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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, 1990), the Secretary shall promul. gate regulations, modeled after those promulgated under such section 353 [7 U.S.C. 2001), that implement the program established under section 353A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2001a)."

8 2003. Target participation rates (a) Establishment

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 so

cially 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.)

(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 reallo

cated 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

AMENDMENTS 1992–Subsec. (a)(2). Pub. L. 102-554, $ 21(a)(1), substituted "Except as provided in paragraph (3), in establishing" for "In establishing".

Subsec. (a)(3). Pub. L. 102-554, § 21(a)(2), added par. (3).

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 à 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.

8 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

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[See main edition for text of (A) and (B), (3)] (Pub. L. 87-128, title III, $ 359, as added Pub. L. (As amended Pub. L. 101-624, title XXIII,

101-624, title XVIII, § 1818(a), Nov. 28, 1990, § 2388(d)(2), Nov. 28, 1990, 104 Stat. 4053.)

104 Stat. 3829.) AMENDMENTS

REFERENCES IN TEXT 1990–Subsec. (b)(1), (2). Pub. L. 101-624 substituted

For definition of “this chapter", referred to in sub“1981(b)(4)" for "1981(d)".

secs. (a) and (c), see note set out under section 1921 of

this title. 8 2006a. Borrower training

SECTION REFERRED TO IN OTHER SECTIONS (a) In general

This section is referred to in sections 1942, 1948, The Secretary shall enter into contracts to 1949, 1981, 2006b of this title. provide educational training to all borrowers of farmer program direct and guaranteed loans

8 2006b. Loan assessments made under this chapter in financial and farm management concepts associated with commer

(a) In general cial farming.

After an applicant is determined eligible for (b) Contract

assistance under this chapter by the appropri

ate county committee established pursuant (1) In general

section 1982 of this title, the Secretary shall The Secretary may contract with State or evaluate, in accordance with regulations issued private providers of farm management and by the Secretary, the farming plan and financredit counseling services (including a com- cial situation of each qualified farmer or ranchmunity college, the extension service of a er applicant. State, a State department of agriculture, or a nonprofit organization) to carry out this sec

(b) Determinations tion.

In evaluating the farming plan and financial

situation of an applicant under this section, the (2) Consultation

Secretary shall determineThe Secretary may consult with the chief

(1) the amount that the applicant will need executive officer of a State concerning the

to borrow to carry out the proposed farming identity of the contracting organization and

plan; the process for contracting.

(2) the rate of interest that the applicant (c) Eligibility for loans

would need to be able to cover expenses and

build an adequate equity base; (1) In general

(3) the goals of the proposed farming plan Subject to paragraph (2), to be eligible to

of the applicant; obtain a direct or guaranteed loan under this

(4) the financial viability of the plan and chapter, a borrower must obtain management

any changes that are necessary to make the assistance under this section, appropriate to

plan viable; and the management ability of the borrower (as

(5) whether assistance is necessary under determined by the appropriate county com

this chapter and, if so, the amount of the asmittee established pursuant to section 1982 of

sistance. this title, during the determination of eligibility for the loan).

(c) Contract (2) Loan conditions

The Secretary may contract with a third
The need of a borrower who satisfies the

party (including those entities eligible to procriteria set out in section 1922(a)(2) or

vide borrower training under section 2006a(b)

of this title) to conduct loan assessments under 1941(a)(2) of this title for management assist

this section, ance under this section shall not be cause for denial of eligibility of the borrower for a

(d) Review of loans direct or guaranteed loan under this chapter.

(1) In general (d) Guidelines and curriculum

Loan assessments conducted under this sec The Secretary shall issue regulations estab

tion shall include biannual review of direct lishing guidelines and curriculum for the bor

loans, and periodic review (as determined netrower training program established under this

essary by the Secretary) of guaranteed loans

, section.

made under this chapter to assess the (e) Payment

progress of a borrower in meeting the goals

for the farm or ranch operation. A borrower shall pay for training received under this section, and may use funds from op- (2) Contracts erating loans made under subchapter II of this The Secretary may contract with an entity chapter to pay for the training.

that is eligible to provide borrower training (f) Waivers

under section 2006a(b) of this title to conduct The Secretary may waive the requirements of

loan reviews under paragraph (1). this section for an individual borrower on a de- (3) Problem assessments termination by the county committee that the

If a borrower is delinquent in payments on borrower demonstrates adequate knowledge in

a direct or guaranteed loan made under this areas described in this section.

chapter, the Secretary or the contracting

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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.

8 2006f. Rural Development Administration

8 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.)

(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.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 1948, 1949 of this title.

8 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.

(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.

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

poses 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.

8 2006f

TITLE 7-AGRICULTURE

Page 802

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

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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 (8 901 et seq.) of this title. For complete classification of this Act to the Code, see section 901 of this title and Tables.

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(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 Ad.

ministration 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. (8) 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 Administra

tion. (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

OPE

AMENDMENTS 1993-Subsec. (g). Pub. L. 103-129 added subsec. (g).

1991-Subsec. (eX(2). Pub. L. 102-237, $701(dX1), 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".

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EFFECTIVE DATE OF 1991 AMENDMENT Amendment by Pub. L. 102-237 effective as if included in the provision of the Food, Agriculture, Conserva. tion, 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.

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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.

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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 17 U.S.C. 1981), 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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formance of rural development functions, including,
but not limited to, the agencies, offices, and other en-
tities in the Department of Agriculture, or elements
thereof, that administer sections 303 [7 U.S.C. 1923)
(in the case of loans made for purposes specified in
paragraphs (2) and (3) of subsection (a) of section
303), 304(b), 306(a), 306B, 310A, 310B, and section
312(a) 17 U.S.C. 1924(b), 1926(a), 1926b, 1931, 1932,
and 1942(a)) (in the case of loans made for the pur.
poses specified in paragraphs (5) and (6) of section
312(a) 17 U.S.C. 1942(a)]) of the Consolidated Farm
and Rural Development Act, section 1323 of the Food
Security Act of 1985 (7 U.S.C. 1932 note), title VI of
the Rural Development Act of 1972 (see References in
Text note above), and such other rural development
programs as the Secretary determines appropriate.

(2) INCIDENTAL TRANSFERS.- -The Secretary shall
make such determinations, and shall transfer such
personnel from the Farmers Home Administration, as
may be necessary or appropriate with regard to the
functions transferred to the Rural Development Ad-
ministration under this section or the amendments
made by this section (enacting this section and amend-
ing section 1929 of this title). The Secretary shall also
make such additional incidental dispositions of person-
nel, assets, liabilities, contracts, property, records, and
unexpended balances of appropriations, authoriza-
tions, allocations, and other funds held, used, arising
from, available, or to be made available in connection
with the functions transferred by this section or the
amendments made by this section, as the Secretary
may deem necessary to accomplish the purposes of
this section.

"(3) EFFECTIVE AND EFFICIENT TRANSFER OF AUTHOR-
ITY.–The Administrator of the Farmers Home Admin-
istration and the Secretary shall take whatever steps
are necessary to assure the effective and efficient
transfer of authority as provided for in this section."

(b) Selection of States
(1) Rural investment partnerships

The Secretary shall select not more than 5
States to which to make sections 2007a to
2007e of this title applicable during any par-
ticular period, to the extent of qualifying ap-
plications therefor.
(2) Rural economic development review panels

The Secretary shall select not more than 5
States to which to make sections 2008 and
2008a of this title applicable during any par-
ticular period, to the extent of qualifying ap-

plications therefor.
(c) Duration of projects
(1) Rural investment partnerships

Sections 2007a to 2007e of this title shall
apply to any State selected by the Secretary
under subsection (b)(1) of this section until
September 30, 1996.
(2) Rural economic development review panels

Chapter 3 shall apply to any State selected
by the Secretary under subsection (b)(2) of

this section until September 30, 1996.
(d) Effective date

Sections 2007a to 2007e of this title and sec-
tions 2008, 2008a, 2008b, and 2008c(b) of this
title shall take effect on October 1, 1991.
(Pub. L. 101-624, title XXIII, § 2310, Nov. 28,
1990, 104 Stat. 3982.)

OPERATION OF REGIONAL OFFICES AFTER APRIL 1, 1994

Pub. L. 103-111, title VII, 8 722, Oct. 21, 1993, 107
Stat. 1080, provided that: “Notwithstanding any other
provision of this Act (see Tables for classification),
none of the funds in this Act may be used to operate
the seven regional offices of the Rural Development
Administration after April 1, 1994."

REFERENCES IN TEXT
Chapter 3, referred to in subsec. (c)(2), is chapter 3
(sections 2316 and 2317) of subtitle B of title XXIII of
Pub. L. 101-624, Nov. 28, 1990, 104 Stat. 4000, which
enacted sections 2008 to 2008c of this title and amend-
ed section 1926 of this title. For complete classification
of this chapter to the Code, see Tables.

CODIFICATION

Section was enacted as part of the Rural Economic
Development Act of 1990, and also as part of the Food,
Agriculture, Conservation, and Trade Act of 1990, and
not as part of the Consolidated Farm and Rural Devel-
opment Act which comprises this chapter.

ESTABLISHMENT OF RURAL DEVELOPMENT

ADMINISTRATION
Pub. L. 102-237, title X, $ 1010, Dec. 13, 1991, 105
Stat. 1898, provided that: “Notwithstanding any other
provision of law, the Secretary of Agriculture is direct-
ed immediately to implement the establishment
within the Department of Agriculture of the Rural
Development Administration established by subtitle A
of title XXIII of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 2006f et seq.) and the
amendments made by such subtitle (subtitle A
(88 2302, 2303) of title XXIII of Pub. L. 101-624, enact-
ing this section, amending sections 1929, 1981, 1981a,
1985, and 1988 of this title, sections 657, 658, 1006, and
1014 of Title 18, Crimes and Criminal Procedure, and
sections 9812 and 9817 of Title 42, The Public Health
and Welfare, and enacting provisions set out above)."

PRESERVATION OF ELIGIBILITY FOR CREDIT ASSISTANCE

UNDER FEDERAL LAW
Section 2395 of title XXIII of Pub. L. 101-624 pro-
vided that: “Notwithstanding any other provision of
law, this title (see Short Title of 1990 Amendment
note set out under section 1921 of this title) shall not
be construed to adversely affect the eligibility, as it
existed on the date of enactment of this Act (Nov. 28,
1990), of cooperatives and other entities for any other
credit assistance under Federal law.”

8 2007. General provisions

(a) Application for participation

If a State desires to participate in the pro-
gram established in sections 2007a to 2007e of
this title or the program established in sections
2008 and 2008a of this title, the Governor of
the State may submit to the Secretary of Agri-
culture (in this section referred to as the “Sec-
retary") an application therefor.

REGULATIONS
Section 2396 of title XXIII of Pub. L. 101-624 pro-
vided that: “Except as otherwise provided in this title
(see Short Title of 1990 Amendment note set out
under section 1921 of this title), no later than 180 days
after the date of the enactment of this Act (Nov. 28,
1990), the Secretary shall promulgate such regulations
as may be necessary to carry out this title and the
amendments made by this title."

SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 2007a, 2007c,
2008 of this title.

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