SUGAR PROGRAM.

SEC. 1401. SUGAR PROGRAM. (a) Extension and Modification of Existing Sugar Program.—Section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272) is amended to read as follows: “SEC. 156. SUGAR PROGRAM. “(a) Sugarcane.—The Secretary shall make loans available to processors of domestically grown sugarcane at a rate equal to 18 cents per pound for raw cane sugar. “(b) Sugar Beets.—The Secretary shall make loans available to processors of domestically grown sugar beets at a rate equal to 22.9 cents per pound for refined beet sugar. “(c) Loan Rate Adjustments.— “(1) In general.—The Secretary may reduce the loan rate specified in subsection (a) for domestically grown sugarcane and subsection (b) for domestically grown sugar beets if the Secretary determines that negotiated reductions in export subsidies and domestic subsidies provided for sugar of other major sugar growing, producing, and exporting countries in the aggregate exceed the commitments made as part of the Agreement on Agriculture. “(2) Extent of reduction.—The Secretary shall not reduce the loan rate under subsection (a) or (b) below a rate that provides an equal measure of support to that provided by other major sugar growing, producing, and exporting countries, based on an examination of both domestic and export subsidies subject to reduction in the Agreement on Agriculture. “(3) Announcement of reduction.—The Secretary shall announce any loan rate reduction to be made under this subsection as far in advance as is practicable. “(4) Definitions.—In this subsection: “(A) Agreement on agriculture.—The term “Agreement on Agriculture” means the Agreement on Agriculture referred to in section 101(d)(2) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(2)), or any amendatory or successor agreement. “(B) Major sugar countries.—The term “major sugar growing, producing, and exporting countries” means— “(i) the countries of the European Union; and “(ii) the 10 foreign countries not covered by subparagraph (A) that the Secretary determines produce the greatest quantity of sugar. “(d) Term of Loans.—116 STAT. 184 “(1) In general.—A loan under this section during any fiscal year shall be made available not earlier than the beginning of the fiscal year and shall mature at the earlier of— “(A) the end of the 9-month period beginning on the first day of the first month after the month in which the loan is made; or “(B) the end of the fiscal year in which the loan is made. “(2) Supplemental loans.—In the case of a loan made under this section in the last 3 months of a fiscal year, the processor may repledge the sugar as collateral for a second loan in the subsequent fiscal year, except that the second loan shall— “(A) be made at the loan rate in effect at the time the second loan is made; and “(B) mature in 9 months less the quantity of time that the first loan was in effect. “(e) Loan Type; Processor Assurances.— “(1) Nonrecourse loans.—The Secretary shall carry out this section through the use of nonrecourse loans. “(2) Processor assurances.— “(A) In general.—The Secretary shall obtain from each processor that receives a loan under this section such assurances as the Secretary considers adequate to ensure that the processor will provide payments to producers that are proportional to the value of the loan received by the processor for the sugar beets and sugarcane delivered by producers to the processor. “(B) Minimum payments.— “(i) In general.—Subject to clause (ii), the Secretary may establish appropriate minimum payments for purposes of this paragraph. “(ii) Limitation.—In the case of sugar beets, the minimum payment established under clause (i) shall not exceed the rate of payment provided for under the applicable contract between a sugar beet producer and a sugar beet processor. “(iii) Effect of disaster.—The Secretary may not bar a beet sugar processor from eligibility to obtain a loan under this section because of the failure of the processor to provide the appropriate minimum payment established under this subsection if the failure— “(I) occurred during a crop year prior to the date of enactment of the Farm Security and Rural Investment Act of 2002; and “(II) was related, at least in part, to the effects of a natural disaster, including damage from freeze. “(3) Administration.—The Secretary may not impose or enforce any prenotification requirement, or similar administrative requirement not otherwise in effect on the date of enactment of the Farm Security and Rural Investment Act of 2002, that has the effect of preventing a processor from electing to forfeit the loan collateral (of an acceptable grade and quality) on the maturity of the loan. “(f) Loans for In-Process Sugar.—116 STAT. 185 “(1) Definition of in-process sugars and syrups.—In this subsection, the term ‘in-process sugars and syrups’ does not include raw sugar, liquid sugar, invert sugar, invert syrup, or other finished product that is otherwise eligible for a loan under subsection (a) or (b). “(2) Availability.—The Secretary shall make nonrecourse loans available to processors of a crop of domestically grown sugarcane and sugar beets for in-process sugars and syrups derived from the crop. “(3) Loan rate.—The loan rate shall be equal to 80 percent of the loan rate applicable to raw cane sugar or refined beet sugar, as determined by the Secretary on the basis of the source material for the in-process sugars and syrups. “(4) Further processing on forfeiture.— “(A) In general.—As a condition of the forfeiture of in-process sugars and syrups serving as collateral for a loan under paragraph (2), the processor shall, within such reasonable time period as the Secretary may prescribe and at no cost to the Commodity Credit Corporation, convert the in-process sugars and syrups into raw cane sugar or refined beet sugar of acceptable grade and quality for sugars eligible for loans under subsection (a) or (b). “(B) Transfer to corporation.—Once the in-process sugars and syrups are fully processed into raw cane sugar or refined beet sugar, the processor shall transfer the sugar to the Commodity Credit Corporation. “(C) Payment to processor.—On transfer of the sugar, the Secretary shall make a payment to the processor in an amount equal to the amount obtained by multiplying— “(i) the difference between— “(I) the loan rate for raw cane sugar or refined beet sugar, as appropriate; and “(II) the loan rate the processor received under paragraph (3); by “(ii) the quantity of sugar transferred to the Secretary. “(5) Loan conversion.—If the processor does not forfeit the collateral as described in paragraph (4), but instead further processes the in-process sugars and syrups into raw cane sugar or refined beet sugar and repays the loan on the in-process sugars and syrups, the processor may obtain a loan under subsection (a) or (b) for the raw cane sugar or refined beet sugar, as appropriate. “(6) Term of loan.—The term of a loan made under this subsection for a quantity of in-process sugars and syrups, when combined with the term of a loan made with respect to the raw cane sugar or refined beet sugar derived from the inprocess sugars and syrups, may not exceed 9 months, consistent with subsection (d). “(g) Avoiding Forfeitures; Corporation Inventory Disposition.— “(1) In general.—Subject to subsection (e)(3), to the maximum extent practicable, the Secretary shall operate the program established under this section at no cost to the Federal Government by avoiding the forfeiture of sugar to the Commodity Credit Corporation.116 STAT. 186 “(2) Inventory disposition.— “(A) In general.—To carry out paragraph (1), the Commodity Credit Corporation may accept bids to obtain raw cane sugar or refined beet sugar in the inventory of the Commodity Credit Corporation from (or otherwise make available such commodities, on appropriate terms and conditions, to) processors of sugarcane and processors of sugar beets (acting in conjunction with the producers of the sugarcane or sugar beets processed by the processors) in return for the reduction of production of raw cane sugar or refined beet sugar, as appropriate. “(B) Additional authority.—The authority provided under this paragraph is in addition to any authority of the Commodity Credit Corporation under any other law. “(h) Information Reporting.— “(1) Duty of processors and refiners to report.—A sugarcane processor, cane sugar refiner, and sugar beet processor shall furnish the Secretary, on a monthly basis, such information as the Secretary may require to administer sugar programs, including the quantity of purchases of sugarcane, sugar beets, and sugar, and production, importation, distribution, and stock levels of sugar. “(2) Duty of producers to report.— “(A) Proportionate share states.—As a condition of a loan made to a processor for the benefit of a producer, the Secretary shall require each producer of sugarcane located in a State (other than the Commonwealth of Puerto Rico) in which there are in excess of 250 producers of sugarcane to report, in the manner prescribed by the Secretary, the sugarcane yields and acres planted to sugarcane of the producer. “(B) Other states.—The Secretary may require each producer of sugarcane or sugar beets not covered by subparagraph (A) to report, in a manner prescribed by the Secretary, the yields of, and acres planted to, sugarcane or sugar beets, respectively, of the producer. “(3) Duty of importers to report.— “(A) In general.—Except as provided in subparagraph (B), the Secretary shall require an importer of sugars, syrups, or molasses to be used for human consumption or to be used for the extraction of sugar for human consumption to report, in the manner prescribed by the Secretary, the quantities of the products imported by the importer and the sugar content or equivalent of the products. “(B) Tariff-rate quotas.—Subparagraph (A) shall not apply to sugars, syrups, or molasses that are within the quantities of tariff-rate quotas that are subject to the lower rate of duties. “(4) Penalty.—Any person willfully failing or refusing to furnish the information, or furnishing willfully any false information, shall be subject to a civil penalty of not more than $10,000 for each such violation. “(5) Monthly reports.—Taking into consideration the information received under this subsection, the Secretary shall publish on a monthly basis composite data on production, imports, distribution, and stock levels of sugar.116 STAT. 187 “(i) Substitution of Refined Sugar.—For purposes of Additional U.S. Note 6 to chapter 17 of the Harmonized Tariff Schedule of the United States and the reexport programs and poly hydric alcohol program administered by the Secretary, all refined sugars (whether derived from sugar beets or sugarcane) produced by cane sugar refineries and beet sugar processors shall be fully substitutable for the export of sugar and sugar-containing products under those programs. “(j) Effective Period.—This section shall be effective only for the 1996 through 2007 crops of sugar beets and sugarcane”. (b) Effective Date of Assessment Termination.—Subsection (f) of section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272(f)), as in effect immediately before the enactment of the Farm Security and Rural Investment Act of 2002, is deemed to have been repealed effective as of October 1, 2001. (c) Interest Rate.—Section 163 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7283) is amended— (1) by inserting “(a) In General.—” before “Notwithstanding”; and (2) by adding at the end the following: “(b) Sugar.—For purposes of this section, raw cane sugar, refined beet sugar, and in-process sugar eligible for a loan under section 156 shall not be considered an agricultural commodity.”.