PEANUT PROGRAM.

SEC. 155. PEANUT PROGRAM. (a) Quota Peanuts.— (1) Availability of loans.— The Secretary shall make nonrecourse loans available to producers of quota peanuts. (2) Loan rate.— The national average quota loan rate for quota peanuts shall be $610 per ton. (3) Inspection, handling, or storage.— The loan amount may not be reduced by the Secretary by any deductions for inspection, handling, or storage. (4) Location and other factors.— The Secretary may make adjustments in the loan rate for quota peanuts for location of peanuts and such other factors as are authorized by section 162. (5) Offers from handlers.— If a producer markets a quota peanut crop, meeting quality requirements for domestic edible use, through the marketing association loan for two consecutive marketing years and the Secretary determines that a handler provided the producer with a written offer, upon delivery, for 110 STAT. 923the purchase of the quota peanut crops at a price equal to or in excess of the quota support price, the producer shall be ineligible for quota price support for the next marketing year. The Secretary shall establish the method by which a producer may appeal a determination under this paragraph regarding ineligibility for quota price support. (b) Additional Peanuts.— (1) In general.— Subject to paragraph (2), the Secretary shall make nonrecourse loans available to producers of additional peanuts at such rates as the Secretary finds appropriate, taking into consideration the demand for peanut oil and peanut meal, expected prices of other vegetable oils and protein meals, and the demand for peanuts in foreign markets. (2) Limitation.— The Secretary shall establish the support rate on additional peanuts at a level estimated by the Secretary to ensure that there are no losses to the Commodity Credit Corporation on the sale or disposal of the peanuts. (3) Announcement.— The Secretary shall announce the loan rate for additional peanuts of each crop not later than February 15 preceding the marketing year for the crop for which the loan rate is being determined. (c) Area Marketing Associations.— (1) Warehouse storage loans.— (A) In general.— In carrying out subsections (a) and (b), the Secretary shall make warehouse storage loans available in each of the producing areas (described in section 1446.95 of title 7 of the Code of Federal Regulations (January 1, 1989)) to a designated area marketing association of peanut producers that is selected and approved by the Secretary and that is operated primarily for the purpose of conducting the loan activities. The Secretary may not make warehouse storage loans available to any cooperative that is engaged in operations or activities concerning peanuts other than those operations and activities specified in this section and section 358e of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a). (B) Administrative and supervisory activities.— An area marketing association shall be used in administrative and supervisory activities relating to loans and marketing activities under this section and section 358e of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a). (C) Association costs.— Loans made to the association under this paragraph shall include such costs as the area marketing association reasonably may incur in carrying out the responsibilities, operations, and activities of the association under this section and section 358e of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359a). (2) Pools for quota and additional peanuts.— (A) In general.— The Secretary shall require that each area marketing association establish pools and maintain complete and accurate records by area and segregation for quota peanuts handled under loan and for additional peanuts placed under loan, except that separate pools shall be established for Valencia peanuts produced in New Mexico. (B) Eligibility to participate in new Mexico pools.— 110 STAT. 924 (i) In general.— Except as provided in clause (ii), in the case of the 1996 and subsequent crops, Valencia peanuts not physically produced in the State of New Mexico shall not be eligible to participate in the pools of the State. (ii) Exception.— A producer of Valencia peanuts may enter Valencia peanuts that are produced in Texas into the pools of New Mexico in a quantity not greater than the average annual quantity of the peanuts that the producer entered into the New Mexico pools for the 1990 through 1995 crops. (C) Types of peanuts.— Bright hull and dark hull Valencia peanuts shall be considered as separate types for the purpose of establishing the pools. (D) Net gains.— Net gains on peanuts in each pool, unless otherwise approved by the Secretary, shall be distributed only to producers who placed peanuts in the pool and shall be distributed in proportion to the value of the peanuts placed in the pool by each producer. Net gains for peanuts in each pool shall consist of the following: (i) Quota peanuts.— For quota peanuts, the net gains over and above the loan indebtedness and other costs or losses incurred on peanuts placed in the pool. (ii) Additional peanuts.— For additional peanuts, the net gains over and above the loan indebtedness and other costs or losses incurred on peanuts placed in the pool for additional peanuts. (d) Losses.— Losses in quota area pools shall be covered using the following sources in the following order of priority: (1) Transfers from additional loan pools.— The proceeds due any producer from any pool shall be reduced by the amount of any loss that is incurred with respect to peanuts transferred from an additional loan pool to a quota loan pool by the producer under section 358–1(b)(8) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(b)(8)). (2) Producers in same pool.— Further losses in an area quota pool shall be offset by reducing the gain of any producer in the pool by the amount of pool gains attributed to the same producer from the sale of additional peanuts for domestic and edible export use. (3) Offset within area.— Further losses in an area quota pool shall be offset by any gains or profits from additional peanuts (other than separate type pools established under subsection (c)(2)(A) for Valencia peanuts produced in New Mexico) owned or controlled by the Commodity Credit Corporation in that area and sold for domestic edible use, in accordance with regulations issued by the Secretary. This paragraph shall not apply to profits or gains from a farm with 1 acre or less of peanut production. (4) First use of marketing assessments.— The Secretary shall use funds collected under subsection (g) (except funds attributable to handlers) to offset further losses in area quota pools. The Secretary shall transfer to the Treasury those funds collected under subsection (g) and available for use under this paragraph that the Secretary determines are not required to cover losses in area quota pools. 110 STAT. 925 (5) Cross compliance.— Further losses in area quota pools, other than losses incurred as a result of transfers from additional loan pools to quota loan pools under section 358–1(b)(8) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(b)(8)), shall be offset by any gains or profits from quota pools in other production areas (other than separate type pools established under subsection (c)(2)(A) for Valencia peanuts produced in New Mexico) in such manner as the Secretary shall by regulation prescribe. (6) Offset generally.— If losses in an area quota pool have not been entirely offset under the preceding paragraphs, further losses shall be offset by any gains or profits from additional peanuts (other than separate type pools established under subsection (c)(2)(A) for Valencia peanuts produced in New Mexico) owned or controlled by the Commodity Credit Corporation and sold for domestic edible use, in accordance with regulations issued by the Secretary. This paragraph shall not apply to profits or gains from a farm with 1 acre or less of peanut production. (7) Second use of marketing assessments.— The Secretary shall use funds collected under subsection (g) and attributable to handlers to offset further losses in area quota pools. The Secretary shall transfer to the Treasury those funds collected under subsection (g) and available for use under this paragraph that the Secretary determines are not required to cover losses in area quota pools. (8) Increased assessments.— If use of the authorities provided in the preceding paragraphs is not sufficient to cover losses in an area quota pool, the Secretary shall increase the marketing assessment for producers established under subsection (g) by such an amount as the Secretary considers necessary to cover the losses. The increased assessment shall apply only to quota peanuts in the production area covered by the pool. Amounts collected under subsection (g) as a result of the increased assessment shall be retained by the Secretary to cover losses in that pool. (e) Disapproval of Quotas.— Notwithstanding any other provision of law, no loan for quota peanuts may be made available by the Secretary for any crop of peanuts with respect to which poundage quotas have been disapproved by producers, as provided for in section 358–1(d) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(d)). (f) Quality Improvement.— (1) In general.— With respect to peanuts under loan, the Secretary shall— (A) promote the crushing of peanuts at a greater risk of deterioration before peanuts of a lesser risk of deterioration; (B) ensure that all Commodity Credit Corporation inventories of peanuts sold for domestic edible use must be shown to have been officially inspected by licensed Department inspectors both as farmer stock and shelled or cleaned in-shell peanuts; (C) continue to endeavor to operate the peanut program so as to improve the quality of domestic peanuts and ensure the coordination of activities under the Peanut Administrative Committee established under Marketing Agreement 110 STAT. 926No. 146, regulating the quality of domestically produced peanuts (under the Agricultural Adjustment Act (7 U.S.C. 601 et seq.), reenacted with amendments by the Agricultural Marketing Agreement Act of 1937); and (D) ensure that any changes made in the peanut program as a result of this subsection requiring additional production or handling at the farm level shall be reflected as an upward adjustment in the Department loan schedule. (2) Exports and other peanuts.— The Secretary shall require that all peanuts in the domestic and export markets fully comply with all quality standards under Marketing Agreement No. 146. (g) Marketing Assessment.— (1) In general.— The Secretary shall provide for a non-refundable marketing assessment. The assessment shall be made on a per pound basis in an amount equal to 1.1 percent for each of the 1994 and 1995 crops, 1.15 percent for the 1996 crop, and 1.2 percent for each of the 1997 through 2002 crops, of the national average quota or additional peanut loan rate for the applicable crop. (2) First purchasers.— (A) In general.— Except as provided under paragraphs (3) and (4), the first purchaser of peanuts shall— (i) collect from the producer a marketing assessment equal to the quantity of peanuts acquired multiplied by— (I) in the case of each of the 1994 and 1995 crops, .55 percent of the applicable national average loan rate; (II) in the case of the 1996 crop, .6 percent of the applicable national average loan rate; and (III) in the case of each of the 1997 through 2002 crops, .65 percent of the applicable national average loan rate; (ii) pay, in addition to the amount collected under clause (i), a marketing assessment in an amount equal to the quantity of peanuts acquired multiplied by .55 percent of the applicable national average loan rate; and (iii) remit the amounts required under clauses (i) and (ii) to the Commodity Credit Corporation in a manner specified by the Secretary. (B) Definition of first purchaser.— In this subsection, the term “first purchaser” means a person acquiring peanuts from a producer except that in the case of peanuts forfeited by a producer to the Commodity Credit Corporation, the term means the person acquiring the peanuts from the Commodity Credit Corporation. (3) Other private marketings.— In the case of a private marketing by a producer directly to a consumer through a retail or wholesale outlet or in the case of a marketing by the producer outside of the continental United States, the producer shall be responsible for the full amount of the assessment and shall remit the assessment by such time as is specified by the Secretary. (4) Loan peanuts.— In the case of peanuts that are pledged as collateral for a loan made under this section, the producer 110 STAT. 927portion of the assessment shall be deducted from the proceeds of the loan. The remainder of the assessment shall be paid by the first purchaser of the peanuts. For purposes of computing net gains on peanuts under this section, the reduction in loan proceeds shall be treated as having been paid to the producer. (5) Penalties.— If any person fails to collect or remit the reduction required by this subsection or fails to comply with the requirements for recordkeeping or otherwise as are required by the Secretary to carry out this subsection, the person shall be liable to the Secretary for a civil penalty up to an amount determined by multiplying— (A) the quantity of peanuts involved in the violation; by (B) the national average quota peanut rate for the applicable crop year. (6) Enforcement.— The Secretary may enforce this sub section in the courts of the United States. (h) Crops.— Subsections (a) through (g) shall be effective only Effective date, for the 1996 through 2002 crops of peanuts. (i) Poundage Quotas.— (1) In general.— Part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 is amended— (A) in section 358–1 (7 U.S.C. 1358–1)— (i) in the section heading, by striking “1991 THROUGH 1997 CROPS OF”; (ii) in subsections (a)(1), (b)(1)(B), (b)(2)(A), (b)(2)(C), and (b)(3)(A), by striking “of the 1991 through 1997 marketing years” each place it appears and inserting “marketing year”; (iii) in subsection (a)(3), by striking “1990” and inserting “1990, for the 1991 through 1995 marketing years, and 1995, for the 1996 through 2002 marketing years”; (iv) in subsection (b)(1)(A)— (I) by striking “each of the 1991 through 1997 marketing years” and inserting “each marketing year”; and (II) in clause (i), by inserting before the semi colon the following: “, in the case of the 1991 through 1995 marketing years, and the 1995 marketing year, in the case of the 1996 through 2002 marketing years”; (v) in subsection (b)(1), by adding at the end the following: “(D) Certain farms ineligible for quota.— Effective beginning with the 1998 crop, the Secretary shall not establish a farm poundage quota under subparagraph (A) for a farm owned or controlled by— “(i) a municipality, airport authority, school, college, refuge, or other public entity (other than a university used for research purposes); or “(ii) a person who is not a producer and resides in another State.”; (vi) in subsection (b)(2), by adding at the end the following: “(E) Transfer of quota from ineligible farms.— Any farm poundage quota held at the end of the 1996 110 STAT. 928marketing year by a farm described in paragraph (1)(D) shall be allocated to other farms in the same State on such basis as the Secretary may by regulation prescribe.”; and (vii) in subsection (f), by striking “1997” and inserting “2002”; (B) in section 358b (7 U.S.C. 1358b)— (i) in the section heading, by striking “1991 THROUGH 1995 CROPS OF”; and (ii) in subsection (c), by striking “1995” and inserting “2002”; (C) in section 358c(d) (7 U.S.C. 1358c(d)), by striking “1995” and inserting “2002”; and (D) in section 358e (7 U.S.C. 1359a)— (i) in the section heading, by striking “FOR 1991 THROUGH 1997 CROPS OF PEANUTS”; and (ii) in subsection (i), by striking “1997” and inserting “2002”. (2) Elimination of quota floor.— Section 358–1(a)(1) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1(a)(1)) is amended by striking the second sentence. (3) Temporary quota allocation.— Section 358–1 of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358–1) is amended— (A) in subsection (a)(1), by striking “domestic edible, seed,” and inserting “domestic edible use (except seed)”; and (B) in subsection (b)(2)— (i) in subparagraph (A), by striking “subparagraph (B) and subject to”; and (ii) by striking subparagraph (B) and inserting the following: “(B) Temporary quota allocation.— “(i) Allocation related to seed peanuts.— Temporary allocation of quota pounds for the marketing year only in which the crop is planted shall be made to producers for each of the 1996 through 2002 marketing years as provided in this subparagraph. “(ii) Quantity.— The temporary quota allocation shall be equal to the pounds of seed peanuts planted on the farm, as may be adjusted and determined under regulations prescribed by the Secretary. “(iii) Additional quota.— The temporary allocation of quota pounds under this paragraph shall be in addition to the farm poundage quota otherwise established under this subsection and shall be credited, for the applicable marketing year only, in total, to the producer of the peanuts on the farm in a manner prescribed by the Secretary. “(iv) Effect of other requirements.— Nothing in this section alters or changes the requirements regarding the use of quota and additional peanuts established by section 358e(b).”. (4) Undermarketings.— Part VI of subtitle B of title III of the Agricultural Adjustment Act of 1938 is amended— (A) in section 358–1(b) (7 U.S.C. 1358–1(b))— 110 STAT. 929 (i) in paragraph (1)(B), by striking “including—” and clauses (i) and (ii) and inserting “including any increases resulting from the allocation of quotas voluntarily released for 1 year under paragraph (7).”; (ii) in paragraph (3)(B), by striking “include—” and clauses (i) and (ii) and inserting “include any increase resulting from the allocation of quotas voluntarily released for 1 year under paragraph (7).”; and (iii) by striking paragraphs (8) and (9); and (B) in section 358b(a) (7 U.S.C. 1358b(a))— (i) in paragraph (2), by striking “(including any applicable under marketings)”; and (ii) in paragraph (3), by striking “(including any applicable undermarketings)”. (5) Disaster transfers.— Section 358–1(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358- 1(b)), as amended by paragraph (4)(A)(iii), is amended by adding at the end the following: “(8) Disaster transfers.— “(A) In general.— Except as provided in subparagraph (B), additional peanuts produced on a farm from which the quota poundage was not harvested and marketed because of drought, flood, or any other natural disaster, or any other condition beyond the control of the producer, may be transferred to the quota loan pool for pricing purposes on such basis as the Secretary shall by regulation provide. “(B) Limitation.— The poundage of peanuts transferred under subparagraph (A) shall not exceed the difference between— “(i) the total quantity of peanuts meeting quality requirements for domestic edible use, as determined by the Secretary, marketed from the farm; and “(ii) the total farm poundage quota, excluding quota pounds transferred to the farm in the fall. “(C) Support rate.— Peanuts transferred under this paragraph shall be supported at 70 percent of the quota support rate for the marketing years in which the transfers occur. The transfers for a farm shall not exceed 25 percent of the total farm quota pounds, excluding pounds transferred in the fall.”. (6) Sale or lease.— Section 358b(a) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1358b(a)) is amended— (A) by striking paragraph (1) and inserting the following: “(1) Sale and lease authority.— “(A) Sale or lease within same state.— Subject to subparagraph (B) and such terms and conditions as the Secretary may prescribe, the owner, or operator with the permission of the owner, of a farm in a State for which a farm poundage quota has been established may sell or lease all or any part of the poundage quota to any other owner or operator of a farm within the same State for transfer to the farm. However, any such lease of poundage quota may be entered into in the fall or after the normal planting season— 110 STAT. 930 “(i) if not less than 90 percent of the basic quota (the farm quota and temporary quota transfers), plus any poundage quota transferred to the farm under this subsection, has been planted or considered planted on the farm from which the quota is to be leased; and “(ii) under such terms and conditions as the Secretary may by regulation prescribe. “In the case of a fall transfer or a transfer after the normal planting season by a cash lessee, the landowner shall not be required to sign the transfer authorization. A fall transfer or a transfer after the normal planting season may be made not later than 72 hours after the peanuts that are the subject of the transfer are inspected and graded. “(B) Percentage limitations on spring transfers.— Spring transfers under subparagraph (A) by sale or lease of a quota for farms in a county to any owner or operator of a farm outside the county within the same State shall not exceed the applicable percentage specified in this subparagraph of the quotas of all farms in the originating county (as of January 1, 1996) for the crop year in which the transfer is made, plus the total amount of quotas eligible for transfer from the originating county in the preceding crop year that were not transferred in that year or that were transferred through an expired lease. However, not more than an aggregate of 40 percent of the total poundage quota within a county (as of January 1, 1996) may be transferred outside of the county. Cumulative unexpired transfers outside of a county may not exceed for a crop year the following: “(i) For the 1996 crop, 15 percent. “(ii) For the 1997 crop, 25 percent. “(iii) For the 1998 crop, 30 percent. “(iv) For the 1999 crop, 35 percent. “(v) For the 2000 and subsequent crops, not more than an aggregate of 40 percent of the total poundage quota within the county as of January 1, 1996. “(C) Clarification regarding fall transfers.— The limitation in subparagraph (B) does not apply to 1-year fall transfers, which in all cases may be made to any farm in the same State. “(D) Effect of transfer.— Any farm poundage quota transferred under this paragraph shall not result in any reduction in the farm poundage quota for the transferring farm if the transferred quota is produced or considered produced on the receiving farm.”; and (B) by adding at the end the following: “(4) Transfers in counties with small quotas.— Notwithstanding paragraphs (1) and (2), in the case of any county in a State for which the poundage quota allocated to the county was less than 100,000 pounds for the preceding year’s crop, all or any part of a farm poundage quota may be transferred by sale or lease or otherwise from a farm in the county to a farm in another county in the same State.”.