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107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-424

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



 
             FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

                                _______
                                

                  May 1, 2002.--Ordered to be printed

                                _______
                                

 Mr. Combest, from the committee of conference, submitted the following

                           CONFERENCE REPORT

                        [To accompany H.R. 2646]

    The committee of conference on the disagreeing votes of the 
two Houses on the amendments of the Senate to the bill (H.R. 
2646), to provide for the continuation of agricultural programs 
through fiscal year 2011, having met, after full and free 
conference, have agreed to recommend and do recommend to their 
respective Houses as follows:
    That the House recede from its disagreement to the 
amendment of the Senate to the text of the bill and agree to 
the same with an amendment as follows:
    In lieu of the matter proposed to be inserted by the Senate 
amendment, insert the following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Farm 
Security and Rural Investment Act of 2002''.
    (b) Table of Contents.--The table of contents of this Act 
is as follows:
Sec. 1. Short title; table of contents.

                       TITLE I--COMMODITY PROGRAMS

Sec. 1001. Definitions.

        Subtitle A--Direct Payments and Counter-Cyclical Payments

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

   Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

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

                           Subtitle C--Peanuts

Sec. 1301. Definitions.
Sec. 1302. Establishment of payment yield and base acres for peanuts for 
          a farm.
Sec. 1303. Availability of direct payments for peanuts.
Sec. 1304. Availability of counter-cyclical payments for peanuts.
Sec. 1305. Producer agreement required as condition on provision of 
          direct payments and counter-cyclical payments.
Sec. 1306. Planting flexibility.
Sec. 1307. Marketing assistance loans and loan deficiency payments for 
          peanuts.
Sec. 1308. Miscellaneous provisions.
Sec. 1309. Termination of marketing quota programs for peanuts and 
          compensation to peanut quota holders for loss of quota asset 
          value.
Sec. 1310. Repeal of superseded price support authority and effect of 
          repeal.

                            Subtitle D--Sugar

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

                            Subtitle E--Dairy

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

                       Subtitle F--Administration

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

                         TITLE II--CONSERVATION

                    Subtitle A--Conservation Security

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

                    Subtitle B--Conservation Reserve

Sec. 2101. Conservation reserve program.

                  Subtitle C--Wetlands Reserve Program

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

              Subtitle D--Environmental Quality Incentives

Sec. 2301. Environmental quality incentives program.

                      Subtitle E--Grassland Reserve

Sec. 2401. Grassland reserve program.

                 Subtitle F--Other Conservation Programs

Sec. 2501. Agricultural management assistance.
Sec. 2502. Grazing, wildlife habitat incentive, source water protection, 
          and Great Lakes basin programs.
Sec. 2503. Farmland protection program.
Sec. 2504. Resource conservation and development program.
Sec. 2505. Small watershed rehabilitation program.
Sec. 2506. Use of symbols, slogans, and logos.
Sec. 2507. Desert terminal lakes.

         Subtitle G--Conservation Corridor Demonstration Program

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

                 Subtitle H--Funding and Administration

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

                            TITLE III--TRADE

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

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

               Subtitle B--Agricultural Trade Act of 1978

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

                        Subtitle C--Miscellaneous

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

                      TITLE IV--NUTRITION PROGRAMS

Sec. 4001. Short title.

                     Subtitle A--Food Stamp Program

Sec. 4101. Encouragement of payment of child support.
Sec. 4102. Simplified definition of income.
Sec. 4103. Standard deduction.
Sec. 4104. Simplified utility allowance.
Sec. 4105. Simplified determination of housing costs.
Sec. 4106. Simplified determination of deductions.
Sec. 4107. Simplified definition of resources.
Sec. 4108. Alternative issuance systems in disasters.
Sec. 4109. State option to reduce reporting requirements.
Sec. 4110. Cost neutrality for electronic benefit transfer systems.
Sec. 4111. Report on electronic benefit transfer systems.
Sec. 4112. Alternative procedures for residents of certain group 
          facilities.
Sec. 4113. Redemption of benefits through group living arrangements.
Sec. 4114. Availability of food stamp program applications on the 
          Internet.
Sec. 4115. Transitional food stamps for families moving from welfare.
Sec. 4116. Grants for simple application and eligibility determination 
          systems and improved access to benefits.
Sec. 4117. Delivery to retailers of notices of adverse action.
Sec. 4118. Reform of quality control system.
Sec. 4119. Improvement of calculation of State performance measures.
Sec. 4120. Bonuses for States that demonstrate high or most improved 
          performance.
Sec. 4121. Employment and training program.
Sec. 4122. Reauthorization of food stamp program and food distribution 
          program on Indian reservations.
Sec. 4123. Expanded grant authority.
Sec. 4124. Consolidated block grants for Puerto Rico and American Samoa.
Sec. 4125. Assistance for community food projects.
Sec. 4126. Availability of commodities for the emergency food assistance 
          program.

                   Subtitle B--Commodity Distribution

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

            Subtitle C--Child Nutrition and Related Programs

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

                        Subtitle D--Miscellaneous

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

                             TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

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

                       Subtitle B--Operating Loans

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

                       Subtitle C--Emergency Loans

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

                  Subtitle D--Administrative Provisions

Sec. 5301. Evaluations of direct and guaranteed loan programs.
Sec. 5302. Eligibility of trusts and limited liability companies for 
          farm ownership loans, farm operating loans, and emergency 
          loans.
Sec. 5303. Debt settlement.
Sec. 5304. Temporary authority to enter into contracts; private 
          collection agencies.
Sec. 5305. Interest rate options for loans in servicing.
Sec. 5306. Elimination of requirement that Secretary require county 
          committees to certify in writing that certain loan reviews 
          have been conducted.
Sec. 5307. Simplified loan guarantee application available for loans of 
          greater amounts.
Sec. 5308. Inventory property.
Sec. 5309. Administration of certified lenders and preferred certified 
          lenders programs.
Sec. 5310. Definitions.
Sec. 5311. Loan authorization levels.
Sec. 5312. Reservation of funds for direct operating loans for beginning 
          farmers and ranchers.
Sec. 5313. Interest rate reduction program.
Sec. 5314. Reamortization of recapture payments.
Sec. 5315. Allocation of certain funds for socially disadvantaged 
          farmers and ranchers.
Sec. 5316. Waiver of borrower training certification requirement.
Sec. 5317. Timing of loan assessments.
Sec. 5318. Annual review of borrowers.
Sec. 5319. Loan eligibility for borrowers with prior debt forgiveness.
Sec. 5320. Making and servicing of loans by personnel of State, county, 
          or area committees.
Sec. 5321. Eligibility of employees of State, county, or area committee 
          for loans and loan guarantees.

                         Subtitle E--Farm Credit

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

                     Subtitle F--General Provisions

Sec. 5501. Technical amendments.

                       TITLE VI--RURAL DEVELOPMENT

         Subtitle A--Consolidated Farm and Rural Development Act

Sec. 6001. Eligibility of rural empowerment zones and rural enterprise 
          communities for direct and guaranteed loans for essential 
          community facilities. 
Sec. 6002. Water or waste disposal grants. 
Sec. 6003. Rural business opportunity grants. 
Sec. 6004. Child day care facilities. 
Sec. 6005. Rural water and wastewater circuit rider program. 
Sec. 6006. Multijurisdictional regional planning organizations. 
Sec. 6007. Loan guarantees for certain rural development loans. 
Sec. 6008. Tribal college and university essential community facilities. 

Sec. 6009. Emergency and imminent community water assistance grant 
          program. 
Sec. 6010. Water and waste facility grants for Native American tribes. 
Sec. 6011. Grants for water systems for rural and native villages in 
          Alaska. 
Sec. 6012. Grants to nonprofit organizations to finance the 
          construction, refurbishing, and servicing of individually-
          owned household water well systems in rural areas for 
          individuals with low or moderate incomes. 
Sec. 6013. Loans and loan guarantees for renewable energy systems. 
Sec. 6014. Rural business enterprise grants. 
Sec. 6015. Rural cooperative development grants. 
Sec. 6016. Grants to broadcasting systems. 
Sec. 6017. Business and industry loan modifications. 
Sec. 6018. Use of rural development loans and grants for other purposes. 

Sec. 6019. Simplified application forms for loan guarantees. 
Sec. 6020. Definition of rural and rural area. 
Sec. 6021. National Rural Development Partnership. 
Sec. 6022. Rural telework. 
Sec. 6023. Historic barn preservation. 
Sec. 6024. Grants for NOAA weather radio transmitters. 
Sec. 6025. Grants to train farm workers in new technologies and to train 
          farm workers in specialized skills necessary for higher value 
          crops. 
Sec. 6026. Rural community advancement program. 
Sec. 6027. Delta Regional Authority. 
Sec. 6028. Northern Great Plains Regional Authority. 
Sec. 6029. Rural business investment program. 
Sec. 6030. Rural strategic investment program. 
Sec. 6031. Funding of pending rural development loan and grant 
          applications. 

              Subtitle B--Rural Electrification Act of 1936

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

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

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

             Subtitle D--SEARCH Grants for Small Communities

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

                        Subtitle E--Miscellaneous

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

                 TITLE VII--RESEARCH AND RELATED MATTERS

                         Subtitle A--Extensions

Sec. 7101. National rural information center clearinghouse.
Sec. 7102. Grants and fellowships for food and agricultural sciences 
          education.
Sec. 7103. Policy research centers.
Sec. 7104. Human nutrition intervention and health promotion research 
          program.
Sec. 7105. Pilot research program to combine medical and agricultural 
          research.
Sec. 7106. Nutrition education program.
Sec. 7107. Continuing animal health and disease research programs.
Sec. 7108. Appropriations for research on national or regional problems.
Sec. 7109. Grants to upgrade agricultural and food sciences facilities 
          at 1890 land-grant colleges, including Tuskegee University.
Sec. 7110. National research and training virtual centers.
Sec. 7111. Hispanic-serving institutions.
Sec. 7112. Competitive grants for international agricultural science and 
          education programs.
Sec. 7113. University research.
Sec. 7114. Extension service.
Sec. 7115. Supplemental and alternative crops.
Sec. 7116. Aquaculture research facilities.
Sec. 7117. Rangeland research.
Sec. 7118. National genetics resources program.
Sec. 7119. High-priority research and extension initiatives.
Sec. 7120. Nutrient management research and extension initiative.
Sec. 7121. Agricultural telecommunications program.
Sec. 7122. Assistive technology program for farmers with disabilities.
Sec. 7123. Partnerships for high-value agricultural product quality 
          research.
Sec. 7124. Biobased products.
Sec. 7125. Integrated research, education, and extension competitive 
          grants program.
Sec. 7126. Equity in Educational Land-Grant Status Act of 1994.
Sec. 7127. 1994 Institution research grants.
Sec. 7128. Endowment for 1994 Institutions.
Sec. 7129. Precision agriculture.
Sec. 7130. Thomas Jefferson Initiative for crop diversification.
Sec. 7131. Support for research regarding diseases of wheat, triticale, 
          and barley caused by fusarium graminearum or by tilletia 
          indica.
Sec. 7132. Office of Pest Management Policy.
Sec. 7133. National Agricultural Research, Extension, Education, and 
          Economics Advisory Board.
Sec. 7134. Grants for research on production and marketing of alcohols 
          and industrial hydrocarbons from agricultural commodities and 
          forest products.
Sec. 7135. Agricultural experiment stations research facilities.
Sec. 7136. Competitive, special, and facilities research grants national 
          research initiative.
Sec. 7137. Federal agricultural research facilities authorization of 
          appropriations.
Sec. 7138. Critical agricultural materials research.
Sec. 7139. Aquaculture.

                        Subtitle B--Modifications

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

        Subtitle C--Repeal of Certain Activities and Authorities

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

                       Subtitle D--New Authorities

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

                        Subtitle E--Miscellaneous

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

                          TITLE VIII--FORESTRY

         Subtitle A--Cooperative Forestry Assistance Act of 1978

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

                  Subtitle B--Amendments to Other Laws

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

                  Subtitle C--Miscellaneous Provisions

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

                            TITLE IX--ENERGY

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

                         TITLE X--MISCELLANEOUS

                       Subtitle A--Crop Insurance

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

                     Subtitle B--Disaster Assistance

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

                   Subtitle C--Tree Assistance Program

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

                       Subtitle D--Animal Welfare

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

                  Subtitle E--Animal Health Protection

Sec. 10401. Short title.
Sec. 10402. Findings.
Sec. 10403. Definitions.
Sec. 10404. Restriction on importation or entry.
Sec. 10405. Exportation.
Sec. 10406. Interstate movement.
Sec. 10407. Seizure, quarantine, and disposal.
Sec. 10408. Inspections, seizures, and warrants.
Sec. 10409. Detection, control, and eradication of diseases and pests.
Sec. 10410. Veterinary accreditation program.
Sec. 10411. Cooperation.
Sec. 10412. Reimbursable agreements.
Sec. 10413. Administration and claims.
Sec. 10414. Penalties.
Sec. 10415. Enforcement.
Sec. 10416. Regulations and orders.
Sec. 10417. Authorization of appropriations.
Sec. 10418. Repeals and conforming amendments.

                          Subtitle F--Livestock

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

                       Subtitle G--Specialty Crops

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

                       Subtitle H--Administration

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

                     Subtitle I--General Provisions

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

              Subtitle J--Miscellaneous Studies and Reports

Sec. 10901. Report on specialty crop purchases.
Sec. 10902. Report on pouched and canned salmon.
Sec. 10903. Study on updating yields.
Sec. 10904. Report on effect of farm program payments.
Sec. 10905. Chiloquin Dam fish passage feasibility study.
Sec. 10906. Report on geographically disadvantaged farmers and ranchers.
Sec. 10907. Studies on agricultural research and technology.
Sec. 10908. Report on tobacco settlement agreement.
Sec. 10909. Report on sale and use of pesticides for agricultural uses.
Sec. 10910. Review of operation of agricultural and natural resource 
          programs on tribal trust land.

                      TITLE I--COMMODITY PROGRAMS

SEC. 1001. DEFINITIONS.

    In this title (other than subtitle C):
            (1) Agricultural act of 1949.--The term 
        ``Agricultural Act of 1949'' means the Agricultural Act 
        of 1949 (7 U.S.C. 1421 et seq.), as in effect prior to 
        the suspensions under section 171 of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7301).
            (2) Base acres.--The term ``base acres'', with 
        respect to a covered commodity on a farm, means the 
        number of acres established under section 1101 with 
        respect to the covered commodity on the election made 
        by the owner of the farm under subsection (a) of such 
        section.
            (3) Counter-cyclical payment.--The term ``counter-
        cyclical payment'' means a payment made to producers on 
        a farm under section 1104.
            (4) Covered commodity.--The term ``covered 
        commodity'' means wheat, corn, grain sorghum, barley, 
        oats, upland cotton, rice, soybeans, and other 
        oilseeds.
            (5) Direct payment.--The term ``direct payment'' 
        means a payment made to producers on a farm under 
        section 1103.
            (6) Effective price.--The term ``effective price'', 
        with respect to a covered commodity for a crop year, 
        means the price calculated by the Secretary under 
        section 1104 to determine whether counter-cyclical 
        payments are required to be made for that crop year.
            (7) Extra long staple cotton.--The term ``extra 
        long staple cotton'' means cotton that--
                    (A) is produced from pure strain varieties 
                of the Barbadense species or any hybrid 
                thereof, or other similar types of extra long 
                staple cotton, designated by the Secretary, 
                having characteristics needed for various end 
                uses for which United States upland cotton is 
                not suitable and grown in irrigated cotton-
                growing regions of the United States designated 
                by the Secretary or other areas designated by 
                the Secretary as suitable for the production of 
                the varieties or types; and
                    (B) is ginned on a roller-type gin or, if 
                authorized by the Secretary, ginned on another 
                type gin for experimental purposes.
            (8) Loan commodity.--The term ``loan commodity'' 
        means wheat, corn, grain sorghum, barley, oats, upland 
        cotton, extra long staple cotton, rice, soybeans, other 
        oilseeds, wool, mohair, honey, dry peas, lentils, and 
        small chickpeas.
            (9) Other oilseed.--The term ``other oilseed'' 
        means a crop of sunflower seed, rapeseed, canola, 
        safflower, flaxseed, mustard seed, or, if designated by 
        the Secretary, another oilseed.
            (10) Payment acres.--The term ``payment acres'' 
        means 85 percent of the base acres of a covered 
        commodity on a farm, as established under section 1101, 
        on which direct payments and counter-cyclical payments 
        are made.
            (11) Payment yield.--
                    (A) In general.--The term ``payment yield'' 
                means the yield established under section 1102 
                for a farm for a covered commodity.
                    (B) Updated payment yield.--The term 
                ``updated payment yield'' means the payment 
                yield elected by the owner of a farm under 
                section 1102(e) to be used in calculating the 
                counter-cyclical payments for the farm.
            (12) Producer.--The term ``producer'' means an 
        owner, operator, landlord, tenant, or sharecropper that 
        shares in the risk of producing a crop and is entitled 
        to share in the crop available for marketing from the 
        farm, or would have shared had the crop been produced. 
        In determining whether a grower of hybrid seed is a 
        producer, the Secretary shall not take into 
        consideration the existence of a hybrid seed contract 
        and shall ensure that program requirements do not 
        adversely affect the ability of the grower to receive a 
        payment under this title.
            (13) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
            (14) State.--The term ``State'' means each of the 
        several States of the United States, the District of 
        Columbia, the Commonwealth of Puerto Rico, and any 
        other territory or possession of the United States.
            (15) Target price.--The term ``target price'' means 
        the price per bushel (or other appropriate unit in the 
        case of upland cotton, rice, and other oilseeds) of a 
        covered commodity used to determine the payment rate 
        for counter-cyclical payments.
            (16) United states.--The term ``United States'', 
        when used in a geographical sense, means all of the 
        States.

       Subtitle A--Direct Payments and Counter-Cyclical Payments

SEC. 1101. ESTABLISHMENT OF BASE ACRES AND PAYMENT ACRES FOR A FARM.

    (a) Election by Owner of Base Acres Calculation Method.--
            (1) Alternative calculation methods.--For the 
        purpose of making direct payments and counter-cyclical 
        payments with respect to a farm, the Secretary shall 
        give an owner of the farm an opportunity to elect 1 of 
        the following as the method by which the base acres of 
        all covered commodities on the farm are to be 
        determined:
                    (A) Subject to paragraphs (3) and (4), the 
                4-year average of the following:
                            (i) Acreage planted on the farm to 
                        covered commodities for harvest, 
                        grazing, haying, silage, or other 
                        similar purposes for the 1998 through 
                        2001 crop years.
                            (ii) Any acreage on the farm that 
                        the producers were prevented from 
                        planting during the 1998 through 2001 
                        crop years to covered commodities 
                        because of drought, flood, or other 
                        natural disaster, or other condition 
                        beyond the control of the producers, as 
                        determined by the Secretary.
                    (B) Subject to paragraph (3), the sum of 
                the following:
                            (i) The contract acreage (as 
                        defined in section 102 of the Federal 
                        Agriculture Improvement and Reform Act 
                        of 1996 (7 U.S.C. 7202)) used by the 
                        Secretary to calculate the fiscal year 
                        2002 payment authorized under section 
                        114 of such Act (7 U.S.C. 7214) for the 
                        covered commodities on the farm.
                            (ii) The 4-year average of eligible 
                        oilseed acreage on the farm for the 
                        1998 through 2001 crop years, as 
                        determined by the Secretary under 
                        paragraph (2).
            (2) Eligible oilseed acreage.--
                    (A) Calculation.--For purposes of paragraph 
                (1)(B)(ii), the eligible acreage for each 
                oilseed on a farm during each of the 1998 
                through 2001 crop years shall be determined in 
                the manner provided in paragraph (1)(A), except 
                that the total acreage for all oilseeds on the 
                farm for a crop year may not exceed the 
                difference between--
                            (i) the total acreage determined 
                        under paragraph (1)(A) for all covered 
                        commodities for that crop year; and
                            (ii) the total contract acreage 
                        determined under paragraph (1)(B)(i).
                    (B) Effect of negative number.--If the 
                subtraction performed under subparagraph (A) 
                results in a negative number, the eligible 
                oilseed acreage on the farm for that crop year 
                shall be zero for purposes of determining the 
                4-year average.
                    (C) Offset of contract acreage.--The owner 
                of a farm may increase the eligible acreage for 
                an oilseed on the farm by reducing the contract 
                acreage determined under paragraph (1)(B)(i) 
                for 1 or more covered commodities on an acre-
                for-acre basis, except that the total base 
                acreage for each oilseed on the farm may not 
                exceed the 4-year average of each oilseed 
                determined under paragraph (1)(B)(ii).
            (3) Inclusion of all 4 years in average.--For the 
        purpose of determining a 4-year acreage average under 
        this subsection for a farm, the Secretary shall not 
        exclude any crop year in which a covered commodity was 
        not planted.
            (4) Treatment of multiple planting or prevented 
        planting.--For the purpose of determining under 
        paragraph (1)(A) the acreage on a farm that producers 
        planted or were prevented from planting during the 1998 
        through 2001 crop years to covered commodities, if the 
        acreage that was planted or prevented from being 
        planted was devoted to another covered commodity in the 
        same crop year (other than a covered commodity produced 
        under an established practice of double cropping), the 
        owner may elect the commodity to be used for that crop 
        year in determining the 4-year average, but may not 
        include both the initial commodity and the subsequent 
        commodity.
    (b) Single Election; Time for Election.--
            (1) Notice of election opportunity.--As soon as 
        practicable after the date of enactment of this Act, 
        the Secretary shall provide notice to owners of farms 
        regarding their opportunityto make the election 
described in subsection (a). The notice shall include the following:
                    (A) Notice that the opportunity of an owner 
                to make the election is being provided only 
                once.
                    (B) Information regarding the manner in 
                which the election must be made and the time 
                periods and manner in which notice of the 
                election must be submitted to the Secretary.
            (2) Election deadline.--Within the time period and 
        in the manner prescribed pursuant to paragraph (1), the 
        owner of a farm shall submit to the Secretary notice of 
        the election made by the owner under subsection (a).
    (c) Effect of Failure To Make Election.--If the owner of a 
farm fails to make the election under subsection (a) or fails 
to timely notify the Secretary of the election made, as 
required by subsection (b), the owner shall be deemed to have 
made the election described in subsection (a)(1)(B) to 
determine base acres for all covered commodities on the farm.
    (d) Application of Election to All Covered Commodities.--
The election made under subparagraph (A) or (B) of subsection 
(a)(1), or deemed to be made under subsection (c), with respect 
to a farm shall apply to all of the covered commodities on the 
farm.
    (e) Treatment of Conservation Reserve Contract Acreage.--
            (1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the base acres for 
        covered commodities for a farm whenever either of the 
        following circumstances occurs:
                    (A) A conservation reserve contract entered 
                into under section 1231 of the Food Security 
                Act of 1985 (16 U.S.C. 3831) with respect to 
                the farm expires or is voluntarily terminated.
                    (B) Cropland is released from coverage 
                under a conservation reserve contract by the 
                Secretary.
            (2) Special payment rules.--For the crop year in 
        which a base acres adjustment under paragraph (1) is 
        first made, the owner of the farm shall elect to 
        receive either direct payments and counter-cyclical 
        payments with respect to the acreage added to the farm 
        under this subsection or a prorated payment under the 
        conservation reserve contract, but not both.
    (f) Payment Acres.--The payment acres for a covered 
commodity on a farm shall be equal to 85 percent of the base 
acres for the covered commodity.
    (g) Prevention of Excess Base Acres.--
            (1) Required reduction.--If the sum of the base 
        acres for a farm, together with the acreage described 
        in paragraph (2), exceeds the actual cropland acreage 
        of the farm, the Secretary shall reduce the base acres 
        for 1 or more covered commodities for the farm or the 
        base acres for peanuts for the farm under subtitle C so 
        that the sum of the base acres and acreage described in 
        paragraph (2) does not exceed the actual cropland 
        acreage of the farm.
            (2) Other acreage.--For purposes of paragraph (1), 
        the Secretary shall include the following:
                    (A) Any base acres for peanuts for the farm 
                under subtitle C.
                    (B) Any acreage on the farm enrolled in the 
                conservation reserve program or wetlands 
                reserve program under chapter 1 of subtitle D 
                of title XII of the Food Security Act of 1985 
                (16 U.S.C. 3830 et seq.).
                    (C) Any other acreage on the farm enrolled 
                in a conservation program for which payments 
                are made in exchange for not producing an 
                agricultural commodity on the acreage.
            (3) Selection of acres.--The Secretary shall give 
        the owner of the farm the opportunity to select the 
        base acres or the base acres for peanuts for the farm 
        under subtitle C against which the reduction required 
        by paragraph (1) will be made.
            (4) Exception for double-cropped acreage.--In 
        applying paragraph (1), the Secretary shall make an 
        exception in the case of double cropping, as determined 
        by the Secretary.
            (5) Coordinated application of requirements.--The 
        Secretary shall take into account section 1302(f) when 
        applying the requirements of this subsection.
    (h) Permanent Reduction in Base Acres.--The owner of a farm 
may reduce, at any time, the base acres for any covered 
commodity for the farm. The reduction shall be permanent and 
made in the manner prescribed by the Secretary.

SEC. 1102. ESTABLISHMENT OF PAYMENT YIELD.

    (a) Establishment and Purpose.--For the purpose of making 
direct payments and counter-cyclical payments under this 
subtitle, the Secretary shall provide for the establishment of 
a payment yield for each farm for each covered commodity in 
accordance with this section.
    (b) Use of Farm Program Payment Yield.--Except as otherwise 
provided in this section, the payment yield for each of the 
2002 through 2007 crops of a covered commodity for a farm shall 
be the farm program payment yield established for the 1995 crop 
of the covered commodity under section 505 of the Agricultural 
Act of 1949 (7 U.S.C. 1465), as adjusted by the Secretary to 
account for any additional yield payments made with respect to 
that crop under section 505(b)(2) of that Act.
    (c) Farms Without Farm Program Payment Yield.--In the case 
of a farm for which a farm program payment yield is unavailable 
for a covered commodity (other than soybeans or other 
oilseeds), the Secretary shall establish an appropriate payment 
yield for the covered commodity on the farm taking into 
consideration the farm program payment yields applicable to the 
commodity under subsection (b) for similar farms, but before 
the yields for the similar farms are updated as provided in 
subsection (e).
    (d) Payment Yields for Oilseeds.--
            (1) Determination of average yield.--In the case of 
        soybeans and each other oilseed, the Secretary shall 
        determine the average yield per planted acre for the 
        oilseed on a farm for the 1998 through 2001 crop years, 
        excluding any crop year in which the acreage planted to 
        the oilseed was zero.
            (2) Adjustment for payment yield.--The payment 
        yield for a farm for an oilseed shall be equal to the 
        product of the following:
                    (A) The average yield for the oilseed 
                determined under paragraph (1).
                    (B) The ratio resulting from dividing the 
                national average yield for the oilseed for the 
                1981 through 1985 crops by the national average 
                yield for the oilseed for the 1998 through 2001 
                crops.
            (3) Use of partial county average yield.--If the 
        yield per planted acre for a crop of an oilseed for a 
        farm for any of the 1998 through 2001 crop years was 
        less than 75 percent of the county yield for that 
        oilseed, the Secretary shall assign a yield for that 
        crop year equal to 75 percent of the county yield for 
        the purpose of determining the average under paragraph 
        (1).
    (e) Opportunity To Partially Update Yields Used To 
Determine Counter-Cyclical Payments.--
            (1) Election to update.--If the owner of a farm 
        elects to use the base acres calculation method 
        described in section 1101(a)(1)(A), the owner shall 
        also have a 1-time opportunity to elect to use 1 of the 
        methods described in paragraph (3) to partially update 
        the payment yields that would otherwise be used in 
        calculating any counter-cyclical payments for covered 
        commodities on the farm.
            (2) Time for election.--The election under 
        paragraph (1) shall be made at the same time and in the 
        same manner as the Secretary prescribes for the 
        election required under section 1101.
            (3) Methods of updating yields.--If the owner of a 
        farm elects to update yields under this subsection, the 
        payment yield for a covered commodity on the farm, for 
        the purpose of calculating counter-cyclical payments 
        only, shall be equal to the yield determined using 
        either of the following:
                    (A) The sum of the following:
                            (i) The payment yield applicable 
                        for direct payments for the covered 
                        commodity on the farm.
                            (ii) 70 percent of the difference 
                        between--
                                    (I) the average yield per 
                                planted acre for the crop of 
                                the covered commodity on the 
                                farm for the 1998 through 2001 
                                crop years, as determined by 
                                the Secretary, excluding any 
                                crop year in which the acreage 
                                planted to the crop of the 
                                covered commodity was zero; and
                                    (II) the payment yield 
                                applicable for direct payments 
                                for the covered commodity on 
                                the farm.
                    (B) 93.5 percent of the average of the 
                yield per planted acre for the crop of the 
                covered commodity on the farm for the 1998 
                through 2001 crop years, as determined by the 
                Secretary, excluding any crop year in which the 
                acreage planted to the crop of the covered 
                commodity was zero.
            (4) Use of partial county average yield.--If the 
        yield per planted acre for a crop of the covered 
        commodity for a farm for any of the 1998 through 2001 
        crop years was less than 75 percent of the county yield 
        for that commodity, the Secretary shall assign a yield 
        for that crop year equal to 75 percent of the county 
        yield for the purpose of determining the average yield 
        under paragraph (3).
            (5) Application of election and method to all 
        covered commodities.--The owner of a farm may not elect 
        the method described in paragraph (3)(A) for 1 covered 
        commodity on the farm and the method described in 
        paragraph (3)(B) for other covered commodities on the 
        farm.

SEC. 1103. AVAILABILITY OF DIRECT PAYMENTS.

    (a) Payment Required.--For each of the 2002 through 2007 
crop years of each covered commodity, the Secretary shall make 
direct payments to producers on farms for which payment yields 
and base acres are established.
    (b) Payment Rate.--The payment rates used to make direct 
payments with respect to covered commodities for a crop year 
are as follows:
            (1) Wheat, $0.52 per bushel.
            (2) Corn, $0.28 per bushel.
            (3) Grain sorghum, $0.35 per bushel.
            (4) Barley, $0.24 per bushel.
            (5) Oats, $0.024 per bushel.
            (6) Upland cotton, $0.0667 per pound.
            (7) Rice, $2.35 per hundredweight.
            (8) Soybeans, $0.44 per bushel.
            (9) Other oilseeds, $0.0080 per pound.
    (c) Payment Amount.--The amount of the direct payment to be 
paid to the producers on a farm for a covered commodity for a 
crop year shall be equal to the product of the following:
            (1) The payment rate specified in subsection (b).
            (2) The payment acres of the covered commodity on 
        the farm.
            (3) The payment yield for the covered commodity for 
        the farm.
    (d) Time for Payment.--
            (1) In general.--The Secretary shall make direct 
        payments--
                    (A) in the case of the 2002 crop year, as 
                soon as practicable after the date of enactment 
                of this Act; and
                    (B) in the case of each of the 2003 through 
                2007 crop years, not before October 1 of the 
                calendar year in which the crop of the covered 
                commodity is harvested.
            (2) Advance payments.--At the option of the 
        producers on a farm, up to 50 percent of the direct 
        payment for a covered commodity for any of the 2003 
        through 2007 crop years shall be paid to the producers 
        in advance. The producers shall select the month within 
        which the advance payment for a crop year will be made. 
        The month selected may be any month during the period 
        beginning on December 1 of the calendar year before the 
        calendar year in which the crop of the covered 
        commodity is harvested through the month within which 
        the direct payment would otherwise be made. The 
        producers may change the selected month for a 
        subsequent advance payment by providing advance notice 
        to the Secretary.
            (3) Repayment of advance payments.--If a producer 
        on a farm that receives an advance direct payment for a 
        crop year ceases to be a producer on that farm, or the 
        extent to which the producer shares in the risk of 
        producing a crop changes, before the date the remainder 
        of the direct payment is made, the producer shall be 
        responsible for repaying the Secretary the applicable 
        amount of the advance payment, as determined by the 
        Secretary.

SEC. 1104. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS.

    (a) Payment Required.--For each of the 2002 through 2007 
crop years for each covered commodity, the Secretary shall make 
counter-cyclical payments to producers on farms for which 
payment yields and base acres are established with respect to 
the covered commodity if the Secretary determines that the 
effective price for the covered commodity is less than the 
target price for the covered commodity.
    (b) Effective Price.--For purposes of subsection (a), the 
effective price for a covered commodity is equal to the sum of 
the following:
            (1) The higher of the following:
                    (A) The national average market price 
                received by producers during the 12-month 
                marketing year for the covered commodity, as 
                determined by the Secretary.
                    (B) The national average loan rate for a 
                marketing assistance loan for the covered 
                commodity in effect for the applicable period 
                under subtitle B.
            (2) The payment rate in effect for the covered 
        commodity under section 1103 for the purpose of making 
        direct payments with respect to the covered commodity.
    (c) Target Price.--
            (1) 2002 and 2003 crop years.--For purposes of the 
        2002 and 2003 crop years, the target prices for covered 
        commodities shall be as follows:
                    (A) Wheat, $3.86 per bushel.
                    (B) Corn, $2.60 per bushel.
                    (C) Grain sorghum, $2.54 per bushel.
                    (D) Barley, $2.21 per bushel.
                    (E) Oats, $1.40 per bushel.
                    (F) Upland cotton, $0.7240 per pound.
                    (G) Rice, $10.50 per hundredweight.
                    (H) Soybeans, $5.80 per bushel.
                    (I) Other oilseeds, $0.0980 per pound.
            (2) Subsequent crop years.--For purposes of each of 
        the 2004 through 2007 crop years, the target prices for 
        covered commodities shall be as follows:
                    (A) Wheat, $3.92 per bushel.
                    (B) Corn, $2.63 per bushel.
                    (C) Grain sorghum, $2.57 per bushel.
                    (D) Barley, $2.24 per bushel.
                    (E) Oats, $1.44 per bushel.
                    (F) Upland cotton, $0.7240 per pound.
                    (G) Rice, $10.50 per hundredweight.
                    (H) Soybeans, $5.80 per bushel.
                    (I) Other oilseeds, $0.1010 per pound.
    (d) Payment Rate.--The payment rate used to make counter-
cyclical payments with respect to a covered commodity for a 
crop year shall be equal to the difference between--
            (1) the target price for the covered commodity; and
            (2) the effective price determined under subsection 
        (b) for the covered commodity.
    (e) Payment Amount.--If counter-cyclical payments are 
required to be paid for any of the 2002 through 2007 crop years 
of a covered commodity, the amount of the counter-cyclical 
payment to be paid to the producers on a farm for that crop 
year shall be equal to the product of the following:
            (1) The payment rate specified in subsection (d).
            (2) The payment acres of the covered commodity on 
        the farm.
            (3) The payment yield or updated payment yield for 
        the farm, depending on the election of the owner of the 
        farm under section 1102.
    (f) Time for Payments.--
            (1) General rule.--If the Secretary determines 
        under subsection (a) that counter-cyclical payments are 
        required to be made under this section for the crop of 
        a covered commodity, the Secretary shall make the 
        counter-cyclical payments for the crop as soon as 
        practicable after the end of the 12-month marketing 
        year for the covered commodity.
            (2) Availability of partial payments.--If, before 
        the end of the 12-month marketing year for a covered 
        commodity, the Secretary estimates that counter-
        cyclical payments will be required for the crop of the 
        covered commodity, the Secretary shall give producers 
        on a farm the option to receive partial payments of the 
        counter-cyclical payment projected to be made for that 
        crop of the covered commodity.
            (3) Time for partial payments.--
                    (A) 2002 through 2006 crop years.--When the 
                Secretary makes partial payments available 
                under paragraph (2) for a covered commodity for 
                any of the 2002 through 2006 crop years--
                            (i) the first partial payment for 
                        the crop year shall be made not earlier 
                        than October 1, and, to the maximum 
                        extent practicable, not later than 
                        October 31, of the calendar year in 
                        which the crop of the covered commodity 
                        is harvested;
                            (ii) the second partial payment 
                        shall be made not earlier than February 
                        1 of the next calendar year; and
                            (iii) the final partial payment 
                        shall be made as soon as practicable 
                        after the end of the 12-month marketing 
                        year for the covered commodity.
                    (B) 2007 crop year.--When the Secretary 
                makes partial payments available for a covered 
                commodity for the 2007 crop year--
                            (i) the first partial payment shall 
                        be made after completion of the first 6 
                        months of the marketing year for the 
                        covered commodity; and
                            (ii) the final partial payment 
                        shall be made as soon as practicable 
                        after the end of the 12-month marketing 
                        year for the covered commodity.
            (4) Amount of partial payments.--
                    (A) 2002 through 2006 crop years.--
                            (i) First partial payment.--For 
                        each of the 2002 through 2006 crop 
                        years of a covered commodity, the first 
                        partial payment under paragraph (3) to 
                        the producers on a farm may not exceed 
                        35 percent of the projected counter-
                        cyclical payment for the covered 
                        commodity for the crop year, as 
                        determined by the Secretary.
                            (ii) Second partial payment.--The 
                        second partial payment for a covered 
                        commodity for a crop year may not 
                        exceed the difference between--
                                    (I) 70 percent of the 
                                projected counter-cyclical 
                                payment (including any revision 
                                thereof) for the crop of the 
                                covered commodity; and
                                    (II) the amount of the 
                                payment made under clause (i).
                            (iii) Final payment.--The final 
                        payment for a covered commodity for a 
                        crop year shall be equal to the 
                        difference between--
                                    (I) the actual counter-
                                cyclical payment to be made to 
                                the producers for the covered 
                                commodity for that crop year; 
                                and
                                    (II) the amount of the 
                                partial payments made to the 
                                producers under clauses (i) and 
                                (ii) for that crop year.
                    (B) 2007 crop year.--
                            (i) First partial payment.--For the 
                        2007 crop year, the first partial 
                        payment under paragraph (3) to the 
                        producers on a farm may not exceed 40 
                        percent of the projected counter-
                        cyclical payment for the covered 
                        commodity for the crop year, as 
                        determined by the Secretary.
                            (ii) Final payment.--The final 
                        payment for the 2007 crop year shall be 
                        equal to the difference between--
                                    (I) the actual counter-
                                cyclical payment to be made to 
                                the producers for the covered 
                                commodity for that crop year; 
                                and
                                    (II) the amount of the 
                                partial payment made to the 
                                producers under clause (i).
            (5) Repayment.--The producers on a farm that 
        receive a partial payment under this subsection for a 
        crop year shall repay to the Secretary the amount, if 
        any, by which the total of the partial payments exceed 
        the actual counter-cyclical payment to be made for the 
        covered commodity for that crop year.

SEC. 1105. PRODUCER AGREEMENT REQUIRED AS CONDITION OF PROVISION OF 
                    DIRECT PAYMENTS AND COUNTER-CYCLICAL PAYMENTS.

    (a) Compliance With Certain Requirements.--
            (1) Requirements.--Before the producers on a farm 
        may receive direct payments or counter-cyclical 
        payments with respect to the farm, the producers shall 
        agree, during the crop year for which the payments are 
        made and in exchange for the payments--
                    (A) to comply with applicable conservation 
                requirements under subtitle B of title XII of 
                the Food Security Act of 1985 (16 U.S.C. 3811 
                et seq.);
                    (B) to comply with applicable wetland 
                protection requirements under subtitle C of 
                title XII of the Act (16 U.S.C. 3821 et seq.);
                    (C) to comply with the planting flexibility 
                requirements of section 1106;
                    (D) to use the land on the farm, in a 
                quantity equal to the attributable base acres 
                for the farm and any base acres for peanuts for 
                the farm under subtitle C for an agricultural 
                or conserving use, and not for a 
                nonagricultural commercial or industrial use, 
                as determined by the Secretary; and
                    (E) to effectively control noxious weeds 
                and otherwise maintain the land in accordance 
                with sound agricultural practices, as 
                determined by the Secretary, if the 
                agricultural or conserving use involves the 
                noncultivation of any portion of the land 
                referred to in subparagraph (D).
            (2) Compliance.--The Secretary may issue such rules 
        as the Secretary considers necessary to ensure producer 
        compliance with the requirements of paragraph (1).
            (3) Modification.--At the request of the transferee 
        or owner, the Secretary may modify the requirements of 
        this subsection if the modifications are consistent 
        with the objectives of this subsection, as determined 
        by the Secretary.
    (b) Transfer or Change of Interest in Farm.--
            (1) Termination.--Except as provided in paragraph 
        (2), a transfer of (or change in) the interest of the 
        producers on a farm in base acres for which direct 
        payments or counter-cyclical payments are made shall 
        result in the termination of the payments with respect 
        to the base acres, unless the transferee or owner of 
        the acreage agrees to assume all obligations under 
        subsection (a). The termination shall take effect on 
        the date determined by the Secretary.
            (2) Exception.--If a producer entitled to a direct 
        payment or counter-cyclical payment dies, becomes 
        incompetent, or is otherwise unable to receive the 
        payment, the Secretary shall make the payment, in 
        accordance with rules issued by the Secretary.
    (c) Acreage Reports.--As a condition on the receipt of any 
benefits under this subtitle or subtitle B, the Secretary shall 
require producers on a farm to submit to the Secretary annual 
acreage reports with respect to all cropland on the farm.
    (d) Tenants and Sharecroppers.--In carrying out this 
subtitle, the Secretary shall provide adequate safeguards to 
protect the interests of tenants and sharecroppers.
    (e) Sharing of Payments.--The Secretary shall provide for 
the sharing of direct payments and counter-cyclical payments 
among the producers on a farm on a fair and equitable basis.

SEC. 1106. PLANTING FLEXIBILITY.

    (a) Permitted Crops.--Subject to subsection (b), any 
commodity or crop may be planted on base acres on a farm.
    (b) Limitations Regarding Certain Commodities.--
            (1) General limitation.--The planting of an 
        agricultural commodity specified in paragraph (3) shall 
        be prohibited on base acres unless the commodity, if 
        planted, is destroyed before harvest.
            (2) Treatment of trees and other perennials.--The 
        planting of an agricultural commodity specified in 
        paragraph (3) that is produced on a tree or other 
        perennial plant shall be prohibited on base acres.
            (3) Covered agricultural commodities.--Paragraphs 
        (1) and (2) apply to the following agricultural 
        commodities:
                    (A) Fruits.
                    (B) Vegetables (other than lentils, mung 
                beans, and dry peas).
                    (C) Wild rice.
    (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) 
shall not limit the planting of an agricultural commodity 
specified in paragraph (3) of that subsection--
            (1) in any region in which there is a history of 
        double-cropping of covered commodities with 
        agricultural commodities specified in subsection 
        (b)(3), as determined by the Secretary, in which case 
        the double-cropping shall be permitted;
            (2) on a farm that the Secretary determines has a 
        history of planting agricultural commodities specified 
        in subsection (b)(3) on base acres, except that direct 
        payments and counter-cyclical payments shall be reduced 
        by an acre for each acre planted to such an 
        agricultural commodity; or
            (3) by the producers on a farm that the Secretary 
        determines has an established planting history of a 
        specific agricultural commodity specified in subsection 
        (b)(3), except that--
                    (A) the quantity planted may not exceed the 
                average annual planting history of such 
                agricultural commodity by the producers on the 
                farm in the 1991 through 1995 or 1998 through 
                2001 crop years (excluding any crop year in 
                which no plantings were made), as determined by 
                the Secretary; and
                    (B) direct payments and counter-cyclical 
                payments shall be reduced by an acre for each 
                acre planted to such agricultural commodity.
    (d) Special Rule for 2002 Crop Year.--For the 2002 crop 
year only, if the calculation of base acres under section 
1101(a) results in total base acres for a farm in excess of the 
contract acreage (as defined in section 102 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7202)) 
for the farm used to calculate the fiscal year 2002 payment 
authorized under section 114 of such Act (7 U.S.C. 7214), 
paragraphs (1) and (2) of subsection (b) shall not limit the 
harvesting of an agricultural commodity specified in paragraph 
(3) of that subsection on the excess base acres, except that 
direct payments and counter-cyclical payments for the 2002 crop 
year shall be reduced by an acre for each acre of the excess 
base acres planted to such an agricultural commodity.

SEC. 1107. RELATION TO REMAINING PAYMENT AUTHORITY UNDER PRODUCTION 
                    FLEXIBILITY CONTRACTS.

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

SEC. 1108. PERIOD OF EFFECTIVENESS.

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

  Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE LOANS FOR 
                    LOAN COMMODITIES.

    (a) Nonrecourse Loans Available.--
            (1) Availability.--For each of the 2002 through 
        2007 crops of each loan commodity, the Secretary shall 
        make available to producers on a farm nonrecourse 
        marketing assistance loans for loan commodities 
        produced on the farm.
            (2) Terms and conditions.--The marketing assistance 
        loans shall be made under terms and conditions that are 
        prescribed by the Secretary and at the loan rate 
        established under section 1202 for the loan commodity.
    (b) Eligible Production.--The producers on a farm shall be 
eligible for a marketing assistance loan under subsection (a) 
for any quantity of a loan commodity produced on the farm.
    (c) Treatment of Certain Commingled Commodities.--In 
carrying out this subtitle, the Secretary shall make loans to 
producers on a farm that would be eligible to obtain a 
marketing assistance loan, but for the fact the loan commodity 
owned by the producers on the farm commingled with loan 
commodities of other producers in facilities unlicensed for the 
storage of agricultural commodities by the Secretary or a State 
licensing authority, if the producers obtaining the loan agree 
to immediately redeem the loan collateral in accordance with 
section 166 of the Federal Agriculture Improvement and Reform 
Act of 1996 (7 U.S.C. 7286).
    (d) Compliance With Conservation and Wetlands 
Requirements.--As a condition of the receipt of a marketing 
assistance loan under subsection (a), the producer shall comply 
with applicable conservation requirements under subtitle B of 
title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et 
seq.) and applicable wetland protection requirements under 
subtitle C of title XII of the Act (16 U.S.C. 3821 et seq.) 
during the term of the loan.
    (e) Termination of Superseded Loan Authority.--
Notwithstanding section 131 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7231), nonrecourse 
marketing assistance loans shall not be made for the 2002 crop 
of loan commodities under subtitle C of title I of such Act.

SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE LOANS.

    (a) 2002 and 2003 Crop Years.--For purposes of the 2002 and 
2003 crop years, the loan rate for a marketing assistance loan 
under section 1201 for a loan commodity shall be equal to the 
following:
            (1) In the case of wheat, $2.80 per bushel.
            (2) In the case of corn, $1.98 per bushel.
            (3) In the case of grain sorghum, $1.98 per bushel.
            (4) In the case of barley, $1.88 per bushel.
            (5) In the case of oats, $1.35 per bushel.
            (6) In the case of upland cotton, $0.52 per pound.
            (7) In the case of extra long staple cotton, 
        $0.7977 per pound.
            (8) In the case of rice, $6.50 per hundredweight.
            (9) In the case of soybeans, $5.00 per bushel.
            (10) In the case of other oilseeds, $0.0960 per 
        pound.
            (11) In the case of graded wool, $1.00 per pound.
            (12) In the case of nongraded wool, $0.40 per 
        pound.
            (13) In the case of mohair, $4.20 per pound.
            (14) In the case of honey, $0.60 per pound.
            (15) In the case of dry peas, $6.33 per 
        hundredweight.
            (16) In the case of lentils, $11.94 per 
        hundredweight.
            (17) In the case of small chickpeas, $7.56 per 
        hundredweight.
    (b) 2004 Through 2007 Crop Years.--For purposes of the 2004 
through 2007 crop years, the loan rate for a marketing 
assistance loan under section 1201 for a loan commodity shall 
be equal to the following:
            (1) In the case of wheat, $2.75 per bushel.
            (2) In the case of corn, $1.95 per bushel.
            (3) In the case of grain sorghum, $1.95 per bushel.
            (4) In the case of barley, $1.85 per bushel.
            (5) In the case of oats, $1.33 per bushel.
            (6) In the case of upland cotton, $0.52 per pound.
            (7) In the case of extra long staple cotton, 
        $0.7977 per pound.
            (8) In the case of rice, $6.50 per hundredweight.
            (9) In the case of soybeans, $5.00 per bushel.
            (10) In the case of other oilseeds, $0.0930 per 
        pound.
            (11) In the case of graded wool, $1.00 per pound.
            (12) In the case of nongraded wool, $0.40 per 
        pound.
            (13) In the case of mohair, $4.20 per pound.
            (14) In the case of honey, $0.60 per pound.
            (15) In the case of dry peas, $6.22 per 
        hundredweight.
            (16) In the case of lentils, $11.72 per 
        hundredweight.
            (17) In the case of small chickpeas, $7.43 per 
        hundredweight.

SEC. 1203. TERM OF LOANS.

    (a) Term of Loan.--In the case of each loan commodity, a 
marketing assistance loan under section 1201 shall have a term 
of 9 months beginning on the first day of the first month after 
the month in which the loan is made.
    (b) Extensions Prohibited.--The Secretary may not extend 
the term of a marketing assistance loan for any loan commodity.

SEC. 1204. REPAYMENT OF LOANS.

    (a) General Rule.--The Secretary shall permit the producers 
on a farm to repay a marketing assistance loan under section 
1201 for a loan commodity (other than upland cotton, rice, and 
extra long staple cotton) at a rate that is the lesser of--
            (1) the loan rate established for the commodity 
        under section 1202, plus interest (determined in 
        accordance with section 163 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or
            (2) a rate that the Secretary determines will--
                    (A) minimize potential loan forfeitures;
                    (B) minimize the accumulation of stocks of 
                the commodity by the Federal Government;
                    (C) minimize the cost incurred by the 
                Federal Government in storing the commodity;
                    (D) allow the commodity produced in the 
                United States to be marketed freely and 
                competitively, both domestically and 
                internationally; and
                    (E) minimize discrepancies in marketing 
                loan benefits across State boundaries and 
                across county boundaries.
    (b) Repayment Rates for Upland Cotton and Rice.--The 
Secretary shall permit producers to repay a marketing 
assistance loan under section 1201 for upland cotton and rice 
at a rate that is the lesser of--
            (1) the loan rate established for the commodity 
        under section 1202, plus interest (determined in 
        accordance with section 163 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7283)); or
            (2) the prevailing world market price for the 
        commodity (adjusted to United States quality and 
        location), as determined by the Secretary.
    (c) Repayment Rates for Extra Long Staple Cotton.--
Repayment of a marketing assistance loan for extra long staple 
cotton shall be at the loan rate established for the commodity 
under section 1202, plus interest (determined in accordance 
with section 163 of the Federal Agriculture Improvement and 
Reform Act of 1996 (7 U.S.C. 7283)).
    (d) Prevailing World Market Price.--For purposes of this 
section and section 1207, the Secretary shall prescribe by 
regulation--
            (1) a formula to determine the prevailing world 
        market price for upland cotton and rice, adjusted to 
        United States quality and location; and
            (2) a mechanism by which the Secretary shall 
        announce periodically the prevailing world market price 
        for upland cotton and rice.
    (e) Adjustment of Prevailing World Market Price for Upland 
Cotton.--
            (1) In general.--During the period beginning on the 
        date of the enactment of this Act through July 31, 
        2008, the prevailing world market price for upland 
        cotton (adjusted to United States quality and location) 
        established under subsection (d) shall be further 
        adjusted if--
                    (A) the adjusted prevailing world market 
                price is less than 115 percent of the loan rate 
                for upland cotton established under section 
                1202, as determined by the Secretary; and
                    (B) the Friday through Thursday average 
                price quotation for the lowest-priced United 
                States growth as quoted for Middling (M) 1\3/
                32\-inch cotton delivered C.I.F. Northern 
                Europe is greater than the Friday through 
                Thursday average price of the 5 lowest-priced 
                growths of upland cotton, as quoted for 
                Middling (M) 1\3/32\-inch cotton, delivered 
                C.I.F. Northern Europe (referred to in this 
                section as the ``Northern Europe price'').
            (2) Further adjustment.--Except as provided in 
        paragraph (3), the adjusted prevailing world market 
        price for upland cotton shall be further adjusted on 
        the basis of some or all of the following data, as 
        available:
                    (A) The United States share of world 
                exports.
                    (B) The current level of cotton export 
                sales and cotton export shipments.
                    (C) Other data determined by the Secretary 
                to be relevant in establishing an accurate 
                prevailing world market price for upland cotton 
                (adjusted to United States quality and 
                location).
            (3) Limitation on further adjustment.--The 
        adjustment under paragraph (2) may not exceed the 
        difference between--
                    (A) the Friday through Thursday average 
                price for the lowest-priced United States 
                growth as quoted for Middling 1\3/32\-inch 
                cotton delivered C.I.F. Northern Europe; and
                    (B) the Northern Europe price.
    (f) Good Faith Exception to Beneficial Interest 
Requirement.--For the 2001 crop year only, in the case of the 
producers on a farm that marketed or otherwise lost beneficial 
interest in a loan commodity for which a marketing assistance 
loan was made under section 131 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7231) before 
repaying the loan, the Secretary shall permit the producers to 
repay the loan at the appropriate repayment rate that was in 
effect for the loan commodity under section 134 of that Act (7 
U.S.C. 7234) on the date that the producers lost beneficial 
interest, as determined by the Secretary, if the Secretary 
determines the producers acted in good faith.

SEC. 1205. LOAN DEFICIENCY PAYMENTS.

    (a) Availability of Loan Deficiency Payments.--
            (1) In general.--Except as provided in subsection 
        (d), the Secretary may make loan deficiency payments 
        available to producers on a farm that, although 
        eligible to obtain a marketing assistance loan under 
        section 1201 with respect to a loan commodity, agree to 
        forgo obtaining the loan for the commodity in return 
        for loan deficiency payments under this section.
            (2) Unshorn pelts, hay, and silage.--Nongraded wool 
        in the form of unshorn pelts and hay and silage derived 
        from a loan commodity are not eligible for a marketing 
        assistance loan under section 1201. However, effective 
        for the 2002 through 2007 crop years, the Secretary may 
        make loan deficiency payments available under this 
        section to producers on a farm that produce unshorn 
        pelts or hay and silage derived from a loan commodity.
    (b) Computation.--A loan deficiency payment for a loan 
commodity or commodity referred to in subsection (a)(2) shall 
be computed by multiplying--
            (1) the payment rate determined under subsection 
        (c) for the commodity; by
            (2) the quantity of the commodity produced by the 
        eligible producers, excluding any quantity for which 
        the producers obtain a marketing assistance loan under 
        section 1201.
    (c) Payment Rate.--
            (1) In general.--In the case of a loan commodity, 
        the payment rate shall be the amount by which--
                    (A) the loan rate established under section 
                1202 for the loan commodity; exceeds
                    (B) the rate at which a marketing 
                assistance loan for the loan commodity may be 
                repaid under section 1204.
            (2) Unshorn pelts.--In the case of unshorn pelts, 
        the payment rate shall be the amount by which--
                    (A) the loan rate established under section 
                1202 for ungraded wool; exceeds
                    (B) the rate at which a marketing 
                assistance loan for ungraded wool may be repaid 
                under section 1204.
            (3) Hay and silage.--In the case of hay or silage 
        derived from a loan commodity, the payment rate shall 
        be the amount by which--
                    (A) the loan rate established under section 
                1202 for the loan commodity from which the hay 
                or silage is derived; exceeds
                    (B) the rate at which a marketing 
                assistance loan for the loan commodity may be 
                repaid under section 1204.
    (d) Exception for Extra Long Staple Cotton.--This section 
shall not apply with respect to extra long staple cotton.
    (e) Effective Date for Payment Rate Determination.--The 
Secretary shall determine the amount of the loan deficiency 
payment to be made under this section to the producers on a 
farm with respect to a quantity of a loan commodity or 
commodity referred to in subsection (a)(2) using the payment 
rate in effect under subsection (c) as of the date the 
producers request the payment.
    (f) Special Loan Deficiency Payment Rules.--
            (1) First-time loan commodities.--For the 2002 crop 
        of wool, mohair, honey, dry peas, lentils and small 
        chickpeas, inthe case of producers of such a crop that 
would be eligible for a loan deficiency payment under this section 
except for the fact that the producers lost beneficial interest in the 
crop prior to the date of publication of the regulations implementing 
this section, the producers shall be eligible for a loan deficiency 
payment as of the date producers marketed or otherwise lost beneficial 
interest in the crop, as determined by the Secretary.
            (2) 2001 crop year.--Section 135 of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7235) is amended--
                    (A) in subsection (a)(2), by striking 
                ``2000 crop year'' and inserting ``2000 and 
                2001 crop years''; and
                    (B) by adding at the end the following:
    ``(g) Effective Date for Payment Rate Determination.--For 
the 2001 crop year, the Secretary shall determine the amount of 
the loan deficiency payment to be made under this section to 
the producers on a farm with respect to a quantity of a loan 
commodity using the payment rate in effect under subsection (c) 
as of the earlier of the following:
            ``(1) The date on which the producers marketed or 
        otherwise lost beneficial interest in the crop of the 
        loan commodity, as determined by the Secretary.
            ``(2) The date the producers requested the 
        payment.''.

SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR GRAZED 
                    ACREAGE.

    (a) Eligible Producers.--
            (1) In general.--Effective for the 2002 through 
        2007 crop years, in the case of a producer that would 
        be eligible for a loan deficiency payment under section 
        1205 for wheat, barley, or oats, but that elects to use 
        acreage planted to the wheat, barley, or oats for the 
        grazing of livestock, the Secretary shall make a 
        payment to the producer under this section if the 
        producer enters into an agreement with the Secretary to 
        forgo any other harvesting of the wheat, barley, or 
        oats on that acreage.
            (2) Grazing of triticale acreage.--Effective for 
        the 2002 through 2007 crop years, with respect to a 
        producer on a farm that uses acreage planted to 
        triticale for the grazing of livestock, the Secretary 
        shall make a payment to the producer under this section 
        if the producer enters into an agreement with the 
        Secretary to forgo any other harvesting of triticale on 
        that acreage.
    (b) Payment Amount.--
            (1) In general.--The amount of a payment made under 
        this section to a producer on a farm described in 
        subsection (a)(1) shall be equal to the amount 
        determined by multiplying--
                    (A) the loan deficiency payment rate 
                determined under section 1205(c) in effect, as 
                of the date of the agreement, for the county in 
                which the farm is located; by
                    (B) the payment quantity determined by 
                multiplying--
                            (i) the quantity of the grazed 
                        acreage on the farm with respect to 
                        which the producer elects to forgo 
                        harvesting of wheat, barley, or oats; 
                        and
                            (ii) the payment yield in effect 
                        for the calculation of direct payments 
                        under subtitle A with respect to that 
                        loan commodity on the farm or, in the 
                        case of a farm without a payment yield 
                        for that loan commodity, an appropriate 
                        yield established by the Secretary in a 
                        manner consistent with section 1102(c).
            (2) Grazing of triticale acreage.--The amount of a 
        payment made under this section to a producer on a farm 
        described in subsection (a)(2) shall be equal to the 
        amount determined by multiplying--
                    (A) the loan deficiency payment rate 
                determined under section 1205(c) in effect for 
                wheat, as of the date of the agreement, for the 
                county in which the farm is located; by
                    (B) the payment quantity determined by 
                multiplying--
                            (i) the quantity of the grazed 
                        acreage on the farm with respect to 
                        which the producer elects to forgo 
                        harvesting of triticale; and
                            (ii) the payment yield in effect 
                        for the calculation of direct payments 
                        under subtitle A with respect to wheat 
                        on the farm or, in the case of a farm 
                        without a payment yield for wheat, an 
                        appropriate yield established by the 
                        Secretary in a manner consistent with 
                        section 1102(c).
    (c) Time, Manner, and Availability of Payment.--
            (1) Time and manner.--A payment under this section 
        shall be made at the same time and in the same manner 
        as loan deficiency payments are made under section 
        1205.
            (2) Availability.--The Secretary shall establish an 
        availability period for the payments authorized by this 
        section. In the case of wheat, barley, and oats, the 
        availability period shall be consistent with the 
        availability period for the commodity established by 
        the Secretary for marketing assistance loans authorized 
        by this subtitle.
    (d) Prohibition on Crop Insurance Indemnity or Noninsured 
Crop Assistance.--A 2002 through 2007 crop of wheat, barley, 
oats, or triticale planted on acreage that a producer elects, 
in the agreement required by subsection (a), to use for the 
grazing of livestock in lieu of any other harvesting of the 
crop shall not be eligible for an indemnity under the Federal 
Crop Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop 
assistance under section 196 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7333).

SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON.

    (a) Cotton User Marketing Certificates.--
            (1) Issuance.--During the period beginning on the 
        date of the enactment of this Act through July 31, 
        2008, the Secretary shall issue marketing certificates 
        or cash payments, at the option of the recipient, to 
        domestic users and exporters for documented purchases 
        by domestic users and sales for export by exporters 
        made in the week following a consecutive 4-week period 
        in which--
                    (A) the Friday through Thursday average 
                price quotation for the lowest-priced United 
                States growth, as quoted for Middling (M) 1\3/
                32\-inch cotton, delivered C.I.F. Northern 
                Europe exceeds the Northern Europe price by 
                more than 1.25 cents per pound; and
                    (B) the prevailing world market price for 
                upland cotton (adjusted to United States 
                quality and location) does not exceed 134 
                percent of the loan rate for upland cotton 
                established under section 1202.
            (2) Value of certificates or payments.--The value 
        of the marketing certificates or cash payments shall be 
        based on the amount of the difference (reduced by 1.25 
        cents per pound) in the prices during the fourth week 
        of the consecutive 4-week period multiplied by the 
        quantity of upland cotton included in the documented 
        sales.
            (3) Administration of marketing certificates.--
                    (A) Redemption, marketing, or exchange.--
                The Secretary shall establish procedures for 
                redeeming marketing certificates for cash or 
                marketing or exchange of the certificates for 
                agricultural commodities owned by the Commodity 
                Credit Corporation or pledged to the Commodity 
                Credit Corporation as collateral for a loan in 
                such manner, and at such price levels, as the 
                Secretary determines will best effectuate the 
                purposes of cotton user marketing certificates, 
                including enhancing the competitiveness and 
                marketability of United States cotton. Any 
                price restrictions that would otherwise apply 
                to the disposition of agricultural commodities 
                by the Commodity Credit Corporation shall not 
                apply to the redemption of certificates under 
                this subsection.
                    (B) Designation of commodities and 
                products.--To the extent practicable, the 
                Secretary shall permit owners of certificates 
                to designate the commodities and products, 
                including storage sites, the owners would 
                prefer to receive in exchange for certificates
                    (C) Transfers.--Marketing certificates 
                issued to domestic users and exporters of 
                upland cotton may be transferred to other 
                persons in accordance with regulations issued 
                by the Secretary.
            (4) Delayed application of threshold.--Through July 
        31, 2006, the Secretary shall make the calculations 
        under paragraphs (1)(A) and (2) without regard to the 
        1.25 cent threshold provided under those paragraphs.
    (b) Special Import Quota.--
            (1) Establishment.--
                    (A) In general.--The President shall carry 
                out an import quota program during the period 
                beginning on the date of the enactment of this 
                Act through July 31, 2008, as provided in this 
                subsection.
                    (B) Program requirements.--Except as 
                provided in subparagraph (C), whenever the 
                Secretary determines and announces that for any 
                consecutive 4-week period, the Friday through 
                Thursday average price quotation for the 
                lowest-priced United States growth, as quoted 
                for Middling (M) 1\3/32\-inch cotton, delivered 
                C.I.F. Northern Europe, adjusted for the value 
                of any certificate issued under subsection (a), 
                exceeds the Northern Europe price by more than 
                1.25 cents per pound, there shall immediately 
                be in effect a special import quota.
                    (C) Tight domestic supply.--During any 
                month for which the Secretary estimates the 
                season-ending United States upland cotton 
                stocks-to-use ratio, as determined under 
                subparagraph (D), to be below 16 percent, the 
                Secretary, in making the determination under 
                subparagraph (B), shall not adjust the Friday 
                through Thursday average price quotation for 
                the lowest-priced United States growth, as 
                quoted for Middling (M) 1\3/32\-inch cotton, 
                delivered C.I.F. Northern Europe, for the value 
                of any certificates issued under subsection 
                (a).
                    (D) Season-ending united states stocks-to-
                use ratio.--For the purposes of making 
                estimates under subparagraph (C), the Secretary 
                shall, on a monthly basis, estimate and report 
                the season-ending United States upland cotton 
                stocks-to-use ratio, excluding projected raw 
                cotton imports but including the quantity of 
                raw cotton that has been imported into the 
                United States during the marketing year.
                    (E) Delayed application of threshold.--
                Through July 31, 2006, the Secretary shall make 
                the calculation under subparagraph (B) without 
                regard to the 1.25 cent threshold provided 
                under that subparagraph.
            (2) Quantity.--The quota shall be equal to one 
        week's consumption of upland cotton by domestic mills 
        at the seasonally adjusted average rate of the most 
        recent three months for which data are available.
            (3) Application.--The quota shall apply to upland 
        cotton purchased not later than 90 days after the date 
        of the Secretary's announcement under paragraph (1) and 
        entered into the United States not later than 180 days 
        after the date.
            (4) Overlap.--A special quota period may be 
        established that overlaps any existing quota period if 
        required by paragraph (1), except that a special quota 
        period may not be established under this subsection if 
        a quota period has been established under subsection 
        (c).
            (5) Preferential tariff treatment.--The quantity 
        under a special import quota shall be considered to be 
        an in-quota quantity for purposes of--
                    (A) section 213(d) of the Caribbean Basin 
                Economic Recovery Act (19 U.S.C. 2703(d));
                    (B) section 204 of the Andean Trade 
                Preference Act (19 U.S.C. 3203);
                    (C) section 503(d) of the Trade Act of 1974 
                (19 U.S.C. 2463(d)); and
                    (D) General Note 3(a)(iv) to the Harmonized 
                Tariff Schedule.
            (6) Definition.--In this subsection, the term 
        ``special import quota'' means a quantity of imports 
        that is not subject to the over-quota tariff rate of a 
        tariff-rate quota.
            (7) Limitation.--The quantity of cotton entered 
        into the United States during any marketing year under 
        the special import quota established under this 
        subsection may not exceed the equivalent of 5 week's 
        consumption of upland cotton by domestic mills at the 
        seasonally adjusted average rate of the 3 months 
        immediately preceding the first special import quota 
        established in any marketing year.
    (c) Limited Global Import Quota for Upland Cotton.--
            (1) In general.--The President shall carry out an 
        import quota program that provides that whenever the 
        Secretary determines and announces that the average 
        price of the base quality of upland cotton, as 
        determined by the Secretary, in the designated spot 
        markets for a month exceeded 130 percent of the average 
        price of such quality of cotton in the markets for the 
        preceding 36 months, notwithstanding any other 
        provision of law, there shall immediately be in effect 
        a limited global import quota subject to the following 
        conditions:
                    (A) Quantity.--The quantity of the quota 
                shall be equal to 21 days of domestic mill 
                consumption of upland cotton at the seasonally 
                adjusted average rate of the most recent 3 
                months for which data are available.
                    (B) Quantity if prior quota.--If a quota 
                has been established under this subsection 
                during the preceding 12 months, the quantity of 
                the quota next established under this 
                subsection shall be the smaller of 21 days of 
                domestic mill consumption calculated under 
                subparagraph (A) or the quantity required to 
                increase the supply to 130 percent of the 
                demand.
                    (C) Preferential tariff treatment.--The 
                quantity under a limited global import quota 
                shall be considered to be an in-quota quantity 
                for purposes of--
                            (i) section 213(d) of the Caribbean 
                        Basin Economic Recovery Act (19 U.S.C. 
                        2703(d));
                            (ii) section 204 of the Andean 
                        Trade Preference Act (19 U.S.C. 3203);
                            (iii) section 503(d) of the Trade 
                        Act of 1974 (19 U.S.C. 2463(d)); and
                            (iv) General Note 3(a)(iv) to the 
                        Harmonized Tariff Schedule.
                    (D) Definitions.--In this subsection:
                            (i) Supply.--The term ``supply'' 
                        means, using the latest official data 
                        of the Bureau of the Census, the 
                        Department of Agriculture, and the 
                        Department of the Treasury--
                                    (I) the carry-over of 
                                upland cotton at the beginning 
                                of the marketing year (adjusted 
                                to 480-pound bales) in which 
                                the quota is established;
                                    (II) production of the 
                                current crop; and
                                    (III) imports to the latest 
                                date available during the 
                                marketing year.
                            (ii) Demand.--The term ``demand'' 
                        means--
                                    (I) the average seasonally 
                                adjusted annual rate of 
                                domestic mill consumption 
                                during the most recent 3 months 
                                for which data are available; 
                                and
                                    (II) the larger of--
                                            (aa) average 
                                        exports of upland 
                                        cotton during the 
                                        preceding 6 marketing 
                                        years; or
                                            (bb) cumulative 
                                        exports of upland 
                                        cotton plus outstanding 
                                        export sales for the 
                                        marketing year in which 
                                        the quota is 
                                        established.
                            (iii) Limited global import 
                        quota.--The term ``limited global 
                        import quota'' means a quantity of 
                        imports that is not subject to the 
                        over-quota tariff rate of a tariff-rate 
                        quota.
                    (E) Quota entry period.--When a quota is 
                established under this subsection, cotton may 
                be entered under the quota during the 90-day 
                period beginning on the date the quota is 
                established by the Secretary.
            (2) No overlap.--Notwithstanding paragraph (1), a 
        quota period may not be established that overlaps an 
        existing quota period or a special quota period 
        established under subsection (b).

SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG STAPLE COTTON.

    (a) Competitiveness Program.--Notwithstanding any other 
provision of law, during the period beginning on the date of 
the enactment of this Act through July 31, 2008, the Secretary 
shall carry out a program--
            (1) to maintain and expand the domestic use of 
        extra long staple cotton produced in the United States;
            (2) to increase exports of extra long staple cotton 
        produced in the United States; and
            (3) to ensure that extra long staple cotton 
        produced in the United States remains competitive in 
        world markets.
    (b) Payments Under Program; Trigger.--Under the program, 
the Secretary shall make payments available under this section 
whenever--
            (1) for a consecutive 4-week period, the world 
        market price for the lowest priced competing growth of 
        extra long staple cotton (adjusted to United States 
        quality and location and for other factors affecting 
        the competitiveness of such cotton), as determined by 
        the Secretary, is below the prevailing United States 
        price for a competing growth of extra long staple 
        cotton; and
            (2) the lowest priced competing growth of extra 
        long staple cotton (adjusted to United States quality 
        and location and for other factors affecting the 
        competitiveness of such cotton), as determined by the 
        Secretary, is less than 134 percent of the loan rate 
        for extra long staple cotton.
    (c) Eligible Recipients.--The Secretary shall make payments 
available under this section to domestic users of extra long 
staple cotton produced in the United States and exporters of 
extra long staple cotton produced in the United States that 
enter into an agreement with the Commodity Credit Corporation 
to participate in the program under this section.
    (d) Payment Amount.--Payments under this section shall be 
based on the amount of the difference in the prices referred to 
in subsection (b)(1) during the fourth week of the consecutive 
4-week period multiplied by the amount of documented purchases 
by domestic users and sales for export by exporters made in the 
week following such a consecutive 4-week period.
    (e) Form of Payment.--Payments under this section shall be 
made through the issuance of cash or marketing certificates, at 
the option of eligible recipients of the payments.

SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE FEED GRAINS 
                    AND SEED COTTON.

    (a) High Moisture Feed Grains.--
            (1) Recourse loans available.--For each of the 2002 
        through 2007 crops of corn and grain sorghum, the 
        Secretary shall make available recourse loans, as 
        determined by the Secretary, to producers on a farm 
        that--
                    (A) normally harvest all or a portion of 
                their crop of corn or grain sorghum in a high 
                moisture state;
                    (B) present--
                            (i) certified scale tickets from an 
                        inspected, certified commercial scale, 
                        including a licensed warehouse, 
                        feedlot, feed mill, distillery, or 
                        other similar entity approved by the 
                        Secretary, pursuant to regulations 
                        issued by the Secretary; or
                            (ii) field or other physical 
                        measurements of the standing or stored 
                        crop in regions of the United States, 
                        as determined by the Secretary, that do 
                        not have certified commercial scales 
                        from which certified scale tickets may 
                        be obtained within reasonable proximity 
                        of harvest operation;
                    (C) certify that they were the owners of 
                the feed grain at the time of delivery to, and 
                that the quantity to be placed under loan under 
                this subsection was in fact harvested on the 
                farm and delivered to, a feedlot, feed mill, or 
                commercial or on-farm high-moisture storage 
                facility, or to a facility maintained by the 
                users of corn and grain sorghum in a high 
                moisture state; and
                    (D) comply with deadlines established by 
                the Secretary for harvesting the corn or grain 
                sorghum and submit applications for loans under 
                this subsection within deadlines established by 
                the Secretary.
            (2) Eligibility of acquired feed grains.--A loan 
        under this subsection shall be made on a quantity of 
        corn or grain sorghum of the same crop acquired by the 
        producer equivalent to a quantity determined by 
        multiplying--
                    (A) the acreage of the corn or grain 
                sorghum in a high moisture state harvested on 
                the producer's farm; by
                    (B) the lower of the farm program payment 
                yield used to make counter-cyclical payments 
                under subtitle A or the actual yield on a 
                field, as determined by the Secretary, that is 
                similar to the field from which the corn or 
                grain sorghum was obtained.
            (3) High moisture state defined.--In this 
        subsection, the term ``high moisture state'' means corn 
        or grain sorghum having a moisture content in excess of 
        Commodity Credit Corporation standards for marketing 
        assistance loans made by the Secretary under section 
        1201.
    (b) Recourse Loans Available for Seed Cotton.--For each of 
the 2002 through 2007 crops of upland cotton and extra long 
staple cotton, the Secretary shall make available recourse seed 
cotton loans, as determined by the Secretary, on any 
production.
    (c) Repayment Rates.--Repayment of a recourse loan made 
under this section shall be at the loan rate established for 
the commodity by the Secretary, plus interest (determined in 
accordance with section 163 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7283)).
    (d) Termination of Superseded Loan Authority.--
Notwithstanding section 137 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7237), recourse 
loans shall not be made for the 2002 crop of corn, grain 
sorghum, and seed cotton under such section.

                          Subtitle C--Peanuts

SEC. 1301. DEFINITIONS.

    In this subtitle:
            (1) Base acres for peanuts.--The term ``base acres 
        for peanuts'' means the number of acres assigned to a 
        farm by historic peanut producers pursuant to section 
        1302(b).
            (2) Counter-cyclical payment.--The term ``counter-
        cyclical payment'' means a payment made under section 
        1304.
            (3) Effective price.--The term ``effective price'' 
        means the price calculated by the Secretary under 
        section 1304 for peanuts to determine whether counter-
        cyclical payments are required to be made under that 
        section for a crop year.
            (4) Direct payment.--The term ``direct payment'' 
        means a payment made under section 1303.
            (5) Historic peanut producer.--The term ``historic 
        peanut producer'' means a producer on a farm in the 
        United States that produced or was prevented from 
        planting peanuts during any or all of the 1998 through 
        2001 crop years.
            (6) Payment acres.--The term ``payment acres'' 
        means--
                    (A) for the 2002 crop of peanuts, 85 
                percent of the average acreage determined under 
                section 1302(a)(2) for an historic peanut 
                producer; and
                    (B) for the 2003 through 2007 crops of 
                peanuts, 85 percent of the base acres for 
                peanuts assigned to a farm under section 
                1302(b).
            (7) Payment yield.--The term ``payment yield'' 
        means the yield assigned to a farm by historic peanut 
        producers pursuant to section 1302(b).
            (8) Producer.--The term ``producer'' means an 
        owner, operator, landlord, tenant, or sharecropper that 
        shares in the risk of producing a crop on a farm and is 
        entitled to share in the crop available for marketing 
        from the farm, or would have shared had the crop been 
        produced. In determining whether a grower of hybrid 
        seed is a producer, the Secretary shall not take into 
        consideration the existence of a hybrid seed contract 
        and shall ensure that program requirements do not 
        adversely affect the ability of the grower to receive a 
        payment under this subtitle.
            (9) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
            (10) State.--The term ``State'' means each of the 
        several States of the United States, the District of 
        Columbia, the Commonwealth of Puerto Rico, and any 
        other territory or possession of the United States.
            (11) Target price.--The term ``target price'' means 
        the price per ton of peanuts used to determine the 
        payment rate for counter-cyclical payments.
            (12) United states.--The term ``United States'', 
        when used in a geographical sense, means all of the 
        States.

SEC. 1302. ESTABLISHMENT OF PAYMENT YIELD AND BASE ACRES FOR PEANUTS 
                    FOR A FARM.

    (a) Average Yield and Acreage Average for Historic Peanut 
Producers.--
            (1) Determination of average yield.--
                    (A) In general.--The Secretary shall 
                determine, for each historic peanut producer, 
                the average yield for peanuts on each farm on 
                which the historic peanut producer planted 
                peanuts for harvest for the 1998 through 2001 
                crop years, excluding any crop year in which 
                the producer did not plant or was prevented 
                from planting peanuts.
                    (B) Assigned yields.--For the purposes of 
                determining the 4-year average yield for an 
                historic peanut producer under this paragraph, 
                the historic peanut producer may elect to 
                substitute for a farm, for not more than 3 of 
                the 1998 through 2001 crop years in which the 
                producer planted peanuts on the farm, the 
                average yield for peanuts produced in the 
                county in which the farm is located for the 
                1990 through 1997 crop years.
            (2) Determination of acreage average.--
                    (A) In general.--The Secretary shall 
                determine, for each historic peanut producer, 
                the 4-year average of the following:
                            (i) Acreage planted to peanuts on 
                        each farm on which the historic peanut 
                        producer planted peanuts for harvest 
                        for the 1998 through 2001 crop years.
                            (ii) Any acreage on each farm that 
                        the historic peanut producer was 
                        prevented from planting to peanuts 
                        during the 1998 through 2001 crop years 
                        because of drought, flood, or other 
                        natural disaster, or other condition 
                        beyond the control of the historic 
                        peanut producer, as determined by the 
                        Secretary.
                    (B) Inclusion of all 4 years in average.--
                For the purposes of determining the 4-year 
                acreage average for an historic peanut producer 
                under this paragraph, the Secretary shall not 
                exclude any crop year in which the producer did 
                not plant peanuts.
                    (C) Proportional shares.--If more than 1 
                historic peanut producer shared in the risk of 
                producing the crop on a farm, the historic 
                peanut producers shall receive their 
                proportional share of the number of acres 
                planted (or prevented from being planted) to 
                peanuts for harvest on the farm based on the 
                sharing arrangement that was in effect among 
                the producers for the crop.
            (3) Time for determinations.--The Secretary shall 
        make the determinations required by this subsection as 
        soon as practicable after the date of enactment of this 
        Act.
            (4) Special considerations.--In making the 
        determinations required by this subsection, the 
        Secretary shall take into account changes in the 
        number, identity, or interest of producers sharing in 
        the risk of producing a peanut crop since the 1998 crop 
        year, including providing a method for the assignment 
        of average acres and average yield to a farm--
                    (A) when an historic peanut producer is no 
                longer living;
                    (B) when an entity composed of historic 
                peanut producers has been dissolved; or
                    (C) in other appropriate situations, as 
                determined by the Secretary.
    (b) Assignment of Average Yields and Average Acreage to 
Farms.--
            (1) Assignment by historic peanut producers.--The 
        Secretary shall give each historic peanut producer an 
        opportunity to assign the average peanut yield and 
        average acreage determined under subsection (a) for 
        each farm of the historic peanut producer to cropland 
        on that farm or another farm in the same State or a 
        contiguous State.
            (2) Limitation on acreage assignment.--
        Notwithstanding paragraph (1), the average acreage 
        determined under subsection (a)(2) for a farm may not 
        be assigned to a farm in a contiguous State unless--
                    (A) the historic peanut producer making the 
                assignment produced peanuts in that State 
                during at least 1 of the 1998 through 2001 crop 
                years; or
                    (B) as of March 31, 2003, the historic 
                peanut producer is a producer on a farm in that 
                State.
            (3) Notice of assignment opportunity.--The 
        Secretary shall provide notice to historic peanut 
        producers regarding their opportunity to assign average 
        peanut yields and average acreages to farms under 
        paragraph (1). The notice shall include the following:
                    (A) Notice that the opportunity to make the 
                assignments is being provided only once.
                    (B) A description of the limitation in 
                paragraph (2) on their ability to make the 
                assignments.
                    (C) Information regarding the manner in 
                which the assignments must be made and the time 
                periods and manner in which notice of the 
                assignments must be submitted to the Secretary.
            (4) Assignment deadlines.--Not later than March 31, 
        2003, an historic peanut producer shall submit to the 
        Secretary notice of the assignments made by the 
        producer under this subsection. If an historic peanut 
        producer fails to submit the notice by that date, the 
        notice shall be submitted in such other manner as the 
        Secretary may prescribe.
    (c) Payment Yield.--The average of all of the yields 
assigned by historic peanut producers under subsection (b) to a 
farm shall be considered to be the payment yield for that farm 
for the purpose of making direct payments and counter-cyclical 
payments under this subtitle.
    (d) Base Acres for Peanuts.--Subject to subsection (e), the 
total number of acres assigned by historic peanut producers 
under subsection (b) to a farm shall be considered to be the 
farm's base acres for peanuts for the purpose of making direct 
payments and counter-cyclical payments under this subtitle.
    (e) Treatment of Conservation Reserve Contract Acreage.--
            (1) In general.--The Secretary shall provide for an 
        adjustment, as appropriate, in the base acres for 
        peanuts for a farm whenever either of the following 
        circumstances occur:
                    (A) A conservation reserve contract entered 
                into under section 1231 of the Food Security 
                Act of 1985 (16 U.S.C. 3831) with respect to 
                the farm expires or is voluntarily terminated.
                    (B) Cropland is released from coverage 
                under a conservation reserve contract by the 
                Secretary.
            (2) Special payment rules.--For the crop year in 
        which a base acres for peanuts adjustment under 
        paragraph (1) is first made, the owner of the farm 
        shall elect to receive either direct payments and 
        counter-cyclical payments with respect to the acreage 
        added to the farm under this subsection or a prorated 
        payment under the conservation reserve contract, but 
        not both.
    (f) Prevention of Excess Base Acres for Peanuts.--
            (1) Required reduction.--If the sum of the base 
        acres for peanuts for a farm, together with the acreage 
        described in paragraph (2), exceeds the actual cropland 
        acreage of the farm, the Secretary shall reduce the 
        base acres for peanuts for the farm or the base acres 
        for 1 or more covered commodities under subtitle A for 
        the farm so that the sum of the base acres for peanuts 
        and acreage described in paragraph (2) does not exceed 
        the actual cropland acreage of the farm.
            (2) Other acreage.--For purposes of paragraph (1), 
        the Secretary shall include the following:
                    (A) Any base acres for the farm under 
                subtitle A.
                    (B) Any acreage on the farm enrolled in the 
                conservation reserve program or wetlands 
                reserve program under chapter 1 of subtitle D 
                of title XII of the Food Security Act of 1985 
                (16 U.S.C. 3830 et seq.).
                    (C) Any other acreage on the farm enrolled 
                in a conservation program for which payments 
                are made in exchange for not producing an 
                agricultural commodity on the acreage.
            (3) Selection of acres.--The Secretary shall give 
        the owner of the farm the opportunity to select the 
        base acres for peanuts or the subtitle A base acres 
        against which the reduction required by paragraph (1) 
        will be made.
            (4) Exception for double-cropped acreage.--In 
        applying paragraph (1), the Secretary shall make an 
        exception in the case of double cropping, as determined 
        by the Secretary.
            (5) Coordinated application of requirements.--The 
        Secretary shall take into account section 1101(g) when 
        applying the requirements of this subsection.
    (g) Permanent Reduction in Base Acres for Peanuts.--The 
owner of a farm may reduce, at any time, the base acres for 
peanuts assigned to the farm. The reduction shall be permanent 
and made in the manner prescribed by the Secretary.

SEC. 1303. AVAILABILITY OF DIRECT PAYMENTS FOR PEANUTS.

    (a) Payment Required.--
            (1) 2002 crop year.--For the 2002 crop year, the 
        Secretary shall make direct payments under this section 
        to historic peanut producers.
            (2) Subsequent crop years.--For each of the 2003 
        through 2007 crop years for peanuts, the Secretary 
        shall make direct payments to the producers on a farm 
        to which a payment yield and base acres for peanuts are 
        assigned under section 1302.
    (b) Payment Rate.--The payment rate used to make direct 
payments with respect to peanuts for a crop year shall be equal 
to $36 per ton.
    (c) Payment Amount for 2002 Crop Year.--The amount of the 
direct payment to be paid to an historic peanut producer for 
the 2002 crop of peanuts shall be equal to the product of the 
following:
            (1) The payment rate specified in subsection (b).
            (2) The payment acres of the historic peanut 
        producer.
            (3) The average peanut yield determined under 
        section 1302(a)(1) for the historic peanut producer.
    (d) Payment Amount for Subsequent Crop Years.--The amount 
of the direct payment to be paid to the producers on a farm for 
the 2003 through 2007 crops of peanuts shall be equal to the 
product of the following:
            (1) The payment rate specified in subsection (b).
            (2) The payment acres on the farm.
            (3) The payment yield for the farm.
    (e) Time for Payment.--
            (1) In general.--The Secretary shall make direct 
        payments--
                    (A) in the case of the 2002 crop year, as 
                soon as practicable after the date of enactment 
                of this Act; and
                    (B) in the case of each of the 2003 through 
                2007 crop years, not later than September 30 of 
                the calendar year in which the crop is 
                harvested.
            (2) Advance payments.--At the option of the 
        producers on a farm, up to 50 percent of the direct 
        payment for any of the 2003 through 2007 crop years 
        shall be paid to the producers in advance. The 
        producers shall select the month within which the 
        advance payment for a crop year will be made. The month 
        selected may be any month during the period beginning 
        on December 1 of the calendar year before the calendar 
        year in which the crop is harvested through the month 
        within which the direct payment would otherwise be 
        made. The producers may change the selected month for a 
        subsequent advance payment by providing advance notice 
        to the Secretary.
            (3) Repayment of advance payments.--If a producer 
        on a farm that receives an advance direct payment for a 
        crop year ceases to be a producer on that farm, or the 
        extent to which the producer shares in the risk of 
        producing a crop changes, before the date the remainder 
        of the direct payment is made, the producer shall be 
        responsible for repaying the Secretary the applicable 
        amount of the advance payment, as determined by the 
        Secretary.

SEC. 1304. AVAILABILITY OF COUNTER-CYCLICAL PAYMENTS FOR PEANUTS.

    (a) Payment Required.--
            (1) In general.--During the 2002 through 2007 crop 
        years for peanuts, the Secretary shall make counter-
        cyclical payments under this section with respect to 
        peanuts if the Secretary determines that the effective 
        price for peanuts is less than the target price for 
        peanuts.
            (2) 2002 crop year.--If counter-cyclical payments 
        are required for the 2002 crop year, the Secretary 
        shall make the payments to historic peanut producers.
            (3) Subsequent crop years.--If counter-cyclical 
        payments are required for any of the 2003 through 2007 
        crop years for peanuts, the Secretary shall make the 
        payments to the producers on a farm to which a payment 
        yield and base acres for peanuts are assigned under 
        section 1302.
    (b) Effective Price.--For purposes of subsection (a), the 
effective price for peanuts is equal to the sum of the 
following:
            (1) The higher of the following:
                    (A) The national average market price for 
                peanuts received by producers during the 12-
                month marketing year for peanuts, as determined 
                by the Secretary.
                    (B) The national average loan rate for a 
                marketing assistance loan for peanuts in effect 
                for the applicable period under this subtitle.
            (2) The payment rate in effect under section 1303 
        for the purpose of making direct payments.
    (c) Target Price.--For purposes of subsection (a), the 
target price for peanuts shall be equal to $495 per ton.
    (d) Payment Rate.--The payment rate used to make counter-
cyclical payments for a crop year shall be equal to the 
difference between--
            (1) the target price; and
            (2) the effective price determined under subsection 
        (b).
    (e) Payment Amount for 2002 Crop Year.--If counter-cyclical 
payments are required to be paid for the 2002 crop of peanuts, 
the amount of the counter-cyclical payment to be paid to an 
historic peanut producer for that crop year shall be equal to 
the product of the following:
            (1) The payment rate specified in subsection (d).
            (2) The payment acres of the historic peanut 
        producer.
            (3) The average peanut yield determined under 
        section 1302(a)(1) for the historic peanut producer.
    (f) Payment Amount for Subsequent Crop Years.--If counter-
cyclical payments are required to be paid for any of the 2003 
through 2007 crops of peanuts, the amount of the counter-
cyclical payment to be paid to the producers on a farm for that 
crop year shall be equal to the product of the following:
            (1) The payment rate specified in subsection (d).
            (2) The payment acres on the farm.
            (3) The payment yield for the farm.
    (g) Time for Payments.--
            (1) General rule.--If the Secretary determines 
        under subsection (a) that counter-cyclical payments are 
        required to be made under this section for a crop year, 
        the Secretary shall make the counter-cyclical payments 
        as soon as practicable after the end of the 12-month 
        marketing year for the crop.
            (2) Availability of partial payments.--If, before 
        the end of the 12-month marketing year, the Secretary 
        estimates that counter-cyclical payments will be 
        required under this section for a crop year, the 
        Secretary shall give producers on a farm (or, in the 
        case of the 2002 crop year, historic peanut producers) 
        the option to receive partial payments of the counter-
        cyclical payment projected to be made for that crop.
            (3) Time for partial payments.--
                    (A) 2002 through 2006 crop years.--When the 
                Secretary makes partial payments available 
                under paragraph (2) for any of the 2002 through 
                2006 crop years--
                            (i) the first partial payment for 
                        the crop year shall be made not earlier 
                        than October 1, and, to the maximum 
                        extent practicable, not later than 
                        October 31, of the calendar year in 
                        which the crop is harvested;
                            (ii) the second partial payment 
                        shall be made not earlier than February 
                        1 of the next calendar year; and
                            (iii) the final partial payment 
                        shall be made as soon as practicable 
                        after the end of the 12-month marketing 
                        year for that crop.
                    (B) 2007 crop year.--When the Secretary 
                makes partial payments available for the 2007 
                crop year--
                            (i) the first partial payment shall 
                        be made after completion of the first 6 
                        months of the marketing year for that 
                        crop; and
                            (ii) the final partial payment 
                        shall be made as soon as practicable 
                        after the end of the 12-month marketing 
                        year for that crop.
            (4) Amount of partial payments.--
                    (A) 2002 crop year.--
                            (i) First partial payment.--In the 
                        case of the 2002 crop year, the first 
                        partial payment under paragraph (3) to 
                        an historic peanut producer may not 
                        exceed 35 percent of the projected 
                        counter-cyclical payment for the crop 
                        year, as determined by the Secretary.
                            (ii) Second partial payment.--The 
                        second partial payment may not exceed 
                        the difference between--
                                    (I) 70 percent of the 
                                projected counter-cyclical 
                                payment (including any revision 
                                thereof) for the 2002 crop 
                                year; and
                                    (II) the amount of the 
                                payment made under clause (i).
                            (iii) Final payment.--The final 
                        payment shall be equal to the 
                        difference between--
                                    (I) the actual counter-
                                cyclical payment to be made to 
                                the historic peanut producer; 
                                and
                                    (II) the amount of the 
                                partial payments made to the 
                                historic peanut producer under 
                                clauses (i) and (ii).
                    (B) 2003 through 2006 crop years.--
                            (i) First partial payment.--For 
                        each of the 2003 through 2006 crop 
                        years, the first partial payment under 
                        paragraph (3) to the producers on a 
                        farm may not exceed 35 percent of the 
                        projected counter-cyclical payment for 
                        the crop year, as determined by the 
                        Secretary.
                            (ii) Second partial payment.--The 
                        second partial payment for a crop year 
                        may not exceed the difference between--
                                    (I) 70 percent of the 
                                projected counter-cyclical 
                                payment (including any revision 
                                thereof) for the crop year; and
                                    (II) the amount of the 
                                payment made under clause (i).
                            (iii) Final payment.--The final 
                        payment for a crop year shall be equal 
                        to the difference between--
                                    (I) the actual counter-
                                cyclical payment to be made to 
                                the producers for that crop 
                                year; and
                                    (II) the amount of the 
                                partial payments made to the 
                                producers under clauses (i) and 
                                (ii) for that crop year.
                    (C) 2007 crop year.--
                            (i) First partial payment.--For the 
                        2007 crop year, the first partial 
                        payment under paragraph (3) to the 
                        producers on a farm may not exceed 40 
                        percent of the projected counter-
                        cyclical payment for the crop year, as 
                        determined by the Secretary.
                            (ii) Final payment.--The final 
                        payment for the 2007 crop year shall be 
                        equal to the difference between--
                                    (I) the actual counter-
                                cyclical payment to be made to 
                                the producers for that crop 
                                year; and
                                    (II) the amount of the 
                                partial payment made to the 
                                producers under clause (i).
            (5) Repayment.--The producers on a farm (or, in the 
        case of the 2002 crop year, historic peanut producers) 
        that receive a partial payment under this subsection 
        for a crop year shall repay to the Secretary the 
        amount, if any, by which the total of the partial 
        payments exceed the actual counter-cyclical payment to 
        be made for that crop year.

SEC. 1305. PRODUCER AGREEMENT REQUIRED AS CONDITION ON PROVISION OF 
                    DIRECT PAYMENTS AND COUNTER-CYCLICAL PAYMENTS.

    (a) Compliance With Certain Requirements.--
            (1) Requirements.--Before the producers on a farm 
        may receive direct payments or counter-cyclical 
        payments under this subtitle with respect to the farm, 
        the producers shall agree, during the crop year for 
        which the payments are made and in exchange for the 
        payments--
                    (A) to comply with applicable conservation 
                requirements under subtitle B of title XII of 
                the Food Security Act of 1985 (16 U.S.C. 3811 
                et seq.);
                    (B) to comply with applicable wetland 
                protection requirements under subtitle C of 
                title XII of that Act (16 U.S.C. 3821 et seq.);
                    (C) to comply with the planting flexibility 
                requirements of section 1306;
                    (D) to use the land on the farm, in a 
                quantity equal to the attributable base acres 
                for peanuts and any base acres for the farm 
                under subtitle A, for an agricultural or 
                conserving use, and not for a nonagricultural 
                commercial or industrial use, as determined by 
                the Secretary; and
                    (E) to effectively control noxious weeds 
                and otherwise maintain the land in accordance 
                with sound agricultural practices, as 
                determined by the Secretary, if the 
                agricultural or conserving use involves the 
                noncultivation of any portion of the land 
                referred to in subparagraph (D).
            (2) Compliance.--The Secretary may issue such rules 
        as the Secretary considers necessary to ensure producer 
        compliance with the requirements of paragraph (1).
            (3) Modification.--At the request of the transferee 
        or owner, the Secretary may modify the requirements of 
        this subsection if the modifications are consistent 
        with the objectives of this subsection, as determined 
        by the Secretary.
    (b) Transfer or Change of Interest in Farm.--
            (1) Termination.--Except as provided in paragraph 
        (2), a transfer of (or change in) the interest of the 
        producers on a farm in the base acres for peanuts for 
        which direct payments or counter-cyclical payments are 
        made shall result in the termination of the payments 
        with respect to those acres, unless the transferee or 
        owner of the acreage agrees to assume all obligations 
        under subsection (a). The termination shall take effect 
        on the date determined by the Secretary.
            (2) Exception.--If a producer entitled to a direct 
        payment or counter-cyclical payment dies, becomes 
        incompetent, or is otherwise unable to receive the 
        payment, the Secretary shall make the payment, in 
        accordance with rules issued by the Secretary.
    (c) Acreage Reports.--As a condition on the receipt of 
direct payments, counter-cyclical payments, marketing 
assistance loans, or loan deficiency payments under this 
subtitle, the Secretary shall require the producers on a farm 
to which a payment yield and base acres for peanuts are 
assigned under section 1302 to submit to the Secretary annual 
acreage reports with respect to all cropland on the farm.
    (d) Tenants and Sharecroppers.--In carrying out this 
subtitle, the Secretary shall provide adequate safeguards to 
protect the interests of tenants and sharecroppers.
    (e) Sharing of Payments.--The Secretary shall provide for 
the sharing of direct payments and counter-cyclical payments 
among the producers on a farm on a fair and equitable basis.

SEC. 1306. PLANTING FLEXIBILITY.

    (a) Permitted Crops.--Subject to subsection (b), any 
commodity or crop may be planted on the base acres for peanuts 
on a farm.
    (b) Limitations Regarding Certain Commodities.--
            (1) General limitation.--The planting of an 
        agricultural commodity specified in paragraph (2) shall 
        be prohibited on base acres for peanuts unless the 
        commodity, if planted, is destroyed before harvest.
            (2) Treatment of trees and other perennials.--The 
        planting of an agricultural commodity specified in 
        paragraph (3) that is produced on a tree or other 
        perennial plant shall be prohibited on base acres for 
        peanuts.
            (3) Covered agricultural commodities.--Paragraphs 
        (1) and (2) apply to the following agricultural 
        commodities:
                    (A) Fruits.
                    (B) Vegetables (other than lentils, mung 
                beans, and dry peas).
                    (C) Wild rice.
    (c) Exceptions.--Paragraphs (1) and (2) of subsection (b) 
shall not limit the planting of an agricultural commodity 
specified in paragraph (3) of that subsection--
            (1) in any region in which there is a history of 
        double-cropping of peanuts with agricultural 
        commodities specified in subsection (b)(3), as 
        determined by the Secretary, in which case the double-
        cropping shall be permitted;
            (2) on a farm that the Secretary determines has a 
        history of planting agricultural commodities specified 
        in subsection (b)(3) on the base acres for peanuts, 
        except that direct payments and counter-cyclical 
        payments shall be reduced by an acre for each acre 
        planted to such an agricultural commodity; or
            (3) by the producers on a farm that the Secretary 
        determines has an established planting history of a 
        specific agricultural commodity specified in subsection 
        (b)(3), except that--
                    (A) the quantity planted may not exceed the 
                average annual planting history of such 
                agricultural commodity by the producers on the 
                farm in the 1991 through 1995 or 1998 through 
                2001 crop years (excluding any crop year in 
                which no plantings were made), as determined by 
                the Secretary; and
                    (B) direct payments and counter-cyclical 
                payments shall be reduced by an acre for each 
                acre planted to such agricultural commodity.

SEC. 1307. MARKETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS FOR 
                    PEANUTS.

    (a) Nonrecourse Loans Available.--
            (1) Availability.--For each of the 2002 through 
        2007 crops of peanuts, the Secretary shall make 
        available to producers on a farm nonrecourse marketing 
        assistance loans for peanuts produced on the farm. The 
        loans shall be made under terms and conditions that are 
        prescribed by the Secretary and at the loan rate 
        established under subsection (b).
            (2) Eligible production.--The producers on a farm 
        shall be eligible for a marketing assistance loan under 
        this subsection for any quantity of peanuts produced on 
        the farm.
            (3) Treatment of certain commingled commodities.--
        In carrying out this subsection, the Secretary shall 
        make loans to producers on a farm that would be 
        eligible to obtain a marketing assistance loan, but for 
        the fact the peanuts owned by the producers on the farm 
        are commingled with other peanuts in facilities 
        unlicensed for the storage of agricultural commodities 
        by the Secretary or a State licensing authority, if the 
        producers obtaining the loan agree to immediately 
        redeem the loan collateral in accordance with section 
        166 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7286).
            (4) Options for obtaining loan.--A marketing 
        assistance loan under this subsection, and loan 
        deficiency payments under subsection (e), may be 
        obtained at the option of the producers on a farm 
        through--
                    (A) a designated marketing association or 
                marketing cooperative of producers that is 
                approved by the Secretary; or
                    (B) the Farm Service Agency.
            (5) Storage of loan peanuts.--As a condition on the 
        Secretary's approval of an individual or entity to 
        provide storage for peanuts for which a marketing 
        assistance loan is made under this section, the 
        individual or entity shall agree--
                    (A) to provide such storage on a 
                nondiscriminatory basis; and
                    (B) to comply with such additional 
                requirements as the Secretary considers 
                appropriate to accomplish the purposes of this 
                section and promote fairness in the 
                administration of the benefits of this section.
            (6) Payment of peanut storage costs.--Effective for 
        the 2002 through 2006 crops of peanuts, to ensure 
        proper storage of peanuts for which a loan is made 
        under this section, the Secretary shall use the funds 
        of the Commodity Credit Corporation to pay storage, 
        handling, and other associated costs. This authority 
        terminates beginning with the 2007 crop of peanuts.
            (7) Marketing.--A marketing association or 
        cooperative may market peanuts for which a loan is made 
        under this section in any manner that conforms to 
        consumer needs, including the separation of peanuts by 
        type and quality.
    (b) Loan Rate.--The loan rate for a marketing assistance 
loan under for peanuts subsection (a) shall be equal to $355 
per ton.
    (c) Term of Loan.--
            (1) In general.--A marketing assistance loan for 
        peanuts under subsection (a) shall have a term of 9 
        months beginning on the first day of the first month 
        after the month in which the loan is made.
            (2) Extensions prohibited.--The Secretary may not 
        extend the term of a marketing assistance loan for 
        peanuts under subsection (a).
    (d) Repayment Rate.--
            (1) In general.--The Secretary shall permit 
        producers on a farm to repay a marketing assistance 
        loan for peanuts under subsection (a) at a rate that is 
        the lesser of--
                    (A) the loan rate established for peanuts 
                under subsection (b), plus interest (determined 
                in accordance with section 163 of the Federal 
                Agriculture Improvement and Reform Act of 1996 
                (7 U.S.C. 7283)); or
                    (B) a rate that the Secretary determines 
                will--
                            (i) minimize potential loan 
                        forfeitures;
                            (ii) minimize the accumulation of 
                        stocks of peanuts by the Federal 
                        Government;
                            (iii) minimize the cost incurred by 
                        the Federal Government in storing 
                        peanuts; and
                            (iv) allow peanuts produced in the 
                        United States to be marketed freely and 
                        competitively, both domestically and 
                        internationally.
            (2) Good faith exception to beneficial interest 
        requirement.--For the 2002 crop year only, in the case 
        of the producers on a farm that marketed or otherwise 
        lost beneficial interest in the peanuts for which a 
        marketing assistance loan was made under this section 
        before repaying the loan, the Secretary shall permit 
        the producers to repay the loan at the applicable 
        repayment rate that was in effect for peanuts under 
        this subsection on the date that the producers lost 
        beneficial interest, as determined by the Secretary, if 
        the Secretary determines the producers acted in good 
        faith.
    (e) Loan Deficiency Payments.--
            (1) Availability.--The Secretary may make loan 
        deficiency payments available to producers on a farm 
        that, although eligible to obtain a marketing 
        assistance loan for peanuts under subsection (a), agree 
        to forgo obtaining the loan for the peanuts in return 
        for loan deficiency payments under this subsection.
            (2) Computation.--A loan deficiency payment under 
        this subsection shall be computed by multiplying--
                    (A) the payment rate determined under 
                paragraph (3) for peanuts; by
                    (B) the quantity of the peanuts produced by 
                the producers, excluding any quantity for which 
                the producers obtain a marketing assistance 
                loan under subsection (a).
            (3) Payment rate.--For purposes of this subsection, 
        the payment rate shall be the amount by which--
                    (A) the loan rate established under 
                subsection (b); exceeds
                    (B) the rate at which a loan may be repaid 
                under subsection (d).
            (4) Effective date for payment rate 
        determination.--
                    (A) In general.--The Secretary shall 
                determine the amount of the loan deficiency 
                payment to be made under this subsection to the 
                producers on a farm with respect to a quantity 
                of peanuts using the payment rate in effect 
                under paragraph (3) as of the date the 
                producers request the payment.
                    (B) Special rule for 2002 crop year.--For 
                the 2002 crop year only, the Secretary shall 
                determine the amount of the loan deficiency 
                payment to be made under this subsection to the 
                producers on a farm with respect to a quantity 
                of peanuts using the payment rate in effect 
                under paragraph (3) as of the earlier of the 
                following:
                            (i) The date on which the producers 
                        marketed or otherwise lost beneficial 
                        interest in the crop, as determined by 
                        the Secretary.
                            (ii) The date the producers request 
                        the payment.
    (f) Compliance With Conservation and Wetlands 
Requirements.--As a condition of the receipt of a marketing 
assistance loan under subsection (a), the producer shall comply 
with applicable conservation requirements under subtitle B of 
title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et 
seq.) and applicable wetland protection requirements under 
subtitle C of title XII of that Act (16 U.S.C. 3821 et seq.) 
during the term of the loan.
    (g) Reimbursable Agreements and Payment of Administrative 
Expenses.--The Secretary may implement any reimbursable 
agreements or provide for the payment of administrative 
expenses under this subtitle only in a manner that is 
consistent with such activities in regard to other commodities.

SEC. 1308. MISCELLANEOUS PROVISIONS.

    (a) Mandatory Inspection.--All peanuts marketed in the 
United States shall be officially inspected and graded by 
Federal or Federal-State inspectors.
    (b) Termination of Peanut Administrative Committee.--The 
Peanut Administrative Committee established under Marketing 
Agreement No. 146 issued pursuant to the Agricultural 
Adjustment Act (7 U.S.C. 601 et seq.), reenacted with 
amendments by the Agricultural Marketing Agreement Act of 1937, 
is terminated.
    (c) Peanut Standards Board.--
            (1) Establishment and purpose.--The Secretary shall 
        establish a Peanut Standards Board for the purpose of 
        advising the Secretary regarding the establishment of 
        quality and handling standards for domestically 
        produced and imported peanuts.
            (2) Membership and appointment.--
                    (A) Total members.--The Board shall consist 
                of 18 members, with representation equally 
                divided between peanut producers and peanut 
                industry representatives.
                    (B) Appointment process for producers.--The 
                Secretary shall appoint--
                            (i) 3 producers from the Southeast 
                        (Alabama, Georgia, and Florida) peanut 
                        producing region;
                            (ii) 3 producers from the Southwest 
                        (Texas, Oklahoma, and New Mexico) 
                        peanut producing region; and
                            (iii) 3 producers from the 
                        Virginia/Carolina (Virginia and North 
                        Carolina) peanut producing region.
                    (C) Appointment process for industry 
                representatives.--The Secretary shall appoint 3 
                peanut industry representatives from each of 
                the 3 peanut producing regions in the United 
                States.
            (3) Terms.--
                    (A) In general.--A member of the Board 
                shall serve a 3-year term.
                    (B) Initial appointment.--In making the 
                initial appointments to the Board, the 
                Secretary shall stagger the terms of the 
                members so that--
                            (i) 1 producer member and peanut 
                        industry member from each peanut 
                        producing region serves a 1-year term;
                            (ii) 1 producer member and peanut 
                        industry member from each peanut 
                        producing region serves a 2-year term; 
                        and
                            (iii) 1 producer member and peanut 
                        industry member from each peanut 
                        producing region serves a 3-year term.
            (4) Consultation required.--The Secretary shall 
        consult with the Board in advance whenever the 
        Secretary establishes or changes, or considers the 
        establishment of or a change to, quality and handling 
        standards for peanuts.
            (5) Federal advisory committee act.--The Federal 
        Advisory Committee Act (5 U.S.C. App.) shall not apply 
        to the Board.
    (d) Priority.--The Secretary shall make identifying and 
combating the presence of all quality concerns related to 
peanuts a priority in the development of quality and handling 
standards for peanuts and in the inspection of domestically 
produced and imported peanuts. The Secretary shall consult with 
appropriate Federal and State agencies to provide adequate 
safeguards against all quality concerns related to peanuts.
    (e) Consistent Standards.--Imported peanuts shall be 
subject to the same quality and handling standards as apply to 
domestically produced peanuts.
    (f) Authorization of Appropriations.--
            (1) In general.--In addition to other funds that 
        are available to carry out this section, there is 
        authorized to be appropriated such sums as are 
        necessary to carry out this section.
            (2) Treatment of board expenses.--The expenses of 
        the Peanut Standards Board shall not be counted toward 
        any general limitation on the expenses of advisory 
        committees, panels, commissions, and task forces of the 
        Department of Agriculture, whether enacted before, on, 
        or after the date of enactment of this Act, unless the 
        limitation specifically refers to this paragraph and 
        specifically includes the Peanut Standards Board within 
        the general limitation.
    (g) Transition Rule.--
            (1) Temporary designation of peanut administrative 
        committee members.--Notwithstanding the appointment 
        process specified in subsection (c) for the Peanut 
        Standards Board, during the transition period, the 
        Secretary may designate persons serving as members of 
        the Peanut Administrative Committee on the day before 
        the date of enactment of this Act to serve as members 
        of the Peanut Standards Board for the purpose of 
        carrying out the duties of the Board described in this 
        section.
            (2) Funds.--The Secretary may transfer any funds 
        available to carry out the activities of the Peanut 
        Administrative Committee to the Peanut Standards Board 
        to carry out the duties of the Board described in this 
        section.
            (3) Transition period.--In paragraph (1), the term 
        ``transition period'' means the period beginning on the 
        date of enactment of this Act and ending on the earlier 
        of--
                    (A) the date the Secretary appoints the 
                members of the Peanut Standards Board pursuant 
                to subsection (c); or
                    (B) 180 days after the date of enactment of 
                this Act.
    (h) Effective Date.--This section shall take effect with 
the 2002 crop of peanuts.

SEC. 1309. TERMINATION OF MARKETING QUOTA PROGRAMS FOR PEANUTS AND 
                    COMPENSATION TO PEANUT QUOTA HOLDERS FOR LOSS OF 
                    QUOTA ASSET VALUE.

    (a) Repeal of Marketing Quota.--
            (1) Repeal.--Part VI of subtitle B of title III of 
        the Agricultural Adjustment Act of 1938 (7 U.S.C. 1357-
        1359a), relating to peanuts, is repealed.
            (2) Treatment of 2001 crop.--Part VI of subtitle B 
        of title III of the Agricultural Adjustment Act of 1938 
        (7 U.S.C. 1357-1359a), as in effect on the day before 
        the date of enactment of this Act, shall continue to 
        apply with respect to the 2001 crop of peanuts 
        notwithstanding the amendment made by paragraph (1). 
        Section 1308(g)(2) shall also apply to the 2001 crop of 
        peanuts.
    (b) Compensation Contract Required.--
            (1) In general.--The Secretary shall offer to enter 
        into a contract with each person that the Secretary 
        determines is an eligible peanut quota holder under 
        subsection (f) for the purpose of providing 
        compensation for the lost value of the quota on account 
        of the repeal of the marketing quota program for 
        peanuts under subsection (a).
            (2) Payment period.--The Secretary shall make 
        payments under the contracts during fiscal years 2002 
        through 2006.
    (c) Time for Payment.--
            (1) Payment in installments.--The payments required 
        under the contracts shall be provided in 5 equal 
        installments not later than September 30 of each of 
        fiscal years 2002 through 2006.
            (2) Single payment.--At the request of an eligible 
        peanut quota holder entitled to payments under a 
        contract, the Secretary shall provide the entire 
        payment amount determined under subsection (d) with 
        respect to the eligible peanut quota holder for the 5 
        fiscal years in a single lump sum during the fiscal 
        year specified by the eligible peanut quota holder.
    (d) Payment Amount.--The amount of the payment for a fiscal 
year to an eligible peanut quota holder under a contract shall 
be equal to the product obtained by multiplying--
            (1) $0.11 per pound; by
            (2) the number of pounds of quota with respect to 
        which the person qualifies as a peanut quota holder 
        under subsection (f).
    (e) Assignment of Payments.--The provisions of section 8(g) 
of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 
590h(g)), relating to assignment of payments, shall apply to 
the payments made under the contracts. A person making an 
assignment of the payment, or the assignee, shall provide the 
Secretary with notice, in such manner as the Secretary may 
require, of any assignment made under this subsection.
    (f) Eligible Peanut Quota Holder.--
            (1) In general.--Except as otherwise provided in 
        this subsection, the Secretary shall consider a person 
        to be an eligible peanut quota holder for the purposes 
        of this section if the person, as of the date of 
        enactment of this Act, owned a farm that, also as of 
        that date, was eligible for a permanent peanut quota 
        under section 358-1(b) of the Agricultural Adjustment 
        Act of 1938 (7 U.S.C. 1358-1(b)), irrespective of 
        temporary leases, transfers of quotas for seed, or 
        quotas for experimental purposes.
            (2) Effect of purchase contract.--If there was a 
        written contract for the purchase of all or a portion 
        of a farm described in paragraph (1) as of the date of 
        enactment of this Act and the parties to the sale are 
        unable to agree to the disposition of eligibility for 
        payments under this section, the Secretary, taking into 
        account any incomplete permanent transfer of quota that 
        has otherwise been agreed to, shall provide for the 
        equitable division of the payments among the parties by 
        adjusting the determination of who is the eligible 
        peanut quota holder with respect to particular pounds 
        of the quota.
            (3) Effect of agreement for permanent quota 
        transfer.--If the Secretary determines that there was 
        in existence, as of the date of enactment of this Act, 
        an agreement for the permanent transfer of quota, but 
        that the transfer was not completed by that date, the 
        Secretary shall consider the peanut quota holder to be 
        the party to the agreement who, as of that date, was 
        the owner of the farm to which the quota was to be 
        transferred.
            (4) Protected bases.--A person that owns a farm 
        with a peanut poundage quota which is protected under a 
        conservation reserve program contract entered into 
        under section 1231 of the Food Security Act of 1985 (16 
        U.S.C. 3831) shall be considered to be an eligible 
        quota holder with respect to the protected poundage.
            (5) Secretarial discretion.--Notwithstanding the 
        preceding paragraphs, the Secretary may declare a 
        person to be the eligible peanut quota holder with 
        respect to certain pounds of quota or otherwise for 
        purposes of this section if the Secretary considers the 
        declaration is needed to insure a fair and equitable 
        administration of the payments provided for in this 
        section, so long as the Secretary does not, in 
        exercising this authority, effectively increase the 
        total quota in excess of the quota that was available 
        to all producers for the 2001 crop year for other than 
        seed or experimental use.
            (6) Limitation on quantity of quota held.--A person 
        shall be considered an eligible peanut quota holder for 
        purposes of this section only with respect to that 
        number of permanent pounds that qualifies the person as 
        a peanut quota holder under one of the preceding 
        paragraphs. The determination of the peanut poundage 
        amount for which the person qualifies shall be made 
        based on the 2001 crop quota levels and shalltake into 
account sales of the farm that occurred before the date of enactment of 
this Act and any permanent transfers of quota that took place before 
that date, consistent with the preceding paragraphs. The Secretary 
shall not take into account, or allow eligibility for, quotas for seed, 
granted as experimental quotas, or obtained by temporary lease or 
transfer.
    (g) Successions in Payment Eligibility and Attachment of 
Eligibility to Persons.--
            (1) Eligibility attaches to persons.--Once a person 
        is eligible for payments under this section, as 
        determined under subsection (f), the continued 
        eligibility of the person for the payments does not run 
        with a farm, but shall remain with the person for the 
        term of this section irrespective of whether the person 
        sells, or continues to have an interest in, the farm 
        that had the quota that qualified the person as an 
        eligible peanut quota holder under subsection (f) and 
        irrespective of whether the person has a continuing 
        interest in the production of peanuts.
            (2) Succession.--If a person eligible for payments 
        under this section dies, in the case of an individual, 
        or ceases to exist, in the case of other persons, the 
        payment eligibility of the person shall pass to the 
        person's personal or organizational successor, as 
        determined by the Secretary.
    (h) Conforming Amendments.--
            (1) Administrative provisions.--Section 361 of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1361) is 
        amended by striking ``peanuts,''.
            (2) Adjustment of quotas.--Section 371 of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1371) is 
        amended--
                    (A) in the first sentence of subsection 
                (a), by striking ``peanuts,''; and
                    (B) in the first sentence of subsection 
                (b), by striking ``peanuts''.
            (3) Reports and records.--Section 373 of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1373) is 
        amended--
                    (A) in the first sentence of subsection 
                (a)--
                            (i) by striking ``peanuts,'' each 
                        place it appears;
                            (ii) by inserting ``and'' after 
                        ``from producers,''; and
                            (iii) by striking ``for producers, 
                        all'' and all that follows through the 
                        period at the end of the sentence and 
                        inserting ``for producers.''; and
                    (B) in subsection (b), by striking 
                ``peanuts,''.
            (4) Eminent domain.--Section 378(c) of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1378(c)) 
        is amended in the first sentence--
                    (A) by striking ``cotton,'' and inserting 
                ``cotton and''; and
                    (B) by striking ``and peanuts,''.

SEC. 1310. REPEAL OF SUPERSEDED PRICE SUPPORT AUTHORITY AND EFFECT OF 
                    REPEAL.

    (a) Repeal of Price Support Authority.--
            (1) In general.--Section 155 of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7271) is repealed.
            (2) Conforming amendments.--The Agricultural Act of 
        1949 (7 U.S.C. 1441 et seq.) is amended--
                    (A) in section 101(b) (7 U.S.C. 1441(b)), 
                by striking ``and peanuts''; and
                    (B) in section 408(c) (7 U.S.C. 1428(c)), 
                by striking ``peanuts,''.
            (3) Technical amendment.--The chapter heading of 
        chapter 2 of subtitle D of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. prec. 
        7271) is amended by striking ``PEANUTS AND''.
    (b) Disposal.--Notwithstanding any other provision of law 
or previous declaration made by the Secretary, the Secretary 
shall ensure that the disposal of all peanuts for which a loan 
for the 2001 crop of peanuts was made under section 155 of the 
Federal Agriculture Improvement and Reform Act of 1996 (7 
U.S.C. 7271) before the date of enactment of this Act is 
carried out in a manner that prevents price disruptions in the 
domestic and international markets for peanuts.
    (c) Treatment of Crop Insurance Policies for 2002 Crop 
Year.--
            (1) Applicability.--This subsection shall apply for 
        the 2002 crop year only notwithstanding any other 
        provision of law or crop insurance policy.
            (2) Price election.--The nonquota price election 
        for segregation I, II, and III peanuts shall be 17.75 
        cents per pound and shall be used for all aspects of 
        the policy relating to the calculations of premium, 
        liability, and indemnities.
            (3) Quality Adjustment.--For the purposes of 
        quality adjustment only, the average support price per 
        pound of peanuts shall be a price equal to 17.75 cents 
        per pound. Quality under the crop insurance policy for 
        peanuts shall be adjusted under procedures issued by 
        the Federal Crop Insurance Corporation.

                           Subtitle D--Sugar

SEC. 1401. SUGAR PROGRAM.

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

``SEC. 156. SUGAR PROGRAM.

    ``(a) Sugarcane.--The Secretary shall make loans available 
to processors of domestically grown sugarcane at a rate equal 
to 18 cents per pound for raw cane sugar.
    ``(b) Sugar Beets.--The Secretary shall make loans 
available to processors of domestically grown sugar beets at a 
rate equal to 22.9 cents per pound for refined beet sugar.
    ``(c) Loan Rate Adjustments.--
            ``(1) In general.--The Secretary may reduce the 
        loan rate specified in subsection (a) for domestically 
        grown sugarcane and subsection (b) for domestically 
        grown sugar beets if the Secretary determines that 
        negotiated reductions in export subsidies and domestic 
        subsidies provided for sugar of other major sugar 
        growing, producing, and exporting countries in the 
        aggregate exceed the commitments made as part of the 
        Agreement on Agriculture.
            ``(2) Extent of reduction.--The Secretary shall not 
        reduce the loan rate under subsection (a) or (b) below 
        a rate that provides an equal measure of support to 
        that provided by other major sugar growing, producing, 
        and exporting countries, based on an examination of 
        both domestic and export subsidies subject to reduction 
        in the Agreement on Agriculture.
            ``(3) Announcement of reduction.--The Secretary 
        shall announce any loan rate reduction to be made under 
        this subsection as far in advance as is practicable.
            ``(4) Definitions.--In this subsection:
                    ``(A) Agreement on agriculture.--The term 
                `Agreement on Agriculture' means the Agreement 
                on Agriculture referred to in section 101(d)(2) 
                of the Uruguay Round Agreements Act (19 U.S.C. 
                3511(d)(2)), or any amendatory or successor 
                agreement.
                    ``(B) Major sugar countries.--The term 
                `major sugar growing, producing, and exporting 
                countries' means--
                            ``(i) the countries of the European 
                        Union; and
                            ``(ii) the 10 foreign countries not 
                        covered by subparagraph (A) that the 
                        Secretary determines produce the 
                        greatest quantity of sugar.
    ``(d) Term of Loans.--
            ``(1) In general.--A loan under this section during 
        any fiscal year shall be made available not earlier 
        than the beginning of the fiscal year and shall mature 
        at the earlier of--
                    ``(A) the end of the 9-month period 
                beginning on the first day of the first month 
                after the month in which the loan is made; or
                    ``(B) the end of the fiscal year in which 
                the loan is made.
            ``(2) Supplemental loans.--In the case of a loan 
        made under this section in the last 3 months of a 
        fiscal year, the processor may repledge the sugar as 
        collateral for a second loan in the subsequent fiscal 
        year, except that the second loan shall--
                    ``(A) be made at the loan rate in effect at 
                the time the second loan is made; and
                    ``(B) mature in 9 months less the quantity 
                of time that the first loan was in effect.
    ``(e) Loan Type; Processor Assurances.--
            ``(1) Nonrecourse loans.--The Secretary shall carry 
        out this section through the use of nonrecourse loans.
            ``(2) Processor assurances.--
                    ``(A) In general.--The Secretary shall 
                obtain from each processor that receives a loan 
                under this section such assurances as the 
                Secretary considers adequate to ensure that the 
                processor will provide payments to producers 
                that are proportional to the value of the loan 
                received by the processor for the sugar beets 
                and sugarcane delivered by producers to the 
                processor.
                    ``(B) Minimum payments.--
                            ``(i) In general.--Subject to 
                        clause (ii), the Secretary may 
                        establish appropriate minimum payments 
                        for purposes of this paragraph.
                            ``(ii) Limitation.--In the case of 
                        sugar beets, the minimum payment 
                        established under clause (i) shall not 
                        exceed the rate of payment provided for 
                        under the applicable contract between a 
                        sugar beet producer and a sugar beet 
                        processor.
                            ``(iii) Effect of disaster.--The 
                        Secretary may not bar a beet sugar 
                        processor from eligibility to obtain a 
                        loan under this section because of the 
                        failure of the processor to provide the 
                        appropriate minimum payment established 
                        under this subsection if the failure--
                                    ``(I) occurred during a 
                                crop year prior to the date of 
                                enactment of the Farm Security 
                                and Rural Investment Act of 
                                2002; and
                                    ``(II) was related, at 
                                least in part, to the effects 
                                of a natural disaster, 
                                including damage from freeze.
            ``(3) Administration.--The Secretary may not impose 
        or enforce any prenotification requirement, or similar 
        administrative requirement not otherwise in effect on 
        the date of enactment of the Farm Security and Rural 
        Investment Act of 2002, that has the effect of 
        preventing a processor from electing to forfeit the 
        loan collateral (of an acceptable grade and quality) on 
        the maturity of the loan.
    ``(f) Loans for In-Process Sugar.--
            ``(1) Definition of in-process sugars and syrups.--
        In this subsection, the term `in-process sugars and 
        syrups' does not include raw sugar, liquid sugar, 
        invert sugar, invert syrup, or other finished product 
        that is otherwise eligible for a loan under subsection 
        (a) or (b).
            ``(2) Availability.--The Secretary shall make 
        nonrecourse loans available to processors of a crop of 
        domestically grown sugarcane and sugar beets for in-
        process sugars and syrups derived from the crop.
            ``(3) Loan rate.--The loan rate shall be equal to 
        80 percent of the loan rate applicable to raw cane 
        sugar or refined beet sugar, as determined by the 
        Secretary on the basis of the source material for the 
        in-process sugars and syrups.
            ``(4) Further processing on forfeiture.--
                    ``(A) In general.--As a condition of the 
                forfeiture of in-process sugars and syrups 
                serving as collateral for a loan under 
                paragraph (2), the processor shall, within such 
                reasonable time period as the Secretary may 
                prescribe and at no cost to the Commodity 
                Credit Corporation, convert the in-process 
                sugars and syrups into raw cane sugar or 
                refined beet sugar of acceptable grade and 
                quality for sugars eligible for loans under 
                subsection (a) or (b).
                    ``(B) Transfer to corporation.--Once the 
                in-process sugars and syrups are fully 
                processed into raw cane sugar or refined beet 
                sugar, the processor shall transfer the sugar 
                to the Commodity Credit Corporation.
                    ``(C) Payment to processor.--On transfer of 
                the sugar, the Secretary shall make a payment 
                to the processor in an amount equal to the 
                amount obtained by multiplying--
                            ``(i) the difference between--
                                    ``(I) the loan rate for raw 
                                cane sugar or refined beet 
                                sugar, as appropriate; and
                                    ``(II) the loan rate the 
                                processor received under 
                                paragraph (3); by
                            ``(ii) the quantity of sugar 
                        transferred to the Secretary.
            ``(5) Loan conversion.--If the processor does not 
        forfeit the collateral as described in paragraph (4), 
        but instead further processes the in-process sugars and 
        syrups into raw cane sugar or refined beet sugar and 
        repays the loan on the in-process sugars and syrups, 
        the processor may obtain a loan under subsection (a) or 
        (b) for the raw cane sugar or refined beet sugar, as 
        appropriate.
            ``(6) Term of loan.--The term of a loan made under 
        this subsection for a quantity of in-process sugars and 
        syrups, when combined with the term of a loan made with 
        respect to the raw cane sugar or refined beet sugar 
        derived from the in-process sugars and syrups, may not 
        exceed 9 months, consistent with subsection (d).
    ``(g) Avoiding Forfeitures; Corporation Inventory 
Disposition.--
            ``(1) In general.--Subject to subsection (e)(3), to 
        the maximum extent practicable, the Secretary shall 
        operate the program established under this section at 
        no cost to the Federal Government by avoiding the 
        forfeiture of sugar to the Commodity Credit 
        Corporation.
            ``(2) Inventory disposition.--
                    ``(A) In general.--To carry out paragraph 
                (1), the Commodity Credit Corporation may 
                accept bids to obtain raw cane sugar or refined 
                beet sugar in the inventory of the Commodity 
                Credit Corporation from (or otherwise make 
                available such commodities, on appropriate 
                terms and conditions, to) processors of 
                sugarcane and processors of sugar beets (acting 
                in conjunction with the producers of the 
                sugarcane or sugar beets processed by the 
                processors) in return for the reduction of 
                production of raw cane sugar or refined beet 
                sugar, as appropriate.
                    ``(B) Additional authority.--The authority 
                provided under this paragraph is in addition to 
                any authority of the Commodity Credit 
                Corporation under any other law.
    ``(h) Information Reporting.--
            ``(1) Duty of processors and refiners to report.--A 
        sugarcane processor, cane sugar refiner, and sugar beet 
        processor shall furnish the Secretary, on a monthly 
        basis, such information as the Secretary may require to 
        administer sugar programs, including the quantity of 
        purchases of sugarcane, sugar beets, and sugar, and 
        production, importation, distribution, and stock levels 
        of sugar.
            ``(2) Duty of producers to report.--
                    ``(A) Proportionate share states.--As a 
                condition of a loan made to a processor for the 
                benefit of a producer, the Secretary shall 
                require each producer of sugarcane located in a 
                State (other than the Commonwealth of Puerto 
                Rico) in which there are in excess of 250 
                producers of sugarcane to report, in the manner 
                prescribed by the Secretary, the sugarcane 
                yields and acres planted to sugarcane of the 
                producer.
                    ``(B) Other states.--The Secretary may 
                require each producer of sugarcane or sugar 
                beets not covered by subparagraph (A) to 
                report, in a manner prescribed by the 
                Secretary, the yields of, and acres planted to, 
                sugarcane or sugar beets, respectively, of the 
                producer.
            ``(3) Duty of importers to report.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall require 
                an importer of sugars, syrups, or molasses to 
                be used for human consumption or to be used for 
                the extraction of sugar for human consumption 
                to report, in the manner prescribed by the 
                Secretary, the quantities of the products 
                imported by the importer and the sugar content 
                or equivalent of the products.
                    ``(B) Tariff-rate quotas.--Subparagraph (A) 
                shall not apply to sugars, syrups, or molasses 
                that are within the quantities of tariff-rate 
                quotas that are subject to the lower rate of 
                duties.
            ``(4) Penalty.--Any person willfully failing or 
        refusing to furnish the information, or furnishing 
        willfully any false information, shall be subject to a 
        civil penalty of not more than $10,000 for each such 
        violation.
            ``(5) Monthly reports.--Taking into consideration 
        the information received under this subsection, the 
        Secretary shall publish on a monthly basis composite 
        data on production, imports, distribution, and stock 
        levels of sugar.
    ``(i) Substitution of Refined Sugar.--For purposes of 
Additional U.S. Note 6 to chapter 17 of the Harmonized Tariff 
Schedule of the United States and the reexport programs and 
polyhydric alcohol program administered by the Secretary, all 
refined sugars (whether derived from sugar beets or sugarcane) 
produced by cane sugar refineries and beet sugar processors 
shall be fully substitutable for the export of sugar and sugar-
containing products under those programs.
    ``(j) Effective Period.--This section shall be effective 
only for the 1996 through 2007 crops of sugar beets and 
sugarcane.''.
    (b) Effective Date of Assessment Termination.--Subsection 
(f) of section 156 of the Federal Agriculture Improvement and 
Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect immediately 
before the enactment of the Farm Security and Rural Investment 
Act of 2002, is deemed to have been repealed effective as of 
October 1, 2001.
    (c) Interest Rate.--Section 163 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended--
            (1) by inserting ``(a) In General.--'' before 
        ``Notwithstanding''; and
            (2) by adding at the end the following:
    ``(b) Sugar.--For purposes of this section, raw cane sugar, 
refined beet sugar, and in-process sugar eligible for a loan 
under section 156 shall not be considered an agricultural 
commodity.''.

SEC. 1402. STORAGE FACILITY LOANS.

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

SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

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

          ``PART VII--FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR

``SEC. 359A. DEFINITIONS.

    ``In this part:
            ``(1) Mainland state.--The term `mainland State' 
        means a State other than an offshore State.
            ``(2) Offshore state.--The term `offshore State' 
        means a sugarcane producing State located outside of 
        the continental United States.
            ``(3) State.--Notwithstanding section 301, the term 
        `State' means--
                    ``(A) a State;
                    ``(B) the District of Columbia; and
                    ``(C) the Commonwealth of Puerto Rico.
            ``(4) United states.--The term `United States', 
        when used in a geographical sense, means all of the 
        States.

``SEC. 359B. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

    ``(a) Sugar Estimates.--
            ``(1) In general.--Not later than August 1 before 
        the beginning of each of the 2002 through 2007 crop 
        years, the Secretary shall estimate--
                    ``(A) the quantity of sugar that will be 
                consumed in the United States during the crop 
                year;
                    ``(B) the quantity of sugar that would 
                provide for reasonable carryover stocks;
                    ``(C) the quantity of sugar that will be 
                available from carry-in stocks for consumption 
                in the United States during the crop year;
                    ``(D) the quantity of sugar that will be 
                available from the domestic processing of 
                sugarcane and sugar beets; and
                    ``(E) the quantity of sugars, syrups, and 
                molasses that will be imported for human 
                consumption or to be used for the extraction of 
                sugar for human consumption in the United 
                States during the crop year, whether such 
                articles are under a tariff-rate quota or are 
                in excess or outside of a tariff-rate quota.
            ``(2) Exclusion.--The estimates under this 
        subsection shall not apply to sugar imported for the 
        production of polyhydric alcohol or to any sugar 
        refined and reexported in refined form or in products 
        containing sugar.
            ``(3) Reestimates.--The Secretary shall make 
        reestimates of sugar consumption, stocks, production, 
        and imports for a crop year as necessary, but no later 
        than the beginning of each of the second through fourth 
        quarters of the crop year.
    ``(b) Sugar Allotments.--
            ``(1) In general.--By the beginning of each crop 
        year, the Secretary shall establish for that crop year 
        appropriate allotments under section 359c for the 
        marketing by processors of sugar processed from sugar 
        beets and from domestically produced sugarcane at a 
        level that the Secretary estimates will result in no 
        forfeitures of sugar to the Commodity Credit 
        Corporation under the loan program for sugar 
        established under section 156 of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 
        U.S.C. 7272).
            ``(2) Products.--The Secretary may include sugar 
        products, whose majority content is sucrose for human 
        consumption, derived from sugarcane, sugar beets, 
        molasses, or sugar in the allotments under paragraph 
        (1) if the Secretary determines it to be appropriate 
        for purposes of this part.
    ``(c) Prohibitions.--
            ``(1) In general.--During any crop year or portion 
        thereof for which marketing allotments have been 
        established, no processor of sugar beets or sugarcane 
        shall market a quantity of sugar in excess of the 
        allocation established for such processor, except to 
        enable another processor to fulfill an allocation 
        established for such other processor or to facilitate 
        the exportation of such sugar.
            ``(2) Civil penalty.--Any processor who knowingly 
        violates paragraph (1) shall be liable to the Commodity 
        Credit Corporation for a civil penalty in an amount 
        equal to 3 times the United States market value, at the 
        time of the commission of the violation, of that 
        quantity of sugar involved in the violation.
            ``(3) Definition of market.--For purposes of this 
        part, the term `market' shall mean to sell or otherwise 
        dispose of in commerce in the United States (including 
        the forfeiture of sugar under the loan program for 
        sugar under section 156 of the Federal Agriculture 
        Improvement and Reform Act of 1996 (7 U.S.C. 7272) and, 
        with respect to any integrated processor and refiner, 
        the movement of raw cane sugar into the refining 
        process).

``SEC. 359C. ESTABLISHMENT OF FLEXIBLE MARKETING ALLOTMENTS.

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

``SEC. 359D. ALLOCATION OF MARKETING ALLOTMENTS.

    ``(a) Allocation to Processors.--Whenever marketing 
allotments are established for a crop year under section 359c, 
in order to afford all interested persons an equitable 
opportunity to market sugar under an allotment, the Secretary 
shall allocate each such allotment among the processors covered 
by the allotment.
    ``(b) Hearing and Notice.--
            ``(1) Cane sugar.--
                    ``(A) In general.--The Secretary shall make 
                allocations for cane sugar after a hearing, if 
                requested by the affected sugarcane processors 
                and growers, and on such notice as the 
                Secretary by regulation may prescribe, in such 
                manner and in such quantities as to provide a 
                fair, efficient, and equitable distribution of 
                the allocations under this paragraph. Each such 
                allocation shall be subject to adjustment under 
                section 359c(g).
                    ``(B) Multiple processor states.--Except as 
                provided in subparagraphs (C) and (D), the 
                Secretary shall allocate the allotment for cane 
                sugar among multiple cane sugar processors in a 
                single State based on--
                            ``(i) past marketings of sugar, 
                        based on the average of the 2 highest 
                        years of production of raw cane sugar 
                        from among the 1996 through 2000 crops;
                            ``(ii) the ability of processors to 
                        market sugar covered by that portion of 
                        the allotment allocated for the crop 
                        year; and
                            ``(iii) past processings of sugar 
                        from sugarcane, based on the average of 
                        the 3 highest years of production 
                        during the 1996 through 2000 crop 
                        years.
                    ``(C) Talisman processing facility.--In the 
                case of allotments under subparagraph (B) 
                attributable to the operations of the Talisman 
                processing facility before the date of 
                enactment of this subparagraph, the Secretary 
                shall allocate the allotment among processors 
                in the State under subparagraph (A) in 
                accordance with the agreements of March 25 and 
                26, 1999, between the affected processors and 
                the Secretary of the Interior.
                    ``(D) Proportionate share states.--In the 
                case of States subject to section 359f(c), the 
                Secretary shall allocate the allotment for cane 
                sugar among multiple cane sugar processors in a 
                single State based on--
                            ``(i) past marketings of sugar, 
                        based on the average of the 2 highest 
                        years of production of raw cane sugar 
                        from among the 1997 through 2001 crop 
                        years;
                            ``(ii) the ability of processors to 
                        market sugar covered by that portion of 
                        the allotments allocated for the crop 
                        year; and
                            ``(iii) past processings of sugar 
                        from sugarcane, based on the average of 
                        the 2 highest crop years of crop 
                        production during the 1997 through 2001 
                        crop years.
                    ``(E) New entrants.--
                            ``(i) In general.--Notwithstanding 
                        subparagraphs (B) and (D), the 
                        Secretary, on application of any 
                        processor that begins processing 
                        sugarcane on or after the date of 
                        enactment of this subparagraph, and 
                        after a hearing (if requested by the 
                        affected sugarcane processors and 
                        growers) and on such notice as the 
                        Secretary by regulation may prescribe, 
                        may provide the processor with an 
                        allocation that provides a fair, 
                        efficient and equitable distribution of 
                        the allocations from the allotment for 
                        the State in which the processor is 
                        located.
                            ``(ii) Proportionate share 
                        states.--In the case of proportionate 
                        share States, the Secretary shall 
                        establish proportionate shares in a 
                        quantity sufficient to produce the 
                        sugarcane required to satisfy the 
                        allocations.
                            ``(iii) Limitations.--The allotment 
                        for a new processor under this 
                        subparagraph shall not exceed--
                                    ``(I) in the case of the 
                                first crop year of operation of 
                                a new processor, 50,000 short 
                                tons (raw value); and
                                    ``(II) in the case of each 
                                subsequent crop year of 
                                operation of the new processor, 
                                a quantity established by the 
                                Secretary in accordance with 
                                this subparagraph and the 
                                criteria described in 
                                subparagraph (B) or (D), as 
                                applicable.
                            ``(iv) New entrant states.--
                                    ``(I) In general.--
                                Notwithstanding subparagraphs 
                                (A) and (C) of section 
                                359c(e)(3), to accommodate an 
                                allocation under clause (i) to 
                                a new processor located in a 
                                new entrant mainland State, the 
                                Secretary shall provide the new 
                                entrant mainland State with an 
                                allotment.
                                    ``(II) Effect on other 
                                allotments.--The allotment to 
                                any new entrant mainland State 
                                shall be subtracted, on a pro 
                                rata basis, from the allotments 
                                otherwise allotted to each 
                                mainland State under section 
                                359c(e)(3).
                            ``(v) Adverse effects.--Before 
                        providing an initial processor 
                        allocation or State allotment to a new 
                        entrant processor or a new entrant 
                        State under this subparagraph, the 
                        Secretary shall take into consideration 
                        any adverse effects that the provision 
                        of the allocation or allotment may have 
                        on existing cane processors and 
                        producers in mainland States.
                            ``(vi) Ability to market.--
                        Consistent with section 359c and this 
                        section, any processor allocation or 
                        State allotment made to a new entrant 
                        processor or to a new entrant State 
                        under this subparagraph shall be 
                        provided only after the applicant 
                        processor, or the applicable processors 
                        in the State, have demonstrated the 
                        ability to process, produce, and market 
                        (including the transfer or delivery of 
                        the raw cane sugar to a refinery for 
                        further processing or marketing) raw 
                        cane sugar for the crop year for which 
                        the allotment is applicable.
                            ``(vii) Prohibition.--Not more than 
                        1 processor allocation provided under 
                        this subparagraph may be applicable to 
                        any individual sugar processing 
                        facility.
                    ``(F) Transfer of ownership.--Except as 
                otherwise provided in section 359f(c)(8), if a 
                sugarcane processor is sold or otherwise 
                transferred to another owner or is closed as 
                part of an affiliated corporate group 
                processing consolidation, the Secretary shall 
                transfer the allotment allocation for the 
                processor to the purchaser, new owner, 
                successor in interest, or any remaining 
                processor of an affiliated entity, as 
                applicable, of the processor.
            ``(2) Beet sugar.--
                    ``(A) In general.--Except as otherwise 
                provided in this paragraph and sections 
                359c(g), 359e(b), and 359f(b), the Secretary 
                shall make allocations for beet sugar among 
                beet sugar processors for each crop year that 
                allotments are in effect on the basis of the 
                adjusted weighted average quantity of beet 
                sugar produced by the processors for each of 
                the 1998 through 2000 crop years, as determined 
                under this paragraph.
                    ``(B) Quantity.--The quantity of an 
                allocation made for a beet sugar processor for 
                a crop year under subparagraph (A) shall bear 
                the same ratio to the quantity of allocations 
                made for all beet sugar processors for the crop 
                year as the adjusted weighted average quantity 
                of beet sugar produced by the processor (as 
                determined under subparagraphs (C) and (D)) 
                bears to the total of the adjusted weighted 
                average quantities of beet sugar produced by 
                all processors (as so determined).
                    ``(C) Weighted average quantity.--Subject 
                to subparagraph (D), the weighted quantity of 
                beet sugar produced by a beet sugar processor 
                during each of the 1998 through 2000 crop years 
                shall be (as determined by the Secretary)--
                            ``(i) in the case of the 1998 crop 
                        year, 25 percent of the quantity of 
                        beet sugar produced by the processor 
                        during the crop year;
                            ``(ii) in the case of the 1999 crop 
                        year, 35 percent of the quantity of 
                        beet sugar produced by the processor 
                        during the crop year; and
                            ``(iii) in the case of the 2000 
                        crop year, 40 percent of the quantity 
                        of beet sugar produced by the processor 
                        (including any quantity of sugar 
                        received from the Commodity Credit 
                        Corporation) during the crop year.
                    ``(D) Adjustments.--
                            ``(i) In general.--The Secretary 
                        shall adjust the weighted average 
                        quantity of beet sugar produced by a 
                        beet sugar processor during the 1998 
                        through 2000 crop years under 
                        subparagraph (C) if the Secretary 
                        determines that the processor--
                                    ``(I) during the 1996 
                                through 2000 crop years, opened 
                                a sugar beet processing 
                                factory;
                                    ``(II) during the 1998 
                                through 2000 crop years, closed 
                                a sugar beet processing 
                                factory;
                                    ``(III) during the 1998 
                                through 2000 crop years, 
                                constructed a molasses 
                                desugarization facility; or
                                    ``(IV) during the 1998 
                                through 2000 crop years, 
                                suffered substantial quality 
                                losses on sugar beets stored 
                                during any such crop year.
                            ``(ii) Quantity.--The quantity of 
                        beet sugar produced by a beet sugar 
                        processor under subparagraph (C) shall 
                        be--
                                    ``(I) in the case of a 
                                processor that opened a sugar 
                                beet processing factory, 
                                increased by 1.25 percent of 
                                the total of the adjusted 
                                weighted average quantities of 
                                beet sugar produced by all 
                                processors during the 1998 
                                through 2000 crop years 
                                (without consideration of any 
                                adjustment under this 
                                subparagraph) for each sugar 
                                beet processing factory that is 
                                opened by the processor;
                                    ``(II) in the case of a 
                                processor that closed a sugar 
                                beet processing factory, 
                                decreased by 1.25 percent of 
                                the total of the adjusted 
                                weighted average quantities of 
                                beet sugar produced by all 
                                processors during the 1998 
                                through 2000 crop years 
                                (without consideration of any 
                                adjustment under this 
                                subparagraph) for each sugar 
                                beet processing factory that is 
                                closed by the processor;
                                    ``(III) in the case of a 
                                processor that constructed a 
                                molasses desugarization 
                                facility, increased by 0.25 
                                percent of the total of the 
                                adjusted weighted average 
                                quantities of beet sugar 
                                produced by all processors 
                                during the 1998 through 2000 
                                crop years (without 
                                consideration of any adjustment 
                                under this subparagraph) for 
                                each molasses desugarization 
                                facility that is constructed by 
                                the processor; and
                                    ``(IV) in the case of a 
                                processor that suffered 
                                substantial quality losses on 
                                stored sugar beets, increased 
                                by 1.25 percent of the total of 
                                the adjusted weighted average 
                                quantities of beet sugar 
                                produced by all processors 
                                during the 1998 through 2000 
                                crop years (without 
                                consideration of any adjustment 
                                under this subparagraph).
                    ``(E) Permanent termination of operations 
                of a processor.--If a processor of beet sugar 
                has been dissolved, liquidated in a bankruptcy 
                proceeding, or otherwise has permanently 
                terminated operations (other than in 
                conjunction with a sale or other disposition of 
                the processor or the assets of the processor), 
                the Secretary shall--
                            ``(i) eliminate the allocation of 
                        the processor provided under this 
                        section; and
                            ``(ii) distribute the allocation to 
                        other beet sugar processors on a pro 
                        rata basis.
                    ``(F) Sale of all assets of a processor to 
                another processor.--If a processor of beet 
                sugar (or all of the assets of the processor) 
                is sold to another processor of beet sugar, the 
                Secretary shall transfer the allocation of the 
                seller to the buyer unless the allocation has 
                been distributed to other sugar beet processors 
                under subparagraph (E).
                    ``(G) Sale of factories of a processor to 
                another processor.--
                            ``(i) In general.--Subject to 
                        subparagraphs (E) and (F), if 1 or more 
                        factories of a processor of beet sugar 
                        (but not all of the assets of the 
                        processor) are sold to another 
                        processor of beet sugar during a crop 
                        year, the Secretary shall assign a pro 
                        rata portion of the allocation of the 
                        seller to the allocation of the buyer 
                        to reflect the historical contribution 
                        of the production of the sold factory 
                        or factories to the total allocation of 
                        the seller.
                            ``(ii) Application of allocation.--
                        The assignment of the allocation under 
                        clause (i) shall apply--
                                    ``(I) during the remainder 
                                of the crop year during which 
                                the sale described in clause 
                                (i) occurs (referred to in this 
                                subparagraph as the `initial 
                                crop year'); and
                                    ``(II) each subsequent crop 
                                year (referred in this 
                                subparagraph as a `subsequent 
                                crop year'), subject to clause 
                                (iii).
                            ``(iii) Subsequent crop years.--
                                    ``(I) In general.--The 
                                assignment of the allocation 
                                under clause (i) shall apply 
                                during each subsequent crop 
                                year unless the acquired 
                                factory or factories continue 
                                in operation for less than the 
                                initial crop year and the first 
                                subsequent crop year.
                                    ``(II) Reassignment.--If 
                                the acquired factory or 
                                factories do not continue in 
                                operation for the complete 
                                initial crop year and the first 
                                subsequent crop year, the 
                                Secretary shall reassign the 
                                temporary allocation to other 
                                processors of beet sugar on a 
                                pro rata basis.
                            ``(iv) Use of other factories to 
                        fill allocation.--If the transferred 
                        allocation to the buyer for the 
                        purchased factory or factories cannot 
                        be filled by the production of the 
                        purchased factory or factories for the 
                        initial crop year or a subsequent crop 
                        year, the remainder of the transferred 
                        allocation may be filled by beet sugar 
                        produced by the buyer from other 
                        factories of the buyer.
                    ``(H) New entrants starting production or 
                reopening factories.--
                            ``(i) In general.--Except as 
                        provided by clause (ii), if an 
                        individual or entity that does not have 
                        an allocation of beet sugar under this 
                        part (referred to in this paragraph as 
                        a `new entrant') starts processing 
                        sugar beets after the date of enactment 
                        of this subparagraph, or acquires and 
                        reopens a factory that produced beet 
                        sugar during previous crop years that 
                        (at the time of acquisition) has no 
                        allocation associated with the factory 
                        under this part, the Secretary shall--
                                    ``(I) assign an allocation 
                                for beet sugar to the new 
                                entrant that provides a fair 
                                and equitable distribution of 
                                the allocations for beet sugar; 
                                and
                                    ``(II) reduce the 
                                allocations for beet sugar of 
                                all other processors on a pro 
                                rata basis to reflect the new 
                                allocation.
                            ``(ii) Exception.--If a new entrant 
                        acquires and reopens a factory that 
                        previously produced beet sugar from 
                        sugar beets and from sugar beet 
                        molasses but the factory last processed 
                        sugar beets during the 1997 crop year 
                        and the new entrant starts to process 
                        sugar beets at such factory after the 
                        date of enactment of this clause, the 
                        Secretary shall--
                                    ``(I) assign an allocation 
                                for beet sugar to the new 
                                entrant that is not less than 
                                the greater of 1.67 percent of 
                                the total of the adjusted 
                                weighted average quantities of 
                                beet sugar produced by all 
                                processors during the 1998 
                                through 2000 crop years as 
                                determined under subsection 
                                (b)(2)(C), or 1,500,000 
                                hundredweights; and
                                    ``(II) reduce the 
                                allocations for beet sugar of 
                                all other processors on a pro 
                                rata basis to reflect the new 
                                allocation.
                    ``(I) New entrants acquiring ongoing 
                factories with production history.--If a new 
                entrant acquires a factory that has production 
                history during the period of the 1998 through 
                2000 crop years and that is producing beet 
                sugar at the time the allocations are made from 
                a processor that has an allocation of beet 
                sugar, the Secretary shall transfer a portion 
                of the allocation of the seller to the new 
                entrant to reflect the historical contribution 
                of the production of the sold factory to the 
                total allocation of the seller.

``SEC. 359E. REASSIGNMENT OF DEFICITS.

    ``(a) Estimates of Deficits.--At any time allotments are in 
effect under this part, the Secretary, from time to time, shall 
determine whether (in view of then-current inventories of 
sugar, the estimated production of sugar and expected 
marketings, and other pertinent factors) any processor of 
sugarcane will be unable to market the sugar covered by the 
portion of the State cane sugar allotment allocated to the 
processor and whether any processor of sugar beets will be 
unable to market sugar covered by the portion of the beet sugar 
allotment allocated to the processor.
    ``(b) Reassignment of Deficits.--
            ``(1) Cane sugar.--If the Secretary determines that 
        any sugarcane processor who has been allocated a share 
        of a State cane sugar allotment will be unable to 
        market the processor's allocation of the State's 
        allotment for the crop year--
                    ``(A) the Secretary first shall reassign 
                the estimated quantity of the deficit to the 
                allocations for other processors within that 
                State, depending on the capacity of each other 
                processor to fill the portion of the deficit to 
                be assigned to it and taking into account the 
                interests of producers served by the 
                processors;
                    ``(B) if after the reassignments the 
                deficit cannot be completely eliminated, the 
                Secretary shall reassign the estimated quantity 
                of the deficit proportionately to the 
                allotments for other cane sugar States, 
                depending on the capacity of each other State 
                to fill the portion of the deficit to be 
                assigned to it, with the reassigned quantity to 
                each State to be allocated among processors in 
                that State in proportion to the allocations of 
                the processors;
                    ``(C) if after the reassignments the 
                deficit cannot be completely eliminated, the 
                Secretary shall reassign the estimated quantity 
                of the deficit to the Commodity Credit 
                Corporation and shall sell such quantity of 
                sugar from inventories of the Corporation 
                unless the Secretary determines that such sales 
                would have a significant effect on the price of 
                sugar; and
                    ``(D) if after the reassignments and sales, 
                the deficit cannot be completely eliminated, 
                the Secretary shall reassign the remainder to 
                imports.
            ``(2) Beet sugar.--If the Secretary determines that 
        a sugar beet processor who has been allocated a share 
        of the beet sugar allotment will be unable to market 
        that allocation--
                    ``(A) the Secretary first shall reassign 
                the estimated quantity of the deficit to the 
                allotments for other sugar beet processors, 
                depending on the capacity of each other 
                processor to fill the portion of the deficit to 
                be assigned to it and taking into account the 
                interests of producers served by the 
                processors;
                    ``(B) if after the reassignments the 
                deficit cannot be completely eliminated, the 
                Secretary shall reassign the estimated quantity 
                of the deficit to the Commodity Credit 
                Corporation and shall sell such quantity of 
                sugar from inventories of the Corporation 
                unless the Secretary determines that such sales 
                would have a significant effect on the price of 
                sugar; and
                    ``(C) if after the reassignments and sales, 
                the deficit cannot be completely eliminated, 
                the Secretary shall reassign the remainder to 
                imports.
            ``(3) Corresponding increase.--The allocation of 
        each processor receiving a reassigned quantity of an 
        allotment under this subsection for a crop year shall 
        be increased to reflect the reassignment.

``SEC. 359F. PROVISIONS APPLICABLE TO PRODUCERS.

    ``(a) Processor Assurances.--
            ``(1) In general.--If allotments for a crop year 
        are allocated to processors under section 359d, the 
        Secretary shall obtain from the processors such 
        assurances as the Secretary considers adequate that the 
        allocation will be shared among producers served by the 
        processor in a fair and equitable manner that 
        adequately reflects producers' production histories.
            ``(2) Arbitration.--
                    ``(A) In general.--Any dispute between a 
                processor and a producer, or group of 
                producers, with respect to the sharing of the 
                allocation to the processor shall be resolved 
                through arbitration by the Secretary on the 
                request of either party.
                    ``(B) Period.--The arbitration shall, to 
                the maximum extent practicable, be--
                            ``(i) commenced not more than 45 
                        days after the request; and
                            ``(ii) completed not more than 60 
                        days after the request.
    ``(b) Sugar Beet Processing Facility Closures.--
            ``(1) In general.--If a sugar beet processing 
        facility is closed and the sugar beet growers that 
        previously delivered beets to the facility elect to 
        deliver their beets to another processing company, the 
        growers may petition the Secretary to modify 
        allocations under this part to allow the delivery.
            ``(2) Increased allocation for processing 
        company.--The Secretary may increase the allocation to 
        the processing company to which the growers elect to 
        deliver their sugar beets, with the approval of the 
        processing company, to a level that does not exceed the 
        processing capacity of the processing company, to 
        accommodate the change in deliveries.
            ``(3) Decreased allocation for closed company.--The 
        increased allocation shall be deducted from the 
        allocation to the company that owned the processing 
        facility that has been closed and the remaining 
        allocation shall be unaffected.
            ``(4) Timing.--The determinations of the Secretary 
        on the issues raised by the petition shall be made 
        within 60 days after the filing of the petition.
    ``(c) Proportionate Shares of Certain Allotments.--
            ``(1) In general.--
                    ``(A) States affected.--In any case in 
                which a State allotment is established under 
                section 359c(f) and there are in excess of 250 
                sugarcane producers in the State (other than 
                Puerto Rico), the Secretary shall make a 
                determination under subparagraph (B).
                    ``(B) Determination.--The Secretary shall 
                determine, for each State allotment described 
                in subparagraph (A), whether the production of 
                sugarcane, in the absence of proportionate 
                shares, will be greater than the quantity 
                needed to enable processors to fill the 
                allotment and provide a normal carryover 
                inventory of sugar.
            ``(2) Establishment of proportionate shares.--If 
        the Secretary determines under paragraph (1) that the 
        quantity of sugarcane produced by producers in the area 
        covered by a State allotment for a crop year will be in 
        excess of the quantity needed to enable processors to 
        fill the allotment for the crop year and provide a 
        normal carryover inventory of sugar, the Secretary 
        shall establish a proportionate share for each 
        sugarcane-producing farm that limits the acreage of 
        sugarcane that may be harvested on the farm for sugar 
        or seed during the crop year the allotment is in effect 
        as provided in this subsection. Each such proportionate 
        share shall be subject to adjustment under paragraph 
        (7) and section 359c(g).
            ``(3) Method of determining.--For purposes of 
        determining proportionate shares for any crop of 
        sugarcane:
                    ``(A) The Secretary shall establish the 
                State's per-acre yield goal for a crop of 
                sugarcane at a level (not less than the average 
                per-acre yield in the State for the 2 highest 
                years from among the 1999, 2000, and 2001 crop 
                years, as determined by the Secretary) that 
                will ensure an adequate net return per pound to 
                producers in the State, taking into 
                consideration any available production research 
                data that the Secretary considers relevant.
                    ``(B) The Secretary shall adjust the per-
                acre yield goal by the average recovery rate of 
                sugar produced from sugarcane by processors in 
                the State.
                    ``(C) The Secretary shall convert the State 
                allotment for the crop year involved into a 
                State acreage allotment for the crop by 
                dividing the State allotment by the per-acre 
                yield goal for the State, as established under 
                subparagraph (A) and as further adjusted under 
                subparagraph (B).
                    ``(D) The Secretary shall establish a 
                uniform reduction percentage for the crop by 
                dividing the State acreage allotment, as 
                determined for the crop under subparagraph (C), 
                by the sum of all adjusted acreage bases in the 
                State, as determined by the Secretary.
                    ``(E) The uniform reduction percentage for 
                the crop, as determined under subparagraph (D), 
                shall be applied to the acreage base for each 
                sugarcane-producing farm in the State to 
                determine the farm's proportionate share of 
                sugarcane acreage that may be harvested for 
                sugar or seed.
            ``(4) Acreage base.--For purposes of this 
        subsection, the acreage base for each sugarcane-
        producing farm shall be determined by the Secretary, as 
        follows:
                    ``(A) The acreage base for any farm shall 
                be the number of acres that is equal to the 
                average of the acreage planted and considered 
                planted for harvest for sugar or seed on the 
                farm in the 2 highest of the 1999, 2000, and 
                2001 crop years.
                    ``(B) Acreage planted to sugarcane that 
                producers on a farm were unable to harvest to 
                sugarcane for sugar or seed because of drought, 
                flood, other natural disaster, or other 
                condition beyond the control of the producers 
                may be considered as harvested for the 
                production of sugar or seed for purposes of 
                this paragraph.
            ``(5) Violation.--
                    ``(A) In general.--Whenever proportionate 
                shares are in effect in a State for a crop of 
                sugarcane, producers on a farm shall not 
                knowingly harvest, or allow to be harvested, 
                for sugar or seed an acreage of sugarcane in 
                excess of the farm's proportionate share for 
                the crop year, or otherwise violate 
                proportionate share regulations issued by the 
                Secretary under section 359h(a).
                    ``(B) Determination of violation.--No 
                producer shall be considered to have violated 
                subparagraph (A) unless the processor of the 
                sugarcane harvested by such producer from 
                acreage in excess of the proportionate share of 
                the farm markets an amount of sugar that 
                exceeds the allocation of such processor for a 
                crop year.
                    ``(C) Civil penalty.--Any producer on a 
                farm who violates subparagraph (A) by knowingly 
                harvesting, or allowing to be harvested, an 
                acreage of sugarcane in excess of the farm's 
                proportionate share shall be liable to the 
                Commodity Credit Corporation for a civil 
                penalty equal to one and one-half times the 
                United States market value of the quantity of 
                sugar that is marketed by the processor of such 
                sugarcane in excess of the allocation of such 
                processor for the crop year. The Secretary 
                shall prorate penalties imposed under this 
                subparagraph in a fair and equitable manner 
                among all the producers of sugarcane harvested 
                from excess acreage that is acquired by such 
                processor.
            ``(6) Waiver.--Notwithstanding the preceding 
        subparagraph, the Secretary may authorize the county 
        and State committees established under section 8(b) of 
        the Soil Conservation and Domestic Allotment Act (16 
        U.S.C. 590h(b)) to waive or modify deadlines and other 
        proportionate share requirements in cases in which 
        lateness or failure to meet the other requirements does 
        not affect adversely the operation of proportionate 
        shares.
            ``(7) Adjustments.--Whenever the Secretary 
        determines that, because of a natural disaster or other 
        condition beyond the control of producers that 
        adversely affects a crop of sugarcane subject to 
        proportionate shares, the amount of sugarcane produced 
        by producers subject to the proportionate shares will 
        not be sufficient to enable processors in the State to 
        meet the State's cane sugar allotment and provide a 
        normal carryover inventory of sugar, the Secretary may 
        uniformly allow producers to harvest an amount of 
        sugarcane in excess of their proportionate share, or 
        suspend proportionate shares entirely, as necessary to 
        enable processors to meet the State allotment and 
        provide a normal carryover inventory of sugar.
            ``(8) Processing facility closures.--
                    ``(A) In general.--If a sugarcane 
                processing facility subject to this subsection 
                is closed and the sugarcane growers that 
                delivered sugarcane to the facility prior to 
                closure elect to deliver their sugarcane to 
                another processing company, the growers may 
                petition the Secretary to modify allocations 
                under this part to allow the delivery.
                    ``(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.

``SEC. 359G. SPECIAL RULES.

    ``(a) Transfer of Acreage Base History.--For the purpose of 
establishing proportionate shares for sugarcane farms under 
section 359f(c), the Secretary, on application of any producer, 
with the written consent of all owners of a farm, may transfer 
the acreage base history of the farm to any other parcels of 
land of the applicant.
    ``(b) Preservation of Acreage Base History.--If for reasons 
beyond the control of a producer on a farm, the producer is 
unable to harvest an acreage of sugarcane for sugar or seed 
with respect to all or a portion of the proportionate share 
established for the farm under section 359f(c), the Secretary, 
on the application of the producer and with the written consent 
of all owners of the farm, may preserve for a period of not 
more than 5 consecutive years the acreage base history of the 
farm to the extent of the proportionate share involved. The 
Secretary may permit the proportionate share to be 
redistributed to other farms, but no acreage base history for 
purposes of establishing acreage bases shall accrue to the 
other farms by virtue of the redistribution of the 
proportionate share.
    ``(c) Revisions of Allocations and Proportionate Shares.--
The Secretary, after such notice as the Secretary by regulation 
may prescribe, may revise or amend any allocation of a 
marketing allotment under section 359d, or any proportionate 
share established or adjusted for a farm under section 359f(c), 
on the same basis as the initial allocation or proportionate 
share was required to be established.
    ``(d) Transfers of Mill Allocations.--
            ``(1) Transfer authorized.--A producer in a 
        proportionate share State, upon written consent from 
        all crop-share owners (or the representative of the 
        crop-share owners) of a farm, and from the processing 
        company holding the applicable allocation for such 
        shares, may deliver sugarcane to another processing 
        company if the additional delivery, when combined with 
        such other processing company's existing deliveries, 
        does not exceed the processing capacity of the company.
            ``(2) Allocation adjustment.--Notwithstanding 
        section 359d, the Secretary shall adjust the 
        allocations of each of such processing companies 
        affected by a transfer under paragraph (1) to reflect 
        the change in deliveries, based on the product of--
                    ``(A) the number of acres of proportionate 
                shares being transferred; and
                    ``(B) the State's per acre yield goal 
                established under section 359f(c)(3).

``SEC. 359H. REGULATIONS; VIOLATIONS; PUBLICATION OF SECRETARY'S 
                    DETERMINATIONS; JURISDICTION OF THE COURTS; UNITED 
                    STATES ATTORNEYS.

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

``SEC. 359I. APPEALS.

    ``(a) In General.--An appeal may be taken to the Secretary 
from any decision under section 359d establishing allocations 
of marketing allotments, or under section 359f, by any person 
adversely affected by reason of any such decision.
    ``(b) Procedure.--
            ``(1) Notice of appeal.--Any such appeal shall be 
        taken by filing with the Secretary, within 20 days 
        after the decision complained of is effective, notice 
        in writing of the appeal and a statement of the reasons 
        therefor. Unless a later date is specified by the 
        Secretary as part of the Secretary's decision, the 
        decision complained of shall be considered to be 
        effective as of the date on which announcement of the 
        decision is made. The Secretary shall deliver a copy of 
        any notice of appeal to each person shown by the 
        records of the Secretary to be adversely affected by 
        reason of the decision appealed, and shall at all times 
        thereafter permit any such person to inspect and make 
        copies of appellant's reasons for the appeal and shall 
        on application permit the person to intervene in the 
        appeal.
            ``(2) Hearing.--The Secretary shall provide each 
        appellant an opportunity for a hearing before an 
        administrative law judge in accordance with sections 
        554 and 556 of title 5, United States Code. The 
        expenses for conducting the hearing shall be reimbursed 
        by the Commodity Credit Corporation.
    ``(c) Special Appeal Process Regarding Beet Sugar 
Allocations.--
            ``(1) Appeal authorized.--Beginning after the 2006 
        crop year, a processor that has an allocation of the 
        beet sugar allotment under this part (referred to in 
        this subsection as a `petitioner') may file a notice of 
        appeal with the Secretary regarding the petitioner's 
        beet sugar allocation. Except as provided in paragraph 
        (2), the Secretary shall consider the appeal if the 
        notice alleges that any processor that has a beet sugar 
        allocation has failed to fill at least 82.5 percent of 
        its allocation of the beet sugar allotment with sugar 
        produced by it or received from the Commodity Credit 
        Corporation in 2 out of the 3 crop years preceding the 
        crop year in which the appeal is filed. A processor 
        that is alleged to have failed to fill at least 82.5 
        percent of its allocation shall be allowed to fully 
        participate in the appeal.
            ``(2) Exceptions.--An appeal under paragraph (1) 
        shall not be based on the failure of a processor to 
        fill at least 82.5 percent of its allocation because of 
        drought, flood, hail, or other weather disaster, as 
        determined by the Secretary. The determination by the 
        Secretary shall not require a formal disaster 
        declaration.
            ``(3) Response to appeal.--Upon the petitioner 
        making an appeal to the Secretary, and upon a review by 
        the Secretary of how processors have filled their 
        allocations, the Secretary may--
                    ``(A) assign an increased allocation for 
                beet sugar to the petitioner that provides a 
                fair and equitable distribution of the 
                allocations for beet sugar, taking into 
                account--
                            ``(i) production history during the 
                        period beginning on April 4, 1996, and 
                        through the date of enactment of the 
                        Farm Security and Rural Investment Act 
                        of 2002;
                            ``(ii) capital investment during 
                        that period;
                            ``(iii) increases in United States 
                        sugar consumption; and
                            ``(iv) the ability or inability of 
                        processors to fill the allocations they 
                        have received under this part; and
                    ``(B) reduce, correspondingly, the 
                allocation for beet sugar of each processor 
                determined to have failed to fill at least 82.5 
                percent of its allocation of the beet sugar 
                allotment as described in paragraph (1).
            ``(4) Filing deadline.--For purposes of the filing 
        deadline specified in subsection (b)(1), the 20-day 
        period shall commence on the date on which the 
        Secretary announces the allocations for the subsequent 
        crop year or October 1, whichever is earlier.

``SEC. 359J. ADMINISTRATION.

    ``(a) Use of Certain Agencies.--In carrying out this part, 
the Secretary may use the services of local committees of sugar 
beet or sugarcane producers, sugarcane processors, or sugar 
beet processors, State and county committees established under 
section 8(b) of the Soil Conservation and Domestic Allotment 
Act (16 U.S.C. 590h(b)), and the departments and agencies of 
the United States Government.
    ``(b) Use of Commodity Credit Corporation.--The Secretary 
shall use the services, facilities, funds, and authorities of 
the Commodity Credit Corporation to carry out this part.

``SEC. 359K. REALLOCATING SUGAR QUOTA IMPORT SHORTFALLS.

    ``(a) In General.--Notwithstanding any other provision of 
law, on or after June 1 of each of the 2002 through 2007 
calendar years, the United States Trade Representative, in 
consultation with the Secretary, shall determine the amount of 
the quota of cane sugar used by each qualified supplying 
country for that crop year, and may reallocate the unused quota 
for that crop year among qualified supplying countries.
    ``(b) Qualified Supplying Country Defined.--In this 
section, the term `qualified supplying country' means one of 
the following foreign countries that is allowed to export cane 
sugar to the United States under an agreement or any other 
country with which the United States has an agreement relating 
to the importation of cane sugar:

        Argentina
        Australia
        Barbados
        Belize
        Bolivia
        Brazil
        Colombia
        Republic of the Congo
        Costa Rica
        Dominican Republic
        Ecuador
        El Salvador
        Fiji
        Gabon
        Guatemala
        Guyana
        Haiti
        Honduras
        India
        Cote D'Ivoire, formerly known as the Ivory Coast
        Jamaica
        Madagascar
        Malawi
        Mauritius
        Mexico
        Mozambique
        Nicaragua
        Panama
        Papua New Guinea
        Paraguay
        Peru
        Philippines
        St. Kitts and Nevis
        South Africa
        Swaziland
        Taiwan
        Thailand
        Trinidad-Tobago
        Uruguay
        Zimbabwe.''.

                           Subtitle E--Dairy

SEC. 1501. MILK PRICE SUPPORT PROGRAM.

    (a) Support Activities.--During the period beginning on 
June 1, 2002, and ending on December 31, 2007, the Secretary of 
Agriculture shall support the price of milk produced in the 48 
contiguous States through the purchase of cheese, butter, and 
nonfat dry milk produced from the milk.
    (b) Rate.--During the period specified in subsection (a), 
the price of milk shall be supported at a rate equal to $9.90 
per hundredweight for milk containing 3.67 percent butterfat.
    (c) Purchase Prices.--
            (1) Uniform prices.--The support purchase prices 
        under this section for each of the products of milk 
        (butter, cheese, and nonfat dry milk) announced by the 
        Secretary shall be the same for all of that product 
        sold by persons offering to sell the product to the 
        Secretary.
            (2) Sufficient prices.--The purchase prices shall 
        be sufficient to enable plants of average efficiency to 
        pay producers, on average, a price that is not less 
        than the rate of price support for milk in effect under 
        subsection (b).
    (d) Special Rule for Butter and Nonfat Dry Milk Purchase 
Prices.--
            (1) Allocation of purchase prices.--The Secretary 
        may allocate the rate of price support between the 
        purchase prices for nonfat dry milk and butter in a 
        manner that will result in the lowest level of 
        expenditures by the Commodity Credit Corporation or 
        achieve such other objectives as the Secretary 
        considers appropriate. Not later than 10 days after 
        making or changing an allocation, the Secretary shall 
        notify the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate of the 
        allocation. Section 553 of title 5, United States Code, 
        shall not apply with respect to the implementation of 
        this section.
            (2) Timing of purchase price adjustments.--The 
        Secretary may make any such adjustments in the purchase 
        prices for nonfat dry milk and butter the Secretary 
        considers to be necessary not more than twice in each 
        calendar year.
    (e) Commodity Credit Corporation.--The Secretary shall 
carry out the program authorized by this section through the 
Commodity Credit Corporation.

SEC. 1502. NATIONAL DAIRY MARKET LOSS PAYMENTS.

    (a) Definitions.--In this section:
            (1) Class i milk.--The term ``Class I milk'' means 
        milk (including milk components) classified as Class I 
        milk under a Federal milk marketing order.
            (2) Eligible production.--The term ``eligible 
        production'' means milk produced by a producer in a 
        participating State.
            (3) Federal milk marketing order.--The term 
        ``Federal milk marketing order'' means an order issued 
        under section 8c of the Agricultural Adjustment Act (7 
        U.S.C. 608c), reenacted with amendments by the 
        Agricultural Marketing Agreement Act of 1937.
            (4) Participating state.--The term ``participating 
        State'' means each State.
            (5) Producer.--The term ``producer'' means an 
        individual or entity that directly or indirectly (as 
        determined by the Secretary)--
                    (A) shares in the risk of producing milk; 
                and
                    (B) makes contributions (including land, 
                labor, management, equipment, or capital) to 
                the dairy farming operation of the individual 
                or entity that are at least commensurate with 
                the share of the individual or entity of the 
                proceeds of the operation.
    (b) Payments.--The Secretary shall offer to enter into 
contracts with producers on a dairy farm located in a 
participating State under which the producers receive payments 
on eligible production.
    (c) Amount.--Payments to a producer under this section 
shall be calculated by multiplying (as determined by the 
Secretary)--
            (1) the payment quantity for the producer during 
        the applicable month established under subsection (d);
            (2) the amount equal to--
                    (A) $16.94 per hundredweight; less
                    (B) the Class I milk price per 
                hundredweight in Boston under the applicable 
                Federal milk marketing order; by
            (3) 45 percent.
    (d) Payment Quantity.--
            (1) In general.--Subject to paragraph (2), the 
        payment quantity for a producer during the applicable 
        month under this section shall be equal to the quantity 
        of eligible production marketed by the producer during 
        the month.
            (2) Limitation.--The payment quantity for all 
        producers on a single dairy operation during the months 
        of the applicable fiscal year for which the producers 
        receive payments under subsection (b) shall not exceed 
        2,400,000 pounds. For purposes of determining whether 
        producers are producers on separate dairy operations or 
        a single dairy operation, the Secretary shall apply the 
        same standards as were applied in implementing the 
        dairy program under section 805 of the Agriculture, 
        Rural Development, Food and Drug Administration, and 
        Related Agencies Appropriations Act, 2001 (as enacted 
        into law by Public Law 106-387; 114 Stat. 1549A-50).
            (3) Reconstitution.--The Secretary shall promulgate 
        regulations to ensure that a producer does not 
        reconstitute a dairy operation for the sole purpose of 
        receiving additional payments under this section.
    (e) Payments.--A payment under a contract under this 
section shall be made on a monthly basis not later than 60 days 
after the last day of the month for which the payment is made.
    (f) Signup.--The Secretary shall offer to enter into 
contracts under this section during the period beginning on the 
date that is 60 days after the date of enactment of this Act 
and ending on September 30, 2005.
    (g) Duration of Contract.--
            (1) In general.--Except as provided in paragraph 
        (2) and subsection (h), any contract entered into by 
        producers on a dairy farm under this section shall 
        cover eligible production marketed by the producers on 
        the dairy farm during the period starting with the 
        first day of month the producers on the dairy farm 
        enter into the contract and ending on September 30, 
        2005.
            (2) Violations.--If a producer violates the 
        contract, the Secretary may--
                    (A) terminate the contract and allow the 
                producer to retain any payments received under 
                the contract; or
                    (B) allow the contract to remain in effect 
                and require the producer to repay a portion of 
                the payments received under the contract based 
                on the severity of the violation.
    (h) Transition Rule.--In addition to any payment that is 
otherwise available under this section, if the producers on a 
dairy farm enter into a contract under this section, the 
Secretary shall make a payment in accordance with the formula 
specified in subsection (c) on the quantity of eligible 
production of the producer marketed during the period beginning 
on December 1, 2001, and ending on the last day of the month 
preceding the month the producers on the dairy farm entered 
into the contract.

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

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

SEC. 1504. DAIRY PRODUCT MANDATORY REPORTING.

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

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

    (a) Definitions.--Section 111 of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4502) is amended--
            (1) in subsection (k), by striking ``and'' at the 
        end;
            (2) in subsection (l), by striking the period at 
        the end and inserting a semicolon; and
            (3) by adding at the end the following:
            ``(m) the term `imported dairy product' means any 
        dairy product that is imported into the United States 
        (as defined in subsection (l)), including dairy 
        products imported into the United States in the form 
        of--
                    ``(1) milk, cream, and fresh and dried 
                dairy products;
                    ``(2) butter and butterfat mixtures;
                    ``(3) cheese; and
                    ``(4) casein and mixtures;
            ``(n) the term `importer' means a person that 
        imports an imported dairy product into the United 
        States; and
            ``(o) the term `Customs' means the United States 
        Customs Service.''.
    (b) Representation of Importers on Board.--Section 113(b) 
of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 
4504(b)) is amended--
            (1) by inserting ``National Dairy Promotion and 
        Research Board.--'' after ``(b)'';
            (2) by designating the first through ninth 
        sentences as paragraphs (1) through (5) and paragraphs 
        (7) through (10), respectively, and indenting the 
        paragraphs appropriately;
            (3) in paragraph (2) (as so designated), by 
        striking ``Members'' and inserting ``Except as provided 
        in paragraph (6), the members'';
            (4) by inserting after paragraph (5) (as so 
        designated) the following:
            ``(6) Importers.--
                    ``(A) Initial representation.--In making 
                initial appointments to the Board of importer 
                representatives, the Secretary shall appoint 2 
                members who represent importers of dairy 
                products and are subject to assessments under 
                the order.
                    ``(B) Subsequent representation.--At least 
                once every 3 years after the initial 
                appointment of importer representatives under 
                subparagraph (A), the Secretary shall review 
                the average volume of domestic production of 
                dairy products compared to the average volume 
                of imports of dairy products into the United 
                States during the previous 3 years and, on the 
                basis of that review, shall reapportion 
                importer representation on the Board to reflect 
                the proportional share of the United States 
                market by domestic production and imported 
                dairy products.
                    ``(C) Additional members; nominations.--The 
                members appointed under this paragraph--
                            ``(i) shall be in addition to the 
                        total number of members appointed under 
                        paragraph (2); and
                            ``(ii) shall be appointed from 
                        nominations submitted by importers 
                        under such procedures as the Secretary 
                        determines to be appropriate.''; and
            (5) in paragraph (8) (as so designated), by 
        striking ``is produced'' and inserting ``is produced as 
        well as importers of dairy products''.
    (c) Budgets.--Section 113(e) of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4504(e)) is amended--
            (1) by striking ``(e)'' and inserting:
    ``(e) Budgets.--
            ``(1) Preparation and submission.--'';
            (2) by striking the last sentence; and
            (3) by adding at the end the following:
            ``(2) Foreign market efforts.--The order shall 
        authorize the Board to expend in the maintenance and 
        expansion of foreign markets an amount not to exceed 
        the amount collected from United States producers for a 
        fiscal year. Of those funds, for each of the 2002 
        through 2007 fiscal years, the Board's budget may 
        provide for the expenditure of revenues available to 
        the Board to develop international markets for, and to 
        promote within such markets, the consumption of dairy 
        products produced or manufactured in the United 
        States.''.
    (d) Importer Assessment.--Section 113(g) of the Dairy 
Production Stabilization Act of 1983 (7 U.S.C. 4504(g)) is 
amended--
            (1) by inserting ``Assessments.--'' after ``(g)'';
            (2) by designating the first through fifth 
        sentences as paragraphs (1) through (5), respectively, 
        and indenting appropriately;
            (3) in paragraph (3) (as so designated)--
                    (A) by inserting ``for milk produced in the 
                United States and imported dairy products'' 
                after ``The rate of assessment''; and
                    (B) by inserting before the period at the 
                end the following: ``, as determined by the 
                Secretary''; and
            (4) by adding at the end the following:
            ``(6) Importers.--
                    ``(A) In general.--The order shall provide 
                that each importer of imported dairy products 
                shall pay an assessment to the Board in the 
                manner prescribed by the order.
                    ``(B) Time for payment.--The assessment on 
                imported dairy products shall be paid by the 
                importer to Customs at the time the entry 
                documents are filed with Customs. Customs shall 
                remit the assessments to the Board. For 
                purposes of this subparagraph, the term 
                `importer' includes persons who hold title to 
                foreign-produced dairy products immediately 
                upon release by Customs, as well as persons who 
                act on behalf of others, as agents, brokers, or 
                consignees, to secure the release of dairy 
                products from Customs.
                    ``(C) Use of assessments on imported dairy 
                products.--Assessments collected on imported 
                dairy products shall not be used for foreign 
                market promotion.''.
    (e) Records.--Section 113(k) of the Dairy Production 
Stabilization Act of 1983 (7 U.S.C. 4504(k)) is amended in the 
first sentence by striking ``person receiving'' and inserting 
``importer of imported dairy products, each person receiving''.
    (f) Importer Eligibility To Vote in Referendum.--Section 
116(b) of the Dairy Promotion Stabilization Act of 1983 (7 
U.S.C. 4507(b)) is amended--
            (1) in the first sentence--
                    (A) by inserting after ``of producers'' the 
                following: ``and importers''; and
                    (B) by inserting after ``the producers'' 
                the following: ``and importers''; and
            (2) in the second sentence, by inserting after 
        ``commercial use'' the following: ``and importers 
        voting in the referendum (who have been engaged in the 
        importation of dairy products during the same 
        representative period, as determined by the 
        Secretary)''.
    (g) Order Implementation and International Trade 
Obligations.--Section 112 of the Dairy Promotion Stabilization 
Act of 1983 (7 U.S.C. 4503) is amended by adding at the end the 
following:
    ``(d) Order Implementation and International Trade 
Obligations.--The Secretary, in consultation with the United 
States Trade Representative, shall ensure that the order is 
implemented in a manner consistent with the international trade 
obligations of the Federal Government.''.
    (h) Conforming Amendments To Reflect Addition of 
Importers.--The Dairy Production Stabilization Act of 1983 is 
amended--
            (1) in section 110(b) (7 U.S.C. 4501(b))--
                    (A) in the first sentence--
                            (i) by inserting after ``commercial 
                        use'' the following: ``and on imported 
                        dairy products''; and
                            (ii) by striking ``products 
                        produced in the United States.'' and 
                        inserting ``products.''; and
                    (B) in the second sentence, by inserting 
                after ``produce milk'' the following: ``or the 
                right of any person to import dairy products''; 
                and
            (2) in section 111(d) (7 U.S.C. 4502(d)), by 
        striking ``produced in the United States''.

SEC. 1506. FLUID MILK PROMOTION.

    (a) Definition of Fluid Milk Product.--Section 1999C of the 
Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402) is amended by 
striking paragraph (3) and inserting the following:
            ``(3) Fluid milk product.--The term `fluid milk 
        product' has the meaning given the term in--
                    ``(A) section 1000.15 of title 7, Code of 
                Federal Regulations, subject to such amendments 
                as may be made by the Secretary; or
                    ``(B) any successor regulation.''.
    (b) Definition of Fluid Milk Processor.--Section 1999C(4) 
of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6402(4)) is 
amended by striking ``500,000 pounds of fluid milk products in 
consumer-type packages per month'' and inserting ``3,000,000 
pounds of fluid milk products in consumer-type packages per 
month (excluding products delivered directly to the place of 
residence of a consumer)''.
    (c) Elimination of Order Termination Date.--Section 1999O 
of the Fluid Milk Promotion Act of 1990 (7 U.S.C. 6414) is 
amended--
            (1) by striking subsection (a); and
            (2) by redesignating subsections (b) and (c) as 
        subsections (a) and (b), respectively.

SEC. 1507. STUDY OF NATIONAL DAIRY POLICY.

    (a) Study Required.--The Secretary of Agriculture shall 
conduct a comprehensive economic evaluation of the potential 
direct and indirect effects of the various elements of the 
national dairy policy, including an examination of the effect 
of the national dairy policy on--
            (1) farm price stability, farm profitability and 
        viability, and local rural economies in the United 
        States;
            (2) child, senior, and low-income nutrition 
        programs, including impacts on schools and institutions 
        participating in the programs, on program recipients, 
        and other factors; and
            (3) the wholesale and retail cost of fluid milk, 
        dairy farms, and milk utilization.
    (b) Report.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to the 
Committee on Agriculture of the House of Representatives and 
the Committee on Agriculture, Nutrition, and Forestry of the 
Senate a report describing the results of the study required by 
this section.
    (c) National Dairy Policy Defined.--In this section, the 
term ``national dairy policy'' means the dairy policy of the 
United States as evidenced by the following policies and 
programs:
            (1) Federal milk marketing orders issued under 
        section 8c of the Agricultural Adjustment Act (7 U.S.C. 
        608c), reenacted with amendments by the Agricultural 
        Marketing Act of 1937.
            (2) Interstate dairy compacts (including proposed 
        compacts described in H.R. 1827 and S. 1157, as 
        introduced in the 107th Congress).
            (3) Over-order premiums and State pricing programs.
            (4) Direct payments to milk producers.
            (5) Federal milk price support program established 
        under section 1401.
            (6) Export programs regarding milk and dairy 
        products, such as the dairy export incentive program 
        established under section 153 of the Food Security Act 
        of 1985 (15 U.S.C. 713a-14).

SEC. 1508. STUDIES OF EFFECTS OF CHANGES IN APPROACH TO NATIONAL DAIRY 
                    POLICY AND FLUID MILK IDENTITY STANDARDS.

    (a) Federal Dairy Policy Changes.--The Secretary of 
Agriculture shall conduct a study of the effects of--
            (1) terminating all Federal programs relating to 
        price support and supply management for milk; and
            (2) granting the consent of Congress to cooperative 
        efforts by States to manage milk prices and supply.
    (b) Fluid Milk Identity Standards.--The Secretary shall 
conduct a study of the effects of including in the standard of 
identity for fluid milk a required minimum protein content that 
is commensurate with the average nonfat solids content of 
bovine milk produced in the United States.
    (c) Reports.--Not later than 1 year after the date of 
enactment of this Act, the Secretary shall submit to the 
Committee on Agriculture of the House of Representatives and 
the Committee on Agriculture, Nutrition, and Forestry of the 
Senate a report describing the results of the studies required 
by this section.

                       Subtitle F--Administration

SEC. 1601. ADMINISTRATION GENERALLY.

    (a) Use of Commodity Credit Corporation.--The Secretary 
shall use the funds, facilities, and authorities of the 
Commodity Credit Corporation to carry out this title.
    (b) Determinations by Secretary.--A determination made by 
the Secretary under this title shall be final and conclusive.
    (c) Regulations.--
            (1) In general.--Not later than 90 days after the 
        date of the enactment of this Act, the Secretary and 
        the Commodity Credit Corporation, as appropriate, shall 
        promulgate such regulations as are necessary to 
        implement this title.
            (2) Procedure.--The promulgation of the regulations 
        and administration of this title shall be made without 
        regard to--
                    (A) chapter 35 of title 44, United States 
                Code (commonly know as the ``Paperwork 
                Reduction Act'');
                    (B) the Statement of Policy of the 
                Secretary of Agriculture effective July 24, 
                1971 (36 Fed. Reg. 13804), relating to notices 
                of proposed rulemaking and public participation 
                in rulemaking; and
                    (C) the notice and comment provisions of 
                section 553 of title 5, United States Code.
            (3) Congressional review of agency rulemaking.--In 
        carrying out this subsection, the Secretary shall use 
        the authority provided under section 808 of title 5, 
        United States Code.
    (d) Treatment of Advance Payment Option.--The protection 
that was afforded producers that had an option to elect to 
accelerate the receipt of any payment under a production 
flexibility contract payable under the Federal Agriculture 
Improvement and Reform Act of 1996, as provided by section 525 
of Public 106-170 (113 Stat. 1928; 7 U.S.C. 7212 note), shall 
also apply to the option to receive--
            (1) the advance payment of direct payments and 
        counter-cyclical payments under subtitle A and subtitle 
        C; and
            (2) the single payment of compensation for eligible 
        peanut quota holders under section 1310.
    (e) Adjustment Authority Related to Uruguay Round 
Compliance.--
            (1) Required determination; adjustment.--If the 
        Secretary determines that expenditures under subtitles 
        A through E that are subject to the total allowable 
        domestic support levels under the Uruguay Round 
        Agreements (as defined in section 2 of the Uruguay 
        Round Agreements Act (19 U.S.C. 3501)), as in effect on 
        the date of enactment of this Act, will exceed such 
        allowable levels for any applicable reporting period, 
        the Secretary shall, to the maximum extent practicable, 
        make adjustments in the amount of such expenditures 
        during that period to ensure that such expenditures do 
        not exceed such allowable levels.
            (2) Congressional notification.--Before making any 
        adjustment under paragraph (1), the Secretary shall 
        submit to the Committee on Agriculture, Nutrition, and 
        Forestry of the Senate and the Committee on Agriculture 
        of the House of Representatives a report describing the 
        determination made under that paragraph and the extent 
        of the adjustment to be made.

SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

    (a) Agricultural Adjustment Act of 1938.--The following 
provisions of the Agricultural Adjustment Act of 1938 shall not 
be applicable to the 2002 through 2007 crops of covered 
commodities, peanuts, and sugar and shall not be applicable to 
milk during the period beginning on the date of enactment of 
this Act through December 31, 2007:
            (1) Parts II through V of subtitle B of title III 
        (7 U.S.C. 1326-1351).
            (2) In the case of upland cotton, section 377 (7 
        U.S.C. 1377).
            (3) Subtitle D of title III (7 U.S.C. 1379a-1379j).
            (4) Title IV (7 U.S.C. 1401-1407).
    (b) Agricultural Act of 1949.--The following provisions of 
the Agricultural Act of 1949 shall not be applicable to the 
2002 through 2007 crops of covered commodities, peanuts, and 
sugar and shall not be applicable to milk during the period 
beginning on the date of enactment of this Act and through 
December 31, 2007:
            (1) Section 101 (7 U.S.C. 1441).
            (2) Section 103(a) (7 U.S.C. 1444(a)).
            (3) Section 105 (7 U.S.C. 1444b).
            (4) Section 107 (7 U.S.C. 1445a).
            (5) Section 110 (7 U.S.C. 1445e).
            (6) Section 112 (7 U.S.C. 1445g).
            (7) Section 115 (7 U.S.C. 1445k).
            (8) Section 201 (7 U.S.C. 1446).
            (9) Title III (7 U.S.C. 1447-1449).
            (10) Title IV (7 U.S.C. 1421-1433d), other than 
        sections 404, 412, and 416 (7 U.S.C. 1424, 1429, and 
        1431).
            (11) Title V (7 U.S.C. 1461-1469).
            (12) Title VI (7 U.S.C. 1471-1471j).
    (c) Suspension of Certain Quota Provisions.--The joint 
resolution entitled ``A joint resolution relating to corn and 
wheat marketing quotas under the Agricultural Adjustment Act of 
1938, as amended'', approved May 26, 1941 (7 U.S.C. 1330 and 
1340), shall not be applicable to the crops of wheat planted 
for harvest in the calendar years 2002 through 2007.
    (d) Conforming Amendment.--Section 171(a)(1) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7301(a)(1)) is amended by striking ``2002'' the first place 
appears and inserting ``2001''.

SEC. 1603. PAYMENT LIMITATIONS.

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

``SEC. 1001. PAYMENT LIMITATIONS.

    ``(a) Definitions.--In this section:
            ``(1) Covered commodity.--The term `covered 
        commodity' has the meaning given that term in section 
        1001 of the Farm Security and Rural Investment Act of 
        2002.
            ``(2) Loan commodity.--The term `loan commodity' 
        has the meaning given that term in section 1001 of the 
        Farm Security and Rural Investment Act of 2002, except 
        that the term does not include wool, mohair, or honey.
            ``(3) Secretary.--The term `Secretary' means the 
        Secretary of Agriculture.
    ``(b) Limitation on Direct Payments.--
            ``(1) Covered commodities.--The total amount of 
        direct payments made to a person during any crop year 
        under subtitle A of title I of the Farm Security and 
        Rural Investment Act of 2002 for 1 or more covered 
        commodities may not exceed $40,000.
            ``(2) Peanuts.--The total amount of direct payments 
        made to a person during any crop year under subtitle C 
        of title I of the Farm Security and Rural Investment 
        Act of 2002 may not exceed $40,000.
    ``(c) Limitation on Counter-Cyclical Payments.--
            ``(1) Covered commodities.--The total amount of 
        counter-cyclical payments made to a person during any 
        crop year under subtitle A of title I of the Farm 
        Security and Rural Investment Act of 2002 for 1 or more 
        covered commodities may not exceed $65,000.
            ``(2) Peanuts.--The total amount of counter-
        cyclical payments made to a person during any crop year 
        under subtitle C of title I of the Farm Security and 
        Rural Investment Act of 2002 may not exceed $65,000.
    ``(d) Limitation on Marketing Loan Gains and Loan 
Deficiency Payments.--
            ``(1) Loan commodities.--The total amount of the 
        following gains and payments that a person may receive 
        during any crop year may not exceed $75,000:
                    ``(A) Any gain realized by a producer from 
                repaying a marketing assistance loan for 1 or 
                more loan commodities under subtitle B of title 
                I of the Farm Security and Rural Investment Act 
                of 2002 at a lower level than the original loan 
                rate established for the loan commodity under 
                that subtitle.
                    ``(B) Any loan deficiency payments received 
                for 1 or more loan commodities under that 
                subtitle.
            ``(2) Other commodities.--The total amount of the 
        following gains and payments that a person may receive 
        during any crop year may not exceed $75,000:
                    ``(A) Any gain realized by a producer from 
                repaying a marketing assistance loan for 
                peanuts, wool, mohair, or honey under subtitle 
                B or C of title I of the Farm Security and 
                Rural Investment Act of 2002 at a lower level 
                than the original loan rate established for the 
                commodity under those subtitles.
                    ``(B) Any loan deficiency payments received 
                for peanuts, wool, mohair, and honey under 
                those subtitles.''.
    (b) Clerical and Conforming Amendments to Section 1001.--
Section 1001 of the Food Security Act of 1985 (7 U.S.C. 1308) 
is amended--
            (1) in paragraph (5)--
                    (A) by striking ``(5)'' and inserting ``(e) 
                Definition of Person.--''
                    (B) by redesignating subparagraphs (A) 
                through (E) as paragraphs (1) through (5), 
                respectively;
                    (C) in paragraph (1), as so redesignated--
                            (i) by redesignating clauses (i) 
                        and (ii) as subparagraphs (A) and (B), 
                        respectively; and
                            (ii) by striking the second 
                        sentence; and
                    (D) in paragraph (2), as so redesignated--
                            (i) by redesignating clause (i) as 
                        subparagraph (A) and, in such 
                        subparagraph (as so redesignated)--
                                    (I) by striking 
                                ``subparagraph (A), subject to 
                                clause (ii)'' and inserting 
                                ``paragraph (1), subject to 
                                subparagraph (B)''; and
                                    (II) by redesignating 
                                subclauses (I), (II), and 
                                (III), as clauses (i), (ii), 
                                and (iii), respectively;
                            (ii) by redesignating clause (ii) 
                        as subparagraph (B) and, in such 
                        subparagraph (as so redesignated), by 
                        redesignating subclauses (I), (II), and 
                        (III), as clauses (i), (ii), and (iii), 
                        respectively; and
                            (iii) by redesignating clause (iii) 
                        as subparagraph (C) and, in such 
                        subparagraph (as so redesignated)--
                                    (I) by striking ``as 
                                described in paragraphs (1) and 
                                (2)'' and inserting ``as 
                                described in subsections (b), 
                                (c), and (d)''; and
                                    (II) by redesignating 
                                subclauses (I) and (II) as 
                                clauses (i) and (ii), 
                                respectively;
            (2) in paragraph (6), by striking ``(6)'' and 
        inserting ``(f) Public Schools.--''; and
            (3) in paragraph (7), by striking ``(7)'' and 
        inserting ``(g) Time Limits; Reliance.--''.
    (c) Conforming Amendments to Other laws.--
            (1) Section 1001A of the Food Security Act of 1985 
        (7 U.S.C. 1308-1) is amended--
                    (A) in subsections (a)(1) and (b)(2)(B), by 
                striking ``section 1001(5)(B)(i)(II)'' and 
                inserting ``section 1001(e)(2)(A)(ii)''; and
                    (B) in subsections (a)(1) and (b)(1), by 
                striking ``section 1001(5)(B)(i)'' and 
                inserting ``section 1001(e)(2)(A)''; and
            (2) Section 1001B of the Food Security Act of 1985 
        (7 U.S.C. 1308-2) is amended by striking ``as described 
        in paragraphs (1) and (2)'' and inserting ``as 
        described in subsections (b), (c), and (d)''.
            (3) Section 1001C(a) of the Food Security Act of 
        1985 (7 U.S.C. 1308-3(a)) is amended by inserting 
        ``title I of the Farm Security and Rural Investment Act 
        of 2002,'' after ``made available under''.
    (d) Transition.--Section 1001 of the Food Security Act of 
1985 (7 U.S.C. 1308), as in effect on the day before the date 
of the enactment of this Act, shall continue to apply with 
respect to the 2001 crop of any covered commodity.

SEC. 1604. ADJUSTED GROSS INCOME LIMITATION.

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

``SEC. 1001D. ADJUSTED GROSS INCOME LIMITATION.

    ``(a) Definition of Average Adjusted Gross Income.--
            ``(1) In general.--In this section, the term 
        `average adjusted gross income', with respect to an 
        individual or entity (for purposes of this section, as 
        defined in section 1001(e)(2)(A)(ii)), means the 3-year 
        average of the adjusted gross income or comparable 
        measure of the individual or entity over the 3 
        preceding tax years, as determined by the Secretary.
            ``(2) Special rules for certain individuals and 
        entities.--In the case of an entity that is not 
        required to file a Federal income tax return or an 
        individual or entity that did not have taxable income 
        in 1 or more of the tax years used to determine the 
        average under paragraph (1), the Secretary shall 
        provide, by regulation, a method for determining the 
        average adjusted gross income of the individual or 
        entity for purposes of this section.
    ``(b) Limitation.--
            ``(1) In general.--Notwithstanding any other 
        provision of law, an individual or entity shall not be 
        eligible to receive any benefit described in paragraph 
        (2) during a crop year if the average adjusted gross 
        income of the individual or entity exceeds $2,500,000, 
        unless not less than 75 percent of the average adjusted 
        gross income of the individual or entity is derived 
        from farming, ranching, or forestry operations, as 
        determined by the Secretary.
            ``(2) Covered benefits.--Paragraph (1) applies with 
        respect to the following:
                    ``(A) A direct payment or counter-cyclical 
                payment under subtitle A or C of title I of the 
                Farm Security and Rural Investment Act of 2002.
                    ``(B) A marketing loan gain or payment 
                described in section 1001(d) of this Act.
                    ``(C) A payment under any program under 
                title XII of this Act or title II of the Farm 
                Security and Rural Investment Act of 2002.
    ``(c) Certification.--To comply with the limitation under 
subsection (b), an individual or entity shall provide to the 
Secretary--
            ``(1) a certification by a certified public 
        accountant or another third party that is acceptable to 
        the Secretary that the average adjusted gross income of 
        the individual or entity does not exceed the limitation 
        specified in that subsection; or
            ``(2) information and documentation regarding the 
        adjusted gross income of the individual or entity 
        through other procedures established by the Secretary.
    ``(d) Commensurate Reduction.--In the case of a benefit 
described in subsection (b)(2) made in a crop year to an 
entity, general partnership, or joint venture, the amount of 
the benefit shall be reduced by an amount that is commensurate 
with the direct and indirect ownership interest in the entity, 
general partnership, or joint venture of each individual who 
has an average adjusted gross income in excess of the 
limitation specified in subsection (b) for the average of the 3 
preceding crop years.
    ``(e) Effective Period.--This section shall apply only 
during the 2003 through 2007 crop years.''.

SEC. 1605. COMMISSION ON APPLICATION OF PAYMENT LIMITATIONS.

    (a) Establishment.--There is established a commission to be 
known as the ``Commission on the Application of Payment 
Limitations for Agriculture'' (referred to in this section as 
the ``Commission'').
    (b) Duties.--The Commission shall conduct a study on the 
potential impacts of further payment limitations on the receipt 
of direct payments, counter-cyclical payments, and marketing 
loan gains and loan deficiency payments on--
            (1) farm income;
            (2) land values;
            (3) rural communities;
            (4) agribusiness infrastructure;
            (5) planting decisions of producers affected; and
            (6) supply and prices of covered commodities, loan 
        commodities, specialty crops (including fruits and 
        vegetables), and other agricultural commodities.
    (c) Membership.--
            (1) Composition.--The Commission shall be composed 
        of 10 members as follows:
                    (A) 3 members appointed by the Secretary.
                    (B) 3 members appointed by the Committee on 
                Agriculture, Nutrition, and Forestry of the 
                Senate.
                    (C) 3 members appointed by the Committee on 
                Agriculture of the House of Representatives.
                    (D) The Chief Economist of the Department 
                of Agriculture.
            (2) Federal government employment.--The membership 
        of the Commission may include 1 or more employees of 
        the Department of Agriculture or other Federal 
        agencies.
            (3) Date of appointments.--The appointment of a 
        member of the Commission shall be made not later than 
        60 days after the date of enactment of this Act.
            (4) Term; vacancies.--
                    (A) Term.--A member shall be appointed for 
                the life of the Commission.
                    (B) Vacancies.--A vacancy on the 
                Commission--
                            (i) shall not affect the powers of 
                        the Commission; and
                            (ii) shall be filled in the same 
                        manner as the original appointment was 
                        made.
            (5) Initial meeting.--Not later than 30 days after 
        the date on which all members of the Commission have 
        been appointed, the Commission shall hold the initial 
        meeting of the Commission.
    (d) Quorum.--A majority of the members of the Commission 
shall constitute a quorum for the transaction of business, but 
a lesser number of members may hold hearings.
    (e) Chairperson.--The Secretary shall appoint 1 of the 
members of the Commission to serve as Chairperson of the 
Commission.
    (f) Report.--Not later than 1 year after the date of 
enactment of this Act, the Commission shall submit to the 
President, the Committee on Agriculture of the House of 
Representatives, and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate a report containing the results of 
the study required by subsection (b), including such 
recommendations as the Commission considers appropriate.
    (g) Hearings.--The Commission may hold such hearings, meet 
and act at such times and places, take such testimony, and 
receive such evidence as the Commission considers advisable to 
carry out this section.
    (h) Information From Federal Agencies.--The Commission may 
secure directly from a Federal agency such information as the 
Commission considers necessary to carry out this section. On 
request of the Chairperson of the Commission, the head of the 
agency shall provide the information to the Commission.
    (i) Postal Services.--The Commission may use the United 
States mails in the same manner and under the same conditions 
as other agencies of the Federal Government.
    (j) Assistance From Secretary.--The Secretary may provide 
to the Commission appropriate office space and such reasonable 
administrative and support services as the Commission may 
request.
    (k) Compensation of Members.--
            (1) Non-federal employees.--A member of the 
        Commission who is not an officer or employee of the 
        Federal Government shall be compensated at a rate equal 
        to the daily equivalent of the annual rate of basic pay 
        prescribed for level IV of the Executive Schedule under 
        section 5315 of title 5, United States Code, for each 
        day (including travel time) during which the member is 
        engaged in the performance of the duties of the 
        Commission.
            (2) Federal employees.--A member of the Commission 
        who is an officer or employee of the Federal Government 
        shall serve without compensation in addition to the 
        compensation received for the services of the member as 
        an officer or employee of the Federal Government.
            (3) Travel expenses.--A member of the Commission 
        shall be allowed travel expenses, including per diem in 
        lieu of subsistence, at rates authorized for an 
        employee of an agency under subchapter I of chapter 57 
        of title 5, United States Code, while away from the 
        home or regular place of business of the member in the 
        performance of the duties of the Commission.
    (l) Federal Advisory Committee Act.--The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not apply to the Commission 
or any proceeding of the Commission.

SEC. 1606. ADJUSTMENTS OF LOANS.

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

SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

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

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

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

SEC. 1609. COMMODITY CREDIT CORPORATION INVENTORY.

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

SEC. 1610. RESERVE STOCK LEVEL.

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

SEC. 1611. FARM RECONSTITUTIONS.

    (a) In General.--Section 316(a)(1)(A)(ii) of the 
Agricultural Adjustment Act of 1938 (7 U.S.C. 
1314b(a)(1)(A)(ii)) is amended by adding at the end the 
following: ``Notwithstanding any other provision of law, for 
the 2002 crop only, the Secretary shall allow special farm 
reconstitutions, in lieu of lease and transfer of allotments 
and quotas, under this section, in accordance with such 
conditions as are established by the Secretary.''.
    (b) Study.--
            (1) In general.--The Secretary shall conduct a 
        study on the effects on the limitation on producers to 
        move quota to a farm other than the farm to which the 
        quota was initially assigned under part I of subtitle B 
        of title III of the Agricultural Adjustment Act of 1938 
        (7 U.S.C. 1311 et seq.).
            (2) Report.--Not later than 90 days after the date 
        of enactment of this Act, the Secretary shall submit to 
        the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report on the 
        results of the study.

SEC. 1612. ASSIGNMENT OF PAYMENTS.

    The provisions of section 8(g) of the Soil Conservation and 
Domestic Allotment Act (16 U.S.C. 590h(g)), relating to 
assignment of payments, shall apply to payments made under the 
authority of this Act. The producer making the assignment, or 
the assignee, shall provide the Secretary with notice, in such 
manner as the Secretary may require, of any assignment made 
under this section.

SEC. 1613. EQUITABLE RELIEF FROM INELIGIBILITY FOR LOANS, PAYMENTS, OR 
                    OTHER BENEFITS.

    (a) Definitions.--In this section:
            (1) Agricultural commodity.--The term 
        ``agricultural commodity'' means any agricultural 
        commodity, food, feed, fiber, or livestock that is 
        subject to a covered program.
            (2) Covered program.--
                    (A) In general.--The term ``covered 
                program'' means--
                            (i) a program administered by the 
                        Secretary under which price or income 
                        support, or production or market loss 
                        assistance, is provided to producers of 
                        agricultural commodities; and
                            (ii) a conservation program 
                        administered by the Secretary.
                    (B) Exclusions.--The term ``covered 
                program'' does not include--
                            (i) an agricultural credit program 
                        carried out under the Consolidated Farm 
                        and Rural Development Act (7 U.S.C. 
                        1921 et seq.); or
                            (ii) the crop insurance program 
                        carried out under the Federal Crop 
                        Insurance Act (7 U.S.C. 1501 et seq.).
            (3) Participant.--The term ``participant'' means a 
        participant in a covered program.
            (4) State conservationist.--The term ``State 
        Conservationist'' means the State Conservationist with 
        respect to a program administered by the Natural 
        Resources Conservation Service.
            (5) State director.--The term ``State Director'' 
        means the State Executive Director of the Farm Service 
        Agency with respect to a program administered by the 
        Farm Service Agency.
    (b) Equitable Relief.--The Secretary may provide relief to 
any participant that is determined to be not in compliance with 
the requirements of a covered program, and therefore ineligible 
for a loan, payment, or other benefit under the covered 
program, if the participant--
            (1) acting in good faith, relied on the action or 
        advice of the Secretary (including any authorized 
        representative of the Secretary) to the detriment of 
        the participant; or
            (2) failed to comply fully with the requirements of 
        the covered program, but made a good faith effort to 
        comply with the requirements.
    (c) Forms of Relief.--The Secretary may authorize a 
participant in a covered program to--
            (1) retain loans, payments, or other benefits 
        received under the covered program;
            (2) continue to receive loans, payments, and other 
        benefits under the covered program;
            (3) continue to participate, in whole or in part, 
        under any contract executed under the covered program;
            (4) in the case of a conservation program, reenroll 
        all or part of the land covered by the program; and
            (5) receive such other equitable relief as the 
        Secretary determines to be appropriate.
    (d) Remedial Action.--As a condition of receiving relief 
under this section, the Secretary may require the participant 
to take actions designed to remedy any failure to comply with 
the covered program.
    (e) Equitable Relief by State Directors and State 
Conservationists.--
            (1) In general.--A State Director, in the case of 
        programs administered by the State Director, and the 
        State Conservationist, in the case of programs 
        administered by the State Conservationist, may grant 
        relief to a participant in accordance with subsections 
        (b) through (d) if--
                    (A) the amount of loans, payments, and 
                benefits for which relief will be provided to 
                the participant under this subsection is less 
                than $20,000;
                    (B) the total amount of loans, payments, 
                and benefits for which relief has been 
                previously provided to the participant under 
                this subsection is not more than $5,000; and
                    (C) the total amount of loans, payments, 
                and benefits for which relief is provided to 
                similarly situated participants under this 
                subsection is not more than $1,000,000, as 
                determined by the Secretary.
            (2) Consultation, approval, and reversal.--The 
        decision by a State Director or State Conservationist 
        to grant relief under this subsection--
                    (A) shall not require prior approval by the 
                Administrator of the Farm Service Agency, the 
                Chief of the Natural Resources Conservation 
                Service, or any other officer or employee of 
                the Agency or Service;
                    (B) shall be made only after consultation 
                with, and the approval of, the Office of 
                General Counsel of the Department of 
                Agriculture; and
                    (C) is subject to reversal only by the 
                Secretary (who may not delegate the reversal 
                authority).
            (3) Nonapplicability.--The authority of a State 
        Director or State Conservationist under this subsection 
        does not apply to the administration of--
                    (A) payment limitations under--
                            (i) sections 1001 through 1001F of 
                        the Food Security Act of 1985 (7 U.S.C. 
                        1308 et seq.); or
                            (ii) a conservation program 
                        administered by the Secretary.
                    (B) highly erodible land and wetland 
                conservation requirements under subtitle B or C 
                of title XII of the Food Security Act of 1985 
                (16 U.S.C. 3811 et seq.).
            (4) Other authority.--The authority provided to a 
        State Director and State Conservationist under this 
        subsection is in addition to any other applicable 
        authority and does not limit other authority provided 
        by law or the Secretary.
    (f) Judicial Review.--A discretionary decision by the 
Secretary, the State Director, or the State Conservationist 
under this section shall be final, and shall not be subject to 
review under chapter 7 of title 5, United States Code.
    (g) Reports.--Not later than February 1 of each year, the 
Secretary shall submit to the Committee on Agriculture of the 
House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report that describes 
for the previous calendar year--
            (1) the number of requests for equitable relief 
        under subsections (b) and (e) and the disposition of 
        the requests; and
            (2) the number of requests for equitable relief 
        under section 278(d) of the Department of Agriculture 
        Reorganization Act of 1994 (7 U.S.C. 6998(d)) and the 
        disposition of the requests.
    (h) Relationship to Other Law.--The authority provided in 
this section is in addition to any other authority provided in 
this or any other Act.
    (i) Finality Rule.--Section 281(a) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 7001(a)) is 
amended--
            (1) by striking ``Consolidated Farm Service 
        Agency'' each place it appears and inserting ``Farm 
        Service Agency'';
            (2) in paragraph (1)--
                    (A) by striking ``This subsection'' and 
                inserting the following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), this subsection''; and
                    (B) by adding at the end the following:
                    ``(B) Nonapplicability.--This subsection 
                does not apply to--
                            ``(i) a function performed under 
                        section 376 of the Consolidated Farm 
                        and Rural Development Act; or
                            ``(ii) a function performed under a 
                        conservation program administered by 
                        the Natural Resources Conservation 
                        Service.''; and
            (3) in paragraph (2), by inserting ``, before the 
        end of the 90-day period,'' after ``unless the 
        decision''.
    (j) Conforming Amendments.--
            (1) Section 326 of the Food and Agriculture Act of 
        1962 (7 U.S.C. 1339a) is repealed.
            (2) Section 278(d) of the Department of Agriculture 
        Reorganization Act of 1994 (7 U.S.C. 6998(d)) is 
        amended in the first sentence by striking ``section 326 
        of the Food and Agriculture Act of 1962 (7 U.S.C. 
        1339a)'' and inserting ``section 1613 of the Farm 
        Security and Rural Investment Act of 2002''.
            (3) Section 1230A of the Food Security Act of 1985 
        (16 U.S.C. 3830a) is repealed.

SEC. 1614. TRACKING OF BENEFITS.

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

SEC. 1615. ESTIMATES OF NET FARM INCOME.

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

SEC. 1616. AVAILABILITY OF INCENTIVE PAYMENTS FOR CERTAIN PRODUCERS.

    (a) Incentive Payments Required.--Subject to subsection 
(b), the Secretary shall make available a total of $20,000,000 
of funds of the Commodity Credit Corporation during the 2003 
through 2005 crop years to provide incentive payments to 
producers of hard white wheat.
    (b) Conditions on Implementation.--The Secretary shall 
implement subsection (a)--
            (1) only with regard to production that meets 
        minimum quality criteria; and
            (2) on not more than 2,000,000 acres or the 
        equivalent volume of production.
    (c) Demand for Wheat.--To be eligible to obtain an 
incentive payment under subsection (a), a producer shall 
demonstrate to the satisfaction of the Secretary that buyers 
and end-users are available for the wheat to be covered by the 
incentive payment.

SEC. 1617. RENEWED AVAILABILITY OF MARKET LOSS ASSISTANCE AND CERTAIN 
                    EMERGENCY ASSISTANCE TO PERSONS THAT FAILED TO 
                    RECEIVE ASSISTANCE UNDER EARLIER AUTHORITIES.

    (a) Authority To Provide Assistance.--The Secretary of 
Agriculture may use such funds of the Commodity Credit 
Corporation as are necessary to provide market loss assistance 
and other emergency assistance under a provision of law 
specified in subsection (c) to persons that, as determined by 
the Secretary--
            (1) were eligible to receive the assistance under 
        the provision of law; but
            (2) did not receive the assistance before October 
        1, 2001.
    (b) Limitation.--The amount of assistance provided under a 
provision of law specified in subsection (c) and this section 
to a person shall not exceed the amount of assistance the 
person would have been eligible to receive under the provision 
had the claim of the producer under the provision been timely 
resolved.
    (c) Covered Market Loss Assistance Authorities.--The 
following provisions of law are covered by this section:
            (1) Sections 1, 2, 3, 4, and 5 of Public Law 107-25 
        (115 Stat. 201).
            (2) Sections 805, 806, and 814 of the Agriculture, 
        Rural Development, Food and Drug Administration, and 
        Related Agencies Appropriations Act, 2001 (as enacted 
        into law by Public Law 106-387; 114 Stat. 1549).
            (3) Sections 201, 202, 204(a), 204(d), 257, and 259 
        of the Agricultural Risk Protection Act of 2000 (Public 
        Law 106-224; 7 U.S.C. 1421 note).
            (4) Sections 802, 803(a), 804, and 805 of the 
        Agriculture, Rural Development, Food and Drug 
        Administration, and Related Agencies Appropriations 
        Act, 2000 (Public Law 106-78; 113 Stat. 1135).
            (5) The livestock indemnity program under the 
        heading ``Commodity Credit Corporation Fund'' in 
        chapter 1 of title I of the 1999 Emergency Supplemental 
        Appropriations Act (Public 106-31; 113 Stat. 59).
            (6) Section 1111(a) of the Agriculture, Rural 
        Development, Food and Drug Administration, and Related 
        Agencies Appropriations Act, 1999 (as contained in 
        section 101(a) of division A of Public Law 105-277; 112 
        Stat. 2681-44).

SEC. 1618. PRODUCER RETENTION OF ERRONEOUSLY PAID LOAN DEFICIENCY 
                    PAYMENTS AND MARKETING LOAN GAINS.

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

                         TITLE II--CONSERVATION

                   Subtitle A--Conservation Security

SEC. 2001. CONSERVATION SECURITY PROGRAM.

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

       ``CHAPTER 2--CONSERVATION SECURITY AND FARMLAND PROTECTION

             ``Subchapter A--Conservation Security Program

``SEC. 1238. DEFINITIONS.

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

``SEC. 1238A. CONSERVATION SECURITY PROGRAM.

    ``(a) In General.--The Secretary shall establish and, for 
each of fiscal years 2003 through 2007, carry out a 
conservation security program to assist producers of 
agricultural operations in promoting, as is applicable with 
respect to land to be enrolled in the program, conservation and 
improvement of the quality of soil, water, air, energy, plant 
and animal life, and any other conservation purposes, as 
determined by the Secretary.
    ``(b) Eligibility.--
            ``(1) Eligible producers.--To be eligible to 
        participate in the conservation security program (other 
        than to receive technical assistance under section 
        1238C(g) for the development of conservation security 
        contracts), a producer shall--
                    ``(A) develop and submit to the Secretary, 
                and obtain the approval of the Secretary of, a 
                conservation security plan that meets the 
                requirements of subsection (c)(1); and
                    ``(B) enter into a conservation security 
                contract with the Secretary to carry out the 
                conservation security plan.
            ``(2) Eligible land.--Except as provided in 
        paragraph (3), private agricultural land (including 
        cropland, grassland, prairie land, improved pasture 
        land, and rangeland), land under the jurisdiction of an 
        Indian tribe (as defined by the Secretary), and 
        forested land that is an incidental part of an 
        agricultural operation shall be eligible for enrollment 
        in the conservation security program.
            ``(3) Exclusions.--
                    ``(A) Conservation reserve program.--Land 
                enrolled in the conservation reserve program 
                under subchapter B of chapter 1 shall not be 
                eligible for enrollment in the conservation 
                security program.
                    ``(B) Wetlands reserve program.--Land 
                enrolled in the wetlands reserve program 
                established under subchapter C of chapter 1 
                shall not be eligible for enrollment in the 
                conservation security program.
                    ``(C) Grassland reserve program.--Land 
                enrolled in the grassland reserve program 
                established under subchapter C of chapter 2 
                shall not be eligible for enrollment in the 
                conservation security program.
                    ``(D) Conversion to cropland.--Land that is 
                used for crop production after the date of 
                enactment of this subchapter that had not been 
                planted, considered to be planted, or devoted 
                to crop production for at least 4 of the 6 
                years preceding that date (except for land 
                enrolled in the conservation reserve program 
                under subchapter B of chapter 1) or that has 
                been maintained using long-term crop rotation 
                practices, as determined by the Secretary, 
                shall not be the basis for any payment under 
                the conservation security program.
            ``(4) Economic uses.--The Secretary shall permit a 
        producer to implement, with respect to all eligible 
        land covered by a conservation security plan, economic 
        uses that--
                    ``(A) maintain the agricultural nature of 
                the land; and
                    ``(B) are consistent with the natural 
                resource and conservation objectives of the 
                conservation security program.
    ``(c) Conservation Security Plans.--
            ``(1) In general.--A conservation security plan 
        shall--
                    ``(A) identify the designated land and 
                resources to be conserved under the 
                conservation security plan;
                    ``(B) describe the tier of conservation 
                security contract, and the particular 
                conservation practices to be implemented, 
                maintained, or improved, in accordance with 
                subsection (d) on the land covered by the 
                conservation security contract for the 
                specified term; and
                    ``(C) contain a schedule for the 
                implementation, maintenance, or improvement of 
                the conservation practices described in the 
                conservation security plan during the term of 
                the conservation security contract.
            ``(2) Resource planning.--The Secretary may assist 
        producers that enter into conservation security 
        contracts in developing a comprehensive, long-term 
        strategy for improving and maintaining all natural 
        resources of the agricultural operation of the 
        producer.
    ``(d) Conservation Contracts and Practices.--
            ``(1) In general.--
                    ``(A) Establishment of tiers.--The 
                Secretary shall establish, and offer to 
                eligible producers, 3 tiers of conservation 
                contracts under which a payment under this 
                subchapter may be received.
                    ``(B) Eligible conservation practices.--
                            ``(i) In general.--The Secretary 
                        shall make eligible for payment under a 
                        conservation security contract land 
                        management, vegetative, and structural 
                        practices.
                            ``(ii) Determination.--In 
                        determining the eligibility of a 
                        practice described in clause (i), the 
                        Secretary shall require, to the maximum 
                        extent practicable, that the lowest 
                        cost alternatives be used to fulfill 
                        the purposes of the conservation 
                        security plan, as determined by the 
                        Secretary.
            ``(2) On-farm research and demonstration or pilot 
        testing.--With respect to land enrolled in the 
        conservation security program, the Secretary may 
        approve a conservation security plan that includes--
                    ``(A) on-farm conservation research and 
                demonstration activities; and
                    ``(B) pilot testing of new technologies or 
                innovative conservation practices.
            ``(3) Use of handbook and guides; state and local 
        conservation concerns.--
                    ``(A) Use of handbook and guides.--In 
                determining eligible conservation practices and 
                the criteria for implementing or maintaining 
                the conservation practices under the 
                conservation security program, the Secretary 
                shall use the National Handbook of Conservation 
                Practices of the Natural Resources Conservation 
                Service.
                    ``(B) State and local conservation 
                priorities.--The conservation priorities of a 
                State or locality in which an agricultural 
                operation is situated shall be determined by 
                the State Conservationist, in consultation 
                with--
                            ``(i) the State technical committee 
                        established under subtitle G; and
                            ``(ii) local agricultural producers 
                        and conservation working groups.
            ``(4) Conservation practices.--Conservation 
        practices that may be implemented by a producer under a 
        conservation security contract (as appropriate for the 
        agricultural operation of a producer) include--
                    ``(A) nutrient management;
                    ``(B) integrated pest management;
                    ``(C) water conservation (including through 
                irrigation) and water quality management;
                    ``(D) grazing, pasture, and rangeland 
                management;
                    ``(E) soil conservation, quality, and 
                residue management;
                    ``(F) invasive species management;
                    ``(G) fish and wildlife habitat 
                conservation, restoration, and management;
                    ``(H) air quality management;
                    ``(I) energy conservation measures;
                    ``(J) biological resource conservation and 
                regeneration;
                    ``(K) contour farming;
                    ``(L) strip cropping;
                    ``(M) cover cropping;
                    ``(N) controlled rotational grazing;
                    ``(O) resource-conserving crop rotation;
                    ``(P) conversion of portions of cropland 
                from a soil-depleting use to a soil-conserving 
                use, including production of cover crops;
                    ``(Q) partial field conservation practices;
                    ``(R) native grassland and prairie 
                protection and restoration; and
                    ``(S) any other conservation practices that 
                the Secretary determines to be appropriate and 
                comparable to other conservation practices 
                described in this paragraph.
            ``(5) Tiers.--Subject to paragraph (6), to carry 
        out this subsection, the Secretary shall establish the 
        following 3 tiers of conservation contracts:
                    ``(A) Tier i conservation security 
                contracts.--A conservation security plan for 
                land enrolled under a Tier I conservation 
                security contract shall--
                            ``(i) be for a period of 5 years; 
                        and
                            ``(ii) include conservation 
                        practices appropriate for the 
                        agricultural operation, that, at a 
                        minimum (as determined by the 
                        Secretary)--
                                    ``(I) address at least 1 
                                significant resource of concern 
                                for the enrolled portion of the 
                                agriculturaloperation at a 
level that meets the appropriate nondegradation standard; and
                                    ``(II) cover active 
                                management of conservation 
                                practices that are implemented 
                                or maintained under the 
                                conservation security contract.
                    ``(B) Tier ii conservation security 
                contracts.--A conservation security plan for 
                land enrolled under a Tier II conservation 
                security contract shall--
                            ``(i) be for a period of not less 
                        than 5 nor more than 10 years, as 
                        determined by the producer;
                            ``(ii) include conservation 
                        practices appropriate for the 
                        agricultural operation, that, at a 
                        minimum--
                                    ``(I) address at least 1 
                                significant resource of concern 
                                for the entire agricultural 
                                operation, as determined by the 
                                Secretary, at a level that 
                                meets the appropriate 
                                nondegradation standard; and
                                    ``(II) cover active 
                                management of conservation 
                                practices that are implemented 
                                or maintained under the 
                                conservation security contract.
                    ``(C) Tier iii conservation security 
                contracts.--A conservation security plan for 
                land enrolled under a Tier III conservation 
                security contract shall--
                            ``(i) be for a period of not less 
                        than 5 nor more than 10 years, as 
                        determined by the producer; and
                            ``(ii) include conservation 
                        practices appropriate for the 
                        agricultural operation that, at a 
                        minimum--
                                    ``(I) apply a resource 
                                management system that meets 
                                the appropriate nondegradation 
                                standard for all resources of 
                                concern of the entire 
                                agricultural operation, as 
                                determined by the Secretary; 
                                and
                                    ``(II) cover active 
                                management of conservation 
                                practices that are implemented 
                                or maintained under the 
                                conservation security contract.
            ``(6) Minimum requirements.--The minimum 
        requirements for each tier of conservation contracts 
        implemented under paragraph (5) shall be determined and 
        approved by the Secretary.
    ``(e) Conservation Security Contracts.--
            ``(1) In general.--On approval of a conservation 
        security plan of a producer, the Secretary shall enter 
        into a conservation security contract with the producer 
        to enroll the land covered by the conservation security 
        plan in the conservation security program.
            ``(2) Modification.--
                    ``(A) Optional modifications.--A producer 
                may apply to the Secretary for a modification 
                of the conservation security contract of the 
                producer that is consistent with the purposes 
                of the conservation security program.
                    ``(B) Other modifications.--
                            ``(i) In general.--The Secretary 
                        may, in writing, require a producer to 
                        modify a conservation security contract 
                        before the expiration of the 
                        conservation security contract if the 
                        Secretary determines that a change made 
                        to the type, size, management, or other 
                        aspect of the agricultural operation of 
                        the producer would, without the 
                        modification of the contract, 
                        significantly interfere with achieving 
                        the purposes of the conservation 
                        security program.
                            ``(ii) Participation in other 
                        programs.--If appropriate payment 
                        reductions and other adjustments (as 
                        determined by the Secretary) are made 
                        to the conservation security contract 
                        of a producer, the producer may--
                                    ``(I) simultaneously 
                                participate in--
                                            ``(aa) the 
                                        conservation security 
                                        program;
                                            ``(bb) the 
                                        conservation reserve 
                                        program under 
                                        subchapter B of chapter 
                                        1; and
                                            ``(cc) the wetlands 
                                        reserve program under 
                                        subchapter C of chapter 
                                        1; and
                                    ``(II) may remove land 
                                enrolled in the conservation 
                                security program for enrollment 
                                in a program described in item 
                                (bb) or (cc) of subclause (I).
            ``(3) Termination.--
                    ``(A) Optional termination.--A producer may 
                terminate a conservation security contract and 
                retain payments received under the conservation 
                security contract, if--
                            ``(i) the producer is in full 
                        compliance with the terms and 
                        conditions (including any maintenance 
                        requirements) of the conservation 
                        security contract as of the date of the 
                        termination; and
                            ``(ii) the Secretary determines 
                        that termination of the contract would 
                        not defeat the purposes of the 
                        conservation security plan of the 
                        producer.
                    ``(B) Other termination.--A producer that 
                is required to modify a conservation security 
                contract under paragraph (2)(B)(i) may, in lieu 
                of modifying the contract--
                            ``(i) terminate the conservation 
                        security contract; and
                            ``(ii) retain payments received 
                        under the conservation security 
                        contract, if the producer has fully 
                        complied with the terms and conditions 
                        of the conservation security contract 
                        before termination of the contract, as 
                        determined by the Secretary.
            ``(4) Renewal.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), at the option of a producer, 
                the conservation security contract of the 
                producer may be renewed for an additional 
                period of not less than 5 nor more than 10 
                years.
                    ``(B) Tier i renewals.--In the case of a 
                Tier I conservation security contract of a 
                producer, the producer may renew the contract 
                only if the producer agrees--
                            ``(i) to apply additional 
                        conservation practices that meet the 
                        nondegradation standard on land already 
                        enrolled in the conservation security 
                        program; or
                            ``(ii) to adopt new conservation 
                        practices with respect to another 
                        portion of the agricultural operation 
                        that address resource concerns and meet 
                        the nondegradation standard under the 
                        terms of the Tier I conservation 
                        security contract.
    ``(f) Noncompliance Due to Circumstances Beyond the Control 
of Producers.--The Secretary shall include in the conservation 
security contract a provision, and may permit modification of a 
conservation security contract under subsection (e)(1), to 
ensure that a producer shall not be considered in violation of 
a conservation security contract for failure to comply with the 
conservation security contract due to circumstances beyond the 
control of the producer, including a disaster or related 
condition, as determined by the Secretary.

``SEC. 1238B. DUTIES OF PRODUCERS.

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

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

    ``(a) Timing of Payments.--The Secretary shall make 
payments under a conservation security contract as soon as 
practicable after October 1 of each fiscal year.
    ``(b) Annual Payments.--
            ``(1) Criteria for determining amount of 
        payments.--
                    ``(A) Base payment.--A base payment under 
                this paragraph shall be (as determined by the 
                Secretary)--
                            ``(i) the average national per-acre 
                        rental rate for a specific land use 
                        during the 2001 crop year; or
                            ``(ii) another appropriate rate for 
                        the 2001 crop year that ensures 
                        regional equity.
                    ``(B) Payments.--A payment for a 
                conservation practice under this paragraph 
                shall be determined in accordance with 
                subparagraphs (C) through (E).
                    ``(C) Tier i conservation security 
                contracts.--The payment for a Tier I 
                conservation security contract shall consist of 
                the total of the following amounts:
                            ``(i) An amount equal to 5 percent 
                        of the applicable base payment for land 
                        covered by the contract.
                            ``(ii) An amount that does not 
                        exceed 75 percent (or, in the case of a 
                        beginning farmer or rancher, 90 
                        percent) of the average county costs of 
                        practices for the 2001 crop year that 
                        are included in the conservation 
                        security contract, as determined by the 
                        Secretary, including the costs of--
                                    ``(I) the adoption of new 
                                management, vegetative, and 
                                land-based structural 
                                practices;
                                    ``(II) the maintenance of 
                                existing land management and 
                                vegetative practices; and
                                    ``(III) the maintenance of 
                                existing land-based structural 
                                practices that are approved by 
                                the Secretary but not already 
                                covered by a Federal or State 
                                maintenance requirement.
                            ``(iii) An enhanced payment that is 
                        determined by the Secretary in a manner 
                        that ensures equity across regions of 
                        the United States, if the producer--
                                    ``(I) implements or 
                                maintains multiple conservation 
                                practices that exceed minimum 
                                requirements for the applicable 
                                tier of participation 
                                (including practices that 
                                involve a change in land use, 
                                such as resource-conserving 
                                crop rotation, managed 
                                rotational grazing, or 
                                conservation buffer practices);
                                    ``(II) addresses local 
                                conservation priorities in 
                                addition to resources of 
                                concern for the agricultural 
                                operation;
                                    ``(III) participates in an 
                                on-farm conservation research, 
                                demonstration, or pilot 
                                project;
                                    ``(IV) participates in a 
                                watershed or regional resource 
                                conservation plan that involves 
                                at least 75 percent of 
                                producers in a targeted area; 
                                or
                                    ``(V) carries out 
                                assessment and evaluation 
                                activities relating to 
                                practices included in a 
                                conservation security plan.
                    ``(D) Tier ii conservation security 
                contracts.--The payment for a Tier II 
                conservation security contract shall consist of 
                the total of the following amounts:
                            ``(i) An amount equal to 10 percent 
                        of the applicable base payment for land 
                        covered by the conservation security 
                        contract.
                            ``(ii) An amount that does not 
                        exceed 75 percent (or, in the case of a 
                        beginning farmer or rancher, 90 
                        percent) of the average county cost of 
                        adopting or maintaining practices for 
                        the 2001 crop year that are included in 
                        the conservation security contract, as 
                        described in subparagraph (C)(ii).
                            ``(iii) An enhanced payment that is 
                        determined in accordance with 
                        subparagraph (C)(iii).
                    ``(E) Tier iii conservation security 
                contracts.--The payment for a Tier III 
                conservation security contract shall consist of 
                the total of the following amounts:
                            ``(i) An amount equal to 15 percent 
                        of the base payment for land covered by 
                        the conservation security contract.
                            ``(ii) An amount that does not 
                        exceed 75 percent (or, in the case of a 
                        beginning farmer or rancher, 90 
                        percent) of the average county cost of 
                        adopting or maintaining practices for 
                        the 2001 crop year that are included in 
                        the conservation security contract, as 
                        described in subparagraph (C)(ii).
                            ``(iii) An enhanced payment that is 
                        determined in accordance with 
                        subparagraph (C)(iii).
            ``(2) Limitation on payments.--
                    ``(A) In general.--Subject to paragraphs 
                (1) and (3), the Secretary shall make an annual 
                payment, directly or indirectly, to an 
                individual or entity covered by a conservation 
                security contract in an amount not to exceed--
                            ``(i) in the case of a Tier I 
                        conservation security contract, 
                        $20,000;
                            ``(ii) in the case of a Tier II 
                        conservation security contract, 
                        $35,000; or
                            ``(iii) in the case of a Tier III 
                        conservation security contract, 
                        $45,000.
                    ``(B) Limitation on base payments.--In 
                applying the payment limitation under each of 
                clauses (i), (ii), and (iii) of subparagraph 
                (A), an individual or entity may not receive, 
                directly or indirectly, payments described in 
                clause (i) of paragraph (1)(C), (1)(D), or 
                (1)(E), as appropriate, in an amount that 
                exceeds--
                            ``(i) in the case of Tier I 
                        contracts, 25 percent of the applicable 
                        payment limitation; or
                            ``(ii) in the case of Tier II 
                        contracts and Tier III contracts, 30 
                        percent of the applicable payment 
                        limitation.
                    ``(C) Other usda payments.--A producer 
                shall not receive payments under the 
                conservation security program and any other 
                conservation program administered by the 
                Secretary for the same practices on the same 
                land.
                    ``(D) Commensurate share.--To be eligible 
                to receive a payment under this subchapter, an 
                individual or entity shall make contributions 
                (including contributions of land, labor, 
                management, equipment, or capital) to the 
                operation of the farm that are at least 
                commensurate with the share of the proceeds of 
                the operation of the individual or entity.
            ``(3) Equipment or facilities.--A payment to a 
        producer under this subchapter shall not be provided 
        for--
                    ``(A) construction or maintenance of animal 
                waste storage or treatment facilities or 
                associated waste transport or transfer devices 
                for animal feeding operations; or
                    ``(B) the purchase or maintenance of 
                equipment or a non-land based structure that is 
                not integral to a land-based practice, as 
                determined by the Secretary.
    ``(c) Minimum Practice Requirement.--In determining a 
payment under subsection (b) for a producer that receives a 
payment under another program administered by the Secretary 
that is contingent on complying with requirements under 
subtitle B or C (relating to the use of highly erodible land or 
wetland), a payment under this subchapter on land subject to 
those requirements shall be for practices only to the extent 
that the practices exceed minimum requirements for the producer 
under those subtitles, as determined by the Secretary.
    ``(d) Regulations.--The Secretary shall promulgate 
regulations that--
            ``(1) provide for adequate safeguards to protect 
        the interests of tenants and sharecroppers, including 
        provision for sharing payments, on a fair and equitable 
        basis; and
            ``(2) prescribe such other rules as the Secretary 
        determines to be necessary to ensure a fair and 
        reasonable application of the limitations established 
        under subsection (b).
    ``(e) Transfer or Change of Interest in Land Subject to 
Conservation Security Contract.--
            ``(1) In general.--Except as provided in paragraph 
        (2), the transfer, or change in the interest, of a 
        producer in land subject to a conservation security 
        contract shall result in the termination of the 
        conservation security contract.
            ``(2) Transfer of duties and rights.--Paragraph (1) 
        shall not apply if, not later than 60 days after the 
        date of the transfer or change in the interest in land, 
        the transferee of the land provides written notice to 
        the Secretary that all duties and rights under the 
        conservation security contract have been transferred 
        to, and assumed by, the transferee.
    ``(f) Enrollment Procedure.--In entering into conservation 
security contracts with producers under this subchapter, the 
Secretary shall not use competitive bidding or any similar 
procedure.
    ``(g) Technical Assistance.--For each of fiscal years 2003 
through 2007, the Secretary shall provide technical assistance 
to producers for the development and implementation of 
conservation security contracts, in an amount not to exceed 15 
percent of amounts expended for the fiscal year.''.
    (b) Regulations.--Not later than 270 days after the date of 
enactment of this Act, the Secretary of Agriculture shall 
promulgate regulations implementing the amendment made by 
subsection (a).

SEC. 2002. CONSERVATION COMPLIANCE.

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

``SEC. 1211. PROGRAM INELIGIBILITY.

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

SEC. 2003. PARTNERSHIPS AND COOPERATION.

    Section 1243 of the Food Security Act of 1985 (16 U.S.C. 
3843) is amended by adding at the end the following:
    ``(f) Partnerships and Cooperation.--
            ``(1) In general.--In carrying out any program 
        under subtitle D, the Secretary may use resources 
        provided under that subtitle to enter into stewardship 
        agreements with State and local agencies, Indian 
        tribes, and nongovernmental organizations and to 
        designate special projects, as recommended by the State 
        Conservationist, after consultation with the State 
        technical committee, to enhance technical and financial 
        assistance provided to owners, operators, and producers 
        to address natural resource issues related to 
        agricultural production.
            ``(2) Criteria for special projects.--The purposes 
        of special projects carried out under this subsection 
        shall be to encourage--
                    ``(A) producers to cooperate in the 
                installation and maintenance of conservation 
                practices that affect multiple agricultural 
                operations;
                    ``(B) the sharing of information and 
                technical and financial resources among 
                producers;
                    ``(C) cumulative conservation benefits in 
                geographic areas; and
                    ``(D) the development and demonstration of 
                innovative conservation methods.
            ``(3) Incentives.--To realize the purposes of the 
        special projects under paragraph (1), the Secretary may 
        provide special incentives to owners, operators, and 
        producers participating in the special projects to 
        encourage partnerships and enrollments of optimal 
        conservation value.
            ``(4) Flexibility.--
                    ``(A) In general.--The Secretary may enter 
                into stewardship agreements with States 
                (including State agencies and units of local 
                government), Indian tribes, and nongovernmental 
                organizations that have a history of working 
                with agricultural producers to allow greater 
                flexibility to adjust the application of 
                eligibility criteria, approved practices, 
                innovative conservation practices, and other 
                elements of the programs under this title to 
                better reflect unique local circumstances and 
                purposes in a manner that is consistent with--
                            ``(i) conservation enhancement and 
                        long-term productivity of the natural 
                        resource base; and
                            ``(ii) the purposes and 
                        requirements of this title.
                    ``(B) Plan.--Each party to a stewardship 
                agreement under subparagraph (A) shall submit 
                to the Secretary, for approval by the 
                Secretary, a special project area plan for each 
                program to be carried out by the party that 
                includes--
                            ``(i) a description of the 
                        requested resources and adjustments to 
                        program implementation (including a 
                        description of how those adjustments 
                        will accelerate the achievement of 
                        conservation benefits);
                            ``(ii) an analysis of the 
                        contribution those adjustments will 
                        make to the effectiveness of programs 
                        in achieving the purposes of the 
                        special project;
                            ``(iii) a timetable for 
                        reevaluating the need for or 
                        performance of the proposed 
                        adjustments;
                            ``(iv) a description of non-Federal 
                        programs and resources that will 
                        contribute to achieving the purposes of 
                        the special project; and
                            ``(v) a plan for the evaluation of 
                        progress toward the purposes of the 
                        special project.
            ``(5) Funding.--
                    ``(A) In general.--In addition to resources 
                from programs under subtitle D, subject to 
                subparagraph (B), the Secretary shall use not 
                more than 5 percent of the funds made available 
                for each fiscal year under section 1241(a) to 
                carry out activities that are authorized under 
                conservation programs under subtitle D.
                    ``(B) Unused funding.--Any funds made 
                available for a fiscal year under subparagraph 
                (A) that are not obligated by April 1 of the 
                fiscal year may be used to carry out other 
                activities under conservation programs under 
                subtitle D during the fiscal year in which the 
                funding becomes available.''.

SEC. 2004. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

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

``SEC. 1244. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    ``(a) Beginning Farmers and Ranchers and Indian Tribes.--In 
carrying out any conservation program administered by the 
Secretary, the Secretary may provide to beginning farmers and 
ranchers and Indian tribes (as those terms are defined in 
section 1238) and limited resource agricultural producers 
incentives to participate in the conservation program to--
            ``(1) foster new farming and ranching 
        opportunities; and
            ``(2) enhance environmental stewardship over the 
        long term.
    ``(b) Privacy of Personal Information Relating to Natural 
Resources Conservation Programs.--
            ``(1) Information received for technical and 
        financial assistance.--
                    ``(A) In general.--In accordance with 
                section 552(b)(3) of title 5, United States 
                Code, except as provided in subparagraph (C) 
                and paragraph (2), information described in 
                subparagraph (B)--
                            ``(i) shall not be considered to be 
                        public information; and
                            ``(ii) shall not be released to any 
                        person or Federal, State, local agency 
                        or Indian tribe (as defined by the 
                        Secretary) outside the Department of 
                        Agriculture.
                    ``(B) Information.--The information 
                referred to in subparagraph (A) is 
                information--
                            ``(i) provided to the Secretary or 
                        a contractor of the Secretary 
                        (including information provided under 
                        subtitle D) for the purpose of 
                        providing technical or financial 
                        assistance to an owner, operator, or 
                        producer with respect to any natural 
                        resources conservation program 
                        administered by the Natural Resources 
                        Conservation Service or the Farm 
                        Service Agency; and
                            ``(ii) that is proprietary (within 
                        the meaning of section 552(b)(4) of 
                        title 5, United States Code) to the 
                        agricultural operation or land that is 
                        a part of an agricultural operation of 
                        the owner, operator, or producer.
                    ``(C) Exception.--Nothing in this section 
                affects the availability of payment information 
                (including payment amounts and the names and 
                addresses of recipients of payments) under 
                section 552 of title 5, United States Code.
            ``(2) Exceptions.--
                    ``(A) Release and disclosure for 
                enforcement.--The Secretary may release or 
                disclose to the Attorney General information 
                covered by paragraph (1) to the extent 
                necessary to enforce the natural resources 
                conservation programs referred to in paragraph 
                (1)(B)(i).
                    ``(B) Disclosure to cooperating persons and 
                agencies.--
                            ``(i) In general.--The Secretary 
                        may release or disclose information 
                        covered by paragraph (1) to a person or 
                        Federal, State, local, or tribal agency 
                        working in cooperation with the 
                        Secretary in providing technical and 
                        financial assistance described in 
                        paragraph (1)(B)(i) or collecting 
                        information from data gathering sites.
                            ``(ii) Use of information.--The 
                        person or Federal, State, local, or 
                        tribal agency that receives information 
                        described in clause (i) may release the 
                        information only for the purpose of 
                        assisting the Secretary--
                                    ``(I) in providing the 
                                requested technical or 
                                financial assistance; or
                                    ``(II) in collecting 
                                information from data gathering 
                                sites.
                    ``(C) Statistical and aggregate 
                information.--Information covered by paragraph 
                (1) may be disclosed to the public if the 
                information has been transformed into a 
                statistical or aggregate form without naming 
                any--
                            ``(i) individual owner, operator, 
                        or producer; or
                            ``(ii) specific data gathering 
                        site.
                    ``(D) Consent of owner, operator, or 
                producer.--
                            ``(i) In general.--An owner, 
                        operator, or producer may consent to 
                        the disclosure of information described 
                        in paragraph (1).
                            ``(ii) Condition of other 
                        programs.--The participation of the 
                        owner, operator, or producer in, and 
                        the receipt of any benefit by the 
                        owner, operator, or producer under, 
                        this title or any other program 
                        administered by the Secretary may not 
                        be conditioned on the owner, operator, 
                        or producer providing consent under 
                        this paragraph.
            ``(3) Violations; penalties.--Section 1770(c) shall 
        apply with respect to the release of information 
        collected in any manner or for any purpose prohibited 
        by this subsection.
            ``(4) Data collection, disclosure, and review.--
        Nothing in this subsection--
                    ``(A) affects any procedure for data 
                collection or disclosure through the National 
                Resources Inventory; or
                    ``(B) limits the authority of Congress or 
                the General Accounting Office to review 
                information collected or disclosed under this 
                subsection.''.
    (b) National Resources Inventory.--Section 1770 of the Food 
Security Act of 1985 (7 U.S.C. 2276) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by striking ``or'' at 
                the end;
                    (B) in paragraph (2), by striking the 
                period and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(3) in the case of information collected under 
        the authority described in subsection (d)(12), disclose 
        the information to any person or any Federal, State, 
        local, or tribal agency outside the Department of 
        Agriculture, unless the information has been converted 
        into a statistical or aggregate form that does not 
        allow the identification of the person that supplied 
        particular information.''; and
            (2) in subsection (d)--
                    (A) in paragraph (9), by striking ``or'' at 
                the end;
                    (B) in paragraph (11), by striking the 
                period and inserting ``; or''; and
                    (C) by adding at the end the following:
            ``(12) section 302 of the Rural Development Act of 
        1972 (7 U.S.C. 1010a) regarding the authority to 
        collect data for the National Resources Inventory.''.

SEC. 2005. REFORM AND ASSESSMENT OF CONSERVATION PROGRAMS.

    (a) In General.--The Secretary of Agriculture shall develop 
a plan to coordinate land retirement and agricultural working 
land conservation programs that are administered by the 
Secretary to achieve the goals of--
            (1) eliminating redundancy;
            (2) streamlining program delivery; and
            (3) improving services provided to agricultural 
        producers (including the reevaluation of the provision 
        of technical assistance).
    (b) Report.--Not later than December 31, 2005, the 
Secretary of Agriculture shall submit to the Committee on 
Agriculture of the House of Representatives and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate, a report 
that describes--
            (1) the plan developed under subsection (a); and
            (2) the means by which the Secretary intends to 
        achieve the goals described in subsection (a).

SEC. 2006. CONFORMING AMENDMENTS.

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

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

    (b) Section 1230 of the Food Security Act of 1985 (16 
U.S.C. 3830) is amended--
            (1) in the section heading, by striking 
        ``ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM'' 
        and inserting ``COMPREHENSIVE CONSERVATION ENHANCEMENT 
        PROGRAM'';
            (2) in subsection (a)(1), by striking ``an 
        environmental conservation acreage reserve program'' 
        and inserting ``a comprehensive conservation 
        enhancement program'';
            (3) by striking subsection (c); and
            (4) by striking ``ECARP'' each place it appears and 
        inserting ``CCEP''.
    (c) Section 1230A of the Food Security Act of 1985 (16 
U.S.C. 3830a) is repealed.
    (d) Section 1243 of the Food Security Act of 1985 (16 
U.S.C. 3843) is amended by striking the section heading and 
inserting the following:

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

                    Subtitle B--Conservation Reserve

SEC. 2101. CONSERVATION RESERVE PROGRAM.

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

                  ``Subchapter B--Conservation Reserve

``SEC. 1231. CONSERVATION RESERVE.

    ``(a) In General.--Through the 2007 calendar year, the 
Secretary shall formulate and carry out a conservation reserve 
program under which land is enrolled through the use of 
contracts to assist owners and operators of land specified in 
subsection (b) to conserve and improve the soil, water, and 
wildlife resources of such land.
    ``(b) Eligible Land.--The Secretary may include in the 
program established under this subchapter--
            ``(1) highly erodible cropland that--
                    ``(A)(i) if permitted to remain untreated 
                could substantially reduce the agricultural 
                production capability for future generations; 
                or
                    ``(ii) cannot be farmed in accordance with 
                a plan that complies with the requirements of 
                subtitle B; and
                    ``(B) the Secretary determines had a 
                cropping history or was considered to be 
                planted for 4 of the 6 years preceding the date 
                of enactment of the Farm Security and Rural 
                Investment Act of 2002 (except for land 
                enrolled in the conservation reserve program as 
                of that date).
            ``(2) marginal pasture land converted to wetland or 
        established as wildlife habitat prior to November 28, 
        1990;
            ``(3) marginal pasture land to be devoted to 
        appropriate vegetation, including trees, in or near 
        riparian areas, or devoted to similar water quality 
        purposes (including marginal pastureland converted to 
        wetland or established as wildlife habitat);
            ``(4) cropland that is otherwise ineligible if the 
        Secretary determines that--
                    ``(A) if permitted to remain in 
                agricultural production, the land would--
                            ``(i) contribute to the degradation 
                        of soil, water, or air quality; or
                            ``(ii) pose an on-site or off-site 
                        environmental threat to soil, water, or 
                        air quality;
                    ``(B) the land is a--
                            ``(i) newly-created, permanent 
                        grass sod waterway; or
                            ``(ii) a contour grass sod strip 
                        established and maintained as part of 
                        an approved conservation plan;
                    ``(C) the land will be devoted to newly 
                established living snow fences, permanent 
                wildlife habitat, windbreaks, shelterbelts, or 
                filterstrips devoted to trees or shrubs; or
                    ``(D) the land poses an off-farm 
                environmental threat, or a threat of continued 
                degradation of productivity due to soil 
                salinity, if permitted to remain in production; 
                and
                    ``(E) enrollment of the land would 
                facilitate a net savings in groundwater or 
                surface water resources of the agricultural 
                operation of the producer;
            ``(5) the portion of land in a field not enrolled 
        in the conservation reserve in a case in which more 
        than 50 percent of the land in the field is enrolled as 
        a buffer, if--
                    ``(A) the land is enrolled as part of the 
                buffer; and
                    ``(B) the remainder of the field is--
                            ``(i) infeasible to farm; and
                            ``(ii) enrolled at regular rental 
                        rates.
    ``(c) Planting Status of Certain Land.--For purposes of 
determining the eligibility of land to be placed in the 
conservation reserve established under this subchapter, land 
shall be considered to be planted to an agricultural commodity 
during a crop year if--
            ``(1) during the crop year, the land was devoted to 
        a conserving use; or
            ``(2)(A) during the crop year or during any of the 
        2 years preceding the crop year, the land was enrolled 
        in the water bank program; and
            ``(B) the contract of the owner or operator of the 
        cropland expired or will expire in calendar year 2000, 
        2001, or 2002.
    ``(d) Maximum Enrollment.--The Secretary may maintain up to 
39,200,000 acres in the conservation reserve at any 1 time 
during the 2002 through 2007 calendar years (including 
contracts extended by the Secretary pursuant to section 1437(c) 
of the Food, Agriculture, Conservation, and Trade Act of 1990 
(16 U.S.C. 3831 note; Public Law 101-624)).
    ``(e) Duration of Contract.--
            ``(1) In general.--For the purpose of carrying out 
        this subchapter, the Secretary shall enter into 
        contracts of not less than 10, nor more than 15, years.
            ``(2) Certain land.--
                    ``(A) In general.--In the case of land 
                devoted to hardwood trees, shelterbelts, 
                windbreaks, or wildlife corridors under a 
                contract entered into under this subchapter 
                after October 1, 1990, and land devoted to such 
                uses under contracts modified under section 
                1235A, the owner or operator of the land may, 
                within the limitations prescribed under this 
                section, specify the duration of the contract.
                    ``(B) Hardwood trees.--In the case of land 
                that is devoted to hardwood trees under a 
                contract entered into under this subchapter 
                prior to October 1, 1990, the Secretary may 
                extend the contract for a term of not to exceed 
                5 years, as agreed to by the owner or operator 
                of such land and the Secretary.
            ``(3) 1-year extension.--In the case of a contract 
        described in paragraph (1) the term of which expires 
        during calendar year 2002, an owner or operator of land 
        enrolled under the contract may extend the contract for 
        1 additional year.
    ``(f) Conservation Priority Areas.--
            ``(1) Designation.--On application by the 
        appropriate State agency, the Secretary shall designate 
        watershed areas of the Chesapeake Bay Region 
        (Pennsylvania, Maryland, and Virginia), the Great Lakes 
        Region, the Long Island Sound Region, and other areas 
        of special environmental sensitivity as conservation 
        priority areas.
            ``(2) Eligible watersheds.--Watersheds eligible for 
        designation under this subsection shall include areas 
        with actual and significant adverse water quality or 
        habitat impacts related to agricultural production 
        activities.
            ``(3) Expiration.--Conservation priority area 
        designation under this subsection shall expire after 5 
        years, subject to redesignation, except that the 
        Secretary may withdraw a watershed's designation--
                    ``(A) on application by the appropriate 
                State agency; or
                    ``(B) in the case of an area covered by 
                this subsection, if the Secretary finds that 
                the area no longer contains actual and 
                significant adverse water quality or habitat 
                impacts related to agricultural production 
                activities.
            ``(4) Duty of secretary.--In carrying out this 
        subsection, the Secretary shall attempt to maximize 
        water quality and habitat benefits in the watersheds 
        described in paragraph (1) by promoting a significant 
        level of enrollment of land within the watersheds in 
        the program under this subchapter by whatever means the 
        Secretary determines are appropriate and consistent 
        with the purposes of this subchapter.
    ``(g) Multi-Year Grasses and Legumes.--For purposes of this 
subchapter, alfalfa and other multi-year grasses and legumes in 
a rotation practice, approved by the Secretary, shall be 
considered agricultural commodities.
    ``(h) Pilot Program for Enrollment of Wetland and Buffer 
Acreage in Conservation Reserve.--
            ``(1) Program.--
                    ``(A) In general.--During the 2002 through 
                2007 calendar years, the Secretary shall carry 
                out a program in each State under which the 
                Secretary shall include eligible acreage 
                described in paragraph (2) in the program 
                established under this subchapter.
                    ``(B) Participation among states.--The 
                Secretary shall ensure, to the maximum extent 
                practicable, that owners and operators in each 
                State have an equitable opportunity to 
                participate in the pilot program established 
                under this subsection.
            ``(2) Eligible acreage.--
                    ``(A) In general.--Subject to subparagraphs 
                (B) through (D), an owner or operator may 
                enroll in the conservation reserve under this 
                subsection--
                            ``(i) a wetland (including a 
                        converted wetland described in section 
                        1222(b)(1)(A)) that was cropped during 
                        at least 3 of the immediately preceding 
                        10 crop years; and
                            ``(ii) buffer acreage that--
                                    ``(I) is contiguous to the 
                                wetland described in clause 
                                (i);
                                    ``(II) is used to protect 
                                the wetland; and
                                    ``(III) is of such width as 
                                the Secretary determines is 
                                necessary to protect the 
                                wetland, taking into 
                                consideration and accommodating 
                                the farming practices 
                                (including the straightening of 
                                boundaries to accommodate 
                                machinery) used with respect to 
                                the cropland that surrounds the 
                                wetland.
                    ``(B) Exclusions.--An owner or operator may 
                not enroll in the conservation reserve under 
                this subsection--
                            ``(i) any wetland, or land on a 
                        floodplain, that is, or is adjacent to, 
                        a perennial riverine system wetland 
                        identified on the final national 
                        wetland inventory map of the Secretary 
                        of the Interior; or
                            ``(ii) in the case of an area that 
                        is not covered by the final national 
                        inventory map, any wetland, or land on 
                        a floodplain, that is adjacent to a 
                        perennial stream identified on a 1-
                        24,000 scale map of the United States 
                        Geological Survey.
                    ``(C) Program limitations.--
                            ``(i) In general.--The Secretary 
                        may enroll in the conservation reserve 
                        under this subsection not more than--
                                    ``(I) 100,000 acres in any 
                                1 State referred to in 
                                paragraph (1); and
                                    ``(II) not more than a 
                                total of 1,000,000 acres.
                            ``(ii) Relationship to program 
                        maximum.--Subject to clause (iii), for 
                        the purposes of subsection (d), any 
                        acreage enrolled in the conservation 
                        reserve under this subsection shall be 
                        considered acres maintained in the 
                        conservation reserve.
                            ``(iii) Relationship to other 
                        enrolled acreage.--Acreage enrolled 
                        under this subsection shall not affect 
                        for any fiscal year the quantity of--
                                    ``(I) acreage enrolled to 
                                establish conservation buffers 
                                as part of the program 
                                announced on March 24, 1998 (63 
                                Fed. Reg. 14109); or
                                    ``(II) acreage enrolled 
                                into the conservation reserve 
                                enhancement program announced 
                                on May 27, 1998 (63 Fed. Reg. 
                                28965).
                            ``(iv) Review; potential increase 
                        in enrollment acreage.--Not later than 
                        3 years after the date of enactment of 
                        this clause, the Secretary shall--
                                    ``(I) conduct a review of 
                                the program under this 
                                subsection with respect to each 
                                State that has enrolled land in 
                                the program; and
                                    ``(II) notwithstanding 
                                clause (i)(I), increase the 
                                number of acres that may be 
                                enrolled by a State under 
                                clause (i)(I) to not more than 
                                150,000 acres, as determined by 
                                the Secretary.
                    ``(D) Owner or operator limitations.--
                            ``(i) Wetland.--
                                    ``(I) In general.--The 
                                maximum size of any wetland 
                                described in subparagraph 
                                (A)(i) of an owner or operator 
                                enrolled in the conservation 
                                reserve under this subsection 
                                shall be 10 contiguous acres, 
                                of which not more than 5 acres 
                                shall be eligible for payment.
                                    ``(II) Coverage.--All acres 
                                described in subclause (I) 
                                (including acres that are 
                                ineligible for payment) shall 
                                be covered by the conservation 
                                contract.
                            ``(ii) Buffer acreage.--The maximum 
                        size of any buffer acreage described in 
                        subparagraph (A)(ii) of an owner or 
                        operator enrolled in the conservation 
                        reserve under this subsection shall be 
                        the greater of--
                                    ``(I) 3 times the size of 
                                any wetland described in 
                                subparagraph (A)(i) to which 
                                the buffer acreage is 
                                contiguous; or
                                    ``(II) 150 feet on either 
                                side of the wetland.
                            ``(iii) Tracts.--The maximum size 
                        of any eligible acreage described in 
                        subparagraph (A) in a tract (as 
                        determined by the Secretary) of an 
                        owner or operator enrolled in the 
                        conservation reserve under this 
                        subsection shall be 40 acres.
            ``(3) Duties of owners and operators.--Under a 
        contract entered into under this subsection, during the 
        term of the contract, an owner or operator of a farm or 
        ranch shall agree--
                    ``(A) to restore the hydrology of the 
                wetland within the eligible acreage to the 
                maximum extent practicable, as determined by 
                the Secretary;
                    ``(B) to establish vegetative cover (which 
                may include emerging vegetation in water) on 
                the eligible acreage, as determined by the 
                Secretary; and
                    ``(C) to carry out other duties described 
                in section 1232.
            ``(4) Duties of the secretary.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), in return for a 
                contract entered into by an owner or operator 
                under this subsection, the Secretary shall make 
                payments and provide assistance to the owner or 
                operator in accordance with sections 1233 and 
                1234.
                    ``(B) Continuous signup.--The Secretary 
                shall use continuous signup under section 
                1234(c)(2)(B) to determine the acceptability of 
                contract offers and the amount of rental 
                payments under this subsection.
                    ``(C) Incentives.--The amounts payable to 
                owners and operators in the form of rental 
                payments under contracts entered into under 
                this subsection shall reflect incentives that 
                are provided to owners and operators to enroll 
                filterstrips in the conservation reserve under 
                section 1234.
    ``(i) Eligibility for Consideration.--On the expiration of 
a contract entered into under this subchapter, the land subject 
to the contract shall be eligible to be considered for 
reenrollment in the conservation reserve.
    ``(j) Balance of Natural Resource Purposes.--In determining 
the acceptability of contract offers under this subchapter, the 
Secretary shall ensure, to the maximum extent practicable, an 
equitable balance among the conservation purposes of soil 
erosion, water quality, and wildlife habitat.

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

    ``(a) In General.--Under the terms of a contract entered 
into under this subchapter, during the term of the contract, an 
owner or operator of a farm or ranch shall agree--
            ``(1) to implement a plan approved by the local 
        conservation district (or in an area not located within 
        a conservation district, a plan approved by the 
        Secretary) for converting eligible land normally 
        devoted to the production of an agricultural commodity 
        on the farm or ranch to a less intensive use (as 
        defined by the Secretary), such as pasture, permanent 
        grass, legumes, forbs, shrubs, or trees, substantially 
        in accordance with a schedule outlined in the plan;
            ``(2) to place highly erodible cropland subject to 
        the contract in the conservation reserve established 
        under this subchapter;
            ``(3) not to use the land for agricultural 
        purposes, except as permitted by the Secretary;
            ``(4) to establish approved vegetative cover (which 
        may include emerging vegetation in water), water cover 
        for the enhancement of wildlife, or, where practicable, 
        maintain existing cover on the land, except that--
                    ``(A) the water cover shall not include 
                ponds for the purpose of watering livestock, 
                irrigating crops, or raising fish for 
                commercial purposes; and
                    ``(B) the Secretary shall not terminate the 
                contract for failure to establish approved 
                vegetative or water cover on the land if--
                            ``(i) the failure to plant the 
                        cover was due to excessive rainfall or 
                        flooding;
                            ``(ii) the land subject to the 
                        contract that could practicably be 
                        planted to the cover is planted to the 
                        cover; and
                            ``(iii) the land on which the owner 
                        or operator was unable to plant the 
                        cover is planted to the cover after the 
                        wet conditions that prevented the 
                        planting subsides;
            ``(5) on a violation of a term or condition of the 
        contract at any time the owner or operator has control 
        of the land--
                    ``(A) to forfeit all rights to receive 
                rental payments and cost sharing payments under 
                the contract and to refund to the Secretary any 
                rental payments and cost sharing payments 
                received by the owner or operator under the 
                contract, together with interest on the 
                payments as determined by the Secretary, if the 
                Secretary, after considering the 
                recommendations of the soil conservation 
                district and the Natural Resources Conservation 
                Service, determines that the violation is of 
                such nature as to warrant termination of the 
                contract; or
                    ``(B) to refund to the Secretary, or accept 
                adjustments to, the rental payments and cost 
                sharing payments provided to the owner or 
                operator, as the Secretary considers 
                appropriate, if the Secretary determines that 
                the violation does not warrant termination of 
                the contract;
            ``(6) on the transfer of the right and interest of 
        the owner or operator in land subject to the contract--
                    ``(A) to forfeit all rights to rental 
                payments and cost sharing payments under the 
                contract; and
                    ``(B) to refund to the United States all 
                rental payments and cost sharing payments 
                received by the owner or operator, or accept 
                such payment adjustments or make such refunds 
                as the Secretary considers appropriate and 
                consistent with the objectives of this 
                subchapter;

        unless the transferee of the land agrees with the 
        Secretary to assume all obligations of the contract, 
        except that no refund of rental payments and cost 
        sharing payments shall be required if the land is 
        purchased by or for the United States Fish and Wildlife 
        Service, or the transferee and the Secretary agree to 
        modifications to the contract, in a case in which the 
        modifications are consistent with the objectives of the 
        program, as determined by the Secretary;
            ``(7) not to conduct any harvesting or grazing, nor 
        otherwise make commercial use of the forage, on land 
        that is subject to the contract, nor adopt any similar 
        practice specified in the contract by the Secretary as 
        a practice that would tend to defeat the purposes of 
        the contract, except that the Secretary may permit, 
        consistent with the conservation of soil, water 
        quality, and wildlife habitat (including habitat during 
        nesting seasons for birds in the area)--
                    ``(A) managed harvesting and grazing 
                (including the managed harvesting of biomass), 
                except that in permitting managed harvesting 
                and grazing, the Secretary--
                            ``(i) shall, in coordination with 
                        the State technical committee--
                                    ``(I) develop appropriate 
                                vegetation management 
                                requirements; and
                                    ``(II) identify periods 
                                during which harvesting and 
                                grazing under this paragraph 
                                may be conducted;
                            ``(ii) may permit harvesting and 
                        grazing or other commercial use of the 
                        forage on the land that is subject to 
                        the contract in response to a drought 
                        or other emergency; and
                            ``(iii) shall, in the case of 
                        routine managed harvesting or grazing 
                        or harvesting or grazing conducted in 
                        response to a drought or other 
                        emergency, reduce the rental payment 
                        otherwise payable under the contract by 
                        an amount commensurate with the 
                        economic value of the activity; and
                    ``(B) the installation of wind turbines, 
                except that in permitting the installation of 
                wind turbines, the Secretary shall determine 
                the number and location of wind turbines that 
                may be installed, taking into account--
                            ``(i) the location, size, and other 
                        physical characteristics of the land;
                            ``(ii) the extent to which the land 
                        contains wildlife and wildlife habitat; 
                        and
                            ``(iii) the purposes of the 
                        conservation reserve program under this 
                        subchapter;
            ``(8) not to conduct any planting of trees on land 
        that is subject to the contract unless the contract 
        specifies that the harvesting and commercial sale of 
        trees such as Christmas trees are prohibited, nor 
        otherwise make commercial use of trees on land that is 
        subject to the contract unless it is expressly 
        permitted in the contract, nor adopt any similar 
        practice specified in the contract by the Secretary as 
        a practice that would tend to defeat the purposes of 
        the contract, except that no contract shall prohibit 
        activities consistent with customary forestry practice, 
        such as pruning, thinning, or stand improvement of 
        trees, on land converted to forestry use;
            ``(9) not to adopt any practice specified by the 
        Secretary in the contract as a practice that would tend 
        to defeat the purposes of this subchapter; and
            ``(10) to comply with such additional provisions as 
        the Secretary determines are desirable and are included 
        in the contract to carry out this subchapter or to 
        facilitate the practical administration of this 
        subchapter.
    ``(b) Conservation Plans.--The plan referred to in 
subsection (a)(1)--
            ``(1) shall set forth--
                    ``(A) the conservation measures and 
                practices to be carried out by the owner or 
                operator during the term of the contract; and
                    ``(B) the commercial use, if any, to be 
                permitted on the land during the term; and
            ``(2) may provide for the permanent retirement of 
        any existing cropland base and allotment history for 
        the land.
    ``(c) Foreclosure.--
            ``(1) In general.--Notwithstanding any other 
        provision of law, an owner or operator who is a party 
        to a contract entered into under this subchapter may 
        not be required to make repayments to the Secretary of 
        amounts received under the contract if the land that is 
        subject to the contract has been foreclosed on and the 
        Secretary determines that forgiving the repayments is 
        appropriate in order to provide fair and equitable 
        treatment.
            ``(2) Resumption of control.--
                    ``(A) In general.--This subsection shall 
                not void the responsibilities of an owner or 
                operator under the contract if the owner or 
                operator resumes control over the land that is 
                subject to the contract within the period 
                specified in the contract.
                    ``(B) Contract.--On the resumption of the 
                control over the land by the owner or operator, 
                the provisions of the contract in effect on the 
                date of the foreclosure shall apply.

``SEC. 1233. DUTIES OF THE SECRETARY.

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

``SEC. 1234. PAYMENTS.

    ``(a) Timing.--The Secretary shall provide payment for 
obligations incurred by the Secretary under a contract entered 
into under this subchapter--
            ``(1) with respect to any cost-sharing payment 
        obligation incurred by the Secretary, as soon as 
        practicable after the obligation is incurred; and
            ``(2) with respect to any annual rental payment 
        obligation incurred by the Secretary--
                    ``(A) as soon as practicable after October 
                1 of each calendar year; or
                    ``(B) at the option of the Secretary, at 
                any time prior to such date during the year 
                that the obligation is incurred.
    ``(b) Federal Percentage of Cost Sharing Payments.--
            ``(1) In general.--In making cost sharing payments 
        to an owner or operator under a contract entered into 
        under this subchapter, the Secretary shall pay 50 
        percent of the cost of establishing water quality and 
        conservation measures and practices required under each 
        contract for which the Secretary determines that cost 
        sharing is appropriate and in the public interest.
            ``(2) Limitation.--The Secretary shall not make any 
        payment to an owner or operator under this subchapter 
        to the extent that the total amount of cost sharing 
        payments provided to the owner or operator from all 
        sources would exceed 100 percent of the total cost of 
        establishing measures and practices described in 
        paragraph (1).
            ``(3) Hardwood trees, windbreaks, shelterbelts, and 
        wildlife corridors.--
                    ``(A) Applicability.--This paragraph 
                applies to--
                            ``(i) land devoted to the 
                        production of hardwood trees, 
                        windbreaks, shelterbelts, or wildlife 
                        corridors under a contract entered into 
                        under this subchapter after November 
                        28, 1990; and
                            ``(ii) land converted to such 
                        production under section 1235A.
                    ``(B) Payments.--In making cost share 
                payments to an owner or operator of land 
                described in subparagraph (A), the Secretary 
                shall pay 50 percent of the reasonable and 
                necessary costs, as determined by the 
                Secretary, incurred by the owner or operator 
                for maintaining trees or shrubs, including the 
                cost of replanting (if the trees or shrubs were 
                lost due to conditions beyond the control of 
                the owner or operator), during not less than 
                the 2-year, and not more than the 4-year, 
                period beginning on the date of the planting of 
                the trees or shrubs, as determined appropriate 
                by the Secretary.
            ``(4) Hardwood tree planting.--The Secretary may 
        permit owners or operators that contract to devote at 
        least 10 acres of land to the production of hardwood 
        trees under this subchapter to extend the planting of 
        the trees over a 3-year period if at least \1/3\ of the 
        trees are planted in each of the first 2 years.
            ``(5) Other federal cost share assistance.--An 
        owner or operator shall not be eligible to receive or 
        retain cost share assistance under this subsection if 
        the owner or operator receives any other Federal cost 
        share assistance with respect to the land under any 
        other provision of law.
    ``(c) Annual Rental Payments.--
            ``(1) In general.--In determining the amount of 
        annual rental payments to be paid to owners and 
        operators for converting highly erodible cropland 
        normally devoted to the production of an agricultural 
        commodity to less intensive use, the Secretary may 
        consider, among other things, the amount necessary to 
        encourage owners or operators of highly erodible 
        cropland to participate in the program established by 
        this subchapter.
            ``(2) Method of determination.--The amounts payable 
        to owners or operators in the form of rental payments 
        under contracts entered into under this subchapter may 
        be determined through--
                    ``(A) the submission of bids for such 
                contracts by owners and operators in such 
                manner as the Secretary may prescribe; or
                    ``(B) such other means as the Secretary 
                determines are appropriate.
            ``(3) Acceptance of contract offers.--In 
        determining the acceptability of contract offers, the 
        Secretary may--
                    ``(A) take into consideration the extent to 
                which enrollment of the land that is the 
                subject of the contract offer would improve 
                soil resources, water quality, wildlife 
                habitat, or provide other environmental 
                benefits; and
                    ``(B) establish different criteria in 
                various States and regions of the United States 
                based on the extent to which water quality or 
                wildlife habitat may be improved or erosion may 
                be abated.
            ``(4) Hardwood tree acreage.--In the case of 
        acreage enrolled in the conservation reserve 
        established under this subchapter that is to be devoted 
        to hardwood trees, the Secretary may consider bids for 
        contracts under this subsection on a continuous basis.
    ``(d) Cash or In-Kind Payments.--
            ``(1) In general.--Except as otherwise provided in 
        this section, payments under this subchapter--
                    ``(A) shall be made in cash or in 
                commodities in such amount and on such time 
                schedule as is agreed on and specified in the 
                contract; and
                    ``(B) may be made in advance of 
                determination of performance.
            ``(2) Method of providing in-kind payments.--If the 
        payment to an owner or operator is made with in-kind 
        commodities, the payment shall be made by the Commodity 
        Credit Corporation--
                    ``(A) by delivery of the commodity involved 
                to the owner or operator at a warehouse or 
                other similar facility located in the county in 
                which the highly erodible cropland is located 
                or at such other location as is agreed to by 
                the Secretary and the owner or operator;
                    ``(B) by the transfer of negotiable 
                warehouse receipts; or
                    ``(C) by such other method, including the 
                sale of the commodity in commercial markets, as 
                is determined by the Secretary to be 
                appropriate to enable the owner or operator to 
                receive efficient and expeditious possession of 
                the commodity.
            ``(3) Cash payments.--
                    ``(A) Commodity credit corporation 
                stocks.--If stocks of a commodity acquired by 
                the Commodity Credit Corporation are not 
                readily available to make full payment in kind 
                to the owner or operator, the Secretary may 
                substitute full or partial payment in cash for 
                payment in kind.
                    ``(B) Special conservation reserve 
                enhancement program.--Payments to an owner or 
                operator under a special conservation reserve 
                enhancement program described in subsection 
                (f)(4) shall be in the form of cash only.
    ``(e) Payments on Death, Disability, or Succession.--If an 
owner or operator that is entitled to a payment under a 
contract entered into under this subchapter dies, becomes 
incompetent, is otherwise unable to receive the payment, or is 
succeeded by another person that renders or completes the 
required performance, the Secretary shall make the payment, in 
accordance with regulations prescribed by the Secretary and 
without regard to any other provision of law, in such manner as 
the Secretary determines is fair and reasonable in light of all 
of the circumstances.
    ``(f) Payment Limitation for Rental Payments.--
            ``(1) In general.--The total amount of rental 
        payments, including rental payments made in the form of 
        in-kind commodities, made to a person under this 
        subchapter for any fiscal year may not exceed $50,000.
            ``(2) Regulations.--
                    ``(A) In general.--The Secretary shall 
                promulgate regulations--
                            ``(i) defining the term `person' as 
                        used in this subsection; and
                            ``(ii) providing such terms and 
                        conditions as the Secretary determines 
                        necessary to ensure a fair and 
                        reasonable application of the 
                        limitation established by this 
                        subsection.
                    ``(B) Corporations and stockholders.--The 
                regulations promulgated by the Secretary on 
                December 18, 1970, under section 101 of the 
                Agricultural Act of 1970 (7 U.S.C. 1307), shall 
                be used to determine whether corporations and 
                their stockholders may be considered as 
                separate persons under this subsection.
            ``(3) Other payments.--Rental payments received by 
        an owner or operator shall be in addition to, and not 
        affect, the total amount of payments that the owner or 
        operator is otherwise eligible to receive under the 
        Farm Security and Rural Investment Act of 2002.
            ``(4) Special conservation reserve enhancement 
        program.--
                    ``(A) In general.--The provisions of this 
                subsection that limit payments to any person, 
                and section 1305(d) of the Agricultural 
                Reconciliation Act of 1987 (7 U.S.C. 1308 note; 
                Public Law 100-203), shall not be applicable to 
                payments received by a State, political 
                subdivision, or agency thereof in connection 
                with agreements entered into under a special 
                conservation reserve enhancement program 
                carried out by that entity that has been 
                approved by the Secretary.
                    ``(B) Agreements.--The Secretary may enter 
                into such agreements for payments to States 
                (including political subdivisions and agencies 
                of States) that the Secretary determines will 
                advance the purposes of this subchapter.
    ``(g) Other State or Local Assistance.--In addition to any 
payment under this subchapter, an owner or operator may receive 
cost share assistance, rental payments, or tax benefits from a 
State or subdivision thereof for enrolling land in the 
conservation reserve program.

``SEC. 1235. CONTRACTS.

    ``(a) Ownership or Operation Requirements.--
            ``(1) In general.--Except as provided in paragraph 
        (2), no contract shall be entered into under this 
        subchapter concerning land with respect to which the 
        ownership has changed in the 1-year period preceding 
        the first year of the contract period unless--
                    ``(A) the new ownership was acquired by 
                will or succession as a result of the death of 
                the previous owner;
                    ``(B) the new ownership was acquired before 
                January 1, 1985;
                    ``(C) the Secretary determines that the 
                land was acquired under circumstances that give 
                adequate assurance that the land was not 
                acquired for the purpose of placing the land in 
                the program established by this subchapter; or
                    ``(D) the ownership change occurred due to 
                foreclosure on the land and the owner of the 
                land immediately before the foreclosure 
                exercises a right of redemption from the 
                mortgage holder in accordance with State law.
            ``(2) Exceptions.--Paragraph (1) shall not--
                    ``(A) prohibit the continuation of an 
                agreement by a new owner after an agreement has 
                been entered into under this subchapter; or
                    ``(B) require a person to own the land as a 
                condition of eligibility for entering into the 
                contract if the person--
                            ``(i) has operated the land to be 
                        covered by a contract under this 
                        section for at least 1 year preceding 
                        the date of the contract or since 
                        January 1, 1985, whichever is later; 
                        and
                            ``(ii) controls the land for the 
                        contract period.
    ``(b) Sales or Transfers.--If, during the term of a 
contract entered into under this subchapter, an owner or 
operator of land subject to the contract sells or otherwise 
transfers the ownership or right of occupancy of the land, the 
new owner or operator of the land may--
            ``(1) continue the contract under the same terms or 
        conditions;
            ``(2) enter into a new contract in accordance with 
        this subchapter; or
            ``(3) elect not to participate in the program 
        established by this subchapter.
    ``(c) Modifications.--
            ``(1) In general.--The Secretary may modify a 
        contract entered into with an owner or operator under 
        this subchapter if--
                    ``(A) the owner or operator agrees to the 
                modification; and
                    ``(B) the Secretary determines that the 
                modification is desirable--
                            ``(i) to carry out this subchapter;
                            ``(ii) to facilitate the practical 
                        administration of this subchapter; or
                            ``(iii) to achieve such other goals 
                        as the Secretary determines are 
                        appropriate, consistent with this 
                        subchapter.
            ``(2) Production of agricultural commodities.--The 
        Secretary may modify or waive a term or condition of a 
        contract entered into under this subchapter in order to 
        permit all or part of the land subject to such contract 
        to be devoted to the production of an agricultural 
        commodity during a crop year, subject to such 
        conditions as the Secretary determines are appropriate.
    ``(d) Termination.--
            ``(1) In general.--The Secretary may terminate a 
        contract entered into with an owner or operator under 
        this subchapter if--
                    ``(A) the owner or operator agrees to the 
                termination; and
                    ``(B) the Secretary determines that the 
                termination would be in the public interest.
            ``(2) Notice to congressional committees.--At least 
        90 days before taking any action to terminate under 
        paragraph (1) all conservation reserve contracts 
        entered into under this subchapter, the Secretary shall 
        provide to the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate written notice of 
        the action.
    ``(e) Early Termination by Owner or Operator.--
            ``(1) Early termination.--
                    ``(A) In general.--The Secretary shall 
                allow a participant that entered into a 
                contract under this subchapter before January 
                1, 1995, to terminate the contract at any time 
                if the contract has been in effect for at least 
                5 years.
                    ``(B) Liability for contract violation.--
                The termination shall not relieve the 
                participant of liability for a contract 
                violation occurring before the date of the 
                termination.
                    ``(C) Notice to secretary.--The participant 
                shall provide the Secretary with reasonable 
                notice of the desire of the participant to 
                terminate the contract.
            ``(2) Certain land excepted.--The following land 
        shall not be subject to an early termination of 
        contract under this subsection:
                    ``(A) Filterstrips, waterways, strips 
                adjacent to riparian areas, windbreaks, and 
                shelterbelts.
                    ``(B) Land with an erodibility index of 
                more than 15.
                    ``(C) Other land of high environmental 
                value (including wetland), as determined by the 
                Secretary.
            ``(3) Effective date.--The contract termination 
        shall become effective 60 days after the date on which 
        the owner or operator submits the notice required under 
        paragraph (1)(C).
            ``(4) Prorated rental payment.--If a contract 
        entered into under this subchapter is terminated under 
        this subsection before the end of the fiscal year for 
        which a rental payment is due, the Secretary shall 
        provide a prorated rental payment covering the portion 
        of the fiscal year during which the contract was in 
        effect.
            ``(5) Renewed enrollment.--The termination of a 
        contract entered into under this subchapter shall not 
        affect the ability of the owner or operator that 
        requested the termination to submit a subsequent bid to 
        enroll the land that was subject to the contract into 
        the conservation reserve.
            ``(6) Conservation requirements.--If land that was 
        subject to a contract is returned to production of an 
        agricultural commodity, the conservation requirements 
        under subtitles B and C shall apply to the use of the 
        land to the extent that the requirements are similar to 
        those requirements imposed on other similar land in the 
        area, except that the requirements may not be more 
        onerous than the requirements imposed on other land.

``SEC. 1235A. CONVERSION OF LAND SUBJECT TO CONTRACT TO OTHER 
                    CONSERVING USES.

    ``(a) Conversion to Trees.--
            ``(1) In general.--The Secretary shall permit an 
        owner or operator that has entered into a contract 
        under this subchapter that is in effect on November 28, 
        1990, to convert areas of highly erodible cropland that 
        are subject to the contract, and that are devoted to 
        vegetative cover, from that use to hardwood trees, 
        windbreaks, shelterbelts, or wildlife corridors.
            ``(2) Terms.--
                    ``(A) Extension of contract.--With respect 
                to a contract that is modified under this 
                section that provides for the planting of 
                hardwood trees, windbreaks, shelterbelts, or 
                wildlife corridors, if the original term of the 
                contract was less than 15 years, the owner or 
                operator may extend the contract to a term of 
                not to exceed 15 years.
                    ``(B) Cost share assistance.--The Secretary 
                shall pay 50 percent of the cost of 
                establishing conservation measures and 
                practices authorized under this subsection for 
                which the Secretary determines the cost sharing 
                is appropriate and in the public interest.
    ``(b) Conversion to Wetland.--The Secretary shall permit an 
owner or operator that has entered into a contract under this 
subchapter that is in effect on November 28, 1990, to restore 
areas of highly erodible cropland that are devoted to 
vegetative cover under the contract to wetland if--
            ``(1) the areas are prior converted wetland;
            ``(2) the owner or operator of the areas enters 
        into an agreement to provide the Secretary with a long-
        term or permanent easement under subchapter C covering 
        the areas;
            ``(3) there is a high probability that the prior 
        converted area can be successfully restored to wetland 
        status; and
            ``(4) the restoration of the areas otherwise meets 
        the requirements of subchapter C.
    ``(c) Limitation.--The Secretary shall not incur, through a 
conversion under this section, any additional expense on the 
acres, including the expense involved in the original 
establishment of the vegetative cover, that would result in 
cost share for costs under this section in excess of the costs 
that would have been subject to cost share for the new practice 
had that practice been the original practice.
    ``(d) Condition of Contract.--An owner or operator shall as 
a condition of entering into a contract under subsection (a) 
participate in the Forest Stewardship Program established under 
section 5 of the Cooperative Forestry Assistance Act of 1978 
(16 U.S.C. 2103a).''.
    (b) Study on Economic Effects.--
            (1) In general.--Not later than 18 months after the 
        date of enactment of this Act, the Secretary of 
        Agriculture shall submit to the Committee on 
        Agriculture of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate a report that describes the economic and 
        social effects on rural communities resulting from the 
        conservation reserve program established under 
        subchapter B of chapter 1 of subtitle D of title XII of 
        the Food Security Act of 1985 (16 U.S.C. 3831 et seq.).
            (2) Components.--The study under paragraph (1) 
        shall include analyses of--
                    (A) the impact that enrollments in the 
                conservation reserve program have on rural 
                businesses, civic organizations, and community 
                services (such as schools, public safety, and 
                infrastructure), particularly in communities 
                with a large percentage of whole farm 
                enrollments;
                    (B) the effect that those enrollments have 
                on rural population and beginning farmers 
                (including a description of any connection 
                between the rate of enrollment and the 
                incidence of absentee ownership);
                    (C)(i) the manner in which differential per 
                acre payment rates potentially impact the types 
                of land (by productivity) enrolled;
                    (ii) changes to the per acre payment rates 
                that may affect that impact; and
                    (iii) the manner in which differential per 
                acre payment rates could facilitate retention 
                of productive agricultural land in agriculture; 
                and
                    (D) the effect of enrollment on 
                opportunities for recreational activities 
                (including hunting and fishing).

                  Subtitle C--Wetlands Reserve Program

SEC. 2201. REAUTHORIZATION.

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

SEC. 2202. ENROLLMENT.

    Section 1237 of the Food Security Act of 1985 (16 U.S.C. 
3837) is amended--
            (1) by striking subsection (b) and inserting the 
        following:
    ``(b) Enrollment Conditions.--
            ``(1) Maximum enrollment.--The total number of 
        acres enrolled in the wetlands reserve program shall 
        not exceed 2,275,000 acres, of which, to the maximum 
        extent practicable, the Secretary shall enroll 250,000 
        acres in each calendar year.
            ``(2) Methods of enrollment.--The Secretary shall 
        enroll acreage into the wetlands reserve program 
        through the use of permanent easements, 30-year 
        easements, restoration cost share agreements, or any 
        combination of those options.''; and
            (2) by striking subsection (g).

SEC. 2203. EASEMENTS AND AGREEMENTS.

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

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

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

              Subtitle D--Environmental Quality Incentives

SEC. 2301. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

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

``SEC. 1240. PURPOSES.

    ``The purposes of the environmental quality incentives 
program established by this chapter are to promote agricultural 
production and environmental quality as compatible goals, and 
to optimize environmental benefits, by--
            ``(1) assisting producers in complying with local, 
        State, and national regulatory requirements 
        concerning--
                    ``(A) soil, water, and air quality;
                    ``(B) wildlife habitat; and
                    ``(C) surface and ground water 
                conservation;
            ``(2) avoiding, to the maximum extent practicable, 
        the need for resource and regulatory programs by 
        assisting producers in protecting soil, water, air, and 
        related natural resources and meeting environmental 
        quality criteria established by Federal, State, tribal, 
        and local agencies;
            ``(3) providing flexible assistance to producers to 
        install and maintain conservation practices that 
        enhance soil, water, related natural resources 
        (including grazing land and wetland), and wildlife 
        while sustaining production of food and fiber;
            ``(4) assisting producers to make beneficial, cost 
        effective changes to cropping systems, grazing 
        management, nutrient management associated with 
        livestock, pest or irrigation management, or other 
        practices on agricultural land; and
            ``(5) consolidating and streamlining conservation 
        planning and regulatory compliance processes to reduce 
        administrative burdens on producers and the cost of 
        achieving environmental goals.

``SEC. 1240A. DEFINITIONS.

    ``In this chapter:
            ``(1) Beginning farmer or rancher.--The term 
        `beginning farmer or rancher' has the meaning provided 
        under section 343(a) of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 1999(a)).
            ``(2) Eligible land.--
                    ``(A) In general.--The term `eligible land' 
                means land on which agricultural commodities or 
                livestock are produced.
                    ``(B) Inclusions.--The term `eligible land' 
                includes--
                            ``(i) cropland;
                            ``(ii) grassland;
                            ``(iii) rangeland;
                            ``(iv) pasture land;
                            ``(v) private, nonindustrial forest 
                        land; and
                            ``(vi) other agricultural land that 
                        the Secretary determines poses a 
                        serious threat to soil, air, water, or 
                        related resources.
            ``(3) Land management practice.--The term `land 
        management practice' means a site-specific nutrient or 
        manure management, integrated pest management, 
        irrigation management, tillage or residue management, 
        grazing management, air quality management, or other 
        land management practice carried out on eligible land 
        that the Secretary determines is needed to protect from 
        degradation, in the most cost-effective manner, water, 
        soil, or related resources.
            ``(4) Livestock.--The term `livestock' means dairy 
        cattle, beef cattle, laying hens, broilers, turkeys, 
        swine, sheep, and other such animals as are determined 
        by the Secretary.
            ``(5) Practice.--The term `practice' means 1 or 
        more structural practices, land management practices, 
        and comprehensive nutrient management planning 
        practices.
            ``(6) Structural practice.--The term `structural 
        practice' means--
                    ``(A) the establishment on eligible land of 
                a site-specific animal waste management 
                facility, terrace, grassed waterway, contour 
                grass strip, filterstrip, tailwater pit, 
                permanent wildlife habitat, constructed 
                wetland, or other structural practice that the 
                Secretary determines is needed to protect, in 
                the most cost effective manner, water, soil, or 
                related resources from degradation; and
                    ``(B) the capping of abandoned wells on 
                eligible land.

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

    ``(a) Establishment.--
            ``(1) In general.--During each of the 2002 through 
        2007 fiscal years, the Secretary shall provide cost-
        share payments and incentive payments to producers that 
        enter into contracts with the Secretary under the 
        program.
            ``(2) Eligible practices.--With respect to 
        practices implemented under this chapter--
                    ``(A) a producer that implements a 
                structural practice in accordance with this 
                chapter shall be eligible to receive cost-share 
                payments; and
                    ``(B) a producer that implements a land 
                management practice, or develops a 
                comprehensive nutrient management plan, in 
                accordance with this chapter shall be eligible 
                to receive incentive payments.
    ``(b) Practices and Term.--
            ``(1) Practices.--A contract under this chapter may 
        apply to 1 or more structural practices, land 
        management practices, and comprehensive nutrient 
        management practices.
            ``(2) Term.--A contract under this chapter shall 
        have a term that--
                    ``(A) at a minimum, is equal to the period 
                beginning on the date on which the contract is 
                entered into and ending on the date that is 1 
                year after the date on which all practices 
                under the contract have been implemented; but
                    ``(B) not to exceed 10 years.
    ``(c) Bidding Down.--If the Secretary determines that the 
environmental values of 2 or more applications for cost-share 
payments or incentive payments are comparable, the Secretary 
shall not assign a higher priority to the application only 
because it would present the least cost to the program 
established under the program.
    ``(d) Cost-Share Payments.--
            ``(1) In general.--Except as provided in paragraph 
        (2), the cost-share payments provided to a producer 
        proposing to implement 1 or more practices under the 
        program shall be not more than 75 percent of the cost 
        of the practice, as determined by the Secretary.
            ``(2) Exceptions.--
                    ``(A) Limited resource and beginning 
                farmers.--The Secretary may increase the amount 
                provided to a producer under paragraph (1) to 
                not more than 90 percent if the producer is a 
                limited resource or beginning farmer or 
                rancher, as determined by the Secretary.
                    ``(B) Cost-share assistance from other 
                sources.--Except as provided in paragraph (3), 
                any cost-share payments received by a producer 
                from a State or private organization or person 
                for the implementation of 1 or more practices 
                on eligible land of the producer shall be in 
                addition to the payments provided to the 
                producer under paragraph (1).
            ``(3) Other payments.--A producer shall not be 
        eligible for cost-share payments for practices on 
        eligible land under the program if the producer 
        receives cost-share payments or other benefits for the 
        same practice on the same land under chapter 1 and the 
        program.
    ``(e) Incentive Payments.--
            ``(1) In general.--The Secretary shall make 
        incentive payments in an amount and at a rate 
        determined by the Secretary to be necessary to 
        encourage a producer to perform 1 or more land 
        management practices.
            ``(2) Special rule.--In determining the amount and 
        rate of incentive payments, the Secretary may accord 
        great significance to a practice that promotes residue, 
        nutrient, pest, invasive species, or air quality 
        management.
    ``(f) Modification or Termination of Contracts.--
            ``(1) Voluntary modification or termination.--The 
        Secretary may modify or terminate a contract entered 
        into with a producer under this chapter if--
                    ``(A) the producer agrees to the 
                modification or termination; and
                    ``(B) the Secretary determines that the 
                modification or termination is in the public 
                interest.
            ``(2) Involuntary termination.--The Secretary may 
        terminate a contract under this chapter if the 
        Secretary determines that the producer violated the 
        contract.
    ``(g) Allocation of Funding.--For each of fiscal years 2002 
through 2007, 60 percent of the funds made available for cost-
share payments and incentive payments under this chapter shall 
be targeted at practices relating to livestock production.

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

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

``SEC. 1240D. DUTIES OF PRODUCERS.

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

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

    ``(a) In General.--To be eligible to receive cost-share 
payments or incentive payments under the program, a producer 
shall submit to the Secretary for approval a plan of operations 
that--
            ``(1) specifies practices covered under the 
        program;
            ``(2) includes such terms and conditions as the 
        Secretary considers necessary to carry out the program, 
        including a description of the purposes to be met by 
        the implementation of the plan; and
            ``(3) in the case of a confined livestock feeding 
        operation, provides for development and implementation 
        of a comprehensive nutrient management plan, if 
        applicable.
    ``(b) Avoidance of Duplication.--The Secretary shall, to 
the maximum extent practicable, eliminate duplication of 
planning activities under the program under this chapter and 
comparable conservation programs.

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

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

``SEC. 1240G. LIMITATION ON PAYMENTS.

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

``SEC. 1240H. CONSERVATION INNOVATION GRANTS.

    ``(a) In General.--The Secretary may pay the cost of 
competitive grants that are intended to stimulate innovative 
approaches to leveraging Federal investment in environmental 
enhancement and protection, in conjunction with agricultural 
production, through the program.
    ``(b) Use.--The Secretary may provide grants under this 
section to governmental and nongovernmental organizations and 
persons, on a competitive basis, to carry out projects that--
            ``(1) involve producers that are eligible for 
        payments or technical assistance under the program;
            ``(2) implement projects, such as--
                    ``(A) market systems for pollution 
                reduction; and
                    ``(B) innovative conservation practices, 
                including the storing of carbon in the soil; 
                and
            ``(3) leverage funds made available to carry out 
        the program under this chapter with matching funds 
        provided by State and local governments and private 
        organizations to promote environmental enhancement and 
        protection in conjunction with agricultural production.
    ``(c) Cost Share.--The amount of a grant made under this 
section to carry out a project shall not exceed 50 percent of 
the cost of the project.

``SEC. 1240I. GROUND AND SURFACE WATER CONSERVATION.

    ``(a) Establishment.--In carrying out the program under 
this chapter, subject to subsection (b), the Secretary shall 
promote ground and surface water conservation by providing 
cost-share payments, incentive payments, and loans to producers 
to carry out eligible water conservation activities with 
respect to the agricultural operations of producers, to--
            ``(1) improve irrigation systems;
            ``(2) enhance irrigation efficiencies;
            ``(3) convert to--
                    ``(A) the production of less water-
                intensive agricultural commodities; or
                    ``(B) dryland farming;
            ``(4) improve the storage of water through measures 
        such as water banking and groundwater recharge;
            ``(5) mitigate the effects of drought; or
            ``(6) institute other measures that improve 
        groundwater and surface water conservation, as 
        determined by the Secretary, in the agricultural 
        operations of producers.
    ``(b) Net Savings.--The Secretary may provide assistance to 
a producer under this section only if the Secretary determines 
that the assistance will facilitate a conservation measure that 
results in a net savings in groundwater or surface water 
resources in the agricultural operation of the producer.
    ``(c) Funding.--Of the funds of the Commodity Credit 
Corporation, in addition to amounts made available under 
section 1241(a)(6) to carry out this chapter, the Secretary 
shall use--
            ``(1) to carry out this section--
                    ``(A) $25,000,000 for fiscal year 2002;
                    ``(B) $45,000,000 for fiscal year 2003; and
                    ``(C) $60,000,000 for each of fiscal years 
                2004 through 2007; and
            ``(2) $50,000,000 to carry out water conservation 
        activities in Klamath Basin, California and Oregon, to 
        be made available as soon as practicable after the date 
        of enactment of this section.''.

                     Subtitle E--Grassland Reserve

SEC. 2401. GRASSLAND RESERVE PROGRAM.

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

               ``Subchapter C--Grassland Reserve Program

``SEC. 1238N. GRASSLAND RESERVE PROGRAM.

    ``(a) Establishment.--The Secretary shall establish a 
grassland reserve program (referred to in this subchapter as 
the `program') to assist owners in restoring and conserving 
eligible land described in subsection (c).
    ``(b) Enrollment Conditions.--
            ``(1) Maximum enrollment.--The total number of 
        acres enrolled in the program shall not exceed 
        2,000,000 acres of restored or improved grassland, 
        rangeland, and pastureland.
            ``(2) Methods of enrollment.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall enroll in 
                the program from a willing owner not less than 
                40 contiguous acres of land through the use 
                of--
                            ``(i) a 10-year, 15-year, or 20-
                        year rental agreement;
                            ``(ii)(I) a 30-year rental 
                        agreement or permanent or 30-year 
                        easement; or
                            ``(II) in a State that imposes a 
                        maximum duration for easements, an 
                        easement for the maximum duration 
                        allowed under State law.
                    ``(B) Waiver.--The Secretary may enroll in 
                the program such parcels of land that are less 
                than 40 acres as the Secretary determines are 
                appropriate to achieve the purposes of the 
                program.
            ``(3) Limitation on use of easements and rental 
        agreements.--Of the total amount of funds expended 
        under the program to acquire easements and rental 
        agreements described in paragraph (2)(A)--
                    ``(A) not more than 40 percent shall be 
                used for rental agreements described in 
                paragraph (2)(A)(i); and
                    ``(B) not more than 60 percent shall be 
                used for easements and rental agreements 
                described in paragraph (2)(A)(ii).
    ``(c) Eligible Land.--Land shall be eligible to be enrolled 
in the program if the Secretary determines that the land is 
private land that is--
            ``(1) grassland, land that contains forbs, or 
        shrubland (including improved rangeland and 
        pastureland); or
            ``(2) land that--
                    ``(A) is located in an area that has been 
                historically dominated by grassland, forbs, or 
                shrubland; and
                    ``(B) has potential to serve as habitat for 
                animal or plant populations of significant 
                ecological value if the land is--
                            ``(i) retained in the current use 
                        of the land; or
                            ``(ii) restored to a natural 
                        condition; or
            ``(3) land that is incidental to land described in 
        paragraph (1) or (2), if the incidental land is 
        determined by the Secretary to be necessary for the 
        efficient administration of an agreement or easement.

``SEC. 1238O. REQUIREMENTS RELATING TO EASEMENTS AND AGREEMENTS.

    ``(a) Requirements of Landowner.--
            ``(1) In general.--To be eligible to enroll land in 
        the program through the grant of an easement, the owner 
        of the land shall enter into an agreement with the 
        Secretary--
                    ``(A) to grant an easement that applies to 
                the land to the Secretary;
                    ``(B) to create and record an appropriate 
                deed restriction in accordance with applicable 
                State law to reflect the easement;
                    ``(C) to provide a written statement of 
                consent to the easement signed by persons 
                holding a security interest or any vested 
                interest in the land;
                    ``(D) to provide proof of unencumbered 
                title to the underlying fee interest in the 
                land that is the subject of the easement; and
                    ``(E) to comply with the terms of the 
                easement and restoration agreement.
            ``(2) Agreements.--To be eligible to enroll land in 
        the program under an agreement, the owner or operator 
        of the land shall agree--
                    ``(A) to comply with the terms of the 
                agreement (including any related restoration 
                agreements); and
                    ``(B) to the suspension of any existing 
                cropland base and allotment history for the 
                land under a program administered by the 
                Secretary.
    ``(b) Terms of Easement or Rental Agreement.--An easement 
or rental agreement under subsection (a) shall--
            ``(1) permit--
                    ``(A) common grazing practices, including 
                maintenance and necessary cultural practices, 
                on the land in a manner that is consistent with 
                maintaining the viability of grassland, forb, 
                and shrub species common to that locality;
                    ``(B) subject to appropriate restrictions 
                during the nesting season for birds in the 
                local area that are in significant decline or 
                are conserved in accordance with Federal or 
                State law, as determined by the Natural 
                Resources Conservation Service State 
                conservationist, haying, mowing, or harvesting 
                for seed production; and
                    ``(C) fire rehabilitation and construction 
                of fire breaks and fences (including placement 
                of the posts necessary for fences);
            ``(2) prohibit--
                    ``(A) the production of crops (other than 
                hay), fruit trees, vineyards, or any other 
                agricultural commodity that requires breaking 
                the soil surface; and
                    ``(B) except as permitted under this 
                subsection or subsection (d), the conduct of 
                any other activity that would disturb the 
                surface of the land covered by the easement or 
                rental agreement; and
            ``(3) include such additional provisions as the 
        Secretary determines are appropriate to carry out or 
        facilitate the administration of this subchapter.
    ``(c) Evaluation and Ranking of Easement and Rental 
Agreement Applications.--
            ``(1) In general.--The Secretary shall establish 
        criteria to evaluate and rank applications for 
        easements and rental agreements under this subchapter.
            ``(2) Considerations.--In establishing the 
        criteria, the Secretary shall emphasize support for--
                    ``(A) grazing operations;
                    ``(B) plant and animal biodiversity; and
                    ``(C) grassland, land that contains forbs, 
                and shrubland under the greatest threat of 
                conversion.
    ``(d) Restoration Agreements.--
            ``(1) In general.--The Secretary shall prescribe 
        the terms of a restoration agreement by which 
        grassland, land that contains forbs, or shrubland that 
        is subject to an easement or rental agreement entered 
        into under the program shall be restored.
            ``(2) Requirements.--The restoration agreement 
        shall describe the respective duties of the owner and 
        the Secretary (including the Federal share of 
        restoration payments and technical assistance).
    ``(e) Violations.--On a violation of the terms or 
conditions of an easement, rental agreement, or restoration 
agreement entered into under this section--
            ``(1) the easement or rental agreement shall remain 
        in force; and
            ``(2) the Secretary may require the owner to refund 
        all or part of any payments received by the owner under 
        this subchapter, with interest on the payments as 
        determined appropriate by the Secretary.

``SEC. 1238P. DUTIES OF SECRETARY.

    ``(a) In general.--In return for the granting of an 
easement, or the execution of a rental agreement, by an owner 
under this subchapter, the Secretary shall, in accordance with 
this section--
            ``(1) make easement or rental agreement payments to 
        the owner in accordance with subsection (b); and
            ``(2) make payments to the owner for the Federal 
        share of the cost of restoration in accordance with 
        subsection (c).
    ``(b) Payments.--
            ``(1) Easement payments.--
                    ``(A) Amount.--In return for the granting 
                of an easement by an owner under this 
                subchapter, the Secretary shall make easement 
                payments to the owner in an amount equal to--
                            ``(i) in the case of a permanent 
                        easement, the fair market value of the 
                        land less the grazing value of the land 
                        encumbered by the easement; and
                            ``(ii) in the case of a 30-year 
                        easement or an easement for the maximum 
                        duration allowed under applicable State 
                        law, 30 percent of the fair market 
                        value of the land less the grazing 
                        value of the land for the period during 
                        which the land is encumbered by the 
                        easement.
                    ``(B) Schedule.--Easement payments may be 
                provided in not less than 1 payment nor more 
                than 10 annual payments of equal or unequal 
                amount, as agreed to by the Secretary and the 
                owner.
            ``(2) Rental agreement payments.--In return for 
        entering into a rental agreement by an owner under this 
        subchapter, the Secretary shall make annual payments to 
        the owner during the term of the rental agreement in an 
        amount that is not more than 75 percent of the grazing 
        value of the land covered by the contract.
    ``(c) Federal Share of Restoration.--The Secretary shall 
make payments to an owner under this section of not more than--
            ``(1) in the case of grassland, land that contains 
        forbs, or shrubland that has never been cultivated, 90 
        percent of the costs of carrying out measures and 
        practices necessary to restore functions and values of 
        that land; or
            ``(2) in the case of restored grassland, land that 
        contains forbs, or shrubland, 75 percent of those 
        costs.
    ``(d) Payments to Others.--If an owner that is entitled to 
a payment under this subchapter dies, becomes incompetent, is 
otherwise unable to receive the payment, or is succeeded by 
another person who renders or completes the required 
performance, the Secretary shall make the payment, in 
accordance with regulations promulgated by the Secretary and 
without regard to any other provision of law, in such manner as 
the Secretary determines is fair and reasonable in light of all 
the circumstances.

``SEC. 1238Q. DELEGATION TO PRIVATE ORGANIZATIONS.

    ``(a) In General.--The Secretary may permit a private 
conservation or land trust organization (referred to in this 
section as a `private organization') or a State agency to hold 
and enforce an easement under this subchapter, in lieu of the 
Secretary, subject to the right of the Secretary to conduct 
periodic inspections and enforce the easement, if--
            ``(1) the Secretary determines that granting the 
        permission will promote protection of grassland, land 
        that contains forbs, and shrubland;
            ``(2) the owner authorizes the private organization 
        or State agency to hold and enforce the easement; and
            ``(3) the private organization or State agency 
        agrees to assume the costs incurred in administering 
        and enforcing the easement, including the costs of 
        restoration or rehabilitation of the land as specified 
        by the owner and the private organization or State 
        agency.
    ``(b) Application.--A private organization or State agency 
that seeks to hold and enforce an easement under this 
subchapter shall apply to the Secretary for approval.
    ``(c) Approval by Secretary.--The Secretary may approve a 
private organization to hold and enforce an easement under this 
subchapter if (as determined by the Secretary) the private 
organization--
            ``(1)(A) is an organization described in section 
        501(c)(3) of the Internal Revenue Code of 1986 that is 
        exempt from taxation under section 501(a) of that Code; 
        or
            ``(B) is described in section 509(a)(3), and is 
        controlled by an organization described in section 
        509(a)(2), of that Code;
            ``(2) has the relevant experience necessary to 
        administer grassland and shrubland easements;
            ``(3) has a charter that describes the commitment 
        of the private organization to conserving ranchland, 
        agricultural land, or grassland for grazing and 
        conservation purposes; and
            ``(4) has the resources necessary to effectuate the 
        purposes of the charter.
    ``(d) Reassignment.--
            ``(1) In general.--If a private organization 
        holding an easement on land under this subchapter 
        terminates, not later than 30 days after termination of 
        the private organization, the owner of the land shall 
        reassign the easement to--
                    ``(A) a new private organization that is 
                approved by the Secretary; or
                    ``(B) the Secretary.
            ``(2) Notification of secretary.--
                    ``(A) In general.--If the easement is 
                reassigned to a new private organization, not 
                later than 60 days after the date of 
                reassignment, the owner and the new 
                organization shall notify the Secretary in 
                writing that a reassignment for termination has 
                been made.
                    ``(B) Failure to notify.--If the owner and 
                the new organization fail to notify the 
                Secretary of the reassignment in accordance 
                with subparagraph (A), the easement shall 
                revert to the control of the Secretary.''.

                Subtitle F--Other Conservation Programs

SEC. 2501. AGRICULTURAL MANAGEMENT ASSISTANCE.

    Section 524 of the Federal Crop Insurance Act (7 U.S.C. 
1524) is amended by striking subsection (b) and inserting the 
following:
    ``(b) Agricultural Management Assistance.--
            ``(1) Authority.--The Secretary shall provide 
        financial assistance to producers in the States of 
        Connecticut, Delaware, Maryland, Massachusetts, Maine, 
        Nevada, New Hampshire, New Jersey, New York, 
        Pennsylvania, Rhode Island, Utah, Vermont, West 
        Virginia, and Wyoming.
            ``(2) Uses.--A producer may use financial 
        assistance provided under this subsection to--
                    ``(A) construct or improve--
                            ``(i) watershed management 
                        structures; or
                            ``(ii) irrigation structures;
                    ``(B) plant trees to form windbreaks or to 
                improve water quality;
                    ``(C) mitigate financial risk through 
                production or marketing diversification or 
                resource conservation practices, including--
                            ``(i) soil erosion control;
                            ``(ii) integrated pest management;
                            ``(iii) organic farming; or
                            ``(iv) to develop and implement a 
                        plan to create marketing opportunities 
                        for the producer, including through 
                        value-added processing;
                    ``(D) enter into futures, hedging, or 
                options contracts in a manner designed to help 
                reduce production, price, or revenue risk;
                    ``(E) enter into agricultural trade options 
                as a hedging transaction to reduce production, 
                price, or revenue risk; or
                    ``(F) conduct any other activity relating 
                to an activity described in subparagraphs (A) 
                through (E), as determined by the Secretary.
            ``(3) Payment limitation.--The total amount of 
        payments made to a person (as defined in section 
        1001(5) of the Food Security Act (7 U.S.C. 1308(5))) 
        under this subsection for any year may not exceed 
        $50,000.
            ``(4) Commodity credit corporation.--
                    ``(A) In general.--The Secretary shall 
                carry out this subsection through the Commodity 
                Credit Corporation.
                    ``(B) Funding.--
                            ``(i) In general.--Except as 
                        provided in clause (ii), the Commodity 
                        Credit Corporation shall make available 
                        to carry out this subsection not less 
                        than $10,000,000 for each fiscal year.
                            ``(ii) Exception.--For each of 
                        fiscal years 2003 through 2007, the 
                        Commodity Credit Corporation shall make 
                        available to carry out this subsection 
                        $20,000,000.''.

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

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

                ``CHAPTER 5--OTHER CONSERVATION PROGRAMS

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

    ``(a) Purpose.--It is the purpose of this section to 
authorize the Secretary to provide a coordinated technical, 
educational, and related assistance program to conserve and 
enhance private grazing land resources and provide related 
benefits to all citizens of the United States by--
            ``(1) establishing a coordinated and cooperative 
        Federal, State, and local grazing conservation program 
        for management of private grazing land;
            ``(2) strengthening technical, educational, and 
        related assistance programs that provide assistance to 
        owners and managers of private grazing land;
            ``(3) conserving and improving wildlife habitat on 
        private grazing land;
            ``(4) conserving and improving fish habitat and 
        aquatic systems through grazing land conservation 
        treatment;
            ``(5) protecting and improving water quality;
            ``(6) improving the dependability and consistency 
        of water supplies;
            ``(7) identifying and managing weed, noxious weed, 
        and brush encroachment problems on private grazing 
        land; and
            ``(8) integrating conservation planning and 
        management decisions by owners and managers of private 
        grazing land, on a voluntary basis.
    ``(b) Definitions.--In this section:
            ``(1) Department.--The term `Department' means the 
        Department of Agriculture.
            ``(2) Private grazing land.--The term `private 
        grazing land' means private, State-owned, tribally-
        owned, and any other non-federally owned rangeland, 
        pastureland, grazed forest land, and hay land.
            ``(3) Secretary.--The term `Secretary' means the 
        Secretary of Agriculture.
    ``(c) Private Grazing Land Conservation Assistance.--
            ``(1) Assistance to grazing landowners and 
        others.--Subject to the availability of appropriations 
        for this section, the Secretary shall establish a 
        voluntary program to provide technical, educational, 
        and related assistance to owners and managers of 
        private grazing land and public agencies, through local 
        conservation districts, to enable the landowners, 
        managers, and public agencies to voluntarily carry out 
        activities that are consistent with this section, 
        including--
                    ``(A) maintaining and improving private 
                grazing land and the multiple values and uses 
                that depend on private grazing land;
                    ``(B) implementing grazing land management 
                technologies;
                    ``(C) managing resources on private grazing 
                land, including--
                            ``(i) planning, managing, and 
                        treating private grazing land 
                        resources;
                            ``(ii) ensuring the long-term 
                        sustainability of private grazing land 
                        resources;
                            ``(iii) harvesting, processing, and 
                        marketing private grazing land 
                        resources; and
                            ``(iv) identifying and managing 
                        weed, noxious weed, and brush 
                        encroachment problems;
                    ``(D) protecting and improving the quality 
                and quantity of water yields from private 
                grazing land;
                    ``(E) maintaining and improving wildlife 
                and fish habitat on private grazing land;
                    ``(F) enhancing recreational opportunities 
                on private grazing land;
                    ``(G) maintaining and improving the 
                aesthetic character of private grazing land;
                    ``(H) identifying the opportunities and 
                encouraging the diversification of private 
                grazing land enterprises; and
                    ``(I) encouraging the use of sustainable 
                grazing systems, such as year-round, 
                rotational, or managed grazing.
            ``(2) Program elements.--
                    ``(A) Funding.--If funding is provided to 
                carry out this section, it shall be provided 
                through a specific line-item in the annual 
                appropriations for the Natural Resources 
                Conservation Service.
                    ``(B) Technical assistance and education.--
                Personnel of the Department trained in pasture 
                and range management shall be made available 
                under the program to deliver and coordinate 
                technical assistance and education to owners 
                and managers of private grazing land, at the 
                request of the owners and managers.
    ``(d) Grazing Technical Assistance Self-Help.--
            ``(1) Findings.--Congress finds that--
                    ``(A) there is a severe lack of technical 
                assistance for farmers and ranchers that graze 
                livestock;
                    ``(B) Federal budgetary constraints 
                preclude any significant expansion, and may 
                force a reduction of, current levels of 
                technical support; and
                    ``(C) farmers and ranchers have a history 
                of cooperatively working together to address 
                common needs in the promotion of their products 
                and in the drainage of wet areas through 
                drainage districts.
            ``(2) Establishment of grazing demonstration.--In 
        accordance with paragraph (3), the Secretary may 
        establish 2 grazing management demonstration districts 
        at the recommendation of the grazing land conservation 
        initiative steering committee.
            ``(3) Procedure.--
                    ``(A) Proposal.--Within a reasonable time 
                after the submission of a request of an 
                organization of farmers or ranchers engaged in 
                grazing, the Secretary shall propose that a 
                grazing management district be established.
                    ``(B) Funding.--The terms and conditions of 
                the funding and operation of the grazing 
                management district shall be proposed by the 
                producers.
                    ``(C) Approval.--The Secretary shall 
                approve the proposal if the Secretary 
                determines that the proposal--
                            ``(i) is reasonable;
                            ``(ii) will promote sound grazing 
                        practices; and
                            ``(iii) contains provisions similar 
                        to the provisions contained in the beef 
                        promotion and research order issued 
                        under section 4 of the Beef Research 
                        and Information Act (7 U.S.C. 2903) in 
                        effect on April 4, 1996.
                    ``(D) Area included.--The area proposed to 
                be included in a grazing management district 
                shall be determined by the Secretary on the 
                basis of an application by farmers or ranchers.
                    ``(E) Authorization.--The Secretary may use 
                authority under the Agricultural Adjustment Act 
                (7 U.S.C. 601 et seq.), reenacted with 
                amendments by the Agricultural Marketing 
                Agreement Act of 1937, to operate, on a 
                demonstration basis, a grazing management 
                district.
                    ``(F) Activities.--The activities of a 
                grazing management district shall be 
                scientifically sound activities, as determined 
                by the Secretary in consultation with a 
                technical advisory committee composed of 
                ranchers, farmers, and technical experts.
    ``(e) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $60,000,000 for 
each of fiscal years 2002 through 2007.

``SEC. 1240N. WILDLIFE HABITAT INCENTIVE PROGRAM.

    ``(a) In General.--The Secretary, in consultation with the 
State technical committees established under section 1261, 
shall establish within the Natural Resources Conservation 
Service a program to be known as the wildlife habitat incentive 
program (referred to in this section as the `program').
    ``(b) Cost-Share Payments.--
            ``(1) In general.--Under the program, the Secretary 
        shall make cost-share payments to landowners to 
        develop--
                    ``(A) upland wildlife habitat;
                    ``(B) wetland wildlife habitat;
                    ``(C) habitat for threatened and endangered 
                species;
                    ``(D) fish habitat; and
                    ``(E) other types of wildlife habitat 
                approved by the Secretary.
            ``(2) Increased cost share for long-term 
        agreements.--
                    ``(A) In general.--In a case in which the 
                Secretary enters into an agreement or contract 
                to protect and restore plant and animal habitat 
                that has a term of at least 15 years, the 
                Secretary may provide cost-share payments in 
                addition to amounts provided under paragraph 
                (1).
                    ``(B) Funding limitation.--The Secretary 
                may use, for a fiscal year, not more than 15 
                percent of funds made available under section 
                1241(a)(7) for the fiscal year to carry out 
                contracts and agreements described in 
                subparagraph (A).
    ``(c) Regional Equity.--In carrying out this section, the 
Secretary shall, to the maximum extent practicable, ensure that 
regional issues of concern relating to wildlife habitat are 
addressed in an appropriate manner.

``SEC. 1240O. GRASSROOTS SOURCE WATER PROTECTION PROGRAM.

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

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

    ``(a) In General.--The Secretary, in consultation with the 
Great Lakes Commission created by Article IV of the Great Lakes 
Basin Compact (82 Stat. 415) and in cooperation with the 
Administrator of the Environmental Protection Agency and the 
Secretary of the Army, may carry out the Great Lakes basin 
program for soil erosion and sediment control (referred to in 
this section as the `program').
    ``(b) Assistance.--In carrying out the program, the 
Secretary may--
            ``(1) provide project demonstration grants, provide 
        technical assistance, and carry out information and 
        education programs to improve water quality in the 
        Great Lakes basin by reducing soil erosion and 
        improving sediment control; and
            ``(2) provide a priority for projects and 
        activities that directly reduce soil erosion or improve 
        sediment control.
    ``(c) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $5,000,000 for 
each of fiscal years 2002 through 2007.''.
    (b) Conforming Amendment.--Sections 386 and 387 of the 
Federal Agriculture Improvement and Reform Act of 1996 (16 
U.S.C. 2005b, 3836a) are repealed.

SEC. 2503. FARMLAND PROTECTION PROGRAM.

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

              ``Subchapter B--Farmland Protection Program

``SEC. 1238H. DEFINITIONS.

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

``SEC. 1238I. FARMLAND PROTECTION.

    ``(a) In General.--The Secretary, acting through the 
Natural Resources Conservation Service, shall establish and 
carry out a farmland protection program under which the 
Secretary shall purchase conservation easements or other 
interests in eligible land that is subject to a pending offer 
from an eligible entity for the purpose of protecting topsoil 
by limiting nonagricultural uses of the land.
    ``(b) Conservation Plan.--Any highly erodible cropland for 
which a conservation easement or other interest is purchased 
under this subchapter shall be subject to the requirements of a 
conservation plan that requires, at the option of the 
Secretary, the conversion of the cropland to less intensive 
uses.
    ``(c) Cost Sharing.--
            ``(1) Farmland protection.--
                    ``(A) Share provided under this 
                subsection.--The share of the cost of 
                purchasing a conservation easement or other 
                interest in eligible land described in 
                subsection (a) provided under section 1241(d) 
                shall not exceed 50 percent of the appraised 
                fair market value of the conservation easement 
                or other interest in eligible land.
                    ``(B) Share not provided under this 
                subsection.--As part of the share of the cost 
                of purchasing a conservation easement or other 
                interest in eligible land described in 
                subsection (a) that is not provided under 
                section 1241(d), an eligible entity may include 
                a charitable donation by the private landowner 
                from which the eligible land is to be purchased 
                of not more than 25 percent of the fair market 
                value of the conservation easement or other 
                interest in eligible land.
            ``(2) Bidding down.--If the Secretary determines 
        that 2 or more applications for the purchase of a 
        conservation easement or other interest in eligible 
        land described in subsection (a) are comparable in 
        achieving the purposes of this section, the Secretary 
        shall not assign a higher priority to any 1 of those 
        applications solely on the basis of lesser cost to the 
        farmland protection program established under 
        subsection (a).

``SEC. 1238J. FARM VIABILITY PROGRAM.

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

SEC. 2504. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

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

      ``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 developed through a 
        planning process by a council for a designated area of 
        1 or more States, or of land under the jurisdiction of 
        an Indian tribe, that includes 1 or more of the 
        following elements:
                    ``(A) A land conservation element, the 
                purpose of which is to control erosion and 
                sedimentation.
                    ``(B) A water management element that 
                provides 1 or more clear environmental or 
                conservation benefits, the purpose of which is 
                to provide for--
                            ``(i) the conservation, use, and 
                        quality of water, including irrigation 
                        and rural water supplies;
                            ``(ii) the mitigation of floods and 
                        high water tables;
                            ``(iii) the repair and improvement 
                        of reservoirs;
                            ``(iv) the improvement of 
                        agricultural water management; and
                            ``(v) the improvement of water 
                        quality.
                    ``(C) A community development element, the 
                purpose of which is to improve--
                            ``(i) the development of resources-
                        based industries;
                            ``(ii) the protection of rural 
                        industries from natural resource 
                        hazards;
                            ``(iii) the development of adequate 
                        rural water and waste disposal systems;
                            ``(iv) the improvement of 
                        recreation facilities;
                            ``(v) the improvement in the 
                        quality of rural housing;
                            ``(vi) the provision of adequate 
                        health and education facilities;
                            ``(vii) the satisfaction of 
                        essential transportation and 
                        communication needs; and
                            ``(viii) the promotion of food 
                        security, economic development, and 
                        education.
                    ``(D) A land management element, the 
                purpose of which is--
                            ``(i) energy conservation, 
                        including the production of energy 
                        crops;
                            ``(ii) the protection of 
                        agricultural land, as appropriate, from 
                        conversion to other uses;
                            ``(iii) farmland protection; and
                            ``(iv) the protection of fish and 
                        wildlife habitats.
            ``(2) Board.--The term `Board' means the Resource 
        Conservation and Development Policy Advisory Board 
        established under section 1533(a).
            ``(3) Council.--The term `council' means a 
        nonprofit entity (including an affiliate of the entity) 
        operating in a State that is--
                    ``(A) established by volunteers or 
                representatives of States, local units of 
                government, Indian tribes, or local nonprofit 
                organizations to carry out an area plan in a 
                designated area; and
                    ``(B) designated by the chief executive 
                officer or legislature of the State to receive 
                technical assistance and financial assistance 
                under this subtitle.
            ``(4) Designated area.--The term `designated area' 
        means a geographic area designated by the Secretary to 
        receive technical assistance and financial assistance 
        under this subtitle.
            ``(5) Financial assistance.--The term `financial 
        assistance' means a grant or loan provided by the 
        Secretary (or the Secretary and other Federal agencies) 
        to, or a cooperative agreement entered into by the 
        Secretary (or the Secretary and other Federal agencies) 
        with, a council, or association of councils, to carry 
        out an area plan in a designated area, including 
        assistance provided for planning, analysis, feasibility 
        studies, training, education, and other activities 
        necessary to carry out the area plan.
            ``(6) Indian tribe.--The term `Indian tribe' has 
        the meaning given the term in section 4 of the Indian 
        Self-Determination and Education Assistance Act (25 
        U.S.C. 450b).
            ``(7) Local unit of government.--The term `local 
        unit of government' means--
                    ``(A) any county, city, town, township, 
                parish, village, or other general-purpose 
                subdivision of a State; and
                    ``(B) any local or regional special 
                district or other limited political subdivision 
                of a State, including any soil conservation 
                district, school district, park authority, and 
                water or sanitary district.
            ``(8) Nonprofit organization.--The term `nonprofit 
        organization' means any organization that is--
                    ``(A) described in section 501(c) of the 
                Internal Revenue Code of 1986; and
                    ``(B) exempt from taxation under section 
                501(a) of the Internal Revenue Code of 1986.
            ``(9) Planning process.--The term `planning 
        process' means actions taken by a council to develop 
        and carry out an effective area plan in a designated 
        area, including development of the area plan, goals, 
        purposes, policies, implementation activities, 
        evaluations and reviews, and the opportunity for public 
        participation in the actions.
            ``(10) Project.--The term `project' means a project 
        that is carried out by a council to achieve any of the 
        elements of an area plan.
            ``(11) Secretary.--The term `Secretary' means the 
        Secretary of Agriculture.
            ``(12) State.--The term `State' means--
                    ``(A) any State;
                    ``(B) the District of Columbia; or
                    ``(C) any territory or possession of the 
                United States.
            ``(13) Technical assistance.--The term `technical 
        assistance' means any service provided by the Secretary 
        or agent of the Secretary, including--
                    ``(A) inventorying, evaluating, planning, 
                designing, supervising, laying out, and 
                inspecting projects;
                    ``(B) providing maps, reports, and other 
                documents associated with the services 
                provided;
                    ``(C) providing assistance for the long-
                term implementation of area plans; and
                    ``(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 Indiantribes, 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.

``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. 2505. SMALL WATERSHED REHABILITATION PROGRAM.

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

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

    Section 356 of the Federal Agriculture Improvement Act of 
1996 (16 U.S.C. 5801 et seq.) is amended--
            (1) in subsection (c)--
                    (A) by redesignating paragraphs (4) through 
                (7) as paragraphs (5) through (8), 
                respectively; and
                    (B) by inserting after paragraph (3) the 
                following:
            ``(4) on the written approval of the Secretary, to 
        use, license, or transfer symbols, slogans, and logos 
        of the Foundation (exclusive of any symbol or logo of a 
        governmental entity);''; and
            (2) in subsection (d), by adding at the end the 
        following:
            ``(3) Use of symbols, slogans, and logos of the 
        foundation.--
                    ``(A) In general.--The Secretary may 
                authorize the Foundation to use, license, or 
                transfer symbols, slogans, and logos of the 
                Foundation.
                    ``(B) Income.--
                            ``(i) In general.--All revenue 
                        received by the Foundation from the 
                        use, licensing, or transfer of symbols, 
                        slogans, and logos of the Foundation 
                        shall be transferred to the Secretary.
                            ``(ii) Conservation operations.--
                        The Secretary shall transfer all 
                        revenue received under clause (i) to 
                        the account within the Natural 
                        Resources Conservation Service that is 
                        used to carry out conservation 
                        operations.''.

SEC. 2507. DESERT TERMINAL LAKES.

    ``(a) In General.--Subject to subsection (b), as soon as 
practicable after the date of enactment of this Act, the 
Secretary of Agriculture shall transfer $200,000,000 of the 
funds of the Commodity Credit Corporation to the Bureau of 
Reclamation Water and Related Resources Account, which funds 
shall--
            ``(1) be used by the Secretary of the Interior, 
        acting through the Commissioner of Reclamation, to 
        provide water to at-risk natural desert terminal lakes; 
        and
            ``(2) remain available until expended.
    ``(b) Limitation.--The funds described in subsection (a) 
shall not be used to purchase or lease water rights.

        Subtitle G--Conservation Corridor Demonstration Program

SEC. 2601. DEFINITIONS.

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

SEC. 2602. CONSERVATION CORRIDOR DEMONSTRATION PROGRAM.

    (a) Establishment.--The Secretary shall carry out a 
demonstration program, to be known as the ``Conservation 
Corridor Demonstration Program'', under which any of the States 
of Delaware, Maryland, and Virginia, a local government of any 
1 of those States with jurisdiction over land on the Delmarva 
Peninsula, or a combination of those States, may submit a 
conservation corridor plan to integrate agriculture and 
forestry conservation programs of the Department of Agriculture 
with State and local efforts to address farm conservation 
needs.
    (b) Submission of Conservation Corridor Plan.--
            (1) Submission and proposal.--To be eligible to 
        participate in the demonstration program, a State, 
        local government, or combination of States referred to 
        in subsection (a) shall--
                    (A) submit to the Secretary a conservation 
                corridor plan that--
                            (i) proposes specific criteria and 
                        commitment of resources in the 
                        geographic region designated in the 
                        plan; and
                            (ii) describes how the linkage of 
                        Federal, State, and local resources 
                        will improve--
                                    (I) the economic viability 
                                of agriculture; and
                                    (II) the environmental 
                                integrity of the watersheds in 
                                the Delmarva Peninsula; and
                    (B) demonstrate to the Secretary that, in 
                developing the plan, the State, local 
                government, or combination of States has 
                solicited and taken into account the views of 
                local residents.
            (2) Draft memorandum of agreement.--If the 
        conservation corridor plan is submitted by more than 1 
        State, the plan shall provide a draft memorandum of 
        agreement among entities in each submitting State.
    (c) Review of Plan.--Not later than 90 days after the date 
of receipt of a conservation corridor plan, the Secretary--
            (1) shall review the plan; and
            (2) may approve the plan for implementation under 
        this subtitle if the Secretary determines that the plan 
        meets the requirements specified in subsection (d).
    (d) Criteria for Approval.--The Secretary may approve a 
conservation corridor plan only if, as determined by the 
Secretary, the plan provides for each of the following:
            (1) Voluntary actions.--Actions taken under the 
        plan--
                    (A) are voluntary;
                    (B) require the consent of willing 
                landowners; and
                    (C) provide a mechanism by which the 
                landowner may withdraw such consent without 
                adverse consequences other than the loss of any 
                payments to the landowner conditioned on 
                continued enrollment of the land.
            (2) Land of high conservation value.--Criteria 
        specified in the plan ensure that land enrolled in each 
        conservation program incorporated through the plan are 
        of exceptionally high conservation value, as determined 
        by the Secretary.
            (3) No effect on unenrolled land.--The enrollment 
        of land in a conservation program incorporated through 
        the plan will neither--
                    (A) adversely affect any adjacent land not 
                so enrolled; nor
                    (B) create any buffer zone on such 
                unenrolled land.
            (4) Greater benefits.--The conservation programs 
        incorporated through the plan provide benefits greater 
        than the benefits that would likely be achieved through 
        individual application of the conservation programs.
            (5) Sufficient staffing.--Staffing, considering 
        both Federal and non-Federal resources, is sufficient 
        to ensure success of the plan.

SEC. 2603. IMPLEMENTATION OF CONSERVATION CORRIDOR PLAN.

    (a) Memorandum of Agreement.--On approval of a conservation 
corridor plan, the Secretary may enter into a memorandum of 
agreement with the State, local government, or combination of 
States that submitted the plan to--
            (1) guarantee specific program resources for 
        implementation of the plan;
            (2) establish various compensation rates to the 
        extent that the parties to the agreement consider 
        justified; and
            (3) provide streamlined and integrated paperwork 
        requirements.
    (b) Continued Compliance With Plan Approval Criteria.--The 
Secretary shall terminate the memorandum of agreement entered 
into under subsection (a) with respect to an approved 
conservation corridor plan and cease the provision of resources 
for implementation of the plan if the Secretary determines 
that, in the implementation of the plan--
            (1) the State, local government, or combination of 
        States that submitted the plan has deviated from--
                    (A) the plan;
                    (B) the criteria specified in section 
                2602(d) on which approval of the plan was 
                conditioned; or
                    (C) the cost-sharing requirements of 
                section 2604(a) or any other condition of the 
                plan; or
            (2) the economic viability of agriculture in the 
        geographic region designated in the plan is being 
        hindered.
    (c) Progress Report.--At the end of the 3-year period that 
begins on the date on which funds are first provided with 
respect to a conservation corridor plan under the demonstration 
program, the State, local government, or combination of States 
that submitted the plan shall submit to the Secretary--
            (1) a report on the effectiveness of the activities 
        carried out under the plan; and
            (2) an evaluation of the economic viability of 
        agriculture in the geographic region designated in the 
        plan.
    (d) Duration.--The demonstration program shall be carried 
out for not less than 3 nor more than 5 years beginning on the 
date on which funds are first provided under the demonstration 
program.

SEC. 2604. FUNDING REQUIREMENTS.

    (a) Cost Sharing.--
            (1) Required non-federal share.--Subject to 
        paragraph (2), as a condition on the approval of a 
        conservation corridor plan, the Secretary shall require 
        the State and local participants to contribute 
        financial resources sufficient to cover at least 50 
        percent of the total cost of the activities carried out 
        under the plan.
            (2) Exception.--The Secretary may reduce the cost-
        sharing requirement in the case of a specific project 
        or activity under the demonstration program on good 
        cause and on demonstration that the project or activity 
        is likely to achieve extraordinary natural resource 
        benefits.
    (b) Reservation of Funds.--The Secretary may consider 
directing funds on a priority basis to the demonstration 
program and to projects in areas identified by the plan.
    (c) Authorization of Appropriations.--There are authorized 
to be appropriated such sums as are necessary to carry out this 
subtitle for each of fiscal years 2002 through 2007.

                 Subtitle H--Funding and Administration

SEC. 2701. FUNDING AND ADMINISTRATION.

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

``SEC. 1241. COMMODITY CREDIT CORPORATION.

    ``(a) In General.--For each of fiscal years 2002 through 
2007, the Secretary shall use the funds, facilities, and 
authorities of the Commodity Credit Corporation to carry out 
the following programs under subtitle D (including the 
provision of technical assistance):
            ``(1) The conservation reserve program under 
        subchapter B of chapter 1.
            ``(2) The wetlands reserve program under subchapter 
        C of chapter 1.
            ``(3) The conservation security program under 
        subchapter A of chapter 2.
            ``(4) The farmland protection program under 
        subchapter B of chapter 2, using, to the maximum extent 
        practicable--
                    ``(A) $50,000,000 in fiscal year 2002;
                    ``(B) $100,000,000 in fiscal year 2003;
                    ``(C) $125,000,000 in each of fiscal years 
                2004 and 2005;
                    ``(D) $100,000,000 in fiscal year 2006; and
                    ``(E) $97,000,000 in fiscal year 2007.
            ``(5) The grassland reserve program under 
        subchapter C of chapter 2, using, to the maximum extent 
        practicable $254,000,000 for the period of fiscal years 
        2003 through 2007.
            ``(6) The environmental quality incentives program 
        under chapter 4, using, to the maximum extent 
        practicable--
                    ``(A) $400,000,000 in fiscal year 2002;
                    ``(B) $700,000,000 in fiscal year 2003;
                    ``(C) $1,000,000,000 in fiscal year 2004;
                    ``(D) $1,200,000,000 in each of fiscal 
                years 2005 and 2006; and
                    ``(E) $1,300,000,000 in fiscal year 2007.
            ``(7) The wildlife habitat incentives program under 
        section 1240N, using, to the maximum extent 
        practicable--
                    ``(A) $15,000,000 in fiscal year 2002;
                    ``(B) $30,000,000 in fiscal year 2003;
                    ``(C) $60,000,000 in fiscal year 2004; and
                    ``(D) $85,000,000 in each of fiscal years 
                2005 through 2007.
    ``(b) Section 11.--Nothing in this section affects the 
limit on expenditures for technical assistance imposed by 
section 11 of the Commodity Credit Corporation Charter Act (15 
U.S.C. 714i).
    ``(c) Regional Equity.--Before April 1 of each fiscal year, 
the Secretary shall give priority for funding under the 
conservation programs under subtitle D (excluding the 
conservation reserve program under subchapter B of chapter 1, 
the wetlands reserve program under subchapter C of chapter 1, 
and the conservation security program under subchapter A of 
chapter 2) to approved applications in any State that has not 
received, for the fiscal year, an aggregate amount of at least 
$12,000,000 for those conservation programs.

``SEC. 1242. DELIVERY OF TECHNICAL ASSISTANCE.

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

SEC. 2702. REGULATIONS.

    (a) In General.--Except as otherwise provided in this title 
or an amendment made by this title, not later than 90 days 
after the date of enactment of this Act, the Secretary of 
Agriculture, in consultation with the Commodity Credit 
Corporation, shall promulgate such regulations as are necessary 
to implement this title.
    (b) Applicable Authority.--The promulgation of regulations 
under subsection (a) and administration of this title--
            (1) shall--
                    (A) be carried out without regard to 
                chapter 35 of title 44, United States Code 
                (commonly known as the Paperwork Reduction 
                Act); and
                    (B) the Statement of Policy of the 
                Secretary of Agriculture effective July 24, 
                1971 (36 Fed. Reg. 13804) relating to notices 
                of proposed rulemaking and public participation 
                in rulemaking; and
            (2) may--
                    (A) be promulgated with an opportunity for 
                notice and comment; or
                    (B) if determined to be appropriate by the 
                Secretary of Agriculture or the Commodity 
                Credit Corporation, as an interim rule 
                effective on publication with an opportunity 
                for notice and comment.
    (c) Congressional Review of Agency Rulemaking.--In carrying 
out this section, the Secretary shall use the authority 
provided under section 808(2) of title 5, United States Code.

                            TITLE III--TRADE

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

SEC. 3001. UNITED STATES POLICY.

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

SEC. 3002. PROVISION OF AGRICULTURAL COMMODITIES.

    Section 202 of the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1722) is amended--
            (1) in subsection (b), by adding at the end the 
        following:
            ``(3) Program diversity.--The Administrator shall--
                    ``(A) encourage eligible organizations to 
                propose and implement program plans to address 
                1 or more aspects of the program under section 
                201; and
                    ``(B) consider proposals that incorporate a 
                variety of program objectives and strategic 
                plans based on the identification by eligible 
                organizations of appropriate activities, 
                consistent with section 201, to assist 
                development of foreign countries.'';
            (2) in subsection (e)(1), by striking ``not less 
        than $10,000,000, and not more than $28,000,000,'' and 
        inserting ``not less than 5 percent nor more than 10 
        percent of the funds''; and
            (3) by adding at the end the following:
    ``(h) Streamlined Program Management.--
            ``(1) Improvements.--Not later than 1 year after 
        the date of enactment of this subsection, the 
        Administrator shall--
                    ``(A) streamline program procedures and 
                guidelines under this title for agreements with 
                eligible organizations for programs in 1 or 
                more countries; and
                    ``(B) effective beginning with fiscal year 
                2004, to the maximum extent practicable, 
                incorporate the changes into the procedures and 
                guidelines for programs and the guidelines for 
                resource requests.
            ``(2) Streamlined procedures and guidelines.--In 
        carrying out paragraph (1), the Administrator shall 
        make improvements in the Office of Food for Peace 
        management systems that include--
                    ``(A) expedition of and greater consistency 
                in the program review and approval process 
                under this title;
                    ``(B) streamlining of information 
                collection and reporting systems by identifying 
                the critical information that needs to be 
                monitored and reported on by eligible 
                organizations; and
                    ``(C) for approved programs, provision of 
                greater flexibility for an eligible 
                organization to make modifications in program 
                activities to achieve program results with 
                streamlined procedures for reporting such 
                modifications.
            ``(3) Consultation.--
                    ``(A) In general.--Paragraphs (1) and (2) 
                shall be carried out in accordance with section 
                205 and subsections (b) and (c) of section 207.
                    ``(B) Consultation with congressional 
                committees.--Not later than 180 days after the 
                date of enactment of this subsection, the 
                Administrator shall consult with the Committee 
                on Agriculture and the Committee on 
                International Relations of the House of 
                Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the 
                Senate on progress made in carrying out this 
                subsection.
            ``(4) Report.--Not later than 270 days after the 
        date of enactment of this subsection, the Administrator 
        shall submit to the Committee on Agriculture and the 
        Committee on International Relations of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report on the 
        improvements made and planned upgrades in the 
        information management, procurement, and financial 
        management systems to administer this title.''.

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

    Section 203 of the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1723) is amended--
            (1) in the section heading, by striking 
        ``FOREIGN'';
            (2) in subsection (a), by striking ``the recipient 
        country, or in a country'' and inserting ``1 or more 
        recipient countries, or 1 or more countries'';
            (3) in subsection (b)--
                    (A) by striking ``in recipient countries, 
                or in countries'' and inserting ``1 or more 
                recipient countries, or in 1 or more 
                countries''; and
                    (B) by striking ``foreign currency'';
            (4) in subsection (c)--
                    (A) by striking ``foreign currency''; and
                    (B) by striking ``the recipient country, or 
                in a country'' and inserting ``1 or more 
                recipient countries, or in 1 or more 
                countries''; and
            (5) in subsection (d)--
                    (A) by striking ``Foreign currencies'' and 
                inserting ``Proceeds'';
                    (B) in paragraph (2)--
                            (i) by striking ``income 
                        generating'' and inserting ``income-
                        generating''; and
                            (ii) by striking ``the recipient 
                        country or within a country'' and 
                        inserting ``1 or more recipient 
                        countries or within 1 or more 
                        countries''; and
                    (C) in paragraph (3)--
                            (i) by inserting a comma after 
                        ``invested''; and
                            (ii) by inserting a comma after 
                        ``used''.

SEC. 3004. LEVELS OF ASSISTANCE.

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

SEC. 3005. FOOD AID CONSULTATIVE GROUP.

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

SEC. 3006. MAXIMUM LEVEL OF EXPENDITURES.

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

SEC. 3007. ADMINISTRATION.

    Section 207 of the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1726a) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraph (2) as 
                paragraph (3); and
                    (B) by striking paragraph (1) and inserting 
                the following:
            ``(1) Recipient countries.--A proposal to enter 
        into a nonemergency food assistance agreement under 
        this title shall identify the recipient country or 
        countries that are the subject of the agreement.
            ``(2) Timing.--Not later than 120 days after the 
        date of receipt by the Administrator of a proposal 
        submitted by an eligible organization under this title, 
        the Administrator shall determine whether to accept the 
        proposal.'';
            (2) in subsection (b), by striking ``guideline'' 
        each place it appears and inserting ``guideline or 
        annual policy guidance''; and
            (3) by adding at the end the following:
    ``(e) Timely Approval.--
            ``(1) In general.--The Administrator is encouraged 
        to finalize program agreements and resource requests 
        for programs under this section before the beginning of 
        each fiscal year.
            ``(2) Report.--Not later than December 1 of each 
        year, the Administrator shall submit to the Committee 
        on Agriculture and the Committee on International 
        Relations of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate a report that contains--
                    ``(A) a list of programs, countries, and 
                commodities approved to date for assistance 
                under this section; and
                    ``(B) a statement of the total amount of 
                funds approved to date for transportation and 
                administrative costs under this section.''.

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

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

SEC. 3009. SALE PROCEDURE.

    (a) In General.--Section 403 of the Agricultural Trade 
Development and Assistance Act of 1954 (7 U.S.C. 1733) is 
amended--
            (1) in subsection (e)--
                    (A) by striking ``In carrying'' and 
                inserting the following:
            ``(1) In general.--In carrying''; and
                    (B) by adding at the end the following:
            ``(2) Sale price.--Sales of agricultural 
        commodities described in paragraph (1) shall be made at 
        a reasonable market price in the economy where the 
        agricultural commodity is to be sold, as determined by 
        the Secretary or the Administrator, as appropriate.''; 
        and
            (2) by adding at the end the following:
    ``(l) Sale Procedure.--
            ``(1) In general.--Subsections (b) and (h) shall 
        apply to sales of commodities in recipient countries to 
        generate proceeds to carry out projects under--
                    ``(A) titles I and II;
                    ``(B) section 416(b) of the Agricultural 
                Act of 1949 (7 U.S.C. 1431(b)); and
                    ``(C) the Food for Progress Act of 1985 (7 
                U.S.C. 1736o).
            ``(2) Currency.--A sale described in paragraph (1) 
        may be made in United States dollars or other 
        currencies.''.
    (b) Conforming Amendments.--
            (1) Section 416(b) of the Agricultural Act of 1949 
        (7 U.S.C. 1431(b)) is amended by adding at the end the 
        following:
            ``(10) Sale procedure.--In approving sales of 
        commodities under this subsection, the Secretary shall 
        follow the sale procedure described in section 403(l) 
        of the Agricultural Trade Development and Assistance 
        Act of 1954.''.
            (2) Subsection (f) of the Food for Progress Act of 
        1985 (7 U.S.C. 1736o(f)) is amended by adding at the 
        end the following:
            ``(5) Sale procedure.--In making sales of eligible 
        commodities under this section, the Secretary shall 
        follow the sale procedure described in section 403(l) 
        of the Agricultural Trade Development and Assistance 
        Act of 1954.''.

SEC. 3010. PREPOSITIONING.

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

SEC. 3011. TRANSPORTATION AND RELATED COSTS.

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

SEC. 3012. EXPIRATION DATE.

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

SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS.

    Section 415 of the Agricultural Trade Development and 
Assistance Act of 1954 (7 U.S.C. 1736g-2) is amended--
            (1) in the section heading, by striking ``PILOT 
        PROGRAM.'' and inserting ``PROGRAMS.'';
            (2) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) 
                as subparagraphs (A) and (B), respectively, and 
                adjusting the margins appropriately;
                    (B) by striking the first sentence and 
                inserting the following:
            ``(1) Programs.--Not later than September 30, 2003, 
        the Administrator, in consultation with the Secretary, 
        shall establish micronutrient fortification 
        programs.''; and
                    (C) in the second sentence, by striking 
                ``The purpose of the program'' and inserting 
                the following:
            ``(2) Purpose.--The purpose of a program''; and
                    (D) in paragraph (2) (as designated by 
                subparagraph (C))--
                            (i) in subparagraph (A), by 
                        striking ``and'' at the end;
                            (ii) in subparagraph (B)--
                                    (I) by striking ``whole''; 
                                and
                                    (II) by striking the period 
                                at the end and inserting ``; 
                                and''; and
                            (iii) by adding at the end the 
                        following:
                    ``(C) assess and apply technologies and 
                systems to improve and ensure the quality, 
                shelf life, bioavailability, and safety of 
                fortified food aid commodities, and products of 
                those commodities, that are provided to 
                developing countries, by using the same 
                mechanism that was used to assess the 
                micronutrient fortification program in the 
                report entitled `Micronutrient Compliance 
                Review of Fortified P.L. 480 Commodities', 
                published October 2001 with funds from the 
                Bureau for Humanitarian Response of the United 
                States Agency for International Development.'';
            (3) in subsection (b), by striking ``the pilot 
        program'' and inserting ``a program under this 
        section'';
            (4) in the first sentence of subsection (c)--
                    (A) by striking ``the pilot program, 
                whole'' and inserting ``a program,'';
                    (B) by striking ``the pilot program may'' 
                and inserting ``a program may'';
                    (C) by striking ``including'' and inserting 
                ``such as''; and
                    (D) by striking ``and iodine'' and 
                inserting ``iodine, and folic acid''; and
            (5) in subsection (d)--
                    (A) by striking ``the pilot program'' and 
                inserting ``programs''; and
                    (B) by striking ``2002'' and inserting 
                ``2007''.

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

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

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

    ``(a) Definitions.--In this section:
            ``(1) Caribbean basin country.--The term `Caribbean 
        Basin country' means a country eligible for designation 
        as a beneficiary country under section 212 of the 
        Caribbean Basin Economic Recovery Act (19 U.S.C. 2702).
            ``(2) Emerging market.--The term `emerging market' 
        means a country that the Secretary determines--
                    ``(A) is taking steps toward a market-
                oriented economy through the food, agriculture, 
                or rural business sectors of the economy of the 
                country; and
                    ``(B) has the potential to provide a viable 
                and significant market for United States 
                agricultural commodities or products of United 
                States agricultural commodities.
            ``(3) Middle income country.--The term `middle 
        income country' means a country that has developed 
        economically to the point at which the country does not 
        receive bilateral development assistance from the 
        United States.
            ``(4) Sub-saharan african country.--The term `sub-
        Saharan African country' has the meaning given the term 
        in section 107 of the Trade and Development Act of 2000 
        (19 U.S.C. 3706).
    ``(b) Provision.--Notwithstanding any other provision of 
law, to further assist developing countries, middle-income 
countries, emerging markets, sub-Saharan African countries, and 
Caribbean Basin countries to increase farm production and 
farmer incomes, the President may--
            ``(1) establish and administer a program, to be 
        known as the `John Ogonowski Farmer-to-Farmer Program', 
        of farmer-to-farmer assistance between the United 
        States and such countries to assist in--
                    ``(A) increasing food production and 
                distribution; and
                    ``(B) improving the effectiveness of the 
                farming and marketing operations of 
                agricultural producers in those countries;
            ``(2) use United States agricultural producers, 
        agriculturalists, colleges and universities (including 
        historically black colleges and universities, land 
        grant colleges or universities, and foundations 
        maintained by colleges or universities), private 
        agribusinesses, private organizations (including 
        grassroots organizations with an established and 
        demonstrated capacity to carry out such a bilateral 
        exchange program), private corporations, and nonprofit 
        farm organizations to work in conjunction with 
        agricultural producers and farm organizations in those 
        countries, on a voluntary basis--
                    ``(A) to improve agricultural and 
                agribusiness operations and agricultural 
                systems in those countries, including 
                improving--
                            ``(i) animal care and health;
                            ``(ii) field crop cultivation;
                            ``(iii) fruit and vegetable 
                        growing;
                            ``(iv) livestock operations;
                            ``(v) food processing and 
                        packaging;
                            ``(vi) farm credit;
                            ``(vii) marketing;
                            ``(viii) inputs; and
                            ``(ix) agricultural extension; and
                    ``(B) to strengthen cooperatives and other 
                agricultural groups in those countries;
            ``(3) transfer the knowledge and expertise of 
        United States agricultural producers and businesses, on 
        an individual basis, to those countries while enhancing 
        the democratic process by supporting private and public 
        agriculturally related organizations that request and 
        support technical assistance activities through cash 
        and in-kind services;
            ``(4) to the maximum extent practicable, make 
        grants to or enter into contracts or other cooperative 
        agreements with private voluntary organizations, 
        cooperatives, land grant universities, private 
        agribusiness, or nonprofit farm organizations to carry 
        out this section (except that any such contract or 
        other agreement may obligate the United States to make 
        outlays only to the extent that the budget authority 
        for such outlays is available under subsection (d) or 
        has otherwise been provided in advance in appropriation 
        Acts);
            ``(5) coordinate programs established under this 
        section with other foreign assistance programs and 
        activities carried out by the United States; and
            ``(6) to the extent that local currencies can be 
        used to meet the costs of a program established under 
        this section, augment funds of the United States that 
        are available for such a program through the use, 
        within the country in which the program is being 
        conducted, of--
                    ``(A) foreign currencies that accrue from 
                the sale of agricultural commodities and 
                products under this Act; and
                    ``(B) local currencies generated from other 
                types of foreign assistance activities.
    ``(c) Special Emphasis on Sub-Saharan African and Caribbean 
Basin Countries.--
            ``(1) Findings.--Congress finds that--
                    ``(A) agricultural producers in sub-Saharan 
                African and Caribbean Basin countries need 
                training in agricultural techniques that are 
                appropriate for the majority of eligible 
                agricultural producers in those countries, 
                including training in--
                            ``(i) standard growing practices;
                            ``(ii) insecticide and sanitation 
                        procedures; and
                            ``(iii) other agricultural methods 
                        that will produce increased yields of 
                        more nutritious and healthful crops;
                    ``(B) agricultural producers in the United 
                States (including African-American agricultural 
                producers) and banking and insurance 
                professionals have agribusiness expertise that 
                would be invaluable for agricultural producers 
                in sub-Saharan African and Caribbean Basin 
                countries;
                    ``(C) a commitment by the United States is 
                appropriate to support the development of a 
                comprehensive agricultural skills training 
                program for those agricultural producers that 
                focuses on--
                            ``(i) improving knowledge of 
                        insecticide and sanitation procedures 
                        to prevent crop destruction;
                            ``(ii) teaching modern agricultural 
                        techniques that would facilitate a 
                        continual analysis of crop production, 
                        including--
                                    ``(I) the identification 
                                and development of standard 
                                growing practices; and
                                    ``(II) the establishment of 
                                systems for recordkeeping;
                            ``(iii) the use and maintenance of 
                        agricultural equipment that is 
                        appropriate for the majority of 
                        eligible agricultural producers in sub-
                        Saharan African or Caribbean Basin 
                        countries;
                            ``(iv) the expansion of small 
                        agricultural operations into 
                        agribusiness enterprises by increasing 
                        access to credit for agricultural 
                        producers through--
                                    ``(I) the development and 
                                use of village banking systems; 
                                and
                                    ``(II) the use of 
                                agricultural risk insurance 
                                pilot products; and
                            ``(v) marketing crop yields to 
                        prospective purchasers (including 
                        businesses and individuals) for local 
                        needs and export; and
                    ``(D) programs that promote the exchange of 
                agricultural knowledge and expertise through 
                the exchange of American and foreign 
                agricultural producers have been effective in 
                promoting improved agricultural techniques and 
                food security and the extension of additional 
                resources to such farmer-to-farmer exchanges is 
                warranted.
            ``(2) Goals for programs carried out in sub-saharan 
        african and caribbean countries.--The goals of programs 
        carried out under this section in sub-Saharan African 
        and Caribbean Basin countries shall be--
                    ``(A) to expand small agricultural 
                operations in those countries into agribusiness 
                enterprises by increasing access to credit for 
                agricultural producers through--
                            ``(i) the development and use of 
                        village banking systems; and
                            ``(ii) the use of agricultural risk 
                        insurance pilot products;
                    ``(B) to provide training to agricultural 
                producers in those countries that will--
                            ``(i) enhance local food security; 
                        and
                            ``(ii) help mitigate and alleviate 
                        hunger;
                    ``(C) to provide training to agricultural 
                producers in those countries in groups to 
                encourage participants to share and pass on to 
                other agricultural producers in the home 
                communities of the participants, the 
                information and skills obtained from the 
                training, rather than merely retaining the 
                information and skills for the personal 
                enrichment of the participants; and
                    ``(D) to maximize the number of 
                beneficiaries of the programs in sub-Saharan 
                African and Caribbean Basin countries.
    ``(d) Minimum Funding.--Notwithstanding any other provision 
of law, in addition to any funds that may be specifically 
appropriated to carry out this section, not less than 0.5 
percent of the amounts made available for each of fiscal years 
2002 through 2007 to carry out this Act shall be used to carry 
out programs under this section, with--
            ``(1) not less than 0.2 percent to be used for 
        programs in developing countries; and
            ``(2) not less than 0.1 percent to be used for 
        programs in sub-Saharan African and Caribbean Basin 
        countries.
    ``(e) Authorization of Appropriations.--
            ``(1) In general.--There is authorized to be 
        appropriated to carry out programs under this section 
        in sub-Saharan African and Caribbean Basin countries 
        $10,000,000 for each of fiscal years 2002 through 2007.
            ``(2) Administrative costs.--Not more than 5 
        percent of the funds made available for a fiscal year 
        under paragraph (1) may be used to pay administrative 
        costs incurred in carrying out programs in sub-Saharan 
        African and Caribbean Basin countries.''.

               Subtitle B--Agricultural Trade Act of 1978

SEC. 3101. EXPORTER ASSISTANCE INITIATIVE.

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

``SEC. 107. EXPORTER ASSISTANCE INITIATIVE.

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

SEC. 3102. EXPORT CREDIT GUARANTEE PROGRAM.

    (a) Terms of Supplier Credit Program.--Section 202(a) of 
the Agricultural Trade Act of 1978 (7 U.S.C. 5622(a)) is 
amended by adding at the end the following:
            ``(3) Extended supplier credits.--
                    ``(A) In general.--Subject to the 
                appropriation of funds under subparagraph (B), 
                in carrying out this section, the Commodity 
                Credit Corporation may issue guarantees for the 
                repayment of credit made available for a period 
                of more than 180 days, but not more than 360 
                days, by a United States exporter to a buyer in 
                a foreign country.
                    ``(B) Authorization of appropriations.--
                There are authorized to be appropriated such 
                sums as are necessary to fund the additional 
                costs attributable to the portion of any 
                guarantee issued under this paragraph to cover 
                the repayment of credit beyond the initial 180-
                day period.''.
    (b) Processed and High-Value Products.--Section 202(k)(1) 
of the Agricultural Trade Act of 1978 (7 U.S.C. 5622(k)(1)) is 
amended by striking ``, 2001, and 2002'' and inserting 
``through 2007''.
    (c) Report.--Section 202 of the Agricultural Trade Act of 
1978 (7 U.S.C. 5622) is amended by adding at the end the 
following:
    ``(l) Consultation on Agricultural Export Credit 
Programs.--The Secretary and the United States Trade 
Representative shall consult on a regular basis with the 
Committee on Agriculture, and the Committee on International 
Relations, of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate on the 
status of multilateral negotiations regarding agricultural 
export credit programs.''.
    (d) Reauthorization.--Section 211(b)(1) of the Agricultural 
Trade Act of 1978 (7 U.S.C. 5641(b)(1)) is amended by striking 
``2002'' and inserting ``2007''.

SEC. 3103. MARKET ACCESS PROGRAM.

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

SEC. 3104. EXPORT ENHANCEMENT PROGRAM.

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

SEC. 3105. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

    (a) Value-Added Products.--
            (1) In general.--Section 702(a) of the Agricultural 
        Trade Act of 1978 (7 U.S.C. 5722(a)) is amended by 
        inserting ``, with a continued significant emphasis on 
        the importance of the export of value-added United 
        States agricultural products into emerging markets'' 
        after ``products''.
            (2) Report to congress.--Section 702 of the 
        Agricultural Trade Act of 1978 (7 U.S.C. 5722) is 
        amended by adding at the end the following:
    ``(c) Report to Congress.--The Secretary shall annually 
submit to the Committee on Agriculture and the Committee on 
International Relations of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report on activities under this section describing the amount 
of funding provided, the types of programs funded, the value-
added products that have been targeted, and the foreign markets 
for those products that have been developed.''.
    (b) Funding.--Section 703 of the Agricultural Trade Act of 
1978 (7 U.S.C. 5723) is amended to read as follows:

``SEC. 703. FUNDING.

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

SEC. 3106. FOOD FOR PROGRESS.

    (a) In General.--Subsections (f)(3), (k), and (l)(1) of the 
Food for Progress Act of 1985 (7 U.S.C. 1736o) are each amended 
by striking ``2002'' and inserting ``2007''.
    (b) Definitions; Program.--
            (1) In general.--The Food for Progress Act of 1985 
        (7 U.S.C. 1736o) is amended by striking subsections (b) 
        and (c) and inserting the following:
    ``(b) Definitions.--In this section:
            ``(1) Cooperative.--The term `cooperative' has the 
        meaning given the term in section 402 of the 
        Agricultural Trade Development and Assistance Act of 
        1954 (7 U.S.C. 1732).
            ``(2) Corporation.--The term `Corporation' means 
        the Commodity Credit Corporation.
            ``(3) Developing country.--The term `developing 
        country' has the meaning given the term in section 402 
        of the Agricultural Trade Development and Assistance 
        Act of 1954 (7 U.S.C. 1732).
            ``(4) Eligible commodity.--The term `eligible 
        commodity' means an agricultural commodity, or a 
        product of an agricultural commodity, in inventories of 
        the Corporation or acquired by the President or the 
        Corporation for disposition through commercial 
        purchases under a program authorized under this 
        section.
            ``(5) Eligible entity.--The term `eligible entity' 
        means--
                    ``(A) the government of an emerging 
                agricultural country;
                    ``(B) an intergovernmental organization;
                    ``(C) a private voluntary organization;
                    ``(D) a nonprofit agricultural organization 
                or cooperative;
                    ``(E) a nongovernmental organization; and
                    ``(F) any other private entity.
            ``(6) Food security.--The term `food security' 
        means access by all people at all times to sufficient 
        food and nutrition for a healthy and productive life.
            ``(7) Nongovernmental organization.--The term 
        `nongovernmental organization' has the meaning given 
        the term in section 402 of the Agricultural Trade 
        Development and Assistance Act of 1954 (7 U.S.C. 1732).
            ``(8) Private voluntary organization.--The term 
        `private voluntary organization' has the meaning given 
        the term in section 402 of the Agricultural Trade 
        Development and Assistance Act of 1954 (7 U.S.C. 1732).
            ``(9) Program.--The term `program' means a food 
        assistance or development initiative proposed by an 
        eligible entity and approved by the President under 
        this section.
    ``(c) Program.--In order to use the food resources of the 
United States more effectively in support of developing 
countries, and countries that are emerging democracies that 
have made commitments to introduce or expand free enterprise 
elements in their agricultural economies through changes in 
commodity pricing, marketing, input availability, distribution, 
and private sector involvement, the President may enter into 
agreements with eligible entities to furnish to the countries 
eligible commodities made available under subsections (e) and 
(f).''.
            (2) Conforming amendments.--The Food for Progress 
        Act of 1985 (7 U.S.C. 136o) is amended--
                    (A) in the first sentence of subsection 
                (d), by striking ``food'';
                    (B) in subsection (l)(2), by striking 
                ``agricultural'';
                    (C) in subsection (m)(1), by striking 
                ``these'';
                    (D) in subsections (d), (e), (f), (h), (j), 
                (l), and (m), by striking ``commodities'' each 
                place it appears and inserting ``eligible 
                commodities''; and
                    (E) in subsections (e), (f), and (l), by 
                striking ``Commodity Credit Corporation'' each 
                place it appears and inserting ``Corporation''; 
                and
                    (F) by striking subsection (o).
    (c) Consideration for Agreements.--Subsection (d) of the 
Food for Progress Act of 1985 (7 U.S.C. 1736o(d)) is amended by 
striking ``(d) In determining'' and inserting ``(d) 
Consideration for Agreements.--In determining''.
    (d) Funding of Eligible Commodities.--Subsection (e) of the 
Food for Progress Act of 1985 (7 U.S.C. 1736o(e)) is amended--
            (1) by striking ``(e)'' and inserting ``(e) Funding 
        of Eligible Commodities.--'';
            (2) in paragraph (2), by inserting ``, and 
        subsection (g) does not apply to eligible commodities 
        furnished on a grant basis or on credit terms under 
        that title'' before the period at the end; and
            (3) by adding at the end the following:
            ``(5) No effect on domestic programs.--The 
        President shall not make an eligible commodity 
        available for disposition under this section in any 
        amount that will reduce the amount of the eligible 
        commodity that is traditionally made available through 
        donations to domestic feeding programs or agencies, as 
        determined by the President.
    (e) Provision of Eligible Commodities to Developing 
Countries.--Subsection (f) of the Food for Progress Act of 1985 
(7 U.S.C. 1736o(f)) is amended--
            (1) by striking ``(f)'' and inserting ``(f) 
        Provision of Eligible Commodities to Developing 
        Countries.--''; and
            (2) in paragraph (3), by striking ``$30,000,000 (or 
        in the case of fiscal year 1999, $35,000,000)'' and 
        inserting ``$40,000,000''.
    (f) Minimum Tonnage.--The Food for Progress Act of 1985 is 
amended by striking subsection (g) (7 U.S.C. 1736o(g)) and 
inserting the following:
    ``(g) Minimum Tonnage.--Subject to subsection (f)(3), not 
less than 400,000 metric tons of eligible commodities may be 
provided under this section for the program for each of fiscal 
years 2002 through 2007.''.
    (g) Prohibition on Resale or Transshipment of Eligible 
Commodities.--Subsection (h) of the Food for Progress Act of 
1985 (7 U.S.C. 1736o(h)) is amended by striking ``(h) An 
agreement'' and inserting ``(h) Prohibition on Resale or 
Transshipment of Eligible Commodities.--An agreement''.
    (h) Displacement of United States Commercial Sales.--
Subsection (i) of the Food for Progress Act of 1985 (7 U.S.C. 
1736o(i)) is amended by striking ``(i) In entering'' and 
inserting ``(i) Displacement of United States Commercial 
Sales.--In entering''.
    (i) Multicountry or Multiyear Basis.--Subsection (j) of the 
Food for Progress Act of 1985 (7 U.S.C. 1736o(j)) is amended--
            (1) by striking ``(j) In carrying out this section, 
        the President may,'' and inserting the following: ``(j) 
        Multicountry or Multiyear Basis.--
            ``(1) In general.--In carrying out this section, 
        the President,'';
            (2) by striking ``approve'' and inserting ``is 
        encouraged to approve'';
            (3) by striking ``multiyear'' and inserting 
        ``multicountry or multiyear''; and
            (4) by adding at the end the following:
            ``(2) Deadline for program announcements.--Before 
        the beginning of any fiscal year, the President shall, 
        to the maximum extent practicable--
                    ``(A) make all determinations concerning 
                program agreements and resource requests for 
                programs under this section; and
                    ``(B) announce those determinations.
            ``(3) Report.--Not later than December 1 of each 
        fiscal year, the President shall submit to the 
        Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a list of 
        programs, countries, and eligible commodities, and the 
        total amount of funds for transportation and 
        administrative costs, approved to date for the fiscal 
        year under this section.''.
    (j) Effective and Termination Dates.--Subsection (k) of the 
Food for Progress Act of 1985 (7 U.S.C. 1736o(k)) is amended by 
striking ``(k) This section'' and inserting ``(k) Effective and 
Termination Dates.--This section''.
    (k) Administrative Expenses.--Subsection (l) of the Food 
for Progress Act of 1985 (7 U.S.C. 1736o(l)) is amended--
            (1) by striking ``(l)'' and inserting ``(l) 
        Administrative Expenses.--'';
            (2) in paragraph (1), by striking ``$10,000,000'' 
        and inserting ``$15,000,000'';
            (3) in paragraph (3), by striking ``local 
        currencies'' and inserting ``proceeds''; and
            (4) by adding at the end the following:
            ``(4) Humanitarian or development purposes.--The 
        Secretary may authorize the use of proceeds to pay the 
        costs incurred by an eligible entity under this section 
        for--
                    ``(A)(i) programs targeted at hunger and 
                malnutrition; or
                    ``(ii) development programs involving food 
                security;
                    ``(B) transportation, storage, and 
                distribution of eligible commodities provided 
                under this section; and
                    ``(C) administration, sales, monitoring, 
                and technical assistance.''.
    (l) Presidential Approval.--Subsection (m) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o(m)) is amended by striking 
``(m) In carrying'' and inserting ``(m) Presidential 
Approval.--In carrying''.
    (m) Program Management.--The Food for Progress Act of 1985 
is amended by striking subsection (n) (7 U.S.C. 1736o(n)) and 
inserting the following:
    ``(n) Program Management.--
            ``(1) In general.--The President shall ensure, to 
        the maximum extent practicable, that each eligible 
        entity participating in 1 or more programs under this 
        section--
                    ``(A) uses eligible commodities made 
                available under this section--
                            ``(i) in an effective manner;
                            ``(ii) in the areas of greatest 
                        need; and
                            ``(iii) in a manner that promotes 
                        the purposes of this section;
                    ``(B) in using eligible commodities, 
                assesses and takes into account the needs of 
                recipient countries and the target populations 
                of the recipient countries;
                    ``(C) works with recipient countries, and 
                indigenous institutions or groups in recipient 
                countries, to design and carry out mutually 
                acceptable programs authorized under this 
                section; and
                    ``(D) monitors and reports on the 
                distribution or sale of eligible commodities 
                provided under this section using methods that, 
                as determined by the President, facilitate 
                accurate and timely reporting.
            ``(2) Requirements.--
                    ``(A) In general.--Not later than 270 days 
                after the date of enactment of this paragraph, 
                the President shall review and, as necessary, 
                make changes in regulations and internal 
                procedures designed to streamline, improve, and 
                clarify the application, approval, and 
                implementation processes pertaining to 
                agreements under this section.
                    ``(B) Considerations.--In conducting the 
                review, the President shall consider--
                            ``(i) revising procedures for 
                        submitting proposals;
                            ``(ii) developing criteria for 
                        program approval that separately 
                        address the objectives of the program;
                            ``(iii) pre-screening organizations 
                        and proposals to ensure that the 
                        minimum qualifications are met;
                            ``(iv) implementing e-government 
                        initiatives and otherwise improving the 
                        efficiency of the proposal submission 
                        and approval processes;
                            ``(v) upgrading information 
                        management systems;
                            ``(vi) improving commodity and 
                        transportation procurement processes; 
                        and
                            ``(vii) ensuring that evaluation 
                        and monitoring methods are sufficient.
                    ``(C) Consultations.--Not later than 1 year 
                after the date of enactment of this paragraph, 
                the President shall consult with the Committee 
                on Agriculture, and the Committee on 
                International Relations, of the House of 
                Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the 
                Senate on changes made in regulations and 
                procedures.
            ``(3) Reports.--Each eligible entity that enters 
        into an agreement under this section shall submit to 
        the President, at such time as the President may 
        request, a report containing such information as the 
        President may request relating to the use of eligible 
        commodities and funds furnished to the eligible entity 
        under this section.''.

SEC. 3107. MCGOVERN-DOLE INTERNATIONAL FOOD FOR EDUCATION AND CHILD 
                    NUTRITION PROGRAM.

    (a) Definition of Agricultural Commodity.--In this section, 
the term ``agricultural commodity'' means an agricultural 
commodity, or a product of an agricultural commodity, that is 
produced in the United States.
    (b) Program.--Subject to subsection (l), the President may 
establish a program, to be known as ``McGovern-Dole 
International Food for Education and Child Nutrition Program'', 
requiring the procurement of agricultural commodities and the 
provision of financial and technical assistance to carry out--
            (1) preschool and school food for education 
        programs in foreign countries to improve food security, 
        reduce the incidence of hunger, and improve literacy 
        and primary education, particularly with respect to 
        girls; and
            (2) maternal, infant, and child nutrition programs 
        for pregnant women, nursing mothers, infants, and 
        children who are 5 years of age or younger.
    (c) Eligible Commodities and Cost Items.--Notwithstanding 
any other provision of law--
            (1) any agricultural commodity is eligible to be 
        provided under this section;
            (2) as necessary to achieve the purposes of this 
        section, funds appropriated under this section may be 
        used to pay--
                    (A)(i) the cost of acquiring agricultural 
                commodities;
                    (ii) the costs associated with packaging, 
                enrichment, preservation, and fortification of 
                agricultural commodities;
                    (iii) the processing, transportation, 
                handling, and other incidental costs up to the 
                time of the delivery of agricultural 
                commodities free on board vessels in United 
                States ports;
                    (iv) the vessel freight charges from United 
                States ports or designated Canadian 
                transshipment ports, as determined by the 
                Secretary, to designated ports of entry abroad;
                    (v) the costs associated with transporting 
                agricultural commodities from United States 
                ports to designated points of entry abroad in 
                the case--
                            (I) of landlocked countries;
                            (II) of ports that cannot be used 
                        effectively because of natural or other 
                        disturbances;
                            (III) of the unavailability of 
                        carriers to a specific country; or
                            (IV) of substantial savings in 
                        costs or time that may be effected by 
                        the utilization of points of entry 
                        other than ports; and
                    (vi) the charges for general average 
                contributions arising out of the ocean 
                transport of agricultural commodities 
                transferred pursuant thereto;
                    (B) all or any part of the internal 
                transportation, storage, and handling costs 
                incurred in moving the eligible commodity, if 
                the President determines that--
                            (i) payment of the costs is 
                        appropriate; and
                            (ii) the recipient country is a low 
                        income, net food-importing country 
                        that--
                                    (I) meets the poverty 
                                criteria established by the 
                                International Bank for 
                                Reconstruction and Development 
                                for Civil Works Preference; and
                                    (II) has a national 
                                government that is committed to 
                                or is working toward, through a 
                                national action plan, the goals 
                                of the World Declaration on 
                                Education for All convened in 
                                1990 in Jomtien, Thailand, and 
                                the followup Dakar Framework 
                                for Action of the World 
                                Education Forum, convened in 
                                2000;
                    (C) the costs of activities conducted in 
                the recipient countries by a nonprofit 
                voluntary organization, cooperative, or 
                intergovernmental agency or organization that 
                would enhance the effectiveness of the 
                activities implemented by such entities under 
                this section; and
                    (D) the costs of meeting the allowable 
                administrative expenses of private voluntary 
                organizations, cooperatives, or 
                intergovernmental organizations that are 
                implementing activities under this section.
    (d) General Authorities.--The President shall designate 1 
or more Federal agencies to--
            (1) implement the program established under this 
        section;
            (2) ensure that the program established under this 
        section is consistent with the foreign policy and 
        development assistance objectives of the United States; 
        and
            (3) consider, in determining whether a country 
        should receive assistance under this section, whether 
        the government of the country is taking concrete steps 
        to improve the preschool and school systems in the 
        country.
    (e) Eligible Entities.--Assistance may be provided under 
this section to private voluntary organizations, cooperatives, 
intergovernmental organizations, governments of developing 
countries and their agencies, and other organizations.
    (f) Procedures.--
            (1) In general.--In carrying out subsection (b), 
        the President shall ensure that procedures are 
        established that--
                    (A) provide for the submission of proposals 
                by eligible entities, each of which may include 
                1 or more recipient countries, for commodities 
                and other assistance under this section;
                    (B) provide for eligible commodities and 
                assistance on a multiyear basis;
                    (C) ensure that eligible entities 
                demonstrate the organizational capacity and the 
                ability to develop, implement, monitor, report 
                on, and provide accountability for activities 
                conducted under this section;
                    (D) provide for the expedited development, 
                review, and approval of proposals submitted in 
                accordance with this section;
                    (E) ensure monitoring and reporting by 
                eligible entities on the use of commodities and 
                other assistance provided under this section; 
                and
                    (F) allow for the sale or barter of 
                commodities by eligible entities to acquire 
                funds to implement activities that improve the 
                food security of women and children or 
                otherwise enhance the effectiveness of programs 
                and activities authorized under this section.
            (2) Priorities for program funding.--In carrying 
        out paragraph (1) with respect to criteria for 
        determining the use of commodities and other assistance 
        provided for programs and activities authorized under 
        this section, the implementing agency may consider the 
        ability of eligible entities to--
                    (A) identify and assess the needs of 
                beneficiaries, especially malnourished or 
                undernourished mothers and their children who 
                are 5 years of age or younger, and school-age 
                children who are malnourished, undernourished, 
                or do not regularly attend school;
                    (B)(i) in the case of preschool and school-
                age children, target low-income areas where 
                children's enrollment and attendance in school 
                is low or girls' enrollment and participation 
                in preschool or school is low, and incorporate 
                developmental objectives for improving literacy 
                and primary education, particularly with 
                respect to girls; and
                    (ii) in the case of programs to benefit 
                mothers and children who are 5 years of age or 
                younger, coordinate supplementary feeding and 
                nutrition programs with existing or newly-
                established maternal, infant, and children 
                programs that provide health-needs 
                interventions, including maternal, prenatal, 
                and postnatal and newborn care;
                    (C) involve indigenous institutions as well 
                as local communities and governments in the 
                development and implementation of the programs 
                and activities to foster local capacity 
                building and leadership; and
                    (D) carry out multiyear programs that 
                foster local self-sufficiency and ensure the 
                longevity of programs in the recipient country.
    (g) Use of Food and Nutrition Service.--The Food and 
Nutrition Service of the Department of Agriculture may provide 
technical advice on the establishment of programs under 
subsection (b)(1) and on implementation of the programs in the 
field in recipient countries.
    (h) Multilateral Involvement.--
            (1) In general.--The President is urged to engage 
        existing international food aid coordinating mechanisms 
        to ensure multilateral commitments to, and 
        participation in, programs similar to programs 
        supported under this section.
            (2) Reports.--The President shall annually submit 
        to the Committee on International Relations and the 
        Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate a report on the 
        commitments and activities of governments, including 
        the United States government, in the global effort to 
        reduce child hunger and increase school attendance.
    (i) Private Sector Involvement.--The President is urged to 
encourage the support and active involvement of the private 
sector, foundations, and other individuals and organizations in 
programs assisted under this section.
    (j) Graduation.--An agreement with an eligible organization 
under this section shall include provisions--
            (1) to--
                    (A) sustain the benefits to the education, 
                enrollment, and attendance of children in 
                schools in the targeted communities when the 
                provision of commodities and assistance to a 
                recipient country under a program under this 
                section terminates; and
                    (B) estimate the period of time required 
                until the recipient country or eligible 
                organization is able to provide sufficient 
                assistance without additional assistance under 
                this section; or
            (2) to provide other long-term benefits to targeted 
        populations of the recipient country.
    (k) Requirement To Safeguard Local Production and Usual 
Marketing.--The requirement of section 403(a) of the 
Agricultural Trade Development and Assistance Act of 1954 (7 
U.S.C. 1733(a)) applies with respect to the availability of 
commodities under this section.
    (l) Funding.--
            (1) In general.--Of the funds of the Commodity 
        Credit Corporation, the President shall use 
        $100,000,000 for fiscal year 2003 to carry out this 
        section.
            (2) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as are 
        necessary to carry out this section for each of fiscal 
        years 2004 through 2007.
            (3) Administrative expenses.--Funds made available 
        to carry out this section may be used to pay the 
        administrative expenses of any Federal agency 
        implementing or assisting in the implementation of this 
        section.

                       Subtitle C--Miscellaneous

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

    (a) Use of Currencies.--Section 416(b)(7)(D) of the 
Agricultural Act of 1949 (7 U.S.C. 1431(b)(7)(D)) is amended--
            (1) in clauses (i) and (iii), by striking ``foreign 
        currency'' each place it appears;
            (2) in clause (ii)--
                    (A) by striking ``Foreign currencies'' and 
                inserting ``Proceeds''; and
                    (B) by striking ``foreign currency''; and
            (3) in clause (iv)--
                    (A) by striking ``Foreign currency 
                proceeds'' and inserting ``Proceeds'';
                    (B) by striking ``country of origin'' the 
                second place it appears and all that follows 
                through ``as necessary to expedite'' and 
                inserting ``country of origin as necessary to 
                expedite'';
                    (C) by striking ``; or'' and inserting a 
                period; and
                    (D) by striking subclause (II).
    (b) Implementation of Agreements.--Section 416(b) of the 
Agricultural Act of 1949 (7 U.S.C. 1431(b)) (as amended by 
section 3009(b)) is amended--
            (1) in paragraph (8), by striking ``(8)(A)'' and 
        all that follows through ``(B) The Secretary'' and 
        inserting the following:
            ``(8) Administrative provisions.--
                    ``(A) Expedited procedures.--To the maximum 
                extent practicable, expedited procedures shall 
                be used in the implementation of this 
                subsection.
                    ``(B) Estimate of commodities.--The 
                Secretary shall publish in the Federal 
                Register, not later than October 31 of each 
                fiscal year, an estimate of the types and 
                quantities of commodities and products that 
                will be available under this section for the 
                fiscal year.
                    ``(C) Finalization of agreements.--The 
                Secretary is encouraged to finalize program 
                agreements under this section not later than 
                December 31 of each fiscal year.
                    ``(D) Regulations.--The Secretary''; and
            (2) by adding at the end the following:
            ``(11) Requirements.--
                    ``(A) In general.--Not later than 270 days 
                after the date of enactment of this 
                subparagraph, the Secretary shall review and, 
                as necessary, make changes in regulations and 
                internal procedures designed to streamline, 
                improve, and clarify the application, approval, 
                and implementation processes pertaining to 
                agreements under this section.
                    ``(B) Considerations.--In conducting the 
                review, the Secretary shall consider--
                            ``(i) revising procedures for 
                        submitting proposals;
                            ``(ii) developing criteria for 
                        program approval that separately 
                        address the objectives of the program;
                            ``(iii) pre-screening organizations 
                        and proposals to ensure that the 
                        minimum qualifications are met;
                            ``(iv) implementing e-government 
                        initiatives and otherwise improving the 
                        efficiency of the proposal submission 
                        and approval processes;
                            ``(v) upgrading information 
                        management systems;
                            ``(vi) improving commodity and 
                        transportation procurement processes; 
                        and
                            ``(vii) ensuring that evaluation 
                        and monitoring methods are sufficient.
                    ``(C) Consultations.--Not later than 1 year 
                after the date of enactment of this 
                subparagraph, the Secretary shall consult with 
                the Committee on Agriculture, and the Committee 
                on International Relations, of the House of 
                Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the 
                Senate on changes made in regulations and 
                procedures under this paragraph.''.

SEC. 3202. BILL EMERSON HUMANITARIAN TRUST.

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

SEC. 3203. EMERGING MARKETS.

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

SEC. 3204. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

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

``SEC. 1543A. BIOTECHNOLOGY AND AGRICULTURAL TRADE PROGRAM.

    ``(a) Establishment.--There is established in the 
Department the biotechnology and agricultural trade program.
    ``(b) Purpose.--The purpose of the program shall be to 
remove, resolve, or mitigate significant regulatory nontariff 
barriers to the export of United States agricultural 
commodities (as defined in section 102 of the Agricultural 
Trade Act of 1978 (7 U.S.C. 5602)) into foreign markets through 
public and private sector projects funded by grants that 
address--
            ``(1) quick response intervention regarding 
        nontariff barriers to United States exports involving--
                    ``(A) United States agricultural 
                commodities produced through biotechnology;
                    ``(B) food safety;
                    ``(C) disease; or
                    ``(D) other sanitary or phytosanitary 
                concerns; or
            ``(2) developing protocols as part of bilateral 
        negotiations with other countries on issues such as 
        animal health, grain quality, and genetically modified 
        commodities.
    ``(c) Eligible Programs.--Depending on need, as determined 
by the Secretary, activities authorized under this section may 
be carried out through--
            ``(1) this section;
            ``(2) the emerging markets program under section 
        1542; or
            ``(3) the Cochran Fellowship Program under section 
        1543.
    ``(d) Funding.--There is authorized to be appropriated 
$6,000,000 for each of fiscal years 2002 through 2007.''.

SEC. 3205. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS.

    (a) Establishment.--The Secretary of Agriculture shall 
establish an export assistance program (referred to in this 
section as the ``program'') to address unique barriers that 
prohibit or threaten the export of United States specialty 
crops.
    (b) Purpose.--The program shall provide direct assistance 
through public and private sector projects and technical 
assistance to remove, resolve, or mitigate sanitary and 
phytosanitary and related barriers to trade.
    (c) Priority.--The program shall address time sensitive and 
strategic market access projects based on--
            (1) trade effect on market retention, market 
        access, and market expansion; and
            (2) trade impact.
    (d) Funding.--For each of fiscal years 2002 through 2007, 
the Secretary shall make available $2,000,000 of the funds of, 
or an equal value of commodities owned by, the Commodity Credit 
Corporation.

SEC. 3206. GLOBAL MARKET STRATEGY.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, and biennially thereafter, the Secretary 
of Agriculture shall consult with the Committee on Agriculture, 
and the Committee on International Relations, of the House of 
Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate on the formulation and 
implementation of a global market strategy for the Department 
of Agriculture that, to the maximum extent practicable--
            (1) identifies opportunities for the growth of 
        agricultural exports to overseas markets;
            (2) ensures that the resources, programs, and 
        policies of the Department are coordinated with those 
        of other agencies; and
            (3) remove barriers to agricultural trade in 
        overseas markets.
    (b) Review.--The consultations under subsection (a) shall 
include a review of--
            (1) the strategic goals of the Department; and
            (2) the progress of the Department in implementing 
        the strategic goals through the global market strategy.

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

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

SEC. 3208. STUDY ON FEE FOR SERVICES.

    (a) In General.--Not later than 1 year after the date of 
enactment of this Act, the Secretary of Agriculture shall 
submit to the Committee on Agriculture, and the Committee on 
International Relations, of the House of Representatives and 
the Committee on Agriculture, Nutrition and Forestry of the 
Senate a report on the feasibility of instituting a program 
under which the Secretary would charge and retain a fee to 
cover the costs incurred by the Department of Agriculture, 
acting through the Foreign Agricultural Service or any 
successor agency, in providing persons with commercial services 
provided outside the United States.
    (b) Purpose of Program.--The purpose of a program described 
in subsection (a) would be to supplement and not replace any 
services currently offered overseas by the Foreign Agricultural 
Service.
    (c) Market Development Strategy.--A program under 
subsection (b) would be part of an overall market development 
strategy for a particular country or region.
    (d) Pilot Program.--A program under subsection (a) would be 
established on a pilot basis to ensure that the program does 
not disadvantage small- and medium-sized companies, including 
companies that have never engaged in exporting.

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

    (a) Findings.--Congress finds that--
            (1) the international community faces a continuing 
        epidemic of ethnic, sectarian, and criminal violence;
            (2) poverty, hunger, political uncertainty, and 
        social instability are the principal causes of violence 
        and conflict around the world;
            (3) broad-based, equitable economic growth and 
        agriculture development facilitates political 
        stability, food security, democracy, and the rule of 
        law;
            (4) democratic governments are more likely to 
        advocate and observe international laws, protect civil 
        and human rights, pursue free market economies, and 
        avoid external conflicts;
            (5) the United States Agency for International 
        Development has provided critical democracy and 
        governance assistance to a majority of the nations that 
        successfully made the transition to democratic 
        governments during the past 2 decades;
            (6) 43 of the top 50 consumer nations of American 
        agricultural products were once United States foreign 
        aid recipients;
            (7) in the past 50 years, infant child death rates 
        in the developing world have been reduced by 50 
        percent, and health conditions around the world have 
        improved more during this period than in any other 
        period;
            (8) the United States Agency for International 
        Development child survival programs have significantly 
        contributed to a 10 percent reduction in infant 
        mortality rates worldwide in just the past 8 years;
            (9) in providing assistance by the United States 
        and other donors in better seeds and teaching more 
        efficient agricultural techniques over the past 2 
        decades have helped make it possible to feed an 
        additional 1,000,000,000 people in the world;
            (10) despite this progress, approximately 
        1,200,000,000 people, one-quarter of the world's 
        population, live on less that $1 per day, and 
        approximately 3,000,000,000 people live on only $2 per 
        day;
            (11) 95 percent of new births occur in developing 
        countries, including the world's poorest countries; and
            (12) only \1/2\ percent of the Federal budget is 
        dedicated to international economic and humanitarian 
        assistance.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) United States foreign assistance programs 
        should play an increased role in the global fight 
        against terrorism to complement the national security 
        objectives of the United States;
            (2) the United States should lead coordinated 
        international efforts to provide increased financial 
        assistance to countries with impoverished and 
        disadvantaged populations that are the breeding grounds 
        for terrorism; and
            (3) the United States Agency for International 
        Development and the Department of Agriculture should 
        substantially increase humanitarian, economic 
        development, and agricultural assistance to foster 
        international peace and stability and the promotion of 
        human rights.

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

    (a) Agriculture Trade Negotiating Objectives.--It is the 
sense of the Senate that the principal negotiating objective of 
the United States with respect to agricultural trade in all 
multilateral, regional, and bilateral negotiations is to obtain 
competitive opportunities for the export of United States 
agricultural commodities in foreign markets substantially 
equivalent to the competitive opportunities afforded foreign 
exports in United States markets and to achieve fairer and more 
open conditions of agricultural trade in bulk and value-added 
commodities by--
            (1) reducing or eliminating, by a date certain, 
        tariffs or other charges that decrease market 
        opportunities for the export of United States 
        agricultural commodities, giving priority to United 
        States agricultural commodities that are subject to 
        significantly higher tariffs or subsidy regimes of 
        major producing countries;
            (2) immediately eliminating all export subsidies on 
        agricultural commodities worldwide while maintaining 
        bona fide food aid and preserving United States 
        agricultural market development and export credit 
        programs that allow the United States to compete with 
        other foreign export promotion efforts;
            (3) leveling the playing field for United States 
        agricultural producers by disciplining domestic 
        supports such that no other country can provide greater 
        support, measured as a percentage of total agricultural 
        production value, than the United States does while 
        preserving existing green box category to support 
        conservation activities, family farms, and rural 
        communities;
            (4) developing, strengthening, and clarifying rules 
        and effective dispute settlement mechanisms to 
        eliminate practices that unfairly decrease United 
        States market access opportunities for United States 
        agricultural commodities or distort agricultural 
        markets to the detriment of the United States, 
        including--
                    (A) unfair or trade-distorting activities 
                of state trading enterprises and other 
                administrative mechanisms, with emphasis on--
                            (i) requiring price transparency in 
                        the operation of state trading 
                        enterprises and such other mechanisms; 
                        and
                            (ii) ending discriminatory pricing 
                        practices for agricultural commodities 
                        that amount to de facto export 
                        subsidies so that the enterprises or 
                        other mechanisms do not (except in 
                        cases of bona fide food aid) sell 
                        agricultural commodities in foreign 
                        markets at prices below domestic market 
                        prices or prices below the full costs 
                        of acquiring and delivering 
                        agricultural commodities to the foreign 
                        markets;
                    (B) unjustified trade restrictions or 
                commercial requirements affecting new 
                agricultural technologies, including 
                biotechnology;
                    (C) unjustified sanitary or phytosanitary 
                restrictions, including restrictions that are 
                not based on scientific principles, in 
                contravention of the Agreement on the 
                Application of Sanitary and Phytosanitary 
                Measures (as described in section 101(d)(3) of 
                the Uruguay Round Agreements Act (19 U.S.C. 
                3511(d)(3)));
                    (D) other unjustified technical barriers to 
                agricultural trade; and
                    (E) restrictive and nontransparent rules in 
                the administration of tariff rate quotas;
            (5) improving import relief mechanisms to recognize 
        the unique characteristics of perishable agricultural 
        commodities;
            (6) taking into account whether a party to 
        negotiations with respect to trading in an agricultural 
        commodity has--
                    (A) failed to adhere to the provisions of 
                an existing bilateral trade agreement with the 
                United States;
                    (B) circumvented obligations under a 
                multilateral trade agreement to which the 
                United States is a signatory; or
                    (C) manipulated its currency value to the 
                detriment of United States agricultural 
                producers or exporters; and
            (7) otherwise ensuring that countries that accede 
        to the World Trade Organization--
                    (A) have made meaningful market 
                liberalization commitments in agriculture; and
                    (B) make progress in fulfilling those 
                commitments over time.
    (b) Priority for Agriculture Trade.--It is the sense of the 
Senate that--
            (1) reaching a successful agreement on agriculture 
        should be the top priority of United States negotiators 
        in World Trade Organization talks; and
            (2) if the primary export competitors of the United 
        States fail to reduce their trade distorting domestic 
        supports and eliminate export subsidies in accordance 
        with the negotiating objectives expressed in this 
        section, the United States should take steps to 
        increase the leverage of United States negotiators and 
        level the playing field for United States producers, 
        within existing World Trade Organization commitments.
    (c) Consultation With Congressional Committees.--It is the 
sense of the Senate that--
            (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. 4001. SHORT TITLE.

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

                     Subtitle A--Food Stamp Program

SEC. 4101. ENCOURAGEMENT OF PAYMENT OF CHILD SUPPORT.

    (a) Exclusion.--Section 5(d)(6) of the Food Stamp Act of 
1977 (7 U.S.C. 2014(d)(6)) is amended by adding at the end the 
following: ``and child support payments made by a household 
member to or for an individual who is not a member of the 
household if the household member is legally obligated to make 
the payments,''.
    (b) Simplified Procedure.--Section 5 of the Food Stamp Act 
of 1977 (7 U.S.C. 2014) is amended--
            (1) in subsection (e), by striking paragraph (4) 
        and inserting the following:
            ``(4) Deduction for child support payments.--
                    ``(A) In general.--In lieu of providing an 
                exclusion for legally obligated child support 
                payments made by a household member under 
                subsection (d)(6), a State agency may elect to 
                provide a deduction for the amount of the 
                payments.
                    ``(B) Order of determining deductions.--A 
                deduction under this paragraph shall be 
                determined before the computation of the excess 
                shelter expense deduction under paragraph 
                (6).''; and
            (2) by adding at the end the following:
    ``(n) State Options To Simplify Determination of Child 
Support Payments.--Regardless of whether a State agency elects 
to provide a deduction under subsection (e)(4), the Secretary 
shall establish simplified procedures to allow State agencies, 
at the option of the State agencies, to determine the amount of 
any legally obligated child support payments made, including 
procedures to allow the State agency to rely on information 
from the agency responsible for implementing the program under 
part D of title IV of the Social Security Act (42 U.S.C. 651 et 
seq.) concerning payments made in prior months in lieu of 
obtaining current information from the households.''.

SEC. 4102. SIMPLIFIED DEFINITION OF INCOME.

    Section 5(d) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(d)) is amended--
            (1) by striking ``and (15)'' and inserting 
        ``(15)''; and
            (2) by inserting before the period at the end the 
        following: ``, (16) at the option of the State agency, 
        any educational loans on which payment is deferred, 
        grants, scholarships, fellowships, veterans' 
        educational benefits, and the like (other than loans, 
        grants, scholarships, fellowships,veterans' educational 
benefits, and the like excluded under paragraph (3)), to the extent 
that they are required to be excluded under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.), (17) at the option of the State 
agency, any State complementary assistance program payments that are 
excluded for the purpose of determining eligibility for medical 
assistance under section 1931 of the Social Security Act (42 U.S.C. 
1396u-1), and (18) at the option of the State agency, any types of 
income that the State agency does not consider when determining 
eligibility for (A) cash assistance under a program funded under part A 
of title IV of the Social Security Act (42 U.S.C. 601 et seq.) or the 
amount of such assistance, or (B) medical assistance under section 1931 
of the Social Security Act (42 U.S.C. 1396u-1), except that this 
paragraph does not authorize a State agency to exclude wages or 
salaries, benefits under title I, II, IV, X, XIV, or XVI of the Social 
Security Act (42 U.S.C. 301 et seq.), regular payments from a 
government source (such as unemployment benefits and general 
assistance), worker's compensation, child support payments made to a 
household member by an individual who is legally obligated to make the 
payments, or such other types of income the consideration of which the 
Secretary determines by regulation to be essential to equitable 
determinations of eligibility and benefit levels''.

SEC. 4103. STANDARD DEDUCTION.

    Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(e)) is amended by striking paragraph (1) and inserting the 
following:
            ``(1) Standard deduction.--
                    ``(A) In general.--
                            ``(i) Deduction.--The Secretary 
                        shall allow a standard deduction for 
                        each household in the 48 contiguous 
                        States and the District of Columbia, 
                        Alaska, Hawaii, and the Virgin Islands 
                        of the United States in an amount that 
                        is--
                                    ``(I) equal to 8.31 percent 
                                of the income standard of 
                                eligibility established under 
                                subsection (c)(1); but
                                    ``(II) not more than 8.31 
                                percent of the income standard 
                                of eligibility established 
                                under subsection (c)(1) for a 
                                household of 6 members.
                            ``(ii) Minimum amount.--
                        Notwithstanding clause (i), the 
                        standard deduction for each household 
                        in the 48 contiguous States and the 
                        District of Columbia, Alaska, Hawaii, 
                        and the Virgin Islands of the United 
                        States shall be not less than $134, 
                        $229, $189, and $118, respectively.
                    ``(B) Guam.--
                            ``(i) In general.--The Secretary 
                        shall allow a standard deduction for 
                        each household in Guam in an amount 
                        that is--
                                    ``(I) equal to 8.31 percent 
                                of twice the income standard of 
                                eligibility established under 
                                subsection (c)(1) for the 48 
                                contiguous States and the 
                                District of Columbia; but
                                    ``(II) not more than 8.31 
                                percent of twice the income 
                                standard of eligibility 
                                established under subsection 
                                (c)(1) for the 48 contiguous 
                                States and the District of 
                                Columbia for a household of 6 
                                members.
                            ``(ii) Minimum amount.--
                        Notwithstanding clause (i), the 
                        standard deduction for each household 
                        in Guam shall be not less than $269.''.

SEC. 4104. SIMPLIFIED UTILITY ALLOWANCE.

    Section 5(e)(7)(C)(iii) of the Food Stamp Act of 1977 (7 
U.S.C. 2014(e)(7)(C)(iii)) is amended--
            (1) in subclause (I)(bb), by inserting ``(without 
        regard to subclause (III))'' after ``Secretary finds''; 
        and
            (2) by adding at the end the following:
                                    ``(III) Inapplicability of 
                                certain restrictions.--Clauses 
                                (ii)(II) and (ii)(III) shall 
                                not apply in the case of a 
                                State agency that has made the 
                                use of a standard utility 
                                allowance mandatory under 
                                subclause (I).''.

SEC. 4105. SIMPLIFIED DETERMINATION OF HOUSING COSTS.

    (a) In General.--Section 5(e)(7) of the Food Stamp Act of 
1977 (7 U.S.C. 2014(e)(7)) is amended by adding at the end the 
following:
                    ``(D) Homeless households.--
                            ``(i) Alternative deduction.--In 
                        lieu of the deduction provided under 
                        subparagraph (A), a State agency may 
                        elect to allow a household in which all 
                        members are homeless individuals, but 
                        that is not receiving free shelter 
                        throughout the month, to receive a 
                        deduction of $143 per month.
                            ``(ii) Ineligibility.--The State 
                        agency may make a household with 
                        extremely low shelter costs ineligible 
                        for the alternative deduction under 
                        clause (i).''.
    (b) Conforming Amendments.--Section 5 of the Food Stamp Act 
of 1977 (7 U.S.C. 2014) is amended--
            (1) in subsection (e)--
                    (A) by striking paragraph (5); and
                    (B) by redesignating paragraphs (6) and (7) 
                as paragraphs (5) and (6), respectively; and
            (2) in subsection (k)(4)(B), by striking 
        ``subsection (e)(7)'' and inserting ``subsection 
        (e)(6)''.

SEC. 4106. SIMPLIFIED DETERMINATION OF DEDUCTIONS.

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

SEC. 4107. SIMPLIFIED DEFINITION OF RESOURCES.

    Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(g)) is amended--
            (1) in paragraph (1), by striking ``a member who is 
        60 years of age or older'' and inserting ``an elderly 
        or disabled member''; and
            (2) by adding at the end the following:
            ``(6) Exclusion of types of financial resources not 
        considered under certain other federal programs.--
                    ``(A) In general.--Subject to subparagraph 
                (B), a State agency may, at the option of the 
                State agency, exclude from financial resources 
                under this subsection any types of financial 
                resources that the State agency does not 
                consider when determining eligibility for--
                            ``(i) cash assistance under a 
                        program funded under part A of title IV 
                        of the Social Security Act (42 U.S.C. 
                        601 et seq.); or
                            ``(ii) medical assistance under 
                        section 1931 of the Social Security Act 
                        (42 U.S.C. 1396u-1).
                    ``(B) Limitations.--Except to the extent 
                that any of the types of resources specified in 
                clauses (i) through (iv) are excluded under 
                another paragraph of this subsection, 
                subparagraph (A) does not authorize a State 
                agency to exclude--
                            ``(i) cash;
                            ``(ii) licensed vehicles;
                            ``(iii) amounts in any account in a 
                        financial institution that are readily 
                        available to the household; or
                            ``(iv) any other similar type of 
                        resource the inclusion in financial 
                        resources of which the Secretary 
                        determines by regulation to be 
                        essential to equitable determinations 
                        of eligibility under the food stamp 
                        program.''.

SEC. 4108. ALTERNATIVE ISSUANCE SYSTEMS IN DISASTERS.

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

SEC. 4109. STATE OPTION TO REDUCE REPORTING REQUIREMENTS.

    Section 6(c)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(c)(1)) is amended--
            (1) in subparagraph (B), by striking ``on a monthly 
        basis''; and
            (2) by adding at the end the following:
                    ``(D) Frequency of reporting.--
                            ``(i) In general.--Except as 
                        provided in subparagraphs (A) and (C), 
                        a State agency may require households 
                        that report on a periodic basis to 
                        submit reports--
                                    ``(I) not less often than 
                                once each 6 months; but
                                    ``(II) not more often than 
                                once each month.
                            ``(ii) Reporting by households with 
                        excess income.--A household required to 
                        report less often than once each 3 
                        months shall, notwithstanding 
                        subparagraph (B), report in a manner 
                        prescribed by the Secretary if the 
                        income of the household for any month 
                        exceeds the income standard of 
                        eligibility established under section 
                        5(c)(2).''.

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

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

SEC. 4111. REPORT ON ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) Definition of EBT System.--In this section, the term 
``EBT system'' means an electronic benefit transfer system used 
in issuance of benefits under the food stamp program under the 
Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
    (b) Report.--Not later than October 1, 2003, the Secretary 
of Agriculture shall submit to the Committee on Agriculture of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report that--
            (1) describes the status of use by each State 
        agency of EBT systems;
            (2) specifies the number of vendors that have 
        entered into a contract for an EBT system with a State 
        agency;
            (3)(A) specifies the number of State agencies that 
        have entered into an EBT-system contract with multiple 
        EBT-system vendors; and
            (B) describes, for each State agency described in 
        subparagraph (A), how responsibilities are divided 
        among the various vendors;
            (4) with respect to any State in which an EBT 
        system is not operational throughout the State as of 
        October 1, 2002--
                    (A) provides an explanation of the reasons 
                why an EBT system is not operational throughout 
                the State;
                    (B) describes how the reasons are being 
                addressed; and
                    (C) specifies the expected date of 
                operation of an EBT system throughout the 
                State;
            (5) provides a description of--
                    (A) the issues faced by any State agency 
                that has awarded a second EBT-system contract 
                in the 2-year period preceding the date of the 
                report; and
                    (B) the steps that the State agency has 
                taken to address those issues;
            (6) provides a description of--
                    (A) the issues faced by any State agency 
                that will award a second EBT-system contract 
                within the 2-year period beginning on the date 
                of the report; and
                    (B) strategies that the State agency is 
                considering to address those issues;
            (7) describes initiatives being considered or taken 
        by the Department of Agriculture, food retailers, EBT-
        system vendors, and client advocates to address any 
        outstanding issues with respect to EBT systems; and
            (8) examines areas of potential advances in 
        electronic benefit delivery in the 5- to 10-year period 
        beginning on the date of the report, including--
                    (A) access to EBT systems at farmers' 
                markets;
                    (B) increased use of transaction data from 
                EBT systems to identify and prosecute fraud; 
                and
                    (C) fostering of increased competition 
                among EBT-system vendors to ensure cost 
                containment and optimal service.

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

    (a) In General.--Section 8 of the Food Stamp Act of 1977 (7 
U.S.C. 2017) is amended by adding at the end the following:
    ``(f) Alternative Procedures for Residents of Certain Group 
Facilities.--
            ``(1) In general.--
                    ``(A) Applicability.--
                            ``(i) In general.--Subject to 
                        clause (ii), at the option of the State 
                        agency, allotments for residents of any 
                        facility described in subparagraph (B), 
                        (C), (D), or (E) of section 3(i)(5) 
                        (referred to in this subsection as a 
                        `covered facility') may be determined 
                        and issued under this paragraph in lieu 
                        of subsection (a).
                            ``(ii) Limitation.--Unless the 
                        Secretary authorizes implementation of 
                        this paragraph in all States under 
                        paragraph (3), clause (i) shall apply 
                        only to residents of covered facilities 
                        participating in a pilot project under 
                        paragraph (2).
                    ``(B) Amount of allotment.--The allotment 
                for each eligible resident described in 
                subparagraph (A) shall be calculated in 
                accordance with standardized procedures 
                established by the Secretary that take into 
                account the allotments typically received by 
                residents of covered facilities.
                    ``(C) Issuance of allotment.--
                            ``(i) In general.--The State agency 
                        shall issue an allotment determined 
                        under this paragraph to a covered 
                        facility as the authorized 
                        representative of the residents of the 
                        covered facility.
                            ``(ii) Adjustment.--The Secretary 
                        shall establish procedures to ensure 
                        that a covered facility does not 
                        receive a greater proportion of a 
                        resident's monthly allotment than the 
                        proportion of the month during which 
                        the resident lived in the covered 
                        facility.
                    ``(D) Departures of residents of covered 
                facilities.--
                            ``(i) Notification.--Any covered 
                        facility that receives an allotment for 
                        a resident under this paragraph shall--
                                    ``(I) notify the State 
                                agency promptly on the 
                                departure of the resident; and
                                    ``(II) notify the resident, 
                                before the departure of the 
                                resident, that the resident--
                                            ``(aa) is eligible 
                                        for continued benefits 
                                        under the food stamp 
                                        program; and
                                            ``(bb) should 
                                        contact the State 
                                        agency concerning 
                                        continuation of the 
                                        benefits.
                            ``(ii) Issuance to departed 
                        residents.--On receiving a notification 
                        under clause (i)(I) concerning the 
                        departure of a resident, the State 
                        agency--
                                    ``(I) shall promptly issue 
                                the departed resident an 
                                allotment for the days of the 
                                month after the departure of 
                                the resident (calculated in a 
                                manner prescribed by the 
                                Secretary) unless the departed 
                                resident reapplies to 
                                participate in the food stamp 
                                program; and
                                    ``(II) may issue an 
                                allotment for the month 
                                following the month of the 
                                departure (but not any 
                                subsequent month) based on this 
                                paragraph unless the departed 
                                resident reapplies to 
                                participate in the food stamp 
                                program.
                            ``(iii) State option.--The State 
                        agency may elect not to issue an 
                        allotment under clause (ii)(I) if the 
                        State agency lacks sufficient 
                        information on the location of the 
                        departed resident to provide the 
                        allotment.
                            ``(iv) Effect of reapplication.--If 
                        the departed resident reapplies to 
                        participate in the food stamp program, 
                        the allotment of the departed resident 
                        shall be determined without regard to 
                        this paragraph.
            ``(2) Pilot projects.--
                    ``(A) In general.--Before the Secretary 
                authorizes implementation of paragraph (1) in 
                all States, the Secretary shall carry out, at 
                the request of 1 or more State agencies and in 
                1 or more areas of the United States, such 
                number of pilot projects as the Secretary 
                determines to be sufficient to test the 
                feasibility of determining and issuing 
                allotments to residents of covered facilities 
                under paragraph (1) in lieu of subsection (a).
                    ``(B) Project plan.--To be eligible to 
                participate in a pilot project under 
                subparagraph (A), a State agency shall submit 
                to the Secretary for approval a project plan 
                that includes--
                            ``(i) a specification of the 
                        covered facilities in the State that 
                        will participate in the pilot project;
                            ``(ii) a schedule for reports to be 
                        submitted to the Secretary on the pilot 
                        project;
                            ``(iii) procedures for 
                        standardizing allotment amounts that 
                        takes into account the allotments 
                        typically received by residents of 
                        covered facilities; and
                            ``(iv) a commitment to carry out 
                        the pilot project in compliance with 
                        the requirements of this subsection 
                        other than paragraph (1)(B).
            ``(3) Authorization of implementation in all 
        states.--
                    ``(A) In general.--The Secretary shall--
                            ``(i) determine whether to 
                        authorize implementation of paragraph 
                        (1) in all States; and
                            ``(ii) notify the Committee on 
                        Agriculture of the House of 
                        Representatives and the Committee on 
                        Agriculture, Nutrition, and Forestry of 
                        the Senate of the determination.
                    ``(B) Determination not to authorize 
                implementation in all states.--
                            ``(i) In general.--If the Secretary 
                        makes a finding described in clause 
                        (ii), the Secretary--
                                    ``(I) shall not authorize 
                                implementation of paragraph (1) 
                                in all States; and
                                    ``(II) shall terminate all 
                                pilot projects under paragraph 
                                (2) within a reasonable period 
                                of time (as determined by the 
                                Secretary).
                            ``(ii) Finding.--The finding 
                        referred to in clause (i) is that--
                                    ``(I) an insufficient 
                                number of project plans that 
                                the Secretary determines to be 
                                eligible for approval are 
                                submitted by State agencies 
                                under paragraph (2)(B); or
                                    ``(II)(aa) a sufficient 
                                number of pilot projects have 
                                been carried out under 
                                paragraph (2)(A); and
                                    ``(bb) authorization of 
                                implementation of paragraph (1) 
                                in all States is not in the 
                                best interest of the food stamp 
                                program.''.
    (b) Conforming Amendments.--
            (1) Section 3(i) of the Food Stamp Act of 1977 (7 
        U.S.C. 2012(i)) is amended--
                    (A) by striking ``(i) `Household' means (1) 
                an'' and inserting the following:
    ``(i)(1) `Household' means--
            ``(A) an'';
                    (B) in the first sentence, by striking 
                ``others, or (2) a group'' and inserting the 
                following: ``others; or
            ``(B) a group'';
                    (C) in the second sentence, by striking 
                ``Spouses'' and inserting the following:
    ``(2) Spouses'';
                    (D) in the third sentence, by striking 
                ``Notwithstanding'' and inserting the 
                following:
    ``(3) Notwithstanding'';
                    (E) in paragraph (3) (as designated by 
                subparagraph (D)), by striking ``the preceding 
                sentences'' and inserting ``paragraphs (1) and 
                (2)'';
                    (F) in the fourth sentence, by striking 
                ``In no event'' and inserting the following:
    ``(4) In no event'';
                    (G) in the fifth sentence, by striking 
                ``For the purposes of this subsection, 
                residents'' and inserting the following:
    ``(5) For the purposes of this subsection, the following 
persons shall not be considered to be residents of institutions 
and shall be considered to be individual households:
            ``(A) Residents''; and
                    (H) in paragraph (5) (as designated by 
                subparagraph (G))--
                            (i) by striking ``Act, or are 
                        individuals'' and inserting the 
                        following: ``Act.
            ``(B) Individuals'';
                            (ii) by striking ``such section, 
                        temporary'' and inserting the 
                        following: ``that section.
            ``(C) Temporary'';
                            (iii) by striking ``children, 
                        residents'' and inserting the 
                        following: ``children.
            ``(D) Residents'';
                            (iv) by striking ``coupons, and 
                        narcotics'' and inserting the 
                        following: ``coupons.
            ``(E) Narcotics''; and
                            (v) by striking ``shall not'' and 
                        all that follows and inserting a 
                        period.
            (2) Section 5(a) of the Food Stamp Act of 1977 (7 
        U.S.C. 2014(a)) is amended by striking ``the third 
        sentence of section 3(i)'' each place it appears and 
        inserting ``section 3(i)(4)''.
            (3) Section 8(e)(1) of the Food Stamp Act of 1977 
        (7 U.S.C. 2017(e)(1)) is amended by striking ``the last 
        sentence of section 3(i)'' and inserting ``section 
        3(i)(5)''.
            (4) Section 17(b)(1)(B)(iv)(III)(aa) of the Food 
        Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(iv)(III)(aa)) 
        is amended by striking ``the last 2 sentences of 
        section 3(i)'' and inserting ``paragraphs (4) and (5) 
        of section 3(i)''.

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

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

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

    (a) In General.--Section 11(e)(2)(B)(ii) of the Food Stamp 
Act of 1977 (7 U.S.C. 2020(e)(2)(B)(ii)) is amended--
            (1) by inserting ``(I)'' after ``(ii)'';
            (2) in subclause (I) (as designated by paragraph 
        (1)), by adding ``and'' at the end; and
            (3) by adding at the end the following:
                    ``(II) if the State agency maintains a 
                website for the State agency, shall make the 
                application available on the website in each 
                language in which the State agency makes a 
                printed application available;''.
    (b) Effective Date.--The amendments made by this section 
take effect 18 months after the date of enactment of this Act.

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

    (a) In General.--Section 11 of the Food Stamp Act of 1977 
(7 U.S.C. 2020) is amended by adding at the end the following:
    ``(s) Transitional Benefits Option.--
            ``(1) In general.--A State agency may provide 
        transitional food stamp benefits to a household that 
        ceases to receive cash assistance under a State program 
        funded under part A of title IV of the Social Security 
        Act (42 U.S.C. 601 et seq.).
            ``(2) Transitional benefits period.--Under 
        paragraph (1), a household may receive transitional 
        food stamp benefits for a period of not more than 5 
        months after the date on which cash assistance is 
        terminated.
            ``(3) Amount of benefits.--During the transitional 
        benefits period under paragraph (2), a household shall 
        receive an amount of food stamp benefits equal to the 
        allotment received in the month immediately preceding 
        the date on which cash assistance was terminated, 
        adjusted for the change in household income as a result 
        of--
                    ``(A) the termination of cash assistance; 
                and
                    ``(B) at the option of the State agency, 
                information from another program in which the 
                household participates.
            ``(4) Determination of future eligibility.--In the 
        final month of the transitional benefits period under 
        paragraph (2), the State agency may--
                    ``(A) require the household to cooperate in 
                a recertification of eligibility; and
                    ``(B) initiate a new certification period 
                for the household without regard to whether the 
                preceding certification period has expired.
            ``(5) Limitation.--A household shall not be 
        eligible for transitional benefits under this 
        subsection if the household--
                    ``(A) loses eligibility under section 6;
                    ``(B) is sanctioned for a failure to 
                perform an action required by Federal, State, 
                or local law relating to a cash assistance 
                program described in paragraph (1); or
                    ``(C) is a member of any other category of 
                households designated by the State agency as 
                ineligible for transitional benefits.
            ``(6) Applications for recertification.--
                    ``(A) In general.--A household receiving 
                transitional benefits under this subsection may 
                apply for recertification at any time during 
                the transitional benefits period under 
                paragraph (2).
                    ``(B) Determination of allotment.--If a 
                household applies for recertification under 
                subparagraph (A), the allotment of the 
                household for all subsequent months shall be 
                determined without regard to this 
                subsection.''.
    (b) Conforming Amendments.--
            (1) Section 3(c) of the Food Stamp Act of 1977 (7 
        U.S.C. 2012(c)) is amended by adding at the end the 
        following: ``The limits specified in this subsection 
        may be extended until the end of any transitional 
        benefit period established under section 11(s).''.
            (2) Section 6(c) of the Food Stamp Act of 1977 (7 
        U.S.C. 2015(c)) is amended by striking ``No household'' 
        and inserting ``Except in a case in which a household 
        is receiving transitional benefits during the 
        transitional benefits period under section 11(s), no 
        household''.

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

    (a) In General.--Section 11 of the Food Stamp Act of 1977 
(7 U.S.C. 2020) (as amended by section 4115(a)) is amended by 
adding at the end the following:
    ``(t) Grants for Simple Application and Eligibility 
Determination Systems and Improved Access to Benefits.--
            ``(1) In general.--For each of fiscal years 2003 
        through 2007, the Secretary shall use not more than 
        $5,000,000 of funds made available under section 
        18(a)(1) to make grants to pay 100 percent of the costs 
        of eligible entities approved by the Secretary to carry 
        out projects to develop and implement--
                    ``(A) simple food stamp application and 
                eligibility determination systems; or
                    ``(B) measures to improve access to food 
                stamp benefits by eligible households.
            ``(2) Types of projects.--A project under paragraph 
        (1) may consist of--
                    ``(A) coordinating application and 
                eligibility determination processes, including 
                verification practices, under the food stamp 
                program and other Federal, State, and local 
                assistance programs;
                    ``(B) establishing methods for applying for 
                benefits and determining eligibility that--
                            ``(i) more extensively use--
                                    ``(I) communications by 
                                telephone; and
                                    ``(II) electronic 
                                alternatives such as the 
                                Internet; or
                            ``(ii) otherwise improve the 
                        administrative infrastructure used in 
                        processing applications and determining 
                        eligibility;
                    ``(C) developing procedures, training 
                materials, and other resources aimed at 
                reducing barriers to participation and reaching 
                eligible households;
                    ``(D) improving methods for informing and 
                enrolling eligible households; or
                    ``(E) carrying out such other activities as 
                the Secretary determines to be appropriate.
            ``(3) Limitation.--A grant under this subsection 
        shall not be made for the ongoing cost of carrying out 
        any project.
            ``(4) Eligible entities.--To be eligible to receive 
        a grant under this subsection, an entity shall be--
                    ``(A) a State agency administering the food 
                stamp program;
                    ``(B) a State or local government;
                    ``(C) an agency providing health or welfare 
                services;
                    ``(D) a public health or educational 
                entity; or
                    ``(E) a private nonprofit entity such as a 
                community-based organization, food bank, or 
                other emergency feeding organization.
            ``(5) Selection of eligible entities.--The 
        Secretary--
                    ``(A) shall develop criteria for the 
                selection of eligible entities to receive 
                grants under this subsection; and
                    ``(B) may give preference to any eligible 
                entity that consists of a partnership between a 
                governmental entity and a nongovernmental 
                entity.''.
    (b) Conforming Amendments.--Section 17 of the Food Stamp 
Act of 1977 (7 U.S.C. 2026) is amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) and (k) as 
        subsections (i) and (j), respectively.

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

    (a) In General.--Section 14(a) of the Food Stamp Act of 
1977 (7 U.S.C. 2023(a)) is amended by striking paragraph (2) 
and inserting the following:
            ``(2) Delivery of notices.--A notice under 
        paragraph (1) shall be delivered by any form of 
        delivery that the Secretary determines will provide 
        evidence of the delivery.''.
    (b) Effective Date.--The amendment made by this section 
takes effect on the date of enactment of this Act.

SEC. 4118. REFORM OF QUALITY CONTROL SYSTEM.

    (a) In General.--Section 16(c) of the Food Stamp Act of 
1977 (7 U.S.C. 2025(c)) is amended--
            (1) by striking ``(c)(1) The program'' and all that 
        follows through the end of paragraph (1) and inserting 
        the following:
    ``(c) Quality Control System.--
            ``(1) In general.--
                    ``(A) System.--In carrying out the food 
                stamp program, the Secretary shall carry out a 
                system that enhances payment accuracy and 
                improves administration by establishing fiscal 
                incentives that require State agencies with 
                high payment error rates to share in the cost 
                of payment error.
                    ``(B) Adjustment of federal share of 
                administrative costs for fiscal years before 
                fiscal year 2003.--
                            ``(i) In general.--Subject to 
                        clause (ii), with respect to any fiscal 
                        year before fiscal year 2003, the 
                        Secretary shall adjust a State agency's 
                        federally funded share of 
                        administrative costs under subsection 
                        (a), other than the costs already 
                        shared in excess of 50 percent under 
                        the proviso in the first sentence of 
                        subsection (a) or under subsection (g), 
                        by increasing that share of all such 
                        administrative costs by 1 percentage 
                        point to a maximum of 60 percent of all 
                        such administrative costs for each full 
                        \1/10\ of a percentage point by which 
                        the payment error rate is less than 6 
                        percent.
                            ``(ii) Limitation.--Only States 
                        with a rate of invalid decisions in 
                        denying eligibility that is less than a 
                        nationwide percentage that the 
                        Secretary determines to be reasonable 
                        shall be entitled to the adjustment 
                        under clause (i).
                    ``(C) Establishment of liability amount for 
                fiscal year 2003 and thereafter.--With respect 
                to fiscal year 2004 and any fiscal year 
                thereafter for which the Secretary determines 
                that, for the second or subsequent consecutive 
                fiscal year, a 95 percent statistical 
                probability exists that the payment error rate 
                of a State agency exceeds 105 percent of the 
                national performance measure for payment error 
                rates announced under paragraph (6), the 
                Secretary shall establish an amount for which 
                the State agency may be liable (referred to in 
                this paragraph as the `liability amount') that 
                is equal to the product obtained by 
                multiplying--
                            ``(i) the value of all allotments 
                        issued by the State agency in the 
                        fiscal year;
                            ``(ii) the difference between--
                                    ``(I) the payment error 
                                rate of the State agency; and
                                    ``(II) 6 percent; and
                            ``(iii) 10 percent.
                    ``(D) Authority of secretary with respect 
                to liability amount.--With respect to the 
                liability amount established for a State agency 
                under subparagraph (C) for any fiscal year, the 
                Secretary shall--
                            ``(i)(I) waive the responsibility 
                        of the State agency to pay all or any 
                        portion of the liability amount 
                        established for the fiscal year 
                        (referred to in this paragraph as the 
                        `waiver amount');
                            ``(II) require that a portion, not 
                        to exceed 50 percent, of the liability 
                        amount established for the fiscal year 
                        be used by the State agency for new 
                        investment, approved by the Secretary, 
                        to improve administration by the State 
                        agency of the food stamp program 
                        (referred to in this paragraph as the 
                        `new investment amount'), which new 
                        investment amount shall not be matched 
                        by Federal funds;
                            ``(III) designate a portion, not to 
                        exceed 50 percent, of the amount 
                        established for the fiscal year for 
                        payment to the Secretary in accordance 
                        with subparagraph (E) (referred to in 
                        this paragraph as the `at-risk 
                        amount'); or
                            ``(IV) take any combination of the 
                        actions described in subclauses (I) 
                        through (III); or
                            ``(ii) make the determinations 
                        described in clause (i) and enter into 
                        a settlement with the State agency, 
                        only with respect to any waiver amount 
                        or new investment amount, before the 
                        end of the fiscal year in which the 
                        liability amount is determined under 
                        subparagraph (C).
                    ``(E) Payment of at-risk amount for certain 
                states.--
                            ``(i) In general.--A State agency 
                        shall pay to the Secretary the at-risk 
                        amount designated under subparagraph 
                        (D)(i)(III) for any fiscal year in 
                        accordance with clause (ii), if, with 
                        respect to the immediately following 
                        fiscal year, a liability amount has 
                        been established for the State agency 
                        under subparagraph (C).
                            ``(ii) Method of payment of at-risk 
                        amount.--
                                    ``(I) Remission to the 
                                secretary.--In the case of a 
                                State agency required to pay an 
                                at-risk amount under clause 
                                (i), as soon as practicable 
                                after completion of all 
                                administrative and judicial 
                                reviews with respect to that 
                                requirement to pay, the chief 
                                executive officer of the State 
                                shall remit to the Secretary 
                                the at-risk amount required to 
                                be paid.
                                    ``(II) Alternative method 
                                of collection.--
                                            ``(aa) In 
                                        general.--If the chief 
                                        executive officer of 
                                        the State fails to make 
                                        the payment under 
                                        subclause (I) within a 
                                        reasonable period of 
                                        time determined by the 
                                        Secretary, the 
                                        Secretary may reduce 
                                        any amount due to the 
                                        State agency under any 
                                        other provision of this 
                                        section by the amount 
                                        required to be paid 
                                        under clause (i).
                                            ``(bb) Accrual of 
                                        interest.--During any 
                                        period of time 
                                        determined by the 
                                        Secretary under item 
                                        (aa), interest on the 
                                        payment under subclause 
                                        (I) shall not accrue 
                                        under section 13(a)(2).
                    ``(F) Use of portion of liability amount 
                for new investment.--
                            ``(i) Reduction of other amounts 
                        due to state agency.--In the case of a 
                        State agency that fails to comply with 
                        a requirement for new investment under 
                        subparagraph (D)(i)(II) or clause 
                        (iii)(I), the Secretary may reduce any 
                        amount due to the State agency under 
                        any other provision of this section by 
                        the portion of the liability amount 
                        that has not been used in accordance 
                        with that requirement.
                            ``(ii) Effect of state agency's 
                        wholly prevailing on appeal.--If a 
                        State agency begins required new 
                        investment under subparagraph 
                        (D)(i)(II), the State agency appeals 
                        the liability amount of the State 
                        agency, and the determination by the 
                        Secretary of the liability amount is 
                        reduced to $0 on administrative or 
                        judicial review, the Secretary shall 
                        pay to the State agency an amount equal 
                        to 50 percent of the new investment 
                        amount that was included in the 
                        liability amount subject to the appeal.
                            ``(iii) Effect of secretary's 
                        wholly prevailing on appeal.--If a 
                        State agency does not begin required 
                        new investment under subparagraph 
                        (D)(i)(II), the State agency appeals 
                        the liability amount of the State 
                        agency, and the determination by the 
                        Secretary of the liability amount is 
                        wholly upheld on administrative or 
                        judicial review, the Secretary shall--
                                    ``(I) require all or any 
                                portion of the new investment 
                                amount to be used by the State 
                                agency for new investment, 
                                approved by the Secretary, to 
                                improve administration by the 
                                State agency of the food stamp 
                                program, which amount shall not 
                                be matched by Federal funds; 
                                and
                                    ``(II) require payment of 
                                any remaining portion of the 
                                new investment amount in 
                                accordance with subparagraph 
                                (E)(ii).
                            ``(iv) Effect of neither party's 
                        wholly prevailing on appeal.--The 
                        Secretary shall promulgate regulations 
                        regarding obligations of the Secretary 
                        and the State agency in a case in which 
                        the State agency appeals the liability 
                        amount of the State agency and neither 
                        the Secretary nor the State agency 
                        wholly prevails.
                    ``(G) Corrective action plans.--The 
                Secretary shall foster management improvements 
                by the States by requiring State agencies, 
                other than State agencies with payment error 
                rates of less than 6 percent, to develop and 
                implement corrective action plans to reduce 
                payment errors.'';
            (2) in paragraph (4), by striking ``(4)'' and all 
        that follows through the end of the first sentence and 
        inserting the following:
            ``(4) Reporting requirements.--The Secretary may 
        require a State agency to report any factors that the 
        Secretary considers necessary to determine a State 
        agency's payment error rate, liability amount or new 
        investment amount under paragraph (1), or performance 
        under the performance measures under subsection (d).'';
            (3) in paragraph (5)--
                    (A) by striking ``(5)'' and all that 
                follows through the end of the second sentence 
                and inserting the following:
            ``(5) Procedures.--To facilitate the implementation 
        of this subsection, each State agency shall 
        expeditiously submit to the Secretary data concerning 
        the operations of the State agency in each fiscal year 
        sufficient for the Secretary to establish the State 
        agency's payment error rate, liability amount or new 
        investment amount under paragraph (1), or performance 
        under the performance measures under subsection (d).''; 
        and
                    (B) in the last sentence, by striking 
                ``paragraph (1)(C)'' and inserting ``paragraph 
                (1)'';
            (4) in paragraph (6)--
                    (A) by striking ``(6) At'' and inserting 
                the following:
            ``(6) National performance measure for payment 
        error rates.--
                    ``(A) Announcement.--At'';
                    (B) in subparagraph (A) (as designated by 
                subparagraph (A)), by striking ``and incentive 
                payments or claims pursuant to paragraphs 
                (1)(A) and (1)(C)'';
                    (C) in the first and third sentences, by 
                striking ``paragraph (5)'' each place it 
                appears and inserting ``paragraph (8)'';
                    (D) by striking ``Where a State'' and 
                inserting the following:
                    ``(B) Use of alternative measure of state 
                error.--Where a State'';
                    (E) by striking ``The announced'' and 
                inserting the following:
                    ``(C) Use of national performance 
                measure.--The announced'';
                    (F) in subparagraph (C) (as designated by 
                subparagraph (E)), by striking ``the State 
                share of the cost of payment error under 
                paragraph (1)(C)'' and inserting ``the 
                liability amount of a State under paragraph 
                (1)(C)''; and
                    (G) by adding at the end the following:
                    ``(D) No administrative or judicial 
                review.--The national performance measure 
                announced under this paragraph shall not be 
                subject to administrative or judicial 
                review.'';
            (5) in paragraph (7)--
                    (A) by striking ``(7) If the Secretary 
                asserts a financial claim against'' and 
                inserting the following:
            ``(7) Administrative and judicial review.--
                    ``(A) In general.--Except as provided in 
                subparagraphs (B) and (C), if the Secretary 
                asserts a financial claim against or 
                establishes a liability amount with respect 
                to'';
                    (B) in subparagraph (A) (as designated by 
                subparagraph (A)), by striking ``paragraph 
                (1)(C)'' and inserting ``paragraph (1)''; and
                    (C) by adding at the end the following:
                    ``(B) Determination of payment error 
                rate.--With respect to any fiscal year, a 
                determination of the payment error rate of a 
                State agency or a determination whether the 
                payment error rate exceeds 105 percent of the 
                national performance measure for payment error 
                rates shall be subject to administrative or 
                judicial review only if the Secretary 
                establishes a liability amount with respect to 
                the fiscal year under paragraph (1)(C).
                    ``(C) Authority of secretary with respect 
                to liability amount.--An action by the 
                Secretary under subparagraph (D) or (F)(iii) of 
                paragraph (1) shall not be subject to 
                administrative or judicial review.''; and
            (6) in paragraph (8)--
                    (A) in subparagraph (A), by striking 
                ``paragraph (1)(C)'' and inserting ``paragraph 
                (1)'';
                    (B) in subparagraph (C)--
                            (i) in clause (i), by striking 
                        ``payment claimed against State 
                        agencies; and'' and inserting ``payment 
                        claimed against State agencies or 
                        liability amount established with 
                        respect to State agencies;'';
                            (ii) in clause (ii), by striking 
                        ``claims.'' and inserting ``claims or 
                        liability amounts; and''; and
                            (iii) by adding at the end the 
                        following:
                            ``(iii) provide a copy of the 
                        document providing notification under 
                        clause (ii) to the chief executive 
                        officer and the legislature of the 
                        State.''; and
                    (C) in subparagraphs (D) and (H), by 
                inserting ``or liability amount'' after 
                ``claim'' each place it appears.
    (b) Authority To Settle Claims Concerning At-Risk 
Amounts.--Section 13(a) of the Food Stamp Act of 1977 (7 U.S.C. 
2022(a)) is amended--
            (1) by striking ``(a)(1) The'' and inserting the 
        following:
    ``(a) General Authority of the Secretary.--
            ``(1) Determination of claims.--Except in the case 
        of an at-risk amount required under section 
        16(c)(1)(D)(i)(III), the'';
            (2) by striking the fourth sentence;
            (3) by striking ``To the extent'' and inserting the 
        following:
            ``(2) Claims established under quality control 
        system.--To the extent'';
            (4) in paragraph (2) (as designated by paragraph 
        (3)), by striking ``section 16(c)(1)(C)'' and inserting 
        ``section 16(c)(1)'';
            (5) by striking ``Any interest'' and inserting the 
        following:
            ``(3) Computation of interest.--Any interest''; and
            (6) by striking ``(2) Each adult'' and inserting 
        the following:
            ``(4) Joint and several liability of household 
        members.--Each adult''.
    (c) Crediting of Payments to Food Stamp Appropriations 
Account.--Section 18(e) of the Food Stamp Act of 1977 (7 U.S.C. 
2027(e)) is amended in the first sentence--
            (1) by striking ``11(g) and (h), and'' and 
        inserting ``subsections (g) and (h) of section 11,''; 
        and
            (2) by inserting ``and section 16(c)(1),'' after 
        ``section 13,''.
    (d) Conforming Amendments.--Section 22(h) of the Food Stamp 
Act of 1977 (7 U.S.C. 2031(h)) is amended--
            (1) in the second sentence, by striking ``section 
        16(c)(1)(C)'' and inserting ``section 16(c)(1)''; and
            (2) by striking the third sentence.
    (e) Applicability.--The amendments made by this section 
shall not apply with respect to any sanction, appeal, new 
investment agreement, or other action by the Secretary of 
Agriculture or a State agency that is based on a payment error 
rate calculated for any fiscal year before fiscal year 2003.

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

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

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

    (a) In General.--Section 16 of the Food Stamp Act of 1977 
(7 U.S.C. 2025) is amended by striking subsection (d) and 
inserting the following:
    ``(d) Bonuses for States That Demonstrate High or Most 
Improved Performance.--
            ``(1) Fiscal years 2003 and 2004.--
                    ``(A) Guidance.--With respect to fiscal 
                years 2003 and 2004, the Secretary shall 
                establish, in guidance issued to State agencies 
                not later than October 1, 2002--
                            ``(i) performance criteria relating 
                        to--
                                    ``(I) actions taken to 
                                correct errors, reduce rates of 
                                error, and improve eligibility 
                                determinations; and
                                    ``(II) other indicators of 
                                effective administration 
                                determined by the Secretary; 
                                and
                            ``(ii) standards for high and most 
                        improved performance to be used in 
                        awarding performance bonus payments 
                        under subparagraph (B)(ii).
                    ``(B) Performance bonus payments.--With 
                respect to each of fiscal years 2003 and 2004, 
                the Secretary shall--
                            ``(i) measure the performance of 
                        each State agency with respect to the 
                        criteria established under subparagraph 
                        (A)(i); and
                            ``(ii) subject to paragraph (3), 
                        award performance bonus payments in the 
                        following fiscal year, in a total 
                        amount of $48,000,000 for each fiscal 
                        year, to State agencies that meet 
                        standards for high or most improved 
                        performance established by the 
                        Secretary under subparagraph (A)(ii).
            ``(2) Fiscal years 2005 and thereafter.--
                    ``(A) Regulations.--With respect to fiscal 
                year 2005 and each fiscal year thereafter, the 
                Secretary shall--
                            ``(i) establish, by regulation, 
                        performance criteria relating to--
                                    ``(I) actions taken to 
                                correct errors, reduce rates of 
                                error, and improve eligibility 
                                determinations; and
                                    ``(II) other indicators of 
                                effective administration 
                                determined by the Secretary;
                            ``(ii) establish, by regulation, 
                        standards for high and most improved 
                        performance to be used in awarding 
                        performance bonus payments under 
                        subparagraph (B)(ii); and
                            ``(iii) before issuing proposed 
                        regulations to carry out clauses (i) 
                        and (ii), solicit ideas for performance 
                        criteria and standards for high and 
                        most improved performance from State 
                        agencies and organizations that 
                        represent State interests.
                    ``(B) Performance bonus payments.--With 
                respect to fiscal year 2005 and each fiscal 
                year thereafter, the Secretary shall--
                            ``(i) measure the performance of 
                        each State agency with respect to the 
                        criteria established under subparagraph 
                        (A)(i); and
                            ``(ii) subject to paragraph (3), 
                        award performance bonus payments in the 
                        following fiscal year, in a total 
                        amount of $48,000,000 for each fiscal 
                        year, to State agencies that meet 
                        standards for high or most improved 
                        performance established by the 
                        Secretary under subparagraph (A)(ii).
            ``(3) Prohibition on receipt of performance bonus 
        payments.--A State agency shall not be eligible for a 
        performance bonus payment with respect to any fiscal 
        year for which the State agency has a liability amount 
        established under subsection (c)(1)(C).
            ``(4) Payments not subject to judicial review.--A 
        determination by the Secretary whether, and in what 
        amount, to award a performance bonus payment under this 
        subsection shall not be subject to administrative or 
        judicial review.''.
    (b) Effective Date.--The amendment made by this section 
takes effect on the date of enactment of this Act.

SEC. 4121. EMPLOYMENT AND TRAINING PROGRAM.

    (a) Levels of Funding.--Section 16(h)(1) of the Food Stamp 
Act of 1977 (7 U.S.C. 2025(h)(1)) is amended--
            (1) in subparagraph (A), by striking clause (vii) 
        and inserting the following:
                            ``(vii) for each of fiscal years 
                        2002 through 2007, $90,000,000.'';
            (2) by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Allocation.--Funds made available 
                under subparagraph (A) shall be made available 
                to and reallocated among State agencies under a 
                reasonable formula that--
                            ``(i) is determined and adjusted by 
                        the Secretary; and
                            ``(ii) takes into account the 
                        number of individuals who are not 
                        exempt from the work requirement under 
                        section 6(o).''; and
            (3) by striking subparagraphs (E) through (G) and 
        inserting the following:
                    ``(E) Additional allocations for states 
                that ensure availability of work 
                opportunities.--
                            ``(i) In general.--In addition to 
                        the allocations under subparagraph (A), 
                        from funds made available under section 
                        18(a)(1), the Secretary shall allocate 
                        not more than $20,000,000 for each of 
                        fiscal years 2002 through 2007 to 
                        reimburse a State agency that is 
                        eligible under clause (ii) for the 
                        costs incurred in serving food stamp 
                        recipients who--
                                    ``(I) are not eligible for 
                                an exception under section 
                                6(o)(3); and
                                    ``(II) are placed in and 
                                comply with a program described 
                                in subparagraph (B) or (C) of 
                                section 6(o)(2).
                            ``(ii) Eligibility.--To be eligible 
                        for an additional allocation under 
                        clause (i), a State agency shall make 
                        and comply with a commitment to offer a 
                        position in a program described in 
                        subparagraph (B) or (C) of section 
                        6(o)(2) to each applicant or recipient 
                        who--
                                    ``(I) is in the last month 
                                of the 3-month period described 
                                in section 6(o)(2);
                                    ``(II) is not eligible for 
                                an exception under section 
                                6(o)(3);
                                    ``(III) is not eligible for 
                                a waiver under section 6(o)(4); 
                                and
                                    ``(IV) is not exempt under 
                                section 6(o)(6).''.
    (b) Carryover 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 be rescinded on the date of 
enactment of this Act, unless obligated by a State agency 
before that date.
    (c) Participant Expenses.--Section 6(d)(4)(I)(i)(I) of the 
Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)(I)(i)(I)) is 
amended by striking ``, except that the State agency may limit 
such reimbursement to each participant to $25 per month''.
    (d) Federal Reimbursement.--Section 16(h)(3) of the Food 
Stamp Act of 1977 (7 U.S.C. 2025(h)(3)) is amended by striking 
``such total amount shall not exceed an amount representing $25 
per participant per month for costs of transportation and other 
actual costs (other than dependent care costs) and'' and 
inserting ``the amount of the reimbursement for dependent care 
expenses shall not exceed''.
    (e) Effective Date.--The amendments made by this section 
take effect on the date of enactment of this Act.

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

    (a) Reductions in Payments for Administrative Costs.--
Section 16(k)(3) of the Food Stamp Act of 1977 (7 U.S.C. 
2025(k)(3)) is amended--
            (1) in the first sentence of subparagraph (A), by 
        striking ``2002'' and inserting ``2007''; and
            (2) in subparagraph (B)(ii), by striking ``2002'' 
        and inserting ``2007''.
    (b) Cash Payment Pilot Projects.--Section 17(b)(1)(B)(vi) 
of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1)(B)(vi)) is 
amended by striking ``2002'' and inserting ``2007''.
    (c) Authorization of Appropriations.--Section 18(a)(1) of 
the Food Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended in 
the first sentence by striking ``1996 through 2002'' and 
inserting ``2003 through 2007''.

SEC. 4123. EXPANDED GRANT AUTHORITY.

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

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

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

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

    ``(a) Payments to Governmental Entities.--
            ``(1) Definition of governmental entity.--In this 
        subsection, the term `governmental entity' means--
                    ``(A) the Commonwealth of Puerto Rico; and
                    ``(B) American Samoa.
            ``(2) Block grants.--
                    ``(A) Amount of block grants.--From the 
                sums appropriated under this Act, the Secretary 
                shall, subject to this section, pay to 
                governmental entities to pay the expenditures 
                for nutrition assistance programs for needy 
                persons as described in subparagraphs (B) and 
                (C)--
                            ``(i) for fiscal year 2003, 
                        $1,401,000,000; and
                            ``(ii) for each of fiscal years 
                        2004 through 2007, the amount specified 
                        in clause (i), as adjusted by the 
                        percentage by which the thrifty food 
                        plan has been adjusted under section 
                        3(o)(4) between June 30, 2002, and June 
                        30 of the immediately preceding fiscal 
                        year.
                    ``(B) Payments to commonwealth of puerto 
                rico.--
                            ``(i) In general.--For fiscal year 
                        2003 and each fiscal year thereafter, 
                        the Secretary shall use 99.6 percent of 
                        the funds made available under 
                        subparagraph (A) for payment to the 
                        Commonwealth of Puerto Rico to pay--
                                    ``(I) 100 percent of the 
                                expenditures by the 
                                Commonwealth for the fiscal 
                                year for the provision of 
                                nutrition assistance included 
                                in the plan of the Commonwealth 
                                approved under subsection (b); 
                                and
                                    ``(II) 50 percent of the 
                                related administrative 
                                expenses.
                            ``(ii) Exception for expenditures 
                        for certain systems.--Notwithstanding 
                        clause (i), the Commonwealth of Puerto 
                        Rico may spend in fiscal year 2002 or 
                        2003 not more than $6,000,000 of the 
                        amount required to be paid to the 
                        Commonwealth for fiscal year 2002 under 
                        this paragraph (as in effect on the day 
                        before the date of enactment of this 
                        clause) to pay 100 percent of the costs 
                        of--
                                    ``(I) upgrading and 
                                modernizing the electronic data 
                                processing system used to carry 
                                out nutrition assistance 
                                programs for needy persons;
                                    ``(II) implementing systems 
                                to simplify the determination 
                                of eligibility to receive the 
                                nutrition assistance; and
                                    ``(III) operating systems 
                                to deliver the nutrition 
                                assistance through electronic 
                                benefit transfers.
                    ``(C) Payments to american samoa.--For 
                fiscal year 2003 and each fiscal year 
                thereafter, the Secretary shall use 0.4 percent 
                of the funds made available under subparagraph 
                (A) for payment to American Samoa to pay 100 
                percent of the expenditures by American Samoa 
                for a nutrition assistance program extended 
                under section 601(c) of Public Law 96-597 (48 
                U.S.C. 1469d(c)).
                    ``(D) Carryover of funds.--For fiscal year 
                2002 and each fiscal year thereafter, not more 
                than 2 percent of the funds made available 
                under this paragraph for the fiscal year to 
                each governmental entity may be carried over to 
                the following fiscal year.
            ``(3) Time and manner of payments to commonwealth 
        of puerto rico.--The'';
            (2) in subsection (b), by striking ``subsection 
        (a)(1)(A)'' each place it appears and inserting 
        ``subsection (a)(2)(B)''; and
            (3) in subsection (c), by striking ``subsection 
        (a)(1)(A)'' each place it appears and inserting 
        ``subsection (a)(2)(A)''.
    (b) Conforming Amendment.--Section 24 of the Food Stamp Act 
of 1977 (7 U.S.C. 2033) is repealed.
    (c) Applicability.--
            (1) In general.--Except as provided in paragraph 
        (2), the amendments made by this section apply 
        beginning on October 1, 2002.
            (2) Exceptions.--Subparagraphs (B)(ii) and (D) of 
        section 19(a)(2) of the Food Stamp Act of 1977 (as 
        amended by subsection (a)(1)) apply beginning on the 
        date of enactment of this Act.
    (d) Effective Date.--The amendments made by this section 
take effect on the date of enactment of this Act.

SEC. 4125. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    (a) In General.--Section 25 of the Food Stamp Act of 1977 
(7 U.S.C. 2034) is amended--
            (1) in subsection (a)--
                    (A) by striking ``(1)'' and inserting 
                ``(1)(A)'';
                    (B) by redesignating paragraphs (2) and (3) 
                as subparagraphs (B) and (C), respectively, of 
                paragraph (1);
                    (C) in paragraph (1)(C) (as redesignated by 
                subparagraph (B)), by striking the period at 
                the end and inserting ``; or''; and
                    (D) by adding at the end the following:
            ``(2) meet specific State, local, or neighborhood 
        food and agricultural needs, including needs for--
                    ``(A) infrastructure improvement and 
                development;
                    ``(B) planning for long-term solutions; or
                    ``(C) the creation of innovative marketing 
                activities that mutually benefit agricultural 
                producers and low-income consumers.'';
            (2) in subsection (b)(2)(B)--
                    (A) by striking ``$2,500,000'' and 
                inserting ``$5,000,000''; and
                    (B) by striking ``2002'' and inserting 
                ``2007'';
            (3) in subsection (d), by striking paragraph (4) 
        and inserting the following:
            ``(4) encourage long-term planning activities, and 
        multisystem, interagency approaches with 
        multistakeholder collaborations, that build the long-
        term capacity of communities to address the food and 
        agricultural problems of the communities, such as food 
        policy councils and food planning associations.''; and
            (4) by striking subsection (h) and inserting the 
        following:
    ``(h) Innovative Programs for Addressing Common Community 
Problems.--
            ``(1) In general.--The Secretary shall offer to 
        enter into a contract with, or make a grant to, 1 
        nongovernmental organization that meets the 
        requirements of paragraph (2) to coordinate with 
        Federal agencies, States, political subdivisions, and 
        nongovernmental organizations (collectively referred to 
        in this subsection as `targeted entities') to gather 
        information, and recommend to the targeted entities, 
        innovative programs for addressing common community 
        problems, including--
                    ``(A) loss of farms and ranches;
                    ``(B) rural poverty;
                    ``(C) welfare dependency;
                    ``(D) hunger;
                    ``(E) the need for job training; and
                    ``(F) the need for self-sufficiency by 
                individuals and communities.
            ``(2) Nongovernmental organization.--The 
        nongovernmental organization referred to in paragraph 
        (1) shall--
                    ``(A) be selected by the Secretary on a 
                competitive basis;
                    ``(B) be experienced in working with other 
                targeted entities and in organizing workshops 
                that demonstrate programs to other targeted 
                entities;
                    ``(C) be experienced in identifying 
                programs that effectively address community 
                problems described in paragraph (1) that can be 
                implemented by other targeted entities;
                    ``(D) be experienced in, and capable of, 
                receiving information from and communicating 
                with other targeted entities throughout the 
                United States;
                    ``(E) be experienced in operating a 
                national information clearinghouse that 
                addresses 1 or more of the community problems 
                described in paragraph (1); and
                    ``(F) as a condition of entering into the 
                contract or receiving the grant referred to in 
                paragraph (1), agree--
                            ``(i) to contribute in-kind 
                        resources toward implementation of the 
                        contract or grant;
                            ``(ii) to provide to other targeted 
                        entities information and guidance on 
                        the innovative programs referred to in 
                        paragraph (1); and
                            ``(iii) to operate a national 
                        information clearinghouse on innovative 
                        means for addressing community problems 
                        described in paragraph (1) that--
                                    ``(I) is easily usable by--
                                            ``(aa) Federal, 
                                        State, and local 
                                        government agencies;
                                            ``(bb) local 
                                        community leaders;
                                            ``(cc) 
                                        nongovernmental 
                                        organizations; and
                                            ``(dd) the public; 
                                        and
                                    ``(II) includes information 
                                on approved community food 
                                projects.
            ``(3) Audits; effective use of funds.--The 
        Secretary shall establish auditing procedures and 
        otherwise ensure the effective use of funds made 
        available to carry out this subsection.
            ``(4) Funding.--Not later than 90 days after the 
        date of enactment of this paragraph, and on October 1 
        of each of fiscal years 2003 through 2007, the 
        Secretary shall allocate to carry out this subsection 
        $200,000 of the funds made available under subsection 
        (b), to remain available until expended.''.
    (b) Effective Date.--The amendments made by this section 
take effect on the date of enactment of this Act.

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

    (a) In General.--Section 27(a) of the Food Stamp Act of 
1977 (7 U.S.C. 2036(a)) is amended--
            (1) by striking ``1997 through 2002'' and inserting 
        ``2002 through 2007''; and
            (2) by striking ``$100,000,000'' and inserting 
        ``$140,000,000''.
    (b) Effective Date.--The amendments made by this section 
take effect on October 1, 2001.

                   Subtitle B--Commodity Distribution

SEC. 4201. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

    (a) Commodity Distribution Program.--Section 4(a) of the 
Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c 
note; Public Law 93-86) is amended in the first sentence by 
striking ``2002'' and inserting ``2007''.
    (b) Commodity Supplemental Food Program.--Section 5 of the 
Agriculture and Consumer Protection Act of 1973 (7 U.S.C. 612c 
note; Public Law 93-86) is amended--
            (1) by striking subsection (a) and inserting the 
        following:
    ``(a) Grants Per Assigned Caseload Slot.--
            ``(1) In general.--In carrying out the program 
        under section 4 (referred to in this section as the 
        `commodity supplemental food program'), for each of 
        fiscal years 2003 through 2007, the Secretary shall 
        provide to each State agency from funds made available 
        to carry out that section (including any such funds 
        remaining available from the preceding fiscal year), a 
        grant per assigned caseload slot for administrative 
        costs incurred by the State agency and local agencies 
        in the State in operating the commodity supplemental 
        food program.
            ``(2) Amount of grants.--
                    ``(A) Fiscal year 2003.--For fiscal year 
                2003, the amount of each grant per assigned 
                caseload slot shall be equal to the amount of 
                the grant per assigned caseload slot for 
                administrative costs in 2001, adjusted by the 
                percentage change between--
                            ``(i) the value of the State and 
                        local government price index, as 
                        published by the Bureau of Economic 
                        Analysis of the Department of Commerce, 
                        for the 12-month period ending June 30, 
                        2001; and
                            ``(ii) the value of that index for 
                        the 12-month period ending June 30, 
                        2002.
                    ``(B) Fiscal years 2004 through 2007.--For 
                each of fiscal years 2004 through 2007, the 
                amount of each grant per assigned caseload slot 
                shall be equal to the amount of the grant per 
                assigned caseload slot for the preceding fiscal 
                year, adjusted by the percentage change 
                between--
                            ``(i) the value of the State and 
                        local government price index, as 
                        published by the Bureau of Economic 
                        Analysis of the Department of Commerce, 
                        for the 12-month period ending June 30 
                        of the second preceding fiscal year; 
                        and
                            ``(ii) the value of that index for 
                        the 12-month period ending June 30 of 
                        the preceding fiscal year.'';
            (2) in subsection (d)(2), by striking ``2002'' each 
        place it appears and inserting ``2007''; and
            (3) by striking subsection (l) and inserting the 
        following:
    ``(l) Use of Approved Food Safety Technology.--
            ``(1) In general.--In acquiring commodities for 
        distribution through a program specified in paragraph 
        (2), the Secretary shall not prohibit the use of any 
        technology to improve food safety that--
                    ``(A) has been approved by the Secretary; 
                or
                    ``(B) has been approved or is otherwise 
                allowed by the Secretary of Health and Human 
                Services.
            ``(2) Programs.--A program referred to in paragraph 
        (1) is a program authorized under--
                    ``(A) this Act;
                    ``(B) the Food Stamp Act of 1977 (7 U.S.C. 
                2011 et seq.);
                    ``(C) the Emergency Food Assistance Act of 
                1983 (7 U.S.C. 7501 et seq.);
                    ``(D) the Richard B. Russell National 
                School Lunch Act (42 U.S.C. 1751 et seq.); or
                    ``(E) the Child Nutrition Act of 1966 (42 
                U.S.C. 1771 et seq.).''.
    (c) Additional Funding for Certain States.--
            (1) In general.--Not later than 30 days after the 
        date of enactment of this Act, of the funds of the 
        Commodity Credit Corporation, the Secretary of 
        Agriculture shall make available an amount equal to the 
        amount that the Secretary of Agriculture determines to 
        be necessary to permit each State that began 
        administering the commodity supplemental food program 
        under the Agriculture and Consumer Protection Act of 
        1973 (7 U.S.C. 612c note; Public Law 93-86) in the 2000 
        caseload cycle to administer the program, through the 
        2002 caseload cycle, at a caseload level that is not 
        less than the originally assigned caseload level of the 
        State.
            (2) Provision to states.--The Secretary shall 
        provide to each State described in paragraph (1) for 
        the purpose described in that paragraph the funds made 
        available under that paragraph.
    (d) Effective Date.--The amendment made by subsection 
(b)(3) takes effect on the date of enactment of this Act.

SEC. 4202. COMMODITY DONATIONS.

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

``SEC. 17. COMMODITY DONATIONS.

    ``(a) In General.--Notwithstanding any other provision of 
law concerning commodity donations, any commodities acquired in 
the conduct of the operations of the Commodity Credit 
Corporation and any commodities acquired under section 32 of 
the Act of August 24, 1935 (7 U.S.C. 612c), to the extent that 
the commodities are in excess of the quantities of commodities 
that are essential to carry out other authorized activities of 
the Commodity Credit Corporation and the Secretary (including 
any quantity specifically reserved for a specific purpose), may 
be used for any program authorized to be carried out by the 
Secretary that involves the acquisition of commodities for use 
in a domestic feeding program, including any program conducted 
by the Secretary that provides commodities to individuals in 
cases of hardship.
    ``(b) Programs.--A program described in subsection (a) 
includes a program authorized by--
            ``(1) the Emergency Food Assistance Act of 1983 (7 
        U.S.C. 7501 et seq.);
            ``(2) the Richard B. Russell National School Lunch 
        Act (42 U.S.C. 1751 et seq.);
            ``(3) the Child Nutrition Act of 1966 (42 U.S.C. 
        1771 et seq.);
            ``(4) the Older Americans Act of 1965 (42 U.S.C. 
        3001 et seq.); or
            ``(5) such other laws as the Secretary determines 
        to be appropriate.''.
    (b) Effective Date.--The amendments made by this section 
take effect on the date of enactment of this Act.

SEC. 4203. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL NUTRITION 
                    PROJECTS.

    Section 1114(a)(2)(A) of the Agriculture and Food Act of 
1981 (7 U.S.C. 1431e(2)(A)) is amended in the first sentence by 
striking ``2002'' and inserting ``2007''.

SEC. 4204. EMERGENCY FOOD ASSISTANCE.

    Section 204(a)(1) of the Emergency Food Assistance Act of 
1983 (7 U.S.C. 7508(a)(1)) is amended in the first sentence--
            (1) by striking ``$50,000,000'' and inserting 
        ``$60,000,000'';
            (2) by striking ``1991 through 2002'' and inserting 
        ``2003 through 2007'';
            (3) by striking ``administrative'';
            (4) by inserting ``storage,'' after 
        ``processing,''; and
            (5) by inserting ``, including commodities secured 
        by gleaning (as defined in section 111(a) of the Hunger 
        Prevention Act of 1988 (7 U.S.C. 612c note; Public Law 
        100-435))'' after ``sources''.

            Subtitle C--Child Nutrition and Related Programs

SEC. 4301. COMMODITIES FOR SCHOOL LUNCH PROGRAM.

    (a) In General.--Section 6(e)(1)(B) of the Richard B. 
Russell National School Lunch Act (42 U.S.C. 1755(e)(1)(B)) is 
amended by striking ``2001'' and inserting ``2003''.
    (b) Effective Date.--The amendment made by this section 
takes effect on the date of enactment of this Act.

SEC. 4302. ELIGIBILITY FOR FREE AND REDUCED PRICE MEALS.

    (a) In General.--Section 9(b) of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1758(b)) is amended by 
adding at the end the following:
            ``(7) Exclusion of certain military housing 
        allowances.--For each of fiscal years 2002 and 2003, 
        the amount of a basic allowance provided under section 
        403 of title 37, 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. 4303. PURCHASES OF LOCALLY PRODUCED FOODS.

    Section 9 of the Richard B. Russell National School Lunch 
Act (42 U.S.C. 1758) is amended by adding at the end the 
following:
    ``(j) Purchases of Locally Produced Foods.--
            ``(1) In general.--The Secretary shall--
                    ``(A) encourage institutions participating 
                in the school lunch program under this Act and 
                the school breakfast program established by 
                section 4 of the Child Nutrition Act of 1966 
                (42 U.S.C. 1773) to purchase, in addition to 
                other food purchases, locally produced foods 
                for school meal programs, to the maximum extent 
                practicable and appropriate;
                    ``(B) advise institutions participating in 
                a program described in subparagraph (A) of the 
                policy described in that subparagraph and post 
                information concerning the policy on the 
                website maintained by the Secretary; and
                    ``(C) in accordance with requirements 
                established by the Secretary, provide startup 
                grants to not more than 200 institutions to 
                defray the initial costs of equipment, 
                materials, and storage facilities, and similar 
                costs, incurred in carrying out the policy 
                described in subparagraph (A).
            ``(2) Authorization of appropriations.--
                    ``(A) In general.--There is authorized to 
                be appropriated to carry out this subsection 
                $400,000 for each of fiscal years 2003 through 
                2007, to remain available until expended.
                    ``(B) Limitation.--No amounts may be made 
                available to carry out this subsection unless 
                specifically provided by an appropriation 
                Act.''.

SEC. 4304. APPLICABILITY OF BUY-AMERICAN REQUIREMENT TO PUERTO RICO.

    Section 12(n) of the Richard B. Russell National School 
Lunch Act (42 U.S.C. 1760(n)) is amended by adding at the end 
the following:
            ``(4) Applicability to puerto rico.--Paragraph 
        (2)(A) shall apply to a school food authority in the 
        Commonwealth of Puerto Rico with respect to domestic 
        commodities or products that are produced in the 
        Commonwealth of Puerto Rico in sufficient quantities to 
        meet the needs of meals provided under the school lunch 
        program under this Act or the school breakfast program 
        under section 4 of the Child Nutrition Act of 1966 (42 
        U.S.C. 1773).''.

SEC. 4305. FRUIT AND VEGETABLE PILOT PROGRAM.

    (a) In General.--Section 18 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1769) is amended by adding 
at the end the following:
    ``(g) Fruit and Vegetable Pilot Program.--
            ``(1) In general.--In the school year beginning 
        July 2002, the Secretary shall carry out a pilot 
        program to make available to students in 25 elementary 
        or secondary schools in each of 4 States, and in 
        elementary or secondary schools on 1 Indian 
        reservation, free fresh and dried fruits and fresh 
        vegetables throughout the school day in 1 or more areas 
        designated by the school.
            ``(2) Publicity.--A school that participates in the 
        pilot program shall widely publicize within the school 
        the availability of free fruits and vegetables under 
        the pilot program.
            ``(3) Report.--Not later than May 1, 2003, the 
        Secretary, acting through the Administrator of the 
        Economic Research Service, shall report to the 
        Committee on Education and the Workforce of the House 
        of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate on the results of 
        the pilot program.
            ``(4) Funding.--The Secretary shall use not more 
        than $6,000,000 of funds made available under section 
        32 of the Act of August 24, 1935 (7 U.S.C. 612c), to 
        carry out this subsection (other than paragraph 
        (3)).''.
    (b) Effective Date.--The amendment made by this section 
takes effect on the date of enactment of this Act.

SEC. 4306. ELIGIBILITY FOR ASSISTANCE UNDER THE SPECIAL SUPPLEMENTAL 
                    NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN.

    (a) In General.--Section 17(d)(2)(B)(i) of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786(d)(2)(B)(i)) is amended--
            (1) by striking ``basic allowance for housing'' and 
        inserting the following: ``basic allowance--
                    ``(I) for housing'';
            (2) by striking ``and'' at the end and inserting 
        ``or''; and
            (3) by adding at the end the following:
                    ``(II) provided under section 403 of title 
                37, United States Code, for housing that is 
                acquired or constructed under subchapter IV of 
                chapter 169 of title 10, United States Code, or 
                any related provision of law; and''.
    (b) Effective Date.--The amendments made by this section 
take effect on the date of enactment of this Act.

SEC. 4307. WIC FARMERS' MARKET NUTRITION PROGRAM.

    (a) In General.--Section 17(m)(9) of the Child Nutrition 
Act of 1966 (42 U.S.C. 1786(m)(9)) is amended--
            (1) by striking ``(9)(A) There'' and inserting the 
        following:
            ``(9) Funding.--
                    ``(A) In general.--
                            ``(i) Authorization of 
                        appropriations.--There''; and
            (2) in subparagraph (A), by adding at the end the 
        following:
                            ``(ii) Mandatory funding.--Not 
                        later than 30 days after the date of 
                        enactment of the Food Stamp 
                        Reauthorization Act of 2002, of the 
                        funds of the Commodity Credit 
                        Corporation, the Secretary shall make 
                        available to carry out this subsection 
                        $15,000,000, to remain available until 
                        expended.''.
    (b) Effective Date.--The amendments made by this section 
take effect on the date of enactment of this Act.

                       Subtitle D--Miscellaneous

SEC. 4401. PARTIAL RESTORATION OF BENEFITS TO LEGAL IMMIGRANTS.

    (a) Restoration of Benefits to Disabled Aliens.--Section 
402(a)(2)(F) of the Personal Responsibility and Work 
Opportunity Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(F)) 
is amended by striking ``(i) was'' and all that follows through 
``(II) in the case'' and inserting the following:
                            ``(i) in the case of the specified 
                        Federal program described in paragraph 
                        (3)(A)--
                                    ``(I) was lawfully residing 
                                in the United States on August 
                                22, 1996; and
                                    ``(II) is blind or disabled 
                                (as defined in paragraph (2) or 
                                (3) of section 1614(a) of the 
                                Social Security Act (42 U.S.C. 
                                1382c(a))); and
                            ``(ii) in the case''.
    (b) Restoration of Benefits to All Qualified Alien 
Children.--
            (1) In general.--Section 402(a)(2)(J) of the 
        Personal Responsibility and Work Opportunity 
        Reconciliation Act of 1996 (8 U.S.C. 1612(a)(2)(J)) is 
        amended by striking ``who'' and all that follows 
        through ``is under'' and inserting ``who is under''.
            (2) Conforming amendments.--
                    (A) Section 403(c)(2) of the Personal 
                Responsibility and Work Opportunity 
                Reconciliation Act of 1996 (8 U.S.C. 
                1613(c)(2)) is amended by adding at the end the 
                following:
                    ``(L) Assistance or benefits provided to 
                individuals under the age of 18 under the Food 
                Stamp Act of 1977 (7 U.S.C. 2011 et seq.).''.
                    (B) Section 421(d) of the Personal 
                Responsibility and Work Opportunity 
                Reconciliation Act of 1996 (8 U.S.C. 1631(d)) 
                is amended by adding at the end the following:
            ``(3) This section shall not apply to assistance or 
        benefits under the Food Stamp Act of 1977 (7 U.S.C. 
        2011 et seq.) to the extent that a qualified alien is 
        eligible under section 402(a)(2)(J).''.
                    (C) Section 5(i)(2)(E) of the Food Stamp 
                Act of 1977 (7 U.S.C. 2014(i)(2)(E)) is amended 
                by inserting before the period at the end the 
                following: ``, or to any alien who is under 18 
                years of age''.
            (3) Effective date.--The amendments made by this 
        subsection take effect on October 1, 2003.
    (c) Food Stamp Exception for Certain Qualified Aliens.--
            (1) In general.--Section 402(a)(2) of the Personal 
        Responsibility and Work Opportunity Reconciliation Act 
        of 1996 (8 U.S.C. 1612(a)(2)) is amended by adding at 
        the end the following:
                    ``(L) Food stamp exception for certain 
                qualified aliens.--With respect to eligibility 
                for benefits for the specified Federal program 
                described in paragraph (3)(B), paragraph (1) 
                shall not apply to any qualified alien who has 
                resided in the United States with a status 
                within the meaning of the term `qualified 
                alien' for a period of 5 years or more 
                beginning on the date of the alien's entry into 
                the United States.''.
            (2) Effective date.--The amendment made by 
        paragraph (1) takes effect on April 1, 2003.

SEC. 4402. SENIORS FARMERS' MARKET NUTRITION PROGRAM.

    (a) Establishment.--The Secretary of Agriculture shall use 
$5,000,000 for fiscal year 2002, and $15,000,000 for each of 
fiscal years 2003 through 2007, of the funds available to the 
Commodity Credit Corporation to carry out and expand a seniors 
farmers' market nutrition program.
    (b) Program Purposes.--The purposes of the seniors farmers' 
market nutrition program are--
            (1) to provide resources in the form of fresh, 
        nutritious, unprepared, locally grown fruits, 
        vegetables, and herbs from farmers' markets, roadside 
        stands, and community supported agriculture programs to 
        low-income seniors;
            (2) to increase the domestic consumption of 
        agricultural commodities by expanding or aiding in the 
        expansion of domestic farmers' markets, roadside 
        stands, and community supported agriculture programs; 
        and
            (3) to develop or aid in the development of new and 
        additional farmers' markets, roadside stands, and 
        community supported agriculture programs.
    (c) Regulations.--The Secretary may issue such regulations 
as the Secretary considers necessary to carry out the seniors 
farmers' market nutrition program.

SEC. 4403. NUTRITION INFORMATION AND AWARENESS PILOT PROGRAM.

    (a) Establishment.--The Secretary of Agriculture may 
establish, in not more than 5 States, for a period not to 
exceed 4 years for each participating State, a pilot program to 
increase the domestic consumption of fresh fruits and 
vegetables.
    (b) Purpose.--
            (1) In general.--Subject to paragraph (2), the 
        purpose of the program shall be to provide funds to 
        States solely for the purpose of assisting eligible 
        public and private sector entities with cost-share 
        assistance to carry out demonstration projects--
                    (A) to increase fruit and vegetable 
                consumption; and
                    (B) to convey related health promotion 
                messages.
            (2) Limitation.--Funds made available to a State 
        under the program shall not be used to disparage any 
        agricultural commodity.
    (c) Selection of States.--
            (1) In general.--In selecting States to participate 
        in the program, the Secretary shall take into 
        consideration, with respect to projects and activities 
        proposed to be carried out under the program--
                    (A) experience in carrying out similar 
                projects or activities;
                    (B) innovative approaches; and
                    (C) the ability of the State to promote and 
                track increases in levels of fruit and 
                vegetable consumption.
            (2) Enhancement of existing state programs.--The 
        Secretary may use the pilot program to enhance existing 
        State programs that are consistent with the purpose of 
        the pilot program specified in subsection (b).
    (d) Eligible Public and Private Sector Entities.--
            (1) In general.--A participating State shall 
        establish eligibility criteria under which the State 
        may select public and private sector entities to carry 
        out demonstration projects under the program.
            (2) Limitation.--No funds made available to States 
        under the program shall be provided by a State to any 
        foreign for-profit corporation.
    (e) Federal Share.--The Federal share of the cost of any 
project or activity carried out using funds provided under this 
section shall be 50 percent.
    (f) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $10,000,000 for 
each of fiscal years 2002 through 2007.

SEC. 4404. HUNGER FELLOWSHIP PROGRAM.

    (a) Short Title; Findings.--
            (1) Short title.--This section may be cited as the 
        ``Congressional Hunger Fellows Act of 2002''.
            (2) Findings.--The Congress finds as follows:
                    (A) There is a critical need for 
                compassionate individuals who are committed to 
                assisting people who suffer from hunger as well 
                as a need for such individuals to initiate and 
                administer solutions to the hunger problem.
                    (B) Bill Emerson, the distinguished late 
                Representative from the 8th District of 
                Missouri, demonstrated his commitment to 
                solving the problem of hunger in a bipartisan 
                manner, his commitment to public service, and 
                his great affection for the institution and the 
                ideals of the United States Congress.
                    (C) George T. (Mickey) Leland, the 
                distinguished late Representative from the 18th 
                District of Texas, demonstrated his compassion 
                for those in need, his high regard for public 
                service, and his lively exercise of political 
                talents.
                    (D) The special concern that Mr. Emerson 
                and Mr. Leland demonstrated during their lives 
                for the hungry and poor was an inspiration for 
                others to work toward the goals of equality and 
                justice for all.
                    (E) These two outstanding leaders 
                maintained a special bond of friendship 
                regardless of political affiliation and worked 
                together to encourage future leaders to 
                recognize and provide service to others, and 
                therefore it is especially appropriate to honor 
                the memory of Mr. Emerson and Mr. Leland by 
                creating a fellowship program to develop and 
                train the future leaders of the United States 
                to pursue careers in humanitarian service.
    (b) Establishment.--There is established as an independent 
entity of the legislative branch of the United States 
Government the Congressional Hunger Fellows Program 
(hereinafter in this section referred to as the ``Program'').
    (c) Board of Trustees.--
            (1) In general.--The Program shall be subject to 
        the supervision and direction of a Board of Trustees.
            (2) Members of the board of trustees.--
                    (A) Appointment.--The Board shall be 
                composed of 6 voting members appointed under 
                clause (i) and one nonvoting ex officio member 
                designated in clause (ii) as follows:
                            (i) Voting members.--(I) The 
                        Speaker of the House of Representatives 
                        shall appoint two members.
                            (II) The minority leader of the 
                        House of Representatives shall appoint 
                        one member.
                            (III) The majority leader of the 
                        Senate shall appoint two members.
                            (IV) The minority leader of the 
                        Senate shall appoint one member.
                            (ii) Nonvoting member.--The 
                        Executive Director of the program shall 
                        serve as a nonvoting ex officio member 
                        of the Board.
                    (B) Terms.--Members of the Board shall 
                serve a term of 4 years.
                    (C) Vacancy.--
                            (i) Authority of board.--A vacancy 
                        in the membership of the Board does not 
                        affect the power of the remaining 
                        members to carry out this section.
                            (ii) Appointment of successors.--A 
                        vacancy in the membership of the Board 
                        shall be filled in the same manner in 
                        which the original appointment was 
                        made.
                            (iii) Incomplete term.--If a member 
                        of the Board does not serve the full 
                        term applicable to the member, the 
                        individual appointed to fill the 
                        resulting vacancy shall be appointed 
                        for the remainder of the term of the 
                        predecessor of the individual.
                    (D) Chairperson.--As the first order of 
                business of the first meeting of the Board, the 
                members shall elect a Chairperson.
                    (E) Compensation.--
                            (i) In general.--Subject to clause 
                        (ii), members of the Board may not 
                        receive compensation for service on the 
                        Board.
                            (ii) Travel.--Members of the Board 
                        may be reimbursed for travel, 
                        subsistence, and other necessary 
                        expenses incurred in carrying out the 
                        duties of the program.
            (3) Duties.--
                    (A) Bylaws.--
                            (i) Establishment.--The Board shall 
                        establish such bylaws and other 
                        regulations as may be appropriate to 
                        enable the Board to carry out this 
                        section, including the duties described 
                        in this paragraph.
                            (ii) Contents.--Such bylaws and 
                        other regulations shall include 
                        provisions--
                                    (I) for appropriate fiscal 
                                control, funds accountability, 
                                and operating principles;
                                    (II) to prevent any 
                                conflict of interest, or the 
                                appearance of any conflict of 
                                interest, in the procurement 
                                and employment actions taken by 
                                the Board or by any officer or 
                                employee of the Board and in 
                                the selection and placement of 
                                individuals in the fellowships 
                                developed under the program;
                                    (III) for the resolution of 
                                a tie vote of the members of 
                                the Board; and
                                    (IV) for authorization of 
                                travel for members of the 
                                Board.
                            (iii) Transmittal to congress.--Not 
                        later than 90 days after the date of 
                        the first meeting of the Board, the 
                        Chairperson of the Board shall transmit 
                        to the appropriate congressional 
                        committees a copy of such bylaws.
                    (B) Budget.--For each fiscal year the 
                program is in operation, the Board shall 
                determine a budget for the program for that 
                fiscal year. All spending by the program shall 
                be pursuant to such budget unless a change is 
                approved by the Board.
                    (C) Process for selection and placement of 
                fellows.--The Board shall review and approve 
                the process established by the Executive 
                Director for the selection and placement of 
                individuals in the fellowships developed under 
                the program.
                    (D) Allocation of funds to fellowships.--
                The Board of Trustees shall determine the 
                priority of the programs to be carried out 
                under this section and the amount of funds to 
                be allocated for the Emerson and Leland 
                fellowships.
    (d) Purposes; Authority of Program.--
            (1) Purposes.--The purposes of the program are--
                    (A) to encourage future leaders of the 
                United States to pursue careers in humanitarian 
                service, to recognize the needs of people who 
                are hungry and poor, and to provide assistance 
                and compassion for those in need;
                    (B) to increase awareness of the importance 
                of public service; and
                    (C) to provide training and development 
                opportunities for such leaders through 
                placement in programs operated by appropriate 
                organizations or entities.
            (2) Authority.--The program is authorized to 
        develop such fellowships to carry out the purposes of 
        this section, including the fellowships described in 
        paragraph (3).
            (3) Fellowships.--
                    (A) In general.--The program shall 
                establish and carry out the Bill Emerson Hunger 
                Fellowship and the Mickey Leland Hunger 
                Fellowship.
                    (B) Curriculum.--
                            (i) In general.--The fellowships 
                        established under subparagraph (A) 
                        shall provide experience and training 
                        to develop the skills and understanding 
                        necessary to improve the humanitarian 
                        conditions and the lives of individuals 
                        who suffer from hunger, including--
                                    (I) training in direct 
                                service to the hungry in 
                                conjunction with community-
                                based organizations through a 
                                program of field placement; and
                                    (II) experience in policy 
                                development through placement 
                                in a governmental entity or 
                                nonprofit organization.
                            (ii) Focus of bill emerson hunger 
                        fellowship.--The Bill Emerson Hunger 
                        Fellowship shall address hunger and 
                        other humanitarian needs in the United 
                        States.
                            (iii) Focus of mickey leland hunger 
                        fellowship.--The Mickey Leland Hunger 
                        Fellowship shall address international 
                        hunger and other humanitarian needs.
                            (iv) Workplan.--To carry out clause 
                        (i) and to assist in the evaluation of 
                        the fellowships under paragraph (4), 
                        the program shall, for each fellow, 
                        approve a work plan that identifies the 
                        target objectives for the fellow in the 
                        fellowship, including specific duties 
                        and responsibilities related to those 
                        objectives.
                    (C) Period of fellowship.--
                            (i) Emerson fellow.--A Bill Emerson 
                        Hunger Fellowship awarded under this 
                        paragraph shall be for no more than 1 
                        year.
                            (ii) Leland fellow.--A Mickey 
                        Leland Hunger Fellowship awarded under 
                        this paragraph shall be for no more 
                        than 2 years. Not less than 1 year of 
                        the fellowship shall be dedicated to 
                        fulfilling the requirement of 
                        subparagraph (B)(i)(I).
                    (D) Selection of fellows.--
                            (i) In general.--A fellowship shall 
                        be awarded pursuant to a nationwide 
                        competition established by the program.
                            (ii) Qualification.--A successful 
                        applicant shall be an individual who 
                        has demonstrated--
                                    (I) an intent to pursue a 
                                career in humanitarian service 
                                and outstanding potential for 
                                such a career;
                                    (II) leadership potential 
                                or actual leadership 
                                experience;
                                    (III) diverse life 
                                experience;
                                    (IV) proficient writing and 
                                speaking skills;
                                    (V) an ability to live in 
                                poor or diverse communities; 
                                and
                                    (VI) such other attributes 
                                as determined to be appropriate 
                                by the Board.
                            (iii) Amount of award.--
                                    (I) In general.--Each 
                                individual awarded a fellowship 
                                under this paragraph shall 
                                receive a living allowance and, 
                                subject to subclause (II), an 
                                end-of-service award as 
                                determined by the program.
                                    (II) Requirement for 
                                successful completion of 
                                fellowship.--Each individual 
                                awarded a fellowship under this 
                                paragraph shall be entitled to 
                                receive an end-of-service award 
                                at an appropriate rate for each 
                                month of satisfactory service 
                                as determined by the Executive 
                                Director.
                            (iv) Recognition of fellowship 
                        award.--
                                    (I) Emerson fellow.--An 
                                individual awarded a fellowship 
                                from the Bill Emerson Hunger 
                                Fellowship shall be known as an 
                                ``Emerson Fellow''.
                                    (II) Leland fellow.--An 
                                individual awarded a fellowship 
                                from the Mickey Leland Hunger 
                                Fellowship shall be known as a 
                                ``Leland Fellow''.
            (4) Evaluation.--The program shall conduct periodic 
        evaluations of the Bill Emerson and Mickey Leland 
        Hunger Fellowships. Such evaluations shall include the 
        following:
                    (A) An assessment of the successful 
                completion of the work plan of the fellow.
                    (B) An assessment of the impact of the 
                fellowship on the fellows.
                    (C) An assessment of the accomplishment of 
                the purposes of the program.
                    (D) An assessment of the impact of the 
                fellow on the community.
    (e) Trust Fund.--
            (1) Establishment.--There is established the 
        Congressional Hunger Fellows Trust Fund (hereinafter in 
        this section referred to as the ``Fund'') in the 
        Treasury of the United States, consisting of amounts 
        appropriated to the Fund under subsection (i), amounts 
        credited to it under paragraph (3), and amounts 
        received under subsection (g)(3)(A).
            (2) Investment of funds.--The Secretary of the 
        Treasury shall invest the full amount of the Fund. Each 
        investment shall be made in an interest bearing 
        obligation of the United States or an obligation 
        guaranteed as to principal and interest by the United 
        States that, as determined by the Secretary in 
        consultation with the Board, has a maturity suitable 
        for the Fund.
            (3) Return on investment.--Except as provided in 
        subsection (f)(2), the Secretary of the Treasury shall 
        credit to the Fund the interest on, and the proceeds 
        from the sale or redemption of, obligations held in the 
        Fund.
    (f) Expenditures; Audits.--
            (1) In general.--The Secretary of the Treasury 
        shall transfer to the program from the amounts 
        described in subsection (e)(3) and subsection (g)(3)(A) 
        such sums as the Board determines are necessary to 
        enable the program to carry out the provisions of this 
        section.
            (2) Limitation.--The Secretary may not transfer to 
        the program the amounts appropriated to the Fund under 
        subsection (i).
            (3) Use of funds.--Funds transferred to the program 
        under paragraph (1) shall be used for the following 
        purposes:
                    (A) Stipends for fellows.--To provide for a 
                living allowance for the fellows.
                    (B) Travel of fellows.--To defray the costs 
                of transportation of the fellows to the 
                fellowship placement sites.
                    (C) Insurance.--To defray the costs of 
                appropriate insurance of the fellows, the 
                program, and the Board.
                    (D) Training of fellows.--To defray the 
                costs of preservice and midservice education 
                and training of fellows.
                    (E) Support staff.--Staff described in 
                subsection (g).
                    (F) Awards.--End-of-service awards under 
                subsection (d)(3)(D)(iii)(II).
                    (G) Additional approved uses.--For such 
                other purposes that the Board determines 
                appropriate to carry out the program.
            (4) Audit by gao.--
                    (A) In general.--The Comptroller General of 
                the United States shall conduct an annual audit 
                of the accounts of the program.
                    (B) Books.--The program shall make 
                available to the Comptroller General all books, 
                accounts, financial records (including records 
                of salaries of the Executive Director and other 
                personnel), reports, files, and all other 
                papers, things, or property belonging to or in 
                use by the program and necessary to facilitate 
                such audit.
                    (C) Report to congress.--The Comptroller 
                General shall submit a copy of the results of 
                each such audit to the appropriate 
                congressional committees.
    (g) Staff; Powers of Program.--
            (1) Executive director.--
                    (A) In general.--The Board shall appoint an 
                Executive Director of the program who shall 
                administer the program. The Executive Director 
                shall carry out such other functions consistent 
                with the provisions of this section as the 
                Board shall prescribe.
                    (B) Restriction.--The Executive Director 
                may not serve as Chairperson of the Board.
                    (C) Compensation.--The Executive Director 
                shall be paid at a rate not to exceed the rate 
                of basic pay payable for level V of the 
                Executive Schedule under section 5316 of title 
                5, United States Code.
            (2) Staff.--
                    (A) In general.--With the approval of a 
                majority of the Board, the Executive Director 
                may appoint and fix the pay of additional 
                personnel as the Executive Director considers 
                necessary and appropriate to carry out the 
                functions of the provisions of this section.
                    (B) Compensation.--An individual appointed 
                under subparagraph (A) shall be paid at a rate 
                not to exceed the rate of basic pay payable for 
                level GS-15 of the General Schedule.
            (3) Powers.--In order to carry out the provisions 
        of this section, the program may perform the following 
        functions:
                    (A) Gifts.--The program may solicit, 
                accept, use, and dispose of gifts, bequests, or 
                devises of services or property, both real and 
                personal, for the purpose of aiding or 
                facilitating the work of the program. Gifts, 
                bequests, or devises of money and proceeds from 
                sales of other property received as gifts, 
                bequests, or devises shall be deposited in the 
                Fund and shall be available for disbursement 
                upon order of the Board.
                    (B) Experts and consultants.--The program 
                may procure temporary and intermittent services 
                under section 3109 of title 5, United States 
                Code, but at rates for individuals not to 
                exceed the daily equivalent of the maximum 
                annual rate of basic pay payable for GS-15 of 
                the General Schedule.
                    (C) Contract authority.--The program may 
                contract, with the approval of a majority of 
                the members of the Board, with and compensate 
                Government and private agencies or persons 
                without regard to section 3709 of the Revised 
                Statutes (41 U.S.C. 5).
                    (D) Other necessary expenditures.--The 
                program shall make such other expenditures 
                which the program considers necessary to carry 
                out the provisions of this section, but 
                excluding project development.
    (h) Report.--Not later than December 31 of each year, the 
Board shall submit to the appropriate congressional committees 
a report on the activities of the program carried out during 
the previous fiscal year, and shall include the following:
            (1) An analysis of the evaluations conducted under 
        subsection (d)(4) (relating to evaluations of the 
        Emerson and Leland fellowships and accomplishment of 
        the program purposes) during that fiscal year.
            (2) A statement of the total amount of funds 
        attributable to gifts received by the program in that 
        fiscal year (as authorized under subsection (g)(3)(A)), 
        and the total amount of such funds that were expended 
        to carry out the program that fiscal year.
    (i) Authorization of Appropriations.--There are authorized 
to be appropriated $18,000,000 to carry out the provisions of 
this section.
    (j) Definition.--In this section, the term ``appropriate 
congressional committees'' means--
            (1) the Committee on Agriculture and the Committee 
        on International Relations of the House of 
        Representatives; and
            (2) the Committee on Agriculture, Nutrition, and 
        Forestry and the Committee on Foreign Relations of the 
        Senate.

SEC. 4405. GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this title, the amendments 
made by this title take effect on October 1, 2002.

                            TITLE V--CREDIT

                    Subtitle A--Farm Ownership Loans

SEC. 5001. DIRECT LOANS.

    Section 302(b)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1922(b)(1)) is amended by striking 
``operated'' and inserting ``participated in the business 
operations of''.

SEC. 5002. FINANCING OF BRIDGE LOANS.

    Section 303(a)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1923(a)(1)) is amended--
            (1) in subparagraph (C), by striking ``or'' at the 
        end;
            (2) in subparagraph (D), by striking the period at 
        the end and inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(E) refinancing a temporary bridge loan 
                made by a commercial or cooperative lender to a 
                farmer or rancher for the acquisition of land 
                for a farm or ranch, if--
                            ``(i) the Secretary approved an 
                        application for a direct farm ownership 
                        loan to the farmer or rancher for 
                        acquisition of the land; and
                            ``(ii) funds for direct farm 
                        ownership loans under section 346(b) 
                        were not available at the time at which 
                        the application was approved.''.

SEC. 5003. AMOUNT OF GUARANTEE OF LOANS FOR FARM OPERATIONS ON TRIBAL 
                    LANDS.

    Section 309(h) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1929(h)) is amended--
            (1) in paragraph (4), by striking ``paragraphs (5) 
        and (6)'' and inserting ``paragraphs (5), (6), and 
        (7)''; and
            (2) by adding at the end the following:
            ``(7) Amount of guarantee of loans for farm 
        operations on tribal lands.--In the case of an 
        operating loan made to a farmer or rancher whose farm 
        or ranch land is subject to the jurisdiction of an 
        Indian tribe and whose loan is secured by 1 or more 
        security instruments that are subject to the 
        jurisdiction of an Indian tribe, the Secretary shall 
        guarantee 95 percent of the loan.''.

SEC. 5004. GUARANTEE OF LOANS MADE UNDER STATE BEGINNING FARMER OR 
                    RANCHER PROGRAMS.

    Section 309 of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1929) is amended by adding at the end the 
following:
    ``(j) Guarantee of Loans Made Under State Beginning Farmer 
or Rancher Programs.--The Secretary may guarantee under this 
title a loan made under a State beginning farmer or rancher 
program, including a loan financed by the net proceeds of a 
qualified small issue agricultural bond for land or property 
described in section 144(a)(12)(B)(ii) of the Internal Revenue 
Code of 1986.''.

SEC. 5005. DOWN PAYMENT LOAN PROGRAM.

    Section 310E of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1935) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1), by striking ``30 
                percent'' and inserting ``40 percent''; and
                    (B) in paragraph (3), by striking ``10 
                years'' and inserting ``15 years''; and
            (2) in subsection (c)(3)(B), by striking ``10-
        year'' and inserting ``15-year''.

SEC. 5006. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    Subtitle A of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1922 et seq.) is amended by adding at the end the 
following:

``SEC. 310F. BEGINNING FARMER AND RANCHER CONTRACT LAND SALES PROGRAM.

    ``(a) In General.--If the Secretary makes a determination 
that the risk is comparable under subsection (b), the Secretary 
shall carry out a pilot program in not fewer than 5 States, as 
determined by the Secretary, to guarantee up to 5 loans per 
State in each of fiscal years 2003 through 2007 made by a 
private seller of a farm or ranch to a qualified beginning 
farmer or rancher on a contract land sale basis, if the loan 
meets applicable underwriting criteria and a commercial lending 
institution agrees to serve as escrow agent.
    ``(b) Date of Commencement of Program.--Not later than 
October 1, 2002, the Secretary shall make a determination on 
whether guarantees of contract land sales present a risk that 
is comparable with the risk presented in the case of guarantees 
to commercial lenders.''.

                      Subtitle B--Operating Loans

SEC. 5101. DIRECT LOANS.

    Section 311(c) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1941(c)) is amended--
            (1) in paragraph (1)--
                    (A) in the matter that precedes 
                subparagraph (A), by striking ``paragraph (3)'' 
                and inserting ``paragraphs (3) and (4)''; and
                    (B) in subparagraph (A), by striking ``who 
                has not'' and all that follows through ``5 
                years''; and
            (2) by adding at the end the following:
            ``(4) Waivers.--
                    ``(A) Farm and ranch operations on tribal 
                lands.--The Secretary shall waive the 
                limitation under paragraph (1)(C) or (3) for a 
                direct loan made under this subtitle to a 
                farmer or rancher whose farm or ranch land is 
                subject to the jurisdiction of an Indian tribe 
                and whose loan is secured by 1 or more security 
                instruments that are subject to the 
                jurisdiction of an Indian tribe if the 
                Secretary determines that commercial credit is 
                not generally available for such farm or ranch 
                operations.
                    ``(B) Other farm and ranch operations.--On 
                a case-by-case determination not subject to 
                administrative appeal, the Secretary may grant 
                a borrower a waiver, 1 time only for a period 
                of 2 years, of the limitation under paragraph 
                (1)(C) or (3) for a direct operating loan if 
                the borrower demonstrates to the satisfaction 
                of the Secretary that--
                            ``(i) the borrower has a viable 
                        farm or ranch operation;
                            ``(ii) the borrower applied for 
                        commercial credit from at least 2 
                        commercial lenders;
                            ``(iii) the borrower was unable to 
                        obtain a commercial loan (including a 
                        loan guaranteed by the Secretary); and
                            ``(iv) the borrower successfully 
                        has completed, or will complete within 
                        1 year, borrower training under section 
                        359 (from which requirement the 
                        Secretary shall not grant a waiver 
                        under section 359(f)).''.

SEC. 5102. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BORROWERS ARE 
                    ELIGIBLE FOR GUARANTEED ASSISTANCE.

    During the period beginning January 1, 2002, and ending 
December 31, 2006, section 319(b) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1949(b)) shall have no force or 
effect.

                      Subtitle C--Emergency Loans

SEC. 5201. EMERGENCY LOANS IN RESPONSE TO AN EMERGENCY RESULTING FROM 
                    QUARANTINES.

    (a) Loan Authority.--Section 321(a) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1961(a)) is amended--
            (1) in each of the 1st and 3rd sentences, by 
        striking ``a natural disaster in the United States or 
        by'' and inserting ``a quarantine imposed by the 
        Secretary under the Plant Protection Act or the animal 
        quarantine laws (as defined in section 2509 of the 
        Food, Agriculture, Conservation, and Trade Act of 
        1990), a natural disaster in the United States, or''; 
        and
            (2) in the 4th sentence--
                    (A) by striking ``a natural disaster'' and 
                inserting ``such a quarantine or natural 
                disaster''; and
                    (B) by striking ``by such natural 
                disaster'' and inserting ``by such quarantine 
                or natural disaster''.
    (b) Conforming Amendment.--Section 323 of such Act (7 
U.S.C. 1963) is amended by inserting ``quarantine,'' before 
``natural disaster''.

                 Subtitle D--Administrative Provisions

SEC. 5301. EVALUATIONS OF DIRECT AND GUARANTEED LOAN PROGRAMS.

    (a) Studies.--The Secretary of Agriculture shall conduct 2 
studies of the direct and guaranteed loan progams under 
sections 302 and 311 of the Consolidated Farm and Rural 
Development Act, each of which shall include an examination of 
the number, average principal amount, and delinquency and 
default rates of loans provided or guaranteed during the period 
covered by the study.
    (b) Periods Covered.--
            (1) First study.--One study under subsection (a) 
        shall cover the 1-year period that begins 1 year after 
        the date of the enactment of this section.
            (2) Second study.--One study under subsection (a) 
        shall cover the 1-year period that begins 3 years after 
        such date of enactment.
    (c) Reports to the Congress.--At the end of the period 
covered by each study under this section, the Secretary of 
Agriculture shall submit to the Congress a report that contains 
an evaluation of the results of the study, including an 
analysis of the effectiveness of loan programs referred to in 
subsection (a) in meeting the credit needs of agricultural 
producers in an efficient and fiscally responsible manner.

SEC. 5302. ELIGIBILITY OF TRUSTS AND LIMITED LIABILITY COMPANIES FOR 
                    FARM OWNERSHIP LOANS, FARM OPERATING LOANS, AND 
                    EMERGENCY LOANS.

    (a) In General.--Sections 302(a), 311(a), and 321(a) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1922(a), 
1941(a), and 1961(a)) are each amended by striking ``and joint 
operations'' each place it appears and inserting ``joint 
operations, trusts, and limited liability companies''.
    (b) Conforming Amendment.--Section 321(a) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) 
is amended by striking ``or joint operations'' each place it 
appears and inserting ``joint operations, trusts, or limited 
liability companies''.

SEC. 5303. DEBT SETTLEMENT.

    Section 331(b)(4) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1981(b)(4)) is amended--
            (1) by striking ``The Secretary may release'' and 
        inserting ``After consultation with a local or area 
        county committee, the Secretary may release''; and
            (2) by striking ``carried out--'' and all that 
        follows through ``(B) after'' and inserting ``carried 
        out after''.

SEC. 5304. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS; PRIVATE 
                    COLLECTION AGENCIES.

    (a) In General.--Section 331 of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1981) is amended by striking 
subsections (d) and (e).
    (b) Application.--The amendment made by subsection (a) 
shall not apply to a contract entered into before the effective 
date of this Act.

SEC. 5305. INTEREST RATE OPTIONS FOR LOANS IN SERVICING.

    Section 331B of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981b) is amended--
            (1) by striking ``lower of (1) the'' and inserting 
        the following: ``lowest of--
            ``(1) the''; and
            (2) by striking ``original loan or (2) the'' and 
        inserting the following: ``original loan;
            ``(2) the rate being charged by the Secretary for 
        loans, other than guaranteed loans, of the same type at 
        the time at which the borrower applies for a deferral, 
        consolidation, rescheduling, or reamortization; or
            ``(3) the''.

SEC. 5306. ELIMINATION OF REQUIREMENT THAT SECRETARY REQUIRE COUNTY 
                    COMMITTEES TO CERTIFY IN WRITING THAT CERTAIN LOAN 
                    REVIEWS HAVE BEEN CONDUCTED.

    Section 333(2) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1983(2)) is amended to read as 
follows:
            ``(2) except with respect to a loan under section 
        306, 310B, or 314--
                    ``(A) an annual review of the credit 
                history and business operation of the borrower; 
                and
                    ``(B) an annual review of the continued 
                eligibility of the borrower for the loan;''.

SEC. 5307. SIMPLIFIED LOAN GUARANTEE APPLICATION AVAILABLE FOR LOANS OF 
                    GREATER AMOUNTS.

    Section 333A(g)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1983a(g)(1)) is amended by striking 
``$50,000'' and inserting ``$125,000''.

SEC. 5308. INVENTORY PROPERTY.

    Section 335(c) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1985(c)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (B)--
                            (i) in clause (i), by striking ``75 
                        days'' and inserting ``135 days''; and
                            (ii) by adding at the end the 
                        following:
                            ``(iv) Combining and dividing of 
                        property.--To the maximum extent 
                        practicable, the Secretary shall 
                        maximize the opportunity for beginning 
                        farmers and ranchers to purchase real 
                        property acquired by the Secretary 
                        under this title by combining or 
                        dividing inventory parcels of the 
                        property in such manner as the 
                        Secretary determines to be 
                        appropriate.''; and
                    (B) in subparagraph (C)--
                            (i) by striking ``75 days'' and 
                        inserting ``135 days''; and
                            (ii) by striking ``75-day period'' 
                        and inserting ``135-day period''; and
            (2) by striking paragraph (2) and inserting the 
        following:
            ``(2) Previous lease.--In the case of real property 
        acquired before April 4, 1996, that the Secretary 
        leased before April 4, 1996, not later than 60 days 
        after the lease expires, the Secretary shall offer to 
        sell the property in accordance with paragraph (1).''.

SEC. 5309. ADMINISTRATION OF CERTIFIED LENDERS AND PREFERRED CERTIFIED 
                    LENDERS PROGRAMS.

    Section 339 of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1989) is amended by adding at the end the 
following:
    ``(e) Administration of Certified Lenders and Preferred 
Certified Lenders Programs.--The Secretary may administer the 
loan guarantee programs under subsections (c) and (d) through 
central offices established in States or in multi-State 
areas.''.

SEC. 5310. DEFINITIONS.

    (a) Qualified Beginning Farmer or Rancher.--Section 
343(a)(11)(F) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1991(a)(11)(F)) is amended by striking ``25 
percent'' and inserting ``30 percent''.
    (b) Debt Forgiveness.--Section 343(a)(12)(B) of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 
1991(a)(12)(B)) is amended to read as follows:
                    ``(B) Exceptions.--The term `debt 
                forgiveness' does not include--
                            ``(i) consolidation, rescheduling, 
                        reamortization, or deferral of a loan; 
                        or
                            ``(ii) any write-down provided as 
                        part of a resolution of a 
                        discrimination complaint against the 
                        Secretary.''.

SEC. 5311. LOAN AUTHORIZATION LEVELS.

    Section 346(b)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1994(b)(1)) is amended to read as 
follows:
            ``(1) In general.--The Secretary may make or 
        guarantee loans under subtitles A and B from the 
        Agricultural Credit Insurance Fund provided for in 
        section 309 for not more than $3,796,000,000 for each 
        of fiscal years 2003 through 2007, of which, for each 
        fiscal year--
                    ``(A) $770,000,000 shall be for direct 
                loans, of which--
                            ``(i) $205,000,000 shall be for 
                        farm ownership loans under subtitle A; 
                        and
                            ``(ii) $565,000,000 shall be for 
                        operating loans under subtitle B; and
                    ``(B) $3,026,000,000 shall be for 
                guaranteed loans, of which--
                            ``(i) $1,000,000,000 shall be for 
                        guarantees of farm ownership loans 
                        under subtitle A; and
                            ``(ii) $2,026,000,000 shall be for 
                        guarantees of operating loans under 
                        subtitle B.''.

SEC. 5312. RESERVATION OF FUNDS FOR DIRECT OPERATING LOANS FOR 
                    BEGINNING FARMERS AND RANCHERS.

    Section 346(b)(2)(A)(ii)(III) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1994(b)(2)(A)(ii)(III)) is 
amended by striking ``2000 through 2002'' and inserting ``2003 
through 2007''.

SEC. 5313. INTEREST RATE REDUCTION PROGRAM.

    Section 351 of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1999) is amended--
            (1) in subsection (a)--
                    (A) by striking ``Program.--'' and all that 
                follows through ``The Secretary'' and inserting 
                ``Program.--The Secretary''; and
                    (B) by striking paragraph (2); and
            (2) in subsection (e), by striking paragraph (2) 
        and inserting the following:
            ``(2) Maximum amount of funds.--
                    ``(A) In general.--The total amount of 
                funds used by the Secretary to carry out this 
                section for a fiscal year shall not exceed 
                $750,000,000.
                    ``(B) Beginning farmers and ranchers.--
                            ``(i) In general.--The Secretary 
                        shall reserve not less than 15 percent 
                        of the funds used by the Secretary 
                        under subparagraph (A) to make payments 
                        for guaranteed loans made to beginning 
                        farmers and ranchers.
                            ``(ii) Duration of reservation of 
                        funds.--Funds reserved for beginning 
                        farmers or ranchers under clause (i) 
                        for a fiscal year shall be reserved 
                        only until March 1 of the fiscal 
                        year.''.

SEC. 5314. REAMORTIZATION OF RECAPTURE PAYMENTS.

    Section 353(e)(7) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2001(e)(7)) is amended by adding at 
the end the following:
                    ``(D) Reamortization.--
                            ``(i) In general.--The Secretary 
                        may modify the amortization of a 
                        recapture payment referred to in 
                        subparagraph (A) of this paragraph on 
                        which a payment has become delinquent 
                        by using loan service tools under 
                        section 343(b)(3) if--
                                    ``(I) the default is due to 
                                circumstances beyond the 
                                control of the borrower; and
                                    ``(II) the borrower acted 
                                in good faith (as determined by 
                                the Secretary) in attempting to 
                                repay the recapture amount.
                            ``(ii) Limitations.--
                                    ``(I) Term of 
                                reamortization.--The term of a 
                                reamortization under this 
                                subparagraph may not exceed 25 
                                years from the date of the 
                                original amortization 
                                agreement.
                                    ``(II) No reduction or 
                                principal or unpaid interest 
                                due.--A reamortization of a 
                                recapture payment under this 
                                subparagraph may not provide 
                                for reducing the outstanding 
                                principal or unpaid interest 
                                due on the recapture payment.

SEC. 5315. ALLOCATION OF CERTAIN FUNDS FOR SOCIALLY DISADVANTAGED 
                    FARMERS AND RANCHERS.

    The last sentence of section 355(c)(2) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 2003(c)(2)) is amended 
to read as follows: ``Any funds reserved and allocated under 
this paragraph but not used within a State shall, to the extent 
necessary to satisfy pending applications under this title, be 
available for use by socially disadvantaged farmers and 
ranchers in other States, as determined by the Secretary, and 
any remaining funds shall be reallocated within the State.''.

SEC. 5316. WAIVER OF BORROWER TRAINING CERTIFICATION REQUIREMENT.

    Section 359 of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 2006a) is amended by striking subsection (f) and 
inserting the following:
    ``(f) Waivers.--
            ``(1) In general.--The Secretary may waive the 
        requirements of this section for an individual borrower 
        if the Secretary determines that the borrower 
        demonstrates adequate knowledge in areas described in 
        this section.
            ``(2) Criteria.--The Secretary shall establish 
        criteria providing for the application of paragraph (1) 
        consistently in all counties nationwide.''.

SEC. 5317. TIMING OF LOAN ASSESSMENTS.

    Section 360(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2006b(a)) is amended by striking 
``After an applicant is determined eligible for assistance 
under this title by the appropriate county committee 
established pursuant to section 332, the'' and inserting 
``The''.

SEC. 5318. ANNUAL REVIEW OF BORROWERS.

    Section 360(d)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2006b(d)(1)) is amended by striking 
``biannual'' and inserting ``annual''.

SEC. 5319. LOAN ELIGIBILITY FOR BORROWERS WITH PRIOR DEBT FORGIVENESS.

    Section 373(b)(2)(A) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2008h(b)(2)(A)) is amended--
            (1) in clause (i), by striking ``or'';
            (2) in clause (ii), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                            ``(iii) received debt forgiveness 
                        on not more than 1 occasion resulting 
                        directly and primarily from a major 
                        disaster or emergency designated by the 
                        President on or after April 4, 1996, 
                        under the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 
                        U.S.C. 5121 et seq.).''.

SEC. 5320. MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, COUNTY, 
                    OR AREA COMMITTEES.

    Subtitle D of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981-2008j) is amended by adding at the end the 
following:

``SEC. 376. MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, 
                    COUNTY, OR AREA COMMITTEES.

    ``The Secretary shall use personnel of a State, county or 
area committee established under section 8(b)(5) of the Soil 
Conservation and Domestic Allotment Act (16 U.S.C 590h(b)(5)) 
to make and service loans under this title to the extent the 
personnel have been trained to do so.''.

SEC. 5321. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA COMMITTEE 
                    FOR LOANS AND LOAN GUARANTEES.

    Subtitle D of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981-2008j) is further amended by adding at the 
end the following:

``SEC. 377. ELIGIBILITY OF EMPLOYEES OF STATE, COUNTY, OR AREA 
                    COMMITTEE FOR LOANS AND LOAN GUARANTEES.

    ``(a) In General.--The Secretary shall not prohibit an 
employee of a State, county or area committee established under 
section 8(b)(5) of the Soil Conservation and Domestic Allotment 
Act (16 U.S.C. 590h(b)(5)) or an employee of the Department of 
Agriculture from obtaining a loan or loan guarantee under 
subtitle A, B or C of this title.
    ``(b) Approvals.--
            ``(1) County or area office.--In the case of a loan 
        application from an employee in a county or area 
        office, the Farm Service Agency State office shall be 
        responsible for reviewing and approving the 
        application.
            ``(2) State office.--In the case of a loan 
        application from an employee of a State office, the 
        Farm Service Agency national office shall be 
        responsible for reviewing and approving the 
        application.''.

                        Subtitle E--Farm Credit

SEC. 5401. REPEAL OF BURDENSOME APPROVAL REQUIREMENTS.

    (a) Banks for Cooperatives.--Section 3.1(11)(B) of the Farm 
Credit Act of 1971 (12 U.S.C. 2122(11)(B)) is amended--
            (1) by striking clause (iii); and
            (2) by redesignating clause (iv) as clause (iii).
    (b) Other System Banks; Associations.--Section 4.18A of the 
Farm Credit Act of 1971 (12 U.S.C. 2206a) is amended--
            (1) in subsection (a)(1), by striking 
        ``3.1(11)(B)(iv)'' and inserting ``3.1(11)(B)(iii)''; 
        and
            (2) by striking subsection (c).

SEC. 5402. BANKS FOR COOPERATIVES.

    Section 3.7(b) of the Farm Credit Act of 1971 (12 U.S.C. 
2128(b)) is amended--
            (1) in paragraphs (1) and (2)(A)(i), by striking 
        ``farm supplies'' each place it appears and inserting 
        ``agricultural supplies''; and
            (2) by adding at the end the following:
            ``(4) Definition of agricultural supply.--In this 
        subsection, the term `agricultural supply' includes--
                    ``(A) a farm supply; and
                    ``(B)(i) agriculture-related processing 
                equipment;
                    ``(ii) agriculture-related machinery; and
                    ``(iii) other capital goods related to the 
                storage or handling of agricultural commodities 
                or products.''.

SEC. 5403. INSURANCE CORPORATION PREMIUMS.

    (a) Reduction in Premiums for GSE-Guaranteed Loans.--
            (1) In general.--Section 5.55 of the Farm Credit 
        Act of 1971 (12 U.S.C. 2277a-4) is amended--
                    (A) in subsection (a)--
                            (i) in paragraph (1)--
                                    (I) in subparagraph (A), by 
                                striking ``government-
                                guaranteed loans provided for 
                                in subparagraph (C)'' and 
                                inserting ``loans provided for 
                                in subparagraphs (C) and (D)'';
                                    (II) in subparagraph (B), 
                                by striking ``and'' at the end;
                                    (III) in subparagraph (C), 
                                by striking the period at the 
                                end and inserting ``; and''; 
                                and
                                    (IV) by adding at the end 
                                the following:
                    ``(D) the annual average principal 
                outstanding for such year on the guaranteed 
                portions of Government Sponsored Enterprise-
                guaranteed loans made by the bank that are in 
                accrual status, multiplied by a factor, not to 
                exceed 0.0015, determined by the Corporation at 
                the sole discretion of the Corporation.''; and
                            (ii) by adding at the end the 
                        following:
            ``(4) Definition of government sponsored 
        enterprise-guaranteed loan.--In this section and 
        sections 1.12(b) and 5.56(a), the term `Government 
        Sponsored Enterprise-guaranteed loan' means a loan or 
        credit, or portion of a loan or credit, that is 
        guaranteed by an entity that is chartered by Congress 
        to serve a public purpose and the debt obligations of 
        which are not explicitly guaranteed by the United 
        States, including the Federal National Mortgage 
        Association, the Federal Home Loan Mortgage 
        Corporation, the Federal Home Loan Bank System, and the 
        Federal Agricultural Mortgage Corporation, but not 
        including any other institution of the Farm Credit 
        System.''; and
                    (B) in subsection (e)(4)(B), by striking 
                ``government-guaranteed loans described in 
                subsection (a)(1)(C)'' and inserting ``loans 
                described in subparagraph (C) or (D) of 
                subsection (a)(1)''.
            (2) Conforming amendments.--
                    (A) Section 1.12(b) of the Farm Credit Act 
                of 1971 (12 U.S.C. 2020(b)) is amended--
                            (i) in paragraph (1), by inserting 
                        ``and Government Sponsored Enterprise-
                        guaranteed loans (as defined in section 
                        5.55(a)(4)) provided for in paragraph 
                        (4)'' after ``government-guaranteed 
                        loans (as defined in section 
                        5.55(a)(3)) provided for in paragraph 
                        (3)'';
                            (ii) in paragraph (2), by striking 
                        ``and'' at the end;
                            (iii) in paragraph (3), by striking 
                        the period at the end and inserting ``; 
                        and''; and
                            (iv) by adding at the end the 
                        following:
            ``(4) the annual average principal outstanding for 
        such year on the guaranteed portions of Government 
        Sponsored Enterprise-guaranteed loans (as so defined) 
        made by the association, or by the other financing 
        institution and funded by or discounted with the Farm 
        Credit Bank, that are in accrual status, multiplied by 
        a factor, not to exceed 0.0015, determined by the 
        Corporation for the purpose of setting the premium for 
        such guaranteed portions of loans under section 
        5.55(a)(1)(D).''.
                    (B) Section 5.56(a) of the Farm Credit Act 
                of 1971 (12 U.S.C. 2277a-5(a)) is amended--
                            (i) in paragraph (1), by inserting 
                        ``and Government Sponsored Enterprise-
                        guaranteed loans (as defined in section 
                        5.55(a)(4))'' after ``government-
                        guaranteed loans'';
                            (ii) by redesignating paragraphs 
                        (4) and (5) as paragraphs (5) and (6), 
                        respectively; and
                            (iii) by inserting after paragraph 
                        (3) the following:
            ``(4) the annual average principal outstanding on 
        the guaranteed portions of Government Sponsored 
        Enterprise-guaranteed loans (as defined in section 
        5.55(a)(4)) that are in accrual status;''.
    (b) Applicability.--The amendments made by this section 
shall apply with respect to determinations of premiums for 
calendar year 2002 and for any succeeding calendar year, and to 
certified statements with respect to such premiums.

                     Subtitle F--General Provisions

SEC. 5501. TECHNICAL AMENDMENTS.

    (a) Section 321(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1961(a)) is amended by striking 
``Disaster Relief and Emergency Assistance Act'' each place it 
appears and inserting ``Robert T. Stafford Disaster Relief and 
Emergency Assistance Act (42 U.S.C. 5121 et seq.)''.
    (b) Section 336(b) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1986(b)) is amended in the second 
sentence by striking ``provided for in section 332 of this 
title''.
    (c) Section 359(c)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 2006a(c)(1)) is amended by striking 
``established pursuant to section 332,''.

                      TITLE VI--RURAL DEVELOPMENT

        Subtitle A--Consolidated Farm and Rural Development Act

SEC. 6001. ELIGIBILITY OF RURAL EMPOWERMENT ZONES AND RURAL ENTERPRISE 
                    COMMUNITIES FOR DIRECT AND GUARANTEED LOANS FOR 
                    ESSENTIAL COMMUNITY FACILITIES.

    Section 306(a)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(1)) is amended by inserting 
after the first sentence the following: ``The Secretary may 
also make or insure loans to communities that have been 
designated as rural empowerment zones or rural enterprise 
communities pursuant to part I of subchapter U of chapter 1 of 
the Internal Revenue Code of 1986, or as rural enterprise 
communities pursuant to section 766 of the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 1999 (Public Law 105-277; 112 Stat. 2681, 
2681-37), to provide for the installation or improvement of 
essential community facilities including necessary related 
equipment, and to furnish financial assistance or other aid in 
planning projects for such purposes.''.

SEC. 6002. WATER OR WASTE DISPOSAL GRANTS.

    Section 306(a)(2) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(2)) is amended--
            (1) by striking ``(2) The'' and inserting the 
        following:
            ``(2) Water, waste disposal, and wastewater 
        facility grants.--
                    ``(A) Authority.--
                            ``(i) In general.--The'';
            (2) by striking ``aggregating not to exceed 
        $590,000,000 in any fiscal year'';
            (3) by striking ``The amount'' and inserting the 
        following:
                            ``(ii) Amount.--The amount'';
            (4) by striking ``paragraph'' and inserting 
        ``subparagraph'';
            (5) by striking ``The Secretary shall'' and 
        inserting the following:
                            ``(iii) Grant rate.--The Secretary 
                        shall''; and
            (6) by adding at the end the following:
                    ``(B) Revolving funds for financing water 
                and wastewater projects.--
                            ``(i) In general.--The Secretary 
                        may make grants to qualified private, 
                        nonprofit entities to capitalize 
                        revolving funds for the purpose of 
                        providing financing to eligible 
                        entities for--
                                    ``(I) predevelopment costs 
                                associated with proposed water 
                                and wastewater projects or with 
                                existing water and wastewater 
                                systems; and
                                    ``(II) short-term costs 
                                incurred for replacement 
                                equipment, small-scale 
                                extension services, or other 
                                small capital projects that are 
                                not part of the regular 
                                operations and maintenance 
                                activities of existing water 
                                and wastewater systems.
                            ``(ii) Eligible entities.--To be 
                        eligible to obtain financing from a 
                        revolving fund under clause (i), an 
                        eligible entity must be eligible to 
                        obtain a loan, loan guarantee, or grant 
                        under paragraph (1) or this paragraph.
                            ``(iii) Maximum amount of 
                        financing.--The amount of financing 
                        made to an eligible entity under this 
                        subparagraph shall not exceed--
                                    ``(I) $100,000 for costs 
                                described in clause (i)(I); and
                                    ``(II) $100,000 for costs 
                                described in clause (i)(II).
                            ``(iv) Term.--The term of financing 
                        provided to an eligible entity under 
                        this subparagraph shall not exceed 10 
                        years.
                            ``(v) Administration.--The 
                        Secretary shall limit the amount of 
                        grant funds that may be used by a grant 
                        recipient for administrative costs 
                        incurred under this subparagraph.
                            ``(vi) Annual report.--A nonprofit 
                        entity receiving a grant under this 
                        subparagraph shall submit to the 
                        Secretary an annual report that 
                        describes the number and size of 
                        communities served and the type of 
                        financing provided.
                            ``(vii) Authorization of 
                        appropriations.--There are authorized 
                        to be appropriated to carry out this 
                        subparagraph $30,000,000 for each of 
                        fiscal years 2002 through 2007.''.

SEC. 6003. RURAL BUSINESS OPPORTUNITY GRANTS.

    Section 306(a)(11)(D) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)(11)(D)) is amended--
            (1) by striking ``$7,500,000'' and inserting 
        ``$15,000,000''; and
            (2) by striking ``2002'' and inserting ``2007''.

SEC. 6004. CHILD DAY CARE FACILITIES.

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

SEC. 6005. RURAL WATER AND WASTEWATER CIRCUIT RIDER PROGRAM.

    Section 306(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)) is amended by adding at the 
end the following:
            ``(22) Rural water and wastewater circuit rider 
        program.--
                    ``(A) In general.--The Secretary shall 
                establish a national rural water and wastewater 
                circuit rider program that is based on the 
                rural water circuit rider program of the 
                National Rural Water Association that (as of 
                the date of enactment of this paragraph) 
                receives funding from the Secretary, acting 
                through the Rural Utilities Service.
                    ``(B) Relationship to existing program.--
                The program established under subparagraph (A) 
                shall not affect the authority of the Secretary 
                to carry out the circuit rider program for 
                which funds are made available under the 
                heading ``rural community advancement program'' 
                in title III of the Agriculture, Rural 
                Development, Food and Drug Administration, and 
                Related Agencies Appropriations Act, 2002 (115 
                Stat. 719).
                    ``(C) Authorization of appropriations.--
                There is authorized to be appropriated to carry 
                out this paragraph $15,000,000 for fiscal year 
                2003 and each fiscal year thereafter.''.

SEC. 6006. MULTIJURISDICTIONAL REGIONAL PLANNING ORGANIZATIONS.

    Section 306(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)) (as amended by section 6005) 
is amended by adding at the end the following:
            ``(23) Multijurisdictional regional planning 
        organizations.--
                    ``(A) Grants.--The Secretary shall provide 
                grants to multijurisdictional regional planning 
                and development organizations to pay the 
                Federal share of the cost of providing 
                assistance to local governments to improve the 
                infrastructure, services, and business 
                development capabilities of local governments 
                and local economic development organizations.
                    ``(B) Priority.--In determining which 
                organizations will receive a grant under this 
                paragraph, the Secretary shall give priority to 
                an organization that--
                            ``(i) serves a rural area that, 
                        during the most recent 5-year period--
                                    ``(I) had a net out-
                                migration of inhabitants, or 
                                other population loss, from the 
                                rural area that equals or 
                                exceeds 5 percent of the 
                                population of the rural area; 
                                or
                                    ``(II) had a median 
                                household income that is less 
                                than the nonmetropolitan median 
                                household income of the 
                                applicable State; and
                            ``(ii) has a history of providing 
                        substantive assistance to local 
                        governments and economic development 
                        organizations.
                    ``(C) Federal share.--A grant provided 
                under this paragraph shall be for not more than 
                75 percent of the cost of providing assistance 
                described in subparagraph (A).
                    ``(D) Maximum amount of grants.--The amount 
                of a grant provided to an organization under 
                this paragraph shall not exceed $100,000.
                    ``(E) Authorization of appropriations.--
                There is authorized to be appropriated to carry 
                out this paragraph $30,000,000 for each of 
                fiscal years 2003 through 2007.''.

SEC. 6007. LOAN GUARANTEES FOR CERTAIN RURAL DEVELOPMENT LOANS.

    (a) Loan Guarantees for Water, Wastewater, and Essential 
Community Facilities Loans.--Section 306(a) of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1925(a)) (as amended 
by section 6006) is amended by adding at the end the following:
            ``(24) Loan guarantees for water, wastewater, and 
        essential community facilities loans.--
                    ``(A) In general.--The Secretary may 
                guarantee a loan made to finance a community 
                facility or water or waste facility project in 
                a rural area, including a loan financed by the 
                net proceeds of a bond described in section 
                142(a) of the Internal Revenue Code of 1986.
                    ``(B) Requirements.--To be eligible for a 
                loan guarantee under subparagraph (A), an 
                individual or entity offering to purchase the 
                loan shall demonstrate to the Secretary that 
                the person has--
                            ``(i) the capabilities and 
                        resources necessary to service the loan 
                        in a manner that ensures the continued 
                        performance of the loan, as determined 
                        by the Secretary; and
                            ``(ii) the ability to generate 
                        capital to provide borrowers of the 
                        loan with the additional credit 
                        necessary to properly service the 
                        loan.''.
    (b) Loan Guarantees for Certain Loans.--Section 310B of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is 
amended by adding at the end the following:
    ``(h) Loan Guarantees for Certain Loans.--The Secretary may 
guarantee loans made under subsection (a) to finance the 
issuance of bonds for the projects described in section 
306(a)(24).''.

SEC. 6008. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL COMMUNITY 
                    FACILITIES.

    Section 306(a) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926(a)) (as amended by section 
6007(a)) is amended by adding at the end the following:
            ``(25) Tribal college and university essential 
        community facilities.--
                    ``(A) In general.--The Secretary may make 
                grants to tribal colleges and universities (as 
                defined in section 316 of the Higher Education 
                Act of 1965 (20 U.S.C. 1059c)) to provide the 
                Federal share of the cost of developing 
                specific tribal college or university essential 
                community facilities in rural areas.
                    ``(B) Federal share.--
                            ``(i) In general.--Except as 
                        provided in clauses (ii) and (iii), the 
                        Secretary shall, by regulation, 
                        establish the maximum percentage of the 
                        cost of the facility that may be 
                        covered by a grant under this 
                        paragraph.
                            ``(ii) Maximum amount.--The amount 
                        of a grant provided under this 
                        paragraph for a facility shall not 
                        exceed 75 percent of the cost of 
                        developing the facility.
                            ``(iii) Graduated scale.--The 
                        Secretary shall provide for a graduated 
                        scale of the percentages of the cost 
                        covered by a grant made under this 
                        paragraph that provides higher 
                        percentages for facilities in 
                        communities that have lower community 
                        population and income levels, as 
                        determined by the Secretary.
                    ``(C) Authorization of appropriations.--
                There is authorized to be appropriated to carry 
                out this paragraph $10,000,000 for each of 
                fiscal years 2003 through 2007.''.

SEC. 6009. EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANT 
                    PROGRAM.

    Section 306A of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1926a) is amended--
            (1) in the section heading, by inserting ``and 
        imminent'' after ``emergency'';
            (2) in subsection (a)--
                    (A) in paragraph (1), by inserting ``, or 
                when such a decline is imminent'' before the 
                semicolon at the end; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (A), by 
                        striking ``acute'' and inserting 
                        ``acute, or imminent,''; and
                            (ii) in subparagraph (B), by 
                        striking ``decline'' and inserting 
                        ``decline, or imminent decline,'';
            (3) in subsection (c)(2), by striking ``occurred'' 
        and inserting ``occurred, or will occur,'';
            (4) in subsection (d), by striking paragraph (1) 
        and inserting the following:
            ``(1) In general.--Grants made under this section 
        may be used--
                    ``(A) for waterline extensions from 
                existing systems, laying of new waterlines, 
                repairs, significant maintenance, digging of 
                new wells, equipment replacement, and hook and 
                tap fees;
                    ``(B) for any other appropriate purpose 
                associated with developing sources of, 
                treating, storing, or distributing water;
                    ``(C) to assist communities in complying 
                with the requirements of the Federal Water 
                Pollution Control Act (33 U.S.C. 1251 et seq.) 
                or the Safe Drinking Water Act (42 U.S.C. 300f 
                et seq.); and
                    ``(D) to provide potable water to 
                communities through other means.'';
            (5) in subsection (f)(2), by striking ``$75,000'' 
        and inserting ``$150,000'';
            (6) in subsection (h)--
                    (A) in the second sentence of paragraph 
                (1), by striking ``decline'' and inserting 
                ``decline, or imminent decline,''; and
                    (B) by striking paragraph (2) and inserting 
                the following:
            ``(2) Timing of review of applications.--
                    ``(A) Simplified application.--The 
                application process developed by the Secretary 
                under paragraph (1) shall include a simplified 
                application form that will permit expedited 
                consideration of an application for a grant 
                filed under this section.
                    ``(B) Priority review.--In processing 
                applications for any water or waste grant or 
                loan authorized under this title, the Secretary 
                shall afford priority processing to an 
                application for a grant under this section to 
                the extent funds will be available for an award 
                on the application at the conclusion of 
                priority processing.
                    ``(C) Timing.--The Secretary shall, to the 
                maximum extent practicable, review and act on 
                an application under this section within 60 
                days after the date on which the application is 
                submitted to the Secretary.''; and
            (7) by striking subsection (i) and inserting the 
        following:
    ``(i) Funding.--
            ``(1) Reservation.--
                    ``(A) In general.--For each fiscal year, 
                not less than 3 nor more than 5 percent of the 
                total amount made available to carry out 
                section 306(a)(2) for the fiscal year shall be 
                reserved for grants under this section.
                    ``(B) Release.--Funds reserved under 
                subparagraph (A) for a fiscal year shall be 
                reserved only until July 1 of the fiscal year.
            ``(2) Authorization of appropriations.--In addition 
        to funds made available under paragraph (1), there is 
        authorized to be appropriated to carry out this section 
        $35,000,000 for each of fiscal years 2003 through 
        2007.''.

SEC. 6010. WATER AND WASTE FACILITY GRANTS FOR NATIVE AMERICAN TRIBES.

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

SEC. 6011. GRANTS FOR WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN 
                    ALASKA.

    Section 306D(d)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926d(d)(1)) is amended by striking 
``and 2002'' and inserting ``through 2007''.

SEC. 6012. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE 
                    CONSTRUCTION, REFURBISHING, AND SERVICING OF 
                    INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN 
                    RURAL AREAS FOR INDIVIDUALS WITH LOW OR MODERATE 
                    INCOMES.

    (a) In General.--The Consolidated Farm and Rural 
Development Act is amended by inserting after section 306D (7 
U.S.C. 1926d) the following:

``SEC. 306E. GRANTS TO NONPROFIT ORGANIZATIONS TO FINANCE THE 
                    CONSTRUCTION, REFURBISHING, AND SERVICING OF 
                    INDIVIDUALLY-OWNED HOUSEHOLD WATER WELL SYSTEMS IN 
                    RURAL AREAS FOR INDIVIDUALS WITH LOW OR MODERATE 
                    INCOMES.

    ``(a) Definition of Eligible Individual.--In this section, 
the term `eligible individual' means an individual who is a 
member of a household the members of which have a combined 
income (for the most recent 12-month period for which the 
information is available) that is not more than 100 percent of 
the median nonmetropolitan household income for the State or 
territory in which the individual resides, according to the 
most recent decennial census of the United States.
    ``(b) Grants.--
            ``(1) In general.--The Secretary may make grants to 
        private nonprofit organizations for the purpose of 
        providing loans to eligible individuals for the 
        construction, refurbishing, and servicing of individual 
        household water well systems in rural areas that are or 
        will be owned by the eligible individuals.
            ``(2) Terms of loans.--A loan made with grant funds 
        under this section--
                    ``(A) shall have an interest rate of 1 
                percent;
                    ``(B) shall have a term not to exceed 20 
                years; and
                    ``(C) shall not exceed $8,000 for each 
                water well system described in paragraph (1).
            ``(3) Administrative expenses.--A recipient of a 
        grant made under this section may use grant funds to 
        pay administrative expenses associated with providing 
        the assistance described in paragraph (1), as 
        determined by the Secretary.
    ``(c) Priority in Awarding Grants.--In awarding grants 
under this section, the Secretary shall give priority to an 
applicant that has substantial expertise and experience in 
promoting the safe and productive use of individually-owned 
household water well systems and ground water.
    ``(d) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section $10,000,000 for 
each of fiscal years 2003 through 2007.''.
    (b) Effective Date.--The amendment made by subsection (a) 
takes effect on October 1, 2002.

SEC. 6013. LOANS AND LOAN GUARANTEES FOR RENEWABLE ENERGY SYSTEMS.

    Section 310B(a)(3) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1932(a)(3)) is amended by inserting 
``and other renewable energy systems (including wind energy 
systems and anaerobic digestors for the purpose of energy 
generation)'' after ``solar energy systems''.

SEC. 6014. RURAL BUSINESS ENTERPRISE GRANTS.

    Section 310B(c)(1) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1932(c)(1)) is amended--
            (1) by striking ``(1) In General.--The Secretary'' 
        and inserting the following:
            ``(1) Grants.--
                    ``(A) In general.--The Secretary''; and
            (2) by adding at the end the following:
                    ``(B) Small and emerging private business 
                enterprises.--
                            ``(i) In general.--For the purpose 
                        of subparagraph (A), a small and 
                        emerging private business enterprise 
                        shall include (regardless of the number 
                        of employees or operating capital of 
                        the enterprise) an eligible nonprofit 
                        entity, or other tax-exempt 
                        organization, with a principal office 
                        in an area that is located--
                                    ``(I) on land of an 
                                existing or former Native 
                                American reservation; and
                                    ``(II) in a city, town, or 
                                unincorporated area that has a 
                                population of not more than 
                                5,000 inhabitants.
                            ``(ii) Use of grant.--An eligible 
                        nonprofit entity, or other tax exempt 
                        organization, described in clause (i) 
                        may use assistance provided under this 
                        paragraph to create, expand, or operate 
                        value-added processing in an area 
                        described in clause (i) in connection 
                        with production agriculture.
                            ``(iii) Priority.--In making grants 
                        under this paragraph, the Secretary 
                        shall give priority to grants that will 
                        be used to provide assistance to 
                        eligible nonprofit entities and other 
                        tax exempt organizations described in 
                        clause (i).''.

SEC. 6015. RURAL COOPERATIVE DEVELOPMENT GRANTS.

    Section 310B(e) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1932(e)) is amended--
            (1) in paragraph (5)(F), before the period at the 
        end the following: ``, except that the Secretary shall 
        not require non-Federal financial support in an amount 
        that is greater than 5 percent in the case of a 1994 
        institution (as defined in section 532 of the Equity in 
        Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 
        note; Public Law 103-382))''; and
            (2) in paragraph (9), by striking ``2002'' and 
        inserting ``2007''.

SEC. 6016. GRANTS TO BROADCASTING SYSTEMS.

    Section 310B(f) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1932(f)) is amended by adding at the 
end the following:
            ``(3) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $5,000,000 for each of fiscal years 2002 
        through 2007.''.

SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

    Section 310B of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1932) is amended by striking subsection (g) and 
inserting the following:
    ``(g) Business and Industry Direct and Guaranteed Loans.--
            ``(1) Definition of business and industry loan.--In 
        this subsection, the term `business and industry loan' 
        means a business and industry direct or guaranteed loan 
        that is made or guaranteed by the Secretary under 
        subsection (a)(1).
            ``(2) Loan guarantees for the purchase of 
        cooperative stock.--
                    ``(A) In general.--The Secretary may 
                guarantee a business and industry loan to 
                individual farmers or ranchers for the purpose 
                of purchasing capital stock of a farmer or 
                rancher cooperative established for the purpose 
                of processing an agricultural commodity.
                    ``(B) Processing contracts during initial 
                period.--A cooperative described in 
                subparagraph (A) for which a farmer or rancher 
                receives a guarantee to purchase stock under 
                subparagraph (A) may contract for services to 
                process agricultural commodities, or otherwise 
                process value-added agricultural products, 
                during the 5-year period beginning on the date 
                of the startup of the cooperative in order to 
                provide adequate time for the planning and 
                construction of the processing facility of the 
                cooperative.
                    ``(C) Financial information.--Financial 
                information required by the Secretary from a 
                farmer or rancher as a condition of making a 
                business and industry loan guarantee under this 
                paragraph shall be provided in the manner 
                generally required by commercial agricultural 
                lenders in the area.
            ``(3) Loans to cooperatives.--
                    ``(A) In general.--The Secretary may make 
                or guarantee a business and industry loan to a 
                cooperative organization that is headquartered 
                in a metropolitan area if the loan is used for 
                a project or venture described in subsection 
                (a) that is located in a rural area or a loan 
                guarantee that meets the requirements of 
                paragraph (6).
                    ``(B) Refinancing.--A cooperative 
                organization that is eligible for a business 
                and industry loan shall be eligible to 
                refinance an existing business and industry 
                loan with a lender if--
                            ``(i) the cooperative 
                        organization--
                                    ``(I) is current and 
                                performing with respect to the 
                                existing loan; and
                                    ``(II) is not, and has not 
                                been, in payment default, or 
                                the collateral of which has not 
                                been converted, with respect to 
                                the existing loan; and
                            ``(ii) there is adequate security 
                        or full collateral for the refinanced 
                        loan.
            ``(4) Loan appraisals.--The Secretary may require 
        that any appraisal made in connection with a business 
        and industry loan be conducted by a specialized 
        appraiser that uses standards that are similar to 
        standards used for similar purposes in the private 
        sector, as determined by the Secretary.
            ``(5) Fees.--The Secretary may assess a 1-time fee 
        for any guaranteed business and industry loan in an 
        amount that does not exceed 2 percent of the guaranteed 
        principal portion of the loan.
            ``(6) Loan guarantees in nonrural areas.--
                    ``(A) In general.--The Secretary may 
                guarantee a business and industry loan to a 
                cooperative organization for a facility that is 
                not located in a rural area if--
                            ``(i) the primary purpose of the 
                        loan guarantee is for a facility to 
                        provide value-added processing for 
                        agricultural producers that are located 
                        within 80 miles of the facility;
                            ``(ii) the applicant demonstrates 
                        to the Secretary that the primary 
                        benefit of the loan guarantee will be 
                        to provide employment for residents of 
                        a rural area; and
                            ``(iii) the total amount of 
                        business and industry loans guaranteed 
                        for a fiscal year under this paragraph 
                        does not exceed 10 percent of the 
                        business and industry loans guaranteed 
                        for the fiscal year under subsection 
                        (a)(1).
                    ``(B) Principal amounts.--The principal 
                amount of a business and industry loan 
                guaranteed under this paragraph may not exceed 
                $25,000,000.
            ``(7) Intangible assets.--In determining whether a 
        cooperative organization is eligible for a guaranteed 
        business and industry loan, the Secretary may consider 
        the market value of a properly appraised brand name, 
        patent, or trademark of the cooperative.
            ``(8) Limitations on loan guarantees for 
        cooperative organizations.--
                    ``(A) Principal amount.--
                            ``(i) In general.--Subject to 
                        clause (ii), the principal amount of a 
                        business and industry loan made to a 
                        cooperative organization and guaranteed 
                        under this subsection shall not exceed 
                        $40,000,000.
                            ``(ii) Use.--To be eligible for a 
                        guarantee under this subsection for a 
                        business and industry loan made to a 
                        cooperative organization, the principal 
                        amount of the any such loan in excess 
                        of $25,000,000 shall be used to carry 
                        out a project--
                                    ``(I) in a rural area; and
                                    ``(II) that provides for 
                                the value-added processing of 
                                agricultural commodities.
                    ``(B) Applications.--If a cooperative 
                organization submits an application for a 
                guarantee under this subsection of a business 
                and industry loan with a principal amount that 
                is in excess of $25,000,000, the Secretary--
                            ``(i) shall review and, if 
                        appropriate, approve the application; 
                        and
                            ``(ii) may not delegate the 
                        approval authority.
                    ``(C) Maximum amount.--The total amount of 
                business and industry loans made to cooperative 
                organizations and guaranteed for a fiscal year 
                under this subsection with principal amounts 
                that are in excess of $25,000,000 may not 
                exceed 10 percent of the business and industry 
                loans guaranteed for the fiscal year under 
                subsection (a)(1).''.

SEC. 6018. USE OF RURAL DEVELOPMENT LOANS AND GRANTS FOR OTHER 
                    PURPOSES.

    Subtitle A of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1921 et seq.) (as amended by section 5006) is 
amended by adding at the end the following:

``SEC. 310G. 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. 6019. SIMPLIFIED APPLICATION FORMS FOR LOAN GUARANTEES.

    Section 333A of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1983a) (as amended by section 5307) is amended by 
striking subsection (g) and inserting the following:
    ``(g) Simplified Application Forms for Loan Guarantees.--
            ``(1) In general.--The Secretary shall provide to 
        lenders a short, simplified application form for 
        guarantees under this title of--
                    ``(A) farmer program loans the principal 
                amount of which is $125,000 or less; and
                    ``(B) business and industry guaranteed 
                loans under section 310B(a)(1) the principal 
                amount of which is--
                            ``(i) in the case of a loan 
                        guarantee made during fiscal year 2002 
                        or 2003, $400,000 or less; and
                            ``(ii) in the case of a loan 
                        guarantee made during any subsequent 
                        fiscal year--
                                    ``(I) $400,000 or less; or
                                    ``(II) if the Secretary 
                                determines that there is not a 
                                significant increased risk of a 
                                default on the loan, $600,000 
                                or less.
            ``(2) Water and waste disposal grants and loans.--
        The Secretary shall develop an application process that 
        accelerates, to the maximum extent practicable, the 
        processing of applications for water and waste disposal 
        grants or direct or guaranteed loans under paragraph 
        (1) or (2) of section 306(a) the grant award amount or 
        principal loan amount, respectively, of which is 
        $300,000 or less.
            ``(3) Administration.--In developing an application 
        under this subsection, the Secretary shall--
                    ``(A) consult with commercial and 
                cooperative lenders; and
                    ``(B) ensure that--
                            ``(i) the form can be completed 
                        manually or electronically, at the 
                        option of the lender;
                            ``(ii) the form minimizes the 
                        documentation required to accompany the 
                        form;
                            ``(iii) the cost of completing and 
                        processing the form is minimal; and
                            ``(iv) the form can be completed 
                        and processed in an expeditious 
                        manner.''.

SEC. 6020. DEFINITION OF RURAL AND RURAL AREA.

    (a) In General.--Section 343(a) of the Consolidated Farm 
and Rural Development Act (7 U.S.C. 1991(a)) is amended by 
adding at the end the following:
            ``(13) Rural and rural area.--
                    ``(A) In general.--Except as otherwise 
                provided in this paragraph, the terms `rural' 
                and `rural area' mean any area other than--
                            ``(i) a city or town that has a 
                        population of greater than 50,000 
                        inhabitants; and
                            ``(ii) the urbanized area 
                        contiguous and adjacent to such a city 
                        or town.
                    ``(B) Water and waste disposal grants and 
                direct and guaranteed loans.--For the purpose 
                of water and waste disposal grants and direct 
                and guaranteed loans provided under paragraphs 
                (1), (2), and (24) of section 306(a), the terms 
                `rural' and `rural area' mean a city, town, or 
                unincorporated area that has a population of no 
                more than 10,000 inhabitants.
                    ``(C) Community facility loans and 
                grants.--For the purpose of community facility 
                direct and guaranteed loans and grants under 
                paragraphs (1), (19), (20), (21), and (24) of 
                section 306(a), the terms `rural' and `rural 
                area' mean a city, town, or unincorporated area 
                that has a population of not more than 20,000 
                inhabitants.
                    ``(D) Multijurisdictional regional planning 
                organizations; national rural development 
                partnership.--In sections 306(a)(23) and 378, 
                the term `rural area' means--
                            ``(i) all the territory of a State 
                        that is not within the boundary of any 
                        standard metropolitan statistical area; 
                        and
                            ``(ii) all territory within any 
                        standard metropolitan statistical area 
                        within a census tract having a 
                        population density of less than 20 
                        persons per square mile, as determined 
                        by the Secretary according to the most 
                        recent census of the United States as 
                        of any date.
                    ``(E) Rural business investment program.--
                In subtitle H, the term `rural area' means an 
                area that is located--
                            ``(i) outside a standard 
                        metropolitan statistical area; or
                            ``(ii) within a community that has 
                        a population of 50,000 inhabitants or 
                        less.''.
    (b) Conforming Amendments.--
            (1) Section 306(a) of the Consolidated Farm and 
        Rural Development Act (7 U.S.C. 1926(a)) is amended by 
        striking paragraph (7).
            (2) Section 381A of the Consolidated Farm and Rural 
        Development Act (7 U.S.C. 2009) is amended--
                    (A) by striking paragraph (1); and
                    (B) by redesignating paragraphs (2) and (3) 
                as paragraphs (1) and (2), respectively.
            (3) Section 735 of the Agriculture, Rural 
        Development, Food and Drug Administration, and Related 
        Agencies Appropriations Act, 1999 (112 Stat. 2681-29) 
        is repealed.

SEC. 6021. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    Subtitle D of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981 et seq.) (as amended by section 5321) is 
amended by adding at the end the following:

``SEC. 378. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.

    ``(a) Definitions.--In this section:
            ``(1) Agency with rural responsibilities.--The term 
        `agency with rural responsibilities' means any 
        executive agency (as defined in section 105 of title 5, 
        United States Code) that implements a Federal law, or 
        administers a program, targeted at or having a 
        significant impact on rural areas.
            ``(2) Coordinating committee.--The term 
        `Coordinating Committee' means the National Rural 
        Development Coordinating Committee established by 
        subsection (c).
            ``(3) Partnership.--The term `Partnership' means 
        the National Rural Development Partnership continued by 
        subsection (b).
            ``(4) State rural development council.--The term 
        `State rural development council' means a State rural 
        development council that meets the requirements of 
        subsection (d).
    ``(b) Partnership.--
            ``(1) In general.--The Secretary shall continue the 
        National Rural Development Partnership composed of--
                    ``(A) the Coordinating Committee; and
                    ``(B) State rural development councils.
            ``(2) Purposes.--The purposes of the Partnership 
        are to empower and build the capacity of States and 
        rural communities to design flexible and innovative 
        responses to their own special rural development needs, 
        with local determinations of progress and selection of 
        projects and activities.
            ``(3) Governing panel.--
                    ``(A) In general.--A panel consisting of 
                representatives of the Coordinating Committee 
                and State rural development councils shall be 
                established to lead and coordinate the 
                strategic operation, policies, and practices of 
                the Partnership.
                    ``(B) Annual reports.--In conjunction with 
                the Coordinating Committee and State rural 
                development councils, the panel shall prepare 
                and submit to Congress an annual report on the 
                activities of the Partnership.
            ``(4) Role of federal government.--The role of the 
        Federal Government in the Partnership may be that of a 
        partner and facilitator, with Federal agencies 
        authorized--
                    ``(A) to cooperate with States to implement 
                the Partnership;
                    ``(B) to provide States with the technical 
                and administrative support necessary to plan 
                and implement tailored rural development 
                strategies to meet local needs;
                    ``(C) to ensure that the head of each 
                agency with rural responsibilities designates a 
                senior-level agency official to represent the 
                agency on the Coordinating Committee and 
                directs appropriate field staff to participate 
                fully with the State rural development council 
                within the jurisdiction of the field staff; and
                    ``(D) to enter into cooperative agreements 
                with, and to provide grants and other 
                assistance to, the Coordinating Committee and 
                State rural development councils.
    ``(c) National Rural Development Coordinating Committee.--
            ``(1) Establishment.--The Secretary shall establish 
        a National Rural Development Coordinating Committee 
        within the Department of Agriculture.
            ``(2) Composition.--The Coordinating Committee 
        shall be composed of--
                    ``(A) 1 representative of each agency with 
                rural responsibilities; and
                    ``(B) representatives, approved by the 
                Secretary, of--
                            ``(i) national associations of 
                        State, regional, local, and tribal 
                        governments and intergovernmental and 
                        multijurisdictional agencies and 
                        organizations;
                            ``(ii) national public interest 
                        groups;
                            ``(iii) other national nonprofit 
                        organizations that elect to participate 
                        in the activities of the Coordinating 
                        Committee; and
                            ``(iv) the private sector.
            ``(3) Duties.--The Coordinating Committee shall--
                    ``(A) support the work of the State rural 
                development councils;
                    ``(B) facilitate coordination of rural 
                development policies, programs, and activities 
                among Federal agencies and with those of State, 
                local, and tribal governments, the private 
                sector, and nonprofit organizations;
                    ``(C) review and comment on policies, 
                regulations, and proposed legislation that 
                affect or would affect rural areas and gather 
                and provide related information;
                    ``(D) develop and facilitate strategies to 
                reduce or eliminate administrative and 
                regulatory impediments; and
                    ``(E) require each State rural development 
                council receiving funds under this section to 
                submit an annual report on the use of the 
                funds, including a description of strategic 
                plans, goals, performance measures, and 
                outcomes for the State rural development 
                council of the State.
            ``(4) Federal participation in coordinating 
        committee.--
                    ``(A) In general.--A Federal employee shall 
                fully participate in the governance and 
                operations of the Coordinating Committee, 
                including activities related to grants, 
                contracts, and other agreements, in accordance 
                with this section.
                    ``(B) Conflicts.--Participation by a 
                Federal employee in the Coordinating Committee 
                in accordance with this paragraph shall not 
                constitute a violation of section 205 or 208 of 
                title 18, United States Code.
            ``(5) Administrative support.--The Secretary may 
        provide such administrative support for the 
        Coordinating Committee as the Secretary determines is 
        necessary to carry out the duties of the Coordinating 
        Committee.
            ``(6) Procedures.--The Secretary may prescribe such 
        regulations, bylaws, or other procedures as are 
        necessary for the operation of the Coordinating 
        Committee.
    ``(d) State Rural Development Councils.--
            ``(1) Establishment.--Notwithstanding chapter 63 of 
        title 31, United States Code, each State may elect to 
        participate in the Partnership by entering into an 
        agreement with the Secretary to recognize a State rural 
        development council.
            ``(2) Composition.--A State rural development 
        council shall--
                    ``(A) be composed of representatives of 
                Federal, State, local, and tribal governments, 
                nonprofit organizations, regional 
                organizations, the private sector, and other 
                entities committed to rural advancement; and
                    ``(B) have a nonpartisan and 
                nondiscriminatory membership that--
                            ``(i) is broad and representative 
                        of the economic, social, and political 
                        diversity of the State; and
                            ``(ii) shall be responsible for the 
                        governance and operations of the State 
                        rural development council.
            ``(3) Duties.--A State rural development council 
        shall--
                    ``(A) facilitate collaboration among 
                Federal, State, local, and tribal governments 
                and the private and nonprofit sectors in the 
                planning and implementation of programs and 
                policies that have an impact on rural areas of 
                the State;
                    ``(B) monitor, report, and comment on 
                policies and programs that address, or fail to 
                address, the needs of the rural areas of the 
                State;
                    ``(C) as part of the Partnership, in 
                conjunction with the Coordinating Committee, 
                facilitate the development of strategies to 
                reduce or eliminate conflicting or duplicative 
                administrative or regulatory requirements of 
                Federal, State, local, and tribal governments; 
                and
                    ``(D)(i) provide to the Coordinating 
                Committee an annual plan with goals and 
                performance measures; and
                    ``(ii) submit to the Coordinating Committee 
                an annual report on the progress of the State 
                rural development council in meeting the goals 
                and measures.
            ``(4) Federal participation in state rural 
        development councils.--
                    ``(A) In general.--A State Director for 
                Rural Development of the Department of 
                Agriculture, other employees of the Department, 
                and employees of other Federal agencies with 
                rural responsibilities shall fully participate 
                as voting members in the governance and 
                operations of State rural development councils 
                (including activities related to grants, 
                contracts, and other agreements in accordance 
                with this section) on an equal basis with other 
                members of the State rural development 
                councils.
                    ``(B) Conflicts.--Participation by a 
                Federal employee in a State rural development 
                council in accordance with this paragraph shall 
                not constitute a violation of section 205 or 
                208 of title 18, United States Code.
    ``(e) Administrative Support of the Partnership.--
            ``(1) Detail of employees.--
                    ``(A) In general.--In order to provide 
                experience in intergovernmental collaboration, 
                the head of an agency with rural 
                responsibilities that elects to participate in 
                the Partnership may, and is encouraged to, 
                detail to the Secretary for the support of the 
                Partnership 1 or more employees of the agency 
                with rural responsibilities without 
                reimbursement for a period of up to 1 year.
                    ``(B) Civil service status.--The detail 
                shall be without interruption or loss of civil 
                service status or privilege.
            ``(2) Additional support.--The Secretary may 
        provide for any additional support staff to the 
        Partnership as the Secretary determines to be necessary 
        to carry out the duties of the Partnership.
            ``(3) Intermediaries.--The Secretary may enter into 
        a contract with a qualified intermediary under which 
        the intermediary shall be responsible for providing 
        administrative and technical assistance to a State 
        rural development council, including administering the 
        financial assistance available to the State rural 
        development council.
    ``(f) Matching Requirements for State Rural Development 
Councils.--
            ``(1) In general.--Except as provided in paragraph 
        (2), a State rural development council shall provide 
        matching funds, or in-kind goods or services, to 
        support the activities of the State rural development 
        council in an amount that is not less than 33 percent 
        of the amount of Federal funds received from a Federal 
        agency under subsection (g)(2).
            ``(2) Exceptions to matching requirement for 
        certain federal funds.--Paragraph (1) shall not apply 
        to funds, grants, funds provided under contracts or 
        cooperative agreements, gifts, contributions, or 
        technical assistance received by a State rural 
        development council from a Federal agency that are 
        used--
                    ``(A) to support 1 or more specific program 
                or project activities; or
                    ``(B) to reimburse the State rural 
                development council for services provided to 
                the Federal agency providing the funds, grants, 
                funds provided under contracts or cooperative 
                agreements, gifts, contributions, or technical 
                assistance.
            ``(3) Department's share.--The Secretary shall 
        develop a plan to decrease, over time, the share of the 
        Department of Agriculture of the cost of the core 
        operations of State rural development councils.
    ``(g) Funding.--
            ``(1) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this section 
        $10,000,000 for each of fiscal years 2003 through 2007.
            ``(2) Federal agencies.--
                    ``(A) In general.--Notwithstanding any 
                other provision of law limiting the ability of 
                an agency, along with other agencies, to 
                provide funds to the Coordinating Committee or 
                a State rural development council in order to 
                carry out the purposes of this section, a 
                Federal agency may make grants, gifts, or 
                contributions to, provide technical assistance 
                to, or enter into contracts or cooperative 
                agreements with, the Coordinating Committee or 
                a State rural development council.
                    ``(B) Assistance.--Federal agencies are 
                encouraged to use funds made available for 
                programs that have an impact on rural areas to 
                provide assistance to, and enter into contracts 
                with, the Coordinating Committee or a State 
                rural development council, as described in 
                subparagraph (A).
            ``(3) Contributions.--The Coordinating Committee 
        and a State rural development council may accept 
        private contributions.
    ``(h) Termination.--The authority provided under this 
section shall terminate on the date that is 5 years after the 
date of enactment of this section.''.

SEC. 6022. RURAL TELEWORK.

    Subtitle D of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981 et seq.) (as amended by section 6021) is 
amended by adding at the end the following:

``SEC. 379. RURAL TELEWORK.

    ``(a) Definitions.--In this section:
            ``(1) Eligible organization.--The term `eligible 
        organization' means a nonprofit entity, an educational 
        institution, an Indian tribe (as defined in section 4 
        of the Indian Self-Determination and Education 
        Assistance Act (25 U.S.C. 450b)), or any other 
        organization, in a rural area (except for the 
        institute), that meets the requirements of this section 
        and such other requirements as are established by the 
        Secretary.
            ``(2) Institute.--The term `institute' means a 
        rural telework institute established using a grant 
        under subsection (b).
            ``(3) Telework.--The term `telework' means the use 
        of telecommunications to perform work functions at a 
        rural work center located outside the place of business 
        of an employer.
    ``(b) Rural Telework Institute.--
            ``(1) In general.--The Secretary shall make 1 or 
        more grants to an eligible organization to pay the 
        Federal share of the cost of establishing and operating 
        a national rural telework institute to carry out 
        projects described in paragraph (2).
            ``(2) Projects.--The institute shall use grant 
        funds received under this subsection to carry out a 5-
        year project--
                    ``(A) to serve as a clearinghouse for 
                telework research and development;
                    ``(B) to conduct outreach to rural 
                communities and rural workers;
                    ``(C) to develop and share best practices 
                in rural telework throughout the United States;
                    ``(D) to develop innovative, market-driven 
                telework projects and joint ventures with the 
                private sector that employ workers in rural 
                areas in jobs that promote economic self-
                sufficiency;
                    ``(E) to share information about the design 
                and implementation of telework arrangements;
                    ``(F) to support private sector businesses 
                that are transitioning to telework;
                    ``(G) to support and assist telework 
                projects and individuals at the State and local 
                level; and
                    ``(H) to perform such other functions as 
                the Secretary considers appropriate.
            ``(3) Non-federal share.--
                    ``(A) In general.--As a condition of 
                receiving a grant under this subsection, an 
                eligible organization shall agree to obtain, 
                after the application of the eligible 
                organization has been approved and notice of 
                award has been issued, contributions from non-
                Federal sources that are equal to--
                            ``(i) during each of the first, 
                        second, and third years of a project, 
                        30 percent of the amount of the grant; 
                        and
                            ``(ii) during each of the fourth 
                        and fifth years of the project, 50 
                        percent of the amount of the grant.
                    ``(B) Indian tribes.--Notwithstanding 
                subparagraph (A), an Indian tribe may use any 
                Federal funds made available to the Indian 
                tribe for self-governance to pay the non-
                Federal contributions required under 
                subparagraph (A).
                    ``(C) Form.--The non-Federal contributions 
                required under subparagraph (A) may be in the 
                form of in-kind contributions, including office 
                equipment, office space, computer software, 
                consultant services, computer networking 
                equipment, and related services.
    ``(c) Telework Grants.--
            ``(1) In general.--Subject to paragraphs (2) 
        through (5), the Secretary shall make grants to 
        eligible organizations to pay the Federal share of the 
        cost of--
                    ``(A) obtaining equipment and facilities to 
                establish or expand telework locations in rural 
                areas; and
                    ``(B) operating telework locations in rural 
                areas.
            ``(2) Applications.--To be eligible to receive a 
        grant under this subsection, an eligible organization 
        shall submit to the Secretary, and receive the approval 
        of the Secretary of, an application for the grant that 
        demonstrates that the eligible organization has 
        adequate resources and capabilities to establish or 
        expand a telework location in a rural area.
            ``(3) Non-federal share.--
                    ``(A) In general.--As a condition of 
                receiving a grant under this subsection, an 
                eligible organization shall agree to obtain, 
                after the application of the eligible 
                organization has been approved and notice of 
                award has been issued, contributions from non-
                Federal sources that are equal to 50 percent of 
                the amount of the grant.
                    ``(B) Indian tribes.--Notwithstanding 
                subparagraph (A), an Indian tribe may use 
                Federal funds made available to the tribe for 
                self-governance to pay the non-Federal 
                contributions required under subparagraph (A).
                    ``(C) Sources.--The non-Federal 
                contributions required under subparagraph (A)--
                            ``(i) may be in the form of in-kind 
                        contributions, including office 
                        equipment, office space, computer 
                        software, consultant services, computer 
                        networking equipment, and related 
                        services; and
                            ``(ii) may not be made from funds 
                        made available for community 
                        development block grants under title I 
                        of the Housing and Community 
                        Development Act of 1974 (42 U.S.C. 5301 
                        et seq.).
            ``(4) Duration.--The Secretary may not provide a 
        grant under this subsection to expand or operate a 
        telework location in a rural area after the date that 
        is 3 years after the establishment of the telework 
        location.
            ``(5) Amount.--The amount of a grant provided to an 
        eligible organization under this subsection shall be 
        not less than $1,000,000 and not more than $2,000,000.
    ``(d) Applicability of Certain Federal Law.--An eligible 
organization that receives funds under this section shall be 
subject to the provisions of Federal law (including 
regulations) administered by the Secretary of Labor or the 
Equal Employment Opportunity Commission that govern the 
responsibilities of employers to employees.
    ``(e) Regulations.--Not later than 180 days after the date 
of enactment of this section, the Secretary shall promulgate 
regulations to carry out this section.
    ``(f) Authorization of Appropriation.--There is authorized 
to be appropriated to carry out this section $30,000,000 for 
each of fiscal years 2002 through 2007, of which $5,000,000 
shall be provided to establish and support an institute under 
subsection (b).''.

SEC. 6023. HISTORIC BARN PRESERVATION.

    Subtitle D of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1981 et seq.) (as amended by section 6022) is 
amended by adding at the end the following:

``SEC. 379A. HISTORIC BARN PRESERVATION.

    ``(a) Definitions.--In this section:
            ``(1) Barn.--The term `barn' means a building 
        (other than a dwelling) on a farm, ranch, or other 
        agricultural operation for--
                    ``(A) housing animals;
                    ``(B) storing or processing crops;
                    ``(C) storing and maintaining agricultural 
                equipment; or
                    ``(D) serving an essential or useful 
                purpose related to agricultural activities 
                conducted on the adjacent land.
            ``(2) Eligible applicant.--The term `eligible 
        applicant' means--
                    ``(A) a State department of agriculture (or 
                a designee);
                    ``(B) a national or State nonprofit 
                organization that--
                            ``(i) is described in section 
                        501(c)(3) of the Internal Revenue Code 
                        of 1986 and exempt from taxation under 
                        section 501(a) of such Code; and
                            ``(ii) has experience or expertise, 
                        as determined by the Secretary, in the 
                        identification, evaluation, 
                        rehabilitation, preservation, or 
                        protection of historic barns; and
                    ``(C) a State historic preservation office.
            ``(3) Historic barn.--The term `historic barn' 
        means a barn that--
                    ``(A) is at least 50 years old;
                    ``(B) retains sufficient integrity of 
                design, materials, and construction to clearly 
                identify the barn as an agricultural building; 
                and
                    ``(C) meets the criteria for listing on 
                National, State, or local registers or 
                inventories of historic structures.
            ``(4) Secretary.--The term `Secretary' means the 
        Secretary, acting through the Under Secretary of Rural 
        Development.
    ``(b) Program.--The Secretary shall establish a historic 
barn preservation program--
            ``(1) to assist States in developing a list of 
        historic barns;
            ``(2) to collect and disseminate information on 
        historic barns;
            ``(3) to foster educational programs relating to 
        the history, construction techniques, rehabilitation, 
        and contribution to society of historic barns; and
            ``(4) to sponsor and conduct research on--
                    ``(A) the history of barns; and
                    ``(B) best practices to protect and 
                rehabilitate historic barns from the effects of 
                decay, fire, arson, and natural disasters.
    ``(c) Grants.--
            ``(1) In general.--The Secretary may make grants 
        to, or enter into contracts or cooperative agreements 
        with, el