US (United States) Code. Title 7. Chapter 50: Agricultural credit

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Agriculture

  • Enviado por: El remitente no desea revelar su nombre
  • Idioma: inglés
  • País: Estados Unidos Estados Unidos
  • 503 páginas
publicidad

-CITE-

7 USC CHAPTER 50 - AGRICULTURAL CREDIT 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

.

-HEAD-

CHAPTER 50 - AGRICULTURAL CREDIT

-MISC1-

Sec.

1921. Congressional findings.

SUBCHAPTER I - REAL ESTATE LOANS

1922. Persons eligible for loans.

(a) Authorization and conditions.

(b) Direct loans.

1923. Purposes of loans.

(a) Allowed purposes.

(b) Preferences.

(c) Hazard insurance requirement.

1924. Soil and water conservation and protection.

(a) In general.

(b) Priority.

(c) Loan maximum.

1925. Limitations on amount of farm ownership loans.

(a) In general.

(b) Determination of value.

(c) Inflation percentage.

1926. Water and waste facility loans and grants.

(a) In general.

(b) Curtailment or limitation of service prohibited.

(c) Repealed.

(d) Carryover of unused authorizations for

appropriations.

1926-1. Repealed.

1926a. Emergency and imminent community water assistance grant

program.

(a) In general.

(b) Priority.

(c) Eligibility.

(d) Uses.

(e) Restrictions.

(f) Maximum grants.

(g) Full funding.

(h) Application.

(i) Funding.

1926b. Repealed.

1926c. Water and waste facility loans and grants to alleviate

health risks.

(a) Loans and grants to persons other than

individuals.

(b) Loans and grants to individuals.

(c) Preference.

(d) ''Cooperative'' defined.

(e) Authorization of appropriations.

(f) Regulations.

1926d. Water systems for rural and Native villages in Alaska.

(a) In general.

(b) Matching funds.

(c) Consultation with State of Alaska.

(d) Authorization of appropriations.

1926e. Grants to nonprofit organizations to finance the

construction, refurbishing, and servicing of individually-owned

household water well systems in rural areas for individuals with

low or moderate incomes.

(a) Definition of eligible individual.

(b) Grants.

(c) Priority in awarding grants.

(d) Authorization of appropriations.

1927. Repayment requirements.

(a) Period of repayment; interest rates.

(b) Payment of charges; prepayment of taxes and

insurance.

(c) Mortgages, liens, and other security.

(d) Mineral rights as collateral.

(e) Additional collateral.

1927a. Loan interest rates charged by Farmers Home Administration;

grant funds associated with loans.

1928. Full faith and credit.

(a) In general.

(b) Contestability.

1929. Agricultural Credit Insurance Fund.

(a) Revolving fund.

(b) Deposits of funds; investments; purchase of

notes.

(c) Notes; form and denominations; maturities; terms

and conditions; interest rate; purchase by

Treasury; public debt transaction.

(d) Notes and security as part of fund; collection or

sale of notes; deposit of net proceeds in fund.

(e) Deposit in fund of portion of charge on

outstanding principal obligations; availability

of remainder of charge, and merger with

appropriations, for administrative expenses.

(f) Utilization of fund.

(g) Transfer of funds from Farmers Home

Administration direct loan account and

Emergency Credit Revolving Fund; abolition of

such account and fund; payments from

Agricultural Credit Insurance Fund; interest.

(h) Guaranteed loans; interest rate for loans sold

into secondary market; loan fees.

(i) Coordination of assistance for qualified

beginning farmers and ranchers.

(j) Guarantee of loans made under State beginning

farmer or rancher programs.

1929-1. Level of loan programs under Agricultural Credit Insurance

Fund.

1929a. Rural Development Insurance Fund

(a) Creation; revolving fund; rural development

loans.

(b) Transfer of assets and liabilities.

(c) Credits in the Treasury; investments; notes,

purchasing authority of the Secretary.

(d) Notes, issuing authority of the Secretary; use of

funds; terms and conditions, form,

denominations, maturities, and interest rate of

notes; notes, purchasing authority of the

Secretary of the Treasury; public debt

transactions.

(e) Notes and security as part of Insurance Fund;

collection and sale of notes and other

obligations; deposit of net proceeds in

Insurance Fund.

(f) Deposit of loan service charges in Insurance

Fund.

(g) Use of Insurance Fund.

(h) Gross income; interest or other income on insured

loans.

1929b. Purchase of guaranteed portions of loans; terms and

conditions; exercise of authorities.

1930. Continued availability of appropriated funds for direct real

estate loans to farmers and ranchers.

1931. Repealed.

1932. Rural industrialization assistance.

(a) Loans for private business enterprises; pollution

abatement and control; aquaculture; solar

energy; loan guarantees.

(b) Solid waste management grants.

(c) Rural business enterprise grants.

(d) Joint loans or grants for private business

enterprises; restrictions; system of

certification for expeditious processing of

requests for assistance; prior approval of

grant or loan; equity investment as condition

for loan commitment; issuance of certificates

of beneficial ownership of notes.

(e) Rural cooperative development grants.

(f) Grants to broadcasting systems.

(g) Business and industry direct and guaranteed

loans.

(h) Loan guarantees for certain loans.

1933. Guaranteed rural housing loans; Hawaiian home lands.

1934. Low-income farm ownership loan program; eligibility;

repayment requirements.

1935. Down payment loan program.

(a) In general.

(b) Loan terms.

(c) Limitations.

(d) Administration.

1936. Beginning farmer and rancher contract land sales program.

(a) In general.

(b) Date of commencement of program.

1936a. Use of rural development loans and grants for other

purposes.

SUBCHAPTER II - OPERATING LOANS

1941. Persons eligible for loans.

(a) Requirements.

(b) Rural youths in 4-H Clubs, Future Farmers of

America, etc.

(c) Direct loans.

1942. Purposes of loans.

(a) In general.

(b) Guaranteed loans.

(c) Hazard insurance requirement.

(d) Private reserve.

1943. Limitations on amount of operating loans.

(a) In general.

(b) Inflation percentage.

1944. Soil conservation district loans; limitation; purchase of

conservation equipment.

1945. Repealed.

1946. Liability of borrower.

(a) Determination of interest rates.

(b) Payment period; consolidation and rescheduling of

loans.

(c) Line-of-credit loans.

1947, 1948. Repealed.

1949. Graduation of borrowers with operating loans or guarantees to

private commercial credit.

(a) Graduation plan.

(b) Limitation on period borrowers are eligible for

guaranteed assistance.

SUBCHAPTER III - EMERGENCY LOANS

1961. Eligibility for loans.

(a) Persons eligible.

(b) Hazard insurance requirement.

(c) Family farm system.

(d) Definitions.

1962. Loan determination factors; written credit declinations.

1963. Purpose and extent of loans.

1964. Terms of loans.

(a) Maximum amount of loan.

(b) Interest rates.

(c) Interest subsidies.

(d) Repayment.

(e) Grant eligibility.

1965. Repealed.

1966. Emergency Credit Revolving Fund utilization.

1967. Addition to Emergency Credit Revolving Fund of sums from

liquidation of loans; authorization of appropriations.

1968, 1969. Repealed.

1970. Eligibility for assistance based on production loss.

1971. Repealed.

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

1981. Farmers Home Administration.

(a) Appointment and compensation of Administrator;

transfer of powers, duties, and assets

pertaining to agricultural credit.

(b) Powers of Secretary of Agriculture.

(c) Delinquent claims and obligations.

1981a. Loan moratorium and policy on foreclosures.

1981b. Farm loan interest rates.

1981c. Oil and gas royalty payments on loans.

1981d. Notice of loan service programs.

(a) Requirement.

(b) Contents.

(c) Contained in regulations.

(d) Timing.

(e) Consideration of borrowers for loan service

programs.

1981e. Planting and production history guidelines.

(a) In general.

(b) Calculation of yields.

1981f. Underwriting forms and standards.

1982. Repealed.

1983. Special conditions and limitations on loans.

1983a. Prompt approval of loans and loan guarantees.

(a) Applications; time for action by Secretary;

notice; statement of reasons.

(b) Loan proceeds; time for receipt.

(c) Reconsideration of applications; time for action

by Secretary.

(d) Approved lender designation applications; time

for decision by Secretary.

(e) Processing loan applications; personnel and other

resources made available; use of authorities of

law.

(f) Graduation of seasoned direct loan borrowers to

loan guarantee program.

(g) Simplified application forms for loan guarantees.

1983b. Repealed.

1983c. Provision of information to borrowers.

(a) In general.

(b) Construction of section.

1984. Taxation.

1985. Security servicing.

(a) Preservation and protection of security, lien, or

priority of lien securing loan.

(b) Operation or lease of realty.

(c) Sale of property.

(d) Easements; condemnations.

(e) Real property located within Indian reservation;

conservation practices; adverse effects

prohibition.

(f) Normal security income.

(g) Easements on inventoried property.

1986. Conflicts of interests.

(a) Acceptance of fees, commissions, gifts, or other

considerations prohibited.

(b) Acquisition of interest in land by certain

officers or employees of Department of

Agriculture prohibited; 3-year period.

(c) Certifications on loans to family members

prohibited.

(d) Penalties.

1987. Debt adjustment and credit counseling; ''summary period''

defined; loan summary statements.

1988. Appropriations.

(a) Authorization.

(b) Sale by lender and any holder of guaranteed

portion of loan pursuant to regulations

governing such sales; limitations; issuance of

pool certificates representing ownership of

guaranteed portion of guaranteed loan; terms

and conditions, etc.; reporting requirements.

1989. Rules and regulations.

(a) In general.

(b) Debt service margin requirements.

(c) Certified Lenders Program.

(d) Preferred Certified Lenders Program.

(e) Administration of Certified Lenders and Preferred

Certified Lenders programs.

1990. Transfer of lands to Secretary.

1991. Definitions.

1992. Loan limitations.

1993. Repealed.

1994. Maximum amounts for loans authorized; long-term cost

projections.

(a) Maximum aggregate principal amounts for loans

authorized.

(b) Authorization for loans.

(c) Development of long-term cost projections for

loan program authorizations.

(d) Low-income, limited-resource borrowers.

1995. Participation and financial and technical assistance by other

Federal departments, etc., to program participants.

1996. Loans to resident aliens.

1997. Conservation easements.

(a) Definitions.

(b) Contracts on loan security properties.

(c) Limitations.

(d) Terms and conditions.

(e) Purchase; limitation upon cancellation or

prepayment.

(f) Consultations with Director of Fish and Wildlife

Service.

(g) Enforcement.

1998. Guaranteed farm loan programs.

1999. Interest rate reduction program.

(a) Establishment of program.

(b) Contracts with lenders.

(c) Payments to lenders.

(d) Duration of contracts.

(e) Agricultural Credit Insurance Fund use

limitation.

(f) List of lender participants in guaranteed loan

program.

(g) Foreclosure action provision in farm loan

guarantees.

2000. Homestead protection.

(a) Definitions.

(b) Occupancy of homestead upon foreclosure,

bankruptcy, or liquidation; appraisal; period

of occupancy.

(c) Terms and conditions.

(d) First right of refusal of reacquisition.

(e) Value as measure of reacquisition payment of

principal.

(f) Contract authority.

(g) Conflict between Federal and State law.

2001. Debt restructuring and loan servicing.

(a) In general.

(b) Eligibility.

(c) Restructuring determinations.

(d) Principal and interest write-down.

(e) Shared appreciation arrangements.

(f) Determination to restructure.

(g) Prerequisites to foreclosure or liquidation.

(h) Time limits for restructuring.

(i) Notice of ineligibility for restructuring.

(j) Independent appraisals.

(k) Partial liquidations.

(l) Disposition of normal income security.

(m) Only 1 write-down or net recovery buy-out per

borrower for loan made after January 6, 1988.

(n) Liquidation of assets.

(o) Lifetime limitation on debt forgiveness per

borrower.

2001a. Debt restructuring and loan servicing for community facility

loans.

2002. Transfer of inventory lands.

(a) In general.

(b) Conditions.

2003. Target participation rates.

(a) Establishment.

(b) Reservation and allocation.

(c) Operating loans.

(d) Report.

(e) Definitions.

(f) Implementation consistent with Supreme Court

holding.

2004. Expedited clearing of title to inventory property.

2005. Payment of losses on guaranteed loans.

(a) Payments to lenders.

(b) Administration.

2006. Waiver of mediation rights by borrowers.

2006a. Borrower training.

(a) In general.

(b) Contract.

(c) Eligibility for loans.

(d) Guidelines and curriculum.

(e) Payment.

(f) Waivers.

2006b. Loan assessments.

(a) In general.

(b) Determinations.

(c) Contract.

(d) Review of loans.

(e) Guidelines.

2006c. Supervised credit.

2006d. Market placement.

2006e. Prohibition on use of loans for certain purposes.

2006f. Rural development certified lenders program.

(a) Certified lenders program.

(b) Preferred certified lenders program.

2007 to 2008c. Repealed.

2008d. Recordkeeping of loans by borrower's gender.

2008e. Prohibition under rural development programs.

(a) Prohibition.

(b) Ensuring compliance.

(c) Regulations.

2008f. Crop insurance requirement.

(a) In general.

(b) Applicable benefits.

2008g. Payment of interest as condition of loan servicing for

borrowers.

2008h. Loan and loan servicing limitations.

(a) Delinquent borrowers prohibited from obtaining

direct operating loans.

(b) Prohibition of loans for borrowers that have

received debt forgiveness.

(c) No more than 1 debt forgiveness for borrower on

direct loan.

2008i. Short form certification of farm program borrower

compliance.

2008j. National Sheep Industry Improvement Center.

(a) Definitions.

(b) Establishment of Center.

(c) Purposes.

(d) Strategic plan.

(e) Revolving Fund.

(f) Board of Directors.

(g) Officers and employees.

(h) Consultation.

(i) Oversight.

(j) Privatization.

2008k. Making and servicing of loans by personnel of State, county,

or area committees.

2008l. Eligibility of employees of State, county, or area committee

for loans and loan guarantees.

(a) In general.

(b) Approvals.

2008m. National Rural Development Partnership.

(a) Definitions.

(b) Partnership.

(c) National Rural Development Coordinating

Committee.

(d) State rural development councils.

(e) Administrative support of the Partnership.

(f) Matching requirements for State rural development

councils.

(g) Funding.

(h) Termination.

2008n. Rural telework.

(a) Definitions.

(b) Rural telework institute.

(c) Telework grants.

(d) Applicability of certain Federal law.

(e) Regulations.

(f) Authorization of appropriation.

2008o. Historic barn preservation.

(a) Definitions.

(b) Program.

(c) Grants.

2008p. Grants for NOAA weather radio transmitters.

(a) In general.

(b) Eligibility.

(c) Federal share.

(d) Authorization of appropriations.

2008q. Grants to train farm workers in new technologies and to

train farm workers in specialized skills necessary for higher

value crops.

(a) In general.

(b) Use of funds.

(c) Authorization of appropriations.

2008r. Delta region agricultural economic development.

(a) In general.

(b) Authorization of appropriations.

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

2009. Definitions.

2009a. Establishment.

2009b. National objectives.

2009c. Strategic plans.

(a) In general.

(b) Assistance.

(c) Review.

(d) Contents.

2009d. Rural Development Trust Fund.

(a) Establishment.

(b) Accounts.

(c) Deposits into accounts.

(d) Function categories.

(e) Federally recognized Indian tribe account.

(f) Allocation among States.

(g) Availability of funds allocated for States.

2009e. Transfers of funds.

(a) General authority.

(b) Limitation.

(c) Exceptions.

2009f. Grants to States.

(a) Simple grants.

(b) Matching grants.

(c) Use of funds.

(d) Maintenance of effort.

(e) Appeals.

(f) Administrative costs.

(g) Expenditure of funds by State.

(h) No entitlement to contract, grant, or assistance.

2009g. Guarantee and commitment to guarantee loans.

(a) ''Eligible public entity'' defined.

(b) Guarantee and commitment.

(c) Limitation.

(d) Payment of principal, interest, and costs.

(e) Repayment contract; security.

(f) Pledged grants for repayments.

(g) Outstanding obligations.

(h) Purchase of guaranteed obligations by Federal

Financing Bank.

(i) Full faith and credit.

2009h. Local involvement.

2009i. Interstate collaboration.

2009j. Annual report.

(a) In general.

(b) Submission.

2009k. Rural development interagency working group.

(a) In general.

(b) Duties.

2009l. Duties of Rural Economic and Community Development State

Offices.

2009m. Electronic transfer.

2009n. Repealed.

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

2009aa. Definitions.

2009aa-1. Delta Regional Authority.

(a) Establishment.

(b) Alternate members.

(c) Voting.

(d) Duties.

(e) Administration.

(f) Federal agency cooperation.

(g) Administrative expenses.

(h) Compensation.

(i) Conflicts of interest.

(j) Validity of contracts, loans, and grants.

2009aa-2. Economic and community development grants.

(a) In general.

(b) Funding.

2009aa-3. Supplements to Federal grant programs.

(a) Finding.

(b) Federal grant program funding.

(c) Certifications.

2009aa-4. Local development districts; certification and

administrative expenses.

(a) Definition of local development district.

(b) Grants to local development districts.

(c) Duties of local development districts.

2009aa-5. Distressed counties and areas and nondistressed counties.

(a) Designations.

(b) Distressed counties.

(c) Nondistressed counties.

(d) Transportation and basic public infrastructure.

2009aa-6. Development planning process.

(a) State development plan.

(b) Content of plan.

(c) Consultation with interested local parties.

(d) Public participation.

2009aa-7. Program development criteria.

(a) In general.

(b) No relocation assistance.

(c) Reduction of funds.

2009aa-8. Approval of development plans and projects.

(a) In general.

(b) Evaluation by State member.

(c) Certification.

(d) Approval of grant applications.

2009aa-9. Consent of States.

2009aa-10. Records.

(a) Records of the Authority.

(b) Records of recipients of Federal assistance.

(c) Annual audit.

2009aa-11. Annual report.

2009aa-12. Authorization of appropriations.

(a) In general.

(b) Administrative expenses.

2009aa-13. Termination of authority.

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

2009bb. Definitions.

2009bb-1. Northern Great Plains Regional Authority.

(a) Establishment.

(b) Alternate members.

(c) Voting.

(d) Duties.

(e) Administration.

(f) Federal agency cooperation.

(g) Administrative expenses.

(h) Compensation.

(i) Conflicts of interest.

(j) Validity of contracts, loans, and grants.

2009bb-2. Economic and community development grants.

(a) In general.

(b) Funding.

2009bb-3. Supplements to Federal grant programs.

(a) Finding.

(b) Federal grant program funding.

(c) Certifications.

2009bb-4. Local development districts and organizations and

Northern Great Plains Inc.

(a) Definition of local development district.

(b) Grants to local development districts.

(c) Duties of local development districts.

(d) Northern Great Plains Inc.

2009bb-5. Distressed counties and areas and nondistressed counties.

(a) Designations.

(b) Distressed counties.

(c) Nondistressed counties.

(d) Transportation, telecommunication, and basic

public infrastructure.

2009bb-6. Development planning process.

(a) State development plan.

(b) Content of plan.

(c) Consultation with interested local parties.

(d) Public participation.

2009bb-7. Program development criteria.

(a) In general.

(b) No relocation assistance.

(c) Maintenance of effort.

2009bb-8. Approval of development plans and projects.

(a) In general.

(b) Evaluation by State member.

(c) Certification.

(d) Votes for decisions.

2009bb-9. Consent of States.

2009bb-10. Records.

(a) Records of the Authority.

(b) Records of recipients of Federal assistance.

(c) Annual audit.

2009bb-11. Annual report.

2009bb-12. Authorization of appropriations.

(a) In general.

(b) Administrative expenses.

(c) Minimum State share of grants.

2009bb-13. Termination of authority.

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

2009cc. Definitions.

2009cc-1. Purposes.

2009cc-2. Establishment.

2009cc-3. Selection of rural business investment companies.

(a) Eligibility.

(b) Application.

(c) Status.

(d) Matters considered.

(e) Approval; license.

2009cc-4. Debentures.

(a) In general.

(b) Terms and conditions.

(c) Full faith and credit of the United States.

(d) Maximum guarantee.

2009cc-5. Issuance and guarantee of trust certificates.

(a) Issuance.

(b) Guarantee.

(c) Full faith and credit of the United States.

(d) Subrogation and ownership rights.

(e) Management and administration.

2009cc-6. Fees.

(a) In general.

(b) Trust certificate.

(c) License.

2009cc-7. Operational assistance grants.

(a) In general.

(b) Terms.

(c) Use of funds.

(d) Submission of plans.

(e) Grant amount.

2009cc-8. Rural business investment companies.

(a) Organization.

(b) Articles.

(c) Capital requirements.

(d) Diversification of ownership.

2009cc-9. Financial institution investments.

(a) In general.

(b) Limitation.

(c) Limitation on rural business investment companies

controlled by Farm Credit System institutions.

2009cc-10. Reporting requirements.

(a) Rural business investment companies.

(b) Public reports.

2009cc-11. Examinations.

(a) In general.

(b) Assistance of private sector entities.

(c) Costs.

(d) Deposit of funds.

2009cc-12. Injunctions and other orders.

(a) In general.

(b) Jurisdiction.

(c) Secretary as trustee or receiver.

2009cc-13. Additional penalties for noncompliance.

(a) In general.

(b) Adjudication of noncompliance.

2009cc-14. Unlawful acts and omissions; breach of fiduciary duty.

(a) Parties deemed to commit a violation.

(b) Fiduciary duties.

(c) Unlawful acts.

2009cc-15. Removal or suspension of directors or officers.

2009cc-16. Contracting of functions.

(a) In general.

(b) Funding.

2009cc-17. Regulations.

2009cc-18. Funding.

(a) In general.

(b) Availability of funds.

SUBCHAPTER IX - RURAL STRATEGIC INVESTMENT PROGRAM

2009dd. Purpose.

2009dd-1. Definitions.

2009dd-2. Regional Investment Boards.

(a) In general.

(b) Requirements for certification.

2009dd-3. National Board on Rural America.

(a) Establishment.

(b) Composition.

(c) Administrative support.

(d) Duties.

2009dd-4. Rural strategic investment program.

(a) In general.

(b) Use by National Board.

2009dd-5. Regional strategic investment planning grants.

(a) In general.

(b) Regional plans.

(c) Preferences.

(d) Amount.

(e) Cost sharing.

2009dd-6. Innovation grants.

(a) In general.

(b) Eligibility.

(c) Selection.

(d) Preferences.

(e) Uses.

(f) Amount.

(g) Cost sharing.

(h) Negotiation.

(i) Noncompliance.

(j) Other uses.

(k) Transfers.

2009dd-7. National Conference on Rural America.

(a) In general.

(b) Purpose.

(c) Composition.

(d) Report.

(e) Funding.

SUBCHAPTER X - SEARCH GRANTS FOR SMALL COMMUNITIES

2009ee. Definitions.

2009ee-1. SEARCH grant program.

(a) In general.

(b) Allocation to State rural development directors.

(c) Independent citizens' council.

(d) Eligibility.

(e) Applications.

(f) Awards.

(g) Unexpended funds.

2009ee-2. Report.

2009ee-3. Funding.

(a) Allocation to State rural development directors.

(b) Other expenses.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 940, 1515, 2279, 2279a,

7996 of this title; title 12 sections 2219d, 2279aa; title 15

section 636; title 16 sections 590h, 3811, 3821; title 21 section

889; title 38 section 3711; title 40 section 14507; title 42

sections 8813, 9817.

-CITE-

7 USC Sec. 1921 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

-HEAD-

Sec. 1921. Congressional findings

-STATUTE-

The Congress finds that the statutory authority of the Secretary

of Agriculture, hereinafter referred to in this chapter as the

''Secretary,'' for making and insuring loans to farmers and

ranchers should be revised and consolidated to provide for more

effective credit services to farmers.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 301(b), Aug. 8, 1961, 75 Stat.

307.)

-REFTEXT-

REFERENCES IN TEXT

This chapter, referred to in text, was in the original ''this

title'', meaning title III of Pub. L. 87-128, Aug. 8, 1961, 75

Stat. 307, as amended, known as the Consolidated Farm and Rural

Development Act. For complete classification of title III to the

Code, see Short Title note set out below and Tables.

-COD-

CODIFICATION

Section is comprised of subsec. (b) of section 301 of Pub. L.

87-128. Subsec. (a) of such section 301 is set out as a Short Title

note below.

-MISC3-

EFFECTIVE DATE

Former section 300.1 of Title 6, Code of Federal Regulations,

promulgated on Oct. 15, 1961, by the Administrator of the Farmers

Home Administration, published in 26 F.R. 10031, provided: ''The

Consolidated Farmers Home Administration Act of 1961 (7 U.S.C.

1921) (this chapter), is hereby made effective on October 15, 1961,

except (a) as to its authorizations to make and sell insured loans

with 4 1/2 percent yield to the lender and a three-year repurchase

agreement which was made effective by regulations issued on

September 13, 1961 (26 F.R. 9307), pursuant to assignment of

functions contained in 26 F.R. 7888, and (b) that the provisions of

Title IV of the Bankhead-Jones Farm Tenant Act which requires

mineral reservations in lands disposed of under Title III of that

Act (sections 1010 to 1012 and 1013a of this title) shall not

become effective until December 7, 1961.'' See section 341(a) of

Pub. L. 87-128, set out as a note under this section.

SHORT TITLE OF 2000 AMENDMENT

Pub. L. 106-554, Sec. 1(a)(4) (div. B, title V, Sec. 501), Dec.

21, 2000, 114 Stat. 2763, 2763A-268, provided that: ''This title

(enacting subchapter VI of this chapter and amending provisions set

out as a note under section 3121 of Title 42, The Public Health and

Welfare) may be cited as the 'Delta Regional Authority Act of

2000'.''

SHORT TITLE OF 1994 AMENDMENT

Pub. L. 103-248, Sec. 1, May 11, 1994, 108 Stat. 619, provided

that: ''This Act (amending section 1981 of this title) may be cited

as the 'Farmers Home Administration Improvement Act of 1994'.''

SHORT TITLE OF 1992 AMENDMENT

Pub. L. 102-554, Sec. 1(a), Oct. 28, 1992, 106 Stat. 4142,

provided that: ''This Act (enacting sections 1935, 1936, 1948,

1949, and 2008d of this title, amending sections 1925, 1926c, 1929,

1932, 1981d, 1982, 1983, 1983a, 1985, 1989, 1991, 1994, 2003, and

5102 of this title, and enacting provisions set out as notes under

sections 1929 and 1989 of this title) may be cited as the

'Agricultural Credit Improvement Act of 1992'.''

SHORT TITLE OF 1990 AMENDMENT

Pub. L. 101-624, title XXIII, Sec. 2301, Nov. 28, 1990, 104 Stat.

3979, provided that: ''This title (see Tables for classification)

may be cited as the 'Rural Economic Development Act of 1990'.''

SHORT TITLE OF 1986 AMENDMENT

Pub. L. 99-409, Sec. 1, Aug. 28, 1986, 100 Stat. 923, provided:

''That this Act (amending section 1932 of this title and enacting

provisions set out as a note under section 1932 of this title) may

be cited as the 'Rural Industrial Assistance Act of 1986'.''

SHORT TITLE OF 1984 AMENDMENT

Pub. L. 98-258, title VI, Sec. 601, Apr. 10, 1984, 98 Stat. 138,

provided that: ''This title (enacting section 1981b of this title,

amending sections 1943, 1946, 1961, 1964, 1986, and 1994 of this

title, enacting provisions set out as notes under sections 1961 and

1981 of this title, and amending provisions set out as a note

preceding section 1961 of this title) may be cited as the

'Emergency Agricultural Credit Act of 1984'.''

SHORT TITLE OF 1978 AMENDMENT

Pub. L. 95-334, Sec. 1, Aug. 4, 1978, 92 Stat. 420, provided:

''That this Act (enacting sections 1929b, 1934, 1981a, 1994, and

1995 of this title and sections 2201 to 2205 of Title 16,

Conservation, amending sections 1309, 1922, 1924 to 1927, 1929,

1929a, 1932, 1941 to 1943, 1946, 1961, 1964, 1968, 1981, 1983,

1991, and 2908 of this title, repealing section 1965 of this title,

and enacting provisions set out as notes under this section and

sections 1309, 1926, preceding 1961, and 1964 of this title and

section 2201 of Title 16) may be cited as the 'Agricultural Credit

Act of 1978'.''

SHORT TITLE OF 1972 AMENDMENT

Section 1 of Pub. L. 92-419 provided: ''That this Act (enacting

sections 1010a, 1929a, 1931 to 1933, 1947, 1992, 2204a, 2212a, 2651

to 2654, and 2661 to 2668 of this title, amending sections 1006a,

1011, 1924 to 1927, 1929, 1941 to 1943, 1981, 1983, 1985, 1991,

2201, and 2204 of this title, section 5315 of Title 5, Government

Organization and Employees, sections 590g, 590h, 590o, and 1001 to

1005 of Title 16, Conservation, and section 3122 of Title 42, The

Public Health and Welfare, and amending provisions set out as a

note under this section) may be cited as the 'Rural Development Act

of 1972'.''

SHORT TITLE

Section 301(a) of title III of Pub. L. 87-128, as amended by Pub.

L. 92-419, title I, Sec. 101, Aug. 30, 1972, 86 Stat. 657, provided

that: ''This title (enacting this section and sections 1013a, 1922

to 1933, 1941 to 1947, 1961 to 1968, 1969, 1970, 1971, and 1981 to

1993 of this title, amending sections 1924 to 1927, 1929, 1941 to

1943, 1981, 1983, 1985, and 1991 of this title, repealing sections

1001 to 1005d, 1006c to 1006e, 1007, 1008, 1009, 1014 to 1025, 1027

to 1029 of this title, sections 1148a-1 to 1148a-3 of Title 12,

Banks and Banking, and sections 590r to 590x-4 of Title 16,

Conservation, and enacting provisions set out as a note under this

section) may be cited as the 'Consolidated Farm and Rural

Development Act'.''

REGULATIONS

Section 2396 of title XXIII of Pub. L. 101-624 provided that:

''Except as otherwise provided in this title (see Short Title of

1990 Amendment note set out above), no later than 180 days after

the date of the enactment of this Act (Nov. 28, 1990), the

Secretary shall promulgate such regulations as may be necessary to

carry out this title and the amendments made by this title.''

PRESERVATION OF ELIGIBILITY FOR CREDIT ASSISTANCE UNDER FEDERAL LAW

Section 2395 of title XXIII of Pub. L. 101-624 provided that:

''Notwithstanding any other provision of law, this title (see Short

Title of 1990 Amendment note set out above) shall not be construed

to adversely affect the eligibility, as it existed on the date of

enactment of this Act (Nov. 28, 1990), of cooperatives and other

entities for any other credit assistance under Federal law.''

USE OF QUALIFIED PERSONNEL BY THE DEPARTMENT OF AGRICULTURE

Pub. L. 95-334, title I, Sec. 126, Aug. 4, 1978, 92 Stat. 429,

provided that: ''It is the sense of Congress that, in carrying out

the provisions of the Consolidated Farm and Rural Development Act

(see Short Title note set out above), the Secretary of Agriculture

should ensure that -

''(1) only officers and employees of the Department of

Agriculture who are adequately prepared to understand the

particular needs and problems of farmers in an area are assigned

to such area; and

''(2) a high priority is placed on keeping existing farm

operations operating.''

REFERENCES IN OTHER LAWS TO BANKHEAD-JONES FARM TENANT ACT OR WATER

FACILITIES ACT; REPEALS; SAVINGS AND SEPARABILITY PROVISIONS

Section 341 of Pub. L. 87-128 provided that:

''(a) Reference to any provisions of the Bankhead-Jones Farm

Tenant Act (see section 1000 of this title) or the Act of August

28, 1937 (50 Stat. 869), as amended, superseded by any provision of

this title (this chapter) shall be construed as referring to the

appropriate provision of this title (this chapter). Titles I, II,

and IV of the Bankhead-Jones Farm Tenant Act, as amended, and the

Act of August 28, 1937 (50 Stat. 869), as amended, the Act of April

6, 1949 (63 Stat. 43), as amended, and the Act of August 31, 1954

(68 Stat. 999), as amended, are hereby repealed effective one

hundred and twenty days after enactment hereof (Aug. 8, 1961), or

such earlier date as the provisions of this title (this chapter)

are made effective by the Secretary's regulations except that the

repeal of section 2(c) of the Act of April 6, 1949, shall not be

effective prior to January 1, 1962. The foregoing provisions shall

not have the effect of repealing the amendments to section 24,

chapter 6 of the Federal Reserve Act (section 371 of Title 12), as

amended, section 5200 of the Revised Statutes (section 84 of Title

12), section 35 of chapter III of the Act approved June 19, 1934

(D.C. Code, title 35, section 535), enacted by section 15 of the

Bankhead-Jones Farm Tenant Act, as amended, and by section 10(f) of

the Act of August 28, 1937 (50 Stat. 869), as amended.

''(b) The repeal of any provision of law by this title (this

chapter) shall not -

''(1) affect the validity of any action taken or obligation

entered into pursuant to the authority of any of said Acts, or

''(2) prejudice the application of any person with respect to

receiving assistance under the provisions of this title (this

chapter), solely because such person is obligated to the

Secretary under authorization contained in any such repealed

provision.

''(c) If any provision of this title (this chapter) or the

application thereof to any person or circumstances is held invalid,

the remainder of the title (this chapter) and the application of

such provision to other persons or circumstances shall not be

affected thereby.''

-CITE-

7 USC SUBCHAPTER I - REAL ESTATE LOANS 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

.

-HEAD-

SUBCHAPTER I - REAL ESTATE LOANS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 1961, 1963, 1964,

1981b, 1983, 1983a, 1985, 1994, 2000, 2003, 2008l of this title.

-CITE-

7 USC Sec. 1922 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1922. Persons eligible for loans

-STATUTE-

(a) Authorization and conditions

The Secretary is authorized to make and insure loans under this

subchapter to farmers and ranchers in the United States, and to

farm cooperatives and private domestic corporations, partnerships,

joint operations, trusts, and limited liability companies that are

controlled by farmers and ranchers and engaged primarily and

directly in farming or ranching in the United States, subject to

the conditions specified in this section. To be eligible for such

loans, applicants who are individuals, or, in the case of

cooperatives, corporations, partnerships, joint operations, trusts,

and limited liability companies, individuals holding a majority

interest in such entity, must (1) be citizens of the United States,

(2) for direct loans only, have either training or farming

experience that the Secretary determines is sufficient to assure

reasonable prospects of success in the proposed farming operations,

(3) be or will become owner-operators of not larger than family

farms (or in the case of cooperatives, corporations, partnerships,

joint operations, trusts, and limited liability companies in which

a majority interest is held by individuals who are related by blood

or marriage, as defined by the Secretary, such individuals must be

or will become either owners or operators of not larger than a

family farm and at least one such individual must be or will become

an operator of not larger than a family farm or, in the case of

holders of the entire interest who are related by blood or marriage

and all of whom are or will become farm operators, the ownership

interest of each such holder separately constitutes not larger than

a family farm, even if their interests collectively constitute

larger than a family farm, as defined by the Secretary), and (4) be

unable to obtain sufficient credit elsewhere to finance their

actual needs at reasonable rates and terms, taking into

consideration prevailing private and cooperative rates and terms in

the community in or near which the applicant resides for loans for

similar purposes and periods of time. In addition to the foregoing

requirements of this section, in the case of corporations,

partnerships, joint operations, trusts, and limited liability

companies, the family farm requirement of clause (3) of the

preceding sentence shall apply as well to the farm or farms in

which the entity has an ownership and operator interest and the

requirement of clause (4) of the preceding sentence shall apply as

well to the entity in the case of cooperatives, corporations,

partnerships, joint operations, trusts, and limited liability

companies.

(b) Direct loans

(1) In general

Subject to paragraph (3), the Secretary may make a direct loan

under this subchapter only to a farmer or rancher who has

participated in the business operations of a farm or ranch for

not less than 3 years and -

(A) is a qualified beginning farmer or rancher;

(B) has not received a previous direct farm ownership loan

made under this subchapter; or

(C) has not received a direct farm ownership loan under this

subchapter more than 10 years before the date the new loan

would be made.

(2) Youth loans

The operation of an enterprise by a youth under section 1941(b)

of this title shall not be considered the operation of a farm or

ranch for purposes of paragraph (1).

(3) Transition rule

(A) In general

Subject to subparagraphs (B) and (C), the Secretary may make

a direct loan under this subchapter to a farmer or rancher who

has a direct loan outstanding under this subchapter on April 4,

1996.

(B) Less than 5 years

If, as of April 4, 1996, a farmer or rancher has had a direct

loan outstanding under this subchapter for less than 5 years,

the Secretary shall not make a loan to the farmer or rancher

under subparagraph (A) after the date that is 10 years after

April 4, 1996.

(C) 5 years or more

If, as of April 4, 1996, a farmer or rancher has had a direct

loan outstanding under this subchapter for 5 years or more, the

Secretary shall not make a loan to the farmer or rancher under

subparagraph (A) after the date that is 5 years after April 4,

1996.

(D) Notice

Beginning with fiscal year 2000 not later than 12 months

before a borrower will become ineligible for direct loans under

this subchapter by reason of this paragraph, the Secretary

shall notify the borrower of such impending ineligibility.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 302, Aug. 8, 1961, 75 Stat. 307;

Pub. L. 91-620, Sec. 2, Dec. 31, 1970, 84 Stat. 1862; Pub. L.

95-334, title I, Sec. 101, Aug. 4, 1978, 92 Stat. 420; Pub. L.

97-98, title XVI, Sec. 1601(a), Dec. 22, 1981, 95 Stat. 1346; Pub.

L. 99-198, title XIII, Sec. 1301(a), 1302(a), 1303, Dec. 23, 1985,

99 Stat. 1518, 1519; Pub. L. 104-127, title VI, Sec. 601, Apr. 4,

1996, 110 Stat. 1084; Pub. L. 105-277, div. A, Sec. 101(a) (title

VIII, Sec. 804, 805(1)), Oct. 21, 1998, 112 Stat. 2681, 2681-39;

Pub. L. 107-171, title V, Sec. 5001, 5302(a), May 13, 2002, 116

Stat. 341, 344.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171, Sec. 5302(a), substituted

''joint operations, trusts, and limited liability companies'' for

''and joint operations'' wherever appearing.

Subsec. (b)(1). Pub. L. 107-171, Sec. 5001, substituted

''participated in the business operations of'' for ''operated'' in

introductory provisions.

1998 - Subsec. (a). Pub. L. 105-277, Sec. 101(a) (title VIII,

Sec. 805(1)), inserted ''for direct loans only,'' before ''have

either'' in cl. (2).

Subsec. (b)(3)(D). Pub. L. 105-277, Sec. 101(a) (title VIII, Sec.

804), added subpar. (D).

1996 - Subsec. (b). Pub. L. 104-127 added subsec. (b) and struck

out former subsec. (b) which read as follows: ''The Secretary may

not restrict eligibility for loans made or insured under this

subchapter for purposes set forth in section 1923 of this title

solely to borrowers of loans that are outstanding on December 23,

1985.''

1985 - Subsec. (a). Pub. L. 99-198, Sec. 1301(a), 1302(a)(1),

designated existing provisions as subsec. (a) and substituted -

(1) '', partnerships, and joint operations'' for ''and

partnerships'' wherever appearing after ''corporations'';

(2) '', partnerships, and joint operations'' for '', and

partnerships'' wherever appearing after ''corporations''; and

(3) ''individuals'' for ''members, stockholders, or partners,

as applicable,'' wherever appearing.

Pub. L. 99-198, Sec. 1303, in cl. (3) parenthetical, inserted

provision treating blood or marriage related owner-operators of the

entire farm interest as separate interest holders of not larger

than family farms though collective ownership constitutes a larger

than a family farm.

Subsec. (b). Pub. L. 99-198, Sec. 1302(a)(2), added subsec. (b).

1981 - Pub. L. 97-98 substituted ''corporations and partnerships,

the family farm'' for ''cooperatives, corporations, and

partnerships, the family farm'', and inserted ''in the case of

cooperatives, corporations, and partnerships'' at end.

1978 - Pub. L. 95-334 substituted provisions setting forth

eligibility criteria for loans to farmers and ranchers in the

United States, and to farm cooperatives and private domestic

corporations and partnerships controlled by farmers and ranchers

and engaged primarily and directly in farming or ranching in the

United States, for provisions setting forth eligibility criteria

for loans to farmers and ranchers in the United States, Puerto

Rico, and the Virgin Islands.

1970 - Pub. L. 91-620 provided that with respect to veterans as

defined in section 1983(e) of this title, a farm background shall

not be required as a condition precedent to obtaining any loan.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 663 of title VI of Pub. L. 104-127 provided that:

''(a) In General. - Except as provided in subsection (b), the

amendments made by this title (enacting sections 2008g to 2008i of

this title, amending this section and sections 1631, 1923, 1924,

1927, 1928, 1929, 1929a, 1932, 1934, 1941, 1942, 1946, 1949, 1961

to 1964, 1981, 1981d, 1983, 1983a, 1985, 1991, 1992, 1994, 1997,

1999, 2000, 2001, 2002, and 2003 of this title, repealing sections

1936, 1945, 1947, 1948, and 1968 of this title, and repealing

provisions set out as a note under section 1999 of this title)

shall become effective on the date of enactment of this Act (Apr.

4, 1996).

''(b) Delayed Effective Dates. - The amendments made by sections

601, 606, 611, 612, 622, 623, 625, 633, 640(1), 642, 645(1),

648(a), and 649 (enacting sections 2008g and 2008i of this title

and amending this section and sections 1929, 1941, 1942, 1962,

1963, 1964, 1981d, 1991, 1997, and 2001 of this title) shall become

effective 90 days after the date of enactment of this Act (Apr. 4,

1996).

''(c) Transition Provision. - The amendments made by sections 638

and 644 (amending sections 1985 and 2000 of this title) shall not

apply with respect to a complete application to acquire inventory

property submitted prior to the date of enactment of this Act (Apr.

4, 1996).

''(d) Regulations. - Notwithstanding any other provision of law,

regulations to implement the amendments made by this title shall be

published as interim final rules with request for comments and may

be made effective immediately on publication.''

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section

1801 of Pub. L. 97-98, set out as an Effective Date note under

section 4301 of this title.

EVALUATIONS OF DIRECT AND GUARANTEED LOAN PROGRAMS

Pub. L. 107-171, title V, Sec. 5301, May 13, 2002, 116 Stat. 344,

provided that:

''(a) Studies. - The Secretary of Agriculture shall conduct 2

studies of the direct and guaranteed loan progams (sic) under

sections 302 and 311 of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1922 and 1941), each of which shall include an

examination of the number, average principal amount, and

delinquency and default rates of loans provided or guaranteed

during the period covered by the study.

''(b) Periods Covered. -

''(1) First study. - One study under subsection (a) shall cover

the 1-year period that begins 1 year after the date of the

enactment of this section (May 13, 2002).

''(2) Second study. - One study under subsection (a) shall

cover the 1-year period that begins 3 years after such date of

enactment.

''(c) Reports to the Congress. - At the end of the period covered

by each study under this section, the Secretary of Agriculture

shall submit to the Congress a report that contains an evaluation

of the results of the study, including an analysis of the

effectiveness of loan programs referred to in subsection (a) in

meeting the credit needs of agricultural producers in an efficient

and fiscally responsible manner.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1925, 1934, 1983, 1994,

2006a of this title.

-CITE-

7 USC Sec. 1923 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1923. Purposes of loans

-STATUTE-

(a) Allowed purposes

(1) Direct loans

A farmer or rancher may use a direct loan made under this

subchapter only for -

(A) acquiring or enlarging a farm or ranch;

(B) making capital improvements to a farm or ranch;

(C) paying loan closing costs related to acquiring,

enlarging, or improving a farm or ranch;

(D) paying for activities to promote soil and water

conservation and protection described in section 1924 of this

title on a farm or ranch; or

(E) refinancing a temporary bridge loan made by a commercial

or cooperative lender to a farmer or rancher for the

acquisition of land for a farm or ranch, if -

(i) the Secretary approved an application for a direct farm

ownership loan to the farmer or rancher for acquisition of

the land; and

(ii) funds for direct farm ownership loans under section

1994(b) of this title were not available at the time at which

the application was approved.

(2) Guaranteed loans

A farmer or rancher may use a loan guaranteed under this

subchapter only for -

(A) acquiring or enlarging a farm or ranch;

(B) making capital improvements to a farm or ranch;

(C) paying loan closing costs related to acquiring,

enlarging, or improving a farm or ranch;

(D) paying for activities to promote soil and water

conservation and protection described in section 1924 of this

title on a farm or ranch; or

(E) refinancing indebtedness.

(b) Preferences

In making or guaranteeing a loan under this subchapter for

purchase of a farm or ranch, the Secretary shall give preference to

a person who -

(1) has a dependent family;

(2) to the extent practicable, is able to make an initial down

payment on the farm or ranch; or

(3) is an owner of livestock or farm or ranch equipment that is

necessary to successfully carry out farming or ranching

operations.

(c) Hazard insurance requirement

(1) In general

After the Secretary makes the determination required by

paragraph (2), the Secretary may not make a loan to a farmer or

rancher under this subchapter unless the farmer or rancher has,

or agrees to obtain, hazard insurance on any real property to be

acquired or improved with the loan.

(2) Determination

Not later than 180 days after April 4, 1996, the Secretary

shall determine the appropriate level of insurance to be required

under paragraph (1).

-SOURCE-

(Pub. L. 87-128, title III, Sec. 303, Aug. 8, 1961, 75 Stat. 307;

Pub. L. 87-703, title IV, Sec. 401(1), Sept. 27, 1962, 76 Stat.

631; Pub. L. 90-488, Sec. 1, Aug. 15, 1968, 82 Stat. 770; Pub. L.

95-113, title XIV, Sec. 1448(a), Sept. 29, 1977, 91 Stat. 1011;

Pub. L. 96-438, Sec. 1(1), Oct. 13, 1980, 94 Stat. 1871; Pub. L.

97-98, title XVI, Sec. 1602, Dec. 22, 1981, 95 Stat. 1346; Pub. L.

104-127, title VI, Sec. 602(a), Apr. 4, 1996, 110 Stat. 1085; Pub.

L. 107-171, title V, Sec. 5002, May 13, 2002, 116 Stat. 341.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a)(1)(E). Pub. L. 107-171 added subpar. (E).

1996 - Pub. L. 104-127 amended section generally, substituting

present provisions for provisions outlining preferences for loans

made or insured under this subchapter and defining terms

''improving farms'' and ''qualified non-fossil energy system''.

1981 - Subsec. (a). Pub. L. 97-98 substituted ''who have

dependent families'' for ''who are married or have dependent

families''.

1980 - Subsec. (b)(1). Pub. L. 96-438 substituted ''the

acquisition, installation, and modification'' for ''the acquisition

and installation'' and struck out ''in any residential structure''

after ''energy system''.

1977 - Pub. L. 95-113 designated existing provisions as subsec.

(a) and added subsec. (b).

1968 - Pub. L. 90-488 designated existing provisions as cls. (1),

(2), (4), (5), and added cl. (3).

1962 - Pub. L. 87-703 authorized loans to be made or insured for

recreational uses and facilities.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 602(b) of Pub. L. 104-127 provided that: ''Section

303(c)(1) of the Consolidated Farm and Rural Development Act (7

U.S.C. 1923(c)(1)) shall not apply until the Secretary of

Agriculture makes the determination required by section 303(c)(2)

of the Act.'' (The Secretary's determination relating to hazard

insurance under this provision was contained in interim rules

published Mar. 3, 1997, and effective Mar. 24, 1997, see 62 F.R.

9351.)

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section

1801 of Pub. L. 97-98, set out as an Effective Date note under

section 4301 of this title.

EFFECTIVE DATE OF 1977 AMENDMENT

Amendment by Pub. L. 95-113 effective Oct. 1, 1977, see section

1901 of Pub. L. 95-113, set out as a note under section 1307 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Powers, duties, and assets of agencies, offices, and other

entities within Department of Agriculture relating to rural

development functions transferred to Rural Development

Administration by section 2302(b) of Pub. L. 101-624.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1925, 1934, 1991, 2008f

of this title.

-CITE-

7 USC Sec. 1924 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1924. Soil and water conservation and protection

-STATUTE-

(a) In general

Loans may also be made or insured under this subchapter for soil

and water conservation and protection. Such loans may be made to

farm owners or tenants who are eligible borrowers under this

subchapter for -

(1) the installation of conservation structures, including

terraces, sod waterways, permanently vegetated stream borders and

filter strips, windbreaks (tree or grass), shelterbelts, and

living snow fences;

(2) the establishment of forest cover for sustained yield

timber management, erosion control, or shelterbelt purposes;

(3) the establishment or improvement of permanent pasture;

(4) the conversion to and maintenance of sustainable

agricultural production systems, as described by Department

technical guides and handbooks;

(5) the payment of costs of complying with section 3812 of

title 16; and

(6) other purposes consistent with plans for soil and water

conservation, integrated farm management, water quality

protection and enhancement, and wildlife habitat improvement.

(b) Priority

In making or guaranteeing loans under this subsection, (FOOTNOTE

1) the Secretary shall give priority to producers who use such

loans to build conservation structures or establish conservation

practices to comply with section 3812 of title 16.

(FOOTNOTE 1) So in original. Probably should be ''this

section,''.

(c) Loan maximum

The Secretary shall not make or insure a loan under this section

that exceeds the lesser of -

(1) the value of the farm or other security for such loan; or

(2) $50,000.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 304, Aug. 8, 1961, 75 Stat. 308;

Pub. L. 90-488, Sec. 2, Aug. 15, 1968, 82 Stat. 770; Pub. L.

92-419, title I, Sec. 102, Aug. 30, 1972, 86 Stat. 657; Pub. L.

95-334, title I, Sec. 102, Aug. 4, 1978, 92 Stat. 421; Pub. L.

101-624, title XVIII, Sec. 1802(a), Nov. 28, 1990, 104 Stat. 3817;

Pub. L. 102-237, title V, Sec. 501(a), Dec. 13, 1991, 105 Stat.

1865; Pub. L. 104-127, title VI, Sec. 603, Apr. 4, 1996, 110 Stat.

1085.)

-MISC1-

AMENDMENTS

1996 - Pub. L. 104-127, Sec. 603(2), inserted section catchline.

Subsec. (a). Pub. L. 104-127, Sec. 603(2), (5), redesignated

subsec. (a)(1) as (a), inserted heading, and redesignated subpars.

(A) to (F) as pars. (1) to (6), respectively. Former pars. (2) and

(3) redesignated subsecs. (b) and (c), respectively.

Subsec. (b). Pub. L. 104-127, Sec. 603(1), (3), redesignated

subsec. (a)(2) as (b), inserted heading, substituted ''guaranteeing

loans'' for ''insuring loans'', and struck out former subsec. (b)

which read as follows: ''Loans may also be made or insured under

this subchapter to residents of rural areas without regard to the

requirements of clauses (2) and (3) of section 1922 of this title

to acquire or establish in rural areas small business enterprises

to provide such residents with essential income.''

Subsec. (c). Pub. L. 104-127, Sec. 603(1), (4), (6), redesignated

subsec. (a)(3) as (c), inserted heading, redesignated subpars. (A)

and (B) as pars. (1) and (2), respectively, and struck out former

subsec. (c) which read as follows: ''Loans may also be made or

insured under this subchapter to any farm owners or tenants without

regard to the requirements of clauses (1), (2), and (3) of section

1922 of this title for the purposes of meeting Federal, State, or

local requirements for agricultural, animal, or poultry waste

pollution abatement and control facilities, including the

construction, modification, or relocation of farm or other

structures necessary to comply with such pollution abatement

requirements.''

1991 - Subsecs. (a), (d). Pub. L. 102-237 redesignated subsec.

(d) as (a) and moved it to appear before subsec. (b) and struck out

former subsec. (a) which read as follows: ''Loans may also be made

or insured under this subchapter to any farmowners or tenants

without regard to the requirements of section 1922(1), (2), and (3)

of this title for the purposes only of land and water development,

use and conservation, not including recreational uses and

facilities, and without regard to the requirements of section

1922(2) and (3) of this title, to farmowners or tenants to finance

outdoor recreational enterprises or to convert to recreational uses

their farming or ranching operations, including those heretofore

financed under this chapter.''

1990 - Subsec. (d). Pub. L. 101-624 added subsec. (d).

1978 - Subsec. (a). Pub. L. 95-334, Sec. 102(1), struck out

''individual'' after ''title, to''.

Subsec. (c). Pub. L. 95-334, Sec. 102(2), added subsec. (c).

1972 - Pub. L. 92-419 designated existing provisions as subsec.

(a) and struck out item (a) and (b) designations appearing before

''to any farmowner'' and ''without regard to'', respectively, and

added subsec. (b).

1968 - Pub. L. 90-488 designated existing provisions as cl. (a),

excluded recreational uses and facilities, and added cl. (b).

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(3) of Pub. L. 102-237, set out as a note under section 1421

of this title.

-TRANS-

TRANSFER OF FUNCTIONS

Powers, duties, and assets of agencies, offices, and other

entities within Department of Agriculture relating to rural

development functions transferred to Rural Development

Administration by section 2302(b) of Pub. L. 101-624.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 917, 1923, 1925, 1934,

1991, 6613 of this title.

-CITE-

7 USC Sec. 1925 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1925. Limitations on amount of farm ownership loans

-STATUTE-

(a) In general

The Secretary shall make or insure no loan under sections 1922,

1923, 1924, 1934, and 1935 of this title that would cause the

unpaid indebtedness under such sections of any one borrower to

exceed the smaller of (1) the value of the farm or other security,

or (2) in the case of a loan other than a loan guaranteed by the

Secretary, $200,000, or, in the case of a loan guaranteed by the

Secretary, $700,000 (increased, beginning with fiscal year 2000, by

the inflation percentage applicable to the fiscal year in which the

loan is guaranteed and reduced by the amount of any unpaid

indebtedness of the borrower on loans under subchapter II of this

chapter that are guaranteed by the Secretary).

(b) Determination of value

In determining the value of the farm, the Secretary shall

consider appraisals made by competent appraisers under rules

established by the Secretary.

(c) Inflation percentage

For purposes of this section, the inflation percentage applicable

to a fiscal year is the percentage (if any) by which -

(1) the average of the Prices Paid By Farmers Index (as

compiled by the National Agricultural Statistics Service of the

Department of Agriculture) for the 12-month period ending on

August 31 of the immediately preceding fiscal year; exceeds

(2) the average of such index (as so defined) for the 12-month

period ending on August 31, 1996.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 305, Aug. 8, 1961, 75 Stat. 308;

Pub. L. 91-620, Sec. 1, Dec. 31, 1970, 84 Stat. 1862; Pub. L.

92-419, title I, Sec. 103, Aug. 30, 1972, 86 Stat. 658; Pub. L.

91-524, title VIII, Sec. 807, as added Pub. L. 93-86, Sec.

1(27)(B), Aug. 10, 1973, 87 Stat. 237; Pub. L. 95-334, title I,

Sec. 103, Aug. 4, 1978, 92 Stat. 421; Pub. L. 102-554, Sec. 3, Oct.

28, 1992, 106 Stat. 4142; Pub. L. 105-277, div. A, Sec. 101(a)

(title VIII, Sec. 806(a)), Oct. 21, 1998, 112 Stat. 2681, 2681-39.)

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-277 inserted section catchline, designated

first sentence as subsec. (a), inserted heading, and substituted

''$700,000 (increased, beginning with fiscal year 2000, by the

inflation percentage applicable to the fiscal year in which the

loan is guaranteed and reduced by the amount of any unpaid

indebtedness of the borrower on loans under subchapter II of this

chapter that are guaranteed by the Secretary)'' for ''$300,000'',

designated second sentence as subsec. (b) and inserted heading, and

added subsec. (c).

1992 - Pub. L. 102-554 inserted reference to section 1935 of this

title.

1978 - Pub. L. 95-334 substituted provisions setting forth

requirements for loans under sections 1922, 1923, 1924, and 1934 of

this title for provisions setting forth requirements for loans

under sections 1922, 1923, and 1924 of this title.

1973 - Pub. L. 91-524, Sec. 807, as added by Pub. L. 93-86,

substituted ''$225,000'' for ''$100,000'' in cl. (a), added cl.

(b), and redesignated former cl. (b) as (c).

1972 - Pub. L. 92-419 struck out ''normal'' before ''value'' in

first and second sentences and before ''market value'' in last

sentence.

1970 - Pub. L. 91-620 substituted ''$100,000'' for ''$60,000''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1943 of this title.

-CITE-

7 USC Sec. 1926 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926. Water and waste facility loans and grants

-STATUTE-

(a) In general

(1) The Secretary is also authorized to make or insure loans to

associations, including corporations not operated for profit,

Indian tribes on Federal and State reservations and other federally

recognized Indian tribes, and public and quasi-public agencies to

provide for the application or establishment of soil conservation

practices, shifts in land use, the conservation, development, use,

and control of water, and the installation or improvement of

drainage or waste disposal facilities, recreational developments,

and essential community facilities including necessary related

equipment, all primarily serving farmers, ranchers, farm tenants,

farm laborers, rural businesses, and other rural residents, and to

furnish financial assistance or other aid in planning projects for

such purposes. The Secretary may also make or insure loans to

communities that have been designated as rural empowerment zones or

rural enterprise communities pursuant to part I of subchapter U of

chapter 1 of title 26, or as rural enterprise communities pursuant

to section 766 of the Agriculture, Rural Development, Food and Drug

Administration, and Related Agencies Appropriations Act, 1999

(Public Law 105-277; 112 Stat. 2681, 2681-37), to provide for the

installation or improvement of essential community facilities

including necessary related equipment, and to furnish financial

assistance or other aid in planning projects for such purposes.

The Secretary may also make loans to any borrower to whom a loan

has been made under the Rural Electrification Act of 1936 (7 U.S.C.

901 et seq.), for the conservation, development, use, and control

of water, and the installation of drainage or waste disposal

facilities, primarily serving farmers, ranchers, farm tenants, farm

laborers, rural businesses, and other rural residents. When any

loan made for a purpose specified in this paragraph is sold out of

the Agricultural Credit Insurance Fund as an insured loan, the

interest or other income thereon paid to an insured holder shall be

included in gross income for purposes of chapter 1 of title 26.

With respect to loans of less than $500,000 made or insured under

this paragraph that are evidenced by notes and mortgages, as

distinguished from bond issues, borrowers shall not be required to

appoint bond counsel to review the legal validity of the loan

whenever the Secretary has available legal counsel to perform such

review.

(2) Water, waste disposal, and wastewater facility grants. -

(A) Authority. -

(i) In general. - The Secretary is authorized to make grants

to such associations to finance specific projects for works for

the development, storage, treatment, purification, or

distribution of water or the collection, treatment, or disposal

of waste in rural areas.

(ii) Amount. - The amount of any grant made under the

authority of this subparagraph shall not exceed 75 per centum

of the development cost of the project to serve the area which

the association determines can be feasibly served by the

facility and to adequately serve the reasonably foreseeable

growth needs of the area.

(iii) Grant rate. - The Secretary shall fix the grant rate

for each project in conformity with regulations issued by the

Secretary that shall provide for a graduated scale of grant

rates establishing higher rates for projects in communities

that have lower community population and income levels.

(B) Revolving funds for financing water and wastewater

projects. -

(i) In general. - The Secretary may make grants to qualified

private, nonprofit entities to capitalize revolving funds for

the purpose of providing financing to eligible entities for -

(I) predevelopment costs associated with proposed water and

wastewater projects or with existing water and wastewater

systems; and

(II) short-term costs incurred for replacement equipment,

small-scale extension services, or other small capital

projects that are not part of the regular operations and

maintenance activities of existing water and wastewater

systems.

(ii) Eligible entities. - To be eligible to obtain financing

from a revolving fund under clause (i), an eligible entity must

be eligible to obtain a loan, loan guarantee, or grant under

paragraph (1) or this paragraph.

(iii) Maximum amount of financing. - The amount of financing

made to an eligible entity under this subparagraph shall not

exceed -

(I) $100,000 for costs described in clause (i)(I); and

(II) $100,000 for costs described in clause (i)(II).

(iv) Term. - The term of financing provided to an eligible

entity under this subparagraph shall not exceed 10 years.

(v) Administration. - The Secretary shall limit the amount of

grant funds that may be used by a grant recipient for

administrative costs incurred under this subparagraph.

(vi) Annual report. - A nonprofit entity receiving a grant

under this subparagraph shall submit to the Secretary an annual

report that describes the number and size of communities served

and the type of financing provided.

(vii) Authorization of appropriations. - There are authorized

to be appropriated to carry out this subparagraph $30,000,000

for each of fiscal years 2002 through 2007.

(3) No grant shall be made under paragraph (2) of this subsection

in connection with any project unless the Secretary determines that

the project (i) will serve a rural area which, if such project is

carried out, is not likely to decline in population below that for

which the project was designed, (ii) is designed and constructed so

that adequate capacity will or can be made available to serve the

present population of the area to the extent feasible and to serve

the reasonably foreseeable growth needs of the area, and (iii) is

necessary for an orderly community development consistent with a

comprehensive community water, waste disposal, or other development

plan of the rural area.

(4)(A) The term ''development cost'' means the cost of

construction of a facility and the land, easements, and

rights-of-way, and water rights necessary to the construction and

operation of the facility.

(B) The term ''project'' shall include facilities providing

central service or facilities serving individual properties, or

both.

(5) Application requirements. - Not earlier than 60 days before a

preliminary application is filed for a loan under paragraph (1) or

a grant under paragraph (2) for a water or waste disposal purpose,

a notice of the intent of the applicant to apply for the loan or

grant shall be published in a general circulation newspaper. The

selection of engineers for a project design shall be done by a

request for proposals by the applicant.

(6) The Secretary may make grants aggregating not to exceed

$30,000,000 in any fiscal year to public bodies or such other

agencies as the Secretary may determine having authority to prepare

comprehensive plans for the development of water or waste disposal

systems in rural areas which do not have funds available for

immediate undertaking of the preparation of such plan.

(7) Repealed. Pub. L. 107-171, title VI, Sec. 6020(b)(1), May 13,

2002, 116 Stat. 363.

(8) In each instance where the Secretary receives two or more

applications for financial assistance for projects that would serve

substantially the same group of residents within a single rural

area, and one such application is submitted by a city, town, county

or other unit of general local government, he shall, in the absence

of substantial reasons to the contrary, provide such assistance to

such city, town, county or other unit of general local government.

(9) Conformity with state drinking water standards. - No Federal

funds shall be made available under this section for a water system

unless the Secretary determines that the water system will make

significant progress toward meeting the standards established under

title XIV of the Public Health Service Act (commonly known as the

''Safe Drinking Water Act'') (42 U.S.C. 300f et seq.).

(10) Conformity with federal and state water pollution control

standards. - No Federal funds shall be made available under this

section for a water treatment discharge or waste disposal system

unless the Secretary determines that the effluent from the system

conforms with applicable Federal and State water pollution control

standards.

(11) Rural business opportunity grants. -

(A) In general. - The Secretary may make grants, not to exceed

$1,500,000 annually, to public bodies, private nonprofit

community development corporations or entities, or such other

agencies as the Secretary may select to enable the recipients -

(i) to identify and analyze business opportunities, including

opportunities in export markets, that will use local rural

economic and human resources;

(ii) to identify, train, and provide technical assistance to

existing or prospective rural entrepreneurs and managers;

(iii) to establish business support centers and otherwise

assist in the creation of new rural businesses, the development

of methods of financing local businesses, and the enhancement

of the capacity of local individuals and entities to engage in

sound economic activities;

(iv) to conduct regional, community, and local economic

development planning and coordination, and leadership

development; and

(v) to establish centers for training, technology, and trade

that will provide training to rural businesses in the

utilization of interactive communications technologies to

develop international trade opportunities and markets.

(B) Criteria. - In awarding the grants, the Secretary shall

consider, among other criteria to be established by the Secretary

-

(i) the extent to which the applicant provides development

services in the rural service area of the applicant; and

(ii) the capability of the applicant to accomplish the

activities described in the relevant clauses of subparagraph

(A).

(C) Coordination. - The Secretary shall ensure, to the maximum

extent practicable, that assistance provided under this paragraph

is coordinated with and delivered in cooperation with similar

services or assistance provided to rural residents by the

Cooperative State Research, Education, and Extension Service or

other Federal agencies.

(D) Authorization of appropriations. - There are authorized to

be appropriated to carry out this paragraph $15,000,000 for each

of fiscal years 1996 through 2007.

(12)(A) The Secretary shall, in cooperation with institutions

eligible to receive funds under the Act of July 2, 1862 (12 Stat.

503-505, as amended; 7 U.S.C. 301-305, 307 and 308), or the Act of

August 30, 1890 (26 Stat. 417-419, as amended; 7 U.S.C. 321-326 and

328), including the Tuskegee Institute and State, substate, and

regional planning bodies, establish a system for the dissemination

of information and technical assistance on federally sponsored or

funded programs. The system shall be for the use of institutions

eligible to receive funds under the Act of July 2, 1862 (12 Stat.

503-505, as amended; 7 U.S.C. 301-305, 307, and 308), or the Act of

August 30, 1890 (26 Stat. 417-419, as amended; 7 U.S.C. 321-326 and

328), including the Tuskegee Institute and State, substate, and

regional planning bodies, and other persons concerned with rural

development.

(B) The informational system developed under this paragraph shall

contain all pertinent information, including, but not limited to,

information contained in the Federal Procurement Data System,

Federal Assistance Program Retrieval System, Catalogue of Federal

Domestic Assistance, Geographic Distribution of Federal Funds,

United States Census, and Code of Federal Regulations.

(C) The Secretary shall obtain from all other Federal departments

and agencies comprehensive, relevant, and applicable information on

programs under their jurisdiction that are operated in rural areas.

(D) Of the sums authorized to be appropriated to carry out the

provisions of this chapter, not more than $1,000,000 per year may

be expended to carry out the provisions of this paragraph.

(13) In the making of loans and grants for community waste

disposal and water facilities under paragraphs (1) and (2) of this

subsection the Secretary shall accord highest priority to the

application of any municipality or other public agency (including

an Indian tribe on a Federal or State reservation or other

federally recognized Indian tribal group) in a rural community

having a population not in excess of five thousand five hundred and

which, in the case of water facility loans, has a community water

supply system, where the Secretary determines that due to

unanticipated diminution or deterioration of its water supply,

immediate action is needed, or in the case of waste disposal, has a

community waste disposal system, where the Secretary determines

that due to unanticipated occurrences the system is not adequate to

the needs of the community. The Secretary shall utilize the Soil

Conservation Service in rendering technical assistance to

applicants under this paragraph to the extent he deems appropriate.

(14) Rural water and wastewater technical assistance and training

programs. -

(A) In general. - The Secretary may make grants to private

nonprofit organizations for the purpose of enabling them to

provide to associations described in paragraph (1) of this

subsection technical assistance and training to -

(i) identify, and evaluate alternative solutions to, problems

relating to the obtaining, storage, treatment, purification, or

distribution of water or the collection, treatment, or disposal

of waste in rural areas;

(ii) prepare applications to receive financial assistance for

any purpose specified in paragraph (2) of this subsection from

any public or private source; and

(iii) improve the operation and maintenance practices at any

existing works for the storage, treatment, purification, or

distribution of water or the collection, treatment, or disposal

of waste in rural areas.

(B) Selection priority. - In selecting recipients of grants to

be made under subparagraph (A), the Secretary shall give priority

to private nonprofit organizations that have experience in

providing the technical assistance and training described in

subparagraph (A) to associations serving rural areas in which

residents have low income and in which water supply systems or

waste facilities are unhealthful.

(C) Funding. - Not less than 1 nor more than 3 percent of any

funds appropriated to carry out paragraph (2) of this subsection

for any fiscal year shall be reserved for grants under

subparagraph (A) unless the applications, qualifying for grants,

received by the Secretary from eligible nonprofit organizations

for the fiscal year total less than 1 per centum of those funds.

(15) In the case of water and waste disposal facility projects

serving more than one separate rural community, the Secretary shall

use the median population level and the community income level of

all the separate communities to be served in applying the standards

specified in paragraph (2) of this subsection and section

1927(a)(3)(A) of this title.

(16) Grants under paragraph (2) of this subsection may be used to

pay the local share requirements of another Federal grant-in-aid

program to the extent permitted under the law providing for such

grant-in-aid program.

(17)(A) In the approval and administration of a loan made under

paragraph (1) for a water or waste disposal facility, the Secretary

shall consider fully any recommendation made by the loan applicant

or borrower concerning the technical design and choice of materials

to be used for such facility.

(B) If the Secretary determines that a design or materials, other

than those that were recommended, should be used in the water or

waste disposal facility, the Secretary shall provide such applicant

or borrower with a comprehensive justification for such

determination.

(18) In making or insuring loans or making grants under this

subsection, the Secretary may not condition approval of such loans

or grants upon any requirement, condition or certification other

than those specified under this chapter.

(19) Community facilities grant program. -

(A) In general. - The Secretary may make grants, in a total

amount not to exceed $10,000,000 for any fiscal year, to

associations, units of general local government, nonprofit

corporations, Indian tribes (as such term is defined under

section 450b(e) of title 25), (FOOTNOTE 1) and federally

recognized Indian tribes to provide the Federal share of the cost

of developing specific essential community facilities in rural

areas.

(FOOTNOTE 1) So in original.

(B) Federal share. -

(i) In general. - Except as provided in clauses (ii) and

(iii), the Secretary shall, by regulation, establish the amount

of the Federal share of the cost of the facility under this

paragraph.

(ii) Maximum amount. - The amount of a grant provided under

this paragraph for a facility shall not exceed 75 percent of

the cost of developing the facility.

(iii) Graduated scale. - The Secretary shall provide for a

graduated scale for the amount of the Federal share provided

under this paragraph, with higher Federal shares for facilities

in communities that have lower community population and income

levels, as determined by the Secretary.

(C) Reservation of funds for child day care facilities. -

(i) In general. - For each fiscal year, not less than 10

percent of the funds made available to carry out this paragraph

shall be reserved for grants to pay the Federal share of the

cost of developing and constructing day care facilities for

children in rural areas.

(ii) Release. - Funds reserved under clause (i) for a fiscal

year shall be reserved only until April 1 of the fiscal year.

(20) Community facilities grant program for rural communities

with extreme unemployment and severe economic depression. -

(A) Definition of not employed rate. - In this paragraph, the

term ''not employed rate'', with respect to a community, means

the percentage of individuals over the age of 18 who reside

within the community and who are ready, willing, and able to be

employed but are unable to find employment, as determined by the

department of labor of the State in which the community is

located.

(B) Grant authority. - The Secretary may make grants to

associations, units of general local government, nonprofit

corporations, and Indian tribes (as defined in section 450b of

title 25) in a State to provide the Federal share of the cost of

developing specific essential community facilities in rural

communities with respect to which the not employed rate is

greater than the lesser of -

(i) 500 percent of the average national unemployment rate on

November 9, 2000, as determined by the Bureau of Labor

Statistics; or

(ii) 200 percent of the average national unemployment rate

during the Great Depression, as determined by the Bureau of

Labor Statistics.

(C) Federal share. - Paragraph (19)(B) shall apply to a grant

made under this paragraph.

(D) Authorization of appropriations. - There are authorized to

be appropriated to carry out this paragraph $50,000,000 for

fiscal year 2001 and such sums as are necessary for each

subsequent fiscal year, of which not more than 5 percent of the

amount made available for a fiscal year shall be available for

community planning and implementation.

(E) Rural broadband. - Notwithstanding subparagraph (C), the

Secretary may make grants to state (FOOTNOTE 2) agencies for use

by regulatory commissions in states (FOOTNOTE 2) with rural

communities without local dial-up Internet access or broadband

service to establish a competitively, technologically neutral

grant program to telecommunications carriers or cable operators

that establish common carrier facilities and services which, in

the commission's determination, will result in the long-term

availability to such communities of affordable broadband services

which are used for the provision of high speed Internet access.

(FOOTNOTE 2) So in original. Probably should be capitalized.

(21) Community facilities grant program for rural communities

with high levels of out-migration or loss of population. -

(A) Grant authority. - The Secretary may make grants to

associations, units of general local government, nonprofit

corporations, and Indian tribes (as defined in section 450b of

title 25) in a State to provide the Federal share of the cost of

developing specific essential community facilities in any

geographic area -

(i) that is represented by -

(I) any political subdivision of a State;

(II) an Indian tribe on a Federal or State reservation; or

(III) other federally recognized Indian tribal group;

(ii) that is located in a rural area (as defined in section

2009 (FOOTNOTE 3) of this title);

(FOOTNOTE 3) See References in Text note below.

(iii) with respect to which, during the most recent 5-year

period, the net out-migration of inhabitants, or other

population loss, from the area equals or exceeds 5 percent of

the population of the area; and

(iv) that has a median household income that is less than the

nonmetropolitan median household income of the United States.

(B) Federal share. - Paragraph (19)(B) shall apply to a grant

made under this paragraph.

(C) Authorization of appropriations. - There are authorized to

be appropriated to carry out this paragraph $50,000,000 for

fiscal year 2001 and such sums as are necessary for each

subsequent fiscal year, of which not more than 5 percent of the

amount made available for a fiscal year shall be available for

community planning and implementation.

(22) Rural water and wastewater circuit rider program. -

(A) In general. - The Secretary shall establish a national

rural water and wastewater circuit rider program that is based on

the rural water circuit rider program of the National Rural Water

Association that (as of May 13, 2002) receives funding from the

Secretary, acting through the Rural Utilities Service.

(B) Relationship to existing program. - The program established

under subparagraph (A) shall not affect the authority of the

Secretary to carry out the circuit rider program for which funds

are made available under the heading ''rural community

advancement program'' in title III of the Agriculture, Rural

Development, Food and Drug Administration, and Related Agencies

Appropriations Act, 2002 (115 Stat. 719).

(C) Authorization of appropriations. - There is authorized to

be appropriated to carry out this paragraph $15,000,000 for

fiscal year 2003 and each fiscal year thereafter.

(23) Multijurisdictional regional planning organizations. -

(A) Grants. - The Secretary shall provide grants to

multijurisdictional regional planning and development

organizations to pay the Federal share of the cost of providing

assistance to local governments to improve the infrastructure,

services, and business development capabilities of local

governments and local economic development organizations.

(B) Priority. - In determining which organizations will receive

a grant under this paragraph, the Secretary shall give priority

to an organization that -

(i) serves a rural area that, during the most recent 5-year

period -

(I) had a net out-migration of inhabitants, or other

population loss, from the rural area that equals or exceeds 5

percent of the population of the rural area; or

(II) had a median household income that is less than the

nonmetropolitan median household income of the applicable

State; and

(ii) has a history of providing substantive assistance to

local governments and economic development organizations.

(C) Federal share. - A grant provided under this paragraph

shall be for not more than 75 percent of the cost of providing

assistance described in subparagraph (A).

(D) Maximum amount of grants. - The amount of a grant provided

to an organization under this paragraph shall not exceed

$100,000.

(E) Authorization of appropriations. - There is authorized to

be appropriated to carry out this paragraph $30,000,000 for each

of fiscal years 2003 through 2007.

(24) Loan guarantees for water, wastewater, and essential

community facilities loans. -

(A) In general. - The Secretary may guarantee a loan made to

finance a community facility or water or waste facility project

in a rural area, including a loan financed by the net proceeds of

a bond described in section 142(a) of title 26.

(B) Requirements. - To be eligible for a loan guarantee under

subparagraph (A), an individual or entity offering to purchase

the loan shall demonstrate to the Secretary that the person has -

(i) the capabilities and resources necessary to service the

loan in a manner that ensures the continued performance of the

loan, as determined by the Secretary; and

(ii) the ability to generate capital to provide borrowers of

the loan with the additional credit necessary to properly

service the loan.

(25) Tribal college and university essential community

facilities. -

(A) In general. - The Secretary may make grants to tribal

colleges and universities (as defined in section 1059c of title

20) to provide the Federal share of the cost of developing

specific tribal college or university essential community

facilities in rural areas.

(B) Federal share. -

(i) In general. - Except as provided in clauses (ii) and

(iii), the Secretary shall, by regulation, establish the

maximum percentage of the cost of the facility that may be

covered by a grant under this paragraph.

(ii) Maximum amount. - The amount of a grant provided under

this paragraph for a facility shall not exceed 75 percent of

the cost of developing the facility.

(iii) Graduated scale. - The Secretary shall provide for a

graduated scale of the percentages of the cost covered by a

grant made under this paragraph that provides higher

percentages for facilities in communities that have lower

community population and income levels, as determined by the

Secretary.

(C) Authorization of appropriations. - There is authorized to

be appropriated to carry out this paragraph $10,000,000 for each

of fiscal years 2003 through 2007.

(b) Curtailment or limitation of service prohibited

The service provided or made available through any such

association shall not be curtailed or limited by inclusion of the

area served by such association within the boundaries of any

municipal corporation or other public body, or by the granting of

any private franchise for similar service within such area during

the term of such loan; nor shall the happening of any such event be

the basis of requiring such association to secure any franchise,

license, or permit as a condition to continuing to serve the area

served by the association at the time of the occurrence of such

event.

(c) Repealed. Pub. L. 91-606, title III, Sec. 302(2), Dec. 31,

1970, 84 Stat. 1759

(d) Carryover of unused authorizations for appropriations

Any amounts appropriated under this section shall remain

available until expended, and any amounts authorized for any fiscal

year under this section but not appropriated may be appropriated

for any succeeding fiscal year.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 306, Aug. 8, 1961, 75 Stat. 308;

Pub. L. 87-703, title IV, Sec. 401(2), Sept. 27, 1962, 76 Stat.

632; Pub. L. 89-240, Sec. 1, Oct. 7, 1965, 79 Stat. 931; Pub. L.

89-769, Sec. 6(b), Nov. 6, 1966, 80 Stat. 1318; Pub. L. 90-488,

Sec. 3-5, Aug. 15, 1968, 82 Stat. 770; Pub. L. 91-524, title VIII,

Sec. 806(a), Nov. 30, 1970, 84 Stat. 1383; Pub. L. 91-606, title

III, Sec. 302(2), Dec. 31, 1970, 84 Stat. 1759; Pub. L. 91-617,

Sec. 1(a), Dec. 31, 1970, 84 Stat. 1855; Pub. L. 92-419, title I,

Sec. 104-112, Aug. 30, 1972, 86 Stat. 658, 659; Pub. L. 91-524,

title VIII, Sec. 816(c), as added Pub. L. 93-86, Sec. 1(27)(B),

Aug. 10, 1973, 87 Stat. 240; Pub. L. 95-334, title I, Sec.

104-107(a), Aug. 4, 1978, 92 Stat. 421, 422; Pub. L. 96-355, Sec.

7, Sept. 24, 1980, 94 Stat. 1174; Pub. L. 96-438, Sec. 2(1), Oct.

13, 1980, 94 Stat. 1871; Pub. L. 97-35, title I, Sec. 121, Aug. 13,

1981, 95 Stat. 368; Pub. L. 99-198, title XIII, Sec. 1304(a), Dec.

23, 1985, 99 Stat. 1519; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100

Stat. 2095; Pub. L. 101-624, title XXIII, Sec. 2316(b), 2321, 2328,

2329, 2341, 2342, 2393, Nov. 28, 1990, 104 Stat. 4008, 4010, 4017,

4026, 4027, 4057; Pub. L. 102-237, title VII, Sec. 701(a),

(h)(1)(A), (B), Dec. 13, 1991, 105 Stat. 1879, 1880; Pub. L.

103-129, Sec. 3, Nov. 1, 1993, 107 Stat. 1366; Pub. L. 103-354,

title II, Sec. 235(b)(5), Oct. 13, 1994, 108 Stat. 3222; Pub. L.

104-127, title VII, Sec. 741(a), 758, 763, Apr. 4, 1996, 110 Stat.

1122, 1132, 1148; Pub. L. 106-387, Sec. 1(a) (title VII, Sec. 773),

Oct. 28, 2000, 114 Stat. 1549, 1549A-45; Pub. L. 106-472, title

III, Sec. 304(a), 305(a), Nov. 9, 2000, 114 Stat. 2070, 2071; Pub.

L. 107-76, title VII, Sec. 762, Nov. 28, 2001, 115 Stat. 743; Pub.

L. 107-171, title VI, Sec. 6001-6007(a), 6008, 6020(b)(1), May 13,

2002, 116 Stat. 352-355, 363.)

-REFTEXT-

REFERENCES IN TEXT

Section 766 of the Agriculture, Rural Development, Food and Drug

Administration, and Related Agencies Appropriations Act, 1999,

referred to in subsec. (a)(1), is Pub. L. 105-277, div. A, Sec.

101(a)(title VII, Sec. 766), Oct. 21, 1998, 112 Stat. 2681,

2681-37, which is not classified to the Code.

The Rural Electrification Act of 1936, referred to in subsec.

(a)(1), is act May 20, 1936, ch. 432, 49 Stat. 1363, as amended,

which is classified generally to chapter 31 (Sec. 901 et seq.) of

this title. For complete classification of this Act to the Code,

see section 901 of this title and Tables.

The Public Health Service Act, referred to in subsec. (a)(9), is

act July 1, 1944, ch. 373, 58 Stat. 682, as amended. Title XIV of

the Act, known as the Safe Drinking Water Act, is classified

principally to subchapter XII (Sec. 300f et seq.) of chapter 6A of

Title 42, The Public Health and Welfare. For complete

classification of these Acts to the Code, see Short Title note and

Short Title of 1974 Amendments note set out under section 201 of

Title 42 and Tables.

Act of July 2, 1862 (12 Stat. 503-505, as amended; 7 U.S.C.

301-305, 307 and 308), referred to in subsec. (a)(12)(A), is act

July 2, 1862, ch. 130, 12 Stat. 503, as amended, popularly known as

the Morrill Act and also as the First Morrill Act, which is

classified generally to subchapter I (Sec. 301 et seq.) of chapter

13 of this title. For complete classification of this Act to the

Code, see Short Title note set out under section 301 of this title

and Tables.

Act of August 30, 1890 (26 Stat. 417-419, as amended; 7 U.S.C.

321-326 and 328), referred to in subsec. (a)(12)(A), is act Aug.

30, 1890, ch. 841, 26 Stat. 417, as amended, popularly known as the

Agricultural College Act of 1890 and also as the Second Morrill

Act, which is classified generally to subchapter II (Sec. 321 et

seq.) of chapter 13 of this title. For complete classification of

this Act to the Code, see Short Title note set out under section

321 of this title and Tables.

For definition of ''this chapter'', referred to in subsec.

(a)(12)(D), (18), see note set out under section 1921 of this

title.

Section 2009 of this title, referred to in subsec.

(a)(21)(A)(ii), was subsequently amended, and no longer defines the

term ''rural area''.

The Agriculture, Rural Development, Food and Drug Administration,

and Related Agencies Appropriations Act, 2002, referred to in

subsec. (a)(22)(B), is Pub. L. 107-76, Nov. 28, 2001, 115 Stat.

704. Provisions under the heading ''rural community advancement

program'' in title III of the Act appear at 115 Stat. 719 and are

not classified to the Code.

-MISC2-

AMENDMENTS

2002 - Subsec. (a)(1). Pub. L. 107-171, Sec. 6001, inserted after

first sentence ''The Secretary may also make or insure loans to

communities that have been designated as rural empowerment zones or

rural enterprise communities pursuant to part I of subchapter U of

chapter 1 of title 26, or as rural enterprise communities pursuant

to section 766 of the Agriculture, Rural Development, Food and Drug

Administration, and Related Agencies Appropriations Act, 1999

(Public Law 105-277; 112 Stat. 2681, 2681-37), to provide for the

installation or improvement of essential community facilities

including necessary related equipment, and to furnish financial

assistance or other aid in planning projects for such purposes.''

Subsec. (a)(2). Pub. L. 107-171, Sec. 6002, inserted heading,

designated existing provisions as subpar. (A) and inserted heading,

designated first sentence of subpar. (A) as cl. (i), inserted

heading, and struck out ''aggregating not to exceed $590,000,000 in

any fiscal year'' after ''authorized to make grants'', designated

second sentence of subpar. (A) as cl. (ii), inserted heading, and

substituted ''subparagraph'' for ''paragraph'', designated third

sentence of subpar. (A) as cl. (iii) and inserted heading, and

added subpar. (B).

Subsec. (a)(7). Pub. L. 107-171, Sec. 6020(b)(1), struck out

heading and text of par. (7). Text read as follows: ''For the

purpose of water and waste disposal grants and direct and

guaranteed loans provided under paragraphs (1) and (2), the terms

'rural' and 'rural area' mean a city, town, or unincorporated area

that has a population of no more than 10,000 inhabitants.''

Subsec. (a)(11)(D). Pub. L. 107-171, Sec. 6003, substituted

''$15,000,000'' for ''$7,500,000'' and ''2007'' for ''2002''.

Subsec. (a)(19)(C). Pub. L. 107-171, Sec. 6004, added subpar.

(C).

Subsec. (a)(22) to (25). Pub. L. 107-171, Sec. 6005-6007(a),

6008, added pars. (22) to (25).

2001 - Subsec. (a)(20)(E). Pub. L. 107-76 added subpar. (E).

2000 - Subsec. (a)(19)(A). Pub. L. 106-387, which directed

amendment of section 306(a)(19)(A) of the Consolidated Farmers Home

Administration Act of 1961 by inserting '', Indian tribes (as such

term is defined under section 450b(e) of title 25),'' after

''nonprofit corporations'', was executed to this section, which is

section 306(a)(19)(A) of the Consolidated Farm and Rural

Development Act, to reflect the probable intent of Congress.

Subsec. (a)(20). Pub. L. 106-472, Sec. 304(a), added par. (20).

Subsec. (a)(21). Pub. L. 106-472, Sec. 305(a), added par. (21).

1996 - Subsec. (a)(2). Pub. L. 104-127, Sec. 741(a)(1),

substituted ''$590,000,000'' for ''$500,000,000''.

Subsec. (a)(5). Pub. L. 104-127, Sec. 758, added par. (5).

Subsec. (a)(7). Pub. L. 104-127, Sec. 741(a)(2), added par. (7)

and struck out former par. (7) which read as follows: ''As used in

this chapter, the terms 'rural' and 'rural area' shall not include

any area in any city or town which has a population in excess of

ten thousand inhabitants, except that (A) for the purpose of loans

for essential community facilities under subsection (a)(1) of this

section, the terms 'rural' and 'rural area' may include any area in

any city or town that has a population not in excess of twenty

thousand inhabitants; and (B) for purposes of loans and grants for

private business enterprises under sections 1924(b), 1932 and

1942(b), (c), and (d) of this title the terms 'rural' and 'rural

area' may include all territory of a State that is not within the

outer boundary of any city having a population of fifty thousand or

more and its immediately adjacent urbanized and urbanizing areas

with a population density of more than one hundred persons per

square mile, as determined by the Secretary of Agriculture

according to the latest decennial census of the United States:

Provided, That special consideration for such loans and grants

shall be given to areas other than cities having a population of

more than twenty-five thousand.''

Subsec. (a)(9), (10). Pub. L. 104-127, Sec. 741(a)(3), added

pars. (9) and (10) and struck out former pars. (9) and (10) which

read as follows:

''(9) No Federal funds shall be authorized for use unless it be

certified by the appropriate State water pollution control agency

that the water supply system authorized will not result in

pollution of waters of the State in excess of standards established

by that agency.

''(10) In the case of sewers and waste disposal systems, no

Federal funds shall be advanced hereunder unless the appropriate

State water pollution control agency shall certify that the

effluent therefrom shall conform with appropriate State and Federal

water pollution control standards when and where established.''

Subsec. (a)(11). Pub. L. 104-127, Sec. 741(a)(3), added par. (11)

and struck out former par. (11) which authorized grants to public

bodies, private nonprofit community development corporations or

entities, or other agencies to enable such recipients to (1)

identify and analyze business opportunities, including

opportunities in export markets, that would use local rural

economic and human resources, (2) identify, train, and provide

technical assistance to existing or prospective rural entrepreneurs

and managers, (3) establish business support centers and otherwise

assist in creation of new rural businesses, development of methods

of financing local businesses, and enhancing capacity of local

individuals and entities to engage in sound economic activities,

and (4) conduct regional, community, and local economic development

planning and coordination, and leadership development.

Subsec. (a)(14). Pub. L. 104-127, Sec. 741(a)(6)(A)-(D)(i),

inserted par. heading and headings for subpars. (A) to (C), and

realigned margins of subpars. and cls. (i) to (iii) of subpar. (A).

Pub. L. 104-127, Sec. 741(a)(4), (5), redesignated par. (16) as

(14) and struck out former par. (14) which read as follows:

''(14)(A) The Secretary, under such reasonable rules and

conditions as he shall establish, shall make grants to eligible

volunteer fire departments for up to 50 per centum of the cost of

firefighting equipment needed by such departments but which such

departments are unable to purchase through the resources otherwise

available to them, and for the cost of the training necessary to

enable such departments to use such equipment efficiently.

''(B) For the purposes of this subsection, the term 'eligible

volunteer fire department' means any established volunteer fire

department in a rural town, village, or unincorporated area where

the population is less than two thousand but greater than two

hundred, as reasonably determined by the Secretary.''

Subsec. (a)(14)(C). Pub. L. 104-127, Sec. 741(a)(6)(D)(ii), which

directed substitution of ''3 percent of any funds appropriated''

for ''2 per centum of any funds provided in appropriations Acts'',

was executed by making the substitution for ''2 per centum of any

funds provided in Appropriations Acts'', to reflect the probable

intent of Congress.

Subsec. (a)(15). Pub. L. 104-127, Sec. 741(a)(4), (5),

redesignated par. (17) as (15) and struck out former par. (15)

which authorized making or insuring of loans to associations,

including corporations not operated for profit, Indian tribes on

Federal and State reservations and other federally recognized

Indian tribes, and public and quasi-public agencies, for purpose of

financing construction, acquisition, and operation of transmission

facilities for any electric system owned and operated by a public

body located in a rural area which was, as of October 1, 1976,

receiving bulk power from designated agencies of Department of the

Interior.

Subsec. (a)(16) to (18). Pub. L. 104-127, Sec. 741(a)(5),

redesignated pars. (18) to (20) as (16) to (18), respectively.

Former pars. (16) to (18) redesignated (14) to (16), respectively.

Subsec. (a)(19). Pub. L. 104-127, Sec. 763, added par. (19).

Pub. L. 104-127, Sec. 741(a)(5), redesignated par. (19) as (17).

Subsec. (a)(20). Pub. L. 104-127, Sec. 741(a)(5), redesignated

par. (20) as (18).

1994 - Subsec. (a)(15)(C), (D). Pub. L. 103-354 redesignated

subpar. (D) as (C) and struck out former subpar. (C) which read as

follows: ''The Administrator of the Rural Electrification

Administration shall administer loans made or insured under this

paragraph.''

1993 - Subsec. (a)(1). Pub. L. 103-129 inserted after first

sentence ''The Secretary may also make loans to any borrower to

whom a loan has been made under the Rural Electrification Act of

1936 (7 U.S.C. 901 et seq.), for the conservation, development,

use, and control of water, and the installation of drainage or

waste disposal facilities, primarily serving farmers, ranchers,

farm tenants, farm laborers, rural businesses, and other rural

residents.''

1991 - Subsec. (a)(11)(B)(ii). Pub. L. 102-237, Sec. 701(a)(1),

in subcl. (I) inserted ''and'' after semicolon and in subcl. (II)

substituted a period for ''; and''.

Subsec. (a)(12)(D), (20). Pub. L. 102-237, Sec. 701(h)(1)(A),

(B), substituted ''this chapter'' for ''this Act''.

Subsec. (a)(21). Pub. L. 102-237, Sec. 701(a)(2), struck out par.

(21) which was identical to par. (20).

1990 - Subsec. (a)(1). Pub. L. 101-624, Sec. 2328, inserted

''rural businesses,'' after ''farm laborers,''.

Subsec. (a)(2). Pub. L. 101-624, Sec. 2321, struck out '':

Provided, That for fiscal years commencing after September 30,

1981, such grants may not exceed $154,900,000 in any fiscal year''

after ''in rural areas''.

Subsec. (a)(3). Pub. L. 101-624, Sec. 2316(b), struck out ''and

not inconsistent with any planned development provided in any

State, multijurisdictional, county, or municipal plan approved by

competent authority for the area in which the rural community is

located, and the Secretary shall require the submission of all

applications for financial assistance under this section to the

multijurisdictional substate areawide general purpose planning and

development agency that has been officially designated as a

clearinghouse agency under Office of Management and Budget Circular

A-95 and to the county or municipal government having jurisdiction

over the area in which the proposed project is to be located for

review and comment within a designated period of time not to exceed

30 days concerning among other considerations, the effect of the

project upon the areawide goals and plans of such agency or

government. No loan under this section shall be made that is

inconsistent with any multijurisdictional planning and development

district areawide plan of such agency. The Secretary is authorized

to reimburse such agency or government for the cost of making the

required review. Until October 1, 1973, the Secretary may make

grants prior to the completion of the comprehensive plan, if the

preparation of such plan has been undertaken for the area'' after

''of the rural area''.

Subsec. (a)(11). Pub. L. 101-624, Sec. 2341, 2342, amended par.

(11) generally. Prior to amendment, par. (11) read as follows:

''The Secretary may make grants, not to exceed $15,000,000

annually, to public bodies or such other agencies as the Secretary

may select to provide rural development technical assistance, rural

community leadership development, and community and areawide rural

development planning.''

Subsec. (a)(20). Pub. L. 101-624, Sec. 2329, added par. (20).

Subsec. (a)(21). Pub. L. 101-624, Sec. 2393, added par. (21).

1986 - Subsec. (a)(1), (15)(B). Pub. L. 99-514 substituted

''Internal Revenue Code of 1986'' for ''Internal Revenue Code of

1954'', which for purposes of codification was translated as

''title 26'' thus requiring no change in text.

1985 - Subsec. (a)(2). Pub. L. 99-198 provided for graduated

scale of grant rates for each project and higher rates in

communities having lower community population and income levels.

Subsec. (a)(16) to (19). Pub. L. 99-198 added pars. (16) to (19).

1981 - Subsec. (a)(2). Pub. L. 97-35 inserted provisions limiting

grants for fiscal years after Sept. 30, 1981.

1980 - Subsec. (a)(7). Pub. L. 96-438 provided that for the

purpose of loans for essential community facilities under

subsection (a)(1) of this section, terms ''rural'' and ''rural

area'' may include any area in any city or town with a population

not in excess of twenty thousand.

Subsec. (a)(11) to (15). Pub. L. 96-355 in par. (11) substituted

provisions authorizing annual grants not to exceed $15,000,000 for

rural development technical assistance, rural community leadership

development, etc., for provisions authorizing annual grants not to

exceed $10,000,000 for preparation of comprehensive plans for rural

development or designated aspects of such rural development, added

par. (12), and redesignated former pars. (12) to (14) as (13) to

(15), respectively.

1978 - Subsec. (a)(1). Pub. L. 95-334, Sec. 104, inserted

provisions respecting bond counsel requirements for loans under

$500,000.

Subsec. (a)(2). Pub. L. 95-334, Sec. 105, substituted

''$500,000,000'' for ''$300,000,000'' and ''75'' for ''50''.

Subsec. (a)(7). Pub. L. 95-334, Sec. 106, struck out references

to the Commonwealth of Puerto Rico and the Virgin Islands.

Subsec. (a)(14). Pub. L. 95-334, Sec. 107(a), added par. (14).

1973 - Subsec. (a)(13). Pub. L. 91-524, title VIII, Sec. 816(c),

as added by Pub. L. 93-86 added par. (13).

1972 - Subsec. (a)(1). Pub. L. 92-419, Sec. 104(1), (2),

authorized loans to Indian tribes on Federal and State reservations

and other federally recognized Indian tribes and included as an

allowable use provision for essential community facilities

including necessary related equipment, respectively.

Subsec. (a)(2). Pub. L. 92-419, Sec. 105, substituted

''$300,000,000'' for ''$100,000,000''.

Subsec. (a)(3). Pub. L. 92-419, Sec. 106, 107, substituted

''project'' for ''facility'' where first appearing; in item (i),

substituted ''project'' for ''facility'' and inserted in such text

'', if such project is carried out,''; in item (ii), substituted

''will or can be'' for ''will be or can be''; substituted ''and

(iii)'' for ''or (iii)'' and in such item (iii), substituted ''an

orderly community development consistent with a comprehensive

community water, waste disposal, or other development plan'' and

''development provided in any State, multijurisdictional, county,

or municipal plan approved by competent authority'' for ''orderly

community development consistent with a comprehensive community

water or sewer development plan'' and ''development under State,

county, or municipal plans approved as official plans by competent

authority'', substituted ''Secretary shall require the submission

of all applications for financial assistance under this section to

the multijurisdictional substate areawide general purpose planning

and development agency that has been officially designated as a

clearinghouse agency under Office of Management and Budget Circular

A-95 and to the county or municipal government having jurisdiction

over the area in which the proposed project is to be located for

review and comment within a designated period of time not to exceed

30 days concerning among other considerations, the effect of the

project upon the areawide goals and plans of such agency or

government'' for ''Secretary shall establish regulations requiring

the submission of all applications for financial assistance under

this chapter to the county or municipal government in which the

proposed project is to be located for review and comment by such

agency within a designated period of time''; prohibited loans

inconsistent with multijurisdictional planning and development

district areawide plan of the agency; authorized agency or

government reimbursement for cost of making the review; and

extended authority for making grants prior to completion of the

comprehensive plan from Oct. 1, 1971 to Oct. 1, 1973.

Subsec. (a)(5). Pub. L. 92-419, Sec. 110, struck out provisions

of former par. (5) which prohibited any loan or grant under subsec.

(a) of this section which would cause the unpaid principal

indebtedness of any association under this chapter and Act Aug. 28,

1937, as amended (superseded by this chapter), together with amount

of any assistance in the form of a grant to exceed $4,000,000 at

any one time.

Subsec. (a)(6). Pub. L. 92-419, Sec. 108, substituted

''$30,000,000'' for ''$15,000,000'', struck out ''official'' before

''comprehensive plans'', and substituted ''waste disposal systems''

for ''sewer systems''.

Subsec. (a)(7). Pub. L. 92-419, Sec. 109, substituted definition

of ''rural'' and ''rural area'' as excluding an area in a city or

town with a population in excess of ten thousand inhabitants for

prior provision for rural areas for purposes of water and waste

disposal projects excluding an area in a city or town with a

population in excess of 5,500 inhabitants, provided exception

provision and special consideration for loans and grants to areas

other than cities having a population of more than twenty-five

thousand.

Subsec. (a)(11), (12). Pub. L. 92-419, Sec. 111, 112, added pars.

(11) and (12).

1970 - Subsec. (a)(1). Pub. L. 91-617 required inclusion in gross

income of the interest or other income paid to an insured holder

when any loan made for a purpose specified in subsec. (a)(1) is

sold out of the Agricultural Credit Insurance Fund as an insured

loan.

Subsec. (c). Pub. L. 91-606 repealed subsec. (c), added by Pub.

L. 89-769, Sec. 6(b), Nov. 6, 1966, 80 Stat. 1318, which related to

loans to associations in areas suffering major disasters. See

section 4401 et seq. of Title 42, The Public Health and Welfare.

Subsec. (d). Pub. L. 91-524 added subsec. (d).

1968 - Subsec. (a). Pub. L. 90-488 substituted ''$100,000,000''

for ''$50,000,000'' in par. (2), ''1971'' for ''1968'' in par. (3),

and ''$15,000,000'' for ''$5,000,000'' in par. (6), respectively.

1966 - Subsec. (c). Pub. L. 89-769 added subsec. (c).

1965 - Subsec. (a). Pub. L. 89-240 designated existing provisions

as par. (1), struck out ''including the development of recreational

facilities'' after ''shifts in land use'', substituted ''drainage

or waste disposal facilities'' for ''drainage facilities'',

inserted ''and recreational developments'', deleted provisions

which prohibited loans which would cause an association's unpaid

principal indebtedness to exceed $500,000, in the case of direct

loans and $1,000,000 in the case of insured loans at any one time,

and added pars. (2) to (10).

1962 - Subsec. (a). Pub. L. 87-703 authorized loans to be made or

insured to provide for the application or establishment of shifts

in land use including the development of recreational facilities.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by section 701(a) of Pub. L. 102-237 effective as if

included in the provision of the Food, Agriculture, Conservation,

and Trade Act of 1990, Pub. L. 101-624, to which the amendment

relates, and amendment by section 701(h)(1)(A), (B) of Pub. L.

102-237 to any provision specified therein effective as if included

in act that added provision so specified at the time such act

became law, see section 1101(b)(6), (c) of Pub. L. 102-237, set out

as a note under section 1421 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-355 effective Oct. 1, 1980, see section

10 of Pub. L. 96-355, set out as an Effective Date note under

section 2204b of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Section 105 of Pub. L. 95-334 provided that the amendment made by

that section is effective Oct. 1, 1978.

EFFECTIVE DATE OF 1970 AMENDMENTS

Section 1(b) of Pub. L. 91-617 provided that: ''The amendment

made by subsection (a) (amending this section) shall apply to the

insured loans sold out of the Agricultural Credit Insurance Fund

after the date of the enactment of this Act (Dec. 31, 1970).''

Amendment by Pub. L. 91-606 effective Dec. 31, 1970, see section

304 of Pub. L. 91-606, set out as a note under section 165 of Title

26, Internal Revenue Code.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-769 applicable with respect to any major

disaster occurring after Oct. 3, 1964, see section 14 of Pub. L.

89-769.

-TRANS-

TRANSFER OF FUNCTIONS

Powers, duties, and assets of agencies, offices, and other

entities within Department of Agriculture relating to rural

development functions transferred to Rural Development

Administration by section 2302(b) of Pub. L. 101-624.

-MISC5-

ASSISTANCE IN RURAL ALASKA

Pub. L. 106-387, Sec. 1(a) (title VII, Sec. 736), Oct. 28, 2000,

114 Stat. 1549, 1549A-33, provided that:''Notwithstanding any other

provision of law, for any fiscal year, in the case of a high cost,

isolated rural area of the State of Alaska that is not connected to

a road system -

''(1) in the case of assistance provided by the Rural Housing

Service for single family housing under title V of the Housing

Act of 1949 (7 (42) U.S.C. 1471 et seq.), the maximum income

level for the assistance shall be 150 percent of the average

income level in metropolitan areas of the State;

''(2) in the case of community facility loans and grants

provided under paragraphs (1) and (19), respectively, of section

306(a) of the Consolidated Farm and Rural Development Act (7

U.S.C. 1926(a)) and assistance provided under programs carried

out by the Rural Utilities Service, the maximum income level for

the loans, grants, and assistance shall be 150 percent of the

average income level in nonmetropolitan areas of the State;

''(3) in the case of a business and industry guaranteed loan

made under section 310B(a)(1) of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1932(a)(1)), to the extent permitted

under that Act, the Secretary of Agriculture shall -

''(A) guarantee the repayment of 90 percent of the principal

and interest due on the loan; and

''(B) charge a loan origination and servicing fee in an

amount not to exceed 1 percent of the amount of the loan; and

''(4) in the case of assistance provided under the Rural

Community Development Initiative for fiscal year 2001 carried out

under the rural community advancement program established under

subtitle E of the Consolidated Farm and Rural Development Act (7

U.S.C. 2009 et seq.), the median household income level, and the

not employed rate, with respect to applicants for assistance

under the Initiative shall be scored on a community-by-community

basis.''

TEMPORARY EXPANDED ELIGIBILITY OF CERTAIN TIMBER-DEPENDENT

COMMUNITIES IN PACIFIC NORTHWEST FOR LOANS AND GRANTS FROM RURAL

DEVELOPMENT ADMINISTRATION

Pub. L. 103-427, Oct. 31, 1994, 108 Stat. 4373, provided that:

''(a) Findings. - Congress finds the following:

''(1) Timber-dependent communities in the Pacific Northwest

have contributed significantly to the economic needs of the

United States and have helped ensure an adequate national supply

of timber and timber products.

''(2) A significant portion of the timber traditionally

harvested in the Pacific Northwest is derived from Federal forest

lands, and these forests have played an important role in

sustaining local economies.

''(b) Expanded Eligibility. - During the period beginning on the

date of the enactment of this Act (Oct. 31, 1994) and ending on

September 30, 1998, the terms 'rural' and 'rural area', as used in

the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et

seq.), shall include any town, city, or municipality -

''(1) part or all of which lies within 100 miles of the

boundary of a national forest covered by the Federal document

entitled 'Forest Plan for a Sustainable Economy and a Sustainable

Environment', dated July 1, 1993;

''(2) that is located in a county in which at least 15 percent

of the total primary and secondary labor and proprietor income is

derived from forestry, wood products, or forest-related

industries such as recreation and tourism; and

''(3) that has a population of not more than 25,000

inhabitants.

''(c) Effect on State Allotments of Funds. - This section shall

not be taken into consideration in allotting funds to the various

States for purposes of the Consolidated Farm and Rural Development

Act (7 U.S.C. 1921 et seq.), or otherwise affect or alter the

manner under which such funds were allotted to States before the

date of the enactment of this Act (Oct. 31, 1994).''

RURAL WASTEWATER TREATMENT CIRCUIT RIDER PROGRAM

Section 2324 of Pub. L. 101-624 directed Secretary to establish

national rural wastewater circuit rider grant program that was to

be modeled after existing National Rural Water Association Rural

Water Circuit Rider Program that received funding from Farmers Home

Administration and authorized $4,000,000 for each fiscal year to

carry out such program, prior to repeal by Pub. L. 104-127, title

VII, Sec. 703, Apr. 4, 1996, 110 Stat. 1108.

INTEREST RATE RESTRUCTURING FOR CERTAIN BORROWERS

Pub. L. 100-233, title VI, Sec. 615(b)(2), Jan. 6, 1988, 101

Stat. 1682, provided that: ''Effective July 29, 1987, the interest

rate charged on any loan of $2,000,000 or more made on such date

under section 306 (7 U.S.C. 1926) to any nonprofit corporation

shall be the interest rate quoted to such nonprofit corporation by

the Farmers Home Administration on June 22, 1987, in the request

for obligation of funds made with respect to the loan.''

LEASE OF CERTAIN ACQUIRED PROPERTY

Pub. L. 100-233, title VI, Sec. 620, Jan. 6, 1988, 101 Stat.

1684, provided that: ''Notwithstanding any other provision of law,

the Secretary of Agriculture may lease to public or private

nonprofit organizations, for a nominal rent, any facilities

acquired in connection with the disposition of a loan made by the

Secretary under section 306 (7 U.S.C. 1926). Any such lease shall

be for such reasonable period of time as the Secretary determines

is appropriate.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 917, 1926a, 1927, 1929,

1929a, 1932, 1983, 1983a, 1991, 1992, 2001a, 2009d, 2204b, 2204b-1,

6613, 6942, 6944 of this title; title 16 section 2106; title 42

section 5153.

-CITE-

7 USC Sec. 1926-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926-1. Repealed. Pub. L. 104-127, title VII, Sec. 702, Apr.

4, 1996, 110 Stat. 1108

-MISC1-

Section, Pub. L. 101-624, title XXIII, Sec. 2322, Nov. 28, 1990,

104 Stat. 4010; Pub. L. 102-237, title VII, Sec. 702(f), Dec. 13,

1991, 105 Stat. 1880; Pub. L. 103-354, title II, Sec. 235(b)(6),

Oct. 13, 1994, 108 Stat. 3222, related to water and waste facility

financing, including provisions relating to authority, limitation,

priority, coordination, terms, private sector capital,

appropriations, repayment, full use, and replenishment of water and

waste facility fund.

-CITE-

7 USC Sec. 1926a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926a. Emergency and imminent community water assistance grant

program

-STATUTE-

(a) In general

The Secretary shall provide grants in accordance with this

section to assist the residents of rural areas and small

communities to secure adequate quantities of safe water -

(1) after a significant decline in the quantity or quality of

water available from the water supplies of such rural areas and

small communities, or when such a decline is imminent; or

(2) when repairs, partial replacement, or significant

maintenance efforts on established water systems would remedy -

(A) an acute, or imminent, shortage of quality water; or

(B) a significant decline, or imminent decline, in the

quantity or quality of water that is available.

(b) Priority

In carrying out subsection (a) of this section, the Secretary

shall -

(1) give priority to projects described in subsection (a)(1) of

this section; and

(2) provide at least 70 percent of all such grants to such

projects.

(c) Eligibility

To be eligible to obtain a grant under this section, an applicant

shall -

(1) be a public or private nonprofit entity; and

(2) in the case of a grant made under subsection (a)(1) of this

section, demonstrate to the Secretary that the decline referred

to in such subsection occurred, or will occur, within 2 years of

the date the application was filed for such grant.

(d) Uses

(1) In general

Grants made under this section may be used -

(A) for waterline extensions from existing systems, laying of

new waterlines, repairs, significant maintenance, digging of

new wells, equipment replacement, and hook and tap fees;

(B) for any other appropriate purpose associated with

developing sources of, treating, storing, or distributing

water;

(C) to assist communities in complying with the requirements

of the Federal Water Pollution Control Act (33 U.S.C. 1251 et

seq.) or the Safe Drinking Water Act (42 U.S.C. 300f et seq.);

and

(D) to provide potable water to communities through other

means.

(2) Joint proposals

Nothing in this section shall preclude rural communities from

submitting joint proposals for emergency water assistance,

subject to the restrictions contained in subsection (e) of this

section. Such restrictions should be considered in the

aggregate, depending on the number of communities involved.

(e) Restrictions

(1) Maximum population and income

No grant provided under this section shall be used to assist

any rural area or community that -

(A) includes any area in any city or town with a population

in excess of 10,000 inhabitants according to the most recent

decennial census of the United States; or

(B) has a median household income in excess of the State

nonmetropolitan median household income according to the most

recent decennial census of the United States.

(2) Set-aside for smaller communities

Not less than 50 percent of the funds allocated under this

section shall be allocated to rural communities with populations

that do not exceed 3,000 inhabitants.

(f) Maximum grants

Grants made under this section may not exceed -

(1) in the case of each grant made under subsection (a)(1) of

this section, $500,000; and

(2) in the case of each grant made under subsection (a)(2) of

this section, $150,000.

(g) Full funding

Subject to subsection (e) of this section, grants under this

section shall be made in an amount equal to 100 percent of the

costs of the projects conducted under this section.

(h) Application

(1) Nationally competitive application process

The Secretary shall develop a nationally competitive

application process to award grants under this section. The

process shall include criteria for evaluating applications,

including population, median household income, and the severity

of the decline, or imminent decline, in quantity or quality of

water.

(2) Timing of review of applications

(A) Simplified application

The application process developed by the Secretary under

paragraph (1) shall include a simplified application form that

will permit expedited consideration of an application for a

grant filed under this section.

(B) Priority review

In processing applications for any water or waste grant or

loan authorized under this chapter, the Secretary shall afford

priority processing to an application for a grant under this

section to the extent funds will be available for an award on

the application at the conclusion of priority processing.

(C) Timing

The Secretary shall, to the maximum extent practicable,

review and act on an application under this section within 60

days after the date on which the application is submitted to

the Secretary.

(i) Funding

(1) Reservation

(A) In general

For each fiscal year, not less than 3 nor more than 5 percent

of the total amount made available to carry out section

1926(a)(2) of this title for the fiscal year shall be reserved

for grants under this section.

(B) Release

Funds reserved under subparagraph (A) for a fiscal year shall

be reserved only until July 1 of the fiscal year.

(2) Authorization of appropriations

In addition to funds made available under paragraph (1), there

is authorized to be appropriated to carry out this section

$35,000,000 for each of fiscal years 2003 through 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 306A, as added Pub. L. 101-82,

title V, Sec. 501(a), Aug. 14, 1989, 103 Stat. 584; amended Pub. L.

104-127, title VII, Sec. 742, Apr. 4, 1996, 110 Stat. 1124; Pub. L.

107-171, title VI, Sec. 6009, May 13, 2002, 116 Stat. 356.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Water Pollution Control Act, referred to in subsec.

(d)(1)(C), is act June 30, 1948, ch. 758, as amended generally by

Pub. L. 92-500, Sec. 2, Oct. 18, 1972, 86 Stat. 816, which is

classified generally to chapter 26 (Sec. 1251 et seq.) of Title 33,

Navigation and Navigable Waters. For complete classification of

this Act to the Code, see Short Title note set out under section

1251 of Title 33 and Tables.

The Safe Drinking Water Act, referred to in subsec. (d)(1)(C), is

title XIV of act July 1, 1944, as added Dec. 16, 1974, Pub. L.

93-523, Sec. 2(a), 88 Stat. 1660, as amended, which is classified

generally to subchapter XII (Sec. 300f et seq.) of chapter 6A of

Title 42, The Public Health and Welfare. For complete

classification of this Act to the Code, see Short Title note set

out under section 201 of Title 42 and Tables.

For definition of ''this chapter'', referred to in subsec.

(h)(2)(B), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Pub. L. 107-171, Sec. 6009(1), inserted ''and imminent''

before ''community water assistance'' in section catchline.

Subsec. (a)(1). Pub. L. 107-171, Sec. 6009(2)(A), inserted '', or

when such a decline is imminent'' before semicolon at end.

Subsec. (a)(2)(A). Pub. L. 107-171, Sec. 6009(2)(B)(i),

substituted ''acute, or imminent,'' for ''acute''.

Subsec. (a)(2)(B). Pub. L. 107-171, Sec. 6009(2)(B)(ii),

substituted ''decline, or imminent decline,'' for ''decline''.

Subsec. (c)(2). Pub. L. 107-171, Sec. 6009(3), substituted

''occurred, or will occur,'' for ''occurred''.

Subsec. (d)(1). Pub. L. 107-171, Sec. 6009(4), added par. (1) and

struck out heading and text of former par. (1). Text read as

follows: ''Grants made under this section may be used for waterline

extensions from existing systems, laying of new waterlines,

repairs, significant maintenance, digging of new wells, equipment

replacement, hook and tap fees, and any other appropriate purpose

associated with developing sources of, or treating, storing, or

distributing water, and to assist communities in complying with the

requirements of the Federal Water Pollution Control Act (33 U.S.C.

1251 et seq.) or the Safe Drinking Water Act (42 U.S.C. 300f et

seq.).''

Subsec. (f)(2). Pub. L. 107-171, Sec. 6009(5), substituted

''$150,000'' for ''$75,000''.

Subsec. (h)(1). Pub. L. 107-171, Sec. 6009(6)(A), substituted

''decline, or imminent decline,'' for ''decline'' in second

sentence.

Subsec. (h)(2). Pub. L. 107-171, Sec. 6009(6)(B), added par. (2)

and struck out heading and text of former par. (2). Text read as

follows: ''The Secretary shall make every effort to review and act

on applications within 60 days of the date that such applications

are submitted.''

Subsec. (i). Pub. L. 107-171, Sec. 6009(7), added subsec. (i) and

struck out heading and text of former subsec. (i). Text read as

follows: ''There are authorized to be appropriated to carry out

this section $35,000,000 for each of fiscal years 1996 through

2002.''

1996 - Subsec. (e)(1)(A). Pub. L. 104-127, Sec. 742(1)(A),

substituted ''10,000'' for ''15,000''.

Subsec. (e)(2). Pub. L. 104-127, Sec. 742(1)(B), substituted

''3,000'' for ''5,000''.

Subsec. (i). Pub. L. 104-127, Sec. 742(2), added subsec. (i) and

struck out heading and text of former subsec. (i). Text read as

follows: ''There are authorized to be appropriated to carry out

this section, $35,000,000 for each of the fiscal years 1990 and

1991, such sums to remain authorized until fully appropriated.''

IMPLEMENTATION

Section 501(b) of Pub. L. 101-82 provided that:

''(1) Regulations. - The Secretary of Agriculture shall publish -

''(A) interim final regulations to carry out section 306A of

the Consolidated Farm and Rural Development Act (7 U.S.C. 1926a)

(as added by subsection (a) of this section) not later than 45

days after the date of enactment of this Act (Aug. 14, 1989); and

''(B) final regulations to carry out section 306A of such Act

not later than 90 days after the date of enactment of this Act.

''(2) Funds. -

''(A) Obligation. - The Secretary shall designate 70 percent of

the funds made available for the first fiscal year for which

appropriations are made under section 306A(i) of the Consolidated

Farm and Rural Development Act not later than 5 months after the

date such funds are appropriated.

''(B) Release. - The Secretary may release funds prior to the

issuance of final regulations under paragraph (1)(B) for grants

under section 306A(a)(1) of the Consolidated Farm and Rural

Development Act.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 917, 2009d, 6942 of this

title.

-CITE-

7 USC Sec. 1926b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926b. Repealed. Pub. L. 104-127, title VII, Sec. 743, Apr. 4,

1996, 110 Stat. 1125

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 306B, as added Pub. L.

101-624, title XXIII, Sec. 2326(a), Nov. 28, 1990, 104 Stat. 4014,

related to emergency community water assistance grant program,

including general provisions and provisions relating to priority,

eligibility, uses, restrictions, maximum grants, full funding,

application, and limitations on authorization of appropriations.

-CITE-

7 USC Sec. 1926c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926c. Water and waste facility loans and grants to alleviate

health risks

-STATUTE-

(a) Loans and grants to persons other than individuals

(1) In general

The Secretary shall make or insure loans and make grants to

rural water supply corporations, cooperatives, or similar

entities, Indian tribes on Federal and State reservations and

other federally recognized Indian tribes, and public agencies, to

provide for the conservation, development, use, and control of

water (including the extension or improvement of existing water

supply systems), and the installation or improvement of drainage

or waste disposal facilities and essential community facilities

including necessary related equipment. Such loans and grants

shall be available only to provide such water and waste

facilities and services to communities whose residents face

significant health risks, as determined by the Secretary, due to

the fact that a significant proportion of the community's

residents do not have access to, or are not served by, adequate

affordable -

(A) water supply systems; or

(B) waste disposal facilities.

(2) Certain areas targeted

(A) In general

Loans and grants under paragraph (1) shall be made only if

the loan or grant funds will be used primarily to provide water

or waste services, or both, to residents of a county -

(i) the per capita income of the residents of which is not

more than 70 percent of the national average per capita

income, as determined by the Department of Commerce; and

(ii) the unemployment rate of the residents of which is not

less than 125 percent of the national average unemployment

rate, as determined by the Bureau of Labor Statistics.

(B) Exception

Notwithstanding subparagraph (A), loans and grants under

paragraph (1) may also be made if the loan or grant funds will

be used primarily to provide water or waste services, or both,

to residents of a rural area that was recognized as a colonia

as of October 1, 1989.

(b) Loans and grants to individuals

(1) In general

The Secretary shall make or insure loans and make grants to

individuals who reside in a community described in subsection

(a)(1) of this section for the purpose of extending water supply

and waste disposal systems, connecting the systems to the

residences of the individuals, or installing plumbing and

fixtures within the residences of the individuals to facilitate

the use of the water supply and waste disposal systems. Such

loans shall be at a rate of interest no greater than the Federal

Financing Bank rate on loans of a similar term at the time such

loans are made. The repayment of such loans shall be amortized

over the expected life of the water supply or waste disposal

system to which the residence of the borrower will be connected.

(2) Manner in which loans and grants are to be made

Loans and grants to individuals under paragraph (1) shall be

made -

(A) directly to such individuals by the Secretary; or

(B) to such individuals through the rural water supply

corporation, cooperative, or similar entity, or public agency,

providing such water supply or waste disposal services,

pursuant to regulations issued by the Secretary.

(c) Preference

The Secretary shall give preference in the awarding of loans and

grants -

(1) under subsection (a) of this section to rural water supply

corporations, cooperatives, or similar entities, or public

agencies, that propose to provide water supply or waste disposal

services to the residents of those rural subdivisions commonly

referred to as colonias, that are characterized by substandard

housing, inadequate roads and drainage, and a lack of adequate

water or waste facilities; and

(2) under subsection (b) of this section to individuals who

reside in a rural subdivision commonly referred to as a colonia,

that is characterized by substandard housing, inadequate roads

and drainage, and a lack of adequate water or waste facilities.

(d) ''Cooperative'' defined

For purposes of this section, the term ''cooperative'' means a

cooperative formed specifically for the purpose of the

installation, expansion, improvement, or operation of water supply

or waste disposal facilities or systems.

(e) Authorization of appropriations

(1) In general

Subject to paragraph (2), there are authorized to be

appropriated -

(A) for grants under this section, $30,000,000 for each

fiscal year;

(B) for loans under this section, $30,000,000 for each fiscal

year; and

(C) in addition to grants provided under subparagraph (A),

for grants under this section to benefit Indian tribes (as

defined in section 450b of title 25), $20,000,000 for each

fiscal year.

(2) Exception

An entity eligible to receive funding through a grant made

under section 1926d of this title shall not be eligible for a

grant from funds made available under paragraph (1)(C).

(f) Regulations

Not later than 30 days after October 28, 1992, the Secretary

shall issue interim final regulations, with a request for public

comments, implementing this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 306C, as added Pub. L. 101-624,

title XXIII, Sec. 2327, Nov. 28, 1990, 104 Stat. 4015; amended Pub.

L. 102-237, title VII, Sec. 701(b), Dec. 13, 1991, 105 Stat. 1879;

Pub. L. 102-552, title V, Sec. 516(l), (m), Oct. 28, 1992, 106

Stat. 4139; Pub. L. 102-554, Sec. 24, Oct. 28, 1992, 106 Stat.

4161; Pub. L. 107-171, title VI, Sec. 6010, May 13, 2002, 116 Stat.

357.)

-MISC1-

AMENDMENTS

2002 - Subsec. (e). Pub. L. 107-171 added subsec. (e) and struck

out heading and text of former subsec. (e). Text read as follows:

''There are authorized to be appropriated -

''(1) for grants under this section, $30,000,000 for each

fiscal year; and

''(2) for loans under this section, $30,000,000 for each fiscal

year.''

1992 - Subsec. (a)(2). Pub. L. 102-554 amended par. (2)

generally. Prior to amendment, par. (2) read as follows: ''(2)

Certain counties targeted. - Loans and grants under paragraph (1)

shall be made only if the loan or grant funds will be used

primarily to provide water or waste services, or both, to residents

of a county -

''(A) the per capita income of the residents of which is not

more than 70 percent of the national average per capita income,

as determined by the Department of Commerce; and

''(B) the unemployment rate of the residents of which is not

less than 125 percent of the national average unemployment rate,

as determined by the Bureau of Labor Statistics.''

Subsec. (b)(1). Pub. L. 102-552, Sec. 516(l), substituted '',

connecting the systems to the residences of the individuals, or

installing plumbing and fixtures within the residences of the

individuals to facilitate the use of the water supply and waste

disposal systems'' for ''or connecting such systems to the

residences of such individuals''.

Subsec. (f). Pub. L. 102-552, Sec. 516(m), added subsec. (f).

1991 - Subsec. (a)(2). Pub. L. 102-237 realigned margins of

subpars. (A) and (B).

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(6) of Pub. L. 102-237, set out as a note under section 1421

of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 917, 6942 of this title;

title 8 section 1611.

-CITE-

7 USC Sec. 1926d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926d. Water systems for rural and Native villages in Alaska

-STATUTE-

(a) In general

The Secretary may make grants to the State of Alaska for the

benefit of rural or Native villages in Alaska to provide for the

development and construction of water and wastewater systems to

improve the health and sanitation conditions in those villages.

(b) Matching funds

To be eligible to receive a grant under subsection (a) of this

section, the State of Alaska shall provide 25 percent in matching

funds from non-Federal sources.

(c) Consultation with State of Alaska

The Secretary shall consult with the State of Alaska on a method

of prioritizing the allocation of grants under subsection (a) of

this section according to the needs of, and relative health and

sanitation conditions in, each village.

(d) Authorization of appropriations

(1) In general

There are authorized to be appropriated to carry out this

section $30,000,000 for each of fiscal years 2001 through 2007.

(2) Training and technical assistance

Not more than 2 percent of the amount made available under

paragraph (1) for a fiscal year may be used by the State of

Alaska for training and technical assistance programs relating to

the operation and management of water and waste disposal services

in rural and Native villages.

(3) Availability

Funds appropriated pursuant to the authorization of

appropriations in paragraph (1) shall be available until

expended.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 306D, as added Pub. L. 104-127,

title VII, Sec. 757, Apr. 4, 1996, 110 Stat. 1131; amended Pub. L.

105-277, div. A, Sec. 101(a) (title VII, Sec. 745), Oct. 21, 1998,

112 Stat. 2681, 2681-32; Pub. L. 106-224, title II, Sec. 256, June

20, 2000, 114 Stat. 424; Pub. L. 107-171, title VI, Sec. 6011, May

13, 2002, 116 Stat. 357.)

-MISC1-

AMENDMENTS

2002 - Subsec. (d)(1). Pub. L. 107-171 substituted ''through

2007'' for ''and 2002''.

2000 - Subsec. (d). Pub. L. 106-224 added subsec. (d) and struck

out heading and text of former subsec. (d). Text read as follows:

''There are authorized to be appropriated to carry out this section

$20,000,000 for each of fiscal years 1996 through 2002.''

1998 - Subsec. (b). Pub. L. 105-277 substituted ''25 percent in

matching'' for ''equal matching''.

Subsec. (d). Pub. L. 105-277 substituted ''$20,000,000'' for

''$15,000,000''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 917, 1926c of this title.

-CITE-

7 USC Sec. 1926e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1926e. Grants to nonprofit organizations to finance the

construction, refurbishing, and servicing of individually-owned

household water well systems in rural areas for individuals

with low or moderate incomes

-STATUTE-

(a) Definition of eligible individual

In this section, the term ''eligible individual'' means an

individual who is a member of a household the members of which have

a combined income (for the most recent 12-month period for which

the information is available) that is not more than 100 percent of

the median nonmetropolitan household income for the State or

territory in which the individual resides, according to the most

recent decennial census of the United States.

(b) Grants

(1) In general

The Secretary may make grants to private nonprofit

organizations for the purpose of providing loans to eligible

individuals for the construction, refurbishing, and servicing of

individual household water well systems in rural areas that are

or will be owned by the eligible individuals.

(2) Terms of loans

A loan made with grant funds under this section -

(A) shall have an interest rate of 1 percent;

(B) shall have a term not to exceed 20 years; and

(C) shall not exceed $8,000 for each water well system

described in paragraph (1).

(3) Administrative expenses

A recipient of a grant made under this section may use grant

funds to pay administrative expenses associated with providing

the assistance described in paragraph (1), as determined by the

Secretary.

(c) Priority in awarding grants

In awarding grants under this section, the Secretary shall give

priority to an applicant that has substantial expertise and

experience in promoting the safe and productive use of

individually-owned household water well systems and ground water.

(d) Authorization of appropriations

There is authorized to be appropriated to carry out this section

$10,000,000 for each of fiscal years 2003 through 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 306E, as added Pub. L. 107-171,

title VI, Sec. 6012(a), May 13, 2002, 116 Stat. 357.)

-MISC1-

EFFECTIVE DATE

Pub. L. 107-171, title VI, Sec. 6012(b), May 13, 2002, 116 Stat.

358, provided that: ''The amendment made by subsection (a)

(enacting this section) takes effect on October 1, 2002.''

-CITE-

7 USC Sec. 1927 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1927. Repayment requirements

-STATUTE-

(a) Period of repayment; interest rates

(1) The period for repayment of loans under this subchapter shall

not exceed forty years.

(2) Except as otherwise provided in paragraphs (3), (4), (5), and

(6) of this subsection, the interest rates on loans under this

subchapter shall be as determined by the Secretary, but not in

excess of the current average market yield on outstanding

marketable obligations of the United States with remaining periods

to maturity comparable to the average maturities of such loans,

plus not to exceed 1 per centum, as determined by the Secretary,

and adjusted to the nearest one-eighth of 1 per centum.

(3)(A) Notwithstanding the provisions of the constitution or laws

of any State limiting the rate or amount of interest that may be

charged, taken, received, or reserved, except as provided in

paragraph (6), the interest rates on loans (other than guaranteed

loans), to public bodies or nonprofit associations (including

Indian tribes on Federal and State reservations and other federally

recognized Indian tribal groups) for water and waste disposal

facilities and essential community facilities shall be set by the

Secretary at rates not to exceed the current market yield for

outstanding municipal obligations with remaining periods to

maturity comparable to the average maturity for such loans, and

adjusted to the nearest one-eighth of 1 per centum; and not in

excess of 5 per centum per annum for any such loans which are for

the upgrading of existing facilities or construction of new

facilities as required to meet applicable health or sanitary

standards in areas where the median household income of the persons

to be served by such facility is below the higher of 80 per centum

of the statewide nonmetropolitan median household income or the

poverty line established by the Office of Management and Budget, as

revised under section 9902(2) of title 42 and in other areas as the

Secretary may designate where a significant percentage of the

persons to be served by such facilities are of low income, as

determined by the Secretary; and not in excess of 7 per centum per

annum on loans for such facilities that do not qualify for the 5

per centum per annum interest rate but are located in areas where

the median household income of the persons to be served by the

facility does not exceed 100 per centum of the statewide

nonmetropolitan median household income.

(B) Except as provided in subparagraph (D) and in paragraph (6),

the interest rate on loans (other than guaranteed loans) under

section 1934 of this title shall not be -

(i) greater than the sum of -

(I) an amount that does not exceed one-half of the current

average market yield on outstanding marketable obligations of

the United States with maturities of 5 years; and

(II) an amount not exceeding 1 percent per year, as the

Secretary determines is appropriate; or

(ii) less than 5 percent per year.

(C) Notwithstanding subparagraph (A), the Secretary shall

establish loan rates for health care and related facilities based

solely on the income of the area to be served, and such rates shall

be otherwise consistent with such subparagraph.

(D) Joint financing arrangement. - If a direct farm ownership

loan is made under this subchapter as part of a joint financing

arrangement and the amount of the direct farm ownership loan does

not exceed 50 percent of the total principal amount financed under

the arrangement, the interest rate on the direct farm ownership

loan shall be at least 4 percent annually.

(4) Except as provided in paragraph (6), the interest rates on

loans under sections 1926(a)(1) and 1932 of this title (other than

guaranteed loans and loans as described in paragraph (3) of this

subsection) shall be as determined by the Secretary, but not less

than such rates as determined by the Secretary of the Treasury

taking into consideration the current average market yield on

outstanding marketable obligations of the United States with

remaining periods to maturity comparable to the average maturities

of such loans, adjusted in the judgment of the Secretary of the

Treasury to provide for rates comparable to the rates prevailing in

the private market for similar loans and considering the

Secretary's insurance of the loans, plus an additional charge,

prescribed by the Secretary, to cover the Secretary's losses and

cost of administration, which charge shall be deposited in the

Rural Development Insurance Fund, and further adjusted to the

nearest one-eighth of 1 per centum.

(5)(A) Except as provided in subparagraph (B), the interest rate

on any loan made under this subchapter as a guaranteed loan shall

be such rate as may be agreed upon by the borrower and the lender,

but not in excess of a rate as may be determined by the Secretary.

(B) In the case of a loan made under section 1932 of this title

as a guaranteed loan, subparagraph (A) shall apply notwithstanding

the provisions of the constitution or laws of any State limiting

the rate or amount of interest that may be charged, taken,

received, or reserved.

(6)(A) Notwithstanding any other provision of this section, in

the case of loans (other than guaranteed loans) made or insured

under the authorities of this chapter specified in subparagraph (B)

for activities that involve the use of prime farmland as defined in

subparagraph (C), the interest rates shall be the interest rates

otherwise applicable under this section increased by 2 per centum

per annum. Wherever practicable, construction by a State,

municipality, or other political subdivision of local government

that is supported by loans described in the preceding sentence

shall be placed on land that is not prime farmland, in order to

preserve the maximum practicable amount of prime farmlands for

production of food and fiber. Where other options exist for the

siting of such construction and where the governmental authority

still desires to carry out such construction on prime farmland, the

2 per centum interest rate increase provided by this clause shall

apply, but such increased interest rate shall not apply where such

other options do not exist.

(B) The authorities referred to in subparagraph (A) are -

(i) the provisions of section 1926(a)(1) of this title relating

to loans for recreational developments and essential community

facilities,

(ii) clause (1) of section 1932(a) of this title, and

(iii) section 1932(d) of this title.

(C) For purposes of this paragraph, the term ''prime farmland''

means prime farmlands and unique farmland as those terms are

defined in sections 657.5(a) and (b) of title 7, Code of Federal

Regulations (1980).

(b) Payment of charges; prepayment of taxes and insurance

The borrower shall pay such fees and other charges as the

Secretary may require, and borrowers under this chapter shall

prepay to the Secretary such taxes and insurance as the Secretary

may require, on such terms and conditions as the Secretary may

prescribe.

(c) Mortgages, liens, and other security

The Secretary shall take as security for the obligations entered

into in connection with loans, mortgages on farms with respect to

which such loans are made or such other security as the Secretary

may require, and for obligations in connection with loans to

associations under section 1926 of this title, shall take liens on

the facility or such other security as he may determine to be

necessary. Such security instruments may constitute liens running

to the United States notwithstanding the fact that the notes may be

held by lenders other than the United States. A borrower may use

the same collateral to secure two or more loans made, insured, or

guaranteed under this subchapter, except that the outstanding

amount of such loans may not exceed the total value of the

collateral so used.

(d) Mineral rights as collateral

With respect to a farm ownership loan made after December 23,

1985, unless appraised values of the rights to oil, gas, or other

minerals are specifically included as part of the appraised value

of collateral securing the loan, the rights to oil, gas, or other

minerals located under the property shall not be considered part of

the collateral securing the loan. Nothing in this subsection shall

prevent the inclusion of, as part of the collateral securing the

loan, any payment or other compensation the borrower may receive

for damages to the surface of the collateral real estate resulting

from the exploration for or recovery of minerals.

(e) Additional collateral

The Secretary may not -

(1) require any borrower to provide additional collateral to

secure a farmer program loan made or insured under this chapter,

if the borrower is current in the payment of principal and

interest on the loan; or

(2) bring any action to foreclose, or otherwise liquidate, any

such loan as a result of the failure of a borrower to provide

additional collateral to secure a loan, if the borrower was

current in the payment of principal and interest on the loan at

the time the additional collateral was requested.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 307, Aug. 8, 1961, 75 Stat. 308;

Pub. L. 92-419, title I, Sec. 113, 114, 128(b), Aug. 30, 1972, 86

Stat. 660, 666; Pub. L. 95-334, title I, Sec. 108, Aug. 4, 1978, 92

Stat. 422; Pub. L. 97-35, title I, Sec. 160(a), Aug. 13, 1981, 95

Stat. 376; Pub. L. 99-198, title XIII, Sec. 1304A, 1305, Dec. 23,

1985, 99 Stat. 1521; Pub. L. 100-233, title VI, Sec. 603, 604, Jan.

6, 1988, 101 Stat. 1665, 1666; Pub. L. 101-624, title XVIII, Sec.

1803(a), title XXIII, Sec. 2383, Nov. 28, 1990, 104 Stat. 3818,

4050; Pub. L. 102-552, title V, Sec. 516(c)(1), Oct. 28, 1992, 106

Stat. 4137; Pub. L. 103-328, title I, Sec. 113(a), Sept. 29, 1994,

108 Stat. 2366; Pub. L. 104-127, title VI, Sec. 604, 661(a), title

VII, Sec. 747(b)(1), Apr. 4, 1996, 110 Stat. 1086, 1106, 1128.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs.

(a)(6)(A) and (e)(1), see note set out under section 1921 of this

title.

-MISC2-

AMENDMENTS

1996 - Subsec. (a)(3)(B). Pub. L. 104-127, Sec. 604(1), inserted

''subparagraph (D) and in'' after ''Except as provided in''.

Subsec. (a)(3)(D). Pub. L. 104-127, Sec. 604(2), added subpar.

(D).

Subsec. (a)(4). Pub. L. 104-127, Sec. 661(a)(1), substituted

''1926(a)(1) and 1932 of this title'' for ''1924(b), 1926(a)(1),

and 1932 of this title''.

Subsec. (a)(6)(B). Pub. L. 104-127, Sec. 661(a)(2), inserted

''and'' at end of cl. (v), substituted a period for '', and'' at

end of cl. (vi), redesignated cls. (iii), (v), and (vi) as (i),

(ii), and (iii), respectively, and struck out cls. (i), (ii), (iv),

and (vii) which read as follows:

''(i) clauses (2) and (3) of section 1923(a) of this title,

''(ii) section 1924(b) of this title,

''(iv) section 1926(a)(15) of this title,

''(vii) section 1934(a) of this title as it relates to the making

or insuring of loans under clauses (2) and (3) of section 1923(a)

of this title.''

Subsec. (a)(6)(B)(iii). Pub. L. 104-127, Sec. 747(b)(1),

substituted ''section 1932(d) of this title'' for ''subsections (d)

and (e) of section 1932 of this title''.

1994 - Subsec. (a)(3)(A). Pub. L. 103-328, Sec. 113(a)(1),

substituted ''Notwithstanding the provisions of the constitution or

laws of any State limiting the rate or amount of interest that may

be charged, taken, received, or reserved, except'' for ''Except''.

Subsec. (a)(5). Pub. L. 103-328, Sec. 113(a)(2), substituted

''(5)(A) Except as provided in subparagraph (B), the'' for ''(5)

The'' and added subpar. (B).

1992 - Subsec. (a)(6)(B)(ii) to (viii). Pub. L. 102-552

redesignated cls. (iii) to (viii) as (ii) to (vii) and struck out

former cl. (ii) which read as follows: ''the provisions of section

1924(a) of this title, relating to the financing of outdoor

recreational enterprises or the conversion of farming or ranching

operations to recreational uses,''.

1990 - Subsec. (a)(3)(A). Pub. L. 101-624, Sec. 2383(1),

substituted ''guaranteed'' for ''guranteed''.

Subsec. (a)(3)(B). Pub. L. 101-624, Sec. 1803(a), amended subpar.

(B) generally. Prior to amendment, subpar. (B) read as follows:

''Except as provided in paragraph (6), the interest rates on loans

(other than guaranteed loans) under section 1934 of this title

shall be as determined by the Secretary, but not in excess of

one-half of the current average market yield on outstanding

marketable obligations of the United States with remaining periods

to maturity comparable to the average maturities of such loans, nor

less than 5 per centum per annum.''

Subsec. (a)(3)(C). Pub. L. 101-624, Sec. 2383(2), added subpar.

(C).

1988 - Subsec. (c). Pub. L. 100-233, Sec. 603, inserted

provisions at end relating to use of same collateral to secure two

or more loans made, insured, or guaranteed under this subchapter.

Subsec. (e). Pub. L. 100-233, Sec. 604, added subsec. (e).

1985 - Subsec. (a)(3)(A). Pub. L. 99-198, Sec. 1304A, substituted

''where the median household income of the persons to be served by

such facility is below the higher of 80 per centum of the statewide

nonmetropolitan median household income or the poverty line

established by the Office of Management and Budget, as revised

under section 9902(2) of title 42'' for ''where the median family

income of the persons to be served by such facility is below the

poverty line prescribed by the Office of Management and Budget as

adjusted under section 2971d of title 42'' and prescribed a 7 per

centum per annum ceiling on loans for facilities that do not

qualify for the 5 per centum per annum interest rate but are

located in areas where the median household income of the persons

to be served by the facility does not exceed 100 per centum of the

statewide nonmetropolitan median household income.

Subsec. (d). Pub. L. 99-198, Sec. 1305, added subsec. (d).

1981 - Subsec. (a). Pub. L. 97-35 in par. (2) inserted reference

to par. (6), in par. (3) designated existing provisions as subpar.

(A), expanded provisions to take into account provisions of par.

(6) and revised criteria for determination of applicable interest

rates, and added subpar. (B), in par. (4) inserted exception for

par. (6), and added par. (6).

1978 - Subsec. (a). Pub. L. 95-334, Sec. 108(1), substituted

provisions relating to determination of interest rates on loans,

except as provided in pars. (3) to (5), as not in excess of the

current average market yield on outstanding marketable obligations

of the United States, with comparable remaining periods of maturity

to the average maturities of such loans plus additional adjusted

amounts, for provisions relating to establishment of interest rates

on loans, except as specifically provided, but not in excess of 5

per centum per annum.

Subsecs. (b), (c). Pub. L. 95-334, Sec. 108(2), (3), added

subsec. (b) and redesignated former subsec. (b) as (c).

1972 - Subsec. (a). Pub. L. 92-419, Sec. 113, 114, prescribed

interest rates on rural development other than guaranteed and

guaranteed loans and escrow payment of taxes and insurance,

respectively.

Subsec. (b). Pub. L. 92-419, Sec. 128(b), substituted ''may'' for

''shall'' in second sentence.

EFFECTIVE DATE OF 1994 AMENDMENT

Section 113(b) of Pub. L. 103-328 provided that:

''(1) In general. - Except as provided in paragraphs (2) and (3),

the amendments made by subsection (a) (amending this section) shall

apply to a loan made, insured, or guaranteed under the Consolidated

Farm and Rural Development Act (7 U.S.C. 1921 et seq.) in a State

on or after the date of enactment of this Act (Sept. 29, 1994).

''(2) State option. - Except as provided in paragraph (3), the

amendments made by subsection (a) shall not apply to a loan made,

insured, or guaranteed under the Consolidated Farm and Rural

Development Act in a State after the date (that occurs during the

3-year period beginning on the date of enactment of this Act) on

which the State adopts a law or certifies that the voters of the

State have voted in favor of a provision of the constitution or law

of the State that states that the State does not want the

amendments made by subsection (a) to apply with respect to loans

made, insured, or guaranteed under such Act in the State.

''(3) Transitional period. - In any case in which a State takes

an action described in paragraph (2), the amendments made by

subsection (a) shall continue to apply to a loan made, insured, or

guaranteed under the Consolidated Farm and Rural Development Act in

the State after the date the action was taken pursuant to a

commitment for the loan that was entered into during the period

beginning on the date of enactment of this Act, and ending on the

date on which the State takes the action.''

EFFECTIVE DATE OF 1992 AMENDMENT

Section 516(c)(2) of Pub. L. 102-552 provided that: ''The

amendments made by paragraph (1) of this subsection (amending this

section) shall take effect at the same time as the amendments made

by section 501(a) of the Food, Agriculture, Conservation, and Trade

Act Amendments of 1991 (Public Law 102-237; 105 Stat. 1865)

(amending section 1924 of this title) took effect.

EFFECTIVE DATE OF 1981 AMENDMENT

Section 160(c) of Pub. L. 97-35 provided that: ''The amendments

made by this section (amending this section and section 1946 of

this title) shall apply to loans approved after September 30,

1981.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 935, 1926, 1929, 1991 of

this title; title 25 section 492.

-CITE-

7 USC Sec. 1927a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1927a. Loan interest rates charged by Farmers Home

Administration; grant funds associated with loans

-STATUTE-

Effective October 1, 1981, and thereafter, in the case of water

and waste disposal and community facility borrowers, and effective

November 12, 1983, and thereafter, in the case of housing and farm

borrowers, upon request of the borrower, the interest rate charged

by the Farmers Home Administration to such borrowers shall be the

lower of the rates in effect at either the time of loan approval or

loan closing and any Farmers Home Administration grant funds

associated with such loans shall be set in amount based on the

interest rate in effect at the time of loan approval.

-SOURCE-

(Pub. L. 99-88, title I, Sec. 100, Aug. 15, 1985, 99 Stat. 296;

Pub. L. 100-233, title VI, Sec. 615(b)(1)(A), Jan. 6, 1988, 101

Stat. 1681.)

-COD-

CODIFICATION

Section was enacted as part of the Supplemental Appropriations

Act, 1985, and not as part of the Consolidated Farm and Rural

Development Act which comprises this chapter.

-MISC3-

AMENDMENTS

1988 - Pub. L. 100-233 substituted ''Effective October 1, 1981,

and thereafter, in the case of water and waste disposal and

community facility borrowers, and effective November 12, 1983, and

thereafter, in the case of housing and farm borrowers'' for

''Effective November 12, 1983, and thereafter'' and ''to such

borrowers'' for ''to housing, farm, water and waste disposal, and

community facility borrowers''.

APPLICABILITY OF 1988 AMENDMENT

Section 615(b)(1)(B) of Pub. L. 100-233 provided that: ''The

amendment made by subparagraph (A) (amending this section) shall

not apply to any note or other obligation sold under section 1001

of the Omnibus (Budget) Reconciliation Act of 1986 (Pub. L. 99-509,

7 U.S.C. 1929a note) on or before the date of the enactment of this

paragraph (Jan. 6, 1988).''

-CITE-

7 USC Sec. 1928 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1928. Full faith and credit

-STATUTE-

(a) In general

A contract of insurance or guarantee executed by the Secretary

under this chapter shall be an obligation supported by the full

faith and credit of the United States.

(b) Contestability

A contract of insurance or guarantee executed by the Secretary

under this chapter shall be incontestable except for fraud or

misrepresentation that the lender or any holder -

(1) has actual knowledge of at the time the contract or

guarantee is executed; or

(2) participates in or condones.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 308, Aug. 8, 1961, 75 Stat. 308;

Pub. L. 87-798, Oct. 11, 1962, 76 Stat. 908; Pub. L. 89-240, Sec.

2(a), Oct. 7, 1965, 79 Stat. 932; Pub. L. 90-488, Sec. 6, Aug. 15,

1968, 82 Stat. 770; Pub. L. 92-133, Oct. 5, 1971, 85 Stat. 364;

Pub. L. 101-624, title XXIII, Sec. 2388(a), Nov. 28, 1990, 104

Stat. 4052; Pub. L. 104-127, title VI, Sec. 605, Apr. 4, 1996, 110

Stat. 1086.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127 amended section generally. Prior to

amendment, section read as follows: ''Loans under this subchapter

may be insured by the Secretary whenever funds are advanced or a

loan is purchased by a lender other than the United States. In

connection with insurance of loans, the Secretary -

''(1) is authorized to make agreements with respect to the

servicing of loans insured hereunder and to purchase such loans

on such terms and conditions as he may prescribe; and

''(2) may retain out of payments by the borrower a charge at a

rate specified in the insurance agreement applicable to the loan.

Any contract of insurance executed by the Secretary under this

subchapter shall be an obligation supported by the full faith and

credit of the United States and incontestable except for fraud or

misrepresentation of which the holder has actual knowledge.''

1990 - Pub. L. 101-624 redesignated pars. (a) and (b) as pars.

(1) and (2), respectively, and in par. (1), substituted

''prescribe;'' for ''prescribe,;''.

1971 - Pub. L. 92-133 eliminated October 1, 1971, as time

limitation for insurance of loans.

1968 - Pub. L. 90-488 authorized insurance of loans until Oct. 1,

1971, without the $450,000,000 limitation on aggregate amount in

any one year.

1965 - Pub. L. 89-240 substituted ''$450,000,000'' for

''$200,000,000'', ''may retain'' for ''shall retain'', and

''specified in the insurance agreement applicable to the loan'' for

''determined by the Secretary from time to time equivalent to not

less than one-half of 1 per centum per annum on the principal

unpaid balance of the loan'', and struck out ''except that no

agreement shall provide for purchase by the Secretary at a date

sooner than three years from the date of the note'' after ''he may

prescribe''.

1962 - Pub. L. 87-798 increased aggregate amount of loans that

may be insured in any one year from $150,000,000 to $200,000,000.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 25 section 488; title 42

section 1485.

-CITE-

7 USC Sec. 1929 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1929. Agricultural Credit Insurance Fund

-STATUTE-

(a) Revolving fund

The fund established pursuant to section 11(a) of the

Bankhead-Jones Farm Tenant Act, as amended, shall hereafter be

called the Agricultural Credit Insurance Fund and is hereinafter in

this subchapter referred to as the ''fund''. The fund shall remain

available as a revolving fund for the discharge of the obligations

of the Secretary under agreements insuring loans under this

subchapter and loans and mortgages insured under prior authority.

(b) Deposits of funds; investments; purchase of notes

Moneys in the fund not needed for current operations shall be

deposited in the Treasury of the United States to the credit of the

fund or invested in direct obligations of the United States or

obligations guaranteed by the United States. The Secretary may

purchase with money in the fund any notes issued by the Secretary

to the Secretary of the Treasury for the purpose of obtaining money

for the fund.

(c) Notes; form and denominations; maturities; terms and

conditions; interest rate; purchase by Treasury; public debt

transaction

The Secretary is authorized to make and issue notes to the

Secretary of the Treasury for the purpose of obtaining funds

necessary for discharging obligations under this section and for

authorized expenditures out of the fund. Such notes shall be in

such form and denominations and have such maturities and be subject

to such terms and conditions as may be prescribed by the Secretary

with the approval of the Secretary of the Treasury. Such notes

shall bear interest at a rate fixed by the Secretary of the

Treasury, taking into consideration the current average market

yield of outstanding marketable obligations of the United States

having maturities comparable to the notes issued by the Secretary

under this subchapter. The Secretary of the Treasury is authorized

and directed to purchase any notes of the Secretary issued

hereunder, and, for that purpose, the Secretary of the Treasury is

authorized to use as a public debt transaction the proceeds from

the sale of any securities issued under chapter 31 of title 31, and

the purposes for which such securities may be issued under such

chapter are extended to include the purchase of notes issued by the

Secretary. All redemptions, purchases, and sales by the Secretary

of the Treasury of such notes shall be treated as public debt

transactions of the United States.

(d) Notes and security as part of fund; collection or sale of

notes; deposit of net proceeds in fund

Notes and security acquired by the Secretary in connection with

loans insured under this subchapter and under prior authority shall

become a part of the fund. Notes may be held in the fund and

collected in accordance with their terms or may be sold by the

Secretary with or without agreements for insurance thereof at the

balance due thereon, or on such other basis as the Secretary may

determine from time to time. All net proceeds from such

collections, including sales of notes or property, shall be

deposited in and become a part of the fund.

(e) Deposit in fund of portion of charge on outstanding principal

obligations; availability of remainder of charge, and merger

with appropriations, for administrative expenses

The Secretary shall deposit in the fund all or a portion, not to

exceed one-half of 1 per centum of the unpaid principal balance of

the loan, of any charge collected in connection with the insurance

of loans; and any remainder of any such charge shall be available

for administrative expenses of the Farmers Home Administration and

the Rural Development Administration, in proportion to such charges

collected in connection with the insurance of loans by such agency,

to be transferred annually and become merged with any appropriation

for administrative expenses for such agency.

(f) Utilization of fund

The Secretary may utilize the fund -

(1) to pay amounts to which the holder of the note is entitled

on loans heretofore or hereafter insured accruing between the

date of any payments made by the borrower and the date of

transmittal of any such payments to the lender. In the

discretion of the Secretary, payments other than final payments

need not be remitted to the holder until due or until the next

agreed annual or semiannual remittance date;

(2) to pay to the holder of the notes any deferred or defaulted

installment or, upon assignment of the note to the Secretary at

the Secretary's request, the entire balance due on the loan;

(3) to purchase notes in accordance with agreements previously

entered into;

(4) to pay for contract services, taxes, insurance, prior

liens, expenses necessary to make fiscal adjustments in

connection with the application and transmittal of collections

and other expenses and advances authorized in connection with

insured loans, including the difference between interest payable

by borrowers and interest to which insured lenders or insured

holders are entitled under agreements with the Secretary included

in contracts of insurance;

(5) to pay the Secretary's costs of administration necessary to

insure, make grants, service, and otherwise carry out the

programs under this chapter not specifically covered by the Rural

Development Insurance Fund of section 1929a of this title,

including costs of the Secretary incidental to guaranteeing loans

under this chapter, either directly from the Fund or by transfers

from the Fund to, and merger with, any appropriations for

administrative expenses.

(g) Transfer of funds from Farmers Home Administration direct loan

account and Emergency Credit Revolving Fund; abolition of such

account and fund; payments from Agricultural Credit Insurance

Fund; interest

(1) The assets and liabilities of, and authorizations applicable

to, the Farmers Home Administration direct loan account created by

section 1988(c) of this title (before the amendment made by section

749(a)(1) of the Federal Agriculture Improvement and Reform Act of

1996) and the Emergency Credit Revolving Fund referred to in

section 1966 of this title are hereby transferred to the fund, and

such account and such revolving fund are hereby abolished. Such

assets and their proceeds, including loans made out of the fund

pursuant to this section, shall be subject to the provisions of

this section, the last sentence of section 1926(a)(1), and the last

sentence of section 1927 of this title.

(2) From time to time, and at least at the close of each fiscal

year, the Secretary shall pay from the fund into the Treasury as

miscellaneous receipts interest on the value as determined by the

Secretary, with the approval of the Comptroller General, of the

Government's equity transferred to the fund pursuant to the first

sentence of this subsection plus the cumulative amount of

appropriations made available after enactment of this provision as

capital and for administration of the programs financed from the

fund, less the average undisbursed cash balance in the fund during

the year. The rate of such interest shall be determined by the

Secretary of the Treasury, taking into consideration the current

average yield on outstanding marketable obligations of the United

States with remaining periods to maturity comparable to the average

maturities of loans made or insured from the fund, adjusted to the

nearest one-eighth of 1 per centum. Interest payments may be

deferred with the approval of the Secretary of the Treasury, but

any interest payments so deferred shall themselves bear interest.

If at any time the Secretary determines that moneys in the fund

exceed present and any reasonably prospective future requirements

of the fund, such excess may be transferred to the general fund of

the Treasury.

(h) Guaranteed loans; interest rate for loans sold into secondary

market; loan fees

(1) The Secretary may provide financial assistance to borrowers

for purposes provided in this chapter by guaranteeing loans made by

any Federal or State chartered bank, savings and loan association,

cooperative lending agency, or other legally organized lending

agency.

(2) The interest rate payable by a borrower on the portion of a

guaranteed loan that is sold by a lender to the secondary market

under this chapter may be lower than the interest rate charged on

the portion retained by the lender, but shall not exceed the

average interest rate charged by the lender on loans made to farm

and ranch borrowers.

(3) With regard to any loan guarantee on a loan made by a

commercial or cooperative lender related to a loan made by the

Secretary under section 1935 of this title -

(A) the Secretary shall not charge a fee to any person

(including a lender); and

(B) a lender may charge a loan origination and servicing fee in

an amount not to exceed 1 percent of the amount of the loan.

(4) Maximum guarantee of 90 percent. - Except as provided in

paragraphs (5), (6), and (7), a loan guarantee under this chapter

shall be for not more than 90 percent of the principal and interest

due on the loan.

(5) Refinanced loans guaranteed at 95 percent. - The Secretary

shall guarantee 95 percent of -

(A) in the case of a loan that solely refinances a direct loan

made under this chapter, the principal and interest due on the

loan on the date of the refinancing; or

(B) in the case of a loan that is used for multiple purposes,

the portion of the loan that refinances the principal and

interest due on a direct loan made under this chapter that is

outstanding on the date the loan is guaranteed.

(6) Beginning farmer loans guaranteed up to 95 percent. - The

Secretary may guarantee not more than 95 percent of -

(A) a farm ownership loan for acquiring a farm or ranch to a

borrower who is participating in the down payment loan program

under section 1935 of this title; or

(B) an operating loan to a borrower who is participating in the

down payment loan program under section 1935 of this title that

is made during the period that the borrower has a direct loan

outstanding under this subchapter for acquiring a farm or ranch.

(7) Amount of guarantee of loans for farm operations on tribal

lands. - In the case of an operating loan made to a farmer or

rancher whose farm or ranch land is subject to the jurisdiction of

an Indian tribe and whose loan is secured by 1 or more security

instruments that are subject to the jurisdiction of an Indian

tribe, the Secretary shall guarantee 95 percent of the loan.

(i) Coordination of assistance for qualified beginning farmers and

ranchers

(1) Not later than 60 days after any State expresses to the

Secretary, in writing, a desire to coordinate the provision of

financial assistance to qualified beginning farmers and ranchers in

the State, the Secretary and the State shall conclude a joint

memorandum of understanding that shall govern the coordination of

the provision of the financial assistance by the State and the

Secretary.

(2) The memorandum of understanding shall provide that if a State

beginning farmer program makes a commitment to provide a qualified

beginning farmer or rancher with financing to establish or maintain

a viable farming or ranching operation, the Secretary shall,

subject to applicable law, normal loan approval criteria, and the

availability of funds provide the farmer or rancher with a down

payment loan under section 1935 of this title or a guarantee of the

financing provided by the State program, or both.

(3) The Secretary shall not charge any person (including a

lender) any fee with respect to the provision of any guarantee

under this subsection.

(4) The Secretary shall notify each State of the provisions of

this subsection.

(5) As used in paragraph (1), the term ''State beginning farmer

program'' means any program that is -

(A) carried out by, or under contract with, a State; and

(B) designed to assist persons in obtaining the financial

assistance necessary to enter agriculture and establish viable

farming or ranching operations.

(j) Guarantee of loans made under State beginning farmer or rancher

programs

The Secretary may guarantee under this chapter a loan made under

a State beginning farmer or rancher program, including a loan

financed by the net proceeds of a qualified small issue

agricultural bond for land or property described in section

144(a)(12)(B)(ii) of title 26.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 309, Aug. 8, 1961, 75 Stat. 309;

Pub. L. 87-703, title IV, Sec. 401(3), Sept. 27, 1962, 76 Stat.

632; Pub. L. 89-240, Sec. 2(b), (c), Oct. 7, 1965, 79 Stat. 932;

Pub. L. 89-633, Oct. 8, 1966, 80 Stat. 879; Pub. L. 90-488, Sec. 7,

Aug. 15, 1968, 82 Stat. 771; Pub. L. 92-419, title I, Sec. 115,

Aug. 30, 1972, 86 Stat. 660; Pub. L. 95-113, title XV, Sec.

1510(a), Sept. 29, 1977, 91 Stat. 1022; Pub. L. 95-334, title I,

Sec. 109(a), Aug. 4, 1978, 92 Stat. 423; Pub. L. 101-624, title

XXIII, Sec. 2302(a)(2), Nov. 28, 1990, 104 Stat. 3980; Pub. L.

102-554, Sec. 4, 5(a), Oct. 28, 1992, 106 Stat. 4143; Pub. L.

104-127, title VI, Sec. 606, 661(b), title VII, Sec. 744,

749(b)(1), Apr. 4, 1996, 110 Stat. 1086, 1106, 1125, 1129; Pub. L.

107-171, title V, Sec. 5003, 5004, May 13, 2002, 116 Stat. 342.)

-REFTEXT-

REFERENCES IN TEXT

Section 11(a) of the Bankhead-Jones Farm Tenant Act, as amended,

referred to in subsec. (a), refers to section 11(a) of act July 22,

1937, ch. 517, title I, as added Aug. 14, 1946, ch. 964, Sec. 5, 60

Stat. 1072, which was classified to section 1005a of this title and

was repealed by section 341(a) of Pub. L. 87-128.

For definition of ''this chapter'', referred to in subsecs.

(f)(5), (h)(1), (2), (4), (5), and (j), see note set out under

section 1921 of this title.

Section 1988(c) of this title (before the amendment made by

section 749(a)(1) of the Federal Agriculture Improvement and Reform

Act of 1996), referred to in subsec. (g)(1), means subsec. (c) of

section 1988 of this title prior to repeal by section 749(a)(1) of

Pub. L. 104-127.

-COD-

CODIFICATION

In subsec. (c), ''chapter 31 of title 31'' and ''such chapter''

substituted for ''the Second Liberty Bond Act, as amended'' and

''such Act, as amended,'' respectively, on authority of Pub. L.

97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section

of which enacted Title 31, Money and Finance.

-MISC3-

AMENDMENTS

2002 - Subsec. (h)(4). Pub. L. 107-171, Sec. 5003(1), substituted

''paragraphs (5), (6), and (7)'' for ''paragraphs (5) and (6)''.

Subsec. (h)(7). Pub. L. 107-171, Sec. 5003(2), added par. (7).

Subsec. (j). Pub. L. 107-171, Sec. 5004, added subsec. (j).

1996 - Subsec. (f). Pub. L. 104-127, Sec. 744, redesignated pars.

(2) to (6) as (1) to (5), respectively, and struck out former par.

(1) which read as follows: ''to make loans which could be insured

under this subchapter whenever the Secretary has reasonable

assurance that they can be sold without undue delay, and may sell

and insure such loans;''.

Subsec. (g)(1). Pub. L. 104-127, Sec. 749(b)(1), inserted

''(before the amendment made by section 749(a)(1) of the Federal

Agriculture Improvement and Reform Act of 1996)'' after ''section

1988(c) of this title''.

Pub. L. 104-127, Sec. 661(b), struck out ''section 1928,'' after

''provisions of this section,''.

Subsec. (h)(4) to (6). Pub. L. 104-127, Sec. 606, added pars. (4)

to (6).

1992 - Subsec. (h). Pub. L. 102-554, Sec. 4, designated existing

provisions as par. (1) and added pars. (2) and (3).

Subsec. (i). Pub. L. 102-554, Sec. 5(a), added subsec. (i).

1990 - Subsec. (e). Pub. L. 101-624 inserted ''and the Rural

Development Administration, in proportion to such charges collected

in connection with the insurance of loans by such agency'' and

substituted ''expenses for such agency'' for ''expenses''.

1978 - Subsec. (f)(1), (6). Pub. L. 95-334 in par. (1) struck out

provisions limiting amount of loans outstanding at any one time,

and added par. (6).

1977 - Subsec. (f)(3). Pub. L. 95-113 substituted ''any deferred

or defaulted installment'' for ''any defaulted installment''.

1972 - Subsec. (f)(1). Pub. L. 92-419, Sec. 115(a)(1),

substituted ''$500,000,000'' for ''$100,000,000''.

Subsec. (f)(2). Pub. L. 92-419, Sec. 115(a)(2), substituted

''amounts'' for ''the interest'' and ''payments'' for

''prepayments'' in three places and inserted ''or until the next

agreed annual or semi-annual remittance date'' after ''until due''.

Subsec. (f)(5). Pub. L. 92-419, Sec. 115(a)(3), (4), substituted

''connection with insured loans, including the difference between

interest payable to borrowers and interest to which insured lenders

or insured holders are entitled under agreements with the Secretary

included in contracts of insurance'' for ''section 1985(a) of this

title in connection with insured loans,'' and provided payment for

contract services.

Subsecs. (g), (h). Pub. L. 92-419, Sec. 115(b), added subsecs.

(g) and (h).

1968 - Subsec. (f)(1). Pub. L. 90-488 increased from $50,000,000

to $100,000,000 the aggregate amount of loans to be sold and

insured and undisposed of at any one time.

1966 - Subsec. (f)(2). Pub. L. 89-633 substituted ''until due''

for ''until the due date of the annual installment''.

1965 - Subsec. (e). Pub. L. 89-240, Sec. 2(b), substituted ''all

or a portion, not to exceed one-half of 1 per centum of the unpaid

principal balance of the loan of any charge collected in connection

with the insurance of loans; and any remainder of any such charge''

for ''such portion of the charge collected in connection with the

insurance of loans at least equal to a rate of one-half of 1 per

centum per annum on the outstanding principal obligations and the

remainder of such charge''.

Subsec. (f)(1). Pub. L. 89-240, Sec. 2(c), substituted

''$50,000,000'' for ''$25,000,000''.

1962 - Subsec. (f)(1). Pub. L. 87-703 increased from $10,000,000

to $25,000,000 the aggregate amount of loans to be sold and insured

and undisposed of at any one time.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 606 of Pub. L. 104-127 effective 90 days

after Apr. 4, 1996, and amendment by section 661(b) of Pub. L.

104-127 effective Apr. 4, 1996, see section 663(a), (b) of Pub. L.

104-127, set out as a note under section 1922 of this title.

EFFECTIVE DATE OF 1977 AMENDMENT

Amendment by Pub. L. 95-113 effective Oct. 1, 1977, see section

1901 of Pub. L. 95-113, set out as a note under section 1307 of

this title.

ADVISORY COMMITTEE ON BEGINNING FARMERS AND RANCHERS

Section 5(b) of Pub. L. 102-554 provided that:

''(1) Establishment; purpose. - Not later than 18 months after

the date of enactment of this Act (Oct. 28, 1992), the Secretary of

Agriculture shall establish an advisory committee, to be known as

the 'Advisory Committee on Beginning Farmers and Ranchers', which

shall provide advice to the Secretary on -

''(A) the development of the program of coordinated assistance

to qualified beginning farmers and ranchers under section 309(i)

of the Consolidated Farm and Rural Development Act (7 U.S.C.

1929(i)) (as added by subsection (a) of this section);

''(B) methods of maximizing the number of new farming and

ranching opportunities created through the program;

''(C) methods of encouraging States to participate in the

program;

''(D) the administration of the program; and

''(E) other methods of creating new farming or ranching

opportunities.

''(2) Membership. - The Secretary shall appoint the members of

the Advisory Committee. The Advisory Committee shall include

representatives from the following:

''(A) The Farmers Home Administration.

''(B) State beginning farmer programs (as defined in section

309(i)(5) of the Consolidated Farm and Rural Development Act (as

added by subsection (a) of this section)).

''(C) Commercial lenders.

''(D) Private nonprofit organizations with active beginning

farmer or rancher programs.

''(E) The Cooperative Extension Service.

''(F) Community colleges or other educational institutions with

demonstrated experience in training beginning farmers or

ranchers.

''(G) Other entities or persons providing lending or technical

assistance for qualified beginning farmers or ranchers.''

LIMITATION ON SALES FROM AGRICULTURAL CREDIT INSURANCE FUND

Pub. L. 99-509, title I, Sec. 1002, Oct. 21, 1986, 100 Stat.

1875, provided that: ''During fiscal years 1987 through 1989, no

note shall be sold out of the Agricultural Credit Insurance Fund,

except in connection with transactions with the Secretary of the

Treasury, without prior approval by Congress.''

LOANS TO INDIANS

Authority of the Secretary of Agriculture to make loans to Indian

tribes and tribal corporations to acquire land within reservations,

see sections 488 to 492 of Title 25, Indians.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1929a, 1983a, 1991, 1994,

1999, 6942 of this title; title 25 section 488; title 42 sections

1485, 1487, 8813.

-CITE-

7 USC Sec. 1929-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1929-1. Level of loan programs under Agricultural Credit

Insurance Fund

-STATUTE-

On and after October 28, 1991, no funds in this Act or any other

Act shall be available to carry out loan programs under the

Agricultural Credit Insurance Fund at levels other than those

provided for in advance in appropriations Acts.

-SOURCE-

(Pub. L. 102-142, title III, Oct. 28, 1991, 105 Stat. 899.)

-COD-

CODIFICATION

Section was enacted as part of the Agriculture, Rural

Development, Food and Drug Administration, and Related Agencies

Appropriations Act, 1992, and not as part of the Consolidated Farm

and Rural Development Act which comprises this chapter.

-CITE-

7 USC Sec. 1929a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1929a. Rural Development Insurance Fund

-STATUTE-

(a) Creation; revolving fund; rural development loans

There is hereby created the Rural Development Insurance Fund

(hereinafter in this section referred to as the ''Insurance Fund'')

which shall be used by the Secretary as a revolving fund for the

discharge of the obligations of the Secretary under contracts

guaranteeing or insuring rural development loans. For the purpose

of this section ''rural development loans'' shall be those provided

for by sections 1926(a)(1) and 1932 of this title, except loans

(other than for water systems and waste disposal facilities) of a

type authorized by section 1926(a)(1) of this title prior to its

amendment by the Rural Development Act of 1972.

(b) Transfer of assets and liabilities

The assets and liabilities of the Agricultural Credit Insurance

Fund referred to in section 1929(a) of this title applicable to

loans for water systems and waste disposal facilities under section

1926(a)(1) of this title are hereby transferred to the Insurance

Fund. Such assets (including the proceeds thereof) and liabilities

and rural development loans guaranteed or insured pursuant to this

chapter shall be subject to the provisions of this section.

(c) Credits in the Treasury; investments; notes, purchasing

authority of the Secretary

Moneys in the Insurance Fund not needed for current operations

shall be deposited in the Treasury of the United States to the

credit of the Insurance Fund or invested in direct obligations of

the United States or obligations guaranteed by the United States.

The Secretary may purchase with money in the Insurance Fund any

notes issued by the Secretary to the Secretary of the Treasury for

the purpose of obtaining money for the Insurance Fund.

(d) Notes, issuing authority of the Secretary; use of funds; terms

and conditions, form, denominations, maturities, and interest

rate of notes; notes, purchasing authority of the Secretary of

the Treasury; public debt transactions

The Secretary is authorized to make and issue notes to the

Secretary of the Treasury for the purpose of obtaining funds

necessary for discharging obligations under this section and for

making loans, advances, and authorized expenditures out of the

Insurance Fund. Such notes shall be in such form and denominations

and have such maturities and be subject to such terms and

conditions as may be prescribed by the Secretary with the approval

of the Secretary of the Treasury. Such notes shall bear interest at

a rate fixed by the Secretary of the Treasury, taking into

consideration the current average market yield of outstanding

marketable obligations of the United States having maturities

comparable to the average maturities of rural development loans

made, guaranteed, or insured under this chapter. The Secretary of

the Treasury is authorized and directed to purchase any notes of

the Secretary issued hereunder, and, for that purpose, the

Secretary of the Treasury is authorized to use as a public debt

transaction the proceeds from the sale of any securities issued

under chapter 31 of title 31, and the purposes for which such

securities may be issued under such chapter are extended to include

the purchase of notes issued by the Secretary hereunder. All

redemptions, purchases, and sales by the Secretary of the Treasury

of such notes shall be treated as public debt transactions of the

United States.

(e) Notes and security as part of Insurance Fund; collection and

sale of notes and other obligations; deposit of net proceeds in

Insurance Fund

Notes and security acquired by the Secretary in connection with

rural development loans made, guaranteed, or insured under this

chapter or transferred by subsection (b) of this section shall

become a part of the Insurance Fund. Notes and other obligations

may be held in the Insurance Fund and collected in accordance with

their terms or may be sold by the Secretary with or without

agreements for insurance thereof at the balance due thereon, or on

such other basis as the Secretary may determine from time to time,

including sale on a nonrecourse basis. The Secretary and any

subsequent purchaser of such notes and other obligations sold by

the Secretary on a nonrecourse basis shall be relieved of any

responsibilities that might have been imposed had the borrower

remained indebted to the Secretary. All net proceeds from such

collections, including sales of notes or property, shall be

deposited in and become a part of the Insurance Fund.

(f) Deposit of loan service charges in Insurance Fund

The Secretary shall deposit in the Insurance Fund any charges

collected for loan services provided by the Secretary as well as

charges assessed for losses and costs of administration in

connection with making, guaranteeing, or insuring rural development

loans under this chapter.

(g) Use of Insurance Fund

The Secretary may utilize the Insurance Fund -

(1) to pay amounts to which the holder of insured notes is

entitled on loans heretofore or hereafter insured accruing

between the date of any payments by the borrower and the date of

transmittal of any such payments to the holder. In the

discretion of the Secretary, payments other than final payments

need not be remitted to the holder until due or until the next

agreed annual or semiannual remittance date;

(2) to pay to the holder of insured notes any deferred or

defaulted installment, or upon assignment of the note to the

Secretary at the Secretary's request, the entire balance due on

the loan;

(3) to purchase notes in accordance with contracts of insurance

heretofore or hereafter entered into by the Secretary;

(4) to make payments in compliance with the Secretary's

obligations under contracts of guarantee entered into by him;

(5) to pay taxes, insurance, prior liens, expenses necessary to

make fiscal adjustments in connection with the application and

transmittal of collections or necessary to obtain credit reports

on applicants or borrowers, expenses for necessary services,

including construction inspections, commercial appraisals, loan

servicing, consulting business advisory or other commercial and

technical services, and other program services, and other

expenses and advances authorized in section 1985(a) of this title

in connection with insured loans. Such items may be paid in

connection with guaranteed loans after or in connection with

acquisition by the Secretary of such loans or security therefor

after default, to an extent determined by the Secretary to be

necessary to protect the interest of the Government, or in

connection with grants and any other activity authorized in this

chapter;

(6) to pay the difference between interest payments by

borrowers and interest to which holders of insured notes are

entitled under contracts of insurance heretofore or hereafter

entered into by the Secretary; and

(7) to pay the Secretary's costs of administration necessary to

insure loans under the programs referred to in subsection (a) of

this section, make grants under sections 1926(a) and 1932 of this

title, service, and otherwise carry out such programs, including

costs of the Secretary incidental to guaranteeing rural

development loans under this chapter, either directly from the

Insurance Fund or by transfers from the Fund to, and merger with,

any appropriations for administrative expenses.

(h) Gross income; interest or other income on insured loans

When any loan is sold out of the Insurance Fund as an insured

loan, the interest or other income thereon paid to an insured

holder shall be included in gross income for purposes of chapter 1

of title 26.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 309A, as added Pub. L. 92-419,

title I, Sec. 116, Aug. 30, 1972, 86 Stat. 661; amended Pub. L.

95-113, title XV, Sec. 1510(b), Sept. 29, 1977, 91 Stat. 1022; Pub.

L. 95-334, title I, Sec. 107(b), 110, Aug. 4, 1978, 92 Stat. 422,

424; Pub. L. 99-509, title I, Sec. 1001(b), Oct. 21, 1986, 100

Stat. 1874; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095;

Pub. L. 99-500, title III, Sec. 381(b), Oct. 18, 1986, 100 Stat.

1783-369, and Pub. L. 99-591, title III, Sec. 381(b), Oct. 30,

1986, 100 Stat. 3341-372; Pub. L. 104-127, title VI, Sec. 661(c),

title VII, Sec. 741(b), 745, Apr. 4, 1996, 110 Stat. 1106, 1124,

1125.)

-REFTEXT-

REFERENCES IN TEXT

For statutory changes to section 1926(a)(1) of this title by the

Rural Development Act of 1972, referred to in subsec. (a), see 1972

Amendment note for section 104 of Pub. L. 92-419, set out under

section 1926 of this title. For complete classification of the

Rural Development Act of 1972 to the Code, see Short Title of 1972

Amendment note set out under section 1921 of this title and Tables.

For definition of ''this chapter'', referred to in subsecs. (b),

(d), (e), (f), and (g)(5), (7), see note set out under section 1921

of this title.

-COD-

CODIFICATION

Pub. L. 99-591 is a corrected version of Pub. L. 99-500.

In subsec. (d), ''chapter 31 of title 31'' and ''such chapter''

substituted for ''the Second Liberty Bond Act, as amended'' and

''such Act, as amended,'' respectively, on authority of Pub. L.

97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section

of which enacted Title 31, Money and Finance.

-MISC3-

AMENDMENTS

1996 - Subsec. (a). Pub. L. 104-127, Sec. 741(b), struck out '',

1926(a)(14),'' after ''1926(a)(1)''.

Pub. L. 104-127, Sec. 661(c)(1), substituted ''1926(a)(1),

1926(a)(14), and 1932 of this title'' for ''1924(b), 1926(a)(1),

1926(a)(14), 1932, and 1942(b) of this title''.

Subsec. (b). Pub. L. 104-127, Sec. 661(c)(2), which directed

amendment of first sentence of subsec. (b) by striking ''and

section 1928 of this title'', was executed by striking that

language in second sentence after ''provisions of this section'' to

reflect the probable intent of Congress.

Subsec. (g). Pub. L. 104-127, Sec. 745, redesignated pars. (2) to

(8) as (1) to (7), respectively, and struck out former par. (1)

which read as follows: ''to make rural development loans which

could be insured under this chapter whenever he has a reasonable

assurance that they can be sold without undue delay, and he may

sell and insure such loans;''.

1986 - Subsec. (e). Pub. L. 99-500, Pub. L. 99-509, and Pub. L.

99-591 amended second sentence of subsec. (e) identically,

substituting ''Notes and other obligations'' for ''Notes'' and

substituting '', including sale on a nonrecourse basis. The

Secretary and any subsequent purchaser of such notes or other

obligations sold by the Secretary on a nonrecourse basis shall be

relieved of any responsibilities that might have been imposed had

the borrower remained indebted to the Secretary.'' for period at

end.

Subsec. (h). Pub. L. 99-514 substituted ''Internal Revenue Code

of 1986'' for ''Internal Revenue Code of 1954'', which for purposes

of codification was translated as ''title 26'' thus requiring no

change in text.

1978 - Subsec. (a). Pub. L. 95-334, Sec. 107(b), inserted

reference to section 1926(a)(14) of this title.

Subsec. (g)(8). Pub. L. 95-334, Sec. 110, substituted provisions

relating to payment of costs of administration necessary to insure

loans under subsec. (a) of this section, make grants under sections

1926(a) and 1932 of this title, and otherwise carry out such

programs for provisions relating to payment of costs of

administration of the rural loan development program.

1977 - Subsec. (g)(3). Pub. L. 95-113 substituted ''any deferred

or defaulted installment'' for ''any defaulted installment''.

EFFECTIVE DATE OF 1977 AMENDMENT

Amendment by Pub. L. 95-113 effective Oct. 1, 1977, see section

1901 of Pub. L. 95-113, set out as a note under section 1307 of

this title.

DISASTER ASSISTANCE FOR RURAL BUSINESS ENTERPRISES

Pub. L. 101-82, title IV, Sec. 401, Aug. 14, 1989, 103 Stat. 583,

as amended by Pub. L. 101-220, Sec. 9(d), Dec. 12, 1989, 103 Stat.

1882, provided that:

''(a) Loan Guarantees. - The Secretary of Agriculture shall

guarantee loans made in rural areas to -

''(1) public, private, or cooperative organizations, to Indian

tribes on Federal and State reservations or other federally

recognized Indian tribal groups, or to any other business

entities to assist such organizations, tribes, or entities in

alleviating the distress caused to such organizations, tribes, or

entities, directly or indirectly, by the drought, freeze, storm,

excessive moisture, earthquake, or related condition in 1988 or

1989; and

''(2) such organizations, tribes, or entities that refinance or

restructure debt as a result of losses incurred, directly or

indirectly, because of such natural disasters in 1988 or 1989.

''(b) Eligible Loans. -

''(1) In general. - Loans guaranteed under this section shall

be loans made by any Federal or State chartered bank, savings and

loan association, cooperative lending agency, insurance company,

or other legally organized lending agency.

''(2) Production agriculture. - No application for a loan

guarantee under this section shall be denied on the basis that

such organization, tribe, or entity engages in whole or in part

in production agriculture.

''(c) Loan Guarantee Limits. -

''(1) Percentage of principal and interest. - No guarantee

under this section shall exceed 90 percent of the principal and

interest amount of the loan or $2,500,000, whichever is the

lesser amount.

''(2) Total amount. - The total amount of loan guarantee under

this section shall not exceed $300,000,000.

''(d) Use of the Rural Development Insurance Fund. - The

Secretary shall use the Rural Development Insurance Fund

established under section 309A of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1929a) for the purposes of discharging

the obligations of the Secretary under this section.''

Similar provisions were contained in the following prior act:

Pub. L. 100-387, title III, Sec. 331, Aug. 11, 1988, 102 Stat.

951.

SALE OF RURAL DEVELOPMENT NOTES AND OTHER OBLIGATIONS

Section 1001 of Pub. L. 99-509, as amended by Pub. L. 100-233,

title VIII, Sec. 803, Jan. 6, 1988, 101 Stat. 1714; Pub. L.

101-220, Sec. 12, Dec. 12, 1989, 103 Stat. 1883, provided that:

''(a) Sales Required. - The Secretary of Agriculture, under such

terms as the Secretary may prescribe, shall sell notes and other

obligations held in the Rural Development Insurance Fund

established under section 309A of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1929a) in such amounts as to realize net

proceeds to the Government of not less than -

''(1) $1,000,000,000 from such sales during fiscal year 1987,

''(2) $552,000,000 from such sales during fiscal year 1988, and

''(3) $547,000,000 from such sales during fiscal year 1989.

''(b) (Amended subsec. (e) of this section)

''(c) Contract Provisions. - Consistent with section 309A(e) of

the Consolidated Farm and Rural Development Act (7 U.S.C.

1929a(e)), as amended by subsection (b), any sale of notes or other

obligations, as described in subsection (a), shall not alter the

terms specified in the note or other obligation, except that, on

sale, a note or other obligation shall not be subject to the

provisions of section 333(c) of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1983(c)).

''(d) Eligibility to Purchase Notes. - Notwithstanding any other

provision of law, each institution of the Farm Credit System shall

be eligible to purchase notes and other obligations held in the

Rural Development Insurance Fund and to service (including the

extension of additional credit and all other actions necessary to

preserve, conserve, or protect the institution's interest in the

purchased notes or other obligations), collect, and dispose of such

notes and other obligations, subject only to such terms and

conditions as may be agreed to by the Secretary of Agriculture and

the purchasing institution and as may be approved by the Farm

Credit Administration.

''(e) Loan Servicing. - Prior to selling any note or other

obligation, as described in subsection (a), the Secretary of

Agriculture shall require persons offering to purchase the note or

other obligation to demonstrate -

''(1) an ability or resources to provide such servicing, with

respect to the loans represented by the note or other obligation,

that the Secretary deems necessary to ensure the continued

performance on the loan; and

''(2) the ability to generate capital to provide the borrowers

of the loans such additional credit as may be necessary in proper

servicing of the loans.

''(f) Right of First Refusal. -

''(1) In general. - Before conducting a sale of a portfolio of

notes or other obligations under this section, the Secretary of

Agriculture shall -

''(A) determine whether the issuer of any unsold note or

other obligation desires to purchase the note or other

obligation; and

''(B) if so, hold open for 30 days, an offer to sell the note

or other obligation to the issuer at a price to be determined

under paragraph (2).

''(2) Determination of offering price. -

''(A) Authority. - The Secretary of Agriculture shall

determine, in accordance with subparagraph (B), the price at

which a note or other obligation shall be offered for sale

under this subsection.

''(B) Price. - Such price shall be determined by discounting

the payment stream of such note or other obligation at the

yield on the then most recent sale of the portfolio, adjusted

for changes in market interest rates, servicing and sales

expenses, and the maturity and interest rate of such note.

''(3) Prohibitions. -

''(A) Purchase of obligation not tied to purchase of other

obligations. - The Secretary of Agriculture shall not require

the issuer of any unsold note or other obligation to be offered

for sale under this subsection to purchase any other such note

or other obligation as a condition of the sale of any such note

or other obligation to the issuer.

''(B) Offer to be made without regard to financing. - The

Secretary shall offer notes or other obligations for sale to

the issuers thereof under this subsection without regard to the

manner in which such issuers intend to finance the purchase of

such notes or other obligations. However, the price of sale to

any issuer using tax exempt financing shall be determined using

a yield reflective of the Schedule of Certified Interest Rates

as published monthly by the Secretary of the Treasury.

''(g) Applicability of Prohibition on Curtailment or Limitation

of Service. - Section 306(b) of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1926(b)) shall be applicable to all notes

or other obligations sold or intended to be sold under this

section.

''(h)(1) Notwithstanding the provisions of section 633 of the

Rural Development, Agriculture, and Related Agencies Appropriations

Act, 1989 (Public Law 100-460) (title VI, Oct. 1, 1988, 102 Stat.

2263), the Secretary of Agriculture shall offer to the issuer of

any unsold note or other obligation described in paragraph (2)(A)

for which such issuer made the good faith deposit described in

paragraph (2)(A) the opportunity to purchase such note or other

obligation consistent with the provisions of this subsection and

subsections (f)(2) and (f)(3).

''(2) The provisions of this subsection shall apply only to those

issuers who:

''(A) on or before March 9, 1989, made a good faith deposit

under this section for fiscal year 1989 with the Secretary to

purchase a note or other obligation held in the Rural Development

Insurance Fund; and

''(B) otherwise meet all eligibility criteria, as such criteria

existed immediately prior to May 9, 1989, at the time the

purchase occurs under this subsection.

''(3) The opportunity to purchase any such note or other

obligation shall be held open, under the policies and procedures in

effect under subsections (f)(2) and (f)(3) immediately prior to May

9, 1989, for 150 days after the date of enactment of this

subsection (Dec. 12, 1989). The Secretary shall not require any

further good faith deposit from issuers who qualify under this

subsection. The Secretary shall notify eligible issuers of the

opportunity afforded under this subsection within 30 days after the

date of enactment of this subsection and may require such issuers

to express an intention to purchase their note or other obligation

by a date certain.''

Section 381 of Pub. L. 99-500 and Pub. L. 99-591 provided that:

''(a) In General. - The Secretary of Agriculture shall, under

such terms as the Secretary may prescribe, sell notes and other

obligations held in the Rural Development Insurance Fund

established under section 309A of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1929a) in such amounts as to realize net

proceeds of not less than -

''(1) $25,000,000 from such sales during fiscal year 1987;

''(2) $36,000,000 from such sales during fiscal year 1988; and

''(3) $37,000,000 from such sales during fiscal year 1989.

''(b) (Amended subsec. (e) of this section)

''(c) Farm Credit System Institutions. - Notwithstanding any

other provision of law, institutions of the Farm Credit System

operating under the Farm Credit Act of 1971 (12 U.S.C. 2001) shall

be eligible to purchase notes and other obligations held in the

Rural Development Insurance Fund and to service (including the

extension of additional credit and all other actions necessary to

preserve, conserve, or protect the institutions' interests in such

notes and other obligations), collect, and dispose of such notes

and other obligations, subject only to such terms and conditions as

may be agreed to by the Secretary of Agriculture and such

purchasing institutions and as are approved by the Farm Credit

Administration.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1929, 1929b, 6942 of this

title; title 42 section 8813.

-CITE-

7 USC Sec. 1929b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1929b. Purchase of guaranteed portions of loans; terms and

conditions; exercise of authorities

-STATUTE-

The Secretary may purchase, on such terms and conditions as the

Secretary deems appropriate, the guaranteed portion of any loan

guaranteed under this chapter: Provided, That the Secretary may not

pay for any such guaranteed portion of a loan in excess of an

amount equal to the unpaid principal balance and accrued interest

on the guaranteed portion of the loan. The Secretary may use for

such purchases funds from the Rural Development Insurance Fund with

respect to rural development loans as defined in section 1929a(a)

of this title and funds from the Agricultural Credit Insurance Fund

with respect to all other loans under this chapter. This authority

may be exercised only if the Secretary determines that an adequate

secondary market is not available in the private sector.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 309B, as added Pub. L. 95-334,

title I, Sec. 111, Aug. 4, 1978, 92 Stat. 424.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2001 of this title.

-CITE-

7 USC Sec. 1930 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1930. Continued availability of appropriated funds for direct

real estate loans to farmers and ranchers

-STATUTE-

Funds appropriated for the purpose of making direct real estate

loans to farmers and ranchers under this subchapter shall remain

available until expended.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310, as added Pub. L. 91-524,

title VIII, Sec. 806(b), Nov. 30, 1970, 84 Stat. 1383.)

-CITE-

7 USC Sec. 1931 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1931. Repealed. Pub. L. 104-127, title VII, Sec. 746, Apr. 4,

1996, 110 Stat. 1125

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 310A, as added Pub. L.

92-419, title I, Sec. 117, Aug. 30, 1972, 86 Stat. 663, related to

insured watershed and resource conservation and development loans.

-CITE-

7 USC Sec. 1932 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1932. Rural industrialization assistance

-STATUTE-

(a) Loans for private business enterprises; pollution abatement and

control; aquaculture; solar energy; loan guarantees

The Secretary may also make and insure loans to public, private,

or cooperative organizations organized for profit or nonprofit, to

Indian tribes on Federal and State reservations or other federally

recognized Indian tribal groups, or to individuals for the purposes

of (1) improving, developing, or financing business, industry, and

employment and improving the economic and environmental climate in

rural communities, including pollution abatement and control, (2)

the conservation, development, and use of water for aquaculture

purposes in rural areas, (3) reducing the reliance on nonrenewable

energy resources by encouraging the development and construction of

solar energy systems and other renewable energy systems (including

wind energy systems and anaerobic digestors for the purpose of

energy generation), including the modification of existing systems,

in rural areas, and (4) to facilitate economic opportunity for

industries undergoing adjustment from terminated Federal

agricultural price and income support programs or increased

competition from foreign trade. For the purposes of this

subsection, the term ''solar energy'' means energy derived from

sources (other than fossil fuels) and technologies included in the

Federal Nonnuclear Energy Research and Development Act of 1974, as

amended (42 U.S.C. 5901 et seq.). Such loans, when originated,

held, and serviced by other lenders, may be guaranteed by the

Secretary under this section without regard to paragraphs (1) and

(4) of section 1983 of this title. As used in this subsection, the

term ''aquaculture'' means the culture or husbandry of aquatic

animals or plants by private industry for commercial purposes

including the culture and growing of fish by private industry for

the purpose of creating or augmenting publicly owned and regulated

stocks of fish. No loan may be made, insured, or guaranteed under

this subsection that exceeds $25,000,000 in principal amount.

(b) Solid waste management grants

The Secretary may make grants to nonprofit organizations for the

provision of regional technical assistance to local and regional

governments and related agencies for the purpose of reducing or

eliminating pollution of water resources and improving the planning

and management of solid waste disposal facilities. Grants made

under this paragraph for the provision of technical assistance

shall be made for 100 percent of the cost of such assistance.

(c) Rural business enterprise grants

(1) Grants

(A) In general

The Secretary may also make grants, not to exceed $50,000,000

annually, to public bodies and private nonprofit corporations

for measures designed to finance and facilitate development of

small and emerging private business enterprises (including

nonprofit entities) or the creation, expansion, and operation

of rural distance learning networks or rural learning programs

that provide educational instruction or job training

instruction related to potential employment or job advancement

to adult students, including the development, construction or

acquisition of land, buildings, plants, equipment, access

streets and roads, parking areas, utility extensions, necessary

water supply and waste disposal facilities, refinancing,

services and fees.

(B) Small and emerging private business enterprises

(i) In general

For the purpose of subparagraph (A), a small and emerging

private business enterprise shall include (regardless of the

number of employees or operating capital of the enterprise)

an eligible nonprofit entity, or other tax-exempt

organization, with a principal office in an area that is

located -

(I) on land of an existing or former Native American

reservation; and

(II) in a city, town, or unincorporated area that has a

population of not more than 5,000 inhabitants.

(ii) Use of grant

An eligible nonprofit entity, or other tax exempt

organization, described in clause (i) may use assistance

provided under this paragraph to create, expand, or operate

value-added processing in an area described in clause (i) in

connection with production agriculture.

(iii) Priority

In making grants under this paragraph, the Secretary shall

give priority to grants that will be used to provide

assistance to eligible nonprofit entities and other tax

exempt organizations described in clause (i).

(2) Passenger transportation services or facilities

The Secretary may award grants on a competitive basis to

qualified nonprofit organizations for the provision of technical

assistance and training to rural communities for the purpose of

improving passenger transportation services or facilities.

Assistance provided under this paragraph may include on-site

technical assistance to local and regional governments, public

transit agencies, and related nonprofit and for-profit

organizations in rural areas, the development of training

materials, and the provision of necessary training assistance to

local officials and agencies in rural areas.

(3) Grants to aid industries in adjusting to terminated Federal

agricultural programs or increased foreign competition

The Secretary may make grants under this section to facilitate

economic opportunity for industries undergoing adjustment from

terminated Federal agricultural price and income support programs

or increased competition from foreign trade.

(d) Joint loans or grants for private business enterprises;

restrictions; system of certification for expeditious

processing of requests for assistance; prior approval of grant

or loan; equity investment as condition for loan commitment;

issuance of certificates of beneficial ownership of notes

(1) The Secretary may participate in joint financing to

facilitate development of private business enterprises in rural

areas with the Economic Development Administration, the Small

Business Administration, and the Department of Housing and Urban

Development and other Federal and State agencies and with private

and quasi-public financial institutions, through joint loans to

applicants eligible under subsection (a) of this section for the

purpose of improving, developing, or financing business, industry,

and employment and improving the economic and environmental climate

in rural areas or through joint grants to applicants eligible under

subsection (c) of this section for such purposes, including in the

case of loans or grants the development, construction, or

acquisition of land, buildings, plants, equipment, access streets

and roads, parking areas, utility extensions, necessary water

supply and waste disposal facilities, refining, service and fees.

(2) No financial or other assistance shall be extended under any

provision of this section, except for cases in which such

assistance does not exceed $1,000,000 or for cases in which direct

employment will not be increased by more than fifty employees, that

is calculated to or is likely to result in the transfer from one

area to another of any employment or business activity provided by

operations of the applicant, but this limitation shall not be

construed to prohibit assistance for the expansion of an existing

business entity through the establishment of a new branch,

affiliate, or subsidiary of such entity if the establishment of

such branch, affiliate, or subsidiary will not result in an

increase in unemployment in the area of original location or in any

other area where such entity conducts business operations unless

there is reason to believe that such branch, affiliate, or

subsidiary is being established with the intention of closing down

the operations of the existing business entity in the area of its

original location or in any other area where it conducts such

operations.

(3) No financial or other assistance shall be extended under any

provision of this section, except for cases in which such

assistance does not exceed $1,000,000 or for cases in which direct

employment will not be increased by more than fifty employees,

which is calculated to or likely to result in an increase in the

production of goods, materials, or commodities, or the availability

of services or facilities in the area, when there is not sufficient

demand for such goods, materials, commodities, services or

facilities, to employ the efficient capacity of existing

competitive commercial or industrial enterprises, unless such

financial or other assistance will not have an adverse effect upon

existing competitive enterprises in the area.

(4) No financial or other assistance shall be extended under any

provision of this section, except for cases in which such

assistance does not exceed $1,000,000 or for cases in which direct

employment will not be increased by more than fifty employees, if

the Secretary of Labor certifies within 30 days after the matter

has been submitted to him by the Secretary of Agriculture that the

provisions of paragraphs (2) and (3) of this subsection have not

been complied with. The Secretary of Labor shall, in cooperation

with the Secretary of Agriculture, develop a system of

certification which will insure the expeditious processing of

requests for assistance under this section.

(5) No grant or loan authorized to be made under this chapter

shall require or be subject to the prior approval of any officer,

employee, or agency of any State.

(6) No loan commitment issued under this section shall be

conditioned upon the applicant investing in excess of 10 per centum

in the business or industrial enterprise for which purpose the loan

is to be made unless the Secretary determines there are special

circumstances which necessitate an equity investment by the

applicant greater than 10 per centum.

(7) No provision of law shall prohibit issuance by the Secretary

of certificates evidencing beneficial ownership in a block of notes

insured or guaranteed under this chapter or Title V of the Housing

Act of 1949 (42 U.S.C. 1471 et seq.); any sale by the Secretary of

such certificates shall be treated as a sale of assets for the

purposes of chapter 11 of title 31. Any security representing

beneficial ownership in a block of notes guaranteed or insured

under this chapter or Title V of the Housing Act of 1949 issued by

a private entity shall be exempt from laws administered by the

Securities and Exchange Commission, except sections 77q, 77v, and

77x of title 15; however, the Secretary shall require (i) that the

issuer place such notes in the custody of an institution chartered

by a Federal or State agency to act as trustee and (ii) that the

issuer provide such periodic reports of sales as the Secretary

deems necessary.

(e) Rural cooperative development grants

(1) Definitions

In this subsection:

(A) Nonprofit institution

The term ''nonprofit institution'' means any organization or

institution, including an accredited institution of higher

education, no part of the net earnings of which inures, or may

lawfully inure, to the benefit of any private shareholder or

individual.

(B) United States

The term ''United States'' means the several States, the

District of Columbia, the Commonwealth of Puerto Rico, the

Virgin Islands, Guam, American Samoa, and the other territories

and possessions of the United States.

(2) Grants

The Secretary shall make grants, effective October 1, 1996,

under this subsection to nonprofit institutions for the purpose

of enabling the institutions to establish and operate centers for

rural cooperative development.

(3) Goals

The goals of a center funded under this subsection shall be to

facilitate the creation of jobs in rural areas through the

development of new rural cooperatives, value added processing,

and rural businesses.

(4) Application

Any nonprofit institution seeking a grant under paragraph (2)

shall submit to the Secretary an application containing a plan

for the establishment and operation by the institution of a

center or centers for cooperative development. The Secretary may

approve the application if the plan contains the following:

(A) A provision that substantiates that the center will

effectively serve rural areas in the United States.

(B) A provision that the primary objective of the center will

be to improve the economic condition of rural areas through

cooperative development.

(C) A description of the activities that the center will

carry out to accomplish the objective. The activities may

include the following:

(i) Programs for applied research and feasibility studies

that may be useful to individuals, cooperatives, small

businesses, and other similar entities in rural areas served

by the center.

(ii) Programs for the collection, interpretation, and

dissemination of information that may be useful to

individuals, cooperatives, small businesses, and other

similar entities in rural areas served by the center.

(iii) Programs providing training and instruction for

individuals, cooperatives, small businesses, and other

similar entities in rural areas served by the center.

(iv) Programs providing loans and grants to individuals,

cooperatives, small businesses, and other similar entities in

rural areas served by the center.

(v) Programs providing technical assistance, research

services, and advisory services to individuals, cooperatives,

small businesses, and other similar entities in rural areas

served by the center.

(vi) Programs providing for the coordination of services

and sharing of information among the center. (FOOTNOTE 1)

(FOOTNOTE 1) So in original. Probably should be ''centers.''

(D) A description of the contributions that the activities

are likely to make to the improvement of the economic

conditions of the rural areas for which the center will provide

services.

(E) Provisions that the center, in carrying out the

activities, will seek, where appropriate, the advice,

participation, expertise, and assistance of representatives of

business, industry, educational institutions, the Federal

Government, and State and local governments.

(F) Provisions that the center will take all practicable

steps to develop continuing sources of financial support for

the center, particularly from sources in the private sector.

(G) Provisions for -

(i) monitoring and evaluating the activities by the

nonprofit institution operating the center; and

(ii) accounting for money received by the institution under

this section.

(5) Awarding grants

Grants made under paragraph (2) shall be made on a competitive

basis. In making grants under paragraph (2), the Secretary shall

give preference to grant applications providing for the

establishment of centers for rural cooperative development that -

(A) demonstrate a proven track record in administering a

nationally coordinated, regionally or State-wide operated

project;

(B) demonstrate previous expertise in providing technical

assistance in rural areas;

(C) demonstrate the ability to assist in the retention of

businesses, facilitate the establishment of cooperatives and

new cooperative approaches, and generate employment

opportunities that will improve the economic conditions of

rural areas;

(D) demonstrate the ability to create horizontal linkages

among businesses within and among various sectors in rural

areas of the United States and vertical linkages to domestic

and international markets;

(E) commit to providing technical assistance and other

services to underserved and economically distressed areas in

rural areas of the United States; and

(F) commit to providing greater than a 25 percent matching

contribution with private funds and in-kind contributions,

except that the Secretary shall not require non-Federal

financial support in an amount that is greater than 5 percent

in the case of a 1994 institution (as defined in section 532 of

the Equity in Educational Land-Grant Status Act of 1994 (7

U.S.C. 301 note; Public Law 103-382)).

(6) 1-year grants; authority to approve grant for 1 additional

year without application

The Secretary shall make grants under this subsection for a

period of 1 year. The Secretary shall evaluate programs

receiving assistance under this subsection. If the Secretary

determines it to be in the best interest of the program, the

Secretary may award an additional grant to the program for the

immediately succeeding year without application for the grant.

(7) Technical assistance to prevent excessive unemployment or

underemployment

In carrying out this subsection, the Secretary may provide

technical assistance to alleviate or prevent conditions of

excessive unemployment, underemployment, outmigration, or low

employment growth in economically distressed rural areas that the

Secretary determines have a substantial need for the assistance.

The assistance may include planning and feasibility studies,

management and operational assistance, and studies evaluating the

need for development potential of projects that increase

employment and improve economic growth in the areas.

(8) Grants to defray administrative costs

The Secretary may make grants to defray not to exceed 75

percent of the costs incurred by organizations and public bodies

to carry out projects for which grants or loans are made under

this subsection. For purposes of determining the non-Federal

share of the costs, the Secretary shall consider contributions in

cash and in kind, fairly evaluated, including premises,

equipment, and services.

(9) Authorization of appropriations

There are authorized to be appropriated to carry out this

subsection $50,000,000 for each of fiscal years 1996 through

2007.

(f) Grants to broadcasting systems

(1) ''Statewide'' defined

In this subsection, the term ''statewide'' means having a

coverage area of not less than 90 percent of the population of a

State and not less than 80 percent of the rural land area of the

State (as determined by the Secretary).

(2) Grants

The Secretary may make grants to statewide private nonprofit

public television systems, whose coverage area is predominately

rural, for the purpose of demonstrating the effectiveness of such

systems in providing information on agriculture and other issues

of importance to farmers and other rural residents. Grants

available under this paragraph may be used for capital equipment

expenditures, start-up and program costs, and other costs

necessary to the operation of such demonstrations.

(3) Authorization of appropriations

There is authorized to be appropriated to carry out this

subsection $5,000,000 for each of fiscal years 2002 through 2007.

(g) Business and industry direct and guaranteed loans

(1) Definition of business and industry loan

In this subsection, the term ''business and industry loan''

means a business and industry direct or guaranteed loan that is

made or guaranteed by the Secretary under subsection (a)(1) of

this section.

(2) Loan guarantees for the purchase of cooperative stock

(A) In general

The Secretary may guarantee a business and industry loan to

individual farmers or ranchers for the purpose of purchasing

capital stock of a farmer or rancher cooperative established

for the purpose of processing an agricultural commodity.

(B) Processing contracts during initial period

A cooperative described in subparagraph (A) for which a

farmer or rancher receives a guarantee to purchase stock under

subparagraph (A) may contract for services to process

agricultural commodities, or otherwise process value-added

agricultural products, during the 5-year period beginning on

the date of the startup of the cooperative in order to provide

adequate time for the planning and construction of the

processing facility of the cooperative.

(C) Financial information

Financial information required by the Secretary from a farmer

or rancher as a condition of making a business and industry

loan guarantee under this paragraph shall be provided in the

manner generally required by commercial agricultural lenders in

the area.

(3) Loans to cooperatives

(A) In general

The Secretary may make or guarantee a business and industry

loan to a cooperative organization that is headquartered in a

metropolitan area if the loan is used for a project or venture

described in subsection (a) of this section that is located in

a rural area or a loan guarantee that meets the requirements of

paragraph (6).

(B) Refinancing

A cooperative organization that is eligible for a business

and industry loan shall be eligible to refinance an existing

business and industry loan with a lender if -

(i) the cooperative organization -

(I) is current and performing with respect to the

existing loan; and

(II) is not, and has not been, in payment default, or the

collateral of which has not been converted, with respect to

the existing loan; and

(ii) there is adequate security or full collateral for the

refinanced loan.

(4) Loan appraisals

The Secretary may require that any appraisal made in connection

with a business and industry loan be conducted by a specialized

appraiser that uses standards that are similar to standards used

for similar purposes in the private sector, as determined by the

Secretary.

(5) Fees

The Secretary may assess a 1-time fee for any guaranteed

business and industry loan in an amount that does not exceed 2

percent of the guaranteed principal portion of the loan.

(6) Loan guarantees in nonrural areas

(A) In general

The Secretary may guarantee a business and industry loan to a

cooperative organization for a facility that is not located in

a rural area if -

(i) the primary purpose of the loan guarantee is for a

facility to provide value-added processing for agricultural

producers that are located within 80 miles of the facility;

(ii) the applicant demonstrates to the Secretary that the

primary benefit of the loan guarantee will be to provide

employment for residents of a rural area; and

(iii) the total amount of business and industry loans

guaranteed for a fiscal year under this paragraph does not

exceed 10 percent of the business and industry loans

guaranteed for the fiscal year under subsection (a)(1) of

this section.

(B) Principal amounts

The principal amount of a business and industry loan

guaranteed under this paragraph may not exceed $25,000,000.

(7) Intangible assets

In determining whether a cooperative organization is eligible

for a guaranteed business and industry loan, the Secretary may

consider the market value of a properly appraised brand name,

patent, or trademark of the cooperative.

(8) Limitations on loan guarantees for cooperative organizations

(A) Principal amount

(i) In general

Subject to clause (ii), the principal amount of a business

and industry loan made to a cooperative organization and

guaranteed under this subsection shall not exceed

$40,000,000.

(ii) Use

To be eligible for a guarantee under this subsection for a

business and industry loan made to a cooperative

organization, the principal amount of the any such loan in

excess of $25,000,000 shall be used to carry out a project -

(I) in a rural area; and

(II) that provides for the value-added processing of

agricultural commodities.

(B) Applications

If a cooperative organization submits an application for a

guarantee under this subsection of a business and industry loan

with a principal amount that is in excess of $25,000,000, the

Secretary -

(i) shall review and, if appropriate, approve the

application; and

(ii) may not delegate the approval authority.

(C) Maximum amount

The total amount of business and industry loans made to

cooperative organizations and guaranteed for a fiscal year

under this subsection with principal amounts that are in excess

of $25,000,000 may not exceed 10 percent of the business and

industry loans guaranteed for the fiscal year under subsection

(a)(1) of this section.

(h) Loan guarantees for certain loans

The Secretary may guarantee loans made under subsection (a) of

this section to finance the issuance of bonds for the projects

described in section 1926(a)(24) of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310B, as added Pub. L. 92-419,

title I, Sec. 118(a), Aug. 30, 1972, 86 Stat. 663; amended Pub. L.

91-524, title VIII, Sec. 817, as added Pub. L. 93-86, Sec.

1(27)(B), Aug. 10, 1973, 87 Stat. 241; Pub. L. 95-113, title XV,

Sec. 1503(b), Sept. 29, 1977, 91 Stat. 1021; Pub. L. 95-334, title

I, Sec. 112, Aug. 4, 1978, 92 Stat. 424; Pub. L. 96-358, Sec. 5,

Sept. 25, 1980, 94 Stat. 1187; Pub. L. 96-438, Sec. 1(2), Oct. 13,

1980, 94 Stat. 1871; Pub. L. 99-409, Sec. 2, Aug. 28, 1986, 100

Stat. 923; Pub. L. 100-203, title I, Sec. 1504, Dec. 22, 1987, 101

Stat. 1330-28; Pub. L. 101-624, title XXIII, Sec. 2325, 2337, 2347,

formerly 2347(a), 2386, 2388(b), (c), Nov. 28, 1990, 104 Stat.

4013, 4022, 4034, 4051, 4052; Pub. L. 102-237, title VII, Sec.

701(c), (h)(1)(C), (D), Dec. 13, 1991, 105 Stat. 1879, 1880; Pub.

L. 102-552, title V, Sec. 516(d), Oct. 28, 1992, 106 Stat. 4137;

Pub. L. 102-554, Sec. 6, Oct. 28, 1992, 106 Stat. 4144; Pub. L.

104-127, title VI, Sec. 635(b), 661(d), title VII, Sec. 705(1),

747(a), 759B, Apr. 4, 1996, 110 Stat. 1093, 1107, 1112, 1125, 1138;

Pub. L. 104-180, title VII, Sec. 731, Aug. 6, 1996, 110 Stat. 1600;

Pub. L. 107-171, title VI, Sec. 6007(b), 6013-6017, May 13, 2002,

116 Stat. 355, 358, 359.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Nonnuclear Energy Research and Development Act of

1974, as amended, referred to in subsec. (a), is Pub. L. 93-577,

Dec. 31, 1974, 88 Stat. 1878, as amended, which is classified

generally to chapter 74 (Sec. 5901 et seq.) of Title 42, The Public

Health and Welfare. For complete classification of this Act to the

Code, see Short Title note set out under section 5901 of Title 42

and Tables.

For definition of ''this chapter'', referred to in subsec.

(d)(5), (7), see note set out under section 1921 of this title.

Title V of the Housing Act of 1949, referred to in subsec.

(d)(7), is title V of act July 15, 1949, ch. 338, 63 Stat. 432, as

amended, which is classified generally to subchapter III (Sec. 1471

et seq.) of chapter 8A of Title 42, The Public Health and Welfare.

For complete classification of this Act to the code, see References

in Text note set out under section 1441 of Title 42 and Tables.

-COD-

CODIFICATION

In subsec. (d)(7), ''chapter 11 of title 31'' substituted for

''the Budget and Accounting Act of 1921 (31 U.S.C. 1 et seq.)'' on

authority of Pub. L. 97-258, Sec. 4(b), Sept. 13, 1982, 96 Stat.

1067, the first section of which enacted Title 31, Money and

Finance.

-MISC3-

AMENDMENTS

2002 - Subsec. (a)(3). Pub. L. 107-171, Sec. 6013, inserted ''and

other renewable energy systems (including wind energy systems and

anaerobic digestors for the purpose of energy generation)'' after

''solar energy systems''.

Subsec. (c)(1). Pub. L. 107-171, Sec. 6014, substituted

''Grants'' for ''In general'' in heading, designated existing

provisions as subpar. (A) and inserted heading, and added subpar.

(B).

Subsec. (e)(5)(F). Pub. L. 107-171, Sec. 6015(1), inserted '',

except that the Secretary shall not require non-Federal financial

support in an amount that is greater than 5 percent in the case of

a 1994 institution (as defined in section 532 of the Equity in

Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note;

Public Law 103-382))'' before period at end.

Subsec. (e)(9). Pub. L. 107-171, Sec. 6015(2), substituted

''2007'' for ''2002''.

Subsec. (f)(3). Pub. L. 107-171, Sec. 6016, added par. (3).

Subsec. (g). Pub. L. 107-171, Sec. 6017, added subsec. (g) and

struck out heading and text of former subsec. (g). Text read as

follows:

''(1) Definition of farmer. - In this subsection, the term

'farmer' means any farmer that the Secretary determines is a family

farmer.

''(2) Loan guarantees. - The Secretary may guarantee loans under

this section to individual farmers for the purpose of purchasing

start-up capital stock of a farmer cooperative established for the

purpose of processing an agricultural commodity.

''(3) Eligibility. - To be eligible for a loan guarantee under

this subsection, a farmer must produce the agricultural commodity

that will be processed by the cooperative.''

Subsec. (h). Pub. L. 107-171, Sec. 6007(b), added subsec. (h).

1996 - Subsec. (a). Pub. L. 104-127, Sec. 747(a)(1), in first

sentence, struck out ''and'' before ''(3)'' and inserted before

period at end '', and (4) to facilitate economic opportunity for

industries undergoing adjustment from terminated Federal

agricultural price and income support programs or increased

competition from foreign trade''.

Pub. L. 104-127, Sec. 635(b), in third sentence, substituted

''(4) of'' for ''(3) of''.

Subsec. (b). Pub. L. 104-127, Sec. 747(a)(2), inserted heading,

redesignated par. (2) as subsec. (b), struck out ''(2)'' before

''The Secretary'', and struck out par. (1) which read as follows:

''Secretary may make grants, not to exceed $50,000,000 annually, to

eligible applicants under this section for pollution abatement and

control projects in rural areas. No such grant shall exceed 50 per

centum of the development cost of such a project.''

Subsec. (c). Pub. L. 104-127, Sec. 747(a)(3), inserted heading,

in par. (1), inserted par. heading and inserted ''(including

nonprofit entities)'' after ''private business enterprises'', in

par. (2), inserted par. heading and substituted ''award grants on a

competitive basis'' for ''make grants'', and added par. (3).

Subsec. (d)(2) to (4). Pub. L. 104-127, Sec. 661(d)(1),

substituted ''provision of this section'' for ''provision of this

section and sections 1924(b) and 1942(b) of this title''.

Subsec. (d)(6). Pub. L. 104-127, Sec. 661(d)(2), substituted

''this section'' for ''this section, section 1924 of this title, or

section 1942 of this title''.

Subsec. (e). Pub. L. 104-127, Sec. 747(a)(4), added subsec. (e)

and struck out former subsec. (e) which authorized the insuring or

guaranteeing of loans for the purpose of constructing or improving

subterminal facilities.

Subsec. (e)(2). Pub. L. 104-180 amended Pub. L. 104-127, Sec.

747(a)(4), which enacted subsec. (e), to insert ''effective October

1, 1996,'' after ''The Secretary shall make grants'' in par. (2).

Subsec. (f). Pub. L. 104-127, Sec. 759B, added par. (1),

redesignated existing provisions as par. (2), and added par.

heading.

Pub. L. 104-127, Sec. 747(a)(5), (6), redesignated subsec. (j) as

(f) and struck out former subsec. (f) which authorized grants to

nonprofit institutions for the purpose of establishing and

operating centers for rural technology or cooperative development.

See subsec. (e) of this section.

Pub. L. 104-127, Sec. 705(1), made technical amendment to

directory language of Pub. L. 101-624, Sec. 2347(a). See 1990

Amendment note below.

Subsec. (g). Pub. L. 104-127, Sec. 747(a)(5), (7), added subsec.

(g) and struck out former subsec. (g) which read as follows: ''In

carrying out subsection (f) of this section, the Secretary may

provide technical assistance to alleviate or prevent conditions of

excessive unemployment or underemployment of persons residing in

economically distressed rural areas that the Secretary determines

have a substantial need for such assistance. Such assistance shall

include planning and feasibility studies, management and

operational assistance, and studies evaluating the needs for

development potential of projects that increase employment and

improve economic growth in such areas.''

Pub. L. 104-127, Sec. 705(1), made technical amendment to

directory language of Pub. L. 101-624, Sec. 2347(a). See 1990

Amendment note below.

Subsec. (h). Pub. L. 104-127, Sec. 747(a)(5), struck out subsec.

(h) which read as follows: ''The Secretary may make grants to

defray not to exceed 75 percent of the administrative costs

incurred by organizations and public bodies to carry out projects

for which grants or loans are made under subsection (f) of this

section. For purposes of determining the non-Federal share of such

costs, the Secretary shall consider contributions in cash and in

kind, fairly evaluated, including but not limited to premises,

equipment, and services.''

Pub. L. 104-127, Sec. 705(1), made technical amendment to

directory language of Pub. L. 101-624, Sec. 2347(a). See 1990

Amendment note below.

Subsec. (i). Pub. L. 104-127, Sec. 747(a)(5), struck out subsec.

(i) which authorized making of loans at low interest rates and at

market rates to 1 or more businesses, local governments, or public

agencies in rural areas to fund facilities in which recipients of

such loans share telecommunications terminal equipment, computers,

computer software, and computer hardware.

Subsec. (j). Pub. L. 104-127, Sec. 747(a)(6), redesignated

subsec. (j) as (f).

1992 - Subsec. (c). Pub. L. 102-554 designated existing

provisions as par. (1) and added par. (2).

Pub. L. 102-552, which directed the substitution of ''business

enterprises or the creation, expansion, and operation of rural

distance learning networks or rural learning programs that provide

educational instruction or job training instruction related to

potential employment or job advancement to adult students,'' for

''business enterprises,'' in section 310B(c) without specifying the

name of the act, was executed to this section, which is section

310B of the Consolidated Farm and Rural Development Act, to reflect

the probable intent of Congress.

1991 - Subsec. (d)(5), (7). Pub. L. 102-237, Sec. 701(h)(1)(C),

(D), substituted ''this chapter'' for ''this Act''.

Subsec. (f)(4). Pub. L. 102-237, Sec. 701(c)(3), (4),

redesignated par. (4), relating to grants to statewide private

nonprofit public television systems, as subsec. (j), and

transferred such provision to follow subsec. (i).

Subsec. (i)(2)(B)(iv). Pub. L. 102-237, Sec. 701(c)(1),

substituted ''(iii) of this subparagraph'' for ''(ii) of this

subsection''.

Subsec. (i)(5)(A). Pub. L. 102-237, Sec. 701(c)(2), inserted

closing parenthesis after ''section 2008(b)(3) of this title''.

Subsec. (j). Pub. L. 102-237, Sec. 701(c)(3)-(5), redesignated

subsec. (f)(4), relating to grants to statewide private nonprofit

public television systems, as subsec. (j), transferred such

provision to follow subsec. (i), and inserted heading.

1990 - Subsec. (a). Pub. L. 101-624, Sec. 2388(b), substituted

''paragraphs (1) and (3)'' for ''subsections (a) and (c)''.

Subsec. (b). Pub. L. 101-624, Sec. 2325, designated existing

provisions as par. (1) and added par. (2).

Subsec. (d). Pub. L. 101-624, Sec. 2388(c), designated first par.

and and pars. (1) to (6) as (1) to (7), respectively, substituted

''paragraphs (2) and (3)'' for ''paragraph (1) and (2)'' in par.

(4), and realigned margins of pars. (5) to (7).

Subsec. (f). Pub. L. 101-624, Sec. 2386, added par. (4) relating

to grants to statewide private nonprofit public television systems.

Pub. L. 101-624, Sec. 2347, formerly Sec. 2347(a), as renumbered

by Pub. L. 104-127, Sec. 705(1), added subsec. (f) and struck out

former subsec. (f) which read as follows:

''(1) The Secretary may make grants under this subsection to

public and nonprofit private institutions for the purpose of

enabling them to establish and operate centers of rural technology

development that have, as a primary objective, the improvement of

the economic condition of rural areas by promoting the development

(through technological innovation and adaptation of existing

technology) and commercialization of (A) new products that can be

produced in rural areas, and (B) new processes that can be used in

such production.

''(2) Grants under this subsection may be made on a competitive

basis. In making grants, the Secretary shall give preference to

applicants that will establish centers for rural technology in

areas that have (A) few industries and agribusinesses, (B) high

levels of unemployment, (C) high rates of out-migration of people,

business, and industries, and (D) low levels of per capita income.

''(3) If grants are to be made under this subsection, the

Secretary shall issue regulations implementing this subsection that

shall include provisions for the monitoring and evaluation of the

rural technology development activities carried out by institutions

that receive grants under this subsection.''

Subsecs. (g), (h). Pub. L. 101-624, Sec. 2347, formerly Sec.

2347(a), as renumbered by Pub. L. 104-127, Sec. 705(1), added

subsecs. (g) and (h).

Subsec. (i). Pub. L. 101-624, Sec. 2337, added subsec. (i).

1987 - Subsec. (c). Pub. L. 100-203 inserted ''and private

nonprofit corporations'' after ''to public bodies'' and substituted

''to finance and facilitate development of small and emerging'' for

''to facilitate development of''.

1986 - Subsec. (a). Pub. L. 99-409, Sec. 2(1), inserted provision

that no loan may be made, insured, or guaranteed under this

subsection that exceeds $25,000,000 in principal amount.

Subsec. (f). Pub. L. 99-409, Sec. 2(2), added subsec. (f).

1980 - Subsec. (a). Pub. L. 96-438 authorized the Secretary to

make and insure loans for the purpose of reducing the reliance on

nonrenewable energy resources by encouraging the development and

construction of solar energy systems, including the modification of

existing systems, in rural areas and defined term ''solar energy'',

for purposes of subsection (a) of this section, as meaning energy

derived from sources, other than fossil fuels, and technologies

included in the Federal Nonnuclear Energy Research and Development

Act of 1974, as amended.

Subsec. (e). Pub. L. 96-358 added subsec. (e).

1978 - Subsec. (d)(1), (2). Pub. L. 95-334, Sec. 112(1), inserted

exception for assistance less than $1,000,000, or where direct

employment will not be increased by more than 50 employees.

Subsec. (d)(3). Pub. L. 95-334, Sec. 112, inserted exception for

assistance less than $1,000,000, or where direct employment will

not be increased by more than 50 employees and substituted ''30''

for ''60''.

1977 - Subsec. (a). Pub. L. 95-113 inserted reference to the

conservation, development, and utilization of water for aquaculture

purposes and inserted definition of ''aquaculture''.

1973 - Subsec. (d)(4) to (6). Pub. L. 91-524, Sec. 817, as added

by Pub. L. 93-86, added pars. (4) to (6).

EFFECTIVE DATE OF 1996 AMENDMENT

Section 731 of Pub. L. 104-180 provided in part: ''That this

section (amending this section) shall take effect upon enactment of

this Act into law (Aug. 6, 1996).''

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by section 701(c) of Pub. L. 102-237 effective as if

included in the provision of the Food, Agriculture, Conservation,

and Trade Act of 1990, Pub. L. 101-624, to which the amendment

relates, and amendment by section 701(h)(1)(C), (D) of Pub. L.

102-237 to any provision specified therein effective as if included

in Act that added provision so specified at the time such Act

became law, see section 1101(b)(6), (c) of Pub. L. 102-237, set out

as a note under section 1421 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

Section 2(2) of Pub. L. 99-409 provided that the amendment made

by that section is effective Oct. 1, 1986.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-358 effective Oct. 1, 1980, see section 6

of Pub. L. 96-358, set out as an Effective Date note under section

3701 of this title.

EFFECTIVE DATE OF 1977 AMENDMENT

Amendment by Pub. L. 95-113 effective Oct. 1, 1977, see section

1901 of Pub. L. 95-113, set out as a note under section 1307 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Powers, duties, and assets of agencies, offices, and other

entities within Department of Agriculture relating to rural

development functions under this section and under section 1323 of

Pub. L. 99-198, set out as a note below, transferred to Rural

Development Administration by section 2302(b) of Pub. L. 101-624.

-MISC5-

BUSINESS DEVELOPMENT

Section 2336 of Pub. L. 101-624 provided that: ''The purposes of

this chapter (chapter 2 (Sec. 2336, 2337) of subtitle D of title

XXIII of Pub. L. 101-624, amending this section) are to -

''(1) provide funds to improve telecommunications service in

rural areas; and

''(2) provide access to advanced telecommunications services

and computer networks to improve job opportunities and the

business environment in rural areas.''

GUARANTEE BY SECRETARY OF AGRICULTURE OF LOANS TO NONPROFIT

NATIONAL RURAL DEVELOPMENT AND FINANCE CORPORATIONS

Pub. L. 99-198, title XIII, Sec. 1323, Dec. 23, 1985, 99 Stat.

1534, as amended by Pub. L. 99-425, title IV, Sec. 407(c), Sept.

30, 1986, 100 Stat. 971; Pub. L. 99-500, Sec. 101(a) (title VI,

Sec. 641), Oct. 18, 1986, 100 Stat. 1783, 1783-35, and Pub. L.

99-591, Sec. 101(a) (title VI, Sec. 641), Oct. 30, 1986, 100 Stat.

3341, 3341-35; Pub. L. 100-202, Sec. 101(k) (title VI, Sec. 636),

Dec. 22, 1987, 101 Stat. 1329-322, 1329-357, provided that:

''(a)(1) Prior to September 30, 1988, the Secretary of

Agriculture (hereafter in this section referred to as the

'Secretary') shall guarantee loans made by public agencies or

private organizations (including loans made by financial

institutions such as insurance companies) to nonprofit national

rural development and finance corporations that establish similar

and affiliated statewide rural development and finance programs for

the purpose of providing loans, guarantees, and other financial

assistance to profit or nonprofit local businesses to improve

business, industry, and employment opportunities in a rural area

(as determined by the Secretary).

''(2) To be eligible to obtain a loan guarantee under this

subsection, a corporation must -

''(A) demonstrate to the Secretary the ability of the

corporation to administer a national revolving rural development

loan program;

''(B) be prepared to commit financial resources under the

control of the corporation to the establishment of affiliated

statewide rural development and finance programs; and

''(C) have secured commitments of significant financial support

from public agencies and private organizations for such

affiliated statewide programs.

''(3) A national rural development and finance corporation

receiving a loan guarantee under this subsection shall base a

determination to establish an affiliated statewide program in large

part on the willingness of States and private organizations to

sponsor and make funds available to such program.

''(4) Notwithstanding any other provision of law, for the fiscal

year ending September 30, 1986, of the amounts available to

guarantee loans in accordance with section 310B of the Consolidated

Farm and Rural Development Act (7 U.S.C. 1932) from the Rural

Development Insurance Fund, $20,000,000 shall be used by the

Secretary to guarantee loans under the national rural development

and finance program established under this subsection, to remain

available until expended.

''(5) Notwithstanding any provision to the contrary of subsection

(4) above, the $20,000,000 which was available pursuant to

subsection (4) shall continue to be available and shall be used by

the Secretary prior to September 30, 1988, to guarantee loans for

the national rural development and finance program and shall remain

available until expended.

''(b)(1) Prior to September 30, 1988, the Secretary shall make

grants, from funds transferred under paragraph (2), to national

rural development and finance corporations for the purpose of

establishing a rural development program to provide financial and

technical assistance to compliment the loan guarantees made or to

be made to such corporations under subsection (a).

''(2) All funds in, appropriated to, or repaid to the Rural

Development Loan Fund, including those on deposit and available

upon date of enactment (Dec. 23, 1985), under sections 623 and 633

(42 U.S.C. 9812, 9822) of the Community Economic Development Act of

1981 (42 U.S.C. 9801 et seq.) shall be transferred to the Secretary

provided that -

''(A) all funds on deposit and available on date of enactment

shall be used for the purpose of making grants under paragraph

(1) and shall remain available until expended;

''(B) notwithstanding any other provision of law, all loans to

intermediary borrowers made prior to date of enactment, shall

upon date of enactment, for the life of such loan, bear a rate of

interest not to exceed that in effect upon the date of issuance

of such loans; and

''(C) notwithstanding paragraph (1), all funds other than funds

to which subparagraph (A) applies shall be used by the Secretary

to make loans -

''(i) to the entities;

''(ii) for the purposes; and

''(iii) subject to the terms and conditions;

specified in the first, second, and last sentences of section

623(a) of the Community Economic Development Act of 1981 (42

U.S.C. 9812(a)). For purposes of this subparagraph, any reference

in such sentences to the Secretary shall be deemed to be a

reference to the Secretary of Agriculture.''

Pub. L. 99-500, Sec. 101(a) (title VI, Sec. 641), Oct. 18, 1986,

100 Stat. 1783, 1783-35, and Pub. L. 99-591, Sec. 101(a) (title VI,

Sec. 641), Oct. 30, 1986, 100 Stat. 3341, 3341-35, provided in

part: ''That such grant funds (probably means grant funds under

section 1323(b)(1) of Pub. L. 99-198, set out above) may be used by

such corporation to provide technical assistance and financial

assistance, including capitalizing revolving loan programs,

pursuant to the Act.''

LIMITS ON GRANTS FOR FISCAL YEARS 1982, 1983, AND 1984

Pub. L. 97-35, title I, Sec. 120, Aug. 13, 1981, 95 Stat. 367,

provided in part that, notwithstanding any other provision of law,

there was authorized to be appropriated for grants pursuant to

section 310B(c) of the Consolidated Farm and Rural Development Act

(7 U.S.C. 1932) not to exceed: $5,007,000 for fiscal year 1982,

$5,280,000 for fiscal year 1983, and $5,553,000 for fiscal year

1984.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 917, 1927, 1929a, 1983,

1983a, 1992, 2009d, 6613, 6942, 6944 of this title.

-CITE-

7 USC Sec. 1933 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1933. Guaranteed rural housing loans; Hawaiian home lands

-STATUTE-

(a) Rural Housing Loans which (1) are guaranteed by the Secretary

under section 517(a)(2) (FOOTNOTE 1) of the Housing Act of 1949 (42

U.S.C. 1487(a)(2)), (2) are made by other lenders approved by the

Secretary to provide dwellings in rural areas for the applicants'

own use, and (3) bear interest and other charges at rates not above

the maximum rates prescribed by the Secretary of Housing and Urban

Development for loans made by private lenders for similar purposes

and guaranteed by the Secretary of Housing and Urban Development

under the National Housing Act (12 U.S.C. 1701 et seq.) or

superseding legislation shall not be subject to sections 501(c) and

502(b)(3) of the Housing Act of 1949 (42 U.S.C. 1471(c) and

1472(b)(3)).

(FOOTNOTE 1) See References in Text note below.

(b) For the purposes of title V of the Housing Act of 1949 (42

U.S.C. 1471 et seq.) or this chapter, a guarantee of payment given

under the color of law by the Department of Hawaiian Home Lands (or

its successor in function) shall be found by the Secretary

reasonably to assure repayment of any indebtedness so guaranteed.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310C, as added Pub. L. 92-419,

title I, Sec. 119, Aug. 30, 1972, 86 Stat. 664; amended Pub. L.

101-624, title XVIII, Sec. 1804, Nov. 28, 1990, 104 Stat. 3819.)

-REFTEXT-

REFERENCES IN TEXT

Section 517(a) of the Housing Act of 1949 (42 U.S.C. 1487(a)),

referred to in subsec. (a), was amended by Pub. L. 98-181, title V,

Sec. 514(a)(1), Nov. 30, 1983, 98 Stat. 1247, and, as so amended,

does not contain a par. (2).

The National Housing Act, referred to in subsec. (a), is act June

27, 1934, ch. 847, 48 Stat. 1246, as amended, which is classified

principally to chapter 13 (Sec. 1701 et seq.) of Title 12, Banks

and Banking. For complete classification of this Act to the Code,

see References in Text note set out under section 1701 of Title 12

and Tables.

Title V of the Housing Act of 1949, referred to in subsec. (b),

is title V of act July 15, 1949, ch. 338, 63 Stat. 432, as amended,

which is classified generally to subchapter III (Sec. 1471 et seq.)

of chapter 8A of Title 42, The Public Health and Welfare. For

complete classification of this Act to the Code, see References in

Text note set out under section 1441 of Title 42 and Tables.

For definition of ''this chapter'', referred to in subsec. (b),

see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1990 - Subsec. (b). Pub. L. 101-624 substituted ''or this

chapter'' for '', as amended''.

-CITE-

7 USC Sec. 1934 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1934. Low-income farm ownership loan program; eligibility;

repayment requirements

-STATUTE-

(a) The Secretary is authorized to make and insure loans for any

of the purposes referred to in section 1923(a) of this title, or

paragraphs (1) through (5) of section 1924(a) of this title, to

farmers and ranchers in the United States who (1) are citizens of

the United States, (2) meet the requirements of paragraphs (2)

through (4) of section 1922 of this title, (3) are unable to obtain

sufficient credit under section 1922 of this title to finance their

actual needs, (4) are owners or operators of small or family farms

(including new owners or operators), (5) are farmers or ranchers

with a low income, and (6) demonstrate a need to maximize their

income from farming or ranching operations. The Secretary is also

authorized to make such loans to any farm cooperative or private

domestic corporation or partnership that is controlled by farmers

and ranchers and engaged primarily and directly in farming or

ranching in the United States if all of its members, stockholders,

or partners, as applicable, are citizens of the United States and

the entity and all such members, stockholders, or partners meet the

requirements of paragraphs (2) through (6) of the preceding

sentence.

(b) Each loan made or insured under this section shall be

repayable in such installments as the Secretary determines will

provide for reduced payments during the initial repayment period of

the loan and larger payments during the remainder of the repayment

period of the loan.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310D, as added Pub. L. 95-334,

title I, Sec. 113, Aug. 4, 1978, 92 Stat. 424; amended Pub. L.

101-624, title XVIII, Sec. 1802(b), Nov. 28, 1990, 104 Stat. 3818;

Pub. L. 102-552, title V, Sec. 516(e)(1), Oct. 28, 1992, 106 Stat.

4137; Pub. L. 104-127, title VI, Sec. 661(e), Apr. 4, 1996, 110

Stat. 1107.)

-MISC1-

AMENDMENTS

1996 - Subsec. (a). Pub. L. 104-127 substituted ''section 1923(a)

of this title, or paragraphs (1) through (5) of section 1924(a) of

this title'' for ''paragraphs (1) through (5) of section 1923(a) of

this title, or subparagraphs (A) through (E) of section 1924(a)(1)

of this title''.

1992 - Subsec. (a). Pub. L. 102-552 substituted ''1924(a)(1)''

for ''1924(d)(1)''.

1990 - Subsec. (a). Pub. L. 101-624 substituted ''paragraphs (1)

through (5) of section 1923(a) of this title, or subparagraphs (A)

through (E) of section 1924(d)(1) of this title,'' for ''clauses

(1) through (5) of section 1923(a) of this title'', substituted

''paragraphs'' for ''clauses'' before ''(2) through (4) of

section'', made technical amendment to reference to section 1922 of

this title which required no change in text, and substituted

''paragraphs'' for ''clauses'' before ''(2) through (6) of the''.

EFFECTIVE DATE OF 1992 AMENDMENT

Section 516(e)(2) of Pub. L. 102-552 provided that: ''The

amendment made by paragraph (1) of this subsection (amending this

section) shall take effect at the same time as the amendments made

by section 501(a) of the Food, Agriculture, Conservation, and Trade

Act Amendments of 1991 (Public Law 102-237; 105 Stat. 1865)

(amending section 1924 of this title) took effect.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1925, 1927, 1942, 1983 of

this title.

-CITE-

7 USC Sec. 1935 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1935. Down payment loan program

-STATUTE-

(a) In general

(1) Establishment

Notwithstanding any other section of this subchapter, the

Secretary shall establish, within the farm ownership loan program

established under this subchapter, a program under which loans

shall be made under this section to qualified beginning farmers

and ranchers for down payments on farm ownership loans.

(2) Administration

The Secretary shall be the primary coordinator of credit

supervision for the down payment loan program established under

this section, in consultation with the commercial or cooperative

lender and, if applicable, the contracting credit counseling

service selected under section 2006b(c) of this title.

(b) Loan terms

(1) Principal

Each loan made under this section shall be in an amount equal

to 40 percent of the purchase price or appraisal value, whichever

is lower, of the farm or ranch to be acquired, unless the

borrower requests a lesser amount.

(2) Interest rate

The interest rate on any loan made by the Secretary under this

section shall be 4 percent.

(3) Duration

Each loan under this section shall be made for a period of 15

years or less, at the option of the borrower.

(4) Repayment

Each borrower of a loan under this section shall repay the loan

to the Secretary in equal annual installments.

(5) Nature of retained security interest

The Secretary shall retain an interest in each farm or ranch

acquired with a loan made under this section that shall -

(A) be secured by the farm or ranch;

(B) be junior only to such interests in the farm or ranch as

may be conveyed at the time of acquisition to the person

(including a lender) from whom the borrower obtained a loan

used to acquire the farm or ranch; and

(C) require the borrower to obtain the permission of the

Secretary before the borrower may grant an additional security

interest in the farm or ranch.

(c) Limitations

(1) Borrowers required to make minimum down payment

The Secretary shall not make a loan under this section to any

borrower with respect to a farm or ranch if the contribution of

the borrower to the down payment on the farm or ranch will be

less than 10 percent of the purchase price of the farm or ranch.

(2) Maximum price of property to be acquired

The Secretary shall not make a loan under this section with

respect to a farm or ranch for which the purchase price or

appraisal value, whichever is lower, exceeds $250,000.

(3) Prohibited types of financing

The Secretary shall not make a loan under this section with

respect to a farm or ranch if the farm or ranch is to be acquired

with other financing that contains any of the following

conditions:

(A) The financing is to be amortized over a period of less

than 30 years.

(B) A balloon payment will be due on the financing during the

15-year period beginning on the date the loan is to be made by

the Secretary.

(d) Administration

In carrying out this section, the Secretary shall, to the maximum

extent practicable -

(1) facilitate the transfer of farms and ranches from retiring

farmers and ranchers to persons eligible for insured loans under

this subchapter;

(2) make efforts to widely publicize the availability of loans

under this section among -

(A) potentially eligible recipients of the loans;

(B) retiring farmers and ranchers; and

(C) applicants for farm ownership loans under this

subchapter;

(3) encourage retiring farmers and ranchers to assist in the

sale of their farms and ranches to qualified beginning farmers

and ranchers by providing seller financing; and

(4) coordinate the loan program established by this section

with State programs that provide farm ownership or operating

loans for beginning farmers and ranchers.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310E, as added Pub. L. 102-554,

Sec. 7(a), Oct. 28, 1992, 106 Stat. 4144; amended Pub. L. 107-171,

title V, Sec. 5005, May 13, 2002, 116 Stat. 342.)

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(1). Pub. L. 107-171, Sec. 5005(1)(A),

substituted ''40 percent'' for ''30 percent''.

Subsec. (b)(3). Pub. L. 107-171, Sec. 5005(1)(B), substituted

''15 years'' for ''10 years''.

Subsec. (c)(3)(B). Pub. L. 107-171, Sec. 5005(2), substituted

''15-year'' for ''10-year''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1925, 1929, 1991, 1994 of

this title.

-CITE-

7 USC Sec. 1936 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1936. Beginning farmer and rancher contract land sales program

-STATUTE-

(a) In general

If the Secretary makes a determination that the risk is

comparable under subsection (b) of this section, the Secretary

shall carry out a pilot program in not fewer than 5 States, as

determined by the Secretary, to guarantee up to 5 loans per State

in each of fiscal years 2003 through 2007 made by a private seller

of a farm or ranch to a qualified beginning farmer or rancher on a

contract land sale basis, if the loan meets applicable underwriting

criteria and a commercial lending institution agrees to serve as

escrow agent.

(b) Date of commencement of program

Not later than October 1, 2002, the Secretary shall make a

determination on whether guarantees of contract land sales present

a risk that is comparable with the risk presented in the case of

guarantees to commercial lenders.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310F, as added Pub. L. 107-171,

title V, Sec. 5006, May 13, 2002, 116 Stat. 342.)

-MISC1-

PRIOR PROVISIONS

A prior section 1936, Pub. L. 87-128, title III, Sec. 310F, as

added Pub. L. 102-554, Sec. 7(b), Oct. 28, 1992, 106 Stat. 4146,

related to availability of farm ownership loans and loan guarantees

for certain qualified beginning farmers and ranchers, prior to

repeal by Pub. L. 104-127, title VI, Sec. 616(b), Apr. 4, 1996, 110

Stat. 1090.

-CITE-

7 USC Sec. 1936a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER I - REAL ESTATE LOANS

-HEAD-

Sec. 1936a. Use of rural development loans and grants for other

purposes

-STATUTE-

If, after making a loan or a grant described in section 2009d(d)

of this title, the Secretary determines that the circumstances

under which the loan or grant was made have sufficiently changed to

make the project or activity for which the loan or grant was made

available no longer appropriate, the Secretary may allow the loan

borrower or grant recipient to use property (real and personal)

purchased or improved with the loan or grant funds, or proceeds

from the sale of property (real and personal) purchased with such

funds, for another project or activity that (as determined by the

Secretary) -

(1) will be carried out in the same area as the original

project or activity;

(2) meets the criteria for a loan or a grant described in

section 2009d(d) of this title; and

(3) satisfies such additional requirements as are established

by the Secretary.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 310G, as added Pub. L. 107-171,

title VI, Sec. 6018, May 13, 2002, 116 Stat. 361.)

-CITE-

7 USC SUBCHAPTER II - OPERATING LOANS 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

.

-HEAD-

SUBCHAPTER II - OPERATING LOANS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 1925, 1961, 1963,

1964, 1981b, 1983, 1983a, 1989, 1991, 1994, 2000, 2003, 2006a,

2008h, 2008l of this title.

-CITE-

7 USC Sec. 1941 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1941. Persons eligible for loans

-STATUTE-

(a) Requirements

The Secretary is authorized to make and insure loans under this

subchapter to farmers and ranchers in the United States, and to

farm cooperatives and private domestic corporations, partnerships,

joint operations, trusts, and limited liability companies that are

controlled by farmers and ranchers and engaged primarily and

directly in farming or ranching in the United States, subject to

the conditions specified in this section. To be eligible for such

loans, applicants who are individuals, or, in the case of

cooperatives, corporations, partnerships, joint operations, trusts,

and limited liability companies, individuals holding a majority

interest in such entity, must (1) be citizens of the United States,

(2) for direct loans only, have either training or farming

experience that the Secretary determines is sufficient to assure

reasonable prospects of success in the proposed farming operations,

(3) be or will become operators of not larger than family farms (or

in the case of cooperatives, corporations, partnerships, joint

operations, trusts, and limited liability companies in which a

majority interest is held by individuals who are related by blood

or marriage, as defined by the Secretary, such individuals must be

or will become either owners or operators of not larger than a

family farm and at least one such individual must be or will become

an operator of not larger than a family farm or, in the case of

holders of the entire interest who are related by blood or marriage

and all of whom are or will become farm operators, the ownership

interest of each such holder separately constitutes not larger than

a family farm, even if their interests collectively constitute

larger than a family farm, as defined by the Secretary), and (4) be

unable to obtain sufficient credit elsewhere to finance their

actual needs at reasonable rates and terms, taking into

consideration prevailing private and cooperative rates and terms in

the community in or near which the applicant resides for loans for

similar purposes and periods of time. In addition to the foregoing

requirements of this subsection, in the case of corporations,

partnerships, joint operations, trusts, and limited liability

companies, the family farm requirement of clause (3) of the

preceding sentence shall apply as well to the farm or farms in

which the entity has an operator interest and the requirement of

clause (4) of the preceding sentence shall apply as well to the

entity in the case of cooperatives, corporations, partnerships,

joint operations, trusts, and limited liability companies.

(b) Rural youths in 4-H Clubs, Future Farmers of America, etc.

(1) Loans may also be made under this subchapter without regard

to the requirements of clauses (2) and (3) of subsection (a) of

this section to youths who are rural residents to enable them to

operate enterprises in connection with their participation in 4-H

Clubs, Future Farmers of America, and similar organizations.

(2) A person receiving a loan under this subsection who executes

a promissory note therefor shall thereby incur full personal

liability for the indebtedness evidenced by such note in accordance

with its terms free of any disability of minority.

(3) For loans under this subsection the Secretary may accept the

personal liability of a cosigner of the promissory note in addition

to the borrowers' personal liability.

(4) Youth enterprises not farming or ranching. - The operation of

an enterprise by a youth under this subsection shall not be

considered the operation of a farm or ranch under this chapter.

(c) Direct loans

(1) In general

Subject to paragraphs (3) and (4), the Secretary may make a

direct loan under this subchapter only to a farmer or rancher who

-

(A) is a qualified beginning farmer or rancher;

(B) has not received a previous direct operating loan made

under this subchapter; or

(C) has received a previous direct operating loan made under

this subchapter during 6 or fewer years.

(2) Youth loans

In this subsection, the term ''direct operating loan'' shall

not include a loan made to a youth under subsection (b) of this

section.

(3) Transition rule

If, as of April 4, 1996, a farmer or rancher has received a

direct operating loan under this subchapter during each of 4 or

more previous years, the borrower shall be eligible to receive a

direct operating loan under this subchapter during 3 additional

years after April 4, 1996.

(4) Waivers

(A) Farm and ranch operations on tribal lands

The Secretary shall waive the limitation under paragraph

(1)(C) or (3) for a direct loan made under this subchapter to a

farmer or rancher whose farm or ranch land is subject to the

jurisdiction of an Indian tribe and whose loan is secured by 1

or more security instruments that are subject to the

jurisdiction of an Indian tribe if the Secretary determines

that commercial credit is not generally available for such farm

or ranch operations.

(B) Other farm and ranch operations

On a case-by-case determination not subject to administrative

appeal, the Secretary may grant a borrower a waiver, 1 time

only for a period of 2 years, of the limitation under paragraph

(1)(C) or (3) for a direct operating loan if the borrower

demonstrates to the satisfaction of the Secretary that -

(i) the borrower has a viable farm or ranch operation;

(ii) the borrower applied for commercial credit from at

least 2 commercial lenders;

(iii) the borrower was unable to obtain a commercial loan

(including a loan guaranteed by the Secretary); and

(iv) the borrower successfully has completed, or will

complete within 1 year, borrower training under section 2006a

of this title (from which requirement the Secretary shall not

grant a waiver under section 2006a(f) of this title).

-SOURCE-

(Pub. L. 87-128, title III, Sec. 311, Aug. 8, 1961, 75 Stat. 310;

Pub. L. 92-419, title I, Sec. 120(a), Aug. 30, 1972, 86 Stat. 665;

Pub. L. 95-334, title I, Sec. 114, Aug. 4, 1978, 92 Stat. 425; Pub.

L. 97-98, title XVI, Sec. 1601(b), Dec. 22, 1981, 95 Stat. 1346;

Pub. L. 99-198, title XIII, Sec. 1301(a), 1302(b), 1303, Dec. 23,

1985, 99 Stat. 1518, 1519; Pub. L. 104-127, title VI, Sec. 611,

661(f), Apr. 4, 1996, 110 Stat. 1087, 1107; Pub. L. 105-277, div.

A, Sec. 101(a) (title VIII, Sec. 805(2)), Oct. 21, 1998, 112 Stat.

2681, 2681-39; Pub. L. 107-171, title V, Sec. 5101, 5302(a), May

13, 2002, 116 Stat. 343, 344.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec.

(b)(4), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171, Sec. 5302(a), substituted

''joint operations, trusts, and limited liability companies'' for

''and joint operations'' wherever appearing.

Subsec. (c)(1). Pub. L. 107-171, Sec. 5101(1)(A), substituted

''paragraphs (3) and (4)'' for ''paragraph (3)'' in introductory

provisions.

Subsec. (c)(1)(A). Pub. L. 107-171, Sec. 5101(1)(B), struck out

''who has not operated a farm or ranch, or who has operated a farm

or ranch for not more than 5 years'' before semicolon.

Subsec. (c)(4). Pub. L. 107-171, Sec. 5101(2), added par. (4).

1998 - Subsec. (a). Pub. L. 105-277 inserted ''for direct loans

only,'' before ''have either'' in cl. (2).

1996 - Subsec. (b)(1). Pub. L. 104-127, Sec. 661(f), struck out

''and for the purposes specified in section 1942 of this title''

before period at end.

Subsec. (b)(4). Pub. L. 104-127, Sec. 611(b), added par. (4).

Subsec. (c). Pub. L. 104-127, Sec. 611(a), added subsec. (c) and

struck out former subsec. (c) which read as follows: ''The

Secretary may not restrict eligibility for loans made or insured

under this subchapter for purposes set forth in section 1942 of

this title solely to borrowers of loans that are outstanding on

December 23, 1985.''

1985 - Subsec. (a). Pub. L. 99-198, Sec. 1301(a), substituted -

(1) '', partnerships, and joint operations'' for ''and

partnerships'' wherever appearing after ''corporations'';

(2) '', partnerships, and joint operations'' for '', and

partnerships'' wherever appearing after ''corporations''; and

(3) ''individuals'' for ''members, stockholders, or partners,

as applicable,'' wherever appearing.

Pub. L. 99-198, Sec. 1303, in cl. (3) parenthetical, inserted

provision treating blood or marriage related owner-operators of the

entire farm interest as separate interest holders of not larger

than family farms though collective ownership constitutes a larger

than a family farm.

Subsec. (c). Pub. L. 99-198, Sec. 1302(b), added subsec. (c).

1981 - Subsec. (a). Pub. L. 97-98 substituted ''corporations and

partnerships, the family farm'' for ''cooperatives, corporations,

and partnerships, the family farm'' and ''as well to the entity in

the case of cooperatives, corporations, and partnerships'' for ''as

well to the entity''.

1978 - Pub. L. 95-334 substituted provisions setting forth

eligibility criteria for loans to farmers and ranchers in the

United States, and to farm cooperatives and private domestic

corporations and partnerships controlled by farmers and ranchers

and engaged primarily and directly in farming or ranching in the

United States, for provisions setting forth eligibility criteria

for loans to farmers and ranchers in the United States, Puerto

Rico, and the Virgin Islands.

1972 - Pub. L. 92-419 designated existing provisions as subsec.

(a) and added subsec. (b).

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 611 of Pub. L. 104-127 effective 90 days

after Apr. 4, 1996, and amendment by section 661(f) of Pub. L.

104-127 effective Apr. 4, 1996, see section 663(a), (b) of Pub. L.

104-127, set out as a note under section 1922 of this title.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section

1801 of Pub. L. 97-98, set out as an Effective Date note under

section 4301 of this title.

FARM OPERATING LOAN ELIGIBILITY

Pub. L. 106-224, title II, Sec. 255, June 20, 2000, 114 Stat.

424, provided that: ''During the period beginning on the date of

the enactment of this Act (June 20, 2000) and ending on December

31, 2002 -

''(1) sections 311(c) and 319 of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1941(c), 1949) shall have no

force or effect; and

''(2) in making direct loans under subtitle B of that Act (7

U.S.C. 1941 et seq.), the Secretary shall give priority to a

qualified beginning farmer or rancher who has not operated a farm

or ranch, or who has operated a farm or ranch for not more than 5

years.''

AUTHORITY OF SECRETARY TO MAKE OR GUARANTEE CERTAIN LOANS

Pub. L. 104-134, title II, Sec. 2002, Apr. 26, 1996, 110 Stat.

1321-313, provided that: ''Notwithstanding any other provision of

law, the Secretary of Agriculture is hereby authorized to make or

guarantee an operating loan under Subtitle B (7 U.S.C. 1941 et

seq.) or an emergency loan under Subtitle C (7 U.S.C. 1961 et seq.)

of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922

et. seq.), as in effect prior to April 4, 1996, to a loan applicant

who was less than 90 days delinquent on April 4, 1996, if the loan

applicant had submitted an application for the loan prior to April

5, 1996.''

1989 FARM OPERATING LOANS

Pub. L. 101-82, title III, Sec. 302, Aug. 14, 1989, 103 Stat.

582, provided that:

''(a) Direct Credit. - To the maximum extent practicable, the

Secretary of Agriculture shall ensure that direct operating loans

made or insured under subtitle B of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1941 et seq.) for 1990 crop production

are made available to farmers and ranchers suffering major losses

due to excess moisture, freeze, storm, or related condition

occurring in 1989 or drought or related condition occurring in 1988

or 1989, as authorized under existing law and under regulations of

the Secretary that implement the objective of enabling farmers and

ranchers to stay in business.

''(b) Loan Guarantees. -

''(1) In general. - Notwithstanding any other provision of law,

the Secretary shall make available in fiscal year 1990 guarantees

to commercial or cooperative lenders for loans under subtitle B

of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941

et seq.), to refinance and reamortize 1989 operating loans, or

1989 or 1990 installments due and payable on real estate debt,

farm equipment or building (including storage facilities) debt,

livestock loans, or other operating debt, of farmers and ranchers

that otherwise cannot be repaid due to major losses incurred by

such farmers or ranchers as a result of excess moisture, freeze,

storm, or related condition occurring in 1989 or drought or

related condition occurring in 1988 or 1989.

''(2) Reamortization. - Each fiscal year 1990 guaranteed loan

for 1988 or 1989 natural disaster purposes, as described in

paragraph (1), shall contain terms and conditions governing the

reamortization of the debt of the farmer or rancher that will

provide the farmer or rancher a reasonable opportunity to

continue to receive new operating credit while repaying the

guaranteed loan, as determined by the Secretary.

''(3) Eligibility. - Notwithstanding any other provision of

law, any person eligible to receive payments under subtitle A of

title I (7 U.S.C. 1421 note) shall be deemed eligible to have

guaranteed, in accordance with this subsection, loans made to

such person by a commercial or cooperative lender to refinance

installment payments that are or become due and payable during

1989 or 1990, as described in paragraph (1), except that, to be

deemed eligible to have such loan guaranteed, the person must

otherwise -

''(A) be current in the person's obligation to the commercial

or cooperative lender that agrees to accept the guarantee in

consideration of allowing the person to make the 1989 or 1990

payment or installment over a period of time not to exceed 6

years from the original due date of such payment or

installment; and

''(B) meet the criteria for guaranteed loan borrowers under

subtitle B of the Consolidated Farm and Rural Development Act

established by the Secretary.

''(c) Use of Agricultural Credit Insurance Fund. - For purposes

of providing guaranteed loans in accordance with subsection (b), in

addition to funds otherwise available, the Secretary may use any

funds available from the Agricultural Credit Insurance Fund during

fiscal years (sic) 1989 or 1990 for emergency insured and

guaranteed loans under subtitle C of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1961 et seq.) to meet the needs

resulting from natural disasters, except that funds available from

such Fund first shall be used to satisfy the level of assistance

estimated by the Secretary to meet the needs of persons eligible

for emergency disaster loans.''

Similar provisions were contained in the following prior act:

Pub. L. 100-387, title III, Sec. 312, Aug. 11, 1988, 102 Stat.

948.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1922, 1994, 2006a of this

title.

-CITE-

7 USC Sec. 1942 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1942. Purposes of loans

-STATUTE-

(a) In general

A direct loan may be made under this subchapter only for -

(1) paying the costs incident to reorganizing a farm or ranch

for more profitable operation;

(2) purchasing livestock, poultry, or farm or ranch equipment;

(3) purchasing feed, seed, fertilizer, insecticide, or farm or

ranch supplies, or to meet other essential farm or ranch

operating expenses, including cash rent;

(4) financing land or water development, use, or conservation;

(5) paying loan closing costs;

(6) assisting a farmer or rancher in changing the equipment,

facilities, or methods of operation of a farm or ranch to comply

with a standard promulgated under section 655 of title 29 or a

standard adopted by a State under a plan approved under section

667 of title 29, if the Secretary determines that without

assistance under this paragraph the farmer or rancher is likely

to suffer substantial economic injury in complying with the

standard;

(7) training a limited-resource borrower receiving a loan under

section 1934 of this title in maintaining records of farming and

ranching operations;

(8) training a borrower under section 2006a of this title;

(9) refinancing the indebtedness of a borrower, if the borrower

-

(A) has refinanced a loan under this subchapter not more than

4 times previously; and

(B)(i) is a direct loan borrower under this chapter at the

time of the refinancing and has suffered a qualifying loss

because of a natural disaster declared by the Secretary under

this chapter or a major disaster or emergency designated by the

President under the Robert T. Stafford Disaster Relief and

Emergency Assistance Act (42 U.S.C. 5121 et seq.); or

(ii) is refinancing a debt obtained from a creditor other

than the Secretary; or

(10) providing other farm, ranch, or home needs, including

family subsistence.

(b) Guaranteed loans

A loan may be guaranteed under this subchapter only for -

(1) paying the costs incident to reorganizing a farm or ranch

for more profitable operation;

(2) purchasing livestock, poultry, or farm or ranch equipment;

(3) purchasing feed, seed, fertilizer, insecticide, or farm or

ranch supplies, or to meet other essential farm or ranch

operating expenses, including cash rent;

(4) financing land or water development, use, or conservation;

(5) refinancing indebtedness;

(6) paying loan closing costs;

(7) assisting a farmer or rancher in changing the equipment,

facilities, or methods of operation of a farm or ranch to comply

with a standard promulgated under section 655 of title 29 or a

standard adopted by a State under a plan approved under section

667 of title 29, if the Secretary determines that without

assistance under this paragraph the farmer or rancher is likely

to suffer substantial economic injury due to compliance with the

standard;

(8) training a borrower under section 2006a of this title; or

(9) providing other farm, ranch, or home needs, including

family subsistence.

(c) Hazard insurance requirement

(1) In general

After the Secretary makes the determination required by

paragraph (2), the Secretary may not make a loan to a farmer or

rancher under this subchapter unless the farmer or rancher has,

or agrees to obtain, hazard insurance on the property to be

acquired with the loan.

(2) Determination

Not later than 180 days after April 4, 1996, the Secretary

shall determine the appropriate level of insurance to be required

by paragraph (1).

(d) Private reserve

(1) In general

Notwithstanding any other provision of this chapter, the

Secretary may reserve a portion of any loan made under this

subchapter to be placed in an unsupervised bank account that may

be used at the discretion of the borrower for the basic family

needs of the borrower and the immediate family of the borrower.

(2) Limit on size of the reserve

The size of the reserve shall not exceed the least of -

(A) 10 percent of the loan;

(B) $5,000; or

(C) the amount needed to provide for the basic family needs

of the borrower and the borrower's immediate family for 3

calendar months.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 312, Aug. 8, 1961, 75 Stat. 310;

Pub. L. 87-703, title IV, Sec. 401(4), Sept. 27, 1962, 76 Stat.

632; Pub. L. 90-488, Sec. 8, Aug. 15, 1968, 82 Stat. 771; Pub. L.

92-419, title I, Sec. 120(b), 121, Aug. 30, 1972, 86 Stat. 665;

Pub. L. 95-113, title XIV, Sec. 1448(b), Sept. 29, 1977, 91 Stat.

1012; Pub. L. 95-334, title I, Sec. 115, Aug. 4, 1978, 92 Stat.

425; Pub. L. 96-438, Sec. 1(3), Oct. 13, 1980, 94 Stat. 1871; Pub.

L. 99-198, title XIII, Sec. 1306, 1307, Dec. 23, 1985, 99 Stat.

1521; Pub. L. 101-624, title XVIII, Sec. 1818(b), Nov. 28, 1990,

104 Stat. 3830; Pub. L. 102-237, title V, Sec. 501(b), Dec. 13,

1991, 105 Stat. 1866; Pub. L. 102-552, title V, Sec. 516(f)(1)(A),

(2), Oct. 28, 1992, 106 Stat. 4137, 4138; Pub. L. 104-127, title

VI, Sec. 612(a), Apr. 4, 1996, 110 Stat. 1087.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs.

(a)(9)(B)(i) and (d)(1), see note set out under section 1921 of

this title.

The Robert T. Stafford Disaster Relief and Emergency Assistance

Act, referred to in subsec. (a)(9)(B)(i), is Pub. L. 93-288, May

22, 1974, 88 Stat. 143, as amended, which is classified principally

to chapter 68 (Sec. 5121 et seq.) of Title 42, The Public Health

and Welfare. For complete classification of this Act to the Code,

see Short Title note set out under section 5121 of Title 42 and

Tables.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127 amended section generally, substituting

present provisions for provisions outlining purposes of loans made

under this subchapter, authorizing loans to rural area residents to

operate small business enterprises, authorizing loans for pollution

abatement and control projects in rural areas and providing for

limitations on such loans, and authorizing creation, from loan

funds, of nonsupervised bank accounts to be used at discretion of

borrower for necessary family living expenses.

1992 - Subsec. (a). Pub. L. 102-552, Sec. 516(f)(2), repealed

amendment by Pub. L. 102-237, Sec. 501(b). See 1991 Amendment note

below.

Pub. L. 102-552, Sec. 516(f)(1)(A), made technical correction to

directory language of Pub. L. 101-624, Sec. 1818(b). See 1990

Amendment note below.

1991 - Subsec. (a). Pub. L. 102-237, Sec. 501(b), which directed

the substitution of ''systems (for purposes of this subchapter, the

term 'solar energy' means energy derived from sources (other than

fossil fuels) and technologies included in the Federal Nonnuclear

Energy Research and Development Act of 1974) (42 U.S.C. 5901 et

seq.), (12) training in maintaining records of farming and ranching

operations for limited resource borrowers receiving loans under

section 1934 of this title, and (13) borrower training under

section 2006a of this title.'' for '' 'systems.' and all that

follows'', could not be executed because ''systems.'' does not

appear in subsec. (a) was repealed by Pub. L. 102-552, Sec.

516(f)(2). See Construction of 1991 Amendment note below.

1990 - Subsec. (a). Pub. L. 101-624, Sec. 1818(b), as amended by

Pub. L. 102-552, Sec. 516(f)(1)(A), added cl. (13).

1985 - Subsec. (a). Pub. L. 99-198, Sec. 1306, added cl. (12).

Subsec. (e). Pub. L. 99-198, Sec. 1307, added subsec. (e).

1980 - Subsec. (a). Pub. L. 96-438 added cl. (11).

1978 - Subsec. (a). Pub. L. 95-334, struck out ''individual''

after ''title, to''.

1977 - Subsec. (a). Pub. L. 95-113 inserted parenthetical

provision extending the section to include farm equipment which

utilizes solar energy and inserted definition of ''solar energy''.

1972 - Subsec. (a). Pub. L. 92-419, Sec. 120(b), 121(1), (2),

substituted ''section 1941(a) for ''section 1941'', designated

existing provisions as subsec. (a), and added cl. (10).

Subsecs. (b) to (d). Pub. L. 92-419, Sec. 121(3), added subsecs.

(b) to (d).

1968 - Pub. L. 90-488 struck out from cl. (4) the concluding

phrase, ''including recreational uses and facilities'', added cls.

(5) and (6), and redesignated former cls. (5) to (7) as (7) to (9),

respectively.

1962 - Pub. L. 87-703 authorized, in cl. (4), loans to be made

for recreational uses and facilities.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 612(b) of Pub. L. 104-127 provided that: ''Section

312(c)(1) of the Consolidated Farm and Rural Development Act (7

U.S.C. 1942(c)(1)) shall not apply until the Secretary of

Agriculture makes the determination required by section 312(c)(2)

of the Act.'' (The Secretary's determination relating to hazard

insurance under this provision was contained in interim rules

published Mar. 3, 1997, and effective Mar. 24, 1997, see 62 F.R.

9351.)

Amendment by Pub. L. 104-127 effective 90 days after Apr. 4,

1996, see section 663(b) of Pub. L. 104-127, set out as a note

under section 1922 of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Section (f)(1)(B) of Pub. L. 102-552 provided that: ''The

amendment made by subparagraph (A) (amending this section) shall

take effect as if included in the Food, Agriculture, Conservation,

and Trade Act of 1990 (Pub. L. 101-624) at the time such Act became

law.''

EFFECTIVE DATE OF 1977 AMENDMENT

Amendment by Pub. L. 95-113 effective Oct. 1, 1977, see section

1901 of Pub. L. 95-113, set out as a note under section 1307 of

this title.

-TRANS-

TRANSFER OF FUNCTIONS

Powers, duties, and assets of agencies, offices, and other

entities within Department of Agriculture relating to rural

development functions transferred to Rural Development

Administration by section 2302(b) of Pub. L. 101-624.

-MISC5-

CONSTRUCTION OF 1991 AMENDMENT

Section 516(f)(2) of Pub. L. 102-552 provided that: ''Subsection

(b) of section 501 of the Food, Agriculture, Conservation, and

Trade Act Amendments of 1991 (Public Law 102-237; 105 Stat. 1866)

(amending this section) is repealed. The Consolidated Farm and

Rural Development Act (7 U.S.C. 1921 et seq.) shall be applied and

administered as if such subsection had never become law.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1991, 1992, 2008f of this

title.

-CITE-

7 USC Sec. 1943 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1943. Limitations on amount of operating loans

-STATUTE-

(a) In general

The Secretary shall make or insure no loan under this subchapter

-

(1) that would cause the total principal indebtedness

outstanding at any one time for loans made under this subchapter

to any one borrower to exceed, in the case of a loan other than a

loan guaranteed by the Secretary, $200,000, or, in the case of a

loan guaranteed by the Secretary, $700,000 (increased, beginning

with fiscal year 2000, by the inflation percentage applicable to

the fiscal year in which the loan is guaranteed and reduced by

the unpaid indebtedness of the borrower on loans under the

sections specified in section 1925 of this title that are

guaranteed by the Secretary); or

(2) for the purchasing or leasing of land other than for cash

rent, or for carrying on any land leasing or land purchasing

program.

(b) Inflation percentage

For purposes of this section, the inflation percentage applicable

to a fiscal year is the percentage (if any) by which -

(1) the average of the Prices Paid By Farmers Index (as

compiled by the National Agricultural Statistics Service of the

Department of Agriculture) for the 12-month period ending on

August 31 of the immediately preceding fiscal year; exceeds

(2) the average of such index (as so defined) for the 12-month

period ending on August 31, 1996.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 313, Aug. 8, 1961, 75 Stat. 310;

Pub. L. 90-488, Sec. 9, Aug. 15, 1968, 82 Stat. 771; Pub. L.

92-419, title I, Sec. 122, Aug. 30, 1972, 86 Stat. 665; Pub. L.

95-334, title I, Sec. 116, Aug. 4, 1978, 92 Stat. 426; Pub. L.

98-258, title VI, Sec. 604(a), Apr. 10, 1984, 98 Stat. 139; Pub. L.

105-277, div. A, Sec. 101(a) (title VIII, Sec. 806(b)), Oct. 21,

1998, 112 Stat. 2681, 2681-39.)

-MISC1-

AMENDMENTS

1998 - Pub. L. 105-277 inserted section catchline, designated

existing provisions as subsec. (a), inserted heading, substituted

''this subchapter - '' for ''this subchapter'', in introductory

provisions, realigned margin of par. (1) and substituted ''$700,000

(increased, beginning with fiscal year 2000, by the inflation

percentage applicable to the fiscal year in which the loan is

guaranteed and reduced by the unpaid indebtedness of the borrower

on loans under the sections specified in section 1925 of this title

that are guaranteed by the Secretary); or'' for ''$400,000; or'',

realigned margin of par. (2), and added subsec. (b).

1984 - Pub. L. 98-258 substituted ''$200,000'' and ''$400,000''

for ''$100,000'' and ''$200,000'', respectively.

1978 - Pub. L. 95-334 substituted provisions setting forth

criteria for Secretary to make or insure loans under this

subchapter for provisions setting forth criteria for Secretary to

make loans under this subchapter.

1972 - Pub. L. 92-419 substituted ''$50,000'' for ''$35,000''.

1968 - Pub. L. 90-488 struck out from item (1) the proviso which

limited the amount to be used for loans which would cause the

indebtedness of any borrower to exceed $15,000 to 25 per centum of

the sums made available for loans.

-CITE-

7 USC Sec. 1944 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1944. Soil conservation district loans; limitation; purchase

of conservation equipment

-STATUTE-

Loans aggregating not more than $500,000 in any one year may also

be made to soil conservation districts which cannot obtain

necessary credit elsewhere upon reasonable terms and conditions for

the purchase of equipment customarily used for soil conservation

purposes.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 314, Aug. 8, 1961, 75 Stat. 311.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1983 of this title.

-CITE-

7 USC Sec. 1945 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1945. Repealed. Pub. L. 104-127, title VI, Sec. 613, Apr. 4,

1996, 110 Stat. 1089

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 315, Aug. 8, 1961, 75

Stat. 311, authorized Secretary to participate in certain loans

made under this subchapter.

-CITE-

7 USC Sec. 1946 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1946. Liability of borrower

-STATUTE-

(a) Determination of interest rates

(1) The Secretary shall make all loans under this subchapter upon

the full personal liability of the borrower and upon such security

as the Secretary may prescribe. The interest rates on such loans,

except for guaranteed loans and loans provided in paragraphs (2)

and (3), (FOOTNOTE 1) shall be as determined by the Secretary, but

not in excess of the current average market yield on outstanding

marketable obligations of the United States with remaining periods

to maturity comparable to the average maturities of such loans,

plus an additional charge not to exceed 1 per centum as determined

by the Secretary, which charge shall be deposited in the Rural

Development Insurance Fund or the Agricultural Credit Insurance

Fund, as appropriate, and adjusted to the nearest one-eighth of 1

per centum. The interest rate on any guaranteed loan made under

this subchapter shall be such rate as may be agreed upon by the

borrower and lender, but not in excess of a rate as may be

determined by the Secretary.

(FOOTNOTE 1) See References in Text note below.

(2) The interest rate on any loan (other than a guaranteed loan)

to a low income, limited resource borrower under this subchapter

shall not be -

(A) greater than the sum of -

(i) an amount that does not exceed one-half of the current

average market yield on outstanding marketable obligations of

the United States with maturities of 5 years; and

(ii) an amount not exceeding 1 percent per year, as the

Secretary determines is appropriate; or

(B) less than 5 percent per year.

(b) Payment period; consolidation and rescheduling of loans

Loans made under this subchapter shall be payable in not to

exceed seven years. The Secretary may consolidate or reschedule

outstanding loans for payment over a period not to exceed seven

years (or, in the case of loans for farm operating purposes,

fifteen years) from the date of such consolidation or rescheduling,

and the amount of unpaid principal and interest of the prior loans

so consolidated or rescheduled shall not create a new charge

against any loan levels authorized by law. A new loan may be

included in a consolidation. Such new loan shall be charged

against any loan level authorized by law. Except as otherwise

provided for farm loans under section 1981b of this title, the

interest rate on such consolidated or rescheduled loans, other than

guaranteed loans, may be changed by the Secretary to a rate not to

exceed the rate being charged for loans made under this subchapter

at the time of the consolidation or rescheduling. The interest

rate on any guaranteed loan under this subchapter that may be

consolidated or rescheduled for payment shall be such rate as may

be agreed upon by the borrower and the lender, but not in excess of

a rate as may be determined by the Secretary.

(c) Line-of-credit loans

(1) In general

A loan made or guaranteed by the Secretary under this

subchapter may be in the form of a line-of-credit loan.

(2) Term

A line-of-credit loan under paragraph (1) shall terminate not

later than 5 years after the date that the loan is made or

guaranteed.

(3) Eligibility

For purposes of determining eligibility for a farm operating

loan under this subchapter, each year during which a farmer or

rancher takes an advance or draws on a line-of-credit loan the

farmer or rancher shall be considered to have received an

operating loan for 1 year.

(4) Termination of delinquent loans

If a borrower does not pay an installment on a line-of-credit

loan on schedule, the borrower may not take an advance or draw on

the line-of-credit, unless the Secretary determines that -

(A) the borrower's failure to pay on schedule was due to

unusual conditions that the borrower could not control; and

(B) the borrower will reduce the line-of-credit balance to

the scheduled level at the end of -

(i) the production cycle; or

(ii) the marketing of the borrower's agricultural products.

(5) Agricultural commodities

A line-of-credit loan may be used to finance the production or

marketing of an agricultural commodity that -

(A) is eligible for a price support program of the Department

of Agriculture; or

(B) was eligible for a price support program of the

Department of Agriculture on the day before April 4, 1996.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 316, Aug. 8, 1961, 75 Stat. 311;

Pub. L. 90-488, Sec. 10, Aug. 15, 1968, 82 Stat. 771; Pub. L.

95-334, title I, Sec. 117, Aug. 4, 1978, 92 Stat. 426; Pub. L.

97-35, title I, Sec. 160(b), Aug. 13, 1981, 95 Stat. 377; Pub. L.

98-258, title VI, Sec. 604(b), Apr. 10, 1984, 98 Stat. 139; Pub. L.

101-624, title XVIII, Sec. 1803(b), Nov. 28, 1990, 104 Stat. 3818;

Pub. L. 104-127, title VI, Sec. 614, 661(g), Apr. 4, 1996, 110

Stat. 1089, 1107.)

-REFTEXT-

REFERENCES IN TEXT

Paragraph (3), referred to in subsec. (a)(1), was repealed by

Pub. L. 104-127, title VI, Sec. 661(g), Apr. 4, 1996, 110 Stat.

1107.

-MISC2-

AMENDMENTS

1996 - Subsec. (a)(3). Pub. L. 104-127, Sec. 661(g), struck out

par. (3) which read as follows: ''The interest rate on any loan

(other than a guaranteed loan) made or insured under clause (5) of

section 1942(a) of this title for activities that involve the use

of prime farmland as defined in section 1927(a)(6)(C) of this title

shall be the interest rate otherwise applicable under this section

increased by 2 per centum per annum.''

Subsec. (c). Pub. L. 104-127, Sec. 614, added subsec. (c).

1990 - Subsec. (a)(2). Pub. L. 101-624 amended par. (2)

generally. Prior to amendment, par. (2) read as follows: ''The

interest rate on any loan (other than a guaranteed loan) to a

low-income, limited resource borrower under this subchapter shall

be the interest rate otherwise applicable under this section

reduced by 3 per centum per annum.''

1984 - Subsec. (b). Pub. L. 98-258 inserted ''(or, in the case of

loans for farm operating purposes, fifteen years)'' and substituted

''Except as otherwise provided for farm loans under section 1981b

of this title, the interest rate'' for ''The interest rate''.

1981 - Subsec. (a). Pub. L. 97-35 redesignated existing

provisions as par. (1), inserted reference to loans guaranteed

under pars. (2) and (3), and added pars. (2) and (3).

1978 - Pub. L. 95-334 designated existing provisions as subsec.

(a), inserted provisions relating to depositing of charges and

provisions relating to interest rates on guaranteed loans, struck

out provisions relating to payment and renewal of loans, and added

subsec. (b).

1968 - Pub. L. 90-488 substituted provisions for determination of

interest rate by taking into consideration current average market

yield on outstanding marketable obligations of the United States

with remaining periods to maturity comparable to the average

maturities of the loans, adjusted to the nearest one-eighth of 1

per centum, plus not to exceed 1 per centum per annum as determined

by the Secretary, for former prohibition of an interest rate

exceeding 5 per centum per annum.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-35 applicable to loans made after Sept.

30, 1981, see section 160(c) of Pub. L. 97-35, set out as a note

under section 1927 of this title.

-CITE-

7 USC Sec. 1947, 1948 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1947, 1948. Repealed. Pub. L. 104-127, title VI, Sec. 615,

616(a), Apr. 4, 1996, 110 Stat. 1090

-MISC1-

Section 1947, Pub. L. 87-128, title III, Sec. 317, as added Pub.

L. 92-419, title I, Sec. 123, Aug. 30, 1972, 86 Stat. 665, related

to insured operating loans.

Section 1948, Pub. L. 87-128, title III, Sec. 318, as added Pub.

L. 102-554, Sec. 8, Oct. 28, 1992, 106 Stat. 4146, related to

special assistance to certain qualified beginning farmers and

ranchers.

-CITE-

7 USC Sec. 1949 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER II - OPERATING LOANS

-HEAD-

Sec. 1949. Graduation of borrowers with operating loans or

guarantees to private commercial credit

-STATUTE-

(a) Graduation plan

The Secretary shall establish a plan, in coordination with

activities under sections 2006a, 2006b, 2006c, and 2006d of this

title, to encourage each borrower with an outstanding loan under

this subchapter or with respect to whom there is an outstanding

guarantee under this subchapter to graduate to private commercial

or other sources of credit.

(b) Limitation on period borrowers are eligible for guaranteed

assistance

(1) General rule

Subject to paragraph (2), the Secretary shall not guarantee a

loan under this subchapter for a borrower for any year after the

15th year that a loan is made to, or a guarantee is provided with

respect to, the borrower under this subchapter.

(2) Transition rule

If, as of October 28, 1992, a farmer or rancher has received a

direct or guaranteed operating loan under this subchapter during

each of 10 or more previous years, the borrower shall be eligible

to receive a guaranteed operating loan under this subchapter

during 5 additional years after October 28, 1992.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 319, as added Pub. L. 102-554,

Sec. 9, Oct. 28, 1992, 106 Stat. 4150; amended Pub. L. 104-127,

title VI, Sec. 617, Apr. 4, 1996, 110 Stat. 1090.)

-MISC1-

AMENDMENTS

1996 - Subsec. (b). Pub. L. 104-127 added subsec. (b) and struck

out former subsec. (b) which provided for limitation on period for

which borrowers were eligible for assistance under this subchapter

and contained transition rule.

SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BORROWERS ARE ELIGIBLE

FOR GUARANTEED ASSISTANCE

Pub. L. 107-171, title V, Sec. 5102, May 13, 2002, 116 Stat. 343,

provided that: ''During the period beginning January 1, 2002, and

ending December 31, 2006, section 319(b) of the Consolidated Farm

and Rural Development Act (7 U.S.C. 1949(b)) shall have no force or

effect.''

-CITE-

7 USC SUBCHAPTER III - EMERGENCY LOANS 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

.

-HEAD-

SUBCHAPTER III - EMERGENCY LOANS

-MISC1-

EMERGENCY AGRICULTURAL CREDIT

Pub. L. 95-334, title II, Sec. 201-211, Aug. 4, 1978, 92 Stat.

429-433, as amended by Pub. L. 96-220, Sec. 1, Mar. 30, 1980, 94

Stat. 129; Pub. L. 97-98, title XVI, Sec. 1605, Dec. 22, 1981, 95

Stat. 1346; Pub. L. 98-258, title VI, Sec. 603, Apr. 10, 1984, 98

Stat. 139; Pub. L. 99-198, title XIII, Sec. 1310(b), Dec. 23, 1985,

99 Stat. 1523, which authorized the Secretary of Agriculture to

insure or guarantee loans to (1) bona fide farmers and ranchers who

were primarily and directly engaged in agricultural production and

who were citizens of the United States and (2) farm cooperatives

and private domestic corporations and partnerships that were

primarily and directly engaged in agricultural production and in

which a majority interest was held by members, stockholders, or

partners, as applicable, who themselves were citizens of the United

States and were primarily and directly engaged in agricultural

production, if the applicant for such loan: (A) had the experience

or training and resources necessary to assure a reasonable prospect

for successful operation with the assistance of such loan; (B)

needed such credit in order to maintain a viable agricultural

production operation; and (C) was not able to obtain sufficient

credit elsewhere due to economic stresses, such as a general

tightening of agricultural credit or an unfavorable relationship

between production costs and prices received for agricultural

commodities; and which provided requirements as to purposes of

loans, loan limits, interest rates, repayment period, loan

certifications and conditions, loan security, funding, maximum

amount of outstanding loans, full faith and credit of the United

States, issuance of certificates of beneficial ownership,

assignment of contracts of guarantee, geographical availability,

the conduct of a study and report on the program, and termination

of authority to make new contracts of insurance or guarantee on

Sept. 30, 1982, except with respect to the economic emergency loan

program operated from Dec. 22, 1983, to Sept. 30, 1984, was

repealed by Pub. L. 101-624, title XVIII, Sec. 1851, Nov. 28, 1990,

104 Stat. 3837.

EMERGENCY LIVESTOCK CREDIT

Pub. L. 93-357, July 25, 1974, 88 Stat. 391, as amended by Pub.

L. 94-35, Sec. 1, June 16, 1975, 89 Stat. 213; Pub. L. 94-517, Oct.

15, 1976, 90 Stat. 2446; Pub. L. 95-334, title III, Sec. 301, Aug.

4, 1978, 92 Stat. 433; Pub. L. 96-470, title I, Sec. 102(d), Oct.

19, 1980, 94 Stat. 2237, authorized the Secretary of Agriculture to

provide financial assistance to bona fide farmers and ranchers,

including bona fide farmers or ranchers owning livestock that were

fed in custom feedyards, who were primarily and directly engaged in

agricultural production and who had substantial operations in

breeding, raising, fattening, or marketing livestock, and to

corporations or partnerships when a majority interest in such

corporations or partnerships was held by stockholders or partners

who themselves were primarily and directly engaged in such

agricultural production and required the Secretary to guarantee

loans, including both principal and interest, made by any legally

organized lending agency. The provisions also provided

requirements as to loan limits, fees or charges, interest rates,

repayment period, loan certifications and conditions, loan

security, maximum amount of outstanding loans, exclusion from

budget totals, full faith and credit of the United States, issuance

of certificates of beneficial ownership, assignment of contracts of

guarantee, rules and regulations, and termination of authority to

make new guarantees on Sept. 30, 1979.

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 1508, 1981b, 1981e,

1983a, 1994, 2008l, 7333 of this title.

-CITE-

7 USC Sec. 1961 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1961. Eligibility for loans

-STATUTE-

(a) Persons eligible

The Secretary shall make and insure loans under this subchapter

only to the extent and in such amounts as provided in advance in

appropriation Acts to (1) established farmers, ranchers, or persons

engaged in aquaculture, who are citizens of the United States and

who are owner-operators (in the case of loans for a purpose under

subchapter I of this chapter) or operators (in the case of loans

for a purpose under subchapter II of this chapter) of not larger

than family farms, and (2) farm cooperatives, private domestic

corporations, partnerships, joint operations, trusts, or limited

liability companies (A) that are engaged primarily in farming,

ranching, or aquaculture, and (B) in which a majority interest is

held by individuals who are citizens of the United States and who

are owner-operators (in the case of loans for a purpose under

subchapter I of this chapter) or operators (in the case of loans

for a purpose under subchapter II of this chapter) of not larger

than family farms (or in the case of such cooperatives,

corporations, partnerships, joint operations, trusts, or limited

liability companies in which a majority interest is held by

individuals who are related by blood or marriage, as defined by the

Secretary, such individuals must be either owners or operators of

not larger than a family farm and at least one such individual must

be an operator of not larger than a family farm), where the

Secretary finds that the applicants' farming, ranching, or

aquaculture operations have been substantially affected by a

quarantine imposed by the Secretary under the Plant Protection Act

(7 U.S.C. 7701) or the animal quarantine laws (as defined in

section 136a of title 21), a natural disaster in the United States,

or a major disaster or emergency designated by the President under

the Robert T. Stafford Disaster Relief and Emergency Assistance Act

(42 U.S.C. 5121 et seq.): Provided, That they have experience and

resources necessary to assure a reasonable prospect for successful

operation with the assistance of such loan and are not able to

obtain sufficient credit elsewhere. In addition to the foregoing

requirements of this subsection, in the case of farm cooperatives,

private domestic corporations, partnerships, joint operations,

trusts, and limited liability companies, the family farm

requirement of the preceding sentence shall apply as well to all

farms in which the entity has an ownership and operator interest

(in the case of loans for a purpose under subchapter I of this

chapter) or an operator interest (in the case of loans for a

purpose under subchapter II of this chapter). The Secretary shall

accept applications from, and make or insure loans pursuant to the

requirements of this subchapter to, applicants, otherwise eligible

under this subchapter, that conduct farming, ranching, or

aquaculture operations in any county contiguous to a county where

the Secretary has found that farming, ranching, or aquaculture

operations have been substantially affected by a quarantine imposed

by the Secretary under the Plant Protection Act (7 U.S.C. 7701) or

the animal quarantine laws (as defined in section 136a of title

21), a natural disaster in the United States, or a major disaster

or emergency designated by the President under the Robert T.

Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.

5121 et seq.). The Secretary shall accept applications for

assistance under this subchapter from persons affected by such a

quarantine or natural disaster at any time during the eight-month

period beginning (A) on the date on which the Secretary determines

that farming, ranching, or aquaculture operations have been

substantially affected by such quarantine or natural disaster or

(B) on the date the President makes the major disaster or emergency

designation with respect to such natural disaster, as the case may

be.

(b) Hazard insurance requirement

(1) In general

After the Secretary makes the determination required by

paragraph (2), the Secretary may not make a loan to a farmer or

rancher under this subchapter to cover a property loss unless the

farmer or rancher had hazard insurance that insured the property

at the time of the loss.

(2) Determination

Not later than 180 days after April 4, 1996, the Secretary

shall determine the appropriate level of insurance to be required

under paragraph (1).

(3) Loans to poultry farmers

(A) Inability to obtain insurance

(i) In general

Notwithstanding any other provision of this subchapter, the

Secretary may make a loan to a poultry farmer under this

subchapter to cover the loss of a chicken house for which the

farmer did not have hazard insurance at the time of the loss,

if the farmer -

(I) applied for, but was unable, to obtain hazard

insurance for the chicken house;

(II) uses the loan to rebuild the chicken house in

accordance with industry standards in effect on the date

the farmer submits an application for the loan (referred to

in this paragraph as ''current industry standards'');

(III) obtains, for the term of the loan, hazard insurance

for the full market value of the chicken house; and

(IV) meets the other requirements for the loan under this

subchapter.

(ii) Amount

Subject to the limitation contained in section 1964(a)(2)

of this title, the amount of a loan made to a poultry farmer

under clause (i) shall be an amount that will allow the

farmer to rebuild the chicken house in accordance with

current industry standards.

(B) Loans to comply with current industry standards

(i) In general

Notwithstanding any other provision of this subchapter, the

Secretary may make a loan to a poultry farmer under this

subchapter to cover the loss of a chicken house for which the

farmer had hazard insurance at the time of the loss, if -

(I) the amount of the hazard insurance is less than the

cost of rebuilding the chicken house in accordance with

current industry standards;

(II) the farmer uses the loan to rebuild the chicken

house in accordance with current industry standards;

(III) the farmer obtains, for the term of the loan,

hazard insurance for the full market value of the chicken

house; and

(IV) the farmer meets the other requirements for the loan

under this subchapter.

(ii) Amount

Subject to the limitation contained in section 1964(a)(2)

of this title, the amount of a loan made to a poultry farmer

under clause (i) shall be the difference between -

(I) the amount of the hazard insurance obtained by the

farmer; and

(II) the cost of rebuilding the chicken house in

accordance with current industry standards.

(c) Family farm system

The Secretary shall conduct the emergency loan program under this

subchapter in a manner that will foster and encourage the family

farm system of agriculture, consistent with the reaffirmation of

policy and declaration of the intent of Congress contained in

section 2266(a) of this title.

(d) Definitions

For the purposes of this subchapter -

(1) ''aquaculture'' means the husbandry of aquatic organisms

under a controlled or selected environment; and

(2) ''able to obtain sufficient credit elsewhere'' means able

to obtain sufficient credit elsewhere to finance the applicant's

actual needs at reasonable rates and terms, taking into

consideration prevailing private and cooperative rates and terms

in the community in or near which the applicant resides for loans

for similar purposes and periods of time.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 321, Aug. 8, 1961, 75 Stat. 311;

Pub. L. 87-832, Oct. 15, 1962, 76 Stat. 958; Pub. L. 93-24, Sec. 2,

3, 6, Apr. 20, 1973, 87 Stat. 24, 25; Pub. L. 93-237, Sec. 10(a),

(d), Jan. 2, 1974, 87 Stat. 1025; Pub. L. 94-68, Sec. 2, 3, Aug. 5,

1975, 89 Stat. 381; Pub. L. 95-334, title I, Sec. 118, Aug. 4,

1978, 92 Stat. 426; Pub. L. 96-302, title I, Sec. 120(a), July 2,

1980, 94 Stat. 841; Pub. L. 96-438, Sec. 3(a), (b)(1), Oct. 13,

1980, 94 Stat. 1872; Pub. L. 97-35, title I, Sec. 161, Aug. 13,

1981, 95 Stat. 378; Pub. L. 98-258, title VI, Sec. 602(a), Apr. 10,

1984, 98 Stat. 138; Pub. L. 99-198, title XIII, Sec. 1308(a),

(b)(1), Dec. 23, 1985, 99 Stat. 1522; Pub. L. 100-707, title I,

Sec. 109(c)(1), Nov. 23, 1988, 102 Stat. 4708; Pub. L. 104-127,

title VI, Sec. 621(a), Apr. 4, 1996, 110 Stat. 1091; Pub. L.

106-387, Sec. 1(a) (title VIII, Sec. 833), Oct. 28, 2000, 114 Stat.

1549, 1549A-61; Pub. L. 107-171, title V, Sec. 5201(a), 5302,

5501(a), May 13, 2002, 116 Stat. 344, 351.)

-REFTEXT-

REFERENCES IN TEXT

The Plant Protection Act, referred to in subsec. (a), is title IV

of Pub. L. 106-224, June 20, 2000, 114 Stat. 438, as amended, which

is classified principally to chapter 104 (Sec. 7701 et seq.) of

this title. For complete classification of this Act to the Code,

see Short Title note set out under section 7701 of this title and

Tables.

The Robert T. Stafford Disaster Relief and Emergency Assistance

Act, referred to in subsec. (a), is Pub. L. 93-288, May 22, 1974,

88 Stat. 143, as amended, which is classified principally to

chapter 68 (Sec. 5121 et seq.) of Title 42, The Public Health and

Welfare. For complete classification of this Act to the Code, see

Short Title note set out under section 5121 of Title 42 and Tables.

-MISC2-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171 substituted ''a quarantine

imposed by the Secretary under the Plant Protection Act or the

animal quarantine laws (as defined in section 136a of title 21), a

natural disaster in the United States, or'' for ''a natural

disaster in the United States or by'' in two places, ''Robert T.

Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.

5121 et seq.)'' for ''Disaster Relief and Emergency Assistance

Act'' in two places, ''joint operations, trusts, or limited

liability companies'' for ''or joint operations'' in two places,

''joint operations, trusts, and limited liability companies'' for

''and joint operations'', ''such a quarantine or natural disaster

at any time'' for ''a natural disaster at any time'', and ''by such

quarantine or natural disaster or (B)'' for ''by such natural

disaster or (B)''.

2000 - Subsec. (b)(3). Pub. L. 106-387 added par. (3).

1996 - Subsec. (b). Pub. L. 104-127 added subsec. (b) and struck

out former subsec. (b) which read as follows: ''An applicant shall

be ineligible for financial assistance under this subchapter for

crop losses if crop insurance was available to the applicant for

such crop losses under the Federal Crop Insurance Act (7 U.S.C.

1501 et seq.).''

1988 - Subsec. (a). Pub. L. 100-707 substituted ''and Emergency

Assistance Act'' for ''Act of 1974'' in two places.

1985 - Subsec. (a)(1). Pub. L. 99-198, Sec. 1308(a), inserted

''and who are owner-operators (in the case of loans for a purpose

under subchapter I of this chapter) or operators (in the case of

loans for a purpose under subchapter II of this chapter) of not

larger than family farms'' after ''United States'' in cl. (1) of

first sentence, extended applicability to joint operations, and

substituted requirement that a majority interest be held by

individuals who are citizens of the United States and who are

owner-operators (in the case of loans for a purpose under

subchapter I of this chapter) or operators (in the case of loans

for a purpose under subchapter II of this chapter) of not larger

than family farms (or in the case of such cooperatives,

corporations, partnerships, or joint operations in which a majority

interest is held by individuals who are related by blood or

marriage, as defined by the Secretary, that such individuals must

be either owners or operators of not larger than a family farm and

at least one such individual must be an operator of not larger than

a family farm) for requirement that a majority interest be held by

members, stockholders or partners who are citizens of the United

States, in cl. (2) of first sentence, and inserted provision

extending the family farm requirement to all farms in which the

entity has an ownership and operator interest (in the case of loans

for a purpose under subchapter I of this chapter) or an operator

interest (in the case of loans for a purpose under subchapter II of

this chapter).

Subsec. (b). Pub. L. 99-198, Sec. 1308(b)(1), amended subsec. (b)

generally, substituting provision declaring a loan applicant

ineligible for financial assistance for crop losses where crop

insurance was available to the applicant for former provision which

made applicants eligible for loans, though able to obtain credit

elsewhere, subject to the other terms and conditions for loans

under this subchapter and as prescribed under regulations by the

Secretary.

1984 - Subsec. (a). Pub. L. 98-258 inserted provisions directing

the Secretary to accept applications from, and make or insure loans

pursuant to the requirements of this subchapter to, applicants,

otherwise eligible under this subchapter, that conduct farming,

ranching, or aquaculture operations in any county contiguous to a

county where the Secretary has found that farming, ranching, or

aquaculture operations have been substantially affected by a

natural disaster in the United States or by a major disaster or

emergency designated by the President under the Disaster Relief Act

of 1974, and further directing the Secretary to accept applications

for assistance under this subchapter from persons affected by a

natural disaster at any time during the eight-month period

beginning (A) on the date on which the Secretary determines that

farming, ranching, or aquaculture operations have been

substantially affected by such natural disaster or (B) on the date

the President makes the major disaster or emergency designation

with respect to such natural disaster, as the case may be.

1981 - Subsec. (a). Pub. L. 97-35 inserted provisions relating to

requirement for advance appropriation of amounts.

1980 - Subsec. (a). Pub. L. 96-348, Sec. 3(a), (b)(1), repealed

section 120 of Pub. L. 96-302 (see par. below) and amended section

generally, designating existing provisions as subsec. (a) and, as

so designated, restoring provision to proviso requiring loan

recipients to be unable to obtain sufficient credit elsewhere.

Pub. L. 96-302, Sec. 120(a) (see par. above), struck out from

proviso requirement that persons to be eligible for loans be unable

to obtain sufficient credit elsewhere to finance their actual needs

at reasonable rates and terms, taking into consideration prevailing

private and cooperative rates and terms in the community in or near

which they reside for loans for similar purposes and periods of

time.

Subsecs. (b) to (d). Pub. L. 96-438, Sec. 3(b)(1), added subsecs.

(b) to (d).

1978 - Pub. L. 95-334 struck out subsec. (a) which set forth

provisions relating to designation of emergency areas and

definition of term ''aquaculture'', and incorporated provisions of

subsec. (b) as entire section and, as so incorporated, substituted

provisions relating to criteria authorizing the Secretary to make

and insure loans, for provisions relating to criteria authorizing

the Secretary to make loans in designated areas.

1975 - Subsec. (a). Pub. L. 94-68, Sec. 2, substituted provisions

authorizing the Secretary to designate an emergency area if he

finds that a natural disaster has occurred in that area which

substantially affected farming, ranching, or aquaculture operations

for provisions authorizing the Secretary to designate an emergency

area if he finds that there exists in that area a general need for

agricultural credit and that the need for such credit in that area

is the result of a natural disaster, and inserted definition of

''aquaculture''.

Subsec. (b). Pub. L. 94-68, Sec. 3, extended the authority of the

Secretary to make loans to areas designated by the President as

''Emergency'' pursuant to Disaster Relief Act of 1970, substituted

reference to persons engaged in aquaculture and aquaculture for

reference to oyster planters and oyster planting respectively,

struck out provision that such loans be made without regard to

whether the required financial assistance is otherwise available

from private, cooperative, or other responsible sources, inserted

requirement that the loan applicant be unable to obtain credit

elsewhere at reasonable rates and terms, and inserted sentence that

the provisions of this subsection shall not apply to loan

applications filed prior to July 9, 1975.

1974 - Subsec. (a). Pub. L. 93-237, Sec. 10(d), struck out

''which cannot be met for temporary periods of time by private,

cooperative, or other responsible sources (including loans the

Secretary is authorized to make or insure under subchapters I and

II of this chapter or any other Act of Congress), at reasonable

rates and terms for loans for similar purposes and periods of

time'' after ''a general need for agricultural credit''.

Subsec. (b). Pub. L. 93-237, Sec. 10(a), struck out '', and are

unable to obtain sufficient credit elsewhere to finance their

actual needs at reasonable rates and terms, taking into

consideration prevailing practice and cooperative rates and terms

in the community in or near which the applicant resides for loans

for similar purposes and periods of time'' after ''a reasonable

prospect for successful operation with the assistance of such

loan'' and inserted provision that the loans be made without regard

to whether the required financial assistance is otherwise available

from the private, cooperative, or other responsible sources.

1973 - Subsec. (a). Pub. L. 93-24, Sec. 2, 6, substituted in

parenthetical text ''authorized to make or insure under subchapters

I and II of this chapter'' for ''authorized to make under

subchapter II of this chapter or to make or insure under subchapter

I of this chapter'' and introductory words ''shall designate'' for

''may designate''.

Subsec. (b). Pub. L. 93-24, Sec. 3, substituted introductory text

''shall make loans in any such area designated by the Secretary in

accordance with subsection (a) of this section and in any area

designated as a major disaster by the President pursuant to the

provisions of the Disaster Relief Act of 1970, as amended,'' for

''is authorized to make loans in any such area'' and '': Provided,

That'' for ''provided'' before ''they have experience''.

1962 - Subsec. (b). Pub. L. 87-832 authorized loans to

established oyster planters and to private domestic corporations or

partnerships engaged primarily in oyster planting.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 621(b) of Pub. L. 104-127 provided that: ''Section

321(b)(1) of the Consolidated Farm and Rural Development Act (7

U.S.C. 1961(b)(1)) shall not apply until the Secretary of

Agriculture makes the determination required by section 321(b)(2)

of the Act.'' (The Secretary's determination relating to hazard

insurance under this provision was contained in interim rules

published Mar. 3, 1997, and effective Mar. 24, 1997, see 62 F.R.

9351.)

EFFECTIVE DATE OF 1985 AMENDMENT

Section 1308(b)(2) of Pub. L. 99-198 provided that: ''The

amendment made by paragraph (1) (amending this section) shall not

apply to a person whose eligibility for an emergency loan is the

result of damage to an annual crop planted or harvested before the

end of 1986.''

EFFECTIVE DATE OF 1984 AMENDMENT

Section 602(c) of Pub. L. 98-258 provided that: ''the amendments

made by this section (amending this section and section 1964 of

this title) shall be applicable to disasters occurring after May

30, 1983.''

EFFECTIVE DATE OF 1980 AMENDMENTS

Section 3(d) of Pub. L. 96-438 provided that: ''The amendments to

subtitle C of the Consolidated Farm and Rural Development Act made

by subsection (b) of this section (amending this section and

sections 1962 to 1964 and 1971 of this title) shall be effective

with respect to loans approved by the Secretary of Agriculture

under subtitle C (this subchapter) after the date of enactment of

this Act (Oct. 13, 1980), except that, for borrowers with loans

outstanding under subtitle C as of December 15, 1979 -

''(1) the limits on loans under section 324 of the Consolidated

Farm and Rural Development Act (section 1964 of this title) made

by subsection (b)(1) of this section (amending this section and

sections 1962 to 1964 of this title), and

''(2) the reduction in the time limit on subsequent emergency

loans under section 330 of the Consolidated Farm and Rural

Development Act (section 1971 of this title) made by subsection

(b)(2) of this section (amending section 1971 of this title)

shall not apply to subsequent emergency loans under section 330 (as

in effect on the date preceding the date of enactment of this Act)

that are made to such borrowers for the disasters for which the

borrowers obtained loans under subtitle C prior to December 16,

1979.''

Amendment by Pub. L. 96-302 effective Oct. 1, 1980, see section

507 of Pub. L. 96-302, set out as a note under section 631 of Title

15, Commerce and Trade.

EFFECTIVE DATE OF 1974 AMENDMENT

Section 10(b) of Pub. L. 93-237 provided that: ''The provisions

of subsection (a) of this section (amending this section) shall be

given effect with respect to all loan applications and loans made

in connection with a disaster occurring on or after April 20,

1973.''

Section 10(d) of Pub. L. 93-237 provided in part that: ''The

provisions of this subsection (amending this section) shall be

given effect with respect to all loan applications and loans made

in connection with a disaster occurring on or after December 27,

1972.''

INELIGIBILITY FOR EMERGENCY LOANS

Pub. L. 101-82, title III, Sec. 301, Aug. 14, 1989, 103 Stat.

581, provided that: ''Section 321(b) of the Consolidated Farm and

Rural Development Act (7 U.S.C. 1961(b)) shall not apply to a

person who otherwise would be eligible for an emergency loan under

subtitle C of such Act (7 U.S.C. 1961 et seq.), if such eligibility

is the result of damage to an annual crop planted for harvest in

1989.''

Similar provisions were contained in the following prior act:

Pub. L. 100-387, title III, Sec. 311, Aug. 11, 1988, 102 Stat.

948.

NINETY-DAY EXTENSION AFTER JANUARY 2, 1974, OF DEADLINE FOR SEEKING

ASSISTANCE WITH REGARD TO DISASTERS OCCURRING ON OR AFTER DECEMBER

27, 1972

Section 10(c) of Pub. L. 93-237 provided that: ''With regard to

all disasters occurring on or after December 27, 1972, the

Secretary of Agriculture shall extend for ninety days after the

date of enactment of this section (Jan. 2, 1974) the deadline for

seeking assistance under section 321 of the Consolidated Farm and

Rural Development Act (this section) as amended by this section

(amending this section).''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1964, 1991, 2008f, 2008h

of this title; title 15 section 636; title 42 section 5154a.

-CITE-

7 USC Sec. 1962 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1962. Loan determination factors; written credit declinations

-STATUTE-

(a) For the purpose of determining whether to make or insure any

loan under this subchapter, the Secretary shall take into

consideration the net worth of the applicant involved, including

all the assets and liabilities of the applicant.

(b) For the purpose of determining whether an applicant under

this subchapter is not able to obtain sufficient credit elsewhere,

the Secretary shall require at least one written indication of

declination of credit, from a legally organized lending institution

within reasonable proximity to the applicant, that specifies the

reasons for the declination: Provided, That for loans in excess of

$300,000, the Secretary shall require at least two such written

declinations: Provided further, That for loans of $100,000 or less,

the Secretary may waive the requirement of this subsection if the

Secretary determines that it would impose an undue burden on the

applicant.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 322, Aug. 8, 1961, 75 Stat. 311;

Pub. L. 94-68, Sec. 4, Aug. 5, 1975, 89 Stat. 381; Pub. L. 96-438,

Sec. 3(b)(1), Oct. 13, 1980, 94 Stat. 1873; Pub. L. 104-127, title

VI, Sec. 622, Apr. 4, 1996, 110 Stat. 1091.)

-MISC1-

AMENDMENTS

1996 - Subsec. (b). Pub. L. 104-127 substituted ''loans of

$100,000 or less'' for ''loans of $300,000 or less''.

1980 - Pub. L. 96-438 substituted provisions prescribing factors

to be considered in determining whether to make or insure a loan

and relating to the need for applicants unable to obtain sufficient

credit elsewhere to provide written credit declinations for

provisions relating to the purpose and extent of loans under this

subchapter.

1975 - Pub. L. 94-68 extended authority to finance crop or

livestock changes deemed desirable as a result of changes in market

demand, and to make emergency loans in excess of the actual loss

sustained as a result of the natural disaster.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-127 effective 90 days after Apr. 4,

1996, see section 663(b) of Pub. L. 104-127, set out as a note

under section 1922 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-438 effective with respect to loans

approved after Oct. 13, 1980, except for certain subsequent

emergency loans, see section 3(d) of Pub. L. 96-438, set out as a

note under section 1961 of this title.

-CITE-

7 USC Sec. 1963 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1963. Purpose and extent of loans

-STATUTE-

Loans may be made or insured under this subchapter for any

purpose authorized for loans under subchapter I or II of this

chapter and for crop or livestock changes that are necessitated by

a quarantine, natural disaster, major disaster, or emergency and

that are deemed desirable by the applicant, subject to the

limitations on the amounts of loans provided in section 1964(a) of

this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 323, Aug. 8, 1961, 75 Stat. 311;

Pub. L. 96-438, Sec. 3(b)(1), Oct. 13, 1980, 94 Stat. 1873; Pub. L.

104-127, title VI, Sec. 623, Apr. 4, 1996, 110 Stat. 1091; Pub. L.

107-171, title V, Sec. 5201(b), May 13, 2002, 116 Stat. 344.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Pub. L. 107-171 inserted ''quarantine,'' before ''natural

disaster''.

1996 - Pub. L. 104-127 inserted ''that are necessitated by a

natural disaster, major disaster, or emergency and that are'' after

''livestock changes''.

1980 - Pub. L. 96-438 substituted provisions relating to the

purposes and extent of loans made or insured under this subchapter

for provisions limiting loans to amounts certified by the county

committee.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-127 effective 90 days after Apr. 4,

1996, see section 663(b) of Pub. L. 104-127, set out as a note

under section 1922 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-438 effective with respect to loans

approved after Oct. 13, 1980, except for certain subsequent

emergency loans, see section 3(d) of Pub. L. 96-438, set out as a

note under section 1961 of this title.

-CITE-

7 USC Sec. 1964 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1964. Terms of loans

-STATUTE-

(a) Maximum amount of loan

The Secretary may not make a loan under this subchapter to a

borrower who has suffered a loss in an amount that -

(1) exceeds the actual loss caused by a disaster; or

(2) would cause the total indebtedness of the borrower under

this subchapter to exceed $500,000.

(b) Interest rates

Loans under this subchapter shall be at rates of interest as

follows:

(1) For loans or portions of loans up to the amount of the

applicant's actual loss caused by the disaster, as limited under

subsection (a)(1) of this section, the interest shall be at rates

prescribed by the Secretary, but not in excess of 8 percent per

annum; and

(2) For loans or portions of loans in excess of the amount of

the applicant's actual loss caused by the disaster, as limited

under subsection (a)(1) of this section, (A) the interest for

insured loans shall be at rates prevailing in the private market

for similar loans, as determined by the Secretary, and (B) the

interest for guaranteed loans shall be at rates agreed on by the

borrower and lender, but not in excess of such rates as may be

determined by the Secretary.

(c) Interest subsidies

For guaranteed loans under this subchapter, the Secretary may pay

interest subsidies to the lenders for those portions of the loans

up to the amount of the actual loss caused by the disaster, as

limited under subsection (a)(1) of this section. Any such subsidy

shall not exceed the difference between the interest rate being

charged for loans up to the amount of the actual loss, as

established under subsection (b)(1) of this section, and the

maximum interest rate for guaranteed loans, as established under

subsection (b)(2) of this section.

(d) Repayment

(1) In general

All loans under this subchapter shall be repayable at such

times as the Secretary may determine, taking into account the

purposes of the loan and the nature and effect of the disaster,

but not later than as provided for loans for similar purposes

under subchapters I and II of this chapter, and upon the full

personal liability of the borrower and upon the best security

available, as the Secretary may prescribe: Provided, That the

security is adequate to assure repayment of the loans, except

that if such security is not available because of the disaster,

the Secretary shall (1) accept as security such collateral as is

available, a portion or all of which may have depreciated in

value due to the disaster and which in the opinion of the

Secretary, together with the Secretary's confidence in the

repayment ability of the applicant, is adequate security for the

loan, and (2) make such loan repayable at such times as the

Secretary may determine, not later than as provided under

subchapters I and II of this chapter, as justified by the needs

of the applicant: Provided further, That for any disaster

occurring after January 1, 1975, the Secretary, if the loan is

for a purpose described in subchapter II of the chapter, may make

the loan repayable at the end of a period of more than seven

years, but not more than twenty years, if the Secretary

determines that the need of the loan applicant justifies such a

longer repayment period: Provided further, That for any direct or

insured loan (other than a guaranteed loan) approved under

section 1961(b) of this title, three years after the loan is made

or insured, and every two years thereafter for the term of the

loan, the Secretary shall review the loan; and if, based on such

review, the Secretary determines that the borrower is able to

obtain a loan from non-Federal sources at reasonable rates and

terms for loans for similar purposes and periods of time, the

borrower shall on request by the Secretary, apply for and accept

such non-Federal loan in sufficient amount to repay the

Secretary. If farm assets (including land, livestock, and

equipment) are used as collateral to secure a loan made under

this subchapter, the Secretary shall establish the value of the

assets as of the day before the occurrence of the natural

disaster, major disaster, or emergency that is the basis for a

request for assistance under this subchapter or the Robert T.

Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.

5121 et seq.).

(2) No basis for denial of loan

(A) In general

Subject to subparagraph (B), the Secretary shall not deny a

loan under this subchapter to a borrower by reason of the fact

that the borrower lacks a particular amount of collateral for

the loan if the Secretary is reasonably certain that the

borrower will be able to repay the loan.

(B) Refusal to pledge available collateral

The Secretary may deny or cancel a loan under this subchapter

if a borrower refuses to pledge available collateral on request

by the Secretary.

(e) Grant eligibility

Any political subdivision of a State with a population of less

than ten thousand inhabitants that, if such subdivision had a

population of ten thousand or more inhabitants, would be eligible

for a grant under the first title of the Community Emergency

Drought Relief Act of 1977 shall be eligible for a grant under this

chapter during any period in which the Community Emergency Drought

Relief Act of 1977 is or has been in effect.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 324, Aug. 8, 1961, 75 Stat. 311;

Pub. L. 93-24, Sec. 4, Apr. 20, 1973, 87 Stat. 25; Pub. L. 94-68,

Sec. 5, Aug. 5, 1975, 89 Stat. 381; Pub. L. 95-89, title IV, Sec.

406, Aug. 4, 1977, 91 Stat. 561; Pub. L. 95-334, title I, Sec. 119,

Aug. 4, 1978, 92 Stat. 427; Pub. L. 96-302, title I, Sec. 120(b),

July 2, 1980, 94 Stat. 841; Pub. L. 96-438, Sec. 3(a), (b)(1), Oct.

13, 1980, 94 Stat. 1872, 1873; Pub. L. 97-35, title I, Sec. 162(a),

Aug. 13, 1981, 95 Stat. 378; Pub. L. 98-258, title VI, Sec. 602(b),

Apr. 10, 1984, 98 Stat. 138; Pub. L. 99-198, title XIII, Sec.

1308(b)(3), (c), Dec. 23, 1985, 99 Stat. 1523; Pub. L. 100-707,

title I, Sec. 109(c)(2), Nov. 23, 1988, 102 Stat. 4708; Pub. L.

104-127, title VI, Sec. 624, 625, Apr. 4, 1996, 110 Stat. 1091;

Pub. L. 105-277, div. A, Sec. 101(a) (title VIII, Sec. 802), Oct.

21, 1998, 112 Stat. 2681, 2681-38.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (d)

and (e), see note set out under section 1921 of this title.

The Robert T. Stafford Disaster Relief and Emergency Assistance

Act, referred to in subsec. (d), is Pub. L. 93-288, May 22, 1974,

88 Stat. 143, as amended, which is classified principally to

chapter 68 (Sec. 5121 et seq.) of Title 42, The Public Health and

Welfare. For complete classification of this Act to the Code, see

Short Title note set out under section 5121 of Title 42 and Tables.

The Community Emergency Drought Relief Act of 1977, referred to

in subsec. (e), is Pub. L. 95-31, May 23, 1977, 91 Stat. 169. Title

I of the Community Emergency Drought Relief Act of 1977 is set out

as a note under section 5184 of Title 42. For complete

classification of this Act to the Code, see Tables.

-MISC2-

AMENDMENTS

1998 - Subsec. (d). Pub. L. 105-277 inserted heading, designated

existing provisions as par. (1) and inserted heading, and added

par. (2).

1996 - Pub. L. 104-127, Sec. 624, inserted section catchline.

Subsec. (a). Pub. L. 104-127, Sec. 624, added subsec. (a) and

struck out former subsec. (a) which read as follows: ''No loan made

or insured under this subchapter may exceed the amount of the

actual loss caused by the disaster or $500,000, whichever is less,

for each disaster.''

Subsec. (d). Pub. L. 104-127, Sec. 625, in last sentence,

substituted ''establish the value of the assets as of the day

before the occurrence of the natural disaster, major disaster, or

emergency that is the basis for a request for assistance under this

subchapter or the Robert T. Stafford Disaster Relief and Emergency

Assistance Act (42 U.S.C. 5121 et seq.).'' for ''value the assets

based on the higher of (A) the value of the assets on the day

before the date the governor of the State in which the farm is

located requests assistance under this subchapter or the Disaster

Relief and Emergency Assistance Act for any portion of such State

affected by the disaster with respect to which the application for

the loan is made, or (B) the value of the assets one year before

such day.''

1988 - Subsec. (d). Pub. L. 100-707 substituted ''and Emergency

Assistance Act'' for ''Act of 1974''.

1985 - Subsec. (a). Pub. L. 99-198, Sec. 1308(c), in amending

subsec. (a) generally, struck out par. (1) designation, substituted

''No loan'' for ''Except as otherwise provided in paragraph (2) of

this subsection, no loan'', and struck out par. (2) authorization

of loans through Sept. 30, 1982 for applicants unable to obtain

sufficient credit elsewhere, limited to an amount that would not

cause the total unpaid principal indebtedness of the loan applicant

to exceed: $1,500,000 through end of fiscal year 1980; $1,000,000

during fiscal year 1981; and $500,000 during fiscal year 1982; and

restricted loans in excess of amount of actual loss that were for

more than $300,000 without a prior determination of the Secretary

of applicant's inability to obtain loans to finance actual needs at

reasonable rates and terms in the residential community of the

applicant for loans for similar purposes and periods of time.

Subsec. (b)(1). Pub. L. 99-198, Sec. 1308(b)(3), substituted

provision for interest rates prescribed by the Secretary but ''not

in excess of 8 percent per annum'' for former such provision but

''(A) if the applicant is not able to obtain sufficient credit

elsewhere, not in excess of 8 per centum per annum, and (B) if the

applicant is able to obtain sufficient credit elsewhere, not in

excess of the rate prevailing in the private market for similar

loans, as determined by the Secretary''.

1984 - Subsec. (d). Pub. L. 98-258 inserted provision that, if

farm assets (including land, livestock, and equipment) are used as

collateral to secure a loan made under this subchapter, the

Secretary shall value the assets based on the higher of (A) the

value of the assets on the day before the date the governor of the

State in which the farm is located requests assistance under this

subchapter or the Disaster Relief Act of 1974 for any portion of

such State affected by the disaster with respect to which the

application for the loan is made, or (B) the value of the assets

one year before such day.

1981 - Subsec. (b)(1). Pub. L. 97-35 in cl. (A) increased amount

from 5 to 8 per centum, and in cl. (B) substituted provisions

relating to a rate not in excess of the rate prevailing in the

private market for similar loans, for provisions relating to a rate

not in excess of current average market yield on outstanding United

States marketable obligations, plus additional charges and

adjustments.

1980 - Subsec. (a). Pub. L. 96-348, Sec. 3(a), (b)(1), repealed

section 120 of Pub. L. 96-302 (see par. below) and amended subsec.

(a) generally, substituting provisions relating to the limitation

on loans made or insured under this subchapter and authorizing

excess loan amounts for provisions relating to the interest rates,

maturity and security of loans made or insured under this chapter.

Pub. L. 96-302, Sec. 120(b) (see par. above), substituted

interest rate provisions of first sentence for prior provision for

loans ''(1) at a rate of interest not in excess of 5 per centum per

annum on loans up to the amount of the actual loss caused by the

disaster, and (2) for any loans or portions of loans in excess of

that amount, the interest rate will be that prevailing in the

private market for similar loans, as determined by the Secretary''

and inserted proviso in second sentence for repayment of subsec.

(a)(1)(B) loans.

Subsec. (b). Pub. L. 96-438, Sec. 3(b)(1), substituted provisions

relating to interest rates on loans made or insured under this

subchapter for provisions relating to eligibility of political

subdivisions of states for grants under this chapter.

Subsecs. (c) to (e). Pub. L. 96-438, Sec. 3(b)(1), added subsecs.

(c) to (e).

1978 - Subsecs. (b), (c). Pub. L. 95-334 redesignated subsec. (c)

as (b). Former subsec. (b), which related to reductions in the

interest rate based on interest rate of the Small Business

Administration, was struck out.

1977 - Subsec. (a). Pub. L. 95-89 designated existing provisions

as subsec. (a) and struck out last proviso prescribing for any loan

made by the Small Business Administration in connection with a

disaster occurring on or after Aug. 5, 1975, under section

636(b)(1), (2), or (4) of title 15 a rate of interest determined in

the first paragraph following section 636(b)(8) of title 15 for

loans under paragraphs (3), (5), (6), (7), or (8) of section 636(b)

of title 15, now covered in subsec. (b) of this section.

Subsecs. (b), (c). Pub. L. 95-89 added subsecs. (b) and (c).

1975 - Pub. L. 94-68 made the existing rate of 5 percent

applicable to loans up to the amount of the actual loss caused by

the disaster, inserted provisions that for loans or portions of

loans in excess of that amount the interest rate will be that

prevailing in the private market for similar loans, as determined

by the Secretary, and inserted provisos relating to security,

disasters occurring after Jan. 1, 1975, and loans made by Small

Business Administration.

1973 - Pub. L. 93-24 substituted ''5'' for ''3'' per centum.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 624 of Pub. L. 104-127 effective Apr. 4,

1996, and amendment by section 625 of Pub. L. 104-127 effective 90

days after Apr. 4, 1996, see section 663(a), (b) of Pub. L.

104-127, set out as a note under section 1922 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-258 applicable to disasters occurring

after May 30, 1983, see section 602(c) of Pub. L. 98-258, set out

as a note under section 1961 of this title.

EFFECTIVE DATE OF 1981 AMENDMENT

Section 162(b) of Pub. L. 97-35 provided that: ''The amendments

made by this section (amending this section) shall apply to loans

made with respect to disasters occurring after September 30,

1981''.

EFFECTIVE DATE OF 1980 AMENDMENTS

Amendment by section 3(b)(1) of Pub. L. 96-438 effective with

respect to loans approved after Oct. 13, 1980, except for certain

subsequent emergency loans, see section 3(d) of Pub. L. 96-438, set

out as a note under section 1961 of this title.

Amendment by Pub. L. 96-302 effective Oct. 1, 1980, see section

507 of Pub. L. 96-302, set out as a note under section 631 of Title

15, Commerce and Trade.

EFFECTIVE DATE OF 1978 AMENDMENT

Section 119 of Pub. L. 95-334 provided that the amendment made by

that section is effective Oct. 1, 1978.

SMALL BUSINESS DISASTER LOANS; INTEREST RATE; CANCELLATION OF LOANS

Loans by Small Business Administration in connection with any

disaster occurring on or after Apr. 20, 1973 made under section

636(b)(1), (2), or (4) of Title 15, as subject to interest rate

determined under this section and prohibition against cancellation

of such loan under any provision of law, see section 9 of Pub. L.

93-24, set out as a note under section 636 of Title 15, Commerce

and Trade.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1961, 1963 of this title.

-CITE-

7 USC Sec. 1965 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1965. Repealed. Pub. L. 95-334, title I, Sec. 120, Aug. 4,

1978, 92 Stat. 427

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 325, Aug. 8, 1961, 75

Stat. 311; Pub. L. 94-68, Sec. 6, Aug. 5, 1975, 89 Stat. 382,

authorized delegation of authority to State Directors of Farmers

Home Administration for making emergency loans.

-CITE-

7 USC Sec. 1966 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1966. Emergency Credit Revolving Fund utilization

-STATUTE-

The Secretary is authorized to utilize the revolving fund created

by section 1148a (FOOTNOTE 1) of title 12 (hereinafter in this

subchapter referred to as the ''Emergency Credit Revolving Fund'')

for carrying out the purposes of this subchapter.

(FOOTNOTE 1) See References in Text note below.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 326, Aug. 8, 1961, 75 Stat. 312.)

-REFTEXT-

REFERENCES IN TEXT

Section 1148a of title 12, referred to in text, was repealed by

Pub. L. 92-181, title V, Sec. 5.26(a), Dec. 10, 1971, 85 Stat. 624.

See section 2252 of Title 12, Banks and Banking.

The Emergency Credit Revolving Fund, referred to in text, was

abolished and its assets and liabilities transferred to the

Agricultural Credit Insurance Fund by section 1929 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1929 of this title.

-CITE-

7 USC Sec. 1967 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1967. Addition to Emergency Credit Revolving Fund of sums from

liquidation of loans; authorization of appropriations

-STATUTE-

(a) All sums received by the Secretary from the liquidation of

loans made under the provisions of this subchapter or under the Act

of April 6, 1949, as amended, or the Act of August 31, 1954, and

from the liquidation of any other assets acquired with money from

the Emergency Credit Revolving Fund shall be added to and become a

part of such fund.

(b) There are authorized to be appropriated to the Emergency

Credit Revolving Fund such additional sums as the Congress shall

from time to time determine to be necessary.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 327, Aug. 8, 1961, 75 Stat. 312.)

-REFTEXT-

REFERENCES IN TEXT

Act of April 6, 1949, as amended, referred to in subsec. (a), is

act Apr. 6, 1949, ch. 49, 63 Stat. 43, as amended, which was

classified to sections 1148a-1 to 1148a-3 of Title 12, Banks and

Banking, was repealed by section 341(a) of Pub. L. 87-128, and is

covered by this chapter.

Act of August 31, 1954, referred to in subsec. (a), is act Aug.

31, 1954, ch. 1145, 68 Stat. 999, which was classified as a note

under section 1148a-1 of Title 12, was repealed by section 341(a)

of Pub. L. 87-128, and is covered by this chapter.

-TRANS-

ABOLITION OF EMERGENCY CREDIT REVOLVING FUND

The Emergency Credit Revolving Fund, referred to in this section

and in section 1966 of this title, was abolished and its assets and

liabilities transferred to the Agricultural Credit Insurance Fund

by section 1929 of this title.

-CITE-

7 USC Sec. 1968 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1968. Repealed. Pub. L. 104-127, title VI, Sec. 626, Apr. 4,

1996, 110 Stat. 1092

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 328, as added Pub. L.

92-173, Nov. 24, 1971, 85 Stat. 491; amended Pub. L. 93-24, Sec. 5,

Apr. 20, 1973, 87 Stat. 25; Pub. L. 95-334, title I, Sec. 109(b),

Aug. 4, 1978, 92 Stat. 423, related to insurance of loans.

-CITE-

7 USC Sec. 1969 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1969. Repealed. Pub. L. 93-24, Sec. 1, Apr. 20, 1973, 87 Stat.

24

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 328, as added Pub. L.

92-385, Sec. 5, Aug. 16, 1972, 86 Stat. 557, provided for emergency

loans for major and natural disasters occurring between June 30,

1971, and July 1, 1973, providing in: subsec. (a) for cancellation

of existing loans and the considerations in making grants, loans,

and refinancing of loans; subsec. (b) for loans for loss or damage

to agricultural crops; subsec. (c) for amount of loans and interest

rates; subsec. (d) for availability of benefits irrespective of

age; subsec. (e) for availability of benefits irrespective of

approval date; and subsec. (f) for report to Congress.

LOANS TO ELIGIBLE APPLICANTS IN AREAS DETERMINED AS NATURAL

DISASTER AREAS AFTER JANUARY 1, 1972, AND BEFORE DECEMBER 27, 1972;

TIME FOR ACCEPTANCE OF APPLICATIONS

Section 8 of Pub. L. 93-24 provided that: ''Notwithstanding the

repeal herein of section 5 of Public Law 92-385 (this section), and

notwithstanding any other provision of law, the Secretary of

Agriculture shall make loans in accordance with the provisions of

section 5 of Public Law 92-385 (this section) to eligible

applicants in natural disaster areas determined or designated by

the Secretary of Agriculture where such determination or

designation had been made after January 1, 1972 and prior to

December 27, 1972. The authority to accept applications for such

loans shall expire 18 days after the effective date of this Act

(Apr. 20, 1973).''

CONTINUATION OF SECRETARY'S AUTHORITY WITH RESPECT TO NATURAL

DISASTERS OCCURRING AFTER DECEMBER 26, 1972, AND PRIOR TO APRIL 20,

1973

Pub. L. 93-237, Sec. 4, Jan. 2, 1974, 87 Stat. 1024, provided

that: ''Notwithstanding the provisions of Public Law 93-24 (which

repealed this section), the Secretary of Agriculture shall continue

to exercise his authority with respect to natural disasters which

occurred after December 26, 1972, but prior to April 20, 1973, in

accordance with the provisions of section 5 of Public Law 92-385

(this section) as such section was in effect prior to April 20,

1973.''

-CITE-

7 USC Sec. 1970 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1970. Eligibility for assistance based on production loss

-STATUTE-

The Secretary shall make financial assistance under this

subchapter available to any applicant seeking assistance based on

production losses if the applicant shows that a single enterprise

which constitutes a basic part of the applicant's farming,

ranching, or aquaculture operation has sustained at least a 30 per

centum loss of normal per acre or per animal production, or such

lesser per centum of loss as the Secretary may determine, as a

result of the disaster based upon the average monthly price in

effect for the previous year and the applicant otherwise meets the

conditions of eligibility prescribed under this subtitle. Such

loans shall be made available based upon 80 per centum, or such

greater per centum as the Secretary may determine, of the total

calculated actual production loss sustained by the applicant.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 329, as added Pub. L. 94-68, Sec.

7, Aug. 5, 1975, 89 Stat. 382; amended Pub. L. 97-35, title I, Sec.

163, Aug. 13, 1981, 95 Stat. 378.)

-MISC1-

AMENDMENTS

1981 - Pub. L. 97-35 increased specific per centum loss from 20

to 30, and authorized a lesser per centum loss pursuant to

determinations by the Secretary under applicable criteria.

-CITE-

7 USC Sec. 1971 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER III - EMERGENCY LOANS

-HEAD-

Sec. 1971. Repealed. Pub. L. 99-198, title XIII, Sec. 1308(d), Dec.

23, 1985, 99 Stat. 1523

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 330, as added Pub. L.

94-68, Sec. 8, Aug. 5, 1975, 89 Stat. 382; amended Pub. L. 96-438,

Sec. 3(b)(2), Oct. 13, 1980, 94 Stat. 1875, authorized additional

emergency loans.

-CITE-

7 USC SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

.

-HEAD-

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in title 25 section 492.

-CITE-

7 USC Sec. 1981 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981. Farmers Home Administration

-STATUTE-

(a) Appointment and compensation of Administrator; transfer of

powers, duties, and assets pertaining to agricultural credit

In accordance with section 2006a of this title, for purposes of

this chapter, and for the administration of assets under the

jurisdiction of the Secretary of Agriculture pursuant to the

Farmers Home Administration Act of 1946, as amended, the

Bankhead-Jones Farm Tenant Act, as amended, the Act of August 28,

1937, as amended, the Act of April 6, 1949, as amended, the Act of

August 31, 1954, as amended, and the power and duties of the

Secretary under any other Act authorizing agricultural credit, the

Secretary may assign and transfer such powers, duties, and assets

to such officers or agencies of the Department of Agriculture as

the Secretary considers appropriate.

(b) Powers of Secretary of Agriculture

The Secretary may -

(1) administer his powers and duties through such national,

area, State, or local offices and employees in the United States

as he determines to be necessary and may authorize an office to

serve the area composed of two or more States if he determines

that the volume of business in the area is not sufficient to

justify separate State offices, and until January 1, 1975, make

contracts for services incident to making, insuring, collecting,

and servicing loans and property as determined by the Secretary

to be necessary for carrying out the purposes of this chapter;

(and the Secretary shall prior to June 30, 1974, report to the

Congress through the President on the experience in using such

contracts, together with recommendations for such legislation as

he may see fit);

(2) accept and utilize voluntary and uncompensated services,

and, with the consent of the agency concerned, utilize the

officers, employees, equipment, and information of any agency of

the Federal Government, or of any State, territory, or political

subdivision;

(3) within the limits of appropriations made therefor, make

necessary expenditures for purchase or hire of passenger

vehicles, and such other facilities and services as he may from

time to time find necessary for the proper administration of this

chapter;

(4) compromise, adjust, reduce, or charge-off debts or claims

(including debts and claims arising from loan guarantees), and

adjust, modify, subordinate, or release the terms of security

instruments, leases, contracts, and agreements entered into or

administered by the Consolidated Farm Service Agency, Rural

Utilities Service, Rural Housing Service, Rural

Business-Cooperative Service, or a successor agency, or the Rural

Development Administration, except for activities under the

Housing Act of 1949 (42 U.S.C. 1441 et seq.). In the case of a

security instrument entered into under the Rural Electrification

Act of 1936 (7 U.S.C. 901 et seq.), the Secretary shall notify

the Attorney General of the intent of the Secretary to exercise

the authority of the Secretary under this paragraph. The

Secretary may not require liquidation of property securing any

farmer program loan or acceleration of any payment required under

any farmer program loan as a prerequisite to initiating an action

authorized under this subsection. After consultation with a

local or area county committee, the Secretary may release

borrowers or others obligated on a debt, except for debt incurred

under the Housing Act of 1949, from personal liability with or

without payment of any consideration at the time of the

compromise, adjustment, reduction, or charge-off of any claim,

except that no compromise, adjustment, reduction, or charge-off

of any claim may be made or carried out after the claim has been

referred to the Attorney General, unless the Attorney General

approves;

(5) except for activities conducted under the Housing Act of

1949 (42 U.S.C. 1441 et seq.), collect all claims and obligations

administered by the Farmers Home Administration, or under any

mortgage, lease, contract, or agreement entered into or

administered by the Farmers Home Administration and, if in his

judgment necessary and advisable, pursue the same to final

collection in any court having jurisdiction;

(6) release mortgage and other contract liens if it appears

that they have no present or prospective value or that their

enforcement likely would be ineffectual or uneconomical;

(7) obtain fidelity bonds protecting the Government against

fraud and dishonesty of officers and employees of the Farmers

Home Administration in lieu of faithful performance of duties

bonds under section 14 (FOOTNOTE 1) of title 6, and regulations

issued pursuant thereto, but otherwise in accordance with the

provisions thereof;

(FOOTNOTE 1) See References in Text note below.

(8) consent to (A) long-term leases of facilities financed

under this subchapter notwithstanding the failure of the lessee

to meet any of the requirements of this subchapter if such

long-term leases are necessary to ensure the continuation of

services for which financing was extended to the lessor, and (B)

the transfer of property securing any loan or financed by any

loan or grant made, insured, or held by the Secretary under this

chapter, or the provisions of any other law administered by the

Rural Development Administration under this chapter or by the

Farmers Home Administration, upon such terms as he deems

necessary to carry out the purpose of the loan or grant or to

protect the financial interest of the Government, and shall

document the consent of the Secretary for the transfer of the

property of a borrower in the file of the borrower; and

(9) notwithstanding that an area ceases, or has ceased, to be

''rural'', in a ''rural area'', or an eligible area, make loans

and grants, and approve transfers and assumptions, under this

chapter on the same basis as though the area still was rural in

connection with property securing any loan made, insured, or held

by the Secretary under this chapter or in connection with any

property held by the Secretary under this chapter.

(c) Delinquent claims and obligations

The Secretary may use for the prosecution or defense of any claim

or obligation described in subsection (b)(5) of this section the

Attorney General, the General Counsel of the Department of

Agriculture, or a private attorney who has entered into a contract

with the Secretary.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331, Aug. 8, 1961, 75 Stat. 312;

Pub. L. 90-488, Sec. 11, Aug. 15, 1968, 82 Stat. 771; Pub. L.

92-419, title I, Sec. 124, Aug. 30, 1972, 86 Stat. 665; Pub. L.

95-334, title I, Sec. 121, Aug. 4, 1978, 92 Stat. 427; Pub. L.

97-98, title XVI, Sec. 1603, Dec. 22, 1981, 95 Stat. 1346; Pub. L.

99-198, title XIII, Sec. 1309, Dec. 23, 1985, 99 Stat. 1523; Pub.

L. 100-233, title VI, Sec. 615(c), Jan. 6, 1988, 101 Stat. 1682;

Pub. L. 101-624, title XVIII, Sec. 1805, 1806, title XXIII, Sec.

2303(a), 2388(d)(1), Nov. 28, 1990, 104 Stat. 3819, 3981, 4052;

Pub. L. 102-237, title V, Sec. 501(c), title VII, Sec.

701(h)(1)(E), Dec. 13, 1991, 105 Stat. 1866, 1880; Pub. L. 103-248,

Sec. 2, May 11, 1994, 108 Stat. 619; Pub. L. 103-354, title II,

Sec. 226(h), Oct. 13, 1994, 108 Stat. 3216; Pub. L. 104-127, title

VI, Sec. 631, 632, title VII, Sec. 748, Apr. 4, 1996, 110 Stat.

1092, 1128; Pub. L. 107-171, title V, Sec. 5303, 5304(a), May 13,

2002, 116 Stat. 345.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a)

and (b)(1), (3), (8), (9), see note set out under section 1921 of

this title.

The Farmers Home Administration Act of 1946, as amended, referred

to in subsec. (a), is act Aug. 14, 1946, ch. 964, 60 Stat. 1062, as

amended, which was classified to sections 1001 to 1005, 1005a to

1005d, 1007, 1008, 1009, 1015 to 1029, 1030, and 1031 of this

title, section 371 of Title 12, Banks and Banking, and section 82h

of Title 31, Money and Finance, and in so far as it amended

provisions of Title I, II, and IV of the Bankhead-Jones Farm Tenant

Act, was repealed by section 341(a) of Pub. L. 87-128, and is

covered by this chapter.

The Bankhead-Jones Farm Tenant Act, as amended, referred to in

subsec. (a), is act July 22, 1937, ch. 517, 50 Stat. 522, as

amended. Title III of act July 22, 1937, as amended, is classified

to sections 1010 to 1012 and 1013a of this title. Titles I, II,

and IV of act July 22, 1937, as amended, were formerly classified

to sections 1001 to 1005, 1005a to 1005d, 1006, 1006c to 1006e,

1007, 1008, 1009, 1014 to 1025, 1026, and 1027 to 1029 of this

title, respectively, were repealed by section 341(a) of Pub. L.

87-128, and are covered by this chapter.

Act of August 28, 1937, as amended, referred to in subsec. (a),

is act Aug. 28, 1937, ch. 870, 50 Stat. 869, as amended, which was

formerly classified to sections 590r to 590x-4 of Title 16,

Conservation, was repealed by section 341(a) of Pub. L. 87-128, and

is covered by this chapter.

Act of April 6, 1949, as amended, referred to in subsec. (a), is

act Apr. 6, 1949, ch. 49, 63 Stat. 43, as amended, which was

formerly classified to sections 1148a-1 to 1148a-3 of Title 12,

Banks and Banking, was repealed by section 341(a) of Pub. L.

87-128, and is covered by this chapter.

Act of August 31, 1954, as amended, referred to in subsec. (a),

is act Aug. 31, 1954, ch. 1145, 68 Stat. 999, which was formerly

classified as a note under section 1148a-1 of Title 12, was

repealed by section 341(a) of Pub. L. 87-128, and is covered by

this chapter.

The Housing Act of 1949, as amended, referred to in subsec.

(b)(4), (5), is act July 15, 1949, ch. 338, 63 Stat. 413, as

amended, which is classified principally to chapter 8A (Sec. 1441

et seq.) of Title 42, The Public Health and Welfare. For complete

classification of this Act to the Code, see Short Title note set

out under section 1441 of Title 42 and Tables.

The Rural Electrification Act of 1936, referred to in subsec.

(b)(4), is act May 20, 1936, ch. 432, 49 Stat. 1363, as amended,

which is classified generally to chapter 31 (Sec. 901 et seq.) of

this title. For complete classification of this Act to the Code,

see section 901 of this title and Tables.

Section 14 of title 6, referred to in subsec. (b)(7), was

repealed by Pub. L. 92-310, title II, Sec. 203(1), June 6, 1972, 86

Stat. 202. For provisions relating to surety bonds of Federal

personnel, see section 9301 et seq. of Title 31, Money and Finance.

-MISC2-

AMENDMENTS

2002 - Subsec. (b)(4). Pub. L. 107-171, Sec. 5303, substituted

''After consultation with a local or area county committee, the

Secretary may release'' for ''The Secretary may release'' and

''carried out after'' for ''carried out -

''(A) with respect to farmer program loans, on terms more

favorable than those recommended by the appropriate county

committee utilized pursuant to section 1982 of this title; or

''(B) after''.

Subsecs. (d), (e). Pub. L. 107-171, Sec. 5304(a), struck out

subsecs. (d) and (e) which related to temporary authority to enter

into contracts, and private collection agency, respectively.

1996 - Subsec. (b)(4). Pub. L. 104-127, Sec. 748, inserted

''(including debts and claims arising from loan guarantees)'' after

''debts or claims'', substituted ''Consolidated Farm Service

Agency, Rural Utilities Service, Rural Housing Service, Rural

Business-Cooperative Service, or a successor agency, or'' for

''Farmers Home Administration or'', and inserted ''In the case of a

security instrument entered into under the Rural Electrification

Act of 1936 (7 U.S.C. 901 et seq.), the Secretary shall notify the

Attorney General of the intent of the Secretary to exercise the

authority of the Secretary under this paragraph.'' after

''activities under the Housing Act of 1949 (42 U.S.C. 1441 et

seq.).''

Subsec. (d). Pub. L. 104-127, Sec. 631, added subsec. (d).

Subsec. (e). Pub. L. 104-127, Sec. 632, added subsec. (e).

1994 - Subsec. (a). Pub. L. 103-354 substituted ''assets to such

officers or agencies of the Department of Agriculture as the

Secretary considers appropriate.'' for ''assets to the Farmers Home

Administration, to be headed by an Administrator, appointed by the

President, by and with the advice and consent of the Senate,

without regard to the civil service laws or chapter 51 and

subchapter III of chapter 53 of title 5, who shall receive basic

compensation as provided by law for that office, or may assign and

transfer such powers, duties, and assets to the Rural Development

Administration as provided by law for that office.''

Subsec. (c). Pub. L. 103-248 added subsec. (c).

1991 - Pub. L. 102-237, Sec. 501(c)(2)(B)(i), amended directory

language of Pub. L. 101-624, Sec. 2388(d)(1). See 1990 Amendment

note below.

Subsec. (b)(1), (2). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii),

(v), amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(vi). See 1990 Amendment note below.

Subsec. (b)(3). Pub. L. 102-237, Sec. 701(h)(1)(E), substituted

''this chapter'' for ''this Act''.

Pub. L. 102-237, Sec. 501(c)(2)(B)(iii), (v), amended directory

language of Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi). See 1990

Amendment note below.

Subsec. (b)(4). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii), (v),

amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(vi). See 1990 Amendment note below.

Pub. L. 102-237, Sec. 501(c)(1), struck out ''this chapter''

after ''activities under the Housing Act of 1949'' and substituted

''1949, from'' for ''1949 from''.

Subsec. (b)(4)(A). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii),

redesignated Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), as (v). See

1990 Amendment note below.

Subsec. (b)(4)(B). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii),

redesignated Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), as (v). See

1990 Amendment note below.

Subsec. (b)(5). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii), (v),

amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(vi). See 1990 Amendment note below.

Subsec. (b)(6). Pub. L. 102-237, Sec. 501(c)(2)(B)(ii), (iii),

(v), amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(i), (vi). See 1990 Amendment note below.

Pub. L. 102-237, Sec. 501(c)(2)(A), repealed Pub. L. 101-624,

Sec. 1805(c)(1), (2). See 1990 Amendment note below.

Subsec. (b)(7). Pub. L. 102-237, Sec. 501(c)(2)(B)(ii), (iii),

(v), amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(i), (vi). See 1990 Amendment note below.

Pub. L. 102-237, Sec. 501(c)(2)(A), repealed Pub. L. 101-624,

Sec. 1805(c)(1), (3). See 1990 Amendment note below.

Subsec. (b)(8). Pub. L. 102-237, Sec. 501(c)(2)(B)(ii)-(v),

amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(i), (iv), (vi). See 1990 Amendment note below.

Pub. L. 102-237, Sec. 501(c)(2)(A), repealed Pub. L. 101-624,

Sec. 1805(c)(1), (4). See 1990 Amendment note below.

Subsec. (b)(9). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii), (v),

amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(vi). See 1990 Amendment note below.

Pars. (c) to (g). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii), (v),

amended directory language of Pub. L. 101-624, Sec.

2388(d)(1)(A)(vi). See 1990 Amendment note below.

Par. (h). Pub. L. 102-237, Sec. 501(c)(2)(B)(iii), repealed Pub.

L. 101-624, Sec. 2388(d)(1)(A)(iv). See 1990 Amendment note below.

Pub. L. 102-237, Sec. 501(c)(2)(A), amended Pub. L. 101-624, Sec.

1805(b), and repealed Pub. L. 101-624, Sec. 1805(c)(5). See 1990

Amendment note below.

Pars. (i), (j). Pub. L. 102-237, Sec. 501(c)(2)(A), amended Pub.

L. 101-624, Sec. 1805(b), and repealed Pub. L. 101-624, Sec.

1805(c)(5). See 1990 Amendment note below.

1990 - Pub. L. 101-624, Sec. 2388(d)(1), was amended in its

directory language by Pub. L. 102-237, Sec. 501(c)(2)(B)(i),

resulting in no change in text.

Subsec. (a). Pub. L. 101-624, Sec. 2303(a)(1), 2388(d)(1)(B),

designated first undesignated par. as subsec. (a) and substituted

''In accordance with section 2006a of this title, for purposes of

this chapter, and'' for ''For the purposes of this chapter and'',

and inserted before period at end '', or may assign and transfer

such powers, duties, and assets to the Rural Development

Administration as provided by law for that office''.

Subsec. (b). Pub. L. 101-624, Sec. 2388(d)(1)(B), designated

second undesignated par. beginning ''The Secretary may - '' as

subsec. (b).

Subsec. (b)(1) to (3). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi),

formerly (vii), as redesignated and amended by Pub. L. 102-237,

Sec. 501(c)(2)(B)(iii), (v), redesignated pars. (a) to (c) as (1)

to (3), respectively, of subsec. (b).

Subsec. (b)(4). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), formerly

(vii), as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (v), redesignated par. (d) as (4) of subsec.

(b).

Pub. L. 101-624, Sec. 1805(a)(1)(A), (B), 2303(a)(2), inserted

''or the Rural Development Administration'' after ''Farmers Home

Administration'' in first sentence, substituted '', except for

activities under the Housing Act of 1949'' for ''under any of its

programs, as circumstances may require, to carry out'' in first

sentence, and substituted '', except for debt incurred under the

Housing Act of 1949'' for ''incurred under this chapter'' in third

sentence.

Subsec. (b)(4)(A). Pub. L. 101-624, Sec. 2388(d)(1)(A)(v),

formerly (vi), as redesignated by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), redesignated subpar. (1) as (A).

Pub. L. 101-624, Sec. 1805(a)(1)(C), inserted ''with respect to

farmer program loans,'' before ''on terms''.

Subsec. (b)(4)(B). Pub. L. 101-624, Sec. 2388(d)(1)(A)(v),

formerly (vi), as redesignated by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), redesignated subpar. (2) as (B).

Subsec. (b)(5). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), formerly

(vii), as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (v), redesignated par. (e) as (5) of subsec.

(b).

Pub. L. 101-624, Sec. 1805(a)(2), inserted ''except for

activities conducted under the Housing Act of 1949,'' before

''collect'', struck out ''arising or'' after ''obligations'',

substituted ''by the Farmers Home Administration'' for ''under this

chapter'' before '', or under any'' and ''by the Farmers Home

Administration'' for ''pursuant to this chapter'' before ''and, if

in his''.

Subsec. (b)(6). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), formerly

(vii), as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (v), redesignated par. (f) as (6) of subsec.

(b).

Pub. L. 101-624, Sec. 2388(d)(1)(A)(ii), substituted ''release''

for ''Release''.

Pub. L. 101-624, Sec. 2388(d)(1)(A)(i), as amended by Pub. L.

102-237, Sec. 501(c)(2)(B)(ii), realigned margin.

Pub. L. 101-624, Sec. 1805(c)(1), (2), which made amendments

identical to those by Pub. L. 101-624, Sec. 2388(d)(1)(A)(i), (ii),

was repealed by Pub. L. 102-237, Sec. 501(c)(2)(A).

Subsec. (b)(7). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), formerly

(vii), as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (v), redesignated par. (g) as (7) of subsec.

(b).

Pub. L. 101-624, Sec. 2388(d)(1)(A)(iii), substituted ''obtain''

for ''Obtain''.

Pub. L. 101-624, Sec. 2388(d)(1)(A)(i), as amended by Pub. L.

102-237, Sec. 501(c)(2)(B)(ii), realigned margin.

Pub. L. 101-624, Sec. 1805(c)(1), (3), which made amendments

identical to those by Pub. L. 101-624, Sec. 2388(d)(1)(A)(i),

(iii), was repealed by Pub. L. 102-237, Sec. 501(c)(2)(A).

Subsec. (b)(8). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), formerly

(vii), as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (v), redesignated par. (h) (par. (i) prior to

redesignation by Pub. L. 101-624, Sec. 1805(b), as amended) as (8)

of subsec. (b).

Pub. L. 101-624, Sec. 2388(d)(1)(A)(iv)(II), formerly (v)(II), as

redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (iv), redesignated former subpars. (1) and (2)

as (A) and (B), respectively.

Pub. L. 101-624, Sec. 2303(a)(3), inserted ''Rural Development

Administration under this chapter or by the'' before ''Farmers Home

Administration''.

Pub. L. 101-624, Sec. 1806, inserted before semicolon at end '',

and shall document the consent of the Secretary for the transfer of

the property of a borrower in the file of the borrower''.

Pub. L. 101-624, Sec. 2388(d)(1)(A)(i), (iv)(I), formerly (v)(I),

as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(ii)-(iv), realigned margin and substituted ''consent''

for ''Consent''.

Pub. L. 101-624, Sec. 1805(c)(1), (4), which made amendments

identical to those by Pub. L. 101-624, Sec. 2388(d)(1)(A)(i),

(iv)(I), was repealed by Pub. L. 102-237, Sec. 501(c)(2)(A).

Subsec. (b)(9). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi), formerly

(vii), as redesignated and amended by Pub. L. 102-237, Sec.

501(c)(2)(B)(iii), (v), redesignated par. (i) (par. (j) prior to

redesignation by Pub. L. 101-624, Sec. 1805(b), as amended) as (9)

of subsec. (b).

Pars. (c) to (g). Pub. L. 101-624, Sec. 2388(d)(1)(A)(vi),

formerly (vii), (B), as redesignated and amended by Pub. L.

102-237, Sec. 501(c)(2)(B)(iii), (v), redesignated former pars. (c)

to (g) as (3) to (7), respectively, of subsec. (b). See above.

Par. (h). Pub. L. 101-624, Sec. 2388(d)(1)(A)(iv), which directed

substitution of ''not'' for ''Not'' before ''require'', was

repealed by Pub. L. 102-237, Sec. 501(c)(2)(B)(iii).

Pub. L. 101-624, Sec. 1805(c)(5), which redesignated par. (i) as

(h), was repealed by Pub. L. 102-237, Sec. 501(c)(2)(A).

Pub. L. 101-624, Sec. 1805(b), as amended by Pub. L. 102-237,

Sec. 501(c)(2)(A), redesignated par. (i) as (h) and struck out par.

(h) which read as follows: ''Not require borrowers to pay interest

accrued after December 31, 1972, on interest which is not more than

90 days overdue on any loan held or insured by the Farmers Home

Administration;''.

Pars. (i), (j). Pub. L. 101-624, Sec. 1805(c)(5), which

redesignated pars. (i) and (j) as (h) and (i), respectively, was

repealed by Pub. L. 102-237, Sec. 501(c)(2)(A).

Pub. L. 101-624, Sec. 1805(b), as amended by Pub. L. 102-237,

Sec. 501(c)(2)(A), redesignated pars. (i) and (j) as (h) and (i),

respectively. Pars. (h) and (i) subsequently redesignated pars.

(8) and (9) of subsec. (b). See above.

1988 - Par. (d). Pub. L. 100-233 inserted ''or debts'' before

''claims'', and inserted ''The Secretary may not require

liquidation of property securing any farmer program loan or

acceleration of any payment required under any farmer program loan

as a prerequisite to initiating an action authorized under this

subsection.''

1985 - Par. (d). Pub. L. 99-198, Sec. 1309, in amending par. (d)

generally, substituted provisions authorizing the Secretary to

compromise, adjust, reduce, or charge-off claims, and adjust,

modify, subordinate, or release the terms of security instruments,

leases, contracts, and agreements entered into or administered by

the Farmers Home Administration to carry out this chapter for

provisions which had authorized the Secretary to compromise,

adjust, or reduce claims, and adjust and modify the terms of

mortgages, leases, contracts and agreements entered into or

administered by the Administration under any of its programs, but

not in the event of claims of $25,000 or more without the approval

of the Administrator, substituted provisions authorizing the

Secretary to release borrowers or others obligated on a debt

incurred under this chapter from personal liability with or without

consideration at the time of the compromise, adjustment, reduction

or charge-off of any claim for provisions authorizing the Secretary

to release from personal liability, with or without payment of any

consideration at the time of adjustment of the claims, borrowers

who transferred the security property to approved applicants, to

other than approved applicants, or for amounts less than the

indebtedness secured thereby, struck out provisions that

compromise, adjustment, or reduction of the claim shall be based on

the value of the security and a determination of the debtor's

reasonable ability to pay considering his other assets and income,

and struck out provisions relating to any claim due and payable for

five years or more and to partial releases and subordination of

mortgages.

1981 - Par. (i). Pub. L. 97-98 designated existing provisions

following ''consent to'' as cl. (2) and added cl. (1).

1978 - Pub. L. 95-334 in par. (a) struck out references to Puerto

Rico and the Virgin Islands, in par. (d) substituted ''$25,000''

for ''$15,000'', and added par. (j).

1972 - Par. (a). Pub. L. 92-419, Sec. 124(1), authorized the

Secretary of Agriculture, until Jan. 1, 1975, to make contracts for

services incident to making, insuring, collecting, and servicing

loans and property as determined by the Secretary to be necessary

for carrying out the purposes of this chapter, and required the

Secretary, prior to June 30, 1974, to report to Congress through

the President on the experience in using such contracts, together

with recommendations for such legislation as he may see fit.

Pars. (d) to (i). Pub. L. 92-419, Sec. 124(2), substituted a

semicolon for a period at end of lettered pars. (d), (e) and (f)

and added pars. (g) to (i).

1968 - Par. (f). Pub. L. 90-488 added par. (f).

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-171, title V, Sec. 5304(b), May 13, 2002, 116 Stat.

345, provided that: ''The amendment made by subsection (a)

(amending this section) shall not apply to a contract entered into

before the effective date of this Act (May 13, 2002).''

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by section 501(c) of Pub. L. 102-237 effective as if

included in the provision of the Food, Agriculture, Conservation,

and Trade Act of 1990, Pub. L. 101-624, to which the amendment

relates, and amendment by section 701(h)(1)(E) of Pub. L. 102-237

to any provision specified therein effective as if included in act

that added provision so specified at the time such act became law,

see section 1101(b)(3), (c) of Pub. L. 102-237, set out as a note

under section 1421 of this title.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section

1801 of Pub. L. 97-98, set out as an Effective Date note under

section 4301 of this title.

CONTINUATION OF SMALL FARMER TRAINING AND TECHNICAL ASSISTANCE

PROGRAM

Section 1328 of Pub. L. 99-198 provided that: ''The Secretary of

Agriculture shall, during the period beginning on the date of

enactment of this Act (Dec. 23, 1985) and ending on September 30,

1988, maintain at substantially current levels the small farmer

training and technical assistance program in the office of the

Administrator of the Farmers Home Administration.''

REAMORTIZATION OF DISTRESSED FARMERS HOME ADMINISTRATION LOANS FROM

REVENUES FROM SOFTWOOD TIMBER CROP PLANTINGS ON MARGINAL LAND

Pub. L. 98-258, title VI, Sec. 608, Apr. 10, 1984, 98 Stat. 140,

as amended by Pub. L. 99-198, title XII, Sec. 1254, Dec. 23, 1985,

99 Stat. 1517, provided that:

''(a)(1) Notwithstanding any other provision of law, the

Secretary of Agriculture (hereinafter in this section referred to

as the 'Secretary') may implement a program, pursuant to the

recommendations contained in the study mandated by section 608 of

the Agricultural Programs Adjustment Act of 1984 (7 U.S.C. 1421

(1981) note), under which a distressed loan (as determined by the

Secretary) made or insured under the Consolidated Farm and Rural

Development Act (7 U.S.C. 1921 et seq.), or a portion thereof, may

be reamortized with the use of future revenue produced from the

planting of softwood timber crops on marginal land (as determined

by the Secretary) that -

''(A) was previously used to produce an agricultural commodity

or as pasture; and

''(B) secures a loan made or insured under such Act.

''(2) Accrued interest on a loan reamortized under this section

may be capitalized and interest charged on such interest.

''(3) All or a portion of the payments on such reamortized loan

may be deferred until such softwood timber crop produces revenue or

for a term of 45 years, whichever comes first.

''(4) Repayment of such reamortized loan shall be made not later

than 50 years after the date of reamortization.

''(b) The interest rate on such reamortized loans shall be

determined by the Secretary, but not in excess of the current

average yield on outstanding marketable obligations of the United

States with periods to maturity comparable to the average

maturities of such loans, plus not to exceed 1 percent, as

determined by the Secretary and adjusted to the nearest one-eighth

of 1 percent.

''(c) To be eligible for such program -

''(1) the borrower of such reamortized loan must place not less

than 50 acres of such land in softwood timber production;

''(2) such land (including timber) may not have any lien

against such land other than a lien for -

''(A) a loan made or insured under the Consolidated Farm and

Rural Development Act (7 U.S.C. 1921 et seq.) to secure such

reamortized loan; or

''(B) a loan made under this section, at the time of

reamortization or thereafter, that is subject to a lien on such

land (including timber) in favor of the Secretary; and

''(3) the total amount of loans secured by such land (including

timber) may not exceed $1,000 per acre.

''(d)(1) To assist such borrowers to place such land in softwood

timber production, the Secretary may make loans to such borrowers

for such purpose in an aggregate amount not to exceed the actual

cost of tree planting for land placed in the program.

''(2) Any such loan shall be secured by the land (including

timber) on which the trees are planted.

''(3) Such loans shall be made on the same terms and conditions

as are provided in this section for reamortized loans.

''(e) The Secretary shall issue such rules as are necessary to

carry out this section, including rules prescribing terms and

conditions for -

''(1) reamortizing and making loans under this section;

''(2) entering into security instruments and agreements under

this section; and

''(3) management and harvesting practices of the timber crop.

''(f) There are authorized to be appropriated such sums as are

necessary to carry out this section.

''(g) No more than 50,000 acres may be placed in such program.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1991, 2005 of this title.

-CITE-

7 USC Sec. 1981a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981a. Loan moratorium and policy on foreclosures

-STATUTE-

In addition to any other authority that the Secretary may have to

defer principal and interest and forego foreclosure, the Secretary

may permit, at the request of the borrower, the deferral of

principal and interest on any outstanding loan made, insured, or

held by the Secretary under this chapter, or under the provisions

of any other law administered by the Farmers Home Administration or

by the Rural Development Administration, and may forego foreclosure

of any such loan, for such period as the Secretary deems necessary

upon a showing by the borrower that due to circumstances beyond the

borrower's control, the borrower is temporarily unable to continue

making payments of such principal and interest when due without

unduly impairing the standard of living of the borrower. The

Secretary may permit interest that accrues during the deferral

period on any loan deferred under this section to bear no interest

during or after such period: Provided, That if the security

instrument securing such loan is foreclosed such interest as is

included in the purchase price at such foreclosure shall become

part of the principal and draw interest from the date of

foreclosure at the rate prescribed by law.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331A, as added Pub. L. 95-334,

title I, Sec. 122, Aug. 4, 1978, 92 Stat. 427; amended Pub. L.

101-624, title XXIII, Sec. 2303(b), Nov. 28, 1990, 104 Stat. 3981.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1990 - Pub. L. 101-624 inserted ''or by the Rural Development

Administration'' after ''Farmers Home Administration''.

PRIOR PROVISIONS

Provisions similar to those in this section were contained in the

following appropriation acts:

Pub. L. 102-341, title III, Aug. 14, 1992, 106 Stat. 897.

Pub. L. 102-142, title III, Oct. 28, 1991, 105 Stat. 902.

Pub. L. 101-506, title II, Nov. 5, 1990, 104 Stat. 1333.

Pub. L. 101-161, title II, Nov. 21, 1989, 103 Stat. 969.

Pub. L. 100-460, title II, Oct. 1, 1988, 102 Stat. 2246.

Pub. L. 100-202, Sec. 101(k) (title II), Dec. 22, 1987, 101 Stat.

1329-322, 1329-340.

Pub. L. 99-500, Sec. 101(a) (title II), Oct. 18, 1986, 100 Stat.

1783, 1783-16, and Pub. L. 99-591, Sec. 101(a) (title II), Oct. 30,

1986, 100 Stat. 3341, 3341-16.

Pub. L. 99-190, Sec. 101(a) (H.R. 3037, title II), Dec. 19, 1985,

99 Stat. 1185.

Pub. L. 98-473, title I, Sec. 101(a) (H.R. 5743, title II), Oct.

12, 1984, 98 Stat. 1837.

Pub. L. 98-151, Sec. 101(d) (H.R. 3223, title II), Nov. 14, 1983,

97 Stat. 972.

Pub. L. 97-370, title II, Dec. 18, 1982, 96 Stat. 1800.

FORBEARANCE AND RESTRUCTURING FOR FARM LOANS

Pub. L. 100-387, title III, Sec. 313(a), Aug. 11, 1988, 102 Stat.

949, provided that: ''It is the sense of Congress that the

Secretary of Agriculture should, with respect to farmers and

ranchers who suffer major losses due to drought, hail, excessive

moisture, or related condition in 1988 -

''(1) exercise forbearance in the collection of interest and

principal on direct farmer program loans under the Consolidated

Farm and Rural Development Act (7 U.S.C. 1921 et seq.)

outstanding for such farmers and ranchers;

''(2) expedite the use of credit restructuring and other credit

relief mechanisms authorized under the Agricultural Credit Act of

1987 (Pub. L. 100-233, Jan. 6, 1988, 101 Stat. 1568, see Tables

for classification) and similar provisions of law for such

farmers and ranchers; and

''(3) encourage commercial lenders participating in guaranteed

farmer lending programs under the Consolidated Farm and Rural

Development Act to exercise forbearance before declaring loans to

such farmers and ranchers under such programs in default.''

-CITE-

7 USC Sec. 1981b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981b. Farm loan interest rates

-STATUTE-

Any loan for farm ownership purposes under subchapter I of this

chapter, farm operating purposes under subchapter II of this

chapter, or disaster emergency purposes under subchapter III of

this chapter, other than a guaranteed loan, that is deferred,

consolidated, rescheduled, or reamortized under this chapter shall,

notwithstanding any other provision of this chapter, bear interest

on the balance of the original loan and for the term of the

original loan at a rate that is the lowest of -

(1) the rate of interest on the original loan;

(2) the rate being charged by the Secretary for loans, other

than guaranteed loans, of the same type at the time at which the

borrower applies for a deferral, consolidation, rescheduling, or

reamortization; or

(3) the rate being charged by the Secretary for loans, other

than guaranteed loans, of the same type at the time of the

deferral, consolidation, rescheduling, or reamortization.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331B, as added Pub. L. 98-258,

title VI, Sec. 605, Apr. 10, 1984, 98 Stat. 139; amended Pub. L.

107-171, title V, Sec. 5305, May 13, 2002, 116 Stat. 345.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Pub. L. 107-171 substituted ''lowest of - '' for ''lower

of'', realigned margins for pars., substituted ''original loan;''

for ''original loan or (2) the'', added par. (2), and redesignated

former par. (2) as (3).

ADJUSTMENT OF INTEREST RATES

Pub. L. 100-71, title I, July 11, 1987, 101 Stat. 428, provided

that: ''The Secretary may adjust interest rates on existing

nonsubsidized loans if he determines such interest rates are

excessive in relation to prevailing commercial rates for comparable

loans: Provided, That such rate adjustments shall constitute a

change in the loan agreement and not a new loan.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1946 of this title.

-CITE-

7 USC Sec. 1981c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981c. Oil and gas royalty payments on loans

-STATUTE-

(a) The Secretary shall permit a borrower of a loan made or

insured under this chapter to make a prospective payment on such

loan with proceeds from -

(1) the leasing of oil, gas, or other mineral rights to real

property used to secure such loan; or

(2) the sale of oil, gas, or other minerals removed from real

property used to secure such loan, if the value of the rights to

such oil, gas, or other minerals has not been used to secure such

loan.

(b) Subsection (a) of this section shall not apply to a borrower

of a loan made or insured under this chapter with respect to which

a liquidation or foreclosure proceeding is pending on December 23,

1985.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331C, as added Pub. L. 99-198,

title XIII, Sec. 1310(a), Dec. 23, 1985, 99 Stat. 1523.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-CITE-

7 USC Sec. 1981d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981d. Notice of loan service programs

-STATUTE-

(a) Requirement

The Secretary shall provide notice by certified mail to each

borrower who is at least 90 days past due on the payment of

principal or interest on a loan made or insured under this chapter.

(b) Contents

The notice required under subsection (a) of this section shall -

(1) include a summary of all primary loan service programs,

preservation loan service programs, debt settlement programs, and

appeal procedures, including the eligibility criteria, and terms

and conditions of such programs and procedures;

(2) include a summary of the manner in which the borrower may

apply, and be considered, for all such programs, except that the

Secretary shall not require the borrower to select among such

programs or waive any right in order to be considered for any

program carried out by the Secretary;

(3) advise the borrower regarding all filing requirements and

any deadlines that must be met for requesting loan servicing;

(4) provide any relevant forms, including applicable response

forms;

(5) advise the borrower that a copy of regulations is available

on request; and

(6) be designed to be readable and understandable by the

borrower.

(c) Contained in regulations

All notices required by this section shall be contained in the

regulations implementing this chapter.

(d) Timing

The notice described in subsection (b) of this section shall be

provided -

(1) at the time an application is made for participation in a

loan service program;

(2) on written request of the borrower; and

(3) before the earliest of -

(A) initiating any liquidation;

(B) requesting the conveyance of security property;

(C) accelerating the loan;

(D) repossessing property;

(E) foreclosing on property; or

(F) taking any other collection action.

(e) Consideration of borrowers for loan service programs

The Secretary shall consider a farmer program borrower for all

loan service programs if, within 60 days after receipt of the

notice required in this section or, in extraordinary circumstances

as determined by the applicable State director, after the 60-day

period, the borrower requests such consideration in writing. In

considering a borrower for loan service programs, the Secretary

shall place the highest priority on the preservation of the

borrower's farming operations.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331D, as added Pub. L. 100-233,

title VI, Sec. 605, Jan. 6, 1988, 101 Stat. 1666; amended Pub. L.

101-624, title XVIII, Sec. 1807, Nov. 28, 1990, 104 Stat. 3819;

Pub. L. 102-554, Sec. 10, Oct. 28, 1992, 106 Stat. 4151; Pub. L.

104-127, title VI, Sec. 633, Apr. 4, 1996, 110 Stat. 1092.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a)

and (c), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1996 - Subsec. (a). Pub. L. 104-127 substituted ''90 days past

due on'' for ''180 days delinquent in''.

1992 - Subsec. (e). Pub. L. 102-554, which directed the insertion

of ''or, in extraordinary circumstances as determined by the

applicable State director, after the 60-day period'' after ''not

later than 60 days after receipt of the notice required in this

section'', was executed by making the insertion after ''within 60

days after receipt of the notice required in this section'' to

reflect the probable intent of Congress.

1990 - Subsec. (b)(1). Pub. L. 101-624, Sec. 1807(1), inserted

''debt settlement programs,'' after ''preservation loan service

programs''.

Subsec. (e). Pub. L. 101-624, Sec. 1807(2), substituted ''60

days'' for ''45 days''.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-127 effective 90 days after Apr. 4,

1996, see section 663(b) of Pub. L. 104-127, set out as a note

under section 1922 of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 1807(1) of Pub. L. 101-624 effective 120

days after Nov. 28, 1990, see section 1861(b) of Pub. L. 101-624,

set out as a note under section 2001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1991, 2008g of this

title.

-CITE-

7 USC Sec. 1981e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981e. Planting and production history guidelines

-STATUTE-

(a) In general

The Secretary shall ensure that appropriate procedures, including

to the extent practicable onsite inspections, or use of county or

State yield averages, are used in calculating future yields for an

applicant for a loan, when an accurate projection cannot be made

because the applicant's past production history has been affected

by natural disasters declared under the Robert T. Stafford Disaster

Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).

(b) Calculation of yields

(1) In general

For purposes of averaging past yields of the farm of a borrower

or applicant over a period of crop years to calculate future

yields for the farm under this chapter (except for loans under

subchapter III of this chapter), the Secretary shall permit the

borrower or applicant to exclude the crop year with the lowest

actual or county average yield for the farm from the calculation,

if the borrower or applicant was affected by a disaster during at

least 2 of the crop years during the period.

(2) Affected by a disaster

For purposes of paragraph (1), a borrower or applicant was

affected by a disaster if the Secretary finds that the borrower

or applicant's farming operations have been substantially

affected by a natural disaster in the United States or by a major

disaster or emergency designated by the President under the

Robert T. Stafford Disaster Relief and Emergency Assistance Act

(42 U.S.C. 5121 et seq.), including a borrower or applicant who

has a qualifying loss but is not located in a designated or

declared disaster area.

(3) Application of subsection

Paragraph (1) shall apply to all actions taken by the Secretary

to carry out this chapter (except for loans under subchapter III

of this chapter) that involve the yields of a farm of a borrower

or applicant, including making loans and loan guarantees,

servicing loans, and making credit sales.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331E, as added Pub. L. 100-233,

title VI, Sec. 606, Jan. 6, 1988, 101 Stat. 1667; amended Pub. L.

102-237, title V, Sec. 501(d)(1), Dec. 13, 1991, 105 Stat. 1866;

Pub. L. 102-552, title V, Sec. 516(g)(1), Oct. 28, 1992, 106 Stat.

4138.)

-REFTEXT-

REFERENCES IN TEXT

The Robert T. Stafford Disaster Relief and Emergency Assistance

Act, referred to in subsecs. (a) and (b)(2), is Pub. L. 93-288, May

22, 1974, 88 Stat. 143, as amended, which is classified principally

to chapter 68 (Sec. 5121 et seq.) of Title 42, The Public Health

and Welfare. For complete classification of this Act to the Code,

see Short Title note set out under section 5121 of Title 42 and

Tables.

For definition of ''this chapter'', referred to in subsec.

(b)(1), (3), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1992 - Subsec. (a). Pub. L. 102-552, Sec. 516(g)(1)(A),

substituted ''Robert T. Stafford Disaster Relief and Emergency

Assistance Act (42 U.S.C. 5121 et seq.)'' for ''Disaster Relief Act

of 1974''.

Subsec. (b)(2). Pub. L. 102-552, Sec. 516(g)(1)(B), inserted

''Robert T. Stafford'' before ''Disaster Relief''.

1991 - Pub. L. 102-237 designated existing provisions as subsec.

(a), inserted heading, and added subsec. (b).

EFFECTIVE DATE OF 1992 AMENDMENT

Section 516(g)(2) of Pub. L. 102-552 provided that: ''The

amendments made by paragraph (1) of this subsection (amending this

section) shall take effect immediately after section 501(d) of the

Food, Agriculture, Conservation, and Trade Act Amendments of 1991

(Public Law 102-237; 105 Stat. 1866) (amending this section and

enacting provisions set out below) took effect.''

EFFECTIVE DATE OF 1991 AMENDMENT

Section 501(d)(3) of Pub. L. 102-237 provided that:

''(A) In general. - Except as provided in subparagraph (B), the

amendment made by paragraph (1) (amending this section) shall

become effective on the date of publication of the interim

regulations issued pursuant to paragraph (2)(A) (set out below).

''(B) Exception. - The amendment made by paragraph (1) shall

apply to each primary loan servicing application submitted on or

after the date of enactment of this Act (Dec. 13, 1991).''

REGULATIONS

Section 501(d)(2) of Pub. L. 102-237 provided that:

''(A) Interim regulations. - Notwithstanding section 553 of title

5, United States Code, as soon as practicable after the date of

enactment of this Act (Dec. 13, 1991) and without a requirement for

prior public notice and comment, the Secretary of Agriculture shall

issue interim regulations that provide for the implementation of

the amendment made by paragraph (1) (amending this section)

beginning in crop year 1992.

''(B) Final regulations. - The Secretary of Agriculture shall

provide for public notice and comment before the issuance of final

regulations to implement the amendment made by paragraph (1).''

-CITE-

7 USC Sec. 1981f 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1981f. Underwriting forms and standards

-STATUTE-

In the administration of this chapter, the Secretary shall, to

the extent practicable, use underwriting forms, standards,

practices, and terminology similar to the forms, standards,

practices, and terminology used by lenders in the private sector.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 331F, as added Pub. L. 101-624,

title XVIII, Sec. 1808(a), Nov. 28, 1990, 104 Stat. 3820.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

REGULATIONS

Section 1808(b) of Pub. L. 101-624 provided that: ''The Secretary

of Agriculture shall not issue final regulations providing for the

use of ratios and standards for determining the degree of potential

loan risk under section 331F of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1981f) (as added by subsection (a) of

this section), prior to the submission of the study and report on

the effects of the regulations required by section 621 of the

Agricultural Credit Act of 1987 (7 U.S.C. 1989 note).''

-CITE-

7 USC Sec. 1982 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1982. Repealed. Pub. L. 103-354, title II, Sec. 227(b)(1),

Oct. 13, 1994, 108 Stat. 3218

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 332, Aug. 8, 1961, 75

Stat. 314; Pub. L. 99-198, title XIII, Sec. 1311, Dec. 23, 1985, 99

Stat. 1524; Pub. L. 100-233, title VI, Sec. 607, Jan. 6, 1988, 101

Stat. 1667; Pub. L. 101-624, title XVIII, Sec. 1809, Nov. 28, 1990,

104 Stat. 3820; Pub. L. 102-554, Sec. 11, Oct. 28, 1992, 106 Stat.

4151, related to county committees.

-CITE-

7 USC Sec. 1983 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1983. Special conditions and limitations on loans

-STATUTE-

In connection with loans made or insured under this chapter, the

Secretary shall require -

(1) the applicant (A) to certify in writing, and the Secretary

shall determine, that he is unable to obtain sufficient credit

elsewhere to finance his actual needs at reasonable rates and

terms, taking into consideration prevailing private and

cooperative rates and terms in the community in or near which the

applicant resides for loans for similar purposes and periods of

time, and (B) to furnish an appropriate written financial

statement;

(2) except with respect to a loan under section 1926, 1932, or

1944 of this title -

(A) an annual review of the credit history and business

operation of the borrower; and

(B) an annual review of the continued eligibility of the

borrower for the loan;

(3) except for guaranteed loans, an agreement by the borrower

that if at any time it shall appear to the Secretary that the

borrower may be able to obtain a loan from a production credit

association, a Federal land bank, or other responsible

cooperative or private credit source (or, in the case of a

borrower under section 1934 of this title, the borrower may be

able to obtain a loan under section 1922 of this title), at

reasonable rates and terms for loans for similar purposes and

periods of time, the borrower will, upon request by the

Secretary, apply for and accept such loan in sufficient amount to

repay the Secretary or the insured lender, or both, and to pay

for any stock necessary to be purchased in a cooperative lending

agency in connection with such loan;

(4) such provision for supervision of the borrower's operations

as the Secretary shall deem necessary to achieve the objectives

of the loan and protect the interests of the United States; and

(5) the application of a person who is a veteran of any war, as

defined in section 101(12) of title 38, for a loan under

subchapter I or II of this chapter to be given preference over a

similar application from a person who is not a veteran of any

war, if the applications are on file in a county or area office

at the same time.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 333, Aug. 8, 1961, 75 Stat. 314;

Pub. L. 90-488, Sec. 12, Aug. 15, 1968, 82 Stat. 771; Pub. L.

91-620, Sec. 3, Dec. 31, 1970, 84 Stat. 1862; Pub. L. 92-419, title

I, Sec. 118(b), 125, 126, Aug. 30, 1972, 86 Stat. 664, 666; Pub. L.

95-334, title I, Sec. 123, Aug. 4, 1978, 92 Stat. 428; Pub. L.

96-438, Sec. 3(c), Oct. 13, 1980, 94 Stat. 1875; Pub. L. 97-98,

title XVI, Sec. 1604, Dec. 22, 1981, 95 Stat. 1346; Pub. L.

101-624, title XVIII, Sec. 1810, title XXIII, Sec. 2388(e), Nov.

28, 1990, 104 Stat. 3820, 4053; Pub. L. 102-237, title V, Sec.

501(e), Dec. 13, 1991, 105 Stat. 1867; Pub. L. 102-554, Sec. 12,

Oct. 28, 1992, 106 Stat. 4151; Pub. L. 103-354, title II, Sec.

227(b)(2), Oct. 13, 1994, 108 Stat. 3218; Pub. L. 104-127, title

VI, Sec. 634, 635(a), 636, Apr. 4, 1996, 110 Stat. 1093; Pub. L.

107-171, title V, Sec. 5306, May 13, 2002, 116 Stat. 345.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in introductory

provisions, see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Par. (2). Pub. L. 107-171 amended par. (2) generally.

Prior to amendment, par. (2) read as follows: ''except with respect

to a loan under section 1926, 1932, or 1944 of this title, the

county or area committee established under section 590h(b)(5)(B) of

title 16 to certify in writing -

''(A) that an annual review of the credit history and business

operation of the borrower has been conducted; and

''(B) that a review of the continued eligibility of the

borrower for the loan has been conducted;''.

1996 - Par. (1)(B). Pub. L. 104-127, Sec. 634, substituted ''an

appropriate written financial statement'' for ''a written statement

showing the applicant's net worth''.

Pars. (2) to (4). Pub. L. 104-127, Sec. 635(a), added par. (2)

and redesignated former pars. (2) and (3) as (3) and (4),

respectively. Former par. (4) redesignated (5).

Par. (5). Pub. L. 104-127, Sec. 636, added par. (5) and struck

out former par. (5) which read as follows: ''the applications of

veterans for loans under subchapter I or II of this chapter to be

given preference over similar applications of nonveterans on file

in any county or area office at the same time. Veterans as used

herein shall mean persons who served in the Armed Forces of the

United States during any war between the United States and any

other nation, during the Korean conflict or the Vietnam era and who

were discharged or released therefrom under conditions other than

dishonorable.''

Pub. L. 104-127, Sec. 635(a)(1), redesignated par. (4) as (5).

1994 - Pars. (2) to (5). Pub. L. 103-354 redesignated pars. (3)

to (5) as (2) to (4), respectively, and struck out former par. (2)

relating to certification by county committee of applicant's

eligibility for loan.

1992 - Par. (2)(A)(iii). Pub. L. 102-554 substituted ''5 years''

for ''2 years''.

1991 - Par. (2)(A). Pub. L. 102-237 redesignated cls. (1) to (3)

as (i) to (iii), respectively.

1990 - Pub. L. 101-624, Sec. 2388(e), redesignated pars. (a) to

(e) as (1) to (5), respectively, and in par. (1) redesignated

subpars. (1) and (2) as (A) and (B), respectively; in par. (2)

redesignated subpars. (1) and (2) as (A) and (B), respectively, and

in subpar. (A) redesignated cls. (A) to (C) as (1) to (3),

respectively; in par. (3) made technical amendments to references

to sections 1934 and 1922 of this title involving original act and

requiring no change in text; and in par. (5) made technical

amendments to reference to subchapter I or II of this chapter

involving original act and requiring no change in text.

Pub. L. 101-624, Sec. 1810, amended par. (b) generally. Prior to

amendment, par. (b) read as follows: ''except for loans under

sections 1926, 1932, 1944 and 1961(a)(2) of this title, the county

committee to certify in writing that the applicant meets the

eligibility requirements for the loan, and has the character,

industry, and ability to carry out the proposed operations, and

will, in the opinion of the committee, honestly endeavor to carry

out his undertakings and obligations; and for loans under section

1961(a)(2) of this title, the Secretary shall require the

recommendation of the county committee as to the making or insuring

of the loan: Provided, That the Secretary may provide a procedure

for appeal and review of any determination relating to a

certification or recommendation required to be made by the county

committee, and for reversal or modification thereof should the

facts warrant such action;''.

1981 - Par. (a). Pub. L. 97-98 designated existing provisions

after ''the applicant'' as cl. (1), and added cl. (2).

1980 - Par. (b). Pub. L. 96-438 substituted ''section

1961(a)(2)'' for ''section 1961(b)(2)'' in two places.

1978 - Par. (b). Pub. L. 95-334, Sec. 123(1), inserted proviso

relating to appeal and review procedure for any determination

regarding a certification, etc.

Par. (c). Pub. L. 95-334, Sec. 123(2), (3), inserted provisions

excepting guaranteed loans and provisions relating to borrowers

under section 1934 of this title obtaining loans under section 1922

of this title.

1972 - Par. (a). Pub. L. 92-419, Sec. 125, inserted '', and the

Secretary shall determine,'' after ''in writing''.

Par. (b). Pub. L. 92-419, Sec. 118(b), 126, inserted reference to

section 1932 of this title and substituted ''section 1961(b)(2) of

this title'' for ''said sections'', respectively.

1970 - Pub. L. 91-620 included persons who served during the

Vietnam era within the definition of ''Veterans'' in par. (e).

1968 - Par. (b). Pub. L. 90-488 struck out ''farming'' from

phrase ''proposed farming operations''.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(3) of Pub. L. 102-237, set out as a note under section 1421

of this title.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section

1801 of Pub. L. 97-98, set out as an Effective Date note under

section 4301 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1932 of this title.

-CITE-

7 USC Sec. 1983a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1983a. Prompt approval of loans and loan guarantees

-STATUTE-

(a) Applications; time for action by Secretary; notice; statement

of reasons

(1) The Secretary shall approve or disapprove an application for

a loan or loan guarantee made under this chapter, and notify the

applicant of such action, not later than 60 days after the

Secretary has received a complete application for such loan or loan

guarantee.

(2)(A) If an application for a loan or loan guarantee under this

chapter (other than under subchapter II of this chapter) is

incomplete, the Secretary shall inform the applicant of the reasons

such application is incomplete not later than 20 days after the

Secretary has received such application.

(B)(i) Not later than 10 calendar days after the Secretary

receives an application for an operating loan or loan guarantee

under subchapter II of this chapter, the Secretary shall notify the

applicant of any information required before a decision may be made

on the application. On receipt of an application, the Secretary

shall request from other parties such information as may be needed

in connection with the application.

(ii) Not later than 15 calendar days after the date an agency of

the Department of Agriculture receives a request for information

made pursuant to clause (i), the agency shall provide the Secretary

with the requested information.

(iii) If, not later than 20 calendar days after the date a

request is made pursuant to clause (i) with respect to an

application, the Secretary has not received the information

requested, the Secretary shall notify the applicant and the

district office of the Farmers Home Administration, in writing, of

the outstanding information.

(iv) A county office shall notify the district office of the

Farmers Home Administration of each application for an operating

loan or loan guarantee under subchapter II of this chapter that is

pending more than 45 days after receipt, and the reasons the

application is pending.

(v) A district office that receives a notice provided under

clause (iv) with respect to an application shall immediately take

steps to ensure that final action is taken on the application not

later than 15 days after the date of the receipt of the notice.

(vi) The district office shall report to the State office of the

Farmers Home Administration on each application for an operating

loan or loan guarantee under subchapter II of this chapter that is

pending more than 45 days after receipt by the county committee,

and the reasons the application is pending.

(vii) Each month, the Secretary shall notify the Committee on

Agriculture of the House of Representatives and the Committee on

Agriculture, Nutrition, and Forestry of the Senate, on a

State-by-State basis, as to each application for an operating loan

or loan guarantee under subchapter II of this chapter on which

final action had not been taken within 60 calendar days after

receipt by the Secretary, and the reasons final action had not been

taken.

(3) If an application for a loan or loan guarantee under this

chapter is disapproved by the Secretary, the Secretary shall state

the reasons for the disapproval in the notice required under

paragraph (1).

(4)(A) Notwithstanding paragraph (1), each application for a loan

or loan guarantee under section 1932(a) of this title, or for a

loan under section 1926(a) of this title, that is to be disapproved

by the Secretary solely because the Secretary lacks the necessary

amount of funds to make the loan or guarantee shall not be

disapproved but shall be placed in pending status.

(B) The Secretary shall retain the pending application and

reconsider the application beginning on the date that sufficient

funds become available.

(C) Not later than 60 days after funds become available regarding

each pending application, the Secretary shall notify the applicant

of the approval or disapproval of funding for the application.

(b) Loan proceeds; time for receipt

(1) Except as provided in paragraph (2), if an application for an

insured loan under this chapter is approved by the Secretary, the

Secretary shall provide the loan proceeds to the applicant not

later than 15 days (or such longer period as the applicant may

approve) after the application for the loan is approved by the

Secretary.

(2) If the Secretary is unable to provide the loan proceeds to

the applicant within such 15-day period because sufficient funds

are not available to the Secretary for such purpose, the Secretary

shall provide the loan proceeds to the applicant as soon as

practicable (but in no event later than 15 days unless the

applicant agrees to a longer period) after sufficient funds for

such purpose become available to the Secretary.

(c) Reconsideration of applications; time for action by Secretary

If an application for a loan or loan guarantee under this chapter

is disapproved by the Secretary, but such action is subsequently

reversed or revised as the result of an appeal within the

Department of Agriculture or to the courts of the United States and

the application is returned to the Secretary for further

consideration, the Secretary shall act on the application and

provide the applicant with notice of the action within 15 days

after return of the application to the Secretary.

(d) Approved lender designation applications; time for decision by

Secretary

In carrying out the approved lender program established by

exhibit A to subpart B of part 1980 of title 7, Code of Federal

Regulations, the Secretary shall ensure that each request of a

lending institution for designation as an approved lender under

such program is reviewed, and a decision made on the application,

not later than 15 days after the Secretary has received a complete

application for such designation.

(e) Processing loan applications; personnel and other resources

made available; use of authorities of law

(1) As soon as practicable after December 23, 1985, the Secretary

shall take such steps as are necessary to make personnel, including

the payment of overtime for such personnel, and other resources of

the Department of Agriculture available to the Farmers Home

Administration as are sufficient to enable the Farmers Home

Administration to expeditiously process loan applications that are

submitted by farmers and ranchers.

(2) In carrying out paragraph (1), the Secretary may use any

authority of law provided to the Secretary, including -

(A) the Agricultural Credit Insurance Fund established under

section 1929 of this title; and

(B) the employment procedures used in connection with the

emergency loan program established under subchapter III of this

chapter.

(f) Graduation of seasoned direct loan borrowers to loan guarantee

program

(1) As used in this subsection:

(A) The term ''approved lender'' means a lender approved prior

to October 28, 1992, by the Secretary under the approved lender

program established by exhibit A to subpart B of part 1980 of

title 7, Code of Federal Regulations (as in effect on January 1,

1991), or a lender certified under section 1989 (FOOTNOTE 1) of

this title.

(FOOTNOTE 1) See References in Text note below.

(B) The term ''seasoned direct loan borrower'' means a borrower

receiving a direct loan under this chapter who has been

classified as ''commercial'' or ''standard'' under subpart W of

part 2006 of the Instruction Manual (as in effect on January 1,

1991).

(2) The Secretary, or a contracting third party, shall annually

review under section 2006b of this title the loans of each seasoned

loan borrower. If, based on the review, it is determined that a

borrower would be able to obtain a loan, guaranteed by the

Secretary, from a commercial or cooperative lender at reasonable

rates and terms for loans for similar purposes and periods of time,

the Secretary shall assist the borrower in applying for the

commercial or cooperative loan.

(3) In accordance with section 2006d of this title, the Secretary

shall prepare a prospectus on each seasoned direct loan borrower

determined eligible to obtain a guaranteed loan. The prospectus

shall contain a description of the amounts of loan guarantee and

interest assistance that the Secretary will provide to the seasoned

direct loan borrower to enable the seasoned direct loan borrower to

carry out a financially viable farming plan if a guaranteed loan is

made.

(4) Verification. -

(A) In general. - The Secretary shall provide a prospectus of a

seasoned direct loan borrower to each approved lender whose

lending area includes the location of the seasoned direct loan

borrower.

(B) Notification. - The Secretary shall notify each borrower of

a loan that a prospectus has been provided to a lender under

subparagraph (A).

(C) Credit extended. - If the Secretary receives an offer from

an approved lender to extend credit to the seasoned direct loan

borrower under terms and conditions contained in the prospectus,

the seasoned direct loan borrower shall not be eligible for an

insured loan from the Secretary under subchapter I or II of this

chapter, except as otherwise provided in this subsection.

(5) If the Secretary is unable to provide loan guarantees and, if

necessary, interest assistance to the seasoned direct loan borrower

under this subsection in amounts sufficient to enable the seasoned

direct loan borrower to borrow from commercial sources the amount

required to carry out a financially viable farming plan, or if the

Secretary does not receive an offer from an approved lender to

extend credit to a seasoned direct loan borrower under the terms

and conditions contained in the prospectus, the Secretary shall

make an insured loan to the seasoned direct loan borrower under

subchapter I or II of this chapter, whichever is applicable.

(6) To the extent necessary for the borrower to obtain a loan,

guaranteed by the Secretary, from a commercial or cooperative

lender, the Secretary shall provide interest rate reductions as

provided for under section 1999 of this title.

(g) Simplified application forms for loan guarantees

(1) In general

The Secretary shall provide to lenders a short, simplified

application form for guarantees under this chapter of -

(A) farmer program loans the principal amount of which is

$125,000 or less; and

(B) business and industry guaranteed loans under section

1932(a)(1) of this title the principal amount of which is -

(i) in the case of a loan guarantee made during fiscal year

2002 or 2003, $400,000 or less; and

(ii) in the case of a loan guarantee made during any

subsequent fiscal year -

(I) $400,000 or less; or

(II) if the Secretary determines that there is not a

significant increased risk of a default on the loan,

$600,000 or less.

(2) Water and waste disposal grants and loans

The Secretary shall develop an application process that

accelerates, to the maximum extent practicable, the processing of

applications for water and waste disposal grants or direct or

guaranteed loans under paragraph (1) or (2) of section 1926(a) of

this title the grant award amount or principal loan amount,

respectively, of which is $300,000 or less.

(3) Administration

In developing an application under this subsection, the

Secretary shall -

(A) consult with commercial and cooperative lenders; and

(B) ensure that -

(i) the form can be completed manually or electronically,

at the option of the lender;

(ii) the form minimizes the documentation required to

accompany the form;

(iii) the cost of completing and processing the form is

minimal; and

(iv) the form can be completed and processed in an

expeditious manner.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 333A, as added Pub. L. 99-198,

title XIII, Sec. 1312(a), Dec. 23, 1985, 99 Stat. 1524; amended

Pub. L. 101-624, title XVIII, Sec. 1811, title XXIII, Sec. 2388(f),

Nov. 28, 1990, 104 Stat. 3821, 4053; Pub. L. 102-554, Sec. 13-15,

Oct. 28, 1992, 106 Stat. 4152, 4153; Pub. L. 104-127, title VI,

Sec. 637, Apr. 4, 1996, 110 Stat. 1093; Pub. L. 107-171, title V,

Sec. 5307, title VI, Sec. 6019, May 13, 2002, 116 Stat. 345, 362.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a),

(b)(1), (c), (f)(1)(B), and (g)(1), see note set out under section

1921 of this title.

Section 1989 of this title, referred to in subsec. (f)(1)(A), was

in the original ''section 114'', and was translated as meaning

section 339 of Pub. L. 87-128, which is classified to section 1989

of this title, to reflect the probable intent of Congress, because

Pub. L. 87-128 does not contain a section 114 and section 1989

provides for a lender certification program.

-MISC2-

AMENDMENTS

2002 - Subsec. (g). Pub. L. 107-171, Sec. 6019, added subsec. (g)

and struck out former subsec. (g) which read as follows:

''(1) The Secretary shall provide to lenders a short, simplified

application form for guarantees under this chapter of loans the

principal amount of which is $125,000 or less.

''(2) In developing the application, the Secretary shall -

''(A) consult with commercial and cooperative lenders; and

''(B) ensure that -

''(i) the form can be completed manually or electronically,

at the option of the lender;

''(ii) the form minimizes the documentation required to

accompany the form;

''(iii) the cost of completing and processing the form is

minimal; and

''(iv) the form can be completed and processed in an

expeditious manner.''

Subsec. (g)(1). Pub. L. 107-171, Sec. 5307, substituted

''$125,000'' for ''$50,000''.

1996 - Subsec. (f)(4). Pub. L. 104-127, Sec. 637(1), inserted

heading.

Subsec. (f)(4)(A). Pub. L. 104-127, Sec. 637(1), designated first

sentence of par. (4) as subpar. (A), inserted heading, and directed

the substitution of ''The Secretary shall provide a prospectus of a

seasoned'' for ''With'' and all that follows through ''seasoned'',

which was executed by making the substitution for all that follows

through ''seasoned'' the first place appearing resulting in making

the substitution for ''With the approval of the borrower, the

Secretary shall provide the prospectus of the seasoned'', to

reflect the probable intent of Congress.

Subsec. (f)(4)(B), (C). Pub. L. 104-127, Sec. 637(2), added

subpar. (B), designated second sentence of par. (4) as subpar. (C),

and inserted heading.

1992 - Subsec. (a)(2). Pub. L. 102-554, Sec. 13, designated

existing provisions as subpar. (A), inserted ''(other than under

subchapter II of this chapter)'' after ''under this chapter'', and

added subpar. (B).

Subsec. (f). Pub. L. 102-554, Sec. 14, added subsec. (f).

Subsec. (g). Pub. L. 102-554, Sec. 15, added subsec. (g).

1990 - Subsec. (a)(4). Pub. L. 101-624, Sec. 1811, added par.

(4).

Subsec. (c). Pub. L. 101-624, Sec. 2388(f), substituted ''If''

for ''In''.

EFFECTIVE DATE

Section 1312(b) of Pub. L. 99-198 provided that: ''The amendment

made by subsection (a) (enacting this section) shall be effective

with respect to applications for loans or loan guarantees under the

Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.)

received by the Secretary of Agriculture after the date of

enactment of this Act (Dec. 23, 1985).''

-CITE-

7 USC Sec. 1983b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1983b. Repealed. Pub. L. 103-354, title II, Sec. 281(c), Oct.

13, 1994, 108 Stat. 3233

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 333B, as added Pub. L.

99-198, title XIII, Sec. 1313(a), Dec. 23, 1985, 99 Stat. 1525;

amended Pub. L. 100-233, title VI, Sec. 608, Jan. 6, 1988, 101

Stat. 1667; Pub. L. 101-624, title XVIII, Sec. 1812, Nov. 28, 1990,

104 Stat. 3821, related to appeals from adverse decisions under

Consolidated Farm and Rural Development Act. See section 6991 et

seq. of this title.

-CITE-

7 USC Sec. 1983c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1983c. Provision of information to borrowers

-STATUTE-

(a) In general

On request of a farm borrower of a farmer program loan, the

Secretary shall make available to the borrower the following:

(1) One copy of each document signed by the borrower.

(2) One copy of each appraisal performed with respect to the

loan.

(3) All documents that the Secretary otherwise is required to

provide to the borrower under any law or rule of law in effect on

the date of such request.

(b) Construction of section

Subsection (a) of this section shall not be construed to

supersede any duty imposed on the Secretary by any law or rule of

law in effect immediately before January 6, 1988, unless such duty

is in direct conflict with any duty imposed by subsection (a) of

this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 333C, as added Pub. L. 100-233,

title VI, Sec. 609, Jan. 6, 1988, 101 Stat. 1668.)

-CITE-

7 USC Sec. 1984 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1984. Taxation

-STATUTE-

All property subject to a lien held by the United States or the

title to which is acquired or held by the Secretary under this

chapter other than property used for administrative purposes shall

be subject to taxation by State, territory, district, and local

political subdivisions in the same manner and to the same extent as

other property is taxed: Provided, however, That no tax shall be

imposed or collected on or with respect to any instrument if the

tax is based on -

(1) the value of any notes or mortgages or other lien

instruments held by or transferred to the Secretary;

(2) any notes or lien instruments administered under this

chapter which are made, assigned, or held by a person otherwise

liable for such tax; or

(3) the value of any property conveyed or transferred to the

Secretary,

whether as a tax on the instrument, the privilege of conveying or

transferring or the recordation thereof; nor shall the failure to

pay or collect any such tax be a ground for refusal to record or

file such instruments, or for failure to impart notice, or prevent

the enforcement of its provisions in any State or Federal court.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 334, Aug. 8, 1961, 75 Stat. 315.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 25 section 492.

-CITE-

7 USC Sec. 1985 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1985. Security servicing

-STATUTE-

(a) Preservation and protection of security, lien, or priority of

lien securing loan

The Secretary is authorized and empowered to make advances,

without regard to any loan or total indebtedness limitation, to

preserve and protect the security for or the lien or priority of

the lien securing any loan or other indebtedness owing to, insured

by, or acquired by the Secretary under this chapter or under any

other programs administered by the Farmers Home Administration or

the Rural Development Administration; to bid for and purchase at

any execution, foreclosure, or other sale or otherwise to acquire

property upon which the United States has a lien by reason of a

judgment or execution arising from, or which is pledged, mortgaged,

conveyed, attached, or levied upon to secure the payment of, any

such indebtedness whether or not such property is subject to other

liens, to accept title to any property so purchased or acquired;

and to sell, manage, or otherwise dispose of such property as

hereinafter provided.

(b) Operation or lease of realty

Except as provided in subsections (c) and (e) of this section,

real property administered under the provisions of this chapter may

be operated or leased by the Secretary for such period or periods

as the Secretary may deem necessary to protect the Government's

investment therein.

(c) Sale of property

(1) In general

Subject to this subsection and subsection (e)(1)(A) of this

section, the Secretary shall offer to sell real property that is

acquired by the Secretary under this chapter using the following

order and method of sale:

(A) Advertisement

Not later than 15 days after acquiring real property, the

Secretary shall publicly advertise the property for sale.

(B) Beginning farmer or rancher

(i) In general

Not later than 135 days after acquiring real property, the

Secretary shall offer to sell the property to a qualified

beginning farmer or rancher at current market value based on

a current appraisal.

(ii) Random selection

If more than 1 qualified beginning farmer or rancher offers

to purchase the property, the Secretary shall select between

the qualified applicants on a random basis.

(iii) Appeal of random selection

A random selection or denial by the Secretary of a

beginning farmer or rancher for farm inventory property under

this subparagraph shall be final and not administratively

appealable.

(iv) Combining and dividing of property

To the maximum extent practicable, the Secretary shall

maximize the opportunity for beginning farmers and ranchers

to purchase real property acquired by the Secretary under

this chapter by combining or dividing inventory parcels of

the property in such manner as the Secretary determines to be

appropriate.

(C) Public sale

If no acceptable offer is received from a qualified beginning

farmer or rancher under subparagraph (B) not later than 135

days after acquiring the real property, the Secretary shall,

not later than 30 days after the 135-day period, sell the

property after public notice at a public sale, and, if no

acceptable bid is received, by negotiated sale, at the best

price obtainable.

(2) Previous lease

In the case of real property acquired before April 4, 1996,

that the Secretary leased before April 4, 1996, not later than 60

days after the lease expires, the Secretary shall offer to sell

the property in accordance with paragraph (1).

(3) Interest

(A) In general

Subject to subparagraph (B), any conveyance of real property

under this subsection shall include all of the interest of the

United States in the property, including mineral rights.

(B) Conservation

The Secretary may for conservation purposes grant or sell an

easement, restriction, development right, or similar legal

right to real property to a State, a political subdivision of a

State, or a private nonprofit organization separately from the

underlying fee or other rights to the property owned by the

United States.

(4) Other law

The Federal Property and Administrative Services Act of 1949

(FOOTNOTE 1) shall not apply to any exercise of authority under

this chapter.

(FOOTNOTE 1) See References in Text note below.

(5) Lease of property

(A) In general

Subject to subparagraph (B), the Secretary may not lease any

real property acquired under this chapter.

(B) Exception

(i) Beginning farmer or rancher

The Secretary may lease or contract to sell to a beginning

farmer or rancher a farm or ranch acquired by the Secretary

under this chapter if the beginning farmer or rancher

qualifies for a credit sale or direct farm ownership loan

under subchapter I of this chapter but credit sale authority

for loans or direct farm ownership loan funds, respectively,

are not available.

(ii) Term

The term of a lease or contract to sell to a beginning

farmer or rancher under clause (i) shall be until the earlier

of -

(I) the date that is 18 months after the date of the

lease or sale; or

(II) the date that direct farm ownership loan funds or

credit sale authority for loans becomes available to the

beginning farmer or rancher.

(iii) Income-producing capability

In determining the rental rate on real property leased

under this subparagraph, the Secretary shall consider the

income-producing capability of the property during the term

that the property is leased.

(6) Expedited determination

(A) In general

On the request of an applicant, not later than 30 days after

denial of the applicant's application, the appropriate State

director shall provide an expedited review and determination of

whether the applicant is a beginning farmer or rancher for the

purpose of acquiring farm inventory property.

(B) Appeal

The determination of a State Director under subparagraph (A)

shall be final and not administratively appealable.

(C) Effects of determinations

(i) In general

The Secretary shall maintain statistical data on the number

and results of determinations made under subparagraph (A) and

the effect of the determinations on -

(I) selling farm inventory property to beginning farmers

and ranchers; and

(II) disposing of real property in inventory.

(ii) Notification

The Secretary shall notify the Committee on Agriculture of

the House of Representatives and the Committee on

Agriculture, Nutrition, and Forestry of the Senate if the

Secretary determines that the review process under

subparagraph (A) is adversely affecting the selling of farm

inventory property to beginning farmers or ranchers or the

disposing of real property in inventory.

(d) Easements; condemnations

With respect to any real property administered under this

chapter, the Secretary is authorized to grant or sell easements or

rights-of-way for roads, utilities, and other appurtenances not

inconsistent with the public interest. With respect to any

rights-of-way over land on which the United States has a lien

administered under this chapter, the Secretary may release said

lien upon payment to the United States of adequate consideration,

and the interest of the United States arising under any such lien

may be acquired for highway purposes by any State or political

subdivision thereof in condemnation proceedings under State law by

service by certified mail upon the United States attorney for the

district, the State Director of the Farmers Home Administration for

the State in which the farm is located, and the Attorney General of

the United States: Provided, however, That the United States shall

not be required to appear, answer, or respond to any notice or writ

sooner than ninety days from the time such notice or writ is

returnable or purports to be effective, and the taking or vesting

of title to the interest of the United States shall not become

final under any proceeding, order, or decree until adequate

compensation and damages have been finally determined and paid to

the United States or into the registry of the court.

(e) Real property located within Indian reservation; conservation

practices; adverse effects prohibition

(1)(A)(i) Except as provided in subparagraph (D), if -

(I) the Secretary acquires property under this chapter that is

located within an Indian reservation; and

(II) the borrower-owner is the Indian tribe that has

jurisdiction over the reservation in which the real property is

located or the borrower-owner is a member of such Indian tribe;

the Secretary shall dispose of or administer the property only as

provided for in this subparagraph.

(ii) For purposes of this subparagraph, the term ''Indian

reservation'' means all land located within the limits of any

Indian reservation under the jurisdiction of the United States,

notwithstanding the issuance of any patent, and, including

rights-of-way running through the reservation; trust or restricted

land located within the boundaries of a former reservation of a

federally recognized Indian tribe in the State of Oklahoma; or all

Indian allotments the Indian titles to which have not been

extinguished if such allotments are subject to the jurisdiction of

a federally recognized Indian tribe.

(iii) Not later than 90 days after acquiring the property, the

Secretary shall afford an opportunity to purchase or lease the real

property in accordance with the order of priority established under

clause (iv) by the Indian tribe having jurisdiction over the Indian

reservation within which the real property is located or, if no

order of priority is established by such Indian tribe under clause

(iv), in the following order:

(I) to an Indian member of the Indian tribe that has

jurisdiction over the reservation within which the real property

is located;

(II) to an Indian corporate entity;

(III) to such Indian tribe.

(iv) The governing body of any Indian tribe having jurisdiction

over an Indian reservation may revise the order of priority

provided in clause (iii) under which lands located within such

reservation shall be offered for purchase or lease by the Secretary

under clause (iii) and may restrict the eligibility for such

purchase or lease to -

(I) persons who are members of such Indian tribe,

(II) Indian corporate entities that are authorized by such

Indian tribe to lease or purchase lands within the boundaries of

such reservation, or

(III) such Indian tribe itself.

(v) If real property described in clause (i) is not purchased or

leased under clause (iii) and the Indian tribe having jurisdiction

over the reservation within which the real property is located is

unable to purchase or lease the real property, the Secretary shall

transfer the real property to the Secretary of the Interior who

shall administer the real property as if the real property were

held in trust by the United States for the benefit of such Indian

tribe. From the rental income derived from the lease of the

transferred real property, and all other income generated from the

transferred real property, the Secretary of the Interior shall pay

those State, county, municipal, or other local taxes to which the

transferred real property was subject at the time of acquisition by

the Secretary, until the earlier of -

(I) the expiration of the 4-year period beginning on the date

on which the real property is so transferred, or

(II) such time as the lands are transferred into trust pursuant

to clause (viii).

(vi) At any time any real property is transferred to the

Secretary of the Interior under clause (v), the Secretary of

Agriculture shall be deemed to have no further responsibility under

this Act for collection of any amounts with regard to the farm

program loan which had been secured by such real property, nor with

regard to any lien arising out of such loan transaction, nor for

repayments of any amount with regard to such loan transactions or

liens to the Treasury of the United States, and the Secretary of

the Interior shall be deemed to have succeeded to all right, title

and interest of the Secretary of Agriculture in such real estate

arising from the farm program loan transaction, including the

obligation to remit to the Treasury of the United States, in

repayment of the original loan, those amounts provided in clause

(vii).

(vii) After the payment of any taxes which are required to be

paid under clause (v), all remaining rental income derived from the

lease of the real property transferred to the Secretary of the

Interior under clause (v), and all other income generated from the

real property transferred to the Secretary of the Interior under

clause (v), shall be deposited as miscellaneous receipts in the

Treasury of the United States until the amount deposited is equal

to the lesser of -

(I) the amount of the outstanding lien of the United States

against such real property, as of the date the real property was

acquired by the Secretary;

(II) the fair market value of the real property, as of the date

of the transfer to the Secretary of the Interior; or

(III) the capitalized value of the real property, as of the

date of the transfer to the Secretary of the Interior.

(viii) When the total amount that is required to be deposited

under clause (vii) with respect to any real property has been

deposited into the Treasury of the United States, title to the real

property shall be held in trust by the United States for the

benefit of the Indian tribe having jurisdiction over the Indian

reservation within which the real property is located.

(ix) Notwithstanding any other clause of this subparagraph, the

Indian tribe having jurisdiction over the Indian reservation within

which the real property described in clause (i) is located may, at

any time after the real property has been transferred to the

Secretary of the Interior under clause (v), offer to pay the

remaining amount on the lien, or the fair market value of the real

property, whichever is less. Upon payment of such amount, title to

such real property shall be held by the United States in trust for

the tribe and such trust or restricted lands that have been

acquired by the Secretary under foreclosure or voluntary transfer

under a loan made or insured under this chapter and transferred to

an Indian person, entity, or tribe under the provisions of this

subparagraph shall be deemed to have never lost trust or restricted

status.

(x) This subparagraph shall apply to all lands in the land

inventory established under this chapter (as of November 28, 1990)

that were (immediately prior to November 28, 1990) owned by an

Indian borrower-owner described in clause (i) and that are situated

within an Indian reservation (as defined in clause (ii)),

regardless of the date of foreclosure or acquisition by the

Secretary. The Secretary shall afford an opportunity to a tribal

member, an Indian corporate entity, or the tribe to purchase or

lease the real property as provided in clause (iii). If the right

is not exercised or no expression of intent to exercise such right

is received within 180 days after November 28, 1990, the Secretary

shall transfer the real property to the Secretary of the Interior

as provided in clause (v).

(B) The rights provided in this subsection shall be in addition

to any such right of first refusal under the law of the State in

which the property is located.

(C) As used in this paragraph, the term ''borrower-owner'' means

-

(i) a borrower from whom the Secretary acquired real farm or

ranch property (including the principal residence of the

borrower) used to secure any loan made to the borrower under this

chapter; or

(ii) in any case in which an owner of property pledged the

property to secure the loan and the owner is different than the

borrower, the owner.

(D)(i) If -

(I) the real property described in subparagraph (A)(i) is

located within an Indian reservation;

(II) the borrower-owner is an Indian tribe that has

jurisdiction over the reservation in which the real property is

located or the borrower-owner is a member of an Indian tribe;

(III) the borrower-owner has obtained a loan made, insured, or

guaranteed under this chapter; and

(IV) the borrower-owner and the Secretary have exhausted all of

the procedures provided for in this chapter to permit a

borrower-owner to retain title to the real property, such that it

is necessary for the borrower-owner to relinquish title,

the Secretary shall dispose of or administer the property only as

provided in subparagraph (A), as modified by this subparagraph.

(ii) The Secretary shall provide the borrower-owner of real

property that is described in clause (i) with written notice of -

(I) the right of the borrower-owner to voluntarily convey the

real property to the Secretary; and

(II) the fact that real property so conveyed will be placed in

the inventory of the Secretary.

(iii) The Secretary shall provide the borrower-owner of the real

property with written notice of the rights and protections provided

under this chapter to the borrower-owner, and the Indian tribe that

has jurisdiction over the reservation in which the real property is

located, from foreclosure or liquidation of the real property,

including written notice of -

(I) the provisions of subparagraph (A), this subparagraph, and

subsection (g)(6) (FOOTNOTE 1) of this section;

(II) if the borrower-owner does not voluntarily convey the real

property to the Secretary, that -

(aa) the Secretary may foreclose on the property;

(bb) in the event of foreclosure, the property will be

offered for sale;

(cc) the Secretary must offer a bid for the property that is

equal to the fair market value of the property or the

outstanding principal and interest of the loan, whichever is

higher;

(dd) the property may be purchased by another party; and

(ee) if the property is purchased by another party, the

property will not be placed in the inventory of the Secretary

and the borrower-owner will forfeit the rights and protections

provided under this chapter; and

(III) the opportunity of the borrower-owner to consult with the

Indian tribe that has jurisdiction over the reservation in which

the real property is located or counsel to determine if State or

tribal law provides rights and protections that are more

beneficial than those provided the borrower-owner under this

chapter.

(iv)(I) Except as provided in subclause (II), the Secretary shall

accept the voluntary conveyance of real property described in

clause (i).

(II) If a hazardous substance (as defined in section 9601(14) of

title 42) is located on the property and the Secretary takes

remedial action to protect human health or the environment if the

property is taken into inventory, the Secretary shall accept the

voluntary conveyance of the property only if the Secretary

determines that it is in the best interests of the Federal

Government.

(v) Foreclosure procedures. -

(I) Notice to borrower. - If an Indian borrower-owner does not

voluntarily convey to the Secretary real property described in

clause (i), not less than 30 days before a foreclosure sale of

the property, the Secretary shall provide the Indian

borrower-owner with the option of -

(aa) requiring the Secretary to assign the loan and security

instruments to the Secretary of the Interior, if the Secretary

of the Interior agrees to an assignment releasing the Secretary

of Agriculture from all further responsibility for collection

of any amounts with regard to the loan secured by the real

property; or

(bb) requiring the Secretary to assign the loan and security

instruments to the tribe having jurisdiction over the

reservation in which the real property is located, if the tribe

agrees to the assignment.

(II) Notice to tribe. - If an Indian borrower-owner does not

voluntarily convey to the Secretary real property described in

clause (i), not less than 30 days before a foreclosure sale of

the property, the Secretary shall provide written notice to the

Indian tribe that has jurisdiction over the reservation in which

the real property is located of -

(aa) the sale;

(bb) the fair market value of the property; and

(cc) the requirements of this subparagraph.

(III) Assumed loans. - If an Indian tribe assumes a loan under

subclause (I) -

(aa) the Secretary shall not foreclose the loan because of

any default that occurred prior to the date of the assumption;

(bb) the loan shall be for the lesser of the outstanding

principal and interest of the loan or the fair market value of

the property; and

(cc) the loan shall be treated as though the loan was made

under sections 488 to 494 of title 25.

(vi)(I) Except as provided in subclause (II), at a foreclosure

sale of real property described in clause (i), the Secretary shall

offer a bid for the property that is equal to the higher of -

(aa) the fair market value of the property; or

(bb) the outstanding principal and interest of the loan.

(II) If a hazardous substance (as defined in section 9601(14) of

title 42) is located on the property and the Secretary takes

remedial action to protect human health or the environment if the

property is taken into inventory, subclause (I) shall apply only if

the Secretary determines that it is in the best interests of the

Federal Government.

(2) The Secretary shall not offer for sale or sell any such

farmland if the placing of such farmland on the market will have a

detrimental effect on the value of farmland in the area.

(3)(A) The Secretary may sell farmland administered under this

chapter through an installment sale or similar device that contains

such terms as the Secretary considers necessary to protect the

investment of the Federal Government in such land.

(B) The Secretary may subsequently sell any contract entered into

to carry out subparagraph (A).

(4) In the case of farmland administered under this chapter that

is highly erodible land (as defined in section 3801 of title 16),

the Secretary may require the use of specified conservation

practices on such land as a condition of the sale or lease of such

land.

(5) Notwithstanding any other provisions of law, compliance by

the Secretary with this subsection shall not cause any acreage

allotment, marketing quota, or acreage base assigned to such

property to lapse, terminate, be reduced, or otherwise be adversely

affected.

(6) In the event of any conflict between any provision of this

subsection and any provision of the law of any State providing a

right of first refusal to the owner of farmland or the operator of

a farm before the sale or lease of land to any other person, such

provision of State law shall prevail.

(f) Normal security income

(1) As used in this subsection, the term ''normal income

security'' means all security not considered basic security,

including crops, livestock, poultry products, Agricultural

Stabilization and Conservation Service payments and Commodity

Credit Corporation payments, and other property covered by Farmers

Home Administration liens that is sold in conjunction with the

operation of a farm or other business, but shall not include any

equipment (including fixtures in States that have adopted the

Uniform Commercial Code), or foundation herd or flock, that is the

basis of the farming or other operation, and is the basic security

for a Farmers Home Administration farmer program loan.

(2) The Secretary shall release from the normal income security

provided for such loan an amount sufficient to pay for the

essential household and farm operating expenses of the borrower,

until such time as the Secretary accelerates such loan.

(3) A borrower whose account was accelerated on or after November

1, 1985, and on or before May 7, 1987, but not thereafter

foreclosed on or liquidated, shall be entitled to the release of

security income for a period of 12 months, to pay the essential

household and farm operating expenses of such borrower in an amount

not to exceed $18,000 over 12 months, if such borrower -

(A) as of October 30, 1987, continued to be actively engaged in

the farming operations for which the Secretary had made the

farmer program loan; and

(B) as of the deadline for responding to the notice provided

for under paragraph (5), requests restructuring of such loans

pursuant to section 2001 of this title.

(4) The county committee in the county in which borrower's land

is located shall determine whether the borrower has complied with

the requirements of paragraph (3)(A).

(5)(A) Within 45 days after January 6, 1988, the Secretary shall

provide to the borrowers described in paragraph (3) notice by

certified mail of the right of such borrowers to apply for the

benefits under such paragraph.

(B) Releases under such paragraph shall be made to qualified

borrowers who have responded to the notice within 30 days after

receipt.

(C) Within 12 months after a borrower has requested restructuring

under section 2001 of this title, the Secretary shall make a final

determination on the request. Notwithstanding the 12-month

limitation provided for in paragraph (3), releases shall continue

to be made to the borrower until a denial or dismissal of the

application of the borrower for restructuring under section 2001 of

this title is made. The amount of essential household and farm

operating expenses which may be released to any borrower eligible

for such releases after 12 months may exceed $18,000, by an amount

proportionate to the period of time beyond 12 months before a final

determination is made by the Secretary.

(6) If a borrower is required to plan for or to report on how

proceeds from the sale of collateral property will be used, the

Secretary shall -

(A) notify the borrower of such requirement; and

(B) notify the borrower of the right to the release of funds

under this section and the means by which a request for the funds

may be made.

(7) The Secretary shall issue regulations consistent with this

section that -

(A) ensure the release of funds to each borrower; and

(B) establish guidelines for releases under paragraph (3),

including a list of expenditures for which funds will normally be

released.

(g) Easements on inventoried property

(1) In general

Subject to paragraph (2), in the disposal of real property

under this section, the Secretary shall establish perpetual

wetland conservation easements to protect and restore wetlands or

converted wetlands that exist on inventoried property.

(2) Limitation

The Secretary shall not establish a wetland conservation

easement on an inventoried property that -

(A) was cropland on the date the property entered the

inventory of the Secretary; or

(B) was used for farming at any time during the period

beginning on the date 5 years before the property entered the

inventory of the Secretary and ending on the date the property

entered the inventory of the Secretary.

(3) Notification

The Secretary shall provide prior written notification to a

borrower considering preservation loan servicing that a wetlands

conservation easement may be placed on land for which the

borrower is negotiating a lease option.

(4) Appraised value

The appraised value of the farm shall reflect the value of the

land due to the placement of wetland conservation easements.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 335, Aug. 8, 1961, 75 Stat. 315;

Pub. L. 92-419, title I, Sec. 127, Aug. 30, 1972, 86 Stat. 666;

Pub. L. 99-198, title XIII, Sec. 1314(a), 1315, 1318(b)(1), Dec.

23, 1985, 99 Stat. 1526, 1528, 1531; Pub. L. 100-233, title VI,

Sec. 610, 611, Jan. 6, 1988, 101 Stat. 1669, 1673; Pub. L. 101-624,

title XVIII, Sec. 1813(a)-(h)(1), 1816(e), title XXIII, Sec.

2303(c), 2388(g), Nov. 28, 1990, 104 Stat. 3821-3823, 3827, 3981,

4053; Pub. L. 102-237, title V, Sec. 501(f), Dec. 13, 1991, 105

Stat. 1867; Pub. L. 102-552, title V, Sec. 516(h)(1), Oct. 28,

1992, 106 Stat. 4138; Pub. L. 102-554, Sec. 16, 17, Oct. 28, 1992,

106 Stat. 4154; Pub. L. 104-127, title VI, Sec. 638, 639, Apr. 4,

1996, 110 Stat. 1093, 1097; Pub. L. 107-171, title V, Sec. 5308,

May 13, 2002, 116 Stat. 345.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

The Federal Property and Administrative Services Act of 1949,

referred to in subsec. (c)(4), is act June 30, 1949, ch. 288, 63

Stat. 377, as amended. Except for title III of the Act, which is

classified generally to subchapter IV (Sec. 251 et seq.) of chapter

4 of Title 41, Public Contracts, the Act was repealed and reenacted

by Pub. L. 107-217, Sec. 1, 6(b), Aug. 21, 2002, 116 Stat. 1062,

1304, as chapters 1 to 11 of Title 40, Public Buildings, Property,

and Works.

This Act, referred to in subsec. (e)(1)(A)(vi), refers to the

Agricultural Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat.

294, as amended. For classification of this Act to the Code, see

Short Title note set out under section 1911 of this title and

Tables. However, the reference was probably intended to be ''this

title'' meaning the Consolidated Farm and Rural Development Act,

title III of Pub. L. 87-128, as amended, which is classified

principally to this chapter. For classification of this title to

the Code, see Short Title note set out under section 1921 of this

title and Tables.

Subsection (g)(6) of this section, referred to in subsec.

(e)(1)(D)(iii)(I), was redesignated subsection (g)(3) of this

section by Pub. L. 104-127, title VI, Sec. 639(4), Apr. 4, 1996,

110 Stat. 1097.

-MISC2-

AMENDMENTS

2002 - Subsec. (c)(1)(B)(i). Pub. L. 107-171, Sec. 5308(1)(A)(i),

substituted ''135 days'' for ''75 days''.

Subsec. (c)(1)(B)(iv). Pub. L. 107-171, Sec. 5308(1)(A)(ii),

added cl. (iv).

Subsec. (c)(1)(C). Pub. L. 107-171, Sec. 5308(1)(B), substituted

''135 days'' for ''75 days'' and ''135-day period'' for ''75-day

period''.

Subsec. (c)(2). Pub. L. 107-171, Sec. 5308(2), added par. (2) and

struck out heading and text of former par. (2). Text read as

follows:

''(A) Previous lease. - In the case of real property acquired

prior to April 4, 1996, that the Secretary leased prior to April 4,

1996, not later than 60 days after the lease expires, the Secretary

shall offer to sell the property in accordance with paragraph (1).

''(B) Previously in inventory. - In the case of real property

acquired prior to April 4, 1996, that the Secretary has not leased,

not later than 60 days after April 4, 1996, the Secretary shall

offer to sell the property in accordance with paragraph (1).''

1996 - Subsec. (b). Pub. L. 104-127, Sec. 638(1), substituted

''subsections (c) and (e)'' for ''subsection (e)''.

Subsec. (c). Pub. L. 104-127, Sec. 638(2), added subsec. (c) and

struck out former subsec. (c) which authorized Secretary to

determine whether real property administered under this chapter was

suitable for disposition to persons eligible for assistance under

provisions of any law administered by Farmers Home Administration

or Rural Development Administration.

Subsec. (e)(1)(A). Pub. L. 104-127, Sec. 638(3)(A)(i)-(iii),

redesignated subpar. (D) as (A), in cl. (i), substituted ''(D)''

for ''(G)'' in introductory provisions, added subcl. (I) and struck

out former subcl. (I) which read as follows: ''the real property

described in subparagraph (A)(i) is located within an Indian

reservation,'', in subcl. (II), substituted a semicolon for '',

and'' at end, and struck out subcl. (III) which read as follows:

''the period in which the right to purchase or lease such real

property provided in clauses (i) and (ii) of subparagraph (A) has

expired,'', in cl. (iii), substituted ''Not later than 90 days

after acquiring the property, the Secretary shall'' for ''The

Secretary shall, within 90 days after the expiration of the period

for which the right to purchase or lease real property described in

clause (i) is provided in clauses (i) and (ii) of subparagraph

(A),'', and struck out former subpar. (A) which authorized the

Secretary, during 180-day period beginning on date of acquisition,

or during applicable period under State law, to allow

borrower-owner to purchase or lease property, if such

borrower-owner had acted in good faith with the Secretary.

Subsec. (e)(1)(B). Pub. L. 104-127, Sec. 638(3)(A)(i), (ii),

redesignated subpar. (E) as (B) and struck out former subpar. (B)

which read as follows: ''Any purchase or lease under subparagraph

(A) shall be on such terms and conditions as are established in

regulations promulgated by the Secretary.''

Subsec. (e)(1)(C). Pub. L. 104-127, Sec. 638(3)(A)(i), (ii),

redesignated subpar. (F) as (C) and struck out former subpar. (C)

which authorized Secretary to give preference in sale or lease,

with option to purchase, of property that had been foreclosed,

purchased, redeemed, or otherwise acquired by the Secretary to

persons in specified order.

Subsec. (e)(1)(D). Pub. L. 104-127, Sec. 638(3)(A)(ii), (iv),

redesignated subpar. (G) as (D), in cl. (i), substituted ''(A)''

for ''(D)'' in concluding provisions, in cl. (iii)(I), substituted

''subparagraph (A)'' for ''subparagraphs (C)(i), (C)(ii), and

(D)'', and added cl. (v) and struck out former cl. (v) which read

as follows: ''If a borrower-owner does not voluntarily convey to

the Secretary real property described in clause (i), at least 30

days before a foreclosure sale of the property, the Secretary shall

provide written notice to the Indian tribe that has jurisdiction

over the reservation in which the real property is located of -

''(I) the sale;

''(II) the fair market value of the property; and

''(III) the requirements of this subparagraph.''

Former subpar. (D) redesignated (A).

Subsec. (e)(1)(E) to (G). Pub. L. 104-127, Sec. 638(3)(A)(ii),

redesignated subpars. (E) to (G) as (B) to (D), respectively.

Subsec. (e)(3). Pub. L. 104-127, Sec. 638(3)(B), (C), (E),

redesignated par. (4) as (3), struck out ''(i)'' before ''The

Secretary may sell'', redesignated cl. (ii) of subpar. (A) as

subpar. (B) and substituted ''subparagraph (A)'' for ''clause

(i)'', struck out former subpar. (B) which read as follows: ''If

two or more qualified operators of not larger than family-size

farms desire to purchase, or lease with an option to purchase, such

land, the appropriate county committee shall randomly select the

operator who may purchase such land, on such basis as the Secretary

may prescribe by regulation, in accordance with subsection

(c)(2)(B)(iii) of this section.'', and struck out former par. (3)

which directed the Secretary to issue regulations providing for

leasing of real property, or leasing such property with option to

purchase, on fair and equitable basis.

Subsec. (e)(4). Pub. L. 104-127, Sec. 638(3)(E), redesignated

par. (7) as (4). Former par. (4) redesignated (3).

Subsec. (e)(5). Pub. L. 104-127, Sec. 638(3)(D), (E),

redesignated par. (8) as (5) and struck out former par. (5) which

read as follows:

''(5)(A) If the Secretary determines that farmland administered

under this chapter is not suitable for sale or lease to persons

eligible for a loan made or insured under subchapter I of this

chapter because such farmland is in a tract or tracts that the

Secretary determines to be larger than that necessary for such

eligible persons, the Secretary shall, to the greatest extent

practicable, subdivide such land into tracts suitable for sale

under subsection (c) of this section. Such land shall be

subdivided into parcels of land the shape and size of which are

suitable for farming, the value of which shall not exceed the

individual loan limits as prescribed under section 1925 of this

title.

''(B) The Secretary shall dispose of such subdivided farmland in

accordance with this subsection.''

Subsec. (e)(6). Pub. L. 104-127, Sec. 638(3)(D), (E),

redesignated par. (10) as (6) and struck out former par. (6) which

read as follows: ''If suitable farmland is available for

disposition under this subsection, the Secretary shall -

''(A) publish an announcement of the availability of such

farmland in at least one newspaper that is widely circulated in

the county in which the farmland is located;

''(B) post an announcement of the availability of such farmland

in a prominent place in the local office of the Farmers Home

Administration that serves the county in which the farmland is

located; and

''(C) provide written notice reasonably calculated to inform

the immediate previous owner or immediate previous family-size

farm operator of such farmland, of the availability of such

farmland.''

Subsec. (e)(7), (8). Pub. L. 104-127, Sec. 638(3)(E),

redesignated pars. (7) and (8) as (4) and (5), respectively.

Subsec. (e)(9). Pub. L. 104-127, Sec. 638(3)(D), struck out par.

(9) which read as follows: ''Denials of applications for or

disputes over terms and conditions of a lease or purchase agreement

under this section are appealable under section 1983b of this

title.''

Subsec. (e)(10). Pub. L. 104-127, Sec. 638(3)(E), redesignated

par. (10) as (6).

Subsec. (g). Pub. L. 104-127, Sec. 639(1)(A), inserted heading.

Subsec. (g)(1). Pub. L. 104-127, Sec. 639(1), inserted heading,

substituted ''Subject to paragraph (2)'' for ''Subject to

paragraphs (2) through (5)'', and struck out '', as determined by

the Secretary in accordance with title XII of the Food Security Act

of 1985 (16 U.S.C. 3801 et seq.)'' after ''inventoried property''.

Subsec. (g)(2). Pub. L. 104-127, Sec. 639(2), added par. (2) and

struck out former par. (2) which read as follows: ''In establishing

the wetland conservation easements on land that is considered to be

cropland as of November 28, 1990, the Secretary shall avoid, to the

extent practicable, an adverse impact on the productivity of the

croplands, as provided in this subsection.''

Subsec. (g)(3). Pub. L. 104-127, Sec. 639(3), (4), redesignated

par. (6) as (3), inserted heading, and struck out former par. (3)

which read as follows: ''In order to avoid the adverse impact, the

Secretary shall -

''(A) not establish the wetland conservation easements with

respect to wetlands that were converted prior to December 23,

1985, and that have been in cropland use, as determined by the

Secretary, in excess of 10 percent of the existing cropland

available for production of agricultural commodities on the

particular parcel of inventoried property;

''(B) not establish the wetland conservation easements with

respect to wetlands that have been frequently planted to

agricultural commodities and wetlands described in subparagraph

(A), in excess of 20 percent of the existing cropland available

for production of agricultural commodities on the particular

parcel of inventoried property;

''(C) ensure that the buffer area adjacent to the wetland is

generally not more than 100 feet in average width; and

''(D) ensure that access to other portions of the property for

farming and other uses is provided.''

Subsec. (g)(4). Pub. L. 104-127, Sec. 639(3), (5), redesignated

par. (7) as (4), inserted heading, and struck out former par. (4)

which read as follows: ''The wetland conservation easements shall

be placed on wetlands that have a history of haying and grazing, as

determined by the Secretary, except that in no case shall the

quantity of the wetland subject to the easements exceed 50 percent

of the existing forage lands on the parcel of inventoried

property. All haying and grazing practices on the wetlands

(including the timing and intensity of haying and grazing) shall

conform to forage management standards designed to protect

wetlands.''

Subsec. (g)(5). Pub. L. 104-127, Sec. 639(3), struck out par. (5)

which read as follows: ''If, despite the limitations contained in

paragraph (3), wetland conservation easements established under

paragraph (1) would prevent a particular parcel of inventoried

property that is to be sold or leased to a borrower described in

clause (i), (ii), or (iii) of subsection (e)(1)(C) of this section,

or to a borrower who is a beginning farmer or rancher, from being a

marketable agricultural production unit that is comparable to the

parcel as acquired, the Secretary may -

''(A) establish wetland conservation easements on wetland that

was converted prior to December 23, 1985, in a quantity that is

less than 10 percent of the existing croplands available for

production of agricultural commodities on the particular parcel;

and

''(B) if the reduction provided in subparagraph (A) is not

applicable, or is not sufficient to ensure that the particular

parcel would be a marketable agricultural production unit, amend

the wetland conservation easements established on the wetlands

that have been frequently planted to agricultural commodities to

permit the production of agricultural commodities (consistent

with title XII of the Food Security Act of 1985) on the wetlands,

to the extent necessary to maintain the parcel as a marketable

agricultural production unit.''

Subsec. (g)(6), (7). Pub. L. 104-127, Sec. 639(4), (5),

redesignated pars. (6) and (7) as (3) and (4), respectively.

Subsec. (g)(8). Pub. L. 104-127, Sec. 639(3), struck out par. (8)

which read as follows: ''Notwithstanding the limitations described

under paragraphs (3) and (4), the limitations may be voluntarily,

knowingly waived by any person with respect to real property

described in paragraph (3) or (4).''

1992 - Subsec. (c)(1). Pub. L. 102-554, Sec. 16, in fourth

sentence, inserted ''(A)'' after ''shall be'' and ''or (B) leased

to persons eligible for assistance under the provisions of any law

administered by the Farmers Home Administration or the Rural

Development Administration under an annual lease or a lease with an

option to purchase, with a preference for sale'' before period at

end.

Subsec. (e)(1)(A)(i). Pub. L. 102-552, which, in amending

directory language of Pub. L. 102-237, Sec. 501(f)(1), directed the

substitution of ''the borrower-owner (as defined in subparagraph

(F))'' for ''borrower-owner (as defined in subparagraph (F))'', was

executed by making the substitution in text which did not contain a

closing parenthesis after ''(F)'', to reflect the probable intent

of Congress. See 1991 Amendment note below.

Subsec. (e)(1)(D)(i). Pub. L. 102-554, Sec. 17(1), substituted

''Except as provided in subparagraph (G), if'' for ''If''.

Subsec. (e)(1)(G). Pub. L. 102-554, Sec. 17(2), added subpar.

(G).

1991 - Subsec. (e)(1)(A)(i). Pub. L. 102-237, Sec. 501(f)(1), as

amended by Pub. L. 102-552, substituted ''the borrower-owner (as

defined in subparagraph (F))'' for ''the borrower from whom the

Secretary acquired real farm or ranch property (including the

principal residence of the borrower) used to secure any loan made

to the borrower under this chapter (hereinafter referred to in this

paragraph as the 'borrower-owner')''. See 1992 Amendment note

above.

Subsec. (e)(1)(F). Pub. L. 102-237, Sec. 501(f)(2), added subpar.

(F).

1990 - Subsec. (a). Pub. L. 101-624, Sec. 1813(a), 2303(c)(1),

inserted ''or the Rural Development Administration'' after

''Farmers Home Administration'' and substituted ''12 months from

the date first published under paragraph (2)(D)'' for ''three years

from the date of acquisition''.

Subsec. (c)(1). Pub. L. 101-624, Sec. 2303(c)(2), inserted ''or

the Rural Development Administration'' after ''Farmers Home

Administration''.

Subsec. (c)(2)(A), (B). Pub. L. 101-624, Sec. 1813(e)(1), added

subpar. (A) and subpar. (B) introductory provisions, redesignated

former subpars. (A) through (D) as cls. (i) through (iv),

respectively, of subpar. (B), and struck out former introductory

provisions which read as follows: ''Notwithstanding any other

provision of law, the Secretary shall sell suitable farmland

administered under this subchapter to operators (as of the time

immediately after such contract for sale or lease is entered into)

of not larger than family sized farms, as determined by the county

committee. In selling such land, the county committee shall - ''.

Subsec. (c)(2)(B)(ii). Pub. L. 101-624, Sec. 1813(g)(1), amended

cl. (ii) generally. Prior to amendment, cl. (ii) read as follows:

''offer suitable land at a price not greater than that which

reflects the appraised market value of such land;''.

Subsec. (c)(2)(B)(iii). Pub. L. 101-624, Sec. 1813(b)(1),

inserted before semicolon '', except that if the committee

determines that two or more applicants meet the loan eligibility

criteria, the committee shall select between the qualified

applicants on a random basis''.

Subsec. (c)(2)(B)(iv). Pub. L. 101-624, Sec. 2388(g), substituted

''cause'' for ''caused''.

Subsec. (e)(1)(A)(i). Pub. L. 101-624, Sec. 1813(c), substituted

''real farm or ranch property (including the principal residence of

the borrower)'' for ''real property''.

Pub. L. 101-624, Sec. 1816(e)(1), inserted before period at end

'', if such borrower-owner has acted in good faith with the

Secretary, as defined in regulations issued by the Secretary, in

connection with such loan''.

Subsec. (e)(1)(A)(iv). Pub. L. 101-624, Sec. 1813(d), added cl.

(iv).

Subsec. (e)(1)(C)(i). Pub. L. 101-624, Sec. 1816(e)(2), inserted

before period at end '', if such borrower-owner has acted in good

faith with the Secretary, as defined in regulations issued by the

Secretary, in connection with the loan of such borrower-owner for

which such property served as security''.

Subsec. (e)(1)(C)(iv), (v). Pub. L. 101-624, Sec. 1813(e)(2),

added cl. (iv) and redesignated former cl. (iv) as (v).

Subsec. (e)(1)(D)(x). Pub. L. 101-624, Sec. 1813(f), added cl.

(x).

Subsec. (e)(4)(B). Pub. L. 101-624, Sec. 1813(g)(2), redesignated

subpar. (C) as (B) and struck out former subpar. (B) which read as

follows: ''The Secretary shall offer such land for sale to

operators of not larger than family-size farms at a price that

reflects the average annual income that may be reasonably

anticipated to be generated from farming such land.''

Subsec. (e)(4)(C). Pub. L. 101-624, Sec. 1813(g)(2), redesignated

former subpar. (C) as (B).

Pub. L. 101-624, Sec. 1813(b)(2), substituted ''shall randomly''

for ''shall, by majority vote,'' and inserted '', in accordance

with subsection (c)(2)(B)(iii) of this section''.

Subsec. (g). Pub. L. 101-624, Sec. 1813(h)(1), added subsec. (g).

1988 - Subsec. (c). Pub. L. 100-233, Sec. 610(a), designated

existing provisions as par. (1), inserted provisions requiring the

County Committee to classify or reclassify real property that is

farmland, as being suitable for farming operation for such

disposition unless property cannot be used to meet any of the

purposes of section 1923 of this title, and added par. (2).

Subsec. (e)(1). Pub. L. 100-233, Sec. 610(b)(1), added par. (1)

and struck out former par. (1) which read as follows: ''The

Secretary shall to the extent practicable sell or lease farmland

administered under this chapter in the following order of priority:

''(A) Sale of such farmland to operators (as of the time

immediately before such sale) of not larger than family-size

farms.

''(B) Lease of such farmland to operators (as of the time

immediately before such lease is entered into) of not larger than

family-size farms.''

Subsec. (e)(3). Pub. L. 100-233, Sec. 610(b)(2), redesignated

subpars. (B) to (D) as (A) to (C), respectively, in subpar. (B)

substituted ''Secretary shall determine if the lessee'' for

''Secretary shall give special consideration to a previous owner or

operator of such land if such owner or operator'', added subpar.

(D), and struck out former subpar. (A) which read as follows: ''The

Secretary shall consider granting, and may grant, to an operator of

not larger than a family-size farm, in conjunction with paragraph

(3), a lease with an option to purchase farmland administered under

this chapter.''

Subsec. (e)(5)(A). Pub. L. 100-233, Sec. 610(b)(3), amended

subpar. (A) generally. Prior to amendment, subpar. (A) read as

follows: ''If the Secretary determines that farmland administered

under this chapter is not suitable for sale or lease to an operator

of not larger than a family-size farm because such farmland is in a

tract or tracts that the Secretary determines to be larger than

that necessary for family-size farms, the Secretary shall subdivide

such land into tracts suitable for such operator.''

Subsec. (e)(6)(C). Pub. L. 100-233, Sec. 610(b)(4), added subpar.

(C).

Subsec. (e)(9), (10). Pub. L. 100-233, Sec. 610(b)(5), added

pars. (9) and (10).

Subsec. (f). Pub. L. 100-233, Sec. 611, amended subsec. (f)

generally. Prior to amendment, subsec. (f) read as follows:

''(1) As used in this subsection, the term 'normal income

security' has the same meaning given such term in section

1962.17(b) of title 7, Code of Federal Regulations (as of January

1, 1985).

''(2) Until such time as the Secretary accelerates a loan made or

insured under this chapter, the Secretary shall release from the

normal income security provided for such loan an amount sufficient

to pay the essential household and farm operating expenses of the

borrower, as determined by the Secretary.''

1985 - Subsec. (b). Pub. L. 99-198, Sec. 1314(a)(1), substituted

''Except as provided in subsection (e) of this section, real

property'' for ''Real property''.

Subsec. (c). Pub. L. 99-198, Sec. 1314(a)(2), substituted

''Except as provided in subsection (e) of this section, the

Secretary'' for ''The Secretary'' and inserted sentence at end

providing that notwithstanding the preceding sentence, the

Secretary may for conservation purposes grant or sell an easement,

restriction, development rights, or the equivalent thereof, to a

unit of local or State government or a private nonprofit

organization separately from the underlying fee or sum of all other

rights possessed by the United States.

Pub. L. 99-198, Sec. 1318(b)(1), which directed insertion of '',

other than easements acquired under section 1997 of this title'' at

end of last sentence, was executed to fifth sentence of subsec.

(c), and not to sixth and last sentence as added by section

1314(a)(2)(B) of Pub. L. 99-198, to reflect the probable intent of

Congress.

Subsec. (e). Pub. L. 99-198, Sec. 1314(a)(3), added subsec. (e).

Subsec. (f). Pub. L. 99-198, Sec. 1315, added subsec. (f).

1972 - Subsec. (c). Pub. L. 92-419 substituted ''the provisions

of any law administered by the Farmers Home Administration'' for

''subchapter I of this chapter'' in first sentence and ''such

provisions'' for ''the provisions of subchapter I of this chapter''

in second sentence, struck out from fourth sentence initial minimum

20 per centum downpayment requirement and provision for payment of

remainder in not more than five annual installments, and provided

in such fourth sentence for interest rates and terms not more

favorable than legally permissible for eligible borrowers.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 638 of Pub. L. 104-127 effective Apr. 4,

1996, but not applicable with respect to complete application to

acquire inventory property submitted prior to Apr. 4, 1996, and

amendment by section 639 of Pub. L. 104-127 effective Apr. 4, 1996,

see section 663(a), (c) of Pub. L. 104-127, set out as a note under

section 1922 of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Section 516(h)(2) of Pub. L. 102-552 provided that: ''The

amendments made by paragraph (1) of this subsection (amending

section 501(f) of Pub. L. 102-237, see 1992 Amendment note above)

shall take effect immediately after section 501(f) of the Food,

Agriculture, Conservation, and Trade Act of 1990 (probably should

be Food, Agriculture, Conservation, and Trade Act Amendments of

1991 (Pub. L. 102-237)) took effect.''

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by section 1816 of Pub. L. 101-624 applicable to new

applications submitted under section 2001 of this title on or after

Nov. 28, 1990, see section 1861 of Pub. L. 101-624, set out as a

note under section 2001 of this title.

EFFECTIVE DATE OF 1985 AMENDMENT

Section 1314(b) of Pub. L. 99-198 provided that: ''The Secretary

of Agriculture shall implement the amendments made by this section

(amending this section) not later than 90 days after the date of

enactment of this Act (Dec. 23, 1985).''

COMPLETION OF SALES OF FARMERS HOME ADMINISTRATION INVENTORY FARMS

Pub. L. 102-142, title VII, Sec. 740, Oct. 28, 1991, 105 Stat.

915, provided that: ''Hereafter, the Secretary shall complete the

sales of Farmers Home Administration inventory farms, in accordance

with the law and regulations in effect before November 28, 1990, in

situations in which a County Committee, acting pursuant to section

335 of the Consolidated Farm and Rural Development Act (7 U.S.C.

1985), had made its initial selection of a buyer before November

28, 1990. Such sales shall be completed as soon as the selection

decision is administratively final and all terms and conditions

have been agreed to. In carrying out sales of inventory property,

priority shall be given to the former owner and members of the

immediate family.''

FARM OWNERSHIP OUTREACH PROGRAM TO SOCIALLY DISADVANTAGED

INDIVIDUALS

Section 623 of Pub. L. 100-233, as amended by Pub. L. 101-624,

title XVIII, Sec. 1852, Nov. 28, 1990, 104 Stat. 3837, provided

that:

''(a) In General. - The Secretary of Agriculture, in coordination

with the limited resource farmers' initiative in the office of the

Director of the Office of Advocacy and Enterprise, shall establish

a farm ownership outreach program for persons who are members of

any group with respect to which an individual may be identified as

a socially disadvantaged individual under section 8(a)(5) of the

Small Business Act (15 U.S.C. 637(a)(5)) to encourage the

acquisition of inventory farmland of the Farmers Home

Administration by -

''(1) informing persons eligible for assistance under any other

provision of this Act (see Short Title of 1988 Amendment note set

out under section 2001 of Title 12, Banks and Banking) of -

''(A) the possiblity (sic) of acquiring such inventory

farmland; and

''(B) various farm ownership loan programs; and

''(2) providing technical assistance to such persons in the

acquisition of such inventory farmland.

''(b) Authorization of Appropriations. - There are authorized to

be appropriated to carry out this section $2,500,000 for each of

the fiscal years 1991 through 1995.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1471, 1929a, 1991, 2002

of this title.

-CITE-

7 USC Sec. 1986 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1986. Conflicts of interests

-STATUTE-

(a) Acceptance of fees, commissions, gifts, or other considerations

prohibited

No officer, attorney, or other employee of the Secretary shall,

directly or indirectly, be the beneficiary of or receive any fee,

commission, gift, or other consideration for or in connection with

any transaction or business under this chapter other than such

salary, fee, or other compensation as he may receive as such

officer, attorney, or employee.

(b) Acquisition of interest in land by certain officers or

employees of Department of Agriculture prohibited; 3-year

period

Except as otherwise provided in this subsection, no officer or

employee of the Department of Agriculture who acts on or reviews an

application made by any person under this chapter for a loan to

purchase land may acquire, directly or indirectly, any interest in

such land for a period of three years after the date on which such

action is taken or such review is made. This prohibition shall not

apply to a former member of a county committee upon a determination

by the Secretary, prior to the acquisition of such interest, that

such former member acted in good faith when acting on or reviewing

such application.

(c) Certifications on loans to family members prohibited

No member of a county committee shall knowingly make or join in

making any certification with respect to a loan to purchase any

land in which he or any person related to him within the second

degree of consanguinity or affinity has or may acquire any interest

or with respect to any applicant related to him within the second

degree of consanguinity or affinity.

(d) Penalties

Any persons violating any provision of this section shall, upon

conviction thereof, be punished by a fine of not more than $2,000

or imprisonment for not more than two years, or both.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 336, Aug. 8, 1961, 75 Stat. 316;

Pub. L. 98-258, title VI, Sec. 606, Apr. 10, 1984, 98 Stat. 140;

Pub. L. 107-171, title V, Sec. 5501(b), May 13, 2002, 116 Stat.

351.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a)

and (b), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (b). Pub. L. 107-171 struck out ''provided for in

section 1982 of this title'' after ''former member of a county

committee''.

1984 - Pub. L. 98-258 designated first, second, and third

sentences of existing provisions as subsecs. (a), (c), and (d),

respectively, and added subsec. (b).

-CITE-

7 USC Sec. 1987 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1987. Debt adjustment and credit counseling; ''summary

period'' defined; loan summary statements

-STATUTE-

(a) The Secretary may provide voluntary debt adjustment

assistance between farmers and their creditors and may cooperate

with State, territorial, and local agencies and committees engaged

in such debt adjustment, and may give credit counseling.

(b)(1) As used in this subsection, the term ''summary period''

means -

(A) the period beginning on December 23, 1985, and ending on

the date on which the first loan summary statement is issued

after December 23, 1985; or

(B) the period beginning on the date of issuance of the

preceding loan summary statement and ending on the date of

issuance of the current loan summary statement.

(2) On the request of a borrower of a loan made or insured (but

not guaranteed) under this chapter, the Secretary shall issue to

such borrower a loan summary statement that reflects the account

activity during the summary period for each loan made or insured

under this chapter to such borrower, including -

(A) the outstanding amount of principal due on each such loan

at the beginning of the summary period;

(B) the interest rate charged on each such loan;

(C) the amount of payments made on and their application to

each such loan during the summary period and an explanation of

the basis for the application of such payments;

(D) the amount of principal and interest due on each such loan

at the end of the summary period;

(E) the total amount of unpaid principal and interest on all

such loans at the end of the summary period;

(F) any delinquency in the repayment of any such loan;

(G) a schedule of the amount and date of payments due on each

such loan; and

(H) the procedure the borrower may use to obtain more

information concerning the status of such loans.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 337, Aug. 8, 1961, 75 Stat. 316;

Pub. L. 99-198, title XIII, Sec. 1316, Dec. 23, 1985, 99 Stat.

1528.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec.

(b)(2), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1985 - Pub. L. 99-198 designated existing provisions as subsec.

(a) and added subsec. (b).

-CITE-

7 USC Sec. 1988 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1988. Appropriations

-STATUTE-

(a) Authorization

There is authorized to be appropriated to the Secretary such sums

as the Congress may from time to time determine to be necessary to

enable the Secretary to carry out the purposes of this chapter and

for the administration of assets transferred to the Farmers Home

Administration or the Rural Development Administration.

(b) Sale by lender and any holder of guaranteed portion of loan

pursuant to regulations governing such sales; limitations;

issuance of pool certificates representing ownership of

guaranteed portion of guaranteed loan; terms and conditions,

etc.; reporting requirements

(1)(A) The guaranteed portion of any loan made under this chapter

may be sold by the lender, and by any subsequent holder, in

accordance with regulations governing such sales as the Secretary

shall establish, subject to the following limitations:

(i) All fees due the Secretary with respect to a guaranteed

loan are to be paid in full before any sale.

(ii) The loan is to have been fully disbursed to the borrower

before the sale.

(B) After a loan is sold in the secondary market, the lender

shall remain obligated under its guarantee agreement with the

Secretary, and shall continue to service the loan in accordance

with the terms and conditions of such agreement.

(C) The Secretary shall develop such procedures as are necessary

for the facilitation, administration, and promotion of secondary

market operations, and for determining the increase of farmers'

access to capital at reasonable rates and terms as a result of

secondary market operations.

(D) This subsection shall not be interpreted to impede or

extinguish the right of the borrower or the successor in interest

to such borrower to prepay (in whole or in part) any loan made

under this chapter, or to impede or extinguish the rights of any

party under any provision of this chapter.

(2)(A) The Secretary may, directly or through a market maker

approved by the Secretary, issue pool certificates representing

ownership of part or all of the guaranteed portion of any loan

guaranteed by the Secretary under this chapter. Such certificates

shall be based on and backed by a pool established or approved by

the Secretary and composed solely of the entire guaranteed portion

of such loans.

(B) The Secretary may, on such terms and conditions as the

Secretary deems appropriate, guarantee the timely payment of the

principal and interest on pool certificates issued on behalf of the

Secretary by approved market makers for purposes of this

subsection. Such guarantee shall be limited to the extent of

principal and interest on the guaranteed portions of loans that

compose the pool. If a loan in such pool is prepaid, either

voluntarily or by reason of default, the guarantee of timely

payment of principal and interest on the pool certificates shall be

reduced in proportion to the amount of principal and interest such

prepaid loan represents in the pool. Interest on prepaid or

defaulted loans shall accrue and be guaranteed by the Secretary

only through the date of payment on the guarantee. During the term

of the pool certificate, the certificate may be called for

redemption due to prepayment or default of all loans constituting

the pool.

(C) The full faith and credit of the United States is pledged to

the payment of all amounts that may be required to be paid under

any guarantee of such pool certificates issued by approved market

makers under this subsection. The Secretary may expend amounts in

the Agricultural Credit Insurance Fund to make payments on such

guarantees.

(D) The Secretary shall not collect any fee for any guarantee

under this subsection. The preceding sentence shall not preclude

the Secretary from collecting a fee for the functions described in

paragraph (3).

(E) Within 30 days after a borrower of a guaranteed loan is in

default of any principal or interest payment due for 60 days or

more, the Secretary shall -

(i) purchase the pool certificates representing ownership of

the guaranteed portion of the loan; and

(ii) pay the registered holder of the certificates an amount

equal to the guaranteed portion of the loan represented by the

certificate.

(F)(i) If the Secretary pays a claim under a guarantee issued

under this subsection, the claim shall be subrogated fully to the

rights satisfied by such payment, as may be provided by the

Secretary.

(ii) No State or local law, and no Federal law, shall preclude or

limit the exercise by the Secretary of the Secretary's ownership

rights in the portions of loans constituting the pool against which

the certificates are issued.

(3) On the adoption of final rules and regulations, the Secretary

shall do the following:

(A) Provide for the central collection of registration

information from all participating market makers for all loans

and pool certificates sold under paragraphs (1) and (2). Such

information shall include, with respect to each original sale and

any subsequent sale, identification of the interest rate paid by

the borrower to the lender, the lender's servicing fee, whether

interest on the loan is at a fixed or variable rate,

identification of each purchaser of a pool certificate, the

interest rate paid on the certificate, and such other information

as the Secretary deems appropriate.

(B) Before any sale, require the seller to disclose to each

prospective purchaser of the portion of a loan guaranteed under

this chapter and to each prospective purchaser of a pool

certificate issued under paragraph (2), information on the terms,

conditions, and yield of such instrument. As used in this

subparagraph, if the instrument being sold is a loan, the term

''seller'' does not include (i) the person who made the loan or

(ii) any person who sells three or fewer guaranteed loans per

year.

(C) Provide for adequate custody of any pooled guaranteed

loans.

(D) Take such actions as are necessary, in restructuring pools

of the guaranteed portion of loans, to minimize the estimated

costs of paying claims under guarantees issued under this

subsection.

(E) Require each market maker -

(i) to service all pools formed, and participations sold, by

the market maker; and

(ii) to provide the Secretary with information relating to

the collection and disbursement of all periodic payments,

prepayments, and default funds from lenders, to or from the

reserve fund that the Secretary shall establish to enable the

timely payment guarantee to be self-funding, and from all

beneficial holders.

(F) Regulate market makers in pool certificates sold under this

subsection.

(4) The Secretary may contract for goods and services to be used

for the purposes of this subsection without regard to the

provisions of titles 5, 40, and 41, and any regulations issued

thereunder.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 338, Aug. 8, 1961, 75 Stat. 316;

Pub. L. 89-429, Sec. 5, May 24, 1966, 80 Stat. 167; Pub. L.

100-233, title VII, Sec. 711(a), Jan. 6, 1988, 101 Stat. 1707; Pub.

L. 100-399, title VI, Sec. 605, Aug. 17, 1988, 102 Stat. 1006; Pub.

L. 101-624, title XXIII, Sec. 2303(d), Nov. 28, 1990, 104 Stat.

3981; Pub. L. 104-127, title VII, Sec. 749(a), Apr. 4, 1996, 110

Stat. 1129; Pub. L. 105-362, title I, Sec. 101(a), Nov. 10, 1998,

112 Stat. 3281.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1998 - Subsec. (b)(4), (5). Pub. L. 105-362 redesignated par. (5)

as (4) and struck out former par. (4) which provided that not later

than March 31 of each year, Secretary was to transmit to Congress a

report on secondary market operations under subsec. (b) during

preceding calendar year, and described contents of reports.

1996 - Subsecs. (b) to (f). Pub. L. 104-127 redesignated subsec.

(f) as (b) and struck out former subsecs. (b) to (e) which provided

for: in subsec. (b), form and denomination of notes to obtain funds

for making direct loans under this chapter as well as maturities,

terms and conditions, interest rate, purchase by Treasury, and

public debt transaction; in subsec. (c), establishment of Farmers

Home Administration direct loan account as well as deposits into

account, liabilities, obligations, expenditures, and net

expenditure basis of budgeting; in subsec. (d), sale of notes and

mortgages; and in subsec. (e), distribution of real estate loans

among States.

1990 - Subsec. (a). Pub. L. 101-624 inserted ''or the Rural

Development Administration'' after ''Farmers Home Administration''.

1988 - Subsec. (f)(5). Pub. L. 100-399 added par. (5).

Subsec. (f). Pub. L. 100-233 added subsec. (f).

1966 - Subsec. (c). Pub. L. 89-429 inserted references to section

8 of the Watershed Protection and Flood Prevention Act, as amended,

and section 32(e) of the Bankhead-Jones Farm Tenant Act, as

amended.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-399 effective as if enacted immediately

after enactment of Pub. L. 100-233, which was approved Jan. 6,

1988, see section 1001(a) of Pub. L. 100-399, set out as a note

under section 2002 of Title 12, Banks and Banking.

REGULATIONS

Section 711(b) of Pub. L. 100-233 provided that: ''Within 180

days after the date of the enactment of this Act (Jan. 6, 1988),

the Secretary shall develop and promulgate final regulations to

implement this section and the amendment made by this section

(amending this section and enacting provisions set out below).''

POOL CERTIFICATES NOT TO BE ISSUED UNTIL FINAL REGULATIONS TAKE

EFFECT

Section 711(c) of Pub. L. 100-233 provided that: ''The Secretary

of Agriculture shall not implement paragraph (2) of section 338(f)

(now 338(b)) of the Consolidated Farm and Rural Development Act (7

U.S.C. 1988(f) (now 1988(b))), as added by subsection (a), until

the final regulations governing the administration of such

paragraph take effect.''

LOANS TO INDIANS

Authority of the Secretary of Agriculture to make loans to Indian

tribes and tribal corporations to acquire land within reservations,

see sections 488 to 492 of Title 25, Indians.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1929, 1991 of this title;

title 25 section 488.

-CITE-

7 USC Sec. 1989 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1989. Rules and regulations

-STATUTE-

(a) In general

The Secretary is authorized to make such rules and regulations,

prescribe the terms and conditions for making or insuring loans,

security instruments and agreements, except as otherwise specified

herein, and make such delegations of authority as he deems

necessary to carry out this chapter.

(b) Debt service margin requirements

Notwithstanding subsection (a) of this section, in providing

farmer program loan guarantees under this chapter, the Secretary

shall consider the income of the borrower adequate if the income is

equal to or greater than the income necessary -

(1) to make principal and interest payments on all debt

obligations of the borrower, in a timely manner;

(2) to cover the necessary living expenses of the family of the

borrower; and

(3) to pay all other obligations and expenses of the borrower

not financed through debt obligations referred to in paragraph

(1).

(c) Certified Lenders Program

(1) In general

The Secretary shall establish a program under which the

Secretary shall guarantee loans for any purpose specified in

subchapter II of this chapter that are made by lending

institutions certified by the Secretary.

(2) Certification requirements

The Secretary shall certify a lending institution that meets

such criteria as the Secretary may prescribe in regulations,

including the ability of the institution to properly make,

service, and liquidate the loans of the institution.

(3) Condition of certification

As a condition of the certification, the Secretary shall

require the institution to undertake to service the loans

guaranteed by the Secretary under this subsection, using

standards that are not less stringent than generally accepted

banking standards concerning loan servicing employed by prudent

commercial or cooperative lenders. The Secretary shall, at least

annually, monitor the performance of each certified lender to

ensure that the conditions of the certification are being met.

(4) Effect of certification

Notwithstanding any other provision of law:

(A) The Secretary shall guarantee 80 percent of a loan made

under this subsection by a certified lending institution as

described in paragraph (1), subject to county committee

certification that the borrower of the loan meets the

eligibility requirements and such other criteria as may be

applicable to loans guaranteed by the Secretary under other

provisions of this chapter.

(B) With respect to loans to be guaranteed by the Secretary

under this subsection, the Secretary shall permit certified

lending institutions to make appropriate certifications (as

provided by regulations issued by the Secretary) -

(i) relating to issues such as creditworthiness, repayment

ability, adequacy of collateral, and feasibility of farm

operation; and

(ii) that the borrower is in compliance with all

requirements of law, including regulations issued by the

Secretary.

(C) The Secretary shall approve or disapprove a guarantee not

later than 14 calendar days after the date that the lending

institution applied to the Secretary for the guarantee. If the

Secretary rejects the loan application within the 14-day

period, the Secretary shall state, in writing, all of the

reasons the application was rejected.

(5) Relationship to other requirements

Neither this subsection nor subsection (d) of this section

shall affect the responsibility of the Secretary to certify

eligibility, review financial information, and otherwise assess

an application.

(d) Preferred Certified Lenders Program

(1) In general

Commencing not later than two years after October 28, 1992, the

Secretary shall establish a Preferred Certified Lenders Program

for lenders who establish their -

(A) knowledge of, and experience under, the program

established under subsection (c) of this section;

(B) knowledge of the regulations concerning the guaranteed

loan program; and

(C) proficiency related to the certified lender program

requirements.

The Secretary shall certify any lending institution as a

Preferred Certified Lender that meets such criteria as the

Secretary may prescribe by regulation.

(2) Revocation of designation

The designation of a lender as a Preferred Certified Lender

shall be revoked at any time that the Secretary determines that

such lender is not adhering to the rules and regulations

applicable to the program or if the loss experiences of a

Preferred Certified Lender are excessive as compared to other

Preferred Certified Lenders, except that such suspension or

revocation shall not affect any outstanding guarantee.

(3) Condition of certification

As a condition of such preferred certification, the Secretary

shall require the institution to undertake to service the loans

guaranteed by the Secretary under this subsection using generally

accepted banking standards concerning loan servicing employed by

prudent commercial or cooperative lenders. The Secretary shall,

at least annually, monitor the performance of each preferred

certified lender to ensure that the conditions of such

certification are being met.

(4) Effect of preferred lender certification

Notwithstanding any other provision of law, the Secretary shall

-

(A) guarantee 80 percent of an approved loan made by a

certified lending institution as described in this subsection,

subject to county committee certification that the borrower

meets the eligibility requirements or such other criteria as

may be applicable to loans guaranteed by the Secretary under

other provisions of this chapter;

(B) permit certified lending institutions to make all

decisions, with respect to loans to be guaranteed by the

Secretary under this subsection relating to credit worthiness,

the closing, monitoring, collection and liquidation of loans,

and to accept appropriate certifications, as provided by

regulations issued by the Secretary, that the borrower is in

compliance with all requirements of law or regulations

promulgated by the Secretary; and

(C) be deemed to have guaranteed 80 percent of a loan made by

a preferred certified lending institution as described in

paragraph (1), if the Secretary fails to approve or reject the

application of such institution within 14 calendar days after

the date that the lending institution presented the application

to the Secretary. If the Secretary rejects the application

within the 14-day period, the Secretary shall state, in

writing, the reasons the application was rejected.

(e) Administration of Certified Lenders and Preferred Certified

Lenders programs

The Secretary may administer the loan guarantee programs under

subsections (c) and (d) of this section through central offices

established in States or in multi-State areas.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 339, Aug. 8, 1961, 75 Stat. 318;

Pub. L. 102-554, Sec. 18, Oct. 28, 1992, 106 Stat. 4155; Pub. L.

106-31, title III, Sec. 3019(a), May 21, 1999, 113 Stat. 99; Pub.

L. 107-171, title V, Sec. 5309, May 13, 2002, 116 Stat. 346.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (e). Pub. L. 107-171 added subsec. (e).

1999 - Subsec. (b)(3). Pub. L. 106-31 struck out '', including

expenses of replacing capital items (determined after taking into

account depreciation of the items)'' after ''paragraph (1)''.

1992 - Pub. L. 102-554, inserted section catchline, designated

existing provisions as subsec. (a), inserted heading, and added

subsecs. (b) to (d).

REGULATIONS

Section 23 of Pub. L. 102-554 provided that:

''(a) Interim Regulations. - Not later than 180 days after the

date of enactment of this Act (Oct. 28, 1992), the Secretary of

Agriculture shall issue such interim regulations as are necessary

to implement this Act (see Short Title of 1992 Amendment note set

out under section 1921 of this title) and the amendments made by

this Act.

''(b) Final Regulations. - Not later than October 1, 1993, the

Secretary of Agriculture shall issue such final regulations as are

necessary to implement this Act and the amendments made by this

Act.''

Pub. L. 100-233, title VI, Sec. 624, Jan. 6, 1988, 101 Stat.

1685, provided that: ''Within 150 days after the date of the

enactment of this title (Jan. 6, 1988), and after considering

public comment obtained under section 553 of title 5, United States

Code, the Secretary shall issue final regulations to carry out the

amendments made by this title (enacting sections 1981d, 1981e,

1983c, and 2001 to 2005 of this title, amending sections 1927,

1927a, 1981, 1982, 1983b, 1985, 1991, 1997, 1999, and 2000 of this

title, and amending provisions set out as a note under section 1999

of this title).''

STUDY AND REPORT TO CONGRESS BEFORE ISSUANCE OF CERTAIN FINAL

REGULATIONS

Pub. L. 100-233, title VI, Sec. 621, Jan. 6, 1988, 101 Stat.

1684, provided that: ''Not later than 60 days before the Secretary

of Agriculture issues final regulations providing for the use of

ratios and standards as part of loan applications or

preapplications, for determining the degree of potential loan risk

on loans insured or guaranteed under the Consolidated Farm and

Rural Development Act (7 U.S.C. 1921 et seq.), the Secretary shall

complete a study and report to the Committee on Agriculture,

Nutrition, and Forestry of the Senate and the Committee on

Agriculture of the House of Representatives on the effects of such

regulations on a representative sample of persons who, as of the

date of the enactment of this Act (Jan. 6, 1988), are borrowers or

potential borrowers of such loans, and shall demonstrate in such

study that the implementation of such final regulations will not

result in a portfolio of borrowers that is inconsistent with the

purposes of the Consolidated Farm and Rural Development Act.''

AVAILABILITY OF FUNDS FOR CONTINUING ASSISTANCE TO DELINQUENT

BORROWERS; PROHIBITION ON USE OF FUNDS

Pub. L. 100-71, title I, July 11, 1987, 101 Stat. 429, provided

in part that:

''Hereafter, funds appropriated or available to the Farmers Home

Administration under this or any other Act to make or to service

farm loans shall be available for continuing assistance to

delinquent borrowers on the basis of the policies contained in

Farmers Home Administration Announcement Number 1113-1960, dated

November 30, 1984.

''Hereafter, none of the funds appropriated or made available by

this or any other Act, or otherwise made available to the Secretary

of Agriculture or the Farmers Home Administration, may be used to

implement section 1944.16(c)(1) of title 7, Code of Federal

Regulations, as published in 52 Federal Register 11983 (April 14,

1987) or any other regulation that would have the same effect as

such regulation.''

COORDINATED FINANCIAL STATEMENTS; USE OF SUBMISSION REQUIREMENT

PROHIBITED

Pub. L. 99-198, title XIII, Sec. 1325, Dec. 23, 1985, 99 Stat.

1540, provided that: ''The Secretary of Agriculture shall not use

or require the submission of the coordinated financial statement

referred to in the proposed regulations of the Farmers Home

Administration published in the Federal Register of November 8,

1983 (48 F.R. 51312-51317) in connection with an application

submitted on or after the date of the enactment of this Act (Dec.

23, 1985) for any loan under any program of the Department of

Agriculture carried out by the Farmers Home Administration.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1983a of this title.

-CITE-

7 USC Sec. 1990 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1990. Transfer of lands to Secretary

-STATUTE-

The President may at any time in his discretion transfer to the

Secretary any right, interest, or title held by the United States

in any lands acquired in the program of national defense and no

longer needed therefor, which the President shall find suitable for

the purposes of this chapter, and the Secretary shall dispose of

such lands in the manner and subject to the terms and conditions of

the chapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 340, Aug. 8, 1961, 75 Stat. 318.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-TRANS-

DELEGATION OF FUNCTIONS

Authority of President under this section in his discretion to

transfer to Secretary of Agriculture any right, interest or title

held by United States in any lands acquired in program of national

defense and no longer needed for that program, and to determine

suitability of lands to be transferred, for purposes referred to in

this section, delegated to Administrator of General Services,

provided, that exercise by Administrator of authority delegated to

him herein shall require concurrence of Secretary of Defense as to

absence of further need of lands for national defense program, see

section 1(15) of Ex. Ord. No. 11609, July 22, 1971, 36 F.R. 13747,

set out as a note under section 301 of Title 3, The President.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 25 section 492.

-CITE-

7 USC Sec. 1991 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1991. Definitions

-STATUTE-

(a) As used in this chapter:

(1) The term ''farmer'' includes a person who is engaged in, or

who, with assistance afforded under this chapter, intends to

engage in, fish farming.

(2) The term ''farming'' shall be deemed to include fish

farming.

(3) The term ''owner-operator'' shall include in the State of

Hawaii the lessee-operator of real property in any case in which

the Secretary determines that such real property cannot be

acquired in fee simple by such lessee-operator, that adequate

security is provided for the loan with respect to such real

property for which such lessee-operator applies under this

chapter, and that there is a reasonable probability of

accomplishing the objectives and repayment of such loan.

(4) The word ''insure'' as used in this chapter includes

guarantee, which means to guarantee the payment of a loan

originated, held, and serviced by a private financial agency or

other lender approved by the Secretary.

(5) The term ''contract of insurance'' includes a contract of

guarantee.

(6) The terms ''United States'' and ''State'' shall include

each of the several States, the Commonwealth of Puerto Rico, the

Virgin Islands of the United States, Guam, American Samoa, the

Commonwealth of the Northern Mariana Islands, and, to the extent

the Secretary determines it to be feasible and appropriate, the

Trust Territory of the Pacific Islands.

(7) The term ''joint operation'' means a joint farming

operation in which two or more farmers work together sharing

equally or unequally land, labor, equipment, expenses, and

income.

(8) The term ''beginning farmer or rancher'' means such term as

defined by the Secretary.

(9) The term ''direct loan'' means a loan made or insured from

funds in the account created by section 1929 of this title.

(10) The term ''farmer program loan'' means a farm ownership

loan (FO) under section 1923 of this title, operating loan (OL)

under section 1942 of this title, soil and water loan (SW) under

section 1924 of this title, emergency loan (EM) under section

1961 of this title, economic emergency loan (EE) under section

202 of the Emergency Agricultural Credit Adjustment Act (title II

of Public Law 95-334), economic opportunity loan (EO) under the

Economic Opportunity Act of 1961 (42 U.S.C. 2942), softwood

timber loan (ST) under section 1254 of the Food Security Act of

1985, or rural housing loan for farm service buildings (RHF)

under section 1472 of title 42.

(11) The term ''qualified beginning farmer or rancher'' means

an applicant, regardless of whether the applicant is

participating in a program under section 1935 of this title -

(A) who is eligible for assistance under this chapter;

(B) who has not operated a farm or ranch, or who has operated

a farm or ranch for not more than 10 years;

(C) in the case of a cooperative, corporation, partnership,

or joint operation, who has members, stockholders, partners, or

joint operators who are all related to one another by blood or

marriage;

(D)(i) in the case of an owner and operator of a farm or

ranch, who -

(I) in the case of a loan made to an individual,

individually or with the immediate family of the applicant -

(aa) materially and substantially participates in the

operation of the farm or ranch; and

(bb) provides substantial day-to-day labor and management

of the farm or ranch, consistent with the practices in the

State or county in which the farm or ranch is located; or

(II)(aa) in the case of a loan made to a cooperative,

corporation, partnership, or joint operation, has members,

stockholders, partners, or joint operators, materially and

substantially participate in the operation of the farm or

ranch; and

(bb) in the case of a loan made to a corporation, has

stockholders, all of whom are qualified beginning farmers or

ranchers; and

(ii) in the case of an applicant seeking to own and operate a

farm or ranch, who -

(I) in the case of a loan made to an individual,

individually or with the immediate family of the applicant,

will -

(aa) materially and substantially participate in the

operation of the farm or ranch; and

(bb) provide substantial day-to-day labor and management

of the farm or ranch, consistent with the practices in the

State or county in which the farm or ranch is located; or

(II)(aa) in the case of a loan made to a cooperative,

corporation, partnership, or joint operation, will have

members, stockholders, partners, or joint operators,

materially and substantially participate in the operation of

the farm or ranch; and

(bb) in the case of a loan made to a corporation, has

stockholders, all of whom are qualified beginning farmers or

ranchers;

(E) who agrees to participate in such loan assessment,

borrower training, and financial management programs as the

Secretary may require;

(F) who does not own land or who, directly or through

interests in family farm corporations, owns land, the aggregate

acreage of which does not exceed 30 percent of the median

acreage of the farms or ranches, as the case may be, in the

county in which the farm or ranch operations of the applicant

are located, as reported in the most recent census of

agriculture, except that this subparagraph shall not apply to a

loan made or guaranteed under subchapter II of this chapter;

and

(G) who demonstrates that the available resources of the

applicant and spouse (if any) of the applicant are not

sufficient to enable the applicant to continue farming or

ranching on a viable scale.

(12) Debt forgiveness. -

(A) In general. - Except as provided in subparagraph (B), the

term ''debt forgiveness'' means reducing or terminating a

farmer program loan made or guaranteed under this chapter, in a

manner that results in a loss to the Secretary, through -

(i) writing down or writing off a loan under section 2001

of this title;

(ii) compromising, adjusting, reducing, or charging-off a

debt or claim under section 1981 of this title;

(iii) paying a loss on a guaranteed loan under section 2005

of this title; or

(iv) discharging a debt as a result of bankruptcy.

(B) Exceptions. - The term ''debt forgiveness'' does not

include -

(i) consolidation, rescheduling, reamortization, or

deferral of a loan; or

(ii) any write-down provided as part of a resolution of a

discrimination complaint against the Secretary.

(13) Rural and rural area. -

(A) In general. - Except as otherwise provided in this

paragraph, the terms ''rural'' and ''rural area'' mean any area

other than -

(i) a city or town that has a population of greater than

50,000 inhabitants; and

(ii) the urbanized area contiguous and adjacent to such a

city or town.

(B) Water and waste disposal grants and direct and guaranteed

loans. - For the purpose of water and waste disposal grants and

direct and guaranteed loans provided under paragraphs (1), (2),

and (24) of section 1926(a) of this title, the terms ''rural''

and ''rural area'' mean a city, town, or unincorporated area

that has a population of no more than 10,000 inhabitants.

(C) Community facility loans and grants. - For the purpose of

community facility direct and guaranteed loans and grants under

paragraphs (1), (19), (20), (21), and (24) of section 1926(a)

of this title, the terms ''rural'' and ''rural area'' mean a

city, town, or unincorporated area that has a population of not

more than 20,000 inhabitants.

(D) Multijurisdictional regional planning organizations;

national rural development partnership. - In sections

1926(a)(23) and 2008m of this title, the term ''rural area''

means -

(i) all the territory of a State that is not within the

boundary of any standard metropolitan statistical area; and

(ii) all territory within any standard metropolitan

statistical area within a census tract having a population

density of less than 20 persons per square mile, as

determined by the Secretary according to the most recent

census of the United States as of any date.

(E) Rural business investment program. - In subchapter VIII

of this chapter, the term ''rural area'' means an area that is

located -

(i) outside a standard metropolitan statistical area; or

(ii) within a community that has a population of 50,000

inhabitants or less.

(b) As used in sections 1927(e), 1981d, 1985(e) and (f), 1988(b),

2000(b) and (c), 2001, and 2005 of this title:

(1) The term ''borrower'' means any farm borrower who has

outstanding obligations to the Secretary under any farmer program

loan, without regard to whether the loan has been accelerated,

but does not include any farm borrower all of whose loans and

accounts have been foreclosed on or liquidated, voluntarily or

otherwise.

(2) The term ''loan service program'' means, with respect to a

farmer program borrower, a primary loan service program or a

preservation loan service program.

(3) The term ''primary loan service program'' means -

(A) loan consolidation, rescheduling, or reamortization;

(B) interest rate reduction, including the use of the limited

resource program;

(C) loan restructuring, including deferral, set aside, or

writing down of the principal or accumulated interest charges,

or both, of the loan; or

(D) any combination of actions described in subparagraphs

(A), (B), and (C).

(4) Preservation loan service program. - The term

''preservation loan service program'' means homestead retention

as authorized under section 2000 of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 343, as added Pub. L. 87-703,

title IV, Sec. 401(5), Sept. 27, 1962, 76 Stat. 632; amended Pub.

L. 89-586, Sept. 19, 1966, 80 Stat. 809; Pub. L. 92-419, title I,

Sec. 128(a), Aug. 30, 1972, 86 Stat. 666; Pub. L. 95-334, title I,

Sec. 124, Aug. 4, 1978, 92 Stat. 428; Pub. L. 96-438, Sec. 2(2),

Oct. 13, 1980, 94 Stat. 1872; Pub. L. 99-198, title XIII, Sec.

1301(b), Dec. 23, 1985, 99 Stat. 1519; Pub. L. 100-233, title VI,

Sec. 602, Jan. 6, 1988, 101 Stat. 1665; Pub. L. 101-624, title

XVIII, Sec. 1814, title XXIII, Sec. 2388(h), Nov. 28, 1990, 104

Stat. 3824, 4053; Pub. L. 102-237, title VII, Sec. 702(h)(1), Dec.

13, 1991, 105 Stat. 1880; Pub. L. 102-554, Sec. 19, Oct. 28, 1992,

106 Stat. 4158; Pub. L. 104-127, title VI, Sec. 640, 661(h), title

VII, Sec. 749(b)(2), Apr. 4, 1996, 110 Stat. 1098, 1107, 1129; Pub.

L. 105-113, Sec. 3(c), Nov. 21, 1997, 111 Stat. 2275; Pub. L.

107-171, title V, Sec. 5310, title VI, Sec. 6020(a), May 13, 2002,

116 Stat. 346, 362.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec. (a),

see note set out under section 1921 of this title.

Section 202 of the Emergency Agricultural Credit Adjustment Act,

referred to in subsec. (a)(10), is section 202 of Pub. L. 95-334,

title II, Aug. 4, 1978, 92 Stat. 429, as amended, which was set out

in a note preceding section 1961 of this title prior to repeal by

Pub. L. 101-624, title XVIII, Sec. 1851, Nov. 28, 1990, 104 Stat.

3837.

The Economic Opportunity Act of 1961, referred to in subsec.

(a)(10), probably means the Economic Opportunity Act of 1964, Pub.

L. 88-452, Aug. 20, 1964, 78 Stat. 508, as amended, which was

classified generally to chapter 34 (Sec. 2701 et seq.) of Title 42,

The Public Health and Welfare, prior to repeal, except for titles

VIII and X, by Pub. L. 97-35, title VI, Sec. 683(a), Aug. 13, 1981,

95 Stat. 519. Titles VIII and X of the Act are classified generally

to subchapters VIII (Sec. 2991 et seq.) and X (Sec. 2996 et seq.)

of chapter 34 of Title 42. For complete classification of this Act

to the Code, see Tables.

Section 1254 of the Food Security Act of 1985, referred to in

subsec. (a)(10), is section 1254 of Pub. L. 99-198, title XII, Dec.

23, 1985, 99 Stat. 1517, which amended Pub. L. 98-258, Sec. 608,

set out as a note under section 1981 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (a)(11)(F). Pub. L. 107-171, Sec. 5310(a),

substituted ''30 percent'' for ''25 percent''.

Subsec. (a)(12)(B). Pub. L. 107-171, Sec. 5310(b), amended

heading and text of subpar. (B) generally. Prior to amendment,

text read as follows: ''The term 'debt forgiveness' does not

include consolidation, rescheduling, reamortization, or deferral.''

Subsec. (a)(13). Pub. L. 107-171, Sec. 6020(a), added par. (13).

1997 - Subsec. (a)(11)(F). Pub. L. 105-113 struck out ''taken

under section 142 of title 13'' after ''census of agriculture''.

1996 - Subsec. (a)(10). Pub. L. 104-127, Sec. 661(h)(1), struck

out ''recreation loan (RL) under section 1924 of this title,''

before ''emergency loan (EM)''.

Subsec. (a)(11). Pub. L. 104-127, Sec. 640(1)(A), in introductory

provisions, substituted ''applicant, regardless of whether the

applicant is participating in a program under section 1935 of this

title'' for ''applicant''.

Subsec. (a)(11)(F). Pub. L. 104-127, Sec. 640(1)(B), substituted

''25 percent'' for ''15 percent'' and inserted before semicolon at

end '', except that this subparagraph shall not apply to a loan

made or guaranteed under subchapter II of this chapter''.

Subsec. (a)(12). Pub. L. 104-127, Sec. 640(2), added par. (12).

Subsec. (b). Pub. L. 104-127, Sec. 661(h)(2)(A), 749(b)(2), in

introductory provisions, substituted ''1988(b), 2000(b) and (c)''

for ''1988(f), 1999(h), 2000(b) and (c)''.

Subsec. (b)(4). Pub. L. 104-127, Sec. 661(h)(2)(B), added par.

(4) and struck out former par. (4) which read as follows: ''The

term 'preservation loan service program' means -

''(A) homestead retention as authorized under section 2000 of

this title; and

''(B) a leaseback or buyback of farmland authorized under

section 1985 of this title.''

1992 - Subsec. (a). Pub. L. 102-554 substituted ''this chapter:''

and par. (1) for ''this chapter (1) the term 'farmers' shall be

deemed to include persons who are engaged in, or who, with

assistance afforded under this chapter, intend to engage in, fish

farming,'', in pars. (2) to (8), realigned margins and substituted

''The'' for ''the'' first place appearing in each par. and a period

for a comma at end of each par., in par. (9), realigned margin and

substituted ''The'' for ''the'' first place appearing and a period

for '', and'' at end, in par. (10), realigned margin and

substituted ''The'' for ''the'' first place appearing, and added

par. (11).

1991 - Subsec. (a)(1), (3). Pub. L. 102-237, Sec. 702(h)(1)(A),

(B), made technical amendment to directory language of Pub. L.

101-624, Sec. 2388(h)(1), (2). See 1990 Amendment note below.

Subsec. (a)(5). Pub. L. 102-237, Sec. 702(h)(1)(C), repealed Pub.

L. 101-624, Sec. 2388(h)(3). See 1990 Amendment note below.

1990 - Subsec. (a)(1), (3). Pub. L. 101-624, Sec. 2388(h)(1),

(2), as amended by Pub. L. 102-237, Sec. 702(h)(1)(A), (B), struck

out ''and'' after ''fish farming,'' in par. (1), and ''and'' after

''such loan,'' in par. (3).

Subsec. (a)(5). Pub. L. 101-624, Sec. 2388(h)(3), which directed

substitution of '' 'contract of insurance' '' for ''contract of

insurance'', was repealed by Pub. L. 102-237, Sec. 702(h)(1)(C).

See Construction of 1990 Amendment note below.

Subsec. (a)(8) to (10). Pub. L. 101-624, Sec. 1814, added pars.

(8) to (10).

1988 - Pub. L. 100-233 designated existing provisions as subsec.

(a) and added subsec. (b).

1985 - Pub. L. 99-198 added cl. (7).

1980 - Pub. L. 96-438 added cl. (3). For termination of former

cl. (3) as added by Pub. L. 89-586, see Effective and Termination

Date of 1966 Amendment note below.

1978 - Pub. L. 95-334 added cl. (6).

1972 - Pub. L. 92-419 added cls. (4) and (5).

1966 - Pub. L. 89-586 struck out ''and'' before ''(2)'' and

inserted cl. (3) defining ''owner-operator''. See Effective and

Termination Date of 1966 Amendment note below.

EFFECTIVE DATE OF 1997 AMENDMENT

Section 3(d) of Pub. L. 104-113 provided that: ''This section

(amending this section and repealing section 142 of Title 13,

Census) and the amendments made by this section shall take effect

October 1, 1998.''

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 640(1) of Pub. L. 104-127 effective 90 days

after Apr. 4, 1996, and amendment by sections 640(2) and 661(h) of

Pub. L. 104-127 effective Apr. 4, 1996, see section 663(a), (b) of

Pub. L. 104-127, set out as a note under section 1922 of this

title.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(7) of Pub. L. 102-237, set out as a note under section 1421

of this title.

EFFECTIVE AND TERMINATION DATE OF 1966 AMENDMENT

Pub. L. 89-586, as amended by Pub. L. 90-426, July 26, 1968, 82

Stat. 445, provided in part that the amendment made by Pub. L.

89-586 is effective only for the period of time commencing with

Sept. 19, 1966, and ending on June 30, 1970.

CONSTRUCTION OF 1990 AMENDMENT

Section 702(h)(2) of Pub. L. 102-237, as amended by Pub. L.

102-552, title V, Sec. 516(k), Oct. 28, 1992, 106 Stat. 4139,

provided that: ''The Consolidated Farm and Rural Development Act

(see Short Title note set out under section 1921 of this title)

shall be applied and administered as if the amendment made by

section 2388(h)(3) of the Food, Agriculture, Conservation, and

Trade Act of 1990 (Pub. L. 101-624, amending this section) had

never been enacted.''

-TRANS-

TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDS

For termination of Trust Territory of the Pacific Islands, see

note set out preceding section 1681 of Title 48, Territories and

Insular Possessions.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2001 of this title; title

25 section 492.

-CITE-

7 USC Sec. 1992 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1992. Loan limitations

-STATUTE-

No loan (other than one to a public body or nonprofit association

(including Indian tribes on Federal and State reservations or other

federally recognized Indian tribal groups) for community facilities

or one of a type authorized by section 1926(a)(1) of this title

prior to its amendment by the Rural Development Act of 1972) shall

be made by the Secretary either for sale as an insured loan or

otherwise under sections 1926(a)(1), 1932, or 1942(c) of this title

unless the Secretary shall have determined that no other lender is

willing to make such loan and assume 10 per centum of any loss

sustained thereon. No contract guaranteeing any such loan by such

other lender shall require the Secretary to guarantee more than 90

per centum of the principal and interest on such loan.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 344, as added Pub. L. 92-419,

title I, Sec. 129, Aug. 30, 1972, 86 Stat. 666; amended Pub. L.

94-35, Sec. 2, June 16, 1975, 89 Stat. 214; Pub. L. 104-127, title

VI, Sec. 661(i), Apr. 4, 1996, 110 Stat. 1107.)

-REFTEXT-

REFERENCES IN TEXT

For statutory changes to section 1926(a)(1) of this title by the

Rural Development Act of 1972, referred to in text, see 1972

Amendment note for section 104 of Pub. L. 92-419, set out under

section 1926 of this title. For complete classification of Rural

Development Act of 1972 to the Code, see Short Title of 1972

Amendment note set out under section 1921 of this title and Tables.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127 substituted ''1926(a)(1), 1932, or 1942(c)

of this title'' for ''1924(b), 1926(a)(1), 1932, 1942(b), or

1942(c) of this title''.

1975 - Pub. L. 94-35 substituted ''guaranteed more than 90 per

centum of the principal and interest on such loan'' for

''participate in more than 90 per centum of any loss sustained

thereon''.

-CITE-

7 USC Sec. 1993 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1993. Repealed. Pub. L. 104-127, title VII, Sec. 750, Apr. 4,

1996, 110 Stat. 1129

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 345, as added Pub. L.

94-68, Sec. 9, Aug. 5, 1975, 89 Stat. 382; amended Pub. L. 103-437,

Sec. 4(a)(7), Nov. 2, 1994, 108 Stat. 4582, related to testimony by

Secretary of Agriculture before congressional committees.

-CITE-

7 USC Sec. 1994 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1994. Maximum amounts for loans authorized; long-term cost

projections

-STATUTE-

(a) Maximum aggregate principal amounts for loans authorized

Effective October 1, 1979, the aggregate principal amount of

loans under the programs authorized under each subchapter of this

chapter during each three-year period thereafter shall not exceed

such amounts as may be authorized by law after August 4, 1978.

There shall be two amounts so established for each of such programs

and for any maximum levels provided in appropriation Acts for the

programs authorized under this chapter, one against which direct

and insured loans shall be charged and the other against which

guaranteed loans shall be charged,. (FOOTNOTE 1)

(FOOTNOTE 1) So in original.

(b) Authorization for loans

(1) In general

The Secretary may make or guarantee loans under subchapters I

and II of this chapter from the Agricultural Credit Insurance

Fund provided for in section 1929 of this title for not more than

$3,796,000,000 for each of fiscal years 2003 through 2007, of

which, for each fiscal year -

(A) $770,000,000 shall be for direct loans, of which -

(i) $205,000,000 shall be for farm ownership loans under

subchapter I of this chapter; and

(ii) $565,000,000 shall be for operating loans under

subchapter II of this chapter; and

(B) $3,026,000,000 shall be for guaranteed loans, of which -

(i) $1,000,000,000 shall be for guarantees of farm

ownership loans under subchapter I of this chapter; and

(ii) $2,026,000,000 shall be for guarantees of operating

loans under subchapter II of this chapter.

(2) Beginning farmers and ranchers

(A) Direct loans

(i) Farm ownership loans

(I) In general

Of the amounts made available under paragraph (1) for

direct farm ownership loans, the Secretary shall reserve 70

percent for qualified beginning farmers and ranchers.

(II) Down payment loans

Of the amounts reserved for a fiscal year under subclause

(I), the Secretary shall reserve 60 percent for the down

payment loan program under section 1935 of this title until

April 1 of the fiscal year.

(ii) Operating loans

Of the amounts made available under paragraph (1) for

direct operating loans, the Secretary shall reserve for

qualified beginning farmers and ranchers -

(I) for each of fiscal years 1996 through 1998, 25

percent;

(II) for fiscal year 1999, 30 percent; and

(III) for each of fiscal years 2003 through 2007, 35

percent.

(iii) Funds reserved until September 1

Except as provided in clause (i)(II), funds reserved for

qualified beginning farmers or ranchers under this

subparagraph for a fiscal year shall be reserved only until

September 1 of the fiscal year.

(B) Guaranteed loans

(i) Farm ownership loans

Of the amounts made available under paragraph (1) for

guarantees of farm ownership loans, the Secretary shall

reserve 25 percent for qualified beginning farmers and

ranchers.

(ii) Operating loans

Of the amounts made available under paragraph (1) for

guarantees of operating loans, the Secretary shall reserve 40

percent for qualified beginning farmers and ranchers.

(iii) Funds reserved until April 1

Funds reserved for qualified beginning farmers or ranchers

under this subparagraph for a fiscal year shall be reserved

only until April 1 of the fiscal year.

(C) Reserved funds for all qualified beginning farmers and

ranchers

If a qualified beginning farmer or rancher meets the

eligibility criteria for receiving a direct or guaranteed loan

under section 1922, 1935, or 1941 of this title, the Secretary

shall make or guarantee the loan if sufficient funds reserved

under this paragraph are available to make or guarantee the

loan.

(3) Transfer for down payment loans

(A) In general

Notwithstanding subsection (a) of this section, subject to

subparagraph (B) -

(i) beginning on August 1 of each fiscal year, the

Secretary shall use available unsubsidized guaranteed farm

operating loan funds to provide direct farm ownership loans

approved by the Secretary to qualified beginning farmers and

ranchers under the down payment loan program established

under section 1935 of this title, if sufficient direct farm

ownership loan funds are not otherwise available; and

(ii) beginning on September 1 of each fiscal year, the

Secretary shall use available unsubsidized guaranteed farm

operating loan funds to provide direct farm ownership loans

approved by the Secretary to qualified beginning farmers and

ranchers, if sufficient direct farm ownership loan funds are

not otherwise available.

(B) Limitation

The Secretary shall limit the transfer of funds under

subparagraph (A) so that all guaranteed farm operating loans

that have been approved, or will be approved, by the Secretary

during the fiscal year will be made to the extent of available

amounts.

(4) Transfer for credit sales of farm inventory property

(A) In general

Notwithstanding subsection (a) of this section, subject to

subparagraphs (B) and (C), beginning on September 1 of each

fiscal year, the Secretary may use available funds made

available under subchapter III of this chapter for the fiscal

year to fund the credit sale of farm real estate in the

inventory of the Secretary.

(B) Supplemental appropriations

The transfer authority provided under subparagraph (A) shall

not apply to any funds made available to the Secretary for any

fiscal year under an Act making supplemental appropriations.

(C) Limitation

The Secretary shall limit the transfer of funds under

subparagraph (A) so that all emergency disaster loans that have

been approved, or will be approved, by the Secretary during the

fiscal year will be made to the extent of available amounts.

(c) Development of long-term cost projections for loan program

authorizations

The Secretary shall develop long-term cost projections for loan

program authorizations required under subsection (a) of this

section. Each such projection shall include analyses of (1) the

long-term costs of the lending levels that the Secretary requests

to be authorized under subsection (a) of this section and (2) the

long-term costs for increases in lending levels beyond those

requested to be authorized, based on increments of $10,000,000 or

such other levels as the Secretary deems appropriate. Long-term

cost projections for the three-year period beginning with fiscal

year 1983 and each three-year period thereafter shall be submitted

to the House Committee on Agriculture, the House Committee on

Appropriations, the Senate Committee on Agriculture, Nutrition, and

Forestry, and the Senate Committee on Appropriations at the time

the requests for authorizations for those periods are submitted to

Congress. Not later than fifteen days after October 13, 1980, the

Secretary shall submit to such committees long-term cost

projections covering authorized lending levels for the loan

programs for fiscal years 1981 and 1982.

(d) Low-income, limited-resource borrowers

(1) Notwithstanding any other provision of law, not less than 25

per centum of the loans for farm ownership purposes under

subchapter I of this chapter, and not less than 25 per centum of

the loans for farm operating purposes under subchapter II of this

chapter, authorized to be insured, or made to be sold and insured,

from the Agricultural Credit Insurance Fund during each fiscal year

shall be for low-income, limited-resource borrowers.

(2) The Secretary shall provide notification to farm borrowers

under this chapter, as soon as practicable after April 10, 1984,

and in the normal course of loan making and loan servicing

operations, of the provisions of this chapter relating to

low-income, limited-resource borrowers and the procedures by which

persons may apply for loans under the low-income, limited-resource

borrower program.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 346, as added Pub. L. 95-334,

title I, Sec. 125, Aug. 4, 1978, 92 Stat. 428; amended Pub. L.

96-438, Sec. 4, Oct. 13, 1980, 94 Stat. 1876; Pub. L. 97-35, title

I, Sec. 164, Aug. 13, 1981, 95 Stat. 379; Pub. L. 98-258, title VI,

Sec. 607, Apr. 10, 1984, 98 Stat. 140; Pub. L. 99-198, title XIII,

Sec. 1317, Dec. 23, 1985, 99 Stat. 1529; Pub. L. 101-508, title I,

Sec. 1202(a), Nov. 5, 1990, 104 Stat. 1388-9; Pub. L. 101-624,

title XXIII, Sec. 2388(i), Nov. 28, 1990, 104 Stat. 4053; Pub. L.

102-237, title VII, Sec. 701(h)(1)(F), 702(i), Dec. 13, 1991, 105

Stat. 1880, 1881; Pub. L. 102-554, Sec. 20, Oct. 28, 1992, 106

Stat. 4159; Pub. L. 104-127, title VI, Sec. 641, Apr. 4, 1996, 110

Stat. 1098; Pub. L. 107-171, title V, Sec. 5311, 5312, May 13,

2002, 116 Stat. 346, 347.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a)

and (d)(2), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (b)(1). Pub. L. 107-171, Sec. 5311, reenacted

heading without change and amended text generally. Prior to

amendment, text related to guaranteed loans under subchapters I and

II of this chapter from the Agricultural Credit Insurance Fund

provided for in section 1929 of this title for fiscal years 1996 to

2002.

Subsec. (b)(2)(A)(ii)(III). Pub. L. 107-171, Sec. 5312,

substituted ''2003 through 2007'' for ''2000 through 2002''.

1996 - Subsec. (a). Pub. L. 104-127, Sec. 641(1), in second

sentence, struck out ''with or without authority for the Secretary

to transfer amounts between such categories within a given program

for more effective administration'' before period at end.

Subsec. (b). Pub. L. 104-127, Sec. 641(2), added subsec. (b) and

struck out former subsec. (b), which set forth maximum amounts for

direct and guaranteed loans under the Agricultural Credit Insurance

Fund for fiscal years 1991 to 1995.

1992 - Subsec. (b)(2). Pub. L. 102-554, Sec. 20(b), inserted

sentence at end.

Subsec. (b)(3)(D) to (G). Pub. L. 102-554, Sec. 20(c), (d), added

subpars. (D) to (G).

Subsec. (b)(5), (6). Pub. L. 102-554, Sec. 20(a), (e), added

pars. (5) and (6).

1991 - Subsec. (b). Pub. L. 102-237, Sec. 702(i), repealed Pub.

L. 101-624, Sec. 2388(i). See 1990 Amendment note below.

Subsec. (b)(3)(C). Pub. L. 102-237, Sec. 701(h)(1)(F),

substituted ''this chapter'' for ''this Act'' in two places.

1990 - Subsec. (b). Pub. L. 101-624, Sec. 2388(i), which amended

subsec. (b), in par. (1)(B), by striking ''subparagraph (C)'' and

inserting ''paragraph (3)''; in par. (1)(C), by striking

''subparagraph (A)'' and inserting ''paragraph (1)''; by

redesignating pars. (1)(A), (B), (C), (D)(i), and (E) as (1), (2),

(3), (4), and (5), respectively; in par. (2), by redesignating cls.

(i), (ii), and (iii) as subpars. (A), (B), and (C), respectively;

in subpars. (A) to (C) of par. (2), by redesignating subcls. (I)

and (II) as cls. (i) and (ii), respectively; and in par. (5), by

redesignating cls. (i), (ii), and (iii) as subpars. (A), (B), and

(C), respectively, was repealed by Pub. L. 102-237, Sec. 702(i).

See Construction of 1990 Amendment note below.

Pub. L. 101-508, Sec. 1202(a), amended subsec. (b) generally,

substituting present provisions for provisions relating to maximum

amounts for loans under the Agricultural Credit Insurance Fund and

the Rural Development Insurance Fund for fiscal years 1986 through

1988.

1985 - Subsec. (b). Pub. L. 99-198, Sec. 1317(a), amended subsec.

(b) generally, substituting provisions setting maximum amounts for

loans under the Agricultural Credit Insurance Fund and the Rural

Development Insurance Fund for each of fiscal years ending

September 30, 1986, through September 30, 1988, for provisions

setting such amounts for each of fiscal years 1980, 1981, and 1982.

Subsecs. (d), (e). Pub. L. 99-198, Sec. 1317, struck out subsec.

(d) which authorized special amounts for fiscal year 1982,

redesignated subsec. (e) as (d), and in par. (1) substituted ''25

per centum'' for ''20 per centum'' wherever appearing and ''each

fiscal year'' for ''fiscal year 1984''.

1984 - Subsec. (e). Pub. L. 98-258 added subsec. (e).

1981 - Subsec. (d). Pub. L. 97-35 added subsec. (d).

1980 - Pub. L. 96-438 designated existing provisions as subsec.

(a) and added subsecs. (b) and (c).

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by section 701(h)(1)(F) of Pub. L. 102-237 to any

provision specified therein effective as if included in act that

added provision so specified at the time such act became law, and

amendment by section 702(i) of Pub. L. 102-237 effective as if

included in the provision of the Food, Agriculture, Conservation,

and Trade Act of 1990, Pub. L. 101-624, to which the amendment

relates, see section 1101(b)(7), (c) of Pub. L. 102-237, set out as

a note under section 1421 of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101-508 effective Nov. 29, 1990, see section

1301 of Pub. L. 101-508, set out as a note under section 511r of

this title.

CONSTRUCTION OF 1990 AMENDMENT

Section 702(i) of Pub. L. 102-237 provided that: ''Subsection (i)

of section 2388 of the Food, Agriculture, Conservation, and Trade

Act of 1990 (104 Stat. 4053) (Pub. L. 101-624, amending this

section) is hereby repealed and the Consolidated Farm and Rural

Development Act (see Short Title note set out under section 1921 of

this title) shall be applied and administered as if the amendments

made by such subsection had never been enacted.''

NULLIFICATION OF RESERVATION OF FUNDS DURING FISCAL YEAR 1999 FOR

GUARANTEED LOANS FOR QUALIFIED BEGINNING FARMERS AND RANCHERS

Pub. L. 106-2, Sec. 1, Mar. 15, 1999, 113 Stat. 5, provided that:

''Amounts shall be made available pursuant to section 346(b)(1)(D)

of the Consolidated Farm and Rural Development Act (7 U.S.C.

1994(b)(1)(D)) for guaranteed loans, without regard to any

reservation under section 346(b)(2)(B) of such Act.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1923 of this title.

-CITE-

7 USC Sec. 1995 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1995. Participation and financial and technical assistance by

other Federal departments, etc., to program participants

-STATUTE-

Notwithstanding any other provision of law, other departments,

agencies, and executive establishments of the Federal Government

may participate and provide financial and technical assistance

jointly with the Secretary to any applicant to whom assistance is

being provided under any program administered by the Farmers Home

Administration. Participation by any other department, agency, or

executive establishment shall be only to the extent authorized for,

and subject to the authorities of, such other department, agency,

or executive establishment, except that any limitation on joint

participation is superseded by this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 347, as added Pub. L. 95-334,

title I, Sec. 125, Aug. 4, 1978, 92 Stat. 429.)

-CITE-

7 USC Sec. 1996 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1996. Loans to resident aliens

-STATUTE-

Notwithstanding the provisions of this chapter limiting the

making and insuring of loans to citizens of the United States, the

Secretary may make and insure loans under this chapter to aliens

lawfully admitted to the United States for permanent residence

under the Immigration and Nationality Act (8 U.S.C. 1101 et seq.):

Provided, That no loans may be made or insured under this chapter

to such aliens until the Secretary issues regulations establishing

the terms and conditions under which such aliens may receive loans:

Provided further, That the Secretary shall submit the regulations

to the Committee on Agriculture of the House of Representatives and

the Committee on Agriculture, Nutrition, and Forestry of the Senate

at least thirty days prior to the date the regulations are

published in the Federal Register.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 348, as added Pub. L. 96-438, Sec.

2(3), Oct. 13, 1980, 94 Stat. 1872.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

The Immigration and Nationality Act, referred to in text, is act

June 27, 1952, ch. 477, 66 Stat. 163, as amended, which is

classified principally to chapter 12 (Sec. 1101 et seq.) of Title

8, Aliens and Nationality. For complete classification of this Act

to the Code, see Short Title note set out under section 1101 of

Title 8 and Tables.

-CITE-

7 USC Sec. 1997 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1997. Conservation easements

-STATUTE-

(a) Definitions

For purposes of this section:

(1) The term ''governmental entity'' means any agency of the

United States, a State, or a unit of local government of a State.

(2) The terms ''highly erodible land'' and ''wetland'' have the

meanings, respectively, that such terms are given in section 3801

of title 16.

(3) The term ''wildlife'' means fish or wildlife as defined in

section 3371(a) of title 16.

(4) The term ''recreational purposes'' includes hunting.

(b) Contracts on loan security properties

Subject to subsection (c) of this section, the Secretary may

enter into a contract related to real property for conservation,

recreation, or wildlife purposes.

(c) Limitations

The Secretary may enter into a contract under subsection (b) of

this section if -

(1) such property is wetland, upland, or highly erodible land;

(2) such property is determined by the Secretary to be suitable

for the purposes involved; and

(3)(A) such property secures any loan made under any law

administered by the Secretary and held by the Secretary; and

(B) such contract better enables a qualified borrower to repay

the loan in a timely manner, as determined by the Secretary.

(d) Terms and conditions

The terms and conditions specified in each such contract shall -

(1) specify the purposes for which such real property may be

used;

(2) identify the conservation measures to be taken, and the

recreational and wildlife uses to be allowed, with respect to

such real property; and

(3) require such owner to permit the Secretary, and any person

or governmental entity designated by the Secretary, to have

access to such real property for the purpose of monitoring

compliance with such contract.

(e) Purchase; limitation upon cancellation or prepayment

(1) Subject to paragraph (2), the Secretary may reduce or forgive

the outstanding debt of a borrower -

(A) in the case of a borrower to whom the Secretary has made

one or more outstanding loans under laws administered by the

Secretary, by canceling that part of the aggregate amount of such

outstanding loans that bears the same ratio to such aggregate

amount as the number of acres of the real property of the

borrower that are subject to the contract bears to the aggregate

number of acres securing such loans; or

(B) in any other case, by treating as prepaid that part of the

principal amount of a new loan to the borrower issued and held by

the Secretary under a law administered by the Secretary that

bears the same ratio to such principal amount as the number of

acres of the real property of the borrower that are subject to

the contract bears to the aggregate number of acres securing the

new loan.

(2) The amount so canceled or treated as prepaid pursuant to

paragraph (1) shall not exceed -

(A) in the case of a delinquent loan, the value of the land on

which the contract is entered into or the difference between the

amount of the outstanding loan secured by the land and the value

of the land, whichever is greater; or

(B) in the case of a nondelinquent loan, 33 percent of the

amount of the loan secured by the land.

(f) Consultations with Director of Fish and Wildlife Service

If the Secretary elects to use the authority provided by this

section, the Secretary shall consult with the Director of the Fish

and Wildlife Service for purposes of -

(1) selecting real property in which the Secretary may enter

into contracts under this section;

(2) formulating the terms and conditions of such contracts; and

(3) enforcing such contracts.

(g) Enforcement

The Secretary, and any person or governmental entity designated

by the Secretary, may enforce a contract entered into by the

Secretary under this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 349, as added Pub. L. 99-198,

title XIII, Sec. 1318(a), Dec. 23, 1985, 99 Stat. 1530; amended

Pub. L. 100-233, title VI, Sec. 612, Jan. 6, 1988, 101 Stat. 1674;

Pub. L. 101-624, title XVIII, Sec. 1815, title XXIII, Sec. 2388(j),

Nov. 28, 1990, 104 Stat. 3825, 4053; Pub. L. 104-127, title VI,

Sec. 642, Apr. 4, 1996, 110 Stat. 1102.)

-MISC1-

AMENDMENTS

1996 - Subsec. (b). Pub. L. 104-127, Sec. 642(1), added subsec.

(b) and struck out former subsec. (b) which read as follows:

''Subject to subsection (c) of this section, the Secretary may

acquire and retain an easement in real property, for a term of not

less than 50 years, for conservation, recreational, and wildlife

purposes.''

Subsec. (c). Pub. L. 104-127, Sec. 642(2)(A), inserted heading

and substituted ''The Secretary may enter into a contract under

subsection (b) of this section if'' for ''Such easement may be

acquired or retained for real property if''.

Subsec. (c)(2). Pub. L. 104-127, Sec. 642(2)(B), inserted ''and''

at end.

Subsec. (c)(3). Pub. L. 104-127, Sec. 642(2)(C), struck out

''(i)'' after ''(3)(A)'', substituted ''administered by the

Secretary'' for ''administered by the Farmers Home

Administration'', redesignated cl. (ii) of subpar. (A) as subpar.

(B), substituted ''such contract'' for ''such easement'' and a

period for ''; or'' at end, and struck out former subpar. (B) which

read as follows: ''such property is administered under this chapter

by the Secretary; and''.

Subsec. (c)(4). Pub. L. 104-127, Sec. 642(2)(D), struck out par.

(4) which read as follows: ''such property was (except in the case

of wetland and other wildlife habitat) row cropped each year of the

3-year period ending on December 23, 1985.''

Subsec. (d). Pub. L. 104-127, Sec. 642(3), substituted

''contract'' for ''easement'' in introductory provisions and par.

(3).

Subsec. (e). Pub. L. 104-127, Sec. 642(4), in par. (1),

substituted ''reduce or forgive the outstanding debt of a

borrower'' for ''purchase any such easement from the borrower'' in

introductory provisions, in subpars. (A) and (B), substituted

''administered by the Secretary'' for ''administered by the Farmers

Home Administration'' and ''contract bears'' for ''easement

bears'', and in par. (2)(A), substituted ''contract is entered

into'' for ''easement is acquired''.

Subsec. (f). Pub. L. 104-127, Sec. 642(5), in par. (1),

substituted ''enter into contracts'' for ''acquire easements'' and

in pars. (2) and (3), substituted ''contracts'' for ''easements''.

Subsec. (g). Pub. L. 104-127, Sec. 642(6), substituted ''a

contract entered into'' for ''an easement acquired''.

1990 - Subsec. (a)(4), (5). Pub. L. 101-624, Sec. 2388(j),

redesignated par. (5) as (4).

Subsec. (c). Pub. L. 101-624, Sec. 1815(1)(A)-(D), (F), (G), in

introductory provision, struck out ''such property'' after ''real

property if'', and inserted ''such property'' after par. (1), (2),

(3)(A)(i), (3)(B), and (4) designations.

Subsec. (c)(3)(A)(ii). Pub. L. 101-624, Sec. 1815(1)(E), amended

cl. (ii) generally. Prior to amendment, cl. (ii) read as follows:

''the borrower of such loan is unable, as determined by the

Secretary, to repay such loan in a timely manner; or''.

Subsec. (e). Pub. L. 101-624, Sec. 1815(2), amended subsec. (e)

generally. Prior to amendment, subsec. (e) read as follows: ''Any

such easement acquired by the Secretary shall be purchased from the

borrower involved by canceling that part of the aggregate amount of

such outstanding loans of the borrower held by the Secretary under

laws administered by the Farmers Home Administration that bears the

same ratio to the aggregate amount of the outstanding loans of such

borrower held by the Secretary under all such laws as the number of

acres of the real property of such borrower that are subject to

such easement bears to the aggregate number of acres securing such

loans. In no case shall the amount so cancelled exceed the value

of the land on which the easement is acquired or the difference

between the amount of the outstanding loan secured by the land and

the current value of the land, whichever is greater.''

Subsec. (h). Pub. L. 101-624, Sec. 1815(9), struck out subsec.

(h) which read as follows: ''This section shall not apply with

respect to the cancellation of any part of any loan that was made

after December 25, 1985.''

1988 - Subsec. (c)(4). Pub. L. 100-233, Sec. 612(1), inserted

''and other wildlife habitat'' after ''wetland''.

Subsec. (e). Pub. L. 100-233, Sec. 612(2), inserted ''or the

difference between the amount of the outstanding loan secured by

the land and the current value of the land, whichever is greater''

at end of second sentence.

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-127 effective 90 days after Apr. 4,

1996, see section 663(b) of Pub. L. 104-127, set out as a note

under section 1922 of this title.

-CITE-

7 USC Sec. 1998 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1998. Guaranteed farm loan programs

-STATUTE-

Notwithstanding any other provision of this chapter, the

Secretary shall ensure that farm loan guarantee programs carried

out under this chapter are designed so as to be responsive to

borrower and lender needs and to include provisions under

reasonable terms and conditions for advances, before completion of

the liquidation process, of guarantee proceeds on loans in default.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 350, as added Pub. L. 99-198,

title XIII, Sec. 1319, Dec. 23, 1985, 99 Stat. 1531.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-CITE-

7 USC Sec. 1999 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 1999. Interest rate reduction program

-STATUTE-

(a) Establishment of program

The Secretary shall establish and carry out in accordance with

this section an interest rate reduction program for loans

guaranteed under this chapter.

(b) Contracts with lenders

Under such program, the Secretary shall enter into a contract

with, and make payments to, a legally organized institution to

reduce during the term of such contract the interest rate paid by a

borrower on a guaranteed loan made by such institution if -

(1) the borrower -

(A) is unable to obtain sufficient credit elsewhere to

finance the actual needs of the borrower at reasonable rates

and terms, taking into consideration private and cooperative

rates and terms for a loan for a similar purpose and period of

time in the community in or near which the borrower resides;

(B) is otherwise unable to make payments on such loan in a

timely manner; and

(C) has a total estimated cash income during the 24-month

period beginning on the date such contract is entered into

(including all farm and nonfarm income) that will equal or

exceed the total estimated cash expenses to be incurred by the

borrower during such period (including all farm and nonfarm

expenses); and

(2) the lender reduces during the term of such contract the

annual rate of interest payable on such loan by a minimum

percentage specified in such contract.

(c) Payments to lenders

In return for a contract entered into by a lender under

subsection (b) of this section for the reduction of the interest

rate paid on a loan, the Secretary shall make payments to the

lender in an amount equal to not more than 100 percent of the cost

of reducing the annual rate of interest payable on such loan,

except that such payments may not exceed the cost of reducing such

rate by more than 4 percent.

(d) Duration of contracts

The term of a contract entered into under this section to reduce

the interest rate on a guaranteed loan may not exceed the

outstanding term of such loan.

(e) Agricultural Credit Insurance Fund use limitation

(1) Notwithstanding any other provision of this chapter, the

Agricultural Credit Insurance Fund established under section 1929

of this title may be used by the Secretary to carry out this

section.

(2) Maximum amount of funds. -

(A) In general. - The total amount of funds used by the

Secretary to carry out this section for a fiscal year shall not

exceed $750,000,000.

(B) Beginning farmers and ranchers. -

(i) In general. - The Secretary shall reserve not less than

15 percent of the funds used by the Secretary under

subparagraph (A) to make payments for guaranteed loans made to

beginning farmers and ranchers.

(ii) Duration of reservation of funds. - Funds reserved for

beginning farmers or ranchers under clause (i) for a fiscal

year shall be reserved only until March 1 of the fiscal year.

(f) List of lender participants in guaranteed loan program

The Secretary shall make available to farmers, on request, a list

of lenders in the area that participate in guaranteed farm loan

programs and other lenders in the area that express a desire to

participate in such programs and that request inclusion in the

list.

(g) Foreclosure action provision in farm loan guarantees

Notwithstanding any other provision of law, each contract of

guarantee on a farm loan entered into under this chapter after

January 6, 1988, shall contain a condition that the lender of the

guaranteed loan may not initiate foreclosure action on the loan

until 60 days after a determination is made with respect to the

eligibility of the borrower thereof to participate in the program

under this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 351, as added Pub. L. 99-198,

title XIII, Sec. 1320, Dec. 23, 1985, 99 Stat. 1532; amended Pub.

L. 100-233, title VI, Sec. 613(b), (c), Jan. 6, 1988, 101 Stat.

1674; Pub. L. 101-508, title I, Sec. 1202(b)(1), (c), Nov. 5, 1990,

104 Stat. 1388-10, 1388-11; Pub. L. 104-105, title II, Sec. 220,

Feb. 10, 1996, 110 Stat. 184; Pub. L. 104-127, title VI, Sec.

643(a), Apr. 4, 1996, 110 Stat. 1102; Pub. L. 107-171, title V,

Sec. 5313, May 13, 2002, 116 Stat. 347.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs.

(a)(1), (e)(1), and (g), see note set out under section 1921 of

this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171, Sec. 5313(1), struck out

par. (1) designation and heading and struck out heading and text of

par. (2). Text read as follows: ''The authority provided by this

subsection shall terminate on September 30, 2002.''

Subsec. (e)(2). Pub. L. 107-171, Sec. 5313(2), added par. (2) and

struck out former par. (2) which read as follows: ''The total

amount of funds used by the Secretary to carry out this section may

not exceed $490,000,000.''

1996 - Subsec. (a). Pub. L. 104-105 inserted heading, designated

existing provisions as par. (1) and inserted heading, and added

par. (2).

Subsec. (f). Pub. L. 104-127, Sec. 643(a)(1), substituted ''The

Secretary'' for ''Each Farmers Home Administration county

supervisor'' and ''list of lenders'' for ''list of approved

lenders'' and struck out ''the Farmers Home Administration'' before

''guaranteed farm loan programs''.

Subsec. (h). Pub. L. 104-127, Sec. 643(a)(2), struck out subsec.

(h) which established a demonstration project during 4-year period

beginning Jan. 6, 1988, for purchase of Farm Credit System land.

1990 - Subsec. (c). Pub. L. 101-508, Sec. 1202(b)(1)(A),

substituted ''100 percent'' for ''50 percent'' and ''4 percent''

for ''2 percent''.

Subsec. (d). Pub. L. 101-508, Sec. 1202(b)(1)(B), struck out '',

or 3 years, whichever is less'' after ''term of such loan''.

Subsec. (h)(1). Pub. L. 101-508, Sec. 1202(c), substituted

''4-year'' for ''3-year''.

1988 - Subsec. (b)(1)(C). Pub. L. 100-233, Sec. 613(b)(1),

substituted ''24-month'' for ''12-month''.

Subsecs. (f), (g). Pub. L. 100-233, Sec. 613(b)(2), added

subsecs. (f) and (g).

Subsec. (h). Pub. L. 100-233, Sec. 613(c), added subsec. (h).

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101-508 effective Nov. 29, 1990, see section

1301 of Pub. L. 101-508, set out as a note under section 511r of

this title.

EFFECTIVE AND TERMINATION DATES

That part of section 1320 of Pub. L. 99-198, as amended by Pub.

L. 100-233, title VI, Sec. 613(a), Jan. 6, 1988, 101 Stat. 1674;

Pub. L. 101-508, title I, Sec. 1202(b)(2), Nov. 5, 1990, 104 Stat.

1388-11, which provided that this section was effective only for

the period beginning Dec. 23, 1985, and ending Sept. 30, 1995, was

repealed by Pub. L. 104-127, title VI, Sec. 643(b), Apr. 4, 1996,

110 Stat. 1103.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1983a of this title.

-CITE-

7 USC Sec. 2000 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2000. Homestead protection

-STATUTE-

(a) Definitions

As used in this section:

(1) The term ''Administrator'' means the Administrator of the

Small Business Administration.

(2) The term ''borrower-owner'' means -

(A) a borrower of a loan made or insured by the Secretary or

the Administrator who meets the eligibility requirements of

subsection (c)(1) of this section; or

(B) in any case in which an owner of homestead property

pledged the property to secure the loan and the owner is

different than the borrower, the owner.

(3) The term ''farm program loan'' means any loan made by the

Administrator under the Small Business Act (15 U.S.C. 631 et

seq.) for any of the purposes authorized for loans under

subchapters (FOOTNOTE 1) I or II of this chapter.

(FOOTNOTE 1) So in original. Probably should be ''subchapter''.

(4) The term ''homestead property'' means the principal

residence and adjoining property possessed and occupied by a

borrower-owner specified in paragraph (2) of this subsection,

including a reasonable number of farm outbuildings located on the

adjoining land that are useful to the occupants of the homestead,

and no more than 10 acres of adjoining land that is used to

maintain the family of the individual.

(5) The term ''Secretary'' means the Secretary of Agriculture.

(b) Occupancy of homestead upon foreclosure, bankruptcy, or

liquidation; appraisal; period of occupancy

(1) The Secretary or the Administrator shall, on application by a

borrower-owner who meets the eligibility requirements of subsection

(c)(1) of this section, permit the borrower-owner to retain

possession and occupancy of homestead property under the terms set

forth, and until the action described in this section has been

completed, if -

(A) the Secretary forecloses, holds in inventory on January 6,

1988, or takes into inventory, property securing a loan made or

insured under this chapter;

(B) the Administrator forecloses, holds in inventory on January

6, 1988, or takes into inventory, property securing a farm

program loan made under the Small Business Act (15 U.S.C. 631 et

seq.); or

(C) the borrower-owner of a loan made or insured by the

Secretary or the Administrator files a petition in bankruptcy

that results in the conveyance of the homestead property to the

Secretary or the Administrator, or agrees to voluntarily

liquidate or convey such property in whole or in part.

(2) The value of the homestead property shall be determined

insofar as possible by an independent appraisal made within six

months from the date of the borrower-owner's application to retain

possession and occupancy of the homestead property.

(3) The period of occupancy of homestead property under this

subsection may not exceed five years, but in no case shall the

Secretary or the Administrator grant a period of occupancy less

than three years, subject to compliance with the requirements of

subsection (c) of this section.

(c) Terms and conditions

(1) To be eligible to occupy homestead property, a borrower-owner

of a loan made or insured by the Secretary or the Administrator

shall -

(A) apply for such occupancy not later than 30 days after the

property is acquired by the Secretary or Administrator, or for

property in inventory on January 6, 1988, the borrower-owner

shall apply for occupancy not later than 30 days after January 6,

1988;

(B) have received from farming or ranching operations gross

farm income reasonably commensurate with -

(i) the size and location of the farming unit of the

borrower-owner; and

(ii) local agricultural conditions (including natural and

economic conditions), in at least 2 calendar years during the

6-year period preceding the calendar year in which the

application is made;

(C) have received from farming or ranching operations at least

60 percent of the gross annual income of the borrower-owner and

any spouse of the borrower-owner in at least 2 calendar years

during any 6-year period described in subparagraph (B);

(D) have continuously occupied the homestead property during

the 6-year period described in subparagraph (B), except that such

requirement may be waived if a borrower-owner has, due to

circumstances beyond the control of the borrower-owner, had to

leave the homestead property for a period of time not to exceed

12 months during the 6-year period;

(E) during the period of the occupancy of the homestead

property, pay a reasonable sum as rent for such property to the

Secretary or the Administrator in an amount substantially

equivalent to rents charged for similar residential properties in

the area in which the homestead property is located;

(F) during the period of the occupancy of the homestead

property, maintain the property in good condition; and

(G) meet such other reasonable and necessary terms and

conditions as the Secretary may require consistent with this

section.

(2) For purposes of subparagraphs (B) and (C) of paragraph (1),

the term ''farming or ranching operations'' shall include rent paid

by lessees of agricultural land during any period in which the

borrower-owner, due to circumstances beyond the control of the

borrower-owner, is unable to actively farm such land.

(3) For the purposes of paragraph (1)(E), the failure of the

borrower-owner to make timely rental payments shall constitute

cause for the termination of all rights of such borrower-owner to

possession and occupancy of the homestead property under this

section. In effecting any such termination, the Secretary shall

afford the borrower-owner or lessee the notice and hearing

procedural rights described in section 1983b (FOOTNOTE 2) of this

title and shall comply with all applicable State and local laws

governing eviction from residential property.

(FOOTNOTE 2) See References in Text note below.

(4)(A) The period of occupancy allowed the prior owner of

homestead property under this section shall be the period requested

in writing by the prior owner, except that such period shall not

exceed 5 years.

(B) At any time during the period of occupancy, the

borrower-owner shall have a right of first refusal to reacquire the

homestead property on such terms and conditions as the Secretary

shall determine, except that the Secretary may not demand a payment

for the homestead property that is in excess of the current market

value of the homestead property as established by an independent

appraisal. The independent appraisal shall be conducted by an

appraiser selected by the borrower-owner from a list of three

appraisers approved by the county supervisor.

(5) No rights of a borrower-owner under this section, and no

agreement entered into between the borrower-owner and the Secretary

for occupancy of the homestead property, shall be transferable or

assignable by the borrower-owner or by operation of any law, except

that in the case of death or incompetency of such borrower-owner,

such rights and agreements shall be transferable to the spouse of

the borrower-owner if the spouse agrees to comply with the terms

and conditions thereof.

(6) Not later than the date of acquisition of the property

securing a loan made under this chapter (or, in the case of real

property in inventory on April 4, 1996, not later than 5 days after

April 4, 1996), the Secretary shall notify the borrower-owner from

whom the property was acquired of the availability of homestead

protection rights under this section.

(d) First right of refusal of reacquisition

At the end of the period of occupancy described in subsection (c)

of this section, the Secretary or the Administrator shall grant to

the borrower-owner a first right of refusal to reacquire the

homestead property on such terms and conditions (which may include

payment of principal in installments) as the Secretary or the

Administrator shall determine. Such terms and conditions shall not

be less favorable than those intended to be offered to any other

buyer.

(e) Value as measure of reacquisition payment of principal

At the time any reacquisition agreement is entered into, the

Secretary or the Administrator may not demand a total payment of

principal that is in excess of the value of the homestead property

as established under subsection (b)(2) of this section.

(f) Contract authority

The Secretary may enter into contracts authorized by this section

before the Secretary acquires title to the homestead property.

(g) Conflict between Federal and State law

In the event of any conflict between this section and any

provision of the law of any State relating to the right of a

borrower-owner to designate for separate sale or redeem part or all

of the real property securing a loan foreclosed on by the lender

thereof, such provision of State law shall prevail.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 352, as added Pub. L. 99-198,

title XIII, Sec. 1321, Dec. 23, 1985, 99 Stat. 1532; amended Pub.

L. 100-233, title VI, Sec. 614, Jan. 6, 1988, 101 Stat. 1675; Pub.

L. 102-237, title V, Sec. 501(g), title VII, Sec. 701(h)(2), Dec.

13, 1991, 105 Stat. 1867, 1880; Pub. L. 102-552, title V, Sec.

516(i), (j)(1), Oct. 28, 1992, 106 Stat. 4138; Pub. L. 104-127,

title VI, Sec. 644, Apr. 4, 1996, 110 Stat. 1103.)

-REFTEXT-

REFERENCES IN TEXT

The Small Business Act, referred to in subsecs. (a)(3) and

(b)(1)(B), is Pub. L. 85-536, July 18, 1958, 72 Stat. 384, as

amended, which is classified generally to chapter 14A (Sec. 631 et

seq.) of Title 15, Commerce and Trade. For complete classification

of this Act to the Code, see Short Title note set out under section

631 of Title 15 and Tables.

For definition of ''this chapter'', referred to in subsecs.

(b)(1)(A) and (c)(6), see note set out under section 1921 of this

title.

Section 1983b of this title, referred to in subsec. (c)(3), was

repealed by Pub. L. 103-354, title II, Sec. 281(c), Oct. 13, 1994,

108 Stat. 3233.

-MISC2-

AMENDMENTS

1996 - Subsec. (c)(1)(A). Pub. L. 104-127, Sec. 644(1),

substituted ''30'' for ''90'' in two places.

Subsec. (c)(6). Pub. L. 104-127, Sec. 644(2), substituted ''Not

later than the date of acquisition of the property securing a loan

made under this chapter (or, in the case of real property in

inventory on April 4, 1996, not later than 5 days after April 4,

1996),'' for ''Within 30 days of the acquisition of the homestead

property securing a loan made or insured under this chapter,'' and

struck out at end ''For property in inventory on January 6, 1988,

the Secretary shall make a good faith effort to notify the

borrower-owner of the availability of homestead protection rights

under this section within 60 days after January 6, 1988.''

1992 - Subsec. (a)(4), (5). Pub. L. 102-552, Sec. 516(i),

redesignated par. (4), defining ''Secretary'', as (5).

Subsec. (b)(2). Pub. L. 102-552, Sec. 516(j)(1), substituted

''borrower-owner's'' for ''borrower's''.

1991 - Subsec. (a)(2) to (4). Pub. L. 102-237, Sec. 501(g), added

par. (2), redesignated former pars. (2) and (3) as (3) and (4),

respectively, and substituted ''borrower-owner'' for ''borrower''

in redesignated par. (4).

Subsec. (b)(1). Pub. L. 102-237, Sec. 501(g)(2), substituted

''borrower-owner'' for ''borrower'' wherever appearing.

Subsec. (b)(3). Pub. L. 102-237, Sec. 701(h)(2), struck out

''be'' after ''shall''.

Subsecs. (c), (d), (g). Pub. L. 102-237, Sec. 501(g)(2),

substituted ''borrower-owner'' for ''borrower'' wherever appearing.

1988 - Subsec. (a)(3). Pub. L. 100-233, Sec. 614(1), inserted '',

including a reasonable number of farm outbuildings located on the

adjoining land that are useful to the occupants of the homestead,

and no more than 10 acres of adjoining land that is used to

maintain the family of the individual''.

Subsec. (b)(1). Pub. L. 100-233, Sec. 614(2), added par. (1) and

struck out former par. (1) which read as follows: ''If the

Secretary forecloses a loan made or insured under this chapter, the

Administrator forecloses a farm program loan made under the Small

Business Act (15 U.S.C. 631 et seq.), or a borrower of a loan made

or insured by either agency declares bankruptcy or goes into

voluntary liquidation to avoid foreclosure or bankruptcy, the

Secretary or Administrator may upon application by the borrower,

permit the borrower to retain possession and occupancy of any

principal residence of the borrower, and a reasonable amount of

adjoining land for the purpose of family maintenance.''

Subsec. (c). Pub. L. 100-233, Sec. 614(3), completely revised and

restated subsec. (c), substituting pars. (1) to (6) for former

pars. (1) to (8).

Subsec. (d). Pub. L. 100-233, Sec. 614(3), inserted at end ''Such

terms and conditions shall not be less favorable than those

intended to be offered to any other buyer.''

Subsecs. (f), (g). Pub. L. 100-233, Sec. 614(4), added subsecs.

(f) and (g).

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-127 effective Apr. 4, 1996, but not

applicable with respect to complete application to acquire

inventory property submitted prior to Apr. 4, 1996, see section

663(a), (c) of Pub. L. 104-127, set out as a note under section

1922 of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Section 516(j)(2) of Pub. L. 102-552 provided that: ''The

amendment made by paragraph (1) of this subsection (amending this

section) shall take effect at the same time as the amendments made

by section 501(f) of the Food, Agriculture, Conservation, and Trade

Act Amendments of 1991 (Public Law 102-237; 105 Stat. 1867)

(amending section 1985 of this title) took effect.''

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by section 701(h)(2) of Pub. L. 102-237 to any

provision specified therein effective as if included in act that

added provision so specified at the time such act became law, see

section 1101(c) of Pub. L. 102-237, set out as a note under section

1421 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1991 of this title.

-CITE-

7 USC Sec. 2001 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2001. Debt restructuring and loan servicing

-STATUTE-

(a) In general

The Secretary shall modify delinquent farmer program loans made

or insured under this chapter, or purchased from the lender or the

Federal Deposit Insurance Corporation under section 1929b of this

title, to the maximum extent possible -

(1) to avoid losses to the Secretary on such loans, with

priority consideration being placed on writing-down the loan

principal and interest (subject to subsections (d) and (e) of

this section), and debt set-aside (subject to subsection (e) of

this section), whenever these procedures would facilitate keeping

the borrower on the farm or ranch, or otherwise through the use

of primary loan service programs as provided in this section; and

(2) to ensure that borrowers are able to continue farming or

ranching operations.

(b) Eligibility

To be eligible to obtain assistance under subsection (a) of this

section -

(1) the delinquency must be due to circumstances beyond the

control of the borrower, as defined in regulations issued by the

Secretary, except that the regulations shall require that, if the

value of the assets calculated under subsection (c)(2)(A)(ii) of

this section that may be realized through liquidation or other

methods would produce enough income to make the delinquent loan

current, the borrower shall not be eligible for assistance under

subsection (a) of this section;

(2) the borrower must have acted in good faith with the

Secretary in connection with the loan as defined in regulations

issued by the Secretary;

(3) the borrower must present a preliminary plan to the

Secretary that contains reasonable assumptions that demonstrate

that the borrower will be able to -

(A) meet the necessary family living and farm operating

expenses; and

(B) service all debts, including those of the loans

restructured; and

(4) the loan, if restructured, must result in a net recovery to

the Federal Government, during the term of the loan as

restructured, that would be more than or equal to the net

recovery to the Federal Government from an involuntary

liquidation or foreclosure on the property securing the loan.

(c) Restructuring determinations

(1) Determination of net recovery

In determining the net recovery from the involuntary

liquidation of a loan under this section, the Secretary shall

calculate -

(A) the recovery value of the collateral securing the loan,

in accordance with paragraph (2); and

(B) the value of the restructured loan, in accordance with

paragraph (3).

(2) Recovery value

For the purpose of paragraph (1), the recovery value of the

collateral securing the loan shall be based on -

(A)(i) the amount of the current appraised value of the

interests of the borrower in the property securing the loan;

plus

(ii) the value of the interests of the borrower in all other

assets that are -

(I) not essential for necessary family living expenses;

(II) not essential to the operation of the farm; and

(III) not exempt from judgment creditors or in a bankruptcy

action under Federal or State law; less

(B) the estimated administrative, legal, and other expenses

associated with the liquidation and disposition of the loan and

collateral, including -

(i) the payment of prior liens;

(ii) taxes and assessments, depreciation, management costs,

the yearly percentage decrease or increase in the value of

the property, and lost interest income, each calculated for

the average holding period for the type of property involved;

(iii) resale expenses, such as repairs, commissions, and

advertising; and

(iv) other administrative and attorney's costs; plus

(C) the value, as determined by the Secretary, of any

property not included in subparagraph (A)(i) if the property is

specified in any security agreement with respect to such loan

and the Secretary determines that the value of such property

should be included for purposes of this section.

(3) Value of the restructured loan

(A) In general

For the purpose of paragraph (1), the value of the

restructured loan shall be based on the present value of

payments that the borrower would make to the Federal Government

if the terms of such loan were modified under any combination

of primary loan service programs to ensure that the borrower is

able to meet such obligations and continue farming operations.

(B) Present value

For the purpose of calculating the present value referred to

in subparagraph (A), the Secretary shall use a discount rate of

not more than the current rate on 90-day Treasury bills.

(C) Cash flow margin

For the purpose of assessing under subparagraph (A) the

ability of a borrower to meet debt obligations and continue

farming operations, the Secretary shall assume that the

borrower needs up to 110 percent of the amount indicated for

payment of farm operating expenses, debt service obligations,

and family living expenses.

(4) Notification

Within 90 days after receipt of a written request for

restructuring from the borrower, the Secretary shall -

(A) make the calculations specified in paragraphs (2) and

(3);

(B) notify the borrower in writing of the results of such

calculations; and

(C) provide documentation for the calculations.

(5) Restructuring of loans

If the value of the restructured loan is greater than or equal

to the recovery value, the Secretary shall, within 45 days after

notifying the borrower of such calculations, offer to restructure

the loan obligations of the borrower under this chapter through

primary loan service programs that would enable the borrower to

meet the obligations (as modified) under the loan and to continue

the farming operations of the borrower. If the borrower accepts

such offer, within 45 days after receipt of notice of acceptance,

the Secretary shall restructure the loan accordingly.

(6) Termination of loan obligations

The obligations of a borrower to the Secretary under a loan

shall terminate if -

(A) the borrower satisfies the requirements of paragraphs (1)

and (2) of subsection (b) of this section;

(B) the value of the restructured loan is less than the

recovery value; and

(C) not later than 90 days after receipt of the notification

described in paragraph (4)(B), the borrower pays (or obtains

third-party financing to pay) the Secretary an amount equal to

the current market value.

(7) Negotiation of appraisal

(A) In general

In making a determination concerning restructuring under this

subsection, the Secretary, at the request of the borrower,

shall enter into negotiations concerning appraisals required

under this subsection with the borrower.

(B) Independent appraisal

If the borrower, based on a separate current appraisal,

objects to the decision of the Secretary regarding an

appraisal, the borrower and the Secretary shall mutually agree,

to the extent practicable, on an independent appraiser who

shall conduct another appraisal of the borrower's property.

The average of the two appraisals that are closest in value

shall become the final appraisal under this paragraph. The

borrower and the Secretary shall each pay one-half of the cost

of the independent appraisal.

(d) Principal and interest write-down

(1) In general

(A) Priority consideration

In selecting the restructuring alternatives to be used in the

case of a borrower who has requested restructuring under this

section, the Secretary shall give priority consideration to the

use of principal and interest write-down, except that this

procedure shall not be given first priority in the case of a

borrower unless other creditors of such borrower (other than

those creditors who are fully collateralized) representing a

substantial portion of the total debt of the borrower held by

such creditors, agree to participate in the development of the

restructuring plan or agree to participate in a State mediation

program.

(B) Failure of creditors to agree

Failure of creditors to agree to participate in the

restructuring plan or mediation program shall not preclude the

use of principal and interest write-down by the Secretary if

the Secretary determines that this restructuring alternative

results in the least cost to the Secretary.

(2) Participation of creditors

Before eliminating the option to use debt write-down in the

case of a borrower, the Secretary shall make a reasonable effort

to contact the creditors of such borrower, either directly or

through the borrower, and encourage such creditors to participate

with the Secretary in the development of a restructuring plan for

the borrower.

(e) Shared appreciation arrangements

(1) In general

As a condition of restructuring a loan in accordance with this

section, the borrower of the loan may be required to enter into a

shared appreciation arrangement that requires the repayment of

amounts written off or set aside.

(2) Terms

Shared appreciation agreements shall have a term not to exceed

10 years, and shall provide for recapture based on the difference

between the appraised values of the real security property at the

time of restructuring and at the time of recapture.

(3) Percentage of recapture

The amount of the appreciation to be recaptured by the

Secretary shall be 75 percent of the appreciation in the value of

such real security property if the recapture occurs within 4

years of the restructuring, and 50 percent if the recapture

occurs during the remainder of the term of the agreement.

(4) Time of recapture

Recapture shall take place at the end of the term of the

agreement, or sooner -

(A) on the conveyance of the real security property;

(B) on the repayment of the loans; or

(C) if the borrower ceases farming operations.

(5) Transfer of title

Transfer of title to the spouse of a borrower on the death of

such borrower shall not be treated as a conveyance for the

purpose of paragraph (4).

(6) Notice of recapture

Beginning with fiscal year 2000 not later than 12 months before

the end of the term of a shared appreciation arrangement, the

Secretary shall notify the borrower involved of the provisions of

the arrangement.

(7) Financing of recapture payment

(A) In general

The Secretary may amortize a recapture payment owed to the

Secretary under this subsection.

(B) Term

The term of an amortization under this paragraph may not

exceed 25 years.

(C) Interest rate

(i) In general

The interest rate applicable to an amortization under this

paragraph may not exceed the rate applicable to a loan to

reacquire homestead property less 100 basis points.

(ii) Existing amortizations and loans

The interest rate applicable to an amortization or loan

made by the Secretary before October 28, 2000, to finance a

recapture payment owed to the Secretary under this subsection

may not exceed the rate applicable to a loan to reacquire

homestead property less 100 basis points.

(D) Reamortization

(i) In general

The Secretary may modify the amortization of a recapture

payment referred to in subparagraph (A) of this paragraph on

which a payment has become delinquent by using loan service

tools under section 1991(b)(3) of this title if -

(I) the default is due to circumstances beyond the

control of the borrower; and

(II) the borrower acted in good faith (as determined by

the Secretary) in attempting to repay the recapture amount.

(ii) Limitations

(I) Term of reamortization

The term of a reamortization under this subparagraph may

not exceed 25 years from the date of the original

amortization agreement.

(II) No reduction or principal or unpaid interest due

A reamortization of a recapture payment under this

subparagraph may not provide for reducing the outstanding

principal or unpaid interest due on the recapture payment.

(f) Determination to restructure

If the appeal process results in a determination that a loan is

eligible for restructuring, the Secretary shall restructure the

loan in the manner consistent with this section, taking into

consideration the restructuring recommendations, if any, of the

appeals officer.

(g) Prerequisites to foreclosure or liquidation

No foreclosure or other similar actions shall be taken to

liquidate any loan determined to be ineligible for restructuring by

the Secretary under this section -

(1) until the borrower has been given the opportunity to appeal

such decision; and

(2) if the borrower appeals, the appeals process has been

completed, and a determination has been made that the loan is

ineligible for restructuring.

(h) Time limits for restructuring

Once an appeal has been filed under section 1983b (FOOTNOTE 1) of

this title, a decision shall be made at each level in the appeals

process within 45 days after the receipt of the appeal or request

for further review.

(FOOTNOTE 1) See References in Text note below.

(i) Notice of ineligibility for restructuring

(1) In general

A notice of ineligibility for restructuring shall be sent to

the borrower by registered or certified mail within 15 days after

such determination.

(2) Contents

The notice required under paragraph (1) shall contain -

(A) the determination and the reasons for the determination;

(B) the computations used to make the determination,

including the calculation of the recovery value of the

collateral securing the loan; and

(C) a statement of the right of the borrower to appeal the

decision to the appeals division, and to appear before a

hearing officer.

(j) Independent appraisals

An appeal filed with the appeals division under section 1983b of

this title may include a request by the borrower for an independent

appraisal of any property securing the loan. On such request, the

appeals division shall present the borrower with a list of three

appraisers approved by the county supervisor, from which the

borrower shall select an appraiser to conduct the appraisal, the

cost of which shall be borne by the borrower. The results of such

appraisal shall be considered in any final determination concerning

the loan. A copy of any appraisal made under this paragraph shall

be provided to the borrower.

(k) Partial liquidations

If partial liquidations are performed (with the prior consent of

the Secretary) as part of loan servicing by a guaranteed lender

under this chapter, the Secretary shall not require full

liquidation of a delinquent loan in order for the lender to be

eligible to receive payment on losses.

(l) Disposition of normal income security

For purposes of subsection (b)(2) of this section, if a borrower

-

(1) disposed of normal income security prior to October 14,

1988, without the consent of the Secretary; and

(2) demonstrates that -

(A) the proceeds were utilized to pay essential household and

farm operating expenses; and

(B) the borrower would have been entitled to a release of

income proceeds by the Secretary if the regulations in effect

on November 28, 1990, had been in effect at the time of the

disposition,

the Secretary shall not consider the borrower to have acted without

good faith to the extent of the disposition.

(m) Only 1 write-down or net recovery buy-out per borrower for loan

made after January 6, 1988

(1) In general

The Secretary may provide for any one borrower not more than 1

write-down or net recovery buy-out under this section with

respect to all loans made to the borrower after January 6, 1988.

(2) Special rule

For purposes of paragraph (1), the Secretary shall treat any

loan made on or before January 6, 1988, with respect to which a

restructuring, write-down, or net recovery buy-out is provided

under this section after such date, as a loan made after such

date.

(n) Liquidation of assets

The Secretary may not use the authority provided by this section

to reduce or terminate any portion of the debt of the borrower that

the borrower could pay through the liquidation of assets (or

through the payment of the loan value of the assets, if the loan

value is greater than the liquidation value) described in

subsection (c)(2)(A)(ii) of this section.

(o) Lifetime limitation on debt forgiveness per borrower

The Secretary may provide not more than $300,000 in principal and

interest forgiveness under this section per borrower.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 353, as added Pub. L. 100-233,

title VI, Sec. 615(a), Jan. 6, 1988, 101 Stat. 1678; amended Pub.

L. 101-624, title XVIII, Sec. 1816(a)-(d), (f)-(h), Nov. 28, 1990,

104 Stat. 3826-3828; Pub. L. 102-237, title V, Sec. 501(h), Dec.

13, 1991, 105 Stat. 1868; Pub. L. 104-127, title VI, Sec. 645,

661(j), Apr. 4, 1996, 110 Stat. 1103, 1107; Pub. L. 105-277, div.

A, Sec. 101(a) (title VIII, Sec. 807, 808), Oct. 21, 1998, 112

Stat. 2681, 2681-40; Pub. L. 106-31, title III, Sec. 3019(b), May

21, 1999, 113 Stat. 99; Pub. L. 106-387, Sec. 1(a) (title VIII,

Sec. 818(a)), Oct. 28, 2000, 114 Stat. 1549, 1549A-58; Pub. L.

107-171, title V, Sec. 5314, May 13, 2002, 116 Stat. 347.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a),

(c)(5), and (k), see note set out under section 1921 of this title.

Section 1983b of this title, referred to in subsec. (h), was

repealed by Pub. L. 103-354, title II, Sec. 281(c), Oct. 13, 1994,

108 Stat. 3233.

-MISC2-

AMENDMENTS

2002 - Subsec. (e)(7)(D). Pub. L. 107-171 added subpar. (D).

2000 - Subsec. (e)(7). Pub. L. 106-387 added par. (7).

1999 - Subsec. (c)(3)(C). Pub. L. 106-31 substituted ''110

percent'' for ''100 percent''.

1998 - Subsec. (c)(3)(C). Pub. L. 105-277, Sec. 101(a) (title

VIII, Sec. 808), substituted ''100 percent'' for ''110 percent''.

Subsec. (e)(6). Pub. L. 105-277, Sec. 101(a) (title VIII, Sec.

807), added par. (6).

1996 - Subsec. (c)(3)(C). Pub. L. 104-127, Sec. 645(1)(A), added

subpar. (C) and struck out heading and text of former subpar. (C).

Text read as follows:

''(i) Assumption. - For the purpose of assessing under

subparagraph (A) the ability of a borrower to meet debt obligations

and continue farming operations, the Secretary shall assume that

the borrower needs up to 105 percent of the amount indicated for

payment of debt obligations.

''(ii) Available income. - If an amount up to 105 percent of the

debt payments of the borrower has been earmarked for such payments,

the Secretary shall consider the income of the borrower to be

adequate to meet the debt obligations of the borrower.''

Subsec. (c)(6). Pub. L. 104-127, Sec. 645(1)(B), added par. (6)

and struck out former par. (6), which specified required conditions

for termination of loan obligations, limited applicability of good

faith requirement, authorized recapture by requiring borrower to

enter into agreement before terminating loan obligations, and

provided for limitation on recapture amount and treatment of

intrafamily transfers.

Subsec. (k). Pub. L. 104-127, Sec. 645(2), (3), redesignated

subsec. (l) as (k) and struck out heading and text of former

subsec. (k). Text read as follows: ''The creditworthiness of, or

the adequacy of collateral offered by, any borrower whose loan

obligations are restructured under this section shall be determined

without regard to such restructuring.''

Subsec. (l). Pub. L. 104-127, Sec. 661(j), struck out ''and

subparagraphs (A)(i) and (C)(i) of section 1985(e)(1) of this

title,'' before ''if a borrower'' in introductory provisions.

Pub. L. 104-127, Sec. 645(3), redesignated subsec. (m) as (l).

Subsecs. (m) to (p). Pub. L. 104-127, Sec. 645(3), redesignated

subsecs. (m) to (p) as (l) to (o), respectively.

1991 - Subsec. (c)(6)(A)(ii). Pub. L. 102-237, Sec. 501(h)(1),

substituted ''November 28, 1990'' for ''the date of enactment of

this paragraph''.

Subsec. (m). Pub. L. 102-237, Sec. 501(h)(2), substituted

''section 1985(e)(1)'' for ''section 1985(e)(1)(A)''.

1990 - Subsec. (b)(1). Pub. L. 101-624, Sec. 1816(a), inserted

before semicolon at end '', except that the regulations shall

require that, if the value of the assets calculated under

subsection (c)(2)(A)(ii) of this section that may be realized

through liquidation or other methods would produce enough income to

make the delinquent loan current, the borrower shall not be

eligible for assistance under subsection (a) of this section''.

Subsec. (c)(2)(A). Pub. L. 101-624, Sec. 1816(b)(1), amended

subpar. (A) generally. Prior to amendment, subpar. (A) read as

follows: ''the amount of the current appraised value of the

property securing the loan; less''.

Subsec. (c)(2)(B)(iv). Pub. L. 101-624, Sec. 1816(b)(2)(A),

substituted ''costs; plus'' for ''costs.''

Subsec. (c)(2)(C). Pub. L. 101-624, Sec. 1816(b)(2)(B), added

subpar. (C).

Subsec. (c)(3)(C). Pub. L. 101-624, Sec. 1816(c), added subpar.

(C).

Subsec. (c)(4). Pub. L. 101-624, Sec. 1816(d), substituted ''90''

for ''60'' in introductory provisions.

Subsec. (c)(6). Pub. L. 101-624, Sec. 1816(f), amended par. (6)

generally. Prior to amendment, par. (6) read as follows: ''If the

value of the restructured loan is less than the recovery value and

if, within 45 days after receipt of the notification described in

paragraph (4)(B), the borrower pays (or obtains third-party

financing to pay) the Secretary an amount equal to the recovery

value, the obligations of the borrower to the Secretary under the

loan shall terminate, except that the Secretary may require, as a

condition of such termination of loan obligations, that the

borrower enter into an agreement with the Secretary if the borrower

sells or otherwise conveys the real property used to secure such

loan within 2 years after the date of such agreement. Any such

agreement shall provide for the recapture of part or all of the

difference between the recovery value of the loan and the fair

market value (on the date of such agreement) of the property

securing the loan if the borrower realizes a gain on the sale or

conveyance over the amount of the recovery value of the loan. In

no event shall any such agreement provide for recapture of an

amount that exceeds the difference between such recovery value and

the fair market value of the property securing the loan on the date

of such agreement.''

Subsec. (c)(7). Pub. L. 101-624, Sec. 1816(g), added par. (7).

Subsecs. (l) to (p). Pub. L. 101-624, Sec. 1816(h), added

subsecs. (l) to (p).

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 645(1) of Pub. L. 104-127 effective 90 days

after Apr. 4, 1996, and amendment by sections 645(2), (3) and

661(j) of Pub. L. 104-127 effective Apr. 4, 1996, see section

663(a), (b) of Pub. L. 104-127, set out as a note under section

1922 of this title.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(3) of Pub. L. 102-237, set out as a note under section 1421

of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Section 1861 of title XVIII of Pub. L. 101-624 provided that:

''(a) In General. - Except as otherwise provided in this title,

this title and the amendments made by this title (enacting sections

1981f and 2006a to 2006e of this title, section 2076a of Title 12,

Banks and Banking, and section 494 of Title 25, Indians, amending

this section, sections 1924, 1927, 1933, 1934, 1942, 1946, 1981,

1981d, 1982, 1983, 1983a, 1983b, 1985, 1991, 1997, 2003, and 5106

of this title, section 3132 of Title 5, Government Organization and

Employees, sections 2019, 2075, 2077, 2218, 2252, 2254, 2277a-5,

2277a-9, 2277a-10, 2277a-14, 2278a-6, 2279aa, and 2279aa-11 of

Title 12, and section 492 of Title 25, enacting provisions set out

as notes under section 1981f of this title and section 2001 of

Title 12, amending provisions set out as a note under section 1985

of this title, and repealing provisions set out as a note preceding

section 1961 of this title) shall become effective on the date of

enactment of this Act (Nov. 28, 1990).

''(b) Notice of Debt Settlement Programs. - The amendment made by

section 1807(1) of this Act (amending section 1981d(b)(1) of this

title) shall become effective 120 days after the date of enactment

of this Act (Nov. 28, 1990).

''(c) Debt Restructuring and Loan Servicing. -

''(1) In general. - Except as provided in section

353(c)(6)(A)(ii) of the Consolidated Farm and Rural Development

Act (7 U.S.C. 2001(c)(6)(A)(iii)) (as added by section 1816(f) of

this Act) and in paragraph (3) of this subsection, section 1816

of this Act and the amendments made by such section 1816

(amending this section and section 1985 of this title) shall

apply to new applications submitted under section 353 of the

Consolidated Farm and Rural Development Act (7 U.S.C. 2001) on or

after the date of enactment of this Act (Nov. 28, 1990).

''(2) Definition of new application. - As used in paragraph

(1), the term 'new application' means an application submitted by

a borrower to initiate a debt restructuring consideration and not

an application reconsidered after an appeal or revision of the

original application.

''(3) Liquidation of assets. - Section 353(o) of the

Consolidated Farm and Rural Development Act (7 U.S.C. 2001(o))

(as added by section 1816(h) of this Act) shall not apply until

the Secretary of Agriculture has issued final regulations to

carry out such section 353(o).

''(d) Restoration of First Lien on Stock. - The amendment made by

section 1833 of this Act (enacting section 2076a of Title 12 and

amending section 2077 of Title 12) shall be effective as of January

7, 1988.

''(e) Regulations. - As soon as practicable after the date of

enactment of this Act (Nov. 28, 1990) -

''(1) the Secretary of Agriculture shall issue such regulations

as are necessary to carry out subtitles A and C of this Act

(probably means subtitles A (Sec. 1801-1824) and C (Sec.

1851-1854) of title XVIII of Pub. L. 101-624, enacting sections

1981f and 2006a to 2006e of this title and section 494 of Title

25, amending this section, sections 1924, 1927, 1933, 1934, 1942,

1946, 1981, 1981d, 1982, 1983, 1983a, 1983b, 1985, 1991, 1997,

2003, and 5106 of this title and section 492 of Title 25,

enacting provisions set out as a note under section 1981f of this

title, amending provisions set out as a note under section 1985

of this title, and repealing provisions set out as a note

preceding section 1961 of this title) and the amendments made by

such subtitles; and

''(2) the Farm Credit Administration shall issue such

regulations as are necessary to carry out subtitle B of this Act

(probably means subtitle B (Sec. 1831-1843) of title XVIII of

Pub. L. 101-624, enacting section 2076a of Title 12, amending

section 3132 of Title 5 and sections 2019, 2075, 2077, 2218,

2252, 2254, 2277a-5, 2277a-9, 2277a-10, 2277a-14, 2278a-6,

2279aa, and 2279aa-11 of Title 12, and enacting provisions set

out as a note under section 2001 of Title 12) and the amendments

made by such subtitle.''

SUSPENSION OF COLLECTION ACTIVITIES DURING TRANSITION PERIOD

Section 615(d) of Pub. L. 100-233 provided that: ''The Secretary

of Agriculture shall not initiate any acceleration, foreclosure, or

liquidation in connection with any delinquent farmer program loan

before the date the Secretary has issued final regulations to carry

out the amendments made by this section (enacting section 2001 of

this title and amending sections 1927a and 1981 of this title).

The preceding sentence shall not prohibit the Secretary from taking

any action with respect to waste, fraud, or abuse by the

borrower.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1985, 1991, 2001a, 2005,

2008h of this title.

-CITE-

7 USC Sec. 2001a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2001a. Debt restructuring and loan servicing for community

facility loans

-STATUTE-

The Secretary shall establish and implement a program that is

similar to the program established under section 2001 of this

title, except that the debt restructuring and loan servicing

procedures shall apply to delinquent community facility program

loans (rather than delinquent farmer program loans) made by the

Farmers Home Administration to a hospital or health care facility

under section 1926(a) of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 353A, as added Pub. L. 101-624,

title XXIII, Sec. 2384(a), Nov. 28, 1990, 104 Stat. 4050.)

-MISC1-

REGULATIONS

Section 2384(b) of Pub. L. 101-624 provided that: ''Not later

than 120 days after the date of enactment of this Act (Nov. 28,

1990), the Secretary shall promulgate regulations, modeled after

those promulgated under such section 353 (7 U.S.C. 2001), that

implement the program established under section 353A of the

Consolidated Farm and Rural Development Act (7 U.S.C. 2001a).''

-CITE-

7 USC Sec. 2002 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2002. Transfer of inventory lands

-STATUTE-

(a) In general

Subject to subsection (b) of this section, the Secretary may

transfer to any Federal or State agency, for conservation purposes

any real property, or interest therein, administered by the

Secretary under this Act -

(1) with respect to which the rights of all prior owners and

operators have expired;

(2) that is eligible to be disposed of in accordance with

section 1985 of this title; and

(3) that -

(A) has marginal value for agricultural production;

(B) is environmentally sensitive; or

(C) has special management importance.

(b) Conditions

The Secretary may not transfer any property or interest in

property under subsection (a) of this section unless -

(1) at least 2 public notices are given of the transfer;

(2) if requested, at least 1 public meeting is held prior to

the transfer; and

(3) the Governor and at least 1 elected county official of the

State and county where the property is located are consulted

prior to the transfer.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 354, as added Pub. L. 100-233,

title VI, Sec. 616, Jan. 6, 1988, 101 Stat. 1682; amended Pub. L.

104-127, title VI, Sec. 646, Apr. 4, 1996, 110 Stat. 1103.)

-REFTEXT-

REFERENCES IN TEXT

This Act, referred to in subsec. (a), refers to the Agricultural

Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 294, as

amended. For classification of this Act to the Code, see Short

Title note set out under section 1911 of this title and Tables.

However, the reference was probably intended to be ''this title''

meaning the Consolidated Farm and Rural Development Act, title III

of Pub. L. 87-128, as amended, which is classified principally to

this chapter. For classification of this title to the Code, see

Short Title note set out under section 1921 of this title and

Tables.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127 designated existing provisions as subsec.

(a), inserted heading, substituted ''Subject to subsection (b) of

this section, the Secretary'' for ''The Secretary, without

reimbursement,'' in introductory provisions, added par. (2) and

struck out former par. (2) which read as follows: ''that is

determined by the Secretary to be suitable or surplus; and'', and

added subsec. (b).

-CITE-

7 USC Sec. 2003 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2003. Target participation rates

-STATUTE-

(a) Establishment

(1) In general

The Secretary shall establish annual target participation

rates, on a county wide basis, that shall ensure that members of

socially disadvantaged groups will receive loans made or insured

under subchapter I of this chapter and will have the opportunity

to purchase or lease inventory farmland.

(2) Group population

Except as provided in paragraph (3), in establishing such

target rates the Secretary shall take into consideration the

portion of the population of the county made up of such groups,

and the availability of inventory farmland in such county.

(3) Gender

With respect to gender, target participation rates shall take

into consideration the number of current and potential socially

disadvantaged farmers and ranchers in a State in proportion to

the total number of farmers and ranchers in the State.

(b) Reservation and allocation

(1) Reservation

The Secretary shall, to the greatest extent practicable,

reserve sufficient loan funds made available under subchapter I

of this chapter, for use by members of socially disadvantaged

groups identified under target participation rates established

under subsection (a) of this section.

(2) Allocation

The Secretary shall allocate such loans on the basis of the

proportion of members of socially disadvantaged groups in a

county and the availability of inventory farmland, with the

greatest amount of loan funds being distributed in the county

with the greatest proportion of socially disadvantaged group

members and the greatest amount of available inventory farmland.

(3) Indian reservations

In distributing loan funds in counties within the boundaries of

an Indian reservation, the Secretary shall allocate the funds on

a reservation-wide basis.

(c) Operating loans

(1) Establishment

The Secretary shall establish annual target participation

rates, that shall ensure that socially disadvantaged farmers or

ranchers will receive loans made or insured under subchapter II

of this chapter. In establishing such target rates, the

Secretary shall consider the number of socially disadvantaged

farmers and ranchers in a State in proportion to the total number

of farmers and ranchers in that State.

(2) Reservation and allocation

The Secretary shall, to the greatest extent practicable,

reserve and allocate the proportion of each State's loan funds

made available under subchapter II of this chapter that is equal

to that State's target participation rate for use by the socially

disadvantaged farmers or ranchers in that State. The Secretary

shall, to the extent practicable, distribute the total so derived

on a county by county basis according to the number of socially

disadvantaged farmers or ranchers in the county. Any funds

reserved and allocated under this paragraph but not used within a

State shall, to the extent necessary to satisfy pending

applications under this chapter, be available for use by socially

disadvantaged farmers and ranchers in other States, as determined

by the Secretary, and any remaining funds shall be reallocated

within the State.

(d) Report

The Secretary shall prepare and submit, to the Committee on

Agriculture of the House of Representatives and the Committee on

Agriculture, Nutrition, and Forestry of the Senate, a report that

describes the annual target participation rates and the success in

meeting such rates.

(e) Definitions

(1) Socially disadvantaged group

As used in this section, the term ''socially disadvantaged

group'' means a group whose members have been subjected to

racial, ethnic, or gender prejudice because of their identity as

members of a group without regard to their individual qualities.

(2) Socially disadvantaged farmer or rancher

As used in this section, the term ''socially disadvantaged

farmer or rancher'' means a farmer or rancher who is a member of

a socially disadvantaged group.

(f) Implementation consistent with Supreme Court holding

Not later than 180 days after April 4, 1996, the Secretary shall

ensure that the implementation of this section is consistent with

the holding of the Supreme Court in Adarand Constructors, Inc. v.

Federico Pena, Secretary of Transportation, 115 S. Ct. 2097 (1995).

-SOURCE-

(Pub. L. 87-128, title III, Sec. 355, as added Pub. L. 100-233,

title VI, Sec. 617, Jan. 6, 1988, 101 Stat. 1682; amended Pub. L.

101-624, title XVIII, Sec. 1817, title XXV, Sec. 2501(f), Nov. 28,

1990, 104 Stat. 3829, 4065; Pub. L. 102-554, Sec. 21(a), (b), Oct.

28, 1992, 106 Stat. 4161; Pub. L. 104-127, title VI, Sec. 647, Apr.

4, 1996, 110 Stat. 1104; Pub. L. 107-171, title V, Sec. 5315, May

13, 2002, 116 Stat. 348.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs.

(c)(2), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (c)(2). Pub. L. 107-171 substituted ''Any funds

reserved and allocated under this paragraph but not used within a

State shall, to the extent necessary to satisfy pending

applications under this chapter, be available for use by socially

disadvantaged farmers and ranchers in other States, as determined

by the Secretary, and any remaining funds shall be reallocated

within the State.'' for ''Any funds reserved and allocated for

purposes of this paragraph, but not used shall be reallocated

within such State.''

1996 - Subsec. (f). Pub. L. 104-127 added subsec. (f).

1992 - Subsec. (a)(2). Pub. L. 102-554, Sec. 21(a)(1),

substituted ''Except as provided in paragraph (3), in

establishing'' for ''In establishing''.

Subsec. (a)(3). Pub. L. 102-554, Sec. 21(a)(2), added par. (3).

Subsec. (e)(1). Pub. L. 102-554, Sec. 21(b), substituted '',

ethnic, or gener'' for ''or ethnic''.

1990 - Subsec. (b)(3). Pub. L. 101-624, Sec. 1817, added par.

(3).

Subsecs. (c), (d). Pub. L. 101-624, Sec. 2501(f)(1)-(3), added

subsec. (c), redesignated former subsec. (c) as (d), and struck out

former subsec. (d) which read as follows: ''As used in this

section, the term 'socially disadvantaged group' means a group

whose members have been subjected to racial or ethnic prejudice

because of their identity as members of a group without regard to

their individual qualities.''

Subsec. (e). Pub. L. 101-624, Sec. 2501(f)(4), added subsec. (e).

TERMINATION OF REPORTING REQUIREMENTS

For termination, effective May 15, 2000, of provisions of law

requiring submittal to Congress of any annual, semiannual, or other

regular periodic report listed in House Document No. 103-7 (in

which the report required by subsec. (d) of this section is listed

on page 44), see section 3003 of Pub. L. 104-66, as amended, set

out as a note under section 1113 of Title 31, Money and Finance.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2279, 2279-1, 3319f of

this title; title 16 section 590h.

-CITE-

7 USC Sec. 2004 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2004. Expedited clearing of title to inventory property

-STATUTE-

The Farmers Home Administration may employ local attorneys, on a

case-by-case basis, to process all legal procedures necessary to

clear the title to foreclosed properties in the inventory of the

Farmers Home Administration. Such attorneys shall be compensated at

not more than their usual and customary charges for such work.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 356, as added Pub. L. 100-233,

title VI, Sec. 618, Jan. 6, 1988, 101 Stat. 1683.)

-CITE-

7 USC Sec. 2005 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2005. Payment of losses on guaranteed loans

-STATUTE-

(a) Payments to lenders

(1) Requirement

Within 3 months after a court of competent jurisdiction

confirms a plan of reorganization under chapter 12 of title 11,

for any borrower to whom a lender has made a loan guaranteed

under this chapter, the Secretary shall pay the lender an amount

estimated by the Secretary to be equal to the loss incurred by

the lender for purposes of the guarantee.

(2) Payment toward loan guarantee

Any amount paid to a lender under this subsection with respect

to a loan guaranteed under this chapter shall be treated as

payment towards satisfaction of the loan guarantee.

(b) Administration

(1) Loss by lender

If the lender of a guaranteed farmer program loan takes any

action described in section 1981(b)(4) of this title with respect

to the loan and the Secretary approves such action, then, for

purposes of the guarantee, the lender shall be treated as having

sustained a loss equal to the amount by which -

(A) the outstanding balance of the loan immediately before

such action, exceeds

(B) the outstanding balance of the loan immediately after

such action.

(2) Net present value of loan

The Secretary shall approve the taking of an action described

in section 1981(b)(4) of this title by the lender of a guaranteed

farmer program loan with respect to the loan if such action

reduces the net present value of the loan to an amount equal to

not less than the greater of -

(A) the greatest net present value of a loan the borrower

could reasonably be expected to repay; and

(B) the greatest amount that the lender of the loan could

reasonably expect to recover from the borrower through

bankruptcy, or liquidation of the property securing the loan,

less all reasonable and necessary costs and expenses that the

lender of the loan could reasonably expect to incur to preserve

or dispose of such property (including all associated legal and

property management costs) in the course of such a bankruptcy

or liquidation.

(3) Construction of subsection

This subsection shall not be construed to limit the authority

of the Secretary to enter into a shared appreciation arrangement

with a borrower, or the terms and conditions which shall be

required of a borrower, under section 2001(e) of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 357, as added Pub. L. 100-233,

title VI, Sec. 619, Jan. 6, 1988, 101 Stat. 1683; amended Pub. L.

101-624, title XXIII, Sec. 2388(d)(2), Nov. 28, 1990, 104 Stat.

4053.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec. (a),

see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

1990 - Subsec. (b)(1), (2). Pub. L. 101-624 substituted

''1981(b)(4)'' for ''1981(d)''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1991 of this title.

-CITE-

7 USC Sec. 2006 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006. Waiver of mediation rights by borrowers

-STATUTE-

The Secretary may not make, insure, or guarantee any farmer

program loan to a farm borrower on the condition that the borrower

waive any right under the mediation program of any State.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 358, as added Pub. L. 100-233,

title V, Sec. 512, Jan. 6, 1988, 101 Stat. 1664; amended Pub. L.

103-354, title II, Sec. 282(f)(3), Oct. 13, 1994, 108 Stat. 3235.)

-MISC1-

AMENDMENTS

1994 - Pub. L. 103-354 struck out ''agricultural loan'' before

''mediation program''.

-CITE-

7 USC Sec. 2006a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006a. Borrower training

-STATUTE-

(a) In general

The Secretary shall enter into contracts to provide educational

training to all borrowers of farmer program direct loans made under

this chapter in financial and farm management concepts associated

with commercial farming.

(b) Contract

(1) In general

The Secretary may contract with State or private providers of

farm management and credit counseling services (including a

community college, the extension service of a State, a State

department of agriculture, or a nonprofit organization) to carry

out this section.

(2) Consultation

The Secretary may consult with the chief executive officer of a

State concerning the identity of the contracting organization and

the process for contracting.

(c) Eligibility for loans

(1) In general

Subject to paragraph (2), to be eligible to obtain a direct

loan under this chapter, a borrower must obtain management

assistance under this section, appropriate to the management

ability of the borrower (as determined by the appropriate county

committee during the determination of eligibility for the loan).

(2) Loan conditions

The need of a borrower who satisfies the criteria set out in

section 1922(a)(2) or 1941(a)(2) of this title for management

assistance under this section shall not be cause for denial of

eligibility of the borrower for a direct loan under this chapter.

(d) Guidelines and curriculum

The Secretary shall issue regulations establishing guidelines and

curriculum for the borrower training program established under this

section.

(e) Payment

A borrower shall pay for training received under this section,

and may use funds from operating loans made under subchapter II of

this chapter to pay for the training.

(f) Waivers

(1) In general

The Secretary may waive the requirements of this section for an

individual borrower if the Secretary determines that the borrower

demonstrates adequate knowledge in areas described in this

section.

(2) Criteria

The Secretary shall establish criteria providing for the

application of paragraph (1) consistently in all counties

nationwide.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 359, as added Pub. L. 101-624,

title XVIII, Sec. 1818(a), Nov. 28, 1990, 104 Stat. 3829; amended

Pub. L. 105-277, div. A, Sec. 101(a) (title VIII, Sec. 805(3)),

Oct. 21, 1998, 112 Stat. 2681, 2681-39; Pub. L. 107-171, title V,

Sec. 5316, 5501(c), May 13, 2002, 116 Stat. 348, 351.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a)

and (c), see note set out under section 1921 of this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (c)(1). Pub. L. 107-171, Sec. 5501(c), struck out

''established pursuant to section 1982 of this title,'' after

''appropriate county committee''.

Subsec. (f). Pub. L. 107-171, Sec. 5316, added subsec. (f) and

struck out heading and text of former subsec. (f). Text read as

follows: ''The Secretary may waive the requirements of this section

for an individual borrower on a determination by the county

committee that the borrower demonstrates adequate knowledge in

areas described in this section.''

1998 - Subsec. (a). Pub. L. 105-277, Sec. 101(a) (title VIII,

Sec. 805(3)(A)), struck out ''and guaranteed'' after ''direct''.

Subsec. (c). Pub. L. 105-277, Sec. 101(a) (title VIII, Sec.

805(3)(B)), struck out ''or guaranteed'' after ''direct'' in pars.

(1) and (2).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1941, 1942, 1949, 1981,

2006b of this title.

-CITE-

7 USC Sec. 2006b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006b. Loan assessments

-STATUTE-

(a) In general

The Secretary shall evaluate, in accordance with regulations

issued by the Secretary, the farming plan and financial situation

of each qualified farmer or rancher applicant.

(b) Determinations

In evaluating the farming plan and financial situation of an

applicant under this section, the Secretary shall determine -

(1) the amount that the applicant will need to borrow to carry

out the proposed farming plan;

(2) the rate of interest that the applicant would need to be

able to cover expenses and build an adequate equity base;

(3) the goals of the proposed farming plan of the applicant;

(4) the financial viability of the plan and any changes that

are necessary to make the plan viable; and

(5) whether assistance is necessary under this chapter and, if

so, the amount of the assistance.

(c) Contract

The Secretary may contract with a third party (including those

entities eligible to provide borrower training under section

2006a(b) of this title) to conduct loan assessments under this

section.

(d) Review of loans

(1) In general

Loan assessments conducted under this section shall include

annual review of direct loans, and periodic review (as determined

necessary by the Secretary) of guaranteed loans, made under this

chapter to assess the progress of a borrower in meeting the goals

for the farm or ranch operation.

(2) Contracts

The Secretary may contract with an entity that is eligible to

provide borrower training under section 2006a(b) of this title to

conduct loan reviews under paragraph (1).

(3) Problem assessments

If a borrower is delinquent in payments on a direct or

guaranteed loan made under this chapter, the Secretary or the

contracting entity shall determine the cause of, and action

necessary to correct, the delinquency.

(e) Guidelines

The Secretary shall issue regulations providing guidelines for

loan assessments conducted under this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 360, as added Pub. L. 101-624,

title XVIII, Sec. 1819, Nov. 28, 1990, 104 Stat. 3830; amended Pub.

L. 107-171, title V, Sec. 5317, 5318, May 13, 2002, 116 Stat. 348.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsecs. (a),

(b)(5), and (d)(1), (3), see note set out under section 1921 of

this title.

-MISC2-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171, Sec. 5317, substituted ''The

Secretary'' for ''After an applicant is determined eligible for

assistance under this chapter by the appropriate county committee

established pursuant to section 1982 of this title, the

Secretary''.

Subsec. (d)(1). Pub. L. 107-171, Sec. 5318, substituted ''annual

review'' for ''biannual review''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1935, 1949, 1983a of this

title.

-CITE-

7 USC Sec. 2006c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006c. Supervised credit

-STATUTE-

The Secretary shall provide adequate training to employees of the

Farmers Home Administration on credit analysis and financial and

farm management to -

(1) better acquaint the employees with what constitutes

adequate financial data on which to base a direct or guaranteed

loan approval decision; and

(2) ensure proper supervision of farmer program loans.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 361, as added Pub. L. 101-624,

title XVIII, Sec. 1820, Nov. 28, 1990, 104 Stat. 3830.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1949 of this title.

-CITE-

7 USC Sec. 2006d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006d. Market placement

-STATUTE-

The Secretary shall establish a market placement program for

qualified beginning farmers and ranchers and other borrowers of

farmer program loans that the Secretary believes have a reasonable

chance of qualifying for commercial credit with a guarantee

provided under this chapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 362, as added Pub. L. 101-624,

title XVIII, Sec. 1821, Nov. 28, 1990, 104 Stat. 3831.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1949, 1983a of this

title.

-CITE-

7 USC Sec. 2006e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006e. Prohibition on use of loans for certain purposes

-STATUTE-

The Secretary shall not approve any loan under this chapter to

drain, dredge, fill, level, or otherwise manipulate a wetland (as

defined in section 3801(a)(16) (FOOTNOTE 1) of title 16), or to

engage in any activity that results in impairing or reducing the

flow, circulation, or reach of water, except in the case of

activity related to the maintenance of previously converted

wetlands, or in the case of such activity that is already commenced

before November 28, 1990. This section shall not apply to a loan

made or guaranteed under this chapter for a utility line.

(FOOTNOTE 1) See References in Text note below.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 363, as added Pub. L. 101-624,

title XVIII, Sec. 1824, Nov. 28, 1990, 104 Stat. 3831; amended Pub.

L. 102-237, title V, Sec. 501(i), Dec. 13, 1991, 105 Stat. 1868;

Pub. L. 104-127, title VII, Sec. 751, Apr. 4, 1996, 110 Stat.

1129.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

Section 3801(a) of title 16, referred to in text, was

subsequently amended, and section 3801(a)(16) no longer defines the

term ''wetland''. However, such term is defined elsewhere in that

section.

-MISC2-

AMENDMENTS

1996 - Pub. L. 104-127 inserted at end ''This section shall not

apply to a loan made or guaranteed under this chapter for a utility

line.''

1991 - Pub. L. 102-237 inserted a closing parenthesis after

''3801(a)(16) of title 16'' and substituted ''before November 28,

1990'' for ''prior to the date of enactment of this section''.

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the

provision of the Food, Agriculture, Conservation, and Trade Act of

1990, Pub. L. 101-624, to which the amendment relates, see section

1101(b)(3) of Pub. L. 102-237, set out as a note under section 1421

of this title.

-CITE-

7 USC Sec. 2006f 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2006f. Rural development certified lenders program

-STATUTE-

(a) Certified lenders program

(1) In general

The Secretary may establish a program under which the Secretary

may guarantee a loan for any rural development program that is

made by a lender certified by the Secretary.

(2) Certification requirements

The Secretary may certify a lender if the lender meets such

criteria as the Secretary may prescribe in regulations, including

the ability of the lender to properly make, service, and

liquidate the guaranteed loans of the lender.

(3) Condition of certification

As a condition of certification, the Secretary may require the

lender to undertake to service the guaranteed loan using

standards that are not less stringent than generally accepted

banking standards concerning loan servicing that are used by

prudent commercial or cooperative lenders.

(4) Guarantee

Notwithstanding any other provision of law, the Secretary may

guarantee not more than 80 percent of a loan made by a certified

lender described in paragraph (1), if the borrower of the loan

meets the eligibility requirements and such other criteria for

the loan guarantee that are established by the Secretary.

(5) Certifications

With respect to loans to be guaranteed, the Secretary may

permit a certified lender to make appropriate certifications (as

provided in regulations issued by the Secretary) -

(A) relating to issues such as creditworthiness, repayment

ability, adequacy of collateral, and feasibility of the

operation; and

(B) that the borrower is in compliance with all requirements

of law, including regulations issued by the Secretary.

(6) Relationship to other requirements

This subsection shall not affect the responsibility of the

Secretary to determine eligibility, review financial information,

and otherwise assess an application.

(b) Preferred certified lenders program

(1) In general

The Secretary may establish a preferred certified lenders

program for lenders who establish their -

(A) knowledge of, and experience under, the program

established under subsection (a) of this section;

(B) knowledge of the regulations concerning the particular

guaranteed loan program; and

(C) proficiency related to the certified lender program

requirements.

(2) Additional lending institutions

The Secretary may certify any lending institution as a

preferred certified lender if the institution meets such

additional criteria as the Secretary may prescribe by regulation.

(3) Revocation of designation

The designation of a lender as a preferred certified lender

shall be revoked if the Secretary determines that the lender is

not adhering to the rules and regulations applicable to the

program or if the loss experiences of the preferred certified

lender are greater than other preferred certified lenders, except

that the suspension or revocation shall not affect any

outstanding guarantee.

(4) Condition of certification

As a condition of the preferred certification, the Secretary

shall require the lender to undertake to service the loan

guaranteed by the Secretary under this subsection using generally

accepted banking standards concerning loan servicing employed by

prudent commercial or cooperative lenders. The Secretary shall,

at least annually, monitor the performance of each preferred

certified lender to ensure that the conditions of the

certification are being met.

(5) Effect of preferred lender certification

Notwithstanding any other provision of law, the Secretary may -

(A) guarantee not more than 80 percent of any approved loan

made by a preferred certified lender as described in this

subsection, if the borrower meets the eligibility requirements

and such other criteria as may be applicable to loans

guaranteed by the Secretary; and

(B) permit preferred certified lenders to make all decisions,

with respect to loans to be guaranteed by the Secretary under

this subsection relating to creditworthiness, the closing,

monitoring, collection, and liquidation of loans, and to accept

appropriate certifications, as provided in regulations issued

by the Secretary, that the borrower is in compliance with all

requirements of law and regulations issued by the Secretary.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 364, as added Pub. L. 104-127,

title VII, Sec. 752, Apr. 4, 1996, 110 Stat. 1129.)

-MISC1-

PRIOR PROVISIONS

A prior section 2006f, Pub. L. 87-128, title III, Sec. 364, as

added Pub. L. 101-624, title XXIII, Sec. 2302(a)(1), Nov. 28, 1990,

104 Stat. 3979; amended Pub. L. 102-237, title VII, Sec. 701(d),

Dec. 13, 1991, 105 Stat. 1879; Pub. L. 103-129, Sec. 4, Nov. 1,

1993, 107 Stat. 1366, established Rural Development Administration

in Department of Agriculture and provided for the performance of

specified functions, prior to repeal by Pub. L. 103-354, title II,

Sec. 231(f)(3), Oct. 13, 1994, 108 Stat. 3219. See section 6911 et

seq. of this title.

-CITE-

7 USC Sec. 2007 to 2008c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2007 to 2008c. Repealed. Pub. L. 104-127, title VII, Sec. 701,

753(a), 754-756, Apr. 4, 1996, 110 Stat. 1108, 1131

-MISC1-

Section 2007, Pub. L. 101-624, title XXIII, Sec. 2310, Nov. 28,

1990, 104 Stat. 3982, related to general provisions for programs

under former sections 2007a to 2007e and 2008 to 2008c of this

title, including applications, selection of States, duration of

projects, and effective dates.

Section 2007a, Pub. L. 101-624, title XXIII, Sec. 2311, Nov. 28,

1990, 104 Stat. 3982; Pub. L. 102-237, title VII, Sec. 702(b), Dec.

13, 1991, 105 Stat. 1880, defined terms for purposes of former

sections 2007a to 2007e of this title.

Section 2007b, Pub. L. 101-624, title XXIII, Sec. 2312, Nov. 28,

1990, 104 Stat. 3984, related to establishment and powers of Rural

Partnerships Investment Board.

Section 2007c, Pub. L. 101-624, title XXIII, Sec. 2313, Nov. 28,

1990, 104 Stat. 3986; Pub. L. 102-237, title VII, Sec. 702(c), Dec.

13, 1991, 105 Stat. 1880, established Rural Business Investment

Fund.

Section 2007d, Pub. L. 101-624, title XXIII, Sec. 2314, Nov. 28,

1990, 104 Stat. 3991; Pub. L. 102-237, title VII, Sec. 702(d), Dec.

13, 1991, 105 Stat. 1880, related to establishment of local

revolving funds.

Section 2007e, Pub. L. 101-624, title XXIII, Sec. 2315, Nov. 28,

1990, 104 Stat. 3994; Pub. L. 102-237, title VII, Sec. 702(e), Dec.

13, 1991, 105 Stat. 1880, related to compliance with and

enforcement of former sections 2007a to 2007e of this title and

regulations promulgated thereunder.

Section 2008, Pub. L. 87-128, title III, Sec. 365, as added Pub.

L. 101-624, title XXIII, Sec. 2316(a), Nov. 28, 1990, 104 Stat.

4000; amended Pub. L. 102-237, title VII, Sec. 701(e), Dec. 13,

1991, 105 Stat. 1879, related to system for delivery of certain

rural development programs.

Section 2008a, Pub. L. 87-128, title III, Sec. 366, as added Pub.

L. 101-624, title XXIII, Sec. 2316(a), Nov. 28, 1990, 104 Stat.

4004; amended Pub. L. 102-237, title VII, Sec. 701(f), Dec. 13,

1991, 105 Stat. 1879, related to State rural economic development

review panel.

Section 2008b, Pub. L. 87-128, title III, Sec. 367, as added Pub.

L. 101-624, title XXIII, Sec. 2317, Nov. 28, 1990, 104 Stat. 4008;

amended Pub. L. 102-237, title VII, Sec. 701(g), Dec. 13, 1991, 105

Stat. 1879, related to limited transfer authority of loan amounts.

Section 2008c, Pub. L. 87-128, title III, Sec. 368, as added Pub.

L. 101-624, title XXIII, Sec. 2317, Nov. 28, 1990, 104 Stat. 4009,

related to allocation and transfer of loan guarantee authority.

-CITE-

7 USC Sec. 2008d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008d. Recordkeeping of loans by borrower's gender

-STATUTE-

The Secretary shall classify, by gender, records of applicants

for loans and loan guarantees under this chapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 369, as added Pub. L. 102-554,

Sec. 21(c), Oct. 28, 1992, 106 Stat. 4161.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 6943 of this title.

-CITE-

7 USC Sec. 2008e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008e. Prohibition under rural development programs

-STATUTE-

(a) Prohibition

Assistance under any rural development program administered by

the Rural Development Administration, the Farmers Home

Administration, the Rural Electrification Administration, or any

other agency of the Department of Agriculture shall not be

conditioned on any requirement that the recipient of such

assistance accept or receive electric service from any particular

utility, supplier, or cooperative.

(b) Ensuring compliance

The Secretary shall establish, by regulation, adequate safeguards

to ensure that assistance under such rural development programs is

not subject to such a condition. Such safeguards shall include

periodic certifications and audits, and appropriate measures and

sanctions against any person violating, or attempting to violate,

the prohibition in subsection (a) of this section.

(c) Regulations

Not later than 6 months after November 1, 1993, the Secretary

shall issue interim final regulations to ensure compliance with

subsection (a) of this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 370, as added Pub. L. 103-129,

Sec. 5, Nov. 1, 1993, 107 Stat. 1366.)

-CITE-

7 USC Sec. 2008f 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008f. Crop insurance requirement

-STATUTE-

(a) In general

As a condition of obtaining any benefit (including a direct loan,

loan guarantee, or payment) described in subsection (b) of this

section, a borrower must obtain at least catastrophic risk

protection insurance coverage under section 1508 of this title for

the crop and crop year for which the benefit is sought, if the

coverage is offered by the Corporation.

(b) Applicable benefits

Subsection (a) of this section shall apply to -

(1) a farm ownership loan (FO) under section 1923 of this

title;

(2) an operating loan (OL) under section 1942 of this title;

and

(3) an emergency loan (EM) under section 1961 of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 371, as added Pub. L. 103-354,

title I, Sec. 119(b), Oct. 13, 1994, 108 Stat. 3208.)

-MISC1-

EFFECTIVE DATE

Section effective Oct. 13, 1994, and applicable to provision of

crop insurance under Federal Crop Insurance Act (7 U.S.C. 1501 et

seq.) beginning with 1995 crop year, with such Act, as in effect on

the day before Oct. 13, 1994, to continue to apply with respect to

1994 crop year, see section 120 of Pub. L. 103-354, set out as an

Effective Date of 1994 Amendment note under section 1502 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1508 of this title.

-CITE-

7 USC Sec. 2008g 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008g. Payment of interest as condition of loan servicing for

borrowers

-STATUTE-

The Secretary may not reschedule or reamortize a loan for a

borrower under this chapter who has not requested consideration

under section 1981d(e) of this title unless the borrower pays a

portion, as determined by the Secretary, of the interest due on the

loan.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 372, as added Pub. L. 104-127,

title VI, Sec. 648(a), Apr. 4, 1996, 110 Stat. 1104.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

EFFECTIVE DATE

Section effective 90 days after Apr. 4, 1996, see section 663(b)

of Pub. L. 104-127, set out as an Effective Date of 1996 Amendment

note under section 1922 of this title.

-CITE-

7 USC Sec. 2008h 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008h. Loan and loan servicing limitations

-STATUTE-

(a) Delinquent borrowers prohibited from obtaining direct operating

loans

The Secretary may not make a direct operating loan under

subchapter II of this chapter to a borrower who is delinquent on

any loan made or guaranteed under this chapter.

(b) Prohibition of loans for borrowers that have received debt

forgiveness

(1) Prohibitions

Except as provided in paragraph (2) -

(A) the Secretary may not make a loan under this chapter to a

borrower that has received debt forgiveness on a loan made or

guaranteed under this chapter; and

(B) the Secretary may not guarantee a loan under this chapter

to a borrower that has received -

(i) debt forgiveness after April 4, 1996, on a loan made or

guaranteed under this chapter; or

(ii) received debt forgiveness on more than 3 occasions on

or before April 4, 1996.

(2) Exceptions

(A) In general

The Secretary may make a direct or guaranteed farm operating

loan for paying annual farm or ranch operating expenses of a

borrower who -

(i) was restructured with a write-down under section 2001

of this title;

(ii) is current on payments under a confirmed

reorganization plan under chapters (FOOTNOTE 1) 11, 12, or 13

of title 11; or

(FOOTNOTE 1) So in original. Probably should be ''chapter''.

(iii) received debt forgiveness on not more than 1 occasion

resulting directly and primarily from a major disaster or

emergency designated by the President on or after April 4,

1996, under the Robert T. Stafford Disaster Relief and

Emergency Assistance Act (42 U.S.C. 5121 et seq.).

(B) Emergency loans

The Secretary may make an emergency loan under section 1961

of this title to a borrower that -

(i) on or before April 4, 1996, received not more than 1

debt forgiveness on a loan made or guaranteed under this

chapter; and

(ii) after April 4, 1996, has not received debt forgiveness

on a loan made or guaranteed under this chapter.

(c) No more than 1 debt forgiveness for borrower on direct loan

The Secretary may not provide to a borrower debt forgiveness on a

direct loan made under this chapter if the borrower has received

debt forgiveness on another direct loan made under this chapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 373, as added Pub. L. 104-127,

title VI, Sec. 648(b), Apr. 4, 1996, 110 Stat. 1104; amended Pub.

L. 105-277, div. A, Sec. 101(a) (title VIII, Sec. 801), Oct. 21,

1998, 112 Stat. 2681, 2681-37; Pub. L. 107-171, title V, Sec. 5319,

May 13, 2002, 116 Stat. 348.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

The Robert T. Stafford Disaster Relief and Emergency Assistance

Act, referred to in subsec. (b)(2)(A)(iii), is Pub. L. 93-288, May

22, 1974, 88 Stat. 143, as amended, which is classified principally

to chapter 68 (Sec. 5121 et seq.) of Title 42, The Public Health

and Welfare. For complete classification of this Act to the Code,

see Short Title note set out under section 5121 of Title 42 and

Tables.

-MISC2-

AMENDMENTS

2002 - Subsec. (b)(2)(A)(iii). Pub. L. 107-171 added cl. (iii).

1998 - Subsec. (b). Pub. L. 105-277 added subsec. (b) and struck

out heading and text of former subsec. (b). Text read as follows:

''(1) In general. - Except as provided in paragraph (2), the

Secretary may not make or guarantee a loan under this chapter to a

borrower who received debt forgiveness on a loan made or guaranteed

under this chapter.

''(2) Exception. - The Secretary may make a direct or guaranteed

farm operating loan for paying annual farm or ranch operating

expenses of a borrower who was restructured with a write-down under

section 2001 of this title.''

-CITE-

7 USC Sec. 2008i 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008i. Short form certification of farm program borrower

compliance

-STATUTE-

The Secretary shall develop and utilize a consolidated short form

for farm program borrowers to use in certifying compliance with any

applicable provision of law (including a regulation) that serves as

an eligibility prerequisite for a loan made under this chapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 374, as added Pub. L. 104-127,

title VI, Sec. 649, Apr. 4, 1996, 110 Stat. 1105.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-MISC2-

EFFECTIVE DATE

Section effective 90 days after Apr. 4, 1996, see section 663(b)

of Pub. L. 104-127, set out as an Effective Date of 1996 Amendment

note under section 1922 of this title.

-CITE-

7 USC Sec. 2008j 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008j. National Sheep Industry Improvement Center

-STATUTE-

(a) Definitions

In this section:

(1) Board

The term ''Board'' means the Board of Directors established

under subsection (f) of this section.

(2) Center

The term ''Center'' means the National Sheep Industry

Improvement Center established under subsection (b) of this

section.

(3) Eligible entity

The term ''eligible entity'' means an entity that promotes the

betterment of the United States sheep or goat industries and that

is -

(A) a public, private, or cooperative organization;

(B) an association, including a corporation not operated for

profit;

(C) a federally recognized Indian Tribe; or

(D) a public or quasi-public agency.

(4) Fund

The term ''Fund'' means the National Sheep Industry Improvement

Center Revolving Fund established under subsection (e) of this

section.

(5) Intermediary

The term ''intermediary'' means a financial institution

receiving Center funds for establishing a revolving fund and

relending to an eligible entity.

(b) Establishment of Center

The Secretary shall establish a National Sheep Industry

Improvement Center.

(c) Purposes

The purposes of the Center shall be to -

(1) promote strategic development activities and collaborative

efforts by private and State entities to maximize the impact of

Federal assistance to strengthen and enhance production and

marketing of sheep or goat products in the United States;

(2) optimize the use of available human capital and resources

within the sheep or goat industries;

(3) provide assistance to meet the needs of the sheep or goat

industry for infrastructure development, business development,

production, resource development, and market and environmental

research;

(4) advance activities that empower and build the capacity of

the United States sheep or goat industry to design unique

responses to the special needs of the sheep or goat industries on

both a regional and national basis; and

(5) adopt flexible and innovative approaches to solving the

long-term needs of the United States sheep or goat industry.

(d) Strategic plan

(1) In general

The Center shall submit to the Secretary an annual strategic

plan for the delivery of financial assistance provided by the

Center.

(2) Requirements

A strategic plan shall identify -

(A) goals, methods, and a benchmark for measuring the success

of carrying out the plan and how the plan relates to the

national and regional goals of the Center;

(B) the amount and sources of Federal and non-Federal funds

that are available for carrying out the plan;

(C) funding priorities;

(D) selection criteria for funding; and

(E) a method of distributing funding.

(e) Revolving Fund

(1) Establishment

There is established in the Treasury the National Sheep

Industry Improvement Center Revolving Fund. The Fund shall be

available to the Center, without fiscal year limitation, to carry

out the authorized programs and activities of the Center under

this section.

(2) Contents of Fund

There shall be deposited in the Fund -

(A) such amounts as may be appropriated, transferred, or

otherwise made available to support programs and activities of

the Center;

(B) payments received from any source for products, services,

or property furnished in connection with the activities of the

Center;

(C) fees and royalties collected by the Center from licensing

or other arrangements relating to commercialization of products

developed through projects funded, in whole or part, by grants,

contracts, or cooperative agreements executed by the Center;

(D) proceeds from the sale of assets, loans, and equity

interests made in furtherance of the purposes of the Center;

(E) donations or contributions accepted by the Center to

support authorized programs and activities; and

(F) any other funds acquired by the Center.

(3) Use of Fund

(A) In general

The Center may use amounts in the Fund to make direct loans,

loan guarantees, cooperative agreements, equity interests,

investments, repayable grants, and grants to eligible entities,

either directly or through an intermediary, in accordance with

a strategic plan submitted under subsection (d) of this

section.

(B) Continued existence

The Center shall manage the Fund in a manner that ensures

that sufficient amounts are available in the Fund to carry out

subsection (c) of this section. The Fund is intended to

furnish the initial capital for a revolving fund that will

eventually be privatized for the purposes of assisting the

United States sheep and goat industries.

(C) Diverse area

The Center shall, to the maximum extent practicable, use the

Fund to serve broad geographic areas and regions of diverse

production.

(D) Administration

The Center may not use more than 3 percent of the amounts in

the portfolio of the Center for each fiscal year for the

administration of the Center. The portfolio shall be calculated

at the beginning of each fiscal year and shall include a total

of -

(i) all outstanding loan balances;

(ii) the Fund balance;

(iii) the outstanding balance to intermediaries; and

(iv) the amount the Center paid for all equity interests.

(E) Influencing legislation

None of the amounts in the Fund may be used to influence

legislation.

(F) Accounting

To be eligible to receive amounts from the Fund, an entity

must agree to account for the amounts using generally accepted

accounting principles.

(G) Uses of Fund

The Center may use amounts in the Fund to -

(i) participate with Federal and State agencies in

financing activities that are in accordance with a strategic

plan submitted under subsection (d) of this section,

including participation with several States in a regional

effort;

(ii) participate with other public and private funding

sources in financing activities that are in accordance with

the strategic plan, including participation in a regional

effort;

(iii) provide security for, or make principal or interest

payments on, revenue or general obligation bonds issued by a

State, if the proceeds from the sale of the bonds are

deposited in the Fund;

(iv) accrue interest;

(v) guarantee or purchase insurance for local obligations

to improve credit market access or reduce interest rates for

a project that is in accordance with the strategic plan;

(vi) sell assets, loans, and equity interests acquired in

connection with the financing of projects funded by the

Center; or

(vii) purchase equity interests.

(4) Loans

(A) Rate

A loan from the Fund may be made at an interest rate that is

below the market rate or may be interest free.

(B) Term

The term of a loan may not exceed the shorter of -

(i) the useful life of the activity financed; or

(ii) 40 years.

(C) Source of repayment

The Center may not make a loan from the Fund unless the

recipient establishes an assured source of repayment.

(D) Proceeds

All payments of principal and interest on a loan made from

the Fund shall be deposited into the Fund.

(5) Maintenance of effort

The Center shall use the Fund only to supplement and not to

supplant Federal, State, and private funds expended for rural

development.

(6) Funding

(A) Deposit of funds

All Federal and non-Federal amounts received by the Center to

carry out this section shall be deposited in the Fund.

(B) Mandatory funds

Out of any moneys in the Treasury not otherwise appropriated,

the Secretary of the Treasury shall provide to the Center not

to exceed $26,000,000 to carry out this section.

(C) Additional funds

In addition to any funds provided under subparagraph (B),

there is authorized to be appropriated $30,000,000 to carry out

this section.

(f) Board of Directors

(1) In general

The management of the Center shall be vested in a Board of

Directors.

(2) Powers

The Board shall -

(A) be responsible for the general supervision of the Center;

(B) review any contract, direct loan, loan guarantee,

cooperative agreement, equity interest, investment, repayable

grant, and grant to be made or entered into by the Center and

any financial assistance provided to the Center;

(C) make the final decision, by majority vote, on whether and

how to provide assistance to an applicant; and

(D) develop and establish a budget plan and a long-term

operating plan to carry out the goals of the Center.

(3) Composition

The Board shall be composed of -

(A) 7 voting members, of whom -

(i) 4 members shall be active producers of sheep or goats

in the United States;

(ii) 2 members shall have expertise in finance and

management; and

(iii) 1 member shall have expertise in lamb, wool, goat, or

goat product marketing; and

(B) 2 nonvoting members, of whom -

(i) 1 member shall be the Under Secretary of Agriculture

for Rural Development; and

(ii) 1 member shall be the Under Secretary of Agriculture

for Research, Education, and Economics.

(4) Nomination

(A) Nominating body

The Secretary shall appoint the voting members of the Board

from nominations submitted by organizations described in

subparagraph (B).

(B) National organizations

A national organization is described in this subparagraph if

the organization -

(i) consists primarily of active sheep or goat producers in

the United States; and

(ii) has as the primary interest of the organization the

production of sheep or goats in the United States.

(5) Term of office

(A) In general

Subject to subparagraph (B), the term of office of a voting

member of the Board shall be 3 years.

(B) Staggered initial terms

The initial voting members of the Board (other than the

chairperson of the initially established Board) shall serve for

staggered terms of 1, 2, and 3 years, as determined by the

Secretary.

(C) Reappointment

A voting member may be reappointed for not more than one

additional term.

(6) Vacancy

(A) In general

A vacancy on the Board shall be filled in the same manner as

the original Board.

(B) Reappointment

A voting member appointed to fill a vacancy for an unexpired

term may be reappointed for one full term.

(7) Chairperson

(A) In general

The Board shall select a chairperson from among the voting

members of the Board.

(B) Term

The term of office of the chairperson shall be 2 years.

(8) Annual meeting

(A) In general

The Board shall meet not less than once each fiscal year at

the call of the chairperson or at the request of the executive

director appointed under subsection (g)(1) of this section.

(B) Location

The location of a meeting of the Board shall be established

by the Board.

(9) Voting

(A) Quorum

A quorum of the Board shall consist of a majority of the

voting members.

(B) Majority vote

A decision of the Board shall be made by a majority of the

voting members of the Board.

(10) Conflicts of interest

(A) In general

Except as provided in subparagraph (D), a member of the Board

shall not vote on any matter respecting any application,

contract, claim, or other particular matter pending before the

Board in which, to the knowledge of the member, an interest is

held by -

(i) the member;

(ii) any spouse of the member;

(iii) any child of the member;

(iv) any partner of the member;

(v) any organization in which the member is serving as an

officer, director, trustee, partner, or employee; or

(vi) any person with whom the member is negotiating or has

any arrangement concerning prospective employment or with

whom the member has a financial interest.

(B) Removal

Any action by a member of the Board that violates

subparagraph (A) shall be cause for removal from the Board.

(C) Validity of action

An action by a member of the Board that violates subparagraph

(A) shall not impair or otherwise affect the validity of any

otherwise lawful action by the Board.

(D) Disclosure

(i) In general

If a member of the Board makes a full disclosure of an

interest and, prior to any participation by the member, the

Board determines, by majority vote, that the interest is too

remote or too inconsequential to affect the integrity of any

participation by the member, the member may participate in

the matter relating to the interest, except as provided in

subparagraph (E)(iii).

(ii) Vote

A member that discloses an interest under clause (i) shall

not vote on a determination of whether the member may

participate in the matter relating to the interest.

(E) Remands

(i) In general

The Secretary may vacate and remand to the Board for

reconsideration any decision made pursuant to subsection

(e)(3)(H) of this section if the Secretary determines that

there has been a violation of this paragraph or any conflict

of interest provision of the bylaws of the Board with respect

to the decision.

(ii) Reasons

In the case of any violation and remand of a funding

decision to the Board under clause (i), the Secretary shall

inform the Board of the reasons for the remand.

(iii) Conflicted members not to vote on remanded decisions

If a decision with respect to a matter is remanded to the

Board by reason of a conflict of interest faced by a Board

member, the member may not participate in any subsequent

decision with respect to the matter.

(11) Compensation

(A) In general

A member of the Board shall not receive any compensation by

reason of service on the Board.

(B) Expenses

A member of the Board shall be reimbursed for travel,

subsistence, and other necessary expenses incurred by the

member in the performance of a duty of the member.

(12) Bylaws

The Board shall adopt, and may from time to time amend, any

bylaw that is necessary for the proper management and functioning

of the Center.

(13) Public hearings

Not later than 1 year after April 4, 1996, the Board shall hold

public hearings on policy objectives of the program established

under this section.

(14) Organizational system

The Board shall provide a system of organization to fix

responsibility and promote efficiency in carrying out the

functions of the Board.

(15) Use of Department of Agriculture

The Board may, with the consent of the Secretary, utilize the

facilities of and the services of employees of the Department of

Agriculture, without cost to the Center.

(g) Officers and employees

(1) Executive director

(A) In general

The Board shall appoint an executive director to be the chief

executive officer of the Center.

(B) Tenure

The executive director shall serve at the pleasure of the

Board.

(C) Compensation

Compensation for the executive director shall be established

by the Board.

(2) Other officers and employees

The Board may select and appoint officers, attorneys,

employees, and agents who shall be vested with such powers and

duties as the Board may determine.

(3) Delegation

The Board may, by resolution, delegate to the chairperson, the

executive director, or any other officer or employee any

function, power, or duty of the Board other than voting on a

grant, loan, contract, agreement, budget, or annual strategic

plan.

(h) Consultation

To carry out this section, the Board may consult with -

(1) State departments of agriculture;

(2) Federal departments and agencies;

(3) nonprofit development corporations;

(4) colleges and universities;

(5) banking and other credit-related agencies;

(6) agriculture and agribusiness organizations; and

(7) regional planning and development organizations.

(i) Oversight

(1) In general

The Secretary shall review and monitor compliance by the Board

and the Center with this section.

(2) Sanctions

If, following notice and opportunity for a hearing, the

Secretary finds that the Board or the Center is not in compliance

with this section, the Secretary may -

(A) cease making deposits to the Fund;

(B) suspend the authority of the Center to withdraw funds

from the Fund; or

(C) impose other appropriate sanctions, including recoupment

of money improperly expended for purposes prohibited or not

authorized by this Act and disqualification from receipt of

financial assistance under this section.

(3) Rescission of sanctions

The Secretary shall rescind sanctions imposed under paragraph

(2) on a finding by the Secretary that there is no longer any

failure by the Board or the Center to comply with this section or

that the noncompliance will be promptly corrected.

(j) Privatization

(1) In general

Privatization of a revolving fund for the purposes of assisting

the United States sheep and goat industries shall occur on the

earlier of -

(A) September 30, 2006; or

(B) the date as of which a total of $30,000,000 has been

appropriated for the Center under subsection (e)(6)(C) of this

section.

(2) Privatization proposal

On privatization of a revolving fund in accordance with

paragraph (1), the Board shall submit to the Secretary, for

approval, a privatization proposal that -

(A) delineates a private successor entity to the Center; and

(B) establishes a transition plan.

(3) Private successor entity

The private successor entity shall -

(A) have the purposes described in subsection (c) of this

section;

(B) be organized under the laws of one of the States; and

(C) be able to continue the activities of the Center.

(4) Transition plan

The transition plan shall -

(A) identify any continuing role of the Federal Government

with respect to the Center;

(B) provide for the transfer of all Center assets and

liabilities to the private successor entity; and

(C) delineate the status of the Board and employees of the

Center.

(5) Implementation

(A) In general

On approval by the Secretary of the private successor entity

and the transition plan, the Center shall create the private

successor entity and implement the transition plan.

(B) Authority

The Secretary shall have all necessary authority to implement

the transition plan.

(6) Transfer of funds

On creation of the private successor entity, all funds held by

the Department of the Treasury pursuant to this section shall be

transferred to the private successor entity.

(7) Repeal

On the date the Secretary publishes notice in the Federal

Register that the transition plan is complete, this section is

repealed.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 375, as added Pub. L. 104-127,

title VII, Sec. 759, Apr. 4, 1996, 110 Stat. 1132; amended Pub. L.

106-78, title VIII, Sec. 816, Oct. 22, 1999, 113 Stat. 1182; Pub.

L. 106-387, Sec. 1(a) (title VII, Sec. 756), Oct. 28, 2000, 114

Stat. 1549, 1549A-43; Pub. L. 107-76, title VII, Sec. 731, Nov. 28,

2001, 115 Stat. 736.)

-REFTEXT-

REFERENCES IN TEXT

This Act, referred to in subsec. (i)(2)(C), refers to the

Agricultural Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat.

294, as amended. For classification of this Act to the Code, see

Short Title note set out under section 1911 of this title and

Tables. However, the reference was probably intended to be ''this

title'' meaning the Consolidated Farm and Rural Development Act,

title III of Pub. L. 87-128, as amended, which is classified

principally to this chapter. For classification of this title to

the Code, see Short Title note set out under section 1921 of this

title and Tables.

-MISC2-

AMENDMENTS

2001 - Subsec. (e)(6)(B). Pub. L. 107-76 substituted

''$26,000,000'' for ''$25,000,000''.

2000 - Subsec. (e)(6)(B). Pub. L. 106-387 substituted

''$25,000,000'' for ''$20,000,000''.

1999 - Subsec. (a)(5). Pub. L. 106-78, Sec. 816(a), added par.

(5).

Subsec. (e)(3)(A). Pub. L. 106-78, Sec. 816(b)(1)(A), added

subpar. (A) and struck out heading and text of former subpar. (A).

Text read as follows: ''The Center may use amounts in the Fund to

make grants and loans to eligible entities in accordance with a

strategic plan submitted under subsection (d) of this section.''

Subsec. (e)(3)(B). Pub. L. 106-78, Sec. 816(b)(1)(B), inserted at

end ''The Fund is intended to furnish the initial capital for a

revolving fund that will eventually be privatized for the purposes

of assisting the United States sheep and goat industries.''

Subsec. (e)(3)(D). Pub. L. 106-78, Sec. 816(b)(1)(C), (F),

redesignated subpar. (E) as (D) and struck out heading and text of

former subpar. (D). Text read as follows: ''The Center shall, to

the maximum extent practicable, use the Fund to provide a variety

of grants and intermediate- and long-term loans.''

Subsec. (e)(3)(E). Pub. L. 106-78, Sec. 816(b)(1)(F),

redesignated subpar. (F) as (E). Former subpar. (E) redesignated

(D).

Pub. L. 106-78, Sec. 816(b)(1)(D), added subpar. (E) and struck

out heading and text of former subpar. (E). Text read as follows:

''The Center may not use more than 3 percent of the amounts in the

Fund for a fiscal year for the administration of the Center.''

Subsec. (e)(3)(F) to (H). Pub. L. 106-78, Sec. 816(b)(1)(F),

redesignated subpars. (G) and (H) as (F) and (G), respectively.

Former subpar. (F) redesignated (E).

Subsec. (e)(3)(H)(vii). Pub. L. 106-78, Sec. 816(b)(1)(E), added

cl. (vii).

Subsec. (e)(6)(D). Pub. L. 106-78, Sec. 816(b)(2), struck out

heading and text of subpar. (D). Text read as follows: ''No

additional Federal funds shall be used to carry out this section

beginning on the earlier of -

''(i) the date that is 10 years after April 4, 1996; or

''(ii) the day after a total of $50,000,000 has been made

available under subparagraphs (B) and (C) to carry out this

section.''

Subsec. (f)(2)(B). Pub. L. 106-78, Sec. 816(c)(1), added subpar.

(B) and struck out former subpar. (B) which read as follows:

''review any grant, loan, contract, or cooperative agreement to be

made or entered into by the Center and any financial assistance

provided to the Center;''.

Subsec. (f)(5)(C). Pub. L. 106-78, Sec. 816(c)(2), added subpar.

(C) and struck out heading and text of former subpar. (C). Text

read as follows: ''A voting member may be reelected for not more

than 1 additional term.''

Subsec. (f)(6)(B). Pub. L. 106-78, Sec. 816(c)(3), added subpar.

(B) and struck out heading and text of former subpar. (B). Text

read as follows: ''A member elected to fill a vacancy for an

unexpired term may be reelected for 1 full term.''

Subsec. (j). Pub. L. 106-78, Sec. 816(d), added subsec. (j).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 917 of this title.

-CITE-

7 USC Sec. 2008k 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008k. Making and servicing of loans by personnel of State,

county, or area committees

-STATUTE-

The Secretary shall use personnel of a State, county or area

committee established under section 590h(b)(5) of title 16 to make

and service loans under this chapter to the extent the personnel

have been trained to do so.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 376, as added Pub. L. 107-171,

title V, Sec. 5320, May 13, 2002, 116 Stat. 349.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in text, see note

set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7001 of this title.

-CITE-

7 USC Sec. 2008l 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008l. Eligibility of employees of State, county, or area

committee for loans and loan guarantees

-STATUTE-

(a) In general

The Secretary shall not prohibit an employee of a State, county

or area committee established under section 590h(b)(5) of title 16

or an employee of the Department of Agriculture from obtaining a

loan or loan guarantee under subchapter I, II or III of this

chapter.

(b) Approvals

(1) County or area office

In the case of a loan application from an employee in a county

or area office, the Farm Service Agency State office shall be

responsible for reviewing and approving the application.

(2) State office

In the case of a loan application from an employee of a State

office, the Farm Service Agency national office shall be

responsible for reviewing and approving the application.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 377, as added Pub. L. 107-171,

title V, Sec. 5321, May 13, 2002, 116 Stat. 349.)

-CITE-

7 USC Sec. 2008m 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008m. National Rural Development Partnership

-STATUTE-

(a) Definitions

In this section:

(1) Agency with rural responsibilities

The term ''agency with rural responsibilities'' means any

executive agency (as defined in section 105 of title 5) that

implements a Federal law, or administers a program, targeted at

or having a significant impact on rural areas.

(2) Coordinating Committee

The term ''Coordinating Committee'' means the National Rural

Development Coordinating Committee established by subsection (c)

of this section.

(3) Partnership

The term ''Partnership'' means the National Rural Development

Partnership continued by subsection (b) of this section.

(4) State rural development council

The term ''State rural development council'' means a State

rural development council that meets the requirements of

subsection (d) of this section.

(b) Partnership

(1) In general

The Secretary shall continue the National Rural Development

Partnership composed of -

(A) the Coordinating Committee; and

(B) State rural development councils.

(2) Purposes

The purposes of the Partnership are to empower and build the

capacity of States and rural communities to design flexible and

innovative responses to their own special rural development

needs, with local determinations of progress and selection of

projects and activities.

(3) Governing panel

(A) In general

A panel consisting of representatives of the Coordinating

Committee and State rural development councils shall be

established to lead and coordinate the strategic operation,

policies, and practices of the Partnership.

(B) Annual reports

In conjunction with the Coordinating Committee and State

rural development councils, the panel shall prepare and submit

to Congress an annual report on the activities of the

Partnership.

(4) Role of Federal Government

The role of the Federal Government in the Partnership may be

that of a partner and facilitator, with Federal agencies

authorized -

(A) to cooperate with States to implement the Partnership;

(B) to provide States with the technical and administrative

support necessary to plan and implement tailored rural

development strategies to meet local needs;

(C) to ensure that the head of each agency with rural

responsibilities designates a senior-level agency official to

represent the agency on the Coordinating Committee and directs

appropriate field staff to participate fully with the State

rural development council within the jurisdiction of the field

staff; and

(D) to enter into cooperative agreements with, and to provide

grants and other assistance to, the Coordinating Committee and

State rural development councils.

(c) National Rural Development Coordinating Committee

(1) Establishment

The Secretary shall establish a National Rural Development

Coordinating Committee within the Department of Agriculture.

(2) Composition

The Coordinating Committee shall be composed of -

(A) 1 representative of each agency with rural

responsibilities; and

(B) representatives, approved by the Secretary, of -

(i) national associations of State, regional, local, and

tribal governments and intergovernmental and

multijurisdictional agencies and organizations;

(ii) national public interest groups;

(iii) other national nonprofit organizations that elect to

participate in the activities of the Coordinating Committee;

and

(iv) the private sector.

(3) Duties

The Coordinating Committee shall -

(A) support the work of the State rural development councils;

(B) facilitate coordination of rural development policies,

programs, and activities among Federal agencies and with those

of State, local, and tribal governments, the private sector,

and nonprofit organizations;

(C) review and comment on policies, regulations, and proposed

legislation that affect or would affect rural areas and gather

and provide related information;

(D) develop and facilitate strategies to reduce or eliminate

administrative and regulatory impediments; and

(E) require each State rural development council receiving

funds under this section to submit an annual report on the use

of the funds, including a description of strategic plans,

goals, performance measures, and outcomes for the State rural

development council of the State.

(4) Federal participation in Coordinating Committee

(A) In general

A Federal employee shall fully participate in the governance

and operations of the Coordinating Committee, including

activities related to grants, contracts, and other agreements,

in accordance with this section.

(B) Conflicts

Participation by a Federal employee in the Coordinating

Committee in accordance with this paragraph shall not

constitute a violation of section 205 or 208 of title 18.

(5) Administrative support

The Secretary may provide such administrative support for the

Coordinating Committee as the Secretary determines is necessary

to carry out the duties of the Coordinating Committee.

(6) Procedures

The Secretary may prescribe such regulations, bylaws, or other

procedures as are necessary for the operation of the Coordinating

Committee.

(d) State rural development councils

(1) Establishment

Notwithstanding chapter 63 of title 31, each State may elect to

participate in the Partnership by entering into an agreement with

the Secretary to recognize a State rural development council.

(2) Composition

A State rural development council shall -

(A) be composed of representatives of Federal, State, local,

and tribal governments, nonprofit organizations, regional

organizations, the private sector, and other entities committed

to rural advancement; and

(B) have a nonpartisan and nondiscriminatory membership that

-

(i) is broad and representative of the economic, social,

and political diversity of the State; and

(ii) shall be responsible for the governance and operations

of the State rural development council.

(3) Duties

A State rural development council shall -

(A) facilitate collaboration among Federal, State, local, and

tribal governments and the private and nonprofit sectors in the

planning and implementation of programs and policies that have

an impact on rural areas of the State;

(B) monitor, report, and comment on policies and programs

that address, or fail to address, the needs of the rural areas

of the State;

(C) as part of the Partnership, in conjunction with the

Coordinating Committee, facilitate the development of

strategies to reduce or eliminate conflicting or duplicative

administrative or regulatory requirements of Federal, State,

local, and tribal governments; and

(D)(i) provide to the Coordinating Committee an annual plan

with goals and performance measures; and

(ii) submit to the Coordinating Committee an annual report on

the progress of the State rural development council in meeting

the goals and measures.

(4) Federal participation in State rural development councils

(A) In general

A State Director for Rural Development of the Department of

Agriculture, other employees of the Department, and employees

of other Federal agencies with rural responsibilities shall

fully participate as voting members in the governance and

operations of State rural development councils (including

activities related to grants, contracts, and other agreements

in accordance with this section) on an equal basis with other

members of the State rural development councils.

(B) Conflicts

Participation by a Federal employee in a State rural

development council in accordance with this paragraph shall not

constitute a violation of section 205 or 208 of title 18.

(e) Administrative support of the Partnership

(1) Detail of employees

(A) In general

In order to provide experience in intergovernmental

collaboration, the head of an agency with rural

responsibilities that elects to participate in the Partnership

may, and is encouraged to, detail to the Secretary for the

support of the Partnership 1 or more employees of the agency

with rural responsibilities without reimbursement for a period

of up to 1 year.

(B) Civil service status

The detail shall be without interruption or loss of civil

service status or privilege.

(2) Additional support

The Secretary may provide for any additional support staff to

the Partnership as the Secretary determines to be necessary to

carry out the duties of the Partnership.

(3) Intermediaries

The Secretary may enter into a contract with a qualified

intermediary under which the intermediary shall be responsible

for providing administrative and technical assistance to a State

rural development council, including administering the financial

assistance available to the State rural development council.

(f) Matching requirements for State rural development councils

(1) In general

Except as provided in paragraph (2), a State rural development

council shall provide matching funds, or in-kind goods or

services, to support the activities of the State rural

development council in an amount that is not less than 33 percent

of the amount of Federal funds received from a Federal agency

under subsection (g)(2) of this section.

(2) Exceptions to matching requirement for certain Federal funds

Paragraph (1) shall not apply to funds, grants, funds provided

under contracts or cooperative agreements, gifts, contributions,

or technical assistance received by a State rural development

council from a Federal agency that are used -

(A) to support 1 or more specific program or project

activities; or

(B) to reimburse the State rural development council for

services provided to the Federal agency providing the funds,

grants, funds provided under contracts or cooperative

agreements, gifts, contributions, or technical assistance.

(3) Department's share

The Secretary shall develop a plan to decrease, over time, the

share of the Department of Agriculture of the cost of the core

operations of State rural development councils.

(g) Funding

(1) Authorization of appropriations

There is authorized to be appropriated to carry out this

section $10,000,000 for each of fiscal years 2003 through 2007.

(2) Federal agencies

(A) In general

Notwithstanding any other provision of law limiting the

ability of an agency, along with other agencies, to provide

funds to the Coordinating Committee or a State rural

development council in order to carry out the purposes of this

section, a Federal agency may make grants, gifts, or

contributions to, provide technical assistance to, or enter

into contracts or cooperative agreements with, the Coordinating

Committee or a State rural development council.

(B) Assistance

Federal agencies are encouraged to use funds made available

for programs that have an impact on rural areas to provide

assistance to, and enter into contracts with, the Coordinating

Committee or a State rural development council, as described in

subparagraph (A).

(3) Contributions

The Coordinating Committee and a State rural development

council may accept private contributions.

(h) Termination

The authority provided under this section shall terminate on the

date that is 5 years after May 13, 2002.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 378, as added Pub. L. 107-171,

title VI, Sec. 6021, May 13, 2002, 116 Stat. 363.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1991 of this title.

-CITE-

7 USC Sec. 2008n 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008n. Rural telework

-STATUTE-

(a) Definitions

In this section:

(1) Eligible organization

The term ''eligible organization'' means a nonprofit entity, an

educational institution, an Indian tribe (as defined in section

450b of title 25), or any other organization, in a rural area

(except for the institute), that meets the requirements of this

section and such other requirements as are established by the

Secretary.

(2) Institute

The term ''institute'' means a rural telework institute

established using a grant under subsection (b) of this section.

(3) Telework

The term ''telework'' means the use of telecommunications to

perform work functions at a rural work center located outside the

place of business of an employer.

(b) Rural telework institute

(1) In general

The Secretary shall make 1 or more grants to an eligible

organization to pay the Federal share of the cost of establishing

and operating a national rural telework institute to carry out

projects described in paragraph (2).

(2) Projects

The institute shall use grant funds received under this

subsection to carry out a 5-year project -

(A) to serve as a clearinghouse for telework research and

development;

(B) to conduct outreach to rural communities and rural

workers;

(C) to develop and share best practices in rural telework

throughout the United States;

(D) to develop innovative, market-driven telework projects

and joint ventures with the private sector that employ workers

in rural areas in jobs that promote economic self-sufficiency;

(E) to share information about the design and implementation

of telework arrangements;

(F) to support private sector businesses that are

transitioning to telework;

(G) to support and assist telework projects and individuals

at the State and local level; and

(H) to perform such other functions as the Secretary

considers appropriate.

(3) Non-Federal share

(A) In general

As a condition of receiving a grant under this subsection, an

eligible organization shall agree to obtain, after the

application of the eligible organization has been approved and

notice of award has been issued, contributions from non-Federal

sources that are equal to -

(i) during each of the first, second, and third years of a

project, 30 percent of the amount of the grant; and

(ii) during each of the fourth and fifth years of the

project, 50 percent of the amount of the grant.

(B) Indian tribes

Notwithstanding subparagraph (A), an Indian tribe may use any

Federal funds made available to the Indian tribe for

self-governance to pay the non-Federal contributions required

under subparagraph (A).

(C) Form

The non-Federal contributions required under subparagraph (A)

may be in the form of in-kind contributions, including office

equipment, office space, computer software, consultant

services, computer networking equipment, and related services.

(c) Telework grants

(1) In general

Subject to paragraphs (2) through (5), the Secretary shall make

grants to eligible organizations to pay the Federal share of the

cost of -

(A) obtaining equipment and facilities to establish or expand

telework locations in rural areas; and

(B) operating telework locations in rural areas.

(2) Applications

To be eligible to receive a grant under this subsection, an

eligible organization shall submit to the Secretary, and receive

the approval of the Secretary of, an application for the grant

that demonstrates that the eligible organization has adequate

resources and capabilities to establish or expand a telework

location in a rural area.

(3) Non-Federal share

(A) In general

As a condition of receiving a grant under this subsection, an

eligible organization shall agree to obtain, after the

application of the eligible organization has been approved and

notice of award has been issued, contributions from non-Federal

sources that are equal to 50 percent of the amount of the

grant.

(B) Indian tribes

Notwithstanding subparagraph (A), an Indian tribe may use

Federal funds made available to the tribe for self-governance

to pay the non-Federal contributions required under

subparagraph (A).

(C) Sources

The non-Federal contributions required under subparagraph (A)

-

(i) may be in the form of in-kind contributions, including

office equipment, office space, computer software, consultant

services, computer networking equipment, and related

services; and

(ii) may not be made from funds made available for

community development block grants under title I of the

Housing and Community Development Act of 1974 (42 U.S.C. 5301

et seq.).

(4) Duration

The Secretary may not provide a grant under this subsection to

expand or operate a telework location in a rural area after the

date that is 3 years after the establishment of the telework

location.

(5) Amount

The amount of a grant provided to an eligible organization

under this subsection shall be not less than $1,000,000 and not

more than $2,000,000.

(d) Applicability of certain Federal law

An eligible organization that receives funds under this section

shall be subject to the provisions of Federal law (including

regulations) administered by the Secretary of Labor or the Equal

Employment Opportunity Commission that govern the responsibilities

of employers to employees.

(e) Regulations

Not later than 180 days after May 13, 2002, the Secretary shall

promulgate regulations to carry out this section.

(f) Authorization of appropriation

There is authorized to be appropriated to carry out this section

$30,000,000 for each of fiscal years 2002 through 2007, of which

$5,000,000 shall be provided to establish and support an institute

under subsection (b) of this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 379, as added Pub. L. 107-171,

title VI, Sec. 6022, May 13, 2002, 116 Stat. 368.)

-REFTEXT-

REFERENCES IN TEXT

The Housing and Community Development Act of 1974, referred to in

subsec. (c)(3)(C)(ii), is Pub. L. 93-383, Aug. 22, 1974, 88 Stat.

633, as amended. Title I of the Act is classified principally to

chapter 69 (Sec. 5301 et seq.) of Title 42, The Public Health and

Welfare. For complete classification of this Act to the Code, see

Short Title note set out under section 5301 of Title 42 and Tables.

-CITE-

7 USC Sec. 2008o 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008o. Historic barn preservation

-STATUTE-

(a) Definitions

In this section:

(1) Barn

The term ''barn'' means a building (other than a dwelling) on a

farm, ranch, or other agricultural operation for -

(A) housing animals;

(B) storing or processing crops;

(C) storing and maintaining agricultural equipment; or

(D) serving an essential or useful purpose related to

agricultural activities conducted on the adjacent land.

(2) Eligible applicant

The term ''eligible applicant'' means -

(A) a State department of agriculture (or a designee);

(B) a national or State nonprofit organization that -

(i) is described in section 501(c)(3) of title 26 and

exempt from taxation under section 501(a) of title 26; and

(ii) has experience or expertise, as determined by the

Secretary, in the identification, evaluation, rehabilitation,

preservation, or protection of historic barns; and

(C) a State historic preservation office.

(3) Historic barn

The term ''historic barn'' means a barn that -

(A) is at least 50 years old;

(B) retains sufficient integrity of design, materials, and

construction to clearly identify the barn as an agricultural

building; and

(C) meets the criteria for listing on National, State, or

local registers or inventories of historic structures.

(4) Secretary

The term ''Secretary'' means the Secretary, acting through the

Under Secretary of Rural Development.

(b) Program

The Secretary shall establish a historic barn preservation

program -

(1) to assist States in developing a list of historic barns;

(2) to collect and disseminate information on historic barns;

(3) to foster educational programs relating to the history,

construction techniques, rehabilitation, and contribution to

society of historic barns; and

(4) to sponsor and conduct research on -

(A) the history of barns; and

(B) best practices to protect and rehabilitate historic barns

from the effects of decay, fire, arson, and natural disasters.

(c) Grants

(1) In general

The Secretary may make grants to, or enter into contracts or

cooperative agreements with, eligible applicants to carry out an

eligible project under paragraph (2).

(2) Eligible projects

A grant under this subsection may be made to an eligible

applicant for a project -

(A) to rehabilitate or repair a historic barn;

(B) to preserve a historic barn through -

(i) the installation of a fire protection system, including

fireproofing or fire detection system and sprinklers; and

(ii) the installation of a system to prevent vandalism; and

(C) to identify, document, and conduct research on a historic

barn to develop and evaluate appropriate techniques or best

practices for protecting historic barns.

(3) Requirements

An eligible applicant that receives a grant for a project under

this subsection shall comply with any standards established by

the Secretary of the Interior for historic preservation projects.

(4) Authorization of appropriations

There are authorized to be appropriated such sums as are

necessary to carry out this section for each of fiscal years 2002

through 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 379A, as added Pub. L. 107-171,

title VI, Sec. 6023, May 13, 2002, 116 Stat. 370.)

-CITE-

7 USC Sec. 2008p 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008p. Grants for NOAA weather radio transmitters

-STATUTE-

(a) In general

The Secretary, acting through the Administrator of the Rural

Utilities Service, may make grants to public and nonprofit

entities, and borrowers of loans made by the Rural Utilities

Service, for the Federal share of the cost of acquiring radio

transmitters to increase coverage of rural areas by the all hazards

weather radio broadcast system of the National Oceanic and

Atmospheric Administration.

(b) Eligibility

To be eligible for a grant under this section, an applicant shall

provide to the Secretary -

(1) a binding commitment from a tower owner to place the

transmitter on a tower; and

(2) a description of how the tower placement will increase

coverage of a rural area by the all hazards weather radio

broadcast system of the National Oceanic and Atmospheric

Administration.

(c) Federal share

A grant provided under this section shall be not more than 75

percent of the total cost of acquiring a radio transmitter, as

described in subsection (a) of this section.

(d) Authorization of appropriations

There are authorized to be appropriated such sums as are

necessary to carry out this section for each of fiscal years 2002

through 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 379B, as added Pub. L. 107-171,

title VI, Sec. 6024, May 13, 2002, 116 Stat. 371.)

-CITE-

7 USC Sec. 2008q 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008q. Grants to train farm workers in new technologies and to

train farm workers in specialized skills necessary for higher

value crops

-STATUTE-

(a) In general

The Secretary shall make grants to nonprofit organizations, or to

a consortium of nonprofit organizations, agribusinesses, State and

local governments, agricultural labor organizations, farmer or

rancher cooperatives, and community-based organizations with the

capacity to train farm workers.

(b) Use of funds

An entity to which a grant is made under this section shall use

the grant to train farm workers to use new technologies and develop

specialized skills for agricultural development.

(c) Authorization of appropriations

There is authorized to be appropriated to carry out this section

$10,000,000 for each of fiscal years 2002 through 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 379C, as added Pub. L. 107-171,

title VI, Sec. 6025, May 13, 2002, 116 Stat. 372.)

-CITE-

7 USC Sec. 2008r 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IV - ADMINISTRATIVE PROVISIONS

-HEAD-

Sec. 2008r. Delta region agricultural economic development

-STATUTE-

(a) In general

The Secretary may make grants to assist in the development of

state-of-the-art technology in animal nutrition (including research

and development of the technology) and value-added manufacturing to

promote an economic platform for the Delta region (as defined in

section 2009aa of this title) to relieve severe economic

conditions.

(b) Authorization of appropriations

There are authorized to be appropriated to carry out this section

$7,000,000 for each of fiscal years 2002 through 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 379D, as added Pub. L. 107-171,

title VI, Sec. 6027(i), May 13, 2002, 116 Stat. 374.)

-CITE-

7 USC SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

.

-HEAD-

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 917 of this title.

-CITE-

7 USC Sec. 2009 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009. Definitions

-STATUTE-

In this subchapter:

(1) State

The term ''State'' means each of the 50 States, the District of

Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin

Islands of the United States, American Samoa, the Commonwealth of

the Northern Mariana Islands, the Trust Territory of the Pacific

Islands, and the Federated States of Micronesia.

(2) State director

The term ''State director'' means, with respect to a State, the

Director of the Rural Economic and Community Development State

Office.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381A, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1139; amended Pub. L.

107-171, title VI, Sec. 6020(b)(2), May 13, 2002, 116 Stat. 363.)

-MISC1-

AMENDMENTS

2002 - Pub. L. 107-171 redesignated pars. (2) and (3) as (1) and

(2), respectively, and struck out heading and text of former par.

(1). Text read as follows: ''The terms 'rural' and 'rural area'

mean, subject to section 1926(a)(7) of this title, a city, town, or

unincorporated area that has a population of 50,000 inhabitants or

less, other than an urbanized area immediately adjacent to a city,

town, or unincorporated area that has a population in excess of

50,000 inhabitants.''

DEFINITION OF RURAL AREAS FOR CERTAIN BUSINESS AND COMMUNITY

FACILITIES PROGRAMS

Pub. L. 106-78, title VII, Sec. 730, Oct. 22, 1999, 113 Stat.

1164, provided that: ''Notwithstanding section 381A of the

Consolidated Farm and Rural Development Act (7 U.S.C. 2009), in

fiscal year 2000 and thereafter, the definitions of rural areas for

certain business programs administered by the Rural

Business-Cooperative Service and the community facilities programs

administered by the Rural Housing Service shall be those provided

for in statute and regulations prior to the enactment of Public Law

104-127 (Apr. 4, 1996).''

Similar provisions were contained in Pub. L. 105-277, div. A,

Sec. 101(a) (title VII, Sec. 735), Oct. 21, 1998, 112 Stat. 2681,

2681-29, prior to repeal by Pub. L. 107-171, title VI, Sec.

6020(b)(3), May 13, 2002, 116 Stat. 363.

-TRANS-

TERMINATION OF TRUST TERRITORY OF THE PACIFIC ISLANDS

For termination of Trust Territory of the Pacific Islands, see

note set out preceding section 1681 of Title 48, Territories and

Insular Possessions.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1926, 2009ee of this

title.

-CITE-

7 USC Sec. 2009a 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009a. Establishment

-STATUTE-

The Secretary shall establish a rural community advancement

program to provide grants, loans, loan guarantees, and other

assistance to meet the rural development needs of local communities

in States and federally recognized Indian tribes.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381B, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1139.)

-CITE-

7 USC Sec. 2009b 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009b. National objectives

-STATUTE-

The national objectives of the program established under this

subchapter shall be to -

(1) promote strategic development activities and collaborative

efforts by State and local communities, and federally recognized

Indian tribes, to maximize the impact of Federal assistance;

(2) optimize the use of resources;

(3) provide assistance in a manner that reflects the complexity

of rural needs, including the needs for business development,

health care, education, infrastructure, cultural resources, the

environment, and housing;

(4) advance activities that empower, and build the capacity of,

State and local communities to design unique responses to the

special needs of the State and local communities, and federally

recognized Indian tribes, for rural development assistance; and

(5) adopt flexible and innovative approaches to solving rural

development problems.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381C, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1139.)

-CITE-

7 USC Sec. 2009c 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009c. Strategic plans

-STATUTE-

(a) In general

The Secretary shall direct each of the Directors of Rural

Economic and Community Development State Offices to prepare a

strategic plan -

(1) for each State for the delivery of assistance under this

subchapter in the State; and

(2) for each federally recognized Indian tribe for the delivery

of assistance under this subchapter to the Indian tribe.

(b) Assistance

(1) In general

Financial assistance for rural development provided under this

subchapter for a State or a federally recognized Indian tribe

shall be used only for orderly community development that is

consistent with the strategic plan of the State or Indian tribe.

(2) Rural area

Assistance under this subchapter may only be provided in a

rural area.

(3) Small communities

In carrying out this subchapter in a State, the Secretary shall

give priority to communities with the smallest populations and

lowest per capita income.

(c) Review

The Secretary shall review the strategic plan of each State and

federally recognized Indian tribe not later than 60 days after

receiving the plan, and at least once every 5 years thereafter.

(d) Contents

A strategic plan of a State or federally recognized Indian tribe

under this section shall be a plan that -

(1) coordinates economic, human, and community development

plans and related activities proposed for an affected area;

(2) provides that the State or federally recognized Indian

tribe, as appropriate, and an affected community (including local

institutions and organizations that have contributed to the

planning process) shall act as full partners in the process of

developing and implementing the plan;

(3) identifies goals, methods, and benchmarks for measuring the

success of carrying out the plan and how the plan relates to

local or regional ecosystems;

(4) in the case of a State, provides for the involvement, in

the preparation of the plan, of State, local, private, and public

persons, State rural development councils, federally recognized

Indian tribes in the State, and community-based organizations;

(5) identifies the amount and source of Federal and non-Federal

resources that are available for carrying out the plan; and

(6) includes such other information as may be required by the

Secretary.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381D, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1140.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 950aaa-2, 2009f, 2009l of

this title.

-CITE-

7 USC Sec. 2009d 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009d. Rural Development Trust Fund

-STATUTE-

(a) Establishment

There is established in the Treasury of the United States a trust

fund which shall be known as the Rural Development Trust Fund (in

this subchapter referred to as the ''Trust Fund'').

(b) Accounts

There are established in the Trust Fund the following accounts:

(1) The rural community facilities account.

(2) The rural utilities account.

(3) The rural business and cooperative development account.

(4) The federally recognized Indian tribe account.

(c) Deposits into accounts

Notwithstanding any other provision of law, each fiscal year -

(1) all amounts made available to carry out the authorities

described in subsection (d)(1) of this section for the fiscal

year shall be deposited into the rural community facilities

account of the Trust Fund;

(2) all amounts made available to carry out the authorities

described in subsection (d)(2) of this section for the fiscal

year shall be deposited into the rural utilities account of the

Trust Fund; and

(3) all amounts made available to carry out the authorities

described in subsection (d)(3) of this section for the fiscal

year shall be deposited into the rural business and cooperative

development account of the Trust Fund.

(d) Function categories

The function categories described in this subsection are the

following:

(1) Rural community facilities

The rural community development category consists of all

amounts made available for -

(A) community facility direct and guaranteed loans under

section 1926(a)(1) of this title; or

(B) community facility grants under paragraph (19), (20), or

(21) of section 1926(a) of this title.

(2) Rural utilities

The rural utilities category consists of all amounts made

available for -

(A) water or waste disposal grants or direct or guaranteed

loans under paragraph (1) or (2) of section 1926(a) of this

title;

(B) rural water or wastewater technical assistance and

training grants under section 1926(a)(14) of this title;

(C) emergency community water assistance grants under section

1926a of this title; or

(D) solid waste management grants under section 1932(b) of

this title.

(3) Rural business and cooperative development

The rural business and cooperative development category

consists of all amounts made available for -

(A) rural business opportunity grants under section

1926(a)(11)(A) of this title;

(B) business and industry direct and guaranteed loans under

section 1932(a)(1) of this title; or

(C) rural business enterprise grants or rural educational

network grants under section 1932(c) of this title.

(e) Federally recognized Indian tribe account

(1) Transfers into account

Each fiscal year, the Secretary shall transfer to the federally

recognized Indian tribe account of the Trust Fund 3 percent of

the amount deposited into the Trust Fund for the fiscal year

under subsection (d) of this section.

(2) Use of funds

The Secretary shall make available to federally recognized

Indian tribes the amounts in the federally recognized Indian

tribe account for use pursuant to any authority described in

subsection (d) of this section.

(f) Allocation among States

The Secretary shall allocate the amounts in each account

specified in subsection (c) of this section among the States in a

fair, reasonable, and appropriate manner that takes into

consideration rural population, levels of income, unemployment, and

other relevant factors, as determined by the Secretary.

(g) Availability of funds allocated for States

The Secretary shall make available to each State the total amount

allocated for the State under subsection (f) of this section that

remains after applying section 2009f of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381E, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1140; amended Pub. L.

105-86, title III, Nov. 18, 1997, 111 Stat. 2094; Pub. L. 106-472,

title III, Sec. 304(b), 305(b), Nov. 9, 2000, 114 Stat. 2071; Pub.

L. 107-171, title VI, Sec. 6026(a), May 13, 2002, 116 Stat. 372.)

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(4), (5). Pub. L. 107-171, Sec. 6026(a)(1),

redesignated par. (5) as (4) and struck out former par. (4) which

read as follows: ''The national reserve account.''

Subsec. (e). Pub. L. 107-171, Sec. 6026(a)(2), (3), redesignated

subsec. (f) as (e) and struck out heading and text of former

subsec. (e) which related to national reserve account.

Subsec. (f). Pub. L. 107-171, Sec. 6026(a)(3), redesignated

subsec. (g) as (f). Former subsec. (f) redesignated (e).

Subsecs. (g), (h). Pub. L. 107-171, Sec. 6026(a)(3), (4),

redesignated subsec. (h) as (g) and substituted ''subsection (f) of

this section'' for ''subsection (g) of this section''. Former

subsec. (g) redesignated (f).

2000 - Subsec. (d)(1)(B). Pub. L. 106-472, Sec. 305(b),

substituted ''paragraph (19), (20), or (21)'' for ''paragraph (19)

or (20)''.

Pub. L. 106-472, Sec. 304(b), substituted ''paragraph (19) or

(20) of section 1926(a)'' for ''section 1926(a)(19)''.

1997 - Subsec. (d)(3)(B). Pub. L. 105-86 inserted ''direct and''

after ''business and industry''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009e, 2009f of this

title.

-CITE-

7 USC Sec. 2009e 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009e. Transfers of funds

-STATUTE-

(a) General authority

Subject to subsection (b) of this section, the State Director

(FOOTNOTE 1) of any State may, during any fiscal year, transfer

from each account specified in section 2009d(c) of this title a

total of not more than 25 percent of the amount in the account that

is allocated for the State for the fiscal year to any other account

in which amounts are allocated for the State for the fiscal year.

(FOOTNOTE 1) So in original. Probably should not be

capitalized.

(b) Limitation

Except as provided in subsection (c) of this section, a transfer

otherwise authorized by subsection (a) of this section to be made

during a fiscal year may not be made to the extent that the sum of

the amount to be transferred and all amounts so transferred by

State directors under subsection (a) of this section during the

fiscal year exceeds 10 percent of the total amount made available

to carry out the authorities described in section 2009d(d) of this

title for the fiscal year.

(c) Exceptions

Subsections (a) and (b) of this section shall not apply to a

transfer of funds by a State director if the State director

certifies to the Secretary that -

(1) there is an approved application for a project in the

function category to which the funds are to be transferred but

funds are not available for the project in the function category;

and

(2)(A) there is no such approved application in the function

category from which the funds are to be transferred; or

(B) the community that would benefit from the project has a

smaller population and a lesser per capita income than any

community that would benefit from a project in the function

category from which the funds are to be transferred.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381F, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1142.)

-CITE-

7 USC Sec. 2009f 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009f. Grants to States

-STATUTE-

(a) Simple grants

(1) Mandatory grant

The Secretary shall make a grant to any eligible State for any

fiscal year for which the State requests a grant under this

section in an amount equal to 5 percent of the total amount

allocated for the State under section 2009d(f) of this title.

(2) Permissive grant

Before July 15 of each fiscal year, the Secretary may make a

grant to any State to defray the cost of any subsidy associated

with a guarantee provided by an eligible public entity of the

State under section 2009g of this title in an amount that does

not exceed 5 percent of the total amount allocated for the State

under section 2009d(f) of this title.

(3) Source of funds

The Secretary shall make grants to a State under paragraphs (1)

and (2) from amounts allocated for the State in the accounts

specified in section 2009d(c) of this title, by reducing each

such allocated amount by the same percentage.

(b) Matching grants

(1) In general

Subject to paragraph (2), the Secretary shall make a grant to

any eligible State for any fiscal year for which the State

requests a grant under this section in an amount equal to 5

percent of the amount allocated for the State for the fiscal year

under section 2009d(g) of this title.

(2) Eligibility

A State shall be eligible for a grant under paragraph (1) if

the State makes commitments to the Secretary to -

(A) expend from non-Federal sources in accordance with

subsection (c) of this section an amount that is not less than

200 percent of the amount of the grant; and

(B) maintain the amounts paid to the State under this

subsection and the amount referred to in subparagraph (A) in an

account separate from all other State funds until expended in

accordance with subsection (c) of this section.

(3) Source of funds

If the Secretary makes a grant under paragraph (1) before July

15 of the fiscal year, the grant shall be made from amounts

allocated for the State in the accounts specified in section

2009d(c) of this title for the fiscal year, by reducing each

allocated amount by the same percentage.

(c) Use of funds

A State to which funds are provided under this section shall use

the funds in rural areas for any activity authorized under the

authorities described in section 2009d(d) of this title in

accordance with the State strategic plan referred to in section

2009c of this title.

(d) Maintenance of effort

The State shall provide assurances to the Secretary that funds

provided to the State under this section will be used only to

supplement, not to supplant, the amount of Federal, State, and

local funds otherwise expended for rural development assistance in

the State.

(e) Appeals

The Secretary shall provide to a State an opportunity to appeal

any action taken with respect to the State under this section.

(f) Administrative costs

Federal funds shall not be used for any administrative costs

incurred by a State in carrying out this subchapter.

(g) Expenditure of funds by State

(1) In general

Payments to a State from a grant under this section for a

fiscal year shall be obligated by the State in the fiscal year or

in the succeeding fiscal year. A State shall obligate funds

under this section to provide assistance to rural areas.

(2) Failure to obligate

If a State fails to obligate payments in accordance with

paragraph (1), the Secretary shall make an equal reduction in the

amount of payments provided to the State under this section for

the immediately succeeding fiscal year.

(3) Noncompliance

(A) Review

The Secretary shall review and monitor State compliance with

this section.

(B) Penalty

If the Secretary finds that there has been misuse of grant

funds provided under this section, or noncompliance with any of

the terms and conditions of a grant, after reasonable notice

and opportunity for a hearing -

(i) the Secretary shall notify the State of the finding;

and

(ii) no further payments to the State shall be made with

respect to the programs funded under this section until the

Secretary is satisfied that there is no longer any failure to

comply or that the noncompliance will be promptly corrected.

(C) Other sanctions

In the case of a finding of noncompliance made pursuant to

subparagraph (B), the Secretary may, in addition to, or in lieu

of, imposing the sanctions described in subparagraph (B),

impose other appropriate sanctions, including recoupment of

money improperly expended for purposes prohibited or not

authorized by this section and disqualification from the

receipt of financial assistance under this section.

(h) No entitlement to contract, grant, or assistance

Nothing in this subchapter -

(1) entitles any person to assistance or a contract or grant;

or

(2) limits the right of a State to impose additional

limitations or conditions on assistance or a contract or grant

under this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381G, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1143; amended Pub. L.

107-171, title VI, Sec. 6026(c), May 13, 2002, 116 Stat. 372.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a)(1), (2). Pub. L. 107-171, Sec. 6026(c)(1),

substituted ''section 2009d(f) of this title'' for ''section

2009d(g) of this title''.

Subsec. (b)(1). Pub. L. 107-171, Sec. 6026(c)(2), substituted

''section 2009d(g) of this title'' for ''section 2009d(h) of this

title''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009d, 2009g of this

title.

-CITE-

7 USC Sec. 2009g 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009g. Guarantee and commitment to guarantee loans

-STATUTE-

(a) ''Eligible public entity'' defined

In this section, the term ''eligible public entity'' means any

unit of general local government.

(b) Guarantee and commitment

The Secretary, on such terms and conditions as the Secretary may

prescribe, may guarantee and make commitments to guarantee notes or

other obligations issued by eligible public entities, or by public

agencies designated by the eligible public entities, for the

purposes of financing rural development activities authorized and

funded under section 2009f of this title.

(c) Limitation

The Secretary may not make a guarantee or commitment to guarantee

with respect to a note or other obligation if the total amount of

outstanding notes or obligations guaranteed under this section

(excluding any amount repaid under the contract entered into under

subsection (e)(1)(A) of this section) for issuers in the State

would exceed an amount equal to 5 times the sum of the total amount

of grants made to the State under section 2009f of this title.

(d) Payment of principal, interest, and costs

Notwithstanding any other provision of this subchapter, a State

to which a grant is made under section 2009f of this title may use

the grant (including program income derived from the grant) to pay

principal and interest due (including such servicing, underwriting,

or other costs as may be specified in regulations of the Secretary)

on any note or other obligation guaranteed under this section.

(e) Repayment contract; security

(1) In general

To ensure the repayment of notes or other obligations and

charges incurred under this section and as a condition for

receiving the guarantees, the Secretary shall require the issuer

to -

(A) enter into a contract, in a form acceptable to the

Secretary, for repayment of notes or other obligations

guaranteed under this section;

(B) pledge any grant for which the issuer may become eligible

under this subchapter; and

(C) furnish, at the discretion of the Secretary, such other

security as may be considered appropriate by the Secretary in

making the guarantees.

(2) Security

To assist in ensuring the repayment of notes or other

obligations and charges incurred under this section, a State

shall pledge any grant for which the State may become eligible

under this subchapter as security for notes or other obligations

and charges issued under this section by any eligible public

entity in the State.

(f) Pledged grants for repayments

Notwithstanding any other provision of this subchapter, the

Secretary may apply grants pledged pursuant to paragraphs (1)(B)

and (2) of subsection (e) of this section to any repayments due the

United States as a result of the guarantees.

(g) Outstanding obligations

The total amount of outstanding obligations guaranteed on a

cumulative basis by the Secretary pursuant to subsection (b) of

this section shall not at any time exceed such amount as may be

authorized to be appropriated for such purpose for any fiscal year.

(h) Purchase of guaranteed obligations by Federal Financing Bank

Notes or other obligations guaranteed under this section may not

be purchased by the Federal Financing Bank.

(i) Full faith and credit

The full faith and credit of the United States is pledged to the

payment of all guarantees made under this section. Any such

guarantee made by the Secretary shall be conclusive evidence of the

eligibility of the obligations for the guarantee with respect to

principal and interest. The validity of the guarantee shall be

incontestable in the hands of a holder of the guaranteed

obligations.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381H, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1145.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009f, 2009cc-4, 2009cc-5

of this title.

-CITE-

7 USC Sec. 2009h 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009h. Local involvement

-STATUTE-

An application for assistance under this subchapter shall include

evidence of significant community support for the project for which

the assistance is requested. In the case of assistance for a

community facilities or infrastructure project, the evidence shall

be in the form of a certification of support for the project from

each affected general purpose local government.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381I, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1146.)

-CITE-

7 USC Sec. 2009i 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009i. Interstate collaboration

-STATUTE-

The Secretary shall permit the establishment of voluntary pooling

arrangements among States, and regional fund-sharing agreements, to

carry out projects receiving assistance under this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381J, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1146.)

-CITE-

7 USC Sec. 2009j 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009j. Annual report

-STATUTE-

(a) In general

The Secretary, in collaboration with State, local, public, and

private entities, State rural development councils, and

community-based organizations, shall prepare an annual report that

contains evaluations, assessments, and performance outcomes

concerning the rural community advancement programs carried out

under this subchapter.

(b) Submission

Not later than March 1 of each year, the Secretary shall -

(1) submit the report required by subsection (a) of this

section to Congress and the chief executives of the States

participating in the program established under this subchapter;

and

(2) make the report available to State and local participants.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381K, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1146.)

-CITE-

7 USC Sec. 2009k 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009k. Rural development interagency working group

-STATUTE-

(a) In general

The Secretary shall provide leadership within the Executive

branch for, and assume responsibility for, establishing an

interagency working group chaired by the Secretary.

(b) Duties

The working group shall establish policy for, coordinate, make

recommendations with respect to, and evaluate the performance of,

all Federal rural development efforts.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381L, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1146.)

-CITE-

7 USC Sec. 2009l 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009l. Duties of Rural Economic and Community Development

State Offices

-STATUTE-

In carrying out this subchapter, the Director of a Rural Economic

and Community Development State Office shall -

(1) to the maximum extent practicable, ensure that the State

strategic plan referred to in section 2009c of this title is

implemented;

(2) coordinate community development objectives within the

State;

(3) establish links between local, State, and field office

program administrators of the Department of Agriculture;

(4) ensure that recipient communities comply with applicable

Federal and State laws and requirements; and

(5) integrate State development programs with assistance under

this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381M, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1146.)

-CITE-

7 USC Sec. 2009m 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009m. Electronic transfer

-STATUTE-

The Secretary shall transfer funds in accordance with this

subchapter through electronic transfer as soon as practicable after

April 4, 1996.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 381N, as added Pub. L. 104-127,

title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1147.)

-CITE-

7 USC Sec. 2009n 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER V - RURAL COMMUNITY ADVANCEMENT PROGRAM

-HEAD-

Sec. 2009n. Repealed. Pub. L. 107-171, title VI, Sec. 6026(b), May

13, 2002, 116 Stat. 372

-MISC1-

Section, Pub. L. 87-128, title III, Sec. 381O, as added Pub. L.

104-127, title VII, Sec. 761, Apr. 4, 1996, 110 Stat. 1147, related

to rural venture capital demonstration program.

-CITE-

7 USC SUBCHAPTER VI - DELTA REGIONAL AUTHORITY 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

.

-HEAD-

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-CITE-

7 USC Sec. 2009aa 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa. Definitions

-STATUTE-

In this subchapter:

(1) Authority

The term ''Authority'' means the Delta Regional Authority

established by section 2009aa-1 of this title.

(2) Region

The term ''region'' means the Lower Mississippi (as defined in

section 4 of the Delta Development Act (42 U.S.C. 3121 note;

Public Law 100-460)).

(3) Federal grant program

The term ''Federal grant program'' means a Federal grant

program to provide assistance in -

(A) acquiring or developing land;

(B) constructing or equipping a highway, road, bridge, or

facility; or

(C) carrying out other economic development activities.

(4) Alabama as participating State

Notwithstanding any other provision of law, the State of

Alabama shall be a full member of the Delta Regional Authority

and shall be entitled to all rights and privileges that said

membership affords to all other participating States in the Delta

Regional Authority.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382A, as added and amended Pub. L.

106-554, Sec. 1(a)(4) (div. B, title I, Sec. 153(b), title V, Sec.

503), Dec. 21, 2000, 114 Stat. 2763, 2763A-252, 2763A-269.)

-REFTEXT-

REFERENCES IN TEXT

The Delta Development Act, referred to in par. (2), is S. 2836 of

the 100th Congress, as introduced on Sept. 27, 1988, and

incorporated by reference by, and made a part of, Pub. L. 100-460,

title II, Oct. 1, 1988, 102 Stat. 2246, as amended. Section 4 of

the Delta Development Act, which was set out in a note under

section 3121 of Title 42, The Public Health and Welfare, was

omitted from the Code. See Lower Mississippi Delta Development

Commission note under section 3121 of Title 42 and Tables.

-MISC2-

AMENDMENTS

2000 - Par. (4). Pub. L. 106-554, Sec. 1(a)(4) (div. B, title I,

Sec. 153(b)), added par. (4).

FINDINGS AND PURPOSES

Pub. L. 106-554, Sec. 1(a)(4) (div. B, title V, Sec. 502), Dec.

21, 2000, 114 Stat. 2763, 2763A-268, provided that:

''(a) Findings. - Congress finds that -

''(1) the lower Mississippi River region (referred to in this

title (enacting this subchapter and amending provisions

classified as a note under section 3121 of Title 42, The Public

Health and Welfare) as the 'region'), though rich in natural and

human resources, lags behind the rest of the United States in

economic growth and prosperity;

''(2) the region suffers from a greater proportion of

measurable poverty and unemployment than any other region of the

United States;

''(3) the greatest hope for economic growth and revitalization

in the region lies in the development of transportation

infrastructure, creation of jobs, expansion of businesses, and

development of entrepreneurial local economies;

''(4) the economic progress of the region requires an adequate

transportation and physical infrastructure, a skilled and trained

workforce, and greater opportunities for enterprise development

and entrepreneurship;

''(5) a concerted and coordinated effort among Federal, State,

and local agencies, the private sector, and nonprofit groups is

needed if the region is to achieve its full potential for

economic development;

''(6) economic development planning on a regional or

multicounty basis offers the best prospect for achieving the

maximum benefit from public and private investments; and

''(7) improving the economy of the region requires a special

emphasis on areas of the region that are most economically

distressed.

''(b) Purposes. - The purposes of this title are -

''(1) to promote and encourage the economic development of the

region -

''(A) to ensure that the communities and people in the region

have the opportunity for economic development; and

''(B) to ensure that the economy of the region reaches

economic parity with that of the rest of the United States;

''(2) to establish a formal framework for joint Federal-State

collaboration in meeting and focusing national attention on the

economic development needs of the region;

''(3) to assist the region in obtaining the transportation and

basic infrastructure, skills training, and opportunities for

economic development that are essential for strong local

economies;

''(4) to foster coordination among all levels of government,

the private sector, and nonprofit groups in crafting common

regional strategies that will lead to broader economic growth;

''(5) to strengthen efforts that emphasize regional approaches

to economic development and planning;

''(6) to encourage the participation of interested citizens,

public officials, agencies, and others in developing and

implementing local and regional plans for broad-based economic

and community development; and

''(7) to focus special attention on areas of the region that

suffer from the greatest economic distress.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2008r of this title.

-CITE-

7 USC Sec. 2009aa-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-1. Delta Regional Authority

-STATUTE-

(a) Establishment

(1) In general

There is established the Delta Regional Authority.

(2) Composition

The Authority shall be composed of -

(A) a Federal member, to be appointed by the President, with

the advice and consent of the Senate; and

(B) the Governor (or a designee of the Governor) of each

State in the region that elects to participate in the

Authority.

(3) Cochairpersons

The Authority shall be headed by -

(A) the Federal member, who shall serve -

(i) as the Federal cochairperson; and

(ii) as a liaison between the Federal Government and the

Authority; and

(B) a State cochairperson, who -

(i) shall be a Governor of a participating State in the

region; and

(ii) shall be elected by the State members for a term of

not less than 1 year.

(b) Alternate members

(1) State alternates

The State member of a participating State may have a single

alternate, who shall be -

(A) a resident of that State; and

(B) appointed by the Governor of the State.

(2) Alternate Federal cochairperson

The President shall appoint an alternate Federal cochairperson.

(3) Quorum

A State alternate shall not be counted toward the establishment

of a quorum of the Authority in any instance in which a quorum of

the State members is required to be present.

(4) Delegation of power

No power or responsibility of the Authority specified in

paragraphs (2) and (3) of subsection (c) of this section, and no

voting right of any Authority member, shall be delegated to any

person -

(A) who is not an Authority member; or

(B) who is not entitled to vote in Authority meetings.

(c) Voting

(1) In general

(A) Temporary method

During the period beginning on May 13, 2002, and ending on

December 31, 2004, a decision by the Authority shall require

the affirmative vote of the Federal cochairperson and a

majority of the State members (not including any member

representing a State that is delinquent under subsection

(g)(2)(C) of this section) to be effective.

(B) Permanent method

Effective beginning on January 1, 2005, a decision by the

Authority shall require a majority vote of the Authority (not

including any member representing a State that is delinquent

under subsection (g)(2)(C) of this section) to be effective.

(2) Quorum

A quorum of State members shall be required to be present for

the Authority to make any policy decision, including -

(A) a modification or revision of an Authority policy

decision;

(B) approval of a State or regional development plan; and

(C) any allocation of funds among the States.

(3) Project and grant proposals

The approval of project and grant proposals shall be -

(A) a responsibility of the Authority; and

(B) conducted in accordance with section 2009aa-8 of this

title.

(4) Voting by alternate members

An alternate member shall vote in the case of the absence,

death, disability, removal, or resignation of the Federal or

State representative for which the alternate member is an

alternate.

(d) Duties

The Authority shall -

(1) develop, on a continuing basis, comprehensive and

coordinated plans and programs to establish priorities and

approve grants for the economic development of the region, giving

due consideration to other Federal, State, and local planning and

development activities in the region;

(2) not later than 220 days after December 21, 2000, establish

priorities in a development plan for the region (including 5-year

regional outcome targets);

(3) assess the needs and assets of the region based on

available research, demonstrations, investigations, assessments,

and evaluations of the region prepared by Federal, State, and

local agencies, universities, local development districts, and

other nonprofit groups;

(4) formulate and recommend to the Governors and legislatures

of States that participate in the Authority forms of interstate

cooperation;

(5) work with State and local agencies in developing

appropriate model legislation;

(6)(A) enhance the capacity of, and provide support for, local

development districts in the region; or

(B) if no local development district exists in an area in a

participating State in the region, foster the creation of a local

development district;

(7) encourage private investment in industrial, commercial, and

other economic development projects in the region; and

(8) cooperate with and assist State governments with economic

development programs of participating States.

(e) Administration

In carrying out subsection (d) of this section, the Authority may

-

(1) hold such hearings, sit and act at such times and places,

take such testimony, receive such evidence, and print or

otherwise reproduce and distribute a description of the

proceedings and reports on actions by the Authority as the

Authority considers appropriate;

(2) authorize, through the Federal or State cochairperson or

any other member of the Authority designated by the Authority,

the administration of oaths if the Authority determines that

testimony should be taken or evidence received under oath;

(3) request from any Federal, State, or local department or

agency such information as may be available to or procurable by

the department or agency that may be of use to the Authority in

carrying out duties of the Authority;

(4) adopt, amend, and repeal bylaws, rules, and regulations

governing the conduct of Authority business and the performance

of Authority duties;

(5) request the head of any Federal department or agency to

detail to the Authority such personnel as the Authority requires

to carry out duties of the Authority, each such detail to be

without loss of seniority, pay, or other employee status;

(6) request the head of any State department or agency or local

government to detail to the Authority such personnel as the

Authority requires to carry out duties of the Authority, each

such detail to be without loss of seniority, pay, or other

employee status;

(7) provide for coverage of Authority employees in a suitable

retirement and employee benefit system by -

(A) making arrangements or entering into contracts with any

participating State government; or

(B) otherwise providing retirement and other employee benefit

coverage;

(8) accept, use, and dispose of gifts or donations of services

or real, personal, tangible, or intangible property;

(9) enter into and perform such contracts, leases, cooperative

agreements, or other transactions as are necessary to carry out

Authority duties, including any contracts, leases, or cooperative

agreements with -

(A) any department, agency, or instrumentality of the United

States;

(B) any State (including a political subdivision, agency, or

instrumentality of the State); or

(C) any person, firm, association, or corporation; and

(10) establish and maintain a central office and field offices

at such locations as the Authority may select.

(f) Federal agency cooperation

A Federal agency shall -

(1) cooperate with the Authority; and

(2) provide, on request of the Federal cochairperson,

appropriate assistance in carrying out this subchapter, in

accordance with applicable Federal laws (including regulations).

(g) Administrative expenses

(1) In general

Administrative expenses of the Authority (except for the

expenses of the Federal cochairperson, including expenses of the

alternate and staff of the Federal cochairperson, which shall be

paid solely by the Federal Government) shall be paid -

(A) by the Federal Government, in an amount equal to 50

percent of the administrative expenses; and

(B) by the States in the region participating in the

Authority, in an amount equal to 50 percent of the

administrative expenses.

(2) State share

(A) In general

The share of administrative expenses of the Authority to be

paid by each State shall be determined by the Authority.

(B) No Federal participation

The Federal cochairperson shall not participate or vote in

any decision under subparagraph (A).

(C) Delinquent States

If a State is delinquent in payment of the State's share of

administrative expenses of the Authority under this subsection

-

(i) no assistance under this subchapter shall be furnished

to the State (including assistance to a political subdivision

or a resident of the State); and

(ii) no member of the Authority from the State shall

participate or vote in any action by the Authority.

(h) Compensation

(1) Federal cochairperson

The Federal cochairperson shall be compensated by the Federal

Government at level III of the Executive Schedule in subchapter

II of chapter 53 of title 5.

(2) Alternate Federal cochairperson

The alternate Federal cochairperson -

(A) shall be compensated by the Federal Government at level V

of the Executive Schedule described in paragraph (1); and

(B) when not actively serving as an alternate for the Federal

cochairperson, shall perform such functions and duties as are

delegated by the Federal cochairperson.

(3) State members and alternates

(A) In general

A State shall compensate each member and alternate

representing the State on the Authority at the rate established

by law of the State.

(B) No additional compensation

No State member or alternate member shall receive any salary,

or any contribution to or supplementation of salary from any

source other than the State for services provided by the member

or alternate to the Authority.

(4) Detailed employees

(A) In general

No person detailed to serve the Authority under subsection

(e)(6) of this section shall receive any salary or any

contribution to or supplementation of salary for services

provided to the Authority from -

(i) any source other than the State, local, or

intergovernmental department or agency from which the person

was detailed; or

(ii) the Authority.

(B) Violation

Any person that violates this paragraph shall be fined not

more than $5,000, imprisoned not more than 1 year, or both.

(C) Applicable law

The Federal cochairperson, the alternate Federal

cochairperson, and any Federal officer or employee detailed to

duty on the Authority under subsection (e)(5) of this section

shall not be subject to subparagraph (A), but shall remain

subject to sections 202 through 209 of title 18.

(5) Additional personnel

(A) Compensation

(i) In general

The Authority may appoint and fix the compensation of an

executive director and such other personnel as are necessary

to enable the Authority to carry out the duties of the

Authority.

(ii) Exception

Compensation under clause (i) shall not exceed the maximum

rate for the Senior Executive Service under section 5382 of

title 5, including any applicable locality-based

comparability payment that may be authorized under section

5304(h)(2)(C) of that title.

(B) Executive director

The executive director shall be responsible for -

(i) the carrying out of the administrative duties of the

Authority;

(ii) direction of the Authority staff; and

(iii) such other duties as the Authority may assign.

(C) No Federal employee status

No member, alternate, officer, or employee of the Authority

(except the Federal cochairperson of the Authority, the

alternate and staff for the Federal cochairperson, and any

Federal employee detailed to the Authority under subsection

(e)(5) of this section) shall be considered to be a Federal

employee for any purpose.

(i) Conflicts of interest

(1) In general

Except as provided under paragraph (2), no State member,

alternate, officer, or employee of the Authority shall

participate personally and substantially as a member, alternate,

officer, or employee of the Authority, through decision,

approval, disapproval, recommendation, the rendering of advice,

investigation, or otherwise, in any proceeding, application,

request for a ruling or other determination, contract, claim,

controversy, or other matter in which, to knowledge of the

member, alternate, officer, or employee -

(A) the member, alternate, officer, or employee;

(B) the spouse, minor child, partner, or organization (other

than a State or political subdivision of the State) of the

member, alternate, officer, or employee, in which the member,

alternate, officer, or employee is serving as officer,

director, trustee, partner, or employee; or

(C) any person or organization with whom the member,

alternate, officer, or employee is negotiating or has any

arrangement concerning prospective employment;

has a financial interest.

(2) Disclosure

Paragraph (1) shall not apply if the State member, alternate,

officer, or employee -

(A) immediately advises the Authority of the nature and

circumstances of the proceeding, application, request for a

ruling or other determination, contract, claim, controversy, or

other particular matter presenting a potential conflict of

interest;

(B) makes full disclosure of the financial interest; and

(C) before the proceeding concerning the matter presenting

the conflict of interest, receives a written determination by

the Authority that the interest is not so substantial as to be

likely to affect the integrity of the services that the

Authority may expect from the State member, alternate, officer,

or employee.

(3) Violation

Any person that violates this subsection shall be fined not

more than $10,000, imprisoned not more than 2 years, or both.

(j) Validity of contracts, loans, and grants

The Authority may declare void any contract, loan, or grant of or

by the Authority in relation to which the Authority determines that

there has been a violation of any provision under subsection (h)(4)

of this section, subsection (i) of this section, or sections 202

through 209 of title 18.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382B, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-269; amended Pub. L. 107-171, title VI, Sec. 6027(a),

(b), May 13, 2002, 116 Stat. 373.)

-MISC1-

AMENDMENTS

2002 - Subsec. (c)(1). Pub. L. 107-171, Sec. 6027(a), added par.

(1) and struck out heading and text of former par. (1). Text read

as follows: ''A decision by the Authority shall require a majority

vote of the Authority (not including any member representing a

State that is delinquent under subsection (g)(2)(C) of this

section) to be effective.''

Subsec. (e)(4). Pub. L. 107-171, Sec. 6027(b), substituted '',

rules, and regulations'' for ''and rules''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009aa, 2009aa-6,

2009aa-8 of this title.

-CITE-

7 USC Sec. 2009aa-2 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-2. Economic and community development grants

-STATUTE-

(a) In general

The Authority may approve grants to States and public and

nonprofit entities for projects, approved in accordance with

section 2009aa-8 of this title -

(1) to develop the transportation infrastructure of the region

for the purpose of facilitating economic development in the

region (except that grants for this purpose may only be made to a

State or local government);

(2) to assist the region in obtaining the job training,

employment-related education, and business development (with an

emphasis on entrepreneurship) that are needed to build and

maintain strong local economies;

(3) to provide assistance to severely distressed and

underdeveloped areas that lack financial resources for improving

basic public services;

(4) to provide assistance to severely distressed and

underdeveloped areas that lack financial resources for equipping

industrial parks and related facilities; and

(5) to otherwise achieve the purposes of this subchapter.

(b) Funding

(1) In general

Funds for grants under subsection (a) of this section may be

provided -

(A) entirely from appropriations to carry out this section;

(B) in combination with funds available under another Federal

or Federal grant program; or

(C) from any other source.

(2) Priority of funding

To best build the foundations for long-term economic

development and to complement other Federal and State resources

in the region, Federal funds available under this subchapter

shall be focused on the activities in the following order or

priority:

(A) Basic public infrastructure in distressed counties and

isolated areas of distress.

(B) Transportation infrastructure for the purpose of

facilitating economic development in the region.

(C) Business development, with emphasis on entrepreneurship.

(D) Job training or employment-related education, with

emphasis on use of existing public educational institutions

located in the region.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382C, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-274; amended Pub. L. 107-171, title VI, Sec. 6027(c),

May 13, 2002, 116 Stat. 373.)

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(3). Pub. L. 107-171 struck out heading and

text of par. (3). Text read as follows: ''Notwithstanding any

provision of law limiting the Federal share in any grant program,

funds appropriated to carry out this section may be used to

increase a Federal share in a grant program, as the Authority

determines appropriate.''

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009aa-5 of this title.

-CITE-

7 USC Sec. 2009aa-3 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-3. Supplements to Federal grant programs

-STATUTE-

(a) Finding

Congress finds that certain States and local communities of the

region, including local development districts, may be unable to

take maximum advantage of Federal grant programs for which the

States and communities are eligible because -

(1) the States or communities lack the economic resources to

provide the required matching share; or

(2) there are insufficient funds available under the applicable

Federal law authorizing the Federal grant program to meet

pressing needs of the region.

(b) Federal grant program funding

Notwithstanding any provision of law limiting the Federal share,

the areas eligible for assistance, or the authorizations of

appropriations of any Federal grant program, and in accordance with

subsection (c) of this section, the Authority, with the approval of

the Federal cochairperson and with respect to a project to be

carried out in the region -

(1) may increase the Federal share of the costs of a project

under the Federal grant program to not more than 90 percent

(except as provided in section 2009aa-5(b) of this title); and

(2) shall use amounts made available to carry out this

subchapter to pay the increased Federal share.

(c) Certifications

(1) In general

In the case of any project for which all or any portion of the

basic Federal share of the costs of the project is proposed to be

paid under this section, no Federal contribution shall be made

until the Federal official administering the Federal law that

authorizes the Federal grant program certifies that the project -

(A) meets (except as provided in subsection (b) of this

section) the applicable requirements of the applicable Federal

grant program; and

(B) could be approved for Federal contribution under the

Federal grant program if funds were available under the law for

the project.

(2) Certification by authority

(A) In general

The certifications and determinations required to be made by

the Authority for approval of projects under this Act in

accordance with section 2009aa-8 of this title -

(i) shall be controlling; and

(ii) shall be accepted by the Federal agencies.

(B) Acceptance by Federal cochairperson

In the case of any project described in paragraph (1), any

finding, report, certification, or documentation required to be

submitted with respect to the project to the head of the

department, agency, or instrumentality of the Federal

Government responsible for the administration of the Federal

grant program under which the project is carried out shall be

accepted by the Federal cochairperson.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382D, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-275; amended Pub. L. 107-171, title VI, Sec. 6027(d),

May 13, 2002, 116 Stat. 373.)

-REFTEXT-

REFERENCES IN TEXT

This Act, referred to in subsec. (c)(2)(A), refers to the

Agricultural Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat.

294, as amended. For classification of this Act to the Code, see

Short Title note set out under section 1911 of this title and

Tables. However, the reference was probably intended to be ''this

title'' meaning the Consolidated Farm and Rural Development Act,

title III of Pub. L. 87-128, as amended, which is classified

principally to this chapter. For classification of this title to

the Code, see Short Title note set out under section 1921 of this

title and Tables.

-MISC2-

AMENDMENTS

2002 - Pub. L. 107-171 reenacted section catchline without change

and amended text generally to clarify provisions relating to

supplements to Federal grant programs.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009aa-5 of this title.

-CITE-

7 USC Sec. 2009aa-4 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-4. Local development districts; certification and

administrative expenses

-STATUTE-

(a) Definition of local development district

In this section, the term ''local development district'' means an

entity that -

(1) is -

(A) a planning district in existence on December 21, 2000,

that is recognized by the Economic Development Administration

of the Department of Commerce; or

(B) where an entity described in subparagraph (A) does not

exist -

(i) organized and operated in a manner that ensures

broad-based community participation and an effective

opportunity for other nonprofit groups to contribute to the

development and implementation of programs in the region;

(ii) governed by a policy board with at least a simple

majority of members consisting of elected officials or

employees of a general purpose unit of local government who

have been appointed to represent the government;

(iii) certified to the Authority as having a charter or

authority that includes the economic development of counties

or parts of counties or other political subdivisions within

the region -

(I) by the Governor of each State in which the entity is

located; or

(II) by the State officer designated by the appropriate State law

to make the certification; and

(iv)(I) a nonprofit incorporated body organized or

chartered under the law of the State in which the entity is

located;

(II) a nonprofit agency or instrumentality of a State or

local government;

(III) a public organization established before December 21,

2000, under State law for creation of multi-jurisdictional,

area-wide planning organizations; or

(IV) a nonprofit association or combination of bodies,

agencies, and instrumentalities described in subclauses (I)

through (III); and

(2) has not, as certified by the Federal cochairperson -

(A) inappropriately used Federal grant funds from any Federal

source; or

(B) appointed an officer who, during the period in which

another entity inappropriately used Federal grant funds from

any Federal source, was an officer of the other entity.

(b) Grants to local development districts

(1) In general

The Authority shall make grants for administrative expenses

under this section.

(2) Conditions for grants

(A) Maximum amount

The amount of any grant awarded under paragraph (1) shall not

exceed 80 percent of the administrative expenses of the local

development district receiving the grant.

(B) Maximum period

No grant described in paragraph (1) shall be awarded to a

State agency certified as a local development district for a

period greater than 3 years.

(C) Local share

The contributions of a local development district for

administrative expenses may be in cash or in kind, fairly

evaluated, including space, equipment, and services.

(c) Duties of local development districts

A local development district shall -

(1) operate as a lead organization serving multicounty areas in

the region at the local level; and

(2) serve as a liaison between State and local governments,

nonprofit organizations (including community-based groups and

educational institutions), the business community, and citizens

that -

(A) are involved in multijurisdictional planning;

(B) provide technical assistance to local jurisdictions and

potential grantees; and

(C) provide leadership and civic development assistance.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382E, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-276; amended Pub. L. 107-171, title VI, Sec. 6027(e),

May 13, 2002, 116 Stat. 374.)

-MISC1-

AMENDMENTS

2002 - Subsec. (b)(1). Pub. L. 107-171 substituted ''Authority

shall'' for ''Authority may''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009aa-5 of this title.

-CITE-

7 USC Sec. 2009aa-5 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-5. Distressed counties and areas and nondistressed

counties

-STATUTE-

(a) Designations

Not later than 90 days after December 21, 2000, and annually

thereafter, the Authority, in accordance with such criteria as the

Authority may establish, shall designate -

(1) as distressed counties, counties in the region that are the

most severely and persistently distressed and underdeveloped and

have high rates of poverty or unemployment;

(2) as nondistressed counties, counties in the region that are

not designated as distressed counties under paragraph (1); and

(3) as isolated areas of distress, areas located in

nondistressed counties (as designated under paragraph (2)) that

have high rates of poverty or unemployment.

(b) Distressed counties

(1) In general

The Authority shall allocate at least 75 percent of the

appropriations made available under section 2009aa-12 of this

title for programs and projects designed to serve the needs of

distressed counties and isolated areas of distress in the region.

(2) Funding limitations

The funding limitations under section 2009aa-3(b) of this title

shall not apply to a project providing transportation or basic

public services to residents of one or more distressed counties

or isolated areas of distress in the region.

(c) Nondistressed counties

(1) In general

Except as provided in this subsection, no funds shall be

provided under this subchapter for a project located in a county

designated as a nondistressed county under subsection (a)(2) of

this section.

(2) Exceptions

(A) In general

The funding prohibition under paragraph (1) shall not apply

to grants to fund the administrative expenses of local

development districts under section 2009aa-4(b) of this title.

(B) Multicounty projects

The Authority may waive the application of the funding

prohibition under paragraph (1) to -

(i) a multicounty project that includes participation by a

nondistressed county; or

(ii) any other type of project;

if the Authority determines that the project could bring

significant benefits to areas of the region outside a

nondistressed county.

(C) Isolated areas of distress

For a designation of an isolated area of distress for

assistance to be effective, the designation shall be supported

-

(i) by the most recent Federal data available; or

(ii) if no recent Federal data are available, by the most

recent data available through the government of the State in

which the isolated area of distress is located.

(d) Transportation and basic public infrastructure

The Authority shall allocate at least 50 percent of any funds

made available under section 2009aa-12 of this title for

transportation and basic public infrastructure projects authorized

under paragraphs (1) and (3) of section 2009aa-2(a) of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382F, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-277.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009aa-3 of this title.

-CITE-

7 USC Sec. 2009aa-6 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-6. Development planning process

-STATUTE-

(a) State development plan

In accordance with policies established by the Authority, each

State member shall submit a development plan for the area of the

region represented by the State member.

(b) Content of plan

A State development plan submitted under subsection (a) of this

section shall reflect the goals, objectives, and priorities

identified in the regional development plan developed under section

2009aa-1(d)(2) of this title.

(c) Consultation with interested local parties

In carrying out the development planning process (including the

selection of programs and projects for assistance), a State may -

(1) consult with -

(A) local development districts; and

(B) local units of government; and

(2) take into consideration the goals, objectives, priorities,

and recommendations of the entities described in paragraph (1).

(d) Public participation

(1) In general

The Authority and applicable State and local development

districts shall encourage and assist, to the maximum extent

practicable, public participation in the development, revision,

and implementation of all plans and programs under this

subchapter.

(2) Regulations

The Authority shall develop guidelines for providing public

participation described in paragraph (1), including public

hearings.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382G, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-278.)

-CITE-

7 USC Sec. 2009aa-7 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-7. Program development criteria

-STATUTE-

(a) In general

In considering programs and projects to be provided assistance

under this subchapter, and in establishing a priority ranking of

the requests for assistance provided by the Authority, the

Authority shall follow procedures that ensure, to the maximum

extent practicable, consideration of -

(1) the relationship of the project or class of projects to

overall regional development;

(2) the per capita income and poverty and unemployment rates in

an area;

(3) the financial resources available to the applicants for

assistance seeking to carry out the project, with emphasis on

ensuring that projects are adequately financed to maximize the

probability of successful economic development;

(4) the importance of the project or class of projects in

relation to other projects or classes of projects that may be in

competition for the same funds;

(5) the prospects that the project for which assistance is

sought will improve, on a continuing rather than a temporary

basis, the opportunities for employment, the average level of

income, or the economic development of the area served by the

project; and

(6) the extent to which the project design provides for

detailed outcome measurements by which grant expenditures and the

results of the expenditures may be evaluated.

(b) No relocation assistance

No financial assistance authorized by this subchapter shall be

used to assist a person or entity in relocating from one area to

another, except that financial assistance may be used as otherwise

authorized by this chapter to attract businesses from outside the

region to the region.

(c) Reduction of funds

Funds may be provided for a program or project in a State under

this subchapter only if the Authority determines that the level of

Federal or State financial assistance provided under a law other

than this subchapter, for the same type of program or project in

the same area of the State within the region, will not be reduced

as a result of funds made available by this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382H, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-279.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec. (b),

see note set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009aa-8 of this title.

-CITE-

7 USC Sec. 2009aa-8 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-8. Approval of development plans and projects

-STATUTE-

(a) In general

A State or regional development plan or any multistate

subregional plan that is proposed for development under this

subchapter shall be reviewed and approved by the Authority.

(b) Evaluation by State member

An application for a grant or any other assistance for a project

under this subchapter shall be made through and evaluated for

approval by the State member of the Authority representing the

applicant.

(c) Certification

An application for a grant or other assistance for a project

shall be approved only on certification by the State member that

the application for the project -

(1) describes ways in which the project complies with any

applicable State development plan;

(2) meets applicable criteria under section 2009aa-7 of this

title;

(3) provides adequate assurance that the proposed project will

be properly administered, operated, and maintained; and

(4) otherwise meets the requirements of this subchapter.

(d) Approval of grant applications

On certification by a State member of the Authority of an

application for a grant or other assistance for a specific project

under this section, an affirmative vote of the Authority under

section 2009aa-1(c) of this title shall be required for approval of

the application.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382I, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-279; amended Pub. L. 107-171, title VI, Sec. 6027(f),

May 13, 2002, 116 Stat. 374.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171, Sec. 6027(f)(1), inserted

''and approved'' after ''reviewed''.

Subsec. (d). Pub. L. 107-171, Sec. 6027(f)(2), substituted

''Approval of grant applications'' for ''Votes for decisions'' in

heading.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009aa-1 to 2009aa-3 of

this title.

-CITE-

7 USC Sec. 2009aa-9 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-9. Consent of States

-STATUTE-

Nothing in this subchapter requires any State to engage in or

accept any program under this subchapter without the consent of the

State.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382J, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-280.)

-CITE-

7 USC Sec. 2009aa-10 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-10. Records

-STATUTE-

(a) Records of the Authority

(1) In general

The Authority shall maintain accurate and complete records of

all transactions and activities of the Authority.

(2) Availability

All records of the Authority shall be available for audit and

examination by the Comptroller General of the United States and

the Inspector General of the Department of Agriculture (including

authorized representatives of the Comptroller General and the

Inspector General of the Department of Agriculture).

(b) Records of recipients of Federal assistance

(1) In general

A recipient of Federal funds under this subchapter shall, as

required by the Authority, maintain accurate and complete records

of transactions and activities financed with Federal funds and

report on the transactions and activities to the Authority.

(2) Availability

All records required under paragraph (1) shall be available for

audit by the Comptroller General of the United States, the

Inspector General of the Department of Agriculture, and the

Authority (including authorized representatives of the

Comptroller General, the Inspector General of the Department of

Agriculture, and the Authority).

(c) Annual audit

The Inspector General of the Department of Agriculture shall

audit the activities, transactions, and records of the Authority on

an annual basis.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382K, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-280.)

-CITE-

7 USC Sec. 2009aa-11 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-11. Annual report

-STATUTE-

Not later than 180 days after the end of each fiscal year, the

Authority shall submit to the President and to Congress a report

describing the activities carried out under this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382L, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-280.)

-CITE-

7 USC Sec. 2009aa-12 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-12. Authorization of appropriations

-STATUTE-

(a) In general

There is authorized to be appropriated to the Authority to carry

out this subchapter $30,000,000 for each of fiscal years 2001

through 2007, to remain available until expended.

(b) Administrative expenses

Not more than 5 percent of the amount appropriated under

subsection (a) of this section for a fiscal year shall be used for

administrative expenses of the Authority.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382M, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-280; amended Pub. L. 107-171, title VI, Sec. 6027(g),

May 13, 2002, 116 Stat. 374.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a). Pub. L. 107-171 substituted ''2007'' for

''2002''.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009aa-5 of this title.

-CITE-

7 USC Sec. 2009aa-13 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VI - DELTA REGIONAL AUTHORITY

-HEAD-

Sec. 2009aa-13. Termination of authority

-STATUTE-

This subchapter and the authority provided under this subchapter

expire on October 1, 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 382N, as added Pub. L. 106-554,

Sec. 1(a)(4) (div. B, title V, Sec. 503), Dec. 21, 2000, 114 Stat.

2763, 2763A-281; amended Pub. L. 107-171, title VI, Sec. 6027(h),

May 13, 2002, 116 Stat. 374.)

-MISC1-

AMENDMENTS

2002 - Pub. L. 107-171 substituted ''2007'' for ''2002''.

-CITE-

7 USC SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL

AUTHORITY 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

.

-HEAD-

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-CITE-

7 USC Sec. 2009bb 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb. Definitions

-STATUTE-

In this subchapter:

(1) Authority

The term ''Authority'' means the Northern Great Plains Regional

Authority established by section 2009bb-1 of this title.

(2) Federal grant program

The term ''Federal grant program'' means a Federal grant

program to provide assistance in -

(A) implementing the recommendations of the Northern Great

Plains Rural Development Commission established by the Northern

Great Plains Rural Development Act (7 U.S.C. 2661 note; Public

Law 103-318);

(B) acquiring or developing land;

(C) constructing or equipping a highway, road, bridge, or

facility;

(D) carrying out other economic development activities; or

(E) conducting research activities related to the activities

described in subparagraphs (A) through (D).

(3) Indian tribe

The term ''Indian tribe'' has the meaning given the term in

section 450b of title 25.

(4) Region

The term ''region'' means the States of Iowa, Minnesota,

Nebraska, North Dakota, and South Dakota.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383A, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 375.)

-CITE-

7 USC Sec. 2009bb-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-1. Northern Great Plains Regional Authority

-STATUTE-

(a) Establishment

(1) In general

There is established the Northern Great Plains Regional

Authority.

(2) Composition

The Authority shall be composed of -

(A) a Federal member, to be appointed by the President, by

and with the advice and consent of the Senate;

(B) the Governor (or a designee of the Governor) of each

State in the region that elects to participate in the

Authority; and

(C) a member of an Indian tribe, who shall be a chairperson

of an Indian tribe in the region or a designee of such a

chairperson, to be appointed by the President, by and with the

advice and consent of the Senate.

(3) Cochairpersons

The Authority shall be headed by -

(A) the Federal member, who shall serve -

(i) as the Federal cochairperson; and

(ii) as a liaison between the Federal Government and the

Authority;

(B) a State cochairperson, who -

(i) shall be a Governor of a participating State in the

region; and

(ii) shall be elected by the State members for a term of

not less than 1 year; and

(C) the member of an Indian tribe, who shall serve -

(i) as the tribal cochairperson; and

(ii) as a liaison between the governments of Indian tribes

in the region and the Authority.

(b) Alternate members

(1) Alternate Federal cochairperson

The President shall appoint an alternate Federal cochairperson.

(2) State alternates

(A) In general

The State member of a participating State may have a single

alternate, who shall be -

(i) a resident of that State; and

(ii) appointed by the Governor of the State.

(B) Quorum

A State alternate member shall not be counted toward the

establishment of a quorum of the members of the Authority in

any case in which a quorum of the State members is required to

be present.

(3) Alternate tribal cochairperson

The President shall appoint an alternate tribal cochairperson,

by and with the advice and consent of the Senate.

(4) Delegation of power

No power or responsibility of the Authority specified in

paragraphs (2) and (3) of subsection (c) of this section, and no

voting right of any member of the Authority, shall be delegated

to any person who is not -

(A) a member of the Authority; or

(B) entitled to vote in Authority meetings.

(c) Voting

(1) In general

A decision by the Authority shall require a majority vote of

the Authority (not including any member representing a State that

is delinquent under subsection (g)(2)(D) of this section) to be

effective.

(2) Quorum

A quorum of State members shall be required to be present for

the Authority to make any policy decision, including -

(A) a modification or revision of an Authority policy

decision;

(B) approval of a State or regional development plan; and

(C) any allocation of funds among the States.

(3) Project and grant proposals

The approval of project and grant proposals shall be -

(A) a responsibility of the Authority; and

(B) conducted in accordance with section 2009bb-8 of this

title.

(4) Voting by alternate members

An alternate member shall vote in the case of the absence,

death, disability, removal, or resignation of the Federal, State,

or Indian tribe member for whom the alternate member is an

alternate.

(d) Duties

The Authority shall -

(1) develop, on a continuing basis, comprehensive and

coordinated plans and programs to establish priorities and

approve grants for the economic development of the region, giving

due consideration to other Federal, State, tribal, and local

planning and development activities in the region;

(2) not later than 220 days after May 13, 2002, establish

priorities in a development plan for the region (including 5-year

regional outcome targets);

(3) assess the needs and assets of the region based on

available research, demonstrations, investigations, assessments,

and evaluations of the region prepared by Federal, State, tribal,

and local agencies, universities, local development districts,

and other nonprofit groups;

(4) formulate and recommend to the Governors and legislatures

of States that participate in the Authority forms of interstate

cooperation;

(5) work with State, tribal, and local agencies in developing

appropriate model legislation;

(6)(A) enhance the capacity of, and provide support for, local

development districts in the region; or

(B) if no local development district exists in an area in a

participating State in the region, foster the creation of a local

development district;

(7) encourage private investment in industrial, commercial, and

other economic development projects in the region; and

(8) cooperate with and assist State governments with economic

development programs of participating States.

(e) Administration

In carrying out subsection (d) of this section, the Authority may

-

(1) hold such hearings, sit and act at such times and places,

take such testimony, receive such evidence, and print or

otherwise reproduce and distribute a description of the

proceedings and reports on actions by the Authority as the

Authority considers appropriate;

(2) authorize, through the Federal, State, or tribal

cochairperson or any other member of the Authority designated by

the Authority, the administration of oaths if the Authority

determines that testimony should be taken or evidence received

under oath;

(3) request from any Federal, State, tribal, or local agency

such information as may be available to or procurable by the

agency that may be of use to the Authority in carrying out the

duties of the Authority;

(4) adopt, amend, and repeal bylaws and rules governing the

conduct of business and the performance of duties of the

Authority;

(5) request the head of any Federal agency to detail to the

Authority such personnel as the Authority requires to carry out

duties of the Authority, each such detail to be without loss of

seniority, pay, or other employee status;

(6) request the head of any State agency, tribal government, or

local government to detail to the Authority such personnel as the

Authority requires to carry out duties of the Authority, each

such detail to be without loss of seniority, pay, or other

employee status;

(7) provide for coverage of Authority employees in a suitable

retirement and employee benefit system by -

(A) making arrangements or entering into contracts with any

participating State government or tribal government; or

(B) otherwise providing retirement and other employee benefit

coverage;

(8) accept, use, and dispose of gifts or donations of services

or real, personal, tangible, or intangible property;

(9) enter into and perform such contracts, leases, cooperative

agreements, or other transactions as are necessary to carry out

Authority duties, including any contracts, leases, or cooperative

agreements with -

(A) any department, agency, or instrumentality of the United

States;

(B) any State (including a political subdivision, agency, or

instrumentality of the State);

(C) any Indian tribe in the region; or

(D) any person, firm, association, or corporation; and

(10) establish and maintain a central office and field offices

at such locations as the Authority may select.

(f) Federal agency cooperation

A Federal agency shall -

(1) cooperate with the Authority; and

(2) provide, on request of the Federal cochairperson,

appropriate assistance in carrying out this subchapter, in

accordance with applicable Federal laws (including regulations).

(g) Administrative expenses

(1) Federal share

The Federal share of the administrative expenses of the

Authority shall be -

(A) for fiscal year 2002, 100 percent;

(B) for fiscal year 2003, 75 percent; and

(C) for fiscal year 2004 and each fiscal year thereafter, 50

percent.

(2) Non-Federal share

(A) In general

The non-Federal share of the administrative expenses of the

Authority shall be paid by non-Federal sources in the States

that participate in the Authority.

(B) Share paid by each State

The share of administrative expenses of the Authority to be

paid by non-Federal sources in each State shall be determined

by the Authority.

(C) No Federal participation

The Federal cochairperson shall not participate or vote in

any decision under subparagraph (B).

(D) Delinquent States

If a State is delinquent in payment of the State's share of

administrative expenses of the Authority under this subsection

-

(i) no assistance under this subchapter shall be provided

to the State (including assistance to a political subdivision

or a resident of the State); and

(ii) no member of the Authority from the State shall

participate or vote in any action by the Authority.

(h) Compensation

(1) Federal and tribal cochairpersons

The Federal cochairperson and the tribal cochairperson shall be

compensated by the Federal Government at the annual rate of basic

pay prescribed for level III of the Executive Schedule in

subchapter II of chapter 53 of title 5.

(2) Alternate Federal and tribal cochairpersons

The alternate Federal cochairperson and the alternate tribal

cochairperson -

(A) shall be compensated by the Federal Government at the

annual rate of basic pay prescribed for level V of the

Executive Schedule described in paragraph (1); and

(B) when not actively serving as an alternate, shall perform

such functions and duties as are delegated by the Federal

cochairperson or the tribal cochairperson, respectively.

(3) State members and alternates

(A) In general

A State shall compensate each member and alternate

representing the State on the Authority at the rate established

by State law.

(B) No additional compensation

No State member or alternate member shall receive any salary,

or any contribution to or supplementation of salary from any

source other than the State for services provided by the member

or alternate member to the Authority.

(4) Detailed employees

(A) In general

No person detailed to serve the Authority under subsection

(e)(6) of this section shall receive any salary or any

contribution to or supplementation of salary for services

provided to the Authority from -

(i) any source other than the State, tribal, local, or

intergovernmental agency from which the person was detailed;

or

(ii) the Authority.

(B) Violation

Any person that violates this paragraph shall be fined not

more than $5,000, imprisoned not more than 1 year, or both.

(C) Applicable law

The Federal cochairperson, the alternate Federal

cochairperson, and any Federal officer or employee detailed to

duty on the Authority under subsection (e)(5) of this section

shall not be subject to subparagraph (A), but shall remain

subject to sections 202 through 209 of title 18.

(5) Additional personnel

(A) Compensation

(i) In general

The Authority may appoint and fix the compensation of an

executive director and such other personnel as are necessary

to enable the Authority to carry out the duties of the

Authority.

(ii) Exception

Compensation under clause (i) shall not exceed the maximum

rate for the Senior Executive Service under section 5382 of

title 5, including any applicable locality-based

comparability payment that may be authorized under section

5304(h)(2)(C) of that title.

(B) Executive director

The executive director shall be responsible for -

(i) the carrying out of the administrative duties of the

Authority;

(ii) direction of the Authority staff; and

(iii) such other duties as the Authority may assign.

(C) No Federal employee status

No member, alternate, officer, or employee of the Authority

(except the Federal cochairperson of the Authority, the

alternate and staff for the Federal cochairperson, and any

Federal employee detailed to the Authority under subsection

(e)(5) of this section) shall be considered to be a Federal

employee for any purpose.

(i) Conflicts of interest

(1) In general

Except as provided under paragraph (2), no State member, Indian

tribe member, State alternate, officer, or employee of the

Authority shall participate personally and substantially as a

member, alternate, officer, or employee of the Authority, through

decision, approval, disapproval, recommendation, the rendering of

advice, investigation, or otherwise, in any proceeding,

application, request for a ruling or other determination,

contract, claim, controversy, or other matter in which, to

knowledge of the member, alternate, officer, or employee -

(A) the member, alternate, officer, or employee;

(B) the spouse, minor child, partner, or organization (other

than a State or political subdivision of the State or the

Indian tribe) of the member, alternate, officer, or employee,

in which the member, alternate, officer, or employee is serving

as officer, director, trustee, partner, or employee; or

(C) any person or organization with whom the member,

alternate, officer, or employee is negotiating or has any

arrangement concerning prospective employment;

has a financial interest.

(2) Disclosure

Paragraph (1) shall not apply if the State member, Indian tribe

member, alternate, officer, or employee -

(A) immediately advises the Authority of the nature and

circumstances of the proceeding, application, request for a

ruling or other determination, contract, claim, controversy, or

other particular matter presenting a potential conflict of

interest;

(B) makes full disclosure of the financial interest; and

(C) before the proceeding concerning the matter presenting

the conflict of interest, receives a written determination by

the Authority that the interest is not so substantial as to be

likely to affect the integrity of the services that the

Authority may expect from the State member, Indian tribe

member, alternate, officer, or employee.

(3) Violation

Any person that violates this subsection shall be fined not

more than $10,000, imprisoned not more than 2 years, or both.

(j) Validity of contracts, loans, and grants

The Authority may declare void any contract, loan, or grant of or

by the Authority in relation to which the Authority determines that

there has been a violation of any provision under subsection (h)(4)

or subsection (i) of this subtitle (FOOTNOTE 1) , or sections 202

through 209 of title 18.

(FOOTNOTE 1) So in original. Probably should be ''section''.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383B, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 375.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009bb, 2009bb-6,

2009bb-8 of this title.

-CITE-

7 USC Sec. 2009bb-2 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-2. Economic and community development grants

-STATUTE-

(a) In general

The Authority may approve grants to States, Indian tribes, local

governments, and public and nonprofit organizations for projects,

approved in accordance with section 2009bb-8 of this title -

(1) to develop the transportation and telecommunication

infrastructure of the region for the purpose of facilitating

economic development in the region (except that grants for this

purpose may be made only to States, Indian tribes, local

governments, and nonprofit organizations);

(2) to assist the region in obtaining the job training,

employment-related education, and business development (with an

emphasis on entrepreneurship) that are needed to build and

maintain strong local economies;

(3) to provide assistance to severely distressed and

underdeveloped areas that lack financial resources for improving

basic public services;

(4) to provide assistance to severely distressed and

underdeveloped areas that lack financial resources for equipping

industrial parks and related facilities; and

(5) to otherwise achieve the purposes of this subchapter.

(b) Funding

(1) In general

Funds for grants under subsection (a) of this section may be

provided -

(A) entirely from appropriations to carry out this section;

(B) in combination with funds available under another Federal

grant program; or

(C) from any other source.

(2) Priority of funding

To best build the foundations for long-term economic

development and to complement other Federal, State, and tribal

resources in the region, Federal funds available under this

subchapter shall be focused on the activities in the following

order or priority:

(A) Basic public infrastructure in distressed counties and

isolated areas of distress.

(B) Transportation and telecommunication infrastructure for

the purpose of facilitating economic development in the region.

(C) Business development, with emphasis on entrepreneurship.

(D) Job training or employment-related education, with

emphasis on use of existing public educational institutions

located in the region.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383C, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 380.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009bb-5 of this title.

-CITE-

7 USC Sec. 2009bb-3 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-3. Supplements to Federal grant programs

-STATUTE-

(a) Finding

Congress finds that certain States and local communities of the

region, including local development districts, may be unable to

take maximum advantage of Federal grant programs for which the

States and communities are eligible because -

(1) they lack the economic resources to provide the required

matching share; or

(2) there are insufficient funds available under the applicable

Federal law authorizing the Federal grant program to meet

pressing needs of the region.

(b) Federal grant program funding

Notwithstanding any provision of law limiting the Federal share,

the areas eligible for assistance, or the authorizations of

appropriations, under any Federal grant program, and in accordance

with subsection (c) of this section, the Authority, with the

approval of the Federal cochairperson and with respect to a project

to be carried out in the region -

(1) may increase the Federal share of the costs of a project

under any Federal grant program to not more than 90 percent

(except as provided in section 2009bb-5(b) of this title); and

(2) shall use amounts made available to carry out this

subchapter to pay the increased Federal share.

(c) Certifications

(1) In general

In the case of any project for which all or any portion of the

basic Federal share of the costs of the project is proposed to be

paid under this section, no Federal contribution shall be made

until the Federal official administering the Federal law that

authorizes the Federal grant program certifies that the project -

(A) meets (except as provided in subsection (b) of this

section) the applicable requirements of the applicable Federal

grant program; and

(B) could be approved for Federal contribution under the

Federal grant program if funds were available under the law for

the project.

(2) Certification by Authority

(A) In general

The certifications and determinations required to be made by

the Authority for approval of projects under this Act in

accordance with section 2009bb-8 of this title -

(i) shall be controlling; and

(ii) shall be accepted by the Federal agencies.

(B) Acceptance by Federal cochairperson

In the case of any project described in paragraph (1), any

finding, report, certification, or documentation required to be

submitted with respect to the project to the head of the

department, agency, or instrumentality of the Federal

Government responsible for the administration of the Federal

grant program under which the project is carried out shall be

accepted by the Federal cochairperson.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383D, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 381.)

-REFTEXT-

REFERENCES IN TEXT

This Act, referred to in subsec. (c)(2)(A), refers to the

Agricultural Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat.

294, as amended. For classification of this Act to the Code, see

Short Title note set out under section 1911 of this title and

Tables. However, the reference was probably intended to be ''this

title'' meaning the Consolidated Farm and Rural Development Act,

title III of Pub. L. 87-128, as amended, which is classified

principally to this chapter. For classification of this title to

the Code, see Short Title note set out under section 1921 of this

title and Tables.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009bb-5 of this title.

-CITE-

7 USC Sec. 2009bb-4 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-4. Local development districts and organizations and

Northern Great Plains Inc.

-STATUTE-

(a) Definition of local development district

In this section, the term ''local development district'' means an

entity -

(1) that -

(A) is a planning district in existence on May 13, 2002, that

is recognized by the Economic Development Administration of the

Department of Commerce; or

(B) is -

(i) organized and operated in a manner that ensures

broad-based community participation and an effective

opportunity for other nonprofit groups to contribute to the

development and implementation of programs in the region;

(ii) governed by a policy board with at least a simple

majority of members consisting of -

(I) elected officials or employees of a general purpose

unit of local government who have been appointed to

represent the government; or

(II) individuals appointed by the general purpose unit of

local government to represent the government;

(iii) certified to the Authority as having a charter or

authority that includes the economic development of counties

or parts of counties or other political subdivisions within

the region -

(I) by the Governor of each State in which the entity is

located; or

(II) by the State officer designated by the appropriate

State law to make the certification; and

(iv)(I) a nonprofit incorporated body organized or

chartered under the law of the State in which the entity is

located;

(II) a nonprofit agency or instrumentality of a State or

local government;

(III) a public organization established before May 13,

2002, under State law for creation of multi-jurisdictional,

area-wide planning organizations; or

(IV) a nonprofit association or combination of bodies,

agencies, and instrumentalities described in subclauses (I)

through (III); and

(2) that has not, as certified by the Federal cochairperson -

(A) inappropriately used Federal grant funds from any Federal

source; or

(B) appointed an officer who, during the period in which

another entity inappropriately used Federal grant funds from

any Federal source, was an officer of the other entity.

(b) Grants to local development districts

(1) In general

The Authority may make grants for administrative expenses under

this section.

(2) Conditions for grants

(A) Maximum amount

The amount of any grant awarded under paragraph (1) shall not

exceed 80 percent of the administrative expenses of the local

development district receiving the grant.

(B) Maximum period

No grant described in paragraph (1) shall be awarded to a

State agency certified as a local development district for a

period greater than 3 years.

(C) Local share

The contributions of a local development district for

administrative expenses may be in cash or in kind, fairly

evaluated, including space, equipment, and services.

(c) Duties of local development districts

A local development district shall -

(1) operate as a lead organization serving multicounty areas in

the region at the local level; and

(2) serve as a liaison between State, tribal, and local

governments, nonprofit organizations (including community-based

groups and educational institutions), the business community, and

citizens that -

(A) are involved in multijurisdictional planning;

(B) provide technical assistance to local jurisdictions and

potential grantees; and

(C) provide leadership and civic development assistance.

(d) Northern Great Plains Inc.

Northern Great Plains Inc., a nonprofit corporation incorporated

in the State of Minnesota to implement the recommendations of the

Northern Great Plains Rural Development Commission established by

the Northern Great Plains Rural Development Act (7 U.S.C. 2661

note; Public Law 103-318) -

(1) shall serve as an independent, primary resource for the

Authority on issues of concern to the region;

(2) shall advise the Authority on development of international

trade;

(3) may provide research, education, training, and other

support to the Authority; and

(4) may carry out other activities on its own behalf or on

behalf of other entities.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383E, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 382.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009bb-5 of this title.

-CITE-

7 USC Sec. 2009bb-5 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-5. Distressed counties and areas and nondistressed

counties

-STATUTE-

(a) Designations

Not later than 90 days after May 13, 2002, and annually

thereafter, the Authority, in accordance with such criteria as the

Authority may establish, shall designate -

(1) as distressed counties, counties in the region that are the

most severely and persistently distressed and underdeveloped and

have high rates of poverty, unemployment, or outmigration;

(2) as nondistressed counties, counties in the region that are

not designated as distressed counties under paragraph (1); and

(3) as isolated areas of distress, areas located in

nondistressed counties (as designated under paragraph (2)) that

have high rates of poverty, unemployment, or outmigration.

(b) Distressed counties

(1) In general

The Authority shall allocate at least 75 percent of the

appropriations made available under section 2009bb-12 of this

title for programs and projects designed to serve the needs of

distressed counties and isolated areas of distress in the region.

(2) Funding limitations

The funding limitations under section 2009bb-3(b) of this title

shall not apply to a project to provide transportation or

telecommunication or basic public services to residents of 1 or

more distressed counties or isolated areas of distress in the

region.

(c) Nondistressed counties

(1) In general

Except as provided in paragraph (2), no funds shall be provided

under this subchapter for a project located in a county

designated as a nondistressed county under subsection (a)(2) of

this section.

(2) Exceptions

(A) In general

The funding prohibition under paragraph (1) shall not apply

to grants to fund the administrative expenses of local

development districts under section 2009bb-4(b) of this title.

(B) Multicounty projects

The Authority may waive the application of the funding

prohibition under paragraph (1) to -

(i) a multicounty project that includes participation by a

nondistressed county; or

(ii) any other type of project;

if the Authority determines that the project could bring

significant benefits to areas of the region outside a

nondistressed county.

(C) Isolated areas of distress

For a designation of an isolated area of distress for

assistance to be effective, the designation shall be supported

-

(i) by the most recent Federal data available; or

(ii) if no recent Federal data are available, by the most

recent data available through the government of the State in

which the isolated area of distress is located.

(d) Transportation, telecommunication, and basic public

infrastructure

The Authority shall allocate at least 50 percent of any funds

made available under section 2009bb-12 of this title for

transportation, telecommunication, and basic public infrastructure

projects authorized under paragraphs (1) and (3) of section

2009bb-2(a) of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383F, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 384.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009bb-3 of this title.

-CITE-

7 USC Sec. 2009bb-6 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-6. Development planning process

-STATUTE-

(a) State development plan

In accordance with policies established by the Authority, each

State member shall submit a development plan for the area of the

region represented by the State member.

(b) Content of plan

A State development plan submitted under subsection (a) of this

section shall reflect the goals, objectives, and priorities

identified in the regional development plan developed under section

2009bb-1(d)(2) of this title.

(c) Consultation with interested local parties

In carrying out the development planning process (including the

selection of programs and projects for assistance), a State may -

(1) consult with -

(A) local development districts; and

(B) local units of government; and

(2) take into consideration the goals, objectives, priorities,

and recommendations of the entities described in paragraph (1).

(d) Public participation

(1) In general

The Authority and applicable State and local development

districts shall encourage and assist, to the maximum extent

practicable, public participation in the development, revision,

and implementation of all plans and programs under this

subchapter.

(2) Regulations

The Authority shall develop guidelines for providing public

participation described in paragraph (1), including public

hearings.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383G, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 385.)

-CITE-

7 USC Sec. 2009bb-7 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-7. Program development criteria

-STATUTE-

(a) In general

In considering programs and projects to be provided assistance

under this subchapter, and in establishing a priority ranking of

the requests for assistance provided to the Authority, the

Authority shall follow procedures that ensure, to the maximum

extent practicable, consideration of -

(1) the relationship of the project or class of projects to

overall regional development;

(2) the per capita income and poverty and unemployment and

outmigration rates in an area;

(3) the financial resources available to the applicants for

assistance seeking to carry out the project, with emphasis on

ensuring that projects are adequately financed to maximize the

probability of successful economic development;

(4) the importance of the project or class of projects in

relation to other projects or classes of projects that may be in

competition for the same funds;

(5) the prospects that the project for which assistance is

sought will improve, on a continuing rather than a temporary

basis, the opportunities for employment, the average level of

income, or the economic development of the area to be served by

the project; and

(6) the extent to which the project design provides for

detailed outcome measurements by which grant expenditures and the

results of the expenditures may be evaluated.

(b) No relocation assistance

No financial assistance authorized by this subchapter shall be

used to assist a person or entity in relocating from one area to

another, except that financial assistance may be used as otherwise

authorized by this chapter to attract businesses from outside the

region to the region.

(c) Maintenance of effort

Funds may be provided for a program or project in a State under

this subchapter only if the Authority determines that the level of

Federal or State financial assistance provided under a law other

than this subchapter, for the same type of program or project in

the same area of the State within the region, will not be reduced

as a result of funds made available by this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383H, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 385.)

-REFTEXT-

REFERENCES IN TEXT

For definition of ''this chapter'', referred to in subsec. (b),

see note set out under section 1921 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009bb-8 of this title.

-CITE-

7 USC Sec. 2009bb-8 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-8. Approval of development plans and projects

-STATUTE-

(a) In general

A State or regional development plan or any multistate

subregional plan that is proposed for development under this

subchapter shall be reviewed by the Authority.

(b) Evaluation by State member

An application for a grant or any other assistance for a project

under this subchapter shall be made through and evaluated for

approval by the State member of the Authority representing the

applicant.

(c) Certification

An application for a grant or other assistance for a project

shall be approved only on certification by the State member that

the application for the project -

(1) describes ways in which the project complies with any

applicable State development plan;

(2) meets applicable criteria under section 2009bb-7 of this

title;

(3) provides adequate assurance that the proposed project will

be properly administered, operated, and maintained; and

(4) otherwise meets the requirements of this subchapter.

(d) Votes for decisions

On certification by a State member of the Authority of an

application for a grant or other assistance for a specific project

under this section, an affirmative vote of the Authority under

section 2009bb-1(c) of this title shall be required for approval of

the application.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383I, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 386.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009bb-1, 2009bb-2,

2009bb-3 of this title.

-CITE-

7 USC Sec. 2009bb-9 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-9. Consent of States

-STATUTE-

Nothing in this subchapter requires any State to engage in or

accept any program under this subchapter without the consent of the

State.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383J, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 386.)

-CITE-

7 USC Sec. 2009bb-10 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-10. Records

-STATUTE-

(a) Records of the Authority

(1) In general

The Authority shall maintain accurate and complete records of

all transactions and activities of the Authority.

(2) Availability

All records of the Authority shall be available for audit and

examination by the Comptroller General of the United States and

the Inspector General of the Department of Agriculture (including

authorized representatives of the Comptroller General and the

Inspector General of the Department of Agriculture).

(b) Records of recipients of Federal assistance

(1) In general

A recipient of Federal funds under this subchapter shall, as

required by the Authority, maintain accurate and complete records

of transactions and activities financed with Federal funds and

report to the Authority on the transactions and activities to the

Authority.

(2) Availability

All records required under paragraph (1) shall be available for

audit by the Comptroller General of the United States, the

Inspector General of the Department of Agriculture, and the

Authority (including authorized representatives of the

Comptroller General, the Inspector General of the Department of

Agriculture, and the Authority).

(c) Annual audit

The Inspector General of the Department of Agriculture shall

audit the activities, transactions, and records of the Authority on

an annual basis.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383K, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 386.)

-CITE-

7 USC Sec. 2009bb-11 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-11. Annual report

-STATUTE-

Not later than 180 days after the end of each fiscal year, the

Authority shall submit to the President and to Congress a report

describing the activities carried out under this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383L, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 387.)

-CITE-

7 USC Sec. 2009bb-12 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-12. Authorization of appropriations

-STATUTE-

(a) In general

There is authorized to be appropriated to the Authority to carry

out this subchapter $30,000,000 for each of fiscal years 2002

through 2007, to remain available until expended.

(b) Administrative expenses

Not more than 5 percent of the amount appropriated under

subsection (a) of this section for a fiscal year shall be used for

administrative expenses of the Authority.

(c) Minimum State share of grants

Notwithstanding any other provision of this subchapter, for any

fiscal year, the aggregate amount of grants received by a State and

all persons or entities in the State under this subchapter shall be

not less than 1/3 of the product obtained by multiplying -

(1) the aggregate amount of grants under this subchapter for

the fiscal year; and

(2) the ratio that -

(A) the population of the State (as determined by the

Secretary of Commerce based on the most recent decennial census

for which data are available); bears to

(B) the population of the region (as so determined).

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383M, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 387.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009bb-5 of this title.

-CITE-

7 USC Sec. 2009bb-13 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VII - NORTHERN GREAT PLAINS REGIONAL AUTHORITY

-HEAD-

Sec. 2009bb-13. Termination of authority

-STATUTE-

The authority provided by this subchapter terminates effective

October 1, 2007.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 383N, as added Pub. L. 107-171,

title VI, Sec. 6028, May 13, 2002, 116 Stat. 387.)

-CITE-

7 USC SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT

PROGRAM 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

.

-HEAD-

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 1991 of this title.

-CITE-

7 USC Sec. 2009cc 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc. Definitions

-STATUTE-

In this subchapter:

(1) Articles

The term ''articles'' means articles of incorporation for an

incorporated body or the functional equivalent or other similar

documents specified by the Secretary for other business entities.

(2) Developmental venture capital

The term ''developmental venture capital'' means capital in the

form of equity capital investments in rural business investment

companies with an objective of fostering economic development in

rural areas.

(3) Employee welfare benefit plan; pension plan

(A) In general

The terms ''employee welfare benefit plan'' and ''pension

plan'' have the meanings given the terms in section 1002 of

title 29.

(B) Inclusions

The terms ''employee welfare benefit plan'' and ''pension

plan'' include -

(i) public and private pension or retirement plans subject

to this subchapter; and

(ii) similar plans not covered by this subchapter that have

been established, and that are maintained, by the Federal

Government or any State (including by a political

subdivision, agency, or instrumentality of the Federal

Government or a State) for the benefit of employees.

(4) Equity capital

The term ''equity capital'' means common or preferred stock or

a similar instrument, including subordinated debt with equity

features.

(5) Leverage

The term ''leverage'' includes -

(A) debentures purchased or guaranteed by the Secretary;

(B) participating securities purchased or guaranteed by the

Secretary; and

(C) preferred securities outstanding as of May 13, 2002.

(6) License

The term ''license'' means a license issued by the Secretary as

provided in section 2009cc-3(e) of this title.

(7) Limited liability company

The term ''limited liability company'' means a business entity

that is organized and operating in accordance with a State

limited liability company law approved by the Secretary.

(8) Member

The term ''member'' means, with respect to a rural business

investment company that is a limited liability company, a holder

of an ownership interest or a person otherwise admitted to

membership in the limited liability company.

(9) Operational assistance

The term ''operational assistance'' means management,

marketing, and other technical assistance that assists a rural

business concern with business development.

(10) Participation agreement

The term ''participation agreement'' means an agreement,

between the Secretary and a rural business investment company

granted final approval under section 2009cc-3(e) of this title,

that requires the rural business investment company to make

investments in smaller enterprises in rural areas.

(11) Private capital

(A) In general

The term ''private capital'' means the total of -

(i)(I) the paid-in capital and paid-in surplus of a

corporate rural business investment company;

(II) the contributed capital of the partners of a

partnership rural business investment company; or

(III) the equity investment of the members of a limited

liability company rural business investment company; and

(ii) unfunded binding commitments from investors that meet

criteria established by the Secretary to contribute capital

to the rural business investment company, except that -

(I) unfunded commitments may be counted as private

capital for purposes of approval by the Secretary of any

request for leverage; but

(II) leverage shall not be funded based on the

commitments.

(B) Exclusions

The term ''private capital'' does not include -

(i) any funds borrowed by a rural business investment

company from any source;

(ii) any funds obtained through the issuance of leverage;

or

(iii) any funds obtained directly or indirectly from the

Federal Government or any State (including by a political

subdivision, agency, or instrumentality of the Federal

Government or a State), except for -

(I) funds obtained from the business revenues (excluding

any governmental appropriation) of any federally chartered

or government-sponsored enterprise established prior to May

13, 2002;

(II) funds invested by an employee welfare benefit plan

or pension plan; and

(III) any qualified nonprivate funds (if the investors of

the qualified nonprivate funds do not control, directly or

indirectly, the management, board of directors, general

partners, or members of the rural business investment

company).

(12) Qualified nonprivate funds

The term ''qualified nonprivate funds'' means any -

(A) funds directly or indirectly invested in any applicant or

rural business investment company on or before May 13, 2002, by

any Federal agency, other than the Department of Agriculture,

under a provision of law explicitly mandating the inclusion of

those funds in the definition of the term ''private capital'';

and

(B) funds invested in any applicant or rural business

investment company by 1 or more entities of any State

(including by a political subdivision, agency, or

instrumentality of the State and including any guarantee

extended by those entities) in an aggregate amount that does

not exceed 33 percent of the private capital of the applicant

or rural business investment company.

(13) Rural business concern

The term ''rural business concern'' means -

(A) a public, private, or cooperative for-profit or nonprofit

organization;

(B) a for-profit or nonprofit business controlled by an

Indian tribe on a Federal or State reservation or other

federally recognized Indian tribal group; or

(C) any other person or entity;

that primarily operates in a rural area, as determined by the

Secretary.

(14) Rural business investment company

The term ''rural business investment company'' means a company

that -

(A) has been granted final approval by the Secretary under

section 2009cc-3(e) of this title; and

(B) has entered into a participation agreement with the

Secretary.

(15) Smaller enterprise

The term ''smaller enterprise'' means any rural business

concern that, together with its affiliates -

(A) has -

(i) a net financial worth of not more than $6,000,000, as

of the date on which assistance is provided under this

subchapter to the rural business concern; and

(ii) an average net income for the 2-year period preceding

the date on which assistance is provided under this

subchapter to the rural business concern, of not more than

$2,000,000, after Federal income taxes (excluding any

carryover losses), except that, for purposes of this clause,

if the rural business concern is not required by law to pay

Federal income taxes at the enterprise level, but is required

to pass income through to the shareholders, partners,

beneficiaries, or other equitable owners of the business

concern, the net income of the business concern shall be

determined by allowing a deduction in an amount equal to the

total of -

(I) if the rural business concern is not required by law

to pay State (and local, if any) income taxes at the

enterprise level, the net income (determined without regard

to this clause), multiplied by the marginal State income

tax rate (or by the combined State and local income tax

rates, as applicable) that would have applied if the

business concern were a corporation; and

(II) the net income (so determined) less any deduction

for State (and local) income taxes calculated under

subclause (I), multiplied by the marginal Federal income

tax rate that would have applied if the rural business

concern were a corporation; or

(B) satisfies the standard industrial classification size

standards established by the Administrator of the Small

Business Administration for the industry in which the rural

business concern is primarily engaged.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384A, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 388.)

-CITE-

7 USC Sec. 2009cc-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-1. Purposes

-STATUTE-

The purposes of the Rural Business Investment Program established

under this subchapter are -

(1) to promote economic development and the creation of wealth

and job opportunities in rural areas and among individuals living

in those areas by encouraging developmental venture capital

investments in smaller enterprises primarily located in rural

areas; and

(2) to establish a developmental venture capital program, with

the mission of addressing the unmet equity investment needs of

small enterprises located in rural areas, by authorizing the

Secretary -

(A) to enter into participation agreements with rural

business investment companies;

(B) to guarantee debentures of rural business investment

companies to enable each rural business investment company to

make developmental venture capital investments in smaller

enterprises in rural areas; and

(C) to make grants to rural business investment companies,

and to other entities, for the purpose of providing operational

assistance to smaller enterprises financed, or expected to be

financed, by rural business investment companies.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384B, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 391.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009cc-2 of this title.

-CITE-

7 USC Sec. 2009cc-2 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-2. Establishment

-STATUTE-

In accordance with this subchapter, the Secretary shall establish

a Rural Business Investment Program, under which the Secretary may

-

(1) enter into participation agreements with companies granted

final approval under section 2009cc-3(e) of this title for the

purposes set forth in section 2009cc-1 of this title;

(2) guarantee the debentures issued by rural business

investment companies as provided in section 2009cc-4 of this

title; and

(3) make grants to rural business investment companies, and to

other entities, under section 2009cc-7 of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384C, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 391.)

-CITE-

7 USC Sec. 2009cc-3 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-3. Selection of rural business investment companies

-STATUTE-

(a) Eligibility

A company shall be eligible to apply to participate, as a rural

business investment company, in the program established under this

subchapter if -

(1) the company is a newly formed for-profit entity or a newly

formed for-profit subsidiary of such an entity;

(2) the company has a management team with experience in

community development financing or relevant venture capital

financing; and

(3) the company will invest in enterprises that will create

wealth and job opportunities in rural areas, with an emphasis on

smaller enterprises.

(b) Application

To participate, as a rural business investment company, in the

program established under this subchapter, a company meeting the

eligibility requirements of subsection (a) of this section shall

submit an application to the Secretary that includes -

(1) a business plan describing how the company intends to make

successful developmental venture capital investments in

identified rural areas;

(2) information regarding the community development finance or

relevant venture capital qualifications and general reputation of

the management of the company;

(3) a description of how the company intends to work with

community-based organizations and local entities (including local

economic development companies, local lenders, and local

investors) and to seek to address the unmet equity capital needs

of the communities served;

(4) a proposal describing how the company intends to use the

grant funds provided under this subchapter to provide operational

assistance to smaller enterprises financed by the company,

including information regarding whether the company intends to

use licensed professionals, as necessary, on the staff of the

company or from an outside entity;

(5) with respect to binding commitments to be made to the

company under this subchapter, an estimate of the ratio of cash

to in-kind contributions;

(6) a description of the criteria to be used to evaluate

whether and to what extent the company meets the purposes of the

program established under this subchapter;

(7) information regarding the management and financial strength

of any parent firm, affiliated firm, or any other firm essential

to the success of the business plan of the company; and

(8) such other information as the Secretary may require.

(c) Status

Not later than 90 days after the initial receipt by the Secretary

of an application under this section, the Secretary shall provide

to the applicant a written report describing the status of the

application and any requirements remaining for completion of the

application.

(d) Matters considered

In reviewing and processing any application under this section,

the Secretary -

(1) shall determine whether -

(A) the applicant meets the requirements of subsection (e) of

this section; and

(B) the management of the applicant is qualified and has the

knowledge, experience, and capability necessary to comply with

this subchapter;

(2) shall take into consideration -

(A) the need for and availability of financing for rural

business concerns in the geographic area in which the applicant

is to commence business;

(B) the general business reputation of the owners and

management of the applicant; and

(C) the probability of successful operations of the

applicant, including adequate profitability and financial

soundness; and

(3) shall not take into consideration any projected shortage or

unavailability of grant funds or leverage.

(e) Approval; license

(1) In general

Except as provided in paragraph (2), the Secretary may approve

an applicant to operate as a rural business investment company

under this subchapter and license the applicant as a rural

business investment company, if -

(A) the Secretary determines that the application satisfies

the requirements of subsection (b) of this section;

(B) the area in which the rural business investment company

is to conduct its operations, and establishment of branch

offices or agencies (if authorized by the articles), are

approved by the Secretary; and

(C) the applicant enters into a participation agreement with

the Secretary.

(2) Capital requirements

(A) In general

Notwithstanding any other provision of this subchapter, the

Secretary may approve an applicant to operate as a rural

business investment company under this subchapter and designate

the applicant as a rural business investment company, if the

Secretary determines that the applicant -

(i) has private capital of more than $2,500,000;

(ii) would otherwise be approved under this subchapter,

except that the applicant does not satisfy the requirements

of section 2009cc-8(c) of this title; and

(iii) has a viable business plan that -

(I) reasonably projects profitable operations; and

(II) has a reasonable timetable for achieving a level of

private capital that satisfies the requirements of section

2009cc-8(c) of this title.

(B) Leverage

An applicant approved under subparagraph (A) shall not be

eligible to receive leverage under this subchapter until the

applicant satisfies the requirements of section 2009cc-8(c) of

this title.

(C) Grants

An applicant approved under subparagraph (A) shall be

eligible for grants under section 2009cc-7 of this title in

proportion to the private capital of the applicant, as

determined by the Secretary.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384D, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 391.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009cc, 2009cc-2 of this

title.

-CITE-

7 USC Sec. 2009cc-4 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-4. Debentures

-STATUTE-

(a) In general

The Secretary may guarantee the timely payment of principal and

interest, as scheduled, on debentures issued by any rural business

investment company.

(b) Terms and conditions

The Secretary may make guarantees under this section on such

terms and conditions as the Secretary considers appropriate, except

that the term of any debenture guaranteed under this section shall

not exceed 15 years.

(c) Full faith and credit of the United States

Section 2009g(i) of this title shall apply to any guarantee under

this section.

(d) Maximum guarantee

Under this section, the Secretary may -

(1) guarantee the debentures issued by a rural business

investment company only to the extent that the total face amount

of outstanding guaranteed debentures of the rural business

investment company does not exceed the lesser of -

(A) 300 percent of the private capital of the rural business

investment company; or

(B) $105,000,000; and

(2) provide for the use of discounted debentures.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384E, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 393.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009cc-2 of this title.

-CITE-

7 USC Sec. 2009cc-5 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-5. Issuance and guarantee of trust certificates

-STATUTE-

(a) Issuance

The Secretary may issue trust certificates representing ownership

of all or a fractional part of debentures issued by a rural

business investment company and guaranteed by the Secretary under

this subchapter, if the certificates are based on and backed by a

trust or pool approved by the Secretary and composed solely of

guaranteed debentures.

(b) Guarantee

(1) In general

The Secretary may, under such terms and conditions as the

Secretary considers appropriate, guarantee the timely payment of

the principal of and interest on trust certificates issued by the

Secretary or agents of the Secretary for purposes of this

section.

(2) Limitation

Each guarantee under this subsection shall be limited to the

extent of principal and interest on the guaranteed debentures

that compose the trust or pool.

(3) Prepayment or default

(A) In general

In the event a debenture in a trust or pool is prepaid, or in

the event of default of such a debenture, the guarantee of

timely payment of principal and interest on the trust

certificates shall be reduced in proportion to the amount of

principal and interest the prepaid debenture represents in the

trust or pool.

(B) Interest

Interest on prepaid or defaulted debentures shall accrue and

be guaranteed by the Secretary only through the date of payment

of the guarantee.

(C) Redemption

At any time during its term, a trust certificate may be

called for redemption due to prepayment or default of all

debentures.

(c) Full faith and credit of the United States

Section 2009g(i) of this title shall apply to any guarantee of a

trust certificate issued by the Secretary under this section.

(d) Subrogation and ownership rights

(1) Subrogation

If the Secretary pays a claim under a guarantee issued under

this section, the claim shall be subrogated fully to the rights

satisfied by the payment.

(2) Ownership rights

No Federal, State, or local law shall preclude or limit the

exercise by the Secretary of the ownership rights of the

Secretary in a debenture residing in a trust or pool against

which 1 or more trust certificates are issued under this section.

(e) Management and administration

(1) Registration

The Secretary shall provide for a central registration of all

trust certificates issued under this section.

(2) Creation of pools

The Secretary may -

(A) maintain such commercial bank accounts or investments in

obligations of the United States as may be necessary to

facilitate the creation of trusts or pools backed by debentures

guaranteed under this subchapter; and

(B) issue trust certificates to facilitate the creation of

those trusts or pools.

(3) Fidelity bond or insurance requirement

Any agent performing functions on behalf of the Secretary under

this paragraph shall provide a fidelity bond or insurance in such

amount as the Secretary considers to be necessary to fully

protect the interests of the United States.

(4) Regulation of brokers and dealers

The Secretary may regulate brokers and dealers in trust

certificates issued under this section.

(5) Electronic registration

Nothing in this subsection prohibits the use of a book-entry or

other electronic form of registration for trust certificates

issued under this section.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384F, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 393.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009cc-6 of this title.

-CITE-

7 USC Sec. 2009cc-6 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-6. Fees

-STATUTE-

(a) In general

The Secretary may charge such fees as the Secretary considers

appropriate with respect to any guarantee or grant issued under

this subchapter.

(b) Trust certificate

Notwithstanding subsection (a) of this section, the Secretary

shall not collect a fee for any guarantee of a trust certificate

under section 2009cc-5 of this title, except that any agent of the

Secretary may collect a fee approved by the Secretary for the

functions described in section 2009cc-5(e)(2) of this title.

(c) License

(1) In general

The Secretary may prescribe fees to be paid by each applicant

for a license to operate as a rural business investment company

under this subchapter.

(2) Use of amounts

Fees collected under this subsection -

(A) shall be deposited in the account for salaries and

expenses of the Secretary; and

(B) are authorized to be appropriated solely to cover the

costs of licensing examinations.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384G, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 395.)

-CITE-

7 USC Sec. 2009cc-7 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-7. Operational assistance grants

-STATUTE-

(a) In general

In accordance with this section, the Secretary may make grants to

rural business investment companies and to other entities, as

authorized by this subchapter, to provide operational assistance to

smaller enterprises financed, or expected to be financed, by the

entities.

(b) Terms

Grants made under this section shall be made over a multiyear

period (not to exceed 10 years) under such terms as the Secretary

may require.

(c) Use of funds

The proceeds of a grant made under this section may be used by

the rural business investment company receiving the grant only to

provide operational assistance in connection with an equity or

prospective equity investment in a business located in a rural

area.

(d) Submission of plans

A rural business investment company shall be eligible for a grant

under this section only if the rural business investment company

submits to the Secretary, in such form and manner as the Secretary

may require, a plan for use of the grant.

(e) Grant amount

(1) Rural business investment companies

The amount of a grant made under this section to a rural

business investment company shall be equal to the lesser of -

(A) 10 percent of the private capital raised by the rural

business investment company; or

(B) $1,000,000.

(2) Other entities

The amount of a grant made under this section to any entity

other than a rural business investment company shall be equal to

the resources (in cash or in kind) raised by the entity in

accordance with the requirements applicable to rural business

investment companies under this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384H, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 395.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2009cc-2, 2009cc-3 of

this title.

-CITE-

7 USC Sec. 2009cc-8 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-8. Rural business investment companies

-STATUTE-

(a) Organization

For the purpose of this subchapter, a rural business investment

company shall -

(1) be an incorporated body, a limited liability company, or a

limited partnership organized and chartered or otherwise existing

under State law solely for the purpose of performing the

functions and conducting the activities authorized by this

subchapter;

(2)(A) if incorporated, have succession for a period of not

less than 30 years unless earlier dissolved by the shareholders

of the rural business investment company; and

(B) if a limited partnership or a limited liability company,

have succession for a period of not less than 10 years; and

(3) possess the powers reasonably necessary to perform the

functions and conduct the activities.

(b) Articles

The articles of any rural business investment company -

(1) shall specify in general terms -

(A) the purposes for which the rural business investment

company is formed;

(B) the name of the rural business investment company;

(C) the area or areas in which the operations of the rural

business investment company are to be carried out;

(D) the place where the principal office of the rural

business investment company is to be located; and

(E) the amount and classes of the shares of capital stock of

the rural business investment company;

(2) may contain any other provisions consistent with this

subchapter that the rural business investment company may

determine appropriate to adopt for the regulation of the business

of the rural business investment company and the conduct of the

affairs of the rural business investment company; and

(3) shall be subject to the approval of the Secretary.

(c) Capital requirements

(1) In general

Except as provided in paragraph (2), the private capital of

each rural business investment company shall be not less than -

(A) $5,000,000; or

(B) $10,000,000, with respect to each rural business

investment company authorized or seeking authority to issue

participating securities to be purchased or guaranteed by the

Secretary under this subchapter.

(2) Exception

The Secretary may, in the discretion of the Secretary and based

on a showing of special circumstances and good cause, permit the

private capital of a rural business investment company described

in paragraph (1)(B) to be less than $10,000,000, but not less

than $5,000,000, if the Secretary determines that the action

would not create or otherwise contribute to an unreasonable risk

of default or loss to the Federal Government.

(3) Adequacy

In addition to the requirements of paragraph (1), the Secretary

shall -

(A) determine whether the private capital of each rural

business investment company is adequate to ensure a reasonable

prospect that the rural business investment company will be

operated soundly and profitably, and managed actively and

prudently in accordance with the articles of the rural business

investment company;

(B) determine that the rural business investment company will

be able to comply with the requirements of this subchapter;

(C) require that at least 75 percent of the capital of each

rural business investment company is invested in rural business

concerns and not more than 10 percent of the investments shall

be made in an area containing a city of over 150,000 in the

last decennial census and the Census Bureau defined urbanized

area containing or adjacent to that city;

(D) ensure that the rural business investment company is

designed primarily to meet equity capital needs of the

businesses in which the rural business investment company

invests and not to compete with traditional small business

financing by commercial lenders; and

(E) require that the rural business investment company makes

short-term non-equity investments of less than 5 years only to

the extent necessary to preserve an existing investment.

(d) Diversification of ownership

The Secretary shall ensure that the management of each rural

business investment company licensed after May 13, 2002, is

sufficiently diversified from and unaffiliated with the ownership

of the rural business investment company so as to ensure

independence and objectivity in the financial management and

oversight of the investments and operations of the rural business

investment company.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384I, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 396.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009cc-3 of this title.

-CITE-

7 USC Sec. 2009cc-9 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-9. Financial institution investments

-STATUTE-

(a) In general

Except as otherwise provided in this section and notwithstanding

any other provision of law, the following banks, associations, and

institutions are eligible both to establish and invest in any rural

business investment company or in any entity established to invest

solely in rural business investment companies:

(1) Any bank or savings association the deposits of which are

insured under the Federal Deposit Insurance Act (12 U.S.C. 1811

et seq.).

(2) Any Farm Credit System institution described in section

1.2(a) of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)).

(b) Limitation

No bank, association, or institution described in subsection (a)

of this section may make investments described in subsection (a) of

this section that are greater than 5 percent of the capital and

surplus of the bank, association, or institution.

(c) Limitation on rural business investment companies controlled by

Farm Credit System institutions

If a Farm Credit System institution described in section 1.2(a)

of the Farm Credit Act of 1971 (12 U.S.C. 2002(a)) holds more than

15 percent of the shares of a rural business investment company,

either alone or in conjunction with other System institutions (or

affiliates), the rural business investment company shall not

provide equity investments in, or provide other financial

assistance to, entities that are not otherwise eligible to receive

financing from the Farm Credit System under that Act (12 U.S.C.

2001 et seq.).

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384J, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 397.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Deposit Insurance Act, referred to in subsec. (a)(1),

is act Sept. 21, 1950, ch. 967, Sec. 2, 64 Stat. 873, as amended,

which is classified generally to chapter 16 (Sec. 1811 et seq.) of

Title 12, Banks and Banking. For complete classification of this

Act to the Code, see Short Title note set out under section 1811 of

Title 12 and Tables.

The Farm Credit Act of 1971, referred to in subsec. (c), is Pub.

L. 92-181, Dec. 10, 1971, 85 Stat. 583, as amended, which is

classified generally to chapter 23 (Sec. 2001 et seq.) of Title 12,

Banks and Banking. For complete classification of this Act to the

Code, see Short Title note set out under section 2001 of Title 12

and Tables.

-CITE-

7 USC Sec. 2009cc-10 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-10. Reporting requirements

-STATUTE-

(a) Rural business investment companies

Each rural business investment company that participates in the

program established under this subchapter shall provide to the

Secretary such information as the Secretary may require, including

-

(1) information relating to the measurement criteria that the

rural business investment company proposed in the program

application of the rural business investment company; and

(2) in each case in which the rural business investment company

under this subchapter makes an investment in, or a loan or grant

to, a business that is not located in a rural area, a report on

the number and percentage of employees of the business who reside

in those areas.

(b) Public reports

(1) In general

The Secretary shall prepare and make available to the public an

annual report on the program established under this subchapter,

including detailed information on -

(A) the number of rural business investment companies

licensed by the Secretary during the previous fiscal year;

(B) the aggregate amount of leverage that rural business

investment companies have received from the Federal Government

during the previous fiscal year;

(C) the aggregate number of each type of leveraged

instruments used by rural business investment companies during

the previous fiscal year and how each number compares to

previous fiscal years;

(D) the number of rural business investment company licenses

surrendered and the number of rural business investment

companies placed in liquidation during the previous fiscal

year, identifying the amount of leverage each rural business

investment company has received from the Federal Government and

the type of leverage instruments each rural business investment

company has used;

(E) the amount of losses sustained by the Federal Government

as a result of operations under this subchapter during the

previous fiscal year and an estimate of the total losses that

the Federal Government can reasonably expect to incur as a

result of the operations during the current fiscal year;

(F) actions taken by the Secretary to maximize recoupment of

funds of the Federal Government expended to implement and

administer the Rural Business Investment Program under this

subchapter during the previous fiscal year and to ensure

compliance with the requirements of this subchapter (including

regulations);

(G) the amount of Federal Government leverage that each

licensee received in the previous fiscal year and the types of

leverage instruments each licensee used;

(H) for each type of financing instrument, the sizes, types

of geographic locations, and other characteristics of the small

business investment companies using the instrument during the

previous fiscal year, including the extent to which the

investment companies have used the leverage from each

instrument to make loans or equity investments in rural areas;

and

(I) the actions of the Secretary to carry out this

subchapter.

(2) Prohibition

In compiling the report required under paragraph (1), the

Secretary may not -

(A) compile the report in a manner that permits

identification of any particular type of investment by an

individual rural business investment company or small business

concern in which a rural business investment company invests;

and

(B) may not release any information that is prohibited under

section 1905 of title 18.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384K, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 398.)

-CITE-

7 USC Sec. 2009cc-11 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-11. Examinations

-STATUTE-

(a) In general

Each rural business investment company that participates in the

program established under this subchapter shall be subject to

examinations made at the direction of the Secretary in accordance

with this section.

(b) Assistance of private sector entities

An examination under this section may be conducted with the

assistance of a private sector entity that has the qualifications

and the expertise necessary to conduct such an examination.

(c) Costs

(1) In general

The Secretary may assess the cost of an examination under this

section, including compensation of the examiners, against the

rural business investment company examined.

(2) Payment

Any rural business investment company against which the

Secretary assesses costs under this paragraph shall pay the

costs.

(d) Deposit of funds

Funds collected under this section shall -

(1) be deposited in the account that incurred the costs for

carrying out this section;

(2) be made available to the Secretary to carry out this

section, without further appropriation; and

(3) remain available until expended.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384L, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 399.)

-CITE-

7 USC Sec. 2009cc-12 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-12. Injunctions and other orders

-STATUTE-

(a) In general

(1) Application by Secretary

Whenever, in the judgment of the Secretary, a rural business

investment company or any other person has engaged or is about to

engage in any act or practice that constitutes or will constitute

a violation of a provision of this subchapter (including any

rule, regulation, order, or participation agreement under this

subchapter), the Secretary may apply to the appropriate district

court of the United States for an order enjoining the act or

practice, or for an order enforcing compliance with the

provision, rule, regulation, order, or participation agreement.

(2) Jurisdiction; relief

The court shall have jurisdiction over the action and, on a

showing by the Secretary that the rural business investment

company or other person has engaged or is about to engage in an

act or practice described in paragraph (1), a permanent or

temporary injunction, restraining order, or other order, shall be

granted without bond.

(b) Jurisdiction

(1) In general

In any proceeding under subsection (a) of this section, the

court as a court of equity may, to such extent as the court

considers necessary, take exclusive jurisdiction over the rural

business investment company and the assets of the rural business

investment company, wherever located.

(2) Trustee or receiver

The court shall have jurisdiction in any proceeding described

in paragraph (1) to appoint a trustee or receiver to hold or

administer the assets.

(c) Secretary as trustee or receiver

(1) Authority

The Secretary may act as trustee or receiver of a rural

business investment company.

(2) Appointment

On the request of the Secretary, the court shall appoint the

Secretary to act as a trustee or receiver of a rural business

investment company unless the court considers the appointment

inequitable or otherwise inappropriate by reason of any special

circumstances involved.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384M, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 399.)

-CITE-

7 USC Sec. 2009cc-13 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-13. Additional penalties for noncompliance

-STATUTE-

(a) In general

With respect to any rural business investment company that

violates or fails to comply with this subchapter (including any

rule, regulation, order, or participation agreement under this

subchapter), the Secretary may, in accordance with this section -

(1) void the participation agreement between the Secretary and

the rural business investment company; and

(2) cause the rural business investment company to forfeit all

of the rights and privileges derived by the rural business

investment company under this subchapter.

(b) Adjudication of noncompliance

(1) In general

Before the Secretary may cause a rural business investment

company to forfeit rights or privileges under subsection (a) of

this section, a court of the United States of competent

jurisdiction must find that the rural business investment company

committed a violation, or failed to comply, in a cause of action

brought for that purpose in the district, territory, or other

place subject to the jurisdiction of the United States, in which

the principal office of the rural business investment company is

located.

(2) Parties authorized to file causes of action

Each cause of action brought by the United States under this

subsection shall be brought by the Secretary or by the Attorney

General.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384N, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 400.)

-CITE-

7 USC Sec. 2009cc-14 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-14. Unlawful acts and omissions; breach of fiduciary

duty

-STATUTE-

(a) Parties deemed to commit a violation

Whenever any rural business investment company violates this

subchapter (including any rule, regulation, order, or participation

agreement under this subchapter), by reason of the failure of the

rural business investment company to comply with this subchapter or

by reason of its engaging in any act or practice that constitutes

or will constitute a violation of this subchapter, the violation

shall also be deemed to be a violation and an unlawful act

committed by any person that, directly or indirectly, authorizes,

orders, participates in, causes, brings about, counsels, aids, or

abets in the commission of any acts, practices, or transactions

that constitute or will constitute, in whole or in part, the

violation.

(b) Fiduciary duties

It shall be unlawful for any officer, director, employee, agent,

or other participant in the management or conduct of the affairs of

a rural business investment company to engage in any act or

practice, or to omit any act or practice, in breach of the

fiduciary duty of the officer, director, employee, agent, or

participant if, as a result of the act or practice, the rural

business investment company suffers or is in imminent danger of

suffering financial loss or other damage.

(c) Unlawful acts

Except with the written consent of the Secretary, it shall be

unlawful -

(1) for any person to take office as an officer, director, or

employee of any rural business investment company, or to become

an agent or participant in the conduct of the affairs or

management of a rural business investment company, if the person

-

(A) has been convicted of a felony, or any other criminal

offense involving dishonesty or breach of trust; or

(B) has been found liable in a civil action for damages, or

has been permanently or temporarily enjoined by an order,

judgment, or decree of a court of competent jurisdiction, by

reason of any act or practice involving fraud or breach of

trust; and

(2) for any person to continue to serve in any of the

capacities described in paragraph (1), if -

(A) the person is convicted of a felony or any other criminal

offense involving dishonesty or breach of trust; or

(B) the person is found liable in a civil action for damages,

or is permanently or temporarily enjoined by an order,

judgment, or decree of a court of competent jurisdiction, by

reason of any act or practice involving fraud or breach of

trust.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384O, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 400.)

-CITE-

7 USC Sec. 2009cc-15 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-15. Removal or suspension of directors or officers

-STATUTE-

Using the procedures established by the Secretary for removing or

suspending a director or an officer of a rural business investment

company, the Secretary may remove or suspend any director or

officer of any rural business investment company.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384P, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 401.)

-CITE-

7 USC Sec. 2009cc-16 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-16. Contracting of functions

-STATUTE-

(a) In general

Notwithstanding any other provision of law, to carry out the

day-to-day management and operation of the program authorized by

this subchapter on behalf of the Secretary, the Secretary shall

enter into an interagency agreement under section 1535 of title 31

with another Federal agency that has considerable expertise in

operating a program under which capital is provided for equity

investments in private sector companies.

(b) Funding

The costs incurred by a Federal agency entering into an agreement

under subsection (a) of this section shall be reimbursed in

accordance with section 1535 of title 31 from amounts made

available under section 2009cc-18(a)(2) of this title.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384Q, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 401.)

-CITE-

7 USC Sec. 2009cc-17 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-17. Regulations

-STATUTE-

The Secretary may promulgate such regulations as the Secretary

considers necessary to carry out this subchapter.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384R, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 401.)

-CITE-

7 USC Sec. 2009cc-18 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER VIII - RURAL BUSINESS INVESTMENT PROGRAM

-HEAD-

Sec. 2009cc-18. Funding

-STATUTE-

(a) In general

Notwithstanding any other provision of law, of the funds of the

Commodity Credit Corporation, the Secretary shall make available -

(1) such sums as may be necessary for the cost of guaranteeing

$280,000,000 of debentures under this subchapter; and

(2) $44,000,000 to make grants under this subchapter.

(b) Availability of funds

Funds transferred under subsection (a) of this section shall

remain available until expended.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 384S, as added Pub. L. 107-171,

title VI, Sec. 6029, May 13, 2002, 116 Stat. 402.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 2009cc-16 of this title.

-CITE-

7 USC SUBCHAPTER IX - RURAL STRATEGIC INVESTMENT PROGRAM 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IX - RURAL STRATEGIC INVESTMENT PROGRAM

.

-HEAD-

SUBCHAPTER IX - RURAL STRATEGIC INVESTMENT PROGRAM

-CITE-

7 USC Sec. 2009dd 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IX - RURAL STRATEGIC INVESTMENT PROGRAM

-HEAD-

Sec. 2009dd. Purpose

-STATUTE-

The purpose of this subchapter is to establish a rural strategic

investment program -

(1) to provide rural communities with flexible resources to

develop comprehensive, collaborative, and locally-based strategic

planning processes; and

(2) to implement innovative community and economic development

strategies that optimize regional competitive advantages.

-SOURCE-

(Pub. L. 87-128, title III, Sec. 385A, as added Pub. L. 107-171,

title VI, Sec. 6030, May 13, 2002, 116 Stat. 402.)

-CITE-

7 USC Sec. 2009dd-1 01/06/03

-EXPCITE-

TITLE 7 - AGRICULTURE

CHAPTER 50 - AGRICULTURAL CREDIT

SUBCHAPTER IX - RURAL STRATEGIC INVESTMENT PROGRAM

-HEAD-

Sec. 2009dd-1. Definitions

-STATUTE-

In this subchapter:

(1) Benchmark

The term ''benchmark'' means an annual set of strategies and

goals of a Regional Board established for the purpose of

measuring performance in meeting the regional plan of the

Regional Board.

(2) Conference

The term ''Conference'' means the National Conference on Rural

America conducted under section 2009dd-7 of this title.

(3) Eligible area

(A) In general

The term ''eligible area'' means a nonmetropolitan county (as

defined by the Secretary) that has a population of 50,000

inhabitants or less.

(B) Inclusion

(i) In general

Subject to clause (ii), the term ''eligible area'' includes

an unincorporated or other area of a county that has a

population of more than 50,000 inhabitants if the

unincorporated area or other area is adjacent to an eligible

rural area described in subparagraph (A).

(ii) Participation

An area described in clause (i) may be represented on a

Regional Board.

(C) Exclusion

The term ''eligible area'' does not include any area

designated by the Secretary as a rural empowerment zone or

rural enterprise community.

(4) Innovation grant

The term ''innovation grant'' means an innovation grant made by

the National Board to a Regional Board under section 2009dd-6 of

this title.

(5) National Board

The term ''National Board'' means the National Board on Rural

America established under section 2009dd-3(a) of this title.

(6) National plan

The term ''national plan'' means a national strategic

investment plan of the National Board developed under section

2009dd-3(d)(3) of this title.

(7) Planning grant

The term ''planning grant'' means a regional strategic

investment planning grant made by the National Board to a

Regional Board under section 2009dd-5 of this title.

(8) Program

The term ''program'' means the rural strategic investment

program established under this subchapter.

(9) Region

The term ''region'' means the eligible are