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TITLE 7-AGRICULTURE

any loan made to the borrower under this chapter
(hereinafter referred to in this paragraph as the 'bor-
rower-owner')". See 1992 Amendment note above.
Subsec. (e)(1)(F). Pub. L. 102-237, § 501(f)(2), added
subpar. (F).
1990-Subsec. (a). Pub. L. 101-624, §§ 1813(a),
2303(c)(1), inserted "or the Rural Development Ad-
ministration" after "Farmers Home Administration"
and substituted "12 months from the date first pub-
lished under paragraph (2)(D)" for "three years from
the date of acquisition".

Subsec. (c)(1). Pub. L. 101-624, § 2303(c)(2), inserted "or the Rural Development Administration" after "Farmers Home Administration".

Subsec. (c)(2)(A), (B). Pub. L. 101-624, § 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, § 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, § 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, § 2388(g), substituted "cause" for "caused".

Subsec. (e)(1)(A)(i). Pub. L. 101-624, § 1813(c), substituted "real farm or ranch property (including the principal residence of the borrower)" for "real property".

Pub. L. 101-624, § 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, § 1813(d), added cl. (iv).

Subsec. (e)(1)(C)(i). Pub. L. 101-624, § 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, § 1813(e)(2), added cl. (iv) and redesignated former cl. (iv) as (v).

Subsec. (e)(1)(D)(x). Pub. L. 101-624, § 1813(f), added cl. (x).

Subsec. (e)(4)(B). Pub. L. 101-624, § 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, § 1813(g)(2), redesignated former subpar. (C) as (B).

Pub. L. 101-624, § 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, § 1813(h)(1), added subsec. (g).

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,

§ 1988

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COMPLETION OF SALES OF FARMERS HOME
ADMINISTRATION INVENTORY FARMS

Pub. L. 102-142, title VII, § 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, § 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."

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1471, 1929a, 1991, 2001 of this title.

§ 1988. Appropriations
(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.

[See main edition for text of (b) to (ƒ)I

§ 1989

TITLE 7—AGRICULTURE

(As amended Pub. L. 101-624, title XXIII, § 2303(d), Nov. 28, 1990, 104 Stat. 3981.)

AMENDMENTS

1990-Subsec. (a). Pub. L. 101-624 inserted "or the Rural Development Administration" after "Farmers Home Administration".

§ 1989. Rules and regulations

(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), including expenses of replacing capital items (determined after taking into account depreciation of the items).

(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 require ments and such other criteria as may be ap plicable to loans guaranteed by the Secre tary under other provisions of this chapter.

(B) With respect to loans to be guaran teed by the Secretary under this subsection, the Secretary shall permit certified lending institutions to make appropriate certifica tions (as provided by regulations issued by the Secretary)—

(i) relating to issues such as creditwor of thiness, repayment ability, adequacy collateral, and feasibility of farm oper ation; 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 disap prove 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 concern. ing the guaranteed loan program; and

(C) proficiency related to the certified lender program requirements.

The Secretary shall certify any lending insti tution 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 regula tions 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 certifica tion, the Secretary shall require the institu tion to undertake to service the loans guaran teed by the Secretary under this subsection using generally accepted banking standards

TITLE 7-AGRICULTURE

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. (As amended Pub. L. 102-554, § 18, Oct. 28, 1992, 106 Stat. 4155.)

REFERENCES IN TEXT

For definition of "this chapter", referred to in text, see note set out under section 1921 of this title.

AMENDMENTS

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."

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1983a of this title.

§ 1991. Definitions

(a) As used in this chapter:

(1) The term "farmer" includes a person who is engaged in, or who, with assistance af

§ 1991

forded 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, recreation loan (RL) 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

(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

'See References in Text note below.

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(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 15 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 taken under section 142 of title 13; 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.

[See main edition for text of (b)]

(As amended Pub. L. 101-624, title XVIII, § 1814, title XXIII, § 2388(h), Nov. 28, 1990, 104 Stat. 3824, 4053; Pub. L. 102-237, title VII, § 702(h)(1), Dec. 13, 1991, 105 Stat. 1880; Pub. L. 102-554, § 19, Oct. 28, 1992, 106 Stat. 4158.)

REFERENCES IN TEXT

Recreation loan (RL) under section 1924 of this title, referred to in subsec. (a)(10), is a reference to former subsec. (a) of section 1924 of this title which was repealed by Pub. L. 102-237, title V, § 501(a)(1), Dec. 13, 1991, 105 Stat. 1866.

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, § 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 (§ 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, § 683(a), Aug. 13, 1981, 95 Stat. 519. Titles VIII and X of the Act are classified generally to subchapters VIII (§ 2991 et seq.) and X (§ 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, § 608, set out as a note under section 1981 of this title.

AMENDMENTS

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, § 702(h)(1)(A), (B), made technical amendment to directory language of Pub. L. 101-624, § 2388(h)(1), (2). See 1990 Amendment note below.

Subsec. (a)(5). Pub. L. 102-237, § 702(h)(1)(C), repealed Pub. L. 101-624, § 2388(h)(3). See 1990 Amendment note below.

1990-Subsec.

(a)(1), (3). Pub. L. 101-624, § 2388(h)(1), (2), as amended by Pub. L. 102-237, § 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, § 2388(h)(3), which directed substitution of "contract of insurance'" for "contract of insurance", was repealed by Pub. L. 102-237, § 702(h)(1)(C). See Construction of 1990 Amendment note below.

Subsec. (a)(8) to (10). Pub. L. 101-624, § 1814, added pars. (8) to (10).

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.

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TITLE 7-AGRICULTURE

CONSTRUCTION OF 1990 AMENDMENT Section 702(h)(2) of Pub. L. 102-237, as amended by Pub. L. 102-552, title V, § 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."

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1985 of this title; title 25 section 492.

§ 1994. Maximum amounts for loans authorized; longterm cost projections

[See main edition for text of (a)]

(b) Maximum amounts for loans under Agricultural Credit Insurance Fund for fiscal years 1991 through 1995

(1) For each of the fiscal years 1991 through 1995, real estate and operating loans may be insured, made to be sold and insured, or guaranteed in accordance with subchapters I and II of this chapter, respectively, from the Agricultural Credit Insurance Fund established under section 1929 of this title in amounts equal to the following levels:

(A) For fiscal year 1991, $4,175,000,000, of which not less than $827,000,000 shall be for farm ownership loans under subchapter I of this chapter.

(B) For fiscal year 1992, $4,343,000,000, of which not less than $861,000,000 shall be for farm ownership loans under subchapter I of this chapter.

(C) For fiscal year 1993, $4,516,000,000, of which not less than $895,000,000 shall be for farm ownership loans under subchapter I of this chapter.

(D) For fiscal year 1994, $4,697,000,000, of which not less than $931,000,000 shall be for farm ownership loans under subchapter I of this chapter.

(E) For fiscal year 1995, $4,885,000,000, of which not less than $968,000,000 shall be for farm ownership loans under subchapter I of this chapter.

(2) Subject to paragraph (3), such amounts set forth in paragraph (1) shall be apportioned as follows:

(A) For fiscal year 1991

(i) $1,019,000,000 for insured loans, of which not less than $83,000,000 shall be for farm ownership loans; and

(ii) $3,156,000,000 for guaranteed loans, of which not less than $744,000,000 shall be for guarantees of farm ownership loans. (B) For fiscal year 1992

(i) $1,060,000,000 for insured loans, of which not less than $87,000,000 shall be for farm ownership loans; and

(ii) $3,283,000,000 for guaranteed loans, of which not less than $774,000,000 shall be for guarantees of farm ownership loans.

(C) For fiscal year 1993

(i) $1,102,000,000 for insured loans, of which not less than $90,000,000 shall be for farm ownership loans; and

§ 1994

(ii) $3,414,000,000 for guaranteed loans, of which not less than $805,000,000 shall be for guarantees of farm ownership loans.

(D) For fiscal year 1994

(i) $1,147,000,000 for insured loans, of which not less than $94,000,000 shall be for farm ownership loans; and

(ii) $3,550,000,000 for guaranteed loans, of which not less than $837,000,000 shall be for guarantees of farm ownership loans. (E) For fiscal year 1995

(i) $1,192,000,000 for insured loans, of which not less than $97,000,000 shall be for farm ownership loans; and

(ii) $3,693,000,000 for guaranteed loans, of which not less than $871,000,000 shall be for guarantees of farm ownership loans. Not less than 25 percent of the amounts appropriated for guarantees of farm ownership loans for each of the fiscal years 1994, 1995, 1996, and 1997 shall be reserved by the Secretary during the first 6 months of the respective fiscal year for guarantees of farm ownership loans to beginning farmers or ranchers.

(3) Notwithstanding any other provision of law:

(A) The Secretary shall

(i) reduce the amounts otherwise made available for insured loans by

(I) $482,000,000, for fiscal year 1991; (II) $614,000,000, for fiscal year 1992; (III) $760,000,000, for fiscal year 1993; (IV) $859,000,000, for fiscal year 1994; and

(V) $907,000,000, for fiscal year 1995; and

(ii) use the funds made available from such reductions in each fiscal year to guarantee loans under section 1999 of this title.

(B) The total amount of insured loans shall bear the same ratio to the amount of insured farm ownership loans as the dollar amount specified in paragraph (2)(A)(i) for insured loans bears to the dollar amount specified therein for insured farm ownership loans.

(C) If more than 70 percent of the number of loans guaranteed under section 1999 of this title in a fiscal year have been guaranteed to persons to whom the Secretary had not previously made an insured loan under this chapter, in lieu of the dollar amounts specified in subparagraph (A) for the immediately succeeding fiscal year, the dollar amounts which shall apply shall each be the product obtained by multiplying—

(i) such dollar amount; by
(ii) the quotient of—

(I) the number of persons provided with guaranteed loans under section 1999 of this title in the fiscal year to whom the Secretary had not previously made an insured or a guaranteed loan under this chapter; divided by

(II) the total number of persons provided with guaranteed loans under section 1999 of this title in the fiscal year.

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