1 (3) OFFSET WITHIN AREA.-Further losses in an area quota pool shall be offset by any gains or profits from additional peanuts (other than separate type pools established under subsection (c)(2)(A) for Valencia peanuts produced in New Mexico) owned or controlled by the Commodity Credit Corporation in that area and sold for domestic edible use, in accordance with regulations issued by the Secretary. This paragraph shall not apply to profits or gains from a farm with 1 acre or less of peanut production. (4) FIRST USE OF MARKETING ASSESSMENTS. The Secretary shall use funds collected under subsection (g) (except funds attributable to handlers) to offset further losses in area quota pools. The Secretary shall transfer to the Treasury those funds collected under subsection (g) and available for use under this paragraph that the Secretary determines are not required to cover losses in area quota pools. (5) 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 3581(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 Depart ment inspectors both as farmer stock and shelled or cleaned in-shell peanuts; (C) continue to endeavor to operate the peanut program so as to improve the quality of domestic peanuts and ensure the coordination of activities under the Peanut Administrative Committee established under Marketing Agreement No. 146, regulating the quality of domestically produced peanuts (under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937); and (D) ensure that any changes made in the peanut program as a result of this subsection requiring additional production or handling at the farm level shall be reflected as an upward adjustment in the Department loan schedule. (2) EXPORTS AND OTHER PEANUTS.-The Secretary shall require that all peanuts in the domestic and export markets fully comply with all quality standards under Marketing Agreement No. 146. (g) MARKETING ASSESSMENT.— (1) IN GENERAL.-The Secretary shall provide for a nonrefundable marketing assessment. The assessment shall be made on a per pound basis in an amount equal to 1.1 percent for each of the 1994 and 1995 crops, 1.15 percent for the 1996 crop, and 1.2 percent for each of the 1997 through 2002 crops, of the national average quota or additional peanut loan rate for the applicable crop. (2) FIRST PURCHASERS. (A) IN GENERAL.-Except as provided under paragraphs (3) and (4), the first purchaser of peanuts shall— (i) collect from the producer a marketing assessment equal to the quantity of peanuts acquired multiplied by (I) in the case of each of the 1994 and 1995 crops, .55 percent of the applicable national average loan rate; (II) in the case of the 1996 crop, .6 percent of the applicable national average loan rate; and (III) in the case of each of the 1997 through 2002 crops, .65 percent of the applicable national average loan rate; (ii) pay, in addition to the amount collected under clause (i), a marketing assessment in an amount equal to the quantity of peanuts acquired multiplied by .55 percent of the applicable national average loan rate; and (iii) remit the amounts required under clauses (i) and (ii) to the Commodity Credit Corporation in a manner specified by the Secretary. (B) DEFINITION OF FIRST PURCHASER.-In this subsection, the term "first purchaser" means a person acquiring peanuts from a producer except that in the case of peanuts forfeited by a producer to the Commodity Credit Corporation, the term means the person acquiring the peanuts from the Commodity Credit Corporation. (3) OTHER PRIVATE MARKETINGS.-In the case of a private marketing by a producer directly to a consumer through a retail or wholesale outlet or in the case of a marketing by the producer outside of the continental United States, the producer shall be responsible for the full amount of the assessment and shall remit the assessment by such time as is specified by the Secretary. (4) LOAN PEANUTS.-In the case of peanuts that are pledged as collateral for a loan made under this section, the producer portion of the assessment shall be deducted from the proceeds of the loan. The remainder of the assessment shall be paid by the first purchaser of the peanuts. For purposes of computing net gains on peanuts under this section, the reduction in loan proceeds shall be treated as having been paid to the producer. (5) PENALTIES.-If any person fails to collect or remit the reduction required by this subsection or fails to comply with the requirements for recordkeeping or otherwise as are required by the Secretary to carry out this subsection, the person shall be liable to the Secretary for a civil penalty up to an amount determined by multiplying (A) the quantity of peanuts involved in the violation; by (B) the national average quota peanut rate for the applicable crop year. (6) ENFORCEMENT.-The Secretary may enforce this subsection in the courts of the United States. (h) 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 marketing year by a farm described in paragraph (1)(D) shall be allocated to other farms in the same State on such basis as the Secretary may by regulation prescribe."; and (vii) in subsection (f), by striking "1997" and inserting "2002": (B) in section 358b (7 U.S.C. 1358b)— (i) in the section heading, by striking "1991 THROUGH 1995 CROPS OF"; and (ii) in subsection (c), by striking "1995" and inserting "2002"; (C) in section 358c(d) (7 U.S.C. 1358c(d)), by striking "1995" and inserting "2002"; and (D) in section 358e (7 U.S.C. 1359a)— (i) in the section heading, by striking "FOR 1991 THROUGH 1997 CROPS OF PEANUTS"; and (ii) in subsection (i), by striking "1997" and inserting "2002". (2) ELIMINATION OF QUOTA FLOOR.-Section 358-1(a)(1) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1(a)(1)) is amended by striking the second sentence. (3) TEMPORARY QUOTA ALLOCATION.-Section 358-1 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358-1) is amended (A) in subsection (a)(1), by striking "domestic edible, seed," and inserting "domestic edible use (except seed)"; and (B) in subsection (b)(2) (i) in subparagraph (A), by striking "subparagraph (B) and subject to"; and (ii) by striking subparagraph (B) and inserting the following: "(B) TEMPORARY QUOTA ALLOCATION.— "(i) ALLOCATION RELATED TO SEED PEANUTS.-Temporary allocation of quota pounds for the marketing year only in which the crop is planted shall be made to producers for each of the 1996 through 2002 marketing years as provided in this subparagraph. "(ii) QUANTITY.-The temporary quota allocation shall be equal to the pounds of seed peanuts planted on the farm, as may be adjusted and determined under regulations prescribed by the Secretary. "(iii) ADDITIONAL QUOTA.-The temporary allocation of quota pounds under this paragraph shall be in addition to the farm poundage quota otherwise established under this subsection and shall be credited, for the applicable marketing year only, in total, to the producer of the peanuts on the farm in a manner prescribed by the Secretary. "(iv) EFFECT OF OTHER REQUIREMENTS.Nothing in this section alters or changes the requirements regarding the use of quota and additional peanuts established by section. 358e(b).". (4) UNDERMARKETINGS.-Part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 is amended (A) in section 358-1(b) (7 U.S.C. 1358-1(b))— (i) in paragraph (1)(B), by striking "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 "(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. "(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. OF "(D) EFFECT TRANSFER.-Any farm poundage quota transferred under this paragraph shall not result in any reduction in the farm poundage quota for the transferring farm if the transferred quota is produced or considered produced on the receiving farm."; and (B) by adding at the end the following: "(4) TRANSFERS IN COUNTIES WITH SMALL QUOTAS.-Notwithstanding paragraphs (1) and (2), in the case of any county in a State for which the poundage quota allocated to the county was less than 100,000 pounds for the preceding year's crop, all or any part of a farm poundage quota may be transferred by sale or lease or otherwise from a farm in the county to a farm in another county in the same State.". SEC. 156. SUGAR PROGRAM. (a) SUGARCANE.-The Secretary shall make loans available to processors of domestically grown sugarcane at a rate equal to 18 cents per pound for raw cane sugar. (b) SUGAR BEETS.-The Secretary shall make loans available to processors of domestically grown sugar beets at a rate equal to 22.9 cents per pound for refined beet sugar. (c) REDUCTION IN LOAN RATES. (1) REDUCTION REQUIRED.-The Secretary shall reduce the loan rate specified in subsection (a) for domestically grown sugarcane and subsection (b) for domestically grown sugar beets if the Secretary determines that negotiated reductions in export subsidies and domestic subsidies provided for sugar of other major sugar growing, producing, and exporting countries in the aggregate exceed the commitments made as part of the Agreement on Agriculture. (2) EXTENT OF REDUCTION.-The Secretary shall not reduce the loan rate under subsection (a) or (b) below a rate that provides an equal measure of support to that provided by other major sugar growing, producing, and exporting countries, based on an examination of both domestic and export subsidies subject to reduction in the Agreement on Agriculture. (3) ANNOUNCEMENT OF REDUCTION.-The Secretary shall announce any loan rate reduction to be made under this subsection as far in advance as is practicable. (4) DEFINITIONS.-In this subsection: (A) AGREEMENT ON AGRICULTURE.-The term "Agreement on Agriculture" means the Agreement on Agriculture referred to in section 101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)). (B) MAJOR SUGAR COUNTRIES.-The term "major sugar growing, producing, and exporting countries" means— (i) the countries of the European Union; and (ii) the 10 foreign countries not covered by subparagraph (A) that the Secretary determines produce the greatest quantity of sugar. (d) TERM OF LOANS. (1) IN GENERAL.-A loan under this section during any fiscal year shall be made available not earlier than the beginning of the fiscal year and shall mature at the earlier of— (A) the end of the 9-month period beginning on the first day of the first month after the month in which the loan is made; or (B) the end of the fiscal year in which the loan is made. (2) SUPPLEMENTAL LOANS.-In the case of a loan made under this section in the last 3 months of a fiscal year, the processor may repledge the sugar as collateral for a second loan in the subsequent fiscal year, except that the second loan shall (A) be made at the loan rate in effect at the time the second loan is made; and (B) mature in 9 months less the quantity of time that the first loan was in effect. (e) LOAN TYPE; PROCESSOR ASSURANCES.(1) RECOURSE LOANS.-Subject to paragraph (2), the Secretary shall carry out this section through the use of recourse loans. (2) NONRECOURSE LOANS.-During any fiscal year in which the tariff rate quota for imports of sugar into the United States is established at, or is increased to, a level in excess of 1,500,000 short tons raw value, the Secretary shall carry out this section by making available nonrecourse loans. Any recourse loan previously made available by the Secretary under this section during the fiscal year shall be changed by the Secretary into a nonrecourse loan. (3) PROCESSOR ASSURANCES.-If the Secretary is required under paragraph (2) to make nonrecourse loans available during a fiscal year or to change recourse loans into nonrecourse loans, the Secretary shall ob tain 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 sugar beets or sugar beet molasses, that has been marketed. (3) COLLECTION. (A) TIMING.-A marketing assessment required under this subsection shall be collected on a monthly basis and shall be remitted to the Commodity Credit Corporation not later than 30 days after the end of each month. Any cane sugar or beet sugar processed during a fiscal year that has not been marketed by September 30 of the year shall be subject to assessment on that date. The sugar shall not be subject to a second assessment at the time that it is marketed. (B) MANNER.-Subject to subparagraph (A), marketing assessments shall be collected under this subsection in the manner prescribed by the Secretary and shall be nonrefundable. (4) PENALTIES.-If any person fails to remit the assessment required by this subsection or fails to comply with such requirements for recordkeeping or otherwise as are required by the Secretary to carry out this subsection, the person shall be liable to the Secretary for a civil penalty up to an amount determined by multiplying— (A) the quantity of cane sugar or beet sugar involved in the violation; by (B) the loan rate for the applicable crop of sugarcane or sugar beets. (5) ENFORCEMENT.-The Secretary may enforce this subsection in a court of the United States. (g) FORFEITURE PENALTY. (1) IN GENERAL.-A penalty shall be assessed on the forfeiture of any sugar pledged as collateral for a nonrecourse loan under this section. (2) CANE SUGAR.-The penalty for cane sugar shall be 1 cent per pound. (3) BEET SUGAR. The penalty for beet sugar shall bear the same relation to the penalty for cane sugar as the marketing assessment for sugar beets bears to the marketing assessment for sugarcane. (4) EFFECT OF FORFEITURE.-Any payments owed producers by a processor that forfeits any sugar pledged as collateral for a nonrecourse loan shall be reduced in proportion to the loan forfeiture penalty incurred by the processor. (h) INFORMATION REPORTING.— (1) DUTY OF PROCESSORS AND REFINERS TO REPORT.-A sugarcane processor, cane sugar refiner, and sugar beet processor shall furnish the Secretary, on a monthly basis, such information as the Secretary may require to administer sugar programs, including the quantity of purchases of sugarcane, sugar beets, and sugar, and production, importation, distribution, and stock levels of sugar. (2) PENALTY.-Any person willfully failing or refusing to furnish the information, or furnishing willfully any false information, shall be subject to a civil penalty of not more than $10,000 for each such violation. (3) MONTHLY REPORTS.-Taking into consideration the information received under paragraph (1), the Secretary shall publish on a monthly basis composite data on production, imports, distribution, and stock levels of sugar. (i) CROPS.-This section (other than subsection (f)) shall be effective only for the 1996 through 2002 crops of sugar beets and sugar cane. Subtitle E-Administration 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— (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. (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. 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 beets shall be superior to all statutory and common law liens on raw cane sugar and refined beet sugar in favor of the producers of sugarcane and sugar beets and all prior recorded and unrecorded liens on the crops of sugarcane and sugar beets from which the sugar was derived. SEC. 165. 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 sub (7) a sale for other than a primary use. (c) PRESIDENTIAL DISASTER AREAS.(1) IN GENERAL.-Notwithstanding section (a), on such terms and conditions as the Secretary may consider in the public interest, the Corporation may make available any commodity or product owned or controlled by the Corporation for use in relieving distress (A) in any area in the United States (including the Virgin Islands) declared by the President to be an acute distress area because of unemployment or other economic cause, if the President finds that the use will not displace or interfere with normal marketing of agricultural commodities; and (B) in connection with any major disaster determined by the President to warrant assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.). (2) COSTS.-Except on a reimbursable basis, the Corporation shall not bear any costs in connection with making a commodity available under paragraph (1) beyond the cost of the commodity to the Corporation incurred in (A) the storage of the commodity; and (B) the handling and transportation costs in making delivery of the commodity to designated agencies at 1 or more central locations in each State or other area. (d) EFFICIENT OPERATIONS.-Subsection (a) shall not apply to the sale of a commodity the disposition of which is desirable in the interest of the effective and efficient conduct of the operations of the Corporation because of the small quantity of the commodity involved, or because of the age, location, or questionable continued storability of the commodity. Subtitle F-Permanent Price Support SEC. 171. SUSPENSION AND REPEAL OF PERMA- 029-065_vol1 D-00--22 OF (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. 1379a1379j). (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). (L) Title VI (7 U.S.C. 1471-1471j). (2) REPEALS.-The following provisions of the Agricultural Act of (A) Section 101B (7 U.S.C. 1441–2). (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 671 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 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"). SEC. 182. COMPOSITION. (a) MEMBERSHIP AND APPOINTMENT.-The Commission shall be composed of 11 members, appointed as follows: (1) Three members shall be appointed by the President. (2) Four members shall be appointed by the Chairman of the Committee on Agriculture of the House of Representatives in consultation with the ranking minority member of the Committee. (3) Four members shall be appointed by the Chairman of the Committee on Agriculture, Nutrition, and Forestry of the Senate in consultation with the ranking minority member of the Committee. (b) QUALIFICATIONS.-At least 1 of the members appointed under each of paragraphs (1), (2), and (3) of subsection (a) shall be an individual who is primarily involved in production agriculture. All other members of the Commission shall be appointed from among individuals having knowledge and experience in agricultural production, marketing, finance, or trade. (c) TERM OF MEMBERS; VACANCIES.-A member of the Commission shall be appointed for the life of the Commission. A vacancy on the Commission shall not affect its powers, but shall be filled in the same manner as the original appointment was made. (d) TIME FOR APPOINTMENT; FIRST MEETING. The members of the Commission shall be appointed not later than October 1, 1997. The Commission shall convene its first meeting to carry out its duties under this subtitle 30 days after 6 members of the Commission have been appointed. (e) CHAIRPERSON.-The chairperson of the Commission shall be designated jointly by the Chairman of the Committee on Agriculture of the House of Representatives and the Chairman of the Committee on Agriculture, Nutrition, and Forestry of the Senate from among the members of the Commission. SEC. 183. COMPREHENSIVE REVIEW OF PAST AND FUTURE OF PRODUCTION AGRICULTURE. (a) INITIAL REVIEW.-The Commission shall conduct a comprehensive review of changes in the condition of production agriculture in the United States since the date of enactment of this title and the extent to which the changes are the result of this title and the amendments made by this title. The review shall include the following: (1) An assessment of the initial success of production flexibility contracts in supporting the economic viability of farming in the United States. (2) An assessment of economic risks to farms delineated by size of farm operation (such as small, medium, or large farms) and region of production. (3) An assessment of the food security situation in the United States in the areas of trade, consumer prices, international competitiveness of United States production agriculture, food supplies, and humanitarian relief. (4) An assessment of the changes in farmland values and agricultural producer incomes since the date of enactment of this title. (5) An assessment of the extent to which regulatory relief for agricultural producers has been enacted and implemented, including the application of cost/benefit principles in the issuance of agricultural regulations. (6) An assessment of the extent to which tax relief for agricultural producers has been enacted in the form of capital gains tax reductions, estate tax exemptions, and mechanisms to average tax loads over high- and low-income years. (7) An assessment of the effect of any Federal Government interference in agricultural export markets, such as the imposition of trade embargoes, and the degree of implementation and success of international trade agreements and United States export programs. (8) An assessment of the likely affect of the sale, lease, or transfer of farm poundage quota for peanuts across State lines. (b) SUBSEQUENT REVIEW.-The Commission shall conduct a comprehensive review of the future of production agriculture in the United States and the appropriate role of the Federal Government in support of production agriculture. The review shall include the following: (1) An assessment of changes in the condition of production agriculture in the United States since the initial review conducted under subsection (a). (2) Identification of the appropriate future relationship of the Federal Government with production agriculture after 2002. (3) An assessment of the personnel and infrastructure requirements of the Department of Agriculture necessary to support the future relationship of the Federal Government with production agriculture. (4) An assessment of economic risks to farms delineated by size of farm operation. (such as small, medium, or large farms) and region of production. (c) RECOMMENDATIONS.-In carrying out the subsequent review under subsection (b), the Commission shall develop specific recommendations for legislation to achieve the appropriate future relationship of the Federal Government with production agriculture identified under subsection (a)(2). SEC. 184. 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 section (a) a report containing the results of the subsequent review conducted under section 183(b). 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. (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. (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. (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. The Commission shall terminate on submission of the final report required by section 184. Subtitle H-Miscellaneous Commodity 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 ascertain whether futures and options contracts can provide producers with reasonable protection from the financial risks of fluctuations in price, yield, and income inherent in the production and marketing of the commodities. The pilot program shall be an alternative to other related programs of the Department of Agriculture. (b) DISTRIBUTION OF PILOT PROGRAM.-For each agricultural commodity included in the pilot program, the Secretary may operate the pilot program in not more than 100 counties, except that not more than 6 of the counties may be located in any 1 State. The pilot program for a commodity shall not be operated in any county for more than 3 of the 1996 through 2002 calendar years. (c) ELIGIBLE PARTICIPANTS.-In operating the pilot program, the Secretary may enter into contract with a producer who (1) is eligible for a production flexibility contract, a marketing assistance loan, or other assistance under this title; (2) volunteers to participate in the pilot program; (3) operates a farm located in a county selected for the pilot program; and (4) meets such other eligibility requirements as the Secretary may establish. (d) NOTICE TO PRODUCERS.-The Secretary shall provide notice to each producer participating in the pilot program that (1) the participation of the producer is voluntary; and (2) neither the United States, the Commodity Credit Corporation, the Federal Crop Insurance Corporation, the Department of Agriculture, nor any other Federal agency is authorized to guarantee that participants in the pilot program will be better or worse off financially as a result of participation in the pilot program than the producer would have been if the producer had not participated in the pilot program. (e) CONTRACTS.-The Secretary shall set forth in each contract under the pilot program the terms and conditions for participation in the pilot program and the notice required by subsection (d). (f) ELIGIBLE MARKETS.-Trades for futures and options contracts under the pilot program shall be carried out on commodity futures and options markets designated as contract markets under the Commodity Exchange Act (7 U.S.C. 1 et seq.) (g) RECORDKEEPING.-A producer participating in the pilot program shall compile, maintain, and submit (or authorize the compilation, maintenance, and submission) of such documentation as the regulations governing the pilot program require. (h) USE OF COMMODITY CREDIT CORPORATION. The Secretary shall fund and operate the pilot program through the Commodity Credit Corporation. To the maximum extent practicable, the Secretary shall operate the pilot program in a budget neutral manner. (i) CONFORMING REPEAL.-The Options Pilot Program Act of 1990 (subtitle E of title XI of Public Law 101-624; 7 U.S.C. 1421 note) is repealed. SEC. 192. RISK MANAGEMENT EDUCATION. In consultation with the Commodity Futures Trading Commission, the Secretary shall provide such education in management of the financial risks inherent in the production and marketing of agricultural commodities as the Secretary considers appropriate. As part of such educational activities, the Secretary may develop and implement programs to facilitate the participation of agricultural producers in commodity futures trading programs, forward contracting options, and insurance protection programs by assisting and training producers in the usage of such programs. In implementing this authority, the Secretary may use existing research and extension authorities and resources of the Department of Agriculture. 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.— |