7 U.S.C. § 7212 — Elements of contracts

Page 1972 TITLE 7—AGRICULTURE § 7212 (d) Eligible cropland described Land shall be considered to be cropland eligi- ble for coverage under a contract only if the land has contract acreage attributable to the land and— (1) for at least 1 of the 1991 through 1995 crops, at least a portion of the land was en- rolled in the acreage reduction program au- thorized for a crop of a contract commodity under section 101B, 103B, 105B, or 107B of the Agricultural Act of 1949 or was considered planted; (2) was subject to a conservation reserve contract under section 1231 of the Food Secu- rity Act of 1985 (16 U.S.C. 3831) whose term ex- pired, or was voluntarily terminated, on or after January 1, 1995; or (3) is released from coverage under a con- servation reserve contract by the Secretary during the period beginning on January 1, 1995, and ending on the date specified in section 7212(a)(2) of this title. (e) Quantity of eligible cropland covered by con- tract Subject to subsection (b)(4), an owner or pro- ducer may enroll as contract acreage all or a portion of the eligible cropland on the farm. (f) Voluntary reduction in contract acreage Subject to subsection (b)(4), an owner or pro- ducer who enters into a contract may subse- quently reduce the quantity of contract acreage covered by the contract. (Pub. L. 104–127, title I, § 111, Apr. 4, 1996, 110 Stat. 898.) Editorial Notes REFERENCES IN TEXT The Food Security Act of 1985, referred to in subsec. (a)(1), (2), is Pub. L. 99–198, Dec. 23, 1985, 99 Stat. 1354. Subtitles B and C of title XII of the Act are classified generally to subchapters II (§ 3811 et seq.) and III (§ 3821 et seq.), respectively, of chapter 58 of Title 16, Con- servation. For complete classification of this Act to the Code, see Short Title of 1985 Amendment note set out under section 1281 of this title and Tables. This subchapter, referred to in subsec. (c), was in the original ‘‘this subtitle’’, meaning subtitle B (§§ 111–118) of title I of Pub. L. 104–127, Apr. 4, 1996, 110 Stat. 898, which enacted this subchapter and amended sections 1308, 1308–1, and 1308–3 of this title. For complete classi- fication of subtitle B to the Code, see Tables. Sections 101B, 103B, 105B, and 107B of the Agricultural Act of 1949, referred to in subsec. (d)(1), were classified to sections 1441–2, 1444–2, 1444f, and 1445b–3a, respec- tively, of this title prior to repeal by section 7301(b)(2)(A)–(D) of this title. Statutory Notes and Related Subsidiaries VIOLATION OF CONTRACT; DENIAL OF FUNDS FOR SALARIES Pub. L. 104–180, title VII, § 726, Aug. 6, 1996, 110 Stat. 1600, provided that: ‘‘None of the funds made available in this Act [see Tables for classification] may be used to pay the salaries of employees of the Department of Agriculture who make payments pursuant to a produc- tion flexibility contract entered into under section 111 of the Federal Agriculture Improvement and Reform Act of 1996 (Public Law 104–127; 7 U.S.C. 7211) when it is made known to the Federal official having authority to obligate or expend such funds that the land covered by that production flexibility contract is not being used for the production of an agricultural commodity or is not devoted to a conserving use, unless it is also made known to that Federal official that the lack of agricul- tural production or the lack of a conserving use is a consequence of drought, flood, or other natural dis- aster.’’ § 7212. Elements of contracts (a) Time for contracting (1) Commencement To the extent practicable, the Secretary shall commence entering into contracts not later than 45 days after April 4, 1996. (2) Deadline Except as provided in paragraph (3), the Sec- retary may not enter into a contract after Au- gust 1, 1996. (3) Conservation reserve lands (A) In general At the beginning of each fiscal year, the Secretary shall allow an eligible owner or producer on a farm covered by a conserva- tion reserve contract entered into under sec- tion 3831 of title 16 that terminates after the date specified in paragraph (2) to enter into or expand a production flexibility contract to cover the contract acreage of the farm that was subject to the former conservation reserve contract. (B) Amount Contract payments made for contract acreage under this paragraph shall be made at the rate and amount applicable to the an- nual contract payment level for the applica- ble crop. For the fiscal year in which the conservation reserve contract is terminated, the owner or producer subject to the produc- tion flexibility contract may elect to receive either contract payments or a prorated pay- ment under the conservation reserve con- tract, but not both. (b) Duration of contract (1) Beginning date The term of a contract shall begin with— (A) the 1996 crop of a contract commodity; or (B) in the case of acreage that was subject to a conservation reserve contract described in subsection (a)(3), the date the production flexibility contract was entered into or ex- panded to cover the acreage. (2) Ending date The term of a contract shall extend through the 2002 crop, unless earlier terminated by the owner or producer. (c) Estimation of contract payments At the time the Secretary enters into a con- tract, the Secretary shall provide an estimate of the minimum contract payments anticipated to be made during at least the first fiscal year for which contract payments will be made. (d) Time for payment (1) In general An annual contract payment shall be made not later than September 30 of each of fiscal years 1996 through 2002. Page 1973 TITLE 7—AGRICULTURE § 7213 1 See References in text note below. (2) Advance payments (A) Fiscal year 1996 At the option of the owner or producer, 50 percent of the contract payment for fiscal year 1996 shall be made not later than 30 days after the date on which the contract is entered into and approved by the Secretary and the owner or producer. (B) Subsequent fiscal years At the option of the owner or producer for fiscal year 1997 and each subsequent fiscal year, 50 percent of the annual contract pay- ment shall be made on December 15 or Janu- ary 15 of the fiscal year. The owner or pro- ducer may change the date selected under this subparagraph for a subsequent fiscal year by providing advance notice to the Sec- retary. (3) Special rule Notwithstanding the requirements for mak- ing an annual contract payment specified in paragraphs (1) and (2), at the option of the owner or producer, the Secretary shall pay the full amount (or such portion as the owner or producer may specify) of the contract pay- ment required to be paid for any of fiscal years 1999 through 2002 at such time or times during that fiscal year as the owner or producer may specify. (Pub. L. 104–127, title I, § 112, Apr. 4, 1996, 110 Stat. 899; Pub. L. 105–228, § 2, Aug. 12, 1998, 112 Stat. 1516; Pub. L. 106–78, title VIII, § 811, Oct. 22, 1999, 113 Stat. 1181.) Editorial Notes AMENDMENTS 1999—Subsec. (d)(3). Pub. L. 106–78, in par. heading, struck out ‘‘for fiscal year 1999’’ after ‘‘rule’’ and, in text, substituted ‘‘any of fiscal years 1999 through 2002’’ for ‘‘fiscal year 1999’’. 1998—Subsec. (d)(3). Pub. L. 105–228 added par. (3). Statutory Notes and Related Subsidiaries PRODUCTION FLEXIBILITY CONTRACT PAYMENTS Pub. L. 106–170, title V, § 525, Dec. 17, 1999, 113 Stat. 1928, as amended by Pub. L. 107–147, title IV, § 417(24)(A), Mar. 9, 2002, 116 Stat. 57, provided that: ‘‘Any option to accelerate the receipt of any payment under a produc- tion flexibility contract which is payable under the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7201 et seq.), as in effect on the date of the enactment of this Act [Dec. 17, 1999], shall be dis- regarded in determining the taxable year for which such payment is properly includible in gross income for purposes of the Internal Revenue Code of 1986 [26 U.S.C. 1 et seq.].’’ Pub. L. 105–277, div. J, title II, § 2012, Oct. 21, 1998, 112 Stat. 2681–902, provided that: ‘‘(a) IN GENERAL.—The options under paragraphs (2) and (3) of section 112(d) of the Federal Agriculture Im- provement and Reform Act of 1996 (7 U.S.C. 7212(d)(2) and (3)), as in effect on the date of the enactment of this Act [Oct. 21, 1998], shall be disregarded in deter- mining the taxable year for which any payment under a production flexibility contract under subtitle B of title I of such Act [7 U.S.C. 7211 et seq.] (as so in effect) is properly includible in gross income for purposes of the Internal Revenue Code of 1986 [26 U.S.C. 1 et seq.]. ‘‘(b) EFFECTIVE DATE.—Subsection (a) shall apply to taxable years ending after December 31, 1995.’’ § 7213. Amounts available for contract payments (a) Fiscal year amounts The Secretary shall, to the maximum extent practicable, expend the following amounts to satisfy the obligations of the Secretary under all contracts: (1) For fiscal year 1996, $5,570,000,000. (2) For fiscal year 1997, $5,385,000,000. (3) For fiscal year 1998, $5,800,000,000. (4) For fiscal year 1999, $5,603,000,000. (5) For fiscal year 2000, $5,130,000,000. (6) For fiscal year 2001, $4,130,000,000. (7) For fiscal year 2002, $4,008,000,000. (b) Allocation The amount made available for a fiscal year under subsection (a) shall be allocated as fol- lows: (1) For wheat, 26.26 percent. (2) For corn, 46.22 percent. (3) For grain sorghum, 5.11 percent. (4) For barley, 2.16 percent. (5) For oats, 0.15 percent. (6) For upland cotton, 11.63 percent. (7) For rice, 8.47 percent. (c) Adjustment The Secretary shall adjust the amounts allo- cated for each contract commodity under sub- section (b) for a particular fiscal year by— (1) adding an amount equal to the sum of all repayments of deficiency payments required under section 114(a)(2) of the Agricultural Act of 1949 (7 U.S.C. 1445j(a)(2)) for the commodity; (2) adding an amount equal to the sum of all refunds of contract payments received during the preceding fiscal year under section 7216 of this title for the commodity; and (3) subtracting an amount equal to the amount, if any, necessary during that fiscal year to satisfy payment requirements for the commodity under sections 103B, 105B, or 107B of the Agricultural Act of 1949 for the 1994 and 1995 crop years. (d) Additional rice allocation In addition to the adjustments required under subsection (c), the amount allocated under sub- section (b) for rice contract payments shall be increased by $8,500,000 for each of fiscal years 1997 through 2002. (e) Exclusion of certain amounts from contract payments Any amount added pursuant to paragraphs (1) and (2) of subsection (c) to the amount available under subsection (a) for a fiscal year and paid to owners and producers under a contract shall not be treated as a contract payment for purposes of section 7215 of this title or section 1308(1) 1 of this title. However, the amount of a payment covered by this subsection may not exceed $50,000 per person. (f) Effect of payment limitation The amount available under subsection (a) for a fiscal year shall be reduced by an amount equal to the total amount of contract payments for the fiscal year that owners and producers forgo as a result of operation of the payment limitation under section 1308(1) 1 of this title.