FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.

SEC. 1403. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.(a) Definitions.—Section 359a of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) is amended—(1) by redesignating paragraphs (1), (2), (3), and (4) as paragraphs (2), (4), (5), and (6), respectively;(2) by inserting before paragraph (2) (as so redesignated) the following:“(1) Human consumption.—The term ‘human consumption’, when used in the context of a reference to sugar (whether in the form of sugar, in-process sugar, syrup, molasses, or in some other form) for human consumption, includes sugar for use in human food, beverages, or similar products.”; and(3) by inserting after paragraph (2) (as so redesignated) the following:“(3) Market.—“(A) In general.—The term ‘market’ means to sell or otherwise dispose of in commerce in the United States.“(B) Inclusions.—The term ‘market’ includes—122 STAT. 1710“(i) the forfeiture of sugar under the loan program for sugar established under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272);“(ii) with respect to any integrated processor and refiner, the movement of raw cane sugar into the refining process; and“(iii) the sale of sugar for the production of ethanol or other bioenergy product, if the disposition of the sugar is administered by the Secretary under section 9010 of the Farm Security and Rural Investment Act of 2002.“(C) Marketing year.—Forfeited sugar described in subparagraph (B)(i) shall be considered to have been marketed during the crop year for which a loan is made under the loan program described in that subparagraph.”.(b) Flexible Marketing Allotments for Sugar.—Section 359b of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359bb) is amended to read as follows:“SEC. 359b. FLEXIBLE MARKETING ALLOTMENTS FOR SUGAR.“(a) Sugar Estimates.—“(1) In general.—Not later than August 1 before the beginning of each of the 2008 through 2012 crop years for sugarcane and sugar beets, the Secretary shall estimate—“(A) the quantity of sugar that will be subject to human consumption in the United States during the crop year;“(B) the quantity of sugar that would provide for reasonable carryover stocks;“(C) the quantity of sugar that will be available from carry-in stocks for human consumption in the United States during the crop year;“(D) the quantity of sugar that will be available from the domestic processing of sugarcane, sugar beets, and in-process beet sugar; and“(E) the quantity of sugars, syrups, and molasses that will be imported for human consumption or to be used for the extraction of sugar for human consumption in the United States during the crop year, whether the articles are under a tariff-rate quota or are in excess or outside of a tariff-rate quota.“(2) Exclusion.—The estimates under this subsection shall not apply to sugar imported for the production of polyhydric alcohol or to any sugar refined and reexported in refined form or in products containing sugar.“(3) Reestimates.—The Secretary shall make reestimates of sugar consumption, stocks, production, and imports for a crop year as necessary, but not later than the beginning of each of the second through fourth quarters of the crop year.“(b) Sugar Allotments.—“(1) Establishment.—By the beginning of each crop year, the Secretary shall establish for that crop year appropriate allotments under section 359c for the marketing by processors of sugar processed from sugar cane or sugar beets or in-process beet sugar (whether the sugar beets or in-process beet sugar was produced domestically or imported) at a level that is—122 STAT. 1711“(A) sufficient to maintain raw and refined sugar prices above forfeiture levels so that there will be no forfeitures of sugar to the Commodity Credit Corporation under the loan program for sugar established under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272); but“(B) not less than 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.“(2) Products.—The Secretary may include sugar products, the majority content of which is sucrose for human consumption, derived from sugar cane, sugar beets, molasses, or sugar in the allotments established under paragraph (1) if the Secretary determines it to be appropriate for purposes of this part.“(c) Coverage of Allotments.—“(1) In general.—The marketing allotments under this part shall apply to the marketing by processors of sugar intended for domestic human consumption that has been processed from sugar cane, sugar beets, or in-process beet sugar, whether such sugar beets or in-process beet sugar was produced domestically or imported.“(2) Exceptions.—Consistent with the administration of marketing allotments for each of the 2002 through 2007 crop years, the marketing allotments shall not apply to sugar sold—“(A) to facilitate the exportation of the sugar to a foreign country, except that the exports of sugar shall not be eligible to receive credits under reexport programs for refined sugar or sugar containing products administered by the Secretary;“(B) to enable another processor to fulfill an allocation established for that processor; or“(C) for uses other than domestic human consumption, except for the sale of sugar for the production of ethanol or other bioenergy if the disposition of the sugar is administered by the Secretary under section 9010 of the Farm Security and Rural Investment Act of 2002.“(3) Requirement.—The sale of sugar described in paragraph (2)(B) shall be—“(A) made prior to May 1; and“(B) reported to the Secretary.“(d) Prohibitions.—“(1) In general.—During all or part of any crop year for which marketing allotments have been established, no processor of sugar beets or sugarcane shall market for domestic human consumption a quantity of sugar in excess of the allocation established for the processor, except—“(A) to enable another processor to fulfill an allocation established for that other processor; or“(B) to facilitate the exportation of the sugar.“(2) Civil penalty.—Any processor who knowingly violates paragraph (1) shall be liable to the Commodity Credit Corporation for a civil penalty in an amount equal to 3 times the United States market value, at the time of the commission of the violation, of that quantity of sugar involved in the violation.” .122 STAT. 1712(c) Establishment of Flexible Marketing Allotments.—Section 359c of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359cc) is amended—(1) by striking subsection (b) and inserting the following:“(b) Overall Allotment Quantity.—“(1) In general.—The Secretary shall establish the overall quantity of sugar to be allotted for the crop year (referred to in this part as the ‘overall allotment quantity’) at a level that is—“(A) sufficient to maintain raw and refined sugar prices above forfeiture levels to avoid forfeiture of sugar to the Commodity Credit Corporation; but“(B) not less than a quantity equal to 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.“(2) Adjustment.—Subject to paragraph (1), the Secretary shall adjust the overall allotment quantity to maintain—“(A) raw and refined sugar prices above forfeiture levels to avoid the forfeiture of sugar to the Commodity Credit Corporation; and“(B) adequate supplies of raw and refined sugar in the domestic market.”;(2) in subsection (d)(2), by inserting “or in-process beet sugar” before the period at the end;(3) in subsection (g)(1)—(A) by striking “(1) in general.—The Secretary” and inserting the following:“(1) Adjustments.—“(A) In general.—Subject to subparagraph (B), the Secretary”; and(B) by adding at the end the following:“(B) Limitation.—In carrying out subparagraph (A), the Secretary may not reduce the overall allotment quantity to a quantity of less than 85 percent of the estimated quantity of sugar for domestic human consumption for the crop year.”; and(4) by striking subsection (h).(d) Allocation of Marketing Allotments.—Section 359d(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359dd(b)) is amended—(1) in paragraph (1)(F), by striking “Except as otherwise provided in section 359f(c)(8), if” and inserting “If”; and(2) in paragraph (2), by striking subparagraphs (G), (H), and (I) and inserting the following:“(G) Sale of factories of a processor to another processor.—“(i) Effect of sale.—Subject to subparagraphs (E) and (F), if 1 or more factories of a processor of beet sugar (but not all of the assets of the processor) are sold to another processor of beet sugar during a crop year, the Secretary shall assign a pro rata portion of the allocation of the seller to the allocation of the buyer to reflect the historical contribution of the production of the sold 1 or more factories to the total allocation of the seller, unless the buyer and the seller have agreed upon the transfer of a different portion of the allocation of the seller, in which case, 122 STAT. 1713 the Secretary shall transfer that portion agreed upon by the buyer and seller.“(ii) Application of allocation.—The assignment of the allocation under clause (i) shall apply—“(I) during the remainder of the crop year for which the sale described in clause (i) occurs; and“(II) during each subsequent crop year.“(iii) Use of other factories to fill allocation.—If the assignment of the allocation under clause (i) to the buyer for the 1 or more purchased factories cannot be filled by the production of the 1 or more purchased factories, the remainder of the allocation may be filled by beet sugar produced by the buyer from other factories of the buyer.“(H) New entrants starting production, reopening, or acquiring an existing factory with production history.—“(i) Definition of new entrant.—“(I) In general.—In this subparagraph, the term ‘new entrant’ means an individual, corporation, or other entity that—“(aa) does not have an allocation of the beet sugar allotment under this part;“(bb) is not affiliated with any other individual, corporation, or entity that has an allocation of beet sugar under this part (referred to in this clause as a ‘third party’); and“(cc) will process sugar beets produced by sugar beet growers under contract with the new entrant for the production of sugar at the new or re-opened factory that is the basis for the new entrant allocation.“(II) Affiliation.—For purposes of subclause (I)(bb), a new entrant and a third party shall be considered to be affiliated if—“(aa) the third party has an ownership interest in the new entrant;“(bb) the new entrant and the third party have owners in common;“(cc) the third party has the ability to exercise control over the new entrant by organizational rights, contractual rights, or any other means;“(dd) the third party has a contractual relationship with the new entrant by which the new entrant will make use of the facilities or assets of the third party; or“(ee) there are any other similar circumstances by which the Secretary determines that the new entrant and the third party are affiliated.“(ii) Allocation for a new entrant that has constructed a new factory or reopened a factory that was not operated since before 1998.—If a new entrant constructs a new sugar beet processing factory, 122 STAT. 1714 or acquires and reopens a sugar beet processing factory that last processed sugar beets prior to the 1998 crop year and there is no allocation currently associated with the factory, the Secretary shall—“(I) assign an allocation for beet sugar to the new entrant that provides a fair and equitable distribution of the allocations for beet sugar so as to enable the new entrant to achieve a factory utilization rate comparable to the factory utilization rates of other similarly-situated processors; and“(II) reduce the allocations for beet sugar of all other processors on a pro rata basis to reflect the allocation to the new entrant.“(iii) Allocation for a new entrant that has acquired an existing factory with a production history.—“(I) In general.—If a new entrant acquires an existing factory that has processed sugar beets from the 1998 or subsequent crop year and has a production history, on the mutual agreement of the new entrant and the company currently holding the allocation associated with the factory, the Secretary shall transfer to the new entrant a portion of the allocation of the current allocation holder to reflect the historical contribution of the production of the 1 or more sold factories to the total allocation of the current allocation holder, unless the new entrant and current allocation holder have agreed upon the transfer of a different portion of the allocation of the current allocation holder, in which case, the Secretary shall transfer that portion agreed upon by the new entrant and the current allocation holder.“(II) Prohibition.—In the absence of a mutual agreement described in subclause (I), the new entrant shall be ineligible for a beet sugar allocation.“(iv) Appeals.—Any decision made under this subsection may be appealed to the Secretary in accordance with section 359i.”.(e) Reassignment of Deficits.—Section 359e(b) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ee(b)) is amended in paragraphs (1)(D) and (2)(C), by inserting “of raw cane sugar” after “imports” each place it appears.(f) Provisions Applicable to Producers.—Section 359f(c) of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ff(c)) is amended—(1) by striking paragraph (8);(2) by redesignating paragraphs (1) through (7) as paragraphs (2) through (8), respectively;(3) by inserting before paragraph (2) (as so redesignated) the following:“(1) Definition of seed.—“(A) In general.—In this subsection, the term ‘seed’ means only those varieties of seed that are dedicated to 122 STAT. 1715 the production of sugarcane from which is produced sugar for human consumption.“(B) Exclusion.—The term ‘seed’ does not include seed of a high-fiber cane variety dedicated to other uses, as determined by the Secretary”;(4) in paragraph (3) (as so redesignated)—(A) in the first sentence—(i) by striking “paragraph (1)” and inserting “paragraph (2)”; and(ii) by inserting “sugar produced from” after “quantity of”; and(B) in the second sentence, by striking “paragraph (7)” and inserting “paragraph (8)”;(5) in the first sentence of paragraph (6)(C) (as so redesignated), by inserting “for sugar” before “in excess of the farm’s proportionate share”; and(6) in paragraph (8) (as so redesignated), by inserting “sugar from” after “the amount of”.(g) Special Rules.—Section 359g of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359gg) is amended—(1) by striking subsection (a) and inserting the following:“(a) Transfer of Acreage Base History.—“(1) Transfer authorized.—For the purpose of establishing proportionate shares for sugarcane farms under section 359f(c), the Secretary, on application of any producer, with the written consent of all owners of a farm, may transfer the acreage base history of the farm to any other parcels of land of the applicant.“(2) Converted acreage base.—“(A) In general.—Sugarcane acreage base established under section 359f(c) that has been or is converted to nonagricultural use on or after May 13, 2002, may be transferred to other land suitable for the production of sugarcane that can be delivered to a processor in a proportionate share State in accordance with this paragraph.“(B) Notification.—Not later than 90 days after the Secretary becomes aware of a conversion of any sugarcane acreage base to a nonagricultural use, the Secretary shall notify the 1 or more affected landowners of the transferability of the applicable sugarcane acreage base.“(C) Initial transfer period.—The owner of the base attributable to the acreage at the time of the conversion shall be afforded 90 days from the date of the receipt of the notification under subparagraph (B) to transfer the base to 1 or more farms owned by the owner.“(D) Grower of record.—If a transfer under subparagraph (C) cannot be accomplished during the period specified in that subparagraph, the grower of record with regard to the acreage base on the date on which the acreage was converted to nonagricultural use shall—“(i) be notified; and“(ii) have 90 days from the date of the receipt of the notification to transfer the base to 1 or more farms operated by the grower.“(E) Pool distribution.—“(i) In general.—If transfers under subparagraphs (B) and (C) cannot be accomplished during the 122 STAT. 1716 periods specified in those subparagraphs, the county committee of the Farm Service Agency for the applicable county shall place the acreage base in a pool for possible assignment to other farms.“(ii) Acceptance of requests.—After providing reasonable notice to farm owners, operators, and growers of record in the county, the county committee shall accept requests from owners, operators, and growers of record in the county.“(iii) Assignment.—The county committee shall assign the acreage base to other farms in the county that are eligible and capable of accepting the acreage base, based on a random drawing from among the requests received under clause (ii).“(F) Statewide reallocation.—“(i) In general.—Any acreage base remaining unassigned after the transfers and processes described in subparagraphs (A) through (E) shall be made available to the State committee of the Farm Service Agency for allocation among the remaining county committees in the State representing counties with farms eligible for assignment of the base, based on a random drawing.“(ii) Allocation.—Any county committee receiving acreage base under this subparagraph shall allocate the acreage base to eligible farms using the process described in subparagraph (E).“(G) Status of reassigned base.—After acreage base has been reassigned in accordance with this subparagraph, the acreage base shall—“(i) remain on the farm; and“(ii) be subject to the transfer provisions of paragraph (1).”; and(2) in subsection (d)—(A) in paragraph (1)—(i) by inserting “affected” before “crop-share owners” each place it appears; and(ii) by striking “, and from the processing company holding the applicable allocation for such shares,”; and(B) in paragraph (2), by striking “based on” and all that follows through the end of subparagraph (B) and inserting “based on—“(A) the number of acres of sugarcane base being transferred; and“(B) the pro rata amount of allocation at the processing company holding the applicable allocation that equals the contribution of the grower to allocation of the processing company for the sugarcane acreage base being transferred.”.(h) Appeals.—Section 359i of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359ii) is amended—(1) in subsection (a), by inserting “or 359g(d)” after “359f”; and(2) by striking subsection (c).(i) Reallocating Sugar Quota Import Shortfalls.—Section 359k of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359kk) is repealed.122 STAT. 1717(j) Administration of Tariff Rate Quotas.—Part VII of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) (as amended by subsection (i)) is amended by adding at the end the following:“SEC. 359k. ADMINISTRATION OF TARIFF RATE QUOTAS.“(a) Establishment.—“(1) In general.—Except as provided in paragraph (2) and notwithstanding any other provision of law, at the beginning of the quota year, the Secretary shall establish the tariff-rate quotas for raw cane sugar and refined sugars at the minimum level necessary to comply with obligations under international trade agreements that have been approved by Congress.“(2) Exception.—Paragraph (1) shall not apply to specialty sugar.“(b) Adjustment.—“(1) Before april 1.—Before April 1 of each fiscal year, if there is an emergency shortage of sugar in the United States market that is caused by a war, flood, hurricane, or other natural disaster, or other similar event as determined by the Secretary—“(A) the Secretary shall take action to increase the supply of sugar in accordance with sections 359c(b)(2) and 359e(b), including an increase in the tariff-rate quota for raw cane sugar to accommodate the reassignment to imports; and“(B) if there is still a shortage of sugar in the United States market, and marketing of domestic sugar has been maximized, and domestic raw cane sugar refining capacity has been maximized, the Secretary may increase the tariff-rate quota for refined sugars sufficient to accommodate the supply increase, if the further increase will not threaten to result in the forfeiture of sugar pledged as collateral for a loan under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272).“(2) On or after april 1.—On or after April 1 of each fiscal year—“(A) the Secretary may take action to increase the supply of sugar in accordance with sections 359c(b)(2) and 359e(b), including an increase in the tariff-rate quota for raw cane sugar to accommodate the reassignment to imports; and“(B) if there is still a shortage of sugar in the United States market, and marketing of domestic sugar has been maximized, the Secretary may increase the tariff-rate quota for raw cane sugar if the further increase will not threaten to result in the forfeiture of sugar pledged as collateral for a loan under section 156 of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7272).” .(k) Period of Effectiveness.—Part VII of subtitle B of title III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1359aa) (as amended by subsection (j)) is amended by adding at the end the following:“SEC. 359l. PERIOD OF EFFECTIVENESS.“(a) In General.—This part shall be effective only for the 2008 through 2012 crop years for sugar.122 STAT. 1718“(b) Transition.—The Secretary shall administer flexible marketing allotments for sugar for the 2007 crop year for sugar on the terms and conditions provided in this part as in effect on the day before the date of enactment of this section.” .