    [107th Congress Public Law 171]
    [From the U.S. Government Publishing Office]

    <DOC>
    [DOCID: f:publ171.107]

    [[Page 133]]

                 FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

    [[Page 116 STAT. 134]]

    Public Law 107-171
    107th Congress

                                     An Act

    To provide for the continuation of agricultural programs through fiscal
        year 2007, and for other purposes. <<NOTE: May 13, 2002 -  [H.R.
                                    2646]>>

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress <<NOTE: Farm Security and Rural
    Investment Act of 2002.>> assembled,

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

        (a) <<NOTE: 7 USC 7901 note.>>  Short Title.--This Act may be cited
    as the ``Farm Security and Rural Investment Act of 2002''.

        (b) Table of Contents.--The table of contents of this Act is as
    follows:

    Sec. 1. Short title; table of contents.

                           TITLE I--COMMODITY PROGRAMS

    Sec. 1001. Definitions.

            Subtitle A--Direct Payments and Counter-Cyclical Payments

    Sec. 1101. Establishment of base acres and payment acres for a farm.
    Sec. 1102. Establishment of payment yield.
    Sec. 1103. Availability of direct payments.
    Sec. 1104. Availability of counter-cyclical payments.
    Sec. 1105. Producer agreement required as condition of provision of
               direct
               payments and counter-cyclical payments.
    Sec. 1106. Planting flexibility.
    Sec. 1107. Relation to remaining payment authority under production
               flexibility contracts.
    Sec. 1108. Period of effectiveness.

       Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

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

                               Subtitle C--Peanuts

    Sec. 1301. Definitions.
    Sec. 1302. Establishment of payment yield and base acres for peanuts for
               a farm.
    Sec. 1303. Availability of direct payments for peanuts.
    Sec. 1304. Availability of counter-cyclical payments for peanuts.
    Sec. 1305. Producer agreement required as condition on provision of
               direct
               payments and counter-cyclical payments.
    Sec. 1306. Planting flexibility.
    Sec. 1307. Marketing assistance loans and loan deficiency payments for
               peanuts.
    Sec. 1308. Miscellaneous provisions.
    Sec. 1309. Termination of marketing quota programs for peanuts and
               compensation to peanut quota holders for loss of quota asset
               value.

    [[Page 116 STAT. 135]]

    Sec. 1310. Repeal of superseded price support authority and effect of
               repeal.

                                Subtitle D--Sugar

    Sec. 1401. Sugar program.
    Sec. 1402. Storage facility loans.
    Sec. 1403. Flexible marketing allotments for sugar.

                                Subtitle E--Dairy

    Sec. 1501. Milk price support program.
    Sec. 1502. National dairy market loss payments.
    Sec. 1503. Dairy export incentive and dairy indemnity programs.
    Sec. 1504. Dairy product mandatory reporting.
    Sec. 1505. Funding of dairy promotion and research program.
    Sec. 1506. Fluid milk promotion.
    Sec. 1507. Study of national dairy policy.
    Sec. 1508. Studies of effects of changes in approach to national dairy
               policy and fluid milk identity standards.

                           Subtitle F--Administration

    Sec. 1601. Administration generally.
    Sec. 1602. Suspension of permanent price support authority.
    Sec. 1603. Payment limitations.
    Sec. 1604. Adjusted gross income limitation.
    Sec. 1605. Commission on application of payment limitations.
    Sec. 1606. Adjustments of loans.
    Sec. 1607. Personal liability of producers for deficiencies.
    Sec. 1608. Extension of existing administrative authority regarding
               loans.
    Sec. 1609. Commodity Credit Corporation Inventory.
    Sec. 1610. Reserve stock level.
    Sec. 1611. Farm reconstitutions.
    Sec. 1612. Assignment of payments.
    Sec. 1613. Equitable relief from ineligibility for loans, payments, or
               other benefits.
    Sec. 1614. Tracking of benefits.
    Sec. 1615. Estimates of net farm income.
    Sec. 1616. Availability of incentive payments for certain producers.
    Sec. 1617. Renewed availability of market loss assistance and certain
               emergency assistance to persons that failed to receive
               assistance under earlier authorities.
    Sec. 1618. Producer retention of erroneously paid loan deficiency
               payments and marketing loan gains.

                             TITLE II--CONSERVATION

                        Subtitle A--Conservation Security

    Sec. 2001. Conservation security program.
    Sec. 2002. Conservation compliance.
    Sec. 2003. Partnerships and cooperation.
    Sec. 2004. Administrative requirements for conservation programs.
    Sec. 2005. Reform and assessment of conservation programs.
    Sec. 2006. Conforming amendments.

                        Subtitle B--Conservation Reserve

    Sec. 2101. Conservation reserve program.

                      Subtitle C--Wetlands Reserve Program

    Sec. 2201. Reauthorization.
    Sec. 2202. Enrollment.
    Sec. 2203. Easements and agreements.
    Sec. 2204. Changes in ownership; agreement modification; termination.

                  Subtitle D--Environmental Quality Incentives

    Sec. 2301. Environmental quality incentives program.

                          Subtitle E--Grassland Reserve

    Sec. 2401. Grassland reserve program.

                     Subtitle F--Other Conservation Programs

    Sec. 2501. Agricultural management assistance.
    Sec. 2502. Grazing, wildlife habitat incentive, source water protection,
               and Great Lakes basin programs.

    [[Page 116 STAT. 136]]

    Sec. 2503. Farmland protection program.
    Sec. 2504. Resource conservation and development program.
    Sec. 2505. Small watershed rehabilitation program.
    Sec. 2506. Use of symbols, slogans, and logos.
    Sec. 2507. Desert terminal lakes.

             Subtitle G--Conservation Corridor Demonstration Program

    Sec. 2601. Definitions.
    Sec. 2602. Conservation corridor demonstration program.
    Sec. 2603. Implementation of conservation corridor plan.
    Sec. 2604. Funding requirements.

                     Subtitle H--Funding and Administration

    Sec. 2701. Funding and administration.
    Sec. 2702. Regulations.

                                TITLE III--TRADE

     Subtitle A--Agricultural Trade Development and Assistance Act of 1954
                              and Related Statutes

    Sec. 3001. United States policy.
    Sec. 3002. Provision of agricultural commodities.
    Sec. 3003. Generation and use of currencies by private voluntary
               organizations and cooperatives.
    Sec. 3004. Levels of assistance.
    Sec. 3005. Food Aid Consultative Group.
    Sec. 3006. Maximum level of expenditures.
    Sec. 3007. Administration.
    Sec. 3008. Assistance for stockpiling and rapid transportation,
               delivery, and distribution of shelf-stable prepackaged foods.
    Sec. 3009. Sale procedure.
    Sec. 3010. Prepositioning.
    Sec. 3011. Transportation and related costs.
    Sec. 3012. Expiration date.
    Sec. 3013. Micronutrient fortification programs.
    Sec. 3014. John Ogonowski Farmer-to-Farmer Program.

                   Subtitle B--Agricultural Trade Act of 1978

    Sec. 3101. Exporter assistance initiative.
    Sec. 3102. Export credit guarantee program.
    Sec. 3103. Market access program.
    Sec. 3104. Export enhancement program.
    Sec. 3105. Foreign market development cooperator program.
    Sec. 3106. Food for progress.
    Sec. 3107. McGovern-Dole International Food for Education and Child
               Nutrition Program.

                            Subtitle C--Miscellaneous

    Sec. 3201. Surplus commodities for developing or friendly countries.
    Sec. 3202. Bill Emerson Humanitarian Trust Act.
    Sec. 3203. Emerging markets.
    Sec. 3204. Biotechnology and agricultural trade program.
    Sec. 3205. Technical assistance for specialty crops.
    Sec. 3206. Global market strategy.
    Sec. 3207. Report on use of perishable commodities and live animals.
    Sec. 3208. Study on fee for services.
    Sec. 3209. Sense of Congress concerning foreign assistance programs.
    Sec. 3210. Sense of the Senate concerning agricultural trade.

                          TITLE IV--NUTRITION PROGRAMS

    Sec. 4001. Short title.

                         Subtitle A--Food Stamp Program

    Sec. 4101. Encouragement of payment of child support.
    Sec. 4102. Simplified definition of income.
    Sec. 4103. Standard deduction.
    Sec. 4104. Simplified utility allowance.
    Sec. 4105. Simplified determination of housing costs.
    Sec. 4106. Simplified determination of deductions.
    Sec. 4107. Simplified definition of resources.

    [[Page 116 STAT. 137]]

    Sec. 4108. Alternative issuance systems in disasters.
    Sec. 4109. State option to reduce reporting requirements.
    Sec. 4110. Cost neutrality for electronic benefit transfer systems.
    Sec. 4111. Report on electronic benefit transfer systems.
    Sec. 4112. Alternative procedures for residents of certain group
               facilities.
    Sec. 4113. Redemption of benefits through group living arrangements.
    Sec. 4114. Availability of food stamp program applications on the
               Internet.
    Sec. 4115. Transitional food stamps for families moving from welfare.
    Sec. 4116. Grants for simple application and eligibility determination
               systems and improved access to benefits.
    Sec. 4117. Delivery to retailers of notices of adverse action.
    Sec. 4118. Reform of quality control system.
    Sec. 4119. Improvement of calculation of State performance measures.
    Sec. 4120. Bonuses for States that demonstrate high or most improved
               performance.
    Sec. 4121. Employment and training program.
    Sec. 4122. Reauthorization of food stamp program and food distribution
               program on Indian reservations.
    Sec. 4123. Expanded grant authority.
    Sec. 4124. Consolidated block grants for Puerto Rico and American Samoa.
    Sec. 4125. Assistance for community food projects.
    Sec. 4126. Availability of commodities for the emergency food assistance
               program.

                       Subtitle B--Commodity Distribution

    Sec. 4201. Commodity supplemental food program.
    Sec. 4202. Commodity donations.
    Sec. 4203. Distribution of surplus commodities to special nutrition
               projects.
    Sec. 4204. Emergency food assistance.

                Subtitle C--Child Nutrition and Related Programs

    Sec. 4301. Commodities for school lunch program.
    Sec. 4302. Eligibility for free and reduced price meals.
    Sec. 4303. Purchases of locally produced foods.
    Sec. 4304. Applicability of Buy-American requirement to Puerto Rico.
    Sec. 4305. Fruit and vegetable pilot program.
    Sec. 4306. Eligibility for assistance under the special supplemental
               nutrition program for women, infants, and children.
    Sec. 4307. WIC farmers' market nutrition program.

                            Subtitle D--Miscellaneous

    Sec. 4401. Partial restoration of benefits to legal immigrants.
    Sec. 4402. Seniors farmers' market nutrition program.
    Sec. 4403. Nutrition information and awareness pilot program.
    Sec. 4404. Hunger fellowship program.
    Sec. 4405. General effective date.

                                 TITLE V--CREDIT

                        Subtitle A--Farm Ownership Loans

    Sec. 5001. Direct loans.
    Sec. 5002. Financing of bridge loans.
    Sec. 5003. Amount of guarantee of loans for farm operations on tribal
               lands.
    Sec. 5004. Guarantee of loans made under State beginning farmer or
               rancher programs.
    Sec. 5005. Down Payment Loan Program.
    Sec. 5006. Beginning farmer and rancher contract land sales program.

                           Subtitle B--Operating Loans

    Sec. 5101. Direct loans.
    Sec. 5102. Suspension of limitation on period for which borrowers are
               eligible for guaranteed assistance.

                           Subtitle C--Emergency Loans

    Sec. 5201. Emergency loans in response to an emergency resulting from
               quarantines.

                      Subtitle D--Administrative Provisions

    Sec. 5301. Evaluations of direct and guaranteed loan programs.
    Sec. 5302. Eligibility of trusts and limited liability companies for
               farm ownership loans, farm operating loans, and emergency
               loans.

    [[Page 116 STAT. 138]]

    Sec. 5303. Debt settlement.
    Sec. 5304. Temporary authority to enter into contracts; private
               collection agencies.
    Sec. 5305. Interest rate options for loans in servicing.
    Sec. 5306. Elimination of requirement that Secretary require county
               committees to certify in writing that certain loan reviews
               have been conducted.
    Sec. 5307. Simplified loan guarantee application available for loans of
               greater amounts.
    Sec. 5308. Inventory property.
    Sec. 5309. Administration of certified lenders and preferred certified
               lenders programs.
    Sec. 5310. Definitions.
    Sec. 5311. Loan authorization levels.
    Sec. 5312. Reservation of funds for direct operating loans for beginning
               farmers and ranchers.
    Sec. 5313. Interest rate reduction program.
    Sec. 5314. Reamortization of recapture payments.
    Sec. 5315. Allocation of certain funds for socially disadvantaged
               farmers and ranchers.
    Sec. 5316. Waiver of borrower training certification requirement.
    Sec. 5317. Timing of loan assessments.
    Sec. 5318. Annual review of borrowers.
    Sec. 5319. Loan eligibility for borrowers with prior debt forgiveness.
    Sec. 5320. Making and servicing of loans by personnel of State, county,
               or area committees.
    Sec. 5321. Eligibility of employees of State, county, or area committee
               for loans and loan guarantees.

                             Subtitle E--Farm Credit

    Sec. 5401. Repeal of burdensome approval requirements.
    Sec. 5402. Banks for cooperatives.
    Sec. 5403. Insurance corporation premiums.

                         Subtitle F--General Provisions

    Sec. 5501. Technical amendments.

                           TITLE VI--RURAL DEVELOPMENT

             Subtitle A--Consolidated Farm and Rural Development Act

    Sec. 6001. Eligibility of rural empowerment zones and rural enterprise
               communities for direct and guaranteed loans for essential
               community facilities.
    Sec. 6002. Water or waste disposal grants.
    Sec. 6003. Rural business opportunity grants.
    Sec. 6004. Child day care facilities.
    Sec. 6005. Rural water and wastewater circuit rider program.
    Sec. 6006. Multijurisdictional regional planning organizations.
    Sec. 6007. Loan guarantees for certain rural development loans.
    Sec. 6008. Tribal college and university essential community facilities.
    Sec. 6009. Emergency and imminent community water assistance grant
               program.
    Sec. 6010. Water and waste facility grants for Native American tribes.
    Sec. 6011. Grants for water systems for rural and native villages in
               Alaska.
    Sec. 6012. Grants to nonprofit organizations to finance the
               construction, refurbishing, and servicing of individually-
               owned household water well systems in rural areas for
               individuals with low or moderate incomes.
    Sec. 6013. Loans and loan guarantees for renewable energy systems.
    Sec. 6014. Rural business enterprise grants.
    Sec. 6015. Rural cooperative development grants.
    Sec. 6016. Grants to broadcasting systems.
    Sec. 6017. Business and industry loan modifications.
    Sec. 6018. Use of rural development loans and grants for other purposes.
    Sec. 6019. Simplified application forms for loan guarantees.
    Sec. 6020. Definition of rural and rural area.
    Sec. 6021. National Rural Development Partnership.
    Sec. 6022. Rural telework.
    Sec. 6023. Historic barn preservation.
    Sec. 6024. Grants for NOAA weather radio transmitters.
    Sec. 6025. Grants to train farm workers in new technologies and to train
               farm workers in specialized skills necessary for higher value
               crops.
    Sec. 6026. Rural community advancement program.
    Sec. 6027. Delta Regional Authority.
    Sec. 6028. Northern Great Plains Regional Authority.

    [[Page 116 STAT. 139]]

    Sec. 6029. Rural business investment program.
    Sec. 6030. Rural strategic investment program.
    Sec. 6031. Funding of pending rural development loan and grant
               applications.

                  Subtitle B--Rural Electrification Act of 1936

    Sec. 6101. Guarantees for bonds and notes issued for electrification or
               telephone purposes.
    Sec. 6102. Expansion of 911 access.
    Sec. 6103. Enhancement of access to broadband service in rural areas.

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

    Sec. 6201. Alternative Agricultural Research and Commercialization
               Corporation.
    Sec. 6202. Rural electronic commerce extension program.
    Sec. 6203. Telemedicine and distance learning services in rural areas.

                 Subtitle D--SEARCH Grants for Small Communities

    Sec. 6301. Definitions.
    Sec. 6302. SEARCH grant program.
    Sec. 6303. Report.
    Sec. 6304. Funding.

                            Subtitle E--Miscellaneous

    Sec. 6401. Value-added agricultural product market development grants.
    Sec. 6402. Agriculture innovation center demonstration program.
    Sec. 6403. Fund for Rural America.
    Sec. 6404. Rural local television broadcast signal loan guarantees.
    Sec. 6405. Rural firefighters and emergency personnel grant program.
    Sec. 6406. Sense of Congress on rural policy coordination.

                     TITLE VII--RESEARCH AND RELATED MATTERS

                             Subtitle A--Extensions

    Sec. 7101. National rural information center clearinghouse.
    Sec. 7102. Grants and fellowships for food and agricultural sciences
               education.
    Sec. 7103. Policy research centers.
    Sec. 7104. Human nutrition intervention and health promotion research
               program.
    Sec. 7105. Pilot research program to combine medical and agricultural
               research.
    Sec. 7106. Nutrition education program.
    Sec. 7107. Continuing animal health and disease research programs.
    Sec. 7108. Appropriations for research on national or regional problems.
    Sec. 7109. Grants to upgrade agricultural and food sciences facilities
               at 1890 land-grant colleges, including Tuskegee University.
    Sec. 7110. National research and training virtual centers.
    Sec. 7111. Hispanic-serving institutions.
    Sec. 7112. Competitive grants for international agricultural science and
               education programs.
    Sec. 7113. University research.
    Sec. 7114. Extension service.
    Sec. 7115. Supplemental and alternative crops.
    Sec. 7116. Aquaculture research facilities.
    Sec. 7117. Rangeland research.
    Sec. 7118. National genetics resources program.
    Sec. 7119. High-priority research and extension initiatives.
    Sec. 7120. Nutrient management research and extension initiative.
    Sec. 7121. Agricultural telecommunications program.
    Sec. 7122. Assistive technology program for farmers with disabilities.
    Sec. 7123. Partnerships for high-value agricultural product quality
               research.
    Sec. 7124. Biobased products.
    Sec. 7125. Integrated research, education, and extension competitive
               grants program.
    Sec. 7126. Equity in Educational Land-Grant Status Act of 1994.
    Sec. 7127. 1994 Institution research grants.
    Sec. 7128. Endowment for 1994 Institutions.
    Sec. 7129. Precision agriculture.
    Sec. 7130. Thomas Jefferson Initiative for crop diversification.
    Sec. 7131. Support for research regarding diseases of wheat, triticale,
               and barley caused by fusarium graminearum or by tilletia
               indica.
    Sec. 7132. Office of Pest Management Policy.
    Sec. 7133. National Agricultural Research, Extension, Education, and
               Economics Advisory Board.
    Sec. 7134. Grants for research on production and marketing of alcohols
               and industrial hydrocarbons from agricultural commodities and
               forest products.

    [[Page 116 STAT. 140]]

    Sec. 7135. Agricultural experiment stations research facilities.
    Sec. 7136. Competitive, special, and facilities research grants national
               research initiative.
    Sec. 7137. Federal agricultural research facilities authorization of
               appropriations.
    Sec. 7138. Critical agricultural materials research.
    Sec. 7139. Aquaculture.

                            Subtitle B--Modifications

    Sec. 7201. Equity in Educational Land-Grant Status Act of 1994.
    Sec. 7202. Carryover for experiment stations.
    Sec. 7203. Authorization percentages for research and extension formula
               funds.
    Sec. 7204. Carryover for eligible institutions.
    Sec. 7205. Initiative for future agriculture and food systems.
    Sec. 7206. Eligibility for integrated grants program.
    Sec. 7207. Agricultural Research, Extension, and Education Reform Act of
               1998.
    Sec. 7208. Food, Agriculture, Conservation, and Trade Act of 1990.
    Sec. 7209. National Agricultural Research, Extension, and Teaching
               Policy Act of 1977.
    Sec. 7210. Biotechnology risk assessment research.
    Sec. 7211. Competitive, special, and facilities research grants.
    Sec. 7212. Matching funds requirement for research and extension
               activities of 1890 Institutions.
    Sec. 7213. Matching requirements for research and extension formula
               funds for insular area land-grant institutions.
    Sec. 7214. Definition of food and agricultural sciences.
    Sec. 7215. Federal Extension Service.
    Sec. 7216. Policy research centers.
    Sec. 7217. Availability of competitive grant funds.
    Sec. 7218. Organic agriculture research and extension initiative.
    Sec. 7219. Senior scientific research service.
    Sec. 7220. Termination of certain schedule a appointments.
    Sec. 7221. Biosecurity planning and response programs.
    Sec. 7222. Indirect costs for small business innovation research grants.
    Sec. 7223. Carbon cycle research.

            Subtitle C--Repeal of Certain Activities and Authorities

    Sec. 7301. Food Safety Research Information Office and National
               Conference.
    Sec. 7302. Reimbursement of expenses under Sheep Promotion, Research,
               and Information Act of 1994.
    Sec. 7303. Market expansion research.
    Sec. 7304. National Advisory Board on Agricultural Weather.
    Sec. 7305. Agricultural information exchange with Ireland.
    Sec. 7306. Pesticide resistance study.
    Sec. 7307. Expansion of education study.
    Sec. 7308. Task force on 10-year strategic plan for agricultural
               research facilities.

                           Subtitle D--New Authorities

    Sec. 7401. Subtitle definitions.
    Sec. 7402. Research equipment grants.
    Sec. 7403. Joint requests for proposals.
    Sec. 7404. Review of Agricultural Research Service.
    Sec. 7405. Beginning farmer and rancher development program.
    Sec. 7406. Sense of Congress regarding doubling of funding for
               agricultural research.
    Sec. 7407. Organic production and market data initiatives.
    Sec. 7408. International organic research collaboration.
    Sec. 7409. Report on producers and handlers of organic agricultural
               products.
    Sec. 7410. Report on genetically modified pest-protected plants.
    Sec. 7411. Study of nutrient banking.
    Sec. 7412. Grants for youth organizations.

                            Subtitle E--Miscellaneous

    Sec. 7501. Resident instruction and distance education at institutions
               of higher education in United States insular areas.
    Sec. 7502. Definitions.
    Sec. 7503. Resident instruction and distance education grants program
               for insular area institutions of higher education.
    Sec. 7504. Declaration of extraordinary emergency and resulting
               authorities.
    Sec. 7505. Agricultural biotechnology research and development for
               developing countries.
    Sec. 7506. Land acquisition authority, national peanut research
               laboratory, Dawson, Georgia.

    [[Page 116 STAT. 141]]

                              TITLE VIII--FORESTRY

             Subtitle A--Cooperative Forestry Assistance Act of 1978

    Sec. 8001. Repeal of forestry incentives program and stewardship
               incentive program.
    Sec. 8002. Establishment of forest land enhancement program.
    Sec. 8003. Enhanced community fire protection.

                      Subtitle B--Amendments to Other Laws

    Sec. 8101. Sustainable forestry outreach initiative; renewable resources
               extension activities.
    Sec. 8102. Office of International Forestry.

                      Subtitle C--Miscellaneous Provisions

    Sec. 8201. McIntire-Stennis cooperative forestry research program.

                                TITLE IX--ENERGY

    Sec. 9001. Definitions.
    Sec. 9002. Federal procurement of biobased products.
    Sec. 9003. Biorefinery development grants.
    Sec. 9004. Biodiesel fuel education program.
    Sec. 9005. Energy audit and renewable energy development program.
    Sec. 9006. Renewable energy systems and energy efficiency improvements.
    Sec. 9007. Hydrogen and fuel cell technologies.
    Sec. 9008. Biomass research and development.
    Sec. 9009. Cooperative research and extension projects.
    Sec. 9010. Continuation of bioenergy program.

                             TITLE X--MISCELLANEOUS

                           Subtitle A--Crop Insurance

    Sec. 10001. Equal crop insurance treatment of potatoes and sweet
               potatoes.
    Sec. 10002. Continuous coverage.
    Sec. 10003. Quality loss adjustment procedures.
    Sec. 10004. Adjusted gross revenue insurance pilot program.
    Sec. 10005. Sense of Congress on expansion of crop insurance coverage.
    Sec. 10006. Report on specialty crop insurance.

                         Subtitle B--Disaster Assistance

    Sec. 10101. Reference to sea grass and sea oats as crops covered by
               noninsured crop disaster assistance program.
    Sec. 10102. Emergency grants to assist low-income migrant and seasonal
               farmworkers.
    Sec. 10103. Emergency loans for seed producers.
    Sec. 10104. Assistance for livestock producers.
    Sec. 10105. Market loss assistance for apple producers.
    Sec. 10106. Market loss assistance for onion producers.
    Sec. 10107. Commercial fisheries failure.
    Sec. 10108. Study of feasibility of producer indemnification from
               Government-caused disasters.

                       Subtitle C--Tree Assistance Program

    Sec. 10201. Definitions.
    Sec. 10202. Eligibility.
    Sec. 10203. Assistance.
    Sec. 10204. Limitations on assistance.
    Sec. 10205. Authorization of appropriations.

                           Subtitle D--Animal Welfare

    Sec. 10301. Definition of animal under the Animal Welfare Act.
    Sec. 10302. Prohibition on interstate movement of animals for animal
               fighting.
    Sec. 10303. Penalties and foreign commerce provisions of the Animal
               Welfare Act.
    Sec. 10304. Report on rats, mice, and birds.
    Sec. 10305. Enforcement of Humane Methods of Slaughter Act of 1958.

                      Subtitle E--Animal Health Protection

    Sec. 10401. Short title.
    Sec. 10402. Findings.
    Sec. 10403. Definitions.
    Sec. 10404. Restriction on importation or entry.

    [[Page 116 STAT. 142]]

    Sec. 10405. Exportation.
    Sec. 10406. Interstate movement.
    Sec. 10407. Seizure, quarantine, and disposal.
    Sec. 10408. Inspections, seizures, and warrants.
    Sec. 10409. Detection, control, and eradication of diseases and pests.
    Sec. 10410. Veterinary accreditation program.
    Sec. 10411. Cooperation.
    Sec. 10412. Reimbursable agreements.
    Sec. 10413. Administration and claims.
    Sec. 10414. Penalties.
    Sec. 10415. Enforcement.
    Sec. 10416. Regulations and orders.
    Sec. 10417. Authorization of appropriations.
    Sec. 10418. Repeals and conforming amendments.

                              Subtitle F--Livestock

    Sec. 10501. Transportation of poultry and other animals.
    Sec. 10502. Swine contractors.
    Sec. 10503. Right to discuss terms of contract.
    Sec. 10504. Veterinary training.
    Sec. 10505. Pseudorabies eradication program.

                           Subtitle G--Specialty Crops

    Sec. 10601. Marketing orders for caneberries.
    Sec. 10602. Availability of section 32 funds.
    Sec. 10603. Purchase of specialty crops.
    Sec. 10604. Protection for purchasers of farm products.
    Sec. 10605. Farmers' market promotion program.
    Sec. 10606. National organic certification cost-share program.
    Sec. 10607. Exemption of certified organic products from assessments.
    Sec. 10608. Cranberry acreage reserve program.

                           Subtitle H--Administration

    Sec. 10701. Initial rate of basic pay for employees of county
               committees.
    Sec. 10702. Commodity Futures Trading Commission pay comparability.
    Sec. 10703. Overtime and holiday pay.
    Sec. 10704. Assistant Secretary of Agriculture for Civil Rights.
    Sec. 10705. Operation of Graduate School of Department of Agriculture.
    Sec. 10706. Implementation funding and information management.
    Sec. 10707. Outreach and assistance for socially disadvantaged farmers
               and ranchers.
    Sec. 10708. Transparency and accountability for socially disadvantaged
               farmers and ranchers; public disclosure requirements for
               county committee elections.

                         Subtitle I--General Provisions

    Sec. 10801. Cotton classification services.
    Sec. 10802. Program of public education regarding use of biotechnology
               in producing food for human consumption.
    Sec. 10803. Chino Dairy Preserve Project.
    Sec. 10804. Grazinglands Research Laboratory.
    Sec. 10805. Food and Agricultural Policy Research Institute.
    Sec. 10806. Market names for catfish and ginseng.
    Sec. 10807. Food Safety Commission.
    Sec. 10808. Pasteurization.
    Sec. 10809. Rulemaking on labeling of irradiated food; certain
               petitions.
    Sec. 10810. Penalties for violations of Plant Protection Act.
    Sec. 10811. Preclearance quarantine inspections.
    Sec. 10812. Connecticut River Atlantic Salmon Commission.
    Sec. 10813. Pine Point School.
    Sec. 10814. 7-month extension of chapter 12 of title 11 of the United
               States Code.
    Sec. 10815. Practices involving nonambulatory livestock.
    Sec. 10816. Country of origin labeling.

                  Subtitle J--Miscellaneous Studies and Reports

    Sec. 10901. Report on specialty crop purchases.
    Sec. 10902. Report on pouched and canned salmon.
    Sec. 10903. Study on updating yields.
    Sec. 10904. Report on effect of farm program payments.
    Sec. 10905. Chiloquin Dam fish passage feasibility study.

    [[Page 116 STAT. 143]]

    Sec. 10906. Report on geographically disadvantaged farmers and ranchers.
    Sec. 10907. Studies on agricultural research and technology.
    Sec. 10908. Report on tobacco settlement agreement.
    Sec. 10909. Report on sale and use of pesticides for agricultural uses.
    Sec. 10910. Review of operation of agricultural and natural resource
               programs on tribal trust land.

                           TITLE I--COMMODITY PROGRAMS

    SEC. 1001. DEFINITIONS. <<NOTE: 7 USC 7901.>>

        In this title (other than subtitle C):
                (1) Agricultural act of 1949.--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
            of the Federal Agriculture Improvement and Reform Act of 1996 (7
            U.S.C. 7301).
                (2) Base acres.--The term ``base acres'', with respect to a
            covered commodity on a farm, means the number of acres
            established under section 1101 with respect to the covered
            commodity on the election made by the owner of the farm under
            subsection (a) of such section.
                (3) Counter-cyclical payment.--The term ``counter-cyclical
            payment'' means a payment made to producers on a farm under
            section 1104.
                (4) Covered commodity.--The term ``covered commodity'' means
            wheat, corn, grain sorghum, barley, oats, upland cotton, rice,
            soybeans, and other oilseeds.
                (5) Direct payment.--The term ``direct payment'' means a
            payment made to producers on a farm under section 1103.
                (6) Effective price.--The term ``effective price'', with
            respect to a covered commodity for a crop year, means the price
            calculated by the Secretary under section 1104 to determine
            whether counter-cyclical payments are required to be made for
            that crop year.
                (7) Extra long staple cotton.--The term ``extra long staple
            cotton'' means cotton that--
                        (A) is produced from pure strain varieties of the
                    Barbadense species or any hybrid 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.
                (8) Loan commodity.--The term `loan commodity' means wheat,
            corn, grain sorghum, barley, oats, upland cotton, extra long
            staple cotton, rice, soybeans, other oilseeds, wool, mohair,
            honey, dry peas, lentils, and small chickpeas.
                (9) Other oilseed.--The term ``other oilseed'' means a crop
            of sunflower seed, rapeseed, canola, safflower, flaxseed,
            mustard seed, or, if designated by the Secretary, another
            oilseed.
                (10) Payment acres.--The term ``payment acres'' means 85
            percent of the base acres of a covered commodity on a

    [[Page 116 STAT. 144]]

            farm, as established under section 1101, on which direct
            payments and counter-cyclical payments are made.
                (11) Payment yield.--
                        (A) In general.--The term ``payment yield'' means
                    the yield established under section 1102 for a farm for
                    a covered commodity.
                        (B) Updated payment yield.--The term ``updated
                    payment yield'' means the payment yield elected by the
                    owner of a farm under section 1102(e) to be used in
                    calculating the counter-cyclical payments for the farm.
                (12) Producer.--The term ``producer'' means an owner,
            operator, landlord, tenant, or sharecropper that shares in the
            risk of producing a crop and is entitled to share in the crop
            available for marketing from the farm, or would have shared had
            the crop been produced. 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 and shall
            ensure that program requirements do not adversely affect the
            ability of the grower to receive a payment under this title.
                (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) Target price.--The term ``target price'' means the
            price per bushel (or other appropriate unit in the case of
            upland cotton, rice, and other oilseeds) of a covered commodity
            used to determine the payment rate for counter-cyclical
            payments.
                (16) United states.--The term ``United States'', when used
            in a geographical sense, means all of the States.

            Subtitle A--Direct Payments and Counter-Cyclical Payments

    SEC. 1101. <<NOTE: 7 USC 7911.>>  ESTABLISHMENT OF BASE ACRES AND
                PAYMENT ACRES FOR A FARM.

        (a) Election by Owner of Base Acres Calculation Method.--
                (1) Alternative calculation methods.--For the purpose of
            making direct payments and counter-cyclical payments with
            respect to a farm, the Secretary shall give an owner of the farm
            an opportunity to elect 1 of the following as the method by
            which the base acres of all covered commodities on the farm are
            to be determined:
                        (A) Subject to paragraphs (3) and (4), the 4-year
                    average of the following:
                              (i) Acreage planted on the farm to covered
                          commodities for harvest, grazing, haying, silage,
                          or other similar purposes for the 1998 through
                          2001 crop years.
                              (ii) Any acreage on the farm that the
                          producers were prevented from planting during the
                          1998 through 2001 crop years to covered
                          commodities because of

    [[Page 116 STAT. 145]]

                          drought, flood, or other natural disaster, or
                          other condition beyond the control of the
                          producers, as determined by the Secretary.
                        (B) Subject to paragraph (3), the sum of the
                    following:
                              (i) The contract acreage (as defined in
                          section 102 of the Federal Agriculture Improvement
                          and Reform Act of 1996 (7 U.S.C. 7202)) used by
                          the Secretary to calculate the fiscal year 2002
                          payment authorized under section 114 of such Act
                          (7 U.S.C. 7214) for the covered commodities on the
                          farm.
                              (ii) The 4-year average of eligible oilseed
                          acreage on the farm for the 1998 through 2001 crop
                          years, as determined by the Secretary under
                          paragraph (2).
                (2) Eligible oilseed acreage.--
                        (A) Calculation.--For purposes of paragraph
                    (1)(B)(ii), the eligible acreage for each oilseed on a
                    farm during each of the 1998 through 2001 crop years
                    shall be determined in the manner provided in paragraph
                    (1)(A), except that the total acreage for all oilseeds
                    on the farm for a crop year may not exceed the
                    difference between--
                              (i) the total acreage determined under
                          paragraph (1)(A) for all covered commodities for
                          that crop year; and
                              (ii) the total contract acreage determined
                          under paragraph (1)(B)(i).
                        (B) Effect of negative number.--If the subtraction
                    performed under subparagraph (A) results in a negative
                    number, the eligible oilseed acreage on the farm for
                    that crop year shall be zero for purposes of determining
                    the 4-year average.
                        (C) Offset of contract acreage.--The owner of a farm
                    may increase the eligible acreage for an oilseed on the
                    farm by reducing the contract acreage determined under
                    paragraph (1)(B)(i) for 1 or more covered commodities on
                    an acre-for-acre basis, except that the total base
                    acreage for each oilseed on the farm may not exceed the
                    4-year average of each oilseed determined under
                    paragraph (1)(B)(ii).
                (3) Inclusion of all 4 years in average.--For the purpose of
            determining a 4-year acreage average under this subsection for a
            farm, the Secretary shall not exclude any crop year in which a
            covered commodity was not planted.
                (4) Treatment of multiple planting or prevented planting.--
            For the purpose of determining under paragraph (1)(A) the
            acreage on a farm that producers planted or were prevented from
            planting during the 1998 through 2001 crop years to covered
            commodities, if the acreage that was planted or prevented from
            being planted was devoted to another covered commodity in the
            same crop year (other than a covered commodity produced under an
            established practice of double cropping), the owner may elect
            the commodity to be used for that crop year in determining the
            4-year average, but may not include both the initial commodity
            and the subsequent commodity.

        (b) Single Election; Time for Election.--
                (1) Notice of election opportunity.--As soon as practicable
            after the date of enactment of this Act, the Secretary

    [[Page 116 STAT. 146]]

            shall provide notice to owners of farms regarding their
            opportunity to make the election described in subsection (a).
            The notice shall include the following:
                        (A) Notice that the opportunity of an owner to make
                    the election is being provided only once.
                        (B) Information regarding the manner in which the
                    election must be made and the time periods and manner in
                    which notice of the election must be submitted to the
                    Secretary.
                (2) Election deadline.--Within the time period and in the
            manner prescribed pursuant to paragraph (1), the owner of a farm
            shall submit to the Secretary notice of the election made by the
            owner under subsection (a).

        (c) Effect of Failure To Make Election.--If the owner of a farm
    fails to make the election under subsection (a) or fails to timely
    notify the Secretary of the election made, as required by subsection
    (b), the owner shall be deemed to have made the election described in
    subsection (a)(1)(B) to determine base acres for all covered commodities
    on the farm.
        (d) Application of Election to All Covered Commodities.--The
    election made under subparagraph (A) or (B) of subsection (a)(1), or
    deemed to be made under subsection (c), with respect to a farm shall
    apply to all of the covered commodities on the farm.
        (e) Treatment of Conservation Reserve Contract Acreage.--
                (1) In general.--The Secretary shall provide for an
            adjustment, as appropriate, in the base acres for covered
            commodities for a farm whenever either of the following
            circumstances occurs:
                        (A) A conservation reserve contract entered into
                    under section 1231 of the Food Security Act of 1985 (16
                    U.S.C. 3831) with respect to the farm expires or is
                    voluntarily terminated.
                        (B) Cropland is released from coverage under a
                    conservation reserve contract by the Secretary.
                (2) Special payment rules.--For the crop year in which a
            base acres adjustment under paragraph (1) is first made, the
            owner of the farm shall elect to receive either direct payments
            and counter-cyclical payments with respect to the acreage added
            to the farm under this subsection or a prorated payment under
            the conservation reserve contract, but not both.

        (f) Payment Acres.--The payment acres for a covered commodity on a
    farm shall be equal to 85 percent of the base acres for the covered
    commodity.

        (g) Prevention of Excess Base Acres.--
                (1) Required reduction.--If the sum of the base acres for a
            farm, together with the acreage described in paragraph (2),
            exceeds the actual cropland acreage of the farm, the Secretary
            shall reduce the base acres for 1 or more covered commodities
            for the farm or the base acres for peanuts for the farm under
            subtitle C so that the sum of the base acres and acreage
            described in paragraph (2) does not exceed the actual cropland
            acreage of the farm.
                (2) Other acreage.--For purposes of paragraph (1), the
            Secretary shall include the following:

    [[Page 116 STAT. 147]]

                        (A) Any base acres for peanuts for the farm under
                    subtitle C.
                        (B) Any acreage on the farm enrolled in the
                    conservation reserve program or wetlands reserve program
                    under chapter 1 of subtitle D of title XII of the Food
                    Security Act of 1985 (16 U.S.C. 3830 et seq.).
                        (C) Any other acreage on the farm enrolled in a
                    conservation program for which payments are made in
                    exchange for not producing an agricultural commodity on
                    the acreage.
                (3) Selection of acres.--The Secretary shall give the owner
            of the farm the opportunity to select the base acres or the base
            acres for peanuts for the farm under subtitle C against which
            the reduction required by paragraph (1) will be made.
                (4) Exception for double-cropped acreage.--In applying
            paragraph (1), the Secretary shall make an exception in the case
            of double cropping, as determined by the Secretary.
                (5) Coordinated application of requirements.--The Secretary
            shall take into account section 1302(f) when applying the
            requirements of this subsection.

        (h) Permanent Reduction in Base Acres.--The owner of a farm may
    reduce, at any time, the base acres for any covered commodity for the
    farm. The reduction shall be permanent and made in the manner prescribed
    by the Secretary.

    SEC. 1102. ESTABLISHMENT OF PAYMENT YIELD.

        (a) Establishment and Purpose.--For the purpose of making direct
    payments and counter-cyclical payments under this subtitle, the
    Secretary shall provide for the establishment of a payment yield for
    each farm for each covered commodity in accordance with this section.
        (b) Use of Farm Program Payment Yield.--Except as otherwise provided
    in this section, the payment yield for each of the 2002 through 2007
    crops of a covered commodity for a farm shall be the farm program
    payment yield established for the 1995 crop of the covered 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.
        (c) Farms Without Farm Program Payment Yield.--In the case of a farm
    for which a farm program payment yield is unavailable for a covered
    commodity (other than soybeans or other oilseeds), the Secretary shall
    establish an appropriate payment yield for the covered commodity on the
    farm taking into consideration the farm program payment yields
    applicable to the commodity under subsection (b) for similar farms, but
    before the yields for the similar farms are updated as provided in
    subsection (e).
        (d) Payment Yields for Oilseeds.--
                (1) Determination of average yield.--In the case of soybeans
            and each other oilseed, the Secretary shall determine the
            average yield per planted acre for the oilseed on a farm for the
            1998 through 2001 crop years, excluding any crop year in which
            the acreage planted to the oilseed was zero.
                (2) Adjustment for payment yield.--The payment yield for a
            farm for an oilseed shall be equal to the product of the
            following:

    [[Page 116 STAT. 148]]

                        (A) The average yield for the oilseed determined
                    under paragraph (1).
                        (B) The ratio resulting from dividing the national
                    average yield for the oilseed for the 1981 through 1985
                    crops by the national average yield for the oilseed for
                    the 1998 through 2001 crops.
                (3) Use of partial county average yield.--If the yield per
            planted acre for a crop of an oilseed for a farm for any of the
            1998 through 2001 crop years was less than 75 percent of the
            county yield for that oilseed, the Secretary shall assign a
            yield for that crop year equal to 75 percent of the county yield
            for the purpose of determining the average under paragraph (1).

        (e) Opportunity to Partially Update Yields Used to Determine
    Counter-Cyclical Payments.--
                (1) Election to update.--If the owner of a farm elects to
            use the base acres calculation method described in section
            1101(a)(1)(A), the owner shall also have a 1-time opportunity to
            elect to use 1 of the methods described in paragraph (3) to
            partially update the payment yields that would otherwise be used
            in calculating any counter-cyclical payments for covered
            commodities on the farm.
                (2) Time for election.--The election under paragraph (1)
            shall be made at the same time and in the same manner as the
            Secretary prescribes for the election required under section
            1101.
                (3) Methods of updating yields.--If the owner of a farm
            elects to update yields under this subsection, the payment yield
            for a covered commodity on the farm, for the purpose of
            calculating counter-cyclical payments only, shall be equal to
            the yield determined using either of the following:
                        (A) The sum of the following:
                              (i) The payment yield applicable for direct
                          payments for the covered commodity on the farm.
                              (ii) 70 percent of the difference between--
                                        (I) the average yield per planted
                                    acre for the crop of the covered
                                    commodity on the farm for the 1998
                                    through 2001 crop years, as determined
                                    by the Secretary, excluding any crop
                                    year in which the acreage planted to the
                                    crop of the covered commodity was zero;
                                    and
                                        (II) the payment yield applicable
                                    for direct payments for the covered
                                    commodity on the farm.
                        (B) 93.5 percent of the average of the yield per
                    planted acre for the crop of the covered commodity on
                    the farm for the 1998 through 2001 crop years, as
                    determined by the Secretary, excluding any crop year in
                    which the acreage planted to the crop of the covered
                    commodity was zero.
                (4) Use of partial county average yield.--If the yield per
            planted acre for a crop of the covered commodity for a farm for
            any of the 1998 through 2001 crop years was less than 75 percent
            of the county yield for that commodity, the Secretary shall
            assign a yield for that crop year equal to 75 percent of the
            county yield for the purpose of determining the average yield
            under paragraph (3).
                (5) Application of election and method to all covered
            commodities.--The owner of a farm may not elect the method

    [[Page 116 STAT. 149]]

            described in paragraph (3)(A) for 1 covered commodity on the
            farm and the method described in paragraph (3)(B) for other
            covered commodities on the farm.

    SEC. 1103. <<NOTE: 7 USC 7913.>> AVAILABILITY OF DIRECT PAYMENTS.

        (a) Payment Required.--For each of the 2002 through 2007 crop years
    of each covered commodity, the Secretary shall make direct payments to
    producers on farms for which payment yields and base acres are
    established.
        (b) Payment Rate.--The payment rates used to make direct payments
    with respect to covered commodities for a crop year are as follows:
                (1) Wheat, $0.52 per bushel.
                (2) Corn, $0.28 per bushel.
                (3) Grain sorghum, $0.35 per bushel.
                (4) Barley, $0.24 per bushel.
                (5) Oats, $0.024 per bushel.
                (6) Upland cotton, $0.0667 per pound.
                (7) Rice, $2.35 per hundredweight.
                (8) Soybeans, $0.44 per bushel.
                (9) Other oilseeds, $0.0080 per pound.

        (c) Payment Amount.--The amount of the direct payment to be paid to
    the producers on a farm for a covered commodity for a crop year shall be
    equal to the product of the following:
                (1) The payment rate specified in subsection (b).
                (2) The payment acres of the covered commodity on the farm.
                (3) The payment yield for the covered commodity for the
            farm.

        (d) Time for Payment.--
                (1) In general.--The Secretary shall make direct payments--
                        (A) in the case of the 2002 crop year, as soon as
                    practicable after the date of enactment of this Act; and
                        (B) in the case of each of the 2003 through 2007
                    crop years, not before October 1 of the calendar year in
                    which the crop of the covered commodity is harvested.
                (2) Advance payments.--At the option of the producers on a
            farm, up to 50 percent of the direct payment for a covered
            commodity for any of the 2003 through 2007 crop years shall be
            paid to the producers in advance. The producers shall select the
            month within which the advance payment for a crop year will be
            made. The month selected may be any month during the period
            beginning on December 1 of the calendar year before the calendar
            year in which the crop of the covered commodity is harvested
            through the month within which the direct payment would
            otherwise be made. The producers may change the selected month
            for a subsequent advance payment by providing advance notice to
            the Secretary.
                (3) Repayment of advance payments.--If a producer on a farm
            that receives an advance direct payment for a crop year ceases
            to be a producer on that farm, or the extent to which the
            producer shares in the risk of producing a crop changes, before
            the date the remainder of the direct payment is made, the
            producer shall be responsible for repaying the Secretary the
            applicable amount of the advance payment, as determined by the
            Secretary.

    [[Page 116 STAT. 150]]

    SEC. 1104. <<NOTE: 7 USC 7914.>>  AVAILABILITY OF COUNTER-CYCLICAL
                PAYMENTS.

        (a) Payment Required.--For each of the 2002 through 2007 crop years
    for each covered commodity, the Secretary shall make counter-cyclical
    payments to producers on farms for which payment yields and base acres
    are established with respect to the covered commodity if the Secretary
    determines that the effective price for the covered commodity is less
    than the target price for the covered commodity.
        (b) Effective Price.--For purposes of subsection (a), the effective
    price for a covered commodity is equal to the sum of the following:
                (1) The higher of the following:
                        (A) The national average market price received by
                    producers during the 12-month marketing year for the
                    covered commodity, as determined by the Secretary.
                        (B) The national average loan rate for a marketing
                    assistance loan for the covered commodity in effect for
                    the applicable period under subtitle B.
                (2) The payment rate in effect for the covered commodity
            under section 1103 for the purpose of making direct payments
            with respect to the covered commodity.

        (c) Target Price.--
                (1) 2002 and 2003 crop years.--For purposes of the 2002 and
            2003 crop years, the target prices for covered commodities shall
            be as follows:
                        (A) Wheat, $3.86 per bushel.
                        (B) Corn, $2.60 per bushel.
                        (C) Grain sorghum, $2.54 per bushel.
                        (D) Barley, $2.21 per bushel.
                        (E) Oats, $1.40 per bushel.
                        (F) Upland cotton, $0.7240 per pound.
                        (G) Rice, $10.50 per hundredweight.
                        (H) Soybeans, $5.80 per bushel.
                        (I) Other oilseeds, $0.0980 per pound.
                (2) Subsequent crop years.--For purposes of each of the 2004
            through 2007 crop years, the target prices for covered
            commodities shall be as follows:
                        (A) Wheat, $3.92 per bushel.
                        (B) Corn, $2.63 per bushel.
                        (C) Grain sorghum, $2.57 per bushel.
                        (D) Barley, $2.24 per bushel.
                        (E) Oats, $1.44 per bushel.
                        (F) Upland cotton, $0.7240 per pound.
                        (G) Rice, $10.50 per hundredweight.
                        (H) Soybeans, $5.80 per bushel.
                        (I) Other oilseeds, $0.1010 per pound.

        (d) Payment Rate.--The payment rate used to make counter-cyclical
    payments with respect to a covered commodity for a crop year shall be
    equal to the difference between--
                (1) the target price for the covered commodity; and
                (2) the effective price determined under subsection (b) for
            the covered commodity.

        (e) Payment Amount.--If counter-cyclical payments are required to be
    paid for any of the 2002 through 2007 crop years of a covered commodity,
    the amount of the counter-cyclical payment to be paid to the producers
    on a farm for that crop year shall be equal to the product of the
    following:

    [[Page 116 STAT. 151]]

                (1) The payment rate specified in subsection (d).
                (2) The payment acres of the covered commodity on the farm.
                (3) The payment yield or updated payment yield for the farm,
            depending on the election of the owner of the farm under section
            1102.

        (f) Time for Payments.--
                (1) General rule.--If the Secretary determines under
            subsection (a) that counter-cyclical payments are required to be
            made under this section for the crop of a covered commodity, the
            Secretary shall make the counter-cyclical payments for the crop
            as soon as practicable after the end of the 12-month marketing
            year for the covered commodity.
                (2) Availability of partial payments.--If, before the end of
            the 12-month marketing year for a covered commodity, the
            Secretary estimates that counter-cyclical payments will be
            required for the crop of the covered commodity, the Secretary
            shall give producers on a farm the option to receive partial
            payments of the counter-cyclical payment projected to be made
            for that crop of the covered commodity.
                (3) Time for partial payments.--
                        (A) 2002 through 2006 crop years.--When the
                    Secretary makes partial payments available under
                    paragraph (2) for a covered commodity for any of the
                    2002 through 2006 crop years--
                              (i) the first partial payment for the crop
                          year shall be made not earlier than October 1,
                          and, to the maximum extent practicable, not later
                          than October 31, of the calendar year in which the
                          crop of the covered commodity is harvested;
                              (ii) the second partial payment shall be made
                          not earlier than February 1 of the next calendar
                          year; and
                              (iii) the final partial payment shall be made
                          as soon as practicable after the end of the 12-
                          month marketing year for the covered commodity.
                        (B) 2007 crop year.--When the Secretary makes
                    partial payments available for a covered commodity for
                    the 2007 crop year--
                              (i) the first partial payment shall be made
                          after completion of the first 6 months of the
                          marketing year for the covered commodity; and
                              (ii) the final partial payment shall be made
                          as soon as practicable after the end of the 12-
                          month marketing year for the covered commodity.
                (4) Amount of partial payments.--
                        (A) 2002 through 2006 crop years.--
                              (i) First partial payment.--For each of the
                          2002 through 2006 crop years of a covered
                          commodity, the first partial payment under
                          paragraph (3) to the producers on a farm may not
                          exceed 35 percent of the projected counter-
                          cyclical payment for the covered commodity for the
                          crop year, as determined by the Secretary.
                              (ii) Second partial payment.--The second
                          partial payment for a covered commodity for a crop
                          year may not exceed the difference between--

    [[Page 116 STAT. 152]]

                                        (I) 70 percent of the projected
                                    counter-cyclical payment (including any
                                    revision thereof) for the crop of the
                                    covered commodity; and
                                        (II) the amount of the payment made
                                    under clause (i).
                              (iii) Final payment.--The final payment for a
                          covered commodity for a crop year shall be equal
                          to the difference between--
                                        (I) the actual counter-cyclical
                                    payment to be made to the producers for
                                    the covered commodity for that crop
                                    year; and
                                        (II) the amount of the partial
                                    payments made to the producers under
                                    clauses (i) and (ii) for that crop year.
                        (B) 2007 crop year.--
                              (i) First partial payment.--For the 2007 crop
                          year, the first partial payment under paragraph
                          (3) to the producers on a farm may not exceed 40
                          percent of the projected counter-cyclical payment
                          for the covered commodity for the crop year, as
                          determined by the Secretary.
                              (ii) Final payment.--The final payment for the
                          2007 crop year shall be equal to the difference
                          between--
                                        (I) the actual counter-cyclical
                                    payment to be made to the producers for
                                    the covered commodity for that crop
                                    year; and
                                        (II) the amount of the partial
                                    payment made to the producers under
                                    clause (i).
                (5) Repayment.--The producers on a farm that receive a
            partial payment under this subsection for a crop year shall
            repay to the Secretary the amount, if any, by which the total of
            the partial payments exceed the actual counter-cyclical payment
            to be made for the covered commodity for that crop year.

    SEC. 1105. <<NOTE: 7 USC 7915.>>  PRODUCER AGREEMENT REQUIRED AS
                CONDITION OF PROVISION OF DIRECT PAYMENTS AND COUNTER-
                CYCLICAL PAYMENTS.

        (a) Compliance With Certain Requirements.--
                (1) Requirements.--Before the producers on a farm may
            receive direct payments or counter-cyclical payments with
            respect to the farm, the producers shall agree, during the crop
            year for which the payments are made and in exchange for the
            payments--
                        (A) to comply with applicable conservation
                    requirements under subtitle B of title XII of the Food
                    Security Act of 1985 (16 U.S.C. 3811 et seq.);
                        (B) to comply with applicable wetland protection
                    requirements under subtitle C of title XII of the Act
                    (16 U.S.C. 3821 et seq.);
                        (C) to comply with the planting flexibility
                    requirements of section 1106;
                        (D) to use the land on the farm, in a quantity equal
                    to the attributable base acres for the farm and any base
                    acres for peanuts for the farm under subtitle C for an

    [[Page 116 STAT. 153]]

                    agricultural or conserving use, and not for a
                    nonagricultural commercial or industrial use, as
                    determined by the Secretary; and
                        (E) to effectively control noxious weeds and
                    otherwise maintain the land in accordance with sound
                    agricultural practices, as determined by the Secretary,
                    if the agricultural or conserving use involves the
                    noncultivation of any portion of the land referred to in
                    subparagraph (D).
                (2) Compliance.--The Secretary may issue such rules as the
            Secretary considers necessary to ensure producer compliance with
            the requirements of paragraph (1).
                (3) Modification.--At the request of the transferee or
            owner, the Secretary may modify the requirements of this
            subsection if the modifications are consistent with the
            objectives of this subsection, as determined by the Secretary.

        (b) Transfer or Change of Interest in Farm.--
                (1) Termination.--Except as provided in paragraph (2), a
            transfer of (or change in) the interest of the producers on a
            farm in base acres for which direct payments or counter-cyclical
            payments are made shall result in the termination of the
            payments with respect to the base acres, unless the transferee
            or owner of the acreage agrees to assume all obligations under
            subsection (a). The termination shall take effect on the date
            determined by the Secretary.
                (2) Exception.--If a 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 rules issued by the
            Secretary.

        (c) Acreage Reports.--As a condition on the receipt of any benefits
    under this subtitle or subtitle B, the Secretary shall require producers
    on a farm to submit to the Secretary annual acreage reports with respect
    to all cropland on the farm.
        (d) Tenants and Sharecroppers.--In carrying out this subtitle, the
    Secretary shall provide adequate safeguards to protect the interests of
    tenants and sharecroppers.
        (e) Sharing of Payments.--The Secretary shall provide for the
    sharing of direct payments and counter-cyclical payments among the
    producers on a farm on a fair and equitable basis.

    SEC. 1106. <<NOTE: 7 USC 7916.>>  PLANTING FLEXIBILITY.

        (a) Permitted Crops.--Subject to subsection (b), any commodity or
    crop may be planted on base acres on a farm.
        (b) Limitations Regarding Certain Commodities.--
                (1) General limitation.--The planting of an agricultural
            commodity specified in paragraph (3) shall be prohibited on base
            acres unless the commodity, if planted, is destroyed before
            harvest.
                (2) Treatment of trees and other perennials.--The planting
            of an agricultural commodity specified in paragraph (3) that is
            produced on a tree or other perennial plant shall be prohibited
            on base acres.
                (3) Covered agricultural commodities.--Paragraphs (1) and
            (2) apply to the following agricultural commodities:
                        (A) Fruits.
                        (B) Vegetables (other than lentils, mung beans, and
                    dry peas).

    [[Page 116 STAT. 154]]

                        (C) Wild rice.

        (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) shall not
    limit the planting of an agricultural commodity specified in paragraph
    (3) of that subsection--
                (1) in any region in which there is a history of double-
            cropping of covered commodities with agricultural commodities
            specified in subsection (b)(3), as determined by the Secretary,
            in which case the double-cropping shall be permitted;
                (2) on a farm that the Secretary determines has a history of
            planting agricultural commodities specified in subsection (b)(3)
            on base acres, except that direct payments and counter-cyclical
            payments shall be reduced by an acre for each acre planted to
            such an agricultural commodity; or
                (3) by the producers on a farm that the Secretary determines
            has an established planting history of a specific agricultural
            commodity specified in subsection (b)(3), except that--
                        (A) the quantity planted may not exceed the average
                    annual planting history of such agricultural commodity
                    by the producers on the farm in the 1991 through 1995 or
                    1998 through 2001 crop years (excluding any crop year in
                    which no plantings were made), as determined by the
                    Secretary; and
                        (B) direct payments and counter-cyclical payments
                    shall be reduced by an acre for each acre planted to
                    such agricultural commodity.

        (d) Special Rule for 2002 Crop Year.--For the 2002 crop year only,
    if the calculation of base acres under section 1101(a) results in total
    base acres for a farm in excess of the contract acreage (as defined in
    section 102 of the Federal Agriculture Improvement and Reform Act of
    1996 (7 U.S.C. 7202)) for the farm used to calculate the fiscal year
    2002 payment authorized under section 114 of such Act (7 U.S.C. 7214),
    paragraphs (1) and (2) of subsection (b) shall not limit the harvesting
    of an agricultural commodity specified in paragraph (3) of that
    subsection on the excess base acres, except that direct payments and
    counter-cyclical payments for the 2002 crop year shall be reduced by an
    acre for each acre of the excess base acres planted to such an
    agricultural commodity.

    SEC. 1107. <<NOTE: 7 USC 7917.>>  RELATION TO REMAINING PAYMENT
                AUTHORITY UNDER PRODUCTION FLEXIBILITY CONTRACTS.

        (a) Termination of Superseded Payment Authority.--Notwithstanding
    section 113(a)(7) of the Federal Agriculture Improvement and Reform Act
    of 1996 (7 U.S.C. 7213(a)(7)) or any other provision of law, the
    Secretary shall not make payments for fiscal year 2002 after the date of
    enactment of this Act under a production flexibility contract entered
    into under section 111 of that Act (7 U.S.C. 7211) unless requested by
    the producer that is a party to the contract.
        (b) Contract Payments Made Before Enactment.--If a producer receives
    all or any portion of the payment authorized for fiscal year 2002 under
    a production flexibility contract, the Secretary shall reduce the amount
    of the direct payment otherwise due the producer for the 2002 crop year
    under section 1103 by the amount of the fiscal year 2002 payment
    received by the producer under the production flexibility contract.

    [[Page 116 STAT. 155]]

    SEC. 1108. <<NOTE: 7 USC 7918.>>  PERIOD OF EFFECTIVENESS.

        This subtitle shall be effective beginning with the 2002 crop year
    of each covered commodity through the 2007 crop year.

       Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

    SEC. 1201. <<NOTE: 7 USC 7931.>> AVAILABILITY OF NONRECOURSE MARKETING
                ASSISTANCE LOANS FOR LOAN COMMODITIES.

        (a) Nonrecourse Loans Available.--
                (1) Availability.--For each of the 2002 through 2007 crops
            of each loan commodity, the Secretary shall make available to
            producers on a farm nonrecourse marketing assistance loans for
            loan commodities produced on the farm.
                (2) Terms and conditions.--The marketing assistance loans
            shall be made under terms and conditions that are prescribed by
            the Secretary and at the loan rate established under section
            1202 for the loan commodity.

        (b) Eligible Production.--The producers on a farm shall be eligible
    for a marketing assistance loan under subsection (a) for any quantity of
    a loan commodity produced on the farm.
        (c) Treatment of Certain Commingled Commodities.--In carrying out
    this subtitle, the Secretary shall make loans to producers on a farm
    that would be eligible to obtain a marketing assistance loan, but for
    the fact the loan commodity owned by the producers on the farm
    commingled with loan commodities of other producers in facilities
    unlicensed for the storage of agricultural commodities by the Secretary
    or a State licensing authority, if the producers obtaining the loan
    agree to immediately redeem the loan collateral in accordance with
    section 166 of the Federal Agriculture Improvement and Reform Act of
    1996 (7 U.S.C. 7286).
        (d) Compliance With Conservation and Wetlands Requirements.--As a
    condition of the receipt of a marketing assistance loan under subsection
    (a), the producer shall comply with applicable conservation requirements
    under subtitle B of title XII of the Food Security Act of 1985 (16
    U.S.C. 3811 et seq.) and applicable wetland protection requirements
    under subtitle C of title XII of the Act (16 U.S.C. 3821 et seq.) during
    the term of the loan.
        (e) Termination of Superseded Loan Authority.--Notwithstanding
    section 131 of the Federal Agriculture Improvement and Reform Act of
    1996 (7 U.S.C. 7231), nonrecourse marketing assistance loans shall not
    be made for the 2002 crop of loan commodities under subtitle C of title
    I of such Act.

    SEC. 1202. <<NOTE: 7 USC 7932.>> LOAN RATES FOR NONRECOURSE MARKETING
                ASSISTANCE LOANS.

        (a) 2002 and 2003 Crop Years.--For purposes of the 2002 and 2003
    crop years, the loan rate for a marketing assistance loan under section
    1201 for a loan commodity shall be equal to the following:
                (1) In the case of wheat, $2.80 per bushel.
                (2) In the case of corn, $1.98 per bushel.
                (3) In the case of grain sorghum, $1.98 per bushel.
                (4) In the case of barley, $1.88 per bushel.
                (5) In the case of oats, $1.35 per bushel.
                (6) In the case of upland cotton, $0.52 per pound.

    [[Page 116 STAT. 156]]

                (7) In the case of extra long staple cotton, $0.7977 per
            pound.
                (8) In the case of rice, $6.50 per hundredweight.
                (9) In the case of soybeans, $5.00 per bushel.
                (10) In the case of other oilseeds, $0.0960 per pound.
                (11) In the case of graded wool, $1.00 per pound.
                (12) In the case of nongraded wool, $0.40 per pound.
                (13) In the case of mohair, $4.20 per pound.
                (14) In the case of honey, $0.60 per pound.
                (15) In the case of dry peas, $6.33 per hundredweight.
                (16) In the case of lentils, $11.94 per hundredweight.
                (17) In the case of small chickpeas, $7.56 per
            hundredweight.

        (b) 2004 Through 2007 crop Years.--For purposes of the 2004 through
    2007 crop years, the loan rate for a marketing assistance loan under
    section 1201 for a loan commodity shall be equal to the following:
                (1) In the case of wheat, $2.75 per bushel.
                (2) In the case of corn, $1.95 per bushel.
                (3) In the case of grain sorghum, $1.95 per bushel.
                (4) In the case of barley, $1.85 per bushel.
                (5) In the case of oats, $1.33 per bushel.
                (6) In the case of upland cotton, $0.52 per pound.
                (7) In the case of extra long staple cotton, $0.7977 per
            pound.
                (8) In the case of rice, $6.50 per hundredweight.
                (9) In the case of soybeans, $5.00 per bushel.
                (10) In the case of other oilseeds, $0.0930 per pound.
                (11) In the case of graded wool, $1.00 per pound.
                (12) In the case of nongraded wool, $0.40 per pound.
                (13) In the case of mohair, $4.20 per pound.
                (14) In the case of honey, $0.60 per pound.
                (15) In the case of dry peas, $6.22 per hundredweight.
                (16) In the case of lentils, $11.72 per hundredweight.
                (17) In the case of small chickpeas, $7.43 per
            hundredweight.

    SEC. 1203. <<NOTE: 7 USC 7933.>>  TERM OF LOANS.

        (a) Term of Loan.--In the case of each loan commodity, a marketing
    assistance loan under section 1201 shall have a term of 9 months
    beginning on the first day of the first month after the month in which
    the loan is made.

        (b) Extensions Prohibited.--The Secretary may not extend the term of
    a marketing assistance loan for any loan commodity.

    SEC. 1204. <<NOTE: 7 USC 7934.>> REPAYMENT OF LOANS.

        (a) General Rule.--The Secretary shall permit the producers on a
    farm to repay a marketing assistance loan under section 1201 for a 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 1202, plus interest (determined in accordance with
            section 163 of the Federal Agriculture Improvement and Reform
            Act of 1996 (7 U.S.C. 7283)); or
                (2) 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;

    [[Page 116 STAT. 157]]

                        (C) minimize the cost incurred by the Federal
                    Government in storing the commodity;
                        (D) allow the commodity produced in the United
                    States to be marketed freely and competitively, both
                    domestically and internationally; and
                        (E) minimize discrepancies in marketing loan
                    benefits across State boundaries and across county
                    boundaries.

        (b) Repayment Rates for Upland Cotton and Rice.--The Secretary shall
    permit producers to repay a marketing assistance loan under section 1201
    for upland cotton and rice at a rate that is the lesser of--
                (1) the loan rate established for the commodity under
            section 1202, plus interest (determined in accordance with
            section 163 of the Federal Agriculture Improvement and Reform
            Act of 1996 (7 U.S.C. 7283)); or
                (2) the prevailing world market price for the commodity
            (adjusted to United States quality and location), as determined
            by the Secretary.

        (c) Repayment Rates for Extra Long Staple Cotton.--Repayment of a
    marketing assistance loan for extra long staple cotton shall be at the
    loan rate established for the commodity under section 1202, plus
    interest (determined in accordance with section 163 of the Federal
    Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).

        (d) Prevailing World Market <<NOTE: Regulations.>>  Price.--For
    purposes of this section and section 1207, the Secretary shall prescribe
    by regulation--
                (1) a formula to determine the prevailing world market price
            for upland cotton and rice, adjusted to United States quality
            and location; and
                (2) a mechanism by which the Secretary shall announce
            periodically the prevailing world market price for upland cotton
            and rice.

        (e) Adjustment of Prevailing World Market Price for Upland Cotton.--
                (1) In general.--During the period beginning on the date of
            the enactment of this Act through July 31, 2008, the prevailing
            world market price for upland cotton (adjusted to United States
            quality and location) established under subsection (d) shall be
            further adjusted if--
                        (A) the adjusted prevailing world market price is
                    less than 115 percent of the loan rate for upland cotton
                    established under section 1202, as determined by the
                    Secretary; and
                        (B) the Friday through Thursday average price
                    quotation for the lowest-priced United States growth as
                    quoted for Middling (M) 1\3/32\-inch cotton delivered
                    C.I.F. Northern Europe is greater than the Friday
                    through Thursday average price of the 5 lowest-priced
                    growths of upland cotton, as quoted for Middling (M)
                    1\3/32\-inch cotton, delivered C.I.F. Northern Europe
                    (referred to in this section as the ``Northern Europe
                    price'').
                (2) Further adjustment.--Except as provided in paragraph
            (3), the adjusted prevailing world market price for upland
            cotton shall be further adjusted on the basis of some or all of
            the following data, as available:
                        (A) The United States share of world exports.

    [[Page 116 STAT. 158]]

                        (B) The current level of cotton export sales and
                    cotton export shipments.
                        (C) Other data determined by the Secretary to be
                    relevant in establishing an accurate prevailing world
                    market price for upland cotton (adjusted to United
                    States quality and location).
                (3) Limitation on further adjustment.--The adjustment under
            paragraph (2) may not exceed the difference between--
                        (A) the Friday through Thursday average price for
                    the lowest-priced United States growth as quoted for
                    Middling 1\3/32\-inch cotton delivered C.I.F. Northern
                    Europe; and
                        (B) the Northern Europe price.

        (f) Good Faith Exception to Beneficial Interest Requirement.--For
    the 2001 crop year only, in the case of the producers on a farm that
    marketed or otherwise lost beneficial interest in a loan commodity for
    which a marketing assistance loan was made under section 131 of the
    Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7231)
    before repaying the loan, the Secretary shall permit the producers to
    repay the loan at the appropriate repayment rate that was in effect for
    the loan commodity under section 134 of that Act (7 U.S.C. 7234) on the
    date that the producers lost beneficial interest, as determined by the
    Secretary, if the Secretary determines the producers acted in good
    faith.

    SEC. 1205. <<NOTE: 7 USC 7935.>>  LOAN DEFICIENCY PAYMENTS.

        (a) Availability of Loan Deficiency Payments.--
                (1) In general.--Except as provided in subsection (d), the
            Secretary may make loan deficiency payments available to
            producers on a farm that, although eligible to obtain a
            marketing assistance loan under section 1201 with respect to a
            loan commodity, agree to forgo obtaining the loan for the
            commodity in return for loan deficiency payments under this
            section.
                (2) Unshorn pelts, hay, and silage.--Nongraded wool in the
            form of unshorn pelts and hay and silage derived from a loan
            commodity are not eligible for a marketing assistance loan under
            section 1201. However, effective for the 2002 through 2007 crop
            years, the Secretary may make loan deficiency payments available
            under this section to producers on a farm that produce unshorn
            pelts or hay and silage derived from a loan commodity.

        (b) Computation.--A loan deficiency payment for a loan commodity or
    commodity referred to in subsection (a)(2) shall be computed by
    multiplying--
                (1) the payment rate determined under subsection (c) for the
            commodity; by
                (2) the quantity of the commodity produced by the eligible
            producers, excluding any quantity for which the producers obtain
            a marketing assistance loan under section 1201.

        (c) Payment Rate.--
                (1) In general.--In the case of a loan commodity, the
            payment rate shall be the amount by which--
                        (A) the loan rate established under section 1202 for
                    the loan commodity; exceeds
                        (B) the rate at which a marketing assistance loan
                    for the loan commodity may be repaid under section 1204.

    [[Page 116 STAT. 159]]

                (2) Unshorn pelts.--In the case of unshorn pelts, the
            payment rate shall be the amount by which--
                        (A) the loan rate established under section 1202 for
                    ungraded wool; exceeds
                        (B) the rate at which a marketing assistance loan
                    for ungraded wool may be repaid under section 1204.
                (3) hay and silage.--In the case of hay or silage derived
            from a loan commodity, the payment rate shall be the amount by
            which--
                        (A) the loan rate established under section 1202 for
                    the loan commodity from which the hay or silage is
                    derived; exceeds
                        (B) the rate at which a marketing assistance loan
                    for the loan commodity may be repaid under section 1204.

        (d) Exception for Extra Long Staple Cotton.--This section shall not
    apply with respect to extra long staple cotton.
        (e) Effective Date for Payment Rate Determination.--The Secretary
    shall determine the amount of the loan deficiency payment to be made
    under this section to the producers on a farm with respect to a quantity
    of a loan commodity or commodity referred to in subsection (a)(2) using
    the payment rate in effect under subsection (c) as of the date the
    producers request the payment.
        (f) Special Loan Deficiency Payment Rules.--
                (1) First-time loan commodities.--For the 2002 crop of wool,
            mohair, honey, dry peas, lentils and small chickpeas, in the
            case of producers of such a crop that would be eligible for a
            loan deficiency payment under this section except for the fact
            that the producers lost beneficial interest in the crop prior to
            the date of publication of the regulations implementing this
            section, the producers shall be eligible for a loan deficiency
            payment as of the date producers marketed or otherwise lost
            beneficial interest in the crop, as determined by the Secretary.
                (2) 2001 crop year.--Section 135 of the Federal Agriculture
            Improvement and Reform Act of 1996 (7 U.S.C. 7235) is amended--
                        (A) in subsection (a)(2), by striking ``2000 crop
                    year'' and inserting ``2000 and 2001 crop years''; and
                        (B) by adding at the end the following:

        ``(g) Effective Date for Payment Rate Determination.--For the 2001
    crop year, the Secretary shall determine the amount of the loan
    deficiency payment to be made under this section to the producers on a
    farm with respect to a quantity of a loan commodity using the payment
    rate in effect under subsection (c) as of the earlier of the following:
                ``(1) The date on which the producers marketed or otherwise
            lost beneficial interest in the crop of the loan commodity, as
            determined by the Secretary.
                ``(2) The date the producers requested the payment.''.

    SEC. 1206. <<NOTE: 7 USC 7936.>>  PAYMENTS IN LIEU OF LOAN DEFICIENCY
                PAYMENTS FOR GRAZED ACREAGE.

        (a) Eligible Producers.--
                (1) In general.--Effective for the 2002 through 2007 crop
            years, in the case of a producer that would be eligible for a
            loan deficiency payment under section 1205 for wheat, barley, or
            oats, but that elects to use acreage planted to the wheat,

    [[Page 116 STAT. 160]]

            barley, or oats for the grazing of livestock, the Secretary
            shall make a payment to the producer under this section if the
            producer enters into an agreement with the Secretary to forgo
            any other harvesting of the wheat, barley, or oats on that
            acreage.
                (2) Grazing of triticale acreage.--Effective for the 2002
            through 2007 crop years, with respect to a producer on a farm
            that uses acreage planted to triticale for the grazing of
            livestock, the Secretary shall make a payment to the producer
            under this section if the producer enters into an agreement with
            the Secretary to forgo any other harvesting of triticale on that
            acreage.

        (b) Payment Amount.--
                (1) In general.--The amount of a payment made under this
            section to a producer on a farm described in subsection (a)(1)
            shall be equal to the amount determined by multiplying--
                        (A) the loan deficiency payment rate determined
                    under section 1205(c) in effect, as of the date of the
                    agreement, for the county in which the farm is located;
                    by
                        (B) the payment quantity determined by multiplying--
                              (i) the quantity of the grazed acreage on the
                          farm with respect to which the producer elects to
                          forgo harvesting of wheat, barley, or oats; and
                              (ii) the payment yield in effect for the
                          calculation of direct payments under subtitle A
                          with respect to that loan commodity on the farm
                          or, in the case of a farm without a payment yield
                          for that loan commodity, an appropriate yield
                          established by the Secretary in a manner
                          consistent with section 1102(c).
                (2) Grazing of triticale acreage.--The amount of a payment
            made under this section to a producer on a farm described in
            subsection (a)(2) shall be equal to the amount determined by
            multiplying--
                        (A) the loan deficiency payment rate determined
                    under section 1205(c) in effect for wheat, as of the
                    date of the agreement, for the county in which the farm
                    is located; by
                        (B) the payment quantity determined by multiplying--
                              (i) the quantity of the grazed acreage on the
                          farm with respect to which the producer elects to
                          forgo harvesting of triticale; and
                              (ii) the payment yield in effect for the
                          calculation of direct payments under subtitle A
                          with respect to wheat on the farm or, in the case
                          of a farm without a payment yield for wheat, an
                          appropriate yield established by the Secretary in
                          a manner consistent with section 1102(c).

        (c) Time, Manner, and Availability of Payment.--
                (1) Time and manner.--A payment under this section shall be
            made at the same time and in the same manner as loan deficiency
            payments are made under section 1205.
                (2) Availability.--The Secretary shall establish an
            availability period for the payments authorized by this section.
            In the case of wheat, barley, and oats, the availability period
            shall be consistent with the availability period for the
            commodity established by the Secretary for marketing assistance
            loans authorized by this subtitle.

    [[Page 116 STAT. 161]]

        (d) Prohibition on Crop Insurance Indemnity or Noninsured Crop
    Assistance.--A 2002 through 2007 crop of wheat, barley, oats, or
    triticale planted on acreage that a producer elects, in the agreement
    required by subsection (a), to use for the grazing of livestock in lieu
    of any other harvesting of the crop shall not be eligible for an
    indemnity under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.)
    or noninsured crop assistance under section 196 of the Federal
    Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333).

    SEC. 1207. <<NOTE: 7 USC 7937.>>  SPECIAL MARKETING LOAN PROVISIONS FOR
                UPLAND COTTON.

        (a) Cotton User Marketing Certificates.--
                (1) Issuance.--During the period beginning on the date of
            the enactment of this Act through July 31, 2008, 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--
                        (A) the Friday through Thursday average price
                    quotation for the lowest-priced United States growth, as
                    quoted for Middling (M) 1\3/32\-inch cotton, delivered
                    C.I.F. Northern Europe exceeds the Northern Europe price
                    by more than 1.25 cents per pound; and
                        (B) the prevailing world market price for upland
                    cotton (adjusted to United States quality and location)
                    does not exceed 134 percent of the loan rate for upland
                    cotton established under section 1202.
                (2) Value of certificates or payments.--The value of the
            marketing certificates or cash payments shall be based on the
            amount of the difference (reduced by 1.25 cents per pound) in
            the prices during the fourth week of the consecutive 4-week
            period multiplied by the quantity of upland cotton included in
            the documented sales.
                (3) Administration of marketing certificates.--
                        (A) Redemption, marketing, or exchange.--The
                    Secretary shall establish procedures for redeeming
                    marketing certificates for cash or marketing or exchange
                    of the certificates for agricultural commodities owned
                    by the Commodity Credit Corporation or pledged to the
                    Commodity Credit Corporation as collateral for a loan in
                    such manner, and at such price levels, as the Secretary
                    determines will best effectuate the purposes of cotton
                    user marketing certificates, including enhancing the
                    competitiveness and marketability of United States
                    cotton. Any price restrictions that would otherwise
                    apply to the disposition of agricultural commodities by
                    the Commodity Credit Corporation shall not apply to the
                    redemption of certificates under this subsection.
                        (B) Designation of commodities and products.--To the
                    extent practicable, the Secretary shall permit owners of
                    certificates to designate the commodities and products,
                    including storage sites, the owners would prefer to
                    receive in exchange for certificates
                        (C) Transfers.--Marketing certificates issued to
                    domestic users and exporters of upland cotton may be

    [[Page 116 STAT. 162]]

                    transferred to other persons in accordance with
                    regulations issued by the Secretary.
                (4) Delayed application of threshold.--Through July 31,
            2006, the Secretary shall make the calculations under paragraphs
            (1)(A) and (2) without regard to the 1.25 cent threshold
            provided under those paragraphs.

        (b) Special Import Quota.--
                (1) Establishment.--
                        (A) In general.--The President shall carry out an
                    import quota program during the period beginning on the
                    date of the enactment of this Act through July 31, 2008,
                    as provided in this subsection.
                        (B) Program requirements.--Except as provided in
                    subparagraph (C), whenever the Secretary determines and
                    announces that for any consecutive 4-week period, the
                    Friday through Thursday average price quotation for the
                    lowest-priced United States growth, as quoted for
                    Middling (M) 1\3/32\-inch cotton, delivered C.I.F.
                    Northern Europe, adjusted for the value of any
                    certificate issued under subsection (a), exceeds the
                    Northern Europe price by more than 1.25 cents per pound,
                    there shall immediately be in effect a special import
                    quota.
                        (C) Tight domestic supply.--During any month for
                    which the Secretary estimates the season-ending United
                    States upland cotton stocks-to-use ratio, as determined
                    under subparagraph (D), to be below 16 percent, the
                    Secretary, in making the determination under
                    subparagraph (B), shall not adjust the Friday through
                    Thursday average price quotation for the lowest-priced
                    United States growth, as quoted for Middling (M) 1\3/
                    32\-inch cotton, delivered C.I.F. Northern Europe, for
                    the value of any certificates issued under subsection
                    (a).
                        (D) Season-ending united states stocks-to-use
                    ratio.--For the purposes of making estimates under
                    subparagraph (C), the Secretary shall, on a monthly
                    basis, estimate and report the season-ending United
                    States upland cotton stocks-to-use ratio, excluding
                    projected raw cotton imports but including the quantity
                    of raw cotton that has been imported into the United
                    States during the marketing year.
                        (E) Delayed application of threshold.--Through July
                    31, 2006, the Secretary shall make the calculation under
                    subparagraph (B) without regard to the 1.25 cent
                    threshold provided under that subparagraph.
                (2) Quantity.--The quota shall be equal to one week's
            consumption of upland cotton by domestic mills at the seasonally
            adjusted average rate of the most recent three months for which
            data are available.
                (3) Application.--The <<NOTE: Deadlines.>> quota shall apply
            to upland cotton purchased not later than 90 days after the date
            of the Secretary's announcement under paragraph (1) and entered
            into the United States not later than 180 days after the date.
                (4) Overlap.--A special quota period may be established that
            overlaps any existing quota period if required by paragraph (1),
            except that a special quota period may not be established under
            this subsection if a quota period has been established under
            subsection (c).

    [[Page 116 STAT. 163]]

                (5) Preferential tariff treatment.--The quantity under a
            special import quota shall be considered to be an in-quota
            quantity for purposes of--
                        (A) section 213(d) of the Caribbean Basin Economic
                    Recovery Act (19 U.S.C. 2703(d));
                        (B) section 204 of the Andean Trade Preference Act
                    (19 U.S.C. 3203);
                        (C) section 503(d) of the Trade Act of 1974 (19
                    U.S.C. 2463(d)); and
                        (D) General Note 3(a)(iv) to the Harmonized Tariff
                    Schedule.
                (6) Definition.--In this subsection, the term ``special
            import quota'' means a quantity of imports that is not subject
            to the over-quota tariff rate of a tariff-rate quota.
                (7) Limitation.--The quantity of cotton entered into the
            United States during any marketing year under the special import
            quota established under this subsection may not exceed the
            equivalent of 5 week's consumption of upland cotton by domestic
            mills at the seasonally adjusted average rate of the 3 months
            immediately preceding the first special import quota established
            in any marketing year.

        (c) Limited Global Import Quota for Upland Cotton.--
                (1) In general.--The President shall carry out an import
            quota program that provides that whenever the Secretary
            determines and announces that the average price of the base
            quality of upland cotton, as determined by the Secretary, in the
            designated spot markets for a month exceeded 130 percent of the
            average price of such quality of cotton in the markets for the
            preceding 36 months, notwithstanding any other provision of law,
            there shall immediately be in effect a limited global import
            quota subject to the following conditions:
                        (A) Quantity.--The quantity of the quota shall be
                    equal to 21 days of domestic mill consumption of upland
                    cotton at the seasonally adjusted average rate of the
                    most recent 3 months for which data are available.
                        (B) Quantity if prior quota.--If a quota has been
                    established under this subsection during the preceding
                    12 months, the quantity of the quota next established
                    under this subsection shall be the smaller of 21 days of
                    domestic mill consumption calculated under subparagraph
                    (A) or the quantity required to increase the supply to
                    130 percent of the demand.
                        (C) Preferential tariff treatment.--The quantity
                    under a limited global import quota shall be considered
                    to be an in-quota quantity for purposes of--
                              (i) section 213(d) of the Caribbean Basin
                          Economic Recovery Act (19 U.S.C. 2703(d));
                              (ii) section 204 of the Andean Trade
                          Preference Act (19 U.S.C. 3203);
                              (iii) section 503(d) of the Trade Act of 1974
                          (19 U.S.C. 2463(d)); and
                              (iv) General Note 3(a)(iv) to the Harmonized
                          Tariff Schedule.
                        (D) Definitions.--In this subsection:
                              (i) Supply.--The term ``supply'' means, using
                          the latest official data of the Bureau of the
                          Census, the

    [[Page 116 STAT. 164]]

                          Department of Agriculture, and the Department of
                          the Treasury--
                                        (I) the carry-over of upland cotton
                                    at the beginning of the marketing year
                                    (adjusted to 480-pound bales) in which
                                    the quota is established;
                                        (II) production of the current crop;
                                    and
                                        (III) imports to the latest date
                                    available during the marketing year.
                              (ii) Demand.--The term ``demand'' means--
                                        (I) the average seasonally adjusted
                                    annual rate of domestic mill consumption
                                    during the most recent 3 months for
                                    which data are available; and
                                        (II) the larger of--
                                                (aa) average exports of
                                            upland cotton during the
                                            preceding 6 marketing years; or
                                                (bb) cumulative exports of
                                            upland cotton plus outstanding
                                            export sales for the marketing
                                            year in which the quota is
                                            established.
                              (iii) Limited global import quota.--The term
                          ``limited global import quota'' means a quantity
                          of imports that is not subject to the over-quota
                          tariff rate of a tariff-rate quota.
                        (E) Quota entry period.--When a quota is established
                    under this subsection, cotton may be entered under the
                    quota during the 90-day period beginning on the date the
                    quota is established by the Secretary.
                (2) No overlap.--Notwithstanding paragraph (1), a quota
            period may not be established that overlaps an existing quota
            period or a special quota period established under subsection
            (b).

    SEC. 1208. <<NOTE: 7 USC 7938.>>  SPECIAL COMPETITIVE PROVISIONS FOR
                EXTRA LONG STAPLE COTTON.

        (a) Competitiveness Program.--Notwithstanding any other provision of
    law, during the period beginning on the date of the enactment of this
    Act through July 31, 2008, the Secretary shall carry out a program--
                (1) to maintain and expand the domestic use of extra long
            staple cotton produced in the United States;
                (2) to increase exports of extra long staple cotton produced
            in the United States; and
                (3) to ensure that extra long staple cotton produced in the
            United States remains competitive in world markets.

        (b) Payments Under Program; Trigger.--Under the program, the
    Secretary shall make payments available under this section whenever--
                (1) for a consecutive 4-week period, the world market price
            for the lowest priced competing growth of extra long staple
            cotton (adjusted to United States quality and location and for
            other factors affecting the competitiveness of such cotton), as
            determined by the Secretary, is below the prevailing United
            States price for a competing growth of extra long staple cotton;
            and
                (2) the lowest priced competing growth of extra long staple
            cotton (adjusted to United States quality and location and for
            other factors affecting the competitiveness of such cotton),

    [[Page 116 STAT. 165]]

            as determined by the Secretary, is less than 134 percent of the
            loan rate for extra long staple cotton.

        (c) Eligible Recipients.--The Secretary shall make payments
    available under this section to domestic users of extra long staple
    cotton produced in the United States and exporters of extra long staple
    cotton produced in the United States that enter into an agreement with
    the Commodity Credit Corporation to participate in the program under
    this section.
        (d) Payment Amount.--Payments under this section shall be based on
    the amount of the difference in the prices referred to in subsection
    (b)(1) during the fourth week of the consecutive 4-week period
    multiplied by the amount of documented purchases by domestic users and
    sales for export by exporters made in the week following such a
    consecutive 4-week period.
        (e) Form of Payment.--Payments under this section shall be made
    through the issuance of cash or marketing certificates, at the option of
    eligible recipients of the payments.

    SEC. 1209. <<NOTE: 7 USC 7939.>>  AVAILABILITY OF RECOURSE LOANS FOR
                HIGH MOISTURE FEED GRAINS AND SEED COTTON.

        (a) High Moisture Feed Grains.--
                (1) Recourse loans available.--For each of the 2002 through
            2007 crops of corn and grain sorghum, the Secretary shall make
            available recourse loans, as determined by the Secretary, to
            producers on a farm that--
                        (A) normally harvest all or a portion of their crop
                    of corn or grain sorghum in a high moisture state;
                        (B) present--
                              (i) certified scale tickets from an inspected,
                          certified commercial scale, including a licensed
                          warehouse, feedlot, feed mill, distillery, or
                          other similar entity approved by the Secretary,
                          pursuant to regulations issued by the Secretary;
                          or
                              (ii) field or other physical measurements of
                          the standing or stored crop in regions of the
                          United States, as determined by the Secretary,
                          that do not have certified commercial scales from
                          which certified scale tickets may be obtained
                          within reasonable proximity of harvest operation;
                        (C) certify that they were the owners of the feed
                    grain at the time of delivery to, and that the quantity
                    to be placed under loan under this subsection was in
                    fact harvested on the farm and delivered to, a feedlot,
                    feed mill, or commercial or on-farm high-moisture
                    storage facility, or to a facility maintained by the
                    users of corn and grain sorghum in a high moisture
                    state; and
                        (D) comply with deadlines established by the
                    Secretary for harvesting the corn or grain sorghum and
                    submit applications for loans under this subsection
                    within deadlines established by the Secretary.
                (2) Eligibility of acquired feed grains.--A loan under this
            subsection shall be made on a quantity of corn or grain sorghum
            of the same crop acquired by the producer equivalent to a
            quantity determined by multiplying--
                        (A) the acreage of the corn or grain sorghum in a
                    high moisture state harvested on the producer's farm; by

    [[Page 116 STAT. 166]]

                        (B) the lower of the farm program payment yield used
                    to make counter-cyclical payments under subtitle A or
                    the actual yield on a field, as determined by the
                    Secretary, that is similar to the field from which the
                    corn or grain sorghum was obtained.
                (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 1201.

        (b) Recourse Loans Available for Seed Cotton.--For each of the 2002
    through 2007 crops of upland cotton and extra long staple cotton, the
    Secretary shall make available recourse seed cotton loans, as determined
    by the Secretary, on any production.
        (c) Repayment Rates.--Repayment of a recourse loan made under this
    section shall be at the loan rate established for the commodity by the
    Secretary, plus interest (determined in accordance with section 163 of
    the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
    7283)).
        (d) Termination of Superseded Loan Authority.--Notwithstanding
    section 137 of the Federal Agriculture Improvement and Reform Act of
    1996 (7 U.S.C. 7237), recourse loans shall not be made for the 2002 crop
    of corn, grain sorghum, and seed cotton under such section.

                               Subtitle C--Peanuts

    SEC. 1301. <<NOTE: 7 USC 7951.>>  DEFINITIONS.

        In this subtitle:
                (1) Base acres for peanuts.--The term ``base acres for
            peanuts'' means the number of acres assigned to a farm by
            historic peanut producers pursuant to section 1302(b).
                (2) Counter-cyclical payment.--The term ``counter-cyclical
            payment'' means a payment made under section 1304.
                (3) Effective price.--The term ``effective price'' means the
            price calculated by the Secretary under section 1304 for peanuts
            to determine whether counter-cyclical payments are required to
            be made under that section for a crop year.
                (4) Direct payment.--The term ``direct payment'' means a
            payment made under section 1303.
                (5) Historic peanut producer.--The term ``historic peanut
            producer'' means a producer on a farm in the United States that
            produced or was prevented from planting peanuts during any or
            all of the 1998 through 2001 crop years.
                (6) Payment acres.--The term ``payment acres'' means--
                        (A) for the 2002 crop of peanuts, 85 percent of the
                    average acreage determined under section 1302(a)(2) for
                    an historic peanut producer; and
                        (B) for the 2003 through 2007 crops of peanuts, 85
                    percent of the base acres for peanuts assigned to a farm
                    under section 1302(b).
                (7) Payment yield.--The term ``payment yield'' means the
            yield assigned to a farm by historic peanut producers pursuant
            to section 1302(b).
                (8) Producer.--The term ``producer'' means an owner,
            operator, landlord, tenant, or sharecropper that shares in the

    [[Page 116 STAT. 167]]

            risk of producing a crop on a farm and is entitled to share in
            the crop available for marketing from the farm, or would have
            shared had the crop been produced. 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
            and shall ensure that program requirements do not adversely
            affect the ability of the grower to receive a payment under this
            subtitle.
                (9) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.
                (10) 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.
                (11) Target price.--The term ``target price'' means the
            price per ton of peanuts used to determine the payment rate for
            counter-cyclical payments.
                (12) United states.--The term ``United States'', when used
            in a geographical sense, means all of the States.

    SEC. 1302. <<NOTE: 7 USC 7952.>>  ESTABLISHMENT OF PAYMENT YIELD AND
                BASE ACRES FOR PEANUTS FOR A FARM.

        (a) Average Yield and Acreage Average for Historic Peanut
    Producers.--
                (1) Determination of average yield.--
                        (A) In general.--The Secretary shall determine, for
                    each historic peanut producer, the average yield for
                    peanuts on each farm on which the historic peanut
                    producer planted peanuts for harvest for the 1998
                    through 2001 crop years, excluding any crop year in
                    which the producer did not plant or was prevented from
                    planting peanuts.
                        (B) Assigned yields.--For the purposes of
                    determining the 4-year average yield for an historic
                    peanut producer under this paragraph, the historic
                    peanut producer may elect to substitute for a farm, for
                    not more than 3 of the 1998 through 2001 crop years in
                    which the producer planted peanuts on the farm, the
                    average yield for peanuts produced in the county in
                    which the farm is located for the 1990 through 1997 crop
                    years.
                (2) Determination of acreage average.--
                        (A) In general.--The Secretary shall determine, for
                    each historic peanut producer, the 4-year average of the
                    following:
                              (i) Acreage planted to peanuts on each farm on
                          which the historic peanut producer planted peanuts
                          for harvest for the 1998 through 2001 crop years.
                              (ii) Any acreage on each farm that the
                          historic peanut producer was prevented from
                          planting to peanuts during the 1998 through 2001
                          crop years because of drought, flood, or other
                          natural disaster, or other condition beyond the
                          control of the historic peanut producer, as
                          determined by the Secretary.
                        (B) Inclusion of all 4 years in average.--For the
                    purposes of determining the 4-year acreage average for
                    an historic peanut producer under this paragraph, the
                    Secretary shall not exclude any crop year in which the
                    producer did not plant peanuts.

    [[Page 116 STAT. 168]]

                        (C) Proportional shares.--If more than 1 historic
                    peanut producer shared in the risk of producing the crop
                    on a farm, the historic peanut producers shall receive
                    their proportional share of the number of acres planted
                    (or prevented from being planted) to peanuts for harvest
                    on the farm based on the sharing arrangement that was in
                    effect among the producers for the crop.
                (3) Time for determinations.--The Secretary shall make the
            determinations required by this subsection as soon as
            practicable after the date of enactment of this Act.
                (4) Special considerations.--In making the determinations
            required by this subsection, the Secretary shall take into
            account changes in the number, identity, or interest of
            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--
                        (A) when an historic peanut producer is no longer
                    living;
                        (B) when an entity composed of historic peanut
                    producers has been dissolved; or
                        (C) in other appropriate situations, as determined
                    by the Secretary.

        (b) Assignment of Average Yields and Average Acreage to Farms.--
                (1) Assignment by historic peanut producers.--The Secretary
            shall give each historic peanut producer an opportunity to
            assign the average peanut yield and average acreage determined
            under subsection (a) for each farm of the historic peanut
            producer to cropland on that farm or another farm in the same
            State or a contiguous State.
                (2) Limitation on acreage assignment.--Notwithstanding
            paragraph (1), the average acreage determined under subsection
            (a)(2) for a farm may not be assigned to a farm in a contiguous
            State unless--
                        (A) the historic peanut producer making the
                    assignment produced peanuts in that State during at
                    least 1 of the 1998 through 2001 crop years; or
                        (B) as of March 31, 2003, the historic peanut
                    producer is a producer on a farm in that State.
                (3) Notice of assignment opportunity.--The Secretary shall
            provide notice to historic peanut producers regarding their
            opportunity to assign average peanut yields and average acreages
            to farms under paragraph (1). The notice shall include the
            following:
                        (A) Notice that the opportunity to make the
                    assignments is being provided only once.
                        (B) A description of the limitation in paragraph (2)
                    on their ability to make the assignments.
                        (C) Information regarding the manner in which the
                    assignments must be made and the time periods and manner
                    in which notice of the assignments must be submitted to
                    the Secretary.
                (4) Assignment deadlines.--Not later than March 31, 2003, an
            historic peanut producer shall submit to the Secretary notice of
            the assignments made by the producer under this subsection. If
            an historic peanut producer fails to submit the

    [[Page 116 STAT. 169]]

            notice by that date, the notice shall be submitted in such other
            manner as the Secretary may prescribe.

        (c) Payment Yield.--The average of all of the yields assigned by
    historic peanut producers under subsection (b) to a farm shall be
    considered to be the payment yield for that farm for the purpose of
    making direct payments and counter-cyclical payments under this
    subtitle.
        (d) Base Acres for Peanuts.--Subject to subsection (e), the total
    number of acres assigned by historic peanut producers under subsection
    (b) to a farm shall be considered to be the farm's base acres for
    peanuts for the purpose of making direct payments and counter-cyclical
    payments under this subtitle.

        (e) Treatment of Conservation Reserve Contract Acreage.--
                (1) In general.--The Secretary shall provide for an
            adjustment, as appropriate, in the base acres for peanuts for a
            farm whenever either of the following circumstances occur:
                        (A) A conservation reserve contract entered into
                    under section 1231 of the Food Security Act of 1985 (16
                    U.S.C. 3831) with respect to the farm expires or is
                    voluntarily terminated.
                        (B) Cropland is released from coverage under a
                    conservation reserve contract by the Secretary.
                (2) Special payment rules.--For the crop year in which a
            base acres for peanuts adjustment under paragraph (1) is first
            made, the owner of the farm shall elect to receive either direct
            payments and counter-cyclical payments with respect to the
            acreage added to the farm under this subsection or a prorated
            payment under the conservation reserve contract, but not both.

        (f) Prevention of Excess Base Acres for Peanuts.--
                (1) Required reduction.--If the sum of the base acres for
            peanuts for a farm, together with the acreage described in
            paragraph (2), exceeds the actual cropland acreage of the farm,
            the Secretary shall reduce the base acres for peanuts for the
            farm or the base acres for 1 or more covered commodities under
            subtitle A for the farm so that the sum of the base acres for
            peanuts and acreage described in paragraph (2) does not exceed
            the actual cropland acreage of the farm.
                (2) Other acreage.--For purposes of paragraph (1), the
            Secretary shall include the following:
                        (A) Any base acres for the farm under subtitle A.
                        (B) Any acreage on the farm enrolled in the
                    conservation reserve program or wetlands reserve program
                    under chapter 1 of subtitle D of title XII of the Food
                    Security Act of 1985 (16 U.S.C. 3830 et seq.).
                        (C) Any other acreage on the farm enrolled in a
                    conservation program for which payments are made in
                    exchange for not producing an agricultural commodity on
                    the acreage.
                (3) Selection of acres.--The Secretary shall give the owner
            of the farm the opportunity to select the base acres for peanuts
            or the subtitle A base acres against which the reduction
            required by paragraph (1) will be made.
                (4) Exception for double-cropped acreage.--In applying
            paragraph (1), the Secretary shall make an exception in the case
            of double cropping, as determined by the Secretary.

    [[Page 116 STAT. 170]]

                (5) Coordinated application of requirements.--The Secretary
            shall take into account section 1101(g) when applying the
            requirements of this subsection.

        (g) Permanent Reduction in Base Acres for Peanuts.--The owner of a
    farm may reduce, at any time, the base acres for peanuts assigned to the
    farm. The reduction shall be permanent and made in the manner prescribed
    by the Secretary.

    SEC. 1303. <<NOTE: 7 USC 7953.>>  AVAILABILITY OF DIRECT PAYMENTS FOR
                PEANUTS.

        (a) Payment Required.--
                (1) 2002 crop year.--For the 2002 crop year, the Secretary
            shall make direct payments under this section to historic peanut
            producers.
                (2) Subsequent crop years.--For each of the 2003 through
            2007 crop years for peanuts, the Secretary shall make direct
            payments to the producers on a farm to which a payment yield and
            base acres for peanuts are assigned under section 1302.

        (b) Payment Rate.--The payment rate used to make direct payments
    with respect to peanuts for a crop year shall be equal to $36 per ton.
        (c) Payment Amount for 2002 Crop Year.--The amount of the direct
    payment to be paid to an historic peanut producer for the 2002 crop of
    peanuts shall be equal to the product of the following:
                (1) The payment rate specified in subsection (b).
                (2) The payment acres of the historic peanut producer.
                (3) The average peanut yield determined under section
            1302(a)(1) for the historic peanut producer.

        (d) Payment Amount for Subsequent Crop Years.--The amount of the
    direct payment to be paid to the producers on a farm for the 2003
    through 2007 crops of peanuts shall be equal to the product of the
    following:
                (1) The payment rate specified in subsection (b).
                (2) The payment acres on the farm.
                (3) The payment yield for the farm.

        (e) Time for Payment.--
                (1) In general.--The Secretary shall make direct payments--
                        (A) in the case of the 2002 crop year, as soon as
                    practicable after the date of enactment of this Act; and
                        (B) <<NOTE: Deadline.>> in the case of each of the
                    2003 through 2007 crop years, not later than September
                    30 of the calendar year in which the crop is harvested.
                (2) Advance payments.--At the option of the producers on a
            farm, up to 50 percent of the direct payment for any of the 2003
            through 2007 crop years shall be paid to the producers in
            advance. The producers shall select the month within which the
            advance payment for a crop year will be made. The month selected
            may be any month during the period beginning on December 1 of
            the calendar year before the calendar year in which the crop is
            harvested through the month within which the direct payment
            would otherwise be made. The producers may change the selected
            month for a subsequent advance payment by providing advance
            notice to the Secretary.
                (3) Repayment of advance payments.--If a producer on a farm
            that receives an advance direct payment for a crop

    [[Page 116 STAT. 171]]

            year ceases to be a producer on that farm, or the extent to
            which the producer shares in the risk of producing a crop
            changes, before the date the remainder of the direct payment is
            made, the producer shall be responsible for repaying the
            Secretary the applicable amount of the advance payment, as
            determined by the Secretary.

    SEC. 1304. <<NOTE: 7 USC 7954.>>  AVAILABILITY OF COUNTER-CYCLICAL
                PAYMENTS FOR PEANUTS.

        (a) Payment Required.--
                (1) In general.--During the 2002 through 2007 crop years for
            peanuts, the Secretary shall make counter-cyclical payments
            under this section with respect to peanuts if the Secretary
            determines that the effective price for peanuts is less than the
            target price for peanuts.
                (2) 2002 crop year.--If counter-cyclical payments are
            required for the 2002 crop year, the Secretary shall make the
            payments to historic peanut producers.
                (3) Subsequent crop years.--If counter-cyclical payments are
            required for any of the 2003 through 2007 crop years for
            peanuts, the Secretary shall make the payments to the producers
            on a farm to which a payment yield and base acres for peanuts
            are assigned under section 1302.

        (b) Effective Price.--For purposes of subsection (a), the effective
    price for peanuts is equal to the sum of the following:
                (1) The higher of the following:
                        (A) The national average market price for peanuts
                    received by producers during the 12-month marketing year
                    for peanuts, as determined by the Secretary.
                        (B) The national average loan rate for a marketing
                    assistance loan for peanuts in effect for the applicable
                    period under this subtitle.
                (2) The payment rate in effect under section 1303 for the
            purpose of making direct payments.

        (c) Target Price.--For purposes of subsection (a), the target price
    for peanuts shall be equal to $495 per ton.
        (d) Payment Rate.--The payment rate used to make counter-cyclical
    payments for a crop year shall be equal to the difference between--
                (1) the target price; and
                (2) the effective price determined under subsection (b).

        (e) Payment Amount for 2002 Crop Year.--If counter-cyclical payments
    are required to be paid for the 2002 crop of peanuts, the amount of the
    counter-cyclical payment to be paid to an historic peanut producer for
    that crop year shall be equal to the product of the following:
                (1) The payment rate specified in subsection (d).
                (2) The payment acres of the historic peanut producer.
                (3) The average peanut yield determined under section
            1302(a)(1) for the historic peanut producer.

        (f) Payment Amount for Subsequent Crop Years.--If counter-cyclical
    payments are required to be paid for any of the 2003 through 2007 crops
    of peanuts, the amount of the counter-cyclical payment to be paid to the
    producers on a farm for that crop year shall be equal to the product of
    the following:
                (1) The payment rate specified in subsection (d).
                (2) The payment acres on the farm.

    [[Page 116 STAT. 172]]

                (3) The payment yield for the farm.

        (g) Time for Payments.--
                (1) General rule.--If the Secretary determines under
            subsection (a) that counter-cyclical payments are required to be
            made under this section for a crop year, the Secretary shall
            make the counter-cyclical payments as soon as practicable after
            the end of the 12-month marketing year for the crop.
                (2) Availability of partial payments.--If, before the end of
            the 12-month marketing year, the Secretary estimates that
            counter-cyclical payments will be required under this section
            for a crop year, the Secretary shall give producers on a farm
            (or, in the case of the 2002 crop year, historic peanut
            producers) the option to receive partial payments of the
            counter-cyclical payment projected to be made for that crop.
                (3) Time for partial payments.--
                        (A) 2002 through 2006 crop years.--When the
                    Secretary makes partial payments available under
                    paragraph (2) for any of the 2002 through 2006 crop
                    years--
                              (i) the first partial payment for the crop
                          year shall be made not earlier than October 1,
                          and, to the maximum extent practicable, not later
                          than October 31, of the calendar year in which the
                          crop is harvested;
                              (ii) the second partial payment shall be made
                          not earlier than February 1 of the next calendar
                          year; and
                              (iii) the final partial payment shall be made
                          as soon as practicable after the end of the 12-
                          month marketing year for that crop.
                        (B) 2007 crop year.--When the Secretary makes
                    partial payments available for the 2007 crop year--
                              (i) the first partial payment shall be made
                          after completion of the first 6 months of the
                          marketing year for that crop; and
                              (ii) the final partial payment shall be made
                          as soon as practicable after the end of the 12-
                          month marketing year for that crop.
                (4) Amount of partial payments.--
                        (A) 2002 crop year.--
                              (i) First partial payment.--In the case of the
                          2002 crop year, the first partial payment under
                          paragraph (3) to an historic peanut producer may
                          not exceed 35 percent of the projected counter-
                          cyclical payment for the crop year, as determined
                          by the Secretary.
                              (ii) Second partial payment.--The second
                          partial payment may not exceed the difference
                          between--
                                        (I) 70 percent of the projected
                                    counter-cyclical payment (including any
                                    revision thereof) for the 2002 crop
                                    year; and
                                        (II) the amount of the payment made
                                    under clause (i).
                              (iii) Final payment.--The final payment shall
                          be equal to the difference between--
                                        (I) the actual counter-cyclical
                                    payment to be made to the historic
                                    peanut producer; and
                                        (II) the amount of the partial
                                    payments made to the historic peanut
                                    producer under clauses (i) and (ii).

    [[Page 116 STAT. 173]]

                        (B) 2003 through 2006 crop years.--
                              (i) First partial payment.--For each of the
                          2003 through 2006 crop years, the first partial
                          payment under paragraph (3) to the producers on a
                          farm may not exceed 35 percent of the projected
                          counter-cyclical payment for the crop year, as
                          determined by the Secretary.
                              (ii) Second partial payment.--The second
                          partial payment for a crop year may not exceed the
                          difference between--
                                        (I) 70 percent of the projected
                                    counter-cyclical payment (including any
                                    revision thereof) for the crop year; and
                                        (II) the amount of the payment made
                                    under clause (i).
                              (iii) Final payment.--The final payment for a
                          crop year shall be equal to the difference
                          between--
                                        (I) the actual counter-cyclical
                                    payment to be made to the producers for
                                    that crop year; and
                                        (II) the amount of the partial
                                    payments made to the producers under
                                    clauses (i) and (ii) for that crop year.
                        (C) 2007 crop year.--
                              (i) First partial payment.--For the 2007 crop
                          year, the first partial payment under paragraph
                          (3) to the producers on a farm may not exceed 40
                          percent of the projected counter-cyclical payment
                          for the crop year, as determined by the Secretary.
                              (ii) Final payment.--The final payment for the
                          2007 crop year shall be equal to the difference
                          between--
                                        (I) the actual counter-cyclical
                                    payment to be made to the producers for
                                    that crop year; and
                                        (II) the amount of the partial
                                    payment made to the producers under
                                    clause (i).
                (5) Repayment.--The producers on a farm (or, in the case of
            the 2002 crop year, historic peanut producers) that receive a
            partial payment under this subsection for a crop year shall
            repay to the Secretary the amount, if any, by which the total of
            the partial payments exceed the actual counter-cyclical payment
            to be made for that crop year.

    SEC. 1305. <<NOTE: 7 USC 7955.>>  PRODUCER AGREEMENT REQUIRED AS
                CONDITION ON PROVISION OF DIRECT PAYMENTS AND COUNTER-
                CYCLICAL PAYMENTS.

        (a) Compliance With Certain Requirements.--
                (1) Requirements.--Before the producers on a farm may
            receive direct payments or counter-cyclical payments under this
            subtitle with respect to the farm, the producers shall agree,
            during the crop year for which the payments are made and in
            exchange for the payments--
                        (A) to comply with applicable conservation
                    requirements under subtitle B of title XII of the Food
                    Security Act of 1985 (16 U.S.C. 3811 et seq.);
                        (B) to comply with applicable wetland protection
                    requirements under subtitle C of title XII of that Act
                    (16 U.S.C. 3821 et seq.);

    [[Page 116 STAT. 174]]

                        (C) to comply with the planting flexibility
                    requirements of section 1306;
                        (D) to use the land on the farm, in a quantity equal
                    to the attributable base acres for peanuts and any base
                    acres for the farm under subtitle A, for an agricultural
                    or conserving use, and not for a nonagricultural
                    commercial or industrial use, as determined by the
                    Secretary; and
                        (E) to effectively control noxious weeds and
                    otherwise maintain the land in accordance with sound
                    agricultural practices, as determined by the Secretary,
                    if the agricultural or conserving use involves the
                    noncultivation of any portion of the land referred to in
                    subparagraph (D).
                (2) Compliance.--The Secretary may issue such rules as the
            Secretary considers necessary to ensure producer compliance with
            the requirements of paragraph (1).
                (3) Modification.--At the request of the transferee or
            owner, the Secretary may modify the requirements of this
            subsection if the modifications are consistent with the
            objectives of this subsection, as determined by the Secretary.

        (b) Transfer or Change of Interest in Farm.--
                (1) Termination.--Except as provided in paragraph (2), a
            transfer of (or change in) the interest of the producers on a
            farm in the base acres for peanuts for which direct payments or
            counter-cyclical payments are made shall result in the
            termination of the payments with respect to those acres, unless
            the transferee or owner of the acreage agrees to assume all
            obligations under subsection (a). The termination shall take
            effect on the date determined by the Secretary.
                (2) Exception.--If a 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 rules issued by the
            Secretary.

        (c) Acreage Reports.--As a condition on the receipt of direct
    payments, counter-cyclical payments, marketing assistance loans, or loan
    deficiency payments under this subtitle, the Secretary shall require the
    producers on a farm to which a payment yield and base acres for peanuts
    are assigned under section 1302 to submit to the Secretary annual
    acreage reports with respect to all cropland on the farm.
        (d) Tenants and Sharecroppers.--In carrying out this subtitle, the
    Secretary shall provide adequate safeguards to protect the interests of
    tenants and sharecroppers.
        (e) Sharing of Payments.--The Secretary shall provide for the
    sharing of direct payments and counter-cyclical payments among the
    producers on a farm on a fair and equitable basis.

    SEC. 1306. <<NOTE: 7 USC 7956.>>  PLANTING FLEXIBILITY.

        (a) Permitted Crops.--Subject to subsection (b), any commodity or
    crop may be planted on the base acres for peanuts on a farm.
        (b) Limitations Regarding Certain Commodities.--
                (1) General limitation.--The planting of an agricultural
            commodity specified in paragraph (2) shall be prohibited on base
            acres for peanuts unless the commodity, if planted, is destroyed
            before harvest.

    [[Page 116 STAT. 175]]

                (2) Treatment of trees and other perennials.--The planting
            of an agricultural commodity specified in paragraph (3) that is
            produced on a tree or other perennial plant shall be prohibited
            on base acres for peanuts.
                (3) Covered agricultural commodities.--Paragraphs (1) and
            (2) apply to the following agricultural commodities:
                        (A) Fruits.
                        (B) Vegetables (other than lentils, mung beans, and
                    dry peas).
                        (C) Wild rice.

        (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) shall not
    limit the planting of an agricultural commodity specified in paragraph
    (3) of that subsection--
                (1) in any region in which there is a history of double-
            cropping of peanuts with agricultural commodities specified in
            subsection (b)(3), as determined by the Secretary, in which case
            the double-cropping shall be permitted;
                (2) on a farm that the Secretary determines has a history of
            planting agricultural commodities specified in subsection (b)(3)
            on the base acres for peanuts, except that direct payments and
            counter-cyclical payments shall be reduced by an acre for each
            acre planted to such an agricultural commodity; or
                (3) by the producers on a farm that the Secretary determines
            has an established planting history of a specific agricultural
            commodity specified in subsection (b)(3), except that--
                        (A) the quantity planted may not exceed the average
                    annual planting history of such agricultural commodity
                    by the producers on the farm in the 1991 through 1995 or
                    1998 through 2001 crop years (excluding any crop year in
                    which no plantings were made), as determined by the
                    Secretary; and
                        (B) direct payments and counter-cyclical payments
                    shall be reduced by an acre for each acre planted to
                    such agricultural commodity.

    SEC. 1307. <<NOTE: 7 USC 7957.>>  MARKETING ASSISTANCE LOANS AND LOAN
                DEFICIENCY PAYMENTS FOR PEANUTS.

        (a) Nonrecourse Loans Available.--
                (1) Availability.--For each of the 2002 through 2007 crops
            of peanuts, the Secretary shall make available to producers on a
            farm nonrecourse marketing assistance loans for peanuts 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 subsection (b).
                (2) Eligible production.--The producers on a farm shall be
            eligible for a marketing assistance loan under this subsection
            for any quantity of peanuts produced on the farm.
                (3) Treatment of certain commingled commodities.--In
            carrying out this subsection, the Secretary shall make loans to
            producers on a farm that would be eligible to obtain a marketing
            assistance loan, but for the fact the peanuts owned by the
            producers on the farm are commingled with other peanuts in
            facilities unlicensed for the storage of agricultural
            commodities by the Secretary or a State licensing authority, if
            the producers obtaining the loan agree to immediately redeem the
            loan collateral in accordance with section 166 of the Federal

    [[Page 116 STAT. 176]]

            Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7286).
                (4) Options for obtaining loan.--A marketing assistance loan
            under this subsection, and loan deficiency payments under
            subsection (e), may be obtained at the option of the producers
            on a farm through--
                        (A) a designated marketing association or marketing
                    cooperative of producers that is approved by the
                    Secretary; or
                        (B) the Farm Service Agency.
                (5) Storage of loan peanuts.--As a condition on the
            Secretary's approval of an individual or entity to provide
            storage for peanuts for which a marketing assistance loan is
            made under this section, the individual or entity shall agree--
                        (A) to provide such storage on a nondiscriminatory
                    basis; and
                        (B) to comply with such additional requirements as
                    the Secretary considers appropriate to accomplish the
                    purposes of this section and promote fairness in the
                    administration of the benefits of this section.
                (6) Payment of peanut storage costs.--Effective for the 2002
            through 2006 crops of peanuts, to ensure proper storage of
            peanuts for which a loan is made under this section, the
            Secretary shall use the funds of the Commodity Credit
            Corporation to pay storage, handling, and other associated
            costs. This authority terminates beginning with the 2007 crop of
            peanuts.
                (7) Marketing.--A marketing association or cooperative may
            market peanuts for which a loan is made under this section in
            any manner that conforms to consumer needs, including the
            separation of peanuts by type and quality.

        (b) Loan Rate.--The loan rate for a marketing assistance loan under
    for peanuts subsection (a) shall be equal to $355 per ton.
        (c) Term of Loan.--
                (1) In general.--A marketing assistance loan for peanuts
            under subsection (a) shall have a term of 9 months beginning on
            the first day of the first month after the month in which the
            loan is made.
                (2) Extensions prohibited.--The Secretary may not extend the
            term of a marketing assistance loan for peanuts under subsection
            (a).

        (d) Repayment Rate.--
                (1) In general.--The Secretary shall permit producers on a
            farm to repay a marketing assistance loan for peanuts under
            subsection (a) at a rate that is the lesser of--
                        (A) the loan rate established for peanuts under
                    subsection (b), plus interest (determined in accordance
                    with section 163 of the Federal Agriculture Improvement
                    and Reform Act of 1996 (7 U.S.C. 7283)); or
                        (B) a rate that the Secretary determines will--
                              (i) minimize potential loan forfeitures;
                              (ii) minimize the accumulation of stocks of
                          peanuts by the Federal Government;
                              (iii) minimize the cost incurred by the
                          Federal Government in storing peanuts; and
                              (iv) allow peanuts produced in the United
                          States to be marketed freely and competitively,
                          both domestically and internationally.

    [[Page 116 STAT. 177]]

                (2) Good faith exception to beneficial interest
            requirement.--For the 2002 crop year only, in the case of the
            producers on a farm that marketed or otherwise lost beneficial
            interest in the peanuts for which a marketing assistance loan
            was made under this section before repaying the loan, the
            Secretary shall permit the producers to repay the loan at the
            applicable repayment rate that was in effect for peanuts under
            this subsection on the date that the producers lost beneficial
            interest, as determined by the Secretary, if the Secretary
            determines the producers acted in good faith.

        (e) Loan Deficiency Payments.--
                (1) Availability.--The Secretary may make loan deficiency
            payments available to producers on a farm that, although
            eligible to obtain a marketing assistance loan for peanuts under
            subsection (a), agree to forgo obtaining the loan for the
            peanuts in return for loan deficiency payments under this
            subsection.
                (2) Computation.--A loan deficiency payment under this
            subsection shall be computed by multiplying--
                        (A) the payment rate determined under paragraph (3)
                    for peanuts; by
                        (B) the quantity of the peanuts produced by the
                    producers, excluding any quantity for which the
                    producers obtain a marketing assistance loan under
                    subsection (a).
                (3) Payment rate.--For purposes of this subsection, the
            payment rate shall be the amount by which--
                        (A) the loan rate established under subsection (b);
                    exceeds
                        (B) the rate at which a loan may be repaid under
                    subsection (d).
                (4) Effective date for payment rate determination.--
                        (A) In general.--The Secretary shall determine the
                    amount of the loan deficiency payment to be made under
                    this subsection to the producers on a farm with respect
                    to a quantity of peanuts using the payment rate in
                    effect under paragraph (3) as of the date the producers
                    request the payment.
                        (B) Special rule for 2002 crop year.--For the 2002
                    crop year only, the Secretary shall determine the amount
                    of the loan deficiency payment to be made under this
                    subsection to the producers on a farm with respect to a
                    quantity of peanuts using the payment rate in effect
                    under paragraph (3) as of the earlier of the following:
                              (i) The date on which the producers marketed
                          or otherwise lost beneficial interest in the crop,
                          as determined by the Secretary.
                              (ii) The date the producers request the
                          payment.

        (f) Compliance With Conservation and Wetlands Requirements.--As a
    condition of the receipt of a marketing assistance loan under subsection
    (a), the producer shall comply with applicable conservation requirements
    under subtitle B of title XII of the Food Security Act of 1985 (16
    U.S.C. 3811 et seq.) and applicable wetland protection requirements
    under subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.)
    during the term of the loan.
        (g) Reimbursable Agreements and Payment of Administrative
    Expenses.--The Secretary may implement any reimbursable agreements or
    provide for the payment of administrative expenses

    [[Page 116 STAT. 178]]

    under this subtitle only in a manner that is consistent with such
    activities in regard to other commodities.

    SEC. 1308. <<NOTE: 7 USC 7958.>>  MISCELLANEOUS PROVISIONS.

        (a) Mandatory Inspection.--All peanuts marketed in the United States
    shall be officially inspected and graded by Federal or Federal-State
    inspectors.
        (b) Termination of Peanut Administrative Committee.--The Peanut
    Administrative Committee established under Marketing Agreement No. 146
    issued pursuant to 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) Peanut Standards Board.--
                (1) Establishment and purpose.--The Secretary shall
            establish a Peanut Standards Board for the purpose of advising
            the Secretary regarding the establishment of quality and
            handling standards for domestically produced and imported
            peanuts.
                (2) Membership and appointment.--
                        (A) Total members.--The Board shall consist of 18
                    members, with representation equally divided between
                    peanut producers and peanut industry representatives.
                        (B) Appointment process for producers.--The
                    Secretary shall appoint--
                              (i) 3 producers from the Southeast (Alabama,
                          Georgia, and Florida) peanut producing region;
                              (ii) 3 producers from the Southwest (Texas,
                          Oklahoma, and New Mexico) peanut producing region;
                          and
                              (iii) 3 producers from the Virginia/Carolina
                          (Virginia and North Carolina) peanut producing
                          region.
                        (C) Appointment process for industry
                    representatives.--The Secretary shall appoint 3 peanut
                    industry representatives from each of the 3 peanut
                    producing regions in the United States.
                (3) Terms.--
                        (A) In general.--A member of the Board shall serve a
                    3-year term.
                        (B) Initial appointment.--In making the initial
                    appointments to the Board, the Secretary shall stagger
                    the terms of the members so that--
                              (i) 1 producer member and peanut industry
                          member from each peanut producing region serves a
                          1-year term;
                              (ii) 1 producer member and peanut industry
                          member from each peanut producing region serves a
                          2-year term; and
                              (iii) 1 producer member and peanut industry
                          member from each peanut producing region serves a
                          3-year term.
                (4) Consultation required.--The Secretary shall consult with
            the Board in advance whenever the Secretary establishes or
            changes, or considers the establishment of or a change to,
            quality and handling standards for peanuts.
                (5) Federal advisory committee act.--The Federal Advisory
            Committee Act (5 U.S.C. App.) shall not apply to the Board.

    [[Page 116 STAT. 179]]

        (d) Priority.--The Secretary shall make identifying and combating
    the presence of all quality concerns related to peanuts a priority in
    the development of quality and handling standards for peanuts and in the
    inspection of domestically produced and imported peanuts. The Secretary
    shall consult with appropriate Federal and State agencies to provide
    adequate safeguards against all quality concerns related to peanuts.
        (e) Consistent Standards.--Imported peanuts shall be subject to the
    same quality and handling standards as apply to domestically produced
    peanuts.
        (f) Authorization of Appropriations.--
                (1) In general.--In addition to other funds that are
            available to carry out this section, there is authorized to be
            appropriated such sums as are necessary to carry out this
            section.
                (2) Treatment of board expenses.--The expenses of the Peanut
            Standards Board shall not be counted toward any general
            limitation on the expenses of advisory committees, panels,
            commissions, and task forces of the Department of Agriculture,
            whether enacted before, on, or after the date of enactment of
            this Act, unless the limitation specifically refers to this
            paragraph and specifically includes the Peanut Standards Board
            within the general limitation.

        (g) Transition Rule.--
                (1) Temporary designation of peanut administrative committee
            members.--Notwithstanding the appointment process specified in
            subsection (c) for the Peanut Standards Board, during the
            transition period, the Secretary may designate persons serving
            as members of the Peanut Administrative Committee on the day
            before the date of enactment of this Act to serve as members of
            the Peanut Standards Board for the purpose of carrying out the
            duties of the Board described in this section.
                (2) Funds.--The Secretary may transfer any funds available
            to carry out the activities of the Peanut Administrative
            Committee to the Peanut Standards Board to carry out the duties
            of the Board described in this section.
                (3) Transition period.--In paragraph (1), the term
            ``transition period'' means the period beginning on the date of
            enactment of this Act and ending on the earlier of--
                        (A) the date the Secretary appoints the members of
                    the Peanut Standards Board pursuant to subsection (c);
                    or
                        (B) 180 days after the date of enactment of this
                    Act.

        (h) Effective Date.--This section shall take effect with the 2002
    crop of peanuts.

    SEC. 1309. <<NOTE: 7 USC 7959.>>  TERMINATION OF MARKETING QUOTA
                PROGRAMS FOR PEANUTS AND COMPENSATION TO PEANUT QUOTA
                HOLDERS FOR LOSS OF QUOTA ASSET VALUE.

        (a) Repeal of Marketing Quota.--
                (1) Repeal.--Part VI of subtitle B of title III of the
            Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-1359a),
            relating to peanuts, is repealed.
                (2) Treatment of 2001 crop.--Part VI of subtitle B of title
            III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-
            1359a), as in effect on the day before the date of enactment of
            this Act, shall continue to apply with respect to the

    [[Page 116 STAT. 180]]

            2001 crop of peanuts notwithstanding the amendment made by
            paragraph (1). Section 1308(g)(2) shall also apply to the 2001
            crop of peanuts.

        (b) Compensation Contract Required.--
                (1) In general.--The Secretary shall offer to enter into a
            contract with each person that the Secretary determines is an
            eligible peanut quota holder under subsection (f) for the
            purpose of providing compensation for the lost value of the
            quota on account of the repeal of the marketing quota program
            for peanuts under subsection (a).
                (2) Payment period.--The Secretary shall make payments under
            the contracts during fiscal years 2002 through 2006.

        (c) Time for Payment.--
                (1) Payment in installments.--The payments required under
            the contracts shall be provided in 5 equal installments not
            later than September 30 of each of fiscal years 2002 through
            2006.
                (2) Single payment.--At the request of an eligible peanut
            quota holder entitled to payments under a contract, the
            Secretary shall provide the entire payment amount determined
            under subsection (d) with respect to the eligible peanut quota
            holder for the 5 fiscal years in a single lump sum during the
            fiscal year specified by the eligible peanut quota holder.

        (d) Payment Amount.--The amount of the payment for a fiscal year to
    an eligible peanut quota holder under a contract shall be equal to the
    product obtained by multiplying--
                (1) $0.11 per pound; by
                (2) the number of pounds of quota with respect to which the
            person qualifies as a peanut quota holder under subsection (f).

        (e) Assignment of 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, shall apply to the payments made
    under the contracts. A person making an assignment of the payment, or
    the assignee, shall provide the Secretary with notice, in such manner as
    the Secretary may require, of any assignment made under this subsection.
        (f) Eligible Peanut Quota Holder.--
                (1) In general.--Except as otherwise provided in this
            subsection, the Secretary shall consider a person to be an
            eligible peanut quota holder for the purposes of this section if
            the person, as of the date of enactment of this Act, owned a
            farm that, also as of that date, was eligible for a permanent
            peanut quota under section 358-1(b) of the Agricultural
            Adjustment Act of 1938 (7 U.S.C. 1358-1(b)), irrespective of
            temporary leases, transfers of quotas for seed, or quotas for
            experimental purposes.
                (2) Effect of purchase contract.--If there was a written
            contract for the purchase of all or a portion of a farm
            described in paragraph (1) as of the date of enactment of this
            Act and the parties to the sale are unable to agree to the
            disposition of eligibility for payments under this section, the
            Secretary, taking into account any incomplete permanent transfer
            of quota that has otherwise been agreed to, shall provide for
            the equitable division of the payments among the parties by
            adjusting the determination of who is the eligible peanut quota
            holder with respect to particular pounds of the quota.

    [[Page 116 STAT. 181]]

                (3) Effect of agreement for permanent quota transfer.--If
            the Secretary determines that there was in existence, as of the
            date of enactment of this Act, an agreement for the permanent
            transfer of quota, but that the transfer was not completed by
            that date, the Secretary shall consider the peanut quota holder
            to be the party to the agreement who, as of that date, was the
            owner of the farm to which the quota was to be transferred.
                (4) Protected bases.--A person that owns a farm with a
            peanut poundage quota which is protected under a conservation
            reserve program contract entered into under section 1231 of the
            Food Security Act of 1985 (16 U.S.C. 3831) shall be considered
            to be an eligible quota holder with respect to the protected
            poundage.
                (5) Secretarial discretion.--Notwithstanding the preceding
            paragraphs, the Secretary may declare a person to be the
            eligible peanut quota holder with respect to certain pounds of
            quota or otherwise for purposes of this section if the Secretary
            considers the declaration is needed to insure a fair and
            equitable administration of the payments provided for in this
            section, so long as the Secretary does not, in exercising this
            authority, effectively increase the total quota in excess of the
            quota that was available to all producers for the 2001 crop year
            for other than seed or experimental use.
                (6) Limitation on quantity of quota held.--A person shall be
            considered an eligible peanut quota holder for purposes of this
            section only with respect to that number of permanent pounds
            that qualifies the person as a peanut quota holder under one of
            the preceding paragraphs. The determination of the peanut
            poundage amount for which the person qualifies shall be made
            based on the 2001 crop quota levels and shall take into account
            sales of the farm that occurred before the date of enactment of
            this Act and any permanent transfers of quota that took place
            before that date, consistent with the preceding paragraphs. The
            Secretary shall not take into account, or allow eligibility for,
            quotas for seed, granted as experimental quotas, or obtained by
            temporary lease or transfer.

        (g) Successions in Payment Eligibility and Attachment of Eligibility
    to Persons.--
                (1) Eligibility attaches to persons.--Once a person is
            eligible for payments under this section, as determined under
            subsection (f), the continued eligibility of the person for the
            payments does not run with a farm, but shall remain with the
            person for the term of this section irrespective of whether the
            person sells, or continues to have an interest in, the farm that
            had the quota that qualified the person as an eligible peanut
            quota holder under subsection (f) and irrespective of whether
            the person has a continuing interest in the production of
            peanuts.
                (2) Succession.--If a person eligible for payments under
            this section dies, in the case of an individual, or ceases to
            exist, in the case of other persons, the payment eligibility of
            the person shall pass to the person's personal or organizational
            successor, as determined by the Secretary.

        (h) Conforming Amendments.--

    [[Page 116 STAT. 182]]

                (1) Administrative provisions.--Section 361 of the
            Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is amended
            by striking ``peanuts,''.
                (2) Adjustment of quotas.--Section 371 of the Agricultural
            Adjustment Act of 1938 (7 U.S.C. 1371) is amended--
                        (A) in the first sentence of subsection (a), by
                    striking ``peanuts,''; and
                        (B) in the first sentence of subsection (b), by
                    striking ``peanuts''.
                (3) Reports and records.--Section 373 of the Agricultural
            Adjustment Act of 1938 (7 U.S.C. 1373) is amended--
                        (A) in the first sentence of subsection (a)--
                              (i) by striking ``peanuts,'' each place it
                          appears;
                              (ii) by inserting ``and'' after ``from
                          producers,''; and
                              (iii) by striking ``for producers, all'' and
                          all that follows through the period at the end of
                          the sentence and inserting ``for producers.''; and
                        (B) in subsection (b), by striking ``peanuts,''.
                (4) Eminent domain.--Section 378(c) of the Agricultural
            Adjustment Act of 1938 (7 U.S.C. 1378(c)) is amended in the
            first sentence--
                        (A) by striking ``cotton,'' and inserting ``cotton
                    and''; and
                        (B) by striking ``and peanuts,''.

    SEC. 1310. <<NOTE: 7 USC 7960.>>  REPEAL OF SUPERSEDED PRICE SUPPORT
                AUTHORITY AND EFFECT OF REPEAL.

        (a) Repeal of Price Support Authority.--
                (1) In general.--Section 155 of the Federal Agriculture
            Improvement and Reform Act of 1996 (7 U.S.C. 7271) is repealed.
                (2) Conforming amendments.--The Agricultural Act of 1949 (7
            U.S.C. 1441 et seq.) is amended--
                        (A) in section 101(b) (7 U.S.C. 1441(b)), by
                    striking ``and peanuts''; and
                        (B) in section 408(c) (7 U.S.C. 1428(c)), by
                    striking ``peanuts,''.
                (3) Technical amendment.--The chapter heading of chapter 2
            of subtitle D of the Federal Agriculture Improvement and Reform
            Act of 1996 (7 U.S.C. prec. 7271) is amended by striking
            ``PEANUTS AND''.

        (b) Disposal.--Notwithstanding any other provision of law or
    previous declaration made by the Secretary, the Secretary shall ensure
    that the disposal of all peanuts for which a loan for the 2001 crop of
    peanuts was made under section 155 of the Federal Agriculture
    Improvement and Reform Act of 1996 (7 U.S.C. 7271) before the date of
    enactment of this Act is carried out in a manner that prevents price
    disruptions in the domestic and international markets for peanuts.
        (c) Treatment of Crop Insurance Policies for 2002 Crop Year.--
                (1) Applicability.--This subsection shall apply for the 2002
            crop year only notwithstanding any other provision of law or
            crop insurance policy.
                (2) Price election.--The nonquota price election for
            segregation I, II, and III peanuts shall be 17.75 cents per
            pound

    [[Page 116 STAT. 183]]

            and shall be used for all aspects of the policy relating to the
            calculations of premium, liability, and indemnities.
                (3) Quality Adjustment.--For the purposes of quality
            adjustment only, the average support price per pound of peanuts
            shall be a price equal to 17.75 cents per pound. Quality under
            the crop insurance policy for peanuts shall be adjusted under
            procedures issued by the Federal Crop Insurance Corporation.

                                Subtitle D--Sugar

    SEC. 1401. SUGAR PROGRAM.

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

    ``SEC. 156. SUGAR PROGRAM.

        ``(a) Sugarcane.--The Secretary shall make loans available to
    processors of domestically grown sugarcane at a rate equal to 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) Loan Rate Adjustments.--
                ``(1) In general.--The Secretary 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) Extent of reduction.--The Secretary shall not reduce
            the loan rate under subsection (a) or (b) below a rate that
            provides an equal measure of support to that provided by other
            major sugar growing, producing, and exporting countries, based
            on an examination of both domestic and export subsidies subject
            to reduction in the Agreement on Agriculture.
                ``(3) Announcement of reduction.--The Secretary shall
            announce any loan rate reduction to be made under this
            subsection as far in advance as is practicable.
                ``(4) Definitions.--In this subsection:
                        ``(A) Agreement on agriculture.--The term
                    ``Agreement on Agriculture'' means the Agreement on
                    Agriculture referred to in section 101(d)(2) of the
                    Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)), or
                    any amendatory or successor agreement.
                        ``(B) Major sugar countries.--The term ``major sugar
                    growing, producing, and exporting countries'' means--
                              ``(i) the countries of the European Union; and
                              ``(ii) the 10 foreign countries not covered by
                          subparagraph (A) that the Secretary determines
                          produce the greatest quantity of sugar.

        ``(d) Term of Loans.--

    [[Page 116 STAT. 184]]

                ``(1) In general.--A loan under this section during any
            fiscal year shall be made available not earlier than the
            beginning of the fiscal year and shall mature at the earlier
            of--
                        ``(A) the end of the 9-month period beginning on the
                    first day of the first month after the month in which
                    the loan is made; or
                        ``(B) the end of the fiscal year in which the loan
                    is made.
                ``(2) Supplemental loans.--In the case of a loan made under
            this section in the last 3 months of a fiscal year, the
            processor may repledge the sugar as collateral for a second loan
            in the subsequent fiscal year, except that the second loan
            shall--
                        ``(A) be made at the loan rate in effect at the time
                    the second loan is made; and
                        ``(B) mature in 9 months less the quantity of time
                    that the first loan was in effect.

        ``(e) Loan Type; Processor Assurances.--
                ``(1) Nonrecourse loans.--The Secretary shall carry out this
            section through the use of nonrecourse loans.
                ``(2) Processor assurances.--
                        ``(A) In general.--The Secretary shall obtain from
                    each processor that receives a loan under this section
                    such assurances as the Secretary considers adequate to
                    ensure that the processor will provide payments to
                    producers that are proportional to the value of the loan
                    received by the processor for the sugar beets and
                    sugarcane delivered by producers to the processor.
                        ``(B) Minimum payments.--
                              ``(i) In general.--Subject to clause (ii), the
                          Secretary may establish appropriate minimum
                          payments for purposes of this paragraph.
                              ``(ii) Limitation.--In the case of sugar
                          beets, the minimum payment established under
                          clause (i) shall not exceed the rate of payment
                          provided for under the applicable contract between
                          a sugar beet producer and a sugar beet processor.
                              ``(iii) Effect of disaster.--The Secretary may
                          not bar a beet sugar processor from eligibility to
                          obtain a loan under this section because of the
                          failure of the processor to provide the
                          appropriate minimum payment established under this
                          subsection if the failure--
                                        ``(I) occurred during a crop year
                                    prior to the date of enactment of the
                                    Farm Security and Rural Investment Act
                                    of 2002; and
                                        ``(II) was related, at least in
                                    part, to the effects of a natural
                                    disaster, including damage from freeze.
                ``(3) Administration.--The Secretary may not impose or
            enforce any prenotification requirement, or similar
            administrative requirement not otherwise in effect on the date
            of enactment of the Farm Security and Rural Investment Act of
            2002, that has the effect of preventing a processor from
            electing to forfeit the loan collateral (of an acceptable grade
            and quality) on the maturity of the loan.

        ``(f) Loans for In-Process Sugar.--

    [[Page 116 STAT. 185]]

                ``(1) Definition of in-process sugars and syrups.--In this
            subsection, the term `in-process sugars and syrups' does not
            include raw sugar, liquid sugar, invert sugar, invert syrup, or
            other finished product that is otherwise eligible for a loan
            under subsection (a) or (b).
                ``(2) Availability.--The Secretary shall make nonrecourse
            loans available to processors of a crop of domestically grown
            sugarcane and sugar beets for in-process sugars and syrups
            derived from the crop.
                ``(3) Loan rate.--The loan rate shall be equal to 80 percent
            of the loan rate applicable to raw cane sugar or refined beet
            sugar, as determined by the Secretary on the basis of the source
            material for the in-process sugars and syrups.
                ``(4) Further processing on forfeiture.--
                        ``(A) In general.--As a condition of the forfeiture
                    of in-process sugars and syrups serving as collateral
                    for a loan under paragraph (2), the processor shall,
                    within such reasonable time period as the Secretary may
                    prescribe and at no cost to the Commodity Credit
                    Corporation, convert the in-process sugars and syrups
                    into raw cane sugar or refined beet sugar of acceptable
                    grade and quality for sugars eligible for loans under
                    subsection (a) or (b).
                        ``(B) Transfer to corporation.--Once the in-process
                    sugars and syrups are fully processed into raw cane
                    sugar or refined beet sugar, the processor shall
                    transfer the sugar to the Commodity Credit Corporation.
                        ``(C) Payment to processor.--On transfer of the
                    sugar, the Secretary shall make a payment to the
                    processor in an amount equal to the amount obtained by
                    multiplying--
                              ``(i) the difference between--
                                        ``(I) the loan rate for raw cane
                                    sugar or refined beet sugar, as
                                    appropriate; and
                                        ``(II) the loan rate the processor
                                    received under paragraph (3); by
                              ``(ii) the quantity of sugar transferred to
                          the Secretary.
                ``(5) Loan conversion.--If the processor does not forfeit
            the collateral as described in paragraph (4), but instead
            further processes the in-process sugars and syrups into raw cane
            sugar or refined beet sugar and repays the loan on the in-
            process sugars and syrups, the processor may obtain a loan under
            subsection (a) or (b) for the raw cane sugar or refined beet
            sugar, as appropriate.
                ``(6) Term of loan.--The term of a loan made under this
            subsection for a quantity of in-process sugars and syrups, when
            combined with the term of a loan made with respect to the raw
            cane sugar or refined beet sugar derived from the in-process
            sugars and syrups, may not exceed 9 months, consistent with
            subsection (d).

        ``(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.

    [[Page 116 STAT. 186]]

                ``(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
                    subparagraph (A) to report, in a manner prescribed by
                    the Secretary, the yields of, and acres planted to,
                    sugarcane or sugar beets, respectively, of the producer.
                ``(3) Duty of importers to report.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the Secretary shall require an
                    importer of sugars, syrups, or molasses to be used for
                    human consumption or to be used for the extraction of
                    sugar for human consumption to report, in the manner
                    prescribed by the Secretary, the quantities of the
                    products imported by the importer and the sugar content
                    or equivalent of the products.
                        ``(B) Tariff-rate quotas.--Subparagraph (A) shall
                    not apply to sugars, syrups, or molasses that are within
                    the quantities of tariff-rate quotas that are subject to
                    the lower rate of duties.
                ``(4) 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.
                ``(5) Monthly reports.--Taking into consideration the
            information received under this subsection, the Secretary shall
            publish on a monthly basis composite data on production,
            imports, distribution, and stock levels of sugar.

    [[Page 116 STAT. 187]]

        ``(i) Substitution of Refined Sugar.--For purposes of Additional
    U.S. Note 6 to chapter 17 of the Harmonized Tariff Schedule of the
    United States and the reexport programs and polyhydric alcohol program
    administered by the Secretary, all refined sugars (whether derived from
    sugar beets or sugarcane) produced by cane sugar refineries and beet
    sugar processors shall be fully substitutable for the export of sugar
    and sugar-containing products under those programs.
        ``(j) Effective Period.--This section shall be effective only for
    the 1996 through 2007 crops of sugar beets and sugarcane.''.
        (b) Effective <<NOTE: 7 USC 7272 note.>> Date of Assessment
    Termination.--Subsection (f) of section 156 of the Federal Agriculture
    Improvement and Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect
    immediately before the enactment of the Farm Security and Rural
    Investment Act of 2002, is deemed to have been repealed effective as of
    October 1, 2001.

        (c) Interest Rate.--Section 163 of the Federal Agriculture
    Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended--
                (1) by inserting ``(a) In General.--'' before
            ``Notwithstanding''; and
                (2) by adding at the end the following:

        ``(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. 1402. <<NOTE: 7 USC 7971.>> STORAGE FACILITY LOANS.

        (a) In General.--Notwithstanding any other provision of law and as
    soon as practicable after the date of enactment of this Act, 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 described in
    subsection (a) 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 described in subsection
    (a) 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.

    SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

        Part VII of subtitle B of title III of the Agricultural Adjustment
    Act of 1938 (7 U.S.C. 359aa et seq.) is amended to read as follows:

    [[Page 116 STAT. 188]]

               ``PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR

    ``SEC. 359a. <<NOTE: 7 USC 1359aa.>>  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.

    ``SEC. 359b. <<NOTE: 7 USC 1359bb.>> FLEXIBLE MARKETING ALLOTMENTS FOR
                SUGAR.

        ``(a) Sugar Estimates.--
                ``(1) In <<NOTE: Deadline.>> general.--Not later than August
            1 before the beginning of each of the 2002 through 2007 crop
            years, the Secretary shall estimate--
                        ``(A) the quantity of sugar that will be consumed in
                    the United States during the crop year;
                        ``(B) the quantity of sugar that would provide for
                    reasonable carryover stocks;
                        ``(C) the quantity of sugar that will be available
                    from carry-in stocks for consumption in the United
                    States during the crop year;
                        ``(D) the quantity of sugar that will be available
                    from the domestic processing of sugarcane and sugar
                    beets; and
                        ``(E) the quantity of sugars, syrups, and molasses
                    that will be imported for human consumption or to be
                    used for the extraction of sugar for human consumption
                    in the United States during the crop year, whether such
                    articles are under a tariff-rate quota or are in excess
                    or outside of a tariff-rate quota.
                ``(2) Exclusion.--The estimates under this subsection shall
            not apply to sugar imported for the production of polyhydric
            alcohol or to any sugar refined and reexported in refined form
            or in products containing sugar.
                ``(3) Reestimates.--The Secretary shall make reestimates of
            sugar consumption, stocks, production, and imports for a crop
            year as necessary, but no later than the beginning of each of
            the second through fourth quarters of the crop year.

        ``(b) Sugar Allotments.--
                ``(1) In general.--By the beginning of each crop year, the
            Secretary shall establish for that crop year appropriate
            allotments under section 359c for the marketing by processors of
            sugar processed from sugar 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. 7272).

    [[Page 116 STAT. 189]]

                ``(2) Products.--The Secretary may include sugar products,
            whose majority content is sucrose 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) Prohibitions.--
                ``(1) In general.--During any crop year or portion thereof
            for which marketing allotments have been established, no
            processor of sugar beets or sugarcane shall market a quantity of
            sugar 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) Civil penalty.--Any processor who knowingly violates
            paragraph (1) 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 involved in the
            violation.
                ``(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 the forfeiture of sugar
            under the loan program for sugar under section 156 of the
            Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
            7272) and, with respect to any integrated processor and refiner,
            the movement of raw cane sugar into the refining process).

    ``SEC. 359c. <<NOTE: 7 USC 1359cc.>>  ESTABLISHMENT OF FLEXIBLE
                MARKETING ALLOTMENTS.

        ``(a) In General.--The Secretary shall establish flexible marketing
    allotments for sugar for any crop 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 crop year (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 crop year) for the crop
            year, as determined under section 359b(a)--
                        ``(A) 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 avoid the forfeiture of sugar to the
            Commodity Credit Corporation.

        ``(c) Marketing Allotment for Sugar Derived from Sugar Beets and
    Sugar Derived from Sugarcane.--The overall allotment quantity for the
    crop year shall be allotted between--
                ``(1) sugar derived from sugar beets by establishing a
            marketing allotment for a crop year at a quantity equal to the
            product of multiplying the overall allotment quantity for the
            crop year by 54.35 percent; and
                ``(2) sugar derived from sugarcane by establishing a
            marketing allotment for a crop year at a quantity equal to the
            product of multiplying the overall allotment quantity for the
            crop year by 45.65 percent.

    [[Page 116 STAT. 190]]

        ``(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) State Cane Sugar Allotments.--
                ``(1) In general.--The allotment for sugar derived from
            sugarcane shall be further allotted, among 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 as provided in this subsection
            and section 359d(b)(1)(D).
                ``(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.

        ``(f) Filling Cane Sugar Allotments.--Except as provided in section
    359e, a State cane sugar allotment established under subsection (e) for
    a crop year may be filled only with sugar processed from sugarcane grown
    in the State covered by the allotment.
        ``(g) Adjustment of Marketing Allotments.--

    [[Page 116 STAT. 191]]

                ``(1) In general.--The Secretary shall, based on reestimates
            under section 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(c),
            shall be increased or decreased by the same percentage that the
            allotment is increased or decreased.
                ``(3) Carry-over of reductions.--Whenever a marketing
            allotment for a crop year is required to be reduced during the
            crop year under this subsection, if, at the time of the
            reduction, the quantity of sugar marketed exceeds the
            processor's reduced allocation, the allocation of an allotment
            next established for the processor shall be reduced by the
            quantity of the excess sugar marketed.

        ``(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) (excluding any
    imports attributable to reassignment under paragraph (1)(D) or (2)(C) of
    section 359e(b)), 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. <<NOTE: 7 USC 1359dd.>> ALLOCATION OF MARKETING ALLOTMENTS.

        ``(a) Allocation to Processors.--Whenever marketing allotments are
    established for a crop 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.
        ``(b) Hearing and Notice.--
                ``(1) Cane sugar.--
                        ``(A) In general.--The Secretary shall make
                    allocations for cane sugar after a hearing, if requested
                    by the affected sugarcane 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 under this paragraph. Each such
                    allocation shall be subject to adjustment under section
                    359c(g).
                        ``(B) Multiple processor states.--Except as provided
                    in subparagraphs (C) and (D), 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 1996 through 2000
                          crops;

    [[Page 116 STAT. 192]]

                              ``(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.
                        ``(C) Talisman processing facility.--In the case of
                    allotments under subparagraph (B) attributable to the
                    operations of the Talisman processing facility before
                    the date of enactment of this subparagraph, the
                    Secretary shall allocate the allotment among processors
                    in the State under subparagraph (A) in accordance with
                    the agreements of March 25 and 26, 1999, between the
                    affected processors and the Secretary of the Interior.
                        ``(D) 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.
                        ``(E) New entrants.--
                              ``(i) In general.--Notwithstanding
                          subparagraphs (B) and (D), the Secretary, on
                          application of any processor that begins
                          processing sugarcane on or after the date of
                          enactment of this subparagraph, 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) Limitations.--The allotment for a new
                          processor under this subparagraph shall not
                          exceed--
                                        ``(I) in the case of the first crop
                                    year of operation of a new processor,
                                    50,000 short tons (raw value); and
                                        ``(II) in the case of each
                                    subsequent crop year of operation of the
                                    new processor, a quantity established by
                                    the Secretary in accordance with this
                                    subparagraph and the criteria described
                                    in subparagraph (B) or (D), as
                                    applicable.
                              ``(iv) New entrant states.--
                                        ``(I) In general.--Notwithstanding
                                    subparagraphs (A) and (C) of section
                                    359c(e)(3), to

    [[Page 116 STAT. 193]]

                                    accommodate an allocation under clause
                                    (i) to a new processor located in a new
                                    entrant mainland State, the Secretary
                                    shall provide the new entrant mainland
                                    State with an allotment.
                                        ``(II) Effect on other allotments.--
                                    The allotment to any new entrant
                                    mainland State shall be subtracted, on a
                                    pro rata basis, from the allotments
                                    otherwise allotted to each mainland
                                    State under section 359c(e)(3).
                              ``(v) Adverse effects.--Before providing an
                          initial processor allocation or State allotment to
                          a new entrant processor or a new entrant State
                          under this subparagraph, the Secretary shall take
                          into consideration any adverse effects that the
                          provision of the allocation or allotment may have
                          on existing cane processors and producers in
                          mainland States.
                              ``(vi) Ability to market.--Consistent with
                          section 359c and this section, any processor
                          allocation or State allotment made to a new
                          entrant processor or to a new entrant State under
                          this subparagraph shall be provided only after the
                          applicant processor, or the applicable processors
                          in the State, have demonstrated the ability to
                          process, produce, and market (including the
                          transfer or delivery of the raw cane sugar to a
                          refinery for further processing or marketing) raw
                          cane sugar for the crop year for which the
                          allotment is applicable.
                              ``(vii) Prohibition.--Not more than 1
                          processor allocation provided under this
                          subparagraph may be applicable to any individual
                          sugar processing facility.
                        ``(F) 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 is
                    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, successor in interest, or any
                    remaining processor of an affiliated entity, as
                    applicable, of the processor.
                ``(2) Beet sugar.--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph and sections 359c(g), 359e(b), and
                    359f(b), the Secretary shall make allocations for beet
                    sugar among beet sugar processors for each crop year
                    that allotments are in effect on the basis of the
                    adjusted weighted average quantity of beet sugar
                    produced by the processors for each of the 1998 through
                    2000 crop years, as determined under this paragraph.
                        ``(B) Quantity.--The quantity of an allocation made
                    for a beet sugar processor for a crop year under
                    subparagraph (A) shall bear the same ratio to the
                    quantity of allocations made for all beet sugar
                    processors for the crop year as the adjusted weighted
                    average quantity of beet sugar produced by the processor
                    (as determined under subparagraphs (C) and (D)) bears to
                    the total of the adjusted weighted average quantities of
                    beet sugar produced by all processors (as so
                    determined).

    [[Page 116 STAT. 194]]

                        ``(C) Weighted average quantity.--Subject to
                    subparagraph (D), the weighted quantity of beet sugar
                    produced by a beet sugar processor during each of the
                    1998 through 2000 crop years shall be (as determined by
                    the Secretary)--
                              ``(i) in the case of the 1998 crop year, 25
                          percent of the quantity of beet sugar produced by
                          the processor during the crop year;
                              ``(ii) in the case of the 1999 crop year, 35
                          percent of the quantity of beet sugar produced by
                          the processor during the crop year; and
                              ``(iii) in the case of the 2000 crop year, 40
                          percent of the quantity of beet sugar produced by
                          the processor (including any quantity of sugar
                          received from the Commodity Credit Corporation)
                          during the crop year.
                        ``(D) Adjustments.--
                              ``(i) In general.--The Secretary shall adjust
                          the weighted average quantity of beet sugar
                          produced by a beet sugar processor during the 1998
                          through 2000 crop years under subparagraph (C) if
                          the Secretary determines that the processor--
                                        ``(I) during the 1996 through 2000
                                    crop years, opened a sugar beet
                                    processing factory;
                                        ``(II) during the 1998 through 2000
                                    crop years, closed a sugar beet
                                    processing factory;
                                        ``(III) during the 1998 through 2000
                                    crop years, constructed a molasses
                                    desugarization facility; or
                                        ``(IV) during the 1998 through 2000
                                    crop years, suffered substantial quality
                                    losses on sugar beets stored during any
                                    such crop year.
                              ``(ii) Quantity.--The quantity of beet sugar
                          produced by a beet sugar processor under
                          subparagraph (C) shall be--
                                        ``(I) in the case of a processor
                                    that opened a sugar beet processing
                                    factory, increased by 1.25 percent of
                                    the total of the adjusted weighted
                                    average quantities of beet sugar
                                    produced by all processors during the
                                    1998 through 2000 crop years (without
                                    consideration of any adjustment under
                                    this subparagraph) for each sugar beet
                                    processing factory that is opened by the
                                    processor;
                                        ``(II) in the case of a processor
                                    that closed a sugar beet processing
                                    factory, decreased by 1.25 percent of
                                    the total of the adjusted weighted
                                    average quantities of beet sugar
                                    produced by all processors during the
                                    1998 through 2000 crop years (without
                                    consideration of any adjustment under
                                    this subparagraph) for each sugar beet
                                    processing factory that is closed by the
                                    processor;
                                        ``(III) in the case of a processor
                                    that constructed a molasses
                                    desugarization facility, increased by
                                    0.25 percent of the total of the
                                    adjusted weighted average quantities of
                                    beet sugar produced by all processors
                                    during the 1998 through 2000 crop years
                                    (without consideration of any adjustment
                                    under this subparagraph) for each

    [[Page 116 STAT. 195]]

                                    molasses desugarization facility that is
                                    constructed by the processor; and
                                        ``(IV) in the case of a processor
                                    that suffered substantial quality losses
                                    on stored sugar beets, increased by 1.25
                                    percent of the total of the adjusted
                                    weighted average quantities of beet
                                    sugar produced by all processors during
                                    the 1998 through 2000 crop years
                                    (without consideration of any adjustment
                                    under this subparagraph).
                        ``(E) Permanent termination of operations of a
                    processor.--If a processor of beet sugar has been
                    dissolved, liquidated in a bankruptcy proceeding, or
                    otherwise has permanently terminated operations (other
                    than in conjunction with a sale or other disposition of
                    the processor or the assets of the processor), the
                    Secretary shall--
                              ``(i) eliminate the allocation of the
                          processor provided under this section; and
                              ``(ii) distribute the allocation to other beet
                          sugar processors on a pro rata basis.
                        ``(F) Sale of all assets of a processor to another
                    processor.--If a processor of beet sugar (or all of the
                    assets of the processor) is sold to another processor of
                    beet sugar, the Secretary shall transfer the allocation
                    of the seller to the buyer unless the allocation has
                    been distributed to other sugar beet processors under
                    subparagraph (E).
                        ``(G) Sale of factories of a processor to another
                    processor.--
                              ``(i) In general.--Subject to subparagraphs
                          (E) and (F), if 1 or more factories of a processor
                          of beet sugar (but not all of the assets of the
                          processor) are sold to another processor of beet
                          sugar during a crop year, the Secretary shall
                          assign a pro rata portion of the allocation of the
                          seller to the allocation of the buyer to reflect
                          the historical contribution of the production of
                          the sold factory or factories to the total
                          allocation of the seller.
                              ``(ii) Application of allocation.--The
                          assignment of the allocation under clause (i)
                          shall apply--
                                        ``(I) during the remainder of the
                                    crop year during which the sale
                                    described in clause (i) occurs (referred
                                    to in this subparagraph as the `initial
                                    crop year'); and
                                        ``(II) each subsequent crop year
                                    (referred in this subparagraph as a
                                    `subsequent crop year'), subject to
                                    clause (iii).
                              ``(iii) Subsequent crop years.--
                                        ``(I) In general.--The assignment of
                                    the allocation under clause (i) shall
                                    apply during each subsequent crop year
                                    unless the acquired factory or factories
                                    continue in operation for less than the
                                    initial crop year and the first
                                    subsequent crop year.
                                        ``(II) Reassignment.--If the
                                    acquired factory or factories do not
                                    continue in operation for the complete
                                    initial crop year and the first
                                    subsequent

    [[Page 116 STAT. 196]]

                                    crop year, the Secretary shall reassign
                                    the temporary allocation to other
                                    processors of beet sugar on a pro rata
                                    basis.
                              ``(iv) Use of other factories to fill
                          allocation.--If the transferred allocation to the
                          buyer for the purchased factory or factories
                          cannot be filled by the production of the
                          purchased factory or factories for the initial
                          crop year or a subsequent crop year, the remainder
                          of the transferred allocation may be filled by
                          beet sugar produced by the buyer from other
                          factories of the buyer.
                        ``(H) New entrants starting production or reopening
                    factories.--
                              ``(i) In general.--Except as provided by
                          clause (ii), if an individual or entity that does
                          not have an allocation of beet sugar under this
                          part (referred to in this paragraph as a `new
                          entrant') starts processing sugar beets after the
                          date of enactment of this subparagraph, or
                          acquires and reopens a factory that produced beet
                          sugar during previous crop years that (at the time
                          of acquisition) has no allocation associated with
                          the factory under this part, the Secretary shall--
                                        ``(I) assign an allocation for beet
                                    sugar to the new entrant that provides a
                                    fair and equitable distribution of the
                                    allocations for beet sugar; and
                                        ``(II) reduce the allocations for
                                    beet sugar of all other processors on a
                                    pro rata basis to reflect the new
                                    allocation.
                              ``(ii) Exception.--If a new entrant acquires
                          and reopens a factory that previously produced
                          beet sugar from sugar beets and from sugar beet
                          molasses but the factory last processed sugar
                          beets during the 1997 crop year and the new
                          entrant starts to process sugar beets at such
                          factory after the date of enactment of this
                          clause, the Secretary shall--
                                        ``(I) assign an allocation for beet
                                    sugar to the new entrant that is not
                                    less than the greater of 1.67 percent of
                                    the total of the adjusted weighted
                                    average quantities of beet sugar
                                    produced by all processors during the
                                    1998 through 2000 crop years as
                                    determined under subsection (b)(2)(C),
                                    or 1,500,000 hundredweights; and
                                        ``(II) reduce the allocations for
                                    beet sugar of all other processors on a
                                    pro rata basis to reflect the new
                                    allocation.
                        ``(I) New entrants acquiring ongoing factories with
                    production history.--If a new entrant acquires a factory
                    that has production history during the period of the
                    1998 through 2000 crop years and that is producing beet
                    sugar at the time the allocations are made from a
                    processor that has an allocation of beet sugar, the
                    Secretary shall transfer a portion of the allocation of
                    the seller to the new entrant to reflect the historical
                    contribution of the production of the sold factory to
                    the total allocation of the seller.

    [[Page 116 STAT. 197]]

    ``SEC. 359e. <<NOTE: 7 USC 1359ee.>>  REASSIGNMENT OF DEFICITS.

        ``(a) Estimates of Deficits.--At any time allotments are in effect
    under this part, the Secretary, from time to time, shall determine
    whether (in view of then-current inventories of sugar, the estimated
    production of sugar and expected marketings, and other pertinent
    factors) any processor of sugarcane will be unable to market the sugar
    covered by the portion of the State cane sugar allotment allocated to
    the processor and whether any processor of sugar beets will be unable to
    market sugar covered by the portion of the beet sugar allotment
    allocated to the processor.
        ``(b) Reassignment of Deficits.--
                ``(1) Cane sugar.--If the Secretary determines that any
            sugarcane processor who has been allocated a share of a State
            cane sugar allotment will be unable to market the processor's
            allocation of the State's allotment for the crop year--
                        ``(A) the Secretary first shall reassign the
                    estimated quantity of the deficit to the allocations for
                    other processors within that State, 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;
                        ``(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;
                        ``(C) if after the reassignments the deficit cannot
                    be completely eliminated, the Secretary shall reassign
                    the estimated quantity of the deficit to the Commodity
                    Credit Corporation and shall sell such quantity of sugar
                    from inventories of the Corporation unless the Secretary
                    determines that such sales would have a significant
                    effect on the price of sugar; and
                        ``(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;
                        ``(B) if after the reassignments the deficit cannot
                    be completely eliminated, the Secretary shall reassign
                    the estimated quantity of the deficit to the Commodity
                    Credit Corporation and shall sell such quantity of sugar
                    from inventories of the Corporation unless the Secretary
                    determines that such sales would have a significant
                    effect on the price of sugar; and

    [[Page 116 STAT. 198]]

                        ``(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 crop year shall be increased to reflect
            the reassignment.

    ``SEC. 359f. <<NOTE: 7 USC 1359ff.>>  PROVISIONS APPLICABLE TO
                PRODUCERS.

        ``(a) Processor Assurances.--
                ``(1) In general.--If allotments for a crop 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.
                ``(2) Arbitration.--
                        ``(A) In general.--Any dispute between a processor
                    and a producer, or group of producers, with respect to
                    the sharing of the allocation to the processor shall be
                    resolved through arbitration by the Secretary on the
                    request of either party.
                        ``(B) Period.--The <<NOTE: Deadlines.>> arbitration
                    shall, to the maximum extent practicable, be--
                              ``(i) commenced not more than 45 days after
                          the request; and
                              ``(ii) 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 <<NOTE: Deadline.>> determinations of the
            Secretary on the issues raised by the petition shall be made
            within 60 days after the filing of the petition.

        ``(c) Proportionate Shares of Certain Allotments.--
                ``(1) In general.--
                        ``(A) States affected.--In any case in which a State
                    allotment is established under section 359c(f) and there
                    are in excess of 250 sugarcane producers in the State
                    (other than Puerto Rico), the Secretary shall make a
                    determination under subparagraph (B).
                        ``(B) Determination.--The Secretary shall determine,
                    for each State allotment described in subparagraph (A),
                    whether the production of sugarcane, in the absence of

    [[Page 116 STAT. 199]]

                    proportionate shares, will be greater than the quantity
                    needed to enable processors to fill the allotment and
                    provide a normal carryover inventory of sugar.
                ``(2) Establishment of proportionate shares.--If the
            Secretary determines under paragraph (1) that the quantity of
            sugarcane produced by producers in the area covered by a State
            allotment for a crop year will be in excess of the quantity
            needed to enable processors to fill the allotment for the crop
            year and provide a normal carryover inventory of sugar, the
            Secretary shall establish a proportionate share for each
            sugarcane-producing farm that limits the acreage of sugarcane
            that may be harvested on the farm for sugar or seed during the
            crop year the allotment is in effect as provided in this
            subsection. Each such proportionate share shall be subject to
            adjustment under paragraph (7) and section 359c(g).
                ``(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 2 highest years from among 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.
                        ``(B) The Secretary shall adjust the per-acre yield
                    goal by the average recovery rate of sugar produced from
                    sugarcane by processors in the State.
                        ``(C) The Secretary shall convert the State
                    allotment for the crop year involved into a State
                    acreage allotment for the crop by dividing the State
                    allotment by the per-acre yield goal for the State, as
                    established under subparagraph (A) and as further
                    adjusted under subparagraph (B).
                        ``(D) The Secretary shall establish a uniform
                    reduction percentage for the crop by dividing the State
                    acreage allotment, as determined for the crop under
                    subparagraph (C), by the sum of all adjusted acreage
                    bases in the State, as determined by the Secretary.
                        ``(E) The uniform reduction percentage for the crop,
                    as determined under subparagraph (D), shall be applied
                    to the acreage base for each sugarcane-producing farm in
                    the State to determine the farm's proportionate share of
                    sugarcane acreage that may be harvested for sugar or
                    seed.
                ``(4) Acreage base.--For purposes of this subsection, the
            acreage base for each sugarcane-producing farm shall be
            determined by the Secretary, as follows:
                        ``(A) The acreage base for any farm shall be the
                    number of acres that is equal to the average of the
                    acreage planted and considered planted for harvest for
                    sugar or seed on the farm in the 2 highest of the 1999,
                    2000, and 2001 crop years.
                        ``(B) Acreage planted to sugarcane that producers on
                    a farm were unable to harvest to sugarcane for sugar or
                    seed because of drought, flood, other natural disaster,
                    or other condition beyond the control of the producers
                    may

    [[Page 116 STAT. 200]]

                    be considered as harvested for the production of sugar
                    or seed for purposes of this paragraph.
                ``(5) Violation.--
                        ``(A) In general.--Whenever proportionate shares are
                    in effect in a State for a crop of sugarcane, producers
                    on a farm shall not knowingly harvest, or allow to be
                    harvested, for sugar or seed an acreage of sugarcane in
                    excess of the farm's proportionate share for the crop
                    year, or otherwise violate proportionate share
                    regulations issued by the Secretary under section
                    359h(a).
                        ``(B) Determination of violation.--No producer shall
                    be considered to have violated subparagraph (A) unless
                    the processor of the sugarcane harvested by such
                    producer from acreage in excess of the proportionate
                    share of the farm markets an amount of sugar that
                    exceeds the allocation of such processor for a crop
                    year.
                        ``(C) Civil penalty.--Any producer on a farm who
                    violates subparagraph (A) by knowingly harvesting, or
                    allowing to be harvested, an acreage of sugarcane in
                    excess of the farm's proportionate share shall be liable
                    to the Commodity Credit Corporation for a civil penalty
                    equal to one and one-half times the United States market
                    value of the quantity of sugar that is marketed by the
                    processor of such sugarcane in excess of the allocation
                    of such processor for the crop year. The Secretary shall
                    prorate penalties imposed under this subparagraph in a
                    fair and equitable manner among all the producers of
                    sugarcane harvested from excess acreage that is acquired
                    by such processor.
                ``(6) Waiver.--Notwithstanding the preceding subparagraph,
            the Secretary may authorize the county and State committees
            established under section 8(b) of the Soil Conservation and
            Domestic Allotment Act (16 U.S.C. 590h(b)) to waive or modify
            deadlines and other proportionate share requirements in cases in
            which lateness or failure to meet the other requirements does
            not affect adversely the operation of proportionate shares.
                ``(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.

    [[Page 116 STAT. 201]]

                        ``(B) Increased allocation for processing company.--
                    The Secretary may increase the allocation to the
                    processing company to which the growers elect 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 shall be unaffected.
                        ``(D) Timing.--The <<NOTE: Deadline.>>
                    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. <<NOTE: 7 USC 1359gg.>>  SPECIAL RULES.

        ``(a) Transfer of Acreage Base History.--For the purpose of
    establishing proportionate shares for sugarcane farms under section
    359f(c), the Secretary, on application of any producer, with the written
    consent of all owners of a farm, may transfer the acreage base history
    of the farm to any other parcels of land of the applicant.
        ``(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(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 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 proportionate share established or adjusted
    for a farm under section 359f(c), on the same basis as the initial
    allocation or proportionate share was required to be established.
        ``(d) Transfers of Mill Allocations.--
                ``(1) Transfer authorized.--A producer in a proportionate
            share State, upon written consent from all crop-share owners (or
            the representative of the crop-share owners) of a farm, and from
            the processing company holding the applicable allocation for
            such shares, may deliver sugarcane to another processing company
            if the additional delivery, when combined with such other
            processing company's existing deliveries, does not exceed the
            processing capacity of the company.
                ``(2) Allocation adjustment.--Notwithstanding section 359d,
            the Secretary shall adjust the allocations of each of such
            processing companies affected by a transfer under paragraph (1)
            to reflect the change in deliveries, based on the product of--

    [[Page 116 STAT. 202]]

                        ``(A) the number of acres of proportionate shares
                    being transferred; and
                        ``(B) the State's per acre yield goal established
                    under section 359f(c)(3).

    ``SEC. 359h. <<NOTE: 7 USC 1359hh.>>  REGULATIONS; VIOLATIONS;
                PUBLICATION OF SECRETARY'S DETERMINATIONS; JURISDICTION OF
                THE COURTS; UNITED STATES ATTORNEYS.

        ``(a) Regulations.--The Secretary or the Commodity Credit
    Corporation, as appropriate, shall issue such regulations as may be
    necessary to carry out the authority vested in the Secretary in
    administering this part.
        ``(b) Violation.--Any person knowingly violating any regulation of
    the Secretary issued under subsection (a) shall be subject to a civil
    penalty of not more than $5,000 for each violation.
        ``(c) Publication in Federal Register.--Each determination issued by
    the Secretary to establish, adjust, or suspend allotments under this
    part shall be promptly published in the Federal Register and shall be
    accompanied by a statement of the reasons for the determination.
        ``(d) Jurisdiction of Courts; United States Attorneys.--
                ``(1) Jurisdiction of courts.--The several district courts
            of the United States are vested with jurisdiction specifically
            to enforce, and to prevent and restrain any person from
            violating, this part or any regulation issued thereunder.
                ``(2) United states attorneys.--Whenever the Secretary shall
            so request, it shall be the duty of the several United States
            attorneys, in their respective districts, to institute
            proceedings to enforce the remedies and to collect the penalties
            provided for in this part. The Secretary may elect not to refer
            to a United States attorney any violation of this part or
            regulation when the Secretary determines that the administration
            and enforcement of this part would be adequately served by
            written notice or warning to any person committing the
            violation.

        ``(e) Nonexclusivity of Remedies.--The remedies and penalties
    provided for in this part shall be in addition to, and not exclusive of,
    any remedies or penalties existing at law or in equity.

    ``SEC. 359i. <<NOTE: 7 USC 1359ii.>>  APPEALS.

        ``(a) In General.--An appeal may be taken to the Secretary from any
    decision under section 359d establishing allocations of marketing
    allotments, or under section 359f, by any person adversely affected by
    reason of any such decision.

        ``(b) Procedure.--
                ``(1) Notice of appeal.--Any such appeal shall be taken by
            filing with the Secretary, within 20 days after the decision
            complained of is effective, notice in writing of the appeal and
            a statement of the reasons therefor. Unless a later date is
            specified by the Secretary as part of the Secretary's decision,
            the decision complained of shall be considered to be effective
            as of the date on which announcement of the decision is made.
            The Secretary shall deliver a copy of any notice of appeal to
            each person shown by the records of the Secretary to be
            adversely affected by reason of the decision appealed, and shall
            at all times thereafter permit any such person to inspect and
            make copies of appellant's reasons for the appeal and shall on
            application permit the person to intervene in the appeal.

    [[Page 116 STAT. 203]]

                ``(2) Hearing.--The Secretary shall provide each appellant
            an opportunity for a hearing before an administrative law judge
            in accordance with sections 554 and 556 of title 5, United
            States Code. The expenses for conducting the hearing shall be
            reimbursed by the Commodity Credit Corporation.

        ``(c) Special Appeal Process Regarding Beet Sugar Allocations.--
                ``(1) Appeal authorized.--Beginning after the 2006 crop
            year, a processor that has an allocation of the beet sugar
            allotment under this part (referred to in this subsection as a
            `petitioner') may file a notice of appeal with the Secretary
            regarding the petitioner's beet sugar allocation. Except as
            provided in paragraph (2), the Secretary shall consider the
            appeal if the notice alleges that any processor that has a beet
            sugar allocation has failed to fill at least 82.5 percent of its
            allocation of the beet sugar allotment with sugar produced by it
            or received from the Commodity Credit Corporation in 2 out of
            the 3 crop years preceding the crop year in which the appeal is
            filed. A processor that is alleged to have failed to fill at
            least 82.5 percent of its allocation shall be allowed to fully
            participate in the appeal.
                ``(2) Exceptions.--An appeal under paragraph (1) shall not
            be based on the failure of a processor to fill at least 82.5
            percent of its allocation because of drought, flood, hail, or
            other weather disaster, as determined by the Secretary. The
            determination by the Secretary shall not require a formal
            disaster declaration.
                ``(3) Response to appeal.--Upon the petitioner making an
            appeal to the Secretary, and upon a review by the Secretary of
            how processors have filled their allocations, the Secretary
            may--
                        ``(A) assign an increased allocation for beet sugar
                    to the petitioner that provides a fair and equitable
                    distribution of the allocations for beet sugar, taking
                    into account--
                              ``(i) production history during the period
                          beginning on April 4, 1996, and through the date
                          of enactment of the Farm Security and Rural
                          Investment Act of 2002;
                              ``(ii) capital investment during that period;
                              ``(iii) increases in United States sugar
                          consumption; and
                              ``(iv) the ability or inability of processors
                          to fill the allocations they have received under
                          this part; and
                        ``(B) reduce, correspondingly, the allocation for
                    beet sugar of each processor determined to have failed
                    to fill at least 82.5 percent of its allocation of the
                    beet sugar allotment as described in paragraph (1).
                ``(4) Filing deadline.--For purposes of the filing deadline
            specified in subsection (b)(1), the 20-day period shall commence
            on the date on which the Secretary announces the allocations for
            the subsequent crop year or October 1, whichever is earlier.

    ``SEC. 359j. <<NOTE: 7 USC 1359jj.>>  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

    [[Page 116 STAT. 204]]

    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 this part.

    ``SEC. 359k. <<NOTE: 7 USC 1359kk.>>  REALLOCATING SUGAR QUOTA IMPORT
                SHORTFALLS.

        ``(a) In General.--Notwithstanding any other provision of law, on or
    after June 1 of each of the 2002 through 2007 calendar years, the United
    States Trade Representative, in consultation with the Secretary, shall
    determine the amount of the quota of cane sugar used by each qualified
    supplying country for that crop year, and may reallocate the unused
    quota for that crop year among qualified supplying countries.

        ``(b) Qualified Supplying Country Defined.--In this section, the
    term `qualified supplying country' means one of the following foreign
    countries that is allowed to export cane sugar to the United States
    under an agreement or any other country with which the United States has
    an agreement relating to the importation of cane sugar:
            Argentina
            Australia
            Barbados
            Belize
            Bolivia
            Brazil
            Colombia
            Republic of the Congo
            Costa Rica
            Dominican Republic
            Ecuador
            El Salvador
            Fiji
            Gabon
            Guatemala
            Guyana
            Haiti
            Honduras
            India
            Cote D'Ivoire, formerly known as
        the Ivory Coast
            Jamaica
            Madagascar
            Malawi
            Mauritius
            Mexico
            Mozambique
            Nicaragua
            Panama
            Papua New Guinea
            Paraguay
            Peru
            Philippines
            St. Kitts and Nevis
            South Africa
            Swaziland
            Taiwan
            Thailand
            Trinidad-Tobago
            Uruguay
            Zimbabwe.''.

    [[Page 116 STAT. 205]]

                                Subtitle E--Dairy

    SEC. 1501. <<NOTE: 7 USC 7981.>>  MILK PRICE SUPPORT PROGRAM.

        (a) Support Activities.--During the period beginning on June 1,
    2002, and ending on December 31, 2007, the Secretary of Agriculture
    shall support the price of milk produced in the 48 contiguous States
    through the purchase of cheese, butter, and nonfat dry milk produced
    from the milk.
        (b) Rate.--During the period specified in subsection (a), the price
    of milk shall be supported at a rate equal to $9.90 per hundredweight
    for milk containing 3.67 percent butterfat.
        (c) Purchase Prices.--
                (1) Uniform prices.--The support purchase prices under this
            section for each of the products of milk (butter, cheese, and
            nonfat dry milk) announced by the Secretary shall be the same
            for all of that product sold by persons offering to sell the
            product to the Secretary.
                (2) Sufficient prices.--The purchase prices shall be
            sufficient to enable plants of average efficiency to pay
            producers, on average, a price that is not less than the rate of
            price support for milk in effect under subsection (b).

        (d) Special Rule for Butter and Nonfat Dry Milk Purchase Prices.--
                (1) Allocation of purchase prices.--The Secretary may
            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 or achieve such other objectives as the Secretary
            considers appropriate. Not later than 10 days after making or
            changing an allocation, the Secretary shall notify the Committee
            on Agriculture of the House of Representatives and the Committee
            on Agriculture, Nutrition, and Forestry of the Senate of the
            allocation. Section 553 of title 5, United States Code, shall
            not apply with respect to the implementation of this section.
                (2) Timing of purchase price adjustments.--The Secretary may
            make any such adjustments in the purchase prices for nonfat dry
            milk and butter the Secretary considers to be necessary not more
            than twice in each calendar year.

        (e) Commodity Credit Corporation.--The Secretary shall carry out the
    program authorized by this section through the Commodity Credit
    Corporation.

    SEC. 1502. <<NOTE: 7 USC 7982.>>  NATIONAL DAIRY MARKET LOSS PAYMENTS.

        (a) Definitions.--In this section:
                (1) Class i milk.--The term `Class I milk' means milk
            (including milk components) classified as Class I milk under a
            Federal milk marketing order.
                (2) Eligible production.--The term `eligible production'
            means milk produced by a producer in a participating State.
                (3) Federal milk marketing order.--The term `Federal milk
            marketing order' means an order issued under section 8c of the
            Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with
            amendments by the Agricultural Marketing Agreement Act of 1937.

    [[Page 116 STAT. 206]]

                (4) Participating state.--The term `participating State'
            means each State.
                (5) Producer.--The term `producer' means an individual or
            entity that directly or indirectly (as determined by the
            Secretary)--
                        (A) shares in the risk of producing milk; and
                        (B) makes contributions (including land, labor,
                    management, equipment, or capital) to the dairy farming
                    operation of the individual or entity that are at least
                    commensurate with the share of the individual or entity
                    of the proceeds of the operation.

        (b) Payments.--The <<NOTE: Contracts.>> Secretary shall offer to
    enter into contracts with producers on a dairy farm located in a
    participating State under which the producers receive payments on
    eligible production.

        (c) Amount.--Payments to a producer under this section shall be
    calculated by multiplying (as determined by the Secretary)--
                (1) the payment quantity for the producer during the
            applicable month established under subsection (d);
                (2) the amount equal to--
                        (A) $16.94 per hundredweight; less
                        (B) the Class I milk price per hundredweight in
                    Boston under the applicable Federal milk marketing
                    order; by
                (3) 45 percent.

        (d) Payment Quantity.--
                (1) In general.--Subject to paragraph (2), the payment
            quantity for a producer during the applicable month under this
            section shall be equal to the quantity of eligible production
            marketed by the producer during the month.
                (2) Limitation.--The payment quantity for all producers on a
            single dairy operation during the months of the applicable
            fiscal year for which the producers receive payments under
            subsection (b) shall not exceed 2,400,000 pounds. For purposes
            of determining whether producers are producers on separate dairy
            operations or a single dairy operation, the Secretary shall
            apply the same standards as were applied in implementing the
            dairy program under section 805 of the Agriculture, Rural
            Development, Food and Drug Administration, and Related Agencies
            Appropriations Act, 2001 (as enacted into law by Public Law 106-
            387; 114 Stat. 1549A-50).
                (3) Reconstitution.--The Secretary shall promulgate
            regulations to ensure that a producer does not reconstitute a
            dairy operation for the sole purpose of receiving additional
            payments under this section.

        (e) Payments.--A <<NOTE: Deadline.>> payment under a contract under
    this section shall be made on a monthly basis not later than 60 days
    after the last day of the month for which the payment is made.

        (f) Signup.--The <<NOTE: Contracts.>> Secretary shall offer to enter
    into contracts under this section during the period beginning on the
    date that is 60 days after the date of enactment of this Act and ending
    on September 30, 2005.

        (g) Duration of Contract.--
                (1) In general.--Except as provided in paragraph (2) and
            subsection (h), any contract entered into by producers on a
            dairy farm under this section shall cover eligible production
            marketed by the producers on the dairy farm during the period
            starting with the first day of month the producers on the

    [[Page 116 STAT. 207]]

            dairy farm enter into the contract and ending on September 30,
            2005.
                (2) Violations.--If a producer violates the contract, the
            Secretary may--
                        (A) terminate the contract and allow the producer to
                    retain any payments received under the contract; or
                        (B) allow the contract to remain in effect and
                    require the producer to repay a portion of the payments
                    received under the contract based on the severity of the
                    violation.

        (h) Transition Rule.--In addition to any payment that is otherwise
    available under this section, if the producers on a dairy farm enter
    into a contract under this section, the Secretary shall make a payment
    in accordance with the formula specified in subsection (c) on the
    quantity of eligible production of the producer marketed during the
    period beginning on December 1, 2001, and ending on the last day of the
    month preceding the month the producers on the dairy farm entered into
    the contract.

    SEC. 1503. DAIRY EXPORT INCENTIVE AND DAIRY INDEMNITY PROGRAMS.

        (a) Dairy Export Incentive Program.--Section 153(a) of the Food
    Security Act of 1985 (15 U.S.C. 713a-14(a)) is amended by striking
    ``2002'' and inserting ``2007''.
        (b) Dairy Indemnity Program.--Section 3 of Public Law 90-484 (7
    U.S.C. 450l) is amended by striking ``1995'' and inserting ``2007''.

    SEC. 1504. DAIRY PRODUCT MANDATORY REPORTING.

        Section 272(1) of the Agricultural Marketing Act of 1946 (7 U.S.C.
    1637a(1)) is amended--
                (1) by striking ``means manufactured dairy products'' and
            inserting ``means--
                        ``(A) manufactured dairy products'';
                (2) by striking the period at the end and inserting ``;
            and''; and
                (3) by adding at the end the following:
                        ``(B) substantially identical products designated by
                    the Secretary.''.

    SEC. 1505. FUNDING OF DAIRY PROMOTION AND RESEARCH PROGRAM.

        (a) Definitions.--Section 111 of the Dairy Production Stabilization
    Act of 1983 (7 U.S.C. 4502) is amended--
                (1) in subsection (k), by striking ``and'' at the end;
                (2) in subsection (l), by striking the period at the end and
            inserting a semicolon; and
                (3) by adding at the end the following:
                ``(m) the term `imported dairy product' means any dairy
            product that is imported into the United States (as defined in
            subsection (l)), including dairy products imported into the
            United States in the form of--
                        ``(1) milk, cream, and fresh and dried dairy
                    products;
                        ``(2) butter and butterfat mixtures;
                        ``(3) cheese; and
                        ``(4) casein and mixtures;
                ``(n) the term `importer' means a person that imports an
            imported dairy product into the United States; and
                ``(o) the term `Customs' means the United States Customs
            Service.''.

    [[Page 116 STAT. 208]]

        (b) Representation of Importers on Board.--Section 113(b) of the
    Dairy Production Stabilization Act of 1983 (7 U.S.C. 4504(b)) is
    amended--
                (1) by inserting ``National Dairy Promotion and Research
            Board.--'' after ``(b)'';
                (2) by designating the first through ninth sentences as
            paragraphs (1) through (5) and paragraphs (7) through (10),
            respectively, and indenting the paragraphs appropriately;
                (3) in paragraph (2) (as so designated), by striking
            ``Members'' and inserting ``Except as provided in paragraph (6),
            the members'';
                (4) by inserting after paragraph (5) (as so designated) the
            following:
                ``(6) Importers.--
                        ``(A) Initial representation.--In making initial
                    appointments to the Board of importer representatives,
                    the Secretary shall appoint 2 members who represent
                    importers of dairy products and are subject to
                    assessments under the order.
                        ``(B) Subsequent representation.--At least once
                    every 3 years after the initial appointment of importer
                    representatives under subparagraph (A), the Secretary
                    shall review the average volume of domestic production
                    of dairy products compared to the average volume of
                    imports of dairy products into the United States during
                    the previous 3 years and, on the basis of that review,
                    shall reapportion importer representation on the Board
                    to reflect the proportional share of the United States
                    market by domestic production and imported dairy
                    products.
                        ``(C) Additional members; nominations.--The members
                    appointed under this paragraph--
                              ``(i) shall be in addition to the total number
                          of members appointed under paragraph (2); and
                              ``(ii) shall be appointed from nominations
                          submitted by importers under such procedures as
                          the Secretary determines to be appropriate.''; and
                (5) in paragraph (8) (as so designated), by striking ``is
            produced'' and inserting ``is produced as well as importers of
            dairy products''.

        (c) Budgets.--Section 113(e) of the Dairy Production Stabilization
    Act of 1983 (7 U.S.C. 4504(e)) is amended--
                (1) by striking ``(e)'' and inserting:

        ``(e) Budgets.--
                ``(1) Preparation and submission.--'';
                (2) by striking the last sentence; and
                (3) by adding at the end the following:
                ``(2) Foreign market efforts.--The order shall authorize the
            Board to expend in the maintenance and expansion of foreign
            markets an amount not to exceed the amount collected from United
            States producers for a fiscal year. Of those funds, for each of
            the 2002 through 2007 fiscal years, the Board's budget may
            provide for the expenditure of revenues available to the Board
            to develop international markets for, and to promote within such
            markets, the consumption of dairy products produced or
            manufactured in the United States.''.

    [[Page 116 STAT. 209]]

        (d) Importer Assessment.--Section 113(g) of the Dairy Production
    Stabilization Act of 1983 (7 U.S.C. 4504(g)) is amended--
                (1) by inserting ``Assessments.--'' after ``(g)'';
                (2) by designating the first through fifth sentences as
            paragraphs (1) through (5), respectively, and indenting
            appropriately;
                (3) in paragraph (3) (as so designated)--
                        (A) by inserting ``for milk produced in the United
                    States and imported dairy products'' after ``The rate of
                    assessment''; and
                        (B) by inserting before the period at the end the
                    following: ``, as determined by the Secretary''; and
                (4) by adding at the end the following:
                ``(6) Importers.--
                        ``(A) In general.--The order shall provide that each
                    importer of imported dairy products shall pay an
                    assessment to the Board in the manner prescribed by the
                    order.
                        ``(B) Time for payment.--The assessment on imported
                    dairy products shall be paid by the importer to Customs
                    at the time the entry documents are filed with Customs.
                    Customs shall remit the assessments to the Board. For
                    purposes of this subparagraph, the term `importer'
                    includes persons who hold title to foreign-produced
                    dairy products immediately upon release by Customs, as
                    well as persons who act on behalf of others, as agents,
                    brokers, or consignees, to secure the release of dairy
                    products from Customs.
                        ``(C) Use of assessments on imported dairy
                    products.--Assessments collected on imported dairy
                    products shall not be used for foreign market
                    promotion.''.

        (e) Records.--Section 113(k) of the Dairy Production Stabilization
    Act of 1983 (7 U.S.C. 4504(k)) is amended in the first sentence by
    striking ``person receiving'' and inserting ``importer of imported dairy
    products, each person receiving''.
        (f) Importer Eligibility To Vote in Referendum.--Section 116(b) of
    the Dairy Promotion Stabilization Act of 1983 (7 U.S.C. 4507(b)) is
    amended--
                (1) in the first sentence--
                        (A) by inserting after ``of producers'' the
                    following: ``and importers''; and
                        (B) by inserting after ``the producers'' the
                    following: ``and importers''; and
                (2) in the second sentence, by inserting after ``commercial
            use'' the following: ``and importers voting in the referendum
            (who have been engaged in the importation of dairy products
            during the same representative period, as determined by the
            Secretary)''.

        (g) Order Implementation and International Trade Obligations.--
    Section 112 of the Dairy Promotion Stabilization Act of 1983 (7 U.S.C.
    4503) is amended by adding at the end the following:
        ``(d) Order Implementation and International Trade Obligations.--The
    Secretary, in consultation with the United States Trade Representative,
    shall ensure that the order is implemented in a manner consistent with
    the international trade obligations of the Federal Government.''.

    [[Page 116 STAT. 210]]

        (h) Conforming Amendments To Reflect Addition of Importers.--The
    Dairy Production Stabilization Act of 1983 is amended--
                (1) in section 110(b) (7 U.S.C. 4501(b))--
                        (A) in the first sentence--
                              (i) by inserting after ``commercial use'' the
                          following: ``and on imported dairy products''; and
                              (ii) by striking ``products produced in the
                          United States.'' and inserting ``products.''; and
                        (B) in the second sentence, by inserting after
                    ``produce milk'' the following: ``or the right of any
                    person to import dairy products''; and
                (2) in section 111(d) (7 U.S.C. 4502(d)), by striking
            ``produced in the United States''.

    SEC. 1506. FLUID MILK PROMOTION.

        (a) Definition of Fluid Milk Product.--Section 1999C of the Fluid
    Milk Promotion Act of 1990 (7 U.S.C. 6402) is amended by striking
    paragraph (3) and inserting the following:
                ``(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.''.

        (b) Definition of Fluid Milk Processor.--Section 1999C(4) of the
    Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402(4)) is amended by
    striking ``500,000 pounds of fluid milk products in consumer-type
    packages per month'' and inserting ``3,000,000 pounds of fluid milk
    products in consumer-type packages per month (excluding products
    delivered directly to the place of residence of a consumer)''.
        (c) Elimination of Order Termination Date.--Section 1999O of the
    Fluid Milk Promotion Act of 1990 (7 U.S.C. 6414) is amended--
                (1) by striking subsection (a); and
                (2) by redesignating subsections (b) and (c) as subsections
            (a) and (b), respectively.

    SEC. 1507. <<NOTE: 7 USC 7983.>> STUDY OF NATIONAL DAIRY POLICY.

        (a) Study Required.--The Secretary of Agriculture shall conduct a
    comprehensive economic evaluation of the potential direct and indirect
    effects of the various elements of the national dairy policy, including
    an examination of the effect of the national dairy policy on--
                (1) farm price stability, farm profitability and viability,
            and local rural economies in the United States;
                (2) child, senior, and low-income nutrition programs,
            including impacts on schools and institutions participating in
            the programs, on program recipients, and other factors; and
                (3) the wholesale and retail cost of fluid milk, dairy
            farms, and milk utilization.

        (b) Report.--Not <<NOTE: Deadline.>> later than 1 year after the
    date of enactment of this Act, the Secretary shall submit to the
    Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    describing the results of the study required by this section.

    [[Page 116 STAT. 211]]

        (c) National Dairy Policy Defined.--In this section, the term
    ``national dairy policy'' means the dairy policy of the United States as
    evidenced by the following policies and programs:
                (1) Federal milk marketing orders issued under section 8c of
            the Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with
            amendments by the Agricultural Marketing Act of 1937.
                (2) Interstate dairy compacts (including proposed compacts
            described in H.R. 1827 and S. 1157, as introduced in the 107th
            Congress).
                (3) Over-order premiums and State pricing programs.
                (4) Direct payments to milk producers.
                (5) Federal milk price support program established under
            section 1401.
                (6) Export programs regarding milk and dairy products, such
            as the dairy export incentive program established under section
            153 of the Food Security Act of 1985 (15 U.S.C. 713a-14).

    SEC. 1508. <<NOTE: 7 USC 7984.>>  STUDIES OF EFFECTS OF CHANGES IN
                APPROACH TO NATIONAL DAIRY POLICY AND FLUID MILK IDENTITY
                STANDARDS.

        (a) Federal Dairy Policy Changes.--The Secretary of Agriculture
    shall conduct a study of the effects of--
                (1) terminating all Federal programs relating to price
            support and supply management for milk; and
                (2) granting the consent of Congress to cooperative efforts
            by States to manage milk prices and supply.

        (b) Fluid Milk Identity Standards.--The Secretary shall conduct a
    study of the effects of including in the standard of identity for fluid
    milk a required minimum protein content that is commensurate with the
    average nonfat solids content of bovine milk produced in the United
    States.
        (c) Reports.--Not <<NOTE: Deadline.>> later than 1 year after the
    date of enactment of this Act, the Secretary shall submit to the
    Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    describing the results of the studies required by this section.

                           Subtitle F--Administration

    SEC. 1601. <<NOTE: 7 USC 7991.>> ADMINISTRATION GENERALLY.

        (a) Use of Commodity Credit Corporation.--The Secretary shall use
    the funds, facilities, and authorities of the Commodity Credit
    Corporation to carry out this title.
        (b) Determinations by Secretary.--A determination made by the
    Secretary under this title shall be final and conclusive.
        (c) Regulations.--
                (1) In general.--Not <<NOTE: Deadline.>> later than 90 days
            after the date of the enactment of this Act, the Secretary and
            the Commodity Credit Corporation, as appropriate, shall
            promulgate such regulations as are necessary to implement this
            title.
                (2) Procedure.--The <<NOTE: Regulations.>> promulgation of
            the regulations and administration of this title shall be made
            without regard to--
                        (A) chapter 35 of title 44, United States Code
                    (commonly know as the ``Paperwork Reduction Act'');

    [[Page 116 STAT. 212]]

                        (B) the Statement of Policy of the Secretary of
                    Agriculture effective July 24, 1971 (36 Fed. Reg.
                    13804), relating to notices of proposed rulemaking and
                    public participation in rulemaking; and
                        (C) the notice and comment provisions of section 553
                    of title 5, United States Code.
                (3) Congressional review of agency rulemaking.--In carrying
            out this subsection, the Secretary shall use the authority
            provided under section 808 of title 5, United States Code.

        (d) Treatment of Advance Payment Option.--The protection that was
    afforded producers that had an option to elect to accelerate the receipt
    of any payment under a production flexibility contract payable under the
    Federal Agriculture Improvement and Reform Act of 1996, as provided by
    section 525 of Public 106-170 (113 Stat. 1928; 7 U.S.C. 7212 note),
    shall also apply to the option to receive--
                (1) the advance payment of direct payments and counter-
            cyclical payments under subtitle A and subtitle C; and
                (2) the single payment of compensation for eligible peanut
            quota holders under section 1310.

        (e) Adjustment Authority Related to Uruguay Round Compliance.--
                (1) Required determination; adjustment.--If the Secretary
            determines that expenditures under subtitles A through E 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 Act, will exceed such allowable
            levels for any applicable reporting period, the Secretary shall,
            to the maximum extent practicable, make adjustments in the
            amount of such expenditures during that period to ensure that
            such expenditures do not exceed such allowable levels.
                (2) Congressional notification.--Before making any
            adjustment under paragraph (1), the Secretary shall submit to
            the Committee on Agriculture, Nutrition, and Forestry of the
            Senate and the Committee on Agriculture of the House of
            Representatives a report describing the determination made under
            that paragraph and the extent of the adjustment to be made.

    SEC. 1602. <<NOTE: 7 USC 7992.>>  SUSPENSION OF PERMANENT PRICE SUPPORT
                AUTHORITY.

        (a) Agricultural Adjustment Act of 1938.--The following provisions
    of the Agricultural Adjustment Act of 1938 shall not be applicable to
    the 2002 through 2007 crops of covered commodities, peanuts, and sugar
    and shall not be applicable to milk during the period beginning on the
    date of enactment of this Act through December 31, 2007:
                (1) Parts II through V of subtitle B of title III (7 U.S.C.
            1326-1351).
                (2) In the case of upland cotton, section 377 (7 U.S.C.
            1377).
                (3) Subtitle D of title III (7 U.S.C. 1379a-1379j).
                (4) Title IV (7 U.S.C. 1401-1407).

        (b) Agricultural Act of 1949.--The following provisions of the
    Agricultural Act of 1949 shall not be applicable to the 2002

    [[Page 116 STAT. 213]]

    through 2007 crops of covered commodities, peanuts, and sugar and shall
    not be applicable to milk during the period beginning on the date of
    enactment of this Act and through December 31, 2007:
                (1) Section 101 (7 U.S.C. 1441).
                (2) Section 103(a) (7 U.S.C. 1444(a)).
                (3) Section 105 (7 U.S.C. 1444b).
                (4) Section 107 (7 U.S.C. 1445a).
                (5) Section 110 (7 U.S.C. 1445e).
                (6) Section 112 (7 U.S.C. 1445g).
                (7) Section 115 (7 U.S.C. 1445k).
                (8) Section 201 (7 U.S.C. 1446).
                (9) Title III (7 U.S.C. 1447-1449).
                (10) Title IV (7 U.S.C. 1421-1433d), other than sections
            404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
                (11) Title V (7 U.S.C. 1461-1469).
                (12) Title VI (7 U.S.C. 1471-1471j).

        (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 2002
    through 2007.
        (d) Conforming Amendment.--Section 171(a)(1) of the Federal
    Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7301(a)(1)) is
    amended by striking ``2002'' the first place appears and inserting
    ``2001''.

    SEC. 1603. PAYMENT LIMITATIONS.

        (a) Limitation on Amounts Received.--Section 1001 of the Food
    Security Act of 1985 (7 U.S.C. 1308) is amended by striking the section
    heading, ``Sec. 1001.'', and all that follows through the end of
    paragraph (4) and inserting the following:

    ``SEC. 1001. PAYMENT LIMITATIONS.

        ``(a) Definitions.--In this section:
                ``(1) Covered commodity.--The term `covered commodity' has
            the meaning given that term in section 1001 of the Farm Security
            and Rural Investment Act of 2002.
                ``(2) Loan commodity.--The term `loan commodity' has the
            meaning given that term in section 1001 of the Farm Security and
            Rural Investment Act of 2002, except that the term does not
            include wool, mohair, or honey.
                ``(3) Secretary.--The term `Secretary' means the Secretary
            of Agriculture.

        ``(b) Limitation on Direct Payments.--
                ``(1) Covered commodities.--The total amount of direct
            payments made to a person during any crop year under subtitle A
            of title I of the Farm Security and Rural Investment Act of 2002
            for 1 or more covered commodities may not exceed $40,000.
                ``(2) Peanuts.--The total amount of direct payments made to
            a person during any crop year under subtitle C of title I of the
            Farm Security and Rural Investment Act of 2002 may not exceed
            $40,000.

        ``(c) Limitation on Counter-Cyclical Payments.--
                ``(1) Covered commodities.--The total amount of counter-
            cyclical payments made to a person during any crop year under

    [[Page 116 STAT. 214]]

            subtitle A of title I of the Farm Security and Rural Investment
            Act of 2002 for 1 or more covered commodities may not exceed
            $65,000.
                ``(2) Peanuts.--The total amount of counter-cyclical
            payments made to a person during any crop year under subtitle C
            of title I of the Farm Security and Rural Investment Act of 2002
            may not exceed $65,000.

        ``(d) Limitation on Marketing Loan Gains and Loan Deficiency
    Payments.--
                ``(1) Loan commodities.--The total amount of the following
            gains and payments that a person may receive during any crop
            year may not exceed $75,000:
                        ``(A) Any gain realized by a producer from repaying
                    a marketing assistance loan for 1 or more loan
                    commodities under subtitle B of title I of the Farm
                    Security and Rural Investment Act of 2002 at a lower
                    level than the original loan rate established for the
                    loan commodity under that subtitle.
                        ``(B) Any loan deficiency payments received for 1 or
                    more loan commodities under that subtitle.
                ``(2) Other commodities.--The total amount of the following
            gains and payments that a person may receive during any crop
            year may not exceed $75,000:
                        ``(A) Any gain realized by a producer from repaying
                    a marketing assistance loan for peanuts, wool, mohair,
                    or honey under subtitle B or C of title I of the Farm
                    Security and Rural Investment Act of 2002 at a lower
                    level than the original loan rate established for the
                    commodity under those subtitles.
                        ``(B) Any loan deficiency payments received for
                    peanuts, wool, mohair, and honey under those
                    subtitles.''.

        (b) Clerical and Conforming Amendments to Section 1001.--Section
    1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is amended--
                (1) in paragraph (5)--
                        (A) by striking ``(5)'' and inserting ``(e)
                    Definition of Person.--''
                        (B) by redesignating subparagraphs (A) through (E)
                    as paragraphs (1) through (5), respectively;
                        (C) in paragraph (1), as so redesignated--
                              (i) by redesignating clauses (i) and (ii) as
                          subparagraphs (A) and (B), respectively; and
                              (ii) by striking the second sentence; and
                        (D) in paragraph (2), as so redesignated--
                              (i) by redesignating clause (i) as
                          subparagraph (A) and, in such subparagraph (as so
                          redesignated)--
                                        (I) by striking ``subparagraph (A),
                                    subject to clause (ii)'' and inserting
                                    ``paragraph (1), subject to subparagraph
                                    (B)''; and
                                        (II) by redesignating subclauses
                                    (I), (II), and (III), as clauses (i),
                                    (ii), and (iii), respectively;
                              (ii) by redesignating clause (ii) as
                          subparagraph (B) and, in such subparagraph (as so
                          redesignated), by redesignating subclauses (I),
                          (II), and (III), as clauses (i), (ii), and (iii),
                          respectively; and
                              (iii) by redesignating clause (iii) as
                          subparagraph (C) and, in such subparagraph (as so
                          redesignated)--

    [[Page 116 STAT. 215]]

                                        (I) by striking ``as described in
                                    paragraphs (1) and (2)'' and inserting
                                    ``as described in subsections (b), (c),
                                    and (d)''; and
                                        (II) by redesignating subclauses (I)
                                    and (II) as clauses (i) and (ii),
                                    respectively;
                (2) in paragraph (6), by striking ``(6)'' and inserting
            ``(f) Public Schools.--''; and
                (3) in paragraph (7), by striking ``(7)'' and inserting
            ``(g) Time Limits; Reliance.--''.

        (c) Conforming Amendments to Other laws.--
                (1) Section 1001A of the Food Security Act of 1985 (7 U.S.C.
            1308-1) is amended--
                        (A) in subsections (a)(1) and (b)(2)(B), by striking
                    ``section 1001(5)(B)(i)(II)'' and inserting ``section
                    1001(e)(2)(A)(ii)''; and
                        (B) in subsections (a)(1) and (b)(1), by striking
                    ``section 1001(5)(B)(i)'' and inserting ``section
                    1001(e)(2)(A)''; and
                (2) Section 1001B of the Food Security Act of 1985 (7 U.S.C.
            1308-2) is amended by striking ``as described in paragraphs (1)
            and (2)'' and inserting ``as described in subsections (b), (c),
            and (d)''.
                (3) Section 1001C(a) of the Food Security Act of 1985 (7
            U.S.C. 1308-3(a)) is amended by inserting ``title I of the Farm
            Security and Rural Investment Act of 2002,'' after ``made
            available under''.

        (d) Transition.--Section 1001 of the Food Security Act of 1985 (7
    U.S.C. 1308), as in effect on the day before the date of the enactment
    of this Act, shall continue to apply with respect to the 2001 crop of
    any covered commodity.

    SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.

        The Food Security Act of 1985 is amended--
                (1) by redesignating section 1001D (7 U.S.C. 1308-4) and
            section 1001E (7 U.S.C. 1308-5) as sections 1001E and 1001F,
            respectively; and
                (2) by inserting after section 1001C (7 U.S.C. 1308-3) the
            following:

    ``SEC. 1001D. <<NOTE: 7 USC 1308-3a.>>  ADJUSTED GROSS INCOME
                LIMITATION.

        ``(a) Definition of Average Adjusted Gross Income.--
                ``(1) In general.--In this section, the term `average
            adjusted gross income', with respect to an individual or entity
            (for purposes of this section, as defined in section
            1001(e)(2)(A)(ii)), means the 3-year average of the adjusted
            gross income or comparable measure of the individual or entity
            over the 3 preceding tax years, as determined by the Secretary.
                ``(2) Special rules for certain individuals and entities.--
            In the case of an entity that is not required to file a Federal
            income tax return or an individual or entity that did not have
            taxable income in 1 or more of the tax years used to determine
            the average under paragraph (1), the Secretary shall provide, by
            regulation, a method for determining the average adjusted gross
            income of the individual or entity for purposes of this section.

        ``(b) Limitation.--
                ``(1) In general.--Notwithstanding any other provision of
            law, an individual or entity shall not be eligible to receive
            any benefit described in paragraph (2) during a crop year

    [[Page 116 STAT. 216]]

            if the average adjusted gross income of the individual or entity
            exceeds $2,500,000, unless not less than 75 percent of the
            average adjusted gross income of the individual or entity is
            derived from farming, ranching, or forestry operations, as
            determined by the Secretary.
                ``(2) Covered benefits.--Paragraph (1) applies with respect
            to the following:
                        ``(A) A direct payment or counter-cyclical payment
                    under subtitle A or C of title I of the Farm Security
                    and Rural Investment Act of 2002.
                        ``(B) A marketing loan gain or payment described in
                    section 1001(d) of this Act.
                        ``(C) A payment under any program under title XII of
                    this Act or title II of the Farm Security and Rural
                    Investment Act of 2002.

        ``(c) Certification.--To comply with the limitation under subsection
    (b), an individual or entity shall provide to the Secretary--
                ``(1) a certification by a certified public accountant or
            another third party that is acceptable to the Secretary that the
            average adjusted gross income of the individual or entity does
            not exceed the limitation specified in that subsection; or
                ``(2) information and documentation regarding the adjusted
            gross income of the individual or entity through other
            procedures established by the Secretary.

        ``(d) Commensurate Reduction.--In the case of a benefit described in
    subsection (b)(2) made in a crop year to an entity, general partnership,
    or joint venture, the amount of the benefit shall be reduced by an
    amount that is commensurate with the direct and indirect ownership
    interest in the entity, general partnership, or joint venture of each
    individual who has an average adjusted gross income in excess of the
    limitation specified in subsection (b) for the average of the 3
    preceding crop years.
        ``(e) Effective Period.--This section shall apply only during the
    2003 through 2007 crop years.''.

    SEC. 1605. <<NOTE: 7 USC 7993.>>  COMMISSION ON APPLICATION OF PAYMENT
                LIMITATIONS.

        (a) Establishment.--There is established a commission to be known as
    the ``Commission on the Application of Payment Limitations for
    Agriculture'' (referred to in this section as the ``Commission'').
        (b) Duties.--The Commission shall conduct a study on the potential
    impacts of further payment limitations on the receipt of direct
    payments, counter-cyclical payments, and marketing loan gains and loan
    deficiency payments on--
                (1) farm income;
                (2) land values;
                (3) rural communities;
                (4) agribusiness infrastructure;
                (5) planting decisions of producers affected; and
                (6) supply and prices of covered commodities, loan
            commodities, specialty crops (including fruits and vegetables),
            and other agricultural commodities.

        (c) Membership.--
                (1) Composition.--The Commission shall be composed of 10
            members as follows:
                        (A) 3 members appointed by the Secretary.

    [[Page 116 STAT. 217]]

                        (B) 3 members appointed by the Committee on
                    Agriculture, Nutrition, and Forestry of the Senate.
                        (C) 3 members appointed by the Committee on
                    Agriculture of the House of Representatives.
                        (D) The Chief Economist of the Department of
                    Agriculture.
                (2) Federal government employment.--The membership of the
            Commission may include 1 or more employees of the Department of
            Agriculture or other Federal agencies.
                (3) Date of appointments.--
            The <<NOTE: Deadline.>> appointment of a member of the
            Commission shall be made not later than 60 days after the date
            of enactment of this Act.
                (4) Term; vacancies.--
                        (A) Term.--A member shall be appointed for the life
                    of the Commission.
                        (B) Vacancies.--A vacancy on the Commission--
                              (i) shall not affect the powers of the
                          Commission; and
                              (ii) shall be filled in the same manner as the
                          original appointment was made.
                (5) Initial meeting.--Not <<NOTE: Deadline.>> later than 30
            days after the date on which all members of the Commission have
            been appointed, the Commission shall hold the initial meeting of
            the Commission.

        (d) Quorum.--A majority of the members of the Commission shall
    constitute a quorum for the transaction of business, but a lesser number
    of members may hold hearings.
        (e) Chairperson.--The Secretary shall appoint 1 of the members of
    the Commission to serve as Chairperson of the Commission.
        (f) Report.--Not <<NOTE: Deadline.>> later than 1 year after the
    date of enactment of this Act, the Commission shall submit to the
    President, the Committee on Agriculture of the House of Representatives,
    and the Committee on Agriculture, Nutrition, and Forestry of the Senate
    a report containing the results of the study required by subsection (b),
    including such recommendations as the Commission considers appropriate.

        (g) Hearings.--The Commission may hold such hearings, meet and act
    at such times and places, take such testimony, and receive such evidence
    as the Commission considers advisable to carry out this section.
        (h) Information From Federal Agencies.--The Commission may secure
    directly from a Federal agency such information as the Commission
    considers necessary to carry out this section. On request of the
    Chairperson of the Commission, the head of the agency shall provide the
    information to the Commission.
        (i) Postal Services.--The Commission may use the United States mails
    in the same manner and under the same conditions as other agencies of
    the Federal Government.
        (j) Assistance From Secretary.--The Secretary may provide to the
    Commission appropriate office space and such reasonable administrative
    and support services as the Commission may request.
        (k) Compensation of Members.--
                (1) Non-federal employees.--A member of the Commission who
            is not an officer or employee of the Federal Government shall be
            compensated at a rate equal to the daily equivalent of the
            annual rate of basic pay prescribed for level IV

    [[Page 116 STAT. 218]]

            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.
                (2) Federal employees.--A member of the Commission who is an
            officer or employee of the Federal Government shall serve
            without compensation in addition to the compensation received
            for the services of the member as an officer or employee of the
            Federal Government.
                (3) Travel Expenses.--A 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.

        (l) Federal Advisory Committee Act.--The Federal Advisory Committee
    Act (5 U.S.C. App.) shall not apply to the Commission or any proceeding
    of the Commission.

    SEC. 1606. ADJUSTMENTS OF LOANS.

        Section 162(b) of the Federal Agriculture Improvement and Reform Act
    of 1996 (7 U.S.C. 7282(b)) is amended by striking ``this title'' and
    inserting ``this title and title I of the Farm Security and Rural
    Investment Act of 2002''.

    SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

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

    SEC. 1608. EXTENSION OF EXISTING ADMINISTRATIVE AUTHORITY REGARDING
                LOANS.

        Section 166 of the Federal Agriculture Improvement and Reform Act of
    1996 (7 U.S.C. 7286) is amended--
                (1) in subsection (a), by striking ``subtitle C'' and
            inserting ``subtitle C of this title and subtitle B and C of
            title I of the Farm Security and Rural Investment Act of 2002'';
            and
                (2) in subsection (c)(1), by striking ``subtitle C'' and
            inserting ``subtitle C of this title and subtitle B and C of
            title I of the Farm Security and Rural Investment Act of 2002''.

    SEC. 1609. COMMODITY CREDIT CORPORATION INVENTORY.

        Section 5 of the Commodity Credit Corporation Charter Act (15 U.S.C.
    714c) is amended in the last sentence by inserting before the period at
    the end the following: ``(including, at the option of the Corporation,
    the use of private sector entities)''.

    SEC. 1610. RESERVE STOCK LEVEL.

        Section 301(b)(14)(C) of the Agricultural Adjustment Act of 1938 (7
    U.S.C. 1301(b)(14)(C)) is amended--
                (1) in clause (i), by striking ``100,000,000'' and inserting
            ``60,000,000''; and
                (2) in clause (ii), by striking ``15 percent'' and inserting
            ``10 percent''.

    SEC. 1611. FARM RECONSTITUTIONS.

        (a) In General.--Section 316(a)(1)(A)(ii) of the Agricultural
    Adjustment Act of 1938 (7 U.S.C. 1314b(a)(1)(A)(ii)) is amended

    [[Page 116 STAT. 219]]

    by adding at the end the following: ``Notwithstanding any other
    provision of law, for the 2002 crop only, the Secretary shall allow
    special farm reconstitutions, in lieu of lease and transfer of
    allotments and quotas, under this section, in accordance with such
    conditions as are established by the Secretary.''.
        (b) <<NOTE: 7 USC 7994.>>  Study.--
                (1) In general.--The Secretary shall conduct a study on the
            effects on the limitation on producers to move quota to a farm
            other than the farm to which the quota was initially assigned
            under part I of subtitle B of title III of the Agricultural
            Adjustment Act of 1938 (7 U.S.C. 1311 et seq.).
                (2) Report.--Not <<NOTE: Deadline.>> later than 90 days
            after the date of enactment of this Act, the Secretary shall
            submit to the Committee on Agriculture of the House of
            Representatives and the Committee on Agriculture, Nutrition, and
            Forestry of the Senate a report on the results of the study.

    SEC. 1612. <<NOTE: 7 USC 7995.>> ASSIGNMENT OF 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,
    shall apply to payments made under the authority of this Act. The
    producer making the assignment, or the assignee, shall provide the
    Secretary with notice, in such manner as the Secretary may require, of
    any assignment made under this section.

    SEC. 1613. <<NOTE: 7 USC 7996.>> EQUITABLE RELIEF FROM INELIGIBILITY FOR
                LOANS, PAYMENTS, OR OTHER BENEFITS.

        (a) Definitions.--In this section:
                (1) Agricultural commodity.--The term ``agricultural
            commodity'' means any agricultural commodity, food, feed, fiber,
            or livestock that is subject to a covered program.
                (2) Covered program.--
                        (A) In general.--The term ``covered program''
                    means--
                              (i) a program administered by the Secretary
                          under which price or income support, or production
                          or market loss assistance, is provided to
                          producers of agricultural commodities; and
                              (ii) a conservation program administered by
                          the Secretary.
                        (B) Exclusions.--The term ``covered program'' does
                    not include--
                              (i) an agricultural credit program carried out
                          under the Consolidated Farm and Rural Development
                          Act (7 U.S.C. 1921 et seq.); or
                              (ii) the crop insurance program carried out
                          under the Federal Crop Insurance Act (7 U.S.C.
                          1501 et seq.).
                (3) Participant.--The term ``participant'' means a
            participant in a covered program.
                (4) State conservationist.--The term ``State
            Conservationist'' means the State Conservationist with respect
            to a program administered by the Natural Resources Conservation
            Service.
                (5) State director.--The term ``State Director'' means the
            State Executive Director of the Farm Service Agency with respect
            to a program administered by the Farm Service Agency.

        (b) Equitable Relief.--The Secretary may provide relief to any
    participant that is determined to be not in compliance with the
    requirements of a covered program, and therefore ineligible

    [[Page 116 STAT. 220]]

    for a loan, payment, or other benefit under the covered program, if the
    participant--
                (1) acting in good faith, relied on the action or advice of
            the Secretary (including any authorized representative of the
            Secretary) to the detriment of the participant; or
                (2) failed to comply fully with the requirements of the
            covered program, but made a good faith effort to comply with the
            requirements.

        (c) Forms of Relief.--The Secretary may authorize a participant in a
    covered program to--
                (1) retain loans, payments, or other benefits received under
            the covered program;
                (2) continue to receive loans, payments, and other benefits
            under the covered program;
                (3) continue to participate, in whole or in part, under any
            contract executed under the covered program;
                (4) in the case of a conservation program, reenroll all or
            part of the land covered by the program; and
                (5) receive such other equitable relief as the Secretary
            determines to be appropriate.

        (d) Remedial Action.--As a condition of receiving relief under this
    section, the Secretary may require the participant to take actions
    designed to remedy any failure to comply with the covered program.
        (e) Equitable Relief by State Directors and State
    Conservationists.--
                (1) In general.--A State Director, in the case of programs
            administered by the State Director, and the State
            Conservationist, in the case of programs administered by the
            State Conservationist, may grant relief to a participant in
            accordance with subsections (b) through (d) if--
                        (A) the amount of loans, payments, and benefits for
                    which relief will be provided to the participant under
                    this subsection is less than $20,000;
                        (B) the total amount of loans, payments, and
                    benefits for which relief has been previously provided
                    to the participant under this subsection is not more
                    than $5,000; and
                        (C) the total amount of loans, payments, and
                    benefits for which relief is provided to similarly
                    situated participants under this subsection is not more
                    than $1,000,000, as determined by the Secretary.
                (2) Consultation, approval, and reversal.--The decision by a
            State Director or State Conservationist to grant relief under
            this subsection--
                        (A) shall not require prior approval by the
                    Administrator of the Farm Service Agency, the Chief of
                    the Natural Resources Conservation Service, or any other
                    officer or employee of the Agency or Service;
                        (B) shall be made only after consultation with, and
                    the approval of, the Office of General Counsel of the
                    Department of Agriculture; and
                        (C) is subject to reversal only by the Secretary
                    (who may not delegate the reversal authority).
                (3) Nonapplicability.--The authority of a State Director or
            State Conservationist under this subsection does not apply to
            the administration of--
                        (A) payment limitations under--

    [[Page 116 STAT. 221]]

                              (i) sections 1001 through 1001F of the Food
                          Security Act of 1985 (7 U.S.C. 1308 et seq.); or
                              (ii) a conservation program administered by
                          the Secretary.
                        (B) highly erodible land and wetland conservation
                    requirements under subtitle B or C of title XII of the
                    Food Security Act of 1985 (16 U.S.C. 3811 et seq.).
                (4) Other authority.--The authority provided to a State
            Director and State Conservationist under this subsection is in
            addition to any other applicable authority and does not limit
            other authority provided by law or the Secretary.

        (f) Judicial Review.--A discretionary decision by the Secretary, the
    State Director, or the State Conservationist under this section shall be
    final, and shall not be subject to review under chapter 7 of title 5,
    United States Code.
        (g) Reports.--Not <<NOTE: Deadline.>> later than February 1 of each
    year, the Secretary shall submit to the Committee on Agriculture of the
    House of Representatives and the Committee on Agriculture, Nutrition,
    and Forestry of the Senate a report that describes for the previous
    calendar year--
                (1) the number of requests for equitable relief under
            subsections (b) and (e) and the disposition of the requests; and
                (2) the number of requests for equitable relief under
            section 278(d) of the Department of Agriculture Reorganization
            Act of 1994 (7 U.S.C. 6998(d)) and the disposition of the
            requests.

        (h) Relationship to Other Law.--The authority provided in this
    section is in addition to any other authority provided in this or any
    other Act.
        (i) Finality Rule.--Section 281(a) of the Department of Agriculture
    Reorganization Act of 1994 (7 U.S.C. 7001(a)) is amended--
                (1) by striking ``Consolidated Farm Service Agency'' each
            place it appears and inserting ``Farm Service Agency'';
                (2) in paragraph (1)--
                        (A) by striking ``This subsection'' and inserting
                    the following:
                        ``(A) In general.--Except as provided in
                    subparagraph (B), this subsection''; and
                        (B) by adding at the end the following:
                        ``(B) Nonapplicability.--This subsection does not
                    apply to--
                              ``(i) a function performed under section 376
                          of the Consolidated Farm and Rural Development
                          Act; or
                              ``(ii) a function performed under a
                          conservation program administered by the Natural
                          Resources Conservation Service.''; and
                (3) in paragraph (2), by inserting ``, before the end of the
            90-day period,'' after ``unless the decision''.

        (j) Conforming Amendments.--
                (1) Section 326 of the Food and Agriculture Act of 1962 (7
            U.S.C. 1339a) is repealed.
                (2) Section 278(d) of the Department of Agriculture
            Reorganization Act of 1994 (7 U.S.C. 6998(d)) is amended in the
            first sentence by striking ``section 326 of the Food and
            Agriculture Act of 1962 (7 U.S.C. 1339a)'' and inserting
            ``section 1613 of the Farm Security and Rural Investment Act of
            2002''.
                (3) Section 1230A of the Food Security Act of 1985 (16
            U.S.C. 3830a) is repealed.

    [[Page 116 STAT. 222]]

    SEC. 1614. <<NOTE: 7 USC 7997.>>  TRACKING OF BENEFITS.

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

    SEC. 1615. <<NOTE: 7 USC 7998.>> ESTIMATES OF NET FARM INCOME.

        In each issuance of projections of net farm income, the Secretary
    shall include (as determined by the Secretary)--
                (1) an estimate of the net farm income earned by commercial
            producers in the United States; and
                (2) an estimate of the net farm income attributable to
            commercial producers of each of the following:
                        (A) Livestock.
                        (B) Loan commodities.
                        (C) Agricultural commodities other than loan
                    commodities.

    SEC. 1616. <<NOTE: 7 USC 7999.>> AVAILABILITY OF INCENTIVE PAYMENTS FOR
                CERTAIN PRODUCERS.

        (a) Incentive Payments Required.--Subject to subsection (b), the
    Secretary shall make available a total of $20,000,000 of funds of the
    Commodity Credit Corporation during the 2003 through 2005 crop years to
    provide incentive payments to producers of hard white wheat.
        (b) Conditions on Implementation.--The Secretary shall implement
    subsection (a)--
                (1) only with regard to production that meets minimum
            quality criteria; and
                (2) on not more than 2,000,000 acres or the equivalent
            volume of production.

        (c) Demand for Wheat.--To be eligible to obtain an incentive payment
    under subsection (a), a producer shall demonstrate to the satisfaction
    of the Secretary that buyers and end-users are available for the wheat
    to be covered by the incentive payment.

    SEC. 1617. <<NOTE: 7 USC 8000.>> RENEWED AVAILABILITY OF MARKET LOSS
                ASSISTANCE AND CERTAIN EMERGENCY ASSISTANCE TO PERSONS THAT
                FAILED TO RECEIVE ASSISTANCE UNDER EARLIER AUTHORITIES.

        (a) Authority to Provide Assistance.--The Secretary of Agriculture
    may use such funds of the Commodity Credit Corporation as are necessary
    to provide market loss assistance and other emergency assistance under a
    provision of law specified in subsection (c) to persons that, as
    determined by the Secretary)--
                (1) were eligible to receive the assistance under the
            provision of law; but
                (2) did not receive the assistance before October 1, 2001.

        (b) Limitation.--The amount of assistance provided under a provision
    of law specified in subsection (c) and this section to a person shall
    not exceed the amount of assistance the person would have been eligible
    to receive under the provision had the claim of the producer under the
    provision been timely resolved.
        (c) Covered Market Loss Assistance Authorities.--The following
    provisions of law are covered by this section:
                (1) Sections 1, 2, 3, 4, and 5 of Public Law 107-25 (115
            Stat. 201).

    [[Page 116 STAT. 223]]

                (2) Sections 805, 806, and 814 of the Agriculture, Rural
            Development, Food and Drug Administration, and Related Agencies
            Appropriations Act, 2001 (as enacted into law by Public Law 106-
            387; 114 Stat. 1549).
                (3) Sections 201, 202, 204(a), 204(d), 257, and 259 of the
            Agricultural Risk Protection Act of 2000 (Public Law 106-224; 7
            U.S.C. 1421 note).
                (4) Sections 802, 803(a), 804, and 805 of the Agriculture,
            Rural Development, Food and Drug Administration, and Related
            Agencies Appropriations Act, 2000 (Public Law 106-78; 113 Stat.
            1135).
                (5) The livestock indemnity program under the heading
            ``Commodity Credit Corporation Fund'' in chapter 1 of title I of
            the 1999 Emergency Supplemental Appropriations Act (Public 106-
            31; 113 Stat. 59).
                (6) Section 1111(a) of the Agriculture, Rural Development,
            Food and Drug Administration, and Related Agencies
            Appropriations Act, 1999 (as contained in section 101(a) of
            division A of Public Law 105-277; 112 Stat. 2681-44).

    SEC. 1618. <<NOTE: 7 USC 8001.>>  PRODUCER RETENTION OF ERRONEOUSLY PAID
                LOAN DEFICIENCY PAYMENTS AND MARKETING LOAN GAINS.

        Notwithstanding any other provision of law, the Secretary and the
    Commodity Credit Corporation shall not require producers in Erie County,
    Pennsylvania, to repay loan deficiency payments and marketing loan gains
    erroneously paid or determined to have been earned by the Commodity
    Credit Corporation for certain 1998 and 1999 crops under subtitle C of
    title I of the Federal Agriculture Improvement and Reform Act of 1996 (7
    U.S.C. 7231 et seq.). In the case of a producer who has already made the
    repayment on or before the date of the enactment of this Act, the
    Commodity Credit Corporation shall reimburse the producer for the full
    amount of the repayment.

                             TITLE II--CONSERVATION

                        Subtitle A--Conservation Security

    SEC. 2001. CONSERVATION SECURITY PROGRAM.

        (a) In General.--Subtitle D of title XII of the Food Security Act of
    1985 (16 U.S.C. 3830 et seq.) is amended by inserting after chapter 1
    the following:

           ``CHAPTER 2--CONSERVATION SECURITY AND FARMLAND PROTECTION

                  ``Subchapter A--Conservation Security Program

    ``SEC. 1238. <<NOTE: 16 USC 3838.>>  DEFINITIONS.

        ``In this subchapter:
                ``(1) Base payment.--The term `base payment' means an amount
            that is--
                        ``(A) determined in accordance with the rate
                    described in section 1238C(b)(1)(A); and

    [[Page 116 STAT. 224]]

                        ``(B) paid to a producer under a conservation
                    security contract in accordance with clause (i) of
                    subparagraph (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 given the term under section
            343(a) of the Consolidated Farm and Rural Development Act (7
            U.S.C. 1991(a)).
                ``(3) Conservation practice.--The term `conservation
            practice' means a conservation farming practice described in
            section 1238A(d)(4) that--
                        ``(A) requires planning, implementation, management,
                    and maintenance; and
                        ``(B) promotes 1 or more of the purposes described
                    in section 1238A(a).
                ``(4) Conservation security contract.--The term
            `conservation security contract' means a contract described in
            section 1238A(e).
                ``(5) Conservation security plan.--The term `conservation
            security plan' means a plan described in section 1238A(c).
                ``(6) Conservation security program.--The term `conservation
            security program' means the program established under section
            1238A(a).
                ``(7) Enhanced payment.--The term `enhanced payment' means
            the amount paid to a producer under a conservation security
            contract that is equal to the amount described in section
            1238C(b)(1)(C)(iii).
                ``(8) Nondegradation standard.--The term `nondegradation
            standard' means the level of measures required to adequately
            protect, and prevent degradation of, 1 or more natural
            resources, as determined by the Secretary in accordance with the
            quality criteria described in handbooks of the Natural Resources
            Conservation Service.
                ``(9) Producer.--
                        ``(A) In general.--The term `producer' means an
                    owner, operator, landlord, tenant, or sharecropper
                    that--
                              ``(i) shares in the risk of producing any crop
                          or livestock; and
                              ``(ii) is entitled to share in the crop or
                          livestock available for marketing from a farm (or
                          would have shared had the crop or livestock been
                          produced).
                        ``(B) Hybrid seed growers.--In determining whether a
                    grower of hybrid seed is a producer, the Secretary shall
                    not take into consideration the existence of a hybrid
                    seed contract.
                ``(10) Resource-conserving crop rotation.--The term
            `resource-conserving crop rotation' means a crop rotation that--
                        ``(A) includes at least 1 resource-conserving crop
                    (as defined by the Secretary);
                        ``(B) reduces erosion;
                        ``(C) improves soil fertility and tilth;
                        ``(D) interrupts pest cycles; and
                        ``(E) in applicable areas, reduces depletion of soil
                    moisture (or otherwise reduces the need for irrigation).
                ``(11) 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

    [[Page 116 STAT. 225]]

            land, water, and other natural resources, as defined in
            accordance with the technical guide of the Natural Resources
            Conservation Service.
                ``(12) Secretary.--The term `Secretary' means the Secretary
            of Agriculture, acting through the Chief of the Natural
            Resources Conservation Service.
                ``(13) Tier i conservation security contract.--The term
            `Tier I conservation security contract' means a contract
            described in section 1238A(d)(5)(A).
                ``(14) Tier ii conservation security contract.--The term
            `Tier II conservation security contract' means a contract
            described in section 1238A(d)(5)(B).
                ``(15) Tier iii conservation security contract.--The term
            `Tier III conservation security contract' means a contract
            described in section 1238A(d)(5)(C).

    ``SEC. 1238A. <<NOTE: 16 USC 3838a.>>  CONSERVATION SECURITY PROGRAM.

        ``(a) In General.--The Secretary shall establish and, for each of
    fiscal years 2003 through 2007, carry out a conservation security
    program to assist producers of agricultural operations in promoting, as
    is applicable with respect to land to be enrolled in the program,
    conservation and improvement of the quality of soil, water, air, energy,
    plant and animal life, and any other conservation purposes, as
    determined by the Secretary.
        ``(b) Eligibility.--
                ``(1) Eligible producers.--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.--Except as provided in paragraph (3),
            private agricultural land (including cropland, grassland,
            prairie land, improved pasture land, and rangeland), land under
            the jurisdiction of an Indian tribe (as defined by the
            Secretary), and forested land that is an incidental part of an
            agricultural operation shall be eligible for enrollment in the
            conservation security program.
                ``(3) Exclusions.--
                        ``(A) 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.
                        ``(B) 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.
                        ``(C) Grassland reserve program.--Land enrolled in
                    the grassland reserve program established under
                    subchapter C of chapter 2 shall not be eligible for
                    enrollment in the conservation security program.
                        ``(D) Conversion to cropland.--Land that is used for
                    crop production after the date of enactment of this
                    subchapter that had not been planted, considered to be

    [[Page 116 STAT. 226]]

                    planted, or devoted to crop production for at least 4 of
                    the 6 years preceding that date (except for land
                    enrolled in the conservation reserve program under
                    subchapter B of chapter 1) or that has been maintained
                    using long-term crop rotation practices, as determined
                    by the Secretary, shall not be the basis for any payment
                    under the conservation security program.
                ``(4) Economic uses.--The Secretary shall permit a producer
            to implement, with respect to all eligible land covered by a
            conservation security plan, economic uses that--
                        ``(A) maintain the agricultural nature of the land;
                    and
                        ``(B) are consistent with the natural resource and
                    conservation objectives of the conservation security
                    program.

        ``(c) Conservation Security Plans.--
                ``(1) In general.--A conservation security plan shall--
                        ``(A) identify the designated land and resources to
                    be conserved under the conservation security plan;
                        ``(B) describe the tier of conservation security
                    contract, 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
                        ``(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.
                ``(2) Resource planning.--The Secretary may assist producers
            that enter into conservation security contracts in developing a
            comprehensive, long-term strategy for improving and maintaining
            all natural resources of the agricultural operation of the
            producer.

        ``(d) Conservation Contracts and Practices.--
                ``(1) In general.--
                        ``(A) Establishment of tiers.--The Secretary shall
                    establish, and offer to eligible producers, 3 tiers of
                    conservation contracts under which a payment under this
                    subchapter may be received.
                        ``(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.
                              ``(ii) Determination.--In determining the
                          eligibility of a practice described in clause (i),
                          the Secretary shall require, to the maximum extent
                          practicable, that the lowest cost alternatives be
                          used to fulfill the purposes of the conservation
                          security plan, as determined by the Secretary.
                ``(2) On-farm research and demonstration or pilot testing.--
            With respect to land enrolled in the conservation security
            program, the Secretary may approve a conservation security plan
            that includes--
                        ``(A) on-farm conservation research and
                    demonstration activities; and
                        ``(B) pilot testing of new technologies or
                    innovative conservation practices.

    [[Page 116 STAT. 227]]

                ``(3) Use of handbook and guides; state and local
            conservation concerns.--
                        ``(A) Use of handbook and guides.--In determining
                    eligible conservation practices and the criteria for
                    implementing or maintaining the conservation practices
                    under the conservation security program, the Secretary
                    shall use the National Handbook of Conservation
                    Practices of the Natural Resources Conservation Service.
                        ``(B) State and local conservation priorities.--The
                    conservation priorities of a State or locality in which
                    an agricultural operation is situated shall be
                    determined by the State Conservationist, in consultation
                    with--
                              ``(i) the State technical committee
                          established under subtitle G; and
                              ``(ii) local agricultural producers and
                          conservation working groups.
                ``(4) Conservation practices.--Conservation practices that
            may be implemented by a producer under a conservation security
            contract (as appropriate for the agricultural operation of a
            producer) include--
                        ``(A) nutrient management;
                        ``(B) integrated pest management;
                        ``(C) water conservation (including through
                    irrigation) and water quality management;
                        ``(D) grazing, pasture, and rangeland management;
                        ``(E) soil conservation, quality, and residue
                    management;
                        ``(F) invasive species management;
                        ``(G) fish and wildlife habitat conservation,
                    restoration, and management;
                        ``(H) air quality management;
                        ``(I) energy conservation measures;
                        ``(J) biological resource conservation and
                    regeneration;
                        ``(K) contour farming;
                        ``(L) strip cropping;
                        ``(M) cover cropping;
                        ``(N) controlled rotational grazing;
                        ``(O) resource-conserving crop rotation;
                        ``(P) conversion of portions of cropland from a
                    soil-depleting use to a soil-conserving use, including
                    production of cover crops;
                        ``(Q) partial field conservation practices;
                        ``(R) native grassland and prairie protection and
                    restoration; and
                        ``(S) any other conservation practices that the
                    Secretary determines to be appropriate and comparable to
                    other conservation practices described in this
                    paragraph.
                ``(5) Tiers.--Subject to paragraph (6), to carry out this
            subsection, the Secretary shall establish the following 3 tiers
            of conservation contracts:
                        ``(A) Tier i conservation security contracts.--A
                    conservation security plan for land enrolled under a
                    Tier I conservation security contract shall--
                              ``(i) be for a period of 5 years; and
                              ``(ii) include conservation practices
                          appropriate for the agricultural operation, that,
                          at a minimum (as determined by the Secretary)--

    [[Page 116 STAT. 228]]

                                        ``(I) address at least 1 significant
                                    resource of concern for the enrolled
                                    portion of the agricultural operation at
                                    a level that meets the appropriate
                                    nondegradation standard; and
                                        ``(II) cover active management of
                                    conservation practices that are
                                    implemented or maintained under the
                                    conservation security contract.
                        ``(B) Tier ii conservation security contracts.--A
                    conservation security plan for land enrolled under a
                    Tier II conservation security contract shall--
                              ``(i) be for a period of not less than 5 nor
                          more than 10 years, as determined by the producer;
                              ``(ii) include conservation practices
                          appropriate for the agricultural operation, that,
                          at a minimum--
                                        ``(I) address at least 1 significant
                                    resource of concern for the entire
                                    agricultural operation, as determined by
                                    the Secretary, at a level that meets the
                                    appropriate nondegradation standard; and
                                        ``(II) cover active management of
                                    conservation practices that are
                                    implemented or maintained under the
                                    conservation security contract.
                        ``(C) Tier iii conservation security contracts.--A
                    conservation security plan for land enrolled under a
                    Tier III conservation security contract shall--
                              ``(i) be for a period of not less than 5 nor
                          more than 10 years, as determined by the producer;
                          and
                              ``(ii) include conservation practices
                          appropriate for the agricultural operation that,
                          at a minimum--
                                        ``(I) apply a resource management
                                    system that meets the appropriate
                                    nondegradation standard for all
                                    resources of concern of the entire
                                    agricultural operation, as determined by
                                    the Secretary; and
                                        ``(II) cover active management of
                                    conservation practices that are
                                    implemented or maintained under the
                                    conservation security contract.
                ``(6) Minimum requirements.--The minimum requirements for
            each tier of conservation contracts implemented under paragraph
            (5) shall be determined and approved by the Secretary.

        ``(e) Conservation Security Contracts.--
                ``(1) 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.
                ``(2) Modification.--
                        ``(A) Optional modifications.--A producer may apply
                    to the Secretary for a modification of the conservation
                    security contract of the producer that is consistent
                    with the purposes of the conservation security program.
                        ``(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 the Secretary determines that a change made to
                          the type, size, management, or other aspect of the
                          agricultural operation of the producer would,

    [[Page 116 STAT. 229]]

                          without the modification of the contract,
                          significantly interfere with achieving the
                          purposes of the conservation security program.
                              ``(ii) Participation in other programs.--If
                          appropriate payment reductions and other
                          adjustments (as determined by the Secretary) are
                          made to the conservation security contract of a
                          producer, the producer may--
                                        ``(I) simultaneously participate
                                    in--
                                                ``(aa) the conservation
                                            security program;
                                                ``(bb) the conservation
                                            reserve program under subchapter
                                            B of chapter 1; and
                                                ``(cc) the wetlands reserve
                                            program under subchapter C of
                                            chapter 1; and
                                        ``(II) may remove land enrolled in
                                    the conservation security program for
                                    enrollment in a program described in
                                    item (bb) or (cc) of subclause (I).
                ``(3) Termination.--
                        ``(A) Optional termination.--A producer may
                    terminate a conservation security contract and retain
                    payments received under the conservation security
                    contract, if--
                              ``(i) 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
                              ``(ii) the Secretary determines that
                          termination of the contract would not defeat the
                          purposes of the conservation security plan of the
                          producer.
                        ``(B) Other termination.--A producer that is
                    required to modify a conservation security contract
                    under paragraph (2)(B)(i) 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
                          has fully complied with the terms and conditions
                          of the conservation security contract before
                          termination of the contract, as determined by the
                          Secretary.
                ``(4) Renewal.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), at the option of a producer, the
                    conservation security contract of the producer may be
                    renewed for an additional period of not less than 5 nor
                    more than 10 years.
                        ``(B) Tier i renewals.--In the case of a Tier I
                    conservation security contract of a producer, the
                    producer may renew the contract only if the producer
                    agrees--
                              ``(i) to apply additional conservation
                          practices that meet the nondegradation standard on
                          land already enrolled in the conservation security
                          program; or
                              ``(ii) to adopt new conservation practices
                          with respect to another portion of the
                          agricultural operation that address resource
                          concerns and meet the nondegradation standard
                          under the terms of the Tier I conservation
                          security contract.

        ``(f) Noncompliance Due to Circumstances Beyond the Control of
    Producers.--The Secretary shall include in the conservation security
    contract a provision, and may permit modification

    [[Page 116 STAT. 230]]

    of a conservation security contract under subsection (e)(1), 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. <<NOTE: 16 USC 3838b.>>  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 program; 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 payments 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. <<NOTE: 16 USC 3838c.>> DUTIES OF THE SECRETARY.

        ``(a) Timing of Payments.--The Secretary shall make payments under a
    conservation security contract as soon as practicable after October 1 of
    each fiscal year.
        ``(b) Annual Payments.--
                ``(1) Criteria for determining amount of payments.--
                        ``(A) Base payment.--A base payment under this
                    paragraph shall be (as determined by the Secretary)--
                              ``(i) the average national per-acre rental
                          rate for a specific land use during the 2001 crop
                          year; or
                              ``(ii) another appropriate rate for the 2001
                          crop year that ensures regional equity.
                        ``(B) Payments.--A payment for a conservation
                    practice under this paragraph shall be determined in
                    accordance with subparagraphs (C) through (E).
                        ``(C) Tier i conservation security contracts.--The
                    payment for a Tier I conservation security contract
                    shall consist of the total of the following amounts:
                              ``(i) An amount equal to 5 percent of the
                          applicable base payment for land covered by the
                          contract.
                              ``(ii) An amount that does not exceed 75
                          percent (or, in the case of a beginning farmer or
                          rancher, 90 percent) of the average county costs
                          of practices

    [[Page 116 STAT. 231]]

                          for the 2001 crop year that are included in the
                          conservation security contract, as determined by
                          the Secretary, including the costs of--
                                        ``(I) the adoption of new
                                    management, vegetative, and land-based
                                    structural practices;
                                        ``(II) the maintenance of existing
                                    land management and vegetative
                                    practices; and
                                        ``(III) the maintenance of existing
                                    land-based structural practices that are
                                    approved by the Secretary but not
                                    already covered by a Federal or State
                                    maintenance requirement.
                              ``(iii) An enhanced payment that is determined
                          by the Secretary in a manner that ensures equity
                          across regions of the United States, if the
                          producer--
                                        ``(I) implements or maintains
                                    multiple conservation practices that
                                    exceed minimum requirements for the
                                    applicable tier of participation
                                    (including practices that involve a
                                    change in land use, such as resource-
                                    conserving crop rotation, managed
                                    rotational grazing, or conservation
                                    buffer practices);
                                        ``(II) addresses local conservation
                                    priorities in addition to resources of
                                    concern for the agricultural operation;
                                        ``(III) participates in an on-farm
                                    conservation research, demonstration, or
                                    pilot project;
                                        ``(IV) participates in a watershed
                                    or regional resource conservation plan
                                    that involves at least 75 percent of
                                    producers in a targeted area; or
                                        ``(V) carries out assessment and
                                    evaluation activities relating to
                                    practices included in a conservation
                                    security plan.
                        ``(D) Tier ii conservation security contracts.--The
                    payment for a Tier II conservation security contract
                    shall consist of the total of the following amounts:
                              ``(i) An amount equal to 10 percent of the
                          applicable base payment for land covered by the
                          conservation security contract.
                              ``(ii) An amount that does not exceed 75
                          percent (or, in the case of a beginning farmer or
                          rancher, 90 percent) of the average county cost of
                          adopting or maintaining practices for the 2001
                          crop year that are included in the conservation
                          security contract, as described in subparagraph
                          (C)(ii).
                              ``(iii) An enhanced payment that is determined
                          in accordance with subparagraph (C)(iii).
                        ``(E) Tier iii conservation security contracts.--The
                    payment for a Tier III conservation security contract
                    shall consist of the total of the following amounts:
                              ``(i) An amount equal to 15 percent of the
                          base payment for land covered by the conservation
                          security contract.
                              ``(ii) An amount that does not exceed 75
                          percent (or, in the case of a beginning farmer or
                          rancher, 90 percent) of the average county cost of
                          adopting or maintaining practices for the 2001
                          crop year that

    [[Page 116 STAT. 232]]

                          are included in the conservation security
                          contract, as described in subparagraph (C)(ii).
                              ``(iii) An enhanced payment that is determined
                          in accordance with subparagraph (C)(iii).
                ``(2) Limitation on payments.--
                        ``(A) In general.--Subject to paragraphs (1) and
                    (3), the Secretary shall make an annual payment,
                    directly or indirectly, to an individual or entity
                    covered by a 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, $45,000.
                        ``(B) Limitation on base 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 clause (i) of paragraph (1)(C), (1)(D), or (1)(E), as
                    appropriate, in an amount that exceeds--
                              ``(i) in the case of Tier I contracts, 25
                          percent of the applicable payment limitation; or
                              ``(ii) in the case of Tier II contracts and
                          Tier III contracts, 30 percent of the applicable
                          payment limitation.
                        ``(C) Other usda payments.--A producer shall not
                    receive payments under the conservation security program
                    and any other conservation program administered by the
                    Secretary for the same practices on the same land.
                        ``(D) Commensurate share.--To be eligible to receive
                    a payment under this subchapter, 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.
                ``(3) Equipment or facilities.--A payment to a producer
            under this subchapter shall not be provided for--
                        ``(A) construction or maintenance of animal waste
                    storage or treatment facilities or associated waste
                    transport or transfer devices for animal feeding
                    operations; or
                        ``(B) the purchase or maintenance of equipment or a
                    non-land based structure that is not integral to a land-
                    based practice, as determined by the Secretary.

        ``(c) Minimum Practice Requirement.--In determining a payment under
    subsection (b) for a producer that receives a payment under another
    program administered by the Secretary that is contingent on complying
    with requirements under subtitle B or C (relating to the use of highly
    erodible land or wetland), a payment under this subchapter on land
    subject to those requirements shall be for practices only to the extent
    that the practices exceed minimum requirements for the producer under
    those subtitles, as determined by the Secretary.
        ``(d) Regulations.--The Secretary shall promulgate regulations
    that--

    [[Page 116 STAT. 233]]

                ``(1) provide for adequate safeguards to protect the
            interests of tenants and sharecroppers, including provision for
            sharing payments, on a fair and equitable basis; and
                ``(2) prescribe such other rules as the Secretary determines
            to be necessary to ensure a fair and reasonable application of
            the limitations established under subsection (b).

        ``(e) 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 <<NOTE: Deadline.>> 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, and assumed by, the
            transferee.

        ``(f) Enrollment Procedure.--In entering into conservation security
    contracts with producers under this subchapter, the Secretary shall not
    use competitive bidding or any similar procedure.
        ``(g) Technical Assistance.--For each of fiscal years 2003 through
    2007, the Secretary shall provide technical assistance to producers for
    the development and implementation of conservation security contracts,
    in an amount not to exceed 15 percent of amounts expended for the fiscal
    year.''.
        (b) Regulations.-- <<NOTE: Deadline. 16 USC 3838 note.>> Not later
    than 270 days after the date of enactment of this Act, the Secretary of
    Agriculture shall promulgate regulations implementing the amendment made
    by subsection (a).

    SEC. 2002. CONSERVATION COMPLIANCE.

        (a) Highly Erodible Land.--Section 1211 of the Food Security Act of
    1985 (16 U.S.C. 3811) is amended--
                (1) by striking the section heading and all that follows
            through ``Except as provided in'' and inserting the following:

    ``SEC. 1211. PROGRAM INELIGIBILITY.

        ``(a) In General.--Except as provided in''; and
                (2) by adding at the end the following:

        ``(b) Highly Erodible Land.--The Secretary shall have, and shall not
    delegate to any private person or entity, authority to determine whether
    a person has complied with this subtitle.''.
        (b) Wetland.--Section 1221 of the Food Security Act of 1985 (16
    U.S.C. 3821) is amended by adding at the end the following:
        ``(e) Wetland.--The Secretary shall have, and shall not delegate to
    any private person or entity, authority to determine whether a person
    has complied with this subtitle.''.

    SEC. 2003. PARTNERSHIPS AND COOPERATION.

        Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843) is
    amended by adding at the end the following:
        ``(f) Partnerships and Cooperation.--
                ``(1) In general.--In carrying out any program under
            subtitle D, the Secretary may use resources provided under that
            subtitle to enter into stewardship agreements with State and
            local agencies, Indian tribes, and nongovernmental organizations
            and to designate special projects, as recommended by the State
            Conservationist, after consultation with the State

    [[Page 116 STAT. 234]]

            technical committee, to enhance technical and financial
            assistance provided to owners, operators, and producers to
            address natural resource issues related to agricultural
            production.
                ``(2) Criteria for special projects.--The purposes of
            special projects carried out under this subsection shall be to
            encourage--
                        ``(A) producers to cooperate in the installation and
                    maintenance of conservation practices that affect
                    multiple agricultural operations;
                        ``(B) the sharing of information and technical and
                    financial resources among producers;
                        ``(C) cumulative conservation benefits in geographic
                    areas; and
                        ``(D) the development and demonstration of
                    innovative conservation methods.
                ``(3) Incentives.--To realize the purposes of the special
            projects under paragraph (1), the Secretary may provide special
            incentives to owners, operators, and producers participating in
            the special projects to encourage partnerships and enrollments
            of optimal conservation value.
                ``(4) Flexibility.--
                        ``(A) In general.--The Secretary may enter into
                    stewardship agreements with States (including State
                    agencies and units of local government), Indian tribes,
                    and nongovernmental organizations that have a history of
                    working with agricultural producers 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) conservation enhancement and long-term
                          productivity of the natural resource base; and
                              ``(ii) the purposes and requirements of this
                          title.
                        ``(B) Plan.--Each party to a stewardship agreement
                    under subparagraph (A) shall submit to the Secretary,
                    for approval by the Secretary, a special project area
                    plan for each program to be carried out by the party
                    that includes--
                              ``(i) a description of the requested resources
                          and adjustments to program implementation
                          (including a description of how those adjustments
                          will accelerate the achievement of conservation
                          benefits);
                              ``(ii) an analysis of the contribution those
                          adjustments will make to the effectiveness of
                          programs in achieving the purposes of the special
                          project;
                              ``(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; and
                              ``(v) a plan for the evaluation of progress
                          toward the purposes of the special project.
                ``(5) Funding.--
                        ``(A) In general.--In addition to resources from
                    programs under subtitle D, subject to subparagraph (B),
                    the Secretary shall use not more than 5 percent of the
                    funds

    [[Page 116 STAT. 235]]

                    made available for each fiscal year under section
                    1241(a) to carry out activities that are authorized
                    under conservation programs under subtitle D.
                        ``(B) Unused funding.--Any funds made available for
                    a fiscal year under subparagraph (A) that are not
                    obligated by April 1 of the fiscal year may be used to
                    carry out other activities under conservation programs
                    under subtitle D during the fiscal year in which the
                    funding becomes available.''.

    SEC. 2004. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

        (a) In General.--Subtitle E of title XII of the Food Security Act of
    1985 (16 U.S.C. 3841 et seq.) is amended by adding at the end the
    following:

    ``SEC. 1244. <<NOTE: 16 USC 3844.>>  ADMINISTRATIVE REQUIREMENTS FOR
                CONSERVATION PROGRAMS.

        ``(a) 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 and ranching opportunities; and
                ``(2) enhance environmental stewardship over the long term.

        ``(b) 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
                    552(b)(3) of title 5, United States Code, except as
                    provided in subparagraph (C) and paragraph (2),
                    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 by the Secretary) outside the Department
                          of Agriculture.
                        ``(B) Information.--The information referred to in
                    subparagraph (A) is information--
                              ``(i) provided to the Secretary or a
                          contractor of the Secretary (including information
                          provided under subtitle D) 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 (within the meaning
                          of section 552(b)(4) of title 5, United States
                          Code) to the agricultural operation or land that
                          is a part of an agricultural operation of the
                          owner, operator, or producer.
                        ``(C) Exception.--Nothing in this section affects
                    the availability of payment information (including
                    payment amounts and the names and addresses of
                    recipients of payments) under section 552 of title 5,
                    United States Code.
                ``(2) Exceptions.--

    [[Page 116 STAT. 236]]

                        ``(A) Release and disclosure for enforcement.--The
                    Secretary may release or disclose to the Attorney
                    General information covered by paragraph (1) to the
                    extent necessary to enforce the natural resources
                    conservation programs referred to in paragraph
                    (1)(B)(i).
                        ``(B) Disclosure to cooperating persons and
                    agencies.--
                              ``(i) In general.--The Secretary may release
                          or disclose information covered by paragraph (1)
                          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)(B)(i) or collecting
                          information from 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 data gathering sites.
                        ``(C) Statistical and aggregate information.--
                    Information covered by paragraph (1) may be disclosed to
                    the public if the information has been transformed into
                    a statistical or aggregate form without naming any--
                              ``(i) individual owner, operator, or producer;
                          or
                              ``(ii) specific data gathering site.
                        ``(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).
                              ``(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.
                ``(3) 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.
                ``(4) Data collection, disclosure, and review.--Nothing in
            this subsection--
                        ``(A) affects any procedure for data collection or
                    disclosure through the National Resources Inventory; or
                        ``(B) limits the authority of Congress or the
                    General Accounting Office to review information
                    collected or disclosed under this subsection.''.

        (b) National Resources Inventory.--Section 1770 of the Food Security
    Act of 1985 (7 U.S.C. 2276) is amended--
                (1) in subsection (a)--
                        (A) in paragraph (1), by striking ``or'' at the end;
                        (B) in paragraph (2), by striking the period and
                    inserting ``; or''; and
                        (C) by adding at the end the following:

    [[Page 116 STAT. 237]]

                ``(3) in the case of information collected under the
            authority described in subsection (d)(12), disclose the
            information to any person or any Federal, State, local, or
            tribal agency outside the Department of Agriculture, unless the
            information has been converted into a statistical or aggregate
            form that does not allow the identification of the person that
            supplied particular information.''; and
                (2) in subsection (d)--
                        (A) in paragraph (9), by striking ``or'' at the end;
                        (B) in paragraph (11), by striking the period and
                    inserting ``; or''; and
                        (C) by adding at the end the following:
                ``(12) section 302 of the Rural Development Act of 1972 (7
            U.S.C. 1010a) regarding the authority to collect data for the
            National Resources Inventory.''.

    SEC. 2005. <<NOTE: 16 USC 3801 note.>>  REFORM AND ASSESSMENT OF
                CONSERVATION PROGRAMS.

        (a) In General.--The Secretary of Agriculture shall develop a plan
    to coordinate land retirement and agricultural working land conservation
    programs that are administered by the Secretary to achieve the goals
    of--
                (1) eliminating redundancy;
                (2) streamlining program delivery; and
                (3) improving services provided to agricultural producers
            (including the reevaluation of the provision of technical
            assistance).

        (b) Report.--Not <<NOTE: Deadline.>> later than December 31, 2005,
    the Secretary of Agriculture shall submit to the Committee on
    Agriculture of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate, a report that
    describes--
                (1) the plan developed under subsection (a); and
                (2) the means by which the Secretary intends to achieve the
            goals described in subsection (a).

    SEC. 2006. CONFORMING AMENDMENTS.

        (a) Chapter 1 of subtitle D of title XII of the Food Security Act of
    1985 (16 U.S.C. 3830 et seq.) is amended by striking the chapter heading
    and inserting the following:

         ``CHAPTER 1--COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM''.

        (b) Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830)
    is amended--
                (1) in the section heading, by striking ``environmental
            conservation acreage reserve program'' and inserting
            ``comprehensive conservation enhancement program'';
                (2) in subsection (a)(1), by striking ``an environmental
            conservation acreage reserve program'' and inserting ``a
            comprehensive conservation enhancement program'';
                (3) by striking subsection (c); and
                (4) by striking ``ECARP'' each place it appears and
            inserting ``CCEP''.

        (c) Section 1230A of the Food Security Act of 1985 (16 U.S.C. 3830a)
    is repealed.
        (d) Section 1243 of the Food Security Act of 1985 (16 U.S.C. 3843)
    is amended by striking the section heading and inserting the following:

    [[Page 116 STAT. 238]]

    ``SEC. 1243. ADMINISTRATION OF CCEP.''.

                        Subtitle B--Conservation Reserve

    SEC. 2101. CONSERVATION RESERVE PROGRAM.

        (a) In General.--Subchapter B of chapter 1 of subtitle D of title
    XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) is amended
    to read as follows:

                      ``Subchapter B--Conservation Reserve

    ``SEC. 1231. <<NOTE: 16 USC 3831.>>  CONSERVATION RESERVE.

        ``(a) In General.--Through the 2007 calendar year, the Secretary
    shall formulate and carry out a conservation reserve program under which
    land is enrolled through the use of contracts to assist owners and
    operators of land specified in subsection (b) to conserve and improve
    the soil, water, and wildlife resources of such land.
        ``(b) Eligible Land.--The Secretary may include in the program
    established under this subchapter--
                ``(1) highly erodible cropland that--
                        ``(A)(i) if permitted to remain untreated could
                    substantially reduce the agricultural production
                    capability for future generations; or
                        ``(ii) cannot be farmed in accordance with a plan
                    that complies with the requirements of subtitle B; and
                        ``(B) the Secretary determines had a cropping
                    history or was considered to be planted for 4 of the 6
                    years preceding the date of enactment of the Farm
                    Security and Rural Investment Act of 2002 (except for
                    land enrolled in the conservation reserve program as of
                    that date).
                ``(2) marginal pasture land converted to wetland or
            established as wildlife habitat prior to November 28, 1990;
                ``(3) marginal pasture land to be devoted to appropriate
            vegetation, including trees, in or near riparian areas, or
            devoted to similar water quality purposes (including marginal
            pastureland converted to wetland or established as wildlife
            habitat);
                ``(4) cropland that is otherwise ineligible if the Secretary
            determines that--
                        ``(A) if permitted to remain in agricultural
                    production, the land would--
                              ``(i) contribute to the degradation of soil,
                          water, or air quality; or
                              ``(ii) pose an on-site or off-site
                          environmental threat to soil, water, or air
                          quality;
                        ``(B) the land is a--
                              ``(i) newly-created, permanent grass sod
                          waterway; or
                              ``(ii) a contour grass sod strip established
                          and maintained as part of an approved conservation
                          plan;
                        ``(C) the land will be devoted to newly established
                    living snow fences, permanent wildlife habitat,
                    windbreaks, shelterbelts, or filterstrips devoted to
                    trees or shrubs; or
                        ``(D) the land poses an off-farm environmental
                    threat, or a threat of continued degradation of
                    productivity due to soil salinity, if permitted to
                    remain in production; and

    [[Page 116 STAT. 239]]

                        ``(E) enrollment of the land would facilitate a net
                    savings in groundwater or surface water resources of the
                    agricultural operation of the producer;
                ``(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, if--
                        ``(A) the land is enrolled as part of the buffer;
                    and
                        ``(B) the remainder of the field is--
                              ``(i) infeasible to farm; and
                              ``(ii) enrolled at regular rental rates.

        ``(c) Planting Status of Certain Land.--For purposes of determining
    the eligibility of land to be placed in the conservation reserve
    established under this subchapter, land shall be considered to be
    planted to an agricultural commodity during a crop year if--
                ``(1) during the crop year, the land was devoted to a
            conserving use; or
                ``(2)(A) during the crop year or during any of the 2 years
            preceding the crop year, the land was enrolled in the water bank
            program; and
                ``(B) the contract of the owner or operator of the cropland
            expired or will expire in calendar year 2000, 2001, or 2002.

        ``(d) Maximum Enrollment.--The Secretary may maintain up to
    39,200,000 acres in the conservation reserve at any 1 time during the
    2002 through 2007 calendar years (including contracts extended by the
    Secretary pursuant to section 1437(c) of the Food, Agriculture,
    Conservation, and Trade Act of 1990 ( 16 U.S.C. 3831 note; Public Law
    101-624)).
        ``(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 land.--
                        ``(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 the land may, within the
                    limitations prescribed under this section, specify the
                    duration of the contract.
                        ``(B) Hardwood trees.--In the case of land that is
                    devoted to hardwood trees under a contract entered into
                    under this subchapter prior to October 1, 1990, the
                    Secretary may extend the contract for a term of not to
                    exceed 5 years, as agreed to by the owner or operator of
                    such land and the Secretary.
                ``(3) 1-year extension.--In the case of a contract described
            in paragraph (1) the term of which expires during calendar year
            2002, an owner or operator of land enrolled under the contract
            may extend the contract for 1 additional year.

        ``(f) Conservation Priority Areas.--
                ``(1) Designation.--On application by the appropriate State
            agency, the Secretary shall designate watershed areas of the
            Chesapeake Bay Region (Pennsylvania, Maryland, and Virginia),
            the Great Lakes Region, the Long Island Sound Region, and other
            areas of special environmental sensitivity as conservation
            priority areas.

    [[Page 116 STAT. 240]]

                ``(2) Eligible watersheds.--Watersheds eligible for
            designation under this subsection shall include areas with
            actual and significant adverse water quality or habitat impacts
            related to agricultural production activities.
                ``(3) Expiration.--Conservation priority area designation
            under this subsection shall expire after 5 years, subject to
            redesignation, except that the Secretary may withdraw a
            watershed's designation--
                        ``(A) on application by the appropriate State
                    agency; or
                        ``(B) in the case of an area covered by this
                    subsection, if the Secretary finds that the area no
                    longer contains actual and significant adverse water
                    quality or habitat impacts related to agricultural
                    production activities.
                ``(4) Duty of secretary.--In carrying out this subsection,
            the Secretary shall attempt to maximize water quality and
            habitat benefits in the watersheds described in paragraph (1) by
            promoting a significant level of enrollment of land within the
            watersheds in the program under this subchapter by whatever
            means the Secretary determines are appropriate and consistent
            with the purposes of this subchapter.

        ``(g) Multi-Year Grasses and Legumes.--For purposes of this
    subchapter, alfalfa and other multi-year grasses and legumes in a
    rotation practice, approved by the Secretary, shall be considered
    agricultural commodities.
        ``(h) Pilot Program for Enrollment of Wetland and Buffer Acreage in
    Conservation Reserve.--
                ``(1) Program.--
                        ``(A) In general.--During the 2002 through 2007
                    calendar years, the Secretary shall carry out a program
                    in each State under which the Secretary shall include
                    eligible acreage described in paragraph (2) in the
                    program established under this subchapter.
                        ``(B) Participation among states.-The Secretary
                    shall ensure, to the maximum extent practicable, that
                    owners and operators in each State have an equitable
                    opportunity to participate in the pilot program
                    established under this subsection.
                ``(2) Eligible acreage.--
                        ``(A) In general.--Subject to subparagraphs (B)
                    through (D), an owner or operator may enroll in the
                    conservation reserve under this subsection--
                              ``(i) a wetland (including a converted wetland
                          described in section 1222(b)(1)(A)) that was
                          cropped during at least 3 of the immediately
                          preceding 10 crop years; and
                              ``(ii) buffer acreage that--
                                        ``(I) is contiguous to the wetland
                                    described in clause (i);
                                        ``(II) is used to protect the
                                    wetland; and
                                        ``(III) is of such width as the
                                    Secretary determines is necessary to
                                    protect the wetland, taking into
                                    consideration and accommodating the
                                    farming practices (including the
                                    straightening of boundaries to
                                    accommodate machinery) used with respect
                                    to the cropland that surrounds the
                                    wetland.

    [[Page 116 STAT. 241]]

                        ``(B) Exclusions.--An owner or operator may not
                    enroll in the conservation reserve under this
                    subsection--
                              ``(i) any wetland, or land on a floodplain,
                          that is, or is adjacent to, a perennial riverine
                          system wetland identified on the final national
                          wetland inventory map of the Secretary of the
                          Interior; or
                              ``(ii) in the case of an area that is not
                          covered by the final national inventory map, any
                          wetland, or land on a floodplain, that is adjacent
                          to a perennial stream identified on a 1-24,000
                          scale map of the United States Geological Survey.
                        ``(C) Program limitations.--
                              ``(i) In general.--The Secretary may enroll in
                          the conservation reserve under this subsection not
                          more than--
                                        ``(I) 100,000 acres in any 1 State
                                    referred to in paragraph (1); and
                                        ``(II) not more than a total of
                                    1,000,000 acres.
                              ``(ii) Relationship to program maximum.--
                          Subject to clause (iii), for the purposes of
                          subsection (d), any acreage enrolled in the
                          conservation reserve under this subsection shall
                          be considered acres maintained in the conservation
                          reserve.
                              ``(iii) Relationship to other enrolled
                          acreage.--Acreage enrolled under this subsection
                          shall not affect for any fiscal year the quantity
                          of--
                                        ``(I) acreage enrolled to establish
                                    conservation buffers as part of the
                                    program announced on March 24, 1998 (63
                                    Fed. Reg. 14109); or
                                        ``(II) acreage enrolled into the
                                    conservation reserve enhancement program
                                    announced on May 27, 1998 (63 Fed. Reg.
                                    28965).
                              ``(iv) Review; potential increase in
                          enrollment acreage.--Not <<NOTE: Deadline.>> later
                          than 3 years after the date of enactment of this
                          clause, the Secretary shall--
                                        ``(I) conduct a review of the
                                    program under this subsection with
                                    respect to each State that has enrolled
                                    land in the program; and
                                        ``(II) notwithstanding clause
                                    (i)(I), increase the number of acres
                                    that may be enrolled by a State under
                                    clause (i)(I) to not more than 150,000
                                    acres, as determined by the Secretary.
                        ``(D) Owner or operator limitations.--
                              ``(i) Wetland.--
                                        ``(I) In general.--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 10 contiguous acres,
                                    of which not more than 5 acres shall be
                                    eligible for payment.
                                        ``(II) Coverage.--All acres
                                    described in subclause (I) (including
                                    acres that are ineligible for payment)
                                    shall be covered by the conservation
                                    contract.
                              ``(ii) Buffer acreage.--The maximum size of
                          any buffer acreage described in subparagraph
                          (A)(ii) of an

    [[Page 116 STAT. 242]]

                          owner or operator enrolled in the conservation
                          reserve under this subsection shall be the greater
                          of--
                                        ``(I) 3 times the size of any
                                    wetland described in subparagraph (A)(i)
                                    to which the buffer acreage is
                                    contiguous; or
                                        ``(II) 150 feet on either side of
                                    the wetland.
                              ``(iii) Tracts.--The maximum size of any
                          eligible acreage described in subparagraph (A) in
                          a tract (as determined by the Secretary) of an
                          owner or operator enrolled in the conservation
                          reserve under this subsection shall be 40 acres.
                ``(3) Duties of owners and operators.--Under a contract
            entered into under this subsection, during the term of the
            contract, an owner or operator of a farm or ranch shall agree--
                        ``(A) to restore the hydrology of the wetland within
                    the eligible acreage to the maximum extent practicable,
                    as determined by the Secretary;
                        ``(B) to establish vegetative cover (which may
                    include emerging vegetation in water) on the eligible
                    acreage, as determined by the Secretary; and
                        ``(C) to carry out other duties described in section
                    1232.
                ``(4) Duties of the secretary.--
                        ``(A) In general.--Except as provided in
                    subparagraphs (B) and (C), in return for a contract
                    entered into by an owner or operator under this
                    subsection, the Secretary shall make payments and
                    provide assistance to the owner or operator in
                    accordance with sections 1233 and 1234.
                        ``(B) Continuous signup.--The Secretary shall use
                    continuous signup under section 1234(c)(2)(B) to
                    determine the acceptability of contract offers and the
                    amount of rental payments under this subsection.
                        ``(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.

        ``(i) Eligibility for Consideration.--On the expiration of a
    contract entered into under this subchapter, the land subject to the
    contract shall be eligible to be considered for reenrollment in the
    conservation reserve.
        ``(j) Balance of Natural Resource Purposes.--In determining the
    acceptability of contract offers under this subchapter, the Secretary
    shall ensure, to the maximum extent practicable, an equitable balance
    among the conservation purposes of soil erosion, water quality, and
    wildlife habitat.

    ``SEC. 1232. DUTIES OF OWNERS AND OPERATORS.

        ``(a) In General.--Under <<NOTE: 16 USC 3832.>> the terms of a
    contract entered into under this subchapter, during the term of the
    contract, an owner or operator of a farm or ranch shall agree--
                ``(1) to implement a plan approved by the local conservation
            district (or in an area not located within a conservation
            district, a plan approved by the Secretary) for converting
            eligible land normally devoted to the production of an
            agricultural commodity on the farm or ranch to a less intensive
            use (as defined by the Secretary), such as pasture, permanent
            grass, legumes,

    [[Page 116 STAT. 243]]

            forbs, shrubs, or trees, substantially in accordance with a
            schedule outlined in the plan;
                ``(2) to place highly erodible cropland subject to the
            contract in the conservation reserve established under this
            subchapter;
                ``(3) not to use the land for agricultural purposes, except
            as permitted by the Secretary;
                ``(4) to establish approved vegetative cover (which may
            include emerging vegetation in water), water cover for the
            enhancement of wildlife, or, where practicable, maintain
            existing cover on the land, except that--
                        ``(A) the water cover shall not include ponds for
                    the purpose of watering livestock, irrigating crops, or
                    raising fish for commercial purposes; and
                        ``(B) the Secretary shall not terminate the contract
                    for failure to establish approved vegetative or water
                    cover on the land if--
                              ``(i) the failure to plant the cover was due
                          to excessive rainfall or flooding;
                              ``(ii) the land subject to the contract that
                          could practicably be planted to the cover is
                          planted to the cover; and
                              ``(iii) the land on which the owner or
                          operator was unable to plant the cover is planted
                          to the cover after the wet conditions that
                          prevented the planting subsides;
                ``(5) on a violation of a term or condition of the contract
            at any time the owner or operator has control of the land--
                        ``(A) to forfeit all rights to receive rental
                    payments and cost sharing payments under the contract
                    and to refund to the Secretary any rental payments and
                    cost sharing payments received by the owner or operator
                    under the contract, together with interest on the
                    payments as determined by the Secretary, if the
                    Secretary, after considering the recommendations of the
                    soil conservation district and the Natural Resources
                    Conservation Service, determines that the violation is
                    of such nature as to warrant termination of the
                    contract; or
                        ``(B) to refund to the Secretary, or accept
                    adjustments to, the rental payments and cost sharing
                    payments provided to the owner or operator, as the
                    Secretary considers appropriate, if the Secretary
                    determines that the violation does not warrant
                    termination of the contract;
                ``(6) on the transfer of the right and interest of the owner
            or operator in land subject to the contract--
                        ``(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 the land agrees with the Secretary to
            assume all obligations of the contract, except that no refund of
            rental payments and cost sharing payments shall be required if
            the land is purchased by or for the United States Fish and
            Wildlife Service, or the transferee and the Secretary agree

    [[Page 116 STAT. 244]]

            to modifications to the contract, in a case in which the
            modifications are consistent with the objectives of the program,
            as determined by the Secretary;
                ``(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 Secretary may permit, consistent with the conservation of
            soil, water quality, and wildlife habitat (including habitat
            during nesting seasons for birds in the area)--
                        ``(A) managed harvesting and grazing (including the
                    managed harvesting of biomass), except that in
                    permitting managed harvesting and grazing, the
                    Secretary--
                              ``(i) shall, in coordination with the State
                          technical committee--
                                        ``(I) develop appropriate vegetation
                                    management requirements; and
                                        ``(II) identify periods during which
                                    harvesting and grazing under this
                                    paragraph may be conducted;
                              ``(ii) may permit harvesting and grazing or
                          other commercial use of the forage on the land
                          that is subject to the contract in response to a
                          drought or other emergency; and
                              ``(iii) shall, in the case of routine managed
                          harvesting or grazing or harvesting or grazing
                          conducted in response to a drought or other
                          emergency, reduce the rental payment otherwise
                          payable under the contract by an amount
                          commensurate with the economic value of the
                          activity; and
                        ``(B) the installation of wind turbines, except that
                    in permitting the installation of wind turbines, the
                    Secretary shall determine the number and location of
                    wind turbines that may be installed, taking into
                    account--
                              ``(i) the location, size, and other physical
                          characteristics of the land;
                              ``(ii) the extent to which the land contains
                          wildlife and wildlife habitat; and
                              ``(iii) the purposes of the conservation
                          reserve program under this subchapter;
                ``(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 land 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) to comply with such additional provisions as the
            Secretary determines are desirable and are included in the
            contract

    [[Page 116 STAT. 245]]

            to carry out this subchapter or to facilitate the practical
            administration of this subchapter.

        ``(b) Conservation Plans.--The plan referred to in subsection
    (a)(1)--
                ``(1) shall set forth--
                        ``(A) the conservation measures and practices to be
                    carried out by the owner or operator during the term of
                    the contract; and
                        ``(B) the commercial use, if any, to be permitted on
                    the land during the term; and
                ``(2) may provide for the permanent retirement of any
            existing cropland base and allotment history for the land.

        ``(c) Foreclosure.--
                ``(1) In general.--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 the
            contract if the land that is subject to the contract has been
            foreclosed on and the Secretary determines that forgiving the
            repayments is appropriate in order to provide fair and equitable
            treatment.
                ``(2) Resumption of control.--
                        ``(A) In general.--This subsection shall not void
                    the responsibilities of an owner or operator under the
                    contract if the owner or operator resumes control over
                    the land that is subject to the contract within the
                    period specified in the contract.
                        ``(B) Contract.--On the resumption of the control
                    over the land by the owner or operator, the provisions
                    of the contract in effect on the date of the foreclosure
                    shall apply.

    ``SEC. 1233. <<NOTE: 16 USC 3833.>>  DUTIES OF THE SECRETARY.

        ``In return for a contract entered into by an owner or operator
    under section 1232, the Secretary shall--
                ``(1) share the cost of carrying out the conservation
            measures and practices set forth in the contract for which the
            Secretary determines that cost sharing is appropriate and in the
            public interest; and
                ``(2) for a period of years not in excess of the term of the
            contract, pay an annual rental payment in an amount necessary to
            compensate for--
                        ``(A) the conversion of highly erodible cropland
                    normally devoted to the production of an agricultural
                    commodity on a farm or ranch to a less intensive use;
                    and
                        ``(B) the retirement of any cropland base and
                    allotment history that the owner or operator agrees to
                    retire permanently.

    ``SEC. 1234. <<NOTE: 16 USC 3834.>> PAYMENTS.

        ``(a) Timing.--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 practicable 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

    [[Page 116 STAT. 246]]

                        ``(B) at the option of the Secretary, at any time
                    prior to such date during the year that the obligation
                    is incurred.

        ``(b) Federal Percentage of Cost Sharing Payments.--
                ``(1) In general.--In making cost sharing payments to an
            owner or operator under a contract entered into under this
            subchapter, the Secretary shall pay 50 percent of the cost of
            establishing water quality and conservation measures and
            practices required under each contract for which the Secretary
            determines that cost sharing is appropriate and in the public
            interest.
                ``(2) Limitation.--The Secretary shall not make any payment
            to an owner or operator under this subchapter to the extent that
            the total amount of cost sharing payments provided to the owner
            or operator from all sources would exceed 100 percent of the
            total cost of establishing measures and practices described in
            paragraph (1).
                ``(3) Hardwood trees, windbreaks, shelterbelts, and wildlife
            corridors.--
                        ``(A) Applicability.--This paragraph applies to--
                              ``(i) land devoted to the production of
                          hardwood trees, windbreaks, shelterbelts, or
                          wildlife corridors under a contract entered into
                          under this subchapter after November 28, 1990; and
                              ``(ii) land converted to such production under
                          section 1235A.
                        ``(B) Payments.--In making cost share payments to an
                    owner or operator of land described in subparagraph (A),
                    the Secretary shall pay 50 percent of the reasonable and
                    necessary costs, as determined by the Secretary,
                    incurred by the owner or operator for maintaining trees
                    or shrubs, including the cost of replanting (if the
                    trees or shrubs were lost due to conditions beyond the
                    control of the owner or operator), during not less than
                    the 2-year, and not more than the 4-year, period
                    beginning on the date of the planting of the trees or
                    shrubs, as determined appropriate by the Secretary.
                ``(4) Hardwood tree planting.--The Secretary may permit
            owners or operators that contract to devote at least 10 acres of
            land to the production of hardwood trees under this subchapter
            to extend the planting of the trees over a 3-year period if at
            least \1/3\ of the trees are planted in each of the first 2
            years.
                ``(5) Other federal cost share assistance.--An owner or
            operator shall not be eligible to receive or retain cost share
            assistance under this subsection if the owner or operator
            receives any other Federal cost share assistance with respect to
            the land under any other provision of law.

        ``(c) Annual Rental Payments.--
                ``(1) In general.--In determining the amount of annual
            rental payments to be paid to owners and operators for
            converting highly erodible cropland normally devoted to the
            production of an agricultural commodity to less intensive use,
            the Secretary may consider, among other things, the amount
            necessary to encourage owners or operators of highly erodible
            cropland to participate in the program established by this
            subchapter.

    [[Page 116 STAT. 247]]

                ``(2) Method of determination.--The amounts payable to
            owners or operators in the form of rental payments under
            contracts entered into under this subchapter may be determined
            through--
                        ``(A) the submission of bids for such contracts by
                    owners and operators in such manner as the Secretary may
                    prescribe; or
                        ``(B) such other means as the Secretary determines
                    are appropriate.
                ``(3) Acceptance of contract offers.--In determining the
            acceptability of contract offers, the Secretary may--
                        ``(A) take into consideration the extent to which
                    enrollment of the land that is the subject of the
                    contract offer would improve soil resources, water
                    quality, wildlife habitat, or provide other
                    environmental benefits; and
                        ``(B) establish different criteria in various States
                    and regions of the United States based on the extent to
                    which water quality or wildlife habitat may be improved
                    or erosion may be abated.
                ``(4) Hardwood tree acreage.--In the case of acreage
            enrolled in the conservation reserve established under this
            subchapter that is to be devoted to hardwood trees, the
            Secretary may consider bids for contracts under this subsection
            on a continuous basis.

        ``(d) Cash or In-Kind Payments.--
                ``(1) In general.--Except as otherwise provided in this
            section, payments under this subchapter--
                        ``(A) shall be made in cash or in commodities in
                    such amount and on such time schedule as is agreed on
                    and specified in the contract; and
                        ``(B) may be made in advance of determination of
                    performance.
                ``(2) Method of providing in-kind payments.--If the payment
            to an owner or operator is made with in-kind commodities, the
            payment shall be made by the Commodity Credit Corporation--
                        ``(A) by delivery of the commodity involved to the
                    owner or operator at a warehouse or other similar
                    facility located in the county in which the highly
                    erodible cropland is located or at such other location
                    as is agreed to by the Secretary and the owner or
                    operator;
                        ``(B) by the transfer of negotiable warehouse
                    receipts; or
                        ``(C) by such other method, including the sale of
                    the commodity in commercial markets, as is determined by
                    the Secretary to be appropriate to enable the owner or
                    operator to receive efficient and expeditious possession
                    of the commodity.
                ``(3) Cash payments.--
                        ``(A) Commodity credit corporation stocks.--If
                    stocks of a commodity acquired by the Commodity Credit
                    Corporation are not readily available to make full
                    payment in kind to the owner or operator, the Secretary
                    may substitute full or partial payment in cash for
                    payment in kind.
                        ``(B) Special conservation reserve enhancement
                    program.--Payments to an owner or operator under a

    [[Page 116 STAT. 248]]

                    special conservation reserve enhancement program
                    described in subsection (f)(4) shall be in the form of
                    cash only.

        ``(e) Payments on Death, Disability, or Succession.--If an owner or
    operator that is entitled to a payment under a contract entered into
    under this subchapter dies, becomes incompetent, is otherwise unable to
    receive the payment, or is succeeded by another person that renders or
    completes the required performance, the Secretary shall make the
    payment, in accordance with regulations prescribed 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 of the
    circumstances.
        ``(f) Payment Limitation for Rental Payments.--
                ``(1) In general.--The total amount of rental payments,
            including rental payments made in the form of in-kind
            commodities, made to a person under this subchapter for any
            fiscal year may not exceed $50,000.
                ``(2) Regulations.--
                        ``(A) In general.--The Secretary shall promulgate
                    regulations--
                              ``(i) defining the term `person' as used in
                          this subsection; and
                              ``(ii) providing such terms and conditions as
                          the Secretary determines necessary to ensure a
                          fair and reasonable application of the limitation
                          established by this subsection.
                        ``(B) Corporations and stockholders.--The
                    regulations promulgated by the Secretary on December 18,
                    1970, under section 101 of the Agricultural Act of 1970
                    (7 U.S.C. 1307), shall be used to determine whether
                    corporations and their stockholders may be considered as
                    separate persons under this subsection.
                ``(3) Other payments.--Rental payments received by an owner
            or operator shall be in addition to, and not affect, the total
            amount of payments that the owner or operator is otherwise
            eligible to receive under the Farm Security and Rural Investment
            Act of 2002.
                ``(4) Special conservation reserve enhancement program.--
                        ``(A) In general.--The provisions of this subsection
                    that limit payments to any person, and section 1305(d)
                    of the Agricultural Reconciliation Act of 1987 (7 U.S.C.
                    1308 note; Public Law 100-203), shall not be applicable
                    to payments received by a State, political subdivision,
                    or agency thereof in connection with agreements entered
                    into under a special conservation reserve enhancement
                    program carried out by that entity that has been
                    approved by the Secretary.
                        ``(B) Agreements.--The Secretary may enter into such
                    agreements for payments to States (including political
                    subdivisions and agencies of States) that the Secretary
                    determines will advance the purposes of this subchapter.

        ``(g) Other State or Local Assistance.--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 land in the conservation reserve program.

    [[Page 116 STAT. 249]]

    ``SEC. 1235. <<NOTE: 16 USC 3835.>>  CONTRACTS.

        ``(a) Ownership or Operation Requirements.--
                ``(1) In general.--Except as provided in paragraph (2), no
            contract shall be entered into under this subchapter concerning
            land with respect to which the ownership has changed in the 1-
            year period preceding the first year of the contract period
            unless--
                        ``(A) the new ownership was acquired by will or
                    succession as a result of the death of the previous
                    owner;
                        ``(B) the new ownership was acquired before January
                    1, 1985;
                        ``(C) the Secretary determines that the land was
                    acquired under circumstances that give adequate
                    assurance that the land was not acquired for the purpose
                    of placing the land in the program established by this
                    subchapter; or
                        ``(D) the ownership change occurred due to
                    foreclosure on the land and the owner of the land
                    immediately before the foreclosure exercises a right of
                    redemption from the mortgage holder in accordance with
                    State law.
                ``(2) Exceptions.--Paragraph (1) shall not--
                        ``(A) prohibit the continuation of an agreement by a
                    new owner after an agreement has been entered into under
                    this subchapter; or
                        ``(B) require a person to own the land as a
                    condition of eligibility for entering into the contract
                    if the person--
                              ``(i) has operated the land to be covered by a
                          contract under this section for at least 1 year
                          preceding the date of the contract or since
                          January 1, 1985, whichever is later; and
                              ``(ii) controls the land for the contract
                          period.

        ``(b) Sales or Transfers.--If, during the term of a contract entered
    into under this subchapter, an owner or operator of land subject to the
    contract sells or otherwise transfers the ownership or right of
    occupancy of the land, the new owner or operator of the land may--
                ``(1) continue the contract under the same terms or
            conditions;
                ``(2) enter into a new contract in accordance with this
            subchapter; or
                ``(3) elect not to participate in the program established by
            this subchapter.

        ``(c) Modifications.--
                ``(1) In general.--The Secretary may modify a contract
            entered into with an owner or operator under this subchapter
            if--
                        ``(A) the owner or operator agrees to the
                    modification; and
                        ``(B) the Secretary determines that the modification
                    is desirable--
                              ``(i) to carry out this subchapter;
                              ``(ii) to facilitate the practical
                          administration of this subchapter; or
                              ``(iii) to achieve such other goals as the
                          Secretary determines are appropriate, consistent
                          with this subchapter.

    [[Page 116 STAT. 250]]

                ``(2) Production of agricultural commodities.--The Secretary
            may modify or waive a term or condition of a contract entered
            into under this subchapter in order to permit all or part of the
            land subject to such contract to be devoted to the production of
            an agricultural commodity during a crop year, subject to such
            conditions as the Secretary determines are appropriate.

        ``(d) Termination.--
                ``(1) In general.--The Secretary may terminate a contract
            entered into with an owner or operator under this subchapter
            if--
                        ``(A) the owner or operator agrees to the
                    termination; and
                        ``(B) the Secretary determines that the termination
                    would be in the public interest.
                ``(2) Notice to congressional committees.--At least 90 days
            before taking any action to terminate under paragraph (1) all
            conservation reserve contracts entered into under this
            subchapter, the Secretary shall provide to the Committee on
            Agriculture of the House of Representatives and the Committee on
            Agriculture, Nutrition, and Forestry of the Senate written
            notice of the action.

        ``(e) Early Termination by Owner or Operator.--
                ``(1) Early termination.--
                        ``(A) In general.--The Secretary shall allow a
                    participant that entered into a contract under this
                    subchapter before January 1, 1995, to terminate the
                    contract at any time if the contract has been in effect
                    for at least 5 years.
                        ``(B) Liability for contract violation.--The
                    termination shall not relieve the participant of
                    liability for a contract violation occurring before the
                    date of the termination.
                        ``(C) Notice to secretary.--The participant shall
                    provide the Secretary with reasonable notice of the
                    desire of the participant to terminate the contract.
                ``(2) Certain land excepted.--The following land shall not
            be subject to an early termination of contract under this
            subsection:
                        ``(A) Filterstrips, waterways, strips adjacent to
                    riparian areas, windbreaks, and shelterbelts.
                        ``(B) Land with an erodibility index of more than
                    15.
                        ``(C) Other land of high environmental value
                    (including wetland), as determined by the Secretary.
                ``(3) Effective date.--The contract termination shall become
            effective 60 days after the date on which the owner or operator
            submits the notice required under paragraph (1)(C).
                ``(4) Prorated rental payment.--If a contract entered into
            under this subchapter is terminated under this subsection before
            the end of the fiscal year for which a rental payment is due,
            the Secretary shall provide a prorated rental payment covering
            the portion of the fiscal year during which the contract was in
            effect.
                ``(5) Renewed enrollment.--The termination of a contract
            entered into under this subchapter shall not affect the ability
            of the owner or operator that requested the termination to
            submit a subsequent bid to enroll the land that was subject to
            the contract into the conservation reserve.

    [[Page 116 STAT. 251]]

                ``(6) Conservation requirements.--If land that was subject
            to a contract is returned to production of an agricultural
            commodity, the conservation requirements under subtitles B and C
            shall apply to the use of the land to the extent that the
            requirements are similar to those requirements imposed on other
            similar land in the area, except that the requirements may not
            be more onerous than the requirements imposed on other land.

    ``SEC. 1235A. <<NOTE: 16 USC 3835a.>>  CONVERSION OF LAND SUBJECT TO
                CONTRACT TO OTHER CONSERVING USES.

        ``(a) Conversion to Trees.--
                ``(1) In general.--The Secretary shall permit an owner or
            operator that has entered into a contract under this subchapter
            that is in effect on November 28, 1990, to convert areas of
            highly erodible cropland that are subject to the contract, and
            that are devoted to vegetative cover, from that use to hardwood
            trees, windbreaks, shelterbelts, or wildlife corridors.
                ``(2) Terms.--
                        ``(A) Extension of contract.--With respect to a
                    contract that is modified under this section that
                    provides for the planting of hardwood trees, windbreaks,
                    shelterbelts, or wildlife corridors, if the original
                    term of the contract was less than 15 years, the owner
                    or operator may extend the contract to a term of not to
                    exceed 15 years.
                        ``(B) Cost share assistance.--The Secretary shall
                    pay 50 percent of the cost of establishing conservation
                    measures and practices authorized under this subsection
                    for which the Secretary determines the cost sharing is
                    appropriate and in the public interest.

        ``(b) Conversion to Wetland.--The Secretary shall permit an owner or
    operator that has entered into a contract under this subchapter that is
    in effect on November 28, 1990, to restore areas of highly erodible
    cropland that are devoted to vegetative cover under the contract to
    wetland if--
                ``(1) the areas are prior converted wetland;
                ``(2) the owner or operator of the areas enters into an
            agreement to provide the Secretary with a long-term or permanent
            easement under subchapter C covering the areas;
                ``(3) there is a high probability that the prior converted
            area can be successfully restored to wetland status; and
                ``(4) the restoration of the areas otherwise meets the
            requirements of subchapter C.

        ``(c) Limitation.--The Secretary shall not incur, through a
    conversion under this section, any additional expense on the acres,
    including the expense involved in the original establishment of the
    vegetative cover, that would result in cost share for costs under this
    section in excess of the costs that would have been subject to cost
    share for the new practice had that practice been the original practice.
        ``(d) Condition of Contract.--An owner or operator shall as a
    condition of entering into a contract under subsection (a) participate
    in the Forest Stewardship Program established under section 5 of the
    Cooperative Forestry Assistance Act of 1978 (16 U.S.C. 2103a).''.

    [[Page 116 STAT. 252]]

        (b) Study <<NOTE: 16 USC 3831 note.>> on Economic Effects.--
                (1) In general.--Not later than 18 months after the date of
            enactment of this Act, the Secretary of Agriculture shall submit
            to the Committee on Agriculture of the House of Representatives
            and the Committee on Agriculture, Nutrition, and Forestry of the
            Senate a report that describes the economic and social effects
            on rural communities resulting from the conservation reserve
            program established under subchapter B of chapter 1 of subtitle
            D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831
            et seq.).
                (2) Components.--The study under paragraph (1) shall include
            analyses of--
                        (A) the impact that enrollments in the conservation
                    reserve program have on rural businesses, civic
                    organizations, and community services (such as schools,
                    public safety, and infrastructure), particularly in
                    communities with a large percentage of whole farm
                    enrollments;
                        (B) the effect that those enrollments have on rural
                    population and beginning farmers (including a
                    description of any connection between the rate of
                    enrollment and the incidence of absentee ownership);
                        (C)(i) the manner in which differential per acre
                    payment rates potentially impact the types of land (by
                    productivity) enrolled;
                        (ii) changes to the per acre payment rates that may
                    affect that impact; and
                        (iii) the manner in which differential per acre
                    payment rates could facilitate retention of productive
                    agricultural land in agriculture; and
                        (D) the effect of enrollment on opportunities for
                    recreational activities (including hunting and fishing).

                      Subtitle C--Wetlands Reserve Program

    SEC. 2201. REAUTHORIZATION.

        Section 1237(c) of the Food Security Act of 1985 (16 U.S.C. 3837(c))
    is amended by striking ``2002'' and inserting ``2007''.

    SEC. 2202. ENROLLMENT.

        Section 1237 of the Food Security Act of 1985 (16 U.S.C. 3837) is
    amended--
                (1) by striking subsection (b) and inserting the following:

        ``(b) Enrollment Conditions.--
                ``(1) Maximum enrollment.--The total number of acres
            enrolled in the wetlands reserve program shall not exceed
            2,275,000 acres, of which, to the maximum extent practicable,
            the Secretary shall enroll 250,000 acres in each calendar year.
                ``(2) Methods of enrollment.--The Secretary shall enroll
            acreage into the wetlands reserve program through the use of
            permanent easements, 30-year easements, restoration cost share
            agreements, or any combination of those options.''; and
                (2) by striking subsection (g).

    SEC. 2203. EASEMENTS AND AGREEMENTS.

        Section 1237A of the Food Security Act of 1985 (16 U.S.C. 3837a) is
    amended by striking subsection (h).

    [[Page 116 STAT. 253]]

    SEC. 2204. CHANGES IN OWNERSHIP; AGREEMENT MODIFICATION; TERMINATION.

        Section 1237E(a) of the Food Security Act of 1985 (16 U.S.C.
    3837e(a)) is amended by striking paragraph (2) and inserting the
    following:
                ``(2)(A) the ownership change occurred because of
            foreclosure on the land; and
                ``(B) immediately before the foreclosure, the owner of the
            land exercises a right of redemption from the mortgage holder in
            accordance with State law; or''.

                  Subtitle D--Environmental Quality Incentives

    SEC. 2301. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

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

    ``SEC. 1240. <<NOTE: 16 USC 3839aa.>>  PURPOSES.

        ``The purposes of the environmental quality incentives program
    established by this chapter are to promote agricultural production and
    environmental quality as compatible goals, and to optimize environmental
    benefits, by--
                ``(1) assisting producers in complying with local, State,
            and national regulatory requirements concerning--
                        ``(A) soil, water, and air quality;
                        ``(B) wildlife habitat; and
                        ``(C) surface and ground water conservation;
                ``(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, tribal, and local agencies;
                ``(3) providing flexible assistance to producers to install
            and maintain conservation practices 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; and
                ``(5) consolidating and streamlining conservation planning
            and regulatory compliance processes to reduce administrative
            burdens on producers and the cost of achieving environmental
            goals.

    ``SEC. 1240A. <<NOTE: 16 USC 3839aa-1.>> 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) Eligible land.--
                        ``(A) In general.--The term `eligible land' means
                    land on which agricultural commodities or livestock are
                    produced.

    [[Page 116 STAT. 254]]

                        ``(B) Inclusions.--The term `eligible land'
                    includes--
                              ``(i) cropland;
                              ``(ii) grassland;
                              ``(iii) rangeland;
                              ``(iv) pasture land;
                              ``(v) private, nonindustrial forest land; and
                              ``(vi) other agricultural land that the
                          Secretary determines poses a serious threat to
                          soil, air, water, or related resources.
                ``(3) 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.
                ``(4) Livestock.--The term `livestock' means dairy cattle,
            beef cattle, laying hens, broilers, turkeys, swine, sheep, and
            other such animals as are determined by the Secretary.
                ``(5) Practice.--The term `practice' means 1 or more
            structural practices, land management practices, and
            comprehensive nutrient management planning practices.
                ``(6) 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. <<NOTE: 16 USC 3839aa-2.>>  ESTABLISHMENT AND
                ADMINISTRATION OF ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

        ``(a) Establishment.--
                ``(1) In general.--During each of the 2002 through 2007
            fiscal years, the Secretary shall provide cost-share payments
            and incentive payments to producers that enter into contracts
            with the Secretary under the program.
                ``(2) Eligible practices.--With respect to practices
            implemented under this chapter--
                        ``(A) a producer that implements a structural
                    practice in accordance with this chapter shall be
                    eligible to receive cost-share payments; and
                        ``(B) a producer that implements a land management
                    practice, or develops a comprehensive nutrient
                    management plan, in accordance with this chapter shall
                    be eligible to receive incentive payments.

        ``(b) Practices and Term.--
                ``(1) Practices.--A contract under this chapter may apply to
            1 or more structural practices, land management practices, and
            comprehensive nutrient management practices.
                ``(2) Term.--A contract under this chapter shall have a term
            that--

    [[Page 116 STAT. 255]]

                        ``(A) at a minimum, is equal to the period beginning
                    on the date on which the contract is entered into and
                    ending on the date that is 1 year after the date on
                    which all practices under the contract have been
                    implemented; but
                        ``(B) not to exceed 10 years.

        ``(c) Bidding Down.--If the Secretary determines that the
    environmental values of 2 or more applications for cost-share payments
    or incentive payments are comparable, the Secretary shall not assign a
    higher priority to the application only because it would present the
    least cost to the program established under the program.
        ``(d) Cost-Share Payments.--
                ``(1) In general.--Except as provided in paragraph (2), the
            cost-share payments provided to a producer proposing to
            implement 1 or more practices under the program shall be not
            more than 75 percent of the cost of the practice, as determined
            by the Secretary.
                ``(2) Exceptions.--
                        ``(A) Limited resource and beginning farmers.--The
                    Secretary may increase the amount provided to a producer
                    under paragraph (1) to not more than 90 percent if the
                    producer is a limited resource or beginning farmer or
                    rancher, as determined by the Secretary.
                        ``(B) Cost-share assistance from other sources.--
                    Except as provided in paragraph (3), any cost-share
                    payments received by a producer from a State or private
                    organization or person for the implementation of 1 or
                    more practices on eligible land of the producer shall be
                    in addition to the payments provided to the producer
                    under paragraph (1).
                ``(3) Other payments.--A producer shall not be eligible for
            cost-share payments for practices on eligible land under the
            program if the producer receives cost-share payments or other
            benefits for the same practice on the same land under chapter 1
            and the program.

        ``(e) Incentive Payments.--
                ``(1) In general.--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.
                ``(2) Special rule.--In determining the amount and rate of
            incentive payments, the Secretary may accord great significance
            to a practice that promotes residue, nutrient, pest, invasive
            species, or air quality management.

        ``(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.

    [[Page 116 STAT. 256]]

        ``(g) Allocation of Funding.--For each of fiscal years 2002 through
    2007, 60 percent of the funds made available for cost-share payments and
    incentive payments under this chapter shall be targeted at practices
    relating to livestock production.

    ``SEC. 1240C. <<NOTE: 16 USC 3839aa-3.>>  EVALUATION OF OFFERS AND
                PAYMENTS.

        ``In evaluating applications for cost-share payments and incentive
    payments, the Secretary shall accord a higher priority to assistance and
    payments that--
                ``(1) encourage the use by producers of cost-effective
            conservation practices; and
                ``(2) address national conservation priorities.

    ``SEC. 1240D. <<NOTE: 16 USC 3839aa-4.>> DUTIES OF PRODUCERS.

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

    ``SEC. 1240E. <<NOTE: 16 USC 3839aa-5.>> ENVIRONMENTAL QUALITY
                INCENTIVES PROGRAM PLAN.

        ``(a) In General.--To be eligible to receive cost-share payments or
    incentive payments under the program, a producer shall submit to the
    Secretary for approval a plan of operations that--
                ``(1) specifies practices covered under the program;
                ``(2) includes such terms and conditions as the Secretary
            considers necessary to carry out the program, including a

    [[Page 116 STAT. 257]]

            description of the purposes to be met by the implementation of
            the plan; and
                ``(3) in the case of a confined livestock feeding operation,
            provides for development and implementation of a comprehensive
            nutrient management plan, if applicable.

        ``(b) Avoidance of Duplication.--The Secretary shall, to the maximum
    extent practicable, eliminate duplication of planning activities under
    the program under this chapter and comparable conservation programs.

    ``SEC. 1240F. <<NOTE: 16 USC 3839aa-6.>> DUTIES OF THE SECRETARY.

        ``To the extent appropriate, the Secretary shall assist a producer
    in achieving the conservation and environmental goals of a program plan
    by--
                ``(1) providing cost-share payments or incentive payments
            for developing and implementing 1 or more practices, as
            appropriate; and
                ``(2) providing the producer with information and training
            to aid in implementation of the plan.

    ``SEC. 1240G. <<NOTE: 16 USC 3839aa-7.>> LIMITATION ON PAYMENTS.

        ``An individual or entity may not receive, directly or indirectly,
    cost-share or incentive payments under this chapter that, in the
    aggregate, exceed $450,000 for all contracts entered into under this
    chapter by the individual or entity during the period of fiscal years
    2002 through 2007, regardless of the number of contracts entered into
    under this chapter by the individual or entity.

    ``SEC. 1240H. <<NOTE: 16 USC 3839aa-8.>> CONSERVATION INNOVATION GRANTS.

        ``(a) In General.--The Secretary may pay the cost of competitive
    grants that are intended to stimulate innovative approaches to
    leveraging Federal investment in environmental enhancement and
    protection, in conjunction with agricultural production, through the
    program.
        ``(b) Use.--The Secretary may provide grants under this section to
    governmental and nongovernmental organizations and persons, on a
    competitive basis, to carry out projects that--
                ``(1) involve producers that are eligible for payments or
            technical assistance under the program;
                ``(2) implement projects, such as--
                        ``(A) market systems for pollution reduction; and
                        ``(B) innovative conservation practices, including
                    the storing of carbon in the soil; and
                ``(3) leverage funds made available to carry out the program
            under this chapter with matching funds provided by State and
            local governments and private organizations to promote
            environmental enhancement and protection in conjunction with
            agricultural production.

        ``(c) 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.

    ``SEC. 1240I. <<NOTE: 16 USC 3839aa-9.>> GROUND AND SURFACE WATER
                CONSERVATION.

        ``(a) Establishment.--In carrying out the program under this
    chapter, subject to subsection (b), the Secretary shall promote ground
    and surface water conservation by providing cost-share payments,
    incentive payments, and loans to producers to carry out

    [[Page 116 STAT. 258]]

    eligible water conservation activities with respect to the agricultural
    operations of producers, to--
                ``(1) improve irrigation systems;
                ``(2) enhance irrigation efficiencies;
                ``(3) convert to--
                        ``(A) the production of less water-intensive
                    agricultural commodities; or
                        ``(B) dryland farming;
                ``(4) improve the storage of water through measures such as
            water banking and groundwater recharge;
                ``(5) mitigate the effects of drought; or
                ``(6) institute other measures that improve groundwater and
            surface water conservation, as determined by the Secretary, in
            the agricultural operations of producers.

        ``(b) Net Savings.--The Secretary may provide assistance to a
    producer under this section only if the Secretary determines that the
    assistance will facilitate a conservation measure that results in a net
    savings in groundwater or surface water resources in the agricultural
    operation of the producer.
        ``(c) Funding.--Of the funds of the Commodity Credit Corporation, in
    addition to amounts made available under section 1241(a)(6) to carry out
    this chapter, the Secretary shall use--
                ``(1) to carry out this section--
                        ``(A) $25,000,000 for fiscal year 2002;
                        ``(B) $45,000,000 for fiscal year 2003; and
                        ``(C) $60,000,000 for each of fiscal years 2004
                    through 2007; and
                ``(2) $50,000,000 to carry out water conservation activities
            in Klamath Basin, California and Oregon, to be made available as
            soon as practicable after the date of enactment of this
            section.''.

                          Subtitle E--Grassland Reserve

    SEC. 2401. GRASSLAND RESERVE PROGRAM.

        Chapter 2 of the Food Security Act of 1985 (as amended by section
    2001) is amended by adding at the end the following:

                    ``Subchapter C--Grassland Reserve Program

    ``SEC. 1238N. <<NOTE: 16 USC 3838n.>> GRASSLAND RESERVE PROGRAM.

        ``(a) Establishment.--The Secretary shall establish a grassland
    reserve program (referred to in this subchapter as the `program') to
    assist owners in restoring and conserving eligible land described in
    subsection (c).
        ``(b) Enrollment Conditions.--
                ``(1) Maximum enrollment.--The total number of acres
            enrolled in the program shall not exceed 2,000,000 acres of
            restored or improved grassland, rangeland, and pastureland.
                ``(2) Methods of enrollment.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the Secretary shall enroll in the
                    program from a willing owner not less than 40 contiguous
                    acres of land through the use of--
                              ``(i) a 10-year, 15-year, or 20-year rental
                          agreement;

    [[Page 116 STAT. 259]]

                              ``(ii)(I) a 30-year rental agreement or
                          permanent or 30-year easement; or
                              ``(II) in a State that imposes a maximum
                          duration for easements, an easement for the
                          maximum duration allowed under State law.
                        ``(B) Waiver.--The Secretary may enroll in the
                    program such parcels of land that are less than 40 acres
                    as the Secretary determines are appropriate to achieve
                    the purposes of the program.
                ``(3) Limitation on use of easements and rental
            agreements.--Of the total amount of funds expended under the
            program to acquire easements and rental agreements described in
            paragraph (2)(A)--
                        ``(A) not more than 40 percent shall be used for
                    rental agreements described in paragraph (2)(A)(i); and
                        ``(B) not more than 60 percent shall be used for
                    easements and rental agreements described in paragraph
                    (2)(A)(ii).

        ``(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) grassland, land that contains forbs, or shrubland
            (including improved rangeland and pastureland); or
                ``(2) land that--
                        ``(A) is located in an area that has been
                    historically dominated by grassland, forbs, or
                    shrubland; and
                        ``(B) has potential to serve as habitat for animal
                    or plant populations of significant ecological value if
                    the land is--
                              ``(i) retained in the current use of the land;
                          or
                              ``(ii) 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
            agreement or easement.

    ``SEC. 1238O. <<NOTE: 16 USC 3838o.>>  REQUIREMENTS RELATING TO
                EASEMENTS AND AGREEMENTS.

        ``(a) Requirements of Landowner.--
                ``(1) In general.--To be eligible to enroll land in the
            program through the grant of an easement, the owner of the land
            shall enter into an agreement with the Secretary--
                        ``(A) to grant an easement that applies to the land
                    to the Secretary;
                        ``(B) to create and record an appropriate deed
                    restriction in accordance with applicable State law to
                    reflect the easement;
                        ``(C) to provide a written statement of consent to
                    the easement signed by persons holding a security
                    interest or any vested interest in the land;
                        ``(D) to provide proof of unencumbered title to the
                    underlying fee interest in the land that is the subject
                    of the easement; and
                        ``(E) to comply with the terms of the easement and
                    restoration agreement.

    [[Page 116 STAT. 260]]

                ``(2) Agreements.--To be eligible to enroll land in the
            program under an agreement, the owner or operator of the land
            shall agree--
                        ``(A) to comply with the terms of the agreement
                    (including any related restoration agreements); and
                        ``(B) to the suspension of any existing cropland
                    base and allotment history for the land under a program
                    administered by the Secretary.

        ``(b) Terms of Easement or Rental Agreement.--An easement or rental
    agreement under subsection (a) shall--
                ``(1) permit--
                        ``(A) common grazing practices, including
                    maintenance and necessary cultural practices, on the
                    land in a manner that is consistent with maintaining the
                    viability of grassland, forb, and shrub species common
                    to that locality;
                        ``(B) subject to appropriate restrictions during the
                    nesting season for birds in the local area that are in
                    significant decline or are conserved in accordance with
                    Federal or State law, as determined by the Natural
                    Resources Conservation Service State conservationist,
                    haying, mowing, or harvesting for seed production; and
                        ``(C) fire rehabilitation and construction of fire
                    breaks and fences (including placement of the posts
                    necessary for fences);
                ``(2) prohibit--
                        ``(A) the production of crops (other than hay),
                    fruit trees, vineyards, or any other agricultural
                    commodity that requires breaking the soil surface; and
                        ``(B) except as permitted under this subsection or
                    subsection (d), the conduct of any other activity that
                    would disturb the surface of the land covered by the
                    easement or rental agreement; and
                ``(3) include such additional provisions as the Secretary
            determines are appropriate to carry out or facilitate the
            administration of this subchapter.

        ``(c) Evaluation and Ranking of Easement and Rental Agreement
    Applications.--
                ``(1) In general.--The Secretary shall establish criteria to
            evaluate and rank applications for easements and rental
            agreements under this subchapter.
                ``(2) Considerations.--In establishing the criteria, the
            Secretary shall emphasize support for--
                        ``(A) grazing operations;
                        ``(B) plant and animal biodiversity; and
                        ``(C) grassland, land that contains forbs, and
                    shrubland under the greatest threat of conversion.

        ``(d) Restoration Agreements.--
                ``(1) In general.--The Secretary shall prescribe the terms
            of a restoration agreement by which grassland, land that
            contains forbs, or shrubland that is subject to an easement or
            rental 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 the Federal share of restoration payments and
            technical assistance).

    [[Page 116 STAT. 261]]

        ``(e) Violations.--On a violation of the terms or conditions of an
    easement, rental agreement, or restoration agreement entered into under
    this section--
                ``(1) the easement or rental agreement shall remain in
            force; and
                ``(2) 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.

    ``SEC. 1238P. <<NOTE: 16 USC 3838p.>>  DUTIES OF SECRETARY.

        ``(a) In general.--In return for the granting of an easement, or the
    execution of a rental agreement, by an owner under this subchapter, the
    Secretary shall, in accordance with this section--
                ``(1) make easement or rental agreement payments to the
            owner in accordance with subsection (b); and
                ``(2) make payments to the owner for the Federal share of
            the cost of restoration in accordance with subsection (c).

        ``(b) Payments.--
                ``(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.--In return for entering
            into a rental agreement by an owner under this subchapter, the
            Secretary shall make annual payments to the owner during the
            term of the rental agreement in an amount that is not more than
            75 percent of the grazing value of the land covered by the
            contract.

        ``(c) Federal Share of Restoration.--The Secretary shall make
    payments to an owner under this section of not more than--
                ``(1) in the case of grassland, land that contains forbs, or
            shrubland that has never been cultivated, 90 percent of the
            costs of carrying out measures and practices necessary to
            restore functions and values of that land; or
                ``(2) in the case of restored grassland, land that contains
            forbs, or shrubland, 75 percent of those costs.

        ``(d) 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

    [[Page 116 STAT. 262]]

    provision of law, in such manner as the Secretary determines is fair and
    reasonable in light of all the circumstances.

    ``SEC. 1238Q. <<NOTE: 16 USC 3838q.>>  DELEGATION TO PRIVATE
                ORGANIZATIONS.

        ``(a) In General.--The Secretary may permit a private conservation
    or land trust organization (referred to in this section as a `private
    organization') or a State agency to hold and enforce an easement under
    this subchapter, in lieu of the Secretary, subject to the right of the
    Secretary to conduct periodic inspections and enforce the easement, if--
                ``(1) the Secretary determines that granting the permission
            will promote protection of grassland, land that contains forbs,
            and shrubland;
                ``(2) the owner authorizes the private organization or State
            agency to hold and enforce the easement; and
                ``(3) the private organization or State agency agrees to
            assume the costs incurred in administering and enforcing the
            easement, including the costs of restoration or rehabilitation
            of the land as specified by the owner and the private
            organization or State agency.

        ``(b) Application.--A private organization or State agency that
    seeks to hold and enforce an easement under this subchapter shall apply
    to the Secretary for approval.
        ``(c) Approval by Secretary.--The Secretary may approve a private
    organization to hold and enforce an easement under this subchapter if
    (as determined by the Secretary) the private organization--
                ``(1)(A) is an organization described in section 501(c)(3)
            of the Internal Revenue Code of 1986 that is exempt from
            taxation under section 501(a) of that Code; or
                ``(B) is described in section 509(a)(3), and is controlled
            by an organization described in section 509(a)(2), of that Code;
                ``(2) has the relevant experience necessary to administer
            grassland and shrubland easements;
                ``(3) has a charter that describes the commitment of the
            private organization to conserving ranchland, agricultural land,
            or grassland for grazing and conservation purposes; and
                ``(4) has the resources necessary to effectuate the purposes
            of the charter.

        ``(d) Reassignment.--
                ``(1) In general.--If a private organization holding an
            easement on land under this subchapter terminates, not later
            than 30 days after termination of the private organization, the
            owner of the land shall reassign the easement to--
                        ``(A) a new private organization that is approved by
                    the Secretary; or
                        ``(B) the Secretary.
                ``(2) Notification of secretary.--
                        ``(A) In general.--If <<NOTE: Deadline.>> the
                    easement is reassigned to a new private organization,
                    not later than 60 days after the date of reassignment,
                    the owner and the new organization shall notify the
                    Secretary in writing that a reassignment for termination
                    has been made.
                        ``(B) Failure to notify.--If the owner and the new
                    organization fail to notify the Secretary of the
                    reassignment in accordance with subparagraph (A), the
                    easement shall revert to the control of the
                    Secretary.''.

    [[Page 116 STAT. 263]]

                     Subtitle F--Other Conservation Programs

    SEC. 2501. AGRICULTURAL MANAGEMENT ASSISTANCE.

        Section 524 of the Federal Crop Insurance Act (7 U.S.C. 1524) is
    amended by striking subsection (b) and inserting the following:
        ``(b) Agricultural Management Assistance.--
                ``(1) Authority.--The Secretary shall provide financial
            assistance to producers in the States of Connecticut, Delaware,
            Maryland, Massachusetts, Maine, Nevada, New Hampshire, New
            Jersey, New York, Pennsylvania, Rhode Island, Utah, Vermont,
            West Virginia, and Wyoming.
                ``(2) Uses.--A producer may use financial 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 or
                    marketing diversification or resource conservation
                    practices, including--
                              ``(i) soil erosion control;
                              ``(ii) integrated pest management;
                              ``(iii) organic farming; or
                              ``(iv) to develop and implement a plan to
                          create marketing opportunities for the producer,
                          including through value-added processing;
                        ``(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 relating to an
                    activity described in subparagraphs (A) through (E), as
                    determined by the Secretary.
                ``(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.
                ``(4) Commodity credit corporation.--
                        ``(A) In general.--The Secretary shall carry out
                    this subsection through the Commodity Credit
                    Corporation.
                        ``(B) Funding.--
                              ``(i) In general.--Except as provided in
                          clause (ii), the Commodity Credit Corporation
                          shall make available to carry out this subsection
                          not less than $10,000,000 for each fiscal year.
                              ``(ii) Exception.--For each of fiscal years
                          2003 through 2007, the Commodity Credit
                          Corporation shall make available to carry out this
                          subsection $20,000,000.''.

    [[Page 116 STAT. 264]]

    SEC. 2502. GRAZING, WILDLIFE HABITAT INCENTIVE, SOURCE WATER PROTECTION,
                AND GREAT LAKES BASIN PROGRAMS.

        (a) In General.--Chapter 5 of subtitle D of title XII of the Food
    Security Act of 1985 (16 U.S.C. 3839bb et seq.) is amended to read as
    follows:

                    ``CHAPTER 5--OTHER CONSERVATION PROGRAMS

    ``SEC. 1240M. <<NOTE: 16 USC 3839bb.>> CONSERVATION OF PRIVATE GRAZING
                LAND.

        ``(a) 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.

        ``(b) 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.

        ``(c) 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--

    [[Page 116 STAT. 265]]

                              ``(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;
                        ``(H) identifying the opportunities and encouraging
                    the diversification of private grazing land enterprises;
                    and
                        ``(I) encouraging the use of sustainable grazing
                    systems, such as year-round, rotational, or managed
                    grazing.
                ``(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.

        ``(d) 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.--In accordance
            with paragraph (3), the Secretary may establish 2 grazing
            management demonstration districts at the recommendation of the
            grazing land 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--

    [[Page 116 STAT. 266]]

                              ``(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 an
                    application 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.

        ``(e) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $60,000,000 for each of fiscal
    years 2002 through 2007.

    ``SEC. 1240N. <<NOTE: 16 USC 3839bb-1.>>  WILDLIFE HABITAT INCENTIVE
                PROGRAM.

        ``(a) In General.--The <<NOTE: Establishment.>> Secretary, in
    consultation with the State technical committees established under
    section 1261, shall establish within the Natural Resources Conservation
    Service a program to be known as the wildlife habitat incentive program
    (referred to in this section as the `program').

        ``(b) Cost-Share Payments.--
                ``(1) In general.--Under the program, the Secretary shall
            make cost-share payments to landowners to develop--
                        ``(A) upland wildlife habitat;
                        ``(B) wetland wildlife habitat;
                        ``(C) habitat for threatened and endangered species;
                        ``(D) fish habitat; and
                        ``(E) other types of wildlife habitat approved by
                    the Secretary.
                ``(2) Increased cost share for long-term agreements.--
                        ``(A) In general.--In a case in which the Secretary
                    enters into an agreement or contract to protect and
                    restore plant and animal habitat that has a term of at
                    least 15 years, the Secretary may provide cost-share
                    payments in addition to amounts provided under paragraph
                    (1).
                        ``(B) Funding limitation.--The Secretary may use,
                    for a fiscal year, not more than 15 percent of funds
                    made available under section 1241(a)(7) for the fiscal
                    year to carry out contracts and agreements described in
                    subparagraph (A).

        ``(c) Regional Equity.--In carrying out this section, the Secretary
    shall, to the maximum extent practicable, ensure that regional issues of
    concern relating to wildlife habitat are addressed in an appropriate
    manner.

    [[Page 116 STAT. 267]]

    ``SEC. 1240O. <<NOTE: 16 USC 3839bb-2.>>  GRASSROOTS SOURCE WATER
                PROTECTION PROGRAM.

        ``(a) In General.--The Secretary shall establish a national
    grassroots water protection program to more effectively use onsite
    technical assistance capabilities of each State rural water association
    that, as of the date of enactment of this section, operates a wellhead
    or groundwater protection program in the State.
        ``(b) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $5,000,000 for each of fiscal
    years 2002 through 2007.

    ``SEC. 1240P. <<NOTE: 16 USC 3839bb-3.>> 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 2007.''.
        (b) Conforming Amendment.--Sections 386 and 387 of the Federal
    Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 2005b, 3836a)
    are repealed.

    SEC. 2503. FARMLAND PROTECTION PROGRAM.

        (a) In General.--Chapter 2 of the Food Security Act of 1985 (as
    amended by section 2001) is amended by adding at the end the following:

                   ``Subchapter B--Farmland Protection Program

    ``SEC. 1238H. <<NOTE: 16 USC 3838h.>> DEFINITIONS.

        ``In this subchapter:
                ``(1) Eligible entity.--The term `eligible entity' means--
                        ``(A) any agency of any State or local government or
                    an Indian tribe (including a farmland protection board
                    or land resource council established under State law);
                    or
                        ``(B) any organization that--
                              ``(i) is organized for, and at all times since
                          the formation of the organization has been
                          operated principally for, 1 or more of the
                          conservation purposes specified in clause (i),
                          (ii), (iii), or (iv) of section 170(h)(4)(A) of
                          the Internal Revenue Code of 1986;
                              ``(ii) is an organization described in section
                          501(c)(3) of that Code that is exempt from
                          taxation under section 501(a) of that Code;

    [[Page 116 STAT. 268]]

                              ``(iii) is described in section 509(a)(2) of
                          that Code; or
                              ``(iv) is described in section 509(a)(3), and
                          is controlled by an organization described in
                          section 509(a)(2), of that Code.
                ``(2) 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 an eligible entity.
                        ``(B) Inclusions.--The term `eligible land'
                    includes, on a farm or ranch--
                              ``(i) cropland;
                              ``(ii) rangeland;
                              ``(iii) grassland;
                              ``(iv) pasture land; and
                              ``(v) forest land that is an incidental part
                          of an agricultural operation, as determined by the
                          Secretary.
                ``(3) 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).
                ``(4) Program.--The term `program' means the farmland
            protection program established under section 1238I(a).

    ``SEC. 1238I. <<NOTE: 16 USC 3838i.>> FARMLAND PROTECTION.

        ``(a) In General.--The Secretary, acting through the Natural
    Resources Conservation Service, shall establish and carry out a farmland
    protection program under which the Secretary shall purchase conservation
    easements or other interests in eligible land that is subject to a
    pending offer from an eligible entity 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.
        ``(c) Cost Sharing.--
                ``(1) Farmland protection.--
                        ``(A) Share provided under this subsection.--The
                    share of the cost of purchasing a conservation easement
                    or other interest in eligible land described in
                    subsection (a) provided under section 1241(d) shall not
                    exceed 50 percent of the appraised fair market value of
                    the conservation easement or other interest in eligible
                    land.
                        ``(B) Share not provided under this subsection.--As
                    part of the share of the cost of purchasing a
                    conservation easement or other interest in eligible land
                    described in subsection (a) that is not provided under
                    section 1241(d), an eligible entity may include a
                    charitable donation by the private landowner from which
                    the eligible land is to be purchased of not more than 25
                    percent of the fair

    [[Page 116 STAT. 269]]

                    market value of the conservation easement or other
                    interest in eligible land.
                ``(2) Bidding down.--If the Secretary determines that 2 or
            more applications for the purchase of a conservation easement or
            other interest in eligible land described in subsection (a) are
            comparable in achieving the purposes of this section, the
            Secretary shall not assign a higher priority to any 1 of those
            applications solely on the basis of lesser cost to the farmland
            protection program established under subsection (a).

    ``SEC. 1238J. <<NOTE: 16 USC 3838j.>> FARM VIABILITY PROGRAM.

        ``(a) In General.--The Secretary may provide to eligible entities
    identified by the Secretary grants for use in carrying out farm
    viability programs developed by the eligible entities and approved by
    the Secretary.
        ``(b) Authorization of Appropriations.--There are authorized to be
    appropriated to the Secretary to carry out this section such sums as are
    necessary for each of fiscal years 2002 through 2007.''.
        (b) Conforming Amendments.--
                (1) In general.--
                        (A) Section 388 of the Federal Agriculture
                    Improvement and Reform Act of 1996 (16 U.S.C. 3830 note;
                    Public Law 104-127) is repealed.
                        (B) Section 211 of the Agriculture Risk Protection
                    Act of 2000 (16 U.S.C. 3830 note; Public Law 106-224) is
                    amended--
                              (i) by striking subsection (a); and
                              (ii) in subsection (b)--
                                        (I) by striking the subsection
                                    designation and the subsection heading;
                                        (II) by redesignating paragraphs
                                    (1), (2), and (3) as subsections (a),
                                    (b), and (c), respectively, and
                                    indenting appropriately;
                                        (III) in subsection (a) (as so
                                    redesignated), by redesignating
                                    subparagraphs (A), (B), and (C) as
                                    paragraphs (1), (2), and (3),
                                    respectively, and indenting
                                    appropriately;
                                        (IV) in subsection (b) (as so
                                    redesignated), by striking
                                    ``assistance'' and inserting
                                    ``Assistance''; and
                                        (V) by striking ``subsection'' each
                                    place it appears and inserting
                                    ``section''.
                (2) Effect <<NOTE: 16 USC 3830 note.>>  on contracts.--The
            amendment made by paragraph (1)(A) shall have no effect on any
            contract entered into under section 388 of the Federal
            Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830
            note) that is in effect as of the date of enactment of this Act.

    SEC. 2504. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

        Subtitle H of title XV of the Agriculture and Food Act of 1981 (16
    U.S.C. 3451 et seq.) is amended to read as follows:

    [[Page 116 STAT. 270]]

           ``Subtitle H--Resource Conservation and Development Program

    ``SEC. 1528. <<NOTE: 16 USC 3451.>> DEFINITIONS.

        ``In this subtitle:
                ``(1) Area plan.--The term `area plan' means a resource
            conservation and use plan developed through a planning process
            by a council for a designated area of 1 or more States, or of
            land under the jurisdiction of an Indian tribe, that includes 1
            or more of the following elements:
                        ``(A) A land conservation element, the purpose of
                    which is to control erosion and sedimentation.
                        ``(B) A water management element that provides 1 or
                    more clear environmental or conservation benefits, the
                    purpose of which is to provide for--
                              ``(i) the conservation, use, and quality of
                          water, including irrigation and rural water
                          supplies;
                              ``(ii) the mitigation of floods and high water
                          tables;
                              ``(iii) the repair and improvement of
                          reservoirs;
                              ``(iv) the improvement of agricultural water
                          management; and
                              ``(v) the improvement of water quality.
                        ``(C) A community development element, the purpose
                    of which is to improve--
                              ``(i) the development of resources-based
                          industries;
                              ``(ii) the protection of rural industries from
                          natural resource hazards;
                              ``(iii) the development of adequate rural
                          water and waste disposal systems;
                              ``(iv) the improvement of recreation
                          facilities;
                              ``(v) the improvement in the quality of rural
                          housing;
                              ``(vi) the provision of adequate health and
                          education facilities;
                              ``(vii) the satisfaction of essential
                          transportation and communication needs; and
                              ``(viii) the promotion of food security,
                          economic development, and education.
                        ``(D) A land management element, the purpose of
                    which is--
                              ``(i) energy conservation, including the
                          production of energy crops;
                              ``(ii) the protection of agricultural land, as
                          appropriate, from conversion to other uses;
                              ``(iii) farmland protection; and
                              ``(iv) the protection of fish and wildlife
                          habitats.
                ``(2) Board.--The term `Board' means the Resource
            Conservation and Development Policy Advisory Board established
            under section 1533(a).
                ``(3) Council.--The term `council' means a nonprofit entity
            (including an affiliate of the entity) operating in a State that
            is--
                        ``(A) established by volunteers or representatives
                    of States, local units of government, Indian tribes, or
                    local nonprofit organizations to carry out an area plan
                    in a designated area; and

    [[Page 116 STAT. 271]]

                        ``(B) designated by the chief executive officer or
                    legislature of the State to receive technical assistance
                    and financial assistance under this subtitle.
                ``(4) Designated area.--The term `designated area' means a
            geographic area designated by the Secretary to receive technical
            assistance and financial assistance under this subtitle.
                ``(5) Financial assistance.--The term `financial assistance'
            means a grant or loan provided by the Secretary (or the
            Secretary and other Federal agencies) to, or a cooperative
            agreement entered into by the Secretary (or the Secretary and
            other Federal agencies) with, a council, or association of
            councils, to carry out an area plan in a designated area,
            including assistance provided for planning, analysis,
            feasibility studies, training, education, and other activities
            necessary to carry out the area plan.
                ``(6) 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).
                ``(7) Local unit of government.--The term `local unit of
            government' means--
                        ``(A) any county, city, town, township, parish,
                    village, or other general-purpose subdivision of a
                    State; and
                        ``(B) any local or regional special district or
                    other limited political subdivision of a State,
                    including any soil conservation district, school
                    district, park authority, and water or sanitary
                    district.
                ``(8) Nonprofit organization.--The term `nonprofit
            organization' means any organization that is--
                        ``(A) described in section 501(c) of the Internal
                    Revenue Code of 1986; and
                        ``(B) exempt from taxation under section 501(a) of
                    the Internal Revenue Code of 1986.
                ``(9) Planning process.--The term `planning process' means
            actions taken by a council to develop and carry out an effective
            area plan in a designated area, including development of the
            area plan, goals, purposes, policies, implementation activities,
            evaluations and reviews, and the opportunity for public
            participation in the actions.
                ``(10) Project.--The term `project' means a project that is
            carried out by a council to achieve any of the elements of an
            area plan.
                ``(11) Secretary.--The term `Secretary' means the Secretary
            of Agriculture.
                ``(12) State.--The term `State' means--
                        ``(A) any State;
                        ``(B) the District of Columbia; or
                        ``(C) any territory or possession of the United
                    States.
                ``(13) Technical assistance.--The term `technical
            assistance' means any service provided by the Secretary or agent
            of the Secretary, including--
                        ``(A) inventorying, evaluating, planning, designing,
                    supervising, laying out, and inspecting projects;
                        ``(B) providing maps, reports, and other documents
                    associated with the services provided;
                        ``(C) providing assistance for the long-term
                    implementation of area plans; and

    [[Page 116 STAT. 272]]

                        ``(D) providing services of an agency of the
                    Department of Agriculture to assist councils in
                    developing and carrying out area plans.

    ``SEC. 1529. <<NOTE: 16 USC 3452.>> RESOURCE CONSERVATION AND
                DEVELOPMENT PROGRAM.

        ``The <<NOTE: Establishment.>> Secretary shall establish a resource
    conservation and development program under which the Secretary shall
    provide technical assistance and financial assistance to councils to
    develop and carry out area plans and projects in designated areas--
                ``(1) to conserve and improve the use of land, develop
            natural resources, and improve and enhance the social, economic,
            and environmental conditions in primarily rural areas of the
            United States; and
                ``(2) to encourage and improve the capability of State,
            units of government, Indian tribes, nonprofit organizations, and
            councils to carry out the purposes described in paragraph (1).

    ``SEC. 1530. <<NOTE: 16 USC 3453.>> SELECTION OF DESIGNATED AREAS.

        ``The Secretary shall select designated areas for assistance under
    this subtitle on the basis of the elements of area plans.

    ``SEC. 1531. <<NOTE: 16 USC 3454.>> POWERS OF THE SECRETARY.

        ``In carrying out this subtitle, the Secretary may--
                ``(1) provide technical assistance to any council to assist
            in developing and implementing an area plan for a designated
            area;
                ``(2) cooperate with other departments and agencies of the
            Federal Government, States, local units of government, local
            Indian tribes, and local nonprofit organizations in conducting
            surveys and inventories, disseminating information, and
            developing area plans;
                ``(3) assist in carrying out an area plan approved by the
            Secretary for any designated area by providing technical
            assistance and financial assistance to any council; and
                ``(4) enter into agreements with councils in accordance with
            section 1532.

    ``SEC. 1532. <<NOTE: 16 USC 3455.>> ELIGIBILITY; TERMS AND CONDITIONS.

        ``(a) Eligibility.--Technical assistance and financial assistance
    may be provided by the Secretary under this subtitle to any council to
    assist in carrying out a project specified in an area plan approved by
    the Secretary only if--
                ``(1) the council agrees in writing--
                        ``(A) to carry out the project; and
                        ``(B) to finance or arrange for financing of any
                    portion of the cost of carrying out the project for
                    which financial assistance is not provided by the
                    Secretary under this subtitle;
                ``(2) the project is included in an area plan and is
            approved by the council;
                ``(3) the Secretary determines that assistance is necessary
            to carry out the area plan;
                ``(4) the project provided for in the area plan is
            consistent with any comprehensive plan for the area;
                ``(5) the cost of the land or an interest in the land
            acquired or to be acquired under the plan by any State, local
            unit of government, Indian tribe, or local nonprofit
            organization

    [[Page 116 STAT. 273]]

            is borne by the State, local unit of government, Indian tribe,
            or local nonprofit organization, respectively; and
                ``(6) the State, local unit of government, Indian tribe, or
            local nonprofit organization participating in the area plan
            agrees to maintain and operate the project.

        ``(b) Loans.--
                ``(1) In general.--Subject to paragraphs (2) and (3), a loan
            made under this subtitle shall be made on such terms and
            conditions as the Secretary may prescribe.
                ``(2) Term.--A loan for a project made under this subtitle
            shall have a term of not more than 30 years after the date of
            completion of the project.
                ``(3) Interest rate.--A loan made under this subtitle shall
            bear interest at the average rate of interest paid by the United
            States on obligations of a comparable term, as determined by the
            Secretary of the Treasury.

        ``(c) Approval by Secretary.--Technical assistance and financial
    assistance under this subtitle may not be made available to a council to
    carry out an area plan unless the area plan has been submitted to and
    approved by the Secretary.
        ``(d) Withdrawal.--The Secretary may withdraw technical assistance
    and financial assistance with respect to any area plan if the Secretary
    determines that the assistance is no longer necessary or that sufficient
    progress has not been made toward developing or implementing the
    elements of the area plan.

    ``SEC. 1533. <<NOTE: 16 USC 3456.>>  RESOURCE CONSERVATION AND
                DEVELOPMENT POLICY ADVISORY BOARD.

        ``(a) Establishment.--The Secretary shall establish within the
    Department of Agriculture a Resource Conservation and Development Policy
    Advisory Board.
        ``(b) Composition.--
                ``(1) In general.--The Board shall be composed of at least 7
            employees of the Department of Agriculture selected by the
            Secretary.
                ``(2) Chairperson.--A member of the Board shall be
            designated by the Secretary to serve as chairperson of the
            Board.

        ``(c) Duties.--The Board shall advise the Secretary regarding the
    administration of this subtitle, including the formulation of policies
    for carrying out this subtitle.

    ``SEC. 1534. <<NOTE: 16 USC 3457.>> EVALUATION OF PROGRAM.

        ``(a) In General.--The Secretary, in consultation with councils,
    shall evaluate the program established under this subtitle to determine
    whether the program is effectively meeting the needs of, and the
    purposes identified by, States, units of government, Indian tribes,
    nonprofit organizations, and councils participating in, or served by,
    the program.
        ``(b) Report.--Not <<NOTE: Deadline.>> later than June 30, 2005, the
    Secretary shall submit to the Committee on Agriculture of the House of
    Representatives and the Committee on Agriculture, Nutrition, and
    Forestry of the Senate a report describing the results of the
    evaluation, together with any recommendations of the Secretary for
    continuing, terminating, or modifying the program.

    [[Page 116 STAT. 274]]

    ``SEC. 1535. <<NOTE: 16 USC 3458.>> LIMITATION ON ASSISTANCE.

        ``In carrying out this subtitle, the Secretary shall provide
    technical assistance and financial assistance with respect to not more
    than 450 active designated areas.

    ``SEC. 1536. <<NOTE: 16 USC 3459.>> SUPPLEMENTAL AUTHORITY OF THE
                SECRETARY.

        ``The authority of the Secretary under this subtitle to assist
    councils in the development and implementation of area plans shall be
    supplemental to, and not in lieu of, any authority of the Secretary
    under any other provision of law.

    ``SEC. 1537. <<NOTE: 16 USC 3460.>> AUTHORIZATION OF APPROPRIATIONS.

        ``(a) In General.--There are authorized to be such sums as are
    necessary to carry out this subtitle.
        ``(b) Loans.--The Secretary shall not use more than $15,000,000 of
    any funds made available for a fiscal year to make loans under this
    subtitle.
        ``(c) Availability.--Funds appropriated to carry out this subtitle
    shall remain available until expended.''.

    SEC. 2505. SMALL WATERSHED REHABILITATION PROGRAM.

        Section 14 of the Watershed Protection and Flood Prevention Act (16
    U.S.C. 1012) is amended by striking subsection (h) and inserting the
    following:
        ``(h) Funding.--
                ``(1) Funds of commodity credit corporation.--In carrying
            out this section, of the funds of the Commodity Credit
            Corporation, the Secretary shall make available, to remain
            available until expended--
                        ``(A) $45,000,000 for fiscal year 2003;
                        ``(B) $50,000,000 for fiscal year 2004;
                        ``(C) $55,000,000 for fiscal year 2005;
                        ``(D) $60,000,000 for fiscal year 2006;
                        ``(E) $65,000,000 for fiscal year 2007; and
                        ``(F) $0 for fiscal year 2008.
                ``(2) Authorization of appropriations.--In addition to
            amounts made available under paragraph (1), there are authorized
            to be appropriated to the Secretary to carry out this section,
            to remain available until expended--
                        ``(A) $45,000,000 for fiscal year 2003;
                        ``(B) $55,000,000 for fiscal year 2004;
                        ``(C) $65,000,000 for fiscal year 2005;
                        ``(D) $75,000,000 for fiscal year 2006; and
                        ``(E) $85,000,000 for fiscal year 2007.''.

    SEC. 2506. USE OF SYMBOLS, SLOGANS, AND LOGOS.

        Section 356 of the Federal Agriculture Improvement Act of 1996 (16
    U.S.C. <<NOTE: 16 USC 5805.>>  5801 et seq.) is amended--
                (1) in subsection (c)--
                        (A) by redesignating paragraphs (4) through (7) as
                    paragraphs (5) through (8), respectively; and
                        (B) by inserting after paragraph (3) the following:
                ``(4) on the written approval of the Secretary, to use,
            license, or transfer symbols, slogans, and logos of the
            Foundation (exclusive of any symbol or logo of a governmental
            entity);''; and
                (2) in subsection (d), by adding at the end the following:
                ``(3) Use of symbols, slogans, and logos of the
            foundation.--

    [[Page 116 STAT. 275]]

                        ``(A) In general.--The Secretary may authorize the
                    Foundation to use, license, or transfer symbols,
                    slogans, and logos of the Foundation.
                        ``(B) Income.--
                              ``(i) In general.--All revenue received by the
                          Foundation from the use, licensing, or transfer of
                          symbols, slogans, and logos of the Foundation
                          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. 2507. <<NOTE: 43 USC 2211 note.>>  DESERT TERMINAL LAKES.

        ``(a) In General.--Subject to subsection (b), as soon as practicable
    after the date of enactment of this Act, the Secretary of Agriculture
    shall transfer $200,000,000 of the funds of the Commodity Credit
    Corporation to the Bureau of Reclamation Water and Related Resources
    Account, which funds shall--
                ``(1) be used by the Secretary of the Interior, acting
            through the Commissioner of Reclamation, to provide water to at-
            risk natural desert terminal lakes; and
                ``(2) remain available until expended.

        ``(b) Limitation.--The funds described in subsection (a) shall not
    be used to purchase or lease water rights.

             Subtitle G--Conservation Corridor Demonstration Program

    SEC. 2601. <<NOTE: 16 USC 3801 note.>> DEFINITIONS.

        In this subtitle:
                (1) Delmarva peninsula.--The term ``Delmarva Peninsula''
            means land in the States of Delaware, Maryland, and Virginia
            located on the east side of the Chesapeake Bay.
                (2) Demonstration program.--The term ``demonstration
            program'' means the Conservation Corridor Demonstration Program
            established under this subtitle.
                (3) Conservation corridor plan; plan.--The terms
            ``conservation corridor plan'' and ``plan'' mean a conservation
            corridor plan required to be submitted and approved as a
            condition for participation in the demonstration program.
                (4) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.

    SEC. 2602. <<NOTE: 16 USC 3801 note.>> CONSERVATION CORRIDOR
                DEMONSTRATION PROGRAM.

        (a) Establishment.--The Secretary shall carry out a demonstration
    program, to be known as the ``Conservation Corridor Demonstration
    Program'', under which any of the States of Delaware, Maryland, and
    Virginia, a local government of any 1 of those States with jurisdiction
    over land on the Delmarva Peninsula, or a combination of those States,
    may submit a conservation corridor plan to integrate agriculture and
    forestry conservation programs of the Department of Agriculture with
    State and local efforts to address farm conservation needs.
        (b) Submission of Conservation Corridor Plan.--

    [[Page 116 STAT. 276]]

                (1) Submission and proposal.--To be eligible to participate
            in the demonstration program, a State, local government, or
            combination of States referred to in subsection (a) shall--
                        (A) submit to the Secretary a conservation corridor
                    plan that--
                              (i) proposes specific criteria and commitment
                          of resources in the geographic region designated
                          in the plan; and
                              (ii) describes how the linkage of Federal,
                          State, and local resources will improve--
                                        (I) the economic viability of
                                    agriculture; and
                                        (II) the environmental integrity of
                                    the watersheds in the Delmarva
                                    Peninsula; and
                        (B) demonstrate to the Secretary that, in developing
                    the plan, the State, local government, or combination of
                    States has solicited and taken into account the views of
                    local residents.
                (2) Draft memorandum of agreement.--If the conservation
            corridor plan is submitted by more than 1 State, the plan shall
            provide a draft memorandum of agreement among entities in each
            submitting State.

        (c) Review <<NOTE: Deadline.>> of Plan.--Not later than 90 days
    after the date of receipt of a conservation corridor plan, the
    Secretary--
                (1) shall review the plan; and
                (2) may approve the plan for implementation under this
            subtitle if the Secretary determines that the plan meets the
            requirements specified in subsection (d).

        (d) Criteria for Approval.--The Secretary may approve a conservation
    corridor plan only if, as determined by the Secretary, the plan provides
    for each of the following:
                (1) Voluntary actions.--Actions taken under the plan--
                        (A) are voluntary;
                        (B) require the consent of willing landowners; and
                        (C) provide a mechanism by which the landowner may
                    withdraw such consent without adverse consequences other
                    than the loss of any payments to the landowner
                    conditioned on continued enrollment of the land.
                (2) Land of high conservation value.--Criteria specified in
            the plan ensure that land enrolled in each conservation program
            incorporated through the plan are of exceptionally high
            conservation value, as determined by the Secretary.
                (3) No effect on unenrolled land.--The enrollment of land in
            a conservation program incorporated through the plan will
            neither--
                        (A) adversely affect any adjacent land not so
                    enrolled; nor
                        (B) create any buffer zone on such unenrolled land.
                (4) Greater benefits.--The conservation programs
            incorporated through the plan provide benefits greater than the
            benefits that would likely be achieved through individual
            application of the conservation programs.
                (5) Sufficient staffing.--Staffing, considering both Federal
            and non-Federal resources, is sufficient to ensure success of
            the plan.

    [[Page 116 STAT. 277]]

    SEC. 2603. <<NOTE: 16 USC 3801 note.>>  IMPLEMENTATION OF CONSERVATION
                CORRIDOR PLAN.

        (a) Memorandum of Agreement.--On approval of a conservation corridor
    plan, the Secretary may enter into a memorandum of agreement with the
    State, local government, or combination of States that submitted the
    plan to--
                (1) guarantee specific program resources for implementation
            of the plan;
                (2) establish various compensation rates to the extent that
            the parties to the agreement consider justified; and
                (3) provide streamlined and integrated paperwork
            requirements.

        (b) Continued Compliance With Plan Approval Criteria.--The Secretary
    shall terminate the memorandum of agreement entered into under
    subsection (a) with respect to an approved conservation corridor plan
    and cease the provision of resources for implementation of the plan if
    the Secretary determines that, in the implementation of the plan--
                (1) the State, local government, or combination of States
            that submitted the plan has deviated from--
                        (A) the plan;
                        (B) the criteria specified in section 2602(d) on
                    which approval of the plan was conditioned; or
                        (C) the cost-sharing requirements of section 2604(a)
                    or any other condition of the plan; or
                (2) the economic viability of agriculture in the geographic
            region designated in the plan is being hindered.

        (c) Progress Report.--At the end of the 3-year period that begins on
    the date on which funds are first provided with respect to a
    conservation corridor plan under the demonstration program, the State,
    local government, or combination of States that submitted the plan shall
    submit to the Secretary--
                (1) a report on the effectiveness of the activities carried
            out under the plan; and
                (2) an evaluation of the economic viability of agriculture
            in the geographic region designated in the plan.

        (d) Duration.--The demonstration program shall be carried out for
    not less than 3 nor more than 5 years beginning on the date on which
    funds are first provided under the demonstration program.

    SEC. 2604. <<NOTE: 16 USC 3801 note.>> FUNDING REQUIREMENTS.

        (a) Cost Sharing.--
                (1) Required non-federal share.--Subject to paragraph (2),
            as a condition on the approval of a conservation corridor plan,
            the Secretary shall require the State and local participants to
            contribute financial resources sufficient to cover at least 50
            percent of the total cost of the activities carried out under
            the plan.
                (2) Exception.--The Secretary may reduce the cost-sharing
            requirement in the case of a specific project or activity under
            the demonstration program on good cause and on demonstration
            that the project or activity is likely to achieve extraordinary
            natural resource benefits.

        (b) Reservation of Funds.--The Secretary may consider directing
    funds on a priority basis to the demonstration program and to projects
    in areas identified by the plan.

    [[Page 116 STAT. 278]]

        (c) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this subtitle for
    each of fiscal years 2002 through 2007.

                     Subtitle H--Funding and Administration

    SEC. 2701. FUNDING AND ADMINISTRATION.

        Subtitle E of the Food Security Act of 1985 is amended by striking
    sections 1241 and 1242 (16 U.S.C. 3841, 3842) and inserting the
    following:

    ``SEC. 1241. <<NOTE: 16 USC 3841.>> COMMODITY CREDIT CORPORATION.

        ``(a) In General.--For each of fiscal years 2002 through 2007, the
    Secretary shall use the funds, facilities, and authorities of the
    Commodity Credit Corporation to carry out the following programs under
    subtitle D (including the provision of technical assistance):
                ``(1) The conservation reserve program under subchapter B of
            chapter 1.
                ``(2) The wetlands reserve program under subchapter C of
            chapter 1.
                ``(3) The conservation security program under subchapter A
            of chapter 2.
                ``(4) The farmland protection program under subchapter B of
            chapter 2, using, to the maximum extent practicable--
                        ``(A) $50,000,000 in fiscal year 2002;
                        ``(B) $100,000,000 in fiscal year 2003;
                        ``(C) $125,000,000 in each of fiscal years 2004 and
                    2005;
                        ``(D) $100,000,000 in fiscal year 2006; and
                        ``(E) $97,000,000 in fiscal year 2007.
                ``(5) The grassland reserve program under subchapter C of
            chapter 2, using, to the maximum extent practicable $254,000,000
            for the period of fiscal years 2003 through 2007.
                ``(6) The environmental quality incentives program under
            chapter 4, using, to the maximum extent practicable--
                        ``(A) $400,000,000 in fiscal year 2002;
                        ``(B) $700,000,000 in fiscal year 2003;
                        ``(C) $1,000,000,000 in fiscal year 2004;
                        ``(D) $1,200,000,000 in each of fiscal years 2005
                    and 2006; and
                        ``(E) $1,300,000,000 in fiscal year 2007.
                ``(7) The wildlife habitat incentives program under section
            1240N, using, to the maximum extent practicable--
                        ``(A) $15,000,000 in fiscal year 2002;
                        ``(B) $30,000,000 in fiscal year 2003;
                        ``(C) $60,000,000 in fiscal year 2004; and
                        ``(D) $85,000,000 in each of fiscal years 2005
                    through 2007.

        ``(b) Section 11.--Nothing in this section affects the limit on
    expenditures for technical assistance imposed by section 11 of the
    Commodity Credit Corporation Charter Act (15 U.S.C. 714i).
        ``(c) Regional Equity.--Before April 1 of each fiscal year, the
    Secretary shall give priority for funding under the conservation

    [[Page 116 STAT. 279]]

    programs under subtitle D (excluding the conservation reserve program
    under subchapter B of chapter 1, the wetlands reserve program under
    subchapter C of chapter 1, and the conservation security program under
    subchapter A of chapter 2) to approved applications in any State that
    has not received, for the fiscal year, an aggregate amount of at least
    $12,000,000 for those conservation programs.

    ``SEC. 1242. <<NOTE: 16 USC 3842.>>  DELIVERY OF TECHNICAL ASSISTANCE.

        ``(a) In General.--The Secretary shall provide technical assistance
    under this title to a producer eligible for that assistance--
                ``(1) directly; or
                ``(2) at the option of the producer, through a payment, as
            determined by the Secretary, to the producer for an approved
            third party, if available.

        ``(b) Certification of Third-Party Providers.--
                ``(1) In general.--Not <<NOTE: Deadline.>> later than 180
            days after the date of enactment of the Farm Security and Rural
            Investment Act of 2002, the Secretary shall, by regulation,
            establish a system for--
                        ``(A) approving individuals and entities to provide
                    technical assistance to carry out programs under this
                    title (including criteria for the evaluation of
                    providers or potential providers of technical
                    assistance); and
                        ``(B) establishing the amounts and methods for
                    payments for that assistance.
                ``(2) Expertise.--In promulgating regulations to carry out
            this subsection the Secretary shall ensure that persons with
            expertise in the technical aspects of conservation planning,
            watershed planning, environmental engineering (including
            commercial entities, nonprofit entities, State or local
            governments or agencies, and other Federal agencies), are
            eligible to become approved providers of the technical
            assistance.
                ``(3) Interim assistance.--
                        ``(A) In general.--A person that has provided
                    technical assistance in accordance with an agreement
                    between the person and the Secretary before the date of
                    enactment of the Farm Security and Rural Investment Act
                    of 2002 may continue to provide technical assistance
                    under this section until the date on which the Secretary
                    establishes the system described in paragraph (1).
                        ``(B) Evaluation.--If a person described in
                    subparagraph (A) seeks to continue to provide technical
                    assistance after the date referred to in subparagraph
                    (A), the Secretary shall evaluate the person using
                    criteria referred to in paragraph (1).
                ``(4) Non-federal assistance.--The Secretary may request the
            services of, and enter into cooperative agreements or contracts
            with, non-Federal entities to assist the Secretary in providing
            technical assistance necessary to develop and implement
            conservation programs under this title.''.

    SEC. 2702. <<NOTE: 16 USC 3801 note.>> REGULATIONS.

        (a) In General.--Except <<NOTE: Deadline.>>  as otherwise provided
    in this title or an amendment made by this title, not later than 90 days
    after the date of enactment of this Act, the Secretary of Agriculture,
    in consultation with the Commodity Credit Corporation, shall promulgate
    such regulations as are necessary to implement this title.

    [[Page 116 STAT. 280]]

        (b) Applicable Authority.--The promulgation of regulations under
    subsection (a) and administration of this title--
                (1) shall--
                        (A) be carried out without regard to chapter 35 of
                    title 44, United States Code (commonly known as the
                    Paperwork Reduction Act); and
                        (B) the Statement of Policy of the Secretary of
                    Agriculture effective July 24, 1971 (36 Fed. Reg. 13804)
                    relating to notices of proposed rulemaking and public
                    participation in rulemaking; and
                (2) may--
                        (A) be promulgated with an opportunity for notice
                    and comment; or
                        (B) if determined to be appropriate by the Secretary
                    of Agriculture or the Commodity Credit Corporation, as
                    an interim rule effective on publication with an
                    opportunity for notice and comment.

        (c) Congressional Review of Agency Rulemaking.--In carrying out this
    section, the Secretary shall use the authority provided under section
    808(2) of title 5, United States Code.

                                TITLE III--TRADE

     Subtitle A--Agricultural Trade Development and Assistance Act of 1954
                              and Related Statutes

    SEC. 3001. UNITED STATES POLICY.

        Section 2 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1691) is amended--
                (1) in paragraph (4), by striking ``and'' at the end;
                (2) in paragraph (5), by striking the period at the end and
            inserting ``; and''; and
                (3) by adding at the end the following:
                ``(6) prevent conflicts.''.

    SEC. 3002. PROVISION OF AGRICULTURAL COMMODITIES.

        Section 202 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1722) is amended--
                (1) in subsection (b), by adding at the end the following:
                ``(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, consistent with section 201, to assist
                    development of foreign countries.'';
                (2) in subsection (e)(1), by striking ``not less than
            $10,000,000, and not more than $28,000,000,'' and inserting
            ``not less than 5 percent nor more than 10 percent of the
            funds''; and
                (3) by adding at the end the following:

        ``(h) Streamlined Program Management.--

    [[Page 116 STAT. 281]]

                ``(1) Improvements.--Not <<NOTE: Deadline.>> later than 1
            year after the date of enactment of this subsection, the
            Administrator shall--
                        ``(A) streamline program procedures and guidelines
                    under this title for agreements with eligible
                    organizations for programs in 1 or more countries; and
                        ``(B) effective beginning with fiscal year 2004, to
                    the maximum extent practicable, incorporate the changes
                    into the procedures and guidelines for programs and the
                    guidelines for resource requests.
                ``(2) Streamlined procedures and guidelines.--In carrying
            out paragraph (1), the Administrator shall make improvements in
            the Office of Food for Peace management systems that include--
                        ``(A) expedition of and greater consistency in the
                    program review and approval process under this title;
                        ``(B) streamlining of information collection and
                    reporting systems by identifying the critical
                    information that needs to be monitored and reported on
                    by eligible organizations; and
                        ``(C) for approved programs, provision of greater
                    flexibility for an eligible organization to make
                    modifications in program activities to achieve program
                    results with streamlined procedures for reporting such
                    modifications.
                ``(3) Consultation.--
                        ``(A) In general.--Paragraphs (1) and (2) shall be
                    carried out in accordance with section 205 and
                    subsections (b) and (c) of section 207.
                        ``(B) Consultation with congressional committees.--
                    Not later than 180 days <<NOTE: Deadline.>> after the
                    date of enactment of this subsection, the Administrator
                    shall consult with 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 on progress made
                    in carrying out this subsection.
                ``(4) Report.--Not <<NOTE: Deadline.>> later than 270 days
            after the date of enactment of this subsection, 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 on the improvements made and
            planned upgrades in the information management, procurement, and
            financial management systems to administer this title.''.

    SEC. 3003. GENERATION AND USE OF CURRENCIES BY PRIVATE VOLUNTARY
                ORGANIZATIONS AND COOPERATIVES.

        Section 203 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1723) is amended--
                (1) in the section heading, by striking ``foreign'';
                (2) in subsection (a), by striking ``the recipient country,
            or in a country'' and inserting ``1 or more recipient countries,
            or 1 or more countries'';
                (3) in subsection (b)--
                        (A) by striking ``in recipient countries, or in
                    countries'' and inserting ``1 or more recipient
                    countries, or in 1 or more countries''; and
                        (B) by striking ``foreign currency'';

    [[Page 116 STAT. 282]]

                (4) in subsection (c)--
                        (A) by striking ``foreign currency''; and
                        (B) by striking ``the recipient country, or in a
                    country'' and inserting ``1 or more recipient countries,
                    or in 1 or more countries''; and
                (5) in subsection (d)--
                        (A) by striking ``Foreign currencies'' and inserting
                    ``Proceeds'';
                        (B) in paragraph (2)--
                              (i) by striking ``income generating'' and
                          inserting ``income-generating''; and
                              (ii) by striking ``the recipient country or
                          within a country'' and inserting ``1 or more
                          recipient countries or within 1 or more
                          countries''; and
                        (C) in paragraph (3)--
                              (i) by inserting a comma after ``invested'';
                          and
                              (ii) by inserting a comma after ``used''.

    SEC. 3004. LEVELS OF ASSISTANCE.

        Section 204(a) of the Agricultural Trade Development and Assistance
    Act of 1954 (7 U.S.C. 1724(a)) is amended--
                (1) by striking ``1996 through 2002'' each place it appears
            and inserting ``2002 through 2007'';
                (2) in paragraph (1), by striking ``2,025,000'' and
            inserting ``2,500,000''; and
                (3) in paragraph (2), by striking ``1,550,000 metric tons''
            and inserting ``1,875,000 metric tons''.

    SEC. 3005. FOOD AID CONSULTATIVE GROUP.

        Section 205(f) of the Agricultural Trade Development and Assistance
    Act of 1954 (7 U.S.C. 1725(f)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 3006. MAXIMUM LEVEL OF EXPENDITURES.

        Section 206 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1726) is repealed.

    SEC. 3007. ADMINISTRATION.

        Section 207 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1726a) is amended--
                (1) in subsection (a)--
                        (A) by redesignating paragraph (2) as paragraph (3);
                    and
                        (B) by striking paragraph (1) and inserting the
                    following:
                ``(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 <<NOTE: Deadline.>> later than 120 days
            after the date of receipt by the Administrator of a proposal
            submitted by an eligible organization under this title, the
            Administrator shall determine whether to accept the proposal.'';
                (2) in subsection (b), by striking ``guideline'' each place
            it appears and inserting ``guideline or annual policy
            guidance''; and
                (3) by adding at the end the following:

        ``(e) Timely Approval.--

    [[Page 116 STAT. 283]]

                ``(1) In general.--The Administrator is encouraged to
            finalize program agreements and resource requests for programs
            under this section before the beginning of each fiscal year.
                ``(2) Report.--Not <<NOTE: Deadline.>> 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.''.

    SEC. 3008. ASSISTANCE FOR STOCKPILING AND RAPID TRANSPORTATION,
                DELIVERY, AND DISTRIBUTION OF SHELF-STABLE PREPACKAGED
                FOODS.

        Section 208(f) of the Agricultural Trade Development and Assistance
    Act of 1954 (7 U.S.C. 1726b(f)) is amended by striking ``and 2002'' and
    inserting ``through 2007''.

    SEC. 3009. SALE PROCEDURE.

        (a) In General.--Section 403 of the Agricultural Trade Development
    and Assistance Act of 1954 (7 U.S.C. 1733) is amended--
                (1) in subsection (e)--
                        (A) by striking ``In carrying'' and inserting the
                    following:
                ``(1) In general.--In carrying''; and
                        (B) by adding at the end the following:
                ``(2) Sale price.--Sales of agricultural commodities
            described in paragraph (1) shall be made at a reasonable market
            price in the economy where the agricultural commodity is to be
            sold, as determined by the Secretary or the Administrator, as
            appropriate.''; and
                (2) by adding at the end the following:

        ``(l) Sale Procedure.--
                ``(1) In general.--Subsections (b) and (h) shall apply to
            sales of commodities in recipient countries to generate proceeds
            to carry out projects under--
                        ``(A) titles I and II;
                        ``(B) section 416(b) of the Agricultural Act of 1949
                    (7 U.S.C. 1431(b)); and
                        ``(C) the Food for Progress Act of 1985 (7 U.S.C.
                    1736o).
                ``(2) Currency.--A sale described in paragraph (1) may be
            made in United States dollars or other currencies.''.

        (b) Conforming Amendments.--
                (1) Section 416(b) of the Agricultural Act of 1949 (7 U.S.C.
            1431(b)) is amended by adding at the end the following:
                ``(10) Sale procedure.--In approving sales of commodities
            under this subsection, the Secretary shall follow the sale
            procedure described in section 403(l) of the Agricultural Trade
            Development and Assistance Act of 1954.''.
                (2) Subsection (f) of the Food for Progress Act of 1985 (7
            U.S.C. 1736o(f)) is amended by adding at the end the following:

    [[Page 116 STAT. 284]]

                ``(5) Sale procedure.--In making sales of eligible
            commodities under this section, the Secretary shall follow the
            sale procedure described in section 403(l) of the Agricultural
            Trade Development and Assistance Act of 1954.''.

    SEC. 3010. PREPOSITIONING.

        Section 407(c)(4) of the Agricultural Trade Development and
    Assistance Act of 1954 (7 U.S.C. 1736a(c)(4)) is amended by striking
    ``and 2002'' and inserting ``through 2007''.

    SEC. 3011. TRANSPORTATION AND RELATED COSTS.

        Section 407(c)(1) of the Agricultural Trade Development and
    Assistance Act of 1954 (7 U.S.C. 1736a(c)(1)) is amended--
                (1) by striking ``The Administrator'' and inserting the
            following:
                        ``(A) In general.--The Administrator''; and
                (2) by adding at the end the following:
                ``(B) Certain commodities made available for nonemergency
            assistance.--In the case of agricultural commodities made
            available for nonemergency assistance under title II for least
            developed countries that meet the poverty and other eligibility
            criteria established by the International Bank for
            Reconstruction and Development for financing under the
            International Development Association, the Administrator may pay
            the transportation costs incurred in moving the agricultural
            commodities from designated points of entry or ports of entry
            abroad to storage and distribution sites and associated storage
            and distribution costs.''.

    SEC. 3012. EXPIRATION DATE.

        Section 408 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1736b) is amended by striking ``2002'' and inserting
    ``2007''.

    SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS.

        Section 415 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1736g-2) is amended--
                (1) in the section heading, by striking ``pilot program.''
            and inserting ``programs.'';
                (2) in subsection (a)--
                        (A) by redesignating paragraphs (1) and (2) as
                    subparagraphs (A) and (B), respectively, and adjusting
                    the margins appropriately;
                        (B) by striking the first sentence and inserting the
                    following:
                ``(1) Programs.--Not <<NOTE: Deadline.>> later than
            September 30, 2003, the Administrator, in consultation with the
            Secretary, shall establish micronutrient fortification
            programs.''; and
                        (C) in the second sentence, by striking ``The
                    purpose of the program'' and inserting the following:
                ``(2) Purpose.--The purpose of a program''; and
                        (D) in paragraph (2) (as designated by subparagraph
                    (C))--
                              (i) in subparagraph (A), by striking ``and''
                          at the end;
                              (ii) in subparagraph (B)--
                                        (I) by striking ``whole''; and

    [[Page 116 STAT. 285]]

                                        (II) by striking the period at the
                                    end and inserting ``; and''; and
                              (iii) by adding at the end the following:
                        ``(C) assess and apply technologies and systems to
                    improve and ensure the quality, shelf life,
                    bioavailability, and safety of fortified food aid
                    commodities, and products of those commodities, that are
                    provided to developing countries, by using the same
                    mechanism that was used to assess the micronutrient
                    fortification program in the report entitled
                    `Micronutrient Compliance Review of Fortified P.L. 480
                    Commodities', published October 2001 with funds from the
                    Bureau for Humanitarian Response of the United States
                    Agency for International Development.'';
                (3) in subsection (b), by striking ``the pilot program'' and
            inserting ``a program under this section'';
                (4) in the first sentence of subsection (c)--
                        (A) by striking ``the pilot program, whole'' and
                    inserting ``a program,'';
                        (B) by striking ``the pilot program may'' and
                    inserting ``a program may'';
                        (C) by striking ``including'' and inserting ``such
                    as''; and
                        (D) by striking ``and iodine'' and inserting
                    ``iodine, and folic acid''; and
                (5) in subsection (d)--
                        (A) by striking ``the pilot program'' and inserting
                    ``programs''; and
                        (B) by striking ``2002'' and inserting ``2007''.

    SEC. 3014. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM.

        Section 501 of the Agricultural Trade Development and Assistance Act
    of 1954 (7 U.S.C. 1737) is amended to read as follows:

    ``SEC. 501. JOHN OGONOWSKI FARMER-TO-FARMER PROGRAM.

        ``(a) Definitions.--In this section:
                ``(1) Caribbean basin country.--The term `Caribbean Basin
            country' means a country eligible for designation as a
            beneficiary country under section 212 of the Caribbean Basin
            Economic Recovery Act (19 U.S.C. 2702).
                ``(2) Emerging market.--The term `emerging market' means a
            country that the Secretary determines--
                        ``(A) is taking steps toward a market-oriented
                    economy through the food, agriculture, or rural business
                    sectors of the economy of the country; and
                        ``(B) has the potential to provide a viable and
                    significant market for United States agricultural
                    commodities or products of United States agricultural
                    commodities.
                ``(3) Middle income country.--The term `middle income
            country' means a country that has developed economically to the
            point at which the country does not receive bilateral
            development assistance from the United States.
                ``(4) Sub-saharan african country.--The term `sub-Saharan
            African country' has the meaning given the term in section 107
            of the Trade and Development Act of 2000 (19 U.S.C. 3706).

        ``(b) Provision.--Notwithstanding any other provision of law, to
    further assist developing countries, middle-income countries, emerging
    markets, sub-Saharan African countries, and Caribbean

    [[Page 116 STAT. 286]]

    Basin countries to increase farm production and farmer incomes, the
    President may--
                ``(1) establish and administer a program, to be known as the
            `John Ogonowski Farmer-to-Farmer Program', of farmer-to-farmer
            assistance between the United States and such countries to
            assist in--
                        ``(A) increasing food production and distribution;
                    and
                        ``(B) improving the effectiveness of the farming and
                    marketing operations of agricultural producers in those
                    countries;
                ``(2) use United States agricultural producers,
            agriculturalists, colleges and universities (including
            historically black colleges and universities, land grant
            colleges or universities, and foundations maintained by colleges
            or universities), private agribusinesses, private organizations
            (including grassroots organizations with an established and
            demonstrated capacity to carry out such a bilateral exchange
            program), private corporations, and nonprofit farm organizations
            to work in conjunction with agricultural producers and farm
            organizations in those countries, on a voluntary basis--
                        ``(A) to improve agricultural and agribusiness
                    operations and agricultural systems in those countries,
                    including improving--
                              ``(i) animal care and health;
                              ``(ii) field crop cultivation;
                              ``(iii) fruit and vegetable growing;
                              ``(iv) livestock operations;
                              ``(v) food processing and packaging;
                              ``(vi) farm credit;
                              ``(vii) marketing;
                              ``(viii) inputs; and
                              ``(ix) agricultural extension; and
                        ``(B) to strengthen cooperatives and other
                    agricultural groups in those countries;
                ``(3) transfer the knowledge and expertise of United States
            agricultural producers and businesses, on an individual basis,
            to those countries while enhancing the democratic process by
            supporting private and public agriculturally related
            organizations that request and support technical assistance
            activities through cash and in-kind services;
                ``(4) to the maximum extent practicable, make grants to or
            enter into contracts or other cooperative agreements with
            private voluntary organizations, cooperatives, land grant
            universities, private agribusiness, or nonprofit farm
            organizations to carry out this section (except that any such
            contract or other agreement may obligate the United States to
            make outlays only to the extent that the budget authority for
            such outlays is available under subsection (d) or has otherwise
            been provided in advance in appropriation Acts);
                ``(5) coordinate programs established under this section
            with other foreign assistance programs and activities carried
            out by the United States; and
                ``(6) to the extent that local currencies can be used to
            meet the costs of a program established under this section,
            augment funds of the United States that are available for such a
            program through the use, within the country in which the program
            is being conducted, of--

    [[Page 116 STAT. 287]]

                        ``(A) foreign currencies that accrue from the sale
                    of agricultural commodities and products under this Act;
                    and
                        ``(B) local currencies generated from other types of
                    foreign assistance activities.

        ``(c) Special Emphasis on Sub-Saharan African and Caribbean Basin
    Countries.--
                ``(1) Findings.--Congress finds that--
                        ``(A) agricultural producers in sub-Saharan African
                    and Caribbean Basin countries need training in
                    agricultural techniques that are appropriate for the
                    majority of eligible agricultural producers in those
                    countries, including training in--
                              ``(i) standard growing practices;
                              ``(ii) insecticide and sanitation procedures;
                          and
                              ``(iii) other agricultural methods that will
                          produce increased yields of more nutritious and
                          healthful crops;
                        ``(B) agricultural producers in the United States
                    (including African-American agricultural producers) and
                    banking and insurance professionals have agribusiness
                    expertise that would be invaluable for agricultural
                    producers in sub-Saharan African and Caribbean Basin
                    countries;
                        ``(C) a commitment by the United States is
                    appropriate to support the development of a
                    comprehensive agricultural skills training program for
                    those agricultural producers that focuses on--
                              ``(i) improving knowledge of insecticide and
                          sanitation procedures to prevent crop destruction;
                              ``(ii) teaching modern agricultural techniques
                          that would facilitate a continual analysis of crop
                          production, including--
                                        ``(I) the identification and
                                    development of standard growing
                                    practices; and
                                        ``(II) the establishment of systems
                                    for recordkeeping;
                              ``(iii) the use and maintenance of
                          agricultural equipment that is appropriate for the
                          majority of eligible agricultural producers in
                          sub-Saharan African or Caribbean Basin countries;
                              ``(iv) the expansion of small agricultural
                          operations into agribusiness enterprises by
                          increasing access to credit for agricultural
                          producers through--
                                        ``(I) the development and use of
                                    village banking systems; and
                                        ``(II) the use of agricultural risk
                                    insurance pilot products; and
                              ``(v) marketing crop yields to prospective
                          purchasers (including businesses and individuals)
                          for local needs and export; and
                        ``(D) programs that promote the exchange of
                    agricultural knowledge and expertise through the
                    exchange of American and foreign agricultural producers
                    have been effective in promoting improved agricultural
                    techniques and food security and the extension of
                    additional resources to such farmer-to-farmer exchanges
                    is warranted.
                ``(2) Goals for programs carried out in sub-saharan african
            and caribbean countries.--The goals of programs

    [[Page 116 STAT. 288]]

            carried out under this section in sub-Saharan African and
            Caribbean Basin countries shall be--
                        ``(A) to expand small agricultural operations in
                    those countries into agribusiness enterprises by
                    increasing access to credit for agricultural producers
                    through--
                              ``(i) the development and use of village
                          banking systems; and
                              ``(ii) the use of agricultural risk insurance
                          pilot products;
                        ``(B) to provide training to agricultural producers
                    in those countries that will--
                              ``(i) enhance local food security; and
                              ``(ii) help mitigate and alleviate hunger;
                        ``(C) to provide training to agricultural producers
                    in those countries in groups to encourage participants
                    to share and pass on to other agricultural producers in
                    the home communities of the participants, the
                    information and skills obtained from the training,
                    rather than merely retaining the information and skills
                    for the personal enrichment of the participants; and
                        ``(D) to maximize the number of beneficiaries of the
                    programs in sub-Saharan African and Caribbean Basin
                    countries.

        ``(d) Minimum Funding.--Notwithstanding any other provision of law,
    in addition to any funds that may be specifically appropriated to carry
    out this section, not less than 0.5 percent of the amounts made
    available for each of fiscal years 2002 through 2007 to carry out this
    Act shall be used to carry out programs under this section, with--
                ``(1) not less than 0.2 percent to be used for programs in
            developing countries; and
                ``(2) not less than 0.1 percent to be used for programs in
            sub-Saharan African and Caribbean Basin countries.

        ``(e) Authorization of Appropriations.--
                ``(1) In general.--There is authorized to be appropriated to
            carry out programs under this section in sub-Saharan African and
            Caribbean Basin countries $10,000,000 for each of fiscal years
            2002 through 2007.
                ``(2) Administrative costs.--Not more than 5 percent of the
            funds made available for a fiscal year under paragraph (1) may
            be used to pay administrative costs incurred in carrying out
            programs in sub-Saharan African and Caribbean Basin
            countries.''.

                   Subtitle B--Agricultural Trade Act of 1978

    SEC. 3101. EXPORTER ASSISTANCE INITIATIVE.

        Title I of the Agricultural Trade Act of 1978 (7 U.S.C. 5601 et
    seq.) is amended by adding at the end the following:

    ``SEC. 107. <<NOTE: 7 USC 5607.>>  EXPORTER ASSISTANCE INITIATIVE.

        ``To provide a comprehensive source of information to facilitate
    exports of United States agricultural commodities, the Secretary shall
    maintain on a website on the Internet information to assist exporters
    and potential exporters of United States agricultural commodities.''.

    [[Page 116 STAT. 289]]

    SEC. 3102. EXPORT CREDIT GUARANTEE PROGRAM.

        (a) Terms of Supplier Credit Program.--Section 202(a) of the
    Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)) is amended by adding
    at the end the following:
                ``(3) Extended supplier credits.--
                        ``(A) In general.--Subject to the appropriation of
                    funds under subparagraph (B), in carrying out this
                    section, the Commodity Credit Corporation may issue
                    guarantees for the repayment of credit made available
                    for a period of more than 180 days, but not more than
                    360 days, by a United States exporter to a buyer in a
                    foreign country.
                        ``(B) Authorization of appropriations.--There are
                    authorized to be appropriated such sums as are necessary
                    to fund the additional costs attributable to the portion
                    of any guarantee issued under this paragraph to cover
                    the repayment of credit beyond the initial 180-day
                    period.''.

        (b) Processed and High-Value Products.--Section 202(k)(1) of the
    Agricultural Trade Act of 1978 (7 U.S.C. 5622(k)(1)) is amended by
    striking ``, 2001, and 2002'' and inserting ``through 2007''.
        (c) Report.--Section 202 of the Agricultural Trade Act of 1978 (7
    U.S.C. 5622) is amended by adding at the end the following:
        ``(l) Consultation on Agricultural Export Credit Programs.--The
    Secretary and the United States Trade Representative shall consult on a
    regular basis with 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 on the
    status of multilateral negotiations regarding agricultural export credit
    programs.''.
        (d) Reauthorization.--Section 211(b)(1) of the Agricultural Trade
    Act of 1978 (7 U.S.C. 5641(b)(1)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 3103. MARKET ACCESS PROGRAM.

        Section 211(c) of the Agricultural Trade Act of 1978 (7 U.S.C.
    5641(c)) is amended--
                (1) by redesignating paragraphs (1) and (2) as subparagraphs
            (A) and (B), respectively, and indenting appropriately;
                (2) by striking ``The Commodity'' and inserting the
            following:
                ``(1) In general.--The Commodity'';
                (3) by striking subparagraph (A) (as so redesignated) and
            inserting the following:
                        ``(A) in addition to any funds that may be
                    specifically appropriated to implement a market access
                    program, not more than $90,000,000 for fiscal year 2001,
                    $100,000,000 for fiscal year 2002, $110,000,000 for
                    fiscal year 2003, $125,000,000 for fiscal year 2004,
                    $140,000,000 for fiscal year 2005, and $200,000,000 for
                    each of fiscal years 2006 and 2007, of the funds of, or
                    an equal value of commodities owned by, the Commodity
                    Credit Corporation; and''; and
                (4) by adding at the end the following:
                ``(2) Program priorities.--In providing any amount of funds
            made available under paragraph (1)(A) for any fiscal year that
            is in excess of the amount made available under paragraph (1)(A)
            for fiscal year 2001, the Secretary shall, to the maximum extent
            practicable--

    [[Page 116 STAT. 290]]

                        ``(A) give equal consideration to--
                              ``(i) proposals submitted by organizations
                          that were participating organizations in prior
                          fiscal years; and
                              ``(ii) proposals submitted by eligible trade
                          organizations that have not previously
                          participated in the program established under this
                          title; and
                        ``(B) give equal consideration to--
                              ``(i) proposals submitted for activities in
                          emerging markets; and
                              ``(ii) proposals submitted for activities in
                          markets other than emerging markets.''.

    SEC. 3104. EXPORT ENHANCEMENT PROGRAM.

        (a) In General.--Section 301(e)(1)(G) of the Agricultural Trade Act
    of 1978 (7 U.S.C. 5651(e)(1)(G)) is amended by striking ``fiscal year
    2002'' and inserting ``each of fiscal years 2002 through 2007''.
        (b) Unfair Trade Practices.--Section 102(5)(A) of the Agricultural
    Trade Act of 1978 (7 U.S.C. 5602(5)(A)) is amended--
                (1) in clause (i), by striking ``or'' at the end; and
                (2) by striking clause (ii) and inserting the following:
                              ``(ii) in the case of a monopolistic state
                          trading enterprise engaged in the export sale of
                          an agricultural commodity, implements a pricing
                          practice that is inconsistent with sound
                          commercial practice;
                              ``(iii) provides a subsidy that--
                                        ``(I) decreases market opportunities
                                    for United States exports; or
                                        ``(II) unfairly distorts an
                                    agricultural market to the detriment of
                                    United States exporters;
                              ``(iv) imposes an unfair technical barrier to
                          trade, including--
                                        ``(I) a trade restriction or
                                    commercial requirement (such as a
                                    labeling requirement) that adversely
                                    affects a new technology (including
                                    biotechnology); and
                                        ``(II) an unjustified sanitary or
                                    phytosanitary restriction (including any
                                    restriction that, in violation of the
                                    Uruguay Round Agreements, is not based
                                    on scientific principles;
                              ``(v) imposes a rule that unfairly restricts
                          imports of United States agricultural commodities
                          in the administration of tariff rate quotas; or
                              ``(vi) fails to adhere to, or circumvents any
                          obligation under, any provision of a trade
                          agreement with the United States.''.

    SEC. 3105. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

        (a) Value-Added Products.--
                (1) In general.--Section 702(a) of the Agricultural Trade
            Act of 1978 (7 U.S.C. 5722(a)) is amended by inserting ``, with
            a continued significant emphasis on the importance of the export
            of value-added United States agricultural products into emerging
            markets'' after ``products''.
                (2) Report to congress.--Section 702 of the Agricultural
            Trade Act of 1978 (7 U.S.C. 5722) is amended by adding at the
            end the following:

        ``(c) Report to Congress.--The Secretary shall annually submit to
    the Committee on Agriculture and the Committee on

    [[Page 116 STAT. 291]]

    International Relations of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    on activities under this section describing the amount of funding
    provided, the types of programs funded, the value-added products that
    have been targeted, and the foreign markets for those products that have
    been developed.''.
        (b) Funding.--Section 703 of the Agricultural Trade Act of 1978 (7
    U.S.C. 5723) is amended to read as follows:

    ``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 amount of
    $34,500,000 for each of fiscal years 2002 through 2007.
        ``(b) Program Priorities.--In providing any amount of funds or
    commodities made available under subsection (a) for any fiscal year that
    is in excess of the amount made available under this section for fiscal
    year 2001, the Secretary shall, to the maximum extent practicable--
                ``(1) give equal consideration to--
                        ``(A) proposals submitted by organizations that were
                    participating organizations in prior fiscal years; and
                        ``(B) proposals submitted by eligible trade
                    organizations that have not previously participated in
                    the program established under this title; and
                ``(2) give equal consideration to--
                        ``(A) proposals submitted for activities in emerging
                    markets; and
                        ``(B) proposals submitted for activities in markets
                    other than emerging markets.''.

    SEC. 3106. FOOD FOR PROGRESS.

        (a) In General.--Subsections (f)(3), (k), and (l)(1) of the Food for
    Progress Act of 1985 (7 U.S.C. 1736o) are each amended by striking
    ``2002'' and inserting ``2007''.
        (b) Definitions; Program.--
                (1) In general.--The Food for Progress Act of 1985 (7 U.S.C.
            1736o) is amended by striking subsections (b) and (c) and
            inserting the following:

        ``(b) Definitions.--In this section:
                ``(1) Cooperative.--The term `cooperative' has the meaning
            given the term in section 402 of the Agricultural Trade
            Development and Assistance Act of 1954 (7 U.S.C. 1732).
                ``(2) Corporation.--The term `Corporation' means the
            Commodity Credit Corporation.
                ``(3) Developing country.--The term `developing country' has
            the meaning given the term in section 402 of the Agricultural
            Trade Development and Assistance Act of 1954 (7 U.S.C. 1732).
                ``(4) Eligible commodity.--The term `eligible commodity'
            means an agricultural commodity, or a product of an agricultural
            commodity, in inventories of the Corporation or acquired by the
            President or the Corporation for disposition through commercial
            purchases under a program authorized under this section.
                ``(5) Eligible entity.--The term `eligible entity' means--

    [[Page 116 STAT. 292]]

                        ``(A) the government of an emerging agricultural
                    country;
                        ``(B) an intergovernmental organization;
                        ``(C) a private voluntary organization;
                        ``(D) a nonprofit agricultural organization or
                    cooperative;
                        ``(E) a nongovernmental organization; and
                        ``(F) any other private entity.
                ``(6) 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.
                ``(7) Nongovernmental organization.--The term
            `nongovernmental organization' has the meaning given the term in
            section 402 of the Agricultural Trade Development and Assistance
            Act of 1954 (7 U.S.C. 1732).
                ``(8) Private voluntary organization.--The term `private
            voluntary organization' has the meaning given the term in
            section 402 of the Agricultural Trade Development and Assistance
            Act of 1954 (7 U.S.C. 1732).
                ``(9) Program.--The term `program' means a food assistance
            or development initiative proposed by an eligible entity and
            approved by the President under this section.

        ``(c) Program.--In order to use the food resources of the United
    States more effectively in support of developing countries, and
    countries that are emerging democracies that have made commitments to
    introduce or expand free enterprise elements in their agricultural
    economies through changes in commodity pricing, marketing, input
    availability, distribution, and private sector involvement, the
    President may enter into agreements with eligible entities to furnish to
    the countries eligible commodities made available under subsections (e)
    and (f).''.
                (2) Conforming amendments.--The Food for Progress Act of
            1985 (7 U.S.C. 136o) <<NOTE: 7 USC 1736.>>  is amended--
                        (A) in the first sentence of subsection (d), by
                    striking ``food'';
                        (B) in subsection (l)(2), by striking
                    ``agricultural'';
                        (C) in subsection (m)(1), by striking ``these'';
                        (D) in subsections (d), (e), (f), (h), (j), (l), and
                    (m), by striking ``commodities'' each place it appears
                    and inserting ``eligible commodities'';
                        (E) in subsections (e), (f), and (l), by striking
                    ``Commodity Credit Corporation'' each place it appears
                    and inserting ``Corporation''; and
                        (F) by striking subsection (o).

        (c) Consideration for Agreements.--Subsection (d) of the Food for
    Progress Act of 1985 (7 U.S.C. 1736o(d)) is amended by striking ``(d) In
    determining'' and inserting ``(d) Consideration for Agreements.--In
    determining''.
        (d) Funding of Eligible Commodities.--Subsection (e) of the Food for
    Progress Act of 1985 (7 U.S.C. 1736o(e)) is amended--
                (1) by striking ``(e)'' and inserting ``(e) Funding of
            Eligible Commodities.--'';
                (2) in paragraph (2), by inserting ``, and subsection (g)
            does not apply to eligible commodities furnished on a grant
            basis or on credit terms under that title'' before the period at
            the end; and
                (3) by adding at the end the following:

    [[Page 116 STAT. 293]]

                ``(5) No effect on domestic programs.--The President shall
            not make an eligible commodity available for disposition under
            this section in any amount that will reduce the amount of the
            eligible commodity that is traditionally made available through
            donations to domestic feeding programs or agencies, as
            determined by the President.''.

        (e) Provision of Eligible Commodities to Developing Countries.--
    Subsection (f) of the Food for Progress Act of 1985 (7 U.S.C. 1736o(f))
    is amended--
                (1) by striking ``(f)'' and inserting ``(f) Provision of
            Eligible Commodities to Developing Countries.--''; and
                (2) in paragraph (3), by striking ``$30,000,000 (or in the
            case of fiscal year 1999, $35,000,000)'' and inserting
            ``$40,000,000''.

        (f) Minimum Tonnage.--The Food for Progress Act of 1985 is amended
    by striking subsection (g) (7 U.S.C. 1736o(g)) and inserting the
    following:
        ``(g) Minimum Tonnage.--Subject to subsection (f)(3), not less than
    400,000 metric tons of eligible commodities may be provided under this
    section for the program for each of fiscal years 2002 through 2007.''.
        (g) Prohibition on Resale or Transshipment of Eligible
    Commodities.--Subsection (h) of the Food for Progress Act of 1985 (7
    U.S.C. 1736o(h)) is amended by striking ``(h) An agreement'' and
    inserting ``(h) Prohibition on Resale or Transshipment of Eligible
    Commodities.--An agreement''.
        (h) Displacement of United States Commercial Sales.--Subsection (i)
    of the Food for Progress Act of 1985 (7 U.S.C. 1736o(i)) is amended by
    striking ``(i) In entering'' and inserting ``(i) Displacement of United
    States Commercial Sales.--In entering''.
        (i) Multicountry or Multiyear Basis.--Subsection (j) of the Food for
    Progress Act of 1985 (7 U.S.C. 1736o(j)) is amended--
                (1) by striking ``(j) In carrying out this section, the
            President may,'' and inserting the following: ``(j) Multicountry
            or Multiyear Basis.--
                ``(1) In general.--In carrying out this section, the
            President,'';
                (2) by striking ``approve'' and inserting ``is encouraged to
            approve'';
                (3) by striking ``multiyear'' and inserting ``multicountry
            or multiyear''; and
                (4) by adding at the end the following:
                ``(2) Deadline for
            program <<NOTE: President.>> announcements.--Before the
            beginning of any fiscal year, the President shall, to the
            maximum extent practicable--
                        ``(A) make all determinations concerning program
                    agreements and resource requests for programs under this
                    section; and
                        ``(B) announce those determinations.
                ``(3) Report.--Not <<NOTE: Deadline.>> later than December 1
            of each fiscal year, the President 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 eligible commodities, and the total
            amount of funds for transportation and administrative costs,
            approved to date for the fiscal year under this section.''.

    [[Page 116 STAT. 294]]

        (j) Effective and Termination Dates.--Subsection (k) of the Food for
    Progress Act of 1985 (7 U.S.C. 1736o(k)) is amended by striking ``(k)
    This section'' and inserting ``(k) Effective and Termination Dates.--
    This section''.
        (k) Administrative Expenses.--Subsection (l) of the Food for
    Progress Act of 1985 (7 U.S.C. 1736o(l)) is amended--
                (1) by striking ``(l)'' and inserting ``(l) Administrative
            Expenses.--'';
                (2) in paragraph (1), by striking ``$10,000,000'' and
            inserting ``$15,000,000'';
                (3) in paragraph (3), by striking ``local currencies'' and
            inserting ``proceeds''; and
                (4) by adding at the end the following:
                ``(4) Humanitarian or development purposes.--The Secretary
            may authorize the use of proceeds to pay the costs incurred by
            an eligible entity under this section for--
                        ``(A)(i) programs targeted at hunger and
                    malnutrition; or
                        ``(ii) development programs involving food security;
                        ``(B) transportation, storage, and distribution of
                    eligible commodities provided under this section; and
                        ``(C) administration, sales, monitoring, and
                    technical assistance.''.

        (l) Presidential Approval.--Subsection (m) of the Food for Progress
    Act of 1985 (7 U.S.C. 1736o(m)) is amended by striking ``(m) In
    carrying'' and inserting ``(m) Presidential Approval.--In carrying''.
        (m) Program Management.--The Food for Progress Act of 1985 is
    amended by striking subsection (n) (7 U.S.C. 1736o(n)) and inserting the
    following:
        ``(n) Program Management.--
                ``(1) In general.--The <<NOTE: President.>> President shall
            ensure, to the maximum extent practicable, that each eligible
            entity participating in 1 or more programs under this section--
                        ``(A) uses eligible commodities made available under
                    this section--
                              ``(i) in an effective manner;
                              ``(ii) in the areas of greatest need; and
                              ``(iii) in a manner that promotes the purposes
                          of this section;
                        ``(B) in using eligible commodities, assesses and
                    takes into account the needs of recipient countries and
                    the target populations of the recipient countries;
                        ``(C) works with recipient countries, and indigenous
                    institutions or groups in recipient countries, to design
                    and carry out mutually acceptable programs authorized
                    under this section; and
                        ``(D) monitors and reports on the distribution or
                    sale of eligible commodities provided under this section
                    using methods that, as determined by the President,
                    facilitate accurate and timely reporting.
                ``(2) Requirements.--
                        ``(A) In general.--Not <<NOTE: Deadline.>> later
                    than 270 days after the date of enactment of this
                    paragraph, the President shall review and, as necessary,
                    make changes in regulations and internal procedures
                    designed to streamline, improve,

    [[Page 116 STAT. 295]]

                    and clarify the application, approval, and
                    implementation processes pertaining to agreements under
                    this section.
                        ``(B) Considerations.--In conducting the review, the
                    President shall consider--
                              ``(i) revising procedures for submitting
                          proposals;
                              ``(ii) developing criteria for program
                          approval that separately address the objectives of
                          the program;
                              ``(iii) pre-screening organizations and
                          proposals to ensure that the minimum
                          qualifications are met;
                              ``(iv) implementing e-government initiatives
                          and otherwise improving the efficiency of the
                          proposal submission and approval processes;
                              ``(v) upgrading information management
                          systems;
                              ``(vi) improving commodity and transportation
                          procurement processes; and
                              ``(vii) ensuring that evaluation and
                          monitoring methods are sufficient.
                        ``(C) Consultations.--Not <<NOTE: Deadline.>> later
                    than 1 year after the date of enactment of this
                    paragraph, the President shall consult with 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 on changes made in regulations
                    and procedures.
                ``(3) Reports.--Each eligible entity that enters into an
            agreement under this section shall submit to the President, at
            such time as the President may request, a report containing such
            information as the President may request relating to the use of
            eligible commodities and funds furnished to the eligible entity
            under this section.''.

    SEC. 3107. <<NOTE: 7 USC 1736o-1.>>  MCGOVERN-DOLE INTERNATIONAL FOOD
                FOR EDUCATION AND CHILD NUTRITION PROGRAM.

        (a) Definition of Agricultural Commodity.--In this section, the term
    ``agricultural commodity'' means an agricultural commodity, or a product
    of an agricultural commodity, that is produced in the United States.
        (b) Program.--Subject to subsection (l), the President may establish
    a program, to be known as ``McGovern-Dole International Food for
    Education and Child Nutrition Program'', requiring the procurement of
    agricultural commodities and the provision of financial and technical
    assistance to carry out--
                (1) preschool and school food for education programs in
            foreign countries to improve food security, reduce the incidence
            of hunger, and improve literacy and primary education,
            particularly with respect to girls; and
                (2) maternal, infant, and child nutrition programs for
            pregnant women, nursing mothers, infants, and children who are 5
            years of age or younger.

        (c) Eligible Commodities and Cost Items.--Notwithstanding any other
    provision of law--
                (1) any agricultural commodity is eligible to be provided
            under this section;
                (2) as necessary to achieve the purposes of this section,
            funds appropriated under this section may be used to pay--
                        (A)(i) the cost of acquiring agricultural
                    commodities;

    [[Page 116 STAT. 296]]

                        (ii) the costs associated with packaging,
                    enrichment, preservation, and fortification of
                    agricultural commodities;
                        (iii) the processing, transportation, handling, and
                    other incidental costs up to the time of the delivery of
                    agricultural commodities 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
                    agricultural commodities from United States ports to
                    designated points of entry abroad in the case--
                              (I) of landlocked countries;
                              (II) of ports that cannot be used effectively
                          because of natural or other disturbances;
                              (III) of the unavailability of carriers to a
                          specific country; or
                              (IV) of substantial savings in costs or time
                          that may be effected by the utilization of points
                          of entry other than ports; and
                        (vi) the charges for general average contributions
                    arising out of the ocean transport of agricultural
                    commodities transferred pursuant thereto;
                        (B) all or any part of the internal transportation,
                    storage, and handling costs incurred in moving the
                    eligible commodity, if the President determines that--
                              (i) payment of the costs is appropriate; and
                              (ii) 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
                                    goals of 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, convened in 2000;
                        (C) the costs of activities conducted in the
                    recipient countries by a nonprofit voluntary
                    organization, cooperative, or intergovernmental agency
                    or organization that would enhance the effectiveness of
                    the activities implemented by such entities under this
                    section; and
                        (D) the costs of meeting the allowable
                    administrative expenses of private voluntary
                    organizations, cooperatives, or intergovernmental
                    organizations that are implementing activities under
                    this section.

        (d) General Authorities.--The President <<NOTE: President.>> shall
    designate 1 or more Federal agencies to--
                (1) implement the program established under this section;
                (2) ensure that the program established under this section
            is consistent with the foreign policy and development assistance
            objectives of the United States; and
                (3) consider, in determining whether a country should
            receive assistance under this section, whether the government of
            the country is taking concrete steps to improve the preschool
            and school systems in the country.

    [[Page 116 STAT. 297]]

        (e) Eligible Entities.--Assistance may be provided under this
    section to private voluntary organizations, cooperatives,
    intergovernmental organizations, governments of developing countries and
    their agencies, and other organizations.
        (f) Procedures.--
                (1) In <<NOTE: President.>> general.--In carrying out
            subsection (b), the President shall ensure that procedures are
            established that--
                        (A) provide for the submission of proposals by
                    eligible entities, each of which may include 1 or more
                    recipient countries, for commodities and other
                    assistance under this section;
                        (B) provide for eligible commodities and assistance
                    on a multiyear basis;
                        (C) ensure that eligible entities demonstrate the
                    organizational capacity and the ability to develop,
                    implement, monitor, report on, and provide
                    accountability for activities conducted under this
                    section;
                        (D) provide for the expedited development, review,
                    and approval of proposals submitted in accordance with
                    this section;
                        (E) ensure monitoring and reporting by eligible
                    entities on the use of commodities and other assistance
                    provided under this section; and
                        (F) allow for the sale or barter of commodities by
                    eligible entities to acquire funds to implement
                    activities that improve the food security of women and
                    children or otherwise enhance the effectiveness of
                    programs and activities authorized under this section.
                (2) Priorities for program funding.--In carrying out
            paragraph (1) with respect to criteria for determining the use
            of commodities and other assistance provided for programs and
            activities authorized under this section, the implementing
            agency may consider the ability of eligible entities to--
                        (A) identify and assess the needs of beneficiaries,
                    especially malnourished or undernourished mothers and
                    their children who are 5 years of age or younger, and
                    school-age children who are malnourished,
                    undernourished, or do not regularly attend school;
                        (B)(i) in the case of preschool and school-age
                    children, target low-income areas where children's
                    enrollment and attendance in school is low or girls'
                    enrollment and participation in preschool or school is
                    low, and incorporate developmental objectives for
                    improving literacy and primary education, particularly
                    with respect to girls; and
                        (ii) in the case of programs to benefit mothers and
                    children who are 5 years of age or younger, coordinate
                    supplementary feeding and nutrition programs with
                    existing or newly-established maternal, infant, and
                    children programs that provide health-needs
                    interventions, including maternal, prenatal, and
                    postnatal and newborn care;
                        (C) involve indigenous institutions as well as local
                    communities and governments in the development and
                    implementation of the programs and activities to foster
                    local capacity building and leadership; and

    [[Page 116 STAT. 298]]

                        (D) carry out multiyear programs that foster local
                    self-sufficiency and ensure the longevity of programs in
                    the recipient country .

        (g) Use of Food and Nutrition Service.--The Food and Nutrition
    Service of the Department of Agriculture may provide technical advice on
    the establishment of programs under subsection (b)(1) and on
    implementation of the programs in the field in recipient countries.
        (h) Multilateral Involvement.--
                (1) In general.--The President is urged to engage existing
            international food aid coordinating mechanisms to ensure
            multilateral commitments to, and participation in, programs
            similar to programs supported under this section.
                (2) Reports.--The <<NOTE: President.>> President shall
            annually submit to the Committee on International Relations and
            the Committee on Agriculture of the House of Representatives and
            the Committee on Agriculture, Nutrition, and Forestry of the
            Senate a report on the commitments and activities of
            governments, including the United States government, in the
            global effort to reduce child hunger and increase school
            attendance.

        (i) Private Sector Involvement.--The President is urged to encourage
    the support and active involvement of the private sector, foundations,
    and other individuals and organizations in programs assisted under this
    section.
        (j) Graduation.--An agreement with an eligible organization under
    this section shall include provisions--
                (1) to--
                        (A) 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 a program
                    under this section terminates; and
                        (B) estimate the period of time required until the
                    recipient country or eligible organization is able to
                    provide sufficient assistance without additional
                    assistance under this section; or
                (2) to provide other long-term benefits to targeted
            populations of the recipient country.

        (k) Requirement To Safeguard Local Production and Usual Marketing.--
    The requirement of section 403(a) of the Agricultural Trade Development
    and Assistance Act of 1954 (7 U.S.C. 1733(a)) applies with respect to
    the availability of commodities under this section.
        (l) Funding.--
                (1) In general.--Of the funds of the Commodity Credit
            Corporation, the President shall use $100,000,000 for fiscal
            year 2003 to carry out this section.
                (2) Authorization of appropriations.--There are authorized
            to be appropriated such sums as are necessary to carry out this
            section for each of fiscal years 2004 through 2007.
                (3) Administrative expenses.--Funds made available to carry
            out this section may be used to pay the administrative expenses
            of any Federal agency implementing or assisting in the
            implementation of this section.

    [[Page 116 STAT. 299]]

                            Subtitle C--Miscellaneous

    SEC. 3201. SURPLUS COMMODITIES FOR DEVELOPING OR FRIENDLY COUNTRIES.

        (a) Use of Currencies.--Section 416(b)(7)(D) of the Agricultural Act
    of 1949 (7 U.S.C. 1431(b)(7)(D)) is amended--
                (1) in clauses (i) and (iii), by striking ``foreign
            currency'' each place it appears;
                (2) in clause (ii)--
                        (A) by striking ``Foreign currencies'' and inserting
                    ``Proceeds''; and
                        (B) by striking ``foreign currency''; and
                (3) in clause (iv)--
                        (A) by striking ``Foreign currency proceeds'' and
                    inserting ``Proceeds'';
                        (B) by striking ``country of origin'' the second
                    place it appears and all that follows through ``as
                    necessary to expedite'' and inserting ``country of
                    origin as necessary to expedite'';
                        (C) by striking ``; or'' and inserting a period; and
                        (D) by striking subclause (II).

        (b) Implementation of Agreements.--Section 416(b) of the
    Agricultural Act of 1949 (7 U.S.C. 1431(b)) (as amended by section
    3009(b)) is amended--
                (1) in paragraph (8), by striking ``(8)(A)'' and all that
            follows through ``(B) The Secretary'' and inserting the
            following:
                ``(8) Administrative provisions.--
                        ``(A) Expedited procedures.--To the maximum extent
                    practicable, expedited procedures shall be used in the
                    implementation of this subsection.
                        ``(B) Estimate <<NOTE: Federal Register,
                    publication. Deadline.>> of commodities.--The Secretary
                    shall publish in the Federal Register, not later than
                    October 31 of each fiscal year, an estimate of the types
                    and quantities of commodities and products that will be
                    available under this section for the fiscal year.
                        ``(C) Finalization <<NOTE: Deadline.>> of
                    agreements.--The Secretary is encouraged to finalize
                    program agreements under this section not later than
                    December 31 of each fiscal year.
                        ``(D) Regulations.--The Secretary''; and
                (2) by adding at the end the following:
                ``(11) Requirements.--
                        ``(A) In <<NOTE: Deadline.>> general.--Not later
                    than 270 days after the date of enactment of this
                    subparagraph, the Secretary shall review and, as
                    necessary, make changes in regulations and internal
                    procedures designed to streamline, improve, and clarify
                    the application, approval, and implementation processes
                    pertaining to agreements under this section.
                        ``(B) Considerations.--In conducting the review, the
                    Secretary shall consider--
                              ``(i) revising procedures for submitting
                          proposals;
                              ``(ii) developing criteria for program
                          approval that separately address the objectives of
                          the program;
                              ``(iii) pre-screening organizations and
                          proposals to ensure that the minimum
                          qualifications are met;

    [[Page 116 STAT. 300]]

                              ``(iv) implementing e-government initiatives
                          and otherwise improving the efficiency of the
                          proposal submission and approval processes;
                              ``(v) upgrading information management
                          systems;
                              ``(vi) improving commodity and transportation
                          procurement processes; and
                              ``(vii) ensuring that evaluation and
                          monitoring methods are sufficient.
                        ``(C) Consultations.--Not <<NOTE: Deadline.>> later
                    than 1 year after the date of enactment of this
                    subparagraph, the Secretary shall consult with 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 on changes made in regulations
                    and procedures under this paragraph.''.

    SEC. 3202. BILL EMERSON HUMANITARIAN TRUST.

        Section 302 of the Bill Emerson Humanitarian Trust Act (7 U.S.C.
    1736f-1) is amended by striking ``2002'' each place it appears in
    subsection (b)(2)(B)(i) and paragraphs (1) and (2) of subsection (h) and
    inserting ``2007''.

    SEC. 3203. EMERGING MARKETS.

        Section 1542 of the Food, Agriculture, Conservation, and Trade Act
    of 1990 (7 U.S.C. 5622 note) is amended in subsections (a) and
    (d)(1)(A)(i) by striking ``2002'' and inserting ``2007''.

    SEC. 3204. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

        The Food, Agriculture, Conservation, and Trade Act of 1990 is
    amended by inserting after section 1543 (7 U.S.C. 3293) the following:

    ``SEC. 1543A. <<NOTE: 7 USC 5679.>> BIOTECHNOLOGY AND AGRICULTURAL TRADE
                PROGRAM.

        ``(a) Establishment.--There is established in the Department the
    biotechnology and agricultural trade program.
        ``(b) Purpose.--The purpose of the program shall be to remove,
    resolve, or mitigate significant regulatory nontariff barriers to the
    export of United States agricultural commodities (as defined in section
    102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602)) into foreign
    markets through public and private sector projects funded by grants that
    address--
                ``(1) quick response intervention regarding nontariff
            barriers to United States exports involving--
                        ``(A) United States agricultural commodities
                    produced through biotechnology;
                        ``(B) food safety;
                        ``(C) disease; or
                        ``(D) other sanitary or phytosanitary concerns; or
                ``(2) developing protocols as part of bilateral negotiations
            with other countries on issues such as animal health, grain
            quality, and genetically modified commodities.

        ``(c) Eligible Programs.--Depending on need, as determined by the
    Secretary, activities authorized under this section may be carried out
    through--
                ``(1) this section;
                ``(2) the emerging markets program under section 1542; or
                ``(3) the Cochran Fellowship Program under section 1543.

    [[Page 116 STAT. 301]]

        ``(d) Funding.--There is authorized to be appropriated $6,000,000
    for each of fiscal years 2002 through 2007.''.

    SEC. 3205. <<NOTE: 7 USC 5680.>>  TECHNICAL ASSISTANCE FOR SPECIALTY
                CROPS.

        (a) Establishment.--The Secretary of Agriculture shall establish an
    export assistance program (referred to in this section as the
    ``program'') to address unique barriers that prohibit or threaten the
    export of United States specialty crops.
        (b) Purpose.--The program shall provide direct assistance through
    public and private sector projects and technical assistance to remove,
    resolve, or mitigate sanitary and phytosanitary and related barriers to
    trade.
        (c) Priority.--The program shall address time sensitive and
    strategic market access projects based on--
                (1) trade effect on market retention, market access, and
            market expansion; and
                (2) trade impact.

        (d) Funding.--For each of fiscal years 2002 through 2007, the
    Secretary shall make available $2,000,000 of the funds of, or an equal
    value of commodities owned by, the Commodity Credit Corporation.

    SEC. 3206. <<NOTE: 7 USC 5603a.>> GLOBAL MARKET STRATEGY.

        (a) In <<NOTE: Deadline.>> General.--Not later than 180 days after
    the date of enactment of this Act, and biennially thereafter, the
    Secretary of Agriculture shall consult with 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 on the formulation and implementation of a global
    market strategy for the Department of Agriculture that, to the maximum
    extent practicable--
                (1) identifies opportunities for the growth of agricultural
            exports to overseas markets;
                (2) ensures that the resources, programs, and policies of
            the Department are coordinated with those of other agencies; and
                (3) remove barriers to agricultural trade in overseas
            markets.

        (b) Review.--The consultations under subsection (a) shall include a
    review of--
                (1) the strategic goals of the Department; and
                (2) the progress of the Department in implementing the
            strategic goals through the global market strategy.

    SEC. 3207. REPORT ON USE OF PERISHABLE COMMODITIES AND LIVE ANIMALS.

        Not <<NOTE: Deadline.>> later than 120 days after the date of
    enactment of this Act, the Secretary of Agriculture shall submit to the
    Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    on international food aid programs of the United States that evaluates--
                (1) the implications of storage and transportation capacity
            and funding for the use of perishable agricultural commodities
            and semiperishable agricultural commodities; and
                (2) the feasibility of the transport of lambs and other live
            animals under the program.

    [[Page 116 STAT. 302]]

    SEC. 3208. <<NOTE: 7 USC 5693 note.>>  STUDY ON FEE FOR SERVICES.

        (a) In General.--Not <<NOTE: Deadline.>> later than 1 year after the
    date of enactment of this Act, the Secretary of Agriculture 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
    feasibility of instituting a program under which the Secretary would
    charge and retain a fee to cover the costs incurred by the Department of
    Agriculture, acting through the Foreign Agricultural Service or any
    successor agency, in providing persons with commercial services provided
    outside the United States.

        (b) Purpose of Program.--The purpose of a program described in
    subsection (a) would be to supplement and not replace any services
    currently offered overseas by the Foreign Agricultural Service.
        (c) Market Development Strategy.--A program under subsection (b)
    would be part of an overall market development strategy for a particular
    country or region.
        (d) Pilot Program.--A program under subsection (a) would be
    established on a pilot basis to ensure that the program does not
    disadvantage small- and medium-sized companies, including companies that
    have never engaged in exporting.

    SEC. 3209. SENSE OF CONGRESS CONCERNING FOREIGN ASSISTANCE PROGRAMS.

        (a) Findings.--Congress finds that--
                (1) the international community faces a continuing epidemic
            of ethnic, sectarian, and criminal violence;
                (2) poverty, hunger, political uncertainty, and social
            instability are the principal causes of violence and conflict
            around the world;
                (3) broad-based, equitable economic growth and agriculture
            development facilitates political stability, food security,
            democracy, and the rule of law;
                (4) democratic governments are more likely to advocate and
            observe international laws, protect civil and human rights,
            pursue free market economies, and avoid external conflicts;
                (5) the United States Agency for International Development
            has provided critical democracy and governance assistance to a
            majority of the nations that successfully made the transition to
            democratic governments during the past 2 decades;
                (6) 43 of the top 50 consumer nations of American
            agricultural products were once United States foreign aid
            recipients;
                (7) in the past 50 years, infant child death rates in the
            developing world have been reduced by 50 percent, and health
            conditions around the world have improved more during this
            period than in any other period;
                (8) the United States Agency for International Development
            child survival programs have significantly contributed to a 10
            percent reduction in infant mortality rates worldwide in just
            the past 8 years;
                (9) in providing assistance by the United States and other
            donors in better seeds and teaching more efficient agricultural
            techniques over the past 2 decades have helped make it possible
            to feed an additional 1,000,000,000 people in the world;
                (10) despite this progress, approximately 1,200,000,000
            people, one-quarter of the world's population, live on less that

    [[Page 116 STAT. 303]]

            $1 per day, and approximately 3,000,000,000 people live on only
            $2 per day;
                (11) 95 percent of new births occur in developing countries,
            including the world's poorest countries; and
                (12) only \1/2\ percent of the Federal budget is dedicated
            to international economic and humanitarian assistance.

        (b) Sense of Congress.--It is the sense of Congress that--
                (1) United States foreign assistance programs should play an
            increased role in the global fight against terrorism to
            complement the national security objectives of the United
            States;
                (2) the United States should lead coordinated international
            efforts to provide increased financial assistance to countries
            with impoverished and disadvantaged populations that are the
            breeding grounds for terrorism; and
                (3) the United States Agency for International Development
            and the Department of Agriculture should substantially increase
            humanitarian, economic development, and agricultural assistance
            to foster international peace and stability and the promotion of
            human rights.

    SEC. 3210. SENSE OF THE SENATE CONCERNING AGRICULTURAL TRADE.

        (a) Agriculture Trade Negotiating Objectives.--It is the sense of
    the Senate 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 the export
            of United States agricultural commodities, giving priority to
            United States agricultural commodities that are subject to
            significantly higher tariffs or subsidy regimes of major
            producing countries;
                (2) immediately eliminating all export subsidies on
            agricultural commodities worldwide 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--
                        (A) unfair or trade-distorting activities of state
                    trading enterprises and other administrative mechanisms,
                    with emphasis on--

    [[Page 116 STAT. 304]]

                              (i) requiring price transparency in the
                          operation of state trading enterprises and such
                          other mechanisms; and
                              (ii) ending discriminatory pricing practices
                          for agricultural commodities 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 agricultural commodities in
                          foreign markets at prices below domestic market
                          prices or prices below the full costs of acquiring
                          and delivering agricultural commodities to the
                          foreign markets;
                        (B) unjustified trade restrictions or commercial
                    requirements affecting new agricultural technologies,
                    including biotechnology;
                        (C) unjustified sanitary or phytosanitary
                    restrictions, including restrictions that are not based
                    on scientific principles, in contravention of the
                    Agreement on the Application of Sanitary and
                    Phytosanitary Measures (as described in section
                    101(d)(3) of the Uruguay Round Agreements Act (19 U.S.C.
                    3511(d)(3)));
                        (D) other unjustified technical barriers to
                    agricultural trade; and
                        (E) restrictive and nontransparent rules in the
                    administration of tariff rate quotas;
                (5) improving import relief mechanisms to recognize the
            unique characteristics of perishable agricultural commodities;
                (6) taking into account whether a party to negotiations with
            respect to trading in an agricultural commodity has--
                        (A) failed to adhere to the provisions of an
                    existing bilateral trade agreement with the United
                    States;
                        (B) circumvented obligations under a multilateral
                    trade agreement to which the United States is a
                    signatory; or
                        (C) 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--
                        (A) have made meaningful market liberalization
                    commitments in agriculture; and
                        (B) make progress in fulfilling those commitments
                    over time.

        (b) Priority for Agriculture Trade.--It is the sense of the Senate
    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 export competitors of the United States
            fail to 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, within
            existing World Trade Organization commitments.

        (c) Consultation With Congressional Committees.--It is the sense of
    the Senate that--

    [[Page 116 STAT. 305]]

                (1) before the United States Trade Representative negotiates
            a trade agreement that would reduce tariffs on agricultural
            commodities or require a change in United States agricultural
            law, the United States Trade Representative should consult with
            the Committee on Agriculture and the Committee on Ways and Means
            of the House of Representatives and the Committee on
            Agriculture, Nutrition, and Forestry and the Committee on
            Finance of the Senate;
                (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 should 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; and
                (3) any agreement or other understanding (whether verbal or
            in writing) that relates to agricultural trade that is not
            disclosed to Congress before legislation implementing a trade
            agreement is introduced in either the Senate or the House of
            Representatives should not be considered to be part of the
            agreement approved by Congress and should have no force and
            effect under Unites States law or in any dispute settlement
            body.

         TITLE IV--NUTRITION <<NOTE: Food Stamp Reauthorization Act of
    2002.>> PROGRAMS

    SEC. 4001. SHORT <<NOTE: 7 USC 2011 note.>> TITLE.

        This title may be cited as the ``Food Stamp Reauthorization Act of
    2002''.

                         Subtitle A--Food Stamp Program

    SEC. 4101. ENCOURAGEMENT OF PAYMENT OF CHILD SUPPORT.

        (a) Exclusion.--Section 5(d)(6) of the Food Stamp Act of 1977 (7
    U.S.C. 2014(d)(6)) is amended by adding at the end the following: ``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,''.
        (b) Simplified Procedure.--Section 5 of the Food Stamp Act of 1977
    (7 U.S.C. 2014) is amended--
                (1) in subsection (e), by striking paragraph (4) and
            inserting the following:
                ``(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 (6).''; and

    [[Page 116 STAT. 306]]

                (2) by adding at the end the following:

        ``(n) State Options To Simplify Determination of Child Support
    Payments.--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 any 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.
    651 et seq.) concerning payments made in prior months in lieu of
    obtaining current information from the households.''.

    SEC. 4102. SIMPLIFIED DEFINITION OF INCOME.

        Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)) is
    amended--
                (1) by striking ``and (15)'' and inserting ``(15)''; and
                (2) by inserting before the period at the end the following:
            ``, (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. 301 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''.

    SEC. 4103. STANDARD DEDUCTION.

        Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is
    amended by striking paragraph (1) and inserting the following:
                ``(1) Standard deduction.--
                        ``(A) In general.--
                              ``(i) Deduction.--The Secretary shall allow a
                          standard deduction for each household in the 48
                          contiguous States and the District of Columbia,
                          Alaska, Hawaii, and the Virgin Islands of the
                          United States in an amount that is--

    [[Page 116 STAT. 307]]

                                        ``(I) equal to 8.31 percent of the
                                    income standard of eligibility
                                    established under subsection (c)(1); but
                                        ``(II) not more than 8.31 percent of
                                    the income standard of eligibility
                                    established under subsection (c)(1) for
                                    a household of 6 members.
                              ``(ii) Minimum amount.--Notwithstanding clause
                          (i), the standard deduction for each household in
                          the 48 contiguous States and the District of
                          Columbia, Alaska, Hawaii, and the Virgin Islands
                          of the United States shall be not less than $134,
                          $229, $189, and $118, respectively.
                        ``(B) Guam.--
                              ``(i) In general.--The Secretary shall allow a
                          standard deduction for each household in Guam in
                          an amount that is--
                                        ``(I) equal to 8.31 percent 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 more than 8.31 percent of
                                    twice the income standard of eligibility
                                    established under subsection (c)(1) for
                                    the 48 contiguous States and the
                                    District of Columbia for a household of
                                    6 members.
                              ``(ii) Minimum amount.--Notwithstanding clause
                          (i), the standard deduction for each household in
                          Guam shall be not less than $269.''.

    SEC. 4104. SIMPLIFIED UTILITY ALLOWANCE.

        Section 5(e)(7)(C)(iii) of the Food Stamp Act of 1977 (7 U.S.C.
    2014(e)(7)(C)(iii)) is amended--
                (1) in subclause (I)(bb), by inserting ``(without regard to
            subclause (III))'' after ``Secretary finds''; and
                (2) by adding at the end the following:
                                        ``(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).''.

    SEC. 4105. SIMPLIFIED DETERMINATION OF HOUSING COSTS.

        (a) In General.--Section 5(e)(7) of the Food Stamp Act of 1977 (7
    U.S.C. 2014(e)(7)) is amended by adding at the end the following:
                        ``(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).''.

        (b) Conforming Amendments.--Section 5 of the Food Stamp Act of 1977
    (7 U.S.C. 2014) is amended--
                (1) in subsection (e)--

    [[Page 116 STAT. 308]]

                        (A) by striking paragraph (5); and
                        (B) by redesignating paragraphs (6) and (7) as
                    paragraphs (5) and (6), respectively; and
                (2) in subsection (k)(4)(B), by striking ``subsection
            (e)(7)'' and inserting ``subsection (e)(6)''.

    SEC. 4106. SIMPLIFIED DETERMINATION OF DEDUCTIONS.

        Section 5(f)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2014(f)(1))
    is amended by adding at the end the following:
                        ``(C) 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
                          recertification 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.''.

    SEC. 4107. SIMPLIFIED DEFINITION OF RESOURCES.

        Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is
    amended--
                (1) in paragraph (1), by striking ``a member who is 60 years
            of age or older'' and inserting ``an elderly or disabled
            member''; and
                (2) by adding at the end the following:
                ``(6) Exclusion of types of financial resources not
            considered under certain other federal programs.--
                        ``(A) In general.--Subject to subparagraph (B), 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.--Except to the extent that any of
                    the types of resources specified in clauses (i) through
                    (iv) are excluded under another paragraph of this
                    subsection, 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.''.

    [[Page 116 STAT. 309]]

    SEC. 4108. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS.

        (a) In General.--Section 5(h)(3)(B) of the Food Stamp Act of 1977 (7
    U.S.C. 2014(h)(3)(B)) is amended--
                (1) in the first sentence, by inserting ``issuance methods
            and'' after ``shall adjust''; and
                (2) in the second sentence, by inserting ``, any conditions
            that make reliance on electronic benefit transfer systems
            described in section 7(i) impracticable,'' after ``personnel''.

        (b) Effective Date.--The amendments made by this section take effect
    on the date of enactment of this Act.

    SEC. 4109. STATE OPTION TO REDUCE REPORTING REQUIREMENTS.

        Section 6(c)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2015(c)(1))
    is amended--
                (1) in subparagraph (B), by striking ``on a monthly basis'';
            and
                (2) by adding at the end the following:
                        ``(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 income standard of
                          eligibility established under section 5(c)(2).''.

    SEC. 4110. COST NEUTRALITY FOR ELECTRONIC BENEFIT TRANSFER SYSTEMS.

        Section 7(i)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)(2))
    is amended--
                (1) by striking subparagraph (A); and
                (2) by redesignating subparagraphs (B) through (I) as
            subparagraphs (A) through (H), respectively.

    SEC. 4111. <<NOTE: 7 USC 2016 note.>>  REPORT ON ELECTRONIC BENEFIT
                TRANSFER SYSTEMS.

        (a) Definition of EBT System.--In this section, the term ``EBT
    system'' means an electronic benefit transfer system used in issuance of
    benefits under the food stamp program under the Food Stamp Act of 1977
    (7 U.S.C. 2011 et seq.).
        (b) Report.--Not <<NOTE: Deadline.>> later than October 1, 2003, the
    Secretary of Agriculture shall submit to the Committee on Agriculture of
    the House of Representatives and the Committee on Agriculture,
    Nutrition, and Forestry of the Senate a report that--
                (1) describes the status of use by each State agency of EBT
            systems;
                (2) specifies the number of vendors that have entered into a
            contract for an EBT system with a State agency;
                (3)(A) specifies the number of State agencies that have
            entered into an EBT-system contract with multiple EBT-system
            vendors; and

    [[Page 116 STAT. 310]]

                (B) describes, for each State agency described in
            subparagraph (A), how responsibilities are divided among the
            various vendors;
                (4) with respect to any State in which an EBT system is not
            operational throughout the State as of October 1, 2002--
                        (A) provides an explanation of the reasons why an
                    EBT system is not operational throughout the State;
                        (B) describes how the reasons are being addressed;
                    and
                        (C) specifies the expected date of operation of an
                    EBT system throughout the State;
                (5) provides a description of--
                        (A) the issues faced by any State agency that has
                    awarded a second EBT-system contract in the 2-year
                    period preceding the date of the report; and
                        (B) the steps that the State agency has taken to
                    address those issues;
                (6) provides a description of--
                        (A) the issues faced by any State agency that will
                    award a second EBT-system contract within the 2-year
                    period beginning on the date of the report; and
                        (B) strategies that the State agency is considering
                    to address those issues;
                (7) describes initiatives being considered or taken by the
            Department of Agriculture, food retailers, EBT-system vendors,
            and client advocates to address any outstanding issues with
            respect to EBT systems; and
                (8) examines areas of potential advances in electronic
            benefit delivery in the 5- to 10-year period beginning on the
            date of the report, including--
                        (A) access to EBT systems at farmers' markets;
                        (B) increased use of transaction data from EBT
                    systems to identify and prosecute fraud; and
                        (C) fostering of increased competition among EBT-
                    system vendors to ensure cost containment and optimal
                    service.

    SEC. 4112. ALTERNATIVE PROCEDURES FOR RESIDENTS OF CERTAIN GROUP
                FACILITIES.

        (a) In General.--Section 8 of the Food Stamp Act of 1977 (7 U.S.C.
    2017) is amended by adding at the end the following:
        ``(f) Alternative Procedures for Residents of Certain Group
    Facilities.--
                ``(1) In general.--
                        ``(A) Applicability.--
                              ``(i) In general.--Subject to clause (ii), at
                          the option of the State agency, allotments for
                          residents of any facility described in
                          subparagraph (B), (C), (D), or (E) of section
                          3(i)(5) (referred to in this subsection as a
                          `covered facility') may be determined and issued
                          under this paragraph in lieu of subsection (a).
                              ``(ii) Limitation.--Unless the Secretary
                          authorizes implementation of this paragraph in all
                          States under paragraph (3), clause (i) shall apply
                          only to residents of covered facilities
                          participating in a pilot project under paragraph
                          (2).

    [[Page 116 STAT. 311]]

                        ``(B) Amount of allotment.--The allotment for each
                    eligible resident described in subparagraph (A) shall be
                    calculated in accordance with standardized procedures
                    established by the Secretary that take into account the
                    allotments typically received by residents of covered
                    facilities.
                        ``(C) Issuance of allotment.--
                              ``(i) In general.--The State agency shall
                          issue an allotment determined under this paragraph
                          to a covered facility as the authorized
                          representative of the residents of the covered
                          facility.
                              ``(ii) Adjustment.--The Secretary shall
                          establish procedures to ensure that a covered
                          facility 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 covered facility.
                        ``(D) Departures of residents of covered
                    facilities.--
                              ``(i) Notification.--Any covered facility that
                          receives an allotment for a resident under this
                          paragraph 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--
                                                ``(aa) is eligible for
                                            continued benefits under the
                                            food stamp program; and
                                                ``(bb) should contact the
                                            State agency concerning
                                            continuation of the benefits.
                              ``(ii) Issuance to departed residents.--On
                          receiving a notification under clause (i)(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 paragraph unless the
                                    departed resident reapplies to
                                    participate in the food stamp program.
                              ``(iii) State option.--The State agency may
                          elect not to issue an allotment under clause
                          (ii)(I) if the State agency lacks sufficient
                          information on the location of the departed
                          resident to provide the allotment.
                              ``(iv) 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 paragraph.
                ``(2) Pilot projects.--
                        ``(A) In general.--Before the Secretary authorizes
                    implementation of paragraph (1) in all States, the
                    Secretary shall carry out, at the request of 1 or more
                    State agencies and in 1 or more areas of the United
                    States, such number of pilot projects as the Secretary
                    determines to be sufficient

    [[Page 116 STAT. 312]]

                    to test the feasibility of determining and issuing
                    allotments to residents of covered facilities under
                    paragraph (1) in lieu of subsection (a).
                        ``(B) Project plan.--To be eligible to participate
                    in a pilot project under subparagraph (A), a State
                    agency shall submit to the Secretary for approval a
                    project plan that includes--
                              ``(i) a specification of the covered
                          facilities in the State that will participate in
                          the pilot project;
                              ``(ii) a schedule for reports to be submitted
                          to the Secretary on the pilot project;
                              ``(iii) procedures for standardizing allotment
                          amounts that takes into account the allotments
                          typically received by residents of covered
                          facilities; and
                              ``(iv) a commitment to carry out the pilot
                          project in compliance with the requirements of
                          this subsection other than paragraph (1)(B).
                ``(3) Authorization of implementation in all states.--
                        ``(A) In general.--The Secretary shall--
                              ``(i) determine whether to authorize
                          implementation of paragraph (1) in all States; and
                              ``(ii) notify the Committee on Agriculture of
                          the House of Representatives and the Committee on
                          Agriculture, Nutrition, and Forestry of the Senate
                          of the determination.
                        ``(B) Determination not to authorize implementation
                    in all states.--
                              ``(i) In general.--If the Secretary makes a
                          finding described in clause (ii), the Secretary--
                                        ``(I) shall not authorize
                                    implementation of paragraph (1) in all
                                    States; and
                                        ``(II) shall terminate all pilot
                                    projects under paragraph (2) within a
                                    reasonable period of time (as determined
                                    by the Secretary).
                              ``(ii) Finding.--The finding referred to in
                          clause (i) is that--
                                        ``(I) an insufficient number of
                                    project plans that the Secretary
                                    determines to be eligible for approval
                                    are submitted by State agencies under
                                    paragraph (2)(B); or
                                        ``(II)(aa) a sufficient number of
                                    pilot projects have been carried out
                                    under paragraph (2)(A); and
                                        ``(bb) authorization of
                                    implementation of paragraph (1) in all
                                    States is not in the best interest of
                                    the food stamp program.''.

        (b) Conforming Amendments.--
                (1) Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C.
            2012(i)) is amended--
                        (A) by striking ``(i) `Household' means (1) an'' and
                    inserting the following:

        ``(i)(1) `Household' means--
                ``(A) an'';
                        (B) in the first sentence, by striking ``others, or
                    (2) a group'' and inserting the following: ``others; or
                ``(B) a group'';
                        (C) in the second sentence, by striking ``Spouses''
                    and inserting the following:

    [[Page 116 STAT. 313]]

        ``(2) Spouses'';
                        (D) in the third sentence, by striking
                    ``Notwithstanding'' and inserting the following:

        ``(3) Notwithstanding'';
                        (E) in paragraph (3) (as designated by subparagraph
                    (D)), by striking ``the preceding sentences'' and
                    inserting ``paragraphs (1) and (2)'';
                        (F) in the fourth sentence, by striking ``In no
                    event'' and inserting the following:

        ``(4) In no event'';
                        (G) in the fifth sentence, by striking ``For the
                    purposes of this subsection, residents'' and inserting
                    the following:

        ``(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''; and
                        (H) in paragraph (5) (as designated by subparagraph
                    (G))--
                              (i) by striking ``Act, or are individuals''
                          and inserting the following: ``Act.
                ``(B) Individuals'';
                              (ii) by striking ``such section, temporary''
                          and inserting the following: ``that section.
                ``(C) Temporary'';
                              (iii) by striking ``children, residents'' and
                          inserting the following: ``children.
                ``(D) Residents'';
                              (iv) by striking ``coupons, and narcotics''
                          and inserting the following: ``coupons.
                ``(E) Narcotics''; and
                              (v) by striking ``shall not'' and all that
                          follows and inserting a period.
                (2) Section 5(a) of the Food Stamp Act of 1977 (7 U.S.C.
            2014(a)) is amended by striking ``the third sentence of section
            3(i)'' each place it appears and inserting ``section 3(i)(4)''.
                (3) Section 8(e)(1) of the Food Stamp Act of 1977 (7 U.S.C.
            2017(e)(1)) is amended by striking ``the last sentence of
            section 3(i)'' and inserting ``section 3(i)(5)''.
                (4) Section 17(b)(1)(B)(iv)(III)(aa) of the Food Stamp Act
            of 1977 (7 U.S.C. 2026(b)(1)(B)(iv)(III)(aa)) is amended by
            striking ``the last 2 sentences of section 3(i)'' and inserting
            ``paragraphs (4) and (5) of section 3(i)''.

    SEC. 4113. REDEMPTION OF BENEFITS THROUGH GROUP LIVING ARRANGEMENTS.

        (a) In General.--Section 10 of the Food Stamp Act of 1977 (7 U.S.C.
    2019) is amended by inserting after the first sentence the following:
    ``Notwithstanding the preceding sentence, a center, organization,
    institution, shelter, group living arrangement, or establishment
    described in that sentence may be authorized to redeem coupons through a
    financial institution described in that sentence if the center,
    organization, institution, shelter, group living arrangement, or
    establishment is equipped with 1 or more point-of-sale devices and is
    operating in an area in which an electronic benefit transfer system
    described in section 7(i) has been implemented.''.

    [[Page 116 STAT. 314]]

        (b) Effective <<NOTE: 7 USC 2019 note.>> Date.--The amendment made
    by this section takes effect on the date of enactment of this Act.

    SEC. 4114. AVAILABILITY OF FOOD STAMP PROGRAM APPLICATIONS ON THE
                INTERNET.

        (a) In General.--Section 11(e)(2)(B)(ii) of the Food Stamp Act of
    1977 (7 U.S.C. 2020(e)(2)(B)(ii)) is amended--
                (1) by inserting ``(I)'' after ``(ii)'';
                (2) in subclause (I) (as designated by paragraph (1)), by
            adding ``and'' at the end; and
                (3) by adding at the end the following:
                        ``(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;''.

        (b) Effective <<NOTE: 7 USC 2020 note.>> Date.--The amendments made
    by this section take effect 18 months after the date of enactment of
    this Act.

    SEC. 4115. TRANSITIONAL FOOD STAMPS FOR FAMILIES MOVING FROM WELFARE.

        (a) In General.--Section 11 of the Food Stamp Act of 1977 (7 U.S.C.
    2020) is amended by adding at the end the following:
        ``(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 receive transitional food stamp benefits for a
            period of not more than 5 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 the change in household income as a
            result of--
                        ``(A) the termination of cash assistance; and
                        ``(B) at the option of the State agency, information
                    from another program in which the household
                    participates.
                ``(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
                    recertification of eligibility; and
                        ``(B) initiate a new certification period for the
                    household without regard to whether the preceding
                    certification 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.
                ``(6) Applications for recertification.--

    [[Page 116 STAT. 315]]

                        ``(A) In general.--A household receiving
                    transitional benefits under this subsection may apply
                    for recertification at any time during the transitional
                    benefits period under paragraph (2).
                        ``(B) Determination of allotment.--If a household
                    applies for recertification under subparagraph (A), the
                    allotment of the household for all subsequent months
                    shall be determined without regard to this
                    subsection.''.

        (b) Conforming Amendments.--
                (1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C.
            2012(c)) is amended by adding at the end the following: ``The
            limits specified in this subsection may be extended until the
            end of any transitional benefit period established under section
            11(s).''.
                (2) Section 6(c) of the Food Stamp Act of 1977 (7 U.S.C.
            2015(c)) is amended by striking ``No household'' and inserting
            ``Except in a case in which a household is receiving
            transitional benefits during the transitional benefits period
            under section 11(s), no household''.

    SEC. 4116. GRANTS FOR SIMPLE APPLICATION AND ELIGIBILITY DETERMINATION
                SYSTEMS AND IMPROVED ACCESS TO BENEFITS.

        (a) In General.--Section 11 of the Food Stamp Act of 1977 (7 U.S.C.
    2020) (as amended by section 4115(a)) is amended by adding at the end
    the following:
        ``(t) Grants for Simple Application and Eligibility Determination
    Systems and Improved Access to Benefits.--
                ``(1) In general.--For each of fiscal years 2003 through
            2007, the Secretary shall use not more than $5,000,000 of funds
            made available under section 18(a)(1) to make grants to pay 100
            percent of the costs of eligible entities approved by the
            Secretary to carry out projects to develop and implement--
                        ``(A) simple food stamp application and eligibility
                    determination systems; or
                        ``(B) measures to improve access to food stamp
                    benefits by eligible households.
                ``(2) Types of projects.--A project under paragraph (1) may
            consist of--
                        ``(A) coordinating application and eligibility
                    determination processes, including verification
                    practices, under the food stamp program and other
                    Federal, State, and local assistance programs;
                        ``(B) establishing methods for applying for benefits
                    and determining eligibility that--
                              ``(i) more extensively use--
                                        ``(I) communications by telephone;
                                    and
                                        ``(II) electronic alternatives such
                                    as the Internet; or
                              ``(ii) otherwise improve the administrative
                          infrastructure used in processing applications and
                          determining eligibility;
                        ``(C) developing procedures, training materials, and
                    other resources aimed at reducing barriers to
                    participation and reaching eligible households;

    [[Page 116 STAT. 316]]

                        ``(D) improving methods for informing and enrolling
                    eligible households; or
                        ``(E) carrying out such other activities as the
                    Secretary determines to be appropriate.
                ``(3) Limitation.--A grant under this subsection shall not
            be made for the ongoing cost of carrying out any project.
                ``(4) Eligible entities.--To be eligible to receive a grant
            under this subsection, an entity shall be--
                        ``(A) a State agency administering the food stamp
                    program;
                        ``(B) a State or local government;
                        ``(C) an agency providing health or welfare
                    services;
                        ``(D) a public health or educational entity; or
                        ``(E) a private nonprofit entity such as a
                    community-based organization, food bank, or other
                    emergency feeding organization.
                ``(5) Selection of eligible entities.--The Secretary--
                        ``(A) shall develop criteria for the selection of
                    eligible entities to receive grants under this
                    subsection; and
                        ``(B) may give preference to any eligible entity
                    that consists of a partnership between a governmental
                    entity and a nongovernmental entity.''.

        (b) Conforming Amendments.--Section 17 of the Food Stamp Act of 1977
    (7 U.S.C. 2026) is amended--
                (1) by striking subsection (i); and
                (2) by redesignating subsections (j) and (k) as subsections
            (i) and (j), respectively.

    SEC. 4117. DELIVERY TO RETAILERS OF NOTICES OF ADVERSE ACTION.

        (a) In General.--Section 14(a) of the Food Stamp Act of 1977 (7
    U.S.C. 2023(a)) is amended by striking paragraph (2) and inserting the
    following:
                ``(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.''.

        (b) Effective <<NOTE: 7 USC 2023 note.>> Date.--The amendment made
    by this section takes effect on the date of enactment of this Act.

    SEC. 4118. REFORM OF QUALITY CONTROL SYSTEM.

        (a) In General.--Section 16(c) of the Food Stamp Act of 1977 (7
    U.S.C. 2025(c)) is amended--
                (1) by striking ``(c)(1) The program'' and all that follows
            through the end of paragraph (1) and inserting the following:

        ``(c) Quality Control System.--
                ``(1) In general.--
                        ``(A) System.--In carrying out the food stamp
                    program, the Secretary shall carry out a system that
                    enhances payment accuracy and improves administration by
                    establishing fiscal incentives that require State
                    agencies with high payment error rates to share in the
                    cost of payment error.
                        ``(B) Adjustment of federal share of administrative
                    costs for fiscal years before fiscal year 2003.--
                              ``(i) In general.--Subject to clause (ii),
                          with respect to any fiscal year before fiscal year
                          2003, the Secretary shall adjust a State agency's
                          federally funded share of administrative costs
                          under subsection (a), other than the costs already
                          shared in excess of 50

    [[Page 116 STAT. 317]]

                          percent under the proviso in the first sentence of
                          subsection (a) or under subsection (g), by
                          increasing that share of all such administrative
                          costs by 1 percentage point to a maximum of 60
                          percent of all such administrative costs for each
                          full \1/10\ of a percentage point by which the
                          payment error rate is less than 6 percent.
                              ``(ii) Limitation.--Only States with a rate of
                          invalid decisions in denying eligibility that is
                          less than a nationwide percentage that the
                          Secretary determines to be reasonable shall be
                          entitled to the adjustment under clause (i).
                        ``(C) Establishment of liability amount for fiscal
                    year 2003 and thereafter.--With respect to fiscal year
                    2004 and any fiscal year thereafter for which the
                    Secretary determines that, for the second or subsequent
                    consecutive fiscal year, a 95 percent statistical
                    probability exists that the payment error rate of a
                    State agency exceeds 105 percent of the national
                    performance measure for payment error rates announced
                    under paragraph (6), the Secretary shall establish an
                    amount for which the State agency may be liable
                    (referred to in this paragraph as the `liability
                    amount') that is equal to the product obtained by
                    multiplying--
                              ``(i) the value of all allotments issued by
                          the State agency in the fiscal year;
                              ``(ii) the difference between--
                                        ``(I) the payment error rate of the
                                    State agency; and
                                        ``(II) 6 percent; and
                              ``(iii) 10 percent.
                        ``(D) Authority of secretary with respect to
                    liability amount.--With respect to the liability amount
                    established for a State agency under subparagraph (C)
                    for any fiscal year, the Secretary shall--
                              ``(i)(I) waive the responsibility of the State
                          agency to pay all or any portion of the liability
                          amount established for the fiscal year (referred
                          to in this paragraph as the `waiver amount');
                              ``(II) require that a portion, not to exceed
                          50 percent, of the liability amount established
                          for the fiscal year be used by the State agency
                          for new investment, approved by the Secretary, to
                          improve administration by the State agency of the
                          food stamp program (referred to in this paragraph
                          as the `new investment amount'), which new
                          investment amount shall not be matched by Federal
                          funds;
                              ``(III) designate a portion, not to exceed 50
                          percent, of the amount established for the fiscal
                          year for payment to the Secretary in accordance
                          with subparagraph (E) (referred to in this
                          paragraph as the `at-risk amount'); or
                              ``(IV) take any combination of the actions
                          described in subclauses (I) through (III); or
                              ``(ii) make the determinations described in
                          clause (i) and enter into a settlement with the
                          State agency, only with respect to any waiver
                          amount or new investment amount, before the end of
                          the fiscal year in

    [[Page 116 STAT. 318]]

                          which the liability amount is determined under
                          subparagraph (C).
                        ``(E) Payment of at-risk amount for certain
                    states.--
                              ``(i) In general.--A State agency shall pay to
                          the Secretary the at-risk amount designated under
                          subparagraph (D)(i)(III) for any fiscal year in
                          accordance with clause (ii), if, with respect to
                          the immediately following fiscal year, a liability
                          amount has been established for the State agency
                          under subparagraph (C).
                              ``(ii) Method of payment of at-risk amount.--
                                        ``(I) Remission to the secretary.--
                                    In the case of a State agency required
                                    to pay an at-risk amount under clause
                                    (i), as soon as practicable after
                                    completion of all administrative and
                                    judicial reviews with respect to that
                                    requirement to pay, the chief executive
                                    officer of the State shall remit to the
                                    Secretary the at-risk amount required to
                                    be paid.
                                        ``(II) Alternative method of
                                    collection.--
                                                ``(aa) In general.--If the
                                            chief executive officer of the
                                            State fails to make the payment
                                            under subclause (I) within a
                                            reasonable period of time
                                            determined by the Secretary, the
                                            Secretary may reduce any amount
                                            due to the State agency under
                                            any other provision of this
                                            section by the amount required
                                            to be paid under clause (i).
                                                ``(bb) Accrual of
                                            interest.--During any period of
                                            time determined by the Secretary
                                            under item (aa), interest on the
                                            payment under subclause (I)
                                            shall not accrue under section
                                            13(a)(2).
                        ``(F) Use of portion of liability amount for new
                    investment.--
                              ``(i) Reduction of other amounts due to state
                          agency.--In the case of a State agency that fails
                          to comply with a requirement for new investment
                          under subparagraph (D)(i)(II) or clause (iii)(I),
                          the Secretary may reduce any amount due to the
                          State agency under any other provision of this
                          section by the portion of the liability amount
                          that has not been used in accordance with that
                          requirement.
                              ``(ii) Effect of state agency's wholly
                          prevailing on appeal.--If a State agency begins
                          required new investment under subparagraph
                          (D)(i)(II), the State agency appeals the liability
                          amount of the State agency, and the determination
                          by the Secretary of the liability amount is
                          reduced to $0 on administrative or judicial
                          review, the Secretary shall pay to the State
                          agency an amount equal to 50 percent of the new
                          investment amount that was included in the
                          liability amount subject to the appeal.
                              ``(iii) Effect of secretary's wholly
                          prevailing on appeal.--If a State agency does not
                          begin required new investment under subparagraph
                          (D)(i)(II), the State agency appeals the liability
                          amount of the State

    [[Page 116 STAT. 319]]

                          agency, and the determination by the Secretary of
                          the liability amount is wholly upheld on
                          administrative or judicial review, the Secretary
                          shall--
                                        ``(I) require all or any portion of
                                    the new investment amount to be used by
                                    the State agency for new investment,
                                    approved by the Secretary, to improve
                                    administration by the State agency of
                                    the food stamp program, which amount
                                    shall not be matched by Federal funds;
                                    and
                                        ``(II) require payment of any
                                    remaining portion of the new investment
                                    amount in accordance with subparagraph
                                    (E)(ii).
                              ``(iv) Effect of neither party's wholly
                          prevailing on appeal.--The
                          Secretary <<NOTE: Regulations.>> shall promulgate
                          regulations regarding obligations of the Secretary
                          and the State agency in a case in which the State
                          agency appeals the liability amount of the State
                          agency and neither the Secretary nor the State
                          agency wholly prevails.
                        ``(G) Corrective action plans.--The Secretary shall
                    foster management improvements by the States by
                    requiring State agencies, other than State agencies with
                    payment error rates of less than 6 percent, to develop
                    and implement corrective action plans to reduce payment
                    errors.'';
                (2) in paragraph (4), by striking ``(4)'' and all that
            follows through the end of the first sentence and inserting the
            following:
                ``(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,
            liability amount or new investment amount under paragraph (1),
            or performance under the performance measures under subsection
            (d).'';
                (3) in paragraph (5)--
                        (A) by striking ``(5)'' and all that follows through
                    the end of the second sentence and inserting the
                    following:
                ``(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
            State agency's payment error rate, liability amount or new
            investment amount under paragraph (1), or performance under the
            performance measures under subsection (d).''; and
                        (B) in the last sentence, by striking ``paragraph
                    (1)(C)'' and inserting ``paragraph (1)'';
                (4) in paragraph (6)--
                        (A) by striking ``(6) At'' and inserting the
                    following:
                ``(6) National performance measure for payment error
            rates.--
                        ``(A) Announcement.--At'';
                        (B) in subparagraph (A) (as designated by
                    subparagraph (A)), by striking ``and incentive payments
                    or claims pursuant to paragraphs (1)(A) and (1)(C)'';
                        (C) in the first and third sentences, by striking
                    ``paragraph (5)'' each place it appears and inserting
                    ``paragraph (8)'';

    [[Page 116 STAT. 320]]

                        (D) by striking ``Where a State'' and inserting the
                    following:
                        ``(B) Use of alternative measure of state error.--
                    Where a State'';
                        (E) by striking ``The announced'' and inserting the
                    following:
                        ``(C) Use of national performance measure.--The
                    announced'';
                        (F) in subparagraph (C) (as designated by
                    subparagraph (E)), by striking ``the State share of the
                    cost of payment error under paragraph (1)(C)'' and
                    inserting ``the liability amount of a State under
                    paragraph (1)(C)''; and
                        (G) by adding at the end the following:
                        ``(D) No administrative or judicial review.--The
                    national performance measure announced under this
                    paragraph shall not be subject to administrative or
                    judicial review.'';
                (5) in paragraph (7)--
                        (A) by striking ``(7) If the Secretary asserts a
                    financial claim against'' and inserting the following:
                ``(7) Administrative and judicial review.--
                        ``(A) In general.--Except as provided in
                    subparagraphs (B) and (C), if the Secretary asserts a
                    financial claim against or establishes a liability
                    amount with respect to'';
                        (B) in subparagraph (A) (as designated by
                    subparagraph (A)), by striking ``paragraph (1)(C)'' and
                    inserting ``paragraph (1)''; and
                        (C) by adding at the end the following:
                        ``(B) Determination of payment error rate.--With
                    respect to any fiscal year, a determination of the
                    payment error rate of a State agency or a determination
                    whether the payment error rate exceeds 105 percent of
                    the national performance measure for payment error rates
                    shall be subject to administrative or judicial review
                    only if the Secretary establishes a liability amount
                    with respect to the fiscal year under paragraph (1)(C).
                        ``(C) Authority of secretary with respect to
                    liability amount.--An action by the Secretary under
                    subparagraph (D) or (F)(iii) of paragraph (1) shall not
                    be subject to administrative or judicial review.''; and
                (6) in paragraph (8)--
                        (A) in subparagraph (A), by striking ``paragraph
                    (1)(C)'' and inserting ``paragraph (1)'';
                        (B) in subparagraph (C)--
                              (i) in clause (i), by striking ``payment
                          claimed against State agencies; and'' and
                          inserting ``payment claimed against State agencies
                          or liability amount established with respect to
                          State agencies;'';
                              (ii) in clause (ii), by striking ``claims.''
                          and inserting ``claims or liability amounts;
                          and''; and
                              (iii) by adding at the end the following:
                ``(iii) provide a copy of the document providing
            notification under clause (ii) to the chief executive officer
            and the legislature of the State.''; and
                        (C) in subparagraphs (D) and (H), by inserting ``or
                    liability amount'' after ``claim'' each place it
                    appears.

    [[Page 116 STAT. 321]]

        (b) Authority To Settle Claims Concerning At-Risk Amounts.--Section
    13(a) of the Food Stamp Act of 1977 (7 U.S.C. 2022(a)) is amended--
                (1) by striking ``(a)(1) The'' and inserting the following:

        ``(a) General Authority of the Secretary.--
                ``(1) Determination of claims.--Except in the case of an at-
            risk amount required under section 16(c)(1)(D)(i)(III), the'';
                (2) by striking the fourth sentence;
                (3) by striking ``To the extent'' and inserting the
            following:
                ``(2) Claims established under quality control system.--To
            the extent'';
                (4) in paragraph (2) (as designated by paragraph (3)), by
            striking ``section 16(c)(1)(C)'' and inserting ``section
            16(c)(1)'';
                (5) by striking ``Any interest'' and inserting the
            following:
                ``(3) Computation of interest.--Any interest''; and
                (6) by striking ``(2) Each adult'' and inserting the
            following:
                ``(4) Joint and several liability of household members.--
            Each adult''.

        (c) Crediting of Payments to Food Stamp Appropriations Account.--
    Section 18(e) of the Food Stamp Act of 1977 (7 U.S.C. 2027(e)) is
    amended in the first sentence--
                (1) by striking ``11(g) and (h), and'' and inserting
            ``subsections (g) and (h) of section 11,''; and
                (2) by inserting ``and section 16(c)(1),'' after ``section
            13,''.

        (d) Conforming Amendments.--Section 22(h) of the Food Stamp Act of
    1977 (7 U.S.C. 2031(h)) is amended--
                (1) in the second sentence, by striking ``section
            16(c)(1)(C)'' and inserting ``section 16(c)(1)''; and
                (2) by striking the third sentence.

        (e) Applicability.--The amendments <<NOTE: 7 USC 2022 note.>> made
    by this section shall not apply with respect to any sanction, appeal,
    new investment agreement, or other action by the Secretary of
    Agriculture or a State agency that is based on a payment error rate
    calculated for any fiscal year before fiscal year 2003.

    SEC. 4119. IMPROVEMENT OF CALCULATION OF STATE PERFORMANCE MEASURES.

        (a) In General.--Section 16(c)(8) of the Food Stamp Act of 1977 (7
    U.S.C. 2025(c)(8)) is amended--
                (1) in subparagraph (B), by striking ``180 days after the
            end of the fiscal year'' and inserting ``the first May 31 after
            the end of the fiscal year referred to in subparagraph (A)'';
            and
                (2) in subparagraph (C), by striking ``30 days thereafter''
            and inserting ``the first June 30 after the end of the fiscal
            year referred to in subparagraph (A)''.

        (b) Effective <<NOTE: 7 USC 2025 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    SEC. 4120. BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST IMPROVED
                PERFORMANCE.

        (a) In General.--Section 16 of the Food Stamp Act of 1977 (7 U.S.C.
    2025) is amended by striking subsection (d) and inserting the following:
        ``(d) Bonuses for States That Demonstrate High or Most Improved
    Performance.--
                ``(1) Fiscal years 2003 and 2004.--

    [[Page 116 STAT. 322]]

                        ``(A) Guidance.-- <<NOTE: Deadline.>> With respect
                    to fiscal years 2003 and 2004, the Secretary shall
                    establish, in guidance issued to State agencies not
                    later than October 1, 2002--
                              ``(i) performance criteria relating to--
                                        ``(I) actions taken to correct
                                    errors, reduce rates of error, and
                                    improve eligibility determinations; and
                                        ``(II) other indicators of effective
                                    administration determined by the
                                    Secretary; and
                              ``(ii) standards for high and most improved
                          performance to be used in awarding performance
                          bonus payments under subparagraph (B)(ii).
                        ``(B) Performance bonus payments.--With respect to
                    each of fiscal years 2003 and 2004, the Secretary
                    shall--
                              ``(i) measure the performance of each State
                          agency with respect to the criteria established
                          under subparagraph (A)(i); and
                              ``(ii) subject to paragraph (3), award
                          performance bonus payments in the following fiscal
                          year, in a total amount of $48,000,000 for each
                          fiscal year, to State agencies that meet standards
                          for high or most improved performance established
                          by the Secretary under subparagraph (A)(ii).
                ``(2) Fiscal years 2005 and thereafter.--
                        ``(A) Regulations.--With respect to fiscal year 2005
                    and each fiscal year thereafter, the Secretary shall--
                              ``(i) establish, by regulation, performance
                          criteria relating to--
                                        ``(I) actions taken to correct
                                    errors, reduce rates of error, and
                                    improve eligibility determinations; and
                                        ``(II) other indicators of effective
                                    administration determined by the
                                    Secretary;
                              ``(ii) establish, by regulation, standards for
                          high and most improved performance to be used in
                          awarding performance bonus payments under
                          subparagraph (B)(ii); and
                              ``(iii) before issuing proposed regulations to
                          carry out clauses (i) and (ii), solicit ideas for
                          performance criteria and standards for high and
                          most improved performance from State agencies and
                          organizations that represent State interests.
                        ``(B) Performance bonus payments.--With respect to
                    fiscal year 2005 and each fiscal year thereafter, the
                    Secretary shall--
                              ``(i) measure the performance of each State
                          agency with respect to the criteria established
                          under subparagraph (A)(i); and
                              ``(ii) subject to paragraph (3), award
                          performance bonus payments in the following fiscal
                          year, in a total amount of $48,000,000 for each
                          fiscal year, to State agencies that meet standards
                          for high or most improved performance established
                          by the Secretary under subparagraph (A)(ii).
                ``(3) Prohibition on receipt of performance bonus
            payments.--A State agency shall not be eligible for a
            performance bonus payment with respect to any fiscal year for
            which the

    [[Page 116 STAT. 323]]

            State agency has a liability amount established under subsection
            (c)(1)(C).
                ``(4) Payments not subject to judicial review.--A
            determination by the Secretary whether, and in what amount, to
            award a performance bonus payment under this subsection shall
            not be subject to administrative or judicial review.''.

        (b) Effective <<NOTE: 7 USC 2025 note.>> Date.--The amendment made
    by this section takes effect on the date of enactment of this Act.

    SEC. 4121. EMPLOYMENT AND TRAINING PROGRAM.

        (a) Levels of Funding.--Section 16(h)(1) of the Food Stamp Act of
    1977 (7 U.S.C. 2025(h)(1)) is amended--
                (1) in subparagraph (A), by striking clause (vii) and
            inserting the following:
                              ``(vii) for each of fiscal years 2002 through
                          2007, $90,000,000.'';
                (2) by striking subparagraph (B) and inserting the
            following:
                        ``(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).''; and
                (3) by striking subparagraphs (E) through (G) and inserting
            the following:
                        ``(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 $20,000,000
                          for each of fiscal years 2002 through 2007 to
                          reimburse a State agency that is eligible under
                          clause (ii) for the 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 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--
                                        ``(I) is in the last month of the 3-
                                    month period described in section
                                    6(o)(2);
                                        ``(II) is not eligible for an
                                    exception under section 6(o)(3);
                                        ``(III) is not eligible for a waiver
                                    under section 6(o)(4); and
                                        ``(IV) is not exempt under section
                                    6(o)(6).''.

        (b) Carryover <<NOTE: 7 USC 2025 note.>> Funds.--Notwithstanding any
    other provision of law, funds provided under section 16(h)(1)(A) of the
    Food Stamp

    [[Page 116 STAT. 324]]

    Act of 1977 (7 U.S.C. 2025(h)(1)(A)) for any fiscal year before fiscal
    year 2002 shall be rescinded on the date of enactment of this Act,
    unless obligated by a State agency before that date.

        (c) Participant Expenses.--Section 6(d)(4)(I)(i)(I) of the Food
    Stamp Act of 1977 (7 U.S.C. 2015(d)(4)(I)(i)(I)) is amended by striking
    ``, except that the State agency may limit such reimbursement to each
    participant to $25 per month''.
        (d) Federal Reimbursement.--Section 16(h)(3) of the Food Stamp Act
    of 1977 (7 U.S.C. 2025(h)(3)) is amended by striking ``such total amount
    shall not exceed an amount representing $25 per participant per month
    for costs of transportation and other actual costs (other than dependent
    care costs) and'' and inserting ``the amount of the reimbursement for
    dependent care expenses shall not exceed''.
        (e) Effective <<NOTE: 7 USC 2015 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    SEC. 4122. REAUTHORIZATION OF FOOD STAMP PROGRAM AND FOOD DISTRIBUTION
                PROGRAM ON INDIAN RESERVATIONS.

        (a) Reductions in Payments for Administrative Costs.--Section
    16(k)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2025(k)(3)) is
    amended--
                (1) in the first sentence of subparagraph (A), by striking
            ``2002'' and inserting ``2007''; and
                (2) in subparagraph (B)(ii), by striking ``2002'' and
            inserting ``2007''.

        (b) Cash Payment Pilot Projects.--Section 17(b)(1)(B)(vi) of the
    Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(vi)) is amended by
    striking ``2002'' and inserting ``2007''.
        (c) Authorization of Appropriations.--Section 18(a)(1) of the Food
    Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended in the first sentence
    by striking ``1996 through 2002'' and inserting ``2003 through 2007''.

    SEC. 4123. EXPANDED GRANT AUTHORITY.

        (a) In General.--Section 17(a)(1) of the Food Stamp Act of 1977 (7
    U.S.C. 2026(a)(1)) is amended--
                (1) by striking ``, by way of making contracts with or
            grants to public or private organizations or agencies,'' and
            inserting ``enter into contracts with or make grants to public
            or private organizations or agencies under this section to'';
            and
                (2) by adding at the end the following: ``The waiver
            authority of the Secretary under subsection (b) shall extend to
            all contracts and grants under this section.''.

        (b) Effective <<NOTE: 7 USC 2026 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    SEC. 4124. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.

        (a) Consolidated Funding.--Section 19 of the Food Stamp Act of 1977
    (7 U.S.C. 2028) is amended--
                (1) by striking the section heading and ``(a)(1)(A) From''
            and all that follows through ``(2) The'' and inserting the
            following:

    [[Page 116 STAT. 325]]

    ``SEC. 19. CONSOLIDATED BLOCK GRANTS FOR PUERTO RICO AND AMERICAN SAMOA.

        ``(a) Payments to Governmental Entities.--
                ``(1) Definition of governmental entity.--In this
            subsection, the term `governmental entity' means--
                        ``(A) the Commonwealth of Puerto Rico; and
                        ``(B) American Samoa.
                ``(2) Block grants.--
                        ``(A) Amount of block grants.--From the sums
                    appropriated under this Act, the Secretary shall,
                    subject to this section, pay to governmental entities to
                    pay the expenditures for nutrition assistance programs
                    for needy persons as described in subparagraphs (B) and
                    (C)--
                              ``(i) for fiscal year 2003, $1,401,000,000;
                          and
                              ``(ii) for each of fiscal years 2004 through
                          2007, the amount specified in clause (i), as
                          adjusted by the percentage by which the thrifty
                          food plan has been adjusted under section 3(o)(4)
                          between June 30, 2002, and June 30 of the
                          immediately preceding fiscal year.
                        ``(B) Payments to commonwealth of puerto rico.--
                              ``(i) In general.--For fiscal year 2003 and
                          each fiscal year thereafter, the Secretary shall
                          use 99.6 percent of the funds made available under
                          subparagraph (A) for payment to the Commonwealth
                          of Puerto Rico to pay--
                                        ``(I) 100 percent of the
                                    expenditures by the Commonwealth for the
                                    fiscal year for the provision of
                                    nutrition assistance included in the
                                    plan of the Commonwealth approved under
                                    subsection (b); and
                                        ``(II) 50 percent of the related
                                    administrative expenses.
                              ``(ii) Exception for expenditures for certain
                          systems.--Notwithstanding clause (i), the
                          Commonwealth of Puerto Rico may spend in fiscal
                          year 2002 or 2003 not more than $6,000,000 of the
                          amount required to be paid to the Commonwealth for
                          fiscal year 2002 under this paragraph (as in
                          effect on the day before the date of enactment of
                          this clause) 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;
                                        ``(II) implementing systems to
                                    simplify the determination of
                                    eligibility to receive the nutrition
                                    assistance; and
                                        ``(III) operating systems to deliver
                                    the nutrition assistance through
                                    electronic benefit transfers.
                        ``(C) Payments to american samoa.--For fiscal year
                    2003 and each fiscal year thereafter, the Secretary
                    shall use 0.4 percent of the funds made available under
                    subparagraph (A) for payment to American Samoa to pay
                    100 percent of the expenditures by American Samoa for a
                    nutrition assistance program extended under section
                    601(c) of Public Law 96-597 (48 U.S.C. 1469d(c)).
                        ``(D) Carryover of funds.--For fiscal year 2002 and
                    each fiscal year thereafter, not more than 2 percent of
                    the funds made available under this paragraph for the

    [[Page 116 STAT. 326]]

                    fiscal year to each governmental entity may be carried
                    over to the following fiscal year.
                ``(3) Time and manner of payments to commonwealth of puerto
            rico.--The'';
                (2) in subsection (b), by striking ``subsection (a)(1)(A)''
            each place it appears and inserting ``subsection (a)(2)(B)'';
            and
                (3) in subsection (c), by striking ``subsection (a)(1)(A)''
            each place it appears and inserting ``subsection (a)(2)(A)''.

        (b) Conforming Amendment.--Section 24 of the Food Stamp Act of 1977
    (7 U.S.C. 2033) is repealed.
        (c) Applicability.-- <<NOTE: 7 USC 2028 note.>>
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section apply beginning on October 1,
            2002.
                (2) Exceptions.--Subparagraphs (B)(ii) and (D) of section
            19(a)(2) of the Food Stamp Act of 1977 (as amended by subsection
            (a)(1)) apply beginning on the date of enactment of this Act.

        (d) Effective <<NOTE: 7 USC 2028 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    SEC. 4125. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

        (a) In General.--Section 25 of the Food Stamp Act of 1977 (7 U.S.C.
    2034) is amended--
                (1) in subsection (a)--
                        (A) by striking ``(1)'' and inserting ``(1)(A)'';
                        (B) by redesignating paragraphs (2) and (3) as
                    subparagraphs (B) and (C), respectively, of paragraph
                    (1);
                        (C) in paragraph (1)(C) (as redesignated by
                    subparagraph (B)), by striking the period at the end and
                    inserting ``; or''; and
                        (D) by adding at the end the following:
                ``(2) meet specific State, local, or neighborhood food and
            agricultural 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 agricultural producers
                    and low-income consumers.'';
                (2) in subsection (b)(2)(B)--
                        (A) by striking ``$2,500,000'' and inserting
                    ``$5,000,000''; and
                        (B) by striking ``2002'' and inserting ``2007'';
                (3) in subsection (d), by striking paragraph (4) and
            inserting the following:
                ``(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 agricultural problems of the
            communities, such as food policy councils and food planning
            associations.''; and
                (4) by striking subsection (h) and inserting the following:

        ``(h) Innovative Programs for Addressing Common Community
    Problems.--
                ``(1) In <<NOTE: Contracts.>> general.--The Secretary shall
            offer to enter into a contract with, or make a grant to, 1
            nongovernmental organization that meets the requirements of
            paragraph (2) to

    [[Page 116 STAT. 327]]

            coordinate with Federal agencies, States, political
            subdivisions, and nongovernmental organizations (collectively
            referred to in this subsection as `targeted entities') to gather
            information, and recommend to the targeted entities, innovative
            programs for addressing common community problems, including--
                        ``(A) loss of farms and ranches;
                        ``(B) rural poverty;
                        ``(C) welfare dependency;
                        ``(D) hunger;
                        ``(E) the need for job training; and
                        ``(F) the need for self-sufficiency by individuals
                    and communities.
                ``(2) Nongovernmental organization.--The nongovernmental
            organization referred to in paragraph (1) shall--
                        ``(A) be selected by the Secretary on a competitive
                    basis;
                        ``(B) be experienced in working with other targeted
                    entities and in organizing workshops that demonstrate
                    programs to other targeted entities;
                        ``(C) be experienced in identifying programs that
                    effectively address community problems described in
                    paragraph (1) that can be implemented by other targeted
                    entities;
                        ``(D) be experienced in, and capable of, receiving
                    information from and communicating with other targeted
                    entities throughout the United States;
                        ``(E) be experienced in operating a national
                    information clearinghouse that addresses 1 or more of
                    the community problems described in paragraph (1); and
                        ``(F) as a condition of entering into the contract
                    or receiving the grant referred to in paragraph (1),
                    agree--
                              ``(i) to contribute in-kind resources toward
                          implementation of the contract or grant;
                              ``(ii) to provide to other targeted entities
                          information and guidance on the innovative
                          programs referred to in paragraph (1); and
                              ``(iii) to operate a national information
                          clearinghouse on innovative means for addressing
                          community problems described in paragraph (1)
                          that--
                                        ``(I) is easily usable by--
                                                ``(aa) Federal, State, and
                                            local government agencies;
                                                ``(bb) local community
                                            leaders;
                                                ``(cc) nongovernmental
                                            organizations; and
                                                ``(dd) the public; and
                                        ``(II) includes information on
                                    approved community food projects.
                ``(3) Audits; effective use of funds.--The Secretary shall
            establish auditing procedures and otherwise ensure the effective
            use of funds made available to carry out this subsection.
                ``(4) Funding.--Not <<NOTE: Deadline.>> later than 90 days
            after the date of enactment of this paragraph, and on October 1
            of each of fiscal years 2003 through 2007, the Secretary shall
            allocate to carry out this subsection $200,000 of the funds made
            available under subsection (b), to remain available until
            expended.''.

        (b) Effective <<NOTE: 7 USC 2034 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    [[Page 116 STAT. 328]]

    SEC. 4126. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE
                PROGRAM.

        (a) In General.--Section 27(a) of the Food Stamp Act of 1977 (7
    U.S.C. 2036(a)) is amended--
                (1) by striking ``1997 through 2002'' and inserting ``2002
            through 2007''; and
                (2) by striking ``$100,000,000'' and inserting
            ``$140,000,000''.

        (b) Effective <<NOTE: 7 USC 2036 note.>> Date.--The amendments made
    by this section take effect on October 1, 2001.

                       Subtitle B--Commodity Distribution

    SEC. 4201. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

        (a) Commodity Distribution Program.--Section 4(a) of the Agriculture
    and Consumer Protection Act of 1973 (7 U.S.C. 612c note; Public Law 93-
    86) is amended in the first sentence by striking ``2002'' and inserting
    ``2007''.
        (b) Commodity Supplemental Food Program.--Section 5 of the
    Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c note;
    Public Law 93-86) is amended--
                (1) by striking subsection (a) and inserting the following:

        ``(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 2007, 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.--
                        ``(A) Fiscal year 2003.--For fiscal year 2003, the
                    amount of each grant per assigned caseload slot shall be
                    equal to the amount of the grant per assigned caseload
                    slot for administrative costs in 2001, adjusted by the
                    percentage change between--
                              ``(i) 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,
                          2001; and
                              ``(ii) the value of that index for the 12-
                          month period ending June 30, 2002.
                        ``(B) Fiscal years 2004 through 2007.--For each of
                    fiscal years 2004 through 2007, the amount of each grant
                    per assigned caseload slot shall be equal to the amount
                    of the grant per assigned caseload slot for the
                    preceding fiscal year, adjusted by the percentage change
                    between--
                              ``(i) 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
                              ``(ii) the value of that index for the 12-
                          month period ending June 30 of the preceding
                          fiscal year.'';

    [[Page 116 STAT. 329]]

                (2) in subsection (d)(2), by striking ``2002'' each place it
            appears and inserting ``2007''; and
                (3) by striking subsection (l) and inserting the following:

        ``(l) Use of Approved Food Safety Technology.--
                ``(1) In general.--In acquiring commodities for distribution
            through a program specified in paragraph (2), the Secretary
            shall not prohibit the use of any technology to improve food
            safety that--
                        ``(A) has been approved by the Secretary; or
                        ``(B) has been approved or is otherwise allowed by
                    the Secretary of Health and Human Services.
                ``(2) Programs.--A program referred to in paragraph (1) is a
            program authorized under--
                        ``(A) this Act;
                        ``(B) the Food Stamp Act of 1977 (7 U.S.C. 2011 et
                    seq.);
                        ``(C) the Emergency Food Assistance Act of 1983 (7
                    U.S.C. 7501 et seq.);
                        ``(D) the Richard B. Russell National School Lunch
                    Act (42 U.S.C. 1751 et seq.); or
                        ``(E) the Child Nutrition Act of 1966 (42 U.S.C.
                    1771 et seq.).''.

        (c) Additional <<NOTE: 7 USC 612c note.>> Funding for Certain
    States.--
                (1) In general.--Not later than 30 days after the date of
            enactment of this Act, of the funds of the Commodity Credit
            Corporation, the Secretary of Agriculture shall make available
            an amount equal to the amount that the Secretary of Agriculture
            determines to be necessary to permit each State that began
            administering the commodity supplemental food program under the
            Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c
            note; Public Law 93-86) in the 2000 caseload cycle to administer
            the program, through the 2002 caseload cycle, at a caseload
            level that is not less than the originally assigned caseload
            level of the State.
                (2) Provision to states.--The Secretary shall provide to
            each State described in paragraph (1) for the purpose described
            in that paragraph the funds made available under that paragraph.

        (d) Effective <<NOTE: 7 USC 612c note.>> Date.--The amendment made
    by subsection (b)(3) takes effect on the date of enactment of this Act.

    SEC. 4202. COMMODITY DONATIONS.

        (a) In General.--The Commodity Distribution Reform Act and WIC
    Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-237) is amended--
                (1) by redesignating sections 17 and 18 as sections 18 and
            19, respectively; and
                (2) by inserting after section 16 the following:

    ``SEC. 17. COMMODITY DONATIONS.

        ``(a) In General.--Notwithstanding any other provision of law
    concerning commodity donations, any commodities acquired in the conduct
    of the operations of the Commodity Credit Corporation and any
    commodities acquired under section 32 of the Act of August 24, 1935 (7
    U.S.C. 612c), to the extent that the commodities are in excess of the
    quantities of commodities that are essential to carry out other
    authorized activities of the Commodity Credit Corporation and the
    Secretary (including any quantity specifically

    [[Page 116 STAT. 330]]

    reserved for a specific purpose), may be used for any program authorized
    to be carried out by the Secretary that involves the acquisition of
    commodities for use in a domestic feeding program, including any program
    conducted by the Secretary that provides commodities to individuals in
    cases of hardship.
        ``(b) Programs.--A program described in subsection (a) includes a
    program authorized by--
                ``(1) the Emergency Food Assistance Act of 1983 (7 U.S.C.
            7501 et seq.);
                ``(2) the Richard B. Russell National School Lunch Act (42
            U.S.C. 1751 et seq.);
                ``(3) the Child Nutrition Act of 1966 (42 U.S.C. 1771 et
            seq.);
                ``(4) the Older Americans Act of 1965 (42 U.S.C. 3001 et
            seq.); or
                ``(5) such other laws as the Secretary determines to be
            appropriate.''.

        (b) Effective <<NOTE: 7 USC 612c note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    SEC. 4203. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL NUTRITION
                PROJECTS.

        Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981 (7
    U.S.C. 1431e(2)(A)) is amended in the first sentence by striking
    ``2002'' and inserting ``2007''.

    SEC. 4204. EMERGENCY FOOD ASSISTANCE.

        Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (7
    U.S.C. 7508(a)(1)) is amended in the first sentence--
                (1) by striking ``$50,000,000'' and inserting
            ``$60,000,000'';
                (2) by striking ``1991 through 2002'' and inserting ``2003
            through 2007'';
                (3) by striking ``administrative'';
                (4) by inserting ``storage,'' after ``processing,''; and
                (5) by inserting ``, including commodities secured 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))'' after
            ``sources''.

                Subtitle C--Child Nutrition and Related Programs

    SEC. 4301. COMMODITIES FOR SCHOOL LUNCH PROGRAM.

        (a) In General.--Section 6(e)(1)(B) of the Richard B. Russell
    National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is amended by
    striking ``2001'' and inserting ``2003''.
        (b) Effective <<NOTE: 42 USC 1755 note.>> Date.--The amendment made
    by this section takes effect on the date of enactment of this Act.

    SEC. 4302. ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS.

        (a) In General.--Section 9(b) of the Richard B. Russell National
    School Lunch Act (42 U.S.C. 1758(b)) is amended by adding at the end the
    following:
                ``(7) Exclusion of certain military housing allowances.--For
            each of fiscal years 2002 and 2003, the amount of a basic
            allowance provided under section 403 of title 37,

    [[Page 116 STAT. 331]]

            United States Code, on behalf of a member of a uniformed service
            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, shall not be considered to be income for the
            purpose of determining the eligibility of a child who is a
            member of the household of the member of a uniformed service for
            free or reduced price lunches under this Act.''.

        (b) Effective <<NOTE: 42 USC 1758 note.>> Date.--The amendment made
    by this section takes effect on the date of enactment of this Act.

    SEC. 4303. PURCHASES OF LOCALLY PRODUCED FOODS.

        Section 9 of the Richard B. Russell National School Lunch Act (42
    U.S.C. 1758) is amended by adding at the end the following:
        ``(j) Purchases of Locally Produced Foods.--
                ``(1) In general.--The Secretary shall--
                        ``(A) encourage institutions participating in the
                    school lunch program under this Act and the school
                    breakfast program established by section 4 of the Child
                    Nutrition Act of 1966 (42 U.S.C. 1773) to purchase, in
                    addition to other food purchases, locally produced foods
                    for school meal programs, to the maximum extent
                    practicable and appropriate;
                        ``(B) advise institutions participating in a program
                    described in subparagraph (A) of the policy described in
                    that subparagraph and post information concerning the
                    policy on the website maintained by the Secretary; and
                        ``(C) in accordance with requirements established by
                    the Secretary, provide startup grants to not more than
                    200 institutions to defray the initial costs of
                    equipment, materials, and storage facilities, and
                    similar costs, incurred in carrying out the policy
                    described in subparagraph (A).
                ``(2) Authorization of appropriations.--
                        ``(A) In general.--There is authorized to be
                    appropriated to carry out this subsection $400,000 for
                    each of fiscal years 2003 through 2007, to remain
                    available until expended.
                        ``(B) Limitation.--No amounts may be made available
                    to carry out this subsection unless specifically
                    provided by an appropriation Act.''.

    SEC. 4304. APPLICABILITY OF BUY-AMERICAN REQUIREMENT TO PUERTO RICO.

        Section 12(n) of the Richard B. Russell National School Lunch Act
    (42 U.S.C. 1760(n)) is amended by adding at the end the following:
                ``(4) Applicability to puerto rico.--Paragraph (2)(A) shall
            apply to a school food authority in the Commonwealth of Puerto
            Rico with respect to domestic commodities or products that are
            produced in the Commonwealth of Puerto Rico in sufficient
            quantities to meet the needs of meals provided under the school
            lunch program under this Act or the school breakfast program
            under section 4 of the Child Nutrition Act of 1966 (42 U.S.C.
            1773).''.

    [[Page 116 STAT. 332]]

    SEC. 4305. FRUIT AND VEGETABLE PILOT PROGRAM.

        (a) In General.--Section 18 of the Richard B. Russell National
    School Lunch Act (42 U.S.C. 1769) is amended by adding at the end the
    following:
        ``(g) Fruit and Vegetable Pilot Program.--
                ``(1) In general.--In the school year beginning July 2002,
            the Secretary shall carry out a pilot program to make available
            to students in 25 elementary or secondary schools in each of 4
            States, and in elementary or secondary schools on 1 Indian
            reservation, free fresh and dried fruits and fresh vegetables
            throughout the school day in 1 or more areas designated by the
            school.
                ``(2) Publicity.--A school that participates in the pilot
            program shall widely publicize within the school the
            availability of free fruits and vegetables under the pilot
            program.
                ``(3) Report.--Not <<NOTE: Deadline.>> later than May 1,
            2003, the Secretary, acting through the Administrator of the
            Economic Research Service, shall report to the Committee on
            Education and the Workforce of the House of Representatives and
            the Committee on Agriculture, Nutrition, and Forestry of the
            Senate on the results of the pilot program.
                ``(4) Funding.--The Secretary shall use not more than
            $6,000,000 of funds made available under section 32 of the Act
            of August 24, 1935 (7 U.S.C. 612c), to carry out this subsection
            (other than paragraph (3)).''.

        (b) Effective <<NOTE: 42 USC 1769 note.>> Date.--The amendment made
    by this section takes effect on the date of enactment of this Act.

    SEC. 4306. ELIGIBILITY FOR ASSISTANCE UNDER THE SPECIAL SUPPLEMENTAL
                NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN.

        (a) In General.--Section 17(d)(2)(B)(i) of the Child Nutrition Act
    of 1966 (42 U.S.C. 1786(d)(2)(B)(i)) is amended--
                (1) by striking ``basic allowance for housing'' and
            inserting the following: ``basic allowance--
                        ``(I) for housing'';
                (2) by striking ``and'' at the end and inserting ``or''; and
                (3) by adding at the end the following:
                        ``(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''.

        (b) Effective <<NOTE: 42 USC 1786 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

    SEC. 4307. WIC FARMERS' MARKET NUTRITION PROGRAM.

        (a) In General.--Section 17(m)(9) of the Child Nutrition Act of 1966
    (42 U.S.C. 1786(m)(9)) is amended--
                (1) by striking ``(9)(A) There'' and inserting the
            following:
                ``(9) Funding.--
                        ``(A) In general.--
                              ``(i) Authorization of appropriations.--
                          There''; and
                (2) in subparagraph (A), by adding at the end the following:
                              ``(ii) Mandatory funding.--
                          Not <<NOTE: Deadline.>> later than 30 days after
                          the date of enactment of the Food Stamp

    [[Page 116 STAT. 333]]

                          Reauthorization Act of 2002, of the funds of the
                          Commodity Credit Corporation, the Secretary shall
                          make available to carry out this subsection
                          $15,000,000, to remain available until
                          expended.''.

        (b) Effective <<NOTE: 42 USC 1786 note.>> Date.--The amendments made
    by this section take effect on the date of enactment of this Act.

                            Subtitle D--Miscellaneous

    SEC. 4401. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS.

        (a) Restoration of Benefits to Disabled Aliens.--Section
    402(a)(2)(F) of the Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(F)) is amended by
    striking ``(i) was'' and all that follows through ``(II) in the case''
    and inserting the following:
                              ``(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''.

        (b) Restoration of Benefits to All Qualified Alien Children.--
                (1) In general.--Section 402(a)(2)(J) of the Personal
            Responsibility and Work Opportunity Reconciliation Act of 1996
            (8 U.S.C. 1612(a)(2)(J)) is amended by striking ``who'' and all
            that follows through ``is under'' and inserting ``who is
            under''.
                (2) Conforming amendments.--
                        (A) Section 403(c)(2) of the Personal Responsibility
                    and Work Opportunity Reconciliation Act of 1996 (8
                    U.S.C. 1613(c)(2)) is amended by adding at the end the
                    following:
                        ``(L) Assistance or benefits provided to individuals
                    under the age of 18 under the Food Stamp Act of 1977 (7
                    U.S.C. 2011 et seq.).''.
                        (B) Section 421(d) of the Personal Responsibility
                    and Work Opportunity Reconciliation Act of 1996 (8
                    U.S.C. 1631(d)) is amended by adding at the end the
                    following:
                ``(3) This <<NOTE: Applicability.>> 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).''.
                        (C) Section 5(i)(2)(E) of the Food Stamp Act of 1977
                    (7 U.S.C. 2014(i)(2)(E)) is amended by inserting before
                    the period at the end the following: ``, or to any alien
                    who is under 18 years of age''.
                (3) Effective <<NOTE: 7 USC 2014 note.>> date.--The
            amendments made by this subsection take effect on October 1,
            2003.

        (c) Food Stamp Exception for Certain Qualified Aliens.--
                (1) In general.--Section 402(a)(2) of the Personal
            Responsibility and Work Opportunity Reconciliation Act of 1996
            (8 U.S.C. 1612(a)(2)) is amended by adding at the end the
            following:

    [[Page 116 STAT. 334]]

                        ``(L) Food stamp exception for certain qualified
                    aliens.--With respect to eligibility for benefits for
                    the specified Federal program described in paragraph
                    (3)(B), paragraph (1) shall not apply to any qualified
                    alien who has resided in the United States with a status
                    within the meaning of the term `qualified alien' for a
                    period of 5 years or more beginning on the date of the
                    alien's entry into the United States.''.
                (2) Effective <<NOTE: 8 USC 1612 note.>> date.--The
            amendment made by paragraph (1) takes effect on April 1, 2003.

    SEC. 4402. <<NOTE: 7 USC 3007.>> SENIORS FARMERS' MARKET NUTRITION
                PROGRAM.

        (a) Establishment.--The Secretary of Agriculture shall use
    $5,000,000 for fiscal year 2002, and $15,000,000 for each of fiscal
    years 2003 through 2007, of the funds available to the Commodity Credit
    Corporation to 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 resources in the form of fresh, nutritious,
            unprepared, locally grown fruits, vegetables, and herbs from
            farmers' markets, roadside stands, and community supported
            agriculture programs to low-income seniors;
                (2) to increase the domestic consumption of agricultural
            commodities by expanding or aiding 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 and
            additional farmers' markets, roadside stands, and community
            supported agriculture programs.

        (c) Regulations.--The Secretary may issue such regulations as the
    Secretary considers necessary to carry out the seniors farmers' market
    nutrition program.

    SEC. 4403. <<NOTE: 7 USC 3171 note.>>  NUTRITION INFORMATION AND
                AWARENESS PILOT PROGRAM.

        (a) Establishment.--The Secretary of Agriculture may establish, in
    not more than 5 States, for a period not to exceed 4 years for each
    participating State, a pilot program to increase the domestic
    consumption of fresh fruits and vegetables.
        (b) Purpose.--
                (1) In general.--Subject to paragraph (2), the purpose of
            the program shall be to provide funds to States solely for the
            purpose of assisting eligible public and private sector entities
            with cost-share assistance to carry out demonstration projects--
                        (A) to increase fruit and vegetable consumption; and
                        (B) to convey related health promotion messages.
                (2) Limitation.--Funds made available to a State under the
            program shall not be used to disparage any agricultural
            commodity.

        (c) Selection of States.--
                (1) In general.--In selecting States to participate in the
            program, the Secretary shall take into consideration, with
            respect to projects and activities proposed to be carried out
            under the program--
                        (A) experience in carrying out similar projects or
                    activities;

    [[Page 116 STAT. 335]]

                        (B) innovative approaches; and
                        (C) the ability of the State to promote and track
                    increases in levels of fruit and vegetable consumption.
                (2) Enhancement of existing state programs.--The Secretary
            may use the pilot program to enhance existing State programs
            that are consistent with the purpose of the pilot program
            specified in subsection (b).

        (d) Eligible Public and Private Sector Entities.--
                (1) In general.--A participating State shall establish
            eligibility criteria under which the State may select public and
            private sector entities to carry out demonstration projects
            under the program.
                (2) Limitation.--No funds made available to States under the
            program shall be provided by a State to any foreign for-profit
            corporation.

        (e) Federal Share.--The Federal share of the cost of any project or
    activity carried out using funds provided under this section shall be 50
    percent.
        (f) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $10,000,000 for each of fiscal
    years 2002 through 2007.

    SEC. 4404. <<NOTE: Congressional Hunger Fellows Act of 2002. 2 USC
                1161.>>  HUNGER FELLOWSHIP PROGRAM.

        (a) Short Title; Findings.--
                (1) Short title.--This section may be cited as the
            ``Congressional Hunger Fellows Act of 2002''.
                (2) Findings.--The Congress finds as follows:
                        (A) There is a critical need for compassionate
                    individuals who are committed to assisting people who
                    suffer from hunger as well as a need for such
                    individuals to initiate and administer solutions to the
                    hunger problem.
                        (B) Bill Emerson, the distinguished late
                    Representative from the 8th District of Missouri,
                    demonstrated his commitment to solving the problem of
                    hunger in a bipartisan manner, his commitment to public
                    service, and his great affection for the institution and
                    the ideals of the United States Congress.
                        (C) George T. (Mickey) Leland, the distinguished
                    late Representative from the 18th District of Texas,
                    demonstrated his compassion for those in need, his high
                    regard for public service, and his lively exercise of
                    political talents.
                        (D) The special concern that Mr. Emerson and Mr.
                    Leland demonstrated during their lives for the hungry
                    and poor was an inspiration for others to work toward
                    the goals of equality and justice for all.
                        (E) These two outstanding leaders maintained a
                    special bond of friendship regardless of political
                    affiliation and worked together to encourage future
                    leaders to recognize and provide service to others, and
                    therefore it is especially appropriate to honor the
                    memory of Mr. Emerson and Mr. Leland by creating a
                    fellowship program to develop and train the future
                    leaders of the United States to pursue careers in
                    humanitarian service.

        (b) Establishment.--There is established as an independent entity of
    the legislative branch of the United States Government the Congressional
    Hunger Fellows Program (hereinafter in this section referred to as the
    ``Program'').

    [[Page 116 STAT. 336]]

        (c) Board of Trustees.--
                (1) In general.--The Program shall be subject to the
            supervision and direction of a Board of Trustees.
                (2) Members of the board of trustees.--
                        (A) Appointment.--The Board shall be composed of 6
                    voting members appointed under clause (i) and one
                    nonvoting ex officio member designated in clause (ii) as
                    follows:
                              (i) Voting members.--(I) The Speaker of the
                          House of Representatives shall appoint two
                          members.
                              (II) The minority leader of the House of
                          Representatives shall appoint one member.
                              (III) The majority leader of the Senate shall
                          appoint two members.
                              (IV) The minority leader of the Senate shall
                          appoint one member.
                              (ii) Nonvoting member.--The Executive Director
                          of the program shall serve as a nonvoting ex
                          officio member of the Board.
                        (B) Terms.--Members of the Board shall serve a term
                    of 4 years.
                        (C) Vacancy.--
                              (i) Authority of board.--A vacancy in the
                          membership of the Board does not affect the power
                          of the remaining members to carry out this
                          section.
                              (ii) Appointment of successors.--A vacancy in
                          the membership of the Board shall be filled in the
                          same manner in which the original appointment was
                          made.
                              (iii) Incomplete term.--If a member of the
                          Board does not serve the full term applicable to
                          the member, the individual appointed to fill the
                          resulting vacancy shall be appointed for the
                          remainder of the term of the predecessor of the
                          individual.
                        (D) Chairperson.--As the first order of business of
                    the first meeting of the Board, the members shall elect
                    a Chairperson.
                        (E) Compensation.--
                              (i) In general.--Subject to clause (ii),
                          members of the Board may not receive compensation
                          for service on the Board.
                              (ii) Travel.--Members of the Board may be
                          reimbursed for travel, subsistence, and other
                          necessary expenses incurred in carrying out the
                          duties of the program.
                (3) Duties.--
                        (A) Bylaws.--
                              (i) Establishment.--The Board shall establish
                          such bylaws and other regulations as may be
                          appropriate to enable the Board to carry out this
                          section, including the duties described in this
                          paragraph.
                              (ii) Contents.--Such bylaws and other
                          regulations shall include provisions--
                                        (I) for appropriate fiscal control,
                                    funds accountability, and operating
                                    principles;
                                        (II) to prevent any conflict of
                                    interest, or the appearance of any
                                    conflict of interest, in the procurement
                                    and employment actions taken by the

    [[Page 116 STAT. 337]]

                                    Board or by any officer or employee of
                                    the Board and in the selection and
                                    placement of individuals in the
                                    fellowships developed under the program;
                                        (III) for the resolution of a tie
                                    vote of the members of the Board; and
                                        (IV) for authorization of travel for
                                    members of the Board.
                              (iii) Transmittal to congress.--Not later than
                          90 days after the date of the first meeting of the
                          Board, the Chairperson of the Board shall transmit
                          to the appropriate congressional committees a copy
                          of such bylaws.
                        (B) Budget.--For each fiscal year the program is in
                    operation, the Board shall determine a budget for the
                    program for that fiscal year. All spending by the
                    program shall be pursuant to such budget unless a change
                    is approved by the Board.
                        (C) Process for selection and placement of
                    fellows.--The Board shall review and approve the process
                    established by the Executive Director for the selection
                    and placement of individuals in the fellowships
                    developed under the program.
                        (D) Allocation of funds to fellowships.--The Board
                    of Trustees shall determine the priority of the programs
                    to be carried out under this section and the amount of
                    funds to be allocated for the Emerson and Leland
                    fellowships.

        (d) Purposes; Authority of Program.--
                (1) Purposes.--The purposes of the program are--
                        (A) to encourage future leaders of the United States
                    to pursue careers in humanitarian service, to recognize
                    the needs of people who are hungry and poor, and to
                    provide assistance and compassion for those in need;
                        (B) to increase awareness of the importance of
                    public service; and
                        (C) to provide training and development
                    opportunities for such leaders through placement in
                    programs operated by appropriate organizations or
                    entities.
                (2) Authority.--The program is authorized to develop such
            fellowships to carry out the purposes of this section, including
            the fellowships described in paragraph (3).
                (3) Fellowships.--
                        (A) In general.--The program shall establish and
                    carry out the Bill Emerson Hunger Fellowship and the
                    Mickey Leland Hunger Fellowship.
                        (B) Curriculum.--
                              (i) In general.--The fellowships established
                          under subparagraph (A) shall provide experience
                          and training to develop the skills and
                          understanding necessary to improve the
                          humanitarian conditions and the lives of
                          individuals who suffer from hunger, including--
                                        (I) training in direct service to
                                    the hungry in conjunction with
                                    community-based organizations through a
                                    program of field placement; and
                                        (II) experience in policy
                                    development through placement in a
                                    governmental entity or nonprofit
                                    organization.

    [[Page 116 STAT. 338]]

                              (ii) Focus of bill emerson hunger
                          fellowship.--The Bill Emerson Hunger Fellowship
                          shall address hunger and other humanitarian needs
                          in the United States.
                              (iii) Focus of mickey leland hunger
                          fellowship.--The Mickey Leland Hunger Fellowship
                          shall address international hunger and other
                          humanitarian needs.
                              (iv) Workplan.--To carry out clause (i) and to
                          assist in the evaluation of the fellowships under
                          paragraph (4), the program shall, for each fellow,
                          approve a work plan that identifies the target
                          objectives for the fellow in the fellowship,
                          including specific duties and responsibilities
                          related to those objectives.
                        (C) Period of fellowship.--
                              (i) Emerson fellow.--A Bill Emerson Hunger
                          Fellowship awarded under this paragraph shall be
                          for no more than 1 year.
                              (ii) Leland fellow.--A Mickey Leland Hunger
                          Fellowship awarded under this paragraph shall be
                          for no more than 2 years. Not less than 1 year of
                          the fellowship shall be dedicated to fulfilling
                          the requirement of subparagraph (B)(i)(I).
                        (D) Selection of fellows.--
                              (i) In general.--A fellowship shall be awarded
                          pursuant to a nationwide competition established
                          by the program.
                              (ii) Qualification.--A successful applicant
                          shall be an individual who has demonstrated--
                                        (I) an intent to pursue a career in
                                    humanitarian service and outstanding
                                    potential for such a career;
                                        (II) leadership potential or actual
                                    leadership experience;
                                        (III) diverse life experience;
                                        (IV) proficient writing and speaking
                                    skills;
                                        (V) an ability to live in poor or
                                    diverse communities; and
                                        (VI) such other attributes as
                                    determined to be appropriate by the
                                    Board.
                              (iii) Amount of award.--
                                        (I) In general.--Each individual
                                    awarded a fellowship under this
                                    paragraph shall receive a living
                                    allowance and, subject to subclause
                                    (II), an end-of-service award as
                                    determined by the program.
                                        (II) Requirement for successful
                                    completion of fellowship.--Each
                                    individual awarded a fellowship under
                                    this paragraph shall be entitled to
                                    receive an end-of-service award at an
                                    appropriate rate for each month of
                                    satisfactory service as determined by
                                    the Executive Director.
                              (iv) Recognition of fellowship award.--
                                        (I) Emerson fellow.--An individual
                                    awarded a fellowship from the Bill
                                    Emerson Hunger Fellowship shall be known
                                    as an ``Emerson Fellow''.

    [[Page 116 STAT. 339]]

                                        (II) Leland fellow.--An individual
                                    awarded a fellowship from the Mickey
                                    Leland Hunger Fellowship shall be known
                                    as a ``Leland Fellow''.
                (4) Evaluation.--The program shall conduct periodic
            evaluations of the Bill Emerson and Mickey Leland Hunger
            Fellowships. Such evaluations shall include the following:
                        (A) An assessment of the successful completion of
                    the work plan of the fellow.
                        (B) An assessment of the impact of the fellowship on
                    the fellows.
                        (C) An assessment of the accomplishment of the
                    purposes of the program.
                        (D) An assessment of the impact of the fellow on the
                    community.

        (e) Trust Fund.--
                (1) Establishment.--There is established the Congressional
            Hunger Fellows Trust Fund (hereinafter in this section referred
            to as the ``Fund'') in the Treasury of the United States,
            consisting of amounts appropriated to the Fund under subsection
            (i), amounts credited to it under paragraph (3), and amounts
            received under subsection (g)(3)(A).
                (2) Investment of funds.--The Secretary of the Treasury
            shall invest the full amount of the Fund. Each investment shall
            be made in an interest bearing obligation of the United States
            or an obligation guaranteed as to principal and interest by the
            United States that, as determined by the Secretary in
            consultation with the Board, has a maturity suitable for the
            Fund.
                (3) Return on investment.--Except as provided in subsection
            (f)(2), the Secretary of the Treasury shall credit to the Fund
            the interest on, and the proceeds from the sale or redemption
            of, obligations held in the Fund.

        (f) Expenditures; Audits.--
                (1) In general.--The Secretary of the Treasury shall
            transfer to the program from the amounts described in subsection
            (e)(3) and subsection (g)(3)(A) such sums as the Board
            determines are necessary to enable the program to carry out the
            provisions of this section.
                (2) Limitation.--The Secretary may not transfer to the
            program the amounts appropriated to the Fund under subsection
            (i).
                (3) Use of funds.--Funds transferred to the program under
            paragraph (1) shall be used for the following purposes:
                        (A) Stipends for fellows.--To provide for a living
                    allowance for the fellows.
                        (B) Travel of fellows.--To defray the costs of
                    transportation of the fellows to the fellowship
                    placement sites.
                        (C) Insurance.--To defray the costs of appropriate
                    insurance of the fellows, the program, and the Board.
                        (D) Training of fellows.--To defray the costs of
                    preservice and midservice education and training of
                    fellows.
                        (E) Support staff.--Staff described in subsection
                    (g).
                        (F) Awards.--End-of-service awards under subsection
                    (d)(3)(D)(iii)(II).

    [[Page 116 STAT. 340]]

                        (G) Additional approved uses.--For such other
                    purposes that the Board determines appropriate to carry
                    out the program.
                (4) Audit by gao.--
                        (A) In general.--The Comptroller General of the
                    United States shall conduct an annual audit of the
                    accounts of the program.
                        (B) Books.--The program shall make available to the
                    Comptroller General all books, accounts, financial
                    records (including records of salaries of the Executive
                    Director and other personnel), reports, files, and all
                    other papers, things, or property belonging to or in use
                    by the program and necessary to facilitate such audit.
                        (C) Report to congress.--The Comptroller General
                    shall submit a copy of the results of each such audit to
                    the appropriate congressional committees.

        (g) Staff; Powers of Program.--
                (1) Executive director.--
                        (A) In general.--The Board shall appoint an
                    Executive Director of the program who shall administer
                    the program. The Executive Director shall carry out such
                    other functions consistent with the provisions of this
                    section as the Board shall prescribe.
                        (B) Restriction.--The Executive Director may not
                    serve as Chairperson of the Board.
                        (C) Compensation.--The Executive Director shall be
                    paid at a rate not to exceed the rate of basic pay
                    payable for level V of the Executive Schedule under
                    section 5316 of title 5, United States Code.
                (2) Staff.--
                        (A) In general.--With the approval of a majority of
                    the Board, the Executive Director may appoint and fix
                    the pay of additional personnel as the Executive
                    Director considers necessary and appropriate to carry
                    out the functions of the provisions of this section.
                        (B) Compensation.--An individual appointed under
                    subparagraph (A) shall be paid at a rate not to exceed
                    the rate of basic pay payable for level GS-15 of the
                    General Schedule.
                (3) Powers.--In order to carry out the provisions of this
            section, the program may perform the following functions:
                        (A) Gifts.--The program may solicit, accept, use,
                    and dispose of gifts, bequests, or devises of services
                    or property, both real and personal, for the purpose of
                    aiding or facilitating the work of the program. Gifts,
                    bequests, or devises of money and proceeds from sales of
                    other property received as gifts, bequests, or devises
                    shall be deposited in the Fund and shall be available
                    for disbursement upon order of the Board.
                        (B) Experts and consultants.--The program may
                    procure temporary and intermittent services under
                    section 3109 of title 5, United States Code, but at
                    rates for individuals not to exceed the daily equivalent
                    of the maximum annual rate of basic pay payable for GS-
                    15 of the General Schedule.
                        (C) Contract authority.--The program may contract,
                    with the approval of a majority of the members of the

    [[Page 116 STAT. 341]]

                    Board, with and compensate Government and private
                    agencies or persons without regard to section 3709 of
                    the Revised Statutes (41 U.S.C. 5).
                        (D) Other necessary expenditures.--The program shall
                    make such other expenditures which the program considers
                    necessary to carry out the provisions of this section,
                    but excluding project development.

        (h) Report.--Not <<NOTE: Deadline.>> later than December 31 of each
    year, the Board shall submit to the appropriate congressional committees
    a report on the activities of the program carried out during the
    previous fiscal year, and shall include the following:
                (1) An analysis of the evaluations conducted under
            subsection (d)(4) (relating to evaluations of the Emerson and
            Leland fellowships and accomplishment of the program purposes)
            during that fiscal year.
                (2) A statement of the total amount of funds attributable to
            gifts received by the program in that fiscal year (as authorized
            under subsection (g)(3)(A)), and the total amount of such funds
            that were expended to carry out the program that fiscal year.

        (i) Authorization of Appropriations.--There are authorized to be
    appropriated $18,000,000 to carry out the provisions of this section.
        (j) Definition.--In this section, the term ``appropriate
    congressional committees'' means--
                (1) the Committee on Agriculture and the Committee on
            International Relations of the House of Representatives; and
                (2) the Committee on Agriculture, Nutrition, and Forestry
            and the Committee on Foreign Relations of the Senate.

    SEC. 4405. <<NOTE: 2 USC 1161 note.>>  GENERAL EFFECTIVE DATE.

        Except as otherwise provided in this title, the amendments made by
    this title take effect on October 1, 2002.

                                 TITLE V--CREDIT

                        Subtitle A--Farm Ownership Loans

    SEC. 5001. DIRECT LOANS.

        Section 302(b)(1) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1922(b)(1)) is amended by striking ``operated'' and inserting
    ``participated in the business operations of''.

    SEC. 5002. FINANCING OF BRIDGE LOANS.

        Section 303(a)(1) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1923(a)(1)) is amended--
                (1) in subparagraph (C), by striking ``or'' at the end;
                (2) in subparagraph (D), by striking the period at the end
            and inserting ``; or''; and
                (3) by adding at the end the following:
                        ``(E) refinancing a temporary bridge loan made by a
                    commercial or cooperative lender to a 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 farmer or
                          rancher for acquisition of the land; and

    [[Page 116 STAT. 342]]

                              ``(ii) funds for direct farm ownership loans
                          under section 346(b) were not available at the
                          time at which the application was approved.''.

    SEC. 5003. AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS ON TRIBAL
                LANDS.

        Section 309(h) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1929(h)) is amended--
                (1) in paragraph (4), by striking ``paragraphs (5) and (6)''
            and inserting ``paragraphs (5), (6), and (7)''; and
                (2) by adding at the end the following:
                ``(7) Amount of guarantee of loans for farm operations on
            tribal lands.--In the case of an operating loan made to a farmer
            or rancher whose farm or ranch land is subject to the
            jurisdiction of an Indian tribe and whose loan is secured by 1
            or more security instruments that are subject to the
            jurisdiction of an Indian tribe, the Secretary shall guarantee
            95 percent of the loan.''.

    SEC. 5004. GUARANTEE OF LOANS MADE UNDER STATE BEGINNING FARMER OR
                RANCHER PROGRAMS.

        Section 309 of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1929) is amended by adding at the end the following:
        ``(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.''.

    SEC. 5005. DOWN PAYMENT LOAN PROGRAM.

        Section 310E of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1935) is amended--
                (1) in subsection (b)--
                        (A) in paragraph (1), by striking ``30 percent'' and
                    inserting ``40 percent''; and
                        (B) in paragraph (3), by striking ``10 years'' and
                    inserting ``15 years''; and
                (2) in subsection (c)(3)(B), by striking ``10-year'' and
            inserting ``15-year''.

    SEC. 5006. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

        Subtitle A of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1922 et seq.) is amended by adding at the end the following:

    ``SEC. 310F. <<NOTE: 7 USC 1936.>>  BEGINNING FARMER AND RANCHER
                CONTRACT LAND SALES PROGRAM.

        ``(a) In General.--If the Secretary makes a determination that the
    risk is comparable under subsection (b), the Secretary shall carry out a
    pilot program in not fewer than 5 States, as determined by the
    Secretary, to guarantee up to 5 loans per State in each of fiscal years
    2003 through 2007 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

    [[Page 116 STAT. 343]]

    criteria and a commercial lending institution agrees to serve as escrow
    agent.
        ``(b) Date of <<NOTE: Deadline.>> Commencement of Program.--Not
    later than October 1, 2002, the Secretary shall make a determination on
    whether guarantees of contract land sales present a risk that is
    comparable with the risk presented in the case of guarantees to
    commercial lenders.''.

                           Subtitle B--Operating Loans

    SEC. 5101. DIRECT LOANS.

        Section 311(c) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1941(c)) is amended--
                (1) in paragraph (1)--
                        (A) in the matter that precedes subparagraph (A), by
                    striking ``paragraph (3)'' and inserting ``paragraphs
                    (3) and (4)''; and
                        (B) in subparagraph (A), by striking ``who has not''
                    and all that follows through ``5 years''; and
                (2) by adding at the end the following:
                ``(4) Waivers.--
                        ``(A) Farm and ranch operations on tribal lands.--
                    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 whose farm or ranch land is
                    subject to the jurisdiction of an Indian tribe and whose
                    loan is secured by 1 or more security instruments that
                    are subject to the jurisdiction of an Indian tribe 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) or (3) 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)).''.

    SEC. 5102. <<NOTE: 7 USC 1949 note.>>  SUSPENSION OF LIMITATION ON
                PERIOD FOR WHICH BORROWERS ARE ELIGIBLE FOR GUARANTEED
                ASSISTANCE.

        During the period <<NOTE: Effective date. Termination
    date.>> beginning January 1, 2002, and ending December 31, 2006, section
    319(b) of the Consolidated Farm and Rural Development Act (7 U.S.C.
    1949(b)) shall have no force or effect.

    [[Page 116 STAT. 344]]

                           Subtitle C--Emergency Loans

    SEC. 5201. EMERGENCY LOANS IN RESPONSE TO AN EMERGENCY RESULTING FROM
                QUARANTINES.

        (a) Loan Authority.--Section 321(a) of the Consolidated Farm and
    Rural Development Act (7 U.S.C. 1961(a)) is amended--
                (1) in each of the 1st and 3rd sentences, by striking ``a
            natural disaster in the United States or by'' and inserting ``a
            quarantine imposed by the Secretary under the Plant Protection
            Act or the animal quarantine laws (as defined in section 2509 of
            the Food, Agriculture, Conservation, and Trade Act of 1990), a
            natural disaster in the United States, or''; and
                (2) in the 4th sentence--
                        (A) by striking ``a natural disaster'' and inserting
                    ``such a quarantine or natural disaster''; and
                        (B) by striking ``by such natural disaster'' and
                    inserting ``by such quarantine or natural disaster''.

        (b) Conforming Amendment.--Section 323 of such Act (7 U.S.C. 1963)
    is amended by inserting ``quarantine,'' before ``natural disaster''.

                      Subtitle D--Administrative Provisions

    SEC. 5301. <<NOTE: 7 USC 1922 note.>>  EVALUATIONS OF DIRECT AND
                GUARANTEED LOAN PROGRAMS.

        (a) Studies.--The Secretary of Agriculture shall conduct 2 studies
    of the direct and guaranteed loan progams under sections 302 and 311 of
    the Consolidated Farm and Rural Development Act, each of which shall
    include an examination of the number, average principal amount, and
    delinquency and default rates of loans provided or guaranteed during the
    period covered by the study.
        (b) Periods Covered.--
                (1) First study.--One study under subsection (a) shall cover
            the 1-year period that begins 1 year after the date of the
            enactment of this section.
                (2) Second study.--One study under subsection (a) shall
            cover the 1-year period that begins 3 years after such date of
            enactment.

        (c) Reports to the Congress.--At the end of the period covered by
    each study under this section, the Secretary of Agriculture shall submit
    to the Congress a report that contains an evaluation of the results of
    the study, including an analysis of the effectiveness of loan programs
    referred to in subsection (a) in meeting the credit needs of
    agricultural producers in an efficient and fiscally responsible manner.

    SEC. 5302. ELIGIBILITY OF TRUSTS AND LIMITED LIABILITY COMPANIES FOR
                FARM OWNERSHIP LOANS, FARM OPERATING LOANS, AND EMERGENCY
                LOANS.

        (a) In General.--Sections 302(a), 311(a), and 321(a) of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a), 1941(a),
    and 1961(a)) are each amended by striking ``and joint operations'' each
    place it appears and inserting ``joint operations, trusts, and limited
    liability companies''.

    [[Page 116 STAT. 345]]

        (b) Conforming Amendment.--Section 321(a) of the Consolidated Farm
    and Rural Development Act (7 U.S.C. 1961(a)) is amended by striking ``or
    joint operations'' each place it appears and inserting ``joint
    operations, trusts, or limited liability companies''.

    SEC. 5303. DEBT SETTLEMENT.

        Section 331(b)(4) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1981(b)(4)) is amended--
                (1) by striking ``The Secretary may release'' and inserting
            ``After consultation with a local or area county committee, the
            Secretary may release''; and
                (2) by striking ``carried out--'' and all that follows
            through ``(B) after'' and inserting ``carried out after''.

    SEC. 5304. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS; PRIVATE
                COLLECTION AGENCIES.

        (a) In General.--Section 331 of the Consolidated Farm and Rural
    Development Act (7 U.S.C. 1981) is amended by striking subsections (d)
    and (e).
        (b) Application.--The <<NOTE: 7 USC 1981 note.>> amendment made by
    subsection (a) shall not apply to a contract entered into before the
    effective date of this Act.

    SEC. 5305. INTEREST RATE OPTIONS FOR LOANS IN SERVICING.

        Section 331B of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1981b) is amended--
                (1) by striking ``lower of (1) the'' and inserting the
            following: ``lowest of--
                ``(1) the''; and
                (2) by striking ``original loan or (2) the'' and inserting
            the following: ``original loan;
                ``(2) 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
                ``(3) the''.

    SEC. 5306. ELIMINATION OF REQUIREMENT THAT SECRETARY REQUIRE COUNTY
                COMMITTEES TO CERTIFY IN WRITING THAT CERTAIN LOAN REVIEWS
                HAVE BEEN CONDUCTED.

        Section 333(2) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1983(2)) is amended to read as follows:
                ``(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;''.

    SEC. 5307. SIMPLIFIED LOAN GUARANTEE APPLICATION AVAILABLE FOR LOANS OF
                GREATER AMOUNTS.

        Section 333A(g)(1) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1983a(g)(1)) is amended by striking ``$50,000'' and
    inserting ``$125,000''.

    SEC. 5308. INVENTORY PROPERTY.

        Section 335(c) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1985(c)) is amended--

    [[Page 116 STAT. 346]]

                (1) in paragraph (1)--
                        (A) in subparagraph (B)--
                              (i) in clause (i), by striking ``75 days'' and
                          inserting ``135 days''; and
                              (ii) by adding at the end the following:
                              ``(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.''; and
                        (B) in subparagraph (C)--
                              (i) by striking ``75 days'' and inserting
                          ``135 days''; and
                              (ii) by striking ``75-day period'' and
                          inserting ``135-day period''; and
                (2) by striking paragraph (2) and inserting the following:
                ``(2) Previous <<NOTE: Deadline.>> 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).''.

    SEC. 5309. ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED CERTIFIED
                LENDERS PROGRAMS.

        Section 339 of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1989) is amended by adding at the end the following:
        ``(e) Administration of Certified Lenders and Preferred Certified
    Lenders Programs.--The Secretary may administer the loan guarantee
    programs under subsections (c) and (d) through central offices
    established in States or in multi-State areas.''.

    SEC. 5310. DEFINITIONS.

        (a) Qualified Beginning Farmer or Rancher.--Section 343(a)(11)(F) of
    the Consolidated Farm and Rural Development Act (7 U.S.C.
    1991(a)(11)(F)) is amended by striking ``25 percent'' and inserting ``30
    percent''.
        (b) Debt Forgiveness.--Section 343(a)(12)(B) of the Consolidated
    Farm and Rural Development Act (7 U.S.C. 1991(a)(12)(B)) is amended to
    read as follows:
                        ``(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. 5311. LOAN AUTHORIZATION LEVELS.

        Section 346(b)(1) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1994(b)(1)) is amended to read as follows:
                ``(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
            $3,796,000,000 for each of fiscal years 2003 through 2007, of
            which, for each fiscal year--
                        ``(A) $770,000,000 shall be for direct loans, of
                    which--

    [[Page 116 STAT. 347]]

                              ``(i) $205,000,000 shall be for farm ownership
                          loans under subtitle A; and
                              ``(ii) $565,000,000 shall be for operating
                          loans under subtitle B; and
                        ``(B) $3,026,000,000 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) $2,026,000,000 shall be for guarantees
                          of operating loans under subtitle B.''.

    SEC. 5312. RESERVATION OF FUNDS FOR DIRECT OPERATING LOANS FOR BEGINNING
                FARMERS AND RANCHERS.

        Section 346(b)(2)(A)(ii)(III) of the Consolidated Farm and Rural
    Development Act (7 U.S.C. 1994(b)(2)(A)(ii)(III)) is amended by striking
    ``2000 through 2002'' and inserting ``2003 through 2007''.

    SEC. 5313. INTEREST RATE REDUCTION PROGRAM.

        Section 351 of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1999) is amended--
                (1) in subsection (a)--
                        (A) by striking ``Program.--'' and all that follows
                    through ``The Secretary'' and inserting ``Program.--The
                    Secretary''; and
                        (B) by striking paragraph (2); and
                (2) in subsection (e), by striking paragraph (2) and
            inserting the following:
                ``(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 15 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 March 1 of the fiscal year.''.

    SEC. 5314. REAMORTIZATION OF RECAPTURE PAYMENTS.

        Section 353(e)(7) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 2001(e)(7)) is amended by adding at the end the following:
                        ``(D) Reamortization.--
                              ``(i) In general.--The Secretary may modify
                          the amortization of a recapture payment referred
                          to in subparagraph (A) of this paragraph on which
                          a payment has become delinquent by using loan
                          service tools under section 343(b)(3) if--
                                        ``(I) the default is due to
                                    circumstances beyond the control of the
                                    borrower; and
                                        ``(II) the borrower acted in good
                                    faith (as determined by the Secretary)
                                    in attempting to repay the recapture
                                    amount.
                              ``(ii) Limitations.--

    [[Page 116 STAT. 348]]

                                        ``(I) Term of reamortization.--The
                                    term of a reamortization under this
                                    subparagraph may not exceed 25 years
                                    from the date of the original
                                    amortization agreement.
                                        ``(II) No reduction or principal or
                                    unpaid interest due.--A reamortization
                                    of a recapture payment under this
                                    subparagraph may not provide for
                                    reducing the outstanding principal or
                                    unpaid interest due on the recapture
                                    payment.

    SEC. 5315. ALLOCATION OF CERTAIN FUNDS FOR SOCIALLY DISADVANTAGED
                FARMERS AND RANCHERS.

        The last sentence of section 355(c)(2) of the Consolidated Farm and
    Rural Development Act (7 U.S.C. 2003(c)(2)) is amended to read as
    follows: ``Any funds reserved and allocated under this paragraph but not
    used within a State shall, to the extent necessary to satisfy pending
    applications under this title, be available for use by socially
    disadvantaged farmers and ranchers in other States, as determined by the
    Secretary, and any remaining funds shall be reallocated within the
    State.''.

    SEC. 5316. WAIVER OF BORROWER TRAINING CERTIFICATION REQUIREMENT.

        Section 359 of the Consolidated Farm and Rural Development Act (7
    U.S.C. 2006a) is amended by striking subsection (f) and inserting the
    following:
        ``(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.''.

    SEC. 5317. TIMING OF LOAN ASSESSMENTS.

        Section 360(a) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 2006b(a)) is amended by striking ``After an applicant is
    determined eligible for assistance under this title by the appropriate
    county committee established pursuant to section 332, the'' and
    inserting ``The''.

    SEC. 5318. ANNUAL REVIEW OF BORROWERS.

        Section 360(d)(1) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 2006b(d)(1)) is amended by striking ``biannual'' and inserting
    ``annual''.

    SEC. 5319. LOAN ELIGIBILITY FOR BORROWERS WITH PRIOR DEBT FORGIVENESS.

        Section 373(b)(2)(A) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 2008h(b)(2)(A)) is amended--
                (1) in clause (i), by striking ``or'';
                (2) in clause (ii), by striking the period and inserting ``;
            or''; and
                (3) by adding at the end the following:
                              ``(iii) received debt forgiveness on not more
                          than 1 occasion resulting directly and primarily
                          from a

    [[Page 116 STAT. 349]]

                          major disaster or emergency designated by the
                          President on or after April 4, 1996, under the
                          Robert T. Stafford Disaster Relief and Emergency
                          Assistance Act (42 U.S.C. 5121 et seq.).''.

    SEC. 5320. MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, COUNTY,
                OR AREA COMMITTEES.

        Subtitle D of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1981-2008j) is amended by adding at the end the following:

    ``SEC. 376. <<NOTE: 7 USC 2008k.>>  MAKING AND SERVICING OF LOANS BY
                PERSONNEL OF STATE, COUNTY, OR AREA COMMITTEES.

        ``The Secretary shall use personnel 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)) to make and service loans
    under this title to the extent the personnel have been trained to do
    so.''.

    SEC. 5321. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA COMMITTEE
                FOR LOANS AND LOAN GUARANTEES.

        Subtitle D of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1981-2008j) is further amended by adding at the end the
    following:

    ``SEC. 377. <<NOTE: 7 USC 2008l.>> ELIGIBILITY OF EMPLOYEES OF STATE,
                COUNTY, OR AREA COMMITTEE FOR LOANS AND LOAN GUARANTEES.

        ``(a) In General.--The Secretary shall not prohibit an employee 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 the Department of Agriculture from obtaining a loan or
    loan guarantee under subtitle A, B or C of this title.
        ``(b) Approvals.--
                ``(1) County or area office.--In the case of a loan
            application from an employee in a county or area office, the
            Farm Service Agency State office shall be responsible for
            reviewing and approving the application.
                ``(2) State office.--In the case of a loan application from
            an employee of a State office, the Farm Service Agency national
            office shall be responsible for reviewing and approving the
            application.''.

                             Subtitle E--Farm Credit

    SEC. 5401. REPEAL OF BURDENSOME APPROVAL REQUIREMENTS.

        (a) Banks for Cooperatives.--Section 3.1(11)(B) of the Farm Credit
    Act of 1971 (12 U.S.C. 2122(11)(B)) is amended--
                (1) by striking clause (iii); and
                (2) by redesignating clause (iv) as clause (iii).

        (b) Other System Banks; Associations.--Section 4.18A of the Farm
    Credit Act of 1971 (12 U.S.C. 2206a) is amended--
                (1) in subsection (a)(1), by striking ``3.1(11)(B)(iv)'' and
            inserting ``3.1(11)(B)(iii)''; and
                (2) by striking subsection (c).

    [[Page 116 STAT. 350]]

    SEC. 5402. BANKS FOR COOPERATIVES.

        Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 2128(b)) is
    amended--
                (1) in paragraphs (1) and (2)(A)(i), by striking ``farm
            supplies'' each place it appears and inserting ``agricultural
            supplies''; and
                (2) by adding at the end the following:
                ``(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. 5403. INSURANCE CORPORATION PREMIUMS.

        (a) Reduction in Premiums for GSE-Guaranteed Loans.--
                (1) In general.--Section 5.55 of the Farm Credit Act of 1971
            (12 U.S.C. 2277a-4) is amended--
                        (A) in subsection (a)--
                              (i) in paragraph (1)--
                                        (I) in subparagraph (A), by striking
                                    ``government-guaranteed loans provided
                                    for in subparagraph (C)'' and inserting
                                    ``loans provided for in subparagraphs
                                    (C) and (D)'';
                                        (II) in subparagraph (B), by
                                    striking ``and'' at the end;
                                        (III) in subparagraph (C), by
                                    striking the period at the end and
                                    inserting ``; and''; and
                                        (IV) by adding at the end the
                                    following:
                        ``(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.''; and
                              (ii) by adding at the end the following:
                ``(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
            Mortgage Corporation, the Federal Home Loan Bank System, and the
            Federal Agricultural Mortgage Corporation, but not including any
            other institution of the Farm Credit System.''; and
                        (B) in subsection (e)(4)(B), by striking
                    ``government-guaranteed loans described in subsection
                    (a)(1)(C)'' and inserting ``loans described in
                    subparagraph (C) or (D) of subsection (a)(1)''.
                (2) Conforming amendments.--
                        (A) Section 1.12(b) of the Farm Credit Act of 1971
                    (12 U.S.C. 2020(b)) is amended--

    [[Page 116 STAT. 351]]

                              (i) in paragraph (1), by inserting ``and
                          Government Sponsored Enterprise-guaranteed loans
                          (as defined in section 5.55(a)(4)) provided for in
                          paragraph (4)'' after ``government-guaranteed
                          loans (as defined in section 5.55(a)(3)) provided
                          for in paragraph (3)'';
                              (ii) in paragraph (2), by striking ``and'' at
                          the end;
                              (iii) in paragraph (3), by striking the period
                          at the end and inserting ``; and''; and
                              (iv) by adding at the end the following:
                ``(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
            a 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).''.
                        (B) Section 5.56(a) of the Farm Credit Act of 1971
                    (12 U.S.C. 2277a-5(a)) is amended--
                              (i) in paragraph (1), by inserting ``and
                          Government Sponsored Enterprise-guaranteed loans
                          (as defined in section 5.55(a)(4))'' after
                          ``government-guaranteed loans'';
                              (ii) by redesignating paragraphs (4) and (5)
                          as paragraphs (5) and (6), respectively; and
                              (iii) by inserting after paragraph (3) the
                          following:
                ``(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;''.

        (b) Applicability.--The <<NOTE: 12 USC 2020 note.>> amendments made
    by this section shall apply with respect to determinations of premiums
    for calendar year 2002 and for any succeeding calendar year, and to
    certified statements with respect to such premiums.

                         Subtitle F--General Provisions

    SEC. 5501. TECHNICAL AMENDMENTS.

        (a) Section 321(a) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1961(a)) is amended by striking ``Disaster Relief and
    Emergency Assistance Act'' each place it appears and inserting ``Robert
    T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121
    et seq.)''.
        (b) Section 336(b) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1986(b)) is amended in the second sentence by striking
    ``provided for in section 332 of this title''.
        (c) Section 359(c)(1) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 2006a(c)(1)) is amended by striking ``established pursuant
    to section 332,''.

    [[Page 116 STAT. 352]]

                           TITLE VI--RURAL DEVELOPMENT

             Subtitle A--Consolidated Farm and Rural Development Act

    SEC. 6001. ELIGIBILITY OF RURAL EMPOWERMENT ZONES AND RURAL ENTERPRISE
                COMMUNITIES FOR DIRECT AND GUARANTEED LOANS FOR ESSENTIAL
                COMMUNITY FACILITIES.

        Section 306(a)(1) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1926(a)(1)) is amended by inserting after the first sentence
    the following: ``The Secretary may also make or insure loans to
    communities that have been designated as rural empowerment zones or
    rural enterprise communities pursuant to part I of subchapter U of
    chapter 1 of the Internal Revenue Code of 1986, or as rural enterprise
    communities pursuant to section 766 of the Agriculture, Rural
    Development, Food and Drug Administration, and Related Agencies
    Appropriations Act, 1999 (Public Law 105-277; 112 Stat. 2681, 2681-37),
    to provide for the installation or improvement of essential community
    facilities including necessary related equipment, and to furnish
    financial assistance or other aid in planning projects for such
    purposes.''.

    SEC. 6002. WATER OR WASTE DISPOSAL GRANTS.

        Section 306(a)(2) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1926(a)(2)) is amended--
                (1) by striking ``(2) The'' and inserting the following:
                ``(2) Water, waste disposal, and wastewater facility
            grants.--
                        ``(A) Authority.--
                              ``(i) In general.--The'';
                (2) by striking ``aggregating not to exceed $590,000,000 in
            any fiscal year'';
                (3) by striking ``The amount'' and inserting the following:
                              ``(ii) Amount.--The amount'';
                (4) by striking ``paragraph'' and inserting
            ``subparagraph'';
                (5) by striking ``The Secretary shall'' and inserting the
            following:
                              ``(iii) Grant rate.--The Secretary shall'';
                          and
                (6) by adding at the end the following:
                        ``(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 financing to eligible entities 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 entities.--To be eligible to
                          obtain financing from a revolving fund under
                          clause (i), an

    [[Page 116 STAT. 353]]

                          eligible entity must be eligible to obtain a loan,
                          loan guarantee, or grant under paragraph (1) or
                          this paragraph.
                              ``(iii) Maximum amount of financing.--The
                          amount of financing made to an eligible entity
                          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 financing provided
                          to an eligible entity 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) Annual report.--A nonprofit entity
                          receiving a grant under this subparagraph shall
                          submit to the Secretary an annual report that
                          describes the number and size of communities
                          served and the type of financing provided.
                              ``(vii) Authorization of appropriations.--
                          There are authorized to be appropriated to carry
                          out this subparagraph $30,000,000 for each of
                          fiscal years 2002 through 2007.''.

    SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS.

        Section 306(a)(11)(D) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1926(a)(11)(D)) is amended--
                (1) by striking ``$7,500,000'' and inserting
            ``$15,000,000''; and
                (2) by striking ``2002'' and inserting ``2007''.

    SEC. 6004. CHILD DAY CARE FACILITIES.

        Section 306(a)(19) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1926(a)(19)) is amended by adding at the end the
    following:
                        ``(C) Reservation of funds for child 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.''.

    SEC. 6005. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.

        Section 306(a) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1926(a)) is amended by adding at the end the following:
                ``(22) Rural water and wastewater circuit rider program.--

    [[Page 116 STAT. 354]]

                        ``(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'' in
                    title III of the Agriculture, Rural Development, Food
                    and Drug Administration, and Related Agencies
                    Appropriations Act, 2002 (115 Stat. 719).
                        ``(C) Authorization of appropriations.--There is
                    authorized to be appropriated to carry out this
                    paragraph $15,000,000 for fiscal year 2003 and each
                    fiscal year thereafter.''.

    SEC. 6006. MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS.

        Section 306(a) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1926(a)) (as amended by section 6005) is amended by adding at the
    end the following:
                ``(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 give 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 2007.''.

    [[Page 116 STAT. 355]]

    SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT LOANS.

        (a) Loan Guarantees for Water, Wastewater, and Essential Community
    Facilities Loans.--Section 306(a) of the Consolidated Farm and Rural
    Development Act (7 U.S.C. <<NOTE: 7 USC 1926.>> 1925(a)) (as amended by
    section 6006) is amended by adding at the end the following:
                ``(24) Loan guarantees for water, wastewater, and essential
            community facilities loans.--
                        ``(A) In general.--The Secretary may guarantee a
                    loan made to finance a community facility or water or
                    waste facility project in a rural area, including a loan
                    financed by the net proceeds of a bond described in
                    section 142(a) 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 shall 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.''.

        (b) Loan Guarantees for Certain Loans.--Section 310B of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is amended
    by adding at the end the following:
        ``(h) Loan Guarantees for Certain Loans.--The Secretary may
    guarantee loans made under subsection (a) to finance the issuance of
    bonds for the projects described in section 306(a)(24).''.

    SEC. 6008. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY FACILITIES.

        Section 306(a) of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1926(a)) (as amended by section 6007(a)) is amended by adding at
    the end the following:
                ``(25) Tribal college and university essential community
            facilities.--
                        ``(A) In general.--The Secretary may make grants to
                    tribal colleges and universities (as defined in section
                    316 of the Higher Education Act of 1965 (20 U.S.C.
                    1059c)) to provide the Federal share of the cost of
                    developing specific tribal college or university
                    essential community facilities in rural areas.
                        ``(B) Federal share.--
                              ``(i) In <<NOTE: Regulation.>> general.--
                          Except as provided in clauses (ii) and (iii), the
                          Secretary shall, by regulation, establish the
                          maximum percentage of the cost of the facility
                          that may be covered by a grant 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 of the percentages
                          of the cost covered by a grant made under this
                          paragraph that provides higher percentages for
                          facilities in

    [[Page 116 STAT. 356]]

                          communities that have lower community population
                          and income levels, as determined by the Secretary.
                        ``(C) Authorization of appropriations.--There is
                    authorized to be appropriated to carry out this
                    paragraph $10,000,000 for each of fiscal years 2003
                    through 2007.''.

    SEC. 6009. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANT
                PROGRAM.

        Section 306A of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1926a) is amended--
                (1) in the section heading, by inserting ``and imminent''
            after ``emergency'';
                (2) in subsection (a)--
                        (A) in paragraph (1), by inserting ``, or when such
                    a decline is imminent'' before the semicolon at the end;
                    and
                        (B) in paragraph (2)--
                              (i) in subparagraph (A), by striking ``acute''
                          and inserting ``acute, or imminent,''; and
                              (ii) in subparagraph (B), by striking
                          ``decline'' and inserting ``decline, or imminent
                          decline,'';
                (3) in subsection (c)(2), by striking ``occurred'' and
            inserting ``occurred, or will occur,'';
                (4) in subsection (d), by striking paragraph (1) and
            inserting the following:
                ``(1) In general.--Grants made under this section may be
            used--
                        ``(A) for waterline extensions from existing
                    systems, laying of new waterlines, repairs, significant
                    maintenance, digging of new wells, equipment
                    replacement, and hook and tap fees;
                        ``(B) for any other appropriate purpose associated
                    with developing sources of, treating, storing, or
                    distributing water;
                        ``(C) 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.); and
                        ``(D) to provide potable water to communities
                    through other means.'';
                (5) in subsection (f)(2), by striking ``$75,000'' and
            inserting ``$150,000'';
                (6) in subsection (h)--
                        (A) in the second sentence of paragraph (1), by
                    striking ``decline'' and inserting ``decline, or
                    imminent decline,''; and
                        (B) by striking paragraph (2) and inserting the
                    following:
                ``(2) Timing of review of applications.--
                        ``(A) Simplified application.--The application
                    process developed by the Secretary under paragraph (1)
                    shall include a simplified application form that will
                    permit expedited consideration of an application for a
                    grant filed under this section.
                        ``(B) Priority review.--In processing applications
                    for any water or waste grant or loan authorized under
                    this title, the Secretary shall afford priority
                    processing to an application for a grant under this
                    section to the extent

    [[Page 116 STAT. 357]]

                    funds will be available for an award on the application
                    at the conclusion of priority processing.
                        ``(C) Timing.--The Secretary shall, to the maximum
                    extent practicable, review and act on an application
                    under this section within 60 days after the date on
                    which the application is submitted to the Secretary.'';
                    and
                (7) by striking subsection (i) and inserting the following:

        ``(i) Funding.--
                ``(1) Reservation.--
                        ``(A) In general.--For each fiscal year, not less
                    than 3 nor more than 5 percent of the total amount made
                    available to carry out section 306(a)(2) for the fiscal
                    year shall be reserved for grants under this section.
                        ``(B) Release.--Funds reserved under subparagraph
                    (A) for a fiscal year shall be reserved only until July
                    1 of the fiscal year.
                ``(2) Authorization of appropriations.--In addition to funds
            made available under paragraph (1), there is authorized to be
            appropriated to carry out this section $35,000,000 for each of
            fiscal years 2003 through 2007.''.

    SEC. 6010. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES.

        Section 306C of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1926c) is amended by striking subsection (e) and inserting the
    following:
        ``(e) Authorization of Appropriations.--
                ``(1) In general.--Subject to paragraph (2), there are
            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) in addition to grants provided under
                    subparagraph (A), 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 paragraph (1)(C).''.

    SEC. 6011. GRANTS FOR WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN
                ALASKA.

        Section 306D(d)(1) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1926d(d)(1)) is amended by striking ``and 2002'' and
    inserting ``through 2007''.

    SEC. 6012. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE
                CONSTRUCTION, REFURBISHING, AND SERVICING OF INDIVIDUALLY-
                OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL AREAS FOR
                INDIVIDUALS WITH LOW OR MODERATE INCOMES.

        (a) In General.--The Consolidated Farm and Rural Development Act is
    amended by inserting after section 306D (7 U.S.C. 1926d) the following:

    [[Page 116 STAT. 358]]

    ``SEC. 306E. <<NOTE: 7 USC 1926e.>>  GRANTS TO NONPROFIT ORGANIZATIONS
                TO FINANCE THE CONSTRUCTION, REFURBISHING, AND SERVICING OF
                INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN RURAL
                AREAS FOR INDIVIDUALS WITH LOW OR MODERATE INCOMES.

        ``(a) Definition of Eligible Individual.--In this section, the term
    `eligible individual' means an individual who is a member of a household
    the members of which have a combined income (for the most recent 12-
    month period for which the information is available) that is not more
    than 100 percent of the median nonmetropolitan household income for the
    State or territory in which the individual resides, according to the
    most recent decennial census of the United States.
        ``(b) Grants.--
                ``(1) In general.--The Secretary may make grants to private
            nonprofit organizations for the purpose of providing loans to
            eligible individuals for the construction, refurbishing, and
            servicing of individual household water well systems in rural
            areas that are or will be owned by the eligible individuals.
                ``(2) Terms of loans.--A loan made with grant funds under
            this section--
                        ``(A) shall have an interest rate of 1 percent;
                        ``(B) shall have a term not to exceed 20 years; and
                        ``(C) shall not exceed $8,000 for each water well
                    system described in paragraph (1).
                ``(3) Administrative expenses.--A recipient of a grant made
            under this section may use grant funds to pay administrative
            expenses associated with providing the assistance described in
            paragraph (1), as determined by the Secretary.

        ``(c) Priority in Awarding Grants.--In awarding grants under this
    section, the Secretary shall give priority to an applicant that has
    substantial expertise and experience in promoting the safe and
    productive use of individually-owned household water well systems and
    ground water.
        ``(d) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $10,000,000 for each of fiscal
    years 2003 through 2007.''.
        (b) Effective <<NOTE: 7 USC 1926e note.>> Date.--The amendment made
    by subsection (a) takes effect on October 1, 2002.

    SEC. 6013. LOANS AND LOAN GUARANTEES FOR RENEWABLE ENERGY SYSTEMS.

        Section 310B(a)(3) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1932(a)(3)) is amended by inserting ``and other renewable
    energy systems (including wind energy systems and anaerobic digestors
    for the purpose of energy generation)'' after ``solar energy systems''.

    SEC. 6014. RURAL BUSINESS ENTERPRISE GRANTS.

        Section 310B(c)(1) of the Consolidated Farm and Rural Development
    Act (7 U.S.C. 1932(c)(1)) is amended--
                (1) by striking ``(1) In General.--The Secretary'' and
            inserting the following:
                ``(1) Grants.--
                        ``(A) In general.--The Secretary''; and
                (2) by adding at the end the following:

    [[Page 116 STAT. 359]]

                        ``(B) Small and emerging private business
                    enterprises.--
                              ``(i) In general.--For the purpose of
                          subparagraph (A), a small and emerging private
                          business enterprise shall include (regardless of
                          the number of employees or operating capital of
                          the enterprise) an eligible nonprofit entity, or
                          other tax-exempt organization, with a principal
                          office in an area that is located--
                                        ``(I) on land of an existing or
                                    former Native American reservation; and
                                        ``(II) in a city, town, or
                                    unincorporated area that has a
                                    population of not more than 5,000
                                    inhabitants.
                              ``(ii) Use of grant.--An eligible nonprofit
                          entity, or other tax exempt organization,
                          described in clause (i) may use assistance
                          provided under this paragraph to create, expand,
                          or operate value-added processing in an area
                          described in clause (i) in connection with
                          production agriculture.
                              ``(iii) Priority.--In making grants under this
                          paragraph, the Secretary shall give priority to
                          grants that will be used to provide assistance to
                          eligible nonprofit entities and other tax exempt
                          organizations described in clause (i).''.

    SEC. 6015. RURAL COOPERATIVE DEVELOPMENT GRANTS.

        Section 310B(e) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1932(e)) is amended--
                (1) in paragraph (5)(F), before the period at the end the
            following: ``, except that the Secretary shall not require non-
            Federal financial support in an amount that is greater than 5
            percent in the case of 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))''; and
                (2) in paragraph (9), by striking ``2002'' and inserting
            ``2007''.

    SEC. 6016. GRANTS TO BROADCASTING SYSTEMS.

        Section 310B(f) of the Consolidated Farm and Rural Development Act
    (7 U.S.C. 1932(f)) is amended by adding at the end the following:
                ``(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 2007.''.

    SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

        Section 310B of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1932) is amended by striking subsection (g) and inserting the
    following:
        ``(g) Business and Industry Direct and Guaranteed Loans.--
                ``(1) Definition of business and industry loan.--In this
            subsection, the term `business and industry loan' means a
            business and industry direct or guaranteed loan that is made or
            guaranteed by the Secretary under subsection (a)(1).
                ``(2) Loan guarantees for the purchase of cooperative
            stock.--

    [[Page 116 STAT. 360]]

                        ``(A) In general.--The Secretary may guarantee a
                    business and industry loan to individual farmers or
                    ranchers for the purpose of purchasing capital stock of
                    a farmer or rancher cooperative established for the
                    purpose of processing an agricultural commodity.
                        ``(B) Processing contracts during initial period.--A
                    cooperative described in subparagraph (A) for which a
                    farmer or rancher receives a guarantee to purchase stock
                    under subparagraph (A) 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.
                        ``(C) Financial information.--Financial information
                    required by the Secretary from a farmer or rancher as a
                    condition of making a business and industry loan
                    guarantee under this paragraph shall be provided in the
                    manner generally required by commercial agricultural
                    lenders in the area.
                ``(3) Loans to cooperatives.--
                        ``(A) In general.--The Secretary may make or
                    guarantee a business and industry loan to a cooperative
                    organization 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 or a loan guarantee that meets the requirements of
                    paragraph (6).
                        ``(B) Refinancing.--A cooperative organization that
                    is eligible for a business and industry loan shall be
                    eligible to refinance an existing business and industry
                    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
                                    payment default, or the collateral of
                                    which has not been converted, with
                                    respect to the existing loan; and
                              ``(ii) there is adequate security or full
                          collateral for the refinanced loan.
                ``(4) Loan appraisals.--The Secretary may require that any
            appraisal made in connection with a business and industry loan
            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.
                ``(5) Fees.--The Secretary may assess a 1-time fee for any
            guaranteed business and industry loan in an amount that does not
            exceed 2 percent of the guaranteed principal portion of the
            loan.
                ``(6) Loan guarantees in nonrural areas.--
                        ``(A) In general.--The Secretary may guarantee a
                    business and industry loan to a cooperative organization
                    for a facility that is not located in a rural area if--
                              ``(i) the primary purpose of the loan
                          guarantee is for a facility to provide value-added
                          processing for agricultural producers that are
                          located within 80 miles of the facility;

    [[Page 116 STAT. 361]]

                              ``(ii) the applicant demonstrates to the
                          Secretary that the primary benefit of the loan
                          guarantee will be to provide employment for
                          residents of a rural area; and
                              ``(iii) the total amount of business and
                          industry loans guaranteed for a fiscal year under
                          this paragraph does not exceed 10 percent of the
                          business and industry loans guaranteed for the
                          fiscal year under subsection (a)(1).
                        ``(B) Principal amounts.--The principal amount of a
                    business and industry loan guaranteed under this
                    paragraph may not exceed $25,000,000.
                ``(7) Intangible assets.--In determining whether a
            cooperative organization is eligible for a guaranteed business
            and industry loan, the Secretary may consider the market value
            of a properly appraised brand name, patent, or trademark of the
            cooperative.
                ``(8) Limitations on loan guarantees for cooperative
            organizations.--
                        ``(A) Principal amount.--
                              ``(i) In general.--Subject to clause (ii), the
                          principal amount of a business and industry loan
                          made to a cooperative organization and guaranteed
                          under this subsection shall not exceed
                          $40,000,000.
                              ``(ii) Use.--To be eligible for a guarantee
                          under this subsection for a business and industry
                          loan made to a cooperative organization, the
                          principal amount of the any such loan in excess of
                          $25,000,000 shall be used to carry out a project--
                                        ``(I) in a rural area; and
                                        ``(II) that provides for the value-
                                    added processing of agricultural
                                    commodities.
                        ``(B) Applications.--If a cooperative organization
                    submits an application for a guarantee under this
                    subsection of a business and industry loan with a
                    principal amount that is in excess of $25,000,000, the
                    Secretary--
                              ``(i) shall review and, if appropriate,
                          approve the application; and
                              ``(ii) may not delegate the approval
                          authority.
                        ``(C) Maximum amount.--The total amount of business
                    and industry loans made to cooperative organizations and
                    guaranteed for a fiscal year under this subsection with
                    principal amounts that are in excess of $25,000,000 may
                    not exceed 10 percent of the business and industry loans
                    guaranteed for the fiscal year under subsection
                    (a)(1).''.

    SEC. 6018. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER PURPOSES.

        Subtitle A of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1921 et seq.) (as amended by section 5006) is amended by adding
    at the end the following:

    ``SEC. 310G. <<NOTE: 7 USC 1936a.>>  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

    [[Page 116 STAT. 362]]

    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.''.

    SEC. 6019. SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.

        Section 333A of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1983a) (as amended by section 5307) is amended by striking
    subsection (g) and inserting the following:
        ``(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 $125,000 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. 6020. DEFINITION OF RURAL AND RURAL AREA.

        (a) In General.--Section 343(a) of the Consolidated Farm and Rural
    Development Act (7 U.S.C. 1991(a)) is amended by adding at the end the
    following:

    [[Page 116 STAT. 363]]

                ``(13) Rural and rural area.--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, the terms `rural' and `rural area' mean
                    any area other than--
                              ``(i) a city or town that has a population of
                          greater than 50,000 inhabitants; and
                              ``(ii) the urbanized area contiguous and
                          adjacent to such a city or town.
                        ``(B) Water and waste disposal grants and direct and
                    guaranteed loans.--For the purpose of water and waste
                    disposal grants and direct and guaranteed loans provided
                    under paragraphs (1), (2), and (24) of section 306(a),
                    the terms `rural' and `rural area' mean a city, town, or
                    unincorporated area that has a population of no more
                    than 10,000 inhabitants.
                        ``(C) Community facility loans and grants.--For the
                    purpose of community facility direct and guaranteed
                    loans and grants under paragraphs (1), (19), (20), (21),
                    and (24) of section 306(a), the terms `rural' and `rural
                    area' mean a city, town, or unincorporated area that has
                    a population of not more than 20,000 inhabitants.
                        ``(D) Multijurisdictional regional planning
                    organizations; national rural development partnership.--
                    In sections 306(a)(23) and 378, 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.
                        ``(E) Rural business investment program.--In
                    subtitle H, 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) Conforming Amendments.--
                (1) Section 306(a) of the Consolidated Farm and Rural
            Development Act (7 U.S.C. 1926(a)) is amended by striking
            paragraph (7).
                (2) Section 381A of the Consolidated Farm and Rural
            Development Act (7 U.S.C. 2009) is amended--
                        (A) by striking paragraph (1); and
                        (B) by redesignating paragraphs (2) and (3) as
                    paragraphs (1) and (2), respectively.
                (3) Section 735 of the Agriculture, Rural Development, Food
            and Drug Administration, and Related Agencies Appropriations
            Act, 1999 (112 Stat. 2681-29) <<NOTE: 7 USC 2009 note.>> is
            repealed.

    SEC. 6021. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

        Subtitle D of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1981 et seq.) (as amended by section 5321) is amended by adding
    at the end the following:

    [[Page 116 STAT. 364]]

    ``SEC. 378. <<NOTE: 7 USC 2008m.>>  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
            implements a Federal law, or administers a program, targeted at
            or having a significant impact on rural areas.
                ``(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 to
            empower and build the capacity of States and rural communities
            to design flexible and innovative responses to their own special
            rural development needs, with local determinations of progress
            and selection of projects and activities.
                ``(3) Governing <<NOTE: Establishment.>> 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 may 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 with
                    rural responsibilities 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, the
                    Coordinating Committee and State rural development
                    councils.

        ``(c) National Rural Development Coordinating Committee.--

    [[Page 116 STAT. 365]]

                ``(1) Establishment.--The Secretary shall establish a
            National Rural Development Coordinating Committee within the
            Department of Agriculture.
                ``(2) Composition.--The Coordinating Committee shall be
            composed of--
                        ``(A) 1 representative of each agency with rural
                    responsibilities; 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) support the work of the State rural
                    development councils;
                        ``(B) facilitate coordination of rural development
                    policies, programs, and activities among Federal
                    agencies and with those of State, local, and tribal
                    governments, the private sector, and nonprofit
                    organizations;
                        ``(C) review and comment on policies, regulations,
                    and proposed legislation that affect or would affect
                    rural areas and gather and provide related information;
                        ``(D) develop and facilitate strategies to reduce or
                    eliminate administrative and regulatory impediments; and
                        ``(E) require each State rural development council
                    receiving funds under this section to submit an annual
                    report on the use of the funds, including a description
                    of strategic plans, goals, performance measures, and
                    outcomes for the State rural development council of the
                    State.
                ``(4) Federal participation in coordinating committee.--
                        ``(A) In general.--A Federal employee shall fully
                    participate in the governance and operations of the
                    Coordinating Committee, including activities related to
                    grants, contracts, and other agreements, in accordance
                    with this section.
                        ``(B) Conflicts.--Participation by a Federal
                    employee in the Coordinating Committee in accordance
                    with this paragraph shall not constitute a violation of
                    section 205 or 208 of title 18, United States Code.
                ``(5) Administrative support.--The Secretary may provide
            such administrative support for the Coordinating Committee as
            the Secretary determines is necessary to carry out the duties of
            the Coordinating Committee.
                ``(6) Procedures.--The Secretary may prescribe such
            regulations, bylaws, or other procedures as are necessary for
            the operation of the Coordinating Committee.

        ``(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 recognize a State rural development council.

    [[Page 116 STAT. 366]]

                ``(2) Composition.--A State rural development council
            shall--
                        ``(A) be composed of representatives of Federal,
                    State, local, and tribal governments, nonprofit
                    organizations, regional organizations, the private
                    sector, and other entities committed to rural
                    advancement; and
                        ``(B) have a nonpartisan and nondiscriminatory
                    membership that--
                              ``(i) is broad and representative of the
                          economic, social, and political diversity of the
                          State; and
                              ``(ii) shall be responsible for the governance
                          and operations of the State rural development
                          council.
                ``(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 have an impact on rural areas
                    of the State;
                        ``(B) monitor, report, and comment on policies and
                    programs that address, or fail to address, the needs of
                    the rural areas of the State;
                        ``(C) as part of the Partnership, 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; and
                        ``(D)(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) Federal participation in state rural development
            councils.--
                        ``(A) In general.--A State Director for Rural
                    Development of the Department of Agriculture, other
                    employees of the Department, and employees of other
                    Federal agencies with rural responsibilities shall fully
                    participate as voting members in the governance and
                    operations of State rural development councils
                    (including activities related to grants, contracts, and
                    other agreements in accordance with this section) on an
                    equal basis with other members of the State rural
                    development councils.
                        ``(B) Conflicts.--Participation by a Federal
                    employee in a State rural development council in
                    accordance with this paragraph shall not constitute a
                    violation of section 205 or 208 of title 18, United
                    States Code.

        ``(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 to
                    the Secretary for the support of the Partnership 1 or
                    more employees of the agency with rural responsibilities
                    without reimbursement for a period of up to 1 year.
                        ``(B) Civil service status.--The detail shall be
                    without interruption or loss of civil service status or
                    privilege.

    [[Page 116 STAT. 367]]

                ``(2) Additional support.--The Secretary may provide for any
            additional support staff to the Partnership as the Secretary
            determines to be necessary to carry out the duties of the
            Partnership.
                ``(3) Intermediaries.--The Secretary may enter into a
            contract with a qualified intermediary under which the
            intermediary shall be responsible for providing administrative
            and technical assistance to a State rural development council,
            including administering the financial assistance available to
            the State rural development council.

        ``(f) 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 from a
            Federal agency under subsection (g)(2).
                ``(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.
                ``(3) Department's share.--The Secretary shall develop a
            plan to decrease, over time, the share of the Department of
            Agriculture of the cost of the core operations of State rural
            development councils.

        ``(g) Funding.--
                ``(1) Authorization of appropriations.--There is authorized
            to be appropriated to carry out this section $10,000,000 for
            each of fiscal years 2003 through 2007.
                ``(2) Federal agencies.--
                        ``(A) In general.--Notwithstanding any other
                    provision of law limiting the ability of an agency,
                    along with other agencies, to provide funds to the
                    Coordinating Committee or a State rural development
                    council in order to carry out the purposes of this
                    section, a Federal agency may make grants, gifts, or
                    contributions to, provide technical assistance to, or
                    enter into contracts or cooperative agreements with, the
                    Coordinating Committee or a State rural development
                    council.
                        ``(B) Assistance.--Federal agencies are encouraged
                    to use funds made available for programs that have an
                    impact on rural areas to provide assistance to, and
                    enter into contracts with, the Coordinating Committee or
                    a State rural development council, as described in
                    subparagraph (A).

    [[Page 116 STAT. 368]]

                ``(3) Contributions.--The Coordinating Committee and a State
            rural development council may accept private contributions.

        ``(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. 6022. RURAL TELEWORK.

        Subtitle D of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1981 et seq.) (as amended by section 6021) is amended by adding
    at the end the following:

    ``SEC. 379. <<NOTE: 7 USC 2008n.>>  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, in a rural area
            (except for the institute), that meets the requirements of this
            section and such other requirements as are established by the
            Secretary.
                ``(2) Institute.--The term `institute' means a rural
            telework institute established using a grant under 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 <<NOTE: Grants.>> general.--The Secretary shall
            make 1 or more grants 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 (2).
                ``(2) Projects.--The institute shall use grant funds
            received 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.
                ``(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

    [[Page 116 STAT. 369]]

                    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, 30 percent of the amount
                          of the grant; and
                              ``(ii) during each of the fourth and fifth
                          years of the project, 50 percent of the amount of
                          the grant.
                        ``(B) Indian tribes.--Notwithstanding subparagraph
                    (A), an Indian tribe may use any Federal funds made
                    available to the Indian 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,
                    computer software, consultant services, computer
                    networking equipment, and related services.

        ``(c) Telework Grants.--
                ``(1) In general.--Subject to paragraphs (2) through (5),
            the Secretary shall make grants to eligible organizations 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) Applications.--To be eligible to receive a grant under
            this subsection, an eligible organization shall submit to the
            Secretary, and receive the approval of the Secretary of, an
            application for the grant that demonstrates that the eligible
            organization 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, computer software, consultant services,
                          computer networking equipment, and related
                          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 expand or operate a telework location in a
            rural area after the date that is 3 years after the
            establishment of the telework location.

    [[Page 116 STAT. 370]]

                ``(5) Amount.--The amount of a grant provided to an eligible
            organization under this subsection shall be not less than
            $1,000,000 and not more than $2,000,000.

        ``(d) Applicability of Certain Federal Law.--An eligible
    organization 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 <<NOTE: Deadline.>> 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 2007, of which $5,000,000 shall be provided to
    establish and support an institute under subsection (b).''.

    SEC. 6023. HISTORIC BARN PRESERVATION.

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

    ``SEC. 379A. <<NOTE: 7 USC 2008o.>>  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 agricultural activities conducted 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 described in section 501(c)(3) of the
                          Internal Revenue Code of 1986 and exempt from
                          taxation under section 501(a) of such Code; 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 Under Secretary of Rural Development.

    [[Page 116 STAT. 371]]

        ``(b) Program.--The Secretary shall establish a historic barn
    preservation program--
                ``(1) to assist States in developing a list 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 applicant 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.
                ``(4) 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 2007.''.

    SEC. 6024. GRANTS FOR NOAA WEATHER RADIO TRANSMITTERS.

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

    ``SEC. 379B. <<NOTE: 7 USC 2008p.>>  GRANTS FOR NOAA 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, and borrowers of loans made by the Rural Utilities Service,
    for the Federal share of the cost of acquiring radio transmitters to
    increase coverage of rural areas by the all hazards 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 all hazards weather radio

    [[Page 116 STAT. 372]]

            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 total cost of acquiring a radio
    transmitter, as described in subsection (a).
        ``(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 2002 through 2007.''.

    SEC. 6025. GRANTS TO TRAIN FARM WORKERS IN NEW TECHNOLOGIES AND TO TRAIN
                FARM WORKERS IN SPECIALIZED SKILLS NECESSARY FOR HIGHER
                VALUE CROPS.

        Subtitle D of the Consolidated Farm and Rural Development Act (7
    U.S.C. 1981 et seq.) (as amended by section 6024) is amended by adding
    at the end the following:

    ``SEC. 379C. <<NOTE: 7 USC 2008q.>>  GRANTS TO TRAIN FARM WORKERS IN NEW
                TECHNOLOGIES AND TO TRAIN FARM WORKERS IN SPECIALIZED SKILLS
                NECESSARY FOR HIGHER VALUE CROPS.

        ``(a) In General.--The Secretary shall make grants to nonprofit
    organizations, or to a consortium of nonprofit organizations,
    agribusinesses, State and local governments, agricultural labor
    organizations, farmer or rancher cooperatives, and community-based
    organizations with the capacity to train farm workers.
        ``(b) Use of Funds.--An entity to which a grant is made under this
    section shall use the grant to train farm workers to use new
    technologies and develop specialized skills for agricultural
    development.
        ``(c) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $10,000,000 for each of fiscal
    years 2002 through 2007.''.

    SEC. 6026. RURAL COMMUNITY ADVANCEMENT PROGRAM.

        (a) National Reserve Program.--Section 381E of the Consolidated Farm
    and Rural Development Act (7 U.S.C. 2009d) is amended--
                (1) in subsection (b)--
                        (A) by striking paragraph (4); and
                        (B) by redesignating paragraph (5) as paragraph (4);
                (2) by striking subsection (e);
                (3) by redesignating subsections (f) through (h) as
            subsections (e) through (g), respectively; and
                (4) in subsection (g) (as so redesignated), by striking
            ``subsection (g) of this section'' and inserting ``subsection
            (f)''.

        (b) Rural Venture Capital Demonstration Program.--Section 381O of
    the Consolidated Farm and Rural Development Act (7 U.S.C. 2009n) is
    repealed.
        (c) Conforming Amendments.--Section 381G of the Consolidated Farm
    and Rural Development Act (7 U.S.C. 2009f(a)) is amended--
                (1) in subsection (a), by striking ``section 381E(g)'' each
            place it appears and inserting ``section 381E(f)''; and
                (2) in subsection (b)(1), by striking ``section 381E(h)''
            and inserting ``section 381E(g)''.

    [[Page 116 STAT. 373]]

    SEC. 6027. DELTA REGIONAL AUTHORITY.

        (a) Voting.--Section 382B(c) of the Consolidated Farm and Rural
    Development Act (7 U.S.C. 2009aa-1(c)) is amended by striking paragraph
    (1) and inserting the following:
                ``(1) In general.--
                        ``(A) Temporary <<NOTE: Effective date. Termination
                    date.>> method.--During the period beginning on the date
                    of enactment of this subparagraph and ending on December
                    31, 2004, a decision by the Authority shall require the
                    affirmative vote of the Federal cochairperson and a
                    majority of the State members (not including any member
                    representing a State that is delinquent under subsection
                    (g)(2)(C)) to be effective.
                        ``(B) Permanent <<NOTE: Effective date.>> method.--
                    Effective beginning on January 1, 2005, 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.''.

        (b) Authority to Issue Regulations.--Section 382B(e)(4) of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-1(e)(4)) is
    amended by striking ``and rules'' and inserting ``, rules, and
    regulations''.
        (c) Economic and Community Development Grants.--Section 382C(b) of
    the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-2(b))
    is amended by striking paragraph (3).
        (d) Supplements to Federal Grant Programs.--Section 382D of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-3) is
    amended to read as follows:

    ``SEC. 382D. 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) the States or communities lack the economic resources
            to provide the required matching share; or
                ``(2) there are insufficient funds available under the
            applicable Federal law authorizing the Federal grant program to
            meet pressing needs of the region.

        ``(b) Federal Grant Program Funding.--Notwithstanding any provision
    of law limiting the Federal share, the areas eligible for assistance, or
    the authorizations of appropriations of any Federal grant program, and
    in accordance with subsection (c), the Authority, with the approval of
    the Federal cochairperson and with respect to a project to be carried
    out in the region--
                ``(1) may increase the Federal share of the costs of a
            project under the Federal grant program to not more than 90
            percent (except as provided in section 382F(b)); and
                ``(2) shall use amounts made available to carry out this
            subtitle to pay the increased Federal share.

        ``(c) Certifications.--
                ``(1) In general.--In the case of any project for which all
            or any portion of the basic Federal share of the costs of the
            project is proposed to be paid under this section, no Federal
            contribution shall be made until the Federal official
            administering the Federal law that authorizes the Federal grant
            program certifies that the project--

    [[Page 116 STAT. 374]]

                        ``(A) meets (except as provided in subsection (b))
                    the applicable requirements of the applicable Federal
                    grant program; and
                        ``(B) could be approved for Federal contribution
                    under the Federal grant program if funds were available
                    under the law for the 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 Act in accordance with
                    section 382I--
                              ``(i) shall be controlling; and
                              ``(ii) shall be accepted by the Federal
                          agencies.
                        ``(B) Acceptance by federal cochairperson.--In the
                    case of any project described in paragraph (1), any
                    finding, report, certification, or documentation
                    required to be submitted with respect to the project to
                    the head of the department, agency, or instrumentality
                    of the Federal Government responsible for the
                    administration of the Federal grant program under which
                    the project is carried out shall be accepted by the
                    Federal cochairperson.''.

        (e) Grants to Local Development Agencies.--Section 382E(b)(1) of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-4(b)(1)) is
    amended by striking ``may'' and inserting ``shall''.
        (f) Approval of Development Plans and Projects.--Section 382I of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-8) is
    amended--
                (1) in subsection (a), by inserting ``and approved'' after
            ``reviewed''; and
                (2) in subsection (d), by striking ``Votes for Decisions.--
            '' and inserting ``Approval of Grant Applications.--''.

        (g) Authorization of Appropriations.--Section 382M(a) of the
    Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-12(a)) is
    amended by striking ``2002'' and inserting ``2007''.
        (h) Termination of Authority.--Section 382N of the Consolidated Farm
    and Rural Development Act (7 U.S.C. 2009aa-13) is amended by striking
    ``2002'' and inserting ``2007''.
        (i) Delta Region Agricultural Economic Development.--Subtitle D of
    the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.)
    (as amended by section 6025) is amended by adding at the end the
    following:

    ``SEC. 379D. <<NOTE: 7 USC 2008r.>>  DELTA REGION AGRICULTURAL ECONOMIC
                DEVELOPMENT.

        ``(a) In General.--The Secretary may make grants to assist in the
    development of state-of-the-art technology in animal nutrition
    (including research and development of the technology) and value-added
    manufacturing to promote an economic platform for the Delta region (as
    defined in section 382A) to relieve severe economic conditions.
        ``(b) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section $7,000,000 for each of fiscal
    years 2002 through 2007.''.
        (j) Definition of Lower Mississippi.--Section 4(2)(I) of the Delta
    Development Act (42 U.S.C. 3121 note; Public Law 100-460) is amended by
    inserting ``Butler, Conecuh, Escambia, Monroe,'' after ``Russell,''.

    [[Page 116 STAT. 375]]

    SEC. 6028. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

        The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et
    seq.) is amended by adding at the end the following:

             ``Subtitle G--Northern Great Plains Regional Authority

    ``SEC. 383A. <<NOTE: 7 USC 2009bb.>>  DEFINITIONS.

        ``In this subtitle:
                ``(1) Authority.--The term `Authority' means the Northern
            Great Plains Regional Authority established by section 383B.
                ``(2) Federal grant program.--The term `Federal grant
            program' means a Federal grant program to provide assistance
            in--
                        ``(A) implementing the recommendations of the
                    Northern Great Plains Rural Development Commission
                    established by the Northern Great Plains Rural
                    Development Act (7 U.S.C. 2661 note; Public Law 103-
                    318);
                        ``(B) acquiring or developing land;
                        ``(C) constructing or equipping a highway, road,
                    bridge, or facility;
                        ``(D) carrying out other economic development
                    activities; or
                        ``(E) conducting research activities related to the
                    activities described in subparagraphs (A) through (D).
                ``(3) 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).
                ``(4) Region.--The term `region' means the States of Iowa,
            Minnesota, Nebraska, North Dakota, and South Dakota.

    ``SEC. 383B. <<NOTE: 7 USC 2009bb-1.>> 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, by and with the advice and consent of the
                    Senate;
                        ``(B) the Governor (or a designee of the Governor)
                    of each State in the region that elects to participate
                    in the Authority; and
                        ``(C) a member of an Indian tribe, who shall be a
                    chairperson of an Indian tribe in the region or a
                    designee of such a chairperson, to be appointed by the
                    President, by and with the advice and consent of the
                    Senate.
                ``(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;
                        ``(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; and
                        ``(C) the member of an Indian tribe, who shall
                    serve--

    [[Page 116 STAT. 376]]

                              ``(i) as the tribal cochairperson; and
                              ``(ii) as a liaison between the governments of
                          Indian tribes in the region and the Authority.

        ``(b) Alternate Members.--
                ``(1) Alternate <<NOTE: President.>> federal
            cochairperson.--The President shall appoint an alternate Federal
            cochairperson.
                ``(2) State alternates.--
                        ``(A) In general.--The State member of a
                    participating State may have a single alternate, who
                    shall be--
                              ``(i) a resident of that State; and
                              ``(ii) appointed by the Governor of the State.
                        ``(B) Quorum.--A State alternate member shall not be
                    counted toward the establishment of a quorum of the
                    members of the Authority in any case in which a quorum
                    of the State members is required to be present.
                ``(3) Alternate <<NOTE: President.>> tribal cochairperson.--
            The President shall appoint an alternate tribal cochairperson,
            by and with the advice and consent of the Senate.
                ``(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 member of the Authority, shall
            be delegated to any person who is not--
                        ``(A) a member of the Authority; or
                        ``(B) 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)(D)) 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 383I.
                ``(4) Voting by alternate members.--An alternate member
            shall vote in the case of the absence, death, disability,
            removal, or resignation of the Federal, State, or Indian tribe
            member for whom 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, tribal, and
            local planning and development activities in the region;
                ``(2) not <<NOTE: Deadline.>> 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,

    [[Page 116 STAT. 377]]

            State, tribal, 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, tribal, 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, State, or tribal
            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, tribal, or local
            agency such information as may be available to or procurable by
            the agency that may be of use to the Authority in carrying out
            the duties of the Authority;
                ``(4) adopt, amend, and repeal bylaws and rules governing
            the conduct of business and the performance of duties of the
            Authority;
                ``(5) request the head of any Federal 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 agency, tribal
            government, 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 tribal
                    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

    [[Page 116 STAT. 378]]

            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);
                        ``(C) any Indian tribe in the region; or
                        ``(D) 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) Federal share.--The Federal share of the
            administrative expenses of the Authority shall be--
                        ``(A) for fiscal year 2002, 100 percent;
                        ``(B) for fiscal year 2003, 75 percent; and
                        ``(C) for fiscal year 2004 and each fiscal year
                    thereafter, 50 percent.
                ``(2) Non-federal share.--
                        ``(A) In general.--The non-Federal share of the
                    administrative expenses of the Authority shall be paid
                    by non-Federal sources in the States that participate in
                    the Authority.
                        ``(B) Share paid by each state.--The share of
                    administrative expenses of the Authority to be paid by
                    non-Federal sources in each State shall be determined by
                    the Authority.
                        ``(C) No federal participation.--The Federal
                    cochairperson shall not participate or vote in any
                    decision under subparagraph (B).
                        ``(D) 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 provided 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 and tribal cochairpersons.--The Federal
            cochairperson and the tribal cochairperson shall be compensated
            by the Federal Government at the annual rate of basic pay
            prescribed for level III of the Executive Schedule in subchapter
            II of chapter 53 of title 5, United States Code.
                ``(2) Alternate federal and tribal cochairpersons.--The
            alternate Federal cochairperson and the alternate tribal
            cochairperson--
                        ``(A) shall be compensated by the Federal Government
                    at the annual rate of basic pay prescribed for level V
                    of the Executive Schedule described in paragraph (1);
                    and
                        ``(B) when not actively serving as an alternate,
                    shall perform such functions and duties as are delegated
                    by

    [[Page 116 STAT. 379]]

                    the Federal cochairperson or the tribal cochairperson,
                    respectively.
                ``(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 State law.
                        ``(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 member 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, tribal,
                          local, or intergovernmental 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.--

    [[Page 116 STAT. 380]]

                ``(1) In general.--Except as provided under paragraph (2),
            no State member, Indian tribe member, State 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 or the Indian tribe) 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, Indian tribe 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, Indian tribe 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) or subsection (i) of
    this subtitle, or sections 202 through 209 of title 18, United States
    Code.

    ``SEC. 383C. <<NOTE: 7 USC 2009bb-2.>>  ECONOMIC AND COMMUNITY
                DEVELOPMENT GRANTS.

        ``(a) In General.--The Authority may approve grants to States,
    Indian tribes, local governments, and public and nonprofit organizations
    for projects, approved in accordance with section 383I--
                ``(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 be made only to States, Indian tribes, local
            governments, and nonprofit organizations);

    [[Page 116 STAT. 381]]

                ``(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 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, State, and tribal 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.

    ``SEC. 383D. <<NOTE: 7 USC 2009bb-3.>>  SUPPLEMENTS TO FEDERAL GRANT
                PROGRAMS.

        ``(a) Finding.--Congress finds that certain States and local
    communities of the region, including local development districts, may be
    unable to take maximum advantage of Federal grant programs for which the
    States and communities are eligible because--
                ``(1) they lack the economic resources to provide the
            required matching share; or
                ``(2) there are insufficient funds available under the
            applicable Federal law authorizing the Federal grant program to
            meet pressing needs of the region.

        ``(b) Federal Grant Program Funding.--Notwithstanding any provision
    of law limiting the Federal share, the areas eligible for assistance, or
    the authorizations of appropriations, under any Federal grant program,
    and in accordance with subsection (c), the Authority, with the approval
    of the Federal cochairperson and with respect to a project to be carried
    out in the region--
                ``(1) may increase the Federal share of the costs of a
            project under any Federal grant program to not more than 90
            percent (except as provided in section 383F(b)); and
                ``(2) shall use amounts made available to carry out this
            subtitle to pay the increased Federal share.

        ``(c) Certifications.--

    [[Page 116 STAT. 382]]

                ``(1) In general.--In the case of any project for which all
            or any portion of the basic Federal share of the costs of the
            project is proposed to be paid under this section, no Federal
            contribution shall be made until the Federal official
            administering the Federal law that authorizes the Federal grant
            program certifies that the project--
                        ``(A) meets (except as provided in subsection (b))
                    the applicable requirements of the applicable Federal
                    grant program; and
                        ``(B) could be approved for Federal contribution
                    under the Federal grant program if funds were available
                    under the law for the 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 Act in accordance with
                    section 383I--
                              ``(i) shall be controlling; and
                              ``(ii) shall be accepted by the Federal
                          agencies.
                        ``(B) Acceptance by federal cochairperson.--In the
                    case of any project described in paragraph (1), any
                    finding, report, certification, or documentation
                    required to be submitted with respect to the project to
                    the head of the department, agency, or instrumentality
                    of the Federal Government responsible for the
                    administration of the Federal grant program under which
                    the project is carried out shall be accepted by the
                    Federal cochairperson.

    ``SEC. 383E. <<NOTE: 7 USC 2009bb-4.>>  LOCAL DEVELOPMENT DISTRICTS AND
                ORGANIZATIONS AND NORTHERN GREAT PLAINS INC.

        ``(a) Definition of Local Development District.--In this section,
    the term `local development district' means an entity--
                ``(1) that--
                        ``(A) is a planning district in existence on the
                    date of enactment of this subtitle that is recognized by
                    the Economic Development Administration of the
                    Department of Commerce; or
                        ``(B) is--
                              ``(i) organized and operated in a manner that
                          ensures broad-based community participation and an
                          effective opportunity for other nonprofit groups
                          to contribute to the development and
                          implementation of programs in the region;
                              ``(ii) governed by a policy board with at
                          least a simple majority of members consisting of--
                                        ``(I) elected officials or employees
                                    of a general purpose unit of local
                                    government who have been appointed to
                                    represent the government; or
                                        ``(II) individuals appointed by the
                                    general purpose unit of local government
                                    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

    [[Page 116 STAT. 383]]

                                        ``(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) that 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, tribal, 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.

        ``(d) Northern Great Plains Inc.--Northern Great Plains Inc., a
    nonprofit corporation incorporated in the State of Minnesota to
    implement the recommendations of the Northern Great Plains Rural
    Development Commission established by the Northern Great

    [[Page 116 STAT. 384]]

    Plains Rural Development Act (7 U.S.C. 2661 note; Public Law 103-318)--
                ``(1) shall serve as an independent, primary resource for
            the Authority on issues of concern to the region;
                ``(2) shall advise the Authority on development of
            international trade;
                ``(3) may provide research, education, training, and other
            support to the Authority; and
                ``(4) may carry out other activities on its own behalf or on
            behalf of other entities.

    ``SEC. 383F. <<NOTE: 7 USC 2009bb-5.>>  DISTRESSED COUNTIES AND AREAS
                AND NONDISTRESSED COUNTIES.

        ``(a) Designations.--Not <<NOTE: Deadline.>> 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 383M
            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 383D(b) shall not apply to a project to provide
            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 paragraph (2), 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 383E(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.

    [[Page 116 STAT. 385]]

                        ``(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 383M for transportation,
    telecommunication, and basic public infrastructure projects authorized
    under paragraphs (1) and (3) of section 383C(a).

    ``SEC. 383G. <<NOTE: 7 USC 2009bb-6.>>  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
    383B(d)(2).
        ``(c) Consultation With Interested Local Parties.--In carrying out
    the development planning process (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. 383H. <<NOTE: 7 USC 2009bb-7.>>  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 to 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;

    [[Page 116 STAT. 386]]

                ``(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 to be served by
            the project; and
                ``(6) the extent to which the project design provides for
            detailed outcome measurements by which grant expenditures and
            the results of the expenditures may be evaluated.

        ``(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) Maintenance of Effort.--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. 383I. <<NOTE: 7 USC 2009bb-8.>>  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 383H;
                ``(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 383B(c) shall be required for approval of the
    application.

    ``SEC. 383J. <<NOTE: 7 USC 2009bb-9.>> 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. 383K. <<NOTE: 7 USC 2009bb-10.>> 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.

    [[Page 116 STAT. 387]]

                ``(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 to the Authority 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. 383L. <<NOTE: Deadline. 7 USC 2009bb-11.>>  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. 383M. <<NOTE: 7 USC 2009bb-12.>> 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 2007, 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. 383N. <<NOTE: 7 USC 2009bb-13.>> TERMINATION OF AUTHORITY.

        ``The authority provided by this subtitle terminates effective
    October 1, 2007.''.

    SEC. 6029. RURAL BUSINESS INVESTMENT PROGRAM.

        The Consolidated Farm and Rural Development Act (as amended by
    section 6028) is amended by adding at the end the following:

    [[Page 116 STAT. 388]]

                 ``Subtitle H--Rural Business Investment Program

    ``SEC. 384A. <<NOTE: 7 USC 2009cc.>> 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(e).
                ``(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

    [[Page 116 STAT. 389]]

            under section 384D(e), 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)(I) the paid-in capital and paid-in
                          surplus of a corporate rural business investment
                          company;
                              ``(II) the contributed capital of the partners
                          of a partnership rural business investment
                          company; or
                              ``(III) 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--
                                        ``(I) unfunded commitments may be
                                    counted as private capital for purposes
                                    of approval by the Secretary of any
                                    request for leverage; but
                                        ``(II) 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) 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;
                                        ``(II) funds invested by an employee
                                    welfare benefit plan or pension plan;
                                    and
                                        ``(III) 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

    [[Page 116 STAT. 390]]

                    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(e); 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

    [[Page 116 STAT. 391]]

                    Business Administration for the industry in which the
                    rural business concern is primarily engaged.

    ``SEC. 384B. <<NOTE: 7 USC 2009cc-1.>>  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. <<NOTE: 7 USC 2009cc-2.>>  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(e) 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. <<NOTE: 7 USC 2009cc-3.>>  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 enterprises.

        ``(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--

    [[Page 116 STAT. 392]]

                ``(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-based organizations and local entities (including
            local economic development companies, local lenders, and local
            investors) and to seek to address the unmet equity 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, as 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) Status.--Not <<NOTE: Deadline. Reports.>> later than 90 days
    after the initial receipt by the Secretary of an application under this
    section, the Secretary shall provide to the applicant a written report
    describing the status of the application and any requirements remaining
    for completion of the application.

        ``(d) Matters Considered.--In reviewing and processing any
    application under this section, the Secretary--
                ``(1) shall determine whether--
                        ``(A) the applicant meets the requirements of
                    subsection (e); and
                        ``(B) the management of the applicant is qualified
                    and has the knowledge, experience, and capability
                    necessary to comply with this subtitle;
                ``(2) shall take into consideration--
                        ``(A) the need for and availability of financing for
                    rural business concerns in the geographic area in which
                    the applicant is to commence business;
                        ``(B) the general business reputation of the owners
                    and management of the applicant; and
                        ``(C) the probability of successful operations of
                    the applicant, including adequate profitability and
                    financial soundness; and
                ``(3) shall not take into consideration any projected
            shortage or unavailability of grant funds or leverage.

        ``(e) Approval; License.--
                ``(1) In general.--Except as provided in paragraph (2), the
            Secretary may approve an applicant to operate as a rural
            business investment company under this subtitle and license the
            applicant as a rural business investment company, if--

    [[Page 116 STAT. 393]]

                        ``(A) the Secretary determines that the application
                    satisfies the requirements of subsection (b);
                        ``(B) 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
                        ``(C) the applicant enters into a participation
                    agreement with the Secretary.
                ``(2) Capital requirements.--
                        ``(A) In general.--Notwithstanding any other
                    provision of this subtitle, 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 the Secretary
                    determines that the applicant--
                              ``(i) has private capital of more than
                          $2,500,000;
                              ``(ii) would otherwise be approved under this
                          subtitle, except that the applicant does not
                          satisfy the requirements of section 384I(c); and
                              ``(iii) has a viable business plan that--
                                        ``(I) reasonably projects profitable
                                    operations; and
                                        ``(II) has a reasonable timetable
                                    for achieving a level of private capital
                                    that satisfies the requirements of
                                    section 384I(c).
                        ``(B) Leverage.--An applicant approved under
                    subparagraph (A) shall not be eligible to receive
                    leverage under this subtitle until the applicant
                    satisfies the requirements of section 384I(c).
                        ``(C) Grants.--An applicant approved under
                    subparagraph (A) shall be eligible for grants under
                    section 384H in proportion to the private capital of the
                    applicant, as determined by the Secretary.

    ``SEC. 384E. <<NOTE: 7 USC 2009cc-4.>>  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 <<NOTE: Applicability.>>  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 the lesser of--
                        ``(A) 300 percent of the private capital of the
                    rural business investment company; or
                        ``(B) $105,000,000; and
                ``(2) provide for the use of discounted debentures.

    ``SEC. 384F. <<NOTE: 7 USC 2009cc-5.>>  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

    [[Page 116 STAT. 394]]

    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 <<NOTE: Applicability.>> 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 of the 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.

    [[Page 116 STAT. 395]]

                ``(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. <<NOTE: 7 USC 2009cc-6.>>  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. <<NOTE: 7 USC 2009cc-7.>> OPERATIONAL ASSISTANCE GRANTS.

        ``(a) In General.--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.
        ``(b) Terms.--Grants made under this section shall be made over a
    multiyear period (not to exceed 10 years) under such terms as the
    Secretary may require.
        ``(c) Use of Funds.--The proceeds of a grant made under this section
    may be used by the rural business investment company receiving the grant
    only to provide operational assistance in connection with an equity or
    prospective equity investment in a business located in a rural area.
        ``(d) 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.
        ``(e) Grant Amount.--
                ``(1) Rural business investment companies.--The amount of a
            grant made under this section to a rural business investment
            company shall be equal to the lesser of--
                        ``(A) 10 percent of the private capital raised by
                    the rural business investment company; or
                        ``(B) $1,000,000.
                ``(2) Other entities.--The amount of a grant made under this
            section 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.

    [[Page 116 STAT. 396]]

    ``SEC. 384I. <<NOTE: 7 USC 2009cc-8.>>  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

    [[Page 116 STAT. 397]]

                    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;
                        ``(C) require that at least 75 percent of the
                    capital of each rural business investment company is
                    invested in rural business concerns and not more than 10
                    percent of the investments shall be made in an area
                    containing a city of over 150,000 in the last decennial
                    census and the Census Bureau defined urbanized area
                    containing or adjacent to that city;
                        ``(D) ensure that the rural business investment
                    company is designed primarily to meet equity capital
                    needs of the businesses in which the rural business
                    investment company invests and not to compete with
                    traditional small business financing by commercial
                    lenders; and
                        ``(E) require that the rural business investment
                    company makes short-term non-equity investments of less
                    than 5 years only to the extent necessary to preserve an
                    existing investment.

          ``(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. <<NOTE: 7 USC 2009cc-9.>>  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 are eligible both to establish and invest
    in any rural business investment company or in any entity established to
    invest solely in rural business investment companies:
                ``(1) Any bank or savings association the deposits of which
            are insured under the Federal Deposit Insurance Act (12 U.S.C.
            1811 et seq.).
                ``(2) Any Farm Credit System institution described in
            section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C.
            2002(a)).

        ``(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 15 percent of the 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.).

    [[Page 116 STAT. 398]]

    ``SEC. 384K. <<NOTE: 7 USC 2009cc-10.>>  REPORTING REQUIREMENTS.

        ``(a) Rural Business Investment Companies.--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.

        ``(b) Public Reports.--
                ``(1) In general.--The Secretary shall prepare and make
            available to the public an annual report on the program
            established under this subtitle, including detailed information
            on--
                        ``(A) the number of rural business investment
                    companies licensed by the Secretary during the previous
                    fiscal year;
                        ``(B) the aggregate amount of leverage that rural
                    business investment companies have received from the
                    Federal Government during the previous fiscal year;
                        ``(C) the aggregate number of each type of leveraged
                    instruments used by rural business investment companies
                    during the previous fiscal year and how each number
                    compares to previous fiscal years;
                        ``(D) the number of rural business investment
                    company licenses surrendered and the number of rural
                    business investment companies placed in liquidation
                    during the previous fiscal year, identifying the amount
                    of leverage each rural business investment company has
                    received from the Federal Government and the type of
                    leverage instruments each rural business investment
                    company has used;
                        ``(E) the amount of losses sustained by the Federal
                    Government as a result of operations under this subtitle
                    during the previous fiscal year and an estimate of the
                    total losses that the Federal Government can reasonably
                    expect to incur as a result of the operations during the
                    current fiscal year;
                        ``(F) actions taken by the Secretary to maximize
                    recoupment of funds of the Federal Government expended
                    to implement and administer the Rural Business
                    Investment Program under this subtitle during the
                    previous fiscal year and to ensure compliance with the
                    requirements of this subtitle (including regulations);
                        ``(G) the amount of Federal Government leverage that
                    each licensee received in the previous fiscal year and
                    the types of leverage instruments each licensee used;
                        ``(H) for each type of financing instrument, the
                    sizes, types of geographic locations, and other
                    characteristics of the small business investment
                    companies using the instrument during the previous
                    fiscal year, including the extent to which the
                    investment companies have used the leverage from each
                    instrument to make loans or equity investments in rural
                    areas; and

    [[Page 116 STAT. 399]]

                        ``(I) the actions of the Secretary to carry out this
                    subtitle.
                ``(2) Prohibition.--In compiling the report required under
            paragraph (1), the Secretary may not--
                        ``(A) compile the report in a manner that permits
                    identification of any particular type of investment by
                    an individual rural business investment company or small
                    business concern in which a rural business investment
                    company invests; and
                        ``(B) may not release any information that is
                    prohibited under section 1905 of title 18, United States
                    Code.

    ``SEC. 384L. <<NOTE: 7 USC 2009cc-11.>>  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. <<NOTE: 7 USC 2009cc-12.>>  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.--

    [[Page 116 STAT. 400]]

                ``(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. <<NOTE: 7 USC 2009cc-13.>>  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. <<NOTE: 7 USC 2009cc-14.>>  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.

    [[Page 116 STAT. 401]]

        ``(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 liable in a civil action for
                    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 liable in a civil action
                    for 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.

    ``SEC. 384P. <<NOTE: 7 USC 2009cc-15.>>  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. <<NOTE: 7 USC 2009cc-16.>> CONTRACTING OF FUNCTIONS.

        ``(a) In General.--Notwithstanding any other provision of law, to
    carry out the day-to-day management and operation of the program
    authorized by this subtitle on behalf of the Secretary, the Secretary
    shall enter into an interagency agreement under section 1535 of title
    31, United States Code, with another Federal agency that has
    considerable expertise in operating a program under which capital is
    provided for equity investments in private sector companies.
        ``(b) Funding.--The costs incurred by a Federal agency entering into
    an agreement under subsection (a) shall be reimbursed in accordance with
    section 1535 of title 31, United States Code, from amounts made
    available under section 384S(a)(2).

    ``SEC. 384R. <<NOTE: 7 USC 2009cc-17.>> REGULATIONS.

        ``The Secretary may promulgate such regulations as the Secretary
    considers necessary to carry out this subtitle.

    [[Page 116 STAT. 402]]

    ``SEC. 384S. <<NOTE: 7 USC 2009cc-18.>>  FUNDING.

        ``(a) In General.--Notwithstanding any other provision of law, of
    the funds of the Commodity Credit Corporation, the Secretary shall make
    available--
                ``(1) such sums as may be necessary for the cost of
            guaranteeing $280,000,000 of debentures under this subtitle; and
                ``(2) $44,000,000 to make grants under this subtitle.

        ``(b) Availability of Funds.--Funds transferred under subsection (a)
    shall remain available until expended.''.

    SEC. 6030. RURAL STRATEGIC INVESTMENT PROGRAM.

        The Consolidated Farm and Rural Development Act (as amended by
    section 6029) is amended by adding at the end the following:

                ``Subtitle I--Rural Strategic Investment Program

    ``SEC. 385A. <<NOTE: 7 USC 2009dd.>>  PURPOSE.

        ``The purpose of this subtitle is to establish a rural strategic
    investment program--
                ``(1) to provide rural communities with flexible resources
            to develop comprehensive, collaborative, and locally-based
            strategic planning processes; and
                ``(2) to implement innovative community and economic
            development strategies that optimize regional competitive
            advantages.

    ``SEC. 385B. <<NOTE: 7 USC 2009dd-1.>> DEFINITIONS.

        ``In this subtitle:
                ``(1) Benchmark.--The term `benchmark' means an annual set
            of strategies and goals of a Regional Board established for the
            purpose of measuring performance in meeting the regional plan of
            the Regional Board.
                ``(2) Conference.--The term ``Conference'' means the
            National Conference on Rural America conducted under section
            385H.
                ``(3) Eligible area.--
                        ``(A) In general.--The term `eligible area' means a
                    nonmetropolitan county (as defined by the Secretary)
                    that has a population of 50,000 inhabitants or less.
                        ``(B) Inclusion.--
                              ``(i) In general.--Subject to clause (ii), the
                          term `eligible area' includes an unincorporated or
                          other area of a county that has a population of
                          more than 50,000 inhabitants if the unincorporated
                          area or other area is adjacent to an eligible
                          rural area described in subparagraph (A).
                              ``(ii) Participation.--An area described in
                          clause (i) may be represented on a Regional Board.
                        ``(C) Exclusion.--The term `eligible area' does not
                    include any area designated by the Secretary as a rural
                    empowerment zone or rural enterprise community.
                ``(4) Innovation grant.--The term `innovation grant' means
            an innovation grant made by the National Board to a Regional
            Board under section 385G.

    [[Page 116 STAT. 403]]

                ``(5) National board.--The term `National Board' means the
            National Board on Rural America established under section
            385D(a).
                ``(6) National plan.--The term `national plan' means a
            national strategic investment plan of the National Board
            developed under section 385D(d)(3).
                ``(7) Planning grant.--The term `planning grant' means a
            regional strategic investment planning grant made by the
            National Board to a Regional Board under section 385F.
                ``(8) Program.--The term `program' means the rural strategic
            investment program established under this subtitle.
                ``(9) Region.--The term `region' means the eligible areas
            that--
                        ``(A) are under the jurisdiction of a Regional
                    Board; and
                        ``(B) meet criteria established by the National
                    Board not later than 1 year after the date of enactment
                    of this subtitle.
                ``(10) Regional board.--The term `Regional Board' means a
            Regional Investment Board certified under section 385C(a).
                ``(11) Regional plan.--The term `regional plan' means a
            regional strategic investment plan of a Regional Board developed
            under section 385C(b)(3)(B).

    ``SEC. 385C. <<NOTE: 7 USC 2009dd-2.>>  REGIONAL INVESTMENT BOARDS.

        ``(a) In General.--The National Board may certify a group
    representing the interests described in subsection (b)(2)(A) as a
    Regional Investment Board created to develop and implement a regional
    strategic investment plan for grants made under this subtitle to promote
    investment in eligible areas.
        ``(b) Requirements for Certification.--
                ``(1) In general.--A Regional Board shall meet the
            requirements of this subsection for certification.
                ``(2) Composition.--
                        ``(A) In general.--A Regional Board shall be
                    composed of residents of the region that broadly
                    represent diverse public, nonprofit, and private sector
                    interests in investment in the region, including (to the
                    maximum extent practicable) representatives of--
                              ``(i) units of local government (including
                          multijurisdictional units of local government);
                              ``(ii) in the case of regions with Indian
                          populations, Indian tribes (as defined in section
                          4 of the Indian Self-Determination and Education
                          Assistance Act (25 U.S.C. 450b));
                              ``(iii) private nonprofit community-based
                          development organizations;
                              ``(iv) regional development organizations;
                              ``(v) private business organizations;
                              ``(vi) other entities and organizations, as
                          determined by the Regional Board; and
                              ``(vii) consortia of entities and
                          organizations described in clauses (i) through
                          (vii).
                        ``(B) Local public-private representation.--Of the
                    members of a Regional Board, to the maximum extent
                    practicable--

    [[Page 116 STAT. 404]]

                              ``(i) \1/2\ of the members shall be
                          representatives of units of local government and
                          Indian tribes described in subparagraph (A); and
                              ``(ii) \1/2\ of the members shall be
                          representatives of nonprofit, regional, private,
                          and other entities and organizations described in
                          subparagraph (A).
                        ``(C) Ex-officio members.--
                              ``(i) In general.--An officer or employee of a
                          Federal or State agency may serve as an ex-
                          officio, non-voting member of a Regional Board
                          representing the agency.
                              ``(ii) Conflicts.--Participation by a Federal
                          officer or employee in activities of the Regional
                          Board shall not constitute a violation of section
                          205 or 208 of title 18, United States Code.
                        ``(D) Certification.--To be certified by the
                    National Board, a Regional Board shall demonstrate to
                    the National Board that the Regional Board is broadly
                    representative of the interests described in
                    subparagraph (A).
                        ``(E) Appeals.--
                              ``(i) In general.--Prior to certification of
                          the Regional Board by the National Board,
                          representatives of interests described in
                          subparagraph (A) that participated in the
                          development of a Regional Board may appeal the
                          composition of the Regional Board to the National
                          Board on the ground that--
                                        ``(I) the composition of the
                                    Regional Board does not adequately
                                    reflect the purposes of the program; or
                                        ``(II) the selection process for the
                                    Regional Board unfairly disadvantaged
                                    those interests.
                              ``(ii) Action by national board.--The National
                          Board shall act on any appeal of the composition
                          of a Regional Board before taking action on the
                          certification of the Regional Board.
                ``(3) Duties and purpose.--The organizational documents of
            the proposed Regional Board shall demonstrate that, on
            certification, the Regional Board shall--
                        ``(A) create a collaborative, inclusive public-
                    private planning process;
                        ``(B) develop, and submit to the National Board for
                    approval, a regional strategic investment plan that
                    meets the requirements of section 385F, with benchmarks,
                    to promote investment in eligible areas through the use
                    of grants made available under this subtitle;
                        ``(C) implement the approved regional plan;
                        ``(D) provide <<NOTE: Reports.>> annual reports to
                    the Secretary and the National Board on progress made in
                    achieving the benchmarks of the regional plan, including
                    an annual financial statement; and
                        ``(E) select a non-Federal organization (such as a
                    regional development organization) in the local area
                    served by the Regional Board that has previous
                    experience in the management of Federal funds to serve
                    as fiscal manager of any funds of the Regional Board.

    [[Page 116 STAT. 405]]

    ``SEC. 385D. <<NOTE: 7 USC 2009dd-3.>> NATIONAL BOARD ON RURAL AMERICA.

        ``(a) Establishment.--
                ``(1) In general.--The Secretary shall establish a National
            Board on Rural America to carry out the rural strategic
            investment program established under this subtitle.
                ``(2) Supervision and direction.--Except as otherwise
            provided in this subtitle, the National Board shall be subject
            to the general supervision and direction of the Secretary.

        ``(b) Composition.--
                ``(1) In general.--
                        ``(A) Appointment.--In addition to the Secretary or
                    the designee of the Secretary, the National Board shall
                    consist of 14 members appointed by the Secretary from
                    among--
                              ``(i) representatives of nationally recognized
                          entrepreneurship organizations;
                              ``(ii) representatives of regional planning
                          and development organizations;
                              ``(iii) representatives of community-based
                          organizations;
                              ``(iv) elected members of county governments;
                              ``(v) elected members of State legislatures;
                              ``(vi) representatives of the rural
                          philanthropic community; and
                              ``(vii) representatives of Indian tribes (as
                          defined in section 4 of the Indian Self-
                          Determination and Education Assistance Act (25
                          U.S.C. 450b)).
                        ``(B) Recommendations.--In appointing the members of
                    the National Board under subparagraph (A), the Secretary
                    shall consider recommendations made by--
                              ``(i) the chairman and ranking member of each
                          of the Committee on Agriculture of the House of
                          Representatives and the Committee on Agriculture,
                          Nutrition, and Forestry of the Senate;
                              ``(ii) the Majority Leader of the Senate; and
                              ``(iii) the Speaker of the House of
                          Representatives.
                ``(3) Term of office.--
                        ``(A) In general.--Subject to subparagraph (B), the
                    term of office of a member of the National Board
                    appointed under paragraph (1)(A) shall be 4 years.
                        ``(B) Staggered initial terms.--Of the initial
                    members of the National Board appointed under paragraph
                    (1)(A), the term of office of--
                              ``(i) 5 members shall be 4 years;
                              ``(ii) 5 members shall be 3 years; and
                              ``(iii) 4 members shall be 2 years.
                ``(4) Initial appointments.--Not later than 90 days after
            the date of enactment of this subtitle, the Secretary shall
            appoint the initial members of the National Board under
            paragraph (1)(A).
                ``(5) Ex-officio members.--
                        ``(A) Special assistant to the president for rural
                    policy.--If appointed by the President under section
                    6406(1) of the Farm Security and Rural Investment Act of
                    2002, the Special Assistant to the President for Rural
                    Policy shall serve as an ex-officio, non-voting member
                    of the National Board.

    [[Page 116 STAT. 406]]

                        ``(B) Other members.--In consultation with the
                    chairman and ranking member of each of the Committee on
                    Agriculture of the House of Representatives and the
                    Committee on Agriculture, Nutrition, and Forestry of the
                    Senate, the Secretary may appoint not more than 3 other
                    officers or employees of the Executive Branch to serve
                    as ex-officio, non-voting members of the National Board.
                ``(6) Vacancies.--A vacancy on the National Board shall be
            filled in the same manner as the original appointment.
                ``(7) Compensation.--A member of the National Board shall
            receive no compensation for service on the National Board, but
            shall be reimbursed for travel and other expenses incurred in
            carrying out the duties of the member of the National Board in
            accordance with section 5702 and 5703 of title 5, United States
            Code.
                ``(8) Chairperson.--The National Board shall select a
            chairperson from among the members of the National Board.
                ``(9) Meetings.--
                        ``(A) Time and place.--The National Board shall meet
                    at the call of the chairperson.
                        ``(B) Quorum.--A quorum of the National Board shall
                    consist of a majority of the members.
                        ``(C) Majority vote.--A decision of the National
                    Board shall be made by majority vote.
                ``(10) Federal status.--For purposes of Federal law, a
            member of the National Board shall be considered a special
            Government employee (as defined in section 202(a) of title 18,
            United States Code).
                ``(11) Conflict of interest.--
                        ``(A) In general.--Except as provided in
                    subparagraph (C), no member of the National Board shall
                    vote on any matter respecting any application for a
                    grant or other particular matter pending before the
                    National Board in which, to the knowledge of the member,
                    the member, spouse, or child of the member, partner, or
                    organization in which the member is serving as officer,
                    director, trustee, partner, or employee, or any person
                    or organization with whom the member is negotiating or
                    has any arrangement concerning prospective employment,
                    has a financial interest.
                        ``(B) Violations.--A violation of subparagraph (A)
                    by a member of the National Board shall be cause for
                    removal of the member, but shall not impair or otherwise
                    affect the validity of any otherwise lawful action by
                    the National Board in which the member participated.
                        ``(C) Exception.--Subparagraph (A) shall not apply
                    to the extent a member of the National Board advises the
                    National Board of the nature of the particular matter in
                    which the member proposes to participate, if--
                              ``(i) the member makes a full disclosure of
                          the financial interest; and
                              ``(ii) prior to any participation by the
                          member, the National Board determines, by majority
                          vote of the other members of the National Board,
                          that the financial interest is too remote or too
                          inconsequential to affect the integrity of the
                          services of the member to the National Board in
                          that matter.

    [[Page 116 STAT. 407]]

        ``(c) Administrative Support.--The Secretary, on a reimbursable
    basis, may provide such administrative support to the National Board as
    the Secretary determines is necessary to carry out the duties of the
    National Board.
        ``(d) Duties.--The National Board shall--
                ``(1) certify Regional Boards in accordance with section
            385C, with the initial certification of Regional Boards
            occurring not later than 540 days after the date of enactment of
            this subtitle;
                ``(2) approve, negotiate, or disapprove each regional plan
            that is submitted by a Regional Board to the National Board
            under section 385C;
                ``(3) develop, and submit to the Secretary for approval, a
            national strategic investment plan;
                ``(4) use the amount received from the Secretary under
            section 385E to make planning grants and innovation grants to
            Regional Boards and to otherwise carry out the program;
                ``(5) provide leadership and advice to Regional Boards on
            issues, best practices, and emerging trends relating to rural
            development;
                ``(6) evaluate the progress of each Regional Board in
            achieving the benchmarks of the regional plan using annual
            reports submitted under section 385C(b)(3)(D) and any other
            information that is available to the Regional Board; and
                ``(7) submit an annual report on the performance of Regional
            Boards and the program to--
                        ``(A) the Committee on Agriculture of the House of
                    Representatives;
                        ``(B) the Committee on Agriculture, Nutrition, and
                    Forestry of the Senate; and
                        ``(C) the Secretary.

    ``SEC. 385E. <<NOTE: 7 USC 2009dd-4.>>  RURAL STRATEGIC INVESTMENT
                PROGRAM.

        ``(a) In General.--If the Secretary approves a national strategic
    investment plan submitted by the National Board, of the funds of the
    Commodity Credit Corporation, the Secretary shall transfer to the
    National Board $100,000,000, to remain available until expended, for the
    Board to use to make planning grants and innovation grants to Regional
    Boards and to otherwise carry out this subtitle.
        ``(b) Use by National Board.--Of the amount transferred by the
    Secretary to the National Board under subsection (a), the National Board
    shall use--
                ``(1) not less than $8,000,000 to make planning grants to
            Regional Boards under section 385F;
                ``(2) not less than $87,000,000 to make innovation grants to
            Regional Boards under section 385G; and
                ``(3) the remainder of the funds to carry out section 385H
            and administer this subtitle (other than section 385H).

    ``SEC. 385F. <<NOTE: 7 USC 2009dd-5.>>  REGIONAL STRATEGIC INVESTMENT
                PLANNING GRANTS.

        ``(a) In General.--The National Board shall use amounts made
    available under section 385E(b)(1) to make not fewer than 80 planning
    grants, on a competitive basis, to applicant Regional Boards to develop,
    maintain, evaluate, and report progress on regional strategic investment
    plans in accordance with section 385C and this section.

    [[Page 116 STAT. 408]]

        ``(b) Regional Plans.--A regional plan for a region covered by a
    Regional Board shall, to the maximum extent practicable, cover--
                ``(1) basic infrastructure needs of the region;
                ``(2) basic services within the region;
                ``(3) opportunities for economic diversification and
            innovation within the region, with particular attention to
            entrepreneurial support and innovation;
                ``(4) the current and future human resource capacity of the
            region;
                ``(5) access to market-based financing and venture and
            equity capital in the region;
                ``(6) the development of innovative public and private
            collaborations for investments in the region; and
                ``(7) other appropriate matters, as determined by the
            National Board and the Secretary.

        ``(c) Preferences.--In awarding planning grants, the National Board
    shall give a preference to planning grants that will be used to address
    community capacity building and community sustainability.
        ``(d) Amount.--The total amount of a planning grant made to a
    Regional Board shall not exceed $100,000.
        ``(e) Cost Sharing.--
                ``(1) In general.--Subject to paragraphs (2) and (3), the
            share of the costs of developing, maintaining, evaluating, and
            reporting on a regional plan funded by a grant under this
            section shall not exceed 50 percent.
                ``(2) Form.--
                        ``(A) In general. Except as provided in subparagraph
                    (B), a Regional Board shall pay the grantee share of the
                    costs described in paragraph (1) in the form of cash,
                    services, materials, or other in-kind contributions.
                        ``(B) Limitation.--A grantee shall not pay more than
                    50 percent of the grantee share in the form of services,
                    materials, or other in-kind contributions.
                ``(3) Increased share.--The National Board may increase the
            share of the costs covered by a planning grant made to a
            Regional Board under this section if a limited ability of the
            Regional Board to pay would otherwise create a barrier to full
            participation in the program.

    ``SEC. 385G. <<NOTE: 7 USC 2009dd-6.>>  INNOVATION GRANTS.

        ``(a) In General.--The National Board shall use amounts made
    available under section 385E(b)(2) to make innovation grants, on a
    competitive basis, to Regional Boards to implement projects that are
    identified in the regional plans of the Regional Boards.
        ``(b) Eligibility.--
                ``(1) In general.--For a Regional Board to be eligible to
            receive an innovation grant, the National Board shall determine
            that--
                        ``(A) the regional plan of a Regional Board meets
                    the requirements of this subtitle;
                        ``(B) the management and organizational structure of
                    the Regional Board is sufficient to oversee grant
                    projects;
                        ``(C) the Regional Board will be able to provide the
                    grantee share required under this section; and

    [[Page 116 STAT. 409]]

                        ``(D) the Regional Board agrees to achieve, to the
                    maximum extent practicable, the performance-based
                    benchmarks of the regional plan.
                ``(2) Relationship to planning grants.--A Regional Board
            that meets the requirements of paragraph (1) shall be eligible
            to receive an innovation grant, regardless of whether the
            Regional Board receives a planning grant.

        ``(c) Selection.--Subject to subsection (d), of the applications
    submitted by Regional Boards for innovation grants, the National Board
    shall, to the maximum extent practicable, select not fewer than 30
    regional boards to receive innovation grants.
        ``(d) Preferences.--In awarding innovation grants, the National
    Board shall give a preference (in order of priority) to Regional Boards
    that--
                ``(1) exhibit collaborative innovation and entrepreneurship,
            particularly within a public-private partnership;
                ``(2) represent a broad coalition of interests described in
            section 385C(b)(2)(A);
                ``(3) demonstrate a plan to leverage public (Federal and
            non-federal) and private funds and existing assets, including
            natural assets and public infrastructure;
                ``(4) address gaps in existing basic services within a
            region;
                ``(5) address economic diversification, including
            agricultural and non-agriculturally based economies, within a
            regional framework;
                ``(6) demonstrate a plan to achieve multijurisdictional
            regional planning and development, with particular evidence of
            economic development successes within diverse stakeholder
            frameworks; or
                ``(7) meet other community development needs identified by a
            Regional Board.

        ``(e) Uses.--
                ``(1) Leverage.--A Regional Board shall prioritize projects,
            in part, on the degree to which the Regional Board is able to
            leverage additional funds for the implementation of the
            projects.
                ``(2) Purposes.--A Regional Board may use an innovation
            grant provided for a region--
                        ``(A) to support the development of critical
                    infrastructure necessary to facilitate economic
                    development in the region;
                        ``(B) to provide assistance to entities within the
                    region that provide basic public services;
                        ``(C) to assist with job training, workforce
                    development, or other needs related to the development
                    and maintenance of strong local and regional economies;
                        ``(D) to assist in the development of unique new
                    collaborations that link public, private, and
                    philanthropic resources to achieve collaboratively
                    designed regional advancement; and
                        ``(E) to provide support to business investment.
                ``(3) Other department programs.--A Regional Board may not
            use an innovation grant provided for a region for any purpose
            for which funding may be obtained under any other rural
            development program of the Department of Agriculture unless--
                        ``(A) the Regional Board--

    [[Page 116 STAT. 410]]

                              ``(i) has submitted an application for the
                          funding under the other program; and
                              ``(ii) withdraws the application; and
                        ``(B) the National Board approves use of the
                    innovation grant for that purpose.
                ``(4) Operating expenses.--A Regional Board may use for
            administrative costs in carrying out programs and activities
            related to the grant the greater of--
                        ``(A) $100,000; or
                        ``(B) 5 percent of the amount of an innovation grant
                    provided.

        ``(f) Amount.--
                ``(1) In general.--The amount of an innovation grant made to
            a Regional Board shall not exceed $3,000,000.
                ``(2) Availability.--The amount of an innovation grant made
            to a Regional Board shall remain available until expended.

        ``(g) Cost Sharing.--
                ``(1) In general.--Subject to paragraphs (2) and (3), the
            share of the costs of projects covered by an innovation grant
            made to a Regional Board under this section shall not exceed 75
            percent, as determined by the National Board.
                ``(2) Form.--A Regional Board may pay the grantee share of
            the costs of projects covered by an innovation grant in the form
            of cash or services, materials, or other in-kind contributions.
                ``(3) Waiver of grantee share.--The National Board may waive
            the grantee share of the costs of projects covered by an
            innovation grant made to a Regional Board under this section if
            the National Board determines that such a waiver is appropriate.
                ``(4) Other federal programs.--For the purpose of
            determining grantee share requirements for any other Federal
            programs, funds provided for innovation grants shall be
            considered to be non-Federal funds.

        ``(h) Negotiation.--The National Board may--
                ``(1) negotiate with a Regional Board on the substance,
            size, and scope of a regional plan; and
                ``(2) approve an innovation grant for an amount that is
            lower than the amount requested by the Regional Board.

        ``(i) Noncompliance.--If a Regional Board fails to comply with the
    requirements of this section, the National Board may take such actions
    as are necessary to obtain reimbursement of unused grant funds.
        ``(j) Other Uses.--The National Board may use not more than 5
    percent of the amounts made available for innovation grants--
                ``(1) to provide assistance to interests described in
            section 385C(b)(2)(A) to obtain certification of a Regional
            Board;
                ``(2) to provide assistance for emergent innovative
            opportunities that are not covered by existing regional plans;
                ``(3) to provide technical assistance, research,
            organizational support, and other capacity building
            infrastructure to support existing Regional Boards;
                ``(4) to provide assistance for other entrepreneurial
            opportunities to advance the goals of the program; or
                ``(5) to advance a more integrative rural policy framework
            for the United States.

    [[Page 116 STAT. 411]]

        ``(k) Transfers.--To ensure maximum use of funds provided under this
    subtitle, the National Board may transfer not more than 10 percent of
    the amount of funds made available between planning grants and
    innovation grants.

    ``SEC. 385H. <<NOTE: 7 USC 2009dd-7.>>  NATIONAL CONFERENCE ON RURAL
                AMERICA.

        ``(a) In <<NOTE: President. Deadline.>> General.--The President
    shall call and conduct a National Conference on Rural America, which
    shall be held not earlier than November 1, 2002, and not later than
    October 30, 2004.

        ``(b) Purpose.--The purpose of the Conference shall be to bring
    together the resources of governmental agencies and the private and
    nonprofit sectors to develop--
                ``(1) policy recommendations and integrative strategies for
            addressing the unique challenges facing rural areas of the
            United States; and
                ``(2) an implementation plan, with outcome-based
            measurements, for addressing the challenges.

        ``(c) Composition.--
                ``(1) In general.--The Conference shall be comprised of--
                        ``(A) representatives of organizations devoted to
                    rural development;
                        ``(B) Members of Congress, including the chairman
                    and ranking member of each of the Committee on
                    Agriculture of the House of Representatives and the
                    Committee on Agriculture, Nutrition, and Forestry of the
                    Senate;
                        ``(C) representatives of the Department of
                    Agriculture and other Federal agencies;
                        ``(D) State, local, and tribal elected officials and
                    representatives;
                        ``(E) representatives of colleges and universities,
                    State and tribal extension services, and State rural
                    development councils; and
                        ``(F) individuals with specialized knowledge of and
                    expertise in rural and community development,
                    cooperative business, agricultural credit, venture
                    capital, health care, and rural demography.
                ``(2) Selection.--Of the participants in the Conference
            described in paragraph (1)--
                        ``(A) \1/3\ of <<NOTE: President.>> the members
                    shall be selected by the President;
                        ``(B) \1/3\ of the members shall be selected by the
                    Chairman and the ranking member of the Committee on
                    Agriculture of the House of Representatives; and
                        ``(C) \1/3\ of the members shall be selected by the
                    Chairman and the ranking member of the Committee on
                    Agriculture, Nutrition, and Forestry of the Senate.
                ``(3) Representation.--In selecting the participants of the
            Conference, the President and the Chairman of each Committee
            referred to in paragraph (2) shall ensure, to the maximum extent
            practicable, that the participants are representative of the
            ethnic, racial, and linguistic diversity of rural areas of the
            United States.

        ``(d) Report.--
                ``(1) Report <<NOTE: Deadline.>> to president.--Not later
            than 120 days after the termination of the Conference, the
            Conference shall submit

    [[Page 116 STAT. 412]]

            to the President a report that contains the findings and
            recommendations of the Conference, including findings and
            recommendations to address needs related to--
                        ``(A) telecommunications;
                        ``(B) rural health issues;
                        ``(C) transportation;
                        ``(D) opportunities for economic diversification and
                    innovation within rural America, with particular
                    attention to entrepreneurial support and innovation;
                        ``(E) the current and future human resource capacity
                    of rural America;
                        ``(F) access to market-based financing and venture
                    and equity capital in rural America; and
                        ``(G) the development of innovative public and
                    private collaborations for investments in rural America.
                ``(2) Report <<NOTE: Deadline.>> made public and to
            congress.--Not later than 90 days after receipt by the
            President, the President shall--
                        ``(A) make the report public; and
                        ``(B) transmit to the Committee on Agriculture of
                    the House of Representatives and the Committee on
                    Agriculture, Nutrition, and Forestry of the Senate a
                    copy of the report and a statement of the President
                    containing recommendations for implementing the report.
                ``(3) Publication and distribution.--
                        ``(A) In general.--The Conference shall publish and
                    distribute the report described in paragraph (1).
                        ``(B) Mandatory distribution.--The Conference shall
                    provide a copy of a report published under subparagraph
                    (A), at no cost, to--
                              ``(i) each Federal depository library; and
                              ``(ii) on request, each State, tribal, and
                          local elected official in a rural area of the
                          United States.

        ``(e) Funding.--Not <<NOTE: Deadline.>> later than 180 days after
    the establishment of the National Board, the National Board shall
    transfer not more than $2,000,000 to the Office of the President to
    carry out this section, to remain available until expended.''.

    SEC. 6031. FUNDING OF PENDING RURAL DEVELOPMENT LOAN AND GRANT
                APPLICATIONS.

        (a) Definition of Application.--In this section, the term
    ``application'' does not include an application for a loan or grant
    that, as of the date of enactment of this Act, is in the preapplication
    phase of consideration under regulations of the Secretary of Agriculture
    in effect on the date of enactment of this Act.
        (b) Use of Funds.--Subject to subsection (c), the Secretary of
    Agriculture shall use funds made available under subsection (d) to
    provide funds for applications that are pending on the date of enactment
    of this Act for--
                (1) water or waste disposal grants or direct loans under
            paragraph (1) or (2) of section 306(a) of the Consolidated Farm
            and Rural Development Act (7 U.S.C. 1926(a)); and
                (2) emergency community water assistance grants under
            section 306A of that Act (7 U.S.C. 1926a).

        (c) Limitations.--
                (1) Appropriated amounts.--Funds made available under this
            section shall be available to the Secretary to provide funds

    [[Page 116 STAT. 413]]

            for applications for loans and grants described in subsection
            (b) that are pending on the date of enactment of this Act only
            to the extent that funds for the loans and grants appropriated
            in the annual appropriations Act for fiscal year 2002 have been
            exhausted.
                (2) Program requirements.--The Secretary may use funds made
            available under this section to provide funds for a pending
            application for a loan or grant described in subsection (b) only
            if the Secretary processes, reviews, and approves the
            application in accordance with regulations in effect on the date
            of enactment of this Act.
                (3) Priority.--In providing funding under this section for
            pending applications for loans or grants described in subsection
            (b), the Secretary shall provide funding in the following order
            of priority (until funds made available under this section are
            exhausted):
                        (A) Pending applications for water systems.
                        (B) Pending applications for waste disposal systems.

        (d) Funding.--Notwithstanding any other provision of law, of the
    funds of the Commodity Credit Corporation, the Secretary shall use
    $360,000,000 to carry out this section, to remain available until
    expended.

                  Subtitle B--Rural Electrification Act of 1936

    SEC. 6101. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR
                TELEPHONE PURPOSES.

        (a) In General.--The Rural Electrification Act of 1936 is amended by
    inserting after section 313 (7 U.S.C. 940c) the following:

    ``SEC. 313A. <<NOTE: 7 USC 940c-1.>>  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 to make loans for any electrification or telephone
    purpose eligible for assistance under this Act, including section 4 or
    201 or to refinance bonds or notes issued for such purposes.
        ``(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--

    [[Page 116 STAT. 414]]

                        ``(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 would
                    not be investment grade quality without a guarantee; or
                        ``(C) the lender has not provided to the Secretary a
                    list of loan amounts approved by the lender that the
                    lender certifies are for eligible purposes 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 to 5 per year.
                ``(3) Department opinion.--On the timely request of a
            lender, the General Counsel of the Department of Agriculture
            shall provide the Secretary with an opinion regarding the

    [[Page 116 STAT. 415]]

            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, 2007.''.
        (b) Administration.-- <<NOTE: 7 USC 940c-1 note. Deadline.>>
                (1) Regulations.--Not later than 180 days after the date of
            enactment of this Act, the Secretary of Agriculture shall
            promulgate regulations to carry out the amendments made by this
            section.
                (2) Implementation.--Not later than 240 days after the date
            of enactment of this Act, the Secretary shall implement the
            amendment made by this section.

    SEC. 6102. EXPANSION OF 911 ACCESS.

        Title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 et
    seq.) is amended by adding at the end the following:

    ``SEC. 315. <<NOTE: 7 USC 940e.>>  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 borrowers of loans made by the Rural Utilities Service,
    State or local governments, Indian tribes (as defined in section 4 of
    the Indian Self-Determination and Education Assistance Act (25 U.S.C.
    450b)), or other public entities for facilities and equipment to expand
    or improve 911 access and integrated emergency communications systems in
    rural areas.
        ``(b) 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 2007.''.

    SEC. 6103. ENHANCEMENT OF ACCESS TO BROADBAND SERVICE IN RURAL AREAS.

        (a) In General.--The Rural Electrification Act of 1936 (7 U.S.C. 901
    et seq.) is amended by adding at the end the following:

                       ``TITLE VI--RURAL BROADBAND ACCESS

    ``SEC. 601. <<NOTE: Loans. 7 USC 950bb.>>  ACCESS TO BROADBAND
                TELECOMMUNICATIONS SERVICES IN RURAL AREAS.

        ``(a) Purpose.--The purpose of this section is to provide loans and
    loan guarantees to provide funds for the costs of the construction,
    improvement, and acquisition of facilities and equipment for broadband
    service in 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

    [[Page 116 STAT. 416]]

            service to originate and receive high-quality voice, data,
            graphics, and 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) Loans and Loan Guarantees.--
                ``(1) In general.--The Secretary shall make or guarantee
            loans to eligible entities described in subsection (d) to
            provide funds for the construction, improvement, or acquisition
            of facilities and equipment for the provision of broadband
            service in eligible rural communities.
                ``(2) Priority.--In making or guaranteeing loans under
            paragraph (1), the Secretary shall give priority to eligible
            rural communities in which broadband service is not available to
            residential customers.

        ``(d) Eligible Entities.--
                ``(1) In general.--To be eligible to obtain a loan or loan
            guarantee under this section, an entity shall--
                        ``(A) have the ability to furnish, improve, or
                    extend a broadband service to an eligible rural
                    community; and
                        ``(B) submit to the Secretary a proposal for a
                    project that meets the requirements of this section.
                ``(2) State and local governments.--A State or local
            government (including any agency, subdivision, or
            instrumentality thereof (including consortia thereof)) shall be
            eligible for a loan or loan guarantee under this section to
            provide broadband services to an eligible rural community only
            if, not later than 90 days after the Administrator has
            promulgated regulations to carry out this section, no other
            eligible entity is already offering, or has committed to offer,
            broadband services to the eligible rural community.
                ``(3) Subscriber lines.--An entity shall not be eligible to
            obtain a loan or loan guarantee under this section if the entity
            serves more than 2 percent of the telephone subscriber lines
            installed in the aggregate in the United States.

        ``(e) 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).
        ``(f) Technological Neutrality.--For purposes of determining whether
    or not to make a loan or loan guarantee for a project under this
    section, the Secretary shall use criteria that are technologically
    neutral.
        ``(g) Terms and Conditions for Loans and Loan Guarantees.--
    Notwithstanding any other provision of law, a loan or loan guarantee
    under subsection (c) shall--
                ``(1) bear interest at an annual rate of, as determined by
            the Secretary--
                        ``(A) in the case of a direct loan--

    [[Page 116 STAT. 417]]

                              ``(i) the cost of borrowing to the Department
                          of the Treasury for obligations of comparable
                          maturity; or
                              ``(ii) 4 percent; and
                        ``(B) in the case of a guaranteed loan, the current
                    applicable market rate for a loan of comparable
                    maturity; and
                ``(2) 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.

        ``(h) Use of Loan Proceeds to Refinance Loans for Deployment of
    Broadband Service.--Notwithstanding any other provision of this Act, the
    proceeds of any loan made or guaranteed by the Secretary under this Act
    may be used by the recipient of the loan for the purpose of refinancing
    an outstanding obligation of the recipient on another telecommunications
    loan made under this Act if the use of the proceeds for that purpose
    will further the construction, improvement, or acquisition of facilities
    and equipment for the provision of broadband service in eligible rural
    communities.
        ``(i) Reports.--Not later than 1 year <<NOTE: Deadline.>> after the
    date of enactment of this section, and biennially thereafter, the
    Administrator shall submit to Congress a report that--
                ``(1) describes how the Administrator determines under
            subsection (a)(1) that a service enables a subscriber to
            originate and receive high-quality voice, data, graphics, and
            video; and
                ``(2) provides a detailed list of services that have been
            granted assistance under this section.

        ``(j) Funding.--
                ``(1) In general.--Notwithstanding any other provision of
            law, of the funds of the Commodity Credit Corporation, the
            Secretary shall make available to carry out this section--
                        ``(A) $20,000,000 for each of fiscal years 2002
                    through 2005, to remain available until expended; and
                        ``(B) $10,000,000 for each of fiscal years 2006 and
                    2007, to remain available until expended.
                ``(2) Television funds.--
                        ``(A) In general.--The Secretary shall be entitled
                    to receive, shall accept, and shall use to carry out
                    this section, without further appropriation any funds
                    made available under section 1011(a)(2)(B) of the
                    Launching Our Communities' Access to Local Television
                    Act of 2000 (47 U.S.C. 1109(a)(2)(B)).
                        ``(B) Use of television funds.--The Secretary shall
                    use any funds received under subparagraph (A) in equal
                    amounts for each remaining fiscal year on receipt of the
                    funds (including the fiscal year of receipt) through
                    fiscal year 2007.
                ``(3) Authorization of appropriations.--In addition to funds
            otherwise made available under this subsection, there are
            authorized to be appropriated such sums as necessary to carry
            out this section for each of fiscal years 2003 through 2007.
                ``(4) Allocation of funds.--
                        ``(A) In general.--From amounts made available for
                    each fiscal year under this subsection, the Secretary
                    shall--

    [[Page 116 STAT. 418]]

                              ``(i) establish a national reserve for loans
                          and loan guarantees to eligible entities in States
                          under this section; and
                              ``(ii) allocate amounts in the reserve to each
                          State for each fiscal year for loans and loan
                          guarantees to eligible entities in the State.
                        ``(B) Amount.--The amount of an allocation made to a
                    State for a fiscal year under subparagraph (A) shall
                    bear the same ratio to the amount of allocations made
                    for all States for the fiscal year as 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 latest
                    available census.
                        ``(C) Unobligated amounts.--Any amounts in the
                    reserve established for a State for a fiscal year under
                    subparagraph (B) that are not obligated by April 1 of
                    the fiscal year shall be available to the Secretary to
                    make loans and loan guarantees under this section to
                    eligible entities in any State, as determined by the
                    Secretary.

        ``(k) Termination of Authority.--No loan or loan guarantee may be
    made under this section after September 30, 2007.''.
        (b) <<NOTE: 7 USC 950bb note.>>  Regulations.--
                (1) In <<NOTE: Deadline.>> general.--Not later than 180 days
            after the date of enactment of this Act, the Secretary of
            Agriculture shall promulgate such regulations as are necessary
            to implement the amendment made by subsection (a).
                (2) Procedure.--The promulgation of the regulations shall be
            made without regard to--
                        (A) the notice and comment provisions of section 553
                    of title 5, United States Code;
                        (B) the Statement of Policy of the Secretary of
                    Agriculture effective July 24, 1971 (36 Fed. Reg.
                    13804), relating to notices of proposed rulemaking and
                    public participation in rulemaking; and
                        (C) chapter 35 of title 44, United States Code
                    (commonly known as the ``Paperwork Reduction Act'').
                (3) Congressional review of agency rulemaking.--In carrying
            out this subsection, the Secretary shall use the authority
            provided under section 808 of title 5, United States Code.

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

    SEC. 6201. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION
                CORPORATION.

        (a) Repeal of Corporation Authorization.--Subtitle G of title XVI of
    the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C.
    5901 et seq.) is repealed.
        (b) Disposition <<NOTE: 7 USC 5901 note.>> of Assets.--On the date
    of enactment of this Act--
                (1) the assets, both tangible and intangible, 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

    [[Page 116 STAT. 419]]

            Commercialization Revolving Fund as of the date of enactment of
            this Act, are transferred to the Secretary of Agriculture; and
                (2) notwithstanding the Federal Property and Administrative
            Services Act of 1949 (40 U.S.C. 471 et seq.) and any other law
            that prescribes procedures for procurement, use, and disposal of
            property by a Federal agency, the Secretary shall have authority
            to manage and dispose of the assets transferred under paragraph
            (1) in a manner that, to the maximum extent practicable,
            provides the best value to the Federal Government.

        (c) Use of <<NOTE: 7 USC 5901 note.>> Assets.--
                (1) In general.--Funds transferred under subsection (b), and
            any income from assets or proceeds from the sale of assets
            transferred under subsection (b), shall be deposited in an
            account in the Treasury, and shall remain available to the
            Secretary until expended, without further appropriation, to
            pay--
                        (A) any claims against, or obligations of, the
                    Corporation; and
                        (B) the costs incurred by the Secretary in carrying
                    out this section.
                (2) Final disposition.--On final disposition of all assets
            transferred under subsection (b), any funds remaining in the
            account described in paragraph (1) shall be transferred into
            miscellaneous receipts in the Treasury.

        (d) Conforming Amendments.--
                (1) Section 5315 of title 5, United States Code, <<NOTE: 5
            USC 5315.>> is amended by striking ``Executive Director of the
            Alternative Agricultural Research and Commercialization
            Corporation''.
                (2) Section 730 of the Federal Agriculture Improvement and
            Reform Act of 1996 (7 U.S.C. 5902 note; Public Law 104-127) is
            repealed.
                (3) Section 211(b) of the Department of Agriculture
            Reorganization Act of 1994 (7 U.S.C. 6911(b)) is amended by
            striking paragraph (5).
                (4) Section 404(d) of the Agricultural Research, Extension,
            and Education Reform Act of 1998 (7 U.S.C. 7624(d)) is amended--
                        (A) by striking paragraph (2); and
                        (B) by redesignating paragraphs (3) and (4) as
                    paragraphs (2) and (3), respectively.
                (5) The Herger-Feinstein Quincy Library Group Forest
            Recovery Act (16 U.S.C. 2104; Public Law 105-277; 112 Stat.
            2681-305) is amended by striking subsection (m).
                (6) Section 9101(3) of title 31, United States
            Code, <<NOTE: 31 USC 9101.>>  is amended by striking
            subparagraph (Q).

    SEC. 6202. RURAL ELECTRONIC COMMERCE EXTENSION PROGRAM.

        Subtitle H of title XVI of the Food, Agriculture, Conservation, and
    Trade Act of 1990 is amended by inserting after section 1669 (7 U.S.C.
    5922) the following:

    ``SEC. 1670. <<NOTE: 7 USC 5923.>> RURAL ELECTRONIC COMMERCE EXTENSION
                PROGRAM.

        ``(a) Definitions.--In this section:
                ``(1) Development center.--The term `development center'
            means--
                        ``(A) the North Central Regional Center for Rural
                    Development;

    [[Page 116 STAT. 420]]

                        ``(B) the Northeast Regional Center for Rural
                    Development or its designee;
                        ``(C) the Southern Rural Development Center; and
                        ``(D) the Western Rural Development Center or its
                    designee.
                ``(2) Extension program.--The term `extension program' means
            the rural electronic commerce extension program established
            under subsection (b).
                ``(3) Microenterprise.--The term `microenterprise' means a
            commercial enterprise that has 5 or fewer employees, 1 or more
            of whom own the enterprise.
                ``(4) Secretary.--The term `Secretary' means the Secretary
            of Agriculture, acting through the Administrator of the
            Cooperative State Research, Education, and Extension Service.
                ``(5) Small business.--The term `small business' has the
            meaning given the term `small-business concern' by section 3(a)
            of the Small Business Act (15 U.S.C. 632(a)).

        ``(b) Establishment.--The Secretary shall establish a rural
    electronic commerce extension program to expand and enhance electronic
    commerce practices and technology to be used by small businesses and
    microenterprises in rural areas.
        ``(c) Grants.--
                ``(1) In general.--The Secretary shall carry out the program
            established under subsection (b) by making--
                        ``(A) grants to each of the development centers; and
                        ``(B) competitive grants to land-grant colleges and
                    universities (or consortia of land-grant colleges and
                    universities) and to colleges and universities
                    (including community colleges) with agricultural or
                    rural development programs--
                              ``(i) to develop and facilitate innovative
                          rural electronic commerce business strategies; and
                              ``(ii) to assist small businesses and
                          microenterprises in identifying, adapting,
                          implementing, and using electronic commerce
                          business practices and technologies.
                ``(2) Eligibility.--The selection criteria established for
            grants awarded under paragraph (1)(B) shall include--
                        ``(A) the ability of an applicant to provide
                    training and education on best practices, technology
                    transfer, adoption, and use of electronic commerce in
                    rural communities by small businesses and
                    microenterprises;
                        ``(B) the extent and geographic diversity of the
                    area served by the proposed project or activity under
                    the extension program;
                        ``(C) in the case of a land-grant college or
                    university, the extent of participation of the land-
                    grant college or university in the extension program
                    (including any economic benefits that would result from
                    that participation);
                        ``(D) the percentage of funding and in-kind
                    commitments from non-Federal sources that would be
                    needed by and available for a proposed project or
                    activity under the extension program; and
                        ``(E) the extent of participation of low-income and
                    minority businesses or microenterprises in a proposed
                    project or activity under the extension program.
                ``(3) Non-federal share.--

    [[Page 116 STAT. 421]]

                        ``(A) In general.--As a condition of the receipt of
                    funds under this section, a development center or grant
                    applicant shall agree to obtain from non-Federal sources
                    (including State, local, nonprofit, or private sector
                    sources) contributions of an amount equal to 50 percent
                    of the grant amount.
                        ``(B) Form.--The non-Federal share required under
                    subparagraph (A) may be provided in the form of in-kind
                    contributions.
                        ``(C) Exception.--The non-Federal share required
                    under subparagraph (A) may be reduced to 25 percent if
                    the grant recipient serves low-income or minority-owned
                    businesses or microenterprises, as determined by the
                    Secretary.

        ``(d) Report.--Not <<NOTE: Deadline.>> later than 2 years after the
    date of enactment of this section, the Secretary shall submit to the
    Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    that describes--
                ``(1) the policies, practices, and procedures used to assist
            rural communities in efforts to adopt and use electronic
            commerce techniques; and

        ``(e) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $60,000,000 for each of fiscal
    years 2002 through 2007, of which not less than \1/3\ of the amount made
    available for each fiscal year shall be used to carry out activities
    under subsection (c)(1)(A).''.

    SEC. 6203. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN RURAL AREAS.

        (a) In General.--Section 2335A of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa-5) is amended by
    striking ``2002'' and inserting ``2007''.
        (b) Conforming Amendment.--Section 1(b) of Public Law 102-551 (7
    U.S.C. 950aaa note) is amended by striking ``1997'' and inserting
    ``2007''.

                 Subtitle D--SEARCH Grants for Small Communities

    SEC. 6301. <<NOTE: 7 USC 2009ee.>>  DEFINITIONS.

        In this subtitle:
                (1) Council.--The term ``council'' means an independent
            citizens' council established by a State rural development
            director under section 6302(c).
                (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 applicable
                          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 State rural development

    [[Page 116 STAT. 422]]

            director, in coordination with the environmental protection
            director of the State.
                (4) SEARCH grant.--The term ``SEARCH grant'' means a grant
            awarded under section 6302(f).
                (5) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.
                (6) Small community.--The term ``small community'' means an
            incorporated or unincorporated rural community with a population
            of 2,500 inhabitants or less.
                (7) State.--The term ``State'' has the meaning given the
            term in section 381A of the Consolidated Farm and Rural
            Development Act (7 U.S.C. 2009).

    SEC. 6302. <<NOTE: 7 USC 2009ee-1.>>  SEARCH GRANT PROGRAM.

        (a) In General.--The Secretary, in coordination with the
    Administrator of the Environmental Protection Agency, may establish the
    SEARCH grant program.
        (b) Allocation to State Rural Development Directors.--
                (1) In <<NOTE: Deadline.>> general.--Subject to paragraph
            (2) and section 6304(a)(2), not later than 60 days after the
            date on which the Director of the Office of Management and
            Budget apportions any amounts made available under this subtitle
            for any of fiscal years 2002 through 2007, the Secretary, on
            request of a State rural development director (in coordination
            with the environmental protection director of the State), shall
            allocate to the State rural development director an amount not
            to exceed $1,000,000, to be used by the State rural development
            director to award SEARCH grants under subsection (d).
                (2) Grants to states.--The total amount of funds allocated
            to State rural development directors in all States other than
            Alaska, Hawaii, or the 48 contiguous States for a fiscal year
            under this subsection shall not exceed $1,000,000.

        (c) Independent Citizens' Council.--
                (1) Establishment.--The State rural development director of
            a State shall establish an independent citizens' council to
            carry out the duties described in this section.
                (2) Composition.--
                        (A) In general.--A council shall be composed of 9
                    members, appointed by the State rural development
                    director, in coordination with the environmental
                    protection director of the State.
                        (B) Representation; residence.--Each member of a
                    council shall--
                              (i) represent an individual region of the
                          State, as determined by the State rural
                          development director; and
                              (ii) reside in a small community in the State.

        (d) 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--
                (1) needs funds to carry out initial feasibility or
            environmental studies as required by Federal or State law before
            applying to traditional funding sources; and
                (2) demonstrates that the small community has been unable to
            obtain sufficient funding from traditional funding sources.

    [[Page 116 STAT. 423]]

        (e) Applications.--To be eligible to receive a SEARCH grant, a small
    community in a State shall submit to the State rural development
    director of the State an application that includes--
                (1) a description of the proposed environmental project
            (including an explanation of how the project would assist the
            small community in complying with a Federal or State
            environmental law (including a regulation);
                (2) an explanation of why the project is important to the
            small community;
                (3) a description of all actions taken with respect to the
            project as of the date of the application, including any attempt
            to secure funding; and
                (4) a description of demonstrated need for funding for the
            project.

        (f) Awards.--
                (1) In <<NOTE: Deadline.>> general.--Not later than May 1 of
            each fiscal year, a State rural development director, in
            coordination with the council and the environmental protection
            director of the State, shall--
                        (A) review all applications received by the State
                    rural development director under subsection (e); and
                        (B) award SEARCH grants to small communities based
                    on--
                              (i) an evaluation of whether the proposed
                          project meets the eligibility criteria under
                          subsection (d); and
                              (ii) the content of the application.
                (2) Administration.--In awarding a SEARCH grant, a State
            rural development director--
                        (A) shall award the funds for any recommended
                    environmental project in a timely and expeditious
                    manner; and
                        (B) shall not award a SEARCH grant to a grantee or
                    project in violation of any Federal or State law
                    (including a regulation).
                (3) Matching requirement.--A small community that receives a
            SEARCH grant under this section may be required to provide
            matching funds.

        (g) Unexpended Funds.--
                (1) In <<NOTE: Deadline.>> general.--If, for any fiscal
            year, any unexpended funds remain after SEARCH grants are
            awarded by a State rural development director under subsection
            (f), the State rural development director, in coordination with
            the environmental protection director of the State, may repeat
            the application and review process so that any remaining funds
            are recommended for award, and awarded, not later than July 30
            of the fiscal year.
                (2) Retention of funds.--
                        (A) In general.--Any unexpended funds that are not
                    awarded under subsection (f) or paragraph (1) shall be
                    retained by the State rural development director for
                    award during the following fiscal year.
                        (B) Limitation.--A State SEARCH account that
                    accumulates a balance of unexpended funds described in
                    subparagraph (A) in excess of $2,000,000 shall be
                    ineligible to receive additional funds for SEARCH grants
                    until such time as the State rural development director
                    awards grants in the amount of the excess.

    [[Page 116 STAT. 424]]

    SEC. 6303. <<NOTE: Deadline. 7 USC 2009ee-2.>>  REPORT.

        Not later than 30 days after the end of the first fiscal year for
    which SEARCH grants are awarded, and annually thereafter, the Secretary
    shall submit to the Committee on Energy and Commerce and the Committee
    on Agriculture of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate a report that--
                (1) describes the 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 previous fiscal year.

    SEC. 6304. <<NOTE: 7 USC 2009ee-3.>>  FUNDING.

        (a) Allocation to State Rural Development Directors.--
                (1) Authorization of appropriations.--There is authorized to
            be appropriated to carry out section 6302(b) $51,000,000 for
            each of fiscal years 2002 through 2007, of which not to exceed
            $1,000,000 shall be used to make grants under section
            6302(b)(2).
                (2) Actual appropriation.--If funds to carry out section
            6302(b) are made available for a fiscal year in an amount that
            is less than the amount authorized under paragraph (1) for the
            fiscal year, the Secretary shall divide the appropriated funds
            for the fiscal year equally among the 50 States.

        (b) Other Expenses.--There are authorized to be appropriated such
    sums as are necessary to carry out this subtitle (other than section
    6302(b)).

                            Subtitle E--Miscellaneous

    SEC. 6401. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

        (a) In General.--Section 231 of the Agricultural Risk Protection Act
    of 2000 (7 U.S.C. 1621 note; Public Law 106-224) is amended--
                (1) by redesignating subsections (b) through (d) as
            subsections (c) through (e), respectively;
                (2) by striking subsection (a) and inserting the following:

        ``(a) Definition of Value-Added Agricultural Product.--
                ``(1) In general.--The term `value-added agricultural
            product' means any agricultural commodity or product that--
                        ``(A)(i) has undergone a change in physical state;
                        ``(ii) was produced in a manner that enhances the
                    value of the agricultural commodity or product, as
                    demonstrated through a business plan that shows the
                    enhanced value, as determined by the Secretary; or

    [[Page 116 STAT. 425]]

                        ``(iii) is physically segregated in a manner that
                    results in the enhancement of the value of the
                    agricultural commodity or product; and
                        ``(B) as a result of the change in physical state or
                    the manner in which the agricultural commodity or
                    product was produced or segregated--
                              ``(i) the customer base for the agricultural
                          commodity or product has been expanded; and
                              ``(ii) a greater portion of the revenue
                          derived from the marketing, processing, or
                          physical segregation of the agricultural commodity
                          or product is available to the producer of the
                          commodity or product.
                ``(2) Inclusion.--The term `value-added agricultural
            product' includes farm- or ranch-based renewable energy.

        ``(b) Grant Program.--
                ``(1) In general.--From amounts made available under
            paragraph (4), the Secretary shall 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) in developing a business plan for viable
                          marketing opportunities for the value-added
                          agricultural product; or
                              ``(ii) in developing strategies that are
                          intended to create marketing opportunities for the
                          producer; and
                        ``(B) to an eligible agricultural producer group,
                    farmer or rancher cooperative, or majority-controlled
                    producer-based business venture (as determined by the
                    Secretary) to assist the entity--
                              ``(i) in developing a business plan for viable
                          marketing opportunities in emerging markets for a
                          value-added agricultural product; or
                              ``(ii) in developing strategies that are
                          intended to create marketing opportunities in
                          emerging markets for the value-added agricultural
                          product.
                ``(2) Amount of grant.--
                        ``(A) In general.--The total amount provided under
                    this subsection to a grant recipient shall not exceed
                    $500,000.
                        ``(B) Majority-controlled producer-based business
                    ventures.--The amount of grants provided to majority-
                    controlled producer-based business ventures under
                    paragraph (1)(B) for a fiscal year may not exceed 10
                    percent of the amount of funds that are used to make
                    grants for the fiscal year under this subsection.
                ``(3) Grantee strategies.--A grantee 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 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.
                ``(4) Funding.--Not <<NOTE: Deadline.>> later than 30 days
            after the date of enactment of this paragraph, on October 1,
            2002, and on each October 1 thereafter through October 1, 2006,
            of the funds

    [[Page 116 STAT. 426]]

            of the Commodity Credit Corporation, the Secretary shall make
            available to carry out this subsection $40,000,000, to remain
            available until expended.'';
                (3) in subsection (c)(1) (as redesignated by paragraph
            (1))--
                        (A) by striking ``subsection (a)(2)'' and inserting
                    ``subsection (b)(2)'';
                        (B) by striking ``$5,000,000'' and inserting ``5
                    percent''; and
                        (C) by striking ``subsection (a)'' and inserting
                    ``subsection (b)''; and
                (4) in subsection (d) (as redesignated by paragraph (1)), by
            striking ``subsections (a) and (b)'' and inserting ``subsections
            (b) and (c)''.

        (b) <<NOTE: 7 USC 1621 note.>>  Applicability.--
                (1) In general.--Except <<NOTE: Effective date.>> as
            provided in paragraph (2), the amendments made by subsection (a)
            apply beginning on October 1, 2002.
                (2) Funding.--Funds <<NOTE: Deadline.>> made available under
            section 231(b)(4)(A)(i) of the Agricultural Risk Protection Act
            of 2000 (as amended by subsection (a)(2)) shall be made
            available not later than 30 days after the date of enactment of
            this Act.

    SEC. 6402. <<NOTE: 7 USC 1621 note.>> AGRICULTURE INNOVATION CENTER
                DEMONSTRATION PROGRAM.

        (a) Purpose.--The purpose of this section is to direct the Secretary
    of Agriculture to establish a demonstration program under which
    agricultural producers are provided--
                (1) technical assistance, consisting of engineering
            services, applied research, scale production, and similar
            services, to enable the agricultural producers to establish
            businesses to produce value-added agricultural commodities or
            products;
                (2) assistance in marketing, market development, and
            business planning; and
                (3) organizational, outreach, and development assistance to
            increase the viability, growth, and sustainability of businesses
            that produce value-added agricultural commodities or products.

        (b) Definitions.--In this section:
                (1) Program.--The term ``Program'' means the Agriculture
            Innovation Center Demonstration Program established under
            subsection (c).
                (2) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.

        (c) Establishment of Program.--The Secretary shall establish a
    demonstration program, to be known as the ``Agriculture Innovation
    Center Demonstration Program'' under which the Secretary shall--
                (1) make <<NOTE: Grants.>> grants to assist eligible
            entities in establishing Agriculture Innovation Centers to
            enable agricultural producers to obtain the assistance described
            in subsection (a); and
                (2) provide assistance to eligible entities in establishing
            Agriculture Innovation Centers through the research and
            technical services of the Department of Agriculture.

        (d) Eligibility Requirements.--
                (1) In general.--An entity shall be eligible for a grant and
            assistance described in subsection (c) to establish an
            Agriculture Innovation Center if--

    [[Page 116 STAT. 427]]

                        (A) the entity--
                              (i) has provided services similar to the
                          services described in subsection (a); or
                              (ii) demonstrates the capability of providing
                          such services;
                        (B) the application of the entity for the grant and
                    assistance includes a plan, in accordance with
                    regulations promulgated by the Secretary, that
                    outlines--
                              (i) the support for the entity in the
                          agricultural community;
                              (ii) the technical and other expertise of the
                          entity; and
                              (iii) the goals of the entity for increasing
                          and improving the ability of local agricultural
                          producers to develop markets and processes for
                          value-added agricultural commodities or products;
                        (C) the entity demonstrates that adequate resources
                    (in cash or in kind) are available, or have been
                    committed to be made available, to the entity, to
                    increase and improve the ability of local agricultural
                    producers to develop markets and processes for value-
                    added agricultural commodities or products; and
                        (D) the Agriculture Innovation Center of the entity
                    has a board of directors established in accordance with
                    paragraph (2).
                (2) Board <<NOTE: Establishment.>> of directors.--Each
            Agriculture Innovation Center of an eligible entity shall have a
            board of directors composed of representatives of each of the
            following groups:
                        (A) The 2 general agricultural organizations with
                    the greatest number of members in the State in which the
                    eligible entity is located.
                        (B) The department of agriculture, or similar State
                    department or agency, of the State in which the eligible
                    entity is located.
                        (C) Entities representing the 4 highest grossing
                    commodities produced in the State, determined on the
                    basis of annual gross cash sales.

        (e) Grants and Assistance.--
                (1) In general.--Subject to subsection (i), under the
            Program, the Secretary shall make, on a competitive basis,
            annual grants to eligible entities.
                (2) Maximum amount of grants.--A grant under paragraph (1)
            shall be in an amount that does not exceed the lesser of--
                        (A) $1,000,000; or
                        (B) twice the dollar amount of the resources (in
                    cash or in kind) that the eligible entity demonstrates
                    are available, or have been committed to be made
                    available, to the eligible entity in accordance with
                    subsection (d)(1)(C).
                (3) Maximum number of grants.--
                        (A) First fiscal year of program.--In the first
                    fiscal year of the Program, the Secretary shall make
                    grants to not more than 5 eligible entities.
                        (B) Second fiscal year of program.--In the second
                    fiscal year of the Program, the Secretary may make
                    grants to--

    [[Page 116 STAT. 428]]

                              (i) the eligible entities to which grants were
                          made under subparagraph (A); and
                              (ii) not more than 10 additional eligible
                          entities.
                (4) State limitation.--
                        (A) In general.--Subject to subparagraph (B), in the
                    first 3 fiscal years of the Program, the Secretary shall
                    not make a grant under the Program to more than 1 entity
                    in any 1 State.
                        (B) Collaboration.--Nothing in subparagraph (A)
                    precludes a recipient of a grant under the Program from
                    collaborating with any other institution with respect to
                    activities conducted using the grant.

        (f) Use of Funds.--An eligible entity to which a grant is made under
    the Program may use the grant only for the following purposes (but only
    to the extent that the use is not described in section 231(d) of the
    Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note; Public Law
    106-224)):
                (1) Applied research.
                (2) Consulting services.
                (3) Hiring of employees, at the discretion of the board of
            directors of the Agriculture Innovation Center of the eligible
            entity.
                (4) The making of matching grants, each of which shall be in
            an amount not to exceed $5,000, to agricultural producers,
            except that the aggregate amount of all such matching grants
            made by the eligible entity shall be not more than $50,000.
                (5) Legal services.
                (6) Any other related cost, as determined by the Secretary.

        (g) Research on Effects on the Agricultural Sector.--
                (1) In general.--Of the amount made available under
            subsection (i) for each fiscal year, the Secretary shall use
            $300,000 to support research at a university concerning the
            effects of projects for value-added agricultural commodities or
            products on agricultural producers and the commodity markets.
                (2) Research elements.--Research under paragraph (1) shall
            systematically examine, using linked, long-term, global
            projections of the agricultural sector, the potential effects of
            projects described in subparagraph (A) on--
                        (A) demand for agricultural commodities;
                        (B) market prices;
                        (C) farm income; and
                        (D) Federal outlays on commodity programs.

        (h) Report to Congress.--
                (1) In <<NOTE: Deadline.>> general.--Not later than 3 years
            after the date on which the last of the first 10 grants is made
            under the Program, 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--
                        (A) the effectiveness of the Program in improving
                    and expanding the production of value-added agricultural
                    commodities or products; and
                        (B) the effects of the Program on the economic
                    viability of agricultural producers.
                (2) Required elements.--The report under paragraph (1)
            shall--

    [[Page 116 STAT. 429]]

                        (A) include a description of the best practices and
                    innovations found at each of the Agriculture Innovation
                    Centers established under the Program; and
                        (B) specify the number and type of activities
                    assisted, and the type of assistance provided, under the
                    Program.

        (i) Funding.--Of the amount made available under section 231(a)(1)
    of the Agricultural Risk Protection Act of 2000 (7 U.S.C. 1621 note;
    Public Law 106-224) for each fiscal year, the Secretary shall use to
    carry out this section--
                (1) not less than $3,000,000 for fiscal year 2002; and
                (2) not less than $6,000,000 for each of fiscal years 2003
            and 2004.

    SEC. 6403. FUND FOR RURAL AMERICA.

        (a) In General.--Section 793 of the Federal Agriculture Improvement
    and Reform Act of 1996 (7 U.S.C. 2204f) is repealed.
        (b) Conforming Amendment.--Section 2(b)(8)(B) of the Competitive,
    Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(8)(B)) is
    amended in the second sentence by striking ``smaller college or
    university (as described in section 793(c)(2)(ii) of the Federal
    Agriculture Improvement and Reform Act of 1996 (7 U.S.C.
    2204f(c)(2)(ii))'' and inserting ``college, university, or research
    foundation maintained by a college or university that ranks in the
    lowest \1/3\ of such colleges, universities, and research foundations on
    the basis of Federal research funds received''.

    SEC. 6404. RURAL LOCAL TELEVISION BROADCAST SIGNAL LOAN GUARANTEES.

        (a) In General.--Section 1011(a) of the Launching Our Communities'
    Access to Local Television Act of 2000 (47 U.S.C. 1109(a)) is amended--
                (1) by striking ``For'' and inserting the following:
                ``(1) Authorization of appropriations.--For''; and
                (2) by adding at the end the following:
                ``(2) Commodity credit corporation funds.--
                        ``(A) In general.--Notwithstanding any other
                    provision of law, subject to subparagraph (B), in
                    addition to amounts made available under paragraph (1),
                    of the funds of the Commodity Credit Corporation, the
                    Secretary of Agriculture shall make available for loan
                    guarantees to carry out this title $80,000,000 for the
                    period beginning on the date of enactment of this
                    paragraph and ending on December 31, 2006, to remain
                    available until expended.
                        ``(B) Broadband loans and loan guarantees.--
                              ``(i) In general.--Amounts made available
                          under subparagraph (A) that are not obligated as
                          of the release date described in clause (ii) shall
                          be available to the Secretary to make loans and
                          loan guarantees under section 601 of the Rural
                          Electrification Act of 1936.
                              ``(ii) Release date.--For purposes of clause
                          (i), the release date is the date that is the
                          earlier of--
                                        ``(I) the date the Secretary
                                    determines that at least 75 percent of
                                    the designated market areas (as defined
                                    in section 122(j) of title 17, United
                                    States Code) not in the top 40
                                    designated market areas described in
                                    section 1004(e)(1)(C)(i) of the

    [[Page 116 STAT. 430]]

                                    Launching Our Communities' Access to
                                    Local Television Act of 2000 (47 U.S.C.
                                    1103(e)(1)(C)(i)) have access to local
                                    television broadcast signals for
                                    virtually all households (as determined
                                    by the Secretary); or
                                        ``(II) December 31, 2006.
                        ``(C) Advanced appropriations.--Subsections (c) and
                    (h)(1)(B) of section 1004 and section 1005(n)(3)(B)
                    shall not apply to amounts made available under this
                    paragraph.''.

        (b) Technical and Conforming Amendments.--
                (1) Approval of loan guarantees.--Section 1004 of the
            Launching Our Communities' Access to Local Television Act of
            2000 (47 U.S.C. 1103) is amended--
                        (A) in subsection (b)(1)--
                              (i) by striking ``section 5'' and inserting
                          ``section 1005''; and
                              (ii) by striking ``section 11'' and inserting
                          ``section 1011'';
                        (B) in subsection (d)(1), by striking ``section 3''
                    and inserting ``section 1003''; and
                        (C) in the first sentence of subsection (h)(2)(D),
                    by striking ``section 5'' and inserting ``section
                    1005''.
                (2) Administration of loan guarantees.--Section 1005 of the
            Launching Our Communities' Access to Local Television Act of
            2000 (47 U.S.C. 1104) is amended--
                        (A) in subsection (a), by striking ``sections 3 and
                    4'' and inserting ``sections 1003 and 1004'';
                        (B) in subsection (b)--
                              (i) in paragraph (1)(D), by striking ``section
                          6(a)(2)'' and inserting ``section 1006(a)(2)'';
                          and
                              (ii) in paragraph (3), by striking ``section
                          4(d)(3)(B)(iii)'' and inserting ``section
                          1004(d)(3)(B)(iii)''; and
                        (C) in subsection (e)(3), by striking ``section
                    4(g)'' and inserting ``section 1004(g)''.

    SEC. 6405. <<NOTE: 7 USC 2655.>>  RURAL FIREFIGHTERS AND EMERGENCY
                PERSONNEL GRANT PROGRAM.

        (a) In General.--The Secretary of Agriculture 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.--
                (1) Scholarships.--
                        (A) In general.--Not less than 60 percent of the
                    amounts made available for competitively-awarded grants
                    under this section shall be used to provide grants to
                    fund partial scholarships for training of individuals at
                    training centers approved by the Secretary.
                        (B) Priority.--In awarding grants under this
                    paragraph, the Secretary shall give priority to grant
                    applicants that provide for training within the region
                    (or locality) of the applicant.

    [[Page 116 STAT. 431]]

                (2) Grants for training centers.--
                        (A) In general.--A grant under subsection (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.
                        (B) Limitation.--Not more than $750,000 shall be
                    provided to any single training center for any fiscal
                    year under this paragraph.

        (c) Funding.--Of the funds of the Commodity Credit Corporation, the
    Secretary shall make available to carry out this section $10,000,000 for
    each of fiscal years 2003 through 2007, to remain available until
    expended.

    SEC. 6406. SENSE OF CONGRESS ON RURAL POLICY COORDINATION.

        It is the sense of Congress that the President should--
                (1) appoint a Special Assistant to the President for Rural
            Policy;
                (2) designate within each Federal agency with jurisdiction
            over rural programs or activities 1 or more senior officers or
            employees to provide rural policy leadership for the agency; and
                (3) create an intergovernmental rural policy working group
            comprised of--
                        (A) the Special Assistant to the President for Rural
                    Policy, who should serve as Chairperson; and
                        (B) the senior officers and employees designated
                    under paragraph (2).

                     TITLE VII--RESEARCH AND RELATED MATTERS

                             Subtitle A--Extensions

    SEC. 7101. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE.

        Section 2381(e) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (7 U.S.C. 3125b(e)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 7102. GRANTS AND FELLOWSHIPS FOR FOOD AND AGRICULTURAL SCIENCES
                EDUCATION.

        Section 1417 of the National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 (7 U.S.C. 3152) is amended--
                (1) in subsection (a)--
                        (A) by striking ``and'' after ``economics,''; and
                        (B) by inserting ``, and rural economic, community,
                    and business development'' before the period;
                (2) in subsection (b)--
                        (A) in paragraph (1), by inserting ``, or in rural
                    economic, community, and business development'' before
                    the semicolon;
                        (B) in paragraph (2), by inserting ``, or in rural
                    economic, community, and business development'' before
                    the semicolon;

    [[Page 116 STAT. 432]]

                        (C) in paragraph (3), by inserting ``, or teaching
                    programs emphasizing rural economic, community, and
                    business development'' before the semicolon;
                        (D) in paragraph (4), by inserting ``, or programs
                    emphasizing rural economic, community, and business
                    development,'' after ``programs''; and
                        (E) in paragraph (5), by inserting ``, or
                    professionals in rural economic, community, and business
                    development'' before the semicolon;
                (3) in subsection (d)--
                        (A) in paragraph (1), by inserting ``, or in rural
                    economic, community, and business development,'' after
                    ``sciences''; and
                        (B) in paragraph (2), by inserting ``, or in the
                    rural economic, community, and business development
                    workforce,'' after ``workforce''; and
                (4) in subsection (l), by striking ``2002'' and inserting
            ``2007''.

    SEC. 7103. POLICY RESEARCH CENTERS.

        Section 1419A(d) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3155(d)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7104. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH
                PROGRAM.

        Section 1424(d) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3174(d)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7105. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND AGRICULTURAL
                RESEARCH.

        Section 1424A(d) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3174a(d)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7106. NUTRITION EDUCATION PROGRAM.

        Section 1425(c)(3) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3175(c)(3)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7107. CONTINUING ANIMAL HEALTH AND DISEASE RESEARCH PROGRAMS.

        Section 1433(a) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3195(a)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7108. APPROPRIATIONS FOR RESEARCH ON NATIONAL OR REGIONAL PROBLEMS.

        Section 1434(a) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3196(a)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7109. GRANTS TO UPGRADE AGRICULTURAL AND FOOD SCIENCES FACILITIES
                AT 1890 LAND-GRANT COLLEGES, INCLUDING TUSKEGEE UNIVERSITY.

        Section 1447(b) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3222b(b)) is amended by
    striking ``$15,000,000 for each of fiscal years 1996 through 2002''

    [[Page 116 STAT. 433]]

    and inserting ``$25,000,000 for each of fiscal years 2002 through
    2007''.

    SEC. 7110. NATIONAL RESEARCH AND TRAINING VIRTUAL CENTERS.

        (a) Authorization.--Section 1448 of the National Agricultural
    Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222c) is
    amended by striking ``2002'' each place it appears in subsections (a)(1)
    and (f) and inserting ``2007''.
        (b) Redesignation.--Section 1448 of the National Agricultural
    Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222c) is
    amended--
                (1) in the section heading, by striking ``centennial'' and
            inserting ``virtual''; and
                (2) by striking ``centennial'' each place it appears and
            inserting ``virtual''.

    SEC. 7111. HISPANIC-SERVING INSTITUTIONS.

        Section 1455(c) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3241(c)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7112. COMPETITIVE GRANTS FOR INTERNATIONAL AGRICULTURAL SCIENCE AND
                EDUCATION PROGRAMS.

        Section 1459A(c) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3292b(c)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7113. UNIVERSITY RESEARCH.

        Section 1463 of the National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 (7 U.S.C. 3311) is amended--
                (1) in subsection (a), by striking ``$850,000,000 for each
            of the fiscal years 1991 through 2002'' and inserting ``such
            sums as may be necessary for each of fiscal years 1991 through
            2007''; and
                (2) in subsection (b), by striking ``$310,000,000 for each
            of the fiscal years 1991 through 2002'' and inserting ``such
            sums as may be necessary for each of fiscal years 1991 through
            2007''.

    SEC. 7114. EXTENSION SERVICE.

        Section 1464 of the National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 (7 U.S.C. 3312) is amended by striking
    ``$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'' and
    inserting ``such sums as may be necessary for each of fiscal years 1991
    through 2007''.

    SEC. 7115. SUPPLEMENTAL AND ALTERNATIVE CROPS.

        Section 1473D(a) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3319d(a)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7116. AQUACULTURE RESEARCH FACILITIES.

        The first sentence of section 1477 of the National Agricultural
    Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3324) is
    amended by striking ``2002'' and inserting ``2007''.

    [[Page 116 STAT. 434]]

    SEC. 7117. RANGELAND RESEARCH.

        Section 1483(a) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3336(a)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7118. NATIONAL GENETICS RESOURCES PROGRAM.

        Section 1635(b) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (7 U.S.C. 5844(b)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 7119. HIGH-PRIORITY RESEARCH AND EXTENSION INITIATIVES.

        Section 1672(h) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (7 U.S.C. 5925(h)) is amended by striking ``2002'' and
    inserting ``2007.

    SEC. 7120. NUTRIENT MANAGEMENT RESEARCH AND EXTENSION INITIATIVE.

        Section 1672A(g) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (7 U.S.C. 5925a(g)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 7121. AGRICULTURAL TELECOMMUNICATIONS PROGRAM.

        Section 1673(h) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (7 U.S.C. 5926(h)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 7122. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH DISABILITIES.

        Section 1680(c)(1) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (7 U.S.C. 5933(c)(1)) is amended by striking ``2002'' and
    inserting ``2007''.

    SEC. 7123. PARTNERSHIPS FOR HIGH-VALUE AGRICULTURAL PRODUCT QUALITY
                RESEARCH.

        Section 402(g) of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7622(g)) is amended by striking
    ``2002'' and inserting ``2007''.

    SEC. 7124. BIOBASED PRODUCTS.

        (a) Pilot Project.--Section 404(e)(2) of the Agricultural Research,
    Extension, and Education Reform Act of 1998 (7 U.S.C. 7624(e)(2)) is
    amended by striking ``2001'' and inserting ``2007''.
        (b) Authorization of Appropriations.--Section 404(h) of such Act (7
    U.S.C. 7624(h)) is amended by striking ``2002'' and inserting ``2007''.

    SEC. 7125. INTEGRATED RESEARCH, EDUCATION, AND EXTENSION COMPETITIVE
                GRANTS PROGRAM.

        Section 406 of the Agricultural Research, Extension, and Education
    Reform Act of 1998 (7 U.S.C. 7626) is amended--
                (1) by redesignating subsection (e) as subsection (f);
                (2) by inserting after subsection (d) the following:

        ``(e) Term of Grant.--A grant under this section shall have a term
    of not more than 5 years.''; and
                (3) in subsection (f) (as so redesignated), by striking
            ``2002'' and inserting ``2007''.

    [[Page 116 STAT. 435]]

    SEC. 7126. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 1994.

        (f) Institutional Capacity Building Grants.--Section 535 of the
    Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note;
    Public Law 103-382) is amended--
                (1) in subsection (b)(1), by striking ``2002'' and inserting
            ``2007''; and
                (2) in subsection (c), by striking ``$1,700,000 for each of
            fiscal years 1996 through 2002'' and inserting ``such sums as
            are necessary for each of fiscal years 2002 through 2007''.

    SEC. 7127. 1994 INSTITUTION RESEARCH GRANTS.

        Section 536(c) of the Equity in Educational Land-Grant Status Act of
    1994 (7 U.S.C. 301 note) is amended by striking ``2002'' and inserting
    ``2007''.

    SEC. 7128. ENDOWMENT FOR 1994 INSTITUTIONS.

        The first sentence of section 533(b) of the Equity in Educational
    Land-Grant Status Act of 1994 (7 U.S.C. 301 note) is amended by striking
    ``$4,600,000'' and all that follows through the period and inserting
    ``such sums as are necessary to carry out this section for each of
    fiscal years 1996 through 2007.''.

    SEC. 7129. PRECISION AGRICULTURE.

        Section 403(i) of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7623(i)) is amended by striking
    ``2002'' and inserting ``2007''.

    SEC. 7130. THOMAS JEFFERSON INITIATIVE FOR CROP DIVERSIFICATION.

        Section 405(h) of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7625(h)) is amended by striking
    ``2002'' and inserting ``2007''.

    SEC. 7131. SUPPORT FOR RESEARCH REGARDING DISEASES OF WHEAT, TRITICALE,
                AND BARLEY CAUSED BY FUSARIUM GRAMINEARUM OR BY TILLETIA
                INDICA.

        Section 408(e) of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7628(e)) is amended--
                (1) by striking ``$5,200,000'' and inserting ``such sums as
            may be necessary''; and
                (2) by striking ``2002'' and inserting ``2007''.

    SEC. 7132. OFFICE OF PEST MANAGEMENT POLICY.

        Section 614(f) of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7653(f)) is amended by striking
    ``2002'' and inserting ``2007''.

    SEC. 7133. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND
                ECONOMICS ADVISORY BOARD.

        Section 1408(h) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3123(h)) is amended by
    striking ``2002'' and inserting ``2007''.

    [[Page 116 STAT. 436]]

    SEC. 7134. GRANTS FOR RESEARCH ON PRODUCTION AND MARKETING OF ALCOHOLS
                AND INDUSTRIAL HYDROCARBONS FROM AGRICULTURAL COMMODITIES
                AND FOREST PRODUCTS.

        Section 1419(d) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3154(d)) is amended by
    striking ``2002'' and inserting ``2007''.

    SEC. 7135. AGRICULTURAL EXPERIMENT STATIONS RESEARCH FACILITIES.

        Section 6(a) of the Research Facilities Act (7 U.S.C. 390d(a)) is
    amended by striking ``2002'' and inserting ``2007''.

    SEC. 7136. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH GRANTS NATIONAL
                RESEARCH INITIATIVE.

        Section 2(b)(10) of the Competitive, Special, and Facilities
    Research Grant Act (7 U.S.C. 450i(b)(10)) is amended by striking
    ``2002'' and inserting ``2007''.

    SEC. 7137. FEDERAL AGRICULTURAL RESEARCH FACILITIES AUTHORIZATION OF
                APPROPRIATIONS.

        Section 1431 of the National Agricultural Research, Extension, and
    Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat.
    1556) is amended by striking ``2002'' and inserting ``2007''.

    SEC. 7138. CRITICAL AGRICULTURAL MATERIALS RESEARCH.

        Section 16(a) of the Critical Agricultural Materials Act (7 U.S.C.
    178n(a)) is amended by striking ``2002'' and inserting ``2007''.

    SEC. 7139. AQUACULTURE.

        Section 10 of the National Aquaculture Act of 1980 (16 U.S.C. 2809)
    is amended by striking ``2002'' each place it appears and inserting
    ``2007''.

                            Subtitle B--Modifications

    SEC. 7201. EQUITY IN EDUCATIONAL LAND-GRANT STATUS ACT OF 1994.

        (a) Authorization of Appropriations.--Section 534(a)(1)(A) of the
    Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note)
    is amended by striking ``$50,000'' and inserting ``$100,000''.
        (b) Change of Indian Student Count Formula.--Section 533(c)(4)(A) of
    the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301
    note; Public Law 103-382) is amended by striking ``(as defined in
    section 390(3) of the Carl D. Perkins Vocational and Applied Technology
    Education Act, 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 (Oct. 31, 1998)) for each 1994
    Institution for the fiscal year'' and inserting ``(as defined in section
    2(a) of the Tribally Controlled College or University Assistance Act of
    1978 (25 U.S.C. 1801(a)))''.
        (c) Accreditation Requirement for Research Grants.--Section
    533(a)(3) of the Equity in Educational Land-Grant Status Act of 1994 (7
    U.S.C. 301 note; Public Law 103-382) is amended by

    [[Page 116 STAT. 437]]

    striking ``sections 534 and 535'' and inserting ``sections 534, 535, and
    536''.
        (d) Technical Amendment To Reflect Name Changes.--Section 532 of the
    Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note;
    Public Law 103-382) is amended by striking paragraphs (1) through (30)
    and inserting the following:
                ``(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 College.
                ``(8) Chief 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.''.

        (e) Report <<NOTE: 7 USC 301 note. Deadline.>>  Recommending
    Criteria for Additional Eligible Entities.--Not later than 1 year after
    the date of enactment of this Act, the Secretary of Agriculture shall
    submit a report containing recommended criteria for designating
    additional 1994 Institutions to the Committee on Agriculture of the
    House of Representatives and the Committee on Agriculture, Nutrition,
    and Forestry of the Senate.

    SEC. 7202. CARRYOVER FOR EXPERIMENT STATIONS.

        Section 7 of the Hatch Act of 1887 (7 U.S.C. 361g) is amended by
    striking subsection (c) and inserting the following:
        ``(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.--

    [[Page 116 STAT. 438]]

                        ``(A) In general.--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.
                        ``(B) Redistribution.--Federal funds that are
                    deducted under subparagraph (A) for a fiscal year shall
                    be redistributed by the Secretary in accordance with the
                    formula set forth in section 3(c) to those States for
                    which no deduction under subparagraph (A) has been taken
                    for that fiscal year.''.

    SEC. 7203. AUTHORIZATION PERCENTAGES FOR RESEARCH AND EXTENSION FORMULA
                FUNDS.

        (a) Extension.--Section 1444(a) of the National Agricultural
    Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3221(a))
    is amended--
                (1) by striking ``(a) There'' and inserting the following:

        ``(a) Authorization of Appropriations.--
                ``(1) In general.--There'';
                (2) by striking the second sentence; and
                (3) in the third sentence, by striking ``Beginning'' through
            ``6 per centum'' and inserting the following:
                ``(2) <<NOTE: Effective date.>>  Minimum amount.--Beginning
            with fiscal year 2003, there shall be appropriated under this
            section for each fiscal year an amount that is not less than 15
            percent'';
                (3) by striking ``Funds appropriated'' and inserting the
            following:
                ``(3) Uses.--Funds appropriated''; and
                (4) by striking ``No more'' and inserting the following:
                ``(4) Carryover.--No more''.

        (b) Research.--Section 1445(a) of the National Agricultural
    Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222(a))
    is amended--
                (1) by striking ``(a) There'' and inserting the following:

        ``(a) Authorization of Appropriations.--
                ``(1) In general.--There'';
                (2) by striking the second sentence and inserting the
            following:
                ``(2) <<NOTE: Effective date.>>  Minimum amount.--Beginning
            with fiscal year 2003, 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) by striking ``Funds appropriated'' and inserting the
            following:
                ``(3) Uses.--Funds appropriated'';
                (4) by striking ``The eligible'' and inserting the
            following:
                ``(4) Coordination.--The eligible''; and
                (5) by striking ``No more'' and inserting the following:
                ``(5) Carryover.--No more''.

    SEC. 7204. CARRYOVER FOR ELIGIBLE INSTITUTIONS.

        Section 1445(a) of the National Agricultural Research, Extension,
    and Teaching Policy Act of 1977 (7 U.S.C. 3222(a)) (as amended by
    section 7203 of this Act) is further amended by striking paragraph (5)
    and inserting the following:
                ``(5) Carryover.--

    [[Page 116 STAT. 439]]

                        ``(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.--
                              ``(i) In general.--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.
                              ``(ii) Redistribution.--Federal funds that are
                          deducted under clause (i) for a fiscal year shall
                          be redistributed by the Secretary in accordance
                          with the formula set forth in subsection (b)(2)(B)
                          to those eligible institutions for which no
                          deduction under clause (i) has been taken for that
                          fiscal year.''.

    SEC. 7205. INITIATIVE FOR FUTURE AGRICULTURE AND FOOD SYSTEMS.

        (a) Funding.--Section 401(b) of the Agricultural Research,
    Extension, and Education Reform Act of 1998 (7 U.S.C. 7621(b)) is
    amended--
                (1) in paragraph (1), by striking ``2002'' and inserting
            ``2001''; and
                (2) by adding at the end the following:
                ``(3) Other funding.--Out of funds in the Commodity Credit
            Corporation, the Secretary shall transfer to the Account--
                        ``(A) on October 1, 2003, $120,000,000;
                        ``(B) on October 1, 2004, $140,000,000;
                        ``(C) on October 1, 2005, $160,000,000; and
                        ``(D) on October 1, 2006, and each October 1
                    thereafter, $200,000,000.''.
                (2) by amending subsection (c)(1) to read as follows:
                ``(1) Critical emerging agricultural and rural issues.--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 and rural
            issues related to--
                        ``(A) future food production;
                        ``(B) environmental quality and natural resource
                    management;
                        ``(C) farm income; or
                        ``(D) rural economic and business and community
                    development policy.''; and
                (3) in subsection (e)(1), by striking ``small and mid-
            sized'' and inserting ``small, mid-sized, and minority-
            serving''.

    SEC. 7206. ELIGIBILITY FOR INTEGRATED GRANTS PROGRAM.

        Section 406(b) of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7626(b)) is amended by inserting
    ``and 1994 Institutions'' before ``on a competitive basis''.

    [[Page 116 STAT. 440]]

    SEC. 7207. AGRICULTURAL RESEARCH, EXTENSION, AND EDUCATION REFORM ACT OF
                1998.

        (a) Precision Agriculture.--Section 403 of the Agricultural
    Research, Extension, and Education Reform Act of 1998 (7 U.S.C. 7623) is
    amended--
                (1) in subsection (a)--
                        (A) in paragraph (3)--
                              (i) in subparagraph (A), inserting ``,
                          horticultural,'' following ``agronomic'' the
                          second place it appears; and
                              (ii) in subparagraph (C), by striking ``or''
                          at the end;
                              (iii) in subparagraph (D), by striking the
                          period at the end and inserting ``; or''; and
                              (iv) by adding at the end the following:
                        ``(E) using such information to enable intelligent
                    mechanized harvesting and sorting systems for
                    horticultural crops.'';
                        (B) in paragraph (4)--
                              (i) in subparagraph (C), by striking ``or'' at
                          the end;
                              (ii) in subparagraph (D), by striking the
                          period at the end and inserting ``; or''; and
                              (iii) by adding at the end the following:
                        ``(E) robotic and other intelligent machines for use
                    in horticultural cropping systems.''; and
                        (C) in paragraph (5)(F), by inserting ``(including
                    improved use of energy inputs)'' after ``farm production
                    efficiencies'';
                (2) in subsection (c)(2)--
                        (A) by inserting ``or horticultural'' after
                    ``agronomic''; and
                        (B) by striking ``and meteorological variability''
                    and inserting ``product variability, and meteorological
                    variability'';
                (3) in subsection (d)--
                        (A) by redesignating paragraphs (4) and (5) as
                    paragraphs (5) and (6), respectively; and
                        (B) by inserting after paragraph (3) the following:
                ``(4) Improve farm energy use efficiencies.''.

        (b) Thomas Jefferson Initiative for Crop Diversification.--Section
    405(a) of the Agricultural Research, Extension, and Education Reform Act
    of 1998 (7 U.S.C. 7625(a)) is amended by striking ``and marketing'' and
    inserting ``, marketing, and efficient use''.
        (c) Coordinated Program of Research, Extension, and Education To
    Improve Viability of Small- and Medium-Size Dairy, Livestock, and
    Poultry Operations.--Section 407(b)(3) of the Agricultural Research,
    Extension, and Education Reform Act of 1998 (7 U.S.C. 7627(b)(3)) is
    amended by inserting ``(including improved use of energy inputs)'' after
    ``poultry systems that increase efficiencies''.
        (d) Support for Research Regarding Diseases of Wheat, Triticale, and
    Barley Caused by Fusarium Graminearum or By Tilletia Indica.--
                (1) Research grant authorized.--Section 408(a) of the
            Agricultural Research, Extension, and Education Reform Act of
            1998 (7 U.S.C. 7628(a)) is amended to read as follows:

    [[Page 116 STAT. 441]]

        ``(a) Research Grant Authorized.--The Secretary of Agriculture may
    make grants to consortia of land-grant colleges and universities to
    enhance the ability of the consortia to carry out multi-State research
    projects aimed at understanding and combating diseases of wheat,
    triticale, and barley caused by Fusarium graminearum and related fungi
    (referred to in this section as `wheat scab') or by Tilletia indica and
    related fungi (referred to in this section as `Karnal bunt').''.
                (2) Research components.--Section 408(b) of such Act (7
            U.S.C. 7628(b)) is amended--
                        (A) in paragraph (1), by inserting ``or of Karnal
                    bunt,'' after ``epidemiology of wheat scab'';
                        (B) in paragraph (1), by inserting ``, triticale,''
                    after ``occurring in wheat'';
                        (C) in paragraph (2), by inserting ``or Karnal
                    bunt'' after ``wheat scab'';
                        (D) in paragraph (3)(A), by striking ``and barley
                    for the presence of'' and inserting ``, triticale, and
                    barley for the presence of Karnal bunt or of'';
                        (E) in paragraph (3)(B), by striking ``and barley
                    infected with wheat scab'' and inserting ``, triticale,
                    and barley infected with wheat scab or with Karnal
                    bunt'';
                        (F) in paragraph (3)(C), by inserting ``wheat scab''
                    after ``to render'';
                        (G) in paragraph (4), by striking ``and barley to
                    wheat scab'' and inserting ``, triticale, and barley to
                    wheat scab and to Karnal bunt''; and
                        (H) in paragraph (5)--
                              (i) by inserting ``and Karnal bunt'' after
                          ``wheat scab''; and
                              (ii) by inserting ``, triticale,'' after
                          ``resistant wheat''.
                (3) Communications networks.--Section 408(c) of such Act (7
            U.S.C. 7628(c)) is amended by inserting ``or Karnal bunt'' after
            ``wheat scab''.
                (4) Technical amendments.--(A) The section heading for
            section 408 of such Act is amended by striking ``and barley
            caused by fusarium graminearum'' and inserting ``, triticale,
            and barley caused by fusarium graminearum or by tilletia
            indica''.
                (B) The table of sections for such Act is amended by
            striking ``and barley caused by fusarium graminearum'' in the
            item relating to section 408 and inserting ``, triticale, and
            barley caused by Fusarium graminearum or by Tilletia indica''.

        (e) Program to Control Johne's Disease.--Title IV of the
    Agricultural Research, Extension, and Education Reform Act of 1998 (7
    U.S.C. 7621 et seq.) is amended by adding at the end the following new
    section:

    ``SEC. 409. <<NOTE: 7 USC 7629.>>  BOVINE JOHNE'S DISEASE CONTROL
                PROGRAM.

        ``(a) Establishment.--The Secretary of Agriculture, in coordination
    with State veterinarians and other appropriate State animal health
    professionals, may establish a program to conduct research, testing, and
    evaluation of programs for the control and management of Johne's disease
    in livestock.
        ``(b) Authorization of Appropriations.--There is authorized to be
    appropriated to the Secretary such sums as may be necessary

    [[Page 116 STAT. 442]]

    to carry out this section for each of fiscal years 2003 through 2007.''.

    SEC. 7208. FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 1990.

        (a) Agricultural Genome Initiative.--Section 1671(b) of the Food,
    Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5924(b)) is
    amended--
                (1) in paragraph (3), by inserting ``pathogens and'' before
            ``diseases causing economic hardship'';
                (2) in paragraph (6), by striking ``and'' at the end;
                (3) by redesignating paragraph (7) as paragraph (8); and
                (4) by inserting after paragraph (6) the following new
            paragraph:
                ``(7) reducing the economic impact of plant pathogens on
            commercially important crop plants; and''.

        (b) High-Priority Research and Extension Initiatives.--Section
    1672(e) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7
    U.S.C. 5925) is amended by adding at the end the following new
    paragraphs:
                ``(25) Genetically modified agriculture products (gmap)
            research.--Research grants may be made under this section for
            the purposes of providing unbiased, science-based evaluation of
            the risks and benefits to the public and the environment of
            specific genetically modified plant and animal products. Grants
            may be used to form interdisciplinary teams to review and
            conduct research on scientific, social, economic, and ethical
            issues during the review process, to answer questions raised by
            the release of new genetically modified agriculture products, to
            conduct fundamental studies on the health and environmental
            safety of genetically modified agriculture products (including
            quantitative risk assessment, the effect of specific genetically
            modified agriculture products on human health, and gene flow
            studies), to communicate the risk of genetically modified
            agriculture products through extension and education programs,
            and to engage the public and industry in relevant issues.
                ``(26) Wind erosion research and extension.--Research and
            extension grants may be made under this section for the purpose
            of validating wind erosion models.
                ``(27) Crop loss research and extension.--Research and
            extension grants may be made under this section for the purpose
            of validating crop loss models.
                ``(28) Land use management research and extension.--Research
            and extension grants may be made under this section for the
            purposes of evaluating the environmental benefits of land use
            management tools such as those provided in the Farmland
            Protection Program.
                ``(29) Water and air quality research and extension.--
            Research and extension grants may be made under this section for
            the purpose of better understanding agricultural impacts to air
            and water quality and means to address them.
                ``(30) Revenue and insurance tools research and extension.--
            Research and extension grants may be made under this section for
            the purposes of better understanding the impact of revenue and
            insurance tools on farm income.

    [[Page 116 STAT. 443]]

                ``(31) Agrotourism research and extension.--Research and
            extension grants may be made under this section for the purpose
            of better understanding the economic, environmental, and food
            systems impacts of agrotourism.
                ``(32) Harvesting productivity for fruits and vegetables.--
            Research and extension grants may be made under this section for
            the purpose of improving harvesting productivity for fruits and
            vegetables (including citrus), including the development of
            mechanical harvesting technologies and effective, economical,
            and safe abscission compounds.
                ``(33) Nitrogen-fixation by plants.--Research and extension
            grants may be made under this section for the purpose of
            enhancing the nitrogen-fixing ability and efficiency of legumes,
            developing new varieties of legumes that fix nitrogen more
            efficiently, and developing new varieties of other commercially
            important crops that potentially are able to fix nitrogen.
                ``(34) Agricultural marketing.--Extension grants may be made
            under this section for the purpose of providing education
            materials, information, and outreach programs regarding
            commodity and livestock marketing strategies for agricultural
            producers and for cooperatives and other marketers of any
            agricultural commodity, including livestock.
                ``(35) Environment and private lands research and
            extension.--Research and extension grants may be made under this
            section for the purpose of researching the use of computer
            models to aid in assessment of best management practices on a
            watershed basis, working with government, industry, and private
            landowners to help craft industry-led solutions to identified
            environmental issues, researching and monitoring water, air, or
            soil environmental quality to aid in the development of new
            approaches to local environmental concerns, and working with
            local, State, and federal officials to help craft effective
            environmental solutions that respect private property rights and
            agricultural production realities.
                ``(36) Livestock disease research and extension.--Research
            and extension grants may be made under this section for the
            purpose of identifying possible livestock disease threats,
            educating the public regarding livestock disease threats,
            training persons to deal with such threats, and conducting
            related research.
                ``(37) Plant gene expression.--Research grants may be made
            under this section for the purpose of plant gene expression
            research to accelerate the application of basic plant genomic
            science to the development and testing of new varieties of
            enhanced food crops, crops that can be used as renewable energy
            sources, and other alternative uses of agricultural crops.
                ``(38) Animal infectious diseases research.--Research and
            extension grants may be made under this section for the purpose
            of developing prevention and control methodologies for animal
            infectious diseases (including evaluation under field conditions
            in countries in which an animal disease occurs) such as
            laboratory tests for quicker detection of infected animals and
            presence of disease, prevention strategies (including
            vaccination programs), and rapid diagnostic techniques for
            animal disease agents considered to be risks for agricultural
            bioterrorism attack.

    [[Page 116 STAT. 444]]

                ``(39) Program to combat childhood obesity.--Research and
            extension grants may be made under this section to institutions
            of higher education with demonstrated capacity in basic and
            clinical obesity research, nutrition research, and community
            health education research to develop and evaluate community-wide
            strategies that catalyze partnerships between families and
            health care, education, recreation, mass media, and other
            community resources to reduce the incidence of childhood
            obesity.
                ``(40) Integrated pest management.--Research and extension
            grants may be made under this section to coordinate and improve
            research, education, and outreach on, and implementation on
            farms of, integrated pest management.
                ``(41) Beef cattle genetics.--Research and extension grants
            for beef cattle genetics evaluation research may be made under
            this section to consortia of institutions of higher education
            that have expertise in beef cattle genetic evaluation research
            and technology and that 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.
                ``(42) Dairy pipeline cleaner.--Research and extension
            grants may be made under this section for the purpose of
            preventing and eliminating the dangers of dairy pipeline
            cleaner, including development of safer packaging and transfer
            mechanisms, outlining accident causes and potential prevention
            measures, and other means of improving efforts to prevent
            ingestion of dairy pipeline cleaner.
                ``(43) Development of publicly held plants and animal
            varieties.--Research and extension grants may be made under this
            section for the purpose of development of publicly held plants
            and animal varieties (including germplasm for identity-preserved
            markets) and genetic resource conservation activities.
                ``(44) Sugarcane genetics.--Research grants may be made
            under this section for the purpose of maintaining acceptable
            yields under reduced production inputs, implementing marker-
            assisted breeding strategies and other basic plant genomic
            technologies to screen for improved plant resistance to
            diseases, weeds, and insects toward minimizing pesticide use,
            enhancing food, fiber and energy production, and developing
            varieties for maximum performance under prevailing conditions,
            including management for improved soil and water
            conservation.''.

        (c) Assistive Technology Program for Farmers With Disabilities.--
    Section 1680(a) of the Food, Agriculture, Conservation, and Trade Act of
    1990 (7 U.S.C. 5933(a)) is amended by adding at the end the following
    new paragraph:
                ``(6) Consideration for grants for new programs.--For each
            fiscal year that amounts are made available for grants under
            this subsection, the Secretary may make grants in a manner that
            ensures that eligible entities who apply for grants, but have
            not previously received a grant under this subsection, are given
            full consideration.''.

    SEC. 7209. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, AND TEACHING
                POLICY ACT OF 1977.

        (a) National Agricultural Research, Extension, Education, and
    Economic Advisory Board.--Section 1408 of the

    [[Page 116 STAT. 445]]

    National Agricultural Research, Extension, and Teaching Policy Act of
    1977 (7 U.S.C. 3123) is amended--
                (1) in subsection (b)(1), by striking ``30 members'' and
            inserting ``31 members'';
                (2) in subsection (b)(3)--
                        (A) by redesignating subparagraphs (R) through (DD)
                    as subparagraphs (S) through (EE), respectively; and
                        (B) by inserting after subparagraph (Q) the
                    following new subparagraph:
                        ``(R) 1 member representing a non-land grant college
                    or university with a historic commitment to research in
                    the food and agricultural sciences.'';
                (3) in subsection (c)(1), by striking ``and land-grant
            colleges and universities'' and inserting ``, land-grant
            colleges and universities, and the Committee on Agriculture of
            the House of Representatives, the Committee on Agriculture,
            Nutrition, and Forestry of the Senate, the Subcommittee on
            Agriculture, Rural Development, Food and Drug Administration and
            Related Agencies of the Committee on Appropriations of the House
            of Representatives, and the Subcommittee on Agriculture, Rural
            Development and Related Agencies of the Committee on
            Appropriations of the Senate''; and
                (4) in subsection (d)(1), inserting ``consult with any
            appropriate agencies of the Department of Agriculture and''
            after ``the Advisory Board shall''.

        (b) Grants for Research on Production and Marketing of Alcohols and
    Industrial Hydrocarbons from Agricultural Commodities and Forest
    Products.--Section 1419 of the National Agricultural Research,
    Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3154) is amended--
                (1) in subsection (a)(2), by inserting ``and animal fats and
            oils'' after ``industrial oilseed crops''; and
                (2) in subsection (a)(4), by inserting ``or triglycerides''
            after ``other industrial hydrocarbons''.

        (c) FAS Overseas Intern Program.--Section 1458(a) of the National
    Agricultural Research, Extension, and Teaching Policy Act of 1977 (7
    U.S.C. 3291(a)) is amended--
                (1) by striking ``and'' at the end of paragraph (8);
                (2) by striking the period at the end of paragraph (9) and
            inserting ``; and''; and
                (3) by adding at the end the following new paragraph:
                ``(10) establish a program, to be coordinated by the
            Cooperative State Research, Education, and Extension Service and
            the Foreign Agricultural Service, to place interns from United
            States colleges and universities at Foreign Agricultural Service
            field offices overseas.''.

        (d) Rangeland Research Grants.--Section 1480 of the National
    Agricultural Research, Extension, and Teaching Policy Act of 1977 (7
    U.S.C. 3333) is amended to read as follows:

    ``SEC. 1480. RANGELAND RESEARCH GRANTS.

        ``(a) In General.--The Secretary may make grants to--
                ``(1) land-grant colleges and universities, State
            agricultural experiment stations, and colleges, universities,
            and Federal laboratories having a demonstrable capacity in
            rangeland research, as determined by the Secretary, to carry out
            rangeland research; and

    [[Page 116 STAT. 446]]

                ``(2) the Joe Skeen Institute for Rangeland Restoration for
            the purposes of facilitating and expanding ongoing State-Federal
            range management, animal husbandry, and agricultural research,
            education, and extension programs to meet the targeted,
            emerging, and future needs of western United States rangelands
            and associated natural resources.

        ``(b) Matching Requirements.--
                ``(1) In general.--Except as provided in paragraph (2), this
            grant program shall be based on a matching formula of 50 percent
            Federal and 50 percent non-Federal funding.
                ``(2) Exception.--Paragraph (1) shall not apply to a grant
            to a Federal laboratory or a grant under subsection (a)(2).''.

    SEC. 7210. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH.

        Section 1668 of the Food, Agriculture, Conservation, and Trade Act
    of 1990 (7 U.S.C. 5921) is amended to read as follows:

    ``SEC. 1668. BIOTECHNOLOGY RISK ASSESSMENT RESEARCH.

        ``(a) Purpose.--It is the purpose of this section--
                ``(1) to authorize and support environmental assessment
            research to help identify and analyze environmental effects of
            biotechnology; and
                ``(2) to authorize research to help regulators develop long-
            term policies concerning the introduction of such technology.

        ``(b) Grant Program.--The Secretary of Agriculture shall establish a
    grant program within the Cooperative State Research, Education, and
    Extension Service and the Agricultural Research Service to provide the
    necessary funding for environmental assessment research concerning the
    introduction of genetically engineered animals, plants, and
    microorganisms into the environment.
        ``(c) Research Priorities.-- The following types of research shall
    be given priority for funding:
                ``(1) Research designed to identify and develop appropriate
            management practices to minimize physical and biological risks
            associated with genetically engineered animals, plants, and
            microorganisms.
                ``(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 characteristics, rates, and methods of gene
            transfer that may occur between genetically engineered animals,
            plants, and microorganisms and related wild and agricultural
            organisms.
                ``(4) Environmental assessment research designed to provide
            analysis which compares the relative impacts of animals, plants,
            and microorganisms modified through genetic engineering to other
            types of production systems.
                ``(5) 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) Consultation.-- In considering specific areas of research for
    funding under this section, the Secretary of Agriculture shall

    [[Page 116 STAT. 447]]

    consult with the Administrator of the Animal and Plant Health Inspection
    Service and the National Agricultural Research, Extension, Education,
    and Economics Advisory Board.
        ``(f) Program Coordination.-- The Secretary of Agriculture shall
    coordinate research funded under this section with the Office of
    Research and Development of the Environmental Protection Agency in order
    to avoid duplication of research activities.
        ``(g) 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 2 percent of
            such amount for the purpose of making grants under this section
            for research on biotechnology risk assessment.
                ``(3) Application of Funds.--Funds made available under this
            subsection shall be applied, to the maximum extent practicable,
            to risk assessment research on all categories identified in
            subsection (c).''.

    SEC. 7211. COMPETITIVE, SPECIAL, AND FACILITIES RESEARCH GRANTS.

        Section 2(b)(2) of the Competitive, Special, and Facilities Research
    Grant Act (7 U.S.C. 450i(b)(2)) is amended by striking ``in--'' and
    inserting the following: ``in the areas described in subparagraphs (A)
    through (F). <<NOTE: Deadline.>>  Such needs shall be 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.''.

    SEC. 7212. MATCHING FUNDS REQUIREMENT FOR RESEARCH AND EXTENSION
                ACTIVITIES OF 1890 INSTITUTIONS.

        Section 1449 of the National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 (7 U.S.C. 3222d) is amended--
                (1) by amending subsection (c) to read as follows:

        ``(c) Matching Formula.--Notwithstanding any other provision of this
    subtitle, for each of fiscal years 2003 through 2007, the State shall
    provide matching funds from non-Federal sources. Such matching funds
    shall be for an amount equal to not less than--
                ``(1) 60 percent of the formula funds to be distributed to
            the eligible institution for fiscal year 2003;
                ``(2) 70 percent of the formula funds to be distributed to
            the eligible institution for fiscal year 2004;
                ``(3) 80 percent of the formula funds to be distributed to
            the eligible institution for fiscal year 2005;
                ``(4) 90 percent of the formula funds to be distributed to
            the eligible institution for fiscal year 2006; and
                ``(5) 100 percent of the formula funds to be distributed to
            the eligible institution for fiscal year 2007 and each fiscal
            year thereafter.''; and
                (2) by amending subsection (d) to read as follows:

        ``(d) Waiver Authority.--Notwithstanding subsection (f), the
    Secretary may waive the matching funds requirement under subsection (c)
    above the 50 percent level for any fiscal year for an eligible
    institution of a State if the Secretary determines that the State will
    be unlikely to satisfy the matching requirement.''.

    [[Page 116 STAT. 448]]

    SEC. 7213. MATCHING REQUIREMENTS FOR RESEARCH AND EXTENSION FORMULA
                FUNDS FOR INSULAR AREA LAND-GRANT INSTITUTIONS.

        (a) Experiment Stations.--Section 3(d) of the Hatch Act of 1887 (7
    U.S.C. 361c(d)) is amended by striking paragraph (4) and inserting the
    following:
                ``(4) Exception for insular areas.--
                        ``(A) <<NOTE: Effective date.>>  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.''.

        (b) Cooperative Agricultural Extension.--Section 3(e) of the Smith-
    Lever Act (7 U.S.C. 343(e)) is amended by striking paragraph (4) and
    inserting the following:
                ``(4) Exception for insular areas.--
                        ``(A) <<NOTE: Effective date.>>  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.''.

    SEC. 7214. DEFINITION OF FOOD AND AGRICULTURAL SCIENCES.

        Section 2(3) of the Research Facilities Act (7 U.S.C. 390(2)(3)) is
    amended to read as follows:
                ``(3) Food and agricultural sciences.--The term `food and
            agricultural sciences' has the meaning given that term in
            section 1404(8) of the National Agricultural Research,
            Extension, and Teaching Policy Act of 1977 (7 U.S.C.
            3103(8)).''.

    SEC. 7215. FEDERAL EXTENSION SERVICE.

        Section 3(b)(3) of the Smith-Lever Act (7 U.S.C. 343(b)(3)) is
    amended--
                (1) by striking ``$5,000,000'' and inserting ``such sums as
            are necessary''; and
                (2) by adding after the first sentence the following new
            sentence: ``The balance of any annual funds provided under the
            preceding sentence for a fiscal year that remains unexpended at
            the end of that fiscal year shall remain available without
            fiscal year limitation.''.

    [[Page 116 STAT. 449]]

    SEC. 7216. POLICY RESEARCH CENTERS.

        Section 1419A(c)(3) of the National Agricultural Research,
    Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3155(c)(3)) is
    amended by striking ``collect and analyze'' and inserting ``collect,
    analyze, and disseminate''.

    SEC. 7217. AVAILABILITY OF COMPETITIVE GRANT FUNDS.

        The National Agricultural Research, Extension, and Teaching Policy
    Act of 1977 is amended by inserting after section 1469 (7 U.S.C. 3315)
    the following:

    ``SEC. 1469A. <<NOTE: 7 USC 3315a.>>  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. 7218. ORGANIC AGRICULTURE RESEARCH AND EXTENSION INITIATIVE.

        Section 1672B of the Food, Agriculture, Conservation, and Trade Act
    of 1990 (7 U.S.C. 5925b) is amended--
                (1) in subsection (a)--
                        (A) in paragraph (1), by inserting ``, breeding,''
                    after ``production'';
                        (B) in paragraph (2), by striking ``and'' at the
                    end;
                        (C) in paragraph (3), by striking the period at the
                    end and inserting a semicolon; and
                        (D) by adding at the end the following:
                ``(4) determining desirable traits for organic commodities;
                ``(5) identifying marketing and policy constraints on the
            expansion of organic agriculture; and
                ``(6) 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 marketing and to socioeconomic
            conditions.''; and
                (2) by amending subsection (e) to read as follows:

        ``(e) <<NOTE: Effective date.>>  Funding.--On October 1, 2003, and
    each October 1 thereafter through October 1, 2007, out of any funds in
    the Treasury not otherwise appropriated, the Secretary of the Treasury
    shall transfer $3,000,000 to the Secretary of Agriculture for this
    section.''.

    SEC. 7219. SENIOR SCIENTIFIC RESEARCH SERVICE.

        Subtitle B of title VI of the Agricultural Research, Extension, and
    Education Reform Act of 1998 (7 U.S.C. 7651 et seq.) is amended by
    adding at the end the following:

    ``SEC. 620. <<NOTE: Establishment. 7 USC 7657.>>  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--

    [[Page 116 STAT. 450]]

                        ``(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

    [[Page 116 STAT. 451]]

            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.''.

    SEC. 7220. TERMINATION OF CERTAIN SCHEDULE A APPOINTMENTS.

        (a) <<NOTE: Deadline.>>  Termination.--Not later than January 31,
    2003, the Secretary of Agriculture shall terminate each appointment
    listed as an excepted position under schedule A of the General Schedule
    made by the Secretary to the Federal civil service of an individual who
    holds dual government appointments, and who carries out agricultural
    extension work in a program at a college or university eligible to
    receive funds, under--
                (1) the Smith-Lever Act (7 U.S.C. 341 et seq.);
                (2) section 1444 of the National Agricultural Research,
            Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3221); or
                (3) section 208(e) of the District of Columbia Public
            Postsecondary Education Reorganization Act (88 Stat. 1428).

        (b) Continuation of Certain Federal Benefits.--
                (1) In general.--Notwithstanding title 5, United States
            Code, and subject to paragraph (2), an individual described in
            subsection (a), during the period the individual is employed in
            an agricultural extension program described in subsection (a)
            without a break in service, shall continue to--
                        (A) be eligible to participate, to the same extent
                    that the individual was eligible to participate (on the
                    day before the date of enactment of this Act), in--
                              (i) the Federal Employee Health Benefits
                          Program;

    [[Page 116 STAT. 452]]

                              (ii) the Federal Employee Group Life Insurance
                          Program;
                              (iii) the Civil Service Retirement System;
                              (iv) the Federal Employee Retirement System;
                              (v) the Thrift Savings Plan; and
                              (vi) the Federal Long Term Care Insurance
                          Program; and
                        (B) receive Federal Civil Service employment credit
                    to the same extent that the individual was receiving
                    such credit on the day before the date of enactment of
                    this Act.
                (2) Limitations.--An individual may continue to be eligible
            for the benefits described in paragraph (1) if--
                        (A) in the case of an individual who remains
                    employed in the agricultural extension program described
                    in subsection (a) on the date of enactment of this Act,
                    the employing college or university continues to fulfill
                    the administrative and financial responsibilities
                    (including making agency contributions) associated with
                    providing those benefits, as determined by the Secretary
                    of Agriculture; and
                        (B) in the case of an individual who changes
                    employment to a second college or university described
                    in subsection (a)--
                              (i) the individual continues to work in an
                          agricultural extension program described in
                          subsection (a), as determined by the Secretary of
                          Agriculture;
                              (ii) the second college or university--
                                        (I) fulfills the administrative and
                                    financial responsibilities (including
                                    making agency contributions) associated
                                    with providing those benefits, as
                                    determined by the Secretary of
                                    Agriculture; and
                                        (II) within 1 year before the date
                                    of the employment of the individual, had
                                    employed a different individual
                                    described in subsection (a) who had
                                    performed the same duties of employment;
                                    and
                              (iii) the individual was eligible for those
                          benefits on the day before the date of enactment
                          of this Act.

    SEC. 7221. BIOSECURITY PLANNING AND RESPONSE PROGRAMS.

        (a) Biosecurity.--The National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 (7 U.S.C. 3101 et seq.) is amended by adding
    at the end the following:

                            ``Subtitle N--Biosecurity

    ``SEC. 1484. <<NOTE: 7 USC 3351.>>  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 2007.
        ``(b) Use of Funds.--Using any authority available to the Secretary,
    the Secretary shall use funds made available under this

    [[Page 116 STAT. 453]]

    section to carry out agricultural research, education, and extension
    activities (including through competitive grants) for the following:
                ``(1) To reduce the vulnerability of the United States food
            and agricultural system to chemical or biological attack.
                ``(2) To continue partnerships with institutions of higher
            education and other institutions to help form stable, long-term
            programs to enhance the biosecurity of the United States,
            including the coordination of the development, implementation,
            and enhancement of diverse capabilities for addressing threats
            to the Nation's agricultural economy and food supply with
            special emphasis on planning, training, outreach, and research
            activities related to vulnerability analyses, incident response,
            and detection and prevention technologies.
                ``(3) To make competitive grants to universities and
            qualified research institutions for research on
            counterbioterrorism.
                ``(4) To counter or otherwise respond to chemical or
            biological attack.

    ``SEC. 1485. <<NOTE: Grants. 7 USC 3352.>>  AGRICULTURE RESEARCH
                FACILITY EXPANSION AND SECURITY UPGRADES.

        ``(a) In General.--To enhance the security of agriculture in the
    United States against threats posed by bioterrorism, the Secretary shall
    make expansion or security upgrade grants on a competitive basis to
    colleges and universities (as defined in section 1404(4)).
        ``(b) Limitation on Grants.--Grants to a recipient under this
    section shall not exceed $10,000,000 in any fiscal year.
        ``(c) Requirements for Grants.--The Secretary shall make a grant
    under this section only if the grant applicant provides satisfactory
    assurances to the Secretary that--
                ``(1) sufficient funds are available to pay the non-Federal
            share of the cost of the proposed expansion or security
            upgrades; and
                ``(2) the proposed expansion or security upgrades meet such
            reasonable qualifications as may be established by the Secretary
            with respect to biosafety and biosecurity requirements necessary
            to protect facility staff, members of the public, and the food
            supply.

        ``(d) Additional Requirements for Grants for Facility Expansion.--
    The Secretary shall make a grant under this section for the expansion,
    renovation, remodeling, or alteration (collectively referred to in this
    section as ``expansion'') of a facility only if the grant applicant
    provides such assurances as the Secretary determines to be satisfactory
    to ensure the following:
                ``(1) For not less than 20 years after the grant is awarded,
            the facility shall be used for the purposes of the research for
            which the facility was expanded, as described in the grant
            application.
                ``(2) Sufficient funds will be available, as of the date of
            completion of the expansion, for the effective use of the
            facility for the purposes of the research for which the facility
            was expanded.
                ``(3) The proposed expansion--
                        ``(A) will increase the capability of the applicant
                    to conduct research for which the facility was expanded;
                    or
                        ``(B) is necessary to improve the quality of the
                    research of the applicant.

    [[Page 116 STAT. 454]]

        ``(e) Amount of Grant.--The amount of a grant awarded under this
    section shall be determined by the Secretary.
        ``(f) Federal Share.--The Federal share of the cost of any expansion
    or security upgrade carried out using funds from a grant provided under
    this section shall not exceed 50 percent.
        ``(g) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as are necessary for
    each fiscal year.''.
        (b) Sense of Congress on Increasing Capacity for Research on
    Biosecurity and Animal and Plant Health Diseases.--It is the sense of
    Congress 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.

    SEC. 7222. INDIRECT COSTS FOR SMALL BUSINESS INNOVATION RESEARCH GRANTS.

        Section 1462 of the National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 (7 U.S.C. 3310) is amended--
                (1) by inserting ``(a) In General.--'' before ``Except'';
            and
                (2) by adding at the end the following:

        ``(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. 7223. CARBON CYCLE RESEARCH.

        Section 221 of the Agricultural Risk Protection Act of 2000 (Public
    Law 106-224; 114 Stat. 407), as amended by section 9009 of this
    Act, <<NOTE: 7 USC 6711.>> is amended--
                (1) in subsection (a), by striking ``Of the amount'' and all
            that follows through ``to provide'' and inserting ``To the
            extent funds are made available for this purpose, the Secretary
            shall provide'';
                (2) in subsection (f), by striking ``under subsection (a)''
            and inserting ``for this section''; and
                (3) by adding at the end the following new subsection:

        ``(g) Authorization of Appropriations.--There are authorized to be
    appropriated for fiscal years 2002 through 2007 such sums as may be
    necessary to carry out this section.''.

            Subtitle C--Repeal of Certain Activities and Authorities

    SEC. 7301. FOOD SAFETY RESEARCH INFORMATION OFFICE AND NATIONAL
                CONFERENCE.

        (a) Repeal.--Subsections (b) and (c) of section 615 of the
    Agricultural Research, Extension, and Education Reform Act of 1998 (7
    U.S.C. 7654(b) and (c)) are repealed.
        (b) Conforming Amendments.--
                (1) Generally.--Section 615 of such Act is amended--
                        (A) in the section heading, by striking ``and
                    national conference'';
                        (B) by striking ``(a) Food Safety Research
                    Information Office.--'';

    [[Page 116 STAT. 455]]

                        (C) by redesignating paragraphs (1), (2), and (3) as
                    subsections (a), (b), and (c), respectively, and moving
                    the margins 2 ems to the left;
                        (D) in subsection (b) (as so redesignated), by
                    redesignating subparagraphs (A) and (B) as paragraphs
                    (1) and (2), respectively, and moving the margins 2 ems
                    to the left; and
                        (E) in subsection (c) (as so redesignated), by
                    striking ``this subsection'' and inserting ``this
                    section''.
                (2) Table of sections.--The table of sections for such Act
            is amended by striking ``and National Conference'' in the item
            relating to section 615.

    SEC. 7302. REIMBURSEMENT OF EXPENSES UNDER SHEEP PROMOTION, RESEARCH,
                AND INFORMATION ACT OF 1994.

        Section 617 of the Agricultural Research, Extension, and Education
    Reform Act of 1998 (Public Law 105-185; 112 Stat. 607) is repealed.

    SEC. 7303. MARKET EXPANSION RESEARCH.

        Section 1436 of the Food Security Act of 1985 (7 U.S.C. 1632) is
    repealed.

    SEC. 7304. NATIONAL ADVISORY BOARD ON AGRICULTURAL WEATHER.

        (a) Repeal.--Section 1639 of the Food, Agriculture, Conservation,
    and Trade Act of 1990 (7 U.S.C. 5853) is repealed.
        (b) Conforming Amendment.--Section 1640(b) of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (7 U.S.C. 5854(b)) is amended by
    striking ``take into'' and all that follows through ``Weather and''.

    SEC. 7305. AGRICULTURAL INFORMATION EXCHANGE WITH IRELAND.

        Section 1420 of the National Agricultural Research, Extension and
    Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat.
    1551) is repealed.

    SEC. 7306. PESTICIDE RESISTANCE STUDY.

        Section 1437 of the National Agricultural Research, Extension, and
    Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat.
    1558) is repealed.

    SEC. 7307. EXPANSION OF EDUCATION STUDY.

        Section 1438 of the National Agricultural Research, Extension, and
    Teaching Policy Act Amendments of 1985 (Public Law 99-198; 99 Stat.
    1559) is repealed.

    SEC. 7308. TASK FORCE ON 10-YEAR STRATEGIC PLAN FOR AGRICULTURAL
                RESEARCH FACILITIES.

        (a) Repeal.--Section 4 of the Research Facilities Act (7 U.S.C.
    390b) is repealed.
        (b) Conforming Amendment.--Section 2 of such Act (7 U.S.C. 390) is
    amended by striking paragraph (5).

                           Subtitle D--New Authorities

    SEC. 7401. <<NOTE: 7 USC 3319f note.>>  SUBTITLE DEFINITIONS.

        In this subtitle:

    [[Page 116 STAT. 456]]

                (1) Department.--The term ``Department'' means the
            Department of Agriculture.
                (2) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.

    SEC. 7402. RESEARCH EQUIPMENT GRANTS.

        The National Agricultural Research, Extension, and Teaching Policy
    Act of 1977 is amended by inserting after section 1462 (7 U.S.C. 3310)
    the following:

    ``SEC. 1462A. <<NOTE: 7 USC 3310a.>>  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 are authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2002 through 2007.''.

    SEC. 7403. <<NOTE: 7 USC 3319b note.>>  JOINT REQUESTS FOR PROPOSALS.

        (a) Purposes.--The purposes of this section are--
                (1) to reduce the duplication of administrative functions
            relating to grant awards and administration among Federal
            agencies conducting similar types of research, education, and
            extension programs;
                (2) to maximize the use of peer review resources in
            research, education, and extension programs; and
                (3) to reduce the burden on potential recipients that may
            offer similar proposals to receive competitive grants under
            different Federal programs in overlapping subject areas.

        (b) Authority.--The National Agricultural Research, Extension, and
    Teaching Policy Act of 1977 is amended by inserting after section 1473A
    (7 U.S.C. 3319a) the following:

    ``SEC. 1473B. <<NOTE: 7 USC 3319b.>>  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) Administration.--

    [[Page 116 STAT. 457]]

                ``(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.

        ``(c) Regulations.--The Secretary and a cooperating Federal agency
    may agree to make applicable to recipients of grants--
                ``(1) the post-award grant administration regulations
            applicable to recipients of grants from the Secretary; or
                ``(2) the post-award grant administration regulations
            applicable to recipients of grants from the cooperating Federal
            agency.

        ``(d) 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.''.

    SEC. 7404. <<NOTE: 7 USC 3101 note.>>  REVIEW OF AGRICULTURAL RESEARCH
                SERVICE.

        (a) In General.-- <<NOTE: Deadline. Establishment.>> Not later than
    90 days after the date of enactment of this Act, the Secretary shall
    establish a task force to--
                (1) conduct a review of the Agricultural Research Service;
            and
                (2) evaluate the merits of establishing one or more National
            Institutes focused on disciplines important to the progress of
            food and agricultural science.

        (b) Membership.--
                (1) In general.--The Task Force shall consist of 8 members,
            appointed by the Secretary, that--
                        (A) have a broad-based background in plant, animal,
                    and agricultural sciences research, food, nutrition,
                    biotechnology, crop production methods, environmental
                    science, or related disciplines; and
                        (B) are familiar with the role and infrastructure
                    used to conduct Federal and private research,
                    including--
                              (i) the Agricultural Research Service;
                              (ii) the National Institutes of Health;
                              (iii) the National Science Foundation;
                              (iv) the National Aeronautics and Space
                          Administration;
                              (v) the Department of Energy laboratory
                          system; or
                              (vi) the Cooperative State Research,
                          Education, and Extension Service.
                (2) Private sector.--Of the members appointed under
            paragraph (1), the Secretary shall appoint at least 6 members
            that are members of the private sector or come from institutions
            of higher education.
                (3) Plant and agricultural sciences research.--Of the
            members appointed under paragraph (1), the Secretary shall
            appoint at least 3 members that have an extensive background and
            preeminence in the field of plant, animal, and agricultural
            sciences research.
                (4) Chairperson.--Of the members appointed under paragraph
            (1), the Secretary shall designate a Chairperson that

    [[Page 116 STAT. 458]]

            has significant leadership experience in educational and
            research institutions and indepth knowledge of the research
            enterprises of the United States.
                (5) Consultation.--Before appointing members of the Task
            Force under this subsection, the Secretary shall consult with
            the National Academy of Sciences and the Office of Science and
            Technology Policy.

        (c) Duties.--The Task Force shall--
                (1) conduct a review of the purpose, efficiency,
            effectiveness, and impact on agricultural research of the
            Agricultural Research Service;
                (2) conduct a review and evaluation of the merits of
            establishing one or more National Institutes (such as National
            Institutes for Plant and Agricultural Sciences) focused on
            disciplines important to the progress of food and agricultural
            sciences, and, if establishment of one or more National
            Institutes is recommended, provide further recommendations to
            the Secretary, including the structure for establishing each
            Institute, the multistate area location of each Institute, and
            the amount of funding necessary to establish each Institute; and
                (3) submit the reports required by subsection (d).

        (d) <<NOTE: Deadline.>>  Reports.--Not later than 12 months after
    the date of enactment of this Act, the Task Force shall submit to the
    Committee on Agriculture of the House of Representatives, the Committee
    on Agriculture, Nutrition, and Forestry of the Senate, and the
    Secretary--
                (1) a report on the review and evaluation required under
            subsection (c)(1); and
                (2) a report on the review and evaluation required under
            subsection (c)(2).

        (e) Funding.--The Secretary shall use to carry out this section not
    more than 0.1 percent of the amount of appropriations available to the
    Agricultural Research Service for fiscal year 2003.

    SEC. 7405. <<NOTE: 7 USC 3319f.>>  BEGINNING FARMER AND RANCHER
                DEVELOPMENT PROGRAM.

        (a) Definition of Beginning Farmer or Rancher.--In this section, the
    term ``beginning farmer or rancher'' means a person that--
                (1)(A) has not operated a farm or ranch; or
                (B) has operated a farm or ranch for not more than 10 years;
            and
                (2) meets such other criteria as the Secretary may
            establish.

        (b) Program.--The Secretary shall establish a beginning farmer and
    rancher development program to provide training, education, outreach,
    and technical assistance initiatives for beginning farmers or ranchers.
        (c) Grants.--
                (1) In general.--In carrying out this section, the Secretary
            shall make competitive grants to support new and established
            local and regional training, education, outreach, and technical
            assistance initiatives for beginning farmers or ranchers,
            including programs and services (as appropriate) relating to--
                        (A) mentoring, apprenticeships, and internships;
                        (B) resources and referral;

    [[Page 116 STAT. 459]]

                        (C) assisting beginning farmers or ranchers in
                    acquiring land from retiring farmers and ranchers;
                        (D) innovative farm and ranch transfer strategies;
                        (E) entrepreneurship and business training;
                        (F) model land leasing contracts;
                        (G) financial management training;
                        (H) whole farm planning;
                        (I) conservation assistance;
                        (J) risk management education;
                        (K) diversification and marketing strategies;
                        (L) curriculum development;
                        (M) understanding the impact of concentration and
                    globalization;
                        (N) basic livestock and crop farming practices;
                        (O) the acquisition and management of agricultural
                    credit;
                        (P) environmental compliance;
                        (Q) information processing; and
                        (R) other similar subject areas of use to beginning
                    farmers or ranchers.
                (2) Eligibility.--To be eligible to receive a grant under
            this subsection, the recipient shall be a collaborative State,
            tribal, local, or regionally-based network or partnership of
            public or private entities, which may include--
                        (A) a State cooperative extension service;
                        (B) a Federal, State, or tribal agency;
                        (C) a community-based and nongovernmental
                    organization;
                        (D) a college or university (including an
                    institution awarding an associate's degree) or
                    foundation maintained by a college or university; or
                        (E) any other appropriate partner, as determined by
                    the Secretary.
                (3) Term of grant.--The term of a grant under this
            subsection shall not exceed 3 years.
                (4) Matching requirement.--To be eligible to receive a grant
            under this subsection, a recipient shall provide a match in the
            form of cash or in-kind contributions in an amount equal to 25
            percent of the funds provided by the grant.
                (5) Set-aside.--Not less than 25 percent of funds used to
            carry out this subsection for a fiscal year shall be used to
            support programs and services that address the needs of--
                        (A) limited resource beginning farmers or ranchers
                    (as defined by the Secretary);
                        (B) socially disadvantaged beginning farmers or
                    ranchers (as defined in section 355(e) of the
                    Consolidated Farm and Rural Development Act (7 U.S.C.
                    2003(e)); and
                        (C) farmworkers desiring to become farmers or
                    ranchers.
                (6) Prohibition.--A grant made under this subsection may not
            be used for the planning, repair, rehabilitation, acquisition,
            or construction of a building or facility.
                (7) Administrative costs.--The Secretary shall use not more
            than 4 percent of the funds made available to carry out this
            subsection for administrative costs incurred by the Secretary in
            carrying out this section.

        (d) Education Teams.-- <<NOTE: Establishment.>>

    [[Page 116 STAT. 460]]

                (1) In general.--In carrying out this section, the Secretary
            shall 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.
                (2) Curriculum.--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.
                (3) Composition.--In establishing an education team for a
            specific program or workshop, the Secretary shall, to the
            maximum extent practicable--
                        (A) obtain the short-term services of specialists
                    with knowledge and expertise in programs serving
                    beginning farmers or ranchers; and
                        (B) 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.
                (4) Cooperation.--
                        (A) In general.--In carrying out this subsection,
                    the Secretary shall cooperate, to the maximum extent
                    practicable, with--
                              (i) State cooperative extension services;
                              (ii) Federal and State agencies;
                              (iii) community-based and nongovernmental
                          organizations;
                              (iv) colleges and universities (including an
                          institution awarding an associate's degree) or
                          foundations maintained by a college or university;
                          and
                              (v) other appropriate partners, as determined
                          by the Secretary.
                        (B) Cooperative agreement.--Notwithstanding chapter
                    63 of title 31, United States Code, the Secretary may
                    enter into a cooperative agreement to reflect the terms
                    of any cooperation under subparagraph (A).

        (e) Curriculum and Training Clearinghouse.--The Secretary shall
    establish an online clearinghouse that makes available to beginning
    farmers or ranchers education curricula and training materials and
    programs, which may include online courses for direct use by beginning
    farmers or ranchers.
        (f) Stakeholder Input.--In carrying out this section, the Secretary
    shall seek stakeholder input from--
                (1) beginning farmers and ranchers;
                (2) national, State, tribal, and local organizations and
            other persons with expertise in operating beginning farmer and
            rancher programs; and
                (3) the Advisory Committee on Beginning Farmers and Ranchers
            established under section 5 of the Agricultural Credit
            Improvement Act of 1992 (7 U.S.C. 1929 note; Public Law 102-
            554).

        (g) Participation by Other Farmers and Ranchers.--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

    [[Page 116 STAT. 461]]

    is appropriate and will not detract from the primary purpose of
    educating beginning farmers and ranchers.
        (h) Authorization of Appropriations.--There are authorized to be
    appropriated to carry out this section such sums as may be necessary for
    each of fiscal years 2002 through 2007.

    SEC. 7406. SENSE OF CONGRESS REGARDING DOUBLING OF FUNDING FOR
                AGRICULTURAL RESEARCH.

        It is the sense of Congress that--
                (1) Federal funding for food and agricultural research has
            been essentially constant for 2 decades, putting at risk the
            scientific base on which food and agricultural advances have
            been made;
                (2) the resulting increase in the relative proportion of
            private sector, industry investments in food and agricultural
            research has led to questions about the independence and
            objectivity of research and outreach conducted by the Federal
            and university research sectors; and
                (3) funding for food and agricultural research should be at
            least doubled over the next 5 fiscal years--
                        (A) to restore the balance between public and
                    private sector funding for food and agricultural
                    research; and
                        (B) to maintain the scientific base on which food
                    and agricultural advances are made.

    SEC. 7407. <<NOTE: 7 USC 5925c.>>  ORGANIC PRODUCTION AND MARKET DATA
                INITIATIVES.

        The Secretary shall ensure that segregated data on the production
    and marketing of organic agricultural products is included in the
    ongoing baseline of data collection regarding agricultural production
    and marketing.

    SEC. 7408. <<NOTE: 7 USC 5925d.>>  INTERNATIONAL ORGANIC RESEARCH
                COLLABORATION.

        The Secretary, acting through the Agricultural Research Service
    (including the National Agricultural Library) and the Economic Research
    Service, shall facilitate access by research and extension
    professionals, farmers, and other interested persons in the United
    States to, and the use by those persons of, organic research conducted
    outside the United States.

    SEC. 7409. <<NOTE: 7 USC 5925b note.>>  REPORT ON PRODUCERS AND HANDLERS
                OF ORGANIC AGRICULTURAL PRODUCTS.

        Not <<NOTE: Deadline.>>  later than 1 year after funds are made
    available to carry out this section, the Secretary shall submit to
    Congress a report that--
                (1) describes--
                        (A) the extent to which producers and handlers of
                    organic agricultural products are contributing to
                    research and promotion programs of the Department;
                        (B) the extent to which producers and handlers of
                    organic agricultural products are surveyed for ideas for
                    research and promotion;
                        (C) ways in which the programs reflect the
                    contributions made by producers and handlers of organic
                    agricultural products and directly benefit the producers
                    and handlers; and
                        (D) the implementation of initiatives that directly
                    benefit organic producers and handlers; and

    [[Page 116 STAT. 462]]

                (2) evaluates industry and other proposals for improving the
            treatment of certified organic agricultural products under
            Federal marketing orders, including proposals to target
            additional resources for research and promotion of organic
            products and to differentiate between certified organic and
            other products in new or existing volume limitations or other
            orderly marketing requirements.

    SEC. 7410. <<NOTE: Deadline.>>  REPORT ON GENETICALLY MODIFIED PEST-
                PROTECTED PLANTS.

        It is the sense of Congress that, not later than 1 year after the
    date of enactment of this Act, the Secretary should--
                (1) review the recommendations of the Committee on
            Genetically Modified Pest-Protected Plants of the Board on
            Agriculture and Natural Resources of the National Research
            Council made during 2000 and the Committee on Environmental
            Impacts Associated with Commercialization of Transgenic Plants
            made during 2002, concerning food safety, ecological research,
            monitoring needs for transgenic crops with plant incorporated
            protectants, and the environmental effects of transgenic plants;
            and
                (2) submit to the Committee on Agriculture of the House of
            Representatives and the Committee on Agriculture, Nutrition, and
            Forestry of the Senate a report that describes actions taken to
            implement those recommendations by agencies within the
            Department, including agencies that develop or implement
            programs or objectives relating to marketing, regulation, food
            safety, research, education, or economics.

    SEC. 7411. <<NOTE: 7 USC 5925a note.>>  STUDY OF NUTRIENT BANKING.

        (a) In General.--The Secretary may conduct a study to evaluate
    nutrient banking for the purpose of enhancing the health and viability
    of watersheds in areas with large concentrations of animal producing
    units.
        (b) Components.--In conducting any study under subsection (a), the
    Secretary shall evaluate the costs, needs, and means by which litter may
    be collected and distributed outside the applicable watershed to reduce
    potential point source and nonpoint source phosphorous pollution.
        (c) Report.--The Secretary shall submit to the Committee on
    Agriculture of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate a report that
    describes the results of any study conducted under subsection (a).

    SEC. 7412. GRANTS FOR YOUTH ORGANIZATIONS.

        Title IV of the Agricultural Research, Extension, and Education
    Reform Act of 1998 (7 U.S.C. 7621 et seq.) (as amended by section
    7206(e)) is amended by adding at the end the following:

    ``SEC. 410. <<NOTE: 7 USC 7630.>>  GRANTS FOR YOUTH ORGANIZATIONS.

        ``(a) In General.--The Secretary, acting through the Administrator
    of the Cooperative State Research, Education, and Extension Service,
    shall make grants to the Girl Scouts of the United States of America,
    the Boy Scouts of America, the National 4-H Council, and the National
    FFA Organization to establish pilot projects to expand the programs
    carried out by the organizations in rural areas and small towns
    (including, with respect to the National

    [[Page 116 STAT. 463]]

    4-H Council, activities provided for in Public Law 107-19 (115 Stat.
    153)).
        ``(b) Funding.--Of the funds of the Commodity Credit Corporation,
    the Secretary shall make available $8,000,000 for fiscal year 2002,
    which shall remain available until expended.
        ``(c) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section such sums as are necessary for
    each of fiscal years 2003 through 2007.''.

                            Subtitle E--Miscellaneous

    SEC. 7501. <<NOTE: 7 USC 3361 note.>>  RESIDENT INSTRUCTION AND DISTANCE
                EDUCATION AT INSTITUTIONS OF HIGHER EDUCATION IN UNITED
                STATES INSULAR AREAS.

        (a) Purpose.--It is the purpose of this subtitle to promote and
    strengthen higher education in the food and agricultural sciences at
    institutions of higher education (as defined in section 101(a) of the
    Higher Education Act of 1965 (20 U.S.C. 1001(a))) that have demonstrable
    capacity to carry out teaching and extension programs in food and
    agricultural sciences and that are located in the insular areas of the
    Commonwealth of Puerto Rico, the Virgin Islands of the United States,
    Guam, American Samoa, the Commonwealth of the Northern Mariana Islands,
    the Federated States of Micronesia, the Republic of the Marshall
    Islands, or the Republic of Palau by formulating and administering
    programs to enhance teaching programs in agriculture, natural resources,
    forestry, veterinary medicine, home economics, and disciplines closely
    allied to the food and agriculture production and delivery systems.

    SEC. 7502. DEFINITIONS.

        (a) In General.--Section 1404 of the National Agricultural Research,
    Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103) is amended--
                (1) by redesignating paragraphs (10) through (17) as
            paragraphs (11) through (18), respectively;
                (2) by inserting after paragraph (9) the following:
                ``(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; and
                        ``(H) the Virgin Islands of the United States.'';
                    and
                (3) by striking paragraph (13) (as so redesignated) and
            inserting the following:
                ``(13) State.--The term `State' means--
                        ``(A) a State;
                        ``(B) the District of Columbia; and
                        ``(C) any insular area.''.

        (b) Effect <<NOTE: 7 USC 3103 note.>>  of amendments.--The
    amendments made by subsection (a) shall not affect any basis for
    distribution of funds by formula (in effect on the date of enactment of
    this Act) to--
                (1) the Federated States of Micronesia;

    [[Page 116 STAT. 464]]

                (2) the Republic of the Marshall Islands; or
                (3) the Republic of Palau.

    SEC. 7503. RESIDENT INSTRUCTION AND DISTANCE EDUCATION GRANTS PROGRAM
                FOR INSULAR AREA INSTITUTIONS OF HIGHER EDUCATION.

        The National Agricultural Research, Extension, and Teaching Policy
    Act of 1977 (7 U.S.C. 3101 et seq.) is amended by adding at the end the
    following:

         ``Subtitle O--Institutions of Higher Education in Insular Areas

    ``SEC. 1489. <<NOTE: 7 USC 3361.>>  DEFINITION.

        ``For the purposes of this subtitle, the term `eligible institution'
    means an institution of higher education (as defined in section 101(a)
    of the Higher Education Act of 1965 (20 U.S.C. 1001(a)) in an insular
    area that has demonstrable capacity to carry out teaching and extension
    programs in the food and agricultural sciences.

    ``SEC. 1490. <<NOTE: 7 USC 3362.>>  DISTANCE EDUCATION GRANTS FOR
                INSULAR AREAS.

        ``(a) In General.--The Secretary may make competitive or
    noncompetitive grants to eligible institutions in insular areas to
    strengthen the capacity of such 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; 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 eligible institutions in the Atlantic and Pacific
    Oceans.

    [[Page 116 STAT. 465]]

        ``(e) Matching requirement.--
                ``(1) In general.--The Secretary may establish a requirement
            that an eligible 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 Secretary shall retain an
            option to waive the requirement for an eligible 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 such sums as may be necessary for
    each of fiscal years 2002 through 2007.

    ``SEC. 1491. <<NOTE: 7 USC 3363.>>  RESIDENT INSTRUCTION GRANTS FOR
                INSULAR AREAS.

        ``(a) In General.--The Secretary of Agriculture shall make
    competitive grants to eligible institutions to--
                ``(1) strengthen institutional educational capacities,
            including libraries, curriculum, faculty, scientific
            instrumentation, instruction delivery systems, and student
            recruitment and retention, in order to respond to identified
            State, regional, national, or international education needs in
            the food and agricultural sciences;
                ``(2) attract and support undergraduate and graduate
            students in order to educate them in identified areas of
            national need in the food and agriculture sciences;
                ``(3) facilitate cooperative initiatives between two or more
            insular area eligible institutions, or between those
            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; and
                ``(4) conduct undergraduate scholarship programs to assist
            in meeting national needs for training food and agricultural
            scientists.

        ``(b) Grant Requirements.--
                ``(1) The Secretary of Agriculture shall ensure that each
            eligible institution, prior to receiving grant funds under
            subsection (a), shall have a significant demonstrable commitment
            to higher education programs in the food and agricultural
            sciences and to each specific subject area for which grant funds
            under this section are to be used.
                ``(2) The Secretary of Agriculture may require that any
            grant awarded under this section contain provisions that require
            funds to be targeted to meet the needs identified in section
            1402.

        ``(e) Authorization of appropriations.--There are authorized to be
    appropriated such sums as are necessary for each of the fiscal years
    2002 through 2007 to carry out this section.''.

    SEC. 7504. DECLARATION OF EXTRAORDINARY EMERGENCY AND RESULTING
                AUTHORITIES.

        (a) Review of Payment of Compensation.--Section 415(e) of the Plant
    Protection Act (7 U.S.C. 7715(e)) is amended by inserting before the
    final period the following: ``or a review of longer than 60 days by any
    officer or employee of the Federal

    [[Page 116 STAT. 466]]

    Government other than the Secretary or the designee of the Secretary''.
        (b) Review of Certain Decisions.--Section 442 of the Plant
    Protection Act (7 U.S.C. 7772) is amended by adding at the end the
    following new subsection:
        ``(c) Secretarial Discretion.--The action of any officer, employee,
    or agent of the Secretary in carrying out this Act, including
    determining the amount of and making any payment authorized to be made
    under this title, shall not be subject to a review of longer than 60
    days by any officer or employee of the Federal Government other than the
    Secretary or the designee of the Secretary.''.
        (c) Methyl Bromide.--The Plant Protection Act (7 U.S.C. 7701 et
    seq.) is amended by inserting after section 418 the following new
    section:

    ``SEC. 419. <<NOTE: 7 USC 7719.>>  METHYL BROMIDE.

        ``(a) In General.--The Secretary, upon request of State, local, or
    tribal authorities, shall determine whether methyl bromide treatments or
    applications required by State, local, or tribal authorities to prevent
    the introduction, establishment, or spread of plant pests (including
    diseases) or noxious weeds should be authorized as an official control
    or official requirement. The Secretary shall not authorize such
    treatments or applications unless the Secretary finds there is no other
    registered, effective, and economically feasible alternative available.
        ``(b) Methyl Bromide Alternative.--The Secretary, in consultation
    with State, local and tribal authorities, shall establish a program to
    identify alternatives to methyl bromide for treatment and control of
    plant pests and weeds. For uses where no registered, effective,
    economically feasible alternatives available can currently be
    identified, the Secretary shall initiate research programs to develop
    alternative methods of control and treatment.
        ``(c) <<NOTE: Deadline. Publication.>>  Registry.--Not later than
    180 days after the date of enactment of this section, the Secretary
    shall publish, and thereafter maintain, a registry of State, local, and
    tribal requirements authorized by the Secretary under this section.

        ``(d) Administration.--
                ``(1) <<NOTE: Deadline.>>  Timeline for determination.--Upon
            the promulgation of regulations to carry out this section, the
            Secretary shall make the determination required by subsection
            (a) not later than 90 days after receiving the request for such
            a determination.
                ``(2) Construction.--Nothing in this section shall be
            construed to alter or modify the authority of the Administrator
            of the Environmental Protection Agency or to provide any
            authority to the Secretary of Agriculture under the Clean Air
            Act or regulations promulgated under the Clean Air Act.''.

    SEC. 7505. AGRICULTURAL BIOTECHNOLOGY RESEARCH AND DEVELOPMENT FOR
                DEVELOPING COUNTRIES.

        Title IV of the Agricultural Research, Extension, and Education
    Reform Act of 1998 (7 U.S.C. 7621 et seq.) is amended by adding at the
    end the following:

    [[Page 116 STAT. 467]]

    ``SEC. 411. <<NOTE: 7 USC 7631.>>  AGRICULTURAL BIOTECHNOLOGY RESEARCH
                AND DEVELOPMENT FOR DEVELOPING COUNTRIES.

        ``(a) Eligible entity.--In this section, the term `eligible entity'
    means--
                        ``(A) an institution of higher education that offers
                    a curriculum in agriculture or the biosciences;
                        ``(B) a nonprofit organization; or
                        ``(C) a consortium of for-profit institutions and
                    agricultural research institutions.

        ``(b) Grant Program.--
                ``(1) In general.--The Secretary (acting through the Foreign
            Agricultural Service) shall establish and administer a program
            to make competitive grants to eligible entities to develop
            agricultural biotechnology for developing countries.
                ``(2) Use of funds.--Funds provided to an eligible entity
            under this section may be used for projects that use
            biotechnology to--
                        ``(A) enhance the nutritional content of
                    agricultural products that can be grown in developing
                    countries;
                        ``(B) increase the yield and safety of agricultural
                    products that can be grown in developing countries;
                        ``(C) increase the yield of agricultural products
                    that are drought- and stress-resistant and that can be
                    grown in developing countries;
                        ``(D) extend the growing range of crops that can be
                    grown in developing countries;
                        ``(E) enhance the shelf-life of fruits and
                    vegetables grown in developing countries;
                        ``(F) develop environmentally sustainable
                    agricultural products that can be grown in developing
                    countries; and
                        ``(G) develop vaccines to immunize against life-
                    threatening illnesses and other medications that can be
                    administered by consuming genetically-engineered
                    agricultural products.

        ``(c) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out this section for
    each of fiscal years 2002 through 2007.''.

    SEC. 7506. LAND ACQUISITION AUTHORITY, NATIONAL PEANUT RESEARCH
                LABORATORY, DAWSON, GEORGIA.

        The limitation on the authority of the Agricultural Research Service
    to acquire lands by purchase using funds appropriated under the heading
    Agricultural Research Service-salaries and expenses in the Agriculture,
    Rural Development, Food and Drug Administration, and Related Agencies
    Appropriations Act, 2002 (Public Law 107-76; 115 Stat. 708), shall not
    apply to the purchase of land for a research farm for the National
    Peanut Research Laboratory in Dawson, Georgia, for which a lease with an
    option to purchase has been entered into before the date of enactment of
    this Act.

    [[Page 116 STAT. 468]]

                              TITLE VIII--FORESTRY

             Subtitle A--Cooperative Forestry Assistance Act of 1978

    SEC. 8001. REPEAL OF FORESTRY INCENTIVES PROGRAM AND STEWARDSHIP
                INCENTIVE PROGRAM.

        (a) Repeal.--The Cooperative Forestry Assistance Act of 1978 is
    amended by striking section 4 (16 U.S.C. 2103) and section 6 (16 U.S.C.
    2103b).

        (b) Use <<NOTE: 16 USC 2103 note.>> of Remaining Funds.--
    Notwithstanding the amendment made by subsection (a), the Secretary of
    Agriculture may use funds appropriated for fiscal year 2002 for the
    forestry incentives program or the stewardship incentive program, but
    not expended before the date of enactment of this Act, to carry out
    sections 4 and 6 of the Cooperative Forestry Assistance Act of 1978, as
    in effect on the date before the date of enactment of this Act.

    SEC. 8002. ESTABLISHMENT OF FOREST LAND ENHANCEMENT PROGRAM.

        (a) Purposes.-- <<NOTE: 16 USC 2103 note.>> The purposes of this
    section are--
                (1) to strengthen the commitment of the Secretary of
            Agriculture 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
                (2) 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) Forest Land Enhancement Program.--The Cooperative Forestry
    Assistance Act of 1978 is amended by inserting after section 3 (16
    U.S.C. 2102) the following:

    ``SEC. 4. <<NOTE: 16 USC 2103.>>  FOREST LAND ENHANCEMENT PROGRAM.

        ``(a) Establishment.--
                ``(1) In general.--The Secretary of Agriculture shall
            establish a forest land enhancement program--
                        ``(A) to provide financial assistance to State
                    foresters; and
                        ``(B) to encourage the long-term sustainability of
                    nonindustrial private forest lands in the United States
                    by assisting the owners of nonindustrial private forest
                    lands, through State foresters, in more actively
                    managing the nonindustrial private forest lands 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 and consultation.--The Secretary, acting
            through State foresters, shall implement the program--
                        ``(A) in coordination with the State Forest
                    Stewardship Coordinating Committees; and
                        ``(B) in consultation with other Federal, State, and
                    local natural resource management agencies, institutions

    [[Page 116 STAT. 469]]

                    of higher education, and a broad range of private sector
                    interests.

        ``(b) Program Objectives.--In implementing the program, the
    Secretary shall target resources to achieve the following objectives:
                ``(1) Investing in practices to establish, restore, protect,
            manage, maintain, and enhance the health and productivity of the
            nonindustrial private forest lands in the United States for
            timber, habitat for flora and fauna, soil, water, and air
            quality, wetlands, and riparian buffers.
                ``(2) Ensuring that afforestation, reforestation,
            improvement of poorly stocked stands, timber stand improvement,
            practices necessary to improve seedling growth and survival, and
            growth enhancement practices occur where needed to enhance and
            sustain the long-term productivity of timber and nontimber
            forest resources to help meet future public demand for all
            forest resources and provide environmental benefits.
                ``(3) Reducing the risks and helping restore, recover, and
            mitigate the damage to forests caused by fire, insects, invasive
            species, disease, and damaging weather.
                ``(4) Increasing and enhancing carbon sequestration
            opportunities.
                ``(5) Enhancing implementation of agroforestry practices.
                ``(6) Maintaining and enhancing the forest landbase and
            leverage State and local financial and technical assistance to
            owners that promote the same conservation and environmental
            values.
                ``(7) Preserving the aesthetic quality of nonindustrial
            private forest lands and providing opportunities for outdoor
            recreation.

        ``(c) State Priority Plan.--
                ``(1) Development.--The State Forester and State Forest
            Stewardship Coordinating Committee of a State shall jointly
            develop and submit to the Secretary a State priority plan that
            is intended to promote forest management objectives in that
            State.
                ``(2) <<NOTE: Deadline.>>  Report.--Not later than September
            30, 2006, each State that implemented a State priority plan
            shall submit to the Secretary a report describing the status of
            all activities and practices funded under the program as of that
            date.

        ``(d) Owner Eligibility for Assistance.--
                ``(1) Eligibility criteria.--To be eligible for cost-share
            assistance under the program, an owner of nonindustrial private
            forest lands shall agree--
                        ``(A) to develop and implement, in cooperation with
                    a State forester, another State official, or a
                    professional resources manager, a management plan that--
                              ``(i) except as provided in paragraph (2) or
                          (3), provides for the treatment of not more than
                          1,000 acres of nonindustrial private forest lands;
                              ``(ii) is approved by the State forester; and
                              ``(iii) addresses site specific activities and
                          practices; and
                        ``(B) to implement approved activities and practices
                    in a manner consistent with the management plan for a
                    period of not less than 10 years, unless the State
                    forester approves a modification to the plan.

    [[Page 116 STAT. 470]]

                ``(2) Public benefit exception.--The Secretary may increase
            the acreage limitation specified in paragraph (1)(A)(i) to not
            more than 5,000 acres for an owner of nonindustrial private
            forest lands if the Secretary, in consultation with the State
            forester, determines that significant public benefits will
            accrue as a result of the provision of cost-share assistance
            under the program for the treatment of the additional acreage.
                ``(3) Plan development exception.--An owner may receive
            cost-share assistance under the program for the purpose of
            developing a management plan under subsection (e) that provides
            for the treatment of acreage in excess of the acreage
            limitations specified in paragraphs (1)(A)(i) and (2), except
            that the owner's eligibility for cost-share assistance to
            implement approved activities and practices under the management
            plan remains subject to the acreage limitation specified in
            paragraph (1)(A)(i) or, if the Secretary makes the determination
            described in paragraph (2), the acreage limitation specified in
            that paragraph.

        ``(e) Management Plan.--
                ``(1) Submission and content.--An owner of nonindustrial
            private forest lands that seeks to participate in the program
            shall submit to the State forester of the State in which the
            lands are located a management plan that--
                        ``(A) identifies and describes projects and
                    activities to be carried out by the owner to protect or
                    enhance soil, water, air, range and aesthetic quality,
                    recreation, timber, water, wetland, or fish and wildlife
                    resources on the lands in a manner that is compatible
                    with the objectives of the owner;
                        ``(B) addresses any criteria established by the
                    State and the applicable Committee; and
                        ``(C) meets the other requirements of this section.
                ``(2) Lands covered.--At a minimum, the management plan
            shall apply to those portions of the nonindustrial private
            forest lands of the owner on which any project or activity
            funded under the program will be carried out. In a case in which
            a project or activity may affect acreage outside the portion of
            the land on which the project or activity is carried out, the
            management plan shall apply to all lands of the owner that are
            in forest cover and may be affected by the project or activity.

        ``(f) Approved Activities.--
                ``(1) State list.--The Secretary 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. The Secretary shall develop the list for a State in
            consultation with the State forester and the Committee for that
            State.
                ``(2) Types of activities.--Approved activities and
            practices under paragraph (1) may consist of activities and
            practices for the following purposes:
                        ``(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.

    [[Page 116 STAT. 471]]

                        ``(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 management, maintenance, restoration, or
                    development of habitat for plants, fish, and wildlife.
                        ``(F) The control, detection, monitoring, and
                    prevention of the spread of invasive species and pests
                    on nonindustrial private forest lands.
                        ``(G) The restoration of nonindustrial private
                    forest land affected by invasive species and pests.
                        ``(H) The conduct of other management activities,
                    such as the reduction of hazardous fuels, 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.
                        ``(I) The development of management plans;
                        ``(J) The conduct of energy conservation and carbon
                    sequestration activities.
                        ``(K) The conduct of other activities approved by
                    the Secretary, in consultation with the State forester
                    and the appropriate Committees.

        ``(g) Reimbursement of Eligible Activities.--
                ``(1) In general.--In the case of an eligible owner that has
            an approved management plan, the Secretary shall share the cost
            of implementing the approved activities and practices that the
            Secretary determines are appropriate.
                ``(2) Rate.--The Secretary shall determine the appropriate
            reimbursement rate for cost-share payments under paragraph (1)
            and the schedule for making those payments.
                ``(3) Maximum cost share.--The Secretary shall not make
            cost-share payments under this subsection to an owner in an
            amount in excess of 75 percent, or a lower percentage as
            determined by the State forester, of the total cost to the owner
            to implement the approved activities and practices under the
            management plan.
                ``(4) Aggregate payment limit.--The Secretary shall
            determine the maximum aggregate amount of cost-share payments
            that an owner may receive under the program.
                ``(5) Consultation.--The Secretary shall make determinations
            under this subsection in consultation with the State forester.

        ``(h) Recapture.--
                ``(1) In general.--The Secretary shall establish and
            implement a mechanism to recapture payments made to an owner in
            the event that the owner fails to implement an approved activity
            or practice specified in the management plan for which the owner
            received cost-share payments.
                ``(2) Additional remedy.--The remedy provided in paragraph
            (1) is in addition to any other remedy available to the
            Secretary.

        ``(i) Distribution of Cost-Share Funds.--The Secretary, acting
    through the State foresters, shall distribute funds available for cost
    sharing under the program only after giving appropriate consideration to
    the following factors:

    [[Page 116 STAT. 472]]

                ``(1) The public benefits that would result from the
            distribution.
                ``(2) The total acreage of nonindustrial private forest
            lands in each State.
                ``(3) The potential productivity of those lands, as
            determined by the Secretary.
                ``(4) The number of owners eligible for cost sharing in each
            State.
                ``(5) The opportunities to enhance nontimber resources on
            those lands, including--
                        ``(A) the protection of riparian buffers and forest
                    wetland;
                        ``(B) the preservation of fish and wildlife habitat;
                        ``(C) the enhancement of soil, air, and water
                    quality; and
                        ``(D) the preservation of aesthetic quality and
                    opportunities for outdoor recreation.
                ``(6) The anticipated demand for timber and nontimber
            resources in each State.
                ``(7) The need to improve forest health to minimize the
            damaging effects of catastrophic fire, insects, disease, or
            weather.
                ``(8) The need and demand for agroforestry practices in each
            State.
                ``(9) The need to maintain and enhance the forest landbase.
                ``(10) The need for afforestation, reforestation, and timber
            stand improvement.

        ``(j) Availability of Funds.--The Secretary shall use $100,000,000
    of funds of the Commodity Credit Corporation to carry out the Program
    during the period beginning on the date of enactment of the Farm
    Security and Rural Investment Act of 2002 and ending on September 30,
    2007.
        ``(k) Definitions.--In this section:
                ``(1) Nonindustrial private forest lands.--The term
            `nonindustrial private forest lands' means rural lands, as
            determined by the Secretary, that--
                        ``(A) have existing tree cover or are suitable for
                    growing trees; and
                        ``(B) are owned by any nonindustrial private
                    individual, group, association, corporation, Indian
                    tribe, or other private legal entity so long as the
                    individual, group, association, corporation, tribe, or
                    entity has definitive decision-making authority over the
                    lands.
                ``(2) Committee.--The terms `State Forest Stewardship
            Coordinating Committee' and `Committee' means a State Forest
            Stewardship Coordinating Committee established under section
            19(b).
                ``(3) 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).
                ``(4) Owner.--The term `owner' means an owner of
            nonindustrial private forest land.
                ``(5) Program.--The term `program' means the forest land
            enhancement program established by this section.
                ``(6) Secretary.--The term `Secretary' means the Secretary
            of Agriculture.

    [[Page 116 STAT. 473]]

                ``(7) State forester.--The term `State forester' means the
            director or other head of a State Forestry Agency or equivalent
            State official.''.

        (c) Conforming Amendment.--Section 246(b)(2) of the Department of
    Agriculture Reorganization Act of 1994 (7 U.S.C. 6962(b)(2)) is amended
    by striking ``forestry incentive program'' and inserting ``forest land
    enhancement program''.

    SEC. 8003. <<NOTE: 16 USC 2106c note.>>  ENHANCED COMMUNITY FIRE
                PROTECTION.

        (a) Findings.--Congress finds the following:
                (1) The severity and intensity of wildland fires has
            increased dramatically over the past few decades as a result of
            past fire and land management policies.
                (2) The record 2000 fire season is a prime example of what
            can be expected if action is not taken.
                (3) Wildland fires threaten not only the forested resources
            of the United States, but also the thousands of communities
            intermingled with the wildlands in the wildland-urban interface.
                (4) The National Fire Plan, if implemented to achieve
            appropriate priorities, is the proper, coordinated, and most
            effective means to address the issue of wildfires.
                (5) While adequate authorities exist to tackle the wildfire
            issues at the landscape level on Federal lands, there is limited
            authority to take action on most private lands, and the largest
            threat to life and property exists on private lands.
                (6) There is a significant Federal interest in enhancing
            community protection from wildfire.

        (b) Enhanced Protection.--The Cooperative Forestry Assistance Act of
    1978 is amended by inserting after section 10 (16 U.S.C. 2106) the
    following:

    ``SEC. 10A. <<NOTE: 16 USC 2106c.>>  ENHANCED COMMUNITY FIRE PROTECTION.

        ``(a) Cooperative Management Related to Wildfire Threats.--The
    Secretary may cooperate with State foresters and equivalent State
    officials in the management of lands in the United States for the
    following purposes:
                ``(1) Aid in wildfire prevention and control.
                ``(2) Protect communities from wildfire threats.
                ``(3) Enhance the growth and maintenance of trees and
            forests that promote overall forest health.
                ``(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) Establishment; purpose.--The Secretary shall establish
            a Community and Private Land Fire Assistance program (in this
            subsection referred to as the `Program')--
                        ``(A) to focus the Federal role in promoting optimal
                    firefighting efficiency at the Federal, State, and local
                    levels;
                        ``(B) to augment Federal projects that establish
                    landscape level protection from wildfires;
                        ``(C) to expand outreach and education programs to
                    homeowners and communities about fire prevention; and
                        ``(D) to establish space around homes and property
                    of private landowners that is defensible against
                    wildfires.

    [[Page 116 STAT. 474]]

                ``(2) Administration and implementation.--The Program shall
            be administered by the Forest Service and implemented through
            State foresters or equivalent State officials.
                ``(3) Components.--In coordination with existing authorities
            under this Act, the Secretary, in consultation with the State
            forester or equivalent State official, may undertake on non-
            Federal lands--
                        ``(A) fuel hazard mitigation and prevention;
                        ``(B) invasive species management;
                        ``(C) multiresource wildfire planning;
                        ``(D) community protection planning;
                        ``(E) community and landowner education enterprises,
                    including the program known as FIREWISE;
                        ``(F) market development and expansion;
                        ``(G) improved wood utilization; and
                        ``(H) special restoration projects.
                ``(4) Consent required.--Program activities undertaken by
            the Secretary on non-Federal lands shall be undertaken only with
            the consent of the owner of the lands.
                ``(5) Considerations.--The Secretary shall use persons in
            the local community wherever possible to carry out projects
            under the Program.

        ``(c) Consultation.--In carrying out this section, the Secretary
    shall consult with the Administrator of the United States Fire
    Administration, the Director of the National Institute of Standards and
    Technology, and the heads of other Federal agencies, as necessary.
        ``(d) Authorization of Appropriations.--There are hereby authorized
    to be appropriated to the Secretary to carry out this section--
                ``(1) $35,000,000 for each of fiscal years 2002 through
            2007; and
                ``(2) such sums as are necessary for fiscal years
            thereafter.''.

                      Subtitle B--Amendments to Other Laws

    SEC. 8101. SUSTAINABLE FORESTRY OUTREACH INITIATIVE; RENEWABLE RESOURCES
                EXTENSION ACTIVITIES.

        (a) Sustainable Forestry Outreach Initiative.--The Renewable
    Resources Extension Act of 1978 is amended by inserting after section 5A
    (16 U.S.C. 1674a) the following:

    ``SEC. 5B. <<NOTE: 16 USC 1674b.>>  SUSTAINABLE FORESTRY OUTREACH
                INITIATIVE.

        ``The Secretary shall establish a program, to be known as the
    `Sustainable Forestry Outreach Initiative', to educate landowners
    concerning the following:
                ``(1) The value and benefits of practicing sustainable
            forestry.
                ``(2) The importance of professional forestry advice in
            achieving sustainable forestry objectives.
                ``(3) The variety of public and private sector resources
            available to assist the landowners in planning for and
            practicing sustainable forestry.''.

        (b) Renewable Resources Extension Activities.--
                (1) Authorization of appropriations.--Section 6 of the
            Renewable Resources Extension Act of 1978 (16 U.S.C. 1675)

    [[Page 116 STAT. 475]]

            is amended by striking the first sentence and inserting the
            following: ``There is authorized to be appropriated to carry out
            this Act $30,000,000 for each of fiscal years 2002 through
            2007.''.
                (2) Termination date.--Section 8 of the Renewable Resources
            Extension Act of 1978 (16 U.S.C. 1671 note; Public Law 95-306)
            is amended by striking ``2000'' and inserting ``2007''.

    SEC. 8102. OFFICE OF INTERNATIONAL FORESTRY.

        Section 2405(d) of the Global Climate Change Prevention Act of 1990
    (7 U.S.C. 6704(d)) is amended by striking ``2002'' and inserting
    ``2007''.

                      Subtitle C--Miscellaneous Provisions

    SEC. 8201. MCINTIRE-STENNIS COOPERATIVE FORESTRY RESEARCH PROGRAM.

        It is the sense of Congress to reaffirm the importance of Public Law
    87-788 (16 U.S.C. 582a et seq.), commonly known as the ``McIntire-
    Stennis Cooperative Forestry Act''.

                                TITLE IX--ENERGY

    SEC. 9001. <<NOTE: 7 USC 8101.>>  DEFINITIONS.

        In this title:
                (1) Administrator.--The term ``Administrator'' means the
            Administrator of the Environmental Protection Agency.
                (2) Biobased product.--The term ``biobased product'' means a
            product determined by the Secretary to be a commercial or
            industrial product (other than food or feed) that is composed,
            in whole or in significant part, of biological products or
            renewable domestic agricultural materials (including plant,
            animal, and marine materials) or forestry materials.
                (3) 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) agricultural crops;
                              (ii) trees grown for energy production;
                              (iii) wood waste and wood residues;
                              (iv) plants (including aquatic plants and
                          grasses);
                              (v) residues;
                              (vi) fibers;
                              (vii) animal wastes and other waste materials;
                          and
                              (viii) fats, oils, and greases (including
                          recycled fats, oils, and greases).
                        (C) Exclusions.--The term ``biomass'' does not
                    include--
                              (i) paper that is commonly recycled; or
                              (ii) unsegregated solid waste.
                (4) Renewable energy.--The term ``renewable energy'' means
            energy derived from--
                        (A) a wind, solar, biomass, or geothermal source; or

    [[Page 116 STAT. 476]]

                        (B) hydrogen derived from biomass or water using an
                    energy source described in subparagraph (A).
                (5) Rural small business.--The term ``rural small business''
            has the meaning that the Secretary shall prescribe by
            regulation.
                (6) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.

    SEC. 9002. <<NOTE: 7 USC 8102.>>  FEDERAL PROCUREMENT OF BIOBASED
                PRODUCTS.

        (a) Application of Section.--Except as provided in subsection (c),
    each Federal agency shall comply with the requirements set forth in this
    section and any regulations issued under this section, with respect to
    any purchase or acquisition of a procurement item where the purchase
    price of the item exceeds $10,000 or where the quantity of such items or
    of functionally equivalent items purchased or acquired in the course of
    the preceding fiscal year was $10,000 or more.
        (b) Procurement Subject to Other Law.--Any procurement, by any
    Federal agency, which is subject to regulations of the Administrator
    under section 6002 of the Solid Waste Disposal Act (42 U.S.C. 6962),
    shall not be subject to the requirements of this section to the extent
    that such requirements are inconsistent with such regulations.
        (c) Procurement Preference.--(1) Except as provided in paragraph
    (2), after the date specified in applicable guidelines prepared pursuant
    to subsection (e) of this section, each Federal agency which procures
    any items designated in such guidelines shall, in making procurement
    decisions, give preference to such items composed of the highest
    percentage of biobased products practicable, consistent with maintaining
    a satisfactory level of competition, considering such guidelines.
        (2) Agency flexibility.--Notwithstanding paragraph (1), an agency
    may decide not to procure such items if the agency determines that the
    items--
                (A) are not reasonably available within a reasonable period
            of time;
                (B) fail to meet the performance standards set forth in the
            applicable specifications or fail to meet the reasonable
            performance standards of the procuring agencies; or
                (C) are available only at an unreasonable price.

          (3) After the date specified in any applicable guidelines prepared
    pursuant to subsection (e) of this section, contracting offices shall
    require that, with respect to biobased products, vendors certify that
    the biobased products to be used in the performance of the contract will
    comply with the applicable specifications or other contractual
    requirements.
        (d) Specifications.--All Federal agencies that have the
    responsibility for drafting or reviewing specifications for procurement
    items procured by Federal agencies shall, within one year after the date
    of publication of applicable guidelines under subsection (e), or as
    otherwise specified in such guidelines, assure that such specifications
    require the use of biobased products consistent with the requirements of
    this section.
        (e) Guidelines.--
                (1) In general.--The Secretary, after consultation with the
            Administrator, the Administrator of General Services, and the
            Secretary of Commerce (acting through the Director of

    [[Page 116 STAT. 477]]

            the National Institute of Standards and Technology), shall
            prepare, and from time to time revise, guidelines for the use of
            procuring agencies in complying with the requirements of this
            section. Such guidelines shall--
                        (A) designate those items which are or can be
                    produced with biobased products and whose procurement by
                    procuring agencies will carry out the objectives of this
                    section;
                        (B) set forth recommended practices with respect to
                    the procurement of biobased products and items
                    containing such materials and with respect to
                    certification by vendors of the percentage of biobased
                    products used; and
                        (C) provide information as to the availability,
                    relative price, performance, and environmental and
                    public health benefits, of such materials and items and
                    where appropriate shall recommend the level of biobased
                    material to be contained in the procured product.
                (2) Considerations.--In making the designation under
            paragraph (1)(A), the Secretary shall, at a minimum, consider--
                        (A) the availability of such items; and
                        (B) the economic and technological feasibility of
                    using such items, including life cycle costs.
                (3) <<NOTE: Deadline.>>  Final guidelines.--The Secretary
            shall prepare final guidelines under this section within 180
            days after the date of enactment of this Act.

        (f) Office of Federal Procurement Policy.--The Office of Federal
    Procurement Policy, in cooperation with the Secretary, shall implement
    the requirements of this section. <<NOTE: Reports.>>  It shall be the
    responsibility of the Office of Federal Procurement Policy to coordinate
    this policy with other policies for Federal procurement to implement the
    requirements of this section, and, every two years beginning in 2003, to
    report to the Congress on actions taken by Federal agencies and the
    progress made in the implementation of this section, including agency
    compliance with subsection (d).

        (g) Procurement Program.--(1) <<NOTE: Deadline.>>  Within one year
    after the date of publication of applicable guidelines under subsection
    (e), each Federal agency shall develop a procurement program which will
    assure that items composed of biobased products will be purchased to the
    maximum extent practicable and which is consistent with applicable
    provisions of Federal procurement law.

        (2) Each procurement program required under this subsection shall,
    at a minimum, contain--
                (A) a biobased products preference program;
                (B) an agency promotion program to promote the preference
            program adopted under subparagraph (A); and
                (C) annual review and monitoring of the effectiveness of an
            agency's procurement program.

        (3) In developing the preference program, the following options
    shall be considered for adoption:
                (A) Case-by-case policy development.--Subject to the
            limitations of subsection (c)(2) (A) through (C), a policy of
            awarding contracts to the vendor offering an item composed of
            the highest percentage of biobased products practicable. Subject
            to such limitations, agencies may make an award to a vendor
            offering items with less than the maximum biobased products
            content.
                (B) Minimum content standards.--Minimum biobased products
            content specifications which are set in such a way

    [[Page 116 STAT. 478]]

            as to assure that the biobased products content required is
            consistent with the requirements of this section, without
            violating the limitations of subsection (c)(2) (A) through (C).

    Federal agencies shall adopt one of the options set forth in
    subparagraphs (A) and (B) or a substantially equivalent alternative, for
    inclusion in the procurement program.
        (h) Labeling.--
                (1) In general.--The Secretary, in consultation with the
            Administrator, shall establish a voluntary program under which
            the Secretary authorizes producers of biobased products to use
            the label ``U.S.D.A. Certified Biobased Product''.
                (2) <<NOTE: Deadline.>>  Eligibility criteria.--Within one
            year after the date of enactment of this Act, the Secretary, in
            consultation with the Administrator, shall issue criteria for
            determining which products may qualify to receive the label
            under paragraph (1). The criteria shall encourage the purchase
            of products with the maximum biobased content, and should, to
            the maximum extent possible, be consistent with the guidelines
            issued under subsection (e).
                (3) Use of the label.--The Secretary shall ensure that the
            label referred to in paragraph (1) is used only on products that
            meet the criteria issued pursuant to paragraph (2).
                (4) Recognition.--The Secretary shall establish a voluntary
            program to recognize Federal agencies and private entities that
            use a substantial amount of biobased products.

        (i) Limitation.--Nothing in this section shall apply to the
    procurement of motor vehicle fuels or electricity.
        (j) Funding.--
                (1) Authorization of appropriations.--There are authorized
            to be appropriated such sums as may be necessary to carry out
            this section.
                (2) Funding for testing of biobased products.--
                        (A) In general.--Of the funds of the Commodity
                    Credit Corporation, the Secretary shall use $1,000,000
                    for each of fiscal years 2002 through 2007 to support
                    testing of biobased products to carry out this section.
                        (B) Use of funds.--Amounts made available under
                    subparagraph (A) may be used to support contracts or
                    cooperative agreements with entities that have
                    experience and special skills to conduct such testing.
                        (C) Priority.--At the discretion of the Secretary,
                    the Secretary may give priority to the testing of
                    products for which private sector firms provide cost
                    sharing for the testing.

    SEC. 9003. <<NOTE: 7 USC 8103.>>  BIOREFINERY DEVELOPMENT GRANTS.

        (a) Purpose.--The purpose of this section is to assist in the
    development of new and emerging technologies for the use of biomass,
    including lignocellulosic biomass, so as to--
                (1) develop transportation and other fuels, chemicals, and
            energy from renewable sources;
                (2) increase the energy independence of the United States;
                (3) provide beneficial effects on conservation, public
            health, and the environment;
                (4) diversify markets for raw agricultural and forestry
            products; and

    [[Page 116 STAT. 479]]

                (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 fuels and chemicals; and
                        (B) may produce electricity.
                (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.--An individual, corporation, farm
    cooperative, association of farmers, national laboratory, institution of
    higher education (as defined in section 101 of the Higher Education Act
    of 1965 (20 U.S.C. 1001)), State or local 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 after consulting the Board
            and Advisory Committee.
                (2) Selection criteria.--
                        (A) In general.--In selecting projects to receive
                    grants under subsection (c), the Secretary--
                              (i) shall select projects based on the
                          likelihood that the projects will demonstrate the
                          commercial viability of a new and emerging process
                          for converting biomass into fuels, chemicals, or
                          energy; and
                              (ii) may consider the likelihood that the
                          projects will produce electricity.
                        (B) Factors.--The factors to be considered under
                    subparagraph (A) may include--
                              (i) the potential market for the product or
                          products;
                              (ii) the level of financial participation by
                          the applicants;
                              (iii) the availability of adequate funding
                          from other sources;
                              (iv) the beneficial impact on resource
                          conservation, public health, and the environment;
                              (v) the participation of producer associations
                          and cooperatives;
                              (vi) the timeframe in which the project will
                          be operational;
                              (vii) the potential for rural economic
                          development;

    [[Page 116 STAT. 480]]

                              (viii) the participation of multiple eligible
                          entities; and
                              (ix) the potential for developing advanced
                          industrial biotechnology approaches.

        (f) Cost Sharing.--
                (1) In general.--The amount of a grant for a project awarded
            under subsection (c) shall not exceed 30 percent of the cost of
            the project.
                (2) 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) Consultation.--In carrying out this section, the Secretary shall
    consult with the Secretary of Energy.
        (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 2002 through 2007.

    SEC. 9004. <<NOTE: 7 USC 8104.>>  BIODIESEL FUEL EDUCATION PROGRAM.

        (a) Establishment.--The Secretary shall, under such terms and
    conditions as are appropriate, make competitive grants to eligible
    entities to educate governmental and private entities that operate
    vehicle fleets, other interested entities (as determined by the
    Secretary), and the public about the benefits of biodiesel fuel use.
        (b) Eligible Entities.--To receive a grant under subsection (a), an
    entity--
                (1) shall be a nonprofit organization or institution of
            higher education (as defined in section 101 of the Higher
            Education Act of 1965 (20 U.S.C. 1001));
                (2) shall have demonstrated knowledge of biodiesel fuel
            production, use, or distribution; and
                (3) shall have demonstrated the ability to conduct
            educational and technical support programs.

        (c) Consultation.--In carrying out this section, the Secretary shall
    consult with the Secretary of Energy.
        (d) Funding.--Of the funds of the Commodity Credit Corporation, the
    Secretary shall make available to carry out this section $1,000,000 for
    each of fiscal years 2003 through 2007.

    SEC. 9005. <<NOTE: 7 USC 8105.>>  ENERGY AUDIT AND RENEWABLE ENERGY
                DEVELOPMENT PROGRAM.

        (a) <<NOTE: Grants.>>  In General.--The Secretary shall make
    competitive grants to eligible entities to carry out a program to assist
    farmers, ranchers, and rural small businesses in becoming more energy
    efficient and in using renewable energy technology and resources.

        (b) Eligible Entities.--Entities eligible to carry out a program
    under subsection (a) are--
                (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));

    [[Page 116 STAT. 481]]

                (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
            institution of higher education (as defined in section 101 of
            the Higher Education Act of 1965 (20 U.S.C. 1001));
                (4) a rural electric cooperative or utility;
                (5) a nonprofit organization; and
                (6) any other entity, as determined by the Secretary.

        (c) <<NOTE: Establishment.>>  Merit Review.--
                (1) Merit review process.--The Secretary shall establish a
            merit review process to review applications for grants under
            subsection (a) that uses the expertise of other Federal
            agencies, industry, and nongovernmental organizations.
                (2) Selection criteria.--In reviewing applications of
            eligible entities to receive grants under subsection (a), the
            Secretary shall consider--
                        (A) the ability and expertise of the eligible entity
                    in providing professional energy audits and renewable
                    energy assessments;
                        (B) the geographic scope of the program proposed by
                    the eligible entity;
                        (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.--
                (1) Required uses.--A recipient of a grant under subsection
            (a) shall use the grant funds to conduct and promote energy
            audits for farmers, ranchers, and rural small businesses to
            provide farmers, ranchers, and rural small businesses
            recommendations on how to improve energy efficiency and use
            renewable energy technology and resources.
                (2) Permitted uses.--In addition to the uses described in
            paragraph (1), a recipient of a grant may use the grant funds to
            make farmers, ranchers, and rural small businesses aware of, and
            ensure that they have access to--
                        (A) financial assistance under section 9006; and
                        (B) other Federal, State, and local financial
                    assistance programs for which farmers, ranchers, and
                    rural small businesses may be eligible.

        (e) Cost Sharing.--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 of the energy
    audit, the farmer, rancher, or rural small business pay at least 25
    percent of the cost of the audit.
        (f) Use of Cost-Share Funds.--Funds collected by a recipient of a
    grant under subsection (e) as a result of activities carried out using
    the grant funds shall be used to conduct activities authorized under
    this section, as approved by the Secretary.
        (g) Consultation.--In carrying out this section, the Secretary shall
    consult with the Secretary of Energy.

    [[Page 116 STAT. 482]]

        (h) <<NOTE: Deadline.>>  Reports.--Not later than 4 years after the
    date of enactment of this Act, the Secretary shall submit to Congress a
    report on the implementation of this section.

        (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 2007.

    SEC. 9006. <<NOTE: 7 USC 8106.>>  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.--To be eligible to receive a grant under subsection
    (a), a farmer, rancher, or rural small business shall demonstrate
    financial need as determined by the Secretary.
        (c) Cost Sharing.--
                (1) In general.--
                        (A) Grants.--The amount of a grant shall not exceed
                    25 percent of the cost of the activity funded under
                    subsection (a).
                        (B) Maximum amount of combined grant and loan.--The
                    combined amount of a grant and loan made or guaranteed
                    shall not exceed 50 percent of the cost of the activity
                    funded under subsection (a).
                (2) Factors.--In determining the amount of a grant or loan,
            the Secretary shall take into consideration, as applicable--
                        (A) the type of renewable energy system to be
                    purchased;
                        (B) the estimated quantity of energy to be generated
                    by the renewable energy system;
                        (C) the expected environmental benefits of the
                    renewable energy system;
                        (D) the extent to which the renewable energy system
                    will be replicable;
                        (E) the amount of energy savings expected to be
                    derived from the activity, as demonstrated by an energy
                    audit comparable to an energy audit under section 9005;
                        (F) the estimated length of time it would take for
                    the energy savings generated by the activity to equal
                    the cost of the activity; and
                        (G) other factors as appropriate.

        (d) Interest Rate.--
                (1) In general.--A loan made by the Secretary under
            subsection (a) shall bear interest at the rate equivalent to the
            rate of interest charged on Treasury securities of comparable
            maturity on the date the loan is approved.
                (2) Duration.--The interest rate for each loan will remain
            in effect for the term of the loan.

        (e) Consultation.--In carrying out this section, the Secretary shall
    consult with the Secretary of Energy.
        (f) Funding.--Of the funds of the Commodity Credit Corporation, the
    Secretary shall make available to carry out this section $23,000,000 for
    each of fiscal years 2003 through 2007.

    [[Page 116 STAT. 483]]

    SEC. 9007. <<NOTE: 7 USC 8107.>>  HYDROGEN AND FUEL CELL TECHNOLOGIES.

        (a) <<NOTE: Memorandum.>>  In General.--The Secretary and the
    Secretary of Energy shall enter into a memorandum of understanding under
    which the Secretary and the Secretary of Energy shall cooperate in the
    application of hydrogen and fuel cell technology programs for rural
    communities and agricultural producers.

        (b) Dissemination of Information.--Under the memorandum of
    understanding, the Secretary shall work with the Secretary of Energy to
    disseminate information to rural communities and agricultural producers
    on potential applications of hydrogen and fuel cell technologies.

    SEC. 9008. BIOMASS RESEARCH AND DEVELOPMENT.

        (a) Funding.--The Biomass Research and Development Act of 2000 (7
    U.S.C. 7624 note; Public Law 106-224) is amended--
                (1) in section 307, <<NOTE: 26 USC 7624 note.>>  by striking
            subsection (f);
                (2) by redesignating section 310 <<NOTE: 26 USC 7624
            note.>>  as section 311; and
                (3) by inserting after section 309 the following:

    ``SEC. 310. FUNDING.

        ``(a) Funding.--Of funds of the Commodity Credit Corporation, the
    Secretary shall make available to carry out this title--
                ``(1) $5,000,000 for fiscal year 2002; and
                ``(2) $14,000,000 for each of fiscal years 2003 through
            2007;

    to remain available until expended.
        ``(b) Authorization of Appropriations.--In addition to amounts
    transferred under subsection (a), there are authorized to be
    appropriated to carry out this title $49,000,000 for each of fiscal
    years 2002 through 2007.''.
        (b) Termination of Authority.--Section 311 of the Biomass Research
    and Development Act of 2000 (7 U.S.C. 7624 note; Public Law 106-224) (as
    redesignated by subsection (a)) is amended by striking ``December 31,
    2005'' and inserting ``September 30, 2007''.

    SEC. 9009. COOPERATIVE RESEARCH AND EXTENSION PROJECTS.

        Section 221 of the Agricultural Risk Protection Act of 2000
    (114 <<NOTE: 7 USC 6711.>>  Stat. 407) is amended--
                (1) by redesignating subsection (d) as subsection (f); and
                (2) by inserting after subsection (c) the following:

        ``(d) Cooperative Research.--
                ``(1) In general.--Subject to the availability of
            appropriations, the Secretary, in cooperation with departments
            and agencies participating in the U.S. Global Change Research
            Program (which may use any of their statutory authorities) and
            with eligible entities, may carry out research to promote
            understanding of--
                        ``(A) the flux of carbon in soils and plants
                    (including trees); and
                        ``(B) the exchange of other greenhouse gases from
                    agriculture.
                ``(2) Eligible entities.--Research under this subsection may
            be carried out through the competitive awarding of grants and
            cooperative agreements 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. 1303)).
                ``(3) Cooperative research purposes.--Research conducted
            under this subsection shall encourage collaboration among
            scientists with expertise in the areas of soil science,

    [[Page 116 STAT. 484]]

            agronomy, agricultural economics, forestry, and other
            agricultural sciences to focus on--
                        ``(A) developing data addressing carbon losses and
                    gains in soils and plants (including trees) and the
                    exchange of methane and nitrous oxide from agriculture;
                        ``(B) understanding how agricultural and forestry
                    practices affect the sequestration of carbon in soils
                    and plants (including trees) and the exchange of other
                    greenhouse gases, including the effects of new
                    technologies such as biotechnology and nanotechnology;
                        ``(C) developing cost-effective means of measuring
                    and monitoring changes in carbon pools in soils and
                    plants (including trees), including computer models;
                        ``(D) evaluating the linkage between federal
                    conservation programs and carbon sequestration;
                        ``(E) developing methods, including remote sensing,
                    to measure the exchange of carbon and other greenhouse
                    gases sequestered, and to evaluate leakage, performance,
                    and permanence issues; and
                        ``(F) assessing the applicability of the results of
                    research conducted under this subsection for developing
                    methods to account for the impact of agricultural
                    activities (including forestry) on the exchange of
                    greenhouse gases.
                ``(4) Authorization of appropriation.--There are authorized
            to be appropriated such sums as are necessary to carry out this
            subsection for each of fiscal years 2002 through 2007.

        ``(e) Extension Projects.--
                ``(1) In general.--The Secretary, in cooperation with
            departments and agencies participating in the U.S. Global Change
            Research Program (which may use any of their statutory
            authorities), and local extension agents, experts from
            institutions of higher education that offer a curriculum in
            agricultural and biological sciences, and other local
            agricultural or conservation organizations, may implement
            extension projects (including on-farm projects with direct
            involvement of agricultural producers) that combine measurement
            tools and modeling techniques into integrated packages to
            monitor the carbon sequestering benefits of conservation
            practices and the exchange of greenhouse gas emissions from
            agriculture which demonstrate the feasibility of methods of
            measuring and monitoring--
                        ``(A) changes in carbon content and other carbon
                    pools in soils and plants (including trees); and
                        ``(B) the exchange of other greenhouse gases.
                ``(2) Extension project results.--The Secretary may
            disseminate to farmers, ranchers, private forest landowners, and
            appropriate State agencies in each State information
            concerning--
                        ``(A) the results of projects under this subsection;
                    and
                        ``(B) the manner in which the methods used in the
                    projects might be applicable to the operations of the
                    farmers, ranchers, private forest landowners, and State
                    agencies.
                ``(3) Authorization of appropriations.--There are authorized
            to be appropriated such sums as are necessary to carry out this
            subsection for each of fiscal years 2002 through 2007.''.

    [[Page 116 STAT. 485]]

    SEC. 9010. <<NOTE: 7 USC 8108.>>  CONTINUATION OF BIOENERGY PROGRAM.

        (a) Definitions.--In this section:
                (1) Bioenergy.--The term ``bioenergy'' means--
                        (A) biodiesel; and
                        (B) fuel grade ethanol.
                (2) Biodiesel.--The term ``biodiesel'' means a monoalkyl
            ester that meets the requirements of an appropriate American
            Society for Testing and Materials standard.
                (3) Eligible commodity.--The term ``eligible commodity''
            means--
                        (A) wheat, corn, grain sorghum, barley, oats, rice,
                    soybeans, sunflower seed, rapeseed, canola, safflower,
                    flaxseed, mustard, crambe, sesame seed, and cottonseed;
                        (B) a cellulosic commodity (such as hybrid poplar
                    and switch grass);
                        (C) fats, oils, and greases (including recycled
                    fats, oils, and greases) derived from an agricultural
                    product; and
                        (D) any animal byproduct (in addition to oils, fats,
                    and greases) that may be used to produce bioenergy, as
                    determined by the Secretary.
                (4) Eligible producer.--The term ``eligible producer'' means
            a producer that uses an eligible commodity to produce bioenergy.

        (b) Bioenergy Program.--
                (1) Continuation.--The Secretary shall continue the program
            under part 1424 of title 7, Code of Federal Regulations (or any
            successor regulation), under which the Secretary makes payments
            to eligible producers to encourage increased purchases of
            eligible commodities for the purpose of expanding production of
            such bioenergy and supporting new production capacity for such
            bioenergy.
                (2) Contracts.--To be eligible to receive a payment, an
            eligible producer shall--
                        (A) enter into a contract with the Secretary to
                    increase bioenergy production for 1 or more fiscal
                    years; and
                        (B) submit to the Secretary such records as the
                    Secretary may require as evidence of increased purchase
                    and use of eligible commodities for the production of
                    bioenergy.
                (3) Payment.--
                        (A) In general.--Under the program, the Secretary
                    shall make payments to eligible producers, based on the
                    quantity of bioenergy produced by the eligible producer
                    during a fiscal year that exceeds the quantity of
                    bioenergy produced by the eligible producer during the
                    preceding fiscal year.
                        (B) Payment rate.--
                              (i) Producers of less than 65,000,000
                          gallons.--An eligible producer that produces less
                          than 65,000,000 gallons of bioenergy shall be
                          reimbursed 1 feedstock unit for every 2.5
                          feedstock units of eligible commodity used for
                          increased production.
                              (ii) Producers of 65,000,000 or more
                          gallons.--An eligible producer that produces
                          65,000,000 or more gallons of bioenergy shall be
                          reimbursed 1 feedstock unit for every 3.5
                          feedstock units of eligible commodity used for
                          increased production.

    [[Page 116 STAT. 486]]

                        (C) Quarterly payments.--The Secretary shall make
                    payments to an eligible producer for each quarter of the
                    fiscal year.
                (4) Proration.--If the amount made available for a fiscal
            year under subsection (c) is insufficient to allow the payment
            of the amount of the payments that eligible producers (that
            apply for the payments) otherwise would receive under this
            subsection, the Secretary shall prorate the amount of the funds
            among all such eligible producers.
                (5) Overpayments.--If the total amount of payments that an
            eligible producer receives for a fiscal year under this section
            exceeds the amount that the eligible producer should have
            received under this subsection, the eligible producer shall
            repay the amount of the overpayment to the Secretary, with
            interest (as determined by the Secretary).
                (6) Limitation.--No eligible producer shall receive more
            than 5 percent of the total amount made available under
            subsection (c) for a fiscal year.
                (7) Other requirements.--To be eligible to receive a payment
            under this subsection, an eligible producer shall meet other
            requirements of Federal law (including regulations) applicable
            to the production of bioenergy.

        (c) Funding.--Of the funds of the Commodity Credit Corporation, the
    Secretary shall use to carry out this section--
                (1) not more than $150,000,000 for each of fiscal years 2003
            through 2006; and
                (2) $0 for fiscal year 2007.

                             TITLE X--MISCELLANEOUS

                           Subtitle A--Crop Insurance

    SEC. 10001. EQUAL CROP INSURANCE TREATMENT OF POTATOES AND SWEET
                POTATOES.

        Section 508(a)(2) of the Federal Crop Insurance Act (7 U.S.C.
    1508(a)(2)) is amended in the first sentence by striking ``and
    potatoes'' and inserting ``, potatoes, and sweet potatoes''.

    SEC. 10002. CONTINUOUS COVERAGE.

        Section 508(e)(4) of the Federal Crop Insurance Act (7 U.S.C.
    1508(e)(4)) is amended--
                (1) in the paragraph heading, by striking ``Temporary
            prohibition'' and inserting ``Prohibition''; and
                (2) by striking ``through 2005'' and inserting ``and
            subsequent''.

    SEC. 10003. QUALITY LOSS ADJUSTMENT PROCEDURES.

        Section 508(m) of the Federal Crop Insurance Act (7 U.S.C. 1508(m))
    is amended--
                (1) in paragraph (3)--
                        (A) by striking ``The Corporation'' and inserting
                    the following:
                        ``(A) Review.--The Corporation''; and
                        (B) by striking ``Based on'' and inserting the
                    following:
                        ``(B) <<NOTE: Effective date.>>  Procedures.--
                    Effective beginning not later than the 2004 reinsurance
                    year, based on''; and

    [[Page 116 STAT. 487]]

                (2) by adding at the end the following:
                ``(4) Quality of agricultural commodities delivered to
            warehouse operators.--In administering this title, the Secretary
            shall accept, in the same manner and under the same terms and
            conditions, evidence of the quality of agricultural commodities
            delivered to--
                        ``(A) warehouse operators that are licensed under
                    the United States Warehouse Act (7 U.S.C. 241 et seq.);
                        ``(B) warehouse operators that--
                              ``(i) are licensed under State law; and
                              ``(ii) have entered into a storage agreement
                          with the Commodity Credit Corporation; and
                        ``(C) warehouse operators that--
                              ``(i) are not licensed under State law but are
                          in compliance with State law regarding warehouses;
                          and
                              ``(ii) have entered into a commodity storage
                          agreement with the Commodity Credit
                          Corporation.''.

    SEC. 10004. ADJUSTED GROSS REVENUE INSURANCE PILOT PROGRAM.

        Section 523 of the Federal Crop Insurance Act (7 U.S.C. 1523) is
    amended by adding at the end the following:
        ``(e) Adjusted Gross Revenue Insurance Pilot Program.--
                ``(1) In general.--The Corporation shall carry out, through
            at least the 2004 reinsurance year, the adjusted gross revenue
            insurance pilot program in effect for the 2002 reinsurance year.
                ``(2) Additional counties.--
                        ``(A) In general.--In addition to counties otherwise
                    included in the pilot program, the Corporation shall
                    include in the pilot program for the 2003 reinsurance
                    year at least 8 counties in the State of California and
                    at least 8 counties in the State of Pennsylvania.
                        ``(B) Selection criteria.--In carrying out
                    subparagraph (A), the Corporation shall work with the
                    respective State Departments of Agriculture to establish
                    criteria to determine which counties to include in the
                    pilot program.''.

    SEC. 10005. SENSE OF CONGRESS ON EXPANSION OF CROP INSURANCE COVERAGE.

        It is the sense of Congress that the Federal Crop Insurance
    Corporation should address needs of producers through the expansion of
    pilot programs and coverage under the Federal Crop Insurance Act (7
    U.S.C. 1501 et seq.), including--
                (1) crop revenue insurance for the producers of pecans in
            the State of Georgia; and
                (2) coverage for continuous crops of wheat produced in the
            State of Kansas.

    SEC. 10006. REPORT ON SPECIALTY CROP INSURANCE.

        Not <<NOTE: Deadline.>>  later than 180 days after the date of
    enactment of this Act, the Secretary of Agriculture shall submit to the
    Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    that describes--
                (1) the progress made by the Federal Crop Insurance
            Corporation in research and development of innovative risk
            management products to include cost of production insurance

    [[Page 116 STAT. 488]]

            that provides coverage for specialty crops, paying special
            attention to apples, asparagus, blueberries (wild and domestic),
            cabbage, canola, carrots, cherries, Christmas trees, citrus
            fruits, cucumbers, dry beans, eggplants, floriculture, grapes,
            greenhouse and nursery agricultural commodities, green peas,
            green peppers, hay, lettuce, maple, mushrooms, pears, potatoes,
            pumpkins, snap beans, spinach, squash, strawberries, sugar
            beets, and tomatoes; and
                (2) the progress made by the Corporation in increasing the
            use of risk management products offered through the Corporation
            by producers of specialty crops, by small- and moderate-sized
            farms, and in areas that are underserved, as determined by the
            Secretary.

                         Subtitle B--Disaster Assistance

    SEC. 10101. REFERENCE TO SEA GRASS AND SEA OATS AS CROPS COVERED BY
                NONINSURED CROP DISASTER ASSISTANCE PROGRAM.

        Section 196(a)(2)(B) of the Federal Agriculture Improvement and
    Reform Act of 1996 (7 U.S.C. 7333(a)(2)(B)) is amended by inserting
    ``sea grass and sea oats,'' after ``fish),''.

    SEC. 10102. EMERGENCY GRANTS TO ASSIST LOW-INCOME MIGRANT AND SEASONAL
                FARMWORKERS.

        Section 2281(a) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (42 U.S.C. 5177a(a)) is amended by striking ``, not to
    exceed $20,000,000 annually,''.

    SEC. 10103. EMERGENCY LOANS FOR SEED PRODUCERS.

        Section 253(b)(5)(B) of the Agricultural Risk Protection Act of 2000
    (Public Law 106-224; 114 Stat. 423) is amended by striking ``18 months''
    and inserting ``36 months''.

    SEC. 10104. <<NOTE: 7 USC 1472.>>  ASSISTANCE FOR LIVESTOCK PRODUCERS.

        (a) Availability of Assistance.--In such amounts as are provided in
    advance in appropriation Acts, the Secretary of Agriculture may provide
    assistance to dairy and other livestock producers to cover economic
    losses incurred by such producers in connection with the production of
    livestock.
        (b) Types of Assistance.--The assistance provided to livestock
    producers may be in the following forms:
                (1) Indemnity payments to livestock producers who incur
            livestock mortality losses.
                (2) Livestock feed assistance to livestock producers
            affected by shortages of feed.
                (3) Compensation for sudden increases in production costs.
                (4) Such other assistance, and for such other economic
            losses, as the Secretary considers appropriate.

        (c) Limitations.--The Secretary may not use the funds of the
    Commodity Credit Corporation to provide assistance under this section.
        (d) Authorization of Appropriations.--There is authorized to be
    appropriated to the Secretary such sums as may be necessary to carry out
    this section.

    [[Page 116 STAT. 489]]

    SEC. 10105. MARKET LOSS ASSISTANCE FOR APPLE PRODUCERS.

        (a) In General.--Of the funds of the Commodity Credit Corporation,
    the Secretary of Agriculture shall use $94,000,000 for fiscal year 2002
    to make payments, as soon as practicable after the date of enactment of
    this Act, to apple producers for the loss of markets during the 2000
    crop year.
        (b) Payment Quantity.--The payment quantity of apples for which the
    producers on a farm are eligible for payments under this section shall
    be equal to the lesser of--
                (1) the quantity of the 2000 crop of apples produced by the
            producers on the farm; or
                (2) 5,000,000 pounds of apples produced on the farm.

        (c) Limitations.--Subject to subsection (b)(2), the Secretary shall
    not establish a payment limitation, or income eligibility limitation,
    with respect to payments made under this section.
        (d) Regulations.--
                (1) In general.--The Secretary shall promulgate such
            regulations as are necessary to implement this section.
                (2) Procedure.--The promulgation of the regulations and
            administration of this section shall be made without regard to--
                        (A) the notice and comment provisions of section 553
                    of title 5, United States Code;
                        (B) the Statement of Policy of the Secretary of
                    Agriculture effective July 24, 1971 (36 Fed. Reg.
                    13804), relating to notices of proposed rulemaking and
                    public participation in rulemaking; and
                        (C) chapter 35 of title 44, United States Code
                    (commonly known as the ``Paperwork Reduction Act'').
                (3) Congressional review of agency rulemaking.--In carrying
            out this subsection, the Secretary shall use the authority
            provided under section 808 of title 5, United States Code.

    SEC. 10106. <<NOTE: Grants. New York.>>  MARKET LOSS ASSISTANCE FOR
                ONION PRODUCERS.

        The Secretary of Agriculture shall use $10,000,000 of the funds of
    the Commodity Credit Corporation to make a grant to the State of New
    York to be used to support onion producers in Orange County, New York,
    that have suffered losses to onion crops during 1 or more of the 1996
    through 2000 crop years.

    SEC. 10107. <<NOTE: Disaster assistance.>>  COMMERCIAL FISHERIES
                FAILURE.

        (a) In General.--The Secretary of Agriculture, in consultation with
    the Secretary of Commerce, shall provide emergency disaster assistance
    for the commercial fishery failure under section 308(b)(1) of the
    Interjurisdictional Fisheries Act of 1986 (16 U.S.C. 4107(b)(1)) with
    respect to Northeast multispecies fisheries.
        (b) Program Requirements.--Amounts made available to carry out this
    section shall be used to support a voluntary fishing capacity reduction
    program in the Northeast multispecies fishery that--
                (1) is certified by the Secretary of Commerce to be
            consistent with section 312(b) of the Magnuson-Stevens Fishery
            Conservation and Management Act (16 U.S.C. 1861a(b)); and
                (2) permanently revokes multispecies limited access fishing
            permits so as to obtain the maximum sustained reduction in
            fishing capacity at the least cost and in the minimum period

    [[Page 116 STAT. 490]]

            of time and to prevent the replacement of fishing capacity
            removed by the program.

        (c) Application of Regulations.--The program shall be carried out in
    accordance with the regulations codified at part 648 of title 50, Code
    of Federal Regulations, and any corresponding rule issued in accordance
    with the regulations.
        (d) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section.
        (e) Termination of Authority.--The authority provided under this
    section terminates on the date that is 1 year after the date of
    enactment of this Act.

    SEC. 10108. STUDY OF FEASIBILITY OF PRODUCER INDEMNIFICATION FROM
                GOVERNMENT-CAUSED DISASTERS.

        (a) Findings.--Congress finds that the implementation of Federal
    disaster assistance programs fails to adequately address situations in
    which disaster conditions are caused primarily by Federal action.
        (b) Authority.--The Secretary of Agriculture shall conduct a study
    of the feasibility of expanding eligibility for crop insurance under the
    Federal Crop Insurance Act (7 U.S.C. 1501 et seq.), and noninsured crop
    assistance under section 196 of the Federal Agriculture Improvement and
    Reform Act of 1996 (7 U.S.C. 7333), to agricultural producers
    experiencing disaster conditions caused primarily by Federal agency
    action restricting access to irrigation water, including any lack of
    access to an adequate supply of water caused by failure by the Secretary
    of the Interior to fulfill a contract in accordance with the Central
    Valley Project Improvement Act (106 Stat. 4706).
        (c) <<NOTE: Deadline.>>  Report.--Not later than 150 days after the
    date of enactment of this Act, the Secretary shall submit to the
    Committee on Agriculture of the House of Representatives and the
    Committee on Agriculture, Nutrition, and Forestry of the Senate a report
    that describes the results of the study, including any recommendations.

                       Subtitle C--Tree Assistance Program

    SEC. 10201. <<NOTE: 7 USC 8201.>>  DEFINITIONS.

        In this subtitle:
                (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, lightning, and other occurrence, as determined by
            the Secretary.
                (3) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.
                (4) Tree.--The term ``tree'' includes a tree, bush, and
            vine.

    SEC. 10202. <<NOTE: 7 USC 8202.>>  ELIGIBILITY.

        (a) Loss.--Subject to subsection (b), the Secretary shall provide
    assistance under section 10203 to eligible orchardists that planted
    trees for commercial purposes but lost the trees as a result of a
    natural disaster, as determined by the Secretary.

    [[Page 116 STAT. 491]]

        (b) Limitation.--An eligible orchardist shall qualify for assistance
    under subsection (a) only if the tree mortality of the eligible
    orchardist, as a result of damaging weather or related condition,
    exceeds 15 percent (adjusted for normal mortality).

    SEC. 10203. <<NOTE: 7 USC 8203.>>  ASSISTANCE.

        Subject to section 10204, the assistance provided by the Secretary
    to eligible orchardists for losses described in section 10202 shall
    consist of--
                (1) 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
                (2) at the option of the Secretary, sufficient seedlings to
            reestablish a stand.

    SEC. 10204. <<NOTE: 7 USC 8204.>>  LIMITATIONS ON ASSISTANCE.

        (a) Amount.--The total amount of payments that a person shall be
    entitled to receive under this subtitle may not exceed $75,000, or an
    equivalent value in tree seedlings.
        (b) Acres.--The total quantity of acres planted to trees or tree
    seedlings for which a person shall be entitled to receive payments under
    this subtitle may not exceed 500 acres.
        (c) Regulations.--The Secretary shall promulgate regulations--
                (1) defining the term ``person'' for the purposes of this
            subtitle, which shall conform, to the maximum 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
                (2) promulgating such regulations as the Secretary
            determines necessary to ensure a fair and reasonable application
            of the limitation established under this section.

    SEC. 10205. <<NOTE: 7 USC 8205.>>  AUTHORIZATION OF APPROPRIATIONS.

        There are authorized to be appropriated such sums as are necessary
    to carry out this subtitle.

                           Subtitle D--Animal Welfare

    SEC. 10301. DEFINITION OF ANIMAL UNDER THE ANIMAL WELFARE ACT.

        Section 2(g) of the Animal Welfare Act (7 U.S.C. 2132(g)) is amended
    in the first sentence by striking ``excludes horses not used for
    research purposes and'' and inserting the following: ``excludes (1)
    birds, rats of the genus Rattus, and mice of the genus Mus, bred for use
    in research, (2) horses not used for research purposes, and (3)''.

    SEC. 10302. PROHIBITION ON INTERSTATE MOVEMENT OF ANIMALS FOR ANIMAL
                FIGHTING.

        (a) In General.--Section 26 of the Animal Welfare Act (7 U.S.C.
    2156) is amended--
                (1) by striking subsection (a) and inserting the following:

        ``(a) Sponsoring or Exhibiting an Animal in an Animal Fighting
    Venture.--

    [[Page 116 STAT. 492]]

                ``(1) In general.--Except as provided in paragraph (2), it
            shall be unlawful for any person to knowingly sponsor or exhibit
            an animal in an animal fighting venture, if any animal in the
            venture was moved in interstate or foreign commerce.
                ``(2) Special rule for certain states.--With respect to
            fighting ventures involving live birds in a State where it would
            not be in violation of the law, it shall be unlawful under this
            subsection for a person to sponsor or exhibit a bird in the
            fighting venture only if the person knew that any bird in the
            fighting venture was knowingly bought, sold, delivered,
            transported, or received in interstate or foreign commerce for
            the purpose of participation in the fighting venture.'';
                (2) in subsection (b), by striking ``or deliver to another
            person or receive from another person'' and inserting ``deliver,
            or receive''; and
                (3) in subsection (d), by striking ``subsections (a), (b),
            or (c) of this section'' and inserting ``subsection (c)''.

        (b) <<NOTE: 7 USC 2156 note.>>  Effective Date.--The amendments made
    by this section take effect 1 year after the date of enactment of this
    Act.

    SEC. 10303. PENALTIES AND FOREIGN COMMERCE PROVISIONS OF THE ANIMAL
                WELFARE ACT.

        (a) In General.--Section 26 of the Animal Welfare Act (7 U.S.C.
    2156) is amended--
                (1) in subsection (e)--
                        (A) by inserting ``Penalties.--'' after ``(e)''; and
                        (B) by striking ``$5,000'' and inserting
                    ``$15,000''; and
                (2) in subsection (g)(2)(B), by inserting before the
            semicolon at the end the following: ``or from any State into any
            foreign country''.

        (b) <<NOTE: 7 USC 2156 note.>>  Effective Date.--The amendment made
    by this section takes effect 1 year after the date of enactment of this
    Act.

    SEC. 10304. <<NOTE: 7 USC 2132 note.>>  REPORT ON RATS, MICE, AND BIRDS.

        (a) <<NOTE: Deadline.>>  In General.--Not later than 1 year after
    the date of enactment of this Act, the National Research Council 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 implications of including rats, mice, and birds within
    the definition of animal under the regulations promulgated under the
    Animal Welfare Act (7 U.S.C. 2131 et seq.).

        (b) Requirements.--The report under subsection (a) shall--
                (1) be completed with input, consultation, and
            recommendations from--
                        (A) the Secretary of Agriculture;
                        (B) the Secretary of Health and Human Services; and
                        (C) the Institute for Animal Laboratory Research
                    within the National Academy of Sciences;
                (2) contain an estimate of--
                        (A) the number and types of entities that use rats,
                    mice, and birds for research purposes; and
                        (B) which of the entities--
                              (i) are subject to regulations of the
                          Department of Agriculture;
                              (ii) are subject to regulations or guidelines
                          of the Department of Health and Human Services; or

    [[Page 116 STAT. 493]]

                              (iii) voluntarily comply with the
                          accreditation requirements of the Association for
                          Assessment and Accreditation of Laboratory Animal
                          Care;
                (3) contain an estimate of the numbers of rats, mice, and
            birds used in research facilities, with an indication of which
            of the facilities--
                        (A) are subject to regulations of the Department of
                    Agriculture;
                        (B) are subject to regulations or guidelines of the
                    Department of Health and Human Services; or
                        (C) voluntarily comply with the accreditation
                    requirements of the Association for Assessment and
                    Accreditation of Laboratory Animal Care;
                (4) contain an estimate of the additional costs likely to be
            incurred by breeders and research facilities resulting from the
            additional regulatory requirements needed in order to afford the
            same level of protection to rats, mice, and birds as is provided
            for species regulated by the Department of Agriculture,
            detailing the costs associated with individual regulatory
            requirements;
                (5) contain recommendations for minimizing such costs,
            including--
                        (A) an estimate of the cost savings that would
                    result from providing a different level of protection to
                    rats, mice, and birds than is provided for species
                    regulated by the Department of Agriculture; and
                        (B) an estimate of the cost savings that would
                    result if new regulatory requirements were substantially
                    equivalent to, and harmonized with, guidelines of the
                    National Institutes of Health;
                (6) contain an estimate of the additional funding that the
            Animal and Plant Health Inspection Service would require to be
            able to ensure that the level of compliance with respect to
            other regulated animals is not diminished by the increase in the
            number of facilities that would require inspections if a rule
            extending the regulatory definition of animal to rats, mice, and
            birds were to become effective; and
                (7) contain recommendations for--
                        (A) minimizing the regulatory burden on facilities
                    subject to--
                              (i) regulations of the Department of
                          Agriculture;
                              (ii) regulations or guidelines of the
                          Department of Health and Human Services; or
                              (iii) accreditation requirements of the
                          Association for Assessment and Accreditation of
                          Laboratory Animal Care; and
                        (B) preventing any duplication of regulatory
                    requirements.

    SEC. 10305. <<NOTE: 7 USC 1901 note.>>  ENFORCEMENT OF HUMANE METHODS OF
                SLAUGHTER ACT OF 1958.

        (a) Sense of Congress.--It is the sense of Congress that the
    Secretary of Agriculture should--
                (1) continue tracking the number of violations of Public Law
            85-765 (7 U.S.C. 1901 et seq.; commonly known as the ``Humane
            Methods of Slaughter Act of 1958'') and report the results and
            relevant trends annually to Congress; and

    [[Page 116 STAT. 494]]

                (2) fully enforce Public Law 85-765 by ensuring that humane
            methods in the slaughter of livestock--
                        (A) prevent needless suffering;
                        (B) result in safer and better working conditions
                    for persons engaged in slaughtering operations;
                        (C) bring about improvement of products and
                    economies in slaughtering operations; and
                        (D) produce other benefits for producers,
                    processors, and consumers that tend to expedite an
                    orderly flow of livestock and livestock products in
                    interstate and foreign commerce.

        (b) United States Policy.--It is the policy of the United States
    that the slaughtering of livestock and the handling of livestock in
    connection with slaughter shall be carried out only by humane methods,
    as provided by Public Law 85-765.

       Subtitle <<NOTE: Animal Health Protection Act.>>  E--Animal Health
    Protection

    SEC. 10401. <<NOTE: 7 USC 8301 note.>>  SHORT TITLE.

        This subtitle may be cited as the ``Animal Health Protection Act''.

    SEC. 10402. <<NOTE: 7 USC 8301.>>  FINDINGS.

        Congress finds that--
                (1) the prevention, detection, control, and eradication of
            diseases and pests of animals are essential to protect--
                        (A) animal health;
                        (B) the health and welfare of the people of the
                    United States;
                        (C) the economic interests of the livestock and
                    related industries of the United States;
                        (D) the environment of the United States; and
                        (E) interstate commerce and foreign commerce of the
                    United States in animals and other articles;
                (2) animal diseases and pests are primarily transmitted by
            animals and articles regulated under this subtitle;
                (3) the health of animals is affected by the methods by
            which animals and articles are transported in interstate
            commerce and foreign commerce;
                (4) the Secretary must continue to conduct research on
            animal diseases and pests that constitute a threat to the
            livestock of the United States; and
                (5)(A) all animals and articles regulated under this
            subtitle are in or affect interstate commerce or foreign
            commerce; and
                (B) regulation by the Secretary and cooperation by the
            Secretary with foreign countries, States or other jurisdictions,
            or persons are necessary--
                        (i) to prevent and eliminate burdens on interstate
                    commerce and foreign commerce;
                        (ii) to regulate effectively interstate commerce and
                    foreign commerce; and
                        (iii) to protect the agriculture, environment,
                    economy, and health and welfare of the people of the
                    United States.

    SEC. 10403. <<NOTE: 7 USC 8302.>>  DEFINITIONS.

        In this subtitle:

    [[Page 116 STAT. 495]]

                (1) Animal.--The term ``animal'' means any member of the
            animal kingdom (except a human).
                (2) Article.--The term ``article'' means any pest or disease
            or any material or tangible object that could harbor a pest or
            disease.
                (3) Disease.--The term ``disease'' has the meaning given the
            term by the Secretary.
                (4) Enter.--The term ``enter'' means to move into the
            commerce of the United States.
                (5) Export.--The term ``export'' means to move from a place
            within the territorial limits of the United States to a place
            outside the territorial limits of the United States.
                (6) Facility.--The term ``facility'' means any structure.
                (7) Import.--The term ``import'' means to move from a place
            outside the territorial limits of the United States to a place
            within the territorial limits of the United States.
                (8) 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).
                (9) Interstate commerce.--The term ``interstate commerce''
            means trade, traffic, or other commerce--
                        (A) between a place in a State and a place in
                    another State, or between places within the same State
                    but through any place outside that State; or
                        (B) within the District of Columbia or any territory
                    or possession of the United States.
                (10) Livestock.--The term ``livestock'' means all farm-
            raised animals.
                (11) Means of conveyance.--The term ``means of conveyance''
            means any personal property used for or intended for use for the
            movement of any other personal property.
                (12) Move.--The term ``move'' means--
                        (A) to carry, enter, import, mail, ship, or
                    transport;
                        (B) to aid, abet, cause, or induce carrying,
                    entering, importing, mailing, shipping, or transporting;
                        (C) to offer to carry, enter, import, mail, ship, or
                    transport;
                        (D) to receive in order to carry, enter, import,
                    mail, ship, or transport;
                        (E) to release into the environment; or
                        (F) to allow any of the activities described in this
                    paragraph.
                (13) Pest.--The term ``pest'' means any of the following
            that can directly or indirectly injure, cause damage to, or
            cause disease in livestock:
                        (A) A protozoan.
                        (B) A plant.
                        (C) A bacteria.
                        (D) A fungus.
                        (E) A virus or viroid.
                        (F) An infectious agent or other pathogen.
                        (G) An arthropod.
                        (H) A parasite.
                        (I) A prion.
                        (J) A vector.
                        (K) Any organism similar to or allied with any of
                    the organisms described in this paragraph.

    [[Page 116 STAT. 496]]

                (14) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.
                (15) State.--The term ``State'' means any of the States, the
            District of Columbia, the Commonwealth of Puerto Rico, Guam, the
            Commonwealth of the Northern Mariana Islands, the Virgin Islands
            of the United States, or any territory or possession of the
            United States.
                (16) This subtitle.--Except when used in this section, the
            term ``this subtitle'' includes any regulation or order issued
            by the Secretary under the authority of this subtitle.
                (17) United states.--The term ``United States'' means all of
            the States.

    SEC. 10404. <<NOTE: 7 USC 8303.>>  RESTRICTION ON IMPORTATION OR ENTRY.

        (a) In General.--With notice to the Secretary of the Treasury and
    public notice as soon as practicable, the Secretary may prohibit or
    restrict--
                (1) the importation or entry of any animal, article, or
            means of conveyance, or use of any means of conveyance or
            facility, if the Secretary determines that the prohibition or
            restriction is necessary to prevent the introduction into or
            dissemination within the United States of any pest or disease of
            livestock;
                (2) the further movement of any animal that has strayed into
            the United States if the Secretary determines that the
            prohibition or restriction is necessary to prevent the
            introduction into or dissemination within the United States of
            any pest or disease of livestock; and
                (3) the use of any means of conveyance in connection with
            the importation or entry of livestock if the Secretary
            determines that the prohibition or restriction is necessary
            because the means of conveyance has not been maintained in a
            clean and sanitary condition or does not have accommodations for
            the safe and proper movement of livestock.

        (b) Regulations.--
                (1) Restrictions on import and entry.--The Secretary may
            issue such orders and promulgate such regulations as are
            necessary to carry out subsection (a).
                (2) Post importation quarantine.--The Secretary may
            promulgate regulations requiring that any animal imported or
            entered be raised or handled under post-importation quarantine
            conditions by or under the supervision of the Secretary for the
            purpose of determining whether the animal is or may be affected
            by any pest or disease of livestock.

        (c) Destruction or Removal.--
                (1) In general.--The Secretary may order the destruction or
            removal from the United States of--
                        (A) any animal, article, or means of conveyance that
                    has been imported but has not entered the United States
                    if the Secretary determines that destruction or removal
                    from the United States is necessary to prevent the
                    introduction into or dissemination within the United
                    States of any pest or disease of livestock;
                        (B) any animal or progeny of any animal, article, or
                    means of conveyance that has been imported or entered in
                    violation of this subtitle; or

    [[Page 116 STAT. 497]]

                        (C) any animal that has strayed into the United
                    States if the Secretary determines that destruction or
                    removal from the United States is necessary to prevent
                    the introduction into or dissemination within the United
                    States of any pest or disease of livestock.
                (2) Requirements of owners.--
                        (A) Orders to disinfect.--The Secretary may require
                    the disinfection of--
                              (i) a means of conveyance used in connection
                          with the importation of an animal;
                              (ii) an individual involved in the importation
                          of an animal and personal articles of the
                          individual; and
                              (iii) any article used in the importation of
                          an animal.
                        (B) Failure to comply with orders.--If an owner
                    fails to comply with an order of the Secretary under
                    this section, the Secretary may--
                              (i) take remedial action, destroy, or remove
                          from the United States the animal or progeny of
                          any animal, article, or means of conveyance as
                          authorized under paragraph (1); and
                              (ii) recover from the owner the costs of any
                          care, handling, disposal, or other action incurred
                          by the Secretary in connection with the remedial
                          action, destruction, or removal.

    SEC. 10405. <<NOTE: 7 USC 8304.>>  EXPORTATION.

        (a) In General.--The Secretary may prohibit or restrict--
                (1) the exportation of any animal, article, or means of
            conveyance if the Secretary determines that the prohibition or
            restriction is necessary to prevent the dissemination from or
            within the United States of any pest or disease of livestock;
                (2) the exportation of any livestock if the Secretary
            determines that the livestock is unfit to be moved;
                (3) the use of any means of conveyance or facility in
            connection with the exportation of any animal or article if the
            Secretary determines that the prohibition or restriction is
            necessary to prevent the dissemination from or within the United
            States of any pest or disease of livestock; or
                (4) the use of any means of conveyance in connection with
            the exportation of livestock if the Secretary determines that
            the prohibition or restriction is necessary because the means of
            conveyance has not been maintained in a clean and sanitary
            condition or does not have accommodations for the safe and
            proper movement and humane treatment of livestock.

        (b) Requirements of Owners.--
                (1) Orders to disinfect.--The Secretary may require the
            disinfection of--
                        (A) a means of conveyance used in connection with
                    the exportation of an animal;
                        (B) an individual involved in the exportation of an
                    animal and personal articles of the individual; and
                        (C) any article used in the exportation of an
                    animal.
                (2) Failure to comply with orders.--If an owner fails to
            comply with an order of the Secretary under this section, the
            Secretary may--

    [[Page 116 STAT. 498]]

                        (A) take remedial action with respect to the animal,
                    article, or means of conveyance referred to in paragraph
                    (1); and
                        (B) recover from the owner the costs of any care,
                    handling, disposal, or other action incurred by the
                    Secretary in connection with the remedial action.

        (c) Certification.--The Secretary may certify the classification,
    quality, quantity, condition, processing, handling, or storage of any
    animal or article intended for export.

    SEC. 10406. <<NOTE: 7 USC 8305.>>  INTERSTATE MOVEMENT.

        The Secretary may prohibit or restrict--
                (1) the movement in interstate commerce of any animal,
            article, or means of conveyance if the Secretary determines that
            the prohibition or restriction is necessary to prevent the
            introduction or dissemination of any pest or disease of
            livestock; and
                (2) the use of any means of conveyance or facility in
            connection with the movement in interstate commerce of any
            animal or article if the Secretary determines that the
            prohibition or restriction is necessary to prevent the
            introduction or dissemination of any pest or disease of
            livestock.

    SEC. 10407. <<NOTE: 7 USC 8306.>>  SEIZURE, QUARANTINE, AND DISPOSAL.

        (a) In General.--The Secretary may hold, seize, quarantine, treat,
    destroy, dispose of, or take other remedial action with respect to--
                (1) any animal or progeny of any animal, article, or means
            of conveyance that--
                        (A) is moving or has been moved in interstate
                    commerce or has been imported and entered; and
                        (B) the Secretary has reason to believe may carry,
                    may have carried, or may have been affected with or
                    exposed to any pest or disease of livestock at the time
                    of movement or that is otherwise in violation of this
                    subtitle;
                (2) any animal or progeny of any animal, article, or means
            of conveyance that is moving or is being handled, or has moved
            or has been handled, in interstate commerce in violation of this
            subtitle;
                (3) any animal or progeny of any animal, article, or means
            of conveyance that has been imported, and is moving or is being
            handled or has moved or has been handled, in violation of this
            subtitle; or
                (4) any animal or progeny of any animal, article, or means
            of conveyance that the Secretary finds is not being maintained,
            or has not been maintained, in accordance with any post-
            importation quarantine, post-importation condition, post-
            movement quarantine, or post-movement condition in accordance
            with this subtitle.

        (b) Extraordinary Emergencies.--
                (1) In general.--Subject to paragraph (2), if the Secretary
            determines that an extraordinary emergency exists because of the
            presence in the United States of a pest or disease of livestock
            and that the presence of the pest or disease threatens the
            livestock of the United States, the Secretary may--

    [[Page 116 STAT. 499]]

                        (A) hold, seize, treat, apply other remedial actions
                    to, destroy (including preventative slaughter), or
                    otherwise dispose of, any animal, article, facility, or
                    means of conveyance if the Secretary determines the
                    action is necessary to prevent the dissemination of the
                    pest or disease; and
                        (B) prohibit or restrict the movement or use within
                    a State, or any portion of a State of any animal or
                    article, means of conveyance, or facility if the
                    Secretary determines that the prohibition or restriction
                    is necessary to prevent the dissemination of the pest or
                    disease.
                (2) State action.--
                        (A) In general.--The Secretary may take action in a
                    State under this subsection only on finding that
                    measures being taken by the State are inadequate to
                    control or eradicate the pest or disease, after review
                    and consultation with--
                              ``(i) the Governor or an appropriate animal
                          health official of the State; or
                              ``(ii) in the case of any animal, article,
                          facility, or means of conveyance under the
                          jurisdiction of an Indian tribe, the head of the
                          Indian tribe.
                        (B) Notice.--Subject to subparagraph (C), before any
                    action is taken in a State under subparagraph (A), the
                    Secretary shall--
                              (i) notify the Governor, an appropriate animal
                          health official of the State, or head of the
                          Indian tribe of the proposed action;
                              (ii) <<NOTE: Public information.>>  issue a
                          public announcement of the proposed action; and
                              (iii) <<NOTE: Federal Register,
                          publication.>>  publish in the Federal Register--
                                        (I) the findings of the Secretary;
                                        (II) a description of the proposed
                                    action; and
                                        (III) a statement of the reasons for
                                    the proposed action.
                        (C) Notice after action.--If it is not practicable
                    to publish in the Federal Register the information
                    required under subparagraph (B)(iii) before taking
                    action under subparagraph (A), the Secretary shall
                    publish the information as soon as practicable, but not
                    later than 10 business days, after commencement of the
                    action.

        (c) Quarantine, Disposal, or Other Remedial Action.--
                (1) In general.--The Secretary, in writing, may order the
            owner of any animal, article, facility, or means of conveyance
            referred to in subsection (a) or (b) to maintain in quarantine,
            dispose of, or take other remedial action with respect to the
            animal, article, facility, or means of conveyance, in a manner
            determined by the Secretary.
                (2) Failure to comply with orders.--If the owner fails to
            comply with the order of the Secretary, the Secretary may--
                        (A) seize, quarantine, dispose of, or take other
                    remedial action with respect to the animal, article,
                    facility, or means of conveyance under subsection (a) or
                    (b); and
                        (B) recover from the owner the costs of any care,
                    handling, disposal, or other remedial action incurred by
                    the Secretary in connection with the seizure,
                    quarantine, disposal, or other remedial action.

        (d) Compensation.--

    [[Page 116 STAT. 500]]

                (1) In general.--Except as provided in paragraph (3), the
            Secretary shall compensate the owner of any animal, article,
            facility, or means of conveyance that the Secretary requires to
            be destroyed under this section.
                (2) Amount.--
                        (A) In general.--Subject to subparagraphs (B) and
                    (C), the compensation shall be based on the fair market
                    value, as determined by the Secretary, of the destroyed
                    animal, article, facility, or means of conveyance.
                        (B) Limitation.--Compensation paid any owner under
                    this subsection shall not exceed the difference
                    between--
                              (i) the fair market value of the destroyed
                          animal, article, facility, or means of conveyance;
                          and
                              (ii) any compensation received by the owner
                          from a State or other source for the destroyed
                          animal, article, facility, or means of conveyance.
                        (C) Reviewability.--The determination by the
                    Secretary of the amount to be paid under this subsection
                    shall be final and not subject to judicial review or
                    review of longer than 60 days by any officer or employee
                    of the Federal Government other than the Secretary or
                    the designee of the Secretary.
                (3) Exceptions.--No payment shall be made by the Secretary
            under this subsection for--
                        (A) any animal, article, facility, or means of
                    conveyance that has been moved or handled by the owner
                    in violation of an agreement for the control and
                    eradication of diseases or pests or in violation of this
                    subtitle;
                        (B) any progeny of any animal or article, which
                    animal or article has been moved or handled by the owner
                    of the animal or article in violation of this subtitle;
                        (C) any animal, article, or means of conveyance that
                    is refused entry under this subtitle; or
                        (D) any animal, article, facility, or means of
                    conveyance that becomes or has become affected with or
                    exposed to any pest or disease of livestock because of a
                    violation of an agreement for the control and
                    eradication of diseases or pests or a violation of this
                    subtitle by the owner.

    SEC. 10408. <<NOTE: 7 USC 8307.>>  INSPECTIONS, SEIZURES, AND WARRANTS.

        (a) Guidelines.--The activities authorized by this section shall be
    carried out consistent with guidelines approved by the Attorney General.
        (b) Warrantless Inspections.--The Secretary may stop and inspect,
    without a warrant, any person or means of conveyance moving--
                (1) into the United States, to determine whether the person
            or means of conveyance is carrying any animal or article
            regulated under this subtitle;
                (2) in interstate commerce, on probable cause to believe
            that the person or means of conveyance is carrying any animal or
            article regulated under this subtitle; or
                (3) in intrastate commerce from any State, or any portion of
            a State, quarantined under section 10407(b), on probable cause
            to believe that the person or means of conveyance is carrying
            any animal or article quarantined under section 10407(b).

    [[Page 116 STAT. 501]]

        (c) Inspections With Warrants.--
                (1) In general.--The Secretary may enter, with a warrant,
            any premises in the United States for the purpose of making
            inspections and seizures under this subtitle.
                (2) Application and issuance of warrants.--
                        (A) In general.--On proper oath or affirmation
                    showing probable cause to believe that there is on
                    certain premises any animal, article, facility, or means
                    of conveyance regulated under this subtitle, a United
                    States judge, a judge of a court of record in the United
                    States, or a United States magistrate judge may issue a
                    warrant for the entry on premises within the
                    jurisdiction of the judge or magistrate to make any
                    inspection or seizure under this subtitle.
                        (B) Execution.--The warrant may be applied for and
                    executed by the Secretary or any United States marshal.

    SEC. 10409. <<NOTE: 7 USC 8308.>>  DETECTION, CONTROL, AND ERADICATION
                OF DISEASES AND PESTS.

        (a) In General.--The Secretary may carry out operations and measures
    to detect, control, or eradicate any pest or disease of livestock
    (including the drawing of blood and diagnostic testing of animals),
    including animals at a slaughterhouse, stockyard, or other point of
    concentration.
        (b) Compensation.--
                (1) In general.--The Secretary may pay a claim arising out
            of the destruction of any animal, article, or means of
            conveyance consistent with the purposes of this subtitle.
                (2) Reviewability.--The action of the Secretary in carrying
            out paragraph (1) shall not be subject to review of longer than
            60 days by any officer or employee of the Federal Government
            other than the Secretary or the designee of the Secretary.

    SEC. 10410. <<NOTE: 7 USC 8309.>>  VETERINARY ACCREDITATION PROGRAM.

        (a) In General.--The Secretary may establish a veterinary
    accreditation program that is consistent with this subtitle, including
    the establishment of standards of conduct for accredited veterinarians.
        (b) Consultation.--The Secretary shall consult with State animal
    health officials and veterinary professionals regarding the
    establishment of the veterinary accreditation program.
        (c) Suspension or Revocation of Accreditation.--
                (1) In general.--The Secretary may, after notice and
            opportunity for a hearing on the record, suspend or revoke the
            accreditation of any veterinarian accredited under this title
            who violates this subtitle.
                (2) Final order.--The order of the Secretary suspending or
            revoking accreditation shall be treated as a final order
            reviewable under chapter 158 of title 28, United States Code.
                (3) Summary suspension.--
                        (A) In general.--The Secretary may summarily suspend
                    the accreditation of a veterinarian whom the Secretary
                    has reason to believe knowingly violated this subtitle.
                        (B) Hearings.--The Secretary shall provide the
                    veterinarian with a subsequent notice and an opportunity
                    for a prompt post-suspension hearing on the record.

    [[Page 116 STAT. 502]]

        (d) Application of Penalty Provisions.--The criminal and civil
    penalties described in section 10414 shall not apply to a violation of
    this section that is not a violation of any other provision of this
    subtitle.

    SEC. 10411. <<NOTE: 7 USC 8310.>>  COOPERATION.

        (a) In General.--To carry out this subtitle, the Secretary may
    cooperate with other Federal agencies, States or political subdivisions
    of States, national governments of foreign countries, local governments
    of foreign countries, domestic or international organizations, domestic
    or international associations, Indian tribes, and other persons.
        (b) Responsibility.--The person or other entity cooperating with the
    Secretary shall be responsible for the authority necessary to carry out
    operations or measures--
                (1) on all land and property within a foreign country or
            State, or under the jurisdiction of an Indian tribe, other than
            on land and property owned or controlled by the United States;
            and
                (2) using other facilities and means, as determined by the
            Secretary.

        (c) Screwworms.--
                (1) In general.--The Secretary may, independently or in
            cooperation with national governments of foreign countries or
            international organizations or associations, produce and sell
            sterile screwworms to any national government of a foreign
            country or international organization or association, if the
            Secretary determines that the livestock industry and related
            industries of the United States will not be adversely affected
            by the production and sale.
                (2) Proceeds.--
                        (A) Independent production and sale.--If the
                    Secretary independently produces and sells sterile
                    screwworms under paragraph (1), the proceeds of the sale
                    shall be--
                              (i) deposited into the Treasury of the United
                          States; and
                              (ii) credited to the account from which the
                          operating expenses of the facility producing the
                          sterile screwworms have been paid.
                        (B) Cooperative production and sale.--
                              (i) In general.--If the Secretary cooperates
                          to produce and sell sterile screwworms under
                          paragraph (1), the proceeds of the sale shall be
                          divided between the United States and the
                          cooperating national government or international
                          organization or association in a manner determined
                          by the Secretary.
                              (ii) Account.--The United States portion of
                          the proceeds shall be--
                                        (I) deposited into the Treasury of
                                    the United States; and
                                        (II) credited to the account from
                                    which the operating expenses of the
                                    facility producing the sterile
                                    screwworms have been paid.

        (d) Cooperation in Program Administration.--The Secretary may
    cooperate with State authorities, Indian tribe authorities, or other
    persons in the administration of regulations for the improvement of
    livestock and livestock products.

    [[Page 116 STAT. 503]]

        (e) Consultation and Coordination With Other Federal Agencies.--
                (1) In general.--The Secretary shall consult and coordinate
            with the head of a Federal agency with respect to any activity
            that is under the jurisdiction of the Federal agency.
                (2) Lead agency.--Subject to the consultation and
            coordination requirement in paragraph (1), the Department of
            Agriculture shall be the lead agency with respect to issues
            related to pests and diseases of livestock.

    SEC. 10412. <<NOTE: 7 USC 8311.>>  REIMBURSABLE AGREEMENTS.

        (a) Authority To Enter Into Agreements.--The Secretary may enter
    into reimbursable fee agreements with persons for preclearance of
    animals or articles at locations outside the United States for movement
    into the United States.
        (b) Funds Collected for Preclearance.--Funds collected for
    preclearance activities shall--
                (1) be credited to accounts that may be established by the
            Secretary for carrying out this section; and
                (2) remain available until expended for the preclearance
            activities, without fiscal year limitation.

        (c) Payment of Employees.--
                (1) In general.--Notwithstanding any other law, the
            Secretary may pay an officer or employee of the Department of
            Agriculture performing services under this subtitle relating to
            imports into and exports from the United States for all
            overtime, night, or holiday work performed by the officer or
            employee at a rate of pay determined by the Secretary.
                (2) Reimbursement.--
                        (A) In general.--The Secretary may require a person
                    for whom the services are performed to reimburse the
                    Secretary for any expenses paid by the Secretary for the
                    services under this subsection.
                        (B) Use of funds.--All funds collected under this
                    subsection shall--
                              (i) be credited to the account that incurs the
                          costs; and
                              (ii) remain available until expended, without
                          fiscal year limitation.

        (d) Late Payment Penalties.--
                (1) Collection.--On failure by a person to reimburse the
            Secretary in accordance with this section, the Secretary may
            assess a late payment penalty against the person, including
            interest on overdue funds, as required by section 3717 of title
            31, United States Code.
                (2) Use of funds.--Any late payment penalty and any accrued
            interest shall--
                        (A) be credited to the account that incurs the
                    costs; and
                        (B) remain available until expended, without fiscal
                    year limitation.

    SEC. 10413. <<NOTE: 7 USC 8312.>>  ADMINISTRATION AND CLAIMS.

        (a) Administration.--To carry out this subtitle, the Secretary may--
                (1) acquire and maintain real or personal property;
                (2) employ a person;
                (3) make a grant; and

    [[Page 116 STAT. 504]]

                (4) notwithstanding chapter 63 of title 31, United States
            Code, enter into a contract, cooperative agreement, memorandum
            of understanding, or other agreement.

        (b) Tort Claims.--
                (1) In general.--Except as provided in paragraph (2), the
            Secretary may pay a tort claim, in the manner authorized by the
            first paragraph of section 2672 of title 28, United States Code,
            if the claim arises outside the United States in connection with
            an activity authorized under this subtitle.
                (2) Requirements.--A claim may not be allowed under this
            subsection unless the claim is presented in writing to the
            Secretary not later than 2 years after the date on which the
            claim arises.

    SEC. 10414. <<NOTE: 7 USC 8313.>>  PENALTIES.

        (a) Criminal Penalties.--
                (1) Offenses.--
                        (A) In general.--A person that knowingly violates
                    this subtitle, or knowingly forges, counterfeits, or,
                    without authority from the Secretary, uses, alters,
                    defaces, or destroys any certificate, permit, or other
                    document provided for in this subtitle shall be fined
                    under title 18, United States Code, imprisoned not more
                    than 1 year, or both.
                        (B) Distribution or sale.--A person that knowingly
                    imports, enters, exports, or moves any animal or
                    article, for distribution or sale, in violation of this
                    subtitle, shall be fined under title 18, United States
                    Code, imprisoned not more than 5 years, or both.
                (2) Multiple violations.--On the second and any subsequent
            conviction of a person of a violation of this subtitle under
            paragraph (1), the person shall be fined under title 18, United
            States Code, imprisoned not more than 10 years, or both.

        (b) Civil Penalties.--
                (1) In general.--Except as provided in section 10410(d), any
            person that violates this subtitle, or that forges,
            counterfeits, or, without authority from the Secretary, uses,
            alters, defaces, or destroys any certificate, permit, or other
            document provided under this subtitle may, after notice and
            opportunity for a hearing on the record, be assessed a civil
            penalty by the Secretary that does not exceed the greater of--
                        (A)(i) $50,000 in the case of any individual, except
                    that the civil penalty may not exceed $1,000 in the case
                    of an initial violation of this subtitle by an
                    individual moving regulated articles not for monetary
                    gain;
                        (ii) $250,000 in the case of any other person for
                    each violation; and
                        (iii) $500,000 for all violations adjudicated in a
                    single proceeding; or
                        (B) twice the gross gain or gross loss for any
                    violation or forgery, counterfeiting, or unauthorized
                    use, alteration, defacing or destruction of a
                    certificate, permit, or other document provided under
                    this subtitle that results in the person's deriving
                    pecuniary gain or causing pecuniary loss to another
                    person.
                (2) Factors in determining civil penalty.--In determining
            the amount of a civil penalty, the Secretary shall take

    [[Page 116 STAT. 505]]

            into account the nature, circumstance, extent, and gravity of
            the violation or violations and the Secretary may consider, with
            respect to the violator--
                        (A) the ability to pay;
                        (B) the effect on ability to continue to do
                    business;
                        (C) any history of prior violations;
                        (D) the degree of culpability; and
                        (E) such other factors as the Secretary considers to
                    be appropriate.
                (3) Settlement of civil penalties.--The Secretary may
            compromise, modify, or remit, with or without conditions, any
            civil penalty that may be assessed under this subsection.
                (4) Finality of orders.--
                        (A) Final order.--The order of the Secretary
                    assessing a civil penalty shall be treated as a final
                    order reviewable under chapter 158 of title 28, United
                    States Code.
                        (B) Review.--The validity of the order of the
                    Secretary may not be reviewed in an action to collect
                    the civil penalty.
                        (C) Interest.--Any civil penalty not paid in full
                    when due under an order assessing the civil penalty
                    shall thereafter accrue interest until paid at the rate
                    of interest applicable to civil judgments of the courts
                    of the United States.

        (c) Liability for Acts of Agents.--In the construction and
    enforcement of this subtitle, the act, omission, or failure of any
    officer, agent, or person acting for or employed by any other person
    within the scope of the employment or office of the officer, agent, or
    person, shall be deemed also to be the act, omission, or failure of the
    other person.
        (d) Guidelines for Civil Penalties.--Subject to the approval of the
    Attorney General, the Secretary shall establish guidelines to determine
    under what circumstances the Secretary may issue a civil penalty or
    suitable notice of warning in lieu of prosecution by the Attorney
    General of a violation of this subtitle.

    SEC. 10415. <<NOTE: 7 USC 8314.>>  ENFORCEMENT.

        (a) Collection of Information.--
                (1) In general.--The Secretary may gather and compile
            information and conduct any inspection or investigation that the
            Secretary considers to be necessary for the administration or
            enforcement of this subtitle.
                (2) Subpoenas.--
                        (A) In general.--The Secretary shall have power to
                    issue a subpoena to compel the attendance and testimony
                    of any witness and the production of any documentary
                    evidence relating to the administration or enforcement
                    of this subtitle or any matter under investigation in
                    connection with this subtitle.
                        (B) Location of production.--The attendance of any
                    witness and production of documentary evidence relevant
                    to the inquiry may be required from any place in the
                    United States.
                        (C) Enforcement.--
                              (i) In general.--In case of disobedience to a
                          subpoena by any person, the Secretary may request
                          the Attorney General to invoke the aid of any
                          court of the United States within the jurisdiction
                          in which the

    [[Page 116 STAT. 506]]

                          investigation is conducted, or where the person
                          resides, is found, transacts business, is licensed
                          to do business, or is incorporated, to require the
                          attendance and testimony of any witness and the
                          production of documentary evidence.
                              (ii) Noncompliance.--In case of a refusal to
                          obey a subpoena issued to any person, a court may
                          order the person to appear before the Secretary
                          and give evidence concerning the matter in
                          question or to produce documentary evidence.
                              (iii) Contempt.--Any failure to obey the order
                          of the court may be punished by the court as
                          contempt of the court.
                        (D) Compensation.--
                              (i) Witnesses.--A witness summoned by the
                          Secretary under this subtitle shall be paid the
                          same fees and mileage that are paid to a witness
                          in a court of the United States.
                              (ii) Depositions.--A witness whose deposition
                          is taken, and the person taking the deposition,
                          shall be entitled to the same fees that are paid
                          for similar services in a court of the United
                          States.
                        (E) Procedures.--
                              (i) Publication.--The Secretary shall publish
                          procedures for the issuance of subpoenas under
                          this section.
                              (ii) Review.--The procedures shall include a
                          requirement that subpoenas be reviewed for legal
                          sufficiency and, to be effective, be signed by the
                          Secretary.
                              (iii) Delegation.--If the authority to sign a
                          subpoena is delegated to an agency other than the
                          Office of Administrative Law Judges, the agency
                          receiving the delegation shall seek review of the
                          subpoena for legal sufficiency outside that
                          agency.

        (b) Authority of Attorney General.--The Attorney General may--
                (1) prosecute, in the name of the United States, all
            criminal violations of this subtitle that are referred to the
            Attorney General by the Secretary or are brought to the notice
            of the Attorney General by any person;
                (2) bring an action to enjoin the violation of or to compel
            compliance with this subtitle, or to enjoin any interference by
            any person with the Secretary in carrying out this subtitle, in
            any case in which the Secretary has reason to believe that the
            person has violated, or is about to violate this subtitle or has
            interfered, or is about to interfere, with the actions of the
            Secretary; or
                (3) bring an action for the recovery of any unpaid civil
            penalty, funds under a reimbursable agreement, late payment
            penalty, or interest assessed under this subtitle.

        (c) Court Jurisdiction.--
                (1) In general.--The United States district courts, the
            District Court of Guam, the District Court of the Northern
            Mariana Islands, the District Court of the Virgin Islands, the
            highest court of American Samoa, and the United States courts of
            the other territories and possessions are vested with
            jurisdiction in all cases arising under this subtitle.

    [[Page 116 STAT. 507]]

                (2) Venue.--Any action arising under this subtitle may be
            brought, and process may be served, in the judicial district
            where a violation or interference occurred or is about to occur,
            or where the person charged with the violation, interference,
            impending violation, impending interference, or failure to pay
            resides, is found, transacts business, is licensed to do
            business, or is incorporated.
                (3) Exception.--Paragraphs (1) and (2) do not apply to
            sections 10410(c) and 10414(b).

    SEC. 10416. <<NOTE: 7 USC 8315.>>  REGULATIONS AND ORDERS.

        The Secretary may promulgate such regulations, and issue such
    orders, as the Secretary determines necessary to carry out this
    subtitle.

    SEC. 10417. <<NOTE: 7 USC 8316.>>  AUTHORIZATION OF APPROPRIATIONS.

        (a) In General.--There are authorized to be appropriated such sums
    as are necessary to carry out this subtitle.
        (b) Transfer of Funds.--
                (1) In general.--In connection with an emergency under which
            a pest or disease of livestock threatens any segment of
            agricultural production in the United States, the Secretary may
            transfer from other appropriations or funds available to the
            agencies or corporations of the Department of Agriculture such
            funds as the Secretary determines are necessary for the arrest,
            control, eradication, or prevention of the spread of the pest or
            disease of livestock and for related expenses.
                (2) Availability.--Any funds transferred under this
            subsection shall remain available until expended, without fiscal
            year limitation.
                (3) Reviewability.--The action of any officer, employee, or
            agent of the Secretary in carrying out this section (including
            determining the amount of and making any payment authorized to
            be made under this subtitle) shall not be subject to review of
            longer than 60 days by any officer or employee of the Federal
            Government other than the Secretary or the designee of the
            Secretary.

        (c) Use of Funds.--In carrying out this subtitle, the Secretary may
    use funds made available to carry out this subtitle for--
                (1) the employment of civilian nationals in foreign
            countries; and
                (2) the construction and operation of research laboratories,
            quarantine stations, and other buildings and facilities for
            special purposes.

    SEC. 10418. REPEALS AND CONFORMING AMENDMENTS.

        (a) Repeals.--The following provisions of law are repealed:
                (1) <<NOTE: 21 USC 129a and note.>>  Public Law 97-46 (7
            U.S.C. 147b).
                (2) Section 101(b) of the Act of September 21, 1944 (7
            U.S.C. 429).
                (3) The Act of August 28, 1950 (7 U.S.C. 2260).
                (4) Section 919 of the Federal Agriculture Improvement and
            Reform Act of 1996 (7 U.S.C. 2260a).
                (5) Section 306 of the Tariff Act of 1930 (19 U.S.C. 1306).
                (6) Sections 6 through 8 and 10 of the Act of August 30,
            1890 (21 U.S.C. 102 through 105).
                (7) The Act <<NOTE: 21 USC 111-113, 120-122.>>  of February
            2, 1903 (21 U.S.C. 111, 120 through 122).

    [[Page 116 STAT. 508]]

                (8) Sections 2 through 9, 11, and 13 of the Act of May 29,
            1884 (21 U.S.C. 112, 113, 114, 114a, 114a-1, 115 through 120,
            130).
                (9) The first section and sections 2, 3, and 5 of the Act of
            February 28, 1947 (21 U.S.C. 114b, 114c, 114d, 114d-1).
                (10) The Act of June 16, 1948 (21 U.S.C. 114e, 114f).
                (11) Public Law 87-209 (21 U.S.C. 114g, 114h).
                (12) The third and fourth provisos of the fourth paragraph
            under the heading ``bureau of animal industry'' of the Act of
            May 31, 1920 (21 U.S.C. 116).
                (13) The first section and sections 2, 3, 4, and 6 of the
            Act of March 3, 1905 (21 U.S.C. 123 through 127).
                (14) The first proviso under the heading ``General expenses,
            Bureau of Animal Industry'' under the heading ``BUREAU OF ANIMAL
            INDUSTRY'' of the Act of June 30, 1914 (21 U.S.C. 128).
                (15) The fourth proviso under the heading ``salaries and
            expenses'' under the heading ``Animal and Plant Health
            Inspection Service'' of title I of the Agriculture, Rural
            Development, Food and Drug Administration, and Related Agencies
            Appropriations Act, 2001 (21 U.S.C. 129).
                (16) The third paragraph under the heading ``MISCELLANEOUS''
            of the Act of May 26, 1910 (21 U.S.C. 131).
                (17) The first section and sections 2 through 6 and 11
            through 13 of Public Law 87-518 (21 U.S.C. 134 through 134h).
                (18) Public Law 91-239 (21 U.S.C. 135 through 135b).
                (19) Sections 12 through 14 of the Federal Meat Inspection
            Act (21 U.S.C. 612 through 614).
                (20) Chapter 39 of title 46, United States Code.

        (b) Conforming Amendments.--
                (1) Section 414(b) of the Plant Protection Act (7 U.S.C.
            7714(b)) is amended--
                        (A) in paragraph (1), by striking ``, or the owner's
                    agent,''; and
                        (B) in paragraph (2), by striking ``or agent of the
                    owner'' each place it appears.
                (2) Section 423 of the Plant Protection Act (7 U.S.C. 7733)
            is amended--
                        (A) by striking subsection (b) and inserting the
                    following:

        ``(b) Location of Production.--The attendance of any witness and
    production of documentary evidence relevant to the inquiry may be
    required from any place in the United States.'';
                        (B) in the third sentence of subsection (e), by
                    inserting ``to an agency other than the Office of
                    Administrative Law Judges'' after ``is delegated''; and
                        (C) by striking subsection (f).
                (3) Section 11(h) of the Endangered Species Act of 1973 (16
            U.S.C. 1540(h)) is amended in the first sentence by striking
            ``animal quarantine laws (21 U.S.C. 101-105, 111-135b, and 612-
            614)'' and inserting ``animal quarantine laws (as defined in
            section 2509(f) of the Food, Agriculture, Conservation, and
            Trade Act of 1990 (21 U.S.C. 136a(f))''.
                (4) Section 18 of the Federal Meat Inspection Act (21 U.S.C.
            618) is amended by striking ``of the cattle'' and all that
            follows through ``as herein described'' and inserting ``of the
            carcasses

    [[Page 116 STAT. 509]]

            and products of cattle, sheep, swine, goats, horses, mules, and
            other equines''.
                (5) Section 2509 of the Food, Agriculture, Conservation, and
            Trade Act of 1990 (21 U.S.C. 136a) is amended--
                        (A) in subsection (c), by inserting after paragraph
                    (1) the following:
                ``(2) Veterinary diagnostics.--The Secretary may prescribe
            and collect fees to recover the costs of carrying out the
            provisions of the Animal Health Protection Act that relate to
            veterinary diagnostics.''; and
                        (B) in subsection (f)(1), by striking subparagraphs
                    (B) through (O) and inserting the following:
                        ``(B) section 9 of the Act of August 30, 1890 (21
                    U.S.C. 101);
                        ``(C) the Animal Health Protection Act; or
                        ``(D) any other Act administered by the Secretary
                    relating to plant or animal diseases or pests.''.

        (c) Effect on Regulations.-- <<NOTE: 7 USC 8317.>> A regulation
    issued under a provision of law repealed by subsection (a) shall remain
    in effect until the Secretary issues a regulation under section 10404(b)
    or 10416 that supersedes the earlier regulation.

                              Subtitle F--Livestock

    SEC. 10501. TRANSPORTATION OF POULTRY AND OTHER ANIMALS.

        Section 5402(d)(2) of title 39, United States Code, is amended--
                (1) in subparagraph (A), by inserting ``, honeybees,'' after
            ``poultry''; and
                (2) by striking subparagraph (C).

    SEC. 10502. SWINE CONTRACTORS.

        (a) Definitions.--Section 2(a) of the Packers and Stockyards Act,
    1921 (7 U.S.C. 182(a)), is amended by adding at the end the following:
                ``(12) Swine contractor.--The term `swine contractor' means
            any person engaged in the business of obtaining swine under a
            swine production contract for the purpose of slaughtering the
            swine or selling the swine for slaughter, if--
                        ``(A) the swine is obtained by the person in
                    commerce; or
                        ``(B) the swine (including products from the swine)
                    obtained by the person is sold or shipped in commerce.
                ``(13) Swine production contract.--The term `swine
            production contract' means any growout contract or other
            arrangement under which a swine production contract grower
            raises and cares for the swine in accordance with the
            instructions of another person.
                ``(14) Swine production contract grower.--The term `swine
            production contract grower' means any person engaged in the
            business of raising and caring for swine in accordance with the
            instructions of another person.''.

        (b) Swine Contractors.--
                (1) In general.--The Packers and Stockyards Act, 1921, is
            amended by striking ``packer'' each place it appears in sections
            202, 203, 204, and 205 (7 U.S.C. 192, 193, 194, 195)

    [[Page 116 STAT. 510]]

            (other than section 202(c)) and inserting ``packer or swine
            contractor''.
                (2) Conforming amendments.--
                        (A) Section 202(c) of the Packers and Stockyards
                    Act, 1921 (7 U.S.C. 192(c)), is amended by inserting ``,
                    swine contractor,'' after ``other packer'' each place it
                    appears.
                        (B) Section 308(a) of the Packers and Stockyards
                    Act, 1921 (7 U.S.C. 209(a)), is amended by inserting
                    ``or swine production contract'' after ``poultry growing
                    arrangement''.
                        (C) Sections 401 and 403 of the Packers and
                    Stockyards Act, 1921 (7 U.S.C. 221, 223), are amended by
                    inserting ``any swine contractor, and'' after
                    ``packer,'' each place it appears.

    SEC. 10503. <<NOTE: 7 USC 229b.>>  RIGHT TO DISCUSS TERMS OF CONTRACT.

        (a) Definitions.--In this section:
                (1) Producer.--The term ``producer'' means any person
            engaged in the raising and caring for livestock or poultry for
            slaughter.
                (2) Processor.--The term ``processor'' means any person
            engaged in the business of obtaining livestock or poultry for
            the purpose of slaughtering the livestock or poultry.

        (b) No Prohibition of Discussion.--Notwithstanding a provision in
    any contract between a producer and a processor for the production of
    livestock or poultry, or in any marketing agreement between a producer
    and a processor for the sale of livestock or poultry for a term of 1
    year or more, that provides that information contained in the contract
    is confidential, a party to the contract shall not be prohibited from
    discussing any terms or details of the contract with--
                (1) a Federal or State agency;
                (2) a legal adviser to the party;
                (3) a lender to the party;
                (4) an accountant hired by the party;
                (5) an executive or manager of the party;
                (6) a landlord of the party; or
                (7) a member of the immediate family of the party.

        (c) Effect on State Laws.--Subsection (b) does not--
                (1) preempt any State law that addresses confidentiality
            provisions in contracts for the sale or production of livestock
            or poultry, except any provision of State law that makes lawful
            a contract provision that prohibits a party from, or limits a
            party in, engaging in discussion that subsection (b) requires to
            be permitted; or
                (2) deprive any State court of jurisdiction under any such
            State law.

        (d) Applicability.--This section applies to each contract described
    in subsection (b) that is entered into, amended, renewed, or extended
    after the date of enactment of this Act.

    SEC. 10504. <<NOTE: 7 USC 8318.>>  VETERINARY TRAINING.

        The Secretary of Agriculture may develop a program to maintain in
    all regions of the United States a sufficient number of Federal and
    State veterinarians who are well trained in recognition and diagnosis of
    exotic and endemic animal diseases.

    [[Page 116 STAT. 511]]

    SEC. 10505. PSEUDORABIES ERADICATION PROGRAM.

        Section 2506(d) of the Food, Agriculture, Conservation, and Trade
    Act of 1990 (21 U.S.C. 114i(d)) is amended by striking ``2002'' and
    inserting ``2007''.

                           Subtitle G--Specialty Crops

    SEC. 10601. MARKETING ORDERS FOR CANEBERRIES.

        (a) In General.--Section 8c of the Agricultural Adjustment Act (7
    U.S.C. 608c), reenacted with amendments by the Agricultural Marketing
    Agreement Act of 1937, is amended--
                (1) in subsection (2)(A), by inserting ``caneberries
            (including raspberries, blackberries, and loganberries),'' after
            ``other than pears, olives, grapefruit, cherries,''; and
                (2) in subsection (6)(I), by striking ``tomatoes,,'' and
            inserting ``tomatoes, caneberries (including raspberries,
            blackberries, and loganberries),''.

        (b) Conforming Amendment.--Section 8e(a) of the Agricultural
    Adjustment Act (7 U.S.C. 608e-l(a)), reenacted with amendments by the
    Agricultural Marketing Agreement Act of 1937, is amended in the first
    sentence by striking ``or apples'' and inserting ``apples, or
    caneberries (including raspberries, blackberries, and loganberries)''.

    SEC. 10602. AVAILABILITY OF SECTION 32 FUNDS.

        The second undesignated paragraph of section 32 of the Act of August
    24, 1935 (7 U.S.C. 612c), is amended by striking ``$300,000,000'' and
    inserting ``$500,000,000''.

    SEC. 10603. <<NOTE: 7 USC 612c-4.>>  PURCHASE OF SPECIALTY CROPS.

        (a) General Purchase Authority.--Of the funds made available under
    section 32 of the Act of August 24, 1935 (7 U.S.C. 612c), for fiscal
    year 2002 and each subsequent fiscal year, the Secretary of Agriculture
    shall use not less than $200,000,000 each fiscal year to purchase
    fruits, vegetables, and other specialty food crops.
        (b) Purchase Authority.--
                (1) Purchase.--Of the amount specified in subsection (a),
            the Secretary of Agriculture shall use not less than $50,000,000
            each fiscal year for the purchase of 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)).
                (2) Servicing agency.--The Secretary of Agriculture shall
            provide for the Secretary of Defense to serve as the servicing
            agency for the procurement of the fresh fruits and vegetables
            under this subsection on the same terms and conditions as
            provided in the memorandum of agreement entered into between the
            Agricultural Marketing Service, the Food and Consumer Service,
            and the Defense Personnel Support Center during August 1995 (or
            any successor memorandum of agreement).

        (c) Definitions.--In this section, the terms ``fruits'',
    ``vegetables'', and ``other specialty food crops'' shall have the
    meaning given the terms by the Secretary of Agriculture.

    [[Page 116 STAT. 512]]

    SEC. 10604. PROTECTION FOR PURCHASERS OF FARM PRODUCTS.

        (a) Definition of Effective Financing Statement.--Section 1324(c)(4)
    of the Food Security Act of 1985 (7 U.S.C. 1631(c)(4)) is amended--
                (1) in subparagraph (B), by striking ``signed'' and
            inserting ``signed, authorized, or otherwise authenticated by
            the debtor,'';
                (2) by striking subparagraph (C);
                (3) in subparagraph (D)--
                        (A) in clause (iii), by adding ``and'' after the
                    semicolon at the end; and
                        (B) in clause (iv), by striking ``applicable;'' and
                    all that follows and inserting ``applicable, and the
                    name of each county or parish in which the farm products
                    are produced or located;'';
                (4) in subparagraph (E), by striking ``signed'' and
            inserting ``signed, authorized, or otherwise authenticated by
            the debtor'';
                (5) in subparagraph (G), by striking ``notice signed'' and
            inserting ``notice signed, authorized, or otherwise
            authenticated''; and
                (6) by redesignating subparagraphs (D) through (I) as
            subparagraphs (C) through (H), respectively.

        (b) Purchases Subject to Security Interests.--Section 1324(e) of the
    Food Security Act of 1985 (7 U.S.C. 1631(e)) is amended--
                (1) in paragraph (1)(A)(ii)--
                        (A) in subclause (III), by adding ``and'' after the
                    semicolon at the end; and
                        (B) in subclause (IV), by striking ``crop year,''
                    and all that follows and inserting ``crop year, and the
                    name of each county or parish in which the farm products
                    are produced or located;'';
                (2) in paragraph (1)(A)(iii), by striking ``similarly
            signed'' and inserting ``similarly signed, authorized, or
            otherwise authenticated'';
                (3) in paragraph (1)(A)(iv), by striking ``notice signed''
            and inserting ``notice signed, authorized, or otherwise
            authenticated'';
                (4) in paragraph (1)(A)(v), by inserting ``contains'' before
            ``any payment''; and
                (5) in paragraph (3)--
                        (A) in subparagraph (A), by striking
                    ``subparagraph'' and inserting ``subsection''; and
                        (B) in subparagraph (B), by striking ``; and'' and
                    inserting a period.

        (c) Certain Sales Subject to Security Interest.--Section
    1324(g)(2)(A) of the Food Security Act of 1985 (7 U.S.C. 1631(g)(2)(A))
    is amended--
                (1) in clause (ii)--
                        (A) in subclause (III), by adding ``and'' after the
                    semicolon at the end; and
                        (B) in subclause (IV), by striking ``crop year,''
                    and all that follows and inserting ``crop year, and the
                    name of each county or parish in which the farm products
                    are produced or located;'';
                (2) in clause (iii), by striking ``similarly signed'' and
            inserting ``similarly signed, authorized, or otherwise
            authenticated'';

    [[Page 116 STAT. 513]]

                (3) in clause (iv), by striking ``notice signed'' and
            inserting ``notice signed, authorized, or otherwise
            authenticated''; and
                (4) in clause (v), by inserting ``contains'' before ``any
            payment''.

    SEC. 10605. FARMERS' MARKET PROMOTION PROGRAM.

        (a) In General.--The Farmer-to-Consumer Direct Marketing Act of 1976
    is amended by inserting after section 5 (7 U.S.C. 3004) the following:

    ``SEC. 6. <<NOTE: 7 USC 3005.>>  FARMERS' MARKET PROMOTION PROGRAM.

        ``(a) Establishment.--The Secretary shall carry out a program, to be
    known as the `Farmers' Market Promotion Program' (referred to in this
    section as the `Program'), to make grants to eligible entities for
    projects to establish, expand, and promote farmers' markets.
        ``(b) Program Purposes.--
                ``(1) In general.--The purposes of the Program are--
                        ``(A) to increase domestic consumption of
                    agricultural commodities by improving and expanding, or
                    assisting in the improvement and expansion of, domestic
                    farmers' markets, roadside stands, community-supported
                    agriculture programs, and other direct producer-to-
                    consumer market opportunities; and
                        ``(B) to develop, or aid in the development of, new
                    farmers' markets, roadside stands, community-supported
                    agriculture programs, and other direct producer-to-
                    consumer infrastructure.
                ``(2) Limitations.--An eligible entity may not use a grant
            or other assistance provided under the Program for the purchase,
            construction, or rehabilitation of a building or structure.

        ``(c) Eligible Entities.--An entity shall be eligible to receive a
    grant under the Program if the entity is--
                ``(1) an agricultural cooperative;
                ``(2) a local government;
                ``(3) a nonprofit corporation;
                ``(4) a public benefit corporation;
                ``(5) an economic development corporation;
                ``(6) a regional farmers' market authority; or
                ``(7) such other entity as the Secretary may designate.

        ``(d) Criteria and Guidelines.--The Secretary shall establish
    criteria and guidelines for the submission, evaluation, and funding of
    proposed projects under the Program.
        ``(e) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as are necessary to carry out this section for
    each of fiscal years 2002 through 2007.''.
        (b) Technical and Conforming Amendments.--
                (1) Survey.--Section 4 of the Farmer-to-Consumer Direct
            Marketing Act of 1976 (7 U.S.C. 3003) is amended--
                        (A) in the first sentence, by striking ``a
                    continuing'' and inserting ``an annual''; and
                        (B) by striking the second sentence.
                (2) Direct marketing assistance.--Section 5 of the Farmer-
            to-Consumer Direct Marketing Act of 1976 (7 U.S.C. 3004) is
            amended--
                        (A) in subsection (a)--

    [[Page 116 STAT. 514]]

                              (i) in the first sentence, by striking
                          ``Extension Service of the United States
                          Department of Agriculture'' and inserting
                          ``Secretary''; and
                              (ii) in the second sentence--
                                        (I) by striking ``Extension
                                    Service'' and inserting ``Secretary'';
                                    and
                                        (II) by striking ``and on the basis
                                    of which of these two agencies, or
                                    combination thereof, can best perform
                                    these activities'' and inserting ``, as
                                    determined by the Secretary'';
                        (B) by redesignating subsection (b) as subsection
                    (c); and
                        (C) by inserting after subsection (a) the following:

        ``(b) Development of Farmers' Markets.--The Secretary shall--
                ``(1) work with the Governor of a State, and a State agency
            designated by the Governor, to develop programs to train
            managers of farmers' markets;
                ``(2) develop opportunities to share information among
            managers of farmers' markets;
                ``(3) establish a program to train cooperative extension
            service employees in the development of direct marketing
            techniques; and
                ``(4) work with producers to develop farmers' markets.''.

    SEC. 10606. <<NOTE: 7 USC 6523.>>  NATIONAL ORGANIC CERTIFICATION COST-
                SHARE PROGRAM.

        (a) In General.--Of funds of the Commodity Credit Corporation, the
    Secretary of Agriculture (acting through the Agricultural Marketing
    Service) shall use $5,000,000 for fiscal year 2002, to remain available
    until expended, 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.).
        (b) Federal Share.--
                (1) In general.--Subject to paragraph (2), the Secretary
            shall pay under this section 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.
                (2) Maximum amount.--The maximum amount of a payment made to
            a producer or handler under this section shall be $500.

    SEC. 10607. EXEMPTION OF CERTIFIED ORGANIC PRODUCTS FROM ASSESSMENTS.

        (a) In General.--Section 501 of the Federal Agriculture Improvement
    and Reform Act of 1996 (7 U.S.C. 7401) is amended by adding at the end
    the following:
        ``(e) Exemption of Certified Organic Products from Assessments.--
                ``(1) In general.--Notwithstanding any provision of a
            commodity promotion law, a person that produces and markets
            solely 100 percent organic products, and that does not produce
            any conventional or nonorganic products, shall be exempt from
            the payment of an assessment under a commodity promotion law
            with respect to any agricultural commodity that is produced

    [[Page 116 STAT. 515]]

            on a certified organic farm (as defined in section 2103 of the
            Organic Foods Production Act of 1990 (7 U.S.C. 6502)).
                ``(2) <<NOTE: Deadline.>>  Regulations.--Not later than 1
            year after the date of enactment of this subsection, the
            Secretary shall promulgate regulations concerning eligibility
            and compliance for an exemption under paragraph (1).''.

        (b) Technical Amendments.--Section 501(a) of the Federal Agriculture
    Improvement and Reform Act of 1996 (7 U.S.C. 7401(a)) is amended--
                (1) in paragraph (17), by striking ``or'';
                (2) in paragraph (18), by striking the period and inserting
            ``; or''; and
                (3) by adding at the end the following:
                ``(19) any other provision of law enacted after April 4,
            1996, that provides for the establishment and operation of a
            promotion program described in the first sentence.''.

    SEC. 10608. <<NOTE: 16 USC 3801 note.>>  CRANBERRY ACREAGE RESERVE
                PROGRAM.

        (a) Definitions.--In this section:
                (1) Eligible area.--The term ``eligible area'' means a
            wetland or buffer strip adjacent to a wetland that, as
            determined by the Secretary--
                        (A)(i) is used, and has a history of being used, for
                    the cultivation of cranberries; or
                        (ii) is an integral component of a cranberry-growing
                    operation;
                        (B) is located in an environmentally sensitive area.
                (2) Secretary.--The term ``Secretary'' means the Secretary
            of Agriculture.

        (b) Program.--The Secretary shall establish a program to purchase
    permanent easements in eligible areas from willing sellers.
        (c) Purchase Price.--The Secretary shall ensure, to the maximum
    extent practicable, that each easement purchased under this section is
    for an amount that appropriately reflects the range of values for
    agricultural and nonagricultural land in the region in which the
    eligible area subject to the easement is located (including whether that
    land is located in 1 or more environmentally sensitive areas, as
    determined by the Secretary).
        (d) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $10,000,000.

                           Subtitle H--Administration

    SEC. 10701. INITIAL RATE OF BASIC PAY FOR EMPLOYEES OF COUNTY
                COMMITTEES.

        Section 5334 of title 5, United States Code, is amended by striking
    subsection (e) and inserting the following:
        ``(e) An employee of a county committee established pursuant to
    section 8(b) of the Soil Conservation and Domestic Allotment Act (16
    U.S.C. 590h(b)) may, on appointment to a position subject to this
    subchapter, have the initial rate of basic pay of the employee fixed
    at--
                ``(1) the lowest rate of the higher grade that exceeds the
            rate of basic pay of the employee with the county committee by
            not less than 2 step-increases of the grade from which the
            employee was promoted, if the Federal Civil Service position

    [[Page 116 STAT. 516]]

            under this subchapter is at a higher grade than the last grade
            the employee had while an employee of the county committee;
                ``(2) the same step of the grade as the employee last held
            during service with the county committee, if the Federal Civil
            Service position under this subchapter is at the same grade as
            the last grade the employee had while an employee of the county
            committee; or
                ``(3) the lowest step of the Federal grade for which the
            rate of basic pay is equal to or greater than the highest
            previous rate of pay of the employee, if the Federal Civil
            Service position under this subchapter is at a lower grade than
            the last grade the employee had while an employee of the county
            committee.''.

    SEC. 10702. COMMODITY FUTURES TRADING COMMISSION PAY COMPARABILITY.

        (a) Appointment and Compensation of Employees of the Commission.--
    Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)) is amended--
                (1) by redesignating paragraphs (7) through (11) as
            paragraphs (8) through (12), respectively; and
                (2) by inserting after paragraph (6) the following:
                ``(7) Appointment and compensation.--
                        ``(A) In general.--The Commission may appoint and
                    fix the compensation of such officers, attorneys,
                    economists, examiners, and other employees as may be
                    necessary for carrying out the functions of the
                    Commission under this Act.
                        ``(B) Rates of pay.--Rates of basic pay for all
                    employees of the Commission may be set and adjusted by
                    the Commission without regard to chapter 51 or
                    subchapter III of chapter 53 of title 5, United States
                    Code.
                        ``(C) Comparability.--
                              ``(i) In general.--The Commission may provide
                          additional compensation and benefits to employees
                          of the Commission if the same type of compensation
                          or benefits are provided by any agency referred to
                          in section 1206(a) of the Financial Institutions
                          Reform, Recovery, and Enforcement Act of 1989 (12
                          U.S.C. 1833b(a)) or could be provided by such an
                          agency under applicable provisions of law
                          (including rules and regulations).
                              ``(ii) Consultation.--In setting and adjusting
                          the total amount of compensation and benefits for
                          employees, the Commission shall consult with, and
                          seek to maintain comparability with, the agencies
                          referred to in section 1206(a) of the Financial
                          Institutions Reform, Recovery, and Enforcement Act
                          of 1989 (12 U.S.C. 1833b(a)).''.

        (b) Reporting of Information by the Commission.--Section 1206 of the
    Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
    U.S.C. 1833b) is amended--
                (1) by striking ``The Federal'' and inserting the following:

        ``(a) In General.--The Federal''; and
                (2) by adding at the end the following:

        ``(b) Commodity Futures Trading Commission.--In establishing and
    adjusting schedules of compensation and benefits for

    [[Page 116 STAT. 517]]

    employees of the Commodity Futures Trading Commission under applicable
    provisions of law, the Commission shall--
                ``(1) inform the heads of the agencies referred to in
            subsection (a) and Congress of such compensation and benefits;
            and
                ``(2) seek to maintain comparability with those agencies
            regarding compensation and benefits.''.

        (c) Conforming Amendments.--
                (1) Section 3132(a)(1) of title 5, United States Code, is
            amended--
                        (A) in subparagraph (C), by striking ``or'' at the
                    end;
                        (B) in subparagraph (D), by adding ``or'' at the
                    end; and
                        (C) by adding at the end the following:
                        ``(E) the Commodity Futures Trading Commission;''.
                (2) Section 5316 of title 5, United States Code, is
            amended--
                        (A) by striking ``General Counsel, Commodity Futures
                    Trading Commission.''; and
                        (B) by striking ``Executive Director, Commodity
                    Futures Trading Commission.''.
                (3) Section 5373(a) of title 5, United States Code, is
            amended--
                        (A) in paragraph (2), by striking ``or'' at the end;
                        (B) in paragraph (3), by striking the period at the
                    end and inserting ``; or''; and
                        (C) by adding at the end the following:
                ``(4) section 2(a)(7) of the Commodity Exchange Act (7
            U.S.C. 2(a)(7)).''.

    SEC. 10703. <<NOTE: 7 USC 2219a.>>  OVERTIME AND HOLIDAY PAY.

        (a) In General.--The Secretary of Agriculture may--
                (1) pay employees of the Department of Agriculture employed
            in an establishment subject to the Federal Meat Inspection Act
            (21 U.S.C. 601 et seq.) or the Poultry Products Inspection Act
            (21 U.S.C. 451 et seq.) for all overtime and holiday work
            performed at the establishment at rates determined by the
            Secretary, subject to applicable law relating to minimum wages
            and maximum hours; and
                (2) accept from the establishment reimbursement for any sums
            paid by the Secretary for the overtime and holiday work, at
            rates determined under paragraph (1).

        (b) Availability.--Sums received by the Secretary under this section
    shall remain available until expended without further appropriation and
    without fiscal year limitation, to carry out subsection (a).
        (c) Conforming Amendments.--
                (1) Section 25 of the Poultry Products Inspection Act (21
            U.S.C. 468) is amended by striking ``except that the cost'' and
            all that follows and inserting ``except the cost of overtime and
            holiday pay paid pursuant to the section 10703 of the Farm
            Security and Rural Investment Act of 2002.''.
                (2) The Act of June 5, 1948 (21 U.S.C. 695), is amended by
            striking ``overtime'' and all that follows and inserting
            ``overtime and holiday pay paid pursuant to section 10703 of the
            Farm Security and Rural Investment Act of 2002.''.

    [[Page 116 STAT. 518]]

                (3) The matter under the heading ``bureau of animal
            industry'' of the Act of <<NOTE: 7 USC 394.>> July 24, 1919, is
            amended by striking the next to the last paragraph (7 U.S.C.
            394).
                (4) Section 5549 of title 5, United States Code is amended
            by striking paragraph (1) and inserting the following:
                ``(1) section 10703 of the Farm Security and Rural
            Investment Act of 2002;''.

    SEC. 10704. ASSISTANT SECRETARY OF AGRICULTURE FOR CIVIL RIGHTS.

        (a) In General.--Section 218 of the Department of Agriculture
    Reorganization Act of 1994 (7 U.S.C. 6918) is amended--
                (1) in subsection (a)--
                        (A) in paragraph (1), by striking ``and'' at the
                    end;
                        (B) in paragraph (2), by striking the period at the
                    end and inserting ``; and''; and
                        (C) by adding at the end the following:
                ``(3) Assistant Secretary of Agriculture for Civil
            Rights.''; and
                (2) by striking subsections (d) and (e) and inserting the
            following:

        ``(d) Duties of Assistant Secretary of Agriculture for Civil
    Rights.--The Secretary may delegate to the Assistant Secretary for Civil
    Rights responsibility for--
                ``(1) ensuring compliance with all civil rights and related
            laws by all agencies and under all programs of the Department;
                ``(2) coordinating administration of civil rights laws
            (including regulations) within the Department for employees of,
            and participants in, programs of the Department; and
                ``(3) ensuring that necessary and appropriate civil rights
            components are properly incorporated into all strategic planning
            initiatives of the Department and agencies of the Department.''.

        (b) Compensation.--Section 5315 of title 5, United States Code, is
    amended by striking ``Assistant Secretaries of Agriculture (2)'' and
    inserting ``Assistant Secretaries of Agriculture (3)''.
        (c) Conforming Amendments.--Section 296(b) of the Department of
    Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)) is amended--
                (1) in paragraph (3), by striking ``or'' at the end;
                (2) in paragraph (4), by striking the period at the end and
            inserting ``; or''; and
                (3) by adding at the end the following:
                ``(5) the authority of the Secretary to establish within the
            Department the position of Assistant Secretary of Agriculture
            for Civil Rights, and delegate duties to the Assistant
            Secretary, under section 218.''.

    SEC. 10705. OPERATION OF GRADUATE SCHOOL OF DEPARTMENT OF AGRICULTURE.

        (a) Audits of Records.--Section 921 of the Federal Agriculture
    Improvement and Reform Act of 1996 (7 U.S.C. 2279b) is amended by adding
    at the end the following:
        ``(k) Audits of Records.--The financial records of the Graduate
    School (including records relating to contracts or agreements entered
    into under subsection (c)) shall be made available to the Comptroller
    General for purposes of conducting an audit.''.

    [[Page 116 STAT. 519]]

        (b) Conforming Repeal.--Section 1669 of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (7 U.S.C. 5922) is repealed.
        (c) <<NOTE: 7 USC 2279b note.>>  Effective Date.--The amendments
    made by this section take effect on October 1, 2002.

    SEC. 10706. <<NOTE: 7 USC 8002.>>  IMPLEMENTATION FUNDING AND
                INFORMATION MANAGEMENT.

        (a) Additional Funds for Administrative Costs.--
                (1) In general.--The Secretary of Agriculture, acting
            through the Farm Service Agency, may use not more than
            $55,000,000 of funds of the Commodity Credit Corporation to
            cover administrative costs associated with the implementation of
            title I and the amendments made by that title.
                (2) Availability.--The funds referred to in paragraph (1)
            shall remain available to the Secretary until expended.
                (3) Set-aside.--Of the amount specified in paragraph (1),
            the Secretary shall use not less than $5,000,000, but not more
            than $8,000,000, to carry out subsection (b).

        (b) Information Management.--
                (1) Development of system.--The Secretary of Agriculture
            shall develop a comprehensive information management system,
            using appropriate technologies, to be used in implementing the
            programs administered by the Federal Crop Insurance Corporation
            and the Farm Service Agency.
                (2) Elements.--The information management system developed
            under this subsection shall be designed to--
                        (A) improve access by agricultural producers to
                    programs described in paragraph (1);
                        (B) improve and protect the integrity of the
                    information collected;
                        (C) meet the needs of the agencies that require the
                    data in the administration of their programs;
                        (D) improve the timeliness of the collection of the
                    information;
                        (E) contribute to the elimination of duplication of
                    information collection;
                        (F) lower the overall cost to the Department of
                    Agriculture for information collection; and
                        (G) achieve such other goals as the Secretary
                    considers appropriate.
                (3) Reconciliation of current information management.--The
            Secretary shall ensure that all current information of the
            Federal Crop Insurance Corporation and the Farm Service Agency
            is combined, reconciled, redefined, and reformatted in such a
            manner so that the agencies can use the common information
            management system developed under this subsection.
                (4) <<NOTE: Contracts.>>  Assistance for development of
            system.--The Secretary shall enter into an agreement or contract
            with a non-Federal entity to assist the Secretary in the
            development of the information management system. The Secretary
            shall give preference in entering into an agreement or contract
            to entities that have--
                        (A) prior experience with the information and
                    management systems of the Federal Crop Insurance
                    Corporation; and

    [[Page 116 STAT. 520]]

                        (B) collaborated with the Corporation in the
                    development of the identification procedures required by
                    section 515(f) of the Federal Crop Insurance Act (7
                    U.S.C. 1515(f)).
                (5) Use.--The information collected using the information
            management system developed under this subsection may be made
            available to--
                        (A) any Federal agency that requires the information
                    to carry out the functions of the agency; and
                        (B) any approved insurance provider, as defined in
                    section 502(b) of the Federal Crop Insurance Act (7
                    U.S.C. 1502(b)), with respect to producers insured by
                    the approved insurance provider.
                (6) Relation to other activities.--This subsection shall not
            interfere with, or delay, existing agreements or requests for
            proposals of the Federal Crop Insurance Corporation or the Farm
            Service Agency regarding the information management activities
            known as data mining or data warehousing.

        (c) Authorization of Appropriations.--In addition to amounts made
    available under subsection (a)(3), there are authorized to be
    appropriated such sums as are necessary to carry out subsection (b) for
    each of fiscal years 2003 through 2008.

    SEC. 10707. OUTREACH AND ASSISTANCE FOR SOCIALLY DISADVANTAGED FARMERS
                AND RANCHERS.

        (a) Definitions.--Section 2501(e) of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (7 U.S.C. 2279(e)) is amended by
    adding at the end the following:
                ``(4) Department.--The term `Department' means the
            Department of Agriculture.
                ``(5) Eligible entity.--The term `eligible entity' means any
            of the following:
                        ``(A) 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 subsection (a);
                          and
                              ``(iii) does not engage in activities
                          prohibited under section 501(c)(3) of the Internal
                          Revenue Code of 1986.
                        ``(B) An 1890 institution or 1994 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.
                        ``(C) An Indian tribal community college or an
                    Alaska Native cooperative college.
                        ``(D) An 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)).
                        ``(E) 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

    [[Page 116 STAT. 521]]

                    related services to socially disadvantaged farmers and
                    ranchers in a region.
                        ``(F) 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.
                        ``(G) An organization or institution that received
                    funding under subsection (a) before January 1, 1996, but
                    only with respect to projects that the Secretary
                    considers are similar to projects previously carried out
                    by the organization or institution under such
                    subsection.
                ``(6) Secretary.--The term `Secretary' means the Secretary
            of Agriculture.''.

        (b) Outreach and Assistance.--Section 2501 of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (7 U.S.C. 2279) is amended by
    striking subsection (a) and inserting the following:
        ``(a) Outreach and Assistance.--
                ``(1) Program.--The Secretary of Agriculture 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.
                ``(2) Requirements.--The outreach and technical assistance
            program under paragraph (1) 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.
                ``(3) 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.
                        ``(C) Other projects.--Notwithstanding paragraph
                    (1), the Secretary may make grants to, and enter into
                    contracts and other agreements with, an organization or
                    institution that received funding under this section
                    before January 1, 1996, to carry out a project that is
                    similar to a project for which the organization or
                    institution received such funding.
                ``(4) 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 2007.

    [[Page 116 STAT. 522]]

                        ``(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
                    subsection 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.''.

        (c) Conforming Amendments.--Section 2501 of the Food, Agriculture,
    Conservation, and Trade Act of 1990 (7 U.S.C. 2279) is amended--
                (1) in subsection (d)(1), by striking ``of Agriculture''
            after ``Department''; and
                (2) in subsection (g)(1), by striking ``of Agriculture''
            after ``Department''.

    SEC. 10708. TRANSPARENCY AND ACCOUNTABILITY FOR SOCIALLY DISADVANTAGED
                FARMERS AND RANCHERS; PUBLIC DISCLOSURE REQUIREMENTS FOR
                COUNTY COMMITTEE ELECTIONS.

        (a) Transparency and Accountability for Socially Disadvantaged
    Farmers and Ranchers.--The Food, Agriculture, Conservation, and Trade
    Act of 1990 is amended by inserting after section 2501 (7 U.S.C. 2279)
    the following:

    ``SEC. 2501A. <<NOTE: 7 USC 2279-1.>>  TRANSPARENCY AND ACCOUNTABILITY
                FOR SOCIALLY DISADVANTAGED FARMERS AND RANCHERS.

        ``(a) Purpose.--The purpose of this section is to ensure compilation
    and public disclosure of data to assess and hold the Department of
    Agriculture accountable for the nondiscriminatory participation of
    socially disadvantaged farmers and ranchers in programs of the
    Department.
        ``(b) Definition of Socially Disadvantaged Farmer or Rancher.--In
    this section, the term `socially disadvantaged farmer or rancher' has
    the meaning given the term in section 355(e) of the Consolidated Farm
    and Rural Development Act (7 U.S.C. 2003(e)).
        ``(c) Compilation of Program Participation Data.--
                ``(1) Annual requirement.--For each county and State in the
            United States, the Secretary shall compute annually the
            participation rate of socially disadvantaged farmers and
            ranchers as a percentage of the total participation of all
            farmers and ranchers for each program of the Department of
            Agriculture established for farmers or ranchers.
                ``(2) Reporting participation.--In reporting the rates of
            participation under paragraph (1), the Secretary shall report
            the participation rate of socially disadvantaged farmers and
            ranchers according to race, ethnicity, and gender.''.

        (b) Public Disclosure Requirements for County Committee Elections.--
    Section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16
    U.S.C. 590h(b)(5)) is amended by striking subparagraph (B) and inserting
    the following:
                        ``(B) Establishment and elections for county, area,
                    or local committees.--
                              ``(i) Establishment.--
                                        ``(I) In general.--In each county or
                                    area in which activities are carried out
                                    under this section, the Secretary shall
                                    establish a county or area committee.

    [[Page 116 STAT. 523]]

                                        ``(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.

    [[Page 116 STAT. 524]]

                                        ``(V) <<NOTE: Deadline.>>  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) <<NOTE: Deadline.>>  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 Farm Security and Rural Investment
                                    Act of 2002 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 1
                                            additional voting member to a
                                            county, area, or local committee
                                            or through other methods.

    [[Page 116 STAT. 525]]

                              ``(iv) Term of office.--The term of office for
                          a member of a county, area, or local committee
                          shall not exceed 3 years.
                              ``(v) Public availability and report to
                          congress.--
                                        ``(I) <<NOTE: Internet.>>  Public
                                    disclosure.--The Secretary shall
                                    maintain and make readily available to
                                    the public, via website and otherwise in
                                    electronic and paper form, all data
                                    required to be collected and computed
                                    under section 2501A(c) of the Food,
                                    Agriculture, Conservation, and Trade Act
                                    of 1990 and clause (iii)(V) collected
                                    annually since the most recent Census of
                                    Agriculture.
                                        ``(II) Report to congress.--After
                                    each Census of Agriculture, the
                                    Secretary shall report to Congress the
                                    rate of loss or gain in participation by
                                    each socially disadvantaged group, by
                                    race, ethnicity, and gender, since the
                                    previous Census.''.

                         Subtitle I--General Provisions

    SEC. 10801. COTTON CLASSIFICATION SERVICES.

        (a) Extension of Authority to Provide Services.--The first sentence
    of section 3a of the Act of March 3, 1927 (commonly known as the
    ``Cotton Statistics and Estimates Act''; 7 U.S.C. 473a), is amended by
    striking ``2002'' and inserting ``2007''.
        (b) Repeal of Obsolete Effective Date Provisions.--
                (1) 1984 amendment.--The first section of Public Law 98-403
            (98 Stat. 1479) <<NOTE: 7 USC 473a note.>> is amended by
            striking ``, effective for the period beginning October 1, 1984,
            and ending September 30, 1988,''.
                (2) 1987 amendments.--Section 2 of the Uniform Cotton
            Classing Fees Act of 1987 (Public Law 100-108; 101 Stat.
            728) <<NOTE: 7 USC 473a note.>> is amended by striking
            ``Effective for the period beginning on the date of enactment of
            this Act and ending September 30, 1992, section'' and inserting
            ``Section''.
                (3) 1991 amendments.--Section 120 of the Food, Agriculture,
            Conservation, and Trade Act Amendments of 1991 (Public Law 102-
            237; 105 Stat. 1842) <<NOTE: 7 USC 473a note.>> is amended by
            striking subsection (e).

    SEC. 10802. <<NOTE: 7 USC 5921a.>>  PROGRAM OF PUBLIC EDUCATION
                REGARDING USE OF BIOTECHNOLOGY IN PRODUCING FOOD FOR HUMAN
                CONSUMPTION.

        (a) <<NOTE: Deadline.>>  Public Information Campaign.--Not later
    than 1 year after the date of enactment of this Act, the Secretary of
    Agriculture shall develop and implement a program to communicate with
    the public regarding the use of biotechnology in producing food for
    human consumption. The information provided under the program shall
    include the following:
                (1) Science-based evidence on the safety of foods produced
            with biotechnology.
                (2) Scientific data on the human outcomes of the use of
            biotechnology to produce food for human consumption.

    [[Page 116 STAT. 526]]

        (b) 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 2007.

    SEC. 10803. CHINO DAIRY PRESERVE PROJECT.

        Notwithstanding any other provision of law, the Secretary of
    Agriculture, acting through the Natural Resources Conservation Service,
    may provide financial and technical assistance to the Chino Dairy
    Preserve Project, San Bernadino County, California.

    SEC. 10804. GRAZINGLANDS RESEARCH LABORATORY.

        Notwithstanding any other provision of law, before December 31,
    2007, the Federal land and facilities at El Reno, Oklahoma, currently
    administered by the Secretary of Agriculture as the Grazinglands
    Research Laboratory shall not, without specific authorization by
    Congress--
                (1) be declared to be excess or surplus under the Federal
            Property and Administrative Services Act of 1949 (40 U.S.C. 471
            et seq.); or
                (2) be conveyed or otherwise transferred in whole or in
            part.

    SEC. 10805. FOOD AND AGRICULTURAL POLICY RESEARCH INSTITUTE.

        (a) Authority.--The Secretary of Agriculture may award grants to the
    Food and Agricultural Policy Research Institute for the purpose of
    funding prospective, independent research on the effects of alternative
    domestic, foreign, and trade policies, on the agricultural sector,
    including research on the effects of those policies on--
                (1) commodity prices for--
                        (A) feed; and
                        (B) food grains, oilseeds, cotton, livestock, and
                    products thereof;
                (2) supply and demand conditions for similar products;
                (3) costs to the Federal Government;
                (4) farm income;
                (5) food costs;
                (6) the volume and value of trade in agricultural
            commodities; and
                (7) exporter and importer supply, demand, and trade.

        (b) Authorization of Appropriations.--There is authorized to be
    appropriated to carry out this section $6,000,000 for each of fiscal
    years 2003 through 2007.

    SEC. 10806. <<NOTE: 21 USC 321d.>>  MARKET NAMES FOR CATFISH AND
                GINSENG.

        (a) Catfish Labeling.--
                (1) In general.--Notwithstanding any other provision of law,
            for purposes of the Federal Food, Drug, and Cosmetic Act (21
            U.S.C. 301 et seq.)--
                        (A) the term ``catfish'' may only be considered to
                    be a common or usual name (or part thereof) for fish
                    classified within the family Ictaluridae; and
                        (B) only labeling or advertising for fish classified
                    within that family may include the term ``catfish''.
                (2) Amendment.--Section 403 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 343) is amended by adding at the end the
            following:

    [[Page 116 STAT. 527]]

        ``(t) If it purports to be or is represented as catfish, unless it
    is fish classified within the family Ictaluridae.''.
        (b) Ginseng Labeling.--
                (1) In general.--Notwithstanding any other provision of law,
            for purposes of the Federal Food, Drug, and Cosmetic Act (21
            U.S.C. 301 et seq.)--
                        (A) the term ``ginseng'' may only be considered to
                    be a common or usual name (or part thereof) for any herb
                    or herbal ingredient derived from a plant classified
                    within the genus Panax; and
                        (B) only labeling or advertising for herbs or herbal
                    ingredients classified within that genus may include the
                    term ``ginseng''.
                (2) Amendment.--Section 403 of the Federal Food, Drug, and
            Cosmetic Act (21 U.S.C. 343) (as amended by subsection (a)(2))
            is amended by adding at the end the following:

        ``(u) If it purports to be or is represented as ginseng, unless it
    is an herb or herbal ingredient derived from a plant classified within
    the genus Panax.''.

    SEC. 10807. <<NOTE: 21 USC 341 note.>>  FOOD SAFETY COMMISSION.

        (a) Establishment.--
                (1) In general.--There is established a commission to be
            known as the ``Food Safety Commission'' (referred to in this
            section as the ``Commission'').
                (2) <<NOTE: President.>>  Membership.--
                        (A) Composition.--The Commission shall be composed
                    of 15 members (including a Chairperson, appointed by the
                    President.
                        (B) Eligibility.--
                              (i) In general.--Members of the Commission--
                                        (I) shall have specialized training
                                    or significant experience in matters
                                    under the jurisdiction of the
                                    Commission; and
                                        (II) shall represent, at a minimum--
                                                (aa) consumers;
                                                (bb) food scientists;
                                                (cc) the food industry; and
                                                (dd) health professionals.
                              (ii) Federal employees.--Not more than 3
                          members of the Commission may be Federal
                          employees.
                        (C) Date of appointments.--The appointment of the
                    members of the Commission shall be made as soon as
                    practicable after the date on which funds authorized to
                    be appropriated under subsection (e)(1) are made
                    available.
                        (D) Vacancies.--A vacancy on the Commission--
                              (i) shall not affect the powers of the
                          Commission; and
                              (ii) shall be filled--
                                        (I) not later than 60 days after the
                                    date on which the vacancy occurs; and
                                        (II) in the same manner as the
                                    original appointment was made.
                (3) <<NOTE: Deadline.>>  Meetings.--
                        (A) Initial meeting.--The initial meeting of the
                    Commission shall be conducted not later than 30 days

    [[Page 116 STAT. 528]]

                    after the date of appointment of the final member of the
                    Commission.
                        (B) Other meetings.--The Commission shall meet at
                    the call of the Chairperson.
                (4) Quorum; standing rules.--
                        (A) Quorum.--A majority of the members of the
                    Commission shall constitute a quorum to conduct
                    business.
                        (B) Standing rules.--At the first meeting of the
                    Commission, the Commission shall adopt standing rules of
                    the Commission to guide the conduct of business and
                    decisionmaking of the Commission.

        (b) Duties.--
                (1) Recommendations.--The Commission shall make specific
            recommendations to enhance the food safety system of the United
            States, including a description of how each recommendation would
            improve food safety.
                (2) Components.--Recommendations made by the Commission
            under paragraph (1) shall address all food available
            commercially in the United States.
                (3) <<NOTE: Deadline.>>  Report.--Not later than 1 year
            after the date on which the Commission first meets, the
            Commission shall submit to the President and Congress--
                        (A) the findings, conclusions, and recommendations
                    of the Commission, including a description of how each
                    recommendation would improve food safety;
                        (B) a summary of any other material used by the
                    Commission in the preparation of the report under this
                    paragraph; and
                        (C) if requested by 1 or more members of the
                    Commission, a statement of the minority views of the
                    Commission.

        (c) Powers of the Commission.--
                (1) Hearings.--The Commission may, for the purpose of
            carrying out this section, hold such hearings, meet and act at
            such times and places, take such testimony, and receive such
            evidence as the Commission considers advisable.
                (2) Information from federal agencies.--
                        (A) In general.--The Commission may secure directly,
                    from any Federal agency, such information as the
                    Commission considers necessary to carry out this
                    section.
                        (B) Provision of information.--
                              (i) In general.--Subject to subparagraph (C),
                          on the request of the Commission, the head of a
                          Federal agency described in subparagraph (A) may
                          furnish information requested by the Commission to
                          the Commission.
                              (ii) Administration.--The furnishing of
                          information by a Federal agency to the Commission
                          shall not be considered a waiver of any exemption
                          available to the agency under section 552 of title
                          5, United States Code.
                        (C) Information to be kept confidential.--
                              (i) In general.--For purposes of section 1905
                          of title 18, United States Code--
                                        (I) the Commission shall be
                                    considered an agency of the Federal
                                    Government; and
                                        (II) any individual employed by an
                                    individual, entity, or organization that
                                    is a party to a contract

    [[Page 116 STAT. 529]]

                                    with the Commission under this section
                                    shall be considered an employee of the
                                    Commission.
                              (ii) Prohibition on disclosure.--Information
                          obtained by the Commission, other than information
                          that is available to the public, shall not be
                          disclosed to any person in any manner except to an
                          employee of the Commission as described in clause
                          (i), for the purpose of receiving, reviewing, or
                          processing the information.

        (d) Commission Personnel Matters.--
                (1) Members.--
                        (A) Compensation.--A member of the Commission shall
                    serve without compensation for the services of the
                    member on the Commission.
                        (B) Travel expenses.--A 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.--
                        (A) In general.--The Chairperson of the Commission
                    may, without regard to the civil service laws (including
                    regulations), appoint and terminate the appointment of
                    an executive director and such other additional
                    personnel as are necessary to enable the Commission to
                    perform the duties of the Commission.
                        (B) Confirmation of executive director.--The
                    employment of an executive director shall be subject to
                    confirmation by the Commission.
                        (C) Compensation.--
                              (i) In general.--Except as provided in clause
                          (ii), the Chairperson of the Commission may fix
                          the compensation of the executive director and
                          other personnel without regard to the provisions
                          of chapter 51 and subchapter III of chapter 53 of
                          title 5, United States Code, relating to
                          classification of positions and General Schedule
                          pay rates.
                              (ii) Maximum rate of pay.--The rate of pay for
                          the executive director and other personnel shall
                          not exceed the rate payable for level II of the
                          Executive Schedule under section 5316 of title 5,
                          United States Code.
                (3) Detail of federal government employees.--
                        (A) In general.--An employee of the Federal
                    Government may be detailed to the Commission, without
                    reimbursement, for such period of time as is permitted
                    by law.
                        (B) Civil service status.--The detail of the
                    employee shall be without interruption or loss of civil
                    service status or privilege.
                (4) Procurement of temporary and intermittent services.--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

    [[Page 116 STAT. 530]]

            of basic pay prescribed for level II of the Executive Schedule
            under section 5316 of that title.

        (e) Authorization of Appropriations.--
                (1) In general.--There is authorized to be appropriated such
            sums as are necessary to carry out this section.
                (2) Limitation.--No payment may be made under subsection (d)
            except to the extent provided for in advance in an
            appropriations Act.

        (f) Termination.--The Commission shall terminate on the date that is
    60 days after the date on which the Commission submits the
    recommendations and report under subsection (b)(3).

    SEC. 10808. <<NOTE: 21 USC 679b.>>  PASTEURIZATION.

        (a) Pasteurization of Meat and Poultry.--
                (1) <<NOTE: Effective date. Deadline.>>  In general.--
            Effective beginning not later than 30 days after the date of
            enactment of this Act, the Secretary of Agriculture shall
            conduct an education program regarding the availability and
            safety of processes and treatments that eliminate or
            substantially reduce the level of pathogens on meat, meat food
            products, poultry, and poultry products.
                (2) Authorization of appropriations.--There is authorized to
            be appropriated such sums as are necessary to carry out this
            subsection.

        (b) Pasteurization of Food As Pasteurized.--Section 403(h) of the
    Federal Food, Drug, and Cosmetic Act (21 U.S.C. 343(h)) is amended--
                (1) by striking ``or'' at the end of paragraph (1);
                (2) by striking the period at the end of paragraph (2) and
            inserting ``; or''; and
                (3) by adding at the end the following:
                ``(3) a food that is pasteurized unless--
                        ``(A) such food has been subjected to a safe process
                    or treatment that is prescribed as pasteurization for
                    such food in a regulation promulgated under this Act; or
                        ``(B)(i) such food has been subjected to a safe
                    process or treatment that--
                              ``(I) is reasonably certain to achieve
                          destruction or elimination in the food of the most
                          resistant microorganisms of public health
                          significance that are likely to occur in the food;
                              ``(II) is at least as protective of the public
                          health as a process or treatment described in
                          subparagraph (A);
                              ``(III) is effective for a period that is at
                          least as long as the shelf life of the food when
                          stored under normal and moderate abuse conditions;
                          and
                              ``(IV) is the subject of a notification to the
                          Secretary, including effectiveness data regarding
                          the process or treatment; and
                        ``(ii) at least 120 days have passed after the date
                    of receipt of such notification by the Secretary without
                    the Secretary making a determination that the process or
                    treatment involved has not been shown to meet the
                    requirements of subclauses (I) through (III) of clause
                    (i).

    [[Page 116 STAT. 531]]

    For purposes of paragraph (3), a determination by the Secretary that a
    process or treatment has not been shown to meet the requirements of
    subclauses (I) through (III) of subparagraph (B)(i) shall constitute
    final agency action under such subclauses.''.

    SEC. 10809. <<NOTE: 21 USC 343 note.>>  RULEMAKING ON LABELING OF
                IRRADIATED FOOD; CERTAIN PETITIONS.

        The Secretary of Health and Human Services (referred to in this
    section as the ``Secretary'') shall publish a proposed rule and, with
    due consideration to public comment, a final rule to revise, as
    appropriate, the current regulation governing the labeling of foods that
    have been treated to reduce pest infestation or pathogens by treatment
    by irradiation using radioactive isotope, electronic beam, or x-
    ray. <<NOTE: Deadline.>>  Pending promulgation of the final rule
    required by this subsection, any person may petition the Secretary for
    approval of labeling, which is not false or misleading in any material
    respect, of a food which has been treated by irradiation using
    radioactive isotope, electronic beam, or x-ray. The Secretary shall
    approve or deny such a petition within 180 days of receipt of the
    petition, or the petition shall be deemed denied, except to the extent
    additional agency review is mutually agreed upon by the Secretary and
    the petitioner. Any denial of a petition under this subsection shall
    constitute final agency action subject to judicial review by the United
    States Court of Appeals for the District of Columbia Circuit. Any
    labeling approved through the foregoing petition process shall be
    subject to the provisions of the final rule referred to in the first
    sentence of the subparagraph on the effective date of such final rule.

    SEC. 10810. PENALTIES FOR VIOLATIONS OF PLANT PROTECTION ACT.

        Section 424 of the Plant Protection Act (7 U.S.C. 7734) is amended
    by striking subsection (a) and inserting the following:
        ``(a) Criminal Penalties.--
                ``(1) Offenses.--
                        ``(A) In general.--A person that knowingly violates
                    this title, or knowingly forges, counterfeits, or,
                    without authority from the Secretary, uses, alters,
                    defaces, or destroys any certificate, permit, or other
                    document provided for in this title shall be fined under
                    title 18, United States Code, imprisoned not more than 1
                    year, or both.
                        ``(B) Movement.--A person that knowingly imports,
                    enters, exports, or moves any plant, plant product,
                    biological control organism, plant pest, noxious weed,
                    or article, for distribution or sale, in violation of
                    this title, shall be fined under title 18, United States
                    Code, imprisoned not more than 5 years, or both.
                ``(2) Multiple violations.--On the second and any subsequent
            conviction of a person of a violation of this title under
            paragraph (1), the person shall be fined under title 18, United
            States Code, imprisoned not more than 10 years, or both.''.

    SEC. 10811. <<NOTE: 7 USC 8307 note.>>  PRECLEARANCE QUARANTINE
                INSPECTIONS.

        (a) Preclearance Inspections Required.--The Secretary of
    Agriculture, acting through the Administrator of the Animal and Plant
    Health Inspection Service, shall conduct preclearance quarantine
    inspections of persons, baggage, cargo, and any other articles destined
    for movement from the State of Hawaii to any of the following--

    [[Page 116 STAT. 532]]

                (1) The continental United States.
                (2) Guam.
                (3) Puerto Rico.
                (4) The United States Virgin Islands.

        (b) Inspection Locations.--The preclearance quarantine inspections
    required by subsection (a) shall be conducted at all direct departure
    and interline airports in the State of Hawaii.
        (c) Limitation.--The Secretary shall not implement this section
    unless appropriations for necessary expenses of the Animal and Plant
    Health Inspection Service for inspection, quarantine, and regulatory
    activities are increased by an amount not less than $3,000,000 in an Act
    making appropriations for fiscal year 2003.

    SEC. 10812. CONNECTICUT RIVER ATLANTIC SALMON COMMISSION.

        Section 3(2) of Public Law 98-138 (Public Law 98-138; 97 Stat. 870)
    is amended by striking ``twenty'' and inserting ``40''.

    SEC. 10813. PINE POINT SCHOOL.

        Section 802(b)(2) of the No Child Left Behind Act of 2001 (Public
    Law 107-110) <<NOTE: 115 Stat. 1949.>>  is amended by striking ``2002''
    each place it appears and inserting ``2000''.

    SEC. 10814. 7-MONTH EXTENSION OF CHAPTER 12 OF TITLE 11 OF THE UNITED
                STATES CODE.

        (a) Amendments.--Section 149 of title I of division C of Public Law
    105-277 <<NOTE: 11 USC 1201-1208, 1221-1231, 1201 note.>>  is amended--
                (1) by striking ``June 1, 2002'' each place it appears and
            inserting ``January 1, 2003''; and
                (2) in subsection (a)--
                        (A) by striking ``September 30, 2001'' and inserting
                    ``May 31, 2002''; and
                        (B) by striking ``October 1, 2001'' and inserting
                    ``June 1, 2002''.

        (b) <<NOTE: 11 USC 1201 note.>>  Effective Date.--The amendments
    made by subsection (a) shall take effect on June 1, 2002.

    SEC. 10815. <<NOTE: 7 USC 1967.>>  PRACTICES INVOLVING NONAMBULATORY
                LIVESTOCK.

        (a) Report.--The Secretary of Agriculture shall investigate and
    submit to Congress a report on--
                (1) the scope of nonambulatory livestock;
                (2) the causes that render livestock nonambulatory;
                (3) the humane treatment of nonambulatory livestock; and
                (4) the extent to which nonambulatory livestock may present
            handling and disposition problems for stockyards, market
            agencies, and dealers.

        (b) Authority.--Based on the findings of the report, if the
    Secretary determines it necessary, the Secretary shall promulgate
    regulations to provide for the humane treatment, handling, and
    disposition of nonambulatory livestock by stockyards, market agencies,
    and dealers.
        (c) <<NOTE: Applicability.>>  Administration and Enforcement.--For
    the purpose of administering and enforcing any regulations promulgated
    under subsection (b), the authorities provided under sections 10414 and
    10415 shall apply to the regulations in a similar manner as those
    sections apply to the Animal Health Protection Act. Any person that
    violates regulations promulgated under subsection (b) shall be subject
    to penalties provided in section 10414.

    [[Page 116 STAT. 533]]

    SEC. 10816. COUNTRY OF ORIGIN LABELING.

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

                    ``Subtitle D--Country of Origin Labeling

    ``SEC. 281. <<NOTE: 7 USC 1638.>>  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) wild fish;
                              ``(v) a perishable agricultural commodity; and
                              ``(vi) peanuts.
                        ``(B) Exclusions.--The term `covered commodity' does
                    not include an item described in subparagraph (A) if the
                    item is an ingredient in a processed food item.
                ``(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 of 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.
                ``(9) Wild fish.--
                        ``(A) In general.--The term `wild fish' means
                    naturally-born or hatchery-raised fish and shellfish
                    harvested in the wild.
                        ``(B) Inclusions.--The term `wild fish' includes a
                    fillet, steak, nugget, and any other flesh from wild
                    fish or shellfish.
                        ``(C) Exclusions.--The term `wild fish' excludes
                    net-pen aquacultural or other farm-raised fish.

    ``SEC. 282. <<NOTE: 7 USC 1638a.>>  NOTICE OF COUNTRY OF ORIGIN.

        ``(a) In General.--

    [[Page 116 STAT. 534]]

                ``(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, is exclusively from an
                    animal that is exclusively born, raised, and slaughtered
                    in the United States (including from an animal
                    exclusively born and raised in Alaska or Hawaii and
                    transported for a period not to exceed 60 days through
                    Canada to the United States and slaughtered in the
                    United States);
                        ``(B) in the case of lamb and pork, is exclusively
                    from an animal that is exclusively born, raised, and
                    slaughtered in the United States;
                        ``(C) in the case of farm-raised fish, is hatched,
                    raised, harvested, and processed in the United States;
                        ``(D) in the case of wild fish, is--
                              ``(i) harvested in waters of the United
                          States, a territory of the United States, or a
                          State; and
                              ``(ii) processed in the United States, a
                          territory of the United States, or a State,
                          including the waters thereof; and
                        ``(E) in the case of a perishable agricultural
                    commodity or peanuts, is exclusively produced in the
                    United States.
                ``(3) Wild fish and farm-raised fish.--The notice of country
            of origin for wild fish and farm-raised fish shall distinguish
            between wild fish and farm-raised fish.

        ``(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 verify compliance with this
    subtitle (including the regulations promulgated under section 284(b)).
        ``(e) Information.--Any person engaged in the business of supplying
    a covered commodity to a retailer shall provide information

    [[Page 116 STAT. 535]]

    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. 283. <<NOTE: 7 USC 1638b.>>  ENFORCEMENT.

        ``(a) <<NOTE: Applicability.>>  In General.--Except as provided in
    subsections (b) and (c), section 253 shall apply to a violation of this
    subtitle.

        ``(b) Warnings.--If the Secretary determines that a retailer is in
    violation of section 282, 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 282.

        ``(c) Fines.--If, on completion of the 30-day period described in
    subsection (b)(2), the Secretary determines that the retailer has
    willfully violated section 282, 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 of not more
    than $10,000 for each violation.

    ``SEC. 284. <<NOTE: Deadlines. 7 USC 1638c.>>  REGULATIONS.

        ``(a) Guidelines.--Not later than September 30, 2002, the Secretary
    shall issue guidelines for the voluntary country of origin labeling of
    covered commodities based on the requirements of section 282.
        ``(b) Regulations.--Not later than September 30, 2004, the Secretary
    shall promulgate such regulations as are necessary to implement this
    subtitle.
        ``(c) Partnerships With States.--In promulgating the regulations,
    the Secretary shall, to the maximum extent practicable, enter into
    partnerships with States with enforcement infrastructure to assist in
    the administration of this subtitle.

    ``SEC. 285. <<NOTE: Effective date. 7 USC 1638d.>>  APPLICABILITY.

        ``This subtitle shall apply to the retail sale of a covered
    commodity beginning September 30, 2004.''.

    [[Page 116 STAT. 536]]

    Subtitle J-- <<NOTE: Deadlines.>> Miscellaneous Studies and Reports

    SEC. 10901. <<NOTE: 7 USC 612c note.>>  REPORT ON SPECIALTY CROP
                PURCHASES.

        Not later than 1 year after the date of enactment of this Act, the
    Secretary of Agriculture shall submit to the Committee on Agriculture of
    the House of Representatives and the Committee on Agriculture,
    Nutrition, and Forestry of the Senate a report on the quantity and type
    of--
                (1) fruits, vegetables, and other specialty food crops that
            are purchased under section 10603; and
                (2) other commodities that are purchased under section 32 of
            the Act of August 24, 1935 (7 U.S.C. 612c).

    SEC. 10902. REPORT ON POUCHED AND CANNED SALMON.

        (a) In General.--Not later than 180 days after the date of enactment
    of this Act, the Secretary of Agriculture shall submit to Congress a
    report on efforts to expand the promotion, marketing, and purchasing of
    pouched and canned salmon harvested and processed in the United States
    under food and nutrition programs administered by the Secretary.
        (b) Components.--The report under subsection (a) shall include--
                (1) an analysis of pouched and canned salmon inventories in
            the United States that, as of the date on which the report is
            submitted, are available for purchase;
                (2) an analysis of the demand for pouched and canned salmon
            and value-added products (such as salmon ``nuggets'') by--
                        (A) partners of the Department of Agriculture
                    (including other appropriate Federal agencies); and
                        (B) consumers; and
                (3) an analysis of impediments to additional purchases of
            pouched and canned salmon, including--
                        (A) any marketing issues; and
                        (B) recommendations for methods to resolve those
                    impediments.

    SEC. 10903. STUDY ON UPDATING YIELDS.

        (a) In General.--The Comptroller General shall conduct a study and
    make findings and recommendations with respect to determining how
    producer income would be affected by updating yield bases, including--
                (1) whether crop yields have increased over the past 20 crop
            years for program crops and oilseeds;
                (2) whether program payments would be disbursed differently
            under title I if yield bases were updated further;
                (3) what impact the target prices under title I would have
            on producer income if the yield bases of the target prices were
            further updated; and
                (4) what impact lower target prices with updated yield bases
            would have on producer income, as compared with the impact of
            target prices under title I.

        (b) Report.--Not later than 180 days after the date of enactment of
    this Act, the Comptroller General shall submit to Congress

    [[Page 116 STAT. 537]]

    a report on the study, findings, and recommendations required by
    subsection (a).

    SEC. 10904. REPORT ON EFFECT OF FARM PROGRAM PAYMENTS.

        (a) In General.--The Secretary of Agriculture shall conduct a review
    of the effects that payments under production flexibility contracts and
    market loss assistance payments have had, and that direct payments and
    counter-cyclical payments are likely to have, on the economic viability
    of producers and the farming infrastructure, particularly in areas where
    climate, soil types, and other agronomic conditions severely limit the
    covered crops that producers can choose to successfully and profitably
    produce.
        (b) Case Study Related to Rice Production.--The review shall include
    a case study of the effects that the payments described in subsection
    (a), and the forecast effects of increasing these or other fixed
    payments, are likely to have on rice producers (including tenant rice
    producers), the rice milling industry, and the economies of rice farming
    areas in Texas, where harvested rice acreage has fallen from 320,000
    acres in 1995 to only 211,000 acres in 2001.
        (c) Report and Recommendations.--
                (1) Report.--Not later than 90 days after the date of the
            enactment of this Act, the Secretary shall submit to the
            Committee on Agriculture of the House of Representatives and the
            Committee on Agriculture, Nutrition, and Forestry of the Senate
            a report describing the information collected for the review and
            the case study and any findings made on the basis of the
            information.
                (2) Recommendations.--The report shall include
            recommendations for minimizing the adverse effects on producers,
            with a special focus on--
                        (A) producers who are tenants;
                        (B) the agricultural economies in farming areas
                    generally;
                        (C) particular areas described in subsection (a);
                    and
                        (D) on the area that is the subject of the case
                    study conducted under subsection (b).

    SEC. 10905. <<NOTE: Oregon.>>  CHILOQUIN DAM FISH PASSAGE FEASIBILITY
                STUDY.

        (a) In General.--The Secretary of the Interior, in collaboration
    with all interested parties (including the Modoc Point Irrigation
    District, the Klamath Tribes, and the Oregon Department of Fish and
    Wildlife), shall conduct a study of the feasibility of providing
    adequate upstream and downstream passage for fish at the Chiloquin Dam
    on the Sprague River, Oregon.
        (b) Subjects.--The study shall include--
                (1) a review of all alternatives for providing passage
            described in subsection (a), including the removal of the dam;
                (2) the determination of the most appropriate alternative;
                (3) the development of recommendations for implementing that
            alternative; and
                (4) examination of mitigation needed for upstream and
            downstream water users, and for Klamath tribal nonconsumptive
            uses, as a result of the implementation of the alternative.

        (c) Report.--Not later than 1 year after the date of enactment of
    this Act, the Secretary of the Interior shall submit to Congress a
    report that describes the findings, conclusions, and recommendations of
    the study.

    [[Page 116 STAT. 538]]

    SEC. 10906. <<NOTE: 7 USC 2204 note.>>  REPORT ON GEOGRAPHICALLY
                DISADVANTAGED FARMERS AND RANCHERS.

        (a) Definition of Geographically Disadvantaged Farmer or Rancher.--
    In this section, the term ``geographically disadvantaged farmer or
    rancher' means a farmer or rancher in--
                (1) an insular area (as defined in section 1404 of the
            National Agricultural Research, Extension, and Teaching Policy
            Act of 1977 (7 U.S.C. 3103) (as amended by section 7502(a)); or
                (2) a State other than 1 of the 48 contiguous States.

        (b) Report.--Not later than 1 year after the date of enactment of
    this Act, the Secretary of Agriculture shall submit to the Committee on
    Agriculture of the House of Representatives and the Committee on
    Agriculture, Nutrition, and Forestry of the Senate a report that
    describes--
                (1) barriers to efficient and competitive transportation of
            inputs and products by geographically disadvantaged farmers and
            ranchers; and
                (2) means of encouraging and assisting geographically
            disadvantaged farmers and ranchers--
                        (A) to own and operate farms and ranches; and
                        (B) to participate equitably in the full range of
                    agricultural programs offered by the Department of
                    Agriculture.

    SEC. 10907. <<NOTE: 7 USC 3191 note.>>  STUDIES ON AGRICULTURAL RESEARCH
                AND TECHNOLOGY.

        (a) Scientific Studies.--
                (1) In general.--The Secretary of Agriculture may conduct
            scientific studies on--
                        (A) the transmission of spongiform encephalopathy in
                    deer, elk, and moose; and
                        (B) chronic wasting disease (including the risks
                    that chronic wasting disease poses to livestock).
                (2) Report.--The Secretary shall submit to the Committee on
            Agriculture of the House of Representatives and the Committee on
            Agriculture, Nutrition, and Forestry of the Senate a report on
            the results of any scientific studies conducted under paragraph
            (1).

        (b) Vaccines.--
                (1) Vaccine storage study.--The Secretary may--
                        (A) conduct a study to determine the number of doses
                    of livestock disease vaccines that should be available
                    to protect against livestock diseases that could be
                    introduced into the United States; and
                        (B) compare that number with the number of doses of
                    the livestock disease vaccines that are available as of
                    that date.
                (2) Stockpiling of vaccines.--If, after conducting the study
            and comparison described in paragraph (1), the Secretary
            determines that there is an insufficient number of doses of a
            particular vaccine referred to in that paragraph, the Secretary
            may take such actions as are necessary to obtain the required
            additional doses of the vaccine.

    SEC. 10908. <<NOTE: 31 USC 712 note.>>  REPORT ON TOBACCO SETTLEMENT
                AGREEMENT.

        Not later than December 31, 2002, and annually thereafter through
    2006, the Comptroller General shall submit to Congress

    [[Page 116 STAT. 539]]

    a report that describes all programs and activities that States have
    carried out using funds received under all phases of the Master
    Settlement Agreement of 1997.

    SEC. 10909. REPORT ON SALE AND USE OF PESTICIDES FOR AGRICULTURAL USES.

        Not later than 180 days after the date of enactment of this Act, the
    Administrator of the Environmental Protection Agency 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 manner in which the Agency is applying regulations of the Agency
    governing the sale and use of pesticides for agricultural use to
    electronic commerce transactions.

    SEC. 10910. <<NOTE: 7 USC 2204 note.>>  REVIEW OF OPERATION OF
                AGRICULTURAL AND NATURAL RESOURCE PROGRAMS ON TRIBAL TRUST
                LAND.

        (a) Review.--The Secretary of Agriculture (referred to in this
    section as the ``Secretary'') shall conduct a review of the operation of
    agricultural and natural resource programs available to farmers and
    ranchers operating on tribal and trust land, including--
                (1) agricultural commodity, price support, and farm income
            support programs (collectively referred to in this section as
            ``agricultural commodity programs'');
                (2) conservation programs (including financial and technical
            assistance);
                (3) agricultural credit programs;
                (4) rural development programs; and
                (5) forestry programs.

        (b) Criteria for Review.--In carrying out the review under
    subsection (a), the Secretary shall consider--
                (1) the extent to which agricultural commodity programs and
            conservation programs are consistent with tribal goals and
            priorities regarding the sustainable use of agricultural land;
                (2) strategies for increasing tribal participation in
            agricultural commodity programs and conservation programs;
                (3) the educational and training opportunities available to
            Indian tribes and members of Indian tribes in the practical,
            technical, and professional aspects of agriculture and land
            management; and
                (4) the development and management of agricultural land
            under the jurisdiction of Indian tribes in accordance with
            integrated resource management plans that--
                        (A) ensure proper management of the land;
                        (B) produce increased economic returns;
                        (C) promote employment opportunities; and
                        (D) improve the social and economic well-being of
                    Indian tribes and members of Indian tribes.

        (c) Consultation.--In carrying out this section, the Secretary shall
    consult with--
                (1) the Secretary of the Interior;
                (2) local officers and employees of the Department of
            Agriculture; and
                (3) program recipients.

        (d) Report.--Not later than 1 year after the date of enactment of
    this Act, the Secretary shall submit to Congress a report that
    contains--

    [[Page 116 STAT. 540]]

                (1) a description of the results of the review conducted
            under this section;
                (2) recommendations for program improvements; and
                (3) a description of actions that will be taken to carry out
            the improvements.

        Approved May 13, 2002.

    LEGISLATIVE HISTORY--H.R. 2646 (S. 1731):
    ---------------------------------------------------------------------------

    HOUSE REPORTS: Nos. 107-191, Pts. 1 and 2 (both from Comm. on
    Agriculture) and Pt. 3 (Comm. on International Relations) and 107-424
    (Comm. of Conference).
    SENATE REPORTS: No. 107-117 accompanying S. 1731 (Comm. on Agriculture,
    Nutrition, and Forestry).
    CONGRESSIONAL RECORD:
                                                            Vol. 147 (2001):
                                        Oct. 3-5, considered and passed
                                            House.
                                                            Vol. 148 (2002):
                                        Feb. 13, considered and passed
                                            Senate, amended, in lieu of S.
                                            1731.
                                        May 2, House agreed to conference
                                            report.
                                        May 7, 8, Senate considered and
                                            agreed to conference report.
    WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 38 (2002):
                May 13, Presidential remarks.

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