Subtitle A--Farm Ownership Loans
Sec. 601. Limitation on direct farm ownership loans.
Sec. 602. Purposes of loans.
Sec. 603. Soil and water conservation and protection.
Sec. 604. Interest rate requirements.
Sec. 605. Insurance of loans.
Sec. 606. Loans guaranteed.
Sec. 611. Limitation on direct operating loans.
Sec. 612. Purposes of operating loans.
Sec. 613. Participation in loans.
Sec. 614. Line-of-credit loans.
Sec. 615. Insurance of operating loans.
Sec. 616. Special assistance for beginning farmers
and ranchers.
Sec. 617. Limitation on period for which borrowers
are eligible for
guaranteed
assistance.
Sec. 621. Hazard insurance requirement.
Sec. 622. Narrowing of authority to waive application
of the credit
elsewhere
test.
Sec. 623. Linking of emergency loans for crop or
livestock changes to
natural
disasters.
Sec. 624. Maximum emergency loan indebtedness.
Sec. 625. Establishment of date for emergency loan
asset valuation.
Sec. 626. Insurance of emergency loans.
Subtitle D--Administrative Provisions
Sec. 631. Temporary authority to enter into contracts.
Sec. 632. Use of collection agencies.
Sec. 633. Notice of loan service programs.
Sec. 634. Clarification of written statement required
of borrowers.
Sec. 635. Annual review of the credit history, business
operation, and
continued
eligibility of a borrower.
Sec. 636. Extension of veterans preference.
Sec. 637. Verification of the credit elsewhere test.
Sec. 638. Sale of property.
Sec. 639. Easements on inventoried property.
Sec. 640. Definitions.
Sec. 641. Authorization for loans.
Sec. 642. Contracts on loan security properties.
Sec. 643. List of certified lenders and inventory
property demonstration
project.
Sec. 644. Homestead property.
Sec. 645. Restructuring.
Sec. 646. Transfer of inventory land for conservation
purposes.
Sec. 647. Implementation of target participation
rates.
Sec. 648. Delinquent borrowers.
Sec. 649. Short form certification of farm program
borrower compliance.
Sec. 650. Credit study.
Subtitle E--General Provisions
Sec. 661. Conforming amendments.
Sec. 662. Electronic filing of effective financing
statements under the
clear
title provisions of the Food Security Act of 1985.
Sec. 663. Effective date.
TITLE VI--CREDIT
Subtitle A--Farm Ownership Loans
SEC. 601. LIMITATION ON DIRECT FARM OWNERSHIP LOANS.
Section 302 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1922) is amended by striking subsection (b) and inserting the
following:
``(b) Direct Loans.--
``(1) In general.--Subject to paragraph (3), the Secretary
may make a direct loan under
this subtitle only to a farmer or
rancher who has operated
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 subtitle; or
``(C) has not received a direct farm ownership loan
under this subtitle 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 311(b)
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
subtitle to a farmer or rancher who has a direct loan
outstanding under this subtitle on the date of enactment
of this paragraph.
``(B) Less than 5 years.--If, as of the date of
enactment of this paragraph, a farmer or rancher has had
a direct loan outstanding under this subtitle 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 the date of enactment of this
paragraph.
``(C) 5 years or more.--If, as of the date of
enactment of this paragraph, a farmer or rancher has had
a direct loan outstanding under this subtitle 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 the date of enactment of this
paragraph.''.
(a) In General.--Section 303 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1923) is amended to read as follows:
``SEC. 303. PURPOSES OF LOANS.
``(a) Allowed Purposes.--
``(1) Direct loans.--A farmer or rancher may use a direct
loan made under this subtitle
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; or
``(D) paying for activities to promote soil and
water conservation and protection described in section
304 on a farm or ranch.
``(2) Guaranteed loans.--A farmer or rancher may use a loan
guaranteed under this subtitle
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
304 on a farm or ranch; or
``(E) refinancing indebtedness.
``(b) Preferences.--In making or guaranteeing a loan
under this
subtitle 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 subtitle 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 the date
of enactment of this subsection,
the Secretary shall determine
the appropriate level of
insurance to be required under
paragraph (1).''.
(b) <<NOTE: 7 USC 1923 note.>> Transitional
Provision.--Section
303(c)(1) of the Consolidated Farm and Rural Development Act shall
not
apply until the Secretary of Agriculture makes the determination
required by section 303(c)(2) of the Act.
SEC. 603. SOIL AND WATER CONSERVATION AND PROTECTION.
Section 304 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1924) is amended--
(1) by striking subsections (b) and (c);
(2) by striking ``Sec. 304. (a)(1) Loans'' and inserting the
following:
``SEC. 304. SOIL AND WATER CONSERVATION AND PROTECTION.
``(a) In General.--Loans'';
(3) by striking ``(2) In making or insuring'' and inserting
the following:
``(b) Priority.--In making or guaranteeing'';
(4) by striking ``(3) The Secretary'' and inserting the
following:
``(c) Loan Maximum.--The Secretary'';
(5) by redesignating subparagraphs (A) through (F) of
subsection (a) (as amended
by paragraph (2)) as paragraphs (1)
through (6), respectively;
and
(6) by redesignating subparagraphs (A) and (B) of subsection
(c) (as amended by paragraph
(4)) as paragraphs (1) and (2),
respectively.
SEC. 604. INTEREST RATE REQUIREMENTS.
Section 307(a)(3) of the Consolidated Farm and Rural
Development Act
(7 U.S.C. 1927(a)(3)) is amended--
(1) in subparagraph (B), by inserting ``subparagraph (D) and
in'' after ``Except as provided
in''; and
(2) by adding at the end the following:
``(D) Joint financing arrangement.--If a direct farm
ownership loan is made under this subtitle 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.''.
Section 308 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1928) is amended to read as follows:
``SEC. 308. FULL FAITH AND CREDIT.
``(a) In General.--A contract of insurance or guarantee
executed by
the Secretary under this title 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 title 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.''.
Section 309(h) of the Consolidated Farm and Rural
Development Act (7
U.S.C. 1929(h)) is amended by adding at the end the following:
``(4) Maximum guarantee of 90 percent.--Except as provided
in paragraphs (5) and (6),
a loan guarantee under this title
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 title, 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 title 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 310E; or
``(B) an operating loan to a borrower who is
participating in the down payment loan program under
section 310E that is made during the period that the
borrower has a direct loan outstanding under this
subtitle for acquiring a farm or ranch.''.
SEC. 611. LIMITATION ON DIRECT OPERATING LOANS.
(a) In General.--Section 311 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1941) is amended by striking subsection (c)
and inserting the following:
``(c) Direct Loans.--
``(1) In general.--Subject to paragraph (3), the Secretary
may make a direct loan under
this subtitle only to a farmer or
rancher who--
``(A) is 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;
``(B) has not received a previous direct operating
loan made under this subtitle; or
``(C) has received a previous direct operating loan
made under this subtitle 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).
``(3) Transition rule.--If, as of the date of enactment of
this paragraph, a farmer
or rancher has received a direct
operating loan under this
subtitle during each of 4 or more
previous years, the borrower
shall be eligible to receive a
direct operating loan under
this subtitle during 3 additional
years after the date of
enactment of this paragraph.''.
(b) Youth Enterprises Not Farming or Ranching.--Section
311(b) of
the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(b))
is
amended by adding at the end the following:
``(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 title.''.
SEC. 612. PURPOSES OF OPERATING LOANS.
(a) In General.--Section 312 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1942) is amended to read as follows:
``SEC. 312. PURPOSES OF LOANS.
``(a) In General.--A direct loan may be made under
this subtitle
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 6 of
the Occupational Safety
and Health Act of 1970 (29 U.S.C. 655)
or a standard adopted by
a State under a plan approved under
section 18 of the Act (29
U.S.C. 667), 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 310D in maintaining
records of farming and
ranching operations;
``(8) training a borrower under section 359;
``(9) refinancing the indebtedness of a borrower, if the
borrower--
``(A) has refinanced a loan under this subtitle not
more than 4 times previously; and
``(B)(i) is a direct loan borrower under this title
at the time of the refinancing and has suffered a
qualifying loss because of a natural disaster declared
by the Secretary under this title 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
subtitle 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 6 of
the Occupational Safety
and Health Act of 1970 (29 U.S.C. 655)
or a standard adopted by
a State under a plan approved under
section 18 of the Act (29
U.S.C. 667), 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 359; 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 subtitle 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 the date
of enactment of this paragraph,
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 title, the Secretary
may reserve a portion of any loan made
under this subtitle 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.''.
(b) <<NOTE: 7 USC 1942 note.>> Transitional
Provision.--Section
312(c)(1) of the Consolidated Farm and Rural Development Act shall
not
apply until the Secretary of Agriculture makes the determination
required by section 312(c)(2) of the Act.
SEC. 613. PARTICIPATION IN LOANS.
Section 315 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1945) is repealed.
SEC. 614. LINE-OF-CREDIT LOANS.
Section 316 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1946) is amended by adding at the end the following:
``(c) Line-of-Credit Loans.--
``(1) In general.--A loan made or guaranteed by the
Secretary under this subtitle
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 subtitle, 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 the date
of enactment of the Federal Agriculture Improvement and
Reform Act of 1996.''.
SEC. 615. INSURANCE OF OPERATING LOANS.
Section 317 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1947) is repealed.
SEC. 616. SPECIAL ASSISTANCE FOR BEGINNING FARMERS AND RANCHERS.
(a) In General.--Section 318 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1948) is repealed.
(b) Conforming Amendment.--Section 310F of the Consolidated
Farm and
Rural Development Act (7 U.S.C. 1936) is repealed.
SEC. 617. LIMITATION ON PERIOD FOR WHICH BORROWERS
ARE ELIGIBLE FOR
GUARANTEED ASSISTANCE.
Section 319 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1949) is amended by striking subsection (b) and inserting the
following:
``(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 subtitle 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
subtitle.
``(2) Transition rule.--If, as of October 28, 1992, a farmer
or rancher has received
a direct or guaranteed operating loan
under this subtitle during
each of 10 or more previous years,
the borrower shall be eligible
to receive a guaranteed operating
loan under this subtitle
during 5 additional years after October
28, 1992.''.
SEC. 621. HAZARD INSURANCE REQUIREMENT.
(a) In General.--Section 321 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1961) is amended by striking subsection (b)
and inserting the following:
``(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 subtitle 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 the date
of enactment of this paragraph,
the Secretary shall determine
the appropriate level of
insurance to be required under
paragraph (1).''.
(b) <<NOTE: 7 USC 1961 note.>> Transitional
Provision.--Section
321(b)(1) of the Consolidated Farm and Rural Development Act shall
not
apply until the Secretary of Agriculture makes the determination
required by section 321(b)(2) of the Act.
SEC. 622. NARROWING OF AUTHORITY TO WAIVE APPLICATION
OF THE CREDIT
ELSEWHERE TEST.
The second proviso of section 322(b) of the Consolidated
Farm and
Rural Development Act (7 U.S.C. 1962(b)) is amended by striking
``$300,000 or less'' and inserting ``$100,000 or less''.
SEC. 623. LINKING OF EMERGENCY LOANS FOR CROP OR LIVESTOCK
CHANGES TO
NATURAL DISASTERS.
Section 323 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1963) is amended by inserting ``that are necessitated by a
natural disaster, major disaster, or emergency and that are'' after
``livestock changes''.
SEC. 624. MAXIMUM EMERGENCY LOAN INDEBTEDNESS.
Section 324 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1964) is amended by striking ``Sec. 324. (a) No loan'' and all
that follows through the end of subsection (a) and inserting the
following:
``SEC. 324. TERMS OF LOANS.
``(a) Maximum Amount of Loan.--The Secretary may
not make a loan
under this subtitle 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 subtitle to exceed
$500,000.''.
SEC. 625. ESTABLISHMENT OF DATE FOR EMERGENCY LOAN ASSET VALUATION.
The last sentence of section 324(d) of the Consolidated
Farm and
Rural Development Act (7 U.S.C. 1964(d)) is amended by striking ``value
the assets'' and all that follows through the period and inserting
``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 subtitle or the Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121 et seq.).''.
SEC. 626. INSURANCE OF EMERGENCY LOANS.
Section 328 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1968) is repealed.
Subtitle D--Administrative Provisions
SEC. 631. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.
Section 331 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1981) is amended by adding at the end the following:
``(d) Temporary Authority To Enter Into Contracts.--
``(1) Definitions.--In this subsection:
``(A) Eligible financial institution.--The term
`eligible financial institution' means a financial
institution with substantial experience in farm, ranch,
or aquaculture lending that is regulated by the
Comptroller of the Currency, the Farm Credit
Administration, or a similar regulatory body.
``(B) Pilot project.--The term `pilot project'
includes services related to borrower loan
documentation, financial information, credit history,
and appraisals of real estate and chattel.
``(2) Authority.--The Secretary may enter into a contract
with an eligible financial
institution for servicing a farmer
program loan under this
title, including 1 or more pilot
projects.
``(3) Report.--Not later than September 30, 1997, and
September 30 of each year
thereafter, the Secretary shall report
to Congress on--
``(A) the Secretary's experience in using contracts
under paragraph (2); and
``(B) recommendations for legislation related to
this subsection, if any.
``(4) Savings clause.--Nothing in this subsection shall
limit the authority of the
Secretary or an eligible financial
institution to contract
for any services under this Act or any
other law.
``(5) Sunset provision.--This subsection shall be effective
until September 30, 2002.''.
SEC. 632. USE OF COLLECTION AGENCIES.
Section 331 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1981) (as amended by section 631) is amended by adding at the
end
the following:
``(e) Private Collection Agency.--The Secretary
may use a private
collection agency to collect a claim or obligation described in
subsection (b)(5).''.
SEC. 633. NOTICE OF LOAN SERVICE PROGRAMS.
Section 331D(a) of the Consolidated Farm and Rural
Development Act
(7 U.S.C. 1981d(a)) is amended by striking ``180 days delinquent in''
and inserting ``90 days past due on''.
SEC. 634. CLARIFICATION OF WRITTEN STATEMENT REQUIRED OF BORROWERS.
Section 333(1)(B) of the Consolidated Farm and Rural
Development Act
(7 U.S.C. 1983(1)(B)) is amended by striking ``a written statement
showing the applicant's net worth'' and inserting ``an appropriate
written financial statement''.
SEC. 635. ANNUAL REVIEW OF THE CREDIT HISTORY, BUSINESS
OPERATION, AND
CONTINUED ELIGIBILITY OF A BORROWER.
(a) In General.--Section 333 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1983) is amended--
(1) by redesignating paragraphs (2), (3), and (4) as
paragraphs (3), (4), and
(5), respectively; and
(2) by inserting after paragraph (1) the following:
``(2) except with respect to a loan under section 306, 310B,
or 314, the county or area
committee established under section
8(b)(5)(B) of the Soil Conservation
and Domestic Allotment Act
(16 U.S.C. 590h(b)(5)(B))
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;''.
(b) Conforming Amendment.--The third sentence of
section 310B(a) of
the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(a))
is
amended by striking ``(3) of'' and inserting ``(4) of''.
SEC. 636. EXTENSION OF VETERANS PREFERENCE.
Section 333 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1983) (as amended by section 635(a)) is amended by striking
paragraph (5) and inserting the following:
``(5) the application of a person who is a veteran of any
war, as defined in section
101(12) of title 38, United States
Code, for a loan under subtitle
A or B 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.''.
SEC. 637. VERIFICATION OF THE CREDIT ELSEWHERE TEST.
Section 333A(f)(4) of the Consolidated Farm and Rural
Development
Act (7 U.S.C. 1983a(f)(4)) is amended--
(1) by striking ``(4) With'' and all that follows through
``seasoned'' and inserting
the following:
``(4) Verification.--
``(A) In general.--The Secretary shall provide a
prospectus of a seasoned''; and
(2) by striking ``If the Secretary'' and inserting the
following:
``(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''.
Section 335 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1985) is amended--
(1) in subsection (b), by striking ``subsection (e)'' and
inserting ``subsections
(c) and (e)'';
(2) by striking subsection (c) and inserting the following:
``(c) Sale of Property.--
``(1) In general.--Subject to this subsection and subsection
(e)(1)(A), the Secretary
shall offer to sell real property that
is acquired by the Secretary
under this title 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 75 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.
``(C) Public sale.--If no acceptable offer is
received from a qualified beginning farmer or rancher
under subparagraph (B) not later than 75 days after
acquiring the real property, the Secretary shall, not
later than 30 days after the 75-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) Transitional rules.--
``(A) Previous lease.--In the case of real property
acquired prior to the date of enactment of this
subparagraph that the Secretary leased prior to the date
of enactment of this subparagraph, 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 the date of enactment of this
subparagraph that the Secretary has not leased, not
later than 60 days after the date of enactment of this
subparagraph, 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 (40
U.S.C. 471 et seq.) shall not apply to
any exercise of authority
under this title.
``(5) Lease of property.--
``(A) In general.--Subject to subparagraph (B), the
Secretary may not lease any real property acquired under
this title.
``(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 title if the
beginning farmer or rancher qualifies for a credit
sale or direct farm ownership loan under subtitle
A 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) <<NOTE: Records.>> 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.''; and
(3) in subsection (e)--
(A) in paragraph (1)--
(i) by striking subparagraphs (A) through (C);
(ii) by redesignating subparagraphs (D)
through (G) as subparagraphs (A) through (D),
respectively;
(iii) in subparagraph (A) (as redesignated by
clause (ii))--
(I) in clause (i)--
(aa) in the matter preceding
subclause (I), by striking
``(G)'' and inserting ``(D)'';
(bb) by striking subclause
(I) and inserting the following:
``(I) the Secretary acquires property under this title that
is located within an Indian
reservation; and'';
(cc) in subclause (II), by
striking ``, and'' at the end
and inserting a semicolon; and
(dd) by striking subclause
(III); and
(II) in clause (iii), by striking
``The Secretary shall'' and all that
follows through ``of subparagraph (A),''
and inserting ``Not later than 90 days
after acquiring the property, the
Secretary shall''; and
(iv) in subparagraph (D) (as redesignated by
clause (ii))--
(I) in clause (i), by striking
``(D)'' in the matter following
subclause (IV) and inserting ``(A)'';
(II) in clause (iii)(I), by striking
``subparagraphs (C)(i), (C)(ii), and
(D)'' and inserting ``subparagraph
(A)''; and
(III) by striking clause (v) and
inserting the following:
``(v) <<NOTE: Native Americans.>> 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 Public Law 91-229 (25
U.S.C. 488 et seq.).'';
(B) by striking paragraph (3);
(C) in paragraph (4)--
(i) by striking subparagraph (B);
(ii) in subparagraph (A)--
(I) in clause (i), by striking
``(i)''; and
(II) by redesignating clause (ii) as
subparagraph (B); and
(iii) in subparagraph (B) (as redesignated by
clause (ii)(II)), by striking ``clause (i)'' and
inserting ``subparagraph (A)'';
(D) by striking paragraphs (5), (6), and (9); and
(E) by redesignating paragraphs (4), (7), (8), and
(10) as paragraphs (3), (4), (5), and (6), respectively.
SEC. 639. EASEMENTS ON INVENTORIED PROPERTY.
Section 335(g) of the Consolidated Farm and Rural
Development Act (7
U.S.C. 1985(g)) is amended--
(1) in paragraph (1)--
(A) by striking ``(g)(1) Subject to paragraphs (2)
through (5)'' and inserting the following:
``(g) Easements on Inventoried Property.--
``(1) In general.--Subject to paragraph (2)''; and
(B) by striking ``, as determined'' and all that
follows through ``3801 et seq.)'';
(2) by striking paragraph (2) and inserting the following:
``(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) by striking paragraphs (3), (4), (5), and (8);
(4) by striking ``(6) The Secretary'' and inserting the
following:
``(3) Notification.--The Secretary''; and
(5) by striking ``(7) The appraised'' and inserting the
following:
``(4) Appraised value.--The appraised''.
Section 343(a) of the Consolidated Farm and Rural
Development Act (7
U.S.C. 1991(a)) is amended--
(1) in paragraph (11)--
(A) in the text preceding subparagraph (A), by
striking ``applicant--'' and inserting ``applicant,
regardless of whether the applicant is participating in
a program under section 310E--''; and
(B) in subparagraph (F)--
(i) by striking ``15 percent'' and inserting
``25 percent''; and
(ii) by inserting before the semicolon at the
end the following: ``, except that this
subparagraph shall not apply to a loan made or
guaranteed under subtitle B''; and
(2) by adding at the end the following:
``(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 title, in a manner that results in
a loss to the Secretary, through--
``(i) writing down or writing off a loan under
section 353;
``(ii) compromising, adjusting, reducing, or
charging-off a debt or claim under section 331;
``(iii) paying a loss on a guaranteed loan
under section 357; or
``(iv) discharging a debt as a result of
bankruptcy.
``(B) Loan restructuring.--The term `debt
forgiveness' does not include consolidation,
rescheduling, reamortization, or deferral.''.
SEC. 641. AUTHORIZATION FOR LOANS.
Section 346 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1994) is amended--
(1) in the second sentence of subsection (a), by striking
``with or without'' and
all that follows through
``administration''; and
(2) by striking subsection (b) and inserting the following:
``(b) Authorization for Loans.--
``(1) In general.--The Secretary may make or guarantee loans
under subtitles A and B
from the Agricultural Credit Insurance
Fund provided for in section
309 in not more than the following
amounts:
``(A) Fiscal year 1996.--For fiscal year 1996,
$3,085,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,500,000,000 shall be for guaranteed
loans, of which--
``(I) $600,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $1,900,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(B) Fiscal year 1997.--For fiscal year 1997,
$3,165,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,580,000,000 shall be for guaranteed
loans, of which--
``(I) $630,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $1,950,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(C) Fiscal year 1998.--For fiscal year 1998,
$3,245,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,660,000,000 shall be for guaranteed
loans, of which--
``(I) $660,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $2,000,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(D) Fiscal year 1999.--For fiscal year 1999,
$3,325,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,740,000,000 shall be for guaranteed
loans, of which--
``(I) $690,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $2,050,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(E) Fiscal year 2000.--For fiscal year 2000,
$3,435,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,850,000,000 shall be for guaranteed
loans, of which--
``(I) $750,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $2,100,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(F) Fiscal year 2001.--For fiscal year 2001,
$3,435,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,850,000,000 shall be for guaranteed
loans, of which--
``(I) $750,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $2,100,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(G) Fiscal year 2002.--For fiscal year 2002,
$3,435,000,000, of which--
``(i) $585,000,000 shall be for direct loans,
of which--
``(I) $85,000,000 shall be for farm
ownership loans under subtitle A; and
``(II) $500,000,000 shall be for
operating loans under subtitle B; and
``(ii) $2,850,000,000 shall be for guaranteed
loans, of which--
``(I) $750,000,000 shall be for
guarantees of farm ownership loans under
subtitle A; and
``(II) $2,100,000,000 shall be for
guarantees of operating loans under
subtitle B.
``(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 310E 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
2000 through 2002, 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 302, 310E, or
311, 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),
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 310E, if sufficient
direct farm ownership loan funds are not otherwise
available; and
<<NOTE: Effective date.>> ``(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),
subject to subparagraphs (B) and (C), beginning on
September 1 of each fiscal year, the Secretary may use
available funds made available under subtitle C 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.''.
SEC. 642. CONTRACTS ON LOAN SECURITY PROPERTIES.
Section 349 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 1997) is amended--
(1) by striking subsection (b) and inserting the following:
``(b) Contracts on Loan Security Properties.--Subject
to subsection
(c), the Secretary may enter into a contract related to real property
for conservation, recreation, or wildlife purposes.'';
(2) in subsection (c)--
(A) by striking ``(c) Such easement'' and all that
follows through ``if--'' and inserting the following:
``(c) Limitations.--The Secretary may enter into
a contract under
subsection (b) if--'';
(B) in paragraph (2), by adding ``and'' at the end;
(C) in paragraph (3)--
(i) by striking subparagraph (B);
(ii) by striking ``(3)(A)(i)'' and inserting
``(3)(A)'';
(iii) by striking ``Farmers Home
Administration'' and inserting ``Secretary'';
(iv) by striking ``(ii) such easement'' and
inserting ``(B) such contract''; and
(v) by striking ``; or'' and inserting a
period; and
(D) by striking paragraph (4);
(3) in subsection (d), by striking ``easement'' each place
it appears and inserting
``contract'';
(4) in subsection (e)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph (A),
by striking ``purchase any such easement from the
borrower--'' and inserting ``reduce or forgive the
outstanding debt of a borrower--'';
(ii) by striking ``easement'' each place it
appears and inserting ``contract''; and
(iii) by striking ``Farmers Home
Administration'' each place it appears and
inserting ``Secretary''; and
(B) in paragraph (2)(A), by striking ``easement is
acquired'' and inserting ``contract is entered into'';
(5) in subsection (f)--
(A) in paragraph (1), by striking ``acquire
easements'' and inserting ``enter into contracts''; and
(B) in paragraphs (2) and (3), by striking
``easements'' each place it appears and inserting
``contracts''; and
(6) in subsection (g), by striking ``an easement acquired''
and inserting ``a contract
entered into''.
SEC. 643. LIST OF CERTIFIED LENDERS AND INVENTORY
PROPERTY DEMONSTRATION
PROJECT.
(a) In General.--Section 351 of the Consolidated
Farm and Rural
Development Act (7 U.S.C. 1999) is amended--
(1) in subsection (f)--
(A) by striking ``Each Farmers Home Administration
county supervisor'' and inserting ``The Secretary'';
(B) by striking ``approved lenders'' and inserting
``lenders''; and
(C) by striking ``the Farmers Home Administration'';
and
(2) by striking subsection (h).
(b) Technical Amendment.--Section 1320 of the Food
Security Act of
1985 (Public Law 99-198; 7 U.S.C. 1999 note) is amended by striking
``Effective only'' and all that follows through ``1995, the'' and
inserting ``The''.
Section 352(c) of the Consolidated Farm and Rural
Development Act (7
U.S.C. 2000(c)) is amended--
(1) in paragraph (1)(A), by striking ``90'' each place it
appears and inserting ``30'';
and
(2) in paragraph (6)--
(A) in the first sentence, by striking ``Within 30''
and all that follows through ``title,'' and insert ``Not
later than the date of acquisition of the property
securing a loan made under this title (or, in the case
of real property in inventory on the date of enactment
of the Federal Agriculture Improvement and Reform Act of
1996, not later than 5 days after the date of enactment
of the Act),''; and
(B) by striking the second sentence.
Section 353 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 2001) is amended--
(1) in subsection (c)--
(A) in paragraph (3), by striking subparagraph (C)
and inserting the following:
``(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.''; and
(B) by striking paragraph (6) and inserting the
following:
``(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);
``(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.'';
(2) by striking subsection (k); and
(3) by redesignating subsections (l) through (p) as
subsections (k) through
(o), respectively.
SEC. 646. TRANSFER OF INVENTORY LAND FOR CONSERVATION PURPOSES.
Section 354 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 2002) is amended--
(1) in the matter preceding paragraph (1), by striking ``The
Secretary, without reimbursement,''
and inserting the following:
``(a) In General.--Subject to subsection (b), the
Secretary'';
(2) by striking paragraph (2) and inserting the following:
``(2) that is eligible to be disposed of in accordance with
section 335; and''; and
(3) by adding at the end the following:
``(b) Conditions.--The Secretary may not transfer
any property or
interest in property under subsection (a) 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.''.
SEC. 647. IMPLEMENTATION OF TARGET PARTICIPATION RATES.
Section 355 of the Consolidated Farm and Rural Development
Act (7
U.S.C. 2003) is amended by adding at the end the following:
``(f) Implementation Consistent With Supreme Court
Holding.--Not
later than 180 days after the date of enactment of this subsection,
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).''.
SEC. 648. DELINQUENT BORROWERS.
(a) Payment of Interest as a Condition of Loan Servicing
for
Borrowers.--The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) is amended by adding at the end the following:
``SEC. 372. <<NOTE: 7 USC 2008g.>> PAYMENT OF INTEREST AS
A CONDITION
OF LOAN SERVICING FOR BORROWERS.
``The Secretary may not reschedule or reamortize
a loan for a
borrower under this title who has not requested consideration under
section 331D(e) unless the borrower pays a portion, as determined by
the
Secretary, of the interest due on the loan.''.
(b) Loan and Loan Servicing Limitations.--The Consolidated
Farm and
Rural Development Act (7 U.S.C. 1921 et seq.) (as amended by subsection
(a)) is amended by adding at the end the following:
``SEC. 373. <<NOTE: 7 USC 2008h.>> LOAN AND LOAN SERVICING LIMITATIONS.
``(a) Delinquent Borrowers Prohibited From Obtaining
Direct
Operating Loans.--The Secretary may not make a direct operating loan
under subtitle B to a borrower who is delinquent on any loan made or
guaranteed under this title.
``(b) Loans Prohibited for Borrowers That Have Received
Debt
Forgiveness.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary may not make or
guarantee a loan under this title to a
borrower who received debt
forgiveness on a loan made or
guaranteed under this title.
``(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
353.
``(c) No More Than 1 Debt Forgiveness For A Borrower
On A Direct
Loan.--The Secretary may not provide to a borrower debt forgiveness
on a
direct loan made under this title if the borrower has received debt
forgiveness
on another direct loan made under this title.''.
SEC. 649. SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWER COMPLIANCE.
The Consolidated Farm and Rural Development Act (7
U.S.C. 1921 et
seq.) (as amended by section 648) is amended by adding at the end the
following:
``SEC. 374. <<NOTE: 7 USC 2008i.>> SHORT FORM CERTIFICATION
OF FARM
PROGRAM BORROWER COMPLIANCE.
``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 title.''.
SEC. 650. <<NOTE: 7 USC 2001 note.>> CREDIT STUDY.
(a) <<NOTE: Reports.>> In General.--The
Secretary of Agriculture
shall conduct a study and report to the Committee on Agriculture of
the
House of Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate on the demand for and availability of credit
in rural areas for agriculture, housing, and rural development.
(b) Purpose.--The purpose of the study shall be to
ensure that
Congress has current and comprehensive information to consider as
Congress deliberates on rural credit needs and the availability of
credit to satisfy the needs of rural areas of the United States.
(c) Items in Study.--In conducting the study, the
Secretary shall
base the study on the most current available data and analyze--
(1) rural demand for credit from the Farm Credit System, the
ability of the Farm Credit
System to meet the demand, and the
extent to which the Farm
Credit System provides loans to satisfy
the demand;
(2) rural demand for credit from the United States banking
system, the ability of banks
to meet the demand, and the extent
to which banks provide loans
to satisfy the demand;
(3) rural demand for credit from the Secretary, the ability
of the Secretary to meet
the demand, and the extent to which the
Secretary provides loans
to satisfy the demand;
(4) rural demand for credit from other Federal agencies, the
ability of the agencies
to meet the demand, and the extent to
which the agencies provide
loans to satisfy the demand;
(5) what measure or measures exist to gauge the overall
demand for rural credit,
the extent to which rural demand for
credit is satisfied, and
what the measures have demonstrated;
(6) a comparison of the interest rates and terms charged by
the Farm Credit System Farm
Credit Banks, production credit
associations, and banks
for cooperatives with the rates and
terms charged by the banks
of the United States for credit of
comparable risk and maturity;
(7) the advantages and disadvantages of the modernization
and expansion proposals
of the Farm Credit System on the Farm
Credit System, the United
States banking system, rural
users of credit, local rural
communities, and the Federal
Government, including--
(A) any added risk to the safety and soundness of
the Farm Credit System that may result from approval of
a proposal; and
(B) any positive or adverse impacts on competition
between the Farm Credit System and the banks of the
United States in providing credit to rural users;
(8) the nature and extent of the unsatisfied rural credit
need that the Farm Credit
System proposals are supposed to
address and what aspects
of the present Farm Credit System
prevent the Farm Credit
System from meeting the need;
(9) the advantages and disadvantages of the proposal by
commercial bankers to allow
banks access to the Farm Credit
System as a funding source
on the Farm Credit System, the United
States banking system, rural
users of credit, local rural
communities, and the Federal
Government, including--
(A) any added risk to the safety and soundness of
the Farm Credit System that may result from approval of
the proposal; and
(B) any positive or adverse impacts on competition
between the Farm Credit System and the banks of the
United States in providing credit to rural users; and
(10) problems that commercial banks have in obtaining
capital for lending in rural
areas, how access to Farm Credit
System funds would improve
the availability of capital in rural
areas in ways that cannot
be achieved in the system in existence
on the date of enactment
of this Act, and the possible effects
on the viability of the
Farm Credit System of granting banks
access to Farm Credit System
funds.
(d) Interagency Task Force.--In completing the study,
the Secretary
shall use, among other things, data and information obtained by the
interagency task force on rural credit.
Subtitle E--General Provisions
SEC. 661. CONFORMING AMENDMENTS.
(a) Section 307(a) of the Consolidated Farm and Rural
Development
Act (7 U.S.C. 1927(a)) is amended--
(1) in paragraph (4), by striking ``304(b), 306(a)(1), and
310B'' and inserting ``306(a)(1)
and 310B''; and
(2) in paragraph (6)(B)--
(A) by striking clauses (i), (ii), (iv), and (vii);
(B) in clause (v), by adding ``and'' at the end;
(C) in clause (vi), by striking ``, and'' at the end
and inserting a period; and
(D) by redesignating clauses (iii), (v), and (vi) as
clauses (i), (ii), and (iii), respectively.
(b) The second sentence of section 309(g)(1) of the
Consolidated
Farm and Rural Development Act (7 U.S.C. 1929(g)(1)) is amended by
striking ``section 308,''.
(c) Section 309A of the Consolidated Farm and Rural
Development Act
(7 U.S.C. 1929a) is amended--
(1) in the second sentence of subsection (a), by striking
``304(b), 306(a)(1), 306(a)(14),
310B, and 312(b)'' and
inserting ``306(a)(1), 306(a)(14),
and 310B''; and
(2) in the first sentence of subsection (b), by striking
``and section 308''.
(d) Section 310B(d) of the Consolidated Farm and
Rural Development
Act (7 U.S.C. 1932(d)) is amended--
(1) by striking ``sections 304(b), 310B, and 312(b)'' each
place it appears in paragraphs
(2), (3), and (4) and inserting
``this section''; and
(2) in paragraph (6), by striking ``this section, section
304, or section 312'' and
inserting ``this section''.
(e) The first sentence of section 310D(a) of the
Consolidated Farm
and Rural Development Act (7 U.S.C. 1934(a)) is amended by striking
``paragraphs (1) through (5) of section 303(a), or subparagraphs (A)
through (E) of section 304(a)(1)'' and inserting ``section 303(a),
or
paragraphs (1) through (5) of section 304(a)''.
(f) Section 311(b)(1) of the Consolidated Farm and
Rural Development
Act (7 U.S.C. 1941(b)(1)) is amended by striking ``and for the purposes
specified in section 312''.
(g) Section 316(a) of the Consolidated Farm and
Rural Development
Act (7 U.S.C. 1946(a)) is amended by striking paragraph (3).
(h) Section 343 of the Consolidated Farm and Rural
Development Act
(7 U.S.C. 1991) is amended--
(1) in subsection (a)(10), by striking ``recreation loan
(RL) under section 304,'';
and
(2) in subsection (b)--
(A) in the matter preceding paragraph (1), by
striking ``351(h),''; and
(B) by striking paragraph (4) and inserting the
following:
``(4) Preservation loan service program.--The term
`preservation loan service
program' means homestead retention as
authorized under section
352.''.
(i) The first sentence of section 344 of the Consolidated
Farm and
Rural Development Act (7 U.S.C. 1992) is amended by striking ``304(b),
306(a)(1), 310B, 312(b), or 312(c)'' and inserting ``306(a)(1), 310B,
or
312(c)''.
(j) Section 353(l) of the Consolidated Farm and
Rural Development
Act (as redesignated by section 645(3)) is amended by striking ``and
subparagraphs (A)(i) and (C)(i) of section 335(e)(1),''.
SEC. 662. ELECTRONIC FILING OF EFFECTIVE FINANCING
STATEMENTS UNDER THE
CLEAR TITLE PROVISIONS OF THE FOOD SECURITY ACT OF 1985.
Section 1324(c)(4) of the Food Security Act of 1985
(7 U.S.C.
1631(c)(4)) is amended--
(1) in subparagraph (A), by striking ``thereof'' and
inserting ``of the statement,
or, in the case of a State which
(under the applicable State
law provisions of the Uniform
Commercial Code) allows
the electronic filing of financing
statements without the signature
of the debtor, is an
electronically reproduced
copy of the statement''; and
(2) in each of subparagraphs (B) and (C), by inserting
``other than in the case
of an electronically reproduced copy of
the statement,'' before
``is''.
SEC. 663. <<NOTE: 7 USC 1922 note.>> EFFECTIVE DATE.
(a) In General.--Except as provided in subsection
(b), the
amendments made by this title shall become effective on the date of
enactment of this Act.
(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
shall become effective 90 days after the date of enactment of this
Act.
(c) Transition Provision.--The amendments made by
sections 638 and
644 shall not apply with respect to a complete application to acquire
inventory property submitted prior to the date of enactment of this
Act.
(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.