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Placed on Calendar Senate (11/27/2001)

 
[Congressional Bills 107th Congress]
[From the U.S. Government Printing Office]
[S. 1731 Placed on Calendar Senate (PCS)]






                                                       Calendar No. 237
107th CONGRESS
  1st Session
                                S. 1731

  To strengthen the safety net for agricultural producers, to enhance 
   resource conservation and rural development, to provide for farm 
  credit, agricultural research, nutrition, and related programs, to 
   ensure consumers abundant food and fiber, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 27, 2001

Mr. Harkin, from the Committee on Agriculture, Nutrition, and Forestry, 
 reported the following original bill; which was read twice and placed 
                            on the calendar

_______________________________________________________________________

                                 A BILL


 
  To strengthen the safety net for agricultural producers, to enhance 
   resource conservation and rural development, to provide for farm 
  credit, agricultural research, nutrition, and related programs, to 
   ensure consumers abundant food and fiber, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Agriculture, 
Conservation, and Rural Enhancement Act of 2001''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

                      TITLE I--COMMODITY PROGRAMS

Sec. 101. Definitions.
            Subtitle A--Direct and Counter-Cyclical Payments

Sec. 111. Direct and counter-cyclical payments.
Sec. 112. Violations of contracts.
Sec. 113. Planting flexibility.
Subtitle B--Nonrecourse Marketing Assistance Loans and Loan Deficiency 
                                Payments

Sec. 121. Nonrecourse marketing assistance loans and loan deficiency 
                            payments.
Sec. 122. Eligible production.
Sec. 123. Loan rates.
Sec. 124. Term of loans.
Sec. 125. Repayment of loans.
Sec. 126. Loan deficiency payments.
                     Subtitle C--Other Commodities

                            Chapter 1--Dairy

Sec. 131. Milk price support program.
Sec. 132. National dairy program.
Sec. 133. Dairy export incentive and dairy indemnity programs.
Sec. 134. Fluid milk promotion.
Sec. 135. Dairy product mandatory reporting.
Sec. 136. Funding of dairy promotion and research program.
                            Chapter 2--Sugar

Sec. 141. Sugar program.
Sec. 142. Storage facility loans.
Sec. 143. Flexible marketing allotments for sugar.
                           Chapter 3--Peanuts

Sec. 151. Peanut program.
Sec. 152. Termination of marketing quotas for peanuts and compensation 
                            to peanut quota holders.
                       Subtitle D--Administration

Sec. 161. Adjustment authority related to Uruguay Round compliance.
Sec. 162. Suspension of permanent price support authority.
Sec. 163. Commodity purchases.
Sec. 164. Hard white wheat incentive payments.
Sec. 165. Payment limitations.
                         TITLE II--CONSERVATION

                   Subtitle A--Conservation Security

Sec. 201. Conservation security program.
Sec. 202. Funding.
Sec. 203. Partnerships and cooperation.
Sec. 204. Administrative requirements for conservation programs.
Sec. 205. Reform and assessment of conservation programs.
Sec. 206. Conservation security program regulations.
Sec. 207. Conforming amendments.
                     Subtitle B--Program Extensions

Sec. 211. Comprehensive conservation enhancement program.
Sec. 212. Conservation reserve program.
Sec. 213. Wetlands reserve program.
Sec. 214. Environmental quality incentives program.
Sec. 215. Resource conservation and development program.
Sec. 216. Wildlife habitat incentive program.
Sec. 217. Farmland protection program.
Sec. 218. Grassland reserve program.
Sec. 219. State technical committees.
Sec. 220. Use of symbols, slogans, and logos.
                            TITLE III--TRADE

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

Sec. 301. United States policy.
Sec. 302. Provision of agricultural commodities.
Sec. 303. Generation and use of currencies by private voluntary 
                            organizations and cooperatives.
Sec. 304. Levels of assistance.
Sec. 305. Food Aid Consultative Group.
Sec. 306. Maximum level of expenditures.
Sec. 307. Administration.
Sec. 308. Assistance for stockpiling and rapid transportation, 
                            delivery, and distribution of shelf-stable 
                            prepackaged foods.
Sec. 309. Sale procedure.
Sec. 310. Prepositioning.
Sec. 311. Expiration date.
Sec. 312. Micronutrient fortification program.
Sec. 313. Farmer-to-farmer program.
               Subtitle B--Agricultural Trade Act of 1978

Sec. 321. Export credit guarantee program.
Sec. 322. Market access program.
Sec. 323. Export enhancement program.
Sec. 324. Foreign market development cooperator program.
Sec. 325. Food for progress and education programs.
Sec. 326. Exporter assistance initiative.
        Subtitle C--Miscellaneous Agricultural Trade Provisions

Sec. 331. Bill Emerson Humanitarian Trust.
Sec. 332. Emerging markets.
Sec. 333. Biotechnology and agricultural trade program.
Sec. 334. Surplus commodities for developing or friendly countries.
Sec. 335. Agricultural trade with Cuba.
Sec. 336. Sense of Congress concerning agricultural trade.
                      TITLE IV--NUTRITION PROGRAMS

Sec. 401. Short title.
                     Subtitle A--Food Stamp Program

Sec. 411. Encouragement of payment of child support.
Sec. 412. Simplified definition of income.
Sec. 413. Increase in benefits to households with children.
Sec. 414. Simplified determination of housing costs.
Sec. 415. Simplified utility allowance.
Sec. 416. Simplified procedure for determination of earned income.
Sec. 417. Simplified determination of deductions.
Sec. 418. Simplified definition of resources.
Sec. 419. Alternative issuance systems in disasters.
Sec. 420. State option to reduce reporting requirements.
Sec. 421. Benefits for adults without dependents.
Sec. 422. Preservation of access to electronic benefits.
Sec. 423. Cost neutrality for electronic benefit transfer systems.
Sec. 424. Alternative procedures for residents of certain group 
                            facilities.
Sec. 425. Availability of food stamp program applications on the 
                            Internet.
Sec. 426. Simplified determinations of continuing eligibility.
Sec. 427. Clearinghouse for successful nutrition education efforts.
Sec. 428. Transitional food stamps for families moving from welfare.
Sec. 429. Delivery to retailers of notices of adverse action.
Sec. 430. Reform of quality control system.
Sec. 431. Improvement of calculation of State performance measures.
Sec. 432. Bonuses for States that demonstrate high performance.
Sec. 433. Employment and training program.
Sec. 434. Reauthorization of food stamp program and food distribution 
                            program on Indian reservations.
Sec. 435. Coordination of program information efforts.
Sec. 436. Expanded grant authority.
Sec. 437. Access and outreach pilot projects.
Sec. 438. Consolidated block grants and administrative funds.
Sec. 439. Assistance for community food projects.
Sec. 440. Availability of commodities for the emergency food assistance 
                            program.
Sec. 441. Innovative programs for addressing common community problems.
Sec. 442. Report on use of electronic benefit transfer systems.
Sec. 443. Vitamin and mineral supplements.
                  Subtitle B--Miscellaneous Provisions

Sec. 451. Reauthorization of commodity programs.
Sec. 452. Partial restoration of benefits to legal immigrants.
Sec. 453. Commodities for school lunch programs.
Sec. 454. Eligibility for free and reduced price meals.
Sec. 455. Eligibility for assistance under the special supplemental 
                            nutrition program for women, infants, and 
                            children.
Sec. 456. Seniors farmers' market nutrition program.
Sec. 457. Fruit and vegetable pilot program.
Sec. 458. Congressional Hunger Fellows Program.
Sec. 459. Nutrition information and awareness pilot program.
Sec. 460. Effective date.
                            TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

Sec. 501. Direct loans.
Sec. 502. Financing of bridge loans.
Sec. 503. Limitations on amount of farm ownership loans.
Sec. 504. Joint financing arrangements.
Sec. 505. Guarantee percentage for beginning farmers and ranchers.
Sec. 506. Guarantee of loans made under State beginning farmer or 
                            rancher programs.
Sec. 507. Down payment loan program.
Sec. 508. Beginning farmer and rancher contract land sales program.
                      Subtitle B--Operating Loans

Sec. 511. Direct loans.
Sec. 512. Amount of guarantee of loans for tribal farm operations; 
                            waiver of limitations for tribal farm 
                            operations and other farm operations.
                 Subtitle C--Administrative Provisions

Sec. 521. Eligibility of limited liability companies for farm ownership 
                            loans, farm operating loans, and emergency 
                            loans.
Sec. 522. Debt settlement.
Sec. 523. Temporary authority to enter into contracts; private 
                            collection agencies.
Sec. 524. Interest rate options for loans in servicing.
Sec. 525. Annual review of borrowers.
Sec. 526. Simplified loan applications.
Sec. 527. Inventory property.
Sec. 528. Definitions.
Sec. 529. Loan authorization levels.
Sec. 530. Interest rate reduction program.
Sec. 531. Options for satisfaction of obligation to pay recapture 
                            amount for shared appreciation agreements.
Sec. 532. Waiver of borrower training certification requirement.
Sec. 533. Annual review of borrowers.
                        Subtitle D--Farm Credit

Sec. 541. Repeal of burdensome approval requirements.
Sec. 542. Banks for cooperatives.
Sec. 543. Insurance Corporation premiums.
Sec. 544. Board of Directors of the Federal Agricultural Mortgage 
                            Corporation.
                     Subtitle E--General Provisions

Sec. 551. Inapplicability of finality rule.
Sec. 552. Technical amendments.
Sec. 553. Effective date.
                      TITLE VI--RURAL DEVELOPMENT

                Subtitle A--Empowerment of Rural America

Sec. 601. National Rural Cooperative and Business Equity Fund.
Sec. 602. Rural business investment program.
Sec. 603. Full funding of pending rural development loan and grant 
                            applications.
Sec. 604. Rural Endowment Program.
Sec. 605. Enhancement of access to broadband service in rural areas.
Sec. 606. Value-added agricultural product market development grants.
Sec. 607. National Rural Development Information Clearinghouse.
           Subtitle B--National Rural Development Partnership

Sec. 611. Short title.
Sec. 612. National Rural Development Partnership.
        Subtitle C--Consolidated Farm and Rural Development Act

Sec. 621. Water or waste disposal grants.
Sec. 622. Rural business opportunity grants.
Sec. 623. Rural water and wastewater circuit rider program.
Sec. 624. Multijurisdictional regional planning organizations.
Sec. 625. Certified nonprofit organizations sharing expertise.
Sec. 626. Loan guarantees for certain rural development loans.
Sec. 627. Rural firefighters and emergency personnel grant program.
Sec. 628. Emergency community water assistance grant program.
Sec. 629. Water and waste facility grants for Native American tribes.
Sec. 630. Water systems for rural and native villages in Alaska.
Sec. 631. Rural cooperative development grants.
Sec. 632. Grants to broadcasting systems.
Sec. 633. Business and industry loan modifications.
Sec. 634. Value-added intermediary relending program.
Sec. 635. Use of rural development loans and grants for other purposes.
Sec. 636. Simplified application forms for loan guarantees.
Sec. 637. Definition of rural and rural area.
Sec. 638. Rural entrepreneurs and microenterprise assistance program.
Sec. 639. Rural seniors.
Sec. 640. Children's day care facilities.
Sec. 641. Rural telework.
Sec. 642. Historic barn preservation.
Sec. 643. Grants for emergency weather radio transmitters.
Sec. 644. Bioenergy and biochemical projects.
Sec. 645. Delta Regional Authority.
Sec. 646. SEARCH grants for small communities.
Sec. 647. Northern Great Plains Regional Authority.
   Subtitle D--Food, Agriculture, Conservation, and Trade Act of 1990

Sec. 651. Alternative Agricultural Research and Commercialization 
                            Corporation.
Sec. 652. Telemedicine and distance learning services in rural areas.
             Subtitle E--Rural Electrification Act of 1936

Sec. 661. Bioenergy and biochemical projects.
Sec. 662. Guarantees for bonds and notes issued for electrification or 
                            telephone purposes.
Sec. 663. Expansion of 911 access.
TITLE VII--AGRICULTURAL RESEARCH, EDUCATION, AND EXTENSION AND RELATED 
                                MATTERS

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

Sec. 701. Definitions.
Sec. 702. National Agricultural Research, Extension, Education, and 
                            Economics Advisory Board.
Sec. 703. Grants and fellowships for food and agricultural sciences 
                            education.
Sec. 704. Competitive research facilities grant program.
Sec. 705. Grants for research on the production and marketing of 
                            alcohols and industrial hydrocarbons from 
                            agricultural commodities and forest 
                            products.
Sec. 706. Policy research centers.
Sec. 707. Human nutrition intervention and health promotion research 
                            program.
Sec. 708. Pilot research program to combine medical and agricultural 
                            research.
Sec. 709. Nutrition education program.
Sec. 710. Animal health and disease research programs.
Sec. 711. Research on national or regional problems.
Sec. 712. Education grants programs for Hispanic-serving institutions.
Sec. 713. Competitive grants for international agricultural science and 
                            education programs.
Sec. 714. Indirect costs.
Sec. 715. Research equipment grants.
Sec. 716. Agricultural research programs.
Sec. 717. Extension education.
Sec. 718. Availability of competitive grant funds.
Sec. 719. Joint requests for proposals.
Sec. 720. Supplemental and alternative crops.
Sec. 721. Aquaculture.
Sec. 722. Rangeland research.
Sec. 723. Biosecurity planning and response programs.
   Subtitle B--Food, Agriculture, Conservation, and Trade Act of 1990

Sec. 731. National genetic resources program.
Sec. 732. Biotechnology risk assessment research.
Sec. 733. High-priority research and extension initiatives.
Sec. 734. Nutrient management research and extension initiative.
Sec. 735. Organic agriculture research and extension initiative.
Sec. 736. Agricultural telecommunications program.
Sec. 737. Assistive technology program for farmers with disabilities.
Subtitle C--Agricultural Research, Extension, and Education Reform Act 
                                of 1998

Sec. 741. Initiative for Future Agriculture and Food Systems.
Sec. 742. Partnerships for high-value agricultural product quality 
                            research.
Sec. 743. Precision agriculture.
Sec. 744. Biobased products.
Sec. 745. Thomas Jefferson Initiative for Crop Diversification.
Sec. 746. Integrated research, education, and extension competitive 
                            grants program.
Sec. 747. Support for research regarding diseases of wheat and barley 
                            caused by fusarium graminearum.
Sec. 748. Office of Pest Management Policy.
Sec. 749. Senior Scientific Research Service.
                     Subtitle D--Land-Grant Funding

                      Chapter 1--1862 Institutions

Sec. 751. Carryover.
Sec. 752. Reporting of technology transfer activities.
Sec. 753. Compliance with multistate and integration requirements.
                      Chapter 2--1994 Institutions

Sec. 754. Extension at 1994 institutions.
Sec. 755. Equity in Educational Land-Grant Status Act of 1994.
Sec. 756. Eligibility for integrated grants program.
                      Chapter 3--1890 Institutions

Sec. 757. Authorization percentages for research and extension formula 
                            funds.
Sec. 758. Carryover.
Sec. 759. Reporting of technology transfer activities.
Sec. 760. Grants to upgrade agricultural and food sciences facilities 
                            at 1890 land-grant colleges, including 
                            Tuskegee University.
Sec. 761. National research and training centennial centers.
Sec. 762. Matching funds requirement for research and extension 
                            activities.
                   Chaptesubchapter a--generaltutions
Sec. 771. Priority-setting process.
Sec. 772.subchapter b--land-grant institutions in insular areas
Sec. 775. Distance education grants program for insular area land-grant 
                            institutions.
Sec. 776. Matching requirements for research and extension formula 
                            funds for insular area land-grant 
                            institutions.
                         Subtitle E--Other Laws

Sec. 781. Critical agricultural materials.
Sec. 782. Research facilities.
Sec. 783. Federal agricultural research facilities.
Sec. 784. Competitive, special, and facilities research grants.
Sec. 785. Risk management education for beginning farmers and ranchers.
Sec. 786. Aquaculture.
                      Subtitle F--New Authorities

Sec. 791. Definitions.
Sec. 792. Regulatory and inspection research.
Sec. 793. Emergency research transfer authority.
Sec. 794. Review of Agricultural Research Service.
Sec. 795. Technology transfer for rural development.
Sec. 796. Beginning farmer and rancher development program.
Sec. 797. Sense of Congress regarding doubling of funding for 
                            agricultural research.
Sec. 798. Rural policy research.
Sec. 798A. Priority for farmers and ranchers participating in 
                            conservation programs.
Sec. 798B. Organic production and market data initiatives.
Sec. 798C. Organically produced product research and education.
Sec. 798D. International organic research collaboration.
                          TITLE VIII--FORESTRY

Sec. 801. Office of International Forestry.
Sec. 802. McIntire-Stennis cooperative forestry research program.
Sec. 803. Sustainable forestry outreach initiative; renewable resources 
                            extension activities.
Sec. 804. Forestry incentives program.
Sec. 805. Sustainable forestry cooperative program.
Sec. 806. Sustainable forest management program.
Sec. 807. Forest fire research centers.
Sec. 808. Wildfire prevention and hazardous fuel purchase program.
Sec. 809. Enhanced community fire protection.
Sec. 810. Watershed forestry assistance program.
Sec. 811. General provisions.
Sec. 812. State forest stewardship coordinating committees.
                            TITLE IX--ENERGY

Sec. 901. Findings.
Sec. 902. Consolidated Farm and Rural Development Act.
Sec. 903. Biomass Research and Development Act of 2000.
Sec. 904. Rural Electrification Act of 1936.
Sec. 905. Carbon sequestration demonstration program.
Sec. 906. Sense of Congress concerning national renewable fuels 
                            standard.
Sec. 907. Sense of Congress concerning the bioenergy program of the 
                            Department of Agriculture.
                         TITLE X--MISCELLANEOUS

        Subtitle A--Country of Origin and Quality Grade Labeling

Sec. 1001. Country of origin labeling.
Sec. 1002. Quality grade labeling of imported meat and meat food 
                            products.
                       Subtitle B--Crop Insurance

Sec. 1011. Continuous coverage.
Sec. 1012. Quality loss adjustment procedures.
Sec. 1013. Conservation requirements.
                     Subtitle C--General Provisions

Sec. 1021. Unlawful stockyard practices involving nonambulatory 
                            livestock.
Sec. 1022. Cotton classification services.
Sec. 1023. Protection for purchasers of farm products.
Sec. 1024. Penalties and foreign commerce provisions of the Animal 
                            Welfare Act.
Sec. 1025. Prohibition on interstate movement of animals for animal 
                            fighting.
Sec. 1026. Outreach and assistance for socially disadvantaged farmers 
                            and ranchers.
Sec. 1027. Public disclosure requirements for county committee 
                            elections.
Sec. 1028. Pseudorabies eradication program.
Sec. 1029. Tree assistance program.
Sec. 1030. National organic certification cost-share program.
Sec. 1031. Food Safety Commission.
Sec. 1032. Humane methods of animal slaughter.
                       Subtitle D--Administration

Sec. 1041. Regulations.
Sec. 1042. Effect of amendments.

                      TITLE I--COMMODITY PROGRAMS

SEC. 101. DEFINITIONS.

    Section 102 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7202) is amended to read as follows:

``SEC. 102. DEFINITIONS.

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

            Subtitle A--Direct and Counter-Cyclical Payments

SEC. 111. DIRECT AND COUNTER-CYCLICAL PAYMENTS.

    Sections 111 through 114 of the Federal Agriculture Improvement and 
Reform Act of 1996 (7 U.S.C. 7211 through 7214) are amended to read as 
follows:

``SEC. 111. AUTHORIZATION FOR CONTRACTS.

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

``SEC. 112. ELEMENTS OF CONTRACTS.

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

``SEC. 113. DIRECT PAYMENTS.

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

``SEC. 114. COUNTER-CYCLICAL PAYMENTS.

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

SEC. 112. VIOLATIONS OF CONTRACTS.

    Section 116 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7216) is amended--
            (1) in the first sentence of subsection (a)--
                    (A) by striking ``subsection (b)'' and inserting 
                ``subsections (b) and (e)''; and
                    (B) by striking ``section 111(a)'' and inserting 
                ``this subtitle'';
            (2) in subsection (b), by striking ``If'' and inserting 
        ``Except as provided in subsection (e), if''; and
            (3) by adding at the end the following:
    ``(e) Planting Flexibility.--In the case of a first violation of 
section 118(b) by an eligible owner or producer that has entered into a 
contract and that acted in good faith, in lieu of terminating the 
contract under subsection (a), the Secretary shall require a refund or 
reduce a future contract payment under subsection (b) in an amount that 
does not exceed twice the amount otherwise payable under the contract 
on the number of acres involved in the violation.''.

SEC. 113. PLANTING FLEXIBILITY.

    Section 118(b) of the Federal Agriculture Improvement and Reform 
Act of 1996 (7 U.S.C. 7218(b)) is amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) Limitations.--The planting of the following 
        agricultural commodities shall be prohibited on contract 
        acreage:
                    ``(A) Fruits.
                    ``(B) Vegetables (other than lentils, mung beans, 
                dry peas, and chickpeas).
                    ``(C) In the case of the 2003 and subsequent crops 
                of an agricultural commodity, wild rice.''; and
            (2) in paragraph (2)(C), by striking ``1991 through 1995'' 
        and inserting ``1996 through 2001''.

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

SEC. 121. NONRECOURSE MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY 
              PAYMENTS.

    (a) In General.--Sections 131(a) and 137 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7231(a), 7237) are amended 
by striking ``2002'' each place it appears and inserting ``2006''.
    (b) Upland Cotton.--Sections 134(e)(1), 136, and 136A(a) of the 
Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7234(e)(1), 7236, 7236a(a)) are amended by striking ``2003'' each place 
it appears and inserting ``2007''.

SEC. 122. ELIGIBLE PRODUCTION.

    Section 131 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7231) is amended by striking subsection (b) and 
inserting the following:
    ``(b) Eligible Production.--The producers on a farm shall be 
eligible for a marketing loan under subsection (a) for any quantity of 
a loan commodity produced on the farm.''.

SEC. 123. LOAN RATES.

    (a) In General.--Section 132 of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7232) is amended to read as follows:

``SEC. 132. LOAN RATES.

    ``(a) In General.--Subject to subsection (b), the loan rate for a 
marketing assistance loan under section 131 for a loan commodity shall 
be--
            ``(1) in the case of wheat, $3.00 per bushel;
            ``(2) in the case of corn, $2.08 per bushel;
            ``(3) in the case of grain sorghum, $2.08 per bushel;
            ``(4) in the case of barley, $2.00 per bushel;
            ``(5) in the case of oats, $1.50 per bushel;
            ``(6) in the case of upland cotton, $0.55 per pound;
            ``(7) in the case of extra long staple cotton, $0.7965 per 
        pound;
            ``(8) in the case of rice, $6.85 per hundredweight;
            ``(9) in the case of soybeans, $5.20 per bushel;
            ``(10) in the case of oilseeds (other than soybeans), 
        $0.095 per pound;
            ``(11) in the case of graded wool, $1.00 per pound;
            ``(12) in the case of nongraded wool, $.40 per pound;
            ``(13) in the case of mohair, $2.00 per pound;
            ``(14) in the case of honey, $.60 per pound;
            ``(15) in the case of dry peas, $6.78 per hundredweight;
            ``(16) in the case of lentils, $12.79 per hundredweight;
            ``(17) in the case of large chickpeas, $17.44 per 
        hundredweight; and
            ``(18) in the case of small chickpeas, $8.10 per 
        hundredweight.
    ``(b) Adjustments.--
            ``(1) In general.--The Secretary may make appropriate 
        adjustments in the loan rates for any loan commodity for 
        differences in grade, type, quality, location, and other 
        factors.
            ``(2) Manner.--The adjustments under this subsection shall, 
        to the maximum extent practicable, be made in such manner that 
        the average loan rate for the loan commodity will, on the basis 
        of the anticipated incidence of the factors described in 
        paragraph (1), be equal to the loan rate provided under this 
        section.''.
    (b) Conforming Amendment.--Section 162 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7282) is repealed.

SEC. 124. TERM OF LOANS.

    Section 133 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7233) is amended to read as follows:

``SEC. 133. TERM OF LOANS.

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

SEC. 125. REPAYMENT OF LOANS.

    Section 134(a) of the Federal Agriculture Improvement and Reform 
Act of 1996 (7 U.S.C. 7234(a)) is amended--
            (1) by striking ``wheat, corn, grain sorghum, barley, oats, 
        and oilseeds'' and inserting ``a loan commodity (other than 
        upland cotton, rice, and extra long staple cotton)''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (C), by striking ``and'' at the 
                end;
                    (B) in subparagraph (D), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(E) minimize discrepancies in marketing loan 
                benefits across State boundaries and across county 
                boundaries.''.

SEC. 126. LOAN DEFICIENCY PAYMENTS.

    Section 135 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7235) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) In General.--The Secretary may make loan deficiency payments 
available to producers on a farm that, although eligible to obtain a 
marketing assistance loan under section 131 with respect to a loan 
commodity, agree to forgo obtaining the loan for the loan commodity in 
return for payments under this section.''; and
            (2) by striking subsections (e) and (f) and inserting the 
        following:
    ``(e) Beneficial Interest.--
            ``(1) In general.--A producer shall be eligible for a 
        payment for a loan commodity under this section only if the 
        producer has a beneficial interest in the loan commodity, as 
        determined by the Secretary.
            ``(2) Application.--The Secretary shall make a payment 
        under this section to the producers on a farm with respect to a 
        quantity of a loan commodity as of the earlier of--
                    ``(A) the date on which the producers on the farm 
                marketed or otherwise lost beneficial interest in the 
                loan commodity, as determined by the Secretary; or
                    ``(B) the date the producers on the farm request 
                the payment.''.

                     Subtitle C--Other Commodities

                            CHAPTER 1--DAIRY

SEC. 131. MILK PRICE SUPPORT PROGRAM.

    (a) In General.--Section 141 of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7251) is amended--
            (1) in subsections (b)(4) and (h), by striking ``2001'' 
        each place it appears and inserting ``2006''; and
            (2) in the first sentence of subsection (d)(1), by striking 
        ``may'' and inserting ``shall''.
    (b) Effective Date.--The amendments made by subsection (a) take 
effect on January 1, 2002.

SEC. 132. NATIONAL DAIRY PROGRAM.

    Section 142 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7252) is amended to read as follows:

``SEC. 142. NATIONAL DAIRY PROGRAM.

    ``(a) Purpose.--The purpose of this section is to establish a 
program that will stabilize the production, price, and marketing of 
milk and other dairy products in the United States which is critical to 
the welfare of the United States.
    ``(b) Definitions.--In this section:
            ``(1) Class i, ii, iii, and iv milk.--The terms `Class I 
        milk', `Class II milk', `Class III milk', and `Class IV milk' 
        mean milk (including milk components) classified as Class I, 
        II, III, or IV milk, respectively, under a Federal milk 
        marketing order.
            ``(2) Eligible production.--The term `eligible production' 
        means, with respect to each producer that operates a dairy 
        farming operation, the lesser of--
                    ``(A) the quantity of milk sold by the dairy 
                farming operation under any Federal milk marketing 
                order during the applicable month; or
                    ``(B) 500,000 pounds of milk per month.
            ``(3) Federal milk marketing order.--The term `Federal milk 
        marketing order' means an order issued under section 8c of the 
        Agricultural Adjustment Act (7 U.S.C. 608c), reenacted with 
        amendments by the Agricultural Marketing Agreement Act of 1937.
            ``(4) Marketing area.--The term `marketing area' means a 
        marketing area defined under a Federal milk marketing order.
            ``(5) Producer.--The term `producer' means an individual or 
        entity that directly or indirectly (as determined by the 
        Secretary)--
                    ``(A) shares in the risk of producing milk; and
                    ``(B) makes contributions (including land, labor, 
                management, equipment, or capital) to the dairy farming 
                operation of the individual or entity that are at least 
                commensurate with the individual or entity's share of 
                the proceeds of the operation.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.
    ``(c) Minimum Price.--Effective beginning January 1, 2002, the 
Secretary shall amend Federal milk marketing orders to establish a 
minimum price per hundredweight for Class I milk that is not less than 
the sum of--
            ``(1) the adjusted Class I milk differential specified in 
        section 1000.52 of title 7, Code of Federal Regulations (or a 
        successor regulation); and
            ``(2) the greater of--
                    ``(A) the advanced Class III milk price (as 
                determined under section 1000.50(q)(4)(i) of title 7, 
                Code of Federal Regulations (or a successor 
                regulation));
                    ``(B) the advanced Class IV milk price (as 
                determined under section 1000.50(q)(4)(ii) of title 7, 
                Code of Federal Regulations (or a successor 
                regulation)); or
                    ``(C) $14.25.
    ``(d) National Pooling.--Notwithstanding any other provision of 
law, the Secretary--
            ``(1) shall provide for the uniform national pooling among 
        producers of milk under all Federal milk marketing orders of 
        all funds that are equal to the difference between--
                    ``(A) the price of Class I milk as determined under 
                this section; and
                    ``(B) the price of Class I milk that would be 
                determined if this section were not in effect;
            ``(2) subject to subsection (e), shall provide for the 
        distribution of amounts described in paragraph (1) to all 
        producers covered by Federal milk marketing orders, based on 
        eligible production under Federal milk marketing orders, at a 
        uniform rate per hundredweight; and
            ``(3) may make such modifications in the operation of 
        Federal milk marketing orders as are necessary to carry out 
        this section.
    ``(e) Administrative and Food Assistance Costs.--The Secretary 
shall use amounts described in subsection (d)(1) to provide 
compensation to--
            ``(1) the Secretary for--
                    ``(A) administrative costs incurred by the 
                Secretary in carrying out subsections (c) and (d); and
                    ``(B) the increased costs incurred by the Secretary 
                of any milk and milk products provided under any food 
                assistance program administered by the Secretary that 
                results from carrying out subsections (c) and (d);
            ``(2) each State for the increased costs incurred by the 
        State of any milk and milk products provided under the special 
        supplemental nutrition program for women, infants, and children 
        established by section 17 of the Child Nutrition Act of 1966 
        (42 U.S.C. 1786) that results from carrying out subsections (c) 
        and (d); and
            ``(3) the Commodity Credit Corporation for any additional 
        costs for a fiscal year to carry out section 141 as a result of 
        increased production of milk in a marketing area that results 
        from carrying out subsections (c) and (d).
    ``(f) Counter-Cyclical Payments from Secretary to Producers.--
            ``(1) In general.--Subject to paragraph (3), if the average 
        price for Class III milk during a month is less than $14.25 per 
        hundredweight, the Secretary shall use the funds of the 
        Commodity Credit Corporation in such amounts as may be 
        necessary to make a payment to each producer for eligible 
        production of milk in an amount determined by multiplying--
                    ``(A) the payment rate determined under paragraph 
                (2); by
                    ``(B) the quantity of Class II, Class III, and 
                Class IV milk produced by the producer during the 
                month, as determined by the Secretary.
            ``(2) Payment rate.--The payment rate for a payment made to 
        a producer for a month under paragraph (1)(A) shall equal 25 
        percent of the difference between--
                    ``(A) $14.25 per hundredweight; and
                    ``(B) the average price for Class III milk during 
                the month, as determined by the Secretary.
            ``(3) Maximum amount of payments.--The total amount of 
        payments made to producers for a fiscal year under this 
        subsection shall not exceed $300,000,000.''.

SEC. 133. 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 ``2006''.
    (b) Dairy Indemnity Program.--Section 3 of Public Law 90-484 (7 
U.S.C. 450l) is amended by striking ``1995'' and inserting ``2006''.

SEC. 134. 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'' and inserting ``3,000,000''.
    (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. 135. 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. 136. 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, including a 
        dairy product 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.''.
    (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''; and
            (4) by inserting after paragraph (5) (as so designated) the 
        following:
            ``(6) Importers.--
                    ``(A) Representation.--The Secretary shall appoint 
                not more than 2 members who represent importers of 
                dairy products and are subject to assessments under the 
                order, to reflect the proportion of domestic production 
                and imports supplying the United States market, as 
                determined by the Secretary on the basis of the average 
                volume of domestic production of dairy products in 
                proportion to the average volume of imports of dairy 
                products in the United States during the immediately 
                preceding 3 years.
                    ``(B) 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.''.
    (c) 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; and
            (3) 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.--
                            ``(i) In general.--The assessment on 
                        imported dairy products shall be--
                                    ``(I) paid by the importer to 
                                Customs at the time of the entry of the 
                                products into the United States; and
                                    ``(II) remitted by Customs to the 
                                Board.
                            ``(ii) Time of entry.--For purposes of this 
                        subparagraph, entry of the products into the 
                        United States shall be considered to have 
                        occurred when a dairy product is released from 
                        custody of Customs and introduced into the 
                        stream of commerce within the United States.
                            ``(iii) Importers.--For purposes of this 
                        subparagraph, an importer includes--
                                    ``(I) a person that holds title to 
                                a dairy product produced outside the 
                                United States immediately on release by 
                                Customs; and
                                    ``(II) a person that acts on behalf 
                                of other persons, as an agent, broker, 
                                or consignee, to secure the release of 
                                a dairy product from Customs and 
                                introduce the released dairy product 
                                into the stream of commerce.
                    ``(C) Rate.--The rate of assessment on imported 
                dairy products shall be determined in the same manner 
                as the rate of assessment per hundredweight or the 
                equivalent of milk.
                    ``(D) Value of products.--For the purpose of 
                determining the assessment on imported dairy products 
                under subparagraph (C), the value to be placed on 
                imported dairy products shall be established by the 
                Secretary in a fair and equitable manner.
                    ``(E) Use of assessments on imported dairy 
                products.--Assessments collected on imported dairy 
                products shall not be used for foreign market promotion 
                of United States dairy products.''.
    (d) 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''.
    (e) 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, by inserting ``and importers'' 
        after ``producers'' each place it appears; and
            (2) in the second sentence, by inserting after ``commercial 
        use'' the following: ``and importers voting in the referendum 
        (that have been engaged in the importation of dairy products 
        into the United States during the applicable period, as 
        determined by the Secretary)''.
    (f) Conforming Amendments.--Section 110(b) of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4501(b)) is amended--
            (1) in the first sentence--
                    (A) by inserting after ``commercial use'' the 
                following: ``and on imported dairy products''; and
                    (B) by striking ``products produced in the United 
                States.'' and inserting ``products.''; and
            (2) in the second sentence, by inserting after ``produce 
        milk'' the following: ``or the right of any person to import 
        dairy products''.

                            CHAPTER 2--SUGAR

SEC. 141. SUGAR PROGRAM.

    (a) Loan Rate Adjustments.--Section 156(c) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(c)) is 
amended--
            (1) by striking ``Reduction in Loan Rates'' and inserting 
        ``Loan Rate Adjustments''; and
            (2) in paragraph (1)--
                    (A) by striking ``Reduction required'' and 
                inserting ``In general''; and
                    (B) by striking ``shall'' and inserting ``may''.
    (b) Loan Type; Processor Assurances.--Section 156(e) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(e)) is 
amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Processor assurances.--
                    ``(A) In general.--The Secretary shall obtain from 
                each processor that receives a loan under this section 
                such assurances as the Secretary considers adequate to 
                ensure that the processor will provide payments to 
                producers that are proportional to the value of the 
                loan received by the processor for the sugar beets and 
                sugarcane delivered by producers to the processor.
                    ``(B) Minimum payments.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary may establish appropriate minimum 
                        payments for purposes of this paragraph.
                            ``(ii) Limitation.--In the case of sugar 
                        beets, the minimum payment established under 
                        clause (i) shall not exceed the rate of payment 
                        provided for under the applicable contract 
                        between a sugar beet producer and a sugar beet 
                        processor.
                    ``(C) Bankruptcy or insolvency of processors.--
                            ``(i) In general.--The Secretary shall use 
                        funds of the Commodity Credit Corporation to 
                        pay a producer of sugar beets or sugarcane loan 
                        benefits described in clause (ii) if--
                                    ``(I) a processor that has entered 
                                into a contract with the producer has 
                                filed for bankruptcy protection or is 
                                otherwise insolvent;
                                    ``(II) the assurances under 
                                subparagraph (A) are not adequate to 
                                ensure compliance with subparagraph 
                                (A), as determined by the Secretary;
                                    ``(III) the producer demands 
                                payments of loan benefits required 
                                under this section from the processor; 
                                and
                                    ``(IV) the Secretary determines 
                                that the processor is unable to provide 
                                the loan benefits required under this 
                                section.
                            ``(ii) Amount.--The amount of loan benefits 
                        provided to a producer under clause (i) shall 
                        be equal to--
                                    ``(I) the maximum amount of loan 
                                benefits the producer would have been 
                                entitled to receive under this section 
                                during the 30-day period beginning on 
                                the final settlement date provided for 
                                in the contract between the producer 
                                and processor; less
                                    ``(II) any such benefits received 
                                by the producer from the processor.
                            ``(iii) Administration.--On payment to a 
                        producer under clause (i), the Secretary 
                        shall--
                                    ``(I) be subrogated to all claims 
                                of the producer against the processor 
                                and other persons responsible for 
                                nonpayment; and
                                    ``(II) have authority to pursue 
                                such claims as are necessary to recover 
                                the benefits not paid to the producer 
                                by the processor.''; and
            (2) by adding at the end the following:
            ``(3) Administration.--The Secretary may not impose or 
        enforce any prenotification or similar administrative 
        requirement that has the effect of preventing a processor from 
        electing to forfeit the loan collateral on the maturity of the 
        loan.''.
    (c) Termination of Marketing Assessment.--Effective October 1, 
2001, section 156 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7272) is amended by striking subsection (f).
    (d) Termination of Forfeiture Penalty.--Section 156 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is 
amended by striking subsection (g).
    (e) In-Process Sugar.--Section 156 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7272) (as amended by 
subsections (c) and (d)) is amended by inserting after subsection (e) 
the following:
    ``(f) Loans for In-Process Sugar.--
            ``(1) Definition of in-process sugars and syrups.--In this 
        subsection, the term `in-process sugars and syrups' does not 
        include raw sugar, liquid sugar, invert sugar, invert syrup, or 
        other finished product that is otherwise eligible for a loan 
        under subsection (a) or (b).
            ``(2) Availability.--The Secretary shall make nonrecourse 
        loans available to processors of a crop of domestically grown 
        sugarcane and sugar beets for in-process sugars and syrups 
        derived from the 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.''.
    (f) Administration of Program.--Section 156 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) (as 
amended by subsection (e)) is amended by inserting after subsection (f) 
the following:
    ``(g) Avoiding Forfeitures; Corporation Inventory Disposition.--
            ``(1) In general.--Subject to subsection (e)(3), to the 
        maximum extent practicable, the Secretary shall operate the 
        program established under this section at no cost to the 
        Federal Government by avoiding the forfeiture of sugar to the 
        Commodity Credit Corporation.
            ``(2) Inventory disposition.--
                    ``(A) In general.--To carry out paragraph (1), the 
                Commodity Credit Corporation may accept bids to obtain 
                raw cane sugar or refined beet sugar in the inventory 
                of the Commodity Credit Corporation from (or otherwise 
                make available such commodities, on appropriate terms 
                and conditions, to) processors of sugarcane and 
                processors of sugar beets (acting in conjunction with 
                the producers of the sugarcane or sugar beets processed 
                by the processors) in return for the reduction of 
                production of raw cane sugar or refined beet sugar, as 
                appropriate.
                    ``(B) Additional authority.--The authority provided 
                under this paragraph is in addition to any authority of 
                the Commodity Credit Corporation under any other 
                law.''.
    (g) Information Reporting.--Section 156(h) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(h)) is 
amended--
            (1) by redesignating paragraphs (2) and (3) as paragraphs 
        (4) and (5), respectively;
            (2) by inserting after paragraph (1) the following:
            ``(2) Duty of producers to report.--
                    ``(A) Proportionate share states.--As a condition 
                of a loan made to a processor for the benefit of a 
                producer, the Secretary shall require each producer of 
                sugarcane located in a State (other than the 
                Commonwealth of Puerto Rico) in which there are in 
                excess of 250 producers of sugarcane to report, in the 
                manner prescribed by the Secretary, the sugarcane 
                yields and acres planted to sugarcane of the producer.
                    ``(B) Other states.--The Secretary may require each 
                producer of sugarcane or sugar beets not covered by 
                paragraph (1) to report, in a manner prescribed by the 
                Secretary, the yields of, and acres planted to, 
                sugarcane or sugar beets, respectively, of the 
                producer.
            ``(3) Duty of importers to report.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall require an 
                importer of sugars, syrups, or molasses to be used for 
                human consumption or to be used for the extraction of 
                sugar for human consumption to report, in the manner 
                prescribed by the Secretary, the quantities of the 
                products imported by the importer and the sugar content 
                or equivalent of the products.
                    ``(B) Tariff-rate quotas.--Subparagraph (A) shall 
                not apply to sugars, syrups, or molasses that are 
                within the quantities of tariff-rate quotas that are 
                subject to the lower rate of duties.''; and
            (3) in paragraph (5) (as redesignated by paragraph (1)), by 
        striking ``paragraph (1)'' and inserting ``this subsection''.
    (h) Crops.--Section 156(i) of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7251(i)) is amended--
            (1) by striking ``(other than subsection (f))''; and
            (2) by striking ``2002'' and inserting ``2006''.
    (i) 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. 142. STORAGE FACILITY LOANS.

    Chapter 2 of subtitle D of the Federal Agriculture Improvement and 
Reform Act of 1996 (7 U.S.C. 7271 et seq.) is amended by adding at the 
end the following:

``SEC. 157. STORAGE FACILITY LOANS.

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

SEC. 143. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    (a) Information Reporting.--Section 359a of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1359aa) is repealed.
    (b) Estimates.--Section 359b of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1359bb) is amended--
            (1) in the section heading--
                    (A) by inserting ``flexible'' before ``marketing''; 
                and
                    (B) by striking ``and crystalline fructose'';
            (2) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``Before'' and inserting 
                        ``Not later than August 1 before'';
                            (ii) by striking ``1992 through 1998'' and 
                        inserting ``2002 through 2006'';
                            (iii) in subparagraph (A), by striking 
                        ``(other than sugar'' and all that follows 
                        through ``stocks'';
                            (iv) by redesignating subparagraphs (B) and 
                        (C) as subparagraphs (C) and (E), respectively;
                            (v) by inserting after subparagraph (A) the 
                        following:
                    ``(B) the quantity of sugar that would provide for 
                reasonable carryover stocks;'';
                            (vi) in subparagraph (C) (as so 
                        redesignated)--
                                    (I) by striking ``or'' and all that 
                                follows through ``beets''; and
                                    (II) by striking ``and'' following 
                                the semicolon;
                            (vii) by inserting after subparagraph (C) 
                        (as so redesignated) the following:
                    ``(D) the quantity of sugar that will be available 
                from the domestic processing of sugarcane and sugar 
                beets; and''; and
                            (viii) in subparagraph (E) (as so 
                        redesignated)--
                                    (I) by striking ``quantity of 
                                sugar'' and inserting ``quantity of 
                                sugars, syrups, and molasses'';
                                    (II) by inserting ``human'' after 
                                ``imported for'' the first place it 
                                appears;
                                    (III) by inserting after 
                                ``consumption'' the first place it 
                                appears the following: ``or to be used 
                                for the extraction of sugar for human 
                                consumption'';
                                    (IV) by striking ``year'' and 
                                inserting ``year, whether such articles 
                                are under a tariff-rate quota or are in 
                                excess or outside of a tariff-rate 
                                quota''; and
                                    (V) by striking ``(other than 
                                sugar'' and all that follows through 
                                ``carry-in stocks'';
                    (B) by redesignating paragraph (2) as paragraph 
                (3);
                    (C) by inserting after paragraph (1) the following:
            ``(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.''; and
                    (D) in paragraph (3) (as so redesignated)--
                            (i) in the paragraph heading, by striking 
                        ``Quarterly reestimates'' and inserting 
                        ``Reestimates''; and
                            (ii) by inserting ``as necessary, but'' 
                        after ``a fiscal year'';
            (3) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--By the beginning of each fiscal year, 
        the Secretary shall establish for that fiscal year appropriate 
        allotments under section 359c for the marketing by processors 
        of sugar processed from sugar beets and from domestically-
        produced sugarcane at a level that the Secretary estimates will 
        result in no forfeitures of sugar to the Commodity Credit 
        Corporation under the loan program for sugar established under 
        section 156 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7251).''; and
                    (B) in paragraph (2), by striking ``or crystalline 
                fructose'';
            (4) by striking subsection (c);
            (5) by redesignating subsection (d) as subsection (c); and
            (6) in subsection (c) (as so redesignated)--
                    (A) by striking paragraph (2);
                    (B) by redesignating paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively; and
                    (C) in paragraph (2) (as so redesignated)--
                            (i) by striking ``or manufacturer'' and all 
                        that follows through ``(2)''; and
                            (ii) by striking ``or crystalline 
                        fructose''.
    (c) Establishment.--Section 359c of the Agricultural Adjustment Act 
of 1938 (7 U.S.C. 1359cc) is amended--
            (1) in the section heading, by inserting ``flexible'' after 
        ``of'';
            (2) in subsection (a), by inserting ``flexible'' after 
        ``establish'';
            (3) in subsection (b)--
                    (A) in paragraph (1)(A), by striking ``1,250,000'' 
                and inserting ``1,532,000''; and
                    (B) in paragraph (2), by striking ``to the maximum 
                extent practicable'';
            (4) by striking subsection (c) and inserting the following:
    ``(c) Marketing Allotment for Sugar Derived from Sugar Beets and 
Sugar Derived from Sugarcane.--The overall allotment quantity for the 
fiscal year shall be allotted between--
            ``(1) sugar derived from sugar beets by establishing a 
        marketing allotment for a fiscal year at a quantity equal to 
        the product of multiplying the overall allotment quantity for 
        the fiscal year by 54.35 percent; and
            ``(2) sugar derived from sugarcane by establishing a 
        marketing allotment for a fiscal year at a quantity equal to 
        the product of multiplying the overall allotment quantity for 
        the fiscal year by 45.65 percent.'';
            (5) by striking subsection (d) and inserting the following:
    ``(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.'';
            (6) by striking subsection (e);
            (7) by redesignating subsection (f) as subsection (e);
            (8) in subsection (e) (as so redesignated)--
                    (A) by striking ``The allotment'' and inserting the 
                following:
            ``(1) In general.--The allotment'';
                    (B) in paragraph (1) (as so redesignated)--
                            (i) by striking ``the 5'' and inserting 
                        ``the'';
                            (ii) by inserting after ``sugarcane is 
                        produced,'' the following: ``after a hearing 
                        (if requested by the affected sugarcane 
                        processors and growers) and on such notice as 
                        the Secretary by regulation may prescribe,''; 
                        and
                            (iii) by striking ``on the basis of past 
                        marketings'' and all that follows through 
                        ``allotments'' and inserting ``as provided in 
                        this subsection and section 
                        359d(a)(2)(A)(iv)''; and
                    (C) by inserting after paragraph (1) (as so 
                designated) the following:
            ``(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.'';
            (9) by inserting after subsection (e) (as so redesignated) 
        the following:
    ``(f) Filling Cane Sugar Allotments.--Except as provided in section 
359e, a State cane sugar allotment established under subsection (e) for 
a fiscal year may be filled only with sugar processed from sugarcane 
grown in the State covered by the allotment.'';
            (10) in subsection (g)--
                    (A) in paragraph (1), by striking ``359b(a)(2)--'' 
                and all that follows through the comma at the end of 
                subparagraph (C) and inserting ``359b(a)(3), adjust 
                upward or downward marketing allotments in a fair and 
                equitable manner'';
                    (B) in paragraph (2), by striking ``359f(b)'' and 
                inserting ``359f(c)''; and
                    (C) in paragraph (3)--
                            (i) in the paragraph heading, by striking 
                        ``Reductions'' and inserting ``Carry-over of 
                        reductions'';
                            (ii) by inserting after ``this subsection, 
                        if'' the following: ``at the time of the 
                        reduction'';
                            (iii) by striking ``price support'' and 
                        inserting ``nonrecourse'';
                            (iv) by striking ``206'' and all that 
                        follows through ``the allotment'' and inserting 
                        ``156 of the Federal Agriculture Improvement 
                        and Reform Act of 1996 (7 U.S.C. 7251),''; and
                            (v) by striking ``, if any,''; and
            (11) by striking subsection (h) and inserting the 
        following:
    ``(h) Suspension of Allotments.--Whenever the Secretary estimates 
or reestimates under section 359b(a), or has reason to believe, that 
imports of sugars, syrups or molasses for human consumption or to be 
used for the extraction of sugar for human consumption, whether under a 
tariff-rate quota or in excess or outside of a tariff-rate quota, will 
exceed 1,532,000 short tons (raw value equivalent), and that the 
imports would lead to a reduction of the overall allotment quantity, 
the Secretary shall suspend the marketing allotments established under 
this section until such time as the imports have been restricted, 
eliminated, or reduced to or below the level of 1,532,000 short tons 
(raw value equivalent).''.
    (d) Allocation.--Section 359d(a)(2) of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1359dd(a)(2)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``The Secretary'' and inserting the 
                following:
                            ``(i) In general.--The Secretary'';
                    (B) in the first sentence of clause (i) (as so 
                designated)--
                            (i) by striking ``interested parties'' and 
                        inserting ``the affected sugarcane processors 
                        and growers''; and
                            (ii) by striking ``by taking'' and all that 
                        follows through ``allotment allocated.'' and 
                        inserting ``under this subparagraph.''; and
                    (C) by inserting after clause (i) the following:
                            ``(ii) Multiple processor states.--Except 
                        as provided in clauses (iii) and (iv), the 
                        Secretary shall allocate the allotment for cane 
                        sugar among multiple cane sugar processors in a 
                        single 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;
                                    ``(II) the ability of processors to 
                                market sugar covered by that portion of 
                                the allotment allocated for the crop 
                                year; and
                                    ``(III) past processings of sugar 
                                from sugarcane, based on the average of 
                                the 3 highest years of production 
                                during the 1996 through 2000 crop 
                                years.
                            ``(iii) Talisman processing facility.--In 
                        the case of allotments under clause (ii) 
                        attributable to the operations of the Talisman 
                        processing facility before the date of 
                        enactment of this clause, the Secretary shall 
                        allocate the allotment among processors in the 
                        State under clause (i) in accordance with the 
                        agreements of March 25 and 26, 1999, between 
                        the affected processors and the Secretary of 
                        the Interior.
                            ``(iv) Proportionate share states.--In the 
                        case of States subject to section 359f(c), the 
                        Secretary shall allocate the allotment for cane 
                        sugar among multiple cane sugar processors in a 
                        single state based on--
                                    ``(I) past marketings of sugar, 
                                based on the average of the 2 highest 
                                years of production of raw cane sugar 
                                from among the 1997 through 2001 crop 
                                years;
                                    ``(II) the ability of processors to 
                                market sugar covered by that portion of 
                                the allotments allocated for the crop 
                                year; and
                                    ``(III) past processings of sugar 
                                from sugarcane, based on the average of 
                                the 2 highest crop years of crop 
                                production during the 1997 through 2001 
                                crop years.
                            ``(v) New entrants.--
                                    ``(I) In general.--Notwithstanding 
                                clauses (ii) and (iv), the Secretary, 
                                on application of any processor that 
                                begins processing sugarcane on or after 
                                the date of enactment of this clause, 
                                and after a hearing (if requested by 
                                the affected sugarcane processors and 
                                growers) and on such notice as the 
                                Secretary by regulation may prescribe, 
                                may provide the processor with an 
                                allocation that provides a fair, 
                                efficient and equitable distribution of 
                                the allocations from the allotment for 
                                the State in which the processor is 
                                located.
                                    ``(II) Proportionate share 
                                states.--In the case of proportionate 
                                share States, the Secretary shall 
                                establish proportionate shares in a 
                                quantity sufficient to produce the 
                                sugarcane required to satisfy the 
                                allocations.
                                    ``(III) Limitation.--The allotment 
                                for a new processor under this clause 
                                shall not exceed 50,000 short tons (raw 
                                value).
                            ``(vi) Transfer of ownership.--Except as 
                        otherwise provided in section 359f(c)(8), if a 
                        sugarcane processor is sold or otherwise 
                        transferred to another owner or closed as part 
                        of an affiliated corporate group processing 
                        consolidation, the Secretary shall transfer the 
                        allotment allocation for the processor to the 
                        purchaser, new owner, or successor in interest, 
                        as applicable, of the processor.''; and
            (2) in subparagraph (B)--
                    (A) in the first sentence, by striking ``The 
                Secretary'' and inserting the following:
                            ``(i) In general.--The Secretary'';
                    (B) in clause (i) (as so designated)--
                            (i) by striking ``interested parties'' and 
                        inserting ``the affected sugar beet processors 
                        and growers''; and
                            (ii) by striking ``processing capacity'' 
                        and all that follows through ``allotment 
                        allocated.'' and inserting the following: ``the 
                        marketings of sugar processed from sugar beets 
                        of any or all of the 1996 through 2000 crops, 
                        and such other factors as the Secretary may 
                        consider appropriate after consultation with 
                        the affected sugar beet processors and 
                        growers.''; and
                    (C) by adding at the end the following:
                            ``(ii) New processors.--In the case of any 
                        processor that has started processing sugar 
                        beets after January 1, 1996, the Secretary 
                        shall provide the processor with an allocation 
                        that provides a fair, efficient and equitable 
                        distribution of the allocations.''.
    (e) Reassignment.--Section 359e(b) of the Agricultural Adjustment 
Act of 1938 (7 U.S.C. 1359ee(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by striking the ``and'' 
                after the semicolon;
                    (B) by redesignating subparagraph (C) as 
                subparagraph (D);
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) if after the reassignments, the deficit 
                cannot be completely eliminated, the Secretary shall 
                reassign the estimated quantity of the deficit to the 
                sale of any inventories of sugar held by the Commodity 
                Credit Corporation; and''; and
                    (D) in subparagraph (D) (as so redesignated), by 
                inserting ``and sales'' after ``reassignments''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking the ``and'' 
                after the semicolon;
                    (B) in subparagraph (B), by striking ``reassign the 
                remainder to imports.'' and inserting ``use the 
                estimated quantity of the deficit for the sale of any 
                inventories of sugar held by the Commodity Credit 
                Corporation; and''; and
                    (C) by inserting after subparagraph (B) the 
                following:
                    ``(C) if after the reassignments and sales, the 
                deficit cannot be completely eliminated, the Secretary 
                shall reassign the remainder to imports.''.
    (f) Producer Provisions.--Section 359f of the Agricultural 
Adjustment Act of 1938 (7 U.S.C. 1359ff) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Whenever'' and inserting the 
                following:
            ``(1) In general.--If'';
                    (B) in the second sentence, by striking 
                ``processor's allocation'' and inserting ``allocation 
                to the processor'';
                    (C) by striking ``Any dispute'' and inserting the 
                following:
            ``(2) Arbitration.--
                    ``(A) In general.--Any dispute''; and
                    (D) by adding at the end the following:
                    ``(B) Period.--The 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.'';
            (2) by redesignating subsection (b) as subsection (c);
            (3) by inserting after subsection (a) the following:
    ``(b) Sugar Beet Processing Facility Closures.--
            ``(1) In general.--If a sugar beet processing facility is 
        closed and the sugar beet growers that previously delivered 
        beets to the facility elect to deliver their beets to another 
        processing company, the growers may petition the Secretary to 
        modify allocations under this part to allow the delivery.
            ``(2) Increased allocation for processing company.--The 
        Secretary may increase the allocation to the processing company 
        to which the growers elect to deliver their sugar beets, with 
        the approval of the processing company, to a level that does 
        not exceed the processing capacity of the processing company, 
        to accommodate the change in deliveries.
            ``(3) Decreased allocation for closed company.--The 
        increased allocation shall be deducted from the allocation to 
        the company that owned the processing facility that has been 
        closed and the remaining allocation shall be unaffected.
            ``(4) Timing.--The determinations of the Secretary on the 
        issues raised by the petition shall be made within 60 days 
        after the filing of the petition.''; and
            (4) in subsection (c) (as so redesignated)--
                    (A) in paragraph (3)(A), by striking ``the 
                preceding 5 years'' and inserting ``the 2 highest years 
                from among the 1999, 2000, and 2001 crop years'';
                    (B) in paragraph (4)(A), by striking ``each'' and 
                all that follows through ``in effect'' and inserting 
                ``the 2 highest of the 1999, 2000, and 2001 crop 
                years''; and
                    (C) by inserting after paragraph (7) the following:
            ``(8) Processing facility closures.--
                    ``(A) In general.--If a sugarcane processing 
                facility subject to this subsection is closed and the 
                sugarcane growers that delivered sugarcane to the 
                facility prior to closure elect to deliver their 
                sugarcane to another processing company, the growers 
                may petition the Secretary to modify allocations under 
                this part to allow the delivery.
                    ``(B) Increased allocation for processing 
                company.--The Secretary may increase the allocation to 
                the processing company to which the growers 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 determinations of the Secretary 
                on the issues raised by the petition shall be made 
                within 60 days after the filing of the petition.''.
    (g) Conforming Amendments.--
            (1) Part VII of subtitle B of title III of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 359aa et seq.) is amended by 
        striking the part heading and inserting the following:

         ``PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR''.

            (2) Part VII of subtitle B of title III of the Agricultural 
        Adjustment Act of 1938 is amended by inserting before section 
        359a (7 U.S.C. 1359aa) the following:

``SEC. 359. DEFINITIONS.

    ``In this part:
            ``(1) Mainland state.--The term `mainland State' means a 
        State other than an offshore State.
            ``(2) Offshore state.--The term `offshore State' means a 
        sugarcane producing State located outside of the continental 
        United States.
            ``(3) State.--Notwithstanding section 301, the term `State' 
        means--
                    ``(A) a State;
                    ``(B) the District of Columbia; and
                    ``(C) the Commonwealth of Puerto Rico.
            ``(4) United states.--The term `United States', when used 
        in a geographical sense, means all of the States.''.
            (3) Section 359g of the Agricultural Adjustment Act of 1938 
        (7 U.S.C. 1359gg) is amended--
                    (A) by striking ``359f'' each place it appears and 
                inserting ``359f(c)'';
                    (B) in the first sentence of subsection (b), by 
                striking ``3 consecutive'' and inserting ``5 
                consecutive''; and
                    (C) in subsection (c), by inserting ``or adjusted'' 
                after ``share established''.
            (4) Section 359j of the Agricultural Adjustment Act of 1938 
        (7 U.S.C. 1359jj) is amended by striking subsection (c).

                           CHAPTER 3--PEANUTS

SEC. 151. PEANUT PROGRAM.

    (a) In General.--Subtitle D of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7251 et seq.) is amended by adding at 
the end the following:

                          ``CHAPTER 3--PEANUTS

``SEC. 158A. DEFINITIONS.

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

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

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

``SEC. 158C. DIRECT PAYMENTS FOR PEANUTS.

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

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

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

``SEC. 158E. PRODUCER AGREEMENTS.

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

``SEC. 158F. PLANTING FLEXIBILITY.

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

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

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

``SEC. 158H. QUALITY IMPROVEMENT.

    ``(a) Official Inspection.--
            ``(1) Mandatory inspection.--All peanuts placed under a 
        marketing assistance loan under section 158G shall be 
        officially inspected and graded by a Federal or State 
        inspector.
            ``(2) Optional inspection.--Peanuts not placed under a 
        marketing assistance loan may be graded at the option of the 
        peanut producers on a farm.
    ``(b) Termination of Peanut Administrative Committee.--The Peanut 
Administrative Committee established under Marketing Agreement No. 
1436, which regulates the quality of domestically produced peanuts 
under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted 
with amendments by the Agricultural Marketing Agreement Act of 1937, is 
terminated.
    ``(c) Establishment of Peanut Standards Board.--
            ``(1) In general.--The Secretary shall establish a Peanut 
        Standards Board for the purpose of assisting in the 
        establishment of quality standards with respect to peanuts.
            ``(2) Composition.--The Secretary shall appoint members to 
        the Board that, to the maximum extent practicable, reflect all 
        regions and segments of the peanut industry.
            ``(3) Duties.--The Board shall assist the Secretary in 
        establishing quality standards for peanuts.
    ``(d) Crops.--This section shall apply beginning with the 2002 crop 
of peanuts.''.
    (b) Conforming Amendments.--
            (1) 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''.
            (2) Section 155 of the Federal Agriculture Improvement and 
        Reform Act of 1996 (7 U.S.C. 7271) is repealed.

SEC. 152. TERMINATION OF MARKETING QUOTAS FOR PEANUTS AND COMPENSATION 
              TO PEANUT QUOTA HOLDERS.

    (a) Repeal of Marketing Quotas for Peanuts.--Effective beginning 
with the 2002 crop of peanuts, part VI of subtitle B of title III of 
the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357 et seq.) is 
repealed.
    (b) Compensation of Quota Holders.--
            (1) Definitions.--In this subsection:
                    (A) Peanut quota holder.--
                            (i) In general.--The term ``peanut quota 
                        holder'' means a person or entity that owns a 
                        farm that--
                                    (I) held a peanut quota established 
                                for the farm for the 2001 crop of 
                                peanuts under part VI of subtitle B of 
                                title III of the Agricultural 
                                Adjustment Act of 1938 (7 U.S.C. 1357 
                                et seq.) (as in effect before the 
                                amendment made by subsection (a));
                                    (II) if there was not such a quota 
                                established for the farm for the 2001 
                                crop of peanuts, would be eligible to 
                                have such a quota established for the 
                                farm for the 2002 crop of peanuts, in 
                                the absence of the amendment made by 
                                subsection (a); or
                                    (III) is otherwise a farm that was 
                                eligible for such a quota as of the 
                                effective date of the amendments made 
                                by this section.
                            (ii) Seed or experimental purposes.--The 
                        Secretary shall apply the definition of 
                        ``peanut quota holder'' without regard to 
                        temporary leases, transfers, or quotas for seed 
                        or experimental purposes.
                    (B) Secretary.--The term ``Secretary'' means the 
                Secretary of Agriculture.
            (2) Contracts.--The Secretary shall offer to enter into a 
        contract with peanut quota holders for the purpose of providing 
        compensation for the lost value of quota as a result of the 
        repeal of the marketing quota program for peanuts under the 
        amendment made by subsection (a).
            (3) Payment period.--Under a contract, the Secretary shall 
        make payments to an eligible peanut quota holder for each of 
        fiscal years 2002 through 2006.
            (4) Time for payment.--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.
            (5) Payment amount.--The amount of the payment for a fiscal 
        year to a peanut quota holder under a contract shall be equal 
        to the product obtained by multiplying--
                    (A) $0.10 per pound; by
                    (B) the actual farm poundage quota (excluding any 
                quantity for seed and experimental peanuts) established 
                for the farm of a peanut quota holder under section 
                358-1(b) of the Agricultural Adjustment Act of 1938 (7 
                U.S.C. 1358-1(b)) (as in effect prior to the amendment 
                made by subsection (a)) for the 2001 marketing year.
            (6) Assignment of payments.--
                    (A) In general.--The provisions of section 8(g) of 
                the Soil Conservation and Domestic Allotment Act (16 
                U.S.C. 590h(g)), relating to assignment of payments, 
                shall apply to the payments made to peanut quota 
                holders under the contracts.
                    (B) Notice.--The peanut quota holder 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 
                subsection.
    (c) Conforming Amendments.--
            (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,''.
    (d) Crops.--This section and the amendments made by this section 
apply beginning with the 2002 crop of peanuts.

                       Subtitle D--Administration

SEC. 161. ADJUSTMENT AUTHORITY RELATED TO URUGUAY ROUND COMPLIANCE.

    Section 161 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7281) is amended by adding at the end the following:
    ``(e) Adjustment Authority Related to Uruguay Round Compliance.--If 
the Secretary determines that expenditures under subtitles A through D 
that are subject to the total allowable domestic support levels under 
the Uruguay Round Agreements (as defined in section 2 of the Uruguay 
Round Agreements Act (19 U.S.C. 3501)), as in effect on the date of 
enactment of this subsection, will exceed the allowable levels for any 
applicable reporting period, the Secretary may make adjustments in the 
amount of the expenditures to ensure that the expenditures do not 
exceed, but are not less than, the allowable levels.''.

SEC. 162. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

    Section 171 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7301) is amended--
            (1) by striking ``2002'' each place it appears and 
        inserting ``2006''; and
            (2) in subsection (a)(1)--
                    (A) by striking subparagraph (E); and
                    (B) by redesignating subparagraphs (F) through (I) 
                as subparagraphs (E) through (H), respectively.

SEC. 163. COMMODITY PURCHASES.

    Section 191 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7331 et seq.) is amended to read as follows:

``SEC. 191. COMMODITY PURCHASES.

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

SEC. 164. HARD WHITE WHEAT INCENTIVE PAYMENTS.

    Section 193 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 1508) is amended to read as follows:

``SEC. 193. HARD WHITE WHEAT INCENTIVE PAYMENTS.

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

SEC. 165. PAYMENT LIMITATIONS.

    Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) is 
amended by striking paragraphs (1) through (4) and inserting the 
following:
            ``(1) Limitation on direct and counter-cyclical payments.--
        The total amount of direct payments and counter-cyclical 
        payments to a person during any fiscal year may not exceed 
        $100,000, with a separate limitation for--
                    ``(A) all contract commodities; and
                    ``(B) peanuts.
            ``(2) Limitation on marketing loan gains and loan 
        deficiency payments.--The total amount of the payments 
        specified in paragraph (3) that a person shall be entitled to 
        receive under title I of the Federal Agriculture Improvement 
        and Reform Act of 1996 (7 U.S.C. 7201 et seq.) for 1 or more 
        loan commodities during any crop year may not exceed $150,000, 
        with a separate limitation for--
                    ``(A) all contract commodities;
                    ``(B) wool and mohair;
                    ``(C) honey; and
                    ``(D) peanuts.
            ``(3) Description of payments subject to limitation.--The 
        payments referred to in paragraph (2) are the following:
                    ``(A) Any gain realized by a producer from repaying 
                a marketing assistance loan under section 131 or 
                158G(a) of the Federal Agriculture Improvement and 
                Reform Act of 1996 for a crop of any loan commodity or 
                peanuts, respectively, at a lower level than the 
                original loan rate established for the loan commodity 
                or peanuts under section 132 or 158G(d) of that Act, 
                respectively.
                    ``(B) Any loan deficiency payment received for a 
                loan commodity or peanuts under section 135 or 158G(e) 
                of that Act, respectively.
            ``(4) Definitions.--In paragraphs (1) through (3):
                    ``(A) Contract commodity.--The term `contract 
                commodity' has the meaning given the term in section 
                102 of the Federal Agriculture Improvement and Reform 
                Act of 1996 (7 U.S.C. 7202).
                    ``(B) Counter-cyclical payment.--The term `counter-
                cyclical payment'' means a payment made under section 
                114 or 158D of that Act.
                    ``(C) Direct payment.--The term `direct payment' 
                means a payment made under section 113 or 158C of that 
                Act.
                    ``(D) Loan commodity.--The term `loan commodity' 
                has the meaning given the term in section 102 of that 
                Act.''.

                         TITLE II--CONSERVATION

                   Subtitle A--Conservation Security

SEC. 201. CONSERVATION SECURITY PROGRAM.

    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. DEFINITIONS.

    ``In this subchapter:
            ``(1) Base payment.--The term `base payment' means the 
        amount paid to an producer under a conservation security 
        contract that is equal to the total of the amounts described in 
        clauses (i) and (ii) of subparagraphs (C), (D), or (E) of 
        section 1238C(b)(1), as appropriate.
            ``(2) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning provided under section 
        343(a) of the Consolidated Farm and Rural Development Act (7 
        U.S.C. 1999(a)).
            ``(3) Bonus amount.--The term `bonus amount' means the 
        amount paid to a producer under a conservation security 
        contract that is equal to the total of the amounts described in 
        clauses (iii) and (iv) of subparagraph (C), and of clause (iii) 
        of subparagraph (D) or (E), of section 1238C(b)(1), as 
        appropriate.
            ``(4) Conservation practice.--The term `conservation 
        practice' means a land-based farming technique that--
                    ``(A) requires planning, implementation, 
                management, and maintenance; and
                    ``(B) promotes 1 or more of the purposes described 
                in section 1238A(a).
            ``(5) Conservation security contract.--The term 
        `conservation security contract' means a contract described in 
        section 1238A(e).
            ``(6) Conservation security plan.--The term `conservation 
        security plan' means a plan described in section 1238A(c).
            ``(7) Conservation security program.--The term 
        `conservation security program' means the program established 
        under section 1238A(a).
            ``(8) Continuous signup.--The term `continuous signup', 
        with respect to land, means land enrolled in a program 
        described in section 1231(b)(6)(A) on which conservation 
        practices are carried out.
            ``(9) Indian tribe.--The term `Indian tribe' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            ``(10) Nutrient management.--The term `nutrient management' 
        means management of the quantity, source, placement, form, and 
        timing of the land application of nutrients and other additions 
        to soil on land enrolled in the conservation security program--
                    ``(A) to achieve or maintain adequate soil 
                fertility for agricultural production;
                    ``(B) to minimize the potential for loss of 
                environmental quality, including soil, water, fish and 
                wildlife habitat, and air and water quality; or
                    ``(C) to reduce energy consumption.
            ``(11) Producer.--The term `producer' has the meaning given 
        the term in section 102 of the Agricultural Market Transition 
        Act (7 U.S.C. 7202).
            ``(12) Resource of concern.--The term `resource of concern' 
        means a conservation priority of a State and locality under 
        section 1238A(c)(3).
            ``(13) Resource-conserving crop.--The term `resource-
        conserving crop' means--
                    ``(A) a perennial grass;
                    ``(B) a legume grown for use as--
                            ``(i) forage;
                            ``(ii) seed for planting; or
                            ``(iii) green manure;
                    ``(C) a legume-grass mixture;
                    ``(D) a small grain grown in combination with a 
                grass or legume, whether interseeded or planted in 
                succession; and
                    ``(E) such other plantings, including trees and 
                annual grasses, as the Secretary considers appropriate 
                for a particular area.
            ``(14) Resource-conserving crop rotation.--The term 
        `resource-conserving crop rotation' means a crop rotation 
        that--
                    ``(A) includes at least 1 resource-conserving crop;
                    ``(B) reduces erosion;
                    ``(C) improves soil fertility and tilth; and
                    ``(D) interrupts pest cycles.
            ``(15) Resource management system.--The term `resource 
        management system' means a system of conservation practices and 
        management relating to land or water use that is designed to 
        prevent resource degradation and permit sustained use of land 
        and water, as defined in accordance with the technical guide of 
        the Natural Resources Conservation Service.
            ``(16) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting through the Natural Resources 
        Conservation Service.
            ``(17) Tier i conservation practice.--The term `Tier I 
        conservation practice' means a conservation practice described 
        in section 1238A(d)(4)(A)(ii).
            ``(18) Tier i conservation security contract.--The term 
        `Tier I conservation security contract' means a contract 
        described in section 1238A(d)(4)(A).
            ``(19) Tier ii conservation practice.--The term `Tier II 
        conservation practice' means a conservation practice described 
        in section 1238A(d)(4)(B)(ii).
            ``(20) Tier ii conservation security contract.--The term 
        `Tier II conservation security contract' means a contract 
        described in section 1238A(d)(4)(B).
            ``(21) Tier iii conservation practice.--The term `Tier III 
        conservation practice' means a conservation practice described 
        in section 1238A(d)(4)(C)(ii).
            ``(22) Tier iii conservation security contract.--The term 
        `Tier III conservation security contract' means a contract 
        described in section 1238A(d)(4)(C).

``SEC. 1238A. CONSERVATION SECURITY PROGRAM.

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

``SEC. 1238B. DUTIES OF PRODUCERS.

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

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

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

SEC. 202. FUNDING.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is 
amended by adding at the end the following:
    ``(c) Conservation Security Program.--Of the funds of the Commodity 
Credit Corporation, the Corporation shall make available for each of 
fiscal years 2002 through 2006 such sums as are necessary to carry out 
subchapter A of chapter 2 (including the provision of technical 
assistance).''.

SEC. 203. 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 designate special projects, as 
        recommended by the State Conservationist, after consultation 
        with the State technical committee, to enhance technical and 
        financial assistance provided to owners, operators, and 
        producers to address environmental issues affected by 
        agricultural production with respect to--
                    ``(A) meeting the purposes of--
                            ``(i) the Federal Water Pollution Control 
                        Act (33 U.S.C. 1251 et seq.) or comparable 
                        State laws in impaired or threatened 
                        watersheds;
                            ``(ii) the Safe Drinking Water Act (42 
                        U.S.C. 300f et seq.) or comparable State laws 
                        in watersheds providing water for drinking 
                        water supplies; or
                            ``(iii) the Clean Air Act (42 U.S.C. 7401 
                        et seq.) or comparable State laws; or
                    ``(B) watersheds of special significance or other 
                geographic areas of environmental sensitivity, such as 
                wetland, including State or multi-State projects--
                            ``(i) to facilitate surface and ground 
                        water conservation;
                            ``(ii) to protect water quality;
                            ``(iii) to protect endangered or threatened 
                        species or habitat, such as conservation 
                        corridors;
                            ``(iv) to improve methods of irrigation;
                            ``(v) to convert acreage from irrigated 
                        production; or
                            ``(vi) to reduce nutrient loads of 
                        watersheds.''.
            ``(2) Incentives.--To realize the purposes of the special 
        projects under paragraph (1), the Secretary may provide 
        incentives to owners, operators, and producers participating in 
        the special projects to encourage partnerships and sharing of 
        technical and financial resources among owners, operators, and 
        producers and among owners, operators, and producers and 
        governmental and nongovernmental organizations.
            ``(3) Flexibility.--
                    ``(A) In general.--The Secretary may enter into 
                agreements with States (including State agencies and 
                units of local government) and nongovernmental 
                organizations to allow greater flexibility to adjust 
                the application of eligibility criteria, approved 
                practices, innovative conservation practices, and other 
                elements of the programs under this title to better 
                reflect unique local circumstances and purposes in a 
                manner that is consistent with--
                            ``(i) environmental enhancement and long-
                        term sustainability of the natural resource 
                        base; and
                            ``(ii) the purposes of this title.
                    ``(B) Plan.--Each party to an agreement under 
                subparagraph (A) shall submit to the Secretary, for 
                approval by the Secretary, a special project area or 
                priority area program plan for each program to be 
                carried out by the party that includes--
                            ``(i) a description of the proposed 
                        adjustments to program implementation 
                        (including a description of how those 
                        adjustments will accelerate the achievement of 
                        environmental benefits);
                            ``(ii) an analysis of the contribution 
                        those adjustments will make to the 
                        effectiveness of programs in achieving the 
                        purposes of the special project or priority 
                        area program;
                            ``(iii) a timetable for reevaluating the 
                        need for or performance of the proposed 
                        adjustments;
                            ``(iv) a description of non-Federal 
                        programs and resources that will contribute to 
                        achieving the purposes of the special project 
                        or priority area program; and
                            ``(v) a plan for regular monitoring, 
                        evaluation, and reporting of progress toward 
                        the purposes of the special project or priority 
                        area program.
            ``(4) Funding for special projects.--The Secretary may 
        carry out special projects, the purposes of which are to 
        encourage--
                    ``(A) producers to cooperate in the installation 
                and maintenance of conservation systems that affect 
                multiple agricultural operations;
                    ``(B) the sharing of information and technical and 
                financial resources;
                    ``(C) cumulative environmental benefits across 
                operations of producers; and
                    ``(D) the development and demonstration of 
                innovative conservation methods.
            ``(5) Funding.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall use 5 percent of the funds made 
                available for each fiscal year under section 1241(b) to 
                carry out activities that are authorized under the 
                environmental quality incentives program established 
                under chapter 4 of subtitle D.
                    ``(B) Unused funding.--Any funds made available for 
                a fiscal year under subparagraph (A) that are not 
                obligated by June 1 of the fiscal year may be used to 
                carry out other activities under the environmental 
                quality incentives program during the fiscal year in 
                which the funding becomes available.''.

SEC. 204. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    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. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    ``(a) Good Faith Reliance.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, except as provided in paragraph (4), the Secretary shall 
        provide equitable relief to an owner, operator, or producer 
        that has entered into a contract under a conservation program 
        administered by the Secretary, and that is subsequently 
        determined to be in violation of the contract, if the owner, 
        operator, or producer, in attempting to comply with the terms 
        of the contract and enrollment requirements--
                    ``(A) took actions in good faith reliance on the 
                action or advice of an employee of the Secretary; and
                    ``(B) had no knowledge that the actions taken were 
                in violation of the contract.
            ``(2) Types of relief.--The Secretary shall--
                    ``(A) to the extent the Secretary determines that 
                an owner, operator, or producer has been injured by 
                good faith reliance described in paragraph (1), allow 
                the owner, operator, or producer--
                            ``(i) to retain payments received under the 
                        contract;
                            ``(ii) to continue to receive payments 
                        under the contract;
                            ``(iii) to keep all or part of the land 
                        covered by the contract enrolled in the 
                        applicable program;
                            ``(iv) to reenroll all or part of the land 
                        covered by the contract in the applicable 
                        program; or
                            ``(v) to receive any other equitable relief 
                        the Secretary considers appropriate; and
                    ``(B) require the owner, operator, or producer to 
                take such actions as are necessary to remedy any 
                failure to comply with the contract.
            ``(3) Relationship to other law.--The authority to provide 
        relief under this subsection shall be in addition to any other 
        authority provided in this or any other Act.
            ``(4) Exceptions.--This section shall not apply to--
                    ``(A) any pattern of conduct in which an employee 
                of the Secretary takes actions or provides advice with 
                respect to an owner, operator, or producer that the 
                employee and the owner, operator, or producer know are 
                inconsistent with applicable law (including 
                regulations); or
                    ``(B) an owner, operator, or producer takes any 
                action, independent of any advice or authorization 
                provided by an employee of the Secretary, that the 
                owner, operator, or producer knows or should have known 
                to be inconsistent with applicable law (including 
                regulations).
            ``(5) Applicability of relief.--Relief under this section 
        shall be available for contracts in effect on or after the date 
        of enactment of this section.
    ``(b) Education, Outreach, Monitoring, and Evaluation.--In carrying 
out any conservation program administered by the Secretary, the 
Secretary--
            ``(1) shall provide education, outreach, training, 
        monitoring, evaluation, technical assistance, and related 
        services to agricultural producers (socially disadvantaged 
        agricultural producers, beginning farmers and ranchers, Indian 
        tribes (as those terms are defined in section 1238), and 
        limited resource agricultural producers);
            ``(2) may enter into contracts with States (including State 
        agencies and units of local government), private nonprofit, 
        community-based organizations, and educational institutions 
        with demonstrated experience in providing the services 
        described in paragraph (1), to provide those services; and
            ``(3) shall use such sums as are necessary from funds of 
        the Commodity Credit Corporation to carry out activities 
        described in paragraphs (1) and (2).
    ``(c) Beginning Farmers and Ranchers and Indian Tribes.--In 
carrying out any conservation program administered by the Secretary, 
the Secretary may provide to beginning farmers and ranchers and Indian 
tribes (as those terms are defined in section 1238) and limited 
resource agricultural producers incentives to participate in the 
conservation program to--
            ``(1) foster new farming opportunities; and
            ``(2) enhance environmental stewardship over the long term.
    ``(d) Program Evaluation.--The Secretary shall maintain data 
concerning conservation security plans, conservation practices planned 
or implemented, environmental outcomes, economic costs, and related 
matters under conservation programs administered by the Secretary.
    ``(e) Mediation and Informal Hearings.--If the Secretary makes a 
decision under a conservation program administered by the Secretary 
that is adverse to an owner, operator, or producer, at the request of 
the owner, operator, or producer, the Secretary shall provide the 
owner, operator, or producer with mediation services or an informal 
hearing on the decision.
    ``(f) Technical Assistance.--
            ``(1) In general.--Under any conservation program 
        administered by the Secretary, subject to paragraph (2), 
        technical assistance provided by persons certified under 
        paragraph (3) (including farmers and ranchers) may include--
                    ``(A) conservation planning;
                    ``(B) design, installation, and certification of 
                conservation practices;
                    ``(C) conservation training for producers; and
                    ``(D) such other conservation activities as the 
                Secretary determines to be appropriate.
            ``(2) Outside assistance.--
                    ``(A) In general.--The Secretary may contract 
                directly with qualified persons not employed by the 
                Department to provide conservation technical 
                assistance.
                    ``(B) Payment by secretary.--Subject to 
                subparagraph (C), the Secretary may provide a payment 
                to an owner, operator, or producer enrolled in a 
                conservation program administered by the Secretary if 
                the owner, operator, or producer elects to obtain 
                technical assistance from a person certified to provide 
                technical assistance under this subsection.
                    ``(C) Nonprivate providers.--In determining whether 
                to provide a payment under subparagraph (B) to a 
                nonprivate provider, the Secretary shall provide a 
                payment if the provision of the payment would result in 
                an increase in the total amount of technical assistance 
                available to producers, as determined by the Secretary.
            ``(3) Certification of providers of technical assistance.--
                    ``(A) Procedures.--
                            ``(i) In general.--The Secretary shall 
                        establish procedures for certifying persons not 
                        employed by the Department to provide technical 
                        assistance in planning, designing, or 
                        certifying activities to participate in any 
                        conservation program administered by the 
                        Secretary to agricultural producers and 
                        landowners participating, or seeking to 
                        participate, in conservation programs 
                        administered by the Secretary.
                            ``(ii) Non-federal assistance.--The 
                        Secretary may request the services of, and 
                        enter into a cooperative agreement with, a 
                        State water quality agency, State fish and 
                        wildlife agency, State forestry agency, or any 
                        other governmental or nongovernmental 
                        organization or person considered appropriate 
                        to assist in providing the technical assistance 
                        necessary to develop and implement conservation 
                        plans under this title.
                    ``(B) Standards.--The Secretary shall establish 
                standards for the conduct of--
                            ``(i) the certification process conducted 
                        by the Secretary; and
                            ``(ii) periodic recertification by the 
                        Secretary of providers.
                    ``(C) Certification required.--
                            ``(i) In general.--A provider may not 
                        provide to any producer technical assistance 
                        described in paragraph (3)(A)(i) unless the 
                        provider is certified by the Secretary.
                            ``(ii) Waiver.--The Secretary may exempt a 
                        provider from any requirement of this 
                        subparagraph if the Secretary determines that 
                        the provider has been certified or recertified 
                        to provide technical assistance through a 
                        program the standards of which meet or exceed 
                        standards established by the Secretary under 
                        subparagraph (B).
                    ``(D) Fee.--
                            ``(i) In general.--In exchange for 
                        certification or recertification, a provider 
                        shall pay a fee to the Secretary in an amount 
                        determined by the Secretary.
                            ``(ii) Account.--A fee paid to the 
                        Secretary under clause (i) shall be--
                                    ``(I) credited to the account in 
                                the Treasury that incurs costs relating 
                                to implementing this subsection; and
                                    ``(II) made available to the 
                                Secretary for use for conservation 
                                programs administered by the Secretary, 
                                without further appropriation, until 
                                expended.
                            ``(iii) Waiver.--The Secretary may waive 
                        any requirement of any provider to pay a fee 
                        under this subparagraph if the provider 
                        qualifies for a waiver under subparagraph 
                        (C)(ii).
                    ``(E) Other requirements.--The Secretary may 
                establish such other requirements as the Secretary 
                determines are necessary to carry out this subsection.
    ``(g) Privacy of Personal Information Relating to Natural Resources 
Conservation Programs.--
            ``(1) Information received for technical and financial 
        assistance.--
                    ``(A) In general.--In accordance with section 1770 
                and section 552(b)(3) of title 5, United States Code, 
                except as provided in subparagraph (C) and paragraph 
                (3), information described in subparagraph (B)--
                            ``(i) shall not be considered to be public 
                        information; and
                            ``(ii) shall not be released to any person 
                        or Federal, State, local agency or Indian tribe 
                        (as defined in section 1238) outside the 
                        Department of Agriculture.
                    ``(B) Information.--The information referred to in 
                subparagraph (A) is information--
                            ``(i) provided to, or developed by, the 
                        Secretary (including a contractor of the 
                        Secretary) for the purpose of providing 
                        technical or financial assistance to an owner, 
                        operator, or producer with respect to any 
                        natural resources conservation program 
                        administered by the Natural Resources 
                        Conservation Service or the Farm Service 
                        Agency; and
                            ``(ii) that is proprietary to the 
                        agricultural operation or land that is a part 
                        of an agricultural operation of the owner, 
                        operator, or producer.
                    ``(C) Exception.--Information compiled by the 
                Secretary, such as a list of owners, operators, or 
                producers that have received payments from the 
                Secretary and the amounts received, shall be--
                            ``(i) considered to be public information; 
                        and
                            ``(ii) may be released to any--
                                    ``(I) person;
                                    ``(II) Indian tribe (as defined in 
                                section 1238); or
                                    ``(III) Federal, State, local 
                                agency outside the Department of 
                                Agriculture.
            ``(2) Inventory, monitoring, and site specific 
        information.--Except as provided in paragraph (3) and 
        notwithstanding any other provision of law, in order to 
        maintain the personal privacy, confidentiality, and cooperation 
        of owners, operators, and producers, and to maintain the 
        integrity of sample sites, the specific geographic locations of 
        data gathering sites of the National Resources Inventory of the 
        Department of Agriculture, and the information generated by 
        those sites--
                    ``(A) shall not be considered to be public 
                information; and
                    ``(B) shall not be released to any person or 
                Federal, State, local, or tribal agency outside the 
                Department.
            ``(3) Exceptions.--
                    ``(A) release and disclosure for enforcement.--The 
                Secretary may release or disclose to the Attorney 
                General information covered by paragraph (1) or (2) to 
                the extent necessary to enforce the natural resources 
                conservation programs referred to in paragraph (1).
                    ``(B) Disclosure to cooperating persons and 
                agencies.--
                            ``(i) In general.--The Secretary may 
                        release or disclose information covered by 
                        paragraph (1) or (2) to a person or Federal, 
                        State, local, or tribal agency working in 
                        cooperation with the Secretary in providing 
                        technical and financial assistance described in 
                        paragraph (1) or collecting information from 
                        National Resources Inventory data gathering 
                        sites.
                            ``(ii) Use of information.--The person or 
                        Federal, State, local, or tribal agency that 
                        receives information described in clause (i) 
                        may release the information only for the 
                        purpose of assisting the Secretary--
                                    ``(I) in providing the requested 
                                technical or financial assistance; or
                                    ``(II) in collecting information 
                                from National Resources Inventory data 
                                gathering sites.
                    ``(C) Statistical and aggregate information.--
                Information covered by paragraph (1) or (2) may be 
                disclosed to the public if the information has been 
                transformed into a statistical or aggregate form that 
                does not allow the identification of any--
                            ``(i) individual owner, operator, or 
                        producer; or
                            ``(ii) specific data gathering site.
                    ``(D) Consent of owner, operator, or producer.--
                            ``(i) In general.--An owner, operator, or 
                        producer may consent to the disclosure of 
                        information described in paragraph (1) or (2).
                            ``(ii) Condition of other programs.--The 
                        participation of the owner, operator, or 
                        producer in, and the receipt of any benefit by 
                        the owner, operator, or producer under, this 
                        title or any other program administered by the 
                        Secretary may not be conditioned on the owner, 
                        operator, or producer providing consent under 
                        this paragraph.
            ``(4) Violations; penalties.--Section 1770(c) shall apply 
        with respect to the release of information collected in any 
        manner or for any purpose prohibited by this subsection.
    ``(h) Indian Tribes.--In carrying out any conservation program 
administered by the Secretary on land under the jurisdiction of an 
Indian tribe (as defined in section 1238), the Secretary shall 
cooperate with the tribal government of the Indian tribe to ensure, to 
the maximum extent practicable, that the program is administered in a 
fair and equitable manner.''.

SEC. 205. REFORM AND ASSESSMENT OF CONSERVATION PROGRAMS.

    (a) In General.--The Secretary of Agriculture shall develop a plan 
for--
            (1) coordinating conservation programs administered by the 
        Secretary that are targeted at agricultural land to--
                    (A) eliminate redundancy; and
                    (B) improve delivery;
            (2) to the maximum extent practicable--
                    (A) designing forms that are applicable to all 
                conservation programs administered by the Secretary;
                    (B) reducing and consolidating paperwork 
                requirements for the programs;
                    (C) developing universal classification systems for 
                all information obtained on the forms that can be used 
                by other agencies of the Department of Agriculture;
                    (D) ensuring that the information and 
                classification systems developed under this paragraph 
                can be shared with other agencies of the Department 
                through computer technologies used by agencies; and
                    (E) developing 1 format for a conservation plan 
                that can be applied to all conservation programs 
                targeted at agricultural land; and
            (3) to the maximum extent practicable, improving the 
        delivery of conservation programs to Indian tribes (as defined 
        in section 4 of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450b)), including programs for the 
        delivery of conservation programs to Indian tribes under plans 
        carried out in conjunction with the Secretary of the Interior.
    (b) Report.--Not 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 the plan developed under subsection (a), including any 
recommendations for implementation of the plan.
    (c) National Conservation Plan.--
            (1) In general.--Not 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 plan and estimated budget for 
        implementing the appraisal of the soil, water, and related 
        resources of the United States contained in the national 
        conservation program under sections 5 and 6 of the Soil and 
        Water Resources Conservation Act of 1977 (16 U.S.C. 2004, 2005) 
        as the primary vehicle for managing conservation on 
        agricultural land in the United States.
            (2) Report on implementation.--Not later than April 30, 
        2005, the Secretary shall submit to the Committee on 
        Agriculture of the House of Representatives and Committee on 
        Agriculture, Nutrition, and Forestry of the Senate a report 
        that--
                    (A) describes the status of the implementation of 
                the plan described in paragraph (1);
                    (B) contains an evaluation of the scope, quality, 
                and outcomes of the conservation practices carried out 
                under the plan; and
                    (C) makes recommendations for achieving specific 
                and quantifiable improvements for the purposes of 
                programs covered by the plan.

SEC. 206. CONSERVATION SECURITY PROGRAM REGULATIONS.

    Beginning on the date of enactment of this Act, the Secretary of 
Agriculture may promulgate regulations and carry out other actions 
relating to the implementation of the conservation security program 
under subchapter A of chapter 2 of subtitle D of title XII of the Food 
Security Act of 1985 (as added by section 201).

SEC. 207. 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 in the chapter heading by 
striking ``ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM'' and 
inserting ``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''; and
            (3) 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:

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

                     Subtitle B--Program Extensions

SEC. 211. COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM.

    (a) In General.--Section 1230(a)(1) of the Food Security Act of 
1985 (16 U.S.C. 3830(a)(1)) is amended by striking ``2002'' and 
inserting ``2006''.
    (b) Priority.--Section 1230(c) of the Food Security Act of 1985 (16 
U.S.C. 3830(c)) is amended by adding at the end the following:
            ``(4) Priority.--In designating conservation priority areas 
        under paragraph (1), the Secretary shall give priority to areas 
        in which designated land would facilitate the most rapid 
        completion of projects that--
                    ``(A) are ongoing as of the date of the 
                application; and
                    ``(B) meet the purposes of a program established 
                under this title.''.
    (c) Funding.--Section 1241(a) of the Food Security Act of 1985 (16 
U.S.C. 3841(a)) is amended--
            (1) by striking ``2002'' and inserting ``2006'';
            (2) by inserting ``(including the provision of technical 
        assistance)'' after ``the programs''; and
            (3) in paragraph (2), by striking ``subchapter C'' and 
        inserting ``subchapters C and D''.

SEC. 212. CONSERVATION RESERVE PROGRAM.

    (a) Reauthorization.--
            (1) In general.--Section 1231 of the Food Security Act of 
        1985 (16 U.S.C. 3831) is amended in subsections (a), (b)(3), 
        and (d), by striking ``2002'' each place it appears and 
        inserting ``2006'.
            (2) Duties of owners and operators.--Section 1232(c) of the 
        Food Security Act of 1985 (16 U.S.C. 3832(c)) is amended by 
        striking ``2002'' and inserting ``2006''.
    (b) Conservation Priority Areas.--
            (1) Eligibility.--Section 1231(b) of the Food Security Act 
        of 1985 (16 U.S.C. 3831(b)) is amended--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) highly erodible cropland that--
                    ``(A)(i) if permitted to remain untreated could 
                substantially reduce the production capability for 
                future generations; or
                    ``(ii) cannot be farmed in accordance with a 
                conservation plan that complies with the requirements 
                of subtitle B; and
                    ``(B) the Secretary determines had a cropping 
                history or was considered to be planted for 3 of the 6 
                years preceding the date of enactment of the 
                Agriculture, Conservation, and Rural Enhancement Act of 
                2001 (except for land enrolled in the conservation 
                reserve program as of that date);''; and
                    (B) by adding at the end the following:
            ``(5) the portion of land in a field not enrolled in the 
        conservation reserve in a case in which more than 50 percent of 
        the land in the field is enrolled as a buffer under a program 
        described in section 1234(i)(1), if the land is enrolled as 
        part of the buffer; and
            ``(6) land (including land that is not cropland) enrolled 
        through continuous signup--
                    ``(A) to establish conservation buffers as part of 
                the program described in a notice issued on March 24, 
                1998 (63 Fed. Reg. 14109) or a successor program; or
                    ``(B) into the conservation reserve enhancement 
                program described in a notice issued on May 27, 1998 
                (63 Fed. Reg. 28965) or a successor program.''.
            (2) CRP priority areas.--Section 1231(f) of the Food 
        Security Act of 1985 (16 U.S.C. 3831(f)) is amended by adding 
        at the end the following:
            ``(5) Priority.--In designating conservation priority areas 
        under paragraph (1), the Secretary shall give priority to areas 
        in which designated land would facilitate the most rapid 
        completion of projects that--
                    ``(A) are ongoing as of the date of the 
                application; and
                    ``(B) meet the purposes of the program established 
                under this subchapter.''.
    (c) Maximum Enrollment.--Section 1231(d) of the Food Security Act 
of 1985 (16 U.S.C. 3831(d)) is amended by striking ``36,400,000'' and 
inserting ``40,000,000''.
    (d) Duration of Contracts; Hardwood Trees.--Section 1231(e)(2) of 
the Food Security Act of 1985 (16 U.S.C. 3831(e)(2)) is amended--
            (1) by striking ``In the'' and inserting the following:
                    ``(A) In general.--In the'';
            (2) by striking ``The Secretary'' and inserting the 
        following:
                    ``(B) Existing hardwood tree contracts.--The 
                Secretary''; and
            ``(3) by adding at the end the following:
                    ``(C) Extension of hardwood tree contracts.--
                            ``(i) In general.--In the case of land 
                        devoted to hardwood trees under a contract 
                        entered into under this subchapter before the 
                        date of enactment of this subparagraph, the 
                        Secretary may extend the contract for a term of 
                        not more than 15 years.
                            ``(ii) Rental payments.--The amount of a 
                        rental payment for a contract extended under 
                        clause (i)--
                                    ``(I) shall be determined by the 
                                Secretary; but
                                    ``(II) shall not exceed 50 percent 
                                of the rental payment that was 
                                applicable to the contract before the 
                                contract was extended.''.
    (e) Pilot Program for Enrollment of Wetland and Buffer Acreage in 
Conservation Reserve.--Section 1231(h) of the Food Security Act of 1985 
(16 U.S.C. 3831(h)) is amended--
            (1) in the subsection heading, by striking ``Pilot'';
            (2) in paragraph (1), by striking ``During the 2001 and 
        2002 calendar years, the Secretary shall carry out a pilot 
        program'' and inserting ``During the 2002 through 2006 calendar 
        years, the Secretary shall carry out a program'';
            (3) in paragraph (2), by striking ``pilot''; and
            (4) in paragraph (3)(D)(i), by striking ``5 contiguous 
        acres.'' and inserting ``10 contiguous acres, of which--
                                    ``(I) not more than 5 acres shall 
                                be eligible for payment; and
                                    ``(II) all acres (including acres 
                                that are ineligible for payment) shall 
                                be covered by the conservation 
                                contract.''.
    (f) Vegetative Cover; Haying and Grazing; Wind Turbines.--Section 
1232(a) of the Food Security Act of 1985 (16 U.S.C. 3832(a)) is 
amended--
            (1) in paragraph (4)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) in subparagraph (B), by inserting ``and'' after 
                the semicolon at the end; and
                    (C) by adding at the end the following:
                    ``(C) in the case of marginal pasture land, an 
                owner or operator shall not be required to plant trees 
                if native prairie grass may be retained or restored;'';
            (2) in paragraph (7)--
                    (A) by striking ``except that the Secretary--'' and 
                inserting ``except that--'';
                    (B) in subparagraph (A)--
                            (i) by striking ``(A) may'' and inserting 
                        ``(A) the Secretary may''; and
                            (ii) by striking ``and'' at the end;
                    (C) in subparagraph (B)--
                            (i) by striking ``(B) shall'' and inserting 
                        ``(B) the Secretary shall''; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon;
                    (D) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (E) by adding at the end the following:
                    ``(D) for maintenance purposes, the Secretary shall 
                permit harvesting or grazing or other commercial uses 
                of forage, in a manner that is consistent with the 
                purposes of this subchapter and a conservation plan 
                approved by the Secretary, on acres enrolled--
                            ``(i) to establish conservation buffers as 
                        part of the program described in a notice 
                        issued on March 24, 1998 (63 Fed. Reg. 14109) 
                        or a successor program; and
                            ``(ii) into the conservation reserve 
                        enhancement program described in a notice 
                        issued on May 27, 1998 (63 Fed. Reg. 28965) or 
                        a successor program.'';
            (3) in paragraph (9), by striking ``and'' at the end;
            (4) by redesignating paragraph (10) as paragraph (11); and
            (5) by inserting after paragraph (9) the following:
            ``(10) with respect to any contract entered into after the 
        date of enactment of the Agriculture, Conservation, and Rural 
        Enhancement Act of 2001--
                    ``(A) not to produce a crop for the duration of the 
                contract on any other highly erodible land that the 
                owner or operator owns unless the highly erodible 
                land--
                            ``(i) has a history of being used to 
                        produce a crop other than a forage crop, as 
                        determined by the Secretary; or
                            ``(ii) is being used as a homestead or 
                        building site at the time of purchase; and
                    ``(B) on a violation of a contract described in 
                subparagraph (A), to be subject to the requirements of 
                paragraph (5); and''.
    (g) Wind Turbines.--Section 1232 of the Food Security Act of 1985 
(8906 U.S.C. 3832) is amended by adding at the end the following:
    ``(f) Wind Turbines.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        may permit an owner or operator of land that is enrolled in the 
        conservation reserve program, but that is not enrolled under 
        continuous signup (as described in section 1231(b)(6)), to 
        install wind turbines on the land.
            ``(2) Number; location.--The Secretary shall determine the 
        number and location of wind turbines that may be installed on a 
        tract of land under paragraph (1), taking into account--
                    ``(A) the location, size, and other physical 
                characteristics of the land;
                    ``(B) the extent to which the land contains 
                wildlife and wildlife habitat; and
                    ``(C) the purposes of the conservation reserve 
                program.
            ``(3) Payment limitation.--Notwithstanding the amount of a 
        rental payment limited by section 1234(c)(2) and specified in a 
        contract entered into under this chapter, the Secretary shall 
        reduce the amount of the rental payment paid to an owner or 
        operator of land on which 1 or more wind turbines are installed 
        under this subsection by an amount determined by the Secretary 
        to be commensurate with the value of the reduction of benefit 
        gained by enrollment of the land in the conservation reserve 
        program.''.
    (h) Additional Eligible Practices.--Section 1234 of the Food 
Security Act of 1985 (16 U.S.C. 3834) is amended by adding at the end 
the following:
    ``(i) Payments.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall provide signing and practice incentive payments under the 
        conservation reserve program to owners and operators that 
        implement a practice under--
                    ``(A) the program to establish conservation buffers 
                described in a notice issued on March 24, 1998 (63 Fed. 
                Reg. 14109) or a successor program; or
                    ``(B) the conservation reserve enhancement program 
                described in a notice issued on May 27, 1998 (63 Fed. 
                Reg. 28965) or a successor program.
            ``(2) Other practices.--The Secretary shall administer 
        paragraph (1) in a manner that does not reduce the amount of 
        payments made by the Secretary for other practices under the 
        conservation reserve program.''.
    (i) County Participation.--Section 1243(b)(1) of the Food Security 
Act of 1985 (16 U.S.C. 3843(b)(1)) is amended by striking ``The 
Secretary'' and inserting ``Except for land enrolled under continuous 
signup (as described in section 1231(b)(6)), the Secretary''.
    (j) Study on Economic Effects.--Not later than 270 days after the 
date of enactment of this Act, the Secretary of Agriculture shall 
submit to the Committee on Agriculture of the House of Representatives 
and the Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report that describes the economic effects on rural communities 
resulting from the conservation reserve program established under 
subchapter B of chapter 1 of subtitle D of title XII of the Food 
Security Act of 1985 (16 U.S.C. 3831 et seq.).

SEC. 213. WETLANDS RESERVE PROGRAM.

    (a) Technical Assistance.--Section 1237(a) of the Food Security Act 
of 1985 (16 U.S.C. 3837(a)) is amended by inserting ``(including the 
provision of technical assistance)'' before the period at the end.
    (b) Maximum Enrollment.--Section 1237(b) of the Food Security Act 
of 1985 (16 U.S.C. 3837(b)) is amended by striking paragraph (1) and 
inserting the following:
            ``(1) Maximum enrollment.--
                    ``(A) In general.--The total number of acres 
                enrolled in the wetlands reserve program shall not 
                exceed 2,225,000 acres, of which, to the maximum extent 
                practicable subject to subparagraph (B), the Secretary 
                shall enroll 250,000 acres in each calendar year.
                    ``(B) Wetlands reserve enhancement acreage.--Of the 
                acreage enrolled under subparagraph (A) for a calendar 
                year, not more than 25,000 acres may be enrolled in the 
                wetlands reserve enhancement program described in 
                subsection (h).''.
    (c) Reauthorization.--Section 1237(c) of the Food Security Act of 
1985 (16 U.S.C. 3837(c)) is amended by striking ``2002'' and inserting 
``2006''.
    (d) Wetlands Reserve Enhancement Program.--Section 1237 of the Food 
Security Act of 1985 (16 U.S.C. 3837) is amended by adding at the end 
the following:
    ``(h) Wetlands Reserve Enhancement Program.--
            ``(1) In general.--The Secretary may enter into cooperative 
        agreements with State or local governments, and with private 
        organizations, to develop, on land that is enrolled, or is 
        eligible to be enrolled, in the wetland reserve established 
        under this subchapter, wetland restoration activities in 
        watershed areas.
            ``(2) Purpose.--The purpose of the agreements shall be to 
        address critical environmental issues.''.
    (e) Monitoring and Maintenance.--Section 1237C(a)(2) of the Food 
Security Act of 1985 (16 U.S.C. 3837c(a)(2)) is amended by striking 
``assistance'' and inserting ``assistance (including monitoring and 
maintenance)''.

SEC. 214. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

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

``SEC. 1240. PURPOSES.

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

``SEC. 1240A. DEFINITIONS.

    ``In this chapter:
            ``(1) Beginning farmer or rancher.--The term `beginning 
        farmer or rancher' has the meaning provided under section 
        343(a) of the Consolidated Farm and Rural Development Act (7 
        U.S.C. 1999(a)).
            ``(2) Comprehensive nutrient management.--
                    ``(A) In general.--The term `comprehensive nutrient 
                management' means any combination of structural 
                practices, land management practices, and management 
                activities associated with crop or livestock production 
                described in subparagraph (B) that collectively ensure 
                that the purposes of crop or livestock production and 
                preservation of natural resources (especially the 
                preservation and enhancement of water quality) are 
                compatible.
                    ``(B) Elements.--For the purpose of subparagraph 
                (A), structural practices, land management practices, 
                and management activities associated with livestock 
                production are--
                            ``(i) manure and wastewater handling and 
                        storage;
                            ``(ii) manure processing, composting, or 
                        digestion for purposes of capturing emissions, 
                        concentrating nutrients for transport, 
                        destroying pathogens or otherwise improving the 
                        environmental safety and beneficial uses of 
                        manure;
                            ``(iii) land treatment practices;
                            ``(iv) nutrient management;
                            ``(v) recordkeeping;
                            ``(vi) feed management; and
                            ``(vii) other waste utilization options.
                    ``(C) Practice.--
                            ``(i) Planning.--The development of a 
                        comprehensive nutrient management plan shall be 
                        a practice that is eligible for incentive 
                        payments and technical assistance under this 
                        chapter.
                            ``(ii) Implementation.--The implementation 
                        of a comprehensive nutrient plan shall be 
                        accomplished through structural and land 
                        management practices identified in the plan.
            ``(3) Eligible land.--The term `eligible land' means 
        agricultural land (including cropland, grassland, rangeland, 
        pasture, private nonindustrial forest land, and other land on 
        which crops or livestock are produced), including agricultural 
        land that the Secretary determines poses a serious threat to 
        soil, water, or related resources by reason of the soil types, 
        terrain, climatic, soil, topographic, flood, or saline 
        characteristics, or other factors or natural hazards.
            ``(4) Innovative technology.--The term `innovative 
        technology' means a new conservation technology that, as 
        determined by the Secretary--
                    ``(A) maximizes environmental benefits;
                    ``(B) complements agricultural production; and
                    ``(C) may be adopted in a practical manner.
            ``(5) Land management practice.--The term `land management 
        practice' means a site-specific nutrient or manure management, 
        integrated pest management, irrigation management, tillage or 
        residue management, grazing management, air quality management, 
        or other land management practice carried out on eligible land 
        that the Secretary determines is needed to protect from 
        degradation, in the most cost-effective manner, water, soil, or 
        related resources.
            ``(6) Livestock.--The term `livestock' means dairy cattle, 
        beef cattle, laying hens, broilers, turkeys, swine, sheep, and 
        such other animals as are determined by the Secretary.
            ``(7) Maximize environmental benefits per dollar 
        expended.--
                    ``(A) In general.--The term `maximize environmental 
                benefits per dollar expended' means to maximize 
                environmental benefits to the extent the Secretary 
                determines is practicable and appropriate, taking into 
                account the amount of funding made available to carry 
                out this chapter.
                    ``(B) Limitation.--The term `maximize environmental 
                benefits per dollar expended' does not require the 
                Secretary--
                            ``(i) to require the adoption of the least 
                        cost practice or technical assistance; or
                            ``(ii) to require the development of a plan 
                        under section 1240E as part of an application 
                        for payments or technical assistance.
            ``(8) Practice.--The term `practice' means 1 or more 
        structural practices, land management practices, and 
        comprehensive nutrient management planning practices.
            ``(9) Producer.--The term `producer' has the meaning given 
        the term in section 102 of the Agricultural Market Transition 
        Act (7 U.S.C. 7202).
            ``(10) Structural practice.--The term `structural practice' 
        means--
                    ``(A) the establishment on eligible land of a site-
                specific animal waste management facility, terrace, 
                grassed waterway, contour grass strip, filterstrip, 
                tailwater pit, permanent wildlife habitat, constructed 
                wetland, or other structural practice that the 
                Secretary determines is needed to protect, in the most 
                cost-effective manner, water, soil, or related 
                resources from degradation; and
                    ``(B) the capping of abandoned wells on eligible 
                land.

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

    ``(a) Establishment.--
            ``(1) In general.--During each of the 2002 through 2006 
        fiscal years, the Secretary shall provide technical assistance, 
        cost-share payments, and incentive payments to producers, that 
        enter into contracts with the Secretary, through an 
        environmental quality incentives program in accordance with 
        this chapter.
            ``(2) Eligible practices.--
                    ``(A) Structural practices.--A producer that 
                implements a structural practice shall be eligible for 
                any combination of technical assistance, cost-share 
                payments, and education.
                    ``(B) Land management practices.--A producer that 
                performs a land management practice shall be eligible 
                for any combination of technical assistance, incentive 
                payments, and education.
                    ``(C) Comprehensive nutrient management planning.--
                A producer that develops a comprehensive nutrient 
                management plan shall be eligible for any combination 
                of technical assistance, incentive payments, and 
                education.
            ``(3) Education.--The Secretary may provide conservation 
        education at national, State, and local levels consistent with 
        the purposes of the environmental quality incentives program 
        to--
                    ``(A) any producer that is eligible for assistance 
                under this chapter; or
                    ``(B) any producer that is engaged in the 
                production of an agricultural commodity.
    ``(b) Application and Term.--With respect to practices implemented 
under this chapter--
            ``(1) a contract between a producer and the Secretary may--
                    ``(A) apply to 1 or more structural practices, land 
                management practices, and comprehensive nutrient 
                management planning practices; and
                    ``(B) have a term of not less than 3, nor more than 
                10, years, as determined appropriate by the Secretary, 
                depending on the practice or practices that are the 
                basis of the contract; and
            ``(2) a producer may not enter into more than 1 contract 
        for structural practices involving livestock nutrient 
        management during the period of fiscal years 2002 through 2006.
    ``(c) Application and Evaluation.--
            ``(1) In general.--The Secretary shall establish an 
        application and evaluation process for awarding technical 
        assistance, cost-share payments, and incentive payments to a 
        producer in exchange for the performance of 1 or more practices 
        that maximizes environmental benefits per dollar expended.
            ``(2) Comparable environmental value.--
                    ``(A) In general.--The Secretary shall establish a 
                process for selecting applications for technical 
                assistance, cost-share payments, and incentive payments 
                when there are numerous applications for assistance for 
                practices that would provide substantially the same 
                level of environmental benefits.
                    ``(B) Criteria.--The process under subparagraph (A) 
                shall be based on--
                            ``(i) a reasonable estimate of the 
                        projected cost of the proposals described in 
                        the applications; and
                            ``(ii) the priorities established under 
                        this chapter and other factors that maximize 
                        environmental benefits per dollar expended.
            ``(3) Consent of owner.--If the producer making an offer to 
        implement a structural practice is a tenant of the land 
        involved in agricultural production, for the offer to be 
        acceptable, the producer shall obtain the consent of the owner 
        of the land with respect to the offer.
            ``(4) Bidding down.--If the Secretary determines that the 
        environmental values of 2 or more applications for technical 
        assistance, cost-share payments, or incentive payments are 
        comparable, the Secretary shall not assign a higher priority to 
        the application only because it would present the least cost to 
        the program established under this chapter.
    ``(d) Cost-Share Payments.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        cost-share payments provided to a producer proposing to 
        implement 1 or more practices under the program shall be not 
        more than 75 percent of the cost of the practice, as determined 
        by the Secretary.
            ``(2) Exceptions.--
                    ``(A) Limited resource and beginning farmers.--The 
                Secretary may increase the amount provided to a 
                producer under paragraph (1) to not more than 90 
                percent if the producer is a limited resource or 
                beginning farmer or rancher, as determined by the 
                Secretary.
                    ``(B) Cost-share assistance from other sources.--
                Any cost-share payments received by a producer from a 
                State or private organization or person for the 
                implementation of 1 or more practices shall be in 
                addition to the payments provided to the producer under 
                paragraph (1).
            ``(3) Other payments.--A producer shall not be eligible for 
        cost-share payments for practices on eligible land under this 
        chapter if the producer receives cost-share payments or other 
        benefits for the same practice on the same land under chapter 1 
        and this chapter.
    ``(e) Incentive Payments.--The Secretary shall make incentive 
payments in an amount and at a rate determined by the Secretary to be 
necessary to encourage a producer to perform 1 or more practices.
    ``(f) Technical Assistance.--
            ``(1) In general.--The Secretary shall allocate funding 
        under this chapter for the provision of technical assistance 
        according to the purpose and projected cost for which the 
        technical assistance is provided for a fiscal year.
            ``(2) Amount.--The allocated amount may vary according to--
                    ``(A) the type of expertise required;
                    ``(B) the quantity of time involved; and
                    ``(C) other factors as determined appropriate by 
                the Secretary.
            ``(3) Limitation.--Funding for technical assistance under 
        this chapter shall not exceed the projected cost to the 
        Secretary of the technical assistance provided for a fiscal 
        year.
            ``(4) Other authorities.--The receipt of technical 
        assistance under this chapter shall not affect the eligibility 
        of the producer to receive technical assistance under other 
        authorities of law available to the Secretary.
            ``(5) Incentive payments for technical assistance.--
                    ``(A) In general.--A producer that is eligible to 
                receive technical assistance for a practice involving 
                the development of a comprehensive nutrient management 
                plan may obtain an incentive payment that can be used 
                to obtain technical assistance associated with the 
                development of any component of the comprehensive 
                nutrient management plan.
                    ``(B) Purpose.--The purpose of the payment shall be 
                to provide a producer the option of obtaining technical 
                assistance for developing any component of a 
                comprehensive nutrient management plan from a private 
                person.
                    ``(C) Payment.--The incentive payment shall be--
                            ``(i) in addition to cost-share or 
                        incentive payments that a producer would 
                        otherwise receive for structural practices and 
                        land management practices;
                            ``(ii) used only to procure technical 
                        assistance from a private person that is 
                        necessary to develop any component of a 
                        comprehensive nutrient management plan; and
                            ``(iii) in an amount determined appropriate 
                        by the Secretary, taking into account--
                                    ``(I) the extent and complexity of 
                                the technical assistance provided;
                                    ``(II) the costs that the Secretary 
                                would have incurred in providing the 
                                technical assistance; and
                                    ``(III) the costs incurred by the 
                                private provider in providing the 
                                technical assistance.
                    ``(D) Eligible practices.--The Secretary may 
                determine, on a case by case basis, whether the 
                development of a comprehensive nutrient management plan 
                is eligible for an incentive payment under this 
                paragraph.
                    ``(E) Certification by secretary.--
                            ``(i) In general.--Only private persons 
                        that have been certified by the Secretary under 
                        section 1244(f)(3) shall be eligible to provide 
                        technical assistance under this subsection.
                            ``(ii) Quality assurance.--The Secretary 
                        shall ensure that certified private providers 
                        are capable of providing technical assistance 
                        regarding comprehensive nutrient management in 
                        a manner that meets the specifications and 
                        guidelines of the Secretary and that meets the 
                        needs of producers under the environmental 
                        quality incentives program.
                    ``(F) Advance payment.--On the determination of the 
                Secretary that the proposed comprehensive nutrient 
                management of a producer is eligible for an incentive 
                payment, the producer may receive a partial advance of 
                the incentive payment in order to procure the services 
                of a certified private provider.
                    ``(G) Final payment.--The final installment of the 
                incentive payment shall be payable to a producer on 
                presentation to the Secretary of documentation that is 
                satisfactory to the Secretary and that demonstrates--
                            ``(i) completion of the technical 
                        assistance; and
                            ``(ii) the actual cost of the technical 
                        assistance.
    ``(g) Modification or Termination of Contracts.--
            ``(1) Voluntary modification or termination.--The Secretary 
        may modify or terminate a contract entered into with a producer 
        under this chapter if--
                    ``(A) the producer agrees to the modification or 
                termination; and
                    ``(B) the Secretary determines that the 
                modification or termination is in the public interest.
            ``(2) Involuntary termination.--The Secretary may terminate 
        a contract under this chapter if the Secretary determines that 
        the producer violated the contract.

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

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

``SEC. 1240D. DUTIES OF PRODUCERS.

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

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

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

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

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

``SEC. 1240G. LIMITATION ON PAYMENTS.

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

``SEC. 1240H. CONSERVATION INNOVATION GRANTS.

    ``(a) In General.--From funds made available to carry out this 
chapter, for each of the 2003 through 2006 fiscal years, the Secretary 
shall use not more than $100,000,000 for each fiscal year to pay the 
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 environmental quality incentives program.
    ``(b) Use.--The Secretary may award grants under this section to 
governmental and nongovernmental organizations and persons, on a 
competitive basis, to carry out projects that--
            ``(1) involve producers that are eligible for payments or 
        technical assistance under this chapter;
            ``(2) implement innovative projects, such as--
                    ``(A) market systems for pollution reduction;
                    ``(B) promoting agricultural best management 
                practices, including the storing of carbon in the soil; 
                and
                    ``(C) protection of source water for human 
                consumption; and
            ``(3) leverage funds made available to carry out this 
        chapter with matching funds provided by State and local 
        governments and private organizations to promote environmental 
        enhancement and protection in conjunction with agricultural 
        production.
    ``(c) Cost Share.--The amount of a grant made under this section to 
carry out a project shall not exceed 50 percent of the cost of the 
project.
    ``(d) Unused Funding.--Any funds made available for a fiscal year 
under this section that are not obligated by June 1 of the fiscal year 
may be used to carry out other activities under this chapter during the 
fiscal year in which the funding becomes available.''.
    (b) Funding.--Section 1241 of the Food Security Act of 1985 (16 
U.S.C. 3841) is amended by striking subsection (b) and inserting the 
following:
    ``(b) Environmental Quality Incentives Program.--
            ``(1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall make available to provide 
        technical assistance, cost-share payments, incentive payments, 
        bonus payments, grants, and education under the environmental 
        quality incentives program under chapter 4 of subtitle D--
                    ``(A) $500,000,000 for fiscal year 2002;
                    ``(B) $1,050,000,000 for fiscal year 2003;
                    ``(C) $1,200,000,000 for fiscal year 2004;
                    ``(D) $1,200,000,000 for fiscal year 2005; and
                    ``(E) $1,250,000,000 for fiscal year 2006.
            ``(2) Obligation of funds.--
                    ``(A) In general.--If a contract under the 
                environmental quality incentives program under chapter 
                4 of subtitle D is terminated, or work under the 
                contract is completed, prior to the end of the term of 
                the contract and funds obligated for the contract have 
                not been expended, the unexpended funds may be used to 
                carry out any other contract under the program during 
                the same fiscal year in which the original contract was 
                terminated.
                    ``(B) Additional uses of funds.--Funding for 
                contracts that terminate under the program administered 
                under subchapter B of chapter 1 may be transferred to, 
                and used to carry out, the program under chapter 4 of 
                subtitle D.''.
    (c) Reimbursements.--Section 11 of the Commodity Credit Corporation 
Charter Act (15 U.S.C. 714i) is amended in the last sentence by 
inserting ``but excluding transfers and allotments for conservation 
technical assistance'' after ``activities''.

SEC. 215. 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:

      ``Subtitle H--Resource Conservation and Development Program

``SEC. 1528. DEFINITIONS.

    ``In this subtitle:
            ``(1) Area plan.--The term `area plan' means a resource 
        conservation and use plan that is developed by a council for a 
        designated area of a State or States through a planning process 
        and 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;
                            ``(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
                    ``(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 by 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
                    ``(D) providing services of an agency of the 
                Department of Agriculture to assist councils in 
                developing and carrying out area plans.

``SEC. 1529. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

    ``The 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. 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. 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. 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 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.
    ``(e) Use of Other Entities and Persons.--A council may use another 
person or entity to assist in developing and implementing an area plan 
and otherwise carrying out this subtitle.

``SEC. 1533. 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. 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 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.

``SEC. 1535. 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. 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. 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. 216. WILDLIFE HABITAT INCENTIVE PROGRAM.

    (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. WILDLIFE HABITAT INCENTIVE PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Endangered species.--The term `endangered species' 
        has the meaning given the term in section 3 of the Endangered 
        Species Act of 1973 (16 U.S.C. 1532).
            ``(2) Program.--The term `program' means the wildlife 
        habitat incentive program established under subsection (b).
            ``(3) Threatened species.--The term `threatened species' 
        has the meaning given the term in section 3 of the Endangered 
        Species Act of 1973 (16 U.S.C. 1532).
    ``(b) Establishment.--In consultation with the State technical 
committees established under section 1261 of the Food Security Act of 
1985 (16 U.S.C. 3861), the Secretary shall establish the wildlife 
habitat incentive program.
    ``(c) Cost-Share Payments.--
            ``(1) In general.--Under the program, the Secretary shall 
        make cost-share payments to owners of eligible land to develop 
        wildlife habitat approved by the Secretary.
            ``(2) Endangered and threatened species.--Of the funds made 
        available to carry out this subsection, the Secretary shall use 
        at least 15 percent to make cost-share payments to carry out 
        projects and activities relating to endangered species and 
        threatened species.
    ``(d) Pilot Program for Essential Plant and Animal Habitat.--Under 
the program, the Secretary may establish procedures to use not more 
than 15 percent of funds made available to acquire and enroll eligible 
land for periods of at least 15 years to protect essential (as 
determined by the Secretary) plant and animal habitat.
    ``(e) Funding.--Of the funds of the Commodity Credit Corporation, 
the Secretary shall use to carry out this section (including the 
provision of technical assistance)--
            ``(1) $50,000,000 for fiscal year 2002;
            ``(2) $100,000,000 for each of fiscal years 2003 and 2004; 
        and
            ``(3) $125,000,000 for each of fiscal years 2005 and 2006.

``SEC. 1240N. WATERSHED RISK REDUCTION.

    ``(a) In General.--The Secretary, acting through the Natural 
Resources Conservation Service (referred to in this section as the 
`Secretary'), in cooperation with landowners and land users, may carry 
out such projects and activities (including the purchase of floodplain 
easements for runoff retardation and soil erosion prevention) as the 
Secretary determines to be necessary to safeguard lives and property 
from floods, drought, and the products of erosion on any watershed in 
any case in which fire, flood, or any other natural occurrence has 
caused, is causing, or may cause a sudden impairment of that watershed.
    ``(b) Priority.--In carrying out this section, the Secretary shall 
give priority to any project or activity described in subsection (a) 
that is carried out on a floodplain adjacent to a major river, as 
determined by the Secretary.
    ``(c) Prohibition on Duplicative Funds.--No project or activity 
under subsection (a) that is carried out using funds made available 
under this section may be carried out using funds made available under 
any Federal disaster relief program administered by the Secretary 
relating to floods.
    ``(d) Funding.--There is authorized to be appropriated to carry out 
this section $15,000,000 for each of fiscal years 2002 through 2006.

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

    ``(a) In General.--The Secretary, in consultation with the Great 
Lakes Commission created by Article IV of the Great Lakes Basin Compact 
(82 Stat. 415) and in cooperation with the Administrator of the 
Environmental Protection Agency and the Secretary of the Army, may 
carry out the Great Lakes basin program for soil erosion and sediment 
control (referred to in this section as the `program').
    ``(b) Assistance.--In carrying out the program, the Secretary may--
            ``(1) provide project demonstration grants, provide 
        technical assistance, and carry out information and education 
        programs to improve water quality in the Great Lakes basin by 
        reducing soil erosion and improving sediment control; and
            ``(2) provide a priority for projects and activities that 
        directly reduce soil erosion or improve sediment control.
    ``(c) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2002 through 2006.

``SEC. 1240P. CONSERVATION OF PRIVATE GRAZING LAND.

    ``(a) Findings.--Congress finds that--
            ``(1) private grazing land constitutes nearly \1/2\ of the 
        non-Federal land of the United States and is basic to the 
        environmental, social, and economic stability of rural 
        communities;
            ``(2) private grazing land contains a complex set of 
        interactions among soil, water, air, plants, and animals;
            ``(3) grazing land constitutes the single largest watershed 
        cover type in the United States and contributes significantly 
        to the quality and quantity of water available for all of the 
        many uses of the land;
            ``(4) private grazing land constitutes the most extensive 
        wildlife habitat in the United States;
            ``(5) private grazing land can provide opportunities for 
        improved nutrient management from land application of animal 
        manures and other by-product nutrient resources;
            ``(6) owners and managers of private grazing land need to 
        continue to recognize conservation problems when the problems 
        arise and receive sound technical assistance to improve or 
        conserve grazing land resources to meet ecological and economic 
        demands;
            ``(7) new science and technology must continually be made 
        available in a practical manner so owners and managers of 
        private grazing land may make informed decisions concerning 
        vital grazing land resources;
            ``(8) agencies of the Department with private grazing land 
        responsibilities are the agencies that have the expertise and 
        experience to provide technical assistance, education, and 
        research to owners and managers of private grazing land for the 
        long-term productivity and ecological health of grazing land;
            ``(9) although competing demands on private grazing land 
        resources are greater than ever before, assistance to private 
        owners and managers of private grazing land is limited and does 
        not meet the demand and basic need for adequately sustaining or 
        enhancing the private grazing land resources; and
            ``(10) private grazing land can be enhanced to provide many 
        benefits to all citizens of the United States through voluntary 
        cooperation among owners and managers of the land, local 
        conservation districts, and the agencies of the Department 
        responsible for providing assistance to owners and managers of 
        land and to conservation districts.
    ``(b) Purpose.--The purpose of this section is to authorize the 
Secretary to provide a coordinated technical, educational, and related 
assistance program to conserve and enhance private grazing land 
resources and provide related benefits to all citizens of the United 
States by--
            ``(1) establishing a coordinated and cooperative Federal, 
        State, and local grazing conservation program for management of 
        private grazing land;
            ``(2) strengthening technical, educational, and related 
        assistance programs that provide assistance to owners and 
        managers of private grazing land;
            ``(3) conserving and improving wildlife habitat on private 
        grazing land;
            ``(4) conserving and improving fish habitat and aquatic 
        systems through grazing land conservation treatment;
            ``(5) protecting and improving water quality;
            ``(6) improving the dependability and consistency of water 
        supplies;
            ``(7) identifying and managing weed, noxious weed, and 
        brush encroachment problems on private grazing land; and
            ``(8) integrating conservation planning and management 
        decisions by owners and managers of private grazing land, on a 
        voluntary basis.
    ``(c) Definition of Private Grazing Land.--In this section, the 
term `private grazing land land' means rangeland, pastureland, grazed 
forest land, hay land, and any other non-federally owned land that is--
            ``(1) private;
            ``(2) owned by a State; or
            ``(3) under the jurisdiction of an Indian tribe .
    ``(d) Private Grazing Land Conservation Assistance.--
            ``(1) In general.--Subject to the availability of 
        appropriations for this section, the Secretary shall establish 
        a voluntary program to provide technical, educational, and 
        related assistance to owners and managers of private grazing 
        land and public agencies, through local conservation districts, 
        to enable the landowners, managers, and public agencies to 
        voluntarily carry out activities that are consistent with this 
        section, including--
                    ``(A) maintaining and improving private grazing 
                land and the multiple values and uses that depend on 
                private grazing land;
                    ``(B) implementing grazing land management 
                technologies;
                    ``(C) managing resources on private grazing land, 
                including--
                            ``(i) planning, managing, and treating 
                        private grazing land resources;
                            ``(ii) ensuring the long-term 
                        sustainability of private grazing land 
                        resources;
                            ``(iii) harvesting, processing, and 
                        marketing private grazing land resources; and
                            ``(iv) identifying and managing weed, 
                        noxious weed, and brush encroachment problems;
                    ``(D) protecting and improving the quality and 
                quantity of water yields from private grazing land;
                    ``(E) maintaining and improving wildlife and fish 
                habitat on private grazing land;
                    ``(F) enhancing recreational opportunities on 
                private grazing land;
                    ``(G) maintaining and improving the aesthetic 
                character of private grazing land; and
                    ``(H) identifying the opportunities and encouraging 
                the diversification of private grazing land 
                enterprises.
            ``(2) Program elements.--
                    ``(A) Funding.--Funds may be used to carry out this 
                section only if the funds are provided through a 
                specific line-item in the annual appropriations for the 
                Natural Resources Conservation Service.
                    ``(B) Technical assistance and education.--
                Personnel of the Department of Agriculture trained in 
                pasture and range management shall be made available 
                under the program to deliver and coordinate technical 
                assistance and education to owners and managers of 
                private grazing land, at the request of the owners and 
                managers.
    ``(e) Grazing Technical Assistance Self-Help.--
            ``(1) Findings.--Congress finds that--
                    ``(A) there is a severe lack of technical 
                assistance for farmers and ranchers that graze 
                livestock;
                    ``(B) Federal budgetary constraints preclude any 
                significant expansion, and may force a reduction of, 
                levels of technical support; and
                    ``(C) farmers and ranchers have a history of 
                cooperatively working together to address common needs 
                in the promotion of their products and in the drainage 
                of wet areas through drainage districts.
            ``(2) Establishment of grazing demonstration districts.--In 
        accordance with paragraph (2), the Secretary may establish 2 
        grazing management demonstration districts on the 
        recommendation of the grazing land conservation initiative 
        steering committee.
            ``(3) Procedure.--
                    ``(A) Proposal.--Within a reasonable time after the 
                submission of a proposal of an organization of farmers 
                or ranchers engaged in grazing in a district, subject 
                to subparagraphs (B) through (F), the Secretary 
                establish a grazing management district in accordance 
                with the proposal.
                    ``(B) Funding.--The terms and conditions of the 
                funding and operation of the grazing management 
                district shall be proposed by the farmers and ranchers 
                engaged in grazing in the district.
                    ``(C) Approval.--The Secretary shall approve the 
                proposal if the Secretary determines that the 
                proposal--
                            ``(i) is reasonable;
                            ``(ii) will promote sound grazing 
                        practices; and
                            ``(iii) contains provisions similar to the 
                        provisions contained in the beef promotion and 
                        research order issued under section 4 of the 
                        Beef Research and Information Act (7 U.S.C. 
                        2903) in effect on April 4, 1996.
                    ``(D) Area included.--The area proposed to be 
                included in a grazing management district shall be 
                determined by the Secretary on the basis of the 
                proposal submitted by farmers or ranchers under 
                subparagraph (A).
                    ``(E) Authorization.--The Secretary may use 
                authority under the Agricultural Adjustment Act (7 
                U.S.C. 601 et seq.), reenacted with amendments by the 
                Agricultural Marketing Agreement Act of 1937, to 
                operate, on a demonstration basis, a grazing management 
                district.
                    ``(F) Activities.--The activities of a grazing 
                management district shall be scientifically sound 
                activities, as determined by the Secretary in 
                consultation with a technical advisory committee 
                composed of farmers, ranchers, and technical experts.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $60,000,000 for each of fiscal 
years 2002 through 2006.''.
    (b) Conforming Amendment.--Section 386 of the Federal Agriculture 
Improvement and Reform Act of 1996 (16 U.S.C. 2005b) is repealed.

SEC. 217. FARMLAND PROTECTION PROGRAM.

    (a) In General.--Chapter 2 of the Food Security Act of 1985 (as 
added by section 201) is amended by adding at the end the following:

              ``Subchapter B--Farmland Protection Program

``SEC. 1238H. DEFINITIONS.

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

``SEC. 1238I. FARMLAND PROTECTION.

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

``SEC. 1238J. MARKET VIABILITY PROGRAM.

    ``For each year for which funds are made available to carry out 
this subchapter, the Secretary may use not more than $10,000,000 to 
provide matching market viability grants and technical assistance to 
farm and ranch operators that participate in the program.''.
    (b) Funding.--Section 1241 of the Food Security Act of 1985 (16 
U.S.C. 3841) (as amended by section 202) is amended by adding at the 
end the following:
    ``(d) Farmland Protection Program.--
            ``(1) In general.--Of the funds of the Commodity Credit 
        Corporation, the Secretary shall use to carry out subchapter B 
        of chapter 2 (including the provision of technical 
        assistance)--
                    ``(A) $150,000,000 for fiscal year 2002;
                    ``(B) $200,000,000 for each of fiscal years 2003 
                and 2004;
                    ``(C) $225,000,000 for fiscal year 2005; and
                    ``(D) $250,000,000 for fiscal year 2006.
            ``(2) Cost sharing.--
                    ``(A) Farmland protection.--
                            ``(i) In general.--The share of the cost of 
                        purchasing a conservation easement or other 
                        interest described in section 1238I(a) provided 
                        under this subsection shall not exceed 50 
                        percent.
                            ``(ii) State and local contributions.--In a 
                        case in which a State or local government 
                        purchases an easement under section 1238I(a), 
                        not more than 25 percent of the share of the 
                        cost of the easement contributed by the State 
                        or local government may be provided--
                                    ``(I) by a private landowner; or
                                    ``(II) in the form of in-kind goods 
                                or services.
                    ``(B) Market viability contributions.--As a 
                condition of receiving a grant under section 1238J(a), 
                a grantee shall provide funds in an amount equal to the 
                amount of the grant.''.
    (c) Conforming Amendment.--
            (1) In General.--Section 388 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (16 U.S.C. 3830 note) is 
        repealed.
            (2) Effect on contracts.--The amendment made by paragraph 
        (1) 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. 218. GRASSLAND RESERVE PROGRAM.

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

               ``Subchapter D--Grassland Reserve Program

``SEC. 1238N. GRASSLAND RESERVE PROGRAM.

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

``SEC. 1238O. EASEMENTS AND AGREEMENTS.

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

``SEC. 1238P. DUTIES OF SECRETARY.

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

SEC. 219. STATE TECHNICAL COMMITTEES.

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

                ``Subtitle G--State Technical Committees

``SEC. 1261. ESTABLISHMENT.

    ``(a) In General.--The Secretary shall establish in each State a 
technical committee to assist the Secretary in the technical 
considerations relating to implementation of any private land 
conservation program administered by the Secretary.
    ``(b) Standards.--Not later than 180 days after the date of 
enactment of the Agriculture, Conservation, and Rural Enhancement Act 
of 2001, the Secretary shall develop standards to be used by each State 
technical committee in the development of technical guidelines under 
section 1262(b) for the implementation of the conservation programs 
under this title.
    ``(c) Composition.--Each State technical committee established 
under subsection (a) shall be composed of professional resource 
managers that represent a variety of disciplines in the soil, water, 
wetland, forest, and wildlife sciences, including representatives from 
among--
            ``(1) the Natural Resources Conservation Service (a 
        representative of which shall serve as Chair of the Committee);
            ``(2) the Farm Service Agency;
            ``(3) the Forest Service;
            ``(4) the Extension Service;
            ``(5) the Fish and Wildlife Service;
            ``(6) such State departments and agencies as the Secretary 
        determines to be appropriate, including--
                    ``(A) a State fish and wildlife agency;
                    ``(B) a State forester or equivalent State 
                official;
                    ``(C) a State water resources agency;
                    ``(D) a State department of agriculture;
                    ``(E) a State soil conservation agency;
                    ``(F) a State association of soil and water 
                conservation districts; and
                    ``(G) land grant colleges and universities;
            ``(7) other individuals or agency personnel with expertise 
        in soil, water, wetland, and wildlife or forest management as 
        the Secretary determines to be appropriate;
            ``(8) agricultural producers with demonstrable conservation 
        expertise;
            ``(9) nonprofit organizations with demonstrable 
        conservation or forestry expertise;
            ``(10) persons knowledgeable about conservation or forestry 
        techniques; and
            ``(11) agribusinesses.

``SEC. 1262. RESPONSIBILITIES.

    ``(a) Information.--
            ``(1) Provision.--
                    ``(A) In general.--Each State technical committee 
                established under section 1261 shall meet regularly to 
                provide information, analyses, and recommendations to 
                the Secretary.
                    ``(B) Manner; form.--Information, analyses, and 
                recommendations described in subparagraph (A) shall--
                            ``(i) be provided in writing, in a manner 
                        that assists the Secretary in determining 
                        matters of fact, technical merit, or scientific 
                        question; and
                            ``(ii) reflect the best professional 
                        information and judgment of the committee.
            ``(2) Coordination.--The Secretary shall coordinate 
        activities conducted under this section with activities 
        conducted under section 1628 of the Food, Agriculture, 
        Conservation, and Trade Act of 1990 (7 U.S.C. 5831).
            ``(3) Public participation.--Each State technical committee 
        shall--
                    ``(A) provide public notice of, and permit public 
                attendance at, meetings considering issues of concern 
                related to any program under this title; and
                    ``(B) distribute meeting minutes to each person 
                attending a meeting described in subparagraph (A).
            ``(4) Communication.--Each State conservationist shall 
        communicate regularly with members of the State technical 
        committee concerning status of action on recommendations of the 
        committee.
    ``(b) Other Duties.--Each State technical committee shall provide 
assistance and offer recommendations with respect to the technical 
aspects of--
            ``(1) wetland protection, restoration, and mitigation 
        requirements;
            ``(2) criteria to be used in evaluating bids for enrollment 
        of environmentally-sensitive land in the conservation reserve 
        program established under subchapter B of chapter 1;
            ``(3) guidelines for haying or grazing and the control of 
        weeds to protect nesting wildlife on designated acreage 
        relating to--
                    ``(A) highly erodible land conservation under 
                subtitle B;
                    ``(B) wetland conservation under subtitle C; or
                    ``(C) other conservation requirements
            ``(4) addressing common weed and pest problems and programs 
        to control weeds and pests found on acreage enrolled in the 
        conservation reserve program;
            ``(5) guidelines for planting perennial cover for water 
        quality and wildlife habitat improvement on designated land;
            ``(6) establishing criteria and priorities for State 
        initiatives under the environmental quality incentives program 
        under chapter 4 of subtitle D;
            ``(7) establishing State and local conservation priorities 
        under the conservation security program under subchapter A of 
        chapter 2 of subtitle D;
            ``(8) establishing and maintaining natural resource 
        indicators and conservation program monitoring and evaluation 
        systems;
            ``(9) developing conservation program education and 
        outreach activities;
            ``(10) evaluating innovative practices and systems under 
        consideration for inclusion in the field office technical 
        guides; and
            ``(11) other matters, as determined to be appropriate by 
        the Secretary.
    ``(c) Authority.--
            ``(1) In general.--Each State technical committee 
        established under section 1261 shall--
                    ``(A) serve in an advisory capacity; and
                    ``(B) have no implementation or enforcement 
                authority.
            ``(2) Consideration by secretary.--In carrying out any 
        program under this title, the Secretary shall give strong 
        consideration to the recommendations of a State technical 
        committee (including factual, technical, or scientific findings 
        and recommendations relating to areas in which the State 
        technical committee bears responsibility).
    ``(d) FACA Requirements.--A State technical committee established 
under section 1261 shall be exempt from the Federal Advisory Committee 
Act (5 U.S.C. App.).
    ``(e) Advisory Subcommittees.--
            ``(1) In general.--Any State or local work group, task 
        force, or other advisory body authorized by any Federal law 
        (including a regulation) to advise the Secretary on issues that 
        are within the areas of responsibility of a State technical 
        committee established under section 1261 shall be considered to 
        be a subcommittee of the State technical committee.
            ``(2) Composition.--A person eligible to serve on a State 
        technical committee under section 1261(c) shall also be 
        eligible to serve on 1 or more subcommittees of a State 
        technical committee.
            ``(3) Local working groups.--A local working group shall be 
        considered to be a subcommittee of a State technical committee 
        established under section 1261.''.

SEC. 220. USE OF SYMBOLS, SLOGANS, AND LOGOS.

    Section 356 of the Federal Agriculture Improvement Act of 1996 (16 
U.S.C. 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 
        Department;''; and
            (2) in subsection (d), by adding at the end the following:
            ``(3) Use of symbols, slogans, and logos.--
                    ``(A) In general.--The Secretary may authorize the 
                Foundation to use, license, or transfer symbols, 
                slogans, and logos of the Department.
                    ``(B) Income.--
                            ``(i) In general.--All revenue received by 
                        the Foundation from the use, licensing, or 
                        transfer of symbols, slogans, and logos of the 
                        Department shall be transferred to the 
                        Secretary.
                            ``(ii) Conservation operations.--The 
                        Secretary shall transfer all revenue received 
                        under clause (i) to the account within the 
                        Natural Resources Conservation Service that is 
                        used to carry out conservation operations.''.

                            TITLE III--TRADE

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

SEC. 301. UNITED STATES POLICY.

    Section 2(2) of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1691(2)) is amended by inserting before the 
semicolon at the end the following: ``and conflict prevention''.

SEC. 302. 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 to assist development in 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) Certified Institutional Partners.--
            ``(1) In general.--The Administrator or the Secretary, as 
        applicable, shall promulgate regulations and issue guidelines 
        to permit private voluntary organizations and cooperatives to 
        be certified as institutional partners.
            ``(2) Requirements.--To become a certified institutional 
        partner, a private voluntary organization or cooperative shall 
        submit to the Administrator a certification of organizational 
        capacity that describes--
                    ``(A) the financial, programmatic, commodity 
                management, and auditing abilities and practices of the 
                organization or cooperative; and
                    ``(B) the capacity of the organization or 
                cooperative to carry out projects in particular 
                countries.
            ``(3) Multi-country proposals.--A certified institutional 
        partner shall be eligible to--
                    ``(A) submit a single proposal for 1 or more 
                countries that are the same as, or similar to, those 
                countries in which the certified institutional partner 
                has already demonstrated organizational capacity;
                    ``(B) receive expedited review and approval of the 
                proposal; and
                    ``(C) receive commodities and assistance under this 
                section for use in 1 or more countries.''.

SEC. 303. 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'';
            (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. 304. LEVELS OF ASSISTANCE.

    Section 204 of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1724) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``that for each 
                of fiscal years 1996 through 2002 is not less than 
                2,025,000 metric tons.'' and inserting ``that is not 
                less than--
                    ``(A) 2,100,000 metric tons for fiscal year 2002;
                    ``(B) 2,200,000 metric tons for fiscal year 2003;
                    ``(C) 2,300,000 metric tons for fiscal year 2004;
                    ``(D) 2,400,000 metric tons for fiscal year 2005; 
                and
                    ``(E) 2,500,000 metric tons for fiscal year 
                2006.''; and
                    (B) in paragraph (2), by striking ``1996 through 
                2002'' and inserting ``2002 through 2006''; and
            (2) in subsection (b)(1), by inserting ``(including crude 
        degummed soybean oil)'' after ``bagged commodities''.

SEC. 305. FOOD AID CONSULTATIVE GROUP.

    Section 205 of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1725) is amended--
            (1) in subsection (a), by inserting ``, policies, 
        guidelines,'' after ``regulations'';
            (2) in subsection (d), by inserting ``policies,'' after 
        ``regulations,'' each place it appears; and
            (3) in subsection (f), by striking ``2002'' and inserting 
        ``2006''.

SEC. 306. MAXIMUM LEVEL OF EXPENDITURES.

    Section 206(a) of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1726(a)) is amended by striking 
``$1,000,000,000'' and inserting ``$2,000,000,000''.

SEC. 307. 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 later than 120 days after the date of 
        submission to the Administrator of a proposal submitted by an 
        eligible organization under this title, the Administrator shall 
        determine whether to accept the proposal.'';
            (2) in subsection (b), by striking ``guideline'' each place 
        it appears and inserting ``guideline or policy determination'';
            (3) in subsection (d), by striking ``a United States field 
        mission'' and inserting ``an eligible organization with an 
        approved program under this title''; and
            (4) by adding at the end the following:
    ``(e) Timely Approval.--
            ``(1) In general.--The Administrator shall finalize program 
        agreements and resource requests for programs under this 
        section before the beginning of each fiscal year.
            ``(2) Report.--Not later than December 1 of each year, the 
        Administrator shall submit to the Committee on Agriculture and 
        the Committee on International Relations of the House of 
        Representatives and the Committee on Agriculture, Nutrition, 
        and Forestry of the Senate a report that contains--
                    ``(A) a list of programs, countries, and 
                commodities approved to date for assistance under this 
                section; and
                    ``(B) a statement of the total amount of funds 
                approved to date for transportation and administrative 
                costs under this section.
    ``(f) Direct Delivery.--In addition to practices in effect on the 
date of enactment of this subsection, the Secretary may approve an 
agreement that provides for direct delivery of agricultural commodities 
to milling or processing facilities more than 50 percent of the 
interest in which is owned by United States citizens in foreign 
countries, with the proceeds of transactions transferred in cash to 
eligible organizations described in section 202(d) to carry out 
approved projects.''.

SEC. 308. 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 2006''.

SEC. 309. SALE PROCEDURE.

    Section 403 of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1733) is amended by adding at the end the 
following:
    ``(l) Sale Procedure.--
            ``(1) In general.--Subsection (b) shall apply to sales of 
        commodities in recipient countries to generate proceeds to 
        carry out projects under--
                    ``(A) section 416(b) of the Agricultural Act of 
                1949 (7 U.S.C. 1431(b)); and
                    ``(B) title VIII of the Agricultural Trade Act of 
                1978.
            ``(2) Currencies.--Sales of commodities described in 
        paragraph (1) may be in United States dollars or in a different 
        currency.
            ``(3) Sale price.--Sales of commodities described in 
        paragraph (1) shall be made at a reasonable market price in the 
        economy where the commodity is to be sold, as determined by the 
        Secretary or the Administrator, as appropriate.''.

SEC. 310. 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 2006''.

SEC. 311. 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 ``2006''.

SEC. 312. MICRONUTRIENT FORTIFICATION PROGRAM.

    Section 415 of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1736g-2) is amended--
            (1) in subsection (a)--
                    (A) in the first sentence, by striking ``a 
                micronutrient fortification pilot program'' and 
                inserting ``micronutrient fortification programs''; and
                    (B) in the second sentence--
                            (i) by striking ``the program'' and 
                        inserting ``a program'';
                            (ii) in paragraph (1), by striking ``and'' 
                        at the end;
                            (iii) in paragraph (2)--
                                    (I) by striking ``whole''; and
                                    (II) by striking the period at the 
                                end and inserting ``; and''; and
                            (iv) by adding at the end the following:
            ``(3) encourage technologies and systems for the improved 
        quality and safety of fortified grains and other commodities 
        that are readily transferable to developing countries.'';
            (2) 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''; and
                    (C) by striking ``including'' and inserting ``such 
                as''; and
            (3) in subsection (d), by striking ``2002'' and inserting 
        ``2006''.

SEC. 313. FARMER-TO-FARMER PROGRAM.

    Section 501(c) of the Agricultural Trade Development and Assistance 
Act of 1954 (7 U.S.C. 1737(c)) is amended--
            (1) by striking ``0.4'' and inserting ``0.5,''; and
            (2) by striking ``2002'' and inserting ``2006''.

               Subtitle B--Agricultural Trade Act of 1978

SEC. 321. EXPORT CREDIT GUARANTEE PROGRAM.

    (a) Term of Supplier Credit Program.--Section 202(a)(2) of the 
Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)(2)) is amended by 
striking ``180'' and inserting ``360''.
    (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 2006''.
    (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) Report on Agricultural Export Credit Programs.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this subsection, and annually thereafter, the 
        Secretary shall submit to the Committee on Agriculture and the 
        Committee on International Relations of the House of 
        Representatives and the Committee on Agriculture, Nutrition and 
        Forestry of the Senate a report on the status of multilateral 
        negotiations regarding agricultural export credit programs at 
        the World Trade Organization and the Organization of Economic 
        Cooperation and Development in fulfillment of Article 10.2 of 
        the Agreement on Agriculture (as described in section 101(d)(2) 
        of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2))).
            ``(2) Classified information.--The report under paragraph 
        (1) shall be submitted in unclassified form, but may contain a 
        classified annex.''.
    (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 ``2006''.

SEC. 322. MARKET ACCESS PROGRAM.

    (a) In General.--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 $100,000,000 for fiscal year 
                2002, $120,000,000 for fiscal year 2003, $140,000,000 
                for fiscal year 2004, $160,000,000 for fiscal year 
                2005, and $190,000,000 for fiscal year 2006, of the 
                funds of, or an equal value of commodities owned by, 
                the Commodity Credit Corporation, except that this 
                paragraph shall not apply to section 203(h); and''; and
            (4) by adding at the end the following:
            ``(2) Program Priorities.--Of funds made available under 
        paragraph (1)(A) in excess of $90,000,000 for any fiscal year, 
        priority shall be given to proposals--
                    ``(A) made by eligible trade organizations that 
                have never participated in the market access program 
                under this title; or
                    ``(B) for market access programs in emerging 
                markets.''.
    (b) United States Quality Export Initiative.--
            (1) Findings.--Congress finds that--
                    (A) the market access program established under 
                section 203 of the Agricultural Trade Act of 1978 (7 
                U.S.C. 5623) and foreign market development cooperator 
                program established under title VII of that Act (7 
                U.S.C. 7251 et seq.) target generic and value-added 
                agricultural products, with little emphasis on the high 
                quality of United States agricultural products; and
                    (B) new promotional tools are needed to enable 
                United States agricultural products to compete in 
                higher margin, international markets on the basis of 
                quality.
            (2) Initiative.--Section 203 of the Agricultural Trade Act 
        of 1978 (7 U.S.C. 5623) is amended by adding at the end the 
        following:
    ``(h) United States Quality Export Initiative.--
            ``(1) In general.--Subject to the availability of 
        appropriations, using the authorities under this section, the 
        Secretary shall establish a program under which, on a 
        competitive basis, using practical and objective criteria, 
        several agricultural products are selected to carry the `U.S. 
        Quality' seal.
            ``(2) Promotional activities.--Agricultural products 
        selected under paragraph (1) shall be promoted using the `U.S. 
        Quality' seal at trade fairs in key markets through electronic 
        and print media.
            ``(3) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as are necessary to 
        carry out this subsection.''.

SEC. 323. 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 2006''.
    (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;
            (2) in clause (ii), by striking the period at the end and 
        inserting ``, including, in the case of a state trading 
        enterprise engaged in the export of an agricultural commodity, 
        pricing practices that are not consistent with sound commercial 
        practices conducted in the ordinary course of trade; or''; and
            (3) by adding at the end the following:
                            ``(iii) changes United States export terms 
                        of trade through a deliberate change in the 
                        dollar exchange rate of a competing 
                        exporter.''.

SEC. 324. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

    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 following 
amounts:
            ``(1) For fiscal year 2002, $37,500,000.
            ``(2) For fiscal year 2003, $40,000,000.
            ``(3) For fiscal year 2004 and each subsequent fiscal year, 
        $42,500,000.
    ``(b) Program Priorities.--Of funds or commodities provided under 
subsection (a) in excess of $35,000,000 for any fiscal year, priority 
shall be given to proposals--
            ``(1) made by eligible trade organizations that have never 
        participated in the program established under this title; or
            ``(2) for programs established under this title in emerging 
        markets.''.

SEC. 325. FOOD FOR PROGRESS AND EDUCATION PROGRAMS.

    (a) In General.--The Agricultural Trade Act of 1978 (7 U.S.C. 5601 
et seq.) is amended by adding at the end the following:

         ``TITLE VIII--FOOD FOR PROGRESS AND EDUCATION PROGRAMS

``SEC. 801. DEFINITIONS.

    ``In this title:
            ``(1) Cooperative.--The term `cooperative' means a private 
        sector organization the members of which--
                    ``(A) own and control the organization;
                    ``(B) share in the profits of the organization; and
                    ``(C) are provided services (such as business 
                services and outreach in cooperative development) by 
                the organization.
            ``(2) Corporation.--The term `Corporation' means the 
        Commodity Credit Corporation.
            ``(3) Developing country.--The term `developing country' 
        means a foreign country that has--
                    ``(A) a shortage of foreign exchange earnings; and
                    ``(B) difficulty meeting all of the food needs of 
                the country through commercial channels and domestic 
                production.
            ``(4) Eligible commodity.--The term `eligible commodity' 
        means an agricultural commodity (including vitamins and 
        minerals) acquired by the Secretary or the Corporation for 
        disposition in a program authorized under this title through--
                    ``(A) commercial purchases; or
                    ``(B) inventories of the Corporation.
            ``(5) Eligible organization.--The term `eligible 
        organization' means a private voluntary organization, 
        cooperative, nongovernmental organization, or foreign country, 
        as determined by the Secretary.
            ``(6) Emerging agricultural country.--The term `emerging 
        agricultural country' means a foreign country that--
                    ``(A) is an emerging democracy; and
                    ``(B) has made a commitment to introduce or expand 
                free enterprise elements in the agricultural economy of 
                the country.
            ``(7) Food security.--The term `food security' means access 
        by all people at all times to sufficient food and nutrition for 
        a healthy and productive life.
            ``(8) Nongovernmental organization.--
                    ``(A) In general.--The term `nongovernmental 
                organization' means an organization that operates on a 
                local level to solve development problems in a foreign 
                country in which the organization is located.
                    ``(B) Exclusion.--The term `nongovernmental 
                organization' does not include an organization that is 
                primarily an agency or instrumentality of the 
                government of a foreign country.
            ``(9) Private voluntary organization.--The term `private 
        voluntary organization' means a nonprofit, nongovernmental 
        organization that--
                    ``(A) receives--
                            ``(i) funds from private sources; and
                            ``(ii) voluntary contributions of funds, 
                        staff time, or in-kind support from the public;
                    ``(B) is engaged in or is planning to engage in 
                nonreligious voluntary, charitable, or development 
                assistance activities; and
                    ``(C) in the case of an organization that is 
                organized under the laws of the United States or a 
                State, is an organization 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.
            ``(10) Program.--The term `program' means a food or 
        nutrition assistance or development initiative proposed by an 
        eligible organization and approved by the Secretary under this 
        title.
            ``(11) Recipient country.--The term `recipient country' 
        means an emerging agricultural country that receives assistance 
        under a program.

``SEC. 802. FOOD FOR PROGRESS AND EDUCATION PROGRAMS.

    ``(a) In General.--To provide agricultural commodities to support 
the introduction or expansion of free trade enterprises in national 
economies in recipient countries, and to provide food or nutrition 
assistance in recipient countries, the Secretary shall establish food 
for progress and education programs under which the Secretary may enter 
into agreements (including multiyear agreements and for programs in 
more than 1 country) with--
            ``(1) the governments of emerging agricultural countries;
            ``(2) private voluntary organizations;
            ``(3) nonprofit agricultural organizations and 
        cooperatives;
            ``(4) nongovernmental organizations; and
            ``(5) other private entities.
    ``(b) Considerations.--In determining whether to enter into an 
agreement to establish a program under subsection (a), the Secretary 
shall take into consideration whether an emerging agricultural country 
is committed to carrying out, or is carrying out, policies that 
promote--
            ``(1) economic freedom;
            ``(2) private production of food commodities for domestic 
        consumption; and
            ``(3) the creation and expansion of efficient domestic 
        markets for the purchase and sale of those commodities.
    ``(c) International Food for Education and Nutrition Program.--
            ``(1) In general.--In cooperation with other countries, the 
        Secretary shall establish an initiative within the food for 
        progress and education programs under this title to be known as 
        the `International Food for Education and Nutrition Program', 
        through which the Secretary may provide to eligible 
        organizations agricultural commodities and technical and 
        nutritional assistance in connection with education programs to 
        improve food security and enhance educational opportunities for 
        preschool age and primary school age children in recipient 
        countries.
            ``(2) Agreements.--In carrying out this subsection, the 
        Secretary--
                    ``(A) shall administer the programs under this 
                subsection in manner that is consistent with this 
                title; and
                    ``(B) may enter into agreements with eligible 
                organizations--
                            ``(i) to purchase, acquire, and donate 
                        eligible commodities to eligible organizations 
                        to carry out agreements in recipient countries; 
                        and
                            ``(ii) to provide technical and nutritional 
                        assistance to carry out agreements in recipient 
                        countries.
            ``(3) Other donor countries.--The Secretary shall encourage 
        other donor countries, directly or through eligible 
        organizations--
                    ``(A) to donate goods and funds to recipient 
                countries; and
                    ``(B) to provide technical and nutritional 
                assistance to recipient countries.
            ``(4) Private sector.--The President and the Secretary are 
        urged to encourage the support and active involvement of the 
        private sector, foundations, and other individuals and 
        organizations in programs and activities assisted under this 
        subsection.
            ``(5) Graduation.--An agreement with an eligible 
        organization under this subsection shall include provisions--
                    ``(A)(i) to sustain the benefits to the education, 
                enrollment, and attendance of children in schools in 
                the targeted communities when the provision of 
                commodities and assistance to a recipient country under 
                the program under this subsection terminates; and
                    ``(ii) to estimate the period of time required 
                until the recipient country or eligible organization is 
                able to provide sufficient assistance without 
                additional assistance under this subsection; or
                    ``(B) to provide other long-term benefits to 
                targeted populations of the recipient country.
            ``(6) Annual report.--The Secretary shall submit to the 
        Committee on Agriculture of the House of Representatives and 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate an annual report that describes--
                    ``(A) the results of the implementation of this 
                subsection during the year covered by the report, 
                including the impact on the enrollment, attendance, and 
                performance of children in preschools and primary 
                schools targeted under the program under this 
                subsection; and
                    ``(B) the level of commitments by, and the 
                potential for obtaining additional goods and assistance 
                from, other countries for subsequent years.
    ``(d) Terms.--
            ``(1) In general.--The Secretary may provide agricultural 
        commodities under this title on--
                    ``(A) a grant basis; or
                    ``(B) subject to paragraph (2), credit terms.
            ``(2) Credit terms.--Payment for agricultural commodities 
        made available under this title that are purchased on credit 
        terms shall be made on the same basis as payments made under 
        section 103 of the Agricultural Trade Development and 
        Assistance Act of 1954 (7 U.S.C. 1703).
            ``(3) No effect on domestic programs.--The Secretary shall 
        not make an agricultural commodity available for disposition 
        under this section in any amount that will reduce the amount of 
        the commodity that is traditionally made available through 
        donations to domestic feeding programs or agencies, as 
        determined by the Secretary.
    ``(e) Reports.--Each eligible organization that enters into an 
agreement under this title shall submit to the Secretary, at such time 
as the Secretary may request, a report containing such information as 
the Secretary may request relating to the use of agricultural 
commodities and funds provided to the eligible organization under this 
title.
    ``(f) Coordination.--To ensure that the provision of commodities 
under this section is coordinated with and complements other foreign 
assistance provided by the United States, assistance under this section 
shall be coordinated through the mechanism designated by the President 
to coordinate assistance under the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1691 et seq.).
    ``(g) Quality Assurance.--
            ``(1) In general.--The Secretary shall ensure, to the 
        maximum extent practicable, that each eligible organization 
        participating in 1 or more programs under this section--
                    ``(A) uses eligible commodities made available 
                under this title--
                            ``(i) in an effective manner;
                            ``(ii) in the areas of greatest need; and
                            ``(iii) in a manner that promotes the 
                        purposes of this title;
                    ``(B) in using eligible commodities, assesses and 
                takes into account the needs of recipient countries and 
                the target populations of 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 in subsection (h)(2)(C)(i);
                    ``(D) monitors and reports on the distribution or 
                sale of eligible commodities provided under this title 
                using methods that, as determined by the Secretary, 
                facilitate accurate and timely reporting;
                    ``(E) periodically evaluates the effectiveness of 
                the program of the eligible organization, including, as 
                applicable, an evaluation of whether the development or 
                food and nutrition purposes of the program can be 
                sustained in a recipient country if the assistance 
                provided to the recipient country is reduced and 
                eventually terminated; and
                    ``(F) considers means of improving the operation of 
                the program of the eligible organization.
            ``(2) Certified institutional partners.--
                    ``(A) In general.--The Secretary shall promulgate 
                regulations and guidelines to permit private voluntary 
                organizations and cooperatives to be certified as 
                institutional partners.
                    ``(B) Requirements.--To become a certified 
                institutional partner, a private voluntary organization 
                or cooperative shall submit to the Secretary a 
                certification of organizational capacity that 
                describes--
                            ``(i) the financial, programmatic, 
                        commodity management, and auditing abilities 
                        and practices of the organization or 
                        cooperative; and
                            ``(ii) the capacity of the organization or 
                        cooperative to carry out projects in particular 
                        countries.
                    ``(C) Multicountry proposals.--A certified 
                institutional partner shall be eligible to--
                            ``(i) submit a single proposal for 1 or 
                        more countries that are the same as, or similar 
                        to, those countries in which the certified 
                        institutional partner has already demonstrated 
                        organizational capacity;
                            ``(ii) receive expedited review and 
                        approval of the proposal; and
                            ``(iii) request commodities and assistance 
                        under this section for use in 1 or more 
                        countries.
                    ``(D) Multiyear agreements.--In carrying out this 
                title, on request and subject to the availability of 
                commodities, the Secretary is encouraged to approve 
                agreements that provide for commodities to be made 
                available for distribution on a multiyear basis, if the 
                agreements otherwise meet the requirements of this 
                title.
    ``(h) Transshipment and Resale.--
            ``(1) In general.--The transshipment or resale of an 
        eligible commodity to a country other than a recipient country 
        shall be prohibited unless the transshipment or resale is 
        approved by the Secretary.
            ``(2) Monetization.--
                    ``(A) In general.--Subject to subparagraphs (B) 
                through (D), an eligible commodity provided under this 
                section may be sold for foreign currency or United 
                States dollars or bartered, with the approval of the 
                Secretary.
                    ``(B) Sale or barter of food assistance.--The sale 
                or barter of eligible commodities under this title may 
                be conducted only within (as determined by the 
                Secretary)--
                            ``(i) a recipient country or country nearby 
                        to the recipient country; or
                            ``(ii) another country, if--
                                    ``(I) the sale or barter within the 
                                recipient country or nearby country is 
                                not practicable; and
                                    ``(II) the sale or barter within 
                                countries other than the recipient 
                                country or nearby country will not 
                                disrupt commercial markets for the 
                                agricultural commodity involved.
                    ``(C) Humanitarian or development purposes.--The 
                Secretary may authorize the use of proceeds or 
                exchanges to reimburse, within a recipient country or 
                other country in the same region, the costs incurred by 
                an eligible organization for--
                            ``(i)(I) programs targeted at hunger and 
                        malnutrition; or
                            ``(II) development programs involving food 
                        security or education;
                            ``(ii) transportation, storage, and 
                        distribution of eligible commodities provided 
                        under this title; and
                            ``(iii) administration, sales, monitoring, 
                        and technical assistance.
                    ``(D) Exception.--The Secretary shall not approve 
                the use of proceeds described in subparagraph (C) to 
                fund any administrative expenses of a foreign 
                government.
                    ``(E) Private sector enhancement.--As appropriate, 
                the Secretary may provide eligible commodities under 
                this title in a manner that uses commodity transactions 
                as a means of developing in the recipient countries a 
                competitive private sector that can provide for the 
                importation, transportation, storage, marketing, and 
                distribution of commodities.
    ``(i) Displacement of Commercial Sales.--In carrying out this 
title, the Secretary shall, to the maximum extent practicable 
consistent with the purposes of this title, avoid--
            ``(1) displacing any commercial export sale of United 
        States agricultural commodities that would otherwise be made;
            ``(2) disrupting world prices of agricultural commodities; 
        or
            ``(3) disrupting normal patterns of commercial trade of 
        agricultural commodities with foreign countries.
    ``(j) Deadline for Program Announcements.--
            ``(1) In general.--Before the beginning of the applicable 
        fiscal year, the Secretary shall, to the maximum extent 
        practicable--
                    ``(A) make all determinations concerning program 
                agreements and resource requests for programs under 
                this title; and
                    ``(B) announce those determinations.
            ``(2) Report.--Not later than November 1 of the applicable 
        fiscal year, the Secretary shall submit to the Committee on 
        Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate a list of 
        programs, countries, and commodities, and the total amount of 
        funds for transportation and administrative costs, approved to 
        date under this title.
    ``(k) Military Distribution of Assistance.--
            ``(1) In general.--The Secretary shall ensure, to the 
        maximum extent practicable, that agricultural commodities made 
        available under this title are provided without regard to--
                    ``(A) the political affiliation, geographic 
                location, ethnic, tribal, or religious identity of the 
                recipient; or
                    ``(B) any other extraneous factors, as determined 
                by the Secretary.
            ``(2) Prohibition on handling of commodities by the 
        military.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall not enter into an 
                agreement under this title to provide agricultural 
                commodities if the agreement requires or permits the 
                distribution, handling, or allocation of agricultural 
                commodities by the military forces of any foreign 
                government or insurgent group.
                    ``(B) Exception.--The Secretary may authorize the 
                distribution, handling, or allocation of commodities by 
                the military forces of a country in exceptional 
                circumstances in which--
                            ``(i) nonmilitary channels are not 
                        available for distribution, handling, or 
                        allocation;
                            ``(ii) the distribution, handling, or 
                        allocation is consistent with paragraph (1); 
                        and
                            ``(iii) the Secretary determines that the 
                        distribution, handling, or allocation is 
                        necessary to meet the emergency health, safety, 
                        or nutritional requirements of the population 
                        of a recipient country.
            ``(3) Encouragement of safe passage.--In entering into an 
        agreement under this title that involves 1 or more areas within 
        a recipient country that is experiencing protracted warfare or 
        civil unrest, the Secretary shall, to the maximum extent 
        practicable, encourage all parties to the conflict to--
                    ``(A) permit safe passage of the commodities and 
                other relief supplies; and
                    ``(B) establish safe zones for--
                            ``(i) medical and humanitarian treatment; 
                        and
                            ``(ii) evacuation of injured persons.
    ``(l) Level of Assistance.--The cost of commodities made available 
under this title, and the expenses incurred in connection with the 
provision of those commodities shall be in addition to the level of 
assistance provided under the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1691 et seq.).
    ``(m) Commodity Credit Corporation.--
            ``(1) In general.--Subject to paragraphs (6) through (8), 
        the Secretary may use the funds, facilities, and authorities of 
        the Corporation to carry out this title.
            ``(2) Minimum tonnage.--Subject to paragraphs (5) and 
        (7)(B), not less than 400,000 metric tons of commodities may be 
        provided under this title for each of fiscal years 2002 through 
        2006.
            ``(3) Authorization of appropriations.--In addition to 
        tonnage authorized under paragraph (2), there are authorized to 
        be appropriated such sums as are necessary to carry out this 
        title.
            ``(4) Title i funds.--In addition to tonnage and funds 
        authorized under paragraphs (2), (3), and (7)(B), the 
        Corporation may use funds appropriated to carry out title I of 
        the Agricultural Trade Development and Assistance Act of 1954 
        (7 U.S.C. 1701 et seq.)) in carrying out this section with 
        respect to commodities made available under this title.
            ``(5) International food for education and nutrition 
        program.--
                    ``(A) In general.--Of the funds that would be 
                available to carry out paragraph (2), the Secretary may 
                use not more than $200,000,000 for each fiscal year to 
                carry out the initiative established under subsection 
                (c).
                    ``(B) Reallocation.--Tons not allocated under 
                subsection (c) by June 30 of each fiscal year shall be 
                made available for proposals submitted under the food 
                for progress and education programs under subsection 
                (a).
            ``(6) Limitation on purchases of commodities.--The 
        Corporation may purchase agricultural commodities for 
        disposition under this title only if Corporation inventories 
        are insufficient to satisfy commitments made in agreements 
        entered into under this title.
            ``(7) Eligible costs and expenses.--
                    ``(A) In general.--Subject to subparagraph (B), 
                with respect to an eligible commodity made available 
                under this title, the Corporation may pay--
                            ``(i) the costs of acquiring the eligible 
                        commodity;
                            ``(ii) the costs associated with packaging, 
                        enriching, preserving, and fortifying of the 
                        eligible commodity;
                            ``(iii) the processing, transportation, 
                        handling, and other incidental costs incurred 
                        before the date on which the commodity is 
                        delivered free on board vessels in United 
                        States ports;
                            ``(iv) the vessel freight charges from 
                        United States ports or designated Canadian 
                        transshipment ports, as determined by the 
                        Secretary, to designated ports of entry abroad;
                            ``(v) the costs associated with 
                        transporting the eligible commodity from United 
                        States ports to designated points of entry 
                        abroad in a case in which--
                                    ``(I) a recipient country is 
                                landlocked;
                                    ``(II) ports of a recipient country 
                                cannot be used effectively because of 
                                natural or other disturbances;
                                    ``(III) carriers to a specific 
                                country are unavailable; or
                                    ``(IV) substantial savings in costs 
                                or time may be gained by the use of 
                                points of entry other than ports;
                            ``(vi) the transportation and associated 
                        distribution costs incurred in moving the 
                        commodity (including repositioned commodities) 
                        from designated points of entry or ports of 
                        entry abroad to storage and distribution sites;
                            ``(vii) in the case of an activity under 
                        subsection (c), the internal transportation, 
                        storage, and handling costs incurred in moving 
                        the eligible commodity, if the Secretary 
                        determines that payment of the costs is 
                        appropriate and that the recipient country is a 
                        low income, net food-importing country that--
                                    ``(I) meets the poverty criteria 
                                established by the International Bank 
                                for Reconstruction and Development for 
                                Civil Works Preference; and
                                    ``(II) has a national government 
                                that is committed to or is working 
                                toward, through a national action plan, 
                                the World Declaration on Education for 
                                All convened in 1990 in Jomtien, 
                                Thailand, and the followup Dakar 
                                Framework for Action of the World 
                                Education Forum in 2000;
                            ``(viii) the charges for general average 
                        contributions arising out of the ocean 
                        transport of commodities transferred; and
                            ``(ix) the costs, in addition to costs 
                        authorized by clauses (i) through (viii), of 
                        providing--
                                    ``(I) assistance in the 
                                administration, sale, and monitoring of 
                                food assistance activities under this 
                                title; and
                                    ``(II) technical assistance for 
                                monetization programs.
                    ``(B) Funding.--Except for costs described in 
                subparagraph (A)(i), not more than $80,000,000 of funds 
                that would be made available to carry out paragraph (2) 
                may be used to cover costs under this paragraph unless 
                authorized in advance in an appropriation Act.
            ``(8) Payment of administrative costs.--An eligible 
        organization that receives payment for administrative costs 
        through monetization of the eligible commodity under subsection 
        (h)(2) shall not be eligible to receive payment for the same 
        administrative costs through direct payments under paragraph 
        (7)(A)(ix)(I).''.
    (b) Conforming Amendments.--
            (1) Section 416(b)(7)(D)(iii) of the Agricultural Act of 
        1949 (7 U.S.C. 1431(b)(7)(D)(iii)) is amended by striking ``the 
        Food for Progress Act of 1985'' and inserting ``title VIII of 
        the Agricultural Trade Act of 1978''.
            (2) The Act of August 19, 1958 (7 U.S.C. 1431 note; Public 
        Law 85-683) is amended by striking ``the Food for Progress Act 
        of 1985'' and inserting ``title VIII of the Agricultural Trade 
        Act of 1978''.
            (3) Section 1110 of the Food Security Act of 1985 (7 U.S.C. 
        1736o) is repealed.

SEC. 326. EXPORTER ASSISTANCE INITIATIVE.

    (a) Findings.--Congress find that--
            (1) information in the possession of Federal agencies other 
        than the Department of Agriculture that is necessary for the 
        export of agricultural commodities and products is available 
        only from multiple disparate sources; and
            (2) because exporters often need access to information 
        quickly, exporters lack the time to search multiple sources to 
        access necessary information, and exporters often are unaware 
        of where the necessary information can be located.
    (b) 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. EXPORTER ASSISTANCE INITIATIVE.

    ``(a) In General.--In order to create a single source of 
information for exports of United States agricultural commodities, the 
Secretary shall develop a website on the Internet that collates onto a 
single website all information from all agencies of the Federal 
Government that is relevant to the export of United States agricultural 
commodities.
    ``(b) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out subsection (a)--
            ``(1) $1,000,000 for each of fiscal years 2002 through 
        2004; and
            ``(2) $500,000 for each of fiscal years 2005 and 2006.''.

        Subtitle C--Miscellaneous Agricultural Trade Provisions

SEC. 331. 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 ``2006''.

SEC. 332. EMERGING MARKETS.

    Section 1542 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (7 U.S.C. 5622 note; Public Law 101-624) is amended by striking 
``2002'' each place it appears in subsections (a) and (d)(1)(A)(i) and 
inserting ``2006''.

SEC. 333. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

    Section 1542 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (7 U.S.C. 5622 note; Public Law 101-624) is amended by adding 
at the end the following:
    ``(g) Biotechnology and Agricultural Trade Program.--
            ``(1) In general.--The Secretary of Agriculture shall 
        establish a program to enhance foreign acceptance of 
        agricultural biotechnology and United States agricultural 
        products developed through biotechnology.
            ``(2) Focus.--The program shall address the continuing and 
        increasing market access, regulatory, and marketing issues 
        relating to export commerce of United States agricultural 
        biotechnology products.
            ``(3) Education and outreach.--
                    ``(A) Foreign markets.--Support for United States 
                agricultural market development organizations to carry 
                out education and other outreach efforts concerning 
                biotechnology shall target such educational initiatives 
                directed toward--
                            ``(i) producers, buyers, consumers, and 
                        media in foreign markets through initiatives in 
                        foreign markets; and
                            ``(ii) government officials, scientists, 
                        and trade officials from foreign countries 
                        through exchange programs.
                    ``(B) Funding for education and outreach.--Funding 
                for activities under subparagraph (A) may be--
                            ``(i) used through--
                                    ``(I) the emerging markets program 
                                under this section; or
                                    ``(II) the Cochran Fellowship 
                                Program under section 1543; or
                            ``(ii) applied directly to foreign market 
                        development cooperators through the foreign 
                        market development cooperator program 
                        established under section 702.
            ``(4) Rapid response.--
                    ``(A) In general.--The Secretary shall assist 
                exporters of United States agricultural commodities in 
                cases in which the exporters are harmed by unwarranted 
                and arbitrary barriers to trade due to--
                            ``(i) marketing of biotechnology products;
                            ``(ii) food safety;
                            ``(iii) disease; or
                            ``(iv) other sanitary or phytosanitary 
                        concerns.
                    ``(B) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $1,000,000 for each of fiscal years 2002 
                through 2006.
            ``(5) Funding.--
                    ``(A) Commodity credit corporation.--The Secretary 
                shall use the funds, facilities, and authorities of the 
                Commodity Credit Corporation to carry out this 
                subsection (other than paragraph (4)).
                    ``(B) Funding amount.--Of the funds of the 
                Commodity Credit Corporation, the Secretary shall make 
                available to carry out this subsection (other than 
                paragraph (4)) $15,000,000 for each of fiscal years 
                2002 through 2006.''.

SEC. 334. 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) in the first sentence, by striking ``Foreign 
                currencies'' and inserting ``Proceeds''; and
                    (B) in the second sentence, by striking ``foreign 
                currency''; and
            (3) in clause (iv)--
                    (A) by striking ``Foreign currency proceeds'' and 
                inserting ``Proceeds''; and
                    (B) by striking ``; or'' and all that follows and 
                inserting a period.
    (b) Implementation of Agreements.--Section 416(b)(8) of the 
Agricultural Act of 1949 (7 U.S.C. 1431(b)(8)) is amended by striking 
``(8)(A)'' and all that follows through ``(B) The Secretary'' and 
inserting the following:
            ``(8) Administrative provisions.--
                    ``(A) Direct delivery.--In addition to practices in 
                effect on the date of enactment of this subparagraph, 
                the Secretary may approve an agreement that provides 
                for direct delivery of eligible commodities to milling 
                or processing facilities more than 50 percent of the 
                interest in which is owned by United States citizens in 
                recipient countries, with the proceeds of transactions 
                transferred in cash to eligible organizations to carry 
                out approved projects.
                    ``(B) Regulations.--The Secretary''.
    (c) Certified Institutional Partners.--Section 416 of the 
Agricultural Act of 1949 (7 U.S.C. 1431) is amended by adding at the 
end the following:
    ``(c) Certified Institutional Partners.--
            ``(1) In general.--The Secretary shall promulgate 
        regulations and guidelines to permit private voluntary 
        organizations and cooperatives to be certified as institutional 
        partners.
            ``(2) Requirements.--To become a certified institutional 
        partner, a private voluntary organization or cooperative shall 
        submit to the Secretary a certification of organizational 
        capacity that describes--
                    ``(A) the financial, programmatic, commodity 
                management, and auditing abilities and practices of the 
                organization or cooperative; and
                    ``(B) the capacity of the organization or 
                cooperative to carry out projects in particular 
                countries.
            ``(3) Multi-country proposals.--A certified institutional 
        partner shall be eligible to--
                    ``(A) submit a single proposal for 1 or more 
                countries that are the same as, or similar to, those 
                countries in which the certified institutional partner 
                has already demonstrated organizational capacity;
                    ``(B) receive expedited review and approval of the 
                proposal; and
                    ``(C) request commodities and assistance under this 
                section for use in 1 or more countries.''.

SEC. 335. AGRICULTURAL TRADE WITH CUBA.

    (a) In General.--Section 908 of the Agriculture, Rural Development, 
Food and Drug Administration and Related Agencies Appropriations Act, 
2001 (22 U.S.C. 7207), is amended by striking subsection (b).
    (b) Conforming Amendments.--Section 908(a) of the Agriculture, 
Rural Development, Food and Drug Administration and Related Agencies 
Appropriations Act, 2001 (22 U.S.C. 7207(a)) (as amended by subsection 
(a)), is amended--
            (1) by striking ``(a)'' and all that follows through 
        ``Notwithstanding'' and inserting the following:
    ``(a) In General.--Notwithstanding'';
            (2) by striking ``(2) Rule of construction.--Nothing in 
        paragraph (1)'' and inserting the following:
    ``(b) Rule of Construction.--Nothing in subsection (a)''; and
            (3) by striking ``(3) Waiver.--The President may waive the 
        application of paragraph (1)'' and inserting the following:
    ``(c) Waiver.--The President may waive the application of 
subsection (a)''.

SEC. 336. SENSE OF CONGRESS CONCERNING AGRICULTURAL TRADE.

    (a) Agriculture Trade Negotiating Objectives.--It is the sense of 
Congress that the principal negotiating objective of the United States 
with respect to agricultural trade in all multilateral, regional, and 
bilateral negotiations is to obtain competitive opportunities for the 
export of United States agricultural commodities in foreign markets 
substantially equivalent to the competitive opportunities afforded 
foreign exports in United States markets and to achieve fairer and more 
open conditions of agricultural trade in bulk and value-added 
commodities by--
            (1) reducing or eliminating, by a date certain, tariffs or 
        other charges that decrease market opportunities for 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--
                            (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 Congress 
that--
            (1) reaching a successful agreement on agriculture should 
        be the top priority of United States negotiators in World Trade 
        Organization talks; and
            (2) if the primary 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 
Congress that--
            (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 PROGRAMS

SEC. 401. SHORT TITLE.

    This title may be cited as the ``Food Stamp Reauthorization Act of 
2001''.

                     Subtitle A--Food Stamp Program

SEC. 411. 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
            (2) by adding at the end the following:
    ``(n) State Options To Simplify Determination of Child Support 
Payments Made by Household Members.--
            ``(1) In general.--Regardless of whether a State agency 
        elects to provide a deduction under subsection (e)(4), the 
        Secretary shall establish simplified procedures to allow State 
        agencies, at the option of the State agencies, to determine the 
        amount of the legally obligated child support payments made, 
        including procedures to allow the State agency to rely on 
        information from the agency responsible for implementing the 
        program under part D of title IV of the Social Security Act (42 
        U.S.C. 661 et seq.) concerning payments made in prior months in 
        lieu of obtaining current information from the household.
            ``(2) Duration of determination of amount of support 
        payments.--If a State agency makes a determination of the 
        amount of support payments of a household under paragraph (1), 
        the State agency may provide that the amount of the exclusion 
        or deduction for the household shall not change until the 
        eligibility of the household is next redetermined under section 
        11(e)(4).''.

SEC. 412. 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. 1381 et seq.), regular payments from a 
        government source (such as unemployment benefits and general 
        assistance), worker's compensation, child support payments made 
        to a household member by an individual who is legally obligated 
        to make the payments, or such other types of income the 
        consideration of which the Secretary determines by regulation 
        to be essential to equitable determinations of eligibility and 
        benefit levels''.

SEC. 413. INCREASE IN BENEFITS TO HOUSEHOLDS WITH CHILDREN.

    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.--Subject to the other provisions 
                of this paragraph, the Secretary shall allow for each 
                household a standard deduction that is equal to the 
                greater of--
                            ``(i) the applicable percentage specified 
                        in subparagraph (D) of the applicable income 
                        standard of eligibility established under 
                        subsection (c)(1); or
                            ``(ii) the minimum deduction specified in 
                        subparagraph (E).
                    ``(B) Guam.--The Secretary shall allow for each 
                household in Guam a standard deduction that is--
                            ``(i) equal to the applicable percentage 
                        specified in subparagraph (D) of twice the 
                        income standard of eligibility established 
                        under subsection (c)(1) for the 48 contiguous 
                        States and the District of Columbia; but
                            ``(ii) not less than the minimum deduction 
                        for Guam specified in subparagraph (E).
                    ``(C) Households of 6 or more members.--The income 
                standard of eligibility established under subsection 
                (c)(1) for a household of 6 members shall be used to 
                calculate the standard deduction for each household of 
                6 or more members.
                    ``(D) Applicable percentage.--For the purpose of 
                subparagraph (A), the applicable percentage shall be--
                            ``(i) 8 percent for each of fiscal years 
                        2002 through 2007;
                            ``(ii) 8.25 percent for fiscal year 2008;
                            ``(iii) 8.5 percent for each of fiscal 
                        years 2009 and 2010; and
                            ``(iv) 9 percent for fiscal year 2011 and 
                        each fiscal year thereafter.
                    ``(E) Minimum deduction.--The minimum deduction 
                shall be $134, $229, $189, $269, and $118 for the 48 
                contiguous States and the District of Columbia, Alaska, 
                Hawaii, Guam, and the Virgin Islands of the United 
                States, respectively.''.

SEC. 414. 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--
            (1) in subparagraph (A)--
                    (A) by striking ``A household'' and inserting the 
                following:
                            ``(i) In general.--A household''; and
                    (B) by adding at the end the following:
                            ``(ii) Inclusion of certain payments.--In 
                        determining the shelter expenses of a household 
                        under this paragraph, the State agency shall 
                        include any required payment to the landlord of 
                        the household without regard to whether the 
                        required payment is designated to pay specific 
                        charges.''; and
            (2) 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)--
                    (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. 415. SIMPLIFIED UTILITY ALLOWANCE.

    Section 5(e)(6)(C)(iii) of the Food Stamp Act of 1977 (as amended 
by section 414(b)(1)(B)) 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. 416. SIMPLIFIED PROCEDURE FOR DETERMINATION OF EARNED INCOME.

    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 earned income.--
                            ``(i) In general.--A State agency may elect 
                        to determine monthly earned income by 
                        multiplying weekly income by 4 and biweekly 
                        income by 2.
                            ``(ii) Adjustment of earned income 
                        deduction.--A State agency that makes an 
                        election described in clause (i) shall adjust 
                        the earned income deduction under subsection 
                        (e)(2)(B) to the extent necessary to prevent 
                        the election from resulting in increased costs 
                        to the food stamp program, as determined 
                        consistent with standards promulgated by the 
                        Secretary.''.

SEC. 417. SIMPLIFIED DETERMINATION OF DEDUCTIONS.

    Section 5(f)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2014(f)(1)) 
(as amended by section 416) is amended by adding at the end the 
following:
                    ``(D) Simplified determination of deductions.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), for the purposes of subsection 
                        (e), a State agency may elect to disregard 
                        until the next redetermination of eligibility 
                        under section 11(e)(4) 1 or more types of 
                        changes in the circumstances of a household 
                        that affect the amount of deductions the 
                        household may claim under subsection (e).
                            ``(ii) Changes that may not be 
                        disregarded.--Under clause (i), a State agency 
                        may not disregard--
                                    ``(I) any reported change of 
                                residence; or
                                    ``(II) under standards prescribed 
                                by the Secretary, any change in earned 
                                income.''.

SEC. 418. SIMPLIFIED DEFINITION OF RESOURCES.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is 
amended 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), the 
                Secretary shall promulgate regulations under which a 
                State agency may, at the option of the State agency, 
                exclude from financial resources under this subsection 
                any types of financial resources that the State agency 
                does not consider when determining eligibility for--
                            ``(i) cash assistance under a program 
                        funded under part A of title IV of the Social 
                        Security Act (42 U.S.C. 601 et seq.); or
                            ``(ii) medical assistance under section 
                        1931 of the Social Security Act (42 U.S.C. 
                        1396u-1).
                    ``(B) Limitations.--Subparagraph (A) does not 
                authorize a State agency to exclude--
                            ``(i) cash;
                            ``(ii) licensed vehicles;
                            ``(iii) amounts in any account in a 
                        financial institution that are readily 
                        available to the household; or
                            ``(iv) any other similar type of resource 
                        the inclusion in financial resources of which 
                        the Secretary determines by regulation to be 
                        essential to equitable determinations of 
                        eligibility under the food stamp program, 
                        except to the extent that any of those types of 
                        resources are excluded under another paragraph 
                        of this subsection.''.

SEC. 419. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS.

    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''.

SEC. 420. 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 standard established under section 
                        5(c)(2).''.

SEC. 421. BENEFITS FOR ADULTS WITHOUT DEPENDENTS.

    (a) In General.--Section 6(o) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(o)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C)--
                            (i) by striking ``subsection (d)(4),'' and 
                        inserting ``subsection (d)(4)''; and
                            (ii) by striking the period at the end and 
                        inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(D) a job search program or job search training 
                program if--
                            ``(i) the program meets standards 
                        established by the Secretary to ensure that the 
                        participant is continuously and actively 
                        seeking employment in the private sector; and
                            ``(ii) no position is currently available 
                        for the participant in an employment or 
                        training program that meets the requirements of 
                        subparagraph (C).'';
            (2) in paragraph (2)--
                    (A) by striking ``36-month'' and inserting ``24-
                month''; and
                    (B) by striking ``3'' and inserting ``6'';
            (3) by striking paragraph (5) and inserting the following:
            ``(5) Eligibility of individuals while meeting work 
        requirement.--Notwithstanding paragraph (2), an individual who 
        would otherwise be ineligible under that paragraph shall be 
        eligible to participate in the food stamp program during any 
        period in which the individual meets the work requirement of 
        subparagraph (A), (B), or (C) of that paragraph.''; and
            (4) in paragraph (6)(A)(ii)--
                    (A) in subclause (III), by adding ``and'' at the 
                end;
                    (B) in subclause (IV)--
                            (i) by striking ``3'' and inserting ``6''; 
                        and
                            (ii) by striking ``; and'' and inserting a 
                        period; and
                    (C) by striking subclause (V).
    (b) Implementation of Amendments.--For the purpose of implementing 
the amendments made by subsection (a), a State agency shall disregard 
any period during which an individual received food stamp benefits 
before the effective date of this title.

SEC. 422. PRESERVATION OF ACCESS TO ELECTRONIC BENEFITS.

    (a) In General.--Section 7(i)(1) of the Food Stamp Act of 1977 (7 
U.S.C. 2016(i)(1)) is amended by adding at the end the following:
                    ``(E) Access to ebt systems.--
                            ``(i) In general.--No benefits shall be 
                        taken off-line or otherwise made inaccessible 
                        because of inactivity until at least 180 days 
                        have elapsed since a household last accessed 
                        the account of the household.
                            ``(ii) Notice to household.--In a case in 
                        which benefits are taken off-line or otherwise 
                        made inaccessible, the household shall be sent 
                        a notice that--
                                    ``(I) explains how to reactivate 
                                the benefits; and
                                    ``(II) offers assistance if the 
                                household is having difficulty 
                                accessing the benefits of the 
                                household.''.
    (b) Applicability.--The amendment made by subsection (a) shall 
apply with respect to each State agency beginning on the date on which 
the State agency, after the date of enactment of this Act, enters into 
a contract to operate an electronic benefit transfer system.

SEC. 423. 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. 424. 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) Simplified Procedures for Residents of Certain Group 
Facilities.--
            ``(1) In general.--At the option of the State agency, 
        allotments for residents of facilities described in 
        subparagraph (B), (C), (D), or (E) of section 3(i)(5) may be 
        determined and issued under this subsection in lieu of 
        subsection (a).
            ``(2) Amount of allotment.--The allotment for each eligible 
        resident described in paragraph (1) shall be calculated in 
        accordance with standardized procedures established by the 
        Secretary that take into account the allotments typically 
        received by residents of facilities described in paragraph (1).
            ``(3) Issuance of allotment.--
                    ``(A) In general.--The State agency shall issue an 
                allotment determined under this subsection to the 
                administration of a facility described in paragraph (1) 
                as the authorized representative of the residents of 
                the facility.
                    ``(B) Adjustment.--The Secretary shall establish 
                procedures to ensure that a facility described in 
                paragraph (1) does not receive a greater proportion of 
                a resident's monthly allotment than the proportion of 
                the month during which the resident lived in the 
                facility.
            ``(4) Departures of covered residents.--
                    ``(A) Notification.--Any facility described in 
                paragraph (1) that receives an allotment for a resident 
                under this subsection shall--
                            ``(i) notify the State agency promptly on 
                        the departure of the resident; and
                            ``(ii) notify the resident, before the 
                        departure of the resident, that the resident--
                                    ``(I) is eligible for continued 
                                benefits under the food stamp program; 
                                and
                                    ``(II) should contact the State 
                                agency concerning continuation of the 
                                benefits.
                    ``(B) Issuance to departed residents.--On receiving 
                a notification under subparagraph (A)(i) concerning the 
                departure of a resident, the State agency--
                            ``(i) shall promptly issue the departed 
                        resident an allotment for the days of the month 
                        after the departure of the resident (calculated 
                        in a manner prescribed by the Secretary) unless 
                        the departed resident reapplies to participate 
                        in the food stamp program; and
                            ``(ii) may issue an allotment for the month 
                        following the month of the departure (but not 
                        any subsequent month) based on this subsection 
                        unless the departed resident reapplies to 
                        participate in the food stamp program.
                    ``(C) State option.--The State agency may elect not 
                to issue an allotment under subparagraph (B)(i) if the 
                State agency lacks sufficient information on the 
                location of the departed resident to provide the 
                allotment.
                    ``(D) Effect of reapplication.--If the departed 
                resident reapplies to participate in the food stamp 
                program, the allotment of the departed resident shall 
                be determined without regard to this subsection.''.
    (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:
    ``(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. 425. AVAILABILITY OF FOOD STAMP PROGRAM APPLICATIONS ON THE 
              INTERNET.

    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;''.

SEC. 426. SIMPLIFIED DETERMINATIONS OF CONTINUING ELIGIBILITY.

    (a) In General.--Section 11(e) of the Food Stamp Act of 1977 (7 
U.S.C. 2020(e)) is amended--
            (1) by striking paragraph (4) and inserting the following:
            ``(4)(A) that the State agency shall periodically require 
        each household to cooperate in a redetermination of the 
        eligibility of the household.
            ``(B) A redetermination under subparagraph (A) shall--
                    ``(i) be based on information supplied by the 
                household; and
                    ``(ii) conform to standards established by the 
                Secretary.
            ``(C) The interval between redeterminations of eligibility 
        under subparagraph (A) shall not exceed the eligibility review 
        period;'' and
            (2) in paragraph (10)--
                    (A) by striking ``within the household's 
                certification period''; and
                    (B) by striking ``or until'' and all that follows 
                through ``occurs earlier''.
    (b) Conforming Amendments.--
            (1) Section 3(c) of the Food Stamp Act of 1977 (7 U.S.C. 
        2012(c)) is amended--
                    (A) by striking ``Certification period'' and 
                inserting ``Eligibility review period''; and
                    (B) by striking ``certification period'' each place 
                it appears and inserting ``eligibility review period''.
            (2) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) 
        is amended--
                    (A) in subsection (d)(2), by striking ``in the 
                certification period which'' and inserting ``that''; 
                and
                    (B) in subsection (e) (as amended by section 
                414(b)(1)(B))--
                            (i) in paragraph (5)(B)(ii)--
                                    (I) in subclause (II), by striking 
                                ``certification period'' and inserting 
                                ``eligibility review period''; and
                                    (II) in subclause (III), by 
                                striking ``has been anticipated for the 
                                certification period'' and inserting 
                                ``was anticipated when the household 
                                applied or at the most recent 
                                redetermination of eligibility for the 
                                household''; and
                            (ii) in paragraph (6)(C)(iii)(II), by 
                        striking ``the end of a certification period'' 
                        and inserting ``each redetermination of the 
                        eligibility of the household''.
            (3) Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) 
        is amended--
                    (A) in subsection (c)(1)(C)(iv), by striking 
                ``certification period'' each place it appears and 
                inserting ``interval between required redeterminations 
                of eligibility''; and
                    (B) in subsection (d)(1)(D)(v)(II), by striking ``a 
                certification period'' and inserting ``an eligibility 
                review period''.
            (4) Section 8(c) of the Food Stamp Act of 1977 (7 U.S.C. 
        2017(c)) is amended--
                    (A) in the second sentence of paragraph (1), by 
                striking ``within a certification period''; and
                    (B) in paragraph (2)(B), by striking ``expiration 
                of'' and all that follows through ``during a 
                certification period,'' and inserting ``termination of 
                benefits to the household,''.
            (5) Section 11(e)(16) of the Food Stamp Act of 1977 (7 
        U.S.C. 2020(e)(16)) is amended by striking ``the certification 
        or recertification'' and inserting ``determining the 
        eligibility''.

SEC. 427. CLEARINGHOUSE FOR SUCCESSFUL NUTRITION EDUCATION EFFORTS.

    Section 11(f) of the Food Stamp Act of 1977 (7 U.S.C. 2020(f)) is 
amended by striking paragraph (2) and inserting the following:
            ``(2) Nutrition education clearinghouse.--The Secretary 
        shall--
                    ``(A) request State agencies to submit to the 
                Secretary descriptions of successful nutrition 
                education programs designed for use in the food stamp 
                program and other nutrition assistance programs;
                    ``(B) make the descriptions submitted under 
                subparagraph (A) available on the website of the 
                Department of Agriculture; and
                    ``(C) inform State agencies of the availability of 
                the descriptions on the website.''.

SEC. 428. 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 continue to receive food stamp benefits for a 
        period of not more than 6 months after the date on which cash 
        assistance is terminated.
            ``(3) Amount of benefits.--During the transitional benefits 
        period under paragraph (2), a household shall receive an amount 
        of food stamp benefits equal to the allotment received in the 
        month immediately preceding the date on which cash assistance 
        was terminated, adjusted for--
                    ``(A) the change in household income as a result of 
                the termination of cash assistance; and
                    ``(B) any changes in circumstances that may result 
                in an increase in the food stamp allotment of the 
                household and that the household elects to report.
            ``(4) Determination of future eligibility.--In the final 
        month of the transitional benefits period under paragraph (2), 
        the State agency may--
                    ``(A) require the household to cooperate in a 
                redetermination of eligibility; and
                    ``(B) initiate a new eligibility review period for 
                the household without regard to whether the preceding 
                eligibility review period has expired.
            ``(5) Limitation.--A household shall not be eligible for 
        transitional benefits under this subsection if the household--
                    ``(A) loses eligibility under section 6;
                    ``(B) is sanctioned for a failure to perform an 
                action required by Federal, State, or local law 
                relating to a cash assistance program described in 
                paragraph (1); or
                    ``(C) is a member of any other category of 
                households designated by the State agency as ineligible 
                for transitional benefits.''.
    (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 section 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. 429. DELIVERY TO RETAILERS OF NOTICES OF ADVERSE ACTION.

    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.''.

SEC. 430. 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) in paragraph (1)--
                    (A) by striking ``enhances payment accuracy'' and 
                all that follows through ``(A) the Secretary'' and 
                inserting the following: ``enhances payment accuracy 
                and that has the following elements:
                    ``(A) Enhanced administrative funding.--With 
                respect to fiscal year 2001, the Secretary'';
                    (B) in subparagraph (A)--
                            (i) by striking ``one percentage point to a 
                        maximum of 60'' and inserting ``\1/2\ of 1 
                        percentage point to a maximum of 55''; and
                            (ii) by striking the semicolon at the end 
                        and inserting a period; and
                    (C) by striking subparagraph (B) and all that 
                follows and inserting the following:
                    ``(B) Investigation and initial sanctions.--
                            ``(i) Investigation.--Except as provided 
                        under subparagraph (C), for any fiscal year in 
                        which the Secretary determines that a 95 
                        percent statistical probability exists that the 
                        payment error rate of a State agency exceeds 
                        the national performance measure for payment 
                        error rates announced under paragraph (6) by 
                        more than 1 percentage point, other than for 
                        good cause shown, the Secretary shall 
                        investigate the administration by the State 
                        agency of the food stamp program unless the 
                        Secretary determines that sufficient 
                        information is already available to review the 
                        administration by the State agency.
                            ``(ii) Initial sanctions.--If an 
                        investigation under clause (i) results in a 
                        determination that the State agency has been 
                        seriously negligent (as determined under 
                        standards promulgated by the Secretary), the 
                        State agency shall pay the Secretary an amount 
                        that reflects the extent of such negligence (as 
                        determined under standards promulgated by the 
                        Secretary), not to exceed 5 percent of the 
                        amount provided to the State agency under 
                        subsection (a) for the fiscal year.
                    ``(C) Additional sanctions.--If, for any fiscal 
                year, the Secretary determines that a 95 percent 
                statistical probability exists that the payment error 
                rate of a State agency exceeds the national performance 
                measure for payment error rates announced under 
                paragraph (6) by more than 1 percentage point, other 
                than for good cause shown, and that the State agency 
                was sanctioned under this paragraph or was the subject 
                of an investigation or review under subparagraph (B)(i) 
                for each of the 2 immediately preceding fiscal years, 
                the State agency shall pay to the Secretary an amount 
                equal to the product obtained by multiplying--
                            ``(i) the value of all allotments issued by 
                        the State agency in the fiscal year;
                            ``(ii) the lesser of--
                                    ``(I) the ratio that--
                                            ``(aa) the amount by which 
                                        the payment error rate of the 
                                        State agency for the fiscal 
                                        year exceeds by more than 1 
                                        percentage point the national 
                                        performance measure for the 
                                        fiscal year; bears to
                                            ``(bb) 10 percent; or
                                    ``(II) 1; and
                            ``(iii) the amount by which the payment 
                        error rate of the State agency for the fiscal 
                        year exceeds by more than 1 percentage point 
                        the national performance measure for the fiscal 
                        year.
                    ``(D) Corrective action plans.--The Secretary shall 
                foster management improvements by the States by 
                requiring State agencies to develop and implement 
                corrective action plans to reduce payment errors.'';
            (2) in paragraph (2)(A), by inserting before the semicolon 
        the following: ``, as adjusted downward as appropriate under 
        paragraph (10)'';
            (3) 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, 
        enhanced administrative funding, claim for payment error under 
        paragraph (1), or performance under the performance measures 
        under paragraph (11).'';
            (4) in paragraph (5), 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 
        payment error rate for the State agency for the fiscal year, to 
        comply with paragraph (10), and to determine the amount of 
        enhanced administrative funding under paragraph (1)(A), high 
        performance bonus payments under paragraph (11), or claims 
        under subparagraph (B) or (C) of paragraph (1).'';
            (5) in paragraph (6)--
                    (A) in the first and third sentences, by striking 
                ``paragraph (5)'' each place it appears and inserting 
                ``paragraph (8)''; and
                    (B) in the first sentence, by inserting ``(but 
                determined without regard to paragraph (10))'' before 
                ``times that''; and
            (6) by adding at the end the following:
            ``(10) Adjustments of payment error rate.--
                    ``(A) Fiscal year 2002.--
                            ``(i) Adjustment for higher percentage of 
                        households with earned income.--Subject to 
                        subparagraph (B), with respect to fiscal year 
                        2002, in applying paragraph (1), the Secretary 
                        shall adjust the payment error rate determined 
                        under paragraph (2)(A) as necessary to take 
                        into account any increases in errors that 
                        result from the State agency's serving a higher 
                        percentage of households with earned income 
                        than the lesser of--
                                    ``(I) the percentage of households 
                                with earned income that receive food 
                                stamps in all States; or
                                    ``(II) the percentage of households 
                                with earned income that received food 
                                stamps in the State in fiscal year 
                                1992.
                            ``(ii) Adjustment for higher percentage of 
                        households with noncitizen members.--Subject to 
                        subparagraph (B), with respect to fiscal year 
                        2002, in applying paragraph (1), the Secretary 
                        shall adjust the payment error rate determined 
                        under paragraph (2)(A) as necessary to take 
                        into account any increases in errors that 
                        result from the State agency's serving a higher 
                        percentage of households with 1 or more members 
                        who are not United States citizens than the 
                        lesser of--
                                    ``(I) the percentage of households 
                                with 1 or more members who are not 
                                United States citizens that receive 
                                food stamps in all States; or
                                    ``(II) the percentage of households 
                                with 1 or more members who are not 
                                United States citizens that received 
                                food stamps in the State in fiscal year 
                                1998.
                    ``(B) Expanded applicability to state agencies 
                subject to sanctions.--In the case of a State agency 
                subject to sanctions for fiscal year 2001 or any fiscal 
                year thereafter under paragraph (1), the adjustments 
                described in subparagraph (A) shall apply to the State 
                agency for the fiscal year.
                    ``(C) Additional adjustments.--For fiscal year 2003 
                and each fiscal year thereafter, the Secretary may make 
                such additional adjustments to the payment error rate 
                determined under paragraph (2)(A) as the Secretary 
                determines to be consistent with achieving the purposes 
                of this Act.''.
    (b) Applicability.--Except as otherwise provided in the amendments 
made by subsection (a), the amendments made by subsection (a) shall 
apply to fiscal year 2001 and each fiscal year thereafter.

SEC. 431. 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 Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 432. BONUSES FOR STATES THAT DEMONSTRATE HIGH PERFORMANCE.

    (a) In General.--Section 16(c) of the Food Stamp Act of 1977 (7 
U.S.C. 2025(c)) (as amended by section 430(a)(6)) is amended by adding 
at the end the following:
            ``(11) High performance bonus payments.--
                    ``(A) In general.--The Secretary shall--
                            ``(i) with respect to fiscal year 2002 and 
                        each fiscal year thereafter, measure the 
                        performance of each State agency with respect 
                        to each of the performance measures specified 
                        in subparagraph (B); and
                            ``(ii) in fiscal year 2003 and each fiscal 
                        year thereafter, subject to subparagraphs (C) 
                        and (D), make high performance bonus payments 
                        to the State agencies with the highest or most 
                        improved performance with respect to those 
                        performance measures.
                    ``(B) Performance measures.--The performance 
                measures specified in this subparagraph are--
                            ``(i) the ratio, expressed as a percentage, 
                        that--
                                    ``(I) the number of households in 
                                the State that--
                                            ``(aa) receive food stamps;
                                            ``(bb) have incomes less 
                                        than 130 percent of the poverty 
                                        line (as defined in section 673 
                                        of the Community Services Block 
                                        Grant Act (42 U.S.C. 9902));
                                            ``(cc) have annual earnings 
                                        equal to at least 1000 times 
                                        the Federal minimum hourly rate 
                                        under the Fair Labor Standards 
                                        Act of 1938 (29 U.S.C. 201 et 
                                        seq.); and
                                            ``(dd) have children under 
                                        age 18; bears to
                                    ``(II) the number of households in 
                                the State that meet the criteria 
                                specified in items (bb) through (dd) of 
                                subclause (I); and
                            ``(ii) 4 additional performance measures, 
                        established by the Secretary in consultation 
                        with the National Governors Association, the 
                        American Public Human Services Association, and 
                        the National Conference of State Legislatures 
                        not later than 180 days after the date of 
                        enactment of this paragraph, of which not less 
                        than 1 performance measure shall relate to 
                        provision of timely and appropriate services to 
                        applicants for and recipients of food stamp 
                        benefits.
                    ``(C) High performance bonus payments.--
                            ``(i) Definition of caseload.--In this 
                        subparagraph, the term `caseload' has the 
                        meaning given the term in section 6(o)(6)(A).
                            ``(ii) Amount of payments.--
                                    ``(I) In general.--In fiscal year 
                                2003 and each fiscal year thereafter, 
                                the Secretary shall--
                                            ``(aa) make 1 high 
                                        performance bonus payment of 
                                        $6,000,000 for each of the 5 
                                        performance measures under 
                                        subparagraph (B); and
                                            ``(bb) allocate the high 
                                        performance bonus payment with 
                                        respect to each performance 
                                        measure in accordance with 
                                        subclauses (II) and (III).
                                    ``(II) Payments for performance 
                                measures.--In fiscal year 2003 and each 
                                fiscal year thereafter, the Secretary 
                                shall allocate, in accordance with 
                                subclause (III), the high performance 
                                bonus payment made for each performance 
                                measure under subparagraph (B) among 
                                the 6 State agencies with, as 
                                determined by the Secretary by 
                                regulation--
                                            ``(aa) the greatest 
                                        improvement in the level of 
                                        performance with respect to the 
                                        performance measure between the 
                                        2 most recent years for which 
                                        the Secretary determines that 
                                        reliable data are available;
                                            ``(bb) the highest 
                                        performance in the performance 
                                        measure for the most recent 
                                        year for which the Secretary 
                                        determines that reliable data 
                                        are available; or
                                            ``(cc) a combination of the 
                                        greatest improvement described 
                                        in item (aa) and the highest 
                                        performance described in item 
                                        (bb).
                                    ``(III) Allocation among state 
                                agencies eligible for payments.--A high 
                                performance bonus payment under 
                                subclause (II) made for a performance 
                                measure shall be allocated among the 6 
                                State agencies eligible for the payment 
                                in the ratio that--
                                            ``(aa) the caseload of each 
                                        of the 6 State agencies 
                                        eligible for the payment; bears 
                                        to
                                            ``(bb) the caseloads of the 
                                        6 State agencies eligible for 
                                        the payment.
                    ``(D) Prohibition on receipt of high performance 
                bonus payments by state agencies subject to 
                sanctions.--If, for any fiscal year, a State agency is 
                subject to a sanction under paragraph (1), the State 
                agency shall not be eligible for a high performance 
                bonus payment for the fiscal year.
                    ``(E) Payments not subject to judicial review.--A 
                determination by the Secretary whether, and in what 
                amount, to make a high performance bonus payment under 
                this paragraph shall not be subject to judicial 
                review.''.
    (b) Applicability.--The amendment made by subsection (a) takes 
effect on the date of enactment of this Act.

SEC. 433. 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)--
                    (A) by striking ``, to remain available until 
                expended,''; and
                    (B) by striking clause (vii) and inserting the 
                following:
                            ``(vii) for each of fiscal years 2002 
                        through 2006, $90,000,000, to remain available 
                        until expended.'';
            (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 
                        $25,000,000 for each of fiscal years 2002 
                        through 2006 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--
                                    ``(I) exhaust the allocation to the 
                                State agency under subparagraph (A) 
                                (including any reallocation that has 
                                been made available under subparagraph 
                                (C)); and
                                    ``(II) make and comply with a 
                                commitment to offer a position in a 
                                program described in subparagraph (B) 
                                or (C) of section 6(o)(2) to each 
                                applicant or recipient who--
                                            ``(aa) is in the last month 
                                        of the 6-month period described 
                                        in section 6(o)(2);
                                            ``(bb) is not eligible for 
                                        an exception under section 
                                        6(o)(3);
                                            ``(cc) is not eligible for 
                                        a waiver under section 6(o)(4); 
                                        and
                                            ``(dd) is not eligible for 
                                        an exemption under section 
                                        6(o)(6).''.
    (b) Rescission of Carryover Funds.--Notwithstanding any other 
provision of law, funds provided under section 16(h)(1)(A) of the Food 
Stamp Act of 1977 (7 U.S.C. 2025(h)(1)(A)) for any fiscal year before 
fiscal year 2002 shall cease to be available 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 
``$25 per month'' and inserting ``$50 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 ``$25'' and 
inserting ``$50''.
    (e) Effective Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 434. 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 ``2006''; and
            (2) in subparagraph (B)(ii), by striking ``2002'' and 
        inserting ``2006''.
    (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 ``2006''.
    (c) Grants To Improve Food Stamp Participation.--Section 
17(i)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C. 2026(i)(1)(A)) is 
amended in the first sentence by striking ``2002'' and inserting 
``2006''.
    (d) 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 ``2002'' and inserting ``2006''.

SEC. 435. COORDINATION OF PROGRAM INFORMATION EFFORTS.

    Section 16(k)(5) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(k)(5)) is amended--
            (1) in subparagraph (A), by striking ``No funds'' and 
        inserting ``Except as provided in subparagraph (C), no funds''; 
        and
            (2) by adding at the end the following:
                    ``(C) Food stamp informational activities.--
                Subparagraph (A) shall not apply to any funds or 
                expenditures described in clause (i) or (ii) of 
                subparagraph (B) used to pay the costs of any activity 
                that is eligible for reimbursement under subsection 
                (a)(4).''.

SEC. 436. EXPANDED GRANT AUTHORITY.

    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.''.

SEC. 437. ACCESS AND OUTREACH PILOT PROJECTS.

    Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended 
by striking subsection (h) and inserting the following:
    ``(h) Access and Outreach Pilot Projects.--
            ``(1) In general.--The Secretary shall make grants to State 
        agencies and other entities to pay the Federal share of the 
        eligible costs of projects to improve--
                    ``(A) access by eligible individuals to benefits 
                under the food stamp program; or
                    ``(B) outreach to individuals eligible for those 
                benefits.
            ``(2) Federal share.--The Federal share shall be 75 
        percent.
            ``(3) Types of projects.--To be eligible for a grant under 
        this subsection, a project may consist of--
                    ``(A) establishing a single site at which 
                individuals may apply for--
                            ``(i) benefits under the food stamp 
                        program; and
                            ``(ii)(I) supplemental security income 
                        benefits under title XVI of the Social Security 
                        Act (42 U.S.C. 1381 et seq.);
                            ``(II) benefits under the medicaid program 
                        under title XIX of the Social Security Act (42 
                        U.S.C. 1396 et seq.);
                            ``(III) benefits under the State children's 
                        health insurance program under title XXI of the 
                        Social Security Act (42 U.S.C. 1397aa et seq.);
                            ``(IV) benefits under the special 
                        supplemental nutrition program for women, 
                        infants, and children under section 17 of the 
                        Child Nutrition Act of 1966 (42 U.S.C. 1786); 
                        or
                            ``(V) benefits under such other programs as 
                        the Secretary determines to be appropriate;
                    ``(B) developing forms that allow an individual to 
                apply for more than 1 of the programs referred to in 
                subparagraph (A);
                    ``(C) dispatching State agency personnel to conduct 
                outreach and enroll individuals in the food stamp 
                program and other programs in nontraditional venues 
                (such as shopping malls, schools, community centers, 
                county fairs, clinics, food banks, and job training 
                centers);
                    ``(D) developing systems to enable increased 
                participation in the provision of benefits under the 
                food stamp program through farmers' markets, roadside 
                stands, and other community-supported agriculture 
                programs, including wireless electronic benefit 
                transfer systems and other systems appropriate to open-
                air settings where farmers and other vendors sell 
                directly to consumers;
                    ``(E) allowing individuals to submit applications 
                for the food stamp program by means of the telephone or 
                the Internet, in particular individuals who live in 
                rural areas, elderly individuals, and individuals with 
                disabilities;
                    ``(F) encouraging consumption of fruit and 
                vegetables by developing a cost-effective system for 
                providing discounts for purchases of fruit and 
                vegetables made through use of electronic benefit 
                transfer cards;
                    ``(G) reducing barriers to participation by 
                individuals, with emphasis on working families, 
                eligible immigrants, elderly individuals, and 
                individuals with disabilities;
                    ``(H) developing training materials, guidebooks, 
                and other resources to improve access and outreach;
                    ``(I) conforming verification practices under the 
                food stamp program with verification practices under 
                other assistance programs; and
                    ``(J) such other activities as the Secretary 
                determines to be appropriate.
            ``(4) Selection.--
                    ``(A) In general.--The Secretary shall develop 
                criteria for selecting recipients of grants under this 
                subsection that include the consideration of--
                            ``(i) the demonstrated record of a State 
                        agency or other entity in serving low-income 
                        individuals;
                            ``(ii) the ability of a State agency or 
                        other entity to reach hard-to-serve 
                        populations;
                            ``(iii) the level of innovative proposals 
                        in the application of a State agency or other 
                        entity for a grant; and
                            ``(iv) the development of partnerships 
                        between public and private sector entities and 
                        linkages with the community.
                    ``(B) Preference.--In selecting recipients of 
                grants under paragraph (1), the Secretary shall provide 
                a preference to any applicant that consists of a 
                partnership between a State and a private entity, such 
                as--
                            ``(i) a food bank;
                            ``(ii) a community-based organization;
                            ``(iii) a public school;
                            ``(iv) a publicly-funded health clinic;
                            ``(v) a publicly-funded day care center; 
                        and
                            ``(vi) a nonprofit health or welfare 
                        agency.
                    ``(C) Geographical distribution of recipients.--
                            ``(i) In general.--Subject to clause (ii), 
                        the Secretary shall select, from all eligible 
                        applications received, at least 1 recipient to 
                        receive a grant under this subsection from--
                                    ``(I) each region of the Department 
                                of Agriculture administering the food 
                                stamp program; and
                                    ``(II) each additional rural or 
                                urban area that the Secretary 
                                determines to be appropriate.
                            ``(ii) Exception.--The Secretary shall not 
                        be required to select grant recipients under 
                        clause (i) to the extent that the Secretary 
                        determines that an insufficient number of 
                        eligible grant applications has been received.
            ``(5) Project evaluations.--
                    ``(A) In general.--The Secretary shall conduct 
                evaluations of projects funded by grants under this 
                subsection.
                    ``(B) Limitation.--Not more than 10 percent of 
                funds made available to carry out this subsection shall 
                be used for project evaluations described in 
                subparagraph (A).
            ``(6) Maintenance of effort.--A State agency or other 
        entity shall provide assurances to the Secretary that funds 
        provided to the State agency or other entity under this 
        subsection will be used only to supplement, not to supplant, 
        the amount of Federal, State, and local funds otherwise 
        expended to carry out access and outreach activities in the 
        State under this Act.
            ``(7) Funding.--There is authorized to be appropriated to 
        carry out this subsection $3,000,000 for the period of fiscal 
        years 2003 through 2005.''.

SEC. 438. CONSOLIDATED BLOCK GRANTS AND ADMINISTRATIVE FUNDS.

    (a) Consolidated Funding.--Section 19(a)(1) of the Food Stamp Act 
of 1977 (7 U.S.C. 2028(a)(1)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``the Commonwealth of Puerto Rico'' 
                and inserting ``governmental entities specified in 
                subparagraph (D)'';
                    (B) in clause (ii), by striking ``and'' at the end; 
                and
                    (C) by striking clause (iii) and all that follows 
                and inserting the following:
            ``(iii) for fiscal year 2002, $1,356,000,000; and
            ``(iv) for each of fiscal years 2003 through 2006, the 
        amount provided in clause (iii), as adjusted by the percentage 
        by which the thrifty food plan has been adjusted under section 
        3(o)(4) between June 30, 2001, and June 30 of the immediately 
        preceding fiscal year;
to pay the expenditures for nutrition assistance programs for needy 
persons as described in subparagraphs (B) and (C).'';
            (2) in subparagraph (B)--
                    (A) by striking ``(B) The'' and inserting the 
                following:
                    ``(B) Maximum payments to commonwealth of puerto 
                rico.--
                            ``(i) In general.--The'';
                    (B) by inserting ``of Puerto Rico'' after 
                ``Commonwealth'' each place it appears; and
                    (C) by adding at the end the following:
                            ``(ii) Exception for expenditures for 
                        certain systems.--Notwithstanding subparagraph 
                        (A) and clause (i), the Commonwealth of Puerto 
                        Rico may spend not more than $6,000,000 of the 
                        amount required to be paid to the Commonwealth 
                        for fiscal year 2002 under subparagraph (A) to 
                        pay 100 percent of the costs of--
                                    ``(I) upgrading and modernizing the 
                                electronic data processing system used 
                                to carry out nutrition assistance 
                                programs for needy persons;
                                    ``(II) implementing systems to 
                                simplify the determination of 
                                eligibility to receive that nutrition 
                                assistance; and
                                    ``(III) operating systems to 
                                deliver benefits through electronic 
                                benefit transfers.''; and
            (3) by adding at the end the following:
                    ``(C) American samoa.--For each fiscal year, the 
                Secretary shall reserve 0.4 percent of the funds made 
                available under subparagraph (A) for payment to 
                American Samoa to pay 100 percent of the expenditures 
                for a nutrition assistance program extended under 
                section 601(c) of Public Law 96-597 (48 U.S.C. 
                1469d(c)).
                    ``(D) Governmental entity.--A governmental entity 
                specified in this subparagraph is--
                            ``(i) the Commonwealth of Puerto Rico; and
                            ``(ii) for fiscal year 2003 and each fiscal 
                        year thereafter, American Samoa.''.
    (b) Conforming Amendment.--Section 24 of the Food Stamp Act of 1977 
(7 U.S.C. 2033) is repealed.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section take effect on October 1, 2002.
            (2) Exception for expenditures for certain systems.--The 
        amendments made by subsection (a)(2) take effect on the date of 
        enactment of this Act.

SEC. 439. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    Section 25 of the Food Stamp Act of 1977 (7 U.S.C. 2034) is 
amended--
            (1) in subsection (b)(2)(B), by striking ``2002'' and 
        inserting ``2006'';
            (2) in subsection (d)--
                    (A) in paragraph (3), by striking ``or'' at the 
                end; and
                    (B) 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 agriculture problems of the 
        communities, such as food policy councils and food planning 
        associations; or
            ``(5) meet, as soon as practicable, specific neighborhood, 
        local, or State food and agriculture needs, including needs 
        for--
                    ``(A) infrastructure improvement and development;
                    ``(B) planning for long-term solutions; or
                    ``(C) the creation of innovative marketing 
                activities that mutually benefit farmers and low-income 
                consumers.''; and
            (3) in subsection (e)(1), by striking ``50'' and inserting 
        ``75''.

SEC. 440. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD ASSISTANCE 
              PROGRAM.

    (a) In General.--Section 27 of the Food Stamp Act of 1977 (7 U.S.C. 
2036) is amended--
            (1) in subsection (a)--
                    (A) by striking ``1997 through 2002'' and inserting 
                ``2002 through 2006''; and
                    (B) by striking ``$100,000,000'' and inserting 
                ``$110,000,000''; and
            (2) by adding at the end the following:
    ``(c) Use of Funds for Related Costs.--
            ``(1) In general.--For each of fiscal years 2002 through 
        2006, the Secretary shall use $10,000,000 of the funds made 
        available under subsection (a) to pay the direct and indirect 
        costs of States relating to the processing, storing, 
        transporting, and distributing to eligible recipient agencies 
        of--
                    ``(A) commodities purchased by the Secretary under 
                subsection (a); and
                    ``(B) commodities acquired from other sources, 
                including commodities acquired by gleaning (as defined 
                in section 111(a) of the Hunger Prevention Act of 1988 
                (7 U.S.C. 612c note; Public Law 100-435)).
            ``(2) Allocation of funds.--The amount required to be used 
        in accordance with paragraph (1) shall be allocated in 
        accordance with section 204(a) of the Emergency Food Assistance 
        Act of 1983 (7 U.S.C. 7508(a)).''.
    (b) Effective Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 441. INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMUNITY PROBLEMS.

    The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is amended by 
adding at the end the following:

``SEC. 28. INNOVATIVE PROGRAMS FOR ADDRESSING COMMON COMMUNITY 
              PROBLEMS.

    ``(a) In General.--The Secretary shall offer to enter into a 
contract with a nongovernmental organization described in subsection 
(b) to coordinate with Federal agencies, States, political 
subdivisions, and nongovernmental organizations (referred to in this 
section as `targeted entities') to develop, and recommend to the 
targeted entities, innovative programs for addressing common community 
problems, including loss of farms, rural poverty, welfare dependency, 
hunger, the need for job training, juvenile crime prevention, and the 
need for self-sufficiency by individuals and communities.
    ``(b) Nongovernmental Organization.--The nongovernmental 
organization referred to in subsection (a)--
            ``(1) shall be selected on a competitive basis; and
            ``(2) as a condition of entering into the contract--
                    ``(A) shall be experienced in working with targeted 
                entities, and in organizing workshops that demonstrate 
                programs to targeted entities;
                    ``(B) shall be experienced in identifying programs 
                that effectively address problems described in 
                subsection (a) that can be implemented by other 
                targeted entities;
                    ``(C) shall agree--
                            ``(i) to contribute in-kind resources 
                        toward the establishment and maintenance of 
                        programs described in subsection (a); and
                            ``(ii) to provide to targeted entities, 
                        free of charge, information on the programs;
                    ``(D) shall be experienced in, and capable of, 
                receiving information from, and communicating with, 
                targeted entities throughout the United States; and
                    ``(E) shall be experienced in operating a national 
                information clearinghouse that addresses 1 or more of 
                the problems described in subsection (a).
    ``(c) Audits.--The Secretary shall establish auditing procedures 
and otherwise ensure the effective use of funds made available under 
this section.
    ``(d) Funding.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this section, and on October 1, 2002, out of any 
        funds in the Treasury not otherwise appropriated, the Secretary 
        of the Treasury shall transfer to the Secretary of Agriculture 
        to carry out this section $200,000, to remain available until 
        expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.''.

SEC. 442. REPORT ON USE OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    Not later than 1 year after the date of enactment of this Act, the 
Secretary of Agriculture shall submit to Congress a report on--
            (1) difficulties relating to use of electronic benefit 
        transfer systems in issuance of food stamp benefits under the 
        Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
            (2) the extent to which there exists fraud, and the types 
        of fraud that exist, in use of the electronic benefit transfer 
        systems; and
            (3) the efforts being made by the Secretary of Agriculture, 
        retailers, electronic benefit transfer system contractors, and 
        States to address the problems described in paragraphs (1) and 
        (2).

SEC. 443. VITAMIN AND MINERAL SUPPLEMENTS.

    (a) In General.--Section 3(g)(1) of the Food Stamp Act of 1977 (7 
U.S.C. 2012(g)(1)) is amended by striking ``or food product'' and 
inserting ``, food product, or dietary supplement that provides 
exclusively 1 or more vitamins or minerals''.
    (b) Impact Study.--
            (1) In general.--Not later than April 1, 2003, the 
        Secretary of Agriculture shall enter into a contract with a 
        scientific research organization to study and develop a report 
        on the technical issues, economic impacts, and health effects 
        associated with allowing individuals to use benefits under the 
        Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to purchase 
        dietary supplements that provide exclusively 1 or more vitamins 
        or minerals (referred to in this subsection as ``vitamin-
        mineral supplements'').
            (2) Required elements.--At a minimum, the study shall 
        examine--
                    (A) the extent to which problems arise in the 
                purchase of vitamin-mineral supplements with electronic 
                benefit transfer cards;
                    (B) the extent of any difficulties in 
                distinguishing vitamin-mineral supplements from herbal 
                and botanical supplements for which food stamp benefits 
                may not be used;
                    (C) whether participants in the food stamp program 
                spend more on vitamin-mineral supplements than 
                nonparticipants;
                    (D) to what extent vitamin-mineral supplements are 
                substituted for other foods purchased with use of food 
                stamp benefits;
                    (E) the proportion of the average food stamp 
                allotment that is being used to purchase vitamin-
                mineral supplements; and
                    (F) the extent to which the quality of the diets of 
                participants in the food stamp program has changed as a 
                result of allowing participants to use food stamp 
                benefits to purchase vitamin-mineral supplements.
            (3) Report.--The report required under paragraph (1) shall 
        be submitted to the Secretary of Agriculture not later than 2 
        years after the date on which the contract referred to in that 
        paragraph is entered into.
            (4) Authorization of appropriations.--There is authorized 
        to be appropriated $3,000,000 to carry out this subsection.

                  Subtitle B--Miscellaneous Provisions

SEC. 451. REAUTHORIZATION OF COMMODITY PROGRAMS.

    (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 ``2006''.
    (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 2006, the Secretary shall provide to each State agency 
        from funds made available to carry out that section (including 
        any such funds remaining available from the preceding fiscal 
        year), a grant per assigned caseload slot for administrative 
        costs incurred by the State agency and local agencies in the 
        State in operating the commodity supplemental food program.
            ``(2) Amount of grants.--For each of fiscal years 2003 
        through 2006, the amount of each grant per caseload slot shall 
        be equal to $50, adjusted by the percentage change between--
                    ``(A) the value of the State and local government 
                price index, as published by the Bureau of Economic 
                Analysis of the Department of Commerce, for the 12-
                month period ending June 30 of the second preceding 
                fiscal year; and
                    ``(B) the value of that index for the 12-month 
                period ending June 30 of the preceding fiscal year.''; 
                and
            (2) in subsection (d)(2), by striking ``2002'' each place 
        it appears and inserting ``2006''.
    (c) 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 ``2006''.
    (d) 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 ``2002'' and inserting ``2006'';
            (2) by striking ``administrative''; and
            (3) by inserting ``storage,'' after ``processing,''.

SEC. 452. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS.

    (a) 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 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 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) Applicability.--The amendments made by this subsection 
        shall apply to fiscal year 2004 and each fiscal year 
        thereafter.
    (b) Work Requirement for Legal Immigrants.--
            (1) Working immigrant families.--Section 
        402(a)(2)(B)(ii)(I) of the Personal Responsibility and Work 
        Opportunity Reconciliation Act of 1996 (8 U.S.C. 
        1612(a)(2)(B)(ii)(I)) is amended by striking ``40'' and 
        inserting ``40 (or 16, in the case of the specified Federal 
        program described in paragraph (3)(B))''.
            (2) Conforming amendments.--
                    (A) Section 213A(a)(3)(A) of the Immigration and 
                Nationality Act (8 U.S.C. 1183a(a)(3)(A)) is amended by 
                striking ``40'' and inserting ``40 (or 16, in the case 
                of the specified Federal program described in section 
                402(a)(3)(B) of the Personal Responsibility and Work 
                Opportunity Reconciliation Act of 1996 (8 U.S.C. 
                1612(a)(3)(B)))''.
                    (B) Section 421(b)(2)(A) of the Personal 
                Responsibility and Work Opportunity Reconciliation Act 
                of 1996 (8 U.S.C. 1631(b)(2)(A)) is amended by striking 
                ``40'' and inserting ``40 (or 16, in the case of the 
                specified Federal program described in section 
                402(a)(3)(B))''.
    (c) Restoration of Benefits to Refugees and Asylees.--Section 
402(a)(2) of the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)) is amended--
            (1) in subparagraph (A), by striking ``programs described 
        in paragraph (3)'' and inserting ``program described in 
        paragraph (3)(A)''; and
            (2) by adding at the end the following:
                    ``(L) Food stamp exception for refugees and 
                asylees.--With respect to eligibility for benefits for 
                the specified Federal program described in paragraph 
                (3)(B), paragraph (1) shall not apply to an alien with 
                respect to which an action described in subparagraph 
                (A) was taken and was not revoked.''.
    (d) 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''.

SEC. 453. COMMODITIES FOR SCHOOL LUNCH PROGRAMS.

    (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 Date.--The amendment made by this section takes 
effect on the date of enactment of this Act.

SEC. 454. 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, 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 Date.--The amendment made by this section takes 
effect on the date of enactment of this Act.

SEC. 455. 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 Date.--The amendments made by this section take 
effect on the date of enactment of this Act.

SEC. 456. SENIORS FARMERS' MARKET NUTRITION PROGRAM.

    (a) Establishment.--The Secretary of Agriculture shall carry out 
and expand a seniors farmers' market nutrition program.
    (b) Program Purposes.--The purposes of the seniors farmers' market 
nutrition program are--
            (1) to provide to low-income seniors resources in the form 
        of fresh, nutritious, unprepared, locally grown fruits, 
        vegetables, and herbs from farmers' markets, roadside stands, 
        and community-supported agriculture programs;
            (2) to increase domestic consumption of agricultural 
        commodities by expanding or assisting in the expansion of 
        domestic farmers' markets, roadside stands, and community-
        supported agriculture programs; and
            (3) to develop or aid in the development of new farmers' 
        markets, roadside stands, and community-supported agriculture 
        programs.
    (c) Regulations.--The Secretary of Agriculture may promulgate such 
regulations as the Secretary considers necessary to carry out the 
seniors farmers' market nutrition program under this section.
    (d) Funding.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, and on October 1, 2002, and each October 
        1 thereafter through October 1, 2005, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary of Agriculture to 
        carry out this section $15,000,000.
            (2) Receipt and acceptance.--The Secretary of Agriculture 
        shall be entitled to receive, shall accept, and shall use to 
        carry out this section the funds transferred under paragraph 
        (1), without further appropriation.

SEC. 457. FRUIT AND VEGETABLE PILOT PROGRAM.

    (a) In General.--In the school year beginning July 2002, the 
Secretary of Agriculture shall use funds made available under section 
32 of the Act of August 24, 1935 (7 U.S.C. 612c), to conduct 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 fruits and vegetables throughout the school 
day in--
            (1) a cafeteria;
            (2) a student lounge; or
            (3) another designated room of the school.
    (b) 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.
    (c) Evaluation of Pilot Program.--
            (1) In general.--The Secretary of Agriculture shall conduct 
        an evaluation of the results of the pilot program to 
        determine--
                    (A) whether students took advantage of the pilot 
                program;
                    (B) whether interest in the pilot program increased 
                or lessened over time; and
                    (C) what effect, if any, the pilot program had on 
                vending machine sales.
            (2) Funding.--The Secretary shall use $200,000 of the funds 
        described in subsection (a) to carry out the evaluation under 
        this subsection.

SEC. 458. CONGRESSIONAL HUNGER FELLOWS PROGRAM.

    (a) Short Title.--This section may be cited as the ``Congressional 
Hunger Fellows Act of 2001''.
    (b) Findings.--Congress finds that--
            (1) there are--
                    (A) a critical need for compassionate individuals 
                who are committed to assisting people who suffer from 
                hunger; and
                    (B) a need for those individuals to initiate and 
                administer solutions to the hunger problem;
            (2) Bill Emerson, the distinguished late Representative 
        from the 8th District of Missouri, demonstrated--
                    (A) his commitment to solving the problem of hunger 
                in a bipartisan manner;
                    (B) his commitment to public service; and
                    (C) his great affection for the institution and the 
                ideals of Congress;
            (3) George T. (Mickey) Leland, the distinguished late 
        Representative from the 18th District of Texas, demonstrated--
                    (A) his compassion for individuals in need;
                    (B) his high regard for public service; and
                    (C) his lively exercise of political talents;
            (4) 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; and
            (5) since those 2 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, it is especially appropriate to 
        honor the memory of Mr. Emerson and Mr. Leland by establishing 
        a fellowship program to develop and train the future leaders of 
        the United States to pursue careers in humanitarian service.
    (c) Definitions.--In this section:
            (1) Appropriate congressional committees.--The term 
        ``appropriate congressional committees'' means--
                    (A) the Committee on Agriculture and the Committee 
                on International Relations of the House of 
                Representatives; and
                    (B) the Committee on Agriculture, Nutrition, and 
                Forestry and the Committee on Foreign Relations of the 
                Senate.
            (2) Board.--The term ``Board'' means the Board of Trustees 
        of the Program.
            (3) Fund.--The term ``Fund'' means the Congressional Hunger 
        Fellows Trust Fund established by subsection (g).
            (4) Program.--The term ``Program'' means the Congressional 
        Hunger Fellows Program established by subsection (d).
    (d) Establishment.--There is established as an independent entity 
of the legislative branch of the United States Government an entity to 
be known as the ``Congressional Hunger Fellows Program''.
    (e) 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.--
                    (A) Appointment.--
                            (i) In general.--The Board shall be 
                        composed of 6 voting members appointed under 
                        clause (ii) and 1 nonvoting ex-officio member 
                        designated by clause (iii).
                            (ii) Voting members.--The voting members of 
                        the Board shall be the following:
                                    (I) 2 members appointed by the 
                                Speaker of the House of 
                                Representatives.
                                    (II) 1 member appointed by the 
                                minority leader of the House of 
                                Representatives.
                                    (III) 2 members appointed by the 
                                majority leader of the Senate.
                                    (IV) 1 member appointed by the 
                                minority leader of the Senate.
                            (iii) Nonvoting member.--The Executive 
                        Director of the Program shall serve as a 
                        nonvoting ex-officio member of the Board.
                    (B) Terms.--
                            (i) In general.--Each member of the Board 
                        shall serve for a term of 4 years.
                            (ii) Incomplete term.--If a member of the 
                        Board does not serve the full term of 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.
                    (C) Vacancy.--A vacancy on the Board--
                            (i) shall not affect the powers of the 
                        Board; and
                            (ii) shall be filled in the same manner as 
                        the original appointment was made.
                    (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), a 
                        member of the Board shall not receive 
                        compensation for service on the Board.
                            (ii) Travel.--A member of the Board 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 Board.
            (3) Duties.--
                    (A) Bylaws.--
                            (i) Establishment.--The Board shall 
                        establish such bylaws and other regulations as 
                        are appropriate to enable the Board to carry 
                        out this section, including the duties 
                        described in this paragraph.
                            (ii) Contents.--Bylaws and other 
                        regulations established under clause (i) shall 
                        include provisions--
                                    (I) for appropriate fiscal control, 
                                accountability for funds, and operating 
                                principles;
                                    (II) to prevent any conflict of 
                                interest, or the appearance of any 
                                conflict of interest, in--
                                            (aa) the procurement and 
                                        employment actions taken by the 
                                        Board or by any officer or 
                                        employee of the Board; and
                                            (bb) 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) Submission to congress.--Not later 
                        than 90 days after the date of the first 
                        meeting of the Board, the Chairperson of the 
                        Board shall submit to the appropriate 
                        congressional committees a copy of the bylaws 
                        established by the Board.
                    (B) Budget.--For each fiscal year in which the 
                Program is in operation--
                            (i) the Board shall determine a budget for 
                        the Program for the fiscal year; and
                            (ii) all spending by the Program shall be 
                        in accordance with the 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 
                shall determine--
                            (i) the priority of the programs to be 
                        carried out under this section; and
                            (ii) the amount of funds to be allocated 
                        for the fellowships established under 
                        subsection (f)(3)(A).
    (f) 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;
                    (B) to recognize the needs of people who are hungry 
                and poor;
                    (C) to provide assistance and compassion for people 
                in need;
                    (D) to increase awareness of the importance of 
                public service; and
                    (E) to provide training and development 
                opportunities for the leaders through placement in 
                programs operated by appropriate entities.
            (2) Authority.--The Program may develop fellowships to 
        carry out the purposes of the Program, 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.
                            (ii) Focus.--
                                    (I) Bill emerson hunger 
                                fellowship.--The Bill Emerson Hunger 
                                Fellowship shall address hunger and 
                                other humanitarian needs in the United 
                                States.
                                    (II) Mickey leland hunger 
                                fellowship.--The Mickey Leland Hunger 
                                Fellowship shall address international 
                                hunger and other humanitarian needs.
                            (iii) Work plan.--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 the 
                        specific duties and responsibilities relating 
                        to the objectives.
                    (C) Period of fellowship.--
                            (i) Emerson fellowship.--A Bill Emerson 
                        Hunger Fellowship awarded under this paragraph 
                        shall be for a period of not more than 1 year.
                            (ii) Leland fellowship.--A Mickey Leland 
                        Hunger Fellowship awarded under this paragraph 
                        shall be for a period of not more than 2 years, 
                        of which not less than 1 year shall be 
                        dedicated to fulfilling the requirement of 
                        subparagraph (B)(i)(I).
                    (D) Selection of fellows.--
                            (i) In general.--A fellowship shall be 
                        awarded through 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 
                                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 the 
                                Board determines to be appropriate.
                            (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 Bill Emerson Hunger 
                                Fellowship shall be known as an 
                                ``Emerson Fellow''.
                                    (II) Leland fellow.--An individual 
                                awarded a Mickey Leland Hunger 
                                Fellowship shall be known as a ``Leland 
                                Fellow''.
            (4) Evaluations.--
                    (A) In general.--The Program shall conduct periodic 
                evaluations of the Bill Emerson and Mickey Leland 
                Hunger Fellowships.
                    (B) Required elements.--Each evaluation shall 
                include--
                            (i) an assessment of the successful 
                        completion of the work plan of each fellow;
                            (ii) an assessment of the impact of the 
                        fellowship on the fellows;
                            (iii) an assessment of the accomplishment 
                        of the purposes of the Program; and
                            (iv) an assessment of the impact of each 
                        fellow on the community.
    (g) Trust Fund.--
            (1) Establishment.--There is established in the Treasury of 
        the United States a fund to be known as the ``Congressional 
        Hunger Fellows Trust Fund'', consisting of--
                    (A) amounts appropriated to the Fund under 
                subsection (k);
                    (B) any amounts earned on investment of amounts in 
                the Fund under paragraph (2); and
                    (C) amounts received under subsection (i)(3)(A).
            (2) Investment of amounts.--
                    (A) In general.--
                            (i) Authority to invest.--The Secretary of 
                        the Treasury shall invest such portion of the 
                        Fund as is not, in the judgment of the 
                        Secretary of the Treasury, required to meet 
                        current withdrawals.
                            (ii) Types of investments.--Each investment 
                        may be made only 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 of the Treasury in 
                        consultation with the Board, has a maturity 
                        suitable for the Fund.
                    (B) Acquisition of obligations.--For the purpose of 
                investments under subparagraph (A), obligations may be 
                acquired--
                            (i) on original issue at the issue price; 
                        or
                            (ii) by purchase of outstanding obligations 
                        at the market price.
                    (C) Sale of obligations.--Any obligation acquired 
                by the Fund may be sold by the Secretary of the 
                Treasury at the market price.
                    (D) Credits to fund.--The interest on, and the 
                proceeds from the sale or redemption of, any 
                obligations held in the Fund shall be credited to and 
                form a part of the Fund.
            (3) Transfers of amounts.--
                    (A) In general.--The amounts required to be 
                transferred to the Fund under this subsection shall be 
                transferred at least monthly from the general fund of 
                the Treasury to the Fund on the basis of estimates made 
                by the Secretary of the Treasury.
                    (B) Adjustments.--Proper adjustment shall be made 
                in amounts subsequently transferred to the extent prior 
                estimates were in excess of or less than the amounts 
                required to be transferred.
    (h) Expenditures; Audits.--
            (1) In general.--The Secretary of the Treasury shall 
        transfer to the Program from the amounts described in 
        subsections (g)(2)(D) and (i)(3)(A) such sums as the Board 
        determines to be necessary to enable the Program to carry out 
        this section.
            (2) Limitation.--The Secretary may not transfer to the 
        Program the amounts appropriated to the Fund under subsection 
        (k).
            (3) Use of funds.--Funds transferred to the Program under 
        paragraph (1) shall be used--
                    (A) to provide a living allowance for the fellows;
                    (B) to defray the costs of transportation of the 
                fellows to the fellowship placement sites;
                    (C) to defray the costs of appropriate insurance of 
                the fellows, the Program, and the Board;
                    (D) to defray the costs of preservice and 
                midservice education and training of fellows;
                    (E) to pay staff described in subsection (i);
                    (F) to make end-of-service awards under subsection 
                (f)(3)(D)(iii)(II); and
                    (G) for such other purposes as the Board determines 
                to be appropriate to carry out the Program.
            (4) Audit by comptroller general.--
                    (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, reports, files, and other papers, things, or 
                property belonging to or in use by the Program and 
                necessary to facilitate the audit.
                    (C) Report to congress.--The Comptroller General 
                shall submit to the appropriate congressional 
                committees a copy of the results of each audit under 
                subparagraph (A).
    (i) Staff; Powers of Program.--
            (1) Executive director.--
                    (A) In general.--The Board shall appoint an 
                Executive Director of the Program who shall--
                            (i) administer the Program; and
                            (ii) carry out such other functions 
                        consistent with 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 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 such additional personnel as the Executive 
                Director considers necessary to carry out this section.
                    (B) Compensation.--An individual appointed under 
                subparagraph (A) shall be paid at a rate not to exceed 
                the rate payable for level GS-15 of the General 
                Schedule.
            (3) Powers.--
                    (A) Gifts.--
                            (i) In general.--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.
                            (ii) Use of gifts.--Gifts, bequests, or 
                        devises of money and proceeds from sales of 
                        other property received as gifts, bequests, or 
                        devises shall--
                                    (I) be deposited in the Fund; and
                                    (II) be available for disbursement 
                                on order of the Board.
                    (B) Procurement of temporary and intermittent 
                services.--To carry out this section, the Program may 
                procure temporary and intermittent services in 
                accordance with section 3109(b) of title 5, United 
                States Code, at rates for individuals that do not 
                exceed the daily equivalent of the annual rate of basic 
                pay payable for level GS-15 of the General Schedule.
                    (C) Contract authority.--To carry out this section, 
                the Program may, with the approval of a majority of the 
                members of the Board, contract 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.--
                            (i) In general.--Subject to clause (ii), 
                        the Program may make such other expenditures as 
                        the Program considers necessary to carry out 
                        this section.
                            (ii) Prohibition.--The Program may not 
                        expend funds to develop new or expanded 
                        projects at which fellows may be placed.
    (j) Report.--Not 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 preceding fiscal 
year that includes--
            (1) an analysis of the evaluations conducted under 
        subsection (f)(4) during the fiscal year; and
            (2) a statement of--
                    (A) the total amount of funds attributable to gifts 
                received by the Program in the fiscal year under 
                subsection (i)(3)(A); and
                    (B) the total amount of funds described in 
                subparagraph (A) that were expended to carry out the 
                Program in the fiscal year.
    (k) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $18,000,000.
    (l) Effective Date.--This section takes effect on October 1, 2002.

SEC. 459. NUTRITION INFORMATION AND AWARENESS PILOT PROGRAM.

    (a) Establishment.--The Secretary of Agriculture may establish, in 
not more than 15 States, a pilot program to increase the domestic 
consumption of fresh fruits and vegetables.
    (b) Purpose.--The purpose of the program shall be to provide funds 
to States to assist eligible public and private sector entities with 
cost-share assistance to carry out demonstration projects--
            (1) to increase fruit and vegetable consumption; and
            (2) to convey related health promotion messages.
    (c) Priority.--To the maximum extent practicable, the Secretary 
shall--
            (1) establish the program in States in which the production 
        of fruits or vegetables is a significant industry, as 
        determined by the Secretary; and
            (2) base the program on strategic initiatives, including--
                    (A) health promotion and education interventions;
                    (B) public service and paid advertising or 
                marketing activities;
                    (C) health promotion campaigns relating to locally 
                grown fruits and vegetables; and
                    (D) social marketing campaigns.
    (d) Participant Eligibility.--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 by the State 
under the program--
            (1) experience in carrying out similar projects or 
        activities;
            (2) innovation; and
            (3) the ability of the State--
                    (A) to conduct marketing campaigns for, promote, 
                and track increases in levels of, produce consumption; 
                and
                    (B) to optimize the availability of produce through 
                distribution of produce.
    (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) Use of Funds.--Funds made available to carry out this section 
shall not be made available to any foreign for-profit corporation.
    (g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $25,000,000 for each of fiscal 
years 2002 through 2006.

SEC. 460. EFFECTIVE DATE.

    Except as otherwise provided in this title, the amendments made by 
this title take effect on September 1, 2002, except that a State agency 
may, at the option of the State agency, elect not to implement any or 
all of the amendments until October 1, 2002.

                            TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

SEC. 501. 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. 502. 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, during a fiscal year, a short-
                term, temporary bridge loan made by a commercial or 
                cooperative lender to a beginning farmer or rancher for 
                the acquisition of land for a farm or ranch, if--
                            ``(i) the Secretary approved an application 
                        for a direct farm ownership loan to the 
                        beginning farmer or rancher for acquisition of 
                        the land; and
                            ``(ii) funds for direct farm ownership 
                        loans under section 346(b) were not available 
                        at the time at which the application was 
                        approved.''.

SEC. 503. LIMITATIONS ON AMOUNT OF FARM OWNERSHIP LOANS.

    Section 305 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1925) is amended by striking subsection (a) and inserting the 
following:
    ``(a) In General.--The Secretary shall not make or insure a loan 
under section 302, 303, 304, 310D, or 310E that would cause the unpaid 
indebtedness under those sections of any 1 borrower to exceed the 
lesser of--
            ``(1) the value of the farm or other security; or
            ``(2)(A) in the case of a loan made by the Secretary--
                    ``(i) to a beginning farmer or rancher, $250,000, 
                as adjusted (beginning with fiscal year 2003) by the 
                inflation percentage applicable to the fiscal year in 
                which the loan is made; or
                    ``(ii) to a borrower other than a beginning farmer 
                or rancher, $200,000; or
            ``(B) in the case of a loan guaranteed by the Secretary, 
        $700,000, as--
                    ``(i) adjusted (beginning with fiscal year 2000) by 
                the inflation percentage applicable to the fiscal year 
                in which the loan is guaranteed; and
                    ``(ii) reduced by the amount of any unpaid 
                indebtedness of the borrower on loans under subtitle B 
                that are guaranteed by the Secretary.''.

SEC. 504. JOINT FINANCING ARRANGEMENTS.

    Section 307(a)(3)(D) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1927(a)(3)(D)) is amended--
            (1) by striking ``If'' and inserting the following:
                            ``(i) In general.--Subject to clause (ii), 
                        if''; and
            (2) by adding at the end the following:
                            ``(ii) Beginning farmers and ranchers.--The 
                        interest rate charged a beginning farmer or 
                        rancher for a loan described in clause (i) 
                        shall be 50 basis points less than the rate 
                        charged farmers and ranchers that are not 
                        beginning farmers or ranchers.''.

SEC. 505. GUARANTEE PERCENTAGE FOR BEGINNING FARMERS AND RANCHERS.

    Section 309(h)(6) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1929(h)(6)) is amended by striking ``guaranteed up'' and 
all that follows through ``more than'' and inserting ``guaranteed at 95 
percent.--The Secretary shall guarantee''.

SEC. 506. 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. 507. 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 ``20 years''; and
            (2) in subsection (c)(3)(B), by striking ``10-year'' and 
        inserting ``20-year''.

SEC. 508. 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. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    ``(a) In General.--Not later than October 1, 2002, the Secretary 
shall carry out a pilot program in not fewer than 10 geographically 
dispersed States, as determined by the Secretary, to guarantee up to 5 
loans per State in each of fiscal years 2003 through 2006 made by a 
private seller of a farm or ranch to a qualified beginning farmer or 
rancher on a contract land sale basis, if the loan meets applicable 
underwriting criteria and a commercial lending institution agrees to 
serve as escrow agent.
    ``(b) Date of Commencement of Program.--The Secretary shall 
commence the pilot program on making a determination that guarantees of 
contract land sales present a risk that is comparable with the risk 
presented in the case of guarantees to commercial lenders.''.

                      Subtitle B--Operating Loans

SEC. 511. DIRECT LOANS.

    Section 311(c)(1)(A) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1941(c)(1)(A)) is amended by striking ``who has not'' and 
all that follows through ``5 years''.

SEC. 512. AMOUNT OF GUARANTEE OF LOANS FOR TRIBAL FARM OPERATIONS; 
              WAIVER OF LIMITATIONS FOR TRIBAL OPERATIONS AND OTHER 
              OPERATIONS.

    (a) Amount of Guarantee of Loans for Tribal Operations.--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 tribal operations.--
        In the case of an operating loan made to a farmer or rancher 
        who is a member of an Indian tribe and whose farm or ranch is 
        within an Indian reservation (as defined in section 
        335(e)(1)(A)(ii)), the Secretary shall guarantee 95 percent of 
        the loan.''.
    (b) Waiver of Limitations.--Section 311(c) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1941(c)) is amended--
            (1) in paragraph (1), by striking ``paragraph (3)'' and 
        inserting ``paragraphs (3) and (4)''; and
            (2) by adding at the end the following:
            ``(4) Waivers.--
                    ``(A) Tribal farm and ranch operations.--The 
                Secretary shall waive the limitation under paragraph 
                (1)(C) or (3) for a direct loan made under this 
                subtitle to a farmer or rancher who is a member of an 
                Indian tribe and whose farm or ranch is within an 
                Indian reservation (as defined in section 
                335(e)(1)(A)(ii)) if the Secretary determines that 
                commercial credit is not generally available for such 
                farm or ranch operations.
                    ``(B) Other farm and ranch operations.--On a case-
                by-case determination not subject to administrative 
                appeal, the Secretary may grant a borrower a waiver, 1 
                time only for a period of 2 years, of the limitation 
                under paragraph (1)(C) 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)).''.

                 Subtitle C--Administrative Provisions

SEC. 521. ELIGIBILITY OF 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), 
1961(a)) are amended by striking ``and joint operations'' each place it 
appears and inserting ``joint operations, and limited liability 
companies''.
    (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, or limited liability companies''.

SEC. 522. DEBT SETTLEMENT.

    Section 331(b)(4) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981(b)(4)) is amended by striking ``carried out--'' and 
all that follows through ``(B) after'' and inserting ``carried out 
after''.

SEC. 523. 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 amendment made by subsection (a) shall not 
apply to a contract entered into before the effective date of this Act.

SEC. 524. 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. 525. ANNUAL REVIEW OF BORROWERS.

    Section 333 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1983) is amended by striking paragraph (2) and inserting the 
following:
            ``(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. 526. SIMPLIFIED LOAN APPLICATIONS.

    Section 333A(g)(1) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1983a(g)(1)) is amended by striking ``of loans the 
principal amount of which is $50,000 or less'' and inserting ``of 
farmer program loans the principal amount of which is $100,000 or 
less''.

SEC. 527. INVENTORY PROPERTY.

    Section 335(c) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1985(c)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B)--
                            (i) in 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'';
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Previous lease.--In the case of real property 
        acquired before April 4, 1996, that the Secretary leased before 
        April 4, 1996, not later than 60 days after the lease expires, 
        the Secretary shall offer to sell the property in accordance 
        with paragraph (1).''; and
            (3) in paragraph (3)--
                    (A) in subparagraph (A), by striking ``subparagraph 
                (B)'' and inserting ``subparagraphs (B) and (C)''; and
                    (B) by adding at the end the following:
                    ``(C) Offer to sell or grant for farmland 
                preservation.--For the purpose of farmland 
                preservation, the Secretary shall--
                            ``(i) in consultation with the State 
                        Conservationist of each State in which 
                        inventory property is located, identify each 
                        parcel of inventory property in the State that 
                        should be preserved for agricultural use; and
                            ``(ii) offer to sell or grant an easement, 
                        restriction, development right, or similar 
                        legal right to each parcel identified under 
                        clause (i) to a State, a political subdivision 
                        of a State, or a private nonprofit organization 
                        separately from the underlying fee or other 
                        rights to the property owned by the United 
                        States.''.

SEC. 528. 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) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1991(a)(12)) is amended by striking 
subparagraph (B) and inserting the following:
                    ``(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. 529. LOAN AUTHORIZATION LEVELS.

    Section 346 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1994) is amended--
            (1) in subsection (b)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) In general.--The Secretary may make or guarantee 
        loans under subtitles A and B from the Agricultural Credit 
        Insurance Fund provided for in section 309 for not more than 
        $3,750,000,000 for each of fiscal years 2002 through 2006, of 
        which, for each fiscal year--
                    ``(A) $750,000,000 shall be for direct loans, of 
                which--
                            ``(i) $200,000,000 shall be for farm 
                        ownership loans under subtitle A; and
                            ``(ii) $550,000,000 shall be for operating 
                        loans under subtitle B; and
                    ``(B) $3,000,000,000 shall be for guaranteed loans, 
                of which--
                            ``(i) $1,000,000,000 shall be for 
                        guarantees of farm ownership loans under 
                        subtitle A; and
                            ``(ii) $2,000,000,000 shall be for 
                        guarantees of operating loans under subtitle 
                        B.''; and
                    (B) in paragraph (2)(A)(ii), by striking ``farmers 
                and ranchers'' and all that follows and inserting 
                ``farmers and ranchers 35 percent for each of fiscal 
                years 2002 through 2006.''; and
            (2) in subsection (c), by striking the last sentence.

SEC. 530. 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);
            (2) by striking subsection (c) and inserting the following:
    ``(c) Amount of Interest Rate Reduction.--
            ``(1) In general.--In return for a contract entered into by 
        a lender under subsection (b) for the reduction of the interest 
        rate paid on a loan, the Secretary shall make payments to the 
        lender in an amount equal to not more than 100 percent of the 
        cost of reducing the annual rate of interest payable on the 
        loan, except that such payments shall not exceed the cost of 
        reducing the rate by more than--
                    ``(A) in the case of a borrower other than a 
                beginning farmer or rancher, 3 percent; and
                    ``(B) in the case of a beginning farmer or rancher, 
                4 percent.
            ``(2) Beginning farmers and ranchers.--The percentage 
        reduction of the interest rate for which payments are 
        authorized to be made for a beginning farmer or rancher under 
        paragraph (1) shall be 1 percent more than the percentage 
        reduction for farmers and ranchers that are not beginning 
        farmers or ranchers.''; and
            (3) 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 25 percent of the funds 
                        used by the Secretary under subparagraph (A) to 
                        make payments for guaranteed loans made to 
                        beginning farmers and ranchers.
                            ``(ii) Duration of reservation of funds.--
                        Funds reserved for beginning farmers or 
                        ranchers under clause (i) for a fiscal year 
                        shall be reserved only until April 1 of the 
                        fiscal year.''.

SEC. 531. OPTIONS FOR SATISFACTION OF OBLIGATION TO PAY RECAPTURE 
              AMOUNT FOR SHARED APPRECIATION AGREEMENTS.

    (a) In General.--Section 353(e)(7) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2001(e)(7)) is amended--
            (1) in subparagraph (C), by redesignating clauses (i) and 
        (ii) as subclauses (I) and (II), respectively, and adjusting 
        the margins appropriately;
            (2) by redesignating subparagraphs (A) through (C) as 
        clauses (i) through (iii), respectively, and adjusting the 
        margins appropriately;
            (3) by striking the paragraph heading and inserting the 
        following:
            ``(7) Options for satisfaction of obligation to pay 
        recapture amount.--
                    ``(A) In general.--As an alternative to repaying 
                the full recapture amount at the end of the term of the 
                shared appreciation agreement (as determined by the 
                Secretary in accordance with this subsection), a 
                borrower may satisfy the obligation to pay the amount 
                of recapture by--
                            ``(i) financing the recapture payment in 
                        accordance with subparagraph (B); or
                            ``(ii) granting the Secretary an 
                        agricultural use protection and conservation 
                        easement on the property subject to the shared 
                        appreciation agreement in accordance with 
                        subparagraph (C).
                    ``(B) Financing of recapture payment.--''; and
            (4) by adding at the end the following:
                    ``(C) Agricultural use protection and conservation 
                easement.--
                            ``(i) In general.--Subject to clause (iii), 
                        the Secretary shall accept an agricultural use 
                        protection and conservation easement from the 
                        borrower for all of the real security property 
                        subject to the shared appreciation agreement in 
                        lieu of payment of the recapture amount.
                            ``(ii) Term.--The term of an easement 
                        accepted by the Secretary under this 
                        subparagraph shall be 25 years.
                            ``(iii) Conditions.--The easement shall 
                        require that the property subject to the 
                        easement shall continue to be used or conserved 
                        for agricultural and conservation uses in 
                        accordance with sound farming and conservation 
                        practices, as determined by the Secretary.
                            ``(iv) Replacement of method of satisfying 
                        obligation.--A borrower that has begun 
                        financing of a recapture payment under 
                        subparagraph (B) may replace that financing 
                        with an agricultural use protection and 
                        conservation easement under this 
                        subparagraph.''.
    (b) Applicability.--The amendments made by subsection (a) shall 
apply to a shared appreciation agreement entered into under section 
353(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 
2001(e)) that--
            (1) matures on or after the date of enactment of this Act; 
        or
            (2) matured before the date of enactment of this Act, if--
                    (A) the recapture amount was reamortized under 
                section 353(e)(7) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 2001(e)(7)) (as in effect on 
                the day before the date of enactment of this Act); or
                    (B)(i) the recapture amount had not been paid 
                before the date of enactment of this Act because of 
                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.

SEC. 532. 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. 533. 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''.

                        Subtitle D--Farm Credit

SEC. 541. 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).

SEC. 542. 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. 543. 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--
                            (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) Effective Date.--The amendments made by subsection (a) take 
effect on the date on which Farm Credit System Insurance Corporation 
premiums are due from insured Farm Credit System banks under section 
5.55 of the Farm Credit Act of 1971 (12 U.S.C. 2277a-4) for calendar 
year 2001.

SEC. 544. BOARD OF DIRECTORS OF THE FEDERAL AGRICULTURAL MORTGAGE 
              CORPORATION.

    Section 8.2(b) of the Farm Credit Act of 1971 (12 U.S.C. 2279aa-
2(b)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``15'' and inserting ``17'';
                    (B) in subparagraph (A), by striking ``common 
                stock'' and all that follows and inserting ``Class A 
                voting common stock;'';
                    (C) in subparagraph (B), by striking ``common 
                stock'' and all that follows and inserting ``Class B 
                voting common stock;'';
                    (D) by redesignating subparagraph (C) as 
                subparagraph (D); and
                    (E) by inserting after subparagraph (B) the 
                following:
                    ``(C) 2 members shall be elected by holders of 
                Class A voting common stock and Class B voting common 
                stock, 1 of whom shall be the chief executive officer 
                of the Corporation and 1 of whom shall be another 
                executive officer of the Corporation; and'';
            (2) in paragraph (3), by striking ``(2)(C)'' and inserting 
        ``(2)(D)'';
            (3) in paragraph (4)--
                    (A) in subparagraph (A), by striking ``(A) or (B)'' 
                and inserting ``(A), (B), or (C)''; and
                    (B) in subparagraph (B), by striking ``(2)(C)'' and 
                inserting ``(2)(D)'';
            (4) in paragraph (5)(A)--
                    (A) by inserting ``executive officers of the 
                Corporation or'' after ``from among persons who are''; 
                and
                    (B) by striking ``such a representative'' and 
                inserting ``such an executive officer or 
                representative'';
            (5) in paragraph (6)(B), by striking ``(A) and (B)'' and 
        inserting ``(A), (B), and (C)'';
            (6) in paragraph (7), by striking ``8 members'' and 
        inserting ``Nine members'';
            (7) in paragraph (8)--
                    (A) in the paragraph heading, by inserting ``or 
                executive officers of the corporation'' after 
                ``employees''; and
                    (B) by inserting ``or executive officers of the 
                Corporation'' after ``United States''; and
            (8) by striking paragraph (9) and inserting the following:
            ``(9) Chairperson.--
                    ``(A) Election.--The permanent board shall annually 
                elect a chairperson from among the members of the 
                permanent board.
                    ``(B) Term.--The term of the chairperson shall 
                coincide with the term served by elected members of the 
                permanent board under paragraph (6)(B).''.

                     Subtitle E--General Provisions

SEC. 551. INAPPLICABILITY OF FINALITY RULE.

    Section 281(a)(1) of the Department of Agriculture Reorganization 
Act of 1994 (7 U.S.C. 7001(a)(1)) is amended--
            (1) by striking ``This subsection'' and inserting the 
        following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), this subsection''; and
            (2) by adding at the end the following:
                    ``(B) Agricultural credit decisions.--This 
                subsection shall not apply with respect to an 
                agricultural credit decision made by such a State, 
                county, or area committee, or employee of such a 
                committee, under the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1921 et seq.).''.

SEC. 552. 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,''.
    (d) Section 360(a) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 2006b(a)) is amended by striking ``established pursuant 
to section 332''.

SEC. 553. EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b) and section 
543(b), this title and the amendments made by this title take effect on 
October 1, 2001.
    (b) Board of Directors of the Federal Agricultural Mortgage 
Corporation.--The amendments made by section 544 take effect on the 
date of enactment of this Act.

                      TITLE VI--RURAL DEVELOPMENT

                Subtitle A--Empowerment of Rural America

SEC. 601. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND.

    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--National Rural Cooperative and Business Equity Fund

``SEC. 383A. SHORT TITLE.

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

``SEC. 383B. PURPOSE.

    ``The purpose of this subtitle is to revitalize rural communities 
and enhance farm income through sustainable rural business development 
by providing Federal funds and credit enhancements to a private equity 
fund in order to encourage investments by institutional and 
noninstitutional investors for the benefit of rural America.

``SEC. 383C. DEFINITIONS.

    ``In this subtitle:
            ``(1) Authorized private investor.--The term `authorized 
        private investor' means an individual, legal entity, or 
        affiliate or subsidiary of an individual or legal entity that--
                    ``(A) is eligible to receive a loan guarantee under 
                this title;
                    ``(B) is eligible to receive a loan guarantee under 
                the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
                seq.);
                    ``(C) is created under the National Consumer 
                Cooperative Bank Act (12 U.S.C. 3011 et seq.);
                    ``(D) is an insured depository institution subject 
                to section 383E(b)(2);
                    ``(E) is a Farm Credit System institution described 
                in section 1.2(a) of the Farm Credit Act of 1971 (12 
                U.S.C. 2002(a)); or
                    ``(F) is determined by the Board to be an 
                appropriate investor in the Fund.
            ``(2) Board.--The term `Board' means the board of directors 
        of the Fund established under section 383G.
            ``(3) Fund.--The term `Fund' means the National Rural 
        Cooperative and Business Equity Fund established under section 
        383D.
            ``(4) Group of similar authorized private investors.--The 
        term `group of similar investors' means any 1 of the following:
                    ``(A) Insured depository institutions with total 
                assets of more than $250,000,000.
                    ``(B) Insured depository institutions with total 
                assets equal to or less than $250,000,000.
                    ``(C) Farm Credit System institutions described in 
                section 1.2(a) of the Farm Credit Act of 1971 (12 
                U.S.C. 2002(a)).
                    ``(D) Cooperative financial institutions (other 
                than Farm Credit System institutions).
                    ``(E) Private investors, other than those described 
                in subparagraphs (A) through (D), authorized by the 
                Secretary.
                    ``(F) Other nonprofit organizations, including 
                credit unions.
            ``(5) Insured depository institution.--The term `insured 
        depository institution' means any bank or savings association 
        the deposits of which are insured under the Federal Deposit 
        Insurance Act (12 U.S.C. 1811 et seq.).
            ``(6) Rural business.--The term `rural business' means a 
        rural cooperative, a value-added agricultural enterprise, or 
        any other business located or locating in a rural area.

``SEC. 383D. ESTABLISHMENT.

    ``(a) Authority.--
            ``(1) In general.--On certification by the Secretary that, 
        to the maximum extent practicable, the parties proposing to 
        establish a fund provide a broad representation of all of the 
        groups of similar authorized private investors described in 
        subparagraphs (A) through (F) of section 383C(4), the parties 
        may establish a non-Federal entity under State law to purchase 
        shares of, and manage a fund to be known as the `National Rural 
        Cooperative and Business Equity Fund', to generate and provide 
        equity capital to rural businesses.
            ``(2) Ownership.--
                    ``(A) In general.--To the maximum extent 
                practicable, equity ownership of the Fund shall be 
                distributed among authorized private investors 
                representing all of the groups of similar authorized 
                private investors described in subparagraphs (A) 
                through (F) of section 383C(4).
                    ``(B) Exclusion of groups.--No group of authorized 
                private investors shall be excluded from equity 
                ownership of the Fund during any period during which 
                the Fund is in existence if an authorized private 
                investor representative of the group is able and 
                willing to invest in the Fund.
    ``(b) Purposes.--The purposes of the Fund shall be--
            ``(1) to strengthen the economy of rural areas;
            ``(2) to further sustainable rural business development;
            ``(3) to encourage--
                    ``(A) start-up rural businesses;
                    ``(B) increased opportunities for small and 
                minority-owned rural businesses; and
                    ``(C) the formation of new rural businesses;
            ``(4) to enhance rural employment opportunities;
            ``(5) to provide equity capital to rural businesses, many 
        of which have difficulty obtaining equity capital; and
            ``(6) to leverage non-Federal funds for rural businesses.
    ``(c) Articles of Incorporation and Bylaws.--The articles of 
incorporation and bylaws of the Fund shall set forth purposes of the 
Fund that are consistent with the purposes described in subsection (b).

``SEC. 383E. INVESTMENT IN THE FUND.

    ``(a) In General.--Of the funds made available under section 383H, 
the Secretary shall--
            ``(1) subject to subsection (b)(1), make available to the 
        Fund $150,000,000;
            ``(2) subject to subsection (c), guarantee 50 percent of 
        each investment made by an authorized private investor in the 
        Fund; and
            ``(3) subject to subsection (d), guarantee the repayment of 
        principal of, and accrued interest on, debentures issued by the 
        Fund to authorized private investors.
    ``(b) Private Investment.--
            ``(1) Matching requirement.--Under subsection (a)(1), the 
        Secretary shall make an amount available to the Fund only after 
        an equal amount has been invested in the Fund by authorized 
        private investors in accordance with this subtitle and the 
        terms and conditions set forth in the bylaws of the Fund.
            ``(2) Insured depository institutions.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C)--
                            ``(i) an insured depository institution may 
                        be an authorized private investor in the Fund; 
                        and
                            ``(ii) an investment in the Fund may be 
                        considered to be part of the record of an 
                        institution in meeting the credit needs of the 
                        community in which the institution is located 
                        under any applicable Federal law.
                    ``(B) Investment limit.--The total investment in 
                the Fund of an insured depository institution shall not 
                exceed 5 percent of the capital and surplus of the 
                institution.
                    ``(C) Regulatory authority.--An appropriate Federal 
                banking agency may, by regulation or order, impose on 
                any insured depository institution investing in the 
                Fund, any safeguard, limitation, or condition 
                (including an investment limit that is lower than the 
                investment limit under subparagraph (B)) that the 
                Federal banking agency considers to be appropriate to 
                ensure that the institution operates--
                            ``(i) in a financially sound manner; and
                            ``(ii) in compliance with all applicable 
                        law.
    ``(c) Guarantee of Private Investments.--
            ``(1) In general.--The Secretary shall guarantee, under 
        terms and conditions determined by the Secretary, 50 percent of 
        any loss of the principal of an investment made in the Fund by 
        an authorized private investor.
            ``(2) Maximum total guarantee.--The aggregate potential 
        liability of the Secretary with respect to all guarantees under 
        paragraph (1) shall not apply to more than $300,000,000 in 
        private investments in the Fund.
            ``(3) Redemption of guarantee.--
                    ``(A) Date.--An authorized private investor in the 
                Fund may redeem a guarantee under paragraph (1), with 
                respect to the total investments in the Fund and the 
                total losses of the authorized private investor as of 
                the date of redemption--
                            ``(i) on the date that is 5 years after the 
                        date of the initial investment by the 
                        authorized private investor; or
                            ``(ii) annually thereafter.
                    ``(B) Effect of redemption.--On redemption of a 
                guarantee under subparagraph (A)--
                            ``(i) the shares in the Fund of the 
                        authorized private investor shall be redeemed; 
                        and
                            ``(ii) the authorized private investor 
                        shall be prohibited from making any future 
                        investment in the Fund.
    ``(d) Debt Securities.--
            ``(1) In general.--The Fund may, at the discretion of the 
        Board, generate additional capital through--
                    ``(A) the issuance of debt securities; and
                    ``(B) other means determined to be appropriate by 
                the Board.
            ``(2) Guarantee of debt by secretary.--
                    ``(A) In general.--The Secretary shall guarantee 
                100 percent of the principal of, and accrued interest 
                on, debentures issued by the Fund that are approved by 
                the Secretary.
                    ``(B) Maximum debt guaranteed by secretary.--The 
                outstanding value of debentures issued by the Fund and 
                guaranteed by the Secretary shall not exceed the lesser 
                of--
                            ``(i) the amount equal to twice the value 
                        of the assets held by the Fund; or
                            ``(ii) $500,000,000.
                    ``(C) Recapture of guarantee payments.--If the 
                Secretary makes a payment on a debt security issued by 
                the Fund as a result of a guarantee of the Secretary 
                under this paragraph, the Secretary shall have priority 
                over other creditors for repayment of the debt 
                security.
            ``(3) Authorized private investors.--An authorized private 
        investor may purchase debt securities issued by the Fund.

``SEC. 383F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.

    ``(a) Investments.--
            ``(1) In general.--
                    ``(A) Types.--Subject to subparagraphs (B) and (C), 
                the Fund may--
                            ``(i) make equity investments in a rural 
                        business that meets--
                                    ``(I) the requirements of paragraph 
                                (6); and
                                    ``(II) such other requirements as 
                                the Board may establish; and
                            ``(ii) extend credit to the rural business 
                        in--
                                    ``(I) the form of mezzanine debt or 
                                subordinated debt; or
                                    ``(II) any other form of quasi-
                                equity.
                    ``(B) Limitations on investments.--
                            ``(i) Total investments by a single rural 
                        business.--Subject to clause (ii), investment 
                        by the Fund in a single rural business shall 
                        not exceed the greater of--
                                    ``(I) an amount equal to 7 percent 
                                of the capital of the Fund; or
                                    ``(II) $2,000,000.
                            ``(ii) Waiver.--The Secretary may waive the 
                        limitation in clause (i) in any case in which 
                        an investment exceeding the limits specified in 
                        clause (i) is necessary to preserve prior 
                        investments in the rural business.
                            ``(iii) Total nonequity investments.--
                        Except in the case of a project to assist a 
                        rural cooperative, the total amount of 
                        nonequity investments described in subparagraph 
                        (A)(ii) that may be provided by the Fund shall 
                        not exceed 20 percent of the total investments 
                        of the Fund in the project.
                    ``(C) Limitation.--Notwithstanding subparagraph 
                (B), the amount of any investment by the Fund in a 
                rural business shall not exceed the aggregate amount 
                invested in like securities by other private entities 
                in that rural business.
            ``(2) Procedures.--The Fund shall implement procedures to 
        ensure that--
                    ``(A) the financing arrangements of the Fund meet 
                the Fund's primary focus of providing equity capital; 
                and
                    ``(B) the Fund does not compete with conventional 
                sources of credit.
            ``(3) Diversity of projects.--The Fund--
                    ``(A) shall seek to make equity investments in a 
                variety of viable projects, with a significant share of 
                investments--
                            ``(i) in smaller enterprises (as defined in 
                        section 384A) in rural communities of diverse 
                        sizes; and
                            ``(ii) in cooperative and noncooperative 
                        enterprises; and
                    ``(B) shall be managed in a manner that diversifies 
                the risks to the Fund among a variety of projects.
            ``(4) Limitation on rural businesses assisted.--The Fund 
        shall not invest in any rural business that is primarily retail 
        in nature (as determined by the Board), other than a purchasing 
        cooperative.
            ``(5) Interest rate limitations.--Returns on investments in 
        and by the Fund and returns on the extension of credit by 
        participants in projects assisted by the Fund, shall not be 
        subject to any State or Federal law establishing a maximum 
        allowable interest rate.
            ``(6) Requirements for recipients.--
                    ``(A) Other investments.--Any recipient of amounts 
                from the Fund shall make or obtain a significant 
                investment from a source of capital other than the 
                Fund.
                    ``(B) Sponsorship.--To be considered for an equity 
                investment from the Fund, a rural business investment 
                project shall be sponsored by a regional, State, or 
                local sponsoring or endorsing organization such as--
                            ``(i) a financial institution;
                            ``(ii) a development organization; or
                            ``(iii) any other established entity 
                        engaging or assisting in rural business 
                        development, including a rural cooperative.
    ``(b) Technical Assistance.--The Fund, under terms and conditions 
established by the Board, shall use not less than 2 percent of capital 
provided by the Federal Government to provide technical assistance to 
rural businesses seeking an equity investment from the Fund.
    ``(c) Annual Audit.--
            ``(1) In general.--The Board shall authorize an annual 
        audit of the financial statements of the Fund by a nationally 
        recognized auditing firm using generally accepted accounting 
        principles.
            ``(2) Availability of audit results.--The results of the 
        audit required by paragraph (1) shall be made available to 
        investors in the Fund.
    ``(d) Annual Report.--The Board shall prepare and make available to 
the public an annual report that--
            ``(1) describes the projects funded with amounts from the 
        Fund;
            ``(2) specifies the recipients of amounts from the Fund;
            ``(3) specifies the coinvestors in all projects that 
        receive amounts from the Fund; and
            ``(4) meets the reporting requirements, if any, of the 
        State under the law of which the Fund is established.
    ``(e) Other Authorities.--
            ``(1) In general.--The Board may exercise such other 
        authorities as are necessary to carry out this subtitle.
            ``(2) Oversight.--The Secretary shall enter in to a 
        contract with the Administrator of the Small Business 
        Administration under which the Administrator of the Small 
        Business Administration shall be responsible for the routine 
        duties of the Secretary in regard to the Fund.

``SEC. 383G. GOVERNANCE OF THE FUND.

    ``(a) In General.--The Fund shall be governed by a board of 
directors that represents all of the authorized private investors in 
the Fund and the Federal Government and that consists of--
            ``(1) a designee of the Secretary;
            ``(2) 2 members who are appointed by the Secretary and are 
        not Federal employees, including--
                    ``(A) 1 member with expertise in venture capital 
                investment; and
                    ``(B) 1 member with expertise in cooperative 
                development;
            ``(3) 8 members who are elected by the authorized private 
        investors with investments in the Fund; and
            ``(4) 1 member who is appointed by the Board and who is a 
        community banker from an insured depository institution that 
        has--
                    ``(A) total assets equal to or less than 
                $250,000,000; and
                    ``(B) an investment in the Fund.
    ``(b) Limitation on Voting Control.--No individual investor or 
group of authorized investors may control more than 25 percent of the 
votes on the Board.

``SEC. 383H. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated such sums as are 
necessary to carry out this subtitle.''.

SEC. 602. RURAL BUSINESS INVESTMENT PROGRAM.

    The Consolidated Farm and Rural Development Act (as amended by 
section 601) is amended by adding at the end the following:

            ``Subtitle H--Rural Business Investment Program

``SEC. 384A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Articles.--The term `articles' means articles of 
        incorporation for an incorporated body or the functional 
        equivalent or other similar documents specified by the 
        Secretary for other business entities.
            ``(2) Developmental venture capital.--The term 
        `developmental venture capital' means capital in the form of 
        equity capital investments in Rural Business Investment 
        Companies with an objective of fostering economic development 
        in rural areas.
            ``(3) Employee welfare benefit plan; pension plan.--
                    ``(A) In general.--The terms `employee welfare 
                benefit plan' and `pension plan' have the meanings 
                given the terms in section 3 of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1002).
                    ``(B) Inclusions.--The terms `employee welfare 
                benefit plan' and `pension plan' include--
                            ``(i) public and private pension or 
                        retirement plans subject to this subtitle; and
                            ``(ii) similar plans not covered by this 
                        subtitle that have been established and that 
                        are maintained by the Federal Government or any 
                        State (including by a political subdivision, 
                        agency, or instrumentality of the Federal 
                        Government or a State) for the benefit of 
                        employees.
            ``(4) Equity capital.--The term `equity capital' means 
        common or preferred stock or a similar instrument, including 
        subordinated debt with equity features.
            ``(5) Leverage.--The term `leverage' includes--
                    ``(A) debentures purchased or guaranteed by the 
                Secretary;
                    ``(B) participating securities purchased or 
                guaranteed by the Secretary; and
                    ``(C) preferred securities outstanding as of the 
                date of enactment of this subtitle.
            ``(6) License.--The term `license' means a license issued 
        by the Secretary as provided in section 384D(c).
            ``(7) Limited liability company.--The term `limited 
        liability company' means a business entity that is organized 
        and operating in accordance with a State limited liability 
        company law approved by the Secretary.
            ``(8) Member.--The term `member' means, with respect to a 
        Rural Business Investment Company that is a limited liability 
        company, a holder of an ownership interest or a person 
        otherwise admitted to membership in the limited liability 
        company.
            ``(9) Operational assistance.--The term `operational 
        assistance' means management, marketing, and other technical 
        assistance that assists a rural business concern with business 
        development.
            ``(10) Participation agreement.--The term `participation 
        agreement' means an agreement, between the Secretary and a 
        Rural Business Investment Company granted final approval under 
        section 384D(d), that requires the Rural Business Investment 
        Company to make investments in smaller enterprises in rural 
        areas.
            ``(11) Private capital.--
                    ``(A) In general.--The term `private capital' means 
                the total of--
                            ``(i) the paid-in capital and paid-in 
                        surplus of a corporate Rural Business 
                        Investment Company, the contributed capital of 
                        the partners of a partnership Rural Business 
                        Investment Company, or the equity investment of 
                        the members of a limited liability company 
                        Rural Business Investment Company; and
                            ``(ii) unfunded binding commitments, from 
                        investors that meet criteria established by the 
                        Secretary to contribute capital to the Rural 
                        Business Investment Company, except that 
                        unfunded commitments may be counted as private 
                        capital for purposes of approval by the 
                        Secretary of any request for leverage, but 
                        leverage shall not be funded based on the 
                        commitments.
                    ``(B) Exclusions.--The term `private capital' does 
                not include--
                            ``(i) any funds borrowed by a Rural 
                        Business Investment Company from any source;
                            ``(ii) any funds obtained through the 
                        issuance of leverage; or
                            ``(iii) any funds obtained directly or 
                        indirectly from the Federal Government or any 
                        State (including by a political subdivision, 
                        agency, or instrumentality of the Federal 
                        Government or a State), except for--
                                    ``(I) 50 percent of funds from the 
                                National Rural Cooperative and Business 
                                Equity Fund;
                                    ``(II) funds obtained from the 
                                business revenues (excluding any 
                                governmental appropriation) of any 
                                federally chartered or government-
                                sponsored enterprise established prior 
                                to the date of enactment of this 
                                subtitle;
                                    ``(III) funds invested by an 
                                employee welfare benefit plan or 
                                pension plan; and
                                    ``(IV) any qualified nonprivate 
                                funds (if the investors of the 
                                qualified nonprivate funds do not 
                                control, directly or indirectly, the 
                                management, board of directors, general 
                                partners, or members of the Rural 
                                Business Investment Company).
            ``(12) Qualified nonprivate funds.--The term `qualified 
        nonprivate funds' means any--
                    ``(A) funds directly or indirectly invested in any 
                applicant or Rural Business Investment Company on or 
                before the date of enactment of this subtitle, by any 
                Federal agency, other than the Department of 
                Agriculture, under a provision of law explicitly 
                mandating the inclusion of those funds in the 
                definition of the term `private capital'; and
                    ``(B) funds invested in any applicant or Rural 
                Business Investment Company by 1 or more entities of 
                any State (including by a political subdivision, 
                agency, or instrumentality of the State and including 
                any guarantee extended by those entities) in an 
                aggregate amount that does not exceed 33 percent of the 
                private capital of the applicant or Rural Business 
                Investment Company.
            ``(13) Rural business concern.--The term `rural business 
        concern' means--
                    ``(A) a public, private, or cooperative for-profit 
                or nonprofit organization;
                    ``(B) a for-profit or nonprofit business controlled 
                by an Indian tribe on a Federal or State reservation or 
                other federally recognized Indian tribal group; or
                    ``(C) any other person or entity;
        that primarily operates in a rural area, as determined by the 
        Secretary.
            ``(14) Rural business investment company.--The term `Rural 
        Business Investment Company' means a company that--
                    ``(A) has been granted final approval by the 
                Secretary under section 384D(d); and
                    ``(B) has entered into a participation agreement 
                with the Secretary.
            ``(15) Smaller enterprise.--The term `smaller enterprise' 
        means any rural business concern that, together with its 
        affiliates--
                    ``(A) has--
                            ``(i) a net financial worth of not more 
                        than $6,000,000, as of the date on which 
                        assistance is provided under this subtitle to 
                        the rural business concern; and
                            ``(ii) an average net income for the 2-year 
                        period preceding the date on which assistance 
                        is provided under this subtitle to the rural 
                        business concern, of not more than $2,000,000, 
                        after Federal income taxes (excluding any 
                        carryover losses) except that, for purposes of 
                        this clause, if the rural business concern is 
                        not required by law to pay Federal income taxes 
                        at the enterprise level, but is required to 
                        pass income through to the shareholders, 
                        partners, beneficiaries, or other equitable 
                        owners of the business concern, the net income 
                        of the business concern shall be determined by 
                        allowing a deduction in an amount equal to the 
                        total of--
                                    ``(I) if the rural business concern 
                                is not required by law to pay State 
                                (and local, if any) income taxes at the 
                                enterprise level, the net income 
                                (determined without regard to this 
                                clause), multiplied by the marginal 
                                State income tax rate (or by the 
                                combined State and local income tax 
                                rates, as applicable) that would have 
                                applied if the business concern were a 
                                corporation; and
                                    ``(II) the net income (so 
                                determined) less any deduction for 
                                State (and local) income taxes 
                                calculated under subclause (I), 
                                multiplied by the marginal Federal 
                                income tax rate that would have applied 
                                if the rural business concern were a 
                                corporation; or
                    ``(B) satisfies the standard industrial 
                classification size standards established by the 
                Administrator of the Small Business Administration for 
                the industry in which the rural business concern is 
                primarily engaged.

``SEC. 384B. PURPOSES.

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

``SEC. 384C. ESTABLISHMENT.

    ``In accordance with this subtitle, the Secretary shall establish a 
Rural Business Investment Program, under which the Secretary may--
            ``(1) enter into participation agreements with companies 
        granted final approval under section 384D(d) for the purposes 
        set forth in section 384B;
            ``(2) guarantee the debentures issued by Rural Business 
        Investment Companies as provided in section 384E; and
            ``(3) make grants to Rural Business Investment Companies, 
        and to other entities, under section 384H.

``SEC. 384D. SELECTION OF RURAL BUSINESS INVESTMENT COMPANIES.

    ``(a) Eligibility.--A company shall be eligible to apply to 
participate, as a Rural Business Investment Company, in the program 
established under this subtitle if--
            ``(1) the company is a newly formed for-profit entity or a 
        newly formed for-profit subsidiary of such an entity;
            ``(2) the company has a management team with experience in 
        community development financing or relevant venture capital 
        financing; and
            ``(3) the company will invest in enterprises that will 
        create wealth and job opportunities in rural areas, with an 
        emphasis on smaller businesses.
    ``(b) Application.--To participate, as a Rural Business Investment 
Company, in the program established under this subtitle, a company 
meeting the eligibility requirements of subsection (a) shall submit an 
application to the Secretary that includes--
            ``(1) a business plan describing how the company intends to 
        make successful developmental venture capital investments in 
        identified rural areas;
            ``(2) information regarding the community development 
        finance or relevant venture capital qualifications and general 
        reputation of the management of the company;
            ``(3) a description of how the company intends to work with 
        community organizations and to seek to address the unmet 
        capital needs of the communities served;
            ``(4) a proposal describing how the company intends to use 
        the grant funds provided under this subtitle to provide 
        operational assistance to smaller enterprises financed by the 
        company, including information regarding whether the company 
        intends to use licensed professionals, when necessary, on the 
        staff of the company or from an outside entity;
            ``(5) with respect to binding commitments to be made to the 
        company under this subtitle, an estimate of the ratio of cash 
        to in-kind contributions;
            ``(6) a description of the criteria to be used to evaluate 
        whether and to what extent the company meets the purposes of 
        the program established under this subtitle;
            ``(7) information regarding the management and financial 
        strength of any parent firm, affiliated firm, or any other firm 
        essential to the success of the business plan of the company; 
        and
            ``(8) such other information as the Secretary may require.
    ``(c) Issuance of License.--
            ``(1) Submission of application.--Each applicant for a 
        license to operate as a Rural Business Investment Company under 
        this subtitle shall submit to the Secretary an application, in 
        a form and including such documentation as may be prescribed by 
        the Secretary.
            ``(2) Procedures.--
                    ``(A) Status.--Not later than 90 days after the 
                initial receipt by the Secretary of an application 
                under this subsection, the Secretary shall provide the 
                applicant with a written report describing the status 
                of the application and any requirements remaining for 
                completion of the application.
                    ``(B) Approval or disapproval.--Within a reasonable 
                time after receiving a completed application submitted 
                in accordance with this subsection and in accordance 
                with such requirements as the Secretary may prescribe 
                by regulation, the Secretary shall--
                            ``(i) approve the application and issue a 
                        license for the operation to the applicant, if 
                        the requirements of this section are satisfied; 
                        or
                            ``(ii) disapprove the application and 
                        notify the applicant in writing of the 
                        disapproval.
            ``(3) Matters considered.--In reviewing and processing any 
        application under this subsection, the Secretary--
                    ``(A) shall determine whether--
                            ``(i) the applicant meets the requirements 
                        of subsection (d); and
                            ``(ii) the management of the applicant is 
                        qualified and has the knowledge, experience, 
                        and capability necessary to comply with this 
                        subtitle;
                    ``(B) shall take into consideration--
                            ``(i) the need for and availability of 
                        financing for rural business concerns in the 
                        geographic area in which the applicant is to 
                        commence business;
                            ``(ii) the general business reputation of 
                        the owners and management of the applicant; and
                            ``(iii) the probability of successful 
                        operations of the applicant, including adequate 
                        profitability and financial soundness; and
                    ``(C) shall not take into consideration any 
                projected shortage or unavailability of grant funds or 
                leverage.
    ``(d) Approval; Designation.--The Secretary may approve an 
applicant to operate as a Rural Business Investment Company under this 
subtitle and designate the applicant as a Rural Business Investment 
Company, if--
            ``(1) the Secretary determines that the application 
        satisfies the requirements of subsection (b);
            ``(2) the area in which the Rural Business Investment 
        Company is to conduct its operations, and establishment of 
        branch offices or agencies (if authorized by the articles), are 
        approved by the Secretary; and
            ``(3) the applicant enters into a participation agreement 
        with the Secretary.

``SEC. 384E. DEBENTURES.

    ``(a) In General.--The Secretary may guarantee the timely payment 
of principal and interest, as scheduled, on debentures issued by any 
Rural Business Investment Company.
    ``(b) Terms and Conditions.--The Secretary may make guarantees 
under this section on such terms and conditions as the Secretary 
considers appropriate, except that the term of any debenture guaranteed 
under this section shall not exceed 15 years.
    ``(c) Full Faith and Credit of the United States.--Section 381H(i) 
shall apply to any guarantee under this section.
    ``(d) Maximum Guarantee.--Under this section, the Secretary may--
            ``(1) guarantee the debentures issued by a Rural Business 
        Investment Company only to the extent that the total face 
        amount of outstanding guaranteed debentures of the Rural 
        Business Investment Company does not exceed 300 percent of the 
        private capital of the Rural Business Investment Company, as 
        determined by the Secretary; and
            ``(2) provide for the use of discounted debentures.

``SEC. 384F. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    ``(a) Issuance.--The Secretary may issue trust certificates 
representing ownership of all or a fractional part of debentures issued 
by a Rural Business Investment Company and guaranteed by the Secretary 
under this subtitle, if the certificates are based on and backed by a 
trust or pool approved by the Secretary and composed solely of 
guaranteed debentures.
    ``(b) Guarantee.--
            ``(1) In general.--The Secretary may, under such terms and 
        conditions as the Secretary considers appropriate, guarantee 
        the timely payment of the principal of and interest on trust 
        certificates issued by the Secretary or agents of the Secretary 
        for purposes of this section.
            ``(2) Limitation.--Each guarantee under this subsection 
        shall be limited to the extent of principal and interest on the 
        guaranteed debentures that compose the trust or pool.
            ``(3) Prepayment or default.--
                    ``(A) In general.--In the event a debenture in a 
                trust or pool is prepaid, or in the event of default of 
                such a debenture, the guarantee of timely payment of 
                principal and interest on the trust certificates shall 
                be reduced in proportion to the amount of principal and 
                interest the prepaid debenture represents in the trust 
                or pool.
                    ``(B) Interest.--Interest on prepaid or defaulted 
                debentures shall accrue and be guaranteed by the 
                Secretary only through the date of payment of the 
                guarantee.
                    ``(C) Redemption.--At any time during its term, a 
                trust certificate may be called for redemption due to 
                prepayment or default of all debentures.
    ``(c) Full Faith and Credit of the United States.--Section 381H(i) 
shall apply to any guarantee of a trust certificate issued by the 
Secretary under this section.
    ``(d) Subrogation and Ownership Rights.--
            ``(1) Subrogation.--If the Secretary pays a claim under a 
        guarantee issued under this section, the claim shall be 
        subrogated fully to the rights satisfied by the payment.
            ``(2) Ownership rights.--No Federal, State, or local law 
        shall preclude or limit the exercise by the Secretary of the 
        ownership rights 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.
            ``(5) Electronic registration.--Nothing in this subsection 
        prohibits the use of a book-entry or other electronic form of 
        registration for trust certificates issued under this section.

``SEC. 384G. FEES.

    ``(a) In General.--The Secretary may charge such fees as the 
Secretary considers appropriate with respect to any guarantee or grant 
issued under this subtitle.
    ``(b) Trust Certificate.--Notwithstanding subsection (a), the 
Secretary shall not collect a fee for any guarantee of a trust 
certificate under section 384F, except that any agent of the Secretary 
may collect a fee approved by the Secretary for the functions described 
in section 384F(e)(2).
    ``(c) License.--
            ``(1) In general.--The Secretary may prescribe fees to be 
        paid by each applicant for a license to operate as a Rural 
        Business Investment Company under this subtitle.
            ``(2) Use of amounts.--Fees collected under this 
        subsection--
                    ``(A) shall be deposited in the account for 
                salaries and expenses of the Secretary; and
                    ``(B) are authorized to be appropriated solely to 
                cover the costs of licensing examinations.

``SEC. 384H. OPERATIONAL ASSISTANCE GRANTS.

    ``(a) In General.--
            ``(1) Authority.--In accordance with this section, the 
        Secretary may make grants to Rural Business Investment 
        Companies and to other entities, as authorized by this 
        subtitle, to provide operational assistance to smaller 
        enterprises financed, or expected to be financed, by the 
        entities.
            ``(2) Terms.--Grants made under this subsection shall be 
        made over a multiyear period (not to exceed 10 years) under 
        such other terms as the Secretary may require.
            ``(3) Use of funds.--The proceeds of a grant made under 
        this paragraph may be used by the Rural Business Investment 
        Company receiving the grant only to--
                    ``(A) provide operational assistance in connection 
                with an equity investment (made with capital raised 
                after the effective date of this subtitle) in a 
                business located in a rural area; or
                    ``(B) pay operational expenses of the Rural 
                Business Investment Company.
            ``(4) Submission of plans.--A Rural Business Investment 
        Company shall be eligible for a grant under this section only 
        if the Rural Business Investment Company submits to the 
        Secretary, in such form and manner as the Secretary may 
        require, a plan for use of the grant.
            ``(5) Grant amount.--
                    ``(A) Rural business investment companies.--The 
                amount of a grant made under this subsection to a Rural 
                Business Investment Company shall be equal to the 
                lesser of--
                            ``(i) 50 percent of the amount of resources 
                        (in cash or in kind) raised by the Rural 
                        Business Investment Company; or
                            ``(ii) $1,000,000.
                    ``(B) Other entities.--The amount of a grant made 
                under this subsection to any entity other than a Rural 
                Business Investment Company shall be equal to the 
                resources (in cash or in kind) raised by the entity in 
                accordance with the requirements applicable to Rural 
                Business Investment Companies under this subtitle.
    ``(b) Supplemental Grants.--
            ``(1) In general.--The Secretary may make supplemental 
        grants to Rural Business Investment Companies and to other 
        entities, as authorized by this subtitle under such terms as 
        the Secretary may require, to provide additional operational 
        assistance to smaller enterprises financed, or expected to be 
        financed, by the Rural Business Investment Companies and other 
        entities.
            ``(2) Matching requirement.--The Secretary may require, as 
        a condition of any supplemental grant made under this 
        subsection, that the Rural Business Investment Company or 
        entity receiving the grant provide from resources (in cash or 
        in kind), other than resources provided by the Secretary, a 
        matching contribution equal to the amount of the supplemental 
        grant.

``SEC. 384I. RURAL BUSINESS INVESTMENT COMPANIES.

    ``(a) Organization.--For the purpose of this subtitle, a Rural 
Business Investment Company shall--
            ``(1) be an incorporated body, a limited liability company, 
        or a limited partnership organized and chartered or otherwise 
        existing under State law solely for the purpose of performing 
        the functions and conducting the activities authorized by this 
        subtitle;
            ``(2)(A) if incorporated, have succession for a period of 
        not less than 30 years unless earlier dissolved by the 
        shareholders of the Rural Business Investment Company; and
            ``(B) if a limited partnership or a limited liability 
        company, have succession for a period of not less than 10 
        years; and
            ``(3) possess the powers reasonably necessary to perform 
        the functions and conduct the activities.
    ``(b) Articles.--The articles of any Rural Business Investment 
Company--
            ``(1) shall specify in general terms--
                    ``(A) the purposes for which the Rural Business 
                Investment Company is formed;
                    ``(B) the name of the Rural Business Investment 
                Company;
                    ``(C) the area or areas in which the operations of 
                the Rural Business Investment Company are to be carried 
                out;
                    ``(D) the place where the principal office of the 
                Rural Business Investment Company is to be located; and
                    ``(E) the amount and classes of the shares of 
                capital stock of the Rural Business Investment Company;
            ``(2) may contain any other provisions consistent with this 
        subtitle that the Rural Business Investment Company may 
        determine appropriate to adopt for the regulation of the 
        business of the Rural Business Investment Company and the 
        conduct of the affairs of the Rural Business Investment 
        Company; and
            ``(3) shall be subject to the approval of the Secretary.
    ``(c) Capital Requirements.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        private capital of each Rural Business Investment Company shall 
        be not less than--
                    ``(A) $5,000,000; or
                    ``(B) $10,000,000, with respect to each Rural 
                Business Investment Company authorized or seeking 
                authority to issue participating securities to be 
                purchased or guaranteed by the Secretary under this 
                subtitle.
            ``(2) Exception.--The Secretary may, in the discretion of 
        the Secretary and based on a showing of special circumstances 
        and good cause, permit the private capital of a Rural Business 
        Investment Company described in paragraph (1)(B) to be less 
        than $10,000,000, but not less than $5,000,000, if the 
        Secretary determines that the action would not create or 
        otherwise contribute to an unreasonable risk of default or loss 
        to the Federal Government.
            ``(3) Adequacy.--In addition to the requirements of 
        paragraph (1), the Secretary shall--
                    ``(A) determine whether the private capital of each 
                Rural Business Investment Company is adequate to ensure 
                a reasonable prospect that the Rural Business 
                Investment Company will be operated soundly and 
                profitably, and managed actively and prudently in 
                accordance with the articles of the Rural Business 
                Investment Company;
                    ``(B) determine that the Rural Business Investment 
                Company will be able to comply with the requirements of 
                this subtitle; and
                    ``(C) require that at least 75 percent of the 
                capital of each Rural Business Investment Company is 
                invested in rural business concerns.
          ``(d) Diversification of Ownership.--The Secretary shall 
ensure that the management of each Rural Business Investment Company 
licensed after the date of enactment of this subtitle is sufficiently 
diversified from and unaffiliated with the ownership of the Rural 
Business Investment Company so as to ensure independence and 
objectivity in the financial management and oversight of the 
investments and operations of the Rural Business Investment Company.

``SEC. 384J. FINANCIAL INSTITUTION INVESTMENTS.

    ``(a) In General.--Except as otherwise provided in this section and 
notwithstanding any other provision of law, the following banks, 
associations, and institutions may invest in any Rural Business 
Investment Company or in any entity established to invest solely in 
Rural Business Investment Companies:
            ``(1) Any national bank.
            ``(2) Any member bank of the Federal Reserve System.
            ``(3) Any Federal savings association.
            ``(4) Any Farm Credit System institution described in 
        section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 
        2002(a)).
            ``(5) Any insured bank that is not a member of the Federal 
        Reserve System, to the extent permitted under applicable State 
        law.
    ``(b) Limitation.--No bank, association, or institution described 
in subsection (a) may make investments described in subsection (a) that 
are greater than 5 percent of the capital and surplus of the bank, 
association, or institution.
    ``(c) Limitation on Rural Business Investment Companies Controlled 
by Farm Credit System Institutions.--If a Farm Credit System 
institution described in section 1.2(a) of the Farm Credit Act of 1971 
(12 U.S.C. 2002(a)) holds more than 30 percent of the voting shares of 
a Rural Business Investment Company, either alone or in conjunction 
with other System institutions (or affiliates), the Rural Business 
Investment Company shall not provide equity investments in, or provide 
other financial assistance to, entities that are not otherwise eligible 
to receive financing from the Farm Credit System under that Act (12 
U.S.C. 2001 et seq.).

``SEC. 384K. REPORTING REQUIREMENT.

    ``Each Rural Business Investment Company that participates in the 
program established under this subtitle shall provide to the Secretary 
such information as the Secretary may require, including--
            ``(1) information relating to the measurement criteria that 
        the Rural Business Investment Company proposed in the program 
        application of the Rural Business Investment Company; and
            ``(2) in each case in which the Rural Business Investment 
        Company under this subtitle makes an investment in, or a loan 
        or grant to, a business that is not located in a rural area, a 
        report on the number and percentage of employees of the 
        business who reside in those areas.

``SEC. 384L. EXAMINATIONS.

    ``(a) In General.--Each Rural Business Investment Company that 
participates in the program established under this subtitle shall be 
subject to examinations made at the direction of the Secretary in 
accordance with this section.
    ``(b) Assistance of Private Sector Entities.--An examination under 
this section may be conducted with the assistance of a private sector 
entity that has the qualifications and the expertise necessary to 
conduct such an examination.
    ``(c) Costs.--
            ``(1) In general.--The Secretary may assess the cost of an 
        examination under this section, including compensation of the 
        examiners, against the Rural Business Investment Company 
        examined.
            ``(2) Payment.--Any Rural Business Investment Company 
        against which the Secretary assesses costs under this paragraph 
        shall pay the costs.
    ``(d) Deposit of Funds.--Funds collected under this section shall--
            ``(1) be deposited in the account that incurred the costs 
        for carrying out this section;
            ``(2) be made available to the Secretary to carry out this 
        section, without further appropriation; and
            ``(3) remain available until expended.

``SEC. 384M. INJUNCTIONS AND OTHER ORDERS.

    ``(a) In General.--
            ``(1) Application by secretary.--Whenever, in the judgment 
        of the Secretary, a Rural Business Investment Company or any 
        other person has engaged or is about to engage in any act or 
        practice that constitutes or will constitute a violation of a 
        provision of this subtitle (including any rule, regulation, 
        order, or participation agreement under this subtitle), the 
        Secretary may apply to the appropriate district court of the 
        United States for an order enjoining the act or practice, or 
        for an order enforcing compliance with the provision, rule, 
        regulation, order, or participation agreement.
            ``(2) Jurisdiction; relief.--The court shall have 
        jurisdiction over the action and, on a showing by the Secretary 
        that the Rural Business Investment Company or other person has 
        engaged or is about to engage in an act or practice described 
        in paragraph (1), a permanent or temporary injunction, 
        restraining order, or other order, shall be granted without 
        bond.
    ``(b) Jurisdiction.--
            ``(1) In general.--In any proceeding under subsection (a), 
        the court as a court of equity may, to such extent as the court 
        considers necessary, take exclusive jurisdiction over the Rural 
        Business Investment Company and the assets of the Rural 
        Business Investment Company, wherever located.
            ``(2) Trustee or receiver.--The court shall have 
        jurisdiction in any proceeding described in paragraph (1) to 
        appoint a trustee or receiver to hold or administer the assets.
    ``(c) Secretary As Trustee or Receiver.--
            ``(1) Authority.--The Secretary may act as trustee or 
        receiver of a Rural Business Investment Company.
            ``(2) Appointment.--On the request of the Secretary, the 
        court shall appoint the Secretary to act as a trustee or 
        receiver of a Rural Business Investment Company unless the 
        court considers the appointment inequitable or otherwise 
        inappropriate by reason of any special circumstances involved.

``SEC. 384N. ADDITIONAL PENALTIES FOR NONCOMPLIANCE.

    ``(a) In General.--With respect to any Rural Business Investment 
Company that violates or fails to comply with this subtitle (including 
any rule, regulation, order, or participation agreement under this 
subtitle), the Secretary may, in accordance with this section--
            ``(1) void the participation agreement between the 
        Secretary and the Rural Business Investment Company; and
            ``(2) cause the Rural Business Investment Company to 
        forfeit all of the rights and privileges derived by the Rural 
        Business Investment Company under this subtitle.
    ``(b) Adjudication of Noncompliance.--
            ``(1) In general.--Before the Secretary may cause a Rural 
        Business Investment Company to forfeit rights or privileges 
        under subsection (a), a court of the United States of competent 
        jurisdiction must find that the Rural Business Investment 
        Company committed a violation, or failed to comply, in a cause 
        of action brought for that purpose in the district, territory, 
        or other place subject to the jurisdiction of the United 
        States, in which the principal office of the Rural Business 
        Investment Company is located.
            ``(2) Parties authorized to file causes of action.--Each 
        cause of action brought by the United States under this 
        subsection shall be brought by the Secretary or by the Attorney 
        General.

``SEC. 384O. UNLAWFUL ACTS AND OMISSIONS; BREACH OF FIDUCIARY DUTY.

    ``(a) Parties Deemed To Commit a Violation.--Whenever any Rural 
Business Investment Company violates this subtitle (including any rule, 
regulation, order, or participation agreement under this subtitle), by 
reason of the failure of the Rural Business Investment Company to 
comply with this subtitle or by reason of its engaging in any act or 
practice that constitutes or will constitute a violation of this 
subtitle, the violation shall also be deemed to be a violation and an 
unlawful act committed by any person that, directly or indirectly, 
authorizes, orders, participates in, causes, brings about, counsels, 
aids, or abets in the commission of any acts, practices, or 
transactions that constitute or will constitute, in whole or in part, 
the violation.
    ``(b) Fiduciary Duties.--It shall be unlawful for any officer, 
director, employee, agent, or other participant in the management or 
conduct of the affairs of a Rural Business Investment Company to engage 
in any act or practice, or to omit any act or practice, in breach of 
the fiduciary duty of the officer, director, employee, agent, or 
participant if, as a result of the act or practice, the Rural Business 
Investment Company suffers or is in imminent danger of suffering 
financial loss or other damage.
    ``(c) Unlawful Acts.--Except with the written consent of the 
Secretary, it shall be unlawful--
            ``(1) for any person to take office as an officer, 
        director, or employee of any Rural Business Investment Company, 
        or to become an agent or participant in the conduct of the 
        affairs or management of a Rural Business Investment Company, 
        if the person--
                    ``(A) has been convicted of a felony, or any other 
                criminal offense involving dishonesty or breach of 
                trust; or
                    ``(B) has been found civilly liable in damages, or 
                has been permanently or temporarily enjoined by an 
                order, judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice 
                involving fraud, or breach of trust; and
            ``(2) for any person to continue to serve in any of the 
        capacities described in paragraph (1), if--
                    ``(A) the person is convicted of a felony, or any 
                other criminal offense involving dishonesty or breach 
                of trust; or
                    ``(B) the person is found civilly liable in 
                damages, or is permanently or temporarily enjoined 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. REMOVAL OR SUSPENSION OF DIRECTORS OR OFFICERS.

    ``Using the procedures established by the Secretary for removing or 
suspending a director or an officer of a Rural Business Investment 
Company, the Secretary may remove or suspend any director or officer of 
any Rural Business Investment Company.

``SEC. 384Q. CONTRACTING OF FUNCTIONS.

    ``Notwithstanding any other provision of law, the Secretary shall 
enter into an interagency agreement with the Administrator of the Small 
Business Administration to carry out, on behalf of the Secretary, the 
day-to-day management and operation of the program authorized by this 
subtitle.

``SEC. 384R. REGULATIONS.

    ``The Secretary may promulgate such regulations as the Secretary 
considers necessary to carry out this subtitle.

``SEC. 384S. FUNDING.

    ``(a) In General.--Not later than 30 days after the date of 
enactment of this Act, out of any funds in the Treasury not otherwise 
appropriated, the Secretary of the Treasury shall transfer to the 
Secretary of Agriculture--
            ``(1) such sums as may be necessary for the cost of 
        guaranteeing $350,000,000 of debentures under this subtitle; 
        and
            ``(2) $50,000,000 to make grants under this subtitle.
    ``(b) Receipt and Acceptance.--The Secretary shall be entitled to 
receive, shall accept, and shall use to carry out this section the 
funds transferred under subsection (a), without further appropriation.
    ``(c) Availability of Funds.--Funds transferred under subsection 
(a) shall remain available until expended.''.

SEC. 603. FULL 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, loan 
guarantee, or grant that, as of the date of enactment of this Act, is 
in the preapplication phase of consideration under regulations of the 
Secretary of Agriculture in effect on the date of enactment of this 
Act.
    (b) Account.--There is established in the Treasury of the United 
States an account to be known as the ``Rural America Infrastructure 
Development Account'' (referred to in this section as the ``Account'') 
to fund rural development loans, loan guarantees, and grants described 
in subsection (d) that are pending on the date of enactment of this 
Act.
    (c) Funding.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture such sums as are 
        necessary to carry out this section, to remain available until 
        expended.
            (2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
    (d) Use of Funds.--
            (1) Eligible programs.--Subject to paragraph (2), the 
        Secretary shall use the funds in the Account to provide funds 
        for applications that are pending on the date of enactment of 
        this Act for--
                    (A) community facility direct loans under section 
                306(a)(1) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1926(a)(1));
                    (B) community facility grants under paragraph (19), 
                (20), or (21) of section 306(a) of that Act (7 U.S.C. 
                1926(a));
                    (C) water or waste disposal grants or direct loans 
                under paragraph (1) or (2) of section 306(a) of that 
                Act (7 U.S.C. 1926(a));
                    (D) rural water or wastewater technical assistance 
                and training grants under section 306(a)(14) of that 
                Act (7 U.S.C. 1926(a)(14));
                    (E) emergency community water assistance grants 
                under section 306A of that Act (7 U.S.C. 1926a);
                    (F) business and industry guaranteed loans 
                authorized under section 310B(a)(1)(A) of that Act (7 
                U.S.C. 1932(a)(1)(A)); and
                    (G) solid waste management grants under section 
                310B(b) of that Act (7 U.S.C. 1932(b)).
            (2) Limitations.--
                    (A) Appropriated amounts.--Funds in the Account 
                shall be available to the Secretary to provide funds 
                for pending applications for loans, loan guarantees, 
                and grants described in paragraph (1) only to the 
                extent that funds for the loans, loan guarantees, and 
                grants appropriated in the annual appropriations Act 
                for fiscal year 2002 have been exhausted.
                    (B) Program requirements.--The Secretary may use 
                the Account to provide funds for a pending application 
                for a loan, loan guarantee, or grant described in 
                paragraph (1) only if the Secretary processes, reviews, 
                and approves the application in accordance with 
                regulations in effect on the date of enactment of this 
                Act.

SEC. 604. RURAL ENDOWMENT PROGRAM.

    (a) In General.--The Consolidated Farm and Rural Development Act (7 
U.S.C. 1921 et seq.) (as amended by section 602) is amended by adding 
at the end the following:

                 ``Subtitle I--Rural Endowment Program

``SEC. 385A. PURPOSE.

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

``SEC. 385B. DEFINITIONS.

    ``In this subtitle:
            ``(1) Comprehensive community development strategy.--The 
        term `comprehensive community development strategy' means a 
        community development strategy described in section 385C(e).
            ``(2) Eligible rural area.--
                    ``(A) In general.--The term `eligible rural area' 
                means an area with a population of 25,000 inhabitants 
                or less, as determined by the Secretary using the most 
                recent decennial census.
                    ``(B) Exclusions.--The term `eligible rural area' 
                does not include--
                            ``(i) any area designated by the Secretary 
                        as a rural empowerment zone or rural enterprise 
                        community; or
                            ``(ii) an urbanized area immediately 
                        adjacent to an incorporated city or town with a 
                        population of more than 25,000 inhabitants.
            ``(3) Endowment fund.--The term `endowment fund' means a 
        long-term fund that an approved program entity is required to 
        establish under section 385C(f)(3).
            ``(4) Performance-based benchmarks.--The term `performance-
        based benchmarks' means a set of annualized goals and tasks 
        established by a recipient of a grant under the Program, in 
        collaboration with the Secretary, for the purpose of measuring 
        performance in meeting the comprehensive community development 
        strategy of the recipient.
            ``(5) Program.--The term `Program' means the Rural 
        Endowment Program established under section 385C(a).
            ``(6) Program entity.--The term `program entity' means--
                    ``(A) a private nonprofit community-based 
                development organization;
                    ``(B) a unit of local government (including a 
                multijurisdictional unit of local government);
                    ``(C) an Indian tribe (as defined in section 4 of 
                the Indian Self-Determination and Education Assistance 
                Act (25 U.S.C. 450b));
                    ``(D) a consortium comprised of an organization 
                described in subparagraph (A) and a unit of local 
                government; or
                    ``(E) a consortium of entities specified in 
                subparagraphs (A) through (D);
        that serves an eligible rural area.
            ``(7) Program-related investment.--The term `program-
        related investment' means--
                    ``(A) a loan, loan guarantee, grant, payment of a 
                technical fee, or other expenditure provided for an 
                affordable housing, community facility, small business, 
                environmental improvement, or other community 
                development project that is part of a comprehensive 
                community development strategy; and
                    ``(B) support services relating to a project 
                described in subparagraph (A).

``SEC. 385C. RURAL ENDOWMENT PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--The Secretary may establish a program, 
        to be known as the `Rural Endowment Program', to provide 
        approved program entities with assistance in developing and 
        implementing comprehensive community development strategies for 
        eligible rural areas.
            ``(2) Purposes.--The purposes of the Program are--
                    ``(A) to enhance the ability of an eligible rural 
                area to engage in comprehensive community development;
                    ``(B) to leverage private and public resources for 
                the benefit of community development efforts in 
                eligible rural areas;
                    ``(C) to make available staff of Federal agencies 
                to directly assist the community development efforts of 
                an approved program entity or eligible rural area; and
                    ``(D) to strengthen the asset base of an eligible 
                rural area to further long-term, ongoing community 
                development.
    ``(b) Applications.--
            ``(1) In general.--To receive an endowment grant under the 
        Program, the eligible entity shall submit an application at 
        such time, in such form, and containing such information as the 
        Secretary may require.
            ``(2) Regional applications.--
                    ``(A) In general.--Where appropriate, the Secretary 
                shall encourage regional applications from program 
                entities serving more than 1 eligible rural area.
                    ``(B) Criteria for applications.--To be eligible 
                for an endowment grant for a regional application, the 
                program entities that submit the application shall 
                demonstrate that--
                            ``(i) a comprehensive community development 
                        strategy for the eligible rural areas is best 
                        accomplished through a regional approach; and
                            ``(ii) the combined population of the 
                        eligible rural areas covered by the 
                        comprehensive community development strategy is 
                        75,000 inhabitants or less.
                    ``(C) Amount of endowment grants.--For the purpose 
                of subsection (f)(2), 2 or more program entities that 
                submit a regional application shall be considered to be 
                a single program entity.
            ``(3) Preference.--The Secretary shall give preference to a 
        joint application submitted by a private, nonprofit community 
        development corporation and a unit of local government.
    ``(c) Entity Approval.--The Secretary shall approve a program 
entity to receive grants under the Program, if the program entity meets 
criteria established by the Secretary, including the following:
            ``(1) Distressed rural area.--The program entity shall 
        serve a rural area that suffers from economic or social 
        distress resulting from poverty, high unemployment, 
        outmigration, plant closings, agricultural downturn, declines 
        in the natural resource-based economy, or environmental 
        degradation.
            ``(2) Capacity to implement strategy.--The program entity 
        shall demonstrate the capacity to implement a comprehensive 
        community development strategy.
            ``(3) Goals.--The goals described in the application 
        submitted under subsection (b) shall be consistent with this 
        section.
            ``(4) Participation process.--The program entity shall 
        demonstrate the ability to convene and maintain a multi-
        stakeholder, community-based participation process.
    ``(d) Planning Grants to Conditionally Approved Program Entities.--
            ``(1) In general.--The Secretary may award supplemental 
        grants to approved program entities to assist the approved 
        program entities in the development of a comprehensive 
        community development strategy under subsection (e).
            ``(2) Eligibility for supplemental grants.--In determining 
        whether to award a supplemental grant to an approved program 
        entity, the Secretary shall consider the economic need of the 
        approved program entity.
            ``(3) Limitations on amount of grants.--Under this 
        subsection, an approved program entity may receive a 
        supplemental grant in an amount of not more than $100,000.
    ``(e) Endowment Grant Award.--
            ``(1) In general.--To be eligible for an endowment grant 
        under the Program, an approved program entity shall develop, 
        and obtain the approval of the Secretary for, a comprehensive 
        community development strategy that--
                    ``(A) is designed to reduce economic or social 
                distress resulting from poverty, high unemployment, 
                outmigration, plant closings, agricultural downturn, 
                declines in the natural resource-based economy, or 
                environmental degradation;
                    ``(B) addresses a broad range of the development 
                needs of a community, including economic, social, and 
                environmental needs, for a period of not less than 10 
                years;
                    ``(C) is developed with input from a broad array of 
                local governments and business, civic, and community 
                organizations;
                    ``(D) specifies measurable performance-based 
                outcomes for all activities; and
                    ``(E) includes a financial plan for achieving the 
                outcomes and activities of the comprehensive community 
                development strategy that identifies sources for, or a 
                plan to meet, the requirement for a non-Federal share 
                under subsection (f)(4)(B).
            ``(2) Final approval.--
                    ``(A) In general.--An approved program entity shall 
                receive final approval if the Secretary determines 
                that--
                            ``(i) the comprehensive community 
                        development strategy of the approved program 
                        entity meets the requirements of this section;
                            ``(ii) the management and organizational 
                        structure of the approved program entity is 
                        sufficient to oversee fund and development 
                        activities;
                            ``(iii) the approved program entity has 
                        established an endowment fund; and
                            ``(iv) the approved program entity will be 
                        able to provide the non-Federal share required 
                        under subsection (f)(4)(B).
                    ``(B) Conditions.--As part of the final approval, 
                the approved program entity shall agree to--
                            ``(i) achieve, to the maximum extent 
                        practicable, performance-based benchmarks; and
                            ``(ii) comply with the terms of the 
                        comprehensive community development strategy 
                        for a period of not less than 10 years.
    ``(f) Endowment Grants.--
            ``(1) In general.--Under the Program, the Secretary may 
        make endowment grants to approved program entities with final 
        approval to implement an approved comprehensive community 
        development strategy.
            ``(2) Amount of grants.--An endowment grant to an approved 
        program entity shall be in an amount of not more than 
        $6,000,000, as determined by the Secretary based on--
                    ``(A) the size of the population of the eligible 
                rural area for which the endowment grant is to be used;
                    ``(B) the size of the eligible rural area for which 
                the endowment grant is to be used;
                    ``(C) the extent of the comprehensive community 
                development strategy to be implemented using the 
                endowment grant award; and
                    ``(D) the extent to which the community suffers 
                from economic or social distress resulting from--
                            ``(i) poverty;
                            ``(ii) high unemployment;
                            ``(iii) outmigration;
                            ``(iv) plant closings;
                            ``(v) agricultural downturn;
                            ``(vi) declines in the natural resource-
                        based economy; or
                            ``(vii) environmental degradation.
            ``(3) Endowment funds.--
                    ``(A) Establishment.--On notification from the 
                Secretary that the program entity has been approved 
                under subsection (c), the approved program entity shall 
                establish an endowment fund.
                    ``(B) Funding of endowment.--Federal funds provided 
                in the form of an endowment grant under the Program 
                shall--
                            ``(i) be deposited in the endowment fund;
                            ``(ii) be the sole property of the approved 
                        program entity;
                            ``(iii) be used in a manner consistent with 
                        this subtitle; and
                            ``(iv) be subject to oversight by the 
                        Secretary for a period of not more than 10 
                        years.
                    ``(C) Interest.--Interest earned on Federal funds 
                in the endowment fund shall be--
                            ``(i) retained by the grantee; and
                            ``(ii) treated as Federal funds are treated 
                        under subparagraph (B).
                    ``(D) Limitation.--The Secretary shall promulgate 
                regulations on matching funds and returns on program-
                related investments only to the extent that such funds 
                or proceeds are used in a manner consistent with this 
                subtitle.
            ``(4) Conditions.--
                    ``(A) Disbursement.--
                            ``(i) In general.--Each endowment grant 
                        award shall be disbursed during a period not to 
                        exceed 5 years beginning during the fiscal year 
                        containing the date of final approval of the 
                        approved program entity under subsection 
                        (e)(3).
                            ``(ii) Manner of disbursement.--Subject to 
                        subparagraph (B), the Secretary may disburse a 
                        grant award in 1 lump sum or in incremental 
                        disbursements made each fiscal year.
                            ``(iii) Incremental disbursements.--If the 
                        Secretary elects to make incremental 
                        disbursements, for each fiscal year after the 
                        initial disbursement, the Secretary shall make 
                        a disbursement under clause (i) only if the 
                        approved program entity--
                                    ``(I) has met the performance-based 
                                benchmarks of the approved program 
                                entity for the preceding fiscal year; 
                                and
                                    ``(II) has provided the non-Federal 
                                share required for the preceding fiscal 
                                year under subparagraph (B).
                            ``(iv) Advance disbursements.--The 
                        Secretary may make disbursements under this 
                        paragraph notwithstanding any provision of law 
                        limiting grant disbursements to amounts 
                        necessary to cover expected expenses on a term 
                        basis.
                    ``(B) Non-federal share.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), for each disbursement under 
                        subparagraph (A), the Secretary shall require 
                        the approved program entity to provide a non-
                        Federal share in an amount equal to 50 percent 
                        of the amount of funds received by the approved 
                        program entity under the disbursement.
                            ``(ii) Lower non-federal share.--In the 
                        case of an approved program entity that serves 
                        a small, poor rural area (as determined by the 
                        Secretary), the Secretary may--
                                    ``(I) reduce the non-Federal share 
                                to not less than 20 percent; and
                                    ``(II) allow the non-Federal share 
                                to be provided in the form of in-kind 
                                contributions.
                            ``(iii) Binding commitments; plan.--For the 
                        purpose of meeting the non-Federal share 
                        requirement with respect to the first 
                        disbursement of an endowment grant award to the 
                        approved program entity under the Program, an 
                        approved program entity shall--
                                    ``(I) have, at a minimum, binding 
                                commitments to provide the non-Federal 
                                share required with respect to the 
                                first disbursement of the endowment 
                                grant award; and
                                    ``(II) if the Secretary is making 
                                incremental disbursements of a grant, 
                                develop a viable plan for providing the 
                                remaining amount of the required non-
                                Federal share.
                    ``(C) Limitations.--
                            ``(i) In general.--Subject to clause (ii), 
                        of each disbursement, an approved program 
                        entity shall use--
                                    ``(I) not more than 10 percent for 
                                administrative costs of carrying out 
                                program-related investments;
                                    ``(II) not more than 20 percent for 
                                the purpose of maintaining a loss 
                                reserve account; and
                                    ``(III) the remainder for program-
                                related investments contained in the 
                                comprehensive community development 
                                strategy.
                            ``(ii) Loss reserve account.--If all 
                        disbursed funds available under a grant are 
                        expended in accordance with clause (i) and the 
                        grant recipient has no expected losses to cover 
                        for a fiscal year, the recipient may use funds 
                        in the loss reserve account described in clause 
                        (i)(II) for program-related investments 
                        described in clause (i)(III) for which no 
                        reserve for losses is required.
    ``(g) Federal Agency Assistance.--Under the Program, the Secretary 
shall provide and coordinate technical assistance for grant recipients 
by designated field staff of Federal agencies.
    ``(h) Private Technical Assistance.--
            ``(1) In general.--Under the Program, the Secretary may 
        make grants to qualified intermediaries to provide technical 
        assistance and capacity building to approved program entities 
        under the Program.
            ``(2) Duties.--A qualified intermediary that receives a 
        grant under this subsection shall--
                    ``(A) provide assistance to approved program 
                entities in developing, coordinating, and overseeing 
                investment strategy;
                    ``(B) provide technical assistance in all aspects 
                of planning, developing, and managing the Program; and
                    ``(C) facilitate Federal and private sector 
                involvement in rural community development.
            ``(3) Eligibility.--To be considered a qualified 
        intermediary under this subsection, an intermediary shall--
                    ``(A) be a private, nonprofit community development 
                organization;
                    ``(B) have expertise in Federal or private rural 
                community development policy or programs; and
                    ``(C) have experience in providing technical 
                assistance, planning, and capacity building assistance 
                to rural communities and nonprofit entities in eligible 
                rural areas.
            ``(4) Maximum amount of grants.--A qualified intermediary 
        may receive a grant under this subsection of not more than 
        $100,000.
            ``(5) Funding.--Of the amounts made available under section 
        385D, the Secretary may use to carry out this subsection not 
        more than $2,000,000 for each of not more than 2 fiscal years.

``SEC. 385D. FUNDING.

    ``(a) Fiscal Years 2002 and 2003.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this subtitle, out of any funds in the Treasury 
        not otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary of Agriculture to carry out this 
        subtitle $82,000,000 for the period of fiscal years 2002 and 
        2003, to remain available until expended.
            ``(2) Schedule for obligations.--Of the amounts made 
        available under paragraph (1)--
                    ``(A) not more than $5,000,000 shall be obligated 
                to carry out section 385C(d);
                    ``(B) not less than $75,000,000 shall be obligated 
                to carry out section 385C(f); and
                    ``(C) not less than $2,000,000 shall be obligated 
                to carry out section 385C(h).
            ``(3) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this subtitle the funds transferred under paragraph (1), 
        without further appropriation.
    ``(b) Fiscal Years 2004 through 2006.--There are authorized to be 
appropriated such sums as are necessary to carry out this subtitle for 
each of fiscal years 2004 through 2006.''.

SEC. 605. ENHANCEMENT OF ACCESS TO BROADBAND SERVICE IN RURAL AREAS.

    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. ACCESS TO BROADBAND TELECOMMUNICATIONS SERVICES IN RURAL 
              AREAS.

    ``(a) Purpose.--The purpose of this section is to provide grants, 
loans, and loan guarantees to provide funds for the costs of the 
construction, improvement, and acquisition of facilities and equipment 
for broadband service in eligible rural communities.
    ``(b) Definitions.--In this section:
            ``(1) Broadband service.--The term `broadband service' 
        means any technology identified by the Secretary as having the 
        capacity to transmit data to enable a subscriber to the service 
        to originate and receive high-quality voice, data, graphics, or 
        video.
            ``(2) Eligible rural community.--The term `eligible rural 
        community' means any incorporated or unincorporated place 
        that--
                    ``(A) has not more than 20,000 inhabitants, based 
                on the most recent available population statistics of 
                the Bureau of the Census; and
                    ``(B) is not located in an area designated as a 
                standard metropolitan statistical area.
    ``(c) Grants.--The Secretary shall make grants to eligible entities 
described in subsection (e) to provide funds for the construction, 
improvement, or acquisition of facilities and equipment for the 
provision of broadband service in eligible rural communities.
    ``(d) Loans and Loan Guarantees.--The Secretary shall make or 
guarantee loans to eligible entities described in subsection (e) to 
provide funds for the construction, improvement, or acquisition of 
facilities and equipment for the provision of broadband service in 
eligible rural communities.
    ``(e) Eligible Entities.--To be eligible to obtain a grant under 
this section, an entity must--
            ``(1) be eligible to obtain a loan or loan guarantee to 
        furnish, improve, or extend a rural telecommunications service 
        under this Act; and
            ``(2) submit to the Secretary a proposal for a project that 
        meets the requirements of this section.
    ``(f) Broadband Service.--The Secretary shall, from time to time as 
advances in technology warrant, review and recommend modifications of 
rate-of-data transmission criteria for purposes of the identification 
of broadband service technologies under subsection (b)(1).
    ``(g) Technological Neutrality.--For purposes of determining 
whether or not to make a grant, loan, or loan guarantee for a project 
under this section, the Secretary shall not take into consideration the 
type of technology proposed to be used under the project.
    ``(h) Terms and Conditions for Loans and Loan Guarantees.--A loan 
or loan guarantee under subsection (d) shall--
            ``(1) be made available in accordance with the requirements 
        of the Federal Credit Reform Act of 1990 (2 U.S.C. 661 et 
        seq.);
            ``(2) bear interest at an annual rate of, as determined by 
        the Secretary--
                    ``(A) 4 percent per annum; or
                    ``(B) the current applicable market rate; and
            ``(3) have a term not to exceed the useful life of the 
        assets constructed, improved, or acquired with the proceeds of 
        the loan or extension of credit.
    ``(i) Use of Loan Proceeds to Refinance Loans for Deployment of 
Broadband Service.--Notwithstanding any other provision of this Act, 
the proceeds of any loan made by the Secretary under this Act may be 
used by the recipient of the loan for the purpose of refinancing an 
outstanding obligation of the recipient on another telecommunications 
loan made under this Act if the use of the proceeds for that purpose 
will further the construction, improvement, or acquisition of 
facilities and equipment for the provision of broadband service in 
eligible rural communities.
    ``(j) Funding.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this Act, and on October 1, 2002, and each October 
        1 thereafter through October 1, 2005, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary of Agriculture to 
        carry out this section $100,000,000, to remain available until 
        expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
            ``(3) Allocation of funds.--
                    ``(A) In general.--From amounts made available for 
                each fiscal year under paragraph (1), the Secretary 
                shall--
                            ``(i) establish a national reserve for 
                        grants, loans, and loan guarantees to eligible 
                        entities in States under this section; and
                            ``(ii) allocate amounts in the reserve to 
                        each State for each fiscal year for grants, 
                        loans, and loan guarantees 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 last 
                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 grants, loans, and loan guarantees under this 
                section to eligible entities in any State, as 
                determined by the Secretary.
    ``(k) Termination of authority.--
            ``(1) In general.--No grant, loan, or loan guarantee may be 
        made under this section after September 30, 2006.
            ``(2) Effect on validity of grant, loan, or loan 
        guarantee.--Notwithstanding paragraph (1), any grant, loan, or 
        loan guarantee made under this section before the date 
        specified in paragraph (1) shall be valid.''.

SEC. 606. VALUE-ADDED AGRICULTURAL PRODUCT MARKET DEVELOPMENT GRANTS.

    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.--The term 
`value-added agricultural product' means any agricultural commodity or 
product that--
            ``(1)(A) has undergone a change in physical state; or
            ``(B) was produced in a manner that enhances the value of 
        the agricultural commodity or product, as demonstrated through 
        a business plan that shows the enhanced value, as determined by 
        the Secretary; and
            ``(2) as a result of the change in physical state or the 
        manner in which the agricultural commodity or product was 
        produced--
                    ``(A) the customer base for the agricultural 
                commodity or product has been expanded; and
                    ``(B) a greater portion of the revenue derived from 
                the processing of the agricultural commodity or product 
                is available to the producer of the commodity or 
                product.
    ``(b) Grant Program.--
            ``(1) Purposes.--The purposes of this subsection are--
                    ``(A) to increase the share of the food and 
                agricultural system profit received by agricultural 
                producers;
                    ``(B) to increase the number and quality of rural 
                self-employment opportunities in agriculture and 
                agriculturally-related businesses and the number and 
                quality of jobs in agriculturally-related businesses;
                    ``(C) to help maintain a diversity of size in farms 
                and ranches by stabilizing the number of small and mid-
                sized farms;
                    ``(D) to increase the diversity of food and other 
                agricultural products available to consumers, including 
                nontraditional crops and products and products grown or 
                raised in a manner that enhances the value of the 
                products to the public; and
                    ``(E) to conserve and enhance the quality of land, 
                water, and energy resources, wildlife habitat, and 
                other landscape values and amenities in rural areas.
            ``(2) Grants.--From amounts made available under paragraph 
        (6), the Secretary shall make award competitive grants--
                    ``(A) to an eligible independent producer (as 
                determined by the Secretary) of a value-added 
                agricultural product to assist the producer--
                            ``(i) to develop a business plan for viable 
                        marketing opportunities for the value-added 
                        agricultural product; or
                            ``(ii) to develop strategies that are 
                        intended to create marketing opportunities for 
                        the producer; and
                    ``(B) to an eligible nonprofit entity (as 
                determined by the Secretary) to assist the entity--
                            ``(i) to develop a business plan for viable 
                        marketing opportunities in emerging markets for 
                        a value-added agricultural product; or
                            ``(ii) to develop strategies that are 
                        intended to create marketing opportunities in 
                        emerging markets for the value-added 
                        agricultural product.
            ``(3) Amount of grant.--
                    ``(A) In general.--The total amount provided under 
                this subsection to a grant recipient may not exceed 
                $500,000.
                    ``(B) Priority.--The Secretary shall give priority 
                to grant proposals for less than $200,000 submitted 
                under this subsection.
            ``(4) Grantee strategies.--A grantee under paragraph (2) 
        shall use the grant--
                    ``(A) to develop a business plan or perform a 
                feasibility study to establish a viable marketing 
                opportunity for a value-added agricultural product; or
                    ``(B) to provide capital to establish alliances or 
                business ventures that allow the producer of the value-
                added agricultural product to better compete in 
                domestic or international markets.
            ``(5) Grants for marketing or processing certified organic 
        agricultural products.--
                    ``(A) In general.--Out of any amount that is made 
                available to the Secretary for a fiscal year under 
                paragraph (2), the Secretary shall use not less than 5 
                percent of the amount for grants to assist producers of 
                certified organic agricultural products in post-farm 
                marketing or processing of the products through a 
                business or cooperative ventures that--
                            ``(i) expand the customer base of the 
                        certified organic agricultural products; and
                            ``(ii) increase the portion of product 
                        revenue available to the producers.
                    ``(B) Certified organic agricultural product.--For 
                the purposes of this paragraph, a certified organic 
                agricultural product does not have to meet the 
                requirements of the definition of `value-added 
                agricultural product' under subsection (a).
                    ``(C) Insufficient applications.--If, for any 
                fiscal year, the Secretary receives an insufficient 
                quantity of applications for grants described in 
                subparagraph (A) to use the funds reserved under 
                subparagraph (A), the Secretary may use the excess 
                reserved funds to make grants for any other purpose 
                authorized under this subsection.
            ``(6) Funding.--
                    ``(A) In general.--Not later than 30 days after the 
                date of enactment of this paragraph, and on October 1, 
                2002, and each October 1 thereafter through October 1, 
                2005, out of any funds in the Treasury not otherwise 
                appropriated, the Secretary of the Treasury shall 
                transfer to the Secretary of Agriculture to carry out 
                this subsection $75,000,000, to remain available until 
                expended.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                carry out this subsection the funds transferred under 
                subparagraph (A), without further appropriation.'';
            (3) in subsection (c)(1) (as redesignated)--
                    (A) by striking ``subsection (a)(2)'' and inserting 
                ``subsection (b)(2)'';
                    (B) by striking ``$5,000,000'' and inserting ``7.5 
                percent''; and
                    (C) by striking ``subsection (a)'' and inserting 
                ``subsection (b)''; and
            (4) in subsection (d) (as redesignated), by striking 
        ``subsections (a) and (b)'' and inserting ``subsections (b) and 
        (c)''.

SEC. 607. NATIONAL RURAL DEVELOPMENT INFORMATION CLEARINGHOUSE.

    Section 2381 of the Food, Agriculture, Conservation, and Trade Act 
of 1990 (7 U.S.C. 3125b) is amended to read as follows:

``SEC. 2381. NATIONAL RURAL DEVELOPMENT INFORMATION CLEARINGHOUSE.

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

           Subtitle B--National Rural Development Partnership

SEC. 611. SHORT TITLE.

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

SEC. 612. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

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

``SEC. 377. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    ``(a) Definitions.--In this section:
            ``(1) Agency with rural responsibilities.--The term `agency 
        with rural responsibilities' means any executive agency (as 
        defined in section 105 of title 5, United States Code) that--
                    ``(A) implements Federal law targeted at rural 
                areas, including--
                            ``(i) the Act of April 24, 1950 (commonly 
                        known as the `Granger-Thye Act') (64 Stat. 82, 
                        chapter 9);
                            ``(ii) the Intergovernmental Cooperation 
                        Act of 1968 (82 Stat. 1098);
                            ``(iii) section 41742 of title 49, United 
                        States Code;
                            ``(iv) the Rural Development Act of 1972 
                        (86 Stat. 657);
                            ``(v) the Rural Development Policy Act of 
                        1980 (94 Stat. 1171);
                            ``(vi) the Rural Electrification Act of 
                        1936 (7 U.S.C. 901 et seq.);
                            ``(vii) amendments made to section 334 of 
                        the Public Health Service Act (42 U.S.C. 254g) 
                        by the Rural Health Clinics Act of 1983 (97 
                        Stat. 1345); and
                            ``(viii) the Rural Housing Amendments of 
                        1983 (97 Stat. 1240) and the amendments made by 
                        the Rural Housing Amendments of 1983 to title V 
                        of the Housing Act of 1949 (42 U.S.C. 1471 et 
                        seq.); or
                    ``(B) administers a program that has a significant 
                impact on rural areas, including--
                            ``(i) the Appalachian Regional Commission;
                            ``(ii) the Department of Agriculture;
                            ``(iii) the Department of Commerce;
                            ``(iv) the Department of Defense;
                            ``(v) the Department of Education;
                            ``(vi) the Department of Energy;
                            ``(vii) the Department of Health and Human 
                        Services;
                            ``(viii) the Department of Housing and 
                        Urban Development;
                            ``(ix) the Department of the Interior;
                            ``(x) the Department of Justice;
                            ``(xi) the Department of Labor;
                            ``(xii) the Department of Transportation;
                            ``(xiii) the Department of the Treasury;
                            ``(xiv) the Department of Veterans Affairs;
                            ``(xv) the Environmental Protection Agency;
                            ``(xvi) the Federal Emergency Management 
                        Administration;
                            ``(xvii) the Small Business Administration;
                            ``(xviii) the Social Security 
                        Administration;
                            ``(xix) the Federal Reserve System;
                            ``(xx) the United States Postal Service;
                            ``(xxi) the Corporation for National 
                        Service;
                            ``(xxii) the National Endowment for the 
                        Arts and the National Endowment for the 
                        Humanities; and
                            ``(xxiii) other agencies, commissions, and 
                        corporations.
            ``(2) Coordinating committee.--The term `Coordinating 
        Committee' means the National Rural Development Coordinating 
        Committee established by subsection (c).
            ``(3) Partnership.--The term `Partnership' means the 
        National Rural Development Partnership continued by subsection 
        (b).
            ``(4) State rural development council.--The term `State 
        rural development council' means a State rural development 
        council that meets the requirements of subsection (d).
    ``(b) Partnership.--
            ``(1) In general.--The Secretary shall continue the 
        National Rural Development Partnership composed of--
                    ``(A) the Coordinating Committee; and
                    ``(B) State rural development councils.
            ``(2) Purposes.--The purposes of the Partnership are--
                    ``(A) to empower and build the capacity of States 
                and rural communities within States to design unique 
                responses to their own special rural development needs, 
                with local determinations of progress and selection of 
                projects and activities;
                    ``(B) to encourage participants to be flexible and 
                innovative in establishing new partnerships and trying 
                fresh, new approaches to rural development issues, with 
                responses to rural development that use different 
                approaches to fit different situations; and
                    ``(C) to encourage all partners in the Partnership 
                (Federal, State, local, and tribal governments, the 
                private sector, and nonprofit organizations) to be 
                fully engaged and share equally in decisions.
            ``(3) Governing panel.--
                    ``(A) In general.--A panel consisting of 
                representatives of the Coordinating Committee and State 
                rural development councils shall be established to lead 
                and coordinate the strategic operation, policies, and 
                practices of the Partnership.
                    ``(B) Annual reports.--In conjunction with the 
                Coordinating Committee and State rural development 
                councils, the panel shall prepare and submit to 
                Congress an annual report on the activities of the 
                Partnership.
            ``(4) Role of federal government.--The role of the Federal 
        Government in the Partnership shall be that of a partner and 
        facilitator, with Federal agencies authorized--
                    ``(A) to cooperate with States to implement the 
                Partnership;
                    ``(B) to provide States with the technical and 
                administrative support necessary to plan and implement 
                tailored rural development strategies to meet local 
                needs;
                    ``(C) to ensure that the head of each agency 
                referred to in subsection (a)(1)(B) designates a 
                senior-level agency official to represent the agency on 
                the Coordinating Committee and directs appropriate 
                field staff to participate fully with the State rural 
                development council within the jurisdiction of the 
                field staff; and
                    ``(D) to enter into cooperative agreements with, 
                and to provide grants and other assistance to, State 
                rural development councils.
            ``(5) Role of private and nonprofit sector organizations.--
        Private and nonprofit sector organizations are encouraged--
                    ``(A) to act as full partners in the Partnership 
                and State rural development councils; and
                    ``(B) to cooperate with participating government 
                organizations in developing innovative approaches to 
                the solution of rural development problems.
    ``(c) National Rural Development Coordinating Committee.--
            ``(1) Establishment.--The Secretary shall establish a 
        National Rural Development Coordinating Committee.
            ``(2) Composition.--The Coordinating Committee shall be 
        composed of--
                    ``(A) 1 representative of each agency with rural 
                responsibilities that elects to participate in the 
                Coordinating Committee; and
                    ``(B) representatives, approved by the Secretary, 
                of--
                            ``(i) national associations of State, 
                        regional, local, and tribal governments and 
                        intergovernmental and multijurisdictional 
                        agencies and organizations;
                            ``(ii) national public interest groups;
                            ``(iii) other national nonprofit 
                        organizations that elect to participate in the 
                        activities of the Coordinating Committee; and
                            ``(iv) the private sector.
            ``(3) Duties.--The Coordinating Committee shall--
                    ``(A) provide support for the work of the State 
                rural development councils;
                    ``(B) facilitate coordination among Federal 
                programs and activities, and with State, local, tribal, 
                and private programs and activities, affecting rural 
                development;
                    ``(C) enhance the effectiveness, responsiveness, 
                and delivery of Federal programs in rural areas;
                    ``(D) gather and provide to Federal authorities 
                information and input for the development and 
                implementation of Federal programs impacting rural 
                economic and community development;
                    ``(E) notwithstanding any other provision of law, 
                review and comment on policies, regulations, and 
                proposed legislation that affect or would affect rural 
                areas;
                    ``(F) provide technical assistance to State rural 
                development councils for the implementation of Federal 
                programs;
                    ``(G) notwithstanding any other provision of law, 
                develop and facilitate strategies to reduce or 
                eliminate administrative and regulatory impediments; 
                and
                    ``(H) require each State receiving funds under this 
                section to submit an annual report on the use of the 
                funds by the State, including a description of 
                strategic plans, goals, performance measures, and 
                outcomes for the State rural development council of the 
                State.
            ``(4) Election not to participate.--An agency with rural 
        responsibilities that elects not to participate in the 
        Partnership and the Coordinating Committee shall submit to 
        Congress a report that describes--
                    ``(A) how the programmatic responsibilities of the 
                Federal agency that target or have an impact on rural 
                areas are better achieved without participation by the 
                agency in the Partnership; and
                    ``(B) a more effective means of partnership-
                building and collaboration to achieve the programmatic 
                responsibilities of the agency.
    ``(d) State Rural Development Councils.--
            ``(1) Establishment.--Notwithstanding chapter 63 of title 
        31, United States Code, each State may elect to participate in 
        the Partnership by entering into an agreement with the 
        Secretary to establish a State rural development council.
            ``(2) State diversity.--Each State rural development 
        council shall--
                    ``(A) have a nonpartisan membership that is broad 
                and representative of the economic, social, and 
                political diversity of the State; and
                    ``(B) carry out programs and activities in a manner 
                that reflects the diversity of the State.
            ``(3) Duties.--A State rural development council shall--
                    ``(A) facilitate collaboration among Federal, 
                State, local, and tribal governments and the private 
                and nonprofit sectors in the planning and 
                implementation of programs and policies that target or 
                have an impact on rural areas of the State;
                    ``(B) enhance the effectiveness, responsiveness, 
                and delivery of Federal and State programs in rural 
                areas of the State;
                    ``(C) gather and provide to the Coordinating 
                Committee and other appropriate organizations 
                information on the condition of rural areas in the 
                State;
                    ``(D) monitor and report on policies and programs 
                that address, or fail to address, the needs of the 
                rural areas of the State;
                    ``(E) provide comments to the Coordinating 
                Committee and other appropriate organizations on 
                policies, regulations, and proposed legislation that 
                affect or would affect the rural areas of the State;
                    ``(F) notwithstanding any other provision of law, 
                in conjunction with the Coordinating Committee, 
                facilitate the development of strategies to reduce or 
                eliminate conflicting or duplicative administrative or 
                regulatory requirements of Federal, State, local, and 
                tribal governments;
                    ``(G) use grant or cooperative agreement funds 
                provided by the Partnership under an agreement entered 
                into under paragraph (1) to--
                            ``(i) retain an Executive Director and such 
                        support staff as are necessary to facilitate 
                        and implement the directives of the State rural 
                        development council; and
                            ``(ii) pay expenses associated with 
                        carrying out subparagraphs (A) through (F); and
                    ``(H)(i) provide to the Coordinating Committee an 
                annual plan with goals and performance measures; and
                    ``(ii) submit to the Coordinating Committee an 
                annual report on the progress of the State rural 
                development council in meeting the goals and measures.
            ``(4) Authorities.--A State rural development council may--
                    ``(A) solicit funds to supplement and match funds 
                provided under paragraph (3)(G); and
                    ``(B) engage in activities, in addition to those 
                specified in paragraph (3), appropriate to accomplish 
                the purposes for which the State rural development 
                council is established.
            ``(5) Comments or recommendations.--A State rural 
        development council may provide comments and recommendations to 
        an agency with rural responsibilities related to the activities 
        of the State rural development council within the State.
            ``(6) Actions of state rural development council members.--
        When carrying out a program or activity authorized by a State 
        rural development council or this subtitle, a member of the 
        council shall be regarded as a full-time employee of the 
        Federal Government for purposes of chapter 171 of title 28, 
        United States Code, and the Federal Advisory Committee Act (5 
        U.S.C. App.).
            ``(7) Federal participation in state rural development 
        councils.--
                    ``(A) In general.--The State Director for Rural 
                Development of a State, other employees of the 
                Department of Agriculture, and employees of other 
                Federal agencies that elect to participate in the 
                Partnership shall fully participate in the governance 
                and operations of State rural development councils on 
                an equal basis with other members of the State rural 
                development councils.
                    ``(B) Conflicts.--A Federal employee who 
                participates in a State rural development council shall 
                not participate in the making of any council decision 
                if the agency represented by the Federal employee has 
                any financial or other interest in the outcome of the 
                decision.
                    ``(C) Federal guidance.--The Office of Government 
                Ethics, in consultation with the Attorney General, 
                shall issue guidance to all Federal employees that 
                participate in State rural development councils that 
                describes specific decisions that--
                            ``(i) would constitute a conflict of 
                        interest for the Federal employee; and
                            ``(ii) from which the Federal employee must 
                        recuse himself or herself.
    ``(e) Administrative Support of the Partnership.--
            ``(1) Detail of employees.--
                    ``(A) In general.--In order to provide experience 
                in intergovernmental collaboration, the head of an 
                agency with rural responsibilities that elects to 
                participate in the Partnership may, and is encouraged 
                to, detail an employee of the agency with rural 
                responsibilities to the Partnership without 
                reimbursement for a period of up to 12 months.
                    ``(B) Civil service status.--The detail shall be 
                without interruption or loss of civil service status or 
                privilege.
            ``(2) Additional support.--The Secretary shall provide for 
        any additional support staff to the Partnership as the 
        Secretary determines to be necessary to carry out the duties of 
        the Partnership.
    ``(f) Funding.--
            ``(1) Authorization of appropriations.--
                    ``(A) In general.--There are authorized to be 
                appropriated such sums as are necessary to carry out 
                this section.
                    ``(B) Amount of financial assistance.--In providing 
                financial assistance to State rural development 
                councils, the Secretary and heads of other Federal 
                agencies shall provide assistance that, to the maximum 
                extent practicable, is--
                            ``(i) uniform in amount; and
                            ``(ii) targeted to newly created State 
                        rural development councils.
                    ``(C) Federal share.--The Secretary shall develop a 
                plan to decrease, over time, the Federal share of the 
                cost of the core operations of State rural development 
                councils.
            ``(2) Federal agencies.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law limiting the ability of an agency to 
                provide funds to the Partnership with other agencies, 
                in order to carry out the purposes described in 
                subsection (b)(2), the Partnership shall be eligible to 
                receive grants, gifts, contributions, or technical 
                assistance from, or enter into contracts with, any 
                Federal agency.
                    ``(B) Assistance.--Federal agencies are encouraged 
                to use funds made available for programs that target or 
                have an impact on rural areas to provide assistance to, 
                and enter into contracts with, the Partnership, as 
                described in subparagraph (A).
            ``(3) Contributions.--The Partnership may accept private 
        contributions.
            ``(4) Federal financial support for state rural development 
        councils.--Notwithstanding any other provision of law, a 
        Federal agency may use funds made available under paragraph (1) 
        or (2) to enter into a cooperative agreement, contract, or 
        other agreement with a State rural development council to 
        support the core operations of the State rural development 
        council, regardless of the legal form of organization of the 
        State rural development council.
    ``(g) Matching Requirements for State Rural Development Councils.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        State rural development council shall provide matching funds, 
        or in-kind goods or services, to support the activities of the 
        State rural development council in an amount that is not less 
        than 33 percent of the amount of Federal funds received under 
        an agreement under subsection (d)(1).
            ``(2) Exceptions to matching requirement for certain 
        federal funds.--Paragraph (1) shall not apply to funds, grants, 
        funds provided under contracts or cooperative agreements, 
        gifts, contributions, or technical assistance received by a 
        State rural development council from a Federal agency that are 
        used--
                    ``(A) to support 1 or more specific program or 
                project activities; or
                    ``(B) to reimburse the State rural development 
                council for services provided to the Federal agency 
                providing the funds, grants, funds provided under 
                contracts or cooperative agreements, gifts, 
                contributions, or technical assistance.
    ``(h) Termination.--The authority provided under this section shall 
terminate on the date that is 5 years after the date of enactment of 
this section.''.

        Subtitle C--Consolidated Farm and Rural Development Act

SEC. 621. 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 ``$590,000,000'' and inserting 
        ``$1,500,000,000'';
            (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 loans to eligible borrowers for--
                                    ``(I) predevelopment costs 
                                associated with proposed water and 
                                wastewater projects or with existing 
                                water and wastewater systems; and
                                    ``(II) short-term costs incurred 
                                for replacement equipment, small-scale 
                                extension services, or other small 
                                capital projects that are not part of 
                                the regular operations and maintenance 
                                activities of existing water and 
                                wastewater systems.
                            ``(ii) Eligible borrowers.--To be eligible 
                        to obtain a loan from a revolving fund under 
                        clause (i), a borrower shall be eligible to 
                        obtain a loan, loan guarantee, or grant under 
                        paragraph (1) or this paragraph.
                            ``(iii) Maximum amount of loans.--The 
                        amount of a loan made to an eligible borrower 
                        under this subparagraph shall not exceed--
                                    ``(I) $100,000 for costs described 
                                in clause (i)(I); and
                                    ``(II) $100,000 for costs described 
                                in clause (i)(II).
                            ``(iv) Term.--The term of a loan made to an 
                        eligible borrower under this subparagraph shall 
                        not exceed 10 years.
                            ``(v) Administration.--The Secretary shall 
                        limit the amount of grant funds that may be 
                        used by a grant recipient for administrative 
                        costs incurred under this subparagraph.
                            ``(vi) Authorization of appropriations.--
                        There is authorized to be appropriated to carry 
                        out this subparagraph $30,000,000 for each of 
                        fiscal years 2002 through 2006.''.

SEC. 622. RURAL BUSINESS OPPORTUNITY GRANTS.

    Section 306(a)(11)(D) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(11)(D)) is amended by striking 
``2002'' and inserting ``2006''.

SEC. 623. 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 added at the end the following:
            ``(22) Rural water and wastewater circuit rider program.--
                    ``(A) In general.--The Secretary shall establish a 
                national rural water and wastewater circuit rider 
                program that is based on the rural water circuit rider 
                program of the National Rural Water Association that 
                (as of the date of enactment of this paragraph) 
                receives funding from the Secretary, acting through the 
                Rural Utilities Service.
                    ``(B) Relationship to existing program.--The 
                program established under subparagraph (A) shall not 
                affect the authority of the Secretary to carry out the 
                circuit rider program for which funds are made 
                available under the heading ``Rural Community 
                Advancement Program'' of title III of the Agriculture, 
                Rural Development, Food and Drug Administration, and 
                Related Agencies Appropriations Act, 2002.
                    ``(C) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $15,000,000 for each of fiscal years 2003 
                through 2006.''.

SEC. 624. 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 623) is amended by added 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 provide a priority to an organization 
                that--
                            ``(i) serves a rural area that, during the 
                        most recent 5-year period--
                                    ``(I) had a net out-migration of 
                                inhabitants, or other population loss, 
                                from the rural area that equals or 
                                exceeds 5 percent of the population of 
                                the rural area; or
                                    ``(II) had a median household 
                                income that is less than the 
                                nonmetropolitan median household income 
                                of the applicable State; and
                            ``(ii) has a history of providing 
                        substantive assistance to local governments and 
                        economic development organizations.
                    ``(C) Federal share.--A grant provided under this 
                paragraph shall be for not more than 75 percent of the 
                cost of providing assistance described in subparagraph 
                (A).
                    ``(D) Maximum amount of grants.--The amount of a 
                grant provided to an organization under this paragraph 
                shall not exceed $100,000.
                    ``(E) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $30,000,000 for each of fiscal years 2003 
                through 2006.''.

SEC. 625. CERTIFIED NONPROFIT ORGANIZATIONS SHARING EXPERTISE.

    Section 306(a) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1926(a)) (as amended by section 624) is amended by added at 
the end the following:
            ``(24) Certified nonprofit organizations sharing 
        expertise.--
                    ``(A) Certified organizations.--
                            ``(i) In general.--To be certified by the 
                        Secretary to provide technical assistance in 1 
                        or more rural development fields, an 
                        organization shall--
                                    ``(I) be a nonprofit organization 
                                (which may include an institution of 
                                higher education) with experience in 
                                providing technical assistance in the 
                                applicable rural development field;
                                    ``(II) develop a plan, approved by 
                                the Secretary, describing the manner in 
                                which grant funds will be used and the 
                                source of non-Federal funds; and
                                    ``(III) meet such other criteria as 
                                the Secretary may establish, based on 
                                the needs of eligible entities for the 
                                technical assistance.
                            ``(iii) List.--The Secretary shall make 
                        available to the public a list of certified 
                        organizations in each area that the Secretary 
                        determines have substantial experience in 
                        providing the assistance described in 
                        subparagraph (B).
                    ``(B) Grants.--The Secretary may provide grants to 
                certified organizations to pay for costs of providing 
                technical assistance to local governments and nonprofit 
                entities to improve the infrastructure, services, and 
                business development capabilities of local governments 
                and local economic development organizations.
                    ``(C) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $20,000,000 for each of fiscal years 2003 
                through 2006.''.

SEC. 626. 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. 1925(a)) (as amended by section 625) is 
amended by adding at the end the following:
            ``(25) Loan guarantees for water, wastewater, and essential 
        community facilities loans.--
                    ``(A) In general.--The Secretary may guarantee 
                under this title a loan made to finance a community 
                facility or water or waste facility project, including 
                a loan financed by the net proceeds of a bond described 
                in section 144(a)(12)(B)(ii) of the Internal Revenue 
                Code of 1986.
                    ``(B) Requirements.--To be eligible for a loan 
                guarantee under subparagraph (A), an individual or 
                entity offering to purchase the loan must demonstrate 
                to the Secretary that the person has--
                            ``(i) the capabilities and resources 
                        necessary to service the loan in a manner that 
                        ensures the continued performance of the loan, 
                        as determined by the Secretary; and
                            ``(ii) the ability to generate capital to 
                        provide borrowers of the loan with the 
                        additional credit necessary to properly service 
                        the loan.''.
    (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 Guarantee for Certain Loans.--The Secretary may 
guarantee loans made in subsection (a) to finance the issuance of bonds 
for the projects described in section 306(a)(25).''.

SEC. 627. RURAL FIREFIGHTERS AND EMERGENCY PERSONNEL GRANT PROGRAM.

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

SEC. 628. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM.

    Section 306A(i) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1926a(i)) is amended by striking ``2002'' and inserting 
``2006''.

SEC. 629. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES.

    Section 306C of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1926c(e)) is amended by striking subsection (e) and inserting 
the following:
    ``(e) Authorization of Appropriations.--
            ``(1) In general.--Subject to paragraph (2), there is 
        authorized to be appropriated--
                    ``(A) for grants under this section, $30,000,000 
                for each fiscal year;
                    ``(B) for loans under this section, $30,000,000 for 
                each fiscal year; and
                    ``(C) for grants under this section to benefit 
                Indian tribes (as defined in section 4 of the Indian 
                Self-Determination and Education Assistance Act (25 
                U.S.C. 450b)), $20,000,000 for each fiscal year.
            ``(2) Exception.--An entity eligible to receive funding 
        through a grant made under section 306D shall not be eligible 
        for a grant from funds made available under subparagraph 
        (1)(C).''.

SEC. 630. 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 2006''.

SEC. 631. RURAL COOPERATIVE DEVELOPMENT GRANTS.

    Section 310B(e)(9) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1932(e)(9)) is amended by striking ``2002'' and inserting 
``2006''.

SEC. 632. 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 2006.''.

SEC. 633. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

    Section 3l0B 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) Loan guarantees for the purchase of cooperative 
        stock.--
                    ``(A) New and expanding cooperatives.--
                            ``(i) In general.--The Secretary may 
                        guarantee a loan under subsection (a) to 
                        farmers, ranchers, or cooperatives for the 
                        purpose of purchasing start-up capital stock 
                        for the expansion or creation of a cooperative 
                        venture that will process agricultural 
                        commodities or otherwise process value-added 
                        agricultural products.
                            ``(ii) Financial condition.--In determining 
                        the appropriateness of a loan guarantee under 
                        this subparagraph, the Secretary--
                                    ``(I) shall fully review the 
                                feasibility and other relevant aspects 
                                of the cooperative venture to be 
                                established;
                                    ``(II) may not require a review of 
                                the financial condition or statements 
                                of any individual farmer or rancher 
                                involved in the cooperative, other than 
                                the applicant for a guarantee under 
                                this subparagraph; and
                                    ``(III) shall base any guarantee, 
                                to the maximum extent practicable, on 
                                the merits of the cooperative venture 
                                to be established.
                            ``(iii) Collateral.--As a condition of 
                        making a loan guarantee under this 
                        subparagraph, the Secretary may not require 
                        additional collateral by a farmer or rancher, 
                        other than stock purchased or issued pursuant 
                        to the loan and guarantee of the loan.
                            ``(iv) Eligibility.--To be eligible for a 
                        loan guarantee under this subparagraph, a 
                        farmer or rancher must produce the agricultural 
                        commodity that will be processed by the 
                        cooperative.
                            ``(v) Processing contracts during initial 
                        period.--The cooperative, for which a farmer or 
                        rancher receives a guarantee to purchase stock 
                        under this subparagraph, may contract for 
                        services to process agricultural commodities, 
                        or otherwise process value-added agricultural 
                        products, during the 5-year period beginning on 
                        the date of the startup of the cooperative in 
                        order to provide adequate time for the planning 
                        and construction of the processing facility of 
                        the cooperative.
                    ``(B) Existing cooperatives.--The Secretary may 
                guarantee a loan under subsection (a) to a farmer or 
                rancher to join a cooperative in order to sell the 
                agricultural commodities or products produced by the 
                farmer or rancher.
                    ``(C) Financial information.--Financial information 
                required by the Secretary from a farmer or rancher as a 
                condition of making a loan guarantee under this 
                paragraph shall be provided in the manner generally 
                required by commercial agricultural lenders in the 
                area.
            ``(2) Loans to cooperatives.--
                    ``(A) In general.--The Secretary may make or 
                guarantee a loan under subsection (a) to a cooperative 
                that is headquartered in a metropolitan area if the 
                loan is used for a project or venture described in 
                subsection (a) that is located in a rural area.
                    ``(B) Refinancing.--A cooperative organization 
                owned by farmers or ranchers that is eligible for a 
                business and industry loan under made or guaranteed 
                under subsection (a) shall be eligible to refinance an 
                existing loan with a lender if--
                            ``(i) the cooperative organization--
                                    ``(I) is current and performing 
                                with respect to the existing loan; and
                                    ``(II) is not, and has not been, in 
                                default with respect to the existing 
                                loan; and
                            ``(ii) there is adequate security or full 
                        collateral for the refinanced loan.
            ``(3) Business and industry loan appraisals.--The Secretary 
        may require that any appraisal made in connection with a 
        business and industry loan made or guaranteed under subsection 
        (a) be conducted by a specialized appraiser that uses standards 
        that are similar to standards used for similar purposes in the 
        private sector, as determined by the Secretary.
            ``(4) Fees.--The Secretary may assess a 1-time fee for any 
        loan guaranteed under subsection (a) in an amount that does not 
        exceed 2 percent of the guaranteed principal portion of the 
        loan.''.

SEC. 634. VALUE-ADDED INTERMEDIARY RELENDING PROGRAM.

    Section 310B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1932) (as amended by section 626(b)) is amended by adding at the 
end the following:
    ``(i) Value-Added Intermediary Relending Program.--
            ``(1) In general.--In accordance with this subsection, the 
        Secretary shall make loans under the terms and conditions of 
        the intermediary relending program established under section 
        1323(b)(2)(C) of the Food Security Act of 1985 (7 U.S.C. 1932 
        note; Public Law 99-198).
            ``(2) Loans.--Using funds made available to carry out this 
        subsection, the Secretary shall make loans to eligible 
        intermediaries to make loans to ultimate recipients, under the 
        terms and conditions of the intermediary relending program, for 
        projects to establish, enlarge, and operate enterprises that 
        add value to agricultural commodities and products of 
        agricultural commodities.
            ``(3) Eligible intermediaries.--Intermediaries that are 
        eligible to receive loans under paragraph (2) shall include 
        State agencies.
            ``(4) Preference for bioenergy projects.--In making loans 
        using loan funds made available under paragraph (2), an 
        eligible intermediary shall give preference to bioenergy 
        projects in accordance with regulations promulgated by the 
        Secretary.
            ``(5) Composition of capital.--The capital for a project 
        carried out by an ultimate recipient and assisted with loan 
        funds made available under paragraph (2) shall be comprised 
        of--
                    ``(A) not more than 15 percent of the total cost of 
                a project; and
                    ``(B) not less than 50 percent of the equity funds 
                provided by agricultural producers.
            ``(6) Loan conditions.--
                    ``(A) Terms of loans.--A loan made to an 
                intermediary using loan funds made available under 
                paragraph (2) shall have a term of not to exceed 30 
                years.
                    ``(B) Interest.--The interest rate on such a loan 
                shall be--
                            ``(i) in the case of each of the first 2 
                        years of the loan period, 0 percent; and
                            ``(ii) in the case of each of the remaining 
                        years of the loan period, 2 percent.
            ``(7) Limitations on amount of loan funds provided.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an intermediary or ultimate recipient 
                shall be eligible to receive not more than $2,000,000 
                of the loan funds made available under paragraph (2).
                    ``(B) State agencies.--Subparagraph (A) shall not 
                apply in the case of a State agency with respect to 
                loan funds provided to the State agency as an 
                intermediary.
            ``(8) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $15,000,000 for 
        each of fiscal years 2003 through 2006.''.

SEC. 635. 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 508) is amended by adding 
at the end the following:

``SEC. 310G. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER 
              PURPOSES.

    ``If, after making a loan or a grant described in section 381E(d), 
the Secretary determines that the circumstances under which the loan or 
grant was made have sufficiently changed to make the project or 
activity for which the loan or grant was made available no longer 
appropriate, the Secretary may allow the loan borrower or grant 
recipient to use property (real and personal) purchased or improved 
with the loan or grant funds, or proceeds from the sale of property 
(real and personal) purchased with such funds, for another project or 
activity that (as determined by the Secretary)--
            ``(1) will be carried out in the same area as the original 
        project or activity;
            ``(2) meets the criteria for a loan or a grant described in 
        section 381E(d); and
            ``(3) satisfies such additional requirements as are 
        established by the Secretary.''.

SEC. 636. 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 526) 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 $100,000 or less; and
                    ``(B) business and industry guaranteed loans under 
                section 310B(a)(1) the principal amount of which is--
                            ``(i) in the case of a loan guarantee made 
                        during fiscal year 2002 or 2003, $400,000 or 
                        less; and
                            ``(ii) in the case of a loan guarantee made 
                        during any subsequent fiscal year--
                                    ``(I) $400,000 or less; or
                                    ``(II) if the Secretary determines 
                                that there is not a significant 
                                increased risk of a default on the 
                                loan, $600,000 or less.
            ``(2) Water and waste disposal grants and loans.--The 
        Secretary shall develop an application process that 
        accelerates, to the maximum extent practicable, the processing 
        of applications for water and waste disposal grants or direct 
        or guaranteed loans under paragraph (1) or (2) of section 
        306(a) the grant award amount or principal loan amount, 
        respectively, of which is $300,000 or less.
            ``(3) Administration.--In developing an application under 
        this subsection, the Secretary shall--
                    ``(A) consult with commercial and cooperative 
                lenders; and
                    ``(B) ensure that--
                            ``(i) the form can be completed manually or 
                        electronically, at the option of the lender;
                            ``(ii) the form minimizes the documentation 
                        required to accompany the form;
                            ``(iii) the cost of completing and 
                        processing the form is minimal; and
                            ``(iv) the form can be completed and 
                        processed in an expeditious manner.''.

SEC. 637. 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:
            ``(13) Rural and rural area.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the terms `rural' and `rural area' mean 
                a city, town, or unincorporated area that has a 
                population of 50,000 inhabitants or less, other than an 
                urbanized area immediately adjacent to a city, town, or 
                unincorporated area that has a population in excess of 
                50,000 inhabitants.
                    ``(B) Water and waste disposal grants and direct 
                and guaranteed loans.--For the purpose of water and 
                waste disposal grants and direct and guaranteed loans 
                provided under paragraphs (1) and (2) of section 
                306(a), the terms `rural' and `rural area' mean a city, 
                town, or unincorporated area that has a population of 
                no more than 10,000 inhabitants.
                    ``(C) Community facility loans and grants.--For the 
                purpose of community facility direct and guaranteed 
                loans and grants under paragraphs (1), (19), (20), and 
                (21) of section 306(a), the terms `rural' and `rural 
                area' mean a city, town, or unincorporated area that 
                has a population of no more than 50,000 inhabitants.
                    ``(D) Business and industry direct and guaranteed 
                loans.--For the purpose of business and industry direct 
                and guaranteed loans under section 310B(a)(1), the 
                terms `rural' and `rural area' mean any area other than 
                a city or town that has a population of greater than 
                50,000 inhabitants and the immediately adjacent 
                urbanized area of such city or town.
                    ``(E) Multijurisdictional regional planning 
                organizations; national rural development 
                partnership.--In sections 306(a)(23) and 377, the term 
                `rural area' means--
                            ``(i) all the territory of a State that is 
                        not within the boundary of any standard 
                        metropolitan statistical area; and
                            ``(ii) all territory within any standard 
                        metropolitan statistical area within a census 
                        tract having a population density of less than 
                        20 persons per square mile, as determined by 
                        the Secretary according to the most recent 
                        census of the United States as of any date.
                    ``(F) Rural entrepreneurs and microenterprise 
                assistance program; National rural cooperative and 
                business equity fund.--In section 378 and subtitle G, 
                the term `rural area' means an area that is located--
                            ``(i) outside a standard metropolitan 
                        statistical area; or
                            ``(ii) within a community that has a 
                        population of 50,000 inhabitants or less.''.
    (b) 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.

SEC. 638. RURAL ENTREPRENEURS AND MICROENTERPRISE ASSISTANCE PROGRAM.

    Subtitle D of the Consolidated Farm and Rural Development Act (as 
amended by section 612) is amended by adding at the end the following:

``SEC. 378. RURAL ENTREPRENEURS AND MICROENTERPRISE ASSISTANCE PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Economically disadvantaged microentrepreneur.--The 
        term `economically disadvantaged microentrepreneur' means an 
        owner, majority owner, or developer of a microenterprise that 
        has the ability to compete in the private sector but has been 
        impaired due to diminished capital and credit opportunities, as 
        compared to other microentrepreneurs in the industry.
            ``(2) Indian tribe.--The term `Indian tribe' has the 
        meaning given the term in section 4 of the Indian Self-
        Determination and Education Assistance Act (25 U.S.C. 450b).
            ``(3) Intermediary.--The term `intermediary' means a 
        private, nonprofit entity that provides assistance--
                    ``(A) to a microenterprise development 
                organization; or
                    ``(B) for a microenterprise development program.
            ``(4) Low-income individual.--The term `low-income 
        individual' means an individual with an income (adjusted for 
        family size) of not more than the greater of--
                    ``(A) 80 percent of median income of an area; or
                    ``(B) 80 percent of the statewide nonmetropolitan 
                area median income.
            ``(5) Microcredit.--The term `microcredit' means a business 
        loan or loan guarantee of not more than $35,000 provided to a 
        rural entrepreneur.
            ``(6) Microenterpise.--The term `microenterprise' means a 
        sole proprietorship, joint enterprise, limited liability 
        company, partnership, corporation, or cooperative that--
                    ``(A) has 5 or fewer employees; and
                    ``(B) is unable to obtain sufficient credit, 
                equity, or banking services elsewhere, as determined by 
                the Secretary.
            ``(7) Microenterprise development organization.--
                    ``(A) In general.--The term `microenterprise 
                development organization' means a nonprofit entity that 
                provides training and technical assistance to rural 
                entrepreneurs and access to capital or another service 
                described in subsection (c) to rural entrepreneurs.
                    ``(B) Inclusions.--The term `microenterprise 
                development organization' includes an organization 
                described in subparagraph (A) with a demonstrated 
                record of delivering services to economically 
                disadvantaged microentrepreneurs.
            ``(8) Microenterprise development program.--The term 
        `microenterprise development organization' means a program 
        administered by a organization serving a rural area.
            ``(9) Microentrepreneur.--The term `microentrepreneur' 
        means the owner, operator, or developer of a microenterprise.
            ``(10) Program.--The term `program' means the rural 
        entrepreneur and microenterprise program established under 
        subsection (b)(1).
            ``(11) Qualified organization.--The term `qualified 
        organization' means--
                    ``(A) a microenterprise development organization or 
                microenterprise development program that has a 
                demonstrated record of delivering microenterprise 
                services to rural entrepreneurs, as demonstrated by the 
                development of an effective plan of action and the 
                possession of necessary resources to deliver 
                microenterprise services to rural entrepreneurs 
                effectively, as determined by the Secretary;
                    ``(B) an intermediary that has a demonstrated 
                record of delivery assistance to microenterprise 
                development organizations or microenterprise 
                development programs;
                    ``(C) a microenterprise development organization or 
                microenterprise development program that--
                            ``(i) serves rural entrepreneurs; and
                            ``(ii) enters into an agreement with a 
                        local community, in conjunction with a State or 
                        local government or Indian tribe, to provide 
                        assistance described in subsection (c);
                    ``(D) an Indian tribe, the tribal government of 
                which certifies to the Secretary that no 
                microenterprise development organization or 
                microenterprise development program exists under the 
                jurisdiction of the Indian tribe; or
                    ``(E) a group of 2 or more organizations or Indian 
                tribes described in subparagraph (A), (B), (C), or (D) 
                that agree to act jointly as a qualified organization 
                under this section.
            ``(12) Rural capacity building service.--The term `rural 
        capacity building service' means a service provided to an 
        organization that--
                    ``(A) is, or is in the process of becoming, a 
                microenterprise development organization or 
                microenterprise development program; and
                    ``(B) serves rural areas for the purpose of 
                enhancing the ability of the organization to provide 
                training, technical assistance, and other related 
                services to rural entrepreneurs.
            ``(13) Rural entrepreneur.--The term `rural entrepreneur' 
        means a microentrepreneur, or prospective microentrepreneur--
                    ``(A) the principal place of business of which is 
                in a rural area; and
                    ``(B) that is unable to obtain sufficient training, 
                technical assistance, or microcredit elsewhere, as 
                determined by the Secretary.
            ``(14) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture, acting through the Rural Business-Cooperative 
        Service.
            ``(15) Training and technical assistance.--
                    ``(A) In general.--The term `training and technical 
                assistance' means assistance provided to rural 
                entrepreneurs to develop the skills the rural 
                entrepreneurs need to plan, market, and manage their 
                own business.
                    ``(B) Inclusions.--The term `training and technical 
                assistance' includes assistance provided for the 
                purpose of--
                            ``(i) enhancing business planning, 
                        marketing, management, or financial management 
                        skills; and
                            ``(ii) obtaining microcredit.
            ``(16) Tribal government.--The term `tribal government' 
        means the governing body of an Indian tribe.
    ``(b) Establishment.--
            ``(1) In general.--From amounts made available under 
        subsection (h), the Secretary shall establish a rural 
        entrepreneur and microenterprise program.
            ``(2) Purpose.--The purpose of the program shall be to 
        provide low- and moderate-income individuals with--
                    ``(A) the skills necessary to establish new small 
                businesses in rural areas; and
                    ``(B) continuing technical assistance as the 
                individuals begin operating the small businesses.
    ``(c) Assistance.--
            ``(1) In general.--The Secretary may make a grant under 
        this section to a qualified organization to--
                    ``(A) provide training, technical assistance, or 
                microcredit to a rural entrepreneur;
                    ``(B) provide training, operational support, or a 
                rural capacity building service to a qualified 
                organization to assist the qualified organization in 
                developing microenterprise training, technical 
                assistance, and other related services;
                    ``(C) assist in researching and developing the best 
                practices in delivering training, technical assistance, 
                and microcredit to rural entrepreneurs; and
                    ``(D) to carry out such other projects and 
                activities as the Secretary determines are consistent 
                with the purposes of this section.
            ``(2) Allocation.--
                    ``(A) In general.--Subject to subparagraphs (B) and 
                (C), of the amount of funds made available for a fiscal 
                year to make grants under this section, the Secretary 
                shall ensure that--
                            ``(i) not less than 75 percent of funds are 
                        used to carry out activities described in 
                        paragraph (1)(A); and
                            ``(ii) not more than 25 percent of the 
                        funds are used to carry out activities 
                        described in subparagraphs (B) through (D) of 
                        paragraph (1).
                    ``(B) Limitation on grant amount.--No single 
                qualified organization may receive more than 10 percent 
                of the total funds that are made available for a fiscal 
                year to carry out this section.
                    ``(C) Administrative expenses.--Not more than 15 
                percent of assistance received by a qualified 
                organization for a fiscal year under this section may 
                be used for administrative expenses.
    ``(d) Subgrants.--Subject to such regulations as the Secretary may 
promulgate, a qualified organization that receives a grant under this 
section may use the grant to provide assistance to other qualified 
organizations, such as small or emerging qualified organizations.
    ``(e) Low-Income Individuals.--The Secretary shall ensure that not 
less than 50 percent of the grants made under this section is used to 
benefit low-income individuals identified by the Secretary, including 
individuals residing on Indian reservations.
    ``(f) Diversity.--In making grants under this section, the 
Secretary shall ensure, to the maximum extent practicable, that grant 
recipients include qualified organizations--
            ``(1) of varying sizes; and
            ``(2) that serve racially and ethnically diverse 
        populations.
    ``(g) Cost Sharing.--
            ``(1) Federal share.--The Federal share of the cost of a 
        project carried out using funds from a grant under this section 
        shall be 75 percent.
            ``(2) Form of non-federal share.--The non-Federal share of 
        the cost of a project described in paragraph (1) may be 
        provided--
                    ``(A) in cash (including through fees, grants 
                (including community development block grants), and 
                gifts); or
                    ``(B) in kind.
    ``(h) Funding.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this Act, and on October 1, 2002, and each October 
        1 thereafter through October 1, 2005, out of any funds in the 
        Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary of Agriculture to 
        carry out this section $10,000,000, to remain available until 
        expended.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.''.

SEC. 639. RURAL SENIORS.

    (a) Interagency Coordinating Committee for Rural Seniors.--Subtitle 
D of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et 
seq.) (as amended by section 638) is amended by adding at the end the 
following:

``SEC. 379. INTERAGENCY COORDINATING COMMITTEE FOR RURAL SENIORS.

    ``(a) In General.--The Secretary shall establish an interagency 
coordinating committee (referred to in this section as the `Committee') 
to examine the special problems of rural seniors.
    ``(b) Membership.--The Committee shall be comprised of--
            ``(1) the Undersecretary of Agriculture for Rural 
        Development, who shall serve as chairperson of the Committee;
            ``(2) 2 representatives of the Secretary of Health and 
        Human Services, of whom--
                    ``(A) 1 shall have expertise in the field of health 
                care; and
                    ``(B) 1 shall have expertise in the field of 
                programs under the Older Americans Act of 1965 (42 
                U.S.C. 3001 et seq.);
            ``(3) 1 representative of the Secretary of Housing and 
        Urban Development;
            ``(4) 1 representative of the Secretary of Transportation; 
        and
            ``(5) representatives of such other Federal agencies as the 
        Secretary may designate.
    ``(c) Duties.--The Committee shall--
            ``(1) study health care, transportation, technology, 
        housing, accessibility, and other areas of need of rural 
        seniors;
            ``(2) identify successful examples of senior care programs 
        in rural communities that could serve as models for other rural 
        communities; and
            ``(3) not later than 1 year after the date of enactment of 
        this section, submit to the Secretary, the Committee on 
        Agriculture of the House of Representatives, and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate 
        recommendations for legislative and administrative action.
    ``(d) Funding.--Funds available to any Federal agency may be used 
to carry out interagency activities under this section.''.
    (b) Grants for Programs for Rural Seniors.--Subtitle D of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1981 et seq.) (as 
amended by subsection (a)) is amended by adding at the end the 
following:

``SEC. 379A. GRANTS FOR PROGRAMS FOR RURAL SENIORS.

    ``(a) In General.--The Secretary shall make grants to nonprofit 
organizations (including cooperatives) to pay the Federal share of the 
cost of programs that--
            ``(1) provide facilities, equipment, and technology for 
        seniors in a rural area; and
            ``(2) may be replicated in other rural areas.
    ``(b) Federal Share.--The Federal share of a grant under this 
section shall be not more than 20 percent of the cost of a program 
described in subsection (a).
    ``(c) Leveraging.--In selecting programs to receive grants under 
section, the Secretary shall give priority to proposals that leverage 
resources to meet multiple rural community goals.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $25,000,000 for each of fiscal 
years 2003 through 2006.''.
    (c) Reservation of Community Facilities Program Funds for Senior 
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 senior facilities.--
                            ``(i) In general.--For each fiscal year, 
                        not less than 12.5 percent of the funds made 
                        available to carry out this paragraph shall be 
                        reserved for grants to pay the Federal share of 
                        the cost of developing and constructing senior 
                        facilities, or carrying out other projects that 
                        mainly benefit seniors, in rural areas.
                            ``(ii) Release.--Funds reserved under 
                        clause (i) for a fiscal year shall be reserved 
                        only until April 1 of the fiscal year.''.

SEC. 640. CHILDREN'S DAY CARE FACILITIES.

    Section 306(a)(19) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926(a)(19)) (as amended by section 639(c)) is amended by 
adding at the end the following:
                    ``(D) Reservation of funds for children's day care 
                facilities.--
                            ``(i) In general.--For each fiscal year, 
                        not less than 10 percent of the funds made 
                        available to carry out this paragraph shall be 
                        reserved for grants to pay the Federal share of 
                        the cost of developing and constructing day 
                        care facilities for children in rural areas.
                            ``(ii) Release.--Funds reserved under 
                        clause (i) for a fiscal year shall be reserved 
                        only until April 1 of the fiscal year.''.

SEC. 641. RURAL TELEWORK.

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

``SEC. 379B. RURAL TELEWORK.

    ``(a) Definitions.--In this section:
            ``(1) Eligible organization.--The term `eligible 
        organization' means a nonprofit entity, an educational 
        institution, an Indian tribe (as defined in section 4 of the 
        Indian Self-Determination and Education Assistance Act (25 
        U.S.C. 450b)), or any other organization that meets the 
        requirements of this section and such other requirements as are 
        established by the Secretary.
            ``(2) Institute.--The term `institute' means a regional 
        rural telework institute established using a grant under 
        subsection (b).
            ``(3) Telework.--The term `telework' means the use of 
        telecommunications to perform work functions at a rural work 
        center located outside the place of business of an employer.
    ``(b) Rural Telework Institute.--
            ``(1) In general.--The Secretary shall make a grant to an 
        eligible organization to pay the Federal share of the cost of 
        establishing and operating a national rural telework institute 
        to carry out projects described in paragraph (4).
            ``(2) Eligible organizations.--The Secretary shall 
        establish criteria that an organization shall meet to be 
        eligible to receive a grant under this subsection.
            ``(3) Deadline for initial grant.--Not later than 1 year 
        after the date on which funds are first made available to carry 
        out this subsection, the Secretary shall make the initial grant 
        under this subsection.
            ``(4) Projects.--The institute shall use grant funds 
        obtained under this subsection to carry out a 5-year project--
                    ``(A) to serve as a clearinghouse for telework 
                research and development;
                    ``(B) to conduct outreach to rural communities and 
                rural workers;
                    ``(C) to develop and share best practices in rural 
                telework throughout the United States;
                    ``(D) to develop innovative, market-driven telework 
                projects and joint ventures with the private sector 
                that employ workers in rural areas in jobs that promote 
                economic self-sufficiency;
                    ``(E) to share information about the design and 
                implementation of telework arrangements;
                    ``(F) to support private sector businesses that are 
                transitioning to telework;
                    ``(G) to support and assist telework projects and 
                individuals at the State and local level; and
                    ``(H) to perform such other functions as the 
                Secretary considers appropriate.
            ``(5) Non-federal share.--
                    ``(A) In general.--As a condition of receiving a 
                grant under this subsection, an eligible organization 
                shall agree to obtain, after the application of the 
                eligible organization has been approved and notice of 
                award has been issued, contributions from non-Federal 
                sources that are equal to--
                            ``(i) during each of the first, second, and 
                        third years of a project, 50 percent of the 
                        amount of the grant; and
                            ``(ii) during each of the fourth and fifth 
                        years of the project, 100 percent of the amount 
                        of the grant.
                    ``(B) Indian tribes.--Notwithstanding subparagraph 
                (A), an Indian tribe may use Federal funds made 
                available to the tribe for self-governance to pay the 
                non-Federal contributions required under subparagraph 
                (A).
                    ``(C) Form.--The non-Federal contributions required 
                under subparagraph (A) may be in the form of in-kind 
                contributions, including office equipment, office 
                space, and services.
    ``(c) Telework Grants.--
            ``(1) In general.--Subject to paragraphs (2) through (5), 
        the Secretary shall make grants to eligible entities to pay the 
        Federal share of the cost of--
                    ``(A) obtaining equipment and facilities to 
                establish or expand telework locations in rural areas; 
                and
                    ``(B) operating telework locations in rural areas.
            ``(2) Eligible organizations.--To be eligible to receive a 
        grant under this subsection, an eligible entity shall--
                    ``(A) be a nonprofit organization or educational 
                institution in a rural area; and
                    ``(B) submit to, and receive the approval of, the 
                Secretary of an application for the grant that 
                demonstrates that the eligible entity has adequate 
                resources and capabilities to establish or expand a 
                telework location in a rural area.
            ``(3) Non-federal share.--
                    ``(A) In general.--As a condition of receiving a 
                grant under this subsection, an eligible organization 
                shall agree to obtain, after the application of the 
                eligible organization has been approved and notice of 
                award has been issued, contributions from non-Federal 
                sources that are equal to 50 percent of the amount of 
                the grant.
                    ``(B) Indian tribes.--Notwithstanding subparagraph 
                (A), an Indian tribe may use Federal funds made 
                available to the tribe for self-governance to pay the 
                non-Federal contributions required under subparagraph 
                (A).
                    ``(C) Sources.--The non-Federal contributions 
                required under subparagraph (A)--
                            ``(i) may be in the form of in-kind 
                        contributions, including office equipment, 
                        office space, and services; and
                            ``(ii) may not be made from funds made 
                        available for community development block 
                        grants under title I of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5301 et seq.).
            ``(4) Duration.--The Secretary may not provide a grant 
        under this subsection to establish, expand, or operate a 
        telework location in a rural area after the date that is 2 
        years after the establishment of the telework location.
            ``(5) Maximum amount of grant.--The amount of a grant 
        provided to an eligible entity under this subsection shall not 
        exceed $500,000.
    ``(d) Applicability of Certain Federal Law.--An entity that 
receives funds under this section shall be subject to the provisions of 
Federal law (including regulations), administered by the Secretary of 
Labor or the Equal Employment Opportunity Commission, that govern the 
responsibilities of employers to employees.
    ``(e) Regulations.--Not later than 180 days after the date of 
enactment of this section, the Secretary shall promulgate regulations 
to carry out this section.
    ``(f) Authorization of Appropriation.--There is authorized to be 
appropriated to carry out this section $30,000,000 for each of fiscal 
years 2002 through 2006, of which $5,000,000 shall be provided to 
establish an institute under subsection (b).''.

SEC. 642. HISTORIC BARN PRESERVATION.

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

``SEC. 379C. HISTORIC BARN PRESERVATION.

    ``(a) Definitions.--In this section:
            ``(1) Barn.--The term `barn' means a building (other than a 
        dwelling) on a farm, ranch, or other agricultural operation 
        for--
                    ``(A) housing animals;
                    ``(B) storing or processing crops;
                    ``(C) storing and maintaining agricultural 
                equipment; or
                    ``(D) serving an essential or useful purpose 
                related to agriculture on the adjacent land.
            ``(2) Eligible applicant.--The term `eligible applicant' 
        means--
                    ``(A) a State department of agriculture (or a 
                designee);
                    ``(B) a national or State nonprofit organization 
                that--
                            ``(i) is exempt from tax under section 
                        501(c)(3) of the Internal Revenue Code of 1986; 
                        and
                            ``(ii) has experience or expertise, as 
                        determined by the Secretary, in the 
                        identification, evaluation, rehabilitation, 
                        preservation, or protection of historic barns; 
                        and
                    ``(C) a State historic preservation office.
            ``(3) Historic barn.--The term `historic barn' means a barn 
        that--
                    ``(A) is at least 50 years old;
                    ``(B) retains sufficient integrity of design, 
                materials, and construction to clearly identify the 
                barn as an agricultural building; and
                    ``(C) meets the criteria for listing on National, 
                State, or local registers or inventories of historic 
                structures.
            ``(4) Secretary.--The term `Secretary' means the Secretary, 
        acting through the Undersecretary of Rural Development.
    ``(b) Program.--The Secretary shall establish a historic barn 
preservation program--
            ``(1) to assist States in developing a listing of historic 
        barns;
            ``(2) to collect and disseminate information on historic 
        barns;
            ``(3) to foster educational programs relating to the 
        history, construction techniques, rehabilitation, and 
        contribution to society of historic barns; and
            ``(4) to sponsor and conduct research on--
                    ``(A) the history of barns; and
                    ``(B) best practices to protect and rehabilitate 
                historic barns from the effects of decay, fire, arson, 
                and natural disasters.
    ``(c) Grants.--
            ``(1) In general.--The Secretary may make grants to, or 
        enter into contracts or cooperative agreements with, eligible 
        applicants to carry out an eligible project under paragraph 
        (2).
            ``(2) Eligible projects.--A grant under this subsection may 
        be made to an eligible entity for a project--
                    ``(A) to rehabilitate or repair a historic barn;
                    ``(B) to preserve a historic barn through--
                            ``(i) the installation of a fire protection 
                        system, including fireproofing or fire 
                        detection system and sprinklers; and
                            ``(ii) the installation of a system to 
                        prevent vandalism; and
                    ``(C) to identify, document, and conduct research 
                on a historic barn to develop and evaluate appropriate 
                techniques or best practices for protecting historic 
                barns.
            ``(3) Requirements.--An eligible applicant that receives a 
        grant for a project under this subsection shall comply with any 
        standards established by the Secretary of the Interior for 
        historic preservation projects.
    ``(d) Funding.--There is authorized to be appropriated to carry out 
this section, $25,000,000 for the period of fiscal years 2002 through 
2006, to remain available until expended.''.

SEC. 643. GRANTS FOR EMERGENCY WEATHER RADIO TRANSMITTERS.

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

``SEC. 379D. GRANTS FOR EMERGENCY WEATHER RADIO TRANSMITTERS.

    ``(a) In General.--The Secretary, acting through the Administrator 
of the Rural Utilities Service, may make grants to public and nonprofit 
entities for the Federal share of the cost of acquiring radio 
transmitters to increase coverage of rural areas by the emergency 
weather radio broadcast system of the National Oceanic and Atmospheric 
Administration.
    ``(b) Eligibility.--To be eligible for a grant under this section, 
an applicant shall provide to the Secretary--
            ``(1) a binding commitment from a tower owner to place the 
        transmitter on a tower; and
            ``(2) a description of how the tower placement will 
        increase coverage of a rural area by the emergency weather 
        radio broadcast system of the National Oceanic and Atmospheric 
        Administration.
    ``(c) Federal Share.--A grant provided under this section shall be 
not more than 75 percent of the cost of acquiring a radio transmitter 
described in subsection (a).
    ``(d) Authorization.--There is authorized to be appropriated to 
carry out this section $2,000,000 for each of fiscal years 2002 through 
2006.''.

SEC. 644. BIOENERGY AND BIOCHEMICAL PROJECTS.

    Subtitle D of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1981 et seq.) (as amended by section 643) is amended by adding 
at the end the following:

``SEC. 379E. BIOENERGY AND BIOCHEMICAL PROJECTS.

    ``In carrying out rural development loan, loan guarantee, and grant 
programs under this title, the Secretary shall provide a priority for 
bioenergy and biochemical projects.''.

SEC. 645. DELTA REGIONAL AUTHORITY.

    (a) Authorization of Appropriations.--Section 382M(a) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa-12(a)) is 
amended by striking ``2002'' and inserting ``2006''.
    (b) 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 ``2006''.

SEC. 646. SEARCH GRANTS FOR SMALL COMMUNITIES.

    The Consolidated Farm and Rural Development Act (as amended by 
section 604) is amended by adding at the end the following:

           ``Subtitle J--SEARCH Grants for Small Communities

``SEC. 386A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Council.--The term `council' means an independent 
        citizens' council established by section 386B(d).
            ``(2) Environmental project.--
                    ``(A) In general.--The term `environmental project' 
                means a project that--
                            ``(i) improves environmental quality; and
                            ``(ii) is necessary to comply with an 
                        environmental law (including a regulation).
                    ``(B) Inclusion.--The term `environmental project' 
                includes an initial feasibility study of a project.
            ``(3) Region.--The term `region' means a geographic area of 
        a State, as determined by the Governor of the State.
            ``(4) SEARCH grant.--The term `SEARCH grant' means a grant 
        for special environmental assistance for the regulation of 
        communities and habitat awarded under section 386B(e)(3).
            ``(5) Small community.--The term `small community' means an 
        incorporated or unincorporated rural community with a 
        population of 2,500 inhabitants or less.
            ``(6) State.--The term `State' has the meaning given the 
        term in section 381A(1).

``SEC. 386B. SEARCH GRANT PROGRAM.

    ``(a) In General.--There is established the SEARCH Grant Program.
    ``(b) Application.--
            ``(1) In general.--Not later than October 1 of each fiscal 
        year, a State may submit to the Secretary an application to 
        receive a grant under subsection (c) for the fiscal year.
            ``(2) Requirements.--An application under paragraph (1) 
        shall contain--
                    ``(A) a certification by the State that the State 
                has appointed members to the council of the State under 
                subsection (c)(2)(C); and
                    ``(B) such information as the Secretary may 
                reasonably require.
    ``(c) Grants to States.--
            ``(1) In general.--Not later than 60 days after the date on 
        which the Office of Management and Budget apportions any 
        amounts made available under this subtitle, for each fiscal 
        year after the date of enactment of this subtitle, the 
        Secretary shall, on request by a State--
                    ``(A) determine whether any application submitted 
                by the State under subsection (b) meets the 
                requirements of subsection (b)(2); and
                    ``(B) subject to paragraph (2), subsection 
                (e)(4)(B)(ii), and section 386D(b), if the Secretary 
                determines that the application meets the requirements 
                of subsection (b)(2), award a grant of not to exceed 
                $1,000,000 to the State, to be used by the council of 
                the State to award SEARCH grants under subsection (e).
            ``(2) Grants to certain states.--The aggregate amount of 
        grants awarded to States other than Alaska, Hawaii, or 1 of the 
        48 contiguous States, under this subsection shall not exceed 
        $1,000,000 for any fiscal year.
    ``(d) Independent Citizens' Council.--
            ``(1) Establishment.--There is established in each State an 
        independent citizens' council to carry out the duties described 
        in this section.
            ``(2) Composition.--
                    ``(A) In general.--Each council shall be composed 
                of 9 members, appointed by the Governor of the State.
                    ``(B) Representation; residence.--Each member of a 
                council shall--
                            ``(i) represent an individual region of the 
                        State, as determined by the Governor of the 
                        State in which the council is established;
                            ``(ii) reside in a small community of the 
                        State; and
                            ``(iii) be representative of the 
                        populations of the State.
                    ``(C) Appointment.--Before a State receives funds 
                under this subtitle, the State shall appoint members to 
                the council for the fiscal year, except that not more 
                than 1 member shall be an agent, employee, or official 
                of the State government.
                    ``(D) Chairperson.--Each council shall select a 
                chairperson from among the members of the council, 
                except that a member who is an agent, employee, or 
                official of the State government shall not serve as 
                chairperson.
                    ``(E) Federal representation.--
                            ``(i) In general.--An officer, employee, or 
                        agent of the Federal Government may participate 
                        in the activities of the council--
                                    ``(I) in an advisory capacity; and
                                    ``(II) at the invitation of the 
                                council.
                            ``(ii) Rural development state directors.--
                        On the request of the council of a State, the 
                        State Director for Rural Development of the 
                        State shall provide advice and consultation to 
                        the council.
            ``(3) SEARCH grants.--
                    ``(A) In general.--Each council shall review 
                applications for, and recommend awards of, SEARCH 
                grants to small communities that meet the eligibility 
                criteria under subsection (c).
                    ``(B) Recommendations.--In awarding a SEARCH grant, 
                a State--
                            ``(i) shall follow the recommendations of 
                        the council of the State;
                            ``(ii) shall award the funds for any 
                        recommended environmental project in a timely 
                        and expeditious manner; and
                            ``(iii) shall not award a SEARCH grant to a 
                        grantee or project in violation of any law of 
                        the State (including a regulation).
                    ``(C) No matching requirement.--A small community 
                that receives a SEARCH grant under this section shall 
                not be required to provide matching funds.
    ``(e) SEARCH Grants for Small Communities.--
            ``(1) Eligibility.--A SEARCH grant shall be awarded under 
        this section only to a small community for 1 or more 
        environmental projects for which the small community--
                    ``(A) needs funds to carry out initial feasibility 
                or environmental studies before applying to traditional 
                funding sources; or
                    ``(B) demonstrates, to the satisfaction of the 
                council, that the small community has been unable to 
                obtain sufficient funding from traditional funding 
                sources.
            ``(2) Application.--
                    ``(A) Date.--The council shall establish such 
                deadline by which small communities shall submit 
                applications for grants under this section as will 
                permit the council adequate time to review and make 
                recommendations relating to the applications.
                    ``(B) Location of application.--A small community 
                shall submit an application described in subparagraph 
                (A) to the council in the State in which the small 
                community is located.
                    ``(C) Content of application.--An application 
                described in subparagraph (A) shall include--
                            ``(i) a description of the proposed 
                        environmental project (including an explanation 
                        of how the project would assist the small 
                        community in complying with an environmental 
                        law (including a regulation));
                            ``(ii) an explanation of why the project is 
                        important to the small community;
                            ``(iii) a description of all actions taken 
                        with respect to the project, including a 
                        description of any attempt to secure funding 
                        and a description of demonstrated need for 
                        funding for the project, as of the date of the 
                        application; and
                            ``(iv) a SEARCH grant application form 
                        provided by the council, completed and with all 
                        required supporting documentation.
            ``(3) Review and recommendation.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), not later than March 5 of each fiscal 
                year, each council shall--
                            ``(i) review all applications received 
                        under paragraph (2); and
                            ``(ii) recommend for award SEARCH grants to 
                        small communities based on--
                                    ``(I) an evaluation of the 
                                eligibility criteria under paragraph 
                                (1); and
                                    ``(II) the content of the 
                                application.
                    ``(B) Extension of deadline.--The State may extend 
                the deadline described in subparagraph (A) by not more 
                than 10 days in a case in which the receipt of 
                recommendations from a council under subparagraph 
                (A)(ii) is delayed because of circumstances beyond the 
                control of the council, as determined by the State.
            ``(4) Unexpended funds.--
                    ``(A) In general.--If, for any fiscal year, any 
                unexpended funds remain after SEARCH grants are awarded 
                under subsection (d)(3)(B), the council may repeat the 
                application and review process so that any remaining 
                funds may be recommended for award, and awarded, not 
                later than July 30 of the fiscal year.
                    ``(B) Retention of funds.--
                            ``(i) In general.--Any unexpended funds 
                        that are not awarded under subsection (d)(3)(B) 
                        or subparagraph (A) shall be retained by the 
                        State for award during the following fiscal 
                        year.
                            ``(ii) Limitation.--A State that 
                        accumulates a balance of unexpended funds 
                        described in clause (i) of more than $3,000,000 
                        shall be ineligible to apply for additional 
                        funds for SEARCH grants until such time as the 
                        State expends the portion of the balance that 
                        exceeds $3,000,000.

``SEC. 386C. REPORT.

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

``SEC. 386D. FUNDING.

    ``(a) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out section 386B(c) $51,000,000, of which not to 
exceed $1,000,000 shall be used to make grants under section 
386B(c)(2).
    ``(b) Actual Appropriation.--If funds to carry out section 386B(c) 
are made available for a fiscal year in an amount that is less than the 
amount authorized under subsection (a) for the fiscal year, the 
appropriated funds shall be divided equally among the 50 States.
    ``(c) Unused Funds.--If, for any fiscal year, a State does not 
apply, or does not qualify, to receive funds under section 386B(b), the 
funds that would have been made available to the State under section 
386B(c) on submission by the State of a successful application under 
section 386B(b) shall be redistributed for award under this subtitle 
among States, the councils of which awarded 1 or more SEARCH grants 
during the preceding fiscal year.
    ``(d) Other Expenses.--There are authorized to be appropriated such 
sums as are necessary to carry out the provisions of this subtitle 
(other than section 386B(c)).''.

SEC. 647. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

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

         ``Subtitle K--Northern Great Plains Regional Authority

``SEC. 387A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Authority.--The term `Authority' means the Northern 
        Great Plains Regional Authority established by section 387B.
            ``(2) Federal grant program.--The term `Federal grant 
        program' means a Federal grant program to provide assistance 
        in--
                    ``(A) acquiring or developing land;
                    ``(B) constructing or equipping a highway, road, 
                bridge, or facility; or
                    ``(C) carrying out other economic development 
                activities.
            ``(3) Region.--The term `region' means the States of Iowa, 
        Minnesota, Nebraska, North Dakota, and South Dakota.

``SEC. 387B. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

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

``SEC. 387C. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.

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

``SEC. 387D. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

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

``SEC. 387E. LOCAL DEVELOPMENT DISTRICTS; CERTIFICATION AND 
              ADMINISTRATIVE EXPENSES.

    ``(a) Definition of Local Development District.--In this section, 
the term `local development district' means an entity that--
            ``(1) is--
                    ``(A) a planning district in existence on the date 
                of enactment of this subtitle that is recognized by the 
                Economic Development Administration of the Department 
                of Commerce; or
                    ``(B) where an entity described in subparagraph (A) 
                does not exist--
                            ``(i) organized and operated in a manner 
                        that ensures broad-based community 
                        participation and an effective opportunity for 
                        other nonprofit groups to contribute to the 
                        development and implementation of programs in 
                        the region;
                            ``(ii) governed by a policy board with at 
                        least a simple majority of members consisting 
                        of elected officials or employees of a general 
                        purpose unit of local government who have been 
                        appointed to represent the government;
                            ``(iii) certified to the Authority as 
                        having a charter or authority that includes the 
                        economic development of counties or parts of 
                        counties or other political subdivisions within 
                        the region--
                                    ``(I) by the Governor of each State 
                                in which the entity is located; or
                                    ``(II) by the State officer 
                                designated by the appropriate State law 
                                to make the certification; and
                            ``(iv)(I) a nonprofit incorporated body 
                        organized or chartered under the law of the 
                        State in which the entity is located;
                            ``(II) a nonprofit agency or 
                        instrumentality of a State or local government;
                            ``(III) a public organization established 
                        before the date of enactment of this subtitle 
                        under State law for creation of multi-
                        jurisdictional, area-wide planning 
                        organizations; or
                            ``(IV) a nonprofit association or 
                        combination of bodies, agencies, and 
                        instrumentalities described in subclauses (I) 
                        through (III); and
            ``(2) has not, as certified by the Federal cochairperson--
                    ``(A) inappropriately used Federal grant funds from 
                any Federal source; or
                    ``(B) appointed an officer who, during the period 
                in which another entity inappropriately used Federal 
                grant funds from any Federal source, was an officer of 
                the other entity.
    ``(b) Grants to Local Development Districts.--
            ``(1) In general.--The Authority may make grants for 
        administrative expenses under this section.
            ``(2) Conditions for grants.--
                    ``(A) Maximum amount.--The amount of any grant 
                awarded under paragraph (1) shall not exceed 80 percent 
                of the administrative expenses of the local development 
                district receiving the grant.
                    ``(B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded to a State agency 
                certified as a local development district for a period 
                greater than 3 years.
                    ``(C) Local share.--The contributions of a local 
                development district for administrative expenses may be 
                in cash or in kind, fairly evaluated, including space, 
                equipment, and services.
    ``(c) Duties of Local Development Districts.--A local development 
district shall--
            ``(1) operate as a lead organization serving multicounty 
        areas in the region at the local level; and
            ``(2) serve as a liaison between State and local 
        governments, nonprofit organizations (including community-based 
        groups and educational institutions), the business community, 
        and citizens that--
                    ``(A) are involved in multijurisdictional planning;
                    ``(B) provide technical assistance to local 
                jurisdictions and potential grantees; and
                    ``(C) provide leadership and civic development 
                assistance.

``SEC. 387F. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED COUNTIES.

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

``SEC. 387G. DEVELOPMENT PLANNING PROCESS.

    ``(a) State Development Plan.--In accordance with policies 
established by the Authority, each State member shall submit a 
development plan for the area of the region represented by the State 
member.
    ``(b) Content of Plan.--A State development plan submitted under 
subsection (a) shall reflect the goals, objectives, and priorities 
identified in the regional development plan developed under section 
387B(d)(2).
    ``(c) Consultation With Interested Local Parties.--In carrying out 
the development 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. 387H. PROGRAM DEVELOPMENT CRITERIA.

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

``SEC. 387I. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

    ``(a) In General.--A State or regional development plan or any 
multistate subregional plan that is proposed for development under this 
subtitle shall be reviewed by the Authority.
    ``(b) Evaluation by State Member.--An application for a grant or 
any other assistance for a project under this subtitle shall be made 
through and evaluated for approval by the State member of the Authority 
representing the applicant.
    ``(c) Certification.--An application for a grant or other 
assistance for a project shall be approved only on certification by the 
State member that the application for the project--
            ``(1) describes ways in which the project complies with any 
        applicable State development plan;
            ``(2) meets applicable criteria under section 387H;
            ``(3) provides adequate assurance that the proposed project 
        will be properly administered, operated, and maintained; and
            ``(4) otherwise meets the requirements of this subtitle.
    ``(d) Votes for Decisions.--On certification by a State member of 
the Authority of an application for a grant or other assistance for a 
specific project under this section, an affirmative vote of the 
Authority under section 387B(c) shall be required for approval of the 
application.

``SEC. 387J. CONSENT OF STATES.

    ``Nothing in this subtitle requires any State to engage in or 
accept any program under this subtitle without the consent of the 
State.

``SEC. 387K. RECORDS.

    ``(a) Records of the Authority.--
            ``(1) In general.--The Authority shall maintain accurate 
        and complete records of all transactions and activities of the 
        Authority.
            ``(2) Availability.--All records of the Authority shall be 
        available for audit and examination by the Comptroller General 
        of the United States and the Inspector General of the 
        Department of Agriculture (including authorized representatives 
        of the Comptroller General and the Inspector General of the 
        Department of Agriculture).
    ``(b) Records of Recipients of Federal Assistance.--
            ``(1) In general.--A recipient of Federal funds under this 
        subtitle shall, as required by the Authority, maintain accurate 
        and complete records of transactions and activities financed 
        with Federal funds and report on the transactions and 
        activities to the Authority.
            ``(2) Availability.--All records required under paragraph 
        (1) shall be available for audit by the Comptroller General of 
        the United States, the Inspector General of the Department of 
        Agriculture, and the Authority (including authorized 
        representatives of the Comptroller General, the Inspector 
        General of the Department of Agriculture, and the Authority).
    ``(c) Annual Audit.--The Inspector General of the Department of 
Agriculture shall audit the activities, transactions, and records of 
the Authority on an annual basis.

``SEC. 387L. ANNUAL REPORT.

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

``SEC. 387M. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Authority to carry out this subtitle $30,000,000 for each of fiscal 
years 2002 through 2006, to remain available until expended.
    ``(b) Administrative Expenses.--Not more than 5 percent of the 
amount appropriated under subsection (a) for a fiscal year shall be 
used for administrative expenses of the Authority.
    ``(c) Minimum State Share of Grants.--Notwithstanding any other 
provision of this subtitle, for any fiscal year, the aggregate amount 
of grants received by a State and all persons or entities in the State 
under this subtitle shall be not less than \1/3\ of the product 
obtained by multiplying--
            ``(1) the aggregate amount of grants under this subtitle 
        for the fiscal year; and
            ``(2) the ratio that--
                    ``(A) the population of the State (as determined by 
                the Secretary of Commerce based on the most recent 
                decennial census for which data are available); bears 
                to
                    ``(B) the population of the region (as so 
                determined).

``SEC. 387N. TERMINATION OF AUTHORITY.

    ``This subtitle and the authority provided under this subtitle 
expire on October 1, 2006.''.

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

SEC. 651. 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 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 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.), 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 greatest return on 
        investment.
    (c) Use of 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 into an 
        account in the Treasury, and shall remain available to the 
        Secretary until expended, without further appropriation, to 
        pay--
                    (A) any outstanding claims 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) The following provisions are repealed:
                    (A) Section 730 of the Federal Agriculture 
                Improvement and Reform Act of 1996 (7 U.S.C. 5902 note; 
                Public Law 104-127).
                    (B) Section 9101(3)(Q) of title 31, United States 
                Code.
            (2) Section 401(c) of the Agricultural Research, Education, 
        and Extension Reform Act of 1998 (7 U.S.C. 7621(c)) is amended 
        by striking paragraph (1) and inserting the following:
            ``(1) Critical emerging issues.--Subject to paragraph (2), 
        the Secretary shall use the funds in the Account for research, 
        extension, and education grants (referred to in this section as 
        `grants') to address critical emerging agricultural issues 
        related to--
                    ``(A) future food production;
                    ``(B) environmental quality and natural resource 
                management; or
                    ``(C) farm income.''.
            (3) Section 793(c)(1)(A)(ii)(II) of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 
        2204f(c)(1)(A)(ii)(II)) is amended by striking ``subtitle G of 
        title XVI and''.

SEC. 652. 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 ``2006''.
    (b) Conforming Amendment.--Section 1(b) of Public Law 102-551 (7 
U.S.C. 950aaa note) is amended by striking ``1997'' and inserting 
``2006''.

             Subtitle E--Rural Electrification Act of 1936

SEC. 661. BIOENERGY AND BIOCHEMICAL PROJECTS.

    Title I of the Rural Electrification Act of 1936 (7 U.S.C. 901 et 
seq.) is amended by adding at the end the following:

``SEC. 20. BIOENERGY AND BIOCHEMICAL PROJECTS.

    ``In carrying out rural electric loan, loan guarantee, and grant 
programs under this Act, the Secretary shall provide a priority for 
bioenergy and biochemical projects.''.

SEC. 662. 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. GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION 
              OR TELEPHONE PURPOSES.

    ``(a) In General.--Subject to subsection (b), the Secretary shall 
guarantee payments on bonds or notes issued by cooperative or other 
lenders organized on a not-for-profit basis if the proceeds of the 
bonds or notes are used for electrification or telephone projects 
eligible for assistance under this Act, including the refinancing of 
bonds or notes issued for such projects.
    ``(b) Limitations.--
            ``(1) Outstanding loans.--A lender shall not receive a 
        guarantee under this section for a bond or note if, at the time 
        of the guarantee, the total principal amount of such guaranteed 
        bonds or notes outstanding of the lender would exceed the 
        principal amount of outstanding loans of the lender for 
        electrification or telephone purposes that have been made 
        concurrently with loans approved for such purposes under this 
        Act.
            ``(2) Generation of electricity.--The Secretary shall not 
        guarantee payment on a bond or note issued by a lender, the 
        proceeds of which are used for the generation of electricity.
            ``(3) Qualifications.--The Secretary may deny the request 
        of a lender for the guarantee of a bond or note under this 
        section if the Secretary determines that--
                    ``(A) the lender does not have appropriate 
                expertise or experience or is otherwise not qualified 
                to make loans for electrification or telephone 
                purposes;
                    ``(B) the bond or note issued by the lender is not 
                of reasonable and sufficient quality; or
                    ``(C) the lender has not provided sufficient 
                evidence that the proceeds of the bond or note are used 
                for eligible projects described in subsection (a).
            ``(4) Interest rate reduction.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a lender may not use any amount 
                obtained from the reduction in funding costs as a 
                result of the guarantee of a bond or note under this 
                section to reduce the interest rate on a new or 
                outstanding loan.
                    ``(B) Concurrent loans.--A lender may use any 
                amount described in subparagraph (A) to reduce the 
                interest rate on a loan if the loan is--
                            ``(i) made by the lender for 
                        electrification or telephone projects that are 
                        eligible for assistance under this Act; and
                            ``(ii) made concurrently with a loan 
                        approved by the Secretary under this Act for 
                        such a project, as provided in section 307.
    ``(c) Fees.--
            ``(1) In general.--A lender that receives a guarantee 
        issued under this section on a bond or note shall pay a fee to 
        the Secretary.
            ``(2) Amount.--The amount of an annual fee paid for the 
        guarantee of a bond or note under this section shall be equal 
        to 30 basis points of the amount of the unpaid principal of the 
        bond or note guaranteed under this section.
            ``(3) Payment.--A lender shall pay the fees required under 
        this subsection on a semiannual basis.
            ``(4) Rural economic development subaccount.--Subject to 
        subsection (e)(2), fees collected under this subsection shall 
        be--
                    ``(A) deposited into the rural economic development 
                subaccount maintained under section 313(b)(2)(A), to 
                remain available until expended; and
                    ``(B) used for the purposes described in section 
                313(b)(2)(B).
    ``(d) Guarantees.--
            ``(1) In general.--A guarantee issued under this section 
        shall--
                    ``(A) be for the full amount of a bond or note, 
                including the amount of principal, interest, and call 
                premiums;
                    ``(B) be fully assignable and transferable; and
                    ``(C) represent the full faith and credit of the 
                United States.
            ``(2) Limitation.--To ensure that the Secretary has the 
        resources necessary to properly examine the proposed 
        guarantees, the Secretary may limit the number of guarantees 
        issued under this section if the number of such guarantees 
        exceeds 5 per year.
            ``(3) Department opinion.--On the timely request of an 
        eligible lender, the General Counsel of the Department of 
        Agriculture shall provide the Secretary with an opinion 
        regarding the validity and authority of a guarantee issued to 
        the lender under this section.
    ``(e) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        such sums as are necessary to carry out this section.
            ``(2) Fees.--To the extent that the amount of funds 
        appropriated for a fiscal year under paragraph (1) are not 
        sufficient to carry out this section, the Secretary may use up 
        to \1/3\ of the fees collected under subsection (c) for the 
        cost of providing guarantees of bonds and notes under this 
        section before depositing the remainder of the fees into the 
        rural economic development subaccount maintained under section 
        313(b)(2)(A).
    ``(f) Termination.--The authority provided under this section shall 
terminate on September 30, 2006.''.
    (b) Administration of Cushion of Credit Payments Program.--Section 
313(b)(2)(B) of the Rural Electrification Act of 1936 (7 U.S.C. 
940c)(b)(2)(B)) is amended by inserting ``, acting through the Rural 
Utilities Service,'' after ``Secretary''.
    (c) Administration.--
            (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. 663. EXPANSION OF 911 ACCESS.

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