(D) To the extent that it is not inconsistent with an exercise of authority under section 2003 of this title, in expending funds available for insured farm ownership loans

(i) during fiscal year 1994, the Secretary shall reserve not less than 55 percent of the funds available for the fiscal year to make insured farm ownership loans to qualified beginning farmers or ranchers;

(ii) during fiscal year 1995, the Secretary shall reserve not more than 65 percent of the funds available for the fiscal year to make insured farm ownership loans to qualified beginning farmers or ranchers; and

(iii) during each of fiscal years 1996 and thereafter, the Secretary may reserve not less than 65 percent and not more than 70 percent of the funds available for the fiscal year to make insured farm ownership loans to qualified beginning farmers or ranchers. (E) To the extent that it is not inconsistent with an exercise of authority under section 2003 of this title, the Secretary shall reserve not less than 60 percent of the amounts reserved for qualified beginning farmers or ranchers under subparagraph (D) for any fiscal year for down payment loans under section 1935 of this title.

(F) To the extent that it is not inconsistent with an exercise of authority under section 2003 of this title, to the maximum extent practicable, any funds reserved for down payment loans under section 1935 of this title for a fiscal year by reason of subparagraph (E) that are not obligated by the end of the second quarter of the fiscal year shall be available during the third quarter of the fiscal year for any type of insured farm ownership loans to beginning farmers and ranch

ers.

(G) Not less than 40 percent of the amounts available for the interest rate reduction program under section 1999 of this title shall be reserved for the first 6 months of each fiscal year for assistance to beginning farmers or ranchers.

(4) Notwithstanding subsection (a) of this section, the Secretary shall, as soon as practicable after November 5, 1990, make, insure, or guarantee loans at the levels authorized by this subsection for each of the fiscal years 1991 through 1995.

(5)(A) In expending funds available for insured operating loans under subchapter II of this chapter, including loans made under section 1948 of this title

(i) during the first 6 months of fiscal year 1994, the Secretary shall reserve not less than 30 percent of the funds available for the fiscal year to make insured operating loans to qualified beginning farmers or ranchers;

(ii) during the first 6 months of each of fiscal years 1995 and 1996, the Secretary shall reserve not less than 40 percent of the funds available for the fiscal year to make insured operating loans to qualified beginning farmers or ranchers; and

(iii) during the first 6 months of each of fiscal years 1997 and thereafter, the Secre

tary may reserve not more than 50 percent of the funds available for the fiscal year to make insured operating loans to qualified beginning farmers or ranchers.

(B) In each fiscal year described in subpara. graph (A), with regard to the funds not reserved under subparagraph (A), a qualified be ginning farmer or rancher may apply for insured operating loans, but shall not receive any preference as a result of status as a qualified beginning farmer or rancher.

(6) Notwithstanding any other provision of this chapter, at the end of the third quarter of each fiscal year, the Secretary shall transfer, and use to carry out section 1935 of this title, 75 percent of the amount that would otherwise be available for guaranteed operating loans.

[See main edition for text of (c) and (d)] (As amended Pub. L. 101-508, title I, § 1202(a), Nov. 5, 1990, 104 Stat. 1388-9; Pub. L. 101-624, title XXIII, § 2388(i), Nov. 28, 1990, 104 Stat. 4053; Pub. L. 102-237, title VII, §§ 701(h)(1)(F), 702(i), Dec. 13, 1991, 105 Stat. 1880, 1881; Pub. L. 102-554, § 20, Oct. 28, 1992, 106 Stat. 4159.)

1991-Subsec. (b). Pub. L. 102-237. § 702(i), repealed Pub. L. 101-624, § 2388(i). See 1990 Amendment note

below.

below.

Pub. L. 101-508, § 1202(a), amended subsec. (b) generally, substituting present provisions for provisions relating to maximum amounts for loans under the Ag ricultural Credit Insurance Fund and the Rural Devel opment Insurance Fund for fiscal years 1986 through

1988.

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."

§ 1997. Conservation easements (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.

[See main edition for text of (b)] (c) Property requirements

Such easement may be acquired or retained for real property 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;

(3)(A)(i) such property secures any loan made under any law administered by the Farmers Home Administration and held by the Secretary; and

(ii) such easement better enables a qualified borrower to repay the loan in a timely manner, as determined by the Secretary; or

(B) such property is administered under this chapter by the Secretary; and

(4) 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.

[See main edition for text of (d)]

(e) Purchase; limitation upon cancellation or prepayment

(1) Subject to paragraph (2), the Secretary may purchase any such easement from the bor

rower

(A) in the case of a borrower to whom the Secretary has made one or more outstanding

loans under laws administered by the Farmers Home Administration, 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 easement 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 Farmers Home Administration 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 easement 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 easement is acquired 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.

[See main edition for text of (f) and (g)]

(h) Repealed. Pub. L. 101-624, title XVIII, § 1815(9), Nov. 28, 1990, 104 Stat. 3826

(As amended Pub. L. 101-624, title XVIII, § 1815, title XXIII, § 2388(j), Nov. 28, 1990, 104 Stat. 3825, 4053.)

AMENDMENTS

1990-Subsec. (a)(4), (5). Pub. L. 101-624, § 2388(j), redesignated par. (5) as (4).

Subsec. (c). Pub. L. 101-624, § 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, § 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, § 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, § 1815(9), struck out subsec. (h) which read as follows: "This section shall

75-801 O-94-27: QL3

(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 90 days after the property is acquired by the Secretary or Administrator, or for property in inventory on January 6, 1988, the borrowerowner shall apply for occupancy not later than 90 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

[See main edition for text of (ii)]

(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 borrowerowner 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;

[See main edition for text of (E) to (G)] (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 borrowerowner, 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 borrowerowner 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 of this title and shall comply with all applicable State and local laws governing eviction from residential property.

(4) [See main edition for text of (A)]

(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 borrowerowner 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) Within 30 days of the acquisition of the homestead property securing a loan made or insured under this chapter, the Secretary shall notify the borrower-owner from whom the property was acquired of the availability of homestead protection rights under this section. 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.

(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.

[See main edition for text of (e) and (f)]

(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.

(As amended Pub. L. 102-237, title V, § 501(g), title VII, § 701(h)(2), Dec. 13, 1991, 105 Stat. 1867, 1880; Pub. L. 102-552, title V, § 516(i), (j)(1), Oct. 28, 1992, 106 Stat. 4138.)

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 (§ 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.

AMENDMENTS

1992- Subsec. (a)(4), (5). Pub. L. 102-552, § 516(i), redesignated par. (4), defining “Secretary”, as (5).

Subsec. (b)(2). Pub. L. 102-552, § 516(j)(1), substituted "borrower-owner's" for "borrower's".

1991-Subsec. (a)(2) to (4). Pub. L. 102-237, § 501(g), added par. (2), redesignated former pars. (2) and (3) as (3) and (4), respectively, and substituted "borrowerowner" for "borrower" in redesignated par. (4).

Subsec. (b)(1). Pub. L. 102-237, § 501(g)(2), substituted "borrower-owner" for "borrower" wherever appearing.

Subsec. (b)(3). Pub. L. 102-237, § 701(h)(2), struck out "be" after "shall".

Subsecs. (c), (d), (g). Pub. L. 102-237, § 501(g)(2), substituted "borrower-owner" for "borrower" wherever appearing.

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.

§ 2001. Debt restructuring and loan servicing

[See main edition for text of (a)]

(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;

[See main edition for text of (2) to (4)] (c) Restructuring determinations

[See main edition for text of (1)]

paragraph (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

[See main edition for text of (A) and (B)]

(C) Debt service margin (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.

(4) Notification

Within 90 days after receipt of a written request for restructuring from the borrower, the Secretary shall

[See main edition for text of (A) to (C), (5)] (6) Termination of loan obligations (A) Required conditions

(i) In general

Except as provided in subparagraph (B), the obligations of a borrower to the Secretary under a restructured loan shall terminate if

(I) the borrower satisfies the requirements of paragraphs (1) and (2) of subsection (b) of this section;

(II) the value of the restructured loan is less than the recovery value; and

(III) within 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 recovery value.

(ii) Limited applicability of good faith require

ment

Clause (i)(I) shall not apply to any offer of net recovery buyout made by the Secretary under this section before November 28, 1990, unless the Secretary, before such date, determined that the borrower involved did not act in good faith with respect to the loan.

(B) Recapture

(i) Authority to require borrower to enter into agreement before terminating loan obliga. tions

(I) In general

The Secretary may require, as a condition of the termination of loan obliga