Text: S.3240 — 112th Congress (2011-2012)

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[Congressional Bills 112th Congress]
[From the U.S. Government Printing Office]
[S. 3240 Public Print (PP)]

                             July 10, 2012

                    Ordered to be printed as passed

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
112th CONGRESS
  2d Session
                                S. 3240

_______________________________________________________________________

                                 AN ACT


 
   To reauthorize agricultural programs through 2017, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) In General.--This Act may be cited as the ``Agriculture Reform, 
Food, and Jobs Act of 2012''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definition of Secretary.
                      TITLE I--COMMODITY PROGRAMS

                    Subtitle A--Repeals and Reforms

Sec. 1101. Repeal of direct payments.
Sec. 1102. Repeal of counter-cyclical payments.
Sec. 1103. Repeal of average crop revenue election program.
Sec. 1104. Definitions.
Sec. 1105. Agriculture risk coverage.
Sec. 1106. Producer agreement required as condition of provision of 
                            payments.
Sec. 1107. Period of effectiveness.
Sec. 1108. Adjusted gross income limitation for conservation programs.
  Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

Sec. 1201. Availability of nonrecourse marketing assistance loans for 
                            loan commodities.
Sec. 1202. Loan rates for nonrecourse marketing assistance loans.
Sec. 1203. Term of loans.
Sec. 1204. Repayment of loans.
Sec. 1205. Loan deficiency payments.
Sec. 1206. Payments in lieu of loan deficiency payments for grazed 
                            acreage.
Sec. 1207. Special marketing loan provisions for upland cotton.
Sec. 1208. Special competitive provisions for extra long staple cotton.
Sec. 1209. Availability of recourse loans for high moisture feed grains 
                            and seed cotton.
Sec. 1210. Adjustments of loans.
                           Subtitle C--Sugar

Sec. 1301. Sugar program.
                           Subtitle D--Dairy

      PART I--Dairy Production Margin Protection and Dairy Market 
                         Stabilization Programs

Sec. 1401. Definitions.
Sec. 1402. Calculation of average feed cost and actual dairy production 
                            margins.
         subpart a--dairy production margin protection program

Sec. 1411. Establishment of dairy production margin protection program.
Sec. 1412. Participation of dairy operations in production margin 
                            protection program.
Sec. 1413. Production history of participating dairy operations.
Sec. 1414. Basic production margin protection.
Sec. 1415. Supplemental production margin protection.
Sec. 1416. Effect of failure to pay administration fees or premiums.
             subpart b--dairy market stabilization program

Sec. 1431. Establishment of dairy market stabilization program.
Sec. 1432. Threshold for implementation and reduction in dairy 
                            payments.
Sec. 1433. Milk marketings information.
Sec. 1434. Calculation and collection of reduced dairy operation 
                            payments.
Sec. 1435. Remitting funds to the Secretary and use of funds.
Sec. 1436. Suspension of reduced payment requirement.
Sec. 1437. Enforcement.
Sec. 1438. Audit requirements.
Sec. 1439. Study; report.
                       subpart c--administration

Sec. 1451. Duration.
Sec. 1452. Administration and enforcement.
                   PART II--Dairy Market Transparency

Sec. 1461. Dairy product mandatory reporting.
Sec. 1462. Federal milk marketing order information.
 PART III--Repeal or Reauthorization of Other Dairy-related Provisions

Sec. 1471. Repeal of dairy product price support and milk income loss 
                            contract programs.
Sec. 1472. Repeal of dairy export incentive program.
Sec. 1473. Extension of dairy forward pricing program.
Sec. 1474. Extension of dairy indemnity program.
Sec. 1475. Extension of dairy promotion and research program.
Sec. 1476. Extension of Federal Milk Marketing Order Review Commission.
              PART IV--Federal Milk Marketing Order Reform

Sec. 1481. Federal milk marketing orders.
                         PART V--Effective Date

Sec. 1491. Effective date.
   Subtitle E--Supplemental Agricultural Disaster Assistance Programs

Sec. 1501. Supplemental agricultural disaster assistance programs.
                       Subtitle F--Administration

Sec. 1601. Administration generally.
Sec. 1602. Suspension of permanent price support authority.
Sec. 1603. Payment limitations.
Sec. 1604. Payments limited to active farmers.
Sec. 1605. Adjusted gross income limitation.
Sec. 1606. Geographically disadvantaged farmers and ranchers.
Sec. 1607. Personal liability of producers for deficiencies.
Sec. 1608. Prevention of deceased individuals receiving payments under 
                            farm commodity programs.
Sec. 1609. Appeals.
Sec. 1610. Technical corrections.
Sec. 1611. Assignment of payments.
Sec. 1612. Tracking of benefits.
Sec. 1613. Signature authority.
Sec. 1614. Implementation.
                         TITLE II--CONSERVATION

                Subtitle A--Conservation Reserve Program

Sec. 2001. Extension and enrollment requirements of conservation 
                            reserve program.
Sec. 2002. Farmable wetland program.
Sec. 2003. Duties of owners and operators.
Sec. 2004. Duties of the Secretary.
Sec. 2005. Payments.
Sec. 2006. Contract requirements.
Sec. 2007. Conversion of land subject to contract to other conserving 
                            uses.
Sec. 2008. Effective date.
              Subtitle B--Conservation Stewardship Program

Sec. 2101. Conservation stewardship program.
          Subtitle C--Environmental Quality Incentives Program

Sec. 2201. Purposes.
Sec. 2202. Definitions.
Sec. 2203. Establishment and administration.
Sec. 2204. Evaluation of applications.
Sec. 2205. Duties of producers.
Sec. 2206. Limitation on payments.
Sec. 2207. Conservation innovation grants and payments.
Sec. 2208. Effective date.
         Subtitle D--Agricultural Conservation Easement Program

Sec. 2301. Agricultural Conservation Easement Program.
         Subtitle E--Regional Conservation Partnership Program

Sec. 2401. Regional Conservation Partnership Program.
                Subtitle F--Other Conservation Programs

Sec. 2501. Conservation of private grazing land.
Sec. 2502. Grassroots source water protection program.
Sec. 2503. Voluntary public access and habitat incentive program.
Sec. 2504. Agriculture conservation experienced services program.
Sec. 2505. Small watershed rehabilitation program.
Sec. 2506. Terminal lakes assistance.
                 Subtitle G--Funding and Administration

Sec. 2601. Funding.
Sec. 2602. Technical assistance.
Sec. 2603. Regional equity.
Sec. 2604. Reservation of funds to provide assistance to certain 
                            farmers or ranchers for conservation 
                            access.
Sec. 2605. Annual report on program enrollments and assistance.
Sec. 2606. Administrative requirements for conservation programs.
Sec. 2607. Rulemaking authority.
Sec. 2608. Standards for State technical committees.
Sec. 2609. Highly erodible land and wetland conservation for crop 
                            insurance.
 Subtitle H--Repeal of Superseded Program Authorities and Transitional 
                               Provisions

Sec. 2701. Comprehensive conservation enhancement program.
Sec. 2702. Emergency forestry conservation reserve program.
Sec. 2703. Wetlands reserve program.
Sec. 2704. Farmland protection program and farm viability program.
Sec. 2705. Grassland reserve program.
Sec. 2706. Agricultural water enhancement program.
Sec. 2707. Wildlife habitat incentive program.
Sec. 2708. Great Lakes basin program.
Sec. 2709. Chesapeake Bay watershed program.
Sec. 2710. Cooperative conservation partnership initiative.
Sec. 2711. Environmental easement program.
Sec. 2712. Technical amendments.
                            TITLE III--TRADE

                     Subtitle A--Food for Peace Act

Sec. 3001. Set-aside for support for organizations through which 
                            nonemergency assistance is provided.
Sec. 3002. Food aid quality.
Sec. 3003. Minimum levels of assistance.
Sec. 3004. Reauthorization of Food Aid Consultative Group.
Sec. 3005. Oversight, monitoring, and evaluation of Food for Peace Act 
                            programs.
Sec. 3006. Assistance for stockpiling and rapid transportation, 
                            delivery, and distribution of shelf-stable 
                            prepackaged foods.
Sec. 3007. Limitation on total volume of commodities monetized.
Sec. 3008. Flexibility.
Sec. 3009. Procurement, transportation, testing, and storage of 
                            agricultural commodities for prepositioning 
                            in the United States and foreign countries.
Sec. 3010. Deadline for agreements to finance sales or to provide other 
                            assistance.
Sec. 3011. Minimum level of nonemergency food assistance.
Sec. 3012. Coordination of foreign assistance programs report.
Sec. 3013. Micronutrient fortification programs.
Sec. 3014. John Ogonowski and Doug Bereuter Farmer-to-Farmer Program.
Sec. 3015. Prohibition on assistance for North Korea.
               Subtitle B--Agricultural Trade Act of 1978

Sec. 3101. Export credit guarantee programs.
Sec. 3102. Funding for market access program.
Sec. 3103. Foreign market development cooperator program.
               Subtitle C--Other Agricultural Trade Laws

Sec. 3201. Food for Progress Act of 1985.
Sec. 3202. Bill Emerson Humanitarian Trust.
Sec. 3203. Promotion of agricultural exports to emerging markets.
Sec. 3204. McGovern-Dole International Food for Education and Child 
                            Nutrition Program.
Sec. 3205. Technical assistance for specialty crops.
Sec. 3206. Global Crop Diversity Trust.
Sec. 3207. Local and regional food aid procurement projects.
Sec. 3208. Donald Payne Horn of Africa food resilience program.
Sec. 3209. Agricultural trade enhancement study.
                          TITLE IV--NUTRITION

         Subtitle A--Supplemental Nutrition Assistance Program

Sec. 4001. Food distribution program on Indian reservations.
Sec. 4002. Standard utility allowances based on the receipt of energy 
                            assistance payments.
Sec. 4003. Eligibility disqualifications.
Sec. 4004. Ending supplemental nutrition assistance program benefits 
                            for lottery or gambling winners.
Sec. 4005. Retail food stores.
Sec. 4006. Improving security of food assistance.
Sec. 4007. Technology modernization for retail food stores.
Sec. 4008. Use of benefits for purchase of community-supported 
                            agriculture share.
Sec. 4009. Restaurant meals program.
Sec. 4010. Quality control error rate determination.
Sec. 4011. Performance bonus payments.
Sec. 4012. Authorization of appropriations.
Sec. 4013. Assistance for community food projects.
Sec. 4014. Emergency food assistance.
Sec. 4015. Nutrition education.
Sec. 4016. Retail food store and recipient trafficking.
Sec. 4017. Technical and conforming amendments.
              Subtitle B--Commodity Distribution Programs

Sec. 4101. Commodity distribution program.
Sec. 4102. Commodity supplemental food program.
Sec. 4103. Distribution of surplus commodities to special nutrition 
                            projects.
Sec. 4104. Technical and conforming amendments.
                       Subtitle C--Miscellaneous

Sec. 4201. Purchase of fresh fruits and vegetables for distribution to 
                            schools and service institutions.
Sec. 4202. Seniors farmers' market nutrition program.
Sec. 4203. Nutrition information and awareness pilot program.
Sec. 4204. Whole grain products.
Sec. 4205. Hunger-free communities.
Sec. 4206. Healthy Food Financing Initiative.
Sec. 4207. Pulse crop products.
Sec. 4208. Dietary Guidelines for Americans.
Sec. 4209. Purchases of locally produced foods.
                            TITLE V--CREDIT

  Subtitle A--Farmer Loans, Servicing, and Other Assistance Under the 
              Consolidated Farm and Rural Development Act

Sec. 5001. Farmer loans, servicing, and other assistance under the 
                            Consolidated Farm and Rural Development 
                            Act.
                       Subtitle B--Miscellaneous

Sec. 5101. State agricultural mediation programs.
Sec. 5102. Loans to purchasers of highly fractionated land.
Sec. 5103. Removal of duplicative appraisals.
                      TITLE VI--RURAL DEVELOPMENT

     Subtitle A--Reorganization of the Consolidated Farm and Rural 
                            Development Act

Sec. 6001. Reorganization of the Consolidated Farm and Rural 
                            Development Act.
Sec. 6002. Conforming amendments.
                   Subtitle B--Rural Electrification

Sec. 6101. Definition of rural area.
Sec. 6102. Guarantees for bonds and notes issued for electrification or 
                            telephone purposes.
Sec. 6103. Expansion of 911 access.
Sec. 6104. Access to broadband telecommunications services in rural 
                            areas.
                       Subtitle C--Miscellaneous

Sec. 6201. Distance learning and telemedicine.
Sec. 6202. Rural energy savings program.
Sec. 6203. Funding of pending rural development loan and grant 
                            applications.
Sec. 6204. Study of rural transportation issues.
Sec. 6205. Agricultural transportation policy.
          TITLE VII--RESEARCH, EXTENSION, AND RELATED MATTERS

  Subtitle A--National Agricultural Research, Extension, and Teaching 
                           Policy Act of 1977

Sec. 7101. National Agricultural Research, Extension, Education, and 
                            Economics Advisory Board.
Sec. 7102. Specialty crop committee.
Sec. 7103. Veterinary services grant program.
Sec. 7104. Grants and fellowships for food and agriculture sciences 
                            education.
Sec. 7105. Agricultural and food policy research centers.
Sec. 7106. Education grants to Alaska Native serving institutions and 
                            Native Hawaiian serving institutions.
Sec. 7107. Nutrition education program.
Sec. 7108. Continuing animal health and disease research programs.
Sec. 7109. Grants to upgrade agricultural and food sciences facilities 
                            at 1890 land-grant colleges, including 
                            Tuskegee University.
Sec. 7110. Grants to upgrade agricultural and food sciences facilities 
                            and equipment at insular area land-grant 
                            institutions.
Sec. 7111. Hispanic-serving institutions.
Sec. 7112. Competitive grants for international agricultural science 
                            and education programs.
Sec. 7113. University research.
Sec. 7114. Extension service.
Sec. 7115. Supplemental and alternative crops.
Sec. 7116. Capacity building grants for NLGCA institutions.
Sec. 7117. Aquaculture assistance programs.
Sec. 7118. Rangeland research programs.
Sec. 7119. Special authorization for biosecurity planning and response.
Sec. 7120. Distance education and resident instruction grants program 
                            for insular area institutions of higher 
                            education.
   Subtitle B--Food, Agriculture, Conservation, and Trade Act of 1990

Sec. 7201. Best utilization of biological applications.
Sec. 7202. Integrated management systems.
Sec. 7203. Sustainable agriculture technology development and transfer 
                            program.
Sec. 7204. National training program.
Sec. 7205. National Genetics Resources Program.
Sec. 7206. National Agricultural Weather Information System.
Sec. 7207. High-priority research and extension initiatives.
Sec. 7208. Organic agriculture research and extension initiative.
Sec. 7209. Farm business management.
Sec. 7210. Regional centers of excellence.
Sec. 7211. Assistive technology program for farmers with disabilities.
Sec. 7212. National rural information center clearinghouse.
Subtitle C--Agricultural Research, Extension, and Education Reform Act 
                                of 1998

Sec. 7301. Relevance and merit of agricultural research, extension, and 
                            education funded by the Department.
Sec. 7302. Integrated research, education, and extension competitive 
                            grants program.
Sec. 7303. Support for research regarding diseases of wheat, triticale, 
                            and barley caused by Fusarium graminearum 
                            or by Tilletia indica.
Sec. 7304. Grants for youth organizations.
Sec. 7305. Specialty crop research initiative.
Sec. 7306. Food animal residue avoidance database program.
Sec. 7307. Office of pest management policy.
Sec. 7308. Authorization of regional integrated pest management 
                            centers.
                         Subtitle D--Other Laws

Sec. 7401. Critical Agricultural Materials Act.
Sec. 7402. Equity in Educational Land-Grant Status Act of 1994.
Sec. 7403. Research Facilities Act.
Sec. 7404. Competitive, Special, and Facilities Research Grant Act.
Sec. 7405. Enhanced use lease authority pilot program under Department 
                            of Agriculture Reorganization Act of 1994.
Sec. 7406. Renewable Resources Extension Act of 1978.
Sec. 7407. National Aquaculture Act of 1980.
Sec. 7408. Beginning farmer and rancher development program under Farm 
                            Security and Rural Investment Act of 2002.
         Subtitle E--Food, Conservation, and Energy Act of 2008

                     PART I--Agricultural Security

Sec. 7501. Agricultural biosecurity communication center.
Sec. 7502. Assistance to build local capacity in agricultural 
                            biosecurity planning, preparation, and 
                            response.
Sec. 7503. Research and development of agricultural countermeasures.
Sec. 7504. Agricultural biosecurity grant program.
                         PART II--Miscellaneous

Sec. 7511. Grazinglands research laboratory.
Sec. 7512. Budget submission and funding.
Sec. 7513. Natural products research program.
Sec. 7514. Sun grant program.
                       Subtitle F--Miscellaneous

Sec. 7601. Foundation for Food and Agriculture Research.
Sec. 7602. Objective and scholarly agricultural and food law research 
                            and information.
                          TITLE VIII--FORESTRY

            Subtitle A--Repeal of Certain Forestry Programs

Sec. 8001. Forest land enhancement program.
Sec. 8002. Watershed forestry assistance program.
Sec. 8003. Expired cooperative national forest products marketing 
                            program.
Sec. 8004. Hispanic-serving institution agricultural land national 
                            resources leadership program.
Sec. 8005. Tribal watershed forestry assistance program.
 Subtitle B--Reauthorization of Cooperative Forestry Assistance Act of 
                             1978 Programs

Sec. 8101. State-wide assessment and strategies for forest resources.
Sec. 8102. Forest stewardship program.
Sec. 8103. Forest Legacy Program.
Sec. 8104. Community forest and open space conservation program.
Sec. 8105. Urban and community forestry assistance.
       Subtitle C--Reauthorization of Other Forestry-related Laws

Sec. 8201. Rural revitalization technologies.
Sec. 8202. Office of International Forestry.
Sec. 8203. Insect infestations and related diseases.
Sec. 8204. Stewardship end result contracting projects.
Sec. 8205. Healthy forests reserve program.
                  Subtitle D--Miscellaneous Provisions

Sec. 8301. McIntire-Stennis Cooperative Forestry Act.
Sec. 8302. Revision of strategic plan for forest inventory and 
                            analysis.
                            TITLE IX--ENERGY

Sec. 9001. Definition of renewable chemical.
Sec. 9002. Biobased markets program.
Sec. 9003. Biorefinery, renewable chemical, and biobased product 
                            manufacturing assistance.
Sec. 9004. Repeal of repowering assistance program and transfer of 
                            remaining funds.
Sec. 9005. Bioenergy program for advanced biofuels.
Sec. 9006. Biodiesel fuel education program.
Sec. 9007. Rural Energy for America Program.
Sec. 9008. Biomass research and development.
Sec. 9009. Feedstock flexibility program for bioenergy producers.
Sec. 9010. Biomass Crop Assistance Program.
Sec. 9011. Repeal of forest biomass for energy.
Sec. 9012. Community wood energy program.
Sec. 9013. Repeal of renewable fertilizer study.
                         TITLE X--HORTICULTURE

Sec. 10001. Specialty crops market news allocation.
Sec. 10002. Repeal of grant program to improve movement of specialty 
                            crops.
Sec. 10003. Farmers market and local food promotion program.
Sec. 10004. Study on local food production and program evaluation.
Sec. 10005. Organic agriculture.
Sec. 10006. Food safety education initiatives.
Sec. 10007. Coordinated plant management program.
Sec. 10008. Specialty crop block grants.
Sec. 10009. Recordkeeping, investigations, and enforcement.
Sec. 10010. Report on honey.
Sec. 10011. Effective date.
                        TITLE XI--CROP INSURANCE

Sec. 11001. Supplemental coverage option.
Sec. 11002. Premium amounts for catastrophic risk protection.
Sec. 11003. Permanent enterprise unit.
Sec. 11004. Enterprise units for irrigated and nonirrigated crops.
Sec. 11005. Data collection.
Sec. 11006. Adjustment in actual production history to establish 
                            insurable yields.
Sec. 11007. Submission and review of policies.
Sec. 11008. Board review and approval.
Sec. 11009. Consultation.
Sec. 11010. Budget limitations on renegotiation of the standard 
                            reinsurance agreement.
Sec. 11011. Stacked income protection plan for producers of upland 
                            cotton.
Sec. 11012. Peanut revenue crop insurance.
Sec. 11013. Authority to correct errors.
Sec. 11014. Implementation.
Sec. 11015. Approval of costs for research and development.
Sec. 11016. Whole farm risk management insurance.
Sec. 11017. Study of food safety insurance.
Sec. 11018. Crop insurance for livestock.
Sec. 11019. Margin coverage for catfish.
Sec. 11020. Poultry business disruption insurance policy.
Sec. 11021. Crop insurance for organic crops.
Sec. 11022. Research and development.
Sec. 11023. Pilot programs.
Sec. 11024. Index-based weather insurance pilot program.
Sec. 11025. Enhancing producer self-help through farm financial 
                            benchmarking.
Sec. 11026. Beginning farmer and rancher provisions.
Sec. 11027. Agricultural management assistance, risk management 
                            education, and organic certification cost 
                            share assistance.
Sec. 11028. Crop production on native sod.
Sec. 11029. Technical amendments.
Sec. 11030. Greater accessibility for crop insurance.
Sec. 11031. GAO crop insurance fraud report.
Sec. 11032. Limitation on premium subsidy based on average adjusted 
                            gross income.
                        TITLE XII--MISCELLANEOUS

   Subtitle A--Socially Disadvantaged Producers and Limited Resource 
                               Producers

Sec. 12001. Outreach and assistance for socially disadvantaged farmers 
                            and ranchers and veteran farmers and 
                            ranchers.
Sec. 12002. Office of Advocacy and Outreach.
                         Subtitle B--Livestock

Sec. 12101. Wildlife reservoir zoonotic disease initiative.
Sec. 12102. Trichinae certification program.
Sec. 12103. National Aquatic Animal Health Plan.
Sec. 12104. Sheep production and marketing grant program.
Sec. 12105. Feral swine eradication pilot program.
               Subtitle C--Other Miscellaneous Provisions

Sec. 12201. Military veterans agricultural liaison.
Sec. 12202. Information gathering.
Sec. 12203. Grants to improve supply, stability, safety, and training 
                            of agricultural labor force.
Sec. 12204. Noninsured crop assistance program.
Sec. 12205. Regional economic and infrastructure development.
Sec. 12206. Canada geese removal.
Sec. 12207. Office of Tribal Relations.
Sec. 12208. Repeal of duplicative program.
Sec. 12209. Sense of the Senate.
Sec. 12210. Acer Access and Development Program.
Sec. 12211. Definition of rural area for purposes of the Housing Act of 
                            1949.
Sec. 12212. Animal welfare.
Sec. 12213. Prohibition on attending an animal fight or causing a minor 
                            to attend an animal fight; enforcement of 
                            animal fighting provisions.
Sec. 12214. Prohibiting use of presidential election campaign funds for 
                            party conventions.
Sec. 12215. Reports on effects of defense and nondefense budget 
                            sequestration.

SEC. 2. DEFINITION OF SECRETARY.

    In this Act, the term ``Secretary'' means the Secretary of 
Agriculture.

                      TITLE I--COMMODITY PROGRAMS

                    Subtitle A--Repeals and Reforms

SEC. 1101. REPEAL OF DIRECT PAYMENTS.

    (a) Repeal.--Sections 1103 and 1303 of the Food, Conservation, and 
Energy Act of 2008 (7 U.S.C. 8713, 8753) are repealed.
    (b) Continued Application for 2012 Crop Year.--Sections 1103 and 
1303 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8713, 
8753), as in effect on the day before the date of enactment of this 
Act, shall continue to apply through the 2012 crop year with respect to 
all covered commodities (as defined in section 1001 of that Act (7 
U.S.C. 8702)) (except pulse crops) and peanuts on a farm.

SEC. 1102. REPEAL OF COUNTER-CYCLICAL PAYMENTS.

    (a) Repeal.--Sections 1104 and 1304 of the Food, Conservation, and 
Energy Act of 2008 (7 U.S.C. 8714, 8754) are repealed.
    (b) Continued Application for 2012 Crop Year.--Sections 1104 and 
1304 of the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8714, 
8754), as in effect on the day before the date of enactment of this 
Act, shall continue to apply through the 2012 crop year with respect to 
all covered commodities (as defined in section 1001 of that Act (7 
U.S.C. 8702)) and peanuts on a farm.

SEC. 1103. REPEAL OF AVERAGE CROP REVENUE ELECTION PROGRAM.

    (a) Repeal.--Section 1105 of the Food, Conservation, and Energy Act 
of 2008 (7 U.S.C. 8715) is repealed.
    (b) Continued Application for 2012 Crop Year.--Section 1105 of the 
Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8715), as in 
effect on the day before the date of enactment of this Act, shall 
continue to apply through the 2012 crop year with respect to all 
covered commodities (as defined in section 1001 of that Act (7 U.S.C. 
8702)) and peanuts on a farm for which the irrevocable election under 
section 1105 of that Act is made before the date of enactment of this 
Act.

SEC. 1104. DEFINITIONS.

    In this subtitle, subtitle B, and subtitle F:
            (1) Actual crop revenue.--The term ``actual crop revenue'', 
        with respect to a covered commodity for a crop year, means the 
        amount determined by the Secretary under section 1105(c)(3).
            (2) Agriculture risk coverage guarantee.--The term 
        ``agriculture risk coverage guarantee'', with respect to a 
        covered commodity for a crop year, means the amount determined 
        by the Secretary under section 1105(c)(4).
            (3) Agriculture risk coverage payment.--The term 
        ``agriculture risk coverage payment'' means a payment under 
        section 1105(c).
            (4) Average individual yield.--The term ``average 
        individual yield'' means the yield reported by a producer for 
        purposes of subtitle A of the Federal Crop Insurance Act (7 
        U.S.C. 1501 et seq.), to the maximum extent practicable.
            (5) County coverage.--For the purposes of agriculture risk 
        coverage under section 1105, the term ``county coverage'' means 
        coverage determined using the total quantity of all acreage in 
        a county of the covered commodity that is planted or prevented 
        from being planted for harvest by a producer with the yield 
        determined by the average county yield described in subsection 
        (c) of that section.
            (6) Covered commodity.--
                    (A) In general.--The term ``covered commodity'' 
                means wheat, corn, grain sorghum, barley, oats, long 
                grain rice, medium grain rice, pulse crops, soybeans, 
                other oilseeds, and peanuts.
                    (B) Popcorn.--The Secretary--
                            (i) shall study the feasibility of 
                        including popcorn as a covered commodity by 
                        2014; and
                            (ii) if the Secretary determines it to be 
                        feasible, shall designate popcorn as a covered 
                        commodity.
            (7) Eligible acres.--
                    (A) In general.--Except as provided in 
                subparagraphs (B) through (D), the term ``eligible 
                acres'' means all acres planted or prevented from being 
                planted to all covered commodities on a farm in any 
                crop year.
                    (B) Maximum.--Except as provided in (C), the total 
                quantity of eligible acres on a farm determined under 
                subparagraph (A) shall not exceed the average total 
                acres planted or prevented from being planted to 
                covered commodities and upland cotton on the farm for 
                the 2009 through 2012 crop years, as determined by the 
                Secretary.
                    (C) Adjustment.--The Secretary shall provide for an 
                adjustment, as appropriate, in the eligible acres for 
                covered commodities for a farm if any of the following 
                circumstances occurs:
                            (i) If a conservation reserve contract for 
                        a farm in a county entered into under section 
                        1231 of the Food Security Act of 1985 (16 
                        U.S.C. 3831) expires or is voluntarily 
                        terminated or cropland is released from 
                        coverage under a conservation reserve contract, 
                        the Secretary shall provide for an adjustment, 
                        as appropriate, in the eligible acres for the 
                        farm to a total quantity that is the higher 
                        of--
                                    (I) the total base acreage for the 
                                farm, less any upland cotton base 
                                acreage, that was suspended during the 
                                conservation reserve contract; or
                                    (II) the product obtained by 
                                multiplying--
                                            (aa) the average proportion 
                                        that--

                                                    (AA) the total 
                                                number of acres planted 
                                                to covered commodities 
                                                and upland cotton in 
                                                the county for crop 
                                                years 2009 through 
                                                2012; bears to

                                                    (BB) the total 
                                                number of all acres of 
                                                covered commodities, 
                                                grassland, and upland 
                                                cotton acres in the 
                                                county for the same 
                                                crop years; by

                                            (bb) the total acres for 
                                        which coverage has expired, 
                                        voluntarily terminated, or been 
                                        released under the conservation 
                                        reserve contract.
                            (ii) The producer has eligible oilseed 
                        acreage as the result of the Secretary 
                        designating additional oilseeds, which shall be 
                        determined in the same manner as eligible 
                        oilseed acreage under section 1101(a)(1)(D) of 
                        the Food, Conservation, and Energy Act of 2008 
                        (7 U.S.C. 8711(a)(1)(D)).
                            (iii) The producer has any acreage not 
                        cropped during the 2009 through 2012 crop 
                        years, but placed into an established rotation 
                        practice for the purposes of enriching land or 
                        conserving moisture for subsequent crop years, 
                        including summer fallow, as determined by the 
                        Secretary.
                    (D) Exclusion.--The term ``eligible acres'' does 
                not include any crop subsequently planted during the 
                same crop year on the same land for which the first 
                crop is eligible for payments under this subtitle, 
                unless the crop was planted in an area approved for 
                double cropping, as determined by the Secretary.
            (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 of the species, 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) Individual coverage.--For purposes of agriculture risk 
        coverage under section 1105, the term ``individual coverage'' 
        means coverage determined using the total quantity of all 
        acreage in a county of the covered commodity that is planted or 
        prevented from being planted for harvest by a producer with the 
        yield determined by the average individual yield of the 
        producer described in subsection (c) of that section.
            (10) Medium grain rice.--The term ``medium grain rice'' 
        includes short grain rice.
            (11) Midseason price.--The term ``midseason price'' means 
        the applicable national average market price received by 
        producers for the first 5 months of the applicable marketing 
        year, as determined by the Secretary.
            (12) Other oilseed.--The term ``other oilseed'' means a 
        crop of sunflower seed, rapeseed, canola, safflower, flaxseed, 
        mustard seed, crambe, sesame seed, or any oilseed designated by 
        the Secretary.
            (13) Producer.--
                    (A) In general.--The term ``producer'' means an 
                owner, operator, landlord, tenant, or sharecropper that 
                shares in the risk of producing a crop and is entitled 
                to share in the crop available for marketing from the 
                farm, or would have shared had the crop been produced.
                    (B) Hybrid seed.--In determining whether a grower 
                of hybrid seed is a producer, the Secretary shall--
                            (i) not take into consideration the 
                        existence of a hybrid seed contract; and
                            (ii) ensure that program requirements do 
                        not adversely affect the ability of the grower 
                        to receive a payment under this title.
            (14) Pulse crop.--The term ``pulse crop'' means dry peas, 
        lentils, small chickpeas, and large chickpeas.
            (15) State.--The term ``State'' means--
                    (A) a State;
                    (B) the District of Columbia;
                    (C) the Commonwealth of Puerto Rico; and
                    (D) any other territory or possession of the United 
                States.
            (16) Transitional yield.--The term ``transitional yield'' 
        has the meaning given the term in section 502(b) of the Federal 
        Crop Insurance Act (7 U.S.C. 1502(b)).
            (17) United states.--The term ``United States'', when used 
        in a geographical sense, means all of the States.
            (18) United states premium factor.--The term ``United 
        States Premium Factor'' means the percentage by which the 
        difference in the United States loan schedule premiums for 
        Strict Middling (SM) 1\1/8\-inch upland cotton and for Middling 
        (M) 1\3/32\-inch upland cotton exceeds the difference in the 
        applicable premiums for comparable international qualities.

SEC. 1105. AGRICULTURE RISK COVERAGE.

    (a) Payments Required.--If the Secretary determines that payments 
are required under subsection (c), the Secretary shall make payments 
for each covered commodity available to producers in accordance with 
this section.
    (b) Coverage Election.--
            (1) In general.--For the period of crop years 2013 through 
        2017, the producers shall make a 1-time, irrevocable election 
        to receive--
                    (A) individual coverage under this section, as 
                determined by the Secretary; or
                    (B) in the case of a county with sufficient data 
                (as determined by the Secretary), county coverage under 
                this section.
            (2) Effect of election.--The election made under paragraph 
        (1) shall be binding on the producers making the election, 
        regardless of covered commodities planted, and applicable to 
        all acres under the operational control of the producers, in a 
        manner that--
                    (A) acres brought under the operational control of 
                the producers after the election are included; and
                    (B) acres no longer under the operational control 
                of the producers after the election are no longer 
                subject to the election of the producers but become 
                subject to the election of the subsequent producers.
            (3) Duties of the secretary.--The Secretary shall ensure 
        that producers are precluded from taking any action, including 
        reconstitution, transfer, or other similar action, that would 
        have the effect of altering or reversing the election made 
        under paragraph (1).
    (c) Agriculture Risk Coverage.--
            (1) Payments.--The Secretary shall make agriculture risk 
        coverage payments available under this subsection for each of 
        the 2013 through 2017 crop years if the Secretary determines 
        that--
                    (A) the actual crop revenue for the crop year for 
                the covered commodity; is less than
                    (B) the agriculture risk coverage guarantee for the 
                crop year for the covered commodity.
            (2) Time for payments.--If the Secretary determines under 
        this subsection that agriculture risk coverage payments are 
        required to be made for the covered commodity, the agriculture 
        risk coverage payments shall be made as soon as practicable 
        thereafter.
            (3) Actual crop revenue.--The amount of the actual crop 
        revenue for a crop year of a covered commodity shall be equal 
        to the product obtained by multiplying--
                    (A)(i) in the case of individual coverage, the 
                actual average individual yield for the covered 
                commodity, as determined by the Secretary; or
                    (ii) in the case of county coverage, the actual 
                average yield for the county for the covered commodity, 
                as determined by the Secretary; and
                    (B) the higher of--
                            (i) the midseason price; or
                            (ii) if applicable, the national marketing 
                        assistance loan rate for the covered commodity 
                        under subtitle B.
            (4) Agriculture risk coverage guarantee.--
                    (A) In general.--The agriculture risk coverage 
                guarantee for a crop year for a covered commodity shall 
                equal 89 percent of the benchmark revenue.
                    (B) Benchmark revenue.--
                            (i) In general.--The benchmark revenue 
                        shall be the product obtained by multiplying--
                                    (I)(aa) in the case of individual 
                                coverage, subject to clause (ii), the 
                                average individual yield, as determined 
                                by the Secretary, for the most recent 5 
                                crop years, excluding each of the crop 
                                years with the highest and lowest 
                                yields; or
                                    (bb) in the case of county 
                                coverage, the average county yield, as 
                                determined by the Secretary, for the 
                                most recent 5 crop years, excluding 
                                each of the crop years with the highest 
                                and lowest yields; and
                                    (II) subject to clause (iii), the 
                                average national marketing year average 
                                price for the most recent 5 crop years, 
                                excluding each of the crop years with 
                                the highest and lowest prices.
                            (ii) Use of transitional yields.--If the 
                        yield determined under clause (i)(I)(aa)--
                                    (I) for the 2012 crop year or any 
                                prior crop year, is less than 60 
                                percent of the applicable transitional 
                                yield, the Secretary shall use 60 
                                percent of the applicable transitional 
                                yield for that crop year; and
                                    (II) for the 2013 crop year and any 
                                subsequent crop year, is less than 70 
                                percent of the applicable transitional 
                                yield, the Secretary shall use 70 
                                percent of the applicable transitional 
                                yield for that crop year.
                            (iii) Special rule for rice and peanuts.--
                        If the national marketing year average price 
                        under clause (i)(II) for any of the applicable 
                        crop years is lower than the price for the 
                        covered commodity listed below, the Secretary 
                        shall use the following price for that crop 
                        year:
                                    (I) For long grain rice, $13.00 per 
                                hundredweight.
                                    (II) For medium grain rice, $13.00 
                                per hundredweight.
                                    (III) For peanuts, $530.00 per ton.
            (5) Payment rate.--The payment rate for each covered 
        commodity shall be equal to the lesser of--
                    (A) the amount that--
                            (i) the agriculture risk coverage guarantee 
                        for the covered commodity; exceeds
                            (ii) the actual crop revenue for the crop 
                        year of the covered commodity; or
                    (B) 10 percent of the benchmark revenue for the 
                crop year of the covered commodity.
            (6) Payment amount.--If agriculture risk coverage payments 
        under this subsection are required to be paid for any of the 
        2013 through 2017 crop years of a covered commodity, the amount 
        of the agriculture risk coverage payment for the crop year 
        shall be equal to the product obtained by multiplying--
                    (A) the payment rate under paragraph (5); and
                    (B)(i) in the case of individual coverage the sum 
                of--
                            (I) 65 percent of the planted eligible 
                        acres of the covered commodity; and
                            (II) 45 percent of the eligible acres that 
                        were prevented from being planted to the 
                        covered commodity; or
                    (ii) in the case of county coverage--
                            (I) 80 percent of the planted eligible 
                        acres of the covered commodity; and
                            (II) 45 percent of the eligible acres that 
                        were prevented from being planted to the 
                        covered commodity.
            (7) Duties of the secretary.--In carrying out the program 
        under this subsection, the Secretary shall--
                    (A) to the maximum extent practicable, use all 
                available information and analysis to check for 
                anomalies in the determination of payments under the 
                program;
                    (B) to the maximum extent practicable, calculate a 
                separate actual crop revenue and agriculture risk 
                coverage guarantee for irrigated and nonirrigated 
                covered commodities;
                    (C) differentiate by type or class the national 
                average price of--
                            (i) sunflower seeds;
                            (ii) barley, using malting barley values; 
                        and
                            (iii) wheat; and
                    (D) assign a yield for each acre planted or 
                prevented from being planted for the crop year for the 
                covered commodity on the basis of the yield history of 
                representative farms in the State, region, or crop 
                reporting district, as determined by the Secretary, if 
                the Secretary cannot establish the yield as determined 
                under paragraph (3)(A)(ii) or (4)(B)(i) or if the yield 
                determined under paragraph (3)(A)(ii) or (4) is an 
                unrepresentative average yield for the covered 
                commodity as determined by the Secretary.

SEC. 1106. PRODUCER AGREEMENT REQUIRED AS CONDITION OF PROVISION OF 
              PAYMENTS.

    (a) Compliance With Certain Requirements.--
            (1) Requirements.--Before the producers on a farm may 
        receive agriculture risk coverage payments, the producers shall 
        agree, during the crop year for which the payments are made and 
        in exchange for the payments--
                    (A) to 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.);
                    (B) to comply with applicable wetland protection 
                requirements under subtitle C of title XII of that Act 
                (16 U.S.C. 3821 et seq.);
                    (C) to use the land on the farm for an agricultural 
                or conserving use in a quantity equal to the 
                attributable eligible acres of the farm, and not for a 
                nonagricultural commercial, industrial, or residential 
                use, as determined by the Secretary; and
                    (D) to effectively control noxious weeds and 
                otherwise maintain the land in accordance with sound 
                agricultural practices, as determined by the Secretary, 
                if the agricultural or conserving use involves the 
                noncultivation of any portion of the land referred to 
                in subparagraph (C).
            (2) Compliance.--The Secretary may issue such rules as the 
        Secretary considers necessary to ensure producer compliance 
        with the requirements of paragraph (1).
            (3) Modification.--At the request of the transferee or 
        owner, the Secretary may modify the requirements of this 
        subsection if the modifications are consistent with the 
        objectives of this subsection, as determined by the Secretary.
    (b) Transfer or Change of Interest in Farm.--
            (1) Termination.--
                    (A) In general.--Except as provided in paragraph 
                (2), a transfer of (or change in) the interest of the 
                producers on a farm for which agriculture risk coverage 
                payments are made shall result in the termination of 
                the agriculture risk coverage payments, unless the 
                transferee or owner of the acreage agrees to assume all 
                obligations under subsection (a).
                    (B) Effective date.--The termination shall take 
                effect on the date determined by the Secretary.
            (2) Exception.--If a producer entitled to an agriculture 
        risk coverage payment dies, becomes incompetent, or is 
        otherwise unable to receive the payment, the Secretary shall 
        make the payment, in accordance with rules issued by the 
        Secretary.
    (c) Reports.--
            (1) Acreage reports.--As a condition on the receipt of any 
        benefits under this subtitle or subtitle B, the Secretary shall 
        require producers on a farm to submit to the Secretary annual 
        acreage reports with respect to all cropland on the farm.
            (2) Production reports.--As a condition on the receipt of 
        any benefits under section 1105, the Secretary shall require 
        producers on a farm to submit to the Secretary annual 
        production reports with respect to all covered commodities 
        produced on the farm.
            (3) Penalties.--No penalty with respect to benefits under 
        this subtitle or subtitle B shall be assessed against the 
        producers on a farm for an inaccurate acreage or production 
        report unless the producers on the farm knowingly and willfully 
        falsified the acreage or production report.
            (4) Data reporting.--To the maximum extent practicable, the 
        Secretary shall use data reported by the producer pursuant to 
        requirements under the Federal Crop Insurance Act (7 U.S.C. 
        1501 et seq.) to meet the obligations described in paragraphs 
        (1) and (2), without additional submissions to the Department.
    (d) Tenants and Sharecroppers.--In carrying out this subtitle, the 
Secretary shall provide adequate safeguards to protect the interests of 
tenants and sharecroppers.

SEC. 1107. PERIOD OF EFFECTIVENESS.

    Sections 1104 through 1106 shall be effective beginning with the 
2013 crop year of each covered commodity through the 2017 crop year.

SEC. 1108. ADJUSTED GROSS INCOME LIMITATION FOR CONSERVATION PROGRAMS.

    Section 1001D(b)(2)(A) of the Food Security Act of 1985 (7 U.S.C. 
1308-3a(b)(2)(A)) is amended--
            (1) by striking ``Limits.--'' and all that follows through 
        ``clause (ii),'' and inserting ``Limits.--Notwithstanding any 
        other provision of law,''; and
            (2) by striking clause (ii).

  Subtitle B--Marketing Assistance Loans and Loan Deficiency Payments

SEC. 1201. AVAILABILITY OF NONRECOURSE MARKETING ASSISTANCE LOANS FOR 
              LOAN COMMODITIES.

    (a) Definition of Loan Commodity.--In this subtitle, the term 
``loan commodity'' means wheat, corn, grain sorghum, barley, oats, 
upland cotton, extra long staple cotton, long grain rice, medium grain 
rice, peanuts, soybeans, other oilseeds, graded wool, nongraded wool, 
mohair, honey, dry peas, lentils, small chickpeas, and large chickpeas.
    (b) Nonrecourse Loans Available.--
            (1) In general.--For each of the 2013 through 2017 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.
            (2) Terms and conditions.--The marketing assistance loans 
        shall be made under terms and conditions that are prescribed by 
        the Secretary and at the loan rate established under section 
        1202 for the loan commodity.
    (c) Eligible Production.--The producers on a farm shall be eligible 
for a marketing assistance loan under subsection (b) for any quantity 
of a loan commodity produced on the farm.
    (d) Compliance With Conservation and Wetlands Requirements.--
            (1) Requirements.--Before the producers on a farm may 
        receive a marketing assistance loan or any other payment or 
        benefit under this subtitle, the producers shall agree, for the 
        crop year for which the payments are made and in exchange for 
        the payments--
                    (A) to 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.);
                    (B) to comply with applicable wetland protection 
                requirements under subtitle C of title XII of that Act 
                (16 U.S.C. 3821 et seq.);
                    (C) to use the land on the farm for an agricultural 
                or conserving use in a quantity equal to the 
                attributable eligible acres of the farm, and not for a 
                nonagricultural commercial, industrial, or residential 
                use, as determined by the Secretary; and
                    (D) to effectively control noxious weeds and 
                otherwise maintain the land in accordance with sound 
                agricultural practices, as determined by the Secretary, 
                if the agricultural or conserving use involves the 
                noncultivation of any portion of the land referred to 
                in subparagraph (C).
            (2) Compliance.--The Secretary may issue such rules as the 
        Secretary considers necessary to ensure producer compliance 
        with paragraph (1).
            (3) Modification.--At the request of a transferee or owner, 
        the Secretary may modify the requirements of this subsection if 
        the modifications are consistent with the purposes of this 
        subsection, as determined by the Secretary.
    (e) Special Rules for Peanuts.--
            (1) In general.--This subsection shall apply only to 
        producers of peanuts.
            (2) Options for obtaining loan.--A marketing assistance 
        loan under this section, and loan deficiency payments under 
        section 1205, may be obtained at the option of the producers on 
        a farm through--
                    (A) a designated marketing association or marketing 
                cooperative of producers that is approved by the 
                Secretary; or
                    (B) the Farm Service Agency.
            (3) Storage of loan peanuts.--As a condition on the 
        approval by the Secretary of an individual or entity to provide 
        storage for peanuts for which a marketing assistance loan is 
        made under this section, the individual or entity shall agree--
                    (A) to provide the storage on a nondiscriminatory 
                basis; and
                    (B) to comply with such additional requirements as 
                the Secretary considers appropriate to accomplish the 
                purposes of this section and promote fairness in the 
                administration of the benefits of this section.
            (4) Storage, handling, and associated costs.--
                    (A) In general.--To ensure proper storage of 
                peanuts for which a loan is made under this section, 
                the Secretary shall pay handling and other associated 
                costs (other than storage costs) incurred at the time 
                at which the peanuts are placed under loan, as 
                determined by the Secretary.
                    (B) Redemption and forfeiture.--The Secretary 
                shall--
                            (i) require the repayment of handling and 
                        other associated costs paid under subparagraph 
                        (A) for all peanuts pledged as collateral for a 
                        loan that is redeemed under this section; and
                            (ii) pay storage, handling, and other 
                        associated costs for all peanuts pledged as 
                        collateral that are forfeited under this 
                        section.
            (5) Marketing.--A marketing association or cooperative may 
        market peanuts for which a loan is made under this section in 
        any manner that conforms to consumer needs, including the 
        separation of peanuts by type and quality.
            (6) Reimbursable agreements and payment of administrative 
        expenses.--The Secretary may implement any reimbursable 
        agreements or provide for the payment of administrative 
        expenses under this subsection only in a manner that is 
        consistent with those activities in regard to other loan 
        commodities.

SEC. 1202. LOAN RATES FOR NONRECOURSE MARKETING ASSISTANCE LOANS.

    (a) In General.--For purposes of each of the 2013 through 2017 crop 
years, the loan rate for a marketing assistance loan under section 1201 
for a loan commodity shall be equal to the following:
            (1) In the case of wheat, $2.94 per bushel.
            (2) In the case of corn, $1.95 per bushel.
            (3) In the case of grain sorghum, $1.95 per bushel.
            (4) In the case of barley, $1.95 per bushel.
            (5) In the case of oats, $1.39 per bushel.
            (6) In the case of base quality of upland cotton, for the 
        2013 and each subsequent crop year, the simple average of the 
        adjusted prevailing world price for the 2 immediately preceding 
        marketing years, as determined by the Secretary and announced 
        October 1 preceding the next domestic plantings, but in no case 
        less than $0.47 per pound or more than $0.52 per pound.
            (7) In the case of extra long staple cotton, $0.7977 per 
        pound.
            (8) In the case of long grain rice, $6.50 per 
        hundredweight.
            (9) In the case of medium grain rice, $6.50 per 
        hundredweight.
            (10) In the case of soybeans, $5.00 per bushel.
            (11) In the case of other oilseeds, $10.09 per 
        hundredweight for each of the following kinds of oilseeds:
                    (A) Sunflower seed.
                    (B) Rapeseed.
                    (C) Canola.
                    (D) Safflower.
                    (E) Flaxseed.
                    (F) Mustard seed.
                    (G) Crambe.
                    (H) Sesame seed.
                    (I) Other oilseeds designated by the Secretary.
            (12) In the case of dry peas, $5.40 per hundredweight.
            (13) In the case of lentils, $11.28 per hundredweight.
            (14) In the case of small chickpeas, $7.43 per 
        hundredweight.
            (15) In the case of large chickpeas, $11.28 per 
        hundredweight.
            (16) In the case of graded wool, $1.15 per pound.
            (17) In the case of nongraded wool, $0.40 per pound.
            (18) In the case of mohair, $4.20 per pound.
            (19) In the case of honey, $0.69 per pound.
            (20) In the case of peanuts, $355 per ton.
    (b) Single County Loan Rate for Other Oilseeds.--The Secretary 
shall establish a single loan rate in each county for each kind of 
other oilseeds described in subsection (a)(11).

SEC. 1203. TERM OF LOANS.

    (a) Term of Loan.--In the case of each loan commodity, a marketing 
assistance loan under section 1201 shall have a term of 9 months 
beginning on the first day of the first month after the month in which 
the loan is made.
    (b) Extensions Prohibited.--The Secretary may not extend the term 
of a marketing assistance loan for any loan commodity.

SEC. 1204. REPAYMENT OF LOANS.

    (a) General Rule.--The Secretary shall permit the producers on a 
farm to repay a marketing assistance loan under section 1201 for a loan 
commodity (other than upland cotton, long grain rice, medium grain 
rice, extra long staple cotton, peanuts and confectionery and each 
other kind of sunflower seed (other than oil sunflower seed)) at a rate 
that is the lesser of--
            (1) the loan rate established for the commodity under 
        section 1202, plus interest (determined in accordance with 
        section 163 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7283));
            (2) a rate (as determined by the Secretary) that--
                    (A) is calculated based on average market prices 
                for the loan commodity during the preceding 30-day 
                period; and
                    (B) will minimize discrepancies in marketing loan 
                benefits across State boundaries and across county 
                boundaries; or
            (3) a rate that the Secretary may develop using alternative 
        methods for calculating a repayment rate for a loan commodity 
        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;
                    (D) allow the commodity produced in the United 
                States to be marketed freely and competitively, both 
                domestically and internationally; and
                    (E) minimize discrepancies in marketing loan 
                benefits across State boundaries and across county 
                boundaries.
    (b) Repayment Rates for Upland Cotton, Long Grain Rice, and Medium 
Grain Rice.--The Secretary shall permit producers to repay a marketing 
assistance loan under section 1201 for upland cotton, long grain rice, 
and medium grain rice at a rate that is the lesser of--
            (1) the loan rate established for the commodity under 
        section 1202, plus interest (determined in accordance with 
        section 163 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7283)); or
            (2) the prevailing world market price for the commodity, as 
        determined and adjusted by the Secretary in accordance with 
        this section.
    (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 1202, plus 
interest (determined in accordance with section 163 of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283)).
    (d) Prevailing World Market Price.--For purposes of this section 
and section 1207, the Secretary shall prescribe by regulation--
            (1) a formula to determine the prevailing world market 
        price for each of upland cotton, long grain rice, and medium 
        grain rice; and
            (2) a mechanism by which the Secretary shall announce 
        periodically those prevailing world market prices.
    (e) Adjustment of Prevailing World Market Price for Upland Cotton, 
Long Grain Rice, and Medium Grain Rice.--
            (1) Rice.--The prevailing world market price for long grain 
        rice and medium grain rice determined under subsection (d) 
        shall be adjusted to United States quality and location.
            (2) Cotton.--The prevailing world market price for upland 
        cotton determined under subsection (d)--
                    (A) shall be adjusted to United States quality and 
                location, with the adjustment to include--
                            (i) a reduction equal to any United States 
                        Premium Factor for upland cotton of a quality 
                        higher than Middling (M) 1\3/32\-inch; and
                            (ii) the average costs to market the 
                        commodity, including average transportation 
                        costs, as determined by the Secretary; and
                    (B) may be further adjusted, during the period 
                beginning on the date of enactment of this Act and 
                ending on July 31, 2018, if the Secretary determines 
                the adjustment is necessary--
                            (i) to minimize potential loan forfeitures;
                            (ii) to minimize the accumulation of stocks 
                        of upland cotton by the Federal Government;
                            (iii) to ensure that upland cotton produced 
                        in the United States can be marketed freely and 
                        competitively, both domestically and 
                        internationally; and
                            (iv) to ensure an appropriate transition 
                        between current-crop and forward-crop price 
                        quotations, except that the Secretary may use 
                        forward-crop price quotations prior to July 31 
                        of a marketing year only if--
                                    (I) there are insufficient current-
                                crop price quotations; and
                                    (II) the forward-crop price 
                                quotation is the lowest such quotation 
                                available.
            (3) Guidelines for additional adjustments.--In making 
        adjustments under this subsection, the Secretary shall 
        establish a mechanism for determining and announcing the 
        adjustments in order to avoid undue disruption in the United 
        States market.
    (f) Repayment Rates for Confectionery and Other Kinds of Sunflower 
Seeds.--The Secretary shall permit the producers on a farm to repay a 
marketing assistance loan under section 1201 for confectionery and each 
other kind of sunflower seed (other than oil sunflower seed) at a rate 
that is the lesser of--
            (1) the loan rate established for the commodity under 
        section 1202, plus interest (determined in accordance with 
        section 163 of the Federal Agriculture Improvement and Reform 
        Act of 1996 (7 U.S.C. 7283)); or
            (2) the repayment rate established for oil sunflower seed.
    (g) Payment of Cotton Storage Costs.--Effective for each of the 
2013 through 2017 crop years, the Secretary shall make cotton storage 
payments available in the same manner, and at the same rates as the 
Secretary provided storage payments for the 2006 crop of cotton, except 
that the rates shall be reduced by 20 percent.
    (h) Repayment Rate for Peanuts.--The Secretary shall permit 
producers on a farm to repay a marketing assistance loan for peanuts 
under subsection (a) at a rate that is the lesser of--
            (1) the loan rate established for peanuts under subsection 
        (b), plus interest (determined in accordance with section 163 
        of the Federal Agriculture Improvement and Reform Act of 1996 
        (7 U.S.C. 7283)); or
            (2) a rate that the Secretary determines will--
                    (A) minimize potential loan forfeitures;
                    (B) minimize the accumulation of stocks of peanuts 
                by the Federal Government;
                    (C) minimize the cost incurred by the Federal 
                Government in storing peanuts; and
                    (D) allow peanuts produced in the United States to 
                be marketed freely and competitively, both domestically 
                and internationally.
    (i) Authority to Temporarily Adjust Repayment Rates.--
            (1) Adjustment authority.--In the event of a severe 
        disruption to marketing, transportation, or related 
        infrastructure, the Secretary may modify the repayment rate 
        otherwise applicable under this section for marketing 
        assistance loans under section 1201 for a loan commodity.
            (2) Duration.--Any adjustment made under paragraph (1) in 
        the repayment rate for marketing assistance loans for a loan 
        commodity shall be in effect on a short-term and temporary 
        basis, as determined by the Secretary.

SEC. 1205. LOAN DEFICIENCY PAYMENTS.

    (a) Availability of Loan Deficiency Payments.--
            (1) In general.--Except as provided in subsection (d), the 
        Secretary may make loan deficiency payments available to 
        producers on a farm that, although eligible to obtain a 
        marketing assistance loan under section 1201 with respect to a 
        loan commodity, agree to forgo obtaining the loan for the 
        commodity in return for loan deficiency payments under this 
        section.
            (2) Unshorn pelts, hay, and silage.--
                    (A) Marketing assistance loans.--Subject to 
                subparagraph (B), nongraded wool in the form of unshorn 
                pelts and hay and silage derived from a loan commodity 
                are not eligible for a marketing assistance loan under 
                section 1201.
                    (B) Loan deficiency payment.--Effective for the 
                2013 through 2017 crop years, the Secretary may make 
                loan deficiency payments available under this section 
                to producers on a farm that produce unshorn pelts or 
                hay and silage derived from a loan commodity.
    (b) Computation.--A loan deficiency payment for a loan commodity or 
commodity referred to in subsection (a)(2) shall be equal to the 
product obtained by multiplying--
            (1) the payment rate determined under subsection (c) for 
        the commodity; by
            (2) the quantity of the commodity produced by the eligible 
        producers, excluding any quantity for which the producers 
        obtain a marketing assistance loan under section 1201.
    (c) Payment Rate.--
            (1) In general.--In the case of a loan commodity, the 
        payment rate shall be the amount by which--
                    (A) the loan rate established under section 1202 
                for the loan commodity; exceeds
                    (B) the rate at which a marketing assistance loan 
                for the loan commodity may be repaid under section 
                1204.
            (2) Unshorn pelts.--In the case of unshorn pelts, the 
        payment rate shall be the amount by which--
                    (A) the loan rate established under section 1202 
                for ungraded wool; exceeds
                    (B) the rate at which a marketing assistance loan 
                for ungraded wool may be repaid under section 1204.
            (3) Hay and silage.--In the case of hay or silage derived 
        from a loan commodity, the payment rate shall be the amount by 
        which--
                    (A) the loan rate established under section 1202 
                for the loan commodity from which the hay or silage is 
                derived; exceeds
                    (B) the rate at which a marketing assistance loan 
                for the loan commodity may be repaid under section 
                1204.
    (d) Exception for Extra Long Staple Cotton.--This section shall not 
apply with respect to extra long staple cotton.
    (e) Effective Date for Payment Rate Determination.--The Secretary 
shall determine the amount of the loan deficiency payment to be made 
under this section to the producers on a farm with respect to a 
quantity of a loan commodity or commodity referred to in subsection 
(a)(2) using the payment rate in effect under subsection (c) as of the 
date the producers request the payment.

SEC. 1206. PAYMENTS IN LIEU OF LOAN DEFICIENCY PAYMENTS FOR GRAZED 
              ACREAGE.

    (a) Eligible Producers.--
            (1) In general.--Effective for the 2013 through 2017 crop 
        years, in the case of a producer that would be eligible for a 
        loan deficiency payment under section 1205 for wheat, barley, 
        or oats, but that elects to use acreage planted to the wheat, 
        barley, or oats for the grazing of livestock, the Secretary 
        shall make a payment to the producer under this section if the 
        producer enters into an agreement with the Secretary to forgo 
        any other harvesting of the wheat, barley, or oats on that 
        acreage.
            (2) Grazing of triticale acreage.--Effective for the 2013 
        through 2017 crop years, with respect to a producer on a farm 
        that uses acreage planted to triticale for the grazing of 
        livestock, the Secretary shall make a payment to the producer 
        under this section if the producer enters into an agreement 
        with the Secretary to forgo any other harvesting of triticale 
        on that acreage.
    (b) Payment Amount.--
            (1) In general.--The amount of a payment made under this 
        section to a producer on a farm described in subsection (a)(1) 
        shall be equal to the amount determined by multiplying--
                    (A) the loan deficiency payment rate determined 
                under section 1205(c) in effect, as of the date of the 
                agreement, for the county in which the farm is located; 
                by
                    (B) the payment quantity determined by 
                multiplying--
                            (i) the quantity of the grazed acreage on 
                        the farm with respect to which the producer 
                        elects to forgo harvesting of wheat, barley, or 
                        oats; and
                            (ii)(I) the yield in effect for the 
                        calculation of agriculture risk coverage 
                        payments under subtitle A with respect to that 
                        loan commodity on the farm; or
                            (II) in the case of a farm without a 
                        payment yield for that loan commodity, an 
                        appropriate yield established by the Secretary.
            (2) Grazing of triticale acreage.--The amount of a payment 
        made under this section to a producer on a farm described in 
        subsection (a)(2) shall be equal to the amount determined by 
        multiplying--
                    (A) the loan deficiency payment rate determined 
                under section 1205(c) in effect for wheat, as of the 
                date of the agreement, for the county in which the farm 
                is located; by
                    (B) the payment quantity determined by 
                multiplying--
                            (i) the quantity of the grazed acreage on 
                        the farm with respect to which the producer 
                        elects to forgo harvesting of triticale; and
                            (ii)(I) the yield in effect for the 
                        calculation of agriculture risk coverage 
                        payments under subtitle A with respect to wheat 
                        on the farm; or
                            (II) in the case of a farm without a 
                        payment yield for wheat, an appropriate yield 
                        established by the Secretary in a manner 
                        consistent with section 1102 of the Food, 
                        Conservation, and Energy Act of 2008 (7 U.S.C. 
                        8712).
    (c) Time, Manner, and Availability of Payment.--
            (1) Time and manner.--A payment under this section shall be 
        made at the same time and in the same manner as loan deficiency 
        payments are made under section 1205.
            (2) Availability.--
                    (A) In general.--The Secretary shall establish an 
                availability period for the payments authorized by this 
                section.
                    (B) Certain commodities.--In the case of wheat, 
                barley, and oats, the availability period shall be 
                consistent with the availability period for the 
                commodity established by the Secretary for marketing 
                assistance loans authorized by this subtitle.
    (d) Prohibition on Crop Insurance Indemnity or Noninsured Crop 
Assistance.--A 2013 through 2017 crop of wheat, barley, oats, or 
triticale planted on acreage that a producer elects, in the agreement 
required by subsection (a), to use for the grazing of livestock in lieu 
of any other harvesting of the crop shall not be eligible for an 
indemnity under a policy or plan of insurance authorized under the 
Federal Crop Insurance Act (7 U.S.C. 1501 et seq.) or noninsured crop 
assistance under section 196 of the Federal Agriculture Improvement and 
Reform Act of 1996 (7 U.S.C. 7333).

SEC. 1207. SPECIAL MARKETING LOAN PROVISIONS FOR UPLAND COTTON.

    (a) Special Import Quota.--
            (1) Definition of special import quota.--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.
            (2) Establishment.--
                    (A) In general.--The President shall carry out an 
                import quota program during the period beginning on 
                August 1, 2013, and ending on July 31, 2018, as 
                provided in this subsection.
                    (B) Program requirements.--Whenever the Secretary 
                determines and announces that for any consecutive 4-
                week period, the Friday through Thursday average price 
                quotation for the lowest-priced United States growth, 
                as quoted for Middling (M) 1\3/32\-inch cotton, 
                delivered to a definable and significant international 
                market, as determined by the Secretary, exceeds the 
                prevailing world market price, there shall immediately 
                be in effect a special import quota.
            (3) Quantity.--The quota shall be equal to the consumption 
        during a 1-week period of cotton by domestic mills at the 
        seasonally adjusted average rate of the most recent 3 months 
        for which official data of the Department of Agriculture or 
        other data are available.
            (4) Application.--The quota shall apply to upland cotton 
        purchased not later than 90 days after the date of the 
        Secretary's announcement under paragraph (2) and entered into 
        the United States not later than 180 days after that date.
            (5) Overlap.--A special quota period may be established 
        that overlaps any existing quota period if required by 
        paragraph (2), except that a special quota period may not be 
        established under this subsection if a quota period has been 
        established under subsection (b).
            (6) 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.
            (7) Limitation.--The quantity of cotton entered into the 
        United States during any marketing year under the special 
        import quota established under this subsection may not exceed 
        the equivalent of 10 week's consumption of upland cotton by 
        domestic mills at the seasonally adjusted average rate of the 3 
        months immediately preceding the first special import quota 
        established in any marketing year.
    (b) Limited Global Import Quota for Upland Cotton.--
            (1) Definitions.--In this subsection:
                    (A) Demand.--The term ``demand'' means--
                            (i) the average seasonally adjusted annual 
                        rate of domestic mill consumption of cotton 
                        during the most recent 3 months for which 
                        official data of the Department of Agriculture 
                        (as determined by the Secretary) are available; 
                        and
                            (ii) the larger of--
                                    (I) average exports of upland 
                                cotton during the preceding 6 marketing 
                                years; or
                                    (II) cumulative exports of upland 
                                cotton plus outstanding export sales 
                                for the marketing year in which the 
                                quota is established.
                    (B) 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.
                    (C) Supply.--The term ``supply'' means, using the 
                latest official data of the Department of Agriculture--
                            (i) the carryover 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.
            (2) Program.--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 the 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 official data of the 
                Department of Agriculture are available or as estimated 
                by the Secretary.
                    (B) Quantity if prior quota.--If a quota has been 
                established under this subsection during the preceding 
                12 months, the quantity of the quota next established 
                under this subsection shall be the smaller of 21 days 
                of domestic mill consumption calculated under 
                subparagraph (A) or the quantity required to increase 
                the supply to 130 percent of the demand.
                    (C) Preferential tariff treatment.--The quantity 
                under a limited global import quota shall be considered 
                to be an in-quota quantity for purposes of--
                            (i) section 213(d) of the Caribbean Basin 
                        Economic Recovery Act (19 U.S.C. 2703(d));
                            (ii) section 204 of the Andean Trade 
                        Preference Act (19 U.S.C. 3203);
                            (iii) section 503(d) of the Trade Act of 
                        1974 (19 U.S.C. 2463(d)); and
                            (iv) General Note 3(a)(iv) to the 
                        Harmonized Tariff Schedule.
                    (D) 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.
            (3) No overlap.--Notwithstanding paragraph (2), a quota 
        period may not be established that overlaps an existing quota 
        period or a special quota period established under subsection 
        (a).
    (c) Economic Adjustment Assistance to Users of Upland Cotton.--
            (1) In general.--Subject to paragraph (2), the Secretary 
        shall, on a monthly basis, make economic adjustment assistance 
        available to domestic users of upland cotton in the form of 
        payments for all documented use of that upland cotton during 
        the previous monthly period regardless of the origin of the 
        upland cotton.
            (2) Value of assistance.--Effective beginning on August 1, 
        2012, the value of the assistance provided under paragraph (1) 
        shall be 3 cents per pound.
            (3) Allowable purposes.--Economic adjustment assistance 
        under this subsection shall be made available only to domestic 
        users of upland cotton that certify that the assistance shall 
        be used only to acquire, construct, install, modernize, 
        develop, convert, or expand land, plant, buildings, equipment, 
        facilities, or machinery.
            (4) Review or audit.--The Secretary may conduct such review 
        or audit of the records of a domestic user under this 
        subsection as the Secretary determines necessary to carry out 
        this subsection.
            (5) Improper use of assistance.--If the Secretary 
        determines, after a review or audit of the records of the 
        domestic user, that economic adjustment assistance under this 
        subsection was not used for the purposes specified in paragraph 
        (3), the domestic user shall be--
                    (A) liable for the repayment of the assistance to 
                the Secretary, plus interest, as determined by the 
                Secretary; and
                    (B) ineligible to receive assistance under this 
                subsection for a period of 1 year following the 
                determination of the Secretary.

SEC. 1208. SPECIAL COMPETITIVE PROVISIONS FOR EXTRA LONG STAPLE COTTON.

    (a) Competitiveness Program.--Notwithstanding any other provision 
of law, during the period beginning on the date of enactment of this 
Act through July 31, 2018, the Secretary shall carry out a program--
            (1) to maintain and expand the domestic use of extra long 
        staple cotton produced in the United States;
            (2) to increase exports of extra long staple cotton 
        produced in the United States; and
            (3) to ensure that extra long staple cotton produced in the 
        United States remains competitive in world markets.
    (b) Payments Under Program; Trigger.--Under the program, the 
Secretary shall make payments available under this section whenever--
            (1) for a consecutive 4-week period, the world market price 
        for the lowest priced competing growth of extra long staple 
        cotton (adjusted to United States quality and location and for 
        other factors affecting the competitiveness of such cotton), as 
        determined by the Secretary, is below the prevailing United 
        States price for a competing growth of extra long staple 
        cotton; and
            (2) the lowest priced competing growth of extra long staple 
        cotton (adjusted to United States quality and location and for 
        other factors affecting the competitiveness of such cotton), as 
        determined by the Secretary, is less than 134 percent of the 
        loan rate for extra long staple cotton.
    (c) Eligible Recipients.--The Secretary shall make payments 
available under this section to domestic users of extra long staple 
cotton produced in the United States and exporters of extra long staple 
cotton produced in the United States that enter into an agreement with 
the Commodity Credit Corporation to participate in the program under 
this section.
    (d) Payment Amount.--Payments under this section shall be based on 
the amount of the difference in the prices referred to in subsection 
(b)(1) during the fourth week of the consecutive 4-week period 
multiplied by the amount of documented purchases by domestic users and 
sales for export by exporters made in the week following such a 
consecutive 4-week period.

SEC. 1209. AVAILABILITY OF RECOURSE LOANS FOR HIGH MOISTURE FEED GRAINS 
              AND SEED COTTON.

    (a) High Moisture Feed Grains.--
            (1) Definition of high moisture state.--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 1201.
            (2) Recourse loans available.--For each of the 2013 through 
        2017 crops of corn and grain sorghum, the Secretary shall make 
        available recourse loans, as determined by the Secretary, to 
        producers on a farm that--
                    (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 the producers on the farm 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.
            (3) 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 farm of the 
                producer; by
                    (B) the lower of the actual average yield used to 
                make payments under subtitle A 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.
    (b) Recourse Loans Available for Seed Cotton.--For each of the 2013 
through 2017 crops of upland cotton and 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 (determined in accordance with section 163 of 
the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7283)).

SEC. 1210. ADJUSTMENTS OF LOANS.

    (a) Adjustment Authority.--Subject to subsection (e), the Secretary 
may make appropriate adjustments in the loan rates for any loan 
commodity (other than cotton) for differences in grade, type, quality, 
location, and other factors.
    (b) Manner of Adjustment.--The adjustments under subsection (a) 
shall, to the maximum extent practicable, be made in such a 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 in accordance with this subtitle and subtitles C through E.
    (c) Adjustment on County Basis.--
            (1) In general.--The Secretary may establish loan rates for 
        a crop for producers in individual counties in a manner that 
        results in the lowest loan rate being 95 percent of the 
        national average loan rate, if those loan rates do not result 
        in an increase in outlays.
            (2) Prohibition.--Adjustments under this subsection shall 
        not result in an increase in the national average loan rate for 
        any year.
    (d) Adjustment in Loan Rate for Cotton.--
            (1) In general.--The Secretary may make appropriate 
        adjustments in the loan rate for cotton for differences in 
        quality factors.
            (2) Revisions to quality adjustments for upland cotton.--
                    (A) In general.--Not later than 180 days after the 
                date of enactment of this Act, the Secretary shall 
                implement revisions in the administration of the 
                marketing assistance loan program for upland cotton to 
                more accurately and efficiently reflect market values 
                for upland cotton.
                    (B) Mandatory revisions.--Revisions under 
                subparagraph (A) shall include--
                            (i) the elimination of warehouse location 
                        differentials;
                            (ii) the establishment of differentials for 
                        the various quality factors and staple lengths 
                        of cotton based on a 3-year, weighted moving 
                        average of the weighted designated spot market 
                        regions, as determined by regional production;
                            (iii) the elimination of any artificial 
                        split in the premium or discount between upland 
                        cotton with a 32 or 33 staple length due to 
                        micronaire; and
                            (iv) a mechanism to ensure that no premium 
                        or discount is established that exceeds the 
                        premium or discount associated with a leaf 
                        grade that is 1 better than the applicable 
                        color grade.
                    (C) Discretionary revisions.--Revisions under 
                subparagraph (A) may include--
                            (i) the use of non-spot market price data, 
                        in addition to spot market price data, that 
                        would enhance the accuracy of the price 
                        information used in determining quality 
                        adjustments under this subsection;
                            (ii) adjustments in the premiums or 
                        discounts associated with upland cotton with a 
                        staple length of 33 or above due to micronaire 
                        with the goal of eliminating any unnecessary 
                        artificial splits in the calculations of the 
                        premiums or discounts; and
                            (iii) such other adjustments as the 
                        Secretary determines appropriate, after 
                        consultations conducted in accordance with 
                        paragraph (3).
            (3) Consultation with private sector.--
                    (A) Prior to revision.--In making adjustments to 
                the loan rate for cotton (including any review of the 
                adjustments) as provided in this subsection, the 
                Secretary shall consult with representatives of the 
                United States cotton industry.
                    (B) Inapplicability of federal advisory committee 
                act.--The Federal Advisory Committee Act (5 U.S.C. 
                App.) shall not apply to consultations under this 
                subsection.
            (4) Review of adjustments.--The Secretary may review the 
        operation of the upland cotton quality adjustments implemented 
        pursuant to this subsection and may make further revisions to 
        the administration of the loan program for upland cotton, by--
                    (A) revoking or revising any actions taken under 
                paragraph (2)(B); or
                    (B) revoking or revising any actions taken or 
                authorized to be taken under paragraph (2)(C).
    (e) Rice.--The Secretary shall not make adjustments in the loan 
rates for long grain rice and medium grain rice, except for differences 
in grade and quality (including milling yields).

                           Subtitle C--Sugar

SEC. 1301. SUGAR PROGRAM.

    (a) Continuation of Current Program and Loan Rates.--
            (1) Sugarcane.--Section 156(a)(5) of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
        7272(a)(5)) is amended by striking ``the 2012 crop year'' and 
        inserting ``each of the 2012 through 2017 crop years''.
            (2) Sugar beets.--Section 156(b)(2) of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
        7272(b)(2)) is amended by striking ``2012'' and inserting 
        ``2017''.
            (3) Effective period.--Section 156(i) of the Federal 
        Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
        7272(i)) is amended by striking ``2012'' and inserting 
        ``2017''.
    (b) Flexible Marketing Allotments for Sugar.--
            (1) Sugar estimates.--Section 359b(a)(1) of the 
        Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb(a)(1)) is 
        amended by striking ``2012'' and inserting ``2017''.
            (2) Sugar import quota adjustment date.--Section 359k(b) of 
        the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359kk(b)) is 
        amended--
                    (A) by striking ``April 1'' each place it appears 
                and inserting ``February 1''; and
                    (B) by striking ``April 1'' each place it appears 
                and inserting ``February 1''.
            (3) Effective period.--Section 359l(a) of the Agricultural 
        Adjustment Act of 1938 (7 U.S.C. 1359ll(a)) is amended by 
        striking ``2012'' and inserting ``2017''.

                           Subtitle D--Dairy

      PART I--DAIRY PRODUCTION MARGIN PROTECTION AND DAIRY MARKET 
                         STABILIZATION PROGRAMS

SEC. 1401. DEFINITIONS.

    In this part:
            (1) Actual dairy production margin.--The term ``actual 
        dairy production margin'' means the difference between the all-
        milk price and the average feed cost, as calculated under 
        section 1402.
            (2) All-milk price.--The term ``all-milk price'' means the 
        average price received, per hundredweight of milk, by dairy 
        operations for all milk sold to plants and dealers in the 
        United States, as determined by the Secretary.
            (3) Annual production history.--The term ``annual 
        production history'' means the production history determined 
        for a participating dairy operation under section 1413(b) 
        whenever the participating dairy operation purchases 
        supplemental production margin protection.
            (4) Average feed cost.--The term ``average feed cost'' 
        means the average cost of feed used by a dairy operation to 
        produce a hundredweight of milk, determined under section 1402 
        using the sum of the following:
                    (A) The product determined by multiplying 1.0728 by 
                the price of corn per bushel.
                    (B) The product determined by multiplying 0.00735 
                by the price of soybean meal per ton.
                    (C) The product determined by multiplying 0.0137 by 
                the price of alfalfa hay per ton.
            (5) Basic production history.--The term ``basic production 
        history'' means the production history determined for a 
        participating dairy operation under section 1413(a) for 
        provision of basic production margin protection.
            (6) Consecutive 2-month period.--The term ``consecutive 2-
        month period'' refers to the 2-month period consisting of the 
        months of January and February, March and April, May and June, 
        July and August, September and October, or November and 
        December, respectively.
            (7) Dairy operation.--
                    (A) In general.--The term ``dairy operation'' 
                means, as determined by the Secretary, 1 or more dairy 
                producers that produce and market milk as a single 
                dairy operation in which each dairy producer--
                            (i) shares in the pooling of resources and 
                        a common ownership structure;
                            (ii) is at risk in the production of milk 
                        on the dairy operation; and
                            (iii) contributes land, labor, management, 
                        equipment, or capital to the dairy operation.
                    (B) Additional ownership structures.--The Secretary 
                shall determine additional ownership structures to be 
                covered by the definition of dairy operation.
            (8) Handler.--
                    (A) In general.--The term ``handler'' means the 
                initial individual or entity making payment to a dairy 
                operation for milk produced in the United States and 
                marketed for commercial use.
                    (B) Producer-handler.--The term includes a 
                ``producer-handler'' when the producer satisfies the 
                definition in subparagraph (A).
            (9) Participating dairy operation.--The term 
        ``participating dairy operation'' means a dairy operation 
        that--
                    (A) signs up under section 1412 to participate in 
                the production margin protection program under subpart 
                A; and
                    (B) as a result, also participates in the 
                stabilization program under subpart B.
            (10) Production margin protection program.--The term 
        ``production margin protection program'' means the dairy 
        production margin protection program required by subpart A.
            (11) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (12) Stabilization program.--The term ``stabilization 
        program'' means the dairy market stabilization program required 
        by subpart B for all participating dairy operations.
            (13) Stabilization program base.--The term ``stabilization 
        program base'', with respect to a participating dairy 
        operation, means the stabilization program base calculated for 
        the participating dairy operation under section 1431(b).
            (14) United states.--The term ``United States'', in a 
        geographical sense, means the 50 States, the District of 
        Columbia, American Samoa, Guam, the Commonwealth of the 
        Northern Mariana Islands, the Commonwealth of Puerto Rico, the 
        Virgin Islands of the United States, and any other territory or 
        possession of the United States.

SEC. 1402. CALCULATION OF AVERAGE FEED COST AND ACTUAL DAIRY PRODUCTION 
              MARGINS.

    (a) Calculation of Average Feed Cost.--The Secretary shall 
calculate the national average feed cost for each month using the 
following data:
            (1) The price of corn for a month shall be the price 
        received during that month by farmers in the United States for 
        corn, as reported in the monthly Agricultural Prices report by 
        the Secretary.
            (2) The price of soybean meal for a month shall be the 
        central Illinois price for soybean meal, as reported in the 
        Market News-Monthly Soybean Meal Price Report by the Secretary.
            (3) The price of alfalfa hay for a month shall be the price 
        received during that month by farmers in the United States for 
        alfalfa hay, as reported in the monthly Agricultural Prices 
        report by the Secretary.
    (b) Calculation of Actual Dairy Production Margins.--
            (1) Production margin protection program.--For use in the 
        production margin protection program under subpart A, the 
        Secretary shall calculate the actual dairy production margin 
        for each consecutive 2-month period by subtracting--
                    (A) the average feed cost for that consecutive 2-
                month period, determined in accordance with subsection 
                (a); from
                    (B) the all-milk price for that consecutive 2-month 
                period.
            (2) Stabilization program.--For use in the stabilization 
        program under subpart B, the Secretary shall calculate each 
        month the actual dairy production margin for the preceding 
        month by subtracting--
                    (A) the average feed cost for that preceding month, 
                determined in accordance with subsection (a); from
                    (B) the all-milk price for that preceding month.
            (3) Time for calculations.--The calculations required by 
        paragraphs (1) and (2) shall be made as soon as practicable 
        using the full month price of the applicable reference month.

         Subpart A--Dairy Production Margin Protection Program

SEC. 1411. ESTABLISHMENT OF DAIRY PRODUCTION MARGIN PROTECTION PROGRAM.

    Effective not later than 120 days after the effective date of this 
subtitle, the Secretary shall establish and administer a dairy 
production margin protection program under which participating dairy 
operations are paid--
            (1) basic production margin protection program payments 
        under section 1414 when actual dairy production margins are 
        less than the threshold levels for such payments; and
            (2) supplemental production margin protection program 
        payments under section 1415 if purchased by a participating 
        dairy operation.

SEC. 1412. PARTICIPATION OF DAIRY OPERATIONS IN PRODUCTION MARGIN 
              PROTECTION PROGRAM.

    (a) Eligibility.--All dairy operations in the United States shall 
be eligible to participate in the production margin protection program, 
except that a participating dairy operation shall be required to 
register with the Secretary before the participating dairy operation 
may receive--
            (1) basic production margin protection program payments 
        under section 1414; and
            (2) if the participating dairy operation purchases 
        supplemental production margin protection under section 1415, 
        supplemental production margin protection program payments 
        under such section.
    (b) Registration Process.--
            (1) In general.--The Secretary shall specify the manner and 
        form by which a participating dairy operation may register to 
        participate in the production margin protection program.
            (2) Treatment of multiproducer dairy operations.--If a 
        participating dairy operation is operated by more than 1 dairy 
        producer, all of the dairy producers of the participating dairy 
        operation shall be treated as a single dairy operation for 
        purposes of--
                    (A) registration to receive basic production margin 
                protection and election to purchase supplemental 
                production margin protection;
                    (B) payment of the participation fee under 
                subsection (d) and producer premiums under section 
                1415; and
                    (C) participation in the stabilization program 
                under subtitle B.
            (3) Treatment of producers with multiple dairy 
        operations.--If a dairy producer operates 2 or more dairy 
        operations, each dairy operation of the producer shall 
        separately register to receive basic production margin 
        protection and purchase supplemental production margin 
        protection and only those dairy operations so registered shall 
        be covered by the stabilization program.
    (c) Time for Registration.--
            (1) Existing dairy operations.--During the 15-month period 
        beginning on the date of the initiation of the registration 
        period for the production margin protection program, a dairy 
        operation that is actively engaged as of such date may register 
        with the Secretary--
                    (A) to receive basic production margin protection; 
                and
                    (B) if the dairy operation elects, to purchase 
                supplemental production margin protection.
            (2) New entrants.--A dairy producer that has no existing 
        interest in a dairy operation as of the date of the initiation 
        of the registration period for the production margin protection 
        program, but that, after such date, establishes a new dairy 
        operation, may register with the Secretary during the 1-year 
        period beginning on the date on which the dairy operation first 
        markets milk commercially--
                    (A) to receive basic production margin protection; 
                and
                    (B) if the dairy operation elects, to purchase 
                supplemental production margin protection.
    (d) Transition From MILC to Production Margin Protection.--
            (1) Definition of transition period.--In this subsection, 
        the term ``transition period'' means the period during which 
        the milk income loss program established under section 1506 of 
        the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) 
        and the production margin protection program under this 
        subtitle are both in existence.
            (2) Notice of availability.--Not later than 30 days after 
        the date of enactment of this Act, the Secretary shall publish 
        a notice in the Federal Register to inform dairy operations of 
        the availability of basic production margin protection and 
        supplemental production margin protection, including the terms 
        of the protection and information about the option of dairy 
        operations during the transition period to make an election 
        described in paragraph (3).
            (3) Election.--Except as provided in paragraph (4), a dairy 
        operation may elect to participate in either the milk income 
        loss program established under section 1506 of the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8773) or the 
        production margin protection program under this subtitle for 
        the duration of the transition period.
            (4) Transfer to production margin protection.--A dairy 
        operation that elects to participate in the milk income loss 
        program established under section 1506 of the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8773) during the 
        transition period may, at any time, make a permanent transfer 
        to the production margin protection program.
    (e) Administration Fee.--
            (1) Administration fee required.--Except as provided in 
        paragraph (5), a participating dairy operation shall--
                    (A) pay an administration fee under this subsection 
                to register to participate in the production margin 
                protection program; and
                    (B) pay the administration fee annually thereafter 
                to continue to participate in the production margin 
                protection program.
            (2) Fee amount.--The administration fee for a participating 
        dairy operation for a calendar year shall be based on the 
        pounds of milk (in millions) marketed by the participating 
        dairy operation in the previous calendar year, as follows:


------------------------------------------------------------------------
   Pounds Marketed (in millions)              Administration Fee
------------------------------------------------------------------------
                 less than 1                                 $100
                      1 to 5                                 $250
           more than 5 to 10                                 $350
          more than 10 to 40                               $1,000
                more than 40                               $2,500
------------------------------------------------------------------------

            (3) Deposit of fees.--All administration fees collected 
        under this subsection shall be credited to the fund or account 
        used to cover the costs incurred to administer the production 
        margin protection program and the stabilization program and 
        shall be available to the Secretary, without further 
        appropriation and until expended, for use or transfer as 
        provided in paragraph (4).
            (4) Use of fees.--The Secretary shall use administration 
        fees collected under this subsection--
                    (A) to cover administrative costs of the production 
                margin protection program and stabilization program; 
                and
                    (B) to cover costs of the Department of Agriculture 
                relating to reporting of dairy market news, carrying 
                out the amendments made by section 1476, and carrying 
                out section 273 of the Agricultural Marketing Act of 
                1946 (7 U.S.C. 1637b)), to the extent funds remain 
                available after operation of subparagraph (A).
            (5) Waiver.--The Secretary shall waive or reduce the 
        administration fee required under paragraph (1) in the case of 
        a limited-resource dairy operation, as defined by the 
        Secretary.
    (f) Limitation.--A dairy operation may only participate in the 
production margin protection program or the livestock gross margin for 
dairy program under the Federal Crop Insurance Act (7 U.S.C. 1501 et 
seq.), but not both.

SEC. 1413. PRODUCTION HISTORY OF PARTICIPATING DAIRY OPERATIONS.

    (a) Production History for Basic Production Margin Protection.--
            (1) Determination required.--For purposes of providing 
        basic production margin protection, the Secretary shall 
        determine the basic production history of a participating dairy 
        operation.
            (2) Calculation.--Except as provided in paragraph (3), the 
        basic production history of a participating dairy operation for 
        basic production margin protection is equal to the highest 
        annual milk marketings of the participating dairy operation 
        during any 1 of the 3 calendar years immediately preceding the 
        calendar year in which the participating dairy operation first 
        signed up to participate in the production margin protection 
        program.
            (3) Election by new dairy operations.--In the case of a 
        participating dairy operation that has been in operation for 
        less than a year, the participating dairy operation shall elect 
        1 of the following methods for the Secretary to determine the 
        basic production history of the participating dairy operation:
                    (A) The volume of the actual milk marketings for 
                the months the participating dairy operation has been 
                in operation extrapolated to a yearly amount.
                    (B) An estimate of the actual milk marketings of 
                the participating dairy operation based on the herd 
                size of the participating dairy operation relative to 
                the national rolling herd average data published by the 
                Secretary.
            (4) No change in production history for basic production 
        margin protection.--Once the basic production history of a 
        participating dairy operation is determined under paragraph (2) 
        or (3), the basic production history shall not be subsequently 
        changed for purposes of determining the amount of any basic 
        production margin protection payments for the participating 
        dairy operation made under section 1414.
    (b) Annual Production History for Supplemental Production Margin 
Protection.--
            (1) Determination required.--For purposes of providing 
        supplemental production margin protection for a participating 
        dairy operation that purchases supplemental production margin 
        protection for a year under section 1415, the Secretary shall 
        determine the annual production history of the participating 
        dairy operation under paragraph (2).
            (2) Calculation.--The annual production history of a 
        participating dairy operation for a year is equal to the actual 
        milk marketings of the participating dairy operation during the 
        preceding calendar year.
            (3) New dairy operations.--Subsection (a)(3) shall apply 
        with respect to determining the annual production history of a 
        participating dairy operation that has been in operation for 
        less than a year.
    (c) Required Information.--A participating dairy operation shall 
provide all information that the Secretary may require in order to 
establish--
            (1) the basic production history of the participating dairy 
        operation under subsection (a); and
            (2) the production history of the participating dairy 
        operation whenever the participating dairy operation purchases 
        supplemental production margin protection under section 1415.
    (d) Transfer of Production Histories.--
            (1) Transfer by sale or lease.--In promulgating the rules 
        to initiate the production margin protection program, the 
        Secretary shall specify the conditions under which and the 
        manner by which the production history of a participating dairy 
        operation may be transferred by sale or lease.
            (2) Coverage level.--
                    (A) Basic production margin protection.--A 
                purchaser or lessee to whom the Secretary transfers a 
                basic production history under this subsection shall 
                not obtain a different level of basic production margin 
                protection than the basic production margin protection 
                coverage held by the seller or lessor from whom the 
                transfer was obtained.
                    (B) Supplemental production margin protection.--A 
                purchaser or lessee to whom the Secretary transfers an 
                annual production history under this subsection shall 
                not obtain a different level of supplemental production 
                margin protection coverage than the supplemental 
                production margin protection coverage in effect for the 
                seller or lessor from whom the transfer was obtained 
                for the calendar year in which the transfer was made.
    (e) Movement and Transfer of Production History.--
            (1) Movement and transfer authorized.--Subject to paragraph 
        (2), if a participating dairy operation moves from 1 location 
        to another location, the participating dairy operation may 
        transfer the basic production history and annual production 
        history associated with the participating dairy operation.
            (2) Notification requirement.--A participating dairy 
        operation shall notify the Secretary of any move of a 
        participating dairy operation under paragraph (1).
            (3) Subsequent occupation of vacated location.--A party 
        subsequently occupying a participating dairy operation location 
        vacated as described in paragraph (1) shall have no interest in 
        the basic production history or annual production history 
        previously associated with the participating dairy operation at 
        such location.

SEC. 1414. BASIC PRODUCTION MARGIN PROTECTION.

    (a) Payment Threshold.--The Secretary shall make a payment to 
participating dairy operations in accordance with subsection (b) 
whenever the average actual dairy production margin for a consecutive 
2-month period is less than $4.00 per hundredweight of milk.
    (b) Basic Production Margin Protection Payment.--The basic 
production margin protection payment for a participating dairy 
operation for a consecutive 2-month period shall be equal to the 
product obtained by multiplying--
            (1) the difference between the average actual dairy 
        production margin for the consecutive 2-month period and $4.00, 
        except that, if the difference is more than $4.00, the 
        Secretary shall use $4.00; by
            (2) the lesser of--
                    (A) 80 percent of the production history of the 
                participating dairy operation, divided by 6; or
                    (B) the actual quantity of milk marketed by the 
                participating dairy operation during the consecutive 2-
                month period.

SEC. 1415. SUPPLEMENTAL PRODUCTION MARGIN PROTECTION.

    (a) Election of Supplemental Production Margin Protection.--A 
participating dairy operation may annually purchase supplemental 
production margin protection to protect, during the calendar year for 
which purchased, a higher level of the income of a participating dairy 
operation than the income level guaranteed by basic production margin 
protection under section 1414.
    (b) Selection of Payment Threshold.--A participating dairy 
operation purchasing supplemental production margin protection for a 
year shall elect a coverage level that is higher, in any increment of 
$0.50, than the payment threshold for basic production margin 
protection specified in section 1414(a), but not to exceed $8.00.
    (c) Coverage Percentage.--A participating dairy operation 
purchasing supplemental production margin protection for a year shall 
elect a percentage of coverage equal to not more than 90 percent, nor 
less than 25 percent, of the annual production history of the 
participating dairy operation.
    (d) Premiums for Supplemental Production Margin Protection.--
            (1) Premiums required.--A participating dairy operation 
        that purchases supplemental production margin protection shall 
        pay an annual premium equal to the product obtained by 
        multiplying--
                    (A) the coverage percentage elected by the 
                participating dairy operation under subsection (c);
                    (B) the annual production history of the 
                participating dairy operation; and
                    (C) the premium per hundredweight of milk, as 
                specified in the applicable table under paragraph (2) 
                or (3).
            (2) Premium per hundredweight for first 4 million pounds of 
        production.--For the first 4,000,000 pounds of milk marketings 
        included in the annual production history of a participating 
        dairy operation, the premium per hundredweight corresponding to 
        each coverage level specified in the following table is as 
        follows:


------------------------------------------------------------------------
           Coverage Level                      Premium per Cwt.
------------------------------------------------------------------------
                       $4.50                                $0.01
                       $5.00                                $0.02
                       $5.50                               $0.035
                       $6.00                               $0.045
                       $6.50                                $0.09
                       $7.00                                $0.40
                       $7.50                                $0.60
                       $8.00                                $0.95
------------------------------------------------------------------------

            (3) Premium per hundredweight for production in excess of 4 
        million pounds.--For milk marketings in excess of 4,000,000 
        pounds included in the annual production history of a 
        participating dairy operation, the premium per hundredweight 
        corresponding to each coverage level is as follows:


------------------------------------------------------------------------
           Coverage Level                      Premium per Cwt.
------------------------------------------------------------------------
                       $4.50                                $0.02
                       $5.00                                $0.04
                       $5.50                                $0.10
                       $6.00                                $0.15
                       $6.50                                $0.29
                       $7.00                                $0.62
                       $7.50                                $0.83
                       $8.00                                $1.06
------------------------------------------------------------------------

            (4) Time for payment.--In promulgating the rules to 
        initiate the production margin protection program, the 
        Secretary shall provide more than 1 method by which a 
        participating dairy operation that purchases supplemental 
        production margin protection for a calendar year may pay the 
        premium under this subsection for that year in any manner that 
        maximizes participating dairy operation payment flexibility and 
        program integrity.
    (e) Premium Obligations.--
            (1) Pro-ration of premium for new dairy operations.--A 
        participating dairy operation described in section 1412(c)(2) 
        that purchases supplemental production margin protection for a 
        calendar year after the start of the calendar year shall pay a 
        pro-rated premium for that calendar year based on the portion 
        of the calendar year for which the participating dairy 
        operation purchases the coverage.
            (2) Legal obligation.--A participating dairy operation that 
        purchases supplemental production margin protection for a 
        calendar year shall be legally obligated to pay the applicable 
        premium for that calendar year, except that the Secretary may 
        waive that obligation, under terms and conditions determined by 
        the Secretary, for 1 or more producers in any participating 
        dairy operation in the case of death, retirement, permanent 
        dissolution of a participating dairy operation, or other 
        circumstances as the Secretary considers appropriate to ensure 
        the integrity of the program.
    (f) Supplemental Payment Threshold.--A participating dairy 
operation with supplemental production margin protection shall receive 
a supplemental production margin protection payment whenever the 
average actual dairy production margin for a consecutive 2-month period 
is less than the coverage level threshold selected by the participating 
dairy operation under subsection (b).
    (g) Supplemental Production Margin Protection Payments.--
            (1) In general.--The supplemental production margin 
        protection payment for a participating dairy operation is in 
        addition to the basic production margin protection payment.
            (2) Amount of payment.--The supplemental production margin 
        protection payment for the participating dairy operation shall 
        be determined as follows:
                    (A) The Secretary shall calculate the difference 
                between the coverage level threshold selected by the 
                participating dairy operation under subsection (b) and 
                the greater of--
                            (i) the average actual dairy production 
                        margin for the consecutive 2-month period; or
                            (ii) $4.00.
                    (B) The amount determined under subparagraph (A) 
                shall be multiplied by the percentage selected by the 
                participating dairy operation under subsection (c) and 
                by the lesser of the following:
                            (i) The annual production history of the 
                        participating dairy operation, divided by 6.
                            (ii) The actual amount of milk marketed by 
                        the participating dairy operation during the 
                        consecutive 2-month period.

SEC. 1416. EFFECT OF FAILURE TO PAY ADMINISTRATION FEES OR PREMIUMS.

    (a) Loss of Benefits.--A participating dairy operation that fails 
to pay the required administration fee under section 1412 or is in 
arrears on premium payments for supplemental production margin 
protection under section 1415--
            (1) remains legally obligated to pay the administration fee 
        or premiums, as the case may be; and
            (2) may not receive basic production margin protection 
        payments or supplemental production margin protection payments 
        until the fees or premiums are fully paid.
    (b) Enforcement.--The Secretary may take such action as necessary 
to collect administration fees and premium payments for supplemental 
production margin protection.

             Subpart B--Dairy Market Stabilization Program

SEC. 1431. ESTABLISHMENT OF DAIRY MARKET STABILIZATION PROGRAM.

    (a) Program Required; Purpose.--Effective not later than 120 days 
after the effective date of this subtitle, the Secretary shall 
establish and administer a dairy market stabilization program 
applicable to participating dairy operations for the purpose of 
assisting in balancing the supply of milk with demand when 
participating dairy operations are experiencing low or negative 
operating margins.
    (b) Election of Stabilization Program Base Calculation Method.--
            (1) Election.--When a dairy operation signs up under 
        section 1412 to participate in the production margin protection 
        program, the dairy operation shall inform the Secretary of the 
        method by which the stabilization program base for the 
        participating dairy operation will be calculated under 
        paragraph (3).
            (2) Change in calculation method.--A participating dairy 
        operation may change the stabilization program base calculation 
        method to be used for a calendar year by notifying the 
        Secretary of the change not later than a date determined by the 
        Secretary.
            (3) Calculation methods.--A participating dairy operation 
        may elect either of the following methods for calculation of 
        the stabilization program base for the participating dairy 
        operation:
                    (A) The volume of the average monthly milk 
                marketings of the participating dairy operation for the 
                3 months immediately preceding the announcement by the 
                Secretary that the stabilization program will become 
                effective.
                    (B) The volume of the monthly milk marketings of 
                the participating dairy operation for the same month in 
                the preceding year as the month for which the Secretary 
                has announced the stabilization program will become 
                effective.

SEC. 1432. THRESHOLD FOR IMPLEMENTATION AND REDUCTION IN DAIRY 
              PAYMENTS.

    (a) When Stabilization Program Required.--Except as provided in 
subsection (b), the Secretary shall announce that the stabilization 
program is in effect and order reduced payments by handlers to 
participating dairy operations that exceed the applicable percentage of 
the participating dairy operation's stabilization program base 
whenever--
            (1) the actual dairy production margin has been $6.00 or 
        less per hundredweight of milk for each of the immediately 
        preceding 2 months; or
            (2) the actual dairy production margin has been $4.00 or 
        less per hundredweight of milk for the immediately preceding 
        month.
    (b) Exception.--If any of the conditions described in section 
1436(b) have been met during the 2-month period immediately preceding 
the month in which the announcement under subsection (a) would 
otherwise be made by the Secretary in the absence of this exception, 
the Secretary shall--
            (1) suspend the stabilization program;
            (2) refrain from making the announcement under subsection 
        (a) to implement order the stabilization payment; or
            (3) order reduced payments.
    (c) Effective Date for Implementation of Payment Reductions.--
Reductions in dairy payments shall commence beginning on the first day 
of the month immediately following the date of the announcement by the 
Secretary under subsection (a).

SEC. 1433. MILK MARKETINGS INFORMATION.

    (a) Collection of Milk Marketing Data.--The Secretary shall 
establish, by regulation, a process to collect from participating dairy 
operations and handlers such information that the Secretary considers 
necessary for each month during which the stabilization program is in 
effect.
    (b) Reduce Regulatory Burden.--When implementing the process under 
subsection (a), the Secretary shall minimize the regulatory burden on 
participating dairy operations and handlers.

SEC. 1434. CALCULATION AND COLLECTION OF REDUCED DAIRY OPERATION 
              PAYMENTS.

    (a) Reduced Participating Dairy Operation Payments Required.--
During any month in which payment reductions are in effect under the 
stabilization program, each handler shall reduce payments to each 
participating dairy operation from whom the handler receives milk.
    (b) Reductions Based on Actual Dairy Production Margin.--
            (1) Reduction requirement 1.--If the Secretary determines 
        that the average actual dairy production margin has been less 
        than $6.00 but greater than $5.00 per hundredweight of milk for 
        2 consecutive months, the handler shall make payments to a 
        participating dairy operation for a month based on the greater 
        of the following:
                    (A) 98 percent of the stabilization program base of 
                the participating dairy operation.
                    (B) 94 percent of the marketings of milk for the 
                month by the participating dairy operation.
            (2) Reduction requirement 2.--If the Secretary determines 
        that the average actual dairy production margin has been less 
        than $5.00 but greater than $4.00 for 2 consecutive months, the 
        handler shall make payments to a participating dairy operation 
        for a month based on the greater of the following:
                    (A) 97 percent of the stabilization program base of 
                the participating dairy operation.
                    (B) 93 percent of the marketings of milk for the 
                month by the participating dairy operation.
            (3) Reduction requirement 3.--If the Secretary determines 
        that the average actual dairy production margin has been $4.00 
        or less for any 1 month, the handler shall make payments to a 
        participating dairy operation for a month based on the greater 
        of the following:
                    (A) 96 percent of the stabilization program base of 
                the participating dairy operation.
                    (B) 92 percent of the marketings of milk for the 
                month by the participating dairy operation.
    (c) Continuation of Reductions.--The largest level of payment 
reduction required under paragraph (1), (2), or (3) of subsection (b) 
shall be continued for each month until the Secretary suspends the 
stabilization program and terminates payment reductions in accordance 
with section 1436.
    (d) Payment Reduction Exception.--Notwithstanding any preceding 
subsection of this section, a handler shall make no payment reductions 
for a participating dairy operation for a month if the participating 
dairy operation's milk marketings for the month are equal to or less 
than the percentage of the stabilization program base applicable to the 
participating dairy operation under paragraph (1), (2), or (3) of 
subsection (b).

SEC. 1435. REMITTING FUNDS TO THE SECRETARY AND USE OF FUNDS.

    (a) Remitting Funds.--As soon as practicable after the end of each 
month during which payment reductions are in effect under the 
stabilization program, each handler shall remit to the Secretary an 
amount equal to the amount by which payments to participating dairy 
operations are reduced by the handler under section 1434.
    (b) Deposit of Remitted Funds.--All funds received under subsection 
(a) shall be available to the Secretary, without further appropriation 
and until expended, for use or transfer as provided in subsection (c).
    (c) Use of Funds.--
            (1) Availability for certain commodity donations.--Not 
        later than 90 days after the funds described in subsection (a) 
        are due as determined by the Secretary, the Secretary shall 
        obligate the funds for the purpose of--
                    (A) purchasing dairy products for donation to food 
                banks and other programs that the Secretary determines 
                appropriate; and
                    (B) expanding consumption and building demand for 
                dairy products.
            (2) No duplication of effort.--The Secretary shall ensure 
        that expenditures under paragraph (1) are compatible with, and 
        do not duplicate, programs supported by the dairy research and 
        promotion activities conducted under the Dairy Production 
        Stabilization Act of 1983 (7 U.S.C. 4501 et seq.).
            (3) Accounting.--The Secretary shall keep an accurate 
        account of all funds expended under paragraph (1).
    (d) Annual Report.--Not later than December 31 of each year that 
the stabilization program is in effect, the Secretary shall submit to 
the Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a 
report that provides an accurate accounting of--
            (1) the funds received by the Secretary during the 
        preceding fiscal year under subsection (a);
            (2) all expenditures made by the Secretary under subsection 
        (b) during the preceding fiscal year; and
            (3) the impact of the stabilization program on dairy 
        markets.
    (e) Enforcement.--If a participating dairy operation or handler 
fails to remit or collect the amounts by which payments to 
participating dairy operations are reduced under section 1434, the 
participating dairy operation or handler responsible for the failure 
shall be liable to the Secretary for the amount that should have been 
remitted or collected, plus interest. In addition to the enforcement 
authorities available under section 1437, the Secretary may enforce 
this subsection in the courts of the United States.

SEC. 1436. SUSPENSION OF REDUCED PAYMENT REQUIREMENT.

    (a) Determination of Prices.--For purposes of this section:
            (1) The price in the United States for cheddar cheese and 
        nonfat dry milk shall be determined by the Secretary.
            (2) The world price of cheddar cheese and skim milk powder 
        shall be determined by the Secretary.
    (b) Suspension Thresholds.--The stabilization program shall be 
suspended or the Secretary shall refrain from making the announcement 
under section 1432(a) if the Secretary determines that--
            (1) the actual dairy production margin is greater than 
        $6.00 per hundredweight of milk for 2 consecutive months;
            (2) the actual dairy production margin is equal to or less 
        than $6.00 (but greater than $5.00) for 2 consecutive months, 
        and during the same 2 consecutive months--
                    (A) the price in the United States for cheddar 
                cheese is equal to or greater than the world price of 
                cheddar cheese; or
                    (B) the price in the United States for nonfat dry 
                milk is equal to or greater than the world price of 
                skim milk powder;
            (3) the actual dairy production margin is equal to or less 
        than $5.00 (but greater than $4.00) for 2 consecutive months, 
        and during the same 2 consecutive months--
                    (A) the price in the United States for cheddar 
                cheese is more than 5 percent above the world price of 
                cheddar cheese; or
                    (B) the price in the United States for nonfat dry 
                milk is more than 5 percent above the world price of 
                skim milk powder; or
            (4) the actual dairy production margin is equal to or less 
        than $4.00 for 2 consecutive months, and during the same 2 
        consecutive months--
                    (A) the price in the United States for cheddar 
                cheese is more than 7 percent above the world price of 
                cheddar cheese; or
                    (B) the price in the United States for nonfat dry 
                milk is more than 7 percent above the world price of 
                skim milk powder.
    (c) Implementation by Handlers.--Effective on the day after the 
date of the announcement by the Secretary under subsection (b) of the 
suspension of the stabilization program, the handler shall cease 
reducing payments to participating dairy operations under the 
stabilization program.
    (d) Condition on Resumption of Stabilization Program.--Upon the 
announcement by the Secretary under subsection (b) that the 
stabilization program has been suspended, the stabilization program may 
not be implemented again until, at the earliest--
            (1) 2 months have passed, beginning on the first day of the 
        month immediately following the announcement by the Secretary; 
        and
            (2) the conditions of section 1432(a) are again met.

SEC. 1437. ENFORCEMENT.

    (a) Unlawful Act.--It shall be unlawful and a violation of the this 
subpart for any person subject to the stabilization program to 
willfully fail or refuse to provide, or delay the timely reporting of, 
accurate information and remittance of funds to the Secretary in 
accordance with this subpart.
    (b) Order.--After providing notice and opportunity for a hearing to 
an affected person, the Secretary may issue an order against any person 
to cease and desist from continuing any violation of this subpart.
    (c) Appeal.--An order of the Secretary under subsection (b) shall 
be final and conclusive unless an affected person files an appeal of 
the order of the Secretary in United States district court not later 
than 30 days after the date of the issuance of the order. A finding of 
the Secretary in the order shall be set aside only if the finding is 
not supported by substantial evidence.
    (d) Noncompliance With Order.--If a person subject to this subpart 
fails to obey an order issued under subsection (b) after the order has 
become final and unappealable, or after the appropriate United States 
district court has entered a final judgment in favor of the Secretary, 
the United States may apply to the appropriate United States district 
court for enforcement of the order. If the court determines that the 
order was lawfully made and duly served and that the person violated 
the order, the court shall enforce the order.

SEC. 1438. AUDIT REQUIREMENTS.

    (a) Audits of Dairy Operation and Handler Compliance.--
            (1) Audits authorized.--If determined by the Secretary to 
        be necessary to ensure compliance by participating dairy 
        operations and handlers with the stabilization program, the 
        Secretary may conduct periodic audits of participating dairy 
        operations and handlers.
            (2) Sample of dairy operations.--Any audit conducted under 
        this subsection shall include, at a minimum, investigation of a 
        statistically valid and random sample of participating dairy 
        operations.
    (b) Submission of Results.--The Secretary shall submit the results 
of any audit conducted under subsection (a) to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate and include such 
recommendations as the Secretary considers appropriate regarding the 
stabilization program.

SEC. 1439. STUDY; REPORT.

    (a) In General.--The Secretary shall direct the Office of the Chief 
Economist to conduct a study of the impacts of the program established 
under section 1431(a).
    (b) Considerations.--The study conducted under subsection (a) shall 
consider--
            (1) the economic impact of the program throughout the dairy 
        product value chain, including the impact on producers, 
        processors, domestic customers, export customers, actual market 
        growth and potential market growth, farms of different sizes, 
        and different regions and States; and
            (2) the impact of the program on the competitiveness of the 
        United States dairy industry in international markets.
    (c) Report.--Not later than December 1, 2016, the Office of the 
Chief Economist shall submit to the Committee on Agriculture of the 
House of Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate a report that describes the results of the 
study conducted under subsection (a).

                       Subpart C--Administration

SEC. 1451. DURATION.

    The production margin protection program and the stabilization 
program shall end on December 31, 2017.

SEC. 1452. ADMINISTRATION AND ENFORCEMENT.

    (a) In General.--The Secretary shall promulgate regulations to 
address administrative and enforcement issues involved in carrying out 
the production margin protection, supplemental production margin 
protection, and market stabilization programs.
    (b) Reconstitution and Eligibility Issues.--
            (1) Reconstitution.--Using authorities under section 
        1001(f) and 1001B of the Food Security Act of 1985 (7 U.S.C. 
        1308(f), 1308-2), the Secretary shall promulgate regulations to 
        prohibit a dairy producer from reconstituting a dairy operation 
        for the sole purpose of the dairy producer--
                    (A) receiving basic margin protection;
                    (B) purchasing supplemental margin protection; or
                    (C) avoiding participation in the market 
                stabilization program.
            (2) Eligibility issues.--Using authorities under section 
        1001(f) and 1001B of the Food Security Act of 1985 (7 U.S.C. 
        1308(f), 1308-2), the Secretary shall promulgate regulations--
                    (A) to prohibit a scheme or device;
                    (B) to provide for equitable relief; and
                    (C) to provide for other issues affecting 
                eligibility and liability issues.
            (3) Administrative appeals.--Using authorities under 
        section 1001(h) of the Food Security Act of 1985 (7 U.S.C. 
        1308(h)) and subtitle H of the Department of Agriculture 
        Reorganization Act (7 U.S.C. 6991 et seq.), the Secretary shall 
        promulgate regulations to provide for administrative appeals of 
        decisions of the Secretary that are adverse to participants of 
        the programs described in subsection (a).

                   PART II--DAIRY MARKET TRANSPARENCY

SEC. 1461. DAIRY PRODUCT MANDATORY REPORTING.

    (a) Definitions.--Section 272(1)(A) of the Agricultural Marketing 
Act of 1946 (7 U.S.C. 1637a(1)(A)) is amended by inserting ``, or any 
other products that may significantly aid price discovery in the dairy 
markets, as determined by the Secretary'' after ``of 1937''.
    (b) Mandatory Reporting for Dairy Products.--Section 273(b) of the 
Agricultural Marketing Act of 1946 (7 U.S.C. 1637b(b)) is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(1) In general.--In establishing the program, the 
        Secretary shall only--
                    ``(A)(i) subject to the conditions described in 
                paragraph (2), require each manufacturer to report to 
                the Secretary, more frequently than once per month, 
                information concerning the price, quantity, and 
                moisture content of dairy products sold by the 
                manufacturer and any other product characteristics that 
                may significantly aid price discovery in the dairy 
                markets, as determined by the Secretary; and
                    ``(ii) modify the format used to provide the 
                information on the day before the date of enactment of 
                this subtitle to ensure that the information can be 
                readily understood by market participants; and
                    ``(B) require each manufacturer and other person 
                storing dairy products (including dairy products in 
                cold storage) to report to the Secretary, more 
                frequently than once per month, information on the 
                quantity of dairy products stored.''; and
            (2) in paragraph (2), by inserting ``or those that may 
        significantly aid price discovery in the dairy markets'' after 
        ``Federal milk marketing order'' each place it appears in 
        subparagraphs (A), (B), and (C).

SEC. 1462. FEDERAL MILK MARKETING ORDER INFORMATION.

    (a) Information Clearinghouse.--
            (1) In general.--The Secretary shall, on behalf of each 
        milk marketing order issued under the Agricultural Adjustment 
        Act (7 U.S.C. 601 et seq.), reenacted with amendments by the 
        Agricultural Marketing Agreement Act of 1937, establish an 
        information clearinghouse for the purposes of educating the 
        public about the Federal milk marketing order system and any 
        marketing order referenda, including proposal information and 
        timelines that shall be kept current and updated as information 
        becomes available.
            (2) Requirements.--Information under paragraph (1) shall 
        include--
                    (A) information on procedures by which cooperatives 
                vote;
                    (B) if applicable, information on the manner by 
                which producers may cast an individual ballot;
                    (C) in applicable, instructions on the manner in 
                which to vote online;
                    (D) due dates for each specific referendum;
                    (E) the text of each referendum question under 
                consideration;
                    (F) a description in plain language of the 
                question;
                    (G) any relevant background information to the 
                question; and
                    (H) any other information that increases Federal 
                milk marketing order transparency.
    (b) Notification List for Upcoming Referendum.--Each Federal milk 
marketing order shall--
            (1) make available the information described in subsection 
        (b) through an Internet site; and
            (2) publicize the information in major agriculture and 
        dairy-specific publications on upcoming referenda.
    (c) Study.--
            (1) In general.--The Secretary shall conduct a study of the 
        feasibility of establishing 2 classes of milk, a fluid class 
        and a manufacturing class, to replace the 4-class system in 
        effect on the date of enactment of this Act in administering 
        Federal milk marketing orders.
            (2) Federal milk market order review commission.--The 
        Secretary may elect to use the Federal Milk Market Order Review 
        Commission established under section 1509(a) of the Food, 
        Conservation, and Energy Act of 2008 (Public Law 110-246; 122 
        Stat. 1726), or documents of the Commission, to conduct all or 
        part of the study.
            (3) Report.--Not later than 180 days after the date of 
        enactment of this Act, the Secretary shall submit to the 
        Committee on Agriculture of the House of Representatives and 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate a report that describes the results of the study 
        required under this subsection, including any recommendations.

 PART III--REPEAL OR REAUTHORIZATION OF OTHER DAIRY-RELATED PROVISIONS

SEC. 1471. REPEAL OF DAIRY PRODUCT PRICE SUPPORT AND MILK INCOME LOSS 
              CONTRACT PROGRAMS.

    (a) Repeal of Dairy Product Price Support Program.--Section 1501 of 
the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8771) is 
repealed.
    (b) Repeal of Milk Income Loss Contract Program.--
            (1) Payments under milk income loss contract program.--
        Section 1506(c)(3) of the Food, Conservation, and Energy Act of 
        2008 (7 U.S.C. 8773(c)(3)) is amended--
                    (A) in subparagraph (A), by inserting ``and'' after 
                the semicolon;
                    (B) in subparagraph (B), by striking ``August 31, 
                2012, 45 percent; and'' and inserting ``June 30, 2013, 
                45 percent.''; and
                    (C) by striking subparagraph (C).
            (2) Extension.--Section 1506(h)(1) of the Food, 
        Conservation, and Energy Act of 2008 (7 U.S.C. 8773(h)(1)) is 
        amended by striking ``September 30, 2012'' and inserting ``June 
        30, 2013''.
            (3) Repeal.--Effective July 1, 2013, section 1506 of the 
        Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8773) is 
        repealed.

SEC. 1472. REPEAL OF DAIRY EXPORT INCENTIVE PROGRAM.

    (a) Repeal.--Section 153 of the Food Security Act of 1985 (15 
U.S.C. 713a-14) is repealed.
    (b) Conforming Amendments.--Section 902(2) of the Trade Sanctions 
Reform and Export Enhancement Act of 2000 (22 U.S.C. 7201(2)) is 
amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (D) and (E), respectively.

SEC. 1473. EXTENSION OF DAIRY FORWARD PRICING PROGRAM.

    Section 1502(e) of the Food, Conservation, and Energy Act of 2008 
(7 U.S.C. 8772(e)) is amended--
            (1) in paragraph (1), by striking ``2012'' and inserting 
        ``2017''; and
            (2) in paragraph (2), by striking ``2015'' and inserting 
        ``2020''.

SEC. 1474. EXTENSION OF DAIRY INDEMNITY PROGRAM.

    Section 3 of Public Law 90-484 (7 U.S.C. 450l) is amended by 
striking ``2012'' and inserting ``2017''.

SEC. 1475. EXTENSION OF DAIRY PROMOTION AND RESEARCH PROGRAM.

    Section 113(e)(2) of the Dairy Production Stabilization Act of 1983 
(7 U.S.C. 4504(e)(2)) is amended by striking ``2012'' and inserting 
``2017''.

SEC. 1476. EXTENSION OF FEDERAL MILK MARKETING ORDER REVIEW COMMISSION.

    Section 1509(a) of the Food, Conservation, and Energy Act of 2008 
(Public Law 110-246; 122 Stat. 1726) is amended by inserting ``or other 
funds'' after ``Subject to the availability of appropriations''.

              PART IV--FEDERAL MILK MARKETING ORDER REFORM

SEC. 1481. FEDERAL MILK MARKETING ORDERS.

    (a) Amendments.--The Secretary shall provide an analysis on the 
effects of amending each 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 (in this part referred to as a ``milk marketing order''), as 
required by this section.
    (b) Use of End-product Price Formulas.--In carrying out subsection 
(a), the Secretary shall--
            (1) consider replacing the use of end-product price 
        formulas with other pricing alternatives; and
            (2) submit to the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, Nutrition, 
        and Forestry of the Senate a report describing the findings of 
        the Secretary on the impact of the action considered under 
        paragraph (1).

                         PART V--EFFECTIVE DATE

SEC. 1491. EFFECTIVE DATE.

    Except as otherwise provided in this subtitle, this subtitle and 
the amendments made by this subtitle take effect on October 1, 2012.

   Subtitle E--Supplemental Agricultural Disaster Assistance Programs

SEC. 1501. SUPPLEMENTAL AGRICULTURAL DISASTER ASSISTANCE PROGRAMS.

    (a) Definitions.--In this section:
            (1) Eligible producer on a farm.--
                    (A) In general.--The term ``eligible producer on a 
                farm'' means an individual or entity described in 
                subparagraph (B) that, as determined by the Secretary, 
                assumes the production and market risks associated with 
                the agricultural production of crops or livestock.
                    (B) Description.--An individual or entity referred 
                to in subparagraph (A) is--
                            (i) a citizen of the United States;
                            (ii) a resident alien;
                            (iii) a partnership of citizens of the 
                        United States; or
                            (iv) a corporation, limited liability 
                        corporation, or other farm organizational 
                        structure organized under State law.
            (2) Farm.--
                    (A) In general.--The term ``farm'' means, in 
                relation to an eligible producer on a farm, the total 
                of all crop acreage in all counties that is planted or 
                intended to be planted for harvest, for sale, or on-
                farm livestock feeding (including native grassland 
                intended for haying) by the eligible producer.
                    (B) Aquaculture.--In the case of aquaculture, the 
                term ``farm'' means, in relation to an eligible 
                producer on a farm, all fish being produced in all 
                counties that are intended to be harvested for sale by 
                the eligible producer.
                    (C) Honey.--In the case of honey, the term ``farm'' 
                means, in relation to an eligible producer on a farm, 
                all bees and beehives in all counties that are intended 
                to be harvested for a honey crop for sale by the 
                eligible producer.
            (3) Farm-raised fish.--The term ``farm-raised fish'' means 
        any aquatic species that is propagated and reared in a 
        controlled environment.
            (4) Livestock.--The term ``livestock'' includes--
                    (A) cattle (including dairy cattle);
                    (B) bison;
                    (C) poultry;
                    (D) sheep;
                    (E) swine;
                    (F) horses; and
                    (G) other livestock, as determined by the 
                Secretary.
    (b) Livestock Indemnity Payments.--
            (1) Payments.--For each of fiscal years 2012 through 2017, 
        the Secretary shall use such sums as are necessary of the funds 
        of the Commodity Credit Corporation to make livestock indemnity 
        payments to eligible producers on farms that have incurred 
        livestock death losses in excess of the normal mortality, as 
        determined by the Secretary, due to--
                    (A) attacks by animals reintroduced into the wild 
                by the Federal Government or protected by Federal law, 
                including wolves; or
                    (B) adverse weather, as determined by the 
                Secretary, during the calendar year, including losses 
                due to hurricanes, floods, blizzards, disease, 
                wildfires, extreme heat, and extreme cold.
            (2) Payment rates.--Indemnity payments to an eligible 
        producer on a farm under paragraph (1) shall be made at a rate 
        of 65 percent of the market value of the applicable livestock 
        on the day before the date of death of the livestock, as 
        determined by the Secretary.
            (3) Special rule for payments made due to disease.--The 
        Secretary shall ensure that payments made to an eligible 
        producer under paragraph (1) are not made for the same 
        livestock losses for which compensation is provided pursuant to 
        section 10407(d) of the Animal Health Protection Act (7 U.S.C. 
        8306(d)).
    (c) Livestock Forage Disaster Program.--
            (1) Establishment.--There is established a livestock forage 
        disaster program to provide 1 source for livestock forage 
        disaster assistance for weather-related forage losses, as 
        determined by the Secretary, by combining--
                    (A) the livestock forage assistance functions of--
                            (i) the noninsured crop disaster assistance 
                        program established by section 196 of the 
                        Federal Agriculture Improvement and Reform Act 
                        of 1996 (7 U.S.C. 7333); and
                            (ii) the emergency assistance for 
                        livestock, honey bees, and farm-raised fish 
                        program under section 531(e) of the Federal 
                        Crop Insurance Act (7 U.S.C. 1531(e)) (as in 
                        existence on the day before the date of 
                        enactment of this Act); and
                    (B) the livestock forage disaster program under 
                section 531(d) of the Federal Crop Insurance Act (7 
                U.S.C. 1531(d)) (as in existence on the day before the 
                date of enactment of this Act).
            (2) Definitions.--In this subsection:
                    (A) Covered livestock.--
                            (i) In general.--Except as provided in 
                        clause (ii), the term ``covered livestock'' 
                        means livestock of an eligible livestock 
                        producer that, during the 60 days prior to the 
                        beginning date of an eligible forage loss, as 
                        determined by the Secretary, the eligible 
                        livestock producer--
                                    (I) owned;
                                    (II) leased;
                                    (III) purchased;
                                    (IV) entered into a contract to 
                                purchase;
                                    (V) was a contract grower; or
                                    (VI) sold or otherwise disposed of 
                                due to an eligible forage loss during--
                                            (aa) the current production 
                                        year; or
                                            (bb) subject to paragraph 
                                        (4)(B)(ii), 1 or both of the 2 
                                        production years immediately 
                                        preceding the current 
                                        production year.
                            (ii) Exclusion.--The term ``covered 
                        livestock'' does not include livestock that 
                        were or would have been in a feedlot, on the 
                        beginning date of the eligible forage loss, as 
                        a part of the normal business operation of the 
                        eligible livestock producer, as determined by 
                        the Secretary.
                    (B) Drought monitor.--The term ``drought monitor'' 
                means a system for classifying drought severity 
                according to a range of abnormally dry to exceptional 
                drought, as defined by the Secretary.
                    (C) Eligible forage loss.--The term ``eligible 
                forage loss'' means 1 or more forage losses that occur 
                due to weather-related conditions, including drought, 
                flood, blizzard, hail, excessive moisture, hurricane, 
                and fire, occurring during the normal grazing period, 
                as determined by the Secretary, if the forage--
                            (i) is grown on land that is native or 
                        improved pastureland with permanent vegetative 
                        cover; or
                            (ii) is a crop planted specifically for the 
                        purpose of providing grazing for covered 
                        livestock of an eligible livestock producer.
                    (D) Eligible livestock producer.--
                            (i) In general.--The term ``eligible 
                        livestock producer'' means an eligible producer 
                        on a farm that--
                                    (I) is an owner, cash or share 
                                lessee, or contract grower of covered 
                                livestock that provides the pastureland 
                                or grazing land, including cash-leased 
                                pastureland or grazing land, for the 
                                covered livestock;
                                    (II) provides the pastureland or 
                                grazing land for covered livestock, 
                                including cash-leased pastureland or 
                                grazing land that is physically located 
                                in a county affected by an eligible 
                                forage loss;
                                    (III) certifies the eligible forage 
                                loss; and
                                    (IV) meets all other eligibility 
                                requirements established under this 
                                subsection.
                            (ii) Exclusion.--The term ``eligible 
                        livestock producer'' does not include an owner, 
                        cash or share lessee, or contract grower of 
                        livestock that rents or leases pastureland or 
                        grazing land owned by another person on a rate-
                        of-gain basis.
                    (E) Normal carrying capacity.--The term ``normal 
                carrying capacity'', with respect to each type of 
                grazing land or pastureland in a county, means the 
                normal carrying capacity, as determined under paragraph 
                (4)(D)(i), that would be expected from the grazing land 
                or pastureland for livestock during the normal grazing 
                period, in the absence of an eligible forage loss that 
                diminishes the production of the grazing land or 
                pastureland.
                    (F) Normal grazing period.--The term ``normal 
                grazing period'', with respect to a county, means the 
                normal grazing period during the calendar year for the 
                county, as determined under paragraph (4)(D)(i).
            (3) Program.--For each of fiscal years 2012 through 2017, 
        the Secretary shall use such sums as are necessary of the funds 
        of the Commodity Credit Corporation to provide compensation 
        under paragraphs (4) through (6), as determined by the 
        Secretary for eligible forage losses affecting covered 
        livestock of eligible livestock producers.
            (4) Assistance for eligible forage losses due to drought 
        conditions.--
                    (A) Eligible forage losses.--
                            (i) In general.--An eligible livestock 
                        producer of covered livestock may receive 
                        assistance under this paragraph for eligible 
                        forage losses that occur due to drought on land 
                        that--
                                    (I) is native or improved 
                                pastureland with permanent vegetative 
                                cover; or
                                    (II) is planted to a crop planted 
                                specifically for the purpose of 
                                providing grazing for covered 
                                livestock.
                            (ii) Exclusions.--An eligible livestock 
                        producer may not receive assistance under this 
                        paragraph for eligible forage losses that occur 
                        on land used for haying or grazing under the 
                        conservation reserve program established under 
                        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.), unless the land is 
                        grassland eligible for the conservation reserve 
                        program under section 1231(d)(2) of the Food 
                        Security Act of 1985 (16 U.S.C. 3831(d)(2)) (as 
                        amended by section 2001 of this Act).
                    (B) Monthly payment rate.--
                            (i) In general.--Except as provided in 
                        clause (ii), the payment rate for assistance 
                        for 1 month under this paragraph shall, in the 
                        case of drought, be equal to 60 percent of the 
                        lesser of--
                                    (I) the monthly feed cost for all 
                                covered livestock owned or leased by 
                                the eligible livestock producer, as 
                                determined under subparagraph (C); or
                                    (II) the monthly feed cost 
                                calculated by using the normal carrying 
                                capacity of the eligible grazing land 
                                of the eligible livestock producer.
                            (ii) Partial compensation.--In the case of 
                        an eligible livestock producer that sold or 
                        otherwise disposed of covered livestock due to 
                        drought conditions in 1 or both of the 2 
                        production years immediately preceding the 
                        current production year, as determined by the 
                        Secretary, the payment rate shall be 80 percent 
                        of the payment rate otherwise calculated in 
                        accordance with clause (i).
                    (C) Monthly feed cost.--
                            (i) In general.--The monthly feed cost 
                        shall equal the product obtained by 
                        multiplying--
                                    (I) 30 days;
                                    (II) a payment quantity that is 
                                equal to the feed grain equivalent, as 
                                determined under clause (ii); and
                                    (III) a payment rate that is equal 
                                to the corn price per pound, as 
                                determined under clause (iii).
                            (ii) Feed grain equivalent.--For purposes 
                        of clause (i)(II), the feed grain equivalent 
                        shall equal--
                                    (I) in the case of an adult beef 
                                cow, 15.7 pounds of corn per day; or
                                    (II) in the case of any other type 
                                of weight of livestock, an amount 
                                determined by the Secretary that 
                                represents the average number of pounds 
                                of corn per day necessary to feed the 
                                livestock.
                            (iii) Corn price per pound.--For purposes 
                        of clause (i)(III), the corn price per pound 
                        shall equal the quotient obtained by dividing--
                                    (I) the higher of--
                                            (aa) the national average 
                                        corn price per bushel for the 
                                        12-month period immediately 
                                        preceding March 1 of the year 
                                        for which the disaster 
                                        assistance is calculated; or
                                            (bb) the national average 
                                        corn price per bushel for the 
                                        24-month period immediately 
                                        preceding that March 1; by
                                    (II) 56.
                    (D) Normal grazing period and drought monitor 
                intensity.--
                            (i) FSA county committee determinations.--
                                    (I) In general.--The Secretary 
                                shall determine the normal carrying 
                                capacity and normal grazing period for 
                                each type of grazing land or 
                                pastureland in the county served by the 
                                applicable Farm Service Agency 
                                committee.
                                    (II) Changes.--No change to the 
                                normal carrying capacity or normal 
                                grazing period established for a county 
                                under subclause (I) shall be made 
                                unless the change is requested by the 
                                appropriate State and county Farm 
                                Service Agency committees.
                            (ii) Drought intensity.--
                                    (I) D2.--An eligible livestock 
                                producer that owns or leases grazing 
                                land or pastureland that is physically 
                                located in a county that is rated by 
                                the U.S. Drought Monitor as having a D2 
                                (severe drought) intensity in any area 
                                of the county for at least 8 
                                consecutive weeks during the normal 
                                grazing period for the county, as 
                                determined by the Secretary, shall be 
                                eligible to receive assistance under 
                                this paragraph in an amount equal to 1 
                                monthly payment using the monthly 
                                payment rate determined under 
                                subparagraph (B).
                                    (II) D3.--An eligible livestock 
                                producer that owns or leases grazing 
                                land or pastureland that is physically 
                                located in a county that is rated by 
                                the U.S. Drought Monitor as having at 
                                least a D3 (extreme drought) intensity 
                                in any area of the county at any time 
                                during the normal grazing period for 
                                the county, as determined by the 
                                Secretary, shall be eligible to receive 
                                assistance under this paragraph--
                                            (aa) in an amount equal to 
                                        3 monthly payments using the 
                                        monthly payment rate determined 
                                        under subparagraph (B);
                                            (bb) if the county is rated 
                                        as having a D3 (extreme 
                                        drought) intensity in any area 
                                        of the county for at least 4 
                                        weeks during the normal grazing 
                                        period for the county, or is 
                                        rated as having a D4 
                                        (exceptional drought) intensity 
                                        in any area of the county at 
                                        any time during the normal 
                                        grazing period, in an amount 
                                        equal to 4 monthly payments 
                                        using the monthly payment rate 
                                        determined under subparagraph 
                                        (B); or
                                            (cc) if the county is rated 
                                        as having a D4 (exceptional 
                                        drought) intensity in any area 
                                        of the county for at least 4 
                                        weeks during the normal grazing 
                                        period, in an amount equal to 5 
                                        monthly payments using the 
                                        monthly rate determined under 
                                        subparagraph (B).
                            (iii) Annual payment based on drought 
                        conditions determined by means other than the 
                        u.s. drought monitor.--
                                    (I) In general.--An eligible 
                                livestock producer that owns grazing 
                                land or pastureland that is physically 
                                located in a county that has 
                                experienced on average, over the 
                                preceding calendar year, precipitation 
                                levels that are 50 percent or more 
                                below normal levels, according to 
                                sufficient documentation as determined 
                                by the Secretary, may be eligible, 
                                subject to a determination by the 
                                Secretary, to receive assistance under 
                                this paragraph in an amount equal to 
                                not more than 1 monthly payment using 
                                the monthly payment rate under 
                                subparagraph (B).
                                    (II) No duplicate payment.--A 
                                producer may not receive a payment 
                                under both clause (ii) and this clause.
            (5) Assistance for losses due to fire on public managed 
        land.--
                    (A) In general.--An eligible livestock producer may 
                receive assistance under this paragraph only if--
                            (i) the eligible forage losses occur on 
                        rangeland that is managed by a Federal agency; 
                        and
                            (ii) the eligible livestock producer is 
                        prohibited by the Federal agency from grazing 
                        the normal permitted livestock on the managed 
                        rangeland due to a fire.
                    (B) Payment rate.--The payment rate for assistance 
                under this paragraph shall be equal to 50 percent of 
                the monthly feed cost for the total number of livestock 
                covered by the Federal lease of the eligible livestock 
                producer, as determined under paragraph (4)(C).
                    (C) Payment duration.--
                            (i) In general.--Subject to clause (ii), an 
                        eligible livestock producer shall be eligible 
                        to receive assistance under this paragraph for 
                        the period--
                                    (I) beginning on the date on which 
                                the Federal agency excludes the 
                                eligible livestock producer from using 
                                the managed rangeland for grazing; and
                                    (II) ending on the last day of the 
                                Federal lease of the eligible livestock 
                                producer.
                            (ii) Limitation.--An eligible livestock 
                        producer may only receive assistance under this 
                        paragraph for losses that occur on not more 
                        than 180 days per year.
            (6) Assistance for eligible forage losses due to other than 
        drought or fire.--
                    (A) Eligible forage losses.--
                            (i) In general.--Subject to subparagraph 
                        (B), an eligible livestock producer of covered 
                        livestock may receive assistance under this 
                        paragraph for eligible forage losses that occur 
                        due to weather-related conditions other than 
                        drought or fire on land that--
                                    (I) is native or improved 
                                pastureland with permanent vegetative 
                                cover; or
                                    (II) is planted to a crop planted 
                                specifically for the purpose of 
                                providing grazing for covered 
                                livestock.
                            (ii) Exclusions.--An eligible livestock 
                        producer may not receive assistance under this 
                        paragraph for eligible forage losses that occur 
                        on land used for haying or grazing under the 
                        conservation reserve program established under 
                        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.), unless the land is 
                        grassland eligible for the conservation reserve 
                        program under section 1231(d)(2) of the Food 
                        Security Act of 1985 (16 U.S.C. 3831(d)(2)) (as 
                        amended by section 2001 of this Act).
                    (B) Payments for eligible forage losses.--
                            (i) In general.--The Secretary shall 
                        provide assistance under this paragraph to an 
                        eligible livestock producer for eligible forage 
                        losses that occur due to weather-related 
                        conditions other than--
                                    (I) drought under paragraph (4); 
                                and
                                    (II) fire on public managed land 
                                under paragraph (5).
                            (ii) Terms and conditions.--The Secretary 
                        shall establish terms and conditions for 
                        assistance under this paragraph that are 
                        consistent with the terms and conditions for 
                        assistance under this subsection.
            (7) No duplicative payments.--An eligible livestock 
        producer may elect to receive assistance for eligible forage 
        losses under either paragraph (4), (5), or (6), if applicable, 
        but may not receive assistance under more than 1 of those 
        paragraphs for the same loss, as determined by the Secretary.
            (8) Determinations by secretary.--A determination made by 
        the Secretary under this subsection shall be final and 
        conclusive.
    (d) Emergency Assistance for Livestock, Honey Bees, and Farm-raised 
Fish.--
            (1) In general.--For each of fiscal years 2012 through 
        2017, the Secretary shall use not more than $5,000,000 of the 
        funds of the Commodity Credit Corporation to provide emergency 
        relief to eligible producers of livestock, honey bees, and 
        farm-raised fish to aid in the reduction of losses due to 
        disease, adverse weather, or other conditions, such as 
        blizzards and wildfires, as determined by the Secretary, that 
        are not covered under subsection (b) or (c).
            (2) Use of funds.--Funds made available under this 
        subsection shall be used to reduce losses caused by feed or 
        water shortages, disease, or other factors as determined by the 
        Secretary.
            (3) Availability of funds.--Any funds made available under 
        this subsection shall remain available until expended.
    (e) Tree Assistance Program.--
            (1) Definitions.--In this subsection:
                    (A) Eligible orchardist.--The term ``eligible 
                orchardist'' means a person that produces annual crops 
                from trees for commercial purposes.
                    (B) Natural disaster.--The term ``natural 
                disaster'' means plant disease, insect infestation, 
                drought, fire, freeze, flood, earthquake, lightning, or 
                other occurrence, as determined by the Secretary.
                    (C) Nursery tree grower.--The term ``nursery tree 
                grower'' means a person who produces nursery, 
                ornamental, fruit, nut, or Christmas trees for 
                commercial sale, as determined by the Secretary.
                    (D) Tree.--The term ``tree'' includes a tree, bush, 
                and vine.
            (2) Eligibility.--
                    (A) Loss.--Subject to subparagraph (B), for each of 
                fiscal years 2012 through 2017, the Secretary shall use 
                such sums as are necessary of the funds of the 
                Commodity Credit Corporation to provide assistance--
                            (i) under paragraph (3) to eligible 
                        orchardists and nursery tree growers that 
                        planted trees for commercial purposes but lost 
                        the trees as a result of a natural disaster, as 
                        determined by the Secretary; and
                            (ii) under paragraph (3)(B) to eligible 
                        orchardists and nursery tree growers that have 
                        a production history for commercial purposes on 
                        planted or existing trees but lost the trees as 
                        a result of a natural disaster, as determined 
                        by the Secretary.
                    (B) Limitation.--An eligible orchardist or nursery 
                tree grower shall qualify for assistance under 
                subparagraph (A) only if the tree mortality of the 
                eligible orchardist or nursery tree grower, as a result 
                of damaging weather or related condition, exceeds 15 
                percent (adjusted for normal mortality).
            (3) Assistance.--Subject to paragraph (4), the assistance 
        provided by the Secretary to eligible orchardists and nursery 
        tree growers for losses described in paragraph (2) shall 
        consist of--
                    (A)(i) reimbursement of 65 percent of the cost of 
                replanting trees lost due to a natural disaster, as 
                determined by the Secretary, in excess of 15 percent 
                mortality (adjusted for normal mortality); or
                    (ii) at the option of the Secretary, sufficient 
                seedlings to reestablish a stand; and
                    (B) reimbursement of 50 percent of the cost of 
                pruning, removal, and other costs incurred by an 
                eligible orchardist or nursery tree grower to salvage 
                existing trees or, in the case of tree mortality, to 
                prepare the land to replant trees as a result of damage 
                or tree mortality due to a natural disaster, as 
                determined by the Secretary, in excess of 15 percent 
                damage or mortality (adjusted for normal tree damage 
                and mortality).
            (4) Limitations on assistance.--
                    (A) Definitions of legal entity and person.--In 
                this paragraph, the terms ``legal entity'' and 
                ``person'' have the meaning given those terms in 
                section 1001(a) of the Food Security Act of 1985 (7 
                U.S.C. 1308(a)).
                    (B) Amount.--The total amount of payments received, 
                directly or indirectly, by a person or legal entity 
                (excluding a joint venture or general partnership) 
                under this subsection may not exceed $100,000 for any 
                crop year, or an equivalent value in tree seedlings.
                    (C) Acres.--The total quantity of acres planted to 
                trees or tree seedlings for which a person or legal 
                entity shall be entitled to receive payments under this 
                subsection may not exceed 500 acres.
    (f) Payments.--
            (1) Payment limitations.--
                    (A) Definitions of legal entity and person.--In 
                this subsection, the terms ``legal entity'' and 
                ``person'' have the meanings given those terms in 
                section 1001(a) of the Food Security Act of 1985 (7 
                U.S.C. 1308(a)).
                    (B) Amount.--The total amount of disaster 
                assistance payments received, directly or indirectly, 
                by a person or legal entity (excluding a joint venture 
                or general partnership) under this section (excluding 
                payments received under subsection (e)) may not exceed 
                $100,000 for any crop year.
                    (C) Direct attribution.--Subsections (d) and (e) of 
                section 1001 of the Food Security Act of 1985 (7 U.S.C. 
                1308) or any successor provisions relating to direct 
                attribution shall apply with respect to assistance 
                provided under this section.
            (2) Payment delivery.--The Secretary shall make payments 
        under this section after October 1, 2013, for losses incurred 
        in the 2012 and 2013 fiscal years, and as soon as practicable 
        for losses incurred in any year thereafter.

                       Subtitle F--Administration

SEC. 1601. ADMINISTRATION GENERALLY.

    (a) Use of Commodity Credit Corporation.--The Secretary shall use 
the funds, facilities, and authorities of the Commodity Credit 
Corporation to carry out this title.
    (b) Determinations by Secretary.--A determination made by the 
Secretary under this title shall be final and conclusive.
    (c) Regulations.--
            (1) In general.--Except as otherwise provided in this 
        subsection, not later than 90 days after the date of enactment 
        of this Act, the Secretary and the Commodity Credit 
        Corporation, as appropriate, shall promulgate such regulations 
        as are necessary to implement this title and the amendments 
        made by this title.
            (2) Procedure.--The promulgation of the regulations and 
        administration of this title and the amendments made by this 
        title and sections 11001 and 11011 of this Act shall be made 
        without regard to--
                    (A) the notice and comment provisions of section 
                553 of title 5, United States Code;
                    (B) chapter 35 of title 44, United States Code 
                (commonly known as the ``Paperwork Reduction Act''); 
                and
                    (C) 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.
            (3) Congressional review of agency rulemaking.--In carrying 
        out this subsection, the Secretary shall use the authority 
        provided under section 808 of title 5, United States Code.
    (d) Adjustment Authority Related to Trade Agreements Compliance.--
            (1) Required determination; adjustment.--If the Secretary 
        determines that expenditures under this title that are subject 
        to the total allowable domestic support levels under the 
        Uruguay Round Agreements (as defined in section 2 of the 
        Uruguay Round Agreements Act (19 U.S.C. 3501)) will exceed the 
        allowable levels for any applicable reporting period, the 
        Secretary shall, to the maximum extent practicable, make 
        adjustments in the amount of the expenditures during that 
        period to ensure that the expenditures do not exceed the 
        allowable levels.
            (2) Congressional notification.--Before making any 
        adjustment under paragraph (1), the Secretary shall submit to 
        the Committee on Agriculture of the House of Representatives 
        and the Committee on Agriculture, Nutrition, and Forestry of 
        the Senate a report describing the determination made under 
        that paragraph and the extent of the adjustment to be made.

SEC. 1602. SUSPENSION OF PERMANENT PRICE SUPPORT AUTHORITY.

    (a) Agricultural Adjustment Act of 1938.--The following provisions 
of the Agricultural Adjustment Act of 1938 shall not be applicable to 
the 2013 through 2017 crops of covered commodities (as defined in 
section 1104), cotton, and sugar and shall not be applicable to milk 
during the period beginning on the date of enactment of this Act 
through December 31, 2017:
            (1) Parts II through V of subtitle B of title III (7 U.S.C. 
        1326 et seq.).
            (2) In the case of upland cotton, section 377 (7 U.S.C. 
        1377).
            (3) Subtitle D of title III (7 U.S.C. 1379a et seq.).
            (4) Title IV (7 U.S.C. 1401 et seq.).
    (b) Agricultural Act of 1949.--The following provisions of the 
Agricultural Act of 1949 shall not be applicable to the 2013 through 
2017 crops of covered commodities (as defined in section 1104), cotton, 
and sugar and shall not be applicable to milk during the period 
beginning on the date of enactment of this Act and through December 31, 
2017:
            (1) Section 101 (7 U.S.C. 1441).
            (2) Section 103(a) (7 U.S.C. 1444(a)).
            (3) Section 105 (7 U.S.C. 1444b).
            (4) Section 107 (7 U.S.C. 1445a).
            (5) Section 110 (7 U.S.C. 1445e).
            (6) Section 112 (7 U.S.C. 1445g).
            (7) Section 115 (7 U.S.C. 1445k).
            (8) Section 201 (7 U.S.C. 1446).
            (9) Title III (7 U.S.C. 1447 et seq.).
            (10) Title IV (7 U.S.C. 1421 et seq.), other than sections 
        404, 412, and 416 (7 U.S.C. 1424, 1429, and 1431).
            (11) Title V (7 U.S.C. 1461 et seq.).
            (12) Title VI (7 U.S.C. 1471 et seq.).
    (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 2013 
through 2017.

SEC. 1603. PAYMENT LIMITATIONS.

    (a) In General.--Section 1001 of the Food Security Act of 1985 (7 
U.S.C. 1308) is amended by striking subsections (b) and (c) and 
inserting the following:
    ``(b) Limitation on Payments for Peanuts and Other Covered 
Commodities.--The total amount of payments received, directly or 
indirectly, by a person or legal entity (except a joint venture or 
general partnership) for any crop year under title I of subtitle A of 
the Agriculture Reform, Food, and Jobs Act of 2012 for--
            ``(1) peanuts may not exceed $50,000; and
            ``(2) 1 or more other covered commodities may not exceed 
        $50,000.''.
    (b) Limitation on Marketing Loan Gains and Loan Deficiency Payments 
for Peanuts and Other Covered Commodities.--Section 1001 of the Food 
Security Act of 1985 (7 U.S.C. 1308) is amended by striking subsection 
(d) and inserting the following:
    ``(d) Limitation on Marketing Loan Gains and Loan Deficiency 
Payments for Peanuts and Other Covered Commodities.--The total amount 
of marketing loan gains and loan deficiency payments received, directly 
or indirectly, by a person or legal entity (except a joint venture or 
general partnership) for any crop year under subtitle B of the 
Agriculture Reform, Food, and Jobs Act of 2012 (or a successor 
provision) for--
            ``(1) peanuts may not exceed $75,000; and
            ``(2) 1 or more other covered commodities may not exceed 
        $75,000.''.
    (c) Conforming Amendments.--
            (1) Section 1001 of the Food Security Act of 1985 (7 U.S.C. 
        1308) is amended--
                    (A) in subsection (a)(1), by striking ``section 
                1001 of the Food, Conservation, and Energy Act of 
                2008'' and inserting ``section 1104 of the Agriculture 
                Reform, Food, and Jobs Act of 2012'';
                    (B) in subsection (d), by inserting ``or title I of 
                the Agriculture Reform, Food, and Jobs Act of 2012'' 
                before the period at the end;
                    (C) in subsection (e)--
                            (i) in paragraph (1), by striking 
                        ``subsections (b) and (c) and a program 
                        described in paragraphs (1)(C)'' and inserting 
                        ``subsection (b) and a program described in 
                        paragraph (1)(B)''; and
                            (ii) in paragraph (3)(B), by striking 
                        ``subsections (b) and (c)'' each place it 
                        appears and inserting ``subsection (b)'';
                    (D) in subsection (f)--
                            (i) by striking ``or title XII'' each place 
                        it appears in paragraphs (5)(A) and (6)(A) and 
                        inserting ``, title I of the Agriculture 
                        Reform, Food, and Jobs Act of 2012, or title 
                        XII'';
                            (ii) in paragraph (2), by striking 
                        ``Subsections (b) and (c)'' and inserting 
                        ``Subsection (b)'';
                            (iii) in paragraph (4)(B), by striking 
                        ``subsection (b) or (c)'' and inserting 
                        ``subsection (b)'';
                            (iv) in paragraph (5)--
                                    (I) in subparagraph (A), by 
                                striking ``subsection (d)'' and 
                                inserting ``subsection (c)''; and
                                    (II) in subparagraph (B), by 
                                striking ``subsection (b), (c), or 
                                (d)'' and inserting ``subsection (b) or 
                                (c)''; and
                            (v) in paragraph (6)--
                                    (I) in subparagraph (A), by 
                                striking ``subsection (d), except as 
                                provided in subsection (g)'' and 
                                inserting ``subsection (c), except as 
                                provided in subsection (f)''; and
                                    (II) in subparagraph (B), by 
                                striking ``subsections (b), (c), and 
                                (d)'' and inserting ``subsections (b) 
                                and (c)'';
                    (E) in subsection (g)--
                            (i) in paragraph (1)--
                                    (I) bv striking ``subsection 
                                (f)(6)(A)'' and inserting ``subsection 
                                (e)(6)(A)'' and
                                    (II) by striking ``subsection (b) 
                                or (c)'' and inserting ``subsection 
                                (b)''; and
                            (ii) in paragraph (2)(A), by striking 
                        ``subsections (b) and (c)'' and inserting 
                        ``subsection (b)''; and
                    (F) by redesignating subsections (d) through (h) as 
                subsections (c) through (g), respectively.
            (2) Section 1001A of the Food Security Act of 1985 (7 
        U.S.C. 1308-1) is amended--
                    (A) in subsection (a), by striking ``subsections 
                (b) and (c)'' and inserting ``subsection (b)''; and
                    (B) in subsection (b)(1), by striking ``subsection 
                (b) or (c)'' and inserting ``subsection (b)''.
            (3) Section 1001B(a) of the Food Security Act of 1985 (7 
        U.S.C. 1308-2(a)) is amended in the matter preceding paragraph 
        (1) by striking ``subsections (b) and (c)'' and inserting 
        ``subsection (b)''.
            (4) Section 1001C(a) of the Food Security Act of 1985 (7 
        U.S.C. 1308-3(a)) is amended by inserting ``title I of the 
        Agriculture Reform, Food, and Jobs Act of 2012,'' after 
        ``2008,''.
    (d) Application.--The amendments made by this section shall apply 
beginning with the 2013 crop year.

SEC. 1604. PAYMENTS LIMITED TO ACTIVE FARMERS.

    Section 1001A of the Food Security Act of 1985 (7 U.S.C. 1308-1) is 
amended--
            (1) in subsection (b)(2)--
                    (A) by striking ``or active personal management'' 
                each place it appears in subparagraphs (A)(i)(II) and 
                (B)(ii); and
                    (B) in subparagraph (C), by striking ``, as applied 
                to the legal entity, are met by the legal entity, the 
                partners or members making a significant contribution 
                of personal labor or active personal management'' and 
                inserting ``are met by partners or members making a 
                significant contribution of personal labor, those 
                partners or members''; and
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking subparagraph (A) and 
                        inserting the following:
                    ``(A) the landowner share-rents the land at a rate 
                that is usual and customary;'';
                            (ii) in subparagraph (B), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(C) the share of the payments received by the 
                landowner is commensurate with the share of the crop or 
                income received as rent.'';
                    (B) in paragraph (2)(A), by striking ``active 
                personal management or'';
                    (C) in paragraph (5)--
                            (i) by striking ``(5)'' and all that 
                        follows through ``(A) In general.--A person'' 
                        and inserting the following:
            ``(5) Custom farming services.--A person'';
                            (ii) by inserting ``under usual and 
                        customary terms'' after ``services''; and
                            (iii) by striking subparagraph (B); and
                    (D) by adding at the end the following:
            ``(7) Farm managers.--A person who otherwise meets the 
        requirements of this subsection other than (b)(2)(A)(i)(II) 
        shall be considered to be actively engaged in farming, as 
        determined by the Secretary, with respect to the farming 
        operation, including a farming operation that is a sole 
        proprietorship, a legal entity such as a joint venture or 
        general partnership, or a legal entity such as a corporation or 
        limited partnership, if the person--
                    ``(A) makes a significant contribution of 
                management to the farming operation necessary for the 
                farming operation, taking into account--
                            ``(i) the size and complexity of the 
                        farming operation; and
                            ``(ii) the management requirements normally 
                        and customarily required by similar farming 
                        operations;
                    ``(B) is the only person in the farming operation 
                qualifying as actively engaged in farming;
                    ``(C) does not use the management contribution 
                under this paragraph to qualify as actively engaged in 
                more than 1 farming operation; and
                    ``(D) manages a farm operation that does not 
                substantially share equipment, labor, or management 
                with persons or legal entities that with the person 
                collectively receive, directly or indirectly, an amount 
                equal to more than the applicable limits under section 
                1001(b).''.

SEC. 1605. ADJUSTED GROSS INCOME LIMITATION.

    (a) In General.--Section 1001D(b)) of the Food Security Act of 1985 
(7 U.S.C. 1308-3a(b)) is amended by striking paragraph (1) and 
inserting the following:
            ``(1) Commodity programs.--
                    ``(A) Limitation.--Notwithstanding any other 
                provision of law, a person or legal entity shall not be 
                eligible to receive any benefit described in 
                subparagraph (B) during a crop, fiscal or program year, 
                as appropriate, if the average adjusted gross income 
                (or comparable measure over the 3 taxable years 
                preceding the most immediately preceding complete 
                taxable year, as determined by the Secretary) of the 
                person or legal entity exceeds $750,000.
                    ``(B) Covered benefits.--Subparagraph (A) applies 
                with respect to the following:
                            ``(i) A payment under section 1105 of the 
                        Agriculture Reform, Food, and Jobs Act of 2012.
                            ``(ii) A marketing loan gain or loan 
                        deficiency payment under subtitle B of title I 
                        of the Agriculture Reform, Food, and Jobs Act 
                        of 2012.
                            ``(iii) A payment under subtitle E of the 
                        Agriculture Reform, Food, and Jobs Act of 
                        2012.''.
                            ``(iv) A payment under section 196 of the 
                        Federal Agriculture Improvement and Reform Act 
                        of 1996 (7 U.S.C. 7333).''.
    (b) Application.--The amendments made by this section shall apply 
beginning with the 2013 crop year.

SEC. 1606. GEOGRAPHICALLY DISADVANTAGED FARMERS AND RANCHERS.

    Section 1621(d) of the Food, Conservation, and Energy Act of 2008 
(7 U.S.C. 8792(d)) is amended by striking ``2012'' and inserting 
``2017''.

SEC. 1607. PERSONAL LIABILITY OF PRODUCERS FOR DEFICIENCIES.

    Section 164 of the Federal Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7284) is amended by striking ``and title I of the 
Food, Conservation, and Energy Act of 2008'' each place it appears and 
inserting ``title I of the Food, Conservation, and Energy Act of 2008 
(7 U.S.C. 8702 et seq.), and title I of the Agriculture Reform, Food, 
and Jobs Act of 2012''.

SEC. 1608. PREVENTION OF DECEASED INDIVIDUALS RECEIVING PAYMENTS UNDER 
              FARM COMMODITY PROGRAMS.

    (a) Reconciliation.--At least twice each year, the Secretary shall 
reconcile social security numbers of all individuals who receive 
payments under this title, whether directly or indirectly, with the 
Commissioner of Social Security to determine if the individuals are 
alive.
    (b) Preclusion.--The Secretary shall preclude the issuance of 
payments to, and on behalf of, deceased individuals that were not 
eligible for payments.

SEC. 1609. APPEALS.

    (a) Direction, Control, and Support.--Section 272 of the Department 
of Agriculture Reorganization Act of 1994 (7 U.S.C. 6992) is amended by 
striking subsection (c) and inserting the following:
    ``(c) Direction, Control, and Support.--
            ``(1) Direction and control.--
                    ``(A) In general.--Except as provided in paragraph 
                (2), the Director shall be free from the direction and 
                control of any person other than the Secretary or the 
                Deputy Secretary of Agriculture.
                    ``(B) Administrative support.--The Division shall 
                not receive administrative support (except on a 
                reimbursable basis) from any agency other than the 
                Office of the Secretary.
                    ``(C) Prohibition on delegation.--The Secretary may 
                not delegate to any other officer or employee of the 
                Department, other than the Deputy Secretary of 
                Agriculture or the Director, the authority of the 
                Secretary with respect to the Division.
            ``(2) Exception.--The Assistant Secretary for 
        Administration is authorized to investigate, enforce, and 
        implement the provisions in law, Executive order, or 
        regulations that relate in general to competitive and excepted 
        service positions and employment within the Division, including 
        the position of Director, and such authority may be further 
        delegated to subordinate officials.''.
    (b) Determination of Appealability of Agency Decisions.--Section 
272 of the Department of Agriculture Reorganization Act of 1994 (7 
U.S.C. 6992) is amended by striking subsection (d) and inserting the 
following:
    ``(d) Determination of Appealability of Agency Decisions.--
            ``(1) Definition of a matter of general applicability.--In 
        this subsection, the term `a matter of general applicability' 
        means a matter that challenges the merits or authority of a 
        rule, procedure, local or national program practice, or 
        determination of an agency that applies, or can apply, to more 
        than 1 interested party as opposed to the particular 
        application of the rule, procedure, or practice to a specific 
        set of facts or the facts themselves as the facts apply to 1 
        particular interested party.
            ``(2) Matters not subject to appeal.--The Division may not 
        hear appeals--
                    ``(A) unless the determination of the agency is 
                adverse to the appellant;
                    ``(B) that involve matters of general 
                applicability; and
                    ``(C) that involve requests for equitable relief 
                unless the equitable relief has been denied by the 
                agency.
            ``(3) Equitable relief.--
                    ``(A) In general.--An appeal requesting equitable 
                relief may not be granted by the Director to an 
                appellant unless, using the rules and practices that 
                the agency applies to itself, the agency could in fact 
                have granted the relief because the appellant acted in 
                good faith, but failed to fully comply with the 
                requirement of the rule or practice of the agency.
                    ``(B) Remand.--If it cannot be determined whether 
                the agency would have granted equitable relief because 
                the appellant acted in good faith, but failed to comply 
                with the rule or practice of the agency, the matter 
                shall be remanded to the agency for further 
                consideration.
            ``(4) Determination of appealability.--If an officer, 
        employee, or committee of an agency determines that a decision 
        is not appealable and a participant appeals the decision to the 
        Director, the Director shall determine whether the decision is 
        adverse to the individual participant and appealable or is a 
        matter of general applicability and not subject to appeal.
            ``(5) Appealability of determination.--The determination of 
        the Director as to whether a decision is appealable is 
        final.''.
    (c) Equitable Relief.--Section 278 of the Department of Agriculture 
Reorganization Act of 1994 (7 U.S.C. 6998) is amended by striking 
subsection (d).
    (d) Conforming Amendment.--Section 296(b) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)) is amended--
            (1) in paragraph (6)(C), by striking ``or'' at the end;
            (2) in paragraph (7), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(8) the authority of the Secretary to carry out 
        amendments to sections 272 and 278 made by the Agriculture 
        Reform, Food, and Jobs Act of 2012.''.

SEC. 1610. TECHNICAL CORRECTIONS.

    (a) Section 359f(c)(1)(B) of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1359ff(c)(1)(B)) is amended by adding a period at the 
end.
    (b)(1) Section 1603(g) of the Food, Conservation, and Energy Act of 
2008 (Public Law 110-246; 122 Stat. 1739) is amended in paragraphs (2) 
through (6) and the amendments made by those paragraphs by striking 
``1703(a)'' each place it appears and inserting ``1603(a)''.
    (2) This subsection and the amendments made by this subsection take 
effect as if included in the Food, Conservation, and Energy Act of 2008 
(Public Law 110-246; 122 Stat. 1651).

SEC. 1611. ASSIGNMENT OF PAYMENTS.

    (a) In General.--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 payments made under this 
title.
    (b) Notice.--The producer making the assignment, or the assignee, 
shall provide the Secretary with notice, in such manner as the 
Secretary may require, of any assignment made under this section.

SEC. 1612. TRACKING OF BENEFITS.

    As soon as practicable after the date of enactment of this Act, the 
Secretary may track the benefits provided, directly or indirectly, to 
individuals and entities under titles I and II and the amendments made 
by those titles.

SEC. 1613. SIGNATURE AUTHORITY.

    (a) In General.--In carrying out this title and title II and 
amendments made by those titles, if the Secretary approves a document, 
the Secretary shall not subsequently determine the document is 
inadequate or invalid because of the lack of authority of any person 
signing the document on behalf of the applicant or any other 
individual, entity, general partnership, or joint venture, or the 
documents relied upon were determined inadequate or invalid, unless the 
person signing the program document knowingly and willfully falsified 
the evidence of signature authority or a signature.
    (b) Affirmation.--
            (1) In general.--Nothing in this section prohibits the 
        Secretary from asking a proper party to affirm any document 
        that otherwise would be considered approved under subsection 
        (a).
            (2) No retroactive effect.--A denial of benefits based on a 
        lack of affirmation under paragraph (1) shall not be 
        retroactive with respect to third-party producers who were not 
        the subject of the erroneous representation of authority, if 
        the third-party producers--
                    (A) relied on the prior approval by the Secretary 
                of the documents in good faith; and
                    (B) substantively complied with all program 
                requirements.

SEC. 1614. IMPLEMENTATION.

    (a) Streamlining.--In implementing this title, the Secretary shall, 
to the maximum extent practicable--
            (1) seek to reduce administrative burdens and costs to 
        producers by streamlining and reducing paperwork, forms, and 
        other administrative requirements;
            (2) improve coordination, information sharing, and 
        administrative work with the Risk Management Agency and the 
        Natural Resources Conservation Service; and
            (3) take advantage of new technologies to enhance 
        efficiency and effectiveness of program delivery to producers.
    (b) Implementation.--On October 1, 2013, the Secretary shall make 
available to the Farm Service Agency to carry out this title 
$100,000,000.

                         TITLE II--CONSERVATION

                Subtitle A--Conservation Reserve Program

SEC. 2001. EXTENSION AND ENROLLMENT REQUIREMENTS OF CONSERVATION 
              RESERVE PROGRAM.

    (a) Extension.--Section 1231(a) of the Food Security Act of 1985 
(16 U.S.C. 3831(a)) is amended by striking ``2012'' and inserting 
``2017''.
    (b) Eligible Land.--Section 1231(b) of the Food Security Act of 
1985 (16 U.S.C. 3831(b)) is amended--
            (1) in paragraph (1)(B), by striking ``the date of 
        enactment of the Food, Conservation, and Energy Act of 2008'' 
        and inserting ``the date of enactment of the Agriculture 
        Reform, Food, and Jobs Act of 2012'';
            (2) by striking paragraph (2) and redesignating paragraph 
        (3) as paragraph (2);
            (3) by inserting before paragraph (4) the following:
            ``(3) grassland that--
                    ``(A) contains forbs or shrubland (including 
                improved rangeland and pastureland) for which grazing 
                is the predominant use;
                    ``(B) is located in an area historically dominated 
                by grassland; and
                    ``(C) could provide habitat for animal and plant 
                populations of significant ecological value if the land 
                is retained in its current use or restored to a natural 
                condition;'';
            (4) in paragraph (4)(C), by striking ``filterstrips devoted 
        to trees or shrubs'' and inserting ``filterstrips and riparian 
        buffers devoted to trees, shrubs, or grasses''; and
            (5) by striking paragraph (5) and inserting the following:
            ``(5) the portion of land in a field not enrolled in the 
        conservation reserve in a case in which--
                    ``(A) more than 50 percent of the land in the field 
                is enrolled as a buffer or filterstrip or more than 75 
                percent of the land in the field is enrolled in a 
                practice other than as a buffer or filterstrip; and
                    ``(B) the remainder of the field is--
                            ``(i) infeasible to farm; and
                            ``(ii) enrolled at regular rental rates.''.
    (c) Planting Status of Certain Land.--Section 1231(c) of the Food 
Security Act of 1985 (16 U.S.C. 3831(c)) is amended by striking ``if'' 
and all that follows through the period at the end and inserting ``if, 
during the crop year, the land was devoted to a conserving use.''.
    (d) 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) Enrollment.--
            ``(1) Maximum acreage enrolled.--The Secretary may maintain 
        in the conservation reserve at any 1 time during--
                    ``(A) fiscal year 2012, no more than 32,000,000 
                acres;
                    ``(B) fiscal year 2013, no more than 30,000,000 
                acres;
                    ``(C) fiscal year 2014, no more than 27,500,000 
                acres;
                    ``(D) fiscal year 2015, no more than 26,500,000 
                acres;
                    ``(E) fiscal year 2016, no more than 25,500,000 
                acres; and
                    ``(F) fiscal year 2017, no more than 25,000,000 
                acres.
            ``(2) Grassland.--
                    ``(A) Limitation.--For purposes of applying the 
                limitations in paragraph (1), no more than 1,500,000 
                acres of the land described in subsection (b)(3) may be 
                enrolled in the program at any 1 time during the 2013 
                through 2017 fiscal years.
                    ``(B) Priority.--In enrolling acres under 
                subparagraph (A), the Secretary may give priority to 
                land with expiring conservation reserve program 
                contracts.
                    ``(C) Method of enrollment.--In enrolling acres 
                under subparagraph (A), the Secretary shall make the 
                program available to owners or operators of eligible 
                land at least once during each fiscal year.''.
    (e) Duration of Contract.--Section 1231(e) of the Food Security Act 
of 1985 (16 U.S.C. 3831(e)) is amended by striking paragraphs (2) and 
(3) and inserting the following:
            ``(2) Special rule for certain land.--In the case of land 
        devoted to hardwood trees, shelterbelts, windbreaks, or 
        wildlife corridors under a contract entered into under this 
        subchapter, the owner or operator of the land may, within the 
        limitations prescribed under this section, specify the duration 
        of the contract.''.
    (f) Conservation Priority Areas.--Section 1231(f) of the Food 
Security Act of 1985 (16 U.S.C. 3831(f)) is amended--
            (1) in paragraph (1), by striking ``watershed areas of the 
        Chesapeake Bay Region, the Great Lakes Region, the Long Island 
        Sound Region, and other'';
            (2) in paragraph (2), by striking ``watersheds.--
        Watersheds'' and inserting ``areas.--Areas''; and
            (3) in paragraph (3), by striking ``a watershed's 
        designation--'' and all that follows through the period at the 
        end and inserting ``an area's designation if the Secretary 
        finds that the area no longer contains actual and significant 
        adverse water quality or habitat impacts related to 
        agricultural production activities.''.

SEC. 2002. FARMABLE WETLAND PROGRAM.

    (a) Extension.--Section 1231B(a)(1) of the Food Security Act of 
1985 (16 U.S.C. 3831b(a)(1)) is amended--
            (1) by striking ``2012'' and inserting ``2017''; and
            (2) by striking ``a program'' and inserting ``a farmable 
        wetland program''.
    (b) Eligible Acreage.--Section 1231B(b)(1)(B) of the Food Security 
Act of 1985 (16 U.S.C. 3831b(b)(1)(B)) is amended by striking ``flow 
from a row crop agriculture drainage system'' and inserting ``surface 
and subsurface flow from row crop agricultural production''.
    (c) Clerical Amendments.--Section 1231B of the Food Security Act of 
1985 (16 U.S.C. 3831b) is amended--
            (1) by striking the heading and inserting the following:

``SEC. 1231B. FARMABLE WETLAND PROGRAM.'';

        and
            (2) in subsection (f)(2), by striking ``section 
        1234(c)(2)(B)'' and inserting ``section 1234(c)(2)(A)(ii)''.

SEC. 2003. DUTIES OF OWNERS AND OPERATORS.

    (a) Limitation on Harvesting, Grazing or Commercial Use of 
Forage.--Section 1232(a)(8) of the Food Security Act of 1985 (16 U.S.C. 
3832(a)(8)) is amended by striking ``except that'' and all that follows 
through the semicolon at the end of the paragraph and inserting 
``except as provided in section 1233(b);''.
    (b) Conservation Plan Requirements.--Section 1232 of the Food 
Security Act of 1985 (16 U.S.C. 3832) is amended by striking subsection 
(b) and inserting the following:
    ``(b) Conservation Plans.--The plan referred to in subsection 
(a)(1) shall set forth--
            ``(1) the conservation measures and practices to be carried 
        out by the owner or operator during the term of the contract; 
        and
            ``(2) the commercial use, if any, to be permitted on the 
        land during the term.''.
    (c) Rental Payment Reduction.--Section 1232 of the Food Security 
Act of 1985 (16 U.S.C. 3832) is amended by striking subsection (d).

SEC. 2004. DUTIES OF THE SECRETARY.

    Section 1233 of the Food Security Act of 1985 (16 U.S.C. 3833) is 
amended to read as follows:

``SEC. 1233. DUTIES OF THE SECRETARY.

    ``(a) Cost-share and Rental Payments.--In return for a contract 
entered into by an owner or operator, the Secretary shall--
            ``(1) share the cost of carrying out the conservation 
        measures and practices set forth in the contract for which the 
        Secretary determines that cost sharing is appropriate and in 
        the public interest; and
            ``(2) for a period of years not in excess of the term of 
        the contract, pay an annual rental payment in an amount 
        necessary to compensate for--
                    ``(A) the conversion of highly erodible cropland or 
                other eligible land normally devoted to the production 
                of an agricultural commodity on a farm or ranch to a 
                less intensive use;
                    ``(B) the retirement of any cropland base and 
                allotment history that the owner or operator agrees to 
                retire permanently; and
                    ``(C) the development and management of grassland 
                for multiple natural resource conservation benefits, 
                including soil, water, air, and wildlife.
    ``(b) Specified Activities Permitted.--The Secretary shall permit 
certain activities or commercial uses of land that is subject to the 
contract if those activities or uses are consistent with a plan 
approved by the Secretary and include--
            ``(1) harvesting, grazing, or other commercial use of the 
        forage in response to drought, flooding, or other emergency 
        without any reduction in the rental rate;
            ``(2) grazing by livestock of a beginning farmer or rancher 
        without any reduction in the rental rate, if the grazing is--
                    ``(A) consistent with the conservation of soil, 
                water quality, and wildlife habitat (including habitat 
                during the primary nesting season for critical birds in 
                the area); and
                    ``(B) described in subparagraph (B) or (C) of 
                paragraph (3);
            ``(3) consistent with the conservation of soil, water 
        quality, and wildlife habitat (including habitat during the 
        primary nesting season for critical birds in the area) and in 
        exchange for a reduction of not less than 25 percent in the 
        annual rental rate for the acres covered by the authorized 
        activity--
                    ``(A) managed harvesting and other commercial use 
                (including the managed harvesting of biomass), except 
                that in permitting those activities the Secretary, in 
                coordination with the State technical committee--
                            ``(i) shall develop appropriate vegetation 
                        management requirements; and
                            ``(ii) shall identify periods during which 
                        the activities may be conducted, such that the 
                        frequency is at least once every 5 years but 
                        not more than once every 3 years;
                    ``(B) prescribed grazing for the control of 
                invasive species, which may be conducted annually;
                    ``(C) routine grazing, except that in permitting 
                routine grazing, the Secretary, in coordination with 
                the State technical committee--
                            ``(i) shall develop appropriate vegetation 
                        management requirements and stocking rates for 
                        the land that are suitable for continued 
                        routine grazing; and
                            ``(ii) shall identify the periods during 
                        which routine grazing may be conducted, such 
                        that the frequency is not more than once every 
                        2 years, taking into consideration regional 
                        differences such as--
                                    ``(I) climate, soil type, and 
                                natural resources;
                                    ``(II) the number of years that 
                                should be required between routine 
                                grazing activities; and
                                    ``(III) how often during a year in 
                                which routine grazing is permitted that 
                                routine grazing should be allowed to 
                                occur; and
                    ``(D) the installation of wind turbines and 
                associated access, except that in permitting the 
                installation of wind turbines, the Secretary shall 
                determine the number and location of wind turbines that 
                may be installed, taking into account--
                            ``(i) the location, size, and other 
                        physical characteristics of the land;
                            ``(ii) the extent to which the land 
                        contains threatened or endangered wildlife and 
                        wildlife habitat; and
                            ``(iii) the purposes of the conservation 
                        reserve program under this subchapter; and
            ``(4) the intermittent and seasonal use of vegetative 
        buffer practices incidental to agricultural production on land 
        adjacent to the buffer such that the permitted use does not 
        destroy the permanent vegetative cover.
    ``(c) Authorized Activities on Grassland.--Notwithstanding section 
1232(a)(8), for eligible land described in section 1231(b)(3), the 
Secretary shall permit the following activities:
            ``(1) Common grazing practices, including maintenance and 
        necessary cultural practices, on the land in a manner that is 
        consistent with maintaining the viability of grassland, forb, 
        and shrub species appropriate to that locality.
            ``(2) Haying, mowing, or harvesting for seed production, 
        subject to appropriate restrictions during the primary nesting 
        season for critical birds in the area.
            ``(3) Fire presuppression, rehabilitation, and construction 
        of fire breaks.
            ``(4) Grazing-related activities, such as fencing and 
        livestock watering.
    ``(d) Resource Conserving Use.--
            ``(1) In general.--Beginning on the date that is 1 year 
        before the date of termination of a contract under the program, 
        the Secretary shall allow an owner or operator to make 
        conservation and land improvements that facilitate maintaining 
        protection of highly erodible land after expiration of the 
        contract.
            ``(2) Conservation plan.--The Secretary shall require an 
        owner or operator carrying out the activities described in 
        paragraph (1) to develop and implement a conservation plan.
            ``(3) Reenrollment prohibited.--Land altered under 
        paragraph (1) may not be reenrolled in the conservation reserve 
        program for 5 years.
            ``(4) Payment.--The Secretary shall provide an annual 
        payment that is reduced in an amount commensurate with any 
        income or other compensation received as a result of the 
        activities carried out under paragraph (1).''.

SEC. 2005. PAYMENTS.

    (a) Trees, Windbreaks, Shelterbelts, and Wildlife Corridors.--
Section 1234(b)(3)(A) of the Food Security Act of 1985 (16 U.S.C. 
3834(b)(3)(A)) is amended--
            (1) in clause (i), by inserting ``and'' after the 
        semicolon;
            (2) by striking clause (ii); and
            (3) by redesignating clause (iii) as clause (ii).
    (b) Incentives.--Section 1234(b)(3)(B) of the Food Security Act of 
1985 (16 U.S.C. 3834(b)(3)(B)) is amended--
            (1) in clause (i), by inserting ``, practices to improve 
        the condition of resources on the land,'' after ``operator)''; 
        and
            (2) by adding at the end the following:
                            ``(iii) Incentives.--In making rental 
                        payments to an owner or operator of land 
                        described in subparagraph (A), the Secretary 
                        may provide incentive payments sufficient to 
                        encourage proper thinning and practices to 
                        improve the condition of resources on the 
                        land.''.
    (c) Annual Rental Payments.--Section 1234(c) of the Food Security 
Act of 1985 (16 U.S.C. 3834(c)) is amended--
            (1) in paragraph (1), by inserting ``and other eligible 
        land'' after ``highly erodible cropland'' both places it 
        appears;
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Methods of determination.--
                    ``(A) In general.--The amounts payable to owners or 
                operators in the form of rental payments under 
                contracts entered into under this subchapter may be 
                determined through--
                            ``(i) the submission of bids for such 
                        contracts by owners and operators in such 
                        manner as the Secretary may prescribe; or
                            ``(ii) such other means as the Secretary 
                        determines are appropriate.
                    ``(B) Grassland.--In the case of eligible land 
                described in section 1231(b)(3), the Secretary shall 
                make annual payments in an amount that is not more than 
                75 percent of the grazing value of the land covered by 
                the contract.''; and
            (3) in paragraph (5)(A)--
                    (A) by striking ``The Secretary'' and inserting the 
                following:
                            ``(i) Survey.--The Secretary''; and
                    (B) by adding at the end the following:
                            ``(ii) Use.--The Secretary may use the 
                        survey of dryland cash rental rates described 
                        in clause (i) as a factor in determining rental 
                        rates under this section as the Secretary 
                        determines appropriate.''.
    (d) Payment Schedule.--Section 1234 of the Food Security Act of 
1985 (16 U.S.C. 3834) is amended by striking subsection (d) and 
inserting the following:
    ``(d) Payment Schedule.--
            ``(1) In general.--Except as otherwise provided in this 
        section, payments under this subchapter shall be made in cash 
        in such amount and on such time schedule as is agreed on and 
        specified in the contract.
            ``(2) Source.--Payments under this subchapter shall be made 
        using the funds of the Commodity Credit Corporation.
            ``(3) Advance payment.--Payments under this subchapter may 
        be made in advance of determination of performance.''.
    (e) Payment Limitation.--Section 1234(f) of the Food Security Act 
of 1985 (16 U.S.C. 3834(f)) is amended--
            (1) in paragraph (1), by striking ``, including rental 
        payments made in the form of in-kind commodities,'';
            (2) by striking paragraph (3); and
            (3) by redesignating paragraph (4) as paragraph (2).

SEC. 2006. CONTRACT REQUIREMENTS.

    Section 1235(f) of the Food Security Act of 1985 (16 U.S.C. 
3835(f)) is amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``Duties'' and all that follows through ``a 
                beginning farmer'' and inserting ``Transition to 
                covered farmer or rancher.--In the case of a contract 
                modification approved in order to facilitate the 
                transfer of land subject to a contract from a retired 
                farmer or rancher to a beginning farmer'';
                    (B) in subparagraph (D), by striking ``the farmer 
                or rancher'' and inserting ``the covered farmer or 
                rancher''; and
                    (C) in subparagraph (E), by striking ``section 
                1001A(b)(3)(B)'' and inserting ``section 1001''; and
            (2) in paragraph (2), by striking ``requirement of section 
        1231(h)(4)(B)'' and inserting ``option provided under section 
        1234(c)(2)(A)(ii)''.

SEC. 2007. CONVERSION OF LAND SUBJECT TO CONTRACT TO OTHER CONSERVING 
              USES.

    Section 1235A of the Food Security Act of 1985 (16 U.S.C. 3835a) is 
repealed.

SEC. 2008. EFFECTIVE DATE.

    (a) In General.--The amendments made by this title shall take 
effect on October 1, 2012, except, the amendment made by section 
2001(d), which shall take effect on the date of enactment of this Act.
    (b) Effect on Existing Contracts.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this title shall not affect the validity or 
        terms of any contract entered into by the Secretary of 
        Agriculture under 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.) before October 1, 2012, or any payments required to be 
        made in connection with the contract.
            (2) Updating of existing contracts.--The Secretary shall 
        permit an owner or operator with a contract entered into under 
        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.) before 
        October 1, 2012, to update the contract to reflect the 
        activities and uses of land under contract permitted under the 
        terms and conditions of paragraphs (1) and (2) of section 
        1233(b) of that Act (as amended by section 2004).

              Subtitle B--Conservation Stewardship Program

SEC. 2101. CONSERVATION STEWARDSHIP PROGRAM.

    (a) Revision of Current Program.--Subchapter B of chapter 2 of 
subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 
3838d et seq.) is amended to read as follows:

            ``Subchapter B--Conservation Stewardship Program

``SEC. 1238D. DEFINITIONS.

    ``In this subchapter:
            ``(1) Agricultural operation.--The term `agricultural 
        operation' means all eligible land, whether or not contiguous, 
        that is--
                    ``(A) under the effective control of a producer at 
                the time the producer enters into a contract under the 
                program; and
                    ``(B) operated with equipment, labor, management, 
                and production or cultivation practices that are 
                substantially separate from other agricultural 
                operations, as determined by the Secretary.
            ``(2) Conservation activities.--
                    ``(A) In general.--The term `conservation 
                activities' means conservation systems, practices, or 
                management measures.
                    ``(B) Inclusions.--The term `conservation 
                activities' includes--
                            ``(i) structural measures, vegetative 
                        measures, and land management measures, 
                        including agriculture drainage management 
                        systems, as determined by the Secretary; and
                            ``(ii) planning needed to address a 
                        priority resource concern.
            ``(3) Conservation stewardship plan.--The term 
        `conservation stewardship plan' means a plan that--
                    ``(A) identifies and inventories priority resource 
                concerns;
                    ``(B) establishes benchmark data and conservation 
                objectives;
                    ``(C) describes conservation activities to be 
                implemented, managed, or improved; and
                    ``(D) includes a schedule and evaluation plan for 
                the planning, installation, and management of the new 
                and existing conservation activities.
            ``(4) Eligible land.--
                    ``(A) In general.--The term `eligible land' means--
                            ``(i) private and tribal land on which 
                        agricultural commodities, livestock, or forest-
                        related products are produced; and
                            ``(ii) land associated with the land 
                        described in clause (i) on which priority 
                        resource concerns could be addressed through a 
                        contract under the program.
                    ``(B) Inclusions.--The term `eligible land' 
                includes--
                            ``(i) cropland;
                            ``(ii) grassland;
                            ``(iii) rangeland;
                            ``(iv) pastureland;
                            ``(v) nonindustrial private forest land; 
                        and
                            ``(vi) other agricultural land (including 
                        cropped woodland, marshes, and agricultural 
                        land used for the production of livestock), as 
                        determined by the Secretary.
            ``(5) Priority resource concern.--The term `priority 
        resource concern' means a natural resource concern or problem, 
        as determined by the Secretary, that--
                    ``(A) is identified at the national, State or local 
                level, as a priority for a particular area of the 
                State;
                    ``(B) represents a significant concern in a State 
                or region; and
                    ``(C) is likely to be addressed successfully 
                through the implementation of conservation activities 
                under this program.
            ``(6) Program.--The term `program' means the conservation 
        stewardship program established by this subchapter.
            ``(7) Stewardship threshold.--The term `stewardship 
        threshold' means the level of management required, as 
        determined by the Secretary, to conserve and improve the 
        quality and condition of a natural resource.

``SEC. 1238E. CONSERVATION STEWARDSHIP PROGRAM.

    ``(a) Establishment and Purpose.--During each of fiscal years 2013 
through 2017, the Secretary shall carry out a conservation stewardship 
program to encourage producers to address priority resource concerns 
and improve and conserve the quality and condition of natural resources 
in a comprehensive manner--
            ``(1) by undertaking additional conservation activities; 
        and
            ``(2) by improving, maintaining, and managing existing 
        conservation activities.
    ``(b) Exclusions.--
            ``(1) Land enrolled in other conservation programs.--
        Subject to paragraph (2), the following land (even if covered 
        by the definition of eligible land) is not eligible for 
        enrollment in the program:
                    ``(A) Land enrolled in the conservation reserve 
                program.
                    ``(B) Land enrolled in the Agricultural 
                Conservation Easement Program in a wetland easement.
                    ``(C) Land enrolled in the conservation security 
                program.
            ``(2) Conversion to cropland.--Eligible land used for crop 
        production after October 1, 2012, that had not been planted, 
        considered to be planted, or devoted to crop production for at 
        least 4 of the 6 years preceding that date shall not be the 
        basis for any payment under the program, unless the land does 
        not meet the requirement because--
                    ``(A) the land had previously been enrolled in the 
                conservation reserve program;
                    ``(B) the land has been maintained using long-term 
                crop rotation practices, as determined by the 
                Secretary; or
                    ``(C) the land is incidental land needed for 
                efficient operation of the farm or ranch, as determined 
                by the Secretary.

``SEC. 1238F. STEWARDSHIP CONTRACTS.

    ``(a) Submission of Contract Offers.--To be eligible to participate 
in the conservation stewardship program, a producer shall submit a 
contract offer for the agricultural operation that--
            ``(1) demonstrates to the satisfaction of the Secretary 
        that the producer, at the time of the contract offer, is 
        meeting the stewardship threshold for at least 2 priority 
        resource concerns; and
            ``(2) would, at a minimum, meet or exceed the stewardship 
        threshold for at least 1 additional priority resource concern 
        by the end of the stewardship contract by--
                    ``(A) installing and adopting additional 
                conservation activities; and
                    ``(B) improving, maintaining, and managing existing 
                conservation activities on the agricultural operation 
                in a manner that increases or extends the conservation 
                benefits in place at the time the contract offer is 
                accepted by the Secretary.
    ``(b) Evaluation of Contract Offers.--
            ``(1) Ranking of applications.--In evaluating contract 
        offers the Secretary shall rank applications based on--
                    ``(A) the level of conservation treatment on all 
                applicable priority resource concerns at the time of 
                application;
                    ``(B) the degree to which the proposed conservation 
                activities effectively increase conservation 
                performance;
                    ``(C) the number of applicable priority resource 
                concerns proposed to be treated to meet or exceed the 
                stewardship threshold by the end of the contract;
                    ``(D) the extent to which other priority resource 
                concerns will be addressed to meet or exceed the 
                stewardship threshold by the end of the contract 
                period;
                    ``(E) the extent to which the actual and 
                anticipated conservation benefits from the contract are 
                provided at the least cost relative to other similarly 
                beneficial contract offers; and
                    ``(F) the extent to which priority resource 
                concerns will be addressed when transitioning from the 
                conservation reserve program to agricultural 
                production.
            ``(2) Prohibition.--The Secretary may not assign a higher 
        priority to any application because the applicant is willing to 
        accept a lower payment than the applicant would otherwise be 
        eligible to receive.
            ``(3) Additional criteria.--The Secretary may develop and 
        use such additional criteria that the Secretary determines are 
        necessary to ensure that national, State, and local priority 
        resource concerns are effectively addressed.
    ``(c) Entering Into Contracts.--After a determination that a 
producer is eligible for the program under subsection (a), and a 
determination that the contract offer ranks sufficiently high under the 
evaluation criteria under subsection (b), the Secretary shall enter 
into a conservation stewardship contract with the producer to enroll 
the eligible land to be covered by the contract.
    ``(d) Contract Provisions.--
            ``(1) Term.--A conservation stewardship contract shall be 
        for a term of 5 years.
            ``(2) Required provisions.--The conservation stewardship 
        contract of a producer shall--
                    ``(A) state the amount of the payment the Secretary 
                agrees to make to the producer for each year of the 
                conservation stewardship contract under section 
                1238G(d);
                    ``(B) require the producer--
                            ``(i) to implement a conservation 
                        stewardship plan that describes the program 
                        purposes to be achieved through 1 or more 
                        conservation activities;
                            ``(ii) to maintain and supply information 
                        as required by the Secretary to determine 
                        compliance with the conservation stewardship 
                        plan and any other requirements of the program; 
                        and
                            ``(iii) not to conduct any activities on 
                        the agricultural operation that would tend to 
                        defeat the purposes of the program;
                    ``(C) permit all economic uses of the eligible land 
                that--
                            ``(i) maintain the agricultural nature of 
                        the land; and
                            ``(ii) are consistent with the conservation 
                        purposes of the conservation stewardship 
                        contract;
                    ``(D) include a provision to ensure that a producer 
                shall not be considered in violation of the contract 
                for failure to comply with the contract due to 
                circumstances beyond the control of the producer, 
                including a disaster or related condition, as 
                determined by the Secretary;
                    ``(E) include provisions where upon the violation 
                of a term or condition of the contract at any time the 
                producer has control of the land--
                            ``(i) if the Secretary determines that the 
                        violation warrants termination of the 
                        contract--
                                    ``(I) to forfeit all rights to 
                                receive payments under the contract; 
                                and
                                    ``(II) to refund all or a portion 
                                of the payments received by the 
                                producer under the contract, including 
                                any interest on the payments, as 
                                determined by the Secretary; or
                            ``(ii) if the Secretary determines that the 
                        violation does not warrant termination of the 
                        contract, to refund or accept adjustments to 
                        the payments provided to the producer, as the 
                        Secretary determines to be appropriate;
                    ``(F) include provisions in accordance with 
                paragraphs (3) and (4) of this section; and
                    ``(G) include any additional provisions the 
                Secretary determines are necessary to carry out the 
                program.
            ``(3) Change of interest in land subject to a contract.--
                    ``(A) In general.--At the time of application, a 
                producer shall have control of the eligible land to be 
                enrolled in the program. Except as provided in 
                subparagraph (B), a change in the interest of a 
                producer in eligible land covered by a contract under 
                the program shall result in the termination of the 
                contract with regard to that land.
                    ``(B) Transfer of duties and rights.--Subparagraph 
                (A) shall not apply if--
                            ``(i) within a reasonable period of time 
                        (as determined by the Secretary) after the date 
                        of the change in the interest in all or a 
                        portion of the land covered by a contract under 
                        the program, the transferee of the land 
                        provides written notice to the Secretary that 
                        duties and rights under the contract have been 
                        transferred to, and assumed by, the transferee 
                        for the portion of the land transferred;
                            ``(ii) the transferee meets the eligibility 
                        requirements of the program; and
                            ``(iii) the Secretary approves the transfer 
                        of all duties and rights under the contract.
            ``(4) Modification and termination of contracts.--
                    ``(A) Voluntary modification or termination.--The 
                Secretary may modify or terminate a contract with a 
                producer if--
                            ``(i) the producer agrees to the 
                        modification or termination; and
                            ``(ii) the Secretary determines that the 
                        modification or termination is in the public 
                        interest.
                    ``(B) Involuntary termination.--The Secretary may 
                terminate a contract if the Secretary determines that 
                the producer violated the contract.
            ``(5) Repayment.--If a contract is terminated, the 
        Secretary may, consistent with the purposes of the program--
                    ``(A) allow the producer to retain payments already 
                received under the contract; or
                    ``(B) require repayment, in whole or in part, of 
                payments received and assess liquidated damages.
    ``(e) Contract Renewal.--At the end of the initial 5-year contract 
period, the Secretary may allow the producer to renew the contract for 
1 additional 5-year period if the producer--
            ``(1) demonstrates compliance with the terms of the 
        existing contract;
            ``(2) agrees to adopt and continue to integrate 
        conservation activities across the entire agricultural 
        operation as determined by the Secretary; and
            ``(3) agrees, at a minimum, to meet or exceed the 
        stewardship threshold for at least 2 additional priority 
        resource concerns on the agricultural operation by the end of 
        the contract period.

``SEC. 1238G. DUTIES OF THE SECRETARY.

    ``(a) In General.--To achieve the conservation goals of a contract 
under the conservation stewardship program, the Secretary shall--
            ``(1) make the program available to eligible producers on a 
        continuous enrollment basis with 1 or more ranking periods, 1 
        of which shall occur in the first quarter of each fiscal year;
            ``(2) identify not less than 5 priority resource concerns 
        in a particular watershed or other appropriate region or area 
        within a State; and
            ``(3) establish a science-based stewardship threshold for 
        each priority resource concern identified under subparagraph 
        (2).
    ``(b) Allocation to States.--The Secretary shall allocate acres to 
States for enrollment, based--
            ``(1) primarily on each State's proportion of eligible land 
        to the total acreage of eligible land in all States; and
            ``(2) also on consideration of--
                    ``(A) the extent and magnitude of the conservation 
                needs associated with agricultural production in each 
                State;
                    ``(B) the degree to which implementation of the 
                program in the State is, or will be, effective in 
                helping producers address those needs; and
                    ``(C) other considerations to achieve equitable 
                geographic distribution of funds, as determined by the 
                Secretary.
    ``(c) Acreage Enrollment Limitation.--During the period beginning 
on October 1, 2012, and ending on September 30, 2021, the Secretary 
shall, to the maximum extent practicable--
            ``(1) enroll in the program an additional 10,348,000 acres 
        for each fiscal year; and
            ``(2) manage the program to achieve a national average rate 
        of $18 per acre, which shall include the costs of all financial 
        assistance, technical assistance, and any other expenses 
        associated with enrollment or participation in the program.
    ``(d) Conservation Stewardship Payments.--
            ``(1) Availability of payments.--The Secretary shall 
        provide annual payments under the program to compensate the 
        producer for--
                    ``(A) installing and adopting additional 
                conservation activities; and
                    ``(B) improving, maintaining, and managing 
                conservation activities in place at the operation of 
                the producer at the time the contract offer is accepted 
                by the Secretary.
            ``(2) Payment amount.--The amount of the conservation 
        stewardship annual payment shall be determined by the Secretary 
        and based, to the maximum extent practicable, on the following 
        factors:
                    ``(A) Costs incurred by the producer associated 
                with planning, design, materials, installation, labor, 
                management, maintenance, or training.
                    ``(B) Income forgone by the producer.
                    ``(C) Expected conservation benefits.
                    ``(D) The extent to which priority resource 
                concerns will be addressed through the installation and 
                adoption of conservation activities on the agricultural 
                operation.
                    ``(E) The level of stewardship in place at the time 
                of application and maintained over the term of the 
                contract.
                    ``(F) The degree to which the conservation 
                activities will be integrated across the entire 
                agricultural operation for all applicable priority 
                resource concerns over the term of the contract.
                    ``(G) Such other factors as determined by the 
                Secretary.
            ``(3) Exclusions.--A payment to a producer under this 
        subsection shall not be provided for--
                    ``(A) the design, construction, or maintenance of 
                animal waste storage or treatment facilities or 
                associated waste transport or transfer devices for 
                animal feeding operations; or
                    ``(B) conservation activities for which there is no 
                cost incurred or income forgone to the producer.
            ``(4) Delivery of payments.--In making stewardship 
        payments, the Secretary shall, to the extent practicable--
                    ``(A) prorate conservation performance over the 
                term of the contract so as to accommodate, to the 
                extent practicable, producers earning equal annual 
                stewardship payments in each fiscal year; and
                    ``(B) make stewardship payments as soon as 
                practicable after October 1 of each fiscal year for 
                activities carried out in the previous fiscal year.
    ``(e) Supplemental Payments for Resource-conserving Crop 
Rotations.--
            ``(1) Availability of payments.--The Secretary shall 
        provide additional payments to producers that, in participating 
        in the program, agree to adopt resource-conserving crop 
        rotations to achieve beneficial crop rotations as appropriate 
        for the eligible land of the producers.
            ``(2) Beneficial crop rotations.--The Secretary shall 
        determine whether a resource-conserving crop rotation is a 
        beneficial crop rotation eligible for additional payments under 
        paragraph (1), based on whether the resource-conserving crop 
        rotation is designed to provide natural resource conservation 
        and production benefits.
            ``(3) Eligibility.--To be eligible to receive a payment 
        described in paragraph (1), a producer shall agree to adopt and 
        maintain the resource-conserving crop rotations for the term of 
        the contract.
            ``(4) Resource-conserving crop rotation.--In this 
        subsection, the term `resource-conserving crop rotation' means 
        a crop rotation that--
                    ``(A) includes at least 1 resource conserving crop 
                (as defined by the Secretary);
                    ``(B) reduces erosion;
                    ``(C) improves soil fertility and tilth;
                    ``(D) interrupts pest cycles; and
                    ``(E) in applicable areas, reduces depletion of 
                soil moisture or otherwise reduces the need for 
                irrigation.
    ``(f) Payment Limitations.--A person or legal entity may not 
receive, directly or indirectly, payments under the program that, in 
the aggregate, exceed $200,000 under all contracts entered into during 
fiscal years 2013 through 2017, excluding funding arrangements with 
Indian tribes, regardless of the number of contracts entered into under 
the program by the person or legal entity.
    ``(g) Specialty Crop and Organic Producers.--The Secretary shall 
ensure that outreach and technical assistance are available, and 
program specifications are appropriate to enable specialty crop and 
organic producers to participate in the program.
    ``(h) Coordination With Organic Certification.--The Secretary shall 
establish a transparent means by which producers may initiate organic 
certification under the Organic Foods Production Act of 1990 (7 U.S.C. 
6501 et seq.) while participating in a contract under the program.
    ``(i) Regulations.--The Secretary shall promulgate regulations 
that--
            ``(1) prescribe such other rules as the Secretary 
        determines to be necessary to ensure a fair and reasonable 
        application of the limitations established under subsection 
        (f); and
            ``(2) otherwise enable the Secretary to carry out the 
        program.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.
    (c) Effect on Existing Contracts.--
            (1) In general.--The amendment made by this section shall 
        not affect the validity or terms of any contract entered into 
        by the Secretary of Agriculture under subchapter B of chapter 2 
        of subtitle D of title XII of the Food Security Act of 1985 (16 
        U.S.C. 3838d et seq.) before October 1, 2012, or any payments 
        required to be made in connection with the contract.
            (2) Conservation stewardship program.--Funds made available 
        under section 1241(a)(4) of the Food Security Act of 1985 (16 
        U.S.C. 3841(a)(4)) (as amended by section 2601(a)) may be used 
        to administer and make payments to program participants 
        enrolled into contracts during any of fiscal years 2009 through 
        2012.

          Subtitle C--Environmental Quality Incentives Program

SEC. 2201. PURPOSES.

    Section 1240 of the Food Security Act of 1985 (16 U.S.C. 3839aa) is 
amended--
            (1) in paragraph (3)--
                    (A) in subparagraph (A), by striking ``and'' at the 
                end;
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C) and, in such subparagraph, by 
                inserting ``and'' after the semicolon; and
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) develop and improve wildlife habitat; and'';
            (2) in paragraph (4), by striking ``; and'' and inserting a 
        period; and
            (3) by striking paragraph (5).

SEC. 2202. DEFINITIONS.

    Section 1240A of the Food Security Act of 1985 (16 U.S.C. 3839aa-1) 
is amended--
            (1) by striking paragraph (2) and redesignating paragraphs 
        (3) through (6) as paragraphs (2) through (5), respectively; 
        and
            (2) in paragraph (2) (as so redesignated), by inserting 
        ``established under the Organic Foods Production Act of 1990 (7 
        U.S.C. 6501 et seq.)'' after ``national organic program''.

SEC. 2203. ESTABLISHMENT AND ADMINISTRATION.

    Section 1240B of the Food Security Act of 1985 (16 U.S.C. 3839aa-2) 
is amended--
            (1) in subsection (a), by striking ``2014'' and inserting 
        ``2017'';
            (2) in subsection (b), by striking paragraph (2) and 
        inserting the following:
            ``(2) Term.--A contract under the program shall have a term 
        that does not exceed 10 years.'';
            (3) in subsection (d)--
                    (A) in paragraph (3), by striking subparagraphs (A) 
                through (G) and inserting the following:
                    ``(A) soil health;
                    ``(B) water quality and quantity improvement;
                    ``(C) nutrient management;
                    ``(D) pest management;
                    ``(E) air quality improvement;
                    ``(F) wildlife habitat development, including 
                pollinator habitat;
                    ``(G) invasive species management; or
                    ``(H) other resource issues of regional or national 
                significance, as determined by the Secretary.''; and
                    (B) in paragraph (4)--
                            (i) in subparagraph (A) in the matter 
                        preceding clause (i), by inserting ``, veteran 
                        farmer or rancher (as defined in section 
                        2501(e) of the Food, Agriculture, Conservation, 
                        and Trade Act of 1990 (7 U.S.C. 2279(e))),'' 
                        before ``or a beginning farmer or rancher''; 
                        and
                            (ii) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) Advance payments.--
                            ``(i) In general.--Not more than 30 percent 
                        of the amount determined under subparagraph (A) 
                        may be provided in advance for the purpose of 
                        purchasing materials or contracting.
                            ``(ii) Return of funds.--If funds provided 
                        in advance are not expended during the 90-day 
                        period beginning on the date of receipt of the 
                        funds, the funds shall be returned within a 
                        reasonable time frame, as determined by the 
                        Secretary.'';
            (4) by striking subsection (f) and inserting the following:
    ``(f) Allocation of Funding.--
            ``(1) Livestock.--For each of fiscal years 2013 through 
        2017, at least 60 percent of the funds made available for 
        payments under the program shall be targeted at practices 
        relating to livestock production.
            ``(2) Wildlife habitat.--For each of fiscal years 2013 
        through 2017, at least 5 percent of the funds made available 
        for payments under the program shall be targeted at practices 
        benefitting wildlife habitat under subsection (g).''; and
            (5) by striking subsection (g) and inserting the following:
    ``(g) Wildlife Habitat Incentive Practice.--The Secretary shall 
provide payments under the program for conservation practices that 
support the restoration, development, and improvement of wildlife 
habitat on eligible land, including--
            ``(1) upland wildlife habitat;
            ``(2) wetland wildlife habitat;
            ``(3) habitat for threatened and endangered species;
            ``(4) fish habitat;
            ``(5) habitat on pivot corners and other irregular areas of 
        a field; and
            ``(6) other types of wildlife habitat, as determined by the 
        Secretary.''.

SEC. 2204. EVALUATION OF APPLICATIONS.

    Section 1240C(b) of the Food Security Act of 1985 (16 U.S.C. 
3839aa-3(b)) is amended--
            (1) in paragraph (1), by striking ``environmental'' and 
        inserting ``conservation''; and
            (2) in paragraph (3), by striking ``purpose of the 
        environmental quality incentives program specified in section 
        1240(1)'' and inserting ``purposes of the program''.

SEC. 2205. DUTIES OF PRODUCERS.

    Section 1240D(2) of the Food Security Act of 1985 (16 U.S.C. 
3839aa-4(2)) is amended by striking ``farm, ranch, or forest'' and 
inserting ``enrolled''.

SEC. 2206. LIMITATION ON PAYMENTS.

    Section 1240G of the Food Security Act of 1985 (16 U.S.C. 3839aa-7) 
is amended--
            (1) in subsection (a)--
                    (A) by striking ``by the person or entity during 
                any six-year period,'' and inserting ``during fiscal 
                years 2013 through 2017''; and
                    (B) by striking ``federally recognized'' and all 
                that follows through the period and inserting ``Indian 
                tribes under section 1244(l).''; and
            (2) in subsection (b)(2), by striking ``any six-year 
        period'' and inserting ``fiscal years 2013 through 2017''.

SEC. 2207. CONSERVATION INNOVATION GRANTS AND PAYMENTS.

    Section 1240H of the Food Security Act of 1985 (16 U.S.C. 3839aa-8) 
is amended--
            (1) in subsection (b)(2), by striking ``2012'' and 
        inserting ``2017''; and
            (2) by adding at the end the following:
    ``(c) Reporting.--Not later than December 31, 2013, and every 2 
years thereafter, the Secretary shall submit to the Committee on 
Agriculture, Nutrition, and Forestry of the Senate and the Committee on 
Agriculture of the House of Representatives a report on the status of 
projects funded under this section, including--
            ``(1) funding awarded;
            ``(2) project results; and
            ``(3) incorporation of project findings, such as new 
        technology and innovative approaches, into the conservation 
        efforts implemented by the Secretary.''.

SEC. 2208. EFFECTIVE DATE.

    (a) In General.--The amendments made by this title shall take 
effect on October 1, 2012.
    (b) Effect on Existing Contracts.--The amendments made by this 
title shall not affect the validity or terms of any contract entered 
into by the Secretary of Agriculture under chapter 4 of subtitle D of 
title XII of the Food Security Act of 1985 (16 U.S.C. 3839aa et seq.) 
before October 1, 2012, or any payments required to be made in 
connection with the contract.

         Subtitle D--Agricultural Conservation Easement Program

SEC. 2301. AGRICULTURAL CONSERVATION EASEMENT PROGRAM.

    (a) Establishment.--Title XII of the Food Security Act of 1985 is 
amended by adding at the end the following:

        ``Subtitle H--Agricultural Conservation Easement Program

``SEC. 1265. ESTABLISHMENT AND PURPOSES.

    ``(a) Establishment.--The Secretary shall establish an Agricultural 
Conservation Easement Program for the conservation of eligible land and 
natural resources through easements or other interests in land.
    ``(b) Purposes.--The purposes of the program are to--
            ``(1) combine the purposes and coordinate the functions of 
        the wetlands reserve program established under section 1237, 
        the grassland reserve program established under section 1238N, 
        and the farmland protection program established under section 
        1238I;
            ``(2) restore, protect, and enhance wetland on eligible 
        land;
            ``(3) protect the agricultural use, viability, and related 
        conservation values of eligible land by limiting 
        nonagricultural uses of that land; and
            ``(4) protect grazing uses and related conservation values 
        by restoring and conserving eligible land.

``SEC. 1265A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Agricultural land easement.--The term `agricultural 
        land easement' means an easement or other interest in eligible 
        land that--
                    ``(A) is conveyed for the purposes of protecting 
                natural resources and the agricultural nature of the 
                land, and of promoting agricultural viability for 
                future generations; and
                    ``(B) permits the landowner the right to continue 
                agricultural production and related uses subject to an 
                agricultural land easement plan.
            ``(2) Eligible entity.--The term `eligible entity' means--
                    ``(A) an agency of State or local government or an 
                Indian tribe (including farmland protection board or 
                land resource council established under State law); or
                    ``(B) an organization that is--
                            ``(i) organized for, and at all times since 
                        the formation of the organization has been 
                        operated principally for, 1 or more of the 
                        conservation purposes specified in clause (i), 
                        (ii), (iii), or (iv) of section 170(h)(4)(A) of 
                        the Internal Revenue Code of 1986;
                            ``(ii) an organization described in section 
                        501(c)(3) of that Code that is exempt from 
                        taxation under section 501(a) of that Code; or
                            ``(iii) described in--
                                    ``(I) paragraph (1) or (2) of 
                                section 509(a) of that Code; or
                                    ``(II) section 509(a)(3) of that 
                                Code and is controlled by an 
                                organization described in section 
                                509(a)(2) of that Code.
            ``(3) Eligible land.--The term `eligible land' means 
        private or tribal land that is--
                    ``(A) in the case of an agricultural land easement, 
                agricultural land, including land on a farm or ranch--
                            ``(i) that is subject to a pending offer 
                        for purchase from an eligible entity;
                            ``(ii) that--
                                    ``(I) has prime, unique, or other 
                                productive soil;
                                    ``(II) contains historical or 
                                archaeological resources; or
                                    ``(III) the protection of which 
                                will further a State or local policy 
                                consistent with the purposes of the 
                                program; and
                            ``(iii) that is--
                                    ``(I) cropland;
                                    ``(II) rangeland;
                                    ``(III) grassland or land that 
                                contains forbs, or shrubland for which 
                                grazing is the predominant use;
                                    ``(IV) pastureland; or
                                    ``(V) nonindustrial private forest 
                                land that contributes to the economic 
                                viability of an offered parcel or 
                                serves as a buffer to protect such land 
                                from development;
                    ``(B) in the case of a wetland easement, a wetland 
                or related area, including--
                            ``(i) farmed or converted wetland, together 
                        with the adjacent land that is functionally 
                        dependent on that land if the Secretary 
                        determines it--
                                    ``(I) is likely to be successfully 
                                restored in a cost effective manner; 
                                and
                                    ``(II) will maximize the wildlife 
                                benefits and wetland functions and 
                                values as determined by the Secretary 
                                in consultation with the Secretary of 
                                the Interior at the local level;
                            ``(ii) cropland or grassland that was used 
                        for agricultural production prior to flooding 
                        from the natural overflow of a closed basin 
                        lake or pothole, as determined by the 
                        Secretary, together (where practicable) with 
                        the adjacent land that is functionally 
                        dependent on the cropland or grassland;
                            ``(iii) farmed wetland and adjoining land 
                        that--
                                    ``(I) is enrolled in the 
                                conservation reserve program;
                                    ``(II) has the highest wetland 
                                functions and values; and
                                    ``(III) is likely to return to 
                                production after the land leaves the 
                                conservation reserve program;
                            ``(iv) riparian areas that link wetland 
                        that is protected by easements or some other 
                        device that achieves the same purpose as an 
                        easement; or
                            ``(v) other wetland of an owner that would 
                        not otherwise be eligible if the Secretary 
                        determines that the inclusion of such wetland 
                        in such easement would significantly add to the 
                        functional value of the easement; and
                    ``(C) in the case of both an agricultural land 
                easement or wetland easement, other land that is 
                incidental to eligible land if the Secretary determines 
                that it is necessary for the efficient administration 
                of the easements under this program.
            ``(4) Program.--The term `program' means the Agricultural 
        Conservation Easement Program established by this subtitle.
            ``(5) Wetland easement.--The term `wetland easement' means 
        a reserved interest in eligible land that--
                    ``(A) is defined and delineated in a deed; and
                    ``(B) stipulates--
                            ``(i) the rights, title, and interests in 
                        land conveyed to the Secretary; and
                            ``(ii) the rights, title, and interests in 
                        land that are reserved to the landowner.

``SEC. 1265B. AGRICULTURAL LAND EASEMENTS.

    ``(a) Availability of Assistance.--The Secretary shall facilitate 
and provide funding for--
            ``(1) the purchase by eligible entities of agricultural 
        land easements and other interests in eligible land; and
            ``(2) technical assistance to provide for the conservation 
        of natural resources pursuant to an agricultural land easement 
        plan.
    ``(b) Cost-share Assistance.--
            ``(1) In general.--The Secretary shall provide cost-share 
        assistance to eligible entities for purchasing agricultural 
        land easements to protect the agricultural use, including 
        grazing, and related conservation values of eligible land.
            ``(2) Scope of assistance available.--
                    ``(A) Federal share.--Subject to subparagraph (C), 
                an agreement described in paragraph (4) shall provide 
                for a Federal share determined by the Secretary of an 
                amount not to exceed 50 percent of the fair market 
                value of the agricultural land easement or other 
                interest in land, as determined by the Secretary 
                using--
                            ``(i) the Uniform Standards of Professional 
                        Appraisal Practices;
                            ``(ii) an area-wide market analysis or 
                        survey; or
                            ``(iii) another industry approved method.
                    ``(B) Non-federal share.--
                            ``(i) In general.--Subject to subparagraph 
                        (C), under the agreement, the eligible entity 
                        shall provide a share that is at least 
                        equivalent to that provided by the Secretary.
                            ``(ii) Source of contribution.--An eligible 
                        entity may include as part of its share a 
                        charitable donation or qualified conservation 
                        contribution (as defined by section 170(h) of 
                        the Internal Revenue Code of 1986) from the 
                        private landowner if the eligible entity 
                        contributes its own cash resources in an amount 
                        that is at least 50 percent of the amount 
                        contributed by the Secretary.
                    ``(C) Waiver authority.--In the case of grassland 
                of special environmental significance, as determined by 
                the Secretary, the Secretary may provide up to 75 
                percent of the fair market value of the agricultural 
                land easement.
            ``(3) Evaluation and ranking of applications.--
                    ``(A) Criteria.--The Secretary shall establish 
                evaluation and ranking criteria to maximize the benefit 
                of Federal investment under the program.
                    ``(B) Considerations.--In establishing the 
                criteria, the Secretary shall emphasize support for--
                            ``(i) protecting agricultural uses and 
                        related conservation values of the land; and
                            ``(ii) maximizing the protection of areas 
                        devoted to agricultural use.
                    ``(C) Bidding down.--If the Secretary determines 
                that 2 or more applications for cost-share assistance 
                are comparable in achieving the purpose of the program, 
                the Secretary shall not assign a higher priority to any 
                of those applications solely on the basis of lesser 
                cost to the program.
            ``(4) Agreements with eligible entities.--
                    ``(A) In general.--The Secretary shall enter into 
                agreements with eligible entities to stipulate the 
                terms and conditions under which the eligible entity is 
                permitted to use cost-share assistance provided under 
                this section.
                    ``(B) Length of agreements.--An agreement shall be 
                for a term that is--
                            ``(i) in the case of an eligible entity 
                        certified under the process described in 
                        paragraph (5), a minimum of 5 years; and
                            ``(ii) for all other eligible entities, at 
                        least 3, but not more than 5 years.
                    ``(C) Minimum terms and conditions.--An eligible 
                entity shall be authorized to use its own terms and 
                conditions for agricultural land easements so long as 
                the Secretary determines such terms and conditions--
                            ``(i) are consistent with the purposes of 
                        the program;
                            ``(ii) are permanent or for the maximum 
                        duration allowed under applicable State law;
                            ``(iii) permit effective enforcement of the 
                        conservation purposes of such easements, 
                        including appropriate restrictions depending on 
                        the purposes for which the easement is 
                        acquired;
                            ``(iv) include a right of enforcement for 
                        the Secretary if terms of the easement are not 
                        enforced by the holder of the easement;
                            ``(v) subject the land purchased to an 
                        agricultural land easement plan that--
                                    ``(I) describes the activities 
                                which promote the long-term viability 
                                of the land to meet the purposes for 
                                which the easement was acquired;
                                    ``(II) requires the management of 
                                grassland according to a grassland 
                                management plan; and
                                    ``(III) includes a conservation 
                                plan, where appropriate, and requires, 
                                at the option of the Secretary, the 
                                conversion of highly erodible cropland 
                                to less intensive uses; and
                            ``(vi) include a limit on the impervious 
                        surfaces to be allowed that is consistent with 
                        the agricultural activities to be conducted.
                    ``(D) Substitution of qualified projects.--An 
                agreement shall allow, upon mutual agreement of the 
                parties, substitution of qualified projects that are 
                identified at the time of the proposed substitution.
                    ``(E) Effect of violation.--If a violation occurs 
                of a term or condition of an agreement under this 
                subsection--
                            ``(i) the agreement may be terminated; and
                            ``(ii) the Secretary may require the 
                        eligible entity to refund all or part of any 
                        payments received by the entity under the 
                        program, with interest on the payments as 
                        determined appropriate by the Secretary.
            ``(5) Certification of eligible entities.--
                    ``(A) Certification process.--The Secretary shall 
                establish a process under which the Secretary may--
                            ``(i) directly certify eligible entities 
                        that meet established criteria;
                            ``(ii) enter into long-term agreements with 
                        certified eligible entities; and
                            ``(iii) accept proposals for cost-share 
                        assistance for the purchase of agricultural 
                        land easements throughout the duration of such 
                        agreements.
                    ``(B) Certification criteria.--In order to be 
                certified, an eligible entity shall demonstrate to the 
                Secretary that the entity will maintain, at a minimum, 
                for the duration of the agreement--
                            ``(i) a plan for administering easements 
                        that is consistent with the purpose of this 
                        subtitle;
                            ``(ii) the capacity and resources to 
                        monitor and enforce agricultural land 
                        easements; and
                            ``(iii) policies and procedures to ensure--
                                    ``(I) the long-term integrity of 
                                agricultural land easements on eligible 
                                land;
                                    ``(II) timely completion of 
                                acquisitions of easements; and
                                    ``(III) timely and complete 
                                evaluation and reporting to the 
                                Secretary on the use of funds provided 
                                under the program.
                    ``(C) Review and revision.--
                            ``(i) Review.--The Secretary shall conduct 
                        a review of eligible entities certified under 
                        subparagraph (A) every 3 years to ensure that 
                        such entities are meeting the criteria 
                        established under subparagraph (B).
                            ``(ii) Revocation.--If the Secretary finds 
                        that the certified entity no longer meets the 
                        criteria established under subparagraph (B), 
                        the Secretary may--
                                    ``(I) allow the certified entity a 
                                specified period of time, at a minimum 
                                180 days, in which to take such actions 
                                as may be necessary to meet the 
                                criteria; and
                                    ``(II) revoke the certification of 
                                the entity, if after the specified 
                                period of time, the certified entity 
                                does not meet such criteria.
    ``(c) Technical Assistance.--The Secretary may provide technical 
assistance, if requested, to assist in--
            ``(1) compliance with the terms and conditions of 
        easements; and
            ``(2) implementation of an agricultural land easement plan.

``SEC. 1265C. WETLAND EASEMENTS.

    ``(a) Availability of Assistance.--The Secretary shall provide 
assistance to owners of eligible land to restore, protect, and enhance 
wetland through--
            ``(1) easements and related wetland easement plans; and
            ``(2) technical assistance.
    ``(b) Easements.--
            ``(1) Method of enrollment.--The Secretary shall enroll 
        eligible land through the use of--
                    ``(A) 30-year easements;
                    ``(B) permanent easements;
                    ``(C) easements for the maximum duration allowed 
                under applicable State laws; or
                    ``(D) as an option for Indian tribes only, 30-year 
                contracts.
            ``(2) Limitations.--
                    ``(A) Ineligible land.--The Secretary may not 
                acquire easements on--
                            ``(i) land established to trees under the 
                        conservation reserve program, except in cases 
                        where the Secretary determines it would further 
                        the purposes of the program; and
                            ``(ii) farmed wetland or converted wetland 
                        where the conversion was not commenced prior to 
                        December 23, 1985.
                    ``(B) Changes in ownership.--No easement shall be 
                created on land that has changed ownership during the 
                preceding 24-month period unless--
                            ``(i) the new ownership was acquired by 
                        will or succession as a result of the death of 
                        the previous owner;
                            ``(ii)(I) the ownership change occurred 
                        because of foreclosure on the land; and
                            ``(II) immediately before the foreclosure, 
                        the owner of the land exercises a right of 
                        redemption from the mortgage holder in 
                        accordance with State law; or
                            ``(iii) the Secretary determines that the 
                        land was acquired under circumstances that give 
                        adequate assurances that such land was not 
                        acquired for the purposes of placing it in the 
                        program.
            ``(3) Evaluation and ranking of offers.--
                    ``(A) Criteria.--The Secretary shall establish 
                evaluation and ranking criteria to maximize the benefit 
                of Federal investment under the program.
                    ``(B) Considerations.--When evaluating offers from 
                landowners, the Secretary may consider--
                            ``(i) the conservation benefits of 
                        obtaining an easement or 30-year contract, 
                        including the potential environmental benefits 
                        if the land was removed from agricultural 
                        production;
                            ``(ii) the cost-effectiveness of each 
                        easement or 30-year contract, so as to maximize 
                        the environmental benefits per dollar expended;
                            ``(iii) whether the landowner or another 
                        person is offering to contribute financially to 
                        the cost of the easement or 30-year contract to 
                        leverage Federal funds; and
                            ``(iv) such other factors as the Secretary 
                        determines are necessary to carry out the 
                        purposes of the program.
                    ``(C) Priority.--The Secretary shall place priority 
                on acquiring easements based on the value of the 
                easement for protecting and enhancing habitat for 
                migratory birds and other wildlife.
            ``(4) Agreement.--To be eligible to place eligible land 
        into the program through a wetland easement, the owner of such 
        land shall enter into an agreement with the Secretary to--
                    ``(A) grant an easement on such land to the 
                Secretary;
                    ``(B) authorize the implementation of a wetland 
                easement plan;
                    ``(C) create and record an appropriate deed 
                restriction in accordance with applicable State law to 
                reflect the easement agreed to;
                    ``(D) provide a written statement of consent to 
                such easement signed by those holding a security 
                interest in the land;
                    ``(E) comply with the terms and conditions of the 
                easement and any related agreements; and
                    ``(F) permanently retire any existing cropland base 
                and allotment history for the land on which the 
                easement has been obtained.
            ``(5) Terms and conditions of easement.--
                    ``(A) In general.--A wetland easement shall include 
                terms and conditions that--
                            ``(i) permit--
                                    ``(I) repairs, improvements, and 
                                inspections on the land that are 
                                necessary to maintain existing public 
                                drainage systems; and
                                    ``(II) owners to control public 
                                access on the easement areas while 
                                identifying access routes to be used 
                                for restoration activities and 
                                management and easement monitoring;
                            ``(ii) prohibit--
                                    ``(I) the alteration of wildlife 
                                habitat and other natural features of 
                                such land, unless specifically 
                                authorized by the Secretary;
                                    ``(II) the spraying of such land 
                                with chemicals or the mowing of such 
                                land, except where such spraying or 
                                mowing is authorized by the Secretary 
                                or is necessary--
                                            ``(aa) to comply with 
                                        Federal or State noxious weed 
                                        control laws;
                                            ``(bb) to comply with a 
                                        Federal or State emergency pest 
                                        treatment program; or
                                            ``(cc) to meet habitat 
                                        needs of specific wildlife 
                                        species;
                                    ``(III) any activities to be 
                                carried out on the owner's or 
                                successor's land that is immediately 
                                adjacent to, and functionally related 
                                to, the land that is subject to the 
                                easement if such activities will alter, 
                                degrade, or otherwise diminish the 
                                functional value of the eligible land; 
                                and
                                    ``(IV) the adoption of any other 
                                practice that would tend to defeat the 
                                purposes of the program, as determined 
                                by the Secretary;
                            ``(iii) provide for the efficient and 
                        effective establishment of wetland functions 
                        and values; and
                            ``(iv) include such additional provisions 
                        as the Secretary determines are desirable to 
                        carry out the program or facilitate the 
                        practical administration thereof.
                    ``(B) Violation.--On the violation of the terms or 
                conditions of the easement, the easement shall remain 
                in force and the Secretary may require the owner to 
                refund all or part of any payments received by the 
                owner under the program, together with interest thereon 
                as determined appropriate by the Secretary.
                    ``(C) Compatible uses.--Land subject to a wetland 
                easement may be used for compatible economic uses, 
                including such activities as hunting and fishing, 
                managed timber harvest, or periodic haying or grazing, 
                if such use is specifically permitted by the wetland 
                easement plan and is consistent with the long-term 
                protection and enhancement of the wetland resources for 
                which the easement was established.
                    ``(D) Reservation of grazing rights.--The Secretary 
                may include in the terms and conditions of an easement 
                a provision under which the owner reserves grazing 
                rights if--
                            ``(i) the Secretary determines that the 
                        reservation and use of the grazing rights--
                                    ``(I) is compatible with the land 
                                subject to the easement;
                                    ``(II) is consistent with the 
                                historical natural uses of the land and 
                                long-term protection and enhancement 
                                goals for which the easement was 
                                established; and
                                    ``(III) complies with the wetland 
                                easement plan; and
                            ``(ii) the agreement provides for a 
                        commensurate reduction in the easement payment 
                        to account for the grazing value, as determined 
                        by the Secretary.
                    ``(E) Application.--The relevant provisions of this 
                paragraph shall also apply to a 30-year contract.
            ``(6) Compensation.--
                    ``(A) Determination.--
                            ``(i) In general.--The Secretary shall pay 
                        as compensation for a permanent easement 
                        acquired an amount necessary to encourage 
                        enrollment in the program based on the lowest 
                        of--
                                    ``(I) the fair market value of the 
                                land, as determined by the Secretary, 
                                using the Uniform Standards of 
                                Professional Appraisal Practices or an 
                                area-wide market analysis or survey;
                                    ``(II) the amount corresponding to 
                                a geographical cap, as determined by 
                                the Secretary in regulations; or
                                    ``(III) the offer made by the 
                                landowner.
                            ``(ii) Other.--Compensation for a 30-year 
                        contract or 30-year easement shall be not less 
                        than 50 percent, but not more than 75 percent, 
                        of the compensation that would be paid for a 
                        permanent easement.
                    ``(B) Form of payment.--Compensation shall be 
                provided by the Secretary in the form of a cash 
                payment, in an amount determined under subparagraph 
                (A).
                    ``(C) Payment schedule.--
                            ``(i) Easements valued at less than 
                        $500,000.--For easements valued at $500,000 or 
                        less, the Secretary may provide easement 
                        payments in not more than 10 annual payments.
                            ``(ii) Easements valued at more than 
                        $500,000.--For easements valued at more than 
                        $500,000, the Secretary may provide easement 
                        payments in at least 5, but not more than 10 
                        annual payments, except that, if the Secretary 
                        determines it would further the purposes of the 
                        program, the Secretary may make a lump sum 
                        payment for such an easement.
    ``(c) Easement Restoration.--
            ``(1) In general.--The Secretary shall provide financial 
        assistance to carry out the establishment of conservation 
        measures and practices and protect wetland functions and 
        values, including necessary maintenance activities, as set 
        forth in a wetland easement plan.
            ``(2) Payments.--The Secretary shall--
                    ``(A) in the case of a permanent easement, pay 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 contract or 30-year 
                easement, pay an amount that is not less than 50 
                percent, but not more than 75 percent, of the eligible 
                costs.
    ``(d) Technical Assistance.--
            ``(1) In general.--The Secretary shall assist owners in 
        complying with the terms and conditions of easements and 30-
        year contracts.
            ``(2) Contracts or agreements.--The Secretary may enter 
        into 1 or more contracts with private entities or agreements 
        with a State, non-governmental organization, or Indian tribe to 
        carry out necessary restoration, enhancement or maintenance of 
        an easement if the Secretary determines that the contract or 
        agreement will advance the purposes of the program.
    ``(e) Wetland Enhancement Option.--The Secretary may enter into 1 
or more agreements with a State (including a political subdivision or 
agency of a State), nongovernmental organization, or Indian tribe to 
carry out a special wetland enhancement option that the Secretary 
determines would advance the purposes of the program.
    ``(f) Administration.--
            ``(1) Wetland easement plan.--The Secretary shall develop a 
        wetland easement plan for eligible land subject to a wetland 
        easement, which will include the practices and activities 
        necessary to restore, protect, enhance, and maintain the 
        enrolled land.
            ``(2) Delegation of easement administration.--
                    ``(A) In general.--The Secretary may delegate any 
                of the easement management, monitoring, and enforcement 
                responsibilities of the Secretary to other Federal or 
                State agencies that have the appropriate authority, 
                expertise and resources necessary to carry out such 
                delegated responsibilities or to other conservation 
                organizations if the Secretary determines the 
                organization has similar expertise and resources.
                    ``(B) Limitation.--The Secretary shall not delegate 
                any of the monitoring or enforcement responsibilities 
                under the program to conservation organizations.
            ``(3) Payments.--
                    ``(A) Timing of payments.--The Secretary shall 
                provide payment for obligations incurred by the 
                Secretary under this section--
                            ``(i) with respect to any easement 
                        restoration obligation as soon as possible 
                        after the obligation is incurred; and
                            ``(ii) with respect to any annual easement 
                        payment obligation incurred by the Secretary as 
                        soon as possible after October 1 of each 
                        calendar year.
                    ``(B) Payments to others.--If an owner who is 
                entitled to a payment dies, becomes incompetent, is 
                otherwise unable to receive such payment, or is 
                succeeded by another person or entity who renders or 
                completes the required performance, the Secretary shall 
                make such payment, in accordance with regulations 
                prescribed by the Secretary and without regard to any 
                other provision of law, in such manner as the Secretary 
                determines is fair and reasonable in light of all of 
                the circumstances.

``SEC. 1265D. ADMINISTRATION.

    ``(a) Ineligible Land.--The Secretary may not acquire an easement 
under the program on--
            ``(1) land owned by an agency of the United States, other 
        than land held in trust for Indian tribes;
            ``(2) land owned in fee title by a State, including an 
        agency or a subdivision of a State, or a unit of local 
        government;
            ``(3) land subject to an easement or deed restriction 
        which, as determined by the Secretary, provides similar 
        protection as would be provided by enrollment in the program; 
        and
            ``(4) land where the purposes of the program would be 
        undermined due to on-site or off-site conditions, such as risk 
        of hazardous substances, proposed or existing rights of way, 
        infrastructure development, or adjacent land uses.
    ``(b) Priority.--In evaluating applications under the program, the 
Secretary may give priority to land that is currently enrolled in the 
conservation reserve program in a contract that is set to expire within 
1 year and--
            ``(1) in the case of an agricultural land easement, is 
        grassland that would benefit from protection under a long-term 
        easement; and
            ``(2) in the case of a wetland easement, is a wetland or 
        related area with the highest functions and values and is 
        likely to return to production after the land leaves the 
        conservation reserve program.
    ``(c) Subordination, Exchange, Modification, and Termination.--
            ``(1) In general.--The Secretary may subordinate, exchange, 
        terminate, or modify any interest in land, or portion of such 
        interest, administered by the Secretary, either directly or on 
        behalf of the Commodity Credit Corporation under the program 
        when the Secretary determines that--
                    ``(A) it is in the Federal Government's interest to 
                subordinate, exchange, modify or terminate the interest 
                in land;
                    ``(B) the subordination, exchange, modification, or 
                termination action--
                            ``(i) will address a compelling public need 
                        for which there is no practicable alternative, 
                        or
                            ``(ii) such action will further the 
                        practical administration of the program; and
                    ``(C) the subordination, exchange, modification, or 
                termination action will result in comparable 
                conservation value and equivalent or greater economic 
                value to the United States.
            ``(2) Consultation.--The Secretary shall work with the 
        current owner, and eligible entity if applicable, to address 
        any subordination, exchange, termination, or modification of 
        the interest, or portion of such interest in land.
            ``(3) Notice.--At least 90 days before taking any 
        termination action described in paragraph (1), the Secretary 
        shall provide written notice of such action to the Committee on 
        Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate.
    ``(d) Land Enrolled in Other Programs.--
            ``(1) Conservation reserve program.--The Secretary may 
        terminate or modify an existing contract entered into under 
        section 1231(a) if eligible land that is subject to such 
        contract is transferred into the program.
            ``(2) Other.--Land enrolled in the wetlands reserve 
        program, grassland reserve program, or farmland protection 
        program shall be considered enrolled in this program.
    ``(e) Allocation of Funds for Agricultural Land Easements.--Of the 
funds made available under section 1241 to carry out the program for a 
fiscal year, the Secretary shall, to the extent practicable, use no 
less than 40 percent for agricultural land easements.''.
    (b) Compliance With Certain Requirements.--Before an eligible 
entity or owner of eligible land may receive assistance under subtitle 
H of title XII of the Food Security Act of 1985, the eligible entity or 
person shall agree, during the crop year for which the assistance is 
provided and in exchange for the assistance--
            (1) to comply with applicable conservation requirements 
        under subtitle B of title XII of that Act (16 U.S.C. 3811 et 
        seq.); and
            (2) to comply with applicable wetland protection 
        requirements under subtitle C of title XII of that Act (16 
        U.S.C. 3821 et seq.).
    (c) Cross Reference.--Section 1244 of the Food Security Act of 1985 
(16 U.S.C. 3844) is amended--
            (1) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by inserting ``and'' at the end of 
                        subparagraph (A);
                            (ii) by striking ``and'' at the end of 
                        subparagraph (B); and
                            (iii) by striking subparagraph (C);
                    (B) by redesignating paragraph (2) as paragraph 
                (3); and
                    (C) by inserting after paragraph (1) the following:
            ``(2) the Agricultural Conservation Easement Program 
        established under subtitle H; and''; and
            (2) in subsection (f)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking 
                        ``programs administered under subchapters B and 
                        C of chapter 1 of subtitle D'' and inserting 
                        ``conservation reserve program established 
                        under subchapter B of chapter 1 of subtitle D 
                        and the Agricultural Conservation Easement 
                        Program under subtitle H using wetland 
                        easements under section 1265C''; and
                            (ii) in subparagraph (B), by striking 
                        ``subchapter C of chapter 1 of subtitle D'' and 
                        inserting ``the Agricultural Conservation 
                        Easement Program under subtitle H using wetland 
                        easements under section 1265C''; and
                    (B) in paragraph (4), by striking ``subchapter C'' 
                and inserting ``subchapter B''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2012.

         Subtitle E--Regional Conservation Partnership Program

SEC. 2401. REGIONAL CONSERVATION PARTNERSHIP PROGRAM.

    (a) In General.--Title XII of the Food Security Act of 1985 is 
amended by inserting after subtitle H (as added by section 2301) the 
following:

        ``Subtitle I--Regional Conservation Partnership Program

``SEC. 1271. ESTABLISHMENT AND PURPOSES.

    ``(a) Establishment.--The Secretary shall establish a Regional 
Conservation Partnership Program to implement eligible activities 
through--
            ``(1) partnership agreements with eligible partners; and
            ``(2) contracts with producers.
    ``(b) Purposes.--The purposes of the program are--
            ``(1) to combine the purposes and coordinate the functions 
        of--
                    ``(A) the agricultural water enhancement program 
                established under section 1240I;
                    ``(B) the Chesapeake Bay watershed program 
                established under section 1240Q;
                    ``(C) the cooperative conservation partnership 
                initiative established under section 1243; and
                    ``(D) the Great Lakes basin program for soil 
                erosion and sediment control established under section 
                1240P;.
            ``(2) to further the conservation, restoration, and 
        sustainable use of soil, water, wildlife, and related natural 
        resources on a regional or watershed scale; and
            ``(3) to encourage partners to cooperate with producers 
        in--
                    ``(A) meeting or avoiding the need for national, 
                State, and local natural resource regulatory 
                requirements related to production; and
                    ``(B) implementing projects that will result in the 
                installation and maintenance of eligible activities 
                that affect multiple agricultural or nonindustrial 
                private forest operations on a local, regional, State, 
                or multi-State basis.

``SEC. 1271A. DEFINITIONS.

    ``In this subtitle:
            ``(1) Covered programs.--The term `covered programs' 
        means--
                    ``(A) the agricultural conservation easement 
                program;
                    ``(B) the environmental quality incentives program; 
                and
                    ``(C) the conservation stewardship program.
            ``(2) Eligible activity.--The term `eligible activity' 
        means any of the following conservation activities when 
        delivered through a covered program:
                    ``(A) Water quality restoration or enhancement 
                projects, including nutrient management and sediment 
                reduction.
                    ``(B) Water quantity conservation, restoration, or 
                enhancement projects relating to surface water and 
                groundwater resources, including--
                            ``(i) the conversion of irrigated cropland 
                        to the production of less water-intensive 
                        agricultural commodities or dryland farming; 
                        and
                            ``(ii) irrigation system improvement and 
                        irrigation efficiency enhancement.
                    ``(C) Drought mitigation.
                    ``(D) Flood prevention.
                    ``(E) Water retention.
                    ``(F) Habitat conservation, restoration, and 
                enhancement.
                    ``(G) Erosion control.
                    ``(H) Other related activities that the Secretary 
                determines will help achieve conservation benefits.
            ``(3) Eligible partner.--The term `eligible partner' means 
        any of the following:
                    ``(A) An agricultural or silvicultural producer 
                association or other group of producers.
                    ``(B) A State or unit of local government.
                    ``(C) An Indian tribe.
                    ``(D) A farmer cooperative.
                    ``(E) An institution of higher education.
                    ``(F) An organization with an established history 
                of working cooperatively with producers on agricultural 
                land, as determined by the Secretary, to address--
                            ``(i) local conservation priorities related 
                        to agricultural production, wildlife habitat 
                        development, and nonindustrial private forest 
                        land management; or
                            ``(ii) critical watershed-scale soil 
                        erosion, water quality, sediment reduction, or 
                        other natural resource concerns.
            ``(4) Partnership agreement.--The term `partnership 
        agreement' means an agreement between the Secretary and an 
        eligible partner.
            ``(5) Program.--The term `program' means the Regional 
        Conservation Partnership Program established by this subtitle.

``SEC. 1271B. REGIONAL CONSERVATION PARTNERSHIPS.

    ``(a) Partnership Agreements Authorized.--The Secretary may enter 
into a partnership agreement with an eligible partner to implement a 
project that will assist producers with installing and maintaining an 
eligible activity.
    ``(b) Length.--A partnership agreement shall be for a period not to 
exceed 5 years, except that the Secretary may extend the agreement 1 
time for up to 12 months when an extension is necessary to meet the 
objectives of the program.
    ``(c) Duties of Partners.--
            ``(1) In general.--Under a partnership agreement, the 
        eligible partner shall--
                    ``(A) define the scope of a project, including--
                            ``(i) the eligible activities to be 
                        implemented;
                            ``(ii) the potential agricultural or 
                        nonindustrial private forest operations 
                        affected;
                            ``(iii) the local, State, multi-State or 
                        other geographic area covered; and
                            ``(iv) the planning, outreach, 
                        implementation and assessment to be conducted;
                    ``(B) conduct outreach and education to producers 
                for potential participation in the project;
                    ``(C) at the request of a producer, act on behalf 
                of a producer participating in the project in applying 
                for assistance under section 1271C;
                    ``(D) leverage financial or technical assistance 
                provided by the Secretary with additional funds to help 
                achieve the project objectives;
                    ``(E) conduct an assessment of the project's 
                effects; and
                    ``(F) at the conclusion of the project, report to 
                the Secretary on its results and funds leveraged.
            ``(2) Contribution.--A partner shall provide a significant 
        portion of the overall costs of the scope of the project as 
        determined by the Secretary.
    ``(d) Applications.--
            ``(1) Competitive process.--The Secretary shall conduct a 
        competitive process to select applications for partnership 
        agreements and may assess and rank applications with similar 
        conservation purposes as a group.
            ``(2) Criteria used.--In carrying out the process described 
        in paragraph (1), the Secretary shall make public the criteria 
        used in evaluating applications.
            ``(3) Content.--An application to the Secretary shall 
        include a description of--
                    ``(A) the scope of the project as described in 
                subsection (c)(1)(A);
                    ``(B) the plan for monitoring, evaluating, and 
                reporting on progress made towards achieving the 
                project's objectives;
                    ``(C) the program resources requested for the 
                project, including the covered programs to be used and 
                estimated funding needed from the Secretary;
                    ``(D) the partners collaborating to achieve project 
                objectives, including their roles, responsibilities, 
                capabilities, and financial contribution; and
                    ``(E) any other elements the Secretary considers 
                necessary to adequately evaluate and competitively 
                select applications for funding under the program.
            ``(4) Application selection.--
                    ``(A) Priority to certain applications.--The 
                Secretary shall give a higher priority to applications 
                that--
                            ``(i) assist producers in meeting or 
                        avoiding the need for a natural resource 
                        regulatory requirement;
                            ``(ii) significantly leverage non-Federal 
                        financial and technical resources and 
                        coordinate with other local, State, regional, 
                        or national efforts;
                            ``(iii) deliver high percentages of applied 
                        conservation to address conservation priorities 
                        or local, State, regional, or national 
                        conservation initiatives; or
                            ``(iv) provide innovation in conservation 
                        methods and delivery, including outcome-based 
                        performance measures and methods.
                    ``(B) Other applications.--The Secretary may give 
                priority to applications that--
                            ``(i) have a high percentage of producers 
                        in the area to be covered by the agreement; or
                            ``(ii) meet other factors that are 
                        important for achieving the purposes of the 
                        program, as determined by the Secretary.

``SEC. 1271C. ASSISTANCE TO PRODUCERS.

    ``(a) In General.--The Secretary shall enter into contracts to 
provide financial and technical assistance to--
            ``(1) producers participating in a project with an eligible 
        partner as described in section 1271B; or
            ``(2) producers that fit within the scope of a project 
        described in section 1271B or a critical conservation area 
        designated pursuant to section 1271F, but who are seeking to 
        implement an eligible activity independent of a partner.
    ``(b) Terms and Conditions.--
            ``(1) Consistency with program rules.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall ensure that the 
                terms and conditions of a contract under this section 
                are consistent with the applicable rules of the covered 
                programs to be used as part of the project, as 
                described in the application under section 
                1271B(d)(3)(C).
                    ``(B) Adjustments.--Except for statutory program 
                requirements governing appeals, payment limitations, 
                and conservation compliance, the Secretary may adjust 
                the discretionary program rules of a covered program--
                            ``(i) to provide a simplified application 
                        and evaluation process; and
                            ``(ii) to better reflect unique local 
                        circumstances and purposes if the Secretary 
                        determines such adjustments are necessary to 
                        achieve the purposes of the program.
            ``(2) Alternative funding arrangements.--
                    ``(A) In general.--For the purposes of providing 
                assistance for land described in subsection (a) and 
                section 1271F, the Secretary may enter into alternative 
                funding arrangements with a multistate water resource 
                agency or authority if--
                            ``(i) the Secretary determines that the 
                        goals and objectives of the program will be met 
                        by the alternative funding arrangements;
                            ``(ii) the agency or authority certifies 
                        that the limitations established under this 
                        section on agreements with individual producers 
                        will not be exceeded; and
                            ``(iii) all participating producers meet 
                        applicable payment eligibility provisions.
                    ``(B) Conditions.--As a condition on receipt of 
                funding under subparagraph (A), the multistate water 
                resource agency or authority shall agree--
                            ``(i) to submit an annual independent audit 
                        to the Secretary that describes the use of 
                        funds under this paragraph;
                            ``(ii) to provide any data necessary for 
                        the Secretary to issue a report on the use of 
                        funds under this paragraph; and
                            ``(iii) not to use any funds for 
                        administration or contracting with another 
                        entity.
                    ``(C) Limitation.--The Secretary may enter into not 
                more than 10 alternative funding arrangements under 
                this paragraph.
    ``(c) Payments.--
            ``(1) In general.--In accordance with statutory 
        requirements of the covered programs involved, the Secretary 
        may make payments to a producer in an amount determined by the 
        Secretary to be necessary to achieve the purposes of the 
        program.
            ``(2) Payments to certain producers.--The Secretary may 
        provide payments for a period of 5 years--
                    ``(A) to producers participating in a project that 
                addresses water quantity concerns and in an amount 
                sufficient to encourage conversion from irrigated to 
                dryland farming; and
                    ``(B) to producers participating in a project that 
                addresses water quality concerns and in an amount 
                sufficient to encourage adoption of conservation 
                practices and systems that improve nutrient management.
            ``(3) Waiver authority.--To assist in the implementation of 
        the program, the Secretary may waive the applicability of the 
        limitation in section 1001D(b)(2) of this Act for participating 
        producers if the Secretary determines that the waiver is 
        necessary to fulfill the objectives of the program.

``SEC. 1271D. FUNDING.

    ``(a) Availability of Funds.--The Secretary shall use $100,000,000 
of the funds of the Commodity Credit Corporation for each of fiscal 
years 2013 through 2017 to carry out the program established under this 
subtitle.
    ``(b) Duration of Availability.--Funds made available under 
subsection (a) shall remain available until expended.
    ``(c) Additional Funding and Acres.--
            ``(1) In general.--In addition to the funds made available 
        under subsection (a), the Secretary shall reserve 8 percent of 
        the funds and acres made available for a covered program for 
        each of fiscal years 2013 through 2017 in order to ensure 
        additional resources are available to carry out this program.
            ``(2) Unused funds and acres.--Any funds or acres reserved 
        under paragraph (1) for a fiscal year from a covered program 
        that are not obligated under this program by April 1 of that 
        fiscal year shall be returned for use under the covered 
        program.
    ``(d) Allocation of Funding.--Of the funds and acres made available 
for the program under subsections (a) and (c), the Secretary shall 
allocate--
            ``(1) 25 percent of the funds and acres to projects based 
        on a State competitive process administered by the State 
        conservationist, with the advice of the State technical 
        committee;
            ``(2) 40 percent of the funds and acres to projects based 
        on a national competitive process to be established by the 
        Secretary; and
            ``(3) 35 percent of the funds and acres to projects for the 
        critical conservation areas designated in section 1271F.
    ``(e) Limitation on Administrative Expenses.--None of the funds 
made available under the program may be used to pay for the 
administrative expenses of partners.

``SEC. 1271E. ADMINISTRATION.

    ``(a) Disclosure.--In addition to the criteria used in evaluating 
applications as described in section 1271B(d)(2), the Secretary shall 
make publicly available information on projects selected through the 
competitive process described in section 1271B(d)(1).
    ``(b) Reporting.--Not later than December 31, 2013, and for every 2 
years thereafter, the Secretary shall submit to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate a report on the 
status of projects funded under the program, including--
            ``(1) the number and types of partners and producers 
        participating in the partnership agreements selected;
            ``(2) the number of producers receiving assistance;
            ``(3) total funding committed to projects, including 
        Federal and non-Federal resources; and
            ``(4) a description of how the funds under section 
        1271C(b)(3) are being administered, including--
                    ``(A) any oversight mechanisms that the Secretary 
                has implemented;
                    ``(B) the process through which the Secretary is 
                resolving appeals by program participants; and
                    ``(C) the means by which the Secretary is tracking 
                adherence to any applicable provisions for payment 
                eligibility.

``SEC. 1271F. CRITICAL CONSERVATION AREAS.

    ``(a) In General.--When administering the funding described in 
section 1271D(d)(3), the Secretary shall select applications for 
partnership agreements and producer contracts within designated 
critical conservation areas.
    ``(b) Critical Conservation Area Designations.--
            ``(1) In general.--The Secretary shall designate up to 6 
        geographical areas as critical conservation areas based on the 
        degree to which an area--
                    ``(A) includes multiple States with significant 
                agricultural production;
                    ``(B) is covered by an existing regional, State, 
                binational, or multistate agreement or plan that has 
                established objectives, goals and work plans and is 
                adopted by a Federal, State, or regional authority;
                    ``(C) has water quality concerns, including 
                concerns for reducing erosion, promoting sediment 
                control, and addressing nutrient management activities 
                affecting large bodies of water of regional, national, 
                or international significance;
                    ``(D) has water quantity concerns, including--
                            ``(i) concerns for groundwater, surface 
                        water, aquifer, or other water sources; or
                            ``(ii) a need to promote water retention 
                        and flood prevention; or
                    ``(E) is subject to regulatory requirements that 
                could reduce the economic scope of agricultural 
                operations within the area.
            ``(2) Expiration.--Critical conservation area designations 
        under this section shall expire after 5 years, subject to 
        redesignation, except that the Secretary may withdraw 
        designation from an area if the Secretary finds the area no 
        longer meets the conditions described in paragraph (1).
    ``(c) Administration.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall administer any partnership agreement or 
        producer contract under this section in a manner that is 
        consistent with the terms of the program.
            ``(2) Relationship to existing activity.--The Secretary 
        shall, to the maximum extent practicable, ensure that eligible 
        activities carried out in critical conservation areas 
        designated under this section complement and are consistent 
        with other Federal and State programs and water quality and 
        quantity strategies.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

                Subtitle F--Other Conservation Programs

SEC. 2501. CONSERVATION OF PRIVATE GRAZING LAND.

    Section 1240M(e) of the Food Security Act of 1985 (16 U.S.C. 
3839bb(e)) is amended inserting ``and $30,000,000 for each of fiscal 
years 2013 through 2017'' before the period at the end.

SEC. 2502. GRASSROOTS SOURCE WATER PROTECTION PROGRAM.

    Section 1240O(b) of the Food Security Act of 1985 (16 U.S.C. 
3839bb-2(b)) is amended by inserting ``and $15,000,000 for each of 
fiscal years 2013 through 2017'' before the period at the end.

SEC. 2503. VOLUNTARY PUBLIC ACCESS AND HABITAT INCENTIVE PROGRAM.

    (a) Funding.--Section 1240R(f) of the Food Security Act of 1985 (16 
U.S.C. 3839bb-5(f)) is amended by inserting ``and $40,000,000 for the 
period of fiscal years 2013 through 2017'' before the period at the end 
 
    (b) Report on Program Effectiveness.--Not later than 2 years after 
the date of enactment of this Act, the Secretary of Agriculture shall 
submit to the Committee on Agriculture of the House of Representatives 
and the Committee on Agriculture, Nutrition, and Forestry of the Senate 
a report evaluating the effectiveness of the voluntary public access 
and habitat incentive program established by section 1240R of the Food 
Security Act of 1985 (16 U.S.C. 3839bb-5), including--
            (1) identifying cooperating agencies;
            (2) identifying the number of land holdings and total acres 
        enrolled by State;
            (3) evaluating the extent of improved access on eligible 
        land, improved wildlife habitat, and related economic benefits; 
        and
            (4) any other relevant information and data relating to the 
        program that would be helpful to such Committees.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2504. AGRICULTURE CONSERVATION EXPERIENCED SERVICES PROGRAM.

    (a) Funding.--Section 1252 of the Food Security Act of 1985 (16 
U.S.C. 3851) is amended by striking subsection (c) and inserting the 
following:
    ``(c) Funding.--
            ``(1) In general.--The Secretary may carry out the ACES 
        program using funds made available to carry out each program 
        under this title.
            ``(2) Exclusion.--Funds made available to carry out the 
        conservation reserve program may not be used to carry out the 
        ACES program.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2505. SMALL WATERSHED REHABILITATION PROGRAM.

    Section 14(h)(2)(E) of the Watershed Protection and Flood 
Prevention Act (16 U.S.C. 1012(h)(2)(E)) is amended by striking 
``2012'' and inserting ``2017''.

SEC. 2506. TERMINAL LAKES ASSISTANCE.

    Section 2507 of the Food, Security, and Rural Investment Act of 
2002 (43 U.S.C. 2211 note; Public Law 107-171) is amended to read as 
follows:

``SEC. 2507. TERMINAL LAKES ASSISTANCE.

    ``(a) Definitions.--In this section:
            ``(1) Eligible land.--The term `eligible land' means 
        privately owned agricultural land (including land in which a 
        State has a property interest as a result of state water law)--
                    ``(A) that a landowner voluntarily agrees to sell 
                to a State; and
                    ``(B) which--
                            ``(i)(I) is ineligible for enrollment as a 
                        wetland easement established under the 
                        Agricultural Conservation Easement Program 
                        under subtitle H of the Food Security Act of 
                        1985;
                            ``(II) is flooded to--
                                    ``(aa) an average depth of at least 
                                6.5 feet; or
                                    ``(bb) a level below which the 
                                State determines the management of the 
                                water level is beyond the control of 
                                the State or landowner; or
                            ``(III) is inaccessible for agricultural 
                        use due to the flooding of adjoining property 
                        (such as islands of agricultural land created 
                        by flooding);
                            ``(ii) is located within a watershed with 
                        water rights available for lease or purchase; 
                        and
                            ``(iii) has been used during at least 5 of 
                        the immediately preceding 30 years--
                                    ``(I) to produce crops or hay; or
                                    ``(II) as livestock pasture or 
                                grazing.
            ``(2) Program.--The term `program' means the voluntary land 
        purchase program established under this section.
            ``(3) Terminal lake.--The term `terminal lake' means a lake 
        and its associated riparian and watershed resources that is--
                    ``(A) considered flooded because there is no 
                natural outlet for water accumulating in the lake or 
                the associated riparian area such that the watershed 
                and surrounding land is consistently flooded; or
                    ``(B) considered terminal because it has no natural 
                outlet and is at risk due to a history of consistent 
                Federal assistance to address critical resource 
                conditions, including insufficient water available to 
                meet the needs of the lake, general uses, and water 
                rights.
    ``(b) Assistance.--The Secretary shall--
            ``(1) provide grants under subsection (c) for the purchase 
        of eligible land impacted by a terminal lake described in 
        subsection (a)(3)(A); and
            ``(2) provide funds to the Secretary of the Interior 
        pursuant to subsection (e)(2) with assistance in accordance 
        with subsection (d) for terminal lakes described in subsection 
        (a)(3)(B).
    ``(c) Land Purchase Grants.--
            ``(1) In general.--Using funds provided under subsection 
        (e)(1), the Secretary shall make available land purchase grants 
        to States for the purchase of eligible land in accordance with 
        this subsection.
            ``(2) Implementation.--
                    ``(A) Amount.--A land purchase grant shall be in an 
                amount not to exceed the lesser of--
                            ``(i) 50 percent of the total purchase 
                        price per acre of the eligible land; or
                            ``(ii)(I) in the case of eligible land that 
                        was used to produce crops or hay, $400 per 
                        acre; and
                            ``(II) in the case of eligible land that 
                        was pasture or grazing land, $200 per acre.
                    ``(B) Determination of purchase price.--A State 
                purchasing eligible land with a land purchase grant 
                shall ensure, to the maximum extent practicable, that 
                the purchase price of such land reflects the value, if 
                any, of other encumbrances on the eligible land to be 
                purchased, including easements and mineral rights.
                    ``(C) Cost-share required.--To be eligible to 
                receive a land purchase grant, a State shall provide 
                matching non-Federal funds in an amount equal to 50 
                percent of the amount described in subparagraph (A), 
                including additional non-Federal funds.
                    ``(D) Conditions.--To receive a land purchase 
                grant, a State shall agree--
                            ``(i) to ensure that any eligible land 
                        purchased is--
                                    ``(I) conveyed in fee simple to the 
                                State; and
                                    ``(II) free from mortgages or other 
                                liens at the time title is transferred;
                            ``(ii) to maintain ownership of the 
                        eligible land in perpetuity;
                            ``(iii) to pay (from funds other than grant 
                        dollars awarded) any costs associated with the 
                        purchase of eligible land under this section, 
                        including surveys and legal fees; and
                            ``(iv) to keep eligible land in a 
                        conserving use, as defined by the Secretary.
                    ``(E) Loss of federal benefits.--Eligible land 
                purchased with a grant under this section shall lose 
                eligibility for any benefits under other Federal 
                programs, including--
                            ``(i) benefits under title XII of the Food 
                        Security Act of 1985 (16 U.S.C. 3801 et seq.);
                            ``(ii) benefits under the Federal Crop 
                        Insurance Act (7 U.S.C. 1501 et seq.); and
                            ``(iii) covered benefits described in 
                        section 1001D(b) of the Food Security Act of 
                        1985 (7 U.S.C. 1308-3a).
                    ``(F) Prohibition.--Any Federal rights or benefits 
                associated with eligible land prior to purchase by a 
                State may not be transferred to any other land or 
                person in anticipation of or as a result of such 
                purchase.
    ``(d) Water Assistance.--
            ``(1) In general.--The Secretary of the Interior, acting 
        through the Commissioner of Reclamation, may use the funds 
        described in subsection (e)(2) to administer and provide 
        financial assistance to carry out this subsection to provide 
        water and assistance to a terminal lake described in subsection 
        (a)(3)(B) through willing sellers or willing participants 
        only--
                    ``(A) to lease water;
                    ``(B) to purchase land, water appurtenant to the 
                land, and related interests; and
                    ``(C) to carry out research, support and 
                conservation activities for associated fish, wildlife, 
                plant, and habitat resources.''
            ``(2) Exclusions.--The Secretary of the Interior may not 
        use this subsection to deliver assistance to the Great Salt 
        Lake in Utah, lakes that are considered dry lakes, or other 
        lakes that do not meet the purposes of this section, as 
        determined by the Secretary of the Interior.
            ``(3) Transitional provision.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this section, any funds made available 
                before the date of enactment of the Agriculture Reform, 
                Food, and Jobs Act of 2012 under a provision of law 
                described in subparagraph (B) shall remain available 
                using the provisions of law (including regulations) in 
                effect on the day before the date of enactment of that 
                Act.
                    ``(B) Described laws.--The provisions of law 
                described in this section are--
                            ``(i) section 2507 of the Farm Security and 
                        Rural Investment Act of 2002 (43 U.S.C. 2211 
                        note; Public Law 107-171) (as in effect on the 
                        day before the date of enactment of the 
                        Agriculture Reform, Food, and Jobs Act of 
                        2012);
                            ``(ii) section 207 of the Energy and Water 
                        Development Appropriations Act, 2003 (Public 
                        Law 108-7; 117 Stat. 146);
                            ``(iii) section 208 of the Energy and Water 
                        Development Appropriations Act, 2006 (Public 
                        Law 109-103; 119 Stat. 2268, 123 Stat. 2856); 
                        and
                            ``(iv) section 208 of the Energy and Water 
                        Development and Related Agencies Appropriations 
                        Act, 2010 (Public Law 111-85; 123 Stat. 2858, 
                        123 Stat. 2967, 125 Stat. 867).
    ``(e) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to the Secretary to carry out subsection (c) 
        $25,000,000, to remain available until expended.
            ``(2) Commodity credit corporation.--As soon as practicable 
        after the date of enactment of the Agriculture Reform, Food, 
        and Jobs Act of 2012, the Secretary shall transfer to the 
        Bureau of Reclamation Water and Related Resources Account 
        $150,000,000 from the funds of the Commodity Credit Corporation 
        to carry out subsection (d), to remain available until 
        expended.''.

                 Subtitle G--Funding and Administration

SEC. 2601. FUNDING.

    (a) In General.--Section 1241 of the Food Security Act of 1985 (16 
U.S.C. 3841) is amended by striking subsection (a) and inserting the 
following:
    ``(a) Annual Funding.--For each of fiscal years 2013 through 2017, 
the Secretary shall use the funds, facilities, and authorities of the 
Commodity Credit Corporation to carry out the following programs under 
this title (including the provision of technical assistance):
            ``(1) The conservation reserve program under subchapter B 
        of chapter 1 of subtitle D, including, to the maximum extent 
        practicable--
                    ``(A) $10,000,000 for the period of fiscal years 
                2013 through 2017 to provide payments under paragraph 
                (3) of section 1234(b) in connection with thinning 
                activities conducted on land described in subparagraph 
                (B)(iii) of that paragraph; and
                    ``(B) $50,000,000 for the period of fiscal years 
                2013 through 2017 to carry out section 1235(f) to 
                facilitate the transfer of land subject to contracts 
                from retired or retiring owners and operators to 
                beginning farmers or ranchers and socially 
                disadvantaged farmers or ranchers.
            ``(2) The Agricultural Conservation Easement Program under 
        subtitle H using to the maximum extent practicable--
                    ``(A) $223,000,000 for fiscal year 2013;
                    ``(B) $702,000,000 for fiscal year 2014;
                    ``(C) $500,000,000 for fiscal year 2015;
                    ``(D) $525,000,000 for fiscal year 2016; and
                    ``(E) $250,000,000 for fiscal year 2017.
            ``(3) The conservation security program under subchapter A 
        of chapter 2 of subtitle D, using such sums as are necessary to 
        administer contracts entered into before September 30, 2008.
            ``(4) The conservation stewardship program under subchapter 
        B of chapter 2 of subtitle D.
            ``(5) The environmental quality incentives program under 
        chapter 4 of subtitle D, using, to the maximum extent 
        practicable--
                    ``(A) $1,455,000,000 for fiscal year 2013;
                    ``(B) $1,645,000,000 for fiscal year 2014; and
                    ``(C) $1,650,000,000 for each of fiscal years 2015 
                through 2017.''.
    (b) Guaranteed Availability of Funds.--Section 1241 of the Food 
Security Act of 1985 (16 U.S.C. 3841) is amended--
            (1) by redesignating subsections (b) through (h) as 
        subsections (c) through (i), respectively; and
            (2) by inserting after subsection (a) the following:
    ``(b) Availability of Funds.--Amounts made available by subsection 
(a) shall be used by the Secretary to carry out the programs specified 
in such subsection for fiscal years 2013 through 2017 and shall remain 
available until expended. Amounts made available for the programs 
specified in such subsection during a fiscal year through 
modifications, cancellations, terminations, and other related 
administrative actions and not obligated in that fiscal year shall 
remain available for obligation during subsequent fiscal years, but 
shall reduce the amount of additional funds made available in the 
subsequent fiscal year by an amount equal to the amount remaining 
unobligated.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on October 1, 2012.

SEC. 2602. TECHNICAL ASSISTANCE.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is 
amended by striking subsection (c) (as redesignated by section 
2601(b)(1)) and inserting the following:
    ``(c) Technical Assistance.--
            ``(1) Availability of funds.--Commodity Credit Corporation 
        funds made available for a fiscal year for each of the programs 
        specified in subsection (a)--
                    ``(A) shall be available for the provision of 
                technical assistance for the programs for which funds 
                are made available as necessary to implement the 
                programs effectively; and
                    ``(B) shall not be available for the provision of 
                technical assistance for conservation programs 
                specified in subsection (a) other than the program for 
                which the funds were made available.
            ``(2) Report.--Not later than December 31, 2012, the 
        Secretary shall submit (and update as necessary in subsequent 
        years) to the Committee on Agriculture of the House of 
        Representatives and the Committee on Agriculture, Nutrition, 
        and Forestry of the Senate a report--
                    ``(A) detailing the amount of technical assistance 
                funds requested and apportioned in each program 
                specified in subsection (a) during the preceding fiscal 
                year; and
                    ``(B) any other data relating to this provision 
                that would be helpful to such Committees.''.

SEC. 2603. REGIONAL EQUITY.

    Section 1241 of the Food Security Act of 1985 (16 U.S.C. 3841) is 
amended by striking subsection (e) (as redesignated by section 
2601(b)(1)) and inserting the following:
    ``(e) Regional Equity.--
            ``(1) Equitable distribution.--When determining funding 
        allocations each fiscal year, the Secretary shall, after 
        considering available funding and program demand in each State, 
        provide a distribution of funds for conservation programs under 
        subtitle D (excluding the conservation reserve program under 
        subchapter B of chapter 1), subtitle H (excluding wetland 
        easements under section 1265C), and subtitle I to ensure 
        equitable program participation proportional to historical 
        funding allocations and usage by all States.
            ``(2) Minimum percentage.--In determining the specific 
        funding allocations under paragraph (1), the Secretary shall--
                    ``(A) ensure that during the first quarter of each 
                fiscal year each State has the opportunity to establish 
                that the State can use an aggregate allocation amount 
                of at least 0.6 percent of the funds made available for 
                those conservation programs; and
                    ``(B) for each State that can so establish, provide 
                an aggregate amount of at least 0.6 percent of the 
                funds made available for those conservation 
                programs.''.

SEC. 2604. RESERVATION OF FUNDS TO PROVIDE ASSISTANCE TO CERTAIN 
              FARMERS OR RANCHERS FOR CONSERVATION ACCESS.

    Subsection (h) of section 1241 of the Food Security Act of 1985 (16 
U.S.C. 3841) (as redesignated by section 2601(b)(1)) is amended--
            (1) in paragraph (1) by striking ``2012'' and inserting 
        ``2017''; and
            (2) by adding at the end the following:
            ``(4) Preference.--In providing assistance under paragraph 
        (1), the Secretary shall give preference to a veteran farmer or 
        rancher (as defined in section 2501(e) of the Food, 
        Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 
        2279(e))) that qualifies under subparagraph (A) or (B) of 
        paragraph (1).''.

SEC. 2605. ANNUAL REPORT ON PROGRAM ENROLLMENTS AND ASSISTANCE.

    Subsection (i) of section 1241 of the Food Security Act of 1985 (16 
U.S.C. 3841) (as redesignated by section 2601(b)(1)) is amended--
            (1) in paragraph (1), by striking ``wetlands reserve 
        program'' and inserting ``agricultural conservation easement 
        program'';
            (2) by striking paragraphs (2) and (3) and redesignating 
        paragraphs (4), (5), and (6) as paragraphs (2), (3), and (4), 
        respectively;
            (3) in paragraph (3) (as so redesignated)--
                    (A) by striking ``agricultural water enhancement 
                program'' and inserting ``regional conservation 
                partnership program''; and
                    (B) by striking ``section 1240I(g)'' and inserting 
                ``section 1271C(c)(3)''; and
            (4) by adding at the end the following:
            ``(5) Payments made under the conservation stewardship 
        program.
            ``(6) Waivers granted by the Secretary under section 
        1265B(b)(2)(C).''.

SEC. 2606. ADMINISTRATIVE REQUIREMENTS FOR CONSERVATION PROGRAMS.

    Section 1244 of the Food Security Act of 1985 (16 U.S.C. 3844) is 
amended--
            (1) in subsection (a)(2), by adding at the end the 
        following:
                    ``(E) Veteran farmers or ranchers (as defined in 
                section 2501(e) of the Food, Agriculture, Conservation, 
                and Trade Act of 1990 (7 U.S.C. 2279(e))).'';
            (2) in subsection (d), by inserting ``, H, and I'' before 
        the period at the end;
            (3) in subsection (f)--
                    (A) in paragraph (1)(B), by striking ``country'' 
                and inserting ``county''; and
                    (B) in paragraph (3), by striking ``subsection 
                (c)(2)(B) or (f)(4)'' and inserting ``subsection 
                (c)(2)(A)(ii) or (f)(2)'';
            (4) by striking subsection (i) and inserting the following:
    ``(i) Conservation Application Process.--
            ``(1) Initial application.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Secretary 
                shall establish a single, simplified application for 
                eligible entities to use in initially requesting 
                assistance under any conservation program administered 
                by the Secretary (referred to in this subsection as the 
                `initial application').
                    ``(B) Requirements.--To the maximum extent 
                practicable, the Secretary shall ensure that--
                            ``(i) a conservation program applicant is 
                        not required to provide information that is 
                        duplicative of information or resources already 
                        available to the Secretary for that applicant 
                        and the specific operation of the applicant; 
                        and
                            ``(ii) the initial application process is 
                        streamlined to minimize complexity and 
                        redundancy.
            ``(2) Review of application process.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Secretary 
                shall review the application process for each 
                conservation program administered by the Secretary, 
                including the forms and processes used to receive 
                assistance requests from eligible program participants.
                    ``(B) Requirements.--In carrying out the review, 
                the Secretary shall determine what information the 
                participant is required to submit during the 
                application process, including--
                            ``(i) identification information for the 
                        applicant;
                            ``(ii) identification and location 
                        information for the land parcel or tract of 
                        concern;
                            ``(iii) a general statement of the need or 
                        resource concern of the applicant for the land 
                        parcel or tract; and
                            ``(iv) the minimum amount of other 
                        information the Secretary considers to be 
                        essential for the applicant to provide 
                        personally.
            ``(3) Revision and streamline.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this subsection, the Secretary 
                shall carry out a revision of the application forms and 
                processes for each conservation program administered by 
                the Secretary to enable use of information technology 
                to incorporate appropriate data and information 
                concerning the conservation needs and solutions 
                appropriate for the land area identified by the 
                applicant.
                    ``(B) Goal.--The goal of the revision shall be to 
                streamline the application process to minimize the 
                burden placed on applicants.
            ``(4) Conservation program application.--
                    ``(A) In general.--Once the needs of an applicant 
                have been adequately assessed by the Secretary, or a 
                third party provider under section 1242, based on the 
                initial application, in order to determine the 1 or 
                more programs under this title that best match the 
                needs of the applicant, with the approval of the 
                applicant, the Secretary may convert the initial 
                application into the specific application for 
                assistance for the relevant conservation program.
                    ``(B) Secretarial burden.--To the maximum extent 
                practicable, the Secretary shall--
                            ``(i) complete the specific application for 
                        conservation program assistance for each 
                        applicant; and
                            ``(ii) request only that specific further 
                        information from the applicant that is not 
                        already available to the Secretary.
            ``(5) Implementation and notification.--Not later than 1 
        year after the date of enactment of this subsection, the 
        Secretary shall submit to the Committee on Agriculture of the 
        House of Representatives and the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate written notification that 
        the Secretary has fulfilled the requirements of this 
        subsection.''; and
            (5) by adding at the end the following:
    ``(j) Improved Administrative Efficiency and Effectiveness.--In 
administrating a conservation program under this title, the Secretary 
shall, to the maximum extent practicable--
            ``(1) seek to reduce administrative burdens and costs to 
        producers by streamlining conservation planning and program 
        resources; and
            ``(2) take advantage of new technologies to enhance 
        efficiency and effectiveness.
    ``(k) Relation to Other Payments.--Any payment received by an owner 
or operator under this title, including an easement payment or rental 
payment, shall be in addition to, and not affect, the total amount of 
payments that the owner or operator is otherwise eligible to receive 
under any of the following:
            ``(1) This Act.
            ``(2) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
            ``(3) The Agriculture Reform, Food, and Jobs Act of 2012.
            ``(4) Any law that succeeds a law specified in paragraph 
        (1), (2), or (3).
    ``(l) Funding for Indian Tribes.--In carrying out the conservation 
stewardship program under subchapter B of chapter 2 of subtitle D and 
the environmental quality incentives program under chapter 4 of 
subtitle D, the Secretary may enter into alternative funding 
arrangements with Indian tribes if the Secretary determines that the 
goals and objectives of the programs will be met by such arrangements, 
and that statutory limitations regarding contracts with individual 
producers will not be exceeded by any Tribal member.''.

SEC. 2607. RULEMAKING AUTHORITY.

    Subtitle E of title XII of the Food Security Act of 1985 (16 U.S.C. 
3841 et seq.) is amended by adding at the end the following:

``SEC. 1246. REGULATIONS.

    ``(a) In General.--The Secretary shall promulgate such regulations 
as are necessary to implement programs under this title, including such 
regulations as the Secretary determines to be necessary to ensure a 
fair and reasonable application of the limitations established under 
section 1244(f).
    ``(b) Rulemaking Procedure.--The promulgation of regulations and 
administration of programs under this title--
            ``(1) shall be carried out without regard to--
                    ``(A) the Statement of Policy of the Secretary 
                effective July 24, 1971 (36 Fed. Reg. 13804), relating 
                to notices of proposed rulemaking and public 
                participation in rulemaking; and
                    ``(B) chapter 35 of title 44, United States Code 
                (commonly known as the Paperwork Reduction Act); and
            ``(2) shall be made as an interim rule effective on 
        publication with an opportunity for notice and comment.
    ``(c) Congressional Review of Agency Rulemaking.--In promulgating 
regulations under this section, the Secretary shall use the authority 
provided under section 808 of title 5, United States Code.''.

SEC. 2608. STANDARDS FOR STATE TECHNICAL COMMITTEES.

    Section 1261(b) of the Food Security Act of 1985 (16 U.S.C. 
3861(b)) is amended by striking ``Not later than 180 days after the 
date of enactment of the Food, Conservation, and Energy Act of 2008, 
the Secretary shall develop'' and inserting ``The Secretary shall 
review and update as necessary''.

SEC. 2609. HIGHLY ERODIBLE LAND AND WETLAND CONSERVATION FOR CROP 
              INSURANCE.

    (a) Highly Erodible Land Program Ineligibility.--
            (1) In general.--Section 1211(a)(1) of the Food Security 
        Act of 1985 (16 U.S.C. 3811(a)(1)) is amended--
                    (A) in subparagraph (C), by striking ``or'' at the 
                end;
                    (B) in subparagraph (D), by adding ``or'' at the 
                end; and
                    (C) by adding at the end the following:
                    ``(E) any portion of premium paid by the Federal 
                Crop Insurance Corporation for a plan or policy of 
                insurance under the Federal Crop Insurance Act (7 
                U.S.C. 1501 et seq.);''.
            (2) Exemptions.--Section 1212(a)(2) of the Food Security 
        Act of 1985 (16 U.S.C. 3812(a)(2)) is amended--
                    (A) in the first sentence, by striking ``(2) If,'' 
                and inserting the following:
            ``(2) Eligibility based on compliance with conservation 
        plan.--
                    ``(A) In general.--If,'';
                    (B) in the second sentence, by striking ``In 
                carrying'' and inserting the following:
                    ``(B) Minimization of documentation.--In 
                carrying''; and
                    (C) by adding at the end the following:
                    ``(C) Crop insurance.--In the case of payments that 
                are subject to section 1211 for the first time due to 
                the amendment made by section 2609(a) of the 
                Agriculture Reform, Food, and Jobs Act of 2012, any 
                person who produces an agricultural commodity on the 
                land that is the basis of the payments shall have until 
                January 1 of the fifth year after the date on which the 
                payments became subject to section 1211 to develop and 
                comply with an approved conservation plan.''.
    (b) Wetland Conservation Program Ineligibility.--Section 1221(b) of 
the Food Security Act of 1985 (16 U.S.C. 3821) is amended by adding at 
the end the following:
            ``(4) Any portion of premium paid by the Federal Crop 
        Insurance Corporation for a plan or policy of insurance under 
        the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).''.

 Subtitle H--Repeal of Superseded Program Authorities and Transitional 
                               Provisions

SEC. 2701. COMPREHENSIVE CONSERVATION ENHANCEMENT PROGRAM.

    Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830) is 
repealed.

SEC. 2702. EMERGENCY FORESTRY CONSERVATION RESERVE PROGRAM.

    (a) Repeal.--Section 1231A of the Food Security Act of 1985 (16 
U.S.C. 3831a) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts.--The amendment made by 
        this section shall not affect the validity or terms of any 
        contract entered into by the Secretary of Agriculture under 
        section 1231A of the Food Security Act of 1985 (16 U.S.C. 
        3831a) before October 1, 2012, or any payments required to be 
        made in connection with the contract.
            (2) Funding.--The Secretary may use funds made available to 
        carry out the conservation reserve program under 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.) to continue to carry out 
        contracts referred to in paragraph (1) using the provisions of 
        law and regulation applicable to such contracts as in existence 
        on September 30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2703. WETLANDS RESERVE PROGRAM.

    (a) Repeal.--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.) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts and easements.--The 
        amendment made by this section shall not affect the validity or 
        terms of any contract or easement 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 October 1, 2012, or any payments required to be 
        made in connection with the contract or easement.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of 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.), any funds made available from the 
                Commodity Credit Corporation to carry out the wetlands 
                reserve program under that subchapter for fiscal years 
                2009 through 2012 shall be made available to carry out 
                contracts or easements referred to in paragraph (1) 
                that were entered into prior to October 1, 2012 
                (including the provision of technical assistance), 
                provided that no such contract or easement is modified 
                so as to increase the amount of the payment received.
                    (B) Other.--The Secretary may use funds made 
                available to carry out the agricultural conservation 
                easement program under subtitle H of title XII of the 
                Food Security Act of 1985, as added by section 2301 of 
                this Act, to continue to carry out contracts and 
                easements referred to in paragraph (1) using the 
                provisions of law and regulation applicable to such 
                contracts and easements as in existence on September 
                30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2704. FARMLAND PROTECTION PROGRAM AND FARM VIABILITY PROGRAM.

    (a) Repeal.--Subchapter C of chapter 2 of subtitle D of title XII 
of the Food Security Act of 1985 (16 U.S.C. 3838h et seq.) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing agreements and easements.--The 
        amendment made by this section shall not affect the validity or 
        terms of any agreement or easement entered into by the 
        Secretary of Agriculture under subchapter C of chapter 2 of 
        subtitle D of title XII of the Food Security Act of 1985 (16 
        U.S.C. 3838h et seq.) before October 1, 2012, or any payments 
        required to be made in connection with the agreement or 
        easement.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of subchapter C of chapter 2 of subtitle D of 
                title XII of the Food Security Act of 1985 (16 U.S.C. 
                3838h et seq.), any funds made available from the 
                Commodity Credit Corporation to carry out the farmland 
                protection program under that subchapter for fiscal 
                years 2009 through 2012 shall be made available to 
                carry out agreements and easements referred to in 
                paragraph (1) that were entered into prior to October 
                1, 2012 (including the provision of technical 
                assistance).
                    (B) Other.--On exhaustion of funds made available 
                under subparagraph (A), the Secretary may use funds 
                made available to carry out the agricultural 
                conservation easement program under subtitle H of title 
                XII of the Food Security Act of 1985, as added by 
                section 2301 of this Act, to continue to carry out 
                agreements and easements referred to in paragraph (1) 
                using the provisions of law and regulation applicable 
                to such agreements and easement as in existence on 
                September 30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2705. GRASSLAND RESERVE PROGRAM.

    (a) Repeal.--Subchapter D of chapter 2 of subtitle D of title XII 
of the Food Security Act of 1985 (16 U.S.C. 3838n et seq.) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts, agreements, and 
        easements.--The amendment made by this section shall not affect 
        the validity or terms of any contract, agreement, or easement 
        entered into by the Secretary of Agriculture under subchapter D 
        of chapter 2 of subtitle D of title XII of the Food Security 
        Act of 1985 (16 U.S.C. 3838n et seq.) before October 1, 2012, 
        or any payments required to be made in connection with the 
        contract, agreement, or easement.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of subchapter D of chapter 2 of subtitle D of 
                title XII of the Food Security Act of 1985 (16 U.S.C. 
                3838n et seq.), any funds made available from the 
                Commodity Credit Corporation to carry out the grassland 
                reserve program under that subchapter for fiscal years 
                2009 through 2012 shall be made available to carry out 
                contracts, agreements, or easements referred to in 
                paragraph (1) that were entered into prior to October 
                1, 2012 (including the provision of technical 
                assistance), provided that no such contract, agreement, 
                or easement is modified so as to increase the amount of 
                the payment received.
                    (B) Other.--The Secretary may use funds made 
                available to carry out the agricultural conservation 
                easement program under subtitle H of title XII of the 
                Food Security Act of 1985, as added by section 2301 of 
                this Act, to continue to carry out contracts, 
                agreements, and easements referred to in paragraph (1) 
                using the provisions of law and regulation applicable 
                to such contracts, agreements, and easements as in 
                existence on September 30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2706. AGRICULTURAL WATER ENHANCEMENT PROGRAM.

    (a) Repeal.--Section 1240I of the Food Security Act of 1985 (16 
U.S.C. 3839aa-9) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts and agreements.--The 
        amendment made by this section shall not affect the validity or 
        terms of any contract or agreement entered into by the 
        Secretary of Agriculture under section 1240I of the Food 
        Security Act of 1985 (16 U.S.C. 3839aa-9) before October 1, 
        2012, or any payments required to be made in connection with 
        the contract or agreement.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of section 1240I of the Food Security Act of 
                1985 (16 U.S.C. 3839aa-9), any funds made available 
                from the Commodity Credit Corporation to carry out the 
                agricultural water enhancement program under that 
                section for fiscal years 2009 through 2012 shall be 
                made available to carry out contracts and agreements 
                referred to in paragraph (1) that were entered into 
                prior to October 1, 2012 (including the provision of 
                technical assistance).
                    (B) Other.--On exhaustion of funds made available 
                under subparagraph (A), the Secretary may use funds 
                made available to carry out the regional conservation 
                partnerships program under subtitle I of title XII of 
                the Food Security Act of 1985, as added by section 2401 
                of this Act, to continue to carry out contracts and 
                agreements referred to in paragraph (1) using the 
                provisions of law and regulation applicable to such 
                contracts and agreements as in existence on September 
                30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2707. WILDLIFE HABITAT INCENTIVE PROGRAM.

    (a) Repeal.--Section 1240N of the Food Security Act of 1985 (16 
U.S.C. 3839bb-1) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts.--The amendment made by 
        this section shall not affect the validity or terms of any 
        contract entered into by the Secretary of Agriculture under 
        section 1240N of the Food Security Act of 1985 (16 U.S.C. 
        3839bb-1) before October 1, 2012, or any payments required to 
        be made in connection with the contract.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of section 1240N of the Food Security Act of 
                1985 (16 U.S.C. 3839bb-1), any funds made available 
                from the Commodity Credit Corporation to carry out the 
                wildlife habitat incentive program under that section 
                for fiscal years 2009 through 2012 shall be made 
                available to carry out contracts referred to in 
                paragraph (1) which were entered into prior to October 
                1, 2012 (including the provision of technical 
                assistance).
                    (B) Other.--On exhaustion of funds made available 
                under subparagraph (A), the Secretary may use funds 
                made available to carry out the environmental quality 
                incentives program under chapter 4 of subtitle D of 
                title XII of the Food Security Act of 1985 (16 U.S.C. 
                3839aa et seq.) to continue to carry out contracts 
                referred to in paragraph (1) using the provisions of 
                law and regulation applicable to such contracts as in 
                existence on September 30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2708. GREAT LAKES BASIN PROGRAM.

    (a) Repeal.--Section 1240P of the Food Security Act of 1985 (16 
U.S.C. 3839bb-3) is repealed.
    (b) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2709. CHESAPEAKE BAY WATERSHED PROGRAM.

    (a) Repeal.--Section 1240Q of the Food Security Act of 1985 (16 
U.S.C. 3839bb-4) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts, agreements, and 
        easements.--The amendment made by this section shall not affect 
        the validity or terms of any contract, agreement, or easement 
        entered into by the Secretary of Agriculture under section 
        1240Q of the Food Security Act of 1985 (16 U.S.C. 3839bb-4) 
        before October 1, 2012, or any payments required to be made in 
        connection with the contract, agreement, or easement.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of section 1240Q of the Food Security Act of 
                1985 (16 U.S.C. 3839bb-4), any funds made available 
                from the Commodity Credit Corporation to carry out the 
                Chesapeake Bay watershed program under that section for 
                fiscal years 2009 through 2012 shall be made available 
                to carry out contracts, agreements, and easements 
                referred to in paragraph (1) that were entered into 
                prior to October 1, 2012 (including the provision of 
                technical assistance).
                    (B) Other.--The Secretary may use funds made 
                available to carry out the regional conservation 
                partnerships program under subtitle I of title XII of 
                the Food Security Act of 1985, as added by section 2401 
                of this Act, to continue to carry out contracts, 
                agreements, and easements referred to in paragraph (1) 
                using the provisions of law and regulation applicable 
                to such contracts, agreements, and easements as in 
                existence on September 30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2710. COOPERATIVE CONSERVATION PARTNERSHIP INITIATIVE.

    (a) Repeal.--Section 1243 of the Food Security Act of 1985 (16 
U.S.C. 3843) is repealed.
    (b) Transitional Provisions.--
            (1) Effect on existing contracts and agreements.--The 
        amendment made by this section shall not affect the validity or 
        terms of any contract or agreement entered into by the 
        Secretary of Agriculture under section 1243 of the Food 
        Security Act of 1985 (16 U.S.C. 3843) before October 1, 2012, 
        or any payments required to be made in connection with the 
        contract or agreement.
            (2) Funding.--
                    (A) Use of prior year funds.--Notwithstanding the 
                repeal of section 1243 of the Food Security Act of 1985 
                (16 U.S.C. 3843), any funds made available from the 
                Commodity Credit Corporation to carry out the 
                cooperative conservation partnership initiative under 
                that section for fiscal years 2009 through 2012 shall 
                be made available to carry out contracts and agreements 
                referred to in paragraph (1) that were entered into 
                prior to October 1, 2012 (including the provision of 
                technical assistance).
                    (B) Other.--On exhaustion of funds made available 
                under subparagraph (A), the Secretary may use funds 
                made available to carry out the regional conservation 
                partnerships program under subtitle I of title XII of 
                the Food Security Act of 1985, as added by section 2401 
                of this Act, to continue to carry out contracts and 
                agreements referred to in paragraph (1) using the 
                provisions of law and regulation applicable to such 
                contracts and agreements as in existence on September 
                30, 2012.
    (c) Effective Date.--The amendment made by this section shall take 
effect on October 1, 2012.

SEC. 2711. ENVIRONMENTAL EASEMENT PROGRAM.

    Chapter 3 of subtitle D of title XII of the Food Security Act of 
1985 (16 U.S.C. 3839 et seq.) is repealed.

SEC. 2712. TECHNICAL AMENDMENTS.

    (a) Section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 
3801(a)) is amended in the matter preceding paragraph (1) by striking 
``E'' and inserting ``I''.
    (b) Section 1211(a) of the Food Security Act of 1985 (16 U.S.C. 
3811(a)) is amended by striking ``predominate'' each place it appears 
and inserting ``predominant''.
    (c) Section 1242(i) of the Food Security Act of 1985(16 U.S.C. 
3842(i)) is amended in the subsection heading by striking 
``speciality'' and inserting ``specialty''.

                            TITLE III--TRADE

                     Subtitle A--Food for Peace Act

SEC. 3001. SET-ASIDE FOR SUPPORT FOR ORGANIZATIONS THROUGH WHICH 
              NONEMERGENCY ASSISTANCE IS PROVIDED.

    Effective October 1, 2012, section 202(e)(1) of the Food for Peace 
Act (7 U.S.C. 1722(e)(1)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``13 percent'' and inserting ``15 percent''; and
            (2) in subparagraph (A), by striking ``new'' and inserting 
        ``and enhancing''.

SEC. 3002. FOOD AID QUALITY.

    Section 202(h) of the Food for Peace Act (7 U.S.C. 1722(h)) is 
amended--
            (1) by striking paragraph (1) and inserting the following:
            ``(1) In general.--The Administrator shall use funds made 
        available for fiscal year 2013 and subsequent fiscal years to 
        carry out this title--
                    ``(A) to assess the types and quality of 
                agricultural commodities and products donated for food 
                aid;
                    ``(B) to adjust products and formulations, 
                including potential introduction of new fortificants 
                and products, as necessary to cost-effectively meet 
                nutrient needs of target populations;
                    ``(C) to test prototypes;
                    ``(D) to adopt new specifications or improve 
                existing specifications for micronutrient fortified 
                food aid products, based on the latest developments in 
                food and nutrition science, and in coordination with 
                other international partners;
                    ``(E) to develop new program guidance to facilitate 
                improved matching of products to purposes having 
                nutritional intent, in coordination with other 
                international partners;
                    ``(F) to develop improved guidance for implementing 
                partners on how to address nutritional deficiencies 
                that emerge among recipients for whom food assistance 
                is the sole source of diet in emergency programs that 
                extend beyond 1 year, in coordination with other 
                international partners; and
                    ``(G) to evaluate, in appropriate settings and as 
                necessary, the performance and cost-effectiveness of 
                new or modified specialized food products and program 
                approaches designed to meet the nutritional needs of 
                the most vulnerable groups, such as pregnant and 
                lactating mothers, and children under the age of 5.''; 
                and
            (2) in paragraph (3), by striking ``2011'' and inserting 
        ``2017''.

SEC. 3003. MINIMUM LEVELS OF ASSISTANCE.

    Section 204(a) of the Food for Peace Act (7 U.S.C. 1724(a)) is 
amended--
            (1) in paragraph (1), by striking ``2012'' and inserting 
        ``2017''; and
            (2) in paragraph (2), by striking ``2012'' and inserting 
        ``2017''.

SEC. 3004. REAUTHORIZATION OF FOOD AID CONSULTATIVE GROUP.

    Section 205(f) of the Food for Peace Act (7 U.S.C. 1725(f)) is 
amended by striking ``2012'' and inserting ``2017''.

SEC. 3005. OVERSIGHT, MONITORING, AND EVALUATION OF FOOD FOR PEACE ACT 
              PROGRAMS.

    Section 207(f) of the Food for Peace Act (7 U.S.C. 1726a(f)) is 
amended--
            (1) by striking paragraph (4) and redesignating paragraphs 
        (5) and (6) as paragraphs (4) and (5), respectively; and
            (2) in subparagraph (A) of paragraph (5) (as so 
        redesignated)--
                    (A) by striking ``2012'' and inserting ``2017''; 
                and
                    (B) by striking ``during fiscal year 2009'' and 
                inserting ``during the period of fiscal years 2013 
                through 2017''.

SEC. 3006. ASSISTANCE FOR STOCKPILING AND RAPID TRANSPORTATION, 
              DELIVERY, AND DISTRIBUTION OF SHELF-STABLE PREPACKAGED 
              FOODS.

    Section 208(f) of the Food for Peace Act (7 U.S.C. 1726b(f)) is 
amended by striking ``2012'' and inserting ``2017''.

SEC. 3007. LIMITATION ON TOTAL VOLUME OF COMMODITIES MONETIZED.

    Section 403 of the Food for Peace Act (7 U.S.C. 1733) is amended by 
adding at the end the following:
    ``(m) Limitation on Monetization of Commodities.--
            ``(1) Limitation.--
                    ``(A) In general.--Unless the Administrator grants 
                a waiver under paragraph (2), no commodity may be made 
                available under this Act unless the rate of return for 
                the commodity (as determined under subparagraph (B)) is 
                at least 70 percent.
                    ``(B) Rate of return.--For purposes of subparagraph 
                (A), the rate of return shall be equal to the 
                proportion that--
                            ``(i) the proceeds the implementing 
                        partners generate through monetization; bears 
                        to
                            ``(ii) the cost to the Federal Government 
                        to procure and ship the commodities to a 
                        recipient country for monetization.
            ``(2) Waiver authority.--The Administrator may waive the 
        application of the limitation in paragraph (1) with regard to a 
        commodity for a recipient country if the Administrator 
        determines that it is necessary to achieve the purposes of this 
        Act in the recipient country.
            ``(3) Report.--Not later than 90 days after a waiver is 
        granted under paragraph (2), the Administrator shall prepare, 
        publish in the Federal Register, and submit to the Committees 
        on Foreign Affairs, Agriculture, and Appropriations of the 
        House of Representatives, and the Committees on Appropriations, 
        Foreign Relations, and Agriculture, Nutrition, and Forestry of 
        the Senate a report that--
                    ``(A) contains the reasons for granting the waiver 
                and the actual rate of return for the commodity; and
                    ``(B) includes for the commodity the costs of 
                bagging or further processing, ocean transportation, 
                inland transportation in the recipient country, storage 
                costs, and any other information that the Administrator 
                determines to be necessary.''.

SEC. 3008. FLEXIBILITY.

    Section 406 of the Food for Peace Act (7 U.S.C. 1736) is amended--
            (1) by redesignating subsections (c) and (d) as subsections 
        (d) and (e), respectively; and
            (2) by inserting after subsection (b) the following:
    ``(c) Flexibility.--Notwithstanding any other provision of law and 
as necessary to achieve the purposes of this Act, funds available under 
this Act may be used to pay the costs of up to 20 percent of activities 
conducted in recipient countries by nonprofit voluntary organizations, 
cooperatives, or intergovernmental agencies or organizations.''.

SEC. 3009. PROCUREMENT, TRANSPORTATION, TESTING, AND STORAGE OF 
              AGRICULTURAL COMMODITIES FOR PREPOSITIONING IN THE UNITED 
              STATES AND FOREIGN COUNTRIES.

    Section 407 of the Food for Peace Act (7 U.S.C. 1736a) is amended--
            (1) in subparagraph (c)(4)(A)--
                    (A) by striking ``2012'' and inserting ``2017''; 
                and
                    (B) by striking ``for each such fiscal year not 
                more than $10,000,000 of such funds'' and inserting 
                ``for each of fiscal years 2001 through 2012 not more 
                than $10,000,000 of such funds and for each of fiscal 
                years 2013 through 2017 not more than $15,000,000 of 
                such funds''; and
            (2) by adding at the end the following:
    ``(g) Funding for Testing of Food Aid Shipments.--Funds made 
available for agricultural products acquired under this Act and section 
3107 of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 
1736o-1) may be used to pay for the testing of those agricultural 
products.''.

SEC. 3010. DEADLINE FOR AGREEMENTS TO FINANCE SALES OR TO PROVIDE OTHER 
              ASSISTANCE.

    Section 408 of the Food for Peace Act (7 U.S.C. 1736b) is amended 
by striking ``2012'' and inserting ``2017''.

SEC. 3011. MINIMUM LEVEL OF NONEMERGENCY FOOD ASSISTANCE.

    Section 412 of the Food for Peace Act (7 U.S.C. 1736f) is amended 
by striking subsection (e) and inserting the following:
    ``(e) Minimum Level of Nonemergency Food Assistance.--
            ``(1) In general.--Subject to paragraph (2), of the amounts 
        made available to carry out emergency and nonemergency food 
        assistance programs under title II, not less than 20 nor more 
        than 30 percent for each of fiscal years 2013 through 2017 
        shall be expended for nonemergency food assistance programs 
        under title II.
            ``(2) Minimum level.--The amount made available to carry 
        out nonemergency food assistance programs under title II shall 
        not be less than $275,000,000 for any fiscal year.''.

SEC. 3012. COORDINATION OF FOREIGN ASSISTANCE PROGRAMS REPORT.

    Section 413 of the Food for Peace Act (7 U.S.C. 1736(g)) is 
amended--
            (1) by striking ``(a) In General.--To the maximum'' and 
        inserting ``To the maximum''; and
            (2) by striking subsection (b).

SEC. 3013. MICRONUTRIENT FORTIFICATION PROGRAMS.

    (a) Elimination of Obsolete Reference to Study.--Section 
415(a)(2)(B) of the Food for Peace Act (7 U.S.C. 1736g-2(a)(2)(B)) is 
amended by striking ``, using recommendations'' and all that follows 
through ``quality enhancements''.
    (b) Extension.--Section 415(c) of the Food for Peace Act (7 U.S.C. 
1736g-2(c)) is amended by striking ``2012'' and inserting ``2017''.

SEC. 3014. JOHN OGONOWSKI AND DOUG BEREUTER FARMER-TO-FARMER PROGRAM.

    Section 501 of the Food for Peace Act (7 U.S.C. 1737) is amended--
            (1) in subsection (d)--
                    (A) by striking ``0.5 percent'' and inserting ``0.6 
                percent''; and
                    (B) by striking ``2012'' and inserting ``2017''; 
                and
            (2) in subsection (e)(1), by striking ``2012'' and 
        inserting ``2017''.

SEC. 3015. PROHIBITION ON ASSISTANCE FOR NORTH KOREA.

    (a) In General.--No amounts may be obligated or expended to provide 
assistance under title II of the Food for Peace Act (7 U.S.C. 1721 et 
seq.) to the Democratic People's Republic of Korea.
    (b) National Interest Waiver.--The President may waive subsection 
(a) if the President determines and certifies to the Committees on 
Agriculture, Nutrition, and Forestry and Foreign Relations of the 
Senate and the Committees on Agriculture and Foreign Affairs of the 
House of Representatives that the waiver is in the national interest of 
the United States.

               Subtitle B--Agricultural Trade Act of 1978

SEC. 3101. EXPORT CREDIT GUARANTEE PROGRAMS.

    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.--The Commodity Credit 
Corporation shall make available for each of fiscal years 2013 through 
2017 credit guarantees under section 202(a) in an amount equal to not 
more than $4,500,000,000 in credit guarantees.''.

SEC. 3102. FUNDING FOR MARKET ACCESS PROGRAM.

    Section 211(c)(1)(A) of the Agricultural Trade Act of 1978 (7 
U.S.C. 5641(c)(1)(A)) is amended by striking ``2012'' and inserting 
``2017''.

SEC. 3103. FOREIGN MARKET DEVELOPMENT COOPERATOR PROGRAM.

    Section 703(a) of the Agricultural Trade Act of 1978 (7 U.S.C. 
5723(a)) is amended by striking ``2012'' and inserting ``2017''.

               Subtitle C--Other Agricultural Trade Laws

SEC. 3201. FOOD FOR PROGRESS ACT OF 1985.

    (a) Extension.--The Food for Progress Act of 1985 (7 U.S.C. 1736o) 
is amended--
            (1) in subsection (f)(3), by striking ``2012'' and 
        inserting ``2017'';
            (2) in subsection (g), by striking ``2012'' and inserting 
        ``2017'';
            (3) in subsection (k), by striking ``2012'' and inserting 
        ``2017''; and
            (4) in subsection (l)(1), by striking ``2012'' and 
        inserting ``2017''.
    (b) Repeal of Completed Project.--Subsection (f) of the Food for 
Progress Act of 1985 (7 U.S.C. 1736o) is amended by striking paragraph 
(6).
    (c) Flexibility.--The Food for Progress Act of 1985 (7 U.S.C. 
1736o) is amended in subsection (l) by adding at the end the following:
            ``(5) Flexibility.--Notwithstanding any other provision of 
        law and as necessary to achieve the purposes of this Act, funds 
        available under this Act may be used to pay the costs of up to 
        20 percent of activities conducted in recipient countries by 
        nonprofit voluntary organizations, cooperatives, or 
        intergovernmental agencies or organizations.''.
    (d) Limitation on Total Volume of Commodities Monetized.--The Food 
for Progress Act of 1985 (7 U.S.C. 1736o) is amended by adding at the 
end the following:
    ``(p) Limitation on Monetization of Commodities.--
            ``(1) Limitation.--
                    ``(A) In general.--Unless the Secretary grants a 
                waiver under paragraph (2), no eligible commodity may 
                be made available under this section unless the rate of 
                return for the eligible commodity (as determined under 
                subparagraph (B)) is at least 70 percent.
                    ``(B) Rate of return.--For purposes of subparagraph 
                (A), the rate of return shall be equal to the 
                proportion that--
                            ``(i) the proceeds the implementing 
                        partners generate through monetization; bears 
                        to
                            ``(ii) the cost to the Federal Government 
                        to procure and ship the eligible commodities to 
                        a recipient country for monetization.
            ``(2) Waiver authority.--The Secretary may waive the 
        application of the limitation in paragraph (1) with regard to 
        an eligible commodity for a recipient country if the Secretary 
        determines that it is necessary to achieve the purposes of this 
        Act in the recipient country.
            ``(3) Report.--Not later than 90 days after a waiver is 
        granted under paragraph (2), the Secretary shall prepare, 
        publish in the Federal Register, and submit to the Committees 
        on Foreign Affairs, Agriculture, and Appropriations of the 
        House of Representatives, and the Committees on Appropriations, 
        Foreign Relations, and Agriculture, Nutrition, and Forestry of 
        the Senate a report that--
                    ``(A) contains the reasons for granting the waiver 
                and the actual rate of return for the eligible 
                commodity; and
                    ``(B) includes for the commodity the costs of 
                bagging or further processing, ocean transportation, 
                inland transportation in the recipient country, storage 
                costs, and any other information that the Secretary 
                determines to be necessary.''.

SEC. 3202. BILL EMERSON HUMANITARIAN TRUST.

    Section 302 of the Bill Emerson Humanitarian Trust Act (7 U.S.C. 
1736f-1) is amended--
            (1) in subsection (b)(2)(B)(i), by striking ``2012'' both 
        places it appears and inserting ``2017''; and
            (2) in subsection (h), by striking ``2012'' both places it 
        appears and inserting ``2017''.

SEC. 3203. PROMOTION OF AGRICULTURAL EXPORTS TO EMERGING MARKETS.

    (a) Direct Credits or Export Credit Guarantees.--Section 1542(a) of 
the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 
101-624; 7 U.S.C. 5622 note) is amended by striking ``2012'' and 
inserting ``2017''.
    (b) Development of Agricultural Systems.--Section 1542(d)(1)(A)(i) 
of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public 
Law 101-624; 7 U.S.C. 5622 note) is amended by striking ``2012'' and 
inserting ``2017''.

SEC. 3204. MCGOVERN-DOLE INTERNATIONAL FOOD FOR EDUCATION AND CHILD 
              NUTRITION PROGRAM.

    (a) Reauthorization.--Section 3107(l)(2) of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 1736o-1(l)(2)) is amended by 
striking ``2012'' and inserting ``2017''.
    (b) Technical Correction.--Section 3107(d) of the Farm Security and 
Rural Investment Act of 2002 (7 U.S.C. 1736o-1(d)) is amended by 
striking ``to'' in the matter preceding paragraph (1).

SEC. 3205. TECHNICAL ASSISTANCE FOR SPECIALTY CROPS.

    (a) Purpose.--Section 3205(b) of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 5680(b)) is amended by striking 
``related barriers to trade'' and inserting ``technical barriers to 
trade''.
    (b) Funding.--Section 3205(e)(2) of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 5680(e)(2)) is amended--
            (1) by inserting ``and'' at the end of subparagraph (C); 
        and
            (2) by striking subparagraphs (D) and (E) and inserting the 
        following new subparagraph:
                    ``(D) $9,000,000 for each of fiscal years 2011 
                through 2017.''.

SEC. 3206. GLOBAL CROP DIVERSITY TRUST.

    Section 3202(c) of the Food, Conservation, and Energy Act of 2008 
(Public Law 110-246; 22 U.S.C. 2220a note) is amended by striking 
``2008 through 2012'' and inserting ``2013 through 2017''.

SEC. 3207. LOCAL AND REGIONAL FOOD AID PROCUREMENT PROJECTS.

    Section 3206 of the Food, Conservation, and Energy Act of 2008 (7 
U.S.C. 1726c) is amended--
            (1) in subsection (b)--
                    (A) by striking ``(b) Study; Field-based 
                Projects.--'' and all that follows through ``(2) Field-
                based projects.--'' and inserting the following:
    ``(b) Field-based Projects.--'';
                    (B) by redesignating subparagraphs (A) and (B) as 
                paragraphs (1) and (2), respectively, and indenting 
                appropriately;
                    (C) in paragraph (1) (as so redesignated), by 
                striking ``subparagraph (B)'' and inserting ``paragraph 
                (2)''; and
                    (D) in paragraph (2) (as so redesignated), by 
                striking ``subparagraph (A)'' and inserting ``paragraph 
                (1)'';
            (2) in subsection (c)(1), by striking ``subsection (b)(2)'' 
        and inserting ``subsection (b)'';
            (3) by striking subsections (d), (f), and (g);
            (4) by redesignating subsection (e) as subsection (d);
            (5) in subsection (d) (as so redesignated)--
                    (A) in paragraph (2)--
                            (i) by striking subparagraph (B); and
                            (ii) in subparagraph (A)--
                                    (I) by striking ``(A) 
                                Application.--'' and all that follows 
                                through ``To be eligible'' in clause 
                                (i) and inserting the following:
                    ``(A) In general.--To be eligible'';
                                    (II) by redesignating clause (ii) 
                                as subparagraph (B) and indenting 
                                appropriately; and
                                    (III) in subparagraph (B) (as so 
                                redesignated), by striking ``clause 
                                (i)'' and inserting ``subparagraph 
                                (A)''; and
                    (B) by striking paragraph (4); and
            (6) by adding at the end the following:
    ``(e) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $40,000,000 for 
        each of fiscal years 2013 through 2017.
            ``(2) Preference.--In carrying out this section, the 
        Secretary may give a preference to eligible organizations that 
        have, or are working toward, projects under the McGovern-Dole 
        International Food for Education and Child Nutrition Program 
        established under section 3107 of the Farm Security and Rural 
        Investment Act of 2002 (7 U.S.C. 1736o-1).
            ``(3) Reporting.--Each year, the Secretary shall submit to 
        the appropriate committees of Congress a report that describes 
        the use of funds under this section, including--
                    ``(A) the impact of procurements and projects on--
                            ``(i) local and regional agricultural 
                        producers; and
                            ``(ii) markets and consumers, including 
                        low-income consumers; and
                    ``(B) implementation time frames and costs.''.

SEC. 3208. DONALD PAYNE HORN OF AFRICA FOOD RESILIENCE PROGRAM.

    (a) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Agency for International Development.
            (2) Appropriate committees of congress.--The term 
        ``appropriate committees of Congress'' means--
                    (A) the Committee on Agriculture, Nutrition, and 
                Forestry of the Senate;
                    (B) the Committee on Agriculture of the House of 
                Representatives;
                    (C) the Committee on Foreign Relations of the 
                Senate; and
                    (D) the Committee on Foreign Affairs of the House 
                of Representatives.
            (3) Eligible organization.--The term ``eligible 
        organization'' means an organization that is--
                    (A) a private voluntary organization or cooperative 
                that is, to the extent practicable, registered with the 
                Administrator; or
                    (B) an intergovernmental organization, such as the 
                World Food Program.
            (4) Horn of africa.--The term ``Horn of Africa'' means the 
        countries of--
                    (A) Ethiopia;
                    (B) Somalia;
                    (C) Kenya;
                    (D) Djibouti;
                    (E) Eritrea;
                    (F) South Sudan;
                    (G) Uganda; and
                    (H) such other countries as the Administrator 
                determines to be appropriate after providing 
                notification to the appropriate committees of Congress.
            (5) Resilience.--The term ``resilience'' means--
                    (A) the capacity to mitigate the negative impacts 
                of crises (including natural disasters, conflicts, and 
                economic shocks) in order to reduce loss of life and 
                depletion of productive assets;
                    (B) the capacity to respond effectively to crises, 
                ensuring basic needs are met in a way that is 
                integrated with long-term development efforts; and
                    (C) the capacity to recover and rebuild after 
                crises so that future shocks can be absorbed with less 
                need for ongoing external assistance.
    (b) Purpose.--The purpose of this section is to establish a pilot 
program to effectively integrate all United States-funded emergency and 
long-term development activities that aim to improve food security in 
the Horn of Africa, building resilience so as--
            (1) to reduce the impacts of future crises;
            (2) to enhance local capacity for emergency response;
            (3) to enhance sustainability of long-term development 
        programs targeting poor and vulnerable households; and
            (4) to reduce the need for repeated costly emergency 
        operations.
    (c) Study.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, the Administrator shall initiate a study 
        of prior programs to support resilience in the Horn of Africa 
        conducted by--
                    (A) other donor countries;
                    (B) private voluntary organizations;
                    (C) the World Food Program of the United Nations; 
                and
                    (D) multilateral institutions, including the World 
                Bank.
            (2) Requirements.--The study shall--
                    (A) include all programs implemented through the 
                Agency for International Development, the Department of 
                Agriculture, the Department of Treasury, the Millennium 
                Challenge Corporation, the Peace Corps, and other 
                relevant Federal agencies;
                    (B) evaluate how well the programs described in 
                subparagraph (A) work together to complement each other 
                and leverage impacts across programs;
                    (C) include recommendations for how full 
                integration of efforts can be achieved; and
                    (D) evaluate the degree to which country-led 
                development plans support programs that increase 
                resilience, including review of the investments by each 
                country in nutrition and safety nets.
            (3) Report.--Not later than 180 days after the date of 
        enactment of this Act, the Administrator shall submit to the 
        appropriate committees of Congress a report containing the 
        results of the study.
    (d) Field-based Project Grants or Cooperative Agreements.--
            (1) In general.--The Administrator shall--
                    (A) provide grants to, or enter into cooperative 
                agreements with, eligible organizations to carry out 
                field-based projects that build resilience in the Horn 
                of Africa in accordance with this section; and
                    (B) develop a project approval process to ensure 
                full integration of efforts.
            (2) Requirements of eligible organizations.--
                    (A) Application.--To be eligible to receive a grant 
                from, or enter into a cooperative agreement with, the 
                Administrator under this subsection, an eligible 
                organization shall submit to the Administrator an 
                application by such date, in such manner, and 
                containing such information as the Administrator may 
                require.
                    (B) Completion requirement.--To be eligible to 
                receive a grant from, or enter into a cooperative 
                agreement with, the Administrator under this 
                subsection, an eligible organization shall agree--
                            (i) to collect, not later than September 
                        30, 2016, data containing the information 
                        required under subsection (f)(2) relating to 
                        the field-based project funded through the 
                        grant or cooperative agreement; and
                            (ii) to provide to the Administrator the 
                        data collected under clause (i).
            (3) Requirements of administrator.--
                    (A) Project diversity.--
                            (i) In general.--Subject to clause (ii) and 
                        subparagraph (B), in selecting proposals for 
                        field-based projects to fund under this 
                        section, the Administrator shall select a 
                        diversity of projects, including projects 
                        located in--
                                    (I) areas most prone to repeated 
                                crises;
                                    (II) areas with effective existing 
                                resilience programs that can be scaled; 
                                and
                                    (III) areas in all countries of the 
                                Horn of Africa.
                            (ii) Priority.--In selecting proposals for 
                        field-based projects under clause (i), the 
                        Administrator shall ensure that the selected 
                        proposals are for field-based projects that--
                                    (I) effectively integrate emergency 
                                and long-term development programs to 
                                improve sustainability;
                                    (II) demonstrate the potential to 
                                reduce the need for future emergency 
                                assistance; and
                                    (III) build targeted productive 
                                safety nets, in coordination with host 
                                country governments, through food for 
                                work, cash for work, and other proven 
                                program methodologies.
                    (B) Availability.--The Administrator shall not 
                award a grant or cooperative agreement or approve a 
                field-based project under this subsection until the 
                date on which the Administrator promulgates regulations 
                or issues guidelines under subsection (e).
    (e) Regulations; Guidelines.--
            (1) In general.--Not later than 180 days after the date of 
        completion of the study under subsection (c), the Administrator 
        shall promulgate regulations or issue guidelines to carry out 
        field-based projects under this section.
            (2) Requirements.--In promulgating regulations or issuing 
        guidelines under paragraph (1), the Administrator shall--
                    (A) take into consideration the results of the 
                study described in subsection (c); and
                    (B) provide an opportunity for public review and 
                comment.
    (f) Report.--
            (1) In general.--Not later than November 1, 2016, the 
        Administrator shall submit to the appropriate committees of 
        Congress a report that--
                    (A) addresses each factor described in paragraph 
                (2); and
                    (B) is conducted in accordance with this section.
            (2) Required factors.--The report shall include baseline 
        and end-of-project data that measures--
                    (A) the prevalence of moderate and severe hunger so 
                as to provide an accurate accounting of project impact 
                on household access to and consumption of food during 
                every month of the year prior to data collection;
                    (B) household ownership of and access to productive 
                assets, including at a minimum land, livestock, homes, 
                equipment, and other materials assets needed for income 
                generation;
                    (C) household incomes, including informal sources 
                of employment; and
                    (D) the productive assets of women using the 
                Women's Empowerment in Agriculture Index.
            (3) Public access to records and reports.--Not later than 
        90 days after the date on which the report is submitted under 
        paragraph (1), the Administrator shall provide public access to 
        the report.
    (g) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000 for each of fiscal 
years 2013 through 2017.

SEC. 3209. AGRICULTURAL TRADE ENHANCEMENT STUDY.

    (a) Definition of Agriculture Committees and Subcommittees.--In 
this section, the term ``agriculture committees and subcommittees'' 
means--
            (1) the Committee on Agriculture of the House of 
        Representatives;
            (2) the Committee on Agriculture, Nutrition, and Forestry 
        of the Senate; and
            (3) the subcommittees on agriculture, rural development, 
        food and drug administration, and related agencies of the 
        Committees on Appropriations of the House of Representatives 
        and the Senate.
    (b) Development.--The Secretary, in consultation with the 
agriculture committees and subcommittees, shall develop a study that 
takes into consideration a reorganization of international trade 
functions for imports and exports at the Department of Agriculture.
    (c) Implementation.--In implementing the study under this section, 
the Secretary--
            (1) in recognition of the importance of agricultural 
        exports to the farm economy and the economy as a whole, may 
        include a recommendation for the establishment of an Under 
        Secretary for Trade and Foreign Agricultural Affairs;
            (2) may take into consideration how the Under Secretary 
        described in paragraph (1) would serve as a multiagency 
        coordinator of sanitary and phytosanitary issues and nontariff 
        trade barriers in agriculture with respect to imports and 
        exports of agricultural products; and
            (3) shall take into consideration all implications of a 
        reorganization described in subsection (b) on domestic programs 
        and operations of the Department of Agriculture.
    (d) Report.--Not later than 180 days after the date of enactment of 
this Act, the Secretary shall submit to the agriculture committees and 
subcommittees a report describing the results of the study under this 
section.

                          TITLE IV--NUTRITION

         Subtitle A--Supplemental Nutrition Assistance Program

SEC. 4001. FOOD DISTRIBUTION PROGRAM ON INDIAN RESERVATIONS.

    Section 4(b)(6)(F) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2013(b)(6)(F)) is amended by striking ``2012'' and inserting ``2017''.

SEC. 4002. STANDARD UTILITY ALLOWANCES BASED ON THE RECEIPT OF ENERGY 
              ASSISTANCE PAYMENTS.

    (a) Standard Utility Allowances in the Supplemental Nutrition 
Assistance Program.--Section 5(e)(6)(C) of the Food and Nutrition Act 
of 2008 (7 U.S.C. 2014(e)(6)(C)) is amended--
            (1) in clause (i), by inserting ``, subject to clause 
        (iv)'' after ``Secretary''; and
            (2) in clause (iv)(I), by striking ``the household still 
        incurs'' and all that follows through the end of the subclause 
        and inserting ``the payment received by, or made on behalf of, 
        the household exceeds $10 or a higher amount annually, as 
        determined by the Secretary.''.
    (b) Conforming Amendment.--Section 2605(f)(2)(A) of the Low-Income 
Home Energy Assistance Act of 1981 (42 U.S.C. 8624(f)(2)(A)) is amended 
by inserting before the semicolon at the end ``, except that, for 
purposes of the supplemental nutrition assistance program established 
under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.), such 
payments or allowances exceed $10 or a higher amount annually, as 
determined by the Secretary of Agriculture in accordance with section 
5(e)(6)(C)(iv)(I) of that Act (7 U.S.C. 2014(e)(6)(C)(iv)(I))''.
    (c) Effective and Implementation Date.--
            (1) In general.--Except as provided in paragraph (2), this 
        section and the amendments made by this section shall take 
        effect beginning on October 1, 2013, for all certification 
        periods beginning after that date.
            (2) State option to delay implementation for current 
        recipients.--A State may, at the option of the State, implement 
        a policy that eliminates or minimizes the effect of the 
        amendments made by this section for households that receive a 
        standard utility allowance as of the date of enactment of this 
        Act for not more than a 180-day period beginning on the date on 
        which the amendments made by this section would otherwise 
        affect the benefits received by a household.

SEC. 4003. ELIGIBILITY DISQUALIFICATIONS.

    Section 6(e)(3)(B) of Food and Nutrition Act of 2008 (7 U.S.C. 
2015(e)(3)(B)) is amended by striking ``section'' and inserting the 
following: ``section, subject to the condition that the course or 
program of study--
                            ``(i) is part of a program of career and 
                        technical education (as defined in section 3 of 
                        the Carl D. Perkins Career and Technical 
                        Education Act of 2006 (20 U.S.C. 2302)) that 
                        may be completed in not more than 4 years at an 
                        institution of higher education (as defined in 
                        section 102 of the Higher Education Act of 1965 
                        (20 U.S.C. 1002)); or
                            ``(ii) is limited to remedial courses, 
                        basic adult education, literacy, or English as 
                        a second language;''.

SEC. 4004. ENDING SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM BENEFITS 
              FOR LOTTERY OR GAMBLING WINNERS.

    (a) In General.--Section 6 of the Food and Nutrition Act of 2008 (7 
U.S.C. 2015) is amended by adding at the end the following:
    ``(r) Ineligibility for Benefits Due to Receipt of Substantial 
Lottery or Gambling Winnings.--
            ``(1) In general.--Any household in which a member receives 
        substantial lottery or gambling winnings, as determined by the 
        Secretary, shall lose eligibility for benefits immediately upon 
        receipt of the winnings.
            ``(2) Duration of ineligibility.--A household described in 
        paragraph (1) shall remain ineligible for participation until 
        the household meets the allowable financial resources and 
        income eligibility requirements under subsections (c), (d), 
        (e), (f), (g), (i), (k), (l), (m), and (n) of section 5.
            ``(3) Agreements.--As determined by the Secretary, each 
        State agency, to the maximum extent practicable, shall 
        establish agreements with entities responsible for the 
        regulation or sponsorship of gaming in the State to determine 
        whether individuals participating in the supplemental nutrition 
        assistance program have received substantial lottery or 
        gambling winnings.''.
    (b) Conforming Amendments.--Section 5(a) of the Food and Nutrition 
Act of 2008 (7 U.S.C. 2014(a)) is amended in the second sentence by 
striking ``sections 6(b), 6(d)(2), and 6(g)'' and inserting 
``subsections (b), (d)(2), (g), and (r) of section 6''.

SEC. 4005. RETAIL FOOD STORES.

    (a) Definition of Retail Food Store.--Subsection (o)(1)(A) of 
section 3 of the Food and Nutrition Act of 2008 (7 U.S.C. 2012) (as 
redesignated by section 4016(a)(4)) is amended by striking ``at least 
2'' and inserting ``at least 3''.
    (b) Alternative Benefit Delivery.--Section 7(f) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2016(f)) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Imposition of costs.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary shall require 
                participating retail food stores (including restaurants 
                participating in a State option restaurant program 
                intended to serve the elderly, disabled, and homeless) 
                to pay 100 percent of the costs of acquiring, and 
                arrange for the implementation of, electronic benefit 
                transfer point-of-sale equipment and supplies, 
                including related services.
                    ``(B) Exemptions.--The Secretary may exempt from 
                subparagraph (A)--
                            ``(i) farmers' markets, military 
                        commissaries, nonprofit food buying 
                        cooperatives, and establishments, 
                        organizations, programs, or group living 
                        arrangements described in paragraphs (5), (7), 
                        and (8) of section 3(k); and
                            ``(ii) establishments described in 
                        paragraphs (3), (4), and (9) of section 3(k), 
                        other than restaurants participating in a State 
                        option restaurant program.''; and
            (2) by adding at the end the following:
            ``(4) Termination of manual vouchers.--
                    ``(A) In general.--Effective beginning on the date 
                of enactment of this paragraph, except as provided in 
                subparagraph (B), no State shall issue manual vouchers 
                to a household that receives supplemental nutrition 
                assistance under this Act or allow retail food stores 
                to accept manual vouchers as payment, unless the 
                Secretary determines that the manual vouchers are 
                necessary, such as in the event of an electronic 
                benefit transfer system failure or a disaster 
                situation.
                    ``(B) Exemptions.--The Secretary may exempt 
                categories of retail food stores or individual retail 
                food stores from subparagraph (A) based on criteria 
                established by the Secretary.
            ``(5) Unique identification number required.--The Secretary 
        shall require all parties providing electronic benefit transfer 
        services to provide for and maintain unique terminal 
        identification number information through the supplemental 
        nutrition assistance program electronic benefit transfer 
        transaction routing system.''.
    (c) Electronic Benefit Transfers.--Section 7(h)(3)(B) of the Food 
and Nutrition Act of 2008 (7 U.S.C. 2016(h)(3)(B)) is amended by 
striking ``is operational--'' and all that follows through ``(ii) in 
the case of other participating stores,'' and inserting ``is 
operational''.
    (d) Approval of Retail Food Stores and Wholesale Food Concerns.--
Section 9 of the Food and Nutrition Act of 2008 (7 U.S.C. 2018) is 
amended--
            (1) in subsection (a)--
                    (A) in the second sentence of paragraph (a)(1), by 
                striking ``; and (C)'' and inserting ``; (C) whether 
                the applicant is located in an area with significantly 
                limited access to food; and (D)''; and
            (2) by adding at the end the following:
            ``(4) Retail food stores with significant sales of excepted 
        items.--
                    ``(A) In general.--No retail food store for which 
                at least 45 percent of the total sales of the retail 
                food store is from the sale of excepted items described 
                in section 3(k)(1) may be authorized to accept and 
                redeem benefits unless the Secretary determines that 
                the participation of the retail food store is required 
                for the effective and efficient operation of the 
                supplemental nutrition assistance program.
                    ``(B) Application.--Subparagraph (A) shall be 
                effective--
                            ``(i) in the case of retail food stores 
                        applying to be authorized for the first time, 
                        beginning on the date that is 1 year after the 
                        date of enactment of this paragraph; and
                            ``(ii) in the case of retail food stores 
                        participating in the program on the date of 
                        enactment of this paragraph, during periodic 
                        reauthorization in accordance with paragraph 
                        (2)(A).''; and
            (3) by adding at the end the following:
    ``(g) EBT Service Requirement.--An approved retail food store shall 
provide adequate EBT service as described in section 7(h)(3)(B).''.

SEC. 4006. IMPROVING SECURITY OF FOOD ASSISTANCE.

    Section 7(h)(8) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2016(h)(8)) is amended--
            (1) by striking the paragraph heading and inserting 
        ``Replacement of cards.--'';
            (2) by striking ``A State'' and inserting the following:
                    ``(A) Fees.--A State''; and
            (3) by adding after subparagraph (A) (as so designated by 
        paragraph (2)) the following:
                    ``(B) Purposeful loss of cards.--
                            ``(i) In general.--Subject to terms and 
                        conditions established by the Secretary in 
                        accordance with clause (ii), if a household 
                        makes excessive requests for replacement of the 
                        electronic benefit transfer card of the 
                        household, the Secretary may require a State 
                        agency to decline to issue a replacement card 
                        to the household unless the household, upon 
                        request of the State agency, provides an 
                        explanation for the loss of the card.
                            ``(ii) Requirements.--The terms and 
                        conditions established by the Secretary shall 
                        provide that--
                                    ``(I) the household be given the 
                                opportunity to provide the requested 
                                explanation and meet the requirements 
                                under this paragraph promptly;
                                    ``(II) after an excessive number of 
                                lost cards, the head of the household 
                                shall be required to review program 
                                rights and responsibilities with State 
                                agency personnel authorized to make 
                                determinations under section 5(a); and
                                    ``(III) any action taken, including 
                                actions required under section 6(b)(2), 
                                other than the withholding of the 
                                electronic benefit transfer card until 
                                an explanation described in subclause 
                                (I) is provided, shall be consistent 
                                with the due process protections under 
                                section 6(b) or 11(e)(10), as 
                                appropriate.
                    ``(C) Protecting vulnerable persons.--In 
                implementing this paragraph, a State agency shall act 
                to protect homeless persons, persons with disabilities, 
                victims of crimes, and other vulnerable persons who 
                lose electronic benefit transfer cards but are not 
                intentionally committing fraud.
                    ``(D) Effect on eligibility.--While a State may 
                decline to issue an electronic benefits transfer card 
                until a household satisfies the requirements under this 
                paragraph, nothing in this paragraph shall be 
                considered a denial of, or limitation on, the 
                eligibility for benefits under section 5.''.

SEC. 4007. TECHNOLOGY MODERNIZATION FOR RETAIL FOOD STORES.

    (a) Mobile Technologies.--Section 7(h) of the Food and Nutrition 
Act of 2008 (7 U.S.C. 2016(h)) (as amended by section 4016(e)) is 
amended by adding at the end the following:
            ``(14) Mobile technologies.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary shall approve retail food stores to redeem 
                benefits through electronic means other than wired 
                point of sale devices for electronic benefit transfer 
                transactions, if the retail food stores--
                            ``(i) establish recipient protections 
                        regarding privacy, ease of use, access, and 
                        support similar to the protections provided for 
                        transactions made in retail food stores;
                            ``(ii) bear the costs of obtaining, 
                        installing, and maintaining mobile 
                        technologies, including mechanisms needed to 
                        process EBT cards and transaction fees;
                            ``(iii) demonstrate the foods purchased 
                        with benefits issued under this section through 
                        mobile technologies are purchased at a price 
                        not higher than the price of the same food 
                        purchased by other methods used by the retail 
                        food store, as determined by the Secretary;
                            ``(iv) provide adequate documentation for 
                        each authorized transaction, as determined by 
                        the Secretary; and
                            ``(v) meet other criteria as established by 
                        the Secretary.
                    ``(B) Demonstration project on acceptance of 
                benefits of mobile transactions.--
                            ``(i) In general.--Before authorizing 
                        implementation of subparagraph (A) in all 
                        States, the Secretary shall pilot the use of 
                        mobile technologies determined by the Secretary 
                        to be appropriate to test the feasibility and 
                        implications for program integrity, by allowing 
                        retail food stores to accept benefits from 
                        recipients of supplemental nutrition assistance 
                        through mobile transactions.
                            ``(ii) Demonstration projects.--To be 
                        eligible to participate in a demonstration 
                        project under clause (i), a retail food store 
                        shall submit to the Secretary for approval a 
                        plan that includes--
                                    ``(I) a description of the 
                                technology;
                                    ``(II) the manner by which the 
                                retail food store will provide proof of 
                                the transaction to households;
                                    ``(III) the provision of data to 
                                the Secretary, consistent with 
                                requirements established by the 
                                Secretary, in a manner that allows the 
                                Secretary to evaluate the impact of the 
                                demonstration on participant access, 
                                ease of use, and program integrity; and
                                    ``(IV) such other criteria as the 
                                Secretary may require.
                            ``(iii) Date of completion.--The 
                        demonstration projects under this subparagraph 
                        shall be completed and final reports submitted 
                        to the Secretary by not later than July 1, 
                        2015.
                    ``(C) Report to congress.--The Secretary shall--
                            ``(i) by not later than January 1, 2016, 
                        authorize implementation of subparagraph (A) in 
                        all States, unless the Secretary makes a 
                        finding, based on the data provided under 
                        subparagraph (B), that implementation in all 
                        States is not in the best interest of the 
                        supplemental nutrition assistance program; and
                            ``(ii) if the determination made in clause 
                        (i) is not to implement subparagraph (A) in all 
                        States, submit a report to the Committee on 
                        Agriculture of the House of Representatives and 
                        the Committee on Agriculture, Nutrition, and 
                        Forestry of the Senate that includes the basis 
                        of the finding.''.
    (b) Acceptance of Benefits Through On-line Transactions.--
            (1) In general.--Section 7 of the Food and Nutrition Act of 
        2008 (7 U.S.C. 2016) is amended by adding at the end the 
        following:
    ``(k) Option To Accept Program Benefits Through On-line 
Transactions.--
            ``(1) In general.--Subject to paragraph (4), the Secretary 
        shall approve retail food stores to accept benefits from 
        recipients of supplemental nutrition assistance through on-line 
        transactions.
            ``(2) Requirements to accept benefits.--A retail food store 
        seeking to accept benefits from recipients of supplemental 
        nutrition assistance through on-line transactions shall--
                    ``(A) establish recipient protections regarding 
                privacy, ease of use, access, and support similar to 
                the protections provided for transactions made in 
                retail food stores;
                    ``(B) ensure benefits are not used to pay delivery, 
                ordering, convenience, or other fees or charges;
                    ``(C) clearly notify participating households at 
                the time a food order is placed--
                            ``(i) of any delivery, ordering, 
                        convenience, or other fee or charge associated 
                        with the food purchase; and
                            ``(ii) that any such fee cannot be paid 
                        with benefits provided under this Act;
                    ``(D) ensure the security of on-line transactions 
                by using the most effective technology available that 
                the Secretary considers appropriate and cost-effective 
                and that is comparable to the security of transactions 
                at retail food stores; and
                    ``(E) meet other criteria as established by the 
                Secretary.
            ``(3) State agency action.--Each State agency shall ensure 
        that recipients of supplemental nutrition assistance can use 
        benefits on-line as described in this subsection as 
        appropriate.
            ``(4) Demonstration project on acceptance of benefits 
        through on-line transactions.--
                    ``(A) In general.--Before the Secretary authorizes 
                implementation of paragraph (1) in all States, the 
                Secretary shall carry out a number of demonstration 
                projects as determined by the Secretary to test the 
                feasibility of allowing retail food stores to accept 
                benefits through on-line transactions.
                    ``(B) Demonstration projects.--To be eligible to 
                participate in a demonstration project under 
                subparagraph (A), a retail food store shall submit to 
                the Secretary for approval a plan that includes--
                            ``(i) a method of ensuring that benefits 
                        may be used to purchase only eligible items 
                        under this Act;
                            ``(ii) a description of the method of 
                        educating participant households about the 
                        availability and operation of on-line 
                        purchasing;
                            ``(iii) adequate testing of the on-line 
                        purchasing option prior to implementation;
                            ``(iv) the provision of data as requested 
                        by the Secretary for purposes of analyzing the 
                        impact of the project on participant access, 
                        ease of use, and program integrity;
                            ``(v) reports on progress, challenges, and 
                        results, as determined by the Secretary; and
                            ``(vi) such other criteria, including 
                        security criteria, as established by the 
                        Secretary.
                    ``(C) Date of completion.--The demonstration 
                projects under this paragraph shall be completed and 
                final reports submitted to the Secretary by not later 
                than July 1, 2015.
            ``(5) Report to congress.--The Secretary shall--
                    ``(A) by not later than January 1, 2016, authorize 
                implementation of paragraph (1) in all States, unless 
                the Secretary makes a finding, based on the data 
                provided under paragraph (4), that implementation in 
                all States is not in the best interest of the 
                supplemental nutrition assistance program; and
                    ``(B) if the determination made in subparagraph (A) 
                is not to implement in all States, submit a report to 
                the Committee on Agriculture of the House of 
                Representatives and the Committee on Agriculture, 
                Nutrition, and Forestry of the Senate that includes the 
                basis of the finding.''.
            (2) Conforming amendments.--
                    (A) Section 7(b) of the Food and Nutrition Act of 
                2008 (7 U.S.C. 2016(b)) is amended by striking 
                ``purchase food in retail food stores'' and inserting 
                ``purchase food from retail food stores''.
                    (B) Section 10 of the Food and Nutrition Act of 
                2008 (7 U.S.C. 2019) is amended in the first sentence 
                by inserting ``retail food stores authorized to accept 
                and redeem benefits through on-line transactions shall 
                be authorized to accept benefits prior to the delivery 
                of food if the delivery occurs within a reasonable time 
                of the purchase, as determined by the Secretary,'' 
                after ``food so purchased,''.
    (c) Savings Clause.--Nothing in this section or an amendment made 
by this section alter any requirements of the Food and Nutrition Act of 
2008 (7 U.S.C. 2011 et seq.) unless specifically authorized in this 
section or an amendment made by this section.

SEC. 4008. USE OF BENEFITS FOR PURCHASE OF COMMUNITY-SUPPORTED 
              AGRICULTURE SHARE.

    Section 10 of the Food and Nutrition Act of 2008 (7 U.S.C. 2019) 
(as amended by section 4007(b)(2)(B)) is amended in the first sentence 
by inserting ``agricultural producers who market agricultural products 
directly to consumers shall be authorized to redeem benefits for the 
initial cost of the purchase of a community-supported agriculture share 
for an appropriate time in advance of food delivery as determined by 
the Secretary,'' after ``as determined by the Secretary,''.

SEC. 4009. RESTAURANT MEALS PROGRAM.

    (a) In General.--Section 11(e) of the Food and Nutrition Act of 
2008 (7 U.S.C. 2020(e)) is amended--
            (1) in paragraph (22), by striking ``and'' at the end;
            (2) in paragraph (23), by striking the period at the end of 
        subparagraph (C) and inserting ``; and''; and
            (3) by adding at the end the following:
            ``(24) if the State elects to carry out a program to 
        contract with private establishments to offer meals at 
        concessional prices, as described in paragraphs 3, 4, and 9 of 
        section 3(k)--
                    ``(A) the plans of the State agency for operating 
                the program, including--
                            ``(i) documentation of a need that eligible 
                        homeless, elderly, and disabled clients are 
                        underserved in a particular geographic area;
                            ``(ii) the manner by which the State agency 
                        will limit participation to only those private 
                        establishments that the State determines 
                        necessary to meet the need identified in clause 
                        (i); and
                            ``(iii) any other conditions the Secretary 
                        may prescribe, such as the level of security 
                        necessary to ensure that only eligible 
                        recipients participate in the program; and
                    ``(B) a report by the State agency to the Secretary 
                annually, the schedule of which shall be established by 
                the Secretary, that includes--
                            ``(i) the number of households and 
                        individual recipients authorized to participate 
                        in the program, including any information on 
                        whether the individual recipient is elderly, 
                        disabled, or homeless; and
                            ``(ii) an assessment of whether the program 
                        is meeting an established need, as documented 
                        under subparagraph (A)(i).''.
    (b) Approval of Retail Food Stores and Wholesale Food Concerns.--
Section 9 of the Food and Nutrition Act of 2008 (7 U.S.C. 2018) (as 
amended by section 4005(d)(3)) is amended by adding at the end the 
following:
    ``(h) Private Establishments.--
            ``(1) In general.--Subject to paragraph (2), no private 
        establishment that contracts with a State agency to offer meals 
        at concessional prices as described in paragraphs 3, 4, and 9 
        of section 3(k) may be authorized to accept and redeem benefits 
        unless the Secretary determines that the participation of the 
        private establishment is required to meet a documented need in 
        accordance with section 11(e)(24).
            ``(2) Existing contracts.--
                    ``(A) In general.--If, on the day before the date 
                of enactment of this subsection, a State has entered 
                into a contract with a private establishment described 
                in paragraph (1) and the Secretary has not determined 
                that the participation of the private establishment is 
                necessary to meet a documented need in accordance with 
                section 11(e)(24), the Secretary shall allow the 
                operation of the private establishment to continue 
                without that determination of need for a period not to 
                exceed 180 days from the date on which the Secretary 
                establishes determination criteria, by regulation, 
                under section 11(e)(24).
                    ``(B) Justification.--If the Secretary makes a 
                determination to terminate a contract with a private 
                establishment that is in effect on the date of 
                enactment of this subsection, the Secretary shall 
                provide justification to the State in which the private 
                establishment is located for that termination.
            ``(3) Report to congress.--Not later than 90 days after 
        September 30, 2013, and 90 days after the last day of each 
        fiscal year thereafter, the Secretary shall report to the 
        Committee on Agriculture of the House of Representatives and 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate on the effectiveness of a program under this subsection 
        using any information received from States under section 
        11(e)(24) as well as any other information the Secretary may 
        have relating to the manner in which benefits are used.''.
    (c) Conforming Amendments.--Section 3(k) of the Food and Nutrition 
Act of 2008 (7 U.S.C. 2012(k)) is amended by inserting ``subject to 
section 9(h)'' after ``concessional prices'' each place it appears.

SEC. 4010. QUALITY CONTROL ERROR RATE DETERMINATION.

    Section 16(c) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2025(c)) is amended by adding at the end the following:
            ``(10) Tolerance level.--For the purposes of this 
        subsection, the Secretary shall set the tolerance level for 
        excluding small errors at $25.''.

SEC. 4011. PERFORMANCE BONUS PAYMENTS.

    Section 16(d) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2025(d)) is amended by adding at the end the following:
            ``(5) Use of performance bonus payments.--A State agency 
        may use a performance bonus payment received under this 
        subsection only to carry out the program established under this 
        Act, including investments in--
                    ``(A) technology;
                    ``(B) improvements in administration and 
                distribution; and
                    ``(C) actions to prevent fraud, waste, and 
                abuse.''.

SEC. 4012. AUTHORIZATION OF APPROPRIATIONS.

    Section 18(a)(1) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2027(a)(1)) is amended in the first sentence by striking ``2012'' and 
inserting ``2017''.

SEC. 4013. ASSISTANCE FOR COMMUNITY FOOD PROJECTS.

    Section 25 of the Food and Nutrition Act of 2008 (7 U.S.C. 2034) is 
amended--
            (1) in subsection (a)(1)(B)(ii)--
                    (A) by striking subclause (I); and
                    (B) by redesignating subclauses (II) and (III) as 
                subclauses (I) and (II), respectively; and
            (2) in subsection (b), by adding at the end the following:
            ``(3) Funding.--
                    ``(A) In general.--Out of any funds in the Treasury 
                not otherwise appropriated, the Secretary of the 
                Treasury shall transfer to the Secretary to carry out 
                this section not less than $5,000,000 for fiscal year 
                2013 and each fiscal year thereafter.
                    ``(B) Receipt and acceptance.--The Secretary shall 
                be entitled to receive, shall accept, and shall use to 
                carry out this section the funds transferred under 
                subparagraph (A), without further appropriation.
                    ``(C) Maintenance of funding.--The funding provided 
                under subparagraph (A) shall supplement (and not 
                supplant) other Federal funding made available to the 
                Secretary to carry out this section.''.

SEC. 4014. EMERGENCY FOOD ASSISTANCE.

    (a) Purchase of Commodities.--Section 27(a) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2036(a)) is amended--
            (1) in paragraph (1), by striking ``2008 through 2012'' and 
        inserting ``2012 through 2017'';
            (2) by striking paragraph (2) and inserting the following:
            ``(2) Amounts.--The Secretary shall use to carry out 
        paragraph (1)--
                    ``(A) for fiscal year 2012, $260,250,000; and
                    ``(B) for each subsequent fiscal year, the dollar 
                amount of commodities specified in subparagraph (A) 
                adjusted by the percentage by which the thrifty food 
                plan has been adjusted under section 3(u)(4) between 
                June 30, 2012, and June 30 of the immediately preceding 
                fiscal year, and subsequently increased by--
                            ``(i) for fiscal year 2013, $28,000,000;
                            ``(ii) for fiscal year 2014, $44,000,000;
                            ``(iii) for fiscal year 2015, $24,000,000;
                            ``(iv) for fiscal year 2016, $18,000,000; 
                        and
                            ``(v) for fiscal year 2017 and each fiscal 
                        year thereafter, $10,000,000.''; and
            (3) by adding at the end the following:
            ``(3) Funds availability.--For purposes of the funds 
        described in this subsection, the Secretary shall--
                    ``(A) make the funds available for 2 fiscal years; 
                and
                    ``(B) allow States to carry over unexpended 
                balances to the next fiscal year pursuant to such terms 
                and conditions as are determined by the Secretary.''.
    (b) Emergency Food Program Infrastructure Grants.--Section 209(d) 
of the Emergency Food Assistance Act of 1983 (7 U.S.C. 7511a(d)) is 
amended by striking ``2012'' and inserting ``2017''.

SEC. 4015. NUTRITION EDUCATION.

    Section 28(b) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2036a(b)) is amended by inserting ``and physical activity'' after 
``healthy food choices''.

SEC. 4016. RETAIL FOOD STORE AND RECIPIENT TRAFFICKING.

    The Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.) is 
amended by adding at the end the following:

``SEC. 29. RETAIL FOOD STORE AND RECIPIENT TRAFFICKING.

    ``(a) Purpose.--The purpose of this section is to provide the 
Department of Agriculture with additional resources to prevent 
trafficking in violation of this Act by strengthening recipient and 
retail food store program integrity.
    ``(b) Use of Funds.--Additional funds are provided under this 
section to supplement the retail food store and recipient integrity 
activities of the Department.
    ``(c) Funding.--
            ``(1) In general.--Out of any funds in the Treasury not 
        otherwise appropriated, the Secretary of the Treasury shall 
        transfer to the Secretary to carry out this section not less 
        than $18,500,000 for fiscal year 2013 and each fiscal year 
        thereafter.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
            ``(3) Maintenance of funding.--The funding provided under 
        paragraph (1) shall supplement (and not supplant) other Federal 
        funding for programs carried out under this Act.''.

SEC. 4017. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Section 3 of the Food and Nutrition Act of 2008 (7 U.S.C. 2012) 
is amended--
            (1) in subsection (g), by striking ``coupon,'' and 
        inserting ``coupon'';
            (2) in subsection (k)(7), by striking ``or are'' and 
        inserting ``and'';
            (3) by striking subsection (l);
            (4) by redesignating subsections (m) through (t) as 
        subsections (l) through (s), respectively; and
            (5) by inserting after subsection (s) (as so redesignated) 
        the following:
    ``(t) `Supplemental nutrition assistance program' means the program 
operated pursuant to this Act.''.
    (b) Section 4(a) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2013(a)) is amended in the last sentence by striking ``benefits'' and 
inserting ``Benefits''.
    (c) Section 5 of the Food and Nutrition Act of 2008 (7 U.S.C. 2014) 
is amended--
            (1) in the last sentence of subsection (i)(2)(D), by 
        striking ``section 13(b)(2)'' and inserting ``section 13(b)''; 
        and
            (2) in subsection (k)(4)(A), by striking ``paragraph 
        (2)(H)'' and inserting ``paragraph (2)(G)''.
    (d) Section 6(d)(4) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2015(d)(4)) is amended in subparagraphs (B)(vii) and (F)(iii) by 
indenting both clauses appropriately.
    (e) Section 7(h) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2016(h)) is amended by redesignating the second paragraph (12) 
(relating to interchange fees) as paragraph (13).
    (f) Section 9(a) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2018(a)) is amended by indenting paragraph (3) appropriately.
    (g) Section 12 of the Food and Nutrition Act of 2008 (7 U.S.C. 
2021) is amended--
            (1) in subsection (b)(3)(C), by striking ``civil money 
        penalties'' and inserting ``civil penalties''; and
            (2) in subsection (g)(1), by striking ``(7 U.S.C. 1786)'' 
        and inserting ``(42 U.S.C. 1786)''.
    (h) Section 15(b)(1) of the Food and Nutrition Act of 2008 (7 
U.S.C. 2024(b)(1)) is amended in the first sentence by striking ``an 
benefit'' and inserting ``a benefit''.
    (i) Section 16(a) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2025(a)) is amended in the proviso following paragraph (8) by striking 
``as amended.''.
    (j) Section 18(e) of the Food and Nutrition Act of 2008 (7 U.S.C. 
2027(e)) is amended in the first sentence by striking ``sections 7(f)'' 
and inserting ``section 7(f)''.
    (k) Section 22(b)(10)(B)(i) of the Food and Nutrition Act of 2008 
(7 U.S.C. 2031(b)(10)(B)(i)) is amended in the last sentence by 
striking ``Food benefits'' and inserting ``Benefits''.
    (l) Section 26(f)(3)(C) of the Food and Nutrition Act of 2008 (7 
U.S.C. 2035(f)(3)(C)) is amended by striking ``subsection'' and 
inserting ``subsections''.
    (m) Section 27(a)(1) of the Food and Nutrition Act of 2008 (7 
U.S.C. 2036(a)(1)) is amended by striking ``(Public Law 98-8; 7 U.S.C. 
612c note)'' and inserting ``(7 U.S.C. 7515)''.
    (n) Section 509 of the Older Americans Act of 1965 (42 U.S.C. 
3056g) is amended in the section heading by striking ``food stamp 
programs'' and inserting ``supplemental nutrition assistance 
programs''.
    (o) Section 4115(c)(2)(H) of the Food, Conservation, and Energy Act 
of 2008 (Public Law 110-246; 122 Stat. 1871) is amended by striking 
``531'' and inserting ``454''.

              Subtitle B--Commodity Distribution Programs

SEC. 4101. COMMODITY DISTRIBUTION PROGRAM.

    Section 4(a) of the Agriculture and Consumer Protection Act of 1973 
(7 U.S.C. 612c note; Public Law 93-86) is amended in the first sentence 
by striking ``2012'' and inserting ``2017''.

SEC. 4102. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

    Section 5 of the Agriculture and Consumer Protection Act of 1973 (7 
U.S.C. 612c note; Public Law 93-86) is amended--
            (1) in paragraphs (1) and (2)(B) of subsection (a), by 
        striking ``2012'' each place it appears and inserting ``2017'';
            (2) in the first sentence of subsection (d)(2), by striking 
        ``2012'' and inserting ``2017'';
            (3) by striking subsection (g) and inserting the following:
    ``(g) Eligibility.--Except as provided in subsection (m), the 
States shall only provide assistance under the commodity supplemental 
food program to low-income persons aged 60 and older.''; and
            (4) by adding at the end the following:
    ``(m) Phase-out.--Notwithstanding any other provision of law, an 
individual who receives assistance under the commodity supplemental 
food program on the day before the date of enactment of this subsection 
shall continue to receive that assistance until the date on which the 
individual is no longer eligible for assistance under the eligibility 
requirements for the program in effect on the day before the date of 
enactment of this subsection.''.

SEC. 4103. DISTRIBUTION OF SURPLUS COMMODITIES TO SPECIAL NUTRITION 
              PROJECTS.

    Section 1114(a)(2)(A) of the Agriculture and Food Act of 1981 (7 
U.S.C. 1431e(2)(A)) is amended in the first sentence by striking 
``2012'' and inserting ``2017''.

SEC. 4104. TECHNICAL AND CONFORMING AMENDMENTS.

    Section 3 of the Commodity Distribution Reform Act and WIC 
Amendments of 1987 (7 U.S.C. 612c note; Public Law 100-237) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (2), by striking subparagraph (B) 
                and inserting the following:
                    ``(B) the program established under section 4(b) of 
                the Food and Nutrition Act of 2008 (7 U.S.C. 
                2013(b));''; and
                    (B) in paragraph (3)(D), by striking ``the 
                Committee on Education and Labor'' and inserting ``the 
                Committee on Education and the Workforce'';
            (2) in subsection (b)(1)(A)(ii), by striking ``section 32 
        of the Agricultural Adjustment Act (7 U.S.C. 601 et seq.)'' and 
        inserting ``section 32 of the Act of August 24, 1935 (7 U.S.C. 
        612c)'';
            (3) in subsection (e)(1)(D)(iii), by striking subclause 
        (II) and inserting the following:
                                    ``(II) the program established 
                                under section 4(b) of the Food and 
                                Nutrition Act of 2008 (7 U.S.C. 
                                2013(b));''; and
            (4) in subsection (k), by striking ``the Committee on 
        Education and Labor'' and inserting ``the Committee on 
        Education and the Workforce''.

                       Subtitle C--Miscellaneous

SEC. 4201. PURCHASE OF FRESH FRUITS AND VEGETABLES FOR DISTRIBUTION TO 
              SCHOOLS AND SERVICE INSTITUTIONS.

    Section 10603(b) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 612c-4(b)) is amended by striking ``2012'' and inserting 
``2017''.

SEC. 4202. SENIORS FARMERS' MARKET NUTRITION PROGRAM.

    Section 4402(a) of the Farm Security and Rural Investment Act of 
2002 (7 U.S.C. 3007(a)) is amended by striking ``2012'' and inserting 
``2017''.

SEC. 4203. NUTRITION INFORMATION AND AWARENESS PILOT PROGRAM.

    Section 4403 of the Farm Security and Rural Investment Act of 2002 
(7 U.S.C. 3171 note; Public Law 107-171) is repealed.

SEC. 4204. WHOLE GRAIN PRODUCTS.

    Section 4305 of the Food, Conservation, and Energy Act of 2008 (42 
U.S.C. 1755a) is amended--
            (1) in subsection (a), by striking ``2005'' and inserting 
        ``2010'';
            (2) in subsection (d), by striking ``2011'' and inserting 
        ``2015'';
            (3) in subsection (e), by striking ``Labor of the House of 
        Representative'' and inserting ``the Workforce of the House of 
        Representatives''; and
            (4) by adding at the end the following:
    ``(f) Funding.--
            ``(1) In general.--On October 1, 2013, out of any funds in 
        the Treasury not otherwise appropriated, the Secretary of the 
        Treasury shall transfer to the Secretary to carry out this 
        section $10,000,000 for the period of fiscal years 2014 through 
        2015.
            ``(2) Receipt and acceptance.--The Secretary shall be 
        entitled to receive, shall accept, and shall use to carry out 
        this section the funds transferred under paragraph (1), without 
        further appropriation.
            ``(3) Maintenance of funding.--The funding provided under 
        paragraph (1) shall supplement (and not supplant) other Federal 
        funding (including funds made available under section 32 of the 
        Act of August 24, 1935 (7 U.S.C. 612c)) for programs carried 
        out under--
                    ``(A) the Richard B. Russell National School Lunch 
                Act (42 U.S.C. 1751 et seq.), except for section 19 of 
                that Act (42 U.S.C. 1769a);
                    ``(B) the Emergency Food Assistance Act of 1983 (7 
                U.S.C. 7501 et seq.); and
                    ``(C) section 27 of the Food and Nutrition Act of 
                2008 (7 U.S.C. 2036).''.

SEC. 4205. HUNGER-FREE COMMUNITIES.

    Section 4405 of the Food, Conservation, and Energy Act of 2008 (7 
U.S.C. 7517) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (1) and inserting the 
                following:
            ``(1) Eligible entity.--
                    ``(A) Collaborative grants.--In subsection (b), the 
                term `eligible entity' means a public food program 
                service provider or nonprofit organization, including 
                an emergency feeding organization, that has 
                collaborated or will collaborate with 1 or more local 
                partner organizations to achieve at least 1 hunger-free 
                communities goal.
                    ``(B) Incentive grants.--In subsection (c), the 
                term `eligible entity' means a nonprofit organization 
                (including an emergency feeding organization), an 
                agricultural cooperative, producer network or 
                association, community health organization, public 
                benefit corporation, economic development corporation, 
                farmers' market, community-supported agriculture 
                program, buying club, supplemental nutrition assistance 
                program retail food store, a State, local, or tribal 
                agency, and any other entity the Secretary 
                designates.'';
                    (B) by adding at the end the following:
            ``(4) Supplemental nutrition assistance program.--The term 
        `supplemental nutrition assistance program' means the 
        supplemental nutrition assistance program established under the 
        Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.).
            ``(5) Underserved community.--The term `underserved 
        community' has the meaning given the term in section 25 of the 
        Food and Nutrition Act of 2008 (7 U.S.C. 2034).'';
            (2) in subsection (b)(1)(A), by striking ``not more than 50 
        percent of any funds made available under subsection (e)'' and 
        inserting ``funds made available under subsection (d)(1)''; and
            (3) by striking subsections (c), (d), and (e) and inserting 
        the following:
    ``(c) Hunger-free Communities Incentive Grants.--
            ``(1) Authorization.--
                    ``(A) In general.--In each of the years specified 
                in subsection (d), the Secretary shall make grants to 
                eligible entities in accordance with paragraph (2).
                    ``(B) Federal share.--The Federal share of the cost 
                of carrying out an activity under this subsection shall 
                not exceed 50 percent of the total cost of the 
                activity.
                    ``(C) Non-federal share.--
                            ``(i) In general.--The non-Federal share of 
                        the cost of an activity under this subsection 
                        may be provided--
                                    ``(I) in cash or in-kind 
                                contributions as determined by the 
                                Secretary, including facilities, 
                                equipment, or services; and
                                    ``(II) by a State or local 
                                government or a private source.
                            ``(ii) Limitation.--In the case of a for-
                        profit entity, the non-Federal share described 
                        in clause (i) shall not include services of an 
                        employee, including salaries paid or expenses 
                        covered by the employer.
            ``(2) Criteria.--
                    ``(A) In general.--For purposes of this subsection, 
                an eligible entity is a governmental agency or 
                nonprofit organization that--
                            ``(i) meets the application criteria set 
                        forth by the Secretary; and
                            ``(ii) proposes a project that, at a 
                        minimum--
                                    ``(I) has the support of the State 
                                agency;
                                    ``(II) would increase the purchase 
                                of fruits and vegetables by low-income 
                                consumers participating in the 
                                supplemental nutrition assistance 
                                program by providing incentives at the 
                                point of purchase;
                                    ``(III) agrees to participate in 
                                the evaluation described in paragraph 
                                (4);
                                    ``(IV) ensures that the same terms 
                                and conditions apply to purchases made 
                                by individuals with benefits issued 
                                under this Act and incentives provided 
                                for in this subsection as apply to 
                                purchases made by individuals who are 
                                not members of households receiving 
                                benefits, such as provided for in 
                                section 278.2(b) of title 7, Code of 
                                Federal Regulations (or a successor 
                                regulation); and
                                    ``(V) includes effective and 
                                efficient technologies for benefit 
                                redemption systems that may be 
                                replicated in other for States and 
                                communities.
                    ``(B) Priority.--In awarding grants under this 
                section, the Secretary shall give priority to projects 
                that--
                            ``(i) maximize the share of funds used for 
                        direct incentives to participants;
                            ``(ii) use direct-to-consumer sales 
                        marketing;
                            ``(iii) demonstrate a track record of 
                        designing and implementing successful nutrition 
                        incentive programs that connect low-income 
                        consumers and agricultural producers;
                            ``(iv) provide locally or regionally 
                        produced fruits and vegetables;
                            ``(v) are located in underserved 
                        communities; or
                            ``(vi) address other criteria as 
                        established by the Secretary.
            ``(3) Applicability.--
                    ``(A) In general.--The value of any benefit 
                provided to a participant in any activity funded under 
                this subsection shall not be considered income or 
                resources for any purpose under any Federal, State, or 
                local law.
                    ``(B) Prohibition on collection of sales taxes.--
                Each State shall ensure that no State or local tax is 
                collected on a purchase of food under this subsection.
                    ``(C) No limitation on benefits.--A grant made 
                available under this subsection shall not be used to 
                carry out any project that limits the use of benefits 
                under the Food and Nutrition Act of 2008 (7 U.S.C. 2011 
                et seq.) or any other Federal nutrition law.
                    ``(D) Household allotment.--Assistance provided 
                under this subsection to households receiving benefits 
                under the supplemental nutrition assistance program 
                shall not--
                            ``(i) be considered part of the 
                        supplemental nutrition assistance program 
                        benefits of the household; or
                            ``(ii) be used in the collection or 
                        disposition of claims under section 13 of the 
                        Food and Nutrition Act of 2008 (7 U.S.C. 2022).
            ``(4) Evaluation.--
                    ``(A) Independent evaluation.--The Secretary shall 
                provide for an independent evaluation of projects 
                selected under this subsection that measures the impact 
                of each project on--
                            ``(i) improving the nutrition and health 
                        status of participating households receiving 
                        incentives under this subsection; and
                            ``(ii) increasing fruit and vegetable 
                        purchases in participating households.
                    ``(B) Requirement.--The independent evaluation 
                under subparagraph (A) shall use rigorous methodologies 
                capable of producing scientifically valid information 
                regarding the effectiveness of a project.
                    ``(C) Costs.--The Secretary may use funds not to 
                exceed 10 percent of the funding provided to carry out 
                this section to pay costs associated with 
                administering, monitoring, and evaluating each project.
    ``(d) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out subsection (b) $5,000,000 for 
        each of fiscal years 2013 through 2017.
            ``(2) Mandatory funding.--Of the funds of the Commodity 
        Credit Corporation, the Secretary shall use to carry out 
        subsection (c)--
                    ``(A) $15,000,000 for fiscal year 2013;
                    ``(B) $20,000,000 for each of fiscal years 2014 
                through 2016; and
                    ``(C) $25,000,000 for fiscal year 2017.''.

SEC. 4206. HEALTHY FOOD FINANCING INITIATIVE.

    (a) In General.--Subtitle D of title II of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 6951 et seq.) is 
amended by adding at the end the following:

``SEC. 242. HEALTHY FOOD FINANCING INITIATIVE.

    ``(a) Purpose.--The purpose of this section is to enhance the 
authorities of the Secretary to support efforts to provide access to 
healthy food by establishing an initiative to improve access to healthy 
foods in underserved areas, to create and preserve quality jobs, and to 
revitalize low-income communities by providing loans and grants to 
eligible fresh, healthy food retailers to overcome the higher costs and 
initial barriers to entry in underserved areas.
    ``(b) Definitions.--In this section:
            ``(1) Community development financial institution.--The 
        term `community development financial institution' has the 
        meaning given the term in section 103 of the Community 
        Development Banking and Financial Institutions Act of 1994 (12 
        U.S.C. 4702).
            ``(2) Initiative.--The term `Initiative' means the Healthy 
        Food Financing Initiative established under subsection (c)(1).
            ``(3) National fund manager.--The term `national fund 
        manager' means a community development financial institution 
        that is--
                    ``(A) in existence on the date of enactment of this 
                section; and
                    ``(B) certified by the Community Development 
                Financial Institution Fund of the Department of 
                Treasury to manage the Initiative for purposes of--
                            ``(i) raising private capital;
                            ``(ii) providing financial and technical 
                        assistance to partnerships; and
                            ``(iii) funding eligible projects to 
                        attract fresh, healthy food retailers to 
                        underserved areas, in accordance with this 
                        section.
            ``(4) Partnership.--The term `partnership' means a 
        regional, State, or local public-private partnership that--
                    ``(A) is organized to improve access to fresh, 
                healthy foods;
                    ``(B) provides financial and technical assistance 
                to eligible projects; and
                    ``(C) meets such other criteria as the Secretary 
                may establish.
            ``(5) Perishable food.--The term `perishable food' means a 
        staple food that is fresh, refrigerated, or frozen.
            ``(6) Quality job.--The term `quality job' means a job that 
        provides wages and other benefits comparable to, or better 
        than, similar positions in existing businesses of similar size 
        in similar local economies.
            ``(7) Staple food.--
                    ``(A) In general.--The term `staple food' means 
                food that is a basic dietary item.
                    ``(B) Inclusions.--The term `staple food' 
                includes--
                            ``(i) bread;
                            ``(ii) flour;
                            ``(iii) fruits;
                            ``(iv) vegetables; and
                            ``(v) meat.
    ``(c) Initiative.--
            ``(1) Establishment.--The Secretary shall establish an 
        initiative to achieve the purpose described in subsection (a) 
        in accordance with this subsection.
            ``(2) Implementation.--
                    ``(A) In general.--
                            ``(i) In general.--In carrying out the 
                        Initiative, the Secretary shall provide funding 
                        to entities with eligible projects, as 
                        described in subparagraph (B), subject to the 
                        priorities described in subparagraph (C).
                            ``(ii) Use of funds.--Funds provided to an 
                        entity pursuant to clause (i) shall be used--
                                    ``(I) to create revolving loan 
                                pools of capital or other products to 
                                provide loans to finance eligible 
                                projects or partnerships;
                                    ``(II) to provide grants for 
                                eligible projects or partnerships;
                                    ``(III) to provide technical 
                                assistance to funded projects and 
                                entities seeking Initiative funding; 
                                and
                                    ``(IV) to cover administrative 
                                expenses of the national fund manager 
                                in an amount not to exceed 10 percent 
                                of the Federal funds provided.
                    ``(B) Eligible projects.--Subject to the approval 
                of the Secretary, the national fund manager shall 
                establish eligibility criteria for projects under the 
                Initiative, which shall include the existence or 
                planned execution of agreements--
                            ``(i) to expand or preserve the 
                        availability of staple foods in underserved 
                        areas with moderate- and low-income populations 
                        by maintaining or increasing the number of 
                        retail outlets that offer an assortment of 
                        perishable food and staple food items, as 
                        determined by the Secretary, in those areas; 
                        and
                            ``(ii) to accept benefits under the 
                        supplemental nutrition assistance program 
                        established under the Food and Nutrition Act of 
                        2008 (7 U.S.C. 2011 et seq.).
                    ``(C) Priorities.--In carrying out the Initiative, 
                priority shall be given to projects that--
                            ``(i) are located in severely distressed 
                        low-income communities, as defined by the 
                        Community Development Financial Institutions 
                        Fund of the Department of Treasury; and
                            ``(ii) include 1 or more of the following 
                        characteristics:
                                    ``(I) The project will create or 
                                retain quality jobs for low-income 
                                residents in the community.
                                    ``(II) The project supports 
                                regional food systems and locally grown 
                                foods, to the maximum extent 
                                practicable.
                                    ``(III) In areas served by public 
                                transit, the project is accessible by 
                                public transit.
                                    ``(IV) The project involves women- 
                                or minority-owned businesses.
                                    ``(V) The project receives funding 
                                from other sources, including other 
                                Federal agencies.
                                    ``(VI) The project otherwise 
                                advances the purpose of this section, 
                                as determined by the Secretary.
    ``(d) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $125,000,000, 
to remain available until expended.''.
    (b) Conforming Amendment.--Section 296(b) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 7014(b)) (as amended 
by section 1609(d)) is amended--
            (1) in paragraph (7), by striking ``or'' at the end;
            (2) in paragraph (8), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(9) the authority of the Secretary to establish and carry 
        out the Health Food Financing Initiative under section 242.''.

SEC. 4207. PULSE CROP PRODUCTS.

    (a) Purpose.--The purpose of this section is to encourage greater 
awareness and interest in the number and variety of pulse crop products 
available to schoolchildren, as recommended by the most recent Dietary 
Guidelines for Americans published under section 301 of the National 
Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 5341).
    (b) Definitions.--In this section:
            (1) Eligible pulse crop.--The term ``eligible pulse crop'' 
        means dry beans, dry peas, lentils, and chickpeas.
            (2) Pulse crop product.--The term ``pulse crop product'' 
        means a food product derived in whole or in part from an 
        eligible pulse crop.
    (c) Purchase of Pulse Crops and Pulse Crop Products.--In addition 
to the commodities delivered under section 6 of the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1755), the Secretary shall 
purchase eligible pulse crops and pulse crop products for use in--
            (1) the school lunch program established under the Richard 
        B. Russell National School Lunch Act (42 U.S.C. 1751 et seq.); 
        and
            (2) the school breakfast program established by section 4 
        of the Child Nutrition Act of 1966 (42 U.S.C. 1773).
    (d) Evaluation.--Not later than September 30, 2016, the Secretary 
shall conduct an evaluation of the activities conducted under 
subsection (c), including--
            (1) an evaluation of whether children participating in the 
        school lunch and breakfast programs described in subsection (c) 
        increased overall consumption of eligible pulse crops as a 
        result of the activities;
            (2) an evaluation of which eligible pulse crops and pulse 
        crop products are most acceptable for use in the school lunch 
        and breakfast programs;
            (3) any recommendations of the Secretary regarding the 
        integration of the use of pulse crop products in carrying out 
        the school lunch and breakfast programs;
            (4) an evaluation of any change in the nutrient composition 
        in the school lunch and breakfast programs due to the 
        activities; and
            (5) an evaluation of any other outcomes determined to be 
        appropriate by the Secretary.
    (e) Report.--As soon as practicable after the completion of the 
evaluation under subsection (d), the Secretary shall submit to the 
Committee on Agriculture, Nutrition, and Forestry of the Senate and the 
Committee on Education and the Workforce of the House of Representative 
a report describing the results of the evaluation.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $10,000,000, to remain available 
until expended.

SEC. 4208. DIETARY GUIDELINES FOR AMERICANS.

    Section 301(a) of the National Nutrition Monitoring and Related 
Research Act of 1990 (7 U.S.C. 5341(a)) is amended by adding at the end 
the following:
            ``(3) Pregnant women and young children.--Not later than 
        the 2020 report and in each report thereafter, the Secretaries 
        shall include national nutritional and dietary information and 
        guidelines for pregnant women and children from birth until the 
        age of 2.''.

SEC. 4209. PURCHASES OF LOCALLY PRODUCED FOODS.

    Section 9(j) of the Richard B. Russell National School Lunch Act 
(42 U.S.C. 1758(j)) is amended--
            (1) by redesignating paragraphs (1) through (3) as 
        subparagraphs (A) through (C), respectively, and indenting the 
        subparagraphs appropriately;
            (2) by striking ``The Secretary'' and inserting the 
        following:
            ``(1) In general.--The Secretary'';
            (3) in paragraph (1) (as so redesignated)--
                    (A) in subparagraph (B)--
                            (i) by striking ``paragraph (1) of the 
                        policy described in that paragraph and 
                        paragraph (3)'' and inserting ``subparagraph 
                        (A) of the policy described in that 
                        subparagraph and subparagraph (C)''; and
                            (ii) 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) not later than 1 year after the date of 
                enactment of this subparagraph, in accordance with 
                paragraphs (2) and (3), conduct not fewer than 5 
                demonstration projects through school food authorities 
                receiving funds under this Act and the Child Nutrition 
                Act of 1966 (42 U.S.C. 1771 et seq.) to facilitate the 
                purchase of unprocessed and minimally processed locally 
                grown and locally raised agricultural products.''; and
            (4) by adding at the end the following:
            ``(2) Selection.--In conducting demonstration projects 
        under paragraph (1)(D), the Secretary shall ensure that at 
        least 1 project is located in a State in each of--
                    ``(A) the Pacific Northwest Region;
                    ``(B) the Northeast Region;
                    ``(C) the Western Region;
                    ``(D) the Midwest Region; and
                    ``(E) the Southern Region.
            ``(3) Priority.--In selecting States for participation in 
        the demonstration projects under paragraph (2), the Secretary 
        shall prioritize applications based on--
                    ``(A) the quantity and variety of growers of local 
                fruits and vegetables in the State;
                    ``(B) the demonstrated commitment of the State to 
                farm-to-school efforts, as evidenced by prior efforts 
                to increase and promote farm-to- school programs in the 
                State; and
                    ``(C) whether the State contains a sufficient 
                quantity of school districts of varying population 
                sizes and geographical locations.''.

                            TITLE V--CREDIT

  Subtitle A--Farmer Loans, Servicing, and Other Assistance Under the 
              Consolidated Farm and Rural Development Act

SEC. 5001. FARMER LOANS, SERVICING, AND OTHER ASSISTANCE UNDER THE 
              CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT.

    The Consolidated Farm and Rural Development Act (as amended by 
section 6001) is amended by inserting after section 3002 the following:

      ``Subtitle A--Farmer Loans, Servicing, and Other Assistance

                   ``CHAPTER 1--FARM OWNERSHIP LOANS

``SEC. 3101. FARM OWNERSHIP LOANS.

    ``(a) In General.--The Secretary may make or guarantee a farm 
ownership loan under this chapter to an eligible farmer.
    ``(b) Eligibility.--A farmer shall be eligible under subsection (a) 
only--
            ``(1) if the farmer, or, in the case of an entity, 1 or 
        more individuals holding a majority interest in the farmer--
                    ``(A) is a citizen of the United States; and
                    ``(B) in the case of a direct loan, has training or 
                farming experience that the Secretary determines is 
                sufficient to ensure a reasonable prospect of success 
                in the farming operation proposed by the farmer;
            ``(2)(A) in the case of a farmer that is an individual, if 
        the farmer is or proposes to become an owner and operator of a 
        farm that is not larger than a family farm; or
            ``(B) in the case of a lessee-operator of a farm located in 
        the State of Hawaii, if the Secretary determines that--
                    ``(i) the farm is not larger than a family farm;
                    ``(ii) the farm cannot be acquired in fee simple by 
                the lessee-operator;
                    ``(iii) adequate security is provided for the loan 
                with respect to the farm for which the lessee-operator 
                applies under this chapter; and
                    ``(iv) there is a reasonable probability of 
                accomplishing the objectives and repayment of the loan;
            ``(3) in the case of a farmer that is a cooperative, 
        corporation, partnership, trust, limited liability company, 
        joint operation, or such other legal entity as the Secretary 
        determines to be appropriate, with respect to the entity and 
        each farm in which the entity has an ownership or operator 
        interest--
                    ``(A) if--
                            ``(i) a majority interest is held by 
                        individuals who are related by blood or 
                        marriage, as defined by the Secretary;
                            ``(ii) all of the individuals are or 
                        propose to become owners or operators of a farm 
                        that is not larger than a family farm; and
                            ``(iii) at least 1 of the individuals is or 
                        proposes to become an operator of the farm; or
                    ``(B) if--
                            ``(i) the entire interest is held by 
                        individuals who are related by blood or 
                        marriage, as defined by the Secretary;
                            ``(ii) all of the individuals are or 
                        propose to become farm operators; and
                            ``(iii) the ownership interest of each 
                        individual separately constitutes not larger 
                        than a family farm, even if the ownership 
                        interests of the individuals collectively 
                        constitute larger than a family farm;
            ``(4) in the case of an entity that is, or will become 
        within a reasonable period of time, as determined by the 
        Secretary, only the operator of a family farm, if the 1 or more 
        individuals who are the owners of the family farm own--
                    ``(A) a percentage of the family farm that exceeds 
                50 percent; or
                    ``(B) such other percentage as the Secretary 
                determines to be appropriate;
            ``(5) in the case of an operator described in paragraph (3) 
        that is owned, in whole or in part, by 1 or more other 
        entities, if each of the individuals that have a direct or 
        indirect ownership interest in such other entities also have a 
        direct ownership interest in the entity applying as an 
        individual; and
            ``(6) if the farmer and each individual that holds a 
        majority interest in the farmer is unable to obtain credit 
        elsewhere.
    ``(c) Direct Loans.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        may make a direct loan under this chapter only to a farmer who 
        has participated in business operations of a farm for not less 
        than 3 years (or has other acceptable experience for a period 
        of time determined by the Secretary) and--
                    ``(A) is a qualified beginning farmer;
                    ``(B) has not received a previous direct farm 
                ownership loan made under this chapter; or
                    ``(C) has not received a direct farm ownership loan 
                under this chapter more than 10 years before the date 
                on which the new loan would be made.
            ``(2) Youth loans.--The operation of an enterprise by a 
        youth under section 3201(d) shall not be considered the 
        operation of a farm for purposes of paragraph (1).

``SEC. 3102. PURPOSES OF LOANS.

    ``(a) Allowed Purposes.--
            ``(1) Direct loans.--A farmer may use a direct loan made 
        under this chapter only--
                    ``(A) to acquire or enlarge a farm;
                    ``(B) to make capital improvements to a farm;
                    ``(C) to pay loan closing costs related to 
                acquiring, enlarging, or improving a farm;
                    ``(D) to pay for activities to promote soil and 
                water conservation and protection described in section 
                3103 on a farm; or
                    ``(E) to refinance a temporary bridge loan made by 
                a commercial or cooperative lender to a farmer for the 
                acquisition of land for a farm, if--
                            ``(i) the Secretary approved an application 
                        for a direct farm ownership loan to the farmer 
                        for acquisition of the land; and
                            ``(ii) funds for direct farm ownership 
                        loans under section 3201(a) were not available 
                        at the time at which the application was 
                        approved.
            ``(2) Guaranteed loans.--A farmer may use a loan guaranteed 
        under this chapter only--
                    ``(A) to acquire or enlarge a farm;
                    ``(B) to make capital improvements to a farm;
                    ``(C) to pay loan closing costs related to 
                acquiring, enlarging, or improving a farm;
                    ``(D) to pay for activities to promote soil and 
                water conservation and protection described in section 
                3103 on a farm; or
                    ``(E) to refinance indebtedness.
    ``(b) Preferences.--In making or guaranteeing a loan under this 
chapter for purchase of a farm, 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
            ``(3) is an owner of livestock or farm equipment that is 
        necessary to successfully carry out farming operations.
    ``(c) Hazard Insurance Requirement.--The Secretary may not make a 
loan to a farmer under this chapter unless the farmer has, or agrees to 
obtain, hazard insurance on any real property to be acquired or 
improved with the loan.

``SEC. 3103. CONSERVATION LOAN AND LOAN GUARANTEE PROGRAM.

    ``(a) In General.--The Secretary may make or guarantee qualified 
conservation loans to eligible borrowers under this section.
    ``(b) Definitions.--In this section:
            ``(1) Conservation plan.--The term `conservation plan' 
        means a plan, approved by the Secretary, that, for a farming 
        operation, identifies the conservation activities that will be 
        addressed with loan funds provided under this section, 
        including--
                    ``(A) the installation of conservation structures 
                to address soil, water, and related resources;
                    ``(B) the establishment of forest cover for 
                sustained yield timber management, erosion control, or 
                shelter belt purposes;
                    ``(C) the installation of water conservation 
                measures;
                    ``(D) the installation of waste management systems;
                    ``(E) the establishment or improvement of permanent 
                pasture;
                    ``(F) compliance with section 1212 of the Food 
                Security Act of 1985 (16 U.S.C. 3812); and
                    ``(G) other purposes consistent with the plan, 
                including the adoption of any other emerging or 
                existing conservation practices, techniques, or 
                technologies approved by the Secretary.
            ``(2) Qualified conservation loan.--The term `qualified 
        conservation loan' means a loan, the proceeds of which are used 
        to cover the costs to the borrower of carrying out a qualified 
        conservation project.
            ``(3) Qualified conservation project.--The term `qualified 
        conservation project' means conservation measures that address 
        provisions of a conservation plan of the eligible borrower.
    ``(c) Eligibility.--
            ``(1) In general.--The Secretary may make or guarantee 
        loans to farmers.
            ``(2) Requirements.--To be eligible for a loan under this 
        section, applicants shall meet the citizenship and training and 
        experience requirements of section 3101(b).
    ``(d) Priority.--In making or guaranteeing loans under this 
section, the Secretary shall give priority to--
            ``(1) qualified beginning farmers and socially 
        disadvantaged farmers;
            ``(2) owners or tenants who use the loans to convert to 
        sustainable or organic agricultural production systems; and
            ``(3) producers who use the loans to build conservation 
        structures or establish conservation practices to comply with 
        section 1212 of the Food Security Act of 1985 (16 U.S.C. 3812).
    ``(e) Limitations Applicable to Loan Guarantees.--The portion of a 
loan that the Secretary may guarantee under this section shall not 
exceed 75 percent of the principal amount of the loan.
    ``(f) Administrative Provisions.--The Secretary shall ensure, to 
the maximum extent practicable, that loans made or guaranteed under 
this section are distributed across diverse geographic regions.
    ``(g) Credit Eligibility.--The provisions of paragraphs (1) and (3) 
of section 3406(a) shall not apply to loans made or guaranteed under 
this section.
    ``(h) Authorization of Appropriations.--For each of fiscal years 
2012 through 2017, there are authorized to be appropriated to the 
Secretary such sums as are necessary to carry out this section.

``SEC. 3104. LOAN MAXIMUMS.

    ``(a) Maximum.--
            ``(1) In general.--The Secretary shall make or guarantee no 
        loan under sections 3101, 3102, 3103, 3106, and 3107 that would 
        cause the unpaid indebtedness under those sections of any 1 
        borrower to exceed the lesser of--
                    ``(A) the value of the farm or other security, or
                    ``(B)(i) in the case of a loan made by the 
                Secretary, $300,000; or
                    ``(ii) in the case of a loan guaranteed by the 
                Secretary, $700,000 (as modified under paragraph (2)).
            ``(2) Modification.--The amount specified in paragraph 
        (1)(B)(ii) shall be--
                    ``(A) increased, beginning with fiscal year 2000, 
                by the inflation percentage applicable to the fiscal 
                year in which the loan is guaranteed; and
                    ``(B) reduced by the amount of any unpaid 
                indebtedness of the borrower on loans under chapter 2 
                that are guaranteed by the Secretary.
    ``(b) Determination of Value.--In determining the value of the 
farm, the Secretary shall consider appraisals made by competent 
appraisers under rules established by the Secretary.
    ``(c) Inflation Percentage.--For purposes of this section, the 
inflation percentage applicable to a fiscal year is the percentage (if 
any) by which--
            ``(1) the average of the Prices Paid By Farmers Index (as 
        compiled by the National Agricultural Statistics Service of the 
        Department) for the 12-month period ending on August 31 of the 
        immediately preceding fiscal year; exceeds
            ``(2) the average of that index (as so defined) for the 12-
        month period ending on August 31, 1996.

``SEC. 3105. REPAYMENT REQUIREMENTS FOR FARM OWNERSHIP LOANS.

    ``(a) Period for Repayment.--The period for repayment of a loan 
under this chapter shall not exceed 40 years.
    ``(b) Interest Rates.--
            ``(1) In general.--Except as otherwise provided in this 
        title, the interest rate on a loan under this chapter shall be 
        determined by the Secretary at a rate--
                    ``(A) not to exceed the sum obtained by adding--
                            ``(i) the current average market yield on 
                        outstanding marketable obligations of the 
                        United States with remaining periods to 
                        maturity comparable to the average maturity of 
                        the loan; and
                            ``(ii) an amount not to exceed 1 percent, 
                        as determined by the Secretary; and
                    ``(B) adjusted to the nearest \1/8\ of 1 percent.
            ``(2) Low income farm ownership loans.--Except as provided 
        in paragraph (3), the interest rate on a loan (other than a 
        guaranteed loan) under section 3106 shall be determined by the 
        Secretary at a rate that is--
                    ``(A) not greater than the sum obtained by adding--
                            ``(i) an amount that does not exceed \1/2\ 
                        of the current average market yield on 
                        outstanding marketable obligations of the 
                        United States with maturities of 5 years; and
                            ``(ii) an amount not to exceed 1 percent 
                        per year, as the Secretary determines is 
                        appropriate; and
                    ``(B) not less than 5 percent per year.
            ``(3) Joint financing arrangement.--If a direct farm 
        ownership loan is made under this chapter 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.
            ``(4) Guaranteed loans.--The interest rate on a loan made 
        under this chapter as a guaranteed loan shall be such rate as 
        may be agreed on by the borrower and the lender, but not in 
        excess of any rate determined by the Secretary.
    ``(c) Payment of Charges.--A borrower of a loan made or guaranteed 
under this chapter shall pay such fees and other charges as the 
Secretary may require, and prepay to the Secretary such taxes and 
insurance as the Secretary may require, on such terms and conditions as 
the Secretary may prescribe.
    ``(d) Security.--
            ``(1) In general.--The Secretary shall take as security for 
        an obligation entered into in connection with a loan, a 
        mortgage on a farm with respect to which the loan is made or 
        such other security as the Secretary may require.
            ``(2) Liens to united states.--An instrument for security 
        under paragraph (1) may constitute a lien running to the United 
        States notwithstanding the fact that the note for the security 
        may be held by a lender other than the United States.
            ``(3) Multiple loans.--A borrower may use the same 
        collateral to secure 2 or more loans made or guaranteed under 
        this chapter, except that the outstanding amount of the loans 
        may not exceed the total value of the collateral.
    ``(e) Mineral Rights as Collateral.--
            ``(1) In general.--In the case of a farm ownership loan 
        made after December 23, 1985, unless appraised values of the 
        rights to oil, gas, or other minerals are specifically included 
        as part of the appraised value of collateral securing the loan, 
        the rights to oil, gas, or other minerals located under the 
        property shall not be considered part of the collateral 
        securing the loan.
            ``(2) Compensatory payments.--Nothing in this subsection 
        prevents the inclusion of, as part of the collateral securing 
        the loan, any payment or other compensation the borrower may 
        receive for damages to the surface of the collateral real 
        estate resulting from the exploration for or recovery of 
        minerals.
    ``(f) Additional Collateral.--The Secretary may not--
            ``(1) require any borrower to provide additional collateral 
        to secure a farmer program loan made or guaranteed under this 
        subtitle, if the borrower is current in the payment of 
        principal and interest on the loan; or
            ``(2) bring any action to foreclose, or otherwise 
        liquidate, the loan as a result of the failure of a borrower to 
        provide additional collateral to secure the loan, if the 
        borrower was current in the payment of principal and interest 
        on the loan at the time the additional collateral was 
        requested.

``SEC. 3106. LIMITED-RESOURCE LOANS.

    ``(a) In General.--The Secretary may make or guarantee a limited-
resource loan for any of the purposes specified in sections 3102(a) or 
3103(a) to a farmer in the United States who--
            ``(1) in the case of an entity, all members, stockholders, 
        or partners are eligible under section 3101(b);
            ``(2) has a low income; and
            ``(3) demonstrates a need to maximize the income of the 
        farmer from farming operations.
    ``(b) Installments.--A loan made or guaranteed under this section 
shall be repayable in such installments as the Secretary determines 
will provide for reduced payments during the initial repayment period 
of the loan and larger payments during the remainder of the repayment 
period of the loan.
    ``(c) Interest Rates.--Except as provided in section 3105(b)(3) and 
in section 3204(b)(3), the interest rate on loans (other than 
guaranteed loans) under this section shall not be--
            ``(1) greater than the sum obtained by adding--
                    ``(A) an amount that does not exceed \1/2\ of the 
                current average market yield on outstanding marketable 
                obligations of the United States with maturities of 5 
                years; and
                    ``(B) an amount not exceeding 1 percent per year, 
                as the Secretary determines is appropriate; or
            ``(2) less than 5 percent per year.

``SEC. 3107. DOWNPAYMENT LOAN PROGRAM.

    ``(a) In General.--
            ``(1) Establishment.--Notwithstanding any other provision 
        of this chapter, the Secretary shall establish, under the farm 
        ownership loan program established under this chapter, a 
        program under which loans shall be made under this section to a 
        qualified beginning farmer or a socially disadvantaged farmer 
        for a downpayment on a farm ownership loan.
            ``(2) Coordination.--The Secretary shall be the primary 
        coordinator of credit supervision for the downpayment loan 
        program established under this section, in consultation with a 
        commercial or cooperative lender and, if applicable, a 
        contracting credit counseling service selected under section 
        3420(c).
    ``(b) Loan Terms.--
            ``(1) Principal.--Each loan made under this section shall 
        be in an amount that does not exceed 45 percent of the lesser 
        of--
                    ``(A) the purchase price of the farm to be 
                acquired;
                    ``(B) the appraised value of the farm to be 
                acquired; or
                    ``(C) $667,000.
            ``(2) Interest rate.--The interest rate on any loan made by 
        the Secretary under this section shall be a rate equal to the 
        greater of--
                    ``(A) the difference between--
                            ``(i) 4 percent; and
                            ``(ii) the interest rate for farm ownership 
                        loans under this chapter; or
                    ``(B) 1.5 percent.
            ``(3) Duration.--Each loan under this section shall be made 
        for a period of 20 years or less, at the option of the 
        borrower.
            ``(4) Repayment.--Each borrower of a loan under this 
        section shall repay the loan to the Secretary in equal annual 
        installments.
            ``(5) Nature of retained security interest.--The Secretary 
        shall retain an interest in each farm acquired with a loan made 
        under this section that shall--
                    ``(A) be secured by the farm;
                    ``(B) be junior only to such interests in the farm 
                as may be conveyed at the time of acquisition to the 
                person (including a lender) from whom the borrower 
                obtained a loan used to acquire the farm; and
                    ``(C) require the borrower to obtain the permission 
                of the Secretary before the borrower may grant an 
                additional security interest in the farm.
    ``(c) Limitations.--
            ``(1) Borrowers required to make minimum down payment.--The 
        Secretary shall not make a loan under this section to any 
        borrower with respect to a farm if the contribution of the 
        borrower to the down payment on the farm will be less than 5 
        percent of the purchase price of the farm.
            ``(2) Prohibited types of financing.--The Secretary shall 
        not make a loan under this section with respect to a farm if 
        the farm is to be acquired with other financing that contains 
        any of the following conditions:
                    ``(A) The financing is to be amortized over a 
                period of less than 30 years.
                    ``(B) A balloon payment will be due on the 
                financing during the 20-year period beginning on the 
                date on which the loan is to be made by the Secretary.
    ``(d) Administration.--In carrying out this section, the Secretary 
shall, to the maximum extent practicable--
            ``(1) facilitate the transfer of farms from retiring 
        farmers to persons eligible for insured loans under this 
        subtitle;
            ``(2) make efforts to widely publicize the availability of 
        loans under this section among--
                    ``(A) potentially eligible recipients of the loans;
                    ``(B) retiring farmers; and
                    ``(C) applicants for farm ownership loans under 
                this chapter;
            ``(3) encourage retiring farmers to assist in the sale of 
        their farms to qualified beginning farmers and socially 
        disadvantaged farmers providing seller financing;
            ``(4) coordinate the loan program established by this 
        section with State programs that provide farm ownership or 
        operating loans for beginning farmers or socially disadvantaged 
        farmers; and
            ``(5) establish annual performance goals to promote the use 
        of the down payment loan program and other joint financing 
        arrangements as the preferred choice for direct real estate 
        loans made by any lender to a qualified beginning farmer or 
        socially disadvantaged farmer.

``SEC. 3108. BEGINNING FARMER AND SOCIALLY DISADVANTAGED FARMER 
              CONTRACT LAND SALES PROGRAM.

    ``(a) In General.--The Secretary shall, in accordance with this 
section, guarantee a loan made by a private seller of a farm to a 
qualified beginning farmer or socially disadvantaged farmer on a 
contract land sales basis.
    ``(b) Eligibility.--To be eligible for a loan guarantee under 
subsection (a)--
            ``(1) the qualified beginning farmer or socially 
        disadvantaged farmer shall--
                    ``(A) on the date the contract land sale that is 
                subject of the loan is complete, own and operate the 
                farm that is the subject of the contract land sale;
                    ``(B) have a credit history that--
                            ``(i) includes a record of satisfactory 
                        debt repayment, as determined by the Secretary; 
                        and
                            ``(ii) is acceptable to the Secretary; and
                    ``(C) demonstrate to the Secretary that the farmer 
                is unable to obtain sufficient credit without a 
                guarantee to finance any actual need of the farmer at a 
                reasonable rate or term; and
            ``(2) the loan shall meet applicable underwriting criteria, 
        as determined by the Secretary.
    ``(c) Limitations.--The Secretary shall not provide a loan 
guarantee under subsection (a) if--
            ``(1) the contribution of the qualified beginning farmer or 
        socially disadvantaged farmer to the down payment for the farm 
        that is the subject of the contract land sale would be less 
        than 5 percent of the purchase price of the farm; or
            ``(2) the purchase price or the appraisal value of the farm 
        that is the subject of the contract land sale is greater than 
        $500,000.
    ``(d) Period of Guarantee.--A loan guarantee under this section 
shall be in effect for the 10-year period beginning on the date on 
which the guarantee is provided.
    ``(e) Guarantee Plan.--
            ``(1) Selection of plan.--A private seller of a farm who 
        makes a loan guaranteed by the Secretary under subsection (a) 
        may select--
                    ``(A) a prompt payment guarantee plan, which shall 
                cover--
                            ``(i) 3 amortized annual installments; or
                            ``(ii) an amount equal to 3 annual 
                        installments (including an amount equal to the 
                        total cost of any tax and insurance incurred 
                        during the period covered by the annual 
                        installments); or
                    ``(B) a standard guarantee plan, which shall cover 
                an amount equal to 90 percent of the outstanding 
                principal of the loan.
            ``(2) Eligibility for standard guarantee plan.--To be 
        eligible for a standard guarantee plan referred to in paragraph 
        (1)(B), a private seller shall--
                    ``(A) secure a commercial lending institution or 
                similar entity, as determined by the Secretary, to 
                serve as an escrow agent; or
                    ``(B) in cooperation with the farmer, use an 
                appropriate alternate arrangement, as determined by the 
                Secretary.

                      ``CHAPTER 2--OPERATING LOANS

``SEC. 3201. OPERATING LOANS.

    ``(a) In General.--The Secretary may make or guarantee an operating 
loan under this chapter to an eligible farmer in the United States.
    ``(b) Eligibility.--A farmer shall be eligible under subsection (a) 
only--
            ``(1) if the farmer, or an individual holding a majority 
        interest in the farmer--
                    ``(A) is a citizen of the United States; and
                    ``(B) has training or farming experience that the 
                Secretary determines is sufficient to ensure a 
                reasonable prospect of success in the farming operation 
                proposed by the farmer;
            ``(2) in the case of a farmer that is an individual, if the 
        farmer is or proposes to become an operator of a farm that is 
        not larger than a family farm;
            ``(3) in the case of a farmer that is a cooperative, 
        corporation, partnership, trust, limited liability company, 
        joint operation, or other such legal entity as the Secretary 
        determines to be appropriate, with respect to the entity and 
        each farm in which the entity has an ownership or operator 
        interest--
                    ``(A) if--
                            ``(i) a majority interest is held by 
                        individuals who are related by blood or 
                        marriage, as defined by the Secretary;
                            ``(ii) all of the individuals are or 
                        propose to become owners or operators of a farm 
                        that is not larger than a family farm; and
                            ``(iii) at least 1 of the individuals is or 
                        proposes to become an operator of the farm; or
                    ``(B) if--
                            ``(i) the entire interest is held by 
                        individuals who are related by blood or 
                        marriage, as defined by the Secretary;
                            ``(ii) all of the individuals are or 
                        propose to become farm operators; and
                            ``(iii) the ownership interest of each 
                        individual separately constitutes not larger 
                        than a family farm, even if the ownership 
                        interests of the individuals collectively 
                        constitute larger than a family farm;
            ``(4) in the case of an operator described in paragraph (3) 
        that is owned, in whole or in part by 1 or more other entities, 
        if not less than 75 percent of the ownership interests of each 
        other entity is owned directly or indirectly by 1 or more 
        individuals who own the family farm; and
            ``(5) if the farmer and each individual that holds a 
        majority interest in the farmer is unable to obtain credit 
        elsewhere.
    ``(c) Direct Loans.--
            ``(1) In general.--Subject to paragraph (3), the Secretary 
        may make a direct loan under this chapter only to a farmer 
        who--
                    ``(A) is a qualified beginning farmer;
                    ``(B) has not received a previous direct operating 
                loan made under this chapter; or
                    ``(C) has not received a direct operating loan made 
                under this chapter for a total of 7 years, less 1 year 
                for every 3 consecutive years the farmer did not 
                receive a direct operating loan after the year in which 
                the borrower initially received a direct operating loan 
                under this chapter, as determined by the Secretary.
            ``(2) Youth loans.--In this subsection, the term `direct 
        operating loan' shall not include a loan made to a youth under 
        subsection (d).
            ``(3) Transition rule.--If, as of April 4, 1996, a farmer 
        has received a direct operating loan under this chapter during 
        each of 4 or more previous years, the borrower shall be 
        eligible to receive a direct operating loan under this chapter 
        during 3 additional years after April 4, 1996.
            ``(4) Waivers.--
                    ``(A) Farm operations on tribal land.--The 
                Secretary shall waive the limitation under paragraph 
                (1)(C) or (3) for a direct loan made under this chapter 
                to a farmer whose farm land is subject to the 
                jurisdiction of an Indian tribe and whose loan is 
                secured by 1 or more security instruments that are 
                subject to the jurisdiction of an Indian tribe if the 
                Secretary determines that commercial credit is not 
                generally available for such farm operations.
                    ``(B) Other farm operations.--On a case-by-case 
                determination not subject to administrative appeal, the 
                Secretary may grant a borrower a waiver, 1 time only 
                for a period of 2 years, of the limitation under 
                paragraph (1)(C) or (3) for a direct operating loan if 
                the borrower demonstrates to the satisfaction of the 
                Secretary that--
                            ``(i) the borrower has a viable farm 
                        operation;
                            ``(ii) the borrower applied for commercial 
                        credit from at least 2 commercial lenders;
                            ``(iii) the borrower was unable to obtain a 
                        commercial loan (including a loan guaranteed by 
                        the Secretary); and
                            ``(iv) the borrower successfully has 
                        completed, or will complete within 1 year, 
                        borrower training under section 3419 (from 
                        which requirement the Secretary shall not grant 
                        a waiver under section 3419(f)).
    ``(d) Youth Loans.--
            ``(1) In general.--Notwithstanding subsection (b), except 
        for citizenship and credit requirements, a loan may be made 
        under this chapter to a youth who is a rural resident to enable 
        the youth to operate an enterprise in connection with the 
        participation in a youth organization, as determined by the 
        Secretary.
            ``(2) Full personal liability.--A youth receiving a loan 
        under this subsection who executes a promissory note for the 
        loan shall incur full personal liability for the indebtedness 
        evidenced by the note, in accordance with the terms of the 
        note, free of any disability of minority.
            ``(3) Cosigner.--The Secretary may accept the personal 
        liability of a cosigner of a promissory note for a loan under 
        this subsection, in addition to the personal liability of the 
        youth borrower.
            ``(4) Youth enterprises not farming.--The operation of an 
        enterprise by a youth under this subsection shall not be 
        considered the operation of a farm under this subtitle.
    ``(e) Pilot Loan Program To Support Healthy Foods for the Hungry.--
            ``(1) Definition of gleaner.--In this subsection, the term 
        `gleaner' means an entity that--
                    ``(A) collects edible, surplus food that would be 
                thrown away and distributes the food to agencies or 
                nonprofit organizations that feed the hungry; or
                    ``(B) harvests for free distribution to the needy, 
                or for donation to agencies or nonprofit organizations 
                for ultimate distribution to the needy, an agricultural 
                crop that has been donated by the owner of the crop.
            ``(2) Program.--Not later than 180 days after the date of 
        enactment of this subsection, the Secretary shall establish, 
        within the operating loan program established under this 
        chapter, a pilot program under which the Secretary makes loans 
        available to eligible entities to assist the entities in 
        providing food to the hungry.
            ``(3) Eligibility.--In addition to any other person 
        eligible under the terms and conditions of the operating loan 
        program established under this chapter, gleaners shall be 
        eligible to receive loans under this subsection.
            ``(4) Loan amount.--
                    ``(A) In general.--Each loan issued under the 
                program shall be in an amount of not less than $500 and 
                not more than $5,000.
                    ``(B) Redistribution.--If the eligible recipients 
                in a State do not use the full allocation of loans that 
                are available to eligible recipients in the State under 
                this subsection, the Secretary may use any unused 
                amounts to make loans available to eligible entities in 
                other States in accordance with this subsection.
            ``(5) Loan processing.--
                    ``(A) In general.--The Secretary shall process any 
                loan application submitted under the program not later 
                than 30 days after the date on which the application 
                was submitted.
                    ``(B) Expediting applications.--The Secretary shall 
                take any measure the Secretary determines necessary to 
                expedite any application submitted under the program.
            ``(6) Paperwork reduction.--The Secretary shall take 
        measures to reduce any paperwork requirements for loans under 
        the program.
            ``(7) Program integrity.--The Secretary shall take such 
        actions as are necessary to ensure the integrity of the program 
        established under this subsection.
            ``(8) Maximum amount.--Of funds that are made available to 
        carry out this chapter, the Secretary shall use to carry out 
        this subsection a total amount of not more than $500,000.
            ``(9) Report.--Not later than 180 days after the maximum 
        amount of funds are used to carry out this subsection under 
        paragraph (8), the Secretary shall submit to the Committee on 
        Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate a report 
        that describes the results of the pilot program and the 
        feasibility of expanding the program.

``SEC. 3202. PURPOSES OF LOANS.

    ``(a) Direct Loans.--A direct loan may be made under this chapter 
only--
            ``(1) to pay the costs incident to reorganizing a farm for 
        more profitable operation;
            ``(2) to purchase livestock, poultry, or farm equipment;
            ``(3) to purchase feed, seed, fertilizer, insecticide, or 
        farm supplies, or to meet other essential farm operating 
        expenses, including cash rent;
            ``(4) to finance land or water development, use, or 
        conservation;
            ``(5) to pay loan closing costs;
            ``(6) to assist a farmer in changing the equipment, 
        facilities, or methods of operation of a farm 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 that Act (29 
        U.S.C. 667), if the Secretary determines that without 
        assistance under this paragraph the farmer is likely to suffer 
        substantial economic injury in complying with the standard;
            ``(7) to train a limited-resource borrower receiving a loan 
        under section 3106 in maintaining records of farming 
        operations;
            ``(8) to train a borrower under section 3419;
            ``(9) to refinance the indebtedness of a borrower, if the 
        borrower--
                    ``(A) has refinanced a loan under this chapter 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 or major disaster 
                or emergency; or
                    ``(ii) is refinancing a debt obtained from a 
                creditor other than the Secretary; or
            ``(10) to provide other farm or home needs, including 
        family subsistence.
    ``(b) Guaranteed Loans.--A loan may be guaranteed under this 
chapter only--
            ``(1) to pay the costs incident to reorganizing a farm for 
        more profitable operation;
            ``(2) to purchase livestock, poultry, or farm equipment;
            ``(3) to purchase feed, seed, fertilizer, insecticide, or 
        farm supplies, or to meet other essential farm operating 
        expenses, including cash rent;
            ``(4) to finance land or water development, use, or 
        conservation;
            ``(5) to refinance indebtedness;
            ``(6) to pay loan closing costs;
            ``(7) to assist a farmer in changing the equipment, 
        facilities, or methods of operation of a farm 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 that Act (29 
        U.S.C. 667), if the Secretary determines that without 
        assistance under this paragraph the farmer is likely to suffer 
        substantial economic injury due to compliance with the 
        standard;
            ``(8) to train a borrower under section 3419; or
            ``(9) to provide other farm or home needs, including family 
        subsistence.
    ``(c) Hazard Insurance Requirement.--The Secretary may not make a 
loan to a farmer under this chapter unless the farmer has, or agrees to 
obtain, hazard insurance on the property to be acquired with the loan.
    ``(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 chapter 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 lesser 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 immediate family 
                of the borrower for 3 calendar months.

``SEC. 3203. RESTRICTIONS ON LOANS.

    ``(a) Requirements.--
            ``(1) In general.--The Secretary may not make or guarantee 
        a loan under this chapter--
                    ``(A) that would cause the total principal 
                indebtedness outstanding at any 1 time for loans made 
                under this chapter to any 1 borrower to exceed--
                            ``(i)(I) in the case of a loan made by the 
                        Secretary, $300,000; or
                            ``(II) in the case of a loan guaranteed by 
                        the Secretary, $700,000 (as modified under 
                        paragraph (2)); or
                    ``(B) for the purchasing or leasing of land other 
                than for cash rent, or for carrying on a land leasing 
                or land purchasing program.
            ``(2) Modification.--The amount specified in paragraph 
        (1)(A)(ii) shall be--
                    ``(A) increased, beginning with fiscal year 2000, 
                by the inflation percentage applicable to the fiscal 
                year in which the loan is guaranteed; and
                    ``(B) reduced by the unpaid indebtedness of the 
                borrower on loans under sections specified in section 
                3104 that are guaranteed by the Secretary.
    ``(b) Inflation Percentage.--For purposes of this section, the 
inflation percentage applicable to a fiscal year is the percentage (if 
any) by which--
            ``(1) the average of the Prices Paid By Farmers Index (as 
        compiled by the National Agricultural Statistics Service of the 
        Department) for the 12-month period ending on August 31 of the 
        immediately preceding fiscal year; exceeds
            ``(2) the average of that index (as so defined) for the 12-
        month period ending on August 31, 1996.

``SEC. 3204. TERMS OF LOANS.

    ``(a) Personal Liability.--A borrower of a loan made under this 
chapter shall secure the loan with the full personal liability of the 
borrower and such other security as the Secretary may prescribe.
    ``(b) Interest Rates.--
            ``(1) Maximum rate.--
                    ``(A) In general.--Except as provided in paragraphs 
                (2) and (3), the interest rate on a loan made under 
                this chapter (other than a guaranteed loan) shall be 
                determined by the Secretary at a rate not to exceed the 
                sum obtained by adding--
                            ``(i) the current average market yield on 
                        outstanding marketable obligations of the 
                        United States with remaining periods to 
                        maturity comparable to the average maturity of 
                        the loan; and
                            ``(ii) an additional charge not to exceed 1 
                        percent, as determined by the Secretary.
                    ``(B) Adjustment.--The sum obtained under 
                subparagraph (A) shall be adjusted to the nearest \1/8\ 
                of 1 percent.
            ``(2) Guaranteed loan.--The interest rate on a guaranteed 
        loan made under this chapter shall be such rate as may be 
        agreed on by the borrower and the lender, but may not exceed 
        any rate prescribed by the Secretary.
            ``(3) Low income loan.--The interest rate on a direct loan 
        made under this chapter to a low-income, limited-resource 
        borrower shall be determined by the Secretary at a rate that is 
        not--
                    ``(A) greater than the sum obtained by adding--
                            ``(i) an amount that does not exceed \1/2\ 
                        of the current average market yield on 
                        outstanding marketable obligations of the 
                        United States with a maturity of 5 years; and
                            ``(ii) an amount not to exceed 1 percent 
                        per year, as the Secretary determines is 
                        appropriate; or
                    ``(B) less than 5 percent per year.
    ``(c) Period for Repayment.--The period for repayment of a loan 
made under this chapter may not exceed 7 years.
    ``(d) Line-of-credit Loans.--
            ``(1) In general.--A loan made or guaranteed by the 
        Secretary under this chapter may be in the form of a line-of-
        credit 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 an operating loan under this chapter, each year during 
        which a farmer takes an advance or draws on a line-of-credit 
        loan the farmer shall be considered as having received an 
        operating loan for 1 year.
            ``(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 line-of-
        credit, unless the Secretary determines that--
                    ``(A) the failure of the borrower 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 agricultural 
                        products of the borrower.
            ``(5) Agricultural commodities.--A line-of-credit loan may 
        be used to finance the production or marketing of an 
        agricultural commodity that is eligible for a price support 
        program of the Department.

                      ``CHAPTER 3--EMERGENCY LOANS

``SEC. 3301. EMERGENCY LOANS.

    ``(a) In General.--The Secretary shall make or guarantee an 
emergency loan under this chapter to an eligible farmer (including a 
commercial fisherman) only to the extent and in such amounts as 
provided in advance in appropriation Acts.
    ``(b) Eligibility.--An established farmer shall be eligible under 
subsection (a) only--
            ``(1) if the farmer or an individual holding a majority 
        interest in the farmer--
                    ``(A) is a citizen of the United States; and
                    ``(B) has experience and resources that the 
                Secretary determines are sufficient to ensure a 
                reasonable prospect of success in the farming operation 
                proposed by the farmer;
            ``(2) in the case of a farmer that is an individual, if the 
        farmer is--
                    ``(A) in the case of a loan for a purpose under 
                chapter 1, an owner, operator, or lessee-operator 
                described in section 3101(b)(2); and
                    ``(B) in the case of a loan for a purpose under 
                chapter 2, an operator of a farm that is not larger 
                than a family farm;
            ``(3) in the case of a farmer that is a cooperative, 
        corporation, partnership, trust, limited liability company, 
        joint operation, or such other legal entity as the Secretary 
        determines to be appropriate, with respect to the entity and 
        each farm in which the entity has an ownership or operator 
        interest--
                    ``(A) if--
                            ``(i) a majority interest is held by 
                        individuals who are related by blood or 
                        marriage, as defined by the Secretary;
                            ``(ii) all of the individuals are or 
                        propose to become owners or operators of a farm 
                        that is not larger than a family farm; and
                            ``(iii) at least 1 of the individuals is or 
                        proposes to become an operator of the farm; or
                    ``(B) if--
                            ``(i) the entire interest is held by 
                        individuals who are related by blood or 
                        marriage, as defined by the Secretary;
                            ``(ii) all of the individuals are or 
                        propose to become farm operators; and
                            ``(iii) the ownership interest of each 
                        individual separately constitutes not larger 
                        than a family farm, even if the ownership 
                        interests of the individuals collectively 
                        constitute larger than a family farm;
            ``(4) if the entity is owned, in whole or in part, by 1 or 
        more other entities and each individual who is an owner of the 
        family farm involved has a direct or indirect ownership 
        interest in each of the other entities;
            ``(5) if the farmer and any individual that holds a 
        majority interest in the farmer is unable to obtain credit 
        elsewhere; and
            ``(6)(A) if the Secretary finds that the operations of the 
        farmer have been substantially affected by--
                    ``(i) a natural or 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) a quarantine imposed by the Secretary under 
                the Plant Protection Act (7 U.S.C. 7701 et seq.) or the 
                Animal Health Protection Act (7 U.S.C. 8301 et seq.); 
                or
            ``(B) if the farmer conducts farming operations in a county 
        or a county contiguous to a county in which the Secretary has 
        found that farming operations have been substantially affected 
        by a natural or major disaster or emergency.
    ``(c) Time for Accepting an Application.--The Secretary shall 
accept an application for a loan under this chapter from a farmer at 
any time during the 8-month period beginning on the date that--
            ``(1) the Secretary determines that farming operations of 
        the farmer have been substantially affected by--
                    ``(A) a quarantine imposed by the Secretary under 
                the Plant Protection Act (7 U.S.C. 7701 et seq.) or the 
                Animal Health Protection Act (7 U.S.C. 8301 et seq.); 
                or
                    ``(B) a natural disaster; or
            ``(2) the President makes a major disaster or emergency 
        designation with respect to the affected county of the farmer 
        referred to in subsection (b)(5)(B).
    ``(d) Hazard Insurance Requirement.--The Secretary may not make a 
loan to a farmer under this chapter to cover a property loss unless the 
farmer had hazard insurance that insured the property at the time of 
the loss.
    ``(e) Family Farm.--The Secretary shall conduct the loan program 
under this chapter in a manner that will foster and encourage the 
family farm system of agriculture, consistent with the reaffirmation of 
policy and declaration of the intent of Congress contained in section 
102(a) of the Food and Agriculture Act of 1977 (7 U.S.C. 2266(a)).

``SEC. 3302. PURPOSES OF LOANS.

    ``Subject to the limitations on the amounts of loans provided in 
section 3303(a), a loan may be made or guaranteed under this chapter 
for--
            ``(1) any purpose authorized for a loan under chapter 1 or 
        2; and
            ``(2) crop or livestock purposes that are--
                    ``(A) necessitated by a quarantine, natural 
                disaster, major disaster, or emergency; and
                    ``(B) considered desirable by the farmer.

``SEC. 3303. TERMS OF LOANS.

    ``(a) Maximum Amount of Loan.--The Secretary may not make or 
guarantee a loan under this chapter 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 chapter to exceed $500,000.
    ``(b) Interest Rates.--Any portion of a loan under this chapter up 
to the amount of the actual loss suffered by a farmer caused by a 
disaster shall be at a rate prescribed by the Secretary, but not in 
excess of 8 percent per annum.
    ``(c) Interest Subsidies for Guaranteed Loans.--In the case of a 
guaranteed loan under this chapter, the Secretary may pay an interest 
subsidy to the lender for any portion of the loan up to the amount of 
the actual loss suffered by a farmer caused by a disaster.
    ``(d) Time for Repayment.--
            ``(1) In general.--Subject to paragraph (2), a loan under 
        this chapter shall be repayable at such times as the Secretary 
        may determine, considering the purpose of the loan and the 
        nature and effect of the disaster, but not later than the 
        maximum repayment period allowed for a loan for a similar 
        purpose under chapters 1 and 2.
            ``(2) Extended repayment period.--The Secretary may, if the 
        loan is for a purpose described in chapter 2 and the Secretary 
        determines that the need of the loan applicant justifies the 
        longer repayment period, make the loan repayable at the end of 
        a period of more than 7 years, but not more than 20 years.
    ``(e) Security for Loan.--
            ``(1) In general.--A borrower of a loan made under this 
        chapter shall secure the loan with the full personal liability 
        of the borrower and such other security as the Secretary may 
        prescribe.
            ``(2) Adequate security.--Subject to paragraph (3), the 
        Secretary may not make or guarantee a loan under this chapter 
        unless the security for the loan is adequate to ensure 
        repayment of the loan.
            ``(3) Inadequate security due to disaster.--If adequate 
        security for a loan under this chapter is not available because 
        of a disaster, the Secretary shall accept as security any 
        collateral that is available if the Secretary is confident that 
        the collateral and the repayment ability of the farmer are 
        adequate security for the loan.
            ``(4) Valuation of farm assets.--If a farm asset (including 
        land, livestock, or equipment) is used as collateral to secure 
        a loan applied for under this chapter and the governor of the 
        State in which the farm is located requests assistance under 
        this chapter or the Robert T. Stafford Disaster Relief and 
        Emergency Assistance Act (42 U.S.C. 5121 et seq.) for the 
        portion of the State in which the asset is located, the 
        Secretary shall establish the value of the asset as of the day 
        before the occurrence of the natural or major disaster or 
        emergency.
    ``(f) Review of Loan.--
            ``(1) In general.--In the case of a loan made, but not 
        guaranteed, under section 3301, the Secretary shall review the 
        loan 3 years after the loan is made, and every 2 years 
        thereafter for the term of the loan.
            ``(2) Termination of federal assistance.--If, based on a 
        review under paragraph (1), the Secretary determines that the 
        borrower is able to obtain a loan from a non-Federal source at 
        reasonable rates and terms, the borrower shall, on request by 
        the Secretary, apply for, and accept, a non-Federal loan in a 
        sufficient amount to repay the Secretary.

``SEC. 3304. PRODUCTION LOSSES.

    ``(a) In General.--The Secretary shall make or guarantee a loan 
under this chapter to an eligible farmer for production losses if a 
single enterprise that constitutes a basic part of the farming 
operation of the farmer has sustained at least a 30 percent loss in 
normal per acre or per animal production, or such lesser percentage as 
the Secretary may determine, as a result of a disaster.
    ``(b) Basis for Percentage.--A percentage loss under subsection (a) 
shall be based on the average monthly price in effect for the previous 
crop or calendar year, as appropriate.
    ``(c) Amount of Loan.--A loan under subsection (a) shall be in an 
amount that is equal to 80 percent, or such greater percentage as the 
Secretary may determine, of the total calculated actual production loss 
sustained by the farmer.

              ``CHAPTER 4--GENERAL FARMER LOAN PROVISIONS

``SEC. 3401. AGRICULTURAL CREDIT INSURANCE FUND.

    ``The fund established pursuant to section 11(a) of the Bankhead-
Jones Farm Tenant Act (60 Stat. 1075, chapter 964) shall be known as 
the Agricultural Credit Insurance Fund (referred to in this section as 
the `Fund', unless the context otherwise requires) for the discharge of 
the obligations of the Secretary under agreements insuring loans under 
this subtitle and loans and mortgages insured under prior authority.

``SEC. 3402. GUARANTEED FARMER LOANS.

    ``(a) In General.--The Secretary may provide financial assistance 
to a borrower for a purpose provided in this subtitle by guaranteeing a 
loan made by any Federal or State chartered bank, savings and loan 
association, cooperative lending agency, or other legally organized 
lending agency.
    ``(b) Interest Rate.--The interest rate payable by a borrower on 
the portion of a guaranteed loan that is sold by a lender to the 
secondary market under this subtitle may be lower than the interest 
rate charged on the portion retained by the lender, but shall not 
exceed the average interest rate charged by the lender on loans made to 
farm borrowers.
    ``(c) Fees.--In the case of a loan guarantee on a loan made by a 
commercial or cooperative lender related to a loan made by the 
Secretary under section 3107--
            ``(1) the Secretary shall not charge a fee to any person 
        (including a lender); and
            ``(2) a lender may charge a loan origination and servicing 
        fee in an amount not to exceed 1 percent of the amount of the 
        loan.
    ``(d) Maximum Guarantee of 90 Percent.--Except as provided in 
subsections (e) and (f), a loan guarantee under this subtitle shall be 
for not more than 90 percent of the principal and interest due on the 
loan.
    ``(e) Refinanced Loans Guaranteed at 95 Percent.--The Secretary 
shall guarantee 95 percent of--
            ``(1) in the case of a loan that solely refinances a direct 
        loan made under this subtitle, the principal and interest due 
        on the loan on the date of the refinancing; or
            ``(2) 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 subtitle that 
        is outstanding on the date the loan is guaranteed.
    ``(f) Beginning Farmer Loans Guaranteed Up to 95 Percent.--The 
Secretary may guarantee not more than 95 percent of--
            ``(1) a farm ownership loan for acquiring a farm to a 
        borrower who is participating in the downpayment loan program 
        under section 3107; or
            ``(2) an operating loan to a borrower who is participating 
        in the downpayment loan program under section 3107 that is made 
        during the period that the borrower has a direct loan 
        outstanding under chapter 1 for acquiring a farm.
    ``(g) Guarantee of Loans Made Under State Beginning Farmer 
Programs.--The Secretary may guarantee under this subtitle a loan made 
under a State beginning farmer program, including a loan financed by 
the net proceeds of a qualified small issue agricultural bond for land 
or property described in section 144(a)(12)(B)(ii) of the Internal 
Revenue Code of 1986.

``SEC. 3403. PROVISION OF INFORMATION TO BORROWERS.

    ``(a) Approval Notification.--The Secretary shall approve or 
disapprove an application for a loan or loan guarantee made under this 
subtitle, and notify the applicant of such action, not later than 60 
days after the date on which the Secretary has received a complete 
application for the loan or loan guarantee.
    ``(b) List of Lenders.--The Secretary shall make available to any 
farmer, on request, a list of lenders in the area that participate in 
guaranteed farmer program loan programs established under this 
subtitle, and other lenders in the area that express a desire to 
participate in the programs and that request inclusion on the list.
    ``(c) Other Information.--
            ``(1) In general.--On the request of a borrower, the 
        Secretary shall make available to the borrower--
                    ``(A) a copy of each document signed by the 
                borrower;
                    ``(B) a copy of each appraisal performed with 
                respect to the loan; and
                    ``(C) any document that the Secretary is required 
                to provide to the borrower under any law in effect on 
                the date of the request.
            ``(2) Rule of construction.--Paragraph (1) shall not 
        supersede any duty imposed on the Secretary by a law in effect 
        on January 5, 1988, unless the duty directly conflicts with a 
        duty under paragraph (1).

``SEC. 3404. NOTICE OF LOAN SERVICE PROGRAMS.

    ``(a) Requirement.--The Secretary shall provide notice by certified 
mail to each borrower who is at least 90 days past due on the payment 
of principal or interest on a loan made under this subtitle.
    ``(b) Contents.--The notice required under subsection (a) shall--
            ``(1) include a summary of all primary loan service 
        programs, homestead retention programs, debt settlement 
        programs, and appeal procedures, including the eligibility 
        criteria, and terms and conditions of the programs and 
        procedures;
            ``(2) include a summary of the manner in which the borrower 
        may apply, and be considered, for all such programs, except 
        that the Secretary shall not require the borrower to select 
        among the programs or waive any right to be considered for any 
        program carried out by the Secretary;
            ``(3) advise the borrower regarding all filing requirements 
        and any deadlines that must be met for requesting loan 
        servicing;
            ``(4) provide any relevant forms, including applicable 
        response forms;
            ``(5) advise the borrower that a copy of regulations is 
        available on request; and
            ``(6) be designed to be readable and understandable by the 
        borrower.
    ``(c) Contained in Regulations.--All notices required by this 
section shall be contained in the regulations issued to carry out this 
title.
    ``(d) Timing.--The notice described in subsection (b) shall be 
provided--
            ``(1) at the time an application is made for participation 
        in a loan service program;
            ``(2) on written request of the borrower; and
            ``(3) before the earliest of the date of--
                    ``(A) initiating any liquidation;
                    ``(B) requesting the conveyance of security 
                property;
                    ``(C) accelerating the loan;
                    ``(D) repossessing property;
                    ``(E) foreclosing on property; or
                    ``(F) taking any other collection action.
    ``(e) Consideration of Borrowers for Loan Service Programs.--
            ``(1) In general.--The Secretary shall consider a farmer 
        program loan borrower for all loan service programs if, not 
        later than 60 days after receipt of the notice described in 
        subsection (b), the borrower requests the consideration in 
        writing.
            ``(2) Priority.--In considering a borrower for a loan 
        service program, the Secretary shall place the highest priority 
        on the preservation of the farming operations of the borrower.

``SEC. 3405. PLANTING AND PRODUCTION HISTORY GUIDELINES.

    ``(a) In General.--The Secretary shall ensure that appropriate 
procedures, including, to the extent practicable, onsite inspections, 
or use of county or State yield averages, are used in calculating 
future yields for an applicant for a loan, when an accurate projection 
cannot be made because the past production history of the farmer has 
been affected by a natural or major disaster or emergency.
    ``(b) Calculation of Yields.--
            ``(1) In general.--For the purpose of averaging the past 
        yields of the farm of a farmer over a period of crop years to 
        calculate the future yield of the farm under this title, the 
        Secretary shall permit the farmer to exclude the crop year with 
        the lowest actual or county average yield for the farm from the 
        calculation, if the farmer was affected by a natural or major 
        disaster or emergency during at least 2 of the crop years 
        during the period.
            ``(2) Affected by a natural or major disaster or 
        emergency.--A farmer was affected by a natural or major 
        disaster or emergency under paragraph (1) if the Secretary 
        finds that the farming operations of the farmer have been 
        substantially affected by a natural or major disaster or 
        emergency, including a farmer who has a qualifying loss but is 
        not located in a designated or declared disaster area.
            ``(3) Application of subsection.--This subsection shall 
        apply to any action taken by the Secretary that involves--
                    ``(A) a loan under chapter 1 or 2; and
                    ``(B) the yield of a farm of a farmer, including 
                making a loan or loan guarantee, servicing a loan, or 
                making a credit sale.

``SEC. 3406. SPECIAL CONDITIONS AND LIMITATIONS ON LOANS.

    ``(a) Applicant Requirements.--In connection with a loan made or 
guaranteed under this subtitle, the Secretary shall require--
            ``(1) the applicant--
                    ``(A) to certify in writing that, and the Secretary 
                shall determine whether, the applicant is unable to 
                obtain credit elsewhere; and
                    ``(B) to furnish an appropriate written financial 
                statement;
            ``(2) except for a guaranteed loan, an agreement by the 
        borrower that if at any time it appears to the Secretary that 
        the borrower may be able to obtain a loan from a production 
        credit association, a Federal land bank, or other responsible 
        cooperative or private credit source (or, in the case of a 
        borrower under section 3106, the borrower may be able to obtain 
        a loan under section 3101), at reasonable rates and terms for 
        loans for similar purposes and periods of time, the borrower 
        will, on request by the Secretary, apply for and accept the 
        loan in a sufficient amount to repay the Secretary or the 
        insured lender, or both, and to pay for any stock necessary to 
        be purchased in a cooperative lending agency in connection with 
        the loan;
            ``(3) such provision for supervision of the operations of 
        the borrower as the Secretary shall consider necessary to 
        achieve the objectives of the loan and protect the interests of 
        the United States; and
            ``(4) the application of a person who is a veteran for a 
        loan under chapter 1 or 2 to be given preference over a similar 
        application from a person who is not a veteran if the 
        applications are on file in a county or area office at the same 
        time.
    ``(b) Agency Processing Requirements.--
            ``(1) Notifications.--
                    ``(A) Incomplete application notification.--If an 
                application for a loan or loan guarantee under this 
                subtitle (other than an operating loan or loan 
                guarantee) is incomplete, the Secretary shall inform 
                the applicant of the reasons the application is 
                incomplete not later than 20 days after the date on 
                which the Secretary has received the application.
                    ``(B) Operating loans.--
                            ``(i) Additional information needed.--Not 
                        later than 10 calendar days after the Secretary 
                        receives an application for an operating loan 
                        or loan guarantee, the Secretary shall notify 
                        the applicant of any information required 
                        before a decision may be made on the 
                        application.
                            ``(ii) Information not received.--If, not 
                        later than 20 calendar days after the date a 
                        request is made pursuant to clause (i) with 
                        respect to an application, the Secretary has 
                        not received the information requested, the 
                        Secretary shall notify the applicant and the 
                        district office of the Farm Service Agency, in 
                        writing, of the outstanding information.
                    ``(C) Request information.--
                            ``(i) In general.--On receipt of an 
                        application, the Secretary shall request from 
                        other parties such information as may be needed 
                        in connection with the application.
                            ``(ii) Information from an agency of the 
                        department.--Not later than 15 calendar days 
                        after the date on which an agency of the 
                        Department receives a request for information 
                        made pursuant to subparagraph (A), the agency 
                        shall provide the Secretary with the requested 
                        information.
            ``(2) Report of pending applications.--
                    ``(A) In general.--A county office shall notify the 
                district office of the Farm Service Agency of each 
                application for an operating loan or loan guarantee 
                that is pending more than 45 days after receipt, and 
                the reasons for which the application is pending.
                    ``(B) Action on pending applications.--A district 
                office that receives a notice provided under 
                subparagraph (A) with respect to an application shall 
                immediately take steps to ensure that final action is 
                taken on the application not later than 15 days after 
                the date of the receipt of the notice.
                    ``(C) Pending application report.--The district 
                office shall report to the State office of the Farm 
                Service Agency on each application for an operating 
                loan or loan guarantee that is pending more than 45 
                days after receipt, and the reasons for which the 
                application is pending.
                    ``(D) Report to congress.--Each month, the 
                Secretary shall notify the Committee on Agriculture of 
                the House of Representatives and the Committee on 
                Agriculture, Nutrition, and Forestry of the Senate, on 
                a State-by-State basis, as to each application for an 
                operating loan or loan guarantee on which final action 
                had not been taken within 60 calendar days after 
                receipt by the Secretary, and the reasons for which 
                final action had not been taken.
            ``(3) Disapprovals.--
                    ``(A) In general.--If an application for a loan or 
                loan guarantee under this subtitle is disapproved by 
                the Secretary, the Secretary shall state the reasons 
                for the disapproval in the notice required under 
                paragraph (1).
                    ``(B) Disapproval due to lack of funds.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (1), each application for a loan or 
                        loan guarantee under section 3601(e), or for a 
                        loan under section 3501(a) or 3502(a), that is 
                        to be disapproved by the Secretary solely 
                        because the Secretary lacks the funds necessary 
                        to make the loan or guarantee shall not be 
                        disapproved but shall be placed in pending 
                        status.
                            ``(ii) Reconsideration.--The Secretary 
                        shall retain each pending application and 
                        reconsider the application beginning on the 
                        date that sufficient funds become available.
                            ``(iii) Notification.--Not later than 60 
                        days after funds become available regarding 
                        each pending application, the Secretary shall 
                        notify the applicant of the approval or 
                        disapproval of funding for the application.
            ``(4) Approvals on appeal.--If an application for a loan or 
        loan guarantee under this subtitle is disapproved by the 
        Secretary, but that action is subsequently reversed or revised 
        as the result of an appeal within the Department or to the 
        courts of the United States and the application is returned to 
        the Secretary for further consideration, the Secretary shall 
        act on the application and provide the applicant with notice of 
        the action not later than 15 days after the date of return of 
        the application to the Secretary.
            ``(5) Provision of proceeds.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), if an application for an insured loan 
                under this title is approved by the Secretary, the 
                Secretary shall provide the loan proceeds to the 
                applicant not later than 15 days (or such longer period 
                as the applicant may approve) after the application for 
                the loan is approved by the Secretary.
                    ``(B) Lack of funds.--If the Secretary is unable to 
                provide the loan proceeds to the applicant during the 
                15-day period described in subparagraph (A) because 
                sufficient funds are not available to the Secretary for 
                that purpose, the Secretary shall provide the loan 
                proceeds to the applicant as soon as practicable (but 
                in no event later than 15 days unless the applicant 
                agrees to a longer period) after sufficient funds for 
                that purpose become available to the Secretary.

``SEC. 3407. GRADUATION OF BORROWERS.

    ``(a) Graduation of Seasoned Direct Loan Borrowers to the Loan 
Guarantee Program.--
            ``(1) Review of loans.--
                    ``(A) In general.--The Secretary, or a contracting 
                third party, shall annually review under section 3420 
                the loans of each seasoned direct loan borrower.
                    ``(B) Assistance.--If, based on the review, it is 
                determined that a borrower would be able to obtain a 
                loan, guaranteed by the Secretary, from a commercial or 
                cooperative lender at reasonable rates and terms for 
                loans for similar purposes and periods of time, the 
                Secretary shall assist the borrower in applying for the 
                commercial or cooperative loan.
            ``(2) Prospectus.--
                    ``(A) In general.--In accordance with section 3422, 
                the Secretary shall prepare a prospectus on each 
                seasoned direct loan borrower determined eligible to 
                obtain a guaranteed loan.
                    ``(B) Requirements.--The prospectus shall contain a 
                description of the amounts of the loan guarantee and 
                interest assistance that the Secretary will provide to 
                the seasoned direct loan borrower to enable the 
                seasoned direct loan borrower to carry out a 
                financially viable farming plan if a guaranteed loan is 
                made.
            ``(3) Verification.--
                    ``(A) In general.--The Secretary shall provide a 
                prospectus of a seasoned direct loan borrower to each 
                approved lender whose lending area includes the 
                location of the seasoned direct loan borrower.
                    ``(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 receives 
                an offer from an approved lender to extend credit to 
                the seasoned direct loan borrower under terms and 
                conditions contained in the prospectus, the seasoned 
                direct loan borrower shall not be eligible for a loan 
                from the Secretary under chapter 1 or 2, except as 
                otherwise provided in this section.
            ``(4) Insufficient assistance or offers.--If the Secretary 
        is unable to provide loan guarantees and, if necessary, 
        interest assistance to the seasoned direct loan borrower under 
        this section in amounts sufficient to enable the seasoned 
        direct loan borrower to borrow from commercial sources the 
        amount required to carry out a financially viable farming plan, 
        or if the Secretary does not receive an offer from an approved 
        lender to extend credit to a seasoned direct loan borrower 
        under the terms and conditions contained in the prospectus, the 
        Secretary shall make a loan to the seasoned direct loan 
        borrower under chapter 1 or 2, whichever is applicable.
            ``(5) Interest rate reductions.--To the extent necessary 
        for the borrower to obtain a loan, guaranteed by the Secretary, 
        from a commercial or cooperative lender, the Secretary shall 
        provide interest rate reductions as provided for under section 
        3413.
    ``(b) Transition to Private Commercial or Other Sources of 
Credit.--
            ``(1) In general.--In making an operating or ownership 
        loan, the Secretary shall establish a plan and promulgate 
        regulations (including performance criteria) that promote the 
        goal of transitioning borrowers to private commercial credit 
        and other sources of credit in the shortest period of time 
        practicable.
            ``(2) Coordination.--In carrying out this section, the 
        Secretary shall integrate and coordinate the transition policy 
        described in subsection (a) with--
                    ``(A) the borrower training program established by 
                section 3419;
                    ``(B) the loan assessment process established by 
                section 3420;
                    ``(C) the supervised credit requirement established 
                by section 3421;
                    ``(D) the market placement program established by 
                section 3422; and
                    ``(E) other appropriate programs and authorities, 
                as determined by the Secretary.
    ``(c) Graduation of Borrowers With Operating Loans or Guarantees to 
Private Commercial Credit.--The Secretary shall establish a plan, in 
coordination with activities under sections 3419 through 3422, to 
encourage each borrower with an outstanding loan under this chapter, or 
with respect to whom there is an outstanding guarantee under this 
chapter, to graduate to private commercial or other sources of credit.

``SEC. 3408. DEBT ADJUSTMENT AND CREDIT COUNSELING.

    ``In carrying out this subtitle, the Secretary may--
            ``(1) provide voluntary debt adjustment assistance 
        between--
                    ``(A) farmers; and
                    ``(B) the creditors of the farmers;
            ``(2) cooperate with State, territorial, and local agencies 
        and committees engaged in the debt adjustment; and
            ``(3) give credit counseling.

``SEC. 3409. SECURITY SERVICING.

    ``(a) Sale of Property.--
            ``(1) In general.--Subject to this subsection and 
        subsection (e)(1), the Secretary shall offer to sell real 
        property that is acquired by the Secretary under this subtitle 
        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) Qualified beginning farmer.--
                            ``(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 a socially disadvantaged 
                        farmer at current market value based on a 
                        current appraisal.
                            ``(ii) Random selection.--If more than 1 
                        qualified beginning farmer or socially 
                        disadvantaged farmer 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 qualified beginning farmer or a socially 
                        disadvantaged farmer 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 a 
                socially disadvantaged farmer under subparagraph (B) 
                not later than 135 days after acquiring the real 
                property, the Secretary shall, not later than 30 days 
                after the 135-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) 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.
            ``(3) Other law.--Subtitle I of title 40, United States 
        Code, and title III of the Federal Property and Administrative 
        Services Act of 1949 (41 U.S.C. 251 et seq.) shall not apply to 
        any exercise of authority under this subtitle.
            ``(4) Lease of property.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may not lease any real property acquired 
                under this subtitle.
                    ``(B) Exception.--
                            ``(i) Qualified beginning farmer or 
                        socially disadvantaged farmer.--The Secretary 
                        may lease or contract to sell to a qualified 
                        beginning farmer or a socially disadvantaged 
                        farmer a farm acquired by the Secretary under 
                        this subtitle if the qualified beginning farmer 
                        qualifies for a credit sale or direct farm 
                        ownership loan under chapter 1 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 qualified beginning 
                        farmer or a socially disadvantaged farmer 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 qualified beginning farmer or 
                                socially disadvantaged farmer.
                            ``(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.
            ``(5) Expedited determination.--
                    ``(A) In general.--On the request of an applicant, 
                not later than 30 days after denial of the application, 
                the appropriate State director shall provide an 
                expedited review and determination of whether the 
                applicant is a qualified beginning farmer or a socially 
                disadvantaged farmer 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 qualified beginning farmers 
                                or socially disadvantaged farmers; 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 qualified beginning 
                        farmers or socially disadvantaged farmers or 
                        the disposing of real property in inventory.
    ``(b) Road and Utility Easements and Condemnations.--In the case of 
any real property administered under this subtitle, the Secretary may 
grant or sell easements or rights-of-way for roads, utilities, and 
other appurtenances that are not inconsistent with the public interest.
    ``(c) Sale or Lease of Farmland.--
            ``(1) Disposition of real property on indian 
        reservations.--
                    ``(A) Definition of indian reservation.--In this 
                paragraph, the term `Indian reservation' means--
                            ``(i) all land located within the limits of 
                        any Indian reservation under the jurisdiction 
                        of the United States, notwithstanding the 
                        issuance of any patent, and, including any 
                        right-of-way running through the reservation;
                            ``(ii) trust or restricted land located 
                        within the boundaries of a former reservation 
                        of an Indian tribe in the State of Oklahoma; or
                            ``(iii) all Indian allotments the Indian 
                        titles to which have not been extinguished if 
                        the allotments are subject to the jurisdiction 
                        of an Indian tribe.
                    ``(B) Disposition.--Except as provided in paragraph 
                (3), the Secretary shall dispose of or administer the 
                property as provided in this paragraph when--
                            ``(i) the Secretary acquires property under 
                        this subtitle that is located within an Indian 
                        reservation; and
                            ``(ii) the borrower-owner is the Indian 
                        tribe that has jurisdiction over the 
                        reservation in which the real property is 
                        located or the borrower-owner is a member of 
                        the Indian tribe;
                    ``(C) Priority.--Not later than 90 days after 
                acquiring the property, the Secretary shall afford an 
                opportunity to purchase or lease the real property in 
                accordance with the order of priority established under 
                subparagraph (D) to the Indian tribe having 
                jurisdiction over the Indian reservation within which 
                the real property is located or, if no order of 
                priority is established by the Indian tribe under 
                subparagraph (D), in the following order:
                            ``(i) An Indian member of the Indian tribe 
                        that has jurisdiction over the reservation 
                        within which the real property is located.
                            ``(ii) An Indian corporate entity.
                            ``(iii) The Indian tribe.
                    ``(D) Revision of priority and restriction of 
                eligibility.--The governing body of any Indian tribe 
                having jurisdiction over an Indian reservation may 
                revise the order of priority provided in subparagraph 
                (C) under which land located within the reservation 
                shall be offered for purchase or lease by the Secretary 
                under subparagraph (C) and may restrict the eligibility 
                for the purchase or lease to--
                            ``(i) persons who are members of the Indian 
                        tribe;
                            ``(ii) Indian corporate entities that are 
                        authorized by the Indian tribe to lease or 
                        purchase land within the boundaries of the 
                        reservation; or
                            ``(iii) the Indian tribe itself.
                    ``(E) Transfer of property to secretary of the 
                interior.--
                            ``(i) In general.--If real property 
                        described in subparagraph (B) is not purchased 
                        or leased under subparagraph (C) and the Indian 
                        tribe having jurisdiction over the reservation 
                        within which the real property is located is 
                        unable to purchase or lease the real property, 
                        the Secretary shall transfer the real property 
                        to the Secretary of the Interior who shall 
                        administer the real property as if the real 
                        property were held in trust by the United 
                        States for the benefit of the Indian tribe.
                            ``(ii) Use of rental income.--From the 
                        rental income derived from the lease of the 
                        transferred real property, and all other income 
                        generated from the transferred real property, 
                        the Secretary of the Interior shall pay the 
                        State, county, municipal, or other local taxes 
                        to which the transferred real property was 
                        subject at the time of acquisition by the 
                        Secretary, until the earlier of--
                                    ``(I) the expiration of the 4-year 
                                period beginning on the date on which 
                                the real property is so transferred; or
                                    ``(II) such time as the land is 
                                transferred into trust pursuant to 
                                subparagraph (H).
                    ``(F) Responsibilities of secretaries.--If any real 
                property is transferred to the Secretary of the 
                Interior under subparagraph (E)--
                            ``(i) the Secretary of Agriculture shall 
                        have no further responsibility under this title 
                        for--
                                    ``(I) collection of any amounts 
                                with regard to the farm program loan 
                                that had been secured by the real 
                                property;
                                    ``(II) any lien arising out of the 
                                loan transaction; or
                                    ``(III) repayment of any amount 
                                with regard to the loan transaction or 
                                lien to the Treasury of the United 
                                States; and
                            ``(ii) the Secretary of the Interior shall 
                        succeed to all right, title, and interest of 
                        the Secretary of Agriculture in the real estate 
                        arising from the farm program loan transaction, 
                        including the obligation to remit to the 
                        Treasury of the United States, in repayment of 
                        the original loan, the amounts provided in 
                        subparagraph (G).
                    ``(G) Use of income.--After the payment of any 
                taxes that are required to be paid under subparagraph 
                (E)(ii), all remaining rental income derived from the 
                lease of the real property transferred to the Secretary 
                of the Interior under subparagraph (E)(i), and all 
                other income generated from the real property 
                transferred to the Secretary of the Interior under that 
                subparagraph, shall be deposited as miscellaneous 
                receipts in the Treasury of the United States until the 
                amount deposited is equal to the lesser of--
                            ``(i) the amount of the outstanding lien of 
                        the United States against the real property, as 
                        of the date the real property was acquired by 
                        the Secretary;
                            ``(ii) the fair market value of the real 
                        property, as of the date of the transfer to the 
                        Secretary of the Interior; or
                            ``(iii) the capitalized value of the real 
                        property, as of the date of the transfer to the 
                        Secretary of the Interior.
                    ``(H) Holding of title in trust.--If the total 
                amount that is required to be deposited under 
                subparagraph (G) with respect to any real property has 
                been deposited into the Treasury of the United States, 
                title to the real property shall be held in trust by 
                the United States for the benefit of the Indian tribe 
                having jurisdiction over the Indian reservation within 
                which the real property is located.
                    ``(I) Payment of remaining lien or fair market 
                value of property.--
                            ``(i) In general.--Notwithstanding any 
                        other subparagraph of this paragraph, the 
                        Indian tribe having jurisdiction over the 
                        Indian reservation within which the real 
                        property described in subparagraph (B) is 
                        located may, at any time after the real 
                        property has been transferred to the Secretary 
                        of the Interior under subparagraph (E), offer 
                        to pay the remaining amount on the lien or the 
                        fair market value of the real property, 
                        whichever is less.
                            ``(ii) Effect of payment.--On payment of 
                        the amount, title to the real property shall be 
                        held by the United States in trust for the 
                        tribe and the trust or restricted land that has 
                        been acquired by the Secretary under 
                        foreclosure or voluntary transfer under a loan 
                        made or insured under this subtitle and 
                        transferred to an Indian person, entity, or 
                        tribe under this paragraph shall be considered 
                        to have never lost trust or restricted status.
                    ``(J) Applicability.--
                            ``(i) In general.--This paragraph shall 
                        apply to all land in the land inventory 
                        established under this subtitle (as of November 
                        28, 1990) that was (immediately prior to the 
                        date) owned by an Indian borrower-owner 
                        described in subparagraph (B) and that is 
                        situated within an Indian reservation, 
                        regardless of the date of foreclosure or 
                        acquisition by the Secretary.
                            ``(ii) Opportunity to purchase or lease.--
                        The Secretary shall afford an opportunity to an 
                        Indian person, entity, or tribe to purchase or 
                        lease the real property as provided in 
                        subparagraph (C).
                            ``(iii) Transfer.--If the right is not 
                        exercised or no expression of intent to 
                        exercise the right is received within 180 days 
                        after November 28, 1990, the Secretary shall 
                        transfer the real property to the Secretary of 
                        the Interior as provided in subparagraph (E).
            ``(2) Additional rights.--The rights provided in this 
        subsection shall be in addition to any right of first refusal 
        under the law of the State in which the property is located.
            ``(3) Disposition of real property on indian reservations 
        after procedures exhausted.--
                    ``(A) In general.--The Secretary shall dispose of 
                or administer real property described in paragraph 
                (1)(B) only as provided in paragraph (1), as modified 
                by this paragraph, if--
                            ``(i) the real property described in 
                        paragraph (1)(B) is located within an Indian 
                        reservation;
                            ``(ii) the borrower-owner is an Indian 
                        tribe that has jurisdiction over the 
                        reservation in which the real property is 
                        located or the borrower-owner is a member of an 
                        Indian tribe;
                            ``(iii) the borrower-owner has obtained a 
                        loan made or guaranteed under this title; and
                            ``(iv) the borrower-owner and the Secretary 
                        have exhausted all of the procedures provided 
                        for in this title to permit a borrower-owner to 
                        retain title to the real property, so that it 
                        is necessary for the borrower-owner to 
                        relinquish title.
                    ``(B) Notice of right to convey property.--The 
                Secretary shall provide the borrower-owner of real 
                property that is described in subparagraph (A) with 
                written notice of--
                            ``(i) the right of the borrower-owner to 
                        voluntarily convey the real property to the 
                        Secretary; and
                            ``(ii) the fact that real property so 
                        conveyed will be placed in the inventory of the 
                        Secretary.
                    ``(C) Notice of rights and protections.--The 
                Secretary shall provide the borrower-owner of the real 
                property with written notice of the rights and 
                protections provided under this title to the borrower-
                owner, and the Indian tribe that has jurisdiction over 
                the reservation in which the real property is located, 
                from foreclosure or liquidation of the real property, 
                including written notice--
                            ``(i) of paragraph (1), this paragraph, and 
                        subsection (e)(3);
                            ``(ii) if the borrower-owner does not 
                        voluntarily convey the real property to the 
                        Secretary, that--
                                    ``(I) the Secretary may foreclose 
                                on the property;
                                    ``(II) in the event of foreclosure, 
                                the property will be offered for sale;
                                    ``(III) the Secretary shall offer a 
                                bid for the property that is equal to 
                                the fair market value of the property 
                                or the outstanding principal and 
                                interest of the loan, whichever is 
                                higher;
                                    ``(IV) the property may be 
                                purchased by another party; and
                                    ``(V) if the property is purchased 
                                by another party, the property will not 
                                be placed in the inventory of the 
                                Secretary and the borrower-owner will 
                                forfeit the rights and protections 
                                provided under this title; and
                            ``(iii) of the opportunity of the borrower-
                        owner to consult with the Indian tribe that has 
                        jurisdiction over the reservation in which the 
                        real property is located or counsel to 
                        determine if State or tribal law provides 
                        rights and protections that are more beneficial 
                        than the rights and protections provided the 
                        borrower-owner under this title.
                    ``(D) Acceptance of voluntary conveyance.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the Secretary shall accept the 
                        voluntary conveyance of real property described 
                        in subparagraph (A).
                            ``(ii) Hazardous substances.--If a 
                        hazardous substance (as defined in section 
                        101(14) of the Comprehensive Environmental 
                        Response, Compensation, and Liability Act of 
                        1980 (42 U.S.C. 9601(14))) is located on the 
                        property and the Secretary takes remedial 
                        action to protect human health or the 
                        environment if the property is taken into 
                        inventory, the Secretary shall accept the 
                        voluntary conveyance of the property only if 
                        the Secretary determines that the conveyance is 
                        in the best interests of the Federal 
                        Government.
                    ``(E) Foreclosure procedures.--
                            ``(i) Notice to borrower.--If an Indian 
                        borrower-owner does not voluntarily convey to 
                        the Secretary real property described in 
                        subparagraph (A), not less than 30 days before 
                        a foreclosure sale of the property, the 
                        Secretary shall provide the Indian borrower-
                        owner with the option of--
                                    ``(I) 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
                                    ``(II) 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 assume the loan 
                                under the terms specified in clause 
                                (iii).
                            ``(ii) Notice to tribe.--If an Indian 
                        borrower-owner does not voluntarily convey to 
                        the Secretary real property described in 
                        subparagraph (A), 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--
                                    ``(I) the sale;
                                    ``(II) the fair market value of the 
                                property; and
                                    ``(III) the requirements of this 
                                paragraph.
                            ``(iii) Assumed loans.--If an Indian tribe 
                        assumes a loan under clause (i)--
                                    ``(I) the Secretary shall not 
                                foreclose the loan because of any 
                                default that occurred prior to the date 
                                of the assumption;
                                    ``(II) 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
                                    ``(III) the loan shall be treated 
                                as though the loan was made under 
                                Public Law 91-229 (25 U.S.C. 488 et 
                                seq.).
                    ``(F) Amount of bid by secretary.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), at a foreclosure sale of real 
                        property described in subparagraph (A), the 
                        Secretary shall offer a bid for the property 
                        that is equal to the higher of--
                                    ``(I) the fair market value of the 
                                property; or
                                    ``(II) the outstanding principal 
                                and interest on the loan.
                            ``(ii) Hazardous substances.--If a 
                        hazardous substance (as defined in section 
                        101(14) of the Comprehensive Environmental 
                        Response, Compensation, and Liability Act of 
                        1980 (42 U.S.C. 9601(14))) is located on the 
                        property and the Secretary takes remedial 
                        action to protect human health or the 
                        environment if the property is taken into 
                        inventory, clause (i) shall apply only if the 
                        Secretary determines that bidding is in the 
                        best interests of the Federal Government.
            ``(4) Detrimental effect on value of area farmland.--The 
        Secretary shall not offer for sale or sell any farmland 
        referred to in paragraphs (1) through (3) if placing the 
        farmland on the market will have a detrimental effect on the 
        value of farmland in the area.
            ``(5) Installment sales and multiple operators.--
                    ``(A) In general.--The Secretary may sell farmland 
                administered under this title through an installment 
                sale or similar device that contains such terms as the 
                Secretary considers necessary to protect the investment 
                of the Federal Government in the land.
                    ``(B) Sale of contract.--The Secretary may 
                subsequently sell any contract entered into to carry 
                out subparagraph (A).
            ``(6) Highly erodible land.--In the case of farmland 
        administered under this title that is highly erodible land (as 
        defined in section 1201 of the Food Security Act of 1985 (16 
        U.S.C. 3801)), the Secretary may require the use of specified 
        conservation practices on the land as a condition of the sale 
        or lease of the land.
            ``(7) No effect on acreage allotments, marketing quotas, or 
        acreage bases.--Notwithstanding any other law, compliance by 
        the Secretary with this subsection shall not cause any acreage 
        allotment, marketing quota, or acreage base assigned to the 
        property to lapse, terminate, be reduced, or otherwise be 
        adversely affected.
            ``(8) No preemption of state law.--If a conflict exists 
        between any provision of this subsection and any provision of 
        the law of any State providing a right of first refusal to the 
        owner of farmland or the operator of a farm before the sale or 
        lease of land to any other person, the provision of State law 
        shall prevail.
    ``(d) Release of Normal Income Security.--
            ``(1) Definition of normal income security.--In this 
        subsection:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `normal income security' 
                means all security not considered basic security, 
                including crops, livestock, poultry products, Farm 
                Service Agency payments and Commodity Credit 
                Corporation payments, and other property covered by 
                Farm Service Agency liens that is sold in conjunction 
                with the operation of a farm or other business.
                    ``(B) Exceptions.--The term `normal income 
                security' does not include any equipment (including 
                fixtures in States that have adopted the Uniform 
                Commercial Code), or foundation herd or flock, that 
                is--
                            ``(i) the basis of the farming or other 
                        operation; and
                            ``(ii) the basic security for a farmer 
                        program loan.
            ``(2) General release.--The Secretary shall release from 
        the normal income security provided for a loan an amount 
        sufficient to pay for the essential household and farm 
        operating expenses of the borrower, until such time as the 
        Secretary accelerates the loan.
            ``(3) Notice of reporting requirements and rights.--If a 
        borrower is required to plan for or to report as to how 
        proceeds from the sale of collateral property will be used, the 
        Secretary shall notify the borrower of--
                    ``(A) the requirement; and
                    ``(B) the right to the release of funds under this 
                subsection and the means by which a request for the 
                funds may be made.
    ``(e) Easements on Inventoried Property.--
            ``(1) In general.--Subject to paragraph (2), in the 
        disposal of real property under this section, the Secretary 
        shall establish perpetual wetland conservation easements to 
        protect and restore wetland or converted wetland that exists on 
        inventoried property.
            ``(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--
                            ``(i) beginning on the date that is 5 years 
                        before the property entered the inventory of 
                        the Secretary; and
                            ``(ii) ending on the date on which the 
                        property entered the inventory of the 
                        Secretary.
            ``(3) Notification.--The Secretary shall provide prior 
        written notification to a borrower considering homestead 
        retention that a wetland conservation easement may be placed on 
        land for which the borrower is negotiating a lease option.
            ``(4) Appraised value.--The appraised value of the farm 
        shall reflect the value of the land due to the placement of 
        wetland conservation easements.

``SEC. 3410. CONTRACTS ON LOAN SECURITY PROPERTIES.

    ``(a) Contracts on Loan Security Properties.--Subject to subsection 
(b), the Secretary may enter into a contract related to real property 
for conservation, recreation, or wildlife purposes.
    ``(b) Limitations.--The Secretary may enter into a contract under 
subsection (a) if--
            ``(1) the property is wetland, upland, or highly erodible 
        land;
            ``(2) the property is determined by the Secretary to be 
        suitable for the purpose involved; and
            ``(3)(A) the property secures a loan made under a law 
        administered and held by the Secretary; and
            ``(B) the contract would better enable a qualified borrower 
        to repay the loan in a timely manner, as determined by the 
        Secretary.
    ``(c) Terms and Conditions.--The terms and conditions specified in 
a contract under subsection (a) shall--
            ``(1) specify the purposes for which the real property may 
        be used;
            ``(2) identify any conservation measure to be taken, and 
        any recreational and wildlife use to be allowed, with respect 
        to the real property; and
            ``(3) require the owner to permit the Secretary, and any 
        person or governmental entity designated by the Secretary, to 
        have access to the real property for the purpose of monitoring 
        compliance with the contract.
    ``(d) Reduction or Forgiveness of Debt.--
            ``(1) In general.--Subject to this section, the Secretary 
        may reduce or forgive the outstanding debt of a borrower--
                    ``(A) in the case of a borrower to whom the 
                Secretary has made an outstanding loan under a law 
                administered by the Secretary, by canceling that part 
                of the aggregate amount of the outstanding loan that 
                bears the same ratio to the aggregate amount as--
                            ``(i) the number of acres of the real 
                        property of the borrower that are subject to 
                        the contract; bears to
                            ``(ii) the aggregate number of acres 
                        securing the loan; or
                    ``(B) in any other case, by treating as prepaid 
                that part of the principal amount of a new loan to the 
                borrower issued and held by the Secretary under a law 
                administered by the Secretary that bears the same ratio 
                to the principal amount as--
                            ``(i) the number of acres of the real 
                        property of the borrower that are subject to 
                        the contract; bears to
                            ``(ii) the aggregate number of acres 
                        securing the new loan.
            ``(2) Maximum canceled amount.--The amount canceled or 
        treated as prepaid under paragraph (1) shall not exceed--
                    ``(A) in the case of a delinquent loan, the greater 
                of--
                            ``(i) the value of the land on which the 
                        contract is entered into; or
                            ``(ii) the difference between--
                                    ``(I) the amount of the outstanding 
                                loan secured by the land; and
                                    ``(II) the value of the land; or
                    ``(B) in the case of a nondelinquent loan, 33 
                percent of the amount of the loan secured by the land.
    ``(e) Consultation With Fish and Wildlife Service.--If the 
Secretary uses the authority provided by this section, the Secretary 
shall consult with the Director of the Fish and Wildlife Service for 
the purposes of--
            ``(1) selecting real property in which the Secretary may 
        enter into a contract under this section;
            ``(2) formulating the terms and conditions of the contract; 
        and
            ``(3) enforcing the contract.
    ``(f) Enforcement.--The Secretary, and any person or governmental 
entity designated by the Secretary, may enforce a contract entered into 
by the Secretary under this section.

``SEC. 3411. DEBT RESTRUCTURING AND LOAN SERVICING.

    ``(a) In General.--The Secretary shall modify a delinquent farmer 
program loan made under this subtitle, or purchased from the lender or 
the Federal Deposit Insurance Corporation under section 3902, to the 
maximum extent practicable--
            ``(1) to avoid a loss to the Secretary on the loan, with 
        priority consideration being placed on writing-down the loan 
        principal and interest (subject to subsections (d) and (e)), 
        and debt set-aside (subject to subsection (e)), to facilitate 
        keeping the borrower on the farm, or otherwise through the use 
        of primary loan service programs under this section; and
            ``(2) to ensure that a borrower is able to continue farming 
        operations.
    ``(b) Eligibility.--To be eligible to obtain assistance under 
subsection (a)--
            ``(1) the delinquency shall be due to a circumstance beyond 
        the control of the borrower, as defined in regulations issued 
        by the Secretary, except that the regulations shall require 
        that, if the value of the assets calculated under subsection 
        (c)(2)(A)(ii) that may be realized through liquidation or other 
        methods would produce enough income to make the delinquent loan 
        current, the borrower shall not be eligible for assistance 
        under subsection (a);
            ``(2) the borrower shall have acted in good faith with the 
        Secretary in connection with the loan as defined in regulations 
        issued by the Secretary;
            ``(3) the borrower shall present a preliminary plan to the 
        Secretary that contains reasonable assumptions that demonstrate 
        that the borrower will be able--
                    ``(A) to meet the necessary family living and farm 
                operating expenses of the borrower; and
                    ``(B) to service all debts of the borrower, 
                including restructured loans; and
            ``(4) the loan, if restructured, shall result in a net 
        recovery to the Federal Government, during the term of the loan 
        as restructured, that would be more than or equal to the net 
        recovery to the Federal Government from an involuntary 
        liquidation or foreclosure on the property securing the loan.
    ``(c) Restructuring Determinations.--
            ``(1) Determination of net recovery.--In determining the 
        net recovery from the involuntary liquidation of a loan under 
        this section, the Secretary shall calculate--
                    ``(A) the recovery value of the collateral securing 
                the loan, in accordance with paragraph (2); and
                    ``(B) the value of the restructured loan, in 
                accordance with paragraph (3).
            ``(2) Recovery value.--For the purpose of paragraph (1), 
        the recovery value of the collateral securing the loan shall be 
        based on the difference between--
                    ``(A)(i) the amount of the current appraised value 
                of the interests of the borrower in the property 
                securing the loan; and
                    ``(ii) the value of the interests of the borrower 
                in all other assets that are--
                            ``(I) not essential for necessary family 
                        living expenses;
                            ``(II) not essential to the operation of 
                        the farm; and
                            ``(III) not exempt from judgment creditors 
                        or in a bankruptcy action under Federal or 
                        State law;
                    ``(B) the estimated administrative, attorney, and 
                other expenses associated with the liquidation and 
                disposition of the loan and collateral, including--
                            ``(i) the payment of prior liens;
                            ``(ii) taxes and assessments, depreciation, 
                        management costs, the yearly percentage 
                        decrease or increase in the value of the 
                        property, and lost interest income, each 
                        calculated for the average holding period for 
                        the type of property involved;
                            ``(iii) resale expenses, such as repairs, 
                        commissions, and advertising; and
                            ``(iv) other administrative and attorney 
                        costs; and
                    ``(C) the value, as determined by the Secretary, of 
                any property not included in subparagraph (A)(i) if the 
                property is specified in any security agreement with 
                respect to the loan and the Secretary determines that 
                the value of the property should be included for 
                purposes of this section.
            ``(3) Value of the restructured loan.--
                    ``(A) In general.--For the purpose of paragraph 
                (1), the value of the restructured loan shall be based 
                on the present value of payments that the borrower 
                would make to the Federal Government if the terms of 
                the loan were modified under any combination of primary 
                loan service programs to ensure that the borrower is 
                able to meet the obligations and continue farming 
                operations.
                    ``(B) Present value.--For the purpose of 
                calculating the present value referred to in 
                subparagraph (A), the Secretary shall use a discount 
                rate of not more than the current rate at the time of 
                the calculation of 90-day Treasury bills.
                    ``(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.
            ``(4) Notification.--Not later than 90 days after receipt 
        of a written request for restructuring from the borrower, the 
        Secretary shall--
                    ``(A) make the calculations specified in paragraphs 
                (2) and (3);
                    ``(B) notify the borrower in writing of the results 
                of the calculations; and
                    ``(C) provide documentation for the calculations.
            ``(5) Restructuring of loans.--
                    ``(A) In general.--If the value of a restructured 
                loan is greater than or equal to the recovery value of 
                the collateral securing the loan, not later than 45 
                days after notifying the borrower under paragraph (4), 
                the Secretary shall offer to restructure the loan 
                obligations of the borrower under this subtitle through 
                primary loan service programs that would enable the 
                borrower to meet the obligations (as modified) under 
                the loan and to continue the farming operations of the 
                borrower.
                    ``(B) Restructuring.--If the borrower accepts an 
                offer under subparagraph (A), not later than 45 days 
                after receipt of notice of acceptance, the Secretary 
                shall restructure the loan accordingly.
            ``(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.
            ``(7) Negotiation of appraisal.--
                    ``(A) In general.--In making a determination 
                concerning restructuring under this subsection, the 
                Secretary, at the request of the borrower, shall enter 
                into negotiations with the borrower concerning 
                appraisals required under this subsection.
                    ``(B) Independent appraisal.--
                            ``(i) In general.--If the borrower, based 
                        on a separate current appraisal, objects to the 
                        decision of the Secretary regarding an 
                        appraisal, the borrower and the Secretary shall 
                        mutually agree, to the extent practicable, on 
                        an independent appraiser who shall conduct 
                        another appraisal of the property of the 
                        borrower.
                            ``(ii) Value of final appraisal.--The 
                        average of the 2 appraisals under clause (i) 
                        that are closest in value shall become the 
                        final appraisal under this paragraph.
                            ``(iii) Cost of appraisal.--The borrower 
                        and the Secretary shall each pay \1/2\ of the 
                        cost of any independent appraisal.
    ``(d) Principal and Interest Write-down.--
            ``(1) In general.--
                    ``(A) Priority consideration.--In selecting the 
                restructuring alternatives to be used in the case of a 
                borrower who has requested restructuring under this 
                section, the Secretary shall give priority 
                consideration to the use of a principal and interest 
                write-down if other creditors of the borrower (other 
                than any creditor who is fully collateralized) 
                representing a substantial portion of the total debt of 
                the borrower held by the creditors of the borrower, 
                agree to participate in the development of the 
                restructuring plan or agree to participate in a State 
                mediation program.
                    ``(B) Failure of creditors to agree.--Failure of 
                creditors to agree to participate in the restructuring 
                plan or mediation program shall not preclude the use of 
                a principal and interest write-down by the Secretary if 
                the Secretary determines that restructuring results in 
                the least cost to the Secretary.
            ``(2) Participation of creditors.--Before eliminating the 
        option to use debt write-down in the case of a borrower, the 
        Secretary shall make a reasonable effort to contact the 
        creditors of the borrower, either directly or through the 
        borrower, and encourage the creditors to participate with the 
        Secretary in the development of a restructuring plan for the 
        borrower.
    ``(e) Shared Appreciation Arrangements.--
            ``(1) In general.--As a condition of restructuring a loan 
        in accordance with this section, the borrower of the loan may 
        be required to enter into a shared appreciation arrangement 
        that requires the repayment of amounts written off or set 
        aside.
            ``(2) Terms.--A shared appreciation agreement shall--
                    ``(A) have a term not to exceed 10 years; and
                    ``(B) provide for recapture based on the difference 
                between the appraised values of the real security 
                property at the time of restructuring and at the time 
                of recapture.
            ``(3) Percentage of recapture.--The amount of the 
        appreciation to be recaptured by the Secretary shall be--
                    ``(A) 75 percent of the appreciation in the value 
                of the real security property if the recapture occurs 
                not later than 4 years after the date of restructuring; 
                and
                    ``(B) 50 percent if the recapture occurs during the 
                remainder of the term of the agreement.
            ``(4) Time of recapture.--Recapture shall take place on the 
        date that is the earliest of--
                    ``(A) the end of the term of the agreement;
                    ``(B) the conveyance of the real security property;
                    ``(C) the repayment of the loans; or
                    ``(D) the cessation of farming operations by the 
                borrower.
            ``(5) Transfer of title.--Transfer of title to the spouse 
        of a borrower on the death of the borrower shall not be treated 
        as a conveyance for the purpose of paragraph (4).
            ``(6) Notice of recapture.--Not later than 12 months before 
        the end of the term of a shared appreciation arrangement, the 
        Secretary shall notify the borrower involved of the provisions 
        of the arrangement.
            ``(7) Financing of recapture payment.--
                    ``(A) In general.--The Secretary may amortize a 
                recapture payment owed to the Secretary under this 
                subsection.
                    ``(B) Term.--The term of an amortization under this 
                paragraph may not exceed 25 years.
                    ``(C) Interest rate.--The interest rate applicable 
                to an amortization under this paragraph may not exceed 
                the rate applicable to a loan to reacquire homestead 
                property less 100 basis points.
                    ``(D) Reamortization.--
                            ``(i) In general.--The Secretary may modify 
                        the amortization of a recapture payment 
                        referred to in subparagraph (A) of this 
                        paragraph on which a payment has become 
                        delinquent if--
                                    ``(I) the default is due to 
                                circumstances beyond the control of the 
                                borrower; and
                                    ``(II) the borrower acted in good 
                                faith (as determined by the Secretary) 
                                in attempting to repay the recapture 
                                amount.
                            ``(ii) Limitations.--
                                    ``(I) Term of reamortization.--The 
                                term of a reamortization under this 
                                subparagraph may not exceed 25 years 
                                from the date of the original 
                                amortization agreement.
                                    ``(II) No reduction or principal or 
                                unpaid interest due.--A reamortization 
                                of a recapture payment under this 
                                subparagraph may not provide for 
                                reducing the outstanding principal or 
                                unpaid interest due on the recapture 
                                payment.
    ``(f) Interest Rates.--Any loan for farm ownership purposes, farm 
operating purposes, or disaster emergency purposes, other than a 
guaranteed loan, that is deferred, consolidated, rescheduled, or 
reamortized shall, notwithstanding any other provision of this 
subtitle, bear interest on the balance of the original loan and for the 
term of the original loan at a rate that is the lowest of--
            ``(1) the rate of interest on the original loan;
            ``(2) the rate being charged by the Secretary for loans, 
        other than guaranteed loans, of the same type at the time at 
        which the borrower applies for a deferral, consolidation, 
        rescheduling, or reamortization; or
            ``(3) the rate being charged by the Secretary for loans, 
        other than guaranteed loans, of the same type at the time of 
        the deferral, consolidation, rescheduling, or reamortization.
    ``(g) Period and Effect.--
            ``(1) Period.--The Secretary may consolidate or reschedule 
        outstanding loans for payment over a period not to exceed 7 
        years (or, in the case of loans for farm operating purposes, 15 
        years) from the date of the consolidation or rescheduling.
            ``(2) Effect.--The amount of unpaid principal and interest 
        of the prior loans so consolidated or rescheduled shall not 
        create a new charge against any loan levels authorized by law.
    ``(h) Prerequisites to Foreclosure or Liquidation.--No foreclosure 
or other similar action shall be taken to liquidate any loan determined 
to be ineligible for restructuring by the Secretary under this 
section--
            ``(1) until the borrower has been given the opportunity to 
        appeal the decision; and
            ``(2) if the borrower appeals, the appeals process has been 
        completed, and a determination has been made that the loan is 
        ineligible for restructuring.
    ``(i) Notice of Ineligibility for Restructuring.--
            ``(1) In general.--A notice of ineligibility for 
        restructuring shall be sent to the borrower by registered or 
        certified mail not later than 15 days after a determination of 
        ineligibility.
            ``(2) Contents.--The notice required under paragraph (1) 
        shall contain--
                    ``(A) the determination and the reasons for the 
                determination;
                    ``(B) the computations used to make the 
                determination, including the calculation of the 
                recovery value of the collateral securing the loan; and
                    ``(C) a statement of the right of the borrower to 
                appeal the decision to the appeals division, and to 
                appear before a hearing officer.
    ``(j) Independent Appraisals.--
            ``(1) In general.--An appeal may include a request by the 
        borrower for an independent appraisal of any property securing 
        the loan.
            ``(2) Process for appraisal.--On a request under paragraph 
        (1), the Secretary shall present the borrower with a list of 3 
        appraisers approved by the county supervisor, from which the 
        borrower shall select an appraiser to conduct the appraisal.
            ``(3) Cost.--The cost of an appraisal under this subsection 
        shall be paid by the borrower.
            ``(4) Result.--The result of an appraisal under this 
        subsection shall be considered in any final determination 
        concerning the loan.
            ``(5) Copy.--A copy of any appraisal under this subsection 
        shall be provided to the borrower.
    ``(k) Partial Liquidations.--If a partial liquidation of a 
delinquent loan is performed (with the prior consent of the Secretary) 
as part of loan servicing by a guaranteed lender under this title, the 
Secretary shall not require full liquidation of the loan for the lender 
to be eligible to receive payment on losses.
    ``(l) Only 1 Write-down or Net Recovery Buy-out Per Borrower for a 
Loan Made After January 6, 1988.--
            ``(1) In general.--The Secretary may provide for each 
        borrower not more than 1 write-down or net recovery buy-out 
        under this section with respect to all loans made to the 
        borrower after January 6, 1988.
            ``(2) Special rule.--For purposes of paragraph (1), the 
        Secretary shall treat any loan made on or before January 6, 
        1988, with respect to which a restructuring, write-down, or net 
        recovery buy-out is provided under this section after January 
        6, 1988, as a loan made after January 6, 1988.
    ``(m) Liquidation of Assets.--The Secretary may not use the 
authority provided by this section to reduce or terminate any portion 
of the debt of the borrower that the borrower could pay through the 
liquidation of assets (or through the payment of the loan value of the 
assets, if the loan value is greater than the liquidation value) 
described in subsection (c)(2)(A)(ii).
    ``(n) Lifetime Limitation on Debt Forgiveness Per Borrower.--The 
Secretary may provide each borrower not more than $300,000 in debt 
forgiveness under this section.

``SEC. 3412. RELIEF FOR MOBILIZED MILITARY RESERVISTS FROM CERTAIN 
              AGRICULTURAL LOAN OBLIGATIONS.

    ``(a) Definition of Mobilized Military Reservist.--In this section, 
the term `mobilized military reservist' means an individual who--
            ``(1) is on active duty under section 688, 12301(a), 
        12301(g), 12302, 12304, 12306, or 12406, or chapter 15 of title 
        10, United States Code, or any other provision of law during a 
        war or during a national emergency declared by the President or 
        Congress, regardless of the location at which the active duty 
        service is performed; or
            ``(2) in the case of a member of the National Guard, is on 
        full-time National Guard duty (as defined in section 101(d)(5) 
        of title 10, United States Code) under a call to active service 
        authorized by the President or the Secretary of Defense for a 
        period of more than 30 consecutive days under section 502(f) of 
        title 32, United States Code, for purposes of responding to a 
        national emergency declared by the President and supported by 
        Federal funds.
    ``(b) Forgiveness of Interest Payments Due While Borrower Is a 
Mobilized Military Reservist.--Any requirement that a borrower of a 
direct loan made under this subtitle make any interest payment on the 
loan that would otherwise be required to be made while the borrower is 
a mobilized military reservist is rescinded.
    ``(c) Deferral of Principal Payments Due While or After Borrower Is 
a Mobilized Military Reservist.--The due date of any payment of 
principal on a direct loan made to a borrower under this subtitle that 
would otherwise be required to be made while or after the borrower is a 
mobilized military reservist is deferred for a period equal in length 
to the period for which the borrower is a mobilized military reservist.
    ``(d) Nonaccrual of Interest.--Interest on a direct loan made to a 
borrower described in this section shall not accrue during the period 
the borrower is a mobilized military reservist.
    ``(e) Borrower Not Considered To Be Delinquent or Receiving Debt 
Forgiveness.--Notwithstanding section 3425 or any other provision of 
this title, a borrower who receives assistance under this section shall 
not, as a result of the assistance, be considered to be delinquent or 
receiving debt forgiveness for purposes of receiving a direct or 
guaranteed loan under this subtitle.

``SEC. 3413. INTEREST RATE REDUCTION PROGRAM.

    ``(a) Establishment of Program.--The Secretary shall establish and 
carry out in accordance with this section an interest rate reduction 
program for any loan guaranteed under this subtitle.
    ``(b) Entering Into Contracts.--The Secretary shall enter into a 
contract with, and make payments to, an institution to reduce, during 
the term of the contract, the interest rate paid by the borrower on the 
guaranteed loan if--
            ``(1) the borrower--
                    ``(A) is unable to obtain credit elsewhere;
                    ``(B) is unable to make payments on the loan in a 
                timely manner; and
                    ``(C) during the 24-month period beginning on the 
                date on which the contract is entered into, has a total 
                estimated cash income, including all farm and nonfarm 
                income, that will equal or exceed the total estimated 
                cash expenses, including all farm and nonfarm expenses, 
                to be incurred by the borrower during the period; and
            ``(2) during the term of the contract, the lender reduces 
        the annual rate of interest payable on the loan by a minimum 
        percentage specified in the contract.
    ``(c) Payments.--
            ``(1) In general.--Subject to paragraph (2), in return for 
        a contract entered into by a lender under subsection (b) for 
        the reduction of the interest rate paid on a loan, the 
        Secretary shall make payments to the lender in an amount equal 
        to not more than 100 percent of the cost of reducing the annual 
        rate of interest payable on the loan.
            ``(2) Limitation.--Payments under paragraph (1) may not 
        exceed the cost of reducing the rate by more than 400 basis 
        points.
    ``(d) Term.--The term of a contract entered into under this section 
to reduce the interest rate on a guaranteed loan may not exceed the 
outstanding term of the loan.
    ``(e) Condition on Foreclosure.--Notwithstanding any other law, any 
contract of guarantee on a farm loan entered into under this subtitle 
shall contain a condition that the lender of the loan may not initiate 
a foreclosure action on the loan until 60 days after a determination is 
made with respect to the eligibility of the borrower to participate in 
the program established under this section.

``SEC. 3414. HOMESTEAD PROPERTY.

    ``(a) Definitions.--In this section:
            ``(1) Administrator.--The term `Administrator' means the 
        Administrator of the Small Business Administration.
            ``(2) Borrower-owner.--The term `borrower-owner' means--
                    ``(A) a borrower-owner of a loan made or guaranteed 
                by the Secretary or the Administrator who meets the 
                eligibility requirements of subsection (c)(1); or
                    ``(B) in a case in which an owner of homestead 
                property pledged the property to secure the loan and 
                the owner is different than the borrower, the owner.
            ``(3) Farm program loan.--The term `farm program loan' 
        means a loan made by the Administrator under the Small Business 
        Act (15 U.S.C. 631 et seq.) for any of the purposes authorized 
        for loans under chapter 1 or 2.
            ``(4) Homestead property.--The term `homestead property' 
        means--
                    ``(A) the principal residence and adjoining 
                property possessed and occupied by a borrower-owner, 
                including a reasonable number of farm outbuildings 
                located on the adjoining land that are useful to any 
                occupant of the homestead; and
                    ``(B) not more than 10 acres of adjoining land that 
                is used to maintain the family of the borrower-owner.
    ``(b) Retention of Homestead Property.--
            ``(1) In general.--The Secretary or the Administrator 
        shall, on application by a borrower-owner who meets the 
        eligibility requirements of subsection (c)(1), permit the 
        borrower-owner to retain possession and occupancy of homestead 
        property under the terms set forth, and until the action 
        described in this section has been completed, if--
                    ``(A) the Secretary forecloses or takes into 
                inventory property securing a loan made under this 
                subtitle;
                    ``(B) the Administrator forecloses or takes into 
                inventory property securing a farm program loan made 
                under the Small Business Act (15 U.S.C. 631 et seq.); 
                or
                    ``(C) the borrower-owner of a loan made by the 
                Secretary or the Administrator files a petition in 
                bankruptcy that results in the conveyance of the 
                homestead property to the Secretary or the 
                Administrator, or agrees to voluntarily liquidate or 
                convey the property in whole or in part.
            ``(2) Period of occupancy.--Subject to subsection (c), the 
        Secretary or the Administrator shall not grant a period of 
        occupancy of less than 3 nor more than 5 years.
    ``(c) Eligibility.--
            ``(1) In general.--To be eligible to occupy homestead 
        property, a borrower-owner of a loan made by the Secretary or 
        the Administrator shall--
                    ``(A) apply for the occupancy not later than 30 
                days after the property is acquired by the Secretary or 
                Administrator;
                    ``(B) have received from farming operations gross 
                farm income that is reasonably commensurate with--
                            ``(i) the size and location of the farming 
                        unit of the borrower-owner; and
                            ``(ii) local agricultural conditions 
                        (including natural and economic conditions), 
                        during at least 2 calendar years of the 6-year 
                        period preceding the calendar year in which the 
                        application is made;
                    ``(C) have received from farming operations at 
                least 60 percent of the gross annual income of the 
                borrower-owner and any spouse of the borrower-owner 
                during at least 2 calendar years of the 6-year period 
                described in subparagraph (B);
                    ``(D) have continuously occupied the homestead 
                property during the 6-year period described in 
                subparagraph (B), except that the requirement of this 
                subparagraph may be waived if a borrower-owner, due to 
                circumstances beyond the control of the borrower-owner, 
                had to leave the homestead property for a period of 
                time not to exceed 12 months during the 6-year period;
                    ``(E) during the period of occupancy of the 
                homestead property, pay a reasonable sum as rent for 
                the property to the Secretary or the Administrator in 
                an amount substantially equivalent to rents charged for 
                similar residential properties in the area in which the 
                homestead property is located;
                    ``(F) during the period of the occupancy of the 
                homestead property, maintain the property in good 
                condition; and
                    ``(G) meet such other reasonable and necessary 
                terms and conditions as the Secretary may require.
            ``(2) Definition of farming operations.--In subparagraphs 
        (B) and (C) of paragraph (1), the term `farming operations' 
        includes rent paid by a lessee of agricultural land during a 
        period in which the borrower-owner, due to circumstances beyond 
        the control of the borrower-owner, is unable to actively farm 
        the land.
            ``(3) Termination of rights.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(E), the failure of the borrower-owner to make a 
                timely rental payment shall constitute cause for the 
                termination of all rights of the borrower-owner to 
                possession and occupancy of the homestead property 
                under this section.
                    ``(B) Procedure for termination.--In effecting a 
                termination under subparagraph (A), the Secretary 
                shall--
                            ``(i) afford the borrower-owner or lessee 
                        the notice and hearing procedural rights 
                        described in subtitle H of the Department of 
                        Agriculture Reorganization Act of 1994 (7 
                        U.S.C. 6991 et seq.); and
                            ``(ii) comply with any applicable State and 
                        local law governing eviction of a person from 
                        residential property.
            ``(4) Rights of borrower-owner.--
                    ``(A) Period of occupancy.--Subject to subsection 
                (b)(2), the period of occupancy allowed the borrower-
                owner of homestead property under this section shall be 
                the period requested in writing by the borrower-owner.
                    ``(B) Right to reacquire.--
                            ``(i) In general.--During the period the 
                        borrower-owner occupies the homestead property, 
                        the borrower-owner shall have a right to 
                        reacquire the homestead property on such terms 
                        and conditions as the Secretary shall 
                        determine.
                            ``(ii) Socially disadvantaged borrower-
                        owner.--During the period of occupancy of a 
                        borrower-owner who is a socially disadvantaged 
                        farmer, the borrower-owner or a member of the 
                        immediate family of the borrower-owner shall 
                        have a right of first refusal to reacquire the 
                        homestead property on such terms and conditions 
                        as the Secretary shall determine.
                            ``(iii) Independent appraisal.--The 
                        Secretary may not demand a payment for the 
                        homestead property that is in excess of the 
                        current market value of the homestead property 
                        as established by an independent appraisal.
                            ``(iv) Conduct of appraisal.--An 
                        independent appraisal under clause (iii) shall 
                        be conducted by an appraiser selected by the 
                        borrower-owner, or, in the case of a borrower-
                        owner who is a socially disadvantaged farmer, 
                        the immediate family member of the borrower-
                        owner, from a list of 3 appraisers approved by 
                        the county supervisor.
            ``(5) Transfer of rights.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), no right of a borrower-owner under 
                this section, and no agreement entered into between the 
                borrower-owner and the Secretary for occupancy of the 
                homestead property, shall be transferable or assignable 
                by the borrower-owner or by operation of law.
                    ``(B) Death or incompetency.--In the case of death 
                or incompetency of the borrower-owner, the right and 
                agreement shall be transferable to a spouse of the 
                borrower-owner if the spouse agrees to comply with any 
                terms and conditions of the right or agreement.
            ``(6) Notification.--Not later than the date of acquisition 
        of the property securing a loan made under this title, the 
        Secretary shall notify the borrower-owner of the property of 
        the availability of homestead protection rights under this 
        section.
    ``(d) End of Period of Occupancy.--
            ``(1) In general.--At the end of the period of occupancy 
        allowed a borrower-owner under subsection (c), the Secretary or 
        the Administrator shall grant to the borrower-owner a right of 
        first refusal to reacquire the homestead property on such terms 
        and conditions (which may include payment of principal in 
        installments) as the Secretary or the Administrator shall 
        determine.
            ``(2) Terms and conditions.--The terms and conditions 
        granted under paragraph (1) may not be less favorable than 
        those offered by the Secretary or Administrator or intended by 
        the Secretary or Administrator to be offered to any other 
        buyer.
    ``(e) Maximum Payment of Principal.--
            ``(1) In general.--At the time a reacquisition agreement is 
        entered into, the Secretary or the Administrator may not demand 
        a total payment of principal that is in excess of the value of 
        the homestead property.
            ``(2) Determination of value.--To the maximum extent 
        practicable, the value of the homestead property shall be 
        determined by an independent appraisal made during the 180 day 
        period beginning on the date of receipt of the application of 
        the borrower-owner to retain possession and occupancy of the 
        homestead property.
    ``(f) Title Not Needed To Enter Into Contracts.--The Secretary may 
enter into a contract authorized by this section before the Secretary 
acquires title to the homestead property that is the subject of the 
contract.
    ``(g) State Law Prevails.--In the event of a conflict between this 
section and a provision of State law relating to the right of a 
borrower-owner to designate for separate sale or redeem part or all of 
the real property securing a loan foreclosed on by a lender to the 
borrower-owner, the provision of State law shall prevail.

``SEC. 3415. TRANSFER OF INVENTORY LAND.

    ``(a) In General.--Subject to subsection (b), the Secretary may 
transfer to a Federal or State agency, for conservation purposes, any 
real property, or interest in real property, administered by the 
Secretary under this subtitle--
            ``(1) with respect to which the rights of all prior owners 
        and operators have expired;
            ``(2) that is eligible to be disposed of in accordance with 
        section 3409; and
            ``(3) that--
                    ``(A) has marginal value for agricultural 
                production;
                    ``(B) is environmentally sensitive; or
                    ``(C) has special management importance.
    ``(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 in which the property is located are 
        consulted prior to the transfer.

``SEC. 3416. TARGET PARTICIPATION RATES.

    ``(a) Establishment.--
            ``(1) In general.--The Secretary shall establish annual 
        target participation rates, on a county-wide basis, that shall 
        ensure that members of socially disadvantaged groups shall--
                    ``(A) receive loans made or guaranteed under 
                chapter 1; and
                    ``(B) have the opportunity to purchase or lease 
                farmland acquired by the Secretary under this subtitle.
            ``(2) Group population.--Except as provided in paragraph 
        (3), in establishing the target rates, the Secretary shall take 
        into consideration--
                    ``(A) the portion of the population of the county 
                made up of the socially disadvantaged groups; and
                    ``(B) the availability of inventory farmland in the 
                county.
            ``(3) Gender.--In the case of gender, target participation 
        rates shall take into consideration the number of current and 
        potential socially disadvantaged farmers in a State in 
        proportion to the total number of farmers in the State.
    ``(b) Reservation and Allocation.--
            ``(1) Reservation.--To the maximum extent practicable, the 
        Secretary shall reserve sufficient loan funds made available 
        under chapter 1 for use by members of socially disadvantaged 
        groups identified under target participation rates established 
        under subsection (a).
            ``(2) Allocation.--The Secretary shall allocate the loans 
        on the basis of the proportion of members of socially 
        disadvantaged groups in a county and the availability of 
        inventory farmland, with the greatest amount of loan funds 
        being distributed in the county with the greatest proportion of 
        socially disadvantaged group members and the greatest quantity 
        of available inventory farmland.
            ``(3) Indian reservations.--In distributing loan funds in 
        counties within the boundaries of an Indian reservation, the 
        Secretary shall allocate the funds on a reservation-wide basis.
    ``(c) Operating Loans.--
            ``(1) Establishment.--
                    ``(A) In general.--The Secretary shall establish 
                annual target participation rates that shall ensure 
                that socially disadvantaged farmers receive loans made 
                or guaranteed under chapter 2.
                    ``(B) Considerations.--In establishing the target 
                rates, the Secretary shall consider the number of 
                socially disadvantaged farmers in a State in proportion 
                to the total number of farmers in the State.
            ``(2) Reservation and allocation.--
                    ``(A) In general.--To the maximum extent 
                practicable, the Secretary shall reserve and allocate 
                the proportion of the loan funds of each State made 
                available under chapter 2 that is equal to the target 
                participation rate of the State for use by the socially 
                disadvantaged farmers in the State.
                    ``(B) Distribution.--To the maximum extent 
                practicable, the Secretary shall distribute the total 
                loan funds reserved under subparagraph (A) on a county-
                by-county basis according to the number of socially 
                disadvantaged farmers in the county.
                    ``(C) Reallocation of unused funds.--Any funds 
                reserved and allocated under this paragraph but not 
                used within a State shall, to the extent necessary to 
                satisfy pending applications under this title, be 
                available for use by socially disadvantaged farmers in 
                other States, as determined by the Secretary, and any 
                remaining funds shall be reallocated within the State.
    ``(d) Report.--The Secretary shall prepare and submit to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate a 
report that describes the annual target participation rates and the 
success in meeting the rates.
    ``(e) Implementation Consistent With Supreme Court Holding.--Not 
later than 180 days after April 4, 1996, 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. 3417. COMPROMISE OR ADJUSTMENT OF DEBTS OR CLAIMS BY GUARANTEED 
              LENDER.

    ``(a) Loss by Lender.--If the lender of a guaranteed farmer program 
loan takes any action described in section 3903(a)(4) with respect to 
the loan and the Secretary approves the action, for purposes of the 
guarantee, the lender shall be treated as having sustained a loss equal 
to the amount by which--
            ``(1) the outstanding balance of the loan immediately 
        before the action; exceeds
            ``(2) the outstanding balance of the loan immediately after 
        the action.
    ``(b) Net Present Value of Loan.--The Secretary shall approve the 
taking of an action described in section 3903(a)(4) by the lender of a 
guaranteed farmer program loan with respect to the loan if the action 
reduces the net present value of the loan to an amount equal to not 
less than the greater of--
            ``(1) the greatest net present value of a loan the borrower 
        could reasonably be expected to repay; and
            ``(2) the difference between--
                    ``(A) the greatest amount that the lender of the 
                loan could reasonably expect to recover from the 
                borrower through bankruptcy, or liquidation of the 
                property securing the loan; and
                    ``(B) all reasonable and necessary costs and 
                expenses that the lender of the loan could reasonably 
                expect to incur to preserve or dispose of the property 
                (including all associated legal and property management 
                costs) in the course of such a bankruptcy or 
                liquidation.
    ``(c) No Limitation on Authority.--This section shall not limit the 
authority of the Secretary to enter into a shared appreciation 
arrangement with a borrower under section 3411(e).

``SEC. 3418. WAIVER OF MEDIATION RIGHTS BY BORROWERS.

    ``The Secretary may not make or guarantee any farmer program loan 
to a farm borrower on the condition that the borrower waive any right 
under the mediation program of any State.

``SEC. 3419. BORROWER TRAINING.

    ``(a) In General.--The Secretary shall contract to provide 
educational training to all borrowers of direct loans made under this 
subtitle in financial and farm management concepts associated with 
commercial farming.
    ``(b) Contract.--
            ``(1) In general.--The Secretary may contract with a State 
        or private provider of farm management and credit counseling 
        services (including a community college, the extension service 
        of a State, a State department of agriculture, or a nonprofit 
        organization) to carry out this section.
            ``(2) Consultation.--The Secretary may consult with the 
        chief executive officer of a State concerning the identity of 
        the contracting organization and the process for contracting.
    ``(c) Eligibility for Loans.--
            ``(1) In general.--Subject to paragraph (2), to be eligible 
        to obtain a direct or guaranteed loan under this subtitle, a 
        borrower shall be required to obtain management assistance 
        under this section, appropriate to the management ability of 
        the borrower during the determination of eligibility for the 
        loan.
            ``(2) Loan conditions.--The need of a borrower who 
        satisfies the criteria set out in section 3101(b)(1)(B) or 
        3201(b)(1)(B) for management assistance under this section 
        shall not be cause for denial of eligibility of the borrower 
        for a direct or guaranteed loan under this subtitle.
    ``(d) Guidelines and Curriculum.--The Secretary shall issue 
regulations establishing guidelines and curriculum for the borrower 
training program established under this section.
    ``(e) Payment.--A borrower--
            ``(1) shall pay for training received under this section; 
        and
            ``(2) may use funds from operating loans made under chapter 
        2 to pay for the training.
    ``(f) Waivers.--
            ``(1) In general.--The Secretary may waive the requirements 
        of this section for an individual borrower on a determination 
        that the borrower demonstrates adequate knowledge in areas 
        described in this section.
            ``(2) Criteria.--The Secretary shall establish criteria 
        providing for the application of paragraph (1) consistently in 
        all counties nationwide.

``SEC. 3420. LOAN ASSESSMENTS.

    ``(a) In General.--After an applicant is determined to be eligible 
for assistance under this subtitle, the Secretary shall evaluate, in 
accordance with regulations issued by the Secretary, the farming plan 
and financial situation of each qualified farmer applicant.
    ``(b) Determinations.--In evaluating the farming plan and financial 
situation of an applicant under this section, the Secretary shall 
determine--
            ``(1) the amount that the applicant needs to borrow to 
        carry out the proposed farming plan;
            ``(2) the rate of interest that the applicant would need to 
        be able to cover expenses and build an adequate equity base;
            ``(3) the goals of the proposed farming plan of the 
        applicant;
            ``(4) the financial viability of the plan and any changes 
        that are necessary to make the plan viable; and
            ``(5) whether assistance is necessary under this title and, 
        if so, the amount of the assistance.
    ``(c) Contract.--The Secretary may contract with a third party 
(including an entity that is eligible to provide borrower training 
under section 3419(b)) to conduct a loan assessment under this section.
    ``(d) Review of Loans.--
            ``(1) In general.--Loan assessments conducted under this 
        section shall include biannual review of direct loans, and 
        periodic review (as determined necessary by the Secretary) of 
        guaranteed loans, made under this title to assess the progress 
        of a borrower in meeting the goals for the farm operation.
            ``(2) Contracts.--The Secretary may contract with an entity 
        that is eligible to provide borrower training under section 
        3419(b) to conduct a loan review under paragraph (1).
            ``(3) Problem assessments.--If a borrower is delinquent in 
        payments on a direct or guaranteed loan made under this title, 
        the Secretary or the contracting entity shall determine the 
        cause of, and action necessary to correct, the delinquency.
    ``(e) Guidelines.--The Secretary shall issue regulations providing 
guidelines for loan assessments conducted under this section.

``SEC. 3421. SUPERVISED CREDIT.

    ``The Secretary shall provide adequate training to employees of the 
Farm Service Agency on credit analysis and financial and farm 
management--
            ``(1) to better acquaint the employees with what 
        constitutes adequate financial data on which to base a direct 
        or guaranteed loan approval decision; and
            ``(2) to ensure proper supervision of farmer program loans.

``SEC. 3422. MARKET PLACEMENT.

    ``The Secretary shall establish a market placement program for a 
qualified beginning farmer and any other borrower of farmer program 
loans that the Secretary believes has a reasonable chance of qualifying 
for commercial credit with a guarantee provided under this subtitle.

``SEC. 3423. RECORDKEEPING OF LOANS BY GENDER OF BORROWER.

    ``The Secretary shall classify, by gender, records of applicants 
for loans and loan guarantees under this subtitle.

``SEC. 3424. CROP INSURANCE REQUIREMENT.

    ``(a) In General.--As a condition of obtaining any benefit 
(including a direct loan, loan guarantee, or payment) described in 
subsection (b), a borrower shall be required to obtain at least 
catastrophic risk protection insurance coverage under section 508 of 
the Federal Crop Insurance Act (7 U.S.C. 1508) for the crop and crop 
year for which the benefit is sought, if the coverage is offered by the 
Federal Crop Insurance Corporation.
    ``(b) Applicable Benefits.--Subsection (a) shall apply to--
            ``(1) a farm ownership loan under section 3102;
            ``(2) an operating loan under section 3202; and
            ``(3) an emergency loan under section 3301.

``SEC. 3425. LOAN AND LOAN SERVICING LIMITATIONS.

    ``(a) Delinquent Borrowers Prohibited From Obtaining Direct 
Operating Loans.--The Secretary may not make a direct operating loan 
under chapter 2 to a borrower who is delinquent on any loan made or 
guaranteed under this subtitle.
    ``(b) Loans Prohibited for Borrowers That Have Received Debt 
Forgiveness.--
            ``(1) Prohibitions.--Except as provided in paragraph (2)--
                    ``(A) the Secretary may not make a loan under this 
                subtitle to a borrower that has received debt 
                forgiveness on a loan made or guaranteed under this 
                subtitle; and
                    ``(B) the Secretary may not guarantee a loan under 
                this subtitle to a borrower that has received--
                            ``(i) debt forgiveness after April 4, 1996, 
                        on a loan made or guaranteed under this 
                        subtitle; or
                            ``(ii) received debt forgiveness on more 
                        than 3 occasions on or before April 4, 1996.
            ``(2) Exceptions.--
                    ``(A) In general.--The Secretary may make a direct 
                or guaranteed farm operating loan for paying annual 
                farm operating expenses of a borrower who--
                            ``(i) was restructured with a write-down 
                        under section 3411;
                            ``(ii) is current on payments under a 
                        confirmed reorganization plan under chapters 1 
                        11, 12, or 13 of title 11 of the United States 
                        Code; or
                            ``(iii) received debt forgiveness on not 
                        more than 1 occasion resulting directly and 
                        primarily from a major disaster or emergency 
                        designated by the President on or after April 
                        4, 1996, under the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 U.S.C. 
                        5121 et seq.).
                    ``(B) Emergency loans.--The Secretary may make an 
                emergency loan under section 3301 to a borrower that--
                            ``(i) on or before April 4, 1996, received 
                        not more than 1 debt forgiveness on a loan made 
                        or guaranteed under this subtitle; and
                            ``(ii) after April 4, 1996, has not 
                        received debt forgiveness on a loan made or 
                        guaranteed under this subtitle.
    ``(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 subtitle if the borrower has received 
debt forgiveness on another direct loan made under this subtitle.

``SEC. 3426. SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWER 
              COMPLIANCE.

    ``The Secretary shall develop and use a consolidated short form for 
farmer program loan 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 subtitle.

``SEC. 3427. UNDERWRITING FORMS AND STANDARDS.

    ``In the administration of this subtitle, the Secretary shall, to 
the extent practicable, use underwriting forms, standards, practices, 
and terminology similar to the forms, standards, practices, and 
terminology used by lenders in the private sector.

``SEC. 3428. BEGINNING FARMER INDIVIDUAL DEVELOPMENT ACCOUNTS PILOT 
              PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Demonstration program.--The term `demonstration 
        program' means a demonstration program carried out by a 
        qualified entity under the pilot program established in 
        subsection (b)(1).
            ``(2) Eligible participant.--The term `eligible 
        participant' means a qualified beginning farmer that--
                    ``(A) lacks significant financial resources or 
                assets; and
                    ``(B) has an income that is less than--
                            ``(i) 80 percent of the median income of 
                        the State in which the farmer resides; or
                            ``(ii) 200 percent of the most recent 
                        annual Federal Poverty Income Guidelines 
                        published by the Department of Health and Human 
                        Services for the State.
            ``(3) Individual development account.--The term `individual 
        development account' means a savings account described in 
        subsection (b)(4)(A).
            ``(4) Qualified entity.--
                    ``(A) In general.--The term `qualified entity' 
                means--
                            ``(i) 1 or more organizations--
                                    ``(I) described in section 
                                501(c)(3) of the Internal Revenue Code 
                                of 1986; and
                                    ``(II) exempt from taxation under 
                                section 501(a) of such Code; or
                            ``(ii) a State, local, or tribal government 
                        submitting an application jointly with an 
                        organization described in clause (i).
                    ``(B) No prohibition on collaboration.--An 
                organization described in subparagraph (A)(i) may 
                collaborate with a financial institution or for-profit 
                community development corporation to carry out the 
                purposes of this section.
    ``(b) Pilot Program.--
            ``(1) In general.--The Secretary shall establish a pilot 
        program to be known as the `New Farmer Individual Development 
        Accounts Pilot Program' under which the Secretary shall work 
        through qualified entities to establish demonstration 
        programs--
                    ``(A) of at least 5 years in duration; and
                    ``(B) in at least 15 States.
            ``(2) Coordination.--The Secretary shall operate the pilot 
        program through and in coordination with the farmer program 
        loans of the Farm Service Agency.
            ``(3) Reserve funds.--
                    ``(A) In general.--A qualified entity carrying out 
                a demonstration program under this section shall 
                establish a reserve fund consisting of a non-Federal 
                match of 50 percent of the total amount of the grant 
                awarded to the demonstration program under this 
                section.
                    ``(B) Federal funds.--After the qualified entity 
                has deposited the non-Federal matching funds described 
                in subparagraph (A) in the reserve fund, the Secretary 
                shall provide the total amount of the grant awarded 
                under this section to the demonstration program for 
                deposit in the reserve fund.
                    ``(C) Use of funds.--Of the funds deposited under 
                subparagraph (B) in the reserve fund established for a 
                demonstration program, the qualified entity carrying 
                out the demonstration program--
                            ``(i) may use up to 10 percent for 
                        administrative expenses; and
                            ``(ii) shall use the remainder in making 
                        matching awards described in paragraph 
                        (4)(B)(ii)(I).
                    ``(D) Interest.--Any interest earned on amounts in 
                a reserve fund established under subparagraph (A) may 
                be used by the qualified entity as additional matching 
                funds for, or to administer, the demonstration program.
                    ``(E) Guidance.--The Secretary shall issue guidance 
                regarding the investment requirements of reserve funds 
                established under this paragraph.
                    ``(F) Reversion.--On the date on which all funds 
                remaining in any individual development account 
                established by a qualified entity have reverted under 
                paragraph (5)(B)(ii) to the reserve fund established by 
                the qualified entity, there shall revert to the 
                Treasury of the United States a percentage of the 
                amount (if any) in the reserve fund equal to--
                            ``(i) the amount of Federal funds deposited 
                        in the reserve fund under subparagraph (B) that 
                        were not used for administrative expenses; 
                        divided by
                            ``(ii) the total amount of funds deposited 
                        in the reserve fund.
            ``(4) Individual development accounts.--
                    ``(A) In general.--A qualified entity receiving a 
                grant under this section shall establish and administer 
                individual development accounts for eligible 
                participants.
                    ``(B) Contract requirements.--To be eligible to 
                receive funds under this section from a qualified 
                entity, an eligible participant shall enter into a 
                contract with only 1 qualified entity under which--
                            ``(i) the eligible participant agrees--
                                    ``(I) to deposit a certain amount 
                                of funds of the eligible participant in 
                                a personal savings account, as 
                                prescribed by the contractual agreement 
                                between the eligible participant and 
                                the qualified entity;
                                    ``(II) to use the funds described 
                                in subclause (I) only for 1 or more 
                                eligible expenditures described in 
                                paragraph (5)(A); and
                                    ``(III) to complete financial 
                                training; and
                            ``(ii) the qualified entity agrees--
                                    ``(I) to deposit, not later than 1 
                                month after an amount is deposited 
                                pursuant to clause (i)(I), at least a 
                                100-percent, and up to a 200-percent, 
                                match of that amount into the 
                                individual development account 
                                established for the eligible 
                                participant; and
                                    ``(II) with uses of funds proposed 
                                by the eligible participant.
                    ``(C) Limitation.--
                            ``(i) In general.--A qualified entity 
                        administering a demonstration program under 
                        this section may provide not more than $6,000 
                        for each fiscal year in matching funds to the 
                        individual development account established by 
                        the qualified entity for an eligible 
                        participant.
                            ``(ii) Treatment of amount.--An amount 
                        provided under clause (i) shall not be 
                        considered to be a gift or loan for mortgage 
                        purposes.
            ``(5) Eligible expenditures.--
                    ``(A) In general.--An eligible expenditure 
                described in this subparagraph is an expenditure--
                            ``(i) to purchase farmland or make a down 
                        payment on an accepted purchase offer for 
                        farmland;
                            ``(ii) to make mortgage payments on 
                        farmland purchased pursuant to clause (i), for 
                        up to 180 days after the date of the purchase;
                            ``(iii) to purchase breeding stock, fruit 
                        or nut trees, or trees to harvest for timber; 
                        and
                            ``(iv) for other similar expenditures, as 
                        determined by the Secretary.
                    ``(B) Timing.--
                            ``(i) In general.--An eligible participant 
                        may make an eligible expenditure at any time 
                        during the 2-year period beginning on the date 
                        on which the last matching funds are provided 
                        under paragraph (4)(B)(ii)(I) to the individual 
                        development account established for the 
                        eligible participant.
                            ``(ii) Unexpended funds.--At the end of the 
                        period described in clause (i), any funds 
                        remaining in an individual development account 
                        established for an eligible participant shall 
                        revert to the reserve fund of the demonstration 
                        program under which the account was 
                        established.
    ``(c) Applications.--
            ``(1) In general.--A qualified entity that seeks to carry 
        out a demonstration program under this section may submit to 
        the Secretary an application at such time, in such form, and 
        containing such information as the Secretary may prescribe.
            ``(2) Criteria.--In considering whether to approve an 
        application to carry out a demonstration program under this 
        section, the Secretary shall assess--
                    ``(A) the degree to which the demonstration program 
                described in the application is likely to aid eligible 
                participants in successfully pursuing new farming 
                opportunities;
                    ``(B) the experience and ability of the qualified 
                entity to responsibly administer the demonstration 
                program;
                    ``(C) the experience and ability of the qualified 
                entity in recruiting, educating, and assisting eligible 
                participants to increase economic independence and 
                pursue or advance farming opportunities;
                    ``(D) the aggregate amount of direct funds from 
                non-Federal public sector and private sources that are 
                formally committed to the demonstration program as 
                matching contributions;
                    ``(E) the adequacy of the plan of the qualified 
                entity to provide information relevant to an evaluation 
                of the demonstration program; and
                    ``(F) such other factors as the Secretary considers 
                to be appropriate.
            ``(3) Preferences.--In considering an application to 
        conduct a demonstration program under this section, the 
        Secretary shall give preference to an application from a 
        qualified entity that demonstrates--
                    ``(A) a track record of serving clients targeted by 
                the program, including, as appropriate, socially 
                disadvantaged farmers; and
                    ``(B) expertise in dealing with financial 
                management aspects of farming.
            ``(4) Approval.--Not later than 1 year after the date of 
        enactment of this section, in accordance with this section, the 
        Secretary shall, on a competitive basis, approve such 
        applications to conduct demonstration programs as the Secretary 
        considers appropriate.
            ``(5) Term of authority.--If the Secretary approves an 
        application to carry out a demonstration program, the Secretary 
        shall authorize the applicant to carry out the project for a 
        period of 5 years, plus an additional 2 years to make eligible 
        expenditures in accordance with subsection (b)(5)(B).
    ``(d) Grant Authority.--
            ``(1) In general.--The Secretary shall make a grant to a 
        qualified entity authorized to carry out a demonstration 
        program under this section.
            ``(2) Maximum amount of grants.--The aggregate amount of 
        grant funds provided to a demonstration program carried out 
        under this section shall not exceed $250,000.
            ``(3) Timing of grant payments.--The Secretary shall pay 
        the amounts awarded under a grant made under this section--
                    ``(A) on the awarding of the grant; or
                    ``(B) pursuant to such payment plan as the 
                qualified entity may specify.
    ``(e) Reports.--
            ``(1) Annual progress reports.--
                    ``(A) In general.--Not later than 60 days after the 
                end of the calendar year in which the Secretary 
                authorizes a qualified entity to carry out a 
                demonstration program under this section, and annually 
                thereafter until the conclusion of the demonstration 
                program, the qualified entity shall prepare an annual 
                report that includes, for the period covered by the 
                report--
                            ``(i) an evaluation of the progress of the 
                        demonstration program;
                            ``(ii) information about the demonstration 
                        program, including the eligible participants 
                        and the individual development accounts that 
                        have been established; and
                            ``(iii) such other information as the 
                        Secretary may require.
                    ``(B) Submission of reports.--A qualified entity 
                shall submit each report required under subparagraph 
                (A) to the Secretary.
            ``(2) Reports by the secretary.--Not later than 1 year 
        after the date on which all demonstration programs under this 
        section are concluded, the Secretary shall submit to Congress a 
        final report that describes the results and findings of all 
        reports and evaluations carried out under this section.
    ``(f) Annual Review.--The Secretary may conduct an annual review of 
the financial records of a qualified entity--
            ``(1) to assess the financial soundness of the qualified 
        entity; and
            ``(2) to determine the use of grant funds made available to 
        the qualified entity under this section.
    ``(g) Regulations.--In carrying out this section, the Secretary may 
promulgate regulations to ensure that the program includes provisions 
for--
            ``(1) the termination of demonstration programs;
            ``(2) control of the reserve funds in the case of such a 
        termination;
            ``(3) transfer of demonstration programs to other qualified 
        entities; and
            ``(4) remissions from a reserve fund to the Secretary in a 
        case in which a demonstration program is terminated without 
        transfer to a new qualified entity.
    ``(h) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $5,000,000 for each of fiscal 
years 2012 through 2017.

``SEC. 3429. FARMER LOAN PILOT PROJECTS.

    ``(a) In General.--The Secretary may conduct pilot projects of 
limited scope and duration that are consistent with this subtitle to 
evaluate processes and techniques that may improve the efficiency and 
effectiveness of the programs carried out under this subtitle
    ``(b) Notification.--The Secretary shall--
            ``(1) not less than 60 days before the date on which the 
        Secretary initiates a pilot project under subsection (a), 
        submit notice of the proposed pilot project to the Committee on 
        Agriculture of the House of Representatives and the Committee 
        on Agriculture, Nutrition, and Forestry of the Senate; and
            ``(2) consider any recommendations or feedback provided to 
        the Secretary in response to the notice provided under 
        paragraph (1).

``SEC. 3430. PROHIBITION ON USE OF LOANS FOR CERTAIN PURPOSES.

    ``(a) In General.--Except as provided in subsections (b) and (c), 
the Secretary may not approve a loan under this subtitle to drain, 
dredge, fill, level, or otherwise manipulate a wetland (as defined in 
section 1201(a) of the Food Security Act of 1985 (16 U.S.C. 3801(a))), 
or to engage in any activity that results in impairing or reducing the 
flow, circulation, or reach of water.
    ``(b) Prior Activity.--Subsection (a) does not apply in the case 
of--
            ``(1) an activity related to the maintenance of a 
        previously converted wetland; or
            ``(2) an activity that had already commenced before 
        November 28, 1990.
    ``(c) Exception.--This section shall not apply to a loan made or 
guaranteed under this subtitle for a utility line.

``SEC. 3431. AUTHORIZATION OF APPROPRIATIONS AND ALLOCATION OF FUNDS.

    ``(a) Authorization for Loans.--
            ``(1) In general.--The Secretary may make or guarantee 
        loans under chapters 1 and 2 from the Agricultural Credit 
        Insurance Fund for not more than $4,226,000,000 for each of 
        fiscal years 2012 through 2017, of which, for each fiscal 
        year--
                    ``(A) $1,200,000,000 shall be for direct loans, of 
                which--
                            ``(i) $350,000,000 shall be for farm 
                        ownership loans; and
                            ``(ii) $850,000,000 shall be for operating 
                        loans; and
                    ``(B) $3,026,000,000 shall be for guaranteed loans, 
                of which--
                            ``(i) $1,000,000,000 shall be for 
                        guarantees of farm ownership loans; and
                            ``(ii) $2,026,000,000 shall be for 
                        guarantees of operating loans.
            ``(2) Beginning farmers.--
                    ``(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 an amount that 
                                is not less than 75 percent of the 
                                total amount for qualified beginning 
                                farmers.
                                    ``(II) Down payment loans; joint 
                                financing arrangements.--Of the amounts 
                                reserved for a fiscal year under 
                                subclause (I), the Secretary shall 
                                reserve an amount not less than \2/3\ 
                                of the amount for the down payment loan 
                                program under section 3107 and joint 
                                financing arrangements under section 
                                3105 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 for each of 
                        fiscal years 2012 through 2017, an amount that 
                        is not less than 50 percent of the total 
                        amount.
                            ``(iii) Funds reserved until september 1.--
                        Except as provided in clause (i)(II), funds 
                        reserved for qualified beginning farmers under 
                        this subparagraph for a fiscal year shall be 
                        reserved only until September 1 of the fiscal 
                        year.
                    ``(B) Guaranteed loans.--
                            ``(i) Farm ownership loans.--Of the amounts 
                        made available under paragraph (1) for 
                        guarantees of farm ownership loans, the 
                        Secretary shall reserve an amount that is not 
                        less than 40 percent of the total amount for 
                        qualified beginning farmers.
                            ``(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.
                            ``(iii) Funds reserved until april 1.--
                        Funds reserved for qualified beginning farmers 
                        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.--If a qualified beginning farmer meets the 
                eligibility criteria for receiving a direct or 
                guaranteed loan under section 3101, 3107, or 3201, 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.--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 under the down payment loan 
                        program established under section 3107, 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, 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.--Subject to subparagraphs (B) and 
                (C), beginning on September 1 of each fiscal year, the 
                Secretary may use available funds made available under 
                chapter 3 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, by the Secretary during the fiscal 
                year will be made to the extent of available amounts.
            ``(5) Availability of funds.--Funds made available to carry 
        out this subtitle shall remain available until expended.
    ``(b) Cost Projections.--
            ``(1) In general.--The Secretary shall develop long-term 
        cost projections for loan program authorizations required under 
        subsection (a).
            ``(2) Analysis.--Each projection under paragraph (1) shall 
        include analyses of--
                    ``(A) the long-term costs of the lending levels 
                that the Secretary requests to be authorized under 
                subsection (a); and
                    ``(B) the long-term costs for increases in lending 
                levels beyond those requested to be authorized, based 
                on increments of $10,000,000 or such other levels as 
                the Secretary considers appropriate.
            ``(3) Submission to congress.--The Secretary shall submit 
        to the Committees on Agriculture and Appropriations of the 
        House of Representatives and the Committees on Agriculture, 
        Nutrition, and Forestry and Appropriations of the Senate 
        reports containing the long-term cost projections for the 3-
        year period beginning with fiscal year 1983 and each 3-year 
        period thereafter at the time the requests for authorizations 
        for those periods are submitted to Congress.
    ``(c) Low-income, Limited-resource Borrowers.--
            ``(1) Reserve.--Notwithstanding any other provision of law, 
        not less than 25 percent of the loans for farm ownership 
        purposes for each fiscal year under this subtitle shall be for 
        low-income, limited-resource borrowers.
            ``(2) Notification.--The Secretary shall provide 
        notification to farm borrowers under this subtitle in the 
        normal course of loan making and loan servicing operations, of 
        the provisions of this subtitle relating to low-income, 
        limited-resource borrowers and the procedures by which persons 
        may apply for loans under the low-income, limited-resource 
        borrower program.''.

                       Subtitle B--Miscellaneous

SEC. 5101. STATE AGRICULTURAL MEDIATION PROGRAMS.

    Section 506 of the Agricultural Credit Act of 1987 (7 U.S.C. 5106) 
is amended by striking ``2015'' and inserting ``2017''.

SEC. 5102. LOANS TO PURCHASERS OF HIGHLY FRACTIONATED LAND.

    (a) In General.--The first sentence of Public Law 91-229 (25 U.S.C. 
488) is amended--
            (1) in subsection (a), in the first sentence, by striking 
        ``loans from'' and all that follows through ``1929)'' and 
        inserting ``direct loans in a manner consistent with direct 
        loans pursuant to chapter 4 of subtitle A of the Consolidated 
        Farm and Rural Development Act'';
            (2) in subsection (b)(1)--
                    (A) by striking ``pursuant to section 205(c) of the 
                Indian Land Consolidation Act (25 U.S.C. 2204(c))''; 
                and
                    (B) by inserting ``or to intermediaries in order to 
                establish revolving loan funds for the purchase of 
                highly fractionated land under that section'' before 
                the period at the end; and
            (3) by adding at the end the following:
    ``(c) Consultation Required.--In determining regulations and 
procedures to define eligible purchasers of highly fractionated land 
under this section, the Secretary of Agriculture shall consult with the 
Secretary of the Interior.''.

SEC. 5103. REMOVAL OF DUPLICATIVE APPRAISALS.

    Notwithstanding any other law (including regulations), in making 
loans under the first section of Public Law 91-229 (25 U.S.C. 488), 
borrowers who are Indian tribes, members of Indian tribes, or tribal 
corporations shall only be required to obtain 1 appraisal under an 
appraisal standard recognized as of the date of enactment of this Act 
by the Secretary or the Secretary of the Interior.

                      TITLE VI--RURAL DEVELOPMENT

     Subtitle A--Reorganization of the Consolidated Farm and Rural 
                            Development Act

SEC. 6001. REORGANIZATION OF THE CONSOLIDATED FARM AND RURAL 
              DEVELOPMENT ACT.

    Title III of the Agricultural Act of 1961 (7 U.S.C. 1921 et seq.) 
is amended to read as follows:

                    ``TITLE III--AGRICULTURAL CREDIT

``SEC. 3001. SHORT TITLE; TABLE OF CONTENTS.

    ``(a) Short Title.--This title may be cited as the `Consolidated 
Farm and Rural Development Act'.
    ``(b) Table of Contents.--The table of contents of this title is as 
follows:

                    ``TITLE III--AGRICULTURAL CREDIT

``Sec. 3001. Short title; table of contents.
``Sec. 3002. Definitions.
      ``Subtitle A--Farmer Loans, Servicing, and Other Assistance

                   ``Chapter 1--Farm Ownership Loans

``Sec. 3101. Farm ownership loans.
``Sec. 3102. Purposes of loans.
``Sec. 3103. Conservation loan and loan guarantee program.
``Sec. 3104. Loan maximums.
``Sec. 3105. Repayment requirements for farm ownership loans.
``Sec. 3106. Limited-resource loans.
``Sec. 3107. Downpayment loan program.
``Sec. 3108. Beginning farmer and socially disadvantaged farmer 
                            contract land sales program.
                      ``Chapter 2--Operating Loans

``Sec. 3201. Operating loans.
``Sec. 3202. Purposes of loans.
``Sec. 3203. Restrictions on loans.
``Sec. 3204. Terms of loans.
                      ``Chapter 3--Emergency Loans

``Sec. 3301. Emergency loans.
``Sec. 3302. Purposes of loans.
``Sec. 3303. Terms of loans.
``Sec. 3304. Production losses.
              ``Chapter 4--General Farmer Loan Provisions

``Sec. 3401. Agricultural Credit Insurance Fund.
``Sec. 3402. Guaranteed farmer loans.
``Sec. 3403. Provision of information to borrowers.
``Sec. 3404. Notice of loan service programs.
``Sec. 3405. Planting and production history guidelines.
``Sec. 3406. Special conditions and limitations on loans.
``Sec. 3407. Graduation of borrowers.
``Sec. 3408. Debt adjustment and credit counseling.
``Sec. 3409. Security servicing.
``Sec. 3410. Contracts on loan security properties.
``Sec. 3411. Debt restructuring and loan servicing.
``Sec. 3412. Relief for mobilized military reservists from certain 
                            agricultural loan obligations.
``Sec. 3413. Interest rate reduction program.
``Sec. 3414. Homestead property.
``Sec. 3415. Transfer of inventory land.
``Sec. 3416. Target participation rates.
``Sec. 3417. Compromise or adjustment of debts or claims by guaranteed 
                            lender.
``Sec. 3418. Waiver of mediation rights by borrowers.
``Sec. 3419. Borrower training.
``Sec. 3420. Loan assessments.
``Sec. 3421. Supervised credit.
``Sec. 3422. Market placement.
``Sec. 3423. Recordkeeping of loans by gender of borrower.
``Sec. 3424. Crop insurance requirement.
``Sec. 3425. Loan and loan servicing limitations.
``Sec. 3426. Short form certification of farm program borrower 
                            compliance.
``Sec. 3427. Underwriting forms and standards.
``Sec. 3428. Beginning farmer individual development accounts pilot 
                            program.
``Sec. 3429. Farmer loan pilot projects.
``Sec. 3430. Prohibition on use of loans for certain purposes.
``Sec. 3431. Authorization of appropriations and allocation of funds.
                    ``Subtitle B--Rural Development

                 ``Chapter 1--Rural Community Programs

``Sec. 3501. Water and waste disposal loans, loan guarantees, and 
                            grants.
``Sec. 3502. Community facilities loans, loan guarantees, and grants.
``Sec. 3503. Health care services.
        ``Chapter 2--Rural Business and Cooperative Development

``Sec. 3601. Business programs.
``Sec. 3602. Rural business investment program.
           ``Chapter 3--General Rural Development Provisions

``Sec. 3701. General provisions for loans and grants.
``Sec. 3702. Strategic economic and community development.
``Sec. 3703. Guaranteed rural development loans.
``Sec. 3704. Rural Development Insurance Fund.
``Sec. 3705. Rural economic area partnership zones.
``Sec. 3706. Streamlining applications and improving accessibility of 
                            rural development programs.
``Sec. 3707. State Rural Development Partnership.
                 ``Chapter 4--Delta Regional Authority

``Sec. 3801. Definitions.
``Sec. 3802. Delta Regional Authority.
``Sec. 3803. Economic and community development grants.
``Sec. 3804. Supplements to Federal grant programs.
``Sec. 3805. Local development districts; certification and 
                            administrative expenses.
``Sec. 3806. Distressed counties and areas and nondistressed counties.
``Sec. 3807. Development planning process.
``Sec. 3808. Program development criteria.
``Sec. 3809. Approval of development plans and projects.
``Sec. 3810. Consent of States.
``Sec. 3811. Records.
``Sec. 3812. Annual report.
``Sec. 3813. Authorization of appropriations.
``Sec. 3814. Termination of authority.
         ``Chapter 5--Northern Great Plains Regional Authority

``Sec. 3821. Definitions.
``Sec. 3822. Northern Great Plains Regional Authority.
``Sec. 3823. Interstate cooperation for economic opportunity and 
                            efficiency.
``Sec. 3824. Economic and community development grants.
``Sec. 3825. Supplements to Federal grant programs.
``Sec. 3826. Multistate and local development districts and 
                            organizations and Northern Great Plains 
                            Inc.
``Sec. 3827. Distressed counties and areas and nondistressed counties.
``Sec. 3828. Development planning process.
``Sec. 3829. Program development criteria.
``Sec. 3830. Approval of development plans and projects.
``Sec. 3831. Consent of States.
``Sec. 3832. Records.
``Sec. 3833. Annual report.
``Sec. 3834. Authorization of appropriations.
``Sec. 3835. Termination of authority.
                    ``Subtitle C--General Provisions

``Sec. 3901. Full faith and credit.
``Sec. 3902. Purchase and sale of guaranteed portions of loans.
``Sec. 3903. Administration.
``Sec. 3904. Loan moratorium and policy on foreclosures.
``Sec. 3905. Oil and gas royalty payments on loans.
``Sec. 3906. Taxation.
``Sec. 3907. Conflicts of interest.
``Sec. 3908. Loan summary statements.
``Sec. 3909. Certified lenders program.
``Sec. 3910. Loans to resident aliens.
``Sec. 3911. Expedited clearing of title to inventory property.
``Sec. 3912. Transfer of land to Secretary.
``Sec. 3913. Competitive sourcing limitations.
``Sec. 3914. Regulations.

``SEC. 3002. DEFINITIONS.

    ``In this title (unless the context otherwise requires):
            ``(1) Able to obtain credit elsewhere.--The term `able to 
        obtain credit elsewhere' means able to obtain a loan from a 
        production credit association, a Federal land bank, or other 
        responsible cooperative or private credit source (or, in the 
        case of a borrower under section 3106, the borrower may be able 
        to obtain a loan under section 3101) at reasonable rates and 
        terms, taking into consideration prevailing private and 
        cooperative rates and terms in the community in or near which 
        the applicant resides for loans for similar purposes and 
        periods of time.
            ``(2) Agricultural credit insurance fund.--The term 
        `Agricultural Credit Insurance Fund' means the fund established 
        under section 3401.
            ``(3) Approved lender.--The term `approved lender' means--
                    ``(A) a lender approved prior to October 28, 1992, 
                by the Secretary under the approved lender program 
                established by exhibit A to subpart B of part 1980 of 
                title 7, Code of Federal Regulations (as in effect on 
                January 1, 1991); or
                    ``(B) a lender certified under section 3909.
            ``(4) Aquaculture.--The term `aquaculture' means the 
        culture or husbandry of aquatic animals or plants by private 
        industry for commercial purposes, including the culture and 
        growing of fish by private industry for the purpose of creating 
        or augmenting publicly owned and regulated stocks of fish.
            ``(5) Beginning farmer.--The term `beginning farmer' has 
        the meaning given the term by the Secretary.
            ``(6) Borrower.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `borrower' means an 
                individual or entity who has an outstanding obligation 
                to the Secretary under any loan made or guaranteed 
                under this title, without regard to whether the loan 
                has been accelerated.
                    ``(B) Exclusions.--The term `borrower' does not 
                include an individual or entity all of whose loans and 
                accounts have been foreclosed on or liquidated, 
                voluntarily or otherwise.
            ``(7) County committee.--The term `county committee' means 
        the appropriate county committee established under section 
        8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 
        U.S.C. 590h(b)(5)).
            ``(8) Debt forgiveness.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `debt forgiveness' means 
                reducing or terminating a 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 3411;
                            ``(ii) compromising, adjusting, reducing, 
                        or charging-off a debt or claim under section 
                        3903;
                            ``(iii) paying a loss on a guaranteed loan 
                        under this title; 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.
            ``(9) Department.--The term `Department' means the 
        Department of Agriculture.
            ``(10) Direct loan.--The term `direct loan' means a loan 
        made by the Secretary from appropriated funds.
            ``(11) Entity.--The term `entity' means a corporation, farm 
        cooperative, partnership, joint operation, governmental entity, 
        or other legal organization, as determined by the Secretary.
            ``(12) Farm.--The term `farm' means an operation involved 
        in--
                    ``(A) the production of an agricultural commodity;
                    ``(B) ranching; or
                    ``(C) aquaculture.
            ``(13) Farmer.--The term `farmer' means an individual or 
        entity engaged primarily and directly in--
                    ``(A) the production of an agricultural commodity;
                    ``(B) ranching; or
                    ``(C) aquaculture.
            ``(14) Farmer program loan.--The term `farmer program loan' 
        means--
                    ``(A) a farm ownership loan under section 3101;
                    ``(B) a conservation loan under section 3103;
                    ``(C) an operating loan under section 3201;
                    ``(D) an emergency loan under section 3301;
                    ``(E) an economic emergency loan under section 202 
                of the Emergency Agricultural Credit Adjustment Act of 
                1978 (7 U.S.C. prec. 1961 note; Public Law 95-334);
                    ``(F) a loan for a farm service building under 
                section 502 of the Housing Act of 1949 (42 U.S.C. 
                1472);
                    ``(G) an economic opportunity loan under section 
                602 of the Economic Opportunity Act of 1964 (Public Law 
                88-452; 42 U.S.C. 2942 note) (as it existed before the 
                amendment made by section 683(a) of the Omnibus Budget 
                Reconciliation Act of 1981 (Public Law 97-35; 95 Stat. 
                519));
                    ``(H) a softwood timber loan under section 608 of 
                the Agricultural Programs Adjustment Act of 1984 (7 
                U.S.C. 1981 note; Public Law 98-258); or
                    ``(I) any other loan described in section 
                343(a)(10) of this title (as it existed before the 
                amendment made by section 2 of the Agriculture Reform, 
                Food, and Jobs Act of 2012) that is outstanding on the 
                date of enactment of that Act.
            ``(15) Farm service agency.--The term `Farm Service Agency' 
        means the offices of the Farm Service Agency to which the 
        Secretary delegates responsibility to carry out this title.
            ``(16) Governmental entity.--The term `governmental entity' 
        means any agency of the United States, a State, or a unit of 
        local government of a State, or subdivision thereof.
            ``(17) Guarantee.--The term `guarantee' means guaranteeing 
        the payment of a loan originated, held, and serviced by a 
        private financial agency, or lender, approved by the Secretary.
            ``(18) Highly erodible land.--The term `highly erodible 
        land' has the meaning given the term in section 1201(a) of the 
        Food Security Act of 1985 (16 U.S.C. 3801(a)).
            ``(19) Homestead retention.--The term `homestead retention' 
        means homestead retention as authorized under section 3414.
            ``(20) Indian tribe.--The term `Indian tribe' means a 
        Federal and State-recognized Indian tribe or other federally 
        recognized Indian tribal group (including a Tribal College or 
        University, as defined in section 316(b) of the Higher 
        Education Act of 1965 (20 U.S.C. 1059c(b)).
            ``(21) Loan service program.--The term `loan service 
        program' means, with respect to a farmer program loan borrower, 
        a primary loan service program or a homestead retention 
        program.
            ``(22) Natural or major disaster or emergency.--The term 
        `natural or major disaster or emergency' means--
                    ``(A) a disaster due to nonmanmade causes declared 
                by the Secretary; or
                    ``(B) 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.).
            ``(23) Primary loan service program.--The term `primary 
        loan service program' means, with respect to a farmer program 
        loan--
                    ``(A) loan consolidation, rescheduling, or 
                reamortization;
                    ``(B) interest rate reduction, including the use of 
                the limited resource program;
                    ``(C) loan restructuring, including deferral, set 
                aside, or writing down of the principal or accumulated 
                interest charges, or both, of the loan; or
                    ``(D) any combination of actions described in 
                subparagraphs (A), (B), and (C).
            ``(24) Prime farmland.--The term `prime farmland' means 
        prime farmland and unique farmland (as defined in subsections 
        (a) and (b) of section 657.5 of title 7, Code of Federal 
        Regulations (1980)).
            ``(25) Project.--For purposes of section 3501, the term 
        `project' includes a facility providing central service or a 
        facility serving an individual property, or both.
            ``(26) Qualified beginning farmer.--The term `qualified 
        beginning farmer' means an applicant, regardless of whether the 
        applicant is participating in a program under section 3107, 
        who--
                    ``(A) is eligible for assistance under this title;
                    ``(B) has not operated a farm, or has operated a 
                farm for not more than 10 years;
                    ``(C) in the case of a cooperative, corporation, 
                partnership, or joint operation, has members, 
                stockholders, partners, or joint operators who are all 
                related to each other by blood or marriage;
                    ``(D) in the case of a farmer who is the owner and 
                operator of a farm--
                            ``(i) in the case of a loan made to an 
                        individual, individually or with the immediate 
                        family of the applicant--
                                    ``(I) materially and substantially 
                                participates in the operation of the 
                                farm; and
                                    ``(II) provides substantial day-to-
                                day labor and management of the farm, 
                                consistent with the practices in the 
                                State or county in which the farm is 
                                located; or
                            ``(ii)(I) in the case of a loan made to a 
                        cooperative, corporation, partnership, or joint 
                        operation, has members, stockholders, partners, 
                        or joint operators who materially and 
                        substantially participate in the operation of 
                        the farm; and
                            ``(II) in the case of a loan made to a 
                        corporation, has stockholders who all qualify 
                        individually as beginning farmers;
                    ``(E) in the case of an applicant seeking to become 
                an owner and operator of a farm--
                            ``(i) in the case of a loan made to an 
                        individual, individually or with the immediate 
                        family of the applicant, will--
                                    ``(I) materially and substantially 
                                participate in the operation of the 
                                farm; and
                                    ``(II) provide substantial day-to-
                                day labor and management of the farm, 
                                consistent with the practices in the 
                                State or county in which the farm is 
                                located; or
                            ``(ii)(I) in the case of a loan made to a 
                        cooperative, corporation, partnership, or joint 
                        operation, will have members, stockholders, 
                        partners, or joint operators who will 
                        materially and substantially participate in the 
                        operation of the farm; and
                            ``(II) in the case of a loan made to a 
                        corporation, has stockholders who will all 
                        qualify individually as beginning farmers;
                    ``(F) agrees to participate in such loan 
                assessment, borrower training, and financial management 
                programs as the Secretary may require;
                    ``(G)(i) does not own farm land; or
                    ``(ii) directly or through interests in family farm 
                corporations, owns farm land, the aggregate acreage of 
                which does not exceed 30 percent of the average acreage 
                of the farms, as the case may be, in the county in 
                which the farm operations of the applicant are located, 
                as reported in the most recent census of agriculture 
                taken in accordance with the Census of Agriculture Act 
                of 1997 (7 U.S.C. 2204g et seq.), except that this 
                subparagraph shall not apply to a loan made or 
                guaranteed under chapter 2 of subtitle A; and
                    ``(H) demonstrates that the available resources of 
                the applicant and any spouse of the applicant are not 
                sufficient to enable the applicant to farm on a viable 
                scale.
            ``(27) Recreational purpose.--For purposes of section 3410, 
        the term `recreational purpose' has the meaning provided by the 
        Secretary, but shall include hunting.
            ``(28) Rural and rural area.--
                    ``(A) In general.--Subject to any determination 
                made under subparagraph (B), the terms `rural' and 
                `rural area' mean any area other than--
                            ``(i) a city or town that has a population 
                        of greater than 50,000 inhabitants; and
                            ``(ii) any urbanized area contiguous and 
                        adjacent to a city or town described in clause 
                        (i).
                    ``(B) Determination of areas rural in character.--
                            ``(i) In general.--If part of an area 
                        described in subparagraph (A)(ii) was eligible 
                        under the definitions of the terms `rural' and 
                        `rural area' in section 343 (as in effect on 
                        the day before the date of enactment of the 
                        Agriculture Reform, Food, and Jobs Act of 2012) 
                        for community facility, water and waste 
                        disposal, and broadband programs, that area 
                        shall remain eligible unless the Secretary, 
                        acting through the Under Secretary for Rural 
                        Development (referred to in this subparagraph 
                        as the `Under Secretary'), determines the area 
                        is no longer rural, based on the criteria 
                        described in clause (iii).
                            ``(ii) Other areas.--On petition of a unit 
                        of local government in an urbanized area 
                        described in subparagraph (A)(ii), or on the 
                        initiative of the Under Secretary, the Under 
                        Secretary may determine that part of an area is 
                        rural, based on the criteria described in 
                        clause (iii).
                            ``(iii) Criteria.--In making a 
                        determination under clause (i), the Under 
                        Secretary shall consider--
                                    ``(I) population density;
                                    ``(II) economic conditions, 
                                favoring a rural determination for 
                                areas facing--
                                            ``(aa) chronic unemployment 
                                        in excess of statewide 
                                        averages;
                                            ``(bb) sudden loss of 
                                        employment from natural 
                                        disaster or the loss of a 
                                        significant employer in the 
                                        area; or
                                            ``(cc) chronic poverty 
                                        demonstrated at the census 
                                        block or county level compared 
                                        to statewide median household 
                                        income; and
                                    ``(III) commuting patterns, 
                                favoring a rural determination for 
                                areas that can demonstrate higher 
                                proportions of the population living 
                                and working in the area.
                            ``(iv) Administration.--In carrying out 
                        this subparagraph, the Under Secretary shall--
                                    ``(I) not delegate the authority to 
                                carry out this subparagraph;
                                    ``(II) not make a determination 
                                under clause (i) until the date that is 
                                3 years after the date of enactment of 
                                the Agriculture Reform, Food, and Jobs 
                                Act of 2012;
                                    ``(III) consult with the applicable 
                                rural development State or regional 
                                director of the Department and the 
                                Governor of the respective State;
                                    ``(IV) provide an opportunity to 
                                appeal to the Under Secretary a 
                                determination made under this 
                                subparagraph;
                                    ``(V) release to the public notice 
                                of a petition filed or initiative of 
                                the Under Secretary under this 
                                subparagraph not later than 30 days 
                                after receipt of the petition or the 
                                commencement of the initiative, as 
                                appropriate;
                                    ``(VI) make a determination under 
                                this subparagraph not less than 15 
                                days, and not more than 60 days, after 
                                the release of the notice under 
                                subclause (V); and
                                    ``(VII) submit to the Committee on 
                                Agriculture of the House of 
                                Representatives and the Committee on 
                                Agriculture, Nutrition, and Forestry of 
                                the Senate an annual report on actions 
                                taken to carry out this subparagraph.
                            ``(v) Hawaii and puerto rico.--
                        Notwithstanding any other provision of this 
                        subsection, within the areas of the County of 
                        Honolulu, Hawaii, and the Commonwealth of 
                        Puerto Rico, the Under Secretary may designate 
                        any part of the areas as a rural area if the 
                        Under Secretary determines that the part is not 
                        urban in character, other than any area 
                        included in the Honolulu Census Designated 
                        Place or the San Juan Census Designated Place.
                    ``(C) Exclusions.--Notwithstanding any other 
                provision of this paragraph, in determining which 
                census blocks in an urbanized area are not in a rural 
                area (as defined in this paragraph), the Secretary 
                shall exclude any cluster of census blocks that would 
                otherwise be considered not in a rural area only 
                because the cluster is adjacent to not more than 2 
                census blocks that are otherwise considered not in a 
                rural area under this paragraph.
            ``(29) Seasoned direct loan borrower.--The term `seasoned 
        direct loan borrower' means a borrower who could reasonably be 
        expected to qualify for commercial credit using criteria 
        determined by the Secretary.
            ``(30) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.
            ``(31) Socially disadvantaged farmer.--The term `socially 
        disadvantaged farmer' means a farmer who is a member of a 
        socially disadvantaged group.
            ``(32) Socially disadvantaged group.--The term `socially 
        disadvantaged group' means a group whose members have been 
        subjected to racial, ethnic, or gender prejudice because of the 
        identity of the members as members of a group without regard to 
        the individual qualities of the members.
            ``(33) Solar energy.--The term `solar energy' means energy 
        derived from sources (other than fossil fuels) and technologies 
        included in the Federal Nonnuclear Energy Research and 
        Development Act of 1974 (42 U.S.C. 5901 et seq.).
            ``(34) State.--The term `State' means--
                    ``(A) in this title (other than subtitle A), each 
                of the 50 States, the Commonwealth of Puerto Rico, the 
                Virgin Islands, Guam, American Samoa, the Commonwealth 
                of the Northern Mariana Islands, the Republic of the 
                Marshall Islands, the Federated States of Micronesia, 
                and the Republic of Palau; and
                    ``(B) in subtitle A, each of the 50 States, the 
                Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
                American Samoa, the Commonwealth of the Northern 
                Mariana Islands, and, to the extent the Secretary 
                determines it to be feasible and appropriate, the 
                Republic of the Marshall Islands, the Federated States 
                of Micronesia, and the Republic of Palau.
            ``(35) State beginning farmer program.--The term `State 
        beginning farmer program' means any program that is--
                    ``(A) carried out by, or under contract with, a 
                State; and
                    ``(B) designed to assist qualified beginning 
                farmers in obtaining the financial assistance necessary 
                to enter agriculture and establish viable farming 
                operations.
            ``(36) Veteran.--The term `veteran' has the meaning given 
        the term in section 101 of title 38, United States Code.
            ``(37) Wetland.--The term `wetland' has the meaning given 
        the term in section 1201(a) of the Food Security Act of 1985 
        (16 U.S.C. 3801(a)).
            ``(38) Wildlife.--The term `wildlife' means fish or 
        wildlife (as defined in section 2(a) of the Lacey Act 
        Amendments of 1981 (16 U.S.C. 3371(a))).

                    ``Subtitle B--Rural Development

                 ``CHAPTER 1--RURAL COMMUNITY PROGRAMS

``SEC. 3501. WATER AND WASTE DISPOSAL LOANS, LOAN GUARANTEES, AND 
              GRANTS.

    ``(a) In General.--The Secretary may make grants and loans and 
issue loan guarantees (including a guarantee of a loan financed by the 
net proceeds of a bond described in section 142(a) of the Internal 
Revenue Code of 1986) to eligible entities described in subsection (b) 
for projects in rural areas that primarily serve rural residents to 
provide for--
            ``(1) the development, storage, treatment, purification, or 
        distribution of water or the collection, treatment, or disposal 
        of waste; and
            ``(2) financial assistance and other aid in the planning of 
        projects for purposes described in paragraph (1).
    ``(b) Eligible Entities.--Entities eligible for assistance 
described in subsection (a) are--
            ``(1) associations (including corporations not operated for 
        profit);
            ``(2) Indian tribes;
            ``(3) public and quasi-public agencies; and
            ``(4) in the case of a project to attach an individual 
        property in a rural area to a water system to alleviate a 
        health risk, an individual.
    ``(c) Loan and Loan Guarantee Requirements.--In connection with 
loans made or guaranteed under this section, the Secretary shall 
require the applicant--
            ``(1) to certify in writing, and the Secretary shall 
        determine, that the applicant is unable to obtain sufficient 
        credit elsewhere to finance the actual needs of the applicant 
        at reasonable rates and terms, taking into consideration 
        prevailing private and cooperative rates and terms in the 
        community in or near which the applicant resides for loans for 
        similar purposes and periods of time; and
            ``(2) to furnish an appropriate written financial 
        statement.
    ``(d) Grant Amounts.--
            ``(1) Maximum.--Except as otherwise provided in this 
        subsection, the amount of any grant made under this section 
        shall not exceed 75 percent of the development cost of the 
        project for which the grant is provided.
            ``(2) Grant rate.--The Secretary shall establish the grant 
        rate for each project in conformity with regulations issued by 
        the Secretary that shall provide for a graduated scale of grant 
        rates that establish higher rates for projects in communities 
        that have--
                    ``(A) lower community population;
                    ``(B) higher rates of outmigration; and
                    ``(C) lower income levels.
            ``(3) Local share requirements.--Grants made under this 
        section may be used to pay the local share requirements of 
        another Federal grant-in-aid program to the extent permitted 
        under the law providing for the grant-in-aid program.
    ``(e) Special Grants.--
            ``(1) Revolving funds for financing water and wastewater 
        projects.--
                    ``(A) In general.--The Secretary may make grants to 
                qualified, nonprofit entities in rural areas to 
                capitalize revolving funds for the purpose of providing 
                financing to eligible entities for--
                            ``(i) predevelopment costs associated with 
                        proposed water and wastewater projects or with 
                        existing water and wastewater systems; and
                            ``(ii) short-term costs incurred for 
                        replacement equipment, small-scale extension 
                        services, or other small capital projects that 
                        are not part of the regular operations and 
                        maintenance activities of existing water and 
                        wastewater systems.
                    ``(B) Maximum amount of financing.--The amount of 
                financing made to an eligible entity under this 
                paragraph shall not exceed--
                            ``(i) $100,000 for costs described in 
                        subparagraph (A)(i); and
                            ``(ii) $100,000 for costs described in 
                        subparagraph (A)(ii).
                    ``(C) Term.--The term of financing provided to an 
                eligible entity under this paragraph shall not exceed 
                10 years.
                    ``(D) Administration.--The Secretary shall limit 
                the amount of grant funds that may be used by a grant 
                recipient for administrative costs incurred under this 
                paragraph.
                    ``(E) Annual report.--A nonprofit entity receiving 
                a grant under this paragraph shall submit to the 
                Secretary an annual report that describes the number 
                and size of communities served and the type of 
                financing provided.
                    ``(F) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $30,000,000 for each of fiscal years 2013 
                through 2017.
            ``(2) Emergency and imminent community water assistance 
        program.--
                    ``(A) In general.--The Secretary shall provide 
                grants in accordance with this paragraph to assist the 
                residents of rural areas and small communities to 
                secure adequate quantities of safe water--
                            ``(i) after a significant decline in the 
                        quantity or quality of water available from the 
                        water supplies of the rural areas and small 
                        communities, or when such a decline is 
                        imminent; or
                            ``(ii) when repairs, partial replacement, 
                        or significant maintenance efforts on 
                        established water systems would remedy--
                                    ``(I) an acute or imminent shortage 
                                of quality water; or
                                    ``(II) a significant or imminent 
                                decline in the quantity or quality of 
                                water that is available.
                    ``(B) Priority.--In carrying out subparagraph (A), 
                the Secretary shall--
                            ``(i) give priority to projects described 
                        in subparagraph (A)(i); and
                            ``(ii) provide at least 70 percent of all 
                        grants under this paragraph to those projects.
                    ``(C) Eligibility.--To be eligible to obtain a 
                grant under this paragraph, an applicant shall--
                            ``(i) be a public or private nonprofit 
                        entity; and
                            ``(ii) in the case of a grant made under 
                        subparagraph (A)(i), demonstrate to the 
                        Secretary that the decline referred to in that 
                        subparagraph occurred, or will occur, not later 
                        than 2 years after the date on which the 
                        application was filed for the grant.
                    ``(D) Uses.--
                            ``(i) In general.--Grants made under this 
                        paragraph may be used--
                                    ``(I) for waterline extensions from 
                                existing systems, laying of new 
                                waterlines, repairs, significant 
                                maintenance, digging of new wells, 
                                equipment replacement, and hook and tap 
                                fees;
                                    ``(II) for any other appropriate 
                                purpose associated with developing 
                                sources of, treating, storing, or 
                                distributing water;
                                    ``(III) to assist communities in 
                                complying with the requirements of the 
                                Federal Water Pollution Control Act (33 
                                U.S.C. 1251 et seq.) or the Safe 
                                Drinking Water Act (42 U.S.C. 300f et 
                                seq.); and
                                    ``(IV) to provide potable water to 
                                communities through other means.
                            ``(ii) Joint proposals.--
                                    ``(I) In general.--Subject to the 
                                restrictions in subparagraph (E), 
                                nothing in this paragraph precludes 
                                rural communities from submitting joint 
                                proposals for emergency water 
                                assistance.
                                    ``(II) Consideration of 
                                restrictions.--The restrictions in 
                                subparagraph (E) shall be considered in 
                                the aggregate, depending on the number 
                                of communities involved.
                    ``(E) Restrictions.--
                            ``(i) Maximum income.--No grant provided 
                        under this paragraph shall be used to assist 
                        any rural area or community that has a median 
                        household income in excess of the State 
                        nonmetropolitan median household income 
                        according to the most recent decennial census 
                        of the United States.
                            ``(ii) Set-aside for smaller communities.--
                        Not less than 50 percent of the funds allocated 
                        under this paragraph shall be allocated to 
                        rural communities with populations that do not 
                        exceed 3,000 inhabitants.
                    ``(F) Maximum grants.--Grants made under this 
                paragraph may not exceed--
                            ``(i) in the case of each grant made under 
                        subparagraph (A)(i), $500,000; and
                            ``(ii) in the case of each grant made under 
                        subparagraph (A)(ii), $150,000.
                    ``(G) Full funding.--Subject to subparagraph (F), 
                grants under this paragraph shall be made in an amount 
                equal to 100 percent of the costs of the projects 
                conducted under this paragraph.
                    ``(H) Application.--
                            ``(i) Nationally competitive application 
                        process.--
                                    ``(I) In general.--The Secretary 
                                shall develop a nationally competitive 
                                application process to award grants 
                                under this paragraph.
                                    ``(II) Requirements.--The process 
                                shall include criteria for evaluating 
                                applications, including population, 
                                median household income, and the 
                                severity of the decline, or imminent 
                                decline, in the quantity or quality of 
                                water.
                            ``(ii) Timing of review of applications.--
                                    ``(I) Simplified application.--The 
                                application process developed by the 
                                Secretary under clause (i) shall 
                                include a simplified application form 
                                that will permit expedited 
                                consideration of an application for a 
                                grant filed under this paragraph.
                                    ``(II) Priority review.--In 
                                processing applications for any water 
                                or waste grant or loan authorized under 
                                this section, the Secretary shall 
                                afford priority processing to an 
                                application for a grant under this 
                                paragraph to the extent funds will be 
                                available for an award on the 
                                application at the conclusion of 
                                priority processing.
                                    ``(III) Timing.--The Secretary 
                                shall, to the maximum extent 
                                practicable, review and act on an 
                                application under this paragraph not 
                                later than 60 days after the date on 
                                which the application is submitted to 
                                the Secretary.
                    ``(I) Funding.--
                            ``(i) Reservation.--
                                    ``(I) In general.--For each fiscal 
                                year, not less than 3 nor more than 5 
                                percent of the total amount made 
                                available to carry out this section for 
                                the fiscal year shall be reserved for 
                                grants under this paragraph.
                                    ``(II) Release.--Funds reserved 
                                under subclause (I) for a fiscal year 
                                shall be reserved only until July 1 of 
                                the fiscal year.
                            ``(ii) Authorization of appropriations.--In 
                        addition to funds made available under clause 
                        (i), there is authorized to be appropriated to 
                        carry out this paragraph $35,000,000 for each 
                        of fiscal years 2013 through 2017.
            ``(3) Water and waste facility loans and grants to 
        alleviate health risks.--
                    ``(A) Definition of cooperative.--In this 
                paragraph, the term `cooperative' means a cooperative 
                formed specifically for the purpose of the 
                installation, expansion, improvement, or operation of 
                water supply or waste disposal facilities or systems.
                    ``(B) Loans and grants to persons other than 
                individuals.--
                            ``(i) In general.--The Secretary shall make 
                        or guarantee loans and make grants to provide 
                        for the conservation, development, use, and 
                        control of water (including the extension or 
                        improvement of existing water supply systems) 
                        and the installation or improvement of drainage 
                        or waste disposal facilities and essential 
                        community facilities, including necessary 
                        related equipment, training, and technical 
                        assistance to--
                                    ``(I) rural water supply 
                                corporations, cooperatives, or similar 
                                entities;
                                    ``(II) Indian tribes on Federal or 
                                State reservations and other federally 
                                recognized Indian tribes;
                                    ``(III) rural or native villages in 
                                the State of Alaska;
                                    ``(IV) native tribal health 
                                consortiums;
                                    ``(V) public agencies; and
                                    ``(VI) Native Hawaiian Home Lands.
                            ``(ii) Eligible projects.--Loans and grants 
                        described in clause (i) shall be available only 
                        to provide the described water and waste 
                        facilities and services to communities whose 
                        residents face significant health risks, as 
                        determined by the Secretary, due to the fact 
                        that a significant proportion of the residents 
                        of the community do not have access to, or are 
                        not served by, adequate affordable--
                                    ``(I) water supply systems; or
                                    ``(II) waste disposal facilities.
                            ``(iii) Matching requirements.--For 
                        entities described under subclauses (III), 
                        (IV), or (V) of clause (i) to be eligible to 
                        receive a grant for water supply systems or 
                        waste disposal facilities, the State in which 
                        the project will occur shall provide 25 percent 
                        in matching funds from non-Federal sources.
                            ``(iv) Certain areas targeted.--
                                    ``(I) In general.--Loans and grants 
                                under clause (i) shall be made only if 
                                the loan or grant funds will be used 
                                primarily to provide water or waste 
                                services, or both, to residents of a 
                                county or census area--
                                            ``(aa) the per capita 
                                        income of the residents of 
                                        which is not more than 70 
                                        percent of the national average 
                                        per capita income, as 
                                        determined by the Department of 
                                        Commerce; and
                                            ``(bb) the unemployment 
                                        rate of the residents of which 
                                        is not less than 125 percent of 
                                        the national average 
                                        unemployment rate, as 
                                        determined by the Bureau of 
                                        Labor Statistics.
                                    ``(II) Exceptions.--Notwithstanding 
                                subclause (I), loans and grants under 
                                clause (i) may also be made if the loan 
                                or grant funds will be used primarily 
                                to provide water or waste services, or 
                                both, to residents of--
                                            ``(aa) a rural area that 
                                        was recognized as a colonia as 
                                        of October 1, 1989; or
                                            ``(bb) an area described 
                                        under subclause (II), (III), or 
                                        (VI) of clause (i).
                    ``(C) Loans and grants to individuals.--
                            ``(i) In general.--The Secretary shall make 
                        or guarantee loans and make grants to 
                        individuals who reside in a community described 
                        in subparagraph (B)(i) for the purpose of 
                        extending water supply and waste disposal 
                        systems, connecting the systems to the 
                        residences of the individuals, or installing 
                        plumbing and fixtures within the residences of 
                        the individuals to facilitate the use of the 
                        water supply and waste disposal systems.
                            ``(ii) Interest.--Loans described in clause 
                        (i) shall be at a rate of interest no greater 
                        than the Federal Financing Bank rate on loans 
                        of a similar term at the time the loans are 
                        made.
                            ``(iii) Amortization.--The repayment of 
                        loans described in clause (i) shall be 
                        amortized over the expected life of the water 
                        supply or waste disposal system to which the 
                        residence of the borrower will be connected.
                            ``(iv) Manner in which loans and grants are 
                        to be made.--Loans and grants to individuals 
                        under clause (i) shall be made--
                                    ``(I) directly to the individuals 
                                by the Secretary; or
                                    ``(II) to the individuals through 
                                the rural water supply corporation, 
                                cooperative, or similar entity, or 
                                public agency, providing the water 
                                supply or waste disposal services, 
                                pursuant to regulations issued by the 
                                Secretary.
                    ``(D) Preference.--The Secretary shall give 
                preference in the awarding of loans and grants under 
                subparagraphs (B) and (C) to entities described in 
                clause (i) of subparagraph (B) that propose to provide 
                water supply or waste disposal services to the 
                residents of Indian reservations, rural or native 
                villages in the State of Alaska, Native Hawaiian Home 
                Lands, and those rural subdivisions commonly referred 
                to as colonias, that are characterized by substandard 
                housing, inadequate roads and drainage, and a lack of 
                adequate water or waste facilities.
                    ``(E) Relationship to other authority.--
                Notwithstanding any other provision of law, the head of 
                any Federal agency may enter into interagency 
                agreements with Federal, State, tribal, and other 
                entities to share resources, including transferring and 
                accepting funds, equipment, or other supplies, to carry 
                out the activities described in this paragraph.
                    ``(F) Authorization of appropriations.--There are 
                authorized to be appropriated--
                            ``(i) for grants under this paragraph, 
                        $60,000,000 for each fiscal year;
                            ``(ii) for loans under this paragraph, 
                        $60,000,000 for each fiscal year; and
                            ``(iii) in addition to grants provided 
                        under clause (i), for grants under this section 
                        to benefit Indian tribes, $20,000,000 for each 
                        fiscal year.
            ``(4) Solid waste management grants.--
                    ``(A) In general.--The Secretary may make grants to 
                nonprofit organizations for the provision of regional 
                technical assistance to local and regional governments 
                and related agencies for the purpose of reducing or 
                eliminating pollution of water resources and improving 
                the planning and management of solid waste disposal 
                facilities in rural areas.
                    ``(B) Technical assistance grant amounts.--Grants 
                made under this paragraph for the provision of 
                technical assistance shall be made for 100 percent of 
                the cost of the technical assistance.
                    ``(C) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $10,000,000 for each of fiscal years 2013 
                through 2017
            ``(5) Rural water and wastewater technical assistance and 
        training programs.--
                    ``(A) Grants to nonprofits.--
                            ``(i) In general.--The Secretary may make 
                        grants to nonprofit organizations to enable the 
                        organizations to provide to associations that 
                        provide water and wastewater services in rural 
                        areas technical assistance and training--
                                    ``(I) to identify, and evaluate 
                                alternative solutions to, problems 
                                relating to the obtaining, storage, 
                                treatment, purification, or 
                                distribution of water or the 
                                collection, treatment, or disposal of 
                                waste in rural areas;
                                    ``(II) to prepare applications to 
                                receive financial assistance for any 
                                purpose specified in subsection (a)(1) 
                                from any public or private source; and
                                    ``(III) to improve the operation 
                                and maintenance practices at any 
                                existing works for the storage, 
                                treatment, purification, or 
                                distribution of water or the 
                                collection, treatment, or disposal of 
                                waste in rural areas.
                            ``(ii) Selection priority.--In selecting 
                        recipients of grants to be made under clause 
                        (i), the Secretary shall give priority to 
                        nonprofit organizations that have experience in 
                        providing the technical assistance and training 
                        described in clause (i) to associations serving 
                        rural areas in which--
                                    ``(I) residents have low income; 
                                and
                                    ``(II) water supply systems or 
                                waste facilities are unhealthful.
                            ``(iii) Funding.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), not less 
                                than 1 nor more than 3 percent of any 
                                funds made available to carry out water 
                                and waste disposal projects described 
                                in subsection (a) for any fiscal year 
                                shall be reserved for grants under this 
                                paragraph.
                                    ``(II) Exception.--The minimum 
                                amount specified in subclause (I) shall 
                                not apply if the aggregate amount of 
                                grant funds requested by applications 
                                that qualify for grants received by the 
                                Secretary from eligible nonprofit 
                                organizations for the fiscal year 
                                totals less than 1 percent of those 
                                funds.
                    ``(B) Rural water and wastewater circuit rider 
                program.--
                            ``(i) In general.--The Secretary shall 
                        continue a national rural water and wastewater 
                        circuit rider program that--
                                    ``(I) is consistent with the 
                                activities and results of the program 
                                conducted before January 1, 2012, as 
                                determined by the Secretary; and
                                    ``(II) received funding from the 
                                Secretary, acting through the 
                                Administrator of the Rural Utilities 
                                Service.
                            ``(ii) Authorization of appropriations.--
                        There is authorized to be appropriated to carry 
                        out this subparagraph $25,000,000 for fiscal 
                        year 2013 and each fiscal year thereafter.
            ``(6) SEARCH program.--
                    ``(A) In general.--The Secretary may establish a 
                Special Evaluation Assistance for Rural Communities and 
                Households (SEARCH) program to make predevelopment 
                planning grants for feasibility studies, design 
                assistance, and technical assistance, to financially 
                distressed communities in rural areas with populations 
                of 2,500 or fewer inhabitants for water and waste 
                disposal projects described in this section.
                    ``(B) Terms.--
                            ``(i) Documentation.--With respect to 
                        grants made under this paragraph, the Secretary 
                        shall require the lowest quantity of 
                        documentation practicable.
                            ``(ii) Matching.--Notwithstanding any other 
                        provision of this section, the Secretary may 
                        fund up to 100 percent of the eligible costs of 
                        grants provided under this paragraph, as 
                        determined by the Secretary.
                            ``(iii) Funding.--The Secretary may use not 
                        more than 4 percent of the total amount of 
                        funds made available for a fiscal year for 
                        water, waste disposal, and essential community 
                        facility activities under this chapter to carry 
                        out this paragraph.
                    ``(C) Relationship to other authority.--
                            ``(i) In general.--The funds and 
                        authorities provided under this paragraph are 
                        in addition to any other funds or authorities 
                        the Secretary may have to carry out activities 
                        described in this section.
                            ``(ii) Authorized activities.--The 
                        Secretary may furnish financial assistance or 
                        other aid in planning projects for the purposes 
                        described in subparagraph (A).
    ``(f) Priority.--In making grants and loans, and guaranteeing 
loans, for water, wastewater, and waste disposal projects under this 
section, the Secretary shall give priority consideration to projects 
that serve rural communities that, as determined by the Secretary--
            ``(1) have a population of less than 5,500 permanent 
        residents;
            ``(2) have a community water, wastewater, or waste disposal 
        system that--
                    ``(A) is experiencing--
                            ``(i) an unanticipated reduction in the 
                        quality of water, the quantity of water, or the 
                        ability to deliver water; or
                            ``(ii) some other deterioration in the 
                        supply of water to the community;
                    ``(B) is not adequate to meet the needs of the 
                community; and
                    ``(C) requires immediate corrective action;
            ``(3) are experiencing outmigration;
            ``(4) have a high percentage of low-income residents; or
            ``(5) are isolated from other significant population 
        centers.
    ``(g) Curtailment or Limitation of Service Prohibited.--The service 
provided or made available through any such association shall not be 
curtailed or limited by inclusion of the area served by such 
association within the boundaries of any municipal corporation or other 
public body, or by the granting of any private franchise for similar 
service within such area during the term of such loan; nor shall the 
happening of any such event be the basis of requiring such association 
to secure any franchise, license, or permit as a condition to 
continuing to serve the area served by the association at the time of 
the occurrence of such event.
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as are necessary.

``SEC. 3502. COMMUNITY FACILITIES LOANS, LOAN GUARANTEES, AND GRANTS.

    ``(a) In General.--The Secretary may make grants and loans and 
issue loan guarantees (including a guarantee of a loan financed by the 
net proceeds of a bond described in section 142(a) of the Internal 
Revenue Code of 1986) to eligible entities described in subsection (b) 
for projects in rural areas that primarily serve rural residents to 
provide for--
            ``(1) essential community facilities, including--
                    ``(A) necessary equipment;
                    ``(B) recreational developments; and
            ``(2) financial assistance and other assistance in the 
        planning of projects for purposes described in this section.
    ``(b) Eligible Entities.--Entities eligible for assistance 
described in subsection (a) are--
            ``(1) associations (including corporations not operated for 
        profit);
            ``(2) Indian tribes (including groups of individuals 
        described in paragraph (4) of section 815 of the Native 
        American Programs Act of 1974 (42 U.S.C. 2992c)); and
            ``(3) public and quasi-public agencies.
    ``(c) Loan and Loan Guarantee Requirements.--
            ``(1) In general.--In connection with loans made or 
        guaranteed under this section, the Secretary shall require the 
        applicant--
                    ``(A) to certify in writing, and the Secretary 
                shall determine, that the applicant is unable to obtain 
                sufficient credit elsewhere to finance the actual needs 
                of the applicant; and
                    ``(B) to furnish an appropriate written financial 
                statement.
            ``(2) Debt restructuring and loan servicing for community 
        facility loans.--The Secretary shall establish and implement a 
        program that is similar to the program established under 
        section 3411, except that the debt restructuring and loan 
        servicing procedures shall apply to delinquent community 
        facility program loans to a hospital or health care facility 
        under subsection (a).
    ``(d) Grant Amounts.--
            ``(1) Maximum.--Except as otherwise provided in this 
        subsection, the amount of any grant made under this section 
        shall not exceed 75 percent of the development cost of the 
        project for which the grant is provided.
            ``(2) Grant rate.--The Secretary shall establish the grant 
        rate for each project in conformity with regulations issued by 
        the Secretary that shall provide for a graduated scale of grant 
        rates that establish higher rates for projects in communities 
        that have--
                    ``(A) low community population;
                    ``(B) high rates of outmigration; and
                    ``(C) low income levels.
            ``(3) Local share requirements.--Grants made under this 
        section may be used to pay the local share requirements of 
        another Federal grant-in-aid program to the extent permitted 
        under the law providing for the grant-in-aid program.
    ``(e) Priority.--In making grants and loans, and guaranteeing loans 
under this section, the Secretary shall give priority consideration to 
projects that serve rural communities that--
            ``(1) have a population of less than 20,000 permanent 
        residents;
            ``(2) are experiencing outmigration;
            ``(3) have a high percentage of low-income residents; or
            ``(4) are isolated from other significant population 
        centers.
    ``(f) Tribal Colleges and Universities.--
            ``(1) In general.--The Secretary may make grants to an 
        entity that is a Tribal College or University (as defined in 
        section 316(b) of the Higher Education Act of 1965 (20 U.S.C. 
        1059c(b))) to provide the Federal share of the cost of 
        developing specific Tribal College or University essential 
        community facilities in rural areas.
            ``(2) Federal share.--The Secretary shall establish the 
        maximum percentage of the cost of the project that may be 
        covered by a grant under this subsection, except that the 
        Secretary may not require non-Federal financial support in an 
        amount that is greater than 5 percent of the total cost of the 
        project.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $10,000,000 for 
        each of fiscal years 2013 through 2017.
    ``(g) Technical Assistance for Community Facilities Projects.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        may use funds made available for community facilities programs 
        authorized under this section to provide technical assistance 
        to applicants and participants for community facilities 
        programs.
            ``(2) Funding.--The Secretary may use not more than 3 
        percent of the amount of funds made available to participants 
        for a fiscal year for a community facilities program to provide 
        technical assistance described in paragraph (1).
    ``(h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as are necessary.

``SEC. 3503. HEALTH CARE SERVICES.

    ``(a) Purpose.--The purpose of this section is to address the 
continued unmet health needs in the Delta region through cooperation 
among health care professionals, institutions of higher education, 
research institutions, and other individuals and entities in the 
region.
    ``(b) Definition of Eligible Entity.--In this section, the term 
`eligible entity' means a consortium of regional institutions of higher 
education, academic health and research institutes, and economic 
development entities located in the Delta region that have experience 
in addressing the health care issues in the region.
    ``(c) Grants.--To carry out the purpose described in subsection 
(a), the Secretary may award a grant to an eligible entity for--
            ``(1) the development of--
                    ``(A) health care services;
                    ``(B) health education programs; and
                    ``(C) health care job training programs; and
            ``(2) the development and expansion of public health-
        related facilities in the Delta region to address longstanding 
        and unmet health needs of the region.
    ``(d) Use.--As a condition of the receipt of the grant, the 
eligible entity shall use the grant to fund projects and activities 
described in subsection (c), based on input solicited from local 
governments, public health care providers, and other entities in the 
Delta region.
    ``(e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary to carry out this section $3,000,000 for 
each of fiscal years 2013 through 2017.

        ``CHAPTER 2--RURAL BUSINESS AND COOPERATIVE DEVELOPMENT

``SEC. 3601. BUSINESS PROGRAMS.

    ``(a) Rural Business Development Grants.--
            ``(1) In general.--The Secretary may make grants under this 
        subsection to eligible entities described in paragraph (2) in 
        rural areas that primarily serve rural areas for purposes 
        described in paragraph (3).
            ``(2) Eligible entities.--The Secretary may make grants 
        under this subsection to--
                    ``(A) governmental entities;
                    ``(B) Indian tribes; and
                    ``(C) nonprofit entities.
            ``(3) Eligible purposes for grants.--Eligible entities that 
        receive grants under this subsection may use the grant funds 
        for--
                    ``(A) business opportunity projects that--
                            ``(i) identify and analyze business 
                        opportunities;
                            ``(ii) identify, train, and provide 
                        technical assistance to existing or prospective 
                        rural entrepreneurs and managers;
                            ``(iii) assist in the establishment of new 
                        rural businesses and the maintenance of 
                        existing businesses, including through business 
                        support centers;
                            ``(iv) conduct regional, community, and 
                        local economic development planning and 
                        coordination, and leadership development; and
                            ``(v) establish centers for training, 
                        technology, and trade that will provide 
                        training to rural businesses in the use of 
                        interactive communications technologies to 
                        develop international trade opportunities and 
                        markets; and
                    ``(B) projects that support the development of 
                business enterprises that finance or facilitate--
                            ``(i) the development of small and emerging 
                        private business enterprise;
                            ``(ii) the establishment, expansion, and 
                        operation of rural distance learning networks;
                            ``(iii) the development of rural learning 
                        programs that provide educational instruction 
                        or job training instruction related to 
                        potential employment or job advancement to 
                        adult students; and
                            ``(iv) the provision of technical 
                        assistance and training to rural communities 
                        for the purpose of improving passenger 
                        transportation services or facilities.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to the Secretary to carry out this 
        subsection $65,000,000 for each of fiscal years 2013 through 
        2017, to remain available until expended.
    ``(b) Value-added Agricultural Producer Grants.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Mid-tier value chain.--The term `mid-tier 
                value chain' means a local and regional supply network 
                that links independent producers with businesses and 
                cooperatives that market value-added agricultural 
                products in a manner that--
                            ``(i) targets and strengthens the 
                        profitability and competitiveness of small- and 
                        medium-sized farms that are structured as 
                        family farms; and
                            ``(ii) obtains agreement from an eligible 
                        agricultural producer group, farmer 
                        cooperative, or majority-controlled producer-
                        based business venture that is engaged in the 
                        value chain on a marketing strategy.
                    ``(B) Producer.--The term `producer' means a 
                farmer.
                    ``(C) Value-added agricultural product.--The term 
                `value-added agricultural product' means any 
                agricultural commodity or product--
                            ``(i) that--
                                    ``(I) has undergone a change in 
                                physical state;
                                    ``(II) was produced in a manner 
                                that enhances the value of the 
                                agricultural commodity or product, as 
                                demonstrated through a business plan 
                                that shows the enhanced value, as 
                                determined by the Secretary;
                                    ``(III) is physically segregated in 
                                a manner that results in the 
                                enhancement of the value of the 
                                agricultural commodity or product;
                                    ``(IV) is a source of farm-based 
                                renewable energy, including E-85 fuel; 
                                or
                                    ``(V) is aggregated and marketed as 
                                a locally produced agricultural food 
                                product; and
                            ``(ii) for which, as a result of the change 
                        in physical state or the manner in which the 
                        agricultural commodity or product was produced, 
                        marketed, or segregated--
                                    ``(I) the customer base for the 
                                agricultural commodity or product is 
                                expanded; and
                                    ``(II) a greater portion of the 
                                revenue derived from the marketing, 
                                processing, or physical segregation of 
                                the agricultural commodity or product 
                                is available to the producer of the 
                                commodity or product.
            ``(2) Grants.--
                    ``(A) In general.--The Secretary may make grants 
                under this subsection to--
                            ``(i) independent producers of value-added 
                        agricultural products; and
                            ``(ii) an agricultural producer group, 
                        farmer cooperative, or majority-controlled 
                        producer-based business venture, as determined 
                        by the Secretary.
                    ``(B) Grants to a producer.--A grantee under 
                subparagraph (A)(i) shall use the grant--
                            ``(i) to develop a business plan or perform 
                        a feasibility study to establish a viable 
                        marketing opportunity (including through mid-
                        tier value chains) for value-added agricultural 
                        products; or
                            ``(ii) to provide capital to establish 
                        alliances or business ventures that allow the 
                        producer to better compete in domestic or 
                        international markets.
                    ``(C) Grants to an agricultural producer group, 
                cooperative or producer-based business venture.--A 
                grantee under subparagraph (A)(ii) shall use the 
                grant--
                            ``(i) to develop a business plan for viable 
                        marketing opportunities in emerging markets for 
                        a value-added agricultural product; or
                            ``(ii) to develop strategies that are 
                        intended to create marketing opportunities in 
                        emerging markets for the value-added 
                        agricultural product.
                    ``(D) Award selection.--
                            ``(i) Priority.--In awarding grants under 
                        this subsection, the Secretary shall give 
                        priority to projects--
                                    ``(I) that contribute to increasing 
                                opportunities for operators of small- 
                                and medium-sized farms that are 
                                structured as family farms; or
                                    ``(II) at least \1/4\ of the 
                                recipients of which are beginning 
                                farmers or socially disadvantaged 
                                farmers.
                            ``(ii) Ranking.--In evaluating and ranking 
                        proposals under this subsection, the Secretary 
                        shall provide substantial weight to the 
                        priorities described in clause (i).
                    ``(E) Amount of grant.--
                            ``(i) In general.--The total amount 
                        provided to a grant recipient under this 
                        subsection shall not exceed $500,000.
                            ``(ii) Majority-controlled, producer-based 
                        business ventures.--The total amount of all 
                        grants provided to majority-controlled, 
                        producer-based business ventures under this 
                        subsection for a fiscal year shall not exceed 
                        10 percent of the amount of funds used to make 
                        all grants for the fiscal year under this 
                        subsection.
                    ``(F) Term.--The term of a grant under this 
                paragraph shall not exceed 3 years.
                    ``(G) Simplified application.--The Secretary shall 
                offer a simplified application form and process for 
                project proposals requesting less than $50,000 under 
                this subsection.
            ``(3) Funding.--
                    ``(A) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                subsection $40,000,000 for each of fiscal years 2013 
                through 2017.
                    ``(B) Reservation of funds for projects to benefit 
                beginning farmers, socially disadvantaged farmers, and 
                mid-tier value chains.--
                            ``(i) In general.--The Secretary shall 
                        reserve 10 percent of the amounts made 
                        available for each fiscal year under this 
                        subsection to fund projects that benefit 
                        beginning farmers or socially disadvantaged 
                        farmers.
                            ``(ii) Mid-tier value chains.--The 
                        Secretary shall reserve 10 percent of the 
                        amounts made available for each fiscal year 
                        under this subsection to fund applications of 
                        eligible entities described in paragraph (2) 
                        that propose to develop mid-tier value chains.
                            ``(iii) Unobligated amounts.--Any amounts 
                        in the reserves for a fiscal year established 
                        under clauses (i) and (ii) that are not 
                        obligated by June 30 of the fiscal year shall 
                        be available to the Secretary to make grants 
                        under this subsection to eligible entities in 
                        any State, as determined by the Secretary.
                    ``(C) Mandatory funding.--Of the funds of the 
                Commodity Credit Corporation, the Secretary shall use 
                to carry out this subsection $12,500,000 for each of 
                fiscal years 2014 through 2017, to remain available 
                until expended.
    ``(c) 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--
                            ``(i) the several States; and
                            ``(ii) the District of Columbia.
            ``(2) Grants.--The Secretary shall make grants under this 
        subsection to nonprofit institutions for the purpose of 
        enabling the nonprofit 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.--
                    ``(A) In general.--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 1 or 
                more centers for cooperative development.
                    ``(B) Requirements.--The Secretary may approve an 
                application if the plan contains the following:
                            ``(i) A provision that substantiates that 
                        the center will effectively serve rural areas 
                        in the United States.
                            ``(ii) A provision that the primary 
                        objective of the center will be to improve the 
                        economic condition of rural areas through 
                        cooperative development.
                            ``(iii) A description of the activities 
                        that the center will carry out to accomplish 
                        the objective, which may include programs--
                                    ``(I) 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) 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) providing training and 
                                instruction for individuals, 
                                cooperatives, small businesses, and 
                                other similar entities in rural areas 
                                served by the center;
                                    ``(IV) providing loans and grants 
                                to individuals, cooperatives, small 
                                businesses, and other similar entities 
                                in rural areas served by the center;
                                    ``(V) providing technical 
                                assistance, research services, and 
                                advisory services to individuals, 
                                cooperatives, small businesses, and 
                                other similar entities in rural areas 
                                served by the center; and
                                    ``(VI) providing for the 
                                coordination of services and sharing of 
                                information by the center.
                            ``(iv) 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.
                            ``(v) Provisions that the center, in 
                        carrying out the activities, will seek, if 
                        appropriate, the advice, participation, 
                        expertise, and assistance of representatives of 
                        business, industry, educational institutions, 
                        the Federal Government, and State and local 
                        governments.
                            ``(vi) 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.
                            ``(vii) Provisions for--
                                    ``(I) monitoring and evaluating the 
                                activities by the nonprofit institution 
                                operating the center; and
                                    ``(II) accounting for funds 
                                received by the institution under this 
                                section.
            ``(5) Awarding grants.--
                    ``(A) In general.--Grants made under paragraph (2) 
                shall be made on a competitive basis.
                    ``(B) Preference.--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--
                            ``(i) demonstrate a proven track record in 
                        carrying out activities to promote and assist 
                        the development of cooperatively and mutually 
                        owned businesses;
                            ``(ii) demonstrate previous expertise in 
                        providing technical assistance in rural areas 
                        to promote and assist the development of 
                        cooperatively and mutually owned businesses;
                            ``(iii) 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;
                            ``(iv) commit to providing technical 
                        assistance and other services to underserved 
                        and economically distressed areas in rural 
                        areas of the United States;
                            ``(v) demonstrate a commitment to--
                                    ``(I) networking with and sharing 
                                the results of the efforts of the 
                                center with other cooperative 
                                development centers and other 
                                organizations involved in rural 
                                economic development efforts; and
                                    ``(II) developing multiorganization 
                                and multistate approaches to addressing 
                                the economic development and 
                                cooperative needs of rural areas; and
                            ``(vi) commit to providing a 25 percent 
                        matching contribution with private funds and 
                        in-kind contributions, except that the 
                        Secretary shall not require non-Federal 
                        financial support in an amount that is greater 
                        than 5 percent in the case of a 1994 
                        institution (as defined in section 532 of the 
                        Equity in Educational Land-Grant Status Act of 
                        1994 (7 U.S.C. 301 note; Public Law 103-382)).
            ``(6) Grant period.--
                    ``(A) In general.--A grant awarded to a center that 
                has received no prior funding under this subsection 
                shall be made for a period of 1 year.
                    ``(B) Multiyear grants.--If the Secretary 
                determines it to be in the best interest of the 
                program, the Secretary shall award grants for a period 
                of more than 1 year, but not more than 3 years, to a 
                center that has successfully met the requirements of 
                paragraph (5)(B), as determined by the Secretary.
            ``(7) Authority to extend grant period.--The Secretary may 
        extend for 1 additional 12-month period the period during which 
        a grantee may use a grant made under this subsection.
            ``(8) Technical assistance to prevent excessive 
        unemployment or underemployment.--
                    ``(A) In general.--In carrying out this subsection, 
                the Secretary may provide technical assistance to 
                alleviate or prevent conditions of excessive 
                unemployment, underemployment, outmigration, or low 
                employment growth in economically distressed rural 
                areas that the Secretary determines have a substantial 
                need for the assistance.
                    ``(B) Inclusions.--The assistance may include 
                planning and feasibility studies, management and 
                operational assistance, and studies evaluating the need 
                for the development potential of projects that increase 
                employment and improve economic growth in the areas.
            ``(9) Grants to defray administrative costs.--
                    ``(A) In general.--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.
                    ``(B) Cost-sharing.--For purposes of determining 
                the non-Federal share of the costs, the Secretary shall 
                include contributions in cash and in kind, fairly 
                evaluated, including premises, equipment, and services.
            ``(10) Cooperative research program.--The Secretary shall 
        offer to enter into a cooperative research agreement with 1 or 
        more qualified academic institutions in each fiscal year to 
        conduct research on the effects of all types of cooperatives on 
        the national economy.
            ``(11) Addressing needs of minority communities.--
                    ``(A) In general.--If the total amount appropriated 
                under paragraph (13) for a fiscal year exceeds 
                $7,500,000, the Secretary shall reserve an amount equal 
                to 20 percent of the total amount appropriated for 
                grants for cooperative development centers, individual 
                cooperatives, or groups of cooperatives--
                            ``(i) that serve socially disadvantaged 
                        groups; and
                            ``(ii) a majority of the boards of 
                        directors or governing boards of which are 
                        comprised of individuals who are members of 
                        socially disadvantaged groups.
                    ``(B) Insufficient applications.--To the extent 
                there are insufficient applications to carry out 
                subparagraph (A), the Secretary shall use the funds as 
                otherwise authorized by this subsection.
            ``(12) Interagency working group.--Not later than 90 days 
        after the date of enactment of the Agriculture Reform, Food, 
        and Jobs Act of 2012, the Secretary shall coordinate and chair 
        an interagency working group to foster cooperative development 
        and ensure coordination with Federal agencies and national and 
        local cooperative organizations that have cooperative programs 
        and interests.
            ``(13) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this subsection 
        $50,000,000 for each of fiscal years 2013 through 2017.
    ``(d) Appropriate Technology Transfer for Rural Areas Program.--
            ``(1) Definition of national nonprofit agricultural 
        assistance institution.--In this subsection, the term `national 
        nonprofit agricultural assistance institution' means an 
        organization that--
                    ``(A) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986 and exempt from taxation 
                under 501(a) of that Code;
                    ``(B) has staff and offices in multiple regions of 
                the United States;
                    ``(C) has experience and expertise in operating 
                national agricultural technical assistance programs;
                    ``(D) expands markets for the agricultural 
                commodities produced by producers through the use of 
                practices that enhance the environment, natural 
                resource base, and quality of life; and
                    ``(E) improves the economic viability of 
                agricultural operations.
            ``(2) Establishment.--The Secretary shall establish a 
        national appropriate technology transfer for rural areas 
        program to assist agricultural producers that are seeking 
        information--
                    ``(A) to reduce input costs;
                    ``(B) to conserve energy resources;
                    ``(C) to diversify operations through new energy 
                crops and energy generation facilities; and
                    ``(D) to expand markets for agricultural 
                commodities produced by the producers by using 
                practices that enhance the environment, natural 
                resource base, and quality of life.
            ``(3) Implementation.--
                    ``(A) In general.--The Secretary shall carry out 
                the program under this subsection by making a grant to, 
                or offering to enter into a cooperative agreement with, 
                a national nonprofit agricultural assistance 
                institution.
                    ``(B) Grant amount.--A grant made, or cooperative 
                agreement entered into, under subparagraph (A) shall 
                provide 100 percent of the cost of providing 
                information described in paragraph (2).
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $5,000,000 for 
        each of fiscal years 2013 through 2017.
    ``(e) Business and Industry Direct and Guaranteed Loans.--
            ``(1) Definition of business and industry loan.--In this 
        section, the term `business and industry loan' means a direct 
        loan that is made, or a loan that is guaranteed, by the 
        Secretary under this subsection.
            ``(2) Loan purposes.--The Secretary may make business and 
        industry loans to public, private, or cooperative organizations 
        organized for profit or nonprofit, private investment funds 
        that invest primarily in cooperative organizations, or to 
        individuals--
                    ``(A) to improve, develop, or finance business, 
                industry, and employment and improve the economic and 
                environmental climate in rural communities, including 
                pollution abatement and control;
                    ``(B) to conserve, develop, and use water for 
                aquaculture purposes in rural areas; and
                    ``(C) to reduce the reliance on nonrenewable energy 
                resources by encouraging the development and 
                construction of renewable energy systems (including 
                solar energy systems, wind energy systems, and 
                anaerobic digestors for the purpose of energy 
                generation), including the modification of existing 
                systems, in rural areas.
            ``(3) Loan guarantees for certain loans.--The Secretary may 
        guarantee loans made under this subsection to finance the 
        issuance of bonds for the projects described in paragraph (2).
            ``(4) Maximum amount of principal.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, no loan may be made or guaranteed under 
                this subsection that exceeds $25,000,000 in principal 
                amount.
                    ``(B) Limitations on loan guarantees for 
                cooperative organizations.--
                            ``(i) Principal amount.--Subject to clause 
                        (ii), the principal amount of a business and 
                        industry loan made to a cooperative 
                        organization and guaranteed under this 
                        subsection shall not exceed $40,000,000.
                            ``(ii) Use.--To be eligible for a guarantee 
                        under this subsection for a business and 
                        industry loan made to a cooperative 
                        organization, the principal amount of the loan 
                        in excess of $25,000,000 shall be used to carry 
                        out a project that is in a rural area and--
                                    ``(I) provides for the value-added 
                                processing of agricultural commodities; 
                                or
                                    ``(II) significantly benefits 1 or 
                                more entities eligible for assistance 
                                for the purposes described in paragraph 
                                (2), as determined by the Secretary.
                            ``(iii) Applications.--If a cooperative 
                        organization submits an application for a 
                        guarantee under this paragraph, the Secretary 
                        shall make the determination whether to approve 
                        the application, and the Secretary may not 
                        delegate this authority.
                            ``(iv) Maximum amount.--The total amount of 
                        business and industry loans made to cooperative 
                        organizations and guaranteed for a fiscal year 
                        under this subsection with principal amounts 
                        that are in excess of $25,000,000 may not 
                        exceed 10 percent of the total amount of 
                        business and industry loans guaranteed for the 
                        fiscal year under this subsection.
            ``(5) Fees.--The Secretary may assess a 1-time fee and an 
        annual renewal fee for any guaranteed business and industry 
        loan in an amount that does not exceed 3 percent of the 
        guaranteed principal portion of the loan.
            ``(6) Intangible assets.--In determining whether a 
        cooperative organization is eligible for a guaranteed business 
        and industry loan, the Secretary may consider the market value 
        of a properly appraised brand name, patent, or trademark of the 
        cooperative.
            ``(7) Loan appraisals.--The Secretary may require that any 
        appraisal made in connection with a business and industry loan 
        be conducted by a specialized appraiser that uses standards 
        that are comparable to standards used for similar purposes in 
        the private sector, as determined by the Secretary.
            ``(8) Loan guarantees for the purchase of cooperative 
        stock.--
                    ``(A) In general.--The Secretary may guarantee a 
                business and industry loan to individual farmers to 
                purchase capital stock of a farmer cooperative 
                established for the purpose of processing an 
                agricultural commodity.
                    ``(B) Processing contracts during initial period.--
                A cooperative described in subparagraph (A) for which a 
                farmer receives a guarantee to purchase stock under 
                that subparagraph may contract for services to process 
                agricultural commodities or otherwise process value 
                added for the period beginning on the date of the 
                startup of the cooperative in order to provide adequate 
                time for the planning and construction of the 
                processing facility of the cooperative.
                    ``(C) Financial information.--Financial information 
                required by the Secretary from a farmer as a condition 
                of making a business and industry loan guarantee under 
                this paragraph shall be provided in the manner 
                generally required by commercial agricultural lenders 
                in the applicable area.
            ``(9) Loans to cooperatives.--
                    ``(A) Eligibility.--
                            ``(i) In general.--The Secretary may make 
                        or guarantee a business and industry loan to a 
                        cooperative organization that is headquartered 
                        in a metropolitan area if the loan is--
                                    ``(I) used for a project or venture 
                                described in paragraph (2) that is 
                                located in a rural area; or
                                    ``(II) a loan guarantee that meets 
                                the requirements of paragraph (10).
                            ``(ii) Equity.--The Secretary may guarantee 
                        a loan made for the purchase of preferred stock 
                        or similar equity issued by a cooperative 
                        organization or a fund that invests primarily 
                        in cooperative organizations, if the guarantee 
                        significantly benefits 1 or more entities 
                        eligible for assistance for the purposes 
                        described in paragraph (2)(A), as determined by 
                        the Secretary.
                    ``(B) Refinancing.--A cooperative organization that 
                is eligible for a business and industry loan shall be 
                eligible to refinance an existing business and industry 
                loan with a lender if--
                            ``(i) the cooperative organization--
                                    ``(I) is current and performing 
                                with respect to the existing loan; and
                                    ``(II)(aa) is not, and has not 
                                been, in payment default, with respect 
                                to the existing loan; or
                                    ``(bb) has not converted any of the 
                                collateral with respect to the existing 
                                loan; and
                            ``(ii) there is adequate security or full 
                        collateral for the refinanced loan.
            ``(10) Loan guarantees in nonrural areas.--The Secretary 
        may guarantee a business and industry loan to a cooperative 
        organization for a facility that is not located in a rural area 
        if--
                    ``(A) the primary purpose of the loan guarantee is 
                for a facility to provide value-added processing for 
                agricultural producers that are located within 80 miles 
                of the facility;
                    ``(B) the applicant demonstrates to the Secretary 
                that the primary benefit of the loan guarantee will be 
                to provide employment for residents of a rural area; 
                and
                    ``(C) the total amount of business and industry 
                loans guaranteed for a fiscal year under this paragraph 
                does not exceed 10 percent of the business and industry 
                loans guaranteed for the fiscal year under this 
                subsection.
            ``(11) Locally or regionally produced agricultural food 
        products.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Locally or regionally produced 
                        agricultural food product.--The term `locally 
                        or regionally produced agricultural food 
                        product' means any agricultural food product 
                        that is raised, produced, and distributed in--
                                    ``(I) the locality or region in 
                                which the final product is marketed, so 
                                that the total distance that the 
                                product is transported is less than 400 
                                miles from the origin of the product; 
                                or
                                    ``(II) the State in which the 
                                product is produced.
                            ``(ii) Underserved community.--The term 
                        `underserved community' means a community 
                        (including an urban or rural community and an 
                        Indian tribal community) that, as determined by 
                        the Secretary, has--
                                    ``(I) limited access to affordable, 
                                healthy foods, including fresh fruits 
                                and vegetables, in grocery retail 
                                stores or farmer-to-consumer direct 
                                markets; and
                                    ``(II) a high rate of hunger or 
                                food insecurity or a high poverty rate.
                    ``(B) Loan and loan guarantee program.--
                            ``(i) In general.--The Secretary shall make 
                        or guarantee loans to individuals, 
                        cooperatives, cooperative organizations, 
                        businesses, and other entities to establish and 
                        facilitate enterprises that process, 
                        distribute, aggregate, store, and market 
                        locally or regionally produced agricultural 
                        food products to support community development 
                        and farm income.
                            ``(ii) Requirement.--The recipient of a 
                        loan or loan guarantee under this paragraph 
                        shall include in an appropriate agreement with 
                        retail and institutional facilities to which 
                        the recipient sells locally or regionally 
                        produced agricultural food products a 
                        requirement to inform consumers of the retail 
                        or institutional facilities that the consumers 
                        are purchasing or consuming locally or 
                        regionally produced agricultural food products.
                            ``(iii) Priority.--In making or 
                        guaranteeing a loan under this paragraph, the 
                        Secretary shall give priority to projects that 
                        have components benefitting underserved 
                        communities.
                            ``(iv) Reports.--Not later than 2 years 
                        after the date of enactment of the Agriculture 
                        Reform, Food, and Jobs Act of 2012 and annually 
                        thereafter, the Secretary shall submit to the 
                        Committee on Agriculture of the House of 
                        Representatives and the Committee on 
                        Agriculture, Nutrition, and Forestry of the 
                        Senate, and publish on the Internet, a report 
                        that describes projects carried out using loans 
                        or loan guarantees made under clause (i), 
                        including--
                                    ``(I) summary information about all 
                                projects;
                                    ``(II) the characteristics of the 
                                communities served; and
                                    ``(III) resulting benefits.
                            ``(v) Reservation of funds.--For each of 
                        fiscal years 2012 through 2017, the Secretary 
                        shall reserve not less than 5 percent of the 
                        total amount of funds made available to carry 
                        out this subsection to carry out this paragraph 
                        until April 1 of the fiscal year.
                            ``(vi) Outreach.--The Secretary shall 
                        develop and implement an outreach plan to 
                        publicize the availability of loans and loan 
                        guarantees under this paragraph, working 
                        closely with rural cooperative development 
                        centers, credit unions, community development 
                        financial institutions, regional economic 
                        development authorities, and other financial 
                        and economic development entities.
            ``(12) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this subsection 
        $75,000,000 for each of fiscal years 2013 through 2017.
    ``(f) Relending Programs.--
            ``(1) Intermediate relending program.--
                    ``(A) In general.--The Secretary may make or 
                guarantee loans to eligible entities described in 
                subparagraph (B) so that the eligible entities may 
                relend the funds to individuals and entities for the 
                purposes described in subparagraph (C).
                    ``(B) Eligible entities.--Entities eligible for 
                loans and loan guarantees described in subparagraph (A) 
                are--
                            ``(i) public agencies;
                            ``(ii) Indian tribes;
                            ``(iii) cooperatives; and
                            ``(iv) nonprofit corporations.
                    ``(C) Eligible purposes.--The proceeds from loans 
                made or guaranteed by the Secretary pursuant to 
                subparagraph (A) may be relent by eligible entities for 
                projects that--
                            ``(i) predominately serve communities in 
                        rural areas; and
                            ``(ii) as determined by the Secretary--
                                    ``(I) promote community 
                                development;
                                    ``(II) establish new businesses;
                                    ``(III) establish and support 
                                microlending programs; and
                                    ``(IV) create or retain employment 
                                opportunities.
                    ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                subsection $50,000,000 for each of fiscal years 2013 
                through 2017.
            ``(2) Rural microentrepreneur assistance program.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Microentrepreneur.--The term 
                        `microentrepreneur' means an owner and 
                        operator, or prospective owner and operator, of 
                        a rural microenterprise who is unable to obtain 
                        sufficient training, technical assistance, or 
                        credit other than under this subsection, as 
                        determined by the Secretary.
                            ``(ii) Microenterprise development 
                        organization.--The term `microenterprise 
                        development organization' means an organization 
                        that is--
                                    ``(I) a nonprofit entity;
                                    ``(II) an Indian tribe, the tribal 
                                government of which certifies to the 
                                Secretary that--
                                            ``(aa) no microenterprise 
                                        development organization serves 
                                        the Indian tribe; and
                                            ``(bb) no rural 
                                        microentrepreneur assistance 
                                        program exists under the 
                                        jurisdiction of the Indian 
                                        tribe;
                                    ``(III) a public institution of 
                                higher education; or
                                    ``(IV) a collaboration of rural 
                                nonprofit entities serving a region or 
                                State, if 1 lead nonprofit entity is 
                                the sole underwriter of all loans and 
                                is responsible for associated risks.
                            ``(iii) Microloan.--The term `microloan' 
                        means a business loan of not more than $50,000 
                        that is provided to a rural microenterprise.
                            ``(iv) Program.--The term `program' means 
                        the rural microentrepreneur assistance program 
                        established under subparagraph (B).
                            ``(v) Rural microenterprise.--The term 
                        `rural microenterprise' means a business entity 
                        with not more than 10 full-time equivalent 
                        employees located in a rural area.
                            ``(vi) Training.--The term `training' means 
                        teaching broad business principles or general 
                        business skills in a group or public setting.
                            ``(vii) Technical assistance.--The term 
                        `technical assistance' means working with a 
                        business client in a 1-to-1 manner to provide 
                        business and financial management counseling, 
                        assist in the preparation of business or 
                        marketing plans, or provide other skills 
                        tailored to an individual microentrepreneur.
                    ``(B) Rural microentrepreneur assistance program.--
                            ``(i) Establishment.--The Secretary shall 
                        establish a rural microentrepreneur assistance 
                        program to provide loans and grants to support 
                        microentrepreneurs in the development and 
                        ongoing success of rural microenterprises.
                            ``(ii) Purpose.--The purpose of the program 
                        is to provide microentrepreneurs with--
                                    ``(I) the skills necessary to 
                                establish new rural microenterprises; 
                                and
                                    ``(II) continuing technical and 
                                financial assistance related to the 
                                successful operation of rural 
                                microenterprises.
                            ``(iii) Loans.--
                                    ``(I) In general.--The Secretary 
                                shall make loans to microenterprise 
                                development organizations for the 
                                purpose of providing fixed-interest 
                                rate microloans to microentrepreneurs 
                                for startup and growing rural 
                                microenterprises.
                                    ``(II) Loan terms.--A loan made by 
                                the Secretary to a microenterprise 
                                development organization under this 
                                subparagraph shall--
                                            ``(aa) be for a term not to 
                                        exceed 20 years; and
                                            ``(bb) bear an annual 
                                        interest rate of at least 1 
                                        percent.
                                    ``(III) Loan loss reserve fund.--
                                The Secretary shall require each 
                                microenterprise development 
                                organization that receives a loan under 
                                this subparagraph to--
                                            ``(aa) establish a loan 
                                        loss reserve fund; and
                                            ``(bb) maintain the reserve 
                                        fund in an amount equal to at 
                                        least 5 percent of the 
                                        outstanding balance of such 
                                        loans owed by the 
                                        microenterprise development 
                                        organization, until all 
                                        obligations owed to the 
                                        Secretary under this 
                                        subparagraph are repaid.
                                    ``(IV) Deferral of interest and 
                                principal.--The Secretary may permit 
                                the deferral of payments on principal 
                                and interest due on a loan to a 
                                microenterprise development 
                                organization made under this paragraph 
                                for a 2-year period beginning on the 
                                date on which the loan is made.
                            ``(iv) Grants to support rural 
                        microenterprise development.--
                                    ``(I) In general.--The Secretary 
                                shall make grants to microenterprise 
                                development organizations--
                                            ``(aa) to provide training 
                                        and technical assistance, and 
                                        other related services to rural 
                                        microentrepreneurs; and
                                            ``(bb) to carry out such 
                                        other projects and activities 
                                        as the Secretary determines 
                                        appropriate to further the 
                                        purposes of the program.
                                    ``(II) Selection.--In making grants 
                                under subclause (I), the Secretary 
                                shall--
                                            ``(aa) place an emphasis on 
                                        microenterprise development 
                                        organizations that serve 
                                        microentrepreneurs that are 
                                        located in rural areas that 
                                        have suffered significant 
                                        outward migration, as 
                                        determined by the Secretary; 
                                        and
                                            ``(bb) ensure, to the 
                                        maximum extent practicable, 
                                        that grant recipients include 
                                        microenterprise development 
                                        organizations of varying sizes 
                                        and that serve racially and 
                                        ethnically diverse populations.
                            ``(v) Grants to assist 
                        microentrepreneurs.--
                                    ``(I) In general.--The Secretary 
                                shall make annual grants to 
                                microenterprise development 
                                organizations to provide technical 
                                assistance to microentrepreneurs that--
                                            ``(aa) received a loan from 
                                        the microenterprise development 
                                        organization under subparagraph 
                                        (B)(iii); or
                                            ``(bb) are seeking a loan 
                                        from the microenterprise 
                                        development organization under 
                                        subparagraph (B)(iii).
                                    ``(II) Maximum amount of technical 
                                assistance grant.--The maximum amount 
                                of a grant under this clause shall be 
                                in an amount equal to not more than 25 
                                percent of the total outstanding 
                                balance of microloans made by the 
                                microenterprise development 
                                organization under clause (iii), as of 
                                the date the grant is awarded.
                            ``(vi) Administrative expenses.--Not more 
                        than 10 percent of a grant received by a 
                        microenterprise development organization for a 
                        fiscal year under this subparagraph may be used 
                        to pay administrative expenses.
                    ``(C) Administration.--
                            ``(i) Matching requirement.--As a condition 
                        of any grant made under clauses (iv) and (v) of 
                        subparagraph (B), the Secretary shall require 
                        the microenterprise development organization to 
                        match not less than 15 percent of the total 
                        amount of the grant in the form of matching 
                        funds (including community development block 
                        grants), indirect costs, or in-kind goods or 
                        services.
                            ``(ii) Oversight.--At a minimum, not later 
                        than December 1 of each fiscal year, a 
                        microenterprise development organization that 
                        receives a loan or grant under this section 
                        shall provide to the Secretary such information 
                        as the Secretary may require to ensure that 
                        assistance provided under this section is used 
                        for the purposes for which the loan or grant 
                        was made.
                    ``(D) Authorization of appropriations.--There is 
                authorized to be appropriated to carry out this 
                paragraph $40,000,000 for each of fiscal years 2013 
                through 2017.
                    ``(E) Mandatory funding for fiscal years 2013 
                through 2017.--Of the funds of the Commodity Credit 
                Corporation, the Secretary shall use to carry out this 
                paragraph $3,750,000 for each of fiscal years 2014 
                through 2017, to remain available until expended.

``SEC. 3602. RURAL BUSINESS INVESTMENT PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Articles.--The term `articles' means articles of 
        incorporation for an incorporated body or the functional 
        equivalent or other similar documents specified by the 
        Secretary for other business entities.
            ``(2) Developmental venture capital.--The term 
        `developmental venture capital' means capital in the form of 
        equity capital investments in rural business investment 
        companies with an objective of fostering economic development 
        in rural areas.
            ``(3) Employee welfare benefit plan; pension plan.--
                    ``(A) In general.--The terms `employee welfare 
                benefit plan' and `pension plan' have the meanings 
                given the terms in section 3 of the Employee Retirement 
                Income Security Act of 1974 (29 U.S.C. 1002).
                    ``(B) Inclusions.--The terms `employee welfare 
                benefit plan' and `pension plan' include--
                            ``(i) public and private pension or 
                        retirement plans subject to this subtitle; and
                            ``(ii) similar plans not covered by this 
                        subtitle that have been established, and that 
                        are maintained, by the Federal Government or 
                        any State (including by a political 
                        subdivision, agency, or instrumentality of the 
                        Federal Government or a State) for the benefit 
                        of employees.
            ``(4) Equity capital.--The term `equity capital' means 
        common or preferred stock or a similar instrument, including 
        subordinated debt with equity features.
            ``(5) Leverage.--The term `leverage' includes--
                    ``(A) debentures purchased or guaranteed by the 
                Secretary;
                    ``(B) participating securities purchased or 
                guaranteed by the Secretary; and
                    ``(C) preferred securities outstanding as of the 
                date of enactment of the Agriculture Reform, Food, and 
                Jobs Act of 2012.
            ``(6) License.--The term `license' means a license issued 
        by the Secretary in accordance with in subsection (d)(5).
            ``(7) Limited liability company.--The term `limited 
        liability company' means a business entity that is organized 
        and operating in accordance with a State limited liability 
        company law approved by the Secretary.
            ``(8) Member.--The term `member' means, with respect to a 
        rural business investment company that is a limited liability 
        company, a holder of an ownership interest, or a person 
        otherwise admitted to membership in the limited liability 
        company.
            ``(9) Operational assistance.--The term `operational 
        assistance' means management, marketing, and other technical 
        assistance that assists a rural business concern with business 
        development.
            ``(10) Participation agreement.--The term `participation 
        agreement' means an agreement, between the Secretary and a 
        rural business investment company granted final approval under 
        subsection (d)(5), that requires the rural business investment 
        company to make investments in smaller enterprises in rural 
        areas.
            ``(11) Private capital.--
                    ``(A) In general.--The term `private capital' means 
                the total of--
                            ``(i)(I) the paid-in capital and paid-in 
                        surplus of a corporate rural business 
                        investment company;
                            ``(II) the contributed capital of the 
                        partners of a partnership rural business 
                        investment company; or
                            ``(III) the equity investment of the 
                        members of a limited liability company rural 
                        business investment company; and
                            ``(ii) unfunded binding commitments from 
                        investors that meet criteria established by the 
                        Secretary to contribute capital to the rural 
                        business investment company, except that--
                                    ``(I) unfunded commitments may be 
                                counted as private capital for purposes 
                                of approval by the Secretary of any 
                                request for leverage; but
                                    ``(II) leverage shall not be funded 
                                based on the commitments.
                    ``(B) Exclusions.--The term `private capital' does 
                not include--
                            ``(i) any funds borrowed by a rural 
                        business investment company from any source;
                            ``(ii) any funds obtained through the 
                        issuance of leverage; or
                            ``(iii) any funds obtained directly or 
                        indirectly from the Federal Government or any 
                        State (including by a political subdivision, 
                        agency, or instrumentality of the Federal 
                        Government or a State), except for--
                                    ``(I) funds obtained from the 
                                business revenues (excluding any 
                                governmental appropriation) of any 
                                Federally chartered or government-
                                sponsored enterprise established prior 
                                to the date of enactment of the 
                                Agriculture Reform, Food, and Jobs Act 
                                of 2012;
                                    ``(II) funds invested by an 
                                employee welfare benefit plan or 
                                pension plan; and
                                    ``(III) any qualified nonprivate 
                                funds (if the investors of the 
                                qualified nonprivate funds do not 
                                control, directly or indirectly, the 
                                management, board of directors, general 
                                partners, or members of the rural 
                                business investment company).
            ``(12) Qualified nonprivate funds.--The term `qualified 
        nonprivate funds' means any--
                    ``(A) funds directly or indirectly invested in any 
                applicant or rural business investment company on or 
                before the date of enactment of the Agriculture Reform, 
                Food, and Jobs Act of 2012 by any Federal agency, other 
                than the Department, under a provision of law 
                explicitly mandating the inclusion of those funds in 
                the definition of the term `private capital'; and
                    ``(B) funds invested in any applicant or rural 
                business investment company by 1 or more entities of 
                any State (including by a political subdivision, 
                agency, or instrumentality of the State and including 
                any guarantee extended by those entities) in an 
                aggregate amount that does not exceed 33 percent of the 
                private capital of the applicant or rural business 
                investment company.
            ``(13) Rural business concern.--The term `rural business 
        concern' means--
                    ``(A) a public, private, or cooperative for-profit 
                or nonprofit organization;
                    ``(B) a for-profit or nonprofit business controlled 
                by an Indian tribe; or
                    ``(C) any other person or entity that primarily 
                operates in a rural area, as determined by the 
                Secretary.
            ``(14) Rural business investment company.--The term `rural 
        business investment company' means a company that--
                    ``(A) has been granted final approval by the 
                Secretary under subsection (d)(5); and
                    ``(B) has entered into a participation agreement 
                with the Secretary.
            ``(15) Smaller enterprise.--
                    ``(A) In general.--The term `smaller enterprise' 
                means any rural business concern that, together with 
                its affiliates--
                            ``(i) has--
                                    ``(I) a net financial worth of not 
                                more than $6,000,000, as of the date on 
                                which assistance is provided under this 
                                section to the rural business concern; 
                                and
                                    ``(II) except as provided in 
                                subparagraph (B), an average net income 
                                for the 2-year period preceding the 
                                date on which assistance is provided 
                                under this section to the rural 
                                business concern, of not more than 
                                $2,000,000, after Federal income taxes 
                                (excluding any carryover losses); or
                            ``(ii) satisfies the standard industrial 
                        classification size standards established by 
                        the Administrator of the Small Business 
                        Administration for the industry in which the 
                        rural business concern is primarily engaged.
                    ``(B) Exception.--For purposes of subparagraph 
                (A)(i)(II), if the rural business concern is not 
                required by law to pay Federal income taxes at the 
                enterprise level, but is required to pass income 
                through to the shareholders, partners, beneficiaries, 
                or other equitable owners of the business concern, the 
                net income of the business concern shall be determined 
                by allowing a deduction in an amount equal to the total 
                of--
                            ``(i) if the rural business concern is not 
                        required by law to pay State (and local, if 
                        any) income taxes at the enterprise level, the 
                        product obtained by multiplying--
                                    ``(I) the net income (determined 
                                without regard to this subparagraph); 
                                by
                                    ``(II) the marginal State income 
                                tax rate (or by the combined State and 
                                local income tax rates, as applicable) 
                                that would have applied if the business 
                                concern were a corporation; and
                            ``(ii) the product obtained by 
                        multiplying--
                                    ``(I) the net income (so 
                                determined) less any deduction for 
                                State (and local) income taxes 
                                calculated under clause (i); by
                                    ``(II) the marginal Federal income 
                                tax rate that would have applied if the 
                                rural business concern were a 
                                corporation.
    ``(b) Purposes.--The purposes of the Rural Business Investment 
Program established under this section are--
            ``(1) to promote economic development and the creation of 
        wealth and job opportunities in rural areas and among 
        individuals living in those areas by encouraging developmental 
        venture capital investments in smaller enterprises primarily 
        located in rural areas; and
            ``(2) to establish a developmental venture capital program, 
        with the mission of addressing the unmet equity investment 
        needs of small enterprises located in rural areas, by 
        authorizing the Secretary--
                    ``(A) to enter into participation agreements with 
                rural business investment companies;
                    ``(B) to guarantee debentures of rural business 
                investment companies to enable each rural business 
                investment company to make developmental venture 
                capital investments in smaller enterprises in rural 
                areas; and
                    ``(C) to make grants to rural business investment 
                companies, and to other entities, for the purpose of 
                providing operational assistance to smaller enterprises 
                financed, or expected to be financed, by rural business 
                investment companies.
    ``(c) Establishment.--In accordance with this subtitle, the 
Secretary shall establish a Rural Business Investment Program, under 
which the Secretary may--
            ``(1) enter into participation agreements with companies 
        granted final approval under subsection (d)(5) for the purposes 
        described in subsection (b);
            ``(2) guarantee the debentures issued by rural business 
        investment companies as provided in subsection (e); and
            ``(3) make grants to rural business investment companies, 
        and to other entities, under subsection (h).
    ``(d) Selection of Rural Business Investment Companies.--
            ``(1) Eligibility.--A company shall be eligible to apply to 
        participate, as a rural business investment company, in the 
        program established under this section if--
                    ``(A) the company is a newly formed for-profit 
                entity or a newly formed for-profit subsidiary of such 
                an entity;
                    ``(B) the company has a management team with 
                experience in community development financing or 
                relevant venture capital financing; and
                    ``(C) the company will invest in enterprises that 
                will create wealth and job opportunities in rural 
                areas, with an emphasis on smaller enterprises.
            ``(2) Application.--To participate, as a rural business 
        investment company, in the program established under this 
        section, a company meeting the eligibility requirements of 
        paragraph (1) shall submit an application to the Secretary that 
        includes--
                    ``(A) a business plan describing how the company 
                intends to make successful developmental venture 
                capital investments in identified rural areas;
                    ``(B) information regarding the community 
                development finance or relevant venture capital 
                qualifications and general reputation of the management 
                of the company;
                    ``(C) a description of how the company intends to 
                work with community-based organizations and local 
                entities (including local economic development 
                companies, local lenders, and local investors) and to 
                seek to address the unmet equity capital needs of the 
                communities served;
                    ``(D) a proposal describing how the company intends 
                to use the grant funds provided under this section to 
                provide operational assistance to smaller enterprises 
                financed by the company, including information 
                regarding whether the company intends to use licensed 
                professionals, as necessary, on the staff of the 
                company or from an outside entity;
                    ``(E) with respect to binding commitments to be 
                made to the company under this section, an estimate of 
                the ratio of cash to in-kind contributions;
                    ``(F) a description of the criteria to be used to 
                evaluate whether and to what extent the company meets 
                the purposes of the program established under this 
                section;
                    ``(G) information regarding the management and 
                financial strength of any parent firm, affiliated firm, 
                or any other firm essential to the success of the 
                business plan of the company; and
                    ``(H) such other information as the Secretary may 
                require.
            ``(3) Status.--Not later than 90 days after the initial 
        receipt by the Secretary of an application under this 
        subsection, the Secretary shall provide to the applicant a 
        written report describing the status of the application and any 
        requirements remaining for completion of the application.
            ``(4) Matters considered.--In reviewing and processing any 
        application under this subsection, the Secretary shall--
                    ``(A) determine whether--
                            ``(i) the applicant meets the requirements 
                        of paragraph (5); and
                            ``(ii) the management of the applicant is 
                        qualified and has the knowledge, experience, 
                        and capability necessary to comply with this 
                        section;
                    ``(B) take into consideration--
                            ``(i) the need for and availability of 
                        financing for rural business concerns in the 
                        geographic area in which the applicant is to 
                        commence business;
                            ``(ii) the general business reputation of 
                        the owners and management of the applicant; and
                            ``(iii) the probability of successful 
                        operations of the applicant, including adequate 
                        profitability and financial soundness; and
                    ``(C) not take into consideration any projected 
                shortage or unavailability of grant funds or leverage.
            ``(5) Approval; license.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary may approve an 
                applicant to operate as a rural business investment 
                company under this subtitle and license the applicant 
                as a rural business investment company, if--
                            ``(i) the Secretary determines that the 
                        application satisfies the requirements of 
                        paragraph (2);
                            ``(ii) the area in which the rural business 
                        investment company is to conduct its 
                        operations, and establishment of branch offices 
                        or agencies (if authorized by the articles), 
                        are approved by the Secretary; and
                            ``(iii) the applicant enters into a 
                        participation agreement with the Secretary.
                    ``(B) Capital requirements.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of this section, the Secretary 
                        may approve an applicant to operate as a rural 
                        business investment company under this section 
                        and designate the applicant as a rural business 
                        investment company, if the Secretary determines 
                        that the applicant--
                                    ``(I) has private capital as 
                                determined by the Secretary;
                                    ``(II) would otherwise be approved 
                                under this section, except that the 
                                applicant does not satisfy the 
                                requirements of subsection (i)(3); and
                                    ``(III) has a viable business plan 
                                that--
                                            ``(aa) reasonably projects 
                                        profitable operations; and
                                            ``(bb) has a reasonable 
                                        timetable for achieving a level 
                                        of private capital that 
                                        satisfies the requirements of 
                                        subsection (i)(3).
                            ``(ii) Leverage.--An applicant approved 
                        under clause (i) shall not be eligible to 
                        receive leverage under this section until the 
                        applicant satisfies the requirements of section 
                        3602(i)(3).
                            ``(iii) Grants.--An applicant approved 
                        under clause (i) shall be eligible for grants 
                        under subsection (h) in proportion to the 
                        private capital of the applicant, as determined 
                        by the Secretary.
    ``(e) Debentures.--
            ``(1) In general.--The Secretary may guarantee the timely 
        payment of principal and interest, as scheduled, on debentures 
        issued by any rural business investment company.
            ``(2) Terms and conditions.--The Secretary may make 
        guarantees under this subsection on such terms and conditions 
        as the Secretary considers appropriate, except that the term of 
        any debenture guaranteed under this section shall not exceed 15 
        years.
            ``(3) Full faith and credit of the united states.--Section 
        3901 shall apply to any guarantee under this subsection.
            ``(4) Maximum guarantee.--Under this subsection, the 
        Secretary may--
                    ``(A) guarantee the debentures issued by a rural 
                business investment company only to the extent that the 
                total face amount of outstanding guaranteed debentures 
                of the rural business investment company does not 
                exceed the lesser of--
                            ``(i) 300 percent of the private capital of 
                        the rural business investment company; or
                            ``(ii) $105,000,000; and
                    ``(B) provide for the use of discounted debentures.
    ``(f) Issuance and Guarantee of Trust Certificates.--
            ``(1) Issuance.--The Secretary may issue trust certificates 
        representing ownership of all or a fractional part of 
        debentures issued by a rural business investment company and 
        guaranteed by the Secretary under this section, if the 
        certificates are based on and backed by a trust or pool 
        approved by the Secretary and composed solely of guaranteed 
        debentures.
            ``(2) Guarantee.--
                    ``(A) In general.--The Secretary may, under such 
                terms and conditions as the Secretary considers 
                appropriate, guarantee the timely payment of the 
                principal of and interest on trust certificates issued 
                by the Secretary or agents of the Secretary for 
                purposes of this subsection.
                    ``(B) Limitation.--Each guarantee under this 
                paragraph shall be limited to the extent of principal 
                and interest on the guaranteed debentures that compose 
                the trust or pool.
                    ``(C) Prepayment or default.--
                            ``(i) In general.--
                                    ``(I) Authority to prepay.--A 
                                debenture may be prepaid at any time 
                                without penalty.
                                    ``(II) Reduction of guarantee.--
                                Subject to subclause (I), if a 
                                debenture in a trust or pool is 
                                prepaid, or in the event of default of 
                                such a debenture, the guarantee of 
                                timely payment of principal and 
                                interest on the trust certificates 
                                shall be reduced in proportion to the 
                                amount of principal and interest the 
                                prepaid debenture represents in the 
                                trust or pool.
                            ``(ii) Interest.--Interest on prepaid or 
                        defaulted debentures shall accrue and be 
                        guaranteed by the Secretary only through the 
                        date of payment of the guarantee.
                            ``(iii) Redemption.--At any time during the 
                        term of a trust certificate, the trust 
                        certificate may be called for redemption due to 
                        prepayment or default of all debentures.
            ``(3) Full faith and credit of the united states.--Section 
        3901 shall apply to any guarantee of a trust certificate issued 
        by the Secretary under this section.
            ``(4) Subrogation and ownership rights.--
                    ``(A) Subrogation.--If the Secretary pays a claim 
                under a guarantee issued under this section, the claim 
                shall be subrogated fully to the rights satisfied by 
                the payment.
                    ``(B) Ownership rights.--No Federal, State, or 
                local law shall preclude or limit the exercise by the 
                Secretary of the ownership rights of the Secretary in a 
                debenture residing in a trust or pool against which 1 
                or more trust certificates are issued under this 
                subsection.
            ``(5) Management and administration.--
                    ``(A) Registration.--The Secretary shall provide 
                for a central registration of all trust certificates 
                issued under this subsection.
                    ``(B) Creation of pools.--The Secretary may--
                            ``(i) maintain such commercial bank 
                        accounts or investments in obligations of the 
                        United States as may be necessary to facilitate 
                        the creation of trusts or pools backed by 
                        debentures guaranteed under this subtitle; and
                            ``(ii) issue trust certificates to 
                        facilitate the creation of those trusts or 
                        pools.
                    ``(C) Fidelity bond or insurance requirement.--Any 
                agent performing functions on behalf of the Secretary 
                under this paragraph shall provide a fidelity bond or 
                insurance in such amount as the Secretary considers to 
                be necessary to fully protect the interests of the 
                United States.
                    ``(D) Regulation of brokers and dealers.--The 
                Secretary may regulate brokers and dealers in trust 
                certificates issued under this subsection.
                    ``(E) Electronic registration.--Nothing in this 
                paragraph prohibits the use of a book-entry or other 
                electronic form of registration for trust certificates 
                issued under this subsection.
    ``(g) Fees.--
            ``(1) In general.--The Secretary may charge a fee that does 
        not exceed $500 with respect to any guarantee or grant issued 
        under this section.
            ``(2) Trust certificate.--Notwithstanding paragraph (1), 
        the Secretary shall not collect a fee for any guarantee of a 
        trust certificate under subsection (f), except that any agent 
        of the Secretary may collect a fee that does not exceed $500 
        for the functions described in subsection (f)(5)(B).
            ``(3) License.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C), the Secretary may prescribe fees to 
                be paid by each applicant for a license to operate as a 
                rural business investment company under this section.
                    ``(B) Use of amounts.--Fees collected under this 
                paragraph--
                            ``(i) shall be deposited in the account for 
                        salaries and expenses of the Secretary;
                            ``(ii) are authorized to be appropriated 
                        solely to cover the costs of licensing 
                        examinations; and
                            ``(iii) shall--
                                    ``(I) in the case of a license 
                                issued before the date of enactment of 
                                the Agriculture Reform, Food, and Jobs 
                                Act of 2012, not exceed $500 for any 
                                fee collected under this paragraph; and
                                    ``(II) in the case of a license 
                                issued after the date of enactment of 
                                the Agriculture Reform, Food, and Jobs 
                                Act of 2012, be a rate as determined by 
                                the Secretary.
                    ``(C) Prohibition on collection of certain fees.--
                In the case of a license described in subparagraph (A) 
                that was approved before July 1, 2007, the Secretary 
                shall not collect any fees due on or after the date of 
                enactment of the Agriculture Reform, Food, and Jobs Act 
                of 2012.
    ``(h) Operational Assistance Grants.--
            ``(1) In general.--In accordance with this subsection, the 
        Secretary may make grants to rural business investment 
        companies and to other entities, as authorized by this section, 
        to provide operational assistance to smaller enterprises 
        financed, or expected to be financed, by the entities.
            ``(2) Terms.--Grants made under this subsection shall be 
        made over a multiyear period (not to exceed 10 years) under 
        such terms as the Secretary may require.
            ``(3) Use of funds.--The proceeds of a grant made under 
        this subsection may be used by the rural business investment 
        company receiving the grant only to provide operational 
        assistance in connection with an equity or prospective equity 
        investment in a business located in a rural area.
            ``(4) Submission of plans.--A rural business investment 
        company shall be eligible for a grant under this subsection 
        only if the rural business investment company submits to the 
        Secretary, in such form and manner as the Secretary may 
        require, a plan for use of the grant.
            ``(5) Grant amount.--
                    ``(A) Rural business investment companies.--The 
                amount of a grant made under this subsection to a rural 
                business investment company shall be equal to the 
                lesser of--
                            ``(i) 10 percent of the private capital 
                        raised by the rural business investment 
                        company; or
                            ``(ii) $1,000,000.
            ``(6) Other entities.--The amount of a grant made under 
        this subsection to any entity other than a rural business 
        investment company shall be equal to the resources (in cash or 
        in kind) raised by the entity in accordance with the 
        requirements applicable to rural business investment companies 
        under this section.
    ``(i) Rural Business Investment Companies.--
            ``(1) Organization.--For purposes of this subsection, a 
        rural business investment company shall--
                    ``(A) be an incorporated body, a limited liability 
                company, or a limited partnership organized and 
                chartered or otherwise existing under State law solely 
                for the purpose of performing the functions and 
                conducting the activities authorized by this section; 
                and
                    ``(B)(i) if incorporated, have succession for a 
                period of not less than 30 years unless earlier 
                dissolved by the shareholders of the rural business 
                investment company; and
                    ``(ii) if a limited partnership or a limited 
                liability company, have succession for a period of not 
                less than 10 years; and
                    ``(iii) possess the powers reasonably necessary to 
                perform the functions and conduct the activities.
            ``(2) Articles.--The articles of any rural business 
        investment company--
                    ``(A) shall specify in general terms--
                            ``(i) the purposes for which the rural 
                        business investment company is formed;
                            ``(ii) the name of the rural business 
                        investment company;
                            ``(iii) the 1 or more areas in which the 
                        operations of the rural business investment 
                        company are to be carried out;
                            ``(iv) the place where the principal office 
                        of the rural business investment company is to 
                        be located; and
                            ``(v) the amount and classes of the shares 
                        of capital stock of the rural business 
                        investment company;
                    ``(B) may contain any other provisions consistent 
                with this section that the rural business investment 
                company may determine appropriate to adopt for the 
                regulation of the business of the rural business 
                investment company and the conduct of the affairs of 
                the rural business investment company; and
                    ``(C) shall be subject to the approval of the 
                Secretary.
            ``(3) Capital requirements.--
                    ``(A) In general.--Each rural business investment 
                company shall be required to meet the capital 
                requirements as provided by the Secretary.
                    ``(B) Time frame.--Each rural business investment 
                company shall have a period of 2 years to meet the 
                capital requirements of this paragraph.
                    ``(C) Adequacy.--In addition to the requirements of 
                subparagraph (A), the Secretary shall--
                            ``(i) determine whether the private capital 
                        of each rural business investment company is 
                        adequate to ensure a reasonable prospect that 
                        the rural business investment company will be 
                        operated soundly and profitably, and managed 
                        actively and prudently in accordance with the 
                        articles of the rural business investment 
                        company;
                            ``(ii) determine that the rural business 
                        investment company will be able to comply with 
                        the requirements of this section;
                            ``(iii) require that at least 75 percent of 
                        the capital of each rural business investment 
                        company is invested in rural business concerns;
                            ``(iv) ensure that the rural business 
                        investment company is designed primarily to 
                        meet equity capital needs of the businesses in 
                        which the rural business investment company 
                        invests and not to compete with traditional 
                        small business financing by commercial lenders; 
                        and
                            ``(v) require that the rural business 
                        investment company makes short-term non-equity 
                        investments of less than 5 years only to the 
                        extent necessary to preserve an existing 
                        investment.
            ``(4) Diversification of ownership.--The Secretary shall 
        ensure that the management of each rural business investment 
        company licensed after the date of enactment of the Agriculture 
        Reform, Food, and Jobs Act of 2012 is sufficiently diversified 
        from and unaffiliated with the ownership of the rural business 
        investment company so as to ensure independence and objectivity 
        in the financial management and oversight of the investments 
        and operations of the rural business investment company.
    ``(j) Financial Institution Investments.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection and notwithstanding any other provision of law, the 
        following banks, associations, and institutions are eligible 
        both to establish and invest in any rural business investment 
        company or in any entity established to invest solely in rural 
        business investment companies:
                    ``(A) Any bank or savings association the deposits 
                of which are insured under the Federal Deposit 
                Insurance Act (12 U.S.C. 1811 et seq.), including an 
                investment pool created entirely by such bank or 
                savings association.
                    ``(B) Any Farm Credit System institution described 
                in subsection 1.2(a) of the Farm Credit Act of 1971 (12 
                U.S.C. 2002(a)).
            ``(2) Limitation.--No bank, association, or institution 
        described in paragraph (1) may make investments described in 
        paragraph (1) that are greater than 5 percent of the capital 
        and surplus of the bank, association, or institution.
            ``(3) Limitation on rural business investment companies 
        controlled by farm credit system institutions.--If a Farm 
        Credit System institution described in section 1.2(a) of the 
        Farm Credit Act of 1971 (12 U.S.C. 2002(a)) holds more than 25 
        percent of the shares of a rural business investment company, 
        either alone or in conjunction with other System institutions 
        (or affiliates), the rural business investment company shall 
        not provide equity investments in, or provide other financial 
        assistance to, entities that are not otherwise eligible to 
        receive financing from the Farm Credit System under that Act 
        (12 U.S.C. 2001 et seq.).
    ``(k) Examinations.--
            ``(1) In general.--Each rural business investment company 
        that participates in the program established under this section 
        shall be subject to examinations made at the direction of the 
        Secretary in accordance with this subsection.
            ``(2) Assistance of private sector entities.--An 
        examination under this subsection may be conducted with the 
        assistance of a private sector entity that has the 
        qualifications and the expertise necessary to conduct such an 
        examination.
            ``(3) Costs.--
                    ``(A) In general.--The Secretary may assess the 
                cost of an examination under this section, including 
                compensation of the examiners, against the rural 
                business investment company examined.
                    ``(B) Payment.--Any rural business investment 
                company against which the Secretary assesses costs 
                under this subparagraph shall pay the costs.
            ``(4) Deposit of funds.--Funds collected under this 
        subsection shall--
                    ``(A) be deposited in the account that incurred the 
                costs for carrying out this subsection;
                    ``(B) be made available to the Secretary to carry 
                out this subsection, without further appropriation; and
                    ``(C) remain available until expended.
    ``(l) Reporting Requirements.--
            ``(1) Rural business investment companies.--Each entity 
        that participates in a program established under this section 
        shall provide to the Secretary such information as the 
        Secretary may require, including--
                    ``(A) information relating to the measurement 
                criteria that the entity proposed in the program 
                application of the rural business investment company; 
                and
                    ``(B) in each case in which the entity under this 
                section makes an investment in, or a loan or grant to, 
                a business that is not located in a rural area, a 
                report on the number and percentage of employees of the 
                business who reside in those areas.
            ``(2) Public reports.--
                    ``(A) In general.--The Secretary shall prepare and 
                make available to the public an annual report on the 
                programs established under this section, including 
                detailed information on--
                            ``(i) the number of rural business 
                        investment companies licensed by the Secretary 
                        during the previous fiscal year;
                            ``(ii) the aggregate amount of leverage 
                        that rural business investment companies have 
                        received from the Federal Government during the 
                        previous fiscal year;
                            ``(iii) the aggregate number of each type 
                        of leveraged instruments used by rural business 
                        investment companies during the previous fiscal 
                        year and how each number compares to previous 
                        fiscal years;
                            ``(iv) the number of rural business 
                        investment company licenses surrendered and the 
                        number of rural business investment companies 
                        placed in liquidation during the previous 
                        fiscal year, identifying the amount of leverage 
                        each rural business investment company has 
                        received from the Federal Government and the 
                        type of leverage instruments each rural 
                        business investment company has used;
                            ``(v) the amount of losses sustained by the 
                        Federal Government as a result of operations 
                        under this section during the previous fiscal 
                        year and an estimate of the total losses that 
                        the Federal Government can reasonably expect to 
                        incur as a result of the operations during the 
                        current fiscal year;
                            ``(vi) actions taken by the Secretary to 
                        maximize recoupment of funds of the Federal 
                        Government expended to implement and administer 
                        the Rural Business Investment Program under 
                        this section during the previous fiscal year 
                        and to ensure compliance with the requirements 
                        of this section (including regulations);
                            ``(vii) the amount of Federal Government 
                        leverage that each licensee received in the 
                        previous fiscal year and the types of leverage 
                        instruments each licensee used;
                            ``(viii) for each type of financing 
                        instrument, the sizes, types of geographic 
                        locations, and other characteristics of the 
                        small business investment companies using the 
                        instrument during the previous fiscal year, 
                        including the extent to which the investment 
                        companies have used the leverage from each 
                        instrument to make loans or equity investments 
                        in rural areas; and
                            ``(ix) the actions of the Secretary to 
                        carry out this section
                    ``(B) Prohibition.--In compiling the report 
                required under subparagraph (A), the Secretary may 
                not--
                            ``(i) compile the report in a manner that 
                        permits identification of any particular type 
                        of investment by an individual rural business 
                        investment company or small business concern in 
                        which a rural business investment company 
                        invests; or
                            ``(ii) release any information that is 
                        prohibited under section 1905 of title 18, 
                        United States Code.
    ``(m) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $25,000,000 for the period of 
fiscal years 2008 through 2017.''.

           ``CHAPTER 3--GENERAL RURAL DEVELOPMENT PROVISIONS

``SEC. 3701. GENERAL PROVISIONS FOR LOANS AND GRANTS.

    ``(a) Period for Repayment.--Unless otherwise specifically provided 
for in this subtitle, the period for repayment of a loan under this 
subtitle shall not exceed 40 years.
    ``(b) Interest Rates.--
            ``(1) In general.--Except as otherwise provided in this 
        title, the interest rate on a loan under this subtitle shall be 
        determined by the Secretary at a rate--
                    ``(A) not to exceed a sum obtained by adding--
                            ``(i) the current average market yield on 
                        outstanding marketable obligations of the 
                        United States with remaining periods to 
                        maturity comparable to the average maturity of 
                        the loan; and
                            ``(ii) an amount not to exceed 1 percent, 
                        as determined by the Secretary; and
                    ``(B) adjusted to the nearest \1/8\ of 1 percent.
            ``(2) Water and waste facility loans and community 
        facilities loans.--
                    ``(A) In general.--Notwithstanding any provision of 
                State law limiting the rate or amount of interest that 
                may be charged, taken, received, or reserved, except as 
                provided in subparagraph (C) and paragraph (5), the 
                interest rate on a loan (other than a guaranteed loan) 
                to a public body or nonprofit association (including an 
                Indian tribe) for a water or waste disposal facility or 
                essential community facility shall be determined by the 
                Secretary at a rate not to exceed--
                            ``(i) the current market yield on 
                        outstanding municipal obligations with 
                        remaining periods to maturity comparable to the 
                        average maturity for the loan, and adjusted to 
                        the nearest \1/8\ of 1 percent;
                            ``(ii) 5 percent per year for a loan that 
                        is for the upgrading of a facility or 
                        construction of a new facility as required to 
                        meet applicable health or sanitary standards 
                        in--
                                    ``(I) an area in which the median 
                                family income of the persons to be 
                                served by the facility is below the 
                                poverty line (as defined in section 673 
                                of the Community Services Block Grant 
                                Act (42 U.S.C. 9902)); and
                                    ``(II) any areas the Secretary may 
                                designate in which a significant 
                                percentage of the persons to be served 
                                by the facilities are low income 
                                persons, as determined by the 
                                Secretary; and
                            ``(iii) 7 percent per year for a loan for a 
                        facility that does not qualify for the 5 
                        percent per year interest rate prescribed in 
                        clause (ii) but that is located in an area in a 
                        State in which the median household income of 
                        the persons to be served by the facility does 
                        not exceed 100 percent of the statewide 
                        nonmetropolitan median household income for the 
                        State.
                    ``(B) Health care and related facilities.--
                Notwithstanding subparagraph (A), the Secretary shall 
                establish a rate for a loan for a health care or 
                related facility that is--
                            ``(i) based solely on the income of the 
                        area to be served; and
                            ``(ii) otherwise consistent with 
                        subparagraph (A).
                    ``(C) Interest rates for water and waste disposal 
                facilities loans.--
                            ``(i) In general.--Except as provided in 
                        clause (ii) and notwithstanding subparagraph 
                        (A), in the case of a direct loan for a water 
                        or waste disposal facility--
                                    ``(I) in the case of a loan that 
                                would be subject to the 5 percent 
                                interest rate limitation under 
                                subparagraph (A), the Secretary shall 
                                establish the interest rate at a rate 
                                that is equal to 60 percent of the 
                                current market yield for outstanding 
                                municipal obligations with remaining 
                                periods to maturity comparable to the 
                                average maturity of the loan, adjusted 
                                to the nearest \1/8\ of 1 percent; and
                                    ``(II) in the case of a loan that 
                                would be subject to the 7 percent 
                                limitation under subparagraph (A), the 
                                Secretary shall establish the interest 
                                rate at a rate that is equal to 80 
                                percent of the current market yield for 
                                outstanding municipal obligations with 
                                remaining periods to maturity 
                                comparable to the average maturity of 
                                the loan, adjusted to the nearest \1/8\ 
                                of 1 percent.
                            ``(ii) Exception.--Clause (i) does not 
                        apply to a loan for a specific project that is 
                        the subject of a loan that has been approved, 
                        but not closed, as of the date of enactment of 
                        the Agriculture Reform, Food, and Jobs Act of 
                        2012.
            ``(3) Interest rates on business and other loans.--
                    ``(A) In general.--Except as provided in paragraph 
                (4), the interest rates on loans under sections 
                3501(a)(1) (other than guaranteed loans and loans as 
                described in paragraph (2)(A)) shall be as determined 
                by the Secretary in accordance with subparagraph (B).
                    ``(B) Minimum rate.--The interest rates described 
                in subparagraph (A) shall be not less than the sum 
                obtained by adding--
                            ``(i) such rates as determined by the 
                        Secretary of the Treasury taking into 
                        consideration the current average market yield 
                        on outstanding marketable obligations of the 
                        United States with remaining periods to 
                        maturity comparable to the average maturities 
                        of such loans, adjusted in the judgment of the 
                        Secretary of the Treasury to provide for rates 
                        comparable to the rates prevailing in the 
                        private market for similar loans and 
                        considering the insurance by the Secretary of 
                        the loans; and
                            ``(ii) an additional charge, prescribed by 
                        the Secretary, to cover the losses of the 
                        Secretary and cost of administration, which 
                        shall be deposited in the Rural Development 
                        Insurance Fund, and further adjusted to the 
                        nearest \1/8\ of 1 percent.
            ``(4) Interest rates adjustments.--
                    ``(A) Adjustments.--Notwithstanding any other 
                provision of this subsection, in the case of loans 
                (other than guaranteed loans) made or guaranteed under 
                the authorities of this title specified in subparagraph 
                (C) for activities that involve the use of prime 
                farmland, the interest rates shall be the interest 
                rates otherwise applicable under this section increased 
                by 2 percent per year.
                    ``(B) Prime farmland.--
                            ``(i) In general.--Wherever practicable, 
                        construction by a State, municipality, or other 
                        political subdivision of local government that 
                        is supported by loans described in subparagraph 
                        (A) shall be placed on land that is not prime 
                        farmland, in order to preserve the maximum 
                        practicable quantity of prime farmlands for 
                        production of food and fiber.
                            ``(ii) Increased rate.--In any case in 
                        which other options exist for the siting of 
                        construction described in clause (i) and the 
                        governmental authority still desires to carry 
                        out the construction on prime farmland, the 2-
                        percent interest rate increase provided by this 
                        paragraph shall apply, but that increased 
                        interest rate shall not apply where such other 
                        options do not exist.
                    ``(C) Applicable authorities.--The authorities 
                referred to in subparagraph (A) are--
                            ``(i) the provisions of section 3502(a) 
                        relating to loans for recreational developments 
                        and essential community facilities;
                            ``(ii) section 3601(e)(2)(A); and
                            ``(iii) section 3601(c).
    ``(c) Payment of Charges.--A borrower of a loan made or guaranteed 
under this subtitle shall pay such fees and other charges as the 
Secretary may require, and prepay to the Secretary such taxes and 
insurance as the Secretary may require, on such terms and conditions as 
the Secretary may prescribe.
    ``(d) Security.--
            ``(1) In general.--The Secretary shall take as security for 
        an obligation entered into in connection with a loan made under 
        this subtitle such security as the Secretary may require.
            ``(2) Liens to united states.--An instrument for security 
        under paragraph (1) may constitute a lien running to the United 
        States notwithstanding the fact that the note for the security 
        may be held by a lender other than the United States.
            ``(3) Multiple loans.--A borrower may use the same 
        collateral to secure 2 or more loans made or guaranteed under 
        this subtitle, except that the outstanding amount of the loans 
        may not exceed the total value of the collateral.
    ``(e) Legal Counsel for Small Loans.--In the case of a loan of less 
than $500,000 made or guaranteed under section 3501 that is evidenced 
by a note or mortgage (as distinguished from a bond issue), the 
borrower shall not be required to appoint bond counsel to review the 
legal validity of the loan if the Secretary has available legal counsel 
to perform the review.

``SEC. 3702. STRATEGIC ECONOMIC AND COMMUNITY DEVELOPMENT.

    ``(a) Priority.--In the case of any rural development program 
authorized by this subtitle, the Secretary may give priority to 
applications that are otherwise eligible and support strategic 
community and economic development plans on a multijurisdictional 
basis, as approved by the Secretary.
    ``(b) Evaluation.--In evaluating strategic applications, the 
Secretary shall give a higher priority to strategic applications for a 
plan described in subsection (a) that demonstrate--
            ``(1) the plan was developed through the collaboration of 
        multiple stakeholders in the service area of the plan, 
        including the participation of combinations of stakeholders 
        such as State, local, and tribal governments, nonprofit 
        institutions, institutions of higher education, and private 
        entities;
            ``(2) an understanding of the applicable regional resources 
        that could support the plan, including natural resources, human 
        resources, infrastructure, and financial resources;
            ``(3) investment from other Federal agencies;
            ``(4) investment from philanthropic organizations; and
            ``(5) clear objectives for the plan and the ability to 
        establish measurable performance measures and to track progress 
        toward meeting the objectives.

``SEC. 3703. GUARANTEED RURAL DEVELOPMENT LOANS.

    ``(a) In General.--The Secretary may provide financial assistance 
to a borrower for a purpose provided in this subtitle by guaranteeing a 
loan made by any Federal or State chartered bank, savings and loan 
association, cooperative lending agency, or other legally organized 
lending agency.
    ``(b) Interest Rate.--The interest rate payable by a borrower on 
the portion of a guaranteed loan that is sold by a lender to the 
secondary market under this subtitle may be lower than the interest 
rate charged on the portion retained by the lender.
    ``(c) Maximum Guarantee of 90 Percent.--Except as provided in 
subsections (d) and (e), a loan guarantee under this subtitle shall be 
for not more than 90 percent of the principal and interest due on the 
loan.
    ``(d) Refinanced Loans Guaranteed at 95 Percent.--The Secretary 
shall guarantee 95 percent of--
            ``(1) in the case of a loan that solely refinances a direct 
        loan made under this subtitle, the principal and interest due 
        on the loan on the date of the refinancing; or
            ``(2) 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 subtitle that 
        is outstanding on the date on which the loan is guaranteed.
    ``(e) Risk of Loss.--
            ``(1) In general.--Subject to subsection (b), the Secretary 
        may not make a loan under section 3501 or 3601 unless the 
        Secretary determines that no other lender is willing to make 
        the loan and assume 10 percent of the potential loss to be 
        sustained from the loan.
            ``(2) Exception for nonprofit groups.--Paragraph (1) shall 
        not apply to a public body or nonprofit association, including 
        an Indian tribe.

``SEC. 3704. RURAL DEVELOPMENT INSURANCE FUND.

    ``(a) Definition of Rural Development Loan.--In this section, the 
term `rural development loan' means a loan provided for by section 3501 
or 3601.
    ``(b) Establishment.--There is established in the Treasury of the 
United States a fund to be known as the `Rural Development Insurance 
Fund' that shall be used by the Secretary to discharge the obligations 
of the Secretary under contracts making or guaranteeing rural 
development loans.

``SEC. 3705. RURAL ECONOMIC AREA PARTNERSHIP ZONES.

    ``(a) In General.--The Secretary may designate additional areas as 
rural economic area partnership zones to be assisted under this 
chapter--
            ``(1) through an open, competitive process; and
            ``(2) with priority given to rural areas--
                    ``(A) with excessive unemployment or 
                underemployment, a high percentage of low-income 
                residents, or high rates of outmigration, as determined 
                by the Secretary; and
                    ``(B) that the Secretary determines have a 
                substantial need for assistance.
    ``(b) Requirements.--The Secretary shall carry out those rural 
economic area partnership zones administratively in effect on the date 
of enactment of the Agriculture Reform, Food, and Jobs Act of 2012 in 
accordance with the terms and conditions contained in the memoranda of 
agreement entered into by the Secretary for the rural economic area 
partnership zones.

``SEC. 3706. STREAMLINING APPLICATIONS AND IMPROVING ACCESSIBILITY OF 
              RURAL DEVELOPMENT PROGRAMS.

    ``The Secretary shall expedite the process of creating user-
friendly and accessible application forms and procedures prioritizing 
programs and applications at the individual level with an emphasis on 
utilizing current technology including online applications and 
submission processes.

``SEC. 3707. STATE RURAL DEVELOPMENT PARTNERSHIP.

    ``(a) Definitions.--In this section:
            ``(1) Agency with rural responsibilities.--The term `agency 
        with rural responsibilities' means any executive agency (as 
        defined in section 105 of title 5, United States Code) that 
        implements a Federal law, or administers a program, targeted at 
        or having a significant impact on rural areas.
            ``(2) Partnership.--The term `Partnership' means the State 
        Rural Development Partnership continued by subsection (b).
            ``(3) State rural development council.--The term `State 
        rural development council' means a State rural development 
        council that meets the requirements of subsection (c).
    ``(b) Partnership.--
            ``(1) In general.--The Secretary shall support the State 
        Rural Development Partnership comprised of State rural 
        development councils.
            ``(2) Purposes.--The purposes of the Partnership are to 
        empower and build the capacity of States, regions, and rural 
        communities to design flexible and innovative responses to 
        their rural development needs in a manner that maximizes 
        collaborative public- and private-sector cooperation and 
        minimizes regulatory redundancy.
            ``(3) Coordinating panel.--A panel consisting of 
        representatives of State rural development councils shall be 
        established--
                    ``(A) to lead and coordinate the strategic 
                operation and policies of the Partnership; and
                    ``(B) to facilitate effective communication among 
                the members of the Partnership, including the sharing 
                of best practices.
            ``(4) Role of federal government.--The role of the Federal 
        Government in the Partnership may be that of a partner and 
        facilitator, with Federal agencies authorized--
                    ``(A) to cooperate with States to implement the 
                Partnership;
                    ``(B) to provide States with the technical and 
                administrative support necessary to plan and implement 
                tailored rural development strategies to meet local 
                needs;
                    ``(C) to ensure that the head of each agency with 
                rural responsibilities directs appropriate field staff 
                to participate fully with the State rural development 
                council within the jurisdiction of the field staff; and
                    ``(D) to enter into cooperative agreements with, 
                and to provide grants and other assistance to, State 
                rural development councils.
    ``(c) State Rural Development Councils.--
            ``(1) Establishment.--Notwithstanding chapter 63 of title 
        31, United States Code, each State may elect to participate in 
        the Partnership by entering into an agreement with the 
        Secretary to recognize a State rural development council.
            ``(2) Composition.--A State rural development council 
        shall--
                    ``(A) be composed of representatives of Federal, 
                State, local, and tribal governments, nonprofit 
                organizations, regional organizations, the private 
                sector, and other entities committed to rural 
                advancement; and
                    ``(B) have a nonpartisan and nondiscriminatory 
                membership that--
                            ``(i) is broad and representative of the 
                        economic, social, and political diversity of 
                        the State; and
                            ``(ii) shall be responsible for the 
                        governance and operations of the State rural 
                        development council.
            ``(3) Duties.--A State rural development council shall--
                    ``(A) facilitate collaboration among Federal, 
                State, local, and tribal governments and the private 
                and nonprofit sectors in the planning and 
                implementation of programs and policies that have an 
                impact on rural areas of the State;
                    ``(B) monitor, report, and comment on policies and 
                programs that address, or fail to address, the needs of 
                the rural areas of the State;
                    ``(C) as part of the Partnership, facilitate the 
                development of strategies to reduce or eliminate 
                conflicting or duplicative administrative or regulatory 
                requirements of Federal, State, local, and tribal 
                governments; and
                    ``(D)(i) provide to the Secretary an annual plan 
                with goals and performance measures; and
                    ``(ii) submit to the Secretary an annual report on 
                the progress of the State rural development council in 
                meeting the goals and measures.
            ``(4) Federal participation in state rural development 
        councils.--
                    ``(A) In general.--A State Director for Rural 
                Development of the Department of Agriculture, other 
                employees of the Department, and employees of other 
                Federal agencies with rural responsibilities shall 
                fully participate as voting members in the governance 
                and operations of State rural development councils 
                (including activities related to grants, contracts, and 
                other agreements in accordance with this section) on an 
                equal basis with other members of the State rural 
                development councils.
                    ``(B) Conflicts.--Participation by a Federal 
                employee in a State rural development council in 
                accordance with this paragraph shall not constitute a 
                violation of section 205 or 208 of title 18, United 
                States Code.
    ``(d) Administrative Support of the Partnership.--
            ``(1) Detail of employees.--
                    ``(A) In general.--In order to provide experience 
                in intergovernmental collaboration, the head of an 
                agency with rural responsibilities that elects to 
                participate in the Partnership may, and is encouraged 
                to, detail to the Secretary for the support of the 
                Partnership 1 or more employees of the agency with 
                rural responsibilities without reimbursement for a 
                period of up to 1 year.
                    ``(B) Civil service status.--The detail shall be 
                without interruption or loss of civil service status or 
                privilege.
            ``(2) Additional support.--The Secretary may provide for 
        any additional support staff to the Partnership as the 
        Secretary determines to be necessary to carry out the duties of 
        the Partnership.
            ``(3) Intermediaries.--The Secretary may enter into a 
        contract with a qualified intermediary under which the 
        intermediary shall be responsible for providing administrative 
        and technical assistance to a State rural development council, 
        including administering the financial assistance available to 
        the State rural development council.
    ``(e) Matching Requirements for State Rural Development Councils.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        State rural development council shall provide matching funds, 
        or in-kind goods or services, to support the activities of the 
        State rural development council in an amount that is not less 
        than 33 percent of the amount of Federal funds received from a 
        Federal agency under subsection (f)(2).
            ``(2) Exceptions to matching requirement for certain 
        federal funds.--Paragraph (1) shall not apply to funds, grants, 
        funds provided under contracts or cooperative agreements, 
        gifts, contributions, or technical assistance received by a 
        State rural development council from a Federal agency that are 
        used--
                    ``(A) to support 1 or more specific program or 
                project activities; or
                    ``(B) to reimburse the State rural development 
                council for services provided to the Federal agency 
                providing the funds, grants, funds provided under 
                contracts or cooperative agreements, gifts, 
                contributions, or technical assistance.
            ``(3) Department's share.--The Secretary shall develop a 
        plan to decrease, over time, the share of the Department of 
        Agriculture of the cost of the core operations of State rural 
        development councils.
    ``(f) Funding.--
            ``(1) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this section $5,000,000 for 
        each of fiscal years 2013 through 2017.
            ``(2) Federal agencies.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law limiting the ability of an agency, 
                along with other agencies, to provide funds to a State 
                rural development council in order to carry out the 
                purposes of this section, a Federal agency may make 
                grants, gifts, or contributions to, provide technical 
                assistance to, or enter into contracts or cooperative 
                agreements with, a State rural development council.
                    ``(B) Assistance.--Federal agencies are encouraged 
                to use funds made available for programs that have an 
                impact on rural areas to provide assistance to, and 
                enter into contracts with, a State rural development 
                council, as described in subparagraph (A).
            ``(3) Contributions.--A State rural development council may 
        accept private contributions.
    ``(g) Termination.--The authority provided under this section shall 
terminate on September 30, 2017.

                 ``CHAPTER 4--DELTA REGIONAL AUTHORITY

``SEC. 3801. DEFINITIONS.

    ``In this chapter:
            ``(1) Authority.--The term `Authority' means the Delta 
        Regional Authority established by section 3802.
            ``(2) Federal grant program.--The term `Federal grant 
        program' means a Federal grant program to provide assistance 
        in--
                    ``(A) acquiring or developing land;
                    ``(B) constructing or equipping a highway, road, 
                bridge, or facility; or
                    ``(C) carrying out other economic development 
                activities.
            ``(3) Region.--The term `region' means the Lower 
        Mississippi (as defined in section 4 of the Delta Development 
        Act (42 U.S.C. 3121 note; Public Law 100-460)).

``SEC. 3802. DELTA REGIONAL AUTHORITY.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Delta Regional 
        Authority.
            ``(2) Composition.--The Authority shall be composed of--
                    ``(A) a Federal member, to be appointed by the 
                President, with the advice and consent of the Senate; 
                and
                    ``(B) the Governor (or a designee of the Governor) 
                of each State in the region that elects to participate 
                in the Authority.
            ``(3) Cochairpersons.--The Authority shall be headed by--
                    ``(A) the Federal member, who shall serve as--
                            ``(i) the Federal cochairperson; and
                            ``(ii) a liaison between the Federal 
                        Government and the Authority; and
                    ``(B) a State cochairperson, who shall be--
                            ``(i) a Governor of a participating State 
                        in the region; and
                            ``(ii) elected by the State members for a 
                        term of not less than 1 year.
            ``(4) Alabama.--Notwithstanding any other provision of law, 
        the State of Alabama shall be a full member of the Authority 
        and shall be entitled to all rights and privileges that the 
        membership affords to all other participating States in the 
        Authority.
    ``(b) Alternate Members.--
            ``(1) State alternates.--The State member of a 
        participating State may have a single alternate, who shall be--
                    ``(A) a resident of that State; and
                    ``(B) appointed by the Governor of the State.
            ``(2) Alternate federal cochairperson.--The President shall 
        appoint an alternate Federal cochairperson.
            ``(3) Quorum.--A State alternate shall not be counted 
        toward the establishment of a quorum of the Authority in any 
        instance in which a quorum of the State members is required to 
        be present.
            ``(4) Delegation of power.--No power or responsibility of 
        the Authority specified in paragraphs (2) and (3) of subsection 
        (c), and no voting right of any Authority member, shall be 
        delegated to any person--
                    ``(A) who is not an Authority member; or
                    ``(B) who is not entitled to vote in Authority 
                meetings.
    ``(c) Voting.--
            ``(1) In general.--A decision by the Authority shall 
        require a majority vote of the Authority (not including any 
        member representing a State that is delinquent under subsection 
        (g)(2)(C)) to be effective.
            ``(2) Quorum.--A quorum of State members shall be required 
        to be present for the Authority to make any policy decision, 
        including--
                    ``(A) a modification or revision of an Authority 
                policy decision;
                    ``(B) approval of a State or regional development 
                plan; and
                    ``(C) any allocation of funds among the States.
            ``(3) Project and grant proposals.--The approval of project 
        and grant proposals shall be--
                    ``(A) a responsibility of the Authority; and
                    ``(B) conducted in accordance with section 3809.
            ``(4) Voting by alternate members.--An alternate member 
        shall vote in the case of the absence, death, disability, 
        removal, or resignation of the Federal or State representative 
        for which the alternate member is an alternate.
    ``(d) Duties.--The Authority shall--
            ``(1) develop, on a continuing basis, comprehensive and 
        coordinated plans and programs to establish priorities and 
        approve grants for the economic development of the region, 
        giving due consideration to other Federal, State, and local 
        planning and development activities in the region;
            ``(2) review, and where appropriate amend, priorities in a 
        development plan for the region (including 5-year regional 
        outcome targets);
            ``(3) assess the needs and assets of the region based on 
        available research, demonstrations, investigations, 
        assessments, and evaluations of the region prepared by Federal, 
        State, and local agencies, universities, local development 
        districts, and other nonprofit groups;
            ``(4) formulate and recommend to the Governors and 
        legislatures of States that participate in the Authority forms 
        of interstate cooperation;
            ``(5) work with State and local agencies in developing 
        appropriate model legislation;
            ``(6)(A) enhance the capacity of, and provide support for, 
        local development districts in the region; or
            ``(B) if no local development district exists in an area in 
        a participating State in the region, foster the creation of a 
        local development district;
            ``(7) encourage private investment in industrial, 
        commercial, and other economic development projects in the 
        region; and
            ``(8) cooperate with and assist State governments with 
        economic development programs of participating States.
    ``(e) Administration.--In carrying out subsection (d), the 
Authority may--
            ``(1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and print 
        or otherwise reproduce and distribute a description of the 
        proceedings and reports on actions by the Authority as the 
        Authority considers appropriate;
            ``(2) authorize, through the Federal or State cochairperson 
        or any other member of the Authority designated by the 
        Authority, the administration of oaths if the Authority 
        determines that testimony should be taken or evidence received 
        under oath;
            ``(3) request from any Federal, State, or local department 
        or agency such information as may be available to or procurable 
        by the department or agency that may be of use to the Authority 
        in carrying out duties of the Authority;
            ``(4) adopt, amend, and repeal bylaws, rules, and 
        regulations governing the conduct of Authority business and the 
        performance of Authority duties;
            ``(5) request the head of any Federal department or agency 
        to detail to the Authority such personnel as the Authority 
        requires to carry out duties of the Authority, each such detail 
        to be without loss of seniority, pay, or other employee status;
            ``(6) request the head of any State department or agency or 
        local government to detail to the Authority such personnel as 
        the Authority requires to carry out duties of the Authority, 
        each such detail to be without loss of seniority, pay, or other 
        employee status;
            ``(7) provide for coverage of Authority employees in a 
        suitable retirement and employee benefit system by--
                    ``(A) making arrangements or entering into 
                contracts with any participating State government; or
                    ``(B) otherwise providing retirement and other 
                employee benefit coverage;
            ``(8) accept, use, and dispose of gifts or donations of 
        services or real, personal, tangible, or intangible property;
            ``(9) enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as are necessary 
        to carry out Authority duties, including any contracts, leases, 
        or cooperative agreements with--
                    ``(A) any department, agency, or instrumentality of 
                the United States;
                    ``(B) any State (including a political subdivision, 
                agency, or instrumentality of the State); or
                    ``(C) any person, firm, association, or 
                corporation; and
            ``(10) establish and maintain a central office and field 
        offices at such locations as the Authority may select.
    ``(f) Federal Agency Cooperation.--A Federal agency shall--
            ``(1) cooperate with the Authority; and
            ``(2) provide, on request of the Federal cochairperson, 
        appropriate assistance in carrying out this chapter, in 
        accordance with applicable Federal laws (including 
        regulations).
    ``(g) Administrative Expenses.--
            ``(1) In general.--Administrative expenses of the Authority 
        (except for the expenses of the Federal cochairperson, 
        including expenses of the alternate and staff of the Federal 
        cochairperson, which shall be paid solely by the Federal 
        Government) shall be paid--
                    ``(A) by the Federal Government, in an amount equal 
                to 50 percent of the administrative expenses; and
                    ``(B) by the States in the region participating in 
                the Authority, in an amount equal to 50 percent of the 
                administrative expenses.
            ``(2) State share.--
                    ``(A) In general.--The share of administrative 
                expenses of the Authority to be paid by each State 
                shall be determined by the Authority.
                    ``(B) No federal participation.--The Federal 
                cochairperson shall not participate or vote in any 
                decision under subparagraph (A).
                    ``(C) Delinquent states.--If a State is delinquent 
                in payment of the State's share of administrative 
                expenses of the Authority under this subsection--
                            ``(i) no assistance under this chapter 
                        shall be furnished to the State (including 
                        assistance to a political subdivision or a 
                        resident of the State); and
                            ``(ii) no member of the Authority from the 
                        State shall participate or vote in any action 
                        by the Authority.
    ``(h) Compensation.--
            ``(1) Federal cochairperson.--The Federal cochairperson 
        shall be compensated by the Federal Government at level III of 
        the Executive Schedule in subchapter II of chapter 53 of title 
        5, United States Code.
            ``(2) Alternate federal cochairperson.--The alternate 
        Federal cochairperson--
                    ``(A) shall be compensated by the Federal 
                Government at level V of the Executive Schedule 
                described in paragraph (1); and
                    ``(B) when not actively serving as an alternate for 
                the Federal cochairperson, shall perform such functions 
                and duties as are delegated by the Federal 
                cochairperson.
            ``(3) State members and alternates.--
                    ``(A) In general.--A State shall compensate each 
                member and alternate representing the State on the 
                Authority at the rate established by law of the State.
                    ``(B) No additional compensation.--No State member 
                or alternate member shall receive any salary, or any 
                contribution to or supplementation of salary from any 
                source other than the State for services provided by 
                the member or alternate to the Authority.
            ``(4) Detailed employees.--
                    ``(A) In general.--No person detailed to serve the 
                Authority under subsection (e)(6) shall receive any 
                salary or any contribution to or supplementation of 
                salary for services provided to the Authority from--
                            ``(i) any source other than the State, 
                        local, or intergovernmental department or 
                        agency from which the person was detailed; or
                            ``(ii) the Authority.
                    ``(B) Violation.--Any person that violates this 
                paragraph shall be fined not more than $5,000, 
                imprisoned not more than 1 year, or both.
                    ``(C) Applicable law.--The Federal cochairperson, 
                the alternate Federal cochairperson, and any Federal 
                officer or employee detailed to duty on the Authority 
                under subsection (e)(5) shall not be subject to 
                subparagraph (A), but shall remain subject to sections 
                202 through 209 of title 18, United States Code.
            ``(5) Additional personnel.--
                    ``(A) Compensation.--
                            ``(i) In general.--The Authority may 
                        appoint and fix the compensation of an 
                        executive director and such other personnel as 
                        are necessary to enable the Authority to carry 
                        out the duties of the Authority.
                            ``(ii) Exception.--Compensation under 
                        clause (i) shall not exceed the maximum rate 
                        for the Senior Executive Service under section 
                        5382 of title 5, United States Code, including 
                        any applicable locality-based comparability 
                        payment that may be authorized under section 
                        5304(h)(2)(C) of that title.
                    ``(B) Executive director.--The executive director 
                shall be responsible for--
                            ``(i) the carrying out of the 
                        administrative duties of the Authority;
                            ``(ii) direction of the Authority staff; 
                        and
                            ``(iii) such other duties as the Authority 
                        may assign.
                    ``(C) No federal employee status.--No member, 
                alternate, officer, or employee of the Authority 
                (except the Federal cochairperson of the Authority, the 
                alternate and staff for the Federal cochairperson, and 
                any Federal employee detailed to the Authority under 
                subsection (e)(5)) shall be considered to be a Federal 
                employee for any purpose.
    ``(i) Conflicts of Interest.--
            ``(1) In general.--Except as provided under paragraph (2), 
        no State member, alternate, officer, or employee of the 
        Authority shall participate personally and substantially as a 
        member, alternate, officer, or employee of the Authority, 
        through decision, approval, disapproval, recommendation, the 
        rendering of advice, investigation, or otherwise, in any 
        proceeding, application, request for a ruling or other 
        determination, contract, claim, controversy, or other matter in 
        which, to knowledge of the member, alternate, officer, or 
        employee, there is a financial interest of--
                    ``(A) the member, alternate, officer, or employee;
                    ``(B) the spouse, minor child, partner, or 
                organization (other than a State or political 
                subdivision of the State) of the member, alternate, 
                officer, or employee, in which the member, alternate, 
                officer, or employee is serving as officer, director, 
                trustee, partner, or employee; or
                    ``(C) any person or organization with whom the 
                member, alternate, officer, or employee is negotiating 
                or has any arrangement concerning prospective 
                employment.
            ``(2) Disclosure.--Paragraph (1) shall not apply if the 
        State member, alternate, officer, or employee--
                    ``(A) immediately advises the Authority of the 
                nature and circumstances of the proceeding, 
                application, request for a ruling or other 
                determination, contract, claim, controversy, or other 
                particular matter presenting a potential conflict of 
                interest;
                    ``(B) makes full disclosure of the financial 
                interest; and
                    ``(C) before the proceeding concerning the matter 
                presenting the conflict of interest, receives a written 
                determination by the Authority that the interest is not 
                so substantial as to be likely to affect the integrity 
                of the services that the Authority may expect from the 
                State member, alternate, officer, or employee.
            ``(3) Violation.--Any person that violates this subsection 
        shall be fined not more than $10,000, imprisoned not more than 
        2 years, or both.
    ``(j) Validity of Contracts, Loans, and Grants.--The Authority may 
declare void any contract, loan, or grant of or by the Authority in 
relation to which the Authority determines that there has been a 
violation of any provision under subsection (h)(4), subsection (i), or 
sections 202 through 209 of title 18, United States Code.

``SEC. 3803. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.

    ``(a) In General.--The Authority may approve grants to States and 
public and nonprofit entities for projects, approved in accordance with 
section 3809--
            ``(1) to develop the transportation infrastructure of the 
        region for the purpose of facilitating economic development in 
        the region (except that grants for this purpose may only be 
        made to a State or local government);
            ``(2) to assist the region in obtaining the job training, 
        employment-related education, and business development (with an 
        emphasis on entrepreneurship) that are needed to build and 
        maintain strong local economies;
            ``(3) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for 
        improving basic public services;
            ``(4) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for 
        equipping industrial parks and related facilities; and
            ``(5) to otherwise achieve the purposes of this chapter.
    ``(b) Funding.--
            ``(1) In general.--Funds for grants under subsection (a) 
        may be provided--
                    ``(A) entirely from appropriations to carry out 
                this section;
                    ``(B) in combination with funds available under 
                another Federal or Federal grant program; or
                    ``(C) from any other source.
            ``(2) Priority of funding.--To best build the foundations 
        for long-term economic development and to complement other 
        Federal and State resources in the region, Federal funds 
        available under this chapter shall be focused on the activities 
        in the following order or priority:
                    ``(A) Basic public infrastructure in distressed 
                counties and isolated areas of distress.
                    ``(B) Transportation infrastructure for the purpose 
                of facilitating economic development in the region.
                    ``(C) Business development, with emphasis on 
                entrepreneurship.
                    ``(D) Job training or employment-related education, 
                with emphasis on use of existing public educational 
                institutions located in the region.

``SEC. 3804. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    ``(a) Finding.--Congress finds that certain States and local 
communities of the region, including local development districts, may 
be unable to take maximum advantage of Federal grant programs for which 
the States and communities are eligible because--
            ``(1) the States or communities lack the economic resources 
        to provide the required matching share; or
            ``(2) there are insufficient funds available under the 
        applicable Federal law authorizing the Federal grant program to 
        meet pressing needs of the region.
    ``(b) Federal Grant Program Funding.--Notwithstanding any provision 
of law limiting the Federal share, the areas eligible for assistance, 
or the authorizations of appropriations of any Federal grant program, 
and in accordance with subsection (c), the Authority, with the approval 
of the Federal cochairperson and with respect to a project to be 
carried out in the region--
            ``(1) may increase the Federal share of the costs of a 
        project under the Federal grant program to not more than 90 
        percent (except as provided in section 3806(b)); and
            ``(2) shall use amounts made available to carry out this 
        chapter to pay the increased Federal share.
    ``(c) Certifications.--
            ``(1) In general.--In the case of any project for which all 
        or any portion of the basic Federal share of the costs of the 
        project is proposed to be paid under this section, no Federal 
        contribution shall be made until the Federal official 
        administering the Federal law that authorizes the Federal grant 
        program certifies that the project--
                    ``(A) meets (except as provided in subsection (b)) 
                the applicable requirements of the applicable Federal 
                grant program; and
                    ``(B) could be approved for Federal contribution 
                under the Federal grant program if funds were available 
                under the law for the project.
            ``(2) Certification by authority.--
                    ``(A) In general.--The certifications and 
                determinations required to be made by the Authority for 
                approval of projects under this Act in accordance with 
                section 3809 shall be--
                            ``(i) controlling; and
                            ``(ii) accepted by the Federal agencies.
                    ``(B) Acceptance by federal cochairperson.--In the 
                case of any project described in paragraph (1), any 
                finding, report, certification, or documentation 
                required to be submitted with respect to the project to 
                the head of the department, agency, or instrumentality 
                of the Federal Government responsible for the 
                administration of the Federal grant program under which 
                the project is carried out shall be accepted by the 
                Federal cochairperson.

``SEC. 3805. LOCAL DEVELOPMENT DISTRICTS; CERTIFICATION AND 
              ADMINISTRATIVE EXPENSES.

    ``(a) Definition of Local Development District.--In this section, 
the term `local development district' means an entity that--
            ``(1) is--
                    ``(A) a planning district in existence on the date 
                of enactment of the Agriculture Reform, Food, and Jobs 
                Act of 2012 that is recognized by the Secretary; or
                    ``(B) if an entity described in subparagraph (A) 
                does not exist--
                            ``(i) organized and operated in a manner 
                        that ensures broad-based community 
                        participation and an effective opportunity for 
                        other nonprofit groups to contribute to the 
                        development and implementation of programs in 
                        the region;
                            ``(ii) governed by a policy board with at 
                        least a simple majority of members consisting 
                        of elected officials or employees of a general 
                        purpose unit of local government who have been 
                        appointed to represent the government;
                            ``(iii) certified to the Authority as 
                        having a charter or authority that includes the 
                        economic development of counties or parts of 
                        counties or other political subdivisions within 
                        the region--
                                    ``(I) by the Governor of each State 
                                in which the entity is located; or
                                    ``(II) by the State officer 
                                designated by the appropriate State law 
                                to make the certification; and
                            ``(iv)(I) a nonprofit incorporated body 
                        organized or chartered under the law of the 
                        State in which the entity is located;
                            ``(II) a nonprofit agency or 
                        instrumentality of a State or local government;
                            ``(III) a public organization established 
                        before December 21, 2000, under State law for 
                        creation of multi-jurisdictional, area-wide 
                        planning organizations; or
                            ``(IV) a nonprofit association or 
                        combination of bodies, agencies, and 
                        instrumentalities described in subclauses (I) 
                        through (III); and
            ``(2) has not, as certified by the Federal cochairperson--
                    ``(A) inappropriately used Federal grant funds from 
                any Federal source; or
                    ``(B) appointed an officer who, during the period 
                in which another entity inappropriately used Federal 
                grant funds from any Federal source, was an officer of 
                the other entity.
    ``(b) Grants to Local Development Districts.--
            ``(1) In general.--The Authority shall make grants for 
        administrative expenses under this section.
            ``(2) Conditions for grants.--
                    ``(A) Maximum amount.--The amount of any grant 
                awarded under paragraph (1) shall not exceed 80 percent 
                of the administrative expenses of the local development 
                district receiving the grant.
                    ``(B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded to a State agency 
                certified as a local development district for a period 
                greater than 3 years.
                    ``(C) Local share.--The contributions of a local 
                development district for administrative expenses may be 
                in cash or in kind, fairly evaluated, including space, 
                equipment, and services.
    ``(c) Duties of Local Development Districts.--A local development 
district shall--
            ``(1) operate as a lead organization serving multicounty 
        areas in the region at the local level; and
            ``(2) serve as a liaison between State and local 
        governments, nonprofit organizations (including community-based 
        groups and educational institutions), the business community, 
        and citizens that--
                    ``(A) are involved in multijurisdictional planning;
                    ``(B) provide technical assistance to local 
                jurisdictions and potential grantees; and
                    ``(C) provide leadership and civic development 
                assistance.

``SEC. 3806. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED COUNTIES.

    ``(a) Designations.--Each year, the Authority, in accordance with 
such criteria as the Authority may establish, shall designate--
            ``(1) as distressed counties, counties in the region that 
        are the most severely and persistently distressed and 
        underdeveloped and have high rates of poverty or unemployment;
            ``(2) as nondistressed counties, counties in the region 
        that are not designated as distressed counties under paragraph 
        (1); and
            ``(3) as isolated areas of distress, areas located in 
        nondistressed counties (as designated under paragraph (2)) that 
        have high rates of poverty or unemployment.
    ``(b) Distressed Counties.--
            ``(1) In general.--The Authority shall allocate at least 75 
        percent of the appropriations made available under section 3813 
        for programs and projects designed to serve the needs of 
        distressed counties and isolated areas of distress in the 
        region.
            ``(2) Funding limitations.--The funding limitations under 
        section 3804(b) shall not apply to a project providing 
        transportation or basic public services to residents of 1 or 
        more distressed counties or isolated areas of distress in the 
        region.
    ``(c) Nondistressed Counties.--
            ``(1) In general.--Except as provided in this subsection, 
        no funds shall be provided under this chapter for a project 
        located in a county designated as a nondistressed county under 
        subsection (a)(2).
            ``(2) Exceptions.--
                    ``(A) In general.--The funding prohibition under 
                paragraph (1) shall not apply to grants to fund the 
                administrative expenses of local development districts 
                under section 3805(b).
                    ``(B) Multicounty projects.--The Authority may 
                waive the application of the funding prohibition under 
                paragraph (1) to a multicounty project that includes 
                participation by a nondistressed county; or any other 
                type of project if the Authority determines that the 
                project could bring significant benefits to areas of 
                the region outside a nondistressed county.
                    ``(C) Isolated areas of distress.--For a 
                designation of an isolated area of distress for 
                assistance to be effective, the designation shall be 
                supported--
                            ``(i) by the most recent Federal data 
                        available; or
                            ``(ii) if no recent Federal data are 
                        available, by the most recent data available 
                        through the government of the State in which 
                        the isolated area of distress is located.
    ``(d) Transportation and Basic Public Infrastructure.--The 
Authority shall allocate at least 50 percent of any funds made 
available under section 3813 for transportation and basic public 
infrastructure projects authorized under paragraphs (1) and (3) of 
section 3803(a).

``SEC. 3807. DEVELOPMENT PLANNING PROCESS.

    ``(a) State Development Plan.--In accordance with policies 
established by the Authority, each State member shall submit a 
development plan for the area of the region represented by the State 
member.
    ``(b) Content of Plan.--A State development plan submitted under 
subsection (a) shall reflect the goals, objectives, and priorities 
identified in the regional development plan developed under section 
3802(d)(2).
    ``(c) Consultation With Interested Local Parties.--In carrying out 
the development planning process (including the selection of programs 
and projects for assistance), a State may--
            ``(1) consult with--
                    ``(A) local development districts; and
                    ``(B) local units of government; and
            ``(2) take into consideration the goals, objectives, 
        priorities, and recommendations of the entities described in 
        paragraph (1).
    ``(d) Public Participation.--
            ``(1) In general.--The Authority and applicable State and 
        local development districts shall encourage and assist, to the 
        maximum extent practicable, public participation in the 
        development, revision, and implementation of all plans and 
        programs under this chapter.
            ``(2) Regulations.--The Authority shall develop guidelines 
        for providing public participation described in paragraph (1), 
        including public hearings.

``SEC. 3808. PROGRAM DEVELOPMENT CRITERIA.

    ``(a) In General.--In considering programs and projects to be 
provided assistance under this chapter and in establishing a priority 
ranking of the requests for assistance provided by the Authority, the 
Authority shall follow procedures that ensure, to the maximum extent 
practicable, consideration of--
            ``(1) the relationship of the project or class of projects 
        to overall regional development;
            ``(2) the per capita income and poverty and unemployment 
        rates in an area;
            ``(3) the financial resources available to the applicants 
        for assistance seeking to carry out the project, with emphasis 
        on ensuring that projects are adequately financed to maximize 
        the probability of successful economic development;
            ``(4) the importance of the project or class of projects in 
        relation to other projects or classes of projects that may be 
        in competition for the same funds;
            ``(5) the prospects that the project for which assistance 
        is sought will improve, on a continuing rather than a temporary 
        basis, the opportunities for employment, the average level of 
        income, or the economic development of the area served by the 
        project; and
            ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures and 
        the results of the expenditures may be evaluated.
    ``(b) No Relocation Assistance.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        financial assistance authorized by this chapter shall be used 
        to assist a person or entity in relocating from 1 area to 
        another.
            ``(2) Outside businesses.--Financial assistance under this 
        chapter may be used as otherwise authorized by this title to 
        attract businesses from outside the region to the region.
    ``(c) Reduction of Funds.--Funds may be provided for a program or 
project in a State under this chapter only if the Authority determines 
that the level of Federal or State financial assistance provided under 
a law other than this chapter, for the same type of program or project 
in the same area of the State within the region, will not be reduced as 
a result of funds made available by this chapter.

``SEC. 3809. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

    ``(a) In General.--A State or regional development plan or any 
multistate subregional plan that is proposed for development under this 
chapter shall be reviewed and approved by the Authority.
    ``(b) Evaluation by State Member.--An application for a grant or 
any other assistance for a project under this chapter shall be made 
through and evaluated for approval by the State member of the Authority 
representing the applicant.
    ``(c) Certification.--An application for a grant or other 
assistance for a project shall be approved only on certification by the 
State member that the application for the project--
            ``(1) describes ways in which the project complies with any 
        applicable State development plan;
            ``(2) meets applicable criteria under section 3808;
            ``(3) provides adequate assurance that the proposed project 
        will be properly administered, operated, and maintained; and
            ``(4) otherwise meets the requirements of this chapter.
    ``(d) Approval of Grant Applications.--On certification by a State 
member of the Authority of an application for a grant or other 
assistance for a specific project under this section, an affirmative 
vote of the Authority under section 3802(c) shall be required for 
approval of the application.

``SEC. 3810. CONSENT OF STATES.

    ``Nothing in this chapter requires any State to engage in or accept 
any program under this chapter without the consent of the State.

``SEC. 3811. RECORDS.

    ``(a) Records of the Authority.--
            ``(1) In general.--The Authority shall maintain accurate 
        and complete records of all transactions and activities of the 
        Authority.
            ``(2) Availability.--All records of the Authority shall be 
        available for audit and examination by the Comptroller General 
        of the United States and the Inspector General of the 
        Department of Agriculture (including authorized representatives 
        of the Comptroller General and the Inspector General of the 
        Department of Agriculture).
    ``(b) Records of Recipients of Federal Assistance.--
            ``(1) In general.--A recipient of Federal funds under this 
        chapter shall, as required by the Authority, maintain accurate 
        and complete records of transactions and activities financed 
        with Federal funds and report on the transactions and 
        activities to the Authority.
            ``(2) Availability.--All records required under paragraph 
        (1) shall be available for audit by the Comptroller General of 
        the United States, the Inspector General of the Department of 
        Agriculture, and the Authority (including authorized 
        representatives of the Comptroller General, the Inspector 
        General of the Department of Agriculture, and the Authority).

``SEC. 3812. ANNUAL REPORT.

    ``Not later than 180 days after the end of each fiscal year, the 
Authority shall submit to the President and to Congress a report 
describing the activities carried out under this chapter.

``SEC. 3813. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Authority to carry out this chapter $30,000,000 for each of fiscal 
years 2012 through 2017, to remain available until expended.
    ``(b) Administrative Expenses.--Not more than 5 percent of the 
amount appropriated under subsection (a) for a fiscal year shall be 
used for administrative expenses of the Authority.

``SEC. 3814. TERMINATION OF AUTHORITY.

    ``This chapter and the authority provided under this chapter expire 
on October 1, 2017.

         ``CHAPTER 5--NORTHERN GREAT PLAINS REGIONAL AUTHORITY

``SEC. 3821. DEFINITIONS.

    ``In this chapter:
            ``(1) Authority.--The term `Authority' means the Northern 
        Great Plains Regional Authority established by section 3822.
            ``(2) Federal grant program.--The term `Federal grant 
        program' means a Federal grant program to provide assistance 
        in--
                    ``(A) implementing the recommendations of the 
                Northern Great Plains Rural Development Commission 
                established by the Northern Great Plains Rural 
                Development Act (7 U.S.C. 2661 note; Public Law 103-
                318);
                    ``(B) acquiring or developing land;
                    ``(C) constructing or equipping a highway, road, 
                bridge, or facility;
                    ``(D) carrying out other economic development 
                activities; or
                    ``(E) conducting research activities related to the 
                activities described in subparagraphs (A) through (D).
            ``(3) Region.--The term `region' means the States of Iowa, 
        Minnesota, Missouri (other than counties included in the Delta 
        Regional Authority), Nebraska, North Dakota, and South Dakota.

``SEC. 3822. NORTHERN GREAT PLAINS REGIONAL AUTHORITY.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Northern Great 
        Plains Regional Authority.
            ``(2) Composition.--The Authority shall be composed of--
                    ``(A) a Federal member, to be appointed by the 
                President, by and with the advice and consent of the 
                Senate;
                    ``(B) the Governor (or a designee of the Governor) 
                of each State in the region that elects to participate 
                in the Authority; and
                    ``(C) a member of an Indian tribe, who shall be a 
                chairperson of an Indian tribe in the region or a 
                designee of such a chairperson, to be appointed by the 
                President, by and with the advice and consent of the 
                Senate.
            ``(3) Cochairpersons.--The Authority shall be headed by--
                    ``(A) the Federal member, who shall serve as--
                            ``(i) the Federal cochairperson; and
                            ``(ii) a liaison between the Federal 
                        Government and the Authority;
                    ``(B) a State cochairperson, who shall be--
                            ``(i) a Governor of a participating State 
                        in the region; and
                            ``(ii) elected by the State members for a 
                        term of not less than 1 year; and
                    ``(C) the member of an Indian tribe, who shall 
                serve as--
                            ``(i) the tribal cochairperson; and
                            ``(ii) a liaison between the governments of 
                        Indian tribes in the region and the Authority.
            ``(4) Failure to confirm.--
                    ``(A) Federal member.--Notwithstanding any other 
                provision of this section, if a Federal member 
                described in paragraph (2)(A) has not been confirmed by 
                the Senate by not later than 180 days after the date of 
                enactment of the Agriculture Reform, Food, and Jobs Act 
                of 2012, the Authority may organize and operate without 
                the Federal member.
                    ``(B) Tribal cochairperson.--In the case of the 
                tribal cochairperson, if no tribal cochairperson is 
                confirmed by the Senate, the regional authority shall 
                consult and coordinate with the leaders of Indian 
                tribes in the region concerning the activities of the 
                Authority, as appropriate.
    ``(b) Alternate Members.--
            ``(1) Alternate federal cochairperson.--The President shall 
        appoint an alternate Federal cochairperson.
            ``(2) State alternates.--
                    ``(A) In general.--The State member of a 
                participating State may have a single alternate, who 
                shall be--
                            ``(i) a resident of that State; and
                            ``(ii) appointed by the Governor of the 
                        State.
                    ``(B) Quorum.--A State alternate member shall not 
                be counted toward the establishment of a quorum of the 
                members of the Authority in any case in which a quorum 
                of the State members is required to be present.
            ``(3) Alternate tribal cochairperson.--The President shall 
        appoint an alternate tribal cochairperson, by and with the 
        advice and consent of the Senate.
            ``(4) Delegation of power.--No power or responsibility of 
        the Authority specified in paragraphs (2) and (3) of subsection 
        (c), and no voting right of any member of the Authority, shall 
        be delegated to any person who is not--
                    ``(A) a member of the Authority; or
                    ``(B) entitled to vote in Authority meetings.
    ``(c) Voting.--
            ``(1) In general.--A decision by the Authority shall 
        require a majority vote of the Authority (not including any 
        member representing a State that is delinquent under subsection 
        (g)(2)(D)) to be effective.
            ``(2) Quorum.--A quorum of State members shall be required 
        to be present for the Authority to make any policy decision, 
        including--
                    ``(A) a modification or revision of an Authority 
                policy decision;
                    ``(B) approval of a State or regional development 
                plan; and
                    ``(C) any allocation of funds among the States.
            ``(3) Project and grant proposals.--The approval of project 
        and grant proposals shall be--
                    ``(A) a responsibility of the Authority; and
                    ``(B) conducted in accordance with section 3830.
            ``(4) Voting by alternate members.--An alternate member 
        shall vote in the case of the absence, death, disability, 
        removal, or resignation of the Federal, State, or Indian tribe 
        member for whom the alternate member is an alternate.
    ``(d) Duties.--The Authority shall--
            ``(1) develop, on a continuing basis, comprehensive and 
        coordinated plans and programs for multistate cooperation to 
        advance the economic and social well-being of the region and to 
        approve grants for the economic development of the region, 
        giving due consideration to other Federal, State, tribal, and 
        local planning and development activities in the region;
            ``(2) review, and when appropriate amend, priorities in a 
        development plan for the region (including 5-year regional 
        outcome targets);
            ``(3) assess the needs and assets of the region based on 
        available research, demonstrations, investigations, 
        assessments, and evaluations of the region prepared by Federal, 
        State, tribal, and local agencies, universities, regional and 
        local development districts or organizations, and other 
        nonprofit groups;
            ``(4) formulate and recommend to the Governors and 
        legislatures of States that participate in the Authority forms 
        of interstate cooperation for--
                    ``(A) renewable energy development and 
                transmission;
                    ``(B) transportation planning and economic 
                development;
                    ``(C) information technology;
                    ``(D) movement of freight and individuals within 
                the region;
                    ``(E) federally-funded research at institutions of 
                higher education; and
                    ``(F) conservation land management;
            ``(5) work with State, tribal, and local agencies in 
        developing appropriate model legislation;
            ``(6) enhance the capacity of, and provide support for, 
        multistate development and research organizations, local 
        development organizations and districts, and resource 
        conservation districts in the region;
            ``(7) encourage private investment in industrial, 
        commercial, renewable energy, and other economic development 
        projects in the region; and
            ``(8) cooperate with and assist State governments with 
        economic development programs of participating States.
    ``(e) Administration.--In carrying out subsection (d), the 
Authority may--
            ``(1) hold such hearings, sit and act at such times and 
        places, take such testimony, receive such evidence, and print 
        or otherwise reproduce and distribute a description of the 
        proceedings and reports on actions by the Authority as the 
        Authority considers appropriate;
            ``(2) authorize, through the Federal, State, or tribal 
        cochairperson or any other member of the Authority designated 
        by the Authority, the administration of oaths if the Authority 
        determines that testimony should be taken or evidence received 
        under oath;
            ``(3) request from any Federal, State, tribal, or local 
        agency such information as may be available to or procurable by 
        the agency that may be of use to the Authority in carrying out 
        the duties of the Authority;
            ``(4) adopt, amend, and repeal bylaws and rules governing 
        the conduct of business and the performance of duties of the 
        Authority;
            ``(5) request the head of any Federal agency to detail to 
        the Authority such personnel as the Authority requires to carry 
        out duties of the Authority, each such detail to be without 
        loss of seniority, pay, or other employee status;
            ``(6) request the head of any State agency, tribal 
        government, or local government to detail to the Authority such 
        personnel as the Authority requires to carry out duties of the 
        Authority, each such detail to be without loss of seniority, 
        pay, or other employee status;
            ``(7) provide for coverage of Authority employees in a 
        suitable retirement and employee benefit system by--
                    ``(A) making arrangements or entering into 
                contracts with any participating State government or 
                tribal government; or
                    ``(B) otherwise providing retirement and other 
                employee benefit coverage;
            ``(8) accept, use, and dispose of gifts or donations of 
        services or real, personal, tangible, or intangible property;
            ``(9) enter into and perform such contracts, leases, 
        cooperative agreements, or other transactions as are necessary 
        to carry out Authority duties, including any contracts, leases, 
        or cooperative agreements with--
                    ``(A) any department, agency, or instrumentality of 
                the United States;
                    ``(B) any State (including a political subdivision, 
                agency, or instrumentality of the State);
                    ``(C) any Indian tribe in the region; or
                    ``(D) any person, firm, association, or 
                corporation; and
            ``(10) establish and maintain a central office and field 
        offices at such locations as the Authority may select.
    ``(f) Federal Agency Cooperation.--A Federal agency shall--
            ``(1) cooperate with the Authority; and
            ``(2) provide, on request of a cochairperson, appropriate 
        assistance in carrying out this chapter, in accordance with 
        applicable Federal laws (including regulations).
    ``(g) Administrative Expenses.--
            ``(1) Federal share.--The Federal share of the 
        administrative expenses of the Authority shall be--
                    ``(A) for each of fiscal years 2012 and 2013, 100 
                percent;
                    ``(B) for fiscal year 2014, 75 percent; and
                    ``(C) for fiscal year 2015 and each fiscal year 
                thereafter, 50 percent.
            ``(2) Non-federal share.--
                    ``(A) In general.--The non-Federal share of the 
                administrative expenses of the Authority shall be paid 
                by non-Federal sources in the States that participate 
                in the Authority.
                    ``(B) Share paid by each state.--The share of 
                administrative expenses of the Authority to be paid by 
                non-Federal sources in each State shall be determined 
                by the Authority.
                    ``(C) No federal participation.--The Federal 
                cochairperson shall not participate or vote in any 
                decision under subparagraph (B).
                    ``(D) Delinquent states.--If a State is delinquent 
                in payment of the State's share of administrative 
                expenses of the Authority under this subsection--
                            ``(i) no assistance under this chapter 
                        shall be provided to the State (including 
                        assistance to a political subdivision or a 
                        resident of the State); and
                            ``(ii) no member of the Authority from the 
                        State shall participate or vote in any action 
                        by the Authority.
    ``(h) Compensation.--
            ``(1) Federal and tribal cochairpersons.--The Federal 
        cochairperson and the tribal cochairperson shall be compensated 
        by the Federal Government at the annual rate of basic pay 
        prescribed for level III of the Executive Schedule in 
        subchapter II of chapter 53 of title 5, United States Code.
            ``(2) Alternate federal and tribal cochairpersons.--The 
        alternate Federal cochairperson and the alternate tribal 
        cochairperson--
                    ``(A) shall be compensated by the Federal 
                Government at the annual rate of basic pay prescribed 
                for level V of the Executive Schedule described in 
                paragraph (1); and
                    ``(B) when not actively serving as an alternate, 
                shall perform such functions and duties as are 
                delegated by the Federal cochairperson or the tribal 
                cochairperson, respectively.
            ``(3) State members and alternates.--
                    ``(A) In general.--A State shall compensate each 
                member and alternate representing the State on the 
                Authority at the rate established by State law.
                    ``(B) No additional compensation.--No State member 
                or alternate member shall receive any salary, or any 
                contribution to or supplementation of salary from any 
                source other than the State for services provided by 
                the member or alternate member to the Authority.
            ``(4) Detailed employees.--
                    ``(A) In general.--No person detailed to serve the 
                Authority under subsection (e)(6) shall receive any 
                salary or any contribution to or supplementation of 
                salary for services provided to the Authority from--
                            ``(i) any source other than the State, 
                        tribal, local, or intergovernmental agency from 
                        which the person was detailed; or
                            ``(ii) the Authority.
                    ``(B) Violation.--Any person that violates this 
                paragraph shall be fined not more than $5,000, 
                imprisoned not more than 1 year, or both.
                    ``(C) Applicable law.--The Federal cochairperson, 
                the alternate Federal cochairperson, and any Federal 
                officer or employee detailed to duty on the Authority 
                under subsection (e)(5) shall not be subject to 
                subparagraph (A), but shall remain subject to sections 
                202 through 209 of title 18, United States Code.
            ``(5) Additional personnel.--
                    ``(A) Compensation.--
                            ``(i) In general.--The Authority may 
                        appoint and fix the compensation of an 
                        executive director and such other personnel as 
                        are necessary to enable the Authority to carry 
                        out the duties of the Authority.
                            ``(ii) Exception.--Compensation under 
                        clause (i) shall not exceed the maximum rate 
                        for the Senior Executive Service under section 
                        5382 of title 5, United States Code, including 
                        any applicable locality-based comparability 
                        payment that may be authorized under section 
                        5304(h)(2)(C) of that title.
                    ``(B) Executive director.--The executive director 
                shall be responsible for--
                            ``(i) the carrying out of the 
                        administrative duties of the Authority;
                            ``(ii) direction of the Authority staff; 
                        and
                            ``(iii) such other duties as the Authority 
                        may assign.
                    ``(C) No federal employee status.--No member, 
                alternate, officer, or employee of the Authority 
                (except the Federal cochairperson of the Authority, the 
                alternate and staff for the Federal cochairperson, and 
                any Federal employee detailed to the Authority under 
                subsection (e)(5)) shall be considered to be a Federal 
                employee for any purpose.
    ``(i) Conflicts of Interest.--
            ``(1) In general.--Except as provided under paragraph (2), 
        no State member, Indian tribe member, State alternate, officer, 
        or employee of the Authority shall participate personally and 
        substantially as a member, alternate, officer, or employee of 
        the Authority, through decision, approval, disapproval, 
        recommendation, the rendering of advice, investigation, or 
        otherwise, in any proceeding, application, request for a ruling 
        or other determination, contract, claim, controversy, or other 
        matter in which, to knowledge of the member, alternate, 
        officer, or employee, there is a financial interest of--
                    ``(A) the member, alternate, officer, or employee;
                    ``(B) the spouse, minor child, partner, or 
                organization (other than a State or political 
                subdivision of the State or the Indian tribe) of the 
                member, alternate, officer, or employee, in which the 
                member, alternate, officer, or employee is serving as 
                officer, director, trustee, partner, or employee; or
                    ``(C) any person or organization with whom the 
                member, alternate, officer, or employee is negotiating 
                or has any arrangement concerning prospective 
                employment.
            ``(2) Disclosure.--Paragraph (1) shall not apply if the 
        State member, Indian tribe member, alternate, officer, or 
        employee--
                    ``(A) immediately advises the Authority of the 
                nature and circumstances of the proceeding, 
                application, request for a ruling or other 
                determination, contract, claim, controversy, or other 
                particular matter presenting a potential conflict of 
                interest;
                    ``(B) makes full disclosure of the financial 
                interest; and
                    ``(C) before the proceeding concerning the matter 
                presenting the conflict of interest, receives a written 
                determination by the Authority that the interest is not 
                so substantial as to be likely to affect the integrity 
                of the services that the Authority may expect from the 
                State member, Indian tribe member, alternate, officer, 
                or employee.
            ``(3) Violation.--Any person that violates this subsection 
        shall be fined not more than $10,000, imprisoned not more than 
        2 years, or both.
    ``(j) Validity of Contracts, Loans, and Grants.--The Authority may 
declare void any contract, loan, or grant of or by the Authority in 
relation to which the Authority determines that there has been a 
violation of any provision under subsection (h)(4) or subsection (i) of 
this chapter, or sections 202 through 209 of title 18, United States 
Code.

``SEC. 3823. INTERSTATE COOPERATION FOR ECONOMIC OPPORTUNITY AND 
              EFFICIENCY.

    ``(a) In General.--The Authority shall provide assistance to States 
in developing regional plans to address multistate economic issues, 
including plans--
            ``(1) to develop a regional transmission system for 
        movement of renewable energy to markets outside the region;
            ``(2) to address regional transportation concerns, 
        including the establishment of a Northern Great Plains Regional 
        Transportation Working Group;
            ``(3) to encourage and support interstate collaboration on 
        federally-funded research that is in the national interest; and
            ``(4) to establish a Regional Working Group on Agriculture 
        Development and Transportation.
    ``(b) Economic Issues.--The multistate economic issues referred to 
in subsection (a) shall include--
            ``(1) renewable energy development and transmission;
            ``(2) transportation planning and economic development;
            ``(3) information technology;
            ``(4) movement of freight and individuals within the 
        region;
            ``(5) federally-funded research at institutions of higher 
        education; and
            ``(6) conservation land management.

``SEC. 3824. ECONOMIC AND COMMUNITY DEVELOPMENT GRANTS.

    ``(a) In General.--The Authority may approve grants to States, 
Indian tribes, local governments, and public and nonprofit 
organizations for projects, approved in accordance with section 3830--
            ``(1) to assist the region in obtaining the job training, 
        employment-related education, and business development (with an 
        emphasis on entrepreneurship) that are needed to build and 
        maintain strong local economies;
            ``(2) to develop the transportation, renewable energy 
        transmission, and telecommunication infrastructure of the 
        region for the purpose of facilitating economic development in 
        the region (except that grants for this purpose may be made 
        only to States, Indian tribes, local governments, and nonprofit 
        organizations);
            ``(3) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for 
        improving basic public services;
            ``(4) to provide assistance to severely distressed and 
        underdeveloped areas that lack financial resources for 
        equipping industrial parks and related facilities; and
            ``(5) to otherwise achieve the purposes of this chapter.
    ``(b) Funding.--
            ``(1) In general.--Funds for grants under subsection (a) 
        may be provided--
                    ``(A) entirely from appropriations to carry out 
                this section;
                    ``(B) in combination with funds available under 
                another Federal grant program; or
                    ``(C) from any other source.
            ``(2) Priority of funding.--To best build the foundations 
        for long-term economic development and to complement other 
        Federal, State, and tribal resources in the region, Federal 
        funds available under this chapter shall be focused on the 
        following activities:
                    ``(A) Basic public infrastructure in distressed 
                counties and isolated areas of distress.
                    ``(B) Transportation and telecommunication 
                infrastructure for the purpose of facilitating economic 
                development in the region.
                    ``(C) Business development, with emphasis on 
                entrepreneurship.
                    ``(D) Job training or employment-related education, 
                with emphasis on use of existing public educational 
                institutions located in the region.

``SEC. 3825. SUPPLEMENTS TO FEDERAL GRANT PROGRAMS.

    ``(a) Finding.--Congress finds that certain States and local 
communities of the region may be unable to take maximum advantage of 
Federal grant programs for which the States and communities are 
eligible because--
            ``(1) the States and communities lack the economic 
        resources to provide the required matching share; or
            ``(2) there are insufficient funds available under the 
        applicable Federal law authorizing the Federal grant program to 
        meet pressing needs of the region.
    ``(b) Federal Grant Program Funding.--Notwithstanding any provision 
of law limiting the Federal share, the areas eligible for assistance, 
or the authorizations of appropriations, under any Federal grant 
program, and in accordance with subsection (c), the Authority, with the 
approval of the Federal cochairperson and with respect to a project to 
be carried out in the region--
            ``(1) may increase the Federal share of the costs of a 
        project under any Federal grant program to not more than 90 
        percent (except as provided in section 3827(b)); and
            ``(2) shall use amounts made available to carry out this 
        chapter to pay the increased Federal share.
    ``(c) Certifications.--
            ``(1) In general.--In the case of any project for which all 
        or any portion of the basic Federal share of the costs of the 
        project is proposed to be paid under this section, no Federal 
        contribution shall be made until the Federal official 
        administering the Federal law that authorizes the Federal grant 
        program certifies that the project--
                    ``(A) meets (except as provided in subsection (b)) 
                the applicable requirements of the applicable Federal 
                grant program; and
                    ``(B) could be approved for Federal contribution 
                under the Federal grant program if funds were available 
                under the law for the project.
            ``(2) Certification by authority.--
                    ``(A) In general.--The certifications and 
                determinations required to be made by the Authority for 
                approval of projects under this Act in accordance with 
                section 3830 shall be--
                            ``(i) controlling; and
                            ``(ii) accepted by the Federal agencies.
                    ``(B) Acceptance by federal cochairperson.--In the 
                case of any project described in paragraph (1), any 
                finding, report, certification, or documentation 
                required to be submitted with respect to the project to 
                the head of the department, agency, or instrumentality 
                of the Federal Government responsible for the 
                administration of the Federal grant program under which 
                the project is carried out shall be accepted by the 
                Federal cochairperson.

``SEC. 3826. MULTISTATE AND LOCAL DEVELOPMENT DISTRICTS AND 
              ORGANIZATIONS AND NORTHERN GREAT PLAINS INC.

    ``(a) Definition of Multistate and Local Development District or 
Organization.--In this section, the term `multistate and local 
development district or organization' means an entity--
            ``(1) that--
                    ``(A) is a planning district that is recognized by 
                the Economic Development Administration of the 
                Department of Commerce; or
                    ``(B) is--
                            ``(i) organized and operated in a manner 
                        that ensures broad-based community 
                        participation and an effective opportunity for 
                        other nonprofit groups to contribute to the 
                        development and implementation of programs in 
                        the region;
                            ``(ii) a nonprofit incorporated body 
                        organized or chartered under the law of the 
                        State in which the entity is located;
                            ``(iii) a nonprofit agency or 
                        instrumentality of a State or local government;
                            ``(iv) a public organization established 
                        before the date of enactment of the Agriculture 
                        Reform, Food, and Jobs Act of 2012 under State 
                        law for creation of multijurisdictional, area-
                        wide planning organizations;
                            ``(v) a nonprofit agency or instrumentality 
                        of a State that was established for the purpose 
                        of assisting with multistate cooperation; or
                            ``(vi) a nonprofit association or 
                        combination of bodies, agencies, and 
                        instrumentalities described in clauses (ii) 
                        through (v); and
            ``(2) that has not, as certified by the Authority (in 
        consultation with the Federal cochairperson or Secretary, as 
        appropriate)--
                    ``(A) inappropriately used Federal grant funds from 
                any Federal source; or
                    ``(B) appointed an officer who, during the period 
                in which another entity inappropriately used Federal 
                grant funds from any Federal source, was an officer of 
                the other entity.
    ``(b) Grants to Multistate, Local, or Regional Development 
Districts and Organizations.--
            ``(1) In general.--The Authority may make grants for 
        administrative expenses under this section to multistate, 
        local, and regional development districts and organizations.
            ``(2) Conditions for grants.--
                    ``(A) Maximum amount.--The amount of any grant 
                awarded under paragraph (1) shall not exceed 80 percent 
                of the administrative expenses of the multistate, 
                local, or regional development district or organization 
                receiving the grant.
                    ``(B) Maximum period.--No grant described in 
                paragraph (1) shall be awarded for a period of greater 
                than 3 years.
            ``(3) Local share.--The contributions of a multistate, 
        local, or regional development district or organization for 
        administrative expenses may be in cash or in kind, fairly 
        evaluated, including space, equipment, and services.
    ``(c) Duties.--
            ``(1) In general.--Except as provided in paragraph (2), a 
        local development district shall operate as a lead organization 
        serving multicounty areas in the region at the local level.
            ``(2) Designation.--The Federal cochairperson may designate 
        an Indian tribe or multijurisdictional organization to serve as 
        a lead organization in such cases as the Federal cochairperson 
        or Secretary, as appropriate, determines appropriate.
    ``(d) Northern Great Plains Inc.--Northern Great Plains Inc., a 
nonprofit corporation incorporated in the State of Minnesota to 
implement the recommendations of the Northern Great Plains Rural 
Development Commission established by the Northern Great Plains Rural 
Development Act (7 U.S.C. 2661 note; Public Law 103-318)--
            ``(1) shall serve as an independent, primary resource for 
        the Authority on issues of concern to the region;
            ``(2) shall advise the Authority on development of 
        international trade;
            ``(3) may provide research, education, training, and other 
        support to the Authority; and
            ``(4) may carry out other activities on its own behalf or 
        on behalf of other entities.

``SEC. 3827. DISTRESSED COUNTIES AND AREAS AND NONDISTRESSED COUNTIES.

    ``(a) Designations.--Each year, the Authority, in accordance with 
such criteria as the Authority may establish, shall designate--
            ``(1) as distressed counties, counties in the region that 
        are the most severely and persistently distressed and 
        underdeveloped and have high rates of poverty, unemployment, or 
        outmigration;
            ``(2) as nondistressed counties, counties in the region 
        that are not designated as distressed counties under paragraph 
        (1); and
            ``(3) as isolated areas of distress, areas located in 
        nondistressed counties (as designated under paragraph (2)) that 
        have high rates of poverty, unemployment, or outmigration.
    ``(b) Distressed Counties.--
            ``(1) In general.--The Authority shall allocate at least 50 
        percent of the appropriations made available under section 3834 
        for programs and projects designed to serve the needs of 
        distressed counties and isolated areas of distress in the 
        region.
            ``(2) Funding limitations.--The funding limitations under 
        section 3825(b) shall not apply to a project to provide 
        transportation or telecommunication or basic public services to 
        residents of 1 or more distressed counties or isolated areas of 
        distress in the region.
    ``(c) Transportation, Telecommunication, Renewable Energy, and 
Basic Public Infrastructure.--The Authority shall allocate at least 50 
percent of any funds made available under section 3834 for 
transportation, telecommunication, renewable energy, and basic public 
infrastructure projects authorized under paragraphs (1) and (3) of 
section 3824(a).

``SEC. 3828. DEVELOPMENT PLANNING PROCESS.

    ``(a) State Development Plan.--In accordance with policies 
established by the Authority, each State member shall submit a 
development plan for the area of the region represented by the State 
member.
    ``(b) Content of Plan.--A State development plan submitted under 
subsection (a) shall reflect the goals, objectives, and priorities 
identified in the regional development plan developed under section 
3823(d)(2).
    ``(c) Consultation With Interested Local Parties.--In carrying out 
the development planning process (including the selection of programs 
and projects for assistance), a State may--
            ``(1) consult with--
                    ``(A) multistate, regional, and local development 
                districts and organizations; and
                    ``(B) local units of government; and
            ``(2) take into consideration the goals, objectives, 
        priorities, and recommendations of the entities described in 
        paragraph (1).
    ``(d) Public Participation.--
            ``(1) In general.--The Authority and applicable multistate, 
        regional, and local development districts and organizations 
        shall encourage and assist, to the maximum extent practicable, 
        public participation in the development, revision, and 
        implementation of all plans and programs under this chapter.
            ``(2) Regulations.--The Authority shall develop guidelines 
        for providing public participation described in paragraph (1), 
        including public hearings.

``SEC. 3829. PROGRAM DEVELOPMENT CRITERIA.

    ``(a) In General.--In considering programs and projects to be 
provided assistance under this chapter, and in establishing a priority 
ranking of the requests for assistance provided to the Authority, the 
Authority shall follow procedures that ensure, to the maximum extent 
practicable, consideration of--
            ``(1) the relationship of the project or class of projects 
        to overall multistate or regional development;
            ``(2) the per capita income and poverty and unemployment 
        and outmigration rates in an area;
            ``(3) the financial resources available to the applicants 
        for assistance seeking to carry out the project, with emphasis 
        on ensuring that projects are adequately financed to maximize 
        the probability of successful economic development;
            ``(4) the importance of the project or class of projects in 
        relation to other projects or classes of projects that may be 
        in competition for the same funds;
            ``(5) the prospects that the project for which assistance 
        is sought will improve, on a continuing rather than a temporary 
        basis, the opportunities for employment, the average level of 
        income, or the economic development of the area to be served by 
        the project; and
            ``(6) the extent to which the project design provides for 
        detailed outcome measurements by which grant expenditures and 
        the results of the expenditures may be evaluated.
    ``(b) No Relocation Assistance.--
            ``(1) In general.--Except as provided in paragraph (2), no 
        financial assistance authorized by this chapter shall be used 
        to assist a person or entity in relocating from 1 area to 
        another.
            ``(2) Outside businesses.--Financial assistance under this 
        chapter may be used as otherwise authorized by this title to 
        attract businesses from outside the region to the region.
    ``(c) Maintenance of Effort.--Funds may be provided for a program 
or project in a State under this chapter only if the Authority 
determines that the level of Federal or State financial assistance 
provided under a law other than this chapter, for the same type of 
program or project in the same area of the State within the region, 
will not be reduced as a result of funds made available by this 
chapter.

``SEC. 3830. APPROVAL OF DEVELOPMENT PLANS AND PROJECTS.

    ``(a) In General.--A State or regional development plan or any 
multistate subregional plan that is proposed for development under this 
chapter shall be reviewed by the Authority.
    ``(b) Evaluation by State Member.--An application for a grant or 
any other assistance for a project under this chapter shall be made 
through and evaluated for approval by the State member of the Authority 
representing the applicant.
    ``(c) Certification.--An application for a grant or other 
assistance for a project shall be approved only on certification by the 
State member that the application for the project--
            ``(1) describes ways in which the project complies with any 
        applicable State development plan;
            ``(2) meets applicable criteria under section 3829;
            ``(3) provides adequate assurance that the proposed project 
        will be properly administered, operated, and maintained; and
            ``(4) otherwise meets the requirements of this chapter.
    ``(d) Votes for Decisions.--On certification by a State member of 
the Authority of an application for a grant or other assistance for a 
specific project under this section, an affirmative vote of the 
Authority under section 3822(c) shall be required for approval of the 
application.

``SEC. 3831. CONSENT OF STATES.

    ``Nothing in this chapter requires any State to engage in or accept 
any program under this chapter without the consent of the State.

``SEC. 3832. RECORDS.

    ``(a) Records of the Authority.--
            ``(1) In general.--The Authority shall maintain accurate 
        and complete records of all transactions and activities of the 
        Authority.
            ``(2) Availability.--All records of the Authority shall be 
        available for audit and examination by the Comptroller General 
        of the United States and the Inspector General of the 
        Department of Agriculture (including authorized representatives 
        of the Comptroller General and the Inspector General of the 
        Department of Agriculture).
    ``(b) Records of Recipients of Federal Assistance.--
            ``(1) In general.--A recipient of Federal funds under this 
        chapter shall, as required by the Authority, maintain accurate 
        and complete records of transactions and activities financed 
        with Federal funds and report to the Authority on the 
        transactions and activities to the Authority.
            ``(2) Availability.--All records required under paragraph 
        (1) shall be available for audit by the Comptroller General of 
        the United States, the Inspector General of the Department of 
        Agriculture, and the Authority (including authorized 
        representatives of the Comptroller General, the Inspector 
        General of the Department of Agriculture, and the Authority).
    ``(c) Annual Audit.--The Inspector General of the Department of 
Agriculture shall audit the activities, transactions, and records of 
the Authority on an annual basis.

``SEC. 3833. ANNUAL REPORT.

    ``Not later than 180 days after the end of each fiscal year, the 
Authority shall submit to the President and to Congress a report 
describing the activities carried out under this chapter.

``SEC. 3834. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Authority to carry out this chapter $30,000,000 for each of fiscal 
years 2012 through 2017, to remain available until expended.
    ``(b) Administrative Expenses.--Not more than 5 percent of the 
amount appropriated under subsection (a) for a fiscal year shall be 
used for administrative expenses of the Authority.
    ``(c) Minimum State Share of Grants.--Notwithstanding any other 
provision of this chapter, for any fiscal year, the aggregate amount of 
grants received by a State and all persons or entities in the State 
under this chapter shall be not less than \1/3\ of the product obtained 
by multiplying--
            ``(1) the aggregate amount of grants under this chapter for 
        the fiscal year; and
            ``(2) the ratio that--
                    ``(A) the population of the State (as determined by 
                the Secretary of Commerce based on the most recent 
                decennial census for which data are available); bears 
                to
                    ``(B) the population of the region (as so 
                determined).

``SEC. 3835. TERMINATION OF AUTHORITY.

    ``The authority provided by this chapter terminates effective 
October 1, 2017.

                    ``Subtitle C--General Provisions

``SEC. 3901. 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 of 
        insurance or guarantee is executed; or
            ``(2) participates in or condones.

``SEC. 3902. PURCHASE AND SALE OF GUARANTEED PORTIONS OF LOANS.

    ``(a) In General.--Subject to subsections (b) and (c), the 
Secretary may purchase, on such terms and conditions as the Secretary 
considers appropriate, the guaranteed portion of a loan guaranteed 
under this title, if the Secretary determines that an adequate 
secondary market is not available in the private sector.
    ``(b) Maximum Payment.--The Secretary may not pay for any 
guaranteed portion of a loan under subsection (a) in excess of an 
amount equal to the unpaid principal balance and accrued interest on 
the guaranteed portion of the loan.
    ``(c) Sources of Funding.--The Secretary may use for the 
purchases--
            ``(1) funds from the Rural Development Insurance Fund with 
        respect to rural development loans (as defined in section 
        3704(a)); and
            ``(2) funds from the Agricultural Credit Insurance Fund 
        with respect to all other loans under this title.
    ``(d) Sale of Guaranteed Loans.--
            ``(1) Sales.--
                    ``(A) Regulation.--
                            ``(i) In general.--The guaranteed portion 
                        of any loan made under this title may be sold 
                        by the lender, and by any subsequent holder, in 
                        accordance with such regulations governing the 
                        sales as the Secretary shall establish, subject 
                        to clauses (ii) and (iii).
                            ``(ii) Fees to be paid in full.--All fees 
                        due the Secretary with respect to a guaranteed 
                        loan shall be paid in full before any sale.
                            ``(iii) Loan to be fully disbursed.--The 
                        loan shall be fully disbursed to the borrower 
                        before the sale.
                    ``(B) Post-sale.--After a loan is sold in the 
                secondary market, the lender shall--
                            ``(i) remain obligated under the guarantee 
                        agreement of the lender with the Secretary; and
                            ``(ii) continue to service the loan in 
                        accordance with the terms and conditions of 
                        that agreement.
                    ``(C) Procedures.--The Secretary shall develop such 
                procedures as are necessary for--
                            ``(i) the facilitation, administration, and 
                        promotion of secondary market operations; and
                            ``(ii) determining the increase of access 
                        of farmers to capital at reasonable rates and 
                        terms as a result of secondary market 
                        operations.
                    ``(D) Rights to prepay.--This subsection does not 
                impede or extinguish--
                            ``(i) the right of the borrower or the 
                        successor in interest to the borrower to prepay 
                        (in whole or in part) any loan made under this 
                        title; or
                            ``(ii) the rights of any party under any 
                        provision of this title.
            ``(2) Issue pool certificates.--
                    ``(A) In general.--The Secretary may, directly or 
                through a market maker approved by the Secretary, issue 
                pool certificates representing ownership of part or all 
                of the guaranteed portion of any loan guaranteed by the 
                Secretary under this title.
                    ``(B) Approval.--Certificates under subparagraph 
                (A) shall be based on and backed by a pool established 
                or approved by the Secretary and composed solely of the 
                entire guaranteed portion of the loans.
                    ``(C) Guarantee of pool.--On such terms and 
                conditions as the Secretary considers appropriate, the 
                Secretary may guarantee the timely payment of the 
                principal and interest on pool certificates issued on 
                behalf of the Secretary by approved market makers for 
                purposes of this subsection.
                    ``(D) Limitations.--A guarantee under subparagraph 
                (C) shall be limited to the extent of principal and 
                interest on the guaranteed portions of loans that 
                compose the pool.
                    ``(E) Prepayment.--If a loan in a pool is prepaid, 
                either voluntarily or by reason of default, the 
                guarantee of timely payment of principal and interest 
                on the pool certificates shall be reduced in proportion 
                to the amount of principal and interest that the 
                prepaid loan represents in the pool.
                    ``(F) Interest accrual.--Interest on prepaid or 
                defaulted loans shall accrue and be guaranteed by the 
                Secretary only through the date of payment on the 
                guarantee.
                    ``(G) Redemption.--During the term of the pool 
                certificate, the certificate may be called for 
                redemption due to prepayment or default of all loans 
                constituting the pool.
                    ``(H) Full faith and credit.--The full faith and 
                credit of the United States is pledged to the payment 
                of all amounts that may be required to be paid under 
                any guarantee of the pool certificates issued by 
                approved market makers under this subsection.
                    ``(I) Fees.--
                            ``(i) In general.--The Secretary shall not 
                        collect any fee for any guarantee under this 
                        subsection.
                            ``(ii) Secretarial functions.--Clause (i) 
                        does not preclude the Secretary from collecting 
                        a fee for the functions described in paragraph 
                        (3).
                    ``(J) Default.--Not later than 30 days after a 
                borrower of a guaranteed loan is in default of any 
                principal or interest payment due for 60 days or more, 
                the Secretary shall--
                            ``(i) purchase the pool certificates 
                        representing ownership of the guaranteed 
                        portion of the loan; and
                            ``(ii) pay the registered holder of the 
                        certificates an amount equal to the guaranteed 
                        portion of the loan represented by the 
                        certificate.
                    ``(K) Payment of claims.--If the Secretary pays a 
                claim under a guarantee issued under this subsection, 
                the claim shall be subrogated fully to the rights 
                satisfied by the payment, as may be provided by the 
                Secretary.
                    ``(L) Application of laws.--No State or local law, 
                and no Federal law, shall preclude or limit the 
                exercise by the Secretary of the ownership rights of 
                the Secretary in the portions of loans constituting the 
                pool against which the certificates are issued.
            ``(3) Duties of the secretary.--
                    ``(A) In general.--On the adoption of final rules 
                and regulations, the Secretary shall--
                            ``(i) provide for the central collection of 
                        registration information from all participating 
                        market makers for all loans and pool 
                        certificates sold under paragraphs (1) and (2), 
                        including, with respect to each original sale 
                        and any subsequent sale--
                                    ``(I) identification of the 
                                interest rate paid by the borrower to 
                                the lender;
                                    ``(II) the servicing fee of the 
                                lender;
                                    ``(III) disclosure of whether 
                                interest on the loan is at a fixed or 
                                variable rate;
                                    ``(IV) identification of each 
                                purchaser of a pool certificate;
                                    ``(V) the interest rate paid on the 
                                certificate; and
                                    ``(VI) such other information as 
                                the Secretary considers appropriate.
                            ``(ii) before any sale, require the seller 
                        (as defined in subparagraph (B) to disclose to 
                        each prospective purchaser of the portion of a 
                        loan guaranteed under this title and to each 
                        prospective purchaser of a pool certificate 
                        issued under paragraph (2) information on the 
                        terms, conditions, and yield of such 
                        instrument;
                            ``(iii) provide for adequate custody of any 
                        pooled guaranteed loans;
                            ``(iv) take such actions as are necessary, 
                        in restructuring pools of the guaranteed 
                        portion of loans, to minimize the estimated 
                        costs of paying claims under guarantees issued 
                        under this subsection;
                            ``(v) require each market maker--
                                    ``(I) to service all pools formed, 
                                and participations sold, by the market 
                                maker; and
                                    ``(II) to provide the Secretary 
                                with information relating to the 
                                collection and disbursement of all 
                                periodic payments, prepayments, and 
                                default funds from lenders, to or from 
                                the reserve fund that the Secretary 
                                shall establish to enable the timely 
                                payment guarantee to be self-funding, 
                                and from all beneficial holders; and
                            ``(vi) regulate market makers in pool 
                        certificates sold under this subsection.
                    ``(B) Definition of seller.--For purposes of 
                subparagraph (A)(ii), if the instrument being sold is a 
                loan, the term `seller' does not include--
                            ``(i) the person who made the loan; or
                            ``(ii) any person who sells 3 or fewer 
                        guaranteed loans per year.
            ``(4) Contract for services.--The Secretary may contract 
        for goods and services to be used for the purposes of this 
        subsection without regard to titles 5, 40, and 41, United 
        States Code (including any regulations issued under those 
        titles).

``SEC. 3903. ADMINISTRATION.

    ``(a) Powers of Secretary.--The Secretary may--
            ``(1)(A) administer the powers and duties of the Secretary 
        through such national, area, State, or local offices and 
        employees in the United States as the Secretary determines to 
        be necessary; and
            ``(B) authorize an office to serve an area composed of 2 or 
        more States if the Secretary determines that the volume of 
        business in the area is not sufficient to justify separate 
        State offices;
            ``(2)(A) accept and use voluntary and uncompensated 
        services; and
            ``(B) with the consent of the agency concerned, use the 
        officers, employees, equipment, and information of any agency 
        of the Federal Government, or of any State, territory, or 
        political subdivision;
            ``(3) subject to appropriations, make necessary 
        expenditures for the purchase or hire of passenger vehicles, 
        and such other facilities and services as the Secretary may 
        from time to time find necessary for the proper administration 
        of this title;
            ``(4) subject to subsection (b), compromise, adjust, 
        reduce, or charge-off debts or claims (including debts and 
        claims arising from loan guarantees), and adjust, modify, 
        subordinate, or release the terms of security instruments, 
        leases, contracts, and agreements entered into or administered 
        by the Farm Service Agency, the Rural Utilities Service, the 
        Rural Housing Service, the Rural Business-Cooperative Service, 
        or successor agencies under this title, except for activities 
        conducted under the Housing Act of 1949 (42 U.S.C. 1441 et 
        seq.);
            ``(5) release mortgage and other contract liens if it 
        appears that the mortgage and liens have no present or 
        prospective value or that the enforcement of the mortgage and 
        liens likely would be ineffectual or uneconomical;
            ``(6) obtain fidelity bonds protecting the Federal 
        Government against fraud and dishonesty of officers and 
        employees of the Farm Service Agency, the Rural Utilities 
        Service, the Rural Housing Service, or the Rural Business-
        Cooperative Service in lieu of faithful performance of duties 
        bonds under section 14 of title 6, United States Code, but 
        otherwise in accordance with the section;
            ``(7) consent to--
                    ``(A) long-term leases of facilities financed under 
                this title notwithstanding the failure of the lessee to 
                meet any of the requirements of this title if the long-
                term leases are necessary to ensure the continuation of 
                services for which financing was extended to the 
                lessor; and
                    ``(B) the transfer of property securing any loan or 
                financed by any loan or grant made or guaranteed by the 
                Farm Service Agency, the Rural Utilities Service, the 
                Rural Housing Service, or the Rural Business-
                Cooperative Service under this title, or any other law 
                administered by the Secretary, on such terms as the 
                Secretary considers necessary to carry out the purpose 
                of the loan or grant or to protect the financial 
                interest of the Federal Government, provided that the 
                Secretary shall document the consent of the Secretary 
                for the transfer of the property of a borrower in the 
                file of the borrower; and
            ``(8) notwithstanding that an area ceases, or has ceased, 
        to be rural, in a rural area, or an eligible area, make loans 
        and grants, and approve transfers and assumptions, under this 
        title on the same basis as though the area still was rural in 
        connection with property securing any loan made or guaranteed 
        by the Secretary under this title or in connection with any 
        property held by the Secretary under this title.
    ``(b) Loan Adjustments.--
            ``(1) No liquidation of property.--The Secretary may not 
        require liquidation of property securing any farmer program 
        loan or acceleration of any payment required under any farmer 
        program loan as a prerequisite to initiating an action 
        authorized under subsection (a).
            ``(2) Release of personal liability.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the Secretary may release a borrower 
                or other person obligated on a debt (other than debt 
                incurred under the Housing Act of 1949 (42 U.S.C. 1441 
                et seq.)) from personal liability with or without 
                payment of any consideration at the time of the 
                compromise, adjustment, reduction, or charge-off of any 
                claim.
                    ``(B) Exception.--No compromise, adjustment, 
                reduction, or charge-off of any claim may be made or 
                carried out after the claim has been referred to the 
                Attorney General, unless the Attorney General approves.
            ``(3) Rural electrification security instruments.--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 
        paragraph (2).
    ``(c) Simplified Application Forms for Loan Guarantees.--
            ``(1) In general.--The Secretary shall provide to lenders a 
        short, simplified application form for guarantees under this 
        title of--
                    ``(A) farmer program loans the principal amount of 
                which is $125,000 or less; and
                    ``(B) business and industry guaranteed loans under 
                section 3601(a)(2)(A) the principal amount of which 
                is--
                            ``(i) in the case of a loan guarantee made 
                        during fiscal year 2002 or 2003, $400,000 or 
                        less; and
                            ``(ii) in the case of a loan guarantee made 
                        during any subsequent fiscal year--
                                    ``(I) $400,000 or less; or
                                    ``(II) if the Secretary determines 
                                that there is not a significant 
                                increased risk of a default on the 
                                loan, $600,000 or less.
            ``(2) Water and waste disposal grants and loans.--The 
        Secretary shall develop an application process that 
        accelerates, to the maximum extent practicable, the processing 
        of applications for water and waste disposal grants or direct 
        or guaranteed loans under section 3501(a)(1) the grant award 
        amount or principal loan amount, respectively, of which is 
        $300,000 or less.
            ``(3) Administration.--In developing an application under 
        this subsection, the Secretary shall--
                    ``(A) consult with commercial and cooperative 
                lenders; and
                    ``(B) ensure that--
                            ``(i) the form can be completed manually or 
                        electronically, at the option of the lender;
                            ``(ii) the form minimizes the documentation 
                        required to accompany the form;
                            ``(iii) the cost of completing and 
                        processing the form is minimal; and
                            ``(iv) the form can be completed and 
                        processed in an expeditious manner.
    ``(d) Use of Attorneys for Prosecution or Defense of Claims.--The 
Secretary may use for the prosecution or defense of any claim or 
obligation described in subsection (a)(5) the Attorney General, the 
General Counsel of the Department, or a private attorney who has 
entered into a contract with the Secretary.
    ``(e) Private Collection Agency.--The Secretary may use a private 
collection agency to collect a claim or obligation described in 
subsection (a)(5).
    ``(f) Security Servicing.--
            ``(1) In general.--The Secretary may--
                    ``(A) make advances, without regard to any loan or 
                total indebtedness limitation, to preserve and protect 
                the security for, or the lien or priority of the lien 
                securing any loan or other indebtedness owing to or 
                acquired by the Secretary under this title or under any 
                other program administered by the Farm Service Agency, 
                the Rural Utilities Service, the Rural Housing Service, 
                or the Rural Business-Cooperative Service applicable 
                program, as determined by the Secretary; and
                    ``(B)(i) bid for and purchase at any execution, 
                foreclosure, or other sale or otherwise acquire 
                property on which the United States has a lien by 
                reason of a judgment or execution arising from, or that 
                is pledged, mortgaged, conveyed, attached, or levied on 
                to secure the payment of, the indebtedness regardless 
                of whether the property is subject to other liens;
                    ``(ii) accept title to any property so purchased or 
                acquired; and
                    ``(iii) sell, manage, or otherwise dispose of the 
                property in accordance with this subsection.
            ``(2) Operation or lease of realty.--Except as provided in 
        subsections (c) and (e), real property administered under this 
        title may be operated or leased by the Secretary for such 
        period as the Secretary may consider necessary to protect the 
        investment of the Federal Government in the property.
    ``(g) Payments to Lenders.--
            ``(1) Requirement.--Not later than 90 days after a court of 
        competent jurisdiction confirms a plan of reorganization under 
        chapter 12 of title 11, United States Code, for any borrower to 
        whom a lender has made a loan guaranteed under this title, the 
        Secretary shall pay the lender an amount estimated by the 
        Secretary to be equal to the loss incurred by the lender for 
        purposes of the guarantee.
            ``(2) Payment toward loan guarantee.--Any amount paid to a 
        lender under this subsection with respect to a loan guaranteed 
        under this title shall be treated as payment towards 
        satisfaction of the loan guarantee.

``SEC. 3904. LOAN MORATORIUM AND POLICY ON FORECLOSURES.

    ``(a) In General.--In addition to any other authority that the 
Secretary may have to defer principal and interest and forgo 
foreclosure, the Secretary may permit, at the request of the borrower, 
the deferral of principal and interest on any outstanding loan made or 
guaranteed by the Secretary under this title, or under any other law 
administered by the Farm Service Agency, the Rural Utilities Service, 
the Rural Housing Service, or the Rural Business-Cooperative Service, 
and may forgo foreclosure of the loan, for such period as the Secretary 
considers necessary on a showing by the borrower that, due to 
circumstances beyond the control of the borrower, the borrower is 
temporarily unable to continue making payments of the principal and 
interest when due without unduly impairing the standard of living of 
the borrower.
    ``(b) Interest.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary may permit any loan deferred under this section to 
        bear no interest during or after the deferral period.
            ``(2) Exception.--If the security instrument securing the 
        loan is foreclosed, such interest as is included in the