Subtitle A--Short Title, Purpose, and Definitions
Sec. 101. Short title and purpose.
Sec. 102. Definitions.
Subtitle B--Production Flexibility Contracts
Sec. 111. Authorization for use of production flexibility
contracts.
Sec. 112. Elements of contracts.
Sec. 113. Amounts available for contract payments.
Sec. 114. Determination of contract payments under
contracts.
Sec. 115. Payment limitations.
Sec. 116. Violations of contract.
Sec. 117. Transfer or change of interest in lands
subject to contract.
Sec. 118. Planting flexibility.
Subtitle
C--Nonrecourse Marketing Assistance Loans
and Loan Deficiency Payments
Sec. 131. Availability of nonrecourse marketing assistance
loans.
Sec. 132. Loan rates for marketing assistance loans.
Sec. 133. Term of loans.
Sec. 134. Repayment of loans.
Sec. 135. Loan deficiency payments.
Sec. 136. Special marketing loan provisions for
upland cotton.
Sec. 137. Availability of recourse loans for high
moisture feed grains
and seed
cotton.
Chapter 1--Dairy
Sec. 141. Milk price support program.
Sec. 142. Recourse loan program for commercial processors
of dairy
products.
Sec. 143. Consolidation and reform of Federal milk
marketing orders.
Sec. 144. Effect on fluid milk standards in State
of California.
Sec. 145. Milk manufacturing marketing adjustment.
Sec. 146. Promotion.
Sec. 147. Northeast Interstate Dairy Compact.
Sec. 148. Dairy export incentive program.
Sec. 149. Authority to assist in establishment and
maintenance of one or
more export
trading companies.
Sec. 150. Standby authority to indicate entity best
suited to provide
international
market development and export services.
Sec. 151. Study and report regarding potential impact
of Uruguay Round
on prices,
income, and Government purchases.
Sec. 152. Promotion of United States dairy products
in international
markets
through dairy promotion program.
Chapter 2--Peanuts and Sugar
Sec. 155. Peanut program.
Sec. 156. Sugar program.
Sec. 161. Administration.
Sec. 162. Adjustments of loans.
Sec. 163. Commodity Credit Corporation interest
rate.
Sec. 164. Personal liability of producers for deficiencies.
Sec. 165. Commodity Credit Corporation sales price
restrictions.
Subtitle F--Permanent Price Support Authority
Sec. 171. Suspension and repeal of permanent price
support authority.
Sec. 172. Effect of amendments.
Subtitle G--Commission on 21st Century Production Agriculture
Sec. 181. Establishment.
Sec. 182. Composition.
Sec. 183. Comprehensive review of past and future
of production
agriculture.
Sec. 184. Reports.
Sec. 185. Powers.
Sec. 186. Commission procedures.
Sec. 187. Personnel matters.
Sec. 188. Termination of Commission.
Subtitle H--Miscellaneous Commodity Provisions
Sec. 191. Options pilot program.
Sec. 192. Risk management education.
Sec. 193. Crop insurance.
Sec. 194. Establishment of Office of Risk Management.
Sec. 195. Revenue insurance.
Sec. 196. Administration and operation of noninsured
crop assistance
program.
TITLE I--AGRICULTURAL MARKET TRANSITION ACT
Subtitle A--Short Title, Purpose, and Definitions
SEC. 101. <<NOTE: 7 USC 7201.>> SHORT TITLE AND PURPOSE.
(a) Short Title.--This title may be cited as the
``Agricultural
Market Transition Act''.
(b) Purpose.--It is the purpose of this title--
(1) to authorize the use of binding production flexibility
contracts between the United
States and agricultural producers
to support farming certainty
and flexibility while ensuring
continued compliance with
farm conservation and wetland
protection requirements;
(2) to make nonrecourse marketing assistance loans and loan
deficiency payments available
for certain crops;
(3) to improve the operation of farm programs for milk,
peanuts, and sugar; and
(4) to establish a commission to undertake a comprehensive
review of past and future
production agriculture in the United
States.
SEC. 102. <<NOTE: 7 USC 7202.>> DEFINITIONS.
In this title:
(1) Agricultural act of 1949.--Except in section 171, the
term ``Agricultural Act
of 1949'' means the Agricultural Act of
1949 (7 U.S.C. 1421 et seq.),
as in effect prior to the
suspensions under section
171(b)(1).
(2) Considered planted.--The term ``considered planted''
means acreage that is considered
planted under title V of the
Agricultural Act of 1949
(7 U.S.C. 1461 et seq.) and such other
acreage as the Secretary
considers fair and equitable.
(3) Contract.--The terms ``contract'' and ``production
flexibility contract'' mean
a production flexibility contract
entered into under section
111.
(4) Contract acreage.--The term ``contract acreage'' means 1
or more crop acreage bases
established for contract commodities
under title V of the Agricultural
Act of 1949 (7 U.S.C. 1461 et
seq.) that would have been
in effect for the 1996 crop (but for
suspension under section
171(b)(1)).
(5) Contract commodity.--The term ``contract commodity''
means wheat, corn, grain
sorghum, barley, oats, upland cotton,
and rice.
(6) Contract payment.--The term ``contract payment'' means a
payment made under this
subtitle pursuant to a contract.
(7) Department.--The term ``Department'' means the
Department of Agriculture.
(8) Extra long staple cotton.--The term ``extra long staple
cotton'' means cotton that--
(A) is produced from pure strain varieties of the
Barbadense species or any hybrid thereof, or other
similar types of extra long staple cotton, designated by
the Secretary, having characteristics needed for various
end uses for which United States upland cotton is not
suitable and grown in irrigated cotton-growing regions
of the United States designated by the Secretary or
other areas designated by the Secretary as suitable for
the production of the varieties or types; and
(B) is ginned on a roller-type gin or, if authorized
by the Secretary, ginned on another type gin for
experimental purposes.
(9) Farm program payment yield.--The term ``farm program
payment yield'' means the
farm program payment yield established
for the 1995 crop of a contract
commodity under section 505 of
the Agricultural Act of
1949 (7 U.S.C. 1465). The Secretary
shall adjust the farm program
payment yield for the 1995 crop of
a contract commodity to
account for any additional yield
payments made with respect
to that crop under subsection (b)(2)
of the section.
(10) Loan commodity.--The term ``loan commodity'' means each
contract commodity, extra
long staple cotton, and oilseed.
(11) Oilseed.--The term ``oilseed'' means a crop of
soybeans, sunflower seed,
rapeseed, canola, safflower, flaxseed,
mustard seed, or, if designated
by the Secretary, other
oilseeds.
(12) Producer.--The term ``producer'' means an owner,
operator, landlord, tenant,
or sharecropper who shares in the
risk of producing a crop
and who 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.
(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) United states.--The term ``United States'', when used
in a geographical sense,
means all of the States.
Subtitle B--Production Flexibility Contracts
SEC. 111. <<NOTE: 7 USC 7211.>> AUTHORIZATION
FOR USE OF PRODUCTION
FLEXIBILITY CONTRACTS.
(a) Offer and Terms.--The Secretary shall offer to
enter into a
production flexibility contract with an eligible owner or producer
described in subsection (b) on a farm containing eligible cropland.
Under the terms of a contract, the owner or producer shall agree, in
exchange for annual contract payments, to--
(1) 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.);
(2) comply with applicable wetland protection requirements
under subtitle C of title
XII of the Act (16 U.S.C. 3821 et
seq.);
(3) comply with the planting flexibility requirements of
section 118; and
(4) use the land subject to the contract for an agricultural
or related activity, but
not for a nonagricultural commercial or
industrial use, as determined
by the Secretary.
(b) Eligible Owners and Producers Described.--The
following
producers and owners shall be eligible to enter into a contract:
(1) An owner of eligible cropland who assumes all or a part
of the risk of producing
a crop.
(2) A producer (other than an owner) on eligible cropland
with a share-rent lease
of the eligible cropland, regardless of
the length of the lease,
if the owner enters into the same
contract.
(3) A producer (other than an owner) on eligible cropland
who cash rents the eligible
cropland under a lease expiring on
or after September 30, 2002,
in which case the owner is not
required to enter into the
contract.
(4) A producer (other than an owner) on eligible cropland
who cash rents the eligible
cropland under a lease expiring
before September 30, 2002.
The owner of the eligible cropland
may also enter into the
same contract. If the producer elects to
enroll less than 100 percent
of the eligible cropland in the
contract, the consent of
the owner is required.
(5) An owner of eligible cropland who cash rents the
eligible cropland and the
lease term expires before September
30, 2002, if the tenant
declines to enter into a contract. In
the case of an owner covered
by this paragraph, contract
payments shall not begin
under a contract until the lease held by the
tenant ends.
(6) An owner or producer described in any preceding
paragraph regardless of
whether the owner or producer purchased
catastrophic risk protection
for a 1996 crop under section
508(b) of the Federal Crop
Insurance Act (7 U.S.C. 1508(b)).
(c) Tenants and Sharecroppers.--In carrying out this
subtitle, the
Secretary shall provide adequate safeguards to protect the interests
of
tenants and sharecroppers.
(d) Eligible Cropland Described.--Land shall be
considered to be
cropland eligible for coverage under a contract only if the land has
contract acreage attributable to the land and--
(1) for at least 1 of the 1991 through 1995 crops, at least
a portion of the land was
enrolled in the acreage reduction
program authorized for a
crop of a contract commodity under
section 101B, 103B, 105B,
or 107B of the Agricultural Act of
1949 or was considered planted;
(2) was subject to a conservation reserve contract under
section 1231 of the Food
Security Act of 1985 (16 U.S.C. 3831)
whose term expired, or was
voluntarily terminated, on or after
January 1, 1995; or
(3) is released from coverage under a conservation reserve
contract by the Secretary
during the period beginning on January
1, 1995, and ending on the
date specified in section 112(a)(2).
(e) Quantity of Eligible Cropland Covered by Contract.--Subject
to
subsection (b)(4), an owner or producer may enroll as contract acreage
all or a portion of the eligible cropland on the farm.
(f) Voluntary Reduction in Contract Acreage.--Subject
to subsection
(b)(4), an owner or producer who enters into a contract may subsequently
reduce the quantity of contract acreage covered by the contract.
SEC. 112. <<NOTE: 7 USC 7212.>> ELEMENTS OF CONTRACTS.
(a) Time for Contracting.--
(1) Commencement.--To the extent practicable, the Secretary
shall commence entering
into contracts not later than 45 days
after the date of enactment
of this title.
(2) Deadline.--Except as provided in paragraph (3), the
Secretary may not enter
into a contract after August 1, 1996.
(3) Conservation reserve lands.--
(A) In general.--At the beginning of each fiscal
year, the Secretary shall allow an eligible owner or
producer on a farm covered by a conservation reserve
contract entered into under section 1231 of the Food
Security Act of 1985 (16 U.S.C. 3831) that terminates
after the date specified in paragraph (2) to enter into
or expand a production flexibility contract to cover the
contract acreage of the farm that was subject to the
former conservation reserve contract.
(B) Amount.--Contract payments made for contract
acreage under this paragraph shall be made at the rate
and amount applicable to the annual contract payment
level for the applicable crop. For the fiscal year in
which the conservation reserve contract is terminated,
the owner or producer subject to the production
flexibility contract may elect to receive either contract payments or a
prorated payment under the conservation reserve
contract, but not both.
(b) Duration of Contract.--
(1) Beginning date.--The term of a contract shall begin
with--
(A) the 1996 crop of a contract commodity; or
(B) in the case of acreage that was subject to a
conservation reserve contract described in subsection
(a)(3), the date the production flexibility contract was
entered into or expanded to cover the acreage.
(2) Ending date.--The term of a contract shall extend
through the 2002 crop, unless
earlier terminated by the owner or
producer.
(c) Estimation of Contract Payments.--At the time
the Secretary
enters into a contract, the Secretary shall provide an estimate of
the
minimum contract payments anticipated to be made during at least the
first fiscal year for which contract payments will be made.
(d) Time for Payment.--
(1) In general.--An annual contract payment shall be made
not later than September
30 of each of fiscal years 1996 through
2002.
(2) Advance payments.--
(A) Fiscal year 1996.--At the option of the owner or
producer, 50 percent of the contract payment for fiscal
year 1996 shall be made not later than 30 days after the
date on which the contract is entered into and approved
by the Secretary and the owner or producer.
(B) Subsequent fiscal years.--At the option of the
owner or producer for fiscal year 1997 and each
subsequent fiscal year, 50 percent of the annual
contract payment shall be made on December 15 or January
15 of the fiscal year. The owner or producer may change
the date selected under this subparagraph for a
subsequent fiscal year by providing advance notice to
the Secretary.
SEC. 113. <<NOTE: 7 USC 7213.>> AMOUNTS AVAILABLE FOR CONTRACT PAYMENTS.
(a) Fiscal Year Amounts.--The Secretary shall, to
the maximum extent
practicable, expend the following amounts to satisfy the obligations
of
the Secretary under all contracts:
(1) For fiscal year 1996, $5,570,000,000.
(2) For fiscal year 1997, $5,385,000,000.
(3) For fiscal year 1998, $5,800,000,000.
(4) For fiscal year 1999, $5,603,000,000.
(5) For fiscal year 2000, $5,130,000,000.
(6) For fiscal year 2001, $4,130,000,000.
(7) For fiscal year 2002, $4,008,000,000.
(b) Allocation.--The amount made available for a
fiscal year under
subsection (a) shall be allocated as follows:
(1) For wheat, 26.26 percent.
(2) For corn, 46.22 percent.
(3) For grain sorghum, 5.11 percent.
(4) For barley, 2.16 percent.
(5) For oats, 0.15 percent.
(6) For upland cotton, 11.63 percent.
(7) For rice, 8.47 percent.
(c) Adjustment.--The Secretary shall adjust the amounts
allocated
for each contract commodity under subsection (b) for a particular fiscal
year by--
(1) adding an amount equal to the sum of all repayments of
deficiency payments required
under section 114(a)(2) of the
Agricultural Act of 1949
(7 U.S.C. 1445j(a)(2)) for the
commodity;
(2) adding an amount equal to the sum of all refunds of
contract payments received
during the preceding fiscal year
under section 116 for the
commodity; and
(3) subtracting an amount equal to the amount, if any,
necessary during that fiscal
year to satisfy payment
requirements for the commodity
under sections 103B, 105B, or
107B of the Agricultural
Act of 1949 for the 1994 and 1995 crop
years.
(d) Additional Rice Allocation.--In addition to the
adjustments
required under subsection (c), the amount allocated under subsection
(b)
for rice contract payments shall be increased by $8,500,000 for each
of
fiscal years 1997 through 2002.
(e) Exclusion of Certain Amounts From Contract Payments.--Any
amount
added pursuant to paragraphs (1) and (2) of subsection (c) to the amount
available under subsection (a) for a fiscal year and paid to owners
and
producers under a contract shall not be treated as a contract payment
for purposes of section 115(a) of this title or section 1001(1) of
the
Food Security Act of 1985 (7 U.S.C. 1308(1)). However, the amount of
a
payment covered by this subsection may not exceed $50,000 per person.
(f) Effect of Payment Limitation.--The amount available
under
subsection (a) for a fiscal year shall be reduced by an amount equal
to
the total amount of contract payments for the fiscal year that owners
and producers forgo as a result of operation of the payment limitation
under section 1001(1) of the Food Security Act of 1985 (7 U.S.C.
1308(1)).
SEC. 114. <<NOTE: 7 USC 7214.>> DETERMINATION
OF CONTRACT PAYMENTS UNDER
CONTRACTS.
(a) Individual Payment Quantity of Contract Commodities.--For
each
contract, the payment quantity of a contract commodity for each fiscal
year shall be equal to the product of--
(1) 85 percent of the contract acreage; and
(2) the farm program payment yield.
(b) Annual Payment Quantity of Contract Commodities.--The
payment
quantity of each contract commodity covered by all contracts for each
fiscal year shall be equal to the sum of the amounts calculated under
subsection (a) for each individual contract.
(c) Annual Payment Rate.--The payment rate for a
contract commodity
for each fiscal year shall be equal to--
(1) the amount made available under section 113 for the
contract commodity for the
fiscal year; divided by
(2) the amount determined under subsection (b) for the
fiscal year.
(d) Annual Payment Amount.--The amount to be paid
under a contract
in effect for each fiscal year with respect to all contract commodities
covered by the contract shall be equal to the sum of the products of--
(1) the payment quantity determined under subsection (a) for
each of the contract commodities
covered by the contract; and
(2) the corresponding payment rate for the contract
commodity in effect under
subsection (c).
(e) Reduction in Payment Amount.--The contract payment
determined
under subsection (d) for an owner or producer for a fiscal year shall
be
immediately reduced by the amount of any repayment of deficiency
payments that is required under section 114(a)(2) of the Agricultural
Act of 1949 (7 U.S.C. 1445j(a)(2)) and is not repaid as of the date
the
contract payment is determined. The Secretary shall be required to
collect the required repayment, or any claim based on the required
repayment, as soon as the contract payment is determined.
(f) Assignment of Contract 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 contract payments
under this section. The owner or producer making the assignment, or
the
assignee, shall provide the Secretary with notice, in such manner as
the
Secretary may require in the contract, of any assignment made under
this
subsection.
(g) Sharing of Contract Payments.--The Secretary
shall provide for
the sharing of contract payments among the owners and producers subject
to the contract on a fair and equitable basis.
SEC. 115. <<NOTE: 7 USC 7215.>> PAYMENT LIMITATIONS.
(a) Applicability of Payment Limitations.--Sections
1001 through
1001C of the Food Security Act of 1985 (7 U.S.C. 1308 through 1308-3),
as amended by this section, shall be applicable to contract payments
made under this subtitle.
(b) Payment Limitations.--Section 1001 of the Food
Security Act of
1985 (7 U.S.C. 1308) is amended by striking paragraphs (1) through
(4)
and inserting the following:
``(1) Limitation on payments under production flexibility
contracts.--The total amount
of contract payments made under the
Agricultural Market Transition
Act to a person under 1 or more
production flexibility contracts
during any fiscal year may not
exceed $40,000.
``(2) Limitation on marketing loan gains and loan deficiency
payments.--The total amount
of the payments specified in
paragraph (3) that a person
shall be entitled to receive under
the Agricultural Market
Transition Act for 1 or more contract
commodities and oilseeds
during any crop year may not exceed
$75,000.
``(3) Description of payments subject to limitation.--The
payments referred to in
paragraph (2) are the following:
``(A) Any gain realized by a producer from repaying
a marketing assistance loan under section 131 of the
Agricultural Market Transition Act for a crop of any
loan commodity at a lower level than the original loan
rate established for the loan commodity under section
132 of the Act.
``(B) Any loan deficiency payment received for a
loan commodity under section 135 of the Act.
``(4) Definitions.--In this title, the terms `contract
commodity', `contract payment',
`loan commodity', `oilseed', and
`production flexibility
contract' have the meaning given those
terms in section 102 of
the Agricultural Market Transition
Act.''.
(c) Conforming Amendments.--
(1) Section 1001A of the Food Security Act of 1985 (7 U.S.C.
1308-1) is amended--
(A) in subsection (a)(1), by striking ``under the
Agricultural Act of 1949 (7 U.S.C. 1421 et seq.)''; and
(B) in subsection (b)(1), by striking ``under the
Agricultural Act of 1949''.
(2) Section 1001C(a) of the Act (7 U.S.C. 1308-3(a)) is
amended--
(A) by striking ``For each of the 1991 through 1997
crops, any'' and inserting ``Any'';
(B) by striking ``production adjustment payments,
price support program loans, payments, or benefits made
available under the Agricultural Act of 1949 (7 U.S.C.
1421 et seq.),'' and inserting ``loans or payments made
available under the Agricultural Market Transition
Act,''; and
(C) by striking ``during the 1989 through 1997 crop
years''.
SEC. 116. <<NOTE: 7 USC 7216.>> VIOLATIONS OF CONTRACT.
(a) Termination of Contract For Violation.--Except
as provided in
subsection (b), if an owner or producer subject to a contract violates
a
requirement of the contract specified in section 111(a), the Secretary
shall terminate the contract with respect to the owner or producer
on
each farm in which the owner or producer has an interest. On the
termination, the owner or producer shall forfeit all rights to receive
future contract payments on each farm in which the owner or producer
has
an interest and shall refund to the Secretary all contract payments
received by the owner or producer during the period of the violation,
together with interest on the contract payments as determined by the
Secretary.
(b) Refund or Adjustment.--If the Secretary determines
that a
violation does not warrant termination of the contract under subsection
(a), the Secretary may require the owner or producer subject to the
contract--
(1) to refund to the Secretary that part of the contract
payments received by the
owner or producer during the period of
the violation, together
with interest on the contract payments
as determined by the Secretary;
or
(2) to accept a reduction in the amount of future contract
payments that is proportionate
to the severity of the violation,
as determined by the Secretary.
(c) Foreclosure.--
(1) Effect of foreclosure.--An owner or producer subject to
a contract may not be required
to make repayments to the
Secretary of amounts received
under the contract if the contract
acreage has been foreclosed
on and the Secretary determines that
forgiving the repayments
is appropriate to provide fair and
equitable treatment.
(2) Resumption of operation.--This subsection shall not void
the responsibilities of
the owner or producer under the contract
if the owner or producer
continues or resumes operation, or
control, of the contract
acreage. On the resumption of operation
or control over the contract
acreage by the owner
or producer, the provisions
of the contract in effect on the
date of the foreclosure
shall apply.
(d) Review.--A determination of the Secretary under
this section
shall be considered to be an adverse decision for purposes of the
availability of administrative review of the determination.
SEC. 117. <<NOTE: 7 USC 7217.>> TRANSFER OR
CHANGE OF INTEREST IN LANDS
SUBJECT TO CONTRACT.
(a) Termination.--Except as provided in subsection
(c), a transfer
of (or change in) the interest of an owner or producer subject to a
contract in the contract acreage covered by the contract shall result
in
the termination of the contract with respect to the acreage, unless
the
transferee or owner of the acreage agrees to assume all obligations
under the contract. The termination shall be effective on the date
of
the transfer or change.
(b) Modification.--At the request of the transferee
or owner, the
Secretary may modify the contract if the modifications are consistent
with the objectives of this subtitle, as determined by the Secretary.
(c) Exception.--If an owner or producer who is entitled
to a
contract payment dies, becomes incompetent, or is otherwise unable
to
receive the contract payment, the Secretary shall make the payment,
in
accordance with regulations prescribed by the Secretary.
SEC. 118. <<NOTE: 7 USC 7218.>> PLANTING FLEXIBILITY.
(a) Permitted Crops.--Subject to subsection (b),
any commodity or
crop may be planted on contract acreage on a farm.
(b) Limitations and Exceptions Regarding Fruits
and Vegetables.--
(1) Limitations.--The planting of fruits and vegetables
(other than lentils, mung
beans, and dry peas) shall be
prohibited on contract acreage.
(2) Exceptions.--Paragraph (1) shall not limit the planting
of a fruit or vegetable--
(A) in any region in which there is a history of
double-cropping of contract commodities with fruits or
vegetables, as determined by the Secretary, in which
case the double-cropping shall be permitted;
(B) on a farm that the Secretary determines has a
history of planting fruits or vegetables on contract
acreage, except that a contract payment shall be reduced
by an acre for each acre planted to the fruit or
vegetable; or
(C) by a producer who the Secretary determines has
an established planting history of a specific fruit or
vegetable, except that--
(i) the quantity planted may not exceed the
producer's average annual planting history of the
fruit or vegetable in the 1991 through 1995 crop
years (excluding any crop year in which no
plantings were made), as determined by the
Secretary; and
(ii) a contract payment shall be reduced by an
acre for each acre planted to the fruit or
vegetable.
Subtitle
C--Nonrecourse Marketing Assistance Loans
and Loan Deficiency Payments
SEC. 131. <<NOTE: 7 USC 7231.>> AVAILABILITY
OF NONRECOURSE MARKETING
ASSISTANCE LOANS.
(a) Nonrecourse Loans Available.--For each of the
1996 through 2002
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. The loans shall be made under terms
and conditions that are prescribed by the Secretary and at the loan
rate
established under section 132 for the loan commodity.
(b) Eligible Production.--The following production
shall be eligible
for a marketing assistance loan under subsection (a):
(1) In the case of a marketing assistance loan for a
contract commodity, any
production by a producer on a farm
containing eligible cropland
covered by a production flexibility
contract.
(2) In the case of a marketing assistance loan for extra
long staple cotton and oilseeds,
any production.
(c) 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.
(d) Additional Outlays Prohibited.--The Secretary
shall carry out
this subtitle in such a manner that there are no additional outlays
under this subtitle as a result of the reconstitution of a farm that
occurs as a result of the combination of another farm that does not
contain eligible cropland covered by a production flexibility contract.
SEC. 132. <<NOTE: 7 USC 7232.>> LOAN RATES FOR
MARKETING ASSISTANCE
LOANS.
(a) Wheat.--
(1) Loan rate.--Subject to paragraph (2), the loan rate for
a marketing assistance loan
under section 131 for wheat shall
be--
(A) not less than 85 percent of the simple average
price received by producers of wheat, as determined by
the Secretary, during the marketing years for the
immediately preceding 5 crops of wheat, 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
(B) not more than $2.58 per bushel.
(2) Stocks to use ratio adjustment.--If the Secretary
estimates for any marketing
year that the ratio of ending stocks
of wheat to total use for
the marketing year will be--
(A) equal to or greater than 30 percent, the
Secretary may reduce the loan rate for wheat for the
corresponding crop by an amount not to exceed 10 percent
in any year;
(B) less than 30 percent but not less than 15
percent, the Secretary may reduce the loan rate for
wheat for the corresponding crop by an amount not to exceed
5 percent in any year; or
(C) less than 15 percent, the Secretary may not
reduce the loan rate for wheat for the corresponding
crop.
(b) Feed Grains.--
(1) Loan rate for corn.--Subject to paragraph (2), the loan
rate for a marketing assistance
loan under section 131 for corn
shall be--
(A) not less than 85 percent of the simple average
price received by producers of corn, as determined by
the Secretary, during the marketing years for the
immediately preceding 5 crops of corn, 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
(B) not more than $1.89 per bushel.
(2) Stocks to use ratio adjustment.--If the Secretary
estimates for any marketing
year that the ratio of ending stocks
of corn to total use for
the marketing year will be--
(A) equal to or greater than 25 percent, the
Secretary may reduce the loan rate for corn for the
corresponding crop by an amount not to exceed 10 percent
in any year;
(B) less than 25 percent but not less than 12.5
percent, the Secretary may reduce the loan rate for corn
for the corresponding crop by an amount not to exceed 5
percent in any year; or
(C) less than 12.5 percent, the Secretary may not
reduce the loan rate for corn for the corresponding
crop.
(3) Other feed grains.--The loan rate for a marketing
assistance loan under section
131 for grain sorghum, barley, and
oats, respectively, shall
be established at such level as the
Secretary determines is
fair and reasonable in relation to the
rate that loans are made
available for corn, taking into
consideration the feeding
value of the commodity in relation to
corn.
(c) Upland Cotton.--
(1) Loan rate.--Subject to paragraph (2), the loan rate for
a marketing assistance loan
under section 131 for upland cotton
shall be established by
the Secretary at such loan rate, per
pound, as will reflect for
the base quality of upland cotton, as
determined by the Secretary,
at average locations in the United
States a rate that is not
less than the smaller of--
(A) 85 percent of the average price (weighted by
market and month) of the base quality of cotton as
quoted in the designated United States spot markets
during 3 years of the 5-year period ending July 31 of
the year preceding the year in which the crop is
planted, 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; or
(B) 90 percent of the average, for the 15-week
period beginning July 1 of the year preceding the year
in which the crop is planted, of the 5 lowest-priced
growths of the growths quoted for Middling 1\3/32\-inch
cotton C.I.F. Northern Europe (adjusted downward by the
average difference during the period April 15 through
October 15 of the year preceding the year in which the
crop is planted between the average Northern European
price quotation of such quality of cotton and the market quotations
in the designated United States spot markets for the base
quality of upland cotton), as determined by the
Secretary.
(2) Limitations.--The loan rate for a marketing assistance
loan for upland cotton shall
not be less than $0.50 per pound or
more than $0.5192 per pound.
(d) Extra Long Staple Cotton.--The loan rate for
a marketing
assistance loan under section 131 for extra long staple cotton shall
be--
(1) not less than 85 percent of the simple average price
received by producers of
extra long staple cotton, as determined
by the Secretary, during
3 years of the 5-year period ending
July 31 of the year preceding
the year in which the crop is
planted, 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 more than $0.7965 per pound.
(e) Rice.--The loan rate for a marketing assistance
loan under
section 131 for rice shall be $6.50 per hundredweight.
(f) Oilseeds.--
(1) Soybeans.--The loan rate for a marketing assistance loan
under section 131 for soybeans
shall be--
(A) not less than 85 percent of the simple average
price received by producers of soybeans, as determined
by the Secretary, during the marketing years for the
immediately preceding 5 crops of soybeans, 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
(B) not less than $4.92 or more than $5.26 per
bushel.
(2) Sunflower seed, canola, rapeseed, safflower, mustard
seed, and flaxseed.--The
loan rate for a marketing assistance
loan under section 131 for
sunflower seed, canola, rapeseed,
safflower, mustard seed,
and flaxseed, individually, shall be--
(A) not less than 85 percent of the simple average
price received by producers of sunflower seed,
individually, as determined by the Secretary, during the
marketing years for the immediately preceding 5 crops of
sunflower seed, individually, 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
(B) not less than $0.087 or more than $0.093 per
pound.
(3) Other oilseeds.--The loan rates for a marketing
assistance loan under section
131 for other oilseeds shall be
established at such level
as the Secretary determines is fair
and reasonable in relation
to the loan rate available for
soybeans, except in no event
shall the rate for the oilseeds
(other than cottonseed)
be less than the rate established for
soybeans on a per-pound
basis for the same crop.
SEC. 133. <<NOTE: 7 USC 7233.>> TERM OF LOANS.
(a) Term of Loan.--In the case of each loan commodity
(other than
upland cotton or extra long staple cotton), a marketing assistance
loan
under section 131 shall have a term of 9 months beginning
on the first day of the first month after the month in which the loan
is
made.
(b) Special Rule for Cotton.--A marketing assistance
loan for upland
cotton or extra long staple cotton shall have a term of 10 months
beginning on the first day of the month in which the loan is made.
(c) Extensions Prohibited.--The Secretary may not
extend the term of
a marketing assistance loan for any loan commodity.
SEC. 134. <<NOTE: 7 USC 7234.>> REPAYMENT OF LOANS.
(a) Repayment Rates for Wheat, Feed Grains, and Oilseeds.--The
Secretary shall permit a producer to repay a marketing assistance loan
under section 131 for wheat, corn, grain sorghum, barley, oats, and
oilseeds at a rate that is the lesser of--
(1) the loan rate established for the commodity under
section 132, plus interest
(as determined by the Secretary); or
(2) a rate that the Secretary determines will--
(A) minimize potential loan forfeitures;
(B) minimize the accumulation of stocks of the
commodity by the Federal Government;
(C) minimize the cost incurred by the Federal
Government in storing the commodity; and
(D) allow the commodity produced in the United
States to be marketed freely and competitively, both
domestically and internationally.
(b) Repayment Rates for Upland Cotton and Rice.--The
Secretary shall
permit producers to repay a marketing assistance loan under section
131
for upland cotton and rice at a rate that is the lesser of--
(1) the loan rate established for the commodity under
section 132, plus interest
(as determined by the Secretary); 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 132, plus interest
(as determined by the Secretary).
(d) <<NOTE: Regulations.>> Prevailing World
Market Price.--For
purposes of this section and section 136, the Secretary shall prescribe
by regulation--
(1) a formula to determine the prevailing world market price
for each loan commodity,
adjusted to United States quality and
location; and
(2) a mechanism by which the Secretary shall announce
periodically the prevailing
world market price for each loan
commodity.
(e) Adjustment of Prevailing World Market Price for
Upland Cotton.--
(1) In general.--During the period ending July 31, 2003, 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 132, 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.
SEC. 135. <<NOTE: 7 USC 7235.>> LOAN DEFICIENCY PAYMENTS.
(a) Availability of Loan Deficiency Payments.--Except
as provided in
subsection (d), the Secretary may make loan deficiency payments
available to producers who, although eligible to obtain a marketing
assistance loan under section 131 with respect to a loan commodity,
agree to forgo obtaining the loan for the commodity in return for
payments under this section.
(b) Computation.--A loan deficiency payment under
this section shall
be computed by multiplying--
(1) the loan payment rate determined under subsection (c)
for the loan commodity;
by
(2) the quantity of the loan commodity that the producers on
a farm are eligible to place
under loan but for which the
producers forgo obtaining
the loan in return for payments under
this section.
(c) Loan Payment Rate.--For purposes of this section,
the loan
payment rate shall be the amount by which--
(1) the loan rate established under section 132 for the loan
commodity; exceeds
(2) the rate at which a loan for the commodity may be repaid
under section 134.
(d) Exception for Extra Long Staple Cotton.--This
section shall not
apply with respect to extra long staple cotton.
SEC. 136. <<NOTE: 7 USC 7236.>> SPECIAL MARKETING
LOAN PROVISIONS FOR
UPLAND COTTON.
(a) Cotton User Marketing Certificates.--
(1) Issuance.--Subject to paragraph (4), during the period
ending July 31, 2003, the
Secretary shall issue marketing
certificates or cash payments
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 130 percent of the loan rate for upland
cotton established under section 132.
(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 4th
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 in such manner, and
at such price levels, as the Secretary determines will
best effectuate the purposes of cotton user marketing
certificates. 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. If any certificate
is not presented for redemption, marketing, or exchange
within a reasonable number of days after the issuance of
the certificate (as determined by the Secretary),
reasonable costs of storage and other carrying charges,
as determined by the Secretary, shall be deducted from
the value of the certificate for the period beginning
after the reasonable number of days and ending with the
date of the presentation of the certificate to the
Commodity Credit Corporation.
(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) Exception.--The Secretary shall not issue marketing
certificates or cash payments
under paragraph (1) if, for the
immediately preceding consecutive
10-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 this subsection, exceeds the
Northern Europe price by
more than 1.25 cents per pound.
(5) Limitation on expenditures.--Total expenditures under
this subsection shall not
exceed $701,000,000 during fiscal
years 1996 through 2002.
(b) Special Import Quota.--
(1) <<NOTE: President.>> Establishment.--The President shall
carry out an import quota
program that provides that, during the
period ending July 31, 2003,
whenever the Secretary determines
and announces that for any
consecutive 10-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 certificates
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.
(2) Quantity.--The quota shall be equal to 1 week's
consumption of upland cotton
by domestic mills at the seasonally
adjusted average rate of
the most recent 3 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.
(c) Limited Global Import Quota for Upland Cotton.--
(1) <<NOTE: President.>> 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. 137. <<NOTE: 7 USC 7237.>> 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 1996 through
2002 crops of corn and grain
sorghum, the Secretary shall make
available recourse loans,
as determined by the
Secretary, to producers
on a farm containing eligible cropland
covered by a production
flexibility contract who--
(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 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 131.
(b) Recourse Loans Available for Seed Cotton.--
(1) Upland cotton.--For each of the 1996 through 2002 crops
of upland cotton, the Secretary
shall make available recourse
seed cotton loans, as determined
by the Secretary, to producers
on a farm containing eligible
cropland covered by a production
flexibility contract.
(2) Extra long staple cotton.--For each of the 1996 through
2002 crops of 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 (as determined by the Secretary).
CHAPTER 1--DAIRY
SEC. 141. <<NOTE: 7 USC 7251.>> MILK PRICE SUPPORT PROGRAM.
(a) Support Activities.--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.--The price of milk shall be supported
at the following
rates per hundredweight for milk containing 3.67 percent butterfat:
(1) During calendar year 1996, $10.35.
(2) During calendar year 1997, $10.20.
(3) During calendar year 1998, $10.05.
(4) During calendar year 1999, $9.90.
(c) Purchase 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. 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) Refunds of 1995 and 1996 Assessments.--
(1) Refund required.--The Secretary shall provide for a
refund of the entire reduction
required under section 204(h)(2)
of the Agricultural Act
of 1949 (7 U.S.C. 1446e(h)(2)), as in
effect on the day before
the amendment made by subsection (g),
in the price of milk received
by a producer during calendar year
1995 or 1996, if the producer
provides evidence that the
producer did not increase
marketings in calendar year 1995 or
1996 when compared to calendar
year 1994 or 1995, respectively.
(2) Exception.--This subsection shall not apply with respect
to a producer for a particular
calendar year if the producer has
already received a refund
under section 204(h) of the
Agricultural Act of 1949
for the same fiscal year before the
effective date of this section.
(3) Treatment of refund.--A refund under this subsection
shall not be considered
as any type of price support or payment
for purposes of sections
1211 and 1221 of the Food Security Act
of 1985 (16 U.S.C. 3811
and 3821).
(f) Commodity Credit Corporation.--The Secretary
shall carry out the
program authorized by this section through the Commodity Credit
Corporation.
(g) <<NOTE: Effective date.>> Conforming Repeal.--Effective
on the
first day of the first month beginning after the date of enactment
of
this title, section 204 of the Agricultural Act of 1949 (7 U.S.C. 1446e)
is repealed.
(h) Period of Effectiveness.--This section (other
than subsection
(g)) shall be effective only during the period beginning on the first
day of the first month beginning after the date of enactment of this
title and ending on December 31, 1999. The program authorized by this
section shall terminate on December 31, 1999, and shall be considered
to
have expired notwithstanding section 257 of the Balanced Budget and
Emergency Deficit Control Act of 1985 (2 U.S.C. 907).
SEC. 142. <<NOTE: 7 USC 7252.>> RECOURSE LOAN
PROGRAM FOR COMMERCIAL
PROCESSORS OF DAIRY PRODUCTS.
(a) Recourse Loans Available.--Under such reasonable
terms and
conditions as the Secretary may prescribe, the Secretary shall make
recourse loans available to commercial processors of eligible dairy
products to assist the processors to manage inventories of eligible
dairy products and assure a greater degree of price stability for the
dairy industry during the year. The Secretary shall use the funds,
facilities, and authorities of the Commodity Credit Corporation to
carry
out this section.
(b) Amount of Loan.--The Secretary shall establish
the amount of a
loan for eligible dairy products, which shall reflect a milk equivalent
value of $9.90 per hundredweight of milk containing 3.67 percent
butterfat. The rate of interest charged participants under this section
shall not be less than the rate of interest charged the Commodity Credit
Corporation by the United States Treasury.
(c) Period of Loan.--The original term of a recourse
loan made under
this section may not extend beyond the end of the fiscal year in which
the loan is made. At the end of the fiscal year, the Secretary may
extend the loan for an additional period not to exceed the end of the
next fiscal year.
(d) Definition of Eligible Dairy Products.--In this
section, the
term ``eligible dairy products'' means cheddar cheese, butter, and
nonfat dry milk.
(e) Effective Date.--This section shall be effective
beginning
January 1, 2000.
SEC. 143. <<NOTE: 7 USC 7253.>> CONSOLIDATION
AND REFORM OF FEDERAL MILK
MARKETING ORDERS.
(a) Amendment of Orders.--
(1) Required consolidation.--The Secretary shall amend
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 Agreement Act of 1937,
to limit the number of Federal
milk marketing orders to not less
than 10 and not more than
14 orders.
(2) Inclusion of california as separate order.--Upon the
petition and approval of
California dairy producers in the
manner provided in section
8c of the Agricultural Adjustment Act
(7 U.S.C. 608c), reenacted
with amendments by the Agricultural
Marketing Agreement Act
of 1937, the Secretary shall designate
the State of California
as a separate Federal milk marketing
order. The order covering
California shall have the right to
reblend and distribute order
receipts to recognize quota value.
(3) Related issues addressed in consolidation.--Among the
issues the Secretary is
authorized to implement as part of the
consolidation of Federal
milk marketing orders are the
following:
(A) The use of utilization rates and multiple basing
points for the pricing of fluid milk.
(B) The use of uniform multiple component pricing
when developing 1 or more basic formula prices for
manufacturing milk.
(4) Effect of existing law.--In implementing the
consolidation of Federal
milk marketing orders and related
reforms under this subsection,
the Secretary may not consider,
or base any decision on,
the table contained in section 8c(5)(A)
of the Agricultural Adjustment
Act (7 U.S.C. 608c(5)(A)),
reenacted with amendments
by the Agricultural Marketing
Agreement Act of 1937, as
added by section 131 of the Food
Security Act of 1985.
(b) Expedited Process.--
(1) Use of informal rulemaking.--To implement the
consolidation of Federal
milk marketing orders and related
reforms under subsection
(a), the Secretary shall use the notice
and comment procedures provided
in section 553 of title 5,
United States Code.
(2) Time limitations.--
(A) Proposed amendments.--The Secretary shall
announce the proposed amendments to be made under
subsection (a) not later than 2 years after the date of
enactment of this title.
(B) Final amendments.--The Secretary shall implement
the amendments not later than 3 years after the date of
enactment of this title.
(3) Effect of court order.--The actions authorized by this
subsection are intended
to ensure the timely publication and
implementation of new and
amended Federal milk marketing orders.
In the event that the Secretary
is enjoined or otherwise
restrained by a court order
from publishing or implementing the
consolidation and related
reforms under subsection (a), the
length of time for which
that injunction or other restraining
order is effective shall
be added to the time limitations
specified in paragraph (2)
thereby extending those time
limitations by a period
of time equal to the period of time for
which the injunction or
other restraining order is effective.
(c) Failure To Timely Consolidate Orders.--If the
Secretary fails to
implement the consolidation required under subsection (a)(1) within
the
time period required under subsection (b)(2)(B) (plus any additional
period provided under subsection (b)(3)), the Secretary may not assess
or collect assessments from milk producers or handlers under such
section 8c for marketing order administration and services provided
under such section after the end of
that period until the consolidation is completed. The Secretary may
not
reduce the level of services provided under the section on account
of
the prohibition against assessments, but shall rather cover the cost
of
marketing order administration and services through funds available
for
the Agricultural Marketing Service of the Department.
(d) Report Regarding Further Reforms.--
(1) Report required.--Not later than April 1, 1997, the
Secretary shall submit to
Congress a report--
(A) reviewing the Federal milk marketing order
system established pursuant to section 8c of the
Agricultural Adjustment Act (7 U.S.C. 608c), reenacted
with amendments by the Agricultural Marketing Agreement
Act of 1937, in light of the reforms required by
subsection (a);
(B) describing the efforts underway and the progress
made in implementing the reforms required by subsection
(a); and
(C) containing such recommendations as the Secretary
considers appropriate for further improvements and
reforms to the Federal milk marketing order system.
(2) Effect of other laws.--Any limitation imposed by Act of
Congress on the conduct
or completion of reports to Congress
shall not apply to the report
required under this section,
unless the limitation specifically
refers to this section.
SEC. 144. <<NOTE: 7 USC 7254.>> EFFECT ON FLUID
MILK STANDARDS IN STATE
OF CALIFORNIA.
Nothing in this Act or any other provision of law
shall be construed
to preempt, prohibit, or otherwise limit the authority of the State
of
California, directly or indirectly, to establish or continue to effect
any law, regulation, or requirement regarding--
(1) the percentage of milk solids or solids not fat in fluid
milk products sold at retail
or marketed in the State of
California; or
(2) the labeling of such fluid milk products with regard to
milk solids or solids not
fat.
SEC. 145. <<NOTE: 7 USC 7255.>> MILK MANUFACTURING MARKETING ADJUSTMENT.
(a) Maximum Allowances Established.--No State shall
provide for a
manufacturing allowance for the processing of milk in excess of--
(1) $1.65 per hundredweight of milk for milk manufactured
into butter and nonfat dry
milk; and
(2) $1.80 per hundredweight of milk for milk manufactured
into cheese.
(b) Manufacturing Allowance Defined.--In this section,
the term
``manufacturing allowance'' means--
(1) the amount by which the product price value of butter
and nonfat dry milk manufactured
from a hundred pounds of milk
containing 3.5 pounds of
butterfat and 8.7 pounds of milk solids
not fat resulting from a
State's yield and product price
formulas exceeds the class
price for the milk used to produce
those products; or
(2) the amount by which the product price value of cheese
manufactured from a hundred
pounds of milk containing 3.5 pounds
of butterfat and 8.7 pounds
of milk solids not fat resulting
from a State's yield and
product price formulas exceeds the
class price for the milk
used to produce cheese.
(c) Effect of Violation.--If the Secretary determines
following a
hearing that a State has in effect a manufacturing allowance that
exceeds the manufacturing allowance authorized in subsection (a), the
Secretary shall suspend purchases of cheddar cheese, butter, and nonfat
dry milk produced in that State until such time as the State complies
with such subsection.
(d) Effective Date; Implementation.--This section
(other than
subsection (e)) shall be effective during the period beginning on the
first day of the first month beginning after the date of enactment
of
this title and ending on December 31, 1999. During that period, the
Secretary may exercise the authority provided to the Secretary under
this section without regard to the issuance of regulations intended
to
carry out this section.
(e) <<NOTE: Effective date.>> Conforming Repeal.--Effective
on the
first day of the first month beginning after the date of enactment
of
this title, section 102 of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 1446e-1) is repealed.
(a) Congressional Purpose.--Section 1999B(a) of the
Fluid Milk
Promotion Act of 1990 (7 U.S.C. 6401(a)) is amended--
(1) by redesignating paragraphs (6), (7) and (8) as
paragraphs (7), (8) and
(9), respectively; and
(2) by inserting after paragraph (5) the following:
``(6) the congressional purpose underlying this subtitle is
to maintain and expand markets
for fluid milk products, not to
maintain or expand any processor's
share of those markets and
that the subtitle does not
prohibit or restrict individual
advertising or promotion
of fluid milk products since the
programs created and funded
by this subtitle are not extended to
replace individual advertising
and promotion efforts;''.
(b) Congressional Policy.--Section 1999B(b) of the
Fluid Milk
Promotion Act of 1990 (7 U.S.C. 6401(b)) is amended to read as follows:
``(b) Policy.--It is declared to be the policy of
Congress that it
is in the public interest to authorize the establishment, through the
exercise of powers provided in this subtitle, of an orderly procedure
for developing, financing, through adequate assessments on fluid milk
products produced in the United States and carrying out an effective,
continuous, and coordinated program of promotion, research, and consumer
information designed to strengthen the position of the dairy industry
in
the marketplace and maintain and expand domestic and foreign markets
and
uses for fluid milk products, the purpose of which is not to compete
with or replace individual advertising or promotion efforts designed
to
promote individual brand name or trade name fluid milk products, but
rather to maintain and expand the markets for all fluid milk products,
with the goal and purpose of this subtitle being a national governmental
goal that authorizes and funds programs that result in government speech
promoting government objectives.''.
(c) Research.--Section 1999C(6) of the Fluid Milk
Promotion Act of
1990 (7 U.S.C. 6402(6)) is amended to read as follows:
``(6) Research.--The term `research' means market research
to support advertising and
promotion efforts, including
educational activities,
research directed to product
characteristics, product
development, including new products or
improved technology in production,
manufacturing or processing of milk
and the products of milk.''.
(d) Voting.--
(1) Initial referenda.--Section 1999N(b)(2) of the Fluid
Milk Promotion Act of 1990
(7 U.S.C. 6413(b)(2)) is amended by
striking ``all processors''
and inserting ``fluid milk
processors voting in the
referendum''.
(2) Suspension or termination.--Section 1999O(c) of such Act
(7 U.S.C. 6414(c)) is amended--
(A) in paragraph (1), by striking ``all processors''
and inserting ``fluid milk processors voting in the
preceding referendum''; and
(B) in paragraph (2)(B), by striking ``all
processors'' and inserting ``fluid milk processors
voting in the referendum''.
(e) Duration.--Section 1999O(a) of the Fluid Milk
Promotion Act of
1990 (7 U.S.C. 6414(a)) is amended by striking ``1996'' and inserting
``2002''.
SEC. 147. <<NOTE: Congress. State listing. 7
USC 7256.>> NORTHEAST
INTERSTATE DAIRY COMPACT.
Congress hereby consents to the Northeast Interstate
Dairy Compact
entered into among the States of Connecticut, Maine, Massachusetts,
New
Hampshire, Rhode Island and Vermont as specified in section 1(b) Senate
Joint Resolution 28 of the 104th Congress, as placed on the calendar
of
the Senate, subject to the following conditions:
(1) Finding of compelling public interest.--Based upon a
finding by the Secretary
of a compelling public interest in the
Compact region, the Secretary
may grant the States that have
ratified the Northeast Interstate
Dairy Compact, as of the date
of enactment of this title,
the authority to implement the
Northeast Interstate Dairy
Compact.
(2) Limitation on manufacturing price.--The Northeast
Interstate Dairy Compact
Commission shall not regulate Class II,
Class III, or Class III-A
milk used for manufacturing purposes
or any other milk, other
than Class I (fluid) milk, as defined
by a Federal milk marketing
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.
(3) Duration.--Consent for the Northeast Interstate Dairy
Compact shall terminate
concurrent with the Secretary's
implementation of the dairy
pricing and Federal milk marketing
order consolidation and
reforms under section 143.
(4) Additional states.--Delaware, New Jersey, New York,
Pennsylvania, Maryland,
and Virginia are the only additional
States that may join the
Northeast Interstate Dairy Compact,
individually or otherwise,
if upon entry the State is contiguous
to a participating State
and if Congress consents to the entry
of the State into the Compact
after the date of enactment of
this title.
(5) Compensation of commodity credit corporation.--Before
the end of each fiscal year
that a Compact price regulation is
in effect, the Northeast
Interstate Dairy Compact Commission
shall compensate the Commodity
Credit Corporation for the cost
of any purchases of milk
and milk products by the Corporation
that result from the projected
rate of
increase in milk production
for the fiscal year within the
Compact region in excess
of the projected national average rate
of the increase in milk
production, as determined by the
Secretary.
(6) Milk marketing order administrator.--At the request of
the Northeast Interstate
Dairy Compact Commission, the
Administrator of the applicable
Federal milk marketing order
issued under section 8(c)5
of the Agricultural Adjustment Act (7
U.S.C. 608c), reenacted
with amendments by the Agricultural
Marketing Agreement Act
of 1937, shall provide technical
assistance to the Compact
Commission and be compensated for that
assistance.
(7) Further conditions.--The Northeast Interstate Dairy
Compact Commission shall
not prohibit or in any way limit the
marketing in the Compact
region of any milk or milk product
produced in any other production
area in the United States. The
Compact Commission shall
respect and abide by the ongoing
procedures between Federal
milk marketing orders with respect to
the sharing of proceeds
from sales within the Compact region of
bulk milk, packaged milk,
or producer milk originating from
outside of the Compact region.
The Compact Commission shall not
use compensatory payments
under section 10(6) of the Compact as
a barrier to the entry of
milk into the Compact region or for
any other purpose. Establishment
of a Compact over-order price,
in itself, shall not be
considered a compensatory payment or a
limitation or prohibition
on the marketing of milk.
SEC. 148. DAIRY EXPORT INCENTIVE PROGRAM.
(a) Duration.--Section 153(a) of the Food Security
Act of 1985 (15
U.S.C. 713a-14(a)) is amended by striking ``2001'' and inserting
``2002''.
(b) Sole Discretion.--Section 153(b) of the Food
Security Act of
1985 (15 U.S.C. 713a-14(b)) is amended by inserting ``sole'' before
``discretion''.
(c) Elements of Program.--Section 153(c) of the
Food Security Act of
1985 (15 U.S.C. 713a-14(c)) is amended--
(1) by striking ``and'' at the end of paragraph (1);
(2) by striking the period at the end of paragraph (2) and
inserting a semicolon; and
(3) by adding at the end the following:
``(3) the maximum volume of dairy product exports allowable
consistent with the obligations
of the United States as a member
of the World Trade Organization
is exported under the program
each year (minus the volume
sold under section 1163 of the Food
Security Act of 1985 (Public
Law 99-198; 7 U.S.C. 1731 note)
during that year), except
to the extent that the export of such
a volume under the program
would, in the judgment of the
Secretary, exceed the limitations
on the value set forth in
subsection (f); and
``(4) payments may be made under the program for exports to
any destination in the world
for the purpose of market
development, except a destination
in a country with respect to
which shipments from the
United States are otherwise restricted
by law.''.
(d) Market Development.--Section 153(e)(1) of the
Food Security Act
of 1985 (15 U.S.C. 713a-14(e)(1)) is amended--
(1) by striking ``and'' and inserting ``the''; and
(2) by inserting before the period the following: ``, and
any additional amount that
may be required to assist in the
development of world markets
for United States dairy products''.
(e) Maximum Allowable Amounts.--Section 153 of the
Food Security Act
of 1985 (15 U.S.C. 713a-14) is amended by adding at the end the
following:
``(f) Required Funding.--
``(1) In general.--Except as provided in paragraph (2), the
Commodity Credit Corporation
shall in each year use money and
commodities for the program
under this section in the maximum
amount consistent with the
obligations of the United States as a
member of the World Trade
Organization, minus the amount
expended under section 1163
of the Food Security Act of 1985
(Public Law 99-198; 7 U.S.C.
1731 note) during that year.
``(2) Volume limitations.--The Commodity Credit Corporation
may not exceed the limitations
specified in subsection (c)(3) on
the volume of allowable
dairy product exports.''.
SEC. 149. <<NOTE: 7 USC 7257.>> AUTHORITY TO
ASSIST IN ESTABLISHMENT AND
MAINTENANCE OF ONE OR MORE EXPORT TRADING COMPANIES.
The Secretary of Agriculture shall, consistent with
the obligations
of the United States as a member of the World Trade Organization,
provide such advice and assistance to the United States dairy industry
as may be necessary to enable that industry to establish and maintain
one or more export trading companies under the Export Trading Company
Act of 1982 (15 U.S.C. 4001 et seq.) for the purpose of facilitating
the
international market development for and exportation of dairy products
produced in the United States.
SEC. 150. <<NOTE: 7 USC 7258.>> STANDBY AUTHORITY
TO INDICATE ENTITY
BEST SUITED TO PROVIDE INTERNATIONAL MARKET DEVELOPMENT AND
EXPORT SERVICES.
(a) Indication of Entity Best Suited To Assist International
Market
Development for and Export of United States Dairy Products.--The
Secretary of Agriculture shall indicate which entity or entities
autonomous of the Government of the United States, which seeks such
a
designation, is best suited to facilitate the international market
development for and exportation of United States dairy products, if
the
Secretary determines that--
(1) the United States dairy industry has not established an
export trading company under
the Export Trading Company Act of
1982 (15 U.S.C. 4001 et
seq.) for the purpose of facilitating
the international market
development for an exportation of dairy
products produced in the
United States on or before June 30,
1997; or
(2) the quantity of exports of United States dairy products
during the 12-month period
preceding July 1, 1998 does not
exceed the quantity of exports
of United States dairy products
during the 12-month period
preceding July 1, 1997 by 1.5 billion
pounds (milk equivalent,
total solids basis).
(b) Funding of Export Activities.--The Secretary
shall assist the
entity or entities identified under subsection (a) in identifying
sources of funding for the activities specified in subsection (a) from
within the dairy industry and elsewhere.
(c) Application of Section.--This section shall
apply only during
the period beginning on July 1, 1997 and ending on September 30, 2000.
SEC. 151. <<NOTE: 7 USC 7259.>> STUDY AND REPORT
REGARDING POTENTIAL
IMPACT OF URUGUAY ROUND ON PRICES, INCOME, AND GOVERNMENT
PURCHASES.
(a) Study.--The Secretary of Agriculture shall conduct
a study, on a
variety by variety of cheese basis, to determine the potential impact
on
milk prices in the United States, dairy producer income, and Federal
dairy program costs, of the allocation of additional cheese granted
access to the United States as a result of the obligations of the United
States as a member of the World Trade Organization.
(b) Report.--Not later than June 30, 1997, the Secretary
shall
report to the Committee on Agriculture, Nutrition, and Forestry of
the
Senate and the Committee on Agriculture of the House of Representatives
the results of the study conducted under this section.
(c) Rule of Construction.--Any limitation imposed
by Act of Congress
on the conduct or completion of studies or reports to Congress shall
not
apply to the study and report required under this section, unless the
limitation specifically refers to this section.
SEC. 152. PROMOTION OF UNITED STATES DAIRY PRODUCTS
IN INTERNATIONAL
MARKETS THROUGH DAIRY PROMOTION PROGRAM.
Section 113(e) of the Dairy Production Stabilization
Act of 1983 (7
U.S.C. 4504(e)) is amended by adding at the end the following new
sentence: ``For each of fiscal years 1997 through 2001, 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 in the United States
from milk produced in the United States.''.
CHAPTER 2--PEANUTS AND SUGAR
SEC. 155. <<NOTE: 7 USC 7271.>> PEANUT PROGRAM.
(a) Quota Peanuts.--
(1) Availability of loans.--The Secretary shall make
nonrecourse loans available
to producers of quota peanuts.
(2) Loan rate.--The national average quota loan rate for
quota peanuts shall be $610
per ton.
(3) Inspection, handling, or storage.--The loan amount may
not be reduced by the Secretary
by any deductions for
inspection, handling, or
storage.
(4) Location and other factors.--The Secretary may make
adjustments in the loan
rate for quota peanuts for location of
peanuts and such other factors
as are authorized by section 162.
(5) Offers from handlers.--If a producer markets a quota
peanut crop, meeting quality
requirements for domestic edible
use, through the marketing
association loan for two consecutive
marketing years and the
Secretary determines that a handler
provided the producer with
a written offer, upon delivery, for
the purchase of the quota
peanut crops at a price equal to or in
excess of the quota support
price, the producer shall be
ineligible for quota price
support for the next marketing year.
The Secretary shall establish
the method by which a producer may
appeal a determination under
this paragraph regarding
ineligibility for quota
price support.
(b) Additional Peanuts.--
(1) In general.--Subject to paragraph (2), the Secretary
shall make nonrecourse loans
available to producers of
additional peanuts at such
rates as the Secretary finds
appropriate, taking into
consideration the demand for peanut oil
and peanut meal, expected
prices of other vegetable oils and
protein meals, and the demand
for peanuts in foreign markets.
(2) Limitation.--The Secretary shall establish the support
rate on additional peanuts
at a level estimated by the Secretary
to ensure that there are
no losses to the Commodity Credit
Corporation on the sale
or disposal of the peanuts.
(3) Announcement.--The Secretary shall announce the loan
rate for additional peanuts
of each crop not later than February
15 preceding the marketing
year for the crop for which the loan
rate is being determined.
(c) Area Marketing Associations.--
(1) Warehouse storage loans.--
(A) In general.--In carrying out subsections (a) and
(b), the Secretary shall make warehouse storage loans
available in each of the producing areas (described in
section 1446.95 of title 7 of the Code of Federal
Regulations (January 1, 1989)) to a designated area
marketing association of peanut producers that is
selected and approved by the Secretary and that is
operated primarily for the purpose of conducting the
loan activities. The Secretary may not make warehouse
storage loans available to any cooperative that is
engaged in operations or activities concerning peanuts
other than those operations and activities specified in
this section and section 358e of the Agricultural
Adjustment Act of 1938 (7 U.S.C. 1359a).
(B) Administrative and supervisory activities.--An
area marketing association shall be used in
administrative and supervisory activities relating to
loans and marketing activities under this section and
section 358e of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359a).
(C) Association costs.--Loans made to the
association under this paragraph shall include such
costs as the area marketing association reasonably may
incur in carrying out the responsibilities, operations,
and activities of the association under this section and
section 358e of the Agricultural Adjustment Act of 1938
(7 U.S.C. 1359a).
(2) Pools for quota and additional peanuts.--
(A) <<NOTE: Records. New Mexico.>> In general.--The
Secretary shall require that each area marketing
association establish pools and maintain complete and
accurate records by area and segregation for quota
peanuts handled under loan and for additional peanuts
placed under loan, except that separate pools shall be
established for Valencia peanuts produced in New Mexico.
(B) Eligibility to participate in new mexico
pools.--
(i) In general.--Except as provided in clause
(ii), in the case of the 1996 and subsequent
crops, Valencia peanuts not physically produced in
the State of New Mexico shall not be eligible to
participate in the pools of the State.
(ii) Exception.--A producer of Valencia
peanuts may enter Valencia peanuts that are
produced in Texas into the pools of New Mexico in
a quantity not greater than the average annual
quantity of the peanuts that the producer entered
into the New Mexico pools for the 1990 through
1995 crops.
(C) Types of peanuts.--Bright hull and dark hull
Valencia peanuts shall be considered as separate types
for the purpose of establishing the pools.
(D) Net gains.--Net gains on peanuts in each pool,
unless otherwise approved by the Secretary, shall be
distributed only to producers who placed peanuts in the
pool and shall be distributed in proportion to the value
of the peanuts placed in the pool by each producer. Net
gains for peanuts in each pool shall consist of the
following:
(i) Quota peanuts.--For quota peanuts, the net
gains over and above the loan indebtedness and
other costs or losses incurred on peanuts placed
in the pool.
(ii) Additional peanuts.--For additional
peanuts, the net gains over and above the loan
indebtedness and other costs or losses incurred on
peanuts placed in the pool for additional peanuts.
(d) Losses.--Losses in quota area pools shall be
covered using the
following sources in the following order of priority:
(1) Transfers from additional loan pools.--The proceeds due
any producer from any pool
shall be reduced by the amount of any
loss that is incurred with
respect to peanuts transferred from
an additional loan pool
to a quota loan pool by the producer
under section 358-1(b)(8)
of the Agricultural Adjustment Act of
1938 (7 U.S.C. 1358-1(b)(8)).
(2) Producers in same pool.--Further losses in an area quota
pool shall be offset by
reducing the gain of any producer in the
pool by the amount of pool
gains attributed to the same producer
from the sale of additional
peanuts for domestic and edible
export use.
(3) Offset within area.--Further losses in an area quota
pool shall be offset by
any gains or profits from additional
peanuts (other than separate
type pools established under
subsection (c)(2)(A) for
Valencia peanuts produced in New
Mexico) owned or controlled
by the Commodity Credit Corporation
in that area and sold for
domestic edible use, in accordance
with regulations issued
by the Secretary. This paragraph shall
not apply to profits or
gains from a farm with 1 acre or less of
peanut production.
(4) First use of marketing assessments.--The Secretary shall
use funds collected under
subsection (g) (except funds
attributable to handlers)
to offset further losses in area quota
pools. The Secretary shall
transfer to the Treasury those funds
collected under subsection
(g) and available for use under this
paragraph that the Secretary
determines are not required to
cover losses in area quota
pools.
(5) <<NOTE: Regulations.>> Cross compliance.--Further losses
in area quota pools, other
than losses incurred as a result of
transfers from additional
loan pools to quota loan pools under
section 358-1(b)(8) of the
Agricultural Adjustment Act of 1938
(7 U.S.C. 1358-1(b)(8)),
shall be offset by any gains or profits
from quota pools in other
production areas (other than separate
type pools established under
subsection (c)(2)(A) for Valencia
peanuts produced in New
Mexico) in such manner as the Secretary
shall by regulation prescribe.
(6) Offset generally.--If losses in an area quota pool have
not been entirely offset
under the preceding paragraphs, further
losses shall be offset by
any gains or profits from additional
peanuts (other than separate
type pools established under
subsection (c)(2)(A) for
Valencia peanuts produced in New
Mexico) owned or controlled
by the Commodity Credit Corporation
and sold for domestic edible
use, in accordance with regulations
issued by the Secretary.
This paragraph shall not apply to
profits or gains from a
farm with 1 acre or less of peanut
production.
(7) Second use of marketing assessments.--The Secretary
shall use funds collected
under subsection (g) and attributable
to handlers to offset further
losses in area quota pools. The
Secretary shall transfer
to the Treasury those funds collected
under subsection (g) and
available
for use under this paragraph
that the Secretary determines
are not required to cover losses
in area quota pools.
(8) Increased assessments.--If use of the authorities
provided in the preceding
paragraphs is not sufficient to cover
losses in an area quota
pool, the Secretary shall increase the
marketing assessment for
producers established under subsection
(g) by such an amount as
the Secretary considers necessary to
cover the losses. The increased
assessment shall apply only to
quota peanuts in the production
area covered by the pool.
Amounts collected under
subsection (g) as a result of the
increased assessment shall
be retained by the Secretary to cover
losses in that pool.
(e) Disapproval of Quotas.--Notwithstanding any other
provision of
law, no loan for quota peanuts may be made available by the Secretary
for any crop of peanuts with respect to which poundage quotas have
been
disapproved by producers, as provided for in section 358-1(d) of the
Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(d)).
(f) Quality Improvement.--
(1) In general.--With respect to peanuts under loan, the
Secretary shall--
(A) promote the crushing of peanuts at a greater
risk of deterioration before peanuts of a lesser risk of
deterioration;
(B) ensure that all Commodity Credit Corporation
inventories of peanuts sold for domestic edible use must
be shown to have been officially inspected by licensed
Department inspectors both as farmer stock and shelled
or cleaned in-shell peanuts;
(C) continue to endeavor to operate the peanut
program so as to improve the quality of domestic peanuts
and ensure the coordination of activities under the
Peanut Administrative Committee established under
Marketing Agreement
No. 146, regulating the quality of domestically produced
peanuts (under the Agricultural Adjustment Act (7 U.S.C.
601 et seq.), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937); and
(D) ensure that any changes made in the peanut
program as a result of this subsection requiring
additional production or handling at the farm level
shall be reflected as an upward adjustment in the
Department loan schedule.
(2) Exports and other peanuts.--The Secretary shall require
that all peanuts in the
domestic and export markets fully comply
with all quality standards
under Marketing Agreement No. 146.
(g) Marketing Assessment.--
(1) In general.--The Secretary shall provide for a
nonrefundable marketing
assessment. The assessment shall be made
on a per pound basis in
an amount equal to 1.1 percent for each
of the 1994 and 1995 crops,
1.15 percent for the 1996 crop, and
1.2 percent for each of
the 1997 through 2002 crops, of the
national average quota or
additional peanut loan rate for the
applicable crop.
(2) First purchasers.--
(A) In general.--Except as provided under paragraphs
(3) and (4), the first purchaser of peanuts shall--
(i) collect from the producer a marketing
assessment equal to the quantity of peanuts
acquired multiplied by--
(I) in the case of each of the 1994
and 1995 crops, .55 percent of the
applicable national average loan rate;
(II) in the case of the 1996 crop,
.6 percent of the applicable national
average loan rate; and
(III) in the case of each of the
1997 through 2002 crops, .65 percent of
the applicable national average loan
rate;
(ii) pay, in addition to the amount collected
under clause (i), a marketing assessment in an
amount equal to the quantity of peanuts acquired
multiplied by .55 percent of the applicable
national average loan rate; and
(iii) remit the amounts required under clauses
(i) and (ii) to the Commodity Credit Corporation
in a manner specified by the Secretary.
(B) Definition of first purchaser.--In this
subsection, the term ``first purchaser'' means a person
acquiring peanuts from a producer except that in the
case of peanuts forfeited by a producer to the Commodity
Credit Corporation, the term means the person acquiring
the peanuts from the Commodity Credit Corporation.
(3) Other private marketings.--In the case of a private
marketing by a producer
directly to a consumer through a retail
or wholesale outlet or in
the case of a marketing by the
producer outside of the
continental United States, the producer
shall be responsible for
the full amount of the assessment and
shall remit the assessment
by such time as is specified by the
Secretary.
(4) Loan peanuts.--In the case of peanuts that are pledged
as collateral for a loan
made under this section, the producer
portion of the assessment
shall be deducted from the proceeds of
the loan. The remainder
of the assessment shall be paid by the
first purchaser of the peanuts.
For purposes of computing net
gains on peanuts under this
section, the reduction in loan
proceeds shall be treated
as having been paid to the producer.
(5) Penalties.--If any person fails to collect or remit the
reduction required by this
subsection or fails to comply with
the requirements for recordkeeping
or otherwise as are required
by the Secretary to carry
out this subsection, the person shall
be liable to the Secretary
for a civil penalty up to an amount
determined by multiplying--
(A) the quantity of peanuts involved in the
violation; by
(B) the national average quota peanut rate for the
applicable crop year.
(6) Enforcement.--The Secretary may enforce this subsection
in the courts of the United
States.
(h) <<NOTE: Effective date.>> Crops.--Subsections
(a) through (g)
shall be effective only for the 1996 through 2002 crops of peanuts.
(i) Poundage Quotas.--
(1) In general.--Part VI of subtitle B of title III of the
Agricultural Adjustment
Act of 1938 is amended--
(A) in section 358-1 (7 U.S.C. 1358-1)--
(i) in the section heading, by striking ``1991
through 1997 crops of'';
(ii) in subsections (a)(1), (b)(1)(B),
(b)(2)(A), (b)(2)(C), and (b)(3)(A), by striking
``of the 1991 through 1997 marketing years'' each
place it appears and inserting ``marketing year'';
(iii) in subsection (a)(3), by striking
``1990'' and inserting ``1990, for the 1991
through 1995 marketing years, and 1995, for the
1996 through 2002 marketing years'';
(iv) in subsection (b)(1)(A)--
(I) by striking ``each of the 1991
through 1997 marketing years'' and
inserting ``each marketing year''; and
(II) in clause (i), by inserting
before the semicolon the following: ``,
in the case of the 1991 through 1995
marketing years, and the 1995 marketing
year, in the case of the 1996 through
2002 marketing years'';
(v) in subsection (b)(1), by adding at the end
the following:
``(D) <<NOTE: Effective date.>> Certain farms
ineligible for quota.--Effective beginning with the 1998
crop, the Secretary shall not establish a farm poundage
quota under subparagraph (A) for a farm owned or
controlled by--
``(i) a municipality, airport authority,
school, college, refuge, or other public entity
(other than a university used for research
purposes); or
``(ii) a person who is not a producer and
resides in another State.'';
(vi) in subsection (b)(2), by adding at the
end the following:
``(E) Transfer of quota from ineligible farms.--Any
farm poundage quota held at the end of the 1996
marketing year by a farm described in paragraph (1)(D)
shall be allocated to other farms in the same State on
such basis as the Secretary may by regulation
prescribe.''; and
(vii) in subsection (f), by striking ``1997''
and inserting ``2002'';
(B) in section 358b (7 U.S.C. 1358b)--
(i) in the section heading, by striking ``1991
through 1995 crops of''; and
(ii) in subsection (c), by striking ``1995''
and inserting ``2002'';
(C) in section 358c(d) (7 U.S.C. 1358c(d)), by
striking ``1995'' and inserting ``2002''; and
(D) in section 358e (7 U.S.C. 1359a)--
(i) in the section heading, by striking ``for
1991 through 1997 crops of peanuts''; and
(ii) in subsection (i), by striking ``1997''
and inserting ``2002''.
(2) Elimination of quota floor.--Section 358-1(a)(1) of the
Agricultural Adjustment
Act of 1938 (7 U.S.C. 1358-1(a)(1)) is
amended by striking the
second sentence.
(3) Temporary quota allocation.--Section 358-1 of the
Agricultural Adjustment
Act of 1938 (7 U.S.C. 1358-1) is
amended--
(A) in subsection (a)(1), by striking ``domestic
edible, seed,'' and inserting ``domestic edible use
(except seed)''; and
(B) in subsection (b)(2)--
(i) in subparagraph (A), by striking
``subparagraph (B) and subject to''; and
(ii) by striking subparagraph (B) and
inserting the following:
``(B) Temporary quota allocation.--
``(i) Allocation related to seed peanuts.--
Temporary allocation of quota pounds for the
marketing year only in which the crop is planted
shall be made to producers for each of the 1996
through 2002 marketing years as provided in this
subparagraph.
``(ii) Quantity.--The temporary quota
allocation shall be equal to the pounds of seed
peanuts planted on the farm, as may be adjusted
and determined under regulations prescribed by the
Secretary.
``(iii) Additional quota.--The temporary
allocation of quota pounds under this paragraph
shall be in addition to the farm poundage quota
otherwise established under this subsection and
shall be credited, for the applicable marketing
year only, in total, to the producer of the
peanuts on the farm in a manner prescribed by the
Secretary.
``(iv) Effect of other requirements.--Nothing
in this section alters or changes the requirements
regarding the use of quota and additional peanuts
established by section 358e(b).''.
(4) Undermarketings.--Part VI of subtitle B of title III of
the Agricultural Adjustment
Act of 1938 is amended--
(A) in section 358-1(b) (7 U.S.C. 1358-1(b))--
(i) in paragraph (1)(B), by striking ``includ-
ing--'' and clauses (i) and (ii) and inserting
``including any increases resulting from the
allocation of quotas voluntarily released for 1
year under paragraph (7).'';
(ii) in paragraph (3)(B), by striking
``include--'' and clauses (i) and (ii) and
inserting ``include any increase resulting from
the allocation of quotas voluntarily released for
1 year under paragraph (7).''; and
(iii) by striking paragraphs (8) and (9); and
(B) in section 358b(a) (7 U.S.C. 1358b(a))--
(i) in paragraph (2), by striking ``(including
any applicable under marketings)''; and
(ii) in paragraph (3), by striking
``(including any applicable undermarketings)''.
(5) Disaster transfers.--Section 358-1(b) of the
Agricultural Adjustment
Act of 1938 (7 U.S.C. 1358-1(b)), as
amended by paragraph (4)(A)(iii),
is amended by adding at the
end the following:
``(8) Disaster transfers.--
``(A) <<NOTE: Regulations.>> In general.--Except as
provided in subparagraph (B), additional peanuts
produced on a farm from which the quota poundage was not
harvested and marketed because of drought, flood, or any
other natural disaster, or any other condition beyond
the control of the producer, may be transferred to the
quota loan pool for pricing purposes on such basis as
the Secretary shall by regulation provide.
``(B) Limitation.--The poundage of peanuts
transferred under subparagraph (A) shall not exceed the
difference between--
``(i) the total quantity of peanuts meeting
quality requirements for domestic edible use, as
determined by the Secretary, marketed from the
farm; and
``(ii) the total farm poundage quota,
excluding quota pounds transferred to the farm in
the fall.
``(C) Support rate.--Peanuts transferred under this
paragraph shall be supported at 70 percent of the quota
support rate for the marketing years in which the
transfers occur. The transfers for a farm shall not
exceed 25 percent of the total farm quota pounds,
excluding pounds transferred in the fall.''.
(6) Sale or lease.--Section 358b(a) of the Agricultural
Adjustment Act of 1938 (7
U.S.C. 1358b(a)) is amended--
(A) by striking paragraph (1) and inserting the
following:
``(1) Sale and lease authority.--
``(A) Sale or lease within same state.--Subject to
subparagraph (B) and such terms and conditions as the
Secretary may prescribe, the owner, or operator with the
permission of the owner, of a farm in a State for which
a farm poundage quota has been established may sell or
lease all or any part of the poundage quota to any other
owner or operator of a farm within the same State for
transfer to the farm. However, any such lease of
poundage quota may be entered into in the fall or after
the normal planting season--
``(i) if not less than 90 percent of the basic
quota (the farm quota and temporary quota
transfers), plus any poundage quota transferred to
the farm under this subsection, has been planted
or considered planted on the farm from which the
quota is to be leased; and
``(ii) under such terms and conditions as the
Secretary may by regulation prescribe.
``In the case of a fall transfer or a transfer after the
normal planting season by a cash lessee, the landowner
shall not be required to sign the transfer
authorization. A fall transfer or a transfer after the
normal planting season may be made not later than 72
hours after the peanuts that are the subject of the
transfer are inspected and graded.
``(B) Percentage limitations on spring transfers.--
Spring transfers under subparagraph (A) by sale or lease
of a quota for farms in a county to any owner or
operator of a farm outside the county within the same
State shall not exceed the applicable percentage
specified in this subparagraph of the quotas of all
farms in the originating county (as of January 1, 1996)
for the crop year in which the transfer is made, plus
the total amount of quotas eligible for transfer from
the originating county in the preceding crop year that
were not transferred in that year or that were
transferred through an expired lease. However, not more
than an aggregate of 40 percent of the total poundage
quota within a county (as of January 1, 1996) may be
transferred outside of the county. Cumulative unexpired
transfers outside of a county may not exceed for a crop
year the following:
``(i) For the 1996 crop, 15 percent.
``(ii) For the 1997 crop, 25 percent.
``(iii) For the 1998 crop, 30 percent.
``(iv) For the 1999 crop, 35 percent.
``(v) For the 2000 and subsequent crops, not
more than an aggregate of 40 percent of the total
poundage quota within the county as of January 1,
1996.
``(C) Clarification regarding fall transfers.--The
limitation in subparagraph (B) does not apply to 1-year
fall transfers, which in all cases may be made to any
farm in the same State.
``(D) Effect of transfer.--Any farm poundage quota
transferred under this paragraph shall not result in any
reduction in the farm poundage quota for the
transferring farm if the transferred quota is produced
or considered produced on the receiving farm.''; and
(B) by adding at the end the following:
``(4) Transfers in counties with small quotas.--
Notwithstanding paragraphs
(1) and (2), in the case of any
county in a State for which
the poundage quota allocated to the
county was less than 100,000
pounds for the preceding year's
crop, all or any part of
a farm poundage quota may be
transferred by sale or lease
or otherwise from a farm in the
county to a farm in another
county in the same State.''.
SEC. 156. <<NOTE: 7 USC 7272.>> 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) Reduction in Loan Rates.--
(1) Reduction required.--The Secretary shall 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)).
(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) Recourse loans.--Subject to paragraph (2), the Secretary
shall carry out this section
through the use of recourse loans.
(2) Nonrecourse loans.--During any fiscal year in which the
tariff rate quota for imports
of sugar into the United States is
established at, or is increased
to, a level in excess of
1,500,000 short tons raw
value, the Secretary shall carry out
this section by making available
nonrecourse loans. Any recourse
loan previously made available
by the Secretary under this
section during the fiscal
year shall be changed by the Secretary
into a nonrecourse loan.
(3) Processor assurances.--If the Secretary is required
under paragraph (2) to make
nonrecourse loans available during a
fiscal year or to change
recourse loans into nonrecourse loans,
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 sugar beets and sugarcane
delivered by producers served
by the processor. The Secretary
may establish appropriate
minimum payments for purposes of this
paragraph.
(f) Marketing Assessment.--
(1) <<NOTE: Effective date.>> Sugarcane.--Effective for
marketings of raw cane sugar
during the 1996 through 2003 fiscal
years, the first processor
of sugarcane shall remit to the
Commodity Credit Corporation
a nonrefundable marketing
assessment in an amount
equal to--
(A) in the case of marketings during fiscal year
1996, 1.1 percent of the loan rate established under
subsection (a) per pound of raw cane sugar, processed by
the processor from domestically produced sugarcane or
sugarcane molasses, that has been marketed (including
the transfer or delivery of the sugar to a refinery for
further processing or marketing); and
(B) in the case of marketings during each of fiscal
years 1997 through 2003, 1.375 percent of the loan rate
established under subsection (a) per pound of raw cane
sugar, processed by the processor from domestically
produced sugarcane or sugarcane molasses, that has been
marketed (including the transfer or delivery of the
sugar to a refinery for further processing or
marketing).
(2) <<NOTE: Effective date.>> Sugar beets.--Effective for
marketings of beet sugar
during the 1996 through 2003 fiscal
years, the first processor
of sugar beets shall remit to the
Commodity Credit Corporation
a nonrefundable marketing
assessment in an amount
equal to--
(A) in the case of marketings during fiscal year
1996, 1.1794 percent of the loan rate established under
subsection (a) per pound of beet sugar, processed by the
processor from domestically produced sugar beets or
sugar beet molasses, that has been marketed; and
(B) in the case of marketings during each of fiscal
years 1997 through 2003, 1.47425 percent of the loan
rate established under subsection (a) per pound of beet
sugar, processed by the processor from domestically
produced sugar beets or sugar beet molasses, that has been
marketed.
(3) Collection.--
(A) Timing.--A marketing assessment required under
this subsection shall be collected on a monthly basis
and shall be remitted to the Commodity Credit
Corporation not later than 30 days after the end of each
month. Any cane sugar or beet sugar processed during a
fiscal year that has not been marketed by September 30
of the year shall be subject to assessment on that date.
The sugar shall not be subject to a second assessment at
the time that it is marketed.
(B) Manner.--Subject to subparagraph (A), marketing
assessments shall be collected under this subsection in
the manner prescribed by the Secretary and shall be
nonrefundable.
(4) Penalties.--If any person fails to remit the assessment
required by this subsection
or fails to comply with such
requirements for recordkeeping
or otherwise as are required by
the Secretary to carry out
this subsection, the person shall be
liable to the Secretary
for a civil penalty up to an amount
determined by multiplying--
(A) the quantity of cane sugar or beet sugar
involved in the violation; by
(B) the loan rate for the applicable crop of
sugarcane or sugar beets.
(5) Enforcement.--The Secretary may enforce this subsection
in a court of the United
States.
(g) Forfeiture Penalty.--
(1) In general.--A penalty shall be assessed on the
forfeiture of any sugar
pledged as collateral for a nonrecourse
loan under this section.
(2) Cane sugar.--The penalty for cane sugar shall be 1 cent
per pound.
(3) Beet sugar.--The penalty for beet sugar shall bear the
same relation to the penalty
for cane sugar as the marketing
assessment for sugar beets
bears to the marketing assessment for
sugarcane.
(4) Effect of forfeiture.--Any payments owed producers by a
processor that forfeits
any sugar pledged as collateral for a
nonrecourse loan shall be
reduced in proportion to the loan
forfeiture penalty incurred
by the processor.
(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) 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.
(3) Monthly reports.--Taking into consideration the
information received under
paragraph (1), the Secretary shall
publish on a monthly basis
composite data on production,
imports, distribution, and
stock levels of sugar.
(i) Crops.--This section (other than subsection (f))
shall be
effective only for the 1996 through 2002 crops of sugar beets and
sugarcane.
SEC. 161. <<NOTE: 7 USC 7281.>> ADMINISTRATION.
(a) Use of Commodity Credit Corporation.--The Secretary
shall carry
out this title through the Commodity Credit Corporation.
(b) Limitation on Expenditure of Commodity Credit
Corporation
Funds.--
(1) General powers and responsibilities.--Section 4 of the
Commodity Credit Corporation
Charter Act (15 U.S.C. 714b) is
amended--
(A) in the first sentence of subsection (g), by
inserting before the period the following: ``, except
that obligations under all such contracts or agreements
(other than reimbursable agreements under section 11)
for equipment or services relating to automated data
processing, information technologies, or related items
(including telecommunications equipment and computer
hardware and software) may not exceed $170,000,000 in
fiscal year 1996 and not more than $275,000,000 in the
6-fiscal year period beginning on October 1, 1996,
unless additional amounts for such contracts and
agreements are provided in advance in appropriation
Acts''; and
(B) in subsection (h), by striking ``shall have
power to acquire personal property necessary to the
conduct of its business but''.
(2) Reimbursable agreements.--Section 11 of the Commodity
Credit Corporation Charter
Act (15 U.S.C. 714i) is amended by
adding at the end the following:
``After September 30, 1996, the
total amount of all allotments
and fund transfers from the
Corporation under this section
(including allotments and
transfers for automated
data processing or information resource
management activities) for
a fiscal year may not exceed the
total amount of the allotments
and transfers made under this
section in fiscal year 1995.''.
(3) Reporting requirements.--Section 13 of the Commodity
Credit Corporation Charter
Act (15 U.S.C. 714k) is amended by
adding at the end the following:
``In addition to the annual
report, the Corporation
shall submit to Congress on a quarterly
basis an itemized report
of all expenditures over $10,000 made
under section 5 or 11 during
the period covered by the report,
including expenditures in
the form of allotments or fund
transfers to other agencies
and departments of the Federal
Government.''.
(c) Determinations by Secretary.--A determination
made by the
Secretary under this title shall be final and conclusive.
(d) Regulations.--Not later than 90 days after the
date of enactment
of this title, the Secretary and the Commodity Credit Corporation,
as
appropriate, shall issue such regulations as are necessary to implement
this title. The issuance of the regulations shall be made without regard
to--
(1) the notice and comment provisions of section 553 of
title 5, United States Code;
(2) 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
(3) chapter 35 of title 44, United States Code (commonly
know as the ``Paperwork
Reduction Act'').
SEC. 162. <<NOTE: 7 USC 7282.>> ADJUSTMENTS OF LOANS.
(a) Adjustment Authority.--The Secretary may make
appropriate
adjustments in the loan rates for any commodity for differences in
grade, type, quality, location, and other factors.
(b) Manner of Adjustment.--The adjustments under
the authority of
this section shall, to the maximum extent practicable, be made in such
manner that the average loan level for the commodity will, on the basis
of the anticipated incidence of the factors, be equal to the level
of
support determined as provided in this title.
(c) Adjustment on County Basis.--The Secretary may
establish loan
rates for a crop for producers in individual counties in a manner that
results in the lowest such rate being 95 percent of the national average
loan rate, except that such action shall not result in an increase
in
outlays. Adjustments under this subsection shall not result in an
increase in the national average loan rate for any year.
SEC. 163. <<NOTE: 7 USC 7283.>> COMMODITY CREDIT
CORPORATION INTEREST
RATE.
Notwithstanding any other provision of law, the monthly
Commodity
Credit Corporation interest rate applicable to loans provided for
agricultural commodities by the Corporation shall be 100 basis points
greater than the rate determined under the applicable interest rate
formula in effect on October 1, 1995.
SEC. 164. <<NOTE: 7 USC 7284.>> PERSONAL LIABILITY
OF PRODUCERS FOR
DEFICIENCIES.
(a) In General.--Except as provided in subsection
(b), no producer
shall be personally liable for any deficiency arising from the sale
of
the collateral securing any nonrecourse loan made under this title
unless the loan was obtained through a fraudulent representation by
the
producer.
(b) Limitations.--Subsection (a) shall not prevent
the Commodity
Credit Corporation or the Secretary from requiring a producer to assume
liability for--
(1) a deficiency in the grade, quality, or quantity of a
commodity stored on a farm
or delivered by the producer;
(2) a failure to properly care for and preserve a commodity;
or
(3) a failure or refusal to deliver a commodity in
accordance with a program
established under this title.
(c) Acquisition of Collateral.--In the case of a
nonrecourse loan
made under this title or the Commodity Credit Corporation Charter Act
(15 U.S.C. 714 et seq.), if the Commodity Credit Corporation acquires
title to the unredeemed collateral, the Corporation shall be under
no
obligation to pay for any market value that the collateral may have
in
excess of the loan indebtedness.
(d) Sugarcane and Sugar Beets.--A security interest
obtained by the
Commodity Credit Corporation as a result of the execution of a security
agreement by the processor of sugarcane or sugar
beets shall be superior to all statutory and common law liens on raw
cane sugar and refined beet sugar in favor of the producers of sugarcane
and sugar beets and all prior recorded and unrecorded liens on the
crops
of sugarcane and sugar beets from which the sugar was derived.
SEC. 165. <<NOTE: 7 USC 7285.>> COMMODITY CREDIT
CORPORATION SALES PRICE
RESTRICTIONS.
(a) General Sales Authority.--The Commodity Credit
Corporation may
sell any commodity owned or controlled by the Corporation at any price
that the Secretary determines will maximize returns to the Corporation.
(b) Nonapplication of Sales Price Restrictions.--Subsection
(a)
shall not apply to--
(1) a sale for a new or byproduct use;
(2) a sale of peanuts or oilseeds for the extraction of oil;
(3) a sale for seed or feed if the sale will not
substantially impair any
loan program;
(4) a sale of a commodity that has substantially
deteriorated in quality
or as to which there is a danger of loss
or waste through deterioration
or spoilage;
(5) a sale for the purpose of establishing a claim arising
out of a contract or against
a person who has committed fraud,
misrepresentation, or other
wrongful act with respect to the
commodity;
(6) a sale for export, as determined by the Corporation; and
(7) a sale for other than a primary use.
(c) Presidential Disaster Areas.--
(1) In general.--Notwithstanding subsection (a), on such
terms and conditions as
the Secretary may consider in the public
interest, the Corporation
may make available any commodity or
product owned or controlled
by the Corporation for use in
relieving distress--
(A) in any area in the United States (including the
Virgin Islands) declared by the President to be an acute
distress area because of unemployment or other economic
cause, if the President finds that the use will not
displace or interfere with normal marketing of
agricultural commodities; and
(B) in connection with any major disaster determined
by the President to warrant assistance by the Federal
Government under the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5121 et seq.).
(2) Costs.--Except on a reimbursable basis, the Corporation
shall not bear any costs
in connection with making a commodity
available under paragraph
(1) beyond the cost of the commodity
to the Corporation incurred
in--
(A) the storage of the commodity; and
(B) the handling and transportation costs in making
delivery of the commodity to designated agencies at 1 or
more central locations in each State or other area.
(d) Efficient Operations.--Subsection (a) shall not
apply to the
sale of a commodity the disposition of which is desirable in the
interest of the effective and efficient conduct of the operations of
the
Corporation because of the small quantity of the commodity
involved, or because of the age, location, or questionable continued
storability of the commodity.
Subtitle F--Permanent Price Support Authority
SEC. 171. <<NOTE: 7 USC 7301.>> SUSPENSION AND
REPEAL OF PERMANENT PRICE
SUPPORT AUTHORITY.
(a) Agricultural Adjustment Act of 1938.--
(1) Suspensions.--The following provisions of the
Agricultural Adjustment
Act of 1938 shall not be applicable to
the 1996 through 2002 crops
of loan commodities, peanuts, and
sugar and shall not be applicable
to milk during the period
beginning on the date of
enactment of this title and ending on
December 31, 2002:
(A) Parts II through V of subtitle B of title III (7
U.S.C. 1326-1351).
(B) Subsections (a) through (j) of section 358 (7
U.S.C. 1358).
(C) Subsections (a) through (h) of section 358a (7
U.S.C. 1358a).
(D) Subsections (a), (b), (d), and (e) of section
358d (7 U.S.C. 1359).
(E) Part VII of subtitle B of title III (7 U.S.C.
1359aa-1359jj).
(F) In the case of peanuts, part I of subtitle C of
title III (7 U.S.C. 1361-1368).
(G) In the case of upland cotton, section 377 (7
U.S.C. 1377).
(H) Subtitle D of title III (7 U.S.C. 1379a-1379j).
(I) Title IV (7 U.S.C. 1401-1407).
(2) <<NOTE: Effective date.>> Reports and records.--
Effective only for the 1996
through 2002 crops of peanuts, the
first sentence of section
373(a) of the Agricultural Adjustment
Act of 1938 (7 U.S.C. 1373(a))
is amended by inserting before
``all brokers and dealers
in peanuts'' the following: ``all
producers engaged in the
production of peanuts,''.
(b) Agricultural Act of 1949.--
(1) Suspensions.--The following provisions of the
Agricultural Act of 1949
shall not be applicable to the 1996
through 2002 crops of loan
commodities, peanuts, and sugar and
shall not be applicable
to milk during the period beginning on
the date of enactment of
this title and ending on December 31,
2002:
(A) Section 101 (7 U.S.C. 1441).
(B) Section 103(a) (7 U.S.C. 1444(a)).
(C) Section 105 (7 U.S.C. 1444b).
(D) Section 107 (7 U.S.C. 1445a).
(E) Section 110 (7 U.S.C. 1445e).
(F) Section 112 (7 U.S.C. 1445g).
(G) Section 115 (7 U.S.C. 1445k).
(H) Section 201 (7 U.S.C. 1446).
(I) Title III (7 U.S.C. 1447-1449).
(J) Title IV (7 U.S.C. 1421-1433d), other than
sections 404, 412, and 416 (7 U.S.C. 1424, 1429, and
1431).
(K) Title V (7 U.S.C. 1461-1469).
(L) Title VI (7 U.S.C. 1471-1471j).
(2) Repeals.--The following provisions of the Agricultural
Act of 1949 are repealed:
(A) Section 101B (7 U.S.C. 1441-2).
(B) Section 103B (7 U.S.C. 1444-2).
(C) Section 105B (7 U.S.C. 1444f).
(D) Section <<NOTE: 7 USC 1445b-3a.>> 107B (7 U.S.C.
1445-3a).
(E) Section 108B (7 U.S.C. 1445c-3).
(F) Section 113 (7 U.S.C. 1445h).
(G) Subsections (b) and (c) of section 114 (7 U.S.C.
1445j).
(H) Sections 205, 206, and 207 (7 U.S.C. 1446f,
1446g, and 1446h).
(I) Sections 406 and 427 (7 U.S.C. 1426 and 1433f).
(3) Potential price support for rice.--Section 101 of the
Agricultural Act of 1949
(7 U.S.C. 1441), as suspended by
paragraph (1), is amended
by adding after subsection (d) the
following:
``(e) Rice.--The Secretary shall make available to
producers of each
crop of rice on a farm price support at a level that is not less than
50
percent, or more than 90 percent of the parity price for rice as the
Secretary determines will not result in increasing stocks of rice to
the
Commodity Credit Corporation.''.
(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 1996
through 2002.
SEC. 172. <<NOTE: 7 USC 7302.>> EFFECT OF AMENDMENTS.
(a) Effect on Prior Crops.--Except as otherwise specifically
provided in this title and notwithstanding any other provision of law,
this title and the amendments made by this title shall not affect the
authority of the Secretary to carry out a price support or production
adjustment program for any of the 1991 through 1995 crops of an
agricultural commodity established under a provision of law in effect
immediately before the date of enactment of this title.
(b) Liability.--A provision of this title or an
amendment made by
this title shall not affect the liability of any person under any
provision of law as in effect before the date of enactment of this
title.
Subtitle G--Commission on 21st Century Production Agriculture
SEC. 181. <<NOTE: 7 USC 7311.>> ESTABLISHMENT.
There is established a commission to be known as
the ``Commission on
21st Century Production Agriculture'' (in this subtitle referred to
as
the ``Commission'').
SEC. 182. <<NOTE: 7 USC 7312.>> COMPOSITION.
(a) Membership and Appointment.--The Commission shall
be composed of
11 members, appointed as follows:
(1) <<NOTE: President.>> Three members shall be appointed by
the President.
(2) Four members shall be appointed by the Chairman of the
Committee on Agriculture
of the House of Representatives in
consultation with the ranking
minority member of the Committee.
(3) Four members shall be appointed by the Chairman of the
Committee on Agriculture,
Nutrition, and Forestry of the Senate
in consultation with the
ranking minority member of the
Committee.
(b) Qualifications.--At least 1 of the members appointed
under each
of paragraphs (1), (2), and (3) of subsection (a) shall be an individual
who is primarily involved in production agriculture. All other members
of the Commission shall be appointed from among individuals having
knowledge and experience in agricultural production, marketing, finance,
or trade.
(c) Term of Members; Vacancies.--A member of the
Commission shall be
appointed for the life of the Commission. A vacancy on the Commission
shall not affect its powers, but shall be filled in the same manner
as
the original appointment was made.
(d) Time for Appointment; First Meeting.--The members
of the
Commission shall be appointed not later than October 1, 1997. The
Commission shall convene its first meeting to carry out its duties
under
this subtitle 30 days after 6 members of the Commission have been
appointed.
(e) Chairperson.--The chairperson of the Commission
shall be
designated jointly by the Chairman of the Committee on Agriculture
of
the House of Representatives and the Chairman of the Committee on
Agriculture, Nutrition, and Forestry of the Senate from among the
members of the Commission.
SEC. 183. <<NOTE: 7 USC 7313.>> COMPREHENSIVE
REVIEW OF PAST AND FUTURE
OF PRODUCTION AGRICULTURE.
(a) Initial Review.--The Commission shall conduct
a comprehensive
review of changes in the condition of production agriculture in the
United States since the date of enactment of this title and the extent
to which the changes are the result of this title and the amendments
made by this title. The review shall include the following:
(1) An assessment of the initial success of production
flexibility contracts in
supporting the economic viability of
farming in the United States.
(2) An assessment of economic risks to farms delineated by
size of farm operation (such
as small, medium, or large farms)
and region of production.
(3) An assessment of the food security situation in the
United States in the areas
of trade, consumer prices,
international competitiveness
of United States production
agriculture, food supplies,
and humanitarian relief.
(4) An assessment of the changes in farmland values and
agricultural producer incomes
since the date of enactment of
this title.
(5) An assessment of the extent to which regulatory relief
for agricultural producers
has been enacted and implemented,
including the application
of cost/benefit principles in the
issuance of agricultural
regulations.
(6) An assessment of the extent to which tax relief for
agricultural producers has
been enacted in the form of capital
gains tax reductions, estate
tax exemptions, and mechanisms to
average tax loads over high-
and low-income years.
(7) An assessment of the effect of any Federal Government
interference in agricultural
export markets, such as the
imposition of trade embargoes,
and the degree of implementation
and success of international
trade agreements and United States
export programs.
(8) An assessment of the likely effect of the sale, lease,
or transfer of farm poundage
quota for peanuts across State
lines.
(b) Subsequent Review.--The Commission shall conduct
a comprehensive
review of the future of production agriculture in the United States
and
the appropriate role of the Federal Government in support of production
agriculture. The review shall include the following:
(1) An assessment of changes in the condition of production
agriculture in the United
States since the initial review
conducted under subsection
(a).
(2) Identification of the appropriate future relationship of
the Federal Government with
production agriculture after 2002.
(3) An assessment of the personnel and infrastructure
requirements of the Department
of Agriculture necessary to
support the future relationship
of the Federal Government with
production agriculture.
(4) An assessment of economic risks to farms delineated by
size of farm operation (such
as small, medium, or large farms)
and region of production.
(c) Recommendations.--In carrying out the subsequent
review under
subsection (b), the Commission shall develop specific recommendations
for legislation to achieve the appropriate future relationship of the
Federal Government with production agriculture identified under
subsection (a)(2).
SEC. 184. <<NOTE: 7 USC 7314.>> REPORTS.
(a) Report on Initial Review.--Not later than June
1, 1998, 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 initial review conducted under section 183(a).
(b) Report on Subsequent Review.--Not later than
January 1, 2001,
the Commission shall submit to the President and the congressional
committees specified in subsection (a) a report containing the results
of the subsequent review conducted under section 183(b).
SEC. 185. <<NOTE: 7 USC 7315.>> POWERS.
(a) Hearings.--The Commission may, for the purpose
of carrying out
this subtitle, conduct such hearings, sit and act at such times, take
such testimony, and receive such evidence, as the Commission considers
appropriate.
(b) Assistance From Other Agencies.--The Commission
may secure
directly from any department or agency of the Federal Government such
information as may be necessary for the Commission to carry out its
duties under this subtitle. On the request of the chairperson of the
Commission, the head of the department or agency shall, to the extent
permitted by law, furnish such information to the Commission.
(c) Mail.--The Commission may use the United States
mails in the
same manner and under the same conditions as the departments and
agencies of the Federal Government.
(d) Assistance From Secretary.--The Secretary shall
provide to the
Commission appropriate office space and such reasonable administrative
and support services as the Commission may request.
SEC. 186. <<NOTE: 7 USC 7316.>> COMMISSION PROCEDURES.
(a) Meetings.--The Commission shall meet on a regular
basis (as
determined by the chairperson) and at the call of the chairperson or
a
majority of its members.
(b) Quorum.--A majority of the members of the Commission
shall
constitute a quorum for the transaction of business.
SEC. 187. <<NOTE: 7 USC 7317.>> PERSONNEL MATTERS.
(a) Compensation.--Each member of the Commission
shall serve without
compensation, but shall be allowed travel expenses including per diem
in
lieu of subsistence, as authorized by section 5703 of title 5, United
States Code, when engaged in the performance of Commission duties.
(b) Staff.--
(1) Appointment.--The Commission shall appoint a staff
director, who shall be paid
at a rate not to exceed the maximum
rate of basic pay under
section 5376 of title 5, United States
Code, and such professional
and clerical personnel as may be
reasonable and necessary
to enable the Commission to carry out
its duties under this subtitle
without regard to the provisions
of title 5, United States
Code, governing appointments in the
competitive service, and
without regard to the provisions of
chapter 51 and subchapter
III of chapter 53 of such title, or
any other provision of law,
relating to the number,
classification, and General
Schedule rates.
(2) Limitation on compensation.--No employee appointed under
this subsection (other than
the
staff director) may be
compensated at a rate to
exceed the maximum rate applicable to
level GS-15 of the General
Schedule.
(c) Detailed Personnel.--On the request of the chairperson
of the
Commission, the head of any department or agency of the Federal
Government is authorized to detail, without reimbursement, any personnel
of the department or agency to the Commission to assist the Commission
in carrying out its duties under this section. The detail of any
individual may not result in the interruption or loss of civil service
status or other privilege of the individual.
SEC. 188. <<NOTE: 7 USC 7318.>> TERMINATION OF COMMISSION.
The Commission shall terminate on submission of the
final report
required by section 184.
Subtitle H--Miscellaneous Commodity Provisions
SEC. 191. <<NOTE: 7 USC 7331.>> OPTIONS PILOT PROGRAM.
(a) Pilot Programs Authorized.--Until December 31,
2002, the
Secretary of Agriculture may conduct a pilot program for 1 or more
agricultural commodities supported under this title to
ascertain whether futures and options contracts can provide producers
with reasonable protection from the financial risks of fluctuations
in
price, yield, and income inherent in the production and marketing of
the
commodities. The pilot program shall be an alternative to other related
programs of the Department of Agriculture.
(b) Distribution of Pilot Program.--For each agricultural
commodity
included in the pilot program, the Secretary may operate the pilot
program in not more than 100 counties, except that not more than 6
of
the counties may be located in any 1 State. The pilot program for a
commodity shall not be operated in any county for more than 3 of the
1996 through 2002 calendar years.
(c) Eligible Participants.--In operating the pilot
program, the
Secretary may enter into contract with a producer who--
(1) is eligible for a production flexibility contract, a
marketing assistance loan,
or other assistance under this title;
(2) volunteers to participate in the pilot program;
(3) operates a farm located in a county selected for the
pilot program; and
(4) meets such other eligibility requirements as the
Secretary may establish.
(d) Notice to Producers.--The Secretary shall provide
notice to each
producer participating in the pilot program that--
(1) the participation of the producer is voluntary; and
(2) neither the United States, the Commodity Credit
Corporation, the Federal
Crop Insurance Corporation, the
Department of Agriculture,
nor any other Federal agency is
authorized to guarantee
that participants in the pilot program
will be better or worse
off financially as a result of
participation in the pilot
program than the producer would have
been if the producer had
not participated in the pilot program.
(e) Contracts.--The Secretary shall set forth in
each contract under
the pilot program the terms and conditions for participation in the
pilot program and the notice required by subsection (d).
(f) Eligible Markets.--Trades for futures and options
contracts
under the pilot program shall be carried out on commodity futures and
options markets designated as contract markets under the Commodity
Exchange Act (7 U.S.C. 1 et seq.).
(g) Recordkeeping.--A producer participating in
the pilot program
shall compile, maintain, and submit (or authorize the compilation,
maintenance, and submission) of such documentation as the regulations
governing the pilot program require.
(h) Use of Commodity Credit Corporation.--The Secretary
shall fund
and operate the pilot program through the Commodity Credit Corporation.
To the maximum extent practicable, the Secretary shall operate the
pilot
program in a budget neutral manner.
(i) Conforming Repeal.--The Options Pilot Program
Act of 1990
(subtitle E of title XI of Public Law 101-624; 7 U.S.C. 1421 note)
is
repealed.
SEC. 192. <<NOTE: 7 USC 7332.>> RISK MANAGEMENT EDUCATION.
In consultation with the Commodity Futures Trading
Commission, the
Secretary shall provide such education in management of the financial
risks inherent in the production and marketing of agricultural
commodities as the Secretary considers appropriate. As part of such
educational activities, the Secretary may develop and implement programs
to facilitate the participation of agricultural producers in commodity
futures trading programs, forward contracting options, and insurance
protection
programs by assisting and training producers in the usage of such programs.
In implementing this authority, the Secretary may use existing research
and extension
authorities and resources of the Department of Agriculture.
(a) Catastrophic Risk Protection.--
(1) Single delivery.--Section 508(b)(4) of the Federal Crop
Insurance Act (7 U.S.C.
1508(b)(4)) is amended by adding at the
end the following:
``(C) Delivery of coverage.--
``(i) In general.--In full consultation with
approved insurance providers, the Secretary may
continue to offer catastrophic risk protection in
a State (or a portion of a State) through local
offices of the Department if the Secretary
determines that there is an insufficient number of
approved insurance providers operating in the
State or portion of the State to adequately
provide catastrophic risk protection coverage to
producers.
``(ii) Coverage by approved insurance
providers.--To the extent that catastrophic risk
protection coverage by approved insurance
providers is sufficiently available in a State (or
a portion of a State) as determined by the
Secretary, only approved insurance providers may
provide the coverage in the State or portion of
the State.
``(iii) <<NOTE: Announcement.>> Timing of
determinations.--Not later than 90 days after the
date of enactment of this subparagraph, the
Secretary shall announce the results of the
determinations under clause (i) for policies for
the 1997 crop year. For subsequent crop years, the
Secretary shall make the announcement not later
than April 30 of the year preceding the year in
which the crop will be produced, or at such other
times during the year as the Secretary finds
practicable in consultation with affected crop
insurance providers for those States (or portions
of States) in which catastrophic coverage remains
available through local offices of the Department.
``(iv) <<NOTE: Effective date.>> Current
policies.--This clause shall take effect beginning
with the 1997 crop year. Subject to clause (ii)
all catastrophic risk protection policies written
by local offices of the Department shall be
transferred to the approved insurance provider for
performance of all sales, service, and loss
adjustment functions. Any fees in connection with
such policies that are not yet collected at the
time of the transfer shall be payable to the
approved insurance providers assuming the
policies. The transfer process for policies for
the 1997 crop year with sales closing dates before
January 1, 1997, shall begin at the time of the
Secretary's announcement under clause (iii) and be
completed by the sales closing date for the crop
and county. The transfer process for all
subsequent policies (including policies for the
1998 and subsequent crop years) shall
begin at a date that permits the process to be
completed not later than 45 days before the sales
closing date.''.
(2) Waiver of mandatory linkage.--Section 508(b)(7) of the
Federal Crop Insurance Act
(7 U.S.C. 1508(b)(7)) is amended by
striking subparagraph (A)
and inserting the following:
``(A) <<NOTE: Effective date.>> In general.--
Effective for the spring-planted 1996 and subsequent
crops (and fall-planted 1996 crops at the option of the
Secretary), to be eligible for any payment or loan under
the Agricultural Market Transition Act, for the
conservation reserve program, or for any benefit
described in section 371 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2008f), a person shall--
``(i) obtain at least the catastrophic level
of insurance for each crop of economic
significance in which the person has an interest;
or
``(ii) provide a written waiver to the
Secretary that waives any eligibility for
emergency crop loss assistance in connection with
the crop.''.
(3) <<NOTE: 7 USC 1508 note.>> Special rule for 1996.--
(A) Effective period.--This paragraph shall apply
only to the 1996 crop year.
(B) Availability.--During a period of not less than
2 weeks, but not more than 4 weeks, beginning on the
date of enactment of this title, the Secretary shall
provide producers with an opportunity to obtain
catastrophic risk protection insurance under section
508(b) of the Federal Crop Insurance Act (7 U.S.C.
1508(b)) for a spring-planted crop, and limited
additional coverage for malting barley under the Malting
Barley Price and Quality Endorsement. The Federal Crop
Insurance Corporation may attach such limitations and
restrictions on obtaining insurance during this period
as the Corporation considers necessary to maintain the
actuarial soundness of the crop insurance program.
(C) Attachment.--Insurance coverage under any policy
obtained under this paragraph during the extended sales
period shall not attach until 10 days after the
application.
(D) Cancellation.--During the extended period, a
producer may cancel a catastrophic risk protection
policy if--
(i) the policy is a continuation of a policy
that was obtained for a previous crop year; and
(ii) the cancellation request is made before
the acreage reporting date for the policy for the
1996 crop year.
(b) <<NOTE: 7 USC 1508 note.>> Crop Insurance
Pilot Project.--
(1) Coverage.--The Secretary of Agriculture shall develop
and administer a pilot project
for crop insurance coverage that
indemnifies crop losses
due to a natural disaster such as insect
infestation or disease.
(2) Actuarial soundness.--A pilot project under this
paragraph shall be actuarially
sound, as determined by the
Secretary and administered
at no net cost.
(3) Duration.--A pilot project under this paragraph shall be
of two years' duration.
(c) Crop Insurance for Nursery Crops.--Section 508(a)(6)
of the
Federal Crop Insurance Act (7 U.S.C. 1508(a)(6)) is amended by adding
at
the end the following:
``(D) Addition of nursery crops.--Not later than 2
years after the date of enactment of this subparagraph,
the Corporation shall conduct a study and limited pilot
program on the feasibility of insuring nursery crops.''.
(d) Marketing Windows.--Section 508(j) of the Federal
Crop Insurance
Act (7 U.S.C. 1508(j)) is amended by adding at the end the following:
``(4) Marketing windows.--The Corporation shall consider
marketing windows in determining
whether it is feasible to
require planting during
a crop year.''.
(e) Funding.--
(1) Mandatory expenses.--Section 516(a)(2) of the Federal
Crop Insurance Act (7 U.S.C.
1516(a)(2)) is amended--
(A) by inserting ``and'' at the end of subparagraph
(A);
(B) by striking ``; and'' at the end of subparagraph
(B) and inserting a period; and
(C) by striking subparagraph (C).
(2) Funding of sales commissions.--Section 516(b) of the
Federal Crop Insurance Act
(7 U.S.C. 1516(b)) is amended--
(A) in paragraph (1)--
(i) by striking ``(A) In general'' and all
that follows through ``subparagraph (B), in'' and
inserting ``In''; and
(ii) by striking subparagraph (B); and
(B) in paragraph (2)(B), by striking ``subject to
paragraph (1)(B),''.
(3) Other expenses.--Section 516(b)(2)(A) of the Federal
Crop Insurance Act (7 U.S.C.
1516(b)(2)(A)) is amended by
striking ``, noninsured
assistance benefits,''.
(f) Limitation on Multiple Benefits for Same Loss.--Section
508 of
the Federal Crop Insurance Act (7 U.S.C. 1508) is amended by adding
at
the end the following:
``(n) Limitation on Multiple Benefits for Same Loss.--If
a producer
who is eligible to receive benefits under catastrophic risk protection
under subsection (b) is also eligible to receive assistance for the
same
loss under any other program administered by the Secretary, the producer
shall be required to elect whether to receive benefits under this title
or under the other program, but not both. A producer who purchases
additional coverage under subsection (c) may also receive assistance
for
the same loss under other programs administered by the Secretary, except
that the amount received for the loss under the additional coverage
together with the amount received under the other programs may not
exceed the amount of the actual loss of the producer.''.
SEC. 194. ESTABLISHMENT OF OFFICE OF RISK MANAGEMENT.
(a) Establishment.--The Department of Agriculture
Reorganization Act
of 1994 is amended by inserting after section 226 (7 U.S.C. 6932) the
following new section:
``SEC. 226A. <<NOTE: 7 USC 6933.>> OFFICE OF RISK MANAGEMENT.
``(a) Establishment.--Subject to subsection (e),
the Secretary shall
establish and maintain in the Department an independent Office of Risk
Management.
``(b) Functions of the Office of Risk Management.--The
Office of
Risk Management shall have jurisdiction over the following functions:
``(1) Supervision of the Federal Crop Insurance Corporation.
``(2) Administration and oversight of all aspects, including
delivery through local offices
of the Department, of all
programs authorized under
the Federal Crop Insurance Act (7
U.S.C. 1501 et seq.).
``(3) Any pilot or other programs involving revenue
insurance, risk management
savings accounts, or the use of the
futures market to manage
risk and support farm income that may
be established under the
Federal Crop Insurance Act or other
law.
``(4) Such other functions as the Secretary considers
appropriate.
``(c) Administrator.--
``(1) Appointment.--The Office of Risk Management shall be
headed by an Administrator
who shall be appointed by the
Secretary.
``(2) Manager.--The Administrator of the Office of Risk
Management shall also serve
as Manager of the Federal Crop
Insurance Corporation.
``(d) Resources.--
``(1) Functional coordination.--Certain functions of the
Office of Risk Management,
such as human resources, public
affairs, and legislative
affairs, may be provided by a
consolidation of such functions
under the Under Secretary of
Agriculture for Farm and
Foreign Agricultural Services.
``(2) Minimum provisions.--Notwithstanding paragraph (1) or
any other provision of law
or order of the Secretary, the
Secretary shall provide
the Office of Risk Management with human
and capital resources sufficient
for the Office to carry out its
functions in a timely and
efficient manner.''.
(b) Fiscal Year 1996 Funding.--From funds appropriated
for the
salaries and expenses of the Consolidated Farm Service Agency in the
Agriculture, Rural Development, Food and Drug Administration, and
Related Agencies Appropriations Act, 1996 (Public Law 104-37), the
Secretary of Agriculture may use such sums as necessary for the salaries
and expenses of the Office of Risk Management established under
subsection (a).
(c) Conforming Amendment.--Section 226(b) of the
Act (7 U.S.C.
6932(b)) is amended by striking paragraph (2).
Section 508(h) of the Federal Crop Insurance Act
(7 U.S.C. 1508(h))
is amended by adding at the end the following:
``(9) Revenue insurance pilot program.--
``(A) In general.--Not later than December 31, 1996,
the Secretary shall carry out a pilot program in a
limited number of counties, as determined by the
Secretary, for crop years 1997, 1998, 1999, and 2000,
under which a producer of wheat, feed grains, soybeans,
or such other commodity as the Secretary considers
appropriate may elect to receive insurance against loss
of revenue, as determined by the Secretary.
``(B) Administration.--Revenue insurance under this
paragraph shall--
``(i) be offered through reinsurance
arrangements with private insurance companies;
``(ii) offer at least a minimum level of
coverage that is an alternative to catastrophic
crop insurance;
``(iii) be actuarially sound; and
``(iv) require the payment of premiums and
administrative fees by an insured producer.''.
SEC. 196. ADMINISTRATION AND OPERATION OF NONINSURED
CROP ASSISTANCE
PROGRAM.
(a) Operation and Administration of Program.--
(1) In general.--In the case of an eligible crop described
in paragraph (2), the Secretary
of Agriculture shall operate a
noninsured crop disaster
assistance program to provide coverage
equivalent to the catastrophic
risk protection otherwise
available under section
508(b) of the Federal Crop Insurance Act
(7 U.S.C. 1508(b)). The
Secretary shall carry out this section
through the Consolidated
Farm Service Agency (in this section
referred to as the ``Agency'').
(2) Eligible crops.--
(A) In general.--In this section, the term
``eligible crop'' means each commercial crop or other
agricultural commodity (except livestock)--
(i) for which catastrophic risk protection
under section 508(b) of the Federal Crop Insurance
Act (7 U.S.C. 1508(b)) is not available; and
(ii) that is produced for food or fiber.
(B) Crops specifically included.--The term
``eligible crop'' shall include floricultural,
ornamental nursery, and Christmas tree crops, turfgrass
sod, seed crops, aquaculture (including ornamental
fish), and industrial crops.
(3) Cause of loss.--To qualify for assistance under this
section, the losses of the
noninsured commodity shall be due to
drought, flood, or other
natural disaster, as determined by the
Secretary.
(b) Application for Noninsured Crop Disaster Assistance.--
(1) Timely application.--To be eligible for assistance under
this section, a producer
shall submit an application for
noninsured crop disaster
assistance at a local office of the
Department. The application
shall be in such form, contain such
information, and be submitted
at such time as the Secretary may
require.
(2) Records.--A producer shall provide records, as required
by the Secretary, of crop
acreage, acreage yields, and
production.
(3) Acreage reports.--A producer shall provide reports on
acreage planted or prevented
from being planted, as required by
the Secretary, by the designated
acreage reporting date for the
crop and location as established
by the Secretary.
(c) Loss Requirements.--
(1) Required area loss.--A producer of an eligible crop
shall not receive noninsured
crop disaster assistance unless the
average yield for that crop,
or an equivalent measure in the
event yield data are not
available, in an area falls below 65
percent of the expected
area yield, as established by the
Secretary.
(2) Prevented planting.--Subject to paragraph (1), the
Secretary shall make a prevented
planting noninsured crop
disaster assistance payment
if the producer is prevented from
planting more than 35 percent
of the acreage intended for the
eligible crop because of
drought, flood, or other natural
disaster, as determined
by the Secretary.
(3) Reduced yields.--Subject to paragraph (1), the Secretary
shall make a reduced yield
noninsured crop disaster assistance
payment to a producer if
the total quantity of the eligible crop
that the producer is able
to harvest on any farm is, because of
drought, flood, or other
natural disaster as determined by the
Secretary, less than 50
percent of the expected individual yield
for the crop, as determined
by the Secretary, factored for the
interest of the producer
for the crop.
(d) Payment.--The Secretary shall make available
to a producer
eligible for noninsured assistance under this section a payment computed
by multiplying--
(1) the quantity that is less than 50 percent of the
established yield for the
crop; by
(2)(A) in the case of each of the 1996 through 1998 crop
years, 60 percent of the
average market price for the crop (or
any comparable coverage
determined by the Secretary); or
(B) in the case of each of the 1999 and subsequent crop
years, 55 percent of the
average market price for the crop (or
any comparable coverage
determined by the Secretary); by
(3) a payment rate for the type of crop (as determined by
the Secretary) that--
(A) in the case of a crop that is produced with a
significant and variable harvesting expense, reflects
the decreasing cost incurred in the production cycle for
the crop that is--
(i) harvested;
(ii) planted but not harvested; and
(iii) prevented from being planted because of
drought, flood, or other natural disaster (as
determined by the Secretary); and
(B) in the case of a crop that is not produced with
a significant and variable harvesting expense, as
determined by the Secretary.
(e) Yield Determinations.--
(1) Establishment.--The Secretary shall establish farm
yields for purposes of providing
noninsured crop disaster
assistance under this section.
(2) Actual production history.--The Secretary shall
determine yield coverage
using the actual production history of
the producer over a period
of not less than the 4 previous
consecutive crop years and
not more than 10 consecutive crop
years. Subject to paragraph
(3), the yield for the year in which
noninsured crop disaster
assistance is sought shall be equal to
the average of the actual
production history of the producer
during the period considered.
(3) Assignment of yield.--If a producer does not submit
adequate documentation of
production history to determine a crop
yield under paragraph (2),
the Secretary shall assign to the
producer a yield equal to
not less than 65 percent of
the transitional yield of
the producer (adjusted to reflect
actual production reflected
in the records acceptable to the
Secretary for continuous
years), as specified in regulations
issued by the Secretary
based on production history
requirements.
(4) Prohibition on assigned yields in certain counties.--
(A) In general.--
(i) Documentation.--If sufficient data are
available to demonstrate that the acreage of a
crop in a county for the crop year has increased
by more than 100 percent over any year in the
preceding 7 crop years or, if data are not
available, if the acreage of the crop in the
county has increased significantly from the
previous crop years, a producer must provide such
detailed documentation of production costs, acres
planted, and yield for the crop year for which
benefits are being claimed as is required by the
Secretary. If the Secretary determines that the
documentation provided is not sufficient, the
Secretary may require documenting proof that the
crop, had the crop been harvested, could have been
marketed at a reasonable price.
(ii) Prohibition.--Except as provided in
subparagraph (B), a producer who produces a crop
on a farm located in a county described in clause
(i) may not obtain an assigned yield.
(B) Exception.--A crop or a producer shall not be
subject to this subsection if--
(i) the planted acreage of the producer for
the crop has been inspected by a third party
acceptable to the Secretary; or
(ii)(I) the County Executive Director and the
State Executive Director recommend an exemption
from the requirement to the Administrator of the
Agency; and
(II) the Administrator approves the
recommendation.
(5) Limitation on receipt of subsequent assigned yield.--A
producer who receives an
assigned yield for the current year of
a natural disaster because
required production records were not
submitted to the local office
of the Department shall not be
eligible for an assigned
yield for the year of the next natural
disaster unless the required
production records of the previous
1 or more years (as applicable)
are provided to the local
office.
(6) Yield variations due to different farming practices.--
The Secretary shall ensure
that noninsured crop disaster
assistance accurately reflects
significant yield variations due
to different farming practices,
such as between irrigated and
nonirrigated acreage.
(f) Contract Payments.--A producer who has received
a guaranteed
payment for production, as opposed to delivery, of a crop pursuant
to a
contract shall have the production of the producer adjusted upward
by
the amount of the production equal to the amount of the contract payment
received.
(g) Use of Commodity Credit Corporation.--The Secretary
may use the
funds of the Commodity Credit Corporation to carry out this section.
(h) Exclusions.--Noninsured crop disaster assistance
under this
section shall not cover losses due to--
(1) the neglect or malfeasance of the producer;
(2) the failure of the producer to reseed to the same crop
in those areas and under
such circumstances where it is
customary to reseed; or
(3) the failure of the producer to follow good farming
practices, as determined
by the Secretary.
(i) Payment and Income Limitations.--
(1) Definitions.--In this subsection:
(A) Person.--The term ``person'' has the meaning
provided the term in regulations issued by the
Secretary. The regulations shall conform, to the extent
practicable, to the regulations defining the term
``person'' issued under section 1001 of the Food
Security Act of 1985 (7 U.S.C. 1308).
(B) Qualifying gross revenues.--The term
``qualifying gross revenues'' means--
(i) if a majority of the gross revenue of the
person is received from farming, ranching, and
forestry operations, the gross revenue from the
farming, ranching, and forestry operations of the
person; and
(ii) if less than a majority of the gross
revenue of the person is received from farming,
ranching, and forestry operations, the gross
revenue of the person from all sources.
(2) Payment limitation.--The total amount of payments that a
person shall be entitled
to receive annually under this section
may not exceed $100,000.
(3) Limitation on multiple benefits for same loss.--If a
producer who is eligible
to receive benefits under this section
is also eligible to receive
assistance for the same loss under
any other program administered
by the Secretary, the producer
shall be required to elect
whether to receive benefits under
this section or under the
other program, but not both.
(4) Income limitation.--A person who has qualifying gross
revenues in excess of the
amount specified in section 2266(a) of
the Food, Agriculture, Conservation,
and Trade Act of 1990 (7
U.S.C. 1421 note) (as in
effect on November 28, 1990) during the
taxable year (as determined
by the Secretary) shall not be
eligible to receive any
noninsured assistance payment under this
section.
(5) Regulations.--The Secretary shall issue regulations
prescribing such rules as
the Secretary determines necessary to
ensure a fair and equitable
application of section 1001 of the
Food Security Act of 1985
(7 U.S.C. 1308), the general payment
limitation regulations of
the Secretary, and the limitations
established under this subsection.
(j) Conforming Repeal.--Section 519 of the Federal
Crop Insurance
Act (7 U.S.C. 1519) is repealed.