 
for the school year.

           *       *       *       *       *       *       *


PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

           *       *       *       *       *       *       *



SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN FEDERAL 
                    PROGRAMS.

    (a) Limited Eligibility for Specified Federal Programs.--
          (1) In general.--Notwithstanding any other provision 
        of law and except as provided in paragraph (2), an 
        alien who is a qualified alien (as defined in section 
        431) is not eligible for any specified Federal program 
        (as defined in paragraph (3)).
          (2) Exceptions.--
                  (A) Time-limited exception for refugees and 
                asylees.--With respect to the specified Federal 
                [programs described in paragraph (3)] program 
                described in paragraph (3)(A), paragraph (1) 
                shall not apply to an alien until 7 years after 
                the date--
                          (i) an alien is admitted to the 
                        United States as a refugee under 
                        section 207 of the Immigration and 
                        Nationality Act;

           *       *       *       *       *       *       *

                  (B) Certain permanent resident aliens.--
                Paragraph (1) shall not apply to an alien who--
                          (i) is lawfully admitted to the 
                        United States for permanent residence 
                        under the Immigration and Nationality 
                        Act; and
                          (ii)(I) has worked [40] 40 (or 16, in 
                        the case of the specified Federal 
                        program described in paragraph (3)(B)) 
                        qualifying quarters of coverage as 
                        defined under title II of the Social 
                        Security Act or can be credited with 
                        such qualifying quarters as provided 
                        under section 435, and (II) in the case 
                        of any such qualifying quarter creditable 
                        for any period beginning after December 
                        31, 1996, did not receive any Federal 
                        means-tested public benefit (as provided 
                        under section 403) during any such period.
                  (C) Veteran and active duty exception.--
                Paragraph (1) shall not apply to an alien who 
                is lawfully residing in any State and is--

           *       *       *       *       *       *       *

                  (F) Disabled aliens lawfully residing in the 
                united states on august 22, 1996.--With respect 
                to eligibility for benefits for the specified 
                Federal programs described in paragraph (3), 
                paragraph (1) shall not apply to an alien who--
                          [(i) was lawfully residing in the 
                        United States on August 22, 1996; and
                          [(ii)(I) in the case] (i) in the case 
                        of the specified Federal program 
                        described in paragraph (3)(A)--
                                  ``(I) was lawfully residing 
                                in the United States on August 
                                22, 1996; and
                                  ``(II) is blind or disabled, 
                                as defined in paragraph (2) or 
                                (3) of section 1614(a) of the 
                                Social Security Act (42 U.S.C. 
                                1382c(a)); and
                          ``(ii) in the case of the specified 
                        Federal program described in paragraph 
                        (3)(A), is blind or disabled, as 
                        defined in section 1614(a)(2) or 
                        1614(a)(3) of the Social Security Act 
                        (42 U.S.C. 1382c(a)(3)); and

           *       *       *       *       *       *       *

                  (J) Food stamp exception for certain 
                children.--With respect to eligibility for 
                benefits for the specified Federal program 
                described in paragraph (3)(B), paragraph (1) 
                shall not apply to any individual [who--
                          [(i) was lawfully residing in the 
                        United States on August 22, 1996; and
                          [(ii) is under] 18 years of age.
                  (K) Food stamp exception for certain hmong 
                and highland laotians.--With respect to 
                eligibility for benefits for the specified 
                Federal program described in paragraph (3)(B), 
                paragraph (1) shall not apply to--

           *       *       *       *       *       *       *

                                  (IV) an alien is granted 
                                status as a Cuban and Haitian 
                                entrant (as defined in section 
                                501(e) of the Refugee Education 
                                Assistance Act of 1980); or
                                  (V) an alien admitted to the 
                                United States as an Amerasian 
                                immigrant as described in 
                                subsection (a)(2)(A)(i)(V) 
                                until 5 years after the date of 
                                such alien's entry into the 
                                United States.
                  (L) Food stamp exception for refugees and 
                asylees.--With respect to eligibility for 
                benefits for the specified Federal program 
                described in paragraph (3)(B), paragraph (1) 
                shall not apply to an alien with respect to 
                which an action described in subparagraph (A) 
                was taken and was not revoked.

           *       *       *       *       *       *       *

                  (H) Programs of student assistance under 
                titles IV, V, IX, and X of the Higher Education 
                Act of 1965, and titles III, VII, and VIII of 
                the Public Health Service Act.
                  (I) Means-tested programs under the 
                Elementary and Secondary Education Act of 1965.
                  (J) Benefits under the Head Start Act.
                  (K) Benefits under the Job Training 
                Partnership Act or title I of the Workforce 
                Investment Act of 1998.
                  (L) Assistance or benefits under the Food 
                Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
        Effective on July 1, 2000, this paragraph is amended by 
        striking ``Job Training Partnership Act or''.
    (d) Benefits for Certain Groups.--Notwithstanding any other 
provision of law, the limitations under section 401(a) and 
subsection (a) shall not apply to--

           *       *       *       *       *       *       *


SEC. 421. FEDERAL ATTRIBUTION OF SPONSOR'S INCOME AND RESOURCES TO 
                    ALIEN.

    (a) In General.--Notwithstanding any other provision of 
law, in determining the eligibility and the amount of benefits 
of an alien for any Federal means-tested public benefits 
program (as provided under section 403), the income and 
resources of the alien shall be deemed to include the 
following:
          (1) The income and resources of any person who 
        executed an affidavit of support pursuant to section 
        213A of the Immigration and Nationality Act (as added 
        by section 423 and as amended by section 551(a) of the 
        Illegal Immigration Reform and Immigrant Responsibility 
        Act of 1996) on behalf of such alien.
          (2) The income and resources of the spouse (if any) 
        of the person.
    (b) Duration of Attribution Period.--Subsection (a) shall 
apply with respect to an alien until such time as the alien--
          (1) achieves United States citizenship through 
        naturalization pursuant to chapter 2 of title III of 
        the Immigration and Nationality Act; or
          (2)(A) has worked [40] 40 (or 16, in the case of the 
        specified Federal program described in section 
        402(a)(3)(B) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 
        1612(a)(3)(B))) qualifying quarters of coverage as 
        defined under title II of the Social Security Act or 
        can be credited with such qualifying quarters as 
        provided under section 435, and (B) in the case of any 
        such qualifying quarter creditable for any period 
        beginning after December 31, 1996, did not receive any 
        Federal means-tested public benefit (as provided under 
        section 403) during any such period.
    (c) Review of Income and Resources of Alien Upon 
Reapplication.--Whenever an alien is required to reapply for 
benefits under any Federal means-tested public benefits 
program, the applicable agency shall review the income and 
resources attributed to the alien under subsection (a).
    (d) Application.--
          (1) If on the date of the enactment of this Act, a 
        Federal means-tested public benefits program attributes 
        a sponsor's income and resources to an alien in 
        determining the alien's eligibility and the amount of 
        benefits for an alien, this section shall apply to any 
        such determination beginning on the day after the date 
        of the enactment of this Act.
          (2) If on the date of the enactment of this Act, a 
        Federal means-tested public benefits program does not 
        attribute a sponsor's income and resources to an alien 
        in determining the alien's eligibility and the amount 
        of benefits for an alien, this section shall apply to 
        any such determination beginning 180 days after the 
        date of the enactment of this Act.
          (3) This section shall not apply to assistance or 
        benefits under the Food Stamp Act of 1977 (7 U.S.C. 
        2011 et seq.) to the extent that a qualified alien is 
        eligible under section 402(a)(2)(J).
    (e) Indigence Exception.--

           *       *       *       *       *       *       *


            AGRICULTURE AND CONSUMER PROTECTION ACT OF 1973

           *       *       *       *       *       *       *


                     COMMODITY DISTRIBUTION PROGRAM

    Sec. 4. (a) Notwithstanding any other provision of law, the 
Secretary may, during fiscal years 1991 through [2002] 2006 
purchase and distribute sufficient agricultural commodities 
with funds appropriated from the general fund of the Treasury 
to maintain the traditional level of assistance for food 
assistance programs as are authorized by law, including but not 
limited to distribution to institutions (including hospitals 
and facilities caring for needy infants and children), 
supplemental feeding programs serving women, infants, and 
children or elderly persons, or both, wherever located, 
disaster areas, summer camps for children, the United States 
Trust Territory of the Pacific Islands, and Indians, whenever a 
tribal organization requests distribution of federally donated 
foods pursuant to section 4(b) of the Food Stamp Act of 1977. 
In providing for commodity distribution to Indians, the 
Secretary shall improve the variety and quantity of commodities 
supplied to Indians in order to provide them an opportunity to 
obtain a more nutritious diet.

           *       *       *       *       *       *       *

    Sec. 5. [(a) In carrying out the supplemental feeding 
program (hereinafter referred to as the ``commodity 
supplemental food program'') under section 4 of this Act, the 
Secretary (1) may institute two pilot projects directed at low-
income elderly persons, including, where feasible, distribution 
of commodities to such persons in their homes; (2) shall 
provide to the State agencies administering the commodity 
supplemental food program, for each of the fiscal year 1991 
through 2002 funds appropriated from the general fund of the 
Treasury in amounts equal to the administrative costs of State 
and local agencies in operating the program, except that the 
funds provided to State agencies each fiscal year may not 
exceed 20 percent of the amount appropriated for the commodity 
supplemental food program.]
    (a) Grants Per Assigned Caseload Slot.--
          (1) In general.--In carrying out the program under 
        section 4 (referred to in this section as the 
        ``commodity supplemental food program''), for each of 
        fiscal years 2003 through 2006, the Secretary shall 
        provide to each State agency from funds made available 
        to carry out that section (including any such funds 
        remaining available from the preceding fiscal year), a 
        grant per assigned caseload slot for administrative costs 
        incurred by the State agency and local agencies in the 
        State in operating the commodity supplemental food program.
          (2) Amount of grants.--For each of fiscal years 2003 
        through 2006, the amount of each grant per caseload 
        slot shall be equal to $50, adjusted by the percentage 
        change between--
                  (A) the value of the State and local 
                government price index, as published by the 
                Bureau of Economic Analysis of the Department 
                of Commerce, for the 12-month period ending 
                June 30 of the second preceding fiscal year; 
                and
                  (B) the value of that index for the 12-month 
                period ending June 30 of the preceding fiscal 
                year.
    (b) During the first three months of any commodity 
supplemental food program, or until such program reaches its 
projected caseload level, whichever comes first, the Secretary 
shall pay those administrative costs necessary to commence the 
program successfully: Provided, That in no event shall 
administrative costs paid by the Secretary for any fiscal year 
exceed the limitation established in subsection (a) of this 
section.
    (c) Administrative costs for the purposes of the commodity 
supplemental food program shall include, but not be limited to, 
expenses for information and referral, operation, monitoring, 
nutrition education, start-up costs, and general 
administration, including staff, warehouse and transportation 
personnel, insurance, and administration of the State or local 
office.
    (d)(1) During each fiscal year the commodity supplemental 
food program is in operation, the types and varieties of 
commodities and their proportional amounts shall be determined 
by the Secretary, but, if the Secretary proposes to make any 
significant changes in the types, varieties, or proportional 
amounts from those that were available or were planned at the 
beginning of the fiscal year (or as were available during the 
fiscal year ending June 30, 1976, whichever is greater) the 
Secretary shall report such changes before implementation to 
the Committee on Agriculture of the House of Representatives 
and the Committee on Agriculture, Nutrition, and Forestry of 
the Senate.
          (2) Notwithstanding any other provision of law, the 
        Commodity Credit Corporation shall, to the extent that 
        the Commodity Credit Corporation inventory levels 
        permit, provide not less than 9,000,000 pounds of 
        cheese and not less than 4,000,000 pounds of nonfat dry 
        milk in each of the fiscal years 1991 through [2002] 
        2006 to the Secretary of Agriculture. The Secretary 
        shall use such amounts of cheese and nonfat dry milk to 
        carry out the commodity supplemental food program 
        before the end of each fiscal year.
    (e) The Secretary of Agriculture is authorized to issue 
such regulations as may be necessary to carry out the commodity 
supplemental food program.

           *       *       *       *       *       *       *


                 EMERGENCY FOOD ASSISTANCE ACT OF 1983

           *       *       *       *       *       *       *


                    AUTHORIZATION AND APPROPRIATIONS

    Sec. 204.(a) (1) There are authorized to be appropriated 
$50,000,000 for each of the fiscal years 1991 through [2002] 
2006, for the Secretary to make available to the States to pay 
for the direct and indirect [administrative] costs of the 
States related to the processing, storage, transporting, and 
distributing to eligible recipient agencies of commodities 
provided by the Secretary under this Act and commodities 
secured from other sources. Funds appropriated under this 
paragraph for any fiscal year shall be allocated to the States 
on an advance basis, dividing such funds among the States in 
the same proportions as the commodities distributed under this 
Act for such fiscal year are divided among the States. If a 
State agency is unable to use all of the funds so allocated to 
it, the Secretary shall

           *       *       *       *       *       *       *


                      CHILD NUTRITION ACT OF 1966

           *       *       *       *       *       *       *


                          (iii)(I) receives medical assistance 
                        under title XIX of the Social Security 
                        Act; or
                          (II) is a member of a family in which 
                        a pregnant woman or an infant receives 
                        such assistance.
                  (B) For the purpose of determining income 
                eligibility under this section, any State 
                agency may choose to exclude from income--
                          (i) any [basic allowance for housing] 
                        basic allowance--
                                  (I) for housing received by 
                                military service personnel 
                                residing off military 
                                installations; [and] or
                                  (II) provided under section 
                                403 of title 37, United States 
                                Code, for housing that is 
                                acquired or constructed under 
                                subchapter IV of chapter 169 of 
                                title 10, United States Code, 
                                or any related provision of 
                                law; and
                          (ii) any cost-of-living allowance 
                        provided under section 405 of title 37, 
                        United States Code, to a member of a 
                        uniformed service who is on duty 
                        outside the contiguous States of the 
                        United States.

           *       *       *       *       *       *       *


SEC. 456. SENIORS FARMERS MARKET NUTRITION PROGRAM.

    (a) Establishment.--The Secretary of Agriculture shall 
carry out and expand a seniors farmers' market nutrition 
program.
    (b) Program Purposes.--The purposes of the seniors farmers' 
market nutrition program are--
          (1) to provide to low-income seniors resources in the 
        form of fresh, nutrition, unprepared, locally grown 
        fruits, vegetables, and herbs from farmers' markets, 
        roadside stands, and community-supported agriculture 
        programs.
          (2) to increase domestic consumption of agricultural 
        commodities by expanding or assistance in the expansion 
        of domestic farmers' markets, roadside stands, and 
        community-supported agriculture programs; and (3) to 
        develop or aid in the development of new farmers' 
        markets, roadside stands, and community-supported 
        agriculture programs.
    (c) Regulations.--The Secretary may promulgate such 
regulations as the Secretary considers necessary to carry out 
the seniors farmers' market nutrition program under this 
section.
    (d) Termination of Effectiveness.--The program established 
under subsection (a) terminates on September 30, 2006, and 
shall be considered to have expired notwithstanding section 257 
of the Balanced Budget and Emergency Deficit Control Act of 
1985 (2 U.S.C. 907).

           *       *       *       *       *       *       *


                                TITLE 5

              CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

           *       *       *       *       *       *       *


                     Subtitle A--Real Estate Loans

    Sec. 302. (a) The Secretary is authorized to make and 
insure loans under this subtitle to farmers and ranchers in the 
United States, and to farm cooperatives and private domestic 
corporations, partnerships, and [joint operations] joint 
operations, and limited liability companies that are controlled 
by farmers and ranchers and engaged primarily and directly in 
farming or ranching in the United States, subject to the 
conditions specified in this section. To be eligible for such 
loans, applicants who are individuals, or, in the case of 
cooperatives, corporations, partnerships, [and joint 
operations] joint operations, and limited liability companies, 
individuals holding a majority interest in such entity, must 
(1) be citizens of the United States, (2) for direct loans 
only, have either training or farming experience that the 
Secretary determines is sufficient to assure reasonable 
prospects of success in the proposed farming operations, (3) be 
or will become owner-operators of not larger than family farms 
(or in the case of cooperatives, corporations, partnerships, 
[and joint operations] joint operations, and limited liability 
companies in which a majority interest is held by individuals 
who are related by blood or marriage, as defined by the 
Secretary, such individuals must be or will become either 
owners or operators of not larger than a family farm and at 
least one such individual must be or will become an operator of 
not larger than a family farm or, in the case of holders of the 
entire interest who are related by blood or marriage and all of 
whom are or will become farm operators, the ownership interest 
of each such holder separately constitutes not larger than a 
family farm, even if their interests collectively constitute 
larger than a family farm, as defined by the Secretary), and 
(4) be unable to obtain sufficient credit elsewhere to finance 
their actual needs at reasonable rates and terms, taking into 
consideration prevailing private and cooperative rates and 
terms in the community in or near which the applicant resides 
for loans for similar purposes and periods of time. In addition 
to the foregoing requirements of this section, in the case of 
corporations, partnerships, and joint operations, the family 
farm requirement of clause (3) of the preceding sentence shall 
apply as well to the farm or farms in which the entity has an 
ownership and operator interest and the requirement of clause 
(4) of the preceding sentence shall apply as well to the entity 
in the case of cooperatives, corporations, partnerships, [and 
joint operations] joint operations, and limited liability 
companies.
    (b) Direct Loans.--
          (1) In general.--Subject to paragraph (3), the 
        Secretary may make a direct loan under this subtitle 
        only to a farmer or rancher who has [operated] 
        participated in the business operations of a farm or 
        ranch for not less than 3 years and--
                  (A) is a qualified beginning farmer or 
                rancher;
                  (B) has not received a previous direct farm 
                ownership loan made under this subtitle; or

           *       *       *       *       *       *       *


SEC. 303. PURPOSES OF LOANS.

    (a) Allowed Purposes.--
          (1) Direct loans.--A farmer or rancher may use a 
        direct loan made under this subtitle only for--
                  (A) acquiring or enlarging a farm or ranch;
                  (B) making capital improvements to a farm or 
                ranch;
                  (C) paying loan closing costs related to 
                acquiring, enlarging, or improving a farm or 
                ranch; or
                  (D) paying for activities to promote soil and 
                water conservation and protection described in 
                section 304 on a farm or ranch.
          (2) Guaranteed loans.--A farmer or rancher may use a 
        loan guaranteed under this subtitle only for--
                  (A) acquiring or enlarging a farm or ranch;
                  (B) making capital improvements to a farm or 
                ranch;
                  (C) paying loan closing costs related to 
                acquiring, enlarging, or improving a farm or 
                ranch;
                  (D) paying for activities to promote soil and 
                water conservation and protection described in 
                section 304 on a farm or ranch; or
                  (E) refinancing indebtedness.
                  (E) refinancing, during a fiscal year, a 
                short-term, temporary bridge loan made by a 
                commercial or cooperative lender to a beginning 
                farmer or rancher for the acquisition of land 
                for a farm or ranch, if--
                          (i) the Secretary approved an 
                        application for a direct farm ownership 
                        loan to the beginning farmer or rancher 
                        for acquisition of the land; and
                          (ii) funds for direct farm ownership 
                        loans under section 346(b) were not 
                        available at the time at which the 
                        application was approved.
    (b) Preferences.--In making or guaranteeing a loan under 
this subtitle for purchase of a farm or ranch, the Secretary 
shall give preference to a person who--

           *       *       *       *       *       *       *


SEC. 305. LIMITATIONS ON AMOUNT OF FARM OWNERSHIP LOANS.

    [(a) In General.--The Secretary shall make or insure no 
loan under sections 302, 303, 304, 310D, and 310E of this title 
that would cause the unpaid indebtedness under such sections of 
any one borrower to exceed the smaller of (1) the value of the 
farm or other security, or (2) in the case of a loan other than 
a loan guaranteed by the Secretary, $200,000, or, in the case 
of a loan guaranteed by the Secretary, $700,000 (increased, 
beginning with fiscal year 2000, by the inflation percentage 
applicable to the fiscal year in which the loan is guaranteed 
and reduced by the amount of any unpaid indebtedness of the 
borrower on loans under subtitle B that are guaranteed by the 
Secretary).]
    (a) In General._The Secretary shall not make or insure a 
loan under section 302, 303, 304, 310D, or 310E that would 
cause the unpaid indebtedness under those sections of any 1 
borrower to exceed the lesser of--
          (1) the value of the farm or other security; or
          (2)(A) in the case of a loan made by the Secretary--
                  (i) to a beginning farmer or rancher, 
                $250,000, as adjusted (beginning with fiscal 
                year 2003) by the inflation percentage 
                applicable to the fiscal year in which the loan 
                is made; or
                  (ii) to a borrower other than a beginning 
                farmer or rancher, $200,000; or
          (B) in the case of a loan guaranteed by the 
        Secretary, $700,000, as--
                  (i) adjusted (beginning with fiscal year 
                2000) by the inflation percentage applicable to 
                the fiscal year in which the loan is 
                guaranteed; and
                  (ii) reduced by the amount of any unpaid 
                indebtedness of the borrower on loans under 
                subtitle B that are guaranteed by the 
                Secretary.
    (b) Determination of Value.--In determining the value of 
the farm, the Secretary shall consider appraisals made by 
competent appraisers under rules established by the Secretary.

           *       *       *       *       *       *       *

    Sec. 307. (a)(1) The period for repayment of loans under 
this subtitle shall not exceed forty years.

           *       *       *       *       *       *       *

          (C) Notwithstanding subparagraph (A), the Secretary 
        shall establish loan rates for health care and related 
        facilities based solely on the income of the area to be 
        served, and such rates shall be otherwise consistent 
        with such subparagraph.
          (D) Joint financing arrangement.--[If]
                  (i) In general._Subject to clause (ii), if a 
                direct farm ownership loan is made under this 
                subtitle as part of a joint financing 
                arrangement and the amount of the direct farm 
                ownership loan does not exceed 50 percent of 
                the total principal amount financed under the 
                arrangement, the interest rate on the direct 
                farm ownership loan shall be at least 4 percent 
                annually.
                   (ii) Beginning farmers and ranchers.--The 
                interest rate charged a beginning farmer or 
                rancher for a loan described in clause (i) 
                shall be 50 basis points less than the rate 
                charged farmers and ranchers that are not 
                beginning farmers or ranchers.

           *       *       *       *       *       *       *

    Sec. 309. (a) The fund established pursuant to section 
11(a) of the Bankhead-Jones Farm Tenant Act, as amended,shall 
hereafter be called the Agricultural Credit Insurance Fund and is 
hereinafter in this subtitle referred to as the ``fund''. The fund 
shall remain available as a revolving fund for the discharge of the 
obligations of the Secretary under agreements insuring loans under this 
subtitle and loans and mortgages insured under prior authority.

           *       *       *       *       *       *       *

    (h)(1) The Secretary may provide financial assistance to 
borrowers for purposes provided in this title by guaranteeing 
loans made by any Federal or State chartered bank, savings and 
loan association, cooperative lending agency, or other legally 
organized lending agency.
    (2) The interest rate payable by a borrower on the portion 
of a guaranteed loan that is sold by a lender to the secondary 
market under this title may be lower than the interest rate 
charged on the portion retained by the lender, but shall not 
exceed the average interest rate charged by the lender on loans 
made to farm and ranch borrowers.
    (3) With regard to any loan guarantee on a loan made by a 
commercial or cooperative lender related to a loan made by the 
Secretary under section 310E--
          (A) the Secretary shall not charge a fee to any 
        person (including a lender); and
          (B) a lender may charge a loan origination and 
        servicing fee in an amount not to exceed 1 percent of 
        the amount of the loan.
    (4) Maximum guarantee of 90 percent.--Except as provided in 
[paragraphs (5) and (6)] paragraphs (5), (6), and (7), a loan 
guarantee under this title shall be for not more than 90 
percent of the principal and interest due on the loan.
    (5) Refinanced loans guaranteed at 95 percent.--The 
Secretary shall guarantee 95 percent of--
          (A) in the case of a loan that solely refinances a 
        direct loan made under this title, the principal and 
        interest due on the loan on the date of the 
        refinancing; or
          (B) in the case of a loan that is used for multiple 
        purposes, the portion of the loan that refinances the 
        principal and interest due on a direct loan made under 
        this title that is outstanding on the date the loan is 
        guaranteed.
    (6) Beginning farmer loans [guaranteed up to 95 percent.--
The Secretary may guarantee not more than] guaranteed at 95 
percent.--The Secretary shall guarantee 95 percent of--
    (7) Amount of guarantee of loans for tribal operations.--In 
the case of an operating loan made to a farmer or rancher who 
is a member of an Indian tribe and whose farm or ranch is 
within an Indian reservation (as defined in section 
335(e)(1)(A)(iii)), the Secretary shall guarantee 95 percent of 
the loan.
          (A) a farm ownership loan for acquiring a farm or 
        ranch to a borrower who is participating in the down 
        payment loan program under section 310E; or
          (B) an operating loan to a borrower who is 
        participating in the down payment loan program under 
        section 310E that is made during the period that the 
        borrower has a direct loan outstanding under this 
        subtitle for acquiring a farm or ranch.
    (i)(1) Not later than 60 days after any State expresses to 
the Secretary, in writing, a desire to coordinate the provision 
of financial assistance to qualified beginning farmers and 
ranchers in the State, the Secretary and the State shall 
conclude a joint memorandum of understanding that shall govern 
the coordination of the provision of the financial assistance 
by the State and the Secretary.
    (2) The memorandum of understanding shall provide that if a 
State beginning farmer program makes a commitment to provide a 
qualified beginning farmer or rancher with financing to 
establish or maintain a viable farming or ranching operation, 
the Secretary shall, subject to applicable law, normal loan 
approval criteria, and the availability of funds provide the 
farmer or rancher with a down payment loan under section 310E 
or a guarantee of the financing provided by the State program, 
or both.
    (3) The Secretary shall not charge any person (including a 
lender) any fee with respect to the provision of any guarantee 
under this subsection.
    (4) The Secretary shall notify each State of the provisions 
of this subsection.
    (5) As used in paragraph (1), the term ``State beginning 
farmer program'' means any program that is--
          (A) carried out by, or under contract with, a State; 
        and
          (B) designed to assist persons in obtaining the 
        financial assistance necessary to enter agriculture and 
        establish viable farming or ranching operations.
    (j) Guarantee of Loans Made Under State Beginning Farmer or 
Rancher Programs.--The Secretary may guarantee under this title 
a loan made under a State beginning farmer or rancher program, 
including a loan financed by the net proceeds of a qualified 
small issue agricultural bond for land or property described in 
section 144(a)(12)(B)(ii) of the Internal Revenue Code of 1986.

           *       *       *       *       *       *       *

          (7) Amount of guarantee of loans for tribal 
        operations.--In the case of an operating loan made to a 
        Native American farmer or rancher whose farm or ranch 
        is within an Indian reservation (as defined in section 
        335(e)(1)(A)(iii)), the Secretary shall guarantee 95 
        percent of the loan.

           *       *       *       *       *       *       *


SEC. 310E. DOWN PAYMENT LOAN PROGRAM.

    (a) In General.--
          (1) Establishment.--Notwithstanding any other section 
        of this subtitle, the Secretary shall establish, within 
        the farm ownership loan program established under this 
        subtitle, a program under which loans shall be made 
        under this section to qualified beginning farmers and 
        ranchers for down payments on farm ownership loans.
          (2) Administration.--The Secretary shall be the 
        primary coordinator of credit supervision for the down 
        payment loan program established under this section, in 
        consultation with the commercial or cooperative lender 
        and, if applicable, the contracting credit counseling 
        service selected under section 360(c).
    (b) Loan Terms.--
          (1) Principal.--Each loan made under this section 
        shall be in an amount equal to [30 percent] 40 percent 
        of the purchase price or appraisal value, whichever is 
        lower, of the farm or ranch to be acquired, unless the 
        borrower requests a lesser amount.
          (2) Interest rate.--The interest rate on any loan 
        made by the Secretary under this section shall be 4 
        percent.
          (3) Duration.--Each loan under this section shall be 
        made for a period of [10 years] 20-years or less, at 
        the option of the borrower.
          (4) Repayment.--Each borrower of a loan under this 
        section shall repay the loan to the Secretary in equal 
        annual installments.

           *       *       *       *       *       *       *

    (c) Limitations.--
          (1) Borrowers required to make minimum down 
        payment.--The Secretary shall not make a loan under 
        this section to any borrower with respect to a farm or 
        ranch if the contribution of the borrower to the down 
        payment on the farm or ranch will be less than 10 
        percent of the purchase price of the farm or ranch.
          (2) Maximum price of property to be acquired.--The 
        Secretary shall not make a loan under this section with 
        respect to a farm or ranch for which the purchase price 
        or appraisal value, whichever is lower, exceeds 
        $250,000.
          (3) Prohibited types of financing.--The Secretary 
        shall not make a loan under this section with respect 
        to a farm or ranch if the farm or ranch is to be 
        acquired with other financing that contains any of the 
        following conditions:
                  (A) The financing is to be amortized over a 
                period of less than 30 years.
                  (B) A balloon payment will be due on the 
                financing during the [10-year] 20-year period 
                beginning on the date the loan is to be made by 
                the Secretary.

           *       *       *       *       *       *       *


SEC. 310F. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    (a) In General.--Not later than October 1, 2002, the 
Secretary shall carry out a pilot program in not fewer than 10 
geographically dispersed States, as determined by the 
Secretary, to guarantee up to 5 loans per State in each of 
fiscal years 2003 through 2006 made by a private seller of a 
farm or ranch to a qualified beginning farmer or rancher on a 
contract land sale basis, if the loan meets applicable 
underwriting criteria and a commercial lending institution 
agrees to serve as escrow agent.
    (b) Date of Commencement of Program.--The Secretary shall 
commence the pilot program on making a determination that 
guarantees of contract land sales present a risk that is 
comparable with the riskpresented in the case of guarantees to 
commercial lenders.

           *       *       *       *       *       *       *


                      Subtitle B--Operating Loans

    Sec. 311. (a) The Secretary is authorized to make and 
insure loans under this subtitle to farmers and ranchers in the 
United States, and to farm cooperatives and private domestic 
corporations, partnerships, [and joint operations] joint 
operations and limited liability companies that are controlled 
by farmers and ranchers and engaged primarily and directly in 
farming or ranching in the United States, subject to the 
conditions specified in this section. To be eligible for such 
loans, applicants who are individuals, or, in the case of 
cooperatives, corporations, partnerships, [and joint 
operations] joint operations, and limited liability companies, 
individuals holding a majority interest in such entity, must 
(1) be citizens of the United States, (2) for direct loans 
only, have either training or farming experience that the 
Secretary determines is sufficient to assure reasonable 
prospects of success in the proposed farming operations, (3) be 
or will become operators of not larger than family farms (or in 
the case of cooperatives, corporations, partnerships, [and 
joint operations] joint operations, and limited liability 
companies in which a majority interest is held by individuals 
who are related by blood or marriage, as defined by the 
Secretary, such individuals must be or will become either 
owners or operators of not larger than a family farm and at 
least one such individual must be or will become an operator of 
not larger than a family farm or, in the case of holders of the 
entire interest who are related by blood or marriage and all of 
whom are or will become farm operators, the ownership interest 
of each such holder separately constitutes not larger than a 
family farm, even if their interests collectively constitute 
larger than a family farm, as defined by the Secretary), and 
(4) be unable to obtain sufficient credit elsewhere to finance 
their actual needs at reasonable rates and terms, taking into 
consideration prevailing private and cooperative rates and 
terms in the community in or near which the applicant resides 
for loans for similar purposes and periods of time. In addition 
to the foregoing requirements of this subsection, in the case 
of corporations, partnerships, [and joint operations] joint 
operations, and limited liability companies, the family farm 
requirement of clause (3) of the preceding sentence shall apply 
as well to the farm or farms in which the entity has an 
operator interest and the requirement of clause (4) of the 
preceding sentence shall apply as well to the entity in the 
case of cooperatives, corporations, partnerships, [and joint 
operations] joint operations, and limited liability companies.
    (b)(1) Loans may also be made under this subtitle without 
regard to the requirements of clauses (2) and (3) of subsection 
(a) to youths who are rural residents to enable them to operate 
enterprises in connection with their participation in 4-H 
Clubs, Future Farmers of America, and similar organizations.
    (2) A person receiving a loan under this subsection who 
executes a promissory note therefor shall thereby incur full 
personal liability for the indebtedness evidenced by such note 
in accordance with its terms free of any disability of 
minority.

           *       *       *       *       *       *       *

    (c) Direct Loans.--
          (1) In general.--Subject to [paragraph (3)] 
        paragraphs (3) and (4), the Secretary may make a direct 
        loan under this subtitle only to a farmer or rancher 
        who--
                  (A) is a qualified beginning farmer or 
                rancher [who has not operated a farm or ranch, 
                or who has operated a farm or ranch for not 
                more than 5 years];
                  (B) has not received a previous direct 
                operating loan made under this subtitle; or

           *       *       *       *       *       *       *

          (4) Waivers. * * *--
                  (A) Tribal farm and ranch operations.--The 
                Secretary shall waive the limitation under 
                paragraph (1)(C) or (3) for a direct loan made 
                under this subtitle to a farmer or rancher who 
                is a member of an Indian Tribe and whose farm 
                or ranch is within an Indian reservation (as 
                defined in section 335(e)(1)(A)(ii)) if the 
                Secretary determines that commercial credit is 
                not generally available for such farm or ranch 
                operations.
                  (B) Other farm and ranch operations.--On a 
                case-by-case determination not subject to 
                administrative appeal, the Secretary may grant 
                a borrower a waiver, 1 time only for a period 
                of 2 years, of the limitation under paragraph 
                (1)(C) for a direct operating loan if the 
                borrower demonstrates to the satisfaction of 
                the Secretary that--
                          (i) the borrower has a viable farm or 
                        ranch operation;
                          (ii) the borrower applied for 
                        commercial credit from at least 2 
                        commercial lenders;
                          (iii) the borrower was unable to 
                        obtain a commercial loan (including a 
                        loan guaranteed by the Secretary); and
                          (iv) the borrower successfully has 
                        completed, or will complete within 1 
                        year, borrower training under section 
                        359 (from which requirement the Secretary 
                        shall not grant a waiver under section 
                        359(f)).

           *       *       *       *       *       *       *


                      Subtitle C--Emergency Loans

    Sec. 321. (a) The Secretary shall make and insure loans 
under this subtitle only to the extent and in such amounts as 
provided in advance in appropriation Acts to (1) established 
farmers, ranchers, or persons engaged in aquaculture, who are 
citizens of the United States and who are owner-operators (in 
the case of loans for a purpose under subtitle A) or operators 
(in the case of loans for a purpose under subtitle B) of not 
larger than family farms, and (2) farm cooperatives, private 
domestic corporations, partnerships, [or joint operations] 
joint operations or limited liability companies, (A) that are 
engaged primarily in farming, ranching, or aquaculture, and (B) 
in which a majority interest is held by individuals who are 
citizens of the United States and who are owner-operators (in 
the case of loans for a purpose under subtitle A) or operators 
(in the case of loans for a purpose under subtitle B) of not 
larger than family farms (or in the case of such cooperatives, 
corporations, partnerships, [or joint operations] in which a 
majority interest is held by individuals who are related by 
blood or marriage, as defined by the Secretary, such 
individuals must be either owners or operators of not larger 
than a family farm and at least one such individual must be an 
operator of not larger than a family farm), where the Secretary 
finds that the applicants' farming, ranching, or aquaculture 
operations have been substantially affected by a natural 
disaster in the United States or by a major disaster or 
emergency designated by the President under the Disaster Relief 
and Emergency Assistance Act: Provided, That they have 
experience and resources necessary to assure a reasonable 
prospect for successful operation with the assistance of such 
loan and are not able to obtain sufficient credit elsewhere. In 
addition to the foregoing requirements of this subsection, in 
the case of farm cooperatives, private domestic corporations, 
partnerships, [and joint operations], the family farm 
requirement of the preceding sentence shall apply as well to 
all farms in which the entity has an ownership and operator 
interest (in the case of loans for a purpose under subtitle A) 
or an operator interest (in the case of loans for a purpose 
under subtitle B). The Secretary shall accept applications 
from, and make or insure loans pursuant to the requirements of 
this subtitle to, applicants, otherwise eligible under this 
subtitle, that conduct farming, ranching, or aquaculture 
operations in any county contiguous to a county where the 
Secretary has found that farming, ranching, or aquaculture 
operations have been substantially affected by a natural 
disaster in the United States or by a major disaster or 
emergency designated by the President under the Disaster Relief 
and Emergency Assistance Act. The Secretary shall accept 
applications for assistance under this subtitle from persons 
affected by a natural disaster at any time during the eight-
month period beginning (A) on the date on which the Secretary 
determines that farming, ranching, or aquaculture operations 
have been substantially affected by such natural disaster or 
(B) on the date the President makes the major disaster or 
emergency designation with respect to such natural disaster, as 
the case may be.
    (b) Hazard Insurance Requirement.--

           *       *       *       *       *       *       *


                 Subtitle D--Administrative Provisions

    Sec. 331. (a) In accordance with section 359, for purposes 
of this title, and for the administration of assets under the 
jurisdiction of the Secretary of Agriculture pursuant to the 
Farmers Home Administration Act of 1946, as amended, the 
Bankhead-Jones Farm Tenant Act, as amended, the Act of August 
28, 1937, as amended, the Act of April 6, 1949, as amended, the 
Act of August 31, 1954, as amended, and the powers and duties 
of the Secretary under any other Act authorizing agricultural 
credit, the Secretary may assign and transfer such powers, 
duties, and assets to such officers or agencies of the 
Department of Agriculture as the Secretary considers 
appropriate.
    (b) The Secretary may--

           *       *       *       *       *       *       *

          (3) within the limits of appropriations made 
        therefor, make necessary expenditures for purchase or 
        hire of passenger vehicles, and such other facilities 
        and services as he may from time to time find necessary 
        for the proper administration of this title;
          (4) compromise, adjust, reduce, or charge-off debts 
        or claims (including debts and claims arising from loan 
        guarantees), and adjust, modify, subordinate, or 
        release the terms of security instruments, leases, 
        contracts, and agreements entered into or administered 
        by the Consolidated Farm Service Agency, Rural 
        Utilities Service, Rural Housing Service, Rural 
        Business-Cooperative Service, or a successor agency, or 
        the Rural Development Administration, except for 
        activities under the Housing Act of 1949. In the case 
        of a security instrument entered into under the Rural 
        Electrification Act of 1936 (7 U.S.C. 901 et seq.), the 
        Secretary shall notify the Attorney General of the 
        intent of the Secretary to exercise the authority of 
        the Secretary under this paragraph. The Secretary may 
        not require liquidation of property securing any farmer 
        program loan or acceleration of any payment required 
        under any farmer program loan as a prerequisite to 
        initiating an action authorized under this subsection. 
        The Secretary may release borrowers or others obligated 
        on a debt, except for debt incurred under the Housing 
        Act of 1949, from personal liability with or without 
        payment of any consideration at the time of the 
        compromise, adjustment, reduction, or charge-off of any 
        claim, except that no compromise, adjustment, 
        reduction, or charge-off of any claim may be made 
        or [carried out--
                  [(A) with respect to farmer program loans, on 
                terms more favorable than those recommended by 
                the appropriate county committee utilized 
                pursuant to section 332; or]
                  [(B) after] carried out after the claim has 
                been referred to the Attorney General, unless 
                the Attorney General approves;
          (5) except for activities conducted under the Housing 
        Act of 1949, collect all claims and obligations 
        administered by the Farmers Home Administration, or 
        under any mortgage, lease, contract, or agreement 
        entered into or administered by the Farmers Home 
        Administration and, if in his judgment necessary and 
        advisable, pursue the same to final collection in any 
        court having jurisdiction;

           *       *       *       *       *       *       *

    (c) The Secretary may use for the prosecution or defense of 
any claim or obligation described in subsection (b)(5) the 
Attorney General, the General Counsel of the Department of 
Agriculture, or a private attorney who has entered into a 
contract with the Secretary.
    [(d) Temporary Authority To Enter Into Contracts.--]
          (1) Definitions.--In this subsection:
                  (A) Eligible financial institution.--The term 
                ``eligible financial institution'' means a 
                financial institution with substantial 
                experience in farm, ranch, or aquaculture 
                lending that is regulated by the Comptroller of 
                the Currency, the Farm Credit Administration, 
                or a similar regulatory body.

           *       *       *       *       *       *       *

          (5) Sunset provision.--This subsection shall be 
        effective until September 30, 2002.
    [(e) Private Collection Agency.--The Secretary may use a 
private collection agency to collect a claim or obligation 
described in subsection (b)(5).]

           *       *       *       *       *       *       *

    Sec. 331B. Any loan for farm ownership purposes under 
subtitle A of this title, farm operating purposes under 
subtitle B of this title, or disaster emergency purposes under 
subtitle C of this title, other than a guaranteed loan, that is 
deferred, consolidated, rescheduled, or reamortized under this 
title shall, notwithstanding any other provision of this title, 
bear interest on the balance of the original loan and for the 
term of the original loan at a rate that is the [lower of (1) 
the] lowest of the rate of interest on the [original loan or 
(2) the] original loan; the rate being charged by the Secretary 
for loans, other than guaranteed loans, of the same type at the 
time at which the borrower applies for a deferral, 
consolidation, rescheduling, or reamortization; or the ???? of 
the deferral, consolidation, rescheduling, or reamortization.

           *       *       *       *       *       *       *

    Sec. 333. In connection with loans made or insured under 
this title, the Secretary shall require--
          (1) the applicant (A) to certify in writing, and the 
        Secretary shall determine, that he is unable to obtain 
        sufficient credit elsewhere to finance his actual needs 
        at reasonable rates and terms, taking into 
        consideration prevailing private and cooperative rates 
        and terms in the community in or near which the 
        applicant resides for loans for similar purposes and 
        periods of time, and (B) to furnish an appropriate 
        written financial statement;
          [(2) except with respect to a loan under section 306, 
        310B, or 314, the county or area committee established 
        under section 8(b)(5)(B) of the Soil Conservation and 
        Domestic Allotment Act (16 U.S.C. 590h(b)(5)(B)) to 
        certify in writing--
                  [(A) that an annual review of the credit 
                history and business operation of the borrower 
                has been conducted; and
                  [(B) that a review of the continued 
                eligibility of the borrower for the loan has 
                been conducted;]
          (2) except with respect to a loan under section 306, 
        310B, or 314--
                  (A) an annual review of the credit history 
                and business operation of the borrower; and
                  (B) an annual review of the continued 
                eligibility of the borrower for the loan;
          (3) except for guaranteed loans, an agreement by the 
        borrower that if at any time it shall appear to the 
        Secretary that the borrower may be able to obtain a 
        loan from a production credit association, a Federal 
        land bank, or other responsible cooperative or private 
        credit source (or, in the case of a borrower under 
        section 310D of this title, the borrower may be able to 
        obtain a loan under section 302 of this title), at 
        reasonable rates and terms for loans for similar 
        purposes and periods of time, the borrower will, upon 
        request by the Secretary, apply for and accept such 
        loan in sufficient amount to repay the Secretary or the 
        insured lender, or both, and to pay for any stock 
        necessary to be purchased in a cooperative lending agency 
        in connection with such loan;

           *       *       *       *       *       *       *

          (6) To the extent necessary for the borrower to 
        obtain a loan, guaranteed by the Secretary, from a 
        commercial or cooperative lender, the Secretary shall 
        provide interest rate reductions as provided for under 
        section 351.
    (g)(1) The Secretary shall provide to lenders a short, 
simplified application form for guarantees under this title [of 
loans the principal amount of which is $50,000 or less] of 
farmer program loans the principal amount of which is $100,000 
or less.
    (2) In Developing the Application, the Secretary Shall--

           *       *       *       *       *       *       *

    Sec. 335. (a) The Secretary is authorized and empowered to 
make advances, without regard to any loan or total indebtedness 
limitation, to preserve and protect the security for or the 
lien or priority of the lien securing any loan or other 
indebtedness owing to, insured by, or acquired by the Secretary 
under this title or under any other programs administered by 
the Farmers Home Administration or the Rural Development 
Administration; to bid for and purchase at any execution, 
foreclosure, or other sale or otherwise to acquire property 
upon which the United States has a lien by reason of a judgment 
or execution arising from, or which is pledged, mortgaged, 
conveyed, attached, or levied upon to secure the payment of, 
any such indebtedness whether or not such property is subject 
to other liens, to accept title to any property so purchased or 
acquired; and to sell, manage, or otherwise dispose of such 
property as hereinafter provided.

           *       *       *       *       *       *       *

    (c) Sale of Property.--
          (1) In general.--Subject to this subsection and 
        subsection (e)(1)(A), the Secretary shall offer to sell 
        real property that is acquired by the Secretary under 
        this title using the following order and method of 
        sale:
                  (A) Advertisement.--Not later than 15 days 
                after acquiring real property, the Secretary 
                shall publicly advertise the property for sale.
                  (B) Beginning farmer or rancher.--
                          (i) In general.--Not later than [75 
                        days] 135 days after acquiring real 
                        property, the Secretary shall offer to 
                        sell the property to a qualified 
                        beginning farmer or rancher at current 
                        market value based on a current 
                        appraisal.
                          (ii) Random selection.--If more than 
                        1 qualified beginning farmer or rancher 
                        offers to purchase the property, the 
                        Secretary shall select between the 
                        qualified applicants on a random basis.
                          (iii) Appeal of random selection.--A 
                        random selection or denial by the 
                        Secretary of a beginning farmer or 
                        rancher for farm inventory property 
                        under this subparagraph shall be final 
                        and not administratively appealable.
                          (iv) Combining and dividing of 
                        property.--To the maximum extent 
                        practicable, the Secretary shall 
                        maximize the opportunity for beginning 
                        farmers and ranchers to purchase real 
                        property acquired by the Secretary 
                        under this title by combining or 
                        dividing inventory parcels of the 
                        property in such manner as the 
                        Secretary determines to be appropriate.
                  (C) Public sale.--If no acceptable offer is 
                received from a qualified beginning farmer or 
                rancher under subparagraph (B) not later than 
                [75 days] 135 days after acquiring the real 
                property, the Secretary shall, not later than 
                30 days after the [75-day period] 135-day 
                period, sell the property after public notice 
                at a public sale, and, if no acceptable bid is 
                received, by negotiated sale, at the best price 
                obtainable.
          (2) Previous lease.--In the case of real property 
        acquired before April 4, 1996, that the Secretary 
        leased before April 4, 1996, not later than 60 days 
        after the lease expires, the Secretary shall offer to 
        sell the property in accordance with paragraph (1).
                  (A) Previous lease.--In the case of real 
                property acquired prior to the date of 
                enactment of this subparagraph that the 
                Secretary leased prior to the date of enactment 
                of this subparagraph, not later than 60 days 
                after the lease expires, the Secretary shall 
                offer to sell the property in accordance with 
                paragraph (1).
                  (B) Previously in inventory.--In the case of 
                real property acquired prior to the date of 
                enactment of this subparagraph that the 
                Secretary has not leased, not later than 60 
                days after the date of enactment of this 
                subparagraph, the Secretary shall offer to sell 
                the property in accordance with paragraph (1).
          (3) Interest.--
                  (A) In general.--Subject to [subparagraph 
                (B)] subparagraphs (B) and (C), any conveyance 
                of real property under this subsection shall 
                include all of the interest of the United 
                States in the property, including mineral 
                rights.
                  (B) Conservation.--The Secretary may for 
                conservation purposes grant or sell an 
                easement, restriction, development right, or 
                similar legal right to real property to a 
                State, a political subdivision of a State, or a 
                private nonprofit organization separately from 
                the underlying fee or other rights to the 
                property owned by the United States.
                  (C) Offer to sell or grant for farmland 
                preservation.--For the purpose of farmland 
                preservation, the Secretary shall--
                          (i) in consultation with the State 
                        Conversationist of each State in which 
                        inventory property is located, identify 
                        each parcel of inventory property in 
                        the State that should be preserved for 
                        agricultural use; and
                          (ii) offer to sell or grant an 
                        easement, restriction, development 
                        right, or similar legal right to each 
                        parcel identified under clause (i) to a 
                        State, a political subdivision of a 
                        State, or a private nonprofit 
                        organization separately from the 
                        underlying fee or other rights to the 
                        property owned by the United States.
          (4) Other law.--The Federal Property and 
        Administrative Services Act of 1949 (40 U.S.C. 471 et 
        seq.) shall not apply to any exercise of authority 
        under this title.

           *       *       *       *       *       *       *

    Sec. 343. (a) As used in this title:
          (1) The term ``farmer'' includes a person who is 
        engaged in, or who, with assistance afforded under this 
        title, intends to engage in, fish farming.

           *       *       *       *       *       *       *

                                          (aa) materially and 
                                        substantially 
                                        participate in the 
                                        operation of the farm 
                                        or ranch; and
                                          (bb) provide 
                                        substantial day-to-day 
                                        labor and management of 
                                        the farm or ranch, 
                                        consistent with the 
                                        practices in the State 
                                        or county in which the 
                                        farm or ranch is 
                                        located; or
                                  (II) (aa) in the case of a 
                                loan made to a cooperative, 
                                corporation, partnership, or 
                                joint operation, will have 
                                members, stockholders, 
                                partners, or joint operators, 
                                materially and substantially 
                                participate in the operation of 
                                the farm or ranch; and
                                  (bb) in the case of a loan 
                                made to a corporation, has 
                                stockholders, all of whom are 
                                qualified beginning farmers or 
                                ranchers;
                  (E) who agrees to participate in such loan 
                assessment, borrower training, and financial 
                management programs as the Secretary may 
                require;
                  (F) who does not own land or who, directly or 
                through interests in family farm corporations, 
                owns land, the aggregate acreage of which does 
                not exceed [25 percent] 30 percent of the 
                median acreage of the farms or ranches, as the 
                case may be, in the county in which the farm or 
                ranch operations of the applicant are located, 
                as reported in the most recent census of 
                agriculture taken under section 142 of title 
                13, United States Code, except that this 
                subparagraph shall not apply to a loan made or 
                guaranteed under subtitle B; and
                  (G) who demonstrates that the available 
                resources of the applicant and spouse (if any) 
                of the applicant are not sufficient to enable 
                the applicant to continue farming or ranching 
                on a viable scale.
          (12) Debt forgiveness.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the term ``debt forgiveness'' 
                means reducing or terminating a farmer program 
                loan made or guaranteed under this title, in a 
                manner that results in a loss to the Secretary, 
                through--
                          (i) writing down or writing off a 
                        loan under section 353;
                          (ii) compromising, adjusting, 
                        reducing, or charging-off a debt or 
                        claim under section 331;
                          (iii) paying a loss on a guaranteed 
                        loan under section 357; or
                          (iv) discharging a debt as a result 
                        of bankruptcy.
                  [(B) Loan restructuring.--The term ``debt 
                forgiveness'' does not include consolidation, 
                rescheduling, reamortization, or deferral.]
                  (B) Exceptions.--The term ``debt 
                forgiveness'' does not include--
                          (i) consolidation, rescheduling, 
                        reamortization, or deferral of a loan; 
                        or
                          (ii) any write-down provided as part 
                        of a resolution of a discrimination 
                        complaint against the Secretary.

           *       *       *       *       *       *       *

    Sec. 346. (a) Effective October 1, 1979, the aggregate 
principal amount of loans under the programs authorized under 
each subtitle of this title during each three-year period 
thereafter shall not exceed such amounts as may be authorized 
by law after the date of enactment of this section. There shall 
be two amounts so established for each of such programs and for 
any maximum levels provided in appropriation Acts for the 
programs authorized under this title, one against which direct 
and insured loans shall be charged and the other against which 
guaranteed loans shall be charged.
    (b) Authorization for Loans.--
          [(1) In general.--The Secretary may make or guarantee 
        loans under subtitles A and B from the Agricultural 
        Credit Insurance Fund provided for in section 309 in 
        not more than the following amounts:]
          (1) In general.--The Secretary may make or guarantee 
        loans under subtitles A and B from the Agricultural 
        Credit Insurance Fund provided for in section 309 for 
        not more than $3,750,000,000 for each of fiscal years 
        2002 through 2006, of which, for each fiscal year--
                  (A) $750,000,000 shall be for direct loans, 
                of which--
                          (i) $2000,000,000 shall be for farm 
                        ownership loans under subtitle A; and
                          (ii) $550,000,000 shall be for 
                        operating loans under subtitle B; and
                  (B) $3,000,000,000 shall be for guaranteed 
                loans, of which--
                          (i) $1,000,000,000 shall be for 
                        guarantees of farm ownership loans 
                        under subtitle A; and
                          (ii) $2,000,000,000 shall be for 
                        guarantees of operating loans under 
                        subtitle B.
                  (A) Fiscal year 1996.--For fiscal year 1996, 
                $3,085,000,000, of which--
                          (i) $585,000,000 shall be for direct 
                        loans, of which--
                                  (I) $85,000,000 shall be for 
                                farm ownership loans under 
                                subtitle A; and

           *       *       *       *       *       *       *

                          (i) Farm ownership loans.--
                                  (I) In general.--Of the 
                                amounts made available under 
                                paragraph (1) for direct farm 
                                ownership loans, the Secretary 
                                shall reserve 70 percent for 
                                qualified beginning farmers and 
                                ranchers.
                                  (II) Down payment loans.--Of 
                                the amounts reserved for a 
                                fiscal year under subclause 
                                (I), the Secretary shall 
                                reserve 60 percent for the down 
                                payment loan program under 
                                section 310E until April 1 of 
                                the fiscal year.
                          (ii) Operating loans.--Of the amounts 
                        made available under paragraph (1) for 
                        direct operating loans, the Secretary 
                        shall reserve for qualified beginning 
                        [farmers and ranchers--
                                  [(I) for each of fiscal years 
                                1996 through 1998, 25 percent;
                                  [(II) for fiscal year 1999, 
                                30 percent; and
                                  [(III) for each of fiscal 
                                years 2000 through 2002, 35 
                                percent] farmers and ranchers 
                                35 percent for each of fiscal 
                                years 2002 through 2007.
                          (iii) Funds reserved until september 
                        1.--Except as provided in clause 
                        (i)(II), funds reserved for qualified 
                        beginning farmers or ranchers under 
                        this subparagraph for a fiscal year 
                        shall be reserved only until September 
                        1 of the fiscal year.
                  (B) Guaranteed loans.--

           *       *       *       *       *       *       *

    Sec. 350. Notwithstanding any other provision of this 
title, the Secretary shall ensure that farm loan guarantee 
programs carried out under this title are designed so as to be 
responsive to borrower and lender needs and to include 
provisions under reasonable terms and conditions for advances, 
before completion of the liquidation process, of guarantee 
proceeds on loans in default.

SEC. 351. INTEREST RATE REDUCTION PROGRAM.

    (a) Establishment of [Program.--
          (1) [In general.--The Secretary] Program._The 
        Secretary shall establish and carry out in accordance 
        with this section an interest rate reduction program 
        for loans guaranteed under this title.
          [(2) Termination of authority.--The authority 
        provided by this subsection shall terminate on 
        September 30, 2002.]
    (b) Under such program, the Secretary shall enter into a 
contract with, and make payments to, a legally organized 
institution to reduce during the term of such contract the 
interest rate paid by a borrower on a guaranteed loan made by 
such institution if--
          (1) the borrower--
                  (A) is unable to obtain sufficient credit 
                elsewhere to finance the actual needs of the 
                borrower at reasonable rates and terms, taking 
                into consideration private and cooperative 
                rates and terms for a loan for a similar 
                purpose and period of time in the community in 
                or near which the borrower resides;
                  (B) is otherwise unable to make payments on 
                such loan in a timely manner; and
                  (C) has a total estimated cash income during 
                the 24-month period beginning on the date such 
                contract is entered into (including all farm 
                and nonfarm income) that will equal or exceed 
                the total estimated cash expenses to be 
                incurred by the borrower during such period 
                (including all farm and nonfarm expenses); and
          (2) the lender reduces during the term of such 
        contract the annual rate of interest payable on such 
        loan by a minimum percentage specified in such 
        contract.
    [(c) In return for a contract entered into by a lender 
under subsection (b) for the reduction of the interest rate 
paid on a loan, the Secretary shall make payments to the lender 
in an amount equal to not more than 100 percent of the cost of 
reducing the annual rate of interest payable on such loan, 
except that such payments may not exceed the cost of reducing 
such rate by more than 4 percent.]
    (c) Amount of Interest Rate Reduction.--
          (1) In general.--In return for a contract entered 
        into by a lender under subsection (b) for the reduction 
        of the interest rate paid on a loan, the Secretary 
        shall make payments to the lender in an amount equal to 
        not more than 100 percent of the cost of reducing the 
        annual rate of interest of interest payable on the 
        loan, except that such payments shall not exceed the 
        cost of reducing the rate by more than--
                  (A) in the case of a borrower other than a 
                beginning farmer or rancher, 3 percent; and
                  (B) in the case of a beginning farmer or 
                rancher, 4 percent.
          (2) Beginning farmers and ranchers.--The percentage 
        reduction of the interest rate for which payments are 
        authorized to be made for a beginning farmer or rancher 
        under paragraph (1) shall be 1 percent more than the 
        percentage reduction for farmers and ranchers that are 
        not beginning farmers or ranchers.
    (d) The term of a contract entered into under this section 
to reduce the interest rate on a guaranteed loan may not exceed 
the outstanding term of such loan.
    (e)(1) Notwithstanding any other provision of this title, 
the Agricultural Credit Insurance Fund established under 
section 309 may be used by the Secretary to carry out this 
section.
    [(2) The total amount of funds used by the Secretary to 
carry out this section may not exceed $490,000,000.]
    (2) Maximum amount of funds.--
          (A) In general.--The total amount of funds used by 
        the Secretary to carry out this section for a fiscal 
        year shall not exceed $750,000,000.
          (B) Beginning farmers and ranchers.--
                  (i) In general.--The Secretary shall reserve 
                not less than 25 percent of the funds used by 
                the Secretary under subparagraph (A) to make 
                payments for guaranteed loans made to beginning 
                farmers and ranchers.
                  (ii) Duration of reservation of funds.--Funds 
                reserved for beginning farmers or ranchers 
                under clause (i) for a fiscal year shall be 
                reserved only until April 1 of the fiscal year.
    (f) The Secretary shall make available to farmers, on 
request, a list of lenders in the area that participate in 
guaranteed farm loan programs and other lenders in the area 
that express a desire to participate in such programs and that 
request inclusion in the list.
    (g) Notwithstanding any other provision of law, each 
contract of guarantee on a farm loan entered into under this 
title after the date of the enactment of this subsection shall 
contain a condition that the lender of the guaranteed loan may 
not initiate foreclosure action on the loan until 60 days after 
a determination is made with respect to the eligibility of the 
borrower thereof to participate in the program under this 
section.

           *       *       *       *       *       *       *


SEC. 353. DEBT RESTRUCTURING AND LOAN SERVICING.

    (a) In General.--The Secretary shall modify delinquent 
farmer program loans made or insured under this title, or 
purchased from the lender or the Federal Deposit Insurance 
Corporation under section 309B, to the maximum extent 
possible--

           *       *       *       *       *       *       *

    (e) Shared Appreciation Arrangements.--
          (1) In general.--As a condition of restructuring a 
        loan in accordance with this section, the borrower of 
        the loan may be required to enter into a shared 
        appreciation arrangement that requires the repayment of 
        amounts written off or set aside.
          (2) Terms.--Shared appreciation agreements shall have 
        a term not to exceed 10 years, and shall provide for 
        recapture based on the difference between the appraised 
        values of the real security property at the time of 
        restructuring and at the time of recapture.
          (3) Percentage of recapture.--The amount of the 
        appreciation to be recaptured by the Secretary shall be 
        75 percent of the appreciation in the value of such 
        real security property if the recapture occurs within 4 
        years of the restructuring, and 50 percent if the 
        recapture occurs during the remainder of the term of 
        the agreement.
          (4) Time of recapture.--Recapture shall take place at 
        the end of the term of the agreement, or sooner--
                  (A) on the conveyance of the real security 
                property;
                  (B) on the repayment of the loans; or
                  (C) if the borrower ceases farming 
                operations.
          (5) Transfer of title.--Transfer of title to the 
        spouse of a borrower on the death of such borrower 
        shall not be treated as a conveyance for the purpose of 
        paragraph (4).
          (6) Notice of recapture.--Beginning with fiscal year 
        2000 not later than 12 months before the end of the 
        term of a shared appreciation arrangement, the 
        Secretary shall notify the borrower involved of the 
        provisions of the arrangement.
          [(7) Financing of recapture payment.--]
          (7) Options for satisfaction of obligation to pay 
        recapture amount.--
                  [(A) In general.--The Secretary may amortize 
                a recapture payment owed to the Secretary under 
                this subsection.
                  [(B) Term.--The term of an amortization under 
                this paragraph may not exceed 25 years.
                  [(C) Interest rate.]
                          (i) In general.--The Secretary may 
                        amortize a recapture payment owed to 
                        the Secretary under this subsection.
                          (ii) Term.--The term of an 
                        amortization under this paragraph may 
                        not exceed 25 years.
                          (iii) Interest rate.--
                  (A) In general.--As an alternative to 
                repaying the full recapture amount at the end 
                of the term of the shared appreciation 
                agreement (as determined by the Secretary in 
                accordance with this subsection), a borrower 
                may satisfy the obligation to pay the amount of 
                recapture by--
                          (i) financing the recapture payment 
                        in accordance with subparagraph (B); or
                          (ii) granting the Secretary an 
                        agricultural use protection and 
                        conservation easement on the property 
                        subject to the shared appreciation 
                        agreement in accordance with 
                        subparagraph (C).
                  (B) Financing of recapture payment.--''; and
          (4) by adding at the end the following:
                  (C) Agricultural use protection and 
                conservation easement.--
                          (i) In general.--Subject to clause 
                        (iii), the Secretary shall accept an 
                        agricultural use protection and 
                        conservation easement from the borrower 
                        for all of the real security property 
                        subject to the shared appreciation 
                        agreement in lieu of payment of the 
                        recapture amount.
                          (ii) Term.--The term of an easement 
                        accepted by the Secretary under this 
                        subparagraph shall be 25 years.
                          (iii) Conditions.--The easement shall 
                        require that the property subject to the 
                        easement shall continue to be used or 
                        conserved for agricultural and conservation 
                        uses in accordance with sound farming and 
                        conservation practices, as determined by 
                        the Secretary.
                          (iv) Replacement of method of 
                        satisfying obligation.--A borrower that 
                        has begun financing of a recapture 
                        payment under subparagraph (B) may 
                        replace that financing with an 
                        agricultural use protection and 
                        conservation easement under this 
                        subparagraph.
                                  [(i)] (I) In general.--The 
                                interest rate applicable to an 
                                amortization under this 
                                paragraph may not exceed the 
                                rate applicable to a loan to 
                                reacquire homestead property 
                                less 100 basis points.
                                  [(ii)] (II) Existing 
                                amortizations and loans.--The 
                                interest rate applicable to an 
                                amortization or loan made by 
                                the Secretary before the date 
                                of enactment of this paragraph 
                                to finance a recapture payment 
                                owed to the Secretary under 
                                this subsection may not exceed 
                                the rate applicable to a loan 
                                to reacquire homestead property 
                                less 100 basis points.
    (f) Determination To Restructure.--If the appeal process 
results in a determination that a loan is eligible for 
restructuring, the Secretary shall restructure the loan in the 
manner consistent with this section, taking into consideration 
the restructuring recommendations, if any, of the appeals 
officer.

           *       *       *       *       *       *       *


SEC. 359. BORROWER TRAINING.

    (a) In General.--The Secretary shall enter into contracts 
to provide educational training to all borrowers of farmer 
program direct loans made under this title in financial and 
farm management concepts associated with commercial farming.

           *       *       *       *       *       *       *

    (e) Payment.--A borrower shall pay for training received 
under this section, and may use funds from operating loans made 
under subtitle B to pay for the training.
    [(f) Waivers.--The Secretary may waive the requirements of 
this section for an individual borrower on a determination by 
the county committee that the borrower demonstrates adequate 
knowledge in areas described in this section.]
    (f) Waivers.--
          (1) In general.--The Secretary may waive the 
        requirements of this section for an individual borrower 
        if the Secretary determines that the borrower 
        demonstrates adequate knowledge in areas described in 
        this section.
          (2) Criteria.--The Secretary shall establish criteria 
        providing for the application of paragraph (1) 
        consistently in all counties nationwide.

           *       *       *       *       *       *       *


                        FARM CREDIT ACT OF 1971

           *       *       *       *       *       *       *



SEC. 1.12. RELATED SERVICES.

    (a) In General.--The Farm Credit Banks may provide 
technical assistance to borrowers, members, and applicants from 
the bank and associations in the district, including persons 
obligated on paper discounted by the bank, and may make 
available to them at their option such financial related 
services appropriate to their on-farm and aquatic operations as 
determined to be feasible by the board of directors of the 
bank, under regulations of the Farm Credit Administration.
    (b) Authority To Pass Along Cost of Insurance Premiums.--
Each Farm Credit Bank may assess each production credit 
association, other association making direct loans under the 
authority provided under section 7.6, and other financing 
institution described in section 1.7(b)(1)(B) in the district 
in which the bank is located to cover the costs of making 
premium payments under part E of title V. The assessment of any 
such association or other financing institution for any 
calendar year shall be computed on the same basis as is used to 
compute the premium payment and shall not exceed the sum of--
          (1) the annual average principal outstanding for such 
        year on loans made by the association, or on loans made 
        by the other financing institution and funded by or 
        discounted with the Farm Credit Bank, that are in 
        accrual status, excluding the guaranteed portions of 
        government-guaranteed loans (as defined in section 
        5.55(a)(3)) provided for in paragraph (3) and 
        Government Sponsored Enterprised-guaranteed loans (as 
        defined in section 5.55(a)(4)) provided for in 
        paragraph (4), multiplied by 0.0015;
          (2) the annual average principal outstanding for such 
        year on loans made by the association, or on loans made 
        by the other financing institution and funded by or 
        discounted with the Farm Credit Bank, that are in 
        nonaccrual status, multiplied by 0.0025; [and]
          (3)(A) the annual average principal outstanding for 
        such year on the guaranteed portions of Federal 
        government-guaranteed loans (as so defined) made by the 
        association, or by the other financing institution and 
        funded by or discounted with the Farm Credit Bank, that 
        are in accrual status, multiplied by 0.00015;
          (B) the annual average principal outstanding for such 
        year on the guaranteed portions of State government-
        guaranteed loans (as so defined) made by the 
        association, or by the other financing institution 
        and funded by or discounted with the Farm Credit Bank, 
        that are in accrual status, multiplied by 0.0003. ; and;
          (4) the annual average principal outstanding for such 
        year on the guaranteed portions of Government Sponsored 
        Enterprise-guaranteed loans (as so defined) made by the 
        association, or by the other financing institution and 
        funded by or discounted with the Farm Credit Bank, that 
        are in accrual status, multiplied by the factor, not to 
        exceed 0.0015, determined by the Corporation for the 
        purpose of setting the premium for such guaranteed 
        portions of loans under section 5.55(a)(1)(D).

           *       *       *       *       *       *       *

    Sec. 3.1. Corporate Existence; General Corporate Powers.--
Each bank for cooperatives shall be a body corporate and, 
subject to regulation by the Farm Credit Administration, shall 
have power to--

           *       *       *       *       *       *       *

          (11)(A) Participate in loans under this title with 
        one or more other banks for cooperatives and with 
        commercial banks and other financial institutions upon 
        such terms as may be agreed among them, and participate 
        with one or more other Farm Credit System institutions 
        in loans made under this title or other titles of this 
        Act on the basis prescribed in section 4.18 of this 
        Act.
          (B)(i) Participate in any loan of a type otherwise 
        authorized under this title that is made to a similar 
        entity by any institution in the business of extending 
        credit, including purchases of participations in loans 
        to finance international trade transactions involving 
        the sale of agricultural commodities or the products 
        thereof, except that--
                  (I) a bank for cooperatives may not 
                participate in a loan--
                          (aa) if the participation would cause 
                        the total amount of all loan 
                        participations by the bank under this 
                        subparagraph involving a single credit 
                        risk to exceed 10 percent of the bank's 
                        total capital; or
                          (bb) if the participation by the bank 
                        will itself equal or exceed 50 percent 
                        of the principal of the loan or, when 
                        taken together with participations in 
                        the loan by other Farm Credit System 
                        institutions, will cause the cumulative 
                        amount of the participations by all 
                        Farm Credit System institutions in the 
                        loan to equal or exceed 50 percent of 
                        the principal of the loan;
                  (II) a bank for cooperatives may not 
                participate in a loan to a similar entity under 
                this subparagraph if the similar entity has a 
                loan or loan commitment outstanding with a Farm 
                Credit Bank or an association chartered under 
                this Act, unless agreed to by the Bank or 
                association; and
                  (III) the cumulative amount of participations 
                that a bank for cooperatives may have 
                outstanding under this subparagraph at any time 
                may not exceed 15 percent of the bank's total 
                assets.
                  (ii) As used in this subparagraph, the term 
                ``similar entity'' means an entity that, while 
                not eligible for a loan under section 3.8, is 
                functionally similar to an entity eligible for 
                a loan under section 3.8 in that it derives a 
                majority of its income from, or has a majority 
                of its assets invested in, the conduct of 
                activities functionally similar to those 
                conducted by the entity.
          [(iii) With respect to similar entities that are 
        eligible to borrow from a Farm Credit Bank or 
        association under title I or II, the authority of a 
        bank for cooperatives to participate in loans to the 
        entities under this subparagraph shall be subject to 
        the prior approval of the Farm Credit Bank or Banks in 
        whose chartered territory the entity is eligible to 
        borrow. The approval may be granted on an annual basis 
        and under such terms and conditions as may be agreed on 
        between the bank for cooperatives and the Farm Credit 
        Bank or Banks that serve the territory.
          [(iv)] (iii) As used in this subparagraph, the term 
        ``participate'' or ``participation'' refers to 
        multilender transactions, including syndications, 
        assignments, loan participations, subparticipations, or 
        other forms of the purchase, sale, or transfer of 
        interests in loans, other extensions of credit, or 
        other technical and financial assistance.

           *       *       *       *       *       *       *

    Sec. 3.7. Lending Power.--(a) The banks for cooperatives 
are authorized to make loans and commitments to eligible 
cooperative associations and to extend to them other technical 
and financial assistance at any time (whether or not they have 
a loan from the bank outstanding), including but not limited to 
discounting notes and other obligations, guarantees, currency 
exchange necessary to service individual transactions that may 
be financed under subsection (b) of this section, collateral 
custody, or participation with other banks for cooperatives and 
commercial banks or other financial institutions in loans to 
eligible cooperatives, under such terms and conditions as may 
be determined to be feasible by the board of directors of each 
bank for cooperatives under regulations of the Farm Credit 
Administration. Such regulations may include provisions for 
avoiding duplication between the Central Bank and district 
banks for cooperatives. Each bank may own and lease, or lease 
with option to purchase, to stockholders eligible to borrow 
from the bank equipment needed in the operations of the 
stockholder and may make or participate in loans or commitments 
and extend other technical and financial assistance to other 
domestic parties for the acquisition of equipment and 
facilities to be leased to such stockholders for use in their 
operations in the United States.
    (b)(1) A bank for cooperatives is authorized to make or 
participate in loans and commitments to, and to extend other 
technical and financial assistance to a domestic or foreign 
party with respect to its transactions with an association that 
is a voting stockholder of the bank for the import of 
agricultural commodities or products thereof, [farm supplies] 
agricultural supplies, or aquatic products through purchases, 
sales or exchanges, if the bank for cooperatives determines, 
under regulations of the Farm Credit Administration, that the 
voting stockholder will benefit substantially as a result of 
such loan, commitment, or assistance.
    (2)(A) A bank for cooperatives may make or participate in 
loans and commitments to, and extend other technical and 
financial assistance to--
          (i) any domestic or foreign party for the export, 
        including (where applicable) the cost of freight, of 
        agricultural commodities or products thereof, [farm 
        supplies] agricultural supplies, or aquatic products 
        from the United States under policies and procedures 
        established by the bank to ensure that the commodities, 
        products, or supplies are originally sourced, where 
        reasonably available, from one or more eligible 
        cooperative associations described in section 3.8(a) on 
        a priority basis, except that if the total amount of 
        the balances outstanding on loans made by a bank under 
        this clause that--
                  (I) are made to finance the export of 
                commodities, products, or supplies that are not 
                originally sourced from a cooperative, and

           *       *       *       *       *       *       *

    (f) The banks for cooperatives may, for the purpose of 
installing, maintaining, expanding, improving, or operating 
water and waste disposal facilities in rural areas, make and 
participate in loans and commitments and extending other 
technical and financial assistance to--
          (1) cooperatives formed specifically for the purpose 
        of establishing or operating such facilities; and
          (2) public and quasi-public agencies and bodies, and 
        other public and private entities that, under authority 
        of State or local law, establish or operate such 
        facilities.
For purposes of this subsection, the term ``rural area'' means 
all territory of a State that is not within the outer boundary 
of any city or town having a population of more than 20,000 
based on the latest decennial census of the United States.
          (4) Definition of agricultural supply.--In this 
        subsection, the term `agricultural supply' includes--
                  (A) a farm supply; and
                  (B)(i) agriculture-related processing 
                equipment;
                  (ii) agriculture-related machinery; and
                  (iii) other capital goods related to the 
                storage or handling of agricultural commodities 
                or products.

           *       *       *       *       *       *       *


SEC. 4.18A. AUTHORITY OF FARM CREDIT BANKS AND DIRECT LENDER 
                    ASSOCIATIONS TO PARTICIPATE IN LOANS TO SIMILAR 
                    ENTITIES FOR RISK MANAGEMENT PURPOSES.

    (a) Definitions.--As used in this section:
          (1) Participate and participation.--The terms 
        ``participate'' and ``participation'' shall have the 
        meaning provided in section [3.11(11)(B)(iv)] 
        3.11(11)(B)(iii).
          (2) Similar entity.--The term ``similar entity'' 
        means a person that--

           *       *       *       *       *       *       *

          (3) the participation would cause the cumulative 
        amount of participations that the Farm Credit Bank or 
        association has outstanding under this section to 
        exceed 15 percent of the total assets of the Farm 
        Credit Bank or association; or
          (4) the loan is of the type authorized under section 
        1.11(b) or 2.4(a)(2).
    [(c) Prior Approval Required.--]

           *       *       *       *       *       *       *


SEC. 5.55. PREMIUMS.

    (a) Amount in Fund Not Exceeding Secure Base Amount.--
          (1) In general.--If at the end of any calendar year 
        the aggregate of amounts in the Farm Credit Insurance 
        Fund does not exceed the secure base amount, subject to 
        paragraph (2), the annual premium due from any insured 
        System bank for the calendar year shall be equal to the 
        sum of--
                  (A) the annual average principal outstanding 
                for such year on loans made by the bank that 
                are in accrual status, excluding the guaranteed 
                portions of [government-guaranteed loans 
                provided for in subparagraph (C)] loans 
                provided for in subparagraphs (C) and (D), 
                multiplied by 0.0015;
                  (B) the annual average principal outstanding 
                for such year on loans made by the bank that 
                are in nonaccrual status, multiplied by 0.0025; 
                [and]
                  (C)(i) the annual average principal 
                outstanding for such year on the guaranteed 
                portions of Federal Government-guaranteed loans 
                made by the bank that are in accrual status, 
                multiplied by 0.00015; and
                  (ii) the annual average principal outstanding 
                for such year on the guaranteed portions of 
                State government-guaranteed loans made by the 
                bank that are in accrual status, multiplied by 
                0.0003. ; and
                  (D) the annual average principal outstanding 
                for such year on the guaranteed portions of 
                Government Sponsored Enterprise-guaranteed 
                loans made by the bank that are in accrual 
                status, multiplied by a factor, not to exceed 
                0.0015, determined by the Corporation at the 
                sole discretion of the Corporation.
          (2) Reduced premiums.--The Corporation, in the sole 
        discretion of the Corporation, may reduce by a 
        percentage uniformly applied to all insured System 
        banks the annual premium due from each insured System 
        bank during any calendar year, as determined under 
        paragraph (1).

           *       *       *       *       *       *       *

          (3) Annual allocations.--If, at the end of any 
        calendar year, the aggregate of the amounts in the Farm 
        Credit Insurance Fund exceeds the average secure base 
        amount for the calendar year (as calculated on an average 
        daily balance basis), the Corporation shall allocate to the 
        Allocated Insurance Reserves Accounts the excess amount 
        less the amount that the Corporation, in its sole discretion, 
        determines to be the sum of the estimated operating expenses 
        and estimated insurance obligations of the Corporation for 
        the immediately succeeding calendar year.
          (4) Allocation formula.--From the total amount 
        required to be allocated at the end of a calendar year 
        under paragraph (3)--
                  (A) 10 percent of the total amount shall be 
                credited to the Allocated Insurance Reserves 
                Account established under paragraph (1)(B), 
                subject to paragraph (6)(C); and
                  (B) there shall be credited to the Allocated 
                Insurance Reserves Account of each insured 
                System bank an amount that bears the same ratio 
                to the total amount (less any amount credited 
                under subparagraph (A)) as the average 
                principal outstanding for the 3-year period 
                ending on the end of the calendar year on loans 
                made by the bank that are in accrual status 
                bears to the average principal outstanding for 
                the 3-year period ending on the end of the 
                calendar year on loans made by all insured 
                System banks that are in accrual status 
                (excluding, in each case, the guaranteed 
                portions of [government-guaranteed loans 
                described in subsection (a)(1)(C))] loans 
                described in subparagraph (C) or (D) of 
                subsection (a)(1).
          (5) Use of funds in allocated insurance reserves 
        accounts.--To the extent that the sum of the operating 
        expenses of the Corporation and the insurance 
        obligations of the Corporation for a calendar year 
        exceeds the sum of operating expenses and insurance 
        obligations determined under paragraph (3) for the 
        calendar year, the Corporation shall cover the expenses 
        and obligations by--

           *       *       *       *       *       *       *

                          (i) the total of the amounts that 
                        would have been paid if payments under 
                        subparagraph (A) had been authorized to 
                        begin, under the same terms and 
                        conditions, in the first calendar year 
                        beginning more than 5 years after the 
                        date on which the aggregate of the 
                        amounts in the Farm Credit Insurance 
                        Fund exceeds the secure base amount, 
                        and to continue through the 2 
                        immediately subsequent years;
                          (ii) interest earned on any amounts 
                        that would have been paid as described 
                        in clause (i) from the date on which 
                        the payments would have been paid as 
                        described in clause (i); and
                          (iii) the payment to be made in the 
                        initial year described in subparagraph 
                        (A), based on the amount in each 
                        Account after subtracting the amounts 
                        to be paid under clauses (i) and (ii).
          (4) Definition of government sponsored enterprise-
        guaranteed loan.--In this section and sections 1.12(b) 
        and 5.56(a), the term ``Government Sponsored 
        Enterprise-guaranteed loan'' means a loan or credit, or 
        portion of a loan or credit, that is guaranteed by an 
        entity that is chartered by Congress to serve a public 
        purpose and the debt obligations of which are not 
        explicitly guaranteed by the United States, including 
        the Federal National Mortgage Association, the Federal 
        Home Loan Mortgages Corporation, the Federal Home Loan 
        Bank System, and the Federal Agricultural Mortgage 
        Corporation, but not including any other institution of 
        the Farm Credit System.

           *       *       *       *       *       *       *


SEC. 5.56. CERTIFICATION OF PREMIUMS.

    (a) Filing Certified Statement.--Annually, on a date to be 
determined in the sole discretion of the Board of Directors, 
each insured System bank that became insured before the 
beginning of the year shall file with the Corporation a 
certified statement showing--
          (1) the annual average principal outstanding on loans 
        made by the bank that are in accrual status, including 
        the nonguaranteed portions of government-guaranteed 
        loans and Government Sponsored Enterprise-guaranteed 
        loans;
          (2) the annual average principal outstanding on the 
        guaranteed portion of Federal Government-guaranteed 
        loans (as defined in section 5.55(a)(3)) that are in 
        accrual status;
          (3) the annual average principal outstanding on State 
        government-guaranteed loans (as defined in section 
        5.55(a)(3)) that are in accrual status;
          (4) the annual average principal outstanding on the 
        guaranteed portions of Government Sponsored Enterprise-
        guaranteed loans (as defined in section 5.55(a)(4)) 
        that are in accrual status;
          (5) the annual average principal outstanding on loans 
        that are in nonaccrual status; and
          (6) the amount of the premium due the Corporation 
        from the bank for the year.
    (b) Contents and Form of Statement.--The certified 
statement required to be filed with the Corporation under 
subsection (a) shall be in such form and set forth such 
supporting information as the Board of Directors shall 
prescribe, and shall be certified by the president of the bank 
or any other officer designated by its board of directors that 
to the best of the person's knowledge and belief the statement 
is true, correct, complete, and has been prepared in accordance 
with this part and all regulations issued thereunder.
    (c) Initial Premium Payment.--Each System bank shall pay to 
the Corporation the amount of the initial premium it is 
required to certify under subsection (a) as soon as practicable 
after January 1, 1990, based on the application of section 5.55 
to the accruing loan volume of the bank for calendar year 1989.
    (d) Subsequent Premium Payments.--The premium payments 
required from insured System banks under subsection (a) shall 
be made not less frequently than annually in such manner and at 
such time or times as the Board of Directors shall prescribe, 
except that the amount of the premium shall be established not 
later than 60 days after filing the certified statement setting 
forth the amount of the premium.
    (e) Regulations.--The Board of Directors shall prescribe 
all rules and regulations necessary for theenforcement of this 
section. The Board of Directors may limit the retroactive effect, if 
any, of any of its rules or regulations.

           *       *       *       *       *       *       *


SEC. 8.2. BOARD OF DIRECTORS.

    (a) Interim Board.--

           *       *       *       *       *       *       *

    (b) Permanent Board.--
          (1) Establishment.--Immediately after the date that 
        banks, other financial institutions or entities, 
        insurance companies, and System institutions have 
        subscribed and fully paid for at least $20,000,000 of 
        common stock of the Corporation, the Corporation shall 
        arrange for the election and appointment of a permanent 
        board of directors. After the termination of the 
        interim board, the Corporation shall be under the 
        management of the permanent board.
          (2) Composition.--The permanent board shall consist 
        of [15] 17 members, of which--
                  (A) 5 members shall be elected by holders of 
                [common stock that are insurance companies, 
                banks, or other financial institutions or 
                entities] Class B voting common stock;
                  (B) 5 members shall be elected by holders of 
                common stock that are Farm Credit System 
                institutions; and
                  (C) 2 members shall be elected by holders of 
                Class A voting common stock and Class B voting 
                common stock, 1 of whom shall be the chief 
                executive officer of the Corporation and 1 of 
                whom shall be another executive officer of the 
                Corporation; and
                  (D) 5 members shall be appointed by the 
                President, by and with the advice and consent 
                of the Senate--
                          (i) which members shall not be, or 
                        have been, officers or directors of any 
                        financial institutions or entities;
                          (ii) which members shall be 
                        representatives of the general public;
                          (iii) of which members not more than 
                        3 shall be members of the same 
                        political party; and
                          (iv) of which members at least 2 
                        shall be experienced in farming or 
                        ranching.
          (3) Presidential appointees.--The President shall 
        appoint the members of the permanent board referred to 
        in paragraph [(2)(C)] (2)(D) not later than the later 
        of--
                  (A) the date referred to in paragraph (1); or
                  (B) the expiration of the 270-day period 
                beginning on the date of the enactment of this 
                title.
          (4) Vacancy.--
                  (A) Elected members.--Subject to paragraph 
                (6), a vacancy among the members elected to the 
                permanent board in the manner described in 
                subparagraph [(A) or (B)] (A), (B), or (C) of 
                paragraph (2) shall be filled by the permanent 
                board from among persons eligible for election 
                to the position for which the vacancy exists.
                  (B) Appointed members.--A vacancy among the 
                members appointed to the permanent board under 
                paragraph [(2)(C)] (2)(D) shall be filled in 
                the manner in which the original appointment 
                was made.
          (5) Continuation of membership.--If--
                  (A) any member of the permanent board who was 
                appointed or elected to the permanent board 
                from among persons who are executive officers 
                of the Corporations or representatives of 
                banks, other financial institutions or 
                entities, insurance companies, or Farm Credit 
                System institutions ceases to be [such a 
                representative;] such an executive officer or 
                representative; or
                  (B) any member who was appointed from persons 
                who are not or have not been directors or 
                officers of any financial institution or entity 
                becomes a director or an officer of any 
                financial institution or entity; such member 
                may continue as a member for not longer than 
                the 45-day period beginning on the date such 
                member ceases to be such a representative, 
                officer, or employee or becomes such a director 
                or officer, as the case may be.
          (6) Terms.--
                  (A) Appointed members.--The members appointed 
                by the President shall serve at the pleasure of 
                the President.
                  (B) Elected members.--The members elected 
                under subparagraphs [(A) and (B)] (A), (B), and 
                (C) of subsection (b)(2) shall each be elected 
                annually for a term ending on the date of the 
                next annual meeting of the common stockholders 
                of the Corporation and shall serve until their 
                successors are elected and qualified. Any seat 
                on the permanent board that becomes vacant 
                after the annual election of the directors 
                shall be filled by the members of the permanent 
                board from the same category of directors, but 
                only for the unexpired portion of the term.
                  (C) Vacancy appointment.--Any member 
                appointed to fill a vacancy occurring before 
                the expiration of the term for which the 
                predecessor of the member was appointed shall 
                be appointed only for the remainder of such 
                term.
                  (D) Service after expiration of term.--A 
                member may serve after the expiration of the 
                term of the member until the successor of the 
                member has taken office.
          (7) Quorum.--[8 members] Nine members of the 
        permanent board shall constitute a quorum.
          (8) No additional pay for federal officers or 
        employees or executive officers of the corporation.--
        Members of the permanent board who are fulltime 
        officers or employees of the United States or executive 
        officers of the Corporation shall receive no additional 
        pay by reason of service on the permanent board.
          [(9) Chairperson.--The President shall designate 1 of 
        the members of the permanent board who are appointed by 
        the President as the chairperson of the permanent 
        board.]
          (9) Chairperson.--
                  (A) Election.--The permanent board shall 
                annually elect a chairperson from among the 
                members of the permanent board.
                  (B) Term.--The term of the chairperson shall 
                coincide with the term served by elected 
                members of the permanent board under paragraph 
                (6)(B).
          (10) Meetings.--The permanent board shall meet at the 
        call of the chairperson or a majority of its members.
    (c) Officers and Staff.--The Board may appoint, employ, fix 
the pay of, and provide other allowances and benefits for such 
officers and employees of the Corporation as the Board 
determines to be appropriate.

           *       *       *       *       *       *       *


               DEPARTMENT OF AGRICULTURE REORGANIZATION

           *       *       *       *       *       *       *


SEC. 281. CONFORMING AMENDMENTS RELATING TO NATIONAL APPEALS DIVISION.

    (a) Decisions of State, County, and Area Committees.--
          (1) Application of subsection.--[This subsection]
                  (A) In general.--Except as provided in 
                subparagraph (B), this subsection shall apply 
                only with respect to functions of the 
                Consolidated Farm Service Agency or the 
                Commodity Credit Corporation that are under the 
                jurisdiction of a State, county, or area 
                committee established under section 8(b)(5) of 
                the Soil Conservation and Domestic Allotment 
                Act (16 U.S.C. 590h(b)(5)) or an employee of 
                such a committee.
                  (B) Agricultural credit decisions.--This 
                subsection shall not apply with respect to an 
                agricultural credit decision made by such a 
                State, county, or area committee, or employee 
                of such a committee, under the Consolidated 
                Farm and Rural Development Act (7 U.S.C 1921 et 
                seq.).
          (2) Finality.--Each decision of a State, county, or 
        area committee (or an employee of such a committee) 
        covered by paragraph (1) that is made in good faith in 
        the absence of misrepresentation, false statement, 
        fraud, or willful misconduct shall be final not later 
        than 90 days after the date of filing of the 
        application for benefits, unless the decision is--

                                TITLE 6

           *       *       *       *       *       *       *


              CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

           *       *       *       *       *       *       *


    Sec. 306. (a)(1) The Secretary is also authorized to make 
or insure loans to associations, including corporations not 
operated for profit, Indian tribes on Federal and State 
reservations and other federally recognized Indian tribes, and 
public and quasi-public agencies to provide for the application 
or establishment of soil conservation practices, shifts in land 
use, the conservation, development, use, and control of water, 
and the installation or improvement of drainage or waste 
disposal facilities, recreational developments, and essential 
community facilities including necessary related equipment, all 
primarily serving farmers, ranchers, farm tenants, farm 
laborers, rural businesses, and other rural residents, and to 
furnish financial assistance or other aid in planning projects 
for such purposes. The Secretary may also make loans to any 
borrower to whom a loan has been made under the Rural 
Electrification Act of 1936 (7 U.S.C. 901 et seq.), for the 
conservation, development, use, and control of water, and the 
installation of drainage or waste disposal facilities, 
primarily serving farmers, ranchers, farm tenants, farm 
laborers, rural businesses, and other rural residents. When any 
loan made for a purpose specified in this paragraph is sold out 
of the Agricultural Credit Insurance Fund as an insured loan, 
the interest or other income thereon paid to an insured holder 
shall be included in gross income for purposes of chapter 1 of 
the Internal Revenue Code of 1954. With respect to loans of 
less than $500,000 made or insured under this paragraph that 
are evidenced by notes and mortgages, as distinguished from 
bond issues, borrowers shall not be required to appoint bond 
counsel to review the legal validity of the loan whenever the 
Secretary has available legal counsel to perform such review.
    [(2) The] (2) Water, waste disposal, and wastewater 
facility grants._
          (A) Authority._
                  (i) In general._The; Secretary is authorized 
                to make grants aggregating not to exceed 
                [$590,000,000] $1,500,000,000 in any fiscal 
                year to such associations to finance specific 
                projects for works for the development, 
                storage, treatment, purification, or 
                distribution of water or the collection, 
                treatment, or disposal of waste in rural areas.
                  [The amount] (ii) Amount.--The amount of any 
                grant made under the authority of this 
                [paragraph] subparagraph shall not exceed 75 
                per centum of the development cost of the 
                project to serve the area which the association 
                determines can be feasibly served by the 
                facility and to adequately serve the reasonably 
                foreseeable growth needs of the area.
                  [The Secretary shall] (iii) Grant rate.--The 
                Secretary shall fix the grant rate for each 
                project in conformity with regulations issued 
                by the Secretary that shall provide for a 
                graduated scale of grant rates establishing 
                higher rates for projects in communities that 
                have lower community population and income 
                levels.
          (B) Revolving funds for financing water and 
        wastewater projects.--
                  (i) In general.--The Secretary may make 
                grants to qualified private, nonprofit entities 
                to capitalize revolving funds for the purpose 
                of providing loans to eligible borrowers for--
                          (I) predevelopment costs associated 
                        with proposed water and wastewater 
                        projects or with existing water and 
                        wastewater systems; and
                          (II) short-term costs incurred for 
                        replacement equipment, small-scale 
                        extension services, or other small 
                        capital projects that are not part of 
                        the regular operations and maintenance 
                        activities of existing water and 
                        wastewater systems.
                  (ii) Eligible borrowers.--To be eligible to 
                obtain a loan from a revolving fund under 
                clause (i), a borrower shall be eligible to 
                obtain a loan, loan guarantee, or grant under 
                paragraph (1) or this paragraph.
                  (iii) Maximum amount of loans.--The amount of 
                a loan made to an eligible borrower under this 
                subparagraph shall not exceed--
                          (I) $100,000 for costs described in 
                        clause (i) (I); and
                          (II) $100,000 for costs described in 
                        clause (i) (II).
                  (iv) Term.--The term of a loan made to an 
                eligible borrower under this subparagraph shall 
                not exceed 10 years.
                  (v) Administration.--The Secretary shall 
                limit the amount of grant funds that may be 
                used by a grant recipient for administrative 
                costs incurred under this subparagraph.
                  (vi) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this subparagraph $30,000,000 for each of 
                fiscal years 2002 through 2006.
    (3) No grant shall be made under paragraph (2) of this 
subsection in connection with any project unless the Secretary 
determines that the project (i) will serve a rural area which, 
if such project is carried out, is not likely to decline in 
population below that for which the project was designed, (ii) 
is designed and constructed so that adequate capacity will or 
can be made available to serve the present population of the 
area to the extent feasible and to serve the reasonably 
foreseeable growth needs of the area, and (iii) is necessary 
for an orderly community development consistent with a 
comprehensive community water, waste disposal, or other 
development plan of the rural area.
    (4)(A) The term ``development cost'' means the cost of 
construction of a facility and the land, easements, and rights-
of-way, and water rights necessary to the construction and 
operation of the facility.

           *       *       *       *       *       *       *

    (6) The Secretary may make grants aggregating not to exceed 
$30,000,000 in any fiscal year to public bodies or such other 
agencies as the Secretary may determine having authority to 
prepare comprehensive plans for the development of water or 
waste disposal systems in rural areas which do not have funds 
available for immediate undertaking of the preparation of such 
plan.
    [(7)1 Definition of rural and rural areas.--For the purpose 
of water and waste disposal grants and direct and guaranteed 
loans provided under paragraphs (1) and (2), the terms 
``rural'' and `'rural area'' mean a city, town, or 
unincorporated area that has a population of no more than 
10,000 inhabitants.]
    (8) In each instance where the Secretary receives two or 
more applications for financial assistance for projects that 
would serve substantially the same group of residents within a 
single rural area, and one such application is submitted by a 
city, town, county or other unit of general local government, 
he shall, in the absence of substantial reasons to the 
contrary, provide such assistance to such city, town, county or 
other unit of general local government.

           *       *       *       *       *       *       *

          (C) Coordination.--The Secretary shall ensure, to the 
        maximum extent practicable, that assistance provided 
        under this paragraph is coordinated with and delivered 
        in cooperation with similar services or assistance 
        provided to rural residents by the Cooperative State 
        Research, Education, and Extension Service or other 
        Federal agencies.
          (D) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        paragraph $7,500,000 for each of fiscal years 1996 
        through [2002] 2006.
    (12)(A) The Secretary shall, in cooperation with 
institutions eligible to receive funds under theAct of July 2, 
1862 (12 Stat. 503, as amended; 7 U.S.C. 301, 307, and 308), or the Act 
of August 30, 1890 (26 Stat. 417, as amended; 7 U.S.C. 321 and 328), 
including the Tuskegee Institute and State, substate, and regional 
planning bodies, establish a system for the dissemination of 
information and technical assistance on federally sponsored or funded 
programs. The system shall be for the use of institutions eligible to 
receive funds under the Act of July 2, 1862 (12 Stat. 503

           *       *       *       *       *       *       *

    (B) Federal share.--
          (i) In general.--Except as provided in clauses (ii) 
        and (iii), the Secretary shall, by regulation, 
        establish the amount of the Federal share of the cost 
        of the facility under this paragraph.
          (ii) Maximum amount.--The amount of a grant provided 
        under this paragraph for a facility shall not exceed 75 
        percent of the cost of developing the facility.
          (iii) Graduated scale.--The Secretary shall provide 
        for a graduated scale for the amount of the Federal 
        share provided under this paragraph, with higher 
        Federal shares for facilities in communities that have 
        lower community population and income levels, as 
        determined by the Secretary.
    (C) Reservation of funds for senior facilities.--
          (i) In general.--For each fiscal year, not less than 
        12.5 percent of the funds made available to carry out 
        this paragraph shall be reserved for grants to pay the 
        Federal share of the cost of developing and 
        constructing senior facilities, or carrying out other 
        projects that mainly benefit seniors, in rural areas.
          (ii) Release.--Funds reserved under clause (i) for a 
        fiscal year shall be reserved only until April 1 of the 
        fiscal year.
    (D) Reservation of funds for children's day care 
facilities.--
          (i) In general.--For each fiscal year, not less than 
        10 percent of the funds made available to carry out 
        this paragraph shall be reserved for grants to pay the 
        Federal share of the cost of developing and 
        constructing day care facilities for children in rural 
        areas.
          (ii) Release.--Funds reserved under clause (i) for a 
        fiscal year shall be reserved only until April 1 of the 
        fiscal year.
    (20) Community Facilities Grant Program for Rural 
Communities With Extreme Unemployment and Severe Economic 
Depression.--

           *       *       *       *       *       *       *

          (C) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        paragraph $50,000,000 for fiscal year 2001 and such 
        sums as are necessary for each subsequent fiscal year, 
        of which not more than 5 percent of the amount made 
        available for a fiscal year shall be available for 
        community planning and implementation.
    (22) Rural Water and Wastewater Circuit Rider Program.--
          (A) In general.--The Secretary shall establish a 
        national rural water and wastewater circuit rider 
        program that is based on the rural water circuit rider 
        program of the National Rural Water Association that 
        (as of the date of enactment of this paragraph) 
        receives funding from the Secretary, acting through the 
        Rural Utilities Service.
          (B) Relationship to existing program.--The program 
        established under subparagraph (A) shall not affect the 
        authority of the Secretary to carry out the circuit 
        rider program for which funds are made available under 
        the heading ``Rural Community Advancement Program'' of 
        title III of the Agriculture, Rural Development, Food 
        and Drug Administration, and Related Agencies 
        Appropriations Act, 2002.
          (C) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        paragraph $15,000,000 for each of fiscal years 2003 
        through 2006.
    (23) Multijurisdictional Regional Planning Organizations.--
          (A) Grants.--The Secretary shall provide grants to 
        multijurisdictional regional planning and development 
        organizations to pay the Federal share of the cost of 
        providing assistance to local governments to improve 
        the infrastructure, services, and business development 
        capabilities of local governments and local economic 
        development organizations.
          (B) Priority.--In determining which organizations 
        will receive a grant under this paragraph, the 
        Secretary shall provide a priority to an organization 
        that--
                  (i) serves a rural area that, during the most 
                recent 5-year period--
                          (I) had a net out-migration of 
                        inhabitants, or other population loss, 
                        from the rural area that equals or 
                        exceeds 5 percent of the population of 
                        the rural area; or
                          (II) had a median household income 
                        that is less than the nonmetropolitan 
                        median household income of the 
                        applicable State; and
                  (ii) has a history of providing substantive 
                assistance to local governments and economic 
                development organizations.
          (C) Federal share.--A grant provided under this 
        paragraph shall be for not more than 75 percent of the 
        cost of providing assistance described in subparagraph 
        (A).
          (D) Maximum amount of grants.--The amount of a grant 
        provided to an organization under this paragraph shall 
        not exceed $100,000.
          (E) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        paragraph $30,000,000 for each of fiscal years 2003 
        through 2006.''.
    (24) Certified Nonprofit Organizations Sharing Expertise.--
          (A) Certified organizations.--
                  (i) In general.--To be certified by the 
                Secretary to provide technical assistance in 1 
                or more rural development fields, an 
                organization shall--
                          (I) be a nonprofit organization 
                        (which may include an institution of 
                        higher education) with experience in 
                        providing technical assistance in the 
                        applicable rural development field;
                          (II) develop a plan, approved by the 
                        Secretary, describing the manner in 
                        which grant funds will be used and the 
                        source of non-Federal funds; and
                          (III) meet such other criteria as the 
                        Secretary may establish, based on the 
                        needs of eligible entities for the 
                        technical assistance.
                  (iii) List.--The Secretary shall make 
                available to the public a list of certified 
                organizations in each area that the Secretary 
                determines have substantial experience in 
                providing the assistance described in 
                subparagraph (B).
          (B) Grants.--The Secretary may provide grants to 
        certified organizations to pay for costs of providing 
        technical assistance to local governments and nonprofit 
        entities to improve the infrastructure, services, and 
        business development capabilities of local governments 
        and local economic development organizations.
          (C) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        paragraph $20,000,000 for each of fiscal years 2003 
        through 2006.
    (25) Loan Guarantees for Water, Wastewater, and Essential 
Community Facilities Loans.--
          (A) In general.--The Secretary may guarantee under 
        this title a loan made to finance a community facility 
        or water or waste facility project, including a loan 
        financed by the net proceeds of a bond described in 
        section 144(a)(12)(B)(ii) of the Internal Revenue Code 
        of 1986.
          (B) Requirements.--To be eligible for a loan 
        guarantee under subparagraph (A), an individual or 
        entity offering to purchase the loan must demonstrate 
        to the Secretary that the person has--
                  (i) the capabilities and resources necessary 
                to service the loan in a manner that ensures 
                the continued performance of the loan, as 
                determined by the Secretary; and
                  (ii) the ability to generate capital to 
                provide borrowers of the loan with the 
                additional credit necessary to properly service 
                the loan
    (26) Rural Firefighters and Emergency Medical Personnel 
Grant Program.--
          (A) In general.--The Secretary may make grants to 
        units of general local government and Indian tribes (as 
        defined in section 4 of the Indian Self-Determination 
        and Education Assistance Act (25 U.S.C. 450b)) to pay 
        the cost of training firefighters and emergency medical 
        personnel in firefighting, emergency medical practices, 
        and responding to hazardous materials and bioagents in 
        rural areas.
          (B) Use of funds.--
                  (i) Scholarships.--
                          (I) In general.--Not less than 60 
                        percent of the amounts made available 
                        for competitively awarded grants under 
                        this paragraph shall be used to provide 
                        grants to fund partial scholarships for 
                        training of individuals at training 
                        centers approved by the Secretary.
                          (II) Priority.--In awarding grants 
                        under this clause, the Secretary shall 
                        give priority to grant applicants with 
                        relatively low transportation costs 
                        considering the location of the 
                        grant applicant and the proposed location 
                        of the training.
                  (ii) Grants for training centers.--
                          (I) Existing centers.--
                                  (aa) In general.--A grant 
                                under subparagraph (A) may be 
                                used to provide financial 
                                assistance to State and 
                                regional centers that provide 
                                training for firefighters and 
                                emergency medical personnel for 
                                improvements to the training 
                                facility, equipment, curricula, 
                                and personnel.
                                  (bb) Limitation.--Not more 
                                than $2,000,000 shall be 
                                provided to any single training 
                                center for any fiscal year 
                                under this subclause.
                                  (II) Establishment of new 
                                centers.--
                                  (aa) In general.--A grant 
                                under subparagraph (A) may be 
                                used to provide the Federal 
                                share of the costs of 
                                establishing a regional 
                                training center for 
                                firefighters and emergency 
                                medical personnel.
                                  (bb) Federal share.--The 
                                amount of a grant under this 
                                subclause for a training center 
                                shall not exceed 50 percent of 
                                the cost of establishing the 
                                training center.
                          (C) Funding.--
                  (i) In general.--Out of any funds in the 
                Treasury not otherwise appropriated, the 
                Secretary of the Treasury shall transfer to the 
                Secretary of Agriculture to carry out this 
                paragraph--
                          (I) not later than 30 days after the 
                        date of enactment of this Act, 
                        $10,000,000; and
                          (II) on October 1, 2002, and each 
                        October 1 thereafter through October 1, 
                        2005, $30,000,000.
                  (ii) Receipt and acceptance.--The Secretary 
                shall be entitled to receive, shall accept, and 
                shall use to carry out this section the funds 
                transferred under clause (i), without further 
                appropriation.
                  (iii) Availability of funds.--Funds 
                transferred under clause (i) shall remain 
                available until expended.
    (b) The service provided or made available through any such 
association shall not be curtailed or limited by inclusion of 
the area served by such association within the boundaries of 
any municipal corporation or other public body, or by the 
granting of any private franchise for similar service within 
such area during the term of such loan; nor shall the happening 
of any such event be the basis of requiring such association to 
secure any franchise, license, or permit as a condition to 
continuing to serve the area served by the association at the 
time of the occurrence of such event.

           *       *       *       *       *       *       *


SEC. 306A. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM.

    (a) In General.--The Secretary shall provide grants in 
accordance with this section to assist the residents of rural 
areas and small communities to secure adequate quantities of 
safe water--
        (1) after a significant decline in the quantity or 
        quality of water available from the water supplies of 
        such rural areas and small communities; or
        (2) when repairs, partial replacement, or significant 
        maintenance efforts on established water systems would 
        remedy--
                (A) an acute shortage of quality water; or
                (B) a significant decline in the quantity or 
                quality of water that is available.
    (b) Priority.--In carrying out subsection (a), the 
Secretary shall--
        (1) give priority to projects described in subsection 
        (a)(1); and
        (2) provide at least 70 percent of all such grants to 
        such projects.
    (c) Eligibility.--To be eligible to obtain a grant under 
this section, an applicant shall--
          (1) be a public or private nonprofit entity; and
          (2) in the case of a grant made under subsection 
        (a)(1), demonstrate to the Secretary that the decline 
        referred to in such subsection occurred within 2 years 
        of the date the application was filed for such grant.
    (d) Uses.--
          (1) In general.--Grants made under this section may 
        be used for waterline extensions from existing systems, 
        laying of new waterlines, repairs, significant 
        maintenance, digging of new wells, equipment 
        replacement, hook and tap fees, and any other 
        appropriate purpose associated with developing sources 
        of, or treating, storing, or distributing water, and to 
        assist communities in complying with the requirements of 
        the Federal Water Pollution Control Act (33 U.S.C. 1251 
        et seq.) or the Safe Drinking Water Act (42 U.S.C. 300f 
        et seq.).
          (2) Joint proposals.--Nothing in this section shall 
        preclude rural communities from submitting joint 
        proposals for emergency water assistance, subject to 
        the restrictions contained in subsection (e). Such 
        restrictions should be considered in the aggregate, 
        depending on the number of communities involved.
    (e) Restrictions.--
          (1) Maximum population and income.--No grant provided 
        under this section shall be used to assist any rural 
        area or community that--
                  (A) includes any area in any city or town 
                with a population in excess of 10,000 
                inhabitants according to the most recent 
                decennial census of the United States; or
                  (B) has a median household income in excess 
                of the State nonmetropolitan median household 
                income according to the most recent decennial 
                census of the United States.
          (2) Set-aside for smaller communities.--Not less than 
        50 percent of the funds allocated under this section 
        shall be allocated to rural communities with 
        populations that do not exceed 3,000 inhabitants.
    (f) Maximum Grants.--Grants made under this section may not 
exceed--
          (1) in the case of each grant made under subsection 
        (a)(1), $500,000; and
          (2) in the case of each grant made under subsection 
        (a)(2), $75,000.
    (g) Full Funding.--Subject to subsection (e), grants under 
this section shall be made in an amount equal to 100 percent of 
the costs of the projects conducted under this section.
    (h) Application.--
          (1) Nationally competitive application process.--The 
        Secretary shall develop a nationally competitive 
        application process to award grants under this section. 
        The process shall include criteria for evaluating 
        applications, including population, median household 
        income, and the severity of the decline in quantity or 
        quality of water.
          (2) Timing.--The Secretary shall make every effort to 
        review and act on applications within 60 days of the 
        date that such applications are submitted.
                          (i) Authorization of 
                        appropriations.--There are authorized 
                        to be appropriated to carry out this 
                        section $35,000,000 for each of fiscal 
                        years 1996 through [2002] 2006.

SEC. 306C. WATER AND WASTE FACILITY LOANS AND GRANTS TO ALLEVIATE 
                    HEALTH RISKS.

    (a) Loans and Grants to Persons Other Than Individuals.--
          (1) In general.--The Secretary shall make or insure 
        loans and make grants to rural water supply 
        corporations, cooperatives, or similar entities, Indian 
        tribes on Federal and State reservations and other 
        federally recognized Indian tribes, and public 
        agencies, to provide for the conservation, development, 
        use, and control of water (including the extension or 
        improvement of existing water supply systems), and the 
        installation or improvement of drainage or waste 
        disposal facilities and essential community facilities 
        including necessary related equipment. Such loans and 
        grants shall be available only to provide such water 
        and waste facilities and services to communities whose 
        residents face significant health risks, as determined 
        by the Secretary, due to the fact that a significant 
        proportion of the community's residents do not have 
        access to, or are not served by, adequate affordable--
                  (A) water supply systems; or
                  (B) waste disposal facilities.
          (2) Certain areas targeted.--
                  (A) In general.--Loans and grants under 
                paragraph (1) shall be made only if the loan or 
                grant funds will be used primarily to provide 
                water or waste services, or both, to residents 
                of a county--
                          (i) the per capita income of the 
                        residents of which is not more than 70 
                        percent of the national average per 
                        capita income, as determined by the 
                        Department of Commerce; and
                          (ii) the unemployment rate of the 
                        residents of which is not less than 125 
                        percent of the national average 
                        unemployment rate, as determined by the 
                        Bureau of Labor Statistics.
                  (B) Exception.--Notwithstanding subparagraph 
                (A), loans and grants under paragraph (1) may 
                also be made if the loan or grant funds will be 
                used primarily to provide water or waste 
                services, or both, to residents of a rural area 
                that was recognized as a colonia as of October 
                1, 1989.
    (b) Loans and Grants to Individuals.--
          (1) In general.--The Secretary shall make or insure 
        loans and make grants to individuals who reside in a 
        community described in subsection (a)(1) for the 
        purpose of extending water supply and waste disposal 
        systems, connecting the systems to the residences of 
        the individuals, or installing plumbing and fixtures 
        within the residences of the individuals to facilitate 
        the use of the water supply and waste disposal systems. 
        Such loans shall be at a rate of interest no greater 
        than the Federal Financing Bank rate on loans of a 
        similar term at the time such loans are made. The 
        repayment of such loans shall be amortized over the 
        expected life of the water supply or waste disposal 
        system to which the residence of the borrower will be 
        connected.
          (2) Manner in which loans and grants are to be 
        made.--Loans and grants to individuals under paragraph 
        (1) shall be made--
                  (A) directly to such individuals by the 
                Secretary; or
                  (B) to such individuals through the rural 
                water supply corporation, cooperative, or 
                similar entity, or public agency, providing 
                such water supply or waste disposal services, 
                pursuant to regulations issued by the 
                Secretary.
    (c) Preference.--The Secretary shall give preference in the 
awarding of loans and grants--
          (1) under subsection (a) to rural water supply 
        corporations, cooperatives, or similar entities, or 
        public agencies, that propose to provide water supply 
        or waste disposal services to the residents of those 
        rural subdivisions commonly referred to as colonias, 
        that are characterized by substandard housing, 
        inadequate roads and drainage, and a lack of adequate 
        water or waste facilities; and
          (2) under subsection (b) to individuals who reside in 
        a rural subdivision commonly referred to as a colonia, 
        that is characterized by substandard housing, 
        inadequate roads and drainage, and a lack of adequate 
        water or waste facilities.
    (d) Cooperative Defined.--For purposes of this section, the 
term ``cooperative'' means a cooperative formed specifically 
for the purpose of the installation, expansion, improvement, or 
operation of water supply or waste disposal facilities or 
systems.
    [(e) Limitations on Authorization of Appropriations.--There 
are authorized to be appropriated--]
    (e) Authorization of Appropriations.--
          (1) In general.--Subject to paragraph (2), there is 
        authorized to be appropriated--
                  (A) for grants under this section, 
                $30,000,000 for each fiscal year;
                  (B) for loans under this section, $30,000,000 
                for each fiscal year; and
                  (C) for grants under this section to benefit 
                Indian tribes (as defined in section 4 of the 
                Indian Self-Determination and Education 
                Assistance Act (25 U.S.C. 450b)), $20,000,000 
                for each fiscal year.
          (2) Exception.--An entity eligible to receive funding 
        through a grant made under section 306D shall not be 
        eligible for a grant from funds made available under 
        subparagraph (1)(C).
          (1) for grants under this section, $30,000,000 for 
        each fiscal year; and
          (2) for loans under this section, $30,000,000 for 
        each fiscal year.
    (f) Regulations.--Not later than 30 days after the date of 
enactment of this subsection, the Secretary shall issue interim 
final regulations, with a request for public comments, 
implementing this section.

SEC. 306D. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN ALASKA.

    (a) In General.--The Secretary may make grants to the State 
of Alaska for the benefit of rural or Native villages in Alaska 
to provide for the development and construction of water and 
wastewater systems to improve the health and sanitation 
conditions in those villages.
    (b) Matching Funds.--To be eligible to receive a grant 
under subsection (a), the State of Alaska shall provide 25 
percent in matching funds from non-Federal sources.
    (c) Consultation With the State of Alaska.--The Secretary 
shall consult with the State of Alaska on a method of 
prioritizing the allocation of grants under subsection (a) 
according to the needs of, and relative health and sanitation 
conditions in, each village.
    (d) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated to carry out this section $30,000,000 for 
        each of fiscal years 2001 and [2002] 2006.
          (2) Training and technical assistance.--Not more than 
        2 percent of the amount made available under paragraph 
        (1) for a fiscal year may be used by the State of 
        Alaska for training and technical assistance programs 
        relating to the operation and management of water and 
        waste disposal services in rural and Native villages.

           *       *       *       *       *       *       *

    Sec. 310B. (a) The Secretary may also make and insure loans 
to public, private, or cooperative organizations organized for 
profit or nonprofit, to Indian tribes on Federal and State 
reservations or other federally recognized Indian tribal 
groups, or to individuals for the purposes of (1) improving, 
developing, or financing business, industry, and employment and 
improving the economic and environmental climate in rural 
communities, including pollution abatement and control, (2) the 
conservation, development, and use of water for aquaculture 
purposes in rural areas, (3) reducing the reliance on 
nonrenewable energy resources by encouraging the development 
and construction of solar energy systems, including the 
modification of existing systems, in rural areas, and (4) to 
facilitate economic opportunity for industries undergoing 
adjustment from terminated Federal agricultural price and 
income support programs or increased competition from foreign 
trade. For the purposes of this subsection, the term ``solar 
energy'' means energy derived from sources (other than fossil 
fuels) and technologies included in the Federal Nonnuclear 
Energy Research and Development Act of 1974, as amended. Such 
loans, when originated, held, and serviced by other lenders, 
may be guaranteed by the Secretary under this section without 
regard to paragraphs (1) and (4) of section 333. As used in 
this subsection, the term ``aquaculture'' means the culture or 
husbandry of aquatic animals or plants by private industry for 
commercial purposes including the culture and growing of fish 
by private industry for the purpose of creating or augmenting 
publicly owned and regulated stocks of fish. No loan may be 
made, insured, or guaranteed under this subsection that exceeds 
$25,000,000 in principal amount.
    (b) Solid Waste Management Grants.--The Secretary may make 
grants to nonprofit organizations for the provision of regional 
technical assistance to local and regional governments and 
related agencies for the purpose of reducing or eliminating 
pollution of water resources and improving the planning and 
management of solid waste disposal facilities. Grants made 
under this paragraph for the provision of technical assistance 
shall be made for 100 percent of the cost of such assistance.
    (c) Rural Business Enterprise Grants.--
          (1) In general.--The Secretary may also make grants, 
        not to exceed $50,000,000 annually, to public bodies 
        and private nonprofit corporations for measures 
        designed to finance and facilitate development of small 
        and emerging private business enterprises (including 
        nonprofit entities) or the creation, expansion, and 
        operation of rural distance learning networks or rural 
        learning programs that provide educational instruction 
        or job training instruction related to potential 
        employment or job advancement to adult students, 
        including the development, construction or acquisition 
        of land, buildings, plants, equipment, access streets 
        and roads, parking areas, utility extensions, necessary 
        water supply and waste disposal facilities, 
        refinancing, services and fees.
          (2) Passenger transportation services or 
        facilities.--The Secretary may award grants on a 
        competitive basis to qualified nonprofit organizations 
        for the provision of technical assistance and training 
        to rural communities for the purpose of improving 
        passenger transportation services or facilities. 
        Assistance provided under this paragraph may include 
        on-site technical assistance to local and regional 
        governments, public transit agencies, and related 
        nonprofit and for-profit organizations in rural areas, 
        the development of training materials, and the 
        provision of necessary training assistance to local 
        officials and agencies in rural areas.
          (3) Grants to aid industries in adjusting to 
        terminated federal agricultural programs or increased 
        foreign competition.--The Secretary may make grants 
        under this section to facilitate economic opportunity 
        for industries undergoing adjustment from terminated 
        Federal agricultural price and income support programs 
        or increased competition from foreign trade.
    (d)(1) The Secretary may participate in joint financing to 
facilitate development of private business enterprises in rural 
areas with the Economic Development Administration, the Small 
Business Administration, and the Department of Housing and 
Urban Development and other Federal and State agencies and with 
private and quasi-public financial institutions, through joint 
loans to applicants eligible under subsection (a) for the 
purpose of improving, developing, or financing business, 
industry, and employment and improving the economic and 
environmental climate in rural areas or through joint grants to 
applicants eligible under subsection (c) for such purposes, 
including in the case of loans or grants the development, 
construction, or acquisition of land, buildings, plants, 
equipment, access streets and roads, parking areas, utility 
extensions, necessary water supply and waste disposal 
facilities, refining, service and fees.
    (2) No financial or other assistance shall be extended 
under any provision of this section, except for cases in which 
such assistance does not exceed $1,000,000 or for cases in 
which direct employment will not be increased by more than 
fifty employees, that is calculated to or is likely to result 
in the transfer from one area to another of any employment or 
business activity provided by operations of the applicant, but 
this limitation shall not be construed to prohibit assistance 
for the expansion of an existing business entity through the 
establishment of a new branch, affiliate, or subsidiary of such 
entity if the establishment of such branch, affiliate, or 
subsidiary will not result in an increase in unemployment in 
the area of original location or in any other area where such 
entity conducts business operations unless there is reason to 
believe that such branch, affiliate, or subsidiary is being 
established with the intention of closing down the operations 
of the existing business entity in the area of its original 
location or in any other area where it conducts such 
operations.
    (3) No financial or other assistance shall be extended 
under any provision of this section, except for cases in which 
such assistance does not exceed $1,000,000 or for cases in 
which direct employment will not be increased by more than 
fifty employees, which is calculated to or likely to result in 
an increase in the production of goods, materials, or 
commodities, or the availability of services or facilities in 
the area, when there is not sufficient demand for such goods, 
materials, commodities, services, or facilities, to employ the 
efficient capacity of existing competitive commercial or 
industrial enterprises, unless such financial or other 
assistance will not have an adverse effect upon existing 
competitive enterprises in the area.
    (4) No financial or other assistance shall be extended 
under any provision of this section,except for cases in which 
such assistance does not exceed $1,000,000 or for cases in which direct 
employment will not be increased by more than fifty employees, if the 
Secretary of Labor certifies within 30 days after the matter has been 
submitted to him by the Secretary of Agriculture that the provisions of 
paragraphs (2) and (3) of this subsection have not been complied with. 
The Secretary of Labor shall, in cooperation with the Secretary of 
Agriculture, develop a system of certification which will insure the 
expeditious processing of requests for assistance under this section.
    (5) No grant or loan authorized to be made under this title 
shall require or be subject to the prior approval of any 
officer, employee, or agency of any State.
    (6) No loan commitment issued under this section shall be 
conditioned upon the applicant investing in excess of 10 per 
centum in the business or industrial enterprise for which 
purpose the loan is to be made unless the Secretary determines 
there are special circumstances which necessitate an equity 
investment by the applicant greater than 10 per centum.
    (7) No provision of law shall prohibit issuance by the 
Secretary of certificates evidencing beneficial ownership in a 
block of notes insured or guaranteed under this title or Title 
V of the Housing Act of 1949; any sale by the Secretary of such 
certificates shall be treated as a sale of assets for the 
purposes of the Budget and Accounting Act of 1921. Any security 
representing beneficial ownership in a block of notes 
guaranteed or insured under this title or Title V of the 
Housing Act of 1949 issued by a private entity shall be exempt 
from laws administered by the Securities and Exchange 
Commission, except sections 17, 22, and 24 of the Securities 
Act of 1933, as amended; however, the Secretary shall require 
(i) that the issuer place such notes in the custody of an 
institution chartered by a Federal or State agency to act as 
trustee and (ii) that the issuer provide such periodic reports 
of sales as the Secretary deems necessary.
    (e) Rural Cooperative Development Grants.--
          (1) Definitions.--In this subsection:
                  (A) Nonprofit institution.--The term 
                ``nonprofit institution'' means any 
                organization or institution, including an 
                accredited institution of higher education, no 
                part of the net earnings of which inures, or 
                may lawfully inure, to the benefit of any 
                private shareholder or individual.
                  (B) United states.--The term ``United 
                States'' means the several States, the District 
                of Columbia, the Commonwealth of Puerto Rico, 
                the Virgin Islands, Guam, American Samoa, and 
                the other territories and possessions of the 
                United States.
          (2) Grants.--The Secretary shall make grants 
        effective October 1, 1996, under this subsection to 
        nonprofit institutions for the purpose of enabling the 
        institutions to establish and operate centers for rural 
        cooperative development.
          (3) Goals.--The goals of a center funded under this 
        subsection shall be to facilitate the creation of jobs 
        in rural areas through the development of new rural 
        cooperatives, value added processing, and rural 
        businesses.
          (4) Application.--Any nonprofit institution seeking a 
        grant under paragraph (2) shall submit to the Secretary 
        an application containing a plan for the establishment 
        and operation by the institution of a center or centers 
        for cooperative development. The Secretary may approve 
        the application if the plan contains the following:
                  (A) A provision that substantiates that the 
                center will effectively serve rural areas in 
                the United States.
                  (B) A provision that the primary objective of 
                the center will be to improve the economic 
                condition of rural areas through cooperative 
                development.
                  (C) A description of the activities that the 
                center will carry out to accomplish the 
                objective. The activities may include the 
                following:
                          (i) Programs for applied research and 
                        feasibility studies that may be useful 
                        to individuals, cooperatives, small 
                        businesses, and other similar entities 
                        in rural areas served by the center.
                          (ii) Programs for the collection, 
                        interpretation, and dissemination of 
                        information that may be useful to 
                        individuals, cooperatives, small 
                        businesses, and other similar entities 
                        in rural areas served by the center.
                          (iii) Programs providing training and 
                        instruction for individuals, 
                        cooperatives, small businesses, and 
                        other similar entities in rural areas 
                        served by the center.
                          (iv) Programs providing loans and 
                        grants to individuals, cooperatives, 
                        small businesses, and other similar 
                        entities in rural areas served by the 
                        center.
                          (v) Programs providing technical 
                        assistance, research services, and 
                        advisory services to individuals, 
                        cooperatives, small businesses, and 
                        other similar entities in rural areas 
                        served by the center.
                          (vi) Programs providing for the 
                        coordination of services and sharing of 
                        information among the center.
                  (D) A description of the contributions that 
                the activities are likely to make to the 
                improvement of the economic conditions of the 
                rural areas for which the center will provide 
                services.
                  (E) Provisions that the center, in carrying 
                out the activities, will seek, where 
                appropriate, the advice, participation, 
                expertise, and assistance of representatives of 
                business, industry, educational institutions, 
                the Federal Government, and State and local 
                governments.
                  (F) Provisions that the center will take all 
                practicable steps to develop continuing sources 
                of financial support for the center, 
                particularly from sources in the private 
                sector.
                  (G) Provisions for--
                          (i) monitoring and evaluating the 
                        activities by the nonprofit institution 
                        operating the center; and
                          (ii) accounting for money received by 
                        the institution under this section.
          (5) Awarding grants.--Grants made under paragraph (2) 
        shall be made on a competitive basis. In making grants 
        under paragraph (2), the Secretary shall give 
        preference to grant applications providing for the 
        establishment of centers for rural cooperative 
        development that--
                  (A) demonstrate a proven track record in 
                administering a nationally coordinated, 
                regionally or State-wide operated project;
                  (B) demonstrate previous expertise in 
                providing technical assistance in rural areas;
                  (C) demonstrate the ability to assist in the 
                retention of businesses, facilitate the 
                establishment of cooperatives and new 
                cooperative approaches, and generate employment 
                opportunities that will improve the economic 
                conditions of rural areas;
                  (D) demonstrate the ability to create 
                horizontal linkages among businesses within and 
                among various sectors in rural areas of the 
                United States and vertical linkages to domestic 
                and international markets;
                  (E) commit to providing technical assistance 
                and other services to underserved and 
                economically distressed areas in rural areas of 
                the United States; and
                  (F) commit to providing greater than a 25 
                percent matching contribution with private 
                funds and in-kind contributions.
          (6) 1-year grants; authority to approve grant for 1 
        additional year without application.--The Secretary 
        shall make grants under this subsection for a period of 
        1 year. The Secretary shall evaluate programs receiving 
        assistance under this subsection. If the Secretary 
        determines it to be in the best interest of the 
        program, the Secretary may award an additional grant to 
        the program for the immediately succeeding year without 
        application for the grant.
          (7) Technical assistance to prevent excessive 
        unemployment or underemployment.--In carrying out this 
        subsection, the Secretary may provide technical 
        assistance to alleviate or prevent conditions of 
        excessive unemployment, underemployment, outmigration, 
        or low employment growth in economically distressed 
        rural areas that the Secretary determines have a 
        substantial need for the assistance. The assistance may 
        include planning and feasibility studies, management 
        and operational assistance, and studies evaluating the 
        need for development potential of projects that 
        increase employment and improve economic growth in the 
        areas.
          (8) Grants to defray administrative costs.--The 
        Secretary may make grants to defray not to exceed 75 
        percent of the costs incurred by organizations and 
        public bodies to carry out projects for which grants or 
        loans are made under this subsection. For purposes of 
        determining the non-Federal share of the costs, the 
        Secretary shall consider contributions in cash and in 
        kind, fairly evaluated, including premises, equipment, 
        and services.
          (9) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $50,000,000 for each of fiscal years 1996 
        through [2002] 2006.
    (f) Grants to Broadcasting Systems.--
          (1) Definition of statewide.--In this subsection, the 
        term ``statewide'' means having a coverage area of not 
        less than 90 percent of the population of a State and 
        not less than 80 percent of the rural land area of the 
        State (as determined by the Secretary).
          (2) Grants.--The Secretary may make grants to 
        statewide private nonprofit public television systems, 
        whose coverage area is predominately rural, for the 
        purpose of demonstrating the effectiveness of such 
        systems in providing information on agriculture and 
        other issues of importance to farmers and other rural 
        residents. Grants available under this paragraph may be 
        used for capital equipment expenditures, start-up and 
        program costs, and other costs necessary to the 
        operation of such demonstrations.
          (3) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $5,000,000 for each of fiscal years 2002 
        through 2006.
    [(g) Loan Guarantees for the Purchase of Cooperative 
Stock.--
          [(1) Definition of farmer.--In this subsection, the 
        term ``farmer'' means any farmer that the Secretary 
        determines is a family farmer.
          [(2) Loan guarantees.--The Secretary may guarantee 
        loans under this section to individual farmers for the 
        purpose of purchasing start-up capital stock of a 
        farmer cooperative established for the purpose of 
        processing an agricultural commodity.
          [(3) Eligibility.--To be eligible for a loan 
        guarantee under this subsection, a farmer must produce 
        the agricultural commodity that will be processed by 
        the cooperative.]
    (g) Business and Industry Direct and Guaranteed Loans.--
          (1) Loan guarantees for the purchase of cooperative 
        stock.--
                  (A) New and expanding cooperatives.--
                          (i) In general.--The Secretary may 
                        guarantee a loan under subsection (a) 
                        to farmers, ranchers, or cooperatives 
                        for the purpose of purchasing start-up 
                        capital stock for the expansion or 
                        creation of a cooperative venture that 
                        will process agricultural commodities 
                        or otherwise process value-added 
                        agricultural products.
                          (ii) Financial condition.--In 
                        determining the appropriateness of a 
                        loan guarantee under this subparagraph, 
                        the Secretary--
                                  (I) shall fully review the 
                                feasibility and other relevant 
                                aspects of the cooperative 
                                venture to be established;
                                  (II) may not require a review 
                                of the financial condition or 
                                statements of any individual 
                                farmer or rancher involved in 
                                the cooperative, other than the 
                                applicant for a guarantee under 
                                this subparagraph; and
                                  (III) shall base any 
                                guarantee, to the maximum 
                                extent practicable, on the 
                                merits of the cooperative 
                                venture to be established.
                          (iii) Collateral.--As a condition of 
                        making a loan guarantee under this 
                        subparagraph, the Secretary may not 
                        require additional collateral by a 
                        farmer or rancher, other than stock 
                        purchased or issued pursuant to the 
                        loan and guarantee of the loan.
                          (iv) Eligibility.--To be eligible for 
                        a loan guarantee under this 
                        subparagraph, a farmer or rancher must 
                        produce the agricultural commodity that 
                        will be processed by the cooperative.
                          (v) Processing contracts during 
                        initial period.--The cooperative, for 
                        which a farmer or rancher receives a 
                        guarantee to purchase stock under this 
                        subparagraph, may contract for services 
                        to process agricultural commodities, or 
                        otherwise process value-added 
                        agricultural products, during the 5-
                        year period beginning on the date of 
                        the startup of the cooperative in order 
                        to provide adequate time for the 
                        planning and construction of the 
                        processing facility of the cooperative.
                  (B) Existing cooperatives.--The Secretary may 
                guarantee a loan under subsection (a) to a 
                farmer or rancher to join a cooperative in 
                order to sell the agricultural commodities or 
                products produced by the farmer or rancher.
                  (C) Financial information.--Financial 
                information required by the Secretary from a 
                farmer or rancher as a condition of making a 
                loan guarantee under this paragraph shall be 
                provided in the manner generally required by 
                commercial agricultural lenders in the area.
          (2) Loans to cooperatives.--
                  (A) In general.--The Secretary may make or 
                guarantee a loan under subsection (a) to a 
                cooperative that is headquartered in a 
                metropolitan area if the loan is used for a 
                project or venture described in subsection (a) 
                that is located in a rural area.
                  (B) Refinancing.--A cooperative organization 
                owned by farmers or ranchers that is eligible 
                for a business and industry loan under made or 
                guaranteed under subsection (a) shall be 
                eligible to refinance an existing loan with a 
                lender if--
                          (i) the cooperative organization--
                                  (I) is current and performing 
                                with respect to the existing 
                                loan; and
                                  (II) is not, and has not 
                                been, in default with respect 
                                to the existing loan; and
                          (ii) there is adequate security or 
                        full collateral for the refinanced 
                        loan.
          (3) Business and industry loan appraisals.--The 
        Secretary may require that any appraisal made in 
        connection with a business and industry loan made or 
        guaranteed under subsection (a) be conducted by a 
        specialized appraiser that uses standards that are 
        similar to standards used for similar purposes in the 
        private sector, as determined by the Secretary.
          (4) Fees.--The Secretary may assess a 1-time fee for 
        any loan guaranteed under subsection (a) in an amount 
        that does not exceed 2 percent of the guaranteed 
        principal portion of the loan.''.
    (h) Loan Guarantee for Certain Loans.--The Secretary may 
guarantee loans made in subsection (a) to finance the issuance 
of bonds for the projects described in section 306(a)(25)
    (i) Value-Added Intermediary Relending Program.--
          (1) In general.--In accordance with this subsection, 
        the Secretary shall make loans under the terms and 
        conditions of the intermediary relending program 
        established under section 1323(b)(2)(C) of the Food 
        Security Act of 1985 (7 U.S.C. 1932 note; Public Law 
        99-198).
          (2) Loans.--Using funds made available to carry out 
        this subsection, the Secretary shall make loans to 
        eligible intermediaries to make loans to ultimate 
        recipients, under the terms and conditions of the 
        intermediary relending program, for projects to 
        establish, enlarge, and operate enterprises that add 
        value to agricultural commodities and products of 
        agricultural commodities.
          (3) Eligible intermediaries.--Intermediaries that are 
        eligible to receive loans under paragraph (2) shall 
        include State agencies.
          (4) Preference for bioenergy projects.--In making 
        loans using loan funds made available under paragraph 
        (2), an eligible intermediary shall give preference to 
        bioenergy projects in accordance with regulations 
        promulgated by the Secretary.
          (5) Composition of capital.--The capital for a 
        project carried out by an ultimate recipient and 
        assisted with loan funds made available under paragraph 
        (2) shall be comprised of--
                  (A) not more than 15 percent of the total 
                cost of a project; and
                  (B) not less than 50 percent of the equity 
                funds provided by agricultural producers.
          (6) Loan conditions.--
                  (A) Terms of loans.--A loan made to an 
                intermediary using loan funds made available 
                under paragraph (2) shall have a term of not to 
                exceed 30 years.
                  (B) Interest.--The interest rate on such a 
                loan shall be--
                          (i) in the case of each of the first 
                        2 years of the loan period, 0 percent; 
                        and
                          (ii) in the case of each of the 
                        remaining years of the loan period, 2 
                        percent.
          (7) Limitations on amount of loan funds provided.--
                  (A) In general.--Except as provided in 
                subparagraph (B), an intermediary or ultimate 
                recipient shall be eligible to receive not more 
                than $2,000,000 of the loan funds made 
                available under paragraph (2).
                  (B) State agencies.--Subparagraph (A) shall 
                not apply in the case of a State agency with 
                respect to loan funds provided to the State 
                agency as an intermediary.
          (8) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $15,000,000 for each of fiscal years 2003 
        through 2006.''.

           *       *       *       *       *       *       *


SEC. 310G. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER 
                    PURPOSES.

    If, after making a loan or a grant described in section 
381E(d), the Secretary determines that the circumstances under 
which the loan or grant was made have sufficiently changed to 
make the project or activity for which the loan or grant was 
made available no longer appropriate, the Secretary may allow 
the loan borrower or grant recipient to use property (real and 
personal) purchased or improved with the loan or grant funds, 
or proceeds from the sale of property (real and personal) 
purchased with such funds, for another project or activity that 
(as determined by the Secretary)--
          (1) will be carried out in the same area as the 
        original project or activity;
          (2) meets the criteria for a loan or a grant 
        described in section 381E(d); and
          (3) satisfies such additional requirements as are 
        established by the Secretary.

                      Subtitle B--Operating Loans

           *       *       *       *       *       *       *


    Sec. 333A. (a)(1) The Secretary shall approve or disapprove 
an application for a loan or loan guarantee made under this 
title, and notify the applicant of such action, not later than 
60 days after the Secretary has received a complete application 
for such loan or loan guarantee.
    (2)(A) If an application for a loan or loan guarantee under 
this title (other than under subtitle B) is incomplete, the 
Secretary shall inform the applicant of the reasons such 
application is incomplete not later than 20 days after the 
Secretary has received such application.
    (B)(i) Not later than 10 calendar days after the Secretary 
receives an application for an operating loan or loan guarantee 
under subtitle B, the Secretary shall notify the applicant of 
any information required before a decision may be made on the 
application. On receipt of an application, the Secretary shall 
request from other parties such information as may be needed in 
connection with the application.
    (ii) Not later than 15 calendar days after the date an 
agency of the Department of Agriculture receives a request for 
information made pursuant to clause (i), the agency shall 
provide theSecretary with the requested information.
    (iii) If, not later than 20 calendar days after the date a 
request is made pursuant to clause (i) with respect to an 
application, the Secretary has not received the information 
requested, the Secretary shall notify the applicant and the 
district office of the Farmers Home Administration, in writing, 
of the outstanding information.
    (iv) A county office shall notify the district office of 
the Farmers Home Administration of each application for an 
operating loan or loan guarantee under subtitle B that is 
pending more than 45 days after receipt, and the reasons the 
application is pending.
    (v) A district office that receives a notice provided under 
clause (iv) with respect to an application shall immediately 
take steps to ensure that final action is taken on the 
application not later than 15 days after the date of the 
receipt of the notice.
    (vi) The district office shall report to the State office 
of the Farmers Home Administration on each application for an 
operating loan or loan guarantee under subtitle B that is 
pending more than 45 days after receipt by the county 
committee, and the reasons the application is pending.
    (vii) Each month, the Secretary shall notify the Committee 
on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the 
Senate, on a State-by-State basis, as to each application for 
an operating loan or loan guarantee under subtitle B on which 
final action had not been taken within 60 calendar days after 
receipt by the Secretary, and the reasons final action had not 
been taken.
    (3) If an application for a loan or loan guarantee under 
this title is disapproved by the Secretary, the Secretary shall 
state the reasons for the disapproval in the notice required 
under paragraph (1).
    (4)(A) Notwithstanding paragraph (1), each application for 
a loan or loan guarantee under section 310B(a), or for a loan 
under section 306(a), that is to be disapproved by the 
Secretary solely because the Secretary lacks the necessary 
amount of funds to make the loan or guarantee shall not be 
disapproved but shall be placed in pending status.
    (B) The Secretary shall retain the pending application and 
reconsider the application beginning on the date that 
sufficient funds become available.
    (C) Not later than 60 days after funds become available 
regarding each pending application, the Secretary shall notify 
the applicant of the approval or disapproval of funding for the 
application.
    (b)(1) Except as provided in paragraph (2), if an 
application for an insured loan under this title is approved by 
the Secretary, the Secretary shall provide the loan proceeds to 
the applicant not later than 15 days (or such longer period as 
the applicant may approve) after the application for the loan 
is approved by the Secretary.
    (2) If the Secretary is unable to provide the loan proceeds 
to the applicant within such 15-day period because sufficient 
funds are not available to the Secretary for such purpose, the 
Secretary shall provide the loan proceeds to the applicant as 
soon as practicable (but in no event later than 15 days unless 
the applicant agrees to a longer period) after sufficient funds 
for such purpose become available to the Secretary.
    (c) If an application for a loan or loan guarantee under 
this title is disapproved by the Secretary, but such action is 
subsequently reversed or revised as the result of an appeal 
within the Department of Agriculture or to the courts of the 
United States and the application is returned to the Secretary 
for further consideration, the Secretary shall act on the 
application and provide the applicant with notice of the action 
within 15 days after return of the application to the 
Secretary.
    (d) In carrying out the approved lender program established 
by exhibit A to subpart B of part 1980 of title 7, Code of 
Federal Regulations, the Secretary shall ensure that each 
request of a lending institution for designation as an approved 
lender under such program is reviewed, and a decision made on 
the application, not later than 15 days after the Secretary has 
received a complete application for such designation.
    (e)(1) As soon as practicable after the date of enactment 
of the Food Security Act of 1985, the Secretary shall take such 
steps as are necessary to make personnel, including the payment 
of overtime for such personnel, and other resources of the 
Department of Agriculture available to the Farmers Home 
Administration as are sufficient to enable the Farmers Home 
Administration to expeditiously process loan applications that 
are submitted by farmers and ranchers.
    (2) In carrying out paragraph (1), the Secretary may use 
any authority of law provided to the Secretary, including--
          (A) the Agricultural Credit Insurance Fund 
        established under section 309; and
          (B) the employment procedures used in connection with 
        the emergency loan program established under subtitle 
        C.
    (f)(1) As used in this subsection:
          (A) The term ``approved lender'' means a lender 
        approved prior to the date of enactment of this 
        subsection by the Secretary under the approved lender 
        program established by exhibit A to subpart B of part 
        1980 of title 7, Code of Federal Regulations (as in 
        effect on January 1, 1991), or a lender certified under 
        section 1141.
          (B) The term ``seasoned direct loan borrower'' means 
        a borrower receiving a direct loan under this title who 
        has been classified as ``commercial'' or ``standard'' 
        under subpart W of part 2006 of the Instruction Manual 
        (as in effect on January 1, 1991).
    (2) The Secretary, or a contracting third party, shall 
annually review under section 360 the loans of each seasoned 
loan borrower. If, based on the review, it is determined that a 
borrower would be able to obtain a loan, guaranteed by the 
Secretary, from a commercial or cooperative lender at 
reasonable rates and terms for loans for similar purposes and 
periods of time, the Secretary shall assist the borrower in 
applying for the commercial or cooperative loan.
    (3) In accordance with section 362, the Secretary shall 
prepare a prospectus on each seasoned direct loan borrower 
determined eligible to obtain a guaranteed loan. The prospectus 
shall contain a description of the amounts of loan guarantee 
and interest assistance that the Secretary will provide to the 
seasoned direct loan borrower to enable the seasoned direct 
loan borrower to carry out a financially viable farming plan if 
a guaranteed loan is made.
    (4) Verification.--
          (A) In general.--The Secretary shall provide a 
        prospectus of a seasoned direct loan borrower to each 
        approved lender whose lending area includes the 
        location of the seasoned direct loan borrower.
          (B) Notification.--The Secretary shall notify each 
        borrower of a loan that a prospectus has been provided 
        to a lender under subparagraph (A).
          (C) Credit extended.--If the Secretary receives an 
        offer from an approved lender to extend credit to the 
        seasoned direct loan borrower under terms and 
        conditions contained in the prospectus, the seasoned 
        direct loan borrower shall not be eligible for an 
        insured loan from the Secretary under subtitle A or B, 
        except as otherwise provided in this subsection.
    (5) If the Secretary is unable to provide loan guarantees 
and, if necessary, interest assistance to the seasoned direct 
loan borrower under this subsection in amounts sufficient to 
enable the seasoned direct loan borrower to borrow from 
commercial sources the amount required to carry out a 
financially viable farming plan, or if the Secretary does not 
receive an offer from an approved lender to extend credit to a 
seasoned direct loan borrower under the terms and conditions 
contained in the prospectus, the Secretary shall make an 
insured loan to the seasoned direct loan borrower under 
subtitle A or B, whichever is applicable.
    (6) To the extent necessary for the borrower to obtain a 
loan, guaranteed by the Secretary, from a commercial or 
cooperative lender, the Secretary shall provide interest rate 
reductions as provided for under section 351.
    [(g)(1) The Secretary shall provide to lenders a short, 
simplified application form for guarantees under this title of 
loans the principal amount of which is $50,000 or less.
    [(2) In developing the application, the Secretary shall--
          [(A) consult with commercial and cooperative lenders; 
        and
          [(B) ensure that--
                  [(i) the form can be completed manually or 
                electronically, at the option of the lender;
                  [(ii) the form minimizes the documentation 
                required to accompany the form;
                  [(iii) the cost of completing and processing 
                the form is minimal; and
                  [(iv) the form can be completed and processed 
                in an expeditious manner.]
    (g) Simplified Application Forms for Loan Guarantees.--
          (1) In general.--The Secretary shall provide to 
        lenders a short, simplified application form for 
        guarantees under this title of--
                  (A) farmer program loans the principal amount 
                of which is $100,000 or less; and
                  (B) business and industry guaranteed loans 
                under section 310B(a)(1) the principal amount 
                of which is--
                          (i) in the case of a loan guarantee 
                        made during fiscal year 2002 or 2003, 
                        $400,000 or less; and
                          (ii) in the case of a loan guarantee 
                        made during any subsequent fiscal 
                        year--
                                (I) $400,000 or less; or
                                (II) if the Secretary 
                                determines that there is not a 
                                significant increased risk of a 
                                default on the loan, $600,000 
                                or less.
          (2) Water and waste disposal grants and loans.--The 
        Secretary shall develop an application process that 
        accelerates, to the maximum extent practicable, the 
        processing of applications for water and waste disposal 
        grants or direct or guaranteed loans under paragraph 
        (1) or (2) of section 306(a) the grant award amount or 
        principal loan amount, respectively, of which is 
        $300,000 or less.
          (3) Administration.--In developing an application 
        under this subsection, the Secretary shall--
                  (A) consult with commercial and cooperative 
                lenders; and
                  (B) ensure that--
                          (i) the form can be completed 
                        manually or electronically, at the 
                        option of the lender;
                          (ii) the form minimizes the 
                        documentation required to accompany the 
                        form;
                          (iii) the cost of completing and 
                        processing the form is minimal; and
                          (iv) the form can be completed and 
                        processed in an expeditious manner.
    Sec. 333B. Repealed by section 281(c) of Public Law 103-
354.

SEC. 333C. PROVISION OF INFORMATION TO BORROWERS.

           *       *       *       *       *       *       *


    Sec. 343. (a) As used in this title:
          (1) The term ``farmer'' includes a person who is 
        engaged in, or who, with assistance afforded under this 
        title, intends to engage in, fish farming.
          (2) The term ``farming'' shall be deemed to include 
        fish farming.
          (3) The term ``owner-operator'' shall include in the 
        State of Hawaii the lessee-operator of real property in 
        any case in which the Secretary determines that such 
        real property cannot be acquired in fee simple by such 
        lessee-operator, that adequate security is provided for 
        the loan with respect to such real property for which 
        such lessee-operator applies under this title, and that 
        there is a reasonable probability of accomplishing the 
        objectives and repayment of such loan.
          (4) The word ``insure'' as used in this title 
        includes guarantee, which means to guarantee the 
        payment of a loan originated, held, and serviced by a 
        private financial agency or other lender approved by 
        the Secretary.
          (5) The term ``contract of insurance'' includes a 
        contract of guarantee.
          (6) The terms ``United States'' and ``State'' shall 
        include each of the several States, the Commonwealth of 
        Puerto Rico, the Virgin Islands of the United States, 
        Guam, American Samoa, the Commonwealth of the Northern 
        Mariana Islands, and, to the extent the Secretary 
        determines it to be feasible and appropriate, the Trust 
        Territory of the Pacific Islands.
          (7) The term ``joint operation'' means a joint 
        farming operation in which two or more farmers work 
        together sharing equally or unequally land, labor, 
        equipment, expenses, and income.
          (8) The term ``beginning farmer or rancher'' means 
        such term as defined by the Secretary.
          (9) The term ``direct loan'' means a loan made or 
        insured from funds in the account created by section 
        309.
          (10) The term ``farmer program loan'' means a farm 
        ownership loan (FO) under section 303, operating loan 
        (OL) under section 312, soil and water loan (SW) under 
        section 304, emergency loan (EM) under section 321, 
        economic emergency loan (EE) under section 202 of the 
        Emergency Agricultural Credit Adjustment Act (title II 
        of Public Law 95-334), economic opportunity loan (EO) 
        under the Economic Opportunity Act of 1961 (42 U.S.C. 
        2942), softwood timber loan (ST) under section 1254 of 
        the Food Security Act of 1985, or rural housing loan 
        for farm service buildings (RHF) under section 502 of 
        the Housing Act of 1949.
          (11) The term ``qualified beginning farmer or 
        rancher'' means an applicant, regardless of whether the 
        applicant is participating in a program under section 
        310E--
                  (A) who is eligible for assistance under this 
                title;
                  (B) who has not operated a farm or ranch, or 
                who has operated a farm or ranch for not more 
                than 10 years;
                  (C) in the case of a cooperative, 
                corporation, partnership, or joint operation, 
                who has members, stockholders, partners, or 
                joint operators who are all related to one 
                another by blood or marriage;
                  (D)(i) in the case of an owner and operator 
                of a farm or ranch, who--
                          (I) in the case of a loan made to an 
                        individual, individually or with the 
                        immediate family of the applicant--
                                  (aa) materially and 
                                substantially participates in 
                                the operation of the farm or 
                                ranch; and
                                  (bb) provides substantial 
                                day-to-day labor and management 
                                of the farm or ranch, 
                                consistent with the practices in 
                                the State or county in which the 
                                farm or ranch is located; or
                          (II)(aa) in the case of a loan made 
                        to a cooperative, corporation, 
                        partnership, or joint operation, has 
                        members, stockholders, partners, or 
                        joint operators, materially and 
                        substantially participate in the 
                        operation of the farm or ranch; and
                          (bb) in the case of a loan made to a 
                        corporation, has stockholders, all of 
                        whom are qualified beginning farmers or 
                        ranchers; and
                  (ii) in the case of an applicant seeking to 
                own and operate a farm or ranch, who--
                          (I) in the case of a loan made to an 
                        individual, individually or with the 
                        immediate family of the applicant, 
                        will--
                                  (aa) materially and 
                                substantially participate in 
                                the operation of the farm or 
                                ranch; and
                                  (bb) provide substantial day-
                                to-day labor and management of 
                                the farm or ranch, consistent 
                                with the practices in the State 
                                or county in which the farm or 
                                ranch is located; or
                          (II)(aa) in the case of a loan made 
                        to a cooperative, corporation, 
                        partnership, or joint operation, will 
                        have members, stockholders, partners, 
                        or joint operators, materially and 
                        substantially participate in the 
                        operation of the farm or ranch; and
                          (bb) in the case of a loan made to a 
                        corporation, has stockholders, all of 
                        whom are qualified beginning farmers or 
                        ranchers;
                  (E) who agrees to participate in such loan 
                assessment, borrower training, and financial 
                management programs as the Secretary may 
                require;
                  (F) who does not own land or who, directly or 
                through interests in family farm corporations, 
                owns land, the aggregate acreage of which does 
                not exceed 25 percent of the median acreage of 
                the farms or ranches, as the case may be, in 
                the county in which the farm or ranch 
                operations of the applicant are located, as 
                reported in the most recent census of 
                agriculture taken under section 142 of title 
                13, United States Code, except that this 
                subparagraph shall not apply to a loan made or 
                guaranteed under subtitle B; and
                  (G) who demonstrates that the available 
                resources of the applicant and spouse (if any) 
                of the applicant are not sufficient to enable 
                the applicant to continue farming or ranching 
                on a viable scale.
          (12) Debt forgiveness.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the term ``debt forgiveness'' 
                means reducing or terminating a farmer program 
                loan made or guaranteed under this title, in a 
                manner that results in a loss to the Secretary, 
                through--
                          (i) writing down or writing off a 
                        loan under section 353;
                          (ii) compromising, adjusting, 
                        reducing, or charging-off a debt or 
                        claim under section 331;
                          (iii) paying a loss on a guaranteed 
                        loan under section 357; or
                          (iv) discharging a debt as a result 
                        of bankruptcy.
                  (B) Loan restructuring.--The term ``debt 
                forgiveness'' does not include consolidation, 
                rescheduling, reamortization, or deferral.
          (13) Rural and rural area.--
                  (A) In general.--Except as otherwise provided 
                in this paragraph, the terms ``rural'' and 
                ``rural area'' mean a city, town, or 
                unincorporated area that has a population of 
                50,000 inhabitants or less, other than an 
                urbanized area immediately adjacent to a city, 
                town, or unincorporated area that has a 
                population in excess of 50,000 inhabitants.
                  (B) Water and waste disposal grants and 
                direct and guaranteed loans.--For the purpose 
                of water and waste disposal grants and direct 
                and guaranteed loans provided under paragraphs 
                (1) and (2) of section 306(a), the terms 
                ``rural'' and ``rural area'' mean a city, town, 
                or unincorporated area that has a population of 
                no more than 10,000 inhabitants.
                  (C) Community facility loans and grants.--For 
                the purpose of community facility direct and 
                guaranteed loans and grants under paragraphs 
                (1), (19), (20), and (21) of section 306(a), 
                the terms ``rural'' and ``rural area'' mean a 
                city, town, or unincorporated area that has a 
                population of no more than 50,000 inhabitants.
                  (D) Business and industry direct and 
                guaranteed loans.--For the purpose of business 
                and industry direct and guaranteed loans under 
                section 310B(a)(1), the terms ``rural'' and 
                ``rural area'' mean any area other than a city 
                or town that has a population of greater than 
                50,000 inhabitants and the immediately adjacent 
                urbanized area of such city or town.
                  (E) Multijurisdictional regional planning 
                organizations; national rural development 
                partnership.--In sections 306(a)(23) and 377, 
                the term ``rural area'' means--
                          (i) all the territory of a State that 
                        is not within the boundary of any 
                        standard metropolitan statistical area; 
                        and
                          (ii) all territory within any 
                        standard metropolitan statistical area 
                        within a census tract having a 
                        population density of less than 20 persons 
                        per square mile, as determined by the 
                        Secretary according to the most recent 
                        census of the United States as of any date.
                  (F) Rural entrepreneurs and microenterprise 
                assistance program; National rural cooperative 
                and business equity fund.--In section 378 and 
                subtitle G, the term ``rural area'' means an 
                area that is located--
                          (i) outside a standard metropolitan 
                        statistical area; or
                          (ii) within a community that has a 
                        population of 50,000 inhabitants or 
                        less.

           *       *       *       *       *       *       *

    (b) As used in sections 307(e), 331D, 335 (e) and (f), 
338(b), 352 (b) and (c), 353, and 357:
          (1) The term ``borrower'' means any farm borrower who 
        has outstanding obligations to the Secretary under any 
        farmer program loan, without regard to whether the loan 
        has been accelerated, but does not include any farm 
        borrower all of whose loans and accounts have been 
        foreclosed on or liquidated, voluntarily or otherwise.

           *       *       *       *       *       *       *


SEC. 377. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    (a) Definitions.--In this section:
          (1) Agency with rural responsibilities.--The term 
        ``agency with rural responsibilities'' means any 
        executive agency (as defined in section 105 of title 5, 
        United States Code) that--
                  (A) implements Federal law targeted at rural 
                areas, including--
                          (i) the Act of April 24, 1950 
                        (commonly known as the ``Granger-Thye 
                        Act'') (64 Stat. 82, chapter 9);
                          (ii) the Intergovernmental 
                        Cooperation Act of 1968 (82 Stat. 
                        1098);
                          (iii) section 41742 of title 49, 
                        United States Code;
                          (iv) the Rural Development Act of 
                        1972 (86 Stat. 657);
                          (v) the Rural Development Policy Act 
                        of 1980 (94 Stat. 1171);
                          (vi) the Rural Electrification Act of 
                        1936 (7 U.S.C. 901 et seq.);
                          (vii) amendments made to section 334 
                        of the Public Health Service Act (42 
                        U.S.C. 254g) by the Rural Health 
                        Clinics Act of 1983 (97 Stat. 1345); 
                        and
                          (viii) the Rural Housing Amendments 
                        of 1983 (97 Stat. 1240) and the 
                        amendments made by the Rural Housing 
                        Amendments of 1983 to title V of the 
                        Housing Act of 1949 (42 U.S.C. 1471 et 
                        seq.); or
                  (B) administers a program that has a 
                significant impact on rural areas, including--
                          (i) the Appalachian Regional 
                        Commission;
                          (ii) the Department of Agriculture;
                          (iii) the Department of Commerce;
                          (iv) the Department of Defense;
                          (v) the Department of Education;
                          (vi) the Department of Energy;
                          (vii) the Department of Health and 
                        Human Services;
                          (viii) the Department of Housing and 
                        Urban Development;
                          (ix) the Department of the Interior;
                          (x) the Department of Justice;
                          (xi) the Department of Labor;
                          (xii) the Department of 
                        Transportation;
                          (xiii) the Department of the 
                        Treasury;
                          (xiv) the Department of Veterans 
                        Affairs;
                          (xv) the Environmental Protection 
                        Agency;
                          (xvi) the Federal Emergency 
                        Management Administration;
                          (xvii) the Small Business 
                        Administration;
                          (xviii) the Social Security 
                        Administration;
                          (xix) the Federal Reserve System;
                          (xx) the United States Postal 
                        Service;
                          (xxi) the Corporation for National 
                        Service;
                          (xxii) the National Endowment for the 
                        Arts and the National Endowment for the 
                        Humanities; and
                          (xxiii) other agencies, commissions, 
                        and corporations.
          (2) Coordinating committee.--The term ``Coordinating 
        Committee'' means the National Rural Development 
        Coordinating Committee established by subsection (c).
          (3) Partnership.--The term ``Partnership'' means the 
        National Rural Development Partnership continued by 
        subsection (b).
          (4) State rural development council.--The term 
        ``State rural development council'' means a State rural 
        development council that meets the requirements of 
        subsection (d).
    (b) Partnership.--
          (1) In general.--The Secretary shall continue the 
        National Rural Development Partnership composed of--
                  (A) the Coordinating Committee; and
                  (B) State rural development councils.
          (2) Purposes.--The purposes of the Partnership are--
                  (A) to empower and build the capacity of 
                States and rural communities within States to 
                design unique responses to their own special 
                rural development needs, with local 
                determinations of progress and selection of 
                projects and activities;
                  (B) to encourage participants to be flexible 
                and innovative in establishing new partnerships 
                and trying fresh, new approaches to rural 
                development issues, with responses to rural 
                development that use different approaches to 
                fit different situations; and
                  (C) to encourage all partners in the 
                Partnership (Federal, State, local, and tribal 
                governments, the private sector, and nonprofit 
                organizations) to be fully engaged and share 
                equally in decisions.
          (3) Governing panel.--
                  (A) In general.--A panel consisting of 
                representatives of the Coordinating Committee 
                and State rural development councils shall be 
                established to lead and coordinate the 
                strategic operation, policies, and practices of 
                the Partnership.
                  (B) Annual reports.--In conjunction with the 
                Coordinating Committee and State rural 
                development councils, the panel shall prepare 
                and submit to Congress an annual report on the 
                activities of the Partnership.
          (4) Role of federal government.--The role of the 
        Federal Government in the Partnership shall be that of 
        a partner and facilitator, with Federal agencies 
        authorized--
                  (A) to cooperate with States to implement the 
                Partnership;
                  (B) to provide States with the technical and 
                administrative support necessary to plan and 
                implement tailored rural development strategies 
                to meet local needs;
                  (C) to ensure that the head of each agency 
                referred to in subsection (a)(1)(B) designates 
                a senior-level agency official to represent the 
                agency on the Coordinating Committee and 
                directs appropriate field staff to participate 
                fully with the State rural development council 
                within the jurisdiction of the field staff; and
                  (D) to enter into cooperative agreements 
                with, and to provide grants and other 
                assistance to State rural development councils.
          (5) Role of private and nonprofit sector 
        organizations.--Private and nonprofit sector 
        organizations are encouraged--
                  (A) to act as full partners in the 
                Partnership and State rural development 
                councils; and
                  (B) to cooperate with participating 
                government organizations in developing 
                innovative approaches to the solution of rural 
                development problems.
    (c) National Rural Development Coordinating Committee.--
          (1) Establishment.--The Secretary shall establish a 
        National Rural Development Coordinating Committee.
          (2) Composition.--The Coordinating Committee shall be 
        composed of--
                  (A) 1 representative of each agency with 
                rural responsibilities that elects to 
                participate in the Coordinating Committee; and
                  (B) representatives, approved by the 
                Secretary, of--
                          (i) national associations of State, 
                        regional, local, and tribal governments 
                        and intergovernmental and 
                        multijurisdictional agencies and 
                        organizations;
                          (ii) national public interest groups;
                          (iii) other national nonprofit 
                        organizations that elect to participate 
                        in the activities of the Coordinating 
                        Committee; and
                          (iv) the private sector.
          (3) Duties.--The Coordinating Committee shall--
                  (A) provide support for the work of the State 
                rural development councils;
                  (B) facilitate coordination among Federal 
                programs and activities, and with State, local, 
                tribal, and private programs and activities, 
                affecting rural development;
                  (C) enhance the effectiveness, 
                responsiveness, and delivery of Federal 
                programs in rural areas;
                  (D) gather and provide to Federal authorities 
                information and input for the development and 
                implementation of Federal programs impacting 
                rural economic and community development;
                  (E) notwithstanding any other provision of 
                law, review and comment on policies, 
                regulations, and proposed legislation that 
                affect or would affect rural areas;
                  (F) provide technical assistance to State 
                rural development councils for the 
                implementation of Federal programs;
                  (G) notwithstanding any other provision of 
                law, develop and facilitate strategies to 
                reduce or eliminate administrative and 
                regulatory impediments; and
                  (H) require each State receiving funds under 
                this section to submit an annual report on the 
                use of the funds by the State, including a 
                description of strategic plans, goals, 
                performance measures, and outcomes for the 
                State rural development council of the State.
          (4) Election not to participate.--An agency with 
        rural responsibilities that elects not to participate 
        in the Partnership and the Coordinating Committee shall 
        submit to Congress a report that describes--
                  (A) how the programmatic responsibilities of 
                the Federal agency that target or have an 
                impact on rural areas are better achieved 
                without participation by the agency in the 
                Partnership; and
                  (B) a more effective means of partnership-
                building and collaboration to achieve the 
                programmatic responsibilities of the agency.
    (d) State Rural Development Councils.--
          (1) Establishment.--Notwithstanding chapter 63 of 
        title 31, United States Code, each State may elect to 
        participate in the Partnership by entering into an 
        agreement with the Secretary to establish a State rural 
        development council.
          (2) State diversity.--Each State rural development 
        council shall--
                  (A) have a nonpartisan membership that is 
                broad and representative of the economic, 
                social, and political diversity of the State; 
                and
                  (B) carry out programs and activities in a 
                manner that reflects the diversity of the 
                State.
          (3) Duties.--A State rural development council 
        shall--
                  (A) facilitate collaboration among Federal, 
                State, local, and tribal governments and the 
                private and nonprofit sectors in the planning 
                and implementation of programs and policies 
                that target or have an impact on rural areas of 
                the State;
                  (B) enhance the effectiveness, 
                responsiveness, and delivery of Federal and 
                State programs in rural areas of the State;
                  (C) gather and provide to the Coordinating 
                Committee and other appropriate organizations 
                information on the condition of rural areas in 
                the State;
                  (D) monitor and report on policies and 
                programs that address, or fail to address, the 
                needs of the rural areas of the State;
                  (E) provide comments to the Coordinating 
                Committee and other appropriate organizations 
                on policies, regulations, and proposed 
                legislation that affect or would affect the 
                rural areas of the State;
                  (F) notwithstanding any other provision of 
                law, in conjunction with the Coordinating 
                Committee, facilitate the development of 
                strategies to reduce or eliminate conflicting 
                or duplicative administrative or regulatory 
                requirements of Federal, State, local, and 
                tribal governments;
                  (G) use grant or cooperative agreement funds 
                provided by the Partnership under an agreement 
                entered into under paragraph (1) to--
                          (i) retain an Executive Director and 
                        such support staff as are necessary to 
                        facilitate and implement the directives 
                        of the State rural development council; 
                        and
                          (ii) pay expenses associated with 
                        carrying out subparagraphs (A) through 
                        (F); and
                  (H)(i) provide to the Coordinating Committee 
                an annual plan with goals and performance 
                measures; and
                  (ii) submit to the Coordinating Committee an 
                annual report on the progress of the State 
                rural development council in meeting the goals 
                and measures.
          (4) Authorities.--A State rural development council 
        may--
                  (A) solicit funds to supplement and match 
                funds provided under paragraph (3)(G); and
                  (B) engage in activities, in addition to 
                those specified in paragraph (3), appropriate 
                to accomplish the purposes for which the State 
                rural development council is established.
          (5) Comments or recommendations.--A State rural 
        development council may provide comments and 
        recommendations to an agency with rural 
        responsibilities related to the activities of the State 
        rural development council within the State.
          (6) Actions of state rural development council 
        members.--When carrying out a program or activity 
        authorized by a State rural development council or this 
        subtitle, a member of the council shall be regarded as 
        a full-time employee of the Federal Government for 
        purposes of chapter 171 of title 28, United States 
        Code, and the Federal Advisory Committee Act (5 U.S.C. 
        App.).
          (7) Federal participation in state rural development 
        councils.--
                  (A) In general.--The State Director for Rural 
                Development of a State, other employees of the 
                Department of Agriculture, and employees of 
                other Federal agencies that elect to 
                participate in the Partnership shall fully 
                participate in the governance and operations of 
                State rural development councils on an equal 
                basis with other members of the State rural 
                development councils.
                  (B) Conflicts.--A Federal employee who 
                participates in a State rural development 
                council shall not participate in the making of 
                any council decision if the agency represented 
                by the Federal employee has any financial or 
                other interest in the outcome of the decision.
                  (C) Federal guidance.--The Office of 
                Government Ethics, in consultation with the 
                Attorney General, shall issue guidance to all 
                Federal employees that participate in State 
                rural development councils that describes 
                specific decisions that--
                          (i) would constitute a conflict of 
                        interest for the Federal employee; and
                          (ii) from which the Federal employee 
                        must recuse himself or herself.
    (e) Administrative Support of the Partnership.--
          (1) Detail of employees.--
                  (A) In general.--In order to provide 
                experience in intergovernmental collaboration, 
                the head of an agency with rural 
                responsibilities that elects to participate in 
                the Partnership may, and is encouraged to, 
                detail an employee of the agency with rural 
                responsibilities to the Partnership without 
                reimbursement for a period of up to 12 months.
                  (B) Civil service status.--The detail shall 
                be without interruption or loss of civil 
                service status or privilege.
          (2) Additional support.--The Secretary shall provide 
        for any additional support staff to the Partnership as 
        the Secretary determines to be necessary to carry out 
        the duties of the Partnership.
    (f) Funding.--
          (1) Authorization of appropriations.--
                  (A) In general.--There are authorized to be 
                appropriated such sums as are necessary to 
                carry out this section.
                  (B) Amount of financial assistance.--In 
                providing financial assistance to State rural 
                development councils, the Secretary and heads 
                of other Federal agencies shall provide 
                assistance that, to the maximum extent 
                practicable, is--
                          (i) uniform in amount; and
                          (ii) targeted to newly created State 
                        rural development councils.
                  (C) Federal share.--The Secretary shall 
                develop a plan to decrease, over time, the 
                Federal share of the cost of the core 
                operations of State rural development councils.
          (2) Federal agencies.--
                  (A) In general.--Notwithstanding any other 
                provision of law limiting the ability of an 
                agency to provide funds to the Partnership with 
                other agencies, in order to carry out the 
                purposes described in subsection (b)(2), the 
                Partnership shall be eligible to receive 
                grants, gifts, contributions, or technical 
                assistance from, or enter into contracts with, 
                any Federal agency.
                  (B) Assistance.--Federal agencies are 
                encouraged to use funds made available for 
                programs that target or have an impact on rural 
                areas to provide assistance to, and enter into 
                contracts with, the Partnership, as described 
                in subparagraph (A).
          (3) Contributions.--The Partnership may accept 
        private contributions.
          (4) Federal financial support for state rural 
        development councils.--Notwithstanding any other 
        provision of law, a Federal agency may use funds made 
        available under paragraph (1) or (2) to enter into a 
        cooperative agreement, contract, or other agreement 
        with a State rural development council to support the 
        core operations of the State rural development council, 
        regardless of the legal form of organization of the 
        State rural development council.
    (g) Matching Requirements for State Rural Development 
Councils.--
          (1) In general.--Except as provided in paragraph (2), 
        a State rural development council shall provide 
        matching funds, or in-kind goods or services, to 
        support the activities of the State rural development 
        council in an amount that is not less than 33 percent 
        of the amount of Federal funds received under an 
        agreement under subsection (d)(1).
          (2) Exceptions to matching requirement for certain 
        federal funds.--Paragraph (1) shall not apply to funds, 
        grants, funds provided under contracts or cooperative 
        agreements, gifts, contributions, or technical 
        assistance received by a State rural development 
        council from a Federal agency that are used--
                  (A) to support 1 or more specific program or 
                project activities; or
                  (B) to reimburse the State rural development 
                council for services provided to the Federal 
                agency providing the funds, grants, funds 
                provided under contracts or cooperative 
                agreements, gifts, contributions, or technical 
                assistance.
    (h) Termination.--The authority provided under this section 
shall terminate on the date that is 5 years after the date of 
enactment of this section.

SEC. 378. RURAL ENTREPRENEURS AND MICROENTERPRISE ASSISTANCE PROGRAM.

    (a) Definitions.--In this section:
          (1) Economically disadvantaged microentrepreneur.--
        The term ``economically disadvantaged 
        microentrepreneur'' means an owner, majority owner, or 
        developer of a microenterprise that has the ability to 
        compete in the private sector but has been impaired due 
        to diminished capital and credit opportunities, as 
        compared to other microentrepreneurs in the industry.
          (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
          (3) Intermediary.--The term ``intermediary'' means a 
        private, nonprofit entity that provides assistance--
                  (A) to a microenterprise development 
                organization; or
                  (B) for a microenterprise development 
                program.
          (4) Low-income individual.--The term ``low-income 
        individual'' means an individual with an income 
        (adjusted for family size) of not more than the greater 
        of--
                  (A) 80 percent of median income of an area; 
                or
                  (B) 80 percent of the statewide 
                nonmetropolitan area median income.
          (5) Microcredit.--The term ``microcredit'' means a 
        business loan or loan guarantee of not more than 
        $35,000 provided to a rural entrepreneur.
          (6) Microenterprise.--The term ``microenterprise'' 
        means a sole proprietorship, joint enterprise, limited 
        liability company, partnership, corporation, or 
        cooperative that--
                  (A) has 5 or fewer employees; and
                  (B) is unable to obtain sufficient credit, 
                equity, or banking services elsewhere, as 
                determined by the Secretary.
          (7) Microenterprise development organization.--
                  (A) In general.--The term ``microenterprise 
                development organization'' means a nonprofit 
                entity that provides training and technical 
                assistance to rural entrepreneurs and access to 
                capital or another service described in 
                subsection (c) to rural entrepreneurs.
                  (B) Inclusions.--The term ``microenterprise 
                development organization'' includes an 
                organization described in subparagraph (A) with 
                a demonstrated record of delivering services to 
                economically disadvantaged microentrepreneurs.
          (8) Microenterprise development program.--The term 
        ``microenterprise development organization'' means a 
        program administered by an organization serving a rural 
        area.
          (9) Microentrepreneur.--The term 
        ``microentrepreneur'' means the owner, operator, or 
        developer of a microenterprise.
          (10) Program.--The term ``program'' means the rural 
        entrepreneur and microenterprise program established 
        under subsection (b)(1).
          (11) Qualified organization.--The term ``qualified 
        organization'' means--
                  (A) a microenterprise development 
                organization or microenterprise development 
                program that has a demonstrated record of 
                delivering microenterprise services to rural 
                entrepreneurs, as demonstrated by the 
                development of an effective plan of action and 
                the possession of necessary resources to 
                deliver microenterprise services to rural 
                entrepreneurs effectively, as determined by the 
                Secretary;
                  (B) an intermediary that has a demonstrated 
                record of delivery assistance to 
                microenterprise development organizations or 
                microenterprise development programs;
                  (C) a microenterprise development 
                organization or microenterprise development 
                program that--
                          (i) serves rural entrepreneurs; and
                          (ii) enters into an agreement with a 
                        local community, in conjunction with a 
                        State or local government or Indian 
                        tribe, to provide assistance described 
                        in subsection (c);
                  (D) an Indian tribe, the tribal government of 
                which certifies to the Secretary that no 
                microenterprise development organization or 
                microenterprise development program exists 
                under the jurisdiction of the Indian tribe; or
                  (E) a group of 2 or more organizations or 
                Indian tribes described in subparagraph (A), 
                (B), (C), or (D) that agree to act jointly as a 
                qualified organization under this section.
          (12) Rural capacity building service.--The term 
        ``rural capacity building service'' means a service 
        provided to an organization that--
                  (A) is, or is in the process of becoming, a 
                microenterprise development organization or 
                microenterprise development program; and
                  (B) serves rural areas for the purpose of 
                enhancing the ability of the organization to 
                provide training, technical assistance, and 
                other related services to rural entrepreneurs.
          (13) Rural entrepreneur.--The term ``rural 
        entrepreneur'' means a microentrepreneur, or 
        prospective microentrepreneur--
                  (A) the principal place of business of which 
                is in a rural area; and
                  (B) that is unable to obtain sufficient 
                training, technical assistance, or microcredit 
                elsewhere, as determined by the Secretary.
          (14) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture, acting through the Rural 
        Business-Cooperative Service.
          (15) Training and technical assistance.--
                  (A) In general.--The term ``training and 
                technical assistance'' means assistance 
                provided to rural entrepreneurs to develop the 
                skills the rural entrepreneurs need to plan, 
                market, and manage their own business.
                  (B) Inclusions.--The term ``training and 
                technical assistance'' includes assistance 
                provided for the purpose of--
                          (i) enhancing business planning, 
                        marketing, management, or financial 
                        management skills; and
                          (ii) obtaining microcredit.
          (16) Tribal government.--The term ``tribal 
        government'' means the governing body of an Indian 
        tribe.
    (b) Establishment.--
          (1) In general.--From amounts made available under 
        subsection (h), the Secretary shall establish a rural 
        entrepreneur and microenterprise program.
          (2) Purpose.--The purpose of the program shall be to 
        provide low and moderate income individuals with--
                  (A) the skills necessary to establish new 
                small businesses in rural areas; and
                  (B) continuing technical assistance as the 
                individuals begin operating the small 
                businesses.
    (c) Assistance.--
          (1) In general.--The Secretary may make a grant under 
        this section to a qualified organization to--
                  (A) provide training, technical assistance, 
                or microcredit to a rural entrepreneur;
                  (B) provide training, operational support, or 
                a rural capacity building service to a 
                qualified organization to assist the qualified 
                organization in developing microenterprise 
                training, technical assistance, and other 
                related services;
                  (C) assist in researching and developing the 
                best practices in delivering training, 
                technical assistance, and microcredit to rural 
                entrepreneurs; and
                  (D) to carry out such other projects and 
                activities as the Secretary determines are 
                consistent with the purposes of this section.
          (2) Allocation.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), of the amount of funds made available 
                for a fiscal year to make grants under this 
                section, the Secretary shall ensure that--
                          (i) not less than 75 percent of funds 
                        are used to carry out activities 
                        described in paragraph (1)(A); and
                          (ii) not more than 25 percent of the 
                        funds are used to carry out activities 
                        described in subparagraphs (B) through 
                        (D) of paragraph (1).
                  (B) Limitation on grant amount.--No single 
                qualified organization may receive more than 10 
                percent of the total funds that are made 
                available for a fiscal year to carry out this 
                section.
                  (C) Administrative expenses.--Not more than 
                15 percent of assistance received by a 
                qualified organization for a fiscal year under 
                this section may be used for administrative 
                expenses.
    (d) Subgrants.--Subject to such regulations as the 
Secretary may promulgate, a qualified organization that 
receives a grant under this section may use the grant to 
provide assistance to other qualified organizations, such as 
small or emerging qualified organizations.
    (e) Low-Income Individuals.--The Secretary shall ensure 
that not less than 50 percent of the grants made under this 
section is used to benefit low-income individuals identified by 
the Secretary, including individuals residing on Indian 
reservations.
    (f) Diversity.--In making grants under this section, the 
Secretary shall ensure, to the maximum extent practicable, that 
grant recipients include qualified organizations--
          (1) of varying sizes; and
          (2) that serve racially and ethnically diverse 
        populations.
    (g) Cost Sharing.--
          (1) Federal share.--The Federal share of the cost of 
        a project carried out using funds from a grant under 
        this section shall be 75 percent.
          (2) Form of non-federal share.--The non-Federal share 
        of the cost of a project described in paragraph (1) may 
        be provided--
                  (A) in cash (including through fees, grants 
                (including community development block grants), 
                and gifts); or
                  (B) in kind.
    (h) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this Act, and on October 1, 2002, 
        and each October 1 thereafter through October 1, 2005, 
        out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture to carry out 
        this section $10,000,000, to remain available until 
        expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 379. INTERAGENCY COORDINATING COMMITTEE FOR RURAL SENIORS.

    (a) In General.--The Secretary shall establish an 
interagency coordinating committee (referred to in this section 
as the ``Committee'') to examine the special problems of rural 
seniors.
    (b) Membership.--The Committee shall be comprised of--
          (1) the Undersecretary of Agriculture for Rural 
        Development, who shall serve as chairperson of the 
        Committee;
          (2) 2 representatives of the Secretary of Health and 
        Human Services, of whom--
                  (A) 1 shall have expertise in the field of 
                health care; and
                  (B) 1 shall have expertise in the field of 
                programs under the Older Americans Act of 1965 
                (42 U.S.C. 3001 et seq.);
          (3) 1 representative of the Secretary of Housing and 
        Urban Development;
          (4) 1 representative of the Secretary of 
        Transportation; and
          (5) representatives of such other Federal agencies as 
        the Secretary may designate.
    (c) Duties.--The Committee shall--
          (1) study health care, transportation, technology, 
        housing, accessibility, and other areas of need of 
        rural seniors;
          (2) identify successful examples of senior care 
        programs in rural communities that could serve as 
        models for other rural communities; and
          (3) not later than 1 year after the date of enactment 
        of this section, submit to the Secretary, the Committee 
        on Agriculture of the House of Representatives, and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate recommendations for legislative and 
        administrative action.
    (d) Funding.--Funds available to any Federal agency may be 
used to carry out interagency activities under this section.

SEC. 379A. GRANTS FOR PROGRAMS FOR RURAL SENIORS.

    (a) In General.--The Secretary shall make grants to 
nonprofit organizations (including cooperatives) to pay the 
Federal share of the cost of programs that--
          (1) provide facilities, equipment, and technology for 
        seniors in a rural area; and
          (2) may be replicated in other rural areas.
    (b) Federal Share.--The Federal share of a grant under this 
section shall be not more than 20 percent of the cost of a 
program described in subsection (a).
    (c) Leveraging.--In selecting programs to receive grants 
under section, the Secretary shall give priority to proposals 
that leverage resources to meet multiple rural community goals.
    (d) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $25,000,000 for 
each of fiscal years 2003 through 2006.

SEC. 379B. RURAL TELEWORK.

    (a) Definitions.--In this section:
          (1) Eligible organization.--The term ``eligible 
        organization'' means a nonprofit entity, an educational 
        institution, an Indian tribe (as defined in section 4 
        of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450b)), or any other 
        organization that meets the requirements of this 
        section and such other requirements as are established 
        by the Secretary.
          (2) Institute.--The term ``institute'' means a 
        regional rural telework institute established using a 
        grant under this subsection (b).
          (3) Telework.--The term ``telework'' means the use of 
        telecommunications to perform work functions at a rural 
        work center located outside the place of business of an 
        employer.
    (b) Rural Telework Institute.--
          (1) In general.--The Secretary shall make a grant to 
        an eligible organization to pay the Federal share of 
        the cost of establishing and operating a national rural 
        telework institute to carry out projects described in 
        paragraph (4).
          (2) Eligible organizations.--The Secretary shall 
        establish criteria that an organization shall meet to 
        be eligible to receive a grant under this subsection.
          (3) Deadline for initial grant.--Not later than 1 
        year after the date on which funds are first made 
        available to carry out this subsection, the Secretary 
        shall make the initial grant under this subsection.
          (4) Projects.--The institute shall use grant funds 
        obtained under this subsection to carry out a 5-year 
        project--
                  (A) to serve as a clearinghouse for telework 
                research and development;
                  (B) to conduct outreach to rural communities 
                and rural workers;
                  (C) to develop and share best practices in 
                rural telework throughout the United States;
                  (D) to develop innovative, market-driven 
                telework projects and joint ventures with the 
                private sector that employ workers in rural 
                areas in jobs that promote economic self-
                sufficiency;
                  (E) to share information about the design and 
                implementation of telework arrangements;
                  (F) to support private sector businesses that 
                are transitioning to telework;
                  (G) to support and assist telework projects 
                and individuals at the State and local level; 
                and
                  (H) to perform such other functions as the 
                Secretary considers appropriate.
          (5) Non-federal share.--
                  (A) In general.--As a condition of receiving 
                a grant under this subsection, an eligible 
                organization shall agree to obtain, after the 
                application of the eligible organization has 
                been approved and notice of award has been 
                issued, contributions from non-Federal sources 
                that are equal to--
                          (i) during each of the first, second, 
                        and third years of a project, 50 
                        percent of the amount of the grant; and
                          (ii) during each of the fourth and 
                        fifth years of the project, 100 percent 
                        of the amount of the grant.
                  (B) Indian tribes.--Notwithstanding 
                subparagraph (A), an Indian tribe may use 
                Federal funds made available to the tribe for 
                self-governance to pay the non-Federal 
                contributions required under subparagraph (A).
                  (C) Form.--The non-Federal contributions 
                required under subparagraph (A) may be in the 
                form of in-kind contributions, including office 
                equipment, office space, and services.
    (c) Telework Grants.--
          (1) In general.--Subject to paragraphs (2) through 
        (5), the Secretary shall make grants to eligible 
        entities to pay the Federal share of the cost of--
                  (A) obtaining equipment and facilities to 
                establish or expand telework locations in rural 
                areas; and
                  (B) operating telework locations in rural 
                areas.
          (2) Eligible organizations.--To be eligible to 
        receive a grant under this subsection, an eligible 
        entity shall--
                  (A) be a nonprofit organization or 
                educational institution in a rural area; and
                  (B) submit to, and receive the approval of, 
                the Secretary of an application for the grant 
                that demonstrates that the eligible entity has 
                adequate resources and capabilities to 
                establish or expand a telework location in a 
                rural area.
          (3) Non-federal share.--
                  (A) In general.--As a condition of receiving 
                a grant under this subsection, an eligible 
                organization shall agree to obtain, after the 
                application of the eligible organization has 
                been approved and notice of award has been 
                issued, contributions from non-Federal sources 
                that are equal to 50 percent of the amount of 
                the grant.
                  (B) Indian tribes.--Notwithstanding 
                subparagraph (A), an Indian tribe may use 
                Federal funds made available to the tribe for 
                self-governance to pay the non-Federal 
                contributions required under subparagraph (A).
                  (C) Sources.--The non-Federal contributions 
                required under subparagraph (A)--
                          (i) may be in the form of in-kind 
                        contributions, including office 
                        equipment, office space, and services; 
                        and
                          (ii) may not be made from funds made 
                        available for community development 
                        block grants under title I of the 
                        Housing and Community Development Act 
                        of 1974 (42 U.S.C. 5301 et seq.).
          (4) Duration.--The Secretary may not provide a grant 
        under this subsection to establish, expand, or operate 
        a telework location in a rural area after the date that 
        is 2 years after the establishment of the telework 
        location.
          (5) Maximum amount of grant.--The amount of a grant 
        provided to an eligible entity under this subsection 
        shall not exceed $500,000.
    (d) Applicability of Certain Federal Law.--An entity that 
receives funds under this section shall be subject to the 
provisions of Federal law (including regulations), administered 
by the Secretary of Labor or the Equal Employment Opportunity 
Commission, that govern the responsibilities of employers to 
employees.
    (e) Regulations.--Not later than 180 days after the date of 
enactment of this section, the Secretary shall promulgate 
regulations to carry out this section.
    (f) Authorization of Appropriation.--There is authorized to 
be appropriated to carry out this section $30,000,000 for each 
of fiscal years 2002 through 2006, of which $5,000,000 shall be 
provided to establish an institute under subsection (b).

SEC. 379C. HISTORIC BARN PRESERVATION.

    (a) Definitions.--In this section:
          (1) Barn.--The term ``barn'' means a building (other 
        than a dwelling) on a farm, ranch, or other 
        agricultural operation for--
                  (A) housing animals;
                  (B) storing or processing crops;
                  (C) storing and maintaining agricultural 
                equipment; or
                  (D) serving an essential or useful purpose 
                related to agriculture on the adjacent land.
          (2) Eligible applicant.--The term ``eligible 
        applicant'' means--
                  (A) a State department of agriculture (or a 
                designee);
                  (B) a national or State nonprofit 
                organization that--
                          (i) is exempt from tax under section 
                        501(c)(3) of the Internal Revenue Code 
                        of 1986; and
                          (ii) has experience or expertise, as 
                        determined by the Secretary, in the 
                        identification, evaluation, 
                        rehabilitation, preservation, or 
                        protection of historic barns; and
                  (C) a State historic preservation office.
          (3) Historic barn.--The term ``historic barn'' means 
        a barn that--
                  (A) is at least 50 years old;
                  (B) retains sufficient integrity of design, 
                materials, and construction to clearly identify 
                the barn as an agricultural building; and
                  (C) meets the criteria for listing on 
                National, State, or local registers or 
                inventories of historic structures.
          (4) Secretary.--The term ``Secretary'' means the 
        Secretary, acting through the Undersecretary of Rural 
        Development.
    (b) Program.--The Secretary shall establish a historic barn 
preservation program--
          (1) to assist States in developing a listing of 
        historic barns;
          (2) to collect and disseminate information on 
        historic barns;
          (3) to foster educational programs relating to the 
        history, construction techniques, rehabilitation, and 
        contribution to society of historic barns; and
          (4) to sponsor and conduct research on--
                  (A) the history of barns; and
                  (B) best practices to protect and 
                rehabilitate historic barns from the effects of 
                decay, fire, arson, and natural disasters.
    (c) Grants.--
          (1) In general.--The Secretary may make grants to, or 
        enter into contracts or cooperative agreements with, 
        eligible applicants to carry out an eligible project 
        under paragraph (2).
          (2) Eligible projects.--A grant under this subsection 
        may be made to an eligible entity for a project--
                  (A) to rehabilitate or repair a historic 
                barn;
                  (B) to preserve a historic barn through--
                          (i) the installation of a fire 
                        protection system, including 
                        fireproofing or fire detection system 
                        and sprinklers; and
                          (ii) the installation of a system to 
                        prevent vandalism; and
                  (C) to identify, document, and conduct 
                research on a historic barn to develop and 
                evaluate appropriate techniques or best 
                practices for protecting historic barns.
          (3) Requirements.--An eligible applicant that 
        receives a grant for a project under this subsection 
        shall comply with any standards established by the 
        Secretary of the Interior for historic preservation 
        projects.
    (d) Funding.--There is authorized to be appropriated to 
carry out this section, $25,000,000 for the period of fiscal 
years 2002 through 2006, to remain available until expended.

SEC. 379D. GRANTS FOR EMERGENCY WEATHER RADIO TRANSMITTERS.

    (a) In General.--The Secretary, acting through the 
Administrator of the Rural Utilities Service, may make grants 
to public and nonprofit entities for the Federal share of the 
cost of acquiring radio transmitters to increase coverage of 
rural areas by the emergency weather radio broadcast system of 
the National Oceanic and Atmospheric Administration.
    (b) Eligibility.--To be eligible for a grant under this 
section, an applicant shall provide to the Secretary--
          (1) a binding commitment from a tower owner to place 
        the transmitter on a tower; and
          (2) a description of how the tower placement will 
        increase coverage of a rural area by the emergency 
        weather radio broadcast system of the National Oceanic 
        and Atmospheric Administration.
    (c) Federal Share.--A grant provided under this section 
shall be not more than 75 percent of the cost of acquiring a 
radio transmitter described in subsection (a).
    (d) Authorization.--There is authorized to be appropriated 
to carry out this section $2,000,000 for each of fiscal years 
2002 through 2006.

SEC. 379E. BIOENERGY AND BIOCHEMICAL PROJECTS.

    In carrying out rural development loan, loan guarantee, and 
grant programs under this title, the Secretary shall provide a 
priority for bioenergy and biochemical projects.''.

            Subtitle E--Rural Community Advancement Program

SEC. 381A. DEFINITIONS.

    In this subtitle:
          [(1) Rural and rural area.--The terms ``rural'' and 
        ``rural area'' mean, subject to section 306(a)(7), a 
        city, town, or unincorporated area that has a 
        population of 50,000 inhabitants or less, other than an 
        urbanized area immediately adjacent to a city, town, or 
        unincorporated area that has a population in excess of 
        50,000 inhabitants.]
          [(2)] (1) State.--The term ``State'' means each of 
        the 50 States, the District of Columbia, the 
        Commonwealth of Puerto Rico, Guam, the Virgin Islands 
        of the United States, American Samoa, the Commonwealth 
        of the Northern Mariana Islands, the Trust Territory of 
        the Pacific Islands, and the Federated States of 
        Micronesia.
          [(3)] (2) State director.--The term ``State 
        director'' means, with respect to a State, the Director 
        of the Rural Economic and Community Development State 
        Office.

SEC. 381B. ESTABLISHMENT.

    The Secretary shall establish a rural community advancement 
program to provide grants, loans, loan guarantees, and other 
assistance to meet the rural development needs of local 
communities in States and federally recognized Indian tribes.

           *       *       *       *       *       *       *


SEC. 382M. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated to 
the Authority to carry out this subtitle $30,000,000 for each 
of fiscal years 2001 through [2002] 2006, to remain available 
until expended.
    (b) Administrative Expenses.--Not more than 5 percent of 
the amount appropriated under subsection (a) for a fiscal year 
shall be used for administrative expenses of the Authority.

SEC. 382N. TERMINATION OF AUTHORITY.

    This subtitle and the authority provided under this 
subtitle expire on October 1, [2002] 2006.

    Subtitle G--National Rural Cooperative and Business Equity Fund

SEC. 383A. SHORT TITLE.

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

SEC. 383B. PURPOSE.

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

SEC. 383C. DEFINITIONS.

    In this subtitle:
          (1) Authorized private investor.--The term 
        ``authorized private investor'' means an individual, 
        legal entity, or affiliate or subsidiary of an 
        individual or legal entity that--
                  (A) is eligible to receive a loan guarantee 
                under this title;
                  (B) is eligible to receive a loan guarantee 
                under the Rural Electrification Act of 1936 (7 
                U.S.C. 901 et seq.);
                  (C) is created under the National Consumer 
                Cooperative Bank Act (12 U.S.C. 3011 et seq.);
                  (D) is an insured depository institution 
                subject to section 383E(b)(2);
                  (E) is a Farm Credit System institution 
                described in section 1.2(a) of the Farm Credit 
                Act of 1971 (12 U.S.C. 2002(a)); or
                  (F) is determined by the Board to be an 
                appropriate investor in the Fund.
          (2) Board.--The term ``Board'' means the board of 
        directors of the Fund established under section 383G.
          (3) Fund.--The term ``Fund'' means the National Rural 
        Cooperative and Business Equity Fund established under 
        section 383D.
          (4) Group of similar authorized private investors.--
        The term ``group of similar investors'' means any 1 of 
        the following:
                  (A) Insured depository institutions with 
                total assets of more than $250,000,000.
                  (B) Insured depository institutions with 
                total assets equal to or less than 
                $250,000,000.
                  (C) Farm Credit System institutions described 
                in section 1.2(a) of the Farm Credit Act of 
                1971 (12 U.S.C. 2002(a)).
                  (D) Cooperative financial institutions (other 
                than Farm Credit System institutions).
                  (E) Private investors, other than those 
                described in subparagraphs (A) through (D), 
                authorized by the Secretary.
                  (F) Other nonprofit organizations, including 
                credit unions.
          (5) Insured depository institution.--The term 
        ``insured depository institution'' means any bank or 
        savings association the deposits of which are insured 
        under the Federal Deposit Insurance Act (12 U.S.C. 1811 
        et seq.).
          (6) Rural business.--The term ``rural business'' 
        means a rural cooperative, a value-added agricultural 
        enterprise, or any other business located or locating 
        in a rural area.

SEC. 383D. ESTABLISHMENT.

    (a) Authority.--
          (1) In general.--On certification by the Secretary 
        that, to the maximum extent practicable, the parties 
        proposing to establish a fund provide a broad 
        representation of all of the groups of similar 
        authorized private investors described in subparagraphs 
        (A) through (F) of section 383C(4), the parties may 
        establish a non-Federal entity under State law to 
        purchase shares of, and manage a fund to be known as 
        the ``National Rural Cooperative and Business Equity 
        Fund'' to generate and provide equity capital to rural 
        businesses.
          (2) Ownership.--
                  (A) In general.--To the maximum extent 
                practicable, equity ownership of the Fund shall 
                be distributed among authorized private 
                investors representing all of the groups of 
                similar authorized private investors described 
                in subparagraphs (A) through (F) of section 
                383C(4).
                  (B) Exclusion of groups.--No group of 
                authorized private investors shall be excluded 
                from equity ownership of the Fund during any 
                period during which the Fund is in existence if 
                an authorized private investor representative 
                of the group is able and willing to invest in 
                the Fund.
    (b) Purposes.--The purposes of the Fund shall be--
          (1) to strengthen the economy of rural areas;
          (2) to further sustainable rural business 
        development;
          (3) to encourage--
                  (A) start-up rural businesses;
                  (B) increased opportunities for small and 
                minority-owned rural businesses; and
                  (C) the formation of new rural businesses;
          (4) to enhance rural employment opportunities;
          (5) to provide equity capital to rural businesses, 
        many of which have difficulty obtaining equity capital; 
        and
          (6) to leverage non-Federal funds for rural 
        businesses.
    (c) Articles of Incorporation and Bylaws.--The articles of 
incorporation and bylaws of the Fund shall set forth purposes 
of the Fund that are consistent with the purposes described in 
subsection (b).

SEC. 383E. INVESTMENT IN THE FUND.

    (a) In General.--Of the funds made available under section 
383H, the Secretary shall--
          (1) subject to subsection (b)(1), make available to 
        the Fund $150,000,000;
          (2) subject to subsection (c), guarantee 50 percent 
        of each investment made by an authorized private 
        investor in the Fund; and
          (3) subject to subsection (d), guarantee the 
        repayment of principal of, and accrued interest on, 
        debentures issued by the Fund to authorized private 
        investors.
    (b) Private Investment.--
          (1) Matching requirement.--Under subsection (a)(1), 
        the Secretary shall make an amount available to the 
        Fund only after an equal amount has been invested in 
        the Fund by authorized private investors in accordance 
        with this subtitle and the terms and conditions set 
        forth in the bylaws of the Fund.
          (2) Insured depository institutions.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C)--
                          (i) an insured depository institution 
                        may be an authorized private investor 
                        in the Fund; and
                          (ii) an investment in the Fund may be 
                        considered to be part of the record of 
                        an institution in meeting the credit 
                        needs of the community in which the 
                        institution is located under any 
                        applicable Federal law.
                  (B) Investment limit.--The total investment 
                in the Fund of an insured depository 
                institution shall not exceed 5 percent of the 
                capital and surplus of the institution.
                  (C) Regulatory authority.--An appropriate 
                Federal banking agency may, by regulation or 
                order, impose on any insured depository 
                institution investing in the Fund, any 
                safeguard, limitation, or condition (including 
                an investment limit that is lower than the 
                investment limit under subparagraph (B)) that 
                the Federal banking agency considers to be 
                appropriate to ensure that the institution 
                operates--
                          (i) in a financially sound manner; 
                        and
                          (ii) in compliance with all 
                        applicable law.
    (c) Guarantee of Private Investments.--
          (1) In general.--The Secretary shall guarantee, under 
        terms and conditions determined by the Secretary, 50 
        percent of any loss of the principal of an investment 
        made in the Fund by an authorized private investor.
          (2) Maximum total guarantee.--The aggregate potential 
        liability of the Secretary with respect to all 
        guarantees under paragraph (1) shall not apply to more 
        than $300,000,000 in private investments in the Fund.
          (3) Redemption of guarantee.--
                  (A) Date.--An authorized private investor in 
                the Fund may redeem a guarantee under paragraph 
                (1), with respect to the total investments in 
                the Fund and the total losses of the authorized 
                private investor as of the date of redemption--
                          (i) on the date that is 5 years after 
                        the date of the initial investment by 
                        the authorized private investor; or
                          (ii) annually thereafter.
                  (B) Effect of redemption.--On redemption of a 
                guarantee under subparagraph (A)--
                          (i) the shares in the Fund of the 
                        authorized private investor shall be 
                        redeemed; and
                          (ii) the authorized private investor 
                        shall be prohibited from making any 
                        future investment in the Fund.
    (d) Debt Securities.--
          (1) In general.--The Fund may, at the discretion of 
        the Board, generate additional capital through--
                  (A) the issuance of debt securities; and
                  (B) other means determined to be appropriate 
                by the Board.
          (2) Guarantee of debt by secretary.--
                  (A) In general.--The Secretary shall 
                guarantee 100 percent of the principal of, and 
                accrued interest on, debentures issued by the 
                Fund that are approved by the Secretary.
                  (B) Maximum debt guaranteed by secretary.--
                The outstanding value of debentures issued by 
                the Fund and guaranteed by the Secretary shall 
                not exceed the lesser of--
                          (i) the amount equal to twice the 
                        value of the assets held by the Fund; 
                        or
                          (ii) $500,000,000.
                  (C) Recapture of guarantee payments.--If the 
                Secretary makes a payment on a debt security 
                issued by the Fund as a result of a guarantee 
                of the Secretary under this paragraph, the 
                Secretary shall have priority over other 
                creditors for repayment of the debt security.
          (3) Authorized private investors.--An authorized 
        private investor may purchase debt securities issued by 
        the Fund.

SEC. 383F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.

    (a) Investments.--
          (1) In general.--
                  (A) Types.--Subject to subparagraphs (B) and 
                (C), the Fund may--
                          (i) make equity investments in a 
                        rural business that meets--
                                  (I) the requirements of 
                                paragraph (6); and
                                  (II) such other requirements 
                                as the Board may establish; and
                          (ii) extend credit to the rural 
                        business in--
                                  (I) the form of mezzanine 
                                debt or subordinated debt; or
                                  (II) any other form of quasi-
                                equity.
                  (B) Limitations on investments.--
                          (i) Total investments by a single 
                        rural business.--Subject to clause 
                        (ii), investment by the Fund in a 
                        single rural business shall not exceed 
                        the greater of--
                                  (I) an amount equal to 7 
                                percent of the capital of the 
                                Fund; or
                                  (II) $2,000,000.
                          (ii) Waiver.--The Secretary may waive 
                        the limitation in clause (i) in any 
                        case in which an investment exceeding 
                        the limits specified in clause (i) is 
                        necessary to preserve prior investments 
                        in the rural business.
                          (iii) Total nonequity investments.--
                        Except in the case of a project to 
                        assist a rural cooperative, the total 
                        amount of nonequity investments 
                        described in subparagraph (A)(ii) that 
                        may be provided by the Fund shall not 
                        exceed 20 percent of the total 
                        investments of the Fund in the project.
                  (C) Limitation.--Notwithstanding subparagraph 
                (B), the amount of any investment by the Fund 
                in a rural business shall not exceed the 
                aggregate amount invested in like securities by 
                other private entities in that rural business.
          (2) Procedures.--The Fund shall implement procedures 
        to ensure that--
                  (A) the financing arrangements of the Fund 
                meet the Fund's primary focus of providing 
                equity capital; and
                  (B) the Fund does not compete with 
                conventional sources of credit.
          (3) Diversity of projects.--The Fund--
                  (A) shall seek to make equity investments in 
                a variety of viable projects, with a 
                significant share of investments--
                          (i) in smaller enterprises (as 
                        defined in section 384A) in rural 
                        communities of diverse sizes; and
                          (ii) in cooperative and 
                        noncooperative enterprises; and
                  (B) shall be managed in a manner that 
                diversifies the risks to the Fund among a 
                variety of projects.
          (4) Limitation on rural businesses assisted.--The 
        Fund shall not invest in any rural business that is 
        primarily retail in nature (as determined by the 
        Board), other than a purchasing cooperative.
          (5) Interest rate limitations.--Returns on 
        investments in and by the Fund and returns on the 
        extension of credit by participants in projects 
        assisted by the Fund, shall not be subject to any State 
        or Federal law establishing a maximum allowable 
        interest rate.
          (6) Requirements for recipients.--
                  (A) Other investments.--Any recipient of 
                amounts from the Fund shall make or obtain a 
                significant investment from a source of capital 
                other than the Fund.
                  (B) Sponsorship.--To be considered for an 
                equity investment from the Fund, a rural 
                business investment project shall be sponsored 
                by a regional, State, or local sponsoring or 
                endorsing organization such as--
                          (i) a financial institution;
                          (ii) a development organization; or
                          (iii) any other established entity 
                        engaging or assisting in rural business 
                        development, including a rural 
                        cooperative.
    (b) Technical Assistance.--The Fund, under terms and 
conditions established by the Board, shall use not less than 2 
percent of capital provided by the Federal Government to 
provide technical assistance to rural businesses seeking an 
equity investment from the Fund.
    (c) Annual Audit.--
          (1) In general.--The Board shall authorize an annual 
        audit of the financial statements of the Fund by a 
        nationally recognized auditing firm using generally 
        accepted accounting principles.
          (2) Availability of audit results.--The results of 
        the audit required by paragraph (1) shall be made 
        available to investors in the Fund.
    (d) Annual Report.--The Board shall prepare and make 
available to the public an annual report that--
          (1) describes the projects funded with amounts from 
        the Fund;
          (2) specifies the recipients of amounts from the 
        Fund;
          (3) specifies the coinvestors in all projects that 
        receive amounts from the Fund; and
          (4) meets the reporting requirements, if any, of the 
        State under the law of which the Fund is established.
    (e) Other Authorities.--
          (1) In general.--The Board may exercise such other 
        authorities as are necessary to carry out this 
        subtitle.
          (2) Oversight.--The Secretary shall enter in to a 
        contract with the Administrator of the Small Business 
        Administration under which the Administrator of the 
        Small Business Administration shall be responsible for 
        routine duties of the Secretary in regard to the Fund.

SEC. 383G. GOVERNANCE OF THE FUND.

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

SEC. 383H. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are 
necessary to carry out this subtitle.

             Subtitle H--Rural Business Investment Program

SEC. 384A. DEFINITIONS.

    In this subtitle:
          (1) Articles.--The term ``articles'' means articles 
        of incorporation for an incorporated body or the 
        functional equivalent or other similar documents 
        specified by the Secretary for other business entities.
          (2) Developmental venture capital.--The term 
        ``developmental venture capital'' means capital in the 
        form of equity capital investments in Rural Business 
        Investment Companies with an objective of fostering 
        economic development in rural areas.
          (3) Employee welfare benefit plan; pension plan.--
                  (A) In general.--The terms ``employee welfare 
                benefit plan'' and ``pension plan'' have the 
                meanings given the terms in section 3 of the 
                Employee Retirement Income Security Act of 1974 
                (29 U.S.C. 1002).
                  (B) Inclusions.--The terms ``employee welfare 
                benefit plan'' and ``pension plan'' include--
                          (i) public and private pension or 
                        retirement plans subject to this 
                        subtitle; and
                          (ii) similar plans not covered by 
                        this subtitle that have been 
                        established and that are maintained by 
                        the Federal Government or any State 
                        (including by a political subdivision, 
                        agency, or instrumentality of the 
                        Federal Government or a State) for the 
                        benefit of employees.
          (4) Equity capital.--The term ``equity capital'' 
        means common or preferred stock or a similar 
        instrument, including subordinated debt with equity 
        features.
          (5) Leverage.--The term ``leverage'' includes--
                  (A) debentures purchased or guaranteed by the 
                Secretary;
                  (B) participating securities purchased or 
                guaranteed by the Secretary; and
                  (C) preferred securities outstanding as of 
                the date of enactment of this subtitle.
          (6) License.--The term ``license'' means a license 
        issued by the Secretary as provided in section 384D(c).
          (7) Limited liability company.--The term ``limited 
        liability company'' means a business entity that is 
        organized and operating in accordance with a State 
        limited liability company law approved by the 
        Secretary.
          (8) Member.--The term ``member'' means, with respect 
        to a Rural Business Investment Company that is a 
        limited liability company, a holder of an ownership 
        interest or a person otherwise admitted to membership 
        in the limited liability company.
          (9) Operational assistance.--The term ``operational 
        assistance'' means management, marketing, and other 
        technical assistance that assists a rural business 
        concern with business development.
          (10) Participation agreement.--The term 
        ``participation agreement'' means an agreement, between 
        the Secretary and a Rural Business Investment Company 
        granted final approval under section 384D(d), that 
        requires the Rural Business Investment Company to make 
        investments in smaller enterprises in rural areas.
          (11) Private capital.--
                  (A) In general.--The term ``private capital'' 
                means the total of--
                          (i) the paid-in capital and paid-in 
                        surplus of a corporate Rural Business 
                        Investment Company, the contributed 
                        capital of the partners of a 
                        partnership Rural Business Investment 
                        Company, or the equity investment of 
                        the members of a limited liability 
                        company Rural Business Investment 
                        Company; and
                          (ii) unfunded binding commitments, 
                        from investors that meet criteria 
                        established by the Secretary to 
                        contribute capital to the Rural 
                        Business Investment Company, except 
                        that unfunded commitments may be 
                        counted as private capital for purposes 
                        of approval by the Secretary of any 
                        request for leverage, but leverage 
                        shall not be funded based on the 
                        commitments.
                  (B) Exclusions.--The term ``private capital'' 
                does not include--
                          (i) any funds borrowed by a Rural 
                        Business Investment Company from any 
                        source;
                          (ii) any funds obtained through the 
                        issuance of leverage; or
                          (iii) any funds obtained directly or 
                        indirectly from the Federal Government 
                        or any State (including by a political 
                        subdivision, agency, or instrumentality 
                        of the Federal Government or a State), 
                        except for--
                                  (I) 50 percent of funds from 
                                the National Rural Cooperative 
                                and Business Equity Fund;
                                  (II) funds obtained from the 
                                business revenues (excluding 
                                any governmental appropriation) 
                                of any federally chartered or 
                                government-sponsored enterprise 
                                established prior to the date 
                                of enactment of this subtitle;
                                  (III) funds invested by an 
                                employee welfare benefit plan 
                                or pension plan; and
                                  (IV) any qualified nonprivate 
                                funds (if the investors of the 
                                qualified nonprivate funds do 
                                not control, directly or 
                                indirectly, the management, 
                                board of directors, general 
                                partners, or members of the 
                                Rural Business Investment 
                                Company).
          (12) Qualified nonprivate funds.--The term 
        ``qualified nonprivate funds'' means any--
                  (A) funds directly or indirectly invested in 
                any applicant or Rural Business Investment 
                Company on or before the date of enactment of 
                this subtitle, by any Federal agency, other 
                than the Department of Agriculture, under a 
                provision of law explicitly mandating the 
                inclusion of those funds in the definition of 
                the term ``private capital''; and
                  (B) funds invested in any applicant or Rural 
                Business Investment Company by 1 or more 
                entities of any State (including by a political 
                subdivision, agency, or instrumentality of the 
                State and including any guarantee extended by 
                those entities) in an aggregate amount that 
                does not exceed 33 percent of the private 
                capital of the applicant or Rural Business 
                Investment Company.
          (13) Rural business concern.--The term ``rural 
        business concern'' means--
                  (A) a public, private, or cooperative for-
                profit or nonprofit organization;
                  (B) a for-profit or nonprofit business 
                controlled by an Indian tribe on a Federal or 
                State reservation or other federally recognized 
                Indian tribal group; or
                  (C) any other person or entity;
        that primarily operates in a rural area, as determined 
        by the Secretary.
          (14) Rural business investment company.--The term 
        ``Rural Business Investment Company'' means a company 
        that--
                  (A) has been granted final approval by the 
                Secretary under section 384D(d); and
                  (B) has entered into a participation 
                agreement with the Secretary.
          (15) Smaller enterprise.--The term ``smaller 
        enterprise'' means any rural business concern that, 
        together with its affiliates--
                  (A) has--
                          (i) a net financial worth of not more 
                        than $6,000,000, as of the date on 
                        which assistance is provided under this 
                        subtitle to the rural business concern; 
                        and
                          (ii) an average net income for the 2-
                        year period preceding the date on which 
                        assistance is provided under this 
                        subtitle to the rural business concern, 
                        of not more than $2,000,000, after 
                        Federal income taxes (excluding any 
                        carryover losses) except that, for 
                        purposes of this clause, if the rural 
                        business concern is not required by law 
                        to pay Federal income taxes at the 
                        enterprise level, but is required to 
                        pass income through to the 
                        shareholders, partners, beneficiaries, 
                        or other equitable owners of the 
                        business concern, the net income of the 
                        business concern shall be determined by 
                        allowing a deduction in an amount equal 
                        to the total of--
                                  (I) if the rural business 
                                concern is not required by law 
                                to pay State (and local, if 
                                any) income taxes at the 
                                enterprise level, the net 
                                income (determined without 
                                regard to this clause), 
                                multiplied by the marginal 
                                State income tax rate (or by 
                                the combined State and local 
                                income tax rates, as 
                                applicable) that would have 
                                applied if the business concern 
                                were a corporation; and
                                  (II) the net income (so 
                                determined) less any deduction 
                                for State (and local) income 
                                taxes calculated under 
                                subclause (I), multiplied by 
                                the marginal Federal income tax 
                                rate that would have applied if 
                                the rural business concern were 
                                a corporation; or
                  (B) satisfies the standard industrial 
                classification size standards established by 
                the Administrator of the Small Business 
                Administration for the industry in which the 
                rural business concern is primarily engaged.

SEC. 384B. PURPOSES.

    The purposes of the Rural Business Investment Program 
established under this subtitle are--
          (1) to promote economic development and the creation 
        of wealth and job opportunities in rural areas and 
        among individuals living in those areas by encouraging 
        developmental venture capital investments in smaller 
        enterprises primarily located in rural areas; and
          (2) to establish a developmental venture capital 
        program, with the mission of addressing the unmet 
        equity investment needs of small enterprises located in 
        rural areas, by authorizing the Secretary--
                  (A) to enter into participation agreements 
                with Rural Business Investment Companies;
                  (B) to guarantee debentures of Rural Business 
                Investment Companies to enable each Rural 
                Business Investment Company to make 
                developmental venture capital investments in 
                smaller enterprises in rural areas; and
                  (C) to make grants to Rural Business 
                Investment Companies, and to other entities, 
                for the purpose of providing operational 
                assistance to smaller enterprises financed, or 
                expected to be financed, by Rural Business 
                Investment Companies.

SEC. 384C. ESTABLISHMENT.

    In accordance with this subtitle, the Secretary shall 
establish a Rural Business Investment Program, under which the 
Secretary may--
          (1) enter into participation agreements with 
        companies granted final approval under section 384D(d) 
        for the purposes set forth in section 384B;
          (2) guarantee the debentures issued by Rural Business 
        Investment Companies as provided in section 384E; and
          (3) make grants to Rural Business Investment 
        Companies, and to other entities, under section 384H.

SEC. 384D. SELECTION OF RURAL BUSINESS INVESTMENT COMPANIES.

    (a) Eligibility.--A company shall be eligible to apply to 
participate, as a Rural Business Investment Company, in the 
program established under this subtitle if--
          (1) the company is a newly formed for-profit entity 
        or a newly formed for-profit subsidiary of such an 
        entity;
          (2) the company has a management team with experience 
        in community development financing or relevant venture 
        capital financing; and
          (3) the company will invest in enterprises that will 
        create wealth and job opportunities in rural areas, 
        with an emphasis on smaller businesses.
    (b) Application.--To participate, as a Rural Business 
Investment Company, in the program established under this 
subtitle, a company meeting the eligibility requirements of 
subsection (a) shall submit an application to the Secretary 
that includes--
          (1) a business plan describing how the company 
        intends to make successful developmental venture 
        capital investments in identified rural areas;
          (2) information regarding the community development 
        finance or relevant venture capital qualifications and 
        general reputation of the management of the company;
          (3) a description of how the company intends to work 
        with community organizations and to seek to address the 
        unmet capital needs of the communities served;
          (4) a proposal describing how the company intends to 
        use the grant funds provided under this subtitle to 
        provide operational assistance to smaller enterprises 
        financed by the company, including information 
        regarding whether the company intends to use licensed 
        professionals, when necessary, on the staff of the 
        company or from an outside entity;
          (5) with respect to binding commitments to be made to 
        the company under this subtitle, an estimate of the 
        ratio of cash to in-kind contributions;
          (6) a description of the criteria to be used to 
        evaluate whether and to what extent the company meets 
        the purposes of the program established under this 
        subtitle;
          (7) information regarding the management and 
        financial strength of any parent firm, affiliated firm, 
        or any other firm essential to the success of the 
        business plan of the company; and
          (8) such other information as the Secretary may 
        require.
    (c) Issuance of License.--
          (1) Submission of application.--Each applicant for a 
        license to operate as a Rural Business Investment 
        Company under this subtitle shall submit to the 
        Secretary an application, in a form and including such 
        documentation as may be prescribed by the Secretary.
          (2) Procedures.--
                  (A) Status.--Not later than 90 days after the 
                initial receipt by the Secretary of an 
                application under this subsection, the 
                Secretary shall provide the applicant with a 
                written report describing the status of the 
                application and any requirements remaining for 
                completion of the application.
                  (B) Approval or disapproval.--Within a 
                reasonable time after receiving a completed 
                application submitted in accordance with this 
                subsection and in accordance with such 
                requirements as the Secretary may prescribe by 
                regulation, the Secretary shall--
                          (i) approve the application and issue 
                        a license for the operation to the 
                        applicant, if the requirements of this 
                        section are satisfied; or
                          (ii) disapprove the application and 
                        notify the applicant in writing of the 
                        disapproval.
          (3) Matters considered.--In reviewing and processing 
        any application under this subsection, the Secretary--
                  (A) shall determine whether--
                          (i) the applicant meets the 
                        requirements of subsection (d); and
                          (ii) the management of the applicant 
                        is qualified and has the knowledge, 
                        experience, and capability necessary to 
                        comply with this subtitle;
                  (B) shall take into consideration--
                          (i) the need for and availability of 
                        financing for rural business concerns 
                        in the geographic area in which the 
                        applicant is to commence business;
                          (ii) the general business reputation 
                        of the owners and management of the 
                        applicant; and
                          (iii) the probability of successful 
                        operations of the applicant, including 
                        adequate profitability and financial 
                        soundness; and
                  (C) shall not take into consideration any 
                projected shortage or unavailability of grant 
                funds or leverage.
    (d) Approval; Designation.--The Secretary may approve an 
applicant to operate as a Rural Business Investment Company 
under this subtitle and designate the applicant as a Rural 
Business Investment Company, if--
          (1) the Secretary determines that the application 
        satisfies the requirements of subsection (b);
          (2) the area in which the Rural Business Investment 
        Company is to conduct its operations, and establishment 
        of branch offices or agencies (if authorized by the 
        articles), are approved by the Secretary; and
          (3) the applicant enters into a participation 
        agreement with the Secretary.

SEC. 384E. DEBENTURES.

    (a) In General.--The Secretary may guarantee the timely 
payment of principal and interest, as scheduled, on debentures 
issued by any Rural Business Investment Company.
    (b) Terms and Conditions.--The Secretary may make 
guarantees under this section on such terms and conditions as 
the Secretary considers appropriate, except that the term of 
any debenture guaranteed under this section shall not exceed 15 
years.
    (c) Full Faith and Credit of the United States.--Section 
381H(i) shall apply to any guarantee under this section.
    (d) Maximum Guarantee.--Under this section, the Secretary 
may--
          (1) guarantee the debentures issued by a Rural 
        Business Investment Company only to the extent that the 
        total face amount of outstanding guaranteed debentures 
        of the Rural Business Investment Company does not 
        exceed 300 percent of the private capital of the Rural 
        Business Investment Company, as determined by the 
        Secretary; and
          (2) provide for the use of discounted debentures.

SEC. 384F. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    (a) Issuance.--The Secretary may issue trust certificates 
representing ownership of all or a fractional part of 
debentures issued by a Rural Business Investment Company and 
guaranteed by the Secretary under this subtitle, if the 
certificates are based on and backed by a trust or pool 
approved by the Secretary and composed solely of guaranteed 
debentures.
    (b) Guarantee.--
          (1) In general.--The Secretary may, under such terms 
        and conditions as the Secretary considers appropriate, 
        guarantee the timely payment of the principal of and 
        interest on trust certificates issued by the Secretary 
        or agents of the Secretary for purposes of this 
        section.
          (2) Limitation.--Each guarantee under this subsection 
        shall be limited to the extent of principal and 
        interest on the guaranteed debentures that compose the 
        trust or pool.
          (3) Prepayment or default.--
                  (A) In general.--In the event a debenture in 
                a trust or pool is prepaid, or in the event of 
                default of such a debenture, the guarantee of 
                timely payment of principal and interest on the 
                trust certificates shall be reduced in 
                proportion to the amount of principal and 
                interest the prepaid debenture represents in 
                the trust or pool.
                  (B) Interest.--Interest on prepaid or 
                defaulted debentures shall accrue and be 
                guaranteed by the Secretary only through the 
                date of payment of the guarantee.
                  (C) Redemption.--At any time during its term, 
                a trust certificate may be called for 
                redemption due to prepayment or default of all 
                debentures.
    (c) Full Faith and Credit of the United States.--Section 
381H(i) shall apply to any guarantee of a trust certificate 
issued by the Secretary under this section.
    (d) Subrogation and Ownership Rights.--
          (1) Subrogation.--If the Secretary pays a claim under 
        a guarantee issued under this section, the claim shall 
        be subrogated fully to the rights satisfied by the 
        payment.
          (2) Ownership rights.--No Federal, State, or local 
        law shall preclude or limit the exercise by the 
        Secretary of the ownership rights ofthe Secretary in a 
debenture residing in a trust or pool against which 1 or more trust 
certificates are issued under this section.
    (e) Management and Administration.--
          (1) Registration.--The Secretary shall provide for a 
        central registration of all trust certificates issued 
        under this section.
          (2) Creation of pools.--The Secretary may--
                  (A) maintain such commercial bank accounts or 
                investments in obligations of the United States 
                as may be necessary to facilitate the creation 
                of trusts or pools backed by debentures 
                guaranteed under this subtitle; and
                  (B) issue trust certificates to facilitate 
                the creation of those trusts or pools.
          (3) Fidelity bond or insurance requirement.--Any 
        agent performing functions on behalf of the Secretary 
        under this paragraph shall provide a fidelity bond or 
        insurance in such amount as the Secretary considers to 
        be necessary to fully protect the interests of the 
        United States.
          (4) Regulation of brokers and dealers.--The Secretary 
        may regulate brokers and dealers in trust certificates 
        issued under this section.
          (5) Electronic registration.--Nothing in this 
        subsection prohibits the use of a book-entry or other 
        electronic form of registration for trust certificates 
        issued under this section.

SEC. 384G. FEES.

    (a) In General.--The Secretary may charge such fees as the 
Secretary considers appropriate with respect to any guarantee 
or grant issued under this subtitle.
    (b) Trust Certificate.--Notwithstanding subsection (a), the 
Secretary shall not collect a fee for any guarantee of a trust 
certificate under section 384F, except that any agent of the 
Secretary may collect a fee approved by the Secretary for the 
functions described in section 384F(e)(2).
    (c) License.--
          (1) In general.--The Secretary may prescribe fees to 
        be paid by each applicant for a license to operate as a 
        Rural Business Investment Company under this subtitle.
          (2) Use of amounts.--Fees collected under this 
        subsection--
                  (A) shall be deposited in the account for 
                salaries and expenses of the Secretary; and (B) 
                are authorized to be appropriated solely to 
                cover the costs of licensing examinations.

SEC. 384H. OPERATIONAL ASSISTANCE GRANTS.

    (a) In General.--
          (1) Authority.--In accordance with this section, the 
        Secretary may make grants to Rural Business Investment 
        Companies and to other entities, as authorized by this 
        subtitle, to provide operational assistance to smaller 
        enterprises financed, or expected to be financed, by 
        the entities.
          (2) Terms.--Grants made under this subsection shall 
        be made over a multiyear period (not to exceed 10 
        years) under such other terms as the Secretary may 
        require.
          (3) Use of funds.--The proceeds of a grant made under 
        this paragraph may be used by the Rural Business 
        Investment Company receiving the grant only to--
                  (A) provide operational assistance in 
                connection with an equity investment (made with 
                capital raised after the effective date of this 
                subtitle) in a business located in a rural 
                area; or
                  (B) pay operational expenses of the Rural 
                Business Investment Company.
          (4) Submission of plans.--A Rural Business Investment 
        Company shall be eligible for a grant under this 
        section only if the Rural Business Investment Company 
        submits to the Secretary, in such form and manner as 
        the Secretary may require, a plan for use of the grant.
          (5) Grant amount.--
                  (A) Rural business investment companies.--The 
                amount of a grant made under this subsection to 
                a Rural Business Investment Company shall be 
                equal to the lesser of--
                          (i) 50 percent of the amount of 
                        resources (in cash or in kind) raised 
                        by the Rural Business Investment 
                        Company; or
                          (ii) $1,000,000.
                  (B) Other entities.--The amount of a grant 
                made under this subsection to any entity other 
                than a Rural Business Investment Company shall 
                be equal to the resources (in cash or in kind) 
                raised by the entity in accordance with the 
                requirements applicable to Rural Business 
                Investment Companies under this subtitle.
    (b) Supplemental Grants.--
          (1) In general.--The Secretary may make supplemental 
        grants to Rural Business Investment Companies and to 
        other entities, as authorized by this subtitle under 
        such terms as the Secretary may require, to provide 
        additional operational assistance to smaller 
        enterprises financed, or expected to be financed, by 
        the Rural Business Investment Companies and other 
        entities.
          (2) Matching requirement.--The Secretary may require, 
        as a condition of any supplemental grant made under 
        this subsection, that the Rural Business Investment 
        Company or entity receiving the grant provide from 
        resources (in cash or in kind), other than resources 
        provided by the Secretary, a matching contribution 
        equal to the amount of the supplemental grant.

SEC. 384I. RURAL BUSINESS INVESTMENT COMPANIES.

    (a) Organization.--For the purpose of this subtitle, a 
Rural Business Investment Company shall--
          (1) be an incorporated body, a limited liability 
        company, or a limited partnership organized and 
        chartered or otherwise existing under State law solely 
        for the purpose of performing the functions and 
        conducting the activities authorized by this subtitle;
          (2)(A) if incorporated, have succession for a period 
        of not less than 30 years unless earlier dissolved by 
        the shareholders of the Rural Business Investment 
        Company; and
          (B) if a limited partnership or a limited liability 
        company, have succession for a period of not less than 
        10 years; and
          (3) possess the powers reasonably necessary to 
        perform the functions and conduct the activities.
    (b) Articles.--The articles of any Rural Business 
Investment Company--
          (1) shall specify in general terms--
                  (A) the purposes for which the Rural Business 
                Investment Company is formed;
                  (B) the name of the Rural Business Investment 
                Company;
                  (C) the area or areas in which the operations 
                of the Rural Business Investment Company are to 
                be carried out;
                  (D) the place where the principal office of 
                the Rural Business Investment Company is to be 
                located; and
                  (E) the amount and classes of the shares of 
                capital stock of the Rural Business Investment 
                Company;
          (2) may contain any other provisions consistent with 
        this subtitle that the Rural Business Investment 
        Company may determine appropriate to adopt for the 
        regulation of the business of the Rural Business 
        Investment Company and the conduct of the affairs of 
        the Rural Business Investment Company; and
          (3) shall be subject to the approval of the 
        Secretary.
    (c) Capital Requirements.--
          (1) In general.--Except as provided in paragraph (2), 
        the private capital of each Rural Business Investment 
        Company shall be not less than--
                  (A) $5,000,000; or
                  (B) $10,000,000, with respect to each Rural 
                Business Investment Company authorized or 
                seeking authority to issue participating 
                securities to be purchased or guaranteed by the 
                Secretary under this subtitle.
          (2) Exception.--The Secretary may, in the discretion 
        of the Secretary and based on a showing of special 
        circumstances and good cause, permit the private 
        capital of a Rural Business Investment Company 
        described in paragraph (1)(B) to be less than 
        $10,000,000, but not less than $5,000,000, if the 
        Secretary determines that the action would not create 
        or otherwise contribute to an unreasonable risk of 
        default or loss to the Federal Government.
          (3) Adequacy.--In addition to the requirements of 
        paragraph (1), the Secretary shall--
                  (A) determine whether the private capital of 
                each Rural Business Investment Company is 
                adequate to ensure a reasonable prospect that 
                the Rural Business Investment Company will be 
                operated soundly and profitably, and managed 
                actively and prudently in accordance with the 
                articles of the Rural Business Investment 
                Company;
                  (B) determine that the Rural Business 
                Investment Company will be able to comply with 
                the requirements of this subtitle; and
                  (C) require that at least 75 percent of the 
                capital of each Rural Business Investment 
                Company is invested in rural business concerns.
    (d) Diversification of Ownership.--The Secretary shall 
ensure that the management of each Rural Business Investment 
Company licensed after the date of enactment of this subtitle 
is sufficiently diversified from and unaffiliated with the 
ownership of the Rural Business Investment Company so as to 
ensure independence and objectivity in the financial management 
and oversight of the investments and operations of the Rural 
Business Investment Company.

SEC. 384J. FINANCIAL INSTITUTION INVESTMENTS.

    (a) In General.--Except as otherwise provided in this 
section and notwithstanding any other provision of law, the 
following banks, associations, and institutions may invest in 
any Rural Business Investment Company or in any entity 
established to invest solely in Rural Business Investment 
Companies:
          (1) Any national bank.
          (2) Any member bank of the Federal Reserve System.
          (3) Any Federal savings association.
          (4) Any Farm Credit System institution described in 
        section 1.2(a) of the Farm Credit Act of 1971 (12 
        U.S.C. 2002(a)).
          (5) Any insured bank that is not a member of the 
        Federal Reserve System, to the extent permitted under 
        applicable State law.
    (b) Limitation.--No bank, association, or institution 
described in subsection (a) may make investments described in 
subsection (a) that are greater than 5 percent of the capital 
and surplus of the bank, association, or institution.
    (c) Limitation on Rural Business Investment Companies 
Controlled by Farm Credit System Institutions.--If a Farm 
Credit System institution described in section 1.2(a) of the 
Farm Credit Act of 1971 (12 U.S.C. 2002(a)) holds more than 30 
percent of the voting shares of a Rural Business Investment 
Company, either alone or in conjunction with other System 
institutions (or affiliates), the Rural Business Investment 
Company shall not provide equity investments in, or provide 
other financial assistance to, entities that are not otherwise 
eligible to receive financing from the Farm Credit System under 
that Act (12 U.S.C. 2001 et seq.).

SEC. 384K. REPORTING REQUIREMENT.

    Each Rural Business Investment Company that participates in 
the program established under this subtitle shall provide to 
the Secretary such information as the Secretary may require, 
including--
          (1) information relating to the measurement criteria 
        that the Rural Business Investment Company proposed in 
        the program application of the Rural Business 
        Investment Company; and
          (2) in each case in which the Rural Business 
        Investment Company under this subtitle makes an 
        investment in, or a loan or grant to, a business that 
        is not located in a rural area, a report on the number 
        and percentage of employees of the business who reside 
        in those areas.

SEC. 384L. EXAMINATIONS.

    (a) In General.--Each Rural Business Investment Company 
that participates in the program established under this 
subtitle shall be subject to examinations made at the direction 
of the Secretary in accordance with this section.
    (b) Assistance of Private Sector Entities.--An examination 
under this section may be conducted with the assistance of a 
private sector entity that has the qualifications and the 
expertise necessary to conduct such an examination.
    (c) Costs.--
          (1) In general.--The Secretary may assess the cost of 
        an examination under this section, including 
        compensation of the examiners, against the Rural 
        Business Investment Company examined.
          (2) Payment.--Any Rural Business Investment Company 
        against which the Secretary assesses costs under this 
        paragraph shall pay the costs.
    (d) Deposit of Funds.--Funds collected under this section 
shall--
          (1) be deposited in the account that incurred the 
        costs for carrying out this section;
          (2) be made available to the Secretary to carry out 
        this section, without further appropriation; and
          (3) remain available until expended.

SEC. 384M. INJUNCTIONS AND OTHER ORDERS.

    (a) In General.--
          (1) Application by secretary.--Whenever, in the 
        judgment of the Secretary, a Rural Business Investment 
        Company or any other person has engaged or is about to 
        engage in any act or practice that constitutes or will 
        constitute a violation of a provision of this subtitle 
        (including any rule, regulation, order, or 
        participation agreement under this subtitle), the 
        Secretary may apply to the appropriate district court 
        of the United States for an order enjoining the act or 
        practice, or for an order enforcing compliance with the 
        provision, rule, regulation, order, or participation 
        agreement.
          (2) Jurisdiction; relief.--The court shall have 
        jurisdiction over the action and, on a showing by the 
        Secretary that the Rural Business Investment Company or 
        other person has engaged or is about to engage in an 
        act or practice described in paragraph (1), a permanent 
        or temporary injunction, restraining order, or other 
        order, shall be granted without bond.
    (b) Jurisdiction.--
          (1) In general.--In any proceeding under subsection 
        (a), the court as a court of equity may, to such extent 
        as the court considers necessary, take exclusive 
        jurisdiction over the Rural Business Investment Company 
        and the assets of the Rural Business Investment 
        Company, wherever located.
          (2) Trustee or receiver.--The court shall have 
        jurisdiction in any proceeding described in paragraph 
        (1) to appoint a trustee or receiver to hold or 
        administer the assets.
    (c) Secretary as Trustee or Receiver.--
          (1) Authority.--The Secretary may act as trustee or 
        receiver of a Rural Business Investment Company.
          (2) Appointment.--On the request of the Secretary, 
        the court shall appoint the Secretary to act as a 
        trustee or receiver of a Rural Business Investment 
        Company unless the court considers the appointment 
        inequitable or otherwise inappropriate by reason of any 
        special circumstances involved.

SEC. 384N. ADDITIONAL PENALTIES FOR NONCOMPLIANCE.

    (a) In General.--With respect to any Rural Business 
Investment Company that violates or fails to comply with this 
subtitle (including any rule, regulation, order, or 
participation agreement under this subtitle), the Secretary 
may, in accordance with this section--
          (1) void the participation agreement between the 
        Secretary and the Rural Business Investment Company; 
        and
          (2) cause the Rural Business Investment Company to 
        forfeit all of the rights and privileges derived by the 
        Rural Business Investment Company under this subtitle.
    (b) Adjudication of Noncompliance.--
          (1) In general.--Before the Secretary may cause a 
        Rural Business Investment Company to forfeit rights or 
        privileges under subsection (a), a court of the United 
        States of competent jurisdiction must find that the 
        Rural Business Investment Company committed a 
        violation, or failed to comply, in a cause of action 
        brought for that purpose in the district, territory, or 
        other place subject to the jurisdiction of the United 
        States, in which the principal office of the Rural 
        Business Investment Company is located.
          (2) Parties authorized to file causes of action.--
        Each cause of action brought by the United States under 
        this subsection shall be brought by the Secretary or by 
        the Attorney General.

SEC. 384O. UNLAWFUL ACTS AND OMISSIONS; BREACH OF FIDUCIARY DUTY.

    (a) Parties Deemed To Commit a Violation.--Whenever any 
Rural Business Investment Company violates this subtitle 
(including any rule, regulation, order, or participation 
agreement under this subtitle), by reason of the failure of the 
Rural Business Investment Company to comply with this subtitle 
or by reason of its engaging in any act or practice that 
constitutes or will constitute a violation of this subtitle, 
the violation shall also be deemed to be a violation and an 
unlawful act committed by any person that, directly or 
indirectly, authorizes, orders, participates in, causes, brings 
about, counsels, aids, or abets in the commission of any acts, 
practices, or transactions that constitute or will constitute, 
in whole or in part, the violation.
    (b) Fiduciary Duties.--It shall be unlawful for any 
officer, director, employee, agent, or other participant in the 
management or conduct of the affairs of a Rural Business 
Investment Company to engage in any act or practice, or to omit 
any act or practice, in breach of the fiduciary duty of the 
officer, director, employee, agent, or participant if, as a 
result of the act or practice, the Rural Business Investment 
Company suffers or is in imminent danger of suffering financial 
loss or other damage.
    (c) Unlawful Acts.--Except with the written consent of the 
Secretary, it shall be unlawful--
          (1) for any person to take office as an officer, 
        director, or employee of any Rural Business Investment 
        Company, or to become an agent or participant in the 
        conduct of the affairs or management of a Rural 
        Business Investment Company, if the person--
                  (A) has been convicted of a felony, or any 
                other criminal offense involving dishonesty or 
                breach of trust; or
                  (B) has been found civilly liable in damages, 
                or has been permanently or temporarily enjoined 
                by an order, judgment, or decree of a court of 
                competent jurisdiction, by reason of any act or 
                practice involving fraud, or breach of trust; 
                and
          (2) for any person to continue to serve in any of the 
        capacities described in paragraph (1), if--
                  (A) the person is convicted of a felony, or 
                any other criminal offense involving dishonesty 
                or breach of trust; or
                  (B) the person is found civilly liable in 
                damages, or is permanently or temporarily 
                enjoined byan order, judgment, or decree of a 
court of competent jurisdiction, by reason of any act or practice 
involving fraud or breach of trust.

SEC. 384P. REMOVAL OR SUSPENSION OF DIRECTORS OR OFFICERS.

    Using the procedures established by the Secretary for 
removing or suspending a director or an officer of a Rural 
Business Investment Company, the Secretary may remove or 
suspend any director or officer of any Rural Business 
Investment Company.

SEC. 384Q. CONTRACTING OF FUNCTIONS.

    Notwithstanding any other provision of law, the Secretary 
shall enter into an interagency agreement with the 
Administrator of the Small Business Administration to carry 
out, on behalf of the Secretary, the day-to-day management and 
operation of the program authorized by this subtitle.

SEC. 384R. REGULATIONS.

    The Secretary may promulgate such regulations as the 
Secretary considers necessary to carry out this subtitle.

SEC. 384S. FUNDING.

    (a) In General.--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--
          (1) such sums as may be necessary for the cost of 
        guaranteeing $350,000,000 of debentures under this 
        subtitle; and
          (2) $50,000,000 to make grants under this subtitle.
    (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.
    (c) Availability of Funds.--Funds transferred under 
subsection (a) shall remain available until expended.

                  Subtitle I--Rural Endowment Program

SEC. 385A. PURPOSE.

    The purpose of this subtitle is to provide rural 
communities with technical and financial assistance to 
implement comprehensive community development strategies to 
reduce the economic and social distress resulting from poverty, 
high unemployment, outmigration, plant closings, agricultural 
downturn, declines in the natural resource-based economy, or 
environmental degradation.

SEC. 385B. DEFINITIONS.

    In this subtitle:
          (1) Comprehensive community development strategy.--
        The term ``comprehensive community development 
        strategy'' means a community development strategy 
        described in section 385C(e).
          (2) Eligible rural area.--
                  (A) In general.--The term ``eligible rural 
                area'' means an area with a population of 
                25,000 inhabitants or less, as determined by 
                the Secretary using the most recent decennial 
                census.
                  (B) Exclusions.--The term ``eligible rural 
                area'' does not include--
                          (i) any area designated by the 
                        Secretary as a rural empowerment zone 
                        or rural enterprise community; or
                          (ii) an urbanized area immediately 
                        adjacent to an incorporated city or 
                        town with a population of more than 
                        25,000 inhabitants.
          (3) Endowment fund.--The term ``endowment fund'' 
        means a long-term fund that an approved program entity 
        is required to establish under section 385C(f)(3).
          (4) Performance-based benchmarks.--The term 
        ``performance-based benchmarks'' means a set of 
        annualized goals and tasks established by a recipient 
        of a grant under the Program, in collaboration with the 
        Secretary, for the purpose of measuring performance in 
        meeting the comprehensive community development 
        strategy of the recipient.
          (5) Program.--The term ``Program'' means the Rural 
        Endowment Program established under section 385C(a).
          (6) Program entity.--The term ``program entity'' 
        means--
                  (A) a private nonprofit community-based 
                development organization;
                  (B) a unit of local government (including a 
                multijurisdictional unit of local government);
                  (C) an Indian tribe (as defined in section 4 
                of the Indian Self-Determination and Education 
                Assistance Act (25 U.S.C. 450b));
                  (D) a consortium comprised of an organization 
                described in subparagraph (A) and a unit of 
                local government; or
                  (E) a consortium of entities specified in 
                subparagraphs (A) through (D);
        that serves an eligible rural area.
          (7) Program-related investment.--The term ``program-
        related investment'' means--
                  (A) a loan, loan guarantee, grant, payment of 
                a technical fee, or other expenditure provided 
                for an affordable housing, community facility, 
                small business, environmental improvement, or 
                other community development project that is 
                part of a comprehensive community development 
                strategy; and
                  (B) support services relating to a project 
                described in subparagraph (A).

SEC. 385C. RURAL ENDOWMENT PROGRAM.

    (a) Establishment.--
          (1) In general.--The Secretary may establish a 
        program, to be known as the ``Rural Endowment 
        Program'', to provide approved program entities with 
        assistance in developing and implementing comprehensive 
        community development strategies for eligible rural 
        areas.
          (2) Purposes.--The purposes of the Program are--
                  (A) to enhance the ability of an eligible 
                rural area to engage in comprehensive community 
                development;
                  (B) to leverage private and public resources 
                for the benefit of community development 
                efforts in eligible rural areas;
                  (C) to make available staff of Federal 
                agencies to directly assist the community 
                development efforts of an approved program 
                entity or eligible rural area; and
                  (D) to strengthen the asset base of an 
                eligible rural area to further long-term, 
                ongoing community development.
    (b) Applications.--
          (1) In general.--To receive an endowment grant under 
        the Program, the eligible entity shall submit an 
        application at such time, in such form, and containing 
        such information as the Secretary may require.
          (2) Regional applications.--
                  (A) In general.--Where appropriate, the 
                Secretary shall encourage regional applications 
                from program entities serving more than 1 
                eligible rural area.
                  (B) Criteria for applications.--To be 
                eligible for an endowment grant for a regional 
                application the program entities that submit 
                the application shall demonstrate that--
                          (i) a comprehensive community 
                        development strategy for the eligible 
                        rural areas is best accomplished 
                        through a regional approach; and
                          (ii) the combined population of the 
                        eligible rural areas covered by the 
                        comprehensive community development 
                        strategy is 75,000 inhabitants or less.
                  (C) Amount of endowment grants.--For the 
                purpose of subsection (f)(2), 2 or more program 
                entities that submit a regional application 
                shall be considered to be a single program 
                entity.
          (3) Preference.--The Secretary shall give preference 
        to a joint application submitted by a private, 
        nonprofit community development corporation and a unit 
        of local government.
    (c) Entity Approval.--The Secretary shall approve a program 
entity to receive grants under the Program, if the program 
entity meets criteria established by the Secretary, including 
the following:
          (1) Distressed rural area.--The program entity shall 
        serve a rural area that suffers from economic or social 
        distress resulting from poverty, high unemployment, 
        outmigration, plant closings, agricultural downturn, 
        declines in the natural resource-based economy, or 
        environmental degradation.
          (2) Capacity to implement strategy.--The program 
        entity shall demonstrate the capacity to implement a 
        comprehensive community development strategy.
          (3) Goals.--The goals described in the application 
        submitted under subsection (b) shall be consistent with 
        this section.
          (4) Participation process.--The program entity shall 
        demonstrate the ability to convene and maintain a 
        multi-stakeholder, community-based participation 
        process.
    (d) Planning Grants to Conditionally Approved Program 
Entities.--
          (1) In general.--The Secretary may award supplemental 
        grants to approved program entities to assist the 
        approved program entities in the development of a 
        comprehensive community development strategy under 
        subsection (e) November 23, 2001.
          (2) Eligibility for supplemental grants.--In 
        determining whether to award a supplemental grant to an 
        approved program entity, the Secretary shall consider 
        the economic need of the approved program entity.
          (3) Limitations on amount of grants.--Under this 
        subsection, an approved program entity may receive a 
        supplemental grant in an amount of not more than 
        $100,000.
    (e) Endowment Grant Award.--
          (1) In general.--To be eligible for an endowment 
        grant under the Program, an approved program entity 
        shall develop and obtain the approval of the Secretary 
        for a comprehensive community development strategy 
        that--
                  (A) is designed to reduce economic or social 
                distress resulting from poverty, high 
                unemployment, outmigration, plant closings, 
                agricultural downturn, declines in the natural 
                resource-based economy, or environmental 
                degradation;
                  (B) addresses a broad range of the 
                development needs of a community, including 
                economic, social, and environmental needs, for 
                a period of not less than 10 years;
                  (C) is developed with input from a broad 
                array of local governments and business, civic, 
                and community organizations;
                  (D) specifies measurable performance-based 
                outcomes for all activities; and
                  (E) includes a financial plan for achieving 
                the outcomes and activities of the 
                comprehensive community development strategy 
                that identifies sources for, or a plan to meet, 
                the requirement for a non-Federal share under 
                subsection (f)(4)(B).
          (2) Final approval.--
                  (A) In general.--An approved program entity 
                shall receive final approval if the Secretary 
                determines that--
                          (i) the comprehensive community 
                        development strategy of the approved 
                        program entity meets the requirements 
                        of this section;
                          (ii) the management and 
                        organizational structure of the 
                        approved program entity is sufficient 
                        to oversee fund and development 
                        activities;
                          (iii) the approved program entity has 
                        established an endowment fund; and
                          (iv) the approved program entity will 
                        be able to provide the non-Federal 
                        share required under subsection 
                        (f)(4)(B).
                  (B) Conditions.--As part of the final 
                approval, the approved program entity shall 
                agree to--
                          (i) achieve, to the maximum extent 
                        practicable, performance-based 
                        benchmarks; and
                          (ii) comply with the terms of the 
                        comprehensive community development 
                        strategy for a period of not less than 
                        10 years.
    (f) Endowment Grants.--
          (1) In general.--Under the Program, the Secretary may 
        make endowment grants to approved program entities with 
        final approval to implement an approved comprehensive 
        community development strategy.
          (2) Amount of grants.--An endowment grant to an 
        approved program entity shall be in an amount of not 
        more than $6,000,000, as determined by the Secretary 
        based on--
                  (A) the size of the population of the 
                eligible rural area for which the endowment 
                grant is to be used;
                  (B) the size of the eligible rural area for 
                which the endowment grant is to be used;
                  (C) the extent of the comprehensive community 
                development strategy to be implemented using 
                the endowment grant award; and
                  (D) the extent to which the community suffers 
                from economic or social distress resulting 
                from--
                          (i) poverty;
                          (ii) high unemployment;
                          (iii) outmigration;
                          (iv) plant closings;
                          (v) agricultural downturn;
                          (vi) declines in the natural 
                        resource-based economy; or
                          (vii) environmental degradation.
          (3) Endowment funds.--
                  (A) Establishment.--On notification from the 
                Secretary that the program entity has been 
                approved under subsection (c), the approved 
                program entity shall establish an endowment 
                fund.
                  (B) Funding of endowment.--Federal funds 
                provided in the form of an endowment grant 
                under the Program shall--
                          (i) be deposited in the endowment 
                        fund;
                          (ii) be the sole property of the 
                        approved program entity;
                          (iii) be used in a manner consistent 
                        with this subtitle; and
                          (iv) be subject to oversight by the 
                        Secretary for a period of not more than 
                        10 years.
                  (C) Interest.--Interest earned on Federal 
                funds in the endowment fund shall be--
                          (i) retained by the grantee; and
                          (ii) treated as Federal funds are 
                        treated under subparagraph (B).
                  (D) Limitation.--The Secretary shall 
                promulgate regulations on matching funds and 
                returns on program-related investments only to 
                the extent that such funds or proceeds are used 
                in a manner consistent with this subtitle.
          (4) Conditions.--
                  (A) Disbursement.--
                          (i) In general.--Each endowment grant 
                        award shall be disbursed during a 
                        period not to exceed 5 years beginning 
                        during the fiscal year containing the 
                        date of final approval of the approved 
                        program entity under subsection (e)(3).
                          (ii) Manner of disbursement.--Subject 
                        to subparagraph (B), the Secretary may 
                        disburse a grant award in 1 lump sum or 
                        in incremental disbursements made each 
                        fiscal year.
                          (iii) Incremental disbursements.--If 
                        the Secretary elects to make 
                        incremental disbursements, for each 
                        fiscal year after the initial 
                        disbursement, the Secretary shall make 
                        a disbursement under clause (i) only if 
                        the approved program entity--
                                  (I) has met the performance-
                                based benchmarks of the 
                                approved program entity for the 
                                preceding fiscal year; and
                                  (II) has provided the non-
                                Federal share required for the 
                                preceding fiscal year under 
                                subparagraph (B).
                          (iv) Advance disbursements.--The 
                        Secretary may make disbursements under 
                        this paragraph notwithstanding any 
                        provision of law limiting grant 
                        disbursements to amounts necessary to 
                        cover expected expenses on a term 
                        basis.
                  (B) Non-federal share.--
                          (i) In general.--Except as provided 
                        in clause (ii), for each disbursement 
                        under subparagraph (A), the Secretary 
                        shall require the approved program 
                        entity to provide a non-Federal share 
                        in an amount equal to 50 percent of the 
                        amount of funds received by the 
                        approved program entity under the 
                        disbursement.
                          (ii) Lower non-federal share.--In the 
                        case of an approved program entity that 
                        serves a small, poor rural area (as 
                        determined by the Secretary), the 
                        Secretary may--
                                  (I) reduce the non-Federal 
                                share to not less than 20 
                                percent; and
                                  (II) allow the non-Federal 
                                share to be provided in the 
                                form of in-kind contributions.
                          (iii) Binding commitments; plan.--For 
                        the purpose of meeting the non-Federal 
                        share requirement with respect to the 
                        first disbursement of an endowment 
                        grant award to the approved program 
                        entity under the Program, an approved 
                        program entity shall--
                                  (I) have, at a minimum, 
                                binding commitments to provide 
                                the non-Federal share required 
                                with respect to the first 
                                disbursement of the endowment 
                                grant award; and
                                  (II) if the Secretary is 
                                making incremental 
                                disbursements of a grant, 
                                develop a viable plan for 
                                providing the remaining amount 
                                of the required non-Federal 
                                share.
                  (C) Limitations.--
                          (i) In general.--Subject to clause 
                        (ii), of each disbursement, an approved 
                        program entity shall use--
                                  (I) not more than 10 percent 
                                for administrative costs of 
                                carrying out program-related 
                                investments;
                                  (II) not more than 20 percent 
                                for the purpose of maintaining 
                                a loss reserve account; and
                                  (III) the remainder for 
                                program-related investments 
                                contained in the comprehensive 
                                community development strategy.
                          (ii) Loss reserve account.--If all 
                        disbursed funds available under a grant 
                        are expended in accordance with clause 
                        (i) and the grant recipient has no 
                        expected losses to cover for a fiscal 
                        year, the recipient may use funds in 
                        the loss reserve account described in 
                        clause (i)(II) for program-related 
                        investments described in clause 
                        (i)(III) for which no reserve for 
                        losses is required.
    (g) Federal Agency Assistance.--Under the Program, the 
Secretary shall provide and coordinate technical assistance for 
grant recipients by designated field staff of Federal agencies.
    (h) Private Technical Assistance.--
          (1) In general.--Under the Program, the Secretary may 
        make grants to qualified intermediaries to provide 
        technical assistance and capacity building to approved 
        program entities under the Program.
          (2) Duties.--A qualified intermediary that receives a 
        grant under this subsection shall--
                  (A) provide assistance to approved program 
                entities in developing, coordinating, and 
                overseeing investment strategy;
                  (B) provide technical assistance in all 
                aspects of planning, developing, and managing 
                the Program; and
                  (C) facilitate Federal and private sector 
                involvement in rural community development.
          (3) Eligibility.--To be considered a qualified 
        intermediary under this subsection, an intermediary 
        shall--
                  (A) be a private, nonprofit community 
                development organization;
                  (B) have expertise in Federal or private 
                rural community development policy or programs; 
                and
                  (C) have experience in providing technical 
                assistance, planning, and capacity building 
                assistance to rural communities and nonprofit 
                entities in eligible rural areas.
          (4) Maximum amount of grants.--A qualified 
        intermediary may receive a grant under this subsection 
        of not more than $100,000.
          (5) Funding.--Of the amounts made available under 
        section 385D, the Secretary may use to carry out this 
        subsection not more than $2,000,000 for each of not 
        more than 2 fiscal years.

SEC. 385D. FUNDING.

    (a) Fiscal Years 2002 and 2003.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, out of any funds in 
        the Treasury not otherwise appropriated, the Secretary 
        of the Treasury shall transfer to the Secretary of 
        Agriculture to carry out this subtitle $82,000,000 for 
        the period of fiscal years 2002 and 2003, to remain 
        available until expended.
          (2) Schedule for obligations.--Of the amounts made 
        available under paragraph (1)--
                  (A) not more than $5,000,000 shall be 
                obligated to carry out section 385C(d);
                  (B) not less than $75,000,000 shall be 
                obligated to carry out section 385C(f); and
                  (C) not less than $2,000,000 shall be 
                obligated to carry out section 385C(h).
          (3) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this subtitle the funds transferred under 
        paragraph (1), without further appropriation.
    (b) Fiscal Years 2004 through 2006.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
subtitle for each of fiscal years 2004 through 2006.

            Subtitle J--SEARCH Grants for Small Communities

SEC. 386A. DEFINITIONS.

    In this subtitle:
          (1) Council.--The term ``council'' means an 
        independent citizens' council established by section 
        386B(d).
          (2) Environmental project.--
                  (A) In general.--The term ``environmental 
                project'' means a project that--
                          (i) improves environmental quality; 
                        and
                          (ii) is necessary to comply with an 
                        environmental law (including a 
                        regulation).
                  (B) Inclusion.--The term ``environmental 
                project'' includes an initial feasibility study 
                of a project.
          (3) Region.--The term ``region'' means a geographic 
        area of a State, as determined by the Governor of the 
        State.
          (4) SEARCH grant.--The term ``SEARCH grant'' means a 
        grant for special environmental assistance for the 
        regulation of communities and habitat awarded under 
        section 386B(e)(3).
          (5) Small community.--The term ``small community'' 
        means an incorporated or unincorporated rural community 
        with a population of 2,500 inhabitants or less.
          (6) State.--The term ``State'' has the meaning given 
        the term in section 381A(1).

SEC. 386B. SEARCH GRANT PROGRAM.

    (a) In General.--There is established the SEARCH Grant 
Program.
    (b) Application.--
          (1) In general.--Not later than October 1 of each 
        fiscal year, a State may submit to the Secretary an 
        application to receive a grant under subsection (c) for 
        the fiscal year.
          (2) Requirements.--An application under paragraph (1) 
        shall contain--
                  (A) a certification by the State that the 
                State has appointed members to the council of 
                the State under subsection (c)(2)(C); and
                  (B) such information as the Secretary may 
                reasonably require.
    (c) Grants to States.--
          (1) In general.--Not later than 60 days after the 
        date on which the Office of Management and Budget 
        apportions any amounts made available under this 
        subtitle, for each fiscal year after the date of 
        enactment of this subtitle, the Secretary shall, on 
        request by a State--
                  (A) determine whether any application 
                submitted by the State under subsection (b) 
                meets the requirements of subsection (b)(2); 
                and
                  (B) subject to paragraph (2), subsection 
                (e)(4)(B)(ii), and section 386D(b), if the 
                Secretary determines that the application meets 
                the requirements of subsection (b)(2), award a 
                grant of not to exceed $1,000,000 to the State, 
                to be used by the council of the State to award 
                SEARCH grants under subsection (e).
          (2) Grants to certain states.--The aggregate amount 
        of grants awarded to States other than Alaska, Hawaii, 
        or 1 of the 48 contiguous States, under this subsection 
        shall not exceed $1,000,000 for any fiscal year.
    (d) Independent Citizens' Council.--
          (1) Establishment.--There is established in each 
        State an independent citizens' council to carry out the 
        duties described in this section.
          (2) Composition.--
                  (A) In general.--Each council shall be 
                composed of 9 members, appointed by the 
                Governor of the State.
                  (B) Representation; residence.--Each member 
                of a council shall--
                          (i) represent an individual region of 
                        the State, as determined by the 
                        Governor of the State in which the 
                        council is established;
                          (ii) reside in a small community of 
                        the State; and
                          (iii) be representative of the 
                        populations of the State.
                  (C) Appointment.--Before a State receives 
                funds under this subtitle, the State shall 
                appoint members to the council for the fiscal 
                year, except that not more than 1 member shall 
                be an agent, employee, or official of the State 
                government.
                  (D) Chairperson.--Each council shall select a 
                chairperson from among the members of the 
                council, except that a member who is an agent, 
                employee, or official of the State government 
                shall not serve as chairperson.
                  (E) Federal representation.--
                          (i) In general.--An officer, 
                        employee, or agent of the Federal 
                        Government may participate in the 
                        activities of the council--
                                  (I) in an advisory capacity; 
                                and
                                  (II) at the invitation of the 
                                council.
                          (ii) Rural development state 
                        directors.--On the request of the 
                        council of a State, the State Director 
                        for Rural Development of the State 
                        shall provide advice and consultation 
                        to the council.
          (3) SEARCH grants.--
                  (A) In general.--Each council shall review 
                applications for, and recommend awards of, 
                SEARCH grants to small communities that meet 
                the eligibility criteria under subsection (c).
                  (B) Recommendations.--In awarding a SEARCH 
                grant, a State--
                          (i) shall follow the recommendations 
                        of the council of the State;
                          (ii) shall award the funds for any 
                        recommended environmental project in a 
                        timely and expeditious manner; and
                          (iii) shall not award a SEARCH grant 
                        to a grantee or project in violation of 
                        any law of the State (including a 
                        regulation).
                  (C) No matching requirement.--A small 
                community that receives a SEARCH grant under 
                this section shall not be required to provide 
                matching funds.
    (e) SEARCH Grants for Small Communities.--
          (1) Eligibility.--A SEARCH grant shall be awarded 
        under this section only to a small community for 1 or 
        more environmental projects for which the small 
        community--
                  (A) needs funds to carry out initial 
                feasibility or environmental studies before 
                applying to traditional funding sources; or
                  (B) demonstrates, to the satisfaction of the 
                council, that the small community has been 
                unable to obtain sufficient funding from 
                traditional funding sources.
          (2) Application.--
                  (A) Date.--The council shall establish such 
                deadline by which small communities shall 
                submit applications for grants under this 
                section as will permit the council adequate 
                time to review and make recommendations 
                relating to the applications.
                  (B) Location of application.--A small 
                community shall submit an application described 
                in subparagraph (A) to the council in the State 
                in which the small community is located.
                  (C) Content of application.--An application 
                described in subparagraph (A) shall include--
                          (i) a description of the proposed 
                        environmental project (including an 
                        explanation of how the project would 
                        assist the small community in complying 
                        with an environmental law (including a 
                        regulation));
                          (ii) an explanation of why the 
                        project is important to the small 
                        community;
                          (iii) a description of all actions 
                        taken with respect to the project, 
                        including a description of any attempt 
                        to secure funding and a description of 
                        demonstrated need for funding for the 
                        project, as of the date of the 
                        application; and
                          (iv) a SEARCH grant application form 
                        provided by the council, completed and 
                        with all required supporting 
                        documentation.
          (3) Review and recommendation.--
                  (A) In general.--Except as provided in 
                subparagraph (B), not later than March 5 of 
                each fiscal year, each council shall--
                          (i) review all applications received 
                        under paragraph (2); and
                          (ii) recommend for award SEARCH 
                        grants to small communities based on--
                                  (I) an evaluation of the 
                                eligibility criteria under 
                                paragraph (1); and
                                  (II) the content of the 
                                application.
                  (B) Extension of deadline.--The State may 
                extend the deadline described in subparagraph 
                (A) by not more than 10 days in a case in which 
                the receipt of recommendations from a council 
                under subparagraph (A)(ii) is delayed because 
                of circumstances beyond the control of the 
                council, as determined by the State.
          (4) Unexpended funds.--
                  (A) In general.--If, for any fiscal year, any 
                unexpended funds remain after SEARCH grants are 
                awarded under subsection (d)(3)(B), the council 
                may repeat the application and review process 
                so that any remaining funds may be recommended 
                for award, and awarded, not later than July 30 
                of the fiscal year.
                  (B) Retention of funds.--
                          (i) In general.--Any unexpended funds 
                        that are not awarded under subsection 
                        (d)(3)(B) or subparagraph (A) shall be 
                        retained by the State for award during 
                        the following fiscal year.
                          (ii) Limitation.--A State that 
                        accumulates a balance of unexpended 
                        funds described in clause (i) of more 
                        than $3,000,000 shall be ineligible to 
                        apply for additional funds for SEARCH 
                        grants until such time as the State 
                        expends the portion of the balance that 
                        exceeds $3,000,000.

SEC. 386C. REPORT.

    Not later than September 1 of the first fiscal year for 
which a SEARCH grant is awarded by a council, and annually 
thereafter, the council shall submit to the Secretary a report 
that--
          (1) describes the number of SEARCH grants awarded 
        during the fiscal year;
          (2) identifies each small community that received a 
        SEARCH grant during the fiscal year;
          (3) describes the project or purpose for which each 
        SEARCH grant was awarded, including a statement of the 
        benefit to public health or the environment of the 
        environmental project receiving the grant funds; and
          (4) describes the status of each project or portion 
        of a project for which a SEARCH grant was awarded, 
        including a project or portion of a project for which a 
        SEARCH grant was awarded for any fiscal year before the 
        fiscal year in which the report is submitted.

SEC. 386D. FUNDING.

    (a) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out section 386B(c) $51,000,000, of 
which not to exceed $1,000,000 shall be used to make grants 
under section 386B(c)(2).
    (b) Actual Appropriation.--If funds to carry out section 
386B(c) are made available for a fiscal year in an amount that 
is less than the amount authorized under subsection (a) for the 
fiscal year, the appropriated funds shall be divided equally 
among the 50 States.
    (c) Unused Funds.--If, for any fiscal year, a State does 
not apply, or does not qualify, to receive funds under section 
386B(b), the funds that would have been made available to the 
State under section 386B(c) on submission by the State of a 
successful application under section 386B(b) shall be 
redistributed for award under this subtitle among States, the 
councils of which awarded 1 or more SEARCH grants during the 
preceding fiscal year.
    (d) Other Expenses.--There are authorized to be 
appropriated such sums as are necessary to carry out the 
provisions of this subtitle (other than section 386B(c)).

          Subtitle K--Northern Great Plains Regional Authority

SEC. 387A. DEFINITIONS.

    In this subtitle:
          (1) Authority.--The term ``Authority'' means the 
        Northern Great Plains Regional Authority established by 
        section 387B.
          (2) Federal grant program.--The term ``Federal grant 
        program'' means a Federal grant program to provide 
        assistance in--
                  (A) acquiring or developing land;
                  (B) constructing or equipping a highway, 
                road, bridge, or facility; or
                  (C) carrying out other economic development 
                activities.
          (3) Region.--The term ``region'' means the States of 
        Iowa, Minnesota, Nebraska, North Dakota, and South 
        Dakota.

SEC. 387B. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    (a) Establishment.--
          (1) In general.--There is established the Northern 
        Great Plains Regional Authority.
          (2) Composition.--The Authority shall be composed 
        of--
                  (A) a Federal member, to be appointed by the 
                President, with the advice and consent of the 
                Senate; and
                  (B) the Governor (or a designee of the 
                Governor) of each State in the region that 
                elects to participate in the Authority.
          (3) Cochairpersons.--The Authority shall be headed 
        by--
                  (A) the Federal member, who shall serve--
                          (i) as the Federal cochairperson; and
                          (ii) as a liaison between the Federal 
                        Government and the Authority; and
                  (B) a State cochairperson, who--
                          (i) shall be a Governor of a 
                        participating State in the region; and
                          (ii) shall be elected by the State 
                        members for a term of not less than 1 
                        year.
    (b) Alternate Members.--
          (1) State alternates.--The State member of a 
        participating State may have a single alternate, who 
        shall be--
                  (A) a resident of that State; and
                  (B) appointed by the Governor of the State.
          (2) Alternate federal cochairperson.--The President 
        shall appoint an alternate Federal cochairperson.
          (3) Quorum.--A State alternate shall not be counted 
        toward the establishment of a quorum of the Authority 
        in any instance in which a quorum of the State members 
        is required to be present.
          (4) Delegation of power.--No power or responsibility 
        of the Authority specified in paragraphs (2) and (3) of 
        subsection (c), and no voting right of any Authority 
        member, shall be delegated to any person--
                  (A) who is not an Authority member; or
                  (B) who is not entitled to vote in Authority 
                meetings.
    (c) Voting.--
          (1) In general.--A decision by the Authority shall 
        require a majority vote of the Authority (not including 
        any member representing a State that is delinquent 
        under subsection (g)(2)(C)) to be effective.
          (2) Quorum.--A quorum of State members shall be 
        required to be present for the Authority to make any 
        policy decision, including--
                  (A) a modification or revision of an 
                Authority policy decision;
                  (B) approval of a State or regional 
                development plan; and
                  (C) any allocation of funds among the States.
          (3) Project and grant proposals.--The approval of 
        project and grant proposals shall be--
                  (A) a responsibility of the Authority; and
                  (B) conducted in accordance with section 
                387I.
          (4) Voting by alternate members.--An alternate member 
        shall vote in the case of the absence, death, 
        disability, removal, or resignation of the Federal or 
        State representative for which the alternate member is 
        an alternate.
    (d) Duties.--The Authority shall--
          (1) develop, on a continuing basis, comprehensive and 
        coordinated plans and programs to establish priorities 
        and approve grants for the economic development of the 
        region, giving due consideration to other Federal, 
        State, and local planning and development activities in 
        the region;
          (2) not later than 220 days after the date of 
        enactment of this subtitle, establish priorities in a 
        development plan for the region (including 5-year 
        regional outcome targets);
          (3) assess the needs and assets of the region based 
        on available research, demonstrations, investigations, 
        assessments, and evaluations of the region prepared by 
        Federal, State, and local agencies, universities, local 
        development districts, and other nonprofit groups;
          (4) formulate and recommend to the Governors and 
        legislatures of States that participate in the 
        Authority forms of interstate cooperation;
          (5) work with State and local agencies in developing 
        appropriate model legislation;
          (6)(A) enhance the capacity of, and provide support 
        for, local development districts in the region; or
          (B) if no local development district exists in an 
        area in a participating State in the region, foster the 
        creation of a local development district;
          (7) encourage private investment in industrial, 
        commercial, and other economic development projects in 
        the region; and
          (8) cooperate with and assist State governments with 
        economic development programs of participating States.
    (e) Administration.--In carrying out subsection (d), the 
Authority may--
          (1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and 
        print or otherwise reproduce and distribute a 
        description of the proceedings and reports on actions 
        by the Authority as the Authority considers 
        appropriate;
          (2) authorize, through the Federal or State 
        cochairperson or any other member of the Authority 
        designated by the Authority, the administration of 
        oaths if the Authority determines that testimony should 
        be taken or evidence received under oath;
          (3) request from any Federal, State, or local 
        department or agency such information as may be 
        available to or procurable by the department or agency 
        that may be of use to the Authority in carrying out 
        duties of the Authority;
          (4) adopt, amend, and repeal bylaws and rules 
        governing the conduct of Authority business and the 
        performance of Authority duties;
          (5) request the head of any Federal department or 
        agency to detail to the Authority such personnel as the 
        Authority requires to carry out duties of the 
        Authority, each such detail to be without loss of 
        seniority, pay, or other employee status;
          (6) request the head of any State department or 
        agency or local government to detail to the Authority 
        such personnel as the Authority requires to carry out 
        duties of the Authority, each such detail to be without 
        loss of seniority, pay, or other employee status;
          (7) provide for coverage of Authority employees in a 
        suitable retirement and employee benefit system by--
                  (A) making arrangements or entering into 
                contracts with any participating State 
                government; or
                  (B) otherwise providing retirement and other 
                employee benefit coverage;
          (8) accept, use, and dispose of gifts or donations of 
        services or real, personal, tangible, or intangible 
        property;
          (9) enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as are 
        necessary to carry out Authority duties, including any 
        contracts, leases, or cooperative agreements with--
                  (A) any department, agency, or 
                instrumentality of the United States;
                  (B) any State (including a political 
                subdivision, agency, or instrumentality of the 
                State); or
                  (C) any person, firm, association, or 
                corporation; and
          (10) establish and maintain a central office and 
        field offices at such locations as the Authority may 
        select.
    (f) Federal Agency Cooperation.--A Federal agency shall--
          (1) cooperate with the Authority; and
          (2) provide, on request of the Federal cochairperson, 
        appropriate assistance in carrying out this subtitle, 
        in accordance with applicable Federal laws (including 
        regulations).
    (g) Administrative Expenses.--
          (1) In general.--Administrative expenses of the 
        Authority (except for the expenses of the Federal 
        cochairperson, including expenses of the alternate and 
        staff of the Federal cochairperson, which shall be paid 
        solely by the Federal Government) shall be paid--
                  (A) by the Federal Government, in an amount 
                equal to 50 percent of the administrative 
                expenses; and
                  (B) by the States in the region participating 
                in the Authority, in an amount equal to 50 
                percent of the administrative expenses.
          (2) State share.--
                  (A) In general.--The share of administrative 
                expenses of the Authority to be paid by each 
                State shall be determined by the Authority.
                  (B) No federal participation.--The Federal 
                cochairperson shall not participate or vote in 
                any decision under subparagraph (A).
                  (C) Delinquent states.--If a State is 
                delinquent in payment of the State's share of 
                administrative expenses of the Authority under 
                this subsection--
                          (i) no assistance under this subtitle 
                        shall be furnished to the State 
                        (including assistance to a political 
                        subdivision or a resident of the 
                        State); and
                          (ii) no member of the Authority from 
                        the State shall participate or vote in 
                        any action by the Authority.
    (h) Compensation.--
        (1) Federal cochairperson.--The Federal cochairperson 
        shall be compensated by the Federal Government at level 
        III of the Executive Schedule in subchapter II of 
        chapter 53 of title 5, UnitedStates Code.
          (2) Alternate federal cochairperson.--The alternate 
        Federal cochairperson--
                  (A) shall be compensated by the Federal 
                Government at level V of the Executive Schedule 
                described in paragraph (1); and
                  (B) when not actively serving as an alternate 
                for the Federal cochairperson, shall perform 
                such functions and duties as are delegated by 
                the Federal cochairperson.
          (3) State members and alternates.--
                  (A) In general.--A State shall compensate 
                each member and alternate representing the 
                State on the Authority at the rate established 
                by law of the State.
                  (B) No additional compensation.--No State 
                member or alternate member shall receive any 
                salary, or any contribution to or 
                supplementation of salary from any source other 
                than the State for services provided by the 
                member or alternate to the Authority.
          (4) Detailed employees.--
                  (A) In general.--No person detailed to serve 
                the Authority under subsection (e)(6) shall 
                receive any salary or any contribution to or 
                supplementation of salary for services provided 
                to the Authority from--
                          (i) any source other than the State, 
                        local, or intergovernmental department 
                        or agency from which the person was 
                        detailed; or
                          (ii) the Authority.
                  (B) Violation.--Any person that violates this 
                paragraph shall be fined not more than $5,000, 
                imprisoned not more than 1 year, or both.
                  (C) Applicable law.--The Federal 
                cochairperson, the alternate Federal 
                cochairperson, and any Federal officer or 
                employee detailed to duty on the Authority 
                under subsection (e)(5) shall not be subject to 
                subparagraph (A), but shall remain subject to 
                sections 202 through 209 of title 18, United 
                States Code.
          (5) Additional personnel.--
                  (A) Compensation.--
                          (i) In general.--The Authority may 
                        appoint and fix the compensation of an 
                        executive director and such other 
                        personnel as are necessary to enable 
                        the Authority to carry out the duties 
                        of the Authority.
                          (ii) Exception.--Compensation under 
                        clause (i) shall not exceed the maximum 
                        rate for the Senior Executive Service 
                        under section 5382 of title 5, United 
                        States Code, including any applicable 
                        locality-based comparability payment 
                        that may be authorized under section 
                        5304(h)(2)(C) of that title.
                  (B) Executive director.--The executive 
                director shall be responsible for--
                          (i) the carrying out of the 
                        administrative duties of the Authority;
                          (ii) direction of the Authority 
                        staff; and
                          (iii) such other duties as the 
                        Authority may assign.
                  (C) No federal employee status.--No member, 
                alternate, officer, or employee of the 
                Authority (except the Federal cochairperson of 
                the Authority, the alternate and staff for the 
                Federal cochairperson, and any Federal employee 
                detailed to the Authority under subsection 
                (e)(5)) shall be considered to be a Federal 
                employee for any purpose.
    (i) Conflicts of Interest.--
          (1) In general.--Except as provided under paragraph 
        (2), no State member, alternate, officer, or employee 
        of the Authority shall participate personally and 
        substantially as a member, alternate, officer, or 
        employee of the Authority, through decision, approval, 
        disapproval, recommendation, the rendering of advice, 
        investigation, or otherwise, in any proceeding, 
        application, request for a ruling or other 
        determination, contract, claim, controversy, or other 
        matter in which, to knowledge of the member, alternate, 
        officer, or employee--
                  (A) the member, alternate, officer, or 
                employee;
                  (B) the spouse, minor child, partner, or 
                organization (other than a State or political 
                subdivision of the State) of the member, 
                alternate, officer, or employee, in which the 
                member, alternate, officer, or employee is 
                serving as officer, director, trustee, partner, 
                or employee; or
                  (C) any person or organization with whom the 
                member, alternate, officer, or employee is 
                negotiating or has any arrangement concerning 
                prospective employment;
        has a financial interest.
          (2) Disclosure.--Paragraph (1) shall not apply if the 
        State member, alternate, officer, or employee--
                  (A) immediately advises the Authority of the 
                nature and circumstances of the proceeding, 
                application, request for a ruling or other 
                determination, contract, claim, controversy, or 
                other particular matter presenting a potential 
                conflict of interest;
                  (B) makes full disclosure of the financial 
                interest; and
                  (C) before the proceeding concerning the 
                matter presenting the conflict of interest, 
                receives a written determination by the 
                Authority that the interest is not so 
                substantial as to be likely to affect the 
                integrity of the services that the Authority 
                may expect from the State member, alternate, 
                officer, or employee.
          (3) Violation.--Any person that violates this 
        subsection shall be fined not more than $10,000, 
        imprisoned not more than 2 years, or both.
    (j) Validity of Contracts, Loans, and Grants.--The 
Authority may declare void any contract, loan, or grant of or 
by the Authority in relation to which the Authority determines 
that there has been a violation of any provision under 
subsection (h)(4), subsection (i), or sections 202 through 209 
of title 18, United States Code.

SEC. 387C. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.

    (a) In General.--The Authority may approve grants to 
States, local governments, and public and nonprofit 
organizations for projects, approved in accordance with section 
387I--
          (1) to develop the transportation and 
        telecommunication infrastructure of the region for the 
        purpose of facilitating economic development in the 
        region (except that grants for this purpose may only be 
        made to States, local governments, and nonprofit 
        organizations);
          (2) to assist the region in obtaining the job 
        training, employment-related education, and business 
        development (with an emphasis on entrepreneurship) that 
        are needed to build and maintain strong local 
        economies;
          (3) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for 
        improving basic public services;
          (4) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for 
        equipping industrial parks and related facilities; and
          (5) to otherwise achieve the purposes of this 
        subtitle.
    (b) Funding.--
          (1) In general.--Funds for grants under subsection 
        (a) may be provided--
                  (A) entirely from appropriations to carry out 
                this section;
                  (B) in combination with funds available under 
                another Federal or Federal grant program; or
                  (C) from any other source.
          (2) Priority of funding.--To best build the 
        foundations for long-term economic development and to 
        complement other Federal and State resources in the 
        region, Federal funds available under this subtitle 
        shall be focused on the activities in the following 
        order or priority:
                  (A) Basic public infrastructure in distressed 
                counties and isolated areas of distress.
                  (B) Transportation and telecommunication 
                infrastructure for the purpose of facilitating 
                economic development in the region.
                  (C) Business development, with emphasis on 
                entrepreneurship.
                  (D) Job training or employment-related 
                education, with emphasis on use of existing 
                public educational institutions located in the 
                region.
          (3) Federal share in grant programs.--Notwithstanding 
        any provision of law limiting the Federal share in any 
        grant program, funds appropriated to carry out this 
        section may be used to increase a Federal share in a 
        grant program, as the Authority determines appropriate.

SEC. 387D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    (a) Finding.--Congress finds that certain States and local 
communities of the region, including local development 
districts, may be unable to take maximum advantage of Federal 
grant programs for which the States and communities are 
eligible because--
          (1) they lack the economic resources to meet the 
        required matching share; or
          (2) there are insufficient funds available under the 
        applicable Federal grant law authorizing the program to 
        meet pressing needs of the region.
    (b) Federal Grant Program Funding.--In accordance with 
subsection (c), the Federal cochairperson may use amounts made 
available to carry out this subtitle, without regard to any 
limitations on areas eligible for assistance or authorizations 
for appropriation under any other Act, to fund all or any 
portion of the basic Federal contribution to a project or 
activity under a Federal grant program in the region in an 
amount that is above the fixed maximum portion of the cost of 
the project otherwise authorized by applicable law, but not to 
exceed 90 percent of the costs of the project (except as 
provided in section 387F(b)).
    (c) Certification.--
          (1) In general.--In the case of any program or 
        project for which all or any portion of the basic 
        Federal contribution to the project under a Federal 
        grant program is proposed to be made under this 
        section, no Federal contribution shall be made until 
        the Federal official administering the Federal law 
        authorizing the contribution certifies that the program 
        or project--
                  (A) meets the applicable requirements of the 
                applicable Federal grant law; and
                  (B) could be approved for Federal 
                contribution under the law if funds were 
                available under the law for the program or 
                project.
          (2) Certification by authority.--
                  (A) In general.--The certifications and 
                determinations required to be made by the 
                Authority for approval of projects under this 
                subtitle in accordance with section 387I--
                          (i) shall be controlling; and
                          (ii) shall be accepted by the Federal 
                        agencies.
                  (B) Acceptance by federal cochairperson.--Any 
                finding, report, certification, or 
                documentation required to be submitted to the 
                head of the department, agency, or 
                instrumentality of the Federal Government 
                responsible for the administration of any 
                Federal grant program shall be accepted by the 
                Federal cochairperson with respect to a 
                supplemental grant for any project under the 
                program.

SEC. 387E. LOCAL DEVELOPMENT DISTRICTS; CERTIFICATION AND 
                    ADMINISTRATIVE EXPENSES.

    (a) Definition of Local Development District.--In this 
section, the term ``local development district'' means an 
entity that--
          (1) is--
                  (A) a planning district in existence on the 
                date of enactment of this subtitle that is 
                recognized by the Economic Development 
                Administration of the Department of Commerce; 
                or
                  (B) where an entity described in subparagraph 
                (A) does not exist--
                          (i) organized and operated in a 
                        manner that ensures broad-based 
                        community participation and an 
                        effective opportunity for other 
                        nonprofit groups to contribute to the 
                        development and implementation of 
                        programs in the region;
                          (ii) governed by a policy board with 
                        at least a simple majority of members 
                        consisting of elected officials or 
                        employees of a general purpose unit of 
                        local government who have been 
                        appointed to represent the government;
                          (iii) certified to the Authority as 
                        having a charter or authority that 
                        includes the economic development of 
                        counties or parts of counties or other 
                        political subdivisions within the 
                        region--
                                  (I) by the Governor of each 
                                State in which the entity is 
                                located; or
                                  (II) by the State officer 
                                designated by the appropriate 
                                State law to make the 
                                certification; and
                          (iv)(I) a nonprofit incorporated body 
                        organized or chartered under the law of 
                        the State in which the entity is 
                        located;
                          (II) a nonprofit agency or 
                        instrumentality of a State or local 
                        government;
                          (III) a public organization 
                        established before the date of 
                        enactment of this subtitle under State 
                        law for creation of multi-
                        jurisdictional, area-wide planning 
                        organizations; or
                          (IV) a nonprofit association or 
                        combination of bodies, agencies, and 
                        instrumentalities described in 
                        subclauses (I) through (III); and
          (2) has not, as certified by the Federal 
        cochairperson--
                  (A) inappropriately used Federal grant funds 
                from any Federal source; or
                  (B) appointed an officer who, during the 
                period in which another entity inappropriately 
                used Federal grant funds from any Federal 
                source, was an officer of the other entity.
    (b) Grants to Local Development Districts.--
          (1) In general.--The Authority may make grants for 
        administrative expenses under this section.
          (2) Conditions for grants.--
                  (A) Maximum amount.--The amount of any grant 
                awarded under paragraph (1) shall not exceed 80 
                percent of the administrative expenses of the 
                local development district receiving the grant.
                  (B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded to a State 
                agency certified as a local development 
                district for a period greater than 3 years.
                  (C) Local share.--The contributions of a 
                local development district for administrative 
                expenses may be in cash or in kind, fairly 
                evaluated, including space, equipment, and services.
    (c) Duties of Local Development Districts.--A local 
development district shall--
          (1) operate as a lead organization serving 
        multicounty areas in the region at the local level; and
          (2) serve as a liaison between State and local 
        governments, nonprofit organizations (including 
        community-based groups and educational institutions), 
        the business community, and citizens that--
                  (A) are involved in multijurisdictional 
                planning;
                  (B) provide technical assistance to local 
                jurisdictions and potential grantees; and
                  (C) provide leadership and civic development 
                assistance.

SEC. 387F. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED COUNTIES.

    (a) Designations.--Not later than 90 days after the date of 
enactment of this subtitle, and annually thereafter, the 
Authority, in accordance with such criteria as the Authority 
may establish, shall designate--
          (1) as distressed counties, counties in the region 
        that are the most severely and persistently distressed 
        and underdeveloped and have high rates of poverty, 
        unemployment, or outmigration;
          (2) as nondistressed counties, counties in the region 
        that are not designated as distressed counties under 
        paragraph (1); and
          (3) as isolated areas of distress, areas located in 
        nondistressed counties (as designated under paragraph 
        (2)) that have high rates of poverty, unemployment, or 
        outmigration.
    (b) Distressed Counties.--
          (1) In general.--The Authority shall allocate at 
        least 75 percent of the appropriations made available 
        under section 387M for programs and projects designed 
        to serve the needs of distressed counties and isolated 
        areas of distress in the region.
          (2) Funding limitations.--The funding limitations 
        under section 387D(b) shall not apply to a project 
        providing transportation or telecommunication or basic 
        public services to residents of 1 or more distressed 
        counties or isolated areas of distress in the region.
    (c) Nondistressed Counties.--
          (1) In general.--Except as provided in this 
        subsection, no funds shall be provided under this 
        subtitle for a project located in a county designated 
        as a nondistressed county under subsection (a)(2).
          (2) Exceptions.--
                  (A) In general.--The funding prohibition 
                under paragraph (1) shall not apply to grants 
                to fund the administrative expenses of local 
                development districts under section 387E(b).
                  (B) Multicounty projects.--The Authority may 
                waive the application of the funding 
                prohibition under paragraph (1) to--
                          (i) a multicounty project that 
                        includes participation by a 
                        nondistressed county; or
                          (ii) any other type of project;
                if the Authority determines that the project 
                could bring significant benefits to areas of 
                the region outside a nondistressed county.
                  (C) Isolated areas of distress.--For a 
                designation of an isolated area of distress for 
                assistance to be effective, the designation 
                shall be supported--
                          (i) by the most recent Federal data 
                        available; or
                          (ii) if no recent Federal data are 
                        available, by the most recent data 
                        available through the government of the 
                        State in which the isolated area of 
                        distress is located.
    (d) Transportation, Telecommunication, and Basic Public 
Infrastructure.--The Authority shall allocate at least 50 
percent of any funds made available under section 387M for 
transportation, telecommunication, and basic public 
infrastructure projects authorized under paragraphs (1) and (3) 
of section 387C(a).

SEC. 387G. DEVELOPMENT PLANNING PROCESS.

    (a) State Development Plan.--In accordance with policies 
established by the Authority, each State member shall submit a 
development plan for the area of the region represented by the 
State member.
    (b) Content of Plan.--A State development plan submitted 
under subsection (a) shall reflect the goals, objectives, and 
priorities identified in the regional development plan 
developed under section 387B(d)(2).
    (c) Consultation With Interested Local Parties.--In 
carrying out the development planningprocess (including the 
selection of programs and projects for assistance), a State may--
          (1) consult with--
                  (A) local development districts; and
                  (B) local units of government; and
          (2) take into consideration the goals, objectives, 
        priorities, and recommendations of the entities 
        described in paragraph (1).
    (d) Public Participation.--
          (1) In general.--The Authority and applicable State 
        and local development districts shall encourage and 
        assist, to the maximum extent practicable, public 
        participation in the development, revision, and 
        implementation of all plans and programs under this 
        subtitle.
          (2) Regulations.--The Authority shall develop 
        guidelines for providing public participation described 
        in paragraph (1), including public hearings.

SEC. 387H. PROGRAM DEVELOPMENT CRITERIA.

    (a) In General.--In considering programs and projects to be 
provided assistance under this subtitle, and in establishing a 
priority ranking of the requests for assistance provided by the 
Authority, the Authority shall follow procedures that ensure, 
to the maximum extent practicable, consideration of--
          (1) the relationship of the project or class of 
        projects to overall regional development;
          (2) the per capita income and poverty and 
        unemployment and outmigration rates in an area;
          (3) the financial resources available to the 
        applicants for assistance seeking to carry out the 
        project, with emphasis on ensuring that projects are 
        adequately financed to maximize the probability of 
        successful economic development;
          (4) the importance of the project or class of 
        projects in relation to other projects or classes of 
        projects that may be in competition for the same funds;
          (5) the prospects that the project for which 
        assistance is sought will improve, on a continuing 
        rather than a temporary basis, the opportunities for 
        employment, the average level of income, or the 
        economic development of the area served by the project; 
        and
          (6) the extent to which the project design provides 
        for detailed outcome measurements by which grant 
        expenditures and the results of the expenditures may be 
        evaluated.
    (b) No Relocation Assistance.--No financial assistance 
authorized by this subtitle shall be used to assist a person or 
entity in relocating from one area to another, except that 
financial assistance may be used as otherwise authorized by 
this title to attract businesses from outside the region to the 
region.
    (c) Reduction of Funds.--Funds may be provided for a 
program or project in a State under this subtitle only if the 
Authority determines that the level of Federal or State 
financial assistance provided under a law other than this 
subtitle, for the same type of program or project in the same 
area of the State within the region, will not be reduced as a 
result of funds made available by this subtitle.

SEC. 387I. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

    (a) In General.--A State or regional development plan or 
any multistate subregional plan that is proposed for 
development under this subtitle shall be reviewed by the 
Authority.
    (b) Evaluation by State Member.--An application for a grant 
or any other assistance for a project under this subtitle shall 
be made through and evaluated for approval by the State member 
of the Authority representing the applicant.
    (c) Certification.--An application for a grant or other 
assistance for a project shall be approved only on 
certification by the State member that the application for the 
project--
          (1) describes ways in which the project complies with 
        any applicable State development plan;
          (2) meets applicable criteria under section 387H;
          (3) provides adequate assurance that the proposed 
        project will be properly administered, operated, and 
        maintained; and
          (4) otherwise meets the requirements of this 
        subtitle.
    (d) Votes for Decisions.--On certification by a State 
member of the Authority of an application for a grant or other 
assistance for a specific project under this section, an 
affirmative vote of the Authority under section 387B(c) shall 
be required for approval of the application.

SEC. 387J. CONSENT OF STATES.

    Nothing in this subtitle requires any State to engage in or 
accept any program under this subtitle without the consent of 
the State.

SEC. 387K. RECORDS.

    (a) Records of the Authority.--
          (1) In general.--The Authority shall maintain 
        accurate and complete records of all transactions and 
        activities of the Authority.
          (2) Availability.--All records of the Authority shall 
        be available for audit and examination by the 
        Comptroller General of the United States and the 
        Inspector General of the Department of Agriculture 
        (including authorized representatives of the 
        Comptroller General and the Inspector General of the 
        Department of Agriculture).
    (b) Records of Recipients of Federal Assistance.--
          (1) In general.--A recipient of Federal funds under 
        this subtitle shall, as required by the Authority, 
        maintain accurate and complete records of transactions 
        and activities financed with Federal funds and report 
        on the transactions and activities to the Authority.
          (2) Availability.--All records required under 
        paragraph (1) shall be available for audit by the 
        Comptroller General of the United States, the Inspector 
        General of the Department of Agriculture, and the 
        Authority (including authorized representatives of the 
        Comptroller General, the Inspector General of the 
        Department of Agriculture, and the Authority).
    (c) Annual Audit.--The Inspector General of the Department 
of Agriculture shall audit the activities, transactions, and 
records of the Authority on an annual basis.

SEC. 387L. ANNUAL REPORT.

    Not later than 180 days after the end of each fiscal year, 
the Authority shall submit to the President and to Congress a 
report describing the activities carried out under this 
subtitle.

SEC. 387M. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There is authorized to be appropriated to 
the Authority to carry out this subtitle $30,000,000 for each 
of fiscal years 2002 through 2006, to remain available until 
expended.
    (b) Administrative Expenses.--Not more than 5 percent of 
the amount appropriated under subsection (a) for a fiscal year 
shall be used for administrative expenses of the Authority.
    (c) Minimum State Share of Grants.--Notwithstanding any 
other provision of this subtitle, for any fiscal year, the 
aggregate amount of grants received by a State and all persons 
or entities in the State under this subtitle shall be not less 
than \1/3\ of the product obtained by multiplying--
          (1) the aggregate amount of grants under this 
        subtitle for the fiscal year; and
          (2) the ratio that--
                  (A) the population of the State (as 
                determined by the Secretary of Commerce based 
                on the most recent decennial census for which 
                data are available); bears to
                  (B) the population of the region (as so 
                determined).

SEC. 387N. TERMINATION OF AUTHORITY.

    This subtitle and the authority provided under this 
subtitle expire on October 1, 2006.''.

           *       *       *       *       *       *       *


                RURAL ECONOMIC DEVELOPMENT ACT OF 1990

           *       *       *       *       *       *       *


                       CHAPTER 5--EFFECTIVE DATE


SEC. 2368. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), this 
subtitle and the amendments made by this subtitle shall take 
effect on the date of enactment of this Act.
    (b) Technical Amendments.--The amendments made by section 
2367 shall take effect as if such amendments had been included 
in chapter 2 of subtitle D of title I of the Omnibus Budget 
Reconciliation Act of 1987 on the date of enactment of such 
chapter.

           [Subtitle G--Rural Revitalization Through Forestry

               [CHAPTER 1--FORESTRY RURAL REVITALIZATION


[SEC. 2371. FORESTRY RURAL REVITALIZATION.

    [(a) Establishment of Economic Development and Global 
Marketing Program.--The Secretaryof Agriculture, acting through 
the Extension Service and the Cooperative Extension System, and in 
consultation with the Forest Service, shall establish and implement 
educational programs and provide technical assistance to assist 
businesses, industries, and policymakers to create jobs, raise incomes, 
and increase public revenues in manners consistent with environmental 
concerns.
    [(b) Activities.--Each program established under subsection 
(a) shall--
          [(1) transfer technologies to natural resource-based 
        industries in the United States to make such industries 
        more efficient, productive, and competitive;
          [(2) assist businesses to identify global marketing 
        opportunities, conduct business on an international 
        basis, and market themselves more effectively; and
          [(3) train local leaders in strategic community 
        economic development.
    [(c) Types of Programs.--The Secretary of Agriculture shall 
establish specific programs under subsection (a) to--
          [(1) deliver educational services focused on 
        community economic analysis, economic diversification, 
        economic impact analysis, retention and expansion of 
        existing commodity and noncommodity industries, amenity 
        resource and tourism development, and entrepreneurship 
        focusing on forest lands and rural communities;
          [(2) use Cooperative Extension System databases and 
        analytical tools to help communities diversify their 
        economic bases, add value locally to raw forest product 
        materials, and retain revenues by helping to develop 
        local businesses and industries to supply forest 
        products locally; and
          [(3) use the full resources of the Cooperative 
        Extension Service, including land-grant universities 
        and county offices, to promote economic development 
        that is sustainable and environmentally sound.

        [CHAPTER 2--NATIONAL FOREST-DEPENDENT RURAL COMMUNITIES


[SEC. 2372. SHORT TITLE.

    [This chapter may be cited as the ``National Forest-
Dependent Rural Communities Economic Diversification Act of 
1990''.

[SEC. 2373. FINDINGS AND PURPOSES.

    [(a) Findings.--The Congress finds that--
          [(1) the economic well-being of rural America is 
        vital to our national growth and prosperity;
          [(2) the economic well-being of many rural 
        communities depends upon the goods and services that 
        are derived from national forests;
          [(3) the economies of many of these communities 
        suffer from a lack of industrial and business 
        diversity;
          [(4) this lack of diversity is particularly serious 
        in communities whose economies are predominantly 
        dependent on timber and recreation resources and where 
        management decisions made on the national forests by 
        Federal and private organizations may disrupt the 
        supply of those resources;
          [(5) the Forest Service has expertise and resources 
        that could be directed to promote modernization and 
        economic diversification of existing industries and 
        services based on forest resources;
          [(6) the Forest Service has the technical expertise 
        to provide leadership, in cooperation with other 
        governmental agencies and the private sector, to assist 
        rural communities dependent upon national forest 
        resources to upgrade existing industries and diversify 
        by developing new economic activity in non-forest-
        related industries; and
          [(7) technical assistance, training, education, and 
        other assistance provided by the Department of 
        Agriculture can be targeted to provide immediate help 
        to those rural communities in greatest need.
    [(b) Purposes.--The purposes of this chapter are--
          [(1) to provide assistance to rural communities that 
        are located in or near national forests and that are 
        economically dependent upon forest resources or are 
        likely to be economically disadvantaged by Federal or 
        private sector land management practices;
          [(2) to aid in diversifying such communities' 
        economic bases; and
          [(3) to improve the economic, social, and 
        environmental well-being of rural America.

[SEC. 2374. DEFINITIONS.

    [As used in this chapter:
          [(1) The term ``action team'' means a rural forestry 
        and economic diversification action team established by 
        the Secretary pursuant to section 2375(b).
          [(2) The term ``economically disadvantaged'' means 
        economic hardship due to the loss of jobs or income 
        (labor or proprietor) derived from forestry, the wood 
        products industry, or related commercial enterprises 
        such as recreation and tourism in the national forest.
          [(3) The term ``rural community'' means--
                  [(A) any town, township, municipality, or 
                other similar unit of general purpose local 
                government having a population of not more than 
                10,000 individuals (according to the latest 
                decennial census) that is located in a county 
                where at least 15 percent of the total primary 
                and secondary labor and proprietor income is 
                derived from forestry, wood products, and 
                forest-related industries such as recreation 
                and tourism; or
                  [(B) any county or similar unit of general 
                purpose local government having a population of 
                not more than 22,550 individuals (according to 
                the latest decennial census) in which at least 
                15 percent of the total primary and secondary 
                labor and proprietor income is derived from 
                forestry, wood products, and forest-related 
                industries such as recreation and tourism,
        that is located within the boundary, or within 100 
        miles of the boundary, of a national forest.
          [(4) The term ``Secretary'' means the Secretary of 
        Agriculture.

[SEC. 2375. RURAL FORESTRY AND ECONOMIC DIVERSIFICATION ACTION TEAMS.

    [(a) Requests for Assistance.--Economically disadvantaged 
rural communities may request assistance from the Secretary in 
identifying opportunities that will promote economic 
improvement and diversification and revitalization.
    [(b) Establishment.--Upon request, the Secretary may 
establish rural forestry and economic diversification action 
teams to prepare an action plan to provide technical assistance 
to economically disadvantaged communities. The action plan 
shall identify opportunities to promote economic 
diversification and enhance local economies now dependent upon 
national forest resources. The action team may also identify 
opportunities to use value-added products and services derived 
from national forest resources.
    [(c) Organization.--The Secretary shall design and organize 
any action team established pursuant to subsection (b) to meet 
the unique needs of the requesting rural community. Each action 
team shall be directed by an employee of the Forest Service and 
may include personnel from other agencies within the Department 
of Agriculture, from other Federal and State departments and 
agencies, and from the private sector.
    [(d) Cooperation.--In preparing action plans, the Secretary 
may cooperate with State and local governments, universities, 
private companies, individuals, and nonprofit organizations for 
procurement of services determined necessary or desirable.
    [(e) Eligibility.--The Secretary shall ensure that no 
substantially similar geographical or defined local area in a 
State receives a grant for technical assistance to an 
economically disadvantaged community under this chapter and a 
grant for assistance under a designated rural development 
program, as defined in section 365(b)(2) of the Consolidated 
Farm and Rural Development Act, during any continuous five-year 
period.
    [(f) Approval.--After reviewing requests under this section 
for financial and economic feasibility and viability, the 
Secretary shall approve and implement in accordance with 
section 2376 those action plans that will achieve the purposes 
of this chapter.

[SEC. 2376. ACTION PLAN IMPLEMENTATION.

    [(a) In General.--Action plans shall be implemented, 
insofar as practicable, to upgrade existing industries to use 
forest resources more efficiently and to expand the economic 
base of rural communities so as to alleviate or reduce their 
dependence on national forest resources.
    [(b) Assistance.--To implement action plans, the Secretary 
may make grants and enter into cooperative agreements and 
contracts to provide necessary technical and related 
assistance. Such grants, cooperative agreements, and contracts 
may be with the affected rural community, State and local 
governments, universities, corporations, and other persons.
    [(c) Limitation.--The Federal contribution to the overall 
implementation of an action plan shall not exceed 80 percent of 
the total cost of the plan, including administrative and other 
costs. In calculating the Federal contribution, the Secretary 
shall take into account the fair market value of equipment, 
personnel, and services provided.
    [(d) Available Authority.--The Secretary may use the 
Secretary's authority under the Cooperative Forestry Assistance 
Act of 1978 (16 U.S.C. 2101 et seq.) and other Federal, State, 
and local governmental authorities in implementing action 
plans.
    [(e) Consistency With Forest Plans.--The implementation of 
action plans shall be consistent with land and resource 
management plans.

[SEC. 2377. TRAINING AND EDUCATION.

    [(a) Programs.--In furtherance of an action plan, the 
Secretary may use the Extension Service and other appropriate 
agencies of the Department of Agriculture to develop and 
conduct education programs that assist businesses, elected or 
appointed officials, and individuals in rural communities to 
deal with the effects of a transition from being economically 
disadvantaged to economic diversification. These programs may 
include--
          [(1) community economic analysis and strategic 
        planning;
          [(2) methods for improving and retooling enterprises 
        now dependent on national forest resources;
          [(3) methods for expanding enterprises and creating 
        new economic opportunities by emphasizing economic 
        opportunities in other industries or services not 
        dependent on national forest resources; and
          [(4) assistance in the evaluation, counseling, and 
        enhancement of vocational skills, training in basic and 
        remedial literacy skills, assistance in job seeking 
        skills, and training in starting or operating a 
        business enterprise.
    [(b) Existing Educational and Training Programs.--Insofar 
as practicable, the Secretary shall use existing Federal, 
State, and private education resources in carrying out these 
programs.

[SEC. 2378. LOANS TO ECONOMICALLY DISADVANTAGED RURAL COMMUNITIES.

    [(a) In General.--The Secretary, under such terms and 
conditions as the Secretary shall establish, may make loans to 
economically disadvantaged rural communities for the purposes 
of securing technical assistance and services to aid in the 
development and implementation of action plans, including 
planning for--
          [(1) improving existing facilities in the community 
        that may generate employment or revenue;
          [(2) expanding existing infrastructure, facilities, 
        and services to capitalize on opportunities to 
        diversify economies now dependent on national forest 
        resources; and
          [(3) supporting the development of new industries or 
        commercial ventures unrelated to national forest 
        resources.
    [(b) Interest Rates.--The interest rates on a loan made 
pursuant to this section shall be as determined by the 
Secretary, but not in excess of the current average market 
yield on outstanding marketable obligations of the United 
States with remaining periods to maturity comparable to the 
maturity of such loan, plus not to exceed 1 percent, as 
determined by the Secretary, and rounded to the nearest one-
eighth of 1 percent.

[SEC. 2379. AUTHORIZATION OF APPROPRIATIONS AND SPENDING AUTHORITY.

    [(a) Authorization of Appropriations.--Except as provided 
in subsection (b), there are authorized to be appropriated--
          [(1) an amount not to exceed 5 percent of the sum 
        of--
                  [(A) the sums received by the Secretary from 
                sales of timber and other products of the 
                forests; and
                  [(B) user fees paid in connection with the 
                use of forest lands; and
          [(2) such additional sums as may be necessary to 
        carry out the purposes of this chapter.
    [(b) Limitation on Authorization.--Subsection (a) shall not 
in any way affect payments to the States pursuant to chapter 
192 of the Act of May 23, 1908 (16 U.S.C. 500).
    [(c) Spending Authority.--Any spending authority (as 
defined in section 401 of the Congressional Budget Act of 1974) 
provided in this chapter shall be effective for any fiscal year 
only to such extent or in such amounts as are provided in 
appropriation Acts.]

                  Subtitle H--Miscellaneous Provisions

[SEC. 2381. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE.

    [(a) Establishment.--The Secretary shall establish, within 
the National Agricultural Library, in coordination with the 
Extension Service, a National Rural Information Center 
Clearinghouse (in this section referred to as the 
``Clearinghouse'') to perform the functions specified in 
subsection (b).
    [(b) Functions.--The Clearinghouse shall provide and 
distribute information and data to any industry, organization, 
or Federal, State, or local government entity, on request, 
about programs and services provided by Federal, State, and 
local agencies and private nonprofit organizations and 
institutions under which individuals residing in, or 
organizations and State and local government entities operating 
in, a rural area may be eligible for any kind of assistance, 
including job training, education, health care, and economic 
development assistance, and emotional and financial counseling. 
To the extent possible, the National Agricultural Library shall 
use telecommunications technology to disseminate information to 
rural areas.
    [(c) Federal Agencies.--On request of the Secretary, the 
head of a Federal agency shall provide to the Clearinghouse 
such information as the Secretary may request to enable the 
Clearinghouse to carry out subsection (b).
    [(d) State and Local Agencies and Nonprofit 
Organizations.--The Secretary shall request State and local 
governments and private nonprofit organizations and 
institutions to provide to the Clearinghouse such information 
as such agencies and organizations may have about any program 
or service of such agencies, organizations, and institutions 
under which individuals residing in arural area may be eligible 
for any kind of assistance, including job training, educational, health 
care, and economic development assistance, and emotional and financial 
counseling.
    [(e) Limitation on Authorization of Appropriations.--To 
carry out this section, there are authorized to be appropriated 
$500,000 for each of the fiscal years 1991 through 1995.]

SEC. 2381. NATIONAL RURAL DEVELOPMENT INFORMATION CLEARINGHOUSE.

    (a) Establishment.--The Secretary shall establish and 
maintain, within the rural development mission area of the 
Department of Agriculture, a National Rural Development 
Information Clearinghouse (referred to in this section as the 
``Clearinghouse'') to perform the functions specified in 
subsection (b).
    (b) Functions.--The Clearinghouse shall collect information 
and data from, and disseminate information and data to, any 
person or public or private entity about programs and services 
provided by Federal, State, local, and tribal agencies, 
institutions of higher education, and private, for-profit and 
nonprofit organizations and institutions under which a person 
or public or private entity residing or operating in a rural 
area may be eligible for any kind of financial, technical, or 
other assistance, including business, venture capital, 
economic, credit and community development assistance, health 
care, job training, education, and emotional and financial 
counseling.
    (c) Modes of Collection and Dissemination of Information.--
In addition to other modes for the collection and dissemination 
of the types of information and data specified under subsection 
(b), the Secretary shall ensure that the Clearinghouse 
maintains an Internet website that provides for dissemination 
and collection, through voluntary submission or posting, of the 
information and data.
    (d) Federal Agencies.--On request of the Secretary and to 
the extent permitted by law, the head of a Federal agency shall 
provide to the Clearinghouse such information as the Secretary 
may request to enable the Clearinghouse to carry out this 
section.
    (e) State, Local, and Tribal Agencies, Institutions of 
Higher Education, and Nonprofit and For-Profit Organizations.--
The Secretary shall request State, local, and tribal agencies, 
institutions of higher education, and private, for-profit, and 
nonprofit organizations and institutions to provide to the 
Clearinghouse information concerning applicable programs or 
services described in subsection (b).
    (f) Promotion of Clearinghouse.--The Secretary prominently 
shall promote the existence and availability of the 
Clearinghouse in all activities of the Department of 
Agriculture relating to rural areas of the United States.
    (g) Funding.--
          (1) In general.--Subject to paragraph (2), the 
        Secretary shall use to operate and maintain the 
        Clearinghouse not more than $600,000 of the funds 
        available to the Rural Housing Service, the Rural 
        Utilities Service, and the Rural Business-Cooperative 
        Service for each fiscal year.
          (2) Limitation.--Funds available to the Rural Housing 
        Service, the Rural Utilities Service, and the Rural 
        Business-Cooperative Service for the payment of loan 
        costs (as defined in section 502 of Federal Credit 
        Reform Act of 1990 (2 U.S.C. 661a)) shall not be used 
        to operate and maintain the Clearinghouse.

SEC. 2382. MONITORING THE ECONOMIC PROGRESS OF RURAL AMERICA.

    (a) Bureau of the Census.--The Director of the Bureau of 
the Census shall expand the data collection efforts of the 
Bureau to enable the Bureau to collect statistically 
significant data concerning the changing economic condition of 
rural counties and communities in the United States, including 
data on rural employment, poverty, income, and other 
information concerning the rural labor force.

           *       *       *       *       *       *       *


                   RURAL ELECTRIFICATION ACT OF 1936

           *       *       *       *       *       *       *


          (2) Limitation on planning and administrative 
        expenses.--Not more than 4 percent of the amounts made 
        available under paragraph (1) may be used for planning 
        and administrative expenses.

SEC. 20. BIOENERGY AND BIOCHEMICAL PROJECTS.

    ``In carrying out rural electric loan, loan guarantee, and 
grant programs under this Act, the Secretary shall provide a 
priority for bioenergy and biochemical projects.

SEC. 20. FINANCIAL AND TECHNICAL ASSISTANCE FOR RENEWABLE ENERGY 
                    SYSTEMS.

    (a) Definition of Renewable Energy.--In this section, the 
term ``renewable energy'' means energy derived from a wind, 
solar, biomass, geothermal, or hydrogen source.
    (b) Loans, Loan Guarantees, and Grants.--The Secretary 
shall make loans, loan guarantees, and grants to rural electric 
cooperatives and other rural electric utilities to promote 
thedevelopment of economically and environmentally sustainable 
renewable energy projects to serve the needs of rural communities or 
for rural economic development.
    (c) Interest Rate.--A loan made or guaranteed under 
subsection (b) shall bear interest at a rate not exceeding 4 
percent.
    (d) Use of Funds.--
          (1) Grants.--A recipient of a grant under subsection 
        (a) may use the grant funds to pay up to 75 percent of 
        the cost of an economic feasibility study or technical 
        assistance for a renewable energy project.
          (2) Loans.--If a renewable energy project is 
        determined to be economically feasible, a recipient of 
        a loan or loan guarantee under subsection (a) may use 
        the loan funds to pay a percentage of the cost of the 
        project determined by the Secretary.
    (e) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this section, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $9,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.
          (3) Applicability of other laws.--For the purposes of 
        the Federal Credit Reform Act of 1990 (2 U.S.C. 661a et 
        seq.), this subsection shall be treated as if enacted 
        in an Act of appropriation.
          (4) Loan and interest subsidies.--In the case of a 
        loan or loan guarantee under subsection (a), the 
        Secretary shall use funds under paragraph (1) to pay 
        the cost of loan and interest subsidies necessary to 
        carry out this section.

           *       *       *       *       *       *       *

                  (D) Proceeds.--All proceeds from the 
                repayment of such loans shall be returned to 
                the subaccount.
                  (E) Number of grants.--Such loans and grants 
                shall be made during each fiscal year to the 
                full extent of the amounts held by the rural 
                economic development subaccount, subject only 
                to limitations as may be from time to time 
                imposed by law.

SEC. 313A. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR 
                    TELEPHONE PURPOSES.

    (a) In General.--Subject to subsection (b), the Secretary 
shall guarantee payments on bonds or notes issued by 
cooperative or other lenders organized on a not-for-profit 
basis if the proceeds of the bonds or notes are used for 
electrification or telephone projects eligible for assistance 
under this Act, including the refinancing of bonds or notes 
issued for such projects.
    (b) Limitations.--
          (1) Outstanding loans.--A lender shall not receive a 
        guarantee under this section for a bond or note if, at 
        the time of the guarantee, the total principal amount 
        of such guaranteed bonds or notes outstanding of the 
        lender would exceed the principal amount of outstanding 
        loans of the lender for electrification or telephone 
        purposes that have been made concurrently with loans 
        approved for such purposes under this Act.
          (2) Generation of electricity.--The Secretary shall 
        not guarantee payment on a bond or note issued by a 
        lender, the proceeds of which are used for the 
        generation of electricity.
          (3) Qualifications.--The Secretary may deny the 
        request of a lender for the guarantee of a bond or note 
        under this section if the Secretary determines that--
                  (A) the lender does not have appropriate 
                expertise or experience or is otherwise not 
                qualified to make loans for electrification or 
                telephone purposes;
                  (B) the bond or note issued by the lender is 
                not of reasonable and sufficient quality; or
                  (C) the lender has not provided sufficient 
                evidence that the proceeds of the bond or note 
                are used for eligible projects described in 
                subsection (a).
          (4) Interest rate reduction.--
                  (A) In general.--Except as provided in 
                subparagraph (B), a lender may not use any 
                amount obtained from the reduction in funding 
                costs as a result of the guarantee of a bond or 
                note under this section to reduce the interest 
                rate on a new or outstanding loan.
                  (B) Concurrent loans.--A lender may use any 
                amount described in subparagraph (A) to reduce 
                the interest rate on a loan if the loan is--
                          (i) made by the lender for 
                        electrification or telephone projects 
                        that are eligible for assistance under 
                        this Act; and
                          (ii) made concurrently with a loan 
                        approved by the Secretary under this 
                        Act for such a project, as provided in 
                        section 307.
    (c) Fees.--
          (1) In general.--A lender that receives a guarantee 
        issued under this section on a bond or note shall pay a 
        fee to the Secretary.
          (2) Amount.--The amount of an annual fee paid for the 
        guarantee of a bond or note under this section shall be 
        equal to 30 basis points of the amount of the unpaid 
        principal of the bond or note guaranteed under this 
        section.
          (3) Payment.--A lender shall pay the fees required 
        under this subsection on a semiannual basis.
          (4) Rural economic development subaccount.--Subject 
        to subsection (e)(2), fees collected under this 
        subsection shall be--
                  (A) deposited into the rural economic 
                development subaccount maintained under section 
                313(b)(2)(A), to remain available until 
                expended; and
                  (B) used for the purposes described in 
                section 313(b)(2)(B).
    (d) Guarantees.--
          (1) In general.--A guarantee issued under this 
        section shall--
                  (A) be for the full amount of a bond or note, 
                including the amount of principal, interest, 
                and call premiums;
                  (B) be fully assignable and transferable; and
                  (C) represent the full faith and credit of 
                the United States.
          (2) Limitation.--To ensure that the Secretary has the 
        resources necessary to properly examine the proposed 
        guarantees, the Secretary may limit the number of 
        guarantees issued under this section if the number of 
        such guarantees exceeds 5 per year.
          (3) Department opinion.--On the timely request of an 
        eligible lender, the General Counsel of the Department 
        of Agriculture shall provide the Secretary with an 
        opinion regarding the validity and authority of a 
        guarantee issued to the lender under this section.
    (e) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated such sums as are necessary to carry out 
        this section.
          (2) Fees.--To the extent that the amount of funds 
        appropriated for a fiscal year under paragraph (1) are 
        not sufficient to carry out this section, the Secretary 
        may use up to \1/3\ of the fees collected under 
        subsection (c) for the cost of providing guarantees of 
        bonds and notes under this section before depositing 
        the remainder of the fees into the rural economic 
        development subaccount maintained under section 
        313(b)(2)(A).
    (f) Termination.--The authority provided under this section 
shall terminate on September 30, 2006.

SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.

           *       *       *       *       *       *       *


    (c) Funding Levels.--The Secretary shall make insured loans 
under this title for the purposes, in the amounts, and for the 
periods of time specified in subsection (b), as provided in 
advance in appropriations Acts.
    (d) Availability of Funds for Insured Loans.--Amounts made 
available for loans under section 305 are authorized to remain 
available until expended.

SEC. 315. EXPANSION OF 911 ACCESS.

    (a) In General.--Subject to such terms and conditions as 
the Secretary may prescribe, the Secretary may make telephone 
loans under this title to State or local governments, Indian 
tribes (as defined in section 4 of the Indian Self-
Determination and Education Assistance Act (25 U.S.C. 450b)), 
or other public entities for facilities and equipment to expand 
911 access in underserved rural areas.
    (b) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section.

                                TITLE IV

    Sec. 401. Establishment, General Purposes, and Status of 
the Telephone Bank.--(a) There is hereby established a body 
corporate to be known as the Rural Telephone Bank (hereinafter 
called the telephone bank).

           *       *       *       *       *       *       *

          (5) provide information to electric and telephone 
        borrowers under this Act concerning the eligibility of 
        such borrowers to apply for financial assistance, 
        loans, or grants from other Federal agencies and non-
        Federal sources to enable such borrowers to expand 
        their rural development efforts; and
          (6) promote local partnerships and other coordination 
        between borrowers under this Act and community 
        organizations, States, counties, or other entities, to 
        improve rural development.

                    TITLE VI--RURAL BROADBAND ACCESS

SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL 
                    AREAS.

    (a) Purpose.--The purpose of this section is to provide 
grants, loans, and loan guarantees to provide funds for the 
costs of the construction, improvement, and acquisition of 
facilities and equipment for broadband service in eligible 
rural communities.
    (b) Definitions.--In this section:
          (1) Broadband service.--The term ``broadband 
        service'' means any technology identified by the 
        Secretary as having the capacity to transmit data to 
        enable a subscriber to the service to originate and 
        receive high-quality voice, data, graphics, or video.
          (2) Eligible rural community.--The term ``eligible 
        rural community'' means any incorporated or 
        unincorporated place that--
                  (A) has not more than 20,000 inhabitants, 
                based on the most recent available population 
                statistics of the Bureau of the Census; and
                  (B) is not located in an area designated as a 
                standard metropolitan statistical area.
    (c) Grants.--The Secretary shall make grants to eligible 
entities described in subsection (e)(1) to provide funds for 
the construction, improvement, or acquisition of facilities and 
equipment for the provision of broadband service in eligible 
rural communities.
    (d) Loans and Loan Guarantees.--The Secretary shall make or 
guarantee loans to eligible entities described in subsection 
(e)(2) to provide funds for the construction, improvement, or 
acquisition of facilities and equipment for the provision of 
broadband service in eligible rural communities.
    (e) Eligible Entities.--To be eligible to obtain a grant 
under this section, an entity must--
          (1) be eligible to obtain a loan or loan guarantee to 
        furnish, improve, or extend a rural telecommunications 
        service under this Act; and
          (2) submit to the Secretary a proposal for a project 
        that meets the requirements of this section.
    (f) Broadband Service.--The Secretary shall, from time to 
time as advances in technology warrant, review and recommend 
modifications of rate-of-data transmission criteria for 
purposes of the identification of broadband service 
technologies under subsection (b)(1).
    (g) Technological Neutrality.--For purposes of determining 
whether or not to make a grant, loan, or loan guarantee for a 
project under this section, the Secretary shall not take into 
consideration the type of technology proposed to be used under 
the project.
    (h) Terms and Conditions for Loans and Loan Guarantees.--A 
loan or loan guarantee under subsection (d) shall--
          (1) be made available in accordance with the 
        requirements of the Federal Credit Reform Act of 1990 
        (2 U.S.C. 661 et seq.);
          (2) bear interest at an annual rate of, as determined 
        by the Secretary--
                  (A) 4 percent per annum; or
                  (B) the current applicable market rate; and
          (3) have a term not to exceed the useful life of the 
        assets constructed, improved, or acquired with the 
        proceeds of the loan or extension of credit.
    (i) Use of Loan Proceeds To Refinance Loans for Deployment 
of BroadbandService.--Notwithstanding any other provision of 
this Act, the proceeds of any loan made by the Secretary under this Act 
may be used by the recipient of the loan for the purpose of refinancing 
an outstanding obligation of the recipient on another 
telecommunications loan made under this Act if the use of the proceeds 
for that purpose will further the construction, improvement, or 
acquisition of facilities and equipment for the provision of broadband 
service in eligible rural communities.
    (j) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this Act, and on October 1, 2002, 
        and each October 1 thereafter through October 1, 2005, 
        out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture to carry out 
        this section $100,000,000, to remain available until 
        expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.
          (3) Allocation of funds.--
                  (A) In general.--From amounts made available 
                for each fiscal year under paragraph (1), the 
                Secretary shall--
                          (i) establish a national reserves for 
                        grants, loans, and loan guarantees to 
                        eligible entities in States under this 
                        section; and
                          (ii) allocate amounts in the reserve 
                        to each State for each fiscal year for 
                        grants, loans, and loan guarantees in 
                        the State.
                  (B) Amount.--The amount of an allocation made 
                to a State for a fiscal year under subparagraph 
                (A) shall bear the same ratio to the amount of 
                allocations made for all States for the fiscal 
                year as the number of communities with a 
                population of 2,500 inhabitants or less in the 
                State bears to the number of communities with a 
                population of 2,500 inhabitants or less in all 
                States, as determined on the basis of the last 
                available cenus.
                          (i) In general.--Subject to 
                        subparagraph (C), the Secretary shall 
                        establish a reserve for each State for 
                        each fiscal year under paragraph (1) 
                        for making grants, loans, and loan 
                        guarantees of credit to eligible 
                        entities in the State.
                  (C) Unobligated amounts.--Any amounts in the 
                reserve established for a State for a fiscal 
                year under subparagraph (B) that are not 
                obligated by April 1 of the fiscal year shall 
                be available to the Secretary to make grants, 
                loans, and loan guarantees under this section 
                to eligible entities in any State, as 
                determined by the Secretary.
    (k) Termination of Authority.--
          (1) In general.--No grant, loan, or loan guarantee 
        may be made under this section after September 30, 
        2006.
          (2) Effect on validity of grant, loan, or loan 
        guarantee.--Notwithstanding paragraph (1), any grant, 
        loan, or loan guarantee made under this section before 
        the date specified in paragraph (1) shall be valid.

           *       *       *       *       *       *       *


               AGRICULTURAL RISK PROTECTION ACT OF 2000

           *       *       *       *       *       *       *


SEC. 231. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

    [(a) Grant Program.--
          [(1) Establishment and purposes.--Of the amount made 
        available under section 261(a)(2), $15,000,000 shall be 
        used by the Secretary to award competitive grants to 
        eligible independent producers (as determined by the 
        Secretary) of value-added agricultural commodities and 
        products of agricultural commodities to assist an 
        eligible producer--
                  [(A) to develop a business plan for viable 
                marketing opportunities for a value-added 
                agricultural commodity or product of an 
                agricultural commodity; or
                  [(B) to develop strategies for the ventures 
                that are intended to create marketing 
                opportunities for the producers.
          [(2) Amount of grant.--The total amount provided 
        under this subsection to a grant recipient may not 
        exceed $500,000.
          [(3) Producer strategies.--A producer that receives a 
        grant under paragraph (1) shall use the grant--
                  [(A) to develop a business plan or perform a 
                feasibility study to establish a viable 
                marketing opportunity for a value-added 
                agricultural commodity or product of an 
                agricultural commodity; or
                  [(B) to provide capital to establish 
                alliances or business ventures that allow the 
                producer to better compete in domestic or 
                international markets.]
    (a) Definition of Value-Added Agricultural Product.--The 
term ``value-added agricultural product'' means any 
agricultural commodity or product that--
          (1)(A) has undergone a change in physical state; or
          (B) was produced in a manner that enhances the value 
        of the agricultural commodity or product, as 
        demonstrated through a business plan that shows the 
        enhanced value, as determined by the Secretary; and
          (2) as a result of the change in physical state or 
        the manner in which the agricultural commodity or 
        product was produced--
                  (A) the customer base for the agricultural 
                commodity or product has been expanded; and
                  (B) a greater portion of the revenue derived 
                from the processing of the agricultural 
                commodity or product is available to the 
                producer of the commodity or product.
    (b) Grant Program.--
          (1) Purposes.--The purposes of this subsection are--
                  (A) to increase the share of the food and 
                agricultural system profit received by 
                agricultural producers;
                  (B) to increase the number and quality of 
                rural self-employment opportunities in 
                agriculture and agriculturally-related 
                businesses and the number and quality of jobs 
                in agriculturally-related businesses;
                  (C) to help maintain a diversity of size in 
                farms and ranches by stabilizing the number of 
                small and mid-sized farms;
                  (D) to increase the diversity of food and 
                other agricultural products available to 
                consumers, including nontraditional crops and 
                products and products grown or raised in a 
                manner that enhances the value of the products 
                to the public;
                  (E) to conserve and enhance the quality of 
                land, water, and energy resources, wildlife 
                habitat, and other landscape values and 
                amenities in rural areas.
          (2) Grants.--From amounts made available under 
        paragraph (6), the Secretary shall make award 
        competitive grants--
                  (A) to an eligible independent producer (as 
                determined by the Secretary) of a value-added 
                agricultural product to assist the producer--
                          (i) to develop a business plan for 
                        viable marketing opportunities for the 
                        value-added agricultural product; or
                          (ii) to develop strategies that are 
                        intended to create marketing 
                        opportunities for the producer; and
                  (B) to an eligible nonprofit entity (as 
                determined by the Secretary) to assist the 
                entity--
                          (i) to develop a business plan for 
                        viable marketing opportunities in 
                        emerging markets for a value-added 
                        agricultural product; or
                          (ii) to develop strategies that are 
                        intended to create marketing 
                        opportunities in emerging markets for 
                        the value-added agricultural product.
          (3) Amount of grant.--
                  (A) In general.--The total amount provided 
                under this subsection to a grant recipient may 
                not exceed $500,000.
                  (B) Priority.--The Secretary shall give 
                priority to grant proposals for less than 
                $200,000 submitted under this subsection.
          (4) Grantee strategies.--A grantee under paragraph 
        (2) shall use the grant--
                  (A) to develop a business plan or perform a 
                feasibility study to establish a viable 
                marketing opportunity for a value-added 
                agricultural product; or
                  (B) to provide capital to establish alliances 
                or business ventures that allow the producer of 
                the value-added agricultural product to better 
                compete in domestic or international markets.
          (5) Grants for marketing or processing certified 
        organic agricultural products.--
                  (A) In general.--Out of any amount that is 
                made available to the Secretary for a fiscal 
                year under paragraph (2), the Secretary shall 
                use not less than 5 percent of the amount for 
                grants to assist producers of certified organic 
                agricultural products in post-farm marketing or 
                processing of the products through a business or 
                cooperative ventures that--
                          (i) expand the customer base of the 
                        certified organic agricultural 
                        products; and
                          (ii) increase the portion of product 
                        revenue available to the producers.
                  (B) Certified organic agricultural product.--
                For the purposes of this paragraph, a certified 
                organic agricultural product does not have to 
                meet the requirements of the definition of 
                ``value-added agricultural product'' under 
                subsection (a).
                  (C) Insufficient applications.--If, for any 
                fiscal year, the Secretary receives an 
                insufficient quantity of applications for 
                grants described in subparagraph (A) to use the 
                funds reserved under subparagraph (A), the 
                Secretary may use the excess reserved funds to 
                make grants for any other purpose authorized 
                under this subsection.
          (6) Funding.--
                  (A) In general.-- Not later than 30 days 
                after the date of enactment of this paragraph, 
                and on October 1, 2002, and each October 1 
                thereafter through October 1, 2005, out of any 
                funds in the Treasury not otherwise 
                appropriated, the Secretary of the Treasury 
                shall transfer to the Secretary of Agriculture 
                to carry out their subsection $75,000,000, 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 subsection the 
                funds transferred under subparagraph (A), 
                without further appropriation.
    [(b)] (c) Agricultural Marketing Resource Center Pilot 
Project.--
          (1) Establishment.--Notwithstanding the limitation on 
        grants in subsection [(a)(2)] (b)(2), the Secretary 
        shall not use more than [$5,000,000] 7.5 percent of the 
        funds made available under [subsection (a)] subsection 
        (b) to establish a pilot project (to be known as the 
        ``Agricultural Marketing Resource Center'') at an 
        eligible institution described in paragraph (2) that 
        will--
                  (A) develop a resource center with electronic 
                capabilities to coordinate and provide to 
                independent producers and processors (as 
                determined by the Secretary) of value-added 
                agricultural commodities and products of 
                agricultural commodities information regarding 
                research, business, legal, financial, or 
                logistical assistance; and
                  (B) develop a strategy to establish a 
                nationwide market information and coordination 
                system.
          (2) Eligible institution.--To be eligible to receive 
        funding to establish the Agricultural Marketing 
        Resource Center, an applicant shall demonstrate to the 
        Secretary--
                  (A) the capacity and technical expertise to 
                provide the services described in paragraph 
                (1)(A);
                  (B) an established plan outlining support of 
                the applicant in the agricultural community; 
                and
                  (C) the availability of resources (in cash or 
                in kind) of definite value to sustain the 
                Center following establishment.
    [(c)] (d) Matching Funds.--A recipient of funds under 
[subsection (a) or (b)] subsections (b) and (c) shall 
contribute an amount of non-Federal funds that is at least 
equal to the amount of Federal funds received.
    [(d)] (e) Limitation.--Funds provided under this section 
may not be used for--
          (1) planning, repair, rehabilitation, acquisition, or 
        construction of a building or facility (including a 
        processing facility); or
          (2) the purchase, rental, or installation of fixed 
        equipment.

           *       *       *       *       *       *       *


  AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT OF 1998

           *       *       *       *       *       *       *


     TITLE IV--NEW AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION 
                              INITIATIVES

SEC. 401. INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS.

    (a) Treasury Account.--There is established in the Treasury 
of the United States an account to be known as the Initiative 
for Future Agriculture and Food Systems (referred to in this 
section as the ``Account'') to provide funds for activities 
authorized under this section.
    (b) Funding.--
          (1) In general.--On October 1, 1998, and each October 
        1 thereafter through October 1, 2002, out of any funds 
        in the Treasury not otherwise appropriated, the 
        Secretary of the Treasury shall transfer $120,000,000 
        to the Account.
          (2) Entitlement.--The Secretary of Agriculture--
                  (A) shall be entitled to receive the funds 
                transferred to the Account under paragraph (1);
                  (B) shall accept the funds; and
                (C) shall use the funds to carry out this 
                section.
                  (c) Purposes.--
          [(1) Critical emerging issues.--The Secretary shall 
        use the funds in the Account--]
          (1) Critical emerging issues.--Subject to paragraph 
        (2), the Secretary shall use the funds in the Account 
        for research, extension, and education grants (referred 
        to in this section as ``grants'') to address critical 
        emerging agricultural issues related to--
                  (A) future food production;
                  (B) environmental quality and natural 
                resource management; or
                  (C) farm income.
                  (A) subject to paragraph (2), for research, 
                extension, and education grants (referred to in 
                this section as ``grants'') to address critical 
                emerging agricultural issues related to--
                          (i) future food production;
                          (ii) environmental quality and 
                        natural resource management; or
                          (iii) farm income; and

           *       *       *       *       *       *       *


   AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT OF 1998

           *       *       *       *       *       *       *


SEC. 409. CARBON SEQUESTRATION DEMONSTRATION PROGRAM.

    (a) Definitions.--In this section:
          (1) Eligible project.--The term ``eligible project'' 
        means a project that is likely to result in--
                  (A) demonstrable reductions in net emissions 
                of greenhouse gases; or
                  (B) demonstrable net increases in the 
                quantity of carbon sequestered in soils and 
                forests.
          (2) Environmental trade.--The term ``environmental 
        trade'' means a transaction between an emitter of a 
        greenhouse gas and an agricultural producer under which 
        the emitter pays to the agricultural producer a fee to 
        sequester carbon or otherwise reduce emissions of 
        greenhouse gases.
          (3) Panel.--The term ``panel'' means the panel of 
        experts established under subsection (b)(4)(A).
          (4) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture, acting in consultation with--
                  (A) the Under Secretary of Agriculture for 
                Natural Resources and Environment;
                  (B) the Under Secretary of Agriculture for 
                Research, Education, and Economics;
                  (C) the Chief Economist of the Department; 
                and
                  (D) the panel.
    (b) Demonstration Program.--
          (1) Establishment.--Subject to the availability of 
        appropriations, the Secretary shall establish a program 
        to provide grants, on a competitive, cost-shared basis, 
        to agricultural producers to assist in paying the costs 
        incurred in measuring, estimating, monitoring, 
        verifying, auditing, and testing methodologies involved 
        in environmental trades (including costs incurred in 
        employing certified independent third persons to carry 
        out those activities).
          (2) Conditions for receipt of grant.--As a condition 
        of the acceptance of a grant under paragraph (1), an 
        agricultural producer shall--
                  (A) establish a carbon and greenhouse gas 
                monitoring, verification, and reporting system 
                that meets such requirements as the Secretary 
                shall prescribe; and
                  (B) under the system and through the use of 
                an independent third party for any necessary 
                monitoring, verifying, reporting, and auditing, 
                measure and report to the Secretary the 
                quantity of carbon sequestered, or the quantity 
                of greenhouse gas emissions reduced, as a 
                result of the conduct of an eligible project.
          (3) Criteria for award of grant.--
                  (A) In general.--In awarding a grant for an 
                eligible project under paragraph (1), the 
                Secretary shall take into consideration--
                          (i) the likelihood of the eligible 
                        project in succeeding in achieving 
                        greenhouse gas emissions reductions and 
                        net carbon sequestration increases; and
                          (ii) the usefulness of the 
                        information to be obtained from the 
                        eligible project in determining how 
                        best to quantify, monitor, and verify 
                        sequestered carbon or reductions in 
                        greenhouse gas emissions.
                  (B) Priority criteria.--The Secretary shall 
                give priority in awarding a grant under 
                paragraph (1) to an eligible project that--
                          (i) involves multiple parties, a 
                        whole farm approach, or any other 
                        approach, such as the aggregation of 
                        land areas, that would--
                                  (I) increase the 
                                environmental benefits or 
                                reduce the transaction costs of 
                                the eligible project; and
                                  (II) reduce the costs of 
                                measuring, monitoring, and 
                                verifying any net sequestration 
                                of carbon or net reduction in 
                                greenhouse gas emissions;
                          (ii) is designed to achieve long-term 
                        sequestration of carbon or long-term 
                        reductions in greenhouse gas emissions;
                          (iii) is designed to address concerns 
                        concerning leakage;
                          (iv) provides certain other benefits, 
                        such as improvements in--
                                  (I) soil fertility;
                                  (II) wildlife habitat;
                                  (III) water quality;
                                  (IV) soil erosion management;
                                  (V) the use of renewable 
                                resources to produce energy;
                                  (VI) the avoidance of 
                                ecosytem fragmentation; and
                                  (VII) the promotion of 
                                ecosystem restoration with 
                                native species; or
                          (v) does not involve--
                                  (I) the reforestation of land 
                                that has been deforested since 
                                1990; or
                                  (II) the conversion of native 
                                grassland.
          (4) Panel.--
                  (A) In general.--The Secretary shall 
                establish a panel to provide advice and 
                recommendations to the Secretary with respect 
                to criteria for awarding grants under this 
                subsection.
                  (B) Composition.--The panel shall be composed 
                of the following representatives, to be 
                appointed by the Secretary:
                          (i) Experts from each of--
                                  (I) the Department;
                                  (II) the Environmental 
                                Protection Agency; and
                                  (III) the Department of 
                                Energy.
                          (ii) Experts from nongovernmental and 
                        academic entities.
          (5) Payment of grant funds.--The Secretary shall 
        provide a grant awarded under this section in such 
        number of installments as is necessary to ensure proper 
        implementation of an eligible project.
    (c) Methodology Grant Program.--
          (1) Establishment.--The Secretary shall establish a 
        program to provide grants to determine the best 
        methodologies for estimating and measuring increases or 
        decreases in--
                  (A) agricultural greenhouse gas emissions; 
                and
                  (B) the quantity of carbon sequestered in 
                soils, forests, and trees.
          (2) Eligible recipients.--The Secretary shall award a 
        grant under paragraph (1), on a competitive basis, to a 
        college or university, or other research institution, 
        that seeks to demonstrate the viability of a 
        methodology described in paragraph (1).
    (d) Dissemination of Information.--As soon as practicable 
after the date of enactment of this section, the Secretary 
shall establish an Internet site through which agricultural 
producers may obtain information concerning--
          (1) potential environmental trades; and
          (2) activities of the Secretary under this section.
    (e) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $20,000,000 for 
each of fiscal years 2002 through 2006.

                   TITLE VI--MISCELLANEOUS PROVISIONS

                    Subtitle A--Existing Authorities

           *       *       *       *       *       *       *


                                TITLE 7

AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT OF 1998

           *       *       *       *       *       *       *


SEC. 102. PRIORITY SETTING PROCESS.

    (a) Establishment.--Consistent with section 1402 of the 
National Agricultural Research, Extension, and Teaching Policy 
Act of 1977 (7 U.S.C. 3101), the Secretary shall establish 
priorities for agricultural research, extension, and education 
activities conducted or funded by the Department.
    (b) Responsibilities of Secretary.--In establishing 
priorities for agricultural research, extension, and education 
activities conducted or funded by the Department, the Secretary 
shall solicit and consider input and recommendations from 
persons who conduct or use agricultural research, extension, or 
education.
    (c) Responsibilities of 1862, 1890, and 1994 
Institutions.--
          (1) Process.--Effective October 1, 1999, to obtain 
        agricultural research, extension, or education formula 
        funds from the Secretary, each 1862 Institution, 1890 
        Institution, and 1994 Institution shall [establish and 
        implement a process for obtaining] obtain public input 
        from persons who conduct or use agricultural research, 
        extension, or education concerning the use of the 
        funds[.] through a process that reflects transparency 
        and opportunity for input from diverse agricultural 
        crop, geographic, and cultural communities.
          (2) Regulations.--The Secretary shall promulgate 
        regulations that prescribe--

           *       *       *       *       *       *       *


SEC. 401. INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS.

    Sec. 724. None of the funds appropriated or otherwise made 
available by this or any other Act shall be used to pay the 
salaries and expenses of personnel to carry out the transfer or 
obligation of fiscal year 2001 funds under the provisions of 
section 401 of Public Law 105-185, the Initiative for Future 
Agriculture and Food Systems (7 U.S.C. 7621): Provided, That 
notwithstanding section 401(d) of Public Law 105-185, any 
appropriation or funds available to the Secretary of 
Agriculture to make grants under section 401 of Public Law 105-
185 shall be used only to make grants to eligible grantees 
specified in subsection (d)(3) of that section.
    (a) Treasury Account.--There is established in the Treasury 
of the United States an account to be known as the Initiative 
for Future Agriculture and Food Systems (referred to in this 
section as the ``Account'') to provide funds for activities 
authorized under this section.
    [(b) Funding.--
          [(1) In general.--On October 1, 1998, and each 
        October 1 thereafter through October 1, 2002, out of 
        any funds in the Treasury not otherwise appropriated, 
        the Secretary of the Treasury shall transfer 
        $120,000,000 to the Account.
          [(2) Entitlement.--The Secretary of Agriculture--
                  [(A) shall be entitled to receive the funds 
                transferred to the Account under paragraph (1);
                  [(B) shall accept the funds; and
                  [(C) shall use the funds to carry out this 
                section.]
    (b) Funding.--
          (1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury 
        shall transfer to the Account to carry out this 
        section--
                  (A) on October 1, 1998 and each October 1 
                thereafter through October 1, 2001, 
                $120,000,000; and
                  (B) on October 1, 2002, and each October 1 
                thereafter through October 1, 2005, 
                $145,000,000.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.
    (c) Purposes.--
          (1) Critical emerging issues.--The Secretary shall 
        use the funds in the Account--

           *       *       *       *       *       *       *

    (e) Special Considerations.--
          (1) Smaller institutions.--The Secretary may award 
        grants under this section in a mannerthat ensures that 
the faculty of small and mid-sized institutions that have not 
previously been successful in obtaining competitive grants under 
subsection (b) of the Competitive, Special, and Facilities Research 
Grant Act (7 U.S.C. 450i(b)) receive a portion of the grants under this 
section.
          (2) Priorities.--In making grants under this section, 
        the Secretary shall provide a higher priority to--
                  (A) a project that is multistate, multi-
                institutional, or multidisciplinary; or
                  (B) a project that integrates agricultural 
                research, extension, and education.
          (3) Minority-serving institutions.--The Secretary 
        shall consider reserving, to the maximum extent 
        practicable, 10 percent of the funds made available to 
        carry out this section for a fiscal year for grants to 
        minority-serving institutions.
    (f) Administration.--

           *       *       *       *       *       *       *

    (f) Limitation on Use of Grant Funds.--Funds provided under 
this section may not be used for the planning, repair, 
rehabilitation, acquisition, or construction of a building or 
facility.
    (g) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1999 through [2002] 2006.

SEC. 403. PRECISION AGRICULTURE.

    (a) Definitions.--In this section:

           *       *       *       *       *       *       *

    (h) Limitation Regarding Facilities.--A grant made under 
this section may not be used for the planning, repair, 
rehabilitation, acquisition, or construction of a building or 
facility.
    (i) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated such sums as are necessary to carry out 
        this section for each of fiscal years 1999 through 
        [2002] 2006, of which, for each fiscal year--

           *       *       *       *       *       *       *


SEC. 404. BIOBASED PRODUCTS.

    (a) Definition of Biobased Product.--In this section, the 
term ``biobased product'' means a product suitable for food or 
nonfood use that is derived in whole or in part from renewable 
agricultural and forestry materials.

           *       *       *       *       *       *       *

    (e) Pilot Project.--The Secretary, acting through the 
Agricultural Research Service, may establish and carry out a 
pilot project under which grants are provided, on a competitive 
basis, to scientists of the Agricultural Research Service to--
          (1) encourage innovative and collaborative science; 
        and
          (2) during each of fiscal years 1999 through [2001] 
        2006, develop biobased products with promising 
        commercial potential.
    (f) Source of Funds.--

           *       *       *       *       *       *       *


SEC. 405. THOMAS JEFFERSON INITIATIVE FOR CROP DIVERSIFICATION.

    (a) Initiative Required.--The Secretary of Agriculture 
shall provide for a research initiative (to be known as the 
``Thomas Jefferson Initiative for Crop Diversification'') for 
the purpose of conducting research and development, in 
cooperation with other public and private entities, on the 
production and marketing of new and nontraditional crops needed 
to strengthen and diversify the agricultural production base of 
the United States.

           *       *       *       *       *       *       *

    (h) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1999 through [2002] 2006.

SEC. 406. INTEGRATED RESEARCH, EDUCATION, AND EXTENSION COMPETITIVE 
                    GRANTS PROGRAM.

    (a) Purpose.--It is the purpose of this section to 
authorize the Secretary of Agriculture to establish an 
integrated research, education, and extension competitive grant 
program to provide funding for integrated, multifunctional 
agricultural research, extension, and education activities.
    (b) Competitive Grants Authorized.--Subject to the 
availability of appropriations to carry out this section, the 
Secretary may award grants to colleges and universities (as 
defined in section 1404 of the National Agricultural Research, 
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)) and 
1994 Institutions on a competitive basis for integrated 
agricultural research, education, and extension projects in 
accordance with this section.
    (c) Criteria for Grants.--Grants under this section shall 
be awarded to address priorities in United States agriculture, 
determined by the Secretary in consultation with the Advisory 
Board, that involve integrated research, extension, and 
education activities.
    (d) Matching of Funds.--
          (1) General requirement.--If a grant under this 
        section provides a particular benefit to a specific 
        agricultural commodity, the Secretary shall require the 
        recipient of the grant to provide funds or in-kind 
        support to match the amount of funds provided by the 
        Secretary in the grant.
          (2) Waiver.--The Secretary may waive the matching 
        funds requirement specified in paragraph (1) with 
        respect to a grant if the Secretary determines that--
                  (A) the results of the project, while of 
                particular benefit to a specific agricultural 
                commodity, are likely to be applicable to 
                agricultural commodities generally; or
                  (B) the project involves a minor commodity, 
                the project deals with scientifically important 
                research, and the grant recipient is unable to 
                satisfy the matching funds requirement.
    (e) Term of Grant.--A grant under this section shall have a 
term of not more than 5 years.
    [(e)] (f) Authorization of Appropriations.--There are 
authorized to be appropriated such sums as are necessary to 
carry out this section for each of fiscal years 1999 through 
[2002] 2006.

           *       *       *       *       *       *       *


SEC. 408. SUPPORT FOR RESEARCH REGARDING DISEASES OF WHEAT AND BARLEY 
                    CAUSED BY FUSARIUM GRAMINEARUM.

    (a) Research Grant Authorized.--The Secretary of 
Agriculture may make a grant to a consortium of land-grant 
colleges and universities to enhance the ability of the 
consortium to carry out a multi-State research project aimed at 
understanding and combating diseases of wheat and barley caused 
by Fusarium graminearum and related fungi (referred to in this 
section as ``wheat scab'').

           *       *       *       *       *       *       *

    (d) Management.--To oversee the use of a grant made under 
this section, the Secretary may establish a committee composed 
of the directors of the agricultural experiment stations in the 
States in which land-grant colleges and universities that are 
members of the consortium are located.
    (e) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $5,200,000 for 
each of fiscal years 1999 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 614. OFFICE OF PEST MANAGEMENT POLICY.

    (a) Purpose.--The purpose of this section is to establish 
an Office of Pest Management Policy to provide for the 
effective coordination of agricultural policies and activities 
within the Department of Agriculture related to pesticides and 
of the development and use of pest management tools, while 
taking into account the effects of regulatory actions of other 
government agencies.

           *       *       *       *       *       *       *

    (e) Director.--The Office of Pest Management Policy shall 
be under the direction of a Director appointed by the 
Secretary, who shall report directly to the Secretary or a 
designee of the Secretary.
    (f) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1999 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 620. SENIOR SCIENTIFIC RESEARCH SERVICE.

    (a) In General.--There is established in the Department of 
Agriculture the Senior Scientific Research Service (referred to 
in this section as the ``Service'').
    (b) Members.--
          (1) In general.--Subject to paragraphs (2) through 
        (4), the Secretary shall appoint the members of the 
        Service.
          (2) Qualifications.--To be eligible for appointment 
        to the Service, an individual shall--
                  (A) have conducted outstanding research in 
                the field of agriculture or forestry;
                  (B) have earned a doctoral level degree at an 
                institution of higher education (as defined in 
                section 101 of the Higher Education Act of 1965 
                (20 U.S.C. 1001)); and
                  (C) meet qualification standards prescribed 
                by the Director of the Office of Personnel 
                Management for appointment to a position at 
                level GS-15 of the General Schedule.
          (3) Number.--Not more than 100 individuals may serve 
        as members of the Service at any 1 time.
          (4) Other requirements.--
                  (A) In general.--Subject to subparagraph (B) 
                and subsection (d)(2), the Secretary may 
                appoint and employ a member of the Service 
                without regard to--
                          (i) the provisions of title 5, United 
                        States Code, governing appointments in 
                        the competitive service;
                          (ii) the provisions of subchapter I 
                        of chapter 35 of title 5, United States 
                        Code, relating to retention preference;
                          (iii) the provisions of chapter 43 of 
                        title 5, United States Code, relating 
                        to performance appraisal and 
                        performance actions;
                          (iv) the provisions of chapter 51 and 
                        subchapter III of chapter 53 of title 
                        5, United States Code, relating to 
                        classification and General Schedule pay 
                        rates; and
                          (v) the provisions of chapter 75 of 
                        title 5, United States Code, relating 
                        to adverse actions.
                  (B) Exception.--A member of the Service 
                appointed and employed by the Secretary under 
                subparagraph (A) shall have the same right of 
                appeal to the Merit Systems Protection Board 
                and the same right to file a complaint with the 
                Office of Special Counsel as an employee 
                appointed to a position at level GS-15 of the 
                General Schedule.
    (c) Performance Appraisal System.--The Secretary shall 
develop a performance appraisal system for members of the 
Service that is designed to--
          (1) provide for the systematic appraisal of the 
        employment performance of the members; and
          (2) encourage excellence in employment performance by 
        the members.
    (d) Compensation.--
          (1) In general.--Subject to paragraph (2), the 
        Secretary shall determine the compensation of members 
        of the Service.
          (2) Limitations.--The rate of pay for a member of the 
        Service shall--
                  (A) not be less than the minimum rate payable 
                for a position at level GS-15 of the General 
                Schedule; and
                  (B) not be more than the rate payable for a 
                position at level I of the Executive Schedule, 
                unless the rate is approved by the President 
                under section 5377(d)(2) of title 5, United 
                States Code.
    (e) Retirement Contributions.--
          (1) In general.--On the request of a member of the 
        Service who was an employee of an institution of higher 
        education (as defined in section 101 of the Higher 
        Education Act of 1965 (20 U.S.C. 1001)) immediately 
        prior to appointment as a member of the Service and who 
        retains the right to continue to make contributions to 
        the retirement system of the institution, the Secretary 
        may contribute an amount not to exceed 10 percent of 
        the basic pay of the member to the retirement system of 
        the institution on behalf of the member.
          (2) Federal retirement system.--
                  (A) In general.--Subject to subparagraph (B), 
                a member for whom a contribution is made under 
                paragraph (1) shall not, as a result of serving 
                as a member of the Service, be covered by, or 
                earn service credit under, chapter 83 or 84 of 
                title 5, United States Code.
                  (B) Annual leave.--Service of a member of the 
                Service described in subparagraph (A) shall be 
                creditable for determining years of service 
                under section 6303(a) of title 5, United States 
                Code.
    (f) Involuntary Separation.--
          (1) In general.--Subject to paragraph (2) and 
        notwithstanding the provisions of title 5, United 
        States Code, governing appointment in the competitive 
        service, in the case of an individual who is separated 
        from the Service involuntarily and without cause--
                  (A) the Secretary may appoint the individual 
                to a position in the competitive civil service 
                at level GS-15 of the General Schedule; and
                  (B) the appointment shall be a career 
                appointment.
          (2) Excepted civil service.--In the case of an 
        individual described in paragraph (1) who immediately 
        prior to appointment as a member of the Service was not 
        a career appointee in the civil service or the Senior 
        Executive Service, the appointment of the individual 
        under paragraph (1)--
                  (A) shall be to the excepted civil service; 
                and
                  (B) may not exceed a period of 2 years.

                          Subtitle C--Studies

           *       *       *       *       *       *       *


         COMPETITIVE, SPECIAL AND FACILITIES RESEARCH GRANT ACT

           *       *       *       *       *       *       *


SEC. 2. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH GRANTS.

    (a) Establishment of Grant Program.--(1) In order to 
promote research in food, agriculture, and related areas, a 
research grants program is hereby established in the Department 
of Agriculture.
    (2) Short title.--This section may be cited as the 
``Competitive, Special, and Facilities Research Grant Act''.
    (b) Competitive Grants.--(1) The Secretary of Agriculture 
is authorized to make competitive grants, for periods not to 
exceed five years, to State agricultural experiment stations, 
all colleges and universities, other research institutions and 
organizations, Federal agencies, national laboratories, private 
organizations or corporations, and individuals, for research to 
further the programs of the Department of Agriculture. To the 
greatest extent possible the Secretary shall allocate these 
grants to high priority research taking into consideration, 
when available, the determinations made by the National 
Agricultural Research, Extension, Education, and Economics 
Advisory Board (as established under section 1408 of the 
National Agricultural Research, Extension, and Teaching Policy 
Act of 1977 (7 U.S.C. 3123)) identifying high priority research 
areas.
    (2) High priority research.--For purposes of this 
subsection, the term ``high priority research'' means basic and 
applied research that focuses on both national and multistate 
research needs (and methods to transfer such research to onfarm 
or inmarket practice) [in--
          [(A) plant systems, including plant genome structure 
        and function; molecular and cellular genetics and plant 
        biotechnology; plant-pest interactions and biocontrol 
        systems; crop plant response to environmental stresses; 
        unproved nutrient qualities of plant products; and new 
        food and industrial uses of plant products;
          [(B) animal systems, including aquaculture, cellular 
        and molecular basis of animal reproduction, growth, 
        disease, and health; identification of genes 
        responsible for improved production traits and 
        resistance to disease; improved nutritional performance 
        of animals; and improved nutrient qualities of animal 
        products, and uses, and the development of new and 
        improved animal husbandry and production systems that 
        take into account production efficiency and animal 
        well-being, and animal systems applicable to 
        aquaculture;
          [(C) nutrition, food quality, and health, including 
        microbial contaminants and pesticides residues related 
        to human health; links between diet and health; 
        bioavailability of nutrients; postharvest physiology 
        and practices; and improved processing technologies;
          [(D) natural resources and the environment, including 
        fundamental structures and functions of ecosystems; 
        biological and physical bases of sustainable production 
        systems; minimizing soil and water losses and 
        sustaining surface water and ground water quality; 
        global climate effects on agriculture; forestry; and 
        biological diversity;
          [(E) engineering, products, and processes, including 
        new uses and new products from traditional and non-
        traditional crops, animals, byproducts, and natural 
        resources; robotics, energy efficiency, computing, and 
        expert systems; new hazard and risk assessment and 
        mitigation measures; and water quality and management; 
        and
          [(F) markets, trade, and policy, including optional 
        strategies for entering and being competitive in 
        overseas markets; new decision tools for onfarm and 
        inmarket systems; choices and applications of 
        technology; technology assessment; and new approaches 
        to rural economic development.], as those needs are 
        determined by the Secretary, in consultation with the 
        National Agricultural Research, Extension, Education, 
        and Economics Advisory Board, not later than July 1 of 
        each fiscal year for the purposes of the following 
        fiscal year.
    (3) Types of grants.--In addition to making research grants 
under paragraph (1), the Secretary may conduct a program to 
improve research capabilities in the agricultural, food, and 
environmental sciences and award the following categories of 
competitive grants:
          (A) Grants may be awarded to a single investigator or 
        coinvestigators within the same discipline.
          (B) Grants may be awarded to teams of researchers 
        fromdifferent areas of agricultural research and 
scientific disciplines.

           *       *       *       *       *       *       *


                  CRITICAL AGRICULTURAL MATERIALS ACT

           *       *       *       *       *       *       *


    Sec. 16. (a) There are authorized to be appropriated to the 
Secretary of Agriculture such sums as are necessary to carry 
out this Act in each of the fiscal years 1991 through [2002] 
2006.
    (b) No more than 3 per centum of funds authorized under 
subsection (a) shall be available for administration and 
management of the program.

           *       *       *       *       *       *       *


TITLE XVI (RESEARCH) OF THE FOOD, AGRICULTURE, CONSERVATION, AND TRADE 
                             ACT OF 1990

           *       *       *       *       *       *       *


SEC. 1668. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH.

    (a) Purpose.--It is the purpose of this section to--
          (1) authorize and support environmental assessment 
        research to the extent necessary to help address 
        general concerns about environmental effects of 
        biotechnology; and
          (2) authorize research to help regulators develop 
        policies, as soon as practicable, concerning the 
        introduction into the environment of such technology.
    (b) Grant Program.--The Secretary of Agriculture shall 
establish a grant program within the Cooperative State Research 
Service and the Agricultural Research Service to provide the 
necessary funding for environmental assessment research 
concerning the introduction of genetically engineered organisms 
into the environment.
    (c) Types of Research.--Types of research for which grants 
may be made under this section shall include the following:
          (1) Research designed to develop methods to 
        physically and biologically contain genetically 
        engineered animals, plants, and microorganisms once 
        they are introduced into the environment.
          (2) Research designed to develop methods to monitor 
        the dispersal of genetically engineered animals, 
        plants, and microorganisms.
          (3) Research designed to further existing knowledge 
        with respect to the rates and methods of gene transfer 
        that may occur between genetically engineered organisms 
        and related wild and agricultural organisms.
          (4) Other areas of research designed to further the 
        purposes of this section.
    (d) Eligibility Requirements.--Grants under this section 
shall be--
          (1) made on the basis of the quality of the proposed 
        research project; and
          (2) available to any public or private research or 
        educational institution or organization.
    (e) Grant Priority.--In selecting projects for which grants 
shall be made under this section, the Secretary shall give 
priority to public and private research or educational 
institutions and organizations the goals of which include--
          (1) formation of interdisciplinary teams to review or 
        conduct research on the environmental effects of the 
        release of new genetically modified agricultural 
        products;
          (2) conduct of studies relating to biosafety of 
        genetically modified agricultural products;
          (3) evaluation of the cost and benefit for 
        development of an identity preservation system for 
        genetically modified agricultural products;
          (4) establishment of international partnerships for 
        research and education on biosafety issues; or
          (5) formation of interdisciplinary teams to renew and 
        conduct research on the nutritional enhancement and 
        environmental benefits of genetically modified 
        agricultural products.
    [(e)](f) Consultation.--In considering specific areas of 
research for funding under this section, the Secretary of 
Agriculture shall consult with the Administrator of the Animal 
and Plant Health Inspection Service, the Office of Agricultural 
Biotechnology, and the Agricultural Biotechnology Research 
Advisory Committee.
    [(f)](g) Program Coordination.--The Secretary of 
Agriculture shall coordinate researchfunded under this section 
with the Office of Research and Development of the Environmental 
Protection Agency in order to avoid duplication of research activities.
    [(g)] (h) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated such sums as necessary to carry out this 
        section.
          (2) Withholdings from biotechnology outlays.--The 
        Secretary of Agriculture shall withhold from outlays of 
        the Department of Agriculture for research on 
        biotechnology, as defined and determined by the 
        Secretary, at least one percent of such amount for the 
        purpose of making grants under this section for 
        research on biotechnology risk assessment.

           *       *       *       *       *       *       *


SEC. 1672. HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES.

    (a) Competitive Specialized Research and Extension Grants 
Authorized.--The Secretary of Agriculture (referred to in this 
section as the ``Secretary'') may make competitive grants to 
support research and extension activities specified in 
subsections (e), (f), and (g). The Secretary shall make the 
grants in consultation with the National Agricultural Research, 
Extension, Education, and Economics Advisory Board.

           *       *       *       *       *       *       *

          (24) Tomato spotted wilt virus research and 
        extension.--Research and extension grants may be made 
        under this section for the purpose of control, 
        management, and eradication of tomato spotted wilt 
        virus.
          (25) Animal infectious diseases research and 
        extension.--
                  (A) In general.--Research and extension 
                grants may be made under this section for the 
                purpose of developing--
                          (i) prevention and control 
                        methodologies for animal infectious 
                        diseases that impact trade, including 
                        vesicular stomatitis, bovine 
                        tuberculosis, transmissible spongiform 
                        encephalopathy, brucellosis, and E. 
                        coli 0157:H7 infection;
                          (ii) laboratory tests for quicker 
                        detection of infected animals and 
                        presence of diseases among herds;
                          (iii) prevention strategies, 
                        including vaccination programs; and
                          (iv) rapid diagnostic techniques for, 
                        and evaluation of, animal disease 
                        agents considered to be risks for 
                        agricultural bioterrorism attack.
                  (B) Collaboration.--Research under 
                subparagraph (A) may be conducted in 
                collaboration with scientists from the 
                Department, other Federal agencies, 
                universities, and industry.
                  (C) Evaluation of diagnostic techniques and 
                vaccines.--Any research on or evaluation of 
                diagnostic techniques and vaccines under 
                subparagraph (A) shall include evaluation of 
                diagnostic techniques and vaccines under field 
                conditions in countries in which the animal 
                disease occurs.
          (26) Program to combat childhood obesity.--Research 
        and extension grants may be made under this section to 
        consortia of institutions of higher education that 
        specialize in obesity and nutrition research to develop 
        and implement effective strategies to reduce the 
        incidence of childhood obesity.
          (27) Integrated pest management.--Research and 
        extension grants may be made under this section to land 
        grant colleges and universities, other Federal 
        agencies, and other interested persons to coordinate 
        and improve research, education, and outreach on, and 
        implementation on farms of, integrated pest management.
          (28) Beef cattle genetics.--
                  (A) In general.--Research and extension 
                grants for beef cattle genetics evaluation 
                research may be made under this section to 
                institutions of higher education, or consortia 
                of institutions of higher education, that--
                          (i) have expertise in beef cattle 
                        genetic evaluation research and 
                        technology; and
                          (ii) have been actively involved, for 
                        at least 20 years, in the estimation 
                        and prediction of progeny differences 
                        for publication and use by seed stock 
                        producer breed associations.
                  (B) Priority.--In making grants under 
                subparagraph (A), the Secretary shall give 
                priority to proposals to--
                          (i) establish and coordinate 
                        priorities for genetic evaluation of 
                        domestic beef cattle;
                          (ii) consolidate research efforts to 
                        reduce duplication of effort and 
                        maximize the return to beef industry;
                          (iii) streamline the process between 
                        the development and adoption of new 
                        genetic evaluation methodologies by the 
                        industry;
                          (iv) identify new traits and 
                        technologies for inclusion in genetic 
                        programs in order to--
                                  (I) reduce the costs of beef 
                                production; and
                                  (II) provide consumers with a 
                                high nutritional value, 
                                healthy, and affordable protein 
                                source; or
                          (v) create decisionmaking tools that 
                        incorporate the increasing number of 
                        traits being evaluated and the 
                        increasing amount of information from 
                        DNA technology into genetic improvement 
                        programs, with the goal of optimizing 
                        the overall efficiency, product quality 
                        and safety, and health of the domestic 
                        beef cattle herd resource.
    (f) Imported Fire Ant Control, Management, and 
Eradication.--

           *       *       *       *       *       *       *

    (h) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1999 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 1672A. NUTRIENT MANAGEMENT RESEARCH AND EXTENSION INITIATIVE.

    (a) Competitive Research and Extension Grants Authorized.--
The Secretary of Agriculture (referred to in this section as 
the ``Secretary'') may make competitive grants to support 
research and extension activities specified in subsection (e). 
The Secretary shall make the grants in consultation with the 
National Agricultural Research, Extension, Education, and 
Economics Advisory Board.

           *       *       *       *       *       *       *

          (5) Alternative uses of animal waste.--Research and 
        extension grants may be made under this section for the 
        purpose of finding innovative methods and technologies 
        for economic use or disposal of animal waste.
    (g) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1999 through [2002] 2006.

SEC. 1672B. ORGANIC AGRICULTURE RESEARCH AND EXTENSION INITIATIVE.

    (a) Competitive Specialized Research and Extension Grants 
Authorized.--In consultation with the National Agricultural 
Research, Extension, Education, and Economics Advisory Board 
and the National Organic Standards Board, the Secretary of 
Agriculture (referred to in this section as the ``Secretary'') 
may make competitive grants to support research and extension 
activities regarding organically grown and processed 
agricultural commodities for the purposes of--
          (1) facilitating the development of organic 
        agriculture production and processing methods;
          (2) evaluating the potential economic benefits to 
        producers and processors who use organic methods; [and]
          (3) exploring international trade opportunities for 
        organically grown and processed agricultural 
        commodities[.];
          (4) determining desirable traits for organic 
        commodities using advanced genomics;
          (5) pursuing classical and marker-assisted breeding 
        for publicly held varieties of crops and animals 
        optimized for organic systems;
          (6) identifying marketing and policy constraints on 
        the expansion of organic agriculture; and
          (7) conducting advanced on-farm research and 
        development that emphasizes observation of, 
        experimentation with, and innovation for working 
        organic farms, including research relating to 
        production and to socioeconomic conditions.
    (b) Grant Types and Process, Prohibition on Construction.--
Paragraphs (1), (6), (7), and (11) of subsection (b) of the 
Competitive, Special, and Facilities Research Grant Act (7 
U.S.C. 450i) shall apply with respect to the making of grants 
under this section.

           *       *       *       *       *       *       *

    (d) Partnerships Encouraged.--Following the completion of a 
peer review process for grant proposals received under this 
section, the Secretary may provide a priority to those grant 
proposals, found in the peer review process to be 
scientifically meritorious, that involve the cooperation of 
multiple entities.
    (e) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1999 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 1680. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH DISABILITIES.

    (a) Special Demonstration Grants.--

           *       *       *       *       *       *       *

    (c) Authorization of Appropriations.--
          (1) In general.--Subject to paragraph (2), there is 
        authorized to be appropriated to carry out this section 
        $6,000,000 for each of fiscal years 1999 through [2002] 
        2006.
          (2) National grant.--Not more than 15 percent of the 
        amounts made available under paragraph (1) for a fiscal 
        year shall be used to carry out subsection (b).

           *       *       *       *       *       *       *


                           HATCH ACT OF 1887

           *       *       *       *       *       *       *


    Sec. 3. (a) There are hereby authorized to be appropriated 
for the purposes of this Act such sums as Congress may from 
time to time determine to be necessary.

           *       *       *       *       *       *       *

    (d) Matching Funds.--
          (1) Requirement.--Except as provided in paragraph 
        (4), no allotment shall be made to a State under 
        subsection (b) or (c), and no payments from the 
        allotment shall be made to a State, in excess of the 
        amount that the State makes available out of non-
        Federal funds for agricultural research and for the 
        establishment and maintenance of facilities for the 
        performance of the research.
          (2) Failure to provide matching funds.--If a State 
        fails to comply with the requirement to provide 
        matching funds for a fiscal year under paragraph (1), 
        the Secretary of Agriculture shall withhold from 
        payment to the State for that fiscal year an amount 
        equal to the difference between--
                  (A) the amount that would be allotted and 
                paid to the State under subsections (b) and (c) 
                (if the full amount of matching funds were 
                provided by the State); and
                  (B) the amount of matching funds actually 
                provided by the State.
          (3) Reapportionment.--
                  (A) In general.--The Secretary of Agriculture 
                shall reapportion amounts withheld under 
                paragraph (2) for a fiscal year among the 
                States satisfying the matching requirement for 
                that fiscal year.
                  (B) Matching requirement.--Any 
                reapportionment of funds under this paragraph 
                shall be subject to the matching requirement 
                specified in paragraph (1).
          [(4) Territories.--In lieu of the matching funds 
        requirement of paragraph (1), the Commonwealth of 
        Puerto Rico, the Virgin Islands, and Guam shall be 
        subject to the same matching funds requirements as 
        those applicable to an eligible institution under 
        section 1449 of the National Agricultural Research, 
        Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
        3222d).]
          (4) Exception for insular areas.--
                  (A) In general.--Effective beginning for 
                fiscal year 2003, in lieu of the matching funds 
                requirement of paragraph (1), the insular areas 
                of the Commonwealth of Puerto Rico, Guam, and 
                the Virgin Islands of the United States shall 
                provide matching funds from non-Federal sources 
                in an amount equal to not less than 50 percent 
                of the formula funds distributed by the 
                Secretary to each of the insular areas, 
                respectively, under this section.
                  (B) Waivers.--The Secretary may waive the 
                matching fund requirement of subparagraph (A) 
                for any fiscal year if the Secretary determines 
                that the government of the insular area will be 
                unlikely to meet the matching requirement for 
                the fiscal year.
    (e) ``Administration'' as used in this section shall 
include participation in planning and coordinating cooperative 
regional research as defined in subsection (c)(3).

           *       *       *       *       *       *       *

    [(i) Integration of Research and Extension.--
          (1) In general.--Not less than the applicable 
        percentage specified under paragraph (2) of the Federal 
        formula funds that are paid under this Act and 
        subsections (b) and (c) of section 3 of the Smith-Lever 
        Act (7 U.S.C. 343) to colleges and universities 
        eligible to receive funds under the Act of July 2, 1862 
        (12 Stat. 503, chapter 130; 7 U.S.C. 301 et seq.), during 
        a fiscal year shall be expended for activities that 
        integrate cooperative research and extension (referred 
        to in this subsection as ``integrated activities'').
          [(2) Applicable percentages.--
                  [(A) 1997 expenditures on multistate 
                activities.--Of the Federal formula funds that 
                were paid to each State for fiscal year 1997 
                under this Act and subsections (b) and (c) of 
                section 3 of the Smith-Lever Act (7 U.S.C. 
                343), the Secretary of Agriculture shall 
                determine the percentage that the State 
                expended for integrated activities.
                  [(B) Required expenditures on multistate 
                activities.--Of the Federal formula funds that 
                are paid to each State for fiscal year 2000 and 
                each subsequent fiscal year under this Act and 
                subsections (b) and (c) of section 3 of the 
                Smith-Lever Act (7 U.S.C. 343), the State shall 
                expend for the fiscal year for integrated 
                activities a percentage that is at least equal 
                to the lesser of--
                          [(i) 25 percent; or
                          [(ii) twice the percentage for the 
                        State determined under subparagraph 
                        (A).
                  [(C) Reduction by secretary.--The Secretary 
                of Agriculture may reduce the minimum 
                percentage required to be expended by a State 
                for integrated activities under subparagraph 
                (B) in a case of hardship, infeasibility, or 
                other similar circumstance beyond the control 
                of the State, as determined by the Secretary.
                  [(D) Plan of work.--The State shall include 
                in the plan of work of the State required under 
                section 7 of this Act or section 4 of the 
                Smith-Lever Act (7 U.S.C. 344), as applicable, 
                a description of the manner in which the State 
                will meet the requirements of this paragraph.
          [(3) Applicability.--This subsection does not apply 
        to funds provided--
                  [(A) by a State or local government pursuant 
                to a matching requirement;
                  [(B) to a 1994 Institution (as defined in 
                section 532 of the Equity in Educational Land-
                Grant Status Act of 1994 (Public Law 103-382; 7 
                U.S.C. 301 note)); or
                  [(C) to the Commonwealth of Puerto Rico, the 
                Virgin Islands, or Guam.
          [(4) Relationship to other requirements.--Federal 
        formula funds described in paragraph (1) that are used 
        by a State for a fiscal year for integrated activities 
        in accordance with paragraph (2)(B) may also be used to 
        satisfy the multistate activities requirements of 
        subsection (c)(3) of this section and section 3(h) of 
        the Smith-Lever Act (7 U.S.C. 343(h)) for the same 
        fiscal year.]
    (i) Integrated Research and Extension Activities.--
          (1) In general.--
                  (A) Requirement.--To receive funding under 
                this Act and subsections (b) and (c) of section 
                3 of the Smith-Lever Act (7 U.S.C. 343) for a 
                fiscal year, a State must have expended on 
                activities that integrate cooperative research 
                and extension (referred to in this section as 
                ``integrated activities''), in the preceding 
                fiscal year, an amount equivalent to not less 
                than 25 percent of the funds paid to the State 
                under this section and subsections (b) and (c) 
                of section 3 of the Smith-Lever Act (7 U.S.C. 
                343) for the preceding fiscal year.
                  (B) Determination of amount.--In determining 
                compliance with subparagraph (A), the Secretary 
                shall include all cooperative research and 
                extension funds expended by the State in the 
                prior fiscal year, including Federal, State, 
                and local funds.
          (2) Reduction of percentage.--The Secretary may 
        reduce the minimum percentage required to be expended 
        for integrated activities under paragraph (1) by a 
        State in a case of hardship, unfeasibility, or other 
        similar circumstances beyond the control of the State, 
        as determined by the Secretary.
          (3) Plan of work.--The State shall include in the 
        plan of work of the State required under section 7 of 
        this Act and under section 4 of the Smith-Lever Act (7 
        U.S.C. 344), as applicable, a description of the manner 
        in which the State will meet the requirements of this 
        subsection.
          (4) Applicability.--This subsection does not apply to 
        funds provided--
                  (A) to a 1994 Institution (as defined in 
                section 532 of the Equity in Educational Land-
                Grant Status Act of 1994 (7 U.S.C. 301 note; 
                Public Law 103-382)); or
                  (B) to the Commonwealth of Puerto Rico, the 
                Virgin Islands, or Guam.
          (5) Relationship to other requirements.--Funds 
        described in paragraph (1)(B) that a State uses to 
        calculate the required amount of expenditures for 
        integrated activities under paragraph (1)(A) may also 
        be used in the same fiscal year to calculate the amount 
        of expenditures for multistate activities required 
        under subsection (c)(3) of this section and section 
        3(h) of the Smith-Lever Act (7 U.S.C. 343(h)).

           *       *       *       *       *       *       *


SEC. 7. DUTIES OF SECRETARY; ASCERTAINMENT OF ENTITLEMENT OF STATE TO 
                    FUNDS; PLANS OF WORK.

    (a) Duties of Secretary.--The Secretary of Agriculture is 
hereby charged with the responsibility for the proper 
administration of this Act, and is authorized and directed to 
prescribe such rules and regulations as may be necessary to 
carry out its provisions. It shall be the duty of the Secretary 
to furnish such advice and assistance as will best promote the 
purposes of this Act, including participation in coordination 
of research initiated under this Act by the State agricultural 
experiment stations, from time to time to indicate such lines 
of inquiry as to him seem most important, and to encourage and 
assist in the establishment and maintenance of cooperation by 
and between the several State agricultural experiment stations, 
and between the stations and the United States Department of 
Agriculture.
    (b) Ascertainment of Entitlement.--On or before the first 
day of October in each year after the passage of this Act, the 
Secretary of Agriculture shall ascertain as to each State 
whether it is entitled to receive its share of the annual 
appropriations for agricultural experiment stations under this 
Act and the amount which thereupon each is entitled, 
respectively, to receive.
    [(c) Effect of Failure To Expend Full Allotment.--Whenever 
it shall appear to the Secretary of Agriculture from the annual 
statement of receipts and expenditures of funds by any State 
agricultural experiment station that any portion of the 
preceding annual appropriation allotted to that station under 
this Act remains unexpended, such amount shall be deducted from 
the next succeeding annual allotment to the State concerned.]
    (c) Carryover.--
          (1) In general.--The balance of any annual funds 
        provided under this Act to a State agricultural 
        experiment station for a fiscal year that remains 
        unexpended at the end of the fiscal year may be carried 
        over for use during the following fiscal year.
          (2) Failure to expend full allotment.--If any 
        unexpended balance carried over by a State is not 
        expended by the end of the second fiscal year, an 
        amount equal to the unexpended balance shall be 
        deducted from the next succeeding annual allotment to 
        the State.

           *       *       *       *       *       *       *

          (4) The manner in which research and extension, 
        including research and extension activities funded 
        other than through formula funds, will cooperate to 
        address the critical issues in the State, including the 
        activities to be carried out separately, the activities 
        to be carried out sequentially, and the activities to 
        be carried out jointly.
          (5) The technology transfer activities conducted with 
        respect to federally-funded agricultural research.
    (f) Research Protocols.--

           *       *       *       *       *       *       *


                   NATIONAL AQUACULTURE ACT OF 1980

           *       *       *       *       *       *       *


    Sec. 10. For purposes of carrying out the provisions of 
this Act, there are authorized to be appropriated--
          (1) to the Department of Agriculture, $1,000,000 for 
        each of fiscal years 1991 through [2002] 2006;
          (2) to the Department of Commerce, $1,000,000 for 
        each of fiscal years 1991 through [2002] 2006; and
          (3) to the Department of Interior, $1,000,000 for 
        each of fiscal years 1991 through [2002] 2006.
    Funds authorized by this section shall be in addition 
to,and not in lieu of, funds authorized by any other Act.

           *       *       *       *       *       *       *


 NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND TEACHING POLICY ACT OF 
                                 1977

           *       *       *       *       *       *       *


    Sec. 1404. When used in this title:
          (1) The term ``Advisory Board'' means the National 
        Agricultural Research, Extension, Education, and 
        Economics Advisory Board.
          (2) The term ``agricultural research'' means research 
        in the food and agricultural sciences.

           *       *       *       *       *       *       *

          (9) The term ``Hispanic-serving institution'' has the 
        meaning given the term by section 316(b)(1) of the 
        Higher Education Act of 1965 (20 U.S.C. 1059c(b)(1)).
          (10) Insular area.--The term ``insular area'' means--
                  (A) the Commonwealth of Puerto Rico;
                  (B) Guam;
                  (C) American Samoa;
                  (D) the Commonwealth of the Northern Mariana 
                Islands;
                  (E) the Federated States of Micronesia;
                  (F) the Republic of the Marshall Islands;
                  (G) the Republic of Palau;
                  (H) and the Virgin Islands of the United 
                States.
          [(10)](11) The term ``land-grant colleges and 
        universities'' means those institutions eligible to 
        receive funds under the Act of July 2, 1862 (12 Stat. 
        503-505, as amended; 7 U.S.C. 301-305, 307 and 308), or 
        the Act of August 30, 1890 (26 Stat. 417-419, as 
        amended; 7 U.S.C. 321-326 and 328), including Tuskegee 
        University.
          [(11)](12) The term ``Secretary'' means the Secretary 
        of Agriculture of the United States.
          [(12) The term ``State'' means any one of the fifty 
        States, the Commonwealth of Puerto Rico, Guam, American 
        Samoa, the Commonwealth of the Northern Marianas, the 
        Trust Territory of the Pacific Islands, the Virgin 
        Islands of the United States, and the District of 
        Columbia.
          (13) State.--The term ``State'' means--
                  (A) a State;
                  (B) the District of Columbia; and
                  (C) any insular area.
          [(13)] (14) The term ``State agricultural experiment 
        stations'' means those institutions eligible to receive 
        funds under the Act of March 2, 1887 (24 Stat. 440-442, 
        as amended; 7 U.S.C. 361a-361i).
          [(14)](15) Teaching and education.--The terms 
        ``teaching'' and ``education'' mean formal classroom 
        instruction, laboratory instruction, and practicum 
        experience in the food and agricultural sciences and 
        matters relating thereto (such as faculty development, 
        student recruitment and services, curriculum 
        development, instructional materials and equipment, and 
        innovative teaching methodologies) conducted by 
        colleges and universities offering baccalaureate or 
        higher degrees.
          [(15)](16) The term ``cooperating forestry schools'' 
        means those institutions eligible to receive funds 
        under the Act of October 10, 1962 (16 U.S.C. 582a et 
        seq.), commonly known as the McIntire-Stennis Act of 
        1962.
          [(16)](17) The term ``State cooperative 
        institutions'' or ``State cooperative agents'' means 
        institutions or agents designated by--
                  (A) the Act of July 2, 1862 (7 U.S.C. 301 et 
                seq.), commonly known as the First Morrill Act;
                  (B) the Act of August 30, 1890 (7 U.S.C. 321 
                et seq.), commonly known as the Second Morrill 
                Act, including Tuskegee University;
                  (C) the Act of March 2, 1887 (7 U.S.C. 361a 
                et seq.), commonly known as the Hatch Act of 
                1887;
                  (D) the Act of May 8, 1914 (7 U.S.C. 341 et 
                seq.), commonly known as the Smith-Lever Act;
                  (E) the Act of October 10, 1962 (16 U.S.C. 
                582a et seq.), commonly known as the McIntire-
                Stennis Act of 1962; and
                  (F) subtitles E, G, L, and M of this title.
          [(17)](18) The term ``sustainable agriculture'' means 
        anintegrated system of plant and animal production 
practices having a site-specific application that will, over the long-
term--

SEC. 1417. GRANTS AND FELLOWSHIPS FOR FOOD AND AGRICULTURAL SCIENCES 
                    EDUCATION.

    (a) Higher Education Teaching Programs.--The Secretary 
shall promote and strengthen higher education in the food and 
agricultural sciences by formulating and administering programs 
to enhance college and university teaching programs in 
agriculture, natural resources, forestry, veterinary medicine, 
home economics, [and] and rural economic, community, and 
business development disciplines closely allied to the food and 
agricultural system.
    (b) Grants.--The Secretary may make competitive grants (or 
grants without regard to any requirement for competition) to 
land-grant colleges and universities, to colleges and 
universities having significant minority enrollments and a 
demonstrable capacity to carry out the teaching of food and 
agricultural sciences, and to other colleges and universities 
having a demonstrable capacity to carry out the teaching of 
food and agricultural sciences, for a period not to exceed 5 
years--
          (1) to strengthen institutional capacities, including 
        curriculum, faculty, scientific instrumentation, 
        instruction delivery systems, and student recruitment 
        and retention, to respond to identified State, 
        regional, national, or international educational needs 
        in the food and agricultural sciences, or in rural 
        economic, community, and business development;
          (2) to attract and support undergraduate and graduate 
        students in order to educate the students in national 
        need areas of the food and agricultural sciences, or in 
        rural economic, community, and business development;
          (3) to facilitate cooperative initiatives between two 
        or more eligible institutions, or between eligible 
        institutions and units of State government or 
        organizations in the private sector, to maximize the 
        development and use of resources such as faculty, 
        facilities, and equipment to improve food and 
        agricultural sciences teaching programs, or teaching 
        programs emphasizing rural economic, community, and 
        business development;
          (4) to design and implement food and agricultural 
        programs, or programs emphasizing rural economic, 
        community, and business development, to build teaching 
        and research capacity at colleges and universities 
        having significant minority enrollments;
          (5) to conduct undergraduate scholarship programs to 
        meet national and international needs for training food 
        and agricultural scientists and professionals, or 
        professionals in rural economic, community, and 
        business development; and

           *       *       *       *       *       *       *

          (6) to conduct graduate and postdoctoral fellowship 
        programs to attract highly promising individuals to 
        research or teaching careers in the food and 
        agricultural sciences.
    (c) Priorities.--In awarding grants under subsection (b), 
the Secretary shall give priority to--
          (1) applications for teaching enhancement projects 
        that demonstrate enhanced coordination among all types 
        of institutions eligible for funding under this 
        section; and
          (2) applications for teaching enhancement projects 
        that focus on innovative, multidisciplinary education 
        programs, material, and curricula.
    (d) Eligibility for Grants.--
          (1) In general.--To be eligible for a grant under 
        subsection (b), a recipient institution must have a 
        significant demonstrable commitment to higher education 
        teaching programs in the food and agricultural 
        sciences, or in rural economic, community, and business 
        development, and to each specific subject area for 
        which the grant is to be used.
          (2) Minority groups.--The Secretary may set aside a 
        portion of the funds appropriated for the awarding of 
        grants under subsection (b), and make such amounts 
        available only for grants to eligible colleges and 
        universities that the Secretary determines have unique 
        capabilities for achieving the objective of full 
        representation of minority groups in the food and 
        agricultural sciences workforce, or in the rural 
        economic, community, and business development 
        workforce, of the United States.
          (3) Research foundations.--An eligible college or 
        university under subsection (b) includes a research 
        foundation maintained by the college or university.
    (e) Food and Agricultural Education Information System.--
From amounts made available for grants under this section, the 
Secretary may maintain a national food and agricultural 
education information system that contains--

           *       *       *       *       *       *       *

    (k) Administration.--The Federal Advisory Committee Act (5 
U.S.C. App. 2) and title XVIII of the Food and Agriculture Act 
of 1977 (7 U.S.C. 2281 et seq.) shall not apply to a panel or 
board created for the purpose of reviewing applications and 
proposals for grants or nominations for awards submitted under 
this section.
    (l) Authorization of Appropriations.--There are authorized 
to be appropriated for carrying out this section $60,000,000 
for each of the fiscal years 1990 through [2002] 2006.

SEC. 1417A. COMPETITIVE RESEARCH FACILITIES GRANT PROGRAM.

    (a) Authority.--The Secretary may award grants to eligible 
institutions on a competitive basis for the construction, 
acquisition, modernization, renovation, alteration, and 
remodeling of food and agricultural research facilities such as 
buildings, laboratories, and other capital facilities 
(including acquisition of fixtures and equipment) in accordance 
with this section.
    (b) Eligible Institutions.--The following institutions are 
eligible to compete for grants under subsection (a):
          (1) A State cooperative institution.
          (2) A Hispanic-serving institution.
    (c) Criteria for Award.--The Secretary shall award grants 
to support the national research purposes specified in section 
1402 in a manner determined by the Secretary.
    (d) Matching.--
          (1) In general.--The Secretary may establish such 
        matching requirements for grants under subsection (a) 
        as the Secretary considers appropriate.
          (2) Form of match.--Matching requirements established 
        by the Secretary may be met with unreimbursed indirect 
        costs and in-kind contributions.
          (3) Evaluation preference.--The Secretary may include 
        an evaluation preference for projects for which the 
        applicant proposes funds for the direct costs of a 
        project to meet the required match.
    (e) Targeted Institutions.--The Secretary may determine 
that a portion of funds made available to carry out this 
section shall be targeted to particular eligible institutions 
to enhance the capacity of the eligible institutions to carry 
out research.
    (f) Administration.--
          (1) Regulations.--The Secretary shall promulgate such 
        regulations as are necessary to carry out this section.
          (2) States With More Than 1 Eligible Institution.--In 
        a State having more than 1 eligible institution, the 
        Secretary shall establish procedures in accordance with 
        the purposes specified in section 1402 to ensure that 
        the facility proposals of the eligible institutions in 
        the State provide for a coordinated food and 
        agricultural research program among eligible 
        institutions in the State.
    (g) Applicability of the Federal Advisory Committee Act.--
The Federal Advisory Committee Act (5 U.S.C. App.) and title 
XVIII of the Food and Agriculture Act of 1977 (7 U.S.C. 2281 et 
seq.) shall not apply to a panel or board created solely for 
the purpose of reviewing applications or proposals submitted 
under this section.
    (h) Advisory Board.--In carrying out this section, the 
Secretary shall consult with the Advisory Board.
    (i) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 2002 through 2006.

           *       *       *       *       *       *       *


SEC. 1419. GRANTS FOR RESEARCH ON THE PRODUCTION AND MARKETING OF 
                    ALCOHOLS AND INDUSTRIAL HYDROCARBONS FROM 
                    AGRICULTURAL COMMODITIES AND FOREST PRODUCTS.

    (a) Authority of Secretary.--The Secretary may award grants 
under this section to colleges, universities, and Federal 
laboratories for the purpose of conducting research related 
to--

           *       *       *       *       *       *       *

    (c) Minority Groups.--The Secretary may set aside a portion 
of funds appropriated for the award of grants under this 
section and make such amounts available only for grants to 
eligiblecolleges and universities that the Secretary determines 
have unique capabilities for achieving the objective of full 
participation of minority groups in research on the production and 
marketing of alcohols and industrial hydrocarbons from agricultural 
commodities and forest products.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated for the purposes of carrying out this 
section $20,000,000 for each of the fiscal years 1991 through 
[2002] 2006.

           *       *       *       *       *       *       *


SEC. 1419A. POLICY RESEARCH CENTERS.

    (a) In General.--Consistent with this section, the 
Secretary may make grants, competitive grants, and special 
research grants to, and enter into cooperative agreements and 
other contracting instruments with, policy research centers 
described in subsection (b) to conduct research and education 
programs that are objective, operationally independent, and 
external to the Federal Government and that concern the effect 
of public policies and trade agreements on--
          (1) the farm and agricultural sectors;
          (2) the environment;
          (3) rural families, households, and economies; and
          (4) consumers, food, and nutrition.
    (b) Eligible Recipients.--State agricultural experiment 
stations, colleges and universities, other research 
institutions and organizations, private organizations, 
corporations, and individuals shall be eligible to apply for 
funding under subsection (a).
    (c) Activities.--Under this section, funding may be 
provided for disciplinary and interdisciplinary research and 
education concerning policy research activities consistent with 
this section, including activities that--
          (1) quantify the implications of public policies and 
        regulations;
          (2) develop theoretical and research methods;
          (3) [collect and analyze] collect, analyze, and 
        disseminate data for policymakers, analysts, and 
        individuals; and
          (4) develop programs to train analysts.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1996 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 1424. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH 
                    PROGRAM.

    (a) Authority of Secretary.--The Secretary may establish, 
and award grants for projects for, a multi-year research 
initiative on human nutrition intervention and health 
promotion.
    (b) Emphasis of Initiative.--In administering human 
nutrition research projects under this section, the Secretary 
shall give specific emphasis to--
          (1) coordinated longitudinal research assessments of 
        nutritional status; and
          (2) the implementation of unified, innovative 
        intervention strategies,
to identify and solve problems of nutritional inadequacy and 
contribute to the maintenance of health, well-being, 
performance, and productivity of individuals, thereby reducing 
the need of the individuals to use the health care system and 
social programs of the United States.
    (c) Administration of Funds.--The Administrator of the 
Agricultural Research Service shall administer funds made 
available to carry out this section to ensure a coordinated 
approach to health and nutrition research efforts.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1996 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 1424A. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND AGRICULTURAL 
                    RESEARCH.

    (a) Findings.--Congress finds the following:

           *       *       *       *       *       *       *

    (d) Authorization of Appropriations.--There are authorized 
to be appropriated $10,000,000 for each of fiscal years 1997 
through [2002] 2006 to carry out the pilot program.

           *       *       *       *       *       *       *


                      nutrition education program

    Sec. 1425. (a) The Secretary shall establish a national 
education program which shall include, but not be limited to, 
the dissemination of the results of food and human nutrition 
research performed or funded by the Department of Agriculture.

           *       *       *       *       *       *       *

                          (ii) the remainder shall be allocated 
                        to each State in an amount which bears 
                        the same ratio to the total amount to 
                        be allocated under this subparagraph as 
                        the population of the State living at 
                        or below 125 per centum of the income 
                        poverty guidelines prescribed by the 
                        Office of Management and Budget 
                        (adjusted pursuant to section 673(2) of 
                        the Omnibus Budget Reconciliation Act 
                        of 1981 (42 U.S.C. 9902)), bears to the 
                        total population of all the States 
                        living at or below 125 per centum of 
                        the income poverty guidelines, as 
                        determined by the last preceding 
                        decennial census at the time each such 
                        additional amount is first 
                        appropriated. The provisions of this 
                        subparagraph shall not preclude the 
                        Secretary from developing educational 
                        materials and programs for persons in 
                        income ranges above the level 
                        designated in this subparagraph.
          (3) There is authorized to be appropriated to carry 
        out the expanded food and nutrition education program 
        established under section 3(d) of the Act of May 8, 
        1914 (38 Stat. 373, chapter 79; 7 U.S.C. 343(d) and 
        this section, $83,000,000 for each of fiscal years 1996 
        through [2002] 2006.

           *       *       *       *       *       *       *

    Sec. 1433. (a) There are authorized to be appropriated such 
funds as Congress may determine necessary to support continuing 
animal health and disease research programs at eligible 
institutions, but not to exceed $25,000,000 for each of the 
fiscal years 1991 through [2002] 2006, and not in excess of 
such sums as may after the date of enactment of this title be 
authorized by law for any subsequent fiscal year. Funds 
appropriated under this section shall be used: (1) to meet 
expenses of conducting animal health and disease research, 
publishing and disseminating the results of such research, and 
contributing to the retirement of employees subject to the 
provisions of the Act of March 4, 1940 (54 Stat. 39-40, as 
amended; 7 U.S.C. 331); (2) for administrative planning and 
direction; and (3) to purchase equipment and supplies necessary 
for conducting such research.

           *       *       *       *       *       *       *

    Sec. 1434. (a) There are authorized to be appropriated such 
funds as Congress may determine necessary to support research 
on specific national or regional animal health or disease 
problems, or national or regional problems relating to pre-
harvest, on-farm food safety, or animal well-being, but not to 
exceed $35,000,000 for each of the fiscal years 1991 through 
[2002] 2006, and not in excess of such sums as may after the 
date of enactment of this title be authorized by law for any 
subsequent fiscal year.
    (b) Notwithstanding the provisions of section 1435 of this 
title, funds appropriated under this section shall be awarded 
in the form of grants, for periods not to exceed five years, to 
State agricultural experiment stations, colleges and 
universities, other research institutions and organizations, 
Federal agencies, private organizations or corporations, and 
individuals.

           *       *       *       *       *       *       *


SEC. 1444. EXTENSION AT 1890 LAND-GRANT COLLEGES, INCLUDING TUSKEGEE 
                    UNIVERSITY.

    [(a) There] (a) Authorization of Appropriations.--
          (1) In general.--There are hereby authorized to be 
        appropriated annually such sums as Congress may 
        determine necessary to support continuing agricultural 
        and forestry extension at colleges eligible to receive 
        funds under the Act of August 30, 1890 (26 Stat. 417-
        419, as amended; 7 U.S.C. 321-326 and 328), including 
        Tuskegee University (hereinafter in this section 
        referred to as ``eligible institutions''). [Beginning 
        with the fiscal year ending September 30, 1979, and 
        ending with the fiscal year ending September 30, 1981, 
        there shall be appropriated under this section for each 
        fiscal year an amount not less than 4 per centum of the 
        total appropriations for such year under the Act of May 
        8, 1914 (38 Stat. 372-374, as amended; 7 U.S.C. 341-
        349): Provided, That the amount appropriated for the 
        fiscal year ending September 30, 1979, shall not be 
        less than the amount made available for the fiscal year 
        ending September 30, 1978, to such eligible institutions 
        under section 3(d) of the Act of May 8, 1914 (38 Stat. 
        373, as amended; 7 U.S.C. 343(d)). Beginning with the fiscal 
        year ending September 30, 1982, there shall be appropriated 
        under this section an amount not less than 5\1/2\ per 
        centum, and for each fiscal year thereafter an amount not 
        less than 6 per centum] the following;
          (2) Minimum amount._Beginning with fiscal year 2002, 
        there shall be appropriated under this section for each 
        fiscal year an amount that is not less than 15 percent 
        of the total appropriations for such year under the Act 
        of May 8, 1914 (7 U.S.C. 341 et seq.), and related acts 
        pertaining to cooperative extension work at the land-
        grant institutions identified in the Act of May 8, 1914 
        (38 Stat. 372, chapter 79; 7 U.S.C. 341 et seq.), 
        except that for the purpose of this calculation, the 
        total appropriations shall not include amounts made 
        available after September 30, 1995, under section 3(d) 
        of that Act (7 U.S.C. 343(d)), to carry out programs or 
        initiatives for which no funds were made available 
        under section 3(d) of that Act for fiscal year 1995, or 
        any previous fiscal year, as determined by the 
        Secretary, and shall not include amounts made available 
        after September 30, 1995, to carry out programs or 
        initiatives funded under section 3(d) of that Act prior 
        to that date that are in excess of the highest amount 
        made available for the programs or initiatives for 
        fiscal year 1995, or any previous fiscal year, as 
        determined by the Secretary. [Funds appropriated]
          (3) Uses.--Funds appropriated; and under this section 
        shall be used for expenses of conducting extension 
        programs and activities, and for contributing to the 
        retirement of employees subject to the provisions of 
        the Act of March 4, 1940 (54 Stat. 30-40, as amended; 7 
        U.S.C. 331). [No more]
          (4) Carryover.--No more than 20 per centum of the 
        funds received by an institution in any fiscal year may 
        be carried forward to the succeeding fiscal year.

SEC. 1445. AGRICULTURAL RESEARCH AT 1890 LAND-GRANT COLLEGES, INCLUDING 
                    TUSKEGEE UNIVERSITY.

    [(a) There] (a) Authorization of Appropriations._
          (1) In general.--There are hereby authorized to be 
        appropriated annually such sums as Congress may 
        determine necessary to support continuing agricultural 
        research at colleges eligible to receive funds under 
        the Act of August 30, 1890 (26 Stat. 417-419, as 
        amended; 7 U.S.C. 321-326 and 328), including Tuskegee 
        University (hereinafter referred to in this section as 
        ``eligible institutions''). [Beginning with the fiscal 
        year ending September 30, 1979, there shall be 
        appropriated under this section for each fiscal year an 
        amount not less than 15 per centum of the total 
        appropriations for such year under section 3 of the Act 
        of March 2, 1887 (24 Stat. 441, as amended; 7 U.S.C. 
        361c): Provided, That the amount appropriated for the 
        fiscal year ending September 30, 1979, shall not be 
        less than the amount made available in the fiscal year 
        ending September 30, 1978, to such eligible 
        institutions under the Act of August 4, 1965 (79 Stat. 
        431, 7 U.S.C. 450i).]
          (2) Minimum amount._Beginning with fiscal year 2002, 
        there shall be appropriated under this section for each 
        fiscal year an amount that is not less than 25 percent 
        of the total appropriations for the fiscal year under 
        section 3 of the Hatch Act of 1887 (7 U.S.C. 361c).
          (3) Uses._Funds appropriated under this section shall 
        be used for expenses of conducting agricultural 
        research, printing, disseminating the results of such 
        research, contributing to the retirement of employees 
        subject to the provisions of the Act of March 4, 1940 
        (54 Stat. 39-40, as amended; 7 U.S.C. 331), 
        administrative planning and direction, and purchase and 
        rental of land and the construction, acquisition, 
        alteration, or repair of buildings necessary for 
        conducting agricultural research. [The eligible]
          (4) Coordination._The eligible institutions are 
        authorized to plan and conduct agricultural research in 
        cooperation with each other and such agencies, 
        institutions, and individuals as may contribute to the 
        solution of agricultural problems, and moneys 
        appropriated pursuant to this section shall be 
        available for paying the necessary expenses of 
        planning, coordinating, and conducting such cooperative 
        research. [No more (5) Carryover.--No more than 5 
        percent of the funds received by an institution in any 
        fiscal year, under this section, may be carried forward 
        to the succeeding fiscal year.]
          (5) Carryover._
                  (A) In general._The balance of any annual 
                funds provided to an eligible institution for a 
                fiscal year under this section that remains 
                unexpended at the end of the fiscal year may be 
                carried over for use during the following 
                fiscal year.
                  (B) Failure to expend full amount._If any 
                unexpended balance carried over by an eligible 
                institution is not expended by the end of the 
                second fiscal year, an amount equal to the 
                unexpended balance shall be deducted from the 
                next succeeding annual allotment to the 
                eligible institution.
    (b) Beginning with the fiscal year ending September 30, 
1979, the funds appropriated in each fiscal year under this 
section shall be distributed as follows:

           *       *       *       *       *       *       *

                  (E) The manner in which research and 
                extension, including research and extension 
                activities funded other than through formula 
                funds, will cooperate to address the critical 
                issues in the State, including the activities 
                to be carried out separately, the activities to 
                be carried out sequentially, and the activities 
                to be carried out jointly.
                  (F) The technology transfer activities 
                conducted with respect to federally-funded 
                agricultural research.
          (4) Research protocols.--

           *       *       *       *       *       *       *


SEC. 1447. GRANTS TO UPGRADE AGRICULTURAL AND FOOD SCIENCES FACILITIES 
                    AT 1890 LAND-GRANT COLLEGES, INCLUDING TUSKEGEE 
                    UNIVERSITY.

    (a) Purpose.--It is hereby declared to be the intent of 
Congress to assist the institutions eligible to receive funds 
under the Act of August 30, 1890, including Tuskegee University 
(hereafter referred to in this section as ``eligible 
institutions'') in the acquisition and improvement of 
agricultural and food sciences facilities and equipment, 
including libraries, so that the eligible institutions may 
participate fully in the production of human capital.
    (b) Authorization of Appropriations.--There are authorized 
to be appropriated to the Secretary of Agriculture for the 
purposes of carrying out the provisions of this section, 
[$15,000,000 for each of fiscal years 1996 through 2002] 
$25,000,000 for each of fiscal years 2002 through 2006, and 
such sums shall remain available until expended.
    (c) Use of Grant Funds.--Four percent of the sums 
appropriated pursuant to this section shall be available to the 
Secretary for administration of this grants program. The 
remaining funds shall be available for grants to eligible 
institutions for the purpose of assisting them in the purchase 
of equipment and land, the planning, construction, alteration, 
or renovation of buildings to strengthen their capacity in the 
production of human capital in the food and agricultural 
sciences and can be used at the discretion of the eligible 
institutions in the areas of research, extension, and resident 
instruction or any combination thereof.

           *       *       *       *       *       *       *


SEC. 1448. NATIONAL RESEARCH AND TRAINING CENTENNIAL CENTERS.

    (a) Competitive Grants Authorized.--The Secretary of 
Agriculture may make a competitive grant to five national 
research and training centennial centers located at colleges 
(or a consortia of such colleges) eligible to receive funds 
under the Act of August 30, 1890 (7 U.S.C. 321 et seq.), 
including Tuskegee University, that--
          (1) have been designated by the Secretary for the 
        fiscal years 1991 through 1995, or fiscal years 1996 
        through [2002] 2006, as national research and training 
        centennial centers; and
          (2) have the best demonstrable capacity, as 
        determined by the Secretary, to provide administrative 
        leadership as--

           *       *       *       *       *       *       *

    (f) Authorization of Appropriations.--There are authorized 
to be appropriated $2,000,000 for each of the fiscal years 1991 
through [2002] 2006 for grants under this section.
    (g) Center Defined.--For purposes of this section, the term 
``center'' means a national research and training centennial 
center that receives a grant under this subsection.

           *       *       *       *       *       *       *


SEC. 1449. MATCHING FUNDS REQUIREMENT FOR RESEARCH AND EXTENSION 
                    ACTIVITIES AT ELIGIBLE INSTITUTIONS.

    (a) Definitions.--In this section:
          (1) Eligible institution.--The term ``eligible 
        institution'' means a college eligible to receive funds 
        under the Act of August 30, 1890 (7 U.S.C. 321 et seq.) 
        (commonly known as the ``Second Morrill Act''), 
        including Tuskegee University.
          (2) Formula funds.--The term ``formula funds'' means 
        the formula allocation funds distributed to eligible 
        institutions under sections 1444 and 1445.
    (b) Determination of Non-Federal Sources of Funds.--Not 
later than September 30, 1999, each eligible institution shall 
submit to the Secretary a report describing for fiscal year 
1999--
          (1) the sources of non-Federal funds made available 
        by the State to the eligible institution for 
        agricultural research, extension, and education to meet 
        the requirements of this section; and
          (2) the amount of such funds generally available from 
        each source.
    [(c) Matching Formula.--Notwithstanding any other provision 
of this subtitle, the distribution of formula funds to an 
eligible institution shall be subject to the following matching 
requirements:
          [(1) For fiscal year 2000, the State shall provide 
        matching funds from non-Federal sources in an amount 
        equal to not less than 30 percent of the formula funds 
        to be distributed to the eligible institution.
          [(2) For fiscal year 2001, the State shall provide 
        matching funds from non-Federal sources in an amount 
        equal to not less than 45 percent of the formula funds 
        to be distributed to the eligible institution.
          [(3) For fiscal year 2002 and each fiscal year 
        thereafter, the State shall provide matching funds from 
        non-Federal sources in an amount equal to not less than 
        50 percent of the formula funds to be distributed to 
        the eligible institution.
    [(d) Limited Waiver Authority.--
          [(1) Fiscal year 2000.--Notwithstanding subsection 
        (f), the Secretary may waive the matching funds 
        requirement under subsection (c)(1) for fiscal year 
        2000 for an eligible institution of a State if the 
        Secretary determines that, based on the report received 
        under subsection (b), the State will be unlikely to 
        satisfy the matching requirement.
          [(2) Future fiscal years.--The Secretary may not 
        waive the matching requirement under subsection (c) for 
        any fiscal year other than fiscal year 2000.]
    (c) Matching Formula.--
          (1) In general.--For each of fiscal years 2003 
        through 2006, the State shall provide matching funds 
        from non-Federal sources.
          (2) Amount.--The amount of the matching funds shall 
        be equal to not less than--
                  (A) for fiscal year 2003, 60 percent of the 
                formula funds to be distributed to the eligible 
                institution; and
                  (B) for each of fiscal years 2004 through 
                2006, 110 percent of the amount required under 
                this paragraph for the preceding fiscal year.
    (d) Waivers.--Notwithstanding subsection (f), for any of 
fiscal years 2003 through 2006, the Secretary may waive the 
matching funds requirement under subsection (c) for any amount 
above the level of 50 percent for an eligible institution of a 
State if the Secretary determines that the State will be 
unlikely to meet the matching requirement.
    (e) Use of Matching Funds.--Under terms and conditions 
established by the Secretary, matching funds provided as 
required by subsection (c) may be used by an eligible 
institution for agricultural research, extension, and education 
activities.

           *       *       *       *       *       *       *


SEC. 1455. EDUCATION GRANTS PROGRAMS FOR HISPANIC-SERVING INSTITUTIONS.

    (a) Grant Authority.--The Secretary may make competitive 
grants (or grants without regard to any requirement for 
competition) to Hispanic-serving institutions for the purpose 
of promoting and strengthening the ability of Hispanic-serving 
institutions to carry out education, applied research, and 
related community development programs.

           *       *       *       *       *       *       *

    (c) Authorization of Appropriations.--There are authorized 
to be appropriated to make grants under this section 
$20,000,000 for each of fiscal years 1997 through [2002] 2006.

           *       *       *       *       *       *       *


SEC. 1462. LIMITATION ON INDIRECT COSTS FOR AGRICULTURAL RESEARCH, 
                    EDUCATION, AND EXTENSION PROGRAMS.

    (a) In General._Except as otherwise provided in law, 
indirect costs charged against a competitive agricultural 
research, education, or extension grant awarded under this Act 
or any other Act pursuant to authority delegated to the Under 
Secretary of Agriculture for Research, Education, and Economics 
shall not exceed [19 percent of the total Federal funds 
provided under the grant award, as determined by the Secretary] 
the negotiated indirect cost rate established for an 
institution by the cognizant Federal audit agency for the 
institution.
    (b) Exception.--Subsection (a) shall not apply to a grant 
awarded competitively under section 9 of the Small Business Act 
(15 U.S.C. 638).

SEC. 1462A. RESEARCH EQUIPMENT GRANTS.

    (a) In General.--The Secretary may make competitive grants 
for the acquisition of special purpose scientific research 
equipment for use in the food and agricultural sciences 
programs of eligible institutions described in subsection (b).
    (b) Eligible Institutions.--The Secretary may make a grant 
under this section to--
          (1) a college or university; or
          (2) a State cooperative institution.
    (c) Maximum Amount.--The amount of a grant made to an 
eligible institution under this section may not exceed 
$500,000.
    (d) Prohibition on Charge of Equipment as Indirect Costs.--
The cost of acquisition or depreciation of equipment purchased 
with a grant under this section shall not be--
          (1) charged as an indirect cost against another 
        Federal grant; or
          (2) included as part of the indirect cost pool for 
        purposes of calculating the indirect cost rate of an 
        eligible institution.
    (e) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $50,000,000 for 
each of fiscal years 2002 through 2006.

     authorization for appropriations for existing and certain new 
                     agricultural research programs

    Sec. 1463. (a) Notwithstanding any authorization for 
appropriations for agricultural research in any Act enacted 
prior to the date of enactment of this title, there are hereby 
authorized to be appropriated for the purposes of carrying out 
the provisions of this title, except sections 1417, 1419, 1420, 
and the competitive grants program provided for in section 
1414, and except that the authorization for moneys provided 
under the Act of March 2, 1887 (24 Stat. 440-442, as amended; 7 
U.S.C. 361a-361i), is excluded and is provided for in 
subsection (b) of this section, [$850,000,000 for each of the 
fiscal years 1991 through 2002] $1,500,000,000 for each of 
fiscal years 2002 through 2006.
    (b) Notwithstanding any authorization for appropriations 
for agricultural research at State agricultural experiment 
stations in any Act enacted prior to the date of enactment of 
this title, there are hereby authorized to be appropriated for 
the purpose of conducting agricultural research at State 
agricultural experiment stations pursuant to the Act of March 
2, 1887 (24 Stat. 440-442, as amended; 7 U.S.C. 361a-361i), 
$310,000,000 for each of the fiscal years 1991 through [2002] 
2006.
    (c) Notwithstanding any other provision of law effective 
beginning October 1, 1983, not less than 25 per centum of the 
total funds appropriated to the Secretary in any fiscal year 
for the conduct of the cooperative research program provided 
for under the Act of March 2, 1887, commonly known as the Hatch 
Act (7 U.S.C. 361a et seq.); the cooperative forestry research 
program provided for under the Act of October 10, 1962, 
commonly known as the McIntire-Stennis Act (16 U.S.C. 582a et 
seq.); the special and competitive grants programs provided for 
in sections 2(b) and 2(c) of the Act of August 4, 1965 (7 
U.S.C. 450i); the animal health research program provided for 
under sections 1433 and 1434 of this title; the native latex 
research programprovided for in the Native Latex 
Commercialization and Economic Development Act of 1978 (7 U.S.C. 178 et 
seq.); and the research provided for under various statutes for which 
funds are appropriated under the Agricultural Research heading or a 
successor heading, shall be appropriated for research at State 
agricultural experiment stations pursuant to the provision of the Act 
of March 2, 1887.

        authorization for appropriations for extension education

    Sec. 1464. Notwithstanding any authorization for 
appropriations for the Cooperative Extension Service in any Act 
enacted prior to the date of enactment of this title, there are 
hereby authorized to be appropriated for the purposes of 
carrying out the extension programs of the Department of 
Agriculture [$420,000,000 for fiscal year 1991, $430,000,000 
for fiscal year 1992, $440,000,000 for fiscal year 1993, 
$450,000,000 for fiscal year 1994, and $460,000,000 for each of 
fiscal years 1995 through 2002.] $500,000,000 for each of 
fiscal years 2003 through 2006.

           *       *       *       *       *       *       *


SEC. 1469A. AVAILABILITY OF COMPETITIVE GRANT FUNDS.

    Except as otherwise provided by law, funds made available 
to the Secretary to carry out a competitive agricultural 
research, education, or extension grant program under this or 
any other Act shall be available for obligation for a 2-year 
period beginning on October 1 of the fiscal year for which the 
funds are made available.

           *       *       *       *       *       *       *


SEC. 1473B. JOINT REQUESTS FOR PROPOSALS.

    (a) In General.--In carrying out any competitive 
agricultural research, education, or extension grant program 
authorized under this or any other Act, the Secretary may 
cooperate with 1 or more other Federal agencies (including the 
National Science Foundation) in issuing joint requests for 
proposals, awarding grants, and administering grants, for 
similar or related research, education, or extension projects 
or activities.
    (b) Transfer of Funds.--
          (1) Secretary.--The Secretary may transfer funds to, 
        or receive funds from, a cooperating Federal agency for 
        the purpose of carrying out the joint request for 
        proposals, making awards, or administering grants.
          (2) Cooperating agency.--The cooperating Federal 
        agency may transfer funds to, or receive funds from, 
        the Secretary for the purpose of carrying out the joint 
        request for proposals, making awards, or administering 
        grants.
          (3) Limitations.--Funds transferred or received under 
        this subsection shall be--
                  (A) used only in accordance with the laws 
                authorizing the appropriation of the funds; and
                  (B) made available by grant only to 
                recipients that are eligible to receive the 
                grant under the laws.
    (c) Administration.--
          (1) Secretary.--The Secretary may delegate authority 
        to issue requests for proposals, make grant awards, or 
        administer grants, in whole or in part, to a 
        cooperating Federal agency.
          (2) Cooperating federal agency.--The cooperating 
        Federal agency may delegate to the Secretary authority 
        to issue requests for proposals, make grant awards, or 
        administer grants, in whole or in part.
    (d) Regulations; Rates.--The Secretary and a cooperating 
Federal agency may agree to make applicable to recipients of 
grants--
          (1) the post-award grant administration regulations 
        and indirect cost rates applicable to recipients of 
        grants from the Secretary; or
          (2) the post-award grant administration regulations 
        and indirect cost rates applicable to recipients of 
        grants from thecooperating Federal agency.
    (e) Joint Peer Review Panels.--Subject to section 1413B, 
the Secretary and a cooperating Federal agency may establish 
joint peer review panels for the purpose of evaluating grant 
proposals.

                   supplemental and alternative crops

    Sec. 1473D. (a) Notwithstanding any other provision of law, 
during the period beginning October 1, 1986, and ending 
September 30, [2002] 2006, the Secretary shall develop and 
implement a research project for the development of 
supplemental and alternative crops, using such funds as are 
appropriated to the Secretary each fiscal year under this 
title.

           *       *       *       *       *       *       *


                    authorization for appropriations

    Sec. 1477. There is authorized to be appropriated 
$7,500,000 for each of the fiscal years 1991 through [2002] 
2006. Funds appropriated under this section or section 1476 may 
not be used to acquire or construct a building.

           *       *       *       *       *       *       *


                             appropriations

    Sec. 1483. (a) There are authorized to be appropriated, to 
implement the provisions of this subtitle, such sums not to 
exceed $10,000,000 for each of the fiscal years 1991 through 
[2002] 2006.
    (b) Funds appropriated under this section shall be 
allocated by the Secretary to eligible institutions for work to 
be done as mutually agreed upon between the Secretary and the 
eligible institution or institutions.

           *       *       *       *       *       *       *


                        Subtitle N--Biosecurity

             CHAPTER 1--AGRICULTURE INFRASTRUCTURE SECURITY

SEC. 1484. DEFINITIONS.

    In this chapter:
          (1) Agricultural research facility.--The term 
        ``agricultural research facility'' means a facility--
                  (A) at which agricultural research is 
                regularly carried out or proposed to be carried 
                out; and
                  (B) that is--
                          (i)(I) an Agricultural Research 
                        Service facility;
                          (II) a Forest Service facility; or
                          (III) an Animal and Plant Health 
                        Inspection Service facility;
                          (ii) a Federal agricultural facility 
                        in the process of being planned or 
                        being constructed; or
                          (iii) any other facility under the 
                        full control of the Secretary.
          (2) Commission.--The term ``Commission'' means the 
        Agriculture Infrastructure Security Commission 
        established under section 1486.
          (3) Fund.--The term ``Fund'' means the Agriculture 
        Infrastructure Security Fund Account established by 
        section 1485.

SEC. 1485. AGRICULTURE INFRASTRUCTURE SECURITY FUND.

    (a) Establishment.--There is established in the Treasury of 
the United States an account, to be known as the ``Agriculture 
Infrastructure Security Fund Account'', consisting of funds 
appropriated to, or deposited into, the Fund under subsection 
(c).
    (b) Purposes.--The purposes of the Fund are to provide 
funding to protect and strengthen the Federal food safety and 
agricultural infrastructure that--
          (1) safeguards against animal and plant diseases and 
        pests;
          (2) ensures the safety of the food supply; and
          (3) ensures sound science in support of food and 
        agricultural policy.
    (c) Deposits Into Fund.--
          (1) In general.--There are authorized to be 
        appropriated to the Fund such sums as are necessary for 
        each of fiscal years 2002 through 2006.
          (2) Contributions and other proceeds.--The Secretary 
        shall deposit into the Fund any funds received--
                  (A) as proceeds from the sale of assets under 
                subsection (e); or
                  (B) as gifts under subsection (f).
          (3) Availability of funds.--Amounts in the Fund shall 
        remain available until expended without further Act of 
        appropriation.
          (4) Additional funds.--Funds made available under 
        paragraph (1) shall be in addition to funds otherwise 
        available to the Secretary to receive gifts and 
        bequests or dispose of property (real, personal, or 
        intangible).
    (d) Expenditures From Fund.--
          (1) In general.--Subject to paragraph (2), on request 
        by the Secretary, the Secretary of the Treasury shall 
        transfer from the Fund to the Secretary, and the 
        Secretary shall accept and use without further 
        appropriation, such amounts as the Secretary determines 
        to be necessary to pay--
                  (A) the costs of planning, design, 
                development, construction, acquisition, 
                modernization, leasing, and disposal of 
                facilities, equipment, and technology used by 
                the Department in carrying out programs 
                relating to the purposes specified in 
                subsection (b), notwithstanding the Federal 
                Property and Administrative Services Act of 
                1949 (40 U.S.C. 471 et seq.) or any other law 
                that prescribes procedures for the procurement, 
                use, or disposal of property or services by a 
                Federal agency;
                  (B) the costs of specialized services 
                relating to the purposes specified in 
                subsection (b);
                  (C) the costs of cooperative arrangements 
                authorized to be entered into (notwithstanding 
                chapter 63 of title 31, United States Code) 
                with State, local and tribal governments, and 
                other public and private entities, to carry out 
                programs relating to the purposes specified in 
                subsection (b); and
                  (D) administrative costs incurred in carrying 
                out subparagraphs (A) through (C).
          (2) Limitations.--
                  (A) Federal employees.--Amounts in the Fund 
                shall not be used to create any new full or 
                part-time permanent Federal employee position.
                  (B) Administrative expenses.--Beginning in 
                fiscal year 2003, not more than 1 percent of 
                the amounts in the Fund on October 1 of a 
                fiscal year may be used in the fiscal year for 
                administrative expenses of the Secretary in 
                carrying out the activities described in 
                paragraph (1).
    (e) Sale of Assets.--
          (1) Disposal authority.--Notwithstanding the Federal 
        Property and Administrative Services Act of 1949 (40 
        U.S.C. 471 et seq.), the Secretary by sale may dispose 
        of all or any part of any right or title in land 
        (excluding National Forest System land), facilities, or 
        equipment in the full control of the Department 
        (including land and facilities at the Beltsville 
        Agricultural Research Center) used for the purposes 
        specified in subsection (b).
          (2) Disposition of proceeds.--Proceeds from any sale 
        conducted by the Secretary under paragraph (1) shall be 
        deposited into the Fund in accordance with subsection 
        (c)(2)(A).
    (f) Gifts.--
          (1) In general.--To carry out the purposes specified 
        in subsection (b), the Secretary may accept gifts and 
        bequests of funds, property (real, personal, and 
        intangible), equipment, services, and other in-kind 
        contributions from State, local, and tribal 
        governments, colleges and universities, individuals, 
        and other public and private entities.
          (2) Prohibited source.--
                  (A) In general.--For the purposes of this 
                subsection, the Secretary shall not consider a 
                State or local government, Indian tribe (as 
                defined in section 4 of the Indian Self-
                Determination and Education Assistance Act (25 
                U.S.C. 450b)), other public entity, or college 
                or university, to be a prohibited source under 
                any Department rule or policy that prohibits 
                the acceptance of gifts from individuals and 
                entities that do business with the Department.
                  (B) Exception.--Notwithstanding any 
                Department rule or policy that prohibits the 
                acceptance of gifts by the Department from 
                individuals or private entities that do 
                business with the Department or that, for any 
                other reason, are considered to be prohibited 
                sources, the Secretary may accept gifts under 
                this subsection if the Secretary determines 
                that it is in the public interest to accept the 
                gift.
          (3) Disposition of gifts.--The Secretary shall 
        deposit any gift of funds under this subsection into 
        the Fund in accordance with subsection (c)(2)(B).

SEC. 1486. AGRICULTURE INFRASTRUCTURE SECURITY COMMISSION.

    (a) Establishment.--The Secretary shall establish a 
commission to be known as the ``Agriculture Infrastructure 
Security Commission'' to carry out the duties described in 
subsection (f).
    (b) Membership.--
          (1) Appointment.--
                  (A) Voting members.--
                          (i) In general.--The Commission shall 
                        be composed of 15 voting members, 
                        appointed by the Secretary in 
                        accordance with clause (ii), based on 
                        nominations solicited from the public.
                          (ii) Qualifications.--The Secretary 
                        shall appoint members that--
                                  (I) represent a balance of 
                                the public and private sectors; 
                                and
                                  (II) have combined expertise 
                                in--
                                          (aa) facilities 
                                        development, 
                                        modernization, 
                                        construction, security, 
                                        consolidation, and 
                                        closure;
                                          (bb) plant diseases 
                                        and pests;
                                          (cc) animal diseases 
                                        and pests;
                                          (dd) food safety;
                                          (ee) biosecurity;
                                          (ff) the needs of 
                                        farmers and ranchers;
                                          (gg) public health;
                                          (hh) State, local, 
                                        and tribal government; 
                                        and
                                          (ii) any other area 
                                        related to agriculture 
                                        infrastructure 
                                        security, as determined 
                                        by the Secretary.
                  (B) Nonvoting members.--The Commission shall 
                be composed of the following nonvoting members:
                          (i) The Secretary.
                          (ii) 4 representatives appointed by 
                        the Secretary of Health and Human 
                        Services, 1 each from--
                                  (I) the Public Health 
                                Service;
                                  (II) the National Institutes 
                                of Health;
                                  (III) the Centers for Disease 
                                Control and Prevention; and
                                  (IV) the Food and Drug 
                                Administration.
                          (iii) 1 representative appointed by 
                        the Attorney General.
                          (iv) 1 representative appointed by 
                        the Director of Homeland Security.
                          (v) Not more than 4 representatives 
                        of the Department appointed by the 
                        Secretary.
          (2) Date of appointment.--The appointment of each 
        member of the Commission shall be made not later than 
        90 days after the date of enactment of this subtitle.
    (c) Term; Vacancies.--
          (1) Term.--The term of office of a member of the 
        Commission shall be 4 years, except that the members 
        initially appointed shall be appointed to serve 
        staggered terms (as determined by the Secretary).
          (2) Vacancies.--A vacancy on the Commission shall be 
        filled in the same manner as the original appointment 
        was made.
    (d) Meetings.--
          (1) In general.--The Commission shall meet at the 
        call of--
                  (A) the Chairperson;
                  (B) a majority of the voting members of the 
                Commission; or
                  (C) the Secretary.
          (2) Federal advisory committee act.--
                  (A) In general.--The Federal Advisory 
                Committee Act (5 U.S.C. App.) and title XVIII 
                of the Food and Agriculture Act of 1977 (7 
                U.S.C. 2281 et seq.) shall not apply to the 
                Commission.
                  (B) Open meetings; records.--Subject to 
                subparagraph (C)--
                          (i) a meeting of the Commission shall 
                        be--
                                  (I) publicly announced in 
                                advance; and
                                  (II) open to the public; and
                          (ii) the Commission shall--
                                  (I) keep detailed minutes of 
                                each meeting and other 
                                appropriate records of the 
                                activities of the Commission; 
                                and
                                  (II) make the minutes and 
                                records available to the public 
                                on request.
                  (C) Exception.--When required in the interest 
                of national security--
                          (i) the Chairperson may choose not to 
                        give public notice of a meeting;
                          (ii) the Chairperson may close all or 
                        a portion of any meeting to the public, 
                        and the minutes of the meeting, or 
                        portion of a meeting, shall not be made 
                        available to the public; and
                          (iii) by majority vote, the 
                        Commission may redact the minutes of a 
                        meeting that was open to the public.
    (e) Chairperson.--The Secretary shall select a Chairperson 
from among the voting members of the Commission.
    (f) Duties.--
          (1) In general.--The Commission shall--
                  (A) advise the Secretary on the uses of the 
                Fund;
                  (B) review all agricultural research 
                facilities for--
                          (i) research importance; and
                          (ii) importance to agriculture 
                        infrastructure security;
                  (C) identify any agricultural research 
                facility that should be closed, realigned, 
                consolidated, or modernized to carry out the 
                research agenda of the Secretary and protect 
                agriculture infrastructure security;
                  (D) develop recommendations concerning 
                agricultural research facilities; and
                  (E)(i) evaluate the agricultural research 
                facilities acquisition and modernization system 
                (including acquisitions by gift, grant, or any 
                other form of agreement) used by the 
                Department; and
                  (ii) based on the evaluation, recommend 
                improvements to the system.
          (2) Strategic plan.--To assist the Commission in 
        carrying out the duties described in paragraph (1), the 
        Commission shall use the 10-year strategic plan 
        prepared by the Strategic Planning Task Force 
        established under section 4 of the Research Facilities 
        Act (7 U.S.C. 390b).
          (3) Report.--
                  (A) In general.--Not later than 240 days 
                after the date of enactment of this subtitle, 
                and each June 1 thereafter, the Commission 
                shall prepare and submit to the Secretary, the 
                Committee on Agriculture and the Committee on 
                Appropriations of the House of Representatives, 
                and the Committee on Agriculture, Nutrition, 
                and Forestry and the Committee on 
                Appropriations of the Senate, a report on the 
                findings and recommendations under paragraph 
                (1).
                  (B) Written response.--Not later than 90 days 
                after the date of receipt of a report from the 
                Commission under subparagraph (A), the 
                Secretary shall provide to the Commission a 
                written response concerning the manner and 
                extent to which the Secretary will implement 
                the recommendations in the report.
                  (C) Public availability.--
                          (i) In general.--Subject to clause 
                        (ii), the report submitted by the 
                        Commission, and any response made by 
                        the Secretary, under this subsection 
                        shall be available to the public.
                          (ii) Exception.--
                                  (I) National security.--The 
                                Commission or the Secretary may 
                                determine that any report or 
                                response, or any portion of a 
                                report or response, shall not 
                                be publicly released in the 
                                interest of national security.
                                  (II) Freedom of information 
                                act.--On such a determination, 
                                the report or response, a 
                                portion of the report or 
                                response, or any records 
                                relating to the report or 
                                response, shall not be released 
                                under section 552 of title 5, 
                                United States Code.
    (g) Commission Personnel Matters.--
          (1) Compensation of members.--
                  (A) Non-federal employees.--A voting member 
                of the Commission who is not a regular full-
                time employee of the Federal Government shall, 
                while attending meetings of the Commission or 
                otherwise engaged in the business of the 
                Commission (including travel time), be entitled 
                to receive compensation at a rate fixed by the 
                Secretary, but not exceeding the daily 
                equivalent of the annual rate specified at the 
                time of such service under GS-15 of the General 
                Schedule established under section 5332 of 
                title 5, United States Code.
                  (B) Travel expenses.--A voting member of the 
                Commission shall be allowed travel expenses, 
                including per diem in lieu of subsistence, at 
                rates authorized for an employee of an agency 
                under subchapter I of chapter 57 of title 5, 
                United States Code, while away from the home or 
                regular place of business of the member in the 
                performance of the duties of the Commission.
          (2) Staff.--The Secretary shall provide the 
        Commission with any personnel and other resources as 
        the Secretary determines appropriate.
    (h) Funding.--
          (1) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this section 
        such sums as are necessary for each of fiscal years 
        2002 through 2006.
          (2) Agriculture infrastructure security fund.--For 
        the purpose of establishing the Commission, the 
        Secretary shall use such sums from the Fund as the 
        Secretary determines to be appropriate.

                 CHAPTER 2--OTHER BIOSECURITY PROGRAMS

SEC. 1487. SPECIAL AUTHORIZATION FOR BIOSECURITY PLANNING AND RESPONSE.

    (a) Authorization of Appropriations.--In addition to 
amounts for agricultural research, extension, and education 
under this Act, there are authorized to be appropriated for 
agricultural research, education, and extension activities for 
biosecurity planning and response such sums as are necessary 
for each of fiscal years 2002 through 2006.
    (b) Use of Funds.--Using any authority available to the 
Secretary, the Secretary shall use funds made available under 
this section to carry out agricultural research, education, and 
extension activities (including through competitive grants) 
necessary--
          (1) to reduce the vulnerability of the United States 
        food and agricultural system to chemical or biological 
        attack;
          (2) to continue joint research initiatives between 
        the Agricultural Research Service, universities, and 
        industry on counterbioterrorism efforts (including 
        continued funding of a consortium in existence on the 
        date of enactment of this subtitle of which the 
        Agricultural Research Service and universities are 
        members);
          (3) to make competitive grants to universities and 
        qualified research institutions for research on 
        counterbioterrorism; and
          (4) to counter or otherwise respond to chemical or 
        biological attack.

SEC. 1488. AGRICULTURE BIOTERRORISM RESEARCH FACILITIES.

    (a) Definitions.--In this section:
          (1) Construction.--The term ``construction'' 
        includes--
                  (A) the construction of new buildings; and
                  (B) the expansion, renovation, remodeling, 
                and alteration of existing buildings.
          (2) Cost.--
                  (A) In general.--The term ``cost'' means any 
                construction cost, including architects' fees.
                  (B) Exclusions.--The term ``cost'' does not 
                include the cost of--
                          (i) acquiring land or an interest in 
                        land; or
                          (ii) constructing any offsite 
                        improvement.
          (3) Eligible entity.--The term ``eligible entity'' 
        means a college or university that--
                  (A) is a land grant college or university (as 
                defined in section 1404 of the National 
                Agricultural Research, Extension, and Teaching 
                Policy Act of 1977 (7 U.S.C. 3103)); and
                  (B) as determined by the Secretary, has--
                          (i) demonstrated expertise in the 
                        area of animal and plant diseases;
                          (ii) substantial animal and plant 
                        diagnostic laboratories; and
                          (iii) well-established working 
                        relationships with--
                                  (I) the agricultural 
                                industry; and
                                  (II) farm and commodity 
                                organizations.
    (b) Modernization and Construction of Facilities.--
          (1) In general.--To enhance the security of 
        agriculture in the United States against threats posed 
        by bioterrorism, the Secretary shall make construction 
        grants, on a competitive basis, to eligible entities.
          (2) Limitation on grants.--An eligible entity shall 
        not receive grant funds under this section that, in any 
        fiscal year, exceed $10,000,000.
    (c) Requirements for Grants.--
          (1) In general.--The Secretary shall make a grant to 
        an eligible entity under this section only if, with 
        respect to any facility constructed using grant funds, 
        the eligible entity--
                  (A) submits to the Secretary, in such form, 
                in such manner, and containing such agreements, 
                assurances, and information as the Secretary 
                may require, an application for the grant;
                  (B) is determined by the Secretary to be 
                competent to engage in the type of research for 
                which the facility is proposed to be 
                constructed;
                  (C) provides such assurances as the Secretary 
                determines to be satisfactory that--
                          (i) for not less than 20 years after 
                        the date of completion of the facility, 
                        the facility shall be used for the 
                        purposes of the research for which the 
                        facility was constructed, as described 
                        in the grant application;
                          (ii) sufficient funds are available 
                        to pay the non-Federal share of the 
                        cost of constructing the facility;
                          (iii) sufficient funds will be 
                        available, as of the date of completion 
                        of the construction, for the effective 
                        use of the facility for the purposes of 
                        the research for which the facility was 
                        constructed; and
                          (iv) the proposed construction--
                                  (I) will increase the 
                                capability of the eligible 
                                entity to conduct research for 
                                which the facility was 
                                constructed; or
                                  (II) is necessary to improve 
                                or maintain the quality of the 
                                research of the eligible 
                                entity;
                  (D) meets such reasonable qualifications as 
                may be established by the Secretary with respect 
                to--
                          (i) the relative scientific and 
                        technical merit of the applications, 
                        and the relative effectiveness of 
                        facilities proposed to be constructed, 
                        in expanding the quality of, and the 
                        capacity of eligible entities to carry 
                        out, biosecurity research;
                          (ii) the quality of the research to 
                        be carried out in each facility 
                        constructed;
                          (iii) the need for the research 
                        activities to be carried out within the 
                        facility as those activities relate to 
                        research needs of the United States in 
                        securing, and ensuring the safety of, 
                        the food supply of the United States;
                          (iv) the age and condition of 
                        existing research facilities of the 
                        eligible entity; and
                          (v) biosafety and biosecurity 
                        requirements necessary to protect 
                        facility staff, members of the public, 
                        and the food supply; and
                  (E) has demonstrated a commitment to 
                enhancing and expanding the research 
                productivity of the eligible entity.
          (2) Priority.--In providing grants under this 
        section, the Secretary shall give priority to an 
        eligible entity that, as determined by the Secretary, 
        has demonstrated expertise in--
                  (A) animal and plant disease prevention;
                  (B) pathogen and toxin mitigation;
                  (C) cereal disease resistance;
                  (D) grain milling and processing;
                  (E) livestock production practices;
                  (F) vaccine development;
                  (G) meat processing;
                  (H) pathogen detection and control; or
                  (I) food safety.
    (d) Amount of Grant.--The amount of a grant awarded under 
this section shall be determined by the Secretary.
    (e) Federal Share.--The Federal share of the cost of any 
construction carried out using funds from a grant provided 
under this section shall not exceed 50 percent.
    (f) Guidelines.--Not later than 180 days after the date of 
enactment of this subtitle, the Secretary shall issue 
guidelines with respect to the provision of grants under this 
section.
    (g) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $100,000,000 for 
each of fiscal years 2003 through 2005.

           *       *       *       *       *       *       *


          Subtitle 0--Land Grant Institutions in Insular Areas

SEC. 1489. DISTANCE EDUCATION GRANTS FOR INSULAR AREAS.

    (a) In General.--The Secretary may make competitive or 
noncompetitive grants to State cooperative institutions in 
insular areas to strengthen the capacity of State cooperative 
institutions to carry out distance food and agricultural 
education programs using digital network technologies.
    (b) Use.--Grants made under this section shall be used--
          (1) to acquire the equipment, instrumentation, 
        networking capability, hardware and software, digital 
        network technology, and infrastructure necessary to 
        teach students and teachers about technology in the 
        classroom;
          (2) to develop and provide educational services 
        (including faculty development) to prepare students or 
        faculty seeking a degree or certificate that is 
        approved by the State or a regional accrediting body 
        recognized by the Secretary of Education;
          (3) to provide teacher education, library and media 
        specialist training, and preschool and teacher aid 
        certification to individuals who seek to acquire or 
        enhance technology skills in order to use technology in 
        the classroom or instructional process;
          (4) to implement a joint project to provide education 
        regarding technology in the classroom with a local 
        educational agency, community-based organization, 
        national nonprofit organization, or business, including 
        a minority business or abusiness located in a HUB Zone 
        established under section 31 of the Small Business Act 
        (15 U.S.C. 657a); or
          (5) to provide leadership development to 
        administrators, board members, and faculty of eligible 
        institutions with institutional responsibility for 
        technology education.
    (c) Limitation on Use of Grant Funds.--Funds provided under 
this section shall not be used for the planning, acquisition, 
construction, rehabilitation, or repair of a building or 
facility.
    (d) Administration of Program.--The Secretary may carry out 
this section in a manner that recognizes the different needs 
and opportunities for State cooperative institutions in the 
Atlantic and Pacific Oceans.
    (e) Matching Requirement.--
          (1) In general.--The Secretary may establish a 
        requirement that a State cooperative institution 
        receiving a grant under this section shall provide 
        matching funds from non-Federal sources in an amount 
        equal to not less than 50 percent of the grant.
          (2) Waivers.--If the Secretary establishes a matching 
        requirement under paragraph (1), the requirement shall 
        include an option for the Secretary to waive the 
        requirement for an insular area State cooperative 
        institution for any fiscal year if the Secretary 
        determines that the institution will be unlikely to 
        meet the matching requirement for the fiscal year.
    (f) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $4,000,000 for 
each of fiscal years 2002 through 2006.

           *       *       *       *       *       *       *


  NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND TEACHING POLICY ACT 
                          AMENDMENTS OF 1985

           *       *       *       *       *       *       *


  authorization for appropriations for federal agricultural research 
                               facilities

    Sec. 1431. There are authorized to be appropriated for each 
of the fiscal years 1991 through [2002] 2006, such sums as may 
be necessary for the planning, construction, acquisition, 
alteration, and repair of buildings and other public 
improvements, including the cost of acquiring or obtaining 
rights to use land, of or used by the Agricultural Research 
Service, except that--
          (1) the cost of planning any one facility shall not 
        exceed $500,000; and
          (2) the total cost of any one facility shall not 
        exceed $5,000,000.

           *       *       *       *       *       *       *


                        RESEARCH FACILITIES ACT

           *       *       *       *       *       *       *


SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--Subject to subsection (b), there are 
authorized to be appropriated such sums as are necessary for 
each of fiscal years 1996 through [2002] 2006 for the study, 
plan, design, structure, and related costs of agricultural 
research facilities under this Act.
    (b) Allowable Administrative Costs.--Not more than 3 
percent of the funds made available for any project for an 
agricultural research facility shall be available for 
administration of the project.

           *       *       *       *       *       *       *


                            SMITH-LEVER ACT

           *       *       *       *       *       *       *


    Sec. 3.1. (a) There are hereby authorized to be 
appropriated for the purposes of this Act such sums as Congress 
may from time to time determine to be necessary.

           *       *       *       *       *       *       *

          (2) There is authorized to be appropriated for the 
        fiscal year ending June 30, 1971, and for each fiscal 
        year thereafter, for payment to the Virgin Islands and 
        Guam, $100,000 each, which sums shall be in addition to 
        the sums appropriated for the several States of the 
        United States and Puerto Rico under the provisions of 
        this section. The amount paid by the Federal Government 
        to the Virgin Islands and Guam pursuant to this paragraph 
        shall not exceed during any fiscal year, except the fiscal 
        years ending, June 30, 1971, and June 30, 1972, when such 
        amount may be used to pay the total cost of providing 
        services pursuant to this Act, the amount available and 
        budgeted for expenditure by the Virgin Islands and Guam 
        for the purposes of this Act.
          [(3) There are authorized to be appropriated for the 
        fiscal year ending June 30, 1996, and for each fiscal 
        year thereafter, for payment on behalf of the 1994 
        Institutions (as defined in section 532 of the Equity 
        in Educational Land-Grant Status Act of 1994), 
        $5,000,000 for the purposes set forth in section 2. 
        Such sums shall be in addition to the sums appropriated 
        for the several States and Puerto Rico, the Virgin 
        Islands, and Guam under the provisions of this section. 
        Such sums shall be distributed on the basis of a 
        competitive application process to be developed and 
        implemented by the Secretary and paid by the Secretary 
        to 1994 Institutions (in accordance with regulations 
        that the Secretary may promulgate) and may be 
        administered by the 1994 Institutions through 
        cooperative agreements with colleges and universities 
        eligible to receive funds under the Act of July 2, 1862 
        (12 Stat. 503, chapter 130; 7 U.S.C. 301 et seq.), or 
        the Act of August 30, 1890 (26 Stat. 419, chapter 841; 
        7 U.S.C. 321 et seq.), including Tuskegee University, 
        located in any State.]
          (3) Extension at 1994 institutions.--
                  (A) In general.--There are authorized to be 
                appropriated for fiscal year 2002 and each 
                subsequent fiscal year, for payment to 1994 
                Institutions (as defined in section 532 of the 
                Equity in Educational Land-Grant Status Act of 
                1994 (7 U.S.C. 301 note; Public Law 103-382)), 
                such sums as are necessary for the purposes set 
                forth in section 2, to remain available until 
                expended.
                  (B) Distribution.--Amounts made available 
                under subparagraph (A)--
                          (i) shall be distributed on the basis 
                        of a formula to be developed and 
                        implemented by the Secretary, in 
                        consultation with the 1994 
                        Institutions; and
                          (ii) may include payments for 
                        extension activities carried out during 
                        1 or more fiscal years.
                  (C) Cooperative agreement.--In accordance 
                with such regulations as the Secretary may 
                promulgate, a 1994 Institution may administer 
                funds received under this paragraph through a 
                cooperative agreement with an 1862 Institution 
                or an 1890 Institution (as those terms are 
                defined in section 2 of the Agricultural 
                Research, Extension, and Education Reform Act 
                of 1998 (7 U.S.C. 7601)).
    (c) Any sums made available by the Congress or further 
development of cooperative extension work in addition to those 
referred to in subsection (b) hereof shall be distributed as 
follows:
          (1) Four per centum of the sum so appropriated for 
        each fiscal year shall be allotted to the Secretary of 
        Agriculture for administrative, technical, and other 
        services, and for coordinating the extension work of 
        the Department and the several States, Territories and 
        possessions.

           *       *       *       *       *       *       *

    (e) Matching Funds.--
          (1) Requirement.--Except as provided in paragraph (4) 
        and subsection (f), no allotment shall be made to a 
        State under subsection (b) or (c), and no payments from 
        the allotment shall be made to a State, in excess of 
        the amount that the State makes available out of non-
        Federal funds for cooperative extension work.
          (2) Failure to provide matching funds.--If a State 
        fails to comply with the requirement to provide 
        matching funds for a fiscal year under paragraph (1), 
        the Secretary of Agriculture shall withhold from 
        payment to the State for that fiscal year an amount 
        equal to the difference between--
                  (A) the amount that would be allotted and 
                paid to the State under subsections (b) and (c) 
                (if the full amount of matching funds were 
                provided by the State); and
                  (B) the amount of matching funds actually 
                provided by the State.
          (3) Reapportionment.--
                  (A) In general.--The Secretary of Agriculture 
                shall reapportion amounts withheld under 
                paragraph (2) for a fiscal year among the 
                States satisfying the matching requirement 
                for that fiscal year.
                  (B) Matching requirement.--Any 
                reapportionment of funds under this paragraph 
                shall be subject to the matching requirement 
                specified in paragraph (1).
          [(4) Territories.--In lieu of the matching funds 
        requirement of paragraph (1), the Commonwealth of 
        Puerto Rico, the Virgin Islands, and Guam shall be 
        subject to the same matching funds requirements as 
        those applicable to an eligible institution under 
        section 1449 of the National Agricultural Research, 
        Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
        3222d).]
          (4) Exception for insular areas.--
                  (A) In general.--Effective beginning for 
                fiscal year 2003, in lieu of the matching funds 
                requirement of paragraph (1), the insular areas 
                of the Commonwealth of Puerto Rico, Guam, and 
                the Virgin Islands of the United States shall 
                provide matching funds from non-Federal sources 
                in an amount equal to not less than 50 percent 
                of the formula funds distributed by the 
                Secretary to each of the insular areas, 
                respectively, under this section.
                  (B) Waivers.--The Secretary may waive the 
                matching fund requirement of subparagraph (A) 
                for any fiscal year if the Secretary determines 
                that the government of the insular area will be 
                unlikely to meet the matching requirement for 
                the fiscal year.
    (f) Matching Funds Exception for 1994 Institutions.--There 
shall be no matching requirement for funds made available to a 
1994 Institution pursuant to subsection (b)(3).
    (g)(1) The Secretary of Agriculture may conduct 
educational, instructional, demonstration, and publication 
distribution programs and enter into cooperative agreements 
with private nonprofit and profit organizations and individuals 
to share the cost of such programs through contributions from 
private sources as provided in this subsection.
    (2) The Secretary may receive contributions under this 
subsection from private sources for the purposes described in 
paragraph (1) and provide matching funds in an amount not 
greater than 50 percent of such contributions.
    [(h) Multistate Cooperative Extension Activities.--
          [(1) In general.--Not less than the applicable 
        percentage specified under paragraph (2) of the amounts 
        that are paid to a State under subsections (b) and (c) 
        during a fiscal year shall be expended by States for 
        cooperative extension activities in which 2 or more 
        States cooperate to solve problems that concern more 
        than 1 State (referred to in this subsection as 
        ``multistate activities'').
          [(2) Applicable percentages.--
                  [(A) 1997 expenditures on multistate 
                activities.--Of the Federal formula funds that 
                were paid to each State for fiscal year 1997 
                under subsections (b) and (c), the Secretary of 
                Agriculture shall determine the percentage that 
                the State expended for multistate activities.
                  [(B) Required expenditures on multistate 
                activities.--Of the Federal formula funds that 
                are paid to each State for fiscal year 2000 and 
                each subsequent fiscal year under subsections 
                (b) and (c), the State shall expend for the 
                fiscal year for multistate activities a 
                percentage that is at least equal to the lesser 
                of--
                          [(i) 25 percent; or
                          [(ii) twice the percentage for the 
                        State determined under subparagraph 
                        (A).
                  [(C) Reduction by secretary.--The Secretary 
                may reduce the minimum percentage required to 
                be expended for multistate activities under 
                subparagraph (B) by a State in a case of 
                hardship, infeasibility, or other similar 
                circumstance beyond the control of the State, 
                as determined by the Secretary.
                  [(D) Plan of work.--The State shall include 
                in the plan of work of the State required under 
                section 4 a description of the manner in which 
                the State will meet the requirements of this 
                paragraph.
          [(3) Applicability.--This subsection does not apply 
        to funds provided--
                  [(A) by a State or local government pursuant 
                to a matching requirement;
                  [(B) to a 1994 Institution (as defined in 
                section 532 of the Equity in Educational Land-
                Grant Status Act of 1994 (Public Law 103-382; 7 
                U.S.C. 301 note)); or
                  [(C) to the Commonwealth of Puerto Rico, the 
                Virgin Islands, or Guam.]
    (h) Multistate Cooperative Extension Activities.--
          (1) Definition of multistate activity.--In this 
        subsection, the term ``multistate activity'' means a 
        cooperative extension activity in which 2 or more 
        States cooperate to resolve problems that concern more 
        than 1 State.
          (2) Requirement.--
                  (A) In general.--To receive funding under 
                subsections (b) and (c) for a fiscal year, a 
                State, must have expended on multistate 
                activities, in the preceding fiscal year, an 
                amount equivalent to not less than 25 percent 
                of the funds paid to the State under 
                subsections (b) and (c) for the preceding 
                fiscal year.
                  (B) Determination of amount.--In determining 
                compliance with subparagraph (A), the Secretary 
                shall include all cooperative extension funds 
                expended by the State in the preceding fiscal 
                year, including Federal, State, and local 
                funds.
          (3) Reduction of percentage.--The Secretary may 
        reduce the minimum percentage required to be expended 
        for multistate activities under paragraph (2) by a 
        State in a case of hardship, unfeasibility, or other 
        similar circumstances beyond the control of the State, 
        as determined by the Secretary.
          (4) Plan of work.--The State shall include in the 
        plan of work of the State required under section 4 a 
        description of the manner in which the State will meet 
        the requirements of this subsection.
          (5) Applicability.--This subsection does not apply to 
        funds provided--
                  (A) to a 1994 Institution (as defined in 
                section 532 of the Equity in Educational Land-
                Grant Status Act of 1994 (7 U.S.C. 301 note; 
                Public Law 103-382)); or
                  (B) to the Commonwealth of Puerto Rico, the 
                Virgin Islands, or Guam.
    [(i) Merit Review.--
          [(1) Review required.--Effective October 1, 1999, 
        extension activity carried out under subsection (h) 
        shall be subject to merit review.
          [(2) Other requirements.--An extension activity for 
        which merit review is conducted under paragraph (1) 
        shall be considered to have satisfied the requirements 
        for review under section 103(e) of the Agricultural 
        Research, Extension, and Education Reform Act of 1998.]
    (i) Integrated Research and Extension Activities.--
          (1) In general.--
                  (A) Requirement.--To receive funding under 
                this Act and subsections (b) and (c) of section 
                3 of the Smith-Lever Act (7 U.S.C. 343) for a 
                fiscal year, a State must have expended on 
                activities that integrate cooperative research 
                and extension (referred to in this section as 
                ``integrated activities''), in the preceding 
                fiscal year, an amount equivalent to not less 
                than 25 percent of the funds paid to the State 
                under this section and subsections (b) and (c) 
                of section 3 of the Smith-Lever Act (7 U.S.C. 
                343) for the preceding fiscal year.
                  (B) Determination of amount.--In determining 
                compliance with subparagraph (A), the Secretary 
                shall include all cooperative research and 
                extension funds expended by the State in the 
                prior fiscal year, including Federal, State, 
                and local funds.
          (2) Reduction of percentage.--The Secretary may 
        reduce the minimum percentage required to be expended 
        for integrated activities under paragraph (1) by a 
        State in a case of hardship, unfeasibility, or other 
        similar circumstances beyond the control of the State, 
        as determined by the Secretary.
          (3) Plan of work.--The State shall include in the 
        plan of work of the State required under section 7 of 
        this Act and under section 4 of the Smith-Lever Act (7 
        U.S.C. 344), as applicable, a description of the manner 
        in which the State will meet the requirements of this 
        subsection.
          (4) Applicability.--This subsection does not apply to 
        funds provided--
                  (A) to a 1994 Institution (as defined in 
                section 532 of the Equity in Educational Land-
                Grant Status Act of 1994 (7 U.S.C. 301 note; 
                Public Law 103-382)); or
                  (B) to the Commonwealth of Puerto Rico, the 
                Virgin Islands, or Guam.
          (5) Relationship to other requirements.--Funds 
        described in paragraph (1)(B) that a State uses to 
        calculate the required amount of expenditures for 
        integrated activities under paragraph (1)(A) may also 
        be used in the same fiscal year to calculate the amount 
        of expenditures for multistate activities required 
        under subsection (c)(3) of this section and section 
        3(h) of the Smith-Lever Act (7 U.S.C. 343(h)).
    (j) Integration of Research and Extension.--Section 3(i) of 
the Hatch Act of 1887 (7 U.S.C. 361c(i)) shall apply to amounts 
made available to carry out this Act.

           *       *       *       *       *       *       *


FEDERAL CROP INSURANCE ACT

           *       *       *       *       *       *       *


SEC. 524. EDUCATION AND RISK MANAGEMENT ASSISTANCE.

    (a) Education Assistance.--
          (1) In general.--Subject to the amounts made 
        available under paragraph (4)--
                  (A) the Corporation shall carry out the 
                program established under paragraph (2); and
                  (B) the Secretary, acting through the 
                Cooperative State Research, Education, and 
                Extension Service, shall carry out the program 
                established under paragraph (3).
          (2) Education and information.--The Corporation shall 
        establish a program under which crop insurance 
        education and information is provided to producers in 
        States in which (as determined by the Secretary)--
                  (A) there is traditionally, and continues to 
                be, a low level of Federal crop insurance 
                participation and availability; and
                  (B) producers are underserved by the Federal 
                crop insurance program.
          (3) Partnerships for risk management education.--
                  [(A) Authority.--The Secretary, acting 
                through the Cooperative State Research, 
                Education, and Extension Service, shall 
                establish a program under which competitive 
                grants are made to qualified public and private 
                entities (including land grant colleges, 
                cooperative extension services, and colleges or 
                universities), as determined by the Secretary, 
                for the purpose of educating agricultural 
                producers about the full range of risk 
                management activities, including futures, 
                options, agricultural trade options, crop 
                insurance, cash forward contracting, debt 
                reduction, production diversification, farm 
                resources risk reduction, and other risk 
                management strategies.]
                  (A) Authority.--The Secretary, acting through 
                the Cooperative State Research, Education, and 
                Extension Service, shall establish a program 
                under which competitive grants are made to 
                qualified public and private entities 
                (including land-grant colleges and 
                universities, cooperative extension services, 
                colleges or universities, and community 
                colleges), as determined by the Secretary, for 
                the purpose of--
                          (i) educating producers generally 
                        about the full range of risk management 
                        activities, including futures, options, 
                        agricultural trade options, crop 
                        insurance, cash forward contracting, 
                        debt reduction, production 
                        diversification, farm resources risk 
                        reduction, and other risk management 
                        strategies; or
                          (ii) educating beginning farmers and 
                        ranchers--
                                  (I) in the areas described in 
                                clause (i); and
                                  (II) in risk management 
                                strategies, as part of programs 
                                that are specifically targeted 
                                at beginning farmers and 
                                ranchers.
                  (B) Basis for grants.--A grant under this 
                paragraph shall be awarded on the basis of 
                merit and shall be subject to peer or merit 
                review.
                  (C) Obligation period.--Funds for a grant 
                under this paragraph shall be available to the 
                Secretary for obligation for a 2-year period.

           *       *       *       *       *       *       *

          (2) Uses.--A producer may use cost share assistance 
        provided under this subsection to--
                  (A) construct or improve--
                          (i) watershed management structures; 
                        or
                          (ii) irrigation structures;
                  (B) plant trees to form windbreaks or to 
                improve water quality;
                  (C) mitigate financial risk through 
                production diversification or resource 
                conservation practices, including--
                          (i) soil erosion control;
                          (ii) integrated pest management; or
                          (iii) transition to organic farming;
                  (D) enter into futures, hedging, or options 
                contracts in a manner designed to help reduce 
                production, price, or revenue risk;
                  (E) enter into agricultural trade options as 
                a hedging transaction to reduce production, 
                price, or revenue risk; or
                  (F) conduct any other activity related to the 
                activities described in subparagraphs (A) 
                through (E), as determined by the Secretary.
          [(2)](3) Payment limitation.--The total amount of 
        payments made to a person (as defined in section 
        1001(5) of the Food Security Act (7 U.S.C. 1308(5))) 
        under this subsection for any year may not exceed 
        $50,000.
          [(3)](4) Commodity credit corporation.--
                  (A) In general.--The Secretary shall carry 
                out this subsection through the Commodity 
                Credit Corporation.
                  (B) Funding.--The Commodity Credit 
                Corporation shall make available to carry out 
                this subsection $10,000,000 for fiscal year 
                2001 and each subsequent fiscal year.

           *       *       *       *       *       *       *


SEC. 532. DEFINITION.

    As used in this part, the term ``1994 institutions'' means 
any one of the following colleges:
          [(1) Bay Mills Community College.
          [(2) Blackfeet Community College.
          [(3) Cheyenne River Community College.
          [(4) D-Q University.
          [(5) Dulknife Memorial College.
          [(6) Fond Du Lac Tribal and Community College.
          [(7) Fort Belknap Community College.
          [(8) Fort Berthold Community College.
          [(9) Fort Peck Community College.
          [(10) LacCourte Oreilles Ojibwa Community College.
          [(11) Little Big Horn Community College.
          [(12) Little Hoop Community College.
          [(13) Nebraska Indian Community College.
          [(14) Northwest Indian College.
          [(15) Oglala Lakota College.
          [(16) Salish Kootenai College.
          [(17) Sinte Gleska University.
          [(18) Sisseton Wahpeton Community College.
          [(19) Standing Rock College.
          [(20) Stonechild Community College.
          [(21) Turtle Mountain Community College.
          [(22) Navaho Community College.
          [(23) United Tribes Technical College.
          [(24) Southwest Indian Polytechnic Institute.
          [(25) Institute of American Indian and Alaska Native 
        Culture and Arts Development.
          [(26) Crowpoint Institute of Technology.
          [(27) Haskell Indian Junior College.
          [(28) Leech Lake Tribal College.
          [(29) College of the Menominee Nation.
          [(30) Little Priest Tribal College.]
          (1) Bay Mills Community College.
          (2) Blackfeet Community College.
          (3) Cankdeska Cikana Community College.
          (4) College of Menominee Nation.
          (5) Crownpoint Institute of Technology.
          (6) D-Q University.
          (7) Dine *AE1 College.
          (8) Dull Knife Memorial College.
          (9) Fond du Lac Tribal and Community College.
          (10) Fort Belknap College.
          (11) Fort Berthold Community College.
          (12) Fort Peck Community College.
          (13) Haskell Indian Nations University.
          (14) Institute of American Indian and Alaska Native 
        Culture and Arts Development.
          (15) Lac Courte Oreilles Ojibwa Community College.
          (16) Leech Lake Tribal College.
          (17) Little Big Horn College.
          (18) Little Priest Tribal College.
          (19) Nebraska Indian Community College.
          (20) Northwest Indian College.
          (21) Oglala Lakota College.
          (22) Salish Kootenai College.
          (23) Sinte Gleska University.
          (24) Sisseton Wahpeton Community College.
          (25) Si Tanka/Huron University.
          (26) Sitting Bull College.
          (27) Southwestern Indian Polytechnic Institute.
          (28) Stone Child College.
          (29) Turtle Mountain Community College.
          (30) United Tribes Technical College.
          (31) White Earth Tribal and Community College.

           *       *       *       *       *       *       *


SEC. 533. LAND GRANT STATUS FOR 1994 INSTITUTIONS.

    (a) In General.--

           *       *       *       *       *       *       *

          (3) Accrediation.--To receive funding under sections 
        [534 and 535] 534, 535, and 536 [of this note], a 1994 
        Institution shall certify to the Secretary that the 
        1994 Institution.--

           *       *       *       *       *       *       *

    (b) Authorization of Appropriations.--There are authorized 
to be appropriated [$4,600,000 for each of fiscal years 1996 
through 2002] such sums as are necessary for each of fiscal 
years 2002 through 2006. Amounts appropriated pursuant to this 
section shall be held and considered to have been granted to 
1994 Institutions to establish an endowment pursuant to 
subsection (c).

           *       *       *       *       *       *       *

                  (A) 60 percent of the adjusted income shall 
                be distributed among the 1994 Institutions on a 
                pro rata basis. The proportionate share of the 
                adjusted income received by a 1994 Institution 
                under this subparagraph shall be based on the 
                Indian student count [(as definded in section 
                390(3) of the Carl D. Perkins Vocational and 
                Applied Technology Education Act [section 
                2397h(3) of Title 20]),] (as defined in section 
                2(a) of the Tribally Controlled College or 
                University Assistance Act of 1978 (25 U.S.C. 
                1801(a)) as such section was in effect on the 
                day preceding the date of enactment of the Carl 
                D. Perkins Vocational and Applied Technology 
                Education Amendments of 1998 [Pub. L. 105-332, 
                Oct. 31, 1998, 112 Stat. 3076, which was 
                approved Oct. 31, 1998]) for each 1994 
                Institution for the fiscal year.

           *       *       *       *       *       *       *


SEC. 534. APPROPRIATIONS.

    (a) Authorization of Appropriations.--
          (1) In general.--For fiscal year 1996, and for each 
        fiscal year thereafter, there are authorized to be 
        appropriated to the Department of the Treasury an 
        amount equal to--
                  (A) [$50,000;] $100,000 multiplied by
                  (B) the number of 1994 Institutions.

           *       *       *       *       *       *       *


SEC. 535. INSTITUTIONAL CAPACITY BUILDING GRANTS.

    (a) Definitions.--As used in this section:
          (1) Federal share.--The term ``Federal share'' means, 
        with respect to a grant awarded under subsection (b), 
        the share of the grant that is provided from Federal 
        funds.
          (2) Non-federal share.--The term ``non-Federal 
        share'' means, with respect to a grant awarded under 
        subsection (b), the matching funds paid with funds 
        other than funds referred to in paragraph (1), as 
        determined by the Secretary.
          (3) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
    (b) In General.--
          (1) Institutional capacity building grants.--For each 
        of fiscal years 1996 through [2002,] 2006 the Secretary 
        shall make two or more institutional capacity building 
        grants to assist 1994 Institutions with constructing, 
        acquiring, and remodeling buildings, laboratories, and 
        other capital facilities (including fixtures and 
        equipment) necessary to conduct instructional 
        activities more effectively in agriculture and 
        sciences.

           *       *       *       *       *       *       *

    (c) Authorization of Appropriations.--There are authorized 
to be appropriated to the Department of Agriculture to carry 
out this section [$1,700,000 for each of fiscal years 1996 
through 2002.''] such sums as are necessary for each of fiscal 
years 2002 through 2006.

SEC. 536. RESEARCH GRANTS.

    (a) Research Grants Authorized.--The Secretary of 
Agriculture maymake grants under this section [of this note], 
on the basis of a competitive application process (and in 
accordance with such regulations as the Secretary may 
promulgate), to a 1994 Institution to assist the Institution to 
conduct agricultural research that addresses high priority 
concerns of tribal, national, or multistate significance.
    (b) Requirements.--Grant applications submitted under this 
section [of this note] shall certify that the research to be 
conducted will be performed under a cooperative agreement with 
at least 1 other land-grant college or university (exclusive of 
another 1994 Institution).
    (c) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section for each of fiscal years 1994 through [2002] 2006. 
Amounts appropriated shall remain available until expended.

           *       *       *       *       *       *       *


                                TITLE 8

             COOPERATIVE FORESTRY ASSISTANCE ACT OF 1978

           *       *       *       *       *       *       *


SEC. 5A. SUSTAINABLE FORESTRY COOPERATIVE PROGRAM.

    (a) Definitions.--In this section:
          (1) Farmer or rancher.--The term ``farmer or 
        rancher'' means a person engaged in the production of 
        an agricultural commodity (including livestock).
          (2) Forestry cooperative.--The term ``forestry 
        cooperative'' means an association that is--
                  (A) owned and operated by nonindustrial 
                private forest landowners; and
                  (B) comprised of members--
                          (i) of which at least 51 percent are 
                        farmers or ranchers; and
                          (ii) that use sustainable forestry 
                        practices on nonindustrial private 
                        forest land to create a long-term, 
                        sustainable income stream.
          (3) Nonindustrial private forest land.--The term 
        ``nonindustrial private forest land'' has the meaning 
        given the term ``nonindustrial private forest lands'' 
        in section 5(c).
    (b) Establishment.--The Secretary shall establish a 
program, to be known as the ``sustainable forestry cooperative 
program'', under which the Secretary shall provide, to 
nonprofit organizations on a competitive basis, grants to 
establish, and develop and support sustainable forestry 
practices carried out by members of, forestry cooperatives.
    (c) Use of Funds.--
          (1) In general.--Subject to paragraph (2), funds from 
        a grant provided under this section shall be used for--
                  (A) predevelopment, development, start-up, 
                capital acquisition, and marketing costs 
                associated with a forestry cooperative; or
                  (B) the development or support of a 
                sustainable forestry practice of a member of a 
                forestry cooperative.
          (2) Conditions.--
                  (A) Development.--The Secretary shall provide 
                funds under paragraph (1)(A) only to a 
                nonprofit organization with demonstrated 
                expertise in cooperative development, as 
                determined by the Secretary.
                  (B) Compliance with plan.--A sustainable 
                forestry practice developed or supported 
                through the use of funds from a grant under 
                this section shall comply with any applicable 
                standards for sustainable forestry contained in 
                a management plan that--
                          (i) meets the requirements of section 
                        6A(g); and
                          (ii) is approved by the State 
                        forester (or equivalent State 
                        official).
    (d) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this section, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture to carry out 
        this section $2,000,000, to remain available until 
        expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 5B. WATERSHED FORESTRY ASSISTANCE PROGRAM.

    (a) Establishment.--Subject to the availability of 
appropriations, the Secretary shall establish a watershed 
forestry assistance program (referred to in this section as the 
``program'') to provide to States, through State foresters (as 
defined in section 6A), technical, financial, and related 
assistance to--
          (1) expand forest stewardship capacities and 
        activities through State forestry best management 
        practices and other means at the State level; and
          (2) prevent water quality degradation, and address 
        watershed issues, on non-Federal forest land.
    (b) Watershed Forestry Education, Technical Assistance, and 
Planning.--
          (1) Plan.--
                  (A) In general.--In carrying out the program, 
                the Secretary shall cooperate with State 
                foresters to develop a plan, to be administered 
                by the Secretary and implemented by State 
                foresters, to provide technical assistance to 
                assist States in preventing and mitigating 
                water quality degradation.
                  (B) Participation.--In developing the plan 
                under subparagraph (A), the Secretary shall 
                encourage participation of interested members 
                of the public (including nonprofit private 
                organizations and local watershed councils).
          (2) Components.--The plan described in paragraph (1) 
        shall include provisions to--
                  (A) build and strengthen watershed 
                partnerships focusing on forest land at the 
                national, State, regional, and local levels;
                  (B) provide State forestry best management 
                practices and water quality technical 
                assistance directly to private landowners;
                  (C) provide technical guidance relating to 
                water quality management through forest 
                management in degraded watersheds to land 
                managers and policymakers;
                  (D)(i) complement State nonpoint source 
                assessment and management plans established 
                under section 319 of the Federal Water 
                Pollution Control Act (33 U.S.C. 1329); and
                  (ii) provide enhanced opportunities for 
                coordination and cooperation among Federal and 
                State agencies having responsibility for water 
                and watershed management under that Act; and
                  (E) provide enhanced forest resource data and 
                support for improved implementation of State 
                forestry best management practices, including--
                          (i) designing and conducting 
                        effectiveness and implementation 
                        studies; and
                          (ii) meeting in-State water quality 
                        assessment needs, such as the 
                        development of water quality models 
                        that correlate the management of forest 
                        land to water quality measures and 
                        standards.
    (c) Watershed Forestry Cost-Share Program.--
          (1) Establishment.--In carrying out the program, the 
        Secretary shall establish a watershed forestry cost-
        share program, to be administered by the Secretary and 
        implemented by State foresters, to provide grants and 
        other assistance for eligible programs and projects 
        described in paragraph (2).
          (2) Eligible programs and projects.--A community, 
        nonprofit group, or landowner may receive a grant or 
        other assistance under this subsection to carry out a 
        State forestry best management practices program or a 
        watershed forestry project if the program or project, 
        as determined by the Secretary--
                  (A) is consistent with--
                          (i) State nonpoint source assessment 
                        and management plan objectives 
                        established under section 319 of the 
                        Federal Water Pollution Control Act (33 
                        U.S.C. 1329); and
                          (ii) the cost-share requirements of 
                        this section; and
                  (B) is designed to address critical forest 
                stewardship, watershed protection, and 
                restoration needs of a State through--
                          (i) the use of trees and forests as 
                        solutions to water quality problems in 
                        urban and agricultural areas;
                          (ii) community-based planning, 
                        involvement, and action through State, 
                        local and nonprofit partnerships;
                          (iii) the application of and 
                        dissemination of information on 
                        forestry best management practices 
                        relating to water quality;
                          (iv) watershed-scale forest 
                        management activities and conservation 
                        planning; and
                          (v) the restoration of wetland and 
                        stream side forests and establishment of 
                        riparian vegetative buffers.
          (3) Allocation.--
                  (A) In general.--After taking into 
                consideration the criteria described in 
                subparagraph (B), the Secretary shall allocate 
                among States, for award by State foresters 
                under paragraph (4), the amounts made available 
                to carry out this subsection.
                  (B) Criteria.--The criteria referred to in 
                subparagraph (A) are--
                          (i) the number of acres of forest 
                        land, and land that could be converted 
                        to forest land, in each State;
                          (ii) the nonpoint source assessment 
                        and management plans of each State, as 
                        developed under section 319 of the 
                        Federal Water Pollution Control Act (33 
                        U.S.C. 1329);
                          (iii) the acres of wetland forests 
                        that have been lost or degraded or 
                        cases in which forests may play a role 
                        in restoring wetland resources;
                          (iv) the number of non-Federal forest 
                        landowners in each State; and
                          (v) the extent to which the 
                        priorities of States are designed to 
                        achieve a reasonable range of the 
                        purposes of the program and, as a 
                        result, contribute to the water-related 
                        goals of the United States.
          (4) Award of grants and assistance.--
                  (A) In general.--In implementing the program 
                under this subsection, the State forester, in 
                coordination with the State Coordinating 
                Committee established under section 19(b), 
                shall provide annual grants and cost-share 
                assistance to communities, nonprofit groups, 
                and landowners to carry out eligible programs 
                and projects described in paragraph (2).
                  (B) Application.--A community, nonprofit 
                group, or landowner that seeks to receive cost-
                share assistance under this subsection shall 
                submit to the State forester an application, in 
                such form and containing such information as 
                the State forester may prescribe, for the 
                assistance.
                  (C) Prioritization.--In awarding cost-share 
                assistance under this subsection, the Secretary 
                shall give priority to eligible programs and 
                projects that are identified by the State 
                foresters and the State Stewardship Committees 
                as having a greater need for assistance.
                  (D) Award.--On approval by the Secretary of 
                an application under subparagraph (B), the 
                State forester shall award to the applicant, 
                from funds allocated to the State under 
                paragraph (3), such amount of cost-share 
                assistance as is requested in the application.
          (5) Cost sharing.--
                  (A) Federal share.--The Federal share of the 
                cost of carrying out any eligible program or 
                project under this subsection shall not exceed 
                75 percent, of which not more than 50 percent 
                may be in the form of assistance provided under 
                this subsection.
                  (B) Non-federal share.--The non-Federal share 
                of the cost of carrying out any eligible 
                program or project under this subsection may be 
                provided in the form of cash, services, or in-
                kind contributions.
    (d) Watershed Forester.--A State may use a portion of the 
funds made available to the State under subsection (e) to 
establish and fill a position of `Watershed Forester' to lead 
State-wide programs and coordinate watershed-level projects.
    (e) Funding.--
          (1) In general.--There are authorized to be 
        appropriated to carry out this section $20,000,000 for 
        each of fiscal years 2002 through 2006.
          (2) Allocation.--Of the funds made available under 
        paragraph (1)--
                  (A) 75 percent shall be used to carry out 
                subsection (c); and
                  (B) 25 percent shall be used to carry out 
                provisions of this section other than 
                subsection (c).

           *       *       *       *       *       *       *

          (1) Findings.--Congress finds that--
                  (A) the United States is becoming 
                increasingly dependent on nonindustrial private 
                forest land to supply necessary market 
                commodities and nonmarket conservation values;
                  (B) there is a strong demand for expanded 
                assistance programs for owners of nonindustrial 
                private forest land because the majority of the 
                wood supply of the United States comes from 
                nonindustrial private forest land;
                  (C) soil, water, and air quality, fish and 
                wildlife habitat, aesthetic values, and 
                opportunities for outdoor recreation in the 
                United States would be maintained and improved 
                through good stewardship of nonindustrial 
                private forest land;
                  (D) the products and services resulting from 
                stewardship of nonindustrial private forest 
                land contribute to the economic, social, and 
                ecological health and diversity of rural 
                communities;
                  (E) catastrophic wildfires threaten human 
                lives, property, forests, and other resources;
                  (F) Federal and State cooperation in forest 
                fire prevention and control has proven 
                effective and valuable because properly managed 
                forest stands are less susceptible to 
                catastrophic fire, as demonstrated by the 
                catastrophic fire seasons of 1998 and 2000;
                  (G) owners of nonindustrial private forest 
                land face increased pressure to make that land 
                available for development and other uses, 
                resulting in forest land loss and fragmentation 
                that reduces the ability of private forest land 
                to provide a full range of societal benefits;
                  (H) complex, investments in the management of 
                long-rotation forest stands, including 
                sustainable hardwood management are often the 
                most difficult commitments for owners of 
                nonindustrial private forest land;
                  (I) the investment of a single Federal dollar 
                in State and private forestry programs is 
                estimated to leverage, on the average, $9 from 
                State, local, and private sources; and
                  (J) comprehensive, multiresource planning 
                assistance made available to each landowner 
                before the provision of technical assistance 
                would provide an opportunity to ensure that the 
                landowner is aware of the many projects and 
                activities eligible for cost-share assistance.
          (2) Purposes.--The purposes of this section are--
                  (A) to strengthen the commitment of the 
                Secretary to sustainable forest management to 
                enhance the productivity of timber, fish and 
                wildlife habitat, soil and water quality, 
                wetland, recreational resources, and aesthetic 
                values of forest land; and
                  (B) to establish a coordinated and 
                cooperative Federal, State, and local 
                sustainable forestry program for the 
                establishment, management, maintenance, 
                enhancement, and restoration of forests on 
                nonindustrial private forest land.
    (b) Initiative.--The Cooperative Forestry Assistance Act of 
1978 is amended by inserting after section 6 (16 U.S.C. 2103b) 
the following:

SEC. 6A. SUSTAINABLE FOREST MANAGEMENT PROGRAM.

    (a) Definitions.--In this section:
          (1) Committee.--The term ``Committee'' means a State 
        Forest Stewardship Coordinating Committee established 
        under section 19(b).
          (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
          (3) Program.--The term ``program'' means the 
        sustainable forest management program established under 
        subsection (b)(1).
          (4) Nonindustrial private forest land.--The term 
        ``nonindustrial private forest land'' has the meaning 
        given the term ``nonindustrial private forest lands'' 
        in section 5(c).
          (5) Owner.--The term ``owner'' means an owner of 
        nonindustrial private forest land.
          (6) State forester.--The term ``State forester'' 
        means the director or other head of a State forestry 
        agency (or an equivalent State official).
    (b) Establishment.--
          (1) In general.--The Secretary shall establish a 
        sustainableforest management program to--
                  (A) provide financial assistance to State 
                foresters; and
                  (B) encourage the long-term sustainability of 
                nonindustrial private forest land in the United 
                States by assisting the owners of nonindustrial 
                private forest land, through State foresters, 
                in more actively managing the nonindustrial 
                private forest land and related resources of 
                those owners through the use of State, Federal, 
                and private sector resource management 
                expertise, financial assistance, and 
                educational programs.
          (2) Coordination.--The Secretary, acting through 
        State foresters, shall implement the program--
                  (A) in coordination with the Committees; and
                  (B) in consultation with--
                          (i) other Federal, State, and local 
                        natural resource management agencies;
                          (ii) institutions of higher 
                        education; and
                          (iii) a broad range of private sector 
                        interests.
    (c) State Priority Plan.--
          (1) In general.--Subject to paragraph (3), as a 
        condition of receipt of funding under the program, a 
        State Forester and the Committee of the State shall 
        jointly develop and submit to the Secretary a 5-year 
        plan that describes the funding priorities of the State 
        in meeting the goals of the program.
          (2) Public participation.--The plan submitted to the 
        Secretary under paragraph (1) shall include 
        documentation of the efforts of the State to provide 
        for public participation in the development of the 
        plan.
          (3) State priorities.--The Secretary shall ensure, to 
        the maximum extent practicable, that the need for 
        expanded technical assistance programs for owners is 
        met in the annual funding priorities of each State 
        described in paragraph (1).
    (d) Purposes.--The Secretary shall allocate resources of 
the Secretary among States in accordance with subsection (j) to 
encourage, in accordance with the plan of each State described 
in subsection (c)--
          (1) the investment in practices to establish, 
        restore, protect, manage, maintain, and enhance the 
        health and productivity of the nonindustrial private 
        forest land in the United States;
          (2) the occurrence of afforestation, reforestation, 
        improvement of poorly stocked stands, timber stand 
        improvement, practices necessary to improve seedling 
        growth and survival, and growth enhancement practices 
        as needed to enhance and sustain the long-term 
        productivity of timber and nontimber forest resources 
        to--
                  (A) meet projected public demand for forest 
                resources; and
                  (B) provide environmental benefits;
          (3) the protection of riparian buffers and forest 
        wetland;
          (4) the maintenance and enhancement of fish and 
        wildlife habitat;
          (5) the enhancement of soil, air, and water quality;
          (6) through the use of agroforestry practices, the 
        reduction of soil erosion and maintenance of soil 
        quality;
          (7) the maintenance and enhancement of the forest 
        landbase;
          (8) the reduction of the threat of catastrophic 
        wildfires; and
          (9) the preservation of aesthetic quality and 
        opportunities for outdoor recreation.
    (e) Eligibility.--
          (1) Cost share assistance.--
                  (A) In general.--Except as provided in 
                paragraph (2), an owner shall be eligible to 
                receive cost-share assistance from a State 
                forester under the program if the owner--
                          (i) develops a management plan in 
                        accordance with subsection (g) that--
                                  (I) addresses site-specific 
                                activities and practices; and
                                  (II) is approved by the State 
                                forester;
                          (ii) agrees to implement approved 
                        activities in accordance with a 
                        management plan for a period of not 
                        less than 10 years, unless the State 
                        forester approves a modification to the 
                        management plan; and
                          (iii) except as provided in 
                        subparagraph (B), owns not more than 
                        1,000 acres of nonindustrial private 
                        forest land.
                  (B) Exception for significant public 
                benefits.--The Secretary may approve the 
                provision of cost-share assistance to an owner 
                that owns more than 1,000 but less than 5,000 
                acres of nonindustrial private forest land if 
                the Secretary, in consultation with the State 
                forester, determines that significant public 
                benefits will accrue as a result of the 
                approval.
          (2) Payment for plan development.--The Secretary, 
        acting through a State forester, may provide cost-share 
        assistance to an owner to develop a management plan.
          (3) Limitations.--An owner shall receive no cost-
        share assistance for management of nonindustrial 
        private forest land under this section if the owner 
        receives cost-share assistance for that land under--
                  (A) the forestry incentives program under 
                section 4;
                  (B) the stewardship incentives program under 
                section 6; or
                  (C) any conservation program administered by 
                the Secretary.
          (4) Rate; schedule.--Subject to paragraph (5), the 
        Secretary, in consultation with the State forester, 
        shall determine the rate and timing of cost-share 
        payments.
          (5) Amount.--
                  (A) Percentage of cost.--Subject to 
                subparagraph (B), a cost-share payment shall 
                not exceed the lesser of an amount equal to--
                          (i) 75 percent of the total cost of 
                        implementing the project or activity; 
                        or
                          (ii) such lesser percentage of the 
                        total cost of implementing the project 
                        or activity as is determined by the 
                        appropriate State forester.
                  (B) Aggregate payment limit.--The Secretary 
                shall determine the maximum aggregate amount of 
                cost-share payments that an owner may receive 
                under this section.
    (f) Management Plan.--An owner that seeks to participate in 
the program shall--
          (1) submit to the State forester a management plan 
        that--
                  (A) meets the requirements of this section; 
                and
                  (B)(i) is prepared by, or in consultation 
                with, a professional resource manager;
                  (ii) identifies and describes projects and 
                activities to be carried out by the owner to 
                protect soil, water, air, range, and aesthetic 
                quality, recreation, timber, water, wetland, 
                and fish and wildlife resources on the land in 
                a manner that is compatible with the objectives 
                of the owner;
                  (iii) addresses any criteria established by 
                the applicable State and the applicable 
                Committee; and
                  (iv)(I) at a minimum, applies to the portion 
                of the land on which any project or activity 
                funded under the program will be carried out; 
                or
                  (II) in a case in which a project or activity 
                described in subclause (I) may affect acreage 
                outside the portion of the land on which the 
                project or activity is carried out, applies to 
                all land of the owner that is in forest cover 
                and that may potentially be affected by the 
                project or activity; and
          (2) agree that all projects and activities conducted 
        on the land shall be consistent with the management 
        plan.
    (g) Approved Activities.--
          (1) In general.--The Secretary, in consultation with 
        the State forester and the appropriate Committee, shall 
        develop for each State a list of approved forest 
        activities and practices eligible for cost-share 
        assistance that meets the purposes of the program 
        described in subsection (d).
          (2) Types of activities.--Approved activities and 
        practices under paragraph (1) may consist of activities 
        and practices for--
                  (A) the establishment, management, 
                maintenance, and restoration of forests for 
                shelterbelts, windbreaks, aesthetic quality, 
                and other conservation purposes;
                  (B) the sustainable growth and management of 
                forests for timber production;
                  (C) the restoration, use, and enhancement of 
                forest wetland and riparian areas;
                  (D) the protection of water quality and 
                watersheds through--
                          (i) the planting of trees in riparian 
                        areas; and
                          (ii) the enhanced management and 
                        maintenance of native vegetation on 
                        land vital to water quality;
                  (E) the preservation, restoration, or 
                development of habitat for plants, fish, and 
                wildlife;
                  (F)(i) the control, detection, monitoring, 
                and prevention of the spread of invasive 
                species and pests on nonindustrial private 
                forest land; and
                          (ii) the restoration of nonindustrial 
                        private forest land affected by 
                        invasive species and pests;
                  (G) the conduct of other management 
                activities, such as the reduction of hazardous 
                fuel use, that reduce the risks to forests 
                posed by, and that restore, recover, and 
                mitigate the damage to forests caused by, fire 
                or any other catastrophic event, as determined 
                by the Secretary;
                  (H) the development of management plans;
                  (I) the acquisition by the State of permanent 
                easements to maintain forest cover and protect 
                important forest values; and
                  (J) the conduct of other activities approved 
                by the Secretary, in consultation with the 
                State forester and the appropriate Committees.
    (h) Failure To Comply.--
          (1) In general.--The Secretary shall establish a 
        procedure to recover cost-share payments made under 
        this section in any case in which the recipient of the 
        payment fails--
                  (A) to implement a project or activity in 
                accordance with the management plan; or
                  (B) comply with any requirement of this 
                section.
          (2) Additional authority.--The authority under 
        paragraph (1) shall be in addition to, and not in lieu 
        of, any other authority available to the Secretary.
    (i) Reports.--
          (1) Interim report.--Not later than 2\1/2\ years 
        after the date on which funds are made available to 
        implement a State priority plan under subsection (c), 
        the State implementing the plan shall submit to the 
        Secretary an interim report describing the status of 
        projects and activities funded under the plan as of 
        that date.
          (2) Final report.--Not later than 5 years after the 
        date on which funds are made available to implement a 
        State priority plan under subsection (d), the State 
        implementing the plan shall submit to the Secretary a 
        final report describing the status of all projects and 
        activities funded under the plan as of that date.
    (j) Distribution.--
          (1) In general.--The Secretary, acting through State 
        foresters, shall distribute funds available for cost 
        sharing under the initiative based on a nationwide 
        funding formula developed under paragraph (2).
          (2) Formula.--In developing the formula referred to 
        in paragraph (1), the Secretary shall--
                  (A) assess public benefits that would result 
                from the distribution; and
                  (B) consider--
                          (i) the total acreage of 
                        nonindustrial private forest land in 
                        each State;
                          (ii) the potential productivity of 
                        that land, as determined by the 
                        Secretary;
                          (iii) the number of owners eligible 
                        for cost sharing in each State;
                          (iv) the opportunities to enhance 
                        nontimber resources on that land, 
                        including--
                                  (I) the protection of 
                                riparian buffers and forest 
                                wetland;
                                  (II) the preservation of fish 
                                and wildlife habitat;
                                  (III) the enhancement of 
                                soil, air, and water quality; 
                                and
                                  (IV) the preservation of 
                                aesthetic quality and 
                                opportunities for outdoor 
                                recreation;
                          (v) the anticipated demand for timber 
                        and nontimber resources in each State;
                          (vi) the need to improve forest 
                        health to minimize the damaging effects 
                        of catastrophic fire, insects, disease, 
                        or weather;
                          (vii) the need and demand for 
                        agroforestry practices in each State;
                          (viii) the need to maintain and 
                        enhance the forest landbase; and
                          (ix) the need for afforestation, 
                        reforestation, and timber stand 
                        improvement.
    (k) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this section, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture to carry out 
        this section $48,000,000, to remain available until 
        expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 11. FOREST FIRE RESEARCH CENTERS.

    (a) In General.--Subject to the availability of 
appropriations, the Secretary of Agriculture, acting through 
the Chief of the Forest Service (referred to in this section as 
the ``Secretary'') shall establish at least 2 forest fire 
research centers at institutions of higher education (which may 
include research centers in existence on the date of enactment 
of this section) that--
          (1) have expertise in natural resource development; 
        and
          (2) are located in close proximity to other Federal 
        natural resource, forest management, and land 
        management agencies.
    (b) Locations.--Of the forest fire research centers 
established under subsection (a)--
          (1) at least 1 center shall be located in Arizona, 
        California, New Mexico, Oregon, or Washington; and
          (2) at least 1 center shall be located in Colorado, 
        Idaho, Montana, Nevada, or Wyoming.
    (c) Duties.--At each of the forest fire research centers 
established under subsection (a), the Secretary shall provide 
for--
          (1) the conduct of integrative, interdisciplinary 
        research into the ecological, socioeconomic, and 
        environmental impact of fire control and the use of 
        management of ecosystems and landscapes to facilitate 
        fire control; and
          (2) the development of mechanisms to rapidly transfer 
        new fire control and management technologies to fire 
        and land managers.
    (d) Advisory Committee.--
          (1) In general.--The Secretary, in consultation with 
        the Secretary of Interior, shall establish a committee 
        composed of fire and land managers and fire researchers 
        to determine the areas of emphasis and establish 
        priorities for research projects conducted at forest 
        fire research centers established under subsection (a).
          (2) Administration.--The Federal Advisory Committee 
        Act (5 U.S.C. App.) and section 102 of the Agricultural 
        Research, Extension, and Education Reform Act of 1998 
        (7 U.S.C. 7612) shall not apply to the committee 
        established under paragraph (1).
    (e) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
section.

SEC. 6B. WILDFIRE PREVENTION AND HAZARDOUS FUEL PURCHASE PROGRAM.

    (a) Definitions.--In this section:
          (1) Biomass-to-energy facility.--The term ``biomass-
        to-energy facility'' means a facility that uses forest 
        biomass or other biomass as a raw material to produce 
        electric energy, useful heat, or a transportation fuel.
          (2) Eligible community.--The term ``eligible 
        community'' means--
                  (A) any town, township, municipality, or 
                other similar unit of local government (as 
                determined by the Secretary), or any area 
                represented by a nonprofit corporation or 
                institution organized under Federal or State 
                law to promote broad-based economic 
                development, that--
                          (i) has a population of not more than 
                        10,000 individuals;
                          (ii) is located within a county in 
                        which at least 15 percent of the total 
                        primary and secondary labor and 
                        proprietor income is derived from 
                        forestry, wood products, and forest-
                        related industries, such as recreation, 
                        forage production, and tourism; and
                          (iii) is located adjacent to public 
                        or private forest land, the condition 
                        of which land the Secretary determines 
                        poses a substantial present or 
                        potential hazard to the safety of--
                                  (I) a forest ecosystem;
                                  (II) wildlife; or
                                  (III) in the case of a 
                                wildfire, human, community, or 
                                firefighter safety, in a year 
                                in which drought conditions are 
                                present; and
                  (B) any county that is not contained within a 
                metropolitan statistical area that meets the 
                conditions described in clauses (ii) and (iii) 
                of subparagraph (A).
          (3) Forest biomass.--The term ``forest biomass'' 
        means fuel and biomass accumulation from precommercial 
        thinnings, slash, and brush on public or private forest 
        land.
          (4) Hazardous fuel.--The term ``hazardous fuel'' 
        means any excessive accumulation of forest biomass on 
        public or private forest land (especially land in an 
        urban-wildland interface area or in an area that is 
        located near an eligible community and designated as 
        condition class 2 or 3 under the report of the Forest 
        Service entitled ``Protecting People and Sustainable 
        Resources in Fire-Adapted Ecosystems'', dated October 
        13, 2000 that the Secretary determines poses a 
        substantial present or potential hazard--
                  (A) to the safety of a forest ecosystem;
                  (B) to the safety of wildlife; or
                  (C) in the case of wildfire in a year in 
                which drought conditions are present, to human, 
                community, or firefighter safety.
          (5) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
          (6) Secretary.--The term ``Secretary'' means--
                  (A) the Secretary of Agriculture (or a 
                designee), with respect to National Forest 
                System land and private land in the United 
                States; and
                  (B) the Secretary of the Interior (or a 
                designee) with respect to Federal land under 
                the jurisdiction of the Secretary of the 
                Interior or an Indian tribe.
    (b) Hazardous Fuel Grant Program.--
          (1) Grants.--
                  (A) In general.--Subject to the availability 
                of appropriations, the Secretary may make 
                grants to persons that operate biomass-to-
                energy facilities to offset the costs incurred 
                by those persons in purchasing hazardous fuels 
                derived from public and private forest land 
                adjacent to eligible communities.
                  (B) Selection criteria.--The Secretary shall 
                select recipients for grants under subparagraph 
                (A) based on--
                          (i) planned purchases by the 
                        recipients of hazardous fuels, as 
                        demonstrated by the recipient through 
                        the submission to the Secretary of such 
                        assurances as the Secretary may 
                        require; and
                          (ii) the level of anticipated 
                        benefits of those purchases in reducing 
                        the risk of wildfires.
          (2) Grant amounts.--
                  (A) In general.--A grant under this 
                subsection shall--
                          (i) be based on--
                                  (I) the distance required to 
                                transport hazardous fuels to a 
                                biomass-to-energy facility; and
                                  (II) the cost of removal of 
                                hazardous fuels; and
                          (ii) be in an amount that is at least 
                        equal to the product obtained by 
                        multiplying--
                                  (I) the number of tons of 
                                hazardous fuels delivered to a 
                                grant recipient; by
                                  (II) an amount that is at 
                                least $5 but not more than $10 
                                per ton of hazardous fuels, as 
                                determined by the Secretary 
                                taking into consideration the 
                                factors described in clause 
                                (i).
                  (B) Limitation on individual grants.--
                          (i) In general.--Except as provided 
                        in clause (ii), a grant under 
                        subparagraph (A) shall not exceed 
                        $1,500,000 for any biomass-to-energy 
                        facility for any fiscal year.
                          (ii) Small biomass-to-energy 
                        facilities.--A biomass-to-energy 
                        facility that has an annual production 
                        of 5 megawatts or less shall not be 
                        subject to the limitation under clause 
                        (i).
          (3) Monitoring of grant recipient activities.--
                  (A) In general.--As a condition of receipt of 
                a grant under this subsection, a grant 
                recipient shall keep such records as the 
                Secretary may require, including records that--
                          (i) completely and accurately 
                        disclose the use of grant funds; and
                          (ii) describe all transactions 
                        involved in the purchase of hazardous 
                        fuels.
                  (B) Access.--On notice by the Secretary, the 
                operator of a biomass-to-energy facility that 
                purchases and uses hazardous fuels with funds 
                from a grant under this subsection shall 
                provide the Secretary with--
                          (i) reasonable access to the biomass-
                        to-energy facility; and
                          (ii) an opportunity to examine the 
                        inventory and records of the biomass-
                        to-energy facility.
          (4) Monitoring of effect of treatments.--The 
        Secretary shall monitor Federal land from which 
        hazardous fuels are removed and sold to a biomass-to-
        energy facility under this subsection to determine and 
        document the reduction in fire hazards on that land.
          (5) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $50,000,000 for each of fiscal years 2002 
        through 2006.
    (c) Long-Term Forest Stewardship Contracts for Hazardous 
Fuels Removal.--
          (1) Annual assessment of treatment acreage.--
                  (A) In general.--Subject to the availability 
                of appropriations, not later than March 1 of 
                each of fiscal years 2002 through 2006, the 
                Secretary of Agriculture and the Secretary of 
                Energy shall jointly submit to Congress an 
                assessment of the number of acres of Federal 
                forest land recommended to be treated during 
                the subsequent fiscal year using stewardship 
                end result contracts authorized by paragraph 
                (3).
                  (B) Components.--The assessment shall--
                          (i) be based on the treatment 
                        schedules contained in the report 
                        entitled ``Protecting People and 
                        Sustaining Resources in Fire-Adapted 
                        Ecosystems'', dated October 13, 2000 
                        and incorporated into the National Fire 
                        Plan (as identified by the Secretary);
                          (ii) identify the acreage by 
                        condition class, type of treatment, and 
                        treatment year to achieve the 
                        restoration goals outlined in the 
                        report within 10-, 15-, and 20-year 
                        time periods;
                          (iii) give priority to condition 
                        class 3 areas (as described in 
                        subsection (a)(4)(A)), including 
                        modifications in the restoration goals 
                        based on the effects of--
                                  (I) fire;
                                  (II) hazardous fuel 
                                treatments under the National 
                                Fire Plan (as identified by the 
                                Secretary); or
                                  (III) updates in data;
                          (iv) provide information relating to 
                        the type of material and estimated 
                        quantities and range of sizes of 
                        material that shall be included in the 
                        treatments;
                          (v) describe the management area 
                        prescriptions in the applicable land 
                        and resource management plan for the 
                        land on which the treatment is 
                        recommended; and
                          (vi) give priority to areas described 
                        in subsection (a)(4)(A).
          (2) Funding recommendation.--The Secretary shall 
        include in the annual assessment under paragraph (1) a 
        request for funds sufficient to implement the 
        recommendations contained in the assessment using 
        stewardship end result contracts described in paragraph 
        (3) in any case in which the Secretary determines that 
        the objectives of the National Fire Plan (as identified 
        by the Secretary) would best be accomplished through 
        forest stewardship end result contracting.
          (3) Stewardship end result contracting.--
                  (A) In general.--Subject to the availability 
                of appropriations, the Secretary may enter into 
                stewardship end result contracts to implement 
                the National Fire Plan (as identified by the 
                Secretary) on National Forest System land based 
                on the treatment schedules provided in the 
                annual assessments conducted under paragraph 
                (1)(B)(i).
                  (B) Period of contracts.--The contracting 
                goals and authorities described in subsections 
                (b) through (g) of section 347 of the 
                Department of the Interior and Related Agencies 
                Appropriations Act, 1999 (commonly known as the 
                ``Stewardship End Result Contracting 
                Demonstration Project'') (16 U.S.C. 2104 note; 
                Public Law 105-277), shall apply to contracts 
                entered into under this paragraph, except that 
                the period of each such contract shall not 
                exceed 10 years.
                  (C) Status report.--Beginning with the 
                assessment required under paragraph (1) for 
                fiscal year 2003, the Secretary shall include 
                in the annual assessment under paragraph (1) a 
                status report of the stewardship end result 
                contracts entered into under this paragraph.
          (4) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection such sums as are necessary for each of 
        fiscal years 2002 through 2006.
    (d) Termination of Authority.--The authority provided under 
this section shall terminate on September 30, 2006.

           *       *       *       *       *       *       *


SEC. 10A. ENHANCED COMMUNITY FIRE PROTECTION.

    (a) Cooperative Management Relating to Wildfire Threats.--
Notwithstanding section 7 of the Federal Fire Prevention and 
Control Act of 1974 (15 U.S.C. 2206), the Secretary may 
cooperate with State foresters and equivalent State officials 
to--
          (1) assist in the prevention, control, suppression, 
        and prescribed use of fires (including through the 
        provision of financial, technical, and related 
        assistance);
          (2) protect communities from wildfire threats;
          (3) enhance the growth and maintenance of trees and 
        forests in a manner that promotes overall forest 
        health; and
          (4) ensure the continued production of all forest 
        resources, including timber, outdoor recreation 
        opportunities, wildlife habitat, and clean water, 
        through conservation of forest cover on watersheds, 
        shelterbelts, and windbreaks.
    (b) Community and Private Land Fire Assistance Program.--
          (1) In general.--The Secretary shall establish a 
        program to be known as the ``community and private land 
        fire assistance program'' (referred to in this section 
        as the ``Program'')--
                  (A) to focus the Federal role in promoting 
                optimal firefighting efficiency at the Federal, 
                State, and local levels;
                  (B) to provide increased assistance to 
                Federal projects that establish landscape level 
                protection from wildfires;
                  (C) to expand outreach and education programs 
                concerning fire prevention to homeowners and 
                communities; and
                  (D) to establish defensible space against 
                wildfires around the homes and property of 
                private landowners.
          (2) Administration and implementation.--The Program 
        shall be administered by the Secretary and, with 
        respect to non-Federal land described in paragraph (3), 
        carried out through the State forester or equivalent 
        State official.
          (3) Components.--The Secretary may carry out under 
        the Program, on National Forest System land and non-
        Federal land determined by the Secretary in 
        consultation with State foresters and Committees--
                  (A) fuel hazard mitigation and prevention;
                  (B) invasive species management;
                  (C) multiresource wildfire and community 
                protection planning;
                  (D) community and landowner education 
                enterprises, including the program known as 
                ``FIREWISE'';
                  (E) market development and expansion;
                  (F) improved use of wood products; and (G) 
                restoration projects.
          (4) Priority.--In entering into contracts to carry 
        out projects under the Program, the Secretary shall 
        give priority to contracts with local persons or 
        entities.
    (c) Authority.--The authority provided under this section 
shall be in adition to any authority provided under section 10.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated to the Secretary to carry out this section 
$35,000,000 for each of fiscal years 2002 through 2006.

           *       *       *       *       *       *       *

    Sec. 13. (a) In implementing this Act, the Secretary shall, 
to the maximum extent practicable--
          (1) work through, cooperate with, and assist State 
        foresters or

           *       *       *       *       *       *       *

    (e) The Secretary may prescribe rules and regulations, as 
the Secretary deems appropriate, to implement the provisions of 
this Act.
    [(f) The Secretary is authorized to make grants, 
agreements, contracts, and other arrangements the Secretary 
deems necessary to implement this Act.]
    (f) Grants, Contracts, and Other Agreements.--
          (1) In general.--In accordance with paragraph (2), 
        the Secretary may make such grants and enter into such 
        contracts, agreements, or other arrangements as the 
        Secretary determines are necessary to carry out this 
        Act.
          (2) Assistance.--Notwithstanding any other provision 
        of this Act, the Secretary, with the concurrence of the 
        applicable State forester or equivalent State official, 
        may provide assistance under this Act directly to any 
        public or private entity, organization, or individual--
                  (A) through a grant; or
                  (B) by entering into a contract or 
                cooperative agreement.
    (g) This Act shall be construed as supplementing all other 
laws relating to the Department of Agriculture and shall not be 
construed as limiting or repealing any existing law or 
authority of the Secretary, except as specifically cited in 
section 16 of this Act.

           *       *       *       *       *       *       *

                  (B) Composition.--The State Coordinating 
                Committee shall be chaired and administered by 
                the State forester, or equivalent State 
                official, or the designee thereof, and shall be 
                composed, to the extent practicable, of--
                          (i) representatives from the United 
                        States Fish and Wildlife Service, 
                        Forest Service, Soil Conservation 
                        Service, Agricultural Stabilization and 
                        Conservation Service, and Extension 
                        Service;

           *       *       *       *       *       *       *

        (2) Duties.--A State Coordinating Committee shall--
                  (A) consult with other Department of 
                Agriculture and State committees that address 
                State and private forestry issues;
                  (B) make recommendations to the Secretary 
                concerning the assignment of priorities and the 
                coordination of responsibilities for the 
                implementation of this Act by the various 
                Federal and State forest management agencies 
                that take into consideration the mandates of 
                each such agency;
                  (C) make recommendations to the State 
                forester or equivalent State official 
                concerning the development of a Forest 
                Stewardship Plan under paragraph (3); [and]
                  (D) make recommendations to the Secretary 
                concerning those forest lands that should be 
                given priority for inclusion in the Forest 
                Legacy Program established pursuant to section 
                7--[i] ; and
                  (E) submit to the Secretary, the Committee on 
                Agriculture of the House of Representatives and 
                the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate, an annual report that 
                describes--
                          (i) the list of members on the 
                        Committee described in paragraph 
                        (1)(B); and
                          (ii) for those members that may be 
                        included on the Committee, but are not 
                        included because a determination that 
                        it is not practicable to include the 
                        members has been made, an explanation 
                        of the reasons for that determination.
          (3) Forest stewardship plan.--The State forester or 
        equivalent State official of each State, in 
        consultation with the State Coordinating Committee of 
        such State, shall develop a Forest Stewardship Plan 
        that shall--

           *       *       *       *       *       *       *


                RENEWABLE RESOURCES EXTENSION ACT OF 1978

           *       *       *       *       *       *       *


SEC. 5A. EXPANDED PROGRAMS.

           *       *       *       *       *       *       *


SEC. 5B. SUSTAINABLE FORESTRY OUTREACH INITIATIVE.

    The Secretary shall establish a program, to be known as the 
``Sustainable Forestry Outreach Initiative'', to educate 
landowners concerning--
          (1) the value and benefits of practicing sustainable 
        forestry;
          (2) the importance of professional forestry advice in 
        achieving sustainable forestry objectives; and
          (3) the variety of public and private sector 
        resources available to assist the landowners in 
        planning for and practicing sustainable forestry.
    Sec. 6. [There are hereby authorized to be appropriated to 
implement this Act $15,000,000 for each of fiscal years 1987 
through 2002.] There is authorized to be appropriated to carry 
out this Act $30,000,000 for each of fiscal years 2002 through 
2006. Generally, States shall be eligible for funds 
appropriated under this Act according to the respective 
capabilities of their private forests and rangelands for 
yielding renewable resources and relative needs for such 
resources identified in the periodic Renewable Resource 
Assessment provided for in section 3 of the Forest and 
Rangeland Renewable Resources Planning Act of 1974 and the 
periodic appraisal of land and water resources provided for in 
section 5 of the Soil and Water Resources Conservation Act of 
1977.

           *       *       *       *       *       *       *

    Sec. 8. The provisions of this Act shall be effective for 
the period beginning October 1, 1978, and ending September 30, 
[2000] 2006.

           *       *       *       *       *       *       *


SEC. 6704. OFFICE OF INTERNATIONAL FORESTRY.

    (a) Establishment.--The Secretary, acting through the Chief 
of the Forest Service, shall establish an Office of 
International Forestry within the Forest Service within six 
months after November 28, 1990.
    (b) Deputy Chief Designation.--The Chief shall appoint a 
Deputy Chief for International Forestry.
    (c) Duties.--The Deputy Chief shall--
          (1) be responsible for the international forestry 
        activities of the Forest Service;
          (2) coordinate the activities of the Forest Service 
        in implementing the provisions of this chapter; and
          (3) serve as Forest Service liaison to the director 
        for the program established pursuant to section 6701 of 
        this title.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated for each of fiscal years 1996 through [2002] 
2006 such sums as are necessary to carry out this section.

                                TITLE 9

              BIOMASS RESEARCH AND DEVELOPMENT ACT OF 2000

           *       *       *       *       *       *       *


SEC. 307. BIOMASS RESEARCH AND DEVELOPMENT INITIATIVE.

    (a) In General.--The Secretary of Agriculture and the 
Secretary of Energy, acting through their respective points of 
contact and in consultation with the Board, shall establish and 
carry out a Biomass Research and Development Initiative under 
which competitively awarded grants, contracts, and financial 
assistance are provided to, or entered into with, eligible 
entities to carry out research on biobased industrial products.

           *       *       *       *       *       *       *

    (e) Technology and Information Transfer to Agricultural 
Users.--
        (1) In general.--The Administrator of the Cooperative 
        State Research, Education, and Extension Service and 
        the Chief of the Natural Resources Conservation Service 
        shall ensure that applicable research results and 
        technologies from the Initiative are adapted, made 
        available, and disseminated through their respective 
        services, as appropriate.

           *       *       *       *       *       *       *

          (2) Report.--Not later than 5 years after the date of 
        the enactment of this Act, the Administrator of the 
        Cooperative State Research, Education, and Extension 
        Service and the Chief of the Natural Resources 
        Conservation Service shall submit to the committees of 
        Congress with jurisdiction over the Initiative a report 
        on the activities conducted by the services under this 
        subsection.
    [(f) Authorization of Appropriations.--In addition to funds 
appropriated for biomass research and development under the 
general authority of the Secretary of Energy to conduct 
research and development programs (which may also be used to 
carry out this title), there are authorized to be appropriated 
to the Department of Agriculture to carry out this title 
$49,000,000 for each of fiscal years 2000 through 2005.]

           *       *       *       *       *       *       *


SEC. 310. FUNDING.

    (a) In General.--Not later than 30 days after the date of 
enactment of this section, and on October 1, 2002, and each 
October 1 thereafter through October 1, 2005, out of any funds 
in the Treasury not otherwise appropriated, the Secretary of 
the Treasury shall transfer to the Secretary to carry out this 
section $15,000,000, 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. [310.] 311. TERMINATION OF AUTHORITY.

    The authority provided under this title shall terminate on 
[December 31, 2005] September 30, 2006.

           *       *       *       *       *       *       *


              CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

           *       *       *       *       *       *       *


SEC. 382N. TERMINATION OF AUTHORITY.

    This subtitle and the authority provided under this 
subtitle expire on October 1, 2002.

                        Subtitle L--Clean Energy

SEC. 388A. DEFINITIONS.

    In this subtitle:
          (1) Biomass.--
                  (A) In general.--The term ``biomass'' means 
                any organic material that is available on a 
                renewable or recurring basis.
                  (B) Inclusions.--The term ``biomass'' 
                includes--
                          (i) dedicated energy crops;
                          (ii) trees grown for energy 
                        production;
                          (iii) wood waste and wood residues;
                          (iv) plants (including aquatic 
                        plants, grasses, and agricultural 
                        crops);
                          (v) residues;
                          (vi) fibers; and
                          (vii) animal wastes and other waste 
                        materials and
                          (viii) fats and oils.
                  (C) Exclusions.--The term ``biomass'' does 
                not include--
                          (i) old-growth timber (as determined 
                        by the Secretary);
                          (ii) paper that is commonly recycled; 
                        or
                          (iii) unsegregated garbage.
          (2) Renewable energy.--The term ``renewable energy'' 
        means energy derived from a wind, solar, biomass, 
        geothermal, or hydrogen source.
          (3) Rural small business.--The term ``rural small 
        business'' has the meaning that the Secretary shall 
        prescribe by regulation.

                CHAPTER 1--BIOBASED PRODUCT DEVELOPMENT

SEC. 388B. BIOBASED PRODUCT PURCHASING REQUIREMENT.

    (a) Definitions.--In this section:
          (1) Administrator.--The term ``Administrator'' means 
        the Administrator of the Environmental Protection 
        Agency.
          (2) Biobased product.--The term ``biobased product'' 
        means a commercial or industrial product, as determined 
        by the Secretary (other than food or feed), that uses 
        biological products or renewable domestic agricultural 
        materials (including plant, animal, and marine 
        materials) or forestry materials.
          (3) Environmentally preferable.--The term 
        ``environmentally preferable'', with respect to a 
        biobased product, refers to a biobased product that 
        has a lesser or reduced effect on human health and 
        the environment when compared with competing 
        nonbiobased products that serve the same purpose.
    (b) Biobased Product Purchasing.--
          (1) Mandatory purchasing requirement for listed 
        biobased products.--
                  (A) In general.--Except as provided in 
                subparagraph (B), not later than 180 days after 
                the date of enactment of this subtitle, the 
                head of each Federal agency shall ensure that, 
                in purchasing any product, the Federal agency 
                purchases a biobased product, rather than a 
                comparable nonbiobased product, if the biobased 
                product is listed on the list of biobased 
                products published under subsection (c)(1).
                  (B) Biobased product not reasonably 
                comparable.--A Federal agency shall not be 
                required to purchase a biobased product under 
                subparagraph (A) if the purchasing employee 
                submits to the Secretary and the Administrator 
                of the Office of Federal Procurement Policy a 
                written determination that the biobased product 
                is not reasonably comparable to nonbiobased 
                products in price, performance, or 
                availability.
                  (C) Conflicting requirements.--The Secretary 
                and the Administrator shall jointly promulgate 
                regulations with which Federal agencies shall 
                comply in cases of a conflict between the 
                biobased product purchasing requirement under 
                subparagraph (A) and a purchasing requirement 
                under any other provision of law.
          (2) Purchasing of nonlisted biobased products.--The 
        head of each Federal agency is encouraged to purchase, 
        to the maximum extent practicable, available biobased 
        products that are not listed on the list of biobased 
        products published under subsection (c)(1) when the 
        Federal agency is not required to purchase a biobased 
        product that is on the list.
    (c) Administrative Action.--
          (1) List of biobased products.--
                  (A) In general.--Not later than 180 days 
                after the date of enactment of this subtitle, 
                and annually thereafter, the Secretary, in 
                consultation with the Administrator and the 
                Director of the National Institute of Standards 
                and Technology, shall publish a list of 
                biobased products.
                  (B) Environmentally preferable biobased 
                products.--The Secretary shall not include on 
                the list under paragraph (1) biobased products 
                that are not environmentally preferable, as 
                determined by the Secretary.
                  (C) Grants.--The Secretary may award grants 
                to, or enter into contracts or cooperative 
                agreements with, eligible persons, businesses, 
                or institutions (as determined by the 
                Secretary) to assist in collecting data 
                concerning the evaluation of and lifecycle 
                analyses of biobased products for use in making 
                the determinations necessary to carry out 
                paragraph (1).
          (2) Guidance.--Not later than 240 days after the date 
        of enactment of this subtitle, the Office of Federal 
        Procurement Policy and Federal Acquisition Regulation 
        Council shall make the Federal Acquisition Regulation 
        consistent with subsection (b).
    (d) Education and Outreach Program.--The Secretary, in 
cooperation with the Defense Acquisition University and the 
Federal Acquisition Institute, shall conduct education programs 
for all Federal procurement officers regarding biobased 
products and the requirements of subsection (b).
    (e) Labeling.--
          (1) In general.--The Secretary shall develop a 
        program, similar to the Energy Star program of the 
        Department of Energy and the Environmental Protection 
        Agency, under which the Secretary authorizes producers 
        of environmentally preferable biobased products to use 
        a label that identifies the products as environmentally 
        preferable biobased products.
          (2) Environmentally preferable biobased products.--
        The Secretary shall monitor and take appropriate action 
        regarding the use of labels under paragraph (1) to 
        ensure that the biobased products using the labels do 
        not include biobased products that are not 
        environmentally preferable, as determined by the 
        Secretary.
          (3) Contracting.--In carrying out paragraph (1), the 
        Secretary may contract with appropriate entities with 
        expertise in product labeling and standard setting.
    (f) Goal.--It shall be the goal of each Federal agency in 
each year to purchase biobased products of an aggregate value 
that is not less than 5 percent of the aggregate value of all 
products purchased by the Federal agency during the preceding 
fiscal year.
    (g) Reports.--As soon as practicable after the end of each 
fiscal year, the Secretary and the Office of Federal 
Procurement Policy shall jointly submit to Congress an annual 
report that, for the fiscal year, describes the extent of--
          (1) compliance by each Federal agency with subsection 
        (b); and
          (2) the success of each Federal agency in achieving 
        the goal established under subsection (f).
    (h) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $2,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 388C. BIOREFINERY DEVELOPMENT GRANTS.

    (a) Purpose.--The purpose of this section is to assist in 
the development of new and emerging technologies for the 
conversion of biomass into petroleum substitutes, so as to--
          (1) develop transportation and other fuels and 
        chemicals from renewable sources;
          (2) reduce the dependence of the United States on 
        imported oil;
          (3) reduce greenhouse gas emissions;
          (4) diversify markets for raw agricultural and 
        forestry products; and
          (5) create jobs and enhance the economic development 
        of the rural economy.
    (b) Definitions.--In this section:
          (1) Advisory committee.--The term ``Advisory 
        Committee'' means the Biomass Research and Development 
        Technical Advisory Committee established by section 306 
        of the Biomass Research and Development Act of 2000 (7 
        U.S.C. 7624 note; Public Law 106-224).
          (2) Biorefinery.--The term ``biorefinery'' means 
        equipment and processes that--
                  (A) convert biomass into bioenergy fuels and 
                chemicals; and
                  (B) may produce electricity as a byproduct.
          (3) Board.--The term ``Board'' means the Biomass 
        Research and Development Board established by section 
        305 of the Biomass Research and Development Act of 2000 
        (7 U.S.C. 7624 note; Public Law 106-224).
          (4) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 
        450b).
    (c) Grants.--The Secretary shall award grants to eligible 
entities to assist in paying the cost of development and 
construction of biorefineries to carry out projects to 
demonstrate the commercial viability of 1 or more processes for 
converting biomass to fuels or chemicals.
    (d) Eligible Entities.--A corporation, farm cooperative, 
association of farmers, national laboratory, university, State 
energy agency or office, Indian tribe, or consortium comprised 
of any of those entities shall be eligible to receive a grant 
under subsection (c).
    (e) Competitive Basis for Awards.--
          (1) In general.--The Secretary shall award grants 
        under subsection (c) on a competitive basis in 
        consultation with the Board and Advisory Committee.
          (2) Selection criteria.--
                  (A) In general.--The Secretary shall select 
                projects to receive grants under subsection (c) 
                based on--
                          (i) the likelihood that the projects 
                        will demonstrate the commercial 
                        viability of a process for converting 
                        biomass to fuels or chemicals; and
                          (ii) the likelihood that the projects 
                        will produce electricity.
                  (B) Factors.--The factors to be considered 
                under subparagraph (A) shall include--
                          (i) the potential market for the 
                        product or products;
                          (ii) the quantity of petroleum the 
                        product will displace;
                          (iii) the level of financial 
                        participation by the applicants;
                          (iv) the availability of adequate 
                        funding from other sources;
                          (v) the beneficial impact on resource 
                        conservation and the environment;
                          (vi) the participation of producer 
                        associations and cooperatives;
                          (vii) the timeframe in which the 
                        project will be operational;
                          (viii) the potential for rural 
                        economic development; and
                          (ix) the participation of multiple 
                        eligible entities.
    (f) Cost Sharing.--
          (1) In general.--Except as provided in paragraph (2), 
        the amount of a grant for a project awarded under 
        subsection (c) shall not exceed 30 percent of the cost 
        of the project.
          (2) Increased grant amount.--The Secretary may 
        increase the amount of a grant for a project under 
        subsection (c) to not more than 50 percent in the case 
        of a project that the Secretary finds particularly 
        meritorious.
          (3) Form of grantee share.--
                  (A) In general.--The grantee share of the 
                cost of a project may be made in the form of 
                cash or the provision of services, material, or 
                other in-kind contributions.
                  (B) Limitation.--The amount of the grantee 
                share of the cost of a project that is made in 
                the form of the provision of services, 
                material, or other in-kind contributions shall 
                not exceed 25 percent of the amount of the 
                grantee share determined under paragraph (1).
    (g) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $15,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 388D. BIODIESEL FUEL EDUCATION PROGRAM.

    (a) Findings.--Congress finds that--
          (1) biodiesel fuel use can help reduce greenhouse gas 
        emissions and public health risks associated with air 
        pollution;
          (2) biodiesel fuel use enhances energy security by 
        reducing petroleum consumption;
          (3) biodiesel fuel is nearing the transition from the 
        research and development phase to commercialization;
          (4) biodiesel fuel is still relatively unknown to the 
        public and even to diesel fuel users; and
          (5) education of, and provision of technical support 
        to, current and future biodiesel fuel users will be 
        critical to the widespread use of biodiesel fuel.
    (b) Establishment.--The Secretary shall, under such terms 
and conditions as are appropriate, offer 1 or more competitive 
grants to eligible entities to educate Federal, State, 
regional, and local government entities and private entities 
that operate vehicle fleets, other interested entities (as 
determined by the Secretary), and the public about the benefits 
of biodiesel fuel use.
    (c) Eligible Entities.--To receive a grant under subsection 
(b), an entity--
          (1) shall be a nonprofit organization; and
          (2) shall have demonstrated expertise in biodiesel 
        fuel production, use, and distribution.
    (d) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $5,000,000 for 
each of fiscal years 2002 through 2006, to remain available 
until expended.

     CHAPTER 2--RENEWABLE ENERGY DEVELOPMENT AND ENERGY EFFICIENCY

SEC. 388E. RENEWABLE ENERGY DEVELOPMENT LOAN AND GRANT PROGRAM.

    (a) In General.--The Secretary, acting through the Rural 
Business Cooperative Service, in addition to exercising 
authority to make loans and loan guarantees under other law, 
shall establish a program under which the Secretary shall make 
loans and loan guarantees and competitively award grants to 
assist farmers and ranchers in projects to establish new, or 
expand existing, farmer or rancher cooperatives, or other rural 
business ventures (as determined by the Secretary), to--
          (1) enable farmers and ranchers to become owners of 
        sources of renewable electric energy and marketers of 
        electric energy produced from renewable sources;
          (2) provide new income streams for farmers and 
        ranchers;
          (3) increase the quantity of electricity available 
        from renewable energy sources; and
          (4) provide environmental and public health benefits 
        to rural communities and the United States as a whole.
    (b) Ownership Requirement.--At least 51 percent of the 
interest in a rural business venture assisted with a grant 
under subsection (a) shall be owned by farmers or ranchers.
    (c) Maximum Amount of Loans and Grants.--
          (1) Loans.--The amount of a loan made or guaranteed 
        for a project under subsection (a) shall not exceed 
        $10,000,000.
          (2) Grants.--The amount of a grant made for a project 
        under subsection (a) shall not exceed $200,000 for a 
        fiscal year.
    (d) Cost Sharing.--
          (1) In general.--The total amount of loans made or 
        guaranteed or grants awarded under subsection (a) for a 
        project shall not exceed 50 percent of the cost of the 
        activity funded by the loan or grant.
          (2) Form of grantee share.--
                  (A) In general.--The grantee share of the 
                cost of the activity may be made in the form of 
                cash or the provision of services, material, or 
                other in-kind contributions.
                  (B) Limitation.--The amount of the grantee 
                share of the cost of a project that is made in 
                the form of the provision of services, 
                material, or other in-kind contributions shall 
                not exceed 25 percent of the amount of the non-
                Federal share, as determined under paragraph 
                (1).
    (e) Interest Rate.--A loan made or guaranteed under 
subsection (a) shall bear an interest rate that does not to 
exceed 4 percent.
    (f) Use of Funds.--
          (1) Permitted uses.--
                  (A) Grants.--A recipient of a grant awarded 
                under subsection (a) may use the grant funds to 
                develop a business plan or perform a 
                feasibility study to establish a viable 
                marketing opportunity for renewable electric 
                energy generation and sale.
                  (B) Loans.--A recipient of a loan or loan 
                guarantee under subsection (a) may use the loan 
                funds to provide capital for start-up costs 
                associated with the rural business venture or 
                the promotion of the aggregation of renewable 
                electric energy sources.
          (2) Prohibited uses.--A recipient of a loan, loan 
        guarantee, or grant under subsection (a) shall not use 
        the loan or grant funds for planning, repair, 
        rehabilitation, acquisition, or construction of a 
        building or other facility.
    (g) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $16,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.
          (3) Loan and interest subsidies.--In the case of a 
        loan or loan guarantee under subsection (a), the 
        Secretary shall use funds under paragraph (1) to pay 
        the cost of loan and interest subsidies necessary to 
        carry out this section.

SEC. 388F. ENERGY AUDIT AND RENEWABLE ENERGY DEVELOPMENT PROGRAM.

    (a) In General.--The Secretary, acting through the Rural 
Business Cooperative Service, shall make competitive grants to 
eligible entities to enable the eligible entities to carry out 
a program to assist farmers and ranchers, and to rural small 
businesses (as determined by the Secretary) in becoming more 
energy efficient and in using renewable energy technology.
    (b) Eligible Entities.--Entities eligible to carry out a 
program under subsection (a) include--
          (1) a State energy or agricultural office;
          (2) a regional or State-based energy organization or 
        energy organization of an Indian tribe (as defined in 
        section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450b));
          (3) a land-grant college or university (as defined in 
        section 1404 of the National Agricultural Research, 
        Extension, and Teaching Policy Act of 1977 (7 U.S.C. 
        3103)) or other college or university;
          (4) a farm bureau or organization;
          (5) a rural electric cooperative or utility;
          (6) a nonprofit organization; and
          (7) any other entity, as determined by the Secretary.
    (c) Merit Review.--
          (1) Merit review panel.--The Secretary shall 
        establish a merit review panel to review applications 
        for grants under subsection (a) that draws on the 
        expertise of other Federal agencies (including the 
        Department of Energy and the Environmental Protection 
        Agency),industry, and nongovernmental organizations.
          (2) Selection criteria.--In reviewing applications of 
        eligible entities to receive grants under subsection 
        (a), the merit review panel shall consider--
                  (A) the ability and expertise of the eligible 
                entity in providing professional energy audits 
                and renewable energy assessments;
                  (B) the geographic scope of the program 
                proposed by the eligible entity;
                  (C) the number of farmers, ranchers, and 
                rural small businesses to be assisted by the 
                program;
                  (D) the potential for energy savings and 
                environmental and public health benefits 
                resulting from the program; and
                  (E) the plan of the eligible entity for 
                educating farmers, ranchers, and rural small 
                businesses on the benefits of energy efficiency 
                and renewable energy development.
    (d) Use of Grant Funds.--A recipient of a grant under 
subsection (a) shall use the grant funds to--
          (1)(A) conduct energy audits for farmers, ranchers, 
        and rural small businesses to provide farmers, 
        ranchers, and rural small businesses recommendations 
        for energy efficiency and renewable energy development 
        opportunities; and
          (B) conduct workshops on that subject as appropriate;
          (2) make farmers, ranchers, and rural small 
        businesses aware of and ensure that they have access 
        to--
                  (A) financial assistance under section 388G; 
                and
                  (B) other Federal, State, and local financial 
                assistance programs for which farmers, 
                ranchers, and rural small businesses may be 
                eligible; and
          (3) arrange private financial assistance to farmers, 
        ranchers, and rural small businesses on favorable 
        terms.
    (e) Cost Sharing.--
          (1) In general.--A recipient of a grant under 
        subsection (a) that conducts an energy audit for a 
        farmer, rancher, or rural small business under 
        subsection (d)(1) shall require that, as a condition to 
        the conduct of the energy audit, the farmer, rancher, 
        or rural small business pay at least 25 percent of the 
        cost of the audit.
          (2) Implementation of recommendations.--If a farmer, 
        rancher, or rural small business substantially 
        implements the recommendations made in connection with 
        an energy audit, the Secretary may reimburse the 
        farmer, rancher, or rural small business the amount 
        that is equal to the share of the cost paid by the 
        farmer, rancher, or rural small business under 
        paragraph (1).
    (f) Reports.--The Secretary shall submit to the Committee 
on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate 
an annual report on the implementation of this section.
    (g) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $15,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 388G. LOANS, LOAN GUARANTEES, AND GRANTS TO FARMERS, RANCHERS, AND 
                    RURAL SMALL BUSINESSES FOR RENEWABLE ENERGY SYSTEMS 
                    AND ENERGY EFFICIENCY IMPROVEMENTS.

    (a) In General.--In addition to exercising authority to 
make loans and loan guarantees under other law, the Secretary 
shall make loans, loan guarantees, and grants to farmers, 
ranchers, and rural small businesses to--
          (1) purchase renewable energy systems; and
          (2) make energy efficiency improvements.
    (b) Eligibility of Farmers and Ranchers.--To be eligible to 
receive a grant under subsection (a) for a fiscal year, a 
farmer or rancher shall have produced not more than $1,000,000 
in market value of agricultural products during the preceding 
fiscal year, as determined by the Secretary.
    (c) Cost Sharing.--
          (1) Renewable energy systems.--
                  (A) In general.--
                          (i) Grants.--The amount of a grant 
                        made under subsection (a) for a 
                        renewable energy system shall not 
                        exceed 15 percent of the cost of the 
                        renewable energy system.
                          (ii) Loans.--The amount of a loan 
                        made or guaranteed under subsection (a) 
                        for a renewable energy system shall not 
                        exceed 35 percent of the cost of the 
                        renewable energy system.
                  (B) Factors.--In determining the amount of a 
                grant or loan under subparagraph (A), the 
                Secretary shall take into consideration--
                          (i) the type of renewable energy 
                        system to be purchased;
                          (ii) the estimated quantity of energy 
                        to be generated or displaced by the 
                        renewable energy system;
                          (iii) the expected environmental 
                        benefits of the renewable energy 
                        system;
                          (iv) the extent to which the 
                        renewable energy system will be 
                        replicable; and
                          (v) other factors as appropriate.
          (2) Energy efficiency improvements.--
                  (A) In general.--
                          (i) Grants.--The amount of a grant 
                        made under subsection (a) for an energy 
                        efficiency improvement shall not exceed 
                        15 percent of the cost of the energy 
                        efficiency improvement.
                          (ii) Loans.--The amount of a loan 
                        made or guaranteed under subsection (a) 
                        for an energy efficiency project shall 
                        not exceed 35 percent of the cost of 
                        the energy efficiency improvement.
                  (B) Factors.--In determining the amount of a 
                grant or loan under subparagraph (A), the 
                Secretary shall take into consideration--
                          (i) the estimated length of time it 
                        would take for the energy savings 
                        generated by the improvement to equal 
                        the cost of the improvement;
                          (ii) the amount of energy savings 
                        expected to be derived from the 
                        improvement; and
                          (iii) other factors as appropriate.
    (d) Interest Rate.--A loan made or guaranteed under 
subsection (a) shall bear interest at a rate not exceeding 4 
percent.
    (e) Energy Audit and Renewable Energy Development 
Program.--
          (1) Preference.--In making loans, loan guarantees, 
        and grants under subsection (a), the Secretary shall 
        give preference to participants in the energy audit and 
        renewable energy development program under section 
        388F.
          (2) Reservation of funding.--The Secretary shall 
        reserve at least 25 percent of the funds made available 
        to carry out this section for each of fiscal years 2002 
        through 2006 to participants in the energy audit and 
        renewable energy development program under section 
        388F.
    (f) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $33,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.
          (3) Loan and interest subsidies.--In the case of a 
        loan or loan guarantee under subsection (a), the 
        Secretary shall use funds under paragraph (1) to pay 
        the cost of loan and interest subsidies necessary to 
        carry out this section.

SEC. 388H. HYDROGEN AND FUEL CELL TECHNOLOGIES PROGRAM.

    (a) In General.--The Secretary of Agriculture, in 
consultation with the Secretary of Energy, shall establish a 
program under which the Secretary of Agriculture shall 
competitively award grants to, or enter into contracts or 
cooperative agreements with, eligible entities for--
          (1) projects to demonstrate the use of hydrogen 
        technologies and fuel cell technologies in farm, ranch, 
        and rural applications; and
          (2) as appropriate, studies of the technical, 
        environmental, and economic viability, in farm and 
        rural applications, of innovative hydrogen and fuel 
        cell technologies not ready for demonstration.
    (b) Eligible Entities.--Under subsection (a), the Secretary 
may make a grant to or enter into a contract or cooperative 
agreement with--
          (1) a Federal research agency;
          (2) a national laboratory;
          (3) a college or university or a research foundation 
        maintained by a college or university;
          (4) a private research organization with an 
        established and demonstrated capacity to perform 
        research or technology transfer;
          (5) a State agricultural experiment station; or
          (6) an individual.
    (c) Selection Criteria.--In selecting projects for grants, 
contracts, and cooperative agreements under subsection (a)(1), 
the Secretary shall give preference to projects that 
demonstrate technologies that--
          (1) are innovative;
          (2) use renewable energy sources;
          (3) produce multiple sources of energy;
          (4) provide significant environmental benefits;
          (5) are likely to be economically competitive; and
          (6) have potential for commercialization as mass-
        produced, farm-sized systems.
    (d) Cost Sharing.--The amount of financial assistance 
provided for a project under a grant, contract, or cooperative 
agreement under subsection (a) shall not exceed 50 percent of 
the cost of the project.
    (e) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this subtitle, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $5,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.

SEC. 388I. TECHNICAL ASSISTANCE FOR FARMERS AND RANCHERS TO DEVELOP 
                    RENEWABLE ENERGY RESOURCES.

    (a) In General.--The Secretary, acting through the 
Cooperative State Research, Education, and Extension Service in 
consultation with the Natural Resources Conservation Service, 
regional biomass programs under the Department of Energy, and 
other entities as appropriate, may provide for education and 
technical assistance to farmers and ranchers for the 
development and marketing of renewable energy resources.
    (b) Administrative Expenses.--The Secretary may retain up 
to 4 percent of the amounts made available for each fiscal year 
to carry out this section to pay administrative expenses 
incurred in carrying out this section.

      CHAPTER 3--CARBON SEQUESTRATION RESEARCH, DEVELOPMENT, AND 
                         DEMONSTRATION PROGRAM

SEC. 388J. RESEARCH.

    (a) Basic Research.--
          (1) In general.--Subject to the availability of 
        appropriations, the Secretary shall carry out research 
        to promote understanding of--
                  (A) the net sequestration of organic carbon 
                in soils and plants (including trees); and
                  (B) net emissions of other greenhouse gases 
                from agriculture.
          (2) Agricultural research service.--The Secretary, 
        acting through the Agricultural Research Service, shall 
        collaborate with other Federal agencies in developing 
        data and carrying out research addressing carbon losses 
        and gains in soils and plants (including trees) and net 
        emissions of methane and nitrous oxide from cultivation 
        and animal management activities.
          (3) Cooperative state research, education, and 
        extension service.--
                  (A) In general.--The Secretary, acting 
                through the Cooperative State Research, 
                Education, and Extension Service, shall 
                establish a competitive grant program to carry 
                out research on the matters described in 
                paragraph (1) by eligible entities.
                  (B) Eligible entities.--Uner subparagraph 
                (A), the Secretary may make a grant to--
                          (i) a Federal research agency;
                          (ii) a national laboratory;
                          (iii) a college or university or a 
                        research foundation maintained by a 
                        college or university;
                          (iv) a private research organization 
                        with an established and demonstrated 
                        capacity to perform research or 
                        technology transfer;
                          (v) a State agricultural experiment 
                        station; or
                          (vi) an individual.
                  (C) Consultation on research topics.--Before 
                issuing a request for proposals for basic 
                research under paragraph (1), the Cooperative 
                State Research, Education, and Extension 
                Service shall consult with the Agricultural 
                Research Service and the Forest Service to 
                ensure that proposed research areas are 
                complementary with and do not duplicate 
                research projects funded by the Department or 
                other Federal agencies.
                  (D) Administrative expenses.--The Secretary 
                may retain up to 4 percent of the amounts made 
                available for each fiscal year to carry out 
                this subsection to pay administrative expenses 
                incurred in carrying out this subsection.
    (b) Applied Research.--
          (1) In general.--The Secretary shall carry out 
        applied research in the areas of soil science, 
        agronomy, agricultural economics, forestry, and other 
        agricultural sciences to--
                  (A) promote understanding of--
                          (i) how agricultural and forestry 
                        practices affect the sequestration of 
                        organic and inorganic carbon in soils 
                        and plants (including trees) and net 
                        emissions of other greenhouse gases;
                          (ii) how changes in soil carbon pools 
                        in soils and plants (including trees) 
                        are cost-effectively measured, 
                        monitored, and verified; and
                          (iii) how public programs and private 
                        market approaches can be devised to 
                        incorporate carbon sequestration in a 
                        broader societal greenhouse gas 
                        emission reduction effort;
                  (B) develop methods for establishing 
                baselines for measuring the quantities of 
                carbon and other greenhouse gases sequestered; 
                and
          (C) evaluate leakage and performance issues.
          (2) Requirements.--To the maximum extent practicable, 
        applied research under paragraph (1) shall--
                  (A) use existing technologies and methods; 
                and
                  (B) provide methodologies that are accessible 
                to a nontechnical audience.
          (3) Minimization of adverse environmental impacts.--
        All applied research under paragraph (1) shall be 
        conducted with an emphasis on minimizing adverse 
        environmental impacts.
          (4) Natural resources and the environment.--The 
        Secretary, acting through the Natural Resources 
        Conservation Service and the Forest Service, shall 
        collaborate with other Federal agencies in developing 
        new measuring techniques and equipment or adapting 
        existing techniques and equipment to enable cost-
        effective and accurate monitoring and verification, for 
        a wide range of agricultural and forestry practices, 
        of--
                  (A) changes in carbon content in soils and 
                plants (including trees); and
                  (B) net emissions of other greenhouse gases.
          (5) Cooperative state research, education, and 
        extension service.--
                  (A) In general.--The Secretary, acting 
                through the Cooperative State Research, 
                Education, and Extension Service and the Forest 
                Service, shall establish a competitive grant 
                program to encourage research on the matters 
                described in paragraph (1) by eligible 
                entities.
                  (B) Eligible entities.--Under subparagraph 
                (A), the Secretary may make a grant to--
                          (i) a Federal research agency;
                          (ii) a national laboratory;
                          (iii) a college or university or a 
                        research foundation maintained by a 
                        college or university;
                          (iv) a private research organization 
                        with an established and demonstrated 
                        capacity to perform research or 
                        technology transfer;
                          (v) a State agricultural experiment 
                        station; or
                          (vi) an individual.
                  (C) Consultation on research topics.--Before 
                issuing a request for proposals for applied 
                research under paragraph (1), the Cooperative 
                State Research, Education, and Extension 
                Service and the Forest Service shall consult 
                with the Natural Resources Conservation Service 
                and the Agricultural Research Service to ensure 
                that proposed research areas are complementary 
                with and do not duplicate research projects 
                funded by the Department of Agriculture or other 
                Federal agencies.
                  (D) Administrative expenses.--The Secretary, 
                acting through the Cooperative State Research, 
                Education, and Extension Service, may retain up 
                to 4 percent of the amounts made available for 
                each fiscal year to carry out this subsection 
                to pay administrative expenses incurred in 
                carrying out this subsection.
    (c) Research Consortia.--
          (1) In general.--The Secretary may designate not more 
        than 2 research consortia to carry out research 
        projects under this section, with the requirement that 
        the consortia propose to conduct basic research under 
        subsection (a) and applied research under subsection 
        (b) .
          (2) Selection.--The consortia shall be selected on a 
        competitive basis by the Cooperative State Research, 
        Education, and Extension Service.
          (3) Eligible consortium participants.--Entities 
        eligible to participate in a consortium include--
                  (A) a land grant college and university (as 
                defined in section 1404 of the National 
                Agricultural Research, Extension, and Teaching 
                Policy Act of 1977 (7 U.S.C. 3103));
                  (B) a private research institution;
                  (C) a State agency;
                  (D) an Indian tribe (as defined in section 4 
                of the Indian Self-Determination and Education 
                Assistance Act (25 U.S.C. 450b));
                  (E) an agency of the Department of 
                Agriculture;
                  (F) a research center of the National 
                Aeronautics and Space Administration and the 
                Department of Energy, or any other Federal 
                agency;
                  (G) an agricultural business or organization 
                with demonstrated expertise in areas covered by 
                this section; and
                  (H) a representative of the private sector 
                with demonstrated expertise in the areas.
          (4) Reservation of funding.--If the Secretary 
        designates 1 or 2 consortia, the Secretary shall 
        reserve for research projects carried out by the 
        consortium or consortia not more than 25 percent of the 
        amounts made available to carry out this section for a 
        fiscal year.
    (d) Standards for Measuring Carbon and Other Greenhouse Gas 
Content.--
          (1) Conference.--Not later than 3 years after the 
        date of enactment of this subtitle, the Secretary shall 
        convene a conference of key scientific experts on 
        carbon sequestration from various sectors (including 
        the government, academic, and private sectors) to--
                  (A) discuss and establish benchmark standards 
                of precision for measuring the carbon content 
                of soils and plants (including trees) and net 
                emissions of other greenhouse gases;
                  (B) propose techniques and modeling 
                approaches for measuring carbon content with a 
                level of precision that is agreed on by the 
                participants in the conference; and
                  (C) evaluate results of analyses on baseline, 
                permanence, and leakage issues.
          (2) Report.--Not later than 180 days after the 
        conclusion of the conference under paragraph (1), the 
        Secretary shall submit to the Committee on Agriculture 
        of the House of Representatives and the Committee on 
        Agriculture, Nutrition, and Forestry of the Senate a 
        report on the results of the conference.
    (e) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated to carry out this section $25,000,000 for 
        each of fiscal years 2002 through 2006.
          (2) Allocation.--
                  (A) In general.--Of the amounts made 
                available to carry out this section for a 
                fiscal year, at least 50 percent shall be 
                allocated for competitive grants by the 
                Cooperative State Research, Education, and 
                Extension Service.
                  (B) Administrative expenses.--The Secretary 
                may retain up to 4 percent of the amounts made 
                available for each fiscal year to carry out 
                this section to pay administrative expenses 
                incurred in carrying out this section.

SEC. 388K. DEMONSTRATION PROJECTS AND OUTREACH.

    (a) Demonstration Projects.--
          (1) Development of monitoring programs.--
                  (A) In general.--The Secretary, in 
                cooperation with local extension agents, 
                experts from land grant universities, and other 
                local agricultural or conservation 
                organizations, shall develop user-friendly 
                programs that combine measurement tools and 
                modeling techniques into integrated packages to 
                monitor the carbon sequestering benefits of 
                conservation practices and net changes in 
                greenhouse gas emissions.
                  (B) Benchmark levels of precision.--The 
                Secretary shall administer programs developed 
                under subparagraph (A) in a manner that 
                achieves, to the maximum extent practicable, 
                benchmark levels of precision in the 
                measurement in a cost-effective manner, of 
                benefits and changes described in subparagraph 
                (A).
          (2) Projects.--
                  (A) In general.--The Secretary shall 
                establish a program under which the monitoring 
                programs developed under paragraph (1) are used 
                in projects to demonstrate the feasibility of 
                methods of measuring, verifying, and 
                monitoring--
                          (i) changes in organic carbon content 
                        and other carbon pools in soils and 
                        plants (including trees); and
                          (ii) net changes in emissions of 
                        other greenhouse gases.
                  (B) Evaluation of implications.--The projects 
                under subparagraph (A) shall include evaluation 
                of the implications for reassessed baselines, 
                carbon or other greenhouse gas leakage, and the 
                permanence of sequestration.
                  (C) Submission of proposals.--Proposals for 
                projects under subparagraph (A) shall be 
                submitted by the appropriate agency of each 
                State, in consultation with interested local 
                jurisdictions and State agricultural and 
                conservation organizations.
                  (D) Limitation.--Not more than 10 projects 
                under subparagraph (A) may be approved in 
                conjunction with applied research projects 
                under section 388J(b) until benchmark 
                measurement and assessment standards are 
                established under section 388J(d).
    (b) Outreach.--
          (1) In general.--The Secretary, acting through the 
        Cooperative State Research, Education, and Extension 
        Service shall widely disseminate information about the 
        economic and environmental benefits that can be 
        generated by adoption of conservation practices that 
        increase sequestration of carbon and reduce emission of 
        other greenhouse gases.
          (2) Project results.--The Secretary, acting through 
        the Cooperative State Research, Education, and 
        Extension Service shall provide for the dissemination 
        to farmers, ranchers, private forest landowners, and 
        appropriate State agencies in each State of information 
        concerning--
                  (A) the results of demonstration projects 
                under subsection (a)(2); and
                  (B) the manner in which the methods 
                demonstrated in the projects might be 
                applicable to the operations of the farmers and 
                ranchers.
          (3) Policy outreach.--The Secretary, acting through 
        the Cooperative State Research, Education, and 
        Extension Service shall disseminate information on the 
        connection between global climate change mitigation 
        strategies and agriculture and forestry, so that 
        farmers and ranchers may better understand the global 
        implications of the activities of farmers and ranchers.
    (c) Authorization of Appropriations.--
          (1) In general.--There is authorized to be 
        appropriated to carry out this section $10,000,000 for 
        each of fiscal years 2002 through 2006.
          (2) Allocation.--Of the amounts made available to 
        carry out this section for a fiscal year, at least 50 
        percent shall be allocated for demonstration projects 
        under subsection (a)(2).

           *       *       *       *       *       *       *


SEC. 21. FINANCIAL AND TECHNICAL ASSISTANCE FOR RENEWABLE ENERGY 
                    SYSTEMS.

    (a) Definition of Renewable Energy.--In this section, the 
term ``renewable energy'' means energy derived from a wind, 
solar, biomass, geothermal, or hydrogen source.
    (b) Loans, Loan Guarantees, and Grants.--The Secretary 
shall make loans, loan guarantees, and grants to rural electric 
cooperatives and other rural electric utilities to promote the 
development of economically and environmentally sustainable 
renewable energy projects to serve the needs of rural 
communities or for rural economic development.
    (c) Interest Rate.--A loan made or guaranteed under 
subsection (b) shall bear interest at a rate not exceeding 4 
percent.
    (d) Use of Funds.--
          (1) Grants.--A recipient of a grant under subsection 
        (a) may use the grant funds to pay up to 75 percent of 
        the cost of an economic feasibility study or technical 
        assistance for a renewable energy project.
          (2) Loans.--If a renewable energy project is 
        determined to be economically feasible, a recipient of 
        a loan or loan guarantee under subsection (a) may use 
        the loan funds to pay a percentage of the cost of the 
        project determined by the Secretary.
    (e) Funding.--
          (1) In general.--Not later than 30 days after the 
        date of enactment of this section, and on October 1, 
        2002, and each October 1 thereafter through October 1, 
        2005, out of any funds in the Treasury not otherwise 
        appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section 
        $9,000,000, to remain available until expended.
          (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under 
        paragraph (1), without further appropriation.
          (3) Loan and interest subsidies.--In the case of a 
        loan or loan guarantee under subsection (a), the 
        Secretary shall use funds under paragraph (1) to pay 
        the cost of loan and interest subsidies necessary to 
        carry out this section.

           *       *       *       *       *       *       *

    (7 U.S.C. 7621 et seq.) is amended by adding at the end the 
following:

SEC. 409. CARBON SEQUESTRATION DEMONSTRATION PROGRAM.

    (a) Definitions.--In this section:
          (1) Eligible project.--The term ``eligible project'' 
        means a project that is likely to result in--
                  (A) demonstrable reductions in net emissions 
                of greenhouse gases; or
                  (B) demonstrable net increases in the 
                quantity of carbon sequestered in soils and 
                forests.
          (2) Environmental trade.--The term ``environmental 
        trade'' means a transaction between an emitter of a 
        greenhouse gas and an agricultural producer under which 
        the emitter pays to the agricultural producer a fee to 
        sequester carbon or otherwise reduce emissions of 
        greenhouse gases.
          (3) Panel.--The term ``panel'' means the panel of 
        experts established under subsection (b)(4)(A).
          (4) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture, acting in consultation with--
                  (A) the Under Secretary of Agriculture for 
                Natural Resources and Environment;
                  (B) the Under Secretary of Agriculture for 
                Research, Education, and Economics;
                  (C) the Chief Economist of the Department; 
                and
                  (D) the panel.
    (b) Demonstration Program.--
          (1) Establishment.--Subject to the availability of 
        appropriations, the Secretary shall establish a program 
        to provide grants, on a competitive, cost-shared basis, 
        to agricultural producers to assist in paying the costs 
        incurred in measuring, estimating, monitoring, 
        verifying, auditing, and testing methodologies involved 
        in environmental trades (including costs incurred in 
        employing certified independent third persons to carry 
        out those activities).
          (2) Conditions for receipt of grant.--As a condition 
        of the acceptance of a grant under paragraph (1), an 
        agricultural producer shall--
                  (A) establish a carbon and greenhouse gas 
                monitoring, verification, and reporting system 
                that meets such requirements as the Secretary 
                shall prescribe; and
                  (B) under the system and through the use of 
                an independent third party for any necessary 
                monitoring, verifying, reporting, and auditing, 
                measure and report to the Secretary the 
                quantity of carbon sequestered, or the quantity 
                of greenhouse gas emissions reduced, as a 
                result of the conduct of an eligible project.
          (3) Criteria for award of grant.--
                  (A) In General.--In awarding a grant for an 
                eligible project under paragraph (1), the 
                Secretary shall take into consideration--
                          (i) the likelihood of the eligible 
                        project in succeeding in achieving 
                        greenhouse gas emissions reductions and 
                        net carbon sequestration increases; and
                          (ii) the usefulness of the 
                        information to be obtained from the 
                        eligible project in determining how 
                        best to quantify, monitor, and verify 
                        sequestered carbon or reductions in 
                        greenhouse gas emissions.
                  (B) Priority criteria.--The Secretary shall 
                give priority in awarding a grant under 
                paragraph (1) to an eligible project that--
                          (i) involves multiple parties, a 
                        whole farm approach, or any other 
                        approach, such as the aggregation of 
                        land areas, that would--
                                  (I) increase the 
                                environmental benefits or 
                                reduce the transaction costs of 
                                the eligible project; and
                                  (II) reduce the costs of 
                                measuring, monitoring, and 
                                verifying any net sequestration 
                                of carbon or net reduction in 
                                greenhouse gas emissions;
                          (ii) is designed to achieve long-term 
                        sequestration of carbon or long-term 
                        reductions in greenhouse gas emissions;
                          (iii) is designed to address concerns 
                        concerning leakage;
                          (iv) provides certain other benefits, 
                        such as improvements in--
                                  (I) soil fertility;
                                  (II) wildlife habitat;
                                  (III) water quality;
                                  (IV) soil erosion management;
                                  (V) the use of renewable 
                                resources to produce energy;
                                  (VI) the avoidance of 
                                ecosystem fragmentation; and
                                  (VII) the promotion of 
                                ecosystem restoration with 
                                native species; or
                          (v) does not involve--
                                  (I) the reforestation of land 
                                that has been deforested since 
                                1990; or
                                  (II) the conversion of native 
                                grassland.
          (4) Panel.--
                  (A) In general.--The Secretary shall 
                establish a panel to provide advice and 
                recommendations to the Secretary with respect 
                to criteria for awarding grants under this 
                subsection.
                  (B) Composition.--The panel shall be composed 
                of the following representatives, to be 
                appointed by the Secretary:
                          (i) Experts from each of--
                                  (I) the Department;
                                  (II) the Environmental 
                                Protection Agency; and
                                  (III) the Department of 
                                Energy.
                          (ii) Experts from nongovernmental and 
                        academic entities.
          (5) Payment of grant funds.--The Secretary shall 
        provide a grant awarded under this section in such 
        number of installments as is necessary to ensure proper 
        implementation of an eligible project.
    (c) Methodology Grant Program.--
          (1) Establishment.--The Secretary shall establish a 
        program to provide grants to determine the best 
        methodologies for estimating and measuring increases or 
        decreases in--
                  (A) agricultural greenhouse gas emissions; 
                and
                  (B) the quantity of carbon sequestered in 
                soils, forests, and trees.
          (2) Eligible recipients.--The Secretary shall award a 
        grant under paragraph (1), on a competitive basis, to a 
        college or university, or other research institution, 
        that seeks to demonstrate the viability of a 
        methodology described in paragraph (1).
    (d) Dissemination of Information.--As soon as practicable 
after the date of enactment of this section, the Secretary 
shall establish an Internet site through which agricultural 
producers may obtain information concerning--
          (1) potential environmental trades; and
          (2) activities of the Secretary under this section.
    (e) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $20,000,000 for 
each of fiscal years 2002 through 2006.

           *       *       *       *       *       *       *


                  AGRICULTURAL MARKETING ACT OF 1946

           *       *       *       *       *       *       *


                 Subtitle C--Country of Origin Labeling

SEC. 271. DEFINITIONS.

    In this subtitle:
          (1) Beef.--The term ``beef'' means meat produced from 
        cattle (including veal).
          (2) Covered commodity.--
                  (A) In general.--The term ``covered 
                commodity'' means--
                          (i) muscle cuts of beef, lamb, and 
                        pork;
                          (ii) ground beef, ground lamb, and 
                        ground pork;
                          (iii) farm-raised fish;
                          (iv) a perishable agricultural 
                        commodity; and
                          (v) peanuts.
                  (B) Exclusions.--The term ``covered 
                commodity'' does not include--
                          (i) processed beef, lamb, and pork 
                        food items; and
                          (ii) frozen entrees containing beef, 
                        lamb, and pork.
          (3) Farm-raised fish.--The term ``farm-raised fish'' 
        includes--
                  (A) farm-raised shellfish; and
                  (B) fillets, steaks, nuggets, and any other 
                flesh from a farm-raised fish or shellfish.
          (4) Food service establishment.--The term ``food 
        service establishment'' means a restaurant, cafeteria, 
        lunch room, food stand, saloon, tavern, bar, lounge, or 
        other similar facility operated as an enterprise 
        engaged in the business of selling food to the public.
          (5) Lamb.--The term ``lamb'' means meat, other than 
        mutton, produced from sheep.
          (6) Perishable agricultural commodity; retailer.--The 
        terms ``perishable agricultural commodity'' and 
        ``retailer'' have the meanings given the terms in 
        section 1(b) of the Perishable Agricultural Commodities 
        Act, 1930 (7 U.S.C. 499a(b)).
          (7) Pork.--The term ``pork'' means meat produced from 
        hogs.
          (8) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture, acting through the 
        Agricultural Marketing Service.

SEC. 272. NOTICE OF COUNTRY OF ORIGIN.

    (a) In General.--
          (1) Requirement.--Except as provided in subsection 
        (b), a retailer of a covered commodity shall inform 
        consumers, at the final point of sale of the covered 
        commodity to consumers, of the country of origin of the 
        covered commodity.
          (2) United states country of origin.--A retailer of a 
        covered commodity may designate the covered commodity 
        as having a United States country of origin only if the 
        covered commodity--
                  (A) in the case of beef, lamb, and pork, is 
                exclusively from an animal that is exclusively 
                born, raised, and slaughtered in the United 
                States; and
                  (B) in the case of farm-raised fish, is 
                hatched, raised, harvested, and processed in 
                the United States; and
                  (C) in the case of a perishable agricultural 
                commodities or peanut, is exclusively produced 
                in the United States.
    (b) Exemption for Food Service Establishments.--Subsection 
(a) shall not apply to a covered commodity if the covered 
commodity is--
          (1) prepared or served in a food service 
        establishment; and
          (2)(A) offered for sale or sold at the food 
        service establishment in normal retail quantities; or
          (B) served to consumers at the food service 
        establishment.
    (c) Method of Notification.--
          (1) In general.--The information required by 
        subsection (a) may be provided to consumers by means of 
        a label, stamp, mark, placard, or other clear and 
        visible sign on the covered commodity or on the 
        package, display, holding unit, or bin containing the 
        commodity at the final point of sale to consumers.
          (2) Labeled commodities.--If the covered commodity is 
        already individually labeled for retail sale regarding 
        country of origin, the retailer shall not be required 
        to provide any additional information to comply with 
        this section.
    (d) Audit Verification System.--The Secretary may require 
that any person that prepares, stores, handles, or distributes 
a covered commodity for retail sale maintain a verifiable 
recordkeeping audit trail that will permit the Secretary to 
ensure compliance with the regulations promulgated under 
section 274.
    (e) Information.--Any person engaged in the business of 
supplying a covered commodity to a retailer shall provide 
information to the retailer indicating the country of origin of 
the covered commodity.
    (f) Certification of Origin.--
          (1) Mandatory identification.--The Secretary shall 
        not use a mandatory identification system to verify the 
        country of origin of a covered commodity.
          (2) Existing certification programs.--To certify the 
        country of origin of a covered commodity, the Secretary 
        may use as a model certification programs in existence 
        on the date of enactment of this Act, including--
                  (A) the carcass grading and certification 
                system carried out under this Act;
                  (B) the voluntary country of origin beef 
                labeling system carried out under this Act;
                  (C) voluntary programs established to certify 
                certain premium beef cuts;
                  (D) the origin verification system 
                established to carry out the child and adult 
                care food program established under section 17 
                of the Richard B. Russell National School Lunch 
                Act (42 U.S.C. 1766); or
                  (E) the origin verification system 
                established to carry out the market access 
                program under section 203 of the Agricultural 
                Trade Act of 1978 (7 U.S.C. 5623).

SEC. 273. ENFORCEMENT.

    (a) In General.--Except as provided in subsection (b), 
section 253 shall apply to a violation of this subtitle.
    (b) Warnings.--If the Secretary determines that a retailer 
is in violation of section 272, the Secretary shall--
          (1) notify the retailer of the determination of the 
        Secretary; and
          (2) provide the retailer a 30-day period, beginning 
        on the date on which the retailer receives the notice 
        under paragraph (1) from the Secretary, during which 
        the retailer may take necessary steps to comply with 
        section 272.
    (c) Fines.--If, on completion of the 30-day period 
described in subsection (c)(2), the Secretary determines that 
the retailer has willfully violated section 272, after 
providing notice and an opportunity for a hearing before the 
Secretary with respect to the violation, the Secretary may fine 
the retailer in an amount determined by the Secretary.

SEC. 274. REGULATIONS.

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

SEC. 275. APPLICATION.

    This subtitle shall apply to the retail sale of a covered 
commodity beginning on the date that is 180 days after the date 
of the enactment of this subtitle.

           *       *       *       *       *       *       *


            Subtitle D--Commodity-Specific Grading Standards

SEC. 281. DEFINITION OF SECRETARY.

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

SEC. 282. QUALITY GRADE LABELING OF IMPORTED MEAT AND MEAT FOOD 
                    PRODUCTS.

    An imported carcass, part thereof, meat, or meat food 
product (as defined by the Secretary) shall not bear a label 
that indicates a quality grade issued by the Secretary.

SEC. 283. REGULATIONS.

    The Secretary shall promulgate such regulations as are 
necessary to ensure compliance with, and otherwise carry out, 
this subtitle.

           *       *       *       *       *       *       *


                       FEDERAL CROP INSURANCE ACT

           *       *       *       *       *       *       *


SEC. 508. CROP INSURANCE.

           *       *       *       *       *       *       *


    (e) Payment of Portion of Premium by Corporation.--
          (1) In general.--For the purpose of encouraging the 
        broadest possible participation of producers in the 
        catastrophic risk protection provided under subsection 
        (b) and the additional coverage provided under 
        subsection (c), the Corporation shall pay a part of the 
        premium in the amounts provided in accordance with this 
        subsection.

           *       *       *       *       *       *       *

          (3) Premium reduction.--If an approved insurance 
        provider determines that the provider may provide 
        insurance more efficiently than the expense 
        reimbursement amount established by the Corporation, 
        the approved insurance provider may reduce, subject to 
        the approval of the Corporation, the premium charged 
        the insured by an amount corresponding to the 
        efficiency. The approved insurance provider shall apply 
        to the Corporation for authority to reduce the premium 
        before making such a reduction, and the reduction shall 
        be subject to the rules, limitations, and procedures 
        established by the Corporation.
          (4) [Temporary prohibition] Prohibition on continuous 
        coverage.--Notwithstanding paragraph (2), during each 
        of the 2001 [through 2005] and subsequent reinsurance 
        years, additional coverage under subsection (c) shall 
        be available only in 5 percent increments beginning at 
        50 percent of the recorded or appraised average yield.
          (5) Premium payment disclosure.--Each policy or plan 
        of insurance under this title shall prominently 
        indicate the dollar amount of the portion of the 
        premium paid by the Corporation.
    (f) Eligibility.--

           *       *       *       *       *       *       *

    (m) Quality Loss Adjustment Coverage.--
          (1) Effect of coverage.--If a policy or plan of 
        insurance offered under this title includes quality 
        loss adjustment coverage, the coverage shall provide 
        for a reduction in the quantity of production of the 
        agricultural commodity considered produced during a 
        crop year, or a similar adjustment, as a result of the 
        agricultural commodity not meeting the quality 
        standards established in the policy or plan of 
        insurance.
          (2) Additional quality loss adjustment.--
                  (A) Producer option.--Notwithstanding any 
                other provision of law, in addition to the 
                quality loss adjustment coverage available 
                under paragraph (1), the Corporation shall 
                offer producers the option of purchasing 
                quality loss adjustment coverage on a basis 
                that is smaller than a unit with respect to an 
                agricultural commodity that satisfies each of 
                the following:
                          (i) The agricultural commodity is 
                        sold on an identity-preserved basis.
                          (ii) All quality determinations are 
                        made solely by the Federal agency 
                        designated to grade or classify the 
                        agricultural commodity.
                          (iii) All quality determinations are 
                        made in accordance with standards 
                        published by the Federal agency in the 
                        Federal Register.
                          (iv) The discount schedules that 
                        reflect the reduction in quality of the 
                        agricultural commodity are established 
                        by theSecretary.
                  (B) Basis for adjustment.--Under this 
                paragraph, the Corporation shall set the 
                quality standards below which quality losses 
                will be paid based on the variability of the 
                grade of the agricultural commodity from the 
                base quality for the agricultural commodity.
          (3) Review of criteria and procedures.--[The 
        Corporation]
                  (A) Review.--The Corporation shall contract 
                with a qualified person to review the quality 
                loss adjustment procedures of the Corporation 
                so that the procedures more accurately reflect 
                local quality discounts that are applied to 
                agricultural commodities insured under this 
                title. [Based on]
                  (B) Procedures.--Effective beginning not 
                later than the 2003 reinsurance year, based on 
                the review, the Corporation shall make 
                adjustments in the procedures, taking into 
                consideration the actuarial soundness of the 
                adjustment and the prevention of fraud, waste, 
                and abuse.

           *       *       *       *       *       *       *


                CONTROLLED SUBSTANCES ACT (21 U.S.C. 889)

           *       *       *       *       *       *       *


    Sec. 519. (a) As used in this section:
          (1) The term ``controlled substance'' has the same 
        meaning given such term in section 102(6) of the 
        Controlled Substances Act (21 U.S.C. 801(6)).
          (2) The term ``Secretary'' means the Secretary of 
        Agriculture.
          (3) The term ``State'' means each of the fifty 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, Guam, the Virgin Islands of the United 
        States, American Samoa, the Commonwealth of the 
        Northern Mariana Islands, or the Trust Territory of the 
        Pacific Islands.
    (b) Notwithstanding any other provision of law, following 
the date of enactment of this Act, any person who is convicted 
under Federal or State law of planting, cultivation, growing, 
producing, harvesting, or storing a controlled substance in any 
crop year shall be ineligible for--
          (1) as to any commodity produced during that crop 
        year, and the four succeeding crop years, by such 
        person--
                  [(A) any price support or payment made 
                available under the Agricultural Act of 1949 (7 
                U.S.C. 1421 et seq.), the Commodity Credit 
                Corporation Charter Act (15 U.S.C. 714 et 
                seq.), or any other Act;]
                  (A) contract payments under a contract, 
                marketing assistance loans, and any type of 
                price support or payment made available under 
                the Agricultural Market Transition Act (7 
                U.S.C. 7201 et seq.), the Commodity Credit 
                Corporation Charter Act (15 U.S.C. 714 et 
                seq.), or any other Act;
                  (B) a farm storage facility loan made under 
                section 4(h) of the Commodity Credit 
                Corporation Charter Act (15 U.S.C. 714b(h));
                  [(C) crop insurance under the Federal Crop 
                Insurance Act (7 U.S.C. 1501 et seq.);
                  [(D) a disaster payment made under the 
                Agricultural Act of 1949 (7 U.S.C. 1421 et 
                seq.); or]
                  (C) an indemnity payment under the Federal 
                Crop Insurance Act (7 U.S.C. 1501 et seq.);
                  (D) a disaster payment; or
                  (E) a loan made, insured or guaranteed under 
                the Consolidated Farm and Rural Development Act 
                (7 U.S.C. 1921 et seq.) or any other provision 
                of law administered by the Farmers Home 
                Administration; or
          (2) a payment made under section 4 or 5 of the 
        Commodity Credit Corporation Charter Act (15 U.S.C. 
        714b or 714c) for the storage of an agricultural 
        commodity that is--
                  (A) produced during that crop year, or any of 
                the four succeeding crop years, by such person; 
                and
                  (B) acquired by the Commodity Credit 
                Corporation[.]; or
          (3) during the crop year--
                  (A) a payment made pursuant to a contract 
                entered into under the environmental quality 
                incentives program under chapter 4 of subtitle 
                D of title XII of the Food Security Act of 1985 
                (16 U.S.C. 3839aa et seq.);
                  (B) a payment under any other provision of 
                subtitle D of title XII of that Act (16 U.S.C. 
                3830 et seq.);
                  (C) a payment under section 401 or 402 of the 
                Agricultural Credit Act of 1978 (16 U.S.C. 
                2201, 2202); or
                  (D) a payment, loan, or other assistance 
                under section 3 or 8 of the Watershed 
                Protection and Flood Prevention Act (16 U.S.C. 
                1003 and 1006a).

           *       *       *       *       *       *       *


                   PACKERS AND STOCKYARDS ACT, 1921

           *       *       *       *       *       *       *


SEC. 318. UNLAWFUL STOCKYARD PRACTICES INVOLVING NONAMBULATORY 
                    LIVESTOCK.

    (a) Definitions.--In this section:
          (1) Humanely euthanized.--The term ``humanely 
        euthanized'' meansto kill an animal by mechanical, 
chemical, or other means that immediately render the animal 
unconscious, with this state remaining until the animal's death.
          (2) Nonambulatory livestock.--The term 
        ``nonambulatory livestock'' means any livestock that is 
        unable to stand and walk unassisted.
    (b) Unlawful Practices.--
          (1) In general.--It shall be unlawful under section 
        312 for any stockyard owner, market agency, or dealer 
        to buy, sell, give, receive, transfer, market, hold, or 
        drag any nonambulatory livestock unless the 
        nonambulatory livestock has been humanely euthanized.
          (2) Exceptions.--
                  (A) Non-gipsa farms.--Paragraph (1) shall not 
                apply to any farm the animal care practices of 
                which are not subject to the authority of the 
                Grain Inspection, Packers, and Stockyards 
                Administration.
                  (B) Veterinary care.--Paragraph (1) shall not 
                apply in a case in which nonambulatory 
                livestock receive veterinary care intended to 
                render the livestock ambulatory.

           *       *       *       *       *       *       *


                          ANIMAL WELFARE ACT

           *       *       *       *       *       *       *


    Sec. 26. (a) It shall be unlawful for any person to 
knowingly sponsor or exhibit an animal in any animal fighting 
venture to which any animal was moved in interstate or foreign 
commerce.
    (b) It shall be unlawful for any person to knowingly sell, 
buy, transport, or deliver to another person or receive from 
another person for purposes of transportation, in interstate or 
foreign commerce, any dog or other animal for purposes of 
having the dog or other animal participate in an animal 
fighting venture.
    (c) It shall be unlawful for any person to knowingly use 
the mail service of the United States Postal Service or any 
interstate instrumentality for purposes of promoting or in any 
other manner furthering an animal fighting venture except as 
performed outside the limits of the State of the United States.
    [(d) Notwithstanding the provisions of subsections (a), 
(b), or (c) of this section, the activities prohibited by such 
subsections shall be unlawful with respect to fighting ventures 
involving live birds only if the fight is to take place in a 
State where it would be in violation of the laws thereof.]
    (d) Activities Not Subject to Prohibition.--This section 
does not apply to the selling, buying, transporting, or 
delivery of an animal in interstate or foreign commerce for any 
purpose, so long as the purpose does not include participation 
of the animal in an animal fighting venture.
    (e) Penalties.--Any person who violates subsection (a), 
(b), or (c) shall be fined not more than [$5,000] $15,000 or 
imprisoned for not more than [1 year] 2 years, or both, for 
each such violation.
    (f) The secretary or any other authorized by him shall make 
such investigations as the Secretary deems necessary to 
determine whether any person has violated or is violating any 
provision of this section, and the Secretary may obtain the 
assistance of the Federal Bureau of Investigations, the 
Department of the Treasury, or other law enforcement agencies 
of the United States, and State and local governmental 
agencies, in the conduct of such investigations, under 
cooperative agreements with such agencies. A warrant to search 
for and seize any animal which there is probable cause to 
believe was involved in any violation of this section may be 
issued by any judge of the United States or of a State court of 
record or by a United States magistrate within the district 
wherein the animal sought is located. Any United States marshal 
or any person authorized under this section to conduct 
investigations may apply for and execute any such warrant, and 
any animal seized under such a warrant shall be held by the 
United States marshal or other authorized person pending 
disposition thereof by the court in accordance with this 
paragraph (f). Necessary care including veterinary treatment 
shall be provided while the animals are so held in custody. Any 
animal involved in any violation of this section shall be 
liable to be proceeded against and forfeited to the United 
States at any time on complaint filed in any United States 
district court or other court of the United States for any 
jurisdiction in which the animal is found and upon a judgment 
of forfeiture shall be disposed of by sale for lawful purposes 
or by other humane means, as the court may direct. Costs 
incurred by the United States for care of animals seized and 
forfeited under this section shall be recoverable from the 
owner of the animals if he appears in such forfeiture 
proceeding or in a separate civil action brought in the 
jurisdiction in which the owner is found, resides, or transacts 
business.
    (g) For purposes of this section--
          (1) the term ``animal fighting venture'' means any 
        event whichinvolves a fight between at least two 
animals and is conducted for purposes of sport, wagering, or 
entertainment except that the term ``animal fighting venture'' shall 
not be deemed to include any activity the primary purpose of which 
involves the use of one or more animals in hunting another animal or 
animals, such as waterfowl, bird, raccoon, or fox hunting;
          (2) the term ``interstate or foreign commerce'' 
        means--
                  (A) any movement between any place in a State 
                to any place in another State or between places 
                in the same State through another State; or
                  (B) any movement from a foreign country into 
                any State or from any State into any foreign 
                country;
          (3) the term ``interstate instrumentality'' means 
        telegraph, telephone, radio, or television operating in 
        interstate or foreign commerce;
          (4) the term ``State'' means any State of the United 
        States, the District of Columbia, the Commonwealth of 
        Puerto Rico, and any territory or possession of the 
        United States;
          (5) the term ``animal'' means any live bird, or any 
        live dog or other mammal, except man; and
          (6) the conduct by any person of any activity 
        prohibited by this section shall not render such person 
        subject to the other sections of this Act as a dealer, 
        exhibitor, otherwise.
    (h)(1) The provisions of this Act shall not supersede or 
otherwise invalidate any such State, local, or municipal 
legislation or ordinance relating to animal fighting ventures 
except in case of a direct and irreconcilable conflict between 
any requirements thereunder and this Act or any rule, 
regulation, or standard hereunder.

           *       *       *       *       *       *       *


         FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 1990

           *       *       *       *       *       *       *


SEC. 2501. OUTREACH AND ASSISTANCE FOR SOCIALLY DISADVANTAGED FARMERS 
                    AND RANCHERS.

    [(a) Outreach and Assistance.--
          [(1) In general.--The Secretary of Agriculture 
        (hereafter referred to in this section as the 
        ``Secretary'') shall provide outreach and technical 
        assistance to encourage and assist socially 
        disadvantaged farmers and ranchers to own and operate 
        farms and ranches and to participate in agricultural 
        programs. This assistance should include information on 
        application and bidding procedures, farm management, 
        and other essential information to participate in 
        agricultural programs.
          [(2) Grants and contracts.--The Secretary may make 
        grants and enter into contracts and other agreements in 
        the furtherance of this section with the following 
        entities--
                  [(A) any community based organization that--
                          [(i) has demonstrated experience in 
                        providing agricultural education or 
                        other agriculturally related services 
                        to socially disadvantaged farmers and 
                        ranchers;
                          [(ii) provides documentary evidence 
                        of its past experience of working with 
                        socially disadvantaged farmers and 
                        ranchers during the two years preceding 
                        its application for assistance under 
                        this section; and
                          [(iii) does not engage in activities 
                        prohibited under section 501(c)(3) of 
                        the Internal Revenue Code of 1986; and
                  [(B) 1890 Land-Grant Colleges including 
                Tuskegee Institute, Indian tribal community 
                colleges and Alaska native cooperative 
                colleges, Hispanic serving post-secondary 
                educational institutions, and other post-
                secondary educational institutions with 
                demonstrated experience in providing 
                agriculture education or other agriculturally 
                related services to socially disadvantaged 
                family farmers and ranchers in their region.
          [(3) Funding.--There are authorized to be 
        appropriated $10,000,000 for each fiscal year to carry 
        out this section.]
    (a) Outreach and Assistance.--
          (1) Definitions.--In this subsection:
                  (A) Department.--The term ``Department'' 
                means the Department of Agriculture.
                  (B) Eligible entity.--The term ``eligible 
                entity'' means--
                          (i) any community-based organization, 
                        network, or coalition of community-
                        based organizations that--
                                  (I) has demonstrated 
                                experience in providing 
                                agricultural education or other 
                                agriculturally related services 
                                to socially disadvantaged 
                                farmers and ranchers;
                                  (II) has provided to the 
                                Secretary documentary evidence 
                                of work with socially 
                                disadvantaged farmers and 
                                ranchers during the 2-year 
                                period preceding the submission 
                                of an application for 
                                assistance under this 
                                subsection; and
                                  (III) has not engaged in 
                                activities prohibited under 
                                section 501(c)(3) of the 
                                Internal Revenue Code of 1986;
                          (ii)(I) an 1890 institution (as 
                        defined in section 2 of the 
                        Agricultural Research, Extension, and 
                        Education Reform Act of 1998 (7 U.S.C. 
                        7601)), including West Virginia State 
                        College;
                                  (II) a 1994 institution (as 
                                defined in section 2 of that 
                                Act);
                                  (III) an Indian tribal 
                                community college;
                                  (IV) an Alaska Native 
                                cooperative college;
                                  (V) a Hispanic-serving 
                                institution (as defined in 
                                section 1404 of the National 
                                Agricultural Research, 
                                Extension, and Teaching Policy 
                                Act of 1977 (7 U.S.C. 3103)); 
                                and
                                  (VI) any other institution of 
                                higher education (as defined in 
                                section 101 of the Higher 
                                Education Act of 1965 (20 
                                U.S.C. 1001)) that has 
                                demonstrated experience in 
                                providing agriculture education 
                                or other agriculturally related 
                                services to socially 
                                disadvantaged farmers and 
                                ranchers in a region; and
                          (iii) an Indian tribe (as defined in 
                        section 4 of the Indian Self-
                        Determination and Education Assistance 
                        Act (25 U.S.C. 450b)) or a national 
                        tribal organization that has 
                        demonstrated experience in providing 
                        agriculture education or other 
                        agriculturally related services to 
                        socially disadvantaged farmers and 
                        ranchers in a region.
                  (C) Secretary.--The term ``Secretary'' means 
                the Secretary of Agriculture.
          (2) Program.--The Secretary shall carry out an 
        outreach and technical assistance program to encourage 
        and assist socially disadvantaged farmers and 
        ranchers--
                  (A) in owning and operating farms and 
                ranches; and
                  (B) in participating equitably in the full 
                range of agricultural programs offered by the 
                Department.
          (3) Requirements.--The outreach and technical 
        assistance program under paragraph (2) shall--
                  (A) enhance coordination of the outreach, 
                technical assistance, and education efforts 
                authorized under various agriculture programs; 
                and
                  (B) include information on, and assistance 
                with--
                          (i) commodity, conservation, credit, 
                        rural, and business development 
                        programs;
                          (ii) application and bidding 
                        procedures;
                          (iii) farm and risk management;
                          (iv) marketing; and
                          (v) other activities essential to 
                        participation in agricultural and other 
                        programs of the Department.
          (4) Grants and contracts.--
                  (A) In general.--The Secretary may make 
                grants to, and enter into contracts and other 
                agreements with, an eligible entity to provide 
                information and technical assistance under this 
                subsection.
                  (B) Relationship to other law.--The authority 
                to carry out this section shall be in addition 
                to any other authority provided in this or any 
                other Act.
          (5) Funding.--
                  (A) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this subsection $25,000,000 for each of fiscal 
                years 2002 through 2006.
                  (B) Interagency funding.--In addition to 
                funds authorized to be appropriated under 
                subparagraph (A), any agency of the Department 
                may participate in any grant, contract, or 
                agreement entered into under this section by 
                contributing funds, if the agency determined 
                that the objectives of the grant, contract, or 
                agreement will further the authorized programs 
                of the contributing agency.
    (b) Designation of Federal Personnel.--

           *       *       *       *       *       *       *


SEC. 2506. PSEUDORABIES ERADICATION.

    (a) Findings.--Congress finds that efforts to eradicate 
pseudorabies in United States swine populations by the 
Department of Agriculture in cooperation with State agencies 
and the pork industry have a high priority and should be 
continued until pseudorabies is completely eradicated in the 
United States.
    (b) Establishment of Program.--The Secretary of Agriculture 
shall establish and carry out a program for the eradication of 
pseudorabies in United States swine populations.
    (c) Use of Funds for Testing and Control of Pseudorabies.--
The Secretary shall ensure that not less than 65 percent of the 
funds appropriated for the program established under subsection 
(b) shall be used for testing and screening of animals and for 
other purposes directly related to the eradication or control 
of pseudorabies. This requirement on the use of appropriated 
funds for this program shall not be implemented in a manner 
that would adversely affect any other animal or plant disease 
or pest eradication or control program.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated for each of the fiscal years 1991 through 
[2002] 2006 such sums as may be necessary for the purpose of 
carrying out the program established under subsection (b).

           *       *       *       *       *       *       *


                  AGRICULTURAL MARKET TRANSITION ACT

           *       *       *       *       *       *       *


SEC. 194. ESTABLISHMENT OF OFFICE OF RISK MANAGEMENT.

    [(a) Establishment.--
    [(b) Fiscal Year 1996 Funding.--From funds appropriated for 
the salaries and expenses of the Consolidated Farm Service 
Agency in the Agriculture, Rural Development, Food and Drug 
Administration, and Related Agencies Appropriations Act, 1996 
(Public Law 104-37), the Secretary of Agriculture may use such 
sums as necessary for the salaries and expenses of the Office 
of Risk Management established under subsection (a).
    [(c) Conforming Amendment.--]

SEC. 194. TREE ASSISTANCE PROGRAM.

    (a) Definitions.--In this section:
          (1) Eligible orchardist.--The term ``eligible 
        orchardist'' means a person that produces annual crops 
        from trees for commercial purposes,
          (2) Natural disaster.--The term ``natural disaster'' 
        means plant disease, insect infestation, drought, fire, 
        freeze, flood, earthquake, and other natural 
        occurrences, as determined by the Secretary.
          (3) Tree.--The term ``tree'' includes trees, bushes, 
        and vines.
          (4) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
    (b) Eligibility.--
          (1) Loss.--Subject to paragraph (2), the Secretary 
        shall provide assistance in accordance with subsection 
        (c) to eligible orchardists that, as determined by the 
        Secretary--
                  (A) planted trees for commercial purposes; 
                and
                  (B) lost those trees as a result of a natural 
                disaster.
          (2) Limitation.--An eligible orchardist shall qualify 
        for assistance under subsection (c) only if the tree 
        mortality rate of the orchardist, as a result of the 
        natural disaster, exceeds 15 percent (adjusted for 
        normal mortality), as determined by the Secretary.
    (c) Assistance.--
          (1) In general.--Assistance provided by the Secretary 
        to eligible orchardists for losses described in 
        subsection (b) shall consist of--
                  (A) reimbursement of 75 percent of the cost 
                of replanting trees lost due to a natural 
                disaster, as determined by the Secretary, in 
                excess of 15 percent mortality (adjusted for 
                normal mortality); or
                  (B) at the discretion of the Secretary, 
                sufficient tree seedlings to reestablish the 
                stand.
          (2) Limitation on assistance.--
                  (A) Limitation.--The total amount of payments 
                that a person may receive under this section 
                shall not exceed--
                          (i) $100,000; or
                          (ii) an equivalent value in tree 
                        seedlings.
                  (B) Regulations.--The Secretary shall 
                promulgate regulations that--
                          (i) define the term ``person'' for 
                        the purposes of this section (which 
                        definition shall conform, to the extent 
                        practicable, to the regulations 
                        defining the term `person' promulgated 
                        under section 1001 of the Food Security 
                        Act of 1985 (7 U.S.C. 1308); and
                          (ii) prescribe such rules as the 
                        Secretary determines are necessary to 
                        ensure a fair and reasonable 
                        application of the limitation 
                        established under this section.
    (d) Authorization of Appropriations.--Notwithstanding 
section 161, there is authorized to be appropriated such sums 
as are necessary to carry out this section for each of fiscal 
years 2002 through 2006.

           *       *       *       *       *       *       *


Sec. 473a. Cotton classification services; fees for costs of services, 
                    adjustments, and announcement; sales of samples; 
                    disposition of moneys

    Effective for each of fiscal years 1992 through [2002] 
2006, the Secretary of Agriculture shall make cotton 
classification services available to producers of cotton and 
shall provide for the collection of classification fees from 
participating producers, or agents who voluntarily agree to 
collect and remit the fees on behalf of producers. Such fees, 
together with the proceeds from the sales of samples submitted 
under this section, shall cover as nearly as practicable the 
cost of the services provided under this section, including 
administrative and supervisory costs: Provided, That (1) the 
uniform per bale classification fee to be collected from 
producers, or their agents, for the classification service in 
any year shall be the fee established in the previous year for 
the prevailing method of classification service, exclusive of 
adjustments to the fee made in the previous year under clauses 
(2), (3), and (4), and as may be adjusted by the percentage 
change in the implicit price deflator for the gross national 
product as indexed during the most recent 12-month period for 
which statistics are available; (2) the fee calculated in 
accordance with clause (1) for

           *       *       *       *       *       *       *


Sec. 1631. Protection for purchasers of farm products

    (a) Congressional Findings.--Congress finds that--

           *       *       *       *       *       *       *

    (c) Definitions.--For the purposes of this section--

           *       *       *       *       *       *       *

          (4) The term ``effective financing statement'' means 
        a statement that--
                  (A) is an original or reproduced copy of the 
                statement, or, in the case of a State which 
                (under the applicable State law provisions of 
                the Uniform Commercial Code) allows the 
                electronic filing of financing statements 
                without the signature of the debtor, is an 
                electronically reproduced copy of the 
                statement;
                  (B) other than in the case of an 
                electronically reproduced copy of the 
                statement, is [signed] signed, authorized, or 
                otherwise authenticated by the debtor, and 
                filed with the Secretary of State of a State by 
                the secured party;
                  [(C) other than in the case of an 
                electronically reproduced copy of the 
                statement, is signed by the debtor;]

           *       *       *       *       *       *       *

                  [(D)] (C) contains--
                          (i) the name and address of the 
                        secured party;
                          (ii) the name and address of the 
                        person indebted to the secured party;
                          (iii) the social security number of 
                        the debtor or, in the case of a debtor 
                        doing business other than as an 
                        individual, the Internal Revenue 
                        Service taxpayer identification number 
                        of such debtor; and
                          (iv) a description of the farm 
                        products subject to the security 
                        interest created by the debtor, 
                        including the amount of such products 
                        where [applicable; and a reasonable 
                        description of the property, including 
                        3 county or parish in which 
                        the property is located;] applicable, 
                        and the name of each county or parish 
                        in which the farm products are growing 
                        or located;
                  [(E)](D) must be amended in writing, within 3 
                months, similarly signed and filed, to reflect 
                material changes;
                  [(F)](E) remains effective for a period of 5 
                years from the date of filing, subject to 
                extensions for additional periods of 5 years 
                each by refiling or filing a continuation 
                statement within 6 months before the expiration 
                of the initial 5 year period;
                  [(G)](F) lapses on either the expiration of 
                the effective period of the statement or the 
                filing of a notice signed by the secured party 
                that the statement has lapsed, whichever occurs 
                first;
                  [(H)](G) is accompanied by the requisite 
                filing fee set by the Secretary of State; and
                  [(I)](H) substantially complies with the 
                requirements of this subparagraph even though 
                it contains minor errors that are not seriously 
                misleading.

           *       *       *       *       *       *       *

    (e) Purchases Subject to Security Interest.--A buyer of 
farm products takes subject to a security interest created by 
the seller if--
          (1)(A) within 1 year before the sale of the farm 
        products, the buyer has received from the secured party 
        or the seller written notice of the security interest 
        organized according to farm products that--
                  (i) is an original or reproduced copy 
                thereof;
                  (ii) contains--
                          (I) the name and address of the 
                        secured party;
                          (II) the name and address of the 
                        person indebted to the secured party;
                          (III) the social security number of 
                        the debtor or, in the case of a debtor 
                        doing business other than as an 
                        individual, the Internal Revenue 
                        Service taxpayer identification number 
                        of such debtor; and
                          (IV) a description of the farm 
                        products subject to the security 
                        interest created by the debtor, 
                        including the amount of such products 
                        where applicable, [crop year, county or 
                        parish, and a reasonable description of 
                        the property; and] crop year, and the 
                        name of each county or parish in which 
                        the farm products are growing or 
                        located;

           *       *       *       *       *       *       *

                          (V) contains any payment obligations 
                        imposed on the buyer by the secured 
                        party as conditions for waiver or 
                        release of the security interest; and

           *       *       *       *       *       *       *

          (3) in the case of a farm product produced in a State 
        that has established a central filing system, the 
        buyer--
                  (A) receives from the Secretary of State of 
                such State written notice is provided in 
                [subparagraph] subsection (c)(2)(E) or 
                (c)(2)(F) that specifies both the seller and 
                the farm product being sold by such seller as 
                being subject to an effective financing 
                statement or notice; and
                  (B) does not secure a waiver or release of 
                the security interest specified in such 
                effective financing statement or notice from 
                the secured party by performing any payment 
                obligation or otherwise; [and]

           *       *       *       *       *       *       *

                secured party or the seller written notice of 
                the security interest; organized according to 
                farm products, that--
                          (i) is an original or reproduced copy 
                        thereof;
                          (ii) contains--
                                  (I) the name and address of 
                                the secured party;
                                  (II) the name and address of 
                                the person indebted to the 
                                secured party;
                                  (III) the social security 
                                number of the debtor or, in the 
                                case of a debtor doing business 
                                other than as an individual, 
                                the Internal Revenue Service 
                                taxpayer identification number 
                                of such debtor; and
                                  (IV) a description of the 
                                farm products subject to the 
                                security interest created by 
                                the debtor, including the 
                                amount of such products, where 
                                applicable, [crop year, county 
                                or parish, and a reasonable 
                                description of the property, 
                                etc.; and] crop year, and the 
                                name of each county or parish 
                                in which the farm products are 
                                growing or located;
                          (iii) must be amended in writing, 
                        within 3 months, similarly signed and 
                        transmitted, to reflect material 
                        changes;
                          (iv) will lapse on either the 
                        expiration period of the statement or 
                        the transmission of a notice signed by 
                        the secured party that the statement 
                        has lapsed, whichever occurs first; and
                          (v) contains any payment obligations 
                        imposed on the commission merchant or 
                        selling agent by the secured party as 
                        conditions for waiver or release of the 
                        security interest; and

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SEC 1027. PUBLIC DISCLOSURE REQUIREMENTS FOR COUNTY COMMITTEE 
                    ELECTIONS.

Sec. 590h. Payments and grants of aid

    (a) Repealed.
    (b) Conservation and Environmental Assistance.--
          (1) Environmental quality incentives program.--The 
        Secretary shall provide technical assistance, cost-
        share payments, and incentive payments to operators 
        through the environmental quality incentives program in 
        accordance with part IV of subchapter IV of chapter 58 
        of this title.
          (2) to (4) Repealed.
          (5) State, county, and area committees.--
                  (A) Appointment of state committees.--The 
                Secretary shall appoint in each State a State 
                committee composed of not fewer than 3 nor more 
                than 5 members who are fairly representative of 
                the farmers in the State. The members of a 
                State committee shall serve at the pleasure of 
                the Secretary for such term as the Secretary 
                may establish.
                  [(B) Establishment of county, area, or local 
                committees.--
                          [(i) In each county or area in which 
                        activities are carried out under this 
                        section, the Secretary shall establish 
                        a county or area committee.
                          [(ii) Any such committee shall 
                        consist of not fewer than 3 nor more 
                        than 5 members who are fairly 
                        representative of the agricultural 
                        producers in the county or area and who 
                        shall be elected by the agricultural 
                        producers in such county or area under 
                        such procedures as the Secretary may 
                        prescribe.
                          [(iii) The Secretary may designate 
                        local administrative areas within the 
                        county or larger area covered by a 
                        committee established under clause (i). 
                        Only agricultural producers within a 
                        local administrative area who 
                        participate or cooperate in programs 
                        administered within their area shall be 
                        eligible for nomination and election to 
                        the local committee for that area, 
                        under such regulations as the Secretary 
                        may prescribe.
                          [(iv) The Secretary shall solicit and 
                        accept nominations from organizations 
                        representing the interests of socially 
                        disadvantaged groups (as defined in 
                        section 355(e)(1) of the Consolidated 
                        Farm and Rural Development Act (7 
                        U.S.C. 2003(e)(1)).
                          [(v) Members of each county, area, or 
                        local committee shall serve for terms 
                        not to exceed 3 years.
                  (B) Establishment and elections for county, 
                area, or local committees.--
                          (i) Establishment.--
                                  (I) In general.--In each 
                                country or area in which 
                                activities are carried out 
                                under this section, the 
                                Secretary shall establish a 
                                county or area committee.
                                  (II) Local administrative 
                                areas.--The Secretary may 
                                designate local administrative 
                                areas within a county or a 
                                larger area under the 
                                jurisdiction of a committee 
                                established under subclause 
                                (I).
                          (ii) Composition of county, area, or 
                        local committees.--A committee 
                        established under clause (i) shall 
                        consist of not fewer than 3 nor more 
                        than 5 members that--
                                  (I) are fairly representative 
                                of the agricultural producers 
                                within the area covered by the 
                                county, area, or local 
                                committee; and
                                  (II) are elected by the 
                                agricultural producers that 
                                participate or cooperate in 
                                programs administered within 
                                the area under the jurisdiction 
                                of the county, area, or local 
                                committee.
                          (iii) Elections.--
                                  (I) In general.--Subject to 
                                subclauses (II) through (V), 
                                the Secretary shall establish 
                                procedures for nominations and 
                                elections to county, area, or 
                                local committees.
                                  (II) Nondiscrimination 
                                statement.--Each solicitation 
                                of nominations for, and notice 
                                of elections of, a county, 
                                area, or local committee shall 
                                include the nondiscrimination 
                                statement used by the 
                                Secretary.
                                  (III) Nominations.--
                                          (aa) Eligibility.--To 
                                        be eligible for 
                                        nomination and election 
                                        to the applicable 
                                        county, area, or local 
                                        committee, as 
                                        determined by the 
                                        Secretary, an 
                                        agricultural producer 
                                        shall be located within 
                                        the area under the 
                                        jurisdiction of a 
                                        county, area, or local 
                                        committee, and 
                                        participate or 
                                        cooperate in programs 
                                        administered within 
                                        that area.
                                          (bb) Outreach.--In 
                                        addition to such 
                                        nominating procedures 
                                        as the Secretary may 
                                        prescribe, the 
                                        Secretary shall solicit 
                                        and accept nominations 
                                        from organizations 
                                        representing the interests 
                                        of socially disadvantaged 
                                        groups (as defined in section 
                                        355(e)(1) of the Consolidated 
                                        Farm and Rural Development Act 
                                        (7 U.S.C. 2003(e)(1)).
                                  (IV) Opening of ballots.--
                                          (aa) Public notice.--
                                        At least 10 days before 
                                        the date on which 
                                        ballots are to be 
                                        opened and counted, a 
                                        county, area, or local 
                                        committee shall 
                                        announce the date, 
                                        time, and place at 
                                        which election ballots 
                                        will be opened and 
                                        counted.
                                          (bb) Opening of 
                                        ballots.--Election 
                                        ballots shall not be 
                                        opened until the date 
                                        and time announced 
                                        under item (aa).
                                          (cc) Observation.--
                                        Any person may observe 
                                        the opening and 
                                        counting of the 
                                        election ballots.
                                  (V) Report of election.--Not 
                                later than 20 days after the 
                                date on which an election is 
                                held, a county, area, or local 
                                committee shall file an 
                                election report with the 
                                Secretary and the State office 
                                of the Farm Service Agency that 
                                includes--
                                          (aa) the number of 
                                        eligible voters in the 
                                        area covered by the 
                                        county, area, or local 
                                        committee;
                                          (bb) the number of 
                                        ballots cast in the 
                                        election by eligible 
                                        voters (including the 
                                        percentage of eligible 
                                        voters that cast 
                                        ballots);
                                          (cc) the number of 
                                        ballots disqualified in 
                                        the election;
                                          (dd) the percentage 
                                        that the number of 
                                        ballots disqualified is 
                                        of the number of 
                                        ballots received;
                                          (ee) the number of 
                                        nominees for each seat 
                                        up for election;
                                          (ff) the race, 
                                        ethnicity, and gender 
                                        of each nominee, as 
                                        provided through the 
                                        voluntary self-
                                        identification of each 
                                        nominee; and
                                          (gg) the final 
                                        election results 
                                        (including the number 
                                        of ballots received by 
                                        each nominee).
                                  (VI) National report.--Not 
                                later than 90 days after the 
                                date on which the first 
                                election of a county, area, or 
                                local committee that occurs 
                                after the date of enactment of 
                                the Agriculture, Conservation, 
                                and Rural Enhancement Act of 
                                2001 is held, the Secretary 
                                shall complete a report that 
                                consolidates all the election 
                                data reported to the Secretary 
                                under subclause (V).
                                  (VII) Election reform.--
                                          (aa) Analysis.--If 
                                        determined necessary by 
                                        the Secretary after 
                                        analyzing the data 
                                        contained in the report 
                                        under subclause (VI), 
                                        the Secretary shall 
                                        promulgate and publish 
                                        in the Federal Register 
                                        proposed uniform 
                                        guidelines for 
                                        conducting elections 
                                        for members and 
                                        alternate members of 
                                        county, area, and local 
                                        committees not later 
                                        than 1 year after the 
                                        date of completion of 
                                        the report.
                                          (bb) Inclusion.--The 
                                        procedures promulgated 
                                        by the Secretary under 
                                        item (aa) shall ensure 
                                        fair representation of 
                                        socially disadvantaged 
                                        groups described in 
                                        subclause (III)(bb) in 
                                        an area covered by the 
                                        county, area, or local 
                                        committee, in cases in 
                                        which those groups are 
                                        underrepresented on the 
                                        county, area, or local 
                                        committee for that 
                                        area.
                                          (cc) Methods of 
                                        inclusion.--
                                        Notwithstanding clause 
                                        (ii), the Secretary may 
                                        ensure inclusion of 
                                        socially disadvantaged 
                                        farmers and ranchers 
                                        through provisions 
                                        allowing for 
                                        appointment of 
                                        additional voting 
                                        members to a county, 
                                        area, or local 
                                        committee or through 
                                        other methods.
                          (iv) Term of office.--The term of 
                        office for a member of a county, area, 
                        or local committee shall not exceed 3 
                        years.

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