To enhance fair and open competition in the production and sale of agricultural commodities, and for other purposes.

To enhance fair and open competition in the production and sale of agricultural commodities, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Securing a Future for Independent Agriculture Act of 2001'.

(b) TABLE OF CONTENTS- The table of contents is as follows:

Sec. 1. Short title; table of contents.

TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS

Subtitle A--Definitions

Sec. 101. Definitions.

Subtitle B--Protection from Anticompetitive Practices

Sec. 111. Prohibitions against unfair practices in transactions involving agricultural commodities.

Sec. 112. Reports of the Secretary on potential unfair practices.

Sec. 113. Report on corporate structure.

Sec. 114. Mandatory funding for staff.

Sec. 115. General Accounting Office study.

Subtitle C--Contract Fairness

Sec. 121. Obligation of good faith.

Sec. 122. Disclosure of risks and readability requirements under agricultural contracts.

Sec. 123. Right of contract producers to cancel production contracts.

Sec. 124. Prohibition of confidentiality provisions.

Sec. 125. Production contract liens.

Sec. 126. Production contracts involving investment requirements.

Sec. 127. Producer rights.

Sec. 128. Mediation.

Subtitle D--Agricultural Fair Practices

Sec. 131. Agricultural fair practices.

Subtitle E--Implementation

Sec. 141. Relationship to State law.

Sec. 142. Regulations.

Sec. 143. Implementation plan.

Sec. 144. Effective date.

TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND

Sec. 201. National Rural Cooperative and Business Equity Fund.

TITLE III--COUNTRY OF ORIGIN LABELING

Sec. 301. Country of origin labeling.

TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION

Sec. 401. Loan rates for marketing assistance loans.

Sec. 402. Term of loans.

Sec. 403. Application.

TITLE V--FARMLAND PROTECTION

Sec. 501. Farmland protection program.

TITLE VI--CIVIL RIGHTS

Sec. 601. Sense of Congress on participation of socially disadvantaged groups in Department of Agriculture programs.

SEC. 101. DEFINITIONS.

In this title:

(1) ACTIVE CONTRACTOR- The term `active contractor' means a person (including a processor) that (in accordance with a production contract) owns, or will own, an agricultural commodity that is produced by a contract producer.

(2) AGRICULTURAL COMMODITY- The term `agricultural commodity' has the meaning given the term in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).

(3) AGRICULTURAL CONTRACT- The term `agricultural contract' means a marketing contract or a production contract.

(4) AGRICULTURAL COOPERATIVE- The term `agricultural cooperative' means an association of persons engaged in the production, marketing, or processing of an agricultural commodity that meets the requirements of the Act entitled `An Act to authorize association of producers of agricultural products' (commonly known as the `Capper-Volstead Act') (7 U.S.C. 291 et seq).

(5) BROKER- The term `broker' means any person engaged in the business of negotiating sales and purchases of any agricultural commodity in interstate or foreign commerce for or on behalf of the vendor or the purchaser, except that no person shall be considered a broker if the person's sales of such agricultural commodities are not in excess of $1,000,000 per year.

(6) CAPITAL INVESTMENT- The term `capital investment' means an investment in--

(A) a structure, such as a building or manure storage structure; or

(B) machinery or equipment associated with producing an agricultural commodity that has a useful life of more than 1 year.

(7) COMMISSION MERCHANT- The term `commission merchant' means any person engaged in the business of receiving in interstate or foreign commerce any agricultural commodity for sale, on commission, or for or on behalf of another person, except that no person shall be considered a commission merchant if the person's sales of such agricultural commodities are not in excess of $1,000,000 per year.

(8) CONTRACT INPUT-

(A) IN GENERAL- The term `contract input' means an agricultural commodity or an organic or synthetic substance or compound that is used to produce an agricultural commodity.

(B) INCLUSIONS- The term `contract input' includes livestock, plants, agricultural seeds, semen or eggs for breeding stock, fertilizers, soil conditioners, and pesticides.

(9) CONTRACT LIVESTOCK FACILITY- The term `contract livestock facility' means a facility in which livestock or a product of live livestock is produced under a production contract by a contract producer.

(10) CONTRACT PRODUCER- The term `contract producer' means a producer that produces an agricultural commodity under a production contract.

(11) CONTRACTOR- The term `contractor' means a person that is an active contractor or a passive contractor.

(12) COVERED PERSON- The term `covered person' means a dealer, processor, commission merchant, and broker.

(13) CROP- The term `crop' means an agricultural commodity produced from a plant.

(14) DEALER- The term `dealer' means--

(A) any person (except an agricultural cooperative) engaged in the business of buying, selling, or marketing agricultural commodities in wholesale or jobbing quantities, as determined by the Secretary, in interstate or foreign commerce, except that--

(i) no person shall be considered a dealer with respect to sales or marketing of any agricultural commodity of that person's own production if the sales or marketing of such agricultural commodities do not exceed $10,000,000 per year; and

(ii) no person shall be considered a dealer who buys, sells, or markets less than $1,000,000 per year of such agricultural commodities; and

(B) an agricultural cooperative that sells or markets agricultural commodities of its members' own production if the agricultural cooperative sells or markets more than $1,000,000 of its members' production per year of such agricultural commodities.

(15) INVESTMENT REQUIREMENT- The term `investment requirement' means a provision in a production contract that requires a contract producer to make a capital investment associated with producing an agricultural commodity subject to the production contract.

(16) LIVESTOCK- The term `livestock' means beef cattle, dairy cattle, swine, sheep, or poultry.

(17) MARKETING CONTRACT- The term `marketing contract' means a written agreement between a processor and a producer for the purchase of an agricultural commodity grown or raised by the producer.

(18) PASSIVE CONTRACTOR- The term `passive contractor' means a person that--

(A) provides a management service to a contract producer; and

(B) does not own an agricultural commodity that is produced by the contract producer under a production contract.

(19) PROCESSOR-

(A) IN GENERAL- The term `processor' means--

(i) any person (other than an agricultural cooperative) engaged in the business of handling, preparing, or manufacturing (including slaughtering) an agricultural commodity or the products of an agricultural commodity for sale or marketing in interstate or foreign commerce for human consumption; and

(ii) an agricultural cooperative that handles, prepares, or manufactures (including slaughtering) agricultural commodities of its members' own production.

(B) EXCLUSIONS- The term `processor' does not include--

(i) any person (other than an agricultural cooperative) with respect to the handling, preparing, or manufacturing (including slaughtering) of an agricultural commodity that was produced by the person if the gross revenue derived by the person from the sales or marketing of the agricultural commodity is less than $10,000,000 per year; and

(ii) any agricultural cooperative that handles, prepares, or manufactures (including slaughtering) an agricultural commodity if the gross revenue derived by the person from the sales or marketing of the agricultural commodity is less than $1,000,000 per year.

(20) PRODUCE- The term `produce' means--

(A) to provide feed or services relating to the care and feeding of livestock, including milking dairy cattle and storing raw milk; and

(B) to provide for planting, raising, harvesting, and storing a crop, including preparing soil for planting and applying a fertilizer, soil conditioner, or pesticide to a crop.

(21) PRODUCER-

(A) IN GENERAL- The term `producer' means a person that produces an agricultural commodity.

(B) EXCLUSIONS- The term `producer' does not include--

(i) a commercial fertilizer or pesticide applicator;

(ii) a feed supplier; or

(iii) a veterinarian.

(22) PRODUCTION CONTRACT-

(A) IN GENERAL- The term `production contract' means a written agreement that provides for--

(i) the production of an agricultural commodity by a contract producer; or

(ii) the provision of a management service relating to the production of an agricultural commodity by a contract producer.

(B) INCLUSIONS- The term `production contract' includes--

(i) a contract between an active contractor and a contract producer for the production of an agricultural commodity;

(ii) a contract between an active contractor and a passive contractor for the provision of a management service to a contract producer in the production of an agricultural commodity; and

(iii) a contract between a passive contractor and a contract producer if--

(I) the production contract provides for a management service furnished by the passive contractor to

(II) the passive contractor has a contractual relationship with the active contractor involving the production of the agricultural commodity.

(23) SECRETARY- The term `Secretary' means the Secretary of Agriculture.

SEC. 111. PROHIBITIONS AGAINST UNFAIR PRACTICES IN TRANSACTIONS INVOLVING AGRICULTURAL COMMODITIES.

(a) PROHIBITIONS- It shall be unlawful in, or in connection with, any transaction in interstate or foreign commerce for any covered person or contractor--

(1) to engage in or use any unfair, unreasonable, unjustly discriminatory, or deceptive practice or device in the marketing, receiving, purchasing, sale, or contracting for the production of any agricultural commodity;

(2) to make or give any undue or unreasonable preference or advantage to any particular person or locality or subject any particular person or locality to any undue or unreasonable disadvantage in connection with any transaction involving any agricultural commodity;

(3) to make any false or misleading statement in connection with any transaction involving any agricultural commodity that is purchased or received in interstate or foreign commerce, or involving any production contract, or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction or production contract;

(4) to retaliate against or disadvantage, or to conspire to retaliate against or disadvantage, any person because of statements or information lawfully provided by the person to any person (including to the Secretary or to a law enforcement agency) regarding alleged improper actions or violations of law by the covered person or contractor (unless the statements or information are determined to be libelous or slanderous under applicable State law) involving any agricultural commodity;

(5) to include as part of any new or renewed agreement or contract a right of first refusal, or to make any sale or transaction contingent on the granting of a right of first refusal, involving any agricultural commodity, before the date that is 180 days after the study required under section 115 is complete; or

(6) to offer different prices contemporaneously for agricultural commodities of like grade and quality (except agricultural commodities covered by the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.)), unless--

(A) the agricultural commodity is purchased in a public market through a competitive bidding process or under similar conditions that provide opportunities for multiple competitors to seek to acquire the agricultural commodity;

(B) the premium or discount reflects the actual cost of acquiring an agricultural commodity prior to processing; or

(C) the Secretary has determined that such types of offers do not have a discriminatory impact against small volume producers of agricultural commodities.

(b) VIOLATIONS-

(1) COMPLAINTS- Whenever the Secretary has reason to believe that any covered person or contractor has violated subsection (a), the Secretary shall cause a complaint in writing to be served on the covered person or contractor, stating the charges in that respect, and requiring the covered person or contractor to attend and testify at a hearing to be held not earlier than 30 days after the service of the complaint.

(2) HEARING-

(A) IN GENERAL- The Secretary may hold hearings, sign and issue subpoenas, administer oaths, examine witnesses, receive evidence, and require the attendance and testimony of witnesses and the production of such accounts, records, and memoranda, as the Secretary considers necessary, for the determination of the existence of any violation of this section.

(B) RIGHT TO HEARING- A covered person or contractor may request a hearing if the covered person or contractor is subject to penalty for unfair conduct under this section.

(C) RESPONDENTS' RIGHTS- During a hearing, the covered person or contractor shall be given, pursuant to regulations promulgated by the Secretary, the opportunity--

(i) to be informed of the evidence against the covered person or contractor;

(ii) to cross-examine witnesses; and

(iii) to present evidence.

(D) HEARING LIMITATION- The issues of any hearing held or requested under this section shall be limited in scope to matters directly related to the purpose for which the hearing was held or requested.

(3) REPORT OF FINDING AND PENALTIES-

(A) IN GENERAL- If, after a hearing, the Secretary finds that the covered person or contractor has violated subsection (a), the Secretary shall make a report in writing that states the findings of fact and includes an order requiring the covered person or contractor to cease and desist from continuing the violation.

(B) CIVIL PENALTY- The Secretary may assess a civil penalty in an amount not to exceed $100,000 for each violation of subsection (a).

(4) TEMPORARY INJUNCTION AND FINALITY AND APPEALABILITY OF AN ORDER-

(A) TEMPORARY INJUNCTION- At any time after a complaint is filed under paragraph

(B) APPEALABILITY OF AN ORDER- An order issued pursuant to this subsection shall be final and conclusive unless within 30 days after service of the order, the covered person or contractor petitions to appeal the order to the court of appeals for the circuit in which the covered person or contractor resides or has its principal place of business or the District of Columbia Circuit Court of Appeals.

(C) DELIVERY OF PETITION-

(i) IN GENERAL- The clerk of the court shall immediately cause a copy of the petition filed under subparagraph (B) to be delivered to the Secretary.

(ii) RECORD- On receipt of the petition, the Secretary shall file in the court the record of the proceedings under this subsection.

(D) PENALTY FOR FAILURE TO OBEY AN ORDER-

(i) IN GENERAL- Any covered person or contractor that fails to obey any order of the Secretary issued under this section after the order, or the order as modified, has been sustained by the court or has otherwise become final, shall be fined not less than $5,000 and not more than $100,000 for each offense.

(ii) SEPARATE OFFENSES- Each day during which the failure continues shall be considered a separate offense.

(5) RECORDS-

(A) IN GENERAL- Each covered person or contractor shall maintain for a period of not less than 5 years accounts, records, and memoranda (including marketing agreements, forward contracts, and formula pricing arrangements) that fully and correctly disclose all transactions involved in the business of the covered person or contractor, including the true ownership of the business.

(B) FAILURE TO KEEP RECORDS OR ALLOW THE SECRETARY TO INSPECT RECORDS- Failure to keep, or allow the Secretary to inspect records as required by this paragraph shall constitute an unfair practice in violation of subsection (a)(1).

(C) INSPECTION OF RECORDS- The Secretary shall have the right to inspect such accounts, records, and memoranda (including marketing agreements, forward contracts, and formula pricing arrangements) of any covered person or contractor as may be material to the investigation of any alleged violation of this section or for the purpose of investigating the business conduct or practices of an organization with respect to the covered person or contractor.

(c) COMPENSATION FOR INJURY-

(1) ESTABLISHMENT OF THE FAMILY FARMER AND RANCHER CLAIMS COMMISSION-

(A) IN GENERAL- The Secretary shall appoint 3 individuals to a commission to be known as the `Family Farmer and Rancher Claims Commission' (referred to in this subsection as the `Commission') to review claims of family farmers and ranchers that have suffered financial damages as a result of any violation of this section as determined by the Secretary pursuant to subsection (b)(3).

(B) TERM OF SERVICE-

(i) IN GENERAL- Each member of the Commission shall serve 3-year terms which may be renewed.

(ii) INITIAL MEMBERS- The initial members of the Commission may be appointed for a period of less than 3 years, as determined by the Secretary.

(2) REVIEW OF CLAIMS-

(A) SUBMISSION OF CLAIMS- A family farmer or rancher damaged as a result of a violation of this section, as determined by the Secretary pursuant to subsection (b)(3), may preserve the right to claim financial damages under this section by filing a claim pursuant to regulations promulgated by the Secretary.

(B) DETERMINATION- Based on a review of the claim, the Commission shall determine the amount of damages to be paid, if any, as a result of the violation.

(C) REVIEW- The decisions of the Commission under this paragraph shall not be subject to judicial review except to determine that the amount of damages to be paid is consistent with the published regulations of the Secretary that establish the criteria for implementing this subsection.

(3) FUNDING-

(A) IN GENERAL- Funds collected from civil penalties pursuant to this section shall--

(i) be transferred to a special fund in the Treasury;

(ii) be made available to the Secretary without further Act of appropriation; and

(iii) remain available until expended to pay the expenses of the Commission and claims described in this subsection.

(B) AUTHORIZATION OF APPROPRIATION- In addition to the funds described in subparagraph (A), there are authorized to be appropriated such sums as may be necessary to carry out this section.

SEC. 112. REPORTS OF THE SECRETARY ON POTENTIAL UNFAIR PRACTICES.

(a) FILING PREMERGER NOTICES WITH THE SECRETARY- No covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business shall merge or acquire, directly or

(1) any voting securities or assets of the covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business with annual net sales or total assets of $10,000,000 or more are being acquired by a covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business that has total assets or annual net sales of $100,000,000 or more; or

(2) any voting securities or assets of a covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business with annual net sales, or total assets, of $100,000,000 or more are being acquired by any covered person, operator of a warehouse used to store agricultural commodities, or agriculture-related business with annual net sales or total assets of $10,000,000 or more, if, as a result of the acquisition, the acquiring person would hold an aggregate total amount of the voting securities and assets of the acquired person in excess of $50,000,000.

(b) REVIEW BY THE SECRETARY-

(1) IN GENERAL- Except as provided in paragraph (2), the Secretary may conduct a review of any merger or acquisition described in subsection (a).

(2) EXCEPTION- The Secretary shall conduct a review of any merger or acquisition described in subsection (a) on a request from a member of Congress.

(c) ACCESS TO RECORDS- The Secretary may request any information, including any testimony, documentary material, or related information, from a covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business, pertaining to any merger or acquisition of any covered person, operator of a warehouse used to store agricultural commodities, or other agriculture-related business.

(d) PURPOSE OF REVIEW-

(1) FINDINGS- In conducting the review under subsection (a), the Secretary shall make findings concerning whether the merger or acquisition could--

(A) be significantly detrimental to the present or future viability of family farms or ranches or rural communities in the areas affected by the merger or acquisition, pursuant to standards established by the Secretary; or

(B) lead to a violation of section 111(a).

(2) REMEDIES- The review may include a determination of possible remedies regarding how the parties of the merger or acquisition may take steps to modify their operations to address the findings described in paragraph (1).

(e) REPORT OF REVIEW-

(1) PRELIMINARY REPORT- After conducting the review required under subsection (b), the Secretary shall issue a preliminary report to the parties of the merger or acquisition and the Attorney General or the Federal Trade Commission, as appropriate, which shall include findings and a description of any remedies described in subsection (d)(2).

(2) FINAL REPORT- After affording the parties described in paragraph (1) an opportunity for a hearing regarding the findings and any proposed remedies in the preliminary report, the Secretary shall issue a final report to the President and the Attorney General or the Federal Trade Commission, as appropriate, with respect to the merger or acquisition.

(f) IMPLEMENTATION OF THE REPORT- Not later than 120 days after the issuance of a final report described in subsection (e)(2), the parties to the merger or acquisition affected by the report shall--

(1) make changes to their operations or structure to comply with the findings and implement any suggested remedy or any agreed-on alternative remedy; and

(2) file a response demonstrating the compliance or implementation.

(g) CONFIDENTIALITY OF INFORMATION-

(1) IN GENERAL- Subject to paragraph (2), information used by the Secretary to conduct the review required under this section provided by a party to the merger or acquisition under review or by a government agency shall be treated by the Secretary as confidential information pursuant to section 1770 of the Food Security Act of 1985 (7 U.S.C. 2276).

(2) PARTY TO HEARING- The Secretary may share any such information with the Attorney General, the Federal Trade Commission, and a party seeking a hearing pursuant to subsection (e)(2) with respect to information relating to the party.

(3) REPORT- Subject to paragraph (1), the report issued under subsection (e) shall be available to the public.

(h) CIVIL PENALTIES-

(1) ORIGINAL PENALTY-

(A) IN GENERAL- After affording the parties an opportunity for a hearing, the Secretary may assess a civil penalty in an amount not to exceed $300,000 for the failure of a person to comply with the requirements of subsection (a) or (f).

(B) ISSUE- Any such hearing shall be limited to the issue of the amount of the civil penalty.

(2) ADDITIONAL PENALTY-

(A) IN GENERAL- If after being assessed a civil penalty under paragraph (1) a person continues to fail to meet the requirements of subsection (a) or (f), the Secretary may, after affording the parties an opportunity for a hearing, assess a further civil penalty in an amount not to exceed $100,000 for each day the person continues the violation.

(B) ISSUE- Any such hearing shall be limited to the issue of the additional civil penalty assessed under this paragraph.

SEC. 113. REPORT ON CORPORATE STRUCTURE.

(a) IN GENERAL-

(1) REPORT- A covered person with annual sales in excess of $100,000,000 shall annually file with the Secretary a report that describes, with respect to both domestic and foreign activities, the strategic alliances, ownership in other agribusiness firms or agribusiness-related firms, joint ventures, subsidiaries, brand names, and interlocking boards of directors with other corporations, representatives, and agents that lobby Congress on behalf of the covered person, as determined by the Secretary.

(2) CONTRACTS- Paragraph (1) shall not apply to a contract.

(b) CIVIL PENALTIES-

(1) ORIGINAL PENALTY-

(A) IN GENERAL- After affording the parties an opportunity for a hearing, the Secretary may assess a civil penalty in an amount not to exceed $100,000 for the failure of a person to comply with this section.

(B) ISSUE- Any such hearing shall be limited to the issue of the amount of the civil penalty

(2) ADDITIONAL PENALTY-

(A) IN GENERAL- If after being assessed a civil penalty in accordance with paragraph (1) a person continues to fail to meet the requirements of this section, the Secretary may, after affording the parties an opportunity for a hearing, assess a further civil penalty in an amount not to exceed $100,000 for each day the person continues the violation.

(B) ISSUE- Any such hearing shall be limited to the amount of the additional civil penalty assessed under this paragraph.

SEC. 114. MANDATORY FUNDING FOR STAFF.

(a) IN GENERAL- Out of the funds in the Treasury not otherwise appropriated, the Secretary of Treasury shall provide to the Secretary of Agriculture $7,000,000 for each of fiscal years 2002 through 2006, to hire, train, and provide for additional staff to carry out additional responsibilities under this subtitle, including a Special Counsel on Fair Markets and Rural Opportunity, additional attorneys for the Office of General Counsel, investigators, economists, and support staff.

(b) AVAILABILITY- The sums shall be--

(1) made available to the Secretary without further Act of appropriation; and

(2) in addition to funds otherwise made available to the Secretary for the purposes described in subsection (a).

SEC. 115. GENERAL ACCOUNTING OFFICE STUDY.

Not later than 1 year after the date of enactment of this Act, the Comptroller General of the United States, in consultation with the Attorney General, the Secretary, the Federal Trade Commission, the National Association of Attorney's General, and other persons, shall--

(1) study competition in the domestic farm economy with a special focus on--

(A) protecting family farms and ranches and rural communities; and

(B) the potential for monopsony and oligopsony nationally and regionally; and

(2) provide a report to the appropriate committees of Congress on--

(A) the correlation between increases in the gap between--

(i) retail consumer food prices;

(ii) the prices paid to farmers and ranchers; and

(iii) any increases in concentration among processors, manufacturers, or other firms that buy from farmers and ranchers;

(B) the extent to which the use of formula pricing, marketing agreements, forward contracting, and production contracts tend to give processors, agribusinesses, and other buyers of agricultural commodities unreasonable market power over producers or suppliers in local markets;

(C) whether the granting of process patents relating to biotechnology research affecting agriculture during the past 20 years has tended to overly restrict related biotechnology research or has tended to overly limit competition in the biotechnology industries that affect agriculture in a manner that is contrary to the public interest, or could do so in the future;

(D) whether acquisitions of companies that own biotechnology patents and seed patents by multinational companies have the potential for reducing competition in the United States and unduly increasing the market power of the multinational companies;

(E) whether existing processors or agribusinesses have disproportionate market power and if competition could be increased if the processors or agribusinesses were required to divest assets to ensure that they do not exert the disproportionate market power over local markets;

(F) the extent of increase in concentration in milk processing, procurement and handling, and the potential risks from that increase in concentration on--

(i) the economic well-being of dairy farmers;

(ii) the school lunch program; and

(iii) other Federal nutrition programs;

(G) the impact of mergers, acquisitions, and joint ventures among dairy cooperatives on dairy farmers, including impacts on both members and nonmembers of the merging cooperatives;

(H) the impact of the significant increase in the use of stock as the primary means of effectuating mergers and acquisitions by large companies;

(I) the increase in the number and size of mergers or acquisitions in the United States and whether some of the mergers or acquisitions would have taken place if the merger or acquisition had to be consummated primarily with cash, other assets, or borrowing; and

(J) whether agricultural producers typically appear to derive any benefits (such as higher prices for their products or any other advantages) from right-of-first-refusal provisions contained in purchase contracts or other deals with agribusiness purchasers of the products.

SEC. 121. OBLIGATION OF GOOD FAITH.

An agricultural contract shall carry an obligation of good faith (as defined in applicable State law provisions of the Uniform Commercial Code) on all parties to the agricultural contract with respect to the performance and enforcement of the agricultural contract.

SEC. 122. DISCLOSURE OF RISKS AND READABILITY REQUIREMENTS UNDER AGRICULTURAL CONTRACTS.

(a) READABILITY AND UNDERSTANDABILITY-

(1) IN GENERAL- An agricultural contract shall be readable and understandable, in that the agricultural contract--

(A) shall be printed in legible type;

(B) shall be appropriately divided into captioned sections; and

(C) shall be written in clear and coherent language using words and grammar that are understandable by a person of average intelligence, education, and experience within the agricultural industry.

(2) EFFECT- Paragraph (1) does not preclude the use of--

(A) a particular word, phrase, provision, or form of agreement that is specifically required, recommended, or endorsed by a Federal or State law (including a regulation); or

(B) a technical term that is used to describe the service or property that is the subject of the agricultural contract, if the term is customarily used by producers in the ordinary course of business in connection with the service or property described.

(b) DISCLOSURE STATEMENT REQUIREMENT- An agricultural contract shall--

(1) be accompanied by a clear written disclosure statement describing the material risks faced by the producer if the producer enters into the agricultural contract; and

(2) disclose (in a manner consistent with subsection (a)), provisions of the agricultural contract relating to--

(A) duration;

(B) termination;

(C) renegotiation standards;

(D) responsibility for environmental damage;

(E) factors to be used in determining payment;

(F) responsibility for obtaining and complying with Federal, State, and local permits;

(G) in the case of a production contract, the right of the producer to cancel the production contract in accordance with section 123; and

(H) any other terms that the Secretary determines are appropriate for disclosure.

(c) COVER SHEET REQUIREMENT- An agricultural contract entered into, amended, or renewed after the date of enactment of this Act shall contain as the first page, or first page of text if it is preceded by a title page, a cover sheet that complies with subsection (a) and contains the following:

(1) A brief statement that the agricultural contract is a legal contract between the parties to the agricultural contract.

(2) The following statement: `READ YOUR CONTRACT CAREFULLY. This cover sheet provides only a brief summary of your contract. This cover sheet is not the contract, and only the terms of the actual contract are legally binding. The contract itself sets forth, in detail, the rights and obligations of both you and the contractor or processor. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.'.

(3) A written disclosure of risks in accordance with subsection (b).

(4) In the case of a production contract, a statement describing, in plain language, the right of the producer to cancel the production contract in accordance with section 123.

(5) An index of the major provisions of the agricultural contract and the pages on which the provisions appear, including--

(A) the name of each party to the agricultural contract;

(B) the definitions section of the agricultural contract;

(C) the provisions governing termination, cancellation, renewal, and amendment of the agricultural contract by either party;

(D) the duties and obligations of each party; and

(E) provisions subject to change in the agricultural contract.

(d) REVIEW BY SECRETARY-

(1) SUBMISSION TO SECRETARY- A contractor may submit an agricultural contract to the Secretary for review to determine whether the agricultural contract complies with this section.

(2) ACTION BY SECRETARY- The Secretary shall--

(A) in determining whether an agricultural contract or cover sheet is readable, in accordance with subsection (a), consider--

(i) the simplicity of the sentence structure;

(ii) the extent to which commonly used and understood words are employed;

(iii) the extent to which esoteric legal terms are avoided;

(iv) the extent to which references to other sections or provisions of the agricultural contract are minimized;

(v) the extent to which clear definitions are used; and

(vi) any additional factors relevant to the readability or understandability of the agricultural contract; and

(B) after reviewing the agricultural contract--

(i) certify that the agricultural contract complies with this section;

(ii) decline to certify that the agricultural contract complies with this section and provide specific reasons for declining to certify the agricultural contract; or

(iii) decline to review the agricultural contract because--

(I) the compliance of the agricultural contract with this section is subject to pending litigation; or

(II) the agricultural contract is not subject to this section.

(3) JUDICIAL REVIEW- An action of the Secretary under this subsection shall not be subject to judicial review.

(4) CERTIFICATION-

(A) IN GENERAL- An agricultural contract certified under this subsection shall be considered to comply with subsections (a), (b), and (c).

(B) NO APPROVAL OF LEGALITY OR LEGAL EFFECT- Certification of an agricultural contract under this subsection shall not constitute an approval of the legality or legal effect of the agricultural contract.

(C) EFFECT OF APPROVAL; CONSTRUCTIVE APPROVAL- If the Secretary certifies an agricultural contract under this subsection--

(i) the agricultural contract shall be considered to be in compliance with subsections (a), (b), and (c); and

(ii) the remedies provided under subsection (e) shall not be available.

(D) TIMING- To the maximum extent practicable, the Secretary shall make a decision on the certification of an agricultural contract not later than 30 days after receipt of the agricultural contract.

(5) EFFECT OF DISAPPROVAL- If the Secretary disapproves the certification of an agricultural contract, the agricultural contract shall be void.

(6) EFFECT OF FAILURE TO SUBMIT AGRICULTURAL CONTRACT- The failure to submit an agricultural contract to the Secretary for review under this subsection shall not be considered to be a lack of good faith or to raise a presumption that the agricultural contract violates this section.

(e) REMEDIES FOR VIOLATIONS- In addition to applicable remedies provided under State law, a court reviewing an agricultural contract that is not certified under subsection (d) may change the terms of the agricultural contract, or limit a provision of the agricultural contract, to avoid an unfair result if--

(1) the court finds--

(A) a material provision of the agricultural contract violates subsection (a), (b), or (c);

(B) the violation reasonably caused the producer to be substantially confused about any of the rights, obligations, or remedies of any party to the agricultural contract; and

(C) the violation has caused or is likely to cause financial detriment to the producer; and

(2) the claim is brought before the obligations of any party to the agricultural contract have been fully performed.

(f) LIMITATIONS ON PRODUCER ACTIONS-

(1) IN GENERAL- A violation of this section--

(A) shall not entitle a producer to withhold performance of an otherwise valid contractual obligation when bringing a claim for relief under this section; and

(B) is not a defense to a claim arising from the breach of an agricultural contract by a producer.

(2) ACTUAL DAMAGES- A producer may recover actual damages caused by a violation of this section only if the violation reasonably caused the producer to fail to understand a right, obligation, or remedy under the agricultural contract.

(g) STATUTE OF LIMITATIONS- A claim that an agricultural contract violates this section shall be made not later than 6 years after the date on which the agricultural contract is executed by the producer.

SEC. 123. RIGHT OF CONTRACT PRODUCERS TO CANCEL PRODUCTION CONTRACTS.

(a) IN GENERAL- A contract producer may cancel a production contract by mailing a cancellation notice to the contractor not later than the later of--

(1) the date that is 3 business days after the date on which the production contract is executed; or

(2) any cancellation date specified in the production contract.

(b) DISCLOSURE- A production contract shall clearly disclose--

(1) the right of the contract producer to cancel the production contract;

(2) the method by which the contract producer may cancel the production contract; and

(3) the deadline for canceling the production contract.

SEC. 124. PROHIBITION OF CONFIDENTIALITY PROVISIONS.

(a) PROHIBITION- Any provision of an agricultural contract that provides that information contained in the agricultural contract (other than a trade secret to which section 552 of title 5, United States Code, applies) is confidential shall be void.

(b) FORM- A confidentiality provision described in subsection (a) shall be void regardless of whether the provision is--

(1) express or implied;

(2) oral or written;

(3) required or conditional; or

(4) contained in the agricultural contract, another agricultural contract, or in a related document, policy, or agreement.

(c) OTHER PROVISIONS- This section shall not affect other provisions of an agricultural contract or a related document, policy, or agreement that can be given effect without the voided provision.

(d) DISCLOSURE OF INFORMATION- This subsection does not require a party to an agricultural contract to disclose information in the agricultural contract to any other person.

SEC. 125. PRODUCTION CONTRACT LIENS.

(a) DEFINITION OF LIEN STARTING DATE- In this section, the term `lien starting date' means--

(1) in the case of an annual crop, the date on which the annual crop is planted;

(2) in the case of a perennial crop, the starting date on which the perennial crop is subject to a production contract;

(3) in the case of livestock, the date on which the livestock arrive at the contract livestock facility; and

(4) in the case of milk or any other product of live livestock, the date on which the milk or other product is produced.

(b) LIENS- In the case of a production contract that provides for producing an agricultural commodity by a contract producer, the contract producer shall have a lien in the amount owed to the contract producer under the production contract on--

(1)(A) the agricultural commodity until the agricultural commodity is sold or processed (including slaughtered) by the contractor; and

(B) the cash proceeds of the sale of the agricultural commodity, including any cash provided as part of the sale; and

(2) any property of the contractor that may be subject to a security interest as provided in applicable State law provisions based on Article 9 of the Uniform Commercial Code.

(c) LIEN PERIOD- A lien for the production of an agricultural commodity under this section shall apply during the period--

(1) beginning on the lien starting date; and

(2) ending 1 year after the agricultural commodity is no longer under the control of the contract producer.

(d) CENTRAL FILING SYSTEM- The Secretary shall establish a central filing system for the purposes of perfecting liens under this section and providing notice of the liens to the public.

(e) PERFECTING LIENS- To perfect a lien for the production of an agricultural commodity under this section, a contract producer shall--

(1) not later than 45 days after the lien starting date, file with the Secretary a lien statement on a form prescribed by the Secretary that includes--

(A) an estimate of the amount owed under the production contract;

(B) the lien starting date;

(C) the estimated duration of the period during which the agricultural commodity will be under the control of the contract producer;

(D) the name of the party to the production contract whose agricultural commodity is produced under the production contract;

(E) a description of the location of the contract operation, by State, county, and township; and

(F) the printed name and signature of the person filing the form; and

(2) pay a filing fee in an amount determined by the Secretary, not to exceed $10.00.

(f) PRIORITY OF LIEN- A lien created under this section shall be superior to, and have priority over, any conflicting lien or security interest in the agricultural commodity, including a lien or security interest that was perfected prior to the creation of the lien under this section.

(g) ENFORCEMENT-

(1) CONTROL- Before an agricultural commodity leaves the control of a contract producer, the contract producer may foreclose a lien created under this section in the manner provided for the foreclosure of a secured transaction under applicable State law provisions based on Article 9 of the Uniform Commercial Code.

(2) POST-CONTROL- After an agricultural commodity leaves the control of the contract producer, the contract producer may enforce the lien in the manner provided under applicable State law provisions based on Article 9 of the Uniform Commercial Code.

(h) ELECTION OF OTHER REMEDIES- In lieu of obtaining a lien under this section, a contract producer described in subsection (b) may seek to collect funds due under a production contract in accordance with--

(1) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.); or

(2) the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a et seq.).

SEC. 126. PRODUCTION CONTRACTS INVOLVING INVESTMENT REQUIREMENTS.

(a) APPLICABILITY- This section applies only to a production contract between a contract producer and a contractor if the production contract requires the contract producer, together with any other production contract between the same parties, to make a capital investment of $100,000 or more.

(b) RESTRICTIONS ON CONTRACT TERMINATION- Except as provided in subsection (d), a contractor shall not terminate or fail to renew a production contract until the contractor--

(1) provides the contract producer with written notice of the intention of the contractor to terminate or not renew the production contract at least 90 days before the effective date of the termination or nonrenewal; and

(2) reimburses the contract producer for damages (based on the value of the remaining useful life

(c) BREACH OF INVESTMENT REQUIREMENTS-

(1) IN GENERAL- Except as provided in subsection (d), a contractor shall not terminate or fail to renew a production contract with a contract producer that materially breaches a production contract, including the investment requirements of a production contract, until--

(A) the contractor provides the contract producer with a written notice of termination or nonrenewal, including a list of complaints alleging causes for the breach, at least 45 days before the effective date of the termination or nonrenewal; and

(B) the contract producer fails to remedy each cause of the breach alleged in the list of complaints provided in the notice not later than 30 days after receipt of the notice.

(2) CIVIL ACTIONS- An effort by a contract producer to remedy a cause of an alleged breach shall not be considered to be an admission of a breach in a civil action.

(d) EXCEPTIONS- A contractor may terminate or decline to renew a production contract in accordance with applicable law without notice or remedy as required in subsections (b) and (c) if the basis for the termination or nonrenewal is--

(1) a voluntary abandonment of the contractual relationship by the contract producer, such as a complete failure of the performance of a contract producer under the production contract; or

(2) the conviction of a contract producer of an offense of fraud or theft committed against the contractor.

(e) PENALTY- If a contractor terminates or fails to renew a production contract other than as provided in this section, the contractor shall pay the contract producer the value of the remaining useful life of the structures, machinery, equipment, or other capital investment items.

SEC. 127. PRODUCER RIGHTS.

(a) IN GENERAL- It shall be unlawful, in or in connection with any transaction in interstate or foreign commerce, for any covered person or contractor to take an action to coerce, intimidate, disadvantage, retaliate against, or discriminate against any producer because the producer exercises, or attempts to exercise, the right of the producer--

(1)(A) to enter into a membership agreement or marketing contract with an agricultural cooperative, a processor, or another producer; and

(B) to exercise contractual rights under the membership agreement or marketing contract;

(2) to lawfully provide statements or information to the Secretary, a Federal or State law enforcement agency, or any other entity or person regarding improper actions or violations of law by a covered person or contractor under this subtitle, unless the statements or information are determined to be libelous or slanderous under applicable State law;

(3) to cancel a production contract in accordance with section 123;

(4) to disclose the terms of an agricultural contract under section 124;

(5) to file, continue, terminate, or enforce a lien under section 125; and

(6) to enforce other protections provided by this subtitle or other Federal or State law (including regulations).

(b) WAIVERS- Any provision of an agricultural contract that waives a producer right described in subsection (a), or an obligation of a covered person or contractor established by this subtitle, shall be void and unenforceable.

(c) VIOLATIONS- Section 111(b) shall apply to a violation of this section.

SEC. 128. MEDIATION.

(a) MEDIATION-

(1) IN GENERAL- An agricultural contract shall provide for resolution of disputes concerning the agricultural contract by mediation.

(2) MEDIATION BY SECRETARY OR STATE MEDIATION SERVICE- If there is a dispute involving an agricultural contract, either party to the agricultural contract may make a written request to the Secretary for mediation services by the Secretary or by a designated State mediation service to facilitate resolution of the dispute.

(3) HEARING- The parties to the agricultural contract shall receive a release from the mediation services described in paragraph (2) before the dispute may be heard by a court.

(b) NO ARBITRATION OF FUTURE CONTROVERSY- A provision in an agricultural contract submitting to arbitration a future controversy arising between a producer and a covered person or contractor shall be void.

SEC. 131. AGRICULTURAL FAIR PRACTICES.

The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) is amended to read as follows:

`SECTION 1. SHORT TITLE.

`This Act may be cited as the `Agricultural Fair Practices Act of 1967'.

`SEC. 2. FINDINGS AND PURPOSE.

`(a) FINDINGS- Congress finds that--

`(1) agricultural products are produced in the United States by many individual farmers and ranchers scattered throughout the various States of the United States;

`(2) agricultural products in fresh or processed form move in large part in the channels of interstate and foreign commerce, and agricultural products that do not move in the channels directly burden or affect interstate commerce;

`(3) the efficient production and marketing of agricultural products by farmers and ranchers is of vital concern to the welfare of farmers and ranchers and to the general economy of the United States;

`(4) because agricultural products are produced by numerous individual farmers and ranchers, the

`(5) interference with the right described in paragraph (4) is contrary to the public interest and adversely affects the free and orderly flow of goods in interstate and foreign commerce.

`(b) PURPOSE- The purpose of this Act is to establish standards of fair practices required of handlers for dealings in agricultural products.

`SEC. 3. DEFINITIONS.

`In this Act:

`(1) ACCREDITED ASSOCIATION- The term `accredited association' means an association of producers accredited by the Secretary in accordance with section 6.

`(2) ASSOCIATION OF PRODUCERS-

`(A) IN GENERAL- The term `association of producers' means an association of producers of agricultural products that engages in the marketing of agricultural products or of agricultural services described in paragraph (6)(B).

`(B) INCLUSIONS- The term `association of producers' includes--

`(i) a cooperative association (as defined in section 15(a) of the Agricultural Marketing Act (12 U.S.C. 1141j(a)); and

`(ii) an association described in the first section of the Act entitled `An Act to authorize association of producers of agricultural products' (commonly known as the `Capper-Volstead Act') (7 U.S.C. 291).

`(3) BARGAIN; BARGAINING- The terms `bargain' and `bargaining' refers to the performance of the mutual obligation of a handler and an accredited association to meet at reasonable times and for reasonable periods of time for the purpose of negotiating in good faith with respect to the price, terms of sale, compensation for products produced or services rendered under contract, or other provisions relating to the products marketed, or the services rendered, by the members of the accredited association or by the accredited association as agent for the members.

`(4) DESIGNATED HANDLER- The term `designated handler' means a handler that is designated in accordance with section 6.

`(5) HANDLER-

`(A) IN GENERAL- The term `handler' means any person engaged in the business or practice of--

`(i) acquiring agricultural products from producers or associations of producers for processing or sale;

`(ii) grading, packaging, handling, storing, or processing agricultural products received from producers or associations of producers;

`(iii) contracting or negotiating contracts or other arrangements, written or oral, with or on behalf of producers or associations of producers with respect to the production or marketing of any agricultural product; or

`(iv) acting as an agent or broker for a handler in the performance of any function or act described in clause (i), (ii), or (iii).

`(B) EXCLUSIONS- The term `handler' does not include--

`(i) any person (other than an agricultural cooperative) engaged in a business or practice described in subparagraph (A) if the gross revenue derived by the person from the business or activity is less than $10,000,000 per year; or

`(ii) any agricultural cooperative engaged in a business or practice described in subparagraph (A) if the gross revenue derived by the person from the business or activity is less than $1,000,000 per year.

`(6) PRODUCER-

`(A) IN GENERAL- The term `producer' means a person engaged in the production of agricultural products as a farmer, planter, rancher, dairyman, poultryman, or fruit, vegetable, or nut grower.

`(B) INCLUSIONS- The term `producer' includes a person that contributes labor, production management, facilities, or other services for the production of an agricultural product.

`(7) PERSON- The term `person' includes an individual, partnership, corporation, and association.

`(8) SECRETARY- The term `Secretary' means the Secretary of Agriculture.

`SEC. 4. PROHIBITED PRACTICES.

`It shall be unlawful for any handler knowingly to, or knowingly to permit any employee or agent to--

`(1) interfere with, restrain, or coerce any producer in the exercise of the right of the producer to join and belong to, or to refrain from joining or belonging to, an association of producers, or to refuse to deal with any producer because of the exercise of the right of the producer to join and belong to the association;

`(2) discriminate against any producer with respect to price, quantity, quality, or other terms of purchase, acquisition, or other handling of an agricultural product because of the membership of the producer in, or the contract of the producer with, an association of producers;

`(3) coerce or intimidate any producer to enter into, maintain, breach, cancel, or terminate a membership agreement or marketing contract with an association of producers or a contract with a handler;

`(4) pay or loan money, give any thing of value, or offer any other inducement or reward to a producer for refusing to or ceasing to belong to an association of producers;

`(5) make false reports about the finances, management, or activities of an association of producers or handlers;

`(6) conspire, combine, agree, or arrange with any other person to do, or aid or abet the performance of, any act made unlawful by this Act;

`(7) refuse to bargain in good faith with an accredited association, if the handler is a designated handler; or

`(8) dominate or interfere with the formation or administration of any association of producers or to contribute financial or other support to an association of producers.

`SEC. 5. BARGAINING IN GOOD FAITH.

`(a) CLARIFICATION OF OBLIGATION-

`(1) IN GENERAL- The obligation of a designated handler to bargain in good faith shall apply with respect to an accredited association and the products or services for which the accredited association is accredited to bargain.

`(2) AGREEMENTS OR CONCESSIONS- The good faith bargaining required between a handler and an accredited association shall not require either party to agree to a proposal or to make a concession.

`(b) EXTENSION OF SAME TERMS TO ACCREDITED ASSOCIATION-

`(1) IN GENERAL- If a designated handler purchases a product or service from producers under terms more favorable to the producers than the terms negotiated with an accredited association for the same type of product or service, the handler shall offer the same terms to the accredited association.

`(2) VIOLATIONS- Failure to extend the same terms to the accredited association shall be considered to be a violation of section 4(g).

`(3) FACTORS- In comparing terms, the Secretary shall consider--

`(A) the stipulated purchase price;

`(B) any bonuses, premiums, hauling, or loading allowances;

`(C) reimbursement of expenses;

`(D) payment for special services of any character that may be paid by the handler; and

`(E) any amounts paid or agreed to be paid by the handler for any designated purpose other than payment of the purchase price.

`(c) MEDIATION- The Secretary may provide mediation services with respect to bargaining between an accredited association and a designated handler at the request of the accredited association or designated handler.

`SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF HANDLERS.

`(a) ACCREDITATION PETITION-

`(1) IN GENERAL- An association of producers seeking accreditation to bargain on behalf of producers of an agricultural product or service shall submit to the Secretary a petition for accreditation.

`(2) CONTENT- The petition shall--

`(A) specify each agricultural product or service for which the association seeks accreditation to bargain on behalf of producers;

`(B) designate the handlers, individually, by production or marketing area, or by some other appropriate general classification, with whom the association seeks to be accredited to bargain; and

`(C) contain such other information and documents as may be required by the Secretary.

`(b) NOTICE OF PETITION; PROCEEDINGS-

`(1) IN GENERAL- On receiving a petition under subsection (a) and any supporting material, the Secretary shall provide notice of the petition to all handlers designated in the petition under subsection (a)(2)(B).

`(2) INDIVIDUAL HANDLERS- The Secretary shall provide personal notice under this subsection to a handler that has been designated individually.

`(3) GENERAL CLASSIFICATIONS- The Secretary shall provide notice through the Federal Register to handlers that have been designated by production or marketing area or by some other general classification.

`(4) OPPORTUNITY TO RESPOND- The association of producers seeking accreditation and the handlers shall have an opportunity to submit written evidence, views, and arguments to the Secretary.

`(5) PROCEEDINGS-

`(A) IN GENERAL- Except as provided in subparagraph (B), the Secretary may conduct an informal proceeding on the petition.

`(B) FORMAL HEARINGS- The Secretary shall hold a formal hearing for the reception of testimony and evidence if the Secretary finds that there are substantial unresolved issues of material fact.

`(c) ISSUANCE OF ACCREDITATION ORDER- On the petition of an association of producers, the Secretary may issue an order designating the association of producers as an accredited association for the purposes of this Act if the Secretary determines that--

`(1) under the charter documents or bylaws of the association, the accredited association is owned and controlled by producers;

`(2) the association has contracts, binding under State law, with the members of the association empowering the association to sell or negotiate terms of sale of the products or services of the members;

`(3) the association represents a sufficient number of producers, or the members of the association produce a sufficient quantity of agricultural products or render a sufficient level of services, to enable the association to function as an effective agent for producers in bargaining with designated handlers;

`(4) the functions of the association include acting as principal or agent for the members of the association in negotiations with handlers for prices and other terms of trade with respect to the production, sale, and marketing of products or services of the members; and

`(5) the association is acting in good faith with respect to the members of the association and is complying with this Act.

`(d) NOTIFICATION OF ACCREDITATION ORDER-

`(1) IN GENERAL- The Secretary shall notify the petitioning association of producers, and each handler to be designated as part of the petition, of the decision of the Secretary regarding the petition and provide a concise statement of the basis for the decision.

`(2) OTHER ASSOCIATIONS- The Secretary shall provide notice of an accreditation of an association to all other associations that have been accredited to bargain with respect to the product or service with any of the designated handlers of the association.

`(e) ANNUAL REPORT- Each accredited association shall submit to the Secretary an annual report in such form and including such information as the Secretary by regulation may require to enable the Secretary to determine whether the association is meeting the standards for accreditation.

`(f) LOSS OF ACCREDITATION-

`(1) IN GENERAL- If the Secretary determines that an accredited association has ceased to meet the standards for accreditation under subsection (c), the Secretary shall--

`(A) notify the association of the manner in which the association is deficient in maintaining the standards for accreditation; and

`(B) allow the association a reasonable period of time to answer or correct the deficiencies.

`(2) HEARING- After providing notice and a corrective period in accordance with paragraph (1), if the Secretary is not satisfied that the association is in compliance with subsection (c), the Secretary shall--

`(A) notify the association of the continued deficiencies; and

`(B) hold a hearing to consider the revocation of accreditation.

`(3) REVOCATION- If, based on the evidence submitted at the hearing, the Secretary finds that the association has ceased to maintain the standards for accreditation, the Secretary shall revoke the accreditation of the association.

`(g) AMENDMENT-

`(1) IN GENERAL- At the option of the Secretary or on the petition of an accredited association or a designated handler, the Secretary may amend an accreditation order with respect to the product or service specified in the accreditation order.

`(2) NOTICE- The Secretary shall provide--

`(A) notice of any proposed amendment and the reasons for the amendment to all accredited associations and handlers that would be directly affected by the amendment; and

`(B) an opportunity for a public hearing.

`(3) AUTHORITY- After providing notice and an opportunity for a hearing in accordance with paragraph (2), the Secretary may amend the accreditation order if the Secretary finds that the amendment will be conducive to more effective bargaining and orderly marketing by the accredited association of the product or services of the members of the accredited association.

`SEC. 7. ASSIGNMENT OF ASSOCIATION DUES AND FEES.

`(a) IN GENERAL- A producer of an agricultural product or service may execute, as a clause in a sales contract or in another written instrument, an assignment of dues or fees to, or the deduction of a sum to be retained by, an association of producers authorized by contract to represent the producer, under which assignment a handler shall--

`(1) deduct a portion of the amount to be paid for products or services of the producer under a growing contract; and

`(2) pay, on behalf of the producer, the portion over to the association as dues or fees or a sum to be retained by the association.

`(b) DUTY OF HANDLER- After a handler receives notice from a producer of an assignment under subsection (a), the handler shall--

`(1) deduct the amount authorized by the assignment from the amount paid for any agricultural product sold by the producer or for any service rendered under any growing contract; and

`(2) on payment to producers for the product or service, pay the amount over to the association or the assignee of the association.

`SEC. 8. POWERS OF SECRETARY.

`(a) RECORDS AND INFORMATION-

`(1) MAINTENANCE- The Secretary may require any person covered by this Act to establish and maintain such records, make such reports, and provide such other information as the Secretary may reasonably require to carry out this Act.

`(2) ACCESS- The Secretary and any officer or employee of the Department of Agriculture, on

`(A) shall have a right of entry to, on, or through any premises in which records required to be maintained under paragraph (1) are located; and

`(B) may at reasonable times have access to and copy any records that any person is required to maintain or that relate to any matter under this Act under investigation or in question.

`(b) COMPLAINTS- If the Secretary has reason to believe (whether through investigation or petition by any person) that any person has violated this Act, the Secretary shall cause a complaint to be served on the person--

`(1) stating the reasons for the alleged violation of this Act; and

`(2) requiring the person to attend and testify at a hearing to be held not earlier than 30 days after the date of service of the complaint.

`(c) HEARING-

`(1) IN GENERAL- The Secretary may hold hearings, sign and issue subpoenas, administer oaths, examine witnesses, receive evidence, and require the attendance and testimony of witnesses and the production of such accounts, records, and memoranda, as the Secretary considers necessary to determine whether a violation of this Act has occurred.

`(2) RIGHT TO HEARING- A person may request a hearing if the person is subject to a penalty under this Act.

`(3) RESPONDENTS' RIGHTS- During a hearing, the person complained of shall be given, in accordance with regulations promulgated by the Secretary, the opportunity--

`(A) to be informed of the evidence against the person;

`(B) to cross-examine witnesses; and

`(C) to present evidence.

`(4) HEARING LIMITATION- The issues at any hearing held or requested under this section shall be limited in scope to matters directly related to the purpose for which the hearing was held or requested.

`(d) REPORT OF FINDING AND PENALTIES-

`(1) IN GENERAL- If, after a hearing, the Secretary finds that a person has violated this Act, the Secretary shall make, and provide to the person, a written report that states the findings of fact and includes an order requiring the person to cease and desist from committing the violation.

`(2) CIVIL PENALTY- The Secretary may assess a civil penalty not to exceed $100,000 for each violation of this Act.

`(e) INJUNCTIONS; FINALITY AND APPEALABILITY OF AN ORDER-

`(1) INJUNCTIONS- At any time after a complaint is served on a person under subsection (b), the court, on application of the Secretary, may issue an injunction, restraining to the extent the court determines to be appropriate, the person and the officers, directors, agents, and employees of the person from violating this Act.

`(2) APPEALABILITY OF AN ORDER- An order issued under this section shall be final and conclusive unless, within 30 days after service of the order, the affected handler petitions to appeal the order to the United States court of appeals for the circuit in which the handler resides or has its principal place of business or the United States Court of Appeals for the District of Columbia Circuit.

`(3) DELIVERY OF PETITION-

`(A) IN GENERAL- The clerk of the court shall immediately cause a copy of any petition filed under paragraph (2) to be delivered to the Secretary.

`(B) RECORD- On receipt of the petition, the Secretary shall file in the court the record of the proceedings under this section.

`(4) PENALTY FOR FAILURE TO OBEY AN ORDER-

`(A) IN GENERAL- Any person that fails to obey an order of the Secretary issued under this section after the order becomes final shall be fined not less than $5,000 and not more than $100,000 for each offense.

`(B) SEPARATE OFFENSES- Each day during which the failure continues shall be considered to be a separate offense.

`SEC. 9. ENFORCEMENT.

`(a) CIVIL ACTIONS BY AGGRIEVED PERSONS-

`(1) PREVENTIVE RELIEF- Whenever any handler has engaged or there are reasonable grounds to believe that any handler is about to engage in any act or practice prohibited by this Act, a civil action for preventive relief, including an application for a permanent or temporary injunction, restraining order, or other order, may be instituted by the person aggrieved.

`(2) ATTORNEY'S FEES- In any action commenced under paragraph (1), the court may allow the prevailing party a reasonable attorney's fee as part of the costs.

`(3) SECURITY- The court may provide that no restraining order or preliminary injunction shall issue unless security is provided by the applicant, in such sum as the court determines to be appropriate, for the payment of such costs and damages as may be incurred or suffered by any party that is found to have been wrongfully enjoined or restrained.

`(b) CIVIL ACTIONS BY INJURED PERSONS-

`(1) IN GENERAL- Any person injured in the business or property of the person by reason of any violation of, or combination or conspiracy to violate, this Act may--

`(A) sue for the violation in the appropriate United States district court without respect to the amount in controversy; and

`(B) recover damages sustained.

`(2) ATTORNEY'S FEES- In any action commenced under paragraph (1), the court may allow the prevailing party a reasonable attorney's fee as part of the costs.

`(3) LIMITATION ON ACTIONS- Any action to enforce any cause of action under this subsection shall be barred unless commenced within 2 years after the cause of action occurred.

`(c) JURISDICTION OF DISTRICT COURTS-

`(1) IN GENERAL- A United States district court shall have jurisdiction over an action brought under this section.

`(2) LIMITATIONS- No action may be commenced under subsection (a) or (b)--

`(A) prior to 60 days after the plaintiff has given notice of the alleged violation to the Secretary through a petition under section 8(b); or

`(B) if the Secretary has commenced and is diligently prosecuting an action (administrative or judicial) dealing with the same violation to require compliance with the Act.

`(d) JUDICIAL REVIEW- An order of the Secretary with respect to which review could have been obtained under section 8(e)(2) shall not be subject to judicial review in any proceeding for enforcement under this section.

`SEC. 10. PREEMPTION.

`(a) IN GENERAL- Except as expressly provided in this Act, this Act does not invalidate the provisions of any State law dealing with the same subject as this Act.

`(b) STATE COURTS- This Act shall not deprive a State court of jurisdiction under a State law dealing with the same subject as this Act.'.

SEC. 141. RELATIONSHIP TO STATE LAW.

(a) IN GENERAL- Except as expressly provided in this title, this title does not invalidate any provision of State law dealing with the same subject as this title.

(b) STATE COURTS- This title does not deprive a State court of jurisdiction under a State law dealing with the same subject as this title.

SEC. 142. REGULATIONS.

The Secretary shall promulgate such regulations as are appropriate to carry out this title and the amendments made by this title.

SEC. 143. IMPLEMENTATION PLAN.

Not later than 180 days after the date of enactment of this Act, the Secretary and the Attorney General shall develop and implement a plan to enable the Secretary, where appropriate, to file civil actions, including temporary injunctions, to enforce orders issued by the Secretary under this title and the Agricultural Fair Practices Act of 1967 (as amended by section 131).

SEC. 144. EFFECTIVE DATE.

(a) IN GENERAL- Except as provided in subsection (b), this title and the amendments made by this title take effect on the date of enactment of this Act.

(b) AGRICULTURAL CONTRACTS-

(1) IN GENERAL- Except as provided in paragraph (2), subtitle C applies to an agricultural contract in force on or after the date of enactment of this Act, regardless of the date on which the agricultural contract is executed.

(2) EXCEPTIONS- Sections 122, 123, 126, 127(a)(5), and 128(a) shall apply only to an agricultural contract that is executed or substantively amended after the date of enactment of this Act.

SEC. 201. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND.

The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding at the end the following:

`SEC. 391A. SHORT TITLE.

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

`SEC. 391B. PURPOSE.

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

`SEC. 391C. DEFINITIONS.

`In this subtitle:

`(1) AUTHORIZED PRIVATE INVESTOR- The term `authorized private investor' means an individual, legal entity, or affiliate or subsidiary of an individual or legal entity that--

`(A) is eligible to receive a loan guarantee under this title;

`(B) is eligible to receive a loan guarantee under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.);

`(C) is created under the National Consumer Cooperative Bank Act (12 U.S.C. 3011 et seq.);

`(D) is an insured depository institution; or

`(E) is determined by the Fund to be an appropriate investor in the Fund.

`(2) BOARD- The term `Board' means the board of directors of the Fund established under section 391G.

`(3) FUND- The term `Fund' means the National Rural Cooperative and Business Equity Fund established under section 391D.

`(4) GROUP OF SIMILAR INVESTORS- The term `group of similar investors' means any 1 of the following:

`(A) Insured depository institutions with total assets of more than $250,000,000.

`(B) Insured depository institutions with total assets equal to or less than $250,000,000.

`(C) Farm Credit System institutions under the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.).

`(D) Cooperative financial institutions (other than Farm Credit System institutions).

`(E) Authorized private investors, other than those described in subparagraphs (A) through (D).

`(F) Other nonprofit organizations, including credit unions.

`(5) INSURED DEPOSITORY INSTITUTION- The term `insured depository institution' means any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.).

`(6) RURAL AREA- The term `rural area' means an area that is located--

`(A) outside a standard metropolitan statistical area; or

`(B) within a community that has a population of 50,000 individuals or fewer.

`(7) RURAL BUSINESS- The term `rural business' means a rural cooperative, a value-added agricultural enterprise, or any other business located or locating in a rural area.

`SEC. 391D. ESTABLISHMENT OF THE FUND.

`(a) IN GENERAL-

`(1) AUTHORITY TO ESTABLISH- A group of authorized private investors may establish, as a non-Federal entity under State law, and manage a fund to be known as the `National Rural Cooperative and Business Equity Fund', to raise and provide equity capital to rural businesses.

`(2) COMPOSITION OF GROUP- The group of authorized private investors referred to in paragraph (1) shall be composed, to the maximum extent practicable, of representatives of a majority of groups of similar investors.

`(b) PURPOSES- The purposes of the Fund shall be--

`(1) to strengthen the economy of rural areas;

`(2) to further sustainable rural business development;

`(3) to encourage start-up rural businesses, increased opportunities for small and minority-owned rural businesses, and the formation of new rural businesses;

`(4) to enhance rural employment opportunities;

`(5) to provide equity capital to rural businesses that have been unable to obtain equity capital; and

`(6) to leverage non-Federal funds for rural businesses.

`(c) ARTICLES OF INCORPORATION AND BY-LAWS- The articles of incorporation and by-laws of the Fund shall set forth purposes of the Fund that are consistent with subsection (b).

`SEC. 391E. INVESTMENT IN THE FUND.

`(a) IN GENERAL- The Secretary, using funds of the Commodity Credit Corporation, shall--

`(1) subject to subsection (b)(1), make available to the Fund $50,000,000 for each of fiscal years 2001 through 2003;

`(2) subject to subsection (c), guarantee 50 percent of each investment made by an authorized private investor in the Fund; and

`(3) subject to subsection (d), guarantee the repay