Fair Act (1996)

PUBLIC LAW 104–127—APR. 4, 1996

FEDERAL AGRICULTURE IMPROVEMENT AND
REFORM ACT OF 1996

110 STAT. 888

PUBLIC LAW 104–127—APR. 4, 1996

Public Law 104–127
104th Congress
An Act
Apr. 4, 1996
[H.R. 2854]
Federal
Agriculture
Improvement
and Reform Act
of 1996.
7 USC 7201 note.

To modify the operation of certain agricultural programs.

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE.—This Act may be cited as the ‘‘Federal Agriculture Improvement and Reform Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I—AGRICULTURAL MARKET TRANSITION ACT
Subtitle A—Short Title, Purpose, and Definitions
Sec. 101. Short title and purpose.
Sec. 102. Definitions.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Sec.
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111.
112.
113.
114.
115.
116.
117.
118.

Subtitle B—Production Flexibility Contracts
Authorization for use of production flexibility contracts.
Elements of contracts.
Amounts available for contract payments.
Determination of contract payments under contracts.
Payment limitations.
Violations of contract.
Transfer or change of interest in lands subject to contract.
Planting flexibility.

Subtitle C—Nonrecourse Marketing Assistance Loans and Loan Deficiency
Payments
131. Availability of nonrecourse marketing assistance loans.
132. Loan rates for marketing assistance loans.
133. Term of loans.
134. Repayment of loans.
135. Loan deficiency payments.
136. Special marketing loan provisions for upland cotton.
137. Availability of recourse loans for high moisture feed grains and seed cotton.
Subtitle D—Other Commodities

CHAPTER 1—DAIRY
Milk price support program.
Recourse loan program for commercial processors of dairy products.
Consolidation and reform of Federal milk marketing orders.
Effect on fluid milk standards in State of California.
Milk manufacturing marketing adjustment.
Promotion.
Northeast Interstate Dairy Compact.
Dairy export incentive program.
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.
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141.
142.
143.
144.
145.
146.
147.
148.
149.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 889

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
Sec. 155. Peanut program.
Sec. 156. Sugar program.
Sec.
Sec.
Sec.
Sec.
Sec.

161.
162.
163.
164.
165.

AND

SUGAR

Subtitle E—Administration
Administration.
Adjustments of loans.
Commodity Credit Corporation interest rate.
Personal liability of producers for deficiencies.
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.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

181.
182.
183.
184.
185.
186.
187.
188.

Subtitle G—Commission on 21st Century Production Agriculture
Establishment.
Composition.
Comprehensive review of past and future of production agriculture.
Reports.
Powers.
Commission procedures.
Personnel matters.
Termination of Commission.

Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

191.
192.
193.
194.
195.
196.

Subtitle H—Miscellaneous Commodity Provisions
Options pilot program.
Risk management education.
Crop insurance.
Establishment of Office of Risk Management.
Revenue insurance.
Administration and operation of noninsured crop assistance program.
TITLE II—AGRICULTURAL TRADE

Subtitle A—Amendments to Agricultural Trade Development and Assistance Act of
1954 and Related Statutes
Sec. 201. Food aid to developing countries.
Sec. 202. Trade and development assistance.
Sec. 203. Agreements regarding eligible countries and private entities.
Sec. 204. Terms and conditions of sales.
Sec. 205. Use of local currency payment.
Sec. 206. Value-added foods.
Sec. 207. Eligible organizations.
Sec. 208. Generation and use of foreign currencies.
Sec. 209. General levels of assistance under Public Law 480.
Sec. 210. Food Aid Consultative Group.
Sec. 211. Support of nongovernmental organizations.
Sec. 212. Commodity determinations.
Sec. 213. General provisions.
Sec. 214. Agreements.
Sec. 215. Use of Commodity Credit Corporation.
Sec. 216. Administrative provisions.
Sec. 217. Expiration date.
Sec. 218. Regulations.
Sec. 219. Independent evaluation of programs.
Sec. 220. Authorization of appropriations.
Sec. 221. Coordination of foreign assistance programs.
Sec. 222. Micronutrient fortification pilot program.
Sec. 223. Use of certain local currency.
Sec. 224. Farmer-to-farmer program.
Sec. 225. Food security commodity reserve.
Sec. 226. Protein byproducts derived from alcohol fuel production.
Sec. 227. Food for progress program.
Sec. 228. Use of foreign currency proceeds from export sales financing.

110 STAT. 890

PUBLIC LAW 104–127—APR. 4, 1996

Sec. 229. Stimulation of foreign production.
Sec.
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241.
242.
243.
244.
245.
246.
247.
248.
249.
250.
251.
252.

Subtitle B—Amendments to Agricultural Trade Act of 1978
Agricultural export promotion strategy.
Implementation of commitments under Uruguay Round Agreements.
Export credits.
Market access program.
Export enhancement program.
Arrival certification.
Compliance.
Regulations.
Trade compensation and assistance programs.
Foreign Agricultural Service.
Reports.
Foreign market development cooperator program.

Subtitle C—Miscellaneous Agricultural Trade Provisions
Edward R. Madigan United States Agricultural Export Excellence Award.
Reporting requirements relating to tobacco.
Triggered export enhancement.
Disposition of commodities to prevent waste.
Debt-for-health-and-protection swap.
Policy on expansion of international markets.
Policy on maintenance and development of export markets.
Policy on trade liberalization.
Agricultural trade negotiations.
Policy on unfair trade practices.
Agricultural aid and trade missions.
Annual reports by agricultural attaches.
World livestock market price information.
Orderly liquidation of stocks.
Sales of extra long staple cotton.
Regulations.
Emerging markets.
Reimbursement for overhead expenses.
Labeling of domestic and imported lamb and mutton.
Import assistance for CBI beneficiary countries and the Philippines.
Studies, reports, and other provisions.
Sense of Congress concerning multilateral disciplines on credit guarantees.
Sec. 283. International Cotton Advisory Committee.
Sec.
Sec.
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Sec.
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261.
262.
263.
264.
265.
266.
267.
268.
269.
270.
271.
272.
273.
274.
275.
276.
277.
278.
279.
280.
281.
282.

TITLE III—CONSERVATION
Subtitle A—Definitions
Sec. 301. Definitions applicable to highly erodible cropland conservation.
Subtitle B—Highly Erodible Land Conservation
Program ineligibility.
Conservation reserve lands.
Good faith exemption.
Expedited procedures for granting variances from conservation plans.
Development and implementation of conservation plans and conservation
systems.
Sec. 316. Investigation of possible compliance deficiencies.
Sec. 317. Wind erosion estimation pilot project.
Sec.
Sec.
Sec.
Sec.
Sec.

311.
312.
313.
314.
315.

Subtitle C—Wetland Conservation
Program ineligibility.
Delineation of wetlands; exemptions to program ineligibility.
Consultation and cooperation requirements.
Application of program ineligibility to affiliated persons.
Clarification of definition of agricultural lands in memorandum of agreement.
Sec. 326. Effective date.
Sec.
Sec.
Sec.
Sec.
Sec.

321.
322.
323.
324.
325.

Subtitle D—Environmental Conservation Acreage Reserve Program
Sec. 331. Environmental conservation acreage reserve program.
Sec. 332. Conservation reserve program.
Sec. 333. Wetlands reserve program.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 891

Sec. 334. Environmental quality incentives program.
Sec. 335. Conservation farm option.
Sec. 336. Repeal of superseded authorities.
Subtitle E—Conservation Funding and Administration
Sec. 341. Conservation funding and administration.
Sec. 342. State technical committees.
Sec. 343. Public notice and comment for revisions to certain State technical guides.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
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Sec.
Sec.
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351.
352.
353.
354.
355.
356.
357.
358.
359.
360.

Subtitle F—National Natural Resources Conservation Foundation
Short title.
Definitions.
National Natural Resources Conservation Foundation.
Composition and operation.
Officers and employees.
Corporate powers and obligations of the Foundation.
Administrative services and support.
Audits and petition of Attorney General for equitable relief.
Release from liability.
Authorization of appropriations.

Subtitle G—Forestry
Sec. 371. Office of International Forestry.
Sec. 372. Cooperative work for protection, management, and improvement of National Forest System.
Sec. 373. Forestry incentives program.
Sec. 374. Optional State grants for forest legacy program.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

381.
382.
383.
384.
385.
386.
387.
388.
389.
390.
391.

Subtitle H—Miscellaneous Conservation Provisions
Conservation activities of Commodity Credit Corporation.
Floodplain easements.
Resource conservation and development program.
Repeal of report requirement.
Flood risk reduction.
Conservation of private grazing land.
Wildlife habitat incentives program.
Farmland protection program.
Interim moratorium on bypass flows.
Everglades ecosystem restoration.
Agricultural air quality research oversight.

Sec.
Sec.
Sec.
Sec.
Sec.

401.
402.
403.
404.
405.

TITLE IV—NUTRITION ASSISTANCE
Food stamp program.
Commodity distribution program; commodity supplemental food program.
Emergency food assistance program.
Soup kitchen and food bank program.
National commodity processing.
TITLE V—AGRICULTURAL PROMOTION

Subtitle A—Commodity Promotion and Evaluation
Sec. 501. Commodity promotion and evaluation.
Subtitle B—Issuance of Orders for Promotion, Research, and Information Activities
Regarding Agricultural Commodities
Sec. 511. Short title.
Sec. 512. Findings and purpose.
Sec. 513. Definitions.
Sec. 514. Issuance of orders.
Sec. 515. Required terms in orders.
Sec. 516. Permissive terms in orders.
Sec. 517. Assessments.
Sec. 518. Referenda.
Sec. 519. Petition and review of orders.
Sec. 520. Enforcement.
Sec. 521. Investigations and power to subpoena.
Sec. 522. Suspension or termination.
Sec. 523. Amendments to orders.
Sec. 524. Effect on other laws.
Sec. 525. Regulations.

110 STAT. 892

PUBLIC LAW 104–127—APR. 4, 1996

Sec. 526. Authorization of appropriations.
Sec.
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531.
532.
533.
534.
535.
536.
537.
538.
539.
540.
541.
542.
543.

Subtitle C—Canola and Rapeseed
Short title.
Findings and declaration of policy.
Definitions.
Issuance and amendment of orders.
Required terms in orders.
Assessments.
Referenda.
Petition and review.
Enforcement.
Investigations and power to subpoena.
Suspension or termination.
Regulations.
Authorization of appropriations.

Sec.
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551.
552.
553.
554.
555.
556.
557.
558.
559.
560.
561.
562.
563.
564.

Subtitle D—Kiwifruit
Short title.
Findings and purposes.
Definitions.
Issuance of orders.
National Kiwifruit Board.
Required terms in order.
Permissive terms in order.
Petition and review.
Enforcement.
Investigations and power to subpoena.
Referenda.
Suspension or termination.
Regulations.
Authorization of appropriations.

Sec.
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571.
572.
573.
574.
575.
576.
577.
578.
579.
580.
581.
582.

Subtitle E—Popcorn
Short title.
Findings and declaration of policy.
Definitions.
Issuance of orders.
Required terms in orders.
Referenda.
Petition and review.
Enforcement.
Investigations and power to subpoena.
Relation to other programs.
Regulations.
Authorization of appropriations.

Subtitle F—Miscellaneous
Sec. 591. Maintenance of records for honey promotion program.
TITLE VI—CREDIT
Sec.
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601.
602.
603.
604.
605.
606.

Sec.
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611.
612.
613.
614.
615.
616.
617.

Subtitle A—Farm Ownership Loans
Limitation on direct farm ownership loans.
Purposes of loans.
Soil and water conservation and protection.
Interest rate requirements.
Insurance of loans.
Loans guaranteed.
Subtitle B—Operating Loans
Limitation on direct operating loans.
Purposes of operating loans.
Participation in loans.
Line-of-credit loans.
Insurance of operating loans.
Special assistance for beginning farmers and ranchers.
Limitation on period for which borrowers are eligible for guaranteed assistance.

Subtitle C—Emergency Loans
Sec. 621. Hazard insurance requirement.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 893

Sec. 622. Narrowing of authority to waive application of the credit elsewhere test.
Sec. 623. Linking of emergency loans for crop or livestock changes to natural disasters.
Sec. 624. Maximum emergency loan indebtedness.
Sec. 625. Establishment of date for emergency loan asset valuation.
Sec. 626. Insurance of emergency loans.
Sec.
Sec.
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Sec.

631.
632.
633.
634.
635.

Sec.
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636.
637.
638.
639.
640.
641.
642.
643.
644.
645.
646.
647.
648.
649.
650.

Subtitle D—Administrative Provisions
Temporary authority to enter into contracts.
Use of collection agencies.
Notice of loan service programs.
Clarification of written statement required of borrowers.
Annual review of the credit history, business operation, and continued eligibility of a borrower.
Extension of veterans preference.
Verification of the credit elsewhere test.
Sale of property.
Easements on inventoried property.
Definitions.
Authorization for loans.
Contracts on loan security properties.
List of certified lenders and inventory property demonstration project.
Homestead property.
Restructuring.
Transfer of inventory land for conservation purposes.
Implementation of target participation rates.
Delinquent borrowers.
Short form certification of farm program borrower compliance.
Credit study.

Subtitle E—General Provisions
Sec. 661. Conforming amendments.
Sec. 662. Electronic filing of effective financing statements under the clear title provisions of the Food Security Act of 1985.
Sec. 663. Effective date.
TITLE VII—RURAL DEVELOPMENT
Subtitle A—Amendments to the Food, Agriculture, Conservation, and Trade Act of
1990
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

701.
702.
703.
704.
705.
706.
707.
708.
709.
710.
711.

CHAPTER 1—GENERAL PROVISIONS
Rural investment partnerships.
Water and waste facility financing.
Rural wastewater circuit rider program.
Telemedicine and distance learning services in rural areas.
Limitation on authorization of appropriations for rural technology grants.
Demonstration projects.
Monitoring the economic progress of rural America.
Analysis by Office of Technology Assessment.
Rural health infrastructure improvement.
Census of agriculture.
Study of the transportation of fertilizer and agricultural chemicals to
farmers.

CHAPTER 2—ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION
Sec. 721. Definitions.
Sec. 722. Alternative Agricultural Research and Commercialization Corporation.
Sec. 723. Board of directors, employees, and facilities.
Sec. 724. Research and development grants, contracts, and agreements.
Sec. 725. Commercialization assistance.
Sec. 726. General rules regarding the provision of assistance.
Sec. 727. Regional centers.
Sec. 728. Alternative Agricultural Research and Commercialization Revolving
Fund.
Sec. 729. Procurement preferences for products receiving Corporation assistance.
Sec. 730. Business plan and feasibility study and report.
Subtitle B—Amendments to the Consolidated Farm and Rural Development Act
CHAPTER 1—GENERAL PROVISIONS
Sec. 741. Water and waste facility loans and grants.

110 STAT. 894

PUBLIC LAW 104–127—APR. 4, 1996

Sec. 742. Emergency community water assistance grant program for small communities.
Sec. 743. Emergency community water assistance grant program for smallest communities.
Sec. 744. Agricultural Credit Insurance Fund.
Sec. 745. Rural Development Insurance Fund.
Sec. 746. Insured watershed and resource conservation and development loans.
Sec. 747. Rural industrialization assistance.
Sec. 748. Administration.
Sec. 749. Authorization of appropriations.
Sec. 750. Testimony before congressional committees.
Sec. 751. Prohibition on use of loans for certain purposes.
Sec. 752. Rural development certified lenders program.
Sec. 753. System for delivery of certain rural development programs.
Sec. 754. State rural economic development review panel.
Sec. 755. Limited transfer authority of loan amounts.
Sec. 756. Allocation and transfer of loan guarantee authority.
Sec. 757. Water systems for rural and Native villages in Alaska.
Sec. 758. Application requirements relating to water and waste disposal loan and
grant programs.
Sec. 759. National Sheep Industry Improvement Center.
Sec. 759A. Cooperative agreements.
Sec. 759B. Eligibility for grants to broadcasting systems.
CHAPTER 2—RURAL COMMUNITY ADVANCEMENT PROGRAM
Sec. 761. Rural community advancement program.
Sec. 762. Simplified, uniform application for assistance from all Federal rural development programs.
Sec. 763. Community facilities grant program.
Subtitle C—Amendments to the Rural Electrification Act of 1936
Purposes; investigations and reports.
Authorization of appropriations.
Loans for electrical plants and transmission lines.
Loans for electrical and plumbing equipment.
Testimony on budget requests.
Transfer of functions of administration created by Executive order.
Annual report.
Prohibition on restricting water and waste facility services to electric customers.
Sec. 779. Telephone loan terms and conditions.
Sec. 780. Privatization program.
Sec. 781. Rural Business Incubator Fund.
Sec.
Sec.
Sec.
Sec.
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771.
772.
773.
774.
775.
776.
777.
778.

Subtitle D—Miscellaneous Rural Development Provisions
Sec. 791. Interest rate formula.
Sec. 792. Grants for financially stressed farmers, dislocated farmers, and rural
families.
Sec. 793. Fund for Rural America.
Sec. 794. Under Secretary of Agriculture for Rural Economic and Community Development renamed the Under Secretary of Agriculture for Rural Development.
TITLE VIII—RESEARCH, EXTENSION, AND EDUCATION
Subtitle A—Modification and Extension of Activities Under 1977 Act
Sec. 801. Purposes of agricultural research, extension, and education.
Sec. 802. National Agricultural Research, Extension, Education, and Economics Advisory Board.
Sec. 803. Federal Advisory Committee Act exemption for Federal-State cooperative
programs.
Sec. 804. Coordination and planning of agricultural research, extension, and education.
Sec. 805. Grants and fellowships for food and agricultural sciences education.
Sec. 806. Grants for research on the production and marketing of alcohols and industrial hydrocarbons from agricultural commodities and forest products.
Sec. 807. Policy research centers.
Sec. 808. Human nutrition intervention and health promotion research program.
Sec. 809. Food and nutrition education program.
Sec. 810. Purposes and findings relating to animal health and disease research.

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110 STAT. 895

Sec. 811. Animal health and disease continuing research.
Sec. 812. Animal health and disease national or regional research.
Sec. 813. Grant program to upgrade agricultural and food sciences facilities at 1890
land-grant colleges.
Sec. 814. National research and training centennial centers.
Sec. 815. Programs for Hispanic-serving institutions.
Sec. 816. International agricultural research and extension.
Sec. 817. Authorization of appropriations for agricultural research programs.
Sec. 818. Authorization of appropriations for extension education.
Sec. 819. Supplemental and alternative crops research.
Sec. 820. Aquaculture assistance programs.
Sec. 821. Authorization of appropriations for rangeland research.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.

Subtitle B—Modification and Extension of Activities Under 1990 Act
831. Water quality research, education, and coordination.
832. National genetics resources program.
833. National agricultural weather information system.
834. Livestock product safety and inspection program.
835. Plant genome mapping program.
836. Certain specialized research programs.
837. Agricultural telecommunications program.
838. National centers for agricultural product quality research.
839. Red meat safety research center.
840. Indian reservation extension agent program.
841. Assistive technology program for farmers with disabilities.
842. National rural information center clearinghouse.
843. Global climate change.

Sec.
Sec.
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851.
852.
853.
854.
855.
856.
857.
858.
859.

Sec. 860.
Sec. 861.
Sec.
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862.
863.
864.
865.
866.
867.
868.
869.
870.
871.

Sec. 872.
Sec. 873.
Sec. 874.

Subtitle C—Repeal of Certain Activities and Authorities
Subcommittee on Food, Agricultural, and Forestry Research.
Joint Council on Food and Agricultural Sciences.
Agricultural Science and Technology Review Board.
Animal Health Science Research Advisory Board.
Resident instruction program at 1890 land-grant colleges.
Grants to States for international trade development centers.
Rangeland research.
Composting research and extension program.
Education program regarding handling of agricultural chemicals and agricultural chemical containers.
Program administration regarding sustainable agriculture research and
education.
Research regarding production, preparation, processing, handling, and
storage of agricultural products.
Plant and animal pest and disease control program.
Certain specialized research programs.
Commission on agricultural research facilities.
Special grant to study constraints on agricultural trade.
Pilot project to coordinate food and nutrition education programs.
Demonstration areas for rural economic development.
Technical advisory committee regarding global climate change.
Committee of nine under Hatch Act of 1887.
Cotton crop reports.
Rural economic and business development and additional research grants
under title V of Rural Development Act of 1972.
Human nutrition research.
Grants to upgrade 1890 land-grant college extension facilities.
Indian subsistence farming demonstration grant program.

Subtitle D—Miscellaneous Research Provisions
Sec. 881. Critical agricultural materials research.
Sec. 882. Memorandum of agreement regarding 1994 Institutions.
Sec. 883. Smith-Lever Act funding for 1890 land-grant colleges, including Tuskegee
University.
Sec. 884. Agricultural research facilities.
Sec. 885. National competitive research initiative.
Sec. 886. Rural development research and education.
Sec. 887. Dairy goat research program.
Sec. 888. Competitive grants for research to eradicate and control brown citrus
aphid and citrus tristeza virus.
Sec. 889. Stuttgart National Aquaculture Research Center.
Sec. 890. Expansion of authorities related to National Arboretum.

110 STAT. 896

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Sec. 891. Transfer of aquacultural research center.
Sec. 892. Use of remote sensing data and other data to anticipate potential food,
feed, and fiber shortages or excesses and to provide timely information
to assist farmers with planting decisions.
Sec. 893. Sense of Senate regarding methyl bromide alternative research and extension activities.
Subtitle E—Research Authority After Fiscal Year 1997
Sec. 897. Authorization of appropriations.
Sec. 898. Activities subject to availability of appropriations.
TITLE IX—MISCELLANEOUS

Agricultural
Market
Transition Act.
Contracts.
Loans.

7 USC 7201.

Sec.
Sec.
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901.
902.
903.
904.
905.

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911.
912.
913.
914.
915.
916.
917.
918.
919.
920.
921.

Sec.
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922.
923.
924.
925.
926.
927.
928.

Subtitle A—Commercial Transportation of Equine for Slaughter
Findings.
Definitions.
Regulation of commercial transportation of equine for slaughter.
Limitation of authority to equine for slaughter.
Effective date.
Subtitle B—General Provisions
Interstate quarantine.
Cotton classification services.
Plant variety protection for certain tuber propagated plant varieties.
Swine health protection.
Designation of Mount Pleasant National Scenic Area.
Pseudorabies eradication program.
Collection and use of agricultural quarantine and inspection fees.
Meat and poultry inspection.
Reimbursable agreements.
Overseas tort claims.
Operation of Graduate School of Department of Agriculture
nonappropriated fund instrumentality.
Student internship programs.
Conveyance of excess Federal personal property.
Conveyance of land to White Oak Cemetery.
Sale of land by the University of Arkansas.
Designation of Dale Bumpers Small Farms Research Center.
Department of Agriculture Washington Area Strategic Space Plan.
Severability.

as

TITLE I—AGRICULTURAL MARKET
TRANSITION ACT
Subtitle A—Short Title, Purpose, and
Definitions
SEC. 101. 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.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 897

SEC. 102. DEFINITIONS.

In this title:
(1) AGRICULTURAL ACT OF 1949.—Except in section 171,
the term ‘‘Agricultural Act of 1949’’ means the Agricultural
Act of 1949 (7 U.S.C. 1421 et seq.), as in effect prior to the
suspensions under section 171(b)(1).
(2) CONSIDERED PLANTED.—The term ‘‘considered planted’’
means 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

7 USC 7202.

110 STAT. 898

PUBLIC LAW 104–127—APR. 4, 1996
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
7 USC 7211.

SEC. 111. 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 899

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. 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

7 USC 7212.

110 STAT. 900

PUBLIC LAW 104–127—APR. 4, 1996

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.
7 USC 7213.

SEC. 113. 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.

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110 STAT. 901

(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. 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—

7 USC 7214.

110 STAT. 902

PUBLIC LAW 104–127—APR. 4, 1996

(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.
7 USC 7215.

SEC. 115. 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 903

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. 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

7 USC 7216.

110 STAT. 904

PUBLIC LAW 104–127—APR. 4, 1996

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.
7 USC 7217.

SEC. 117. 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.
7 USC 7218.

SEC. 118. 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 doublecropping of contract commodities with fruits or vegetables,
as determined by the Secretary, in which case the doublecropping 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.

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110 STAT. 905

Subtitle C—Nonrecourse Marketing Assistance Loans and Loan Deficiency Payments
SEC. 131. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE
LOANS.

7 USC 7231.

(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. 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

7 USC 7232.

110 STAT. 906

PUBLIC LAW 104–127—APR. 4, 1996
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 13⁄32-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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 907

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. 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

7 USC 7233.

110 STAT. 908

PUBLIC LAW 104–127—APR. 4, 1996

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.
7 USC 7234.

SEC. 134. REPAYMENT OF LOANS.

(a) REPAYMENT RATES FOR WHEAT, FEED GRAINS, AND OILSEEDS.—The Secretary shall permit a producer to repay a marketing

Regulations.

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) 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 909

(B) the Friday through Thursday average price
quotation for the lowest-priced United States growth as
quoted for Middling (M) 13⁄32-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) 13⁄32-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 13⁄32-inch cotton delivered C.I.F. Northern Europe;
and
(B) the Northern Europe price.
SEC. 135. LOAN DEFICIENCY PAYMENTS.

7 USC 7235.

(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. 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

7 USC 7236.

110 STAT. 910

PUBLIC LAW 104–127—APR. 4, 1996
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) 13⁄32-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) 13⁄32-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.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 911

(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) 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) 13⁄32-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) 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

President.

President.

110 STAT. 912

PUBLIC LAW 104–127—APR. 4, 1996
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).

7 USC 7237.

SEC. 137. 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 913

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).

110 STAT. 914

PUBLIC LAW 104–127—APR. 4, 1996

Subtitle D—Other Commodities
CHAPTER 1—DAIRY
7 USC 7251.

SEC. 141. 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.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 915

(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) 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. RECOURSE LOAN PROGRAM FOR COMMERCIAL PROCESSORS
OF DAIRY PRODUCTS.

Effective date.

7 USC 7252.

(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. 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

7 USC 7253.

110 STAT. 916

PUBLIC LAW 104–127—APR. 4, 1996

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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 917

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. EFFECT ON FLUID MILK STANDARDS IN STATE OF CALIFORNIA.

7 USC 7254.

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. 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.

7 USC 7255.

110 STAT. 918

Effective date.

PUBLIC LAW 104–127—APR. 4, 1996

(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) 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.
SEC. 146. PROMOTION.

(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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 919

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. 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

Congress.
State listing.
7 USC 7256.

110 STAT. 920

PUBLIC LAW 104–127—APR. 4, 1996
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—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 921

(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. AUTHORITY TO ASSIST IN ESTABLISHMENT AND MAINTENANCE OF ONE OR MORE EXPORT TRADING COMPANIES.

7 USC 7257.

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. 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

7 USC 7258.

110 STAT. 922

PUBLIC LAW 104–127—APR. 4, 1996

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.
7 USC 7259.

SEC. 151. 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
7 USC 7271.

SEC. 155. 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 923

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) 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.—

Records.
New Mexico.

110 STAT. 924

PUBLIC LAW 104–127—APR. 4, 1996

(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.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 925

(5) 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

Regulations.

110 STAT. 926

PUBLIC LAW 104–127—APR. 4, 1996
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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 927

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) 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) 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

Effective date.

Effective date.

110 STAT. 928

PUBLIC LAW 104–127—APR. 4, 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))—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 929

(i) in paragraph (1)(B), by striking ‘‘including—’’ 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) 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—

Regulations.

110 STAT. 930

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(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.’’.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 931

SEC. 156. SUGAR PROGRAM.

(a) SUGARCANE.—The Secretary shall make loans available to
processors of domestically grown sugarcane at a rate equal to 18
cents per pound for raw cane sugar.
(b) SUGAR BEETS.—The Secretary shall make loans available
to processors of domestically grown sugar beets at a rate equal
to 22.9 cents per pound for refined beet sugar.
(c) 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.—

7 USC 7272.

110 STAT. 932

Effective date.

Effective date.

PUBLIC LAW 104–127—APR. 4, 1996
(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) 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) 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 933

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

110 STAT. 934

PUBLIC LAW 104–127—APR. 4, 1996

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.

Subtitle E—Administration
7 USC 7281.

SEC. 161. 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—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 935

(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. ADJUSTMENTS OF LOANS.

7 USC 7282.

(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. COMMODITY CREDIT CORPORATION INTEREST RATE.

7 USC 7283.

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. 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

7 USC 7284.

110 STAT. 936

PUBLIC LAW 104–127—APR. 4, 1996

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.
7 USC 7285.

SEC. 165. 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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 937

involved, or because of the age, location, or questionable continued
storability of the commodity.

Subtitle F—Permanent Price Support
Authority
SEC. 171. 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) 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).

7 USC 7301.

Effective date.

110 STAT. 938

7 USC 1445b–3a.

7 USC 7302.

PUBLIC LAW 104–127—APR. 4, 1996

(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 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. 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
7 USC 7311.

SEC. 181. 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’’).
7 USC 7312.

SEC. 182. COMPOSITION.

President.

(a) MEMBERSHIP AND APPOINTMENT.—The Commission shall
be composed of 11 members, appointed as follows:
(1) Three members shall be appointed by the President.

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110 STAT. 939

(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. 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

7 USC 7313.

110 STAT. 940

PUBLIC LAW 104–127—APR. 4, 1996

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).
7 USC 7314.

SEC. 184. 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).
7 USC 7315.

SEC. 185. 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.

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110 STAT. 941

(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. COMMISSION PROCEDURES.

7 USC 7316.

(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. PERSONNEL MATTERS.

7 USC 7317.

(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. TERMINATION OF COMMISSION.

7 USC 7318.

The Commission shall terminate on submission of the final
report required by section 184.

Subtitle H—Miscellaneous Commodity
Provisions
SEC. 191. 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

7 USC 7331.

110 STAT. 942

PUBLIC LAW 104–127—APR. 4, 1996

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.
7 USC 7332.

SEC. 192. 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

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110 STAT. 943

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.
SEC. 193. CROP INSURANCE.

(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) 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) 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

Announcement.

Effective date.

110 STAT. 944

Effective date.

7 USC 1508 note.

7 USC 1508 note.

PUBLIC LAW 104–127—APR. 4, 1996
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) 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) 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) 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.

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110 STAT. 945

(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. 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.

7 USC 6933.

110 STAT. 946

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(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).
SEC. 195. REVENUE INSURANCE.

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—

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110 STAT. 947

‘‘(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.

110 STAT. 948

PUBLIC LAW 104–127—APR. 4, 1996

(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

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110 STAT. 949

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.

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(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.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 951

TITLE II—AGRICULTURAL TRADE
Subtitle A—Amendments to Agricultural
Trade Development and Assistance Act
of 1954 and Related Statutes
SEC. 201. FOOD AID TO DEVELOPING COUNTRIES.

(a) IN GENERAL.—Section 3 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691a) is amended
to read as follows:
‘‘SEC. 3. FOOD AID TO DEVELOPING COUNTRIES.

‘‘(a) POLICY.—In light of the Uruguay Round Agreement on
Agriculture and the Ministerial Decision on Measures Concerning
the Possible Negative Effects of the Reform Program on LeastDeveloped and Net-Food Importing Developing Countries, the
United States reaffirms the commitment of the United States to
providing food aid to developing countries.
‘‘(b) SENSE OF CONGRESS.—It is the sense of Congress that—
‘‘(1) the President should initiate consultations with other
donor nations to consider appropriate levels of food aid commitments to meet the legitimate needs of developing countries;
and
‘‘(2) the United States should increase its contribution of
bona fide food assistance to developing countries consistent
with the Agreement on Agriculture.’’.
(b) CONFORMING AMENDMENT.—Section 411 of the Uruguay
Round Agreements Act is amended by striking subsection (e) (19
U.S.C. 3611).
SEC. 202. TRADE AND DEVELOPMENT ASSISTANCE.

Section 101 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1701) is amended—
(1) by striking ‘‘developing countries’’ each place it appears
and inserting ‘‘developing countries and private entities’’; and
(2) in subsection (b), by inserting ‘‘and entities’’ before
the period at the end.
SEC. 203. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND PRIVATE ENTITIES.

Section 102 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1702) is amended to read as follows:
‘‘SEC. 102. AGREEMENTS REGARDING ELIGIBLE COUNTRIES AND PRIVATE ENTITIES.

‘‘(a) PRIORITY.—In selecting agreements to be entered into under
this title, the Secretary shall give priority to agreements providing
for the export of agricultural commodities to developing countries
that—
‘‘(1) have the demonstrated potential to become commercial
markets for competitively priced United States agricultural
commodities;
‘‘(2) are undertaking measures for economic development
purposes to improve food security and agricultural development,
alleviate poverty, and promote broad-based equitable and
sustainable development; and

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‘‘(3) demonstrate the greatest need for food.
‘‘(b) PRIVATE ENTITIES.—An agreement entered into under this
title with a private entity shall require such security, or such
other provisions as the Secretary determines necessary, to provide
reasonable and adequate assurance of repayment of the financing
extended to the private entity.
‘‘(c) AGRICULTURAL MARKET DEVELOPMENT PLAN.—
‘‘(1) DEFINITION OF AGRICULTURAL TRADE ORGANIZATION.—
In this subsection, the term ‘agricultural trade organization’
means a United States agricultural trade organization that
promotes the export and sale of a United States agricultural
commodity and that does not stand to profit directly from
the specific sale of the commodity.
‘‘(2) PLAN.—The Secretary shall consider a developing country for which an agricultural market development plan has
been approved under this subsection to have the demonstrated
potential to become a commercial market for competitively
priced United States agricultural commodities for the purpose
of granting a priority under subsection (a).
‘‘(3) REQUIREMENTS.—
‘‘(A) IN GENERAL.—To be approved by the Secretary,
an agricultural market development plan shall—
‘‘(i) be submitted by a developing country or private
entity, in conjunction with an agricultural trade
organization;
‘‘(ii) describe a project or program for the development and expansion of a commercial market for a
United States agricultural commodity in a developing
country, and the economic development of the country,
using funds derived from the sale of agricultural
commodities received under an agreement described
in section 101;
‘‘(iii) provide for any matching funds that are
required by the Secretary for the project or program;
‘‘(iv) provide for a results-oriented means of measuring the success of the project or program; and
‘‘(v) provide for graduation to the use of non-Federal funds to carry out the project or program, consistent with requirements established by the Secretary.
‘‘(B) AGRICULTURAL TRADE ORGANIZATION.—The project
or program shall be designed and carried out by the agricultural trade organization.
‘‘(C) ADDITIONAL REQUIREMENTS.—An agricultural market development plan shall contain such additional requirements as are determined necessary by the Secretary.
‘‘(4) ADMINISTRATIVE COSTS.—
‘‘(A) IN GENERAL.—The Secretary may make funds
made available to carry out this title available for the
reimbursement of administrative expenses incurred by
agricultural trade organizations in developing, implementing, and administering agricultural market development
plans, subject to such requirements and in such amounts
as the Secretary considers appropriate.
‘‘(B) DURATION.—The funds may be made available
to agricultural trade organizations for the duration of the
applicable agricultural market development plan.

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110 STAT. 953

‘‘(C) TERMINATION.—The Secretary may terminate
assistance made available under this subsection if the agricultural trade organization is not carrying out the approved
agricultural market development plan.’’.
SEC. 204. TERMS AND CONDITIONS OF SALES.

Section 103 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1703) is amended—
(1) in subsection (a)(2)(A)—
(A) by striking ‘‘a recipient country to make’’; and
(B) by striking ‘‘such country’’ and inserting ‘‘the appropriate country’’;
(2) in subsection (c), by striking ‘‘less than 10 nor’’; and
(3) in subsection (d)—
(A) by striking ‘‘recipient country’’ and inserting ‘‘developing country or private entity’’; and
(B) by striking ‘‘7’’ and inserting ‘‘5’’.
SEC. 205. USE OF LOCAL CURRENCY PAYMENT.

Section 104 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1704) is amended—
(1) in subsection (a), by striking ‘‘recipient country’’ and
inserting ‘‘developing country or private entity’’; and
(2) in subsection (c)—
(A) by striking ‘‘recipient country’’ each place it appears
and inserting ‘‘appropriate developing country’’; and
(B) in paragraph (3), by striking ‘‘recipient countries’’
and inserting ‘‘appropriate developing countries’’.
SEC. 206. VALUE-ADDED FOODS.

Section 105 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1705) is repealed.
SEC. 207. ELIGIBLE ORGANIZATIONS.

(a) IN GENERAL.—Section 202 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1722) is amended—
(1) by striking subsection (b) and inserting the following:
‘‘(b) NONEMERGENCY ASSISTANCE.—
‘‘(1) IN GENERAL.—The Administrator may provide agricultural commodities for nonemergency assistance under this title
through eligible organizations (as described in subsection (d))
that have entered into an agreement with the Administrator
to use the commodities in accordance with this title.
‘‘(2) LIMITATION.—The Administrator may not deny a
request for funds submitted under this subsection because the
program for which the funds are requested—
‘‘(A) would be carried out by the eligible organization
in a foreign country in which the Agency for International
Development does not have a mission, office, or other presence; or
‘‘(B) is not part of a development plan for the country
prepared by the Agency.’’; and
(2) in subsection (e)—
(A) in the subsection heading, by striking ‘‘PRIVATE
VOLUNTARY ORGANIZATIONS AND COOPERATIVES’’ and
inserting ‘‘ELIGIBLE ORGANIZATIONS’’;
(B) in paragraph (1)—

110 STAT. 954

PUBLIC LAW 104–127—APR. 4, 1996
(i) by striking ‘‘$13,500,000’’ and inserting
‘‘$28,000,000’’; and
(ii) by striking ‘‘private voluntary organizations
and cooperatives to assist such organizations and
cooperatives’’ and inserting ‘‘eligible organizations
described in subsection (d), to assist the organizations’’;
(C) by striking paragraph (2) and inserting the follow-

ing:
‘‘(2) REQUEST FOR FUNDS.—To receive funds made available
under paragraph (1), an eligible organization described in subsection (d) shall submit a request for the funds that is subject
to approval by the Administrator.’’; and
(D) in paragraph (3), by striking ‘‘a private voluntary
organization or cooperative, the Administrator may provide
assistance to that organization or cooperative’’ and inserting ‘‘an eligible organization, the Administrator may provide assistance to the eligible organization’’.
(b) CONFORMING AMENDMENTS.—Section 207 of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1726a)
is amended—
(1) in subsection (a)(1), by striking ‘‘a private voluntary
organization or cooperative’’ each place it appears and inserting
‘‘an eligible organization’’; and
(2) in subsection (b)—
(A) in paragraph (1), by striking ‘‘private voluntary
organizations and cooperatives’’ and inserting ‘‘eligible
organizations’’; and
(B) in paragraph (2), by striking ‘‘organizations,
cooperatives,’’ and inserting ‘‘eligible organizations’’.
SEC. 208. GENERATION AND USE OF FOREIGN CURRENCIES.

Section 203 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1723) is amended—
(1) in subsection (a), by inserting ‘‘, or in a country in
the same region,’’ after ‘‘in the recipient country’’;
(2) in subsection (b)—
(A) by inserting ‘‘or in countries in the same region,’’
after ‘‘in recipient countries,’’; and
(B) by striking ‘‘10 percent’’ and inserting ‘‘15 percent’’;
(3) in subsection (c), by inserting ‘‘or in a country in the
same region,’’ after ‘‘in the recipient country,’’; and
(4) in subsection (d)(2), by inserting ‘‘or within a country
in the same region’’ after ‘‘within the recipient country’’.
SEC. 209. GENERAL LEVELS OF ASSISTANCE UNDER PUBLIC LAW 480.

Section 204 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1724) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking ‘‘amount that’’ and
all that follows through the period at the end and inserting
‘‘amount that for each of fiscal years 1996 through 2002
is not less than 2,025,000 metric tons.’’;
(B) in paragraph (2), by striking ‘‘amount that’’ and
all that follows through the period at the end and inserting
‘‘amount that for each of fiscal years 1996 through 2002
is not less than 1,550,000 metric tons.’’; and

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110 STAT. 955

(C) in paragraph (3), by adding at the end the following:
‘‘No waiver shall be made before the beginning of the
applicable fiscal year.’’; and
(2) in subsection (b)(1), by inserting before the period at
the end the following: ‘‘and that not less than 50 percent
of the quantity of the bagged commodities that are whole grain
commodities be bagged in the United States’’.
SEC. 210. FOOD AID CONSULTATIVE GROUP.

Section 205 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1725) is amended—
(1) in subsection (a), by striking ‘‘private voluntary
organizations, cooperatives and indigenous non-governmental
organizations’’ and inserting ‘‘eligible organizations described
in section 202(d)(1)’’;
(2) in subsection (b)—
(A) in paragraph (2), by striking ‘‘for International
Affairs and Commodity Programs’’ and inserting ‘‘of Agriculture for Farm and Foreign Agricultural Services’’;
(B) in paragraph (4), by striking ‘‘and’’ at the end;
(C) in paragraph (5), by striking the period at the
end and inserting ‘‘; and’’; and
(D) by adding at the end the following:
‘‘(6) representatives from agricultural producer groups in
the United States.’’;
(3) in the second sentence of subsection (d), by inserting
‘‘(but at least twice per year)’’ after ‘‘when appropriate’’; and
(4) in subsection (f), by striking ‘‘1995’’ and inserting ‘‘2002’’.
SEC. 211. SUPPORT OF NONGOVERNMENTAL ORGANIZATIONS.

(a) IN GENERAL.—Section 306(b) of the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1727e(b)) is
amended—
(1) in the subsection heading, by striking ‘‘INDIGENOUS
NON-GOVERNMENTAL’’ and inserting ‘‘NONGOVERNMENTAL’’; and
(2) by striking ‘‘utilization of indigenous’’ and inserting
‘‘utilization of’’.
(b) CONFORMING AMENDMENT.—Section 402 of the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C. 1732)
is amended by striking paragraph (6) and inserting the following:
‘‘(6) NONGOVERNMENTAL ORGANIZATION.—The term ‘nongovernmental organization’ means an organization that works
at the local level to solve development problems in a foreign
country in which the organization is located, except that the
term does not include an organization that is primarily an
agency or instrumentality of the government of the foreign
country.’’.
SEC. 212. COMMODITY DETERMINATIONS.

Section 401 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1731) is amended—
(1) by striking subsections (a) through (d) and inserting
the following:
‘‘(a) AVAILABILITY OF COMMODITIES.—No agricultural commodity shall be available for disposition under this Act if the Secretary
determines that the disposition would reduce the domestic supply
of the commodity below the supply needed to meet domestic requirements and provide adequate carryover (as determined by the Sec-

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PUBLIC LAW 104–127—APR. 4, 1996

retary), unless the Secretary determines that some part of the
supply should be used to carry out urgent humanitarian purposes
under this Act.’’;
(2) by redesignating subsections (e) and (f) as subsections
(b) and (c), respectively; and
(3) in subsection (c) (as so redesignated), by striking ‘‘(e)(1)’’
and inserting ‘‘(b)(1)’’.
SEC. 213. GENERAL PROVISIONS.

Section 403 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1733) is amended—
(1) in subsection (b)—
(A) in the subsection heading, by striking ‘‘CONSULTATIONS’’ and inserting ‘‘IMPACT ON LOCAL FARMERS AND
ECONOMY’’; and
(B) by striking ‘‘consult with’’ and all that follows
through ‘‘other donor organizations to’’;
(2) in subsection (c)—
(A) by striking ‘‘from countries’’; and
(B) by striking ‘‘for use’’ and inserting ‘‘or use’’;
(3) in subsection (f)—
(A) by inserting ‘‘or private entities, as appropriate,’’
after ‘‘from countries’’; and
(B) by inserting ‘‘or private entities’’ after ‘‘such countries’’; and
(4) in subsection (i)(2), by striking subparagraph (C).
SEC. 214. AGREEMENTS.

Section 404 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1734) is amended—
(1) in subsection (a), by inserting ‘‘with foreign countries’’
after ‘‘Before entering into agreements’’;
(2) in subsection (b)(2)—
(A) by inserting ‘‘with foreign countries’’ after ‘‘with
respect to agreements entered into’’; and
(B) by inserting before the semicolon at the end the
following: ‘‘and broad-based economic growth’’; and
(3) in subsection (c), by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—Agreements to provide assistance on
a multi-year basis to recipient countries or to eligible organizations—
‘‘(A) may be made available under titles I and III;
and
‘‘(B) shall be made available under title II.’’.
SEC. 215. USE OF COMMODITY CREDIT CORPORATION.

Section 406 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736) is amended—
(1) in subsection (a), by striking ‘‘shall’’ and inserting ‘‘may’’;
and
(2) in subsection (b)—
(A) by striking ‘‘this Act’’ and inserting ‘‘titles II and
III’’; and
(B) by striking paragraph (4) and inserting the following:

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110 STAT. 957

‘‘(4) the vessel freight charges from United States ports
or designated Canadian transshipment ports, as determined
by the Secretary, to designated ports of entry abroad;’’.
SEC. 216. ADMINISTRATIVE PROVISIONS.

Section 407 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736a) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by inserting ‘‘or private entity
that enters into an agreement under title I’’ after ‘‘importing country’’; and
(B) in paragraph (2), by adding at the end the following:
‘‘Resulting contracts may contain such terms and conditions
as the Secretary determines are necessary and appropriate.’’;
(2) in subsection (c)—
(A) in paragraph (1)(A), by inserting ‘‘importer or’’
before ‘‘importing country’’; and
(B) in paragraph (2)(A), by inserting ‘‘importer or’’
before ‘‘importing country’’;
(3) in subsection (d)—
(A) by striking paragraph (2) and inserting the following:
‘‘(2) FREIGHT PROCUREMENT.—Notwithstanding the Federal
Property and Administrative Services Act of 1949 (40 U.S.C.
471 et seq.) or other similar provisions of law relating to the
making or performance of Federal Government contracts, ocean
transportation under titles II and III may be procured on
the basis of full and open competitive procedures. Resulting
contracts may contain such terms and conditions as the
Administrator determines are necessary and appropriate.’’; and
(B) by striking paragraph (4);
(4) in subsection (g)(2)—
(A) in subparagraph (B), by striking ‘‘and’’ at the end;
(B) in subparagraph (C), by striking the period at
the end and inserting ‘‘; and’’; and
(C) by adding at the end the following:
‘‘(D) an assessment of the progress towards achieving
food security in each country receiving food assistance from
the United States Government, with special emphasis on
the nutritional status of the poorest populations in each
country.’’; and
(5) by striking subsection (h).
SEC. 217. EXPIRATION DATE.

Section 408 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736b) is amended by striking ‘‘1995’’
and inserting ‘‘2002’’.
SEC. 218. REGULATIONS.

Section 409 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736c) is repealed.
SEC. 219. INDEPENDENT EVALUATION OF PROGRAMS.

Section 410 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736d) is repealed.

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PUBLIC LAW 104–127—APR. 4, 1996

SEC. 220. AUTHORIZATION OF APPROPRIATIONS.

Section 412 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736f) is amended—
(1) by striking subsections (b) and (c) and inserting the
following:
‘‘(b) TRANSFER OF FUNDS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2)
and notwithstanding any other provision of law, the President
may direct that up to 15 percent of the funds available for
any fiscal year for carrying out any title of this Act be used
to carry out any other title of this Act.
‘‘(2) TITLE III FUNDS.—The President may direct that up
to 50 percent of the funds available for any fiscal year for
carrying out title III be used to carry out title II.’’; and
(2) by redesignating subsections (d) and (e) as subsections
(c) and (d), respectively.
SEC. 221. COORDINATION OF FOREIGN ASSISTANCE PROGRAMS.

Section 413 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1736g) is amended by striking ‘‘this
Act’’ each place it appears and inserting ‘‘title III’’.
SEC. 222. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.

Title IV of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1731 et seq.) is amended by adding at
the end the following:
Establishment.
Developing
countries.
7 USC 1736g–2.

‘‘SEC. 415. MICRONUTRIENT FORTIFICATION PILOT PROGRAM.

‘‘(a) IN GENERAL.—Subject to the availability of practical technology and to cost effectiveness, not later than September 30, 1997,
the Secretary, in consultation with the Administrator, shall establish a micronutrient fortification pilot program under this Act.
The purpose of the program shall be to—
‘‘(1) assist developing countries in correcting micronutrient
dietary deficiencies among segments of the populations of the
countries; and
‘‘(2) encourage the development of technologies for the fortification of whole grains and other commodities that are readily
transferable to developing countries.
‘‘(b) SELECTION OF PARTICIPATING COUNTRIES.—From among
the countries eligible for assistance under this Act, the Secretary
may select not more than 5 developing countries to participate
in the pilot program.
‘‘(c) FORTIFICATION.—Under the pilot program, whole grains
and other commodities made available to a developing country
selected to participate in the pilot program may be fortified with
1 or more micronutrients (including vitamin A, iron, and iodine)
with respect to which a substantial portion of the population in
the country is deficient. The commodity may be fortified in the
United States or in the developing country.
‘‘(d) TERMINATION OF AUTHORITY.—The authority to carry out
the pilot program established under this section shall terminate
on September 30, 2002.’’.
SEC. 223. USE OF CERTAIN LOCAL CURRENCY.

Title IV of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1731 et seq.) (as amended by section 222)
is amended by adding at the end the following:

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110 STAT. 959

‘‘SEC. 416. USE OF CERTAIN LOCAL CURRENCY.

7 USC 1736g–3.

‘‘Local currency payments received by the United States pursuant to agreements entered into under title I (as in effect on November 27, 1990) may be utilized by the Secretary in accordance with
section 108 (as in effect on November 27, 1990).’’.
SEC. 224. FARMER-TO-FARMER PROGRAM.

Section 501 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1737) is amended—
(1) in subsection (a), by striking paragraph (6) and inserting
the following:
‘‘(6) to the extent that local currencies can be used to
meet the costs of a program established under this section,
augment funds of the United States that are available for
such a program through the use of foreign currencies that
accrue from the sale of agricultural commodities under this
Act, and local currencies generated from other types of foreign
assistance activities, within the country where the program
is being conducted.’’; and
(2) in subsection (c)—
(A) by striking ‘‘0.2’’ and inserting ‘‘0.4’’;
(B) by striking ‘‘1991 through 1995’’ and inserting
‘‘1996 through 2002’’; and
(C) by striking ‘‘0.1’’ and inserting ‘‘0.2’’.
SEC. 225. FOOD SECURITY COMMODITY RESERVE.

(a) IN GENERAL.—Title III of the Agricultural Act of 1980
(7 U.S.C. 1736f–1 et seq.) is amended to read as follows:

‘‘TITLE III—FOOD SECURITY
COMMODITY RESERVE
‘‘SEC. 301. SHORT TITLE.

‘‘This title may be cited as the ‘Food Security Commodity
Reserve Act of 1996’.
‘‘SEC. 302. ESTABLISHMENT OF COMMODITY RESERVE.

‘‘(a) IN GENERAL.—To provide for a reserve solely to meet
emergency humanitarian food needs in developing countries, the
Secretary of Agriculture (referred to in this title as the ‘Secretary’)
shall establish a reserve stock of wheat, rice, corn, or sorghum,
or any combination of the commodities, totaling not more than
4,000,000 metric tons for use as described in subsection (c).
‘‘(b) COMMODITIES IN RESERVE.—
‘‘(1) IN GENERAL.—The reserve established under this section shall consist of—
‘‘(A) wheat in the reserve established under the Food
Security Wheat Reserve Act of 1980 as of the date of
enactment of the Federal Agriculture Improvement and
Reform Act of 1996;
‘‘(B) wheat, rice, corn, and sorghum (referred to in
this section as ‘eligible commodities’) acquired in accordance with paragraph (2) to replenish eligible commodities
released from the reserve, including wheat to replenish
wheat released from the reserve established under the
Food Security Wheat Reserve Act of 1980 but not replen-

Food Security
Commodity
Reserve Act of
1996.
7 USC 1736f–1
note.

7 USC 1736f–1.

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PUBLIC LAW 104–127—APR. 4, 1996
ished as of the date of enactment of the Federal Agriculture
Improvement and Reform Act of 1996; and
‘‘(C) such rice, corn, and sorghum as the Secretary
may, at such time and in such manner as the Secretary
determines appropriate, acquire as a result of exchanging
an equivalent value of wheat in the reserve established
under this section.
‘‘(2) REPLENISHMENT OF RESERVE.—
‘‘(A) IN GENERAL.—Subject to subsection (h), commodities of equivalent value to eligible commodities in the
reserve established under this section may be acquired—
‘‘(i) through purchases—
‘‘(I) from producers; or
‘‘(II) in the market, if the Secretary determines
that the purchases will not unduly disrupt the
market; or
‘‘(ii) by designation by the Secretary of stocks of
eligible commodities of the Commodity Credit Corporation.
‘‘(B) FUNDS.—Any use of funds to acquire eligible
commodities through purchases from producers or in the
market to replenish the reserve must be authorized in
an appropriations Act.
‘‘(c) RELEASE OF ELIGIBLE COMMODITIES.—
‘‘(1) EMERGENCY ASSISTANCE.—
‘‘(A) IN GENERAL.—Notwithstanding paragraph (2), to
meet unanticipated need, the Secretary may release eligible
commodities in any fiscal year, without regard to the availability of domestic supply of the commodities, to provide
emergency assistance to developing countries under title
II of the Agricultural Trade Development and Assistance
Act of 1954 (7 U.S.C. 1721 et seq.).
‘‘(B) RELEASE FOR EMERGENCY ASSISTANCE.—If the
eligible commodities needed to meet unanticipated need
cannot be made available in a timely manner under normal
means for obtaining eligible commodities for food assistance
because of unanticipated need for emergency assistance
as provided under section 202(a) of the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1722(a)),
the Secretary may in any fiscal year release from the
reserve—
‘‘(i) up to 500,000 metric tons of wheat or the
equivalent value of eligible commodities other than
wheat; and
‘‘(ii) up to 500,000 metric tons of any eligible
commodities under this paragraph that could have
been released but were not released in prior fiscal
years.
‘‘(C) WAIVER OF MINIMUM TONNAGE REQUIREMENTS.—
Nothing in this paragraph shall require a waiver under
section 204(a)(3) of the Agricultural Trade Development
and Assistance Act of 1954 (7 U.S.C. 1724(a)(3)) as a prerequisite for the release of eligible commodities under this
paragraph.
‘‘(2) EMERGENCY FOOD ASSISTANCE.—Notwithstanding any
other provision of law, eligible commodities designated or
acquired for the reserve established under this section may

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 961

be released by the Secretary to provide, on a donation or
sale basis, emergency food assistance to developing countries
at such time as the domestic supply of the eligible commodities
is so limited that quantities of the eligible commodities cannot
be made available for disposition under the Agricultural Trade
Development and Assistance Act of 1954 (7 U.S.C. 1691 et
seq.) (other than disposition for urgent humanitarian purposes
under section 401 of the Act (7 U.S.C. 1731)).
‘‘(3) PROCESSING OF ELIGIBLE COMMODITIES.—Eligible
commodities that are released from the reserve established
under this section may be processed in the United States and
shipped to a developing country when conditions in the recipient
country require processing.
‘‘(4) EXCHANGE.—The Secretary may exchange an eligible
commodity for another United States commodity of equal value,
including powdered milk, pulses, and vegetable oil.
‘‘(5) USE OF NORMAL COMMERCIAL PRACTICES.—To the maximum extent practicable consistent with the fulfillment of the
purposes of this section and the effective and efficient administration of this section, the Secretary shall use the usual and
customary channels, facilities, arrangements, and practices of
trade and commerce to carry out this subsection.
‘‘(d) MANAGEMENT OF ELIGIBLE COMMODITIES.—The Secretary
shall provide—
‘‘(1) for the management of eligible commodities in the
reserve established under this section as to location and quality
of eligible commodities needed to meet emergency situations;
and
‘‘(2) for the periodic rotation or replacement of stocks of
eligible commodities in the reserve to avoid spoilage and
deterioration of the commodities.
‘‘(e) TREATMENT OF RESERVE UNDER OTHER LAW.—Eligible
commodities in the reserve established under this section shall
not be—
‘‘(1) considered a part of the total domestic supply (including carryover) for the purpose of subsection (c) or for the purpose of administering the Agricultural Trade Development and
Assistance Act of 1954 (7 U.S.C. 1691 et seq.); and
‘‘(2) subject to any quantitative limitation on exports that
may be imposed under section 7 of the Export Administration
Act of 1979 (50 U.S.C. App. 2406).
‘‘(f) USE OF COMMODITY CREDIT CORPORATION.—
‘‘(1) IN GENERAL.—Subject to the limitations provided in
this section, the funds, facilities, and authorities of the
Commodity Credit Corporation shall be used by the Secretary
in carrying out this section, except that any restriction
applicable to the acquisition, storage, or disposition of eligible
commodities owned or controlled by the Commodity Credit Corporation shall not apply.
‘‘(2) REIMBURSEMENT.—
‘‘(A) IN GENERAL.—The Commodity Credit Corporation
shall be reimbursed for the release of eligible commodities
from funds made available to carry out the Agricultural
Trade Development and Assistance Act of 1954 (7 U.S.C.
1691 et seq.).
‘‘(B) BASIS FOR REIMBURSEMENT.—The reimbursement
shall be made on the basis of the lesser of—

110 STAT. 962

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) the actual costs incurred by the Commodity
Credit Corporation with respect to the eligible commodity; or
‘‘(ii) the export market price of the eligible commodity (as determined by the Secretary) as of the time
the eligible commodity is released from the reserve.
‘‘(C) SOURCE OF FUNDS.—The reimbursement may be
made from funds appropriated for subsequent fiscal years.
‘‘(g) FINALITY OF DETERMINATION.—Any determination by the
Secretary under this section shall be final.
‘‘(h) TERMINATION OF AUTHORITY.—
‘‘(1) IN GENERAL.—The authority to replenish stocks of
eligible commodities to maintain the reserve established under
this section shall terminate on September 30, 2002.
‘‘(2) DISPOSAL OF ELIGIBLE COMMODITIES.—Eligible
commodities remaining in the reserve after September 30, 2002,
shall be disposed of by release for use in providing for emergency humanitarian food needs in developing countries as provided in this section.’’.
(b) CONFORMING AMENDMENT.—Section 208(d) of the Agricultural Trade Suspension Adjustment Act of 1980 (7 U.S.C. 4001(d))
is amended by striking paragraph (2) and inserting the following:
‘‘(2) APPLICABILITY OF CERTAIN PROVISIONS.—Subsections
(c), (d), (e), and (f)(2) of section 302 of the Food Security
Commodity Reserve Act of 1996 shall apply to commodities
in any reserve established under paragraph (1), except that
the references to ‘eligible commodities’ in the subsections shall
be deemed to be references to ‘agricultural commodities’.’’.
SEC. 226. PROTEIN BYPRODUCTS DERIVED FROM ALCOHOL FUEL
PRODUCTION.

Section 1208 of the Agriculture and Food Act of 1981 (7 U.S.C.
1736n) is repealed.
SEC. 227. FOOD FOR PROGRESS PROGRAM.

The Food for Progress Act of 1985 (7 U.S.C. 1736o) is
amended—
(1) in subsection (b)—
(A) in paragraph (1)—
(i) by striking ‘‘(b)(1)’’ and inserting ‘‘(b)’’; and
(ii) in the first sentence, by inserting ‘‘intergovernmental organizations,’’ after ‘‘cooperatives,’’; and
(B) by striking paragraph (2);
(2) in subsection (e)(4), by striking ‘‘203’’ and inserting
‘‘406’’;
(3) in subsection (f)—
(A) in paragraph (1)(B), by striking ‘‘in the case of
the independent states of the former Soviet Union,’’;
(B) by striking paragraph (2);
(C) in paragraph (4), by inserting ‘‘for each of fiscal
years 1996 through 2002’’ after ‘‘may be used’’; and
(D) by redesignating paragraphs (3) through (5) as
paragraphs (2) through (4), respectively;
(4) in subsection (g), by striking ‘‘1995’’ and inserting
‘‘2002’’;
(5) in subsection (j), by striking ‘‘shall’’ and inserting ‘‘may’’;
(6) in subsection (k), by striking ‘‘1995’’ and inserting
‘‘2002’’;

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 963

(7) in subsection (l)(1)—
(A) by striking ‘‘1991 through 1995’’ and inserting
‘‘1996 through 2002’’; and
(B) by inserting ‘‘, and to provide technical assistance
for monetization programs,’’ after ‘‘monitoring of food
assistance programs’’; and
(8) in subsection (m)—
(A) by striking ‘‘with respect to the independent states
of the former Soviet Union’’;
(B) by striking ‘‘private voluntary organizations and
cooperatives’’ each place it appears and inserting ‘‘agricultural trade organizations, intergovernmental organizations,
private voluntary organizations, and cooperatives’’; and
(C) in paragraph (2), by striking ‘‘in the independent
states’’.
SEC. 228. USE OF FOREIGN CURRENCY PROCEEDS FROM EXPORT
SALES FINANCING.

Section 402 of the Mutual Security Act of 1954 (22 U.S.C.
1922) is repealed.
SEC. 229. STIMULATION OF FOREIGN PRODUCTION.

Section 7 of the Act of December 30, 1947 (61 Stat. 947, chapter
526; 50 U.S.C. App. 1917), is repealed.

Subtitle B—Amendments to Agricultural
Trade Act of 1978
SEC. 241. AGRICULTURAL EXPORT PROMOTION STRATEGY.

(a) IN GENERAL.—Section 103 of the Agricultural Trade Act
of 1978 (7 U.S.C. 5603) is amended to read as follows:
‘‘SEC. 103. AGRICULTURAL EXPORT PROMOTION STRATEGY.

‘‘(a) IN GENERAL.—The Secretary shall develop a strategy for
implementing Federal agricultural export promotion programs that
takes into account the new market opportunities for agricultural
products, including opportunities that result from—
‘‘(1) the North American Free Trade Agreement and the
Uruguay Round Agreements;
‘‘(2) any accession to membership in the World Trade
Organization;
‘‘(3) the continued economic growth in the Pacific Rim;
and
‘‘(4) other developments.
‘‘(b) PURPOSE OF STRATEGY.—The strategy developed under subsection (a) shall encourage the maintenance, development, and
expansion of export markets for United States agricultural commodities and related products, including high-value and value-added
products.
‘‘(c) GOALS OF STRATEGY.—The strategy developed under subsection (a) shall have the following goals:
‘‘(1) Increase the value of United States agricultural exports
each year.
‘‘(2) Increase the value of United States agricultural exports
each year at a faster rate than the rate of increase in the
value of overall world export trade in agricultural products.

110 STAT. 964

President.

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(3) Increase the value of United States high-value and
value-added agricultural exports each year.
‘‘(4) Increase the value of United States high-value and
value-added agricultural exports each year at a faster rate
than the rate of increase in the value of overall world export
trade in high-value and value-added agricultural products.
‘‘(5) Ensure that to the extent practicable—
‘‘(A) all obligations undertaken in the Uruguay Round
Agreement on Agriculture that significantly increase access
for United States agricultural commodities are implemented to the extent required by the Uruguay Round
Agreements; or
‘‘(B) applicable United States laws are used to secure
United States rights under the Uruguay Round Agreement
on Agriculture.
‘‘(d) PRIORITY MARKETS.—
‘‘(1) IDENTIFICATION OF MARKETS.—In developing the strategy required under subsection (a), the Secretary shall annually
identify as priority markets—
‘‘(A) those markets in which imports of agricultural
products show the greatest potential for increase; and
‘‘(B) those markets in which, with the assistance of
Federal export promotion programs, exports of United
States agricultural products show the greatest potential
for increase.
‘‘(2) IDENTIFICATION OF SUPPORTING OFFICES.—The President shall identify annually in the budget of the United States
Government submitted under section 1105 of title 31, United
States Code, each overseas office of the Foreign Agricultural
Service that provides assistance to United States exporters
in each of the priority markets identified under paragraph
(1).’’.
(b) SENSE OF CONGRESS.—It is the sense of Congress that—
(1) the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and
Forestry of the Senate should conduct a thorough review of
agricultural export and food aid programs not later than December 31, 1998; and
(2) the review should examine what changes, if any, need
to be made in the programs as a result of the effects of the
Agricultural Market Transition Act, the Uruguay Round Agreements, changing world market conditions, and such other factors as the committees consider appropriate.
(c) ELIMINATION OF REPORT.—
(1) IN GENERAL.—Section 601 of the Agricultural Trade
Act of 1978 (7 U.S.C. 5711) is repealed.
(2) CONFORMING AMENDMENT.—The last sentence of section
603 of the Agricultural Trade Act of 1978 (7 U.S.C. 5713)
is amended by striking ‘‘, in a consolidated report,’’ and all
that follows through ‘‘section 601’’ and inserting ‘‘or in a consolidated report’’.

SEC. 242. IMPLEMENTATION OF COMMITMENTS UNDER URUGUAY
ROUND AGREEMENTS.

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

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 965

‘‘SEC. 106. IMPLEMENTATION OF COMMITMENTS UNDER URUGUAY
ROUND AGREEMENTS.

‘‘Not later than September 30 of each year, the Secretary shall
evaluate whether the obligations undertaken by foreign countries
under the Uruguay Round Agreement on Agriculture are being
fully implemented. If the Secretary has reason to believe (based
on the evaluation) that any foreign country, by not implementing
the obligations of the country, may be significantly constraining
an opportunity for United States agricultural exports, the Secretary
shall—
‘‘(1) submit the evaluation to the United States Trade Representative; and
‘‘(2) transmit a copy of the evaluation to the Committee
on Agriculture, and the Committee on Ways and Means, of
the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry, and the Committee on
Finance, of the Senate.’’.
(b)
MONITORING
COMPLIANCE
WITH
SANITARY
AND
PHYTOSANITARY MEASURES.—Section 414 of the Agricultural Trade
Act of 1978 (7 U.S.C. 5674) is amended by adding at the end
the following:
‘‘(c)
MONITORING
COMPLIANCE
WITH
SANITARY
AND
PHYTOSANITARY MEASURES.—The Secretary shall monitor the
compliance of World Trade Organization member countries with
the sanitary and phytosanitary measures of the Agreement on
Agriculture of the Uruguay Round of Multilateral Trade Negotiations of the General Agreement on Tariffs and Trade. If the Secretary has reason to believe that any country may have failed
to meet the commitment on sanitary and phytosanitary measures
under the Agreement in a manner that adversely impacts the
exports of a United States agricultural commodity, the Secretary
shall—
‘‘(1) provide such information to the United States Trade
Representative of the circumstances surrounding the matter
arising under this subsection; and
‘‘(2) with respect to any such circumstances that the Secretary considers to have a continuing adverse effect on United
States agricultural exports, report to the Committee on Agriculture, and the Committee on Ways and Means, of the House
of Representatives and the Committee on Agriculture, Nutrition, and Forestry, and the Committee on Finance, of the Senate—
‘‘(A) that a country may have failed to meet the sanitary and phytosanitary commitments; and
‘‘(B) any notice given by the Secretary to the United
States Trade Representative.’’.
SEC. 243. EXPORT CREDITS.

(a) EXPORT CREDIT GUARANTEE PROGRAM.—Section 202 of
Agricultural Trade Act of 1978 (7 U.S.C. 5622) is amended—
(1) in subsection (a)—
(A) by striking ‘‘GUARANTEES.—The’’ and inserting
following: ‘‘GUARANTEES.—
‘‘(1) IN GENERAL.—The’’; and
(B) by adding at the end the following:
‘‘(2) SUPPLIER CREDITS.—In carrying out this section,
Commodity Credit Corporation may issue guarantees for

the
the

the
the

Evaluation.
7 USC 5606.

Reports.

110 STAT. 966

PUBLIC LAW 104–127—APR. 4, 1996

repayment of credit made available for a period of not more
than 180 days by a United States exporter to a buyer in
a foreign country.’’;
(2) in subsection (f)—
(A) by striking ‘‘(f) RESTRICTIONS.—The’’ and inserting
the following:
‘‘(f) RESTRICTIONS.—
‘‘(1) IN GENERAL.—The’’; and
(B) by adding at the end the following:
‘‘(2) CRITERIA FOR DETERMINATION.—In making the determination required under paragraph (1) with respect to credit
guarantees under subsection (b) for a country, the Secretary
may consider, in addition to financial, macroeconomic, and
monetary indicators—
‘‘(A) whether an International Monetary Fund standby
agreement, Paris Club rescheduling plan, or other economic
restructuring plan is in place with respect to the country;
‘‘(B) whether the country is addressing issues such
as—
‘‘(i) the convertibility of the currency of the country;
‘‘(ii) adequate legal protection for foreign investments;
‘‘(iii) the viability of the financial markets of the
country; and
‘‘(iv) adequate legal protection for the private property rights of citizens of the country; or
‘‘(C) any other factors that are relevant to the ability
of the country to service the debt of the country.’’;
(3) by striking subsection (h) and inserting the following:
‘‘(h) UNITED STATES AGRICULTURAL COMMODITIES.—The
Commodity Credit Corporation shall finance or guarantee under
this section only United States agricultural commodities.’’;
(4) in subsection (i)—
(A) by striking paragraph (1);
(B) by striking ‘‘INSTITUTIONS.—A financial’’ and inserting the following: ‘‘INSTITUTIONS.—
‘‘(1) IN GENERAL.—A financial’’;
(C) by striking ‘‘(2) is’’ and inserting the following:
‘‘(A) is’’;
(D) by striking ‘‘(3) is’’ and inserting the following:
‘‘(B) is’’; and
(E) by adding at the end the following:
‘‘(2) THIRD COUNTRY BANKS.—The Commodity Credit Corporation may guarantee under subsections (a) and (b) the repayment of credit made available to finance an export sale irrespective of whether the obligor is located in the country to which
the export sale is destined.’’; and
(5) by striking subsection (k) and inserting the following:
‘‘(k) PROCESSED AND HIGH-VALUE PRODUCTS.—
‘‘(1) IN GENERAL.—In issuing export credit guarantees
under this section, the Commodity Credit Corporation shall,
subject to paragraph (2), ensure that not less than 25 percent
for each of fiscal years 1996 and 1997, 30 percent for each
of fiscal years 1998 and 1999, and 35 percent for each of
fiscal years 2000, 2001, and 2002, of the total amount of credit
guarantees issued for a fiscal year is issued to promote the
export of processed or high-value agricultural products and

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110 STAT. 967

that the balance is issued to promote the export of bulk or
raw agricultural commodities.
‘‘(2) LIMITATION.—The percentage requirement of paragraph (1) shall apply for a fiscal year to the extent that a
reduction in the total amount of credit guarantees issued for
the fiscal year is not required to meet the percentage requirement.’’.
(b) FUNDING LEVELS.—Section 211 of the Agricultural Trade
Act of 1978 (7 U.S.C. 5641) is amended by striking subsection
(b) and inserting the following:
‘‘(b) EXPORT CREDIT GUARANTEE PROGRAMS.—
‘‘(1) EXPORT CREDIT GUARANTEES.—The Commodity Credit
Corporation shall make available for each of fiscal years 1996
through 2002 not less than $5,500,000,000 in credit guarantees
under subsections (a) and (b) of section 202.
‘‘(2) LIMITATION ON ORIGINATION FEE.—Notwithstanding
any other provision of law, the Secretary may not charge an
origination fee with respect to any credit guarantee transaction
under section 202(a) in excess of an amount equal to 1 percent
of the amount of credit to be guaranteed under the transaction,
except with respect to an export credit guarantee transaction
pursuant to section 1542(b) of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 7 U.S.C.
5622 note).’’.
(c) DEFINITION OF UNITED STATES AGRICULTURAL COMMODITY.—Section 102(7) of the Agricultural Trade Act of 1978 (7 U.S.C.
5602(7)) is amended by striking subparagraphs (A) and (B) and
inserting the following:
‘‘(A) an agricultural commodity or product entirely produced in the United States; or
‘‘(B) a product of an agricultural commodity—
‘‘(i) 90 percent or more of the agricultural components of which by weight, excluding packaging and
added water, is entirely produced in the United States;
and
‘‘(ii) that the Secretary determines to be a high
value agricultural product.’’.
(d) REGULATIONS.—Not later than 180 days after the date of
enactment of this Act, the Secretary of Agriculture shall issue
regulations to carry out the amendments made by this section.
SEC. 244. MARKET ACCESS PROGRAM.

(a) CHANGE OF NAME.—
(1) IN GENERAL.—Section 203 of the Agricultural Trade
Act of 1978 (7 U.S.C. 5623) is amended—
(A) in the section heading, by striking ‘‘MARKET PROMOTION PROGRAM’’ and inserting ‘‘MARKET ACCESS PROGRAM’’; and
(B) by striking ‘‘marketing promotion program’’ each
place it appears and inserting ‘‘market access program’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 1302 of the Omnibus Budget Reconciliation
Act of 1993 (Public Law 103–66; 7 U.S.C. 5623) is
amended—
(i) in the section heading, by striking ‘‘MARKET
PROMOTION PROGRAM’’ and inserting ‘‘MARKET ACCESS
PROGRAM’’; and

7 USC 5622 note.

110 STAT. 968
7 USC 5623 note.

Effective date.

PUBLIC LAW 104–127—APR. 4, 1996

(ii) in subsection (b), by striking ‘‘market promotion
program’’ each place it appears and inserting ‘‘market
access program’’.
(B) Section 211(c) of the Agricultural Trade Act of
1978 (7 U.S.C. 5641(c)) is amended—
(i) in the subsection heading, by striking ‘‘MARKETING PROMOTION PROGRAMS’’ and inserting ‘‘MARKET
ACCESS PROGRAMS’’;
(ii) by striking ‘‘market promotion activities’’ and
inserting ‘‘market access activities’’;
(iii) in paragraph (1), by striking ‘‘market development program’’ and inserting ‘‘market access program’’;
and
(iv) in paragraph (2), by striking ‘‘marketing promotion program’’ and inserting ‘‘market access program’’.
(b) USE OF FUNDS.—Section 203(f) of the Agricultural Trade
Act of 1978 (7 U.S.C. 5623(f)) is amended by adding at the end
the following:
‘‘(4) USE OF FUNDS.—Funds made available to carry out
this section—
‘‘(A) shall not be used to provide direct assistance to
any foreign for-profit corporation for the corporation’s use
in promoting foreign-produced products;
‘‘(B) shall not be used to provide direct assistance to
any for-profit corporation that is not recognized as a smallbusiness concern described in section 3(a) of the Small
Business Act (15 U.S.C. 632(a)), excluding—
‘‘(i) a cooperative;
‘‘(ii) an association described in the first section
of the Act entitled ‘An Act To authorize association
of producers of agricultural products’, approved February 18, 1922 (7 U.S.C. 291); and
‘‘(iii) a nonprofit trade association; and
‘‘(C) may be used by a United States trade association,
cooperative, or small business for individual branded promotional activity related to a United States branded product, if the beneficiaries of the activity have provided funds
for the activity in an amount that is at least equivalent
to the amount of assistance provided under this section.’’.
(c) FUNDING.—Effective October 1, 1995, section 211(c)(1) of
the Agricultural Trade Act of 1978 (7 U.S.C. 5641(c)(1)) is
amended—
(1) by striking ‘‘and’’ after ‘‘1991 through 1993,’’; and
(2) by striking ‘‘through 1997,’’ and inserting ‘‘through 1995,
and not more than $90,000,000 for each of fiscal years 1996
through 2002,’’.
SEC. 245. EXPORT ENHANCEMENT PROGRAM.

Effective date.

(a) IN GENERAL.—Effective October 1, 1995, section 301(e) of
the Agricultural Trade Act of 1978 (7 U.S.C. 5651(e)) is amended
by striking paragraph (1) and inserting the following:
‘‘(1) IN GENERAL.—The Commodity Credit Corporation shall
make available to carry out the program established under
this section not more than—
‘‘(A) $350,000,000 for fiscal year 1996;
‘‘(B) $250,000,000 for fiscal year 1997;

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110 STAT. 969

‘‘(C) $500,000,000 for fiscal year 1998;
‘‘(D) $550,000,000 for fiscal year 1999;
‘‘(E) $579,000,000 for fiscal year 2000;
‘‘(F) $478,000,000 for fiscal year 2001; and
‘‘(G) $478,000,000 for fiscal year 2002.’’.
(b) PRIORITY FUNDING FOR INTERMEDIATE PRODUCTS.—Section
301 of the Agricultural Trade Act of 1978 (7 U.S.C. 5651) is amended
by adding at the end the following:
‘‘(h) PRIORITY FUNDING FOR INTERMEDIATE PRODUCTS.—
‘‘(1) IN GENERAL.—Effective beginning in fiscal year 1996,
and consistent, as determined by the Secretary, with the obligations and reduction commitments undertaken by the United
States under the Uruguay Round Agreements, the Secretary
may make available not more than $100,000,000 for each fiscal
year under this section for the sale of intermediate agricultural
products in sufficient quantities to attain the volume of export
sales consistent with the volume of intermediate agricultural
products exported by the United States during the Uruguay
Round base period years of 1986 through 1990.
‘‘(2) ADDITIONAL ASSISTANCE.—Notwithstanding paragraph
(1), if the export sale of any intermediate agricultural product
attains the volume of export sales consistent with the volume
of the intermediate agricultural product exported by the United
States during the Uruguay Round base period years of 1986
through 1990, the Secretary may make available additional
amounts under this section for the encouragement of export
sales of the intermediate agricultural product.’’.

Effective date.

SEC. 246. ARRIVAL CERTIFICATION.

Section 401 of the Agricultural Trade Act of 1978 (7 U.S.C.
5661) is amended by striking subsection (a) and inserting the following:
‘‘(a) ARRIVAL CERTIFICATION.—With respect to a commodity provided, or for which financing or a credit guarantee or other assistance is made available, under a program authorized in section
201, 202, or 301, the Commodity Credit Corporation shall require
the exporter of the commodity to maintain records of an official
or customary commercial nature or other documents as the Secretary may require, and shall allow representatives of the Commodity Credit Corporation access to the records or documents as needed,
to verify the arrival of the commodity in the country that is the
intended destination of the commodity.’’.
SEC. 247. COMPLIANCE.

Section 402(a) of the Agricultural Trade Act of 1978 (7 U.S.C.
5662(a)) is amended—
(1) by striking paragraph (2); and
(2) by redesignating paragraph (3) as paragraph (2).
SEC. 248. REGULATIONS.

Section 404 of the Agricultural Trade Act of 1978 (7 U.S.C.
5664) is repealed.
SEC. 249. TRADE COMPENSATION AND ASSISTANCE PROGRAMS.

Subtitle B of title IV of the Agricultural Trade Act of 1978
(7 U.S.C. 5671 et seq.) is amended by adding at the end the
following:

Records.

110 STAT. 970
7 USC 5677.

PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 417. TRADE COMPENSATION AND ASSISTANCE PROGRAMS.

‘‘(a) IN GENERAL.—Except as provided in subsection (f), notwithstanding any other provision of law, if, after the date of enactment
of this section, the President or any other member of the executive
branch causes exports from the United States to any country to
be unilaterally suspended for reasons of national security or foreign
policy, and if within 90 days after the date on which the suspension
is imposed on United States exports no other country with an
agricultural economic interest agrees to participate in the suspension, the Secretary shall carry out a trade compensation assistance
program in accordance with this section (referred to in this section
as a ‘program’).
‘‘(b) COMPENSATION OR PROVISION OF FUNDS.—Under a program, the Secretary shall, based on an evaluation by the Secretary
of the method most likely to produce the greatest compensatory
benefit for producers of the commodity involved in the suspension—
‘‘(1) compensate producers of the commodity by making
payments available to producers, as provided by subsection
(c)(1); or
‘‘(2) make available an amount of funds calculated under
subsection (c)(2), to promote agricultural exports or provide
agricultural commodities to developing countries under any
authorities available to the Secretary.
‘‘(c) DETERMINATION OF AMOUNT OF COMPENSATION OR
FUNDS.—
‘‘(1) COMPENSATION.—If the Secretary makes payments
available to producers under subsection (b)(1), the amount of
the payment shall be determined by the Secretary based on
the Secretary’s estimate of the loss suffered by producers of
the commodity involved due to any decrease in the price of
the commodity as a result of the suspension.
‘‘(2) DETERMINATION OF AMOUNT OF FUNDS.—For each fiscal
year of a program, the amount of funds made available under
subsection (b)(2) shall be equal to 90 percent of the average
annual value of United States agricultural exports to the country with respect to which exports are suspended during the
most recent 3 years prior to the suspension for which data
are available.
‘‘(d) DURATION OF PROGRAM.—For each suspension of exports
for which a program is implemented under this section, funds
shall be made available under subsection (b) for each fiscal year
or part of a fiscal year for which the suspension is in effect,
but not to exceed 3 fiscal years.
‘‘(e) COMMODITY CREDIT CORPORATION.—The Secretary shall
use funds of the Commodity Credit Corporation to carry out this
section.
‘‘(f) EXCEPTION TO CARRYING OUT A PROGRAM.—This section
shall not apply to any suspension of trade due to a war or armed
hostility.
‘‘(g) PARTIAL YEAR EMBARGOES.—If the Secretary makes funds
available under subsection (b)(2), regardless of whether an embargo
is in effect for only part of a fiscal year, the full amount of funds
as calculated under subsection (c)(2) shall be made available under
a program for the fiscal year. If the Secretary determines that
making the required amount of funds available in a partial fiscal
year is impracticable, the Secretary may make all or part of the
funds required to be made available in the following fiscal year

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110 STAT. 971

(in addition to any funds otherwise required under a program
to be made available in the following fiscal year).
‘‘(h) SHORT SUPPLY EMBARGOES.—If the President or any other
member of the executive branch causes exports to be suspended
based on a determination of short supply, the Secretary shall carry
out section 1002 of the Food and Agriculture Act of 1977 (7 U.S.C.
1310).’’.
SEC. 250. FOREIGN AGRICULTURAL SERVICE.

Section 503 of the Agricultural Trade Act of 1978 (7 U.S.C.
5693) is amended to read as follows:
‘‘SEC. 503. DUTIES OF FOREIGN AGRICULTURAL SERVICE.

‘‘The Service shall assist the Secretary in carrying out the
agricultural trade policy and international cooperation policy of
the United States by—
‘‘(1) acquiring information pertaining to agricultural trade;
‘‘(2) carrying out market promotion and development activities;
‘‘(3) providing agricultural technical assistance and training; and
‘‘(4) carrying out the programs authorized under this Act,
the Agricultural Trade Development and Assistance Act of 1954
(7 U.S.C. 1691 et seq.), and other Acts.’’.
SEC. 251. REPORTS.

The first sentence of section 603 of the Agricultural Trade
Act of 1978 (7 U.S.C. 5713) is amended by striking ‘‘The’’ and
inserting ‘‘Subject to section 217 of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6917), the’’.
SEC. 252. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

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

‘‘TITLE VII—FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM
‘‘SEC. 701. DEFINITION OF ELIGIBLE TRADE ORGANIZATION.

7 USC 5721.

‘‘In this title, the term ‘eligible trade organization’ means a
United States trade organization that—
‘‘(1) promotes the export of 1 or more United States agricultural commodities or products; and
‘‘(2) does not have a business interest in or receive remuneration from specific sales of agricultural commodities or products.
‘‘SEC. 702. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

‘‘(a) IN GENERAL.—The Secretary shall establish and, in
cooperation with eligible trade organizations, carry out a foreign
market development cooperator program to maintain and develop
foreign markets for United States agricultural commodities and
products.
‘‘(b) ADMINISTRATION.—Funds made available to carry out this
title shall be used only to provide—
‘‘(1) cost-share assistance to an eligible trade organization
under a contract or agreement with the organization; and

Establishment.
7 USC 5722.

110 STAT. 972

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(2) assistance for other costs that are necessary or appropriate to carry out the foreign market development cooperator
program, including contingent liabilities that are not otherwise
funded.

7 USC 5723.

‘‘SEC. 703. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated to carry out this
title such sums as may be necessary for each of fiscal years 1996
through 2002.’’.

Subtitle C—Miscellaneous Agricultural
Trade Provisions
7 USC 5678.

President.

SEC. 261. EDWARD R. MADIGAN UNITED STATES AGRICULTURAL
EXPORT EXCELLENCE AWARD.

(a) FINDINGS.—Congress finds that—
(1) United States producers of agricultural products are
some of the most productive and efficient producers of agricultural products in the world;
(2) continued growth and expansion of markets for United
States agricultural exports is crucial to the continued development and economic well-being of rural areas of the United
States and the agricultural sector of the United States economy;
(3) in recent years, United States agricultural exports have
steadily increased, surpassing $54,000,000,000 in value in 1995;
(4) as United States agricultural producers move toward
a market-oriented system in which planting and other decisions
by producers are driven by national and international market
signals, developing new and expanding agricultural export markets is vital to maintaining a vibrant and healthy agricultural
sector and rural economy; and
(5) a United States agricultural export excellence award
will increase United States agricultural exports by—
(A) identifying efforts of United States entities to
develop and expand markets for United States agricultural
exports through the development of new products and services and through the use of innovative marketing techniques;
(B) recognizing achievements of those who have exhibited or supported entrepreneurial efforts to expand and
create new markets for United States agricultural exports
or increase the volume or value of United States agricultural exports; and
(C) disseminating information on successful methods
used to develop and expand markets for United States
agricultural exports.
(b) ESTABLISHMENT.—There is established the Edward R. Madigan United States Agricultural Export Excellence Award, which
shall be evidenced by a medal bearing the inscription ‘‘Edward
R. Madigan United States Agricultural Export Excellence Award’’.
The medal shall be of such design and materials and bear such
additional inscriptions as the Secretary of Agriculture (referred
to in this section as the ‘‘Secretary’’) may prescribe.
(c) SELECTION OF RECIPIENT.—The President or the Secretary
(on the basis of recommendations received from the board established under subsection (h)) shall periodically provide the award

PUBLIC LAW 104–127—APR. 4, 1996

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to companies and other entities that in the judgment of the President or the Secretary substantially encourage entrepreneurial
efforts in the food and agriculture sector for advancing United
States agricultural exports.
(d) PRESENTATION OF AWARD.—The presentation of the award
shall be made by the President or the Secretary with such ceremonies as the President or the Secretary considers proper.
(e) PUBLICATION OF AWARD.—An entity to which an award
is made under this section may publicize the receipt of the award
by the entity and use the award in advertising of the entity.
(f) CATEGORIES FOR WHICH AWARD MAY BE GIVEN.—Separate
awards shall be made to qualifying entities in each of the following
categories:
(1) Development of new products or services for agricultural
export markets.
(2) Development of new agricultural export markets.
(3) Creative marketing of products or services in agricultural export markets.
(g) CRITERIA FOR QUALIFICATION.—An entity may qualify for
an award under this section only if the entity—
(1)(A) applies to the board established under subsection
(h) in writing for the award; or
(B) is recommended for the award by a Governor of a
State;
(2)(A) has exhibited significant entrepreneurial effort to
create new markets for United States agricultural exports or
increase United States agricultural exports; or
(B) has provided significant assistance to others in an
effort to create new markets for United States agricultural
exports or increase United States agricultural exports;
(3) has not received another award in the same category
under subsection (f) during the preceding 5-year period; and
(4) meets such other requirements and specifications as
the Secretary determines are appropriate to achieve the objectives of this section.
(h) BOARD.—
(1) SELECTION.—The Secretary shall appoint a board of
evaluators, consisting of at least 5 individuals from the private
sector selected for their knowledge and experience in exporting
United States agricultural products.
(2) MEETINGS.—The board shall meet at least once annually
to review and evaluate all applicants and entities recommended
by States under subsection (g)(1).
(3) RECOMMENDATIONS OF BOARD.—The board shall report
its recommendations concerning the making of the award to
the Secretary.
(4) TERM.—Each member of the board may serve a term
of not to exceed 3 years.
(i) FUNDING.—The Secretary may seek and accept gifts from
public and private sources to carry out this section.
SEC. 262. REPORTING REQUIREMENTS RELATING TO TOBACCO.

Section 214 of the Tobacco Adjustment Act of 1983 (7 U.S.C.
509) is repealed.

President.

Reports.

110 STAT. 974

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 263. TRIGGERED EXPORT ENHANCEMENT.

7 USC 1421 note.

(a) READJUSTMENT OF SUPPORT LEVELS.—Section 1302 of the
Omnibus Budget Reconciliation Act of 1990 (Public Law 101–508;
7 U.S.C. 1421 note) is repealed.
(b) TRIGGERED MARKETING LOANS AND EXPORT ENHANCEMENT.—Section 4301 of the Omnibus Trade and Competitiveness
Act of 1988 (Public Law 100–418; 7 U.S.C. 1446 note) is repealed.
(c) EFFECTIVE DATE.—The amendments made by this section
shall be effective beginning with the 1996 crops of wheat, feed
grains, upland cotton, and rice.
SEC. 264. DISPOSITION OF COMMODITIES TO PREVENT WASTE.

Section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431)
is amended—
(1) in subsection (b)—
(A) in paragraph (7)—
(i) in subparagraph (D)(iv), by striking ‘‘one year
of acquisition’’ and all that follows through the period
at the end and inserting the following: ‘‘a reasonable
length of time, as determined by the Secretary, except
that the Secretary may permit the use of proceeds
in a country other than the country of origin—
‘‘(I) as necessary to expedite the transportation of
commodities and products furnished under this subsection;
or
‘‘(II) if the proceeds are generated in a currency generally accepted in the other country.’’; and
(ii) by striking the sentence following subparagraph (F) and inserting the following: ‘‘The Secretary
may approve the use of proceeds or services realized
from the sale or barter of a commodity furnished under
this subsection by a nonprofit voluntary agency,
cooperative, or intergovernmental agency or organization to meet administrative expenses incurred in
connection with activities undertaken under this subsection.’’;
(B) in paragraph (8), by striking subparagraph (C);
and
(C) by striking paragraphs (10), (11), and (12); and
(2) by striking subsection (c).
SEC. 265. DEBT-FOR-HEALTH-AND-PROTECTION SWAP.

(a) IN GENERAL.—Section 1517 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 1706) is repealed.
(b) TECHNICAL AMENDMENT.—Subsection (e)(3) of the Food for
Progress Act of 1985 (7 U.S.C. 1736o(e)(3)) is amended by striking
‘‘section 106’’ and inserting ‘‘section 103’’.
SEC. 266. POLICY ON EXPANSION OF INTERNATIONAL MARKETS.

Section 1207 of the Agriculture and Food Act of 1981 (7 U.S.C.
1736m) is repealed.
SEC. 267. POLICY ON MAINTENANCE AND DEVELOPMENT OF EXPORT
MARKETS.

Section 1121 of the Food Security Act of 1985 (7 U.S.C. 1736p)
is amended—
(1) by striking subsection (a); and
(2) in subsection (b)—

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110 STAT. 975

(A) by striking ‘‘(b)’’; and
(B) by striking paragraphs (1) through (4) and inserting
the following:
‘‘(1) be the premier supplier of agricultural and food products to world markets and expand exports of high value products;
‘‘(2) support the principle of free trade and the promotion
of fair trade in agricultural commodities and products;
‘‘(3) cooperate fully in all efforts to negotiate with foreign
countries further reductions in tariff and nontariff barriers
to trade, including sanitary and phytosanitary measures and
trade-distorting subsidies;
‘‘(4) aggressively counter unfair foreign trade practices as
a means of encouraging fairer trade;’’.
SEC. 268. POLICY ON TRADE LIBERALIZATION.

Section 1122 of the Food Security Act of 1985 (7 U.S.C. 1736q)
is repealed.
SEC. 269. AGRICULTURAL TRADE NEGOTIATIONS.

Section 1123 of the Food Security Act of 1985 (7 U.S.C. 1736r)
is amended to read as follows:
‘‘SEC. 1123. TRADE NEGOTIATIONS POLICY.

‘‘(a) FINDINGS.—Congress finds that—
‘‘(1) on a level playing field, United States producers are
the most competitive suppliers of agricultural products in the
world;
‘‘(2) exports of United States agricultural products
accounted for $54,000,000,000 in 1995, contributing a net
$24,000,000,000 to the merchandise trade balance of the United
States and supporting approximately 1,000,000 jobs;
‘‘(3) increased agricultural exports are critical to the future
of the farm, rural, and overall United States economy, but
the opportunities for increased agricultural exports are limited
by the unfair subsidies of the competitors of the United States,
and a variety of tariff and nontariff barriers to highly competitive United States agricultural products;
‘‘(4) international negotiations can play a key role in breaking down barriers to United States agricultural exports;
‘‘(5) the Uruguay Round Agreement on Agriculture made
significant progress in the attainment of increased market
access opportunities for United States exports of agricultural
products, for the first time—
‘‘(A) restraining foreign trade-distorting domestic support and export subsidy programs; and
‘‘(B) developing common rules for the application of
sanitary and phytosanitary restrictions;
that should result in increased exports of United States agricultural products, jobs, and income growth in the United States;
‘‘(6) the Uruguay Round Agreement on Agriculture did
not succeed in completely eliminating trade distorting domestic
support and export subsidies by—
‘‘(A) allowing the European Union to continue
unreasonable levels of spending on export subsidies; and
‘‘(B) failing to discipline monopolistic state trading entities, such as the Canadian Wheat Board, that use

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PUBLIC LAW 104–127—APR. 4, 1996

nontransparent and discriminatory pricing as a hidden de
facto export subsidy;
‘‘(7) during the period 1996 through 2002, there will be
several opportunities for the United States to negotiate fairer
trade in agricultural products, including further negotiations
under the World Trade Organization, and steps toward possible
free trade agreements of the Americas and Asian-Pacific Economic Cooperation (APEC); and
‘‘(8) the United States should aggressively use these
opportunities to achieve more open and fair opportunities for
trade in agricultural products.
‘‘(b) GOALS OF THE UNITED STATES IN AGRICULTURAL TRADE
NEGOTIATIONS.—The objectives of the United States with respect
to future negotiations on agricultural trade include—
‘‘(1) increasing opportunities for United States exports of
agricultural products by eliminating tariff and nontariff barriers to trade;
‘‘(2) leveling the playing field for United States producers
of agricultural products by limiting per unit domestic production supports to levels that are no greater than those available
in the United States;
‘‘(3) ending the practice of export dumping by eliminating
all trade distorting export subsidies and disciplining state trading entities so that they do not (except in cases of bona fide
food aid) sell in foreign markets at prices below domestic market
prices or prices below their full costs of acquiring and delivering
agricultural products to the foreign markets; and
‘‘(4) encouraging government policies that avoid pricedepressing surpluses.’’.
SEC. 270. POLICY ON UNFAIR TRADE PRACTICES.

Section 1164 of the Food Security Act of 1985 (Public Law
99–198; 99 Stat. 1499) is repealed.
SEC. 271. AGRICULTURAL AID AND TRADE MISSIONS.

(a) IN GENERAL.—The Agricultural Aid and Trade Missions
Act (7 U.S.C. 1736bb et seq.) is repealed.
(b) CONFORMING AMENDMENT.—Section 7 of Public Law 100–
277 (7 U.S.C. 1736bb note) is repealed.
SEC. 272. ANNUAL REPORTS BY AGRICULTURAL ATTACHES.

Section 108(b)(1)(B) of the Agricultural Act of 1954 (7 U.S.C.
1748(b)(1)(B)) is amended by striking ‘‘including fruits, vegetables,
legumes, popcorn and ducks’’.
SEC. 273. WORLD LIVESTOCK MARKET PRICE INFORMATION.

Section 1545 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 7 U.S.C. 1761 note) is repealed.
SEC. 274. ORDERLY LIQUIDATION OF STOCKS.

Sections 201 and 207 of the Agricultural Act of 1956 (7 U.S.C.
1851 and 1857) are repealed.
SEC. 275. SALES OF EXTRA LONG STAPLE COTTON.

Section 202 of the Agricultural Act of 1956 (7 U.S.C. 1852)
is repealed.

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110 STAT. 977

SEC. 276. REGULATIONS.

Section 707 of the Freedom for Russia and Emerging Eurasian
Democracies and Open Markets Support Act of 1992 (Public Law
102–511; 7 U.S.C. 5621 note) is amended by striking subsection
(d).
SEC. 277. EMERGING MARKETS.

(a) PROMOTION

OF

AGRICULTURAL EXPORTS

TO

EMERGING MAR-

KETS.—

(1) EMERGING MARKETS.—Section 1542 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–
624; 7 U.S.C. 5622 note) is amended—
(A) in the section heading, by striking ‘‘EMERGING
DEMOCRACIES’’ and inserting ‘‘EMERGING MARKETS’’;
(B) by striking ‘‘emerging democracies’’ each place it
appears in subsections (b), (d), and (e) and inserting
‘‘emerging markets’’;
(C) in subsection (c), by striking ‘‘emerging democracy’’
each place it appears and inserting ‘‘emerging market’’;
and
(D) by striking subsection (f) and inserting the following:
‘‘(f) EMERGING MARKET.—In this section and section 1543, the
term ‘emerging market’ means any country that the Secretary determines—
‘‘(1) is taking steps toward a market-oriented economy
through the food, agriculture, or rural business sectors of the
economy of the country; and
‘‘(2) has the potential to provide a viable and significant
market for United States agricultural commodities or products
of United States agricultural commodities.’’.
(2) FUNDING.—Section 1542 of the Food, Agriculture, Conservation, and Trade Act of 1990 is amended by striking subsection (a) and inserting the following:
‘‘(a) FUNDING.—The Commodity Credit Corporation shall make
available for fiscal years 1996 through 2002 not less than
$1,000,000,000 of direct credits or export credit guarantees for
exports to emerging markets under section 201 or 202 of the Agricultural Trade Act of 1978 (7 U.S.C. 5621 and 5622), in addition
to the amounts acquired or authorized under section 211 of the
Act (7 U.S.C. 5641) for the program.’’.
(3) AGRICULTURAL FELLOWSHIP PROGRAM.—Section 1542 of
the Food, Agriculture, Conservation, and Trade Act of 1990
is amended—
(A) in subsection (b), by striking the last sentence
and inserting the following: ‘‘The Commodity Credit Corporation shall give priority under this subsection to—
‘‘(A) projects that encourage the privatization of the agricultural sector or that benefit private farms or cooperatives in
emerging markets; and
‘‘(B) projects for which nongovernmental persons agree to
assume a relatively larger share of the costs.’’; and
(B) in subsection (d)—
(i) in the matter preceding paragraph (1), by striking ‘‘the Soviet Union’’ and inserting ‘‘emerging markets’’;
(ii) in paragraph (1)—

110 STAT. 978

7 USC 5622 note.

PUBLIC LAW 104–127—APR. 4, 1996

(I) in subparagraph (A)(i)—
(aa) by striking ‘‘1995’’ and inserting
‘‘2002’’; and
(bb) by striking ‘‘those systems, and identify’’ and inserting ‘‘the systems, including
potential reductions in trade barriers, and
identify and carry out’’;
(II) in subparagraph (B), by striking ‘‘shall’’
and inserting ‘‘may’’;
(III) in subparagraph (D), by inserting
‘‘(including the establishment of extension services)’’ after ‘‘technical assistance’’;
(IV) by striking subparagraph (F); and
(V) by redesignating subparagraphs (G), (H),
and (I) as subparagraphs (F), (G), and (H), respectively;
(iii) in paragraph (2)—
(I) by striking ‘‘the Soviet Union’’ each place
it appears and inserting ‘‘emerging markets’’;
(II) in subparagraph (A), by striking ‘‘a free
market food production and distribution system’’
and inserting ‘‘free market food production and
distribution systems’’;
(III) in subparagraph (B)—
(aa) in clause (i), by striking ‘‘Government’’ and inserting ‘‘governments’’;
(bb) in clause (iii)(II), by striking ‘‘and’’
at the end;
(cc) in clause (iii)(III), by striking the
period at the end and inserting ‘‘; and’’; and
(dd) by adding at the end of clause (iii)
the following:
‘‘(IV) to provide for the exchange of administrators and faculty members from agricultural and
other institutions to strengthen and revise educational programs in agricultural economics, agribusiness, and agrarian law, to support change
towards a free market economy in emerging markets.’’;
(IV) by striking subparagraph (D); and
(V) by redesignating subparagraph (E) as
subparagraph (D); and
(iv) by striking paragraph (3).
(4) UNITED STATES AGRICULTURAL COMMODITY.—Subsections (b) and (c) of section 1542 of the Food, Agriculture,
Conservation, and Trade Act of 1990 are amended by striking
‘‘section 101(6)’’ each place it appears and inserting ‘‘section
102(7)’’.
(5) REPORT.—The first sentence of section 1542(e)(2) of
the Food, Agriculture, Conservation, and Trade Act of 1990
is amended by striking ‘‘Not’’ and inserting ‘‘Subject to section
217 of the Department of Agriculture Reorganization Act of
1994 (7 U.S.C. 6917), not’’.
(b) AGRICULTURAL FELLOWSHIP PROGRAM FOR MIDDLE INCOME
COUNTRIES, EMERGING DEMOCRACIES, AND EMERGING MARKETS.—
Section 1543 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 3293) is amended—

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110 STAT. 979

(1) in the section heading, by striking ‘‘MIDDLE INCOME
COUNTRIES AND EMERGING DEMOCRACIES’’ and inserting ‘‘MIDDLE INCOME COUNTRIES, EMERGING DEMOCRACIES, AND
EMERGING MARKETS’’;
(2) in subsection (b), by adding at the end the following:
‘‘(5) EMERGING MARKET.—Any emerging market, as defined
in section 1542(f).’’; and
(3) in subsection (c)(1), by striking ‘‘food needs’’ and inserting ‘‘food and fiber needs’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 501 of the Agricultural Trade Development and
Assistance Act of 1954 (7 U.S.C. 1737) is amended—
(A) in subsection (a), by striking ‘‘emerging democracies’’ and inserting ‘‘emerging markets’’; and
(B) in subsection (b), by striking paragraph (1) and
inserting the following:
‘‘(1) EMERGING MARKET.—The term ‘emerging market’
means any country that the Secretary determines—
‘‘(A) is taking steps toward a market-oriented economy
through the food, agriculture, or rural business sectors
of the economy of the country; and
‘‘(B) has the potential to provide a viable and significant market for United States agricultural commodities
or products of United States agricultural commodities.’’.
(2) Section 201(d)(1)(C)(ii) of the Agricultural Trade Act
of 1978 (7 U.S.C. 5621(d)(1)(C)(ii)) is amended by striking
‘‘emerging democracies’’ and inserting ‘‘emerging markets’’.
(3) Section 202(d)(3)(B) of the Agricultural Trade Act of
1978 (7 U.S.C. 5622(d)(3)(B)) is amended by striking ‘‘emerging
democracies’’ and inserting ‘‘emerging markets’’.
SEC. 278. REIMBURSEMENT FOR OVERHEAD EXPENSES.

Section 1542(d)(1)(D) of the Food, Agriculture, Conservation,
and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 5622 note)
is amended by adding at the end the following: ‘‘Notwithstanding
any other provision of law, the assistance shall include assistance
for administrative and overhead expenses of the International
Cooperation and Development Program Area of the Foreign Agriculture Service, to the extent that the expenses were incurred
pursuant to reimbursable agreements entered into prior to September 30, 1993, the expenses do not exceed $2,000,000 per year,
and the expenses are not incurred for information technology systems.’’.
SEC. 279. LABELING OF DOMESTIC AND IMPORTED LAMB AND MUTTON.

Section 7 of the Federal Meat Inspection Act (21 U.S.C. 607)
is amended by adding at the end the following:
‘‘(f) LAMB AND MUTTON.—The Secretary, consistent with United
States international obligations, shall establish standards for the
labeling of sheep carcasses, parts of sheep carcasses, sheepmeat,
and sheepmeat food products.’’.
SEC. 280. IMPORT ASSISTANCE FOR CBI BENEFICIARY COUNTRIES AND
THE PHILIPPINES.

Section 583 of Public Law 100–202 (101 Stat. 1329–182) is
repealed.

Standards.

110 STAT. 980

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 281. STUDIES, REPORTS, AND OTHER PROVISIONS.
7 USC 624 note.

(a) IN GENERAL.—Sections 1551 through 1555, section 1558,
and section 1559 of subtitle E of title XV of the Food, Agriculture,
Conservation, and Trade Act of 1990 (Public Law 101–624; 104
Stat. 3696) (as redesignated by section 1011(d) of the Federal
Reports Elimination and Sunset Act of 1995 (Public Law 104–
66; 109 Stat. 709)) are repealed.
(b) LANGUAGE PROFICIENCY.—Section 1556 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–
624; 7 U.S.C. 5694 note) is amended by striking subsection (c).
SEC. 282. SENSE OF CONGRESS CONCERNING MULTILATERAL DISCIPLINES ON CREDIT GUARANTEES.

It is the sense of Congress that—
(1) in negotiations to establish multilateral disciplines on
agricultural export credits and credit guarantees, the United
States should not agree to any arrangement that is incompatible with the provisions of United States law that authorize
agricultural export credits and credit guarantees;
(2) in the negotiations (which are held under the auspices
of the Organization for Economic Cooperation and Development), the United States should not reach any agreement that
fails to impose disciplines on the practices of foreign government
trading entities such as the Australian Wheat Board, the
Canadian Wheat Board, the New Zealand Dairy Board, and
the Australian Dairy Board; and
(3) the disciplines should include greater openness in the
operations of the entities as long as the entities are subsidized
by the foreign government or have monopolies for exports of
a commodity that are sanctioned by the foreign government.
22 USC 288 note.

SEC. 283. INTERNATIONAL COTTON ADVISORY COMMITTEE.

President.

(a) IN GENERAL.—The President shall ensure that the Government of the United States participates as a full member of the
International Cotton Advisory Committee.
(b) REPRESENTATION BY THE SECRETARY.—The Secretary of
Agriculture shall represent the Government of the United States
as a member of the International Cotton Advisory Committee and
shall delegate the primary responsibility to represent the Government of the United States to appropriately qualified individuals.

TITLE III—CONSERVATION
Subtitle A—Definitions
SEC. 301. DEFINITIONS APPLICABLE TO HIGHLY ERODIBLE CROPLAND
CONSERVATION.

(a) CONSERVATION PLAN AND CONSERVATION SYSTEM.—Section
1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a)) is
amended—
(1) by redesignating paragraphs (2) through (16) as paragraphs (4) through (18), respectively; and
(2) by inserting after paragraph (1) the following:
‘‘(2) CONSERVATION PLAN.—The term ‘conservation plan’
means the document that—
‘‘(A) applies to highly erodible cropland;

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110 STAT. 981

‘‘(B) describes the conservation system applicable to
the highly erodible cropland and describes the decisions
of the person with respect to location, land use, tillage
systems, and conservation treatment measures and schedule; and
‘‘(C) is approved by the local soil conservation district,
in consultation with the local committees established under
section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) and the Secretary, or by
the Secretary.
‘‘(3) CONSERVATION SYSTEM.—The term ‘conservation system’ means a combination of 1 or more conservation measures
or management practices that—
‘‘(A) are based on local resource conditions, available
conservation technology, and the standards and guidelines
contained in the Natural Resources Conservation Service
field office technical guides; and
‘‘(B) are designed to achieve, in a cost effective and
technically practicable manner, a substantial reduction in
soil erosion or a substantial improvement in soil conditions
on a field or group of fields containing highly erodible
cropland when compared to the level of erosion or soil
conditions that existed before the application of the conservation measures and management practices.’’.
(b) FIELD.—Section 1201(a) of the Food Security Act of 1985
is amended by striking paragraph (7) (as redesignated by subsection
(a)(1)) and inserting the following:
‘‘(7) FIELD.—The term ‘field’ means a part of a farm that
is separated from the balance of the farm by permanent boundaries such as fences, roads, permanent waterways, or other
similar features. At the option of the owner or operator of
the farm, croplines may also be used to delineate a field if
farming practices make it probable that the croplines are not
subject to change. Any highly erodible land on which an agricultural commodity is produced after December 23, 1985, and
that is not exempt under section 1212, shall be considered
as part of the field in which the land was included on December
23, 1985, unless the owner and Secretary agree to modification
of the boundaries of the field to carry out this title.’’.
(c) HIGHLY ERODIBLE LAND.—Section 1201(a)(9) of the Food
Security Act of 1985 (as redesignated by subsection (a)(1)) is amended by adding at the end the following:
‘‘(C) EQUATIONS.—Not later than 60 days after the
date of enactment of this subparagraph, the Secretary shall
publish in the Federal Register the universal soil loss equation and wind erosion equation used by the Department
of Agriculture as of that date. The Secretary may not
change the equations after that date except following notice
and comment in a manner consistent with section 553
of title 5, United States Code.’’.
(d) CONFORMING AMENDMENTS.—Section 1212 of the Food Security Act of 1985 (16 U.S.C. 3812) is amended—
(1) in the first sentence of subsection (a)(2), by striking
‘‘that documents’’ and all that follows through ‘‘by the Secretary’’;

16 USC 3801.

Federal Register,
publication.

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(2) in subsection (c)(3), by striking ‘‘based on’’ and all
that follows through ‘‘and the Secretary,’’ and inserting ‘‘, in
which case,’’;
(3) in subsection (e)(1)(A), by striking ‘‘conservation compliance plan’’ and inserting ‘‘conservation plan’’; and
(4) in subsection (f)—
(A) in paragraph (1), by striking ‘‘that documents’’ and
all that follows through ‘‘under subsection (a)’’;
(B) in paragraph (3), by striking ‘‘prepared under subsection (a)’’; and
(C) in paragraph (4), by striking ‘‘that documents’’ and
all that follows through ‘‘subsection (a)’’.

Subtitle B—Highly Erodible Land
Conservation
SEC. 311. PROGRAM INELIGIBILITY.
Effective date.

Effective 90 days after the date of enactment of this Act,
section 1211 of the Food Security Act of 1985 (16 U.S.C. 3811)
is amended—
(1) in the matter preceding paragraph (1), by striking ‘‘following the date of enactment of this Act,’’;
(2) in paragraph (1)—
(A) by striking subparagraph (A) and inserting the
following:
‘‘(A) contract payments under a production flexibility
contract, marketing assistance loans, and any type of price
support or payment made available under the Agricultural
Market Transition Act, the Commodity Credit Corporation
Charter Act (15 U.S.C. 714 et seq.), or any other Act;’’;
(B) by striking subparagraph (C);
(C) in subparagraph (D), by striking ‘‘made under’’
and all that follows through ‘‘August 14, 1989’’;
(D) in subparagraph (E), by striking ‘‘Farmers Home
Administration’’ and inserting ‘‘Consolidated Farm Service
Agency’’; and
(E) by redesignating subparagraphs (D) and (E) as
subparagraphs (C) and (D), respectively; and
(3) by striking paragraph (3) and inserting the following:
‘‘(3) during the crop year—
‘‘(A) a payment made pursuant to a contract entered
into under the environmental quality incentives program
under chapter 4 of subtitle D;
‘‘(B) a payment under any other provision of subtitle
D;
‘‘(C) a payment under section 401 or 402 of the Agricultural Credit Act of 1978 (16 U.S.C. 2201 and 2202); or
‘‘(D) a payment, loan, or other assistance under section
3 or 8 of the Watershed Protection and Flood Prevention
Act (16 U.S.C. 1003 and 1006a).’’.
SEC. 312. CONSERVATION RESERVE LANDS.

Section 1212(a)(3) of the Food Security Act of 1985 (16 U.S.C.
3812(a)(3)) is amended by striking ‘‘shall, if the conservation plan
established under this subtitle for such land requires structures
to be constructed,’’ and inserting ‘‘shall only be required to apply

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a conservation plan established under this subtitle. The person
shall not be required to meet a higher conservation standard than
the standard applied to other highly erodible cropland located
within the same area. If the person’s conservation plan requires
structures to be constructed, the person shall’’.
SEC. 313. GOOD FAITH EXEMPTION.

(a) GRACE PERIOD TO RESUME CONSERVATION COMPLIANCE.—
Section 1212(f)(1) of the Food Security Act of 1985 (16 U.S.C.
3812(f)(1)) is amended—
(1) by striking ‘‘Except to the extent provided in paragraph
(2), no’’ and inserting ‘‘No’’; and
(2) by striking ‘‘such person has—’’ and all that follows
through the period at the end of subparagraph (B) and inserting
the following: ‘‘the person has acted in good faith and without
an intent to violate this subtitle. A person who meets the
requirements of this paragraph shall be allowed a reasonable
period of time, as determined by the Secretary, but not to
exceed 1 year, during which to implement the measures and
practices necessary to be considered to be actively applying
the person’s conservation plan.’’.
(b) SPECIAL PENALTIES REGARDING CERTAIN HIGHLY ERODIBLE
CROPLAND.—Section 1212(f)(2) of the Food Security Act of 1985
(16 U.S.C. 3812(f)(2)) is amended by striking ‘‘meets the requirements of paragraph (1)’’ and inserting ‘‘with respect to highly erodible cropland that was not in production prior to December 23,
1985, and has acted in good faith and without an intent to violate
the provisions’’.
(c) CONFORMING AMENDMENT.—Section 1212(f)(4) of the Food
Security Act of 1985 (16 U.S.C. 3812(f)(4)) is amended by striking
the last sentence.
SEC. 314. EXPEDITED PROCEDURES FOR GRANTING VARIANCES FROM
CONSERVATION PLANS.

Section 1212(f) of the Food Security Act of 1985 (16 U.S.C.
3812(f)(4)) is amended—
(1) in paragraph (4)(C), by striking ‘‘problem’’ and inserting
‘‘problem, including weather, pest, and disease problems’’; and
(2) by adding at the end the following:
‘‘(5) EXPEDITED PROCEDURES FOR TEMPORARY VARIANCES.—
After consultation with local conservation districts, the Secretary shall establish expedited procedures for the consideration
and granting of temporary variances under paragraph (4)(C).
If the request for a temporary variance under paragraph (4)(C)
involves the use of practices or measures to address weather,
pest, or disease problems, the Secretary shall make a decision
on whether to grant the variance during the 30-day period
beginning on the date of receipt of the request. If the Secretary
fails to render a decision during the period, the temporary
variance shall be considered granted.’’.
SEC. 315. DEVELOPMENT AND IMPLEMENTATION OF CONSERVATION
PLANS AND CONSERVATION SYSTEMS.

(a) DEVELOPMENT AND IMPLEMENTATION.—The Food Security
Act of 1985 is amended—
(1) by redesignating section 1213 (16 U.S.C. 3813) as section 1214; and

110 STAT. 984

PUBLIC LAW 104–127—APR. 4, 1996
(2) by inserting after section 1212 (16 U.S.C. 3812) the
following:

16 USC 3812a.

‘‘SEC. 1213. DEVELOPMENT AND IMPLEMENTATION OF CONSERVATION
PLANS AND CONSERVATION SYSTEMS.

‘‘(a) TECHNICAL REQUIREMENTS.—In connection with the standards and guidelines contained in Natural Resources Conservation
Service field office technical guides applicable to the development
and use of conservation measures and management practices as
part of a conservation system, the Secretary shall ensure that
the standards and guidelines permit a person to use a conservation
system that—
‘‘(1) is technically and economically feasible;
‘‘(2) is based on local resource conditions and available
conservation technology;
‘‘(3) is cost-effective; and
‘‘(4) does not cause undue economic hardship on the person
applying the conservation system under the person’s conservation plan.
‘‘(b) MEASUREMENT OF EROSION REDUCTION.—For the purpose
of determining whether there is a substantial reduction in soil
erosion on a field containing highly erodible cropland, the measurement of erosion reduction achieved by the application of a conservation system under a person’s conservation plan shall be based
on the estimated annual level of erosion at the time of the measurement compared to the estimated annual level of erosion that existed
before the implementation of the conservation measures and
management practices provided for in the conservation system.
‘‘(c) RESIDUE MEASUREMENT.—
‘‘(1) RESPONSIBILITIES OF THE SECRETARY.—For the purpose
of measuring the level of residue on a field, the Secretary
shall—
‘‘(A) take into account any residue incorporated into
the top 2 inches of soil, as well as the growing crop,
in the measurement;
‘‘(B) provide technical guidelines for acceptable residue
measurement methods;
‘‘(C) provide a certification system for third parties
to perform residue measurements; and
‘‘(D) provide for the acceptance and use of information
and data voluntarily provided by the producer regarding
the field.
‘‘(2) ACCEPTANCE OF PRODUCER MEASUREMENTS.—Annual
residue measurements supplied by a producer (including
measurements performed by a certified third party) shall be
used by the Secretary if the Secretary determines that the
measurements indicate that the residue level for the field meets
the level required under the conservation plan.
‘‘(d) CERTIFICATION OF COMPLIANCE.—
‘‘(1) IN GENERAL.—For the purpose of determining the eligibility of a person for program benefits specified in section
1211 at the time application is made for the benefits, the
Secretary shall permit the person to certify that the person
is complying with the person’s conservation plan.
‘‘(2) STATUS REVIEWS.—If a person makes a certification
under paragraph (1), the Secretary shall not be required to
carry out a review of the status of compliance of the person

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with the conservation plan under which the conservation system is being applied.
‘‘(3) REVISIONS AND MODIFICATIONS.—The Secretary shall
permit a person who makes a certification under paragraph
(1) with respect to a conservation plan to revise the conservation
plan in any manner, if the same level of conservation treatment
provided for by the conservation system under the person’s
conservation plan is maintained. The Secretary may not revise
the person’s conservation plan without the concurrence of the
person.
‘‘(e) TECHNICAL ASSISTANCE.—The Secretary shall, using available resources and consistent with the Secretary’s other conservation responsibilities and objectives, provide technical assistance to
a person throughout the development, revision, and application
of the conservation plan and any conservation system of the person.
At the request of the person, the Secretary may provide technical
assistance regarding conservation measures and management practices for other lands of the person that do not contain highly
erodible cropland.
‘‘(f) ENCOURAGEMENT OF ON-FARM RESEARCH.—To encourage
on-farm conservation research, the Secretary may allow a person
to include in the person’s conservation plan or a conservation system
under the plan, on a field trial basis, practices that are not currently
approved but that the Secretary considers have a reasonable likelihood of success.’’.
(b) TREATMENT OF TECHNICAL DETERMINATIONS.—Section
226(d)(2) of the Department of Agriculture Reorganization Act of
1994 (7 U.S.C. 6932(d)(2)) is amended—
(1) by striking ‘‘DETERMINATION.—With’’ and inserting
‘‘DETERMINATION.—
‘‘(A) IN GENERAL.—With’’; and
(2) by adding at the end the following:
‘‘(B) ECONOMIC HARDSHIP.—After a technical determination has been made, on a producer’s request, if a
county or area committee determines that the application
of the producer’s conservation system would impose an
undue economic hardship on the producer, the committee
shall provide the producer with relief to avoid the hardship.’’.
SEC. 316. INVESTIGATION OF POSSIBLE COMPLIANCE DEFICIENCIES.

Subtitle B of title XII of the Food Security Act of 1985 (as
amended by section 315(a)(1)) is amended by adding at the end
the following:
‘‘SEC. 1215. NOTICE AND INVESTIGATION OF POSSIBLE COMPLIANCE
DEFICIENCIES.

‘‘(a) IN GENERAL.—An employee of the Department of Agriculture who observes a possible compliance deficiency or other
potential violation of a conservation plan or this subtitle while
providing on-site technical assistance shall provide to the responsible persons, not later than 45 days after observing the possible
violation, information regarding actions needed to comply with the
plan and this subtitle. The employee shall provide the information
in lieu of reporting the observation as a compliance violation.
‘‘(b) CORRECTIVE ACTION.—The responsible persons shall
attempt to correct the deficiencies as soon as practicable after
receiving the information.

16 USC 3814.

110 STAT. 986

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(c) REVIEW.—If the corrective action is not fully implemented
not later than 1 year after the responsible persons receive the
information, the Secretary may conduct a review of the status
of compliance of the persons with the conservation plan and this
subtitle.’’.
16 USC 3811
note.

SEC. 317. WIND EROSION ESTIMATION PILOT PROJECT.

(a) IN GENERAL.—The Secretary of Agriculture shall conduct
a pilot project to review, and modify as appropriate, the use of
wind erosion factors under the highly erodible conservation requirements of subtitle B of title XII of the Food Security Act of 1985
(16 U.S.C. 3811 et seq.).
(b) SELECTION OF COUNTIES AND PRODUCERS.—The pilot project
shall be conducted for producers in those counties that—
(1) have approximately 100 percent of their cropland determined to be highly erodible under title XII of the Act;
(2) have a reasonable likelihood that the use of wind erosion
factors under title XII of the Act have resulted in an inequitable
application of the highly erodible land requirements of title
XII of the Act; and
(3) if the use of the land classification system under section
1201(a)(9)(A) of the Act (as redesignated by section 301(a)(1))
may result in a more accurate delineation of the cropland.
(c) ERRORS IN DELINEATION.—If the Secretary determines that
a significant error has occurred in delineating cropland under the
pilot project, the Secretary shall, at the request of the owners
or operators of the cropland, conduct a new delineation of the
cropland using the most accurate available delineation process,
as determined by the Secretary.

Subtitle C—Wetland Conservation
SEC. 321. PROGRAM INELIGIBILITY.

(a) PROGRAM INELIGIBILITY.—Section 1221 of the Food Security
Act of 1985 (16 U.S.C. 3821) is amended—
(1) by redesignating subsection (b) as subsection (c); and
(2) by striking the section heading and all that follows
through the end of subsection (a) and inserting the following:
‘‘SEC. 1221. PROGRAM INELIGIBILITY.

‘‘(a) PRODUCTION ON CONVERTED WETLAND.—Except as provided in this subtitle and notwithstanding any other provision
of law, any person who in any crop year produces an agricultural
commodity on converted wetland, as determined by the Secretary,
shall be—
‘‘(1) in violation of this section; and
‘‘(2) ineligible for loans or payments in an amount determined by the Secretary to be proportionate to the severity
of the violation.
‘‘(b) INELIGIBILITY FOR CERTAIN LOANS AND PAYMENTS.—If a
person is determined to have committed a violation under subsection
(a) during a crop year, the Secretary shall determine which of,
and the amount of, the following loans and payments for which
the person shall be ineligible:
‘‘(1) Contract payments under a production flexibility contract, marketing assistance loans, and any type of price support
or payment made available under the Agricultural Market

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Transition Act, the Commodity Credit Corporation Charter Act
(15 U.S.C. 714 et seq.), or any other Act.
‘‘(2) A loan made or guaranteed under the Consolidated
Farm and Rural Development Act (7 U.S.C. 1921 et seq.) or
any other provision of law administered by the Consolidated
Farm Service Agency, if the Secretary determines that the
proceeds of the loan will be used for a purpose that will contribute to conversion of a wetland (other than as provided in
this subtitle) to produce an agricultural commodity.
‘‘(3) During the crop year:
‘‘(A) A payment made pursuant to a contract entered
into under the environmental quality incentives program
under chapter 4 of subtitle D.
‘‘(B) A payment under any other provision of subtitle
D.
‘‘(C) A payment under section 401 or 402 of the Agricultural Credit Act of 1978 (16 U.S.C. 2201 and 2202).
‘‘(D) A payment, loan, or other assistance under section
3 or 8 of the Watershed Protection and Flood Prevention
Act (16 U.S.C. 1003 and 1006a).’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1221(c) of the Food Security Act of 1985 (as
redesignated by subsection (a)(1)) is amended—
(A) by striking ‘‘Except’’ and inserting ‘‘WETLAND
CONVERSION.—Except’’;
(B) by striking ‘‘subsequent to the date of enactment
of the Food, Agriculture, Conservation, and Trade Act of
1990’’ and inserting ‘‘beginning after November 28, 1990,’’;
and
(C) by striking ‘‘subsections (a) (1) through (3)’’ and
inserting ‘‘subsection (b)’’.
(2) Section 1221 of the Food Security Act of 1985 (as
amended by subsection (a)) is amended by adding at the end
the following:
‘‘(d) PRIOR LOANS.—This section shall not apply to a loan
described in subsection (b) made before December 23, 1985.’’.
SEC. 322. DELINEATION OF WETLANDS; EXEMPTIONS TO PROGRAM
INELIGIBILITY.

(a) DELINEATION OF WETLANDS.—Section 1222 of the Food Security Act of 1985 (16 U.S.C. 3822) is amended by striking subsection
(a) and inserting the following:
‘‘(a) DELINEATION BY THE SECRETARY.—
‘‘(1) IN GENERAL.—Subject to subsection (b) and paragraph
(6), the Secretary shall delineate, determine, and certify all
wetlands located on subject land on a farm.
‘‘(2) WETLAND DELINEATION MAPS.—The Secretary shall
delineate wetlands on wetland delineation maps. On the request
of a person, the Secretary shall make a reasonable effort to
make an on-site wetland determination prior to delineation.
‘‘(3) CERTIFICATION.—On providing notice to affected persons, the Secretary shall—
‘‘(A) certify whether a map is sufficient for the purpose
of making a determination of ineligibility for program benefits under section 1221; and
‘‘(B) provide an opportunity to appeal the certification
prior to the certification becoming final.

16 USC 3821.

110 STAT. 988

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(4) DURATION OF CERTIFICATION.—A final certification
made under paragraph (3) shall remain valid and in effect
as long as the area is devoted to an agricultural use or until
such time as the person affected by the certification requests
review of the certification by the Secretary.
‘‘(5) REVIEW OF MAPPING ON APPEAL.—In the case of an
appeal of the Secretary’s certification, the Secretary shall
review and certify the accuracy of the mapping of all land
subject to the appeal to ensure that the subject land has been
accurately delineated. Prior to rendering a decision on the
appeal, the Secretary shall conduct an on-site inspection of
the subject land on a farm.
‘‘(6) RELIANCE ON PRIOR CERTIFIED DELINEATION.—No person shall be adversely affected because of having taken an
action based on a previous certified wetland delineation by
the Secretary. The delineation shall not be subject to a subsequent wetland certification or delineation by the Secretary,
unless requested by the person under paragraph (4).’’.
(b) EXEMPTIONS.—Section 1222 of the Food Security Act of
1985 (16 U.S.C. 3822) is amended by striking subsection (b) and
inserting the following:
‘‘(b) EXEMPTIONS.—No person shall become ineligible under section 1221 for program loans or payments under the following circumstances:
‘‘(1) As the result of the production of an agricultural
commodity on the following lands:
‘‘(A) A converted wetland if the conversion of the wetland was commenced before December 23, 1985.
‘‘(B) Land that is a nontidal drainage or irrigation
ditch excavated in upland.
‘‘(C) A wet area created by a water delivery system,
irrigation, irrigation system, or application of water for
irrigation.
‘‘(D) A wetland on which the owner or operator of
a farm or ranch uses normal cropping or ranching practices
to produce an agricultural commodity in a manner that
is consistent for the area where the production is possible
as a result of a natural condition, such as drought, and
is without action by the producer that destroys a natural
wetland characteristic.
‘‘(E) Land that is an artificial lake or pond created
by excavating or diking land (that is not a wetland) to
collect and retain water and that is used primarily for
livestock watering, fish production, irrigation, wildlife, fire
control, flood control, cranberry growing, or rice production,
or as a settling pond.
‘‘(F) A wetland that is temporarily or incidentally created as a result of adjacent development activity.
‘‘(G) A converted wetland if the original conversion
of the wetland was commenced before December 23, 1985,
and the Secretary determines the wetland characteristics
returned after that date as a result of—
‘‘(i) the lack of maintenance of drainage, dikes,
levees, or similar structures;
‘‘(ii) a lack of management of the lands containing
the wetland; or

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‘‘(iii) circumstances beyond the control of the person.
‘‘(H) A converted wetland, if—
‘‘(i) the converted wetland was determined by the
Natural Resources Conservation Service to have been
manipulated for the production of an agricultural
commodity or forage prior to December 23, 1985, and
was returned to wetland conditions through a voluntary restoration, enhancement, or creation action
subsequent to that determination;
‘‘(ii) technical determinations regarding the prior
site conditions and the restoration, enhancement, or
creation action have been adequately documented by
the Natural Resources Conservation Service;
‘‘(iii) the proposed conversion action is approved
by the Natural Resources Conservation Service prior
to implementation; and
‘‘(iv) the extent of the proposed conversion is limited so that the conditions will be at least equivalent
to the wetland functions and values that existed prior
to implementation of the voluntary wetland restoration, enhancement, or creation action.
‘‘(2) For the conversion of the following:
‘‘(A) An artificial lake or pond created by excavating
or diking land that is not a wetland to collect and retain
water and that is used primarily for livestock watering,
fish production, irrigation, wildlife, fire control, flood control, cranberry growing, rice production, or as a settling
pond.
‘‘(B) A wetland that is temporarily or incidentally created as a result of adjacent development activity.
‘‘(C) A wetland on which the owner or operator of
a farm or ranch uses normal cropping or ranching practices
to produce an agricultural commodity in a manner that
is consistent for the area where the production is possible
as a result of a natural condition, such as drought, and
is without action by the producer that destroys a natural
wetland characteristic.
‘‘(D) A wetland previously identified as a converted
wetland (if the original conversion of the wetland was
commenced before December 23, 1985), but that the Secretary determines returned to wetland status after that
date as a result of—
‘‘(i) the lack of maintenance of drainage, dikes,
levees, or similar structures;
‘‘(ii) a lack of management of the lands containing
the wetland; or
‘‘(iii) circumstances beyond the control of the person.
‘‘(E) A wetland, if—
‘‘(i) the wetland was determined by the Natural
Resources Conservation Service to have been manipulated for the production of an agricultural commodity
or forage prior to December 23, 1985, and was returned
to wetland conditions through a voluntary restoration,
enhancement, or creation action subsequent to that
determination;

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‘‘(ii) technical determinations regarding the prior
site conditions and the restoration, enhancement, or
creation action have been adequately documented by
the Natural Resources Conservation Service;
‘‘(iii) the proposed conversion action is approved
by the Natural Resources Conservation Service prior
to implementation; and
‘‘(iv) the extent of the proposed conversion is limited so that the conditions will be at least equivalent
to the wetland functions and values that existed prior
to implementation of the voluntary wetland restoration, enhancement, or creation action.’’.
(c) IDENTIFICATION OF MINIMAL EFFECT EXEMPTIONS.—Section
1222 of the Food Security Act of 1985 (16 U.S.C. 3822) is amended
by striking subsection (d) and inserting the following:
‘‘(d) IDENTIFICATION OF MINIMAL EFFECT EXEMPTIONS.—For
purposes of applying the minimal effect exemption under subsection
(f)(1), the Secretary shall identify by regulation categorical minimal
effect exemptions on a regional basis to assist persons in avoiding
a violation of the ineligibility provisions of section 1221. The Secretary shall ensure that employees of the Department of Agriculture
who administer this subtitle receive appropriate training to properly
apply the minimal effect exemptions determined by the Secretary.’’.
(d) MINIMAL EFFECT AND MITIGATION EXEMPTIONS.—Section
1222 of the Food Security Act of 1985 (16 U.S.C. 3822) is amended
by striking subsection (f) and inserting the following:
‘‘(f) MINIMAL EFFECT; MITIGATION.—The Secretary shall exempt
a person from the ineligibility provisions of section 1221 for any
action associated with the production of an agricultural commodity
on a converted wetland, or the conversion of a wetland, if 1 or
more of the following conditions apply, as determined by the Secretary:
‘‘(1) The action, individually and in connection with all
other similar actions authorized by the Secretary in the area,
will have a minimal effect on the functional hydrological and
biological value of the wetlands in the area, including the
value to waterfowl and wildlife.
‘‘(2) The wetland and the wetland values, acreage, and
functions are mitigated by the person through the restoration
of a converted wetland, the enhancement of an existing wetland,
or the creation of a new wetland, and the restoration, enhancement, or creation is—
‘‘(A) in accordance with a wetland conservation plan;
‘‘(B) in advance of, or concurrent with, the action;
‘‘(C) not at the expense of the Federal Government;
‘‘(D) in the case of enhancement or restoration of wetlands, on not greater than a 1-for-1 acreage basis unless
more acreage is needed to provide equivalent functions
and values that will be lost as a result of the wetland
conversion to be mitigated;
‘‘(E) in the case of creation of wetlands, on greater
than a 1-for-1 acreage basis if more acreage is needed
to provide equivalent functions and values that will be
lost as a result of the wetland conversion that is mitigated;
‘‘(F) on lands in the same general area of the local
watershed as the converted wetland; and

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‘‘(G) with respect to the restored, enhanced, or created
wetland, made subject to an easement that—
‘‘(i) is recorded on public land records;
‘‘(ii) remains in force for as long as the converted
wetland for which the restoration, enhancement, or
creation to be mitigated remains in agricultural use
or is not returned to its original wetland classification
with equivalent functions and values; and
‘‘(iii) prohibits making alterations to the restored,
enhanced, or created wetland that lower the wetland’s
functions and values.
‘‘(3) The wetland was converted after December 23, 1985,
but before November 28, 1990, and the wetland values, acreage,
and functions are mitigated by the producer through the
requirements of subparagraphs (A), (B), (C), (D), (F), and (G)
of paragraph (2).
‘‘(4) The action was authorized by a permit issued under
section 404 of the Federal Water Pollution Control Act (33
U.S.C. 1344) and the wetland values, acreage, and functions
of the converted wetland were adequately mitigated for the
purposes of this subtitle.’’.
(e) REFERENCES TO PRODUCER.—Section 1222(g) of the Food
Security Act of 1985 (16 U.S.C. 3822(g)) is amended by striking
‘‘producer’’ and inserting ‘‘person’’.
(f) GOOD FAITH EXEMPTION.—Section 1222 of the Food Security
Act of 1985 (16 U.S.C. 3822) is amended by striking subsection
(h) and inserting the following:
‘‘(h) GOOD FAITH EXEMPTION.—
‘‘(1) EXEMPTION DESCRIBED.—The Secretary may waive a
person’s ineligibility under section 1221 for program loans,
payments, and benefits as the result of the conversion of a
wetland subsequent to November 28, 1990, or the production
of an agricultural commodity on a converted wetland, if the
Secretary determines that the person has acted in good faith
and without intent to violate this subtitle.
‘‘(2) PERIOD FOR COMPLIANCE.—The Secretary shall provide
a person who the Secretary determines has acted in good faith
and without intent to violate this subtitle with a reasonable
period, but not to exceed 1 year, during which to implement
the measures and practices necessary to be considered to
actively restoring the subject wetland.’’.
(g) RESTORATION.—Section 1222(i) of the Food Security Act
of 1985 (16 U.S.C. 3822(i)) is amended by inserting before the
period at the end the following: ‘‘or has otherwise mitigated for
the loss of wetland values, as determined by the Secretary, through
the restoration, enhancement, or creation of wetland values in
the same general area of the local watershed as the converted
wetland’’.
(h) DETERMINATIONS.—Section 1222 of the Food Security Act
of 1985 (16 U.S.C. 3822) is amended by striking subsection (j)
and inserting the following:
‘‘(j) DETERMINATIONS; RESTORATION AND MITIGATION PLANS;
MONITORING ACTIVITIES.—Technical determinations, the development of restoration and mitigation plans, and monitoring activities
under this section shall be made by the National Resources Conservation Service.’’.

110 STAT. 992

PUBLIC LAW 104–127—APR. 4, 1996

(i) MITIGATION BANKING.—Section 1222 of the Food Security
Act of 1985 (16 U.S.C. 3822) is amended by adding at the end
the following:
‘‘(k) MITIGATION BANKING PROGRAM.—Using authorities available to the Secretary, the Secretary may operate a pilot program
for mitigation banking of wetlands to assist persons to increase
the efficiency of agricultural operations while protecting wetland
functions and values. Subsection (f)(2)(C) shall not apply to this
subsection.’’.
SEC. 323. CONSULTATION AND COOPERATION REQUIREMENTS.

Section 1223 of the Food Security Act of 1985 (16 U.S.C. 3823)
is repealed.
SEC. 324. APPLICATION OF PROGRAM INELIGIBILITY TO AFFILIATED
PERSONS.

The Food Security Act of 1985 (as amended by section 323)
is amended by inserting after section 1222 (16 U.S.C. 3822) the
following:
16 USC 3823.

‘‘SEC. 1223. AFFILIATED PERSONS.

‘‘If a person is affected by a reduction in benefits under section
1221 and the affected person is affiliated with other persons for
the purpose of receiving the benefits, the benefits of each affiliated
person shall be reduced under section 1221 in proportion to the
interest held by the affiliated person.’’.
SEC. 325. CLARIFICATION OF DEFINITION OF AGRICULTURAL LANDS
IN MEMORANDUM OF AGREEMENT.

(a) AGRICULTURAL LANDS.—For purposes of implementing the
memorandum of agreement entered into between the Department
of Agriculture, the Environmental Protection Agency, the Department of the Interior, and the Department of the Army on January
6, 1994, relating to the delineation of wetlands, the term ‘‘agricultural lands’’ shall include—
(1) native pasture, rangelands, and other lands used to
produce or support the production of livestock; and
(2) tree farms.
(b) WETLAND CONSERVATION.—Subsection (a) shall not apply
with respect to the delineation of wetlands under subtitle C of
title XII of the Food Security Act of 1985 (16 U.S.C. 3821 et
seq.) or to the enforcement of the subtitle.
(c) SUCCESSOR MEMORANDUM.—Subsection (a) shall apply to
any amendment to or successor of the memorandum of agreement
described in subsection (a).
16 USC 3821
note.

SEC. 326. EFFECTIVE DATE.

This subtitle and the amendments made by this subtitle shall
become effective 90 days after the date of enactment of this Act.

Subtitle D—Environmental Conservation
Acreage Reserve Program
SEC. 331. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM.

Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830)
is amended to read as follows:

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 993

‘‘SEC. 1230. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE
PROGRAM.

‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—During the 1996 through 2002 calendar
years, the Secretary shall establish an environmental conservation acreage reserve program (referred to in this section as
‘ECARP’) to be implemented through contracts and the acquisition of easements to assist owners and operators of farms
and ranches to conserve and enhance soil, water, and related
natural resources, including grazing land, wetland, and wildlife
habitat.
‘‘(2) MEANS.—The Secretary shall carry out the ECARP
by—
‘‘(A) providing for the long-term protection of environmentally sensitive land; and
‘‘(B) providing technical and financial assistance to
farmers and ranchers to—
‘‘(i) improve the management and operation of the
farms and ranches; and
‘‘(ii) reconcile productivity and profitability with
protection and enhancement of the environment.
‘‘(3) PROGRAMS.—The ECARP shall consist of—
‘‘(A) the conservation reserve program established
under subchapter B;
‘‘(B) the wetlands reserve program established under
subchapter C; and
‘‘(C) the environmental quality incentives program
established under chapter 4.
‘‘(b) ADMINISTRATION.—
‘‘(1) IN GENERAL.—In carrying out the ECARP, the Secretary shall enter into contracts with owners and operators
and acquire interests in land through easements from owners,
as provided in this chapter and chapter 4.
‘‘(2) PRIOR ENROLLMENTS.—Acreage enrolled in the conservation reserve or wetlands reserve program prior to the
date of enactment of this paragraph shall be considered to
be placed into the ECARP.
‘‘(c) CONSERVATION PRIORITY AREAS.—
‘‘(1) DESIGNATION.—The Secretary may designate watersheds, multistate areas, or regions of special environmental
sensitivity as conservation priority areas that are eligible for
enhanced assistance under this chapter and chapter 4.
‘‘(2) ASSISTANCE.—The Secretary may designate areas as
conservation priority areas to assist, to the maximum extent
practicable, agricultural producers within the conservation
priority areas to comply with nonpoint source pollution requirements under the Federal Water Pollution Control Act (33 U.S.C.
1251 et seq.) and other Federal and State environmental laws
and to meet other conservation needs.
‘‘(3) PRODUCERS.—The Secretary may provide technical
assistance, cost-share payments, and incentive payments to
producers in a conservation priority area under this chapter
and chapter 4 based on—
‘‘(A) the significance of the soil, water, wildlife habitat,
and related natural resource problems in a watershed,
multistate area, or region; and

Contracts.

110 STAT. 994

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(B) the structural practices or land management practices that best address the problems, and that maximize
environmental benefits for each dollar expended, as determined by the Secretary.’’.

SEC. 332. CONSERVATION RESERVE PROGRAM.

(a) PROGRAM EXTENSIONS.—
(1) CONSERVATION RESERVE PROGRAM.—Section 1231 of the
Food Security Act of 1985 (16 U.S.C. 3831) is amended by
striking ‘‘1995’’ each place it appears and inserting ‘‘2002’’.
(2) DUTIES OF OWNERS AND OPERATORS.—Section 1232(c)
of the Food Security Act of 1985 (16 U.S.C. 3832(c)) is amended
by striking ‘‘1995’’ and inserting ‘‘2002’’.
(b) MAXIMUM ENROLLMENT.—Section 1231 of the Food Security
Act of 1985 (16 U.S.C. 3831) is amended by striking subsection
(d) and inserting the following:
‘‘(d) MAXIMUM ENROLLMENT.—The Secretary may maintain up
to 36,400,000 acres in the conservation reserve at any one time
during the 1986 through 2002 calendar years (including contracts
extended by the Secretary pursuant to section 1437(c) of the Food,
Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–
624; 16 U.S.C. 3831 note)).’’.
(c) OPTIONAL CONTRACT TERMINATION BY PRODUCERS.—Section
1235 of the Food Security Act of 1985 (16 U.S.C. 3835) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by striking ‘‘3-year’’ and inserting
‘‘1-year’’; and
(B) in paragraph (2)(B)(i), by striking ‘‘3 years’’ and
inserting ‘‘1 year’’; and
(2) by adding at the end the following:
‘‘(e) TERMINATION BY OWNER OR OPERATOR.—
‘‘(1) EARLY TERMINATION AUTHORIZED.—Subject to the other
provisions of this subsection, the Secretary shall allow a participant who entered into a contract before January 1, 1995, to
terminate the contract at any time if the contract has been
in effect for at least 5 years. The termination shall not relieve
the participant of liability for a contract violation occurring
before the date of the termination. The participant shall provide
the Secretary with reasonable notice of the participant’s desire
to terminate the contract.
‘‘(2) CERTAIN LANDS EXCEPTED.—The following lands shall
not be subject to an early termination of contract under this
subsection:
‘‘(A) Filterstrips, waterways, strips adjacent to riparian
areas, windbreaks, and shelterbelts.
‘‘(B) Land with an erodibility index of more than 15.
‘‘(C) Other lands of high environmental value (including wetlands), as determined by the Secretary.
‘‘(3) EFFECTIVE DATE.—The contract termination shall
become effective 60 days after the date on which the owner
or operator submits the notice required under paragraph (1).
‘‘(4) PRORATED RENTAL PAYMENT.—If a contract entered
into under this subchapter is terminated under this subsection
before the end of the fiscal year for which a rental payment
is due, the Secretary shall provide a prorated rental payment
covering the portion of the fiscal year during which the contract
was in effect.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 995

‘‘(5) RENEWED ENROLLMENT.—The termination of a contract
entered into under this subchapter shall not affect the ability
of the owner or operator who requested the termination to
submit a subsequent bid to enroll the land that was subject
to the contract into the conservation reserve.
‘‘(6) CONSERVATION REQUIREMENTS.—If land that was subject to a contract is returned to production of an agricultural
commodity, the conservation requirements under subtitles B
and C shall apply to the use of the land to the extent that
the requirements are similar to those requirements imposed
on other similar lands in the area, except that the requirements
may not be more onerous than the requirements imposed on
other lands.’’.
(d) ENROLLMENTS IN 1997.—Section 725 of the Agriculture,
Rural Development, Food and Drug Administration, and Related
Agencies Appropriations Act, 1996 (Public Law 104–37; 109 Stat.
332), is amended by striking ‘‘: Provided,’’ and all that follows
through ‘‘1997’’.
SEC. 333. WETLANDS RESERVE PROGRAM.

(a) ENROLLMENT.—Section 1237 of the Food Security Act of
1985 (16 U.S.C. 3837) is amended by striking subsection (b) and
inserting the following:
‘‘(b) ENROLLMENT CONDITIONS.—
‘‘(1) MAXIMUM ENROLLMENT.—The total number of acres
enrolled in the wetlands reserve program shall not exceed
975,000 acres.
‘‘(2) METHODS OF ENROLLMENT.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), effective beginning October 1, 1996, to the maximum extent
practicable, the Secretary shall enroll into the wetlands
reserve program—
‘‘(i) 1⁄3 of the acres through the use of permanent
easements;
‘‘(ii) 1⁄3 of the acres through the use of 30-year
easements; and
‘‘(iii) 1⁄3 of the acres through the use of restoration
cost-share agreements.
‘‘(B) TEMPORARY EASEMENTS.—Effective beginning
October 1, 1996, the Secretary shall not enroll acres in
the wetlands reserve program through the use of new
permanent easements until the Secretary has enrolled at
least 75,000 acres in the program through the use of temporary easements.’’.
(b) ELIGIBILITY.—Section 1237(c) of the Food Security Act of
1985 (16 U.S.C. 3837(c)) is amended—
(1) by striking ‘‘2000’’ and inserting ‘‘2002’’;
(2) by redesignating paragraphs (1) and (2) as paragraphs
(2) and (3), respectively; and
(3) by inserting after ‘‘determines that—’’ the following:
‘‘(1) such land maximizes wildlife benefits and wetland
values and functions;’’.
(c) OTHER ELIGIBLE LANDS.—Section 1237(d) of the Food Security Act of 1985 (16 U.S.C. 3837(d)) is amended—
(1) by inserting after ‘‘subsection (c)’’ the following ‘‘, land
that maximizes wildlife benefits and that is’’; and

110 STAT. 996

Effective date.

16 USC 3837
note.

PUBLIC LAW 104–127—APR. 4, 1996

(2) in paragraph (2), by striking ‘‘and’’ at the end and
inserting ‘‘or’’.
(d) EASEMENTS.—Section 1237A of the Food Security Act of
1985 (16 U.S.C. 3837a) is amended—
(1) in the section heading, by inserting before the period
at the end the following: ‘‘AND AGREEMENTS’’;
(2) by striking subsection (c) and inserting the following:
‘‘(c) RESTORATION PLANS.—The development of a restoration
plan, including any compatible use, under this section shall be
made through the local Natural Resources Conservation Service
representative, in consultation with the State technical committee.’’;
(3) in subsection (f), by striking the third sentence and
inserting the following: ‘‘Compensation may be provided in
not less than 5, nor more than 30, annual payments of equal
or unequal size, as agreed to by the owner and the Secretary.’’;
and
(4) by adding at the end the following:
‘‘(h) RESTORATION COST-SHARE AGREEMENTS.—The Secretary
may enroll land into the wetlands reserve program through an
agreement that requires the landowner to restore wetlands on the
land, if the agreement does not provide the Secretary with an
easement.’’.
(e) COST-SHARE AND TECHNICAL ASSISTANCE.—Section 1237C
of the Food Security Act of 1985 (16 U.S.C. 3837c) is amended
by striking subsection (b) and inserting the following:
‘‘(b) COST-SHARE AND TECHNICAL ASSISTANCE.—
‘‘(1) EASEMENTS.—Effective beginning October 1, 1996, in
making cost-share payments under subsection (a)(1), the Secretary shall—
‘‘(A) in the case of a permanent easement, pay the
owner an amount that is not less than 75 percent, but
not more than 100 percent, of the eligible costs; and
‘‘(B) in the case of a 30-year easement, pay the owner
an amount that is not less than 50 percent, but not more
than 75 percent, of the eligible costs.
‘‘(2) RESTORATION COST-SHARE AGREEMENTS.—In making
cost-share payments in connection with a restoration cost-share
agreement entered into under section 1237A(h), the Secretary
shall pay the owner an amount that is not less than 50 percent,
but not more than 75 percent, of the eligible costs.
‘‘(3) TECHNICAL ASSISTANCE.—The Secretary shall provide
owners with technical assistance to assist owners in complying
with the terms of easements and restoration cost-share agreements.’’.
(f) EFFECT ON EXISTING AGREEMENTS.—The amendments made
by this section shall not affect the validity or terms of any agreements entered into by the Secretary of Agriculture under subchapter
C of chapter 1 of subtitle D of title XII of the Food Security
Act of 1985 (16 U.S.C. 3837 et seq.) before the date of enactment
of this Act or any payments required to be made in connection
with the agreements.
SEC. 334. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

Subtitle D of title XII of the Food Security Act of 1985 (16
U.S.C. 3830 et seq.) is amended by adding at the end the following:

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 997

‘‘CHAPTER 4—ENVIRONMENTAL QUALITY INCENTIVES
PROGRAM
‘‘SEC. 1240. PURPOSES.

16 USC 3839aa.

‘‘The purposes of the environmental quality incentives program
established by this chapter are to—
‘‘(1) combine into a single program the functions of—
‘‘(A) the agricultural conservation program authorized
by sections 7 and 8 of the Soil Conservation and Domestic
Allotment Act (16 U.S.C. 590g and 590h) (as in effect
before the amendments made by section 336(a)(1) of the
Federal Agriculture Improvement and Reform Act of 1996);
‘‘(B) the Great Plains conservation program established
under section 16(b) of the Soil Conservation and Domestic
Allotment Act (16 U.S.C. 590p(b)) (as in effect before the
amendment made by section 336(b)(1) of the Federal Agriculture Improvement and Reform Act of 1996);
‘‘(C) the water quality incentives program established
under chapter 2 (as in effect before the amendment made
by section 336(h) of the Federal Agriculture Improvement
and Reform Act of 1996); and
‘‘(D) the Colorado River Basin salinity control program
established under section 202(c) of the Colorado River Basin
Salinity Control Act (43 U.S.C. 1592(c)) (as in effect before
the amendment made by section 336(c)(1) of the Federal
Agriculture Improvement and Reform Act of 1996); and
‘‘(2) carry out the single program in a manner that maximizes environmental benefits per dollar expended, and that
provides—
‘‘(A) flexible technical and financial assistance to farmers and ranchers that face the most serious threats to
soil, water, and related natural resources, including grazing
lands, wetlands, and wildlife habitat;
‘‘(B) assistance to farmers and ranchers in complying
with this title and Federal and State environmental laws,
and encourages environmental enhancement;
‘‘(C) assistance to farmers and ranchers in making
beneficial, cost-effective changes to cropping systems, grazing management, manure, nutrient, pest, or irrigation
management, land uses, or other measures needed to conserve and improve soil, water, and related natural
resources; and
‘‘(D) for the consolidation and simplification of the conservation planning process to reduce administrative burdens on producers.
‘‘SEC. 1240A. DEFINITIONS.

‘‘In this chapter:
‘‘(1) ELIGIBLE LAND.—The term ‘eligible land’ means agricultural land (including cropland, rangeland, pasture, and other
land on which crops or livestock are produced), including agricultural land that the Secretary determines poses a serious
threat to soil, water, or related resources by reason of the
soil types, terrain, climatic, soil, topographic, flood, or saline
characteristics, or other factors or natural hazards.
‘‘(2) LAND MANAGEMENT PRACTICE.—The term ‘land
management practice’ means a site-specific nutrient or manure

16 USC
3839aa–1.

110 STAT. 998

PUBLIC LAW 104–127—APR. 4, 1996
management, integrated pest management, irrigation management, tillage or residue management, grazing management,
or other land management practice carried out on eligible land
that the Secretary determines is needed to protect, in the
most cost-effective manner, water, soil, or related resources
from degradation.
‘‘(3) LIVESTOCK.—The term ‘livestock’ means dairy cattle,
beef cattle, laying hens, broilers, turkeys, swine, sheep, and
such other animals as determined by the Secretary.
‘‘(4) PRODUCER.—The term ‘producer’ means a person who
is engaged in livestock or agricultural production (as defined
by the Secretary).
‘‘(5) STRUCTURAL PRACTICE.—The term ‘structural practice’
means—
‘‘(A) the establishment on eligible land of a site-specific
animal waste management facility, terrace, grassed waterway, contour grass strip, filterstrip, tailwater pit, permanent wildlife habitat, or other structural practice that the
Secretary determines is needed to protect, in the most
cost-effective manner, water, soil, or related resources from
degradation; and
‘‘(B) the capping of abandoned wells on eligible land.

16 USC
3839aa–2.

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

‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—During the 1996 through 2002 fiscal
years, the Secretary shall provide technical assistance, costshare payments, incentive payments, and education to producers, who enter into contracts with the Secretary, through an
environmental quality incentives program in accordance with
this chapter.
‘‘(2) ELIGIBLE PRACTICES.—
‘‘(A) STRUCTURAL PRACTICES.—A producer who implements a structural practice shall be eligible for any combination of technical assistance, cost-share payments, and
education.
‘‘(B) LAND MANAGEMENT PRACTICES.—A producer who
performs a land management practice shall be eligible for
any combination of technical assistance, incentive payments, and education.
‘‘(b) APPLICATION AND TERM.—A contract between a producer
and the Secretary under this chapter may—
‘‘(1) apply to 1 or more structural practices or 1 or more
land management practices, or both; and
‘‘(2) have a term of not less than 5, nor more than 10,
years, as determined appropriate by the Secretary, depending
on the practice or practices that are the basis of the contract.
‘‘(c) STRUCTURAL PRACTICES.—
‘‘(1) OFFER SELECTION PROCESS.—The Secretary shall, to
the maximum extent practicable, establish a process for selecting applications for financial assistance if there are numerous
applications for assistance for structural practices that would
provide substantially the same level of environmental benefits.
The process shall be based on—
‘‘(A) a reasonable estimate of the projected cost of
the proposals and other factors identified by the Secretary

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 999

for determining which applications will result in the least
cost to the program authorized by this chapter; and
‘‘(B) the priorities established under this subtitle and
such other factors determined by the Secretary that maximize environmental benefits per dollar expended.
‘‘(2) CONCURRENCE OF OWNER.—If the producer making
an offer to implement a structural practice is a tenant of
the land involved in agricultural production, for the offer to
be acceptable, the producer shall obtain the concurrence of
the owner of the land with respect to the offer.
‘‘(d) LAND MANAGEMENT PRACTICES.—The Secretary shall establish an application and evaluation process for awarding technical
assistance or incentive payments, or both, to a producer in exchange
for the performance of 1 or more land management practices by
the producer.
‘‘(e) COST-SHARE PAYMENTS, INCENTIVE PAYMENTS, AND TECHNICAL ASSISTANCE.—
‘‘(1) COST-SHARE PAYMENTS.—
‘‘(A) IN GENERAL.—The Federal share of cost-share payments to a producer proposing to implement 1 or more
structural practices shall be not more than 75 percent
of the projected cost of the practice, as determined by
the Secretary, taking into consideration any payment
received by the producer from a State or local government.
‘‘(B) LIMITATION.—A producer who owns or operates
a large confined livestock operation (as defined by the
Secretary) shall not be eligible for cost-share payments
to construct an animal waste management facility.
‘‘(C) OTHER PAYMENTS.—A producer shall not be
eligible for cost-share payments for structural practices
on eligible land under this chapter if the producer receives
cost-share payments or other benefits for the same land
under chapter 1 or 3.
‘‘(2) INCENTIVE PAYMENTS.—The Secretary shall make
incentive payments in an amount and at a rate determined
by the Secretary to be necessary to encourage a producer to
perform 1 or more land management practices.
‘‘(3) TECHNICAL ASSISTANCE.—
‘‘(A) FUNDING.—The Secretary shall allocate funding
under this chapter for the provision of technical assistance
according to the purpose and projected cost for which the
technical assistance is provided for a fiscal year. The allocated amount may vary according to the type of expertise
required, quantity of time involved, and other factors as
determined appropriate by the Secretary. Funding shall
not exceed the projected cost to the Secretary of the technical assistance provided for a fiscal year.
‘‘(B) OTHER AUTHORITIES.—The receipt of technical
assistance under this chapter shall not affect the eligibility
of the producer to receive technical assistance under other
authorities of law available to the Secretary.
‘‘(C) PRIVATE SOURCES.—The Secretary shall ensure
that the processes of writing and developing proposals and
plans for contracts under this chapter, and of assisting
in the implementation of structural practices and land
management practices covered by the contracts, are open
to individuals in agribusiness, including agricultural

110 STAT. 1000

PUBLIC LAW 104–127—APR. 4, 1996

producers, representatives from agricultural cooperatives,
agricultural input retail dealers, and certified crop advisers.
The requirements of this subparagraph shall also apply
to any other conservation program of the Department of
Agriculture that provides incentive payments, technical
assistance, or cost-share payments.
‘‘(f) MODIFICATION OR TERMINATION OF CONTRACTS.—
‘‘(1) VOLUNTARY MODIFICATION OR TERMINATION.—The Secretary may modify or terminate a contract entered into with
a producer under this chapter if—
‘‘(A) the producer agrees to the modification or termination; and
‘‘(B) the Secretary determines that the modification
or termination is in the public interest.
‘‘(2) INVOLUNTARY TERMINATION.—The Secretary may
terminate a contract under this chapter if the Secretary determines that the producer violated the contract.
‘‘(g) NON-FEDERAL ASSISTANCE.—The Secretary may request
the services of a State water quality agency, State fish and wildlife
agency, State forestry agency, or any other governmental or private
resource considered appropriate to assist in providing the technical
assistance necessary for the development and implementation of
a structural practice or land management practice.
16 USC
3839aa–3.

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

16 USC
3839aa–4.

‘‘SEC. 1240D. DUTIES OF PRODUCERS.

‘‘In providing technical assistance, cost-share payments, and
incentive payments to producers, the Secretary shall accord a higher
priority to assistance and payments that—
‘‘(1) are provided in conservation priority areas established
under section 1230(c);
‘‘(2) maximize environmental benefits per dollar expended;
or
‘‘(3) are provided in watersheds, regions, or conservation
priority areas in which State or local governments have provided, or will provide, financial or technical assistance to
producers for the same conservation or environmental purposes.
‘‘To receive technical assistance, cost-share payments, or incentive payments under this chapter, a producer shall agree—
‘‘(1) to implement an environmental quality incentives program plan that describes conservation and environmental goals
to be achieved through a structural practice or land management practice, or both, that is approved by the Secretary;
‘‘(2) not to conduct any practices on the farm or ranch
that would tend to defeat the purposes of this chapter;
‘‘(3) on the violation of a term or condition of the contract
at any time the producer has control of the land, to refund
any cost-share or incentive payment received with interest,
and forfeit any future payments under this chapter, as determined by the Secretary;
‘‘(4) on the transfer of the right and interest of the producer
in land subject to the contract, unless the transferee of the
right and interest agrees with the Secretary to assume all
obligations of the contract, to refund all cost-share payments
and incentive payments received under this chapter, as determined by the Secretary;

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110 STAT. 1001

‘‘(5) to supply information as required by the Secretary
to determine compliance with the environmental quality incentives program plan and requirements of the program; and
‘‘(6) to comply with such additional provisions as the Secretary determines are necessary to carry out the environmental
quality incentives program plan.
‘‘SEC. 1240E. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM PLAN.

‘‘(a) IN GENERAL.—To be eligible to enter into a contract under
the environmental quality incentives program, an owner or producer
of a livestock or agricultural operation must submit to the Secretary
for approval a plan of operations that incorporates such conservation
practices, and is based on such principles, as the Secretary considers
necessary to carry out the program, including a description of
structural practices and land management practices to be implemented and the objectives to be met by the plan’s implementation.
‘‘(b) AVOIDANCE OF DUPLICATION.—The Secretary shall, to the
maximum extent practicable, eliminate duplication of planning
activities under the environmental quality incentives program and
comparable conservation programs.
‘‘SEC. 1240F. DUTIES OF THE SECRETARY.

‘‘To the extent appropriate, the Secretary shall assist a producer
in achieving the conservation and environmental goals of an
environmental quality incentives program plan by—
‘‘(1) providing an eligibility assessment of the farming or
ranching operation of the producer as a basis for developing
the plan;
‘‘(2) providing technical assistance in developing and
implementing the plan;
‘‘(3) providing technical assistance, cost-share payments,
or incentive payments for developing and implementing 1 or
more structural practices or 1 or more land management practices, as appropriate;
‘‘(4) providing the producer with information, education,
and training to aid in implementation of the plan; and
‘‘(5) encouraging the producer to obtain technical assistance, cost-share payments, or grants from other Federal, State,
local, or private sources.
‘‘SEC. 1240G. LIMITATION ON PAYMENTS.

‘‘(a) IN GENERAL.—The total amount of cost-share and incentive
payments paid to a producer under this chapter may not exceed—
‘‘(1) $10,000 for any fiscal year; or
‘‘(2) $50,000 for any multiyear contract.
‘‘(b) EXCEPTION TO ANNUAL LIMIT.—The Secretary may exceed
the limitation on the annual amount of a payment under subsection
(a)(1) on a case-by-case basis if the Secretary determines that
a larger payment is—
‘‘(1) essential to accomplish the land management practice
or structural practice for which the payment is made; and
‘‘(2) consistent with the maximization of environmental
benefits per dollar expended and the purposes of this chapter
specified in section 1240.
‘‘(c) TIMING OF EXPENDITURES.—Expenditures under a contract
entered into under this chapter during a fiscal year may not be
made by the Secretary until the subsequent fiscal year.

16 USC
3839aa–5.

16 USC
3839aa–6.

16 USC
3839aa–7.

110 STAT. 1002
16 USC
3839aa–8.

Effective date.

PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 1240H. TEMPORARY ADMINISTRATION OF ENVIRONMENTAL
QUALITY INCENTIVES PROGRAM.

‘‘(a) INTERIM ADMINISTRATION.—
‘‘(1) IN GENERAL.—During the period beginning on the date
of enactment of this section and ending on the termination
date provided under paragraph (2), to ensure that technical
assistance, cost-share payments, and incentive payments continue to be administered in an orderly manner until such
time as assistance can be provided through final regulations
issued to implement the environmental quality incentives program established under this chapter, the Secretary shall continue to—
‘‘(A) provide technical assistance, cost-share payments,
and incentive payments under the terms and conditions
of the agricultural conservation program, the Great Plains
conservation program, the water quality incentives program, and the Colorado River Basin salinity control program, to the extent the terms and conditions of the program
are consistent with the environmental quality incentives
program; and
‘‘(B) use for those purposes—
‘‘(i) any funds remaining available for the agricultural conservation program, the Great Plains conservation program, the water quality incentives program,
and the Colorado River Basin salinity control program;
and
‘‘(ii) as the Secretary determines to be necessary,
any funds authorized to be used to carry out the
environmental quality incentives program.
‘‘(2) TERMINATION OF AUTHORITY.—The authority of the
Secretary to carry out paragraph (1) shall terminate on the
date that is 180 days after the date of enactment of this
section.
‘‘(b) PERMANENT ADMINISTRATION.—Effective beginning on the
termination date provided under subsection (a)(2), the Secretary
shall provide technical assistance, cost-share payments, and incentive payments for structural practices and land management practices related to crop and livestock production in accordance with
final regulations issued to carry out the environmental quality
incentives program.’’.
SEC. 335. CONSERVATION FARM OPTION.

Subtitle D of title XII of the Food Security Act of 1985 (16
U.S.C. 3830 et seq.) (as amended by section 334) is amended by
adding at the end the following:
‘‘CHAPTER 5—CONSERVATION FARM OPTION
16 USC 3839bb.

‘‘SEC. 1240M. CONSERVATION FARM OPTION.

‘‘(a) IN GENERAL.—The Secretary shall establish conservation
farm option pilot programs for producers of wheat, feed grains,
cotton, and rice.
‘‘(b) ELIGIBLE OWNERS AND PRODUCERS.—An owner or producer
with a farm that has contract acreage enrolled in the agricultural
market transition program established under the Agricultural Market Transition Act shall be eligible to participate in the conservation
farm option offered under a pilot program under subsection (a)

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1003

if the owner or producer meets the conditions established under
section (e).
‘‘(c) PURPOSES.—The purposes of the conservation farm option
pilot programs shall include—
‘‘(1) conservation of soil, water, and related resources;
‘‘(2) water quality protection or improvement;
‘‘(3) wetland restoration, protection, and creation;
‘‘(4) wildlife habitat development and protection; or
‘‘(5) other similar conservation purposes.
‘‘(d) CONSERVATION FARM PLAN.—
‘‘(1) IN GENERAL.—To be eligible to enter into a conservation
farm option contract, an owner or producer must prepare and
submit to the Secretary, for approval, a conservation farm
plan that shall become a part of the conservation farm option
contract.
‘‘(2) REQUIREMENTS.—A conservation farm plan shall—
‘‘(A) describe the resource-conserving crop rotations,
and all other conservation practices, to be implemented
and maintained on the acreage that is subject to contract
during the contract period;
‘‘(B) contain a schedule for the implementation and
maintenance of the practices described in the conservation
farm plan;
‘‘(C) comply with highly erodible land and wetland
conservation requirements of this title; and
‘‘(D) contain such other terms as the Secretary may
require.
‘‘(e) CONTRACTS.—
‘‘(1) IN GENERAL.—On approval of a conservation farm plan,
the Secretary may enter into a contract with the owner or
producer that specifies the acres being enrolled and the practices being adopted.
‘‘(2) DURATION OF CONTRACT.—The contract shall be for
a period of 10 years. The contract may be renewed for a period
of not to exceed 5 years on mutual agreement of the Secretary
and the owner or producer.
‘‘(3) CONSIDERATION.—In exchange for payments under this
subsection, the owner or producer shall not participate in and
shall forgo payments under—
‘‘(A) the conservation reserve program established
under subchapter B of chapter 1;
‘‘(B) the wetlands reserve program established under
subchapter C of chapter 1; and
‘‘(C) the environmental quality incentives program
established under chapter 4.
‘‘(4) OWNER OR PRODUCER RESPONSIBILITIES UNDER THE
AGREEMENT.—Under the terms of the contract entered into
under this section, an owner or producer shall agree to—
‘‘(A) actively comply with the terms and conditions
of the approved conservation farm plan;
‘‘(B) keep such records as the Secretary may reasonably
require for purposes of evaluation of the implementation
of the conservation farm plan; and
‘‘(C) not engage in any activity that would defeat the
purposes of the conservation farm option pilot program.
‘‘(5) PAYMENTS.—The Secretary shall offer an owner or
producer annual payments under the contract that are equiva-

Records.

110 STAT. 1004

PUBLIC LAW 104–127—APR. 4, 1996

lent to the payments the owner or producer would have received
under the conservation reserve program, the wetlands reserve
program, and the environmental quality incentives program.
‘‘(6) BALANCE OF BENEFITS.—The Secretary shall not permit
an owner or producer to terminate a conservation reserve program contract and enter a conservation farm option contract
if the Secretary determines that such action will reduce net
environmental benefits.
‘‘(f) SECRETARIAL DETERMINATIONS.—
‘‘(1) ACREAGE ESTIMATES.—Prior to each year during which
the Secretary intends to offer conservation reserve program
contracts, the Secretary shall estimate the number of acres
that—
‘‘(A) will be retired under the conservation farm option
under the terms and conditions the Secretary intends to
offer for that program; and
‘‘(B) would be retired under the conservation reserve
program if the conservation farm option were not available.
‘‘(2) TOTAL LAND RETIREMENT.—The Secretary shall
announce a number of acres to be enrolled in the conservation
reserve program that will result in a total number of acres
retired under the conservation reserve program and the conservation farm option that does not exceed the amount estimated under paragraph (1)(B) for the current or future years.
‘‘(3) LIMITATION.—The Secretary shall not enroll additional
conservation reserve program contracts to offset the land retired
under the conservation farm option.
‘‘(g) COMMODITY CREDIT CORPORATION.—The Secretary shall
use the funds, authorities, and facilities of the Commodity Credit
Corporation to carry out this subsection.
‘‘(h) FUNDING.—Of the funds of the Commodity Credit Corporation, the Corporation shall make available to carry out this section—
‘‘(1) $7,500,000 for fiscal year 1997;
‘‘(2) $15,000,000 for fiscal year 1998;
‘‘(3) $25,000,000 for fiscal year 1999;
‘‘(4) $37,500,000 for fiscal year 2000;
‘‘(5) $50,000,000 for fiscal year 2001; and
‘‘(6) $62,500,000 for fiscal year 2002.’’.
SEC. 336. REPEAL OF SUPERSEDED AUTHORITIES.

(a) AGRICULTURAL CONSERVATION PROGRAM.—
(1) ELIMINATION.—
(A) Section 8 of the Soil Conservation and Domestic
Allotment Act (16 U.S.C. 590h) is amended—
(i) in subsection (b)—
(I) by striking paragraphs (1) through (4) and
inserting the following:
‘‘(1) ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.—The
Secretary shall provide technical assistance, cost-share payments, and incentive payments to operators through the
environmental quality incentives program in accordance with
chapter 4 of subtitle D of title XII of the Food Security Act
of 1985.’’; and
(II) by striking paragraphs (6) through (8);
and
(ii) by striking subsections (d), (e), and (f).

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1005

(B) The first sentence of section 11 of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590k) is amended by striking ‘‘performance: Provided further,’’ and all
that follows through ‘‘or other law’’ and inserting ‘‘performance’’.
(C) Section 14 of the Soil Conservation and Domestic
Allotment Act (16 U.S.C. 590n) is amended—
(i) in the first sentence, by striking ‘‘or 8’’; and
(ii) by striking the second sentence.
(D) Section 15 of the Soil Conservation and Domestic
Allotment Act (16 U.S.C. 590o) is amended—
(i) in the first undesignated paragraph—
(I) in the first sentence, by striking ‘‘sections
7 and 8’’ and inserting ‘‘section 7’’; and
(II) by striking the third sentence; and
(ii) by striking the second undesignated paragraph.
(2) CONFORMING AMENDMENTS.—
(A) Paragraph (1) of the last proviso of the matter
under the heading ‘‘CONSERVATION RESERVE PROGRAM’’
under the heading ‘‘SOIL BANK PROGRAMS’’ of title I of
the Department of Agriculture and Farm Credit Administration Appropriation Act, 1959 (72 Stat. 195; 7 U.S.C.
1831a), is amended by striking ‘‘Agricultural Conservation
Program’’ and inserting ‘‘environmental quality incentives
program established under chapter 4 of subtitle D of title
XII of the Food Security Act of 1985’’.
(B) Section 4 of the Cooperative Forestry Assistance
Act of 1978 (16 U.S.C. 2103) is amended by striking ‘‘as
added by the Agriculture and Consumer Protection Act
of 1973’’ each place it appears in subsections (d) and (i)
and inserting ‘‘as in effect before the amendment made
by section 336(d)(1) of the Federal Agriculture Improvement and Reform Act of 1996’’.
(C) Section 226(b)(4) of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6932(b)(4)) is amended
by striking ‘‘and the agricultural conservation program
under the Soil Conservation and Domestic Allotment Act
(16 U.S.C. 590g et seq.)’’.
(D) Section 246(b)(8) of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6962(b)(8)) is amended
by striking ‘‘and the agricultural conservation program
under the Soil Conservation and Domestic Allotment Act
(16 U.S.C. 590g et seq.)’’.
(E) Section 1271(c)(3)(C) of the Food, Agriculture, Conservation, and Trade Act of 1990 (16 U.S.C. 2106a(c)(3)(C))
is amended by striking ‘‘Agricultural Conservation Program
established under section 16(b) of the Soil Conservation
and Domestic Allotment Act (16 U.S.C. 590h, 590l, or
590p)’’ and inserting ‘‘environmental quality incentives program established under chapter 4 of subtitle D of title
XII of the Food Security Act of 1985’’.
(F) Section 304(a) of the Lake Champlain Special Designation Act of 1990 (Public Law 101–596; 33 U.S.C. 1270
note) is amended—
(i) in the subsection heading, by striking ‘‘SPECIAL
PROJECT AREA UNDER THE AGRICULTURAL CONSERVATION PROGRAM’’ and inserting ‘‘PRIORITY AREA UNDER

110 STAT. 1006

PUBLIC LAW 104–127—APR. 4, 1996
THE

ENVIRONMENTAL QUALITY INCENTIVES PROGRAM’’;

and

16 USC 590h–4.

(ii) in paragraph (1), by striking ‘‘special project
area under the Agricultural Conservation Program
established under section 8(b) of the Soil Conservation
and Domestic Allotment Act (16 U.S.C. 590h(b))’’ and
inserting ‘‘priority area under the environmental quality incentives program established under chapter 4
of subtitle D of title XII of the Food Security Act
of 1985’’.
(G) Section 6 of the Department of Agriculture Organic
Act of 1956 (70 Stat. 1033) is amended by striking subsection (b).
(b) GREAT PLAINS CONSERVATION PROGRAM.—
(1) ELIMINATION.—Section 16 of the Soil Conservation and
Domestic Allotment Act (16 U.S.C. 590p) is repealed.
(2) CONFORMING AMENDMENTS.—
(A) The Agricultural Adjustment Act of 1938 is amended by striking ‘‘Great Plains program’’ each place it appears
in sections 344(f)(8) and 377 (7 U.S.C. 1344(f)(8) and 1377)
and inserting ‘‘environmental quality incentives program
established under chapter 4 of subtitle D of title XII of
the Food Security Act of 1985’’.
(B) Section 246(b) of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6962(b)) is amended
by striking paragraph (2).
(c) COLORADO RIVER BASIN SALINITY CONTROL PROGRAM.—
(1) IN GENERAL.—Section 202 of the Colorado River Basin
Salinity Control Act (43 U.S.C. 1592) is amended by striking
subsection (c) and inserting the following:
‘‘(c) SALINITY CONTROL MEASURES.—The Secretary of Agriculture shall carry out salinity control measures (including watershed enhancement and cost-share measures with livestock and crop
producers) in the Colorado River Basin as part of the environmental
quality incentives program established under chapter 4 of subtitle
D of title XII of the Food Security Act of 1985.’’.
(2) FUNDS.—Section 205 of the Colorado River Basin Salinity Control Act (43 U.S.C. 1595) is amended—
(A) in subsection (a), by striking ‘‘pursuant to section
202(c)(2)(C)’’; and
(B) by adding at the end the following:
‘‘(f) FUNDS.—The Secretary may expend funds available in the
Basin Funds referred to in this section to carry out cost-share
salinity measures in a manner that is consistent with the cost
allocations required under this section.’’.
(3) CONFORMING AMENDMENT.—Section 246(b)(6) of the
Department of Agriculture Reorganization Act of 1994 (7 U.S.C.
6962(b)(6)) is amended by striking ‘‘program’’ and inserting
‘‘measures’’.
(d) RURAL ENVIRONMENTAL CONSERVATION PROGRAM.—
(1) ELIMINATION.—Title X of the Agricultural Act of 1970
(16 U.S.C. 1501 et seq.) is repealed.
(2) CONFORMING AMENDMENTS.—Section 246 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6962)
(as amended by subsection (b)(2)(B)) is amended—
(A) in subsection (b)—
(i) by striking paragraph (1); and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1007

(ii) by redesignating paragraphs (3) through (8)
as paragraphs (1) through (6), respectively; and
(B) in subsection (c), by striking ‘‘(2), (3), (4), and
(6)’’ and inserting ‘‘(1), (2), and (4)’’.
(e) OTHER CONSERVATION PROVISIONS.—Subtitle F of title XII
of the Food Security Act of 1985 (16 U.S.C. 2005a and 2101 note)
is repealed.
(f) RESOURCE CONSERVATION.—
(1) ELIMINATION.—Subtitles A, B, D, E, and F of title
XV of the Agriculture and Food Act of 1981 (95 Stat. 1328;
16 U.S.C. 3401 et seq.) are repealed.
(2) CONFORMING AMENDMENT.—Section 739 of the Agriculture, Rural Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 1992 (7 U.S.C.
2272a), is repealed.
(g) TECHNICAL AMENDMENT.—The first sentence of the matter
under the heading ‘‘COMMODITY CREDIT CORPORATION’’ of Public
Law 99–263 (100 Stat. 59; 16 U.S.C. 3841 note) is amended by
striking ‘‘prices: Provided further,’’ and all that follows through
‘‘Acts.’’ and inserting ‘‘prices.’’.
(h) AGRICULTURAL WATER QUALITY INCENTIVES PROGRAM.—
Chapter 2 of subtitle D of title XII of the Food Security Act of
1985 (16 U.S.C. 3838 et seq.) is repealed.

Subtitle E—Conservation Funding and
Administration
SEC. 341. CONSERVATION FUNDING AND ADMINISTRATION.

Subtitle E of title XII of the Food Security Act of 1985 (16
U.S.C. 3841 et seq.) is amended to read as follows:

‘‘Subtitle E—Funding and Administration
‘‘SEC. 1241. FUNDING.

‘‘(a) MANDATORY EXPENSES.—For each of fiscal years 1996
through 2002, the Secretary shall use the funds of the Commodity
Credit Corporation to carry out the programs authorized by—
‘‘(1) subchapter B of chapter 1 of subtitle D (including
contracts extended by the Secretary pursuant to section 1437
of the Food, Agriculture, Conservation, and Trade Act of 1990
(Public Law 101–624; 16 U.S.C. 3831 note));
‘‘(2) subchapter C of chapter 1 of subtitle D; and
‘‘(3) chapter 4 of subtitle D.
‘‘(b) ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.—
‘‘(1) IN GENERAL.—Of the funds of the Commodity Credit
Corporation, the Secretary shall make available $130,000,000
for fiscal year 1996, and $200,000,000 for each of fiscal years
1997 through 2002, for providing technical assistance, costshare payments, incentive payments, and education under the
environmental quality incentives program under chapter 4 of
subtitle D.
‘‘(2) LIVESTOCK PRODUCTION.—For each of fiscal years 1996
through 2002, 50 percent of the funding available for technical
assistance, cost-share payments, incentive payments, and edu-

16 USC 3841.

110 STAT. 1008

PUBLIC LAW 104–127—APR. 4, 1996
cation under the environmental quality incentives program
shall be targeted at practices relating to livestock production.

16 USC 3842.

‘‘SEC. 1242. USE OF OTHER AGENCIES.

‘‘(a) COMMITTEES.—In carrying out subtitles B, C, and D, the
Secretary shall use the services of local, county, and State committees established under section 8(b) of the Soil Conservation and
Domestic Allotment Act (16 U.S.C. 590h(b)).
‘‘(b) OTHER AGENCIES.—
‘‘(1) USE.—In carrying out subtitles C and D, the Secretary
may utilize the services of the Natural Resources Conservation
Service and the Forest Service, the Fish and Wildlife Service,
State forestry agencies, State fish and game agencies, landgrant colleges, local, county, and State committees established
under section 8(b) of the Soil Conservation and Domestic Allotment Act (16 U.S.C. 590h), soil and water conservation districts,
and other appropriate agencies.
‘‘(2) CONSULTATION.—In carrying out subtitle D at the State
and county levels, the Secretary shall consult with, to the
extent practicable, the Fish and Wildlife Service, State forestry
agencies, State fish and game agencies, land-grant colleges,
soil-conservation districts, and other appropriate agencies.
16 USC 3843.

‘‘SEC. 1243. ADMINISTRATION.

‘‘(a) PLANS.—The Secretary shall, to the extent practicable,
avoid duplication in—
‘‘(1) the conservation plans required for—
‘‘(A) highly erodible land conservation under subtitle
B;
‘‘(B) the conservation reserve program established
under subchapter B of chapter 1 of subtitle D; and
‘‘(C) the wetlands reserve program established under
subchapter C of chapter 1 of subtitle D; and
‘‘(2) the environmental quality incentives program established under chapter 4 of subtitle D.
‘‘(b) ACREAGE LIMITATION.—
‘‘(1) IN GENERAL.—The Secretary shall not enroll more than
25 percent of the cropland in any county in the programs
administered under the conservation reserve and wetlands
reserve programs established under subchapters B and C,
respectively, of chapter 1 of subtitle D. Not more than 10
percent of the cropland in a county may be subject to an
easement acquired under the subchapters.
‘‘(2) EXCEPTION.—The Secretary may exceed the limitations
in paragraph (1) if the Secretary determines that—
‘‘(A) the action would not adversely affect the local
economy of a county; and
‘‘(B) operators in the county are having difficulties
complying with conservation plans implemented under section 1212.
‘‘(3) SHELTERBELTS AND WINDBREAKS.—The limitations
established under this subsection shall not apply to cropland
that is subject to an easement under chapter 1 or 3 of subtitle
D that is used for the establishment of shelterbelts and
windbreaks.
‘‘(c) TENANT PROTECTION.—Except for a person who is a tenant
on land that is subject to a conservation reserve contract that
has been extended by the Secretary, the Secretary shall provide

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1009

adequate safeguards to protect the interests of tenants and sharecroppers, including provision for sharing, on a fair and equitable
basis, in payments under the programs established under subtitles
B through D.
‘‘(d) PROVISION OF TECHNICAL ASSISTANCE BY OTHER
SOURCES.—In the preparation and application of a conservation
compliance plan under subtitle B or similar plan required as a
condition for assistance from the Department of Agriculture, the
Secretary shall permit persons to secure technical assistance from
approved sources, as determined by the Secretary, other than the
Natural Resources Conservation Service. If the Secretary rejects
a technical determination made by such a source, the basis of
the Secretary’s determination must be supported by documented
evidence.
‘‘(e) REGULATIONS.—Not later than 90 days after the date of
enactment of the Federal Agriculture Improvement and Reform
Act of 1996, the Secretary shall issue regulations to implement
the conservation reserve and wetlands reserve programs established
under chapter 1 of subtitle D.’’.
SEC. 342. STATE TECHNICAL COMMITTEES.

(a) COMPOSITION.—Section 1261(c) of the Food Security Act
of 1985 (16 U.S.C. 3861(c))—
(1) in paragraph (7), by striking ‘‘and’’ at the end;
(2) in paragraph (8), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(9) agricultural producers with demonstrable conservation
expertise;
‘‘(10) nonprofit organizations with demonstrable conservation expertise;
‘‘(11) persons knowledgeable about conservation techniques;
and
‘‘(12) agribusiness.’’.
(b) RESPONSIBILITIES.—Section 1262 of the Food Security Act
of 1985 (16 U.S.C. 3862) is amended—
(1) in subsection (a), by adding at the end the following:
‘‘Each State technical committee shall provide public notice
of, and permit public attendance at meetings considering, issues
of concern related to carrying out this title.’’;
(2) in subsection (b)(1), by adding at the end the following:
‘‘Each State technical committee shall establish criteria and
guidelines for evaluating petitions by agricultural producers
regarding new conservation practices and systems not already
described in field office technical guides.’’; and
(3) in subsection (c)—
(A) in paragraph (7), by striking ‘‘and’’ at the end;
(B) by redesignating paragraph (8) as paragraph (9);
and
(C) by inserting after paragraph (7) the following:
‘‘(8) establishing criteria and priorities for State initiatives
under the environmental quality incentives program under
chapter 4 of subtitle D; and’’.
SEC. 343. PUBLIC NOTICE AND COMMENT FOR REVISIONS TO CERTAIN
STATE TECHNICAL GUIDES.

After the date of enactment of this Act, the Secretary of Agriculture shall provide for public notice and comment under section

16 USC 3862
note.

110 STAT. 1010

PUBLIC LAW 104–127—APR. 4, 1996

553 of title 5, United States Code, with regard to any future
revisions to those provisions of the Natural Resources Conservation
Service State technical guides that are used to carry out subtitles
A, B, and C of title XII of the Food Security Act of 1985 (16
U.S.C. 3801 et seq.).
National Natural
Resources
Conservation
Foundation Act.

Subtitle F—National Natural Resources
Conservation Foundation

16 USC 5801
note.

SEC. 351. SHORT TITLE.

16 USC 5801.

SEC. 352. DEFINITIONS.

This subtitle may be cited as the ‘‘National Natural Resources
Conservation Foundation Act’’.
In this subtitle (unless the context otherwise requires):
(1) BOARD.—The term ‘‘Board’’ means the Board of Trustees
established under section 354.
(2) DEPARTMENT.—The term ‘‘Department’’ means the
Department of Agriculture.
(3) FOUNDATION.—The term ‘‘Foundation’’ means the
National Natural Resources Conservation Foundation established by section 353(a).
(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Agriculture.

16 USC 5802.

SEC. 353. NATIONAL NATURAL RESOURCES CONSERVATION FOUNDATION.

(a) ESTABLISHMENT.—A National Natural Resources Conservation Foundation is established as a charitable and nonprofit corporation for charitable, scientific, and educational purposes specified
in subsection (b). The Foundation is not an agency or instrumentality of the United States.
(b) DUTIES.—The Foundation shall—
(1) promote innovative solutions to the problems associated
with the conservation of natural resources on private lands,
particularly with respect to agriculture and soil and water
conservation;
(2) promote voluntary partnerships between government
and private interests in the conservation of natural resources;
(3) conduct research and undertake educational activities,
conduct and support demonstration projects, and make grants
to State and local agencies and nonprofit organizations;
(4) provide such other leadership and support as may be
necessary to address conservation challenges, such as the
prevention of excessive soil erosion, the enhancement of soil
and water quality, and the protection of wetlands, wildlife
habitat, and strategically important farmland subject to urban
conversion and fragmentation;
(5) encourage, accept, and administer private gifts of money
and real and personal property for the benefit of, or in connection with, the conservation and related activities and services
of the Department, particularly the Natural Resources Conservation Service;
(6) undertake, conduct, and encourage educational, technical, and other assistance, and other activities, that support
the conservation and related programs administered by the

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1011

Department (other than activities carried out on National Forest System lands), particularly the Natural Resources Conservation Service, except that the Foundation may not enforce
or administer a regulation of the Department; and
(7) raise private funds to promote the purposes of the
Foundation.
(c) LIMITATIONS AND CONFLICTS OF INTEREST.—
(1) POLITICAL ACTIVITIES.—The Foundation shall not
participate or intervene in a political campaign on behalf of
any candidate for public office.
(2) CONFLICTS OF INTEREST.—No director, officer, or
employee of the Foundation shall participate, directly or
indirectly, in the consideration or determination of any question
before the Foundation affecting—
(A) the financial interests of the director, officer, or
employee; or
(B) the interests of any corporation, partnership, entity,
organization, or other person in which the director, officer,
or employee—
(i) is an officer, director, or trustee; or
(ii) has any direct or indirect financial interest.
(3) LEGISLATION OR GOVERNMENT ACTION OR POLICY.—No
funds of the Foundation may be used in any manner for the
purpose of influencing legislation or government action or policy.
(4) LITIGATION.—No funds of the Foundation may be used
to bring or join an action against the United States.
SEC. 354. COMPOSITION AND OPERATION.

(a) COMPOSITION.—The Foundation shall be administered by
a Board of Trustees that shall consist of 9 voting members, each
of whom shall be a United States citizen and not a Federal officer.
The Board shall be composed of—
(1) individuals with expertise in agricultural conservation
policy matters;
(2) a representative of private sector organizations with
a demonstrable interest in natural resources conservation;
(3) a representative of statewide conservation organizations;
(4) a representative of soil and water conservation districts;
(5) a representative of organizations outside the Federal
Government that are dedicated to natural resources conservation education; and
(6) a farmer or rancher.
(b) NONGOVERNMENTAL EMPLOYEES.—Service as a member of
the Board shall not constitute employment by, or the holding of,
an office of the United States for the purposes of any Federal
law.
(c) MEMBERSHIP.—
(1) INITIAL MEMBERS.—The Secretary shall appoint 9 persons who meet the criteria established under subsection (a)
as the initial members of the Board and designate 1 of the
members as the initial chairperson for a 2-year term.
(2) TERMS OF OFFICE.—
(A) IN GENERAL.—A member of the Board shall serve
for a term of 3 years, except that the members appointed

16 USC 5803.

110 STAT. 1012

PUBLIC LAW 104–127—APR. 4, 1996

to the initial Board shall serve, proportionately, for terms
of 1, 2, and 3 years, as determined by the Secretary.
(B) LIMITATION ON TERMS.—No individual may serve
more than 2 consecutive 3-year terms as a member of
the Board.
(3) SUBSEQUENT MEMBERS.—The initial members of the
Board shall adopt procedures in the constitution of the Foundation for the nomination and selection of subsequent members
of the Board. The procedures shall require that each member,
at a minimum, meets the criteria established under subsection
(a) and shall provide for the selection of an individual, who
is not a Federal officer or a member of the Board.
(d) CHAIRPERSON.—After the appointment of an initial chairperson under subsection (c)(1), each succeeding chairperson of the
Board shall be elected by the members of the Board for a 2year term.
(e) VACANCIES.—A vacancy on the Board shall be filled by
the Board not later than 60 days after the occurrence of the vacancy.
(f) COMPENSATION.—A member of the Board shall receive no
compensation from the Foundation for the service of the member
on the Board.
(g) TRAVEL EXPENSES.—While away from the home or regular
place of business of a member of the Board in the performance
of services for the Board, the member shall be allowed travel
expenses paid by the Foundation, including per diem in lieu of
subsistence, at the same rate as a person employed intermittently
in the Government service is allowed under section 5703 of title
5, United States Code.
16 USC 5804.

SEC. 355. OFFICERS AND EMPLOYEES.

(a) IN GENERAL.—The Board may—
(1) appoint, hire, and discharge the officers and employees
of the Foundation, other than appoint the initial Executive
Director of the Foundation;
(2) adopt a constitution and bylaws for the Foundation
that are consistent with the purposes of this subtitle; and
(3) undertake any other activities that may be necessary
to carry out this subtitle.
(b) OFFICERS AND EMPLOYEES.—
(1) APPOINTMENT AND HIRING.—An officer or employee of
the Foundation—
(A) shall not, by virtue of the appointment or employment of the officer or employee, be considered a Federal
employee for any purpose, including the provisions of title
5, United States Code, governing appointments in the
competitive service, except that such an individual may
participate in the Federal employee retirement system as
if the individual were a Federal employee; and
(B) may not be paid by the Foundation a salary in
excess of $125,000 per year.
(2) EXECUTIVE DIRECTOR.—
(A) INITIAL DIRECTOR.—The Secretary shall appoint an
individual to serve as the initial Executive Director of
the Foundation who shall serve, at the direction of the
Board, as the chief operating officer of the Foundation.
(B) SUBSEQUENT DIRECTORS.—The Board shall appoint
each subsequent Executive Director of the Foundation who

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1013

shall serve, at the direction of the Board, as the chief
operating officer of the Foundation.
(C) QUALIFICATIONS.—The Executive Director shall be
knowledgeable and experienced in matters relating to natural resources conservation.
SEC. 356. CORPORATE POWERS AND OBLIGATIONS OF THE FOUNDATION.

(a) IN GENERAL.—The Foundation—
(1) may conduct business throughout the United States
and the territories and possessions of the United States; and
(2) shall at all times maintain a designated agent who
is authorized to accept service of process for the Foundation,
so that the serving of notice to, or service of process on, the
agent, or mailed to the business address of the agent, shall
be considered as service on or notice to the Foundation.
(b) SEAL.—The Foundation shall have an official seal selected
by the Board that shall be judicially noticed.
(c) POWERS.—To carry out the purposes of the Foundation under
section 353(b), the Foundation shall have, in addition to the powers
otherwise provided under this subtitle, the usual powers of a corporation, including the power—
(1) to accept, receive, solicit, hold, administer, and use
any gift, devise, or bequest, either absolutely or in trust, of
real or personal property or any income from, or other interest
in, the gift, devise, or bequest;
(2) to acquire by purchase or exchange any real or personal
property or interest in property, except that funds provided
under section 360 may not be used to purchase an interest
in real property;
(3) unless otherwise required by instrument of transfer,
to sell, donate, lease, invest, reinvest, retain, or otherwise dispose of any property or income from property;
(4) to borrow money from private sources and issue bonds,
debentures, or other debt instruments, subject to section 359,
except that the aggregate amount of the borrowing and debt
instruments outstanding at any time may not exceed
$1,000,000;
(5) to sue and be sued, and complain and defend itself,
in any court of competent jurisdiction, except that a member
of the Board shall not be personally liable for an action in
the performance of services for the Board, except for gross
negligence;
(6) to enter into a contract or other agreement with an
agency of State or local government, educational institution,
or other private organization or person and to make such payments as may be necessary to carry out the functions of the
Foundation; and
(7) to do any and all acts that are necessary to carry
out the purposes of the Foundation.
(d) INTERESTS IN PROPERTY.—
(1) INTERESTS IN REAL PROPERTY.—The Foundation may
acquire, hold, and dispose of lands, waters, or other interests
in real property by donation, gift, devise, purchase, or exchange.
An interest in real property shall be treated, among other
things, as including an easement or other right for the preservation, conservation, protection, or enhancement of agricultural,

16 USC 5805.

110 STAT. 1014

PUBLIC LAW 104–127—APR. 4, 1996
natural, scenic, historic, scientific, educational, inspirational,
or recreational resources.
(2) GIFTS.—A gift, devise, or bequest may be accepted by
the Foundation even though the gift, devise, or bequest is
encumbered, restricted, or subject to a beneficial interest of
a private person if any current or future interest in the gift,
devise, or bequest is for the benefit of the Foundation.

16 USC 5806.

SEC. 357. ADMINISTRATIVE SERVICES AND SUPPORT.

For each of fiscal years 1996 through 1998, the Secretary may
provide, without reimbursement, personnel, facilities, and other
administrative services of the Department to the Foundation.
16 USC 5807.

SEC. 358. AUDITS AND PETITION OF ATTORNEY GENERAL FOR EQUITABLE RELIEF.

(a) AUDITS.—
(1) IN GENERAL.—The accounts of the Foundation shall
be audited in accordance with Public Law 88–504 (36 U.S.C.
1101 et seq.), including an audit of lobbying and litigation
activities carried out by the Foundation.
(2) CONFORMING AMENDMENT.—The first section of Public
Law 88–504 (36 U.S.C. 1101) is amended by adding at the
end the following:
‘‘(77) The National Natural Resources Conservation
Foundation.’’.
(b) RELIEF WITH RESPECT TO CERTAIN FOUNDATION ACTS OR
FAILURE TO ACT.—The Attorney General may petition in the United
States District Court for the District of Columbia for such equitable
relief as may be necessary or appropriate, if the Foundation—
(1) engages in, or threatens to engage in, any act, practice,
or policy that is inconsistent with this subtitle; or
(2) refuses, fails, neglects, or threatens to refuse, fail, or
neglect, to discharge the obligations of the Foundation under
this subtitle.
16 USC 5808.

SEC. 359. RELEASE FROM LIABILITY.

(a) IN GENERAL.—The United States shall not be liable for
any debt, default, act, or omission of the Foundation. The full
faith and credit of the United States shall not extend to the Foundation.
(b) STATEMENT.—An obligation issued by the Foundation, and
a document offering an obligation, shall include a prominent statement that the obligation is not directly or indirectly guaranteed,
in whole or in part, by the United States (or an agency or instrumentality of the United States).
16 USC 5809.

SEC. 360. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Department
to be made available to the Foundation $1,000,000 for each of
fiscal years 1997 through 1999 to initially establish and carry
out activities of the Foundation.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1015

Subtitle G—Forestry
SEC. 371. OFFICE OF INTERNATIONAL FORESTRY.

Section 2405 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 6704) is amended by adding at the end
the following:
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated for each of fiscal years 1996 through 2002
such sums as are necessary to carry out this section.’’.
SEC. 372. COOPERATIVE WORK FOR PROTECTION, MANAGEMENT, AND
IMPROVEMENT OF NATIONAL FOREST SYSTEM.

The penultimate paragraph of the matter under the heading
‘‘FOREST SERVICE.’’ of the first section of the Act of June 30,
1914 (38 Stat. 430, chapter 131; 16 U.S.C. 498), is amended—
(1) by inserting ‘‘, management,’’ after ‘‘the protection’’;
(2) by striking ‘‘national forests,’’ and inserting ‘‘National
Forest System,’’;
(3) by inserting ‘‘management,’’ after ‘‘protection,’’ both
places it appears; and
(4) by adding at the end the following: ‘‘Payment for work
undertaken pursuant to this paragraph may be made from
any appropriation of the Forest Service that is available for
similar work if a written agreement so provides and reimbursement will be provided by a cooperator in the same fiscal year
as the expenditure by the Forest Service. A reimbursement
received from a cooperator that covers the proportionate share
of the cooperator of the cost of the work shall be deposited
to the credit of the appropriation of the Forest Service from
which the payment was initially made or, if the appropriation
is no longer available, to the credit of an appropriation of
the Forest Service that is available for similar work. The Secretary of Agriculture shall establish written rules that establish
criteria to be used to determine whether the acceptance of
contributions of money under this paragraph would adversely
affect the ability of an officer or employee of the Department
of Agriculture to carry out a duty or program of the officer
or employee in a fair and objective manner or would compromise, or appear to compromise, the integrity of the program,
officer, or employee. The Secretary of Agriculture shall establish
written rules that protect the interests of the Forest Service
in cooperative work agreements.’’.
SEC. 373. FORESTRY INCENTIVES PROGRAM.

Section 4 of the Cooperative Forestry Assistance Act of 1978
(16 U.S.C. 2103) is amended—
(1) in subsection (j), by striking ‘‘annually’’ and inserting
‘‘for each of fiscal years 1996 through 2002’’; and
(2) by striking subsection (k).
SEC. 374. OPTIONAL STATE GRANTS FOR FOREST LEGACY PROGRAM.

Section 7 of the Cooperative Forestry Assistance Act of 1978
(16 U.S.C. 2103c) is amended—
(1) by redesignating subsection (l) as subsection (m); and
(2) by inserting after subsection (k) the following:
‘‘(l) OPTIONAL STATE GRANTS.—

Rules.

Rules.

110 STAT. 1016

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(1) IN GENERAL.—The Secretary shall, at the request of
a participating State, provide a grant to the State to carry
out the Forest Legacy Program in the State.
‘‘(2) ADMINISTRATION.—If a State elects to receive a grant
under this subsection—
‘‘(A) the Secretary shall use a portion of the funds
made available under subsection (m), as determined by
the Secretary, to provide a grant to the State; and
‘‘(B) the State shall use the grant to carry out the
Forest Legacy Program in the State, including the acquisition by the State of lands and interests in lands.’’.

Subtitle H—Miscellaneous Conservation
Provisions
SEC. 381. CONSERVATION ACTIVITIES OF COMMODITY CREDIT CORPORATION.

15 USC 714c
note.

(a) IN GENERAL.—Section 5 of the Commodity Credit Corporation Charter Act (15 U.S.C. 714c) is amended—
(1) by redesignating subsection (g) as subsection (h); and
(2) by inserting after subsection (f) the following:
‘‘(g) Carry out conservation or environmental programs authorized by law.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall become effective on January 1, 1997.
SEC. 382. FLOODPLAIN EASEMENTS.

Section 403 of the Agricultural Credit Act of 1978 (16 U.S.C.
2203) is amended by inserting ‘‘, including the purchase of floodplain
easements,’’ after ‘‘emergency measures’’.
SEC. 383. RESOURCE CONSERVATION AND DEVELOPMENT PROGRAM.

Section 1538 of the Agriculture and Food Act of 1981 (16
U.S.C. 3461) is amended by striking ‘‘1991 through 1995’’ and
inserting ‘‘1996 through 2002’’.
SEC. 384. REPEAL OF REPORT REQUIREMENT.

Section 1342 of title 44, United States Code, is repealed.
7 USC 7334.

SEC. 385. FLOOD RISK REDUCTION.

(a) IN GENERAL.—During fiscal years 1996 through 2002, the
Secretary of Agriculture (referred to in this section as the ‘‘Secretary’’) may enter into a contract with a producer on a farm
who has contract acreage under the Agricultural Market Transition
Act that is frequently flooded.
(b) DUTIES OF PRODUCERS.—Under the terms of the contract,
with respect to acres that are subject to the contract, the producer
must agree to—
(1) the termination of any contract acreage and production
flexibility contract under the Agricultural Market Transition
Act;
(2) forgo loans for contract commodities, oilseeds, and extra
long staple cotton;
(3) not apply for crop insurance issued or reinsured by
the Secretary;
(4) comply with applicable highly erodible land and wetlands conservation compliance requirements established under

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1017

title XII of the Food Security Act of 1985 (16 U.S.C. 3801
et seq.);
(5) not apply for any conservation program payments from
the Secretary;
(6) not apply for disaster program benefits provided by
the Secretary; and
(7) refund the payments, with interest, issued under the
flood risk reduction contract to the Secretary, if the producer
violates the terms of the contract or if the producer transfers
the property to another person who violates the contract.
(c) DUTIES OF THE SECRETARY.—In return for a contract entered
into by a producer under this section, the Secretary shall pay
the producer an amount that is not more than 95 percent of projected contract payments under the Agricultural Market Transition
Act that the Secretary estimates the producer would otherwise
have received during the period beginning at the time the contract
is entered into under this section and ending September 30, 2002.
(d) COMMODITY CREDIT CORPORATION.—The Secretary shall
carry out the program authorized by this section (other than subsection (e)) through the Commodity Credit Corporation.
(e) ADDITIONAL PAYMENTS.—
(1) IN GENERAL.—Subject to the availability of advanced
appropriations, the Secretary may make payments to a producer
described in subsection (a), in addition to the payments provided
under subsection (c), to offset other estimated Federal Government outlays on frequently flooded land.
(2) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated such sums as are necessary to carry
out paragraph (1).
(f) LIMITATION ON PAYMENTS.—Amounts made available for
production flexibility contracts under section 113 shall be reduced
by an amount that is equal to the contract payments that producers
forgo under subsection (b)(1) of this section.
SEC. 386. CONSERVATION OF PRIVATE GRAZING LAND.

(a) FINDINGS.—Congress finds that—
(1) private grazing land constitutes nearly 1⁄2 of the nonFederal land of the United States and is basic to the environmental, social, and economic stability of rural communities;
(2) private grazing land contains a complex set of interactions among soil, water, air, plants, and animals;
(3) grazing land constitutes the single largest watershed
cover type in the United States and contributes significantly
to the quality and quantity of water available for all of the
many uses of the land;
(4) private grazing land constitutes the most extensive
wildlife habitat in the United States;
(5) private grazing land can provide opportunities for
improved nutrient management from land application of animal
manures and other by-product nutrient resources;
(6) owners and managers of private grazing land need
to continue to recognize conservation problems when the problems arise and receive sound technical assistance to improve
or conserve grazing land resources to meet ecological and economic demands;
(7) new science and technology must continually be made
available in a practical manner so owners and managers of

16 USC 2005b.

110 STAT. 1018

PUBLIC LAW 104–127—APR. 4, 1996

private grazing land may make informed decisions concerning
vital grazing land resources;
(8) agencies of the Department with private grazing land
responsibilities are the agencies that have the expertise and
experience to provide technical assistance, education, and
research to owners and managers of private grazing land for
the long-term productivity and ecological health of grazing land;
(9) although competing demands on private grazing land
resources are greater than ever before, assistance to private
owners and managers of private grazing land is currently limited and does not meet the demand and basic need for adequately sustaining or enhancing the private grazing land
resources; and
(10) private grazing land can be enhanced to provide many
benefits to all citizens of the United States through voluntary
cooperation among owners and managers of the land, local
conservation districts, and the agencies of the Department
responsible for providing assistance to owners and managers
of land and to conservation districts.
(b) PURPOSE.—It is the purpose of this section to authorize
the Secretary to provide a coordinated technical, educational, and
related assistance program to conserve and enhance private grazing
land resources and provide related benefits to all citizens of the
United States by—
(1) establishing a coordinated and cooperative Federal,
State, and local grazing conservation program for management
of private grazing land;
(2) strengthening technical, educational, and related assistance programs that provide assistance to owners and managers
of private grazing land;
(3) conserving and improving wildlife habitat on private
grazing land;
(4) conserving and improving fish habitat and aquatic systems through grazing land conservation treatment;
(5) protecting and improving water quality;
(6) improving the dependability and consistency of water
supplies;
(7) identifying and managing weed, noxious weed, and
brush encroachment problems on private grazing land; and
(8) integrating conservation planning and management
decisions by owners and managers of private grazing land,
on a voluntary basis.
(c) DEFINITIONS.—In this section:
(1) DEPARTMENT.—The term ‘‘Department’’ means the
Department of Agriculture.
(2) PRIVATE GRAZING LAND.—The term ‘‘private grazing
land’’ means private, State-owned, tribally-owned, and any
other non-federally owned rangeland, pastureland, grazed forest
land, and hay land.
(3) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Agriculture.
(d) PRIVATE GRAZING LAND CONSERVATION ASSISTANCE.—
(1) ASSISTANCE TO GRAZING LANDOWNERS AND OTHERS.—
Subject to the availability of appropriations for this section,
the Secretary shall establish a voluntary program to provide
technical, educational, and related assistance to owners and
managers of private grazing land and public agencies, through

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1019

local conservation districts, to enable the landowners, managers, and public agencies to voluntarily carry out activities
that are consistent with this section, including—
(A) maintaining and improving private grazing land
and the multiple values and uses that depend on private
grazing land;
(B) implementing grazing land management technologies;
(C) managing resources on private grazing land, including—
(i) planning, managing, and treating private grazing land resources;
(ii) ensuring the long-term sustainability of private
grazing land resources;
(iii) harvesting, processing, and marketing private
grazing land resources; and
(iv) identifying and managing weed, noxious weed,
and brush encroachment problems;
(D) protecting and improving the quality and quantity
of water yields from private grazing land;
(E) maintaining and improving wildlife and fish habitat
on private grazing land;
(F) enhancing recreational opportunities on private
grazing land;
(G) maintaining and improving the aesthetic character
of private grazing lands; and
(H) identifying the opportunities and encouraging the
diversification of private grazing land enterprises.
(2) PROGRAM ELEMENTS.—
(A) FUNDING.—If funding is provided to carry out this
section, it shall be provided through a specific line-item
in the annual appropriations for the Natural Resources
Conservation Service.
(B) TECHNICAL ASSISTANCE AND EDUCATION.—Personnel of the Department trained in pasture and range
management shall be made available under the program
to deliver and coordinate technical assistance and education
to owners and managers of private grazing land, at the
request of the owners and managers.
(e) GRAZING TECHNICAL ASSISTANCE SELF-HELP.—
(1) FINDINGS.—Congress finds that—
(A) there is a severe lack of technical assistance for
farmers and ranchers who graze livestock;
(B) Federal budgetary constraints preclude any significant expansion, and may force a reduction of, current levels
of technical support; and
(C) farmers and ranchers have a history of cooperatively working together to address common needs in the
promotion of their products and in the drainage of wet
areas through drainage districts.
(2) ESTABLISHMENT OF GRAZING DEMONSTRATION.—In
accordance with paragraph (3), the Secretary may establish
2 grazing management demonstration districts at the recommendation of the grazing lands conservation initiative steering committee.
(3) PROCEDURE.—

110 STAT. 1020

PUBLIC LAW 104–127—APR. 4, 1996

(A) PROPOSAL.—Within a reasonable time after the
submission of a request of an organization of farmers or
ranchers engaged in grazing, the Secretary shall propose
that a grazing management district be established.
(B) FUNDING.—The terms and conditions of the funding
and operation of the grazing management district shall
be proposed by the producers.
(C) APPROVAL.—The Secretary shall approve the proposal if the Secretary determines that the proposal—
(i) is reasonable;
(ii) will promote sound grazing practices; and
(iii) contains provisions similar to the provisions
contained in the beef promotion and research order
issued under section 4 of the Beef Research and
Information Act (7 U.S.C. 2903) in effect on the date
of enactment of this Act.
(D) AREA INCLUDED.—The area proposed to be included
in a grazing management district shall be determined by
the Secretary on the basis of a petition by farmers or
ranchers.
(E) AUTHORIZATION.—The Secretary may use authority
under the Agricultural Adjustment Act (7 U.S.C. 601 et
seq.), reenacted with amendments by the Agricultural
Marketing Agreement Act of 1937, to operate, on a demonstration basis, a grazing management district.
(F) ACTIVITIES.—The activities of a grazing management district shall be scientifically sound activities, as
determined by the Secretary in consultation with a technical advisory committee composed of ranchers, farmers,
and technical experts.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section—
(1) $20,000,000 for fiscal year 1996;
(2) $40,000,000 for fiscal year 1997; and
(3) $60,000,000 for fiscal year 1998 and each subsequent
fiscal year.
Establishment.
16 USC 3836a.

SEC. 387. WILDLIFE HABITAT INCENTIVES PROGRAM.

Establishment.
16 USC 3830
note.

SEC. 388. FARMLAND PROTECTION PROGRAM.

(a) IN GENERAL.—The Secretary of Agriculture, in consultation
with the State technical committees established under section 1261
of the Food Security Act of 1985 (16 U.S.C. 3861), shall establish
a program under the Natural Resources Conservation Service to
be known as the ‘‘Wildlife Habitat Incentive Program’’.
(b) COST-SHARE PAYMENTS.—Under the program, the Secretary
shall make cost-share payments to landowners to develop upland
wildlife, wetland wildlife, threatened and endangered species, fish,
and other types of wildlife habitat approved by the Secretary.
(c) FUNDING.—To carry out this section, a total of $50,000,000
shall be made available for fiscal years 1996 through 2002 from
funds made available to carry out subchapter B of chapter 1 of
subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C.
3831 et seq.).
(a) IN GENERAL.—The Secretary of Agriculture shall establish
and carry out a farmland protection program under which the
Secretary shall purchase conservation easements or other interests
in not less than 170,000, nor more than 340,000, acres of land

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1021

with prime, unique, or other productive soil that is subject to
a pending offer from a State or local government for the purpose
of protecting topsoil by limiting nonagricultural uses of the land.
(b) CONSERVATION PLAN.—Any highly erodible cropland for
which a conservation easement or other interest is purchased under
this section shall be subject to the requirements of a conservation
plan that requires, at the option of the Secretary, the conversion
of the cropland to less intensive uses.
(c) FUNDING.—The Secretary shall use not more than
$35,000,000 of the funds of the Commodity Credit Corporation
to carry out this section.
SEC. 389. INTERIM MORATORIUM ON BYPASS FLOWS.

(a) MORATORIUM.—There shall be an 18-month moratorium
on any Forest Service decision to require bypass flows or any
other relinquishment of the unimpaired use of a decreed water
right as a condition of renewal or reissuance of a land use authorization permit.
(b) LIMITATIONS.—Subsection (a) shall not affect—
(1) obligations or authority of the Secretary of Agriculture
to protect public health and safety; and
(2) obligations or authority under the Endangered Species
Act of 1973 (16 U.S.C. 1531 et seq.), or applicable State law.
(c) RULES OF CONSTRUCTION.—
(1) EXISTING NON-FEDERAL WATER RIGHTS.—Nothing in this
section prevents or inhibits the exercise of the use and operation
of existing non-Federal water rights on or above the National
Forest land that require land use authorization permits from
the Forest Service to access water supply facilities.
(2) RENEWAL OR REISSUANCE OF EXPIRING LAND USE
AUTHORIZATION FOR DECREED WATER RIGHTS.—Nothing in this
section prevents or inhibits the renewal or reissuance of expiring land use authorizations for decreed water rights. The Forest
Service may extend, as needed, any expiring land use authorization for such time as is necessary to incorporate the results
of the study authorized by subsection (d).
(d) STUDY OF WATER RIGHTS ACROSS FEDERAL LANDS.—
(1) ESTABLISHMENT.—Not later than 60 days after the date
of enactment of this Act, there shall be established a Water
Rights Task Force to study the subjects described in paragraph
(3).
(2) MEMBERSHIP.—The Task Force shall be composed of
7 members appointed as follows:
(A) 1 member shall be appointed by the Secretary
of Agriculture.
(B) 2 members shall be appointed by the Speaker of
the House of Representatives and 1 member shall be
appointed by the Minority Leader of the House of Representatives.
(C) 2 members shall be appointed by the Majority
Leader of the Senate and 1 member shall be appointed
by the Minority Leader of the Senate.
(3) SUBJECTS TO BE STUDIED.—The Task Force shall study
and make recommendations on—
(A) whether Federal water rights should be acquired
for environmental protection on National Forest land;

National Forest
Service.
Water.
16 USC 526 note.

110 STAT. 1022

PUBLIC LAW 104–127—APR. 4, 1996
(B) measures necessary to protect the free exercise
of non-Federal water rights requiring easements and permits from the Forest Service;
(C) the protection of minimum instream flows for
environmental and watershed management purposes on
National Forest land through purchases or exchanges from
willing sellers in accordance with State law;
(D) the effects of any of the recommendations made
under this paragraph on existing State laws, regulations,
and customs of water usage; and
(E) measures that would be useful in avoiding or resolving conflicts between the Forest Service’s responsibilities
for natural resource and environmental protection, the public interest, and the property rights and interests of water
holders with special use permits for water facilities, including the study of the Federal acquisition of water rights,
dispute resolution, mitigation, and compensation.
(4) FINAL REPORT.—As soon as practicable, but not later
than 1 year, after the date of enactment of this Act, the Task
Force shall provide the final report of the Task Force to—
(A) the Secretary of Agriculture;
(B) the Speaker of the House of Representatives;
(C) the President pro tempore of the Senate;
(D) the Chairman of the Committee on Agriculture
of the House of Representatives;
(E) the Chairman of the Committee on Agriculture,
Nutrition, and Forestry of the Senate;
(F) the Chairman of the Committee on Resources of
the House of Representatives; and
(G) the Chairman of the Committee on Energy and
Natural Resources of the Senate.
(5) AUTHORIZATION OF FUNDS.—The Secretary of Agriculture shall use funds made available for salaries and administrative expenses of the Department of Agriculture to carry
out this subsection.

Florida.

SEC. 390. EVERGLADES ECOSYSTEM RESTORATION.

(a) IN GENERAL.—On July 1, 1996, out of any funds in the
Treasury not otherwise appropriated, the Secretary of the Treasury
shall provide $200,000,000 to the Secretary of the Interior to carry
out this section.
(b) ENTITLEMENT.—The Secretary of the Interior (referred to
in this section as the ‘‘Secretary’’)—
(1) shall be entitled to receive the funds made available
under subsection (a);
(2) shall accept the funds; and
(3) shall use the funds to—
(A) conduct restoration activities in the Everglades
ecosystem in South Florida, which shall include the acquisition of real property and interests in real property located
within the Everglades ecosystem; and
(B) fund resource protection and resource maintenance
activities in the Everglades ecosystem.
(c) SAVINGS PROVISION.—Nothing in this subsection precludes
the Secretary from transferring funds to the Army Corps of Engineers, the State of Florida, or the South Florida Water Management
District to carry out subsection (b)(3).

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1023

(d) DEADLINE.—The Secretary shall use the funds made available under subsection (a) for restoration activities referred to in
subsection (b)(3) not later than December 31, 1999.
(e) REPORT TO CONGRESS.—For each of calendar years 1996
through 1999, the Secretary shall submit an annual report to Congress describing all activities carried out under subsection (b)(3).
(f) SEPARATE AND ADDITIONAL EVERGLADES RESTORATION
ACCOUNT.—
(1) ESTABLISHMENT.—There is established in the Treasury
a special account (to be known as the ‘‘Everglades Restoration
Account’’), which shall consist of such funds as may be deposited
in the account under paragraph (2). The account shall be separate, and in addition to, funds deposited in the Treasury under
subsection (a).
(2) SOURCE OF FUNDS FOR ACCOUNT.—
(A) PROCEEDS FROM SURPLUS PROPERTY.—
(i) IN GENERAL.—Subject to subparagraph (B), the
Administrator shall deposit in the special account all
funds received by the Administrator, on or after the
date of enactment of this Act, from the disposal pursuant to the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) of surplus
real property located in the State of Florida.
(ii) AVAILABILITY AND DISPOSITION OF FEDERAL
LAND.—
(I) IDENTIFICATION.—Any Federal real property located in the State of Florida (excluding lands
under the administrative jurisdiction of the Secretary that are set aside for conservation purposes)
shall be identified for disposal or exchange under
this subsection and shall be presumed available
for purposes of this subsection unless the head
of the agency controlling the property determines
that there is a compelling program need for any
property identified by the Secretary.
(II) AVAILABILITY.—Property identified by the
Secretary for which there is no demonstrated
compelling program need shall, not later than 90
days after a request by the Secretary, be reported
to the Administrator and shall be made available
to the Administrator who shall consider the property to be surplus property for purposes of the
Federal Property and Administrative Services Act
of 1949 (40 U.S.C. 471 et seq.).
(III) PRIORITIZATION OF DISPOSITION.—The
Administrator may prioritize the disposition of
property made available under this subparagraph
to permit the property to be sold as quickly as
practicable in a manner that is consistent with
the best interests of the Federal Government.
(B) LIMIT ON TOTAL AMOUNT OF DEPOSITS.—The total
amount of funds deposited in the special account under
subparagraph (A) shall not exceed $100,000,000.
(C) EFFECT ON CLOSURE OF MILITARY INSTALLATIONS.—
Nothing in this section alters the disposition of any proceeds arising from the disposal of real property pursuant
to a base closure law.

110 STAT. 1024

PUBLIC LAW 104–127—APR. 4, 1996

(3) USE OF SPECIAL ACCOUNT.—Funds in the special account
shall be available to the Secretary until expended under this
paragraph. The Secretary shall use funds in the special account
to assist in the restoration of the Everglades ecosystem in
South Florida through—
(A) subject to paragraph (4), the acquisition of real
property and interests in real property located within the
Everglades ecosystem; and
(B) the funding of resource protection and resource
maintenance activities in the Everglades ecosystem.
(4) STATE CONTRIBUTION.—The Secretary may not expend
any funds from the special account to acquire a parcel of
real property, or an interest in a parcel of real property, under
paragraph (3)(A) unless the Secretary obtains, or has previously
obtained, a contribution from the State of Florida in an amount
equal to not less than 50 percent of the appraised value of
the parcel or interest to be acquired, as determined by the
Secretary.
(5) DEFINITIONS.—In this subsection:
(A) ADMINISTRATOR.—The term ‘‘Administrator’’ means
the Administrator of General Services.
(B) BASE CLOSURE LAW.—The term ‘‘base closure law’’
means each of the following:
(i) The Defense Base Closure and Realignment
Act of 1990 (part A of title XXIX of Public Law 101–
510; 10 U.S.C. 2687 note).
(ii) Title II of the Defense Authorization Amendments and Base Closure and Realignment Act (Public
Law 100–526; 10 U.S.C. 2687 note).
(iii) Section 2687 of title 10, United States Code.
(iv) Any other similar law enacted after the date
of enactment of this Act.
(C) EVERGLADES ECOSYSTEM.—The term ‘‘Everglades
ecosystem’’ means the Florida Everglades Restoration area
that extends from the Kissimmee River basin to Florida
Bay.
(D) EXCESS PROPERTY.—The term ‘‘excess property’’ has
the meaning provided in section 3 of the Federal Property
and Administrative Services Act of 1949 (40 U.S.C. 472).
(E) EXECUTIVE AGENCY.—The term ‘‘executive agency’’
has the meaning provided in section 3 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.
472).
(F) SPECIAL ACCOUNT.—The term ‘‘special account’’
means the Everglades Restoration Account established
under paragraph (1).
(G) SURPLUS PROPERTY.—The term ‘‘surplus property’’
has the meaning provided in section 3 of the Federal Property and Administrative Services Act of 1949 (40 U.S.C.
472).
(g) REPORT TO DETERMINE THE FEASIBILITY OF ADDITIONAL
LAND ACQUISITION AND RESTORATION ACTIVITIES.—
(1) IN GENERAL.—The Secretary shall conduct an investigation to determine what, if any, unreserved and unappropriated
Federal lands (or mineral interests in any such lands) under
the administrative jurisdiction of the Secretary are suitable

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1025

for disposal or exchange for the purpose of conducting restoration activities in the Everglades region.
(2) CONSERVATION LANDS.—No lands under the administrative jurisdiction of the Secretary that are set aside for conservation purposes shall be identified for disposal or exchange under
this subsection.
(3) FLORIDA.—In carrying out this subsection, the Secretary
shall, to the maximum extent practicable, determine which
lands and mineral interests located within the State of Florida
are suitable for disposal or exchange before making the determination for eligible lands or interests in other States.
(4) PUBLIC ACCESS.—In carrying out this subsection, the
Secretary shall consider that in disposing of lands, the Secretary shall retain such interest in the lands as may be necessary to ensure that the general public is not precluded from
reasonable access to the lands for purposes of fishing, hunting,
or other recreational uses.
(5) REPORT.—Not later than 1 year after the date of enactment of this Act, the Secretary shall submit a report to the
Committee on Resources of the House of Representatives and
the Committee on Energy and Natural Resources of the Senate
describing the results of the investigation conducted under
this subsection. The report shall describe the specific parcels
identified under this subsection, establish the priorities for
disposal or exchange among the parcels, and estimate the values of the parcels.
SEC. 391. AGRICULTURAL AIR QUALITY RESEARCH OVERSIGHT.

(a) FINDINGS.—Congress finds that—
(1) various studies have alleged that agriculture is a source
of PM-10 emissions;
(2) many of these studies have often been based on erroneous data;
(3) Federal research activities are currently being conducted by the Department of Agriculture to determine the
true extent to which agricultural activities contribute to air
pollution and to determine cost-effective ways in which the
agricultural industry can reduce any pollution that exists; and
(4) any Federal policy recommendations that may be issued
by any Federal agency to address air pollution problems related
to agriculture or any other industrial activity should be based
on sound scientific findings that are subject to adequate peer
review and should take into account economic feasibility.
(b) PURPOSE.—The purpose of this section is to encourage the
Secretary of Agriculture to continue to strengthen vital research
efforts related to agricultural air quality.
(c) OVERSIGHT COORDINATION.—
(1) INTERGOVERNMENTAL COOPERATION.—The Secretary
shall, to the maximum extent practicable with respect to the
Department of Agriculture and other Federal departments and
agencies, ensure intergovernmental cooperation in research
activities related to agricultural air quality and avoid duplication of the activities.
(2) CORRECT DATA.—The Secretary shall, to the maximum
extent practicable, ensure that the results of any research
related to agricultural air quality conducted by Federal agencies

7 USC 5405.

110 STAT. 1026

PUBLIC LAW 104–127—APR. 4, 1996
not report erroneous data with respect to agricultural air quality.
(d) TASK FORCE.—
(1) ESTABLISHMENT.—The Chief of the National Resources
Conservation Service shall establish a task force to address
agricultural air quality issues.
(2) COMPOSITION.—The task force shall be comprised of
employees of the Department of Agriculture, industry representatives, and other experts in the fields of agriculture and air
quality.
(3) DUTIES.—The task force shall advise the Secretary with
respect to the role of the Secretary for providing oversight
and coordination related to agricultural air quality.

TITLE IV—NUTRITION ASSISTANCE
SEC. 401. FOOD STAMP PROGRAM.

(a) DISQUALIFICATION OF A STORE OR CONCERN.—Section
12(b)(3)(B) of the Food Stamp Act of 1977 (7 U.S.C. 2021(b)(3)(B))
is amended—
(1) by striking the second parenthetical; and
(2) by striking ‘‘; or’’ and inserting the following: ‘‘, including
evidence that—
‘‘(i) the ownership of the store or food concern
was not aware of, did not approve of, did not benefit
from, and was not involved in the conduct of the violation; and
‘‘(ii)(I) the management of the store or food concern
was not aware of, did not approve of, did not benefit
from, and was not involved in the conduct of the violation; or
‘‘(II) the management was aware of, approved of,
benefited from, or was involved in the conduct of no
more than 1 previous violation by the store or food
concern; or’’.
(b) EMPLOYMENT AND TRAINING.—Section 16(h)(1) of the Food
Stamp Act of 1977 (7 U.S.C. 2025(h)(1)) is amended by striking
‘‘1995’’ each place it appears and inserting ‘‘2002’’.
(c) AUTHORIZATION OF PILOT PROJECTS.—The last sentence of
section 17(b)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C.
2026(b)(1)(A)) is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
(d) OUTREACH DEMONSTRATION PROJECTS.—The first sentence
of section 17(j)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C.
2026(j)(1)(A)) is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
(e) AUTHORIZATION FOR APPROPRIATIONS.—The first sentence
of section 18(a)(1) of the Food Stamp Act of 1977 (7 U.S.C.
2027(a)(1)) is amended by striking ‘‘1995’’ and inserting ‘‘1997’’.
(f) REAUTHORIZATION OF PUERTO RICO NUTRITION ASSISTANCE
PROGRAM.—The first sentence of section 19(a)(1)(A) of the Food
Stamp Act of 1977 (7 U.S.C. 2028(a)(1)(A)) is amended by striking
‘‘$974,000,000’’ and all that follows through ‘‘fiscal year 1995’’ and
inserting ‘‘$1,143,000,000 for fiscal year 1996, $1,174,000,000 for
fiscal year 1997, $1,204,000,000 for fiscal year 1998, $1,236,000,000
for fiscal year 1999, $1,268,000,000 for fiscal year 2000,
$1,301,000,000 for fiscal year 2001, and $1,335,000,000 for fiscal
year 2002’’.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1027

(g) AMERICAN SAMOA.—The Food Stamp Act of 1977 (7 U.S.C.
2011 et seq.) is amended by adding at the end the following:
‘‘SEC. 24. TERRITORY OF AMERICAN SAMOA.

‘‘Effective October 1, 1995, from amounts made available to
carry out this Act, the Secretary shall pay to the Territory of
American Samoa not more than $5,300,000 for each of fiscal years
1996 through 2002 to finance 100 percent of the expenditures
for the fiscal year for a nutrition assistance program extended
under section 601(c) of Public Law 96–597 (48 U.S.C. 1469d(c)).’’.
(h) ASSISTANCE FOR COMMUNITY FOOD PROJECTS.—The Food
Stamp Act of 1977 (7 U.S.C. 2011 et seq.) (as amended by subsection
(g)) is amended by adding at the end the following:
‘‘SEC. 25. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

‘‘(a) DEFINITION OF COMMUNITY FOOD PROJECTS.—In this section, the term ‘community food project’ means a community-based
project that requires a 1-time infusion of Federal assistance to
become self-sustaining and that is designed to—
‘‘(1) meet the food needs of low-income people;
‘‘(2) increase the self-reliance of communities in providing
for their own food needs; and
‘‘(3) promote comprehensive responses to local food, farm,
and nutrition issues.
‘‘(b) AUTHORITY TO PROVIDE ASSISTANCE.—
‘‘(1) IN GENERAL.—From amounts made available to carry
out this Act, the Secretary may make grants to assist eligible
private nonprofit entities to establish and carry out community
food projects.
‘‘(2) LIMITATION ON GRANTS.—The total amount of funds
provided as grants under this section may not exceed—
‘‘(A) $1,000,000 for fiscal year 1996; and
‘‘(B) $2,500,000 for each of fiscal years 1997 through
2002.
‘‘(c) ELIGIBLE ENTITIES.—To be eligible for a grant under subsection (b), a private nonprofit entity must—
‘‘(1) have experience in the area of—
‘‘(A) community food work, particularly concerning
small and medium-sized farms, including the provision of
food to people in low-income communities and the development of new markets in low-income communities for agricultural producers; or
‘‘(B) job training and business development activities
for food-related activities in low-income communities;
‘‘(2) demonstrate competency to implement a project, provide fiscal accountability, collect data, and prepare reports and
other necessary documentation; and
‘‘(3) demonstrate a willingness to share information with
researchers, practitioners, and other interested parties.
‘‘(d) PREFERENCE FOR CERTAIN PROJECTS.—In selecting community food projects to receive assistance under subsection (b), the
Secretary shall give a preference to projects designed to—
‘‘(1) develop linkages between 2 or more sectors of the
food system;
‘‘(2) support the development of entrepreneurial projects;
‘‘(3) develop innovative linkages between the for-profit and
nonprofit food sectors; or

7 USC 2033.
Effective date.

7 USC 2034.

110 STAT. 1028

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(4) encourage long-term planning activities and multi-system, interagency approaches.
‘‘(e) MATCHING FUNDS REQUIREMENTS.—
‘‘(1) REQUIREMENTS.—The Federal share of the cost of
establishing or carrying out a community food project that
receives assistance under subsection (b) may not exceed 50
percent of the cost of the project during the term of the grant.
‘‘(2) CALCULATION.—In providing for the non-Federal share
of the cost of carrying out a community food project, the entity
receiving the grant shall provide for the share through a payment in cash or in kind, fairly evaluated, including facilities,
equipment, or services.
‘‘(3) SOURCES.—An entity may provide for the non-Federal
share through State government, local government, or private
sources.
‘‘(f) TERM OF GRANT.—
‘‘(1) SINGLE GRANT.—A community food project may be
supported by only a single grant under subsection (b).
‘‘(2) TERM.—The term of a grant under subsection (b) may
not exceed 3 years.
‘‘(g) TECHNICAL ASSISTANCE AND RELATED INFORMATION.—
‘‘(1) TECHNICAL ASSISTANCE.—In carrying out this section,
the Secretary may provide technical assistance regarding
community food projects, processes, and development to an
entity seeking the assistance.
‘‘(2) SHARING INFORMATION.—
‘‘(A) IN GENERAL.—The Secretary may provide for the
sharing of information concerning community food projects
and issues among and between government, private forprofit and nonprofit groups, and the public through publications, conferences, and other appropriate forums.
‘‘(B) OTHER INTERESTED PARTIES.—The Secretary may
share information concerning community food projects with
researchers, practitioners, and other interested parties.
‘‘(h) EVALUATION.—
‘‘(1) IN GENERAL.—The Secretary shall provide for the
evaluation of the success of community food projects supported
using funds under this section.
‘‘(2) REPORT.—Not later than January 30, 2002, the Secretary shall submit a report to Congress regarding the results
of the evaluation.’’.

SEC. 402. COMMODITY DISTRIBUTION PROGRAM; COMMODITY SUPPLEMENTAL FOOD PROGRAM.

(a) REAUTHORIZATION.—The first sentence of section 4(a) of
the Agriculture and Consumer Protection Act of 1973 (Public Law
93–86; 7 U.S.C. 612c note) is amended by striking ‘‘1995’’ and
inserting ‘‘2002’’.
(b) FUNDING.—Section 5 of the Agriculture and Consumer
Protection Act of 1973 (Public Law 93–86; 7 U.S.C. 612c note)
is amended—
(1) in subsection (a)(2), by striking ‘‘1995’’ and inserting
‘‘2002’’;
(2) in subsection (d)(2), by striking ‘‘1995’’ and inserting
‘‘2002’’; and
(3) by adding at the end the following:

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1029

‘‘(l) CARRIED-OVER FUNDS.—Not more than 20 percent of any
commodity supplemental food program food funds carried over
under this section shall be available for administrative expenses
of the program.’’.
SEC. 403. EMERGENCY FOOD ASSISTANCE PROGRAM.

(a) REAUTHORIZATION.—The first sentence of section 204(a)(1)
of the Emergency Food Assistance Act of 1983 (Public Law 98–
8; 7 U.S.C. 612c note) is amended by striking ‘‘1995’’ and inserting
‘‘2002’’.
(b) PROGRAM TERMINATION.—Section 212 of the Emergency
Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C. 612c note)
is amended by striking ‘‘1995’’ and inserting ‘‘2002’’.
(c) REQUIRED PURCHASES OF COMMODITIES.—Section 214 of the
Emergency Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.
612c note) is amended—
(1) in the first sentence of subsection (a), by striking ‘‘1995’’
and inserting ‘‘2002’’; and
(2) in subsection (e), by striking ‘‘1995’’ each place it
appears and inserting ‘‘2002’’.
SEC. 404. SOUP KITCHEN AND FOOD BANK PROGRAM.

Section 110 of the Hunger Prevention Act of 1988 (Public Law
100–435; 7 U.S.C. 612c note) is amended—
(1) in the first sentence of subsection (a), by striking ‘‘1995’’
and inserting ‘‘2002’’; and
(2) in subsection (c)(2)—
(A) in the paragraph heading, by striking ‘‘1992
THROUGH 1995’’ and inserting ‘‘SUBSEQUENT’’; and
(B) by striking ‘‘1995’’ each place it appears and inserting ‘‘2002’’.
SEC. 405. NATIONAL COMMODITY PROCESSING.

The first sentence of section 1114(a)(2)(A) of the Agriculture
and Food Act of 1981 (7 U.S.C. 1431e(2)(A)) is amended by striking
‘‘1995’’ and inserting ‘‘2002’’.

TITLE V—AGRICULTURAL PROMOTION
Subtitle A—Commodity Promotion and
Evaluation
SEC. 501. COMMODITY PROMOTION AND EVALUATION.

(a) COMMODITY PROMOTION LAW DEFINED.—In this section, the
term ‘‘commodity promotion law’’ means a Federal law that provides
for the establishment and operation of a promotion program regarding an agricultural commodity that includes a combination of promotion, research, industry information, or consumer information
activities, is funded by mandatory assessments on producers or
processors, and is designed to maintain or expand markets and
uses for the commodity (as determined by the Secretary). The
term includes—
(1) the marketing promotion provisions under section
8c(6)(I) of the Agricultural Adjustment Act (7 U.S.C. 608c(6)(I)),
reenacted with amendments by the Agricultural Marketing
Agreement Act of 1937;

7 USC 7401.

110 STAT. 1030

PUBLIC LAW 104–127—APR. 4, 1996
(2) Public Law 89–502 (7 U.S.C. 2101 et seq.);
(3) title III of Public Law 91–670 (7 U.S.C. 2611 et seq.);
(4) Public Law 93–428 (7 U.S.C. 2701 et seq.);
(5) Public Law 94–294 (7 U.S.C. 2901 et seq.);
(6) subtitle B of title I of Public Law 98–180 (7 U.S.C.
4501 et seq.);
(7) Public Law 98–590 (7 U.S.C. 4601 et seq.);
(8) subtitle B of title XVI of Public Law 99–198 (7 U.S.C.
4801 et seq.);
(9) subtitle C of title XVI of Public Law 99–198 (7 U.S.C.
4901 et seq.);
(10) subtitle B of title XIX of Public Law 101–624 (7 U.S.C.
6101 et seq.);
(11) subtitle E of title XIX of Public Law 101–624 (7 U.S.C.
6301 et seq.);
(12) subtitle H of title XIX of Public Law 101–624 (7
U.S.C. 6401 et seq.);
(13) Public Law 103–190 (7 U.S.C. 6801 et seq.);
(14) Public Law 103–407 (7 U.S.C. 7101 et seq.);
(15) subtitle B;
(16) subtitle C;
(17) subtitle D; or
(18) subtitle E.
(b) FINDINGS.—Congress finds the following:
(1) It is in the national public interest and vital to the
welfare of the agricultural economy of the United States to
maintain and expand existing markets and develop new markets and uses for agricultural commodities through industryfunded, Government-supervised, generic commodity promotion
programs established under commodity promotion laws.
(2) These generic commodity promotion programs, funded
by the agricultural producers or processors who most directly
reap the benefits of the programs and supervised by the Secretary of Agriculture, provide a unique opportunity for producers and processors to inform consumers about their products.
(3) The central congressional purpose underlying each
commodity promotion law has always been to maintain and
expand markets for the agricultural commodity covered by the
law, rather than to maintain or expand the share of those
markets held by any individual producer or processor.
(4) The commodity promotion laws were neither designed
nor intended to prohibit or restrict, and the promotion programs
established and funded pursuant to these laws do not prohibit
or restrict, individual advertising or promotion of the covered
commodities by any producer, processor, or group of producers
or processors.
(5) It has never been the intent of Congress for the generic
commodity promotion programs established and funded by the
commodity promotion laws to replace the individual advertising
and promotion efforts of producers or processors.
(6) An individual producer’s or processor’s own advertising
initiatives are typically designed to increase the share of the
market held by that producer or processor rather than to
increase or expand the overall size of the market.
(7) In contrast, a generic commodity promotion program
is intended and designed to maintain or increase the overall
demand for the agricultural commodity covered by the program

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1031

and increase the size of the market for that commodity, often
by utilizing promotion methods and techniques that individual
producers and processors typically are unable, or have no incentive, to employ.
(8) The commodity promotion laws establish promotion programs that operate as ‘‘self-help’’ mechanisms for producers
and processors to fund generic promotions for covered commodities which, under the required supervision and oversight of
the Secretary of Agriculture—
(A) further specific national governmental goals, as
established by Congress; and
(B) produce nonideological and commercial communication the purpose of which is to further the governmental
policy and objective of maintaining and expanding the markets for the covered commodities.
(9) While some commodity promotion laws grant a producer
or processor the option of crediting individual advertising conducted by the producer or processor for all or a portion of
the producer’s or processor’s marketing promotion assessments,
all promotion programs established under the commodity promotion laws, both those programs that permit credit for individual advertising and those programs that do not contain such
provisions, are very narrowly tailored to fulfill the congressional
purposes of the commodity promotion laws without impairing
or infringing the legal or constitutional rights of any individual
producer or processor.
(10) These generic commodity promotion programs are of
particular benefit to small producers who often lack the
resources or market power to advertise on their own and who
are otherwise often unable to benefit from the economies of
scale available in promotion and advertising.
(11) Periodic independent evaluation of the effectiveness
of these generic commodity promotion programs will assist Congress and the Secretary of Agriculture in ensuring that the
objectives of the programs are met.
(c) INDEPENDENT EVALUATION OF PROMOTION PROGRAM
EFFECTIVENESS.—Except as otherwise provided by law, each
commodity board established under the supervision and oversight
of the Secretary of Agriculture pursuant to a commodity promotion
law shall, not less often than every 5 years, authorize and fund,
from funds otherwise available to the board, an independent evaluation of the effectiveness of the generic commodity promotion programs and other programs conducted by the board pursuant to
a commodity promotion law. The board shall submit to the Secretary, and make available to the public, the results of each periodic
independent evaluation conducted under this subsection.
(d) ADMINISTRATIVE COSTS.—The Secretary shall annually provide to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry
of the Senate information on administrative expenses on programs
established under commodity promotion laws.

Public
information.

110 STAT. 1032
Commodity
Promotion,
Research, and
Information Act
of 1996.

7 USC 7401 note.

PUBLIC LAW 104–127—APR. 4, 1996

Subtitle B—Issuance of Orders for Promotion, Research, and Information Activities Regarding Agricultural Commodities
SEC. 511. SHORT TITLE.

This subtitle may be cited as the ‘‘Commodity Promotion,
Research, and Information Act of 1996’’.
7 USC 7411.

SEC. 512. FINDINGS AND PURPOSE.

(a) FINDINGS.—Congress finds the following:
(1) The production of agricultural commodities plays a
significant role in the economy of the United States. Thousands
of producers in the United States are involved in the production
of agricultural commodities, and such commodities are
consumed by millions of people throughout the United States
and foreign countries.
(2) Agricultural commodities must be of high quality, readily available, handled properly, and marketed efficiently to
ensure that consumers have an adequate supply.
(3) The maintenance and expansion of existing markets
and the development of new markets for agricultural commodities through generic commodity promotion, research, and
information programs are vital to the welfare of persons
engaged in the production, marketing, and consumption of such
commodities, as well as to the general economy of the United
States.
(4) Generic promotion, research, and information activities
for agricultural commodities play a unique role in advancing
the demand for such commodities, since such activities increase
the total market for a product to the benefit of consumers
and all producers. These generic activities complement branded
advertising initiatives, which are aimed at increasing the market share of individual competitors, and are of particular benefit
to small producers who lack the resources or market power
to advertise on their own. These generic activities do not impede
the branded advertising efforts of individual firms, but instead
increase general market demand for an agricultural commodity
using methods that individual companies do not have the incentive to employ.
(5) Generic promotion, research, and information activities
for agricultural commodities, paid by the producers and others
in the industry who reap the benefits of such activities, provide
a unique opportunity for producers to inform consumers about
a particular agricultural commodity.
(6) It is important to ensure that generic promotion,
research, and information activities for agricultural commodities be carried out in an effective and coordinated manner
designed to strengthen the position of the commodities in the
marketplace and to maintain and expand their markets and
uses. Independent evaluation of the effectiveness of the generic
promotion activities of these programs will assist the Secretary
of Agriculture and Congress in ensuring that these objectives
are met.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1033

(7) The cooperative development, financing, and
implementation of a coordinated national program of research,
promotion, and information regarding agricultural commodities
are necessary to maintain and expand existing markets and
to develop new markets for these commodities.
(8) Agricultural commodities move in interstate and foreign
commerce, and agricultural commodities and their products
that do not move in such channels of commerce directly burden
or affect interstate commerce in agricultural commodities and
their products.
(9) Commodity promotion programs have the ability to
provide significant conservation benefits to producers and the
public.
(b) PURPOSE.—The purpose of this subtitle is to authorize the
establishment, through the exercise by the Secretary of Agriculture
of the authority provided in this subtitle, of an orderly program
for developing, financing, and carrying out an effective, continuous,
and coordinated program of generic promotion, research, and
information regarding agricultural commodities designed to—
(1) strengthen the position of agricultural commodity industries in the marketplace;
(2) maintain and expand existing domestic and foreign
markets and uses for agricultural commodities;
(3) develop new markets and uses for agricultural commodities; or
(4) assist producers in meeting their conservation objectives.
(c) RULE OF CONSTRUCTION.—Nothing in this subtitle provides
for the control of production or otherwise limits the right of any
person to produce, handle, or import an agricultural commodity.
SEC. 513. DEFINITIONS.

In this subtitle (unless the context otherwise requires):
(1) AGRICULTURAL COMMODITY.—The term ‘‘agricultural
commodity’’ means—
(A) agricultural, horticultural, viticultural, and dairy
products;
(B) livestock and the products of livestock;
(C) the products of poultry and bee raising;
(D) the products of forestry;
(E) other commodities raised or produced on farms,
as determined appropriate by the Secretary; and
(F) products processed or manufactured from products
specified in the preceding subparagraphs, as determined
appropriate by the Secretary.
(2) BOARD.—The term ‘‘board’’ means a board established
under an order issued under section 514.
(3) CONFLICT OF INTEREST.—The term ‘‘conflict of interest’’
means a situation in which a member or employee of a board
has a direct or indirect financial interest in a person that
performs a service for, or enters into a contract with, a board
for anything of economic value.
(4) DEPARTMENT.—The term ‘‘Department’’ means the
Department of Agriculture.
(5) FIRST HANDLER.—The term ‘‘first handler’’ means the
first person who buys or takes possession of an agricultural
commodity from a producer for marketing. If a producer mar-

7 USC 7412.

110 STAT. 1034

PUBLIC LAW 104–127—APR. 4, 1996
kets the agricultural commodity directly to consumers, the producer shall be considered to be the first handler with respect
to the agricultural commodity produced by the producer.
(6) IMPORTER.—The term ‘‘importer’’ means any person who
imports an agricultural commodity from outside the United
States for sale in the United States as a principal or as an
agent, broker, or consignee of any person.
(7) INFORMATION.—The term ‘‘information’’ means information and programs that are designed to increase—
(A) efficiency in processing; and
(B) the development of new markets, marketing strategies, increased marketing efficiency, and activities to
enhance the image of agricultural commodities on a
national or international basis.
(8) MARKET.—The term ‘‘market’’ means to sell or to otherwise dispose of an agricultural commodity in interstate, foreign,
or intrastate commerce.
(9) ORDER.—The term ‘‘order’’ means an order issued by
the Secretary under section 514 that provides for a program
of generic promotion, research, and information regarding agricultural commodities designed to—
(A) strengthen the position of agricultural commodity
industries in the marketplace;
(B) maintain and expand existing domestic and foreign
markets and uses for agricultural commodities;
(C) develop new markets and uses for agricultural
commodities; or
(D) assist producers in meeting their conservation
objectives.
(10) PERSON.—The term ‘‘person’’ means any individual,
group of individuals, partnership, corporation, association,
cooperative, or any other legal entity.
(11) PRODUCER.—The term ‘‘producer’’ means any person
who is engaged in the production and sale of an agricultural
commodity in the United States and who owns, or shares the
ownership and risk of loss of, the agricultural commodity.
(12) PROMOTION.—The term ‘‘promotion’’ means any action
taken by a board under an order, including paid advertising,
to present a favorable image of an agricultural commodity
to the public to improve the competitive position of the agricultural commodity in the marketplace and to stimulate sales
of the agricultural commodity.
(13) RESEARCH.—The term ‘‘research’’ means any type of
test, study, or analysis designed to advance the image, desirability, use, marketability, production, product development, or
quality of an agricultural commodity.
(14) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture.
(15) STATE.—The term ‘‘State’’ means any of the States,
the District of Columbia, the Commonwealth of Puerto Rico,
or any territory or possession of the United States.
(16) SUSPEND.—The term ‘‘suspend’’ means to issue a rule
under section 553 of title 5, United States Code, to temporarily
prevent the operation of an order during a particular period
of time specified in the rule.
(17) TERMINATE.—The term ‘‘terminate’’ means to issue
a rule under section 553 of title 5, United States Code, to

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110 STAT. 1035

cancel permanently the operation of an order beginning on
a date certain specified in the rule.
(18) UNITED STATES.—The term ‘‘United States’’ means
collectively the 50 States, the District of Columbia, the
Commonwealth of Puerto Rico and the territories and possessions of the United States.
SEC. 514. ISSUANCE OF ORDERS.

(a) ISSUANCE AUTHORIZED.—
(1) IN GENERAL.—To effectuate the purpose of this subtitle,
the Secretary may issue, and amend from time to time, orders
applicable to—
(A) the producers of an agricultural commodity;
(B) the first handlers of the agricultural commodity
and other persons in the marketing chain as appropriate;
and
(C) the importers of the agricultural commodity, if
imports of the agricultural commodity are subject to assessment under section 516(f).
(2) NATIONAL SCOPE.—Each order issued under this section
shall be national in scope.
(b) PROCEDURE FOR ISSUANCE.—
(1) DEVELOPMENT OR RECEIPT OF PROPOSED ORDER.—A proposed order with respect to an agricultural commodity may
be—
(A) prepared by the Secretary at any time; or
(B) submitted to the Secretary by—
(i) an association of producers of the agricultural
commodity; or
(ii) any other person that may be affected by the
issuance of an order with respect to the agricultural
commodity.
(2) CONSIDERATION OF PROPOSED ORDER.—If the Secretary
determines that a proposed order is consistent with and will
effectuate the purpose of this subtitle, the Secretary shall publish the proposed order in the Federal Register and give due
notice and opportunity for public comment on the proposed
order.
(3) EXISTENCE OF OTHER ORDERS.—In deciding whether
a proposal for an order is consistent with and will effectuate
the purpose of this subtitle, the Secretary may consider the
existence of other Federal promotion, research, and information
programs or orders issued or developed pursuant to any other
law.
(4) PREPARATION OF FINAL ORDER.—After notice and opportunity for public comment under paragraph (2) regarding a
proposed order, the Secretary shall take into consideration the
comments received in preparing a final order. The Secretary
shall ensure that the final order is in conformity with the
terms, conditions, and requirements of this subtitle.
(c) ISSUANCE AND EFFECTIVE DATE.—If the Secretary determines that the final order developed with respect to an agricultural
commodity is consistent with and will effectuate the purpose of
this subtitle, the Secretary shall issue the final order. Except in
the case of an order for which an initial referendum is conducted
under section 518(a), the final order shall be issued and become

7 USC 7413.

Federal Register,
publication.

110 STAT. 1036

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effective not later than 270 days after the date of publication
of the proposed order that was the basis for the final order.
(d) AMENDMENTS.—From time to time the Secretary may amend
any order, consistent with the requirements of section 523.
7 USC 7414.

SEC. 515. REQUIRED TERMS IN ORDERS.

(a) IN GENERAL.—Each order shall contain the terms and conditions specified in this section.
(b) BOARD.—
(1) ESTABLISHMENT.—Each order shall establish a board
to carry out a program of generic promotion, research, and
information regarding the agricultural commodity covered by
the order and intended to effectuate the purpose of this subtitle.
(2) BOARD MEMBERSHIP.—
(A) NUMBER OF MEMBERS.—Each board shall consist
of the number of members considered by the Secretary,
in consultation with the agricultural commodity industry
involved, to be appropriate to administer the order. In
addition to members, the Secretary may also provide for
alternates on the board.
(B) APPOINTMENT.—The Secretary shall appoint the
members and any alternates of a board from among producers of the agricultural commodity and first handlers and
others in the marketing chain as appropriate. If imports
of the agricultural commodity covered by an order are
subject to assessment under section 516(f), the Secretary
shall also appoint importers as members of the board and
as alternates if alternates are included on the board. The
Secretary may appoint 1 or more members of the general
public to each board.
(C) NOMINATIONS.—The Secretary may make appointments from nominations made pursuant to the method
set forth in the order.
(D) GEOGRAPHICAL REPRESENTATION.—To ensure fair
and equitable representation of the agricultural commodity
industry covered by an order, the composition of each board
shall reflect the geographical distribution of the production
of the agricultural commodity involved in the United States
and the quantity or value of the agricultural commodity
imported into the United States.
(3) REAPPORTIONMENT OF BOARD MEMBERSHIP.—In accordance with rules issued by the Secretary, at least once in each
5-year period, but not more frequently than once in each 3year period, each board shall—
(A) review the geographical distribution in the United
States of the production of the agricultural commodity covered by the order involved and the quantity or value of
the agricultural commodity imported into the United
States; and
(B) if warranted, recommend to the Secretary the
reapportionment of the board membership to reflect
changes in the geographical distribution of the production
of the agricultural commodity and the quantity or value
of the imported agricultural commodity.
(4) NOTICE.—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1037

(A) VACANCIES.—Each order shall provide for notice
of board vacancies to the agricultural commodity industry
involved.
(B) MEETINGS.—Each board shall provide the Secretary
with prior notice of meetings of the board to permit the
Secretary, or a designated representative of the Secretary,
to attend the meetings.
(5) TERM OF OFFICE.—
(A) IN GENERAL.—The members and any alternates
of a board shall each serve for a term of 3 years, except
that the members and any alternates initially appointed
to a board shall serve for terms of not more than 2, 3,
and 4 years, as specified by the order.
(B) LIMITATION ON CONSECUTIVE TERMS.—A member
or alternate may serve not more than 2 consecutive terms.
(C)
CONTINUATION
OF
TERM.—Notwithstanding
subparagraph (B), each member or alternate shall continue
to serve until a successor is appointed by the Secretary.
(D) VACANCIES.—A vacancy arising before the expiration of a term of office of an incumbent member or alternate
of a board shall be filled in a manner provided for in
the order.
(6) COMPENSATION.—
(A) IN GENERAL.—Members and any alternates of a
board shall serve without compensation.
(B) TRAVEL EXPENSES.—If approved by a board, members or alternates shall be reimbursed for reasonable travel
expenses, which may include a per diem allowance or actual
subsistence incurred while away from their homes or regular places of business in the performance of services for
the board.
(c) POWERS AND DUTIES OF A BOARD.—Each order shall specify
the powers and duties of the board established under the order,
which shall include the power and duty—
(1) to administer the order in accordance with its terms
and conditions and to collect assessments;
(2) to develop and recommend to the Secretary for approval
such bylaws as may be necessary for the functioning of the
board and such rules as may be necessary to administer the
order, including activities authorized to be carried out under
the order;
(3) to meet, organize, and select from among the members
of the board a chairperson, other officers, and committees and
subcommittees, as the board determines to be appropriate;
(4) to employ persons, other than the members, as the
board considers necessary to assist the board in carrying out
its duties, and to determine the compensation and specify the
duties of the persons;
(5) subject to subsection (e), to develop and carry out
generic promotion, research, and information activities relating
to the agricultural commodity covered by the order;
(6) to prepare and submit for the approval of the Secretary,
before the beginning of each fiscal year, rates of assessment
under section 517 and an annual budget of the anticipated
expenses to be incurred in the administration of the order,
including the probable cost of each promotion, research, and

110 STAT. 1038

Records.

PUBLIC LAW 104–127—APR. 4, 1996

information activity proposed to be developed or carried out
by the board;
(7) to borrow funds necessary for the startup expenses
of the order;
(8) subject to subsection (f), to enter into contracts or agreements to develop and carry out generic promotion, research,
and information activities relating to the agricultural commodity covered by the order;
(9) to pay the cost of the activities with assessments collected under section 517, earnings from invested assessments,
and other funds;
(10) to keep records that accurately reflect the actions
and transactions of the board, to keep and report minutes
of each meeting of the board to the Secretary, and to furnish
the Secretary with any information or records the Secretary
requests;
(11) to receive, investigate, and report to the Secretary
complaints of violations of the order; and
(12) to recommend to the Secretary such amendments to
the order as the board considers appropriate.
(d) PROHIBITED ACTIVITIES.—A board may not engage in, and
shall prohibit the employees and agents of the board from engaging
in—
(1) any action that would be a conflict of interest;
(2) using funds collected by the board under the order,
any action undertaken for the purpose of influencing any legislation or governmental action or policy other than recommending to the Secretary amendments to the order; and
(3) any advertising, including promotion, research, and
information activities authorized to be carried out under the
order, that may be false or misleading or disparaging to another
agricultural commodity.
(e) ACTIVITIES AND BUDGETS.—
(1) ACTIVITIES.—Each order shall require the board established under the order to submit to the Secretary for approval
plans and projects for promotion, research, or information relating to the agricultural commodity covered by the order.
(2) BUDGETS.—
(A) SUBMISSION TO SECRETARY.—Each order shall
require the board established under the order to submit
to the Secretary for approval a budget of its anticipated
annual expenses and disbursements to be paid to administer the order. The budget shall be submitted before the
beginning of a fiscal year and as frequently as may be
necessary after the beginning of the fiscal year.
(B) REIMBURSEMENT OF SECRETARY.—Each order shall
require that the Secretary be reimbursed for all expenses
incurred by the Secretary in the implementation, administration, and supervision of the order, including all referenda
costs incurred in connection with the order.
(3) INCURRING EXPENSES.—A board may incur the expenses
described in paragraph (2) and other expenses for the administration, maintenance, and functioning of the board as authorized by the Secretary.
(4) PAYMENT OF EXPENSES.—Expenses incurred under paragraph (3) shall be paid by a board using assessments collected
under section 517, earnings obtained from assessments, and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1039

other income of the board. Any funds borrowed by the board
shall be expended only for startup costs and capital outlays.
(5) LIMITATION ON SPENDING.—For fiscal years beginning
3 or more years after the date of the establishment of a board,
the board may not expend for administration (except for
reimbursements to the Secretary required under paragraph
(2)(B)), maintenance, and functioning of the board in a fiscal
year an amount that exceeds 15 percent of the assessment
and other income received by the board for the fiscal year.
(f) CONTRACTS AND AGREEMENTS.—
(1) IN GENERAL.—Each order shall provide that, with the
approval of the Secretary, the board established under the
order may—
(A) enter into contracts and agreements to carry out
generic promotion, research, and information activities
relating to the agricultural commodity covered by the order,
including contracts and agreements with producer associations or other entities as considered appropriate by the
Secretary; and
(B) pay the cost of approved generic promotion,
research, and information activities using assessments collected under section 517, earnings obtained from assessments, and other income of the board.
(2) REQUIREMENTS.—Each contract or agreement shall provide that any person who enters into the contract or agreement
with the board shall—
(A) develop and submit to the board a proposed activity
together with a budget that specifies the cost to be incurred
to carry out the activity;
(B) keep accurate records of all of its transactions
relating to the contract or agreement;
(C) account for funds received and expended in connection with the contract or agreement;
(D) make periodic reports to the board of activities
conducted under the contract or agreement; and
(E) make such other reports as the board or the Secretary considers relevant.
(g) RECORDS OF BOARD.—
(1) IN GENERAL.—Each order shall require the board established under the order—
(A) to maintain such records as the Secretary may
require and to make the records available to the Secretary
for inspection and audit;
(B) to collect and submit to the Secretary, at any
time the Secretary may specify, any information the Secretary may request; and
(C) to account for the receipt and disbursement of
all funds in the possession, or under the control, of the
board.
(2) AUDITS.—Each order shall require the board established
under the order to have—
(A) its records audited by an independent auditor at
the end of each fiscal year; and
(B) a report of the audit submitted directly to the
Secretary.
(h) PERIODIC EVALUATION.—In accordance with section 501(c),
each order shall require the board established under the order

Records.

Reports.

110 STAT. 1040

PUBLIC LAW 104–127—APR. 4, 1996

to provide for the independent evaluation of all generic promotion,
research, and information activities undertaken under the order.
(i) BOOKS AND RECORDS OF PERSONS COVERED BY ORDER.—
(1) IN GENERAL.—Each order shall require that producers,
first handlers and other persons in the marketing chain as
appropriate, and importers covered by the order shall—
(A) maintain records sufficient to ensure compliance
with the order and regulations;
(B) submit to the board established under the order
any information required by the board to carry out its
responsibilities under the order; and
(C) make the records described in subparagraph (A)
available, during normal business hours, for inspection by
employees or agents of the board or the Department, including any records necessary to verify information required
under subparagraph (B).
(2) TIME REQUIREMENT.—Any record required to be maintained under paragraph (1) shall be maintained for such time
period as the Secretary may prescribe.
(3) OTHER INFORMATION.—The Secretary may use, and may
authorize the board to use under this subtitle, information
regarding persons subject to an order that is collected by the
Department under any other law.
(4) CONFIDENTIALITY OF INFORMATION.—
(A) IN GENERAL.—Except as otherwise provided in this
subtitle, all information obtained under paragraph (1) or
as part of a referendum under section 518 shall be kept
confidential by all officers, employees, and agents of the
Department and of the board.
(B) DISCLOSURE.—Information referred to in subparagraph (A) may be disclosed only if—
(i) the Secretary considers the information relevant; and
(ii) the information is revealed in a judicial
proceeding or administrative hearing brought at the
direction or on the request of the Secretary or to which
the Secretary or any officer of the Department is a
party.
(C) OTHER EXCEPTIONS.—This paragraph shall not prohibit—
(i) the issuance of general statements based on
reports or on information relating to a number of persons subject to an order if the statements do not identify the information furnished by any person; or
(ii) the publication, by direction of the Secretary,
of the name of any person violating any order and
a statement of the particular provisions of the order
violated by the person.
(D) PENALTY.—Any person who willfully violates this
subsection shall be subject, on conviction, to a fine of not
more than $1,000 or to imprisonment for not more than
1 year, or both.
(5) WITHHOLDING INFORMATION.—This subsection shall not
authorize the withholding of information from Congress.

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110 STAT. 1041

SEC. 516. PERMISSIVE TERMS IN ORDERS.

(a) EXEMPTIONS.—An order issued under this subtitle may contain—
(1) authority for the Secretary to exempt from the order
any de minimis quantity of an agricultural commodity otherwise
covered by the order; and
(2) authority for the board established under the order
to require satisfactory safeguards against improper use of the
exemption.
(b) DIFFERENT PAYMENT AND REPORTING SCHEDULES.—An order
issued under this subtitle may contain authority for the board
established under the order to designate different payment and
reporting schedules to recognize differences in agricultural commodity industry marketing practices and procedures used in different
production and importing areas.
(c) ACTIVITIES.—An order issued under this subtitle may contain
authority to develop and carry out research, promotion, and
information activities designed to expand, improve, or make more
efficient the marketing or use of the agricultural commodity covered
by the order in domestic and foreign markets. Section 515(e) shall
apply with respect to activities authorized under this subsection.
(d) RESERVE FUNDS.—An order issued under this subtitle may
contain authority to reserve funds from assessments collected under
section 517 to permit an effective and continuous coordinated program of research, promotion, and information in years when the
yield from assessments may be reduced, except that the amount
of funds reserved may not exceed the greatest aggregate amount
of the anticipated disbursements specified in budgets approved
under section 515(e) by the Secretary for any 2 fiscal years.
(e) CREDITS.—
(1) GENERIC ACTIVITIES.—An order issued under this subtitle may contain authority to provide credits of assessments
for those individuals who contribute to other similar generic
research, promotion, and information programs at the State,
regional, or local level.
(2) BRANDED ACTIVITIES.—
(A) IN GENERAL.—The Secretary may permit a farmer
cooperative that engages in branded activities relating to
the marketing of the products of members of the cooperative
to receive an annual credit for the activities and related
expenditures in the form of a deduction of the total cost
of the activities and related expenditures from the amount
of any assessment that would otherwise be required to
be paid by the producer members of the cooperative under
an order issued under this subtitle.
(B) ELECTION BY COOPERATIVE.—A farmer cooperative
may elect to voluntarily waive the application of subparagraph (A) to the cooperative.
(f) ASSESSMENT OF IMPORTS.—An order issued under this subtitle may contain authority for the board established under the
order to assess under section 517 an imported agricultural commodity, or products of such an agricultural commodity, at a rate comparable to the rate determined by the appropriate board for the
domestic agricultural commodity covered by the order.
(g) OTHER AUTHORITY.—An order issued under this subtitle
may contain authority to take any other action that—

7 USC 7415.

110 STAT. 1042

PUBLIC LAW 104–127—APR. 4, 1996
(1) is not inconsistent with the purpose of this subtitle,
any term or condition specified in section 515, or any rule
issued to carry out this subtitle; and
(2) is necessary to administer the order.

7 USC 7416.

SEC. 517. ASSESSMENTS.

(a) ASSESSMENTS AUTHORIZED.—While an order issued under
this subtitle is in effect with respect to an agricultural commodity,
assessments shall be—
(1) paid by first handlers with respect to the agricultural
commodity produced and marketed in the United States; and
(2) paid by importers with respect to the agricultural
commodity imported into the United States, if the imported
agricultural commodity is covered by the order pursuant to
section 516(f).
(b) COLLECTION.—Assessments required under an order shall
be remitted to the board established under the order at the time
and in the manner prescribed by the order.
(c) LIMITATION ON ASSESSMENTS.—Not more than 1 assessment
may be levied on a first handler or importer under subsection
(a) with respect to any agricultural commodity.
(d) ASSESSMENT RATES.—The board shall recommend to the
Secretary 1 or more rates of assessment to be levied under subsection (a). If approved by the Secretary, the rates shall take effect.
An order may provide that an assessment rate may not be increased
unless approved by a referendum conducted pursuant to section
518.
(e) LATE-PAYMENT AND INTEREST CHARGES.—
(1) IN GENERAL.—Late-payment and interest charges may
be levied on each person subject to an order who fails to
remit an assessment in accordance with subsection (b).
(2) RATE.—The rate for the charges shall be specified by
the Secretary.
(f) INVESTMENT OF ASSESSMENTS.—Pending disbursement of
assessments under a budget approved by the Secretary, a board
may invest assessments collected under this section in—
(1) obligations of the United States or any agency of the
United States;
(2) general obligations of any State or any political subdivision of a State;
(3) interest-bearing accounts or certificates of deposit of
financial institutions that are members of the Federal Reserve
System; or
(4) obligations fully guaranteed as to principal and interest
by the United States.
(g) REFUND OF ASSESSMENTS FROM ESCROW ACCOUNT.—
(1) ESCROW ACCOUNT.—During the period beginning on
the effective date of an order and ending on the date the
Secretary announces the results of a referendum that is conducted under section 518(b)(1) with respect to the order, the
board established under the order shall—
(A) establish and maintain an escrow account of the
kind described in subsection (f)(3) to be used to refund
assessments; and
(B) deposit funds in the account in accordance with
paragraph (2).

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110 STAT. 1043

(2) AMOUNT TO BE DEPOSITED.—The board shall deposit
in the account an amount equal to 10 percent of the assessments collected during the period referred to in paragraph
(1).
(3) RIGHT TO RECEIVE REFUND.—Subject to paragraphs (4),
(5), and (6), persons subject to an order shall be eligible to
demand a refund of assessments collected during the period
referred to in paragraph (1) if—
(A) the assessments were remitted on behalf of the
person; and
(B) the order is not approved in the referendum.
(4) FORM OF DEMAND.—The demand for a refund shall
be made at such time and in such form as specified by the
order.
(5) PAYMENT OF REFUND.—A person entitled to a refund
shall be paid promptly after the board receives satisfactory
proof that the assessment for which the refund is demanded
was paid on behalf of the person who makes the demand.
(6) PRORATION.—If the funds in the escrow account required
by paragraph (1) are insufficient to pay the amount of all
refunds that persons subject to an order otherwise would have
a right to receive under this subsection, the board shall prorate
the amount of the funds among all the persons.
(7) CLOSING OF ESCROW ACCOUNT.—If the order is approved
in a referendum conducted under section 518(b)(1)—
(A) the escrow account shall be closed; and
(B) the funds shall be available to the board for
disbursement as authorized in the order.
SEC. 518. REFERENDA.

(a) INITIAL REFERENDUM.—
(1) OPTIONAL REFERENDUM.—For the purpose of
ascertaining whether the persons to be covered by an order
favor the order going into effect, the order may provide for
the Secretary to conduct an initial referendum among persons
to be subject to an assessment under section 517 who, during
a representative period determined by the Secretary, engaged
in—
(A) the production or handling of the agricultural
commodity covered by the order; or
(B) the importation of the agricultural commodity.
(2) PROCEDURE.—The results of the referendum shall be
determined in accordance with subsection (e). The Secretary
may require that the agricultural commodity industry involved
post a bond or other collateral to cover the cost of the referendum.
(b) REQUIRED REFERENDA.—
(1) IN GENERAL.—For the purpose of ascertaining whether
the persons covered by an order favor the continuation, suspension, or termination of the order, the Secretary shall conduct
a referendum among persons subject to assessments under
section 517 who, during a representative period determined
by the Secretary, have engaged in—
(A) the production or handling of the agricultural
commodity covered by the order; or
(B) the importation of the agricultural commodity.

7 USC 7417.

110 STAT. 1044

PUBLIC LAW 104–127—APR. 4, 1996

(2) TIME FOR REFERENDUM.—The referendum shall be conducted not later than 3 years after assessments first begin
under the order.
(3) EXCEPTION.—This subsection shall not apply if an initial
referendum was conducted under subsection (a).
(c) SUBSEQUENT REFERENDA.—The Secretary shall conduct a
subsequent referendum—
(1) not later than 7 years after assessments first begin
under the order;
(2) at the request of the board established under the order;
or
(3) at the request of 10 percent or more of the number
of persons eligible to vote under subsection (b)(1);
to determine if the persons favor the continuation, suspension,
or termination of the order.
(d) OTHER REFERENDA.—The Secretary may conduct a referendum at any time to determine whether the continuation, suspension,
or termination of the order or a provision of the order is favored
by persons eligible to vote under subsection (b)(1).
(e) APPROVAL OF ORDER.—An order may provide for its approval
in a referendum—
(1) by a majority of those persons voting;
(2) by persons voting for approval who represent a majority
of the volume of the agricultural commodity; or
(3) by a majority of those persons voting for approval
who also represent a majority of the volume of the agricultural
commodity.
(f) COSTS OF REFERENDA.—The board established under an
order with respect to which a referendum is conducted under this
section shall reimburse the Secretary for any expenses incurred
by the Secretary to conduct the referendum.
(g) MANNER OF CONDUCTING REFERENDA.—
(1) IN GENERAL.—A referendum conducted under this section shall be conducted in the manner determined by the Secretary to be appropriate.
(2) ADVANCE REGISTRATION.—If the Secretary determines
that an advance registration of eligible voters in a referendum
is necessary before the voting period in order to facilitate the
conduct of the referendum, the Secretary may institute the
advance registration procedures by mail, or in person through
the use of national and local offices of the Department.
(3) VOTING.—Eligible voters may vote by mail ballot in
the referendum or in person if so prescribed by the Secretary.
(4) NOTICE.—Not later than 30 days before a referendum
is conducted under this section with respect to an order, the
Secretary shall notify the agricultural commodity industry
involved, in such manner as determined by the Secretary, of
the period during which voting in the referendum will occur.
The notice shall explain any registration and voting procedures
established under this subsection.
7 USC 7418.

SEC. 519. PETITION AND REVIEW OF ORDERS.

(a) PETITION.—
(1) IN GENERAL.—A person subject to an order issued under
this subtitle may file with the Secretary a petition—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1045

(A) stating that the order, any provision of the order,
or any obligation imposed in connection with the order,
is not established in accordance with law; and
(B) requesting a modification of the order or an exemption from the order.
(2) HEARING.—The Secretary shall give the petitioner an
opportunity for a hearing on the petition, in accordance with
regulations issued by the Secretary.
(3) RULING.—After the hearing, the Secretary shall make
a ruling on the petition. The ruling shall be final, subject
to review as set forth in subsection (b).
(4) LIMITATION ON PETITION.—Any petition filed under this
subsection challenging an order, any provision of the order,
or any obligation imposed in connection with the order, shall
be filed within 2 years after the effective date of the order,
provision, or obligation subject to challenge in the petition.
(b) REVIEW.—
(1) COMMENCEMENT OF ACTION.—The district court of the
United States for any district in which a person who is a
petitioner under subsection (a) resides or carries on business
shall have jurisdiction to review the final ruling on the petition
of the person, if a complaint for that purpose is filed not
later than 20 days after the date of the entry of the final
ruling by the Secretary under subsection (a)(3).
(2) PROCESS.—Service of process in a proceeding may be
made on the Secretary by delivering a copy of the complaint
to the Secretary.
(3) REMANDS.—If the court determines that the ruling is
not in accordance with law, the court shall remand the matter
to the Secretary with directions—
(A) to make such ruling as the court determines to
be in accordance with law; or
(B) to take such further action as, in the opinion of
the court, the law requires.
(c) EFFECT ON ENFORCEMENT PROCEEDINGS.—The pendency of
a petition filed under subsection (a) or an action commenced under
subsection (b) shall not operate as a stay of any action authorized
by section 520 to be taken to enforce this subtitle, including any
rule, order, or penalty in effect under this subtitle.

Courts.

SEC. 520. ENFORCEMENT.

7 USC 7419.

(a) JURISDICTION.—The district courts of the United States
shall have jurisdiction specifically to enforce, and to prevent and
restrain a person from violating, an order or regulation issued
under this subtitle.
(b) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized
to be brought under this section shall be referred to the Attorney
General for appropriate action, except that the Secretary shall
not be required to refer to the Attorney General a violation of
this subtitle if the Secretary believes that the administration and
enforcement of this subtitle would be adequately served by providing
a suitable written notice or warning to the person who committed
the violation or by an administrative action under this section.
(c) CIVIL PENALTIES AND ORDERS.—
(1) CIVIL PENALTIES.—A person who willfully violates an
order or regulation issued by the Secretary under this Act

Courts.

110 STAT. 1046

PUBLIC LAW 104–127—APR. 4, 1996

may be assessed by the Secretary a civil penalty of not less
than $1,000 and not more than $10,000 for each violation.
(2) SEPARATE OFFENSE.—Each violation and each day during which there is a failure to comply with an order or regulation issued by the Secretary shall be considered to be a separate
offense.
(3) CEASE-AND-DESIST ORDERS.—In addition to, or in lieu
of, a civil penalty, the Secretary may issue an order requiring
a person to cease and desist from violating the order or regulation.
(4) NOTICE AND HEARING.—No order assessing a penalty
or cease-and-desist order may be issued by the Secretary under
this subsection unless the Secretary provides notice and an
opportunity for a hearing on the record with respect to the
violation.
(5) FINALITY.—An order assessing a penalty or a ceaseand-desist order issued under this subsection by the Secretary
shall be final and conclusive unless the person against whom
the order is issued files an appeal from the order with the
United States court of appeals, as provided in subsection (d).
(d) REVIEW BY COURT OF APPEALS.—
(1) IN GENERAL.—A person against whom an order is issued
under subsection (c) may obtain review of the order by—
(A) filing, not later than 30 days after the person
receives notice of the order, a notice of appeal in—
(i) the United States court of appeals for the circuit
in which the person resides or carries on business;
or
(ii) the United States Court of Appeals for the
District of Columbia Circuit; and
(B) simultaneously sending a copy of the notice of
appeal by certified mail to the Secretary.
(2) RECORD.—The Secretary shall file with the court a
certified copy of the record on which the Secretary has determined that the person has committed a violation.
(3) STANDARD OF REVIEW.—A finding of the Secretary under
this section shall be set aside only if the finding is found
to be unsupported by substantial evidence on the record.
(e) FAILURE TO OBEY CEASE-AND-DESIST ORDERS.—A person
who fails to obey a valid cease-and-desist order issued by the
Secretary under this section, after an opportunity for a hearing,
shall be subject to a civil penalty assessed by the Secretary of
not less than $1,000 and not more than $10,000 for each offense.
Each day during which the failure continues shall be considered
to be a separate violation of the cease-and-desist order.
(f) FAILURE TO PAY PENALTIES.—If a person fails to pay a
civil penalty imposed under this section by the Secretary, the Secretary shall refer the matter to the Attorney General for recovery
of the amount assessed in the district court of the United States
for any district in which the person resides or carries on business.
In the action, the validity and appropriateness of the order imposing
the civil penalty shall not be subject to review.
(g) ADDITIONAL REMEDIES.—The remedies provided in this section shall be in addition to, and not exclusive of, other remedies
that may be available.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1047

SEC. 521. INVESTIGATIONS AND POWER TO SUBPOENA.

7 USC 7420.

(a) INVESTIGATIONS.—The Secretary may make such investigations as the Secretary considers necessary—
(1) for the effective administration of this subtitle; or
(2) to determine whether any person subject to this subtitle
has engaged, or is about to engage, in any action that constitutes or will constitute a violation of this subtitle or any
order or regulation issued under this subtitle.
(b) SUBPOENAS, OATHS, AND AFFIRMATIONS.—For the purpose
of any investigation under subsection (a), the Secretary may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence, and require the production of
any records or documents that are relevant to the inquiry. The
attendance of witnesses and the production of records or documents
may be required from any place in the United States.
(c) AID OF COURTS.—In the case of contumacy by, or refusal
to obey a subpoena issued to, any person, the Secretary may invoke
the aid of any court of the United States within the jurisdiction
of which the investigation or proceeding is carried on, or where
the person resides or carries on business, in order to require the
attendance and testimony of the person or the production of records
or documents. The court may issue an order requiring the person
to appear before the Secretary to produce records or documents
or to give testimony regarding the matter under investigation.
(d) CONTEMPT.—Any failure to obey the order of the court
may be punished by the court as a contempt of the court.
(e) PROCESS.—Process in any case under this section may be
served in the judicial district in which the person resides or carries
on business or wherever the person may be found.
SEC. 522. SUSPENSION OR TERMINATION.

7 USC 7421.

(a) MANDATORY SUSPENSION OR TERMINATION.—The Secretary
shall suspend or terminate an order or a provision of an order
if the Secretary finds that an order or a provision of an order
obstructs or does not tend to effectuate the purpose of this subtitle,
or if the Secretary determines that the order or a provision of
an order is not favored by persons voting in a referendum conducted
under section 518.
(b) IMPLEMENTATION OF SUSPENSION OR TERMINATION.—If, as
a result of a referendum conducted under section 518, the Secretary
determines that an order is not approved, the Secretary shall—
(1) not later than 180 days after making the determination,
suspend or terminate, as the case may be, collection of assessments under the order; and
(2) as soon as practicable, suspend or terminate, as the
case may be, activities under the order in an orderly manner.
SEC. 523. AMENDMENTS TO ORDERS.

7 USC 7422.

The provisions of this subtitle applicable to an order shall
be applicable to any amendment to an order, except that section
518 shall not apply to an amendment.
SEC. 524. EFFECT ON OTHER LAWS.

This subtitle shall not affect or preempt any other Federal
or State law authorizing promotion or research relating to an agricultural commodity.

7 USC 7423.

110 STAT. 1048
7 USC 7424.

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 525. REGULATIONS.

The Secretary may issue such regulations as may be necessary
to carry out this subtitle and the power vested in the Secretary
under this subtitle.
7 USC 7425.

SEC. 526. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated such
sums as may be necessary to carry out this subtitle.
(b) LIMITATION ON EXPENDITURES FOR ADMINISTRATIVE
EXPENSES.—Funds appropriated to carry out this subtitle may not
be expended for the payment of expenses incurred by a board
to administer an order.
Canola and
Rapeseed
Research,
Promotion, and
Consumer
Information Act.
7 USC 7401 note.
7 USC 7441.

Subtitle C—Canola and Rapeseed
SEC. 531. SHORT TITLE.

This subtitle may be cited as the ‘‘Canola and Rapeseed
Research, Promotion, and Consumer Information Act’’.
SEC. 532. FINDINGS AND DECLARATION OF POLICY.

(a) FINDINGS.—Congress finds that—
(1) canola and rapeseed products are an important and
nutritious part of the human diet;
(2) the production of canola and rapeseed products plays
a significant role in the economy of the United States in that—
(A) canola and rapeseed products are produced by thousands of canola and rapeseed producers and processed by
numerous processing entities; and
(B) canola and rapeseed products produced in the
United States are consumed by people throughout the
United States and foreign countries;
(3) canola, rapeseed, and canola and rapeseed products
should be readily available and marketed efficiently to ensure
that consumers have an adequate supply of canola and rapeseed
products at a reasonable price;
(4) the maintenance and expansion of existing markets
and development of new markets for canola, rapeseed, and
canola and rapeseed products are vital to the welfare of canola
and rapeseed producers and processors and those persons concerned with marketing canola, rapeseed, and canola and
rapeseed products, as well as to the general economy of the
United States, and are necessary to ensure the ready availability and efficient marketing of canola, rapeseed, and canola
and rapeseed products;
(5) there exist established State and national organizations
conducting canola and rapeseed research, promotion, and
consumer education programs that are valuable to the efforts
of promoting the consumption of canola, rapeseed, and canola
and rapeseed products;
(6) the cooperative development, financing, and
implementation of a coordinated national program of canola
and rapeseed research, promotion, consumer information, and
industry information is necessary to maintain and expand existing markets and develop new markets for canola, rapeseed,
and canola and rapeseed products; and
(7) canola, rapeseed, and canola and rapeseed products
move in interstate and foreign commerce, and canola, rapeseed,

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1049

and canola and rapeseed products that do not move in interstate
or foreign commerce directly burden or affect interstate commerce in canola, rapeseed, and canola and rapeseed products.
(b) POLICY.—It is the policy of this subtitle to establish an
orderly procedure for developing, financing through assessments
on domestically produced canola and rapeseed, and implementing
a program of research, promotion, consumer information, and industry information designed to strengthen the position in the marketplace of the canola and rapeseed industry, to maintain and expand
existing domestic and foreign markets and uses for canola, rapeseed,
and canola and rapeseed products, and to develop new markets
and uses for canola, rapeseed, and canola and rapeseed products.
(c) CONSTRUCTION.—Nothing in this subtitle provides for the
control of production or otherwise limits the right of individual
producers to produce canola, rapeseed, or canola or rapeseed products.
SEC. 533. DEFINITIONS.

In this subtitle (unless the context otherwise requires):
(1) BOARD.—The term ‘‘Board’’ means the National Canola
and Rapeseed Board established under section 535(b).
(2) CANOLA; RAPESEED.—The terms ‘‘canola’’ and ‘‘rapeseed’’
mean any brassica plant grown in the United States for the
production of an oilseed, the oil of which is used for a food
or nonfood use.
(3) CANOLA OR RAPESEED PRODUCT.—The term ‘‘canola or
rapeseed product’’ means a product produced, in whole or in
part, from canola or rapeseed.
(4) COMMERCE.—The term ‘‘commerce’’ includes interstate,
foreign, and intrastate commerce.
(5) CONFLICT OF INTEREST.—The term ‘‘conflict of interest’’
means a situation in which a member of the Board has a
direct or indirect financial interest in a corporation, partnership, sole proprietorship, joint venture, or other business entity
dealing directly or indirectly with the Board.
(6) CONSUMER INFORMATION.—The term ‘‘consumer
information’’ means information that will assist consumers and
other persons in making evaluations and decisions regarding
the purchase, preparation, and use of canola, rapeseed, or
canola or rapeseed products.
(7) DEPARTMENT.—The term ‘‘Department’’ means the
Department of Agriculture.
(8) FIRST PURCHASER.—The term ‘‘first purchaser’’ means—
(A) except as provided in subparagraph (B), a person
who buys or otherwise acquires canola, rapeseed, or canola
or rapeseed products produced by a producer; or
(B) the Commodity Credit Corporation, in a case in
which canola or rapeseed is forfeited to the Commodity
Credit Corporation as collateral for a loan issued under
a price support loan program administered by the Commodity Credit Corporation.
(9) INDUSTRY INFORMATION.—The term ‘‘industry information’’ means information or a program that will lead to the
development of new markets, new marketing strategies, or
increased efficiency for the canola and rapeseed industry, or
an activity to enhance the image of the canola or rapeseed
industry.

7 USC 7442.

110 STAT. 1050

PUBLIC LAW 104–127—APR. 4, 1996
(10) INDUSTRY MEMBER.—The term ‘‘industry member’’
means a member of the canola and rapeseed industry who
represents—
(A) manufacturers of canola or rapeseed products; or
(B) persons who commercially buy or sell canola or
rapeseed.
(11) MARKETING.—The term ‘‘marketing’’ means the sale
or other disposition of canola, rapeseed, or canola or rapeseed
products in a channel of commerce.
(12) ORDER.—The term ‘‘order’’ means an order issued
under section 534.
(13) PERSON.—The term ‘‘person’’ means an individual,
partnership, corporation, association, cooperative, or any other
legal entity.
(14) PRODUCER.—The term ‘‘producer’’ means a person
engaged in the growing of canola or rapeseed in the United
States who owns, or who shares the ownership and risk of
loss of, the canola or rapeseed.
(15) PROMOTION.—The term ‘‘promotion’’ means an action,
including paid advertising, technical assistance, or a trade servicing activity, to enhance the image or desirability of canola,
rapeseed, or canola or rapeseed products in domestic and foreign markets, or an activity designed to communicate to
consumers, processors, wholesalers, retailers, government officials, or other persons information relating to the positive
attributes of canola, rapeseed, or canola or rapeseed products
or the benefits of use or distribution of canola, rapeseed, or
canola or rapeseed products.
(16) RESEARCH.—The term ‘‘research’’ means any type of
test, study, or analysis to advance the image, desirability,
marketability, production, product development, quality, or
functional or nutritional value of canola, rapeseed, or canola
or rapeseed products, including research activity designed to
identify and analyze barriers to export sales of canola or
rapeseed produced in the United States.
(17) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture.
(18) STATE.—The term ‘‘State’’ means any of the 50 States,
the District of Columbia and the Commonwealth of Puerto
Rico.
(19) UNITED STATES.—The term ‘‘United States’’ means
collectively the 50 States, the District of Columbia, and the
Commonwealth of Puerto Rico.

7 USC 7443.

SEC. 534. ISSUANCE AND AMENDMENT OF ORDERS.

(a) IN GENERAL.—Subject to subsection (b), the Secretary shall
issue 1 or more orders under this subtitle applicable to producers
and first purchasers of canola, rapeseed, or canola or rapeseed
products. The order shall be national in scope. Not more than
1 order shall be in effect under this subtitle at any 1 time.
(b) PROCEDURE.—
(1) PROPOSAL OR REQUEST FOR ISSUANCE.—The Secretary
may propose the issuance of an order under this subtitle, or
an association of canola and rapeseed producers or any other
person that would be affected by an order issued pursuant
to this subtitle may request the issuance of, and submit a
proposal for, an order.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1051

(2) NOTICE AND COMMENT CONCERNING PROPOSED ORDER.—
Not later than 60 days after the receipt of a request and
proposal for an order pursuant to paragraph (1), or whenever
the Secretary determines to propose an order, the Secretary
shall publish a proposed order and give due notice and opportunity for public comment on the proposed order.
(3) ISSUANCE OF ORDER.—After notice and opportunity for
public comment are given as provided in paragraph (2), the
Secretary shall issue an order, taking into consideration the
comments received and including in the order provisions necessary to ensure that the order is in conformity with the
requirements of this subtitle. The order shall be issued and
become effective not later than 180 days following publication
of the proposed order.
(c) AMENDMENTS.—The Secretary may amend an order issued
under this section.

Publication.

SEC. 535. REQUIRED TERMS IN ORDERS.

7 USC 7444.

(a) IN GENERAL.—An order issued under this subtitle shall
contain the terms and conditions specified in this section.
(b) ESTABLISHMENT AND MEMBERSHIP OF THE NATIONAL CANOLA
AND RAPESEED BOARD.—
(1) IN GENERAL.—The order shall provide for the establishment of, and appointment of members to, a National Canola
and Rapeseed Board to administer the order.
(2) SERVICE TO ENTIRE INDUSTRY.—The Board shall carry
out programs and projects that will provide maximum benefit
to the canola and rapeseed industry in all parts of the United
States and only promote canola, rapeseed, or canola or rapeseed
products.
(3) BOARD MEMBERSHIP.—The Board shall consist of 15
members, including—
(A) 11 members who are producers, including—
(i) 1 member from each of the 6 geographic regions
comprised of States where canola or rapeseed is produced, as determined by the Secretary; and
(ii) 5 members from the geographic regions
referred to in clause (i), allocated according to the
production in each region; and
(B) 4 members who are industry members, including
at least—
(i) 1 member who represents manufacturers of
canola or rapeseed end products; and
(ii) 1 member who represents persons who commercially buy or sell canola or rapeseed.
(4) LIMITATION ON STATE RESIDENCE.—There shall be no
more than 4 producer members of the Board from any 1 State.
(5) MODIFYING BOARD MEMBERSHIP.—In accordance with
regulations approved by the Secretary, at least once each 3
years and not more than once each 2 years, the Board shall
review the geographic distribution of canola and rapeseed
production throughout the United States and, if warranted,
recommend to the Secretary that the Secretary—
(A) reapportion regions in order to reflect the
geographic distribution of canola and rapeseed production;
and

Effective date.

110 STAT. 1052

PUBLIC LAW 104–127—APR. 4, 1996

(B) reapportion the seats on the Board to reflect the
production in each region.
(6) CERTIFICATION OF ORGANIZATIONS.—
(A) IN GENERAL.—For the purposes of section 536, the
eligibility of any State organization to represent producers
shall be certified by the Secretary.
(B) CRITERIA.—The Secretary shall certify any State
organization that the Secretary determines has a history
of stability and permanency and meets at least 1 of the
following criteria:
(i) MAJORITY REPRESENTATION.—The total paid
membership of the organization—
(I) is comprised of at least a majority of canola
or rapeseed producers; or
(II) represents at least a majority of the canola
or rapeseed producers in the State.
(ii) SUBSTANTIAL NUMBER OF PRODUCERS REPRESENTED.—The organization represents a substantial
number of producers that produce a substantial quantity of canola or rapeseed in the State.
(iii) PURPOSE.—The organization is a general farm
or agricultural organization that has as a stated objective the promotion and development of the United
States canola or rapeseed industry and the economic
welfare of United States canola or rapeseed producers.
(C) REPORT.—The Secretary shall make a certification
under this paragraph on the basis of a factual report
submitted by the State organization.
(7) TERMS OF OFFICE.—
(A) IN GENERAL.—A member of the Board shall serve
for a term of 3 years, except that the members appointed
to the initial Board shall serve, proportionately, for terms
of 1, 2, and 3 years, as determined by the Secretary.
(B) LIMITATION ON TERMS.—No individual may serve
more than 2 consecutive 3-year terms as a member.
(C)
TERMINATION
OF
TERMS.—Notwithstanding
subparagraph (B), each member shall continue to serve
until a successor is appointed by the Secretary.
(8) COMPENSATION.—A member of the Board shall serve
without compensation, but shall be reimbursed for necessary
and reasonable expenses incurred in the performance of duties
for and approved by the Board.
(c) POWERS AND DUTIES OF THE BOARD.—The order shall define
the powers and duties of the Board, which shall include the power
and duty—
(1) to administer the order in accordance with the terms
and conditions of the order;
(2) to issue regulations to effectuate the terms and conditions of the order;
(3) to meet, organize, and select from among members
of the Board a chairperson, other officers, and committees and
subcommittees, as the Board determines appropriate;
(4) to establish working committees of persons other than
Board members;
(5) to employ such persons, other than Board members,
as the Board considers necessary, and to determine the compensation and define the duties of the persons;

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1053

(6) to prepare and submit for the approval of the Secretary,
when appropriate or necessary, a recommended rate of assessment under section 536, and a fiscal period budget of the
anticipated expenses in the administration of the order, including the probable costs of all programs and projects;
(7) to develop programs and projects, subject to subsection
(d);
(8) to enter into contracts or agreements, subject to subsection (e), to develop and carry out programs or projects of
research, promotion, industry information, and consumer
information;
(9) to carry out research, promotion, industry information,
and consumer information projects, and to pay the costs of
the projects with assessments collected under section 536;
(10) to keep minutes, books, and records that reflect the
actions and transactions of the Board, and promptly report
minutes of each Board meeting to the Secretary;
(11) to appoint and convene, from time to time, working
committees comprised of producers, industry members, and
the public to assist in the development of research, promotion,
industry information, and consumer information programs for
canola, rapeseed, and canola and rapeseed products;
(12) to invest, pending disbursement under a program or
project, funds collected through assessments authorized under
section 536, or funds earned from investments, only in—
(A) obligations of the United States or an agency of
the United States;
(B) general obligations of a State or a political subdivision of a State;
(C) an interest-bearing account or certificate of deposit
of a bank that is a member of the Federal Reserve System;
or
(D) obligations fully guaranteed as to principal and
interest by the United States;
(13) to receive, investigate, and report to the Secretary
complaints of violations of the order;
(14) to furnish the Secretary with such information as
the Secretary may request;
(15) to recommend to the Secretary amendments to the
order;
(16) to develop and recommend to the Secretary for
approval such regulations as may be necessary for the development and execution of programs or projects, or as may otherwise
be necessary, to carry out the order; and
(17) to provide the Secretary with advance notice of meetings.
(d) PROGRAMS AND BUDGETS.—
(1) SUBMISSION TO SECRETARY.—The order shall provide
that the Board shall submit to the Secretary for approval
any program or project of research, promotion, consumer
information, or industry information. No program or project
shall be implemented prior to approval by the Secretary.
(2) BUDGETS.—The order shall require the Board, prior
to the beginning of each fiscal year, or as may be necessary
after the beginning of a fiscal year, to submit to the Secretary
for approval budgets of anticipated expenses and disbursements
in the implementation of the order, including projected costs

110 STAT. 1054

Effective date.
Records.
Reports.

Reports.

Reports.

PUBLIC LAW 104–127—APR. 4, 1996
of research, promotion, consumer information, and industry
information programs and projects.
(3) INCURRING EXPENSES.—The Board may incur such
expenses for programs or projects of research, promotion,
consumer information, or industry information, and other
expenses for the administration, maintenance, and functioning
of the Board as may be authorized by the Secretary, including
any implementation, administrative, and referendum costs
incurred by the Department.
(4) PAYING EXPENSES.—The funds to cover the expenses
referred to in paragraph (3) shall be paid by the Board from
assessments collected under section 536 or funds borrowed
pursuant to paragraph (5).
(5) AUTHORITY TO BORROW.—To meet the expenses referred
to in paragraph (3), the Board shall have the authority to
borrow funds, as approved by the Secretary, for capital outlays
and startup costs.
(e) CONTRACTS AND AGREEMENTS.—
(1) IN GENERAL.—To ensure efficient use of funds, the order
shall provide that the Board may enter into a contract or
agreement for the implementation and carrying out of a program or project of canola, rapeseed, or canola or rapeseed
products research, promotion, consumer information, or industry information, including a contract with a producer organization, and for the payment of the costs with funds received
by the Board under the order.
(2) REQUIREMENTS.—A contract or agreement under paragraph (1) shall provide that—
(A) the contracting party shall develop and submit
to the Board a program or project together with a budget
that shall show the estimated costs to be incurred for
the program or project;
(B) the program or project shall become effective on
the approval of the Secretary; and
(C) the contracting party shall keep accurate records
of all transactions, account for funds received and
expended, make periodic reports to the Board of activities
conducted, and make such other reports as the Board or
the Secretary may require.
(3) PRODUCER ORGANIZATIONS.—The order shall provide
that the Board may contract with a producer organization
for any services required in addition to the services described
in paragraph (1). The contract shall include provisions comparable to the provisions required by paragraph (2).
(f) BOOKS AND RECORDS OF THE BOARD.—
(1) IN GENERAL.—The order shall require the Board to—
(A) maintain such books and records (which shall be
available to the Secretary for inspection and audit) as
the Secretary may prescribe;
(B) prepare and submit to the Secretary, from time
to time, such reports as the Secretary may prescribe; and
(C) account for the receipt and disbursement of all
funds entrusted to the Board.
(2) AUDITS.—The Board shall cause the books and records
of the Board to be audited by an independent auditor at the
end of each fiscal year, and a report of the audit to be submitted
to the Secretary.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1055

(g) PROHIBITION.—
(1) IN GENERAL.—Subject to paragraph (2), the Board shall
not engage in any action to, nor shall any funds received
by the Board under this subtitle be used to—
(A) influence legislation or governmental action;
(B) engage in an action that would be a conflict of
interest;
(C) engage in advertising that is false or misleading;
or
(D) engage in promotion that would disparage other
commodities.
(2) ACTION PERMITTED.—Paragraph (1) does not preclude—
(A) the development and recommendation of amendments to the order;
(B) the communication to appropriate government officials of information relating to the conduct, implementation, or results of promotion, research, consumer information, or industry information activities under the order;
or
(C) any action designed to market canola or rapeseed
products directly to a foreign government or political subdivision of a foreign government.
(h) BOOKS AND RECORDS.—
(1) IN GENERAL.—The order shall require that each producer, first purchaser, or industry member shall—
(A) maintain and submit to the Board any reports
considered necessary by the Secretary to ensure compliance
with this subtitle; and
(B) make available during normal business hours, for
inspection by employees of the Board or Secretary, such
books and records as are necessary to carry out this subtitle, including such records as are necessary to verify
any required reports.
(2) CONFIDENTIALITY.—
(A) IN GENERAL.—Except as otherwise provided in this
subtitle, all information obtained from books, records, or
reports required to be maintained under paragraph (1)
shall be kept confidential, and shall not be disclosed to
the public by any person.
(B) DISCLOSURE.—Information referred to in subparagraph (A) may be disclosed to the public if—
(i) the Secretary considers the information relevant;
(ii) the information is revealed in a suit or administrative hearing brought at the direction or on the
request of the Secretary or to which the Secretary
or any officer of the Department is a party; and
(iii) the information relates to this subtitle.
(C) MISCONDUCT.—A knowing disclosure of confidential
information in violation of subparagraph (A) by an officer
or employee of the Board or Department, except as required
by other law or allowed under subparagraph (B) or (D),
shall be considered a violation of this subtitle.
(D) GENERAL STATEMENTS.—Nothing in this paragraph
prohibits—
(i) the issuance of general statements based on
the reports of a number of persons subject to an order

110 STAT. 1056

PUBLIC LAW 104–127—APR. 4, 1996

or statistical data collected from the reports, if the
statements do not identify the information furnished
by any person; or
(ii) the publication, by direction of the Secretary,
of the name of a person violating the order, together
with a statement of the particular provisions of the
order violated by the person.
(3) AVAILABILITY OF INFORMATION FOR LAW ENFORCEMENT.—Information obtained under this subtitle may be made
available to another agency of the Federal Government for
a civil or criminal law enforcement activity if the activity is
authorized by law and if the head of the agency has made
a written request to the Secretary specifying the particular
information desired and the law enforcement activity for which
the information is sought.
(4) PENALTY.—Any person knowingly violating this subsection, on conviction, shall be subject to a fine of not more
than $1,000 or to imprisonment for not more than 1 year,
or both, and if an officer or employee of the Board or the
Department, shall be removed from office or terminated from
employment, as applicable.
(5) WITHHOLDING OF INFORMATION.—Nothing in this subtitle authorizes the withholding of information from Congress.
(i) USE OF ASSESSMENTS.—The order shall provide that the
assessments collected under section 536 shall be used for payment
of the expenses in implementing and administering this subtitle,
with provision for a reasonable reserve, and to cover administrative
costs incurred by the Secretary in implementing and administering
this subtitle.
(j) OTHER TERMS AND CONDITIONS.—The order shall contain
such other terms and conditions, not inconsistent with this subtitle,
as are determined necessary by the Secretary to effectuate this
subtitle.
7 USC 7445.

SEC. 536. ASSESSMENTS.

(a) IN GENERAL.—
(1) FIRST PURCHASERS.—During the effective period of an
order issued pursuant to this subtitle, assessments shall be—
(A) levied on all canola or rapeseed produced in the
United States and marketed; and
(B) deducted from the payment made to a producer
for all canola or rapeseed sold to a first purchaser.
(2) DIRECT PROCESSING.—The order shall provide that any
person processing canola or rapeseed of that person’s own
production and marketing the canola or rapeseed, or canola
or rapeseed products, shall remit to the Board or a State
organization certified to represent producers under section
535(b)(6), in the manner prescribed by the order, an assessment
established at a rate equivalent to the rate provided for under
subsection (d).
(b) LIMITATION ON ASSESSMENTS.—No more than 1 assessment
may be assessed under subsection (a) on any canola or rapeseed
produced (as remitted by a first purchaser).
(c) REMITTING OF ASSESSMENTS.—
(1) IN GENERAL.—Assessments required under subsection
(a) shall be remitted to the Board by a first purchaser. The
Board shall use State organizations certified to represent

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1057

producers under section 535(b)(6) to collect the assessments.
If an appropriate certified State organization does not exist
to collect an assessment, the assessment shall be collected
by the Board. There shall be only 1 certified State organization
in each State.
(2) TIMES TO REMIT ASSESSMENT.—Each first purchaser
shall remit the assessment to the Board as provided for in
the order.
(d) ASSESSMENT RATE.—
(1) INITIAL RATE.—The initial assessment rate shall be
4 cents per hundredweight of canola or rapeseed produced
and marketed.
(2) INCREASE.—The assessment rate may be increased on
recommendation by the Board to a rate not exceeding 10 cents
per hundredweight of canola or rapeseed produced and marketed in a State, unless—
(A) after the initial referendum is held under section
537(a), the Board recommends an increase above 10 cents
per hundredweight; and
(B) the increase is approved in a referendum under
section 537(b).
(3) CREDIT.—A producer who demonstrates to the Board
that the producer is participating in a program of a State
organization certified to represent producers under section
535(b)(6) shall receive credit, in determining the assessment
due from the producer, for contributions to the program of
up to 2 cents per hundredweight of canola or rapeseed marketed.
(e) LATE PAYMENT CHARGE.—
(1) IN GENERAL.—There shall be a late payment charge
imposed on any person who fails to remit, on or before the
date provided for in the order, to the Board the total amount
for which the person is liable.
(2) AMOUNT OF CHARGE.—The amount of the late payment
charge imposed under paragraph (1) shall be prescribed by
the Board with the approval of the Secretary.
(f) REFUND OF ASSESSMENTS FROM ESCROW ACCOUNT.—
(1) ESTABLISHMENT OF ESCROW ACCOUNT.—During the
period beginning on the date on which an order is first issued
under section 534(b)(3) and ending on the date on which a
referendum is conducted under section 537(a), the Board shall—
(A) establish and maintain an escrow account to be
used for assessment refunds; and
(B) place funds in the account in accordance with paragraph (2).
(2) PLACEMENT OF FUNDS IN ACCOUNT.—The Board shall
place in the account, from assessments collected during the
period referred to in paragraph (1), an amount equal to the
product obtained by multiplying the total amount of assessments collected during the period by 10 percent.
(3) RIGHT TO RECEIVE REFUND.—The Board shall refund
to a producer the assessments paid by or on behalf of the
producer if—
(A) the producer is required to pay the assessment;
(B) the producer does not support the program established under this subtitle; and

110 STAT. 1058

PUBLIC LAW 104–127—APR. 4, 1996
(C) the producer demands the refund prior to the conduct of the referendum under section 537(a).
(4) FORM OF DEMAND.—The demand shall be made in
accordance with such regulations, in such form, and within
such time period as prescribed by the Board.
(5) MAKING OF REFUND.—The refund shall be made on
submission of proof satisfactory to the Board that the producer
paid the assessment for which the refund is demanded.
(6) PRORATION.—If—
(A) the amount in the escrow account required by
paragraph (1) is not sufficient to refund the total amount
of assessments demanded by eligible producers; and
(B) the order is not approved pursuant to the referendum conducted under section 537(a);
the Board shall prorate the amount of the refunds among
all eligible producers who demand a refund.
(7) PROGRAM APPROVED.—If the plan is approved pursuant
to the referendum conducted under section 537(a), all funds
in the escrow account shall be returned to the Board for use
by the Board in accordance with this subtitle.

7 USC 7446.

Termination
date.

SEC. 537. REFERENDA.

(a) INITIAL REFERENDUM.—
(1) REQUIREMENT.—During the period ending 30 months
after the date on which an order is first issued under section
534(b)(3), the Secretary shall conduct a referendum among
producers who, during a representative period as determined
by the Secretary, have been engaged in the production of canola
or rapeseed for the purpose of ascertaining whether the order
then in effect shall be continued.
(2) ADVANCE NOTICE.—The Secretary shall, to the extent
practicable, provide broad public notice in advance of any referendum. The notice shall be provided, without advertising
expenses, by means of newspapers, county newsletters, the
electronic media, and press releases, through the use of notices
posted in State and county Cooperative State Research, Education, and Extension Service offices and county Consolidated
Farm Service Agency offices, and by other appropriate means
specified in the order. The notice shall contain information
on when the referendum will be held, registration and voting
requirements, rules regarding absentee voting, and other pertinent information.
(3) APPROVAL OF ORDER.—The order shall be continued
only if the Secretary determines that the order has been
approved by not less than a majority of the producers voting
in the referendum.
(4) DISAPPROVAL OF ORDER.—If continuation of the order
is not approved by a majority of the producers voting in the
referendum, the Secretary shall terminate collection of assessments under the order within 180 days after the referendum
and shall terminate the order in an orderly manner as soon
as practicable.
(b) ADDITIONAL REFERENDA.—
(1) IN GENERAL.—
(A) REQUIREMENT.—After the initial referendum on an
order, the Secretary shall conduct additional referenda,
as described in subparagraph (C), if requested by a rep-

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1059

resentative group of producers, as described in subparagraph (B).
(B) REPRESENTATIVE GROUP OF PRODUCERS.—An additional referendum on an order shall be conducted if
requested by 10 percent or more of the producers who,
during a representative period as determined by the Secretary, have been engaged in the production of canola
or rapeseed.
(C) ELIGIBLE PRODUCERS.—Each additional referendum
shall be conducted among all producers who, during a
representative period as determined by the Secretary, have
been engaged in the production of canola or rapeseed to
determine whether the producers favor the termination
or suspension of the order.
(2) DISAPPROVAL OF ORDER.—If the Secretary determines,
in a referendum conducted under paragraph (1), that suspension or termination of the order is favored by a majority of
the producers voting in the referendum, the Secretary shall
suspend or terminate, as appropriate, collection of assessments
under the order within 180 days after the determination, and
shall suspend or terminate the order, as appropriate, in an
orderly manner as soon as practicable after the determination.
(3) OPPORTUNITY TO REQUEST ADDITIONAL REFERENDA.—
(A) IN GENERAL.—Beginning on the date that is 5 years
after the conduct of a referendum under this subtitle, and
every 5 years thereafter, the Secretary shall provide canola
and rapeseed producers an opportunity to request an additional referendum.
(B) METHOD OF MAKING REQUEST.—
(i) IN-PERSON REQUESTS.—To carry out subparagraph (A), the Secretary shall establish a procedure
under which a producer may make a request for a
reconfirmation referendum in person at a county
Cooperative State Research, Education, and Extension
Service office or a county Consolidated Farm Service
Agency office during a period established by the Secretary, or as provided in clause (ii).
(ii) MAIL-IN REQUESTS.—In lieu of making a
request in person, a producer may make a request
by mail. To facilitate the submission of requests by
mail, the Secretary may make mail-in request forms
available to producers.
(C) NOTIFICATIONS.—The Secretary shall publish a
notice in the Federal Register, and the Board shall provide
written notification to producers, not later than 60 days
prior to the end of the period established under subparagraph (B)(i) for an in-person request, of the opportunity
of producers to request an additional referendum. The
notification shall explain the right of producers to an additional referendum, the procedure for a referendum, the
purpose of a referendum, and the date and method by
which producers may act to request an additional referendum under this paragraph. The Secretary shall take such
other action as the Secretary determines is necessary to
ensure that producers are made aware of the opportunity
to request an additional referendum.

Termination
date.

Federal Register,
publication.

110 STAT. 1060

PUBLIC LAW 104–127—APR. 4, 1996
(D) ACTION BY SECRETARY.—As soon as practicable following the submission of a request for an additional referendum, the Secretary shall determine whether a sufficient number of producers have requested the referendum,
and take such steps as are necessary to conduct the referendum, as required under paragraph (1).
(E) TIME LIMIT.—An additional referendum requested
under the procedures provided in this paragraph shall be
conducted not later than 1 year after the Secretary determines that a representative group of producers, as
described in paragraph (1)(B), have requested the conduct
of the referendum.
(c) PROCEDURES.—
(1) REIMBURSEMENT OF SECRETARY.—The Secretary shall
be reimbursed from assessments collected by the Board for
any expenses incurred by the Secretary in connection with
the conduct of an activity required under this section.
(2) DATE.—Each referendum shall be conducted for a
reasonable period of time not to exceed 3 days, established
by the Secretary, under a procedure under which producers
intending to vote in the referendum shall certify that the
producers were engaged in the production of canola, rapeseed,
or canola or rapeseed products during the representative period
and, at the same time, shall be provided an opportunity to
vote in the referendum.
(3) PLACE.—Referenda under this section shall be conducted
at locations determined by the Secretary. On request, absentee
mail ballots shall be furnished by the Secretary in a manner
prescribed by the Secretary.

7 USC 7447.

Courts.

SEC. 538. PETITION AND REVIEW.

(a) PETITION.—
(1) IN GENERAL.—A person subject to an order issued under
this subtitle may file with the Secretary a petition—
(A) stating that the order, a provision of the order,
or an obligation imposed in connection with the order is
not established in accordance with law; and
(B) requesting a modification of the order or an exemption from the order.
(2) HEARINGS.—The petitioner shall be given the opportunity for a hearing on a petition filed under paragraph (1),
in accordance with regulations issued by the Secretary.
(3) RULING.—After a hearing under paragraph (2), the Secretary shall issue a ruling on the petition that is the subject
of the hearing, which shall be final if the ruling is in accordance
with applicable law.
(4) LIMITATION ON PETITION.—Any petition filed under this
subtitle challenging an order, or any obligation imposed in
connection with an order, shall be filed not later than 2 years
after the effective date of the order or imposition of the obligation.
(b) REVIEW.—
(1) COMMENCEMENT OF ACTION.—The district court of the
United States for any district in which the person who is
a petitioner under subsection (a) resides or carries on business
shall have jurisdiction to review a ruling on the petition, if
a complaint is filed by the person not later than 20 days

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1061

after the date of the entry of a ruling by the Secretary under
subsection (a)(3).
(2) PROCESS.—Service of process in a proceeding under
paragraph (1) shall be conducted in accordance with the Federal
Rules of Civil Procedure.
(3) REMANDS.—If the court determines, under paragraph
(1), that a ruling issued under subsection (a)(3) is not in accordance with applicable law, the court shall remand the matter
to the Secretary with directions either—
(A) to make such ruling as the court shall determine
to be in accordance with law; or
(B) to take such further proceedings as, in the opinion
of the court, the law requires.
(4) ENFORCEMENT.—The pendency of proceedings instituted
under subsection (a) shall not impede, hinder, or delay the
Attorney General or the Secretary from taking any action under
section 539.
SEC. 539. ENFORCEMENT.

(a) JURISDICTION.—The district courts of the United States
are vested with jurisdiction specifically to enforce, and to prevent
and restrain any person from violating, an order or regulation
made or issued under this subtitle.
(b) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized
to be commenced under this section shall be referred to the Attorney
General for appropriate action, except that the Secretary shall
not be required to refer to the Attorney General a violation of
this subtitle if the Secretary believes that the administration and
enforcement of this subtitle would be adequately served by providing
a suitable written notice or warning to the person committing
the violation or by administrative action under subsection (c).
(c) CIVIL PENALTIES AND ORDERS.—
(1) CIVIL PENALTIES.—
(A) IN GENERAL.—Any person who willfully violates
any provision of an order or regulation issued by the Secretary under this subtitle, or who fails or refuses to pay,
collect, or remit an assessment or fee required of the person
under an order or regulation, may be assessed—
(i) a civil penalty by the Secretary of not more
than $1,000 for each violation; and
(ii) in the case of a willful failure to pay, collect,
or remit an assessment as required by an order or
regulation, an additional penalty equal to the amount
of the assessment.
(B) SEPARATE OFFENSE.—Each violation under
subparagraph (A) shall be a separate offense.
(2) CEASE-AND-DESIST ORDERS.—In addition to, or in lieu
of, a civil penalty under paragraph (1), the Secretary may
issue an order requiring a person to cease and desist from
continuing a violation.
(3) NOTICE AND HEARING.—No penalty shall be assessed,
or cease-and-desist order issued, by the Secretary under this
subsection unless the person against whom the penalty is
assessed or the cease-and-desist order is issued is given notice
and opportunity for a hearing before the Secretary with respect
to the violation.

Courts.
7 USC 7448.

110 STAT. 1062

PUBLIC LAW 104–127—APR. 4, 1996

(4) FINALITY.—The order of the Secretary assessing a penalty or imposing a cease-and-desist order under this subsection
shall be final and conclusive unless the affected person files
an appeal of the order in the appropriate district court of
the United States in accordance with subsection (d).
(d) REVIEW BY DISTRICT COURT.—
(1) COMMENCEMENT OF ACTION.—Any person who has been
determined to be in violation of this subtitle, or against whom
a civil penalty has been assessed or a cease-and-desist order
issued under subsection (c), may obtain review of the penalty
or cease-and-desist order by—
(A) filing, within the 30-day period beginning on the
date the penalty is assessed or cease-and-desist order
issued, a notice of appeal in—
(i) the district court of the United States for the
district in which the person resides or carries on business; or
(ii) the United States District Court for the District
of Columbia; and
(B) simultaneously sending a copy of the notice by
certified mail to the Secretary.
(2) RECORD.—The Secretary shall file promptly, in the
appropriate court referred to in paragraph (1), a certified copy
of the record on which the Secretary determined that the person
committed the violation.
(3) STANDARD OF REVIEW.—A finding of the Secretary under
this section shall be set aside only if the finding is found
to be unsupported by substantial evidence.
(e) FAILURE TO OBEY CEASE-AND-DESIST ORDERS.—Any person
who fails to obey a cease-and-desist order issued under this section
after the cease-and-desist order has become final and unappealable,
or after the appropriate United States district court has entered
a final judgment in favor of the Secretary, shall be subject to
a civil penalty assessed by the Secretary, after opportunity for
a hearing and for judicial review under the procedures specified
in subsections (c) and (d), of not more than $5,000 for each offense.
Each day during which the failure continues shall be considered
as a separate violation of the cease-and-desist order.
(f) FAILURE TO PAY PENALTIES.—If a person fails to pay an
assessment of a civil penalty under this section after the assessment
has become a final and unappealable order, or after the appropriate
United States district court has entered final judgment in favor
of the Secretary, the Secretary shall refer the matter to the Attorney
General for recovery of the amount assessed in the district court
of the United States for any district in which the person resides
or carries on business. In an action for recovery, the validity and
appropriateness of the final order imposing the civil penalty shall
not be subject to review.
(g) ADDITIONAL REMEDIES.—The remedies provided in this subtitle shall be in addition to, and not exclusive of, other remedies
that may be available.
7 USC 7449.

SEC. 540. INVESTIGATIONS AND POWER TO SUBPOENA.

(a) INVESTIGATIONS.—The Secretary may make such investigations as the Secretary considers necessary—
(1) for the effective administration of this subtitle; and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1063

(2) to determine whether any person has engaged or is
engaging in an act that constitutes a violation of this subtitle,
or an order, rule, or regulation issued under this subtitle.
(b) SUBPOENAS, OATHS, AND AFFIRMATIONS.—
(1) IN GENERAL.—For the purpose of an investigation under
subsection (a), the Secretary may administer oaths and affirmations, subpoena witnesses, take evidence, and issue subpoenas
to require the production of any records that are relevant
to the inquiry. The attendance of witnesses and the production
of records may be required from any place in the United States.
(2) ADMINISTRATIVE HEARINGS.—For the purpose of an
administrative hearing held under section 538 or 539, the
presiding officer is authorized to administer oaths and affirmations, subpoena and compel the attendance of witnesses, take
evidence, and require the production of any records that are
relevant to the inquiry. The attendance of witnesses and the
production of records may be required from any place in the
United States.
(c) AID OF COURTS.—In the case of contumacy by, or refusal
to obey a subpoena issued to, any person, the Secretary may invoke
the aid of any court of the United States within the jurisdiction
of which the investigation or proceeding is carried on, or where
the person resides or carries on business, in order to enforce a
subpoena issued by the Secretary under subsection (b). The court
may issue an order requiring the person to comply with the subpoena.
(d) CONTEMPT.—A failure to obey an order of the court under
this section may be punished by the court as contempt of the
court.
(e) PROCESS.—Process may be served on a person in the judicial
district in which the person resides or carries on business or wherever the person may be found.
(f) HEARING SITE.—The site of a hearing held under section
538 or 539 shall be in the judicial district where the person affected
by the hearing resides or has a principal place of business.
SEC. 541. SUSPENSION OR TERMINATION.

7 USC 7450.

The Secretary shall, whenever the Secretary finds that an
order or a provision of an order obstructs or does not tend to
effectuate the declared policy of this subtitle, suspend or terminate
the operation of the order or provision. The suspension or termination of an order shall not be considered an order within the
meaning of this subtitle.
SEC. 542. REGULATIONS.

7 USC 7451.

The Secretary may issue such regulations as are necessary
to carry out this subtitle.
SEC. 543. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—There are authorized to be appropriated for
each fiscal year such sums as are necessary to carry out this
subtitle.
(b) ADMINISTRATIVE EXPENSES.—Funds appropriated under subsection (a) shall not be available for payment of the expenses
or expenditures of the Board in administering a provision of an
order issued under this subtitle.

7 USC 7452.

110 STAT. 1064

PUBLIC LAW 104–127—APR. 4, 1996

Subtitle D—Kiwifruit

National
Kiwifruit
Research,
Promotion, and
Consumer
Information Act.
7 USC 7401 note.

SEC. 551. SHORT TITLE.

7 USC 7461.

SEC. 552. FINDINGS AND PURPOSES.

This subtitle may be cited as the ‘‘National Kiwifruit Research,
Promotion, and Consumer Information Act’’.
(a) FINDINGS.—Congress finds that—
(1) domestically produced kiwifruit are grown by many
individual producers;
(2) virtually all domestically produced kiwifruit are grown
in the State of California, although there is potential for production in many other areas of the United States;
(3) kiwifruit move in interstate and foreign commerce, and
kiwifruit that do not move in channels of commerce directly
burden or affect interstate commerce;
(4) in recent years, large quantities of kiwifruit have been
imported into the United States;
(5) the maintenance and expansion of existing domestic
and foreign markets for kiwifruit, and the development of additional and improved markets for kiwifruit, are vital to the
welfare of kiwifruit producers and other persons concerned
with producing, marketing, and processing kiwifruit;
(6) a coordinated program of research, promotion, and
consumer information regarding kiwifruit is necessary for the
maintenance and development of the markets; and
(7) kiwifruit producers, handlers, and importers are unable
to implement and finance such a program without cooperative
action.
(b) PURPOSES.—The purposes of this subtitle are—
(1) to authorize the establishment of an orderly procedure
for the development and financing (through an assessment)
of an effective and coordinated program of research, promotion,
and consumer information regarding kiwifruit;
(2) to use the program to strengthen the position of the
kiwifruit industry in domestic and foreign markets and maintain, develop, and expand markets for kiwifruit; and
(3) to treat domestically produced kiwifruit and imported
kiwifruit equitably.

7 USC 7462.

SEC. 553. DEFINITIONS.

In this subtitle (unless the context otherwise requires):
(1) BOARD.—The term ‘‘Board’’ means the National
Kiwifruit Board established under section 555.
(2) CONSUMER INFORMATION.—The term ‘‘consumer
information’’ means any action taken to provide information
to, and broaden the understanding of, the general public regarding the consumption, use, nutritional attributes, and care of
kiwifruit.
(3) EXPORTER.—The term ‘‘exporter’’ means any person
from outside the United States who exports kiwifruit into the
United States.
(4) HANDLER.—The term ‘‘handler’’ means any person,
excluding a common carrier, engaged in the business of buying
and selling, packing, marketing, or distributing kiwifruit as
specified in the order.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1065

(5) IMPORTER.—The term ‘‘importer’’ means any person who
imports kiwifruit into the United States.
(6) KIWIFRUIT.—The term ‘‘kiwifruit’’ means all varieties
of fresh kiwifruit grown in or imported into the United States.
(7) MARKETING.—The term ‘‘marketing’’ means the sale
or other disposition of kiwifruit into interstate, foreign, or intrastate commerce by buying, marketing, distribution, or otherwise
placing kiwifruit into commerce.
(8) ORDER.—The term ‘‘order’’ means a kiwifruit research,
promotion, and consumer information order issued by the Secretary under section 554.
(9) PERSON.—The term ‘‘person’’ means any individual,
group of individuals, partnership, corporation, association,
cooperative, or other legal entity.
(10) PROCESSING.—The term ‘‘processing’’ means canning,
fermenting, distilling, extracting, preserving, grinding, crushing, or in any manner changing the form of kiwifruit for the
purpose of preparing the kiwifruit for market or marketing
the kiwifruit.
(11) PRODUCER.—The term ‘‘producer’’ means any person
who grows kiwifruit in the United States for sale in commerce.
(12) PROMOTION.—The term ‘‘promotion’’ means any action
taken under this subtitle (including paid advertising) to present
a favorable image of kiwifruit to the general public for the
purpose of improving the competitive position of kiwifruit and
stimulating the sale of kiwifruit.
(13) RESEARCH.—The term ‘‘research’’ means any type of
research relating to the use, nutritional value, and marketing
of kiwifruit conducted for the purpose of advancing the image,
desirability, marketability, or quality of kiwifruit.
(14) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture.
(15) UNITED STATES.—The term ‘‘United States’’ means the
50 States of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
SEC. 554. ISSUANCE OF ORDERS.

(a) ISSUANCE.—To effectuate the purposes of this subtitle specified in section 552(b), the Secretary shall issue an order applicable
to producers, handlers, and importers of kiwifruit. Any such order
shall be national in scope. Not more than 1 order shall be in
effect under this subtitle at any 1 time.
(b) PROCEDURE.—
(1) PROPOSAL FOR ISSUANCE OF ORDER.—Any person that
will be affected by this subtitle may request the issuance of,
and submit a proposal for, an order under this subtitle.
(2) PROPOSED ORDER.—Not later than 90 days after the
receipt of a request and proposal for an order, the Secretary
shall publish a proposed order and give due notice and opportunity for public comment on the proposed order.
(3) ISSUANCE OF ORDER.—After notice and opportunity for
public comment are provided under paragraph (2), the Secretary
shall issue an order, taking into consideration the comments
received and including in the order provisions necessary to
ensure that the order is in conformity with this subtitle.

7 USC 7463.

Publication.

110 STAT. 1066

PUBLIC LAW 104–127—APR. 4, 1996

(c) AMENDMENTS.—The Secretary may amend any order issued
under this section. The provisions of this subtitle applicable to
an order shall be applicable to an amendment to an order.
7 USC 7464.

SEC. 555. NATIONAL KIWIFRUIT BOARD.

(a) MEMBERSHIP.—An order issued by the Secretary under section 554 shall provide for the establishment of a National Kiwifruit
Board that consists of the following 11 members:
(1) 6 members who are producers (or representatives of
producers) and who are not exempt from an assessment under
section 556(b).
(2) 4 members who are importers (or representatives of
importers) and who are not exempt from an assessment under
section 556(b) or are exporters (or representatives of exporters).
(3) 1 member appointed from the general public.
(b) ADJUSTMENT OF MEMBERSHIP.—
(1) IN GENERAL.—Subject to the 11-member limit and to
paragraph (2), the Secretary may adjust membership on the
Board to accommodate changes in production and import levels
of kiwifruit.
(2) NUMBER OF PRODUCER MEMBERS.—Producers shall comprise not less than 51 percent of the membership of the Board.
(c) APPOINTMENT AND NOMINATION.—
(1) APPOINTMENT.—The Secretary shall appoint the members of the Board from nominations submitted in accordance
with this subsection.
(2) PRODUCERS.—The members referred to in subsection
(a)(1) shall be appointed from individuals nominated by producers.
(3) IMPORTERS AND EXPORTERS.—The members referred to
in subsection (a)(2) shall be appointed from individuals nominated by importers or exporters.
(4) PUBLIC REPRESENTATIVE.—The public representative
shall be appointed from nominations submitted by other members of the Board.
(5) FAILURE TO NOMINATE.—If producers, importers, and
exporters fail to nominate individuals for appointment, the
Secretary may appoint members and alternates on a basis
provided for in the order. If the Board fails to nominate a
public representative, the member may be appointed by the
Secretary without a nomination.
(d) ALTERNATES.—The Secretary shall appoint an alternate for
each member of the Board. An alternate shall—
(1) be appointed in the same manner as the member for
whom the individual is an alternate; and
(2) serve on the Board if the member is absent from a
meeting or is disqualified under subsection (f).
(e) TERMS.—A member of the Board shall be appointed for
a term of 3 years. No member may serve more than 2 consecutive
3-year terms, except that of the members first appointed—
(1) 5 members shall be appointed for a term of 2 years;
and
(2) 6 members shall be appointed for a term of 3 years.
(f) DISQUALIFICATION.—If a member or alternate of the Board
who was appointed as a producer, importer, exporter, or public
representative member ceases to belong to the group for which

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1067

the member was appointed, the member or alternate shall be disqualified from serving on the Board.
(g) COMPENSATION.—A member or alternate of the Board shall
serve without pay.
(h) GENERAL POWERS AND DUTIES.—The Board shall—
(1) administer an order issued by the Secretary under
section 554, and an amendment to the order, in accordance
with the order and amendment and this subtitle;
(2) prescribe rules and regulations to carry out the order;
(3) meet, organize, and select from among members of
the Board a chairperson, other officers, and committees and
subcommittees, as the Board determines appropriate;
(4) receive, investigate, and report to the Secretary accounts
of violations of the order;
(5) make recommendations to the Secretary with respect
to an amendment that should be made to the order; and
(6) employ or contract with a manager and staff to assist
in administering the order, except that, to reduce administrative costs and increase efficiency, the Board shall seek, to
the extent practicable, to employ or contract with personnel
who are already associated with organizations involved in
promoting kiwifruit that are chartered by a State, the District
of Columbia, or the Commonwealth of Puerto Rico.
SEC. 556. REQUIRED TERMS IN ORDER.

(a) BUDGETS AND PLANS.—
(1) IN GENERAL.—An order issued under section 554 shall
provide for periodic budgets and plans in accordance with this
subsection.
(2) BUDGETS.—The Board shall prepare and submit to the
Secretary a budget prior to the beginning of the fiscal year
of the anticipated expenses and disbursements of the Board
in the administration of the order, including probable costs
of research, promotion, and consumer information. A budget
shall become effective on a 2⁄3-vote of a quorum of the Board
and approval by the Secretary.
(3) PLANS.—Each budget shall include a plan for research,
promotion, and consumer information regarding kiwifruit. A
plan under this paragraph shall become effective on approval
by the Secretary. The Board may enter into contracts and
agreements, on approval by the Secretary, for—
(A) the development and carrying out of the plan;
and
(B) the payment of the cost of the plan, with funds
collected pursuant to this subtitle.
(b) ASSESSMENTS.—
(1) IN GENERAL.—The order shall provide for the imposition
and collection of assessments with regard to the production
and importation of kiwifruit in accordance with this subsection.
(2) RATE.—The assessment rate shall be the rate that
is recommended by a 2⁄3-vote of a quorum of the Board and
approved by the Secretary, except that the rate shall not exceed
$0.10 per 7-pound tray of kiwifruit or an equivalent rate.
(3) COLLECTION BY FIRST HANDLERS.—Except as provided
in paragraph (5), the first handler of kiwifruit shall—

Regulations.

7 USC 7465.

110 STAT. 1068

PUBLIC LAW 104–127—APR. 4, 1996
(A) be responsible for the collection from the producer,
and payment to the Board, of assessments required under
this subsection; and
(B) maintain a separate record of the kiwifruit of each
producer whose kiwifruit are so handled, including the
kiwifruit owned by the handler.
(4) IMPORTERS.—The assessment on imported kiwifruit
shall be paid by the importer to the United States Customs
Service at the time of entry into the United States and shall
be remitted to the Board.
(5) EXEMPTION FROM ASSESSMENT.—The following persons
or activities are exempt from an assessment under this subsection:
(A) A producer who produces less than 500 pounds
of kiwifruit per year.
(B) An importer who imports less than 10,000 pounds
of kiwifruit per year.
(C) A sale of kiwifruit made directly from the producer
to a consumer for a purpose other than resale.
(D) The production or importation of kiwifruit for
processing.
(6) CLAIM OF EXEMPTION.—To claim an exemption under
paragraph (5) for a particular year, a person shall—
(A) submit an application to the Board stating the
basis for the exemption and certifying that the quantity
of kiwifruit produced, imported, or sold by the person will
not exceed any poundage limitation required for the exemption in the year; or
(B) be on a list of approved processors developed by
the Board.
(c) USE OF ASSESSMENTS.—
(1) AUTHORIZED USES.—The order shall provide that funds
paid to the Board as assessments under subsection (b) may
be used by the Board—
(A) to pay for research, promotion, and consumer
information described in the budget of the Board under
subsection (a) and for other expenses incurred by the Board
in the administration of an order;
(B) to pay such other expenses for the administration,
maintenance, and functioning of the Board (including any
enforcement efforts for the collection of assessments) as
may be authorized by the Secretary, including interest
and penalties for late payments; and
(C) to fund a reserve established under section 557(d).
(2) REQUIRED USES.—The order shall provide that funds
paid to the Board as assessments under subsection (b) shall
be used by the Board—
(A) to pay the expenses incurred by the Secretary,
including salaries and expenses of Federal Government
employees, in implementing and administering the order;
and
(B) to reimburse the Secretary for any expenses
incurred by the Secretary in conducting referenda under
this subtitle.
(3) LIMITATION ON USE OF ASSESSMENTS.—Except for the
first year of operation of the Board, expenses for the administra-

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110 STAT. 1069

tion, maintenance, and functioning of the Board may not exceed
30 percent of the budget for a year.
(d) FALSE CLAIMS.—The order shall provide that any promotion
funded with assessments collected under subsection (b) may not
make—
(1) any false claims on behalf of kiwifruit; and
(2) any false statements with respect to the attributes
or use of any product that competes with kiwifruit for sale
in commerce.
(e) PROHIBITION ON USE OF FUNDS.—The order shall provide
that funds collected by the Board under this subtitle through assessments may not, in any manner, be used for the purpose of influencing legislation or governmental policy or action, except for making
recommendations to the Secretary as provided for under this subtitle.
(f) BOOKS, RECORDS, AND REPORTS.—
(1) BOARD.—The order shall require the Board—
(A) to maintain books and records with respect to
the receipt and disbursement of funds received by the
Board;
(B) to submit to the Secretary from time to time such
reports as the Secretary may require for appropriate
accounting; and
(C) to submit to the Secretary at the end of each
fiscal year a complete audit report by an independent auditor regarding the activities of the Board during the fiscal
year.
(2) OTHERS.—To make information and data available to
the Board and the Secretary that is appropriate or necessary
for the effectuation, administration, or enforcement of this subtitle (or any order or regulation issued under this subtitle),
the order shall require handlers and importers who are responsible for the collection, payment, or remittance of assessments
under subsection (b)—
(A) to maintain and make available for inspection by
the employees and agents of the Board and the Secretary
such books and records as may be required by the order;
and
(B) to file, at the times and in the manner and content
prescribed by the order, reports regarding the collection,
payment, or remittance of the assessments.
(g) CONFIDENTIALITY.—
(1) IN GENERAL.—The order shall require that all information obtained pursuant to subsection (f)(2) be kept confidential
by all officers, employees, and agents of the Department of
Agriculture and of the Board. Only such information as the
Secretary considers relevant shall be disclosed to the public
and only in a suit or administrative hearing, brought at the
request of the Secretary or to which the Secretary or any
officer of the United States is a party, involving the order
with respect to which the information was furnished or
acquired.
(2) LIMITATIONS.—Nothing in this subsection prohibits—
(A) the issuance of general statements based on the
reports of a number of handlers and importers subject
to an order, if the statements do not identify the information furnished by any person; or

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PUBLIC LAW 104–127—APR. 4, 1996

(B) the publication, by direction of the Secretary, of
the name of any person violating an order issued under
section 554(a), together with a statement of the particular
provisions of the order violated by the person.
(3) PENALTY.—Any person who willfully violates this subsection, on conviction, shall be subject to a fine of not more
than $1,000 or to imprisonment for not more than 1 year,
or both, and, if the person is a member, officer, or agent
of the Board or an employee of the Department of Agriculture,
shall be removed from office.
(h) WITHHOLDING OF INFORMATION.—Nothing in this subtitle
authorizes the withholding of information from Congress.
7 USC 7466.

SEC. 557. PERMISSIVE TERMS IN ORDER.

(a) PERMISSIVE TERMS.—On the recommendation of the Board
and with the approval of the Secretary, an order issued under
section 554 may include the terms and conditions specified in this
section and such additional terms and conditions as the Secretary
considers necessary to effectuate the other provisions of the order
and are incidental to, and not inconsistent with, this subtitle.
(b) ALTERNATIVE PAYMENT AND REPORTING SCHEDULES.—The
order may authorize the Board to designate different handler payment and reporting schedules to recognize differences in marketing
practices and procedures.
(c) WORKING GROUPS.—The order may authorize the Board
to convene working groups drawn from producers, handlers, importers, exporters, or the general public and utilize the expertise of
the groups to assist in the development of research and marketing
programs for kiwifruit.
(d) RESERVE FUNDS.—The order may authorize the Board to
accumulate reserve funds from assessments collected pursuant to
section 556(b) to permit an effective and continuous coordinated
program of research, promotion, and consumer information in years
in which production and assessment income may be reduced, except
that any reserve fund may not exceed the amount budgeted for
operation of this subtitle for 1 year.
(e) PROMOTION ACTIVITIES OUTSIDE UNITED STATES.—The order
may authorize the Board to use, with the approval of the Secretary,
funds collected under section 556(b) and funds from other sources
for the development and expansion of sales in foreign markets
of kiwifruit produced in the United States.
7 USC 7467.

SEC. 558. PETITION AND REVIEW.

(a) PETITION.—
(1) IN GENERAL.—A person subject to an order may file
with the Secretary a petition—
(A) stating that the order, a provision of the order,
or an obligation imposed in connection with the order is
not in accordance with law; and
(B) requesting a modification of the order or an exemption from the order.
(2) HEARINGS.—A person submitting a petition under paragraph (1) shall be given an opportunity for a hearing on the
petition, in accordance with regulations issued by the Secretary.
(3) RULING.—After the hearing, the Secretary shall issue
a ruling on the petition which shall be final if the petition
is in accordance with law.

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110 STAT. 1071

(4) LIMITATION ON PETITION.—Any petition filed under this
subtitle challenging an order, or any obligation imposed in
connection with an order, shall be filed not later than 2 years
after the effective date of the order or imposition of the obligation.
(b) REVIEW.—
(1) COMMENCEMENT OF ACTION.—The district court of the
United States for any district in which the person who is
a petitioner under subsection (a) resides or carries on business
is vested with jurisdiction to review the ruling on the petition
of the person, if a complaint for that purpose is filed not
later than 20 days after the date of the entry of a ruling
by the Secretary under subsection (a).
(2) PROCESS.—Service of process in the proceedings shall
be conducted in accordance with the Federal Rules of Civil
Procedure.
(3) REMANDS.—If the court determines that the ruling is
not in accordance with law, the court shall remand the matter
to the Secretary with directions—
(A) to make such ruling as the court shall determine
to be in accordance with law; or
(B) to take such further action as, in the opinion of
the court, the law requires.
(4) ENFORCEMENT.—The pendency of a proceeding
instituted pursuant to subsection (a) shall not impede, hinder,
or delay the Attorney General or the Secretary from obtaining
relief pursuant to section 559.
SEC. 559. ENFORCEMENT.

(a) JURISDICTION.—A district court of the United States shall
have jurisdiction specifically to enforce, and to prevent and restrain
any person from violating, any order or regulation made or issued
by the Secretary under this subtitle.
(b) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized
to be brought under this section shall be referred to the Attorney
General for appropriate action, except that the Secretary is not
required to refer to the Attorney General a violation of this subtitle,
or any order or regulation issued under this subtitle, if the Secretary
believes that the administration and enforcement of this subtitle
would be adequately served by administrative action under subsection (c) or suitable written notice or warning to the person
committing the violation.
(c) CIVIL PENALTIES AND ORDERS.—
(1) CIVIL PENALTIES.—Any person who willfully violates
any provision of any order or regulation issued by the Secretary
under this subtitle, or who fails or refuses to pay, collect,
or remit any assessment or fee duly required of the person
under the order or regulation, may be assessed a civil penalty
by the Secretary of not less than $500 nor more than $5,000
for each such violation. Each violation shall be a separate
offense.
(2) CEASE-AND-DESIST ORDERS.—In addition to or in lieu
of the civil penalty, the Secretary may issue an order requiring
the person to cease and desist from continuing the violation.
(3) NOTICE AND HEARING.—No order assessing a civil penalty or cease-and-desist order may be issued by the Secretary
under this subsection unless the Secretary gives the person

Courts.

Courts.
7 USC 7468.

110 STAT. 1072

PUBLIC LAW 104–127—APR. 4, 1996

against whom the order is issued notice and opportunity for
a hearing on the record before the Secretary with respect to
the violation.
(4) FINALITY.—The order of the Secretary assessing a penalty or imposing a cease-and-desist order shall be final and
conclusive unless the person against whom the order is issued
files an appeal of the order in the appropriate district court
of the United States, in accordance with subsection (d).
(d) REVIEW BY UNITED STATES DISTRICT COURT.—
(1) COMMENCEMENT OF ACTION.—Any person against whom
a violation is found and a civil penalty assessed or ceaseand-desist order issued under subsection (c) may obtain review
of the penalty or cease-and-desist order in the district court
of the United States for the district in which the person resides
or carries on business, or the United States District Court
for the District of Columbia, by—
(A) filing a notice of appeal in the court not later
than 30 days after the date on which the penalty is assessed
or cease-and-desist order issued; and
(B) simultaneously sending a copy of the notice by
certified mail to the Secretary.
(2) RECORD.—The Secretary shall promptly file in the court
a certified copy of the record on which the Secretary found
that the person committed the violation.
(3) STANDARD OF REVIEW.—A finding of the Secretary shall
be set aside only if the finding is found to be unsupported
by substantial evidence.
(e) FAILURE TO OBEY CEASE-AND-DESIST ORDERS.—Any person
who fails to obey a cease-and-desist order issued by the Secretary
after the cease-and-desist order has become final and unappealable,
or after the appropriate United States district court has entered
a final judgment in favor of the Secretary, shall be subject to
a civil penalty assessed by the Secretary, after opportunity for
a hearing and for judicial review under the procedures specified
in subsections (c) and (d), of not more than $500 for each offense.
Each day during which the failure continues shall be considered
a separate violation of the cease-and-desist order.
(f) FAILURE TO PAY PENALTIES.—If a person fails to pay an
assessment of a civil penalty after the assessment has become
a final and unappealable order issued by the Secretary, or after
the appropriate United States district court has entered final judgment in favor of the Secretary, the Secretary shall refer the matter
to the Attorney General for recovery of the amount assessed in
the district court of the United States for any district in which
the person resides or carries on business. In an action for recovery,
the validity and appropriateness of the final order imposing the
civil penalty shall not be subject to review.
7 USC 7469.

SEC. 560. INVESTIGATIONS AND POWER TO SUBPOENA.

(a) IN GENERAL.—The Secretary may make such investigations
as the Secretary considers necessary—
(1) for the effective carrying out of the responsibilities
of the Secretary under this subtitle; or
(2) to determine whether a person subject to this subtitle
has engaged or is engaging in any act that constitutes a violation of this subtitle, or any order, rule, or regulation issued
under this subtitle.

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110 STAT. 1073

(b) POWER TO SUBPOENA.—
(1) INVESTIGATIONS.—For the purpose of an investigation
made under subsection (a), the Secretary may administer oaths
and affirmations and may issue subpoenas to require the
production of any records that are relevant to the inquiry.
The production of any such records may be required from
any place in the United States.
(2) ADMINISTRATIVE HEARINGS.—For the purpose of an
administrative hearing held under section 558 or 559, the
presiding officer is authorized to administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses,
take evidence, and require the production of any records that
are relevant to the inquiry. The attendance of witnesses and
the production of any such records may be required from any
place in the United States.
(c) AID OF COURTS.—In the case of contumacy by, or refusal
to obey a subpoena to, any person, the Secretary may invoke the
aid of any court of the United States within the jurisdiction of
which the investigation or proceeding is carried on, or where the
person resides or carries on business, to enforce a subpoena issued
by the Secretary under subsection (b). The court may issue an
order requiring the person to comply with the subpoena.
(d) CONTEMPT.—Any failure to obey the order of the court
may be punished by the court as a contempt of the court.
(e) PROCESS.—Process in any such case may be served in the
judicial district in which the person resides or carries on business
or wherever the person may be found.
(f) HEARING SITE.—The site of any hearing held under section
558 or 559 shall be in the judicial district where the person affected
by the hearing resides or has a principal place of business.
SEC. 561. REFERENDA.

(a) INITIAL REFERENDUM.—
(1) REFERENDUM REQUIRED.—During the 60-day period
immediately preceding the proposed effective date of an order
issued under section 554, the Secretary shall conduct a referendum among kiwifruit producers and importers who will be
subject to assessments under the order, to ascertain whether
producers and importers approve the implementation of the
order.
(2) APPROVAL OF ORDER.—The order shall become effective,
as provided in section 554, if the Secretary determines that—
(A) the order has been approved by a majority of the
producers and importers voting in the referendum; and
(B) the producers and importers favoring approval
produce and import more than 50 percent of the total
volume of kiwifruit produced and imported by persons voting in the referendum.
(b) SUBSEQUENT REFERENDA.—The Secretary may periodically
conduct a referendum to determine if kiwifruit producers and
importers favor the continuation, termination, or suspension of
any order issued under section 554 that is in effect at the time
of the referendum.
(c) REQUIRED REFERENDA.—The Secretary shall hold a referendum under subsection (b)—

7 USC 7470.

110 STAT. 1074

PUBLIC LAW 104–127—APR. 4, 1996

(1) at the end of the 6-year period beginning on the effective
date of the order and at the end of each subsequent 6-year
period;
(2) at the request of the Board; or
(3) if not less than 30 percent of the kiwifruit producers
and importers subject to assessments under the order submit
a petition requesting the referendum.
(d) VOTE.—On completion of a referendum under subsection
(b), the Secretary shall suspend or terminate the order that was
subject to the referendum at the end of the marketing year if—
(1) the suspension or termination of the order is favored
by not less than a majority of the producers and importers
voting in the referendum; and
(2) the producers and importers produce and import more
than 50 percent of the total volume of kiwifruit produced and
imported by persons voting in the referendum.
(e) CONFIDENTIALITY.—The ballots and other information or
reports that reveal, or tend to reveal, the vote of any person under
this subtitle and the voting list shall be held strictly confidential
and shall not be disclosed.
7 USC 7471.

SEC. 562. SUSPENSION OR TERMINATION.

(a) IN GENERAL.—If the Secretary finds that an order issued
under section 554, or a provision of the order, obstructs or does
not tend to effectuate the purposes of this subtitle, the Secretary
shall suspend or terminate the operation of the order or provision.
(b) LIMITATION.—The suspension or termination of any order,
or any provision of an order, shall not be considered an order
under this subtitle.
7 USC 7472.

SEC. 563. REGULATIONS.

The Secretary may issue such regulations as are necessary
to carry out this subtitle.
7 USC 7473.

SEC. 564. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated for each fiscal year
such sums as are necessary to carry out this subtitle.

Subtitle E—Popcorn

Popcorn
Promotion,
Research, and
Consumer
Information Act.
7 USC 7401 note.

SEC. 571. SHORT TITLE.

7 USC 7481.

SEC. 572. FINDINGS AND DECLARATION OF POLICY.

This subtitle may be cited as the ‘‘Popcorn Promotion, Research,
and Consumer Information Act’’.
(a) FINDINGS.—Congress finds that—
(1) popcorn is an important food that is a valuable part
of the human diet;
(2) the production and processing of popcorn plays a significant role in the economy of the United States in that popcorn
is processed by several popcorn processors, distributed through
wholesale and retail outlets, and consumed by millions of people
throughout the United States and foreign countries;
(3) popcorn must be of high quality, readily available, handled properly, and marketed efficiently to ensure that the benefits of popcorn are available to the people of the United States;

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110 STAT. 1075

(4) the maintenance and expansion of existing markets
and uses and the development of new markets and uses for
popcorn are vital to the welfare of processors and persons
concerned with marketing, using, and producing popcorn for
the market, as well as to the agricultural economy of the
United States;
(5) the cooperative development, financing, and
implementation of a coordinated program of popcorn promotion,
research, consumer information, and industry information is
necessary to maintain and expand markets for popcorn; and
(6) popcorn moves in interstate and foreign commerce, and
popcorn that does not move in those channels of commerce
directly burdens or affects interstate commerce in popcorn.
(b) POLICY.—It is the policy of Congress that it is in the public
interest to authorize the establishment, through the exercise of
the powers provided in this subtitle, of an orderly procedure for
developing, financing (through adequate assessments on unpopped
popcorn processed domestically), and carrying out an effective,
continuous, and coordinated program of promotion, research,
consumer information, and industry information designed to—
(1) strengthen the position of the popcorn industry in the
marketplace; and
(2) maintain and expand domestic and foreign markets
and uses for popcorn.
(c) PURPOSES.—The purposes of this subtitle are to—
(1) maintain and expand the markets for all popcorn products in a manner that—
(A) is not designed to maintain or expand any individual share of a producer or processor of the market;
(B) does not compete with or replace individual
advertising or promotion efforts designed to promote
individual brand name or trade name popcorn products;
and
(C) authorizes and funds programs that result in
government speech promoting government objectives; and
(2) establish a nationally coordinated program for popcorn
promotion, research, consumer information, and industry
information.
(d) STATUTORY CONSTRUCTION.—This subtitle treats processors
equitably. Nothing in this subtitle—
(1) provides for the imposition of a trade barrier to the
entry into the United States of imported popcorn for the domestic market; or
(2) provides for the control of production or otherwise limits
the right of any individual processor to produce popcorn.
SEC. 573. DEFINITIONS.

In this subtitle (unless the context otherwise requires):
(1) BOARD.—The term ‘‘Board’’ means the Popcorn Board
established under section 575(b).
(2) COMMERCE.—The term ‘‘commerce’’ means interstate,
foreign, or intrastate commerce.
(3) CONSUMER INFORMATION.—The term ‘‘consumer
information’’ means information and programs that will assist
consumers and other persons in making evaluations and decisions regarding the purchase, preparation, and use of popcorn.

7 USC 7482.

110 STAT. 1076

PUBLIC LAW 104–127—APR. 4, 1996
(4) DEPARTMENT.—The term ‘‘Department’’ means the
Department of Agriculture.
(5) INDUSTRY INFORMATION.—The term ‘‘industry information’’ means information or a program that will lead to the
development of—
(A) new markets, new marketing strategies, or
increased efficiency for the popcorn industry; or
(B) activities to enhance the image of the popcorn
industry.
(6) MARKETING.—The term ‘‘marketing’’ means the sale
or other disposition of unpopped popcorn for human consumption in a channel of commerce, but does not include a sale
or disposition to or between processors.
(7) ORDER.—The term ‘‘order’’ means an order issued under
section 574.
(8) PERSON.—The term ‘‘person’’ means an individual, group
of individuals, partnership, corporation, association, or cooperative, or any other legal entity.
(9) POPCORN.—The term ‘‘popcorn’’ means unpopped popcorn (Zea Mays L) that is—
(A) commercially grown;
(B) processed in the United States by shelling, cleaning,
or drying; and
(C) introduced into a channel of commerce.
(10) PROCESS.—The term ‘‘process’’ means to shell, clean,
dry, and prepare popcorn for the market, but does not include
packaging popcorn for the market without also engaging in
another activity described in this paragraph.
(11) PROCESSOR.—The term ‘‘processor’’ means a person
engaged in the preparation of unpopped popcorn for the market
who owns or shares the ownership and risk of loss of the
popcorn and who processes and distributes over 4,000,000
pounds of popcorn in the market per year.
(12) PROMOTION.—The term ‘‘promotion’’ means an action,
including paid advertising, to enhance the image or desirability
of popcorn.
(13) RESEARCH.—The term ‘‘research’’ means any type of
study to advance the image, desirability, marketability, production, product development, quality, or nutritional value of popcorn.
(14) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Agriculture.
(15) STATE.—The term ‘‘State’’ means each of the 50 States
and the District of Columbia.
(16) UNITED STATES.—The term ‘‘United States’’ means all
of the States.

7 USC 7483.

SEC. 574. ISSUANCE OF ORDERS.

(a) IN GENERAL.—To effectuate the policy described in section
572(b), the Secretary, subject to subsection (b), shall issue 1 or
more orders applicable to processors. An order shall be applicable
to all popcorn production and marketing areas in the United States.
Not more than 1 order shall be in effect under this subtitle at
any 1 time.
(b) PROCEDURE.—
(1) PROPOSAL OR REQUEST FOR ISSUANCE.—The Secretary
may propose the issuance of an order, or an association of

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110 STAT. 1077

processors or any other person that would be affected by an
order may request the issuance of, and submit a proposal
for, an order.
(2) NOTICE AND COMMENT CONCERNING PROPOSED ORDER.—
Not later than 60 days after the receipt of a request and
proposal for an order under paragraph (1), or at such time
as the Secretary determines to propose an order, the Secretary
shall publish a proposed order and give due notice and opportunity for public comment on the proposed order.
(3) ISSUANCE OF ORDER.—After notice and opportunity for
public comment under paragraph (2), the Secretary shall issue
an order, taking into consideration the comments received and
including in the order such provisions as are necessary to
ensure that the order conforms to this subtitle. The order
shall be issued and become effective not later than 150 days
after the date of publication of the proposed order.
(c) AMENDMENTS.—The Secretary, as appropriate, may amend
an order. The provisions of this subtitle applicable to an order
shall be applicable to any amendment to an order, except that
an amendment to an order may not require a referendum to become
effective.
SEC. 575. REQUIRED TERMS IN ORDERS.

(a) IN GENERAL.—An order shall contain the terms and conditions specified in this section.
(b) ESTABLISHMENT AND MEMBERSHIP OF POPCORN BOARD.—
(1) IN GENERAL.—The order shall provide for the establishment of, and appointment of members to, a Popcorn Board
that shall consist of not fewer than 4 members and not more
than 9 members.
(2) NOMINATIONS.—The members of the Board shall be
processors appointed by the Secretary from nominations
submitted by processors in a manner authorized by the Secretary, subject to paragraph (3). Not more than 1 member
may be appointed to the Board from nominations submitted
by any 1 processor.
(3) GEOGRAPHICAL DIVERSITY.—In making appointments,
the Secretary shall take into account, to the extent practicable,
the geographical distribution of popcorn production throughout
the United States.
(4) TERMS.—The term of appointment of each member of
the Board shall be 3 years, except that the members appointed
to the initial Board shall serve, proportionately, for terms of
2, 3, and 4 years, as determined by the Secretary.
(5) COMPENSATION AND EXPENSES.—A member of the Board
shall serve without compensation, but shall be reimbursed for
the expenses of the member incurred in the performance of
duties for the Board.
(c) POWERS AND DUTIES OF BOARD.—The order shall define
the powers and duties of the Board, which shall include the power
and duty—
(1) to administer the order in accordance with the terms
and provisions of the order;
(2) to issue regulations to effectuate the terms and provisions of the order;
(3) to appoint members of the Board to serve on an executive committee;

Publication.

7 USC 7484.

110 STAT. 1078

Effective date.
Records.
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PUBLIC LAW 104–127—APR. 4, 1996
(4) to propose, receive, evaluate, and approve budgets,
plans, and projects of promotion, research, consumer information, and industry information, and to contract with appropriate
persons to implement the plans or projects;
(5) to accept and receive voluntary contributions, gifts,
and market promotion or similar funds;
(6) to invest, pending disbursement under a plan or project,
funds collected through assessments authorized under subsection (f), only in—
(A) obligations of the United States or an agency of
the United States;
(B) general obligations of a State or a political subdivision of a State;
(C) an interest-bearing account or certificate of deposit
of a bank that is a member of the Federal Reserve System;
or
(D) obligations fully guaranteed as to principal and
interest by the United States;
(7) to receive, investigate, and report to the Secretary complaints of violations of the order; and
(8) to recommend to the Secretary amendments to the
order.
(d) PLANS AND BUDGETS.—
(1) IN GENERAL.—The order shall provide that the Board
shall submit to the Secretary for approval any plan or project
of promotion, research, consumer information, or industry
information.
(2) BUDGETS.—The order shall require the Board to submit
to the Secretary for approval budgets on a fiscal year basis
of the anticipated expenses and disbursements of the Board
in the implementation of the order, including projected costs
of plans and projects of promotion, research, consumer information, and industry information.
(e) CONTRACTS AND AGREEMENTS.—
(1) IN GENERAL.—The order shall provide that the Board
may enter into contracts or agreements for the implementation
and carrying out of plans or projects of promotion, research,
consumer information, or industry information, including contracts with a processor organization, and for the payment of
the cost of the plans or projects with funds collected by the
Board under the order.
(2) REQUIREMENTS.—A contract or agreement under paragraph (1) shall provide that—
(A) the contracting party shall develop and submit
to the Board a plan or project, together with a budget
that shows the estimated costs to be incurred for the plan
or project;
(B) the plan or project shall become effective on the
approval of the Secretary; and
(C) the contracting party shall keep accurate records
of each transaction of the party, account for funds received
and expended, make periodic reports to the Board of activities conducted, and make such other reports as the Board
or the Secretary may require.
(3) PROCESSOR ORGANIZATIONS.—The order shall provide
that the Board may contract with processor organizations for
any services required in addition to the services described in

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1079

paragraph (1). The contract shall include provisions comparable
to the provisions required by paragraph (2).
(f) ASSESSMENTS.—
(1) PROCESSORS.—The order shall provide that each processor marketing popcorn in the United States or for export
shall, in the manner prescribed in the order, pay assessments
and remit the assessments to the Board.
(2) DIRECT MARKETERS.—A processor that markets popcorn
produced by the processor directly to consumers shall pay and
remit the assessments on the popcorn directly to the Board
in the manner prescribed in the order.
(3) RATE.—
(A) IN GENERAL.—The rate of assessment prescribed
in the order shall be a rate established by the Board
but not more than $.08 per hundredweight of popcorn.
(B) ADJUSTMENT OF RATE.—The order shall provide
that the Board, with the approval of the Secretary, may
raise or lower the rate of assessment annually up to a
maximum of $.08 per hundredweight of popcorn.
(4) USE OF ASSESSMENTS.—
(A) IN GENERAL.—Subject to subparagraphs (B) and
(C) and subsection (c)(5), the order shall provide that the
assessments collected shall be used by the Board—
(i) to pay expenses incurred in implementing and
administering the order, with provision for a reasonable reserve; and
(ii) to cover such administrative costs as are
incurred by the Secretary, except that the administrative costs incurred by the Secretary (other than any
legal expenses incurred to defend and enforce the
order) that may be reimbursed by the Board may not
exceed 15 percent of the projected annual revenues
of the Board.
(B) EXPENDITURES BASED ON SOURCE OF ASSESSMENTS.—In implementing plans and projects of promotion,
research, consumer information, and industry information,
the Board shall expend funds on—
(i) plans and projects for popcorn marketed in the
United States or Canada in proportion to the amount
of assessments collected on domestically marketed popcorn; and
(ii) plans and projects for exported popcorn in
proportion to the amount of assessments collected on
exported popcorn.
(C) NOTIFICATION.—If the administrative costs incurred
by the Secretary that are reimbursed by the Board exceed
10 percent of the projected annual revenues of the Board,
the Secretary shall notify as soon as practicable the
Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
(g) PROHIBITION ON USE OF FUNDS.—The order shall prohibit
any funds collected by the Board under the order from being used
to influence government action or policy, other than the use of
funds by the Board for the development and recommendation to
the Secretary of amendments to the order.

110 STAT. 1080

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(h) BOOKS AND RECORDS OF THE BOARD.—The order shall
require the Board to—
(1) maintain such books and records (which shall be available to the Secretary for inspection and audit) as the Secretary
may prescribe;
(2) prepare and submit to the Secretary, from time to
time, such reports as the Secretary may prescribe; and
(3) account for the receipt and disbursement of all funds
entrusted to the Board.
(i) BOOKS AND RECORDS OF PROCESSORS.—
(1) MAINTENANCE AND REPORTING OF INFORMATION.—The
order shall require that each processor of popcorn for the market shall—
(A) maintain, and make available for inspection, such
books and records as are required by the order; and
(B) file reports at such time, in such manner, and
having such content as is prescribed in the order.
(2) USE OF INFORMATION.—The Secretary shall authorize
the use of information regarding processors that may be
accumulated under a law or regulation other than this subtitle
or a regulation issued under this subtitle. The information
shall be made available to the Secretary as appropriate for
the administration or enforcement of this subtitle, the order,
or any regulation issued under this subtitle.
(3) CONFIDENTIALITY.—
(A) IN GENERAL.—Subject to subparagraphs (B), (C),
and (D), all information obtained by the Secretary under
paragraphs (1) and (2) shall be kept confidential by all
officers, employees, and agents of the Board and the
Department.
(B) DISCLOSURE BY SECRETARY.—Information referred
to in subparagraph (A) may be disclosed if—
(i) the Secretary considers the information relevant;
(ii) the information is revealed in a suit or administrative hearing brought at the request of the Secretary,
or to which the Secretary or any officer of the United
States is a party; and
(iii) the information relates to the order.
(C) DISCLOSURE TO OTHER AGENCY OF FEDERAL GOVERNMENT.—
(i) IN GENERAL.—No information obtained under
the authority of this subtitle may be made available
to another agency or officer of the Federal Government
for any purpose other than the implementation of this
subtitle and any investigatory or enforcement activity
necessary for the implementation of this subtitle.
(ii) PENALTY.—A person who knowingly violates
this subparagraph shall, on conviction, be subject to
a fine of not more than $1,000 or to imprisonment
for not more than 1 year, or both, and if an officer,
employee, or agent of the Board or the Department,
shall be removed from office or terminated from
employment, as applicable.
(D) GENERAL STATEMENTS.—Nothing in this paragraph
prohibits—

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110 STAT. 1081

(i) the issuance of general statements based on
the reports of a number of persons subject to an order
or statistical data collected from the reports, if the
statements do not identify the information provided
by any person; or
(ii) the publication, by direction of the Secretary,
of the name of a person violating the order, together
with a statement of the particular provisions of the
order violated by the person.
(j) OTHER TERMS AND CONDITIONS.—The order shall contain
such other terms and conditions, consistent with this subtitle, as
are necessary to effectuate this subtitle, including regulations relating to the assessment of late payment charges.
SEC. 576. REFERENDA.

(a) INITIAL REFERENDUM.—
(1) IN GENERAL.—Within the 60-day period immediately
preceding the effective date of an order, as provided in section
574(b)(3), the Secretary shall conduct a referendum among
processors who, during a representative period as determined
by the Secretary, have been engaged in processing, for the
purpose of ascertaining whether the order shall go into effect.
(2) APPROVAL OF ORDER.—The order shall become effective,
as provided in section 574(b), only if the Secretary determines
that the order has been approved by not less than a majority
of the processors voting in the referendum and if the majority
processed more than 50 percent of the popcorn certified as
having been processed, during the representative period, by
the processors voting.
(b) ADDITIONAL REFERENDA.—
(1) IN GENERAL.—Not earlier than 3 years after the effective
date of an order approved under subsection (a), on the request
of the Board or a representative group of processors, as
described in paragraph (2), the Secretary may conduct additional referenda to determine whether processors favor the
suspension or termination of the order.
(2) REPRESENTATIVE GROUP OF PROCESSORS.—An additional
referendum on an order shall be conducted if the referendum
is requested by 30 percent or more of the number of processors
who, during a representative period as determined by the Secretary, have been engaged in processing.
(3) DISAPPROVAL OF ORDER.—If the Secretary determines,
in a referendum conducted under paragraph (1), that suspension or termination of the order is favored by at least 2⁄3
of the processors voting in the referendum, the Secretary shall—
(A) suspend or terminate, as appropriate, collection
of assessments under the order not later than 180 days
after the date of determination; and
(B) suspend or terminate the order, as appropriate,
in an orderly manner as soon as practicable after the
date of determination.
(c) COSTS OF REFERENDUM.—The Secretary shall be reimbursed
from assessments collected by the Board for any expenses incurred
by the Secretary in connection with the conduct of any referendum
under this section.

7 USC 7485.

Termination
date.

110 STAT. 1082

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(d) METHOD OF CONDUCTING REFERENDUM.—Subject to this
section, a referendum conducted under this section shall be conducted in such manner as is determined by the Secretary.
(e) CONFIDENTIALITY OF BALLOTS AND OTHER INFORMATION.—
(1) IN GENERAL.—The ballots and other information or
reports that reveal or tend to reveal the vote of any processor,
or any business operation of a processor, shall be considered
to be strictly confidential and shall not be disclosed.
(2) PENALTY FOR VIOLATIONS.—An officer or employee of
the Department who knowingly violates paragraph (1) shall
be subject to the penalties described in section 575(i)(3)(C)(ii).
7 USC 7486.

Courts.

7 USC 7487.

SEC. 577. PETITION AND REVIEW.

(a) PETITION.—
(1) IN GENERAL.—A person subject to an order may file
with the Secretary a petition—
(A) stating that the order, a provision of the order,
or an obligation imposed in connection with the order is
not established in accordance with law; and
(B) requesting a modification of the order or obligation
or an exemption from the order or obligation.
(2) STATUTE OF LIMITATIONS.—A petition under paragraph
(1) concerning an obligation may be filed not later than 2
years after the date of imposition of the obligation.
(3) HEARINGS.—The petitioner shall be given the opportunity for a hearing on a petition filed under paragraph (1),
in accordance with regulations issued by the Secretary.
(4) RULING.—After a hearing under paragraph (3), the Secretary shall issue a ruling on the petition that is the subject
of the hearing, which shall be final if the ruling is in accordance
with applicable law.
(b) REVIEW.—
(1) COMMENCEMENT OF ACTION.—The district court of the
United States for any district in which a person who is a
petitioner under subsection (a) resides or carries on business
shall have jurisdiction to review a ruling on the petition, if
the person files a complaint not later than 20 days after the
date of issuance of the ruling under subsection (a)(4).
(2) PROCESS.—Service of process in a proceeding under
paragraph (1) may be made on the Secretary by delivering
a copy of the complaint to the Secretary.
(3) REMANDS.—If the court determines, under paragraph
(1), that a ruling issued under subsection (a)(4) is not in accordance with applicable law, the court shall remand the matter
to the Secretary with directions—
(A) to make such ruling as the court shall determine
to be in accordance with law; or
(B) to take such further proceedings as, in the opinion
of the court, the law requires.
(c) ENFORCEMENT.—The pendency of proceedings instituted
under subsection (a) may not impede, hinder, or delay the Secretary
or the Attorney General from taking action under section 578.
SEC. 578. ENFORCEMENT.

(a) IN GENERAL.—The Secretary may issue an enforcement
order to restrain or prevent any person from violating an order
or regulation issued under this subtitle and may assess a civil
penalty of not more than $1,000 for each violation of the enforce-

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110 STAT. 1083

ment order, after an opportunity for an administrative hearing,
if the Secretary determines that the administration and enforcement
of the order and this subtitle would be adequately served by such
a procedure.
(b) JURISDICTION.—The district courts of the United States
are vested with jurisdiction specifically to enforce, and to prevent
and restrain any person from violating, an order or regulation
issued under this subtitle.
(c) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized
to be brought under this section shall be referred to the Attorney
General for appropriate action.
SEC. 579. INVESTIGATIONS AND POWER TO SUBPOENA.

Courts.

7 USC 7488.

(a) INVESTIGATIONS.—The Secretary may make such investigations as the Secretary considers necessary—
(1) for the effective administration of this subtitle; and
(2) to determine whether any person subject to this subtitle
has engaged, or is about to engage, in an act that constitutes
or will constitute a violation of this subtitle or of an order
or regulation issued under this subtitle.
(b) OATHS, AFFIRMATIONS, AND SUBPOENAS.—For the purpose
of an investigation under subsection (a), the Secretary may administer oaths and affirmations, subpoena witnesses, compel the attendance of witnesses, take evidence, and require the production of
any records that are relevant to the inquiry. The attendance of
witnesses and the production of records may be required from
any place in the United States.
(c) AID OF COURTS.—
(1) REQUEST.—In the case of contumacy by, or refusal to
obey a subpoena issued to, any person, the Secretary may
request the aid of any court of the United States within the
jurisdiction of which the investigation or proceeding is carried
on, or where the person resides or carries on business, in
requiring the attendance and testimony of the person and the
production of records.
(2) ENFORCEMENT ORDER OF THE COURT.—The court may
issue an enforcement order requiring the person to appear
before the Secretary to produce records or to give testimony
concerning the matter under investigation.
(3) CONTEMPT.—A failure to obey an enforcement order
of the court under paragraph (2) may be punished by the
court as a contempt of the court.
(4) PROCESS.—Process in a case under this subsection may
be served in the judicial district in which the person resides
or carries on business or wherever the person may be found.
SEC. 580. RELATION TO OTHER PROGRAMS.

7 USC 7489.

Nothing in this subtitle preempts or supersedes any other
program relating to popcorn promotion organized and operated
under the laws of the United States or any State.
SEC. 581. REGULATIONS.

7 USC 7490.

The Secretary may issue such regulations as are necessary
to carry out this subtitle.
SEC. 582. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated such sums as are
necessary to carry out this subtitle. Amounts made available under

7 USC 7491.

110 STAT. 1084

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this section or otherwise made available to the Department, and
amounts made available under any other marketing or promotion
order, may not be used to pay any administrative expense of the
Board.

Subtitle F—Miscellaneous
SEC. 591. MAINTENANCE OF RECORDS FOR HONEY PROMOTION PROGRAM.

Section 9(f) of the Honey Research, Promotion, and Consumer
Information Act (7 U.S.C. 4608(f)) is amended by inserting ‘‘producers,’’ after ‘‘importers,’’.

TITLE VI—CREDIT
Subtitle A—Farm Ownership Loans
SEC. 601. LIMITATION ON DIRECT FARM OWNERSHIP LOANS.

Section 302 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1922) is amended by striking subsection (b) and
inserting the following:
‘‘(b) DIRECT LOANS.—
‘‘(1) IN GENERAL.—Subject to paragraph (3), the Secretary
may make a direct loan under this subtitle only to a farmer
or rancher who has operated a farm or ranch for not less
than 3 years and—
‘‘(A) is a qualified beginning farmer or rancher;
‘‘(B) has not received a previous direct farm ownership
loan made under this subtitle; or
‘‘(C) has not received a direct farm ownership loan
under this subtitle more than 10 years before the date
the new loan would be made.
‘‘(2) YOUTH LOANS.—The operation of an enterprise by a
youth under section 311(b) shall not be considered the operation
of a farm or ranch for purposes of paragraph (1).
‘‘(3) TRANSITION RULE.—
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and
(C), the Secretary may make a direct loan under this subtitle to a farmer or rancher who has a direct loan outstanding under this subtitle on the date of enactment of this
paragraph.
‘‘(B) LESS THAN 5 YEARS.—If, as of the date of enactment of this paragraph, a farmer or rancher has had a
direct loan outstanding under this subtitle for less than
5 years, the Secretary shall not make a loan to the farmer
or rancher under subparagraph (A) after the date that
is 10 years after the date of enactment of this paragraph.
‘‘(C) 5 YEARS OR MORE.—If, as of the date of enactment
of this paragraph, a farmer or rancher has had a direct
loan outstanding under this subtitle for 5 years or more,
the Secretary shall not make a loan to the farmer or
rancher under subparagraph (A) after the date that is
5 years after the date of enactment of this paragraph.’’.

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SEC. 602. PURPOSES OF LOANS.

(a) IN GENERAL.—Section 303 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1923) is amended to read as
follows:
‘‘SEC. 303. PURPOSES OF LOANS.

‘‘(a) ALLOWED PURPOSES.—
‘‘(1) DIRECT LOANS.—A farmer or rancher may use a direct
loan made under this subtitle only for—
‘‘(A) acquiring or enlarging a farm or ranch;
‘‘(B) making capital improvements to a farm or ranch;
‘‘(C) paying loan closing costs related to acquiring,
enlarging, or improving a farm or ranch; or
‘‘(D) paying for activities to promote soil and water
conservation and protection described in section 304 on
a farm or ranch.
‘‘(2) GUARANTEED LOANS.—A farmer or rancher may use
a loan guaranteed under this subtitle only for—
‘‘(A) acquiring or enlarging a farm or ranch;
‘‘(B) making capital improvements to a farm or ranch;
‘‘(C) paying loan closing costs related to acquiring,
enlarging, or improving a farm or ranch;
‘‘(D) paying for activities to promote soil and water
conservation and protection described in section 304 on
a farm or ranch; or
‘‘(E) refinancing indebtedness.
‘‘(b) PREFERENCES.—In making or guaranteeing a loan under
this subtitle for purchase of a farm or ranch, the Secretary shall
give preference to a person who—
‘‘(1) has a dependent family;
‘‘(2) to the extent practicable, is able to make an initial
down payment on the farm or ranch; or
‘‘(3) is an owner of livestock or farm or ranch equipment
that is necessary to successfully carry out farming or ranching
operations.
‘‘(c) HAZARD INSURANCE REQUIREMENT.—
‘‘(1) IN GENERAL.—After the Secretary makes the determination required by paragraph (2), the Secretary may not
make a loan to a farmer or rancher under this subtitle unless
the farmer or rancher has, or agrees to obtain, hazard insurance
on any real property to be acquired or improved with the
loan.
‘‘(2) DETERMINATION.—Not later than 180 days after the
date of enactment of this subsection, the Secretary shall determine the appropriate level of insurance to be required under
paragraph (1).’’.
(b) TRANSITIONAL PROVISION.—Section 303(c)(1) of the Consolidated Farm and Rural Development Act shall not apply until the
Secretary of Agriculture makes the determination required by section 303(c)(2) of the Act.
SEC. 603. SOIL AND WATER CONSERVATION AND PROTECTION.

Section 304 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1924) is amended—
(1) by striking subsections (b) and (c);
(2) by striking ‘‘SEC. 304. (a)(1) Loans’’ and inserting the
following:

7 USC 1923 note.

110 STAT. 1086

PUBLIC LAW 104–127—APR. 4, 1996

‘‘SEC. 304. SOIL AND WATER CONSERVATION AND PROTECTION.

‘‘(a) IN GENERAL.—Loans’’;
(3) by striking ‘‘(2) In making or insuring’’ and inserting
the following:
‘‘(b) PRIORITY.—In making or guaranteeing’’;
(4) by striking ‘‘(3) The Secretary’’ and inserting the following:
‘‘(c) LOAN MAXIMUM.—The Secretary’’;
(5) by redesignating subparagraphs (A) through (F) of subsection (a) (as amended by paragraph (2)) as paragraphs (1)
through (6), respectively; and
(6) by redesignating subparagraphs (A) and (B) of subsection (c) (as amended by paragraph (4)) as paragraphs (1)
and (2), respectively.
SEC. 604. INTEREST RATE REQUIREMENTS.

Section 307(a)(3) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)(3)) is amended—
(1) in subparagraph (B), by inserting ‘‘subparagraph (D)
and in’’ after ‘‘Except as provided in’’; and
(2) by adding at the end the following:
‘‘(D) JOINT FINANCING ARRANGEMENT.—If a direct farm
ownership loan is made under this subtitle as part of
a joint financing arrangement and the amount of the direct
farm ownership loan does not exceed 50 percent of the
total principal amount financed under the arrangement,
the interest rate on the direct farm ownership loan shall
be at least 4 percent annually.’’.
SEC. 605. INSURANCE OF LOANS.

Section 308 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1928) is amended to read as follows:
‘‘SEC. 308. FULL FAITH AND CREDIT.

‘‘(a) IN GENERAL.—A contract of insurance or guarantee
executed by the Secretary under this title shall be an obligation
supported by the full faith and credit of the United States.
‘‘(b) CONTESTABILITY.—A contract of insurance or guarantee
executed by the Secretary under this title shall be incontestable
except for fraud or misrepresentation that the lender or any
holder—
‘‘(1) has actual knowledge of at the time the contract or
guarantee is executed; or
‘‘(2) participates in or condones.’’.
SEC. 606. LOANS GUARANTEED.

Section 309(h) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(h)) is amended by adding at the end
the following:
‘‘(4) MAXIMUM GUARANTEE OF 90 PERCENT.—Except as provided in paragraphs (5) and (6), a loan guarantee under this
title shall be for not more than 90 percent of the principal
and interest due on the loan.
‘‘(5) REFINANCED LOANS GUARANTEED AT 95 PERCENT.—The
Secretary shall guarantee 95 percent of—
‘‘(A) in the case of a loan that solely refinances a
direct loan made under this title, the principal and interest
due on the loan on the date of the refinancing; or

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110 STAT. 1087

‘‘(B) in the case of a loan that is used for multiple
purposes, the portion of the loan that refinances the principal and interest due on a direct loan made under this
title that is outstanding on the date the loan is guaranteed.
‘‘(6) BEGINNING FARMER LOANS GUARANTEED UP TO 95 PERCENT.—The Secretary may guarantee not more than 95 percent
of—
‘‘(A) a farm ownership loan for acquiring a farm or
ranch to a borrower who is participating in the down payment loan program under section 310E; or
‘‘(B) an operating loan to a borrower who is participating in the down payment loan program under section 310E
that is made during the period that the borrower has
a direct loan outstanding under this subtitle for acquiring
a farm or ranch.’’.

Subtitle B—Operating Loans
SEC. 611. LIMITATION ON DIRECT OPERATING LOANS.

(a) IN GENERAL.—Section 311 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1941) is amended by striking
subsection (c) and inserting the following:
‘‘(c) DIRECT LOANS.—
‘‘(1) IN GENERAL.—Subject to paragraph (3), the Secretary
may make a direct loan under this subtitle only to a farmer
or rancher who—
‘‘(A) is a qualified beginning farmer or rancher who
has not operated a farm or ranch, or who has operated
a farm or ranch for not more than 5 years;
‘‘(B) has not received a previous direct operating loan
made under this subtitle; or
‘‘(C) has received a previous direct operating loan made
under this subtitle during 6 or fewer years.
‘‘(2) YOUTH LOANS.—In this subsection, the term ‘direct
operating loan’ shall not include a loan made to a youth under
subsection (b).
‘‘(3) TRANSITION RULE.—If, as of the date of enactment
of this paragraph, a farmer or rancher has received a direct
operating loan under this subtitle during each of 4 or more
previous years, the borrower shall be eligible to receive a direct
operating loan under this subtitle during 3 additional years
after the date of enactment of this paragraph.’’.
(b) YOUTH ENTERPRISES NOT FARMING OR RANCHING.—Section
311(b) of the Consolidated Farm and Rural Development Act (7
U.S.C. 1941(b)) is amended by adding at the end the following:
‘‘(4) YOUTH ENTERPRISES NOT FARMING OR RANCHING.—The
operation of an enterprise by a youth under this subsection
shall not be considered the operation of a farm or ranch under
this title.’’.
SEC. 612. PURPOSES OF OPERATING LOANS.

(a) IN GENERAL.—Section 312 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1942) is amended to read as
follows:

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‘‘SEC. 312. PURPOSES OF LOANS.

‘‘(a) IN GENERAL.—A direct loan may be made under this subtitle only for—
‘‘(1) paying the costs incident to reorganizing a farm or
ranch for more profitable operation;
‘‘(2) purchasing livestock, poultry, or farm or ranch equipment;
‘‘(3) purchasing feed, seed, fertilizer, insecticide, or farm
or ranch supplies, or to meet other essential farm or ranch
operating expenses, including cash rent;
‘‘(4) financing land or water development, use, or conservation;
‘‘(5) paying loan closing costs;
‘‘(6) assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch
to comply with a standard promulgated under section 6 of
the Occupational Safety and Health Act of 1970 (29 U.S.C.
655) or a standard adopted by a State under a plan approved
under section 18 of the Act (29 U.S.C. 667), if the Secretary
determines that without assistance under this paragraph the
farmer or rancher is likely to suffer substantial economic injury
in complying with the standard;
‘‘(7) training a limited-resource borrower receiving a loan
under section 310D in maintaining records of farming and
ranching operations;
‘‘(8) training a borrower under section 359;
‘‘(9) refinancing the indebtedness of a borrower, if the borrower—
‘‘(A) has refinanced a loan under this subtitle not more
than 4 times previously; and
‘‘(B)(i) is a direct loan borrower under this title at
the time of the refinancing and has suffered a qualifying
loss because of a natural disaster declared by the Secretary
under this title or a major disaster or emergency designated
by the President under the Robert T. Stafford Disaster
Relief and Emergency Assistance Act (42 U.S.C. 5121 et
seq.); or
‘‘(ii) is refinancing a debt obtained from a creditor
other than the Secretary; or
‘‘(10) providing other farm, ranch, or home needs, including
family subsistence.
‘‘(b) GUARANTEED LOANS.—A loan may be guaranteed under
this subtitle only for—
‘‘(1) paying the costs incident to reorganizing a farm or
ranch for more profitable operation;
‘‘(2) purchasing livestock, poultry, or farm or ranch equipment;
‘‘(3) purchasing feed, seed, fertilizer, insecticide, or farm
or ranch supplies, or to meet other essential farm or ranch
operating expenses, including cash rent;
‘‘(4) financing land or water development, use, or conservation;
‘‘(5) refinancing indebtedness;
‘‘(6) paying loan closing costs;
‘‘(7) assisting a farmer or rancher in changing the equipment, facilities, or methods of operation of a farm or ranch
to comply with a standard promulgated under section 6 of

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110 STAT. 1089

the Occupational Safety and Health Act of 1970 (29 U.S.C.
655) or a standard adopted by a State under a plan approved
under section 18 of the Act (29 U.S.C. 667), if the Secretary
determines that without assistance under this paragraph the
farmer or rancher is likely to suffer substantial economic injury
due to compliance with the standard;
‘‘(8) training a borrower under section 359; or
‘‘(9) providing other farm, ranch, or home needs, including
family subsistence.
‘‘(c) HAZARD INSURANCE REQUIREMENT.—
‘‘(1) IN GENERAL.—After the Secretary makes the determination required by paragraph (2), the Secretary may not
make a loan to a farmer or rancher under this subtitle unless
the farmer or rancher has, or agrees to obtain, hazard insurance
on the property to be acquired with the loan.
‘‘(2) DETERMINATION.—Not later than 180 days after the
date of enactment of this paragraph, the Secretary shall determine the appropriate level of insurance to be required by paragraph (1).
‘‘(d) PRIVATE RESERVE.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
this title, the Secretary may reserve a portion of any loan
made under this subtitle to be placed in an unsupervised bank
account that may be used at the discretion of the borrower
for the basic family needs of the borrower and the immediate
family of the borrower.
‘‘(2) LIMIT ON SIZE OF THE RESERVE.—The size of the reserve
shall not exceed the least of—
‘‘(A) 10 percent of the loan;
‘‘(B) $5,000; or
‘‘(C) the amount needed to provide for the basic family
needs of the borrower and the borrower’s immediate family
for 3 calendar months.’’.
(b) TRANSITIONAL PROVISION.—Section 312(c)(1) of the Consolidated Farm and Rural Development Act shall not apply until the
Secretary of Agriculture makes the determination required by section 312(c)(2) of the Act.
SEC. 613. PARTICIPATION IN LOANS.

Section 315 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1945) is repealed.
SEC. 614. LINE-OF-CREDIT LOANS.

Section 316 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1946) is amended by adding at the end the following:
‘‘(c) LINE-OF-CREDIT LOANS.—
‘‘(1) IN GENERAL.—A loan made or guaranteed by the Secretary under this subtitle may be in the form of a line-ofcredit loan.
‘‘(2) TERM.—A line-of-credit loan under paragraph (1) shall
terminate not later than 5 years after the date that the loan
is made or guaranteed.
‘‘(3) ELIGIBILITY.—For purposes of determining eligibility
for a farm operating loan under this subtitle, each year during
which a farmer or rancher takes an advance or draws on
a line-of-credit loan the farmer or rancher shall be considered
to have received an operating loan for 1 year.

7 USC 1942 note.

110 STAT. 1090

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(4) TERMINATION OF DELINQUENT LOANS.—If a borrower
does not pay an installment on a line-of-credit loan on schedule,
the borrower may not take an advance or draw on the lineof-credit, unless the Secretary determines that—
‘‘(A) the borrower’s failure to pay on schedule was
due to unusual conditions that the borrower could not
control; and
‘‘(B) the borrower will reduce the line-of-credit balance
to the scheduled level at the end of—
‘‘(i) the production cycle; or
‘‘(ii) the marketing of the borrower’s agricultural
products.
‘‘(5) AGRICULTURAL COMMODITIES.—A line-of-credit loan
may be used to finance the production or marketing of an
agricultural commodity that—
‘‘(A) is eligible for a price support program of the
Department of Agriculture; or
‘‘(B) was eligible for a price support program of the
Department of Agriculture on the day before the date of
enactment of the Federal Agriculture Improvement and
Reform Act of 1996.’’.

SEC. 615. INSURANCE OF OPERATING LOANS.

Section 317 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1947) is repealed.
SEC. 616. SPECIAL ASSISTANCE FOR BEGINNING FARMERS AND
RANCHERS.

(a) IN GENERAL.—Section 318 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1948) is repealed.
(b) CONFORMING AMENDMENT.—Section 310F of the Consolidated Farm and Rural Development Act (7 U.S.C. 1936) is repealed.
SEC. 617. LIMITATION ON PERIOD FOR WHICH BORROWERS ARE
ELIGIBLE FOR GUARANTEED ASSISTANCE.

Section 319 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1949) is amended by striking subsection (b) and
inserting the following:
‘‘(b) LIMITATION ON PERIOD BORROWERS ARE ELIGIBLE FOR
GUARANTEED ASSISTANCE.—
‘‘(1) GENERAL RULE.—Subject to paragraph (2), the Secretary shall not guarantee a loan under this subtitle for a
borrower for any year after the 15th year that a loan is made
to, or a guarantee is provided with respect to, the borrower
under this subtitle.
‘‘(2) TRANSITION RULE.—If, as of October 28, 1992, a farmer
or rancher has received a direct or guaranteed operating loan
under this subtitle during each of 10 or more previous years,
the borrower shall be eligible to receive a guaranteed operating
loan under this subtitle during 5 additional years after October
28, 1992.’’.

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110 STAT. 1091

Subtitle C—Emergency Loans
SEC. 621. HAZARD INSURANCE REQUIREMENT.

(a) IN GENERAL.—Section 321 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1961) is amended by striking
subsection (b) and inserting the following:
‘‘(b) HAZARD INSURANCE REQUIREMENT.—
‘‘(1) IN GENERAL.—After the Secretary makes the determination required by paragraph (2), the Secretary may not
make a loan to a farmer or rancher under this subtitle to
cover a property loss unless the farmer or rancher had hazard
insurance that insured the property at the time of the loss.
‘‘(2) DETERMINATION.—Not later than 180 days after the
date of enactment of this paragraph, the Secretary shall determine the appropriate level of insurance to be required under
paragraph (1).’’.
(b) TRANSITIONAL PROVISION.—Section 321(b)(1) of the Consolidated Farm and Rural Development Act shall not apply until the
Secretary of Agriculture makes the determination required by section 321(b)(2) of the Act.
SEC. 622. NARROWING OF AUTHORITY TO WAIVE APPLICATION OF
THE CREDIT ELSEWHERE TEST.

The second proviso of section 322(b) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1962(b)) is amended by striking ‘‘$300,000 or less’’ and inserting ‘‘$100,000 or less’’.
SEC. 623. LINKING OF EMERGENCY LOANS FOR CROP OR LIVESTOCK
CHANGES TO NATURAL DISASTERS.

Section 323 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1963) is amended by inserting ‘‘that are necessitated
by a natural disaster, major disaster, or emergency and that are’’
after ‘‘livestock changes’’.
SEC. 624. MAXIMUM EMERGENCY LOAN INDEBTEDNESS.

Section 324 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1964) is amended by striking ‘‘SEC. 324. (a) No
loan’’ and all that follows through the end of subsection (a) and
inserting the following:
‘‘SEC. 324. TERMS OF LOANS.

‘‘(a) MAXIMUM AMOUNT OF LOAN.—The Secretary may not make
a loan under this subtitle to a borrower who has suffered a loss
in an amount that—
‘‘(1) exceeds the actual loss caused by a disaster; or
‘‘(2) would cause the total indebtedness of the borrower
under this subtitle to exceed $500,000.’’.
SEC. 625. ESTABLISHMENT OF DATE FOR EMERGENCY LOAN ASSET
VALUATION.

The last sentence of section 324(d) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1964(d)) is amended by striking ‘‘value the assets’’ and all that follows through the period
and inserting ‘‘establish the value of the assets as of the day
before the occurrence of the natural disaster, major disaster, or
emergency that is the basis for a request for assistance under

7 USC 1961 note.

110 STAT. 1092

PUBLIC LAW 104–127—APR. 4, 1996

this subtitle or the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).’’.
SEC. 626. INSURANCE OF EMERGENCY LOANS.

Section 328 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1968) is repealed.

Subtitle D—Administrative Provisions
SEC. 631. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.

Section 331 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981) is amended by adding at the end the following:
‘‘(d) TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) ELIGIBLE FINANCIAL INSTITUTION.—The term
‘eligible financial institution’ means a financial institution
with substantial experience in farm, ranch, or aquaculture
lending that is regulated by the Comptroller of the Currency, the Farm Credit Administration, or a similar regulatory body.
‘‘(B) PILOT PROJECT.—The term ‘pilot project’ includes
services related to borrower loan documentation, financial
information, credit history, and appraisals of real estate
and chattel.
‘‘(2) AUTHORITY.—The Secretary may enter into a contract
with an eligible financial institution for servicing a farmer
program loan under this title, including 1 or more pilot projects.
‘‘(3) REPORT.—Not later than September 30, 1997, and
September 30 of each year thereafter, the Secretary shall report
to Congress on—
‘‘(A) the Secretary’s experience in using contracts under
paragraph (2); and
‘‘(B) recommendations for legislation related to this
subsection, if any.
‘‘(4) SAVINGS CLAUSE.—Nothing in this subsection shall
limit the authority of the Secretary or an eligible financial
institution to contract for any services under this Act or any
other law.
‘‘(5) SUNSET PROVISION.—This subsection shall be effective
until September 30, 2002.’’.
SEC. 632. USE OF COLLECTION AGENCIES.

Section 331 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981) (as amended by section 631) is amended by
adding at the end the following:
‘‘(e) PRIVATE COLLECTION AGENCY.—The Secretary may use
a private collection agency to collect a claim or obligation described
in subsection (b)(5).’’.
SEC. 633. NOTICE OF LOAN SERVICE PROGRAMS.

Section 331D(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981d(a)) is amended by striking ‘‘180 days
delinquent in’’ and inserting ‘‘90 days past due on’’.

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110 STAT. 1093

SEC. 634. CLARIFICATION OF WRITTEN STATEMENT REQUIRED OF
BORROWERS.

Section 333(1)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983(1)(B)) is amended by striking ‘‘a written
statement showing the applicant’s net worth’’ and inserting ‘‘an
appropriate written financial statement’’.
SEC. 635. ANNUAL REVIEW OF THE CREDIT HISTORY, BUSINESS OPERATION, AND CONTINUED ELIGIBILITY OF A BORROWER.

(a) IN GENERAL.—Section 333 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1983) is amended—
(1) by redesignating paragraphs (2), (3), and (4) as paragraphs (3), (4), and (5), respectively; and
(2) by inserting after paragraph (1) the following:
‘‘(2) except with respect to a loan under section 306, 310B,
or 314, the county or area committee established under section
8(b)(5)(B) of the Soil Conservation and Domestic Allotment
Act (16 U.S.C. 590h(b)(5)(B)) to certify in writing—
‘‘(A) that an annual review of the credit history and
business operation of the borrower has been conducted;
and
‘‘(B) that a review of the continued eligibility of the
borrower for the loan has been conducted;’’.
(b) CONFORMING AMENDMENT.—The third sentence of section
310B(a) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 1932(a)) is amended by striking ‘‘(3) of’’ and inserting
‘‘(4) of’’.
SEC. 636. EXTENSION OF VETERANS PREFERENCE.

Section 333 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1983) (as amended by section 635(a)) is amended
by striking paragraph (5) and inserting the following:
‘‘(5) the application of a person who is a veteran of any
war, as defined in section 101(12) of title 38, United States
Code, for a loan under subtitle A or B to be given preference
over a similar application from a person who is not a veteran
of any war, if the applications are on file in a county or
area office at the same time.’’.
SEC. 637. VERIFICATION OF THE CREDIT ELSEWHERE TEST.

Section 333A(f)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1983a(f)(4)) is amended—
(1) by striking ‘‘(4) With’’ and all that follows through
‘‘seasoned’’ and inserting the following:
‘‘(4) VERIFICATION.—
‘‘(A) IN GENERAL.—The Secretary shall provide a
prospectus of a seasoned’’; and
(2) by striking ‘‘If the Secretary’’ and inserting the following:
‘‘(B) NOTIFICATION.—The Secretary shall notify each
borrower of a loan that a prospectus has been provided
to a lender under subparagraph (A).
‘‘(C) CREDIT EXTENDED.—If the Secretary’’.
SEC. 638. SALE OF PROPERTY.

Section 335 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1985) is amended—

110 STAT. 1094

PUBLIC LAW 104–127—APR. 4, 1996
(1) in subsection (b), by striking ‘‘subsection (e)’’ and inserting ‘‘subsections (c) and (e)’’;
(2) by striking subsection (c) and inserting the following:
‘‘(c) SALE OF PROPERTY.—
‘‘(1) IN GENERAL.—Subject to this subsection and subsection
(e)(1)(A), the Secretary shall offer to sell real property that
is acquired by the Secretary under this title using the following
order and method of sale:
‘‘(A) ADVERTISEMENT.—Not later than 15 days after
acquiring real property, the Secretary shall publicly advertise the property for sale.
‘‘(B) BEGINNING FARMER OR RANCHER.—
‘‘(i) IN GENERAL.—Not later than 75 days after
acquiring real property, the Secretary shall offer to
sell the property to a qualified beginning farmer or
rancher at current market value based on a current
appraisal.
‘‘(ii) RANDOM SELECTION.—If more than 1 qualified
beginning farmer or rancher offers to purchase the
property, the Secretary shall select between the qualified applicants on a random basis.
‘‘(iii) APPEAL OF RANDOM SELECTION.—A random
selection or denial by the Secretary of a beginning
farmer or rancher for farm inventory property under
this subparagraph shall be final and not administratively appealable.
‘‘(C) PUBLIC SALE.—If no acceptable offer is received
from a qualified beginning farmer or rancher under
subparagraph (B) not later than 75 days after acquiring
the real property, the Secretary shall, not later than 30
days after the 75-day period, sell the property after public
notice at a public sale, and, if no acceptable bid is received,
by negotiated sale, at the best price obtainable.
‘‘(2) TRANSITIONAL RULES.—
‘‘(A) PREVIOUS LEASE.—In the case of real property
acquired prior to the date of enactment of this subparagraph that the Secretary leased prior to the date of enactment of this subparagraph, not later than 60 days after
the lease expires, the Secretary shall offer to sell the property in accordance with paragraph (1).
‘‘(B) PREVIOUSLY IN INVENTORY.—In the case of real
property acquired prior to the date of enactment of this
subparagraph that the Secretary has not leased, not later
than 60 days after the date of enactment of this subparagraph, the Secretary shall offer to sell the property in
accordance with paragraph (1).
‘‘(3) INTEREST.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), any
conveyance of real property under this subsection shall
include all of the interest of the United States in the
property, including mineral rights.
‘‘(B) CONSERVATION.—The Secretary may for conservation purposes grant or sell an easement, restriction, development right, or similar legal right to real property to
a State, a political subdivision of a State, or a private
nonprofit organization separately from the underlying fee
or other rights to the property owned by the United States.

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110 STAT. 1095

‘‘(4) OTHER LAW.—The Federal Property and Administrative
Services Act of 1949 (40 U.S.C. 471 et seq.) shall not apply
to any exercise of authority under this title.
‘‘(5) LEASE OF PROPERTY.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
Secretary may not lease any real property acquired under
this title.
‘‘(B) EXCEPTION.—
‘‘(i) BEGINNING FARMER OR RANCHER.—The Secretary may lease or contract to sell to a beginning
farmer or rancher a farm or ranch acquired by the
Secretary under this title if the beginning farmer or
rancher qualifies for a credit sale or direct farm ownership loan under subtitle A but credit sale authority
for loans or direct farm ownership loan funds, respectively, are not available.
‘‘(ii) TERM.—The term of a lease or contract to
sell to a beginning farmer or rancher under clause
(i) shall be until the earlier of—
‘‘(I) the date that is 18 months after the date
of the lease or sale; or
‘‘(II) the date that direct farm ownership loan
funds or credit sale authority for loans becomes
available to the beginning farmer or rancher.
‘‘(iii) INCOME-PRODUCING CAPABILITY.—In determining the rental rate on real property leased under
this subparagraph, the Secretary shall consider the
income-producing capability of the property during the
term that the property is leased.
‘‘(6) EXPEDITED DETERMINATION.—
‘‘(A) IN GENERAL.—On the request of an applicant,
not later than 30 days after denial of the applicant’s
application, the appropriate State director shall provide
an expedited review and determination of whether the
applicant is a beginning farmer or rancher for the purpose
of acquiring farm inventory property.
‘‘(B) APPEAL.—The determination of a State Director
under subparagraph (A) shall be final and not administratively appealable.
‘‘(C) EFFECTS OF DETERMINATIONS.—
‘‘(i) IN GENERAL.—The Secretary shall maintain
statistical data on the number and results of determinations made under subparagraph (A) and the effect
of the determinations on—
‘‘(I) selling farm inventory property to beginning farmers and ranchers; and
‘‘(II) disposing of real property in inventory.
‘‘(ii) NOTIFICATION.—The Secretary shall notify the
Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate if the Secretary determines
that the review process under subparagraph (A) is
adversely affecting the selling of farm inventory property to beginning farmers or ranchers or the disposing
of real property in inventory.’’; and
(3) in subsection (e)—
(A) in paragraph (1)—

Records.

110 STAT. 1096

Native
Americans.

PUBLIC LAW 104–127—APR. 4, 1996
(i) by striking subparagraphs (A) through (C);
(ii) by redesignating subparagraphs (D) through
(G) as subparagraphs (A) through (D), respectively;
(iii) in subparagraph (A) (as redesignated by clause
(ii))—
(I) in clause (i)—
(aa) in the matter preceding subclause (I),
by striking ‘‘(G)’’ and inserting ‘‘(D)’’;
(bb) by striking subclause (I) and inserting
the following:
‘‘(I) the Secretary acquires property under this title that
is located within an Indian reservation; and’’;
(cc) in subclause (II), by striking ‘‘, and’’
at the end and inserting a semicolon; and
(dd) by striking subclause (III); and
(II) in clause (iii), by striking ‘‘The Secretary
shall’’ and all that follows through ‘‘of subparagraph (A),’’ and inserting ‘‘Not later than 90 days
after acquiring the property, the Secretary shall’’;
and
(iv) in subparagraph (D) (as redesignated by clause
(ii))—
(I) in clause (i), by striking ‘‘(D)’’ in the matter
following subclause (IV) and inserting ‘‘(A)’’;
(II) in clause (iii)(I), by striking ‘‘subparagraphs (C)(i), (C)(ii), and (D)’’ and inserting
‘‘subparagraph (A)’’; and
(III) by striking clause (v) and inserting the
following:
‘‘(v) FORECLOSURE PROCEDURES.—
‘‘(I) NOTICE TO BORROWER.—If an Indian borrower-owner does not voluntarily convey to the
Secretary real property described in clause (i), not
less than 30 days before a foreclosure sale of the
property, the Secretary shall provide the Indian
borrower-owner with the option of—
‘‘(aa) requiring the Secretary to assign the
loan and security instruments to the Secretary
of the Interior, if the Secretary of the Interior
agrees to an assignment releasing the Secretary of Agriculture from all further responsibility for collection of any amounts with
regard to the loan secured by the real property;
or
‘‘(bb) requiring the Secretary to assign the
loan and security instruments to the tribe having jurisdiction over the reservation in which
the real property is located, if the tribe agrees
to the assignment.
‘‘(II) NOTICE TO TRIBE.—If an Indian borrowerowner does not voluntarily convey to the Secretary
real property described in clause (i), not less than
30 days before a foreclosure sale of the property,
the Secretary shall provide written notice to the
Indian tribe that has jurisdiction over the reservation in which the real property is located of—
‘‘(aa) the sale;

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110 STAT. 1097

‘‘(bb) the fair market value of the property;
and
‘‘(cc) the requirements of this subparagraph.
‘‘(III) ASSUMED LOANS.—If an Indian tribe
assumes a loan under subclause (I)—
‘‘(aa) the Secretary shall not foreclose the
loan because of any default that occurred prior
to the date of the assumption;
‘‘(bb) the loan shall be for the lesser of
the outstanding principal and interest of the
loan or the fair market value of the property;
and
‘‘(cc) the loan shall be treated as though
the loan was made under Public Law 91–229
(25 U.S.C. 488 et seq.).’’;
(B) by striking paragraph (3);
(C) in paragraph (4)—
(i) by striking subparagraph (B);
(ii) in subparagraph (A)—
(I) in clause (i), by striking ‘‘(i)’’; and
(II) by redesignating clause (ii) as subparagraph (B); and
(iii) in subparagraph (B) (as redesignated by clause
(ii)(II)), by striking ‘‘clause (i)’’ and inserting ‘‘subparagraph (A)’’;
(D) by striking paragraphs (5), (6), and (9); and
(E) by redesignating paragraphs (4), (7), (8), and (10)
as paragraphs (3), (4), (5), and (6), respectively.
SEC. 639. EASEMENTS ON INVENTORIED PROPERTY.

Section 335(g) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1985(g)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘(g)(1) Subject to paragraphs (2) through
(5)’’ and inserting the following:
‘‘(g) EASEMENTS ON INVENTORIED PROPERTY.—
‘‘(1) IN GENERAL.—Subject to paragraph (2)’’; and
(B) by striking ‘‘, as determined’’ and all that follows
through ‘‘3801 et seq.)’’;
(2) by striking paragraph (2) and inserting the following:
‘‘(2) LIMITATION.—The Secretary shall not establish a wetland conservation easement on an inventoried property that—
‘‘(A) was cropland on the date the property entered
the inventory of the Secretary; or
‘‘(B) was used for farming at any time during the
period beginning on the date 5 years before the property
entered the inventory of the Secretary and ending on the
date the property entered the inventory of the Secretary.’’;
(3) by striking paragraphs (3), (4), (5), and (8);
(4) by striking ‘‘(6) The Secretary’’ and inserting the following:
‘‘(3) NOTIFICATION.—The Secretary’’; and
(5) by striking ‘‘(7) The appraised’’ and inserting the following:
‘‘(4) APPRAISED VALUE.—The appraised’’.

110 STAT. 1098

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 640. DEFINITIONS.

Section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)) is amended—
(1) in paragraph (11)—
(A) in the text preceding subparagraph (A), by striking
‘‘applicant—’’ and inserting ‘‘applicant, regardless of
whether the applicant is participating in a program under
section 310E—’’; and
(B) in subparagraph (F)—
(i) by striking ‘‘15 percent’’ and inserting ‘‘25 percent’’; and
(ii) by inserting before the semicolon at the end
the following: ‘‘, except that this subparagraph shall
not apply to a loan made or guaranteed under subtitle
B’’; and
(2) by adding at the end the following:
‘‘(12) DEBT FORGIVENESS.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), the term ‘debt forgiveness’ means reducing or terminating a farmer program loan made or guaranteed under
this title, in a manner that results in a loss to the Secretary, through—
‘‘(i) writing down or writing off a loan under section
353;
‘‘(ii) compromising, adjusting, reducing, or charging-off a debt or claim under section 331;
‘‘(iii) paying a loss on a guaranteed loan under
section 357; or
‘‘(iv) discharging a debt as a result of bankruptcy.
‘‘(B) LOAN RESTRUCTURING.—The term ‘debt forgiveness’ does not include consolidation, rescheduling,
reamortization, or deferral.’’.
SEC. 641. AUTHORIZATION FOR LOANS.

Section 346 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1994) is amended—
(1) in the second sentence of subsection (a), by striking
‘‘with or without’’ and all that follows through ‘‘administration’’;
and
(2) by striking subsection (b) and inserting the following:
‘‘(b) AUTHORIZATION FOR LOANS.—
‘‘(1) IN GENERAL.—The Secretary may make or guarantee
loans under subtitles A and B from the Agricultural Credit
Insurance Fund provided for in section 309 in not more than
the following amounts:
‘‘(A) FISCAL YEAR 1996.—For fiscal year 1996,
$3,085,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,500,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $600,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and

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110 STAT. 1099

‘‘(II) $1,900,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(B) FISCAL YEAR 1997.—For fiscal year 1997,
$3,165,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,580,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $630,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and
‘‘(II) $1,950,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(C) FISCAL YEAR 1998.—For fiscal year 1998,
$3,245,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,660,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $660,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and
‘‘(II) $2,000,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(D) FISCAL YEAR 1999.—For fiscal year 1999,
$3,325,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,740,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $690,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and
‘‘(II) $2,050,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(E) FISCAL YEAR 2000.—For fiscal year 2000,
$3,435,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,850,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $750,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and

110 STAT. 1100

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(II) $2,100,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(F) FISCAL YEAR 2001.—For fiscal year 2001,
$3,435,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,850,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $750,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and
‘‘(II) $2,100,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(G) FISCAL YEAR 2002.—For fiscal year 2002,
$3,435,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,850,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $750,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and
‘‘(II) $2,100,000,000 shall be for guarantees
of operating loans under subtitle B.
‘‘(2) BEGINNING FARMERS AND RANCHERS.—
‘‘(A) DIRECT LOANS.—
‘‘(i) FARM OWNERSHIP LOANS.—
‘‘(I) IN GENERAL.—Of the amounts made available under paragraph (1) for direct farm ownership
loans, the Secretary shall reserve 70 percent for
qualified beginning farmers and ranchers.
‘‘(II) DOWN PAYMENT LOANS.—Of the amounts
reserved for a fiscal year under subclause (I), the
Secretary shall reserve 60 percent for the down
payment loan program under section 310E until
April 1 of the fiscal year.
‘‘(ii) OPERATING LOANS.—Of the amounts made
available under paragraph (1) for direct operating
loans, the Secretary shall reserve for qualified beginning farmers and ranchers—
‘‘(I) for each of fiscal years 1996 through 1998,
25 percent;
‘‘(II) for fiscal year 1999, 30 percent; and
‘‘(III) for each of fiscal years 2000 through
2002, 35 percent.
‘‘(iii) FUNDS RESERVED UNTIL SEPTEMBER 1.—
Except as provided in clause (i)(II), funds reserved
for qualified beginning farmers or ranchers under this
subparagraph for a fiscal year shall be reserved only
until September 1 of the fiscal year.
‘‘(B) GUARANTEED LOANS.—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1101

‘‘(i) FARM OWNERSHIP LOANS.—Of the amounts
made available under paragraph (1) for guarantees
of farm ownership loans, the Secretary shall reserve
25 percent for qualified beginning farmers and ranchers.
‘‘(ii) OPERATING LOANS.—Of the amounts made
available under paragraph (1) for guarantees of operating loans, the Secretary shall reserve 40 percent for
qualified beginning farmers and ranchers.
‘‘(iii) FUNDS RESERVED UNTIL APRIL 1.—Funds
reserved for qualified beginning farmers or ranchers
under this subparagraph for a fiscal year shall be
reserved only until April 1 of the fiscal year.
‘‘(C) RESERVED FUNDS FOR ALL QUALIFIED BEGINNING
FARMERS AND RANCHERS.—If a qualified beginning farmer
or rancher meets the eligibility criteria for receiving a
direct or guaranteed loan under section 302, 310E, or 311,
the Secretary shall make or guarantee the loan if sufficient
funds reserved under this paragraph are available to make
or guarantee the loan.
‘‘(3) TRANSFER FOR DOWN PAYMENT LOANS.—
‘‘(A) IN GENERAL.—Notwithstanding subsection (a), subject to subparagraph (B)—
‘‘(i) beginning on August 1 of each fiscal year,
the Secretary shall use available unsubsidized guaranteed farm operating loan funds to provide direct farm
ownership loans approved by the Secretary to qualified
beginning farmers and ranchers under the down payment loan program established under section 310E,
if sufficient direct farm ownership loan funds are not
otherwise available; and
‘‘(ii) beginning on September 1 of each fiscal year,
the Secretary shall use available unsubsidized guaranteed farm operating loan funds to provide direct farm
ownership loans approved by the Secretary to qualified
beginning farmers and ranchers, if sufficient direct
farm ownership loan funds are not otherwise available.
‘‘(B) LIMITATION.—The Secretary shall limit the transfer of funds under subparagraph (A) so that all guaranteed
farm operating loans that have been approved, or will
be approved, by the Secretary during the fiscal year will
be made to the extent of available amounts.
‘‘(4) TRANSFER FOR CREDIT SALES OF FARM INVENTORY PROPERTY.—
‘‘(A) IN GENERAL.—Notwithstanding subsection (a), subject to subparagraphs (B) and (C), beginning on September
1 of each fiscal year, the Secretary may use available
funds made available under subtitle C for the fiscal year
to fund the credit sale of farm real estate in the inventory
of the Secretary.
‘‘(B) SUPPLEMENTAL APPROPRIATIONS.—The transfer
authority provided under subparagraph (A) shall not apply
to any funds made available to the Secretary for any fiscal
year under an Act making supplemental appropriations.
‘‘(C) LIMITATION.—The Secretary shall limit the transfer of funds under subparagraph (A) so that all emergency
disaster loans that have been approved, or will be approved,

Effective date.

110 STAT. 1102

PUBLIC LAW 104–127—APR. 4, 1996
by the Secretary during the fiscal year will be made to
the extent of available amounts.’’.

SEC. 642. CONTRACTS ON LOAN SECURITY PROPERTIES.

Section 349 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1997) is amended—
(1) by striking subsection (b) and inserting the following:
‘‘(b) CONTRACTS ON LOAN SECURITY PROPERTIES.—Subject to
subsection (c), the Secretary may enter into a contract related
to real property for conservation, recreation, or wildlife purposes.’’;
(2) in subsection (c)—
(A) by striking ‘‘(c) Such easement’’ and all that follows
through ‘‘if—’’ and inserting the following:
‘‘(c) LIMITATIONS.—The Secretary may enter into a contract
under subsection (b) if—’’;
(B) in paragraph (2), by adding ‘‘and’’ at the end;
(C) in paragraph (3)—
(i) by striking subparagraph (B);
(ii) by striking ‘‘(3)(A)(i)’’ and inserting ‘‘(3)(A)’’;
(iii) by striking ‘‘Farmers Home Administration’’
and inserting ‘‘Secretary’’;
(iv) by striking ‘‘(ii) such easement’’ and inserting
‘‘(B) such contract’’; and
(v) by striking ‘‘; or’’ and inserting a period; and
(D) by striking paragraph (4);
(3) in subsection (d), by striking ‘‘easement’’ each place
it appears and inserting ‘‘contract’’;
(4) in subsection (e)—
(A) in paragraph (1)—
(i) in the matter preceding subparagraph (A), by
striking ‘‘purchase any such easement from the borrower—’’ and inserting ‘‘reduce or forgive the outstanding debt of a borrower—’’;
(ii) by striking ‘‘easement’’ each place it appears
and inserting ‘‘contract’’; and
(iii) by striking ‘‘Farmers Home Administration’’
each place it appears and inserting ‘‘Secretary’’; and
(B) in paragraph (2)(A), by striking ‘‘easement is
acquired’’ and inserting ‘‘contract is entered into’’;
(5) in subsection (f)—
(A) in paragraph (1), by striking ‘‘acquire easements’’
and inserting ‘‘enter into contracts’’; and
(B) in paragraphs (2) and (3), by striking ‘‘easements’’
each place it appears and inserting ‘‘contracts’’; and
(6) in subsection (g), by striking ‘‘an easement acquired’’
and inserting ‘‘a contract entered into’’.
SEC. 643. LIST OF CERTIFIED LENDERS AND INVENTORY PROPERTY
DEMONSTRATION PROJECT.

(a) IN GENERAL.—Section 351 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1999) is amended—
(1) in subsection (f)—
(A) by striking ‘‘Each Farmers Home Administration
county supervisor’’ and inserting ‘‘The Secretary’’;
(B) by striking ‘‘approved lenders’’ and inserting ‘‘lenders’’; and
(C) by striking ‘‘the Farmers Home Administration’’;
and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1103

(2) by striking subsection (h).
(b) TECHNICAL AMENDMENT.—Section 1320 of the Food Security
Act of 1985 (Public Law 99–198; 7 U.S.C. 1999 note) is amended
by striking ‘‘Effective only’’ and all that follows through ‘‘1995,
the’’ and inserting ‘‘The’’.
SEC. 644. HOMESTEAD PROPERTY.

Section 352(c) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2000(c)) is amended—
(1) in paragraph (1)(A), by striking ‘‘90’’ each place it
appears and inserting ‘‘30’’; and
(2) in paragraph (6)—
(A) in the first sentence, by striking ‘‘Within 30’’ and
all that follows through ‘‘title,’’ and insert ‘‘Not later than
the date of acquisition of the property securing a loan
made under this title (or, in the case of real property
in inventory on the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996, not later
than 5 days after the date of enactment of the Act),’’;
and
(B) by striking the second sentence.
SEC. 645. RESTRUCTURING.

Section 353 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2001) is amended—
(1) in subsection (c)—
(A) in paragraph (3), by striking subparagraph (C)
and inserting the following:
‘‘(C) CASH FLOW MARGIN.—For the purpose of assessing
under subparagraph (A) the ability of a borrower to meet
debt obligations and continue farming operations, the Secretary shall assume that the borrower needs up to 110
percent of the amount indicated for payment of farm operating expenses, debt service obligations, and family living
expenses.’’; and
(B) by striking paragraph (6) and inserting the following:
‘‘(6) TERMINATION OF LOAN OBLIGATIONS.—The obligations
of a borrower to the Secretary under a loan shall terminate
if—
‘‘(A) the borrower satisfies the requirements of paragraphs (1) and (2) of subsection (b);
‘‘(B) the value of the restructured loan is less than
the recovery value; and
‘‘(C) not later than 90 days after receipt of the notification described in paragraph (4)(B), the borrower pays (or
obtains third-party financing to pay) the Secretary an
amount equal to the current market value.’’;
(2) by striking subsection (k); and
(3) by redesignating subsections (l) through (p) as subsections (k) through (o), respectively.
SEC. 646. TRANSFER OF INVENTORY LAND FOR CONSERVATION PURPOSES.

Section 354 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2002) is amended—
(1) in the matter preceding paragraph (1), by striking ‘‘The
Secretary, without reimbursement,’’ and inserting the following:

110 STAT. 1104

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(a) IN GENERAL.—Subject to subsection (b), the Secretary’’;
(2) by striking paragraph (2) and inserting the following:
‘‘(2) that is eligible to be disposed of in accordance with
section 335; and’’; and
(3) by adding at the end the following:
‘‘(b) CONDITIONS.—The Secretary may not transfer any property
or interest in property under subsection (a) unless—
‘‘(1) at least 2 public notices are given of the transfer;
‘‘(2) if requested, at least 1 public meeting is held prior
to the transfer; and
‘‘(3) the Governor and at least 1 elected county official
of the State and county where the property is located are
consulted prior to the transfer.’’.
SEC. 647. IMPLEMENTATION OF TARGET PARTICIPATION RATES.

Section 355 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2003) is amended by adding at the end the following:
‘‘(f) IMPLEMENTATION CONSISTENT WITH SUPREME COURT HOLDING.—Not later than 180 days after the date of enactment of this
subsection, the Secretary shall ensure that the implementation
of this section is consistent with the holding of the Supreme Court
in Adarand Constructors, Inc. v. Federico Pena, Secretary of
Transportation, 115 S. Ct. 2097 (1995).’’.
SEC. 648. DELINQUENT BORROWERS.

(a) PAYMENT OF INTEREST AS A CONDITION OF LOAN SERVICING
BORROWERS.—The Consolidated Farm and Rural Development
Act (7 U.S.C. 1921 et seq.) is amended by adding at the end
the following:
FOR

7 USC 2008g.

‘‘SEC. 372. PAYMENT OF INTEREST AS A CONDITION OF LOAN SERVICING FOR BORROWERS.

‘‘The Secretary may not reschedule or reamortize a loan for
a borrower under this title who has not requested consideration
under section 331D(e) unless the borrower pays a portion, as determined by the Secretary, of the interest due on the loan.’’.
(b) LOAN AND LOAN SERVICING LIMITATIONS.—The Consolidated
Farm and Rural Development Act (7 U.S.C. 1921 et seq.) (as amended by subsection (a)) is amended by adding at the end the following:
7 USC 2008h.

‘‘SEC. 373. LOAN AND LOAN SERVICING LIMITATIONS.

‘‘(a) DELINQUENT BORROWERS PROHIBITED FROM OBTAINING
DIRECT OPERATING LOANS.—The Secretary may not make a direct
operating loan under subtitle B to a borrower who is delinquent
on any loan made or guaranteed under this title.
‘‘(b) LOANS PROHIBITED FOR BORROWERS THAT HAVE RECEIVED
DEBT FORGIVENESS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the Secretary may not make or guarantee a loan under this
title to a borrower who received debt forgiveness on a loan
made or guaranteed under this title.
‘‘(2) EXCEPTION.—The Secretary may make a direct or
guaranteed farm operating loan for paying annual farm or
ranch operating expenses of a borrower who was restructured
with a write-down under section 353.
‘‘(c) NO MORE THAN 1 DEBT FORGIVENESS FOR A BORROWER
ON A DIRECT LOAN.—The Secretary may not provide to a borrower
debt forgiveness on a direct loan made under this title if the

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1105

borrower has received debt forgiveness on another direct loan made
under this title.’’.
SEC. 649. SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWER COMPLIANCE.

The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) (as amended by section 648) is amended by adding
at the end the following:
‘‘SEC. 374. SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWER COMPLIANCE.

7 USC 2008i.

‘‘The Secretary shall develop and utilize a consolidated short
form for farm program borrowers to use in certifying compliance
with any applicable provision of law (including a regulation) that
serves as an eligibility prerequisite for a loan made under this
title.’’.
SEC. 650. CREDIT STUDY.

7 USC 2001 note.

(a) IN GENERAL.—The Secretary of Agriculture shall conduct
a study and report to the Committee on Agriculture of the House
of Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate on the demand for and availability
of credit in rural areas for agriculture, housing, and rural development.
(b) PURPOSE.—The purpose of the study shall be to ensure
that Congress has current and comprehensive information to consider as Congress deliberates on rural credit needs and the availability of credit to satisfy the needs of rural areas of the United
States.
(c) ITEMS IN STUDY.—In conducting the study, the Secretary
shall base the study on the most current available data and analyze—
(1) rural demand for credit from the Farm Credit System,
the ability of the Farm Credit System to meet the demand,
and the extent to which the Farm Credit System provides
loans to satisfy the demand;
(2) rural demand for credit from the United States banking
system, the ability of banks to meet the demand, and the
extent to which banks provide loans to satisfy the demand;
(3) rural demand for credit from the Secretary, the ability
of the Secretary to meet the demand, and the extent to which
the Secretary provides loans to satisfy the demand;
(4) rural demand for credit from other Federal agencies,
the ability of the agencies to meet the demand, and the extent
to which the agencies provide loans to satisfy the demand;
(5) what measure or measures exist to gauge the overall
demand for rural credit, the extent to which rural demand
for credit is satisfied, and what the measures have demonstrated;
(6) a comparison of the interest rates and terms charged
by the Farm Credit System Farm Credit Banks, production
credit associations, and banks for cooperatives with the rates
and terms charged by the banks of the United States for credit
of comparable risk and maturity;
(7) the advantages and disadvantages of the modernization
and expansion proposals of the Farm Credit System on the
Farm Credit System, the United States banking system, rural

Reports.

110 STAT. 1106

PUBLIC LAW 104–127—APR. 4, 1996

users of credit, local rural communities, and the Federal
Government, including—
(A) any added risk to the safety and soundness of
the Farm Credit System that may result from approval
of a proposal; and
(B) any positive or adverse impacts on competition
between the Farm Credit System and the banks of the
United States in providing credit to rural users;
(8) the nature and extent of the unsatisfied rural credit
need that the Farm Credit System proposals are supposed
to address and what aspects of the present Farm Credit System
prevent the Farm Credit System from meeting the need;
(9) the advantages and disadvantages of the proposal by
commercial bankers to allow banks access to the Farm Credit
System as a funding source on the Farm Credit System, the
United States banking system, rural users of credit, local rural
communities, and the Federal Government, including—
(A) any added risk to the safety and soundness of
the Farm Credit System that may result from approval
of the proposal; and
(B) any positive or adverse impacts on competition
between the Farm Credit System and the banks of the
United States in providing credit to rural users; and
(10) problems that commercial banks have in obtaining
capital for lending in rural areas, how access to Farm Credit
System funds would improve the availability of capital in rural
areas in ways that cannot be achieved in the system in existence
on the date of enactment of this Act, and the possible effects
on the viability of the Farm Credit System of granting banks
access to Farm Credit System funds.
(d) INTERAGENCY TASK FORCE.—In completing the study, the
Secretary shall use, among other things, data and information
obtained by the interagency task force on rural credit.

Subtitle E—General Provisions
SEC. 661. CONFORMING AMENDMENTS.

(a) Section 307(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)) is amended—
(1) in paragraph (4), by striking ‘‘304(b), 306(a)(1), and
310B’’ and inserting ‘‘306(a)(1) and 310B’’; and
(2) in paragraph (6)(B)—
(A) by striking clauses (i), (ii), (iv), and (vii);
(B) in clause (v), by adding ‘‘and’’ at the end;
(C) in clause (vi), by striking ‘‘, and’’ at the end and
inserting a period; and
(D) by redesignating clauses (iii), (v), and (vi) as clauses
(i), (ii), and (iii), respectively.
(b) The second sentence of section 309(g)(1) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1929(g)(1)) is amended
by striking ‘‘section 308,’’.
(c) Section 309A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929a) is amended—
(1) in the second sentence of subsection (a), by striking
‘‘304(b), 306(a)(1), 306(a)(14), 310B, and 312(b)’’ and inserting
‘‘306(a)(1), 306(a)(14), and 310B’’; and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1107

(2) in the first sentence of subsection (b), by striking ‘‘and
section 308’’.
(d) Section 310B(d) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(d)) is amended—
(1) by striking ‘‘sections 304(b), 310B, and 312(b)’’ each
place it appears in paragraphs (2), (3), and (4) and inserting
‘‘this section’’; and
(2) in paragraph (6), by striking ‘‘this section, section 304,
or section 312’’ and inserting ‘‘this section’’.
(e) The first sentence of section 310D(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1934(a)) is amended
by striking ‘‘paragraphs (1) through (5) of section 303(a), or subparagraphs (A) through (E) of section 304(a)(1)’’ and inserting ‘‘section
303(a), or paragraphs (1) through (5) of section 304(a)’’.
(f) Section 311(b)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(b)(1)) is amended by striking ‘‘and for
the purposes specified in section 312’’.
(g) Section 316(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)) is amended by striking paragraph
(3).
(h) Section 343 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991) is amended—
(1) in subsection (a)(10), by striking ‘‘recreation loan (RL)
under section 304,’’; and
(2) in subsection (b)—
(A) in the matter preceding paragraph (1), by striking
‘‘351(h),’’; and
(B) by striking paragraph (4) and inserting the following:
‘‘(4) PRESERVATION LOAN SERVICE PROGRAM.—The term
‘preservation loan service program’ means homestead retention
as authorized under section 352.’’.
(i) The first sentence of section 344 of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1992) is amended by striking
‘‘304(b), 306(a)(1), 310B, 312(b), or 312(c)’’ and inserting ‘‘306(a)(1),
310B, or 312(c)’’.
(j) Section 353(l) of the Consolidated Farm and Rural Development Act (as redesignated by section 645(3)) is amended by striking
‘‘and subparagraphs (A)(i) and (C)(i) of section 335(e)(1),’’.
SEC. 662. ELECTRONIC FILING OF EFFECTIVE FINANCING STATEMENTS UNDER THE CLEAR TITLE PROVISIONS OF THE
FOOD SECURITY ACT OF 1985.

Section 1324(c)(4) of the Food Security Act of 1985 (7 U.S.C.
1631(c)(4)) is amended—
(1) in subparagraph (A), by striking ‘‘thereof’’ and inserting
‘‘of the statement, or, in the case of a State which (under
the applicable State law provisions of the Uniform Commercial
Code) allows the electronic filing of financing statements without the signature of the debtor, is an electronically reproduced
copy of the statement’’; and
(2) in each of subparagraphs (B) and (C), by inserting
‘‘other than in the case of an electronically reproduced copy
of the statement,’’ before ‘‘is’’.

110 STAT. 1108
7 USC 1922 note.

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 663. EFFECTIVE DATE.

(a) IN GENERAL.—Except as provided in subsection (b), the
amendments made by this title shall become effective on the date
of enactment of this Act.
(b) DELAYED EFFECTIVE DATES.—The amendments made by
sections 601, 606, 611, 612, 622, 623, 625, 633, 640(1), 642, 645(1),
648(a), and 649 shall become effective 90 days after the date of
enactment of this Act.
(c) TRANSITION PROVISION.—The amendments made by sections
638 and 644 shall not apply with respect to a complete application
to acquire inventory property submitted prior to the date of enactment of this Act.
(d) REGULATIONS.—Notwithstanding any other provision of law,
regulations to implement the amendments made by this title shall
be published as interim final rules with request for comments
and may be made effective immediately on publication.

TITLE VII—RURAL DEVELOPMENT
Subtitle A—Amendments to the Food, Agriculture, Conservation, and Trade Act of
1990
CHAPTER 1—GENERAL PROVISIONS
SEC. 701. RURAL INVESTMENT PARTNERSHIPS.

Subtitle B of title XXIII of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 2007 et seq.) is repealed.
SEC. 702. WATER AND WASTE FACILITY FINANCING.

Section 2322 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 1926–1) is repealed.
SEC. 703. RURAL WASTEWATER CIRCUIT RIDER PROGRAM.

Section 2324 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 7 U.S.C. 1926 note) is repealed.
SEC. 704. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN
RURAL AREAS.

Chapter 1 of subtitle D of title XXIII of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa et seq.)
is amended to read as follows:
‘‘CHAPTER 1—TELEMEDICINE AND DISTANCE
LEARNING SERVICES IN RURAL AREAS
7 USC 950aaa.

‘‘SEC. 2331. PURPOSE.

‘‘The purpose of this chapter is to encourage and improve
telemedicine services and distance learning services in rural areas
through the use of telecommunications, computer networks, and
related advanced technologies by students, teachers, medical professionals, and rural residents.
7 USC 950aaa–1.

‘‘SEC. 2332. DEFINITIONS.

‘‘In this chapter:

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1109

‘‘(1) CONSTRUCT.—The term ‘construct’ means to construct,
acquire, install, improve, or extend a facility or system.
‘‘(2) COST OF MONEY LOAN.—The term ‘cost of money loan’
means a loan made under this chapter bearing interest at
a rate equal to the then current cost to the Federal Government
of loans of similar maturity.
‘‘(3) SECRETARY.—The term ‘Secretary’ means the Secretary
of Agriculture.
‘‘SEC. 2333. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN
RURAL AREAS.

‘‘(a) SERVICES TO RURAL AREAS.—The Secretary may provide
financial assistance for the purpose of financing the construction
of facilities and systems to provide telemedicine services and distance learning services in rural areas.
‘‘(b) FINANCIAL ASSISTANCE.—
‘‘(1) IN GENERAL.—Financial assistance shall consist of
grants or cost of money loans, or both.
‘‘(2) FORM.—The Secretary shall determine the portion of
the financial assistance provided to a recipient that consists
of grants and the portion that consists of cost of money loans
so as to result in the maximum feasible repayment to the
Federal Government of the financial assistance, based on the
ability to repay of the recipient and full utilization of funds
made available to carry out this chapter.
‘‘(c) RECIPIENTS.—
‘‘(1) IN GENERAL.—The Secretary may provide financial
assistance under this chapter to—
‘‘(A) entities using telemedicine services or distance
learning services; and
‘‘(B) entities providing or proposing to provide
telemedicine service or distance learning service to other
persons at rates calculated to ensure that the benefit of
the financial assistance is passed through to the other
persons.
‘‘(2) ELECTRIC OR TELECOMMUNICATIONS BORROWERS.—
‘‘(A) LOANS TO BORROWERS.—Subject to subparagraph
(B), the Secretary may provide a cost of money loan under
this chapter to a borrower of an electric or telecommunications loan under the Rural Electrification Act of 1936
(7 U.S.C. 901 et seq.). A borrower receiving a cost of money
loan under this paragraph shall—
‘‘(i) make the funds provided available to entities
that qualify under paragraph (1) for projects satisfying
the requirements of this chapter;
‘‘(ii) use the funds provided to acquire, install,
improve, or extend a system referred to in subsection
(a); or
‘‘(iii) use the funds provided to install, improve,
or extend a facility referred to in subsection (a).
‘‘(B) LIMITATIONS.—A borrower of an electric or telecommunications loan under the Rural Electrification Act
of 1936 shall—
‘‘(i) make a system or facility funded under
subparagraph (A) available to entities that qualify
under paragraph (1); and

7 USC 950aaa–2.

110 STAT. 1110

Federal Register,
publication.

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(ii) neither retain from the proceeds of a loan
provided under subparagraph (A), nor assess a qualifying entity under paragraph (1), any amount except
as may be required to pay the actual costs incurred
in administering the loan or making the system or
facility available.
‘‘(3) APPEAL.—If the Secretary rejects the application of
a borrower who applies for a cost of money loan or grant
under this section, the borrower may appeal the decision to
the Secretary not later than 10 days after the borrower is
notified of the rejection.
‘‘(4) ASSISTANCE TO PROVIDE OR IMPROVE SERVICES.—Financial assistance may be provided under this chapter for a facility
regardless of the location of the facility if the Secretary determines that the assistance is necessary to provide or improve
telemedicine services or distance learning services in a rural
area.
‘‘(d) PRIORITY.—The Secretary shall establish procedures to
prioritize financial assistance under this chapter considering—
‘‘(1) the need for the assistance in the affected rural area;
‘‘(2) the financial need of the applicant;
‘‘(3) the population sparsity of the affected rural area;
‘‘(4) the local involvement in the project serving the affected
rural area;
‘‘(5) geographic diversity among the recipients of financial
assistance;
‘‘(6) the utilization of the telecommunications facilities of
any telecommunications provider serving the affected rural
area;
‘‘(7) the portion of total project financing provided by the
applicant from the funds of the applicant;
‘‘(8) the portion of project financing provided by the
applicant with funds obtained from non-Federal sources;
‘‘(9) the joint utilization of facilities financed by other financial assistance;
‘‘(10) the coordination of the proposed project with regional
projects or networks;
‘‘(11) service to the greatest practical number of persons
within the general geographic area covered by the financial
assistance;
‘‘(12) conformity with the State strategic plan as prepared
under section 381D of the Consolidated Farm and Rural Development Act; and
‘‘(13) other factors determined appropriate by the Secretary.
‘‘(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDIVIDUAL RECIPIENTS.—The Secretary may establish the maximum amount of financial assistance to be made available to an individual recipient
for each fiscal year under this chapter, by publishing notice of
the maximum amount in the Federal Register not more than 45
days after funds are made available for the fiscal year to carry
out this chapter.
‘‘(f) USE OF FUNDS.—Financial assistance provided under this
chapter shall be used for—
‘‘(1) the development and acquisition of instructional
programming;
‘‘(2) the development and acquisition, through lease or purchase, of computer hardware and software, audio and visual

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1111

equipment, computer network components, telecommunications
terminal equipment, telecommunications transmission facilities, data terminal equipment, or interactive video equipment,
or other facilities that would further telemedicine services or
distance learning services;
‘‘(3) providing technical assistance and instruction for the
development or use of the programming, equipment, or facilities
referred to in paragraphs (1) and (2); or
‘‘(4) other uses that are consistent with this chapter, as
determined by the Secretary.
‘‘(g) SALARIES AND EXPENSES.—Notwithstanding subsection (f),
financial assistance provided under this chapter shall not be used
for paying salaries or administrative expenses.
‘‘(h) EXPEDITING COORDINATED TELEPHONE LOANS.—
‘‘(1) IN GENERAL.—The Secretary may establish and carry
out procedures to ensure that expedited consideration and
determination is given to applications for loans and advances
of funds submitted by local exchange carriers under this chapter
and the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.) to enable the exchange carriers to provide advanced telecommunications services in rural areas in conjunction with
any other projects carried out under this chapter.
‘‘(2) DEADLINE IMPOSED ON SECRETARY.—Not later than
45 days after the receipt of a completed application for an
expedited telephone loan under paragraph (1), the Secretary
shall notify the applicant in writing of the decision of the
Secretary regarding the application.
‘‘(i) NOTIFICATION OF LOCAL EXCHANGE CARRIER.—
‘‘(1) APPLICANTS.—Each applicant for a grant for a
telemedicine or distance learning project established under this
chapter shall notify the appropriate local telephone exchange
carrier regarding the application filed with the Secretary for
the grant.
‘‘(2) SECRETARY.—The Secretary shall—
‘‘(A) publish notice of applications received for grants
under this chapter for telemedicine or distance learning
projects; and
‘‘(B) make the applications available for inspection.
‘‘SEC. 2334. ADMINISTRATION.

‘‘(a) NONDUPLICATION.—The Secretary shall ensure that facilities constructed using financial assistance provided under this chapter do not duplicate adequate established telemedicine services
or distance learning services.
‘‘(b) LOAN MATURITY.—The maturities of cost of money loans
shall be determined by the Secretary, based on the useful life
of the facility being financed, except that the loan shall not be
for a period of more than 10 years.
‘‘(c) LOAN SECURITY AND FEASIBILITY.—The Secretary shall
make a cost of money loan only if the Secretary determines that
the security for the loan is reasonably adequate and that the
loan will be repaid within the period of the loan.
‘‘(d) ENCOURAGING CONSORTIA.—The Secretary shall encourage
the development of consortia to provide telemedicine services or
distance learning services through telecommunications in rural
areas served by a telecommunications provider.

Notification.

7 USC 950aaa–3.

110 STAT. 1112

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‘‘(e) COORDINATION WITH OTHER AGENCIES.—The Secretary
shall coordinate, to the extent practicable, with other Federal and
State agencies with similar grant or loan programs to pool resources
for funding meritorious proposals in rural areas.
‘‘(f) INFORMATIONAL EFFORTS.—The Secretary shall establish
and implement procedures to carry out informational efforts to
advise potential end users located in rural areas of each State
about the program authorized by this chapter.
7 USC 950aaa–4.

‘‘SEC. 2335. REGULATIONS.

‘‘Not later than 180 days after the date of enactment of the
Federal Agriculture Improvement and Reform Act of 1996, the
Secretary shall issue regulations to carry out this chapter.
7 USC 950aaa–5.

‘‘SEC. 2335A. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated to carry out this
chapter $100,000,000 for each of fiscal years 1996 through 2002.’’.
SEC. 705. LIMITATION ON AUTHORIZATION OF APPROPRIATIONS FOR
RURAL TECHNOLOGY GRANTS.

7 USC 1932.

Section 2347 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 104 Stat. 4034) is amended—
(1) by striking ‘‘(a) IN GENERAL.—’’; and
(2) by striking subsection (b).
SEC. 706. DEMONSTRATION PROJECTS.

Section 2348 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 2662a) is repealed.
SEC. 707. MONITORING THE ECONOMIC PROGRESS OF RURAL AMERICA.

Section 2382 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 13 U.S.C. 141 note) is repealed.
SEC. 708. ANALYSIS BY OFFICE OF TECHNOLOGY ASSESSMENT.

Section 2385 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 7 U.S.C. 950aaa–4 note) is
repealed.
SEC. 709. RURAL HEALTH INFRASTRUCTURE IMPROVEMENT.

Section 2391 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 7 U.S.C. 2662 note) is repealed.
SEC. 710. CENSUS OF AGRICULTURE.
13 USC 142 note.
15 USC 714 note.

Section 2392 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 104 Stat. 4057) is repealed.
SEC. 711. STUDY OF THE TRANSPORTATION OF FERTILIZER AND AGRICULTURAL CHEMICALS TO FARMERS.

Section 2517 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 104 Stat. 4077) is repealed.
CHAPTER 2—ALTERNATIVE AGRICULTURAL RESEARCH
AND COMMERCIALIZATION
SEC. 721. DEFINITIONS.

Section 1657(c) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5901(c)) is amended—
(1) by striking paragraphs (3) and (4);

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1113

(2) by redesignating paragraph (5) as paragraph (3);
(3) by redesignating paragraphs (6) through (12) as paragraphs (7) through (13), respectively; and
(4) by inserting after paragraph (3) (as redesignated by
paragraph (2)) the following:
‘‘(4) CORPORATE BOARD.—The term ‘Corporate Board’ means
the Board of Directors of the Corporation described in section
1659.
‘‘(5) CORPORATION.—The term ‘Corporation’ means the
Alternative Agricultural Research and Commercialization Corporation established under section 1658.
‘‘(6) EXECUTIVE DIRECTOR.—The term ‘Executive Director’
means the Executive Director of the Corporation appointed
under section 1659(e).’’.
SEC. 722. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION.

(a) IN GENERAL.—Section 1658 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5902) is amended to
read as follows:
‘‘SEC. 1658. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION.

‘‘(a) ESTABLISHMENT.—To carry out this subtitle, there is created a body corporate to be known as the Alternative Agricultural
Research and Commercialization Corporation, which shall be an
agency of the United States, within the Department of Agriculture,
subject to the general supervision and direction of the Secretary,
except as specifically provided for in this subtitle.
‘‘(b) PURPOSE.—The purpose of the Corporation is to—
‘‘(1) expedite the development and market penetration of
industrial, nonfood, nonfeed products from agricultural and
forestry materials; and
‘‘(2) assist the private sector in bridging the gap between
the results of research into nonfood, nonfeed products and
the commercialization of the research.
‘‘(c) PLACE OF INCORPORATION.—The Corporation shall be incorporated in the District of Columbia.
‘‘(d) CENTRAL OFFICE.—The Secretary shall provide facilities
for the principal office of the Corporation within the Washington,
D.C., metropolitan area.
‘‘(e) WHOLLY-OWNED GOVERNMENT CORPORATION.—The Corporation shall be considered a wholly-owned government corporation
in accordance with chapter 91 of title 31, United States Code.
‘‘(f) GENERAL POWERS.—In addition to any other powers granted
to the Corporation under this subtitle, the Corporation—
‘‘(1) shall have succession in its corporate name;
‘‘(2) may adopt, alter, and rescind any bylaw and adopt
and alter a corporate seal, which shall be judicially noticed;
‘‘(3) may enter into any agreement or contract with a
person or private or governmental agency, except that the
Corporation shall not provide any financial assistance unless
specifically authorized by this subtitle;
‘‘(4) may lease, purchase, accept a gift or donation of, or
otherwise acquire, use, own, hold, improve, or otherwise deal
in or with, and sell, convey, mortgage, pledge, lease, exchange,
or otherwise dispose of, any property or interest in property,
as the Corporation considers necessary in the transaction of

District of
Columbia.

110 STAT. 1114

Courts.

PUBLIC LAW 104–127—APR. 4, 1996
the business of the Corporation, except that this paragraph
shall not provide authority for carrying out a program of real
estate investment;
‘‘(5) may sue and be sued in the corporate name of the
Corporation, except that—
‘‘(A) no attachment, injunction, garnishment, or similar
process shall be issued against the Corporation or property
of the Corporation; and
‘‘(B) exclusive original jurisdiction shall reside in the
district courts of the United States, but the Corporation
may intervene in any court in any suit, action, or proceeding in which the Corporation has an interest;
‘‘(6) may independently retain legal representation;
‘‘(7) may provide for and designate such committees, and
the functions of the committees, as the Corporate Board considers necessary or desirable;
‘‘(8) may indemnify the Executive Director and other officers of the Corporation, as the Corporate Board considers necessary and desirable, except that the Executive Director and
officers shall not be indemnified for an act outside the scope
of employment;
‘‘(9) may, with the consent of any board, commission,
independent establishment, or executive department of the Federal Government, including any field service, use information,
services, facilities, officials, and employees in carrying out this
subtitle, and pay for the use, which payments shall be transferred to the applicable appropriation account that incurred
the expense;
‘‘(10) may obtain the services and fix the compensation
of any consultant and otherwise procure temporary and intermittent services under section 3109(b) of title 5, United States
Code;
‘‘(11) may use the United States mails on the same terms
and conditions as the Executive agencies of the Federal Government;
‘‘(12) shall have the rights, privileges, and immunities of
the United States with respect to the right to priority of payment with respect to debts due from bankrupt, insolvent, or
deceased creditors;
‘‘(13) may collect or compromise any obligations assigned
to or held by the Corporation, including any legal or equitable
rights accruing to the Corporation;
‘‘(14) shall determine the character of, and necessity for,
obligations and expenditures of the Corporation and the manner
in which the obligations and expenditures shall be incurred,
allowed, and paid, subject to provisions of law specifically
applicable to Government corporations;
‘‘(15) may make final and conclusive settlement and adjustment of any claim by or against the Corporation or a fiscal
officer of the Corporation;
‘‘(16) may sell assets, loans, and equity interests acquired
in connection with the financing of projects funded by the
Corporation; and
‘‘(17) may exercise all other lawful powers necessarily or
reasonably related to the establishment of the Corporation to
carry out this subtitle and the powers, purposes, functions,
duties, and authorized activities of the Corporation.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1115

‘‘(g) SPECIFIC POWERS.—To carry out this subtitle, the Corporation may—
‘‘(1) make grants to, and enter into cooperative agreements
and contracts with, eligible applicants for research, development, and demonstration projects in accordance with section
1660;
‘‘(2) make loans and interest subsidy payments and invest
venture capital in accordance with section 1661;
‘‘(3) collect and disseminate information concerning State,
regional, and local commercialization projects;
‘‘(4) search for new nonfood, nonfeed products that may
be produced from agricultural commodities and for processes
to produce the products;
‘‘(5) administer, maintain, and dispense funds from the
Fund to facilitate the conduct of activities under this subtitle;
and
‘‘(6) engage in other activities incident to carrying out the
functions of the Corporation.’’.
(b) WHOLLY-OWNED GOVERNMENT CORPORATION.—Section
9101(3) of title 31, United States Code, is amended—
(1) by redesignating subparagraph (N) (relating to the Uranium Enrichment Corporation) as subparagraph (O); and
(2) by adding at the end the following:
‘‘(Q) the Alternative Agricultural Research and
Commercialization Corporation.’’.
(c) CONFORMING AMENDMENT.—Section 211(b)(5) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6911(b)(5))
is amended by striking ‘‘Alternative Agricultural Research and
Commercialization Board’’ and inserting ‘‘Corporate Board of the
Alternative Agricultural Research and Commercialization Corporation’’.
SEC. 723. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES.

(a) IN GENERAL.—Section 1659 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5903) is amended to
read as follows:
‘‘SEC. 1659. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES.

‘‘(a) IN GENERAL.—The powers of the Corporation shall be
vested in a Corporate Board.
‘‘(b) MEMBERS OF THE CORPORATE BOARD.—The Corporate
Board shall consist of 11 members as follows:
‘‘(1) The Under Secretary of Agriculture for Rural Development.
‘‘(2) The Under Secretary of Agriculture for Research, Education, and Economics.
‘‘(3) 5 members appointed by the Secretary, of whom—
‘‘(A) at least 1 member shall be a representative of
the leading scientific disciplines relevant to the activities
of the Corporation;
‘‘(B) at least 1 member shall be a producer or processor
of agricultural commodities;
‘‘(C) at least 1 member shall be a person who is privately engaged in the commercialization of new nonfood,
nonfeed products from agricultural commodities; and
‘‘(D) at least 1 member shall have expertise in financial
management.

110 STAT. 1116

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A different member shall be appointed pursuant to each
subparagraph of this paragraph.
‘‘(4) 2 members appointed by the Secretary who—
‘‘(A) have expertise in areas of applied research relating
to the development or commercialization of new nonfood,
nonfeed products; and
‘‘(B) shall be appointed from a group of at least 4
individuals nominated by the Director of the National
Science Foundation if the nominations are made not later
than 60 days after the date a vacancy occurs.
‘‘(5) 2 members appointed by the Secretary who—
‘‘(A) have expertise in financial and managerial matters; and
‘‘(B) shall be appointed from a group of at least 4
individuals nominated by the Secretary of Commerce if
the nominations are made not later than 60 days after
the date a vacancy occurs.
‘‘(c) RESPONSIBILITIES OF THE CORPORATE BOARD.—
‘‘(1) IN GENERAL.—The Corporate Board shall—
‘‘(A) be responsible for the general supervision of the
Corporation and Regional Centers established under section 1663;
‘‘(B) determine (in consultation with Regional Centers)
high priority commercialization areas to receive assistance
under section 1663;
‘‘(C) review any grant, contract, or cooperative agreement to be made or entered into by the Corporation under
section 1660 and any financial assistance to be provided
under section 1661;
‘‘(D) make the final decision, by majority vote, on
whether and how to provide assistance to an applicant;
and
‘‘(E) develop and establish a budget plan and a longterm operating plan to carry out this subtitle.
‘‘(2) AUTHORITY OF THE SECRETARY.—
‘‘(A) IN GENERAL.—The Secretary shall vacate and
remand to the Corporate Board for reconsideration any
decision made pursuant to paragraph (1)(D) if the Secretary
determines that there has been a violation of subsection
(j), or any conflict of interest provisions of the bylaws
of the Corporate Board, with respect to the decision.
‘‘(B) REASONS.—In the case of any violation and referral
of a funding decision to the Corporate Board, the Secretary
shall inform the Corporate Board of the reasons for any
remand pursuant to subparagraph (A).
‘‘(d) CHAIRPERSON.—The members of the Corporate Board shall
select a Chairperson from among the members of the Corporate
Board. The term of office of the Chairperson shall be 2 years.
The members referred to in paragraphs (1) and (2) of subsection
(b) may not serve as Chairperson.
‘‘(e) EXECUTIVE DIRECTOR.—
‘‘(1) APPOINTMENT.—The Corporate Board shall appoint an
Executive Director, subject to the approval of the Secretary.
‘‘(2) DUTIES.—The Executive Director shall be the chief
executive officer of the Corporation, with such power and
authority as may be conferred by the Corporate Board.

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110 STAT. 1117

‘‘(3) COMPENSATION.—The Executive Director shall receive
basic pay at the rate provided for level IV of the Executive
Schedule under section 5315 of title 5, United States Code.
‘‘(f) OFFICERS.—The Corporate Board shall establish the offices
and appoint the officers of the Corporation, including a Secretary,
and define the duties of the officers in a manner consistent with
this subtitle.
‘‘(g) MEETINGS.—The Corporate Board shall meet at least 3
times each fiscal year at the call of the Chairperson or at the
request of the Executive Director. The location of the meetings
shall be subject to approval of the Executive Director. A quorum
of the Corporate Board shall consist of a majority of the members.
The decisions of the Corporate Board shall be made by majority
vote.
‘‘(h) TERM; VACANCIES.—
‘‘(1) IN GENERAL.—The term of office of a member of the
Corporate Board shall be 4 years, except that the members
initially appointed shall be appointed to serve staggered terms.
A member appointed to fill a vacancy for an unexpired term
may be appointed only for the remainder of the term. A vacancy
on the Corporate Board shall be filled in the same manner
as the original appointment. The Secretary may remove a member of the Corporate Board only for cause.
‘‘(2) TRANSITION MEASURE.—The Secretary may appoint to
the Corporate Board an individual who, on the day before
the date of enactment of the Federal Agriculture Improvement
and Reform Act of 1996, was serving on the former Alternative
Agricultural Research and Commercialization Board, for a term
that does not exceed the term for which the individual was
appointed to the former Board.
‘‘(i) COMPENSATION.—A member of the Corporate Board who
is an officer or employee of the United States shall not receive
any additional compensation by reason of service on the Corporate
Board. Any other member shall receive, for each day (including
travel time) the member is engaged in the performance of the
functions of the Corporate Board, compensation at a rate not to
exceed the daily equivalent of the annual rate in effect for Level
IV of the Executive Schedule. A member of the Corporate Board
shall be reimbursed for travel, subsistence, and other necessary
expenses incurred by the member in the performance of the duties
of the member.
‘‘(j) CONFLICT OF INTEREST; FINANCIAL DISCLOSURE.—
‘‘(1) CONFLICT OF INTEREST.—Except as provided in paragraph (3), no member of the Corporate Board shall vote on
any matter respecting any application, contract, claim, or other
particular matter pending before the Corporation, in which,
to the knowledge of the member, the member, spouse, or child
of the member, partner, or organization in which the member
is serving as officer, director, trustee, partner, or employee,
or any person or organization with whom the member is negotiating or has any arrangement concerning prospective employment, has a financial interest.
‘‘(2) VIOLATIONS.—Violation of paragraph (1) by a member
of the Corporate Board shall be cause for removal of the member, but shall not impair or otherwise affect the validity of
any otherwise lawful action by the Corporation in which the
member participated.

110 STAT. 1118

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(3) EXCEPTIONS.—The prohibitions contained in paragraph
(1) shall not apply if a member of the Corporate Board advises
the Corporate Board of the nature of the particular matter
in which the member proposes to participate, and if the member
makes a full disclosure of the financial interest, prior to any
participation, and the Corporate Board determines, by majority
vote, that the financial interest is too remote or too inconsequential to affect the integrity of the member’s services to
the Corporation in that matter. The member involved shall
not vote on the determination.
‘‘(4) FINANCIAL DISCLOSURE.—A Board member shall be
subject to the financial disclosure requirements set forth in
subchapter B of chapter XVI of title 5, Code of Federal Regulations (or any corresponding or similar regulation or ruling),
applicable to a special Government employee (as defined in
section 202(a) of title 18, United States Code).
‘‘(k) DELEGATION OF AUTHORITY.—
‘‘(1) IN GENERAL.—The Corporate Board may, by resolution,
delegate to the Chairperson, the Executive Director, or any
other officer or employee any function, power, or duty assigned
to the Corporation under this subtitle, other than a function,
power, or duty expressly vested in the Corporate Board by
subsections (c) through (n).
‘‘(2) PROHIBITION ON DELEGATION.—Notwithstanding any
other law, the Secretary and any other officer or employee
of the United States shall not make any delegation to the
Corporate Board, the Chairperson, the Executive Director, or
the Corporation of any power, function, or authority not
expressly authorized by this subtitle, unless the delegation
is made pursuant to an authority in law that expressly makes
reference to this section.
‘‘(3) REORGANIZATION ACT.—Notwithstanding any other law,
the President (through authorities provided under chapter 9
of title 5, United States Code) may not authorize the transfer
to the Corporation of any power, function, or authority in
addition to powers, functions, and authorities provided by law.
‘‘(l) BYLAWS.—Notwithstanding section 1658(f)(2), the Corporate
Board shall adopt, and may from time to time amend, any bylaw
that is necessary for the proper management and functioning of
the Corporation. The Corporate Board shall not adopt any bylaw
that has not been reviewed and approved by the Secretary.
‘‘(m) ORGANIZATION.—The Corporate Board shall provide a system of organization to fix responsibility and promote efficiency.
‘‘(n) PERSONNEL AND FACILITIES OF CORPORATION.—
‘‘(1) APPOINTMENT AND COMPENSATION OF PERSONNEL.—
The Corporation may select and appoint officers, attorneys,
employees, and agents, who shall be vested with such powers
and duties as the Corporation may determine.
‘‘(2) USE OF FACILITIES AND SERVICES OF THE DEPARTMENT
OF AGRICULTURE.—Notwithstanding any other provision of law,
to perform the responsibilities of the Corporation under this
subtitle, the Corporation may partially or jointly utilize the
facilities of and the services of employees of the Department
of Agriculture, without cost to the Corporation.
‘‘(3) GOVERNMENT EMPLOYMENT LAWS.—An officer or
employee of the Corporation shall be subject to all laws of
the United States relating to governmental employment.’’.

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110 STAT. 1119

(b) CONFORMING AMENDMENT.—Section 5315 of title 5, United
States Code, is amended by adding at the end the following:
‘‘Executive Director of the Alternative Agricultural
Research and Commercialization Corporation.’’.
SEC. 724. RESEARCH AND DEVELOPMENT GRANTS, CONTRACTS, AND
AGREEMENTS.

Section 1660 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5904) is amended—
(1) by striking ‘‘Center’’ each place it appears and inserting
‘‘Corporation’’;
(2) in subsection (c), by striking ‘‘Board’’ and inserting
‘‘Corporate Board’’; and
(3) in subsection (f), by striking ‘‘non-Center’’ and inserting
‘‘non-Corporation’’.
SEC. 725. COMMERCIALIZATION ASSISTANCE.

Section 1661 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5905) is amended—
(1) by striking ‘‘Center’’ each place it appears and inserting
‘‘Corporation’’;
(2) by striking ‘‘Board’’ each place it appears and inserting
‘‘Corporate Board’’;
(3) by striking subsection (c);
(4) by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively; and
(5) in subsection (c) (as so redesignated)—
(A) in the subsection heading of paragraph (1), by
striking ‘‘DIRECTOR’’ and inserting ‘‘EXECUTIVE DIRECTOR’’;
and
(B) by striking ‘‘Director’’ each place it appears and
inserting ‘‘Executive Director’’.
SEC. 726. GENERAL RULES REGARDING THE PROVISION OF ASSISTANCE.

Section 1662 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5906) is amended—
(1) by striking ‘‘Center’’ each place it appears (except in
subsection (b)) and inserting ‘‘Corporation’’;
(2) by striking ‘‘Board’’ each place it appears and inserting
‘‘Corporate Board’’; and
(3) in subsection (b)—
(A) in the second sentence, by striking ‘‘Board, a
Regional Center, or the Advisory Council’’ and inserting
‘‘Board or a Regional Center’’; and
(B) by striking the third sentence.
SEC. 727. REGIONAL CENTERS.

Section 1663 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5907) is amended—
(1) by striking ‘‘Board’’ each place it appears and inserting
‘‘Corporate Board’’;
(2) in subsection (e)(8), by striking ‘‘Center’’ and inserting
‘‘Corporation’’; and
(3) in subsection (f)—
(A) in paragraph (2), by striking ‘‘in consultation with
the Advisory Council appointed under section 1661(c)’’; and

110 STAT. 1120

PUBLIC LAW 104–127—APR. 4, 1996
(B) by striking paragraphs (3) and (4) and inserting
the following:
‘‘(3) RECOMMENDATION.—The Regional Director, based on
the comments of the reviewers, shall make and submit a recommendation to the Board, which shall not be binding on
the Board.’’.

SEC. 728. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION REVOLVING FUND.

Section 1664 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5908) is amended to read as follows:
‘‘SEC. 1664. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION REVOLVING FUND.

‘‘(a) ESTABLISHMENT.—There is established in the Treasury of
the United States a revolving fund to be known as the Alternative
Agricultural Research and Commercialization Revolving Fund. The
Fund shall be available to the Corporation, without fiscal year
limitation, to carry out this subtitle.
‘‘(b) CONTENTS OF FUND.—There shall be deposited in the
Fund—
‘‘(1) such amounts as may be appropriated or transferred
to support programs and activities of the Corporation;
‘‘(2) payments received from any source for products, services, or property furnished in connection with the activities
of the Corporation;
‘‘(3) fees and royalties collected by the Corporation from
licensing or other arrangements relating to commercialization
of products developed through projects funded in whole or part
by grants, contracts, or cooperative agreements executed by
the Corporation;
‘‘(4) proceeds from the sale of assets, loans, and equity
interests made in furtherance of the purposes of the Corporation;
‘‘(5) donations or contributions accepted by the Corporation
to support authorized programs and activities; and
‘‘(6) any other funds acquired by the Corporation.
‘‘(c) FUNDING ALLOCATIONS.—Funding of projects and activities
under this subtitle shall be subject to the following restrictions:
‘‘(1) Of the total amount of funds made available for a
fiscal year under this subtitle—
‘‘(A) not more than the lesser of 15 percent or
$3,000,000 may be set aside to be used for authorized
administrative expenses of the Corporation;
‘‘(B) not more than 1 percent may be set aside to
be used for generic studies and specific reviews of individual proposals for financial assistance; and
‘‘(C) except as provided in subsection (e), not less than
84 percent shall be set aside to be awarded to qualified
applicants who file project applications with, or respond
to requests for proposals from, the Corporation under sections 1660 and 1661.
‘‘(2) Any funds remaining uncommitted at the end of a
fiscal year shall be credited to the Fund and added to the
total program funds available to the Corporation for the next
fiscal year.
‘‘(d) AUTHORIZED ADMINISTRATIVE EXPENSES.—For the purposes
of this section, authorized administrative expenses shall include

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110 STAT. 1121

all ordinary and necessary expenses, including all compensation
for personnel and consultants, expenses for computer usage, or
space needs of the Corporation and similar expenses. Funds authorized for administrative expenses shall not be available for the
acquisition of real property.
‘‘(e) PROJECT MONITORING.—The Corporate Board may establish, in the bylaws of the Corporate Board, that a percentage
(which shall not exceed 1 percent) of the funds provided under
subsection (c) for any commercialization project shall be expended
to ensure that project funds are being utilized in accordance with
the project agreement.
‘‘(f) TERMINATION OF THE FUND.—On expiration of the authority
provided by this subtitle, all assets (after payment of all outstanding
obligations) of the Fund shall revert to the general fund of the
Treasury.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS; CAPITALIZATION.—
‘‘(1) AUTHORIZATION OF APPROPRIATION.—There are authorized to be appropriated to the Fund $75,000,000 for each of
fiscal years 1996 through 2002.
‘‘(2) CAPITALIZATION.—The Executive Director may pay in
as capital of the Corporation, out of dollar receipts made available through annual appropriations, $75,000,000 for each of
fiscal years 1996 through 2002. On the payment of an amount
of capital by the Executive Director, the Corporation shall
issue an equivalent amount of capital stock to the Secretary
of the Treasury.
‘‘(3) TRANSFER.—All obligations, assets, and related rights
and responsibilities of the former Alternative Agricultural
Research and Commercialization Center established under
former section 1658 of this Act (as in effect on the day before
the date of enactment of the Federal Agriculture Improvement
and Reform Act of 1996) are transferred to the Corporation.’’.
SEC. 729. PROCUREMENT PREFERENCES FOR PRODUCTS RECEIVING
CORPORATION ASSISTANCE.

Subtitle G of title XVI of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5901 et seq.) is amended by
adding at the end the following:
‘‘SEC.

1665.

PROCUREMENT OF ALTERNATIVE AGRICULTURAL
RESEARCH AND COMMERCIALIZATION PRODUCTS.

‘‘(a) DEFINITION OF EXECUTIVE AGENCY.—In this section, the
term ‘executive agency’ has the meaning provided the term in
section 4(1) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(1)).
‘‘(b) PROCUREMENT.—To further the achievement of the purposes specified in section 1657(b), an executive agency may, for
any procurement involving the acquisition of property, establish
set-asides and preferences for property that has been commercialized with assistance provided under this subtitle.
‘‘(c) SET-ASIDES.—Procurements solely for property may be set
aside exclusively for products developed with commercialization
assistance provided under section 1661.
‘‘(d) PREFERENCES.—Preferences for property developed with
assistance provided under this subtitle in procurements involving
the acquisition of property may be—
‘‘(1) a price preference, if the procurement is solely for
property, of not greater than a percentage to be determined

7 USC 5909.

110 STAT. 1122

PUBLIC LAW 104–127—APR. 4, 1996

within the sole discretion of the head of the procuring agency;
or
‘‘(2) a technical evaluation preference included as an award
factor or subfactor as determined within the sole discretion
of the head of the procuring agency.
‘‘(e) NOTICE.—Each competitive solicitation or invitation for
bids selected by an executive agency for a set-aside or preference
under this section shall contain a provision notifying offerors where
a list of products eligible for the set-aside or preference may be
obtained.
‘‘(f) ELIGIBILITY.—Offerors shall receive the set-aside or preference required under this section if, in the case of products developed with financial assistance under—
‘‘(1) section 1660, less than 10 years have elapsed since
the expiration of the grant, cooperative agreement, or contract;
‘‘(2) paragraph (1) or (2) of section 1661(a), less than 5
years have elapsed since the date the loan was made or insured;
‘‘(3) section 1661(a)(3), less than 5 years have elapsed since
the date of sale of any remaining government equity interest
in the company; or
‘‘(4) section 1661(a)(4), less than 5 years have elapsed since
the date of the final payment on the repayable grant.’’.
7 USC 5902 note.

SEC. 730. BUSINESS PLAN AND FEASIBILITY STUDY AND REPORT.

(a) BUSINESS PLAN.—Not later than 180 days after the date
of enactment of this Act, the Alternative Agricultural Research
and Commercialization Corporation established by section 1658 of
the Food, Agriculture, Conservation, and Trade Act of 1990 shall—
(1) develop a 5-year business plan pursuant to section
1659(c)(1)(E) of the Act; and
(2) submit the plan to the Secretary of Agriculture, the
Committee on Agriculture of the House of Representatives,
and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
(b) FEASIBILITY STUDY AND REPORT.—
(1) STUDY.—The Secretary of Agriculture shall conduct a
study of, and prepare a report on, the continued feasibility
of the Alternative Agricultural Research and Commercialization
Corporation. In conducting the study, the Secretary shall examine options for privatizing the Corporation and converting the
Corporation to a Government-sponsored enterprise.
(2) REPORT.—Not later than December 31, 2001, the Secretary shall transmit the report required by paragraph (1)
to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.

Subtitle B—Amendments to the Consolidated Farm and Rural Development Act
CHAPTER 1—GENERAL PROVISIONS
SEC. 741. WATER AND WASTE FACILITY LOANS AND GRANTS.

(a) IN GENERAL.—Section 306(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926(a)) is amended—

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110 STAT. 1123

(1) in the first sentence of paragraph (2), by striking
‘‘$500,000,000’’ and inserting ‘‘$590,000,000’’;
(2) by striking paragraph (7) and inserting the following:
‘‘(7) DEFINITION OF RURAL AND RURAL AREAS.—For the purpose of water and waste disposal grants and direct and guaranteed loans provided under paragraphs (1) and (2), the terms
‘rural’ and ‘rural area’ mean a city, town, or unincorporated
area that has a population of no more than 10,000 inhabitants.’’;
(3) by striking paragraphs (9), (10), and (11) and inserting
the following:
‘‘(9) CONFORMITY WITH STATE DRINKING WATER STANDARDS.—No Federal funds shall be made available under this
section for a water system unless the Secretary determines
that the water system will make significant progress toward
meeting the standards established under title XIV of the Public
Health Service Act (commonly known as the ‘Safe Drinking
Water Act’) (42 U.S.C. 300f et seq.).
‘‘(10) CONFORMITY WITH FEDERAL AND STATE WATER POLLUTION CONTROL STANDARDS.—No Federal funds shall be made
available under this section for a water treatment discharge
or waste disposal system unless the Secretary determines that
the effluent from the system conforms with applicable Federal
and State water pollution control standards.
‘‘(11) RURAL BUSINESS OPPORTUNITY GRANTS.—
‘‘(A) IN GENERAL.—The Secretary may make grants,
not to exceed $1,500,000 annually, to public bodies, private
nonprofit community development corporations or entities,
or such other agencies as the Secretary may select to
enable the recipients—
‘‘(i) to identify and analyze business opportunities,
including opportunities in export markets, that will
use local rural economic and human resources;
‘‘(ii) to identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and
managers;
‘‘(iii) to establish business support centers and
otherwise assist in the creation of new rural
businesses, the development of methods of financing
local businesses, and the enhancement of the capacity
of local individuals and entities to engage in sound
economic activities;
‘‘(iv) to conduct regional, community, and local economic development planning and coordination, and
leadership development; and
‘‘(v) to establish centers for training, technology,
and trade that will provide training to rural businesses
in the utilization of interactive communications technologies to develop international trade opportunities
and markets.
‘‘(B) CRITERIA.—In awarding the grants, the Secretary
shall consider, among other criteria to be established by
the Secretary—
‘‘(i) the extent to which the applicant provides
development services in the rural service area of the
applicant; and

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PUBLIC LAW 104–127—APR. 4, 1996

‘‘(ii) the capability of the applicant to accomplish
the activities described in the relevant clauses of
subparagraph (A).
‘‘(C) COORDINATION.—The Secretary shall ensure, to
the maximum extent practicable, that assistance provided
under this paragraph is coordinated with and delivered
in cooperation with similar services or assistance provided
to rural residents by the Cooperative State Research, Education, and Extension Service or other Federal agencies.
‘‘(D) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated to carry out this paragraph
$7,500,000 for each of fiscal years 1996 through 2002.’’;
(4) by striking paragraphs (14) and (15);
(5) by redesignating paragraphs (16) through (20) as paragraphs (14) through (18), respectively; and
(6) in paragraph (14) (as so redesignated)—
(A) by striking ‘‘(14)(A) The’’ and inserting the following:
‘‘(14) RURAL WATER AND WASTEWATER TECHNICAL ASSISTANCE AND TRAINING PROGRAMS.—
‘‘(A) IN GENERAL.—The’’;
(B) in subparagraph (A)—
(i) by striking ‘‘(i) identify’’ and inserting the following:
‘‘(i) identify’’;
(ii) by striking ‘‘(ii) prepare’’ and inserting the
following:
‘‘(ii) prepare’’; and
(iii) by striking ‘‘(iii) improve’’ and inserting the
following:
‘‘(iii) improve’’;
(C) in subparagraph (B), by striking ‘‘(B) In’’ and inserting the following:
‘‘(B) SELECTION PRIORITY.—In’’; and
(D) in subparagraph (C)—
(i) by striking ‘‘(C) Not’’ and inserting the following:
‘‘(C) FUNDING.—Not’’; and
(ii) by striking ‘‘2 per centum of any funds provided
in appropriations Acts’’ and inserting ‘‘3 percent of
any funds appropriated’’.
(b) CONFORMING AMENDMENT.—The second sentence of section
309A(a) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 1929a(a)) (as amended by section 661(c)(1)) is amended
by striking ‘‘, 306(a)(14),’’.
SEC. 742. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM FOR SMALL COMMUNITIES.

Section 306A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1926a) is amended—
(1) in subsection (e)—
(A) in paragraph (1)(A), by striking ‘‘15,000’’ and inserting ‘‘10,000’’; and
(B) in paragraph (2), by striking ‘‘5,000’’ and inserting
‘‘3,000’’; and
(2) by striking subsection (i) and inserting the following:

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110 STAT. 1125

‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $35,000,000 for each
of fiscal years 1996 through 2002.’’.
SEC. 743. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM FOR SMALLEST COMMUNITIES.

Section 306B of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1926b) is repealed.
SEC. 744. AGRICULTURAL CREDIT INSURANCE FUND.

Section 309(f) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1929(f)) is amended—
(1) by striking paragraph (1); and
(2) by redesignating paragraphs (2) through (6) as paragraphs (1) through (5), respectively.
SEC. 745. RURAL DEVELOPMENT INSURANCE FUND.

Section 309A(g) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929a(g)) is amended—
(1) by striking paragraph (1); and
(2) by redesignating paragraphs (2) through (8) as paragraphs (1) through (7), respectively.
SEC. 746. INSURED WATERSHED AND RESOURCE CONSERVATION AND
DEVELOPMENT LOANS.

Section 310A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1931) is repealed.
SEC. 747. RURAL INDUSTRIALIZATION ASSISTANCE.

(a) IN GENERAL.—Section 310B of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1932) is amended—
(1) in the first sentence of subsection (a)—
(A) by striking ‘‘and’’ at the end of clause (2); and
(B) by inserting before the period the following: ‘‘,
and (4) to facilitate economic opportunity for industries
undergoing adjustment from terminated Federal agricultural price and income support programs or increased competition from foreign trade’’;
(2) in subsection (b), by striking ‘‘(b)(1)’’ and all that follows
through ‘‘(2) The’’ and inserting the following:
‘‘(b) SOLID WASTE MANAGEMENT GRANTS.—The’’;
(3) in subsection (c)—
(A) by striking ‘‘(c)(1) The’’ and inserting the following:
‘‘(c) RURAL BUSINESS ENTERPRISE GRANTS.—
‘‘(1) IN GENERAL.—The’’;
(B) in paragraph (1), by inserting ‘‘(including nonprofit
entities)’’ after ‘‘private business enterprises’’;
(C) in paragraph (2)—
(i) by striking ‘‘(2) The’’ and inserting the following:
‘‘(2) PASSENGER TRANSPORTATION SERVICES OR FACILITIES.—
The’’; and
(ii) by striking ‘‘make grants’’ and inserting ‘‘award
grants on a competitive basis’’; and
(D) by adding at the end the following:
‘‘(3) GRANTS TO AID INDUSTRIES IN ADJUSTING TO TERMINATED FEDERAL AGRICULTURAL PROGRAMS OR INCREASED FOREIGN COMPETITION.—The Secretary may make grants under
this section to facilitate economic opportunity for industries

110 STAT. 1126

PUBLIC LAW 104–127—APR. 4, 1996
undergoing adjustment from terminated Federal agricultural
price and income support programs or increased competition
from foreign trade.’’;
(4) by striking subsection (e) and inserting the following:
‘‘(e) RURAL COOPERATIVE DEVELOPMENT GRANTS.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) NONPROFIT INSTITUTION.—The term ‘nonprofit
institution’ means any organization or institution, including
an accredited institution of higher education, no part of
the net earnings of which inures, or may lawfully inure,
to the benefit of any private shareholder or individual.
‘‘(B) UNITED STATES.—The term ‘United States’ means
the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the other territories and possessions of the
United States.
‘‘(2) GRANTS.—The Secretary shall make grants under this
subsection to nonprofit institutions for the purpose of enabling
the institutions to establish and operate centers for rural
cooperative development.
‘‘(3) GOALS.—The goals of a center funded under this subsection shall be to facilitate the creation of jobs in rural areas
through the development of new rural cooperatives, value added
processing, and rural businesses.
‘‘(4) APPLICATION.—Any nonprofit institution seeking a
grant under paragraph (2) shall submit to the Secretary an
application containing a plan for the establishment and operation by the institution of a center or centers for cooperative
development. The Secretary may approve the application if
the plan contains the following:
‘‘(A) A provision that substantiates that the center
will effectively serve rural areas in the United States.
‘‘(B) A provision that the primary objective of the center
will be to improve the economic condition of rural areas
through cooperative development.
‘‘(C) A description of the activities that the center
will carry out to accomplish the objective. The activities
may include the following:
‘‘(i) Programs for applied research and feasibility
studies that may be useful to individuals, cooperatives,
small businesses, and other similar entities in rural
areas served by the center.
‘‘(ii) Programs for the collection, interpretation, and
dissemination of information that may be useful to
individuals, cooperatives, small businesses, and other
similar entities in rural areas served by the center.
‘‘(iii) Programs providing training and instruction
for individuals, cooperatives, small businesses, and
other similar entities in rural areas served by the
center.
‘‘(iv) Programs providing loans and grants to
individuals, cooperatives, small businesses, and other
similar entities in rural areas served by the center.
‘‘(v) Programs providing technical assistance,
research services, and advisory services to individuals,
cooperatives, small businesses, and other similar entities in rural areas served by the center.

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110 STAT. 1127

‘‘(vi) Programs providing for the coordination of
services and sharing of information among the center.
‘‘(D) A description of the contributions that the activities are likely to make to the improvement of the economic
conditions of the rural areas for which the center will
provide services.
‘‘(E) Provisions that the center, in carrying out the
activities, will seek, where appropriate, the advice, participation, expertise, and assistance of representatives of business, industry, educational institutions, the Federal
Government, and State and local governments.
‘‘(F) Provisions that the center will take all practicable
steps to develop continuing sources of financial support
for the center, particularly from sources in the private
sector.
‘‘(G) Provisions for—
‘‘(i) monitoring and evaluating the activities by
the nonprofit institution operating the center; and
‘‘(ii) accounting for money received by the institution under this section.
‘‘(5) AWARDING GRANTS.—Grants made under paragraph
(2) shall be made on a competitive basis. In making grants
under paragraph (2), the Secretary shall give preference to
grant applications providing for the establishment of centers
for rural cooperative development that—
‘‘(A) demonstrate a proven track record in administering a nationally coordinated, regionally or State-wide operated project;
‘‘(B) demonstrate previous expertise in providing technical assistance in rural areas;
‘‘(C) demonstrate the ability to assist in the retention
of businesses, facilitate the establishment of cooperatives
and new cooperative approaches, and generate employment
opportunities that will improve the economic conditions
of rural areas;
‘‘(D) demonstrate the ability to create horizontal linkages among businesses within and among various sectors
in rural areas of the United States and vertical linkages
to domestic and international markets;
‘‘(E) commit to providing technical assistance and other
services to underserved and economically distressed areas
in rural areas of the United States; and
‘‘(F) commit to providing greater than a 25 percent
matching contribution with private funds and in-kind contributions.
‘‘(6) 1-YEAR GRANTS; AUTHORITY TO APPROVE GRANT FOR
1 ADDITIONAL YEAR WITHOUT APPLICATION.—The Secretary shall
make grants under this subsection for a period of 1 year.
The Secretary shall evaluate programs receiving assistance
under this subsection. If the Secretary determines it to be
in the best interest of the program, the Secretary may award
an additional grant to the program for the immediately succeeding year without application for the grant.
‘‘(7) TECHNICAL ASSISTANCE TO PREVENT EXCESSIVE
UNEMPLOYMENT OR UNDEREMPLOYMENT.—In carrying out this
subsection, the Secretary may provide technical assistance to
alleviate or prevent conditions of excessive unemployment,

110 STAT. 1128

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underemployment, outmigration, or low employment growth
in economically distressed rural areas that the Secretary determines have a substantial need for the assistance. The assistance
may include planning and feasibility studies, management and
operational assistance, and studies evaluating the need for
development potential of projects that increase employment
and improve economic growth in the areas.
‘‘(8) GRANTS TO DEFRAY ADMINISTRATIVE COSTS.—The Secretary may make grants to defray not to exceed 75 percent
of the costs incurred by organizations and public bodies to
carry out projects for which grants or loans are made under
this subsection. For purposes of determining the non-Federal
share of the costs, the Secretary shall consider contributions
in cash and in kind, fairly evaluated, including premises, equipment, and services.
‘‘(9) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated to carry out this subsection
$50,000,000 for each of fiscal years 1996 through 2002.’’;
(5) by striking subsections (f), (g), (h), and (i);
(6) by redesignating subsection (j) as subsection (f); and
(7) by adding at the end the following:
‘‘(g) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE
STOCK.—
‘‘(1) DEFINITION OF FARMER.—In this subsection, the term
‘farmer’ means any farmer that the Secretary determines is
a family farmer.
‘‘(2) LOAN GUARANTEES.—The Secretary may guarantee
loans under this section to individual farmers for the purpose
of purchasing start-up capital stock of a farmer cooperative
established for the purpose of processing an agricultural
commodity.
‘‘(3) ELIGIBILITY.—To be eligible for a loan guarantee under
this subsection, a farmer must produce the agricultural
commodity that will be processed by the cooperative.’’.
(b) CONFORMING AMENDMENTS.—
(1) Clause (iii) of section 307(a)(6)(B) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1927(a)(6)(B)) (as
redesignated by section 661(a)(2)) is amended by striking ‘‘subsections (d) and (e) of section 310B’’ and inserting ‘‘section
310B(d)’’.
(2) Section 232(c)(2) of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6942(c)(2)) is amended—
(A) by striking ‘‘310B(b)(2)’’ and inserting ‘‘310B(b)’’;
and
(B) by striking ‘‘1932(b)(2)’’ and inserting ‘‘1932(b)’’.
(3) Section 233(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6943(b)) is amended—
(A) by striking paragraph (2); and
(B) by redesignating paragraph (3) as paragraph (2).
SEC. 748. ADMINISTRATION.

Section 331(b)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981(b)(4)) is amended—
(1) by inserting after ‘‘claims’’ the following: ‘‘(including
debts and claims arising from loan guarantees)’’;
(2) by striking ‘‘Farmers Home Administration or’’ and
inserting ‘‘Consolidated Farm Service Agency, Rural Utilities

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110 STAT. 1129

Service, Rural Housing Service, Rural Business-Cooperative
Service, or a successor agency, or’’; and
(3) by inserting after ‘‘activities under the Housing Act
of 1949.’’ the following: ‘‘In the case of a security instrument
entered into under the Rural Electrification Act of 1936 (7
U.S.C. 901 et seq.), the Secretary shall notify the Attorney
General of the intent of the Secretary to exercise the authority
of the Secretary under this paragraph.’’.

Notification.

SEC. 749. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—Section 338 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1988) is amended—
(1) by striking subsections (b), (c), (d), and (e); and
(2) by redesignating subsection (f) as subsection (b).
(b) CONFORMING AMENDMENTS.—
(1) The first sentence of section 309(g)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(g)(1))
is amended by inserting after ‘‘section 338(c)’’ the following:
‘‘(before the amendment made by section 749(a)(1) of the Federal Agriculture Improvement and Reform Act of 1996)’’.
(2) Section 343(b) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1991(b)) is amended by striking
‘‘338(f),’’ and inserting ‘‘338(b),’’.
SEC. 750. TESTIMONY BEFORE CONGRESSIONAL COMMITTEES.

Section 345 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1993) is repealed.
SEC. 751. PROHIBITION ON USE OF LOANS FOR CERTAIN PURPOSES.

Section 363 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2006e) is amended by adding at the end the following:
‘‘This section shall not apply to a loan made or guaranteed under
this title for a utility line.’’.
SEC. 752. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM.

The Consolidated Farm and Rural Development Act is amended
by inserting after section 363 (7 U.S.C. 2006e) the following:
‘‘SEC. 364. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM.

‘‘(a) CERTIFIED LENDERS PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary may establish a program
under which the Secretary may guarantee a loan for any rural
development program that is made by a lender certified by
the Secretary.
‘‘(2) CERTIFICATION REQUIREMENTS.—The Secretary may
certify a lender if the lender meets such criteria as the Secretary may prescribe in regulations, including the ability of
the lender to properly make, service, and liquidate the guaranteed loans of the lender.
‘‘(3) CONDITION OF CERTIFICATION.—As a condition of certification, the Secretary may require the lender to undertake to
service the guaranteed loan using standards that are not less
stringent than generally accepted banking standards concerning
loan servicing that are used by prudent commercial or cooperative lenders.
‘‘(4) GUARANTEE.—Notwithstanding any other provision of
law, the Secretary may guarantee not more than 80 percent
of a loan made by a certified lender described in paragraph

7 USC 2006f.

110 STAT. 1130

PUBLIC LAW 104–127—APR. 4, 1996
(1), if the borrower of the loan meets the eligibility requirements
and such other criteria for the loan guarantee that are established by the Secretary.
‘‘(5) CERTIFICATIONS.—With respect to loans to be guaranteed, the Secretary may permit a certified lender to make
appropriate certifications (as provided in regulations issued
by the Secretary)—
‘‘(A) relating to issues such as creditworthiness, repayment ability, adequacy of collateral, and feasibility of the
operation; and
‘‘(B) that the borrower is in compliance with all requirements of law, including regulations issued by the Secretary.
‘‘(6) RELATIONSHIP TO OTHER REQUIREMENTS.—This subsection shall not affect the responsibility of the Secretary to
determine eligibility, review financial information, and otherwise assess an application.
‘‘(b) PREFERRED CERTIFIED LENDERS PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary may establish a preferred
certified lenders program for lenders who establish their—
‘‘(A) knowledge of, and experience under, the program
established under subsection (a);
‘‘(B) knowledge of the regulations concerning the
particular guaranteed loan program; and
‘‘(C) proficiency related to the certified lender program
requirements.
‘‘(2) ADDITIONAL LENDING INSTITUTIONS.—The Secretary
may certify any lending institution as a preferred certified
lender if the institution meets such additional criteria as the
Secretary may prescribe by regulation.
‘‘(3) REVOCATION OF DESIGNATION.—The designation of a
lender as a preferred certified lender shall be revoked if the
Secretary determines that the lender is not adhering to the
rules and regulations applicable to the program or if the loss
experiences of the preferred certified lender are greater than
other preferred certified lenders, except that the suspension
or revocation shall not affect any outstanding guarantee.
‘‘(4) CONDITION OF CERTIFICATION.—As a condition of the
preferred certification, the Secretary shall require the lender
to undertake to service the loan guaranteed by the Secretary
under this subsection using generally accepted banking standards concerning loan servicing employed by prudent commercial
or cooperative lenders. The Secretary shall, at least annually,
monitor the performance of each preferred certified lender to
ensure that the conditions of the certification are being met.
‘‘(5) EFFECT OF PREFERRED LENDER CERTIFICATION.—Notwithstanding any other provision of law, the Secretary may—
‘‘(A) guarantee not more than 80 percent of any
approved loan made by a preferred certified lender as
described in this subsection, if the borrower meets the
eligibility requirements and such other criteria as may
be applicable to loans guaranteed by the Secretary; and
‘‘(B) permit preferred certified lenders to make all decisions, with respect to loans to be guaranteed by the Secretary under this subsection relating to creditworthiness,
the closing, monitoring, collection, and liquidation of loans,
and to accept appropriate certifications, as provided in
regulations issued by the Secretary, that the borrower is

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1131

in compliance with all requirements of law and regulations
issued by the Secretary.’’.
SEC. 753. SYSTEM FOR DELIVERY OF CERTAIN RURAL DEVELOPMENT
PROGRAMS.

(a) IN GENERAL.—Section 365 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2008) is repealed.
(b) CONFORMING AMENDMENTS.—
(1) Section 2375 of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 6613) is amended—
(A) in subsection (e), by striking ‘‘, as defined in section
365(b)(2) of the Consolidated Farm and Rural Development
Act,’’; and
(B) by adding at the end the following:
‘‘(g) DEFINITION OF DESIGNATED RURAL DEVELOPMENT PROGRAM.—In this section, the term ‘designated rural development
program’ means a program carried out under section 304(b), 306(a),
or 310B(e) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 1924(b), 1926(a), and 1932(e)) for which funds are available at any time during the fiscal year.’’.
(2) Paragraph (2) of section 233(b) of the Department of
Agriculture Reorganization Act of 1994 (7 U.S.C. 6943(b)) (as
redesignated by section 747(b)(3)(B)) is amended by striking
‘‘sections 365 through 369 of the Consolidated Farm and Rural
Development Act (7 U.S.C. 2008–2008d)’’ and inserting ‘‘section
369 of the Consolidated Farm and Rural Development Act
(7 U.S.C. 2008d)’’.
SEC. 754. STATE RURAL ECONOMIC DEVELOPMENT REVIEW PANEL.

Section 366 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2008a) is repealed.
SEC. 755. LIMITED TRANSFER AUTHORITY OF LOAN AMOUNTS.

Section 367 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2008b) is repealed.
SEC. 756. ALLOCATION AND TRANSFER OF LOAN GUARANTEE AUTHORITY.

Section 368 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2008c) is repealed.
SEC. 757. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN
ALASKA.

The Consolidated Farm and Rural Development Act is amended
by inserting after section 306C (7 U.S.C. 1926c) the following:
‘‘SEC. 306D. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN
ALASKA.

‘‘(a) IN GENERAL.—The Secretary may make grants to the State
of Alaska for the benefit of rural or Native villages in Alaska
to provide for the development and construction of water and
wastewater systems to improve the health and sanitation conditions
in those villages.
‘‘(b) MATCHING FUNDS.—To be eligible to receive a grant under
subsection (a), the State of Alaska shall provide equal matching
funds from non-Federal sources.
‘‘(c) CONSULTATION WITH THE STATE OF ALASKA.—The Secretary
shall consult with the State of Alaska on a method of prioritizing

7 USC 1926d.

110 STAT. 1132

PUBLIC LAW 104–127—APR. 4, 1996

the allocation of grants under subsection (a) according to the needs
of, and relative health and sanitation conditions in, each village.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $15,000,000 for each
of fiscal years 1996 through 2002.’’.
SEC. 758. APPLICATION REQUIREMENTS RELATING TO WATER AND
WASTE DISPOSAL LOAN AND GRANT PROGRAMS.
7 USC 1926.

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 926(a)) is amended by inserting after paragraph
(4) the following:
‘‘(5) APPLICATION REQUIREMENTS.—Not earlier than 60 days
before a preliminary application is filed for a loan under paragraph (1) or a grant under paragraph (2) for a water or waste
disposal purpose, a notice of the intent of the applicant to
apply for the loan or grant shall be published in a general
circulation newspaper. The selection of engineers for a project
design shall be done by a request for proposals by the
applicant.’’.
SEC. 759. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER.

The Consolidated Farm and Rural Development Act (as amended by section 649) is amended by adding at the end the following:
Goats.
7 USC 2008j.

‘‘SEC. 375. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER.

‘‘(a) DEFINITIONS.—In this section:
‘‘(1) BOARD.—The term ‘Board’ means the Board of Directors established under subsection (f).
‘‘(2) CENTER.—The term ‘Center’ means the National Sheep
Industry Improvement Center established under subsection (b).
‘‘(3) ELIGIBLE ENTITY.—The term ‘eligible entity’ means an
entity that promotes the betterment of the United States sheep
or goat industries and that is—
‘‘(A) a public, private, or cooperative organization;
‘‘(B) an association, including a corporation not operated for profit;
‘‘(C) a federally recognized Indian Tribe; or
‘‘(D) a public or quasi-public agency.
‘‘(4) FUND.—The term ‘Fund’ means the National Sheep
Industry Improvement Center Revolving Fund established
under subsection (e).
‘‘(b) ESTABLISHMENT OF CENTER.—The Secretary shall establish
a National Sheep Industry Improvement Center.
‘‘(c) PURPOSES.—The purposes of the Center shall be to—
‘‘(1) promote strategic development activities and collaborative efforts by private and State entities to maximize the
impact of Federal assistance to strengthen and enhance production and marketing of sheep or goat products in the United
States;
‘‘(2) optimize the use of available human capital and
resources within the sheep or goat industries;
‘‘(3) provide assistance to meet the needs of the sheep
or goat industry for infrastructure development, business development, production, resource development, and market and
environmental research;
‘‘(4) advance activities that empower and build the capacity
of the United States sheep or goat industry to design unique

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110 STAT. 1133

responses to the special needs of the sheep or goat industries
on both a regional and national basis; and
‘‘(5) adopt flexible and innovative approaches to solving
the long-term needs of the United States sheep or goat industry.
‘‘(d) STRATEGIC PLAN.—
‘‘(1) IN GENERAL.—The Center shall submit to the Secretary
an annual strategic plan for the delivery of financial assistance
provided by the Center.
‘‘(2) REQUIREMENTS.—A strategic plan shall identify—
‘‘(A) goals, methods, and a benchmark for measuring
the success of carrying out the plan and how the plan
relates to the national and regional goals of the Center;
‘‘(B) the amount and sources of Federal and non-Federal funds that are available for carrying out the plan;
‘‘(C) funding priorities;
‘‘(D) selection criteria for funding; and
‘‘(E) a method of distributing funding.
‘‘(e) REVOLVING FUND.—
‘‘(1) ESTABLISHMENT.—There is established in the Treasury
the National Sheep Industry Improvement Center Revolving
Fund. The Fund shall be available to the Center, without
fiscal year limitation, to carry out the authorized programs
and activities of the Center under this section.
‘‘(2) CONTENTS OF FUND.—There shall be deposited in the
Fund—
‘‘(A) such amounts as may be appropriated, transferred,
or otherwise made available to support programs and
activities of the Center;
‘‘(B) payments received from any source for products,
services, or property furnished in connection with the
activities of the Center;
‘‘(C) fees and royalties collected by the Center from
licensing or other arrangements relating to commercialization of products developed through projects funded, in
whole or part, by grants, contracts, or cooperative agreements executed by the Center;
‘‘(D) proceeds from the sale of assets, loans, and equity
interests made in furtherance of the purposes of the Center;
‘‘(E) donations or contributions accepted by the Center
to support authorized programs and activities; and
‘‘(F) any other funds acquired by the Center.
‘‘(3) USE OF FUND.—
‘‘(A) IN GENERAL.—The Center may use amounts in
the Fund to make grants and loans to eligible entities
in accordance with a strategic plan submitted under subsection (d).
‘‘(B) CONTINUED EXISTENCE.—The Center shall manage
the Fund in a manner that ensures that sufficient amounts
are available in the Fund to carry out subsection (c).
‘‘(C) DIVERSE AREA.—The Center shall, to the maximum
extent practicable, use the Fund to serve broad geographic
areas and regions of diverse production.
‘‘(D) VARIETY OF LOANS AND GRANTS.—The Center shall,
to the maximum extent practicable, use the Fund to provide
a variety of grants and intermediate- and long-term loans.

110 STAT. 1134

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(E) ADMINISTRATION.—The Center may not use more
than 3 percent of the amounts in the Fund for a fiscal
year for the administration of the Center.
‘‘(F) INFLUENCING LEGISLATION.—None of the amounts
in the Fund may be used to influence legislation.
‘‘(G) ACCOUNTING.—To be eligible to receive amounts
from the Fund, an entity must agree to account for the
amounts using generally accepted accounting principles.
‘‘(H) USES OF FUND.—The Center may use amounts
in the Fund to—
‘‘(i) participate with Federal and State agencies
in financing activities that are in accordance with a
strategic plan submitted under subsection (d), including participation with several States in a regional
effort;
‘‘(ii) participate with other public and private funding sources in financing activities that are in accordance with the strategic plan, including participation
in a regional effort;
‘‘(iii) provide security for, or make principal or
interest payments on, revenue or general obligation
bonds issued by a State, if the proceeds from the sale
of the bonds are deposited in the Fund;
‘‘(iv) accrue interest;
‘‘(v) guarantee or purchase insurance for local
obligations to improve credit market access or reduce
interest rates for a project that is in accordance with
the strategic plan; or
‘‘(vi) sell assets, loans, and equity interests
acquired in connection with the financing of projects
funded by the Center.
‘‘(4) LOANS.—
‘‘(A) RATE.—A loan from the Fund may be made at
an interest rate that is below the market rate or may
be interest free.
‘‘(B) TERM.—The term of a loan may not exceed the
shorter of—
‘‘(i) the useful life of the activity financed; or
‘‘(ii) 40 years.
‘‘(C) SOURCE OF REPAYMENT.—The Center may not
make a loan from the Fund unless the recipient establishes
an assured source of repayment.
‘‘(D) PROCEEDS.—All payments of principal and interest
on a loan made from the Fund shall be deposited into
the Fund.
‘‘(5) MAINTENANCE OF EFFORT.—The Center shall use the
Fund only to supplement and not to supplant Federal, State,
and private funds expended for rural development.
‘‘(6) FUNDING.—
‘‘(A) DEPOSIT OF FUNDS.—All Federal and non-Federal
amounts received by the Center to carry out this section
shall be deposited in the Fund.
‘‘(B) MANDATORY FUNDS.—Out of any moneys in the
Treasury not otherwise appropriated, the Secretary of the
Treasury shall provide to the Center not to exceed
$20,000,000 to carry out this section.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1135

‘‘(C) ADDITIONAL FUNDS.—In addition to any funds provided under subparagraph (B), there is authorized to be
appropriated $30,000,000 to carry out this section.
‘‘(D) PRIVATIZATION.—No additional Federal funds shall
be used to carry out this section beginning on the earlier
of—
‘‘(i) the date that is 10 years after the date of
enactment of this section; or
‘‘(ii) the day after a total of $50,000,000 has been
made available under subparagraphs (B) and (C) to
carry out this section.
‘‘(f) BOARD OF DIRECTORS.—
‘‘(1) IN GENERAL.—The management of the Center shall
be vested in a Board of Directors.
‘‘(2) POWERS.—The Board shall—
‘‘(A) be responsible for the general supervision of the
Center;
‘‘(B) review any grant, loan, contract, or cooperative
agreement to be made or entered into by the Center and
any financial assistance provided to the Center;
‘‘(C) make the final decision, by majority vote, on
whether and how to provide assistance to an applicant;
and
‘‘(D) develop and establish a budget plan and a longterm operating plan to carry out the goals of the Center.
‘‘(3) COMPOSITION.—The Board shall be composed of—
‘‘(A) 7 voting members, of whom—
‘‘(i) 4 members shall be active producers of sheep
or goats in the United States;
‘‘(ii) 2 members shall have expertise in finance
and management; and
‘‘(iii) 1 member shall have expertise in lamb, wool,
goat, or goat product marketing; and
‘‘(B) 2 nonvoting members, of whom—
‘‘(i) 1 member shall be the Under Secretary of
Agriculture for Rural Development; and
‘‘(ii) 1 member shall be the Under Secretary of
Agriculture for Research, Education, and Economics.
‘‘(4) NOMINATION.—
‘‘(A) NOMINATING BODY.—The Secretary shall appoint
the voting members of the Board from nominations submitted by organizations described in subparagraph (B).
‘‘(B) NATIONAL ORGANIZATIONS.—A national organization is described in this subparagraph if the organization—
‘‘(i) consists primarily of active sheep or goat
producers in the United States; and
‘‘(ii) has as the primary interest of the organization
the production of sheep or goats in the United States.
‘‘(5) TERM OF OFFICE.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
term of office of a voting member of the Board shall be
3 years.
‘‘(B) STAGGERED INITIAL TERMS.—The initial voting
members of the Board (other than the chairperson of the
initially established Board) shall serve for staggered terms
of 1, 2, and 3 years, as determined by the Secretary.

110 STAT. 1136

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(C) REELECTION.—A voting member may be reelected
for not more than 1 additional term.
‘‘(6) VACANCY.—
‘‘(A) IN GENERAL.—A vacancy on the Board shall be
filled in the same manner as the original Board.
‘‘(B) REELECTION.—A member elected to fill a vacancy
for an unexpired term may be reelected for 1 full term.
‘‘(7) CHAIRPERSON.—
‘‘(A) IN GENERAL.—The Board shall select a chairperson
from among the voting members of the Board.
‘‘(B) TERM.—The term of office of the chairperson shall
be 2 years.
‘‘(8) ANNUAL MEETING.—
‘‘(A) IN GENERAL.—The Board shall meet not less than
once each fiscal year at the call of the chairperson or
at the request of the executive director appointed under
subsection (g)(1).
‘‘(B) LOCATION.—The location of a meeting of the Board
shall be established by the Board.
‘‘(9) VOTING.—
‘‘(A) QUORUM.—A quorum of the Board shall consist
of a majority of the voting members.
‘‘(B) MAJORITY VOTE.—A decision of the Board shall
be made by a majority of the voting members of the Board.
‘‘(10) CONFLICTS OF INTEREST.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(D), a member of the Board shall not vote on any matter
respecting any application, contract, claim, or other particular matter pending before the Board in which, to the knowledge of the member, an interest is held by—
‘‘(i) the member;
‘‘(ii) any spouse of the member;
‘‘(iii) any child of the member;
‘‘(iv) any partner of the member;
‘‘(v) any organization in which the member is serving as an officer, director, trustee, partner, or employee;
or
‘‘(vi) any person with whom the member is negotiating or has any arrangement concerning prospective
employment or with whom the member has a financial
interest.
‘‘(B) REMOVAL.—Any action by a member of the Board
that violates subparagraph (A) shall be cause for removal
from the Board.
‘‘(C) VALIDITY OF ACTION.—An action by a member
of the Board that violates subparagraph (A) shall not
impair or otherwise affect the validity of any otherwise
lawful action by the Board.
‘‘(D) DISCLOSURE.—
‘‘(i) IN GENERAL.—If a member of the Board makes
a full disclosure of an interest and, prior to any participation by the member, the Board determines, by majority vote, that the interest is too remote or too inconsequential to affect the integrity of any participation
by the member, the member may participate in the
matter relating to the interest, except as provided in
subparagraph (E)(iii).

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110 STAT. 1137

‘‘(ii) VOTE.—A member that discloses an interest
under clause (i) shall not vote on a determination
of whether the member may participate in the matter
relating to the interest.
‘‘(E) REMANDS.—
‘‘(i) IN GENERAL.—The Secretary may vacate and
remand to the Board for reconsideration any decision
made pursuant to subsection (e)(3)(H) if the Secretary
determines that there has been a violation of this
paragraph or any conflict of interest provision of the
bylaws of the Board with respect to the decision.
‘‘(ii) REASONS.—In the case of any violation and
remand of a funding decision to the Board under clause
(i), the Secretary shall inform the Board of the reasons
for the remand.
‘‘(iii) CONFLICTED MEMBERS NOT TO VOTE ON
REMANDED DECISIONS.—If a decision with respect to
a matter is remanded to the Board by reason of a
conflict of interest faced by a Board member, the member may not participate in any subsequent decision
with respect to the matter.
‘‘(11) COMPENSATION.—
‘‘(A) IN GENERAL.—A member of the Board shall not
receive any compensation by reason of service on the Board.
‘‘(B) EXPENSES.—A member of the Board shall be
reimbursed for travel, subsistence, and other necessary
expenses incurred by the member in the performance of
a duty of the member.
‘‘(12) BYLAWS.—The Board shall adopt, and may from time
to time amend, any bylaw that is necessary for the proper
management and functioning of the Center.
‘‘(13) PUBLIC HEARINGS.—Not later than 1 year after the
date of enactment of this section, the Board shall hold public
hearings on policy objectives of the program established under
this section.
‘‘(14) ORGANIZATIONAL SYSTEM.—The Board shall provide
a system of organization to fix responsibility and promote efficiency in carrying out the functions of the Board.
‘‘(15) USE OF DEPARTMENT OF AGRICULTURE.—The Board
may, with the consent of the Secretary, utilize the facilities
of and the services of employees of the Department of Agriculture, without cost to the Center.
‘‘(g) OFFICERS AND EMPLOYEES.—
‘‘(1) EXECUTIVE DIRECTOR.—
‘‘(A) IN GENERAL.—The Board shall appoint an executive director to be the chief executive officer of the Center.
‘‘(B) TENURE.—The executive director shall serve at
the pleasure of the Board.
‘‘(C) COMPENSATION.—Compensation for the executive
director shall be established by the Board.
‘‘(2) OTHER OFFICERS AND EMPLOYEES.—The Board may
select and appoint officers, attorneys, employees, and agents
who shall be vested with such powers and duties as the Board
may determine.
‘‘(3) DELEGATION.—The Board may, by resolution, delegate
to the chairperson, the executive director, or any other officer
or employee any function, power, or duty of the Board other

110 STAT. 1138

PUBLIC LAW 104–127—APR. 4, 1996

than voting on a grant, loan, contract, agreement, budget, or
annual strategic plan.
‘‘(h) CONSULTATION.—To carry out this section, the Board may
consult with—
‘‘(1) State departments of agriculture;
‘‘(2) Federal departments and agencies;
‘‘(3) nonprofit development corporations;
‘‘(4) colleges and universities;
‘‘(5) banking and other credit-related agencies;
‘‘(6) agriculture and agribusiness organizations; and
‘‘(7) regional planning and development organizations.
‘‘(i) OVERSIGHT.—
‘‘(1) IN GENERAL.—The Secretary shall review and monitor
compliance by the Board and the Center with this section.
‘‘(2) SANCTIONS.—If, following notice and opportunity for
a hearing, the Secretary finds that the Board or the Center
is not in compliance with this section, the Secretary may—
‘‘(A) cease making deposits to the Fund;
‘‘(B) suspend the authority of the Center to withdraw
funds from the Fund; or
‘‘(C) impose other appropriate sanctions, including
recoupment of money improperly expended for purposes
prohibited or not authorized by this Act and disqualification
from receipt of financial assistance under this section.
‘‘(3) RESCISSION OF SANCTIONS.—The Secretary shall
rescind sanctions imposed under paragraph (2) on a finding
by the Secretary that there is no longer any failure by the
Board or the Center to comply with this section or that the
noncompliance will be promptly corrected.’’.
SEC. 759A. COOPERATIVE AGREEMENTS.

Section 607(b) of the Rural Development Act of 1972 (7 U.S.C.
2204b(b)) is amended by striking paragraph (4) and inserting the
following:
‘‘(4) COOPERATIVE AGREEMENTS.—
‘‘(A) IN GENERAL.—Notwithstanding chapter 63 of title
31, United States Code, the Secretary may enter into
cooperative agreements with other Federal agencies, State
and local governments, and any other organization or
individual to improve the coordination and effectiveness
of Federal programs, services, and actions affecting rural
areas, including the establishment and financing of interagency groups, if the Secretary determines that the objectives of the agreement will serve the mutual interest of
the parties in rural development activities.
‘‘(B) COOPERATORS.—Each cooperator, including each
Federal agency, to the extent that funds are otherwise
available, may participate in any cooperative agreement
or working group established pursuant to this paragraph
by contributing funds or other resources to the Secretary
to carry out the agreement or functions of the group.’’.
SEC. 759B. ELIGIBILITY FOR GRANTS TO BROADCASTING SYSTEMS.

Section 310B(f) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(f)) (as redesignated by section 747(a)(6))
is amended by striking ‘‘SYSTEMS.—The’’ and inserting ‘‘SYSTEMS.—
‘‘(1) DEFINITION OF STATEWIDE.—In this subsection, the
term ‘statewide’ means having a coverage area of not less

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1139

than 90 percent of the population of a State and not less
than 80 percent of the rural land area of the State (as determined by the Secretary).
‘‘(2) GRANTS.—The’’.
CHAPTER 2—RURAL COMMUNITY ADVANCEMENT
PROGRAM
SEC. 761. RURAL COMMUNITY ADVANCEMENT PROGRAM.

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

‘‘Subtitle E—Rural Community
Advancement Program
‘‘SEC. 381A. DEFINITIONS.

7 USC 2009.

‘‘In this subtitle:
‘‘(1) RURAL AND RURAL AREA.—The terms ‘rural’ and ‘rural
area’ mean, subject to section 306(a)(7), a city, town, or unincorporated area that has a population of 50,000 inhabitants or
less, other than an urbanized area immediately adjacent to
a city, town, or unincorporated area that has a population
in excess of 50,000 inhabitants.
‘‘(2) STATE.—The term ‘State’ means each of the 50 States,
the District of Columbia, the Commonwealth of Puerto Rico,
Guam, the Virgin Islands of the United States, American
Samoa, the Commonwealth of the Northern Mariana Islands,
the Trust Territory of the Pacific Islands, and the Federated
States of Micronesia.
‘‘(3) STATE DIRECTOR.—The term ‘State director’ means,
with respect to a State, the Director of the Rural Economic
and Community Development State Office.
‘‘SEC. 381B. ESTABLISHMENT.

7 USC 2009a.

‘‘The Secretary shall establish a rural community advancement
program to provide grants, loans, loan guarantees, and other assistance to meet the rural development needs of local communities
in States and federally recognized Indian tribes.
‘‘SEC. 381C. NATIONAL OBJECTIVES.

‘‘The national objectives of the program established under this
subtitle shall be to—
‘‘(1) promote strategic development activities and collaborative efforts by State and local communities, and federally
recognized Indian tribes, to maximize the impact of Federal
assistance;
‘‘(2) optimize the use of resources;
‘‘(3) provide assistance in a manner that reflects the
complexity of rural needs, including the needs for business
development, health care, education, infrastructure, cultural
resources, the environment, and housing;
‘‘(4) advance activities that empower, and build the capacity
of, State and local communities to design unique responses
to the special needs of the State and local communities, and
federally recognized Indian tribes, for rural development assistance; and

7 USC 2009b.

110 STAT. 1140

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(5) adopt flexible and innovative approaches to solving
rural development problems.

7 USC 2009c.

‘‘SEC. 381D. STRATEGIC PLANS.

‘‘(a) IN GENERAL.—The Secretary shall direct each of the Directors of Rural Economic and Community Development State Offices
to prepare a strategic plan—
‘‘(1) for each State for the delivery of assistance under
this subtitle in the State; and
‘‘(2) for each federally recognized Indian tribe for the delivery of assistance under this subtitle to the Indian tribe.
‘‘(b) ASSISTANCE.—
‘‘(1) IN GENERAL.—Financial assistance for rural development provided under this subtitle for a State or a federally
recognized Indian tribe shall be used only for orderly community development that is consistent with the strategic plan
of the State or Indian tribe.
‘‘(2) RURAL AREA.—Assistance under this subtitle may only
be provided in a rural area.
‘‘(3) SMALL COMMUNITIES.—In carrying out this subtitle
in a State, the Secretary shall give priority to communities
with the smallest populations and lowest per capita income.
‘‘(c) REVIEW.—The Secretary shall review the strategic plan
of each State and federally recognized Indian tribe not later than
60 days after receiving the plan, and at least once every 5 years
thereafter.
‘‘(d) CONTENTS.—A strategic plan of a State or federally recognized Indian tribe under this section shall be a plan that—
‘‘(1) coordinates economic, human, and community development plans and related activities proposed for an affected area;
‘‘(2) provides that the State or federally recognized Indian
tribe, as appropriate, and an affected community (including
local institutions and organizations that have contributed to
the planning process) shall act as full partners in the process
of developing and implementing the plan;
‘‘(3) identifies goals, methods, and benchmarks for measuring the success of carrying out the plan and how the plan
relates to local or regional ecosystems;
‘‘(4) in the case of a State, provides for the involvement,
in the preparation of the plan, of State, local, private, and
public persons, State rural development councils, federally recognized Indian tribes in the State, and community-based
organizations;
‘‘(5) identifies the amount and source of Federal and nonFederal resources that are available for carrying out the plan;
and
‘‘(6) includes such other information as may be required
by the Secretary.
7 USC 2009d.

‘‘SEC. 381E. RURAL DEVELOPMENT TRUST FUND.

‘‘(a) ESTABLISHMENT.—There is established in the Treasury of
the United States a trust fund which shall be known as the Rural
Development Trust Fund (in this subtitle referred to as the ‘Trust
Fund’).
‘‘(b) ACCOUNTS.—There are established in the Trust Fund the
following accounts:
‘‘(1) The rural community facilities account.
‘‘(2) The rural utilities account.

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110 STAT. 1141

‘‘(3) The rural business and cooperative development
account.
‘‘(4) The national reserve account.
‘‘(5) The federally recognized Indian tribe account.
‘‘(c) DEPOSITS INTO ACCOUNTS.—Notwithstanding any other
provision of law, each fiscal year—
‘‘(1) all amounts made available to carry out the authorities
described in subsection (d)(1) for the fiscal year shall be deposited into the rural community facilities account of the Trust
Fund;
‘‘(2) all amounts made available to carry out the authorities
described in subsection (d)(2) for the fiscal year shall be deposited into the rural utilities account of the Trust Fund; and
‘‘(3) all amounts made available to carry out the authorities
described in subsection (d)(3) for the fiscal year shall be deposited into the rural business and cooperative development
account of the Trust Fund.
‘‘(d) FUNCTION CATEGORIES.—The function categories described
in this subsection are the following:
‘‘(1) RURAL COMMUNITY FACILITIES.—The rural community
development category consists of all amounts made available
for—
‘‘(A) community facility direct and guaranteed loans
under section 306(a)(1); or
‘‘(B) community facility grants under section 306(a)(19).
‘‘(2) RURAL UTILITIES.—The rural utilities category consists
of all amounts made available for—
‘‘(A) water or waste disposal grants or direct or guaranteed loans under paragraph (1) or (2) of section 306(a);
‘‘(B) rural water or wastewater technical assistance
and training grants under section 306(a)(14);
‘‘(C) emergency community water assistance grants
under section 306A; or
‘‘(D) solid waste management grants under section
310B(b).
‘‘(3) RURAL BUSINESS AND COOPERATIVE DEVELOPMENT.—
The rural business and cooperative development category consists of all amounts made available for—
‘‘(A) rural business opportunity grants under section
306(a)(11)(A);
‘‘(B) business and industry guaranteed loans under
section 310B(a)(1); or
‘‘(C) rural business enterprise grants or rural educational network grants under section 310B(c).
‘‘(e) NATIONAL RESERVE ACCOUNT.—
‘‘(1) TRANSFERS INTO ACCOUNT.—
‘‘(A) INITIAL TRANSFER.—Each fiscal year, the Secretary
shall transfer to the national reserve account of the Trust
Fund from each account specified in subsection (c) not
more than the applicable percentage of the amount deposited in each such account for the fiscal year under subsection (c).
‘‘(B) REPOOLING OF UNOBLIGATED FUNDS ALLOCATED
AMONG THE STATES.—Not earlier than July 15 of each
fiscal year, the Secretary shall transfer to the national
reserve account from each account specified in subsection
(c) any amount in the account that is allocated for any

110 STAT. 1142

PUBLIC LAW 104–127—APR. 4, 1996

State, and has not been obligated by the State director
or obligated for specific approved projects in the State.
‘‘(2) USE.—The Secretary may use amounts in the national
reserve account of the Trust Fund, pursuant to any authority
described in subsection (d)—
‘‘(A) in the case of a fiscal year other than fiscal year
2001 or 2002—
‘‘(i) to meet situations of exceptional need;
‘‘(ii) to meet emergency situations; or
‘‘(iii) to provide funds to entities whose applications
for funds provided under this subtitle have been
approved and who have not received funds sufficient
to meet the needs of the projects described in the
applications; or
‘‘(B) in the case of fiscal years 2001 and 2002—
‘‘(i) to meet situations of exceptional need; or
‘‘(ii) to meet emergency situations.
‘‘(3) APPLICABLE PERCENTAGE DEFINED.—In paragraph (1),
the term ‘applicable percentage’ means, with respect to a fiscal
year—
‘‘(A) 15 percent for fiscal year 1997;
‘‘(B) 12.5 percent for fiscal year 1998;
‘‘(C) 10 percent for fiscal year 1999;
‘‘(D) 7.5 percent for fiscal year 2000;
‘‘(E) 5 percent for fiscal year 2001; and
‘‘(F) 5 percent for fiscal year 2002.
‘‘(f) FEDERALLY RECOGNIZED INDIAN TRIBE ACCOUNT.—
‘‘(1) TRANSFERS INTO ACCOUNT.—Each fiscal year, the Secretary shall transfer to the federally recognized Indian tribe
account of the Trust Fund 3 percent of the amount deposited
into the Trust Fund for the fiscal year under subsection (d).
‘‘(2) USE OF FUNDS.—The Secretary shall make available
to federally recognized Indian tribes the amounts in the federally recognized Indian tribe account for use pursuant to any
authority described in subsection (d).
‘‘(g) ALLOCATION AMONG STATES.—The Secretary shall allocate
the amounts in each account specified in subsection (c) among
the States in a fair, reasonable, and appropriate manner that takes
into consideration rural population, levels of income, unemployment,
and other relevant factors, as determined by the Secretary.
‘‘(h) AVAILABILITY OF FUNDS ALLOCATED FOR STATES.—The Secretary shall make available to each State the total amount allocated
for the State under subsection (g) of this section that remains
after applying section 381G.
7 USC 2009e.

‘‘SEC. 381F. TRANSFERS OF FUNDS.

‘‘(a) GENERAL AUTHORITY.—Subject to subsection (b) of this
section, the State Director of any State may, during any fiscal
year, transfer from each account specified in section 381E(c) a
total of not more than 25 percent of the amount in the account
that is allocated for the State for the fiscal year to any other
account in which amounts are allocated for the State for the fiscal
year.
‘‘(b) LIMITATION.—Except as provided in subsection (c) of this
section, a transfer otherwise authorized by subsection (a) of this
section to be made during a fiscal year may not be made to the
extent that the sum of the amount to be transferred and all amounts

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1143

so transferred by State directors under subsection (a) of this section
during the fiscal year exceeds 10 percent of the total amount made
available to carry out the authorities described in section 381E(d)
for the fiscal year.
‘‘(c) EXCEPTIONS.—Subsections (a) and (b) shall not apply to
a transfer of funds by a State director if the State director certifies
to the Secretary that—
‘‘(1) there is an approved application for a project in the
function category to which the funds are to be transferred
but funds are not available for the project in the function
category; and
‘‘(2)(A) there is no such approved application in the function
category from which the funds are to be transferred; or
‘‘(B) the community that would benefit from the project
has a smaller population and a lesser per capita income than
any community that would benefit from a project in the function
category from which the funds are to be transferred.
‘‘SEC. 381G. GRANTS TO STATES.

‘‘(a) SIMPLE GRANTS.—
‘‘(1) MANDATORY GRANT.—The Secretary shall make a grant
to any eligible State for any fiscal year for which the State
requests a grant under this section in an amount equal to
5 percent of the total amount allocated for the State under
section 381E(g).
‘‘(2) PERMISSIVE GRANT.—Before July 15 of each fiscal year,
the Secretary may make a grant to any State to defray the
cost of any subsidy associated with a guarantee provided by
an eligible public entity of the State under section 381H in
an amount that does not exceed 5 percent of the total amount
allocated for the State under section 381E(g).
‘‘(3) SOURCE OF FUNDS.—The Secretary shall make grants
to a State under paragraphs (1) and (2) from amounts allocated
for the State in the accounts specified in section 381E(c), by
reducing each such allocated amount by the same percentage.
‘‘(b) MATCHING GRANTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), the Secretary
shall make a grant to any eligible State for any fiscal year
for which the State requests a grant under this section in
an amount equal to 5 percent of the amount allocated for
the State for the fiscal year under section 381E(h).
‘‘(2) ELIGIBILITY.—A State shall be eligible for a grant
under paragraph (1) if the State makes commitments to the
Secretary to—
‘‘(A) expend from non-Federal sources in accordance
with subsection (c) an amount that is not less than 200
percent of the amount of the grant; and
‘‘(B) maintain the amounts paid to the State under
this subsection and the amount referred to in subparagraph
(A) in an account separate from all other State funds
until expended in accordance with subsection (c).
‘‘(3) SOURCE OF FUNDS.—If the Secretary makes a grant
under paragraph (1) before July 15 of the fiscal year, the
grant shall be made from amounts allocated for the State
in the accounts specified in section 381E(c) for the fiscal year,
by reducing each allocated amount by the same percentage.

7 USC 2009f.

110 STAT. 1144

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(c) USE OF FUNDS.—A State to which funds are provided
under this section shall use the funds in rural areas for any activity
authorized under the authorities described in section 381E(d) in
accordance with the State strategic plan referred to in section
381D.
‘‘(d) MAINTENANCE OF EFFORT.—The State shall provide assurances to the Secretary that funds provided to the State under
this section will be used only to supplement, not to supplant,
the amount of Federal, State, and local funds otherwise expended
for rural development assistance in the State.
‘‘(e) APPEALS.—The Secretary shall provide to a State an opportunity to appeal any action taken with respect to the State under
this section.
‘‘(f) ADMINISTRATIVE COSTS.—Federal funds shall not be used
for any administrative costs incurred by a State in carrying out
this subtitle.
‘‘(g) EXPENDITURE OF FUNDS BY STATE.—
‘‘(1) IN GENERAL.—Payments to a State from a grant under
this section for a fiscal year shall be obligated by the State
in the fiscal year or in the succeeding fiscal year. A State
shall obligate funds under this section to provide assistance
to rural areas.
‘‘(2) FAILURE TO OBLIGATE.—If a State fails to obligate
payments in accordance with paragraph (1), the Secretary shall
make an equal reduction in the amount of payments provided
to the State under this section for the immediately succeeding
fiscal year.
‘‘(3) NONCOMPLIANCE.—
‘‘(A) REVIEW.—The Secretary shall review and monitor
State compliance with this section.
‘‘(B) PENALTY.—If the Secretary finds that there has
been misuse of grant funds provided under this section,
or noncompliance with any of the terms and conditions
of a grant, after reasonable notice and opportunity for
a hearing—
‘‘(i) the Secretary shall notify the State of the
finding; and
‘‘(ii) no further payments to the State shall be
made with respect to the programs funded under this
section until the Secretary is satisfied that there is
no longer any failure to comply or that the noncompliance will be promptly corrected.
‘‘(C) OTHER SANCTIONS.—In the case of a finding of
noncompliance made pursuant to subparagraph (B), the
Secretary may, in addition to, or in lieu of, imposing the
sanctions described in subparagraph (B), impose other
appropriate sanctions, including recoupment of money
improperly expended for purposes prohibited or not authorized by this section and disqualification from the receipt
of financial assistance under this section.
‘‘(h) NO ENTITLEMENT TO CONTRACT, GRANT, OR ASSISTANCE.—
Nothing in this subtitle—
‘‘(1) entitles any person to assistance or a contract or grant;
or
‘‘(2) limits the right of a State to impose additional limitations or conditions on assistance or a contract or grant under
this section.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1145

‘‘SEC. 381H. GUARANTEE AND COMMITMENT TO GUARANTEE LOANS.

‘‘(a) DEFINITION OF ELIGIBLE PUBLIC ENTITY.—In this section,
the term ‘eligible public entity’ means any unit of general local
government.
‘‘(b) GUARANTEE AND COMMITMENT.—The Secretary, on such
terms and conditions as the Secretary may prescribe, may guarantee
and make commitments to guarantee notes or other obligations
issued by eligible public entities, or by public agencies designated
by the eligible public entities, for the purposes of financing rural
development activities authorized and funded under section 381G.
‘‘(c) LIMITATION.—The Secretary may not make a guarantee
or commitment to guarantee with respect to a note or other obligation if the total amount of outstanding notes or obligations guaranteed under this section (excluding any amount repaid under the
contract entered into under subsection (e)(1)(A)) for issuers in the
State would exceed an amount equal to 5 times the sum of the
total amount of grants made to the State under section 381G.
‘‘(d) PAYMENT OF PRINCIPAL, INTEREST, AND COSTS.—Notwithstanding any other provision of this subtitle, a State to which
a grant is made under section 381G may use the grant (including
program income derived from the grant) to pay principal and
interest due (including such servicing, underwriting, or other costs
as may be specified in regulations of the Secretary) on any note
or other obligation guaranteed under this section.
‘‘(e) REPAYMENT CONTRACT; SECURITY.—
‘‘(1) IN GENERAL.—To ensure the repayment of notes or
other obligations and charges incurred under this section and
as a condition for receiving the guarantees, the Secretary shall
require the issuer to—
‘‘(A) enter into a contract, in a form acceptable to
the Secretary, for repayment of notes or other obligations
guaranteed under this section;
‘‘(B) pledge any grant for which the issuer may become
eligible under this subtitle; and
‘‘(C) furnish, at the discretion of the Secretary, such
other security as may be considered appropriate by the
Secretary in making the guarantees.
‘‘(2) SECURITY.—To assist in ensuring the repayment of
notes or other obligations and charges incurred under this
section, a State shall pledge any grant for which the State
may become eligible under this subtitle as security for notes
or other obligations and charges issued under this section by
any eligible public entity in the State.
‘‘(f) PLEDGED GRANTS FOR REPAYMENTS.—Notwithstanding any
other provision of this subtitle, the Secretary may apply grants
pledged pursuant to paragraphs (1)(B) and (2) of subsection (e)
to any repayments due the United States as a result of the guarantees.
‘‘(g) OUTSTANDING OBLIGATIONS.—The total amount of outstanding obligations guaranteed on a cumulative basis by the Secretary
pursuant to subsection (b) shall not at any time exceed such amount
as may be authorized to be appropriated for such purpose for
any fiscal year.
‘‘(h) PURCHASE OF GUARANTEED OBLIGATIONS BY FEDERAL
FINANCING BANK.—Notes or other obligations guaranteed under
this section may not be purchased by the Federal Financing Bank.

7 USC 2009g.

110 STAT. 1146

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) FULL FAITH AND CREDIT.—The full faith and credit of the
United States is pledged to the payment of all guarantees made
under this section. Any such guarantee made by the Secretary
shall be conclusive evidence of the eligibility of the obligations
for the guarantee with respect to principal and interest. The validity
of the guarantee shall be incontestable in the hands of a holder
of the guaranteed obligations.
7 USC 2009h.

‘‘SEC. 381I. LOCAL INVOLVEMENT.

‘‘An application for assistance under this subtitle shall include
evidence of significant community support for the project for which
the assistance is requested. In the case of assistance for a community facilities or infrastructure project, the evidence shall be in
the form of a certification of support for the project from each
affected general purpose local government.
7 USC 2009i.

‘‘SEC. 381J. INTERSTATE COLLABORATION.

‘‘The Secretary shall permit the establishment of voluntary
pooling arrangements among States, and regional fund-sharing
agreements, to carry out projects receiving assistance under this
subtitle.
7 USC 2009j.

‘‘SEC. 381K. ANNUAL REPORT.

‘‘(a) IN GENERAL.—The Secretary, in collaboration with State,
local, public, and private entities, State rural development councils,
and community-based organizations, shall prepare an annual report
that contains evaluations, assessments, and performance outcomes
concerning the rural community advancement programs carried
out under this subtitle.
‘‘(b) SUBMISSION.—Not later than March 1 of each year, the
Secretary shall—
‘‘(1) submit the report required by subsection (a) to Congress and the chief executives of the States participating in
the program established under this subtitle; and
‘‘(2) make the report available to State and local participants.
7 USC 2009k.

‘‘SEC. 381L. RURAL DEVELOPMENT INTERAGENCY WORKING GROUP.

‘‘(a) IN GENERAL.—The Secretary shall provide leadership
within the Executive branch for, and assume responsibility for,
establishing an interagency working group chaired by the Secretary.
‘‘(b) DUTIES.—The working group shall establish policy for,
coordinate, make recommendations with respect to, and evaluate
the performance of, all Federal rural development efforts.
7 USC 2009l.

‘‘SEC. 381M. DUTIES OF RURAL ECONOMIC AND COMMUNITY DEVELOPMENT STATE OFFICES.

‘‘In carrying out this subtitle, the Director of a Rural Economic
and Community Development State Office shall—
‘‘(1) to the maximum extent practicable, ensure that the
State strategic plan referred to in section 381D is implemented;
‘‘(2) coordinate community development objectives within
the State;
‘‘(3) establish links between local, State, and field office
program administrators of the Department of Agriculture;
‘‘(4) ensure that recipient communities comply with
applicable Federal and State laws and requirements; and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1147

‘‘(5) integrate State development programs with assistance
under this subtitle.
‘‘SEC. 381N. ELECTRONIC TRANSFER.

7 USC 2009m.

‘‘The Secretary shall transfer funds in accordance with this
subtitle through electronic transfer as soon as practicable after
the date of enactment of this subtitle.
‘‘SEC. 381O. RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM.

‘‘(a) IN GENERAL.—The Secretary may designate for each fiscal
year up to 10 community development venture capital organizations
to demonstrate the utility of guarantees to attract increased private
investment in rural private business enterprises.
‘‘(b) RURAL BUSINESS INVESTMENT POOL.—
‘‘(1) ESTABLISHMENT.—To be eligible to participate in the
demonstration program, an organization referred to in subsection (a) shall establish a rural business private investment
pool (referred to in this subsection as a ‘pool’) for the purpose
of making equity investments in rural private business enterprises.
‘‘(2) GUARANTEE.—From amounts in the national reserve
account of the Trust Fund, the Secretary shall guarantee the
funds in a pool against loss, except that the guarantee shall
not exceed an amount equal to 30 percent of the total funds
in the pool.
‘‘(3) AMOUNT.—The Secretary shall issue guarantees covering not more than $15,000,000 of contingent liabilities for each
of fiscal years 1996 through 2002.
‘‘(4) TERM.—The term of a guarantee provided under this
subsection shall not exceed 10 years.
‘‘(5) SUBMISSION OF PLAN.—To be eligible to participate
in the demonstration program, an organization referred to in
subsection (a) shall submit a plan that describes—
‘‘(A) potential sources and uses of the pool to be established by the organization;
‘‘(B) the utility of the guarantee authority in attracting
capital for the pool; and
‘‘(C) on selection, mechanisms for notifying State, local,
and private nonprofit business development organizations
and businesses of the existence of the pool.
‘‘(6) COMPETITION.—
‘‘(A) IN GENERAL.—The Secretary shall conduct a competition for the designation and establishment of pools.
‘‘(B) PRIORITY.—In conducting the competition, the Secretary shall give priority to organizations that—
‘‘(i) have a demonstrated record of performance,
or have a board and executive director with experience,
in venture capital, small business equity investment,
or community development finance;
‘‘(ii) propose to serve low-income communities;
‘‘(iii) propose to maintain an average investment
of not more than $500,000 from the pool of the
organization;
‘‘(iv) invest funds statewide or in a multicounty
region; and
‘‘(v) propose to target job opportunities resulting
from the investments primarily to economically dis-

7 USC 2009n.

110 STAT. 1148

PUBLIC LAW 104–127—APR. 4, 1996
advantaged individuals, as determined by the Secretary.
‘‘(C) GEOGRAPHIC DIVERSITY.—To the extent practicable, the Secretary shall designate organizations in
diverse geographic areas.’’.

7 USC 2204b
note.

SEC. 762. SIMPLIFIED, UNIFORM APPLICATION FOR ASSISTANCE FROM
ALL FEDERAL RURAL DEVELOPMENT PROGRAMS.

Not later than 1 year after the date of enactment of this
Act, the Secretary of Agriculture shall develop a streamlined, simplified, and uniform application which shall be used in applying
for assistance under all of the following:
(1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and
375 and subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926, 1926a, 1926c, 1926d, and
1932).
(2) Subtitle G of title XVI and sections 2281, 2333, and
2381 of the Food, Agriculture, Conservation, and Trade Act
of 1990 (7 U.S.C. 5901–5908, 5177a, 950aaa–2, and 3125b).
(3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102–
237: 7 U.S.C. 5930 note).
(4) Section 1323(b) of the Food Security Act of 1985 (Public
Law 99–198; 7 U.S.C. 1932 note).
(5) Title V and section 603(c) of the Rural Development
Act of 1972 (7 U.S.C. 2661–2669 and 2204a(c)).
(6) Sections 5 and 311 and title IV of the Rural Electrification Act of 1936 (7 U.S.C. 905, 940a, and 941–950b).
SEC. 763. COMMUNITY FACILITIES GRANT PROGRAM.

Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 741(a)(5))
is amended by adding at the end the following:
‘‘(19) COMMUNITY FACILITIES GRANT PROGRAM.—
‘‘(A) IN GENERAL.—The Secretary may make grants,
in a total amount not to exceed $10,000,000 for any fiscal
year, to associations, units of general local government,
nonprofit corporations, and federally recognized Indian
tribes to provide the Federal share of the cost of developing
specific essential community facilities in rural areas.
‘‘(B) FEDERAL SHARE.—
‘‘(i) IN GENERAL.—Except as provided in clauses
(ii) and (iii), the Secretary shall, by regulation, establish the amount of the Federal share of the cost of
the facility under this paragraph.
‘‘(ii) MAXIMUM AMOUNT.—The amount of a grant
provided under this paragraph for a facility shall not
exceed 75 percent of the cost of developing the facility.
‘‘(iii) GRADUATED SCALE.—The Secretary shall provide for a graduated scale for the amount of the Federal
share provided under this paragraph, with higher Federal shares for facilities in communities that have lower
community population and income levels, as determined by the Secretary.’’.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1149

Subtitle C—Amendments to the Rural
Electrification Act of 1936
SEC. 771. PURPOSES; INVESTIGATIONS AND REPORTS.

Section 2 of the Rural Electrification Act of 1936 (7 U.S.C.
902) is amended—
(1) by striking ‘‘SEC. 2. (a) The Secretary of Agriculture
is’’ and inserting the following:
‘‘SEC. 2. GENERAL AUTHORITY OF THE SECRETARY OF AGRICULTURE.

‘‘(a) LOANS.—The Secretary of Agriculture (referred to in this
Act as the ‘Secretary’) is’’;
(2) in subsection (a)—
(A) by striking ‘‘and the furnishing’’ the first place
it appears and all that follows through ‘‘central station
service’’; and
(B) by striking ‘‘systems; to make’’ and all that follows
and inserting ‘‘systems.’’; and
(3) by striking subsection (b) and inserting the following:
‘‘(b) INVESTIGATIONS AND REPORTS.—The Secretary may make,
or cause to be made, studies, investigations, and reports regarding
matters, including financial, technological, and regulatory matters,
affecting the condition and progress of electric, telecommunications,
and economic development in rural areas, and publish and disseminate information with respect to the matters.’’.
SEC. 772. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL.—Section 3 of the Rural Electrification Act
of 1936 (7 U.S.C. 903) is amended to read as follows:
‘‘SEC. 3. AUTHORIZATION OF APPROPRIATIONS.

‘‘There are authorized to be appropriated such sums as are
necessary to carry out this Act.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 301(a) of the Rural Electrification Act of 1936
(7 U.S.C. 931(a)) is amended—
(A) by striking ‘‘(a)’’ the first place the term appears;
and
(B) in paragraph (3), by striking ‘‘notwithstanding section 3(a) of title I,’’.
(2) Section 302(b)(2) of the Rural Electrification Act of
1936 (7 U.S.C. 932(b)(2)) is amended by striking ‘‘pursuant
to section 3(a) of this Act’’.
(3) The last sentence of section 406(a) of the Rural Electrification Act of 1936 (7 U.S.C. 946(a)) is amended by striking
‘‘pursuant to section 3(a) of this Act’’.
SEC. 773. LOANS FOR ELECTRICAL PLANTS AND TRANSMISSION LINES.

Section 4 of the Rural Electrification Act of 1936 (7 U.S.C.
904) is amended—
(1) in the first sentence—
(A) by striking ‘‘for the furnishing of’’ and all that
follows through ‘‘central station service and’’; and
(B) by striking ‘‘the provisions of sections 3(d) and
3(e) but without regard to the 25 per centum limitation
therein contained,’’ and inserting ‘‘section 3,’’;

110 STAT. 1150

PUBLIC LAW 104–127—APR. 4, 1996
(2) in the second sentence, by striking ‘‘: Provided further,
That all’’ and all that follows through ‘‘loan: And provided
further, That’’ and inserting ‘‘, except that’’; and
(3) in the third sentence, by striking ‘‘and section 5’’.

SEC. 774. LOANS FOR ELECTRICAL AND PLUMBING EQUIPMENT.

(a) IN GENERAL.—Section 5 of the Rural Electrification Act
of 1936 (7 U.S.C. 905) is repealed.
(b) CONFORMING AMENDMENTS.—Section 12(a) of the Rural
Electrification Act of 1936 (7 U.S.C. 912(a)) is amended—
(1) by striking ‘‘: Provided, however, That’’ and inserting
‘‘, except that,’’; and
(2) by striking ‘‘, and with respect to any loan made under
section 5,’’ and all that follows through ‘‘section 3’’.
SEC. 775. TESTIMONY ON BUDGET REQUESTS.

Section 6 of the Rural Electrification Act of 1936 (7 U.S.C.
906) is amended by striking the second sentence.
SEC. 776. TRANSFER OF FUNCTIONS OF ADMINISTRATION CREATED
BY EXECUTIVE ORDER.

Section 8 of the Rural Electrification Act of 1936 (7 U.S.C.
908) is repealed.
SEC. 777. ANNUAL REPORT.

Section 10 of the Rural Electrification Act of 1936 (7 U.S.C.
910) is repealed.
SEC. 778. PROHIBITION ON RESTRICTING WATER AND WASTE FACILITY
SERVICES TO ELECTRIC CUSTOMERS.

The Rural Electrification Act of 1936 is amended by inserting
after section 16 (7 U.S.C. 916) the following:
7 USC 917.

Regulations.

‘‘SEC. 17. PROHIBITION ON RESTRICTING WATER AND WASTE FACILITY
SERVICES TO ELECTRIC CUSTOMERS.

‘‘(a) PROHIBITION.—Assistance under any rural development
program administered by the Secretary or any agency of the Department of Agriculture shall not be conditioned on any requirement
that the recipient of the assistance accept or receive electric service
from any particular utility, supplier, or cooperative.
‘‘(b) ENSURING COMPLIANCE.—The Secretary shall establish, by
regulation, adequate safeguards to ensure that assistance under
any rural development program is not subject to such a condition.
The safeguards shall include periodic certifications and audits, and
appropriate measures and sanctions against any person violating,
or attempting to violate subsection (a).
‘‘(c) DEFINITION OF RURAL DEVELOPMENT PROGRAMS.—In this
section, the term ‘rural development program’ means the following:
‘‘(1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and
375 and subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926, 1926a, 1926c, 1926d, and
1932).
‘‘(2) Subtitle G of title XVI and sections 2281, 2333, and
2381 of the Food, Agriculture, Conservation, and Trade Act
of 1990 (7 U.S.C. 5901–5908, 5177a, 950aaa–2, and 3125b).
‘‘(3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102–
237; 7 U.S.C. 5930 note).

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1151

‘‘(4) Section 1323(b) of the Food Security Act of 1985 (Public
Law 99–198; 7 U.S.C. 1932 note).
‘‘(5) Title V and section 603(c) of the Rural Development
Act of 1972 (7 U.S.C. 2661–2669 and 2204a(c)).
‘‘(6) Sections 5 and 311 and title IV of this Act (7 U.S.C.
905, 940a, and 941–950b).
‘‘(d) REGULATIONS.—Not later than 60 days after the date of
enactment of the Federal Agriculture Improvement and Reform
Act of 1996, the Secretary shall issue final regulations to ensure
compliance with subsection (a).’’.
SEC. 779. TELEPHONE LOAN TERMS AND CONDITIONS.

Section 309 of the Rural Electrification Act of 1936 (7 U.S.C.
939) is amended—
(1) in subsection (a), by striking ‘‘(a) IN GENERAL.—’’; and
(2) by striking subsection (b).
SEC. 780. PRIVATIZATION PROGRAM.

Section 311 of the Rural Electrification Act of 1936 (7 U.S.C.
940a) is repealed.
SEC. 781. RURAL BUSINESS INCUBATOR FUND.

(a) IN GENERAL.—Section 502 of the Rural Electrification Act
of 1936 (7 U.S.C. 950aa–1) is repealed.
(b) CONFORMING AMENDMENTS.—Section 501 of the Rural Electrification Act of 1936 (7 U.S.C. 950aa) is amended—
(1) in paragraph (5), by inserting ‘‘and’’ at the end;
(2) in paragraph (6), by striking ‘‘; and’’ at the end and
inserting a period; and
(3) by striking paragraph (7).

Subtitle D—Miscellaneous Rural
Development Provisions
SEC. 791. INTEREST RATE FORMULA.

(a) BANKHEAD-JONES FARM TENANT ACT.—Section 32(e) of the
Bankhead-Jones Farm Tenant Act (7 U.S.C. 1011) is amended
by striking the fifth sentence and inserting the following: ‘‘A loan
under this subsection shall be made under a contract that provides,
under such terms and conditions as the Secretary considers appropriate, for the repayment of the loan in not more than 30 years,
with interest at a rate not to exceed the current market yield
for outstanding municipal obligations with remaining periods to
maturity comparable to the average maturity for the loan, adjusted
to the nearest 1⁄8 of 1 percent.’’.
(b) WATERSHED PROTECTION AND FLOOD PREVENTION ACT.—
Section 8 of the Watershed Protection and Flood Prevention Act
(16 U.S.C. 1006a) is amended by striking the second sentence
and inserting the following: ‘‘A loan or advance under this section
shall be made under a contract or agreement that provides, under
such terms and conditions as the Secretary considers appropriate,
for the repayment of the loan or advance in not more than 50
years from the date when the principal benefits of the works of
improvement first become available, with interest at a rate not
to exceed the current market yield for outstanding municipal obliga-

110 STAT. 1152

PUBLIC LAW 104–127—APR. 4, 1996

tions with remaining periods to maturity comparable to the average
maturity for the loan, adjusted to the nearest 1⁄8 of 1 percent.’’.
SEC. 792. GRANTS FOR FINANCIALLY STRESSED FARMERS, DISLOCATED FARMERS, AND RURAL FAMILIES.

(a) IN GENERAL.—Section 502 of the Rural Development Act
of 1972 (7 U.S.C. 2662) is amended by striking subsection (f).
(b) CONFORMING AMENDMENTS.—
(1) Section 2389 of the Food, Agriculture, Conservation,
and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 2662
note) is amended by striking subsection (d).
(2) Section 503(c) of the Rural Development Act of 1972
(7 U.S.C. 2663(c)) is amended—
(A) in paragraph (1)—
(i) by striking ‘‘(1)’’;
(ii) by striking ‘‘section 502(e)’’ and all that follows
through ‘‘shall be distributed’’ and inserting ‘‘subsections (e), (h), and (i) of section 502 shall be distributed’’; and
(iii) by striking ‘‘objectives of’’ and all that follows
through ‘‘title’’ and inserting ‘‘objectives of subsections
(e), (h), and (i) of section 502’’; and
(B) by striking paragraph (2).
7 USC 2204f.

SEC. 793. FUND FOR RURAL AMERICA.

(a) IN GENERAL.—There is established in the Treasury of the
United States an account to be known as the Fund for Rural
America (referred to in this section as the ‘‘Account’’) to provide
funds for activities described in subsection (c).
(b) FUNDING.—
(1) IN GENERAL.—On January 1, 1997, October 1, 1998,
and October 1, 1999, out of any funds in the Treasury not
otherwise appropriated, the Secretary of the Treasury shall
transfer $100,000,000 to the Account.
(2) ENTITLEMENT.— The Secretary of Agriculture (referred
to in this section as the ‘‘Secretary’’)—
(A) shall be entitled to receive the funds transferred
to the Account under paragraph (1);
(B) shall accept the funds; and
(C) shall use the funds to carry out this section.
(3) PURPOSES.—Subject to subsection (d), of the amounts
transferred to the Account for a fiscal year, the Secretary
shall make available—
(A) for activities described in subsection (c)(1), not less
than 1⁄3 and not more than 2⁄3 of the funds in the Account;
and
(B) for activities described in subsection (c)(2), all funds
in the Account not made available by the Secretary for
activities described in subsection (c)(1).
(c) ACTIVITIES.—
(1) RURAL DEVELOPMENT.—
(A) IN GENERAL.—The Secretary may use the funds
in the Account for a rural development activity—
(i) authorized under the Housing Act of 1949 for—
(I) direct loans to low-income borrowers under
section 502 (42 U.S.C. 1472);

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1153

(II) loans for financial assistance for housing
for domestic farm laborers under section 514 (42
U.S.C. 1484);
(III) financial assistance for housing for
domestic farm laborers under section 516 (42
U.S.C. 1486);
(IV) payments for elderly who are not now
receiving rental assistance under section 521 (42
U.S.C. 1490a);
(V) grants and contracts for mutual and selfhelp housing under section 523(b)(1)(A) (42 U.S.C.
1490c(b)(1)(A)); or
(VI) grants for rural housing preservation
under section 533 (42 U.S.C. 1490m); or
(ii) conducted under any rural development program, including a program authorized under—
(I) the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.);
(II) subtitle G of title XVI and title XXIII
of the Food, Agriculture, Conservation, and Trade
Act of 1990;
(III) title V of the Rural Development Act of
1971 (7 U.S.C. 2661 et seq.); or
(IV) section 1323(b) of the Food Security Act
of 1985 (Public Law 99–198; 7 U.S.C. 1932 note).
(B) LIMITATION ON PROGRAMS FUNDED.—The Secretary
may not expend funds made available to carry out activities
described in subparagraph (A) for any activity that did
not receive appropriations for fiscal year 1995. Funds
expended under this section for any program purpose shall
be spent in accordance with and subject to the applicable
program limitations, restrictions, and priorities found in
the underlying program authority and this Act.
(C) LIMITATION ON HOUSING ASSISTANCE.—Not more
than 20 percent of the funds made available to carry out
activities described in subparagraph (A) shall be made
available to carry out activities described in subparagraph
(A)(i).
(D) DISCLOSURE OF ALLOCATION.—For any fiscal year,
the Secretary shall not disclose the allocation of funds
under this section for any activity described in subparagraph (A) until the date that is 1 day after the date
of enactment of legislation authorizing appropriations for
the Department of Agriculture for any period in the fiscal
year.
(2) RESEARCH.—
(A) IN GENERAL.—The Secretary may use the funds
in the Account for research, extension, and education grants
to—
(i) increase international competitiveness, efficiency, and farm profitability;
(ii) reduce economic and health risks;
(iii) conserve and enhance natural resources;
(iv) develop new crops, new crop uses, and new
agricultural applications of biotechnology;
(v) enhance animal agricultural resources;
(vi) preserve plant and animal germplasm;

110 STAT. 1154

PUBLIC LAW 104–127—APR. 4, 1996
(vii) increase economic opportunities in farming
and rural communities; and
(viii) expand locally-owned value-added processing.
(B) ELIGIBLE GRANTEE.—The Secretary may make a
grant under this paragraph to—
(i) a Federal research agency;
(ii) a national laboratory;
(iii) a college or university or a research foundation
maintained by a college or university; or
(iv) a private research organization with an established and demonstrated capacity to perform research
or technology transfer.
(C) USE OF GRANT.—
(i) IN GENERAL.—A grant made under this paragraph may be used by a grantee for 1 or more of
the following uses:
(I) Outcome-oriented research at the discovery
end of the spectrum to provide breakthrough
results.
(II) Exploratory and advanced development
and technology with well-identified outcomes.
(III) A national, regional, or multi-State program oriented primarily toward extension programs and education programs demonstrating and
supporting the competitiveness of United States
agriculture.
(ii) SMALLER INSTITUTIONS.—Of the amounts made
available for activities described in this paragraph,
not less than 15 percent shall be awarded to colleges,
universities, or research foundations eligible for a grant
under subparagraph (B)(iii) that rank in the lowest
1⁄3 of such colleges, universities, and foundations on
the basis of Federal research funds received under
a provision of law other than this section.
(D) ADMINISTRATION.—
(i) PRIORITY.—In administering this paragraph, the
Secretary shall—
(I) establish criteria for allocating grants based
on the priorities in subparagraph (A) and in consultation with the National Agricultural Research,
Extension, Education, and Economics Advisory
Board established under section 1408 of the
National Agricultural Research, Extension, and
Teaching Policy Act of 1977 (7 U.S.C. 3123);
(II) seek and accept proposals for grants;
(III) determine the relevance and merit of
proposals through a system of peer review and
review by the National Agricultural Research,
Extension, Education, and Economics Advisory
Board; and
(IV) award grants on the basis of merit, quality, and relevance to advancing the purposes of
federally supported agricultural research, extension, and education provided in section 1402 of
the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3101).

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1155

(ii) COMPETITIVE BASIS.—A grant under this paragraph shall be awarded on a competitive basis.
(iii) TERMS.—A grant under this paragraph shall
have a term that does not exceed 5 years.
(iv) MATCHING FUNDS.—As a condition of making
a grant under this paragraph, the Secretary shall
require the funding of the grant with equal matching
funds from a non-Federal source if the grant is—
(I) for applied research that is commodity-specific; and
(II) not of national scope.
(v) DELEGATION.—The Secretary shall administer
this section through the Cooperative State Research,
Education, and Extension Service of the Department
of Agriculture.
(vi) AVAILABILITY OF FUNDS.—Funds shall be available for obligation under this paragraph for a 2-year
period.
(vii) ADMINISTRATIVE COSTS.—The Secretary may
use not more than 4 percent of the funds made available for activities described in this paragraph for
administrative costs incurred by the Secretary in carrying out this paragraph.
(viii) BUILDINGS.—Funds made available for activities described in this paragraph shall not be used
for the construction of a new building or the acquisition, expansion, remodeling, or alteration of an existing
building (including site grading and improvement and
architect fees).
(d) LIMITATIONS.—Amounts in the Account may not be used
for an activity described in subsection (c) for a fiscal year if the
program funding level for the fiscal year for the activity is less
than 90 percent of the amount appropriated for the activity for
fiscal year 1996, adjusted for inflation.
SEC. 794. UNDER SECRETARY OF AGRICULTURE FOR RURAL ECONOMIC AND COMMUNITY DEVELOPMENT RENAMED THE
UNDER SECRETARY OF AGRICULTURE FOR RURAL
DEVELOPMENT.

(a) IN GENERAL.—Section 231 of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6941) is amended—
(1) in the section heading, by striking ‘‘ECONOMIC AND
COMMUNITY’’; and
(2) by striking ‘‘Economic and Community’’ each place such
term appears in subsections (a), (b), and (c).
(b) CONFORMING AMENDMENT.—Section 5314 of title 5, United
States Code, is amended by striking ‘‘Economic and Community’’.

110 STAT. 1156

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TITLE VIII—RESEARCH, EXTENSION,
AND EDUCATION
Subtitle A—Modification and Extension of
Activities Under 1977 Act
SEC. 801. PURPOSES OF AGRICULTURAL RESEARCH, EXTENSION, AND
EDUCATION.

Section 1402 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3101) is amended to
read as follows:
‘‘SEC. 1402. PURPOSES OF AGRICULTURAL RESEARCH, EXTENSION,
AND EDUCATION.

‘‘The purposes of federally supported agricultural research,
extension, and education are to—
‘‘(1) enhance the competitiveness of the United States agriculture and food industry in an increasingly competitive world
environment;
‘‘(2) increase the long-term productivity of the United States
agriculture and food industry while maintaining and enhancing
the natural resource base on which rural America and the
United States agricultural economy depend;
‘‘(3) develop new uses and new products for agricultural
commodities, such as alternative fuels, and develop new crops;
‘‘(4) support agricultural research and extension to promote
economic opportunity in rural communities and to meet the
increasing demand for information and technology transfer
throughout the United States agriculture industry;
‘‘(5) improve risk management in the United States agriculture industry;
‘‘(6) improve the safe production and processing of, and
adding of value to, United States food and fiber resources
using methods that maintain the balance between yield and
environmental soundness;
‘‘(7) support higher education in agriculture to give the
next generation of Americans the knowledge, technology, and
applications necessary to enhance the competitiveness of United
States agriculture; and
‘‘(8) maintain an adequate, nutritious, and safe supply of
food to meet human nutritional needs and requirements.’’.
SEC. 802. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMICS ADVISORY BOARD.

(a) IN GENERAL.—Section 1408 of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3123) is amended to read as follows:
‘‘SEC. 1408. NATIONAL AGRICULTURAL RESEARCH, EXTENSION, EDUCATION, AND ECONOMICS ADVISORY BOARD.

‘‘(a) ESTABLISHMENT.—The Secretary shall establish within the
Department of Agriculture a board to be known as the ‘National
Agricultural Research, Extension, Education, and Economics
Advisory Board’.
‘‘(b) MEMBERSHIP.—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1157

‘‘(1) IN GENERAL.—The Advisory Board shall consist of 30
members, appointed by the Secretary.
‘‘(2) SELECTION OF MEMBERS.—The Secretary shall appoint
members of the Advisory Board from nominations submitted
by organizations, associations, societies, councils, federations,
groups, and companies fitting the criteria specified in paragraph
(3).
‘‘(3) MEMBERSHIP CATEGORIES.—The Advisory Board shall
consist of members from each of the following categories:
‘‘(A) 1 member representing a national farm organization.
‘‘(B) 1 member representing farm cooperatives.
‘‘(C) 1 member actively engaged in the production of
a food animal commodity.
‘‘(D) 1 member actively engaged in the production of
a plant commodity.
‘‘(E) 1 member representing a national animal commodity organization.
‘‘(F) 1 member representing a national crop commodity
organization.
‘‘(G) 1 member representing a national aquaculture
association.
‘‘(H) 1 member representing a national food animal
science society.
‘‘(I) 1 member representing a national crop, soil, agronomy, horticulture, or weed science society.
‘‘(J) 1 member representing a national food science
organization.
‘‘(K) 1 member representing a national human health
association.
‘‘(L) 1 member representing a national nutritional
science society.
‘‘(M) 1 member representing the land-grant colleges
and universities eligible to receive funds under the Act
of July 2, 1862 (7 U.S.C. 301 et seq.).
‘‘(N) 1 member representing the land-grant colleges
and universities eligible to receive funds under the Act
of August 30, 1890 (7 U.S.C. 321 et seq.), including
Tuskegee University.
‘‘(O) 1 member representing the 1994 Institutions (as
defined in section 532 of the Equity in Educational LandGrant Status Act of 1994 (Public Law 103–382; 7 U.S.C.
301 note)).
‘‘(P) 1 member representing Hispanic-serving institutions.
‘‘(Q) 1 member representing the American Colleges
of Veterinary Medicine.
‘‘(R) 1 member representing that portion of the scientific community not closely associated with agriculture.
‘‘(S) 1 member engaged in the transportation of food
and agricultural products to domestic and foreign markets.
‘‘(T) 1 member representing food retailing and marketing interests.
‘‘(U) 1 member representing food and fiber processors.
‘‘(V) 1 member actively engaged in rural economic
development.

110 STAT. 1158

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(W) 1 member representing a national consumer
interest group.
‘‘(X) 1 member representing a national forestry group.
‘‘(Y) 1 member representing a national conservation
or natural resource group.
‘‘(Z) 1 member representing private sector organizations involved in international development.
‘‘(AA) 1 member representing an agency within the
Department of Agriculture that lacks research capabilities.
‘‘(BB) 1 member representing a research agency of
the Federal Government (other than the Department of
Agriculture).
‘‘(CC) 1 member representing a national social science
association.
‘‘(DD) 1 member representing national organizations
directly concerned with agricultural research, education,
and extension.
‘‘(4) EX OFFICIO MEMBERS.—The Secretary, the Under Secretary of Agriculture for Research, Education, and Economics,
the Administrator of the Agricultural Research Service, the
Administrator of the Cooperative State Research, Education,
and Extension Service, the Administrator of the Economic
Research Service, and the Administrator of the National Agricultural Statistics Service shall serve as ex officio members
of the Advisory Board.
‘‘(5) OFFICERS.—At the first meeting of the Advisory Board
each year, the members shall elect from among the members
of the Advisory Board a chairperson, vice chairperson, and
7 additional members to serve on the executive committee
established under paragraph (6).
‘‘(6) EXECUTIVE COMMITTEE.—The Advisory Board shall
establish an executive committee charged with the responsibility of working with the Secretary and officers and employees
of the Department of Agriculture to summarize and disseminate
the recommendations of the Advisory Board.
‘‘(c) DUTIES.—The Advisory Board shall—
‘‘(1) review and provide consultation to the Secretary and
land-grant colleges and universities on long-term and shortterm national policies and priorities, as set forth in section
1402, relating to agricultural research, extension, education,
and economics;
‘‘(2) evaluate the results and effectiveness of agricultural
research, extension, education, and economics with respect to
the policies and priorities;
‘‘(3) review and make recommendations to the Under Secretary of Agriculture for Research, Education, and Economics
on the research, extension, education, and economics portion
of the draft strategic plan required under section 306 of title
5, United States Code; and
‘‘(4) review the mechanisms of the Department of Agriculture for technology assessment (which should be conducted
by qualified professionals) for the purposes of—
‘‘(A) performance measurement and evaluation of the
implementation by the Secretary of the strategic plan
required under section 306 of title 5, United States Code;
‘‘(B) implementation of the national research policies
and priorities set forth in section 1402; and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1159

‘‘(C) the development of mechanisms for the assessment
of emerging public and private agricultural research and
technology transfer initiatives.
‘‘(d) CONSULTATION.—In carrying out this section, the Advisory
Board shall solicit opinions and recommendations from persons
who will benefit from and use federally funded agricultural
research, extension, education, and economics.
‘‘(e) APPOINTMENT.—A member of the Advisory Board shall
be appointed by the Secretary for a term of up to 3 years. The
members of the Advisory Board shall be appointed to serve staggered terms.
‘‘(f) FEDERAL ADVISORY COMMITTEE ACT.—The Advisory Board
shall be deemed to have filed a charter for the purpose of section
9(c) of the Federal Advisory Committee Act (5 U.S.C. App.).
‘‘(g) TERMINATION.—The Advisory Board shall remain in existence until September 30, 2002.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 1404(1) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103(1))
is amended by striking ‘‘National Agricultural Research and
Extension Users Advisory Board’’ and inserting ‘‘National Agricultural Research, Extension, Education, and Economics
Advisory Board’’.
(2) Section 1410(2) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3125(2))
is amended by striking ‘‘the recommendations of the Advisory
Board developed under section 1408(g),’’ and inserting ‘‘any
recommendations of the Advisory Board’’.
(3) The last sentence of section 4(a) of the Renewable
Resources Extension Act of 1978 (16 U.S.C. 1673(a)) is amended
by striking ‘‘National Agricultural Research and Extension
Users Advisory Board’’ and inserting ‘‘National Agricultural
Research, Extension, Education, and Economics Advisory
Board’’.
SEC. 803. FEDERAL ADVISORY COMMITTEE ACT EXEMPTION FOR FEDERAL-STATE COOPERATIVE PROGRAMS.

Section 1409A of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3124a) is amended
by adding at the end the following:
‘‘(e) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—
‘‘(1) PUBLIC MEETINGS.—All meetings of any entity
described in paragraph (3) shall be publicly announced in
advance and shall be open to the public. Detailed minutes
of meetings and other appropriate records of the activities
of such an entity shall be kept and made available to the
public on request.
‘‘(2) EXEMPTION.—The Federal Advisory Committee Act (5
U.S.C. App.) and title XVIII of this Act shall not apply to
any entity described in paragraph (3).
‘‘(3) ENTITIES DESCRIBED.—This subsection shall apply to
any committee, board, commission, panel, or task force, or
similar entity that—
‘‘(A) is created for the purpose of cooperative efforts
in agricultural research, extension, or teaching; and
‘‘(B) consists entirely of—
‘‘(i) full-time Federal employees; and

Records.

110 STAT. 1160

PUBLIC LAW 104–127—APR. 4, 1996
‘‘(ii) one or more individuals who are employed
by, or are officials of—
‘‘(I) a State cooperative institution or State
cooperative agency; or
‘‘(II) a public college or university or other
postsecondary institution.’’.

SEC.

804.

COORDINATION AND PLANNING OF AGRICULTURAL
RESEARCH, EXTENSION, AND EDUCATION.

The National Agricultural Research, Extension, and Teaching
Policy Act of 1977 is amended by inserting after section 1413
(7 U.S.C. 3128) the following:
7 USC 3129.

‘‘SEC. 1413A. ACCOUNTABILITY.

‘‘(a) REVIEW OF INFORMATION TECHNOLOGY SYSTEMS.—The Secretary shall conduct a comprehensive review of state-of-the-art
information technology systems that are available for use in developing the system required by subsection (b).
‘‘(b) MONITORING AND EVALUATION SYSTEM.—The Secretary
shall develop and carry out a system to monitor and evaluate
agricultural research and extension activities conducted or supported by the Department of Agriculture that will enable the Secretary to measure the impact and effectiveness of research, extension, and education programs according to priorities, goals, and
mandates established by law. In developing the system, the Secretary shall incorporate information transfer technologies to optimize public access to research information.
‘‘(c) CONSISTENCY WITH OTHER REQUIREMENTS.—The Secretary
shall develop and implement the system in a manner consistent
with the Government Performance and Results Act of 1993 (Public
Law 103–62; 107 Stat. 285) and amendments made by the Act.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated such sums as are necessary to carry out this
section.
7 USC 3129a.

‘‘SEC. 1413B. FEDERAL ADVISORY COMMITTEE ACT EXEMPTION FOR
COMPETITIVE RESEARCH, EXTENSION, AND EDUCATION
PROGRAMS.

‘‘The Federal Advisory Committee Act (5 U.S.C. App.) and
title XVIII of this Act shall not apply to any committee, board,
commission, panel, or task force, or similar entity, created solely
for the purpose of reviewing applications or proposals requesting
funding under any competitive research, extension, or education
program carried out by the Secretary.’’.
SEC. 805. GRANTS AND FELLOWSHIPS FOR FOOD AND AGRICULTURAL
SCIENCES EDUCATION.

(a) PURPOSE OF GRANTS.—Section 1417(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7
U.S.C. 3152(b)) is amended by striking paragraph (4) and inserting
the following:
‘‘(4) to design and implement food and agricultural programs to build teaching and research capacity at colleges and
universities having significant minority enrollments;’’.
(b) RESEARCH FOUNDATIONS.—Section 1417(c) of the National
Agricultural Research, Extension, and Teaching Policy Act of 1977
(7 U.S.C. 3152(c)) is amended by adding at the end the following:

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1161

‘‘(3) RESEARCH FOUNDATIONS.—An eligible college or university under subsection (b) includes a research foundation maintained by the college or university.’’.
(c) EXTENSION OF PROGRAM.—Section 1417(i) of the National
Agricultural Research, Extension, and Teaching Policy Act of 1977
(7 U.S.C. 3152(i)) is amended by striking ‘‘1995’’ and inserting
‘‘1997’’.
(d) SECONDARY EDUCATION AND 2-YEAR POSTSECONDARY EDUCATION TEACHING PROGRAMS.—Section 1417 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7
U.S.C. 3152) is amended—
(1) by redesignating subsections (h) and (i) as subsections
(i) and (j), respectively; and
(2) by inserting after subsection (g) the following:
‘‘(h) SECONDARY EDUCATION AND 2-YEAR POSTSECONDARY EDUCATION TEACHING PROGRAMS.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) INSTITUTION OF HIGHER EDUCATION.—The term
‘institution of higher education’ has the meaning given
the term in section 1201(a) of the Higher Education Act
of 1965 (20 U.S.C. 1141(a)).
‘‘(B) SECONDARY SCHOOL.—The term ‘secondary school’
has the meaning given the term in section 14101(25) of
the Elementary and Secondary Education Act of 1965 (20
U.S.C. 8801(25)).
‘‘(2) AGRISCIENCE AND AGRIBUSINESS EDUCATION.—The Secretary shall—
‘‘(A) promote and strengthen secondary education and
2-year postsecondary education in agriscience and agribusiness in order to help ensure the existence in the United
States of a qualified workforce to serve the food and agricultural sciences system; and
‘‘(B) promote complementary and synergistic linkages
among secondary, 2-year postsecondary, and higher education programs in the food and agricultural sciences in
order to promote excellence in education and encourage
more young Americans to pursue and complete a baccalaureate or higher degree in the food and agricultural
sciences.
‘‘(3) GRANTS.—The Secretary may make competitive or noncompetitive grants, for grant periods not to exceed 5 years,
to public secondary schools, and institutions of higher education
that award an associate’s degree, that the Secretary determines
have made a commitment to teaching agriscience and agribusiness—
‘‘(A) to enhance curricula in agricultural education;
‘‘(B) to increase faculty teaching competencies;
‘‘(C) to interest young people in pursuing higher education in order to prepare for scientific and professional
careers in the food and agricultural sciences;
‘‘(D) to promote the incorporation of agriscience and
agribusiness subject matter into other instructional programs, particularly classes in science, business, and
consumer education;
‘‘(E) to facilitate joint initiatives by the grant recipient
with other secondary schools, institutions of higher education that award an associate’s degree, and institutions

110 STAT. 1162

PUBLIC LAW 104–127—APR. 4, 1996
of higher education that award a bachelor’s degree to maximize the development and use of resources, such as faculty,
facilities, and equipment, to improve agriscience and agribusiness education; and
‘‘(F) to support other initiatives designed to meet local,
State, regional, or national needs related to promoting
excellence in agriscience and agribusiness education.’’.

SEC. 806. GRANTS FOR RESEARCH ON THE PRODUCTION AND MARKETING OF ALCOHOLS AND INDUSTRIAL HYDROCARBONS
FROM AGRICULTURAL COMMODITIES AND FOREST
PRODUCTS.

Section 1419(d) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3154(d)) is amended
by striking ‘‘1995’’ and inserting ‘‘1997’’.
SEC. 807. POLICY RESEARCH CENTERS.

The National Agricultural Research, Extension, and Teaching
Policy Act of 1977 is amended by inserting after section 1419
(7 U.S.C. 3154) the following:
7 USC 3155.

‘‘SEC. 1419A. POLICY RESEARCH CENTERS.

‘‘(a) IN GENERAL.—Consistent with this section, the Secretary
may make grants, competitive grants, and special research grants
to, and enter into cooperative agreements and other contracting
instruments with, policy research centers described in subsection
(b) to conduct research and education programs that are objective,
operationally independent, and external to the Federal Government
and that concern the effect of public policies on—
‘‘(1) the farm and agricultural sectors;
‘‘(2) the environment;
‘‘(3) rural families, households, and economies; and
‘‘(4) consumers, food, and nutrition.
‘‘(b) ELIGIBLE RECIPIENTS.—State agricultural experiment stations, colleges and universities, other research institutions and
organizations, private organizations, corporations, and individuals
shall be eligible to apply for funding under subsection (a).
‘‘(c) ACTIVITIES.—Under this section, funding may be provided
for disciplinary and interdisciplinary research and education
concerning policy research activities consistent with this section,
including activities that—
‘‘(1) quantify the implications of public policies and regulations;
‘‘(2) develop theoretical and research methods;
‘‘(3) collect and analyze data for policymakers, analysts,
and individuals; and
‘‘(4) develop programs to train analysts.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated such sums as are necessary to carry out this
section for fiscal years 1996 and 1997.’’.
SEC. 808. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH PROGRAM.

The National Agricultural Research, Extension, and Teaching
Policy Act of 1977 is amended by striking section 1424 (7 U.S.C.
3174) and inserting the following:

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1163

‘‘SEC. 1424. HUMAN NUTRITION INTERVENTION AND HEALTH PROMOTION RESEARCH PROGRAM.

7 USC 3174.

‘‘(a) AUTHORITY OF SECRETARY.—The Secretary may establish,
and award grants for projects for, a multi-year research initiative
on human nutrition intervention and health promotion.
‘‘(b) EMPHASIS OF INITIATIVE.—In administering human nutrition research projects under this section, the Secretary shall give
specific emphasis to—
‘‘(1) coordinated longitudinal research assessments of nutritional status; and
‘‘(2) the implementation of unified, innovative intervention
strategies,
to identify and solve problems of nutritional inadequacy and contribute to the maintenance of health, well-being, performance, and
productivity of individuals, thereby reducing the need of the individuals to use the health care system and social programs of the
United States.
‘‘(c) ADMINISTRATION OF FUNDS.—The Administrator of the Agricultural Research Service shall administer funds made available
to carry out this section to ensure a coordinated approach to health
and nutrition research efforts.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated such sums as are necessary to carry out this
section for fiscal years 1996 and 1997.
‘‘SEC. 1424A. PILOT RESEARCH PROGRAM TO COMBINE MEDICAL AND
AGRICULTURAL RESEARCH.

‘‘(a) FINDINGS.—Congress finds the following:
‘‘(1) Although medical researchers in recent years have
demonstrated that there are several naturally occurring compounds in many vegetables and fruits that can aid in the
prevention of certain forms of cancer, coronary heart disease,
stroke, and atherosclerosis, there has been almost no research
conducted to enhance these compounds in food plants by modern breeding and molecular genetic methods.
‘‘(2) By linking the appropriate medical and agricultural
research scientists in a highly-focused, targeted research program, it should be possible to develop new varieties of vegetables and fruits that would provide greater prevention of dietrelated diseases that are a major cause of death in the United
States.
‘‘(b) PILOT RESEARCH PROGRAM.—The Secretary shall conduct,
through the Cooperative State Research, Education, and Extension
Service, a pilot research program to link major cancer and heart
and other circulatory disease research efforts with agricultural
research efforts to identify compounds in vegetables and fruits
that prevent these diseases. Using information derived from such
combined research efforts, the Secretary shall assist in the development of new varieties of vegetables and fruits having enhanced
therapeutic properties for disease prevention.
‘‘(c) AGREEMENTS.—The Secretary shall carry out the pilot program through agreements entered into with land-grant colleges
or universities, other universities, State agricultural experiment
stations, the State cooperative extension services, nonprofit
organizations with demonstrable expertise, or Federal or State
governmental entities. The Secretary shall enter into the agreements on a competitive basis.

7 USC 3174a.

110 STAT. 1164

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated $10,000,000 for fiscal year 1997 to carry out
the pilot program.’’.
SEC. 809. FOOD AND NUTRITION EDUCATION PROGRAM.

Section 1425(c)(3) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3175(c)(3)) is amended by striking ‘‘$63,000,000’’ and all that follows through ‘‘fiscal
year 1995’’ and inserting ‘‘, $83,000,000 for each of fiscal years
1996 and 1997’’.
SEC. 810. PURPOSES AND FINDINGS RELATING TO ANIMAL HEALTH
AND DISEASE RESEARCH.

Section 1429 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3191) is amended to
read as follows:
‘‘SEC. 1429. PURPOSES AND FINDINGS RELATING TO ANIMAL HEALTH
AND DISEASE RESEARCH.

‘‘(a) PURPOSES.—The purposes of this subtitle are to—
‘‘(1) promote the general welfare through the improved
health and productivity of domestic livestock, poultry, aquatic
animals, and other income-producing animals that are essential
to the food supply of the United States and the welfare of
producers and consumers of animal products;
‘‘(2) improve the health of horses;
‘‘(3) facilitate the effective treatment of, and, to the extent
possible, prevent animal and poultry diseases in both domesticated and wild animals that, if not controlled, would be disastrous to the United States livestock and poultry industries
and endanger the food supply of the United States;
‘‘(4) improve methods for the control of organisms and
residues in food products of animal origin that could endanger
the human food supply;
‘‘(5) improve the housing and management of animals to
improve the well-being of livestock production species;
‘‘(6) minimize livestock and poultry losses due to transportation and handling;
‘‘(7) protect human health through control of animal diseases transmissible to humans;
‘‘(8) improve methods of controlling the births of predators
and other animals; and
‘‘(9) otherwise promote the general welfare through
expanded programs of research and extension to improve animal health.
‘‘(b) FINDINGS.—Congress finds that—
‘‘(1) the total animal health and disease research and extension efforts of State colleges and universities and of the Federal
Government would be more effective if there were close
coordination between the efforts; and
‘‘(2) colleges and universities having accredited schools or
colleges of veterinary medicine and State agricultural experiment stations that conduct animal health and disease research
are especially vital in training research workers in animal
health and related disciplines.’’.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1165

SEC. 811. ANIMAL HEALTH AND DISEASE CONTINUING RESEARCH.

Section 1433 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3195) is amended—
(1) in the first sentence of subsection (a), by striking ‘‘1995’’
and inserting ‘‘1997’’;
(2) in subsection (b)(2)—
(A) by striking ‘‘domestic livestock and poultry’’ each
place it appears and inserting ‘‘domestic livestock, poultry,
and commercial aquaculture species’’; and
(B) in the second sentence, by striking ‘‘horses, and
poultry’’ and inserting ‘‘horses, poultry, and commercial
aquaculture species’’;
(3) in subsection (d), by striking ‘‘domestic livestock and
poultry’’ and inserting ‘‘domestic livestock, poultry, and
commercial aquaculture species’’; and
(4) in subsection (f), by striking ‘‘domestic livestock and
poultry’’ and inserting ‘‘domestic livestock, poultry, and
commercial aquaculture species’’.
SEC. 812. ANIMAL HEALTH AND DISEASE NATIONAL OR REGIONAL
RESEARCH.

Section 1434 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3196) is amended—
(1) in subsection (a)—
(A) by inserting ‘‘or national or regional problems relating to pre-harvest, on-farm food safety, or animal wellbeing,’’ after ‘‘problems,’’; and
(B) by striking ‘‘1995’’ and inserting ‘‘1997’’;
(2) in subsection (b), by striking ‘‘eligible institutions’’ and
inserting ‘‘State agricultural experiment stations, colleges and
universities, other research institutions and organizations, Federal agencies, private organizations or corporations, and
individuals’’;
(3) in subsection (c)—
(A) in the first sentence, by inserting ‘‘, food safety,
and animal well-being’’ after ‘‘animal health and disease’’;
and
(B) in the fourth sentence—
(i) by redesignating paragraphs (2) and (3) as paragraphs (4) and (5), respectively; and
(ii) by inserting after paragraph (1) the following:
‘‘(2) any food safety problem that has a significant preharvest (on-farm) component and is recognized as posing a
significant health hazard to the consuming public;
‘‘(3) issues of animal well-being related to production methods that will improve the housing and management of animals
to improve the well-being of livestock production species;’’;
(4) in the first sentence of subsection (d), by striking ‘‘to
eligible institutions’’; and
(5) by adding at the end the following:
‘‘(f) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—
The Federal Advisory Committee Act (5 U.S.C. App.) and title
XVIII of this Act shall not apply to a panel or board created
solely for the purpose of reviewing applications or proposals submitted under this subtitle.’’.

110 STAT. 1166

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 813. GRANT PROGRAM TO UPGRADE AGRICULTURAL AND FOOD
SCIENCES FACILITIES AT 1890 LAND-GRANT COLLEGES.

Section 1447(b) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3222b(b)) is amended
by striking ‘‘$8,000,000 for each of the fiscal years 1991 through
1995’’ and inserting ‘‘, $15,000,000 for each of fiscal years 1996
and 1997’’.
SEC. 814. NATIONAL RESEARCH AND TRAINING CENTENNIAL CENTERS.

Section 1448 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3222c) is amended—
(1) in subsection (a)(1), by inserting ‘‘, or fiscal years 1996
and 1997,’’ after ‘‘1995’’; and
(2) in subsection (f), by striking ‘‘1995’’ and inserting ‘‘1997’’.
SEC. 815. PROGRAMS FOR HISPANIC-SERVING INSTITUTIONS.

(a) IN GENERAL.—The National Agricultural Research, Extension, and Teaching Policy Act of 1977 is amended by inserting
after section 1448 (7 U.S.C. 3222c) the following:

‘‘Subtitle H—Programs for HispanicServing Institutions
7 USC 3241.

‘‘SEC. 1455. EDUCATION GRANTS PROGRAMS FOR HISPANIC-SERVING
INSTITUTIONS.

‘‘(a) GRANT AUTHORITY.—The Secretary may make competitive
grants (or grants without regard to any requirement for competition)
to Hispanic-serving institutions for the purpose of promoting and
strengthening the ability of Hispanic-serving institutions to carry
out education, applied research, and related community development programs.
‘‘(b) USE OF GRANT FUNDS.—Grants made under this section
shall be used—
‘‘(1) to support the activities of consortia of Hispanic-serving
institutions to enhance educational equity for underrepresented
students;
‘‘(2) to strengthen institutional educational capacities,
including libraries, curriculum, faculty, scientific instrumentation, instruction delivery systems, and student recruitment and
retention, in order to respond to identified State, regional,
national, or international educational needs in the food and
agricultural sciences;
‘‘(3) to attract and support undergraduate and graduate
students from underrepresented groups in order to prepare
them for careers related to the food, agricultural, and natural
resource systems of the United States, beginning with the
mentoring of students at the high school level and continuing
with the provision of financial support for students through
their attainment of a doctoral degree; and
‘‘(4) to facilitate cooperative initiatives between 2 or more
Hispanic-serving institutions, or between Hispanic-serving
institutions and units of State government or the private sector,
to maximize the development and use of resources, such as
faculty, facilities, and equipment, to improve food and agricultural sciences teaching programs.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1167

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to make grants under this section $20,000,000
for fiscal year 1997.’’.
(b) HISPANIC-SERVING INSTITUTION DEFINED.—Paragraph (9) of
section 1404 of the National Agricultural Research, Extension, and
Teaching Policy Act of 1977 (7 U.S.C. 3103) is amended to read
as follows:
‘‘(9) the term ‘Hispanic-serving institution’ has the meaning
given the term by section 316(b)(1) of the Higher Education
Act of 1965 (20 U.S.C. 1059c(b)(1));’’.
SEC. 816. INTERNATIONAL AGRICULTURAL RESEARCH AND EXTENSION.

Section 1458(a)(8) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3291(a)(8)) is
amended—
(1) by striking ‘‘establish’’ and inserting ‘‘continue’’; and
(2) by striking ‘‘to be’’.
SEC. 817. AUTHORIZATION OF APPROPRIATIONS FOR AGRICULTURAL
RESEARCH PROGRAMS.

Section 1463 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3311) is amended by
striking ‘‘1995’’ both places it appears and inserting ‘‘1997’’.
SEC. 818. AUTHORIZATION OF APPROPRIATIONS FOR EXTENSION EDUCATION.

Section 1464 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3312) is amended by
striking ‘‘fiscal year 1995’’ and inserting ‘‘each of fiscal years 1995
through 1997’’.
SEC. 819. SUPPLEMENTAL AND ALTERNATIVE CROPS RESEARCH.

(a) EXTENSION OF PROGRAM.—Section 1473D(a) of the National
Agricultural Research, Extension, and Teaching Policy Act of 1977
(7 U.S.C. 3319d(a)) is amended by striking ‘‘1995’’ and inserting
‘‘1997’’.
(b) ELIMINATION OF PILOT NATURE OF PROGRAM.—Section
1473D of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3319d) is amended—
(1) in subsection (a), by striking ‘‘and pilot’’;
(2) in subsection (c)(2)(B), by striking ‘‘at pilot sites’’ and
all that follows through ‘‘the area’’;
(3) in subsection (c)(2)(C), by striking ‘‘from pilot sites’’;
(4) in subsection (c)(2)(D)—
(A) by striking ‘‘near such pilot sites’’; and
(B) by striking ‘‘successful pilot program’’ and inserting
‘‘successful program’’; and
(5) in paragraph (3), by striking ‘‘pilot’’.
(c) ADDITIONAL AUTHORITY.—Section 1473D(c)(3) of the
National Agricultural Research, Extension, and Teaching Policy
Act of 1977 (7 U.S.C. 3319d(c)(3)) is amended—
(1) in subparagraph (C), by striking ‘‘and’’ at the end;
(2) in subparagraph (D), by striking the period at the
end and inserting a semicolon; and
(3) by adding at the end the following:
‘‘(E) to conduct fundamental and applied research related
to the development of new commercial products derived from

110 STAT. 1168

PUBLIC LAW 104–127—APR. 4, 1996
natural plant material for industrial, medical, and agricultural
applications; and
‘‘(F) to participate with colleges and universities, other
Federal agencies, and private sector entities in conducting
research described in subparagraph (E).’’.

SEC. 820. AQUACULTURE ASSISTANCE PROGRAMS.

(a) DEFINITION.—Section 1404(3) of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3103(3)) is amended by inserting ‘‘ornamental fish,’’ after ‘‘reptile,’’.
(b) REPORTS.—Section 1475 of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3322) is amended—
(1) by striking subsection (e); and
(2) by redesignating subsections (f) and (g) as subsections
(e) and (f), respectively.
(c) AUTHORIZATION OF APPROPRIATIONS FOR AQUACULTURE
RESEARCH FACILITIES.—Section 1476(b) of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3323(b)) is amended by striking ‘‘1995’’ and inserting ‘‘1997’’.
(d) AUTHORIZATION OF APPROPRIATIONS FOR RESEARCH AND
EXTENSION.—Section 1477 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3324) is
amended by striking ‘‘1995’’ and inserting ‘‘1997’’.
SEC. 821. AUTHORIZATION OF APPROPRIATIONS FOR RANGELAND
RESEARCH.

Section 1483(a) of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3336(a)) is amended
by striking ‘‘1995’’ and inserting ‘‘1997’’.

Subtitle B—Modification and Extension of
Activities Under 1990 Act
SEC. 831. WATER QUALITY RESEARCH, EDUCATION, AND COORDINATION.

Section 1481(d) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5501(d)) is amended by striking ‘‘1995’’
and inserting ‘‘1997’’.
SEC. 832. NATIONAL GENETICS RESOURCES PROGRAM.

(a) FUNCTIONS.—Section 1632(d) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5841(d)) is amended
by striking paragraph (4) and inserting the following:
‘‘(4) unless otherwise prohibited by law, have the right
to make available on request, without charge and without
regard to the country from which the request originates, the
genetic material that the program assembles;’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 1635(b) of the
Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C.
5844(b)) is amended by striking ‘‘1995’’ and inserting ‘‘1997’’.
SEC. 833. NATIONAL AGRICULTURAL WEATHER INFORMATION SYSTEM.

Section 1641(c) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5855(c)) is amended by striking ‘‘1995’’
and inserting ‘‘1997’’.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1169

SEC. 834. LIVESTOCK PRODUCT SAFETY AND INSPECTION PROGRAM.

Section 1670(e) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5923(e)) is amended by striking ‘‘1995’’
and inserting ‘‘1997’’.
SEC. 835. PLANT GENOME MAPPING PROGRAM.

Section 1671(g) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5924(g)) is amended by inserting
‘‘for fiscal years 1996 and 1997’’ after ‘‘appropriated’’.
SEC. 836. CERTAIN SPECIALIZED RESEARCH PROGRAMS.

Subsections (d)(4), (e)(4), and (i) of section 1672 of the Food,
Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925)
are each amended by striking ‘‘1995’’ and inserting ‘‘1997’’.
SEC. 837. AGRICULTURAL TELECOMMUNICATIONS PROGRAM.

Section 1673(h) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5926(h)) is amended by striking ‘‘1995’’
and inserting ‘‘1997’’.
SEC. 838. NATIONAL CENTERS FOR AGRICULTURAL PRODUCT QUALITY
RESEARCH.

(a) PURPOSES OF NATIONAL CENTERS.—Section 1675(a) of the
Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C.
5928(a)) is amended—
(1) by redesignating paragraphs (5) and (6) as paragraphs
(6) and (7), respectively; and
(2) by inserting after paragraph (4) the following:
‘‘(5) enhance agricultural competitiveness through product
quality research and technology implementation;’’.
(b) REGIONAL BASIS OF CENTERS.—Section 1675(b) of the Food,
Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5928(b))
is amended by striking paragraph (1) and inserting the following:
‘‘(1) REGIONAL BASIS.—The centers shall be regionally based
units that conduct a broad spectrum of research, development,
and education programs to enhance the competitiveness, quality, safety and wholesomeness of agricultural products.’’.
(c) PROGRAM PLAN AND REVIEW.—Section 1675(d) of the Food,
Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5928(b))
is amended—
(1) in paragraph (1), by striking the second sentence; and
(2) in paragraph (2), by striking ‘‘, but not less’’ and all
that follows through ‘‘the Secretary’’.
(d) AUTHORIZATION OF APPROPRIATIONS.—Section 1675(g)(1) of
the Food, Agriculture, Conservation, and Trade Act of 1990 (7
U.S.C. 5928(g)(1)) is amended by striking ‘‘1995’’ and inserting
‘‘1997’’.
SEC. 839. RED MEAT SAFETY RESEARCH CENTER.

Section 1676 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5929) is amended to read as follows:
‘‘SEC. 1676. RED MEAT SAFETY RESEARCH CENTER.

‘‘(a) ESTABLISHMENT OF CENTER.—The Secretary of Agriculture
shall award a grant, on a competitive basis, to a research facility
described in subsection (b) to establish a red meat safety research
center.

Grants.

110 STAT. 1170

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(b) ELIGIBLE RESEARCH FACILITY DESCRIBED.—A research facility eligible for a grant under subsection (a) is a research facility
that—
‘‘(1) is part of a land-grant college or university, or other
federally supported agricultural research facility, located in
close proximity to a livestock slaughter and processing facility;
and
‘‘(2) is staffed by professionals with a wide diversity of
scientific expertise covering all aspects of meat science.
‘‘(c) RESEARCH CONDUCTED.—The red meat safety research center established under subsection (a) shall carry out research related
to general food safety, including—
‘‘(1) the development of intervention strategies that reduce
microbiological contamination of carcass surfaces;
‘‘(2) research regarding microbiological mapping of carcass
surfaces; and
‘‘(3) the development of model hazard analysis and critical
control point plans.
‘‘(d) ADMINISTRATION OF FUNDS.—The Secretary of Agriculture
shall administer funds appropriated to carry out this section.
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated such sums as are necessary for fiscal year
1997 to carry out this section.’’.
SEC. 840. INDIAN RESERVATION EXTENSION AGENT PROGRAM.

Section 1677 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5930) is amended—
(1) by redesignating subsection (f) as subsection (g); and
(2) by inserting after subsection (e) the following:
‘‘(f) REDUCED REGULATORY BURDEN.—On a determination by
the Secretary of Agriculture that a program carried out under
this section has been satisfactorily administered for not less than
2 years, the Secretary shall implement a reduced reapplication
process for the continued operation of the program in order to
reduce regulatory burdens on participating university and tribal
entities.’’.
SEC. 841. ASSISTIVE TECHNOLOGY PROGRAM FOR FARMERS WITH
DISABILITIES.

Section 1680 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5933) is amended—
(1) in subsection (a)(6)(B), by striking ‘‘1996’’ and inserting
‘‘1997’’; and
(2) in subsection (b)(2), by striking ‘‘1996’’ and inserting
‘‘1997’’.
SEC. 842. NATIONAL RURAL INFORMATION CENTER CLEARINGHOUSE.

Section 2381(e) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 3125b(e)) is amended by striking
‘‘1995’’ and inserting ‘‘1997’’.
SEC. 843. GLOBAL CLIMATE CHANGE.

Section 2412 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 6710) is amended by striking ‘‘1996’’ and
inserting ‘‘1997’’.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1171

Subtitle C—Repeal of Certain Activities
and Authorities
SEC. 851. SUBCOMMITTEE ON FOOD, AGRICULTURAL, AND FORESTRY
RESEARCH.

Section 401(h) of the National Science and Technology Policy,
Organization, and Priorities Act of 1976 (42 U.S.C. 6651(h)) is
amended by striking the second through fifth sentences.
SEC. 852. JOINT COUNCIL ON FOOD AND AGRICULTURAL SCIENCES.

(a) REPEAL.—Section 1407 of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3122) is repealed.
(b) CONFORMING AMENDMENTS.—
(1) Section 1405 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3121)
is amended—
(A) in paragraph (5), by striking ‘‘Joint Council,
Advisory Board,’’ and inserting ‘‘Advisory Board’’; and
(B) in paragraph (11), by striking ‘‘the Joint Council,’’.
(2) Section 1410(2) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3125(2))
is amended by striking ‘‘the recommendations of the Joint
Council developed under section 1407(f),’’.
(3) Section 1412 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3127)
is amended—
(A) in the section heading, by striking ‘‘THE JOINT
COUNCIL, ADVISORY BOARD,’’ and inserting ‘‘ADVISORY
BOARD’’;
(B) in subsection (a)—
(i) by striking ‘‘Joint Council, the Advisory Board,’’
and inserting ‘‘Advisory Board’’;
(ii) by striking ‘‘the cochairpersons of the Joint
Council and’’ each place it appears; and
(iii) in paragraph (2), by striking ‘‘one shall serve
as the executive secretary to the Joint Council, one
shall serve as the executive secretary to the Advisory
Board,’’ and inserting ‘‘one shall serve as the executive
secretary to the Advisory Board’’; and
(C) in subsections (b) and (c), by striking ‘‘Joint Council,
Advisory Board,’’ each place it appears and inserting
‘‘Advisory Board’’.
(4) Section 1413 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3128)
is amended—
(A) in subsection (a), by striking ‘‘Joint Council, the
Advisory Board,’’ and inserting ‘‘Advisory Board’’; and
(B) in subsection (b), by striking ‘‘Joint Council,
Advisory Board,’’ and inserting ‘‘Advisory Board’’.
(5) Section 1434(c) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3196(c))
is amended—
(A) in the second sentence, by striking ‘‘Joint Council,
the Advisory Board,’’ and inserting ‘‘Advisory Board’’; and

110 STAT. 1172

PUBLIC LAW 104–127—APR. 4, 1996
(B) in the fourth sentence, by striking ‘‘the Joint Council,’’.

SEC. 853. AGRICULTURAL SCIENCE AND TECHNOLOGY REVIEW BOARD.

(a) REPEAL.—Section 1408A of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3123a) is repealed.
(b) CONFORMING AMENDMENTS.—
(1) Section 1404 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3103)
is amended—
(A) in paragraph (16)(F), by adding ‘‘and’’ at the end;
(B) in paragraph (17), by striking ‘‘; and’’ at the end
and inserting a period; and
(C) by striking paragraph (18).
(2) Section 1405(12) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3121(12))
is amended by striking ‘‘, after coordination with the Technology
Board,’’.
(3) Section 1410(2) of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3125(2))
(as amended by section 802(b)(2)) is amended by striking ‘‘and
the recommendations of the Technology Board developed under
section 1408A(d)’’.
(4) Section 1412 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3127)
(as amended by section 852(b)(3)) is amended—
(A) in the section heading, by striking ‘‘AND TECHNOLOGY BOARD’’;
(B) in subsection (a)—
(i) by striking ‘‘and the Technology Board’’ each
place it appears; and
(ii) in paragraph (2), by striking ‘‘and one shall
serve as the executive secretary to the Technology
Board’’; and
(C) in subsections (b) and (c), by striking ‘‘and Technology Board’’ each place it appears.
(5) Section 1413 of the National Agricultural Research,
Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3128)
(as amended by section 852(b)(4)) is amended—
(A) in subsection (a), by striking ‘‘or the Technology
Board’’; and
(B) in subsection (b), by striking ‘‘and the Technology
Board’’.
SEC. 854. ANIMAL HEALTH SCIENCE RESEARCH ADVISORY BOARD.

Section 1432 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3194) is repealed.
SEC. 855. RESIDENT INSTRUCTION PROGRAM AT 1890 LAND-GRANT
COLLEGES.

Section 1446 of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3222a) is repealed.
SEC. 856. GRANTS TO STATES FOR INTERNATIONAL TRADE DEVELOPMENT CENTERS.

Section 1458A of the National Agricultural Research, Extension,
and Teaching Policy Act of 1977 (7 U.S.C. 3292) is repealed.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1173

SEC. 857. RANGELAND RESEARCH.

(a) REPORTS.—Section 1481 of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3334) is repealed.
(b) ADVISORY BOARD.—Section 1482 of the National Agricultural
Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C.
3335) is repealed.
SEC. 858. COMPOSTING RESEARCH AND EXTENSION PROGRAM.

Section 1456 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 3130) is repealed.
SEC. 859. EDUCATION PROGRAM REGARDING HANDLING OF AGRICULTURAL CHEMICALS AND AGRICULTURAL CHEMICAL
CONTAINERS.

(a) REPEAL.—Section 1499A of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 3125c) is repealed.
(b) CONFORMING AMENDMENT.—Section 1499(b) of the Food,
Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5506(b))
is amended by striking ‘‘and section 1499A’’.
SEC. 860. PROGRAM ADMINISTRATION REGARDING SUSTAINABLE
AGRICULTURE RESEARCH AND EDUCATION.

(a) REPORTING REQUIREMENT.—Section 1622 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5812) is
amended by striking subsection (b).
(b) ADVISORY COUNCIL.—Section 1622 of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 5812) is amended—
(1) in subsection (a)—
(A) by striking paragraph (2);
(B) in paragraph (3), by striking ‘‘subsection (e)’’ and
inserting ‘‘subsection (b)’’; and
(C) by redesignating paragraphs (3) and (4) as paragraphs (2) and (3), respectively;
(2) by striking subsections (c) and (d);
(3) by redesignating subsection (e) as subsection (b); and
(4) in subsection (b)(2) (as so redesignated)—
(A) by striking subparagraph (A); and
(B) by redesignating subparagraphs (B) through (F)
as subparagraphs (A) through (E), respectively.
(c) CONFORMING AMENDMENTS.—
(1) Section 1619(b) of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5801(b)) is amended—
(A) by striking paragraph (7); and
(B) by redesignating paragraphs (8), (9), and (10) as
paragraphs (7), (8), and (9), respectively.
(2) Section 1621(c) of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5811(c)) is amended—
(A) in paragraph (1)—
(i) by striking subparagraph (A); and
(ii) by redesignating subparagraphs (B) through
(E) as subparagraphs (A) through (D), respectively;
and
(B) in paragraph (2)—
(i) by striking subparagraph (A); and
(ii) by redesignating subparagraphs (B) through
(F) as subparagraphs (A) through (E), respectively.

110 STAT. 1174

PUBLIC LAW 104–127—APR. 4, 1996
(3) Section 1628(b) of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5831(b)) is amended by striking
‘‘Advisory Council, the Soil Conservation Service,’’ and inserting
‘‘Natural Resources Conservation Service’’.

SEC.

861.

RESEARCH REGARDING PRODUCTION, PREPARATION,
PROCESSING, HANDLING, AND STORAGE OF AGRICULTURAL PRODUCTS.

Subtitle E of title XVI of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5871 et seq.) is repealed.
SEC. 862. PLANT AND ANIMAL PEST AND DISEASE CONTROL PROGRAM.

(a) REPEAL.—Subtitle F of title XVI of the Food, Agriculture,
Conservation, and Trade Act of 1990 (7 U.S.C. 5881 et seq.) is
repealed.
(b) CONFORMING AMENDMENTS.—
(1) Section 28(b)(2)(A) of the Federal Insecticide, Fungicide,
and Rodenticide Act (7 U.S.C. 136w–3(b)(2)(A)) is amended
by striking ‘‘and the information required by section 1651 of
the Food, Agriculture, Conservation, and Trade Act of 1990’’.
(2) Section 1627(a)(3) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5821(a)(3)) is amended
by striking ‘‘and section 1650’’.
(3) Section 1628 of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5831) is amended by striking
‘‘section 1650,’’ each place it appears in subsections (a) and
(d).
(4) Section 1629 of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5832) is amended by striking
‘‘section 1650,’’ each place it appears in subsections (f) and
(g)(11).
SEC. 863. CERTAIN SPECIALIZED RESEARCH PROGRAMS.

Section 1672 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5925) is amended—
(1) by striking subsections (a), (f), (g), (h), and (j); and
(2) by redesignating subsections (i) and (k) as subsections
(f) and (g), respectively.
SEC. 864. COMMISSION ON AGRICULTURAL RESEARCH FACILITIES.

Section 1674 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5927) is repealed.
SEC. 865. SPECIAL GRANT TO STUDY CONSTRAINTS ON AGRICULTURAL
TRADE.

Section 1678 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5931) is repealed.
SEC. 866. PILOT PROJECT TO COORDINATE FOOD AND NUTRITION
EDUCATION PROGRAMS.

Section 1679 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5932) is repealed.
SEC. 867. DEMONSTRATION AREAS FOR RURAL ECONOMIC DEVELOPMENT.

Section 2348 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 2662a) is repealed.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1175

SEC. 868. TECHNICAL ADVISORY COMMITTEE REGARDING GLOBAL CLIMATE CHANGE.

Section 2404 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 6703) is repealed.
SEC. 869. COMMITTEE OF NINE UNDER HATCH ACT OF 1887.

Section 3(c)3 of the Act of March 2, 1887 (commonly known
as the ‘‘Hatch Act of 1887’’; 7 U.S.C. 361c(c)3) is amended by
striking ‘‘, and shall be used’’ and all that follows through ‘‘by
this paragraph’’.
SEC. 870. COTTON CROP REPORTS.

The Act of May 3, 1924 (43 Stat. 115, chapter 149; 7 U.S.C.
475), is repealed.
SEC. 871. RURAL ECONOMIC AND BUSINESS DEVELOPMENT AND ADDITIONAL RESEARCH GRANTS UNDER TITLE V OF RURAL
DEVELOPMENT ACT OF 1972.

Section 502 of the Rural Development Act of 1972 (7 U.S.C.
2662) is amended by striking subsections (g) and (j).
SEC. 872. HUMAN NUTRITION RESEARCH.

Section 1452 of the National Agricultural Research, Extension,
and Teaching Policy Act Amendments of 1985 (Public Law 99–
198; 7 U.S.C. 3173 note) is repealed.
SEC. 873. GRANTS TO UPGRADE 1890 LAND-GRANT COLLEGE EXTENSION FACILITIES.

Section 1416 of the National Agricultural Research, Extension,
and Teaching Policy Act Amendments of 1981 (7 U.S.C. 3224)
is repealed.
SEC. 874. INDIAN SUBSISTENCE FARMING DEMONSTRATION GRANT
PROGRAM.

Subtitle C of title IX of the Food, Agriculture, Conservation,
and Trade Act Amendments of 1991 (Public Law 102–237; 7 U.S.C.
5930 note) is repealed.

Subtitle D—Miscellaneous Research
Provisions
SEC. 881. CRITICAL AGRICULTURAL MATERIALS RESEARCH.

(a) REPORTS.—Section 4 of the Critical Agricultural Materials
Act (7 U.S.C. 178b) is amended—
(1) by striking subsection (g); and
(2) by redesignating subsection (h) as subsection (g).
(b) AUTHORIZATION OF APPROPRIATIONS.—Section 16(a) of the
Critical Agricultural Materials Act (7 U.S.C. 178n(a)) is amended
by striking ‘‘1995’’ and inserting ‘‘1997’’.
SEC. 882. MEMORANDUM OF AGREEMENT REGARDING 1994 INSTITUTIONS.

Section 533 of the Equity in Educational Land-Grant Status
Act of 1994 (Public Law 103–382; 7 U.S.C. 301 note) is amended
by adding at the end the following:
‘‘(d) MEMORANDUM OF AGREEMENT.—Not later than January
6, 1997, the Secretary shall develop and implement a formal memo-

Native
Americans.

110 STAT. 1176

PUBLIC LAW 104–127—APR. 4, 1996

randum of agreement with the 1994 Institutions to establish programs to ensure that tribally controlled colleges and Native American communities equitably participate in Department of Agriculture employment, programs, services, and resources.’’.
SEC. 883. SMITH-LEVER ACT FUNDING FOR 1890 LAND-GRANT COLLEGES, INCLUDING TUSKEGEE UNIVERSITY.

(a) ELIGIBILITY FOR FUNDS.—Section 3(d) of the Act of May
8, 1914 (commonly known as the ‘‘Smith-Lever Act’’; 7 U.S.C.
343(d)), is amended by adding at the end the following: ‘‘A college
or university eligible to receive funds under the Act of August
30, 1890 (7 U.S.C. 321 et seq.), including Tuskegee University,
may apply for and receive directly from the Secretary of Agriculture—
‘‘(1) amounts made available under this subsection after
September 30, 1995, to carry out programs or initiatives for
which no funds were made available under this subsection
for fiscal year 1995, or any previous fiscal year, as determined
by the Secretary; and
‘‘(2) amounts made available after September 30, 1995,
to carry out programs or initiatives funded under this subsection prior to that date that are in excess of the highest
amount made available for the programs or initiatives under
this subsection for fiscal year 1995, or any previous fiscal
year, as determined by the Secretary.’’.
(b) CONFORMING AMENDMENT.—The third sentence of section
1444(a) of the National Agricultural Research, Extension, and
Teaching Policy Act of 1977 (7 U.S.C. 3221(a)) is amended by
inserting before the period at the end the following: ‘‘, except that
for the purpose of this calculation, the total appropriations shall
not include amounts made available after September 30, 1995,
under section 3(d) of that Act (7 U.S.C. 343(d)), to carry out programs or initiatives for which no funds were made available under
section 3(d) of that Act for fiscal year 1995, or any previous fiscal
year, as determined by the Secretary, and shall not include amounts
made available after September 30, 1995, to carry out programs
or initiatives funded under section 3(d) of that Act prior to that
date that are in excess of the highest amount made available
for the programs or initiatives for fiscal year 1995, or any previous
fiscal year, as determined by the Secretary’’.
SEC. 884. AGRICULTURAL RESEARCH FACILITIES.

(a) RESEARCH FACILITIES.—The Research Facilities Act (7
U.S.C. 390 et seq.) is amended to read as follows:
7 USC 390 note.

‘‘SECTION 1. SHORT TITLE.

7 USC 390.

‘‘SEC. 2. DEFINITIONS.

‘‘This Act may be cited as the ‘Research Facilities Act’.
‘‘In this Act:
‘‘(1) AGRICULTURAL RESEARCH FACILITY.—The term ‘agricultural research facility’ means a proposed facility for research
in food and agricultural sciences for which Federal funds are
requested by a college, university, or nonprofit institution to
assist in the construction, alteration, acquisition, modernization, renovation, or remodeling of the facility.
‘‘(2) CONGRESSIONAL AGRICULTURE COMMITTEES.—The term
‘congressional agriculture committees’ means the Committee

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1177

on Appropriations and the Committee on Agriculture of the
House of Representatives and the Committee on Appropriations
and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
‘‘(3) FOOD AND AGRICULTURAL SCIENCES.—The term ‘food
and agricultural sciences’ means—
‘‘(A) agriculture, including soil and water conservation
and use, the use of organic materials to improve soil tilth
and fertility, plant and animal production and protection,
and plant and animal health;
‘‘(B) the processing, distribution, marketing, and utilization of food and agricultural products;
‘‘(C) forestry, including range management, production
of forest and range products, multiple use of forests and
rangelands, and urban forestry;
‘‘(D) aquaculture (as defined in section 1404(3) of the
National Agricultural Research, Extension, and Teaching
Policy Act of 1977 (7 U.S.C. 3103(3));
‘‘(E) human nutrition;
‘‘(F) production inputs, such as energy, to improve
productivity; and
‘‘(G) germ plasm collection and preservation.
‘‘(4) SECRETARY.—The term ‘Secretary’ means the Secretary
of Agriculture.
‘‘(5) TASK FORCE.—The term ‘task force’ means the Strategic
Planning Task Force established under section 4.
‘‘SEC. 3. REVIEW PROCESS.

‘‘(a) SUBMISSION TO SECRETARY.—Each proposal for an agricultural research facility shall be submitted to the Secretary for review.
The Secretary shall review the proposals in the order in which
the proposals are received.
‘‘(b) APPLICATION PROCESS.—In consultation with the congressional agriculture committees, the Secretary shall establish an
application process for the submission of proposals for agricultural
research facilities.
‘‘(c) CRITERIA FOR APPROVAL.—
‘‘(1) DETERMINATION BY SECRETARY.—With respect to each
proposal for an agricultural research facility submitted under
subsection (a), the Secretary shall determine whether the proposal meets the criteria set forth in paragraph (2).
‘‘(2) CRITERIA.—A proposal for an agricultural research
facility shall meet the following criteria:
‘‘(A) NON-FEDERAL SHARE.—The proposal shall certify
the availability of at least a 50 percent non-Federal share
of the cost of the facility. The non-Federal share shall
be paid in cash and may include funding from private
sources or from units of State or local government.
‘‘(B) NONDUPLICATION OF FACILITIES.—The proposal
shall demonstrate how the agricultural research facility
would be complementary to, and not duplicative of, facilities
of colleges, universities, and nonprofit institutions, and
facilities of the Agricultural Research Service, within the
State and region.
‘‘(C) NATIONAL RESEARCH PRIORITIES.—The proposal
shall demonstrate how the agricultural research facility
would serve—

7 USC 390a.

110 STAT. 1178

Reports.
7 USC 390b.

Records.

PUBLIC LAW 104–127—APR. 4, 1996

‘‘(i) 1 or more of the national research policies
and priorities set forth in section 1402 of the National
Agricultural Research, Extension, and Teaching Policy
Act of 1977 (7 U.S.C. 3101); and
‘‘(ii) regional needs.
‘‘(D) LONG-TERM SUPPORT.—The proposal shall demonstrate that the recipient college, university, or nonprofit
institution has the ability and commitment to support the
long-term, ongoing operating costs of—
‘‘(i) the agricultural research facility after the facility is completed; and
‘‘(ii) each program to be based at the facility.
‘‘(d) EVALUATION OF PROPOSALS.—Not later than 90 days after
receiving a proposal under subsection (a), the Secretary shall—
‘‘(1) evaluate and assess the merits of the proposal, including the extent to which the proposal meets the criteria set
forth in subsection (c); and
‘‘(2) report to the congressional agriculture committees on
the results of the evaluation and assessment.
‘‘SEC. 4. TASK FORCE ON 10-YEAR STRATEGIC PLAN FOR AGRICULTURAL RESEARCH FACILITIES.

‘‘(a) ESTABLISHMENT.—Not later than 6 months after the date
of enactment of the Federal Agriculture Improvement and Reform
Act of 1996, the Secretary shall establish a task force, to be known
as the ‘Strategic Planning Task Force’. The task force shall be
comprised of 15 members.
‘‘(b) COMPOSITION.—The Secretary shall select the members
of the task force from a list of individuals recommended by the
Advisory Board established under section 1408 of the National
Agricultural Research, Extension, and Teaching Policy Act of 1977
(7 U.S.C. 3123). In submitting the list to the Secretary, the Board
may recommend for selection individuals (including members of
the Advisory Board) who have expertise in facilities development,
modernization, construction, consolidation, and closure.
‘‘(c) DUTIES.—The task force shall review all currently operating
agricultural research facilities constructed in whole or in part with
Federal funds, and all planned agricultural research facilities proposed to be constructed with Federal funds, pursuant to criteria
established by the Secretary, to ensure that a comprehensive
research capacity is maintained.
‘‘(d) 10-YEAR STRATEGIC PLAN.—Not later than 2 years after
the task force is established, the task force shall prepare and
submit to the Secretary and the congressional agriculture committees a 10-year strategic plan, reflecting both national and regional
perspectives, for development, modernization, construction, consolidation, and closure of Federal agricultural research facilities and
agricultural research facilities proposed to be constructed with Federal funds.
‘‘(e) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—
‘‘(1) PUBLIC MEETINGS.—All meetings of the task force shall
be publicly announced in advance and shall be open to the
public. Detailed minutes of meetings and other appropriate
records of the activities of the task force shall be kept and
made available to the public on request.
‘‘(2) EXEMPTION.—The Federal Advisory Committee Act (5
U.S.C. App.) and title XVIII of the Food and Agriculture Act

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1179

of 1977 (7 U.S.C. 2281 et seq.) shall not apply to the task
force.
‘‘(f) DEFINITION OF AGRICULTURAL RESEARCH FACILITY.—Notwithstanding section 2(1), in this section the term ‘agricultural
research facility’ means a facility for research in food and agricultural sciences.
‘‘SEC. 5. APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.

7 USC 390c.

‘‘The Federal Advisory Committee Act (5 U.S.C. App.) and
title XVIII of the Food and Agriculture Act of 1977 (7 U.S.C.
2281 et seq.) shall not apply to a panel or board created solely
for the purpose of reviewing applications or proposals submitted
under this Act.
‘‘SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

‘‘(a) IN GENERAL.—Subject to subsection (b), there are authorized to be appropriated such sums as are necessary for fiscal years
1996 and 1997 for the study, plan, design, structure, and related
costs of agricultural research facilities under this Act.
‘‘(b) ALLOWABLE ADMINISTRATIVE COSTS.—Not more than 3 percent of the funds made available for any project for an agricultural
research facility shall be available for administration of the project.’’.
(b) APPLICATION OF AMENDMENT.—The amendment made by
subsection (a), other than section 4 of the Research Facilities Act
(as amended by subsection (a)), shall not apply to any project
for an agricultural research facility for which funds have been
made available for a feasibility study or for any phase of the
project prior to October 1, 1995.
(c) AUTHORIZATION OF APPROPRIATIONS FOR FEDERAL FACILITIES.—Section 1431 of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1985 (Public Law
99–198; 99 Stat. 1556) is amended—
(1) in subsection (a)—
(A) by striking ‘‘(a)’’; and
(B) by striking ‘‘1995’’ and inserting ‘‘1997’’; and
(2) by striking subsection (b).
(d) CONFORMING AMENDMENT.—Section 1463(a) of the National
Agricultural Research, Extension, and Teaching Policy Act of 1977
(7 U.S.C. 3311(a)) is amended by striking ‘‘1416,’’.
SEC. 885. NATIONAL COMPETITIVE RESEARCH INITIATIVE.

(a) AUTHORIZATION OF APPROPRIATIONS FOR COMPETITIVE
GRANTS.—Subsection (b)(10) of the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)(10)) is amended—
(1) by striking ‘‘fiscal year 1995’’ and inserting ‘‘each of
fiscal years 1995 through 1997’’; and
(2) in subparagraph (B), by striking ‘‘20 percent’’ and inserting ‘‘40 percent’’.
(b) AVAILABILITY OF FUNDS.—Subsection (b) of the Competitive,
Special, and Facilities Research Grant Act (7 U.S.C. 450i(b)) is
amended by adding at the end the following:
‘‘(11) AVAILABILITY OF FUNDS.—Funds made available under
paragraph (10) shall be available for obligation for a 2-year period
beginning on October 1 of the fiscal year for which the funds
are made available.’’.

7 USC 390d.

7 USC 390 note.

110 STAT. 1180

PUBLIC LAW 104–127—APR. 4, 1996

SEC. 886. RURAL DEVELOPMENT RESEARCH AND EDUCATION.

Section 502(a) of the Rural Development Act of 1972 (7 U.S.C.
2662(a)) is amended by inserting after the first sentence the following: ‘‘The rural development extension programs shall also promote
coordinated and integrated rural community initiatives that
advance and empower capacity building through leadership development, entrepreneurship, business development and management
training, and strategic planning to increase jobs, income, and quality
of life in rural communities.’’.
SEC. 887. DAIRY GOAT RESEARCH PROGRAM.

Section 1432(b)(5) of the National Agricultural Research, Extension, and Teaching Policy Act Amendments of 1981 (Public Law
97–98; 7 U.S.C. 3222 note) is amended by striking ‘‘1995’’ and
inserting ‘‘1997’’.
SEC. 888. COMPETITIVE GRANTS FOR RESEARCH TO ERADICATE AND
CONTROL BROWN CITRUS APHID AND CITRUS TRISTEZA
VIRUS.

Section 1672 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5925) (as amended by section 863) is amended
by inserting before subsection (b) the following:
‘‘(a) BROWN CITRUS APHID AND CITRUS TRISTEZA VIRUS.—
‘‘(1) RESEARCH GRANTS AUTHORIZED.—The Secretary of
Agriculture may make competitive grants available to support
research for the purpose of—
‘‘(A) developing methods to eradicate the brown citrus
aphid and the citrus tristeza virus from citrus crops grown
in the United States; or
‘‘(B) adapting citrus crops grown in the United States
to the brown citrus aphid and the citrus tristeza virus.
‘‘(2) METHOD OF PROVIDING GRANTS.—Grants authorized
under this subsection shall be made in the same manner,
and shall be subject to the same conditions, as provided for
competitive grants under the Competitive, Special, and Facilities Research Grant Act (7 U.S.C. 450i).
‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—There are
authorized to be appropriated to carry out this subsection
$3,000,000 for fiscal year 1997.’’.
Arkansas.

SEC. 889. STUTTGART NATIONAL AQUACULTURE RESEARCH CENTER.

(a) TRANSFER OF FUNCTIONS TO SECRETARY OF AGRICULTURE.—
(1) PURPOSE.—The first section of Public Law 85–342 (16
U.S.C. 778) is amended—
(A) by striking ‘‘Secretary of the Interior’’ and all that
follows through ‘‘directed to’’ and inserting ‘‘Secretary of
Agriculture shall’’;
(B) by striking ‘‘an experiment station or stations’’
and inserting ‘‘1 or more centers’’; and
(C) in paragraph (5), by striking ‘‘Department of Agriculture’’ and inserting ‘‘Secretary of the Interior’’.
(2) AUTHORITY.—Section 2 of Public Law 85–342 (16 U.S.C.
778a) is amended by striking ‘‘, the Secretary’’ and all that
follows through ‘‘authorized’’ and inserting ‘‘, the Secretary
of Agriculture is authorized’’.
(3) ASSISTANCE.—Section 3 of Public Law 85–342 (16 U.S.C.
778b) is amended—

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1181

(A) by striking ‘‘Secretary of the Interior’’ and inserting
‘‘Secretary of Agriculture’’; and
(B) by striking ‘‘Department of Agriculture’’ and inserting ‘‘Secretary of the Interior’’.
(b) TRANSFER OF FISH FARMING EXPERIMENTAL LABORATORY
TO DEPARTMENT OF AGRICULTURE.—
(1) DESIGNATION OF STUTTGART NATIONAL AQUACULTURE
RESEARCH CENTER.—
(A) IN GENERAL.—The Fish Farming Experimental
Laboratory in Stuttgart, Arkansas (including the facilities
in Kelso, Arkansas), shall be known and designated as
the ‘‘Stuttgart National Aquaculture Research Center’’.
(B) REFERENCES.—Any reference in a law, map, regulation, document, paper, or other record of the United States
to the laboratory referred to in subparagraph (A) shall
be deemed to be a reference to the ‘‘Stuttgart National
Aquaculture Research Center’’.
(2) TRANSFER OF LABORATORY TO DEPARTMENT OF AGRICULTURE.—Subject to section 1531 of title 31, United States
Code, not later than 90 days after the date of enactment of
this Act, there are transferred to the Department of Agriculture—
(A) the personnel employed in connection with the
laboratory referred to in paragraph (1)(A);
(B) the assets, liabilities, contracts, and real and personal property of the laboratory;
(C) the records of the laboratory; and
(D) the unexpended balance of appropriations,
authorizations, allocations, and other funds employed in
connection with, held in connection with, arising from,
available to, or to be made available in connection with
the laboratory.
(3) NONDUPLICATION OF FACILITIES.—The research center
referred to in paragraph (1)(A) shall be complementary to,
and not duplicative of, facilities of colleges, universities, and
nonprofit institutions, and facilities of the Agricultural Research
Service, within the State and region, as determined by the
Administrator of the Service.
SEC. 890. EXPANSION OF AUTHORITIES RELATED TO NATIONAL
ARBORETUM.

(a) SOLICITATION OF GIFTS, BENEFITS, AND DEVISES.—The first
sentence of section 5 of the Act of March 4, 1927 (20 U.S.C. 195),
is amended by inserting ‘‘solicit,’’ after ‘‘authorized to’’.
(b) CONCESSIONS, FEES, AND VOLUNTARY SERVICES.—The Act
of March 4, 1927 (20 U.S.C. 191 et seq.), is amended by adding
at the end the following:
‘‘SEC. 6. CONCESSIONS, FEES, AND VOLUNTARY SERVICES.

‘‘(a) IN GENERAL.—Notwithstanding the Federal Property and
Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) and
section 321 of the Act of June 30, 1932 (40 U.S.C. 303b), the
Secretary of Agriculture, in furtherance of the mission of the
National Arboretum, may—
‘‘(1) negotiate agreements granting concessions at the
National Arboretum to nonprofit scientific or educational
organizations the interests of which are complementary to the
mission of the National Arboretum, except that the net proceeds

20 USC 196.

110 STAT. 1182

PUBLIC LAW 104–127—APR. 4, 1996

of the organizations from the concessions shall be used exclusively for research and educational work for the benefit of
the National Arboretum;
‘‘(2) provide by concession, on such terms as the Secretary
of Agriculture considers appropriate and necessary, for commercial services for food, drink, and nursery sales, if an agreement
for a permanent concession under this paragraph is negotiated
with a qualified person submitting a proposal after due consideration of all proposals received after the Secretary of Agriculture provides reasonable public notice of the intent of the
Secretary to enter into such an agreement;
‘‘(3) dispose of excess property, including excess plants and
fish, in a manner designed to maximize revenue from any
sale of the property, including by way of public auction, except
that this paragraph shall not apply to the free dissemination
of new varieties of seeds and germ plasm in accordance with
section 520 of the Revised Statutes (commonly known as the
‘Department of Agriculture Organic Act of 1862’) (7 U.S.C.
2201);
‘‘(4) charge such fees as the Secretary of Agriculture considers reasonable for temporary use by individuals or groups of
National Arboretum facilities and grounds for any purpose
consistent with the mission of the National Arboretum;
‘‘(5) charge such fees as the Secretary of Agriculture considers reasonable for the use of the National Arboretum for
commercial photography or cinematography;
‘‘(6) publish, in print and electronically and without regard
to laws relating to printing by the Federal Government,
informational brochures, books, and other publications concerning the National Arboretum or the collections of the Arboretum;
and
‘‘(7) license use of the National Arboretum name and logo
for public service or commercial uses.
‘‘(b) USE OF FUNDS.—Any funds received or collected by the
Secretary of Agriculture as a result of activities described in subsection (a) shall be retained in a special fund in the Treasury
for the use and benefit of the National Arboretum as the Secretary
of Agriculture considers appropriate.
‘‘(c) ACCEPTANCE OF VOLUNTARY SERVICES.—The Secretary of
Agriculture may accept the voluntary services of organizations
described in subsection (a)(1), and the voluntary services of individuals (including employees of the National Arboretum), for the benefit of the National Arboretum.’’.
Alabama.

SEC. 891. TRANSFER OF AQUACULTURAL RESEARCH CENTER.
OF

(a) TRANSFER OF FISH CULTURE LABORATORY TO DEPARTMENT
AGRICULTURE.—
(1)
DESIGNATION
OF
CLAUDE
HARRIS
NATIONAL
AQUACULTURAL RESEARCH CENTER.—
(A) IN GENERAL.—The Southeastern Fish Culture Laboratory in Marion, Alabama, shall be known and designated
as the ‘‘Claude Harris National Aquacultural Research Center’’.
(B) REFERENCES.—Any reference in a law, map, regulation, document, paper, or other record of the United States
to the laboratory referred to in subparagraph (A) shall

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1183

be deemed to be a reference to the ‘‘Claude Harris National
Aquacultural Research Center’’.
(2) TRANSFER OF LABORATORY TO DEPARTMENT OF AGRICULTURE.—Subject to section 1531 of title 31, United States
Code, not later than 90 days after the date of enactment of
this Act, the Secretary of the Interior may transfer, in whole
or in part, to the Department of Agriculture, with the consent
of the Secretary of Agriculture—
(A) the personnel employed in connection with the
laboratory referred to in paragraph (1);
(B) the assets, liabilities, contracts, and real and personal property of the laboratory;
(C) the records of the laboratory; and
(D) the unexpended balance of appropriations,
authorizations, allocations, and other funds employed in
connection with, held in connection with, arising from,
available to, or to be made available in connection with
the laboratory.
(b) NONDUPLICATION OF FACILITIES.—The research center designated by subsection (a) shall be complementary to, and not
duplicative of, facilities of colleges, universities, and nonprofit
institutions, and facilities of the Agricultural Research Service,
within the State and region, as determined by the Secretary of
Agriculture.
SEC. 892. USE OF REMOTE SENSING DATA AND OTHER DATA TO ANTICIPATE POTENTIAL FOOD, FEED, AND FIBER SHORTAGES
OR EXCESSES AND TO PROVIDE TIMELY INFORMATION
TO ASSIST FARMERS WITH PLANTING DECISIONS.

(a) FINDINGS.—Congress finds that—
(1) remote sensing data can be useful to predict impending
famine problems and forest infestations in time to allow
remedial action;
(2) remote sensing data can inform the agricultural community as to the condition of crops and the land that sustains
those crops; and
(3) remote sensing data and other data can be valuable,
when received on a timely basis, in determining the need for
additional plantings of a particular crop or a substitute crop.
(b) INFORMATION DEVELOPMENT.—The Secretary of Agriculture
and the Administrator of the National Aeronautics and Space
Administration, maximizing private funding and involvement, shall
provide farmers and other interested persons with timely information, through remote sensing, on crop conditions, fertilization and
irrigation needs, pest infiltration, soil conditions, projected food,
feed, and fiber production, and any other information available
through remote sensing.
(c) COORDINATION.—The Secretary of Agriculture and the
Administrator of the National Aeronautics and Space Administration shall jointly develop a proposal to provide farmers and other
prospective users with supply and demand information for food
and fibers.
(d) SUNSET.—The authorities provided by this section shall
expire 5 years after the date of enactment of this Act.
SEC. 893. SENSE OF SENATE REGARDING METHYL BROMIDE ALTERNATIVE RESEARCH AND EXTENSION ACTIVITIES.

It is the sense of the Senate that—

7 USC 5935.

110 STAT. 1184

PUBLIC LAW 104–127—APR. 4, 1996
(1) the Department of Agriculture should continue to make
methyl bromide alternative research and extension activities
a high priority of the Department; and
(2) the Department of Agriculture, the Environmental
Protection Agency, producer and processor organizations,
environmental organizations, and State agencies should continue their dialogue on the risks and benefits of extending
the 2001 phaseout deadline.

Subtitle E—Research Authority After
Fiscal Year 1997
SEC. 897. AUTHORIZATION OF APPROPRIATIONS.

Subject to section 898, there are authorized to be appropriated
for fiscal years 1998 through 2002 such sums as are necessary
to carry out the agricultural research, extension, and education
activities and initiatives of the Department of Agriculture.
SEC. 898. ACTIVITIES SUBJECT TO AVAILABILITY OF APPROPRIATIONS.

During each of fiscal years 1998 through 2002, the Secretary
of Agriculture shall conduct only those agricultural research, extension, and education activities and initiatives of the Department
of Agriculture for which funds are specifically provided for the
fiscal year in an appropriation Act.

TITLE IX—MISCELLANEOUS
7 USC 1901 note.

Subtitle A—Commercial Transportation of
Equine for Slaughter
SEC. 901. FINDINGS.

Because of the unique and special needs of equine being transported to slaughter, Congress finds that it is appropriate for the
Secretary of Agriculture to issue guidelines for the regulation of
the commercial transportation of equine for slaughter by persons
regularly engaged in that activity within the United States.
SEC. 902. DEFINITIONS.

In this subtitle:
(1) COMMERCIAL TRANSPORTATION.—The term ‘‘commercial
transportation’’ means the regular operation for profit of a
transport business that uses trucks, tractors, trailers, or
semitrailers, or any combination thereof, propelled or drawn
by mechanical power on any highway or public road.
(2) EQUINE FOR SLAUGHTER.—The term ‘‘equine for
slaughter’’ means any member of the Equidae family being
transferred to a slaughter facility, including an assembly point,
feedlot, or stockyard.
(3) PERSON.—The term ‘‘person’’—
(A) means any individual, partnership, corporation, or
cooperative association that regularly engages in the
commercial transportation of equine for slaughter; but
(B) does not include any individual or other entity
referred to in subparagraph (A) that occasionally transports

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1185

equine for slaughter incidental to the principal activity
of the individual or other entity in production agriculture.
SEC.

903.

REGULATION OF COMMERCIAL
EQUINE FOR SLAUGHTER.

TRANSPORTATION

OF

(a) IN GENERAL.—Subject to the availability of appropriations,
the Secretary of Agriculture may issue guidelines for the regulation
of the commercial transportation of equine for slaughter by persons
regularly engaged in that activity within the United States.
(b) ISSUES FOR REVIEW.—In carrying out this section, the Secretary of Agriculture shall review the food, water, and rest provided
to equine for slaughter in transit, the segregation of stallions from
other equine during transit, and such other issues as the Secretary
considers appropriate.
(c) ADDITIONAL AUTHORITY.—In carrying out this section, the
Secretary of Agriculture may—
(1) require any person to maintain such records and reports
as the Secretary considers necessary;
(2) conduct such investigations and inspections as the Secretary considers necessary; and
(3) establish and enforce appropriate and effective civil
penalties.
SEC. 904. LIMITATION OF AUTHORITY TO EQUINE FOR SLAUGHTER.

Nothing in this subtitle authorizes the Secretary of Agriculture
to regulate the routine or regular transportation, to slaughter or
elsewhere, of—
(1) livestock other than equine; or
(2) poultry.
SEC. 905. EFFECTIVE DATE.

This subtitle shall become effective on the first day of the
first month that begins 30 days or more after the date of enactment
of this Act.

Subtitle B—General Provisions
SEC. 911. INTERSTATE QUARANTINE.

The fourth sentence of section 8 of the Act of August 20,
1912 (7 U.S.C. 161), is amended by inserting after ‘‘Provided, That’’
the following: ‘‘if the Secretary of Agriculture determines under
this section that it is necessary to quarantine a State entirely
comprised of islands, the Secretary of Agriculture, in implementing
the restrictions authorized under this section, shall give consideration to enhancing passenger movement and commerce on and
between islands in the State: Provided further, That’’.
SEC. 912. COTTON CLASSIFICATION SERVICES.

(a) EXTENSION OF AUTHORIZATION.—The first sentence of section 3a of the Act of March 3, 1927 (commonly known as the
‘‘Cotton Statistics and Estimates Act’’) (7 U.S.C. 473a), is amended
by striking ‘‘1996’’ and inserting ‘‘2002’’.
(b) COTTON CLASSING OFFICE LOCATIONS.—Section 4 of the
Act of March 3, 1927 (commonly known as the ‘‘Cotton Statistics
and Estimates Act’’) (7 U.S.C. 474), is amended by adding at the
end the following: ‘‘The Secretary of Agriculture shall maintain

Missouri.

110 STAT. 1186

PUBLIC LAW 104–127—APR. 4, 1996

until at least January 1, 1999, all cotton classing office locations
in the State of Missouri that existed on January 1, 1996.’’.
SEC. 913. PLANT VARIETY PROTECTION FOR CERTAIN TUBER PROPAGATED PLANT VARIETIES.

(a) IN GENERAL.—Section 42(a)(1)(B)(i) of the Plant Variety
Protection Act (7 U.S.C. 2402(a)(1)(B)(i)) is amended by inserting
after ‘‘filing’’ the following: ‘‘, except that in the case of a tuber
propagated plant variety the Secretary may waive the 4-year limitation for a period ending 1 year after the date of enactment of
the Federal Agriculture Improvement and Reform Act of 1996’’.
(b) TERM OF PROTECTION.—Section 83(b) of the Plant Variety
Protection Act (7 U.S.C. 2483(b)) is amended—
(1) by striking ‘‘(b) The term’’ and inserting the following:
‘‘(b) TERM.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the term’’;
(2) in the second sentence, by striking ‘‘If the certificate’’
and inserting the following:
‘‘(2) EXCEPTIONS.—If the certificate’’; and
(3) in paragraph (2) (as so designated), by striking ‘‘except
that, in the case’’ and inserting the following: ‘‘except that—
‘‘(A) in the case of a tuber propagated plant variety
subject to a waiver granted under section 42(a)(1)(B)(i),
the term of the plant variety protection shall expire 20
years after the date of the original grant of the plant
breeder’s rights to the variety outside the United States;
and
‘‘(B) in the case’’.
SEC. 914. SWINE HEALTH PROTECTION.

(a) TERMINATION OF STATE PRIMARY
SIBILITY.—Section 10 of the Swine Health

ENFORCEMENT RESPONProtection Act (7 U.S.C.

3809) is amended—
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:
‘‘(c) REQUEST OF STATE OFFICIAL.—
‘‘(1) IN GENERAL.—On request of the Governor or other
appropriate official of a State, the Secretary may terminate,
effective as soon as the Secretary determines is practicable,
the primary enforcement responsibility of a State under subsection (a). In terminating the primary enforcement responsibility under this subsection, the Secretary shall work with the
appropriate State official to determine the level of support
to be provided to the Secretary by the State under this Act.
‘‘(2) REASSUMPTION.—Nothing in this subsection shall prevent a State from reassuming primary enforcement responsibility if the Secretary determines that the State meets the requirements of subsection (a).’’.
(b) ADVISORY COMMITTEE.—The Swine Health Protection Act
is amended—
(1) by striking section 11 (7 U.S.C. 3810); and
(2) by redesignating sections 12, 13, and 14 (7 U.S.C.
3811, 3812, and 3813) as sections 11, 12, and 13, respectively.

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1187

SEC. 915. DESIGNATION OF MOUNT PLEASANT NATIONAL SCENIC
AREA.

Sections 1, 2, and 3(a)(1) of the George Washington National
Forest Mount Pleasant Scenic Area Act (Public Law 103–314; 16
U.S.C. 545 note) are each amended by striking ‘‘George Washington
National Forest Mount Pleasant Scenic Area’’ and inserting ‘‘Mount
Pleasant National Scenic Area’’.
SEC. 916. PSEUDORABIES ERADICATION PROGRAM.

Section 2506(d) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (21 U.S.C. 114i(d)) is amended by striking ‘‘1995’’
and inserting ‘‘2002’’.
SEC. 917. COLLECTION AND USE OF AGRICULTURAL QUARANTINE AND
INSPECTION FEES.

Section 2509 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (21 U.S.C. 136a) is amended by striking subsection
(a) and inserting the following:
‘‘(a) QUARANTINE AND INSPECTION FEES.—
‘‘(1) FEES AUTHORIZED.—The Secretary of Agriculture may
prescribe and collect fees sufficient—
‘‘(A) to cover the cost of providing agricultural quarantine and inspection services in connection with the
arrival at a port in the customs territory of the United
States, or the preclearance or preinspection at a site outside
the customs territory of the United States, of an international passenger, commercial vessel, commercial aircraft,
commercial truck, or railroad car;
‘‘(B) to cover the cost of administering this subsection;
and
‘‘(C) through fiscal year 2002, to maintain a reasonable
balance in the Agricultural Quarantine Inspection User
Fee Account established under paragraph (5).
‘‘(2) LIMITATION.—In setting the fees under paragraph (1),
the Secretary shall ensure that the amount of the fees is
commensurate with the costs of agricultural quarantine and
inspection services with respect to the class of persons or entities paying the fees. The costs of the services with respect
to passengers as a class includes the costs of related inspections
of the aircraft or other vehicle.
‘‘(3) STATUS OF FEES.—Fees collected under this subsection
by any person on behalf of the Secretary are held in trust
for the United States and shall be remitted to the Secretary
in such manner and at such times as the Secretary may prescribe.
‘‘(4) LATE PAYMENT PENALTIES.—If a person subject to a
fee under this subsection fails to pay the fee when due, the
Secretary shall assess a late payment penalty, and the overdue
fees shall accrue interest, as required by section 3717 of title
31, United States Code.
‘‘(5) AGRICULTURAL QUARANTINE INSPECTION USER FEE
ACCOUNT.—
‘‘(A) ESTABLISHMENT.—There is established in the
Treasury of the United States a fund, to be known as
the ‘Agricultural Quarantine Inspection User Fee Account’,
which shall contain all of the fees collected under this

110 STAT. 1188

PUBLIC LAW 104–127—APR. 4, 1996
subsection and late payment penalties and interest charges
collected under paragraph (4) through fiscal year 2002.
‘‘(B) USE OF ACCOUNT.—For each of fiscal years 1996
through 2002, funds in the Agricultural Quarantine Inspection User Fee Account shall be available, in such amounts
as are provided in advance in appropriations Acts, to cover
the costs associated with the provision of agricultural quarantine and inspection services and the administration of
this subsection. Amounts made available under this
subparagraph shall be available until expended.
‘‘(C) EXCESS FEES.—Fees and other amounts collected
under this subsection in any of fiscal years 1996 through
2002 in excess of $100,000,000 shall be available for the
purposes specified in subparagraph (B) until expended,
without further appropriation.
‘‘(6) USE OF AMOUNTS COLLECTED AFTER FISCAL YEAR 2002.—
After September 30, 2002, the unobligated balance in the Agricultural Quarantine Inspection User Fee Account and fees and
other amounts collected under this subsection shall be credited
to the Department of Agriculture accounts that incur the costs
associated with the provision of agricultural quarantine and
inspection services and the administration of this subsection.
The fees and other amounts shall remain available to the
Secretary until expended without fiscal year limitation.
‘‘(7) STAFF YEARS.—The number of full-time equivalent positions in the Department of Agriculture attributable to the provision of agricultural quarantine and inspection services and
the administration of this subsection shall not be counted
toward the limitation on the total number of full-time equivalent positions in all agencies specified in section 5(b) of the
Federal Workforce Restructuring Act of 1994 (Public Law 103–
226; 5 U.S.C. 3101 note) or other limitation on the total number
of full-time equivalent positions.’’.

SEC. 918. MEAT AND POULTRY INSPECTION.

(a) ESTABLISHMENT OF SAFE MEAT AND POULTRY INSPECTION
PANEL.—
(1) IN GENERAL.—The Federal Meat Inspection Act is
amended—
(A) by redesignating section 410 (21 U.S.C. 680) as
section 411; and
(B) by inserting after section 409 (21 U.S.C. 679) the
following:
21 USC 679a.

‘‘SEC. 410. SAFE MEAT AND POULTRY INSPECTION PANEL.

‘‘(a) ESTABLISHMENT.—There is established in the Department
of Agriculture a permanent advisory panel to be known as the
‘Safe Meat and Poultry Inspection Panel’ (referred to in this section
as the ‘panel’).
‘‘(b) DUTIES.—
‘‘(1) REVIEW AND EVALUATION.—The panel shall review and
evaluate, as the panel considers necessary, the adequacy, necessity, safety, cost-effectiveness, and scientific merit of—
‘‘(A) inspection procedures of, and work rules and
worker relations involving Federal employees employed in,
plants inspected under this Act;

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1189

‘‘(B) informal petitions or proposals for changes in
inspection procedures, processes, and techniques of plants
inspected under this Act;
‘‘(C) formal changes in meat inspection regulations
promulgated under this Act, whether in notice, proposed,
or final form; and
‘‘(D) such other matters as may be referred to the
panel by the Secretary regarding the quality or effectiveness of a safe and cost-effective meat inspection system
under this Act.
‘‘(2) REPORTS.—
‘‘(A) IN GENERAL.—The panel shall submit to the Secretary a report on the results of each review and evaluation
carried out under paragraph (1), including such recommendations as the panel considers appropriate.
‘‘(B) REPORTS ON FORMAL CHANGES.—In the case of
a report concerning a formal change in meat inspection
regulations, the report shall be made within the time limits
prescribed for formal comments on such changes.
‘‘(C) PUBLICATION IN FEDERAL REGISTER.—Each report
of the panel to the Secretary shall be published in the
Federal Register.
‘‘(c) SECRETARIAL RESPONSE.—Not later than 90 days after the
publication of a panel report under subsection (b)(2)(C), the Secretary shall publish in the Federal Register any response required
of the Secretary to the report.
‘‘(d) COMPOSITION OF PANEL.—The panel shall be composed
of 7 members, not fewer than 5 of whom shall be from the food
science, meat science, or poultry science profession, appointed to
staggered terms not to exceed 3 years by the Secretary from nominations received from the National Institutes of Health and the Federation of American Societies of Food Animal Science and based
on the professional qualifications of the nominees.
‘‘(e) NOMINATIONS.—
‘‘(1) INITIAL PANEL.—In constituting the initial panel, the
Secretary shall solicit 6 nominees from the National Institutes
of Health and 6 nominees from the Federation of American
Societies of Food Animal Science for membership on the panel.
‘‘(2) VACANCIES.—Any subsequent vacancy on the panel
shall be filled by the Secretary after soliciting 2 nominees
from the National Institutes of Health and 2 nominees from
the Federation of American Societies of Food Animal Science.
‘‘(3) REQUIREMENTS FOR NOMINEES.—
‘‘(A) IN GENERAL.—Each nominee provided under paragraph (1) or (2) shall have a background in public health
issues and a scientific expertise in food, meat, or poultry
science or in veterinary science.
‘‘(B) SUBMISSION OF INFORMATION.—The Secretary may
require nominees to submit such information as the Secretary considers necessary prior to completing the selection
process.
‘‘(4) ADDITIONAL NOMINEES.—If any list of nominees provided under paragraph (1) or (2) is unsatisfactory to the Secretary, the Secretary may request the nominating entities to
submit an additional list of nominees.
‘‘(f) TRAVEL EXPENSES.—While away from the home or regular
place of business of a member of the panel in the performance

Federal Register,
publication.

110 STAT. 1190

Regulations.

21 USC 471.

PUBLIC LAW 104–127—APR. 4, 1996

of services for the panel, the member shall be allowed travel
expenses, including per diem in lieu of subsistence, at the same
rate as a person employed intermittently in the Government service
would be allowed under section 5703 of title 5, United States
Code.
‘‘(g) CONFLICTS OF INTEREST.—The Secretary shall promulgate
regulations regarding conflicts of interest with respect to the members of the panel.
‘‘(h) EXEMPTION.—The Federal Advisory Committee Act (5
U.S.C. App.) and title XVIII of the Food and Agriculture Act of
1977 (7 U.S.C. 2281 et seq.) shall not apply to the panel.
‘‘(i) FUNDING.—From funds available to the Secretary to carry
out this Act and the Poultry Products Inspection Act (21 U.S.C.
451 et seq.), the Secretary shall allocate such sums as may be
necessary to carry out this section.’’.
(2) CROSS REFERENCE IN POULTRY PRODUCTS INSPECTION
ACT.—The Poultry Products Inspection Act (21 U.S.C. 451 et
seq.) is amended by adding at the end the following:
‘‘SEC. 30. SAFE MEAT AND POULTRY INSPECTION PANEL.

‘‘(a) REVIEW AND EVALUATION.—The advisory panel known as
the ‘Safe Meat and Poultry Inspection Panel’ established by section
410 of the Federal Meat Inspection Act shall review and evaluate,
as the panel considers necessary, the adequacy, necessity, safety,
cost-effectiveness, and scientific merit of—
‘‘(1) inspection procedures of, and work rules and worker
relations involving Federal employees employed in, plants
inspected under this Act;
‘‘(2) informal petitions or proposals for changes in inspection procedures, processes, and techniques of plants inspected
under this Act;
‘‘(3) formal changes in poultry inspection regulations
promulgated under this Act, whether in notice, proposed, or
final form; and
‘‘(4) such other matters as may be referred to the panel
by the Secretary regarding the quality or effectiveness of a
safe and cost-effective poultry inspection system under this
Act.
‘‘(b) REPORTS.—
‘‘(1) IN GENERAL.—The Safe Meat and Poultry Inspection
Panel shall submit to the Secretary a report on the results
of each review and evaluation carried out under paragraph
(1), including such recommendations as the panel considers
appropriate.
‘‘(2) REPORTS ON FORMAL CHANGES.—In the case of a report
concerning a formal change in poultry inspection regulations,
the report shall be made within the time limits prescribed
for formal comments on such changes.’’.
(b) INTERSTATE SHIPMENT OF STATE-INSPECTED MEAT AND
POULTRY.—Not later than 90 days after the date of enactment
of this Act, the Secretary of Agriculture shall submit to Congress
recommendations concerning the steps necessary to achieve interstate shipment of—
(1) meat inspected under a State meat inspection program
developed and administered under section 301 of the Federal
Meat Inspection Act (21 U.S.C. 661); and

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110 STAT. 1191

(2) poultry inspected under a State poultry product inspection program developed and administered under section 5 of
the Poultry Products Inspection Act (21 U.S.C. 454).
SEC. 919. REIMBURSABLE AGREEMENTS.

7 USC 2260a.

(a) IN GENERAL.—The Secretary of Agriculture (referred to
in this section as the ‘‘Secretary’’) may enter into reimbursable
fee agreements with persons for preclearance at locations outside
the United States of plants, plant products, animals, and articles
for movement into the United States.
(b) OVERTIME, NIGHT, AND HOLIDAY WORK.—Notwithstanding
any other provision of law, the Secretary may pay an employee
of the Department of Agriculture performing services relating to
imports into and exports from the United States for overtime,
night, and holiday work performed by the employee at a rate
of pay established by the Secretary.
(c) REIMBURSEMENT.—
(1) IN GENERAL.—The Secretary may require persons for
whom preclearance services are performed to reimburse the
Secretary for any amounts paid by the Secretary for performance of the services.
(2) CREDITING OF FUNDS.—All funds collected under paragraph (1) shall be credited to the account that incurs the
costs and shall remain available until expended without fiscal
year limitation.
(3) LATE PAYMENT PENALTY.—
(A) IN GENERAL.—On failure of a person to reimburse
the Secretary for the costs of performance of preclearance
services—
(i) the Secretary may assess a late payment penalty; and
(ii) the overdue funds shall accrue interest in
accordance with section 3717 of title 31, United States
Code.
(B) CREDITING OF FUNDS.—Any late payment penalty
and any accrued interest collected under this paragraph
shall be credited to the account that incurs the costs and
shall remain available until expended without fiscal year
limitation.
SEC. 920. OVERSEAS TORT CLAIMS.

7 USC 2262a.

(a) IN GENERAL.—The Secretary of Agriculture may pay a tort
claim in the manner authorized by section 2672 of title 28, United
States Code, if the claim arises outside the United States in connection with activities of individuals who are performing services for
the Secretary.
(b) PERIOD FOR PRESENTATION OF CLAIM.—A claim may not
be allowed under this section unless the claim is presented in
writing to the Secretary of Agriculture within 2 years after the
date on which the claim accrues.
(c) FINALITY.—Notwithstanding any other provision of law, an
award or denial of a claim by the Secretary of Agriculture under
this section is final.
SEC. 921. OPERATION OF GRADUATE SCHOOL OF DEPARTMENT OF
AGRICULTURE
AS
NONAPPROPRIATED
FUND
INSTRUMENTALITY.

(a) DEFINITIONS.—In this section:

7 USC 2279b.

110 STAT. 1192

PUBLIC LAW 104–127—APR. 4, 1996

(1) GRADUATE SCHOOL.—The term ‘‘Graduate School’’
means the Graduate School of the Department of Agriculture.
(2) BOARD.—The term ‘‘Board’’ means the General Administration Board of the Graduate School.
(3) DIRECTOR.—The term ‘‘Director’’ means the Director
of the Graduate School.
(4) SECRETARY.—The term ‘‘Secretary’’ means the Secretary
of Agriculture.
(b) OPERATION AS NONAPPROPRIATED FUND INSTRUMENTALITY.—
On and after the date of enactment of this Act, the Graduate
School of the Department of Agriculture shall continue to operate
as a nonappropriated fund instrumentality of the United States
under the jurisdiction of the Department of Agriculture.
(c) ACTIVITIES OF GRADUATE SCHOOL.—Under the general
supervision of the Secretary, the Graduate School shall develop,
administer, and provide educational, training, and professional
development activities, including educational activities for Federal
agencies, Federal employees, nonprofit organizations, other entities,
and members of the general public.
(d) FEES AND DONATIONS.—
(1) COLLECTION OF FEES.—The Graduate School may charge
and retain fair and reasonable fees for the activities provided
by the Graduate School. The amount of the fees shall be based
on the cost of the activities to the Graduate School.
(2) ACCEPTANCE OF DONATIONS.—
(A) ACCEPTANCE AND USE AUTHORIZED.—The Graduate
School may accept, use, hold, dispose, and administer gifts,
bequests, and devises of money, securities, and other real
or personal property made for the benefit of, or in connection with, the Graduate School.
(B) EXCEPTION.—The Graduate School shall not accept
a donation from a person that is actively engaged in a
procurement activity with the Graduate School or has an
interest that may be substantially affected by the performance or nonperformance of an official duty of a member
of the Board or an employee of the Graduate School.
(3) NOT FEDERAL FUNDS.—Fees collected under paragraph
(1) and amounts received under paragraph (2) shall not be
considered to be Federal funds and shall not be required to
be deposited in the Treasury of the United States.
(e) GENERAL ADMINISTRATION BOARD AND DIRECTOR.—
(1) APPOINTMENT AS GOVERNING BOARD.—The Secretary
shall appoint a General Administration Board to serve as a
governing board for the Graduate School and to supervise and
direct the activities of the Graduate School. The Board shall
be subject to regulation by the Secretary.
(2) DUTIES OF BOARD.—The Board shall—
(A) formulate broad policies in accordance with which
the Graduate School shall be administered;
(B) take all steps necessary to ensure that the highest
possible educational standards are maintained by the Graduate School;
(C) exercise general supervision over the administration of the Graduate School; and
(D) establish such bylaws, rules, and procedures as
may be necessary for the fulfillment of the duties described
in subparagraphs (A), (B), and (C).

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110 STAT. 1193

(3) APPOINTMENT OF DIRECTOR AND OTHER OFFICERS.—The
Board shall select a Director and such other officers as the
Board considers necessary to administer the Graduate School.
The Director and other officers shall serve on such terms and
perform such duties as the Board may prescribe.
(4) DUTIES OF DIRECTOR.—The Director shall be responsible,
subject to the supervision and direction of the Board, for carrying out the functions of the Graduate School.
(5) BORROWING AND INVESTMENT AUTHORITY.—The Board
may authorize the Director—
(A) to borrow money on the credit of the Graduate
School; and
(B) to invest funds held in excess of the current operating requirements of the Graduate School for purposes of
maintaining a reasonable reserve.
(6) LIABILITY.—The Director and the members of the Board
shall not be held personally liable for any loss or damage
that may accrue to the funds of the Graduate School as the
result of any act or exercise of discretion performed in carrying
out their duties under this section.
(f) EMPLOYEES.—Employees of the Graduate School are employees of a nonappropriated fund instrumentality and shall not be
considered to be Federal employees.
(g) NOT A FEDERAL AGENCY.—The Graduate School shall not
be considered to be a Federal agency for purposes of—
(1) the Federal Advisory Committee Act (5 U.S.C. App.);
(2) section 552 or 552a of title 5, United States Code;
or
(3) chapter 171 of title 28, United States Code.
(h) ACQUISITION AND DISPOSAL OF PROPERTY.—In order to carry
out the activities of the Graduate School, the Graduate School
may—
(1) acquire real property in the District of Columbia and
in other places by lease, purchase, or otherwise;
(2) maintain, enlarge, or remodel any such property;
(3) have sole control of any such property; and
(4) dispose of real and personal property without regard
to the Federal Property and Administrative Services Act of
1949 (40 U.S.C. 471 et seq.).
(i) CONTRACT AUTHORITY.—The Graduate School may enter
into contracts without regard to the Federal Property and Administrative Services Act of 1949 (40 U.S.C. 471 et seq.) or any other
law that prescribes procedures for the procurement of property
or services by an executive agency.
(j) USE OF DEPARTMENT FACILITIES AND RESOURCES.—The
Graduate School may use the facilities and resources of the Department of Agriculture, on the condition that any costs incurred by
the Department that are attributable solely to Graduate School
operations and all costs incurred by the Graduate School arising
out of such operations shall be paid using funds of the Graduate
School. Federal funds may not be used to pay the costs.
SEC. 922. STUDENT INTERNSHIP PROGRAMS.

(a) STUDENT INTERN SUBSISTENCE PROGRAM.—
(1) DEFINITION OF STUDENT INTERN.—In this subsection,
the term ‘‘student intern’’ means a person who—

7 USC 2279c.

110 STAT. 1194

PUBLIC LAW 104–127—APR. 4, 1996

(A) is employed by the Department of Agriculture
(referred to in this section as the ‘‘Department’’) to assist
scientific, professional, administrative, or technical employees of the Department; and
(B) is a student in good standing at an institution
of higher education (as defined in section 1201 of the Higher
Education Act of 1965 (20 U.S.C. 1141)) pursuing a course
of study related to the field in which the person is employed
by the Department.
(2) PAYMENT OF CERTAIN EXPENSES BY THE SECRETARY.—
The Secretary of Agriculture (referred to in this section as
the ‘‘Secretary’’) may, out of user fee funds or funds appropriated to any agency of the Department, pay for lodging
expenses, subsistence expenses, and transportation expenses
of a student intern at the agency (including expenses of
transportation to and from the student intern’s residence at
or near the institution of higher education attended by the
student intern and the official duty station at which the student
intern is employed).
(b) COOPERATION WITH ASSOCIATIONS OF COLLEGES AND
UNIVERSITIES.—
(1) AUTHORITY TO COOPERATE.—Notwithstanding chapter
63 of title 31, United States Code, the Secretary may enter
into cooperative agreements on an annual basis with 1 or
more associations of institutions of higher education (as defined
in section 1201 of the Higher Education Act of 1965 (20 U.S.C.
1141)) for the purpose of providing for Department participation
in internship programs for graduate and undergraduate students who are selected by the associations from students attending member institutions of the associations and other institutions of higher education.
(2) INTERNSHIP PROGRAM.—An internship program supported under this subsection (referred to in this subsection
as an ‘‘internship program’’) shall provide work assignments
for students within the Department and such other activities
as the association that enters into the cooperative agreement
under paragraph (1) with respect to the internship program
(referred to in this subsection as the ‘‘cooperating association’’)
and the Secretary shall determine. The nature of Department
participation in an internship program shall be developed
jointly by the Secretary and the cooperating association.
(3) PROGRAM COORDINATION.—The cooperating association
shall coordinate an internship program, including—
(A) the recruitment of students;
(B) arrangements for travel of the students to Washington, District of Columbia, and to agency field locations;
(C) the provision of housing for students, if required;
and
(D) all activities for the students that take place outside the Department work assignments of the students.
(4) NUMBER AND SELECTION OF STUDENTS.—
(A) NUMBER.—A cooperative agreement entered into
under paragraph (1) shall specify the number of students
that the Department will host each year and a list of
work assignments to be provided for the students.
(B) SELECTION.—The cooperating association shall provide the Department with a pool of student candidates

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1195

meeting the requirements for each work assignment identified by the Secretary. Final selection of the students for
Department internship positions shall be made by the Secretary.
(5) COST REIMBURSEMENT.—From such amounts as the Secretary determines are available each fiscal year for internship
programs, and subject to such regulations as the Secretary
may issue, the Secretary may reimburse a cooperating association for the Department share of all direct and indirect costs
of an internship program, including student stipends, transportation costs to the internship site, and other costs of an internship program.
(6) LEAD AGENCY.—The Secretary may designate a lead
agency within the Department to carry out this subsection.
(7) INTERAGENCY AGREEMENTS.—Agencies and offices
within the Department other than the lead agency—
(A) may enter into interagency agreements with the
lead agency to provide work assignments for students
participating in an internship program; and
(B) shall reimburse the lead agency for the direct and
indirect costs of each student assigned to the agency under
an internship program.
(8) FEDERAL EMPLOYEE STATUS.—A student who participates in an internship program shall not be considered a Federal employee, except for purposes of chapter 81 of title 5,
and chapter 171 of title 28, United States Code.
SEC. 923. CONVEYANCE OF EXCESS FEDERAL PERSONAL PROPERTY.

7 USC 2206a.

Notwithstanding any other provision of law, the Secretary of
Agriculture may—
(1) convey title to excess Federal personal property owned
by the Department of Agriculture, with or without monetary
compensation and for such purposes as are determined by
the Secretary, to—
(A) any of the 1994 Institutions (as defined in section
532 of the Equity in Educational Land-Grant Status Act
of 1994 (Public Law 103–382; 7 U.S.C. 301 note));
(B) any Hispanic-serving institution (as defined in section 316(b) of the Higher Education Act of 1965 (20 U.S.C.
1059c(b))); and
(C) any college or university eligible to receive funds
under the Act of August 30, 1890 (7 U.S.C. 321 et seq.),
including Tuskegee University; and
(2) acquire from, exchange with, or dispose of personal
property to other Federal departments and agencies without
monetary compensation in furtherance of the purposes of this
section.
SEC. 924. CONVEYANCE OF LAND TO WHITE OAK CEMETERY.

(a) IN GENERAL.—
(1) RELEASE OF INTEREST.—After execution of the agreement described in subsection (b), the Secretary of Agriculture
shall release the condition stated in the deed on the land
described in subsection (c) that the land be used for public
purposes, and that if the land is not so used, that the land
revert to the United States. The release shall be on the condition that the land be used exclusively for cemetery purposes,

Arkansas.

110 STAT. 1196

PUBLIC LAW 104–127—APR. 4, 1996

and that if the land is not so used, that the land revert to
the United States.
(2) BANKHEAD-JONES FARM TENANT ACT.—Section 32(c) of
the Bankhead-Jones Farm Tenant Act (7 U.S.C. 1011(c)) shall
not apply to the release under paragraph (1).
(b) AGREEMENT.—The Secretary of Agriculture shall make the
release under subsection (a) on execution by the Board of Trustees
of the University of Arkansas, in consideration of the release, of
an agreement, satisfactory to the Secretary of Agriculture, that—
(1) the Board of Trustees will not sell, lease, exchange,
or otherwise dispose of the land described in subsection (c)
except to the White Oak Cemetery Association of Washington
County, Arkansas, or a successor organization, for exclusive
use for an expansion of the cemetery maintained by the Association or successor organization; and
(2) the proceeds of such a disposition of the land will
be deposited and held in an account open to inspection by
the Secretary of Agriculture, and used, if withdrawn from the
account, for public purposes.
(c) LAND DESCRIPTION.—The land described in this subsection
is the land conveyed to the Board of Trustees of the University
of Arkansas, with certain other land, by deed dated November
18, 1953, comprising approximately 2.2 acres located within property of the University of Arkansas in Washington County, Arkansas,
commonly known as the ‘‘Savor property’’ and described as follows:
The part of Section 20, Township 17 north, range 31 west,
beginning at the north corner of the White Oak Cemetery
and the University of Arkansas Agricultural Experiment Station farm at Washington County road #874, running west
approximately 330 feet, thence south approximately 135 feet,
thence southeast approximately 384 feet, thence north approximately 330 feet to the point of beginning.
SEC. 925. SALE OF LAND BY THE UNIVERSITY OF ARKANSAS.

The Act of March 2, 1887 (commonly known as the ‘‘Hatch
Act of 1887’’) (7 U.S.C. 361a et seq.) shall not apply to the sale
by the University of Arkansas of the approximately 103.52 acres
of land in Washington County, Arkansas, owned by the University
and commonly known as the ‘‘Walker Tract’’, if the sale is made
on the condition that all of the proceeds of the sale are used
for agricultural research facilities and programs of the University
of Arkansas.
Arkansas.

SEC. 926. DESIGNATION OF DALE BUMPERS SMALL FARMS RESEARCH
CENTER.

(a) IN GENERAL.—The small farms research facility of the Agricultural Research Service located near Booneville, Arkansas, shall
be known and designated as the ‘‘Dale Bumpers Small Farms
Research Center’’.
(b) REFERENCES.—Any reference in a law, map, regulation,
document, paper, or other record of the United States to the
research facility referred to in subsection (a) shall be deemed to
be a reference to the ‘‘Dale Bumpers Small Farms Research Center’’.
Maryland.

SEC.

927.

DEPARTMENT OF AGRICULTURE
STRATEGIC SPACE PLAN.

WASHINGTON

AREA

The Secretary of Agriculture may obligate not more than
$5,000,000, from funds appropriated for agriculture buildings and

PUBLIC LAW 104–127—APR. 4, 1996

110 STAT. 1197

facilities and rental payments, for the improvement of State and
local roads relating to the construction of an office complex at
the Beltsville Agriculture Research Center, Maryland, as part of
the implementation of the Department of Agriculture Washington
Area Strategic Space Plan.
SEC. 928. SEVERABILITY.

7 USC 7201 note.

If any provision of this Act or the application thereof to any
person or circumstance is held invalid, the invalidity shall not
affect other provisions or applications of this Act that can be given
effect without regard to the invalid provision or application, and
to this end the provisions of this Act are severable.
Approved April 4, 1996.

LEGISLATIVE HISTORY—H.R. 2854 (S. 1541):
HOUSE REPORTS: Nos. 104–462, Pt. 1 (Comm. on Agriculture) and 104–494
(Comm. of Conference).
CONGRESSIONAL RECORD, Vol. 142 (1996):
Jan. 31, Feb. 1, 6, 7, S. 1541 considered and passed Senate.
Feb. 28, 29, H.R. 2854 considered and passed House.
Mar. 12, considered and passed Senate, amended, in lieu of S. 1541.
Mar. 27, Senate considered conference report.
Mar. 28, Senate and House agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
Apr. 4, Presidential statement.

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