S 20 IS
107th CONGRESS
1st Session
S. 20
To enhance fair and open competition in the production and sale of
agricultural commodities, and for other purposes.
IN THE SENATE OF THE UNITED STATES
January 22, 2001
Mr. DASCHLE (for himself, Mr. HARKIN, Mr. LEAHY, Mr. JOHNSON, Mr. BAUCUS, Mr.
ROCKEFELLER, Mr. KOHL, Mr. WELLSTONE, Mr. DORGAN, Mr. DURBIN, Mr. CONRAD, Mr.
KERRY, Mrs. CARNAHAN, Mr. DAYTON, Mr. KENNEDY, and Mr. AKAKA) introduced the
following bill; which was read twice and referred to the Committee on
Agriculture, Nutrition, and Forestry
A BILL
To enhance fair and open competition in the production and sale of
agricultural commodities, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Securing a Future for
Independent Agriculture Act of 2001'.
(b) TABLE OF CONTENTS- The table of contents is as follows:
Sec. 1. Short title; table of contents.
TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT FAIRNESS
Subtitle A--Definitions
Subtitle B--Protection from Anticompetitive Practices
Sec. 111. Prohibitions against unfair practices in transactions
involving agricultural commodities.
Sec. 112. Reports of the Secretary on potential unfair practices.
Sec. 113. Report on corporate structure.
Sec. 114. Mandatory funding for staff.
Sec. 115. General Accounting Office study.
Subtitle C--Contract Fairness
Sec. 121. Obligation of good faith.
Sec. 122. Disclosure of risks and readability requirements under
agricultural contracts.
Sec. 123. Right of contract producers to cancel production
contracts.
Sec. 124. Prohibition of confidentiality provisions.
Sec. 125. Production contract liens.
Sec. 126. Production contracts involving investment requirements.
Sec. 127. Producer rights.
Subtitle D--Agricultural Fair Practices
Sec. 131. Agricultural fair practices.
Subtitle E--Implementation
Sec. 141. Relationship to State law.
Sec. 143. Implementation plan.
Sec. 144. Effective date.
TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND
Sec. 201. National Rural Cooperative and Business Equity Fund.
TITLE III--COUNTRY OF ORIGIN LABELING
Sec. 301. Country of origin labeling.
TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION
Sec. 401. Loan rates for marketing assistance loans.
TITLE V--FARMLAND PROTECTION
Sec. 501. Farmland protection program.
TITLE VI--CIVIL RIGHTS
Sec. 601. Sense of Congress on participation of socially disadvantaged
groups in Department of Agriculture programs.
TITLE I--PROTECTION FROM ANTICOMPETITIVE PRACTICES; CONTRACT
FAIRNESS
Subtitle A--Definitions
SEC. 101. DEFINITIONS.
(1) ACTIVE CONTRACTOR- The term `active contractor' means a person
(including a processor) that (in accordance with a production contract)
owns, or will own, an agricultural commodity that is produced by a contract
producer.
(2) AGRICULTURAL COMMODITY- The term `agricultural commodity' has the
meaning given the term in section 102 of the Agricultural Trade Act of 1978
(7 U.S.C. 5602).
(3) AGRICULTURAL CONTRACT- The term `agricultural contract' means a
marketing contract or a production contract.
(4) AGRICULTURAL COOPERATIVE- The term `agricultural cooperative' means
an association of persons engaged in the production, marketing, or
processing of an agricultural commodity that meets the requirements of the
Act entitled `An Act to authorize association of producers of agricultural
products' (commonly known as the `Capper-Volstead Act') (7 U.S.C. 291 et
seq).
(5) BROKER- The term `broker' means any person engaged in the business
of negotiating sales and purchases of any agricultural commodity in
interstate or foreign commerce for or on behalf of the vendor or the
purchaser, except that no person shall be considered a broker if the
person's sales of such agricultural commodities are not in excess of
$1,000,000 per year.
(6) CAPITAL INVESTMENT- The term `capital investment' means an
investment in--
(A) a structure, such as a building or manure storage structure;
or
(B) machinery or equipment associated with producing an agricultural
commodity that has a useful life of more than 1 year.
(7) COMMISSION MERCHANT- The term `commission merchant' means any person
engaged in the business of receiving in interstate or foreign commerce any
agricultural commodity for sale, on commission, or for or on behalf of
another person, except that no person shall be considered a commission
merchant if the person's sales of such agricultural commodities are not in
excess of $1,000,000 per year.
(A) IN GENERAL- The term `contract input' means an agricultural
commodity or an organic or synthetic substance or compound that is used to
produce an agricultural commodity.
(B) INCLUSIONS- The term `contract input' includes livestock, plants,
agricultural seeds, semen or eggs for breeding stock, fertilizers, soil
conditioners, and pesticides.
(9) CONTRACT LIVESTOCK FACILITY- The term `contract livestock facility'
means a facility in which livestock or a product of live livestock is
produced under a production contract by a contract producer.
(10) CONTRACT PRODUCER- The term `contract producer' means a producer
that produces an agricultural commodity under a production contract.
(11) CONTRACTOR- The term `contractor' means a person that is an active
contractor or a passive contractor.
(12) COVERED PERSON- The term `covered person' means a dealer,
processor, commission merchant, and broker.
(13) CROP- The term `crop' means an agricultural commodity produced from
a plant.
(14) DEALER- The term `dealer' means--
(A) any person (except an agricultural cooperative) engaged in the
business of buying, selling, or marketing agricultural commodities in
wholesale or jobbing quantities, as determined by the Secretary, in
interstate or foreign commerce, except that--
(i) no person shall be considered a dealer with respect to sales or
marketing of any agricultural commodity of that person's own production
if the sales or marketing of such agricultural commodities do not exceed
$10,000,000 per year; and
(ii) no person shall be considered a dealer who buys, sells, or
markets less than $1,000,000 per year of such agricultural commodities;
and
(B) an agricultural cooperative that sells or markets agricultural
commodities of its members' own production if the agricultural cooperative
sells or markets more than $1,000,000 of its members' production per year
of such agricultural commodities.
(15) INVESTMENT REQUIREMENT- The term `investment requirement' means a
provision in a production contract that requires a contract producer to make
a capital investment associated with producing an agricultural commodity
subject to the production contract.
(16) LIVESTOCK- The term `livestock' means beef cattle, dairy cattle,
swine, sheep, or poultry.
(17) MARKETING CONTRACT- The term `marketing contract' means a written
agreement between a processor and a producer for the purchase of an
agricultural commodity grown or raised by the producer.
(18) PASSIVE CONTRACTOR- The term `passive contractor' means a person
that--
(A) provides a management service to a contract producer; and
(B) does not own an agricultural commodity that is produced by the
contract producer under a production contract.
(A) IN GENERAL- The term `processor' means--
(i) any person (other than an agricultural cooperative) engaged in
the business of handling, preparing, or manufacturing (including
slaughtering) an agricultural commodity or the products of an
agricultural commodity for sale or marketing in interstate or foreign
commerce for human consumption; and
(ii) an agricultural cooperative that handles, prepares, or
manufactures (including slaughtering) agricultural commodities of its
members' own production.
(B) EXCLUSIONS- The term `processor' does not include--
(i) any person (other than an agricultural cooperative) with respect
to the handling, preparing, or manufacturing (including slaughtering) of
an agricultural commodity that was produced by the person if the gross
revenue derived by the person from the sales or marketing of the
agricultural commodity is less than $10,000,000 per year;
and
(ii) any agricultural cooperative that handles, prepares, or
manufactures (including slaughtering) an agricultural commodity if the
gross revenue derived by the person from the sales or marketing of the
agricultural commodity is less than $1,000,000 per year.
(20) PRODUCE- The term `produce' means--
(A) to provide feed or services relating to the care and feeding of
livestock, including milking dairy cattle and storing raw milk;
and
(B) to provide for planting, raising, harvesting, and storing a crop,
including preparing soil for planting and applying a fertilizer, soil
conditioner, or pesticide to a crop.
(A) IN GENERAL- The term `producer' means a person that produces an
agricultural commodity.
(B) EXCLUSIONS- The term `producer' does not include--
(i) a commercial fertilizer or pesticide applicator;
(22) PRODUCTION CONTRACT-
(A) IN GENERAL- The term `production contract' means a written
agreement that provides for--
(i) the production of an agricultural commodity by a contract
producer; or
(ii) the provision of a management service relating to the
production of an agricultural commodity by a contract
producer.
(B) INCLUSIONS- The term `production contract' includes--
(i) a contract between an active contractor and a contract producer
for the production of an agricultural commodity;
(ii) a contract between an active contractor and a passive
contractor for the provision of a management service to a contract
producer in the production of an agricultural commodity; and
(iii) a contract between a passive contractor and a contract
producer if--
(I) the production contract provides for a management service
furnished by the passive contractor to
the contract producer in the production of an agricultural commodity; and
(II) the passive contractor has a contractual relationship with
the active contractor involving the production of the agricultural
commodity.
(23) SECRETARY- The term `Secretary' means the Secretary of
Agriculture.
Subtitle B--Protection from Anticompetitive Practices
SEC. 111. PROHIBITIONS AGAINST UNFAIR PRACTICES IN TRANSACTIONS INVOLVING
AGRICULTURAL COMMODITIES.
(a) PROHIBITIONS- It shall be unlawful in, or in connection with, any
transaction in interstate or foreign commerce for any covered person or
contractor--
(1) to engage in or use any unfair, unreasonable, unjustly
discriminatory, or deceptive practice or device in the marketing, receiving,
purchasing, sale, or contracting for the production of any agricultural
commodity;
(2) to make or give any undue or unreasonable preference or advantage to
any particular person or locality or subject any particular person or
locality to any undue or unreasonable disadvantage in connection with any
transaction involving any agricultural commodity;
(3) to make any false or misleading statement in connection with any
transaction involving any agricultural commodity that is purchased or
received in interstate or foreign commerce, or involving any production
contract, or to fail, without reasonable cause, to perform any specification
or duty, express or implied, arising out of any undertaking in connection
with any such transaction or production contract;
(4) to retaliate against or disadvantage, or to conspire to retaliate
against or disadvantage, any person because of statements or information
lawfully provided by the person to any person (including to the Secretary or
to a law enforcement agency) regarding alleged improper actions or
violations of law by the covered person or contractor (unless the statements
or information are determined to be libelous or slanderous under applicable
State law) involving any agricultural commodity;
(5) to include as part of any new or renewed agreement or contract a
right of first refusal, or to make any sale or transaction contingent on the
granting of a right of first refusal, involving any agricultural commodity,
before the date that is 180 days after the study required under section 115
is complete; or
(6) to offer different prices contemporaneously for agricultural
commodities of like grade and quality (except agricultural commodities
covered by the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a
et seq.)), unless--
(A) the agricultural commodity is purchased in a public market through
a competitive bidding process or under similar conditions that provide
opportunities for multiple competitors to seek to acquire the agricultural
commodity;
(B) the premium or discount reflects the actual cost of acquiring an
agricultural commodity prior to processing; or
(C) the Secretary has determined that such types of offers do not have
a discriminatory impact against small volume producers of agricultural
commodities.
(1) COMPLAINTS- Whenever the Secretary has reason to believe that any
covered person or contractor has violated subsection (a), the Secretary
shall cause a complaint in writing to be served on the covered person or
contractor, stating the charges in that respect, and requiring the covered
person or contractor to attend and testify at a hearing to be held not
earlier than 30 days after the service of the complaint.
(A) IN GENERAL- The Secretary may hold hearings, sign and issue
subpoenas, administer oaths, examine witnesses, receive evidence, and
require the attendance and testimony of witnesses and the production of
such accounts, records, and memoranda, as the Secretary considers
necessary, for the determination of the existence of any violation of this
section.
(B) RIGHT TO HEARING- A covered person or contractor may request a
hearing if the covered person or contractor is subject to penalty for
unfair conduct under this section.
(C) RESPONDENTS' RIGHTS- During a hearing, the covered person or
contractor shall be given, pursuant to regulations promulgated by the
Secretary, the opportunity--
(i) to be informed of the evidence against the covered person or
contractor;
(ii) to cross-examine witnesses; and
(iii) to present evidence.
(D) HEARING LIMITATION- The issues of any hearing held or requested
under this section shall be limited in scope to matters directly related
to the purpose for which the hearing was held or requested.
(3) REPORT OF FINDING AND PENALTIES-
(A) IN GENERAL- If, after a hearing, the Secretary finds that the
covered person or contractor has violated subsection (a), the Secretary
shall make a report in writing that states the findings of fact and
includes an order requiring the covered person or contractor to cease and
desist from continuing the violation.
(B) CIVIL PENALTY- The Secretary may assess a civil penalty in an
amount not to exceed $100,000 for each violation of subsection
(a).
(4) TEMPORARY INJUNCTION AND FINALITY AND APPEALABILITY OF AN
ORDER-
(A) TEMPORARY INJUNCTION- At any time after a complaint is filed under
paragraph
(1), the court, on application of the Secretary, may issue a temporary
injunction, restraining to the extent the court considers proper, the covered
person or contractor and the officers, directors, agents, and employees of the
covered person or contractor from violating subsection (a).
(B) APPEALABILITY OF AN ORDER- An order issued pursuant to this
subsection shall be final and conclusive unless within 30 days after
service of the order, the covered person or contractor petitions to appeal
the order to the court of appeals for the circuit in which the covered
person or contractor resides or has its principal place of business or the
District of Columbia Circuit Court of Appeals.
(C) DELIVERY OF PETITION-
(i) IN GENERAL- The clerk of the court shall immediately cause a
copy of the petition filed under subparagraph (B) to be delivered to the
Secretary.
(ii) RECORD- On receipt of the petition, the Secretary shall file in
the court the record of the proceedings under this
subsection.
(D) PENALTY FOR FAILURE TO OBEY AN ORDER-
(i) IN GENERAL- Any covered person or contractor that fails to obey
any order of the Secretary issued under this section after the order, or
the order as modified, has been sustained by the court or has otherwise
become final, shall be fined not less than $5,000 and not more than
$100,000 for each offense.
(ii) SEPARATE OFFENSES- Each day during which the failure continues
shall be considered a separate offense.
(A) IN GENERAL- Each covered person or contractor shall maintain for a
period of not less than 5 years accounts, records, and memoranda
(including marketing agreements, forward contracts, and formula pricing
arrangements) that fully and correctly disclose all transactions involved
in the business of the covered person or contractor, including the true
ownership of the business.
(B) FAILURE TO KEEP RECORDS OR ALLOW THE SECRETARY TO INSPECT RECORDS-
Failure to keep, or allow the Secretary to inspect records as required by
this paragraph shall constitute an unfair practice in violation of
subsection (a)(1).
(C) INSPECTION OF RECORDS- The Secretary shall have the right to
inspect such accounts, records, and memoranda (including marketing
agreements, forward contracts, and formula pricing arrangements) of any
covered person or contractor as may be material to the investigation of
any alleged violation of this section or for the purpose of investigating
the business conduct or practices of an organization with respect to the
covered person or contractor.
(c) COMPENSATION FOR INJURY-
(1) ESTABLISHMENT OF THE FAMILY FARMER AND RANCHER CLAIMS
COMMISSION-
(A) IN GENERAL- The Secretary shall appoint 3 individuals to a
commission to be known as the `Family Farmer and Rancher Claims
Commission' (referred to in this subsection as the `Commission') to review
claims of family farmers and ranchers that have suffered financial damages
as a result of any violation of this section as determined by the
Secretary pursuant to subsection (b)(3).
(i) IN GENERAL- Each member of the Commission shall serve 3-year
terms which may be renewed.
(ii) INITIAL MEMBERS- The initial members of the Commission may be
appointed for a period of less than 3 years, as determined by the
Secretary.
(A) SUBMISSION OF CLAIMS- A family farmer or rancher damaged as a
result of a violation of this section, as determined by the Secretary
pursuant to subsection (b)(3), may preserve the right to claim financial
damages under this section by filing a claim pursuant to regulations
promulgated by the Secretary.
(B) DETERMINATION- Based on a review of the claim, the Commission
shall determine the amount of damages to be paid, if any, as a result of
the violation.
(C) REVIEW- The decisions of the Commission under this paragraph shall
not be subject to judicial review except to determine that the amount of
damages to be paid is consistent with the published regulations of the
Secretary that establish the criteria for implementing this
subsection.
(A) IN GENERAL- Funds collected from civil penalties pursuant to this
section shall--
(i) be transferred to a special fund in the Treasury;
(ii) be made available to the Secretary without further Act of
appropriation; and
(iii) remain available until expended to pay the expenses of the
Commission and claims described in this subsection.
(B) AUTHORIZATION OF APPROPRIATION- In addition to the funds described
in subparagraph (A), there are authorized to be appropriated such sums as
may be necessary to carry out this section.
SEC. 112. REPORTS OF THE SECRETARY ON POTENTIAL UNFAIR PRACTICES.
(a) FILING PREMERGER NOTICES WITH THE SECRETARY- No covered person,
operator of a warehouse used to store agricultural commodities, or other
agriculture-related business shall merge or acquire, directly or
indirectly, any voting securities or assets of any other covered person,
operator of a warehouse used to store agricultural commodities, or other
agriculture-related business unless both persons (or in the case of a tender
offer, the acquiring person) file notification pursuant to rules promulgated by
the Secretary, if--
(1) any voting securities or assets of the covered person, operator of a
warehouse used to store agricultural commodities, or other
agriculture-related business with annual net sales or total assets of
$10,000,000 or more are being acquired by a covered person, operator of a
warehouse used to store agricultural commodities, or other
agriculture-related business that has total assets or annual net sales of
$100,000,000 or more; or
(2) any voting securities or assets of a covered person, operator of a
warehouse used to store agricultural commodities, or other
agriculture-related business with annual net sales, or total assets, of
$100,000,000 or more are being acquired by any covered person, operator of a
warehouse used to store agricultural commodities, or agriculture-related
business with annual net sales or total assets of $10,000,000 or more, if,
as a result of the acquisition, the acquiring person would hold an aggregate
total amount of the voting securities and assets of the acquired person in
excess of $50,000,000.
(b) REVIEW BY THE SECRETARY-
(1) IN GENERAL- Except as provided in paragraph (2), the Secretary may
conduct a review of any merger or acquisition described in subsection
(a).
(2) EXCEPTION- The Secretary shall conduct a review of any merger or
acquisition described in subsection (a) on a request from a member of
Congress.
(c) ACCESS TO RECORDS- The Secretary may request any information,
including any testimony, documentary material, or related information, from a
covered person, operator of a warehouse used to store agricultural
commodities, or other agriculture-related business, pertaining to any merger
or acquisition of any covered person, operator of a warehouse used to store
agricultural commodities, or other agriculture-related business.
(1) FINDINGS- In conducting the review under subsection (a), the
Secretary shall make findings concerning whether the merger or acquisition
could--
(A) be significantly detrimental to the present or future viability of
family farms or ranches or rural communities in the areas affected by the
merger or acquisition, pursuant to standards established by the Secretary;
or
(B) lead to a violation of section 111(a).
(2) REMEDIES- The review may include a determination of possible
remedies regarding how the parties of the merger or acquisition may take
steps to modify their operations to address the findings described in
paragraph (1).
(1) PRELIMINARY REPORT- After conducting the review required under
subsection (b), the Secretary shall issue a preliminary report to the
parties of the merger or acquisition and the Attorney General or the Federal
Trade Commission, as appropriate, which shall include findings and a
description of any remedies described in subsection (d)(2).
(2) FINAL REPORT- After affording the parties described in paragraph (1)
an opportunity for a hearing regarding the findings and any proposed
remedies in the preliminary report, the Secretary shall issue a final report
to the President and the Attorney General or the Federal Trade Commission,
as appropriate, with respect to the merger or acquisition.
(f) IMPLEMENTATION OF THE REPORT- Not later than 120 days after the
issuance of a final report described in subsection (e)(2), the parties to the
merger or acquisition affected by the report shall--
(1) make changes to their operations or structure to comply with the
findings and implement any suggested remedy or any agreed-on alternative
remedy; and
(2) file a response demonstrating the compliance or
implementation.
(g) CONFIDENTIALITY OF INFORMATION-
(1) IN GENERAL- Subject to paragraph (2), information used by the
Secretary to conduct the review required under this section provided by a
party to the merger or acquisition under review or by a government agency
shall be treated by the Secretary as confidential information pursuant to
section 1770 of the Food Security Act of 1985 (7 U.S.C. 2276).
(2) PARTY TO HEARING- The Secretary may share any such information with
the Attorney General, the Federal Trade Commission, and a party seeking a
hearing pursuant to subsection (e)(2) with respect to information relating
to the party.
(3) REPORT- Subject to paragraph (1), the report issued under subsection
(e) shall be available to the public.
(A) IN GENERAL- After affording the parties an opportunity for a
hearing, the Secretary may assess a civil penalty in an amount not to
exceed $300,000 for the failure of a person to comply with the
requirements of subsection (a) or (f).
(B) ISSUE- Any such hearing shall be limited to the issue of the
amount of the civil penalty.
(A) IN GENERAL- If after being assessed a civil penalty under
paragraph (1) a person continues to fail to meet the requirements of
subsection (a) or (f), the Secretary may, after affording the parties an
opportunity for a hearing, assess a further civil penalty in an amount not
to exceed $100,000 for each day the person continues the
violation.
(B) ISSUE- Any such hearing shall be limited to the issue of the
additional civil penalty assessed under this paragraph.
SEC. 113. REPORT ON CORPORATE STRUCTURE.
(1) REPORT- A covered person with annual sales in excess of $100,000,000
shall annually file with the Secretary a report that describes, with respect
to both domestic and foreign activities, the strategic alliances, ownership
in other agribusiness firms or agribusiness-related firms, joint ventures,
subsidiaries, brand names, and interlocking boards of directors with other
corporations, representatives, and agents that lobby Congress on behalf of
the covered person, as determined by the Secretary.
(2) CONTRACTS- Paragraph (1) shall not apply to a contract.
(A) IN GENERAL- After affording the parties an opportunity for a
hearing, the Secretary may assess a civil penalty in an amount not to
exceed $100,000 for the failure of a person to comply with this
section.
(B) ISSUE- Any such hearing shall be limited to the issue of the
amount of the civil penalty
(A) IN GENERAL- If after being assessed a civil penalty in accordance
with paragraph (1) a person continues to fail to meet the requirements of
this section, the Secretary may, after affording the parties an
opportunity for a hearing, assess a further civil penalty in an amount not
to exceed $100,000 for each day the person continues the
violation.
(B) ISSUE- Any such hearing shall be limited to the amount of the
additional civil penalty assessed under this paragraph.
SEC. 114. MANDATORY FUNDING FOR STAFF.
(a) IN GENERAL- Out of the funds in the Treasury not otherwise
appropriated, the Secretary of Treasury shall provide to the Secretary of
Agriculture $7,000,000 for each of fiscal years 2002 through 2006, to hire,
train, and provide for additional staff to carry out additional
responsibilities under this subtitle, including a Special Counsel on Fair
Markets and Rural Opportunity, additional attorneys for the Office of General
Counsel, investigators, economists, and support staff.
(b) AVAILABILITY- The sums shall be--
(1) made available to the Secretary without further Act of
appropriation; and
(2) in addition to funds otherwise made available to the Secretary for
the purposes described in subsection (a).
SEC. 115. GENERAL ACCOUNTING OFFICE STUDY.
Not later than 1 year after the date of enactment of this Act, the
Comptroller General of the United States, in consultation with the Attorney
General, the Secretary, the Federal Trade Commission, the National Association
of Attorney's General, and other persons, shall--
(1) study competition in the domestic farm economy with a special focus
on--
(A) protecting family farms and ranches and rural communities;
and
(B) the potential for monopsony and oligopsony nationally and
regionally; and
(2) provide a report to the appropriate committees of Congress
on--
(A) the correlation between increases in the gap between--
(i) retail consumer food prices;
(ii) the prices paid to farmers and ranchers; and
(iii) any increases in concentration among processors,
manufacturers, or other firms that buy from farmers and
ranchers;
(B) the extent to which the use of formula pricing, marketing
agreements, forward contracting, and production contracts tend to give
processors, agribusinesses, and other buyers of agricultural commodities
unreasonable market power over producers or suppliers in local
markets;
(C) whether the granting of process patents relating to biotechnology
research affecting agriculture during the past 20 years has tended to
overly restrict related biotechnology research or has tended to overly
limit competition in the biotechnology industries that affect agriculture
in a manner that is contrary to the public interest, or could do so in the
future;
(D) whether acquisitions of companies that own biotechnology patents
and seed patents by multinational companies have the potential for
reducing competition in the United States and unduly increasing the market
power of the multinational companies;
(E) whether existing processors or agribusinesses have
disproportionate market power and if competition could be increased if the
processors or agribusinesses were required to divest assets to ensure that
they do not exert the disproportionate market power over local
markets;
(F) the extent of increase in concentration in milk processing,
procurement and handling, and the potential risks from that increase in
concentration on--
(i) the economic well-being of dairy farmers;
(ii) the school lunch program; and
(iii) other Federal nutrition programs;
(G) the impact of mergers, acquisitions, and joint ventures among
dairy cooperatives on dairy farmers, including impacts on both members and
nonmembers of the merging cooperatives;
(H) the impact of the significant increase in the use of stock as the
primary means of effectuating mergers and acquisitions by large
companies;
(I) the increase in the number and size of mergers or acquisitions in
the United States and whether some of the mergers or acquisitions would
have taken place if the merger or acquisition had to be consummated
primarily with cash, other assets, or borrowing; and
(J) whether agricultural producers typically appear to derive any
benefits (such as higher prices for their products or any other
advantages) from right-of-first-refusal provisions contained in purchase
contracts or other deals with agribusiness purchasers of the
products.
Subtitle C--Contract Fairness
SEC. 121. OBLIGATION OF GOOD FAITH.
An agricultural contract shall carry an obligation of good faith (as
defined in applicable State law provisions of the Uniform Commercial Code) on
all parties to the agricultural contract with respect to the performance and
enforcement of the agricultural contract.
SEC. 122. DISCLOSURE OF RISKS AND READABILITY REQUIREMENTS UNDER
AGRICULTURAL CONTRACTS.
(a) READABILITY AND UNDERSTANDABILITY-
(1) IN GENERAL- An agricultural contract shall be readable and
understandable, in that the agricultural contract--
(A) shall be printed in legible type;
(B) shall be appropriately divided into captioned sections;
and
(C) shall be written in clear and coherent language using words and
grammar that are understandable by a person of average intelligence,
education, and experience within the agricultural industry.
(2) EFFECT- Paragraph (1) does not preclude the use of--
(A) a particular word, phrase, provision, or form of agreement that is
specifically required, recommended, or endorsed by a Federal or State law
(including a regulation); or
(B) a technical term that is used to describe the service or property
that is the subject of the agricultural contract, if the term is
customarily used by producers in the ordinary course of business in
connection with the service or property described.
(b) DISCLOSURE STATEMENT REQUIREMENT- An agricultural contract shall--
(1) be accompanied by a clear written disclosure statement describing
the material risks faced by the producer if the producer enters into the
agricultural contract; and
(2) disclose (in a manner consistent with subsection (a)), provisions of
the agricultural contract relating to--
(C) renegotiation standards;
(D) responsibility for environmental damage;
(E) factors to be used in determining payment;
(F) responsibility for obtaining and complying with Federal, State,
and local permits;
(G) in the case of a production contract, the right of the producer to
cancel the production contract in accordance with section 123;
and
(H) any other terms that the Secretary determines are appropriate for
disclosure.
(c) COVER SHEET REQUIREMENT- An agricultural contract entered into,
amended, or renewed after the date of enactment of this Act shall contain as
the first page, or first page of text if it is preceded by a title page, a
cover sheet that complies with subsection (a) and contains the following:
(1) A brief statement that the agricultural contract is a legal contract
between the parties to the agricultural contract.
(2) The following statement: `READ YOUR CONTRACT CAREFULLY. This cover
sheet provides only a brief summary of your contract. This cover sheet is
not the contract, and only the terms of the actual contract are legally
binding. The contract itself sets forth, in detail, the rights and
obligations of both you and the contractor or processor. IT IS THEREFORE
IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.'.
(3) A written disclosure of risks in accordance with subsection
(b).
(4) In the case of a production contract, a statement describing, in
plain language, the right of the producer to cancel the production contract
in accordance with section 123.
(5) An index of the major provisions of the agricultural contract and
the pages on which the provisions appear, including--
(A) the name of each party to the agricultural contract;
(B) the definitions section of the agricultural contract;
(C) the provisions governing termination, cancellation, renewal, and
amendment of the agricultural contract by either party;
(D) the duties and obligations of each party; and
(E) provisions subject to change in the agricultural
contract.
(1) SUBMISSION TO SECRETARY- A contractor may submit an agricultural
contract to the Secretary for review to determine whether the agricultural
contract complies with this section.
(2) ACTION BY SECRETARY- The Secretary shall--
(A) in determining whether an agricultural contract or cover sheet is
readable, in accordance with subsection (a), consider--
(i) the simplicity of the sentence structure;
(ii) the extent to which commonly used and understood words are
employed;
(iii) the extent to which esoteric legal terms are
avoided;
(iv) the extent to which references to other sections or provisions
of the agricultural contract are minimized;
(v) the extent to which clear definitions are used; and
(vi) any additional factors relevant to the readability or
understandability of the agricultural contract; and
(B) after reviewing the agricultural contract--
(i) certify that the agricultural contract complies with this
section;
(ii) decline to certify that the agricultural contract complies with
this section and provide specific reasons for declining to certify the
agricultural contract; or
(iii) decline to review the agricultural contract
because--
(I) the compliance of the agricultural contract with this section
is subject to pending litigation; or
(II) the agricultural contract is not subject to this
section.
(3) JUDICIAL REVIEW- An action of the Secretary under this subsection
shall not be subject to judicial review.
(A) IN GENERAL- An agricultural contract certified under this
subsection shall be considered to comply with subsections (a), (b), and
(c).
(B) NO APPROVAL OF LEGALITY OR LEGAL EFFECT- Certification of an
agricultural contract under this subsection shall not constitute an
approval of the legality or legal effect of the agricultural
contract.
(C) EFFECT OF APPROVAL; CONSTRUCTIVE APPROVAL- If the Secretary
certifies an agricultural contract under this subsection--
(i) the agricultural contract shall be considered to be in
compliance with subsections (a), (b), and (c); and
(ii) the remedies provided under subsection (e) shall not be
available.
(D) TIMING- To the maximum extent practicable, the Secretary shall
make a decision on the certification of an agricultural contract not later
than 30 days after receipt of the agricultural contract.
(5) EFFECT OF DISAPPROVAL- If the Secretary disapproves the
certification of an agricultural contract, the agricultural contract shall
be void.
(6) EFFECT OF FAILURE TO SUBMIT AGRICULTURAL CONTRACT- The failure to
submit an agricultural contract to the Secretary for review under this
subsection shall not be considered to be a lack of good faith or to raise a
presumption that the agricultural contract violates this section.
(e) REMEDIES FOR VIOLATIONS- In addition to applicable remedies provided
under State law, a court reviewing an agricultural contract that is not
certified under subsection (d) may change the terms of the agricultural
contract, or limit a provision of the agricultural contract, to avoid an
unfair result if--
(A) a material provision of the agricultural contract violates
subsection (a), (b), or (c);
(B) the violation reasonably caused the producer to be substantially
confused about any of the rights, obligations, or remedies of any party to
the agricultural contract; and
(C) the violation has caused or is likely to cause financial detriment
to the producer; and
(2) the claim is brought before the obligations of any party to the
agricultural contract have been fully performed.
(f) LIMITATIONS ON PRODUCER ACTIONS-
(1) IN GENERAL- A violation of this section--
(A) shall not entitle a producer to withhold performance of an
otherwise valid contractual obligation when bringing a claim for relief
under this section; and
(B) is not a defense to a claim arising from the breach of an
agricultural contract by a producer.
(2) ACTUAL DAMAGES- A producer may recover actual damages caused by a
violation of this section only if the violation reasonably caused the
producer to fail to understand a right, obligation, or remedy under the
agricultural contract.
(g) STATUTE OF LIMITATIONS- A claim that an agricultural contract violates
this section shall be made not later than 6 years after the date on which the
agricultural contract is executed by the producer.
SEC. 123. RIGHT OF CONTRACT PRODUCERS TO CANCEL PRODUCTION CONTRACTS.
(a) IN GENERAL- A contract producer may cancel a production contract by
mailing a cancellation notice to the contractor not later than the later
of--
(1) the date that is 3 business days after the date on which the
production contract is executed; or
(2) any cancellation date specified in the production contract.
(b) DISCLOSURE- A production contract shall clearly disclose--
(1) the right of the contract producer to cancel the production
contract;
(2) the method by which the contract producer may cancel the production
contract; and
(3) the deadline for canceling the production contract.
SEC. 124. PROHIBITION OF CONFIDENTIALITY PROVISIONS.
(a) PROHIBITION- Any provision of an agricultural contract that provides
that information contained in the agricultural contract (other than a trade
secret to which section 552 of title 5, United States Code, applies) is
confidential shall be void.
(b) FORM- A confidentiality provision described in subsection (a) shall be
void regardless of whether the provision is--
(3) required or conditional; or
(4) contained in the agricultural contract, another agricultural
contract, or in a related document, policy, or agreement.
(c) OTHER PROVISIONS- This section shall not affect other provisions of an
agricultural contract or a related document, policy, or agreement that can be
given effect without the voided provision.
(d) DISCLOSURE OF INFORMATION- This subsection does not require a party to
an agricultural contract to disclose information in the agricultural contract
to any other person.
SEC. 125. PRODUCTION CONTRACT LIENS.
(a) DEFINITION OF LIEN STARTING DATE- In this section, the term `lien
starting date' means--
(1) in the case of an annual crop, the date on which the annual crop is
planted;
(2) in the case of a perennial crop, the starting date on which the
perennial crop is subject to a production contract;
(3) in the case of livestock, the date on which the livestock arrive at
the contract livestock facility; and
(4) in the case of milk or any other product of live livestock, the date
on which the milk or other product is produced.
(b) LIENS- In the case of a production contract that provides for
producing an agricultural commodity by a contract producer, the contract
producer shall have a lien in the amount owed to the contract producer under
the production contract on--
(1)(A) the agricultural commodity until the agricultural commodity is
sold or processed (including slaughtered) by the contractor; and
(B) the cash proceeds of the sale of the agricultural commodity,
including any cash provided as part of the sale; and
(2) any property of the contractor that may be subject to a security
interest as provided in applicable State law provisions based on Article 9
of the Uniform Commercial Code.
(c) LIEN PERIOD- A lien for the production of an agricultural commodity
under this section shall apply during the period--
(1) beginning on the lien starting date; and
(2) ending 1 year after the agricultural commodity is no longer under
the control of the contract producer.
(d) CENTRAL FILING SYSTEM- The Secretary shall establish a central filing
system for the purposes of perfecting liens under this section and providing
notice of the liens to the public.
(e) PERFECTING LIENS- To perfect a lien for the production of an
agricultural commodity under this section, a contract producer shall--
(1) not later than 45 days after the lien starting date, file with the
Secretary a lien statement on a form prescribed by the Secretary that
includes--
(A) an estimate of the amount owed under the production
contract;
(B) the lien starting date;
(C) the estimated duration of the period during which the agricultural
commodity will be under the control of the contract producer;
(D) the name of the party to the production contract whose
agricultural commodity is produced under the production contract;
(E) a description of the location of the contract operation, by State,
county, and township; and
(F) the printed name and signature of the person filing the form;
and
(2) pay a filing fee in an amount determined by the Secretary, not to
exceed $10.00.
(f) PRIORITY OF LIEN- A lien created under this section shall be superior
to, and have priority over, any conflicting lien or security interest in the
agricultural commodity, including a lien or security interest that was
perfected prior to the creation of the lien under this section.
(1) CONTROL- Before an agricultural commodity leaves the control of a
contract producer, the contract producer may foreclose a lien created under
this section in the manner provided for the foreclosure of a secured
transaction under applicable State law provisions based on Article 9 of the
Uniform Commercial Code.
(2) POST-CONTROL- After an agricultural commodity leaves the control of
the contract producer, the contract producer may enforce the lien in the
manner provided under applicable State law provisions based on Article 9 of
the Uniform Commercial Code.
(h) ELECTION OF OTHER REMEDIES- In lieu of obtaining a lien under this
section, a contract producer described in subsection (b) may seek to collect
funds due under a production contract in accordance with--
(1) the Packers and Stockyards Act, 1921 (7 U.S.C. 181 et seq.);
or
(2) the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499a et
seq.).
SEC. 126. PRODUCTION CONTRACTS INVOLVING INVESTMENT REQUIREMENTS.
(a) APPLICABILITY- This section applies only to a production contract
between a contract producer and a contractor if the production contract
requires the contract producer, together with any other production contract
between the same parties, to make a capital investment of $100,000 or more.
(b) RESTRICTIONS ON CONTRACT TERMINATION- Except as provided in subsection
(d), a contractor shall not terminate or fail to renew a production contract
until the contractor--
(1) provides the contract producer with written notice of the intention
of the contractor to terminate or not renew the production contract at least
90 days before the effective date of the termination or nonrenewal;
and
(2) reimburses the contract producer for damages (based on the value of
the remaining useful life
of the structures, machinery, equipment, or other capital investment items)
incurred due to the termination, cancellation, or nonrenewal of the production
contract.
(c) BREACH OF INVESTMENT REQUIREMENTS-
(1) IN GENERAL- Except as provided in subsection (d), a contractor shall
not terminate or fail to renew a production contract with a contract
producer that materially breaches a production contract, including the
investment requirements of a production contract, until--
(A) the contractor provides the contract producer with a written
notice of termination or nonrenewal, including a list of complaints
alleging causes for the breach, at least 45 days before the effective date
of the termination or nonrenewal; and
(B) the contract producer fails to remedy each cause of the breach
alleged in the list of complaints provided in the notice not later than 30
days after receipt of the notice.
(2) CIVIL ACTIONS- An effort by a contract producer to remedy a cause of
an alleged breach shall not be considered to be an admission of a breach in
a civil action.
(d) EXCEPTIONS- A contractor may terminate or decline to renew a
production contract in accordance with applicable law without notice or remedy
as required in subsections (b) and (c) if the basis for the termination or
nonrenewal is--
(1) a voluntary abandonment of the contractual relationship by the
contract producer, such as a complete failure of the performance of a
contract producer under the production contract; or
(2) the conviction of a contract producer of an offense of fraud or
theft committed against the contractor.
(e) PENALTY- If a contractor terminates or fails to renew a production
contract other than as provided in this section, the contractor shall pay the
contract producer the value of the remaining useful life of the structures,
machinery, equipment, or other capital investment items.
SEC. 127. PRODUCER RIGHTS.
(a) IN GENERAL- It shall be unlawful, in or in connection with any
transaction in interstate or foreign commerce, for any covered person or
contractor to take an action to coerce, intimidate, disadvantage, retaliate
against, or discriminate against any producer because the producer exercises,
or attempts to exercise, the right of the producer--
(1)(A) to enter into a membership agreement or marketing contract with
an agricultural cooperative, a processor, or another producer; and
(B) to exercise contractual rights under the membership agreement or
marketing contract;
(2) to lawfully provide statements or information to the Secretary, a
Federal or State law enforcement agency, or any other entity or person
regarding improper actions or violations of law by a covered person or
contractor under this subtitle, unless the statements or information are
determined to be libelous or slanderous under applicable State law;
(3) to cancel a production contract in accordance with section
123;
(4) to disclose the terms of an agricultural contract under section
124;
(5) to file, continue, terminate, or enforce a lien under section 125;
and
(6) to enforce other protections provided by this subtitle or other
Federal or State law (including regulations).
(b) WAIVERS- Any provision of an agricultural contract that waives a
producer right described in subsection (a), or an obligation of a covered
person or contractor established by this subtitle, shall be void and
unenforceable.
(c) VIOLATIONS- Section 111(b) shall apply to a violation of this
section.
SEC. 128. MEDIATION.
(1) IN GENERAL- An agricultural contract shall provide for resolution of
disputes concerning the agricultural contract by mediation.
(2) MEDIATION BY SECRETARY OR STATE MEDIATION SERVICE- If there is a
dispute involving an agricultural contract, either party to the agricultural
contract may make a written request to the Secretary for mediation services
by the Secretary or by a designated State mediation service to facilitate
resolution of the dispute.
(3) HEARING- The parties to the agricultural contract shall receive a
release from the mediation services described in paragraph (2) before the
dispute may be heard by a court.
(b) NO ARBITRATION OF FUTURE CONTROVERSY- A provision in an agricultural
contract submitting to arbitration a future controversy arising between a
producer and a covered person or contractor shall be void.
Subtitle D--Agricultural Fair Practices
SEC. 131. AGRICULTURAL FAIR PRACTICES.
The Agricultural Fair Practices Act of 1967 (7 U.S.C. 2301 et seq.) is
amended to read as follows:
`SECTION 1. SHORT TITLE.
`This Act may be cited as the `Agricultural Fair Practices Act of
1967'.
`SEC. 2. FINDINGS AND PURPOSE.
`(a) FINDINGS- Congress finds that--
`(1) agricultural products are produced in the United States by many
individual farmers and ranchers scattered throughout the various States of
the United States;
`(2) agricultural products in fresh or processed form move in large part
in the channels of interstate and foreign commerce, and agricultural
products that do not move in the channels directly burden or affect
interstate commerce;
`(3) the efficient production and marketing of agricultural products by
farmers and ranchers is of vital concern to the welfare of farmers and
ranchers and to the general economy of the United States;
`(4) because agricultural products are produced by numerous individual
farmers and ranchers, the
marketing and bargaining position of individual farmers and ranchers will be
adversely affected unless farmers and ranchers are free to join together
voluntarily in cooperative organizations as authorized by law; and
`(5) interference with the right described in paragraph (4) is contrary
to the public interest and adversely affects the free and orderly flow of
goods in interstate and foreign commerce.
`(b) PURPOSE- The purpose of this Act is to establish standards of fair
practices required of handlers for dealings in agricultural products.
`SEC. 3. DEFINITIONS.
`(1) ACCREDITED ASSOCIATION- The term `accredited association' means an
association of producers accredited by the Secretary in accordance with
section 6.
`(2) ASSOCIATION OF PRODUCERS-
`(A) IN GENERAL- The term `association of producers' means an
association of producers of agricultural products that engages in the
marketing of agricultural products or of agricultural services described
in paragraph (6)(B).
`(B) INCLUSIONS- The term `association of producers'
includes--
`(i) a cooperative association (as defined in section 15(a) of the
Agricultural Marketing Act (12 U.S.C. 1141j(a)); and
`(ii) an association described in the first section of the Act
entitled `An Act to authorize association of producers of agricultural
products' (commonly known as the `Capper-Volstead Act') (7 U.S.C.
291).
`(3) BARGAIN; BARGAINING- The terms `bargain' and `bargaining' refers to
the performance of the mutual obligation of a handler and an accredited
association to meet at reasonable times and for reasonable periods of time
for the purpose of negotiating in good faith with respect to the price,
terms of sale, compensation for products produced or services rendered under
contract, or other provisions relating to the products marketed, or the
services rendered, by the members of the accredited association or by the
accredited association as agent for the members.
`(4) DESIGNATED HANDLER- The term `designated handler' means a handler
that is designated in accordance with section 6.
`(A) IN GENERAL- The term `handler' means any person engaged in the
business or practice of--
`(i) acquiring agricultural products from producers or associations
of producers for processing or sale;
`(ii) grading, packaging, handling, storing, or processing
agricultural products received from producers or associations of
producers;
`(iii) contracting or negotiating contracts or other arrangements,
written or oral, with or on behalf of producers or associations of
producers with respect to the production or marketing of any
agricultural product; or
`(iv) acting as an agent or broker for a handler in the performance
of any function or act described in clause (i), (ii), or
(iii).
`(B) EXCLUSIONS- The term `handler' does not include--
`(i) any person (other than an agricultural cooperative) engaged in
a business or practice described in subparagraph (A) if the gross
revenue derived by the person from the business or activity is less than
$10,000,000 per year; or
`(ii) any agricultural cooperative engaged in a business or practice
described in subparagraph (A) if the gross revenue derived by the person
from the business or activity is less than $1,000,000 per
year.
`(A) IN GENERAL- The term `producer' means a person engaged in the
production of agricultural products as a farmer, planter, rancher,
dairyman, poultryman, or fruit, vegetable, or nut grower.
`(B) INCLUSIONS- The term `producer' includes a person that
contributes labor, production management, facilities, or other services
for the production of an agricultural product.
`(7) PERSON- The term `person' includes an individual, partnership,
corporation, and association.
`(8) SECRETARY- The term `Secretary' means the Secretary of
Agriculture.
`SEC. 4. PROHIBITED PRACTICES.
`It shall be unlawful for any handler knowingly to, or knowingly to permit
any employee or agent to--
`(1) interfere with, restrain, or coerce any producer in the exercise of
the right of the producer to join and belong to, or to refrain from joining
or belonging to, an association of producers, or to refuse to deal with any
producer because of the exercise of the right of the producer to join and
belong to the association;
`(2) discriminate against any producer with respect to price, quantity,
quality, or other terms of purchase, acquisition, or other handling of an
agricultural product because of the membership of the producer in, or the
contract of the producer with, an association of producers;
`(3) coerce or intimidate any producer to enter into, maintain, breach,
cancel, or terminate a membership agreement or marketing contract with an
association of producers or a contract with a handler;
`(4) pay or loan money, give any thing of value, or offer any other
inducement or reward to a producer for refusing to or ceasing to belong to
an association of producers;
`(5) make false reports about the finances, management, or activities of
an association of producers or handlers;
`(6) conspire, combine, agree, or arrange with any other person to do,
or aid or abet the performance of, any act made unlawful by this Act;
`(7) refuse to bargain in good faith with an accredited association, if
the handler is a designated handler; or
`(8) dominate or interfere with the formation or administration of any
association of producers or to contribute financial or other support to an
association of producers.
`SEC. 5. BARGAINING IN GOOD FAITH.
`(a) CLARIFICATION OF OBLIGATION-
`(1) IN GENERAL- The obligation of a designated handler to bargain in
good faith shall apply with respect to an accredited association and the
products or services for which the accredited association is accredited to
bargain.
`(2) AGREEMENTS OR CONCESSIONS- The good faith bargaining required
between a handler and an accredited association shall not require either
party to agree to a proposal or to make a concession.
`(b) EXTENSION OF SAME TERMS TO ACCREDITED ASSOCIATION-
`(1) IN GENERAL- If a designated handler purchases a product or service
from producers under terms more favorable to the producers than the terms
negotiated with an accredited association for the same type of product or
service, the handler shall offer the same terms to the accredited
association.
`(2) VIOLATIONS- Failure to extend the same terms to the accredited
association shall be considered to be a violation of section 4(g).
`(3) FACTORS- In comparing terms, the Secretary shall consider--
`(A) the stipulated purchase price;
`(B) any bonuses, premiums, hauling, or loading allowances;
`(C) reimbursement of expenses;
`(D) payment for special services of any character that may be paid by
the handler; and
`(E) any amounts paid or agreed to be paid by the handler for any
designated purpose other than payment of the purchase price.
`(c) MEDIATION- The Secretary may provide mediation services with respect
to bargaining between an accredited association and a designated handler at
the request of the accredited association or designated handler.
`SEC. 6. ACCREDITATION OF ASSOCIATIONS AND DESIGNATION OF HANDLERS.
`(a) ACCREDITATION PETITION-
`(1) IN GENERAL- An association of producers seeking accreditation to
bargain on behalf of producers of an agricultural product or service shall
submit to the Secretary a petition for accreditation.
`(2) CONTENT- The petition shall--
`(A) specify each agricultural product or service for which the
association seeks accreditation to bargain on behalf of
producers;
`(B) designate the handlers, individually, by production or marketing
area, or by some other appropriate general classification, with whom the
association seeks to be accredited to bargain; and
`(C) contain such other information and documents as may be required
by the Secretary.
`(b) NOTICE OF PETITION; PROCEEDINGS-
`(1) IN GENERAL- On receiving a petition under subsection (a) and any
supporting material, the Secretary shall provide notice of the petition to
all handlers designated in the petition under subsection (a)(2)(B).
`(2) INDIVIDUAL HANDLERS- The Secretary shall provide personal notice
under this subsection to a handler that has been designated
individually.
`(3) GENERAL CLASSIFICATIONS- The Secretary shall provide notice through
the Federal Register to handlers that have been designated by production or
marketing area or by some other general classification.
`(4) OPPORTUNITY TO RESPOND- The association of producers seeking
accreditation and the handlers shall have an opportunity to submit written
evidence, views, and arguments to the Secretary.
`(A) IN GENERAL- Except as provided in subparagraph (B), the Secretary
may conduct an informal proceeding on the petition.
`(B) FORMAL HEARINGS- The Secretary shall hold a formal hearing for
the reception of testimony and evidence if the Secretary finds that there
are substantial unresolved issues of material fact.
`(c) ISSUANCE OF ACCREDITATION ORDER- On the petition of an association of
producers, the Secretary may issue an order designating the association of
producers as an accredited association for the purposes of this Act if the
Secretary determines that--
`(1) under the charter documents or bylaws of the association, the
accredited association is owned and controlled by producers;
`(2) the association has contracts, binding under State law, with the
members of the association empowering the association to sell or negotiate
terms of sale of the products or services of the members;
`(3) the association represents a sufficient number of producers, or the
members of the association produce a sufficient quantity of agricultural
products or render a sufficient level of services, to enable the association
to function as an effective agent for producers in bargaining with
designated handlers;
`(4) the functions of the association include acting as principal or
agent for the members of the association in negotiations with handlers for
prices and other terms of trade with respect to the production, sale, and
marketing of products or services of the members; and
`(5) the association is acting in good faith with respect to the members
of the association and is complying with this Act.
`(d) NOTIFICATION OF ACCREDITATION ORDER-
`(1) IN GENERAL- The Secretary shall notify the petitioning association
of producers, and each handler to be designated as part of the petition, of
the decision of the Secretary regarding the petition and provide a concise
statement of the basis for the decision.
`(2) OTHER ASSOCIATIONS- The Secretary shall provide notice of an
accreditation of an association to all other associations that have been
accredited to bargain with respect to the product or service with any of the
designated handlers of the association.
`(e) ANNUAL REPORT- Each accredited association shall submit to the
Secretary an annual report in such form and including such information as the
Secretary by regulation may require to enable the Secretary to determine
whether the association is meeting the standards for accreditation.
`(f) LOSS OF ACCREDITATION-
`(1) IN GENERAL- If the Secretary determines that an accredited
association has ceased to meet the standards for accreditation under
subsection (c), the Secretary shall--
`(A) notify the association of the manner in which the association is
deficient in maintaining the standards for accreditation; and
`(B) allow the association a reasonable period of time to answer or
correct the deficiencies.
`(2) HEARING- After providing notice and a corrective period in
accordance with paragraph (1), if the Secretary is not satisfied that the
association is in compliance with subsection (c), the Secretary
shall--
`(A) notify the association of the continued deficiencies;
and
`(B) hold a hearing to consider the revocation of
accreditation.
`(3) REVOCATION- If, based on the evidence submitted at the hearing, the
Secretary finds that the association has ceased to maintain the standards
for accreditation, the Secretary shall revoke the accreditation of the
association.
`(1) IN GENERAL- At the option of the Secretary or on the petition of an
accredited association or a designated handler, the Secretary may amend an
accreditation order with respect to the product or service specified in the
accreditation order.
`(2) NOTICE- The Secretary shall provide--
`(A) notice of any proposed amendment and the reasons for the
amendment to all accredited associations and handlers that would be
directly affected by the amendment; and
`(B) an opportunity for a public hearing.
`(3) AUTHORITY- After providing notice and an opportunity for a hearing
in accordance with paragraph (2), the Secretary may amend the accreditation
order if the Secretary finds that the amendment will be conducive to more
effective bargaining and orderly marketing by the accredited association of
the product or services of the members of the accredited association.
`SEC. 7. ASSIGNMENT OF ASSOCIATION DUES AND FEES.
`(a) IN GENERAL- A producer of an agricultural product or service may
execute, as a clause in a sales contract or in another written instrument, an
assignment of dues or fees to, or the deduction of a sum to be retained by, an
association of producers authorized by contract to represent the producer,
under which assignment a handler shall--
`(1) deduct a portion of the amount to be paid for products or services
of the producer under a growing contract; and
`(2) pay, on behalf of the producer, the portion over to the association
as dues or fees or a sum to be retained by the association.
`(b) DUTY OF HANDLER- After a handler receives notice from a producer of
an assignment under subsection (a), the handler shall--
`(1) deduct the amount authorized by the assignment from the amount paid
for any agricultural product sold by the producer or for any service
rendered under any growing contract; and
`(2) on payment to producers for the product or service, pay the amount
over to the association or the assignee of the association.
`SEC. 8. POWERS OF SECRETARY.
`(a) RECORDS AND INFORMATION-
`(1) MAINTENANCE- The Secretary may require any person covered by this
Act to establish and maintain such records, make such reports, and provide
such other information as the Secretary may reasonably require to carry out
this Act.
`(2) ACCESS- The Secretary and any officer or employee of the Department
of Agriculture, on
presentation of credentials and a warrant or such other order of a court--
`(A) shall have a right of entry to, on, or through any premises in
which records required to be maintained under paragraph (1) are located;
and
`(B) may at reasonable times have access to and copy any records that
any person is required to maintain or that relate to any matter under this
Act under investigation or in question.
`(b) COMPLAINTS- If the Secretary has reason to believe (whether through
investigation or petition by any person) that any person has violated this
Act, the Secretary shall cause a complaint to be served on the person--
`(1) stating the reasons for the alleged violation of this Act;
and
`(2) requiring the person to attend and testify at a hearing to be held
not earlier than 30 days after the date of service of the complaint.
`(1) IN GENERAL- The Secretary may hold hearings, sign and issue
subpoenas, administer oaths, examine witnesses, receive evidence, and
require the attendance and testimony of witnesses and the production of such
accounts, records, and memoranda, as the Secretary considers necessary to
determine whether a violation of this Act has occurred.
`(2) RIGHT TO HEARING- A person may request a hearing if the person is
subject to a penalty under this Act.
`(3) RESPONDENTS' RIGHTS- During a hearing, the person complained of
shall be given, in accordance with regulations promulgated by the Secretary,
the opportunity--
`(A) to be informed of the evidence against the person;
`(B) to cross-examine witnesses; and
`(C) to present evidence.
`(4) HEARING LIMITATION- The issues at any hearing held or requested
under this section shall be limited in scope to matters directly related to
the purpose for which the hearing was held or requested.
`(d) REPORT OF FINDING AND PENALTIES-
`(1) IN GENERAL- If, after a hearing, the Secretary finds that a person
has violated this Act, the Secretary shall make, and provide to the person,
a written report that states the findings of fact and includes an order
requiring the person to cease and desist from committing the
violation.
`(2) CIVIL PENALTY- The Secretary may assess a civil penalty not to
exceed $100,000 for each violation of this Act.
`(e) INJUNCTIONS; FINALITY AND APPEALABILITY OF AN ORDER-
`(1) INJUNCTIONS- At any time after a complaint is served on a person
under subsection (b), the court, on application of the Secretary, may issue
an injunction, restraining to the extent the court determines to be
appropriate, the person and the officers, directors, agents, and employees
of the person from violating this Act.
`(2) APPEALABILITY OF AN ORDER- An order issued under this section shall
be final and conclusive unless, within 30 days after service of the order,
the affected handler petitions to appeal the order to the United States
court of appeals for the circuit in which the handler resides or has its
principal place of business or the United States Court of Appeals for the
District of Columbia Circuit.
`(3) DELIVERY OF PETITION-
`(A) IN GENERAL- The clerk of the court shall immediately cause a copy
of any petition filed under paragraph (2) to be delivered to the
Secretary.
`(B) RECORD- On receipt of the petition, the Secretary shall file in
the court the record of the proceedings under this section.
`(4) PENALTY FOR FAILURE TO OBEY AN ORDER-
`(A) IN GENERAL- Any person that fails to obey an order of the
Secretary issued under this section after the order becomes final shall be
fined not less than $5,000 and not more than $100,000 for each
offense.
`(B) SEPARATE OFFENSES- Each day during which the failure continues
shall be considered to be a separate offense.
`SEC. 9. ENFORCEMENT.
`(a) CIVIL ACTIONS BY AGGRIEVED PERSONS-
`(1) PREVENTIVE RELIEF- Whenever any handler has engaged or there are
reasonable grounds to believe that any handler is about to engage in any act
or practice prohibited by this Act, a civil action for preventive relief,
including an application for a permanent or temporary injunction,
restraining order, or other order, may be instituted by the person
aggrieved.
`(2) ATTORNEY'S FEES- In any action commenced under paragraph (1), the
court may allow the prevailing party a reasonable attorney's fee as part of
the costs.
`(3) SECURITY- The court may provide that no restraining order or
preliminary injunction shall issue unless security is provided by the
applicant, in such sum as the court determines to be appropriate, for the
payment of such costs and damages as may be incurred or suffered by any
party that is found to have been wrongfully enjoined or restrained.
`(b) CIVIL ACTIONS BY INJURED PERSONS-
`(1) IN GENERAL- Any person injured in the business or property of the
person by reason of any violation of, or combination or conspiracy to
violate, this Act may--
`(A) sue for the violation in the appropriate United States district
court without respect to the amount in controversy; and
`(B) recover damages sustained.
`(2) ATTORNEY'S FEES- In any action commenced under paragraph (1), the
court may allow the prevailing party a reasonable attorney's fee as part of
the costs.
`(3) LIMITATION ON ACTIONS- Any action to enforce any cause of action
under this subsection shall be barred unless commenced within 2 years after
the cause of action occurred.
`(c) JURISDICTION OF DISTRICT COURTS-
`(1) IN GENERAL- A United States district court shall have jurisdiction
over an action brought under this section.
`(2) LIMITATIONS- No action may be commenced under subsection (a) or
(b)--
`(A) prior to 60 days after the plaintiff has given notice of the
alleged violation to the Secretary through a petition under section 8(b);
or
`(B) if the Secretary has commenced and is diligently prosecuting an
action (administrative or judicial) dealing with the same violation to
require compliance with the Act.
`(d) JUDICIAL REVIEW- An order of the Secretary with respect to which
review could have been obtained under section 8(e)(2) shall not be subject to
judicial review in any proceeding for enforcement under this section.
`SEC. 10. PREEMPTION.
`(a) IN GENERAL- Except as expressly provided in this Act, this Act does
not invalidate the provisions of any State law dealing with the same subject
as this Act.
`(b) STATE COURTS- This Act shall not deprive a State court of
jurisdiction under a State law dealing with the same subject as this Act.'.
Subtitle E--Implementation
SEC. 141. RELATIONSHIP TO STATE LAW.
(a) IN GENERAL- Except as expressly provided in this title, this title
does not invalidate any provision of State law dealing with the same subject
as this title.
(b) STATE COURTS- This title does not deprive a State court of
jurisdiction under a State law dealing with the same subject as this title.
SEC. 142. REGULATIONS.
The Secretary shall promulgate such regulations as are appropriate to
carry out this title and the amendments made by this title.
SEC. 143. IMPLEMENTATION PLAN.
Not later than 180 days after the date of enactment of this Act, the
Secretary and the Attorney General shall develop and implement a plan to
enable the Secretary, where appropriate, to file civil actions, including
temporary injunctions, to enforce orders issued by the Secretary under this
title and the Agricultural Fair Practices Act of 1967 (as amended by section
131).
SEC. 144. EFFECTIVE DATE.
(a) IN GENERAL- Except as provided in subsection (b), this title and the
amendments made by this title take effect on the date of enactment of this
Act.
(b) AGRICULTURAL CONTRACTS-
(1) IN GENERAL- Except as provided in paragraph (2), subtitle C applies
to an agricultural contract in force on or after the date of enactment of
this Act, regardless of the date on which the agricultural contract is
executed.
(2) EXCEPTIONS- Sections 122, 123, 126, 127(a)(5), and 128(a) shall
apply only to an agricultural contract that is executed or substantively
amended after the date of enactment of this Act.
S.L.C.
TITLE II--NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY
FUND
SEC. 201. NATIONAL RURAL COOPERATIVE AND BUSINESS EQUITY FUND.
The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is
amended by adding at the end the following:
`Subtitle F--National Rural Cooperative and Business Equity
Fund
`SEC. 391A. SHORT TITLE.
`This subtitle may be cited as the `National Rural Cooperative and
Business Equity Fund Act'.
`SEC. 391B. PURPOSE.
`The purpose of this subtitle is to revitalize rural communities and
enhance farm income through sustainable rural business development by
providing Federal funds and credit enhancements to a private equity fund in
order to encourage investments by institutional and noninstitutional investors
for the benefit of rural America.
`SEC. 391C. DEFINITIONS.
`(1) AUTHORIZED PRIVATE INVESTOR- The term `authorized private investor'
means an individual, legal entity, or affiliate or subsidiary of an
individual or legal entity that--
`(A) is eligible to receive a loan guarantee under this
title;
`(B) is eligible to receive a loan guarantee under the Rural
Electrification Act of 1936 (7 U.S.C. 901 et seq.);
`(C) is created under the National Consumer Cooperative Bank Act (12
U.S.C. 3011 et seq.);
`(D) is an insured depository institution; or
`(E) is determined by the Fund to be an appropriate investor in the
Fund.
`(2) BOARD- The term `Board' means the board of directors of the Fund
established under section 391G.
`(3) FUND- The term `Fund' means the National Rural Cooperative and
Business Equity Fund established under section 391D.
`(4) GROUP OF SIMILAR INVESTORS- The term `group of similar investors'
means any 1 of the following:
`(A) Insured depository institutions with total assets of more than
$250,000,000.
`(B) Insured depository institutions with total assets equal to or
less than $250,000,000.
`(C) Farm Credit System institutions under the Farm Credit Act of 1971
(12 U.S.C. 2001 et seq.).
`(D) Cooperative financial institutions (other than Farm Credit System
institutions).
`(E) Authorized private investors, other than those described in
subparagraphs (A) through (D).
`(F) Other nonprofit organizations, including credit unions.
`(5) INSURED DEPOSITORY INSTITUTION- The term `insured depository
institution' means any bank or savings association the deposits of which are
insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 et
seq.).
`(6) RURAL AREA- The term `rural area' means an area that is
located--
`(A) outside a standard metropolitan statistical area; or
`(B) within a community that has a population of 50,000 individuals or
fewer.
`(7) RURAL BUSINESS- The term `rural business' means a rural
cooperative, a value-added agricultural enterprise, or any other business
located or locating in a rural area.
`SEC. 391D. ESTABLISHMENT OF THE FUND.
`(1) AUTHORITY TO ESTABLISH- A group of authorized private investors may
establish, as a non-Federal entity under State law, and manage a fund to be
known as the `National Rural Cooperative and Business Equity Fund', to raise
and provide equity capital to rural businesses.
`(2) COMPOSITION OF GROUP- The group of authorized private investors
referred to in paragraph (1) shall be composed, to the maximum extent
practicable, of representatives of a majority of groups of similar
investors.
`(b) PURPOSES- The purposes of the Fund shall be--
`(1) to strengthen the economy of rural areas;
`(2) to further sustainable rural business development;
`(3) to encourage start-up rural businesses, increased opportunities for
small and minority-owned rural businesses, and the formation of new rural
businesses;
`(4) to enhance rural employment opportunities;
`(5) to provide equity capital to rural businesses that have been unable
to obtain equity capital; and
`(6) to leverage non-Federal funds for rural businesses.
`(c) ARTICLES OF INCORPORATION AND BY-LAWS- The articles of incorporation
and by-laws of the Fund shall set forth purposes of the Fund that are
consistent with subsection (b).
`SEC. 391E. INVESTMENT IN THE FUND.
`(a) IN GENERAL- The Secretary, using funds of the Commodity Credit
Corporation, shall--
`(1) subject to subsection (b)(1), make available to the Fund
$50,000,000 for each of fiscal years 2001 through 2003;
`(2) subject to subsection (c), guarantee 50 percent of each investment
made by an authorized private investor in the Fund; and
`(3) subject to subsection (d), guarantee the repayment of principal to
authorized private investors in debentures issued by the Fund.
`(1) MATCHING REQUIREMENT- Under subsection (a)(1), the Secretary shall
make an amount available to the Fund only after an equal amount has been
invested in the Fund by authorized private investors in accordance with this
subtitle and the terms and conditions set forth in the by-laws of the
Fund.
`(2) INVESTMENTS BY INSURED DEPOSITORY INSTITUTIONS- Investments in the
Fund by an insured depository institution shall be considered part of the
record of the insured depository institution for meeting the credit needs of
its entire community for the purposes of Federal law.
`(c) GUARANTEE OF PRIVATE INVESTMENTS-
`(1) IN GENERAL- The Secretary shall guarantee, under terms and
conditions determined by the Secretary, 50 percent of any loss of the
principal of an investment made in the Fund by an authorized private
investor.
`(2) MAXIMUM TOTAL GUARANTEE- The aggregate liability of the Secretary
with respect to all guarantees under paragraph (1) shall not apply to more
than $300,000,000 in private investments.
`(3) REDEMPTION OF GUARANTEE-
`(A) DATE- An authorized private investor in the Fund may redeem a
guarantee under paragraph (1), with respect to the total investments in
the Fund and the total losses of the authorized private investor as of the
date of redemption--
`(i) on the date that is 5 years after the date of incorporation of
the Fund; or
`(ii) annually thereafter.
`(B) EFFECT OF REDEMPTION- On redemption of a guarantee under
subparagraph (A)--
`(i) the shares in the Fund of the authorized private investor shall
be redeemed; and
`(ii) the authorized private investor shall be prohibited from
making any future investment in the Fund.
`(1) IN GENERAL- The Fund may, at the discretion of the Board, raise
additional capital through the issuance of debentures and through other
means determined to be appropriate by the Board.
`(2) GUARANTEE OF DEBT BY SECRETARY-
`(A) IN GENERAL- The Secretary may guarantee 100 percent of the
principal of, and accrued interest on, debentures issued by the Fund that
are approved by the Secretary.
`(B) MAXIMUM DEBT GUARANTEED BY SECRETARY- The outstanding value of
debentures issued by the Fund and guaranteed by the Secretary shall not
exceed the lesser of--
`(i) the amount equal to twice the value of the assets held by the
Fund; or
`(C) RECAPTURE OF GUARANTEE PAYMENTS- If the Secretary makes a payment
on a debenture issued by the Fund as a result of a guarantee of the
Secretary under this paragraph, the Secretary shall have priority over
other creditors for repayment of the debenture.
`(3) AUTHORIZED PRIVATE INVESTORS- An authorized private investor may
purchase debentures and other securities issued by the Fund.
`SEC. 391F. INVESTMENTS AND OTHER ACTIVITIES OF THE FUND.
`(A) TYPES- Subject to subparagraphs (B) and (C), the Fund
may--
`(i) make equity investments in an entity that meets the
requirements of paragraph (6) and such other requirements as the Board
may establish; and
`(ii) extend credit to such an entity in--
`(I) the form of mezzanine debt or subordinated debt;
or
`(II) any other form of quasi-equity.
`(B) LIMITATION ON EQUITY INVESTMENTS- After the initial equity
investment in an entity described in subparagraph (A)(i), the Fund may not
make additional equity investments in the entity if the additional equity
investments would result in the Fund owning more than 30 percent of the
equity of the entity.
`(C) LIMITATION ON NONEQUITY INVESTMENTS- Except in the case of a
project to assist a rural cooperative, the total amount of nonequity
investments described in subparagraph (A)(ii) that may be provided by the
Fund shall not exceed 20 percent of the total investments of the Fund in
the project.
`(2) PROCEDURES- The Fund shall implement procedures to ensure
that--
`(A) the financing arrangements of the Fund meet the Fund's primary
focus of providing equity capital; and
`(B) the Fund does not compete with conventional sources of
credit.
`(3) DIVERSITY OF PROJECTS- The Fund--
`(A) shall seek to make equity investments in a variety of viable
projects, with a significant share of investments--
`(i) in smaller projects in rural communities of diverse sizes;
and
`(ii) in cooperative and noncooperative enterprises; and
`(B) shall be managed in such a way as to diversify the risks to the
Fund among a variety of projects.
`(4) LIMITATION ON RURAL BUSINESSES ASSISTED- The Fund shall not invest
in any rural business that is primarily retail in nature (as determined by
the Board), other than a purchasing cooperative.
`(5) INTEREST RATE LIMITATIONS- Returns on investments in and by the
Fund and returns on the extension of credit by participants in projects
assisted by the Fund, shall not be subject to any State or Federal law
establishing a maximum allowable interest rate.
`(6) REQUIREMENTS FOR RECIPIENTS-
`(A) OTHER INVESTMENTS- Any recipient of amounts from the Fund shall
make or obtain a significant investment from a source of capital other
than the Fund.
`(B) SPONSORSHIP- Rural business investment projects to be considered
for an equity investment from the Fund shall be sponsored by a regional,
State, or local sponsoring or endorsing organization such as--
`(i) a financial institution;
`(ii) a development organization; or
`(iii) any other established entity engaging or assisting in rural
business development, including a rural cooperative.
`(b) TECHNICAL ASSISTANCE- The Board shall use not less than 1 percent of
the net earnings of the Fund to provide technical assistance to rural
businesses seeking an equity investment from the Fund.
`(1) IN GENERAL- The Board shall authorize an annual audit of the
financial statements of the Fund by a nationally recognized auditing firm
using generally accepted auditing procedures.
`(2) AVAILABILITY OF AUDIT RESULTS- The results of the audit required by
paragraph (1) shall be made available to investors in the Fund.
`(d) ANNUAL REPORT- The Board shall prepare and make available to the
public an annual report that--
`(1) describes the projects funded with amounts from the Fund;
`(2) specifies the recipients of amounts from the Fund;
`(3) specifies the co-investors in all projects that receive amounts
from the Fund; and
`(4) meets the reporting requirements, if any, of the State under the
law of which the Fund is established.
`(e) OTHER AUTHORITIES- The Board may exercise such other authorities as
are necessary to carry out this subtitle.
`SEC. 391G. GOVERNANCE OF THE FUND.
`(a) IN GENERAL- The Fund shall be governed by a board of directors that
represents all of the authorized private investors in the Fund and the Federal
Government and that consists of--
`(1) the Secretary or a designee;
`(2) 2 members who are appointed by the Secretary and are not Federal
employees, including--
`(A) 1 member with expertise in venture capital investment;
and
`(B) 1 member with expertise in cooperative development;
`(3) 8 members who are elected by the authorized private investors with
investments in the Fund; and
`(4) 1 member who is appointed by the Board and who is a community
banker from an insured depository institution with total assets equal to or
less than $250,000,000.
`(b) LIMITATION ON VOTING CONTROL- No individual investor or group of
similar investors may control more than 25 percent of the votes on the
Board.'.
TITLE III--COUNTRY OF ORIGIN LABELING
SEC. 301. COUNTRY OF ORIGIN LABELING.
The Agricultural Marketing Act of 1946 (7 U.S.C. 1621 et seq.) is amended
by adding at the end the following:
`Subtitle C--Country of Origin Labeling
`SEC. 271. DEFINITIONS.
`(1) BEEF- The term `beef' means meat produced from cattle (including
veal).
`(2) COVERED COMMODITY- The term `covered commodity' means--
`(A) muscle cuts of beef, lamb, and pork;
`(B) ground beef, ground lamb, and ground pork; and
`(C) a perishable agricultural commodity.
`(3) FOOD SERVICE ESTABLISHMENT- The term `food service establishment'
means a restaurant, cafeteria, lunch room, food stand, saloon, tavern, bar,
lounge, or other similar facility operated as an enterprise engaged in the
business of selling food to the public.
`(4) LAMB- The term `lamb' means meat, other than mutton, produced from
sheep.
`(5) PACKER- The term `packer' has the meaning given the term in section
201 of the Packers and Stockyards Act, 1921 (7 U.S.C. 191).
`(6) PERISHABLE AGRICULTURAL COMMODITY; RETAILER- The terms `perishable
agricultural commodity' and `retailer' have the meanings given the terms in
section 1(b) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C.
499a(b)).
`(7) PORK- The term `pork' means meat produced from hogs.
`(8) SECRETARY- The term `Secretary' means the Secretary of Agriculture,
acting through the Agricultural Marketing Service.
`SEC. 272. NOTICE OF COUNTRY OF ORIGIN.
`(1) REQUIREMENT- Except as provided in subsection (b), a retailer of a
covered commodity shall inform consumers, at the final point of sale of the
covered commodity to consumers, of the country of origin of the covered
commodity.
`(2) UNITED STATES COUNTRY OF ORIGIN- A retailer of a covered commodity
(other than a perishable agricultural commodity) may designate the covered
commodity as having a United States country of origin only if the covered
commodity is exclusively from an animal that is exclusively born, raised,
and slaughtered in the United States.
`(b) EXEMPTION FOR FOOD SERVICE ESTABLISHMENTS- Subsection (a) shall not
apply to a covered commodity if the covered commodity is--
`(1) prepared or served in a food service establishment; and
`(2)(A) offered for sale or sold at the food service establishment in
normal retail quantities; or
`(B) served to consumers at the food service establishment.
`(c) METHOD OF NOTIFICATION-
`(1) IN GENERAL- The information required by subsection (a) may be
provided to consumers by means of a label, stamp, mark, placard, or other
clear and visible sign on the covered commodity or on the package, display,
holding unit, or bin containing the commodity at the final point of sale to
consumers.
`(2) LABELED COMMODITIES- If the covered commodity is already
individually labeled for retail sale regarding country of origin by the
packer, importer, or another person, the retailer shall not be required to
provide any additional information to comply with this section.
`(d) AUDIT VERIFICATION SYSTEM- The Secretary may require by regulation
that any person that prepares, stores, handles, or distributes a covered
commodity for retail sale maintain a verifiable recordkeeping audit trail that
will permit the Secretary to ensure compliance with the regulations
promulgated under section 274.
`(e) INFORMATION- A packer and any other person engaged in the business of
supplying a covered commodity to a retailer shall provide information to the
retailer indicating the country of origin of the covered commodity.
`SEC. 273. ENFORCEMENT.
`Section 253 shall apply to a violation of this subtitle.
`SEC. 274. REGULATIONS.
`(a) IN GENERAL- The Secretary shall promulgate such regulations as are
necessary to carry out this subtitle.
`(b) PARTNERSHIPS WITH STATES- In promulgating the regulations, the
Secretary shall, to the maximum extent practicable, enter into partnerships
with States with enforcement infrastructure to carry out this subtitle.
`SEC. 275. APPLICATION.
`This subtitle shall apply to the retail sale of a covered commodity
beginning on the date that is 180 days after the date of the enactment of this
subtitle.'.
TITLE IV--MARKETING ASSISTANCE LOAN RATE EQUALIZATION
SEC. 401. LOAN RATES FOR MARKETING ASSISTANCE LOANS.
Section 132 of the Agricultural Market Transition Act (7 U.S.C. 7232) is
amended to read as follows:
`SEC. 132. LOAN RATES FOR MARKETING ASSISTANCE LOANS.
`(a) WHEAT- The loan rate for a marketing assistance loan under section
131 for wheat shall be based on 80 percent of the average full economic cost
of production per bushel (based on yield per planted acre), as determined by
the Secretary, for the immediately preceding 3 crops of wheat.
`(1) CORN- The loan rate for a marketing assistance loan under section
131 for corn shall be based on 80 percent of the average full economic cost
of production per bushel (based on yield per planted acre), as determined by
the Secretary, for the immediately preceding 3 crops of corn.
`(A) IN GENERAL- Subject to subparagraph (B), the loan rate for a
marketing assistance loan under section 131 for grain sorghum, barley, and
oats, individually, shall be established at such level as the Secretary
determines is fair and reasonable in relation to the rate that loans are
made available for corn, taking into consideration the feeding value of
the commodity in relation to corn.
`(B) BASIS- The loan rate for a marketing assistance loan under
section 131 for grain sorghum, barley, and oats, individually, shall be
based on 80 percent of the average full economic cost of production per
bushel (based on yield per planted acre), as determined by the Secretary,
for the immediately preceding 3 crops of grain sorghum, barley, and oats,
respectively.
`(c) UPLAND COTTON- The loan rate for a marketing assistance loan under
section 131 for upland cotton shall be based on 80 percent of the average full
economic cost of production per bushel (based on yield per planted acre), as
determined by the Secretary, for the immediately preceding 3 crops of upland
cotton.
`(d) EXTRA LONG STAPLE COTTON- The loan rate for a marketing assistance
loan under section 131 for extra long staple cotton shall be based on 80
percent of the average full economic cost of production per bushel (based on
yield per planted acre), as determined by the Secretary, for the immediately
preceding 3 crops of extra long staple cotton.
`(e) RICE- The loan rate for a marketing assistance loan under section 131
for rice shall be based on 80 percent of the average full economic cost of
production per bushel (based on yield per planted acre), as determined by the
Secretary, for the immediately preceding 3 crops of rice.
`(1) SOYBEANS- The loan rate for a marketing assistance loan under
section 131 for soybeans shall be based on 80 percent of the average full
economic cost of production per bushel (based on yield per planted acre), as
determined by the Secretary, for the immediately preceding 3 crops of
soybeans.
`(2) SUNFLOWER SEED, CANOLA, RAPESEED, SAFFLOWER, MUSTARD SEED, AND
FLAXSEED- The loan rate for a marketing assistance loan under section 131
for sunflower seed, canola, rapeseed, safflower, mustard seed, and flaxseed,
individually, shall be based on 80 percent of the average full economic cost
of production per bushel (based on yield per planted acre), as determined by
the Secretary, for the immediately preceding 3 crops of sunflower seed,
canola, rapeseed, safflower, mustard seed, and flaxseed, respectively.
`(3) OTHER OILSEEDS- The loan rates for a marketing assistance loan
under section 131 for other oilseeds shall be established at such level as
the Secretary determines is fair and reasonable in relation to the loan rate
available for soybeans, except in no event shall the rate for the oilseeds
(other than cottonseed) be less than the rate established for soybeans on a
per-pound basis for the same crop.'.
SEC. 402. TERM OF LOANS.
Section 133 of the Agriculture Market Transition Act (7 U.S.C. 7233) is
amended to read as follows:
`SEC. 133. TERM OF LOANS.
`(a) TERM OF LOAN- In the case of each loan commodity, a marketing
assistance loan under section 131 shall have a term of 20 months beginning on
the first day of the first month after the month in which the loan is made.
`(b) EXTENSIONS AUTHORIZED- The Secretary may extend the term of a
marketing assistance loan for any loan commodity.'.
SEC. 403. APPLICATION.
This title and the amendments made by this title shall apply to each of
the 2001 and 2002 crops of a loan commodity (as defined in section 102 of the
Agricultural Market Transition Act (7 U.S.C. 7202).
TITLE V--FARMLAND PROTECTION
SEC. 501. FARMLAND PROTECTION PROGRAM.
Section 388 of the Federal Agriculture Improvement and Reform Act of 1996
(16 U.S.C. 3830 note; Public Law 104-127) is amended to read as follows:
`SEC. 388. FARMLAND PROTECTION PROGRAM.
`(a) DEFINITION OF ELIGIBLE ENTITY- In this section, the term `eligible
entity' means--
`(1) any agency of any State or local government, or federally
recognized Indian tribe; and
`(2) any organization that--
`(A) is organized for, and at all times since its formation has been
operated principally for, 1 or more of the conservation purposes specified
in clause (i), (ii), or (iii) of section 170(h)(4)(A) of the Internal
Revenue Code of 1986;
`(B) is an organization described in section 501(c)(3) of the Code
that is exempt from taxation under section 501(a) of the Code;
and
`(C)(i) is described in section 509(a)(2) of the Code of; or
`(ii) is described in section 509(a)(3) of the Code and is controlled
by an organization described in section 509(a)(2) of the Code.
`(b) AUTHORITY- The Secretary of Agriculture shall establish and carry out
a farmland protection program under which the Secretary shall provide grants
to eligible entities, to provide the Federal share of the cost of purchasing
conservation easements or other interests in land with prime, unique, or other
productive soil for the purpose of protecting topsoil by limiting
nonagricultural uses of the land.
`(c) FEDERAL SHARE- The Federal share of the cost of purchasing a
conservation easement or other interest described in subsection (b) shall be
not more than 50 percent.
`(d) TITLE; ENFORCEMENT- Title to a conservation easement or other
interest described in subsection (b) may be held, and the conservation
requirements of the easement or interest enforced, by any eligible entity.
`(e) STATE CERTIFICATION- The attorney general of the State in which land
is located shall take such actions as are necessary to ensure that a
conservation easement or other interest under this section is in a form that
is sufficient to achieve the conservation purpose of the farmland protection
program established under this section, the law of the State, and the terms
and conditions of any grant made by the Secretary under this section.
`(f) CONSERVATION PLAN- Any land for which a conservation easement or
other interest is purchased under this section shall be subject to the
requirements of a conservation plan to the extent that the plan does not
negate or adversely affect the restrictions contained in any easement.
`(g) TECHNICAL ASSISTANCE- The Secretary may use not more than 10 percent
of the amount that is made available for a fiscal year under subsection (h) to
provide technical assistance to carry out this section.
`(h) FUNDING- For each fiscal year, the Secretary shall use not more than
$250,000,000 of the funds of the Commodity Credit Corporation to carry out
this section.'.
TITLE VI--CIVIL RIGHTS
SEC. 601. SENSE OF CONGRESS ON PARTICIPATION OF SOCIALLY DISADVANTAGED
GROUPS IN DEPARTMENT OF AGRICULTURE PROGRAMS.
It is the sense of Congress that the Secretary of Agriculture should take
such actions as are necessary to ensure, to the maximum extent practicable,
that members of socially disadvantaged groups (as defined in section 355(e) of
the Consolidated Farm and Rural Development Act (7 U.S.C. 2003(e))--
(1) are informed of the eligibility requirements to participate in
programs of the Department of Agriculture; and
(2) receive technical support and assistance from the Department to
participate in the programs.
END