7 U.S.C. § 7216 — Violations of contract

Page 1974 TITLE 7—AGRICULTURE § 7214 (Pub. L. 104–127, title I, § 113, Apr. 4, 1996, 110 Stat. 900.) Editorial Notes REFERENCES IN TEXT Sections 103B, 105B, and 107B of the Agricultural Act of 1949, referred to in subsec. (c)(3), were classified to sections 1444–2, 1444f, and 1445b–3a, respectively, of this title prior to repeal by section 7301(b)(2)(A)–(D) of this title. Section 1308(1) of this title, referred to in subsecs. (e), (f), was repealed by Pub. L. 107–171, title I, § 1603(a), May 13, 2002, 116 Stat. 213. § 7214. Determination of contract payments under contracts (a) Individual payment quantity of contract com- modities For each contract, the payment quantity of a contract commodity for each fiscal year shall be equal to the product of— (1) 85 percent of the contract acreage; and (2) the farm program payment yield. (b) Annual payment quantity of contract com- modities The payment quantity of each contract com- modity covered by all contracts for each fiscal year shall be equal to the sum of the amounts calculated under subsection (a) for each indi- vidual contract. (c) Annual payment rate The payment rate for a contract commodity for each fiscal year shall be equal to— (1) the amount made available under section 7213 of this title for the contract commodity for the fiscal year; divided by (2) the amount determined under subsection (b) for the fiscal year. (d) Annual payment amount The amount to be paid under a contract in ef- fect for each fiscal year with respect to all con- tract commodities covered by the contract shall be equal to the sum of the products of— (1) the payment quantity determined under subsection (a) for each of the contract com- modities covered by the contract; and (2) the corresponding payment rate for the contract commodity in effect under subsection (c). (e) Reduction in payment amount The contract payment determined under sub- section (d) for an owner or producer for a fiscal year shall be immediately reduced by the amount of any repayment of deficiency pay- ments that is required under section 114(a)(2) of the Agricultural Act of 1949 (7 U.S.C. 1445j(a)(2)) and is not repaid as of the date the contract pay- ment is determined. The Secretary shall be re- quired to collect the required repayment, or any claim based on the required repayment, as soon as the contract payment is determined. (f) Assignment of contract payments The provisions of section 590h(g) of title 16 (re- lating to assignment of payments) shall apply to contract payments under this section. The owner or producer making the assignment, or the assignee, shall provide the Secretary with notice, in such manner as the Secretary may re- quire in the contract, of any assignment made under this subsection. (g) Sharing of contract payments The Secretary shall provide for the sharing of contract payments among the owners and pro- ducers subject to the contract on a fair and eq- uitable basis. (Pub. L. 104–127, title I, § 114, Apr. 4, 1996, 110 Stat. 901.) § 7215. Applicability of payment limitations Sections 1308 through 1308–3 of this title shall be applicable to contract payments made under this subchapter. (Pub. L. 104–127, title I, § 115(a), Apr. 4, 1996, 110 Stat. 902.) § 7216. Violations of contract (a) Termination of contract for violation Except as provided in subsection (b), if an owner or producer subject to a contract violates a requirement of the contract specified in sec- tion 7211(a) of this title, the Secretary shall ter- minate the contract with respect to the owner or producer on each farm in which the owner or producer has an interest. On the termination, the owner or producer shall forfeit all rights to receive future contract payments on each farm in which the owner or producer has an interest and shall refund to the Secretary all contract payments received by the owner or producer during the period of the violation, together with interest on the contract payments as deter- mined by the Secretary. (b) Refund or adjustment If the Secretary determines that a violation does not warrant termination of the contract under subsection (a), the Secretary may require the owner or producer subject to the contract— (1) to refund to the Secretary that part of the contract payments received by the owner or producer during the period of the violation, together with interest on the contract pay- ments as determined by the Secretary; or (2) to accept a reduction in the amount of fu- ture contract payments that is proportionate to the severity of the violation, as determined by the Secretary. (c) Foreclosure (1) Effect of foreclosure An owner or producer subject to a contract may not be required to make repayments to the Secretary of amounts received under the contract if the contract acreage has been fore- closed on and the Secretary determines that forgiving the repayments is appropriate to provide fair and equitable treatment. (2) Resumption of operation This subsection shall not void the respon- sibilities of the owner or producer under the contract if the owner or producer continues or resumes operation, or control, of the contract acreage. On the resumption of operation or control over the contract acreage by the owner or producer, the provisions of the con- Page 1975 TITLE 7—AGRICULTURE § 7231 tract in effect on the date of the foreclosure shall apply. (d) Review A determination of the Secretary under this section shall be considered to be an adverse deci- sion for purposes of the availability of adminis- trative review of the determination. (Pub. L. 104–127, title I, § 116, Apr. 4, 1996, 110 Stat. 903.) § 7217. Transfer or change of interest in lands subject to contract (a) Termination Except as provided in subsection (c), a transfer of (or change in) the interest of an owner or pro- ducer subject to a contract in the contract acre- age covered by the contract shall result in the termination of the contract with respect to the acreage, unless the transferee or owner of the acreage agrees to assume all obligations under the contract. The termination shall be effective on the date of the transfer or change. (b) Modification At the request of the transferee or owner, the Secretary may modify the contract if the modi- fications are consistent with the objectives of this subchapter, as determined by the Secretary. (c) Exception If an owner or producer who is entitled to a contract payment dies, becomes incompetent, or is otherwise unable to receive the contract pay- ment, the Secretary shall make the payment, in accordance with regulations prescribed by the Secretary. (Pub. L. 104–127, title I, § 117, Apr. 4, 1996, 110 Stat. 904.) § 7218. Planting flexibility (a) Permitted crops Subject to subsection (b), any commodity or crop may be planted on contract acreage on a farm. (b) Limitations and exceptions regarding fruits and vegetables (1) Limitations The planting of fruits and vegetables (other than lentils, mung beans, and dry peas) shall be prohibited on contract acreage. (2) Exceptions Paragraph (1) shall not limit the planting of a fruit or vegetable— (A) in any region in which there is a his- tory of double-cropping of contract commod- ities with fruits or vegetables, as determined by the Secretary, in which case the double- cropping shall be permitted; (B) on a farm that the Secretary deter- mines has a history of planting fruits or vegetables on contract acreage, except that a contract payment shall be reduced by an acre for each acre planted to the fruit or vegetable; or (C) by a producer who the Secretary deter- mines has an established planting history of a specific fruit or vegetable, except that— (i) the quantity planted may not exceed the producer’s average annual planting history of the fruit or vegetable in the 1991 through 1995 crop years (excluding any crop year in which no plantings were made), as determined by the Secretary; and (ii) a contract payment shall be reduced by an acre for each acre planted to the fruit or vegetable. (Pub. L. 104–127, title I, § 118, Apr. 4, 1996, 110 Stat. 904.) Statutory Notes and Related Subsidiaries CONTRACT PAYMENTS FOR WILD RICE ACREAGE Pub. L. 106–78, title VII, § 727, Oct. 22, 1999, 113 Stat. 1164, provided that: ‘‘None of the funds appropriated or otherwise available to the Department of Agriculture in fiscal year 2000 or thereafter may be used to admin- ister the provision of contract payments to a producer under the Agricultural Market Transition Act (7 U.S.C. 7201 et seq.) for contract acreage on which wild rice is planted unless the contract payment is reduced by an acre for each contract acre planted to wild rice.’’ Similar provisions were contained in the following prior appropriations acts: Pub. L. 105–277, div. A, § 101(a) [title VII, § 727], Oct. 21, 1998, 112 Stat. 2681, 2681–28. Pub. L. 105–86, title VII, § 734, Nov. 18, 1997, 111 Stat. 2110. SUBCHAPTER III—NONRECOURSE MAR- KETING ASSISTANCE LOANS AND LOAN DEFICIENCY PAYMENTS § 7231. Availability of nonrecourse marketing as- sistance loans (a) Nonrecourse loans available For each of the 1996 through 2002 crops of each loan commodity, the Secretary shall make available to producers on a farm nonrecourse marketing assistance loans for loan commod- ities produced on the farm. The loans shall be made under terms and conditions that are pre- scribed by the Secretary and at the loan rate es- tablished under section 7232 of this title for the loan commodity. (b) Eligible production The following production shall be eligible for a marketing assistance loan under subsection (a): (1) In the case of a marketing assistance loan for a contract commodity, any produc- tion by a producer on a farm containing eligi- ble cropland covered by a production flexi- bility contract. (2) In the case of a marketing assistance loan for extra long staple cotton and oilseeds, any production. (c) Compliance with conservation and wetlands requirements As a condition of the receipt of a marketing assistance loan under subsection (a), the pro- ducer shall comply with applicable conservation requirements under subtitle B of title XII of the Food Security Act of 1985 (16 U.S.C. 3811 et seq.) and applicable wetland protection requirements under subtitle C of title XII of the Act (16 U.S.C. 3821 et seq.) during the term of the loan. (d) Additional outlays prohibited The Secretary shall carry out this subchapter in such a manner that there are no additional