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gible for assistance under subsection (a) of this section".

Subsec. (c)(2)(A). Pub. L. 101-624, § 1816(b)(1), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: "the amount of the current appraised value of the property securing the loan; less". Subsec. L. 101-624, § 1816(b)(2)(A), substituted "costs; plus" for "costs." Subsec. (c)(2)(C). Pub. L. 101-624, § 1816(b)(2)(B), added subpar. (C).

(c)(2)(B)(iv).

Pub.

Subsec. (c)(3)(C). Pub. L. 101-624, § 1816(c), added subpar. (C).

Subsec. (c)(4). Pub. L. 101-624, § 1816(d), substituted "90" for "60" in introductory provisions.

Subsec. (c)(6). Pub. L. 101-624, § 1816(f), amended par. (6) generally. Prior to amendment, par. (6) read as follows: "If the value of the restructured loan is less than the recovery value and if, within 45 days after receipt of the notification described in paragraph (4)(B), the borrower pays (or obtains third-party financing to pay) the Secretary an amount equal to the recovery value, the obligations of the borrower to the Secretary under the loan shall terminate, except that the Secretary may require, as a condition of such termination of loan obligations, that the borrower enter into an agreement with the Secretary if the borrower sells or otherwise conveys the real property used to secure such loan within 2 years after the date of such agreement. Any such agreement shall provide for the recapture of part or all of the difference between the recovery value of the loan and the fair market value (on the date of such agreement) of the property securing the loan if the borrower realizes a gain on the sale or conveyance over the amount of the recovery value of the loan. In no event shall any such agreement provide for recapture of an amount that exceeds the difference between such recovery value and the fair market value of the property securing the loan on the date of such agreement."

Subsec. (c)(7). Pub. L. 101-624, § 1816(g), added par. (7).

Subsecs. (1) to (p). Pub. L. 101-624, § 1816(h), added subsecs. (1) to (p).

EFFECTIVE DATE OF 1991 AMENDMENT Amendment by Pub. L. 102-237 effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. 101-624, to which the amendment relates, see section 1101(b)(3) of Pub. L. 102-237, set out as a note under section 1421 of this title.

EFFECTIVE DATE of 1990 Amendment

Section 1861 of title XVIII of Pub. L. 101-624 provided that:

"(a) IN GENERAL.-Except as otherwise provided in this title, this title and the amendments made by this title [enacting sections 1981f and 2006a to 2006e of this title, section 2076a of Title 12, Banks and Banking, and section 494 of Title 25, Indians, amending this section, sections 1924, 1927, 1933, 1934, 1942, 1946, 1981, 1981d, 1982, 1983, 1983a, 1983b, 1985, 1991, 1997, 2003, and 5106 of this title, section 3132 of Title 5, Government Organization and Employees, sections 2019, 2075, 2077, 2218, 2252, 2254, 2277a-5, 2277a-9, 2277a-10, 2277a-14, 2278a-6, 2279aa, and 2279aa-11 of Title 12, and section 492 of Title 25, enacting provisions set out as notes under section 1981f of this title and section 2001 of Title 12, amending provisions set out as a note under section 1985 of this title, and repealing provisions set out as a note preceding section 1961 of this title] shall become effective on the date of enactment of this Act (Nov. 28, 1990].

"(b) NOTICE OF DEBT SETTLEMENT PROGRAMS.-The amendment made by section 1807(1) of this Act [amending section 1981d(b)(1) of this title] shall become effective 120 days after the date of enactment of this Act (Nov. 28, 1990).

"(c) DEBT RESTRUCTURING AND LOAN SERVICING.— "(1) IN GENERAL.-Except as provided in section 353(c)(6)(A)(ii) of the Consolidated Farm and Rural Development Act [7 U.S.C. 2001(c)(6)(A)(iii)] (as added by section 1816(f) of this Act) and in paragraph (3) of this subsection, section 1816 of this Act and the amendments made by such section 1816 [amending this section and section 1985 of this title] shall apply to new applications submitted under section 353 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001) on or after the date of enactment of this Act [Nov. 28, 1990).

“(2) DEFINITION OF NEW APPLICATION.-AS used in paragraph (1), the term 'new application' means an application submitted by a borrower to initiate a debt restructuring consideration and not an application reconsidered after an appeal or revision of the original application.

“(3) LIQUIDATION OF ASSETS.-Section 353(o) of the Consolidated Farm and Rural Development Act [7 U.S.C. 2001(o)] (as added by section 1816(h) of this Act) shall not apply until the Secretary of Agriculture has issued final regulations to carry out such section 353(o).

"(d) RESTORATION OF FIRST LIEN ON STOCK.-The amendment made by section 1833 of this Act [enacting section 2076a of Title 12 and amending section 2077 of Title 12] shall be effective as of January 7, 1988. "(e) REGULATIONS.-As soon as practicable after the date of enactment of this Act [Nov. 28, 1990)—

(1) the Secretary of Agriculture shall issue such regulations as are necessary to carry out subtitles A and C of this Act [probably means subtitles A (§§ 1801-1824) and C (§§ 1851-1854) of title XVIII of Pub. L. 101-624, enacting sections 1981f and 2006a to 2006e of this title and section 494 of Title 25, amending this section, sections 1924, 1927, 1933, 1934, 1942, 1946, 1981, 1981d, 1982, 1983, 1983a, 1983b, 1985, 1991, 1997, 2003, and 5106 of this title and section 492 of Title 25, enacting provisions set out as a note under section 1981f of this title, amending provisions set out as a note under section 1985 of this title, and repealing provisions set out as a note preceding section 1961 of this title] and the amendments made by such subtitles; and

"(2) the Farm Credit Administration shall issue such regulations as are necessary to carry out subtitle B of this Act [probably means subtitle B (§§ 1831-1843) of title XVIII of Pub. L. 101-624, enacting section 2076a of Title 12, amending section 3132 of Title 5 and sections 2019, 2075, 2077, 2218, 2252, 2254, 2277a-5, 2277a-9, 2277a-10, 2277a-14, 2278a-6, 2279aa, and 2279aa-11 of Title 12, and enacting provisions set out as a note under section 2001 of Title 12] and the amendments made by such subtitle."

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 1985, 1991, 2001a, 2005 of this title.

§ 2001a. Debt restructuring and loan servicing for community facility loans

The Secretary shall establish and implement a program that is similar to the program established under section 2001 of this title, except that the debt restructuring and loan servicing procedures shall apply to delinquent community facility program loans (rather than delinquent farmer program loans) made by the Farmers Home Administration to a hospital or health care facility under section 1926(a) of

this title.

(Pub. L. 87-128, title III, § 353A, as added Pub. L. 101-624, title XXIII, § 2384(a), Nov. 28, 1990, 104 Stat. 4050.)

REGULATIONS

Section 2384(b) of Pub. L. 101-624 provided that: "Not later than 120 days after the date of enactment of this Act [Nov. 28, 19901, the Secretary shall promulgate regulations, modeled after those promulgated under such section 353 [7 U.S.C. 20011, that implement the program established under section 353A of the Consolidated Farm and Rural Development Act [7 U.S.C. 2001a]."

§ 2003. Target participation rates

(a) Establishment

[See main edition for text of (1)]

(2) Group population

Except as provided in paragraph (3), in establishing such target rates the Secretary shall take into consideration the portion of the population of the county made up of such groups, and the availability of inventory farmland in such county.

(3) Gender

With respect to gender, target participation rates shall take into consideration the number of current and potential socially disadvantaged farmers and ranchers in a State in proportion to the total number of farmers and ranchers in the State. (b) Reservation and allocation

[See main edition for text of (1) and (2)] (3) Indian reservations

In distributing loan funds in counties within the boundaries of an Indian reservation, the Secretary shall allocate the funds on a reservation-wide basis. (c) Operating loans

(1) Establishment

The Secretary shall establish annual target participation rates, that shall ensure that socially disadvantaged farmers or ranchers will receive loans made or insured under subchapter II of this chapter. In establishing such target rates, the Secretary shall consider the number of socially disadvantaged farmers and ranchers in a State in proportion to the total number of farmers and ranchers in that State.

(2) Reservation and allocation

The Secretary shall, to the greatest extent practicable, reserve and allocate the proportion of each State's loan funds made available under subchapter II of this chapter that is equal to that State's target participation rate for use by the socially disadvantaged farmers or ranchers in that State. The Secretary shall, to the extent practicable, distribute the total so derived on a county by county basis according to the number of socially disadvantaged farmers or ranchers in the county. Any funds reserved and allocated for purposes of this paragraph, but not used shall be reallocated within such State.

(d) Report

The Secretary shall prepare and submit, to the Committee on Agriculture of the House of Representatives and the Committee on Agricul

ture, Nutrition, and Forestry of the Senate, a report that describes the annual target participation rates and the success in meeting such rates.

(e) Definitions

(1) Socially disadvantaged group

As used in this section, the term "socially disadvantaged group" means a group whose members have been subjected to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities.

(2) Socially disadvantaged farmer or rancher

As used in this section, the term "socially disadvantaged farmer or rancher" means a farmer or rancher who is a member of a socially disadvantaged group.

(As amended Pub. L. 101-624, title XVIII, § 1817, title XXV, § 2501(f), Nov. 28, 1990, 104 Stat. 3829, 4065; Pub. L. 102-554, § 21(a), (b), Oct. 28, 1992, 106 Stat. 4161.)

[blocks in formation]

Subsec. (e)(1). Pub. L. 102-554, § 21(b), substituted ", ethnic, or gener" for "or ethnic".

1990-Subsec. (b)(3). Pub. L. 101-624, § 1817, added par. (3).

Subsecs. (c), (d). Pub. L. 101-624, § 2501(f)(1)–(3), added subsec. (c), redesignated former subsec. (c) as (d), and struck out former subsec. (d) which read as follows: "As used in this section, the term 'socially disadvantaged group' means a group whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities."

Subsec. (e). Pub. L. 101-624, § 2501(f)(4), added subsec. (e).

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1994, 2279 of this title.

§ 2005. Payment of losses on guaranteed loans [See main edition for text of (a)]

(b) Administration

(1) Loss by lender

If the lender of a guaranteed farmer program loan takes any action described in section 1981(b)(4) of this title with respect to the loan and the Secretary approves such action, then, for purposes of the guarantee, the lender shall be treated as having sustained a loss equal to the amount by which

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

(2) Net present value of loan

The Secretary shall approve the taking of an action described in section 1981(b)(4) of this title by the lender of a guaranteed farmer program loan with respect to the loan if such action reduces the net present value of the loan to an amount equal to not less than the greater of—

[See main edition for text of (A) and (B), (3)] (As amended Pub. L. 101-624, title XXIII, § 2388(d)(2), Nov. 28, 1990, 104 Stat. 4053.)

AMENDMENTS

1990-Subsec. (b)(1), (2). Pub. L. 101-624 substituted "1981(b)(4)" for “1981(d)”.

§ 2006a. Borrower training (a) In general

The Secretary shall enter into contracts to provide educational training to all borrowers of farmer program direct and guaranteed loans made under this chapter in financial and farm management concepts associated with commercial farming.

(b) Contract

(1) In general

The Secretary may contract with State or private providers of farm management and credit counseling services (including a community college, the extension service of a State, a State department of agriculture, or a nonprofit organization) to carry out this section.

(2) Consultation

The Secretary may consult with the chief executive officer of a State concerning the identity of the contracting organization and the process for contracting.

(c) Eligibility for loans

(1) In general

Subject to paragraph (2), to be eligible to obtain a direct or guaranteed loan under this chapter, a borrower must obtain management assistance under this section, appropriate to the management ability of the borrower (as determined by the appropriate county committee established pursuant to section 1982 of this title, during the determination of eligibility for the loan).

(2) Loan conditions

The need of a borrower who satisfies the criteria set out in section 1922(a)(2) or 1941(a)(2) of this title for management assistance under this section shall not be cause for denial of eligibility of the borrower for a direct or guaranteed loan under this chapter. (d) Guidelines and curriculum

The Secretary shall issue regulations establishing guidelines and curriculum for the borrower training program established under this section.

(e) Payment

A borrower shall pay for training received under this section, and may use funds from operating loans made under subchapter II of this chapter to pay for the training.

(f) Waivers

The Secretary may waive the requirements of this section for an individual borrower on a determination by the county committee that the borrower demonstrates adequate knowledge in areas described in this section.

(Pub. L. 87-128, title III, § 359, as added Pub. L. 101-624, title XVIII, § 1818(a), Nov. 28, 1990, 104 Stat. 3829.)

REFERENCES IN TEXT

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

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1942, 1948, 1949, 1981, 2006b of this title.

§ 2006b. Loan assessments

(a) In general

After an applicant is determined eligible for assistance under this chapter by the appropri ate county committee established pursuant to section 1982 of this title, the Secretary shall evaluate, in accordance with regulations issued by the Secretary, the farming plan and financial situation of each qualified farmer or rancher applicant.

(b) Determinations

In evaluating the farming plan and financial situation of an applicant under this section, the Secretary shall determine

(1) the amount that the applicant will need to borrow to carry out the proposed farming plan;

(2) the rate of interest that the applicant would need to be able to cover expenses and build an adequate equity base;

(3) the goals of the proposed farming plan of the applicant;

(4) the financial viability of the plan and any changes that are necessary to make the plan viable; and

(5) whether assistance is necessary under this chapter and, if so, the amount of the assistance.

(c) Contract

The Secretary may contract with a third party (including those entities eligible to provide borrower training under section 2006a(b) of this title) to conduct loan assessments under this section.

(d) Review of loans

(1) In general

Loan assessments conducted under this section shall include biannual review of direct loans, and periodic review (as determined necessary by the Secretary) of guaranteed loans, made under this chapter to assess the progress of a borrower in meeting the goals for the farm or ranch operation. (2) Contracts

The Secretary may contract with an entity that is eligible to provide borrower training under section 2006a(b) of this title to conduct loan reviews under paragraph (1).

(3) Problem assessments

If a borrower is delinquent in payments on a direct or guaranteed loan made under this chapter, the Secretary or the contracting

entity shall determine the cause of, and action necessary to correct, the delinquency. (e) Guidelines

The Secretary shall issue regulations providing guidelines for loan assessments conducted under this section.

(Pub. L. 87-128, title III, § 360, as added Pub. L. 101-624, title XVIII, § 1819, Nov. 28, 1990, 104 Stat. 3830.)

REFERENCES IN TEXT

For definition of "this chapter", referred to in subsecs. (a), (b)(5), and (d)(1), (3), see note set out under section 1921 of this title.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1935, 1948, 1949, 1983a of this title.

§ 2006c. Supervised credit

The Secretary shall provide adequate training to employees of the Farmers Home Administration on credit analysis and financial and farm management to

(1) better acquaint the employees with what constitutes adequate financial data on which to base a direct or guaranteed loan approval decision; and

(2) ensure proper supervision of farmer program loans.

(Pub. L. 87-128, title III, § 361, as added Pub. L. 101-624, title XVIII, § 1820, Nov. 28, 1990, 104 Stat. 3830.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1948, 1949 of this title.

§ 2006d. Market placement

The Secretary shall establish a market placement program for qualified beginning farmers and ranchers and other borrowers of farmer program loans that the Secretary believes have a reasonable chance of qualifying for commercial credit with a guarantee provided under this chapter.

(Pub. L. 87-128, title III, § 362, as added Pub. L. 101-624, title XVIII, § 1821, Nov. 28, 1990, 104 Stat. 3831.)

REFERENCES IN TEXT

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

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1948, 1949, 1983a of this title.

8 2006e. Prohibition on use of loans for certain purposes

The Secretary shall not approve any loan under this chapter to drain, dredge, fill, level, or otherwise manipulate a wetland (as defined in section 3801(a)(16) of title 16), or to engage in any activity that results in impairing or reducing the flow, circulation, or reach of water, except in the case of activity related to the maintenance of previously converted wetlands, or in the case of such activity that is already commenced before November 28, 1990.

(Pub. L. 87-128, title III, § 363, as added Pub. L. 101-624, title XVIII, § 1824, Nov. 28, 1990, 104 Stat. 3831; amended Pub. L. 102-237, title V, § 501(i), Dec. 13, 1991, 105 Stat. 1868.)

REFERENCES IN TEXT

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

AMENDMENTS

1991-Pub. L. 102-237 inserted a closing parenthesis after "3801(a)(16) of title 16" and substituted "before November 28, 1990" for "prior to the date of enactment of this section".

EFFECTIVE DATE OF 1991 AMENDMENT

Amendment by Pub. L. 102-237 effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. 101-624, to which the amendment relates, see section 1101(b)(3) of Pub. L. 102-237, set out as a note under section 1421 of this title.

§ 2006f. Rural Development Administration

(a) Establishment

There is established in the Department of Agriculture the Rural Development Administration, which shall be headed by an Administrator appointed by the Secretary.

(b) Administration

Except as provided in subsection (c) of this section, or as otherwise provided in this section, the Secretary shall carry out this Act through the Farmers Home Administration.

(c) Exceptions

The Secretary shall carry out section 1923 of this title (in the case of loans made for purposes specified in paragraphs (2) and (3) of section 1923(a) of this title), section 1924(b) of this title, section 1926(a) of this title, section 1926b of this title, section 1931 of this title, section 1932 of this title, section 1942(a) of this title (in the case of loans made for the purposes specified in paragraphs (5) and (6) of section 1942(a) of this title), section 1323 of the Food Security Act of 1985 (7 U.S.C. 1932 note), title VI of the Rural Development Act of 1972, and such other rural development programs as the Secretary determines appropriate through the Rural Development Administration.

(d) References

Any reference in any law, regulation, or order in effect immediately before November 28, 1990, to the Farmers Home Administration or to the Administrator of the Farmers Home Administration or of the Farmers Home Administration relating to any function, power, or duty that is, on or after such date, a function, power, or duty of the Rural Development Administration or the Administrator of the Rural Development Administration, shall be deemed to be a reference to the Rural Development Administration or to the Administrator of the Rural Development Administration, as the case may

be.

(e) Effect on pending proceedings and parties to such proceedings

(1) Nonabatement of actions

This section does not abate any proceeding commenced

(A) by or against any entity any function of which is transferred by this section; or

(B) by or against any officer of any entity referred to in subparagraph (A) in the official capacity of such individual as such an officer.

(2) Effect on parties

If an officer of the Farmers Home Administration, in the official capacity of such officer, is a party to a proceeding pending on November 28, 1990, and under this section the officer or any function of the officer is transferred to the Rural Development Administration, Department of Agriculture, then such action shall be continued with the Secretary or the Administrator, Rural Development Administration, or other appropriate officer of the Department substituted or added as a party.

(3) Transfer of certain rights of Farmers Home Administration to Rural Development Administra

tion

The rights, interests, obligations, and duties of the Farmers Home Administration arising before November 28, 1990, from any loan made, insured, or guaranteed, or any grant or contract made, by the Farmers Home Administration in the exercise of its functions shall

(A) with respect to any function to be exercised on or after such date by the Farmers Home Administration under subsection (b) of this section, continue to be vested in the Farmers Home Administration; and

(B) with respect to any function to be exercised on or after such date by the Rural Development Administration under subsection (c) of this section, be vested in the Rural Development Administration.

(f) Compensation of Administrator

The Administrator of the Rural Development Administration shall be compensated in accordance with subchapter VIII of chapter 53 of title 5.

(g) Rural economic development

(1) In general

A borrower of a loan or loan guarantee under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) shall be eligible for assistance under all programs administered by the Rural Development Administration.

(2) Participation

The Administrator of the Rural Development Administration shall encourage and facilitate the full and equal participation of all entities to participate in programs administered by the Rural Development Administration.

(Pub. L. 87-128, title III, § 364, as added Pub. L. 101-624, title XXIII, § 2302(a)(1), Nov. 28, 1990, 104 Stat. 3979; amended Pub. L. 102-237, title

VII, § 701(d), Dec. 13, 1991, 105 Stat. 1879; Pub. L. 103-129, § 4, Nov. 1, 1993, 107 Stat. 1366.)

REFERENCES IN TEXT

This Act, referred to in subsec. (b), refers to the Agricultural Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 294, as amended. For classification of this Act to the Code, see Short Title note set out under section 1911 of this title and Tables. However, the reference was probably intended to be "this title" meaning the Consolidated Farm and Rural Development Act, title III of Pub. L. 87-128, as amended, which is classified principally to this chapter. For classification of this title to the Code, see Short Title note set out under section 1921 of this title and Tables.

Section 1323 of the Food Security Act of 1985 [Pub. L. 99-198], referred to in subsec. (c), is set out as a note under section 1932 of this title.

The Rural Development Act of 1972, referred to in subsec. (c), is Pub. L. 92-419, Aug. 30, 1972, 86 Stat. 657, as amended. Title VI of the Act enacted sections 2204a and 2212a of this title, amended sections 1006a, 2201, 2204, 2204b of this title, section 5315 of Title 5, Government Organization and Employees, sections 590g, 590h, and 5900 of Title 16, Conservation, and section 3122 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title of 1972 Amendment note set out under section 1921 of this title and Tables.

The Rural Electrification Act of 1936, referred to in subsec. (g)(1), is act May 20, 1936, ch. 432, 49 Stat. 1363, as amended, which is classified generally to chapter 31 (§ 901 et seq.) of this title. For complete classification of this Act to the Code, see section 901 of this title and Tables.

AMENDMENTS

1993-Subsec. (g). Pub. L. 103-129 added subsec. (g). 1991-Subsec. (e)(2). Pub. L. 102-237, § 701(d)(1), substituted "November 28, 1990" for "the date of enactment of this section".

Subsec. (e)(3). Pub. L. 102-237, § 701(d)(2), substituted "November 28, 1990," for "the date of enactment of this section".

EFFECTIVE DATE OF 1991 Amendment Amendment by Pub. L. 102-237 effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. 101-624, to which the amendment relates, see section 1101(b)(6) of Pub. L. 102-237, set out as a note under section 1421 of this title.

REGULATIONS

Except as provided in sections 902(b) and 2008e of this title, not later than 45 days after Nov. 1, 1993, interim final regulations to be issued by Rural Development Administration to carry out amendments made by Pub. L. 103-129 to programs administered by Administrator, and by Secretary of Agriculture to carry out amendments made by Pub. L. 103-129 to programs administered by Farmers Home Administration, see section 6 of Pub. L. 103-129, set out as a note under section 901 of this title.

TRANSFER OF FUNCTIONS

Section 2302(b) of Pub. L. 101-624, as amended by Pub. L. 102-237, title VII, § 702(a), Dec. 13, 1991, 105 Stat. 1880, provided that:

"(1) Notwithstanding the provisions of section 331 of the Consolidated Farm and Rural Development Act [7 U.S.C. 19811, as soon as practicable, but in no case later than 180 days after November 28, 1990, the Secretary shall transfer to the Rural Development Administration the powers, duties, and assets of the agencies, offices, and other entities in the Department of Agriculture, or elements thereof, related to the per

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