S 30 IS

To provide countercyclical income loss protection to offset extreme losses resulting from severe economic and weather-related events, and for other purposes.

To provide countercyclical income loss protection to offset extreme losses resulting from severe economic and weather-related events, and for other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the `Agricultural Market Failure Protection Act of 1999'.

SEC. 101. MARKETING ASSISTANCE LOANS.

(a) IN GENERAL- Section 132 of the Agricultural Market Transition Act (7 U.S.C. 7232) is amended--

(1) in subsection (a)(1)--

(A) by striking `be--' and all that follows through `(A) not' and inserting `be not'; and

(B) by striking `; but' and all that follows through `per bushel';

(2) in subsection (b)(1)--

(A) by striking `be--' and all that follows through `(A) not' and inserting `be not'; and

(B) by striking `; but' and all that follows through `per bushel';

(3) in subsection (c)(2), by striking `or more than $0.5192 per pound';

(4) in subsection (d)--

(A) by striking `be--' and all that follows through `(1) not' and inserting `be not'; and

(B) by striking `; but' and all that follows through `per pound';

(5) by striking subsection (e) and inserting the following:

`(e) RICE- The loan rate for a marketing assistance loan under section 131 for rice shall be--

`(1) not less than 85 percent of the simple average price received by producers of rice, as determined by the Secretary, during the marketing years for the immediately preceding 5 crops of rice, excluding the year in which the average price was the highest and the year in which the average price was the lowest in the period; but

`(2) not less than $6.50 per hundredweight.'; and

(6) in subsection (f)--

(A) in paragraph (1)(B), by striking `or more than $5.26'; and

(B) in paragraph (2)(B), by striking `or more than $0.093'.

(b) TERM OF LOAN- Section 133 of the Agricultural Market Transition Act (7 U.S.C. 7233) is amended by striking subsection (c) and inserting the following:

`(c) EXTENSIONS- The Secretary may extend the term of a marketing assistance loan for any loan commodity for a period not to exceed 6 months.'.

(c) APPLICATION-

(1) IN GENERAL- The authority provided by this section applies to the 1999 and subsequent crops of a loan commodity (as defined in section 102 of the Agricultural Market Transition Act (7 U.S.C. 7202)).

(2) LOANS- This section applies to a marketing assistance loan for a loan commodity made under subtitle C of the Agricultural Market Transition Act (7 U.S.C. 7231 et seq.) for the 1999 crop year before, on, or after the date of enactment of this Act.

SEC. 3. NET OPERATING LOSS OF FARMERS.

(a) INCREASE IN CARRYBACK YEARS- Paragraph (1) of section 172(b) of the Internal Revenue Code of 1986 (relating to net operating loss carrybacks and carryforwards) is amended by adding at the end the following new subparagraph:

`(G) FARMING LOSSES- Subparagraph (A)(i) shall be applied by substituting `10 years' for `2 years' with respect to the portion of the net operating loss of an eligible taxpayer (as defined in subsection (i)) for any taxable year beginning after December 31, 1997, and ending before January 1, 2000, which is a farming loss (as so defined) with respect to the taxpayer.'

(b) DEFINITIONS AND RULES RELATING TO FARMING LOSSES- Section 172 of such Code is amended by redesignating subsection (i) as subsection (j) and inserting after subsection (h) the following new subsection:

`(i) DEFINITIONS AND RULES RELATING TO FARMING LOSSES- For purposes of this section--

`(1) FARMING LOSS-

`(A) IN GENERAL- The term `farming loss' means the lesser of--

`(i) the net operating loss of the taxpayer for the taxable year, or

`(ii) the net operating loss of the taxpayer for the taxable year determined by only taking into account items of income and deduction attributable to 1 or more qualified farming businesses of the taxpayer.

`(B) DOLLAR LIMITATION-

`(i) IN GENERAL- The farming loss of a taxpayer for any taxable year shall not exceed $200,000.

`(ii) AGGREGATION RULES-

`(I) IN GENERAL- All persons treated as 1 employer under subsections (a) or (b) of section 52 shall be treated as 1 person.

`(II) PASS-THRU ENTITY- In the case of a partnership, trust, or other pass-thru entity, the limitation shall be applied at both the entity and the owner level.

`(III) OWNER- The limitation shall be reduced by the amount of farming loss determined for a corporation for which the taxpayer is a 50 percent owner in the taxable year of the corporation ending in the taxable year of the taxpayer owner.

`(2) ELIGIBLE TAXPAYER-

`(A) IN GENERAL- The term `eligible taxpayer' means a taxpayer which derives more than 50 percent of its gross income for the 3-year period beginning 2 years prior to the current taxable year from qualified farming businesses.

`(B) QUALIFIED FARMING BUSINESS- The term `qualified farming business' means a trade or business of farming (within the meaning of section 2032A)--

`(i) with respect to which--

`(I) the taxpayer or a member of the family of the taxpayer materially participates (within the meaning of section 2032A(e)(6)), or

`(II) in the case of a taxpayer other than an individual, a 20 percent owner of the taxpayer or a member of the owner's family materially participates (as so defined), and

`(ii) which does not receive in excess of $7,000,000 from sales in a taxable year.

For purposes of clause (i)(II), owners which are members of a single family shall be treated as a single owner.

`(3) OWNER-

`(A) 20 PERCENT OWNER- The term `20 percent owner' means any person who would be described in section 416(i)(1)(B)(i) if `20 percent' were substituted for `5 percent' each place it appears in such section.

`(B) 50 PERCENT OWNER- The term `50 percent owner' means any person who would be described in section 416(i)(1)(B)(i) if `50 percent' were substituted for `5 percent' each place it appears in such section.

`(4) COORDINATION WITH SUBSECTION (b)(2)- For purposes of applying subsection (b)(2), a farming loss for any taxable year shall be treated as a separate net operating loss for such taxable year to be taken into account after the remaining portion of the net operating loss for such taxable year.

`(5) ELECTION- Any taxpayer entitled to a 10-year carryback under subsection (b)(1)(G) from any loss year may elect to have the carryback period with respect to such loss year, and any portion of the farming loss for such year, determined without regard to subsection (b)(1)(G). Such election shall be made in such manner as may be prescribed by the Secretary and shall be made by the due date (including extensions of time) for filing the taxpayer's return for the taxable year of the net operating loss. Such election, once made for any taxable year, shall be irrevocable for that taxable year.'