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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 L. 101-624, amending this section] is hereby repealed and the Consolidated Farm and Rural Development Act [see Short Title note set out under section 1921 of this title] shall be applied and administered as if the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 borrower

(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 (ƒ) 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

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not apply with respect to the cancellation of any part of any loan that was made after December 25, 1985."

§ 1999. Interest rate reduction program

[See main edition for text of (a) and (b)] (c) Payments to lenders

In return for a contract entered into by a lender under subsection (b) of this section for the reduction of the interest rate paid on a loan, the Secretary shall make payments to the lender in an amount equal to not more than 100 percent of the cost of reducing the annual rate of interest payable on such loan, except that such payments may not exceed the cost of reducing such rate by more than 4 percent.

(d) Duration of contracts

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1990-Subsec. (c). Pub. L. 101-508, § 1202(b)(1)(A), substituted "100 percent" for "50 percent” and “4 percent" for "2 percent".

Subsec. (d). Pub. L. 101-508, § 1202(b)(1)(B), struck out ", or 3 years, whichever is less" after "term of such loan".

Subsec. (h)(1). Pub. L. 101-508, § 1202(c), substituted "4-year" for “3-year”.

EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101-508 effective Nov. 29, 1990, see section 1301 of Pub. L. 101-508, set out as a note under section 511r of this title.

EFFECTIVE AND TERMINATION DATES

Section 1320 of Pub. L. 99-198, as amended by Pub. L. 100-233, title VI, § 613(a), Jan. 6, 1988, 101 Stat. 1674; Pub. L. 101-508, title I, § 1202(b)(2), Nov. 5, 1990, 104 Stat. 1388-11, provided in part that this section is effective only for the period beginning Dec. 23, 1985, and ending Sept. 30, 1995.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1948, 1983a, 1991, 1994 of this title.

§ 2000. Homestead protection (a) Definitions

As used in this section:

[See main edition for text of (1)】
(2) The term "borrower-owner" means-

(A) a borrower of a loan made or insured by the Secretary or the Administrator who meets the eligibility requirements of subsection (c)(1) of this section; or

(B) in any case in which an owner of homestead property pledged the property to secure the loan and the owner is different than the borrower, the owner.

(3) The term "farm program loan" means any loan made by the Administrator under the Small Business Act (15 U.S.C. 631 et seq.) for any of the purposes authorized for loans under subchapters 1 I or II of this chapter.

(4) The term "homestead property" means the principal residence and adjoining property possessed and occupied by a borrowerowner specified in paragraph (2) of this subsection, including a reasonable number of farm outbuildings located on the adjoining land that are useful to the occupants of the homestead, and no more than 10 acres of adjoining land that is used to maintain the family of the individual.

(5) The term "Secretary" means the Secretary of Agriculture.

(b) Occupancy of homestead upon foreclosure, bankruptcy, or liquidation; appraisal; period of

occupancy

(1) The Secretary or the Administrator shall, on application by a borrower-owner who meets the eligibility requirements of subsection (c)(1) of this section, permit the borrower-owner to retain possession and occupancy of homestead property under the terms set forth, and until the action described in this section has been completed, if—

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

(C) the borrower-owner of a loan made or insured by the Secretary or the Administrator files a petition in bankruptcy that results in the conveyance of the homestead property to the Secretary or the Administrator, or agrees to voluntarily liquidate or convey such property in whole or in part.

(2) The value of the homestead property shall be determined insofar as possible by an independent appraisal made within six months from the date of the borrower-owner's application to retain possession and occupancy of the homestead property.

(3) The period of occupancy of homestead property under this subsection may not exceed five years, but in no case shall the Secretary or the Administrator grant a period of occupancy less than three years, subject to compliance with the requirements of subsection (c) of this section.

1 So in original. Probably should be "subchapter".

(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)]

(2) Recovery value

For the purpose of paragraph (1), the recovery value of the collateral securing the loan shall be based on

(A)(i) the amount of the current appraised value of the interests of the borrower in the property securing the loan; plus (ii) the value of the interests of the borrower in all other assets that are

(I) not essential for necessary family living expenses;

(II) not essential to the operation of the farm; and

(III) not exempt from judgment creditors or in a bankruptcy action under Federal or State law; less

(B) the estimated administrative, legal, and other expenses associated with the liquidation and disposition of the loan and collateral, including

[See main edition for text of (i) to (iii)]

(iv) other administrative and attorney's costs; plus

(C) the value, as determined by the Secretary, of any property not included in sub

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(i) In general

Except as provided in subparagraph (B), | the obligations of a borrower to the Secre tary under a restructured loan shall ter minate if

(I) the borrower satisfies the require ments 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 Secre tary 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 Sec retary under this section before Novem ber 28, 1990, unless the Secretary, before such date, determined that the borrower involved did not act in good faith with re

spect to the loan.

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tions under this paragraph, that the borrower enter into an agreement with the Secretary providing that if the borrower sells or otherwise conveys the real property used to secure such loan within 10 years after the date of such agreement, and realizes a gain on such sale or conveyance over the amount of the recovery value of the loan, then the Secretary may recapture part or all of the difference between the recovery value of the loan and the fair market value (on the date of such sale or conveyance) of the property securing the loan.

(II) Limitation on recapture amount

The agreement described in subclause (I) shall not provide for recapture of an amount that exceeds the difference between such recovery value and the outstanding balance of principal and interest owed on the loan immediately prior to the termination of any loan obligations under this paragraph.

(ii) Treatment of intrafamily transfers

For purposes of clause (i)(I), transfer of title to a property, on the death or retirement of the borrower, to a spouse or child of the borrower who is actively engaged in farming on the property shall not be treated as a sale or conveyance.

(7) Negotiation of appraisal

(A) In general

In making a determination concerning restructuring under this subsection, the Secretary, at the request of the borrower, shall enter into negotiations concerning appraisals required under this subsection with the borrower.

(B) Independent appraisal

If the borrower, based on a separate current appraisal, objects to the decision of the Secretary regarding an appraisal, the borrower and the Secretary shall mutually agree, to the extent practicable, on an independent appraiser who shall conduct another appraisal of the borrower's property. The average of the two appraisals that are closest in value shall become the final appraisal under this paragraph. The borrower and the Secretary shall each pay one-half of the cost of the independent appraisal.

[See main edition for text of (d) to (k)] (2) Partial liquidations

If partial liquidations are performed (with the prior consent of the Secretary) as part of loan servicing by a guaranteed lender under this chapter, the Secretary shall not require full liquidation of a delinquent loan in order for the lender to be eligible to receive payment on losses.

(m) Disposition of normal income security

For purposes of subsection (b)(2) of this section, and subparagraphs (A)(i) and (C)(i) of section 1985(e)(1) of this title, if a borrower

(1) disposed of normal income security prior to October 14, 1988, without the consent of the Secretary; and

(2) demonstrates that

(A) the proceeds were utilized to pay essential household and farm operating expenses; and

(B) the borrower would have been entitled to a release of income proceeds by the Secretary if the regulations in effect on November 28, 1990, had been in effect at the time of the disposition,

the Secretary shall not consider the borrower to have acted without good faith to the extent of the disposition.

(n) Only 1 write-down or net recovery buy-out per borrower for loan made after January 6, 1988 (1) In general

The Secretary may provide for any one borrower not more than 1 write-down or net recovery buy-out under this section with respect to all loans made to the borrower after January 6, 1988.

(2) Special rule

For purposes of paragraph (1), the Secretary shall treat any loan made on or before January 6, 1988, with respect to which a restructuring, write-down, or net recovery buyout is provided under this section after such date, as a loan made after such date.

(0) Liquidation of assets

The Secretary may not use the authority provided by this section to reduce or terminate any portion of the debt of the borrower that the borrower could pay through the liquidation of assets (or through the payment of the loan value of the assets, if the loan value is greater than the liquidation value) described in subsection (c)(2)(A)(ii) of this section.

(p) Lifetime limitation on debt forgiveness per bor

rower

The Secretary may provide not more than $300,000 in principal and interest forgiveness under this section per borrower.

(As amended Pub. L. 101-624, title XVIII, § 1816(a)-(d), (f)-(h), Nov. 28, 1990, 104 Stat. 3826-3828; Pub. L. 102-237, title V, § 501(h), Dec. 13, 1991, 105 Stat. 1868.)

REFERENCES IN TEXT

For definition of "this chapter", referred to in subsecs. (a), (c)(5), and (1), see note set out under section 1921 of this title.

1991-Subsec.

AMENDMENTS

(c)(6)(A)(ii). Pub. L. 102-237, § 501(h)(1), substituted "November 28, 1990" for "the date of enactment of this paragraph”.

Subsec. (m). Pub. L. 102-237, § 501(h)(2), substituted "section 1985(e)(1)" for "section 1985(e)(1)(A)".

1990-Subsec. (b)(1). Pub. L. 101-624, § 1816(a), inserted before semicolon at end ", except that the regulations shall require that, if the value of the assets calculated under subsection (c)(2)(A)(ii) of this section that may be realized through liquidation or other methods would produce enough income to make the delinquent loan current, the borrower shall not be eli

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