§ 7212. — Elements of contracts.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC7212]
TITLE 7--AGRICULTURE
CHAPTER 100--AGRICULTURAL MARKET TRANSITION
SUBCHAPTER II--PRODUCTION FLEXIBILITY CONTRACTS
Sec. 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 Secretary may not enter
into a contract after August 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
conservation reserve contract entered into under section 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
annual contract payment level for the applicable crop. For the
fiscal year in which the conservation reserve contract is
terminated, the owner or producer subject to the production
flexibility contract may elect to receive either contract
payments or a prorated payment under the conservation reserve
contract, 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) of
this section, the date the production flexibility contract was
entered into or expanded 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 contract, 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.
(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 payment shall be made on December 15 or January 15 of
the fiscal year. The owner or producer may change the date
selected under this subparagraph for a subsequent fiscal year by
providing advance notice to the Secretary.
(3) Special rule
Notwithstanding the requirements for making 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
payment 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, Sec. 112, Apr. 4, 1996, 110 Stat. 899; Pub.
L. 105-228, Sec. 2, Aug. 12, 1998, 112 Stat. 1516; Pub. L. 106-78, title
VIII, Sec. 811, Oct. 22, 1999, 113 Stat. 1181.)
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).
Production Flexibility Contract Payments
Pub. L. 106-170, title V, Sec. 525, Dec. 17, 1999, 113 Stat. 1928,
as amended by Pub. L. 107-147, title IV, Sec. 417(24)(A), Mar. 9, 2002,
116 Stat. 57, provided that: ``Any option to accelerate the receipt of
any payment under a production 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 disregarded 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, Sec. 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 Improvement 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
determining 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.''
Section Referred to in Other Sections
This section is referred to in section 7211 of this title.
