S 1727 IS

To reward the stewards of America's farms, ranches, public and private lands, wildlife, water quality and supply, to reduce the risk of specialty crop production, and for other purposes.

November 16, 2001

Mr. REID (for himself, Mr. LEAHY, Mr. CHAFEE, Mr. JEFFORDS, Mr. KENNEDY, Mr. REED, Mr. LIEBERMAN, Mr. SARBANES, Mr. SCHUMER, Mr. TORRICELLI, Mr. CORZINE, and Mr. DODD) introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry

To reward the stewards of America's farms, ranches, public and private lands, wildlife, water quality and supply, to reduce the risk of specialty crop production, 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 `Conservation Assistance and Regional Equity Act'.

(b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--SPECIALTY CROP RISK REDUCTION

Sec. 101. Specialty crop cost-of-production insurance.

TITLE II--FARM AND RANCH PRESERVATION

Sec. 201. Farmland protection program.

Sec. 202. Socially disadvantaged farmers.

TITLE III--ENVIRONMENTAL STEWARDSHIP ON WORKING LANDS

Sec. 211. Environmental quality incentives program.

Sec. 212. Definitions.

Sec. 213. Establishment and administration.

Sec. 214. Evaluation of offers and payments.

Sec. 215. Limitation on payments.

Sec. 216. Reauthorization of funding.

Sec. 217. Funding.

Sec. 218. Allocation for livestock and other conservation priorities.

Sec. 219. State reserve.

TITLE IV--PRESERVATION OF WILDLIFE HABITAT

Sec. 221. Wildlife habitat incentives program.

Sec. 222. Wetlands reserve program.

Sec. 223. Conservation reserve program.

Sec. 224. Conservation of grazing lands.

Sec. 225. Grassland reserve and enhancement program.

Sec. 226. Water Conservation Program.

TITLE V--ORGANIC FARMING

Sec. 231. Organic agriculture research trust fund.

Sec. 232. Establishment of national organic research endowment institute.

TITLE VI--TECHNICAL ASSISTANCE

Sec. 241. Reimbursement for program administration.

Sec. 242. Conservation technical assistance by third parties.

Sec. 243. Conservation practice standards.

TITLE VII--FARMLAND STEWARDSHIP ENHANCEMENT PROGRAM

Sec. 251. Farmland stewardship enhancement program.

Sec. 252. Farmland stewardship enhancement plan.

Sec. 253. Funding requirements.

TITLE VIII--MISCELLANEOUS CONSERVATION PROVISIONS

Sec. 261. Conservation program performance review and evaluation.

TITLE IX--REGIONAL EQUITY

Sec. 271. Allocation of conservation funds by State.

TITLE X--CONSERVATION SECURITY PROGRAM

Sec. 281. Conservation security program.

TITLE XI--RURAL COMMUNITY ECONOMIC ENHANCEMENT

Sec. 291. Expansion of State marketing programs.

TITLE I--SPECIALTY CROP RISK REDUCTION

SEC. 101. SPECIALTY CROP COST-OF-PRODUCTION INSURANCE.

Out of the funds in Treasury not otherwise appropriated, the Secretary of the Treasury shall pay to the Secretary of Agriculture $750,000,000 per year for the purpose of additional premium subsidies for the purchase of a cost of production policy for specialty crops. The existing contract for research and development regarding cost of production policy under the Agricultural Risk Protection Act 2000, section 522 (c)(9) will be modified to include all specialty crops, to the extent practicable, by January 1, 2003.

TITLE II--FARM AND RANCH PRESERVATION

SEC. 201. FARMLAND PROTECTION PROGRAM.

Section 388 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3830 note) is amended to read as follows:

`SEC. 388. FARMLAND PROTECTION PROGRAM.

`(a) ESTABLISHMENT AND PURPOSE- The Secretary of Agriculture (in this section referred to as the `Secretary') shall carry out a farmland protection program for the purpose of protecting farm and ranch lands by limiting nonagricultural uses of such lands. Under the program, the Secretary shall provide matching grants to eligible entities to facilitate their purchase of conservation easements over such lands from willing sellers.

`(b) DEFINITIONS- In this section, the following terms shall have the following meanings:

`(1) `Farm and ranch lands' shall include lands devoted to agricultural use with:

`(A) prime, unique or other productive soils; or

`(B) historic or archaeological resources officially designated as such by a State or local government agency or professional society devoted to protecting such resources.

`(2) `Eligible entity' shall include any of the following:

`(A) An agency of a State or local government.

`(B) A federally recognized Indian tribe.

`(C) Any organization that is organized for, and at all times since its formation has been operating principally for, one or more conservation purposes specified in clause (i), (ii) or (iii) of section 170(h)(4)(A) of the Internal Revenue Code of 1986 and--

`(i) is described in section 501(c)(3) of the Code;

`(ii) is exempt from taxation under section 501(a) of the Code; and

`(iii) is described in paragraph (2) of section 509(a) of the Code, or paragraph (3) of such section, but is controlled by an organization described in paragraph (2) of such section.

`(c) CONSERVATION PLAN- Land enrolled in the program shall be subject to a conservation plan developed in accordance with the National Handbook of Conservation Practices and the field office technical guides of the Natural Resources Conservation Service.

`(d) MAXIMUM FEDERAL SHARE- The Federal share of the cost of purchasing a conservation easement under subsection (a)(1) shall not exceed 50 percent of the total cost of purchasing the easement.

`(e) NON-FEDERAL SHARE- The non-Federal share for any project may include donations of documented value, including donations of conservation easements in the project area, if such donations materially advance the goals of the project.

`(f) TITLE ENFORCEMENT- An eligible entity may hold title to a conservation easement purchased using

grant funds provided under subsection (a)(1) and enforce the conservation requirements of the easement.

`(g) STATE CERTIFICATION- As a condition of the receipt by an eligible entity of a grant under subsection (a)(1), the attorney general of the State in which the conservation easement is to be purchased using the grant funds shall certify that the conservation easement to be purchased is in a form that is sufficient, under the laws of the State, to achieve the purposes of the farmland protection program and the terms and conditions of the grant.

`(h) FUNDING-

`(1) USE OF COMMODITY CREDIT CORPORATION FUNDS- The Secretary shall use not more than: $150,000,000 in fiscal year 2002; $250,000,000 in fiscal year 2003; $400,000,000 in fiscal year 2004; $450,000,000 in fiscal year 2005; and $500,000,000 in fiscal year 2006 of the funds of the Commodity Credit Corporation to carry out this section.

`(2) LIMITATION ON TECHNICAL ASSISTANCE- To provide technical assistance to carry out this section, the Secretary may use not more than 10 percent of the amount made available for any fiscal year under paragraph (1).

`(i) GRANTS AND ASSISTANCE TO ENHANCE FARM VIABILITY- For each year for which funds are available for the program under this section, the Secretary may use not more than $10,000,000 to provide matching market development grants and technical assistance to farm and ranch operators who participate in the program. As a condition of receiving such a grant, the grantee shall provide an amount equal to the grant from non-Federal sources.'.

SEC. 202. SOCIALLY DISADVANTAGED FARMERS.

Section 2501(a)(3) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2279(a)(3)) is amended--

(1) by striking `$10,000,000' and inserting `$15,000,000 from the Commodity Credit Corporation' ; and

(2) by adding at the end the following: `Any agency of the Department of Agriculture may participate jointly in any grant or contract entered in furtherance of the objectives of this section if it agreed that the objectives of the grant or contract will further the authorized programs of the contributing agency.'.

TITLE III--ENVIRONMENTAL STEWARDSHIP ON WORKING LANDS

SEC. 211. ENVIRONMENTAL QUALITY INCENTIVES PROGRAM.

Section 1240 of the Food Security Act of 1985 (16 U.S.C. 3839aa) is amended--

(1) by striking `to' and all that follows through `provides' and inserting `to provide';

(2) inserting `air' after `that face the most serious threats to';

(3) by redesignating the subparagraphs (A) through (D) that follow the matter amended by 266 paragraph (2) of this section as paragraphs (1) through (4), respectively; and

(4) by striking `farmers and ranchers' each place it appears and inserting `producers'.

SEC. 212. DEFINITIONS.

Section 1240A of the Food Security Act of 1985 (16 U.S.C. 3839aaB1) is amended--

(1) in paragraph (1)--

(A) by inserting `nonindustrial private forest land,' before `and other land'; and

(B) by striking all after `poses a serious threat to' and inserting `air, soil, water, or related resources.'; and

(2) in paragraph (4), by inserting `, including non-industrial private forestry' before the period.

SEC. 213. ESTABLISHMENT AND ADMINISTRATION.

(a) REAUTHORIZATION- Section 1240B(a)(1) of the Food Security Act of 1985 (16 U.S.C. 3839aaB2(a)(1)) is amended by striking `2002' and inserting `2006'.

(b) INCENTIVE PAYMENTS- Section 1240B of such Act (16 U.S.C. 3839aaB2) is amended by adding at the end the following:

`(1) IN GENERAL- The Secretary shall expand the Environmental Quality Incentives Program (EQIP) to allow pilot programs to improve water quality in individual watersheds nationwide. Except as otherwise provided in this subsection, these pilot programs shall be administered in accordance with the terms of the Environmental Quality Incentives Program. These will include:

`(A) DRINKING WATER SUPPLIERS PILOT PROGRAM-

`(i) IN GENERAL- The Secretary shall establish a pilot program in 15 watersheds, as defined by the U.S. Geological Survey, to improve water quality in cooperation with local water utilities.

`(ii) PILOT PROGRAM- The Secretary shall select the watersheds and make available funds to be allocated to producers in partnership with drinking water utilities in the watersheds, provided that drinking water utilities measure water quality and target incentives payments to improve water quality.

`(B) NUTRIENT REDUCTION PILOT PROGRAM- The Secretary shall use up to $100,000,000 annually of the funds provided under this subsection in 5 impaired watersheds each year to provide incentives for agricultural producers to reduce nitrogen and phosphorous applications by at least 15 percent below the average rates used by comparable farms in the State. Incentive payments shall reflect the extent to which producers reduce nitrogen and phosphorous applications.

`(2) CONSISTENCY WITH WATERSHED PLAN- In allocating funds to EQIP water quality pilot programs, the Secretary shall consider the extent to which an application for the funds is consistent with

a locally developed watershed plan, in addition to the other factors established by section 1240C.

`(3) CONTRACTS- The Secretary shall enter into contracts in accordance with this section with producers whose activities affect water quality, including the quality of public drinking water supplies, to implement and maintain nutrient management, pest management, soil erosion practices, and other conservation activities that protect water quality and protect human health. The contracts shall--

`(A) describe the nutrient management, pest management or soil loss practices to be implemented, maintained, or improved;

`(B) contain a schedule of implementation;

`(C) address water quality priorities of the watershed in which the operation is located to the greatest extent possible; and

`(D) contain such other terms as the Secretary determines to be appropriate.

`(4) VOLUNTARY WATER QUALITY BENEFITS EVALUATION- On approval of the producer, the Secretary may include the cost of water quality benefits evaluation as part of a contract.

`(5) RECOGNITION OF STATE EFFORTS- The Secretary shall recognize the financial contribution of States, among other factors, during the allocation of funding under this subsection.'.

(c) NON-FEDERAL ASSISTANCE- Section 1240B(g) of such Act (16 U.S.C. 3839aaB2(g)) is amended by inserting `drinking water utility' after `forestry agency'.

SEC. 214. EVALUATION OF OFFERS AND PAYMENTS.

Section 1240C of the Food Security Act of 1985 (16 U.S.C. 3839aaB3) is amended to read as follows:

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

`The Secretary shall establish a ranking process and benefits index to prioritize technical assistance, cost-share payments, and incentives payments to producers to maximize soil and water quality and wildlife habitat and other environmental benefits per dollar expended. The ranking process shall be weighted to ensure that technical assistance, cost-share payments, and incentives are provided to small or socially-disadvantaged farmers (as defined in section 8(a)(5) of the Small Business Act) and to give priority to producers who have previously implemented stewardship practices at their own expense. The Secretary shall consult with local, State, and Federal public and private entities to develop the ranking process and benefits index.'.

SEC. 215. LIMITATION ON PAYMENTS.

Section 1240G of the Food Security Act of 1985 (16 U.S.C. 3839aaB7) is amended--

(1) in subsection (a)--

(A) in paragraph (1), by striking `$10,000' and inserting `$30,000'; and

(B) in paragraph (2), by striking `$50,000' and inserting `$150,000';

(2) in subsection (b)--

(A) by striking `and' at the end of paragraph (1);

(B) by striking the period at the end of paragraph (2) and inserting `; and'; and

(C) by adding at the end the following:

`(3) to share the cost of digesters.'; and

(3) by striking subsection (c).

SEC. 216. REAUTHORIZATION OF FUNDING.

Section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended by striking `2002' and inserting `2006'.

SEC. 217. FUNDING.

Section 1241(b)(1) of the Food Security Act of 1985 (16 U.S.C. 3841(b)(1)) is amended--

(1) by striking `$130,000,000' and all that follows through `2002' and inserting `$250,000,000 for fiscal year 2002, $400,000,000 for fiscal year 2003, $700,000,000 for fiscal year 2004, $850,000,000 for fiscal year 2005, and $970,000,000 for fiscal year 2006';

(2) by inserting `(other than under section 1240B(h))' before the period; and

(3) by adding at the end the following: `In addition, the Commodity Credit Corporation shall make available to the Secretary, under section 1240B(h): $150,000,000 for fiscal year 2002; $250,000,000 for fiscal year 2003; $450,000,000 for fiscal year 2004; $550,000,000 for fiscal year 2005, and $630,000,000 for 2006 for this section in order to provide incentive payments to producers who implement watershed quality incentive contracts.'.

SEC. 218. ALLOCATION FOR LIVESTOCK AND OTHER CONSERVATION PRIORITIES.

(a) IN GENERAL- Section 1241(b)(2) of the Food Security Act of 1985 (16 U.S.C. 3841(b)(2)) is amended--

(1) by striking `2002' and inserting `2006'; and

(2) by inserting `(other than under section 1240B(h))' before `shall'.

(b) AGRICULTURAL SUSTAINABILITY- Section 1241(b) of such Act (16 U.S.C. 3841(b)) is amended by adding at the end the following:

`(3) TARGETING OF PRACTICES TO PROMOTE AGRICULTURAL SUSTAINABILITY-

`(A) XXX- To the maximum extent practicable, the Secretary shall attempt to dedicate at least 10 percent of the funding in this subsection to each of the following practices to promote agricultural sustainability:

`(i) Managed grazing.

`(ii) Innovative manure management.

`(iii) Pesticide and herbicide reduction, including practices that reduce direct human exposure.

`(B) DEFINITIONS- In subparagraph (A):

`(i) MANAGED GRAZING- The term `managed grazing' means practices which frequently rotate animals on grazing lands to enhance plant health, limit soil erosion, protect ground and surface water quality, or benefit wildlife.

`(ii) INNOVATIVE MANURE MANAGEMENT- The term `innovative manure

management' means manure management technologies which--

`(I) eliminate the discharge of animal waste to surface and groundwaters through direct discharge, seepage, and runoff;

`(II) substantially eliminate atmospheric emissions of ammonia;

`(III) substantially eliminate the emission of odor;

`(IV) substantially eliminate the release of disease-transmitting vectors and pathogens;

`(V) substantially eliminate nutrient heavy metal contamination; or

`(VI) encourage reprocessing and cost-effective transportation of animal waste.

`(4) RESERVATION FOR WATER CONSERVATION- Not less than 25 percent of the funds made available by this section shall be used to share the cost of structural and nonstructural measures designed to conserve water, including but not limited to low-energy precision application, low-flow irrigation systems, and tailwater reuse systems in the Klamath Basin, Truckee-Carson Basin, Walker River Basin and other appropriate regions.'

SEC. 219. STATE RESERVE.

(a) IN GENERAL- For each of the fiscal years 2002 through 2006, of the funds made available under paragraph (1), the Secretary shall reserve $250,000,000, of which $5,000,000 shall be for producers in each State.

(b) AVAILABILITY- Funds reserved under paragraph (a) shall remain available for producers only until September 15 of the fiscal year in which the funds are made available.

TITLE IV--PRESERVATION OF WILDLIFE HABITAT

SEC. 221. WILDLIFE HABITAT INCENTIVES PROGRAM.

(a) EXTENSION AND FUNDING INCREASE- Section 387(c) of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 3836a) is amended to read as follows:

`(c) FUNDING FROM COMMODITY CREDIT CORPORATION- The Commodity Credit Corporation shall make available $100,000,000 for fiscal year 2002, $200,000,000 for fiscal year 2003, $400,000,000 for fiscal year 2004, and $450,000,000 for each of fiscal years 2005 and 2006 to the Secretary to carry out this section.'.

(b) ADDITIONAL INCENTIVES FOR WILDLIFE CONSERVATION- Section 387(b) of such Act (16 U.S.C. 10 3836(b)) is amended by inserting `, or for other costs relating to wildlife conservation,' before `approved by the Secretary'.

(c) PROGRAM MODIFICATIONS- Section 387 of such Act (16 U.S.C. 3836a) is amended by adding at the end the following:

`(d) INCENTIVE PAYMENTS- The Secretary may provide incentive payments to landowners, and other specified parties in this section, in exchange for the implementation of land management practices designed to create or preserve wildlife habitat, including the preservation of water for wildlife and the eradication or mitigation of invasive and noxious species in wildlife habitat. The payments may be in an amount and at a rate determined by the Secretary to be necessary to encourage a landowner to engage in the practice.

`(e) SPECIFIED PARTIES ELIGIBLE- With the agreement of State wildlife officials, the Secretary may provide incentive payments to private landowners and non-profit organizations that maintain, protect, and manage public lands for wildlife habitat.

`(f) FUNDING PRIORITY- The Secretary shall give priority to landowners whose lands contain important habitat for imperiled species or habitat identified by State conservation plans, where available.

`(g) CONSULTATION- To the extent practicable, the Secretary shall consult with Federal, State, local, and private experts, as considered appropriate by the Secretary, to ensure that projects under this section maximize conservation benefits and are regionally equitable.

`(h) ACQUISITION OF EASEMENTS- Beginning with fiscal year 2003, not more than 10 percent of the funds available shall be used to acquire permanent easements, provided that land enrolled in an easement is not land taken out of agricultural production.'.

SEC. 222. WETLANDS RESERVE PROGRAM.

(a) ENROLLMENT AUTHORITY- Section 1237(b)(1) 14 of the Food Security Act of 1985 (16 U.S.C. 3837(b)(1)) is amended to read as follows:

`(1) ENROLLMENT- The Secretary shall enroll in the wetlands reserve program a total of not less than 250,000 acres in fiscal years 2002 and 2003, and not less than 250,000 acres in each of fiscal years 2004 through 2006.'.

(b) REGIONAL EQUITY- Section 1237 of such Act (16 U.S.C. 3837) is amended by adding at the end the following:

`(h) Not later than 60 days after the date of the enactment of this sentence, the Secretary shall devise a plan to promote wetlands conservation in all regions where opportunities exist for wetlands restoration.'.

SEC. 223. CONSERVATION RESERVE PROGRAM.

(a) ENROLLMENT AUTHORITY- Section 1231 of the Food Security Act of 1985 (16 U.S.C. 3831) is amended--

(1) in subsection (a)--

(A) by striking `2002' and inserting `2006'; and

(B) by striking `and water' and inserting `, water, and wildlife';

(2) in subsection (d)--

(A) by striking `36,400,000' and inserting `42,000,000'; and

(B) by striking `2002' and inserting `2006'; and

(3) in subsection (h)(1), by striking `and 2002' and inserting `through 2006'.

(b) ELIGIBILITY- Section 1231(b) of such Act (16 U.S.C. 3831(b)) is amended--

(1) by striking paragraph (3) and inserting the following:

`(3) pasture, hay, and rangeland if the land will be restored as a wetland, or is within 300 feet

of a riparian area and will be restored in native vegetation; and'; and

(2) in paragraph (4)--

(A) by striking subparagraph (A) and inserting the following:

`(A) if the Secretary determines that--

`(i) the lands contribute to the degradation of soil, water, or air quality, or may affect the habitat of sensitive, threatened or endangered species; and

`(ii) the lands would pose an on-site or off-site environmental threat to soil, water, or air quality if permitted to remain in agricultural production; and

`(iii) soil, water, and air quality objectives with respect to the land cannot be achieved under the environmental quality incentives program established under chapter 4;';

(B) by striking `or' at the end of subparagraph (C);

(C) by striking the period at the end of subparagraph (D) and inserting `; or'; and

(D) by adding at the end the following:

`(E) if the Secretary determines that enrollment of the lands would contribute to conservation of ground or surface water. For purposes of the program under this subchapter, buffer strips on lands used for the production of fruits, vegetables, sod, orchards, or specialty crops shall be considered cropland.'.

(c) ENVIRONMENTALLY SENSITIVE LANDS AND BUFFER STRIPS- Section 1231(d) of such Act (16 U.S.C. 3831(d)) is amended by adding at the end the following: `Until December 31, 2007, of the acreage authorized for enrollment, not less than 5,500,000 acres shall be used to enroll environmentally sensitive lands through the continuous enrollment program and the conservation reserve enhancement program.'.

(d) LIMITED PERMANENT EASEMENT AUTHORITY- Section 1231(e) of such Act (16 U.S.C. 3831(e)) is amended by adding at the end the following:

`(3) PERMANENT EASEMENTS-

`(A) IN GENERAL- Notwithstanding paragraph (1), the Secretary may enroll up to 3,000,000 acres in the conservation reserve using permanent easements to protect critically important environmentally sensitive lands and habitats such as native prairies, native shrublands, small wetlands, springs, seeps, fens, and other rare and declining habitats. The terms of the easement shall be consistent with section 1232(a).

`(B) LIMITATIONS ON TRANSFERABILITY- The Secretary may transfer a permanent easement established under subparagraph (A) to a State or local government or a qualified nonprofit conservation organization. The holder of such a permanent easement may not transfer the easement to an entity other than a State or local government or a qualified nonprofit conservation organization.'.

(e) CONTINUOUS ENROLLMENT OF BUFFER STRIPS- Section 1231 of such Act (16 U.S.C. 3831) is amended by adding at the end the following:

`(i) CONTINUOUS ENROLLMENT OF BUFFER STRIPS- The Secretary shall allow continuous enrollment of buffers whose width and vegetation is designed to provide significant wildlife or water quality benefits, as determined by the Secretary.

`(j) IRRIGATED LANDS- Irrigated lands shall be enrolled at irrigated land rates unless the Secretary determines that other compensation is appropriate.

`(k) EXCEPTION TO PAYMENT LIMITATION- Payments made in connection with the enrollment of lands pursuant to the continuous enrollment or the conservation reserve enhancement program shall not be subject to any payment limitations under section 1239c(f)(1).

`(l) LIMITED EXCEPTIONS TO PROHIBITIONS ON ECONOMIC USES- Notwithstanding the prohibitions on economic use on lands enrolled in the Conservation Reserve Program under section 1232(a), the Secretary may permit on such lands the collection of native seeds and the use of wind turbines, so long as such activities preserve the conservation values of the land and take into account wildlife and wildlife habitat.'.

SEC. 224. CONSERVATION OF GRAZING LANDS.

Section 386 of the Federal Agriculture Improvement and Reform Act of 1996 (16 U.S.C. 2005b) is amended by striking subsection (f) and inserting the following:

`(f) INCENTIVE PAYMENTS- The Secretary may enter into 5-year, 10-year and 20-year contracts with landowners to provide financial assistance for landowner efforts to improve the ecological health of grazing lands, including practices that reduce erosion, employ prescribed burns, restore riparian area, control or eliminate exotic species, reestablish native grasses, or otherwise enhance wildlife habitat.

`(g) FUNDING FROM COMMODITY CREDIT CORPORATION- The Commodity Credit Corporation shall make available $50,000,000 for each of the fiscal years 2002 through 2006 to the Secretary to carry out this section.'.

SEC. 225. GRASSLAND RESERVE AND ENHANCEMENT PROGRAM.

Chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3830B3837f) is amended by adding at the end the following:

`Subchapter D--Grassland Reserve and Enhancement Program

`SEC. 1238. GRASSLAND RESERVE AND ENHANCEMENT PROGRAM.

`(a) ESTABLISHMENT- The Secretary shall establish a program to use contracts and easements to protect 3,000,000 acres of environmentally critical grasslands, shrubs, and blufflands.

`(b) ENROLLMENT CONDITIONS-

`(1) MAXIMUM ENROLLMENT- The total number of acres enrolled in the program shall not exceed 3,000,000 acres. The Secretary shall enroll lands using permanent easements to meet demand, but in no case shall more than 50 percent of the available acreage be enrolled in permanent easements, and the balance shall be enrolled in contracts through which

the Secretary shall provide assistance and incentive payments.

`(2) TERMS OF CONTRACTS OR EASEMENTS- The Secretary shall enroll in the program for a willing owner not less than 100 contiguous acres of land west of the 100th meridian or not less than 50 contiguous acres of land east of the 90th meridian through 30-year contracts or permanent easements.

`(c) ELIGIBLE LAND- Land shall be eligible to be enrolled in the program if the Secretary determines that--

`(1) the land is natural grass or shrubland;

`(2) the land--

`(A) is located in an area that has been historically dominated by natural grass or shrubland; and

`(B) has potential to serve as habitat for animal or plant populations of significant ecological value if the land is restored to natural grass or shrubland; or

`(3) the land is adjacent to land described in paragraph (1) or (2), and the Secretary determines it is necessary to maintain or restore native grassland or shrubland under this section.

`(d) LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS- To carry out this section, there shall be available for each of fiscal years 2002 through 2011 such sums as may be necessary from the funds of the Commodity Credit Corporation.

`SEC. 1238A. CONTRACTS AND AGREEMENTS.

`(a) REQUIREMENTS OF LANDOWNER- To be eligible to enroll land in the program, the owner of the land shall--

`(1) agree to comply with the terms of the contract and related restoration agreements; and

`(2) agree to the suspension of any existing cropland base and allotment history for the land under any program administered by the Secretary.

`(b) TERMS OF CONTRACT OR EASEMENT- A contract or easement under subsection (a) shall--

`(1) permit--

`(A) common grazing practices on the land in a manner that is consistent with maintaining the viability of natural grass and shrub species indigenous to that locality;

`(B) haying, mowing, or haying for seed production, except that such uses shall not be permitted until after the end of the nesting and brood-rearing season for birds in the local area which are in significant decline or are conserved pursuant to State or Federal law, as determined by the Natural Resources Conservation Service State conservationist;

`(C) construction of fire breaks and fences, including placement of the posts necessary for fences; and

`(D) practices that reduce erosion, restore native species, control and eradicate exotic species, enhance habitat for native wildlife, and improve the health of riparian areas;

`(2) prohibit--

`(A) forestry and the production of any agricultural commodity (other than hay);

`(B) unless allowed under subsection (d), the conduct of any other activity that would disturb the surface of the land covered by the contract or easement; and

`(C) the development of homes, businesses or other structures on land subject to the contract or easement; and

`(3) include such additional provisions as the Secretary determines are appropriate to carry out or facilitate the administration of this subchapter.

`(c) RANKING APPLICATIONS-

`(1) ESTABLISHMENT OF CRITERIA- The Secretary shall establish criteria to evaluate and rank applications for contracts under this subchapter.

`(2) EMPHASIS- In establishing the criteria, the Secretary shall emphasize support for native grass and shrubland, grazing operations, and plant and animal biodiversity.

`(d) RESTORATION AGREEMENTS- The Secretary shall prescribe the terms by which grassland that is subject to a contract under the program shall be restored. The agreement shall include duties of the land owner and the Secretary, including the Federal share of restoration payments and technical assistance.

`(e) VIOLATIONS- On the violation of the terms or conditions of a contract or restoration agreement entered into under this section--

`(1) the contract shall remain in force; and

`(2) the Secretary may require the owner to refund all or part of any payments received by the owner under this subchapter, with interest on the payments as determined appropriate by the Secretary.

`SEC. 1238B. DUTIES OF SECRETARY.

`(a) IN GENERAL- In return for the granting of a contract by an owner under this subchapter, the Secretary shall make contract payments and payments of the Federal share of restoration and provide technical assistance to the owner in accordance with this section. The Secretary shall base the amount paid for an easement on the fair market value of the easement.

`(b) FEDERAL SHARE OF RESTORATION- The Secretary shall make payments to the owner of not more than--

`(1) in the case of virgin (never cultivated) grassland, 90 percent of the costs of carrying out measures and practices necessary to restore grassland functions and values; or

`(2) in the case of restored grassland, 75 percent of such costs.

`(c) TECHNICAL ASSISTANCE- A landowner who is receiving a benefit under this subchapter shall be eligible to receive technical assistance in accordance with section 1243(d) to assist the owner or operator in carrying out a contract entered into under this subchapter.

`(d) PAYMENTS TO OTHERS- If an owner who is entitled to a payment under this subchapter dies, becomes incompetent, is otherwise unable to receive the payment, or is succeeded by another person who renders or completes the required performance, the Secretary shall make the payment, in accordance with regulations promulgated

by the Secretary and without regard to any other provision of law, in such manner as the Secretary determines is fair and reasonable in light of all the circumstances.'.

SEC. 226. WATER CONSERVATION PROGRAM

(a) IN GENERAL- Chapter 1 of subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C. 3831 et seq.) is amended by adding at the end the following:

`Subchapter E--Water Conservation Program

`SEC. 1239. DEFINITIONS.

`In this subchapter:

`(1) ELIGIBLE LAND- The term `eligible land' means any land whose enrollment in this program will further the goals of this subchapter.

`(2) ENDANGERED SPECIES- The term `endangered species' has the meaning given the term in section 3 of the Endangered Species Act of 1973 (16 U.S.C. 1532).

`(3) PROGRAM- The term `program' means the water conservation program established under section 1238A.

`(4) SENSITIVE SPECIES- The term `sensitive species' has the meaning given the term `candidate species' within the meaning of section 424.02(b) of title 50, Code of Federal Regulations (or a successor regulation).

`(5) THREATENED SPECIES- The term `threatened species' has the meaning given the term in section 3 of the Endangered Species Act of 1973 (16 U.S.C. 1532).

`SEC. 1239A. PROGRAM.

`(a) ESTABLISHMENT- Effective for each of the 2003 through 2006 calendar years, the Secretary shall establish, and carry out the enrollment of eligible land described in subsection (b) through the use of contracts in a water conservation program to provide for the temporary transfer of water, or permanent acquisition of water or water rights, from willing sellers, including in the Klamath Basin, the Truckee-Carson Basin and the Walker River Basin.

`(b) ENROLLMENT OF ELIGIBLE LAND-

`(1) CRP LAND-

`(A) IN GENERAL- The Secretary shall enroll in the program not less than 2,000,000 acres of the acres authorized to be enrolled in the conservation reserve program under section 1231(d).

`(B) TIMING- To the maximum extent practicable, an enrollment under subparagraph (A) shall occur during the enrollment period for the conservation reserve program in accordance with section 1234(c)(2)(A).

`(2) OTHER ELIGIBLE LAND-

`(A) IN GENERAL- In addition to land described in paragraph (1), if the Secretary determines that the condition under subparagraph (B) is met, the Secretary shall enroll in the program such acres of land as the Secretary determines to be appropriate that, but for water rights associated with the land, would be marginal if used for agricultural production or as pasture.

`(B) CONDITION- The condition referred to in subparagraph (A) is that any contract governing the enrollment of land described in subparagraph (A) provides for the transfer to the Secretary, or permanent acquisition by the Secretary, of water rights associated with the land, to be used to protect 1 or more endangered species, sensitive species, or threatened species or for the conservation or recovery of such species.

`(C) PRIORITY IN ENROLLMENT- In enrolling eligible land in the program, the Secretary shall give priority to land with associated water rights that--

`(i) could be used to significantly advance the goals of Federal, State, Tribal and local fish, wildlife, and plant conservation plans, including--

`(I) plans that address multiple endangered species, sensitive species, or threatened species; and

`(II) agreements entered into, or conservation plans submitted, under section 6 or 10(a)(2)(A) of the Endangered Species Act of 1973 (16 U.S.C. 1535, 1539(a)(2)(A)), respectively; or

`(ii) would benefit fish, wildlife, or plants of 1 or more refuges within the National Wildlife Refuge System.

`SEC. 1239B. DURATION AND NATURE OF CONTRACTS.

`(a) IN GENERAL- In enrolling eligible land in the program, the Secretary shall enter into a contract described in subparagraph (b) or (c), as appropriate, with a willing owner.

`(b) TRANSFER OF WATER RIGHTS- In enrolling eligible land in the program, for the purpose of transferring water rights associated with eligible land or providing dry year options on such water rights, the Secretary shall, in accordance with the water law of the State in which eligible land sought to be enrolled is located, enter into a contract with the owner of the eligible land for the transfer of those rights that has a term of not less than one but not more than 15 years, or shall provide for dry year option contract or other similar agreement which effectuates the purposes of this section.

`(c) PERMANENT ACQUISITION OF WATER RIGHTS- In enrolling eligible land in the program, for the purpose of permanently acquiring water rights associated with the eligible land, the Secretary may enter into a contract or agreement for the acquisition of those rights with--

`(1) the owner of the eligible land; and

`(2) to the extent that matching funds are provided for the acquisition of the water rights--

`(A) a State (including a political subdivision); or

`(B) nonprofit organization; or

`(C) Tribes.'

`SEC. 1239C. DUTIES OF OWNERS.

`(a) IN GENERAL- The owner of eligible land enrolled in the program under a contract described in subsection (b) or (c) of section 1238B shall, in accordance with the contract--

`(1) agree to transfer to the Secretary water rights associated with enrolled eligible land;

`(2) agree to take no action that would interfere with the quantity or quality of water transferred or acquired under the contract;

`(3) at the option of the Secretary, use, or transfer or sell to an entity approved by the Secretary, water described in paragraph (2) to protect 251 or more endangered species, sensitive species, or threatened species; and

`(4) on violation of any term of the contract that the Secretary determines is of such a nature as to warrant termination of the contract--

`(A) forfeit all rights to receive payments under the contract; and

`(B) refund to the Secretary any payments received as of the date of the violation (including interest on the payments, as determined by the Secretary).

`(b) TRANSFER OF ELIGIBLE LAND BY OWNER-

`(1) IN GENERAL- If the owner of eligible land enrolled in the program transfers any right or interest in the eligible land subject to a contract described in subsection (b) or (c) of section 1239B, the owner shall--

`(A) forfeit all rights to receive payments under the contract; and

`(B)(i) refund to the Secretary any payments received as of the date of the violation (including interest on the payments, as determined by the Secretary); or

`(ii) accept such payment adjustments or make such refunds as the Secretary determines to be appropriate.

`(2) EXCEPTIONS- Paragraph (1) shall not apply in any case in which--

`(A) a transferee of eligible land or an interest in eligible land described in paragraph (1) agrees with the Secretary--

`(i) to assume all obligations under a contract described in subsection (b) or (c) of section 1239B to which the transferred eligible land is subject; or

`(ii) to modify the contract in a manner that is consistent with this section; or

`(B) eligible land or an interest in eligible land described in paragraph (1) is purchased by or for the United States Fish and Wildlife Service, Tribe, or others.

`SEC. 1239D. DUTIES OF THE SECRETARY.

`(a) PAYMENTS- The Secretary shall make payments for eligible land enrolled in the program in accordance with section 1239E.

`(b) STATE APPLICATIONS AND PROCESS- At the request of an owner, the Secretary shall submit any necessary State application, and complete any applicable State legal process, for the transfer or acquisition of water under a contract described in subsection (b) or (c) of section 1239B.

`SEC. 1239E. PAYMENTS.

`(a) IN GENERAL-

`(1) TEMPORARY TRANSFER OF WATER RIGHTS- In a case in which the Secretary enters into a contract described in section 1238B(b), for each year of the term of the contract, the Secretary shall pay to the owner of the enrolled eligible land a payment in such amount as the Secretary and the owner jointly determine is appropriate to compensate the owner for the use of the water rights transferred under the contract.

`(2) PERMANENT ACQUISITION OF WATER RIGHTS- In a case in which the Secretary enters into a contract described in section 1238B(c), the Secretary shall make a single payment to the owner of enrolled eligible land in such amount as the Secretary and the owner jointly determine is appropriate to compensate for the acquisition of water rights associated with the enrolled eligible land.

`(b) TIMING- The Secretary shall make payments for obligations incurred during the fiscal year by the Secretary under this section as soon as practicable after October 1 of the fiscal year.

`(c) DETERMINATION OF PAYMENT AMOUNT- The Secretary may determine the amount to be paid to the owner of eligible land under paragraph (1) or (2) of subsection (a) by--

`(1) taking into consideration such minimum amount as the Secretary determines is necessary to encourage owners to participate in the program;

`(2) soliciting and reviewing bids for enrollment contracts from owners in such manner as the Secretary may prescribe, except that the bidding process for eligible land enrolled under the program shall be separate from the bidding process for eligible land

under the conservation reserve program under section 1234; or

`(3) using such other means as the Secretary determines to be appropriate.

`(d) ACCEPTANCE OF CONTRACT OFFERS- In determining whether to accept an offer for a contract from an owner of eligible land to enroll the eligible land in the program, the Secretary shall--

`(1) to the maximum extent practicable as determined by the Secretary, incorporate the applicable provisions of priority system established under section 1230(d); and

`(2) explicitly encourage, and give priority to the permanent and long-term acquisition of water and water rights that accompany the eligible land to be enrolled in the program by providing enhanced payments for--

`(A) the permanent acquisition of water or water rights; or

`(B) the transfer of water or water rights for terms of at least 10 years.

`SEC. 1239F. CONSULTATION.

`In enrolling eligible land in the program, to ensure, to the maximum extent practicable, that all water rights transferred or acquired under this section are used to protect endangered species, sensitive species, and threatened species, the Secretary shall consult with--

`(1) the Secretary of the Interior;

`(2) the head of the lead water agency of the State in which the enrolled eligible land is located; and

`(3) any affected Tribes.

`SEC. 1239G. ADDITIONAL APPLICABLE PROVISIONS.

`The terms and conditions of subsections (e), (g), and (h) of section 1234 and subsections (a) through (d) of section 1235 apply to the enrollment of eligible land in the program, to the extent determined to be appropriate by the Secretary.

`SEC. 1239H. STATE WATER LAW.

`Nothing in this section shall be construed to preempt State water law.'.

(b) FUNDING- Section 1241(a) of the Food Security Act of 1985 (16 U.S.C. 3841(a)) is amended--

(1) in paragraph (2), by striking `; and';

(2) by redesignating paragraph (3) as paragraph (4); and

(3) by inserting after paragraph (2) the following:

`(3) subchapter E of chapter 1 of subtitle D; and'.

TITLE V--ORGANIC FARMING

SEC. 231. ORGANIC AGRICULTURE RESEARCH TRUST FUND.

(a) ESTABLISHMENT- There shall be established in the Treasury of the United States an account to be known as the `Organic Agriculture Research Trust Fund'.

(b) AUTHORIZATION OF APPROPRIATIONS; TRANSFER OF MONEYS; INVESTMENTS-

(1) The Credit Corporation shall make available $250,000,000 to the Secretary to carry out this section.

(2) Moneys deposited in the Fund under paragraph (1) shall be invested by the Secretary of the Treasury in obligations of the United States or any agency thereof, in general obligations of any State or any political subdivision thereof, in any interest-bearing account or certificate of deposit of a bank that is a member of the Federal Reserve System, or in obligations fully guaranteed as to principal and interest by the United States. Interest, dividends, and other payments that accrue from such investments shall be deposited in the Fund and also shall be so invested, subject to subsection (c) of this section.

(c) AVAILABILITY OF MONIES FOR AUTHORIZED AND APPROVED ACTIVITIES- Monies in the Fund shall be available to the Board in such amounts, and for such activities, as the Secretary may approve to implement organic research plans or projects as authorized by Section 1672B of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5925b).

SEC. 232. ESTABLISHMENT OF NATIONAL ORGANIC RESEARCH ENDOWMENT INSTITUTE.

The Secretary of Agriculture, in consultation with the National Organic Standards Board, may establish in the Department of Agriculture a National Organic Research Endowment Institute whose function shall be to aid the organic industry through the implementation of the organic products research order, which its Board of Trustees shall administer, and the use of monies made available to its Board of Trustees from the Organic Research Trust Fund to implement the order. In implementing the order, the Institute shall provide a permanent system for funding scientific research activities designed to facilitate the expansion of markets for organic products marketed in the United States. The Institute shall be headed by a Board of Trustees composed of the members of the National Organic Promotion and Research Board. The Board may appoint from among its members an executive committee whose membership shall reflect equally each of the different regions in the United States in which organic products are produced. The executive committee shall have such duties and powers as are delegated to it by the board. The members of the Board shall serve without compensation. While away from their homes or regular places of business in the performance of services for the Board, members of the Board shall be allowed reasonable travel expenses, including a per diem allowance in lieu of subsistence, as recommended by the Board and approved by the Secretary, except that there shall be no duplication of payment for such expenses.

TITLE VI--TECHNICAL ASSISTANCE

SEC. 241. REIMBURSEMENT FOR PROGRAM ADMINISTRATION.

Subtitle E of title XII of the Food Security Act of 1985 (16 U.S.C. 3841-3843) is amended--

(1) by inserting `(1)' before the first unnumbered paragraph;

(2) by redesignating paragraphs (1) through (3) as subparagraphs (A) through (B);

(3) by moving the newly designated subparagraphs (A) through (B) 3 items to the right; and

(4) by adding at the end the following:

`(2) For each of fiscal years 1996 through 2011, the Secretary shall use the funds of the Commodity Credit Corporation for the provision of technical assistance to allow for full reimbursement of actual costs for delivering all conservation programs funded through the Commodity Credit Corporation for which technical assistance is required.'.

SEC. 242. CONSERVATION TECHNICAL ASSISTANCE BY THIRD PARTIES.

Section 1243(d) of the Food Security Act of 1985 (16 U.S.C. 3843(d)) is amended--

(1) by striking `In the preparation' and inserting the following:

`(1) IN GENERAL- In the preparation' and

(2) by adding at the end the following:

`(2) CERTIFICATION OF THIRD-PARTY PROVIDERS-

`(A) IN GENERAL- Not later than 6 months after the date of the enactment of this Act, the Secretary of Agriculture shall, by regulation, establish a system for approving persons to provide technical assistance pursuant to this title. In the system, the Secretary shall give priority to a person who has a memorandum of understanding regarding the provision of technical assistance in place with the Secretary.

`(B) EXPERTISE REQUIRED- In prescribing such regulations, the Secretary shall ensure that persons with expertise in the technical aspects of conservation planning, watershed planning, environmental engineering, including commercial entities, qualified nonprofit entities, State or local governments or agencies, and other Federal agencies, are eligible to become approved providers of such technical assistance.

`(C) QUALIFIED NONPROFIT ORGANIZATIONS- Qualified nonprofit organizations shall include organizations whose missions primarily promote the stewardship of working farmland and ranchland.

`(3) QUALITY ASSURANCE PROGRAM- The Secretary shall establish a program to assess the quality of the technical assistance provided by third parties.'.

SEC. 243. CONSERVATION PRACTICE STANDARDS.

The Secretary of Agriculture shall--

(1) revise standards and, when necessary, establish standards for eligible conservation practices to include measurable goals for enhancing natural resources, including innovative practices;

(2) within 6 months after the date of the enactment of this section, revise the National Handbook of Conservation Practices and field office technical guides; and

(3) not less frequently than once every 5 years, update the Handbook and technical guides to reflect the best available science.

TITLE VII--FARMLAND STEWARDSHIP ENHANCEMENT PROGRAM

SEC. 251. FARMLAND STEWARDSHIP ENHANCEMENT PROGRAM.

(a) PURPOSE- The purpose of this subtitle is to provide for the establishment of a program that recognizes the leveraged benefit of an ecosystem-based application of the Department of Agriculture conservation programs, addresses the increasing and extraordinary threats to agriculture in many areas of the United States, and recognizes the importance of local and regional involvement in the protection of economically and ecologically important farmlands.

(b) ESTABLISHMENT- The Secretary of Agriculture (in this subtitle referred to as the `Secretary') shall establish a Farmland Stewardship Enhancement Program through which States, local governments, tribes, and combinations of States may submit, and the Secretary may approve, plans to integrate agriculture and forestry conservation programs of the United States Department of Agriculture with State, local, tribal, and private efforts to address farm preservation, water quality, wildlife, and other conservation needs in critical areas, watersheds, and corridors in a manner that enhances the conservation benefits of the individual programs, tailors programs to State and local needs, and promotes and supports ecosystem and watershed-based conservation.

(c) MEMORANDUM OF AGREEMENT- On approval of a proposed plan, the Secretary may enter into a memorandum of agreement with a State, a combination of States, local governments, or tribes, that--

(1) guarantees specific program resources for implementation of the plan;

(2) establishes different or automatic enrollment criteria than otherwise established by regulation or policy, for specific levels of enrollments of specific conservation programs within the region, if doing so will achieve greater conservation benefits;

(3) establishes different compensation rates to the extent the parties to the agreement consider justified;

(4) establishes different conservation practice criteria if doing so will achieve greater conservation benefits;

(5) provides more streamlined and integrated paperwork requirements; and

(6) otherwise alters any other requirement established by United States Department of Agriculture policy and regulation to the extent not inconsistent with the statutory requirements and purposes of an individual conservation program.

SEC. 252. FARMLAND STEWARDSHIP ENHANCEMENT PLAN.

(a) PREPARATION- To be eligible to participate in the program under this subtitle, a State, combination of States, political subdivision or agency of a State, tribe, or local government shall submit to the Secretary an enhancement plan that proposes specific criteria and commitment of resources in the geographic region designated, and describes how the linkage of Federal, State, and local resources will--

(1) improve the economic viability of agriculture by protecting contiguous tracts of land;

(2) improve the ecological integrity of the ecosystems or watersheds within the region by linking land with high ecological and natural resource value; and

(3) in the case of a multi-State plan, provide a draft memorandum of agreement among entities in each State.

(b) SUBMISSION AND REVIEW- Within 90 days after receipt of the enhancement plan, the Secretary shall review the plan and approve it for implementation and funding under this subtitle if the Secretary determines that the plan and memorandum of agreement meet the criteria specified in subsection (c).

(c) CRITERIA FOR PARTICIPATION- The Secretary may approve an enhancement plan only if, as determined by the Secretary, the plan provides for each of the following:

(1) Actions taken under the enhancement plan are voluntary and require the consent of willing landowners.

(2) Criteria specified in the plan and memorandum of agreement assure that enrollments in each conservation program incorporated through the plan are of exceptionally high conservation value.

(3) The program provides benefits greater than the benefits that would likely be achieved through individual application of the Federal conservation programs because of such factors as--

(A) ecosystem- or watershed-based enrollment criteria;

(B) lengthier or permanent conservation commitments;

(C) integrated treatment of special natural resource problems, including preservation and enhancement of natural resource corridors; and

(D) improved economic viability for agriculture.

(4) Staffing and marketing, considering both Federal and non-Federal resources, are sufficient to assure program success.

(d) APPROVAL AND IMPLEMENTATION- Within 90 days after approval of an enhancement plan, the Secretary shall begin to provide funds for the implementation of the plan.

(e) PRIORITY- In carrying out this section, the Secretary shall give priority to multi-State or multi-tribal plans.

SEC. 253. FUNDING REQUIREMENTS.

(a) COST-SHARING- As a further condition on the approval of a enhancement plan submitted by a non-Federal interest under section 272, the Secretary shall require the non-Federal interest to contribute at least 20 percent of the total cost of the Farmland Stewardship Enhancement Program.

(b) EXCEPTION- The Secretary may reduce the cost-share requirement in the case of a specific activity under the Farmland Stewardship Enhancement Program on good cause and demonstration that the project or activity is likely to achieve extraordinary natural resource benefits.

(c) COORDINATION- The Secretary shall require that non-Federal interests contributing financial resources for the Farmland Stewardship Enhancement Program shall implement streamlined paperwork requirements and other procedures to allow for integration with the Federal programs for participants in the program.

(d) RESERVATION OF FUNDS- The Secretary shall direct funds on a priority basis to the Farmland Stewardship Enhancement Program and to projects in areas identified by the plan.

(e) ADMINISTRATION- A State may submit multiple plans, but the Secretary shall assure opportunity for submission by each State. Acreage committed as part of approved Conservation Reserve Enhancement Programs shall be considered acreage of the Conservation Reserve Program committed to a Conservation Enhancement Program.

TITLE VIII--MISCELLANEOUS CONSERVATION PROVISIONS

SEC. 261. CONSERVATION PROGRAM PERFORMANCE REVIEW AND EVALUATION.

(a) IN GENERAL- The Secretary shall establish a grant program to evaluate the benefits of the conservation programs under title XII of the Food Security Act of 1985 and under sections 242 and 262 of this Act.

(b) GRANTS- The Secretary shall make grants to land grant colleges and other research institutions whose applications are highly ranked under subsection (c) to evaluate the economic and environmental benefits of conservation programs, and shall use such research to identify and rank measures needed to improve water quality, fish and wildlife habitat, and other environmental goals of conservation programs.

(c) SCIENTIFIC PANELS- The Secretary shall establish a panel of independent scientific experts to review and rank the grant applications submitted under subsection (a).

(d) FUNDING- The Commodity Credit Corporation shall make available $10,000,000 to the Secretary for each of fiscal years 2002 through 2006 to carry out this section.

TITLE IX--REGIONAL EQUITY

SEC. 271. ALLOCATION OF CONSERVATION FUNDS BY STATE.

(a) STATE ALLOCATION- To the maximum extent practicable in each of fiscal years 2002 through 2006, the Secretary, subject to the rules of the conservation programs administered by the Secretary, shall ensure that each State receives at a minimum the State's share of $2,000,000,000 in this title based on the State's share of the total agricultural market value of production, with each State receiving not less than 0.52 percent and not more than 7 percent of such amount annually. Under this formula, each state will receive approximately the following annual amounts:

(1) Alabama: $31,480,000;

(2) Alaska: $10,000,000;

(3) Arizona: $19,340,000;

(4) Arkansas: $55,660,000;

(5) California: $140,000,000;

(6) Colorado: $46,060,000;

(7) Connecticut: $10,000,000;

(8) Delaware: $10,000,000;

(9) Florida: $61,000,000;

(10) Georgia: $50,720,000;

(11) Hawaii: $10,000,000;

(12) Idaho: $34,000,000;

(13) Illinois: $86,920,000;

(14) Indiana: $53,140,000;

(15) Iowa: $121,400,000;

(16) Kansas: $93,540,000;

(17) Kentucky: $31,140,000;

(18) Louisiana: $20,640,000;

(19) Maine: $10,000,000;

(20) Maryland: $13,320,000;

(21) Massachusetts: $10,000,000;

(22) Michigan: $36,240,000;

(23) Minnesota: $84,220,000;

(24) Mississippi: $31,780,000;

(25) Missouri: $54,540,000;

(26) Montana: $19,000,000;

(27) Nebraska: $99,880,000;

(28) Nevada: $10,000,000;

(29) New Hampshire: $10,000,000;

(30) New Jersey: $10,000,000;

(31) New Mexico: $16,440,000;

(32) New York: $28,880,000;

(33) North Carolina: $77,980,000;

(34) North Dakota: $29,160,000;

(35) Ohio: $47,580,000;

(36) Oklahoma: $42,120,000;

(37) Oregon: $30,160,000;

(38) Pennsylvania: $40,620,000;

(39) Rhode Island: $10,000,000;

(40) South Carolina: $16,140,000;

(41) South Dakota: $36,260,000;

(42) Tennessee: $22,140,000;

(43) Texas: $139,860,000;

(44) Utah: $10,000,000;

(45) Vermont: $10,000,000;

(46) Virginia: $23,800,000;

(47) Washington: $48,440,000;

(48) West Virginia: $10,000,000;

(49) Wisconsin: $56,680,000; and

(50) Wyoming: $10,000,000.

(b) TRANSITION AND UNOBLIGATED BALANCES- If the offices of the United States Department of Agriculture in each respective State cannot expend all funds allocated in this title within 2 consecutive fiscal years for the programs identified in this title, the funds shall be remitted to the Secretary for reallocation as the Secretary deems appropriate among States to address unmet conservation needs through the programs in this title, except that in no event shall these unobligated balances be used to fund technical assistance.

(c) REGIONAL EQUITY- Section 1230 of the Food Security Act of 1985 (16 U.S.C. 3830) is amended by adding at the end the following:

`(d) REGIONAL EQUITY- In carrying out the ECARP, the Secretary shall recognize the importance of regional equity, and the importance of accomplishing many conservation objectives that can sometimes only be achieved on land of high value.

`(e) Not later than October 1, 2002, the Secretary shall reform compensation and other policies to ensure that enrollments of land in ECARP achieve these objectives and are equitable on a regional basis.'.

TITLE X--CONSERVATION SECURITY PROGRAM

SEC. 281. CONSERVATION SECURITY PROGRAM.

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

`CHAPTER 6--CONSERVATION SECURITY PROGRAM

`SEC. 1240P. CONSERVATION SECURITY PROGRAM.

`(a) IN GENERAL- The Secretary shall establish a conservation security program to assist owners and operators of agricultural operations to promote, as is applicable to each operation--

`(1) conservation of soil, water, energy, and other related resources;

`(2) soil quality protection and improvement;

`(3) water quality protection and improvement;

`(4) air quality protection and improvement;

`(5) diversity of flora and fauna;

`(6) on-farm conservation and regeneration of biological resources, including plant and animal germplasm;

`(7) wetland restoration, conservation, and enhancement;

`(8) wildlife habitat management, with special emphasis on species identified by the Natural Heritage Program of the State;

`(9) reduction of greenhouse gas emissions and enhancement of carbon sequestration; and

`(10) any similar conservation purpose (as determined by the Secretary).

`(b) ELIGIBILITY-

`(1) ELIGIBLE OWNERS AND OPERATORS- To be eligible to participate in the conservation security program an owner or operator shall--

`(A) develop and submit to the Secretary, and obtain the approval of the Secretary, of, a conservation security plan that meets the requirements of subsection (c)(1); and

`(B) enter into a conservation security contract with the Secretary to carry out the conservation security plan.

`(2) ELIGIBLE LAND-

`(A) IN GENERAL- Private agricultural land (including cropland, rangeland, grassland, and pasture land) that is entirely used as part of the agricultural operation of an owner or operator on the date of enactment of this chapter shall be eligible for enrollment in the conservation security program.

`(B) EXCLUSIONS-

`(i) CONSERVATION RESERVE PROGRAM- Land enrolled in the conservation reserve program under subchapter B of chapter 1 shall not be eligible for enrollment in the conservation security program except for land enrolled in partial field conservation practice enrollment options.

`(ii) WETLANDS RESERVE PROGRAM- Land enrolled in the wetlands reserve program established under subchapter C of chapter 1 of subtitle D shall not be eligible for enrollment in the conservation security program.

`(iii) TOLERANCE LEVELS- The Secretary shall promulgate regulations to ensure that land shall not be eligible for enrollment in the conservation security program if the land is initially used for the production of an agricultural commodity after the date of enactment of this chapter and cannot be used for the production of an agricultural commodity without resulting in the loss of soil at a level that exceeds the soil loss tolerance level.

`(c) CONSERVATION SECURITY PLANS- A conservation security plan shall--

`(1) identify the resources and designated land to be conserved under the conservation security plan;

`(2) describe the tier of conservation practices, and the particular conservation practices to be implemented, maintained, or improved, in accordance with subsection (d) on the land covered by the conservation security contract for the specified term;

`(3) contain a schedule of the implementation, maintenance, or improvement of the conservation practices described in the conservation security plan during the term of the conservation security contract;

`(4) meet the requirements of the highly erodible land and wetland conservation requirements of subtitles B and C;

`(5) address conservation priorities of State and locality in which the operation is located to the greatest extent possible; and

`(6) contain such other terms as the Secretary determines to be appropriate.

`(d) CONSERVATION PRACTICES-

`(1) ESTABLISHMENT OF TIERS- The Secretary shall establish 3 tiers of conservation practices that are eligible for payment under a conservation security contract, including a first tier consisting of basic conservation practices, a second tier consisting of conservation practices that entail land use adjustment, and a third tier that addresses all resources and a full complement of conservation practices.

`(2) CONSERVATION PRACTICE STANDARDS- The Secretary shall establish guidance standards for implementation of eligible conservation practices.

`(e) CONSERVATION SECURITY CONTRACTS- On approval of a conservation security plan of an owner or operator, the Secretary shall enter into a conservation security contract with the owner or operator to enroll the land covered by the conservation security plan in the conservation security program for a period of not less than 5 years or longer than 10 years.

`(f) ANNUAL PAYMENTS-

`(1) IN GENERAL- The Secretary shall, in amounts and for a period of years specified in the conservation security contract and based on objective and transparent criteria established by the Secretary, make an annual payment to the owner or operator in an amount not to exceed a maximum payment for a given tier established by the Secretary based on environmental benefit, costs and any other factors the Secretary determines appropriate.

`(2) LAND ENROLLED IN OTHER CONSERVATION PROGRAMS- Notwithstanding any other provision of law, if an owner or operator has land enrolled in another conservation program administered by the Secretary and has applied to enroll the same land in the conservation security program, the owner or operator may elect to--

`(A) convert the contract under the other conservation program to a conservation security contract, without penalty, except that this subclause shall not apply to a long-term or permanent conservation easement; or

`(B) have each annual payment to the owner or operator under this paragraph reduced to reflect payment for practices the owner or operator receives under the other conservation program, except that the annual payment under this paragraph may include incentives for qualified practices that enhance or extend the conservation benefit achieved under the other conservation program.

`(g) TECHNICAL ASSISTANCE- For each fiscal year, the Secretary shall use such sums as are necessary from the funds of the Commodity Credit Corporation to provide technical assistance to owners and operators for the development and implementation of conservation security contracts. Technical assistance may be provided by persons not employed by USDA.

`(h) EDUCATION, OUTREACH, MONITORING, AND EVALUATION- For each fiscal year, the Secretary shall use such sums as are necessary from the funds of the Commodity Credit Corporation to carry out education, outreach, monitoring, and evaluation activities in support of the conservation security program.

`(i) ON-FARM RESEARCH, DEMONSTRATION AND PILOT PROJECTS- The Secretary shall encourage participation in on-farm research and demonstration projects, as well as pilot projects that further accomplish the goals stated in section a(1).

`(j) FUNDING- Of the funds of the Commodity Credit Corporation, the Corporation shall make available to carry out this chapter such sums as are necessary, to remain available until expended.'.

(b) REGULATIONS- The Secretary shall promulgate such regulations as are necessary to carry out this section.

TITLE XI--RURAL COMMUNITY ECONOMIC ENHANCEMENT

SEC. 291. EXPANSION OF STATE MARKETING PROGRAMS.

(a) FEDERAL-STATE MARKET INCENTIVE PAYMENTS- Section 204(b) of the Agricultural Marketing Act of 1946 (7 U.S.C. 1623) is amended by striking `such sums as he may deem appropriate' and inserting `$10,000,000 from the Commodity Credit Corporation for each of the fiscal years 2002 through 2006'.

(b) MARKET DEVELOPMENT GRANTS- Section 203(e)(1) of such Act (7 U.S.C. 1622(e)(1)) is amended by adding at the end the following: `The Secretary shall transfer to State departments of agriculture and other State marketing offices at least 10 percent of the funds appropriated for a fiscal year for this subsection to facilitate the development of local and regional markets for agricultural products, including direct farm-to-consumer markets.'.

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