I

104TH CONGRESS

1ST SESSION H. R. 2590

To better target loans to family farmers and income-producing activities,

to provide for the improved management of the portfolio of loans made

under the Consolidated Farm and Rural Development Act, to assure

the prompt repayment of such loans, and to consolidate Federal rural

development programs into a single program of capitalization grants

to States for rural development, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 7, 1995

Mr. ALLARD (for himself and Mr. ROBERTS) introduced the following bill;

which was referred to the Committee on Agriculture

A BILL

To better target loans to family farmers and income-producing activities, to provide for the improved management

of the portfolio of loans made under the Consolidated

Farm and Rural Development Act, to assure the prompt

repayment of such loans, and to consolidate Federal

rural development programs into a single program of

capitalization grants to States for rural development,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION. 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Farm Credit and Rural Development Reform Act of

4 1995’’.

5 (b) TABLE OF CONTENTS.—The table of contents of

6 this Act is as follows:

Sec. 1. Short title; table of contents.

Subtitle A—Agricultural Credit

CHAPTER 1—AMENDMENTS TO THE CONSOLIDATED FARM AND

RURAL DEVELOPMENT ACT

Sec. 101. References.

Sec. 102. Redirection of resources to family farmers.

Sec. 103. Redirection of resources to income-producing activities.

Sec. 104. Improvement of loan portfolio management.

Sec. 105. Assuring prompt repayment of loans.

Sec. 106. Modification of programs for beginning farmers.

Sec. 107. Elimination of target participation rates.

Sec. 108. Miscellaneous and conforming amendments.

CHAPTER 2—AMENDMENTS TO THE FARM CREDIT ACT OF 1971

Sec. 151. References.

Sec. 152. Repeal of requirements relating to review of decisions to deny or reduce the amount of a loan.

Sec. 153. Prohibition against restructuring of restructured loans or loans involved in bankruptcy proceedings.

Sec. 154. Repeal of rules governing effect of restructuring on borrower stock.

Sec. 155. Repeal of rules governing review of restructuring denials.

Sec. 156. Elimination of certain requirements relating to loans placed in

nonaccrual status.

Sec. 157. Limitations on the right of first refusal.

Subtitle B—Rural Development

Sec. 201. Capitalization grants to States for rural development.

Sec. 202. Elimination of other rural development programs.

Sec. 203. Conforming amendments.

Sec. 204. Savings provision.

Sec. 205. Effective date.
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1 Subtitle A—Agricultural Credit

2 CHAPTER 1—AMENDMENTS TO THE CON3 SOLIDATED FARM AND RURAL DEVEL4 OPMENT ACT

5 SEC. 101. REFERENCES.

6 Except as otherwise expressly provided, wherever in

7 this chapter an amendment or repeal is expressed in terms

8 of an amendment to, or repeal of, a section or other provi9 sion, the reference shall be considered to be made to a

10 section or other provision of the Consolidated Farm and

11 Rural Development Act.

12 SEC. 102. REDIRECTION OF RESOURCES TO FAMILY FARM13 ERS.

14 (a) OWNERSHIP LOANS.—

15 (1) TARGETING TO FAMILY FARMERS.—

16 (A) IN GENERAL.—Section 302(a) (7

17 U.S.C. 1922(a)) is amended to read as follows:

18 ‘‘(a)(1) The Secretary may make loans under this

19 subtitle to any eligible applicant for such a loan.

20 ‘‘(2) For purposes of paragraph (1), an individual

21 who has applied for a loan under this subtitle is an eligible

22 applicant if the individual—

23 ‘‘(A) is a citizen of the United States;

24 ‘‘(B) has training or farming experience that

25 the Secretary determines is sufficient to assure rea-
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1 sonable prospects of success in the proposed farming

2 operation;

3 ‘‘(C) is or will become an owner-operator of a

4 not larger than family farm in the United States;

5 and

6 ‘‘(D) is unable to obtain sufficient credit else7 where to finance the needs of the individual relating

8 to the proposed farming operation at reasonable

9 rates and terms, taking into consideration prevailing

10 private and cooperative rates and terms in the com11 munity in or near which the individual resides for

12 loans for similar purposes and periods of time.

13 ‘‘(3) For purposes of paragraph (1), a person (other

14 than an individual) who has applied for a loan under this

15 subtitle is an eligible applicant if—

16 ‘‘(A) the person—

17 ‘‘(i) is controlled by farmers and ranchers;

18 ‘‘(ii) is engaged primarily and directly in

19 farming or ranching in the United States;

20 ‘‘(iii) is or will become an owner-operator

21 of a not larger than family farm; and

22 ‘‘(iv) is unable to obtain sufficient credit

23 elsewhere to finance the needs of the person re24 lating to the proposed farming operation at rea25 sonable rates and terms, taking into consider-
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1 ation prevailing private and cooperative rates

2 and terms in the community in or near which

3 the person is located for loans for similar pur4 poses and periods of time; and

5 ‘‘(B) each individual who has greater than a 5

6 percent ownership interest in the person meets the

7 requirements of paragraph (2).

8 ‘‘(4) As used in this subsection, the term ‘person’

9 means an individual, a corporation, a partnership, a joint

10 venture, or any combination thereof.’’.

11 (B) CONFORMING AMENDMENTS.—

12 (i) Section 304(b) (7 U.S.C. 1924(b))

13 is amended by striking ‘‘clauses (2) and

14 (3) of section 302’’ and inserting ‘‘sub15 paragraphs (B) and (C) of section

16 302(a)(2)’’.

17 (ii) Section 310D(a) (7 U.S.C.

18 1934(a)) is amended by striking ‘‘para19 graphs (2) through (4) of section 302’’ and

20 inserting ‘‘subparagraphs (B), (C), and

21 (D) of section 302(a)(2)’’.

22 (iii) Section 359(c)(2) (7 U.S.C.

23 2006a(c)(2)) is amended by striking

24 ‘‘302(a)(2)’’ and inserting ‘‘302(a)(2)(B)’’.
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1 (2) ELIMINATION OF LOANS FOR REC2 REATIONAL USES AND FACILITIES.—

3 (A) IN GENERAL.—Section 303(a) (7

4 U.S.C. 1923(a)) is amended by striking clause

5 (2) and redesignating clauses (3), (4), and (5)

6 as clauses (2), (3), and (4), respectively.

7 (B) CONFORMING AMENDMENTS.—Section

8 307(a)(6)(B) (7 U.S.C. 1927(a)(6)(B)) is

9 amended in each of clauses (i) and (vii) by

10 striking ‘‘clauses (2) and (3) of section 303(a)’’

11 and inserting ‘‘section 303(a)(2)’’.

12 (3) REFINANCING LIMITED TO LOANS RELATED

13 TO FARM OPERATIONS.—Section 303(a)(3) (7

14 U.S.C. 1923(a)(3)), as so redesignated by paragraph

15 (2)(A) of this subsection, is amended by inserting

16 ‘‘with respect to farming, ranching, or aquaculture

17 operations if such refinancing enhances significantly

18 the likelihood of repayment of such indebtedness’’

19 before the comma.

20 (b) OPERATING LOANS.—

21 (1) TARGETING TO FAMILY FARMERS.—

22 (A) IN GENERAL.—Section 311(a) (7

23 U.S.C. 1941(a)) is amended to read as follows:

24 ‘‘(a)(1) The Secretary may make loans under this

25 subtitle to any eligible applicant for such a loan.
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1 ‘‘(2) For purposes of paragraph (1), an individual

2 who has applied for a loan under this subtitle is an eligible

3 applicant if the individual—

4 ‘‘(A) is a citizen of the United States;

5 ‘‘(B) has training or farming experience that

6 the Secretary determines is sufficient to assure rea7 sonable prospects of success in the proposed farming

8 operation;

9 ‘‘(C) is or will become an operator of a not

10 larger than family farm in the United States; and

11 ‘‘(D) is unable to obtain sufficient credit else12 where to finance the needs of the individual relating

13 to the farming operation at reasonable rates and

14 terms, taking into consideration prevailing private

15 and cooperative rates and terms in the community

16 in or near which the individual resides for loans for

17 similar purposes and periods of time.

18 ‘‘(3) For purposes of paragraph (1), a person (other

19 than an individual) who has applied for a loan under this

20 subtitle is an eligible applicant if—

21 ‘‘(A) the person—

22 ‘‘(i) is controlled by farmers and ranchers;

23 ‘‘(ii) is engaged primarily and directly in

24 farming or ranching in the United States;
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1 ‘‘(iii) is or will become an owner-operator

2 of a not larger than family farm; and

3 ‘‘(iv) is unable to obtain sufficient credit

4 elsewhere to finance the needs of the person re5 lating to the proposed farming operation at rea6 sonable rates and terms, taking into consider7 ation prevailing private and cooperative rates

8 and terms in the community in or near which

9 the person is located for loans for similar pur10 poses and periods of time; and

11 ‘‘(B) each individual who has greater than a 5

12 percent ownership interest in the person meets the

13 requirements of paragraph (2).

14 ‘‘(4) As used in this subsection, the term ‘person’

15 means an individual, a corporation, a partnership, a joint

16 venture, or any combination thereof.’’.

17 (B) CONFORMING AMENDMENTS.—

18 (i) Section 312(a)(5) (7 U.S.C.

19 1924(a)(5)) is amended by striking ‘‘sec20 tion 311 (2) and (3)’’ and inserting ‘‘sub21 paragraphs (B) and (C) of section

22 311(a)(2)’’.

23 (ii) Section 312(b) (7 U.S.C. 1924(b))

24 is amended by striking ‘‘clauses (2) and

25 (3) of section 311(a)’’ and inserting ‘‘sub-
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1 paragraphs (B) and (C) of section

2 311(a)(2)’’.

3 (iii) Section 359(c)(2) (7 U.S.C.

4 2006a(c)(2)) is amended by striking

5 ‘‘311(a)(2)’’ and inserting ‘‘311(a)(2)(B)’’.

6 (2) REFINANCING LIMITED TO LOANS RELATED

7 TO FARM OPERATIONS.—Section 312(a)(7) (7

8 U.S.C. 1942(a)(7)) is amended by inserting ‘‘with

9 respect to farming, ranching, or aquaculture oper10 ations if such refinancing enhances significantly the

11 likelihood of repayment of such indebtedness’’ before

12 the comma.

13 (3) ELIMINATION OF LOANS FOR OSHA COMPLI14 ANCE.—Section 312(a) (7 U.S.C. 1942(a)) is

15 amended by striking clause (10) and redesignating

16 clauses (11), (12), and (13) as clauses (10), (11),

17 and (12), respectively.

18 (c) EMERGENCY LOANS.—

19 (1) TARGETING TO FAMILY FARMERS.—Section

20 321(a) (7 U.S.C. 1961(a)) is amended to read as

21 follows:

22 ‘‘(a)(1) The Secretary shall make loans under this

23 subtitle to any eligible applicant for such a loan.
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1 ‘‘(2) For purposes of paragraph (1), an individual

2 who has applied for a loan under this subtitle is an eligible

3 applicant if—

4 ‘‘(A) the individual—

5 ‘‘(i) is a citizen of the United States;

6 ‘‘(ii) has training or farming experience

7 that the Secretary determines is sufficient to

8 assure reasonable prospects of success in the

9 proposed farming operation;

10 ‘‘(iii) is or will become an owner-operator

11 (in the case of loans for a purpose under sub12 title A) or operator (in the case of loans for a

13 purpose under subtitle B) of a not larger than

14 family farm in the United States; and

15 ‘‘(iv) is unable to obtain sufficient credit

16 elsewhere to finance the needs of the individual

17 relating to the proposed farming operation at

18 reasonable rates and terms, taking into consid19 eration prevailing private and cooperative rates

20 and terms in the community in or near which

21 the individual resides for loans for similar pur22 poses and periods of time; and

23 ‘‘(B) the Secretary finds that the farming,

24 ranching, or aquaculture operations of the individual

25 have been substantially affected by—
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1 ‘‘(i) a natural disaster in the United

2 States; or

3 ‘‘(ii) a major disaster or emergency des4 ignated by the President under the Disaster Re5 lief and Emergency Assistance Act.

6 ‘‘(3) For purposes of paragraph (1), a person (other

7 than an individual) who has applied for a loan under this

8 subtitle is an eligible applicant if—

9 ‘‘(A) the person—

10 ‘‘(i) is controlled by farmers, ranchers, and

11 persons engaged in aquaculture;

12 ‘‘(ii) is primarily engaged in farming,

13 ranching, or aquaculture in the United States;

14 ‘‘(iii) is or will become an owner-operator

15 (in the case of loans for a purpose under sub16 title A) or operator (in the case of loans for a

17 purpose under subtitle B) of a not larger than

18 family farm in the United States; and

19 ‘‘(iv) is unable to obtain sufficient credit

20 elsewhere to finance the needs of the person re21 lating to the proposed farming operation at rea22 sonable rates and terms, taking into consider23 ation prevailing private and cooperative rates

24 and terms in the community in or near which
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1 the person is located for loans for similar pur2 poses and periods of time;

3 ‘‘(B) each individual who has greater than a 5

4 percent ownership interest in the person meets the

5 requirements of paragraph (2)(A); and

6 ‘‘(C) the Secretary finds that the farming,

7 ranching, or aquaculture operations of the person

8 have been substantially affected by—

9 ‘‘(i) a natural disaster in the United

10 States; or

11 ‘‘(ii) a major disaster or emergency des12 ignated by the President under the Disaster Re13 lief and Emergency Assistance Act.

14 ‘‘(4)(A) The Secretary shall accept applications from,

15 and make loans pursuant to this subtitle to, applicants

16 otherwise eligible for such a loan, that conduct farming,

17 ranching, or aquaculture operations in any county contig18 uous to a county where the Secretary has found that farm19 ing, ranching, or aquaculture operations have been sub20 stantially affected by—

21 ‘‘(i) a natural disaster in the United States; or

22 ‘‘(ii) a major disaster or emergency designated

23 by the President under the Disaster Relief and

24 Emergency Assistance Act.
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1 ‘‘(B) The Secretary shall accept applications for as2 sistance under this subtitle from applicants affected by a

3 natural disaster at any time during the 8-month period

4 beginning on—

5 ‘‘(i) the date on which the Secretary determines

6 that farming, ranching, or aquaculture operations

7 have been substantially affected by the natural dis8 aster; or

9 ‘‘(ii) the date on which the President makes the

10 major disaster or emergency designation with re11 spect to the natural disaster.

12 ‘‘(5) The authority provided by this subsection shall

13 be effective only to the extent or in such amounts as are

14 provided in advance in appropriations Acts.

15 ‘‘(6) As used in this subsection, the term ‘person’

16 means an individual, a corporation, a partnership, a joint

17 venture, or any combination thereof.’’.

18 (2) CONFORMING AMENDMENT.—Section 329

19 (7 U.S.C. 1970) is amended by striking ‘‘a single

20 enterprise which constitutes a basic part of’’.

21 SEC. 103. REDIRECTION OF RESOURCES TO INCOME-PRO22 DUCING ACTIVITIES.

23 (a) ELIMINATION OF OWNERSHIP LOANS FOR THE

24 ACQUISITION, INSTALLATION, OR MODIFICATION OF

25 QUALIFIED NON-FOSSIL ENERGY SYSTEMS.—
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1 (1) IN GENERAL.—Section 303 (7 U.S.C. 1923)

2 is amended—

3 (A) by striking ‘‘(a)’’; and

4 (B) by striking subsection (b).

5 (2) CONFORMING AMENDMENTS.—Section

6 307(a)(6)(B) (7 U.S.C. 1927(a)(6)(B)), as amended

7 by section 102(a)(2)(B) of this Act, is amended in

8 each of clauses (i) and (vii) by striking ‘‘section

9 303(a)(2)’’ and inserting ‘‘section 303(2)’’.

10 (b) ELIMINATING OF OWNERSHIP LOANS FOR THE

11 CONSTRUCTION OF CONSERVATION STRUCTURES OR

12 NON-INCOME-PRODUCING CONSERVATION PRACTICES.—

13 Section 304 (7 U.S.C. 1924) is amended—

14 (1) by striking subsection (a) and inserting

15 ‘‘(a)(1) Loans may be made to farm owners or ten16 ants who are eligible borrowers under this subtitle

17 for—

18 ‘‘(A) the establishment of forest cover for sus19 tained yield timber management;

20 ‘‘(B) the establishment of permanent pasture;

21 or

22 ‘‘(C) the construction of environmental struc23 tures or systems required by Federal statute.

24 ‘‘(2) The Secretary shall not make a loan under this

25 section that exceeds the lesser of—
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1 ‘‘(A) the value of the farm or other security for

2 such loan; or

3 ‘‘(B) $50,000.’’; and

4 (2) by striking subsection (c).

5 (c) ELIMINATION OF OPERATING LOANS FOR THE

6 DEVELOPMENT AND CONSTRUCTION OF SOLAR ENERGY

7 SYSTEMS.—Section 312(a) (7 U.S.C. 1942(a)), as amend8 ed by section 102(b)(3) of this Act, is amended—

9 (1) by striking clause (10) and redesignating

10 clauses (11) and (12) as clauses (10) and (11), re11 spectively; and

12 (2) by striking the 2nd sentence.

13 (d) ELIMINATION OF AUTHORITY TO ACQUIRE EASE14 MENTS FOR CONSERVATION, RECREATIONAL, OR WILD15 LIFE PURPOSES.—Section 349 (7 U.S.C. 1997) is re16 pealed.

17 (e) CONFORMING AMENDMENTS.—Section 335 (7

18 U.S.C. 1985) is amended—

19 (1) in subsection (c)(1)—

20 (A) by striking ‘‘, other than easements ac21 quired under section 349’’; and

22 (B) by striking the last sentence and in23 serting ‘‘Notwithstanding the preceding sen24 tence, the Secretary may grant or sell an ease25 ment, restriction, development rights, or the
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1 equivalent thereof, to a unit of local or State

2 government or a private nonprofit organization

3 for conservation purposes at its fair market

4 value.’’;

5 (2) in subsection (e)(7), by striking ‘‘sale or’’;

6 and

7 (3) by striking subsection (g).

8 SEC. 104. IMPROVEMENT OF LOAN PORTFOLIO MANAGE9 MENT.

10 (a) EXPANSION OF AUTHORITY TO REQUIRE ADDI11 TIONAL COLLATERAL TO SECURE A FARMER PROGRAM

12 LOAN.—Section 307(e)(1) (7 U.S.C. 1927(e)(1)) is

13 amended by striking ‘‘, if the borrower is current in the

14 payment of principal and interest on the loan’’ and insert15 ing ‘‘unless the fair market value of the collateral securing

16 the loan is less than 80 percent of the total of the principal

17 and any unpaid accrued interest on the loan’’.

18 (b) LINKING OF EMERGENCY LOANS FOR CROP OR

19 LIVESTOCK CHANGES TO NATURAL DISASTERS.—Section

20 323 (7 U.S.C. 1963) is amended by inserting ‘‘which are

21 necessitated by a natural disaster, major disaster, or

22 emergency and which are’’ after ‘‘livestock changes’’.

23 (c) ESTABLISHMENT OF DATE CERTAIN FOR EMER24 GENCY LOAN ASSET VALUATION.—Section 324(d) (7

25 U.S.C. 1962(d)) is amended in the last sentence by strik-
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1 ing all that follows ‘‘shall’’ and inserting ‘‘establish the

2 value of the assets as of the day before the occurrence

3 of the natural disaster, major disaster, or emergency

4 which gave rise to the request for assistance under this

5 subtitle or under the Disaster Relief and Emergency As6 sistance Act.’’.

7 (d) CREATION OF MEASURABLE STANDARD FOR DE8 FERRAL OF LOAN PRINCIPAL AND FOREGOING FORE9 CLOSURE.—Section 331A (7 U.S.C. 1981a) is amended

10 to read as follows:

11 ‘‘SEC. 331A. ADDITIONAL AUTHORITY TO DEFER PRINCIPAL

12 PAYMENTS AND FOREGO FORECLOSURE.

13 ‘‘In addition to any other authority that the Secretary

14 may have to defer principal and forego foreclosure, the

15 Secretary may, at the request of the borrower, permit the

16 deferral of principal only on any outstanding loan made,

17 insured, or held by the Secretary under this title or under

18 any other law administered by the Consolidated Farm

19 Services Agency, and may forego foreclosure on any such

20 loan for such period as the Secretary deems necessary,

21 upon a showing by the borrower that—

22 ‘‘(1) due to circumstances beyond the borrow23 er’s control that could not have been anticipated by

24 the borrower, the borrower is temporarily unable to

25 continue making payments of such principal when
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1 due without using funds needed to provide for the

2 basic family needs of the borrower and the imme3 diate family of the borrower; and

4 ‘‘(2) the borrower has the ability to continue

5 making interest payments on such loan when due

6 throughout the anticipated deferral period.’’.

7 (e) ELIMINATION OF NOTIFICATION OF LOAN SERV8 ICING PROGRAMS.—

9 (1) IN GENERAL.—Section 331D (7 U.S.C.

10 1981d) is repealed.

11 (2) CONFORMING AMENDMENT.—Section

12 343(b) (7 U.S.C. 1991(b)) is amended by striking

13 ‘‘331D,’’.

14 (f) PROVIDING AN ANNUAL REVIEW OF THE CREDIT

15 HISTORY, BUSINESS OPERATION AND CONTINUED ELIGI16 BILITY OF A BORROWER.—

17 (1) IN GENERAL.—Section 333 (7 U.S.C. 1983)

18 is amended by redesignating paragraphs (2), (3),

19 and (4) as paragraphs (3), (4), and (5), respectively,

20 and by inserting after paragraph (1) the following:

21 ‘‘(2) the county or area committee, as appro22 priate, under section 8(b) of the Soil Conservation

23 and Domestic Allotment Act (16 U.S.C. 590h(b)) to

24 certify in writing that it has performed an annual

25 review of the credit history and business operation
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1 of a borrower (other than a borrower under section

2 306, 310B, or 314), and its opinion as to the contin3 ued eligibility of that borrower for such a loan;’’.

4 (2) CONFORMING AMENDMENT.—Section

5 310B(a) (7 U.S.C. 1932(a)) is amended in the 3rd

6 sentence by striking ‘‘(3)’’ and inserting ‘‘(4)’’.

7 (g) ELIMINATION OF THE SALES RESTRICTIONS ON

8 INVENTORY PROPERTY.—

9 (1) IN GENERAL.—Section 335 (7 U.S.C.

10 1985), as amended by sections 103(e)(2) and

11 108(f)(33) of this Act, is amended—

12 (A) in subsection (b), by striking ‘‘Except

13 as provided in subsection (e), real’’ and insert14 ing ‘‘Real’’;

15 (B) in subsection (c)—

16 (i) by striking ‘‘(1) Except as pro17 vided in subsection (e), the’’ and inserting

18 ‘‘The’’;

19 (ii) by striking the 2nd sentence; and

20 (iii) by striking paragraph (2); and

21 (C) by striking subsections (e) and (f).

22 (2) CONFORMING AMENDMENTS.—

23 (A) Section 602(5) of the Agricultural Act

24 of 1949 (7 U.S.C. 1471(5)) is amended by in25 serting ‘‘(as in effect before the date of the en-
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1 actment of the Farm Credit and Rural Develop2 ment Reform Act of 1995)’’ before the last

3 close parenthesis.

4 (B) Section 343(b) (7 U.S.C. 1991(b)) is

5 amended by striking ‘‘335 (e) and (f),’’.

6 (h) ELIMINATION OF DEBT RESTRUCTURING AND

7 LOAN SERVICING.—

8 (1) GENERAL PROVISIONS.—Section 353 (7

9 U.S.C. 2001) is repealed.

10 (2) PROVISIONS APPLICABLE TO COMMUNITY

11 FACILITY LOANS.—Section 353A (7 U.S.C. 2001a)

12 is repealed.

13 (3) CONFORMING AMENDMENTS.—

14 (A) Section 343(b) (7 U.S.C. 1991(b)) is

15 amended by striking ‘‘353,’’.

16 (B) Section 357(b) (7 U.S.C. 2005(b)) is

17 amended by striking paragraph (3).

18 (i) SHORT FORM CERTIFICATION OF PROGRAM COM19 PLIANCE.—Subtitle D (7 U.S.C. 1981–2008f) is amended

20 by adding at the end the following:

21 ‘‘SEC. 372. SHORT FORM CERTIFICATION OF FARM PRO22 GRAM BORROWER COMPLIANCE.

23 ‘‘The Secretary shall develop and utilize a consoli24 dated short form for farm program borrowers to use in

25 certifying compliance with any and all applicable statutes
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1 and regulations which serve as eligibility prerequisites for

2 loans made under this title.’’.

3 (j) EFFECT OF PRIOR DEFAULT, DEFERRAL, DEBT

4 RESTRUCTURING, OR LOAN SERVICING ON ELIGIBILITY

5 FOR LOANS.—Subtitle D (7 U.S.C. 1981–2008f), as

6 amended by subsection (i) of this section, is amended by

7 adding at the end the following:

8 ‘‘SEC. 373. EFFECT OF PRIOR DEFAULT, DEFERRAL, DEBT

9 RESTRUCTURING, OR LOAN SERVICING ON

10 ELIGIBILITY FOR LOANS.

11 ‘‘Notwithstanding any other section of this title, the

12 Secretary shall not make any loan under this title to an

13 applicant if the applicant (or, in the case of a legal entity

14 which is an applicant, an individual who has greater than

15 a 5 percent ownership interest in the applicant) has de16 faulted on a loan made or insured under this title, had

17 the principal or interest on a loan made or insured under

18 this title deferred under section 331A, or had a loan made

19 or insured under this title restructured or serviced under

20 section 353, unless the default, deferral, restructuring, or

21 servicing resulted from circumstances that were beyond

22 the control of the applicant or individual, and that could

23 not have been reasonably anticipated by the applicant or

24 individual.’’.
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1 SEC. 105. ASSURING PROMPT REPAYMENT OF LOANS.

2 (a) NARROWING OF USE OF NONSUPERVISED BANK

3 ACCOUNTS.—Section 312(e) (7 U.S.C. 1942(e)) is amend4 ed to read as follows:

5 ‘‘(e)(1) Notwithstanding any other provision of this

6 title, the Secretary shall reserve a portion of any loan

7 made under this subtitle to be placed in a nonsupervised

8 bank account which may be used at the discretion of the

9 borrower for the basic family needs of the borrower and

10 the immediate family of the borrower.

11 ‘‘(2) The size of any such reserve shall be limited to

12 the least of—

13 ‘‘(A) 10 percent of the loan;

14 ‘‘(B) $5,000; or

15 ‘‘(C) the amount needed to provide for the basic

16 family needs of the borrower and the borrower’s im17 mediate family for 3 calendar months.’’.

18 (b) REDUCTION OF THE LIMIT ON EMERGENCY

19 LOANS.—Section 324(a) (7 U.S.C. 1964(a)) is amended

20 by striking ‘‘$500,000’’ and inserting ‘‘$300,000’’.

21 (c) ELIMINATION OF AUTHORITY TO WAIVE APPLI22 CATION OF THE CREDIT ELSEWHERE TEST.—Section

23 322(b) (7 U.S.C. 1962(b)) is amended by striking ‘‘: Pro24 vided further, That for loans of $300,000 or less, the Sec25 retary may waive the requirement of this subsection if the
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1 Secretary determines that it would impose an undue bur2 den on the applicant’’.

3 SEC. 106. MODIFICATION OF PROGRAMS FOR BEGINNING

4 FARMERS.

5 (a) ESTABLISHMENT OF LOAN GUARANTEE PRO6 GRAM.—Section 309(h)(1) (7 U.S.C. 1929(a)(1)) is

7 amended by adding at the end the following: ‘‘In the case

8 of a loan made to a beginning farmer (as defined by the

9 Secretary in regulations), the guarantee shall be for the

10 payment of 98 percent of loan principal and interest.’’.

11 (b) ENHANCEMENT OF INTEREST RATE BUYDOWN

12 PROGRAM.—Section 351(c) (7 U.S.C. 1999(c)) is amend13 ed by inserting ‘‘(or 6 percent, in the case of a loan made

14 to a beginning farmer, as defined by the Secretary)’’ be15 fore the period.

16 (c) ELIMINATION OF DOWN PAYMENT LOAN PRO17 GRAM.—Section 310E (7 U.S.C. 1935) is repealed.

18 (d) ELIMINATION OF LIMITATIONS ON THE AVAIL19 ABILITY OF FARM OWNERSHIP LOANS AND LOAN GUAR20 ANTEES.—Section 310F (7 U.S.C. 1936) is repealed.

21 (e) ELIMINATION OF SPECIAL ASSISTANCE PRO22 GRAM.—Section 318 (7 U.S.C. 1948) is repealed.

23 (f) CONFORMING AMENDMENTS.—
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1 (1) Section 305 (7 U.S.C. 1925) is amended by

2 striking ‘‘310D, and 310E’’ and inserting ‘‘or

3 310D’’.

4 (2) Section 309 (7 U.S.C. 1929) is amended by

5 striking subsections (h)(3) and (i).

6 (3) Section 346(b) (7 U.S.C. 1994(b)) is

7 amended—

8 (A) in paragraph (3), by striking subpara9 graphs (E) and (F) and redesignating subpara10 graph (G) as subparagraph (E); and

11 (B) by striking paragraphs (5) and (6).

12 SEC. 107. ELIMINATION OF TARGET PARTICIPATION RATES.

13 (a) REPEAL.—Section 355 (7 U.S.C. 2003) is re14 pealed.

15 (b) CONFORMING AMENDMENTS.—

16 (1) Section 346(b)(3)(D) (7 U.S.C.

17 1994(b)(3)(D)) is amended by striking ‘‘To the ex18 tent that it is not inconsistent with an exercise of

19 authority under section 355, in’’ and inserting ‘‘In’’.

20 (2) Section 2501(c)(2)(D) of the Food, Agri21 culture, Conservation, and Trade Act of 1990 (7

22 U.S.C. 2279(c)(2)(D)) is amended by striking ‘‘com23 pared to the target participation rates established

24 pursuant to sections 355(a)(1) and 355(c) of the
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1 Consolidated Farm and Rural Development Act (7

2 U.S.C. 2003(a)(1)),’’.

3 (3) Section 8(b)(5)(B)(iv) of the Soil Conserva4 tion and Domestic Allotment Act (16 U.S.C.

5 590h(b)(5)(B)(iv)) is amended by striking ‘‘groups’’

6 and all that follows and inserting ‘‘groups. For pur7 poses of the preceding sentence, the term ‘socially

8 disadvantaged groups’ means groups whose members

9 have been subjected to racial, ethnic, or gender prej10 udice because of their identity as members of a

11 group without regard to their individual qualities.’’.

12 SEC. 108. MISCELLANEOUS AND CONFORMING AMEND13 MENTS.

14 (a) CLARIFICATION OF WRITTEN STATEMENT RE15 QUIRED OF BORROWERS.—Section 333(1) (7 U.S.C.

16 1983(1)) is amended by striking ‘‘a written statement

17 showing the applicant’s net worth’’ and inserting ‘‘an ap18 propriate written financial statement’’.

19 (b) EXTENSION OF VETERANS PREFERENCE TO

20 VETERANS OF THE GULF WAR.—Section 333(5) (7

21 U.S.C. 1983(5)), as so redesignated by section 104(f)(1)

22 of this Act, is amended by striking ‘‘or the Vietnam era’’

23 and inserting ‘‘, during the Vietnam era, or during the

24 liberation of Kuwait under Project Desert Shield or

25 Project Desert Storm,’’.
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1 (c) VERIFICATION OF THE CREDIT ELSEWHERE

2 TEST.—Section 333A(e)(4) (7 U.S.C. 1983a(e)(4)) is

3 amended by striking ‘‘With the approval of the borrower,

4 the’’ and inserting ‘‘The’’.

5 (d) ELIMINATION OF REQUIREMENT TO TESTIFY

6 AND REPORT ON BUDGET REQUEST.—Section 345 (7

7 U.S.C. 1993) is repealed.

8 (e) ELIMINATION OF REQUIREMENT TO DEVELOP

9 AND REPORT ON LONG-TERM COST PROJECTIONS.—Sec10 tion 346(c) (7 U.S.C. 1994(c)) is repealed.

11 (f) ELIMINATION OF AUTHORITY TO INSURE

12 LOANS.—

13 (1) Section 302(b) (7 U.S.C. 1922(b)) is

14 amended by striking ‘‘or insured’’.

15 (2) Section 303 (7 U.S.C. 1923), as amended

16 by section 103(a)(1) of this Act, is amended by

17 striking ‘‘or insured’’.

18 (3) Section 304(b) (7 U.S.C. 1924(b)) is

19 amended by striking ‘‘or insured’’.

20 (4) Section 305 (7 U.S.C. 1925) is amended by

21 striking ‘‘or insure’’.

22 (5) Section 306(a)(1) (7 U.S.C. 1926(a)(1)) is

23 amended—

24 (A) by striking ‘‘or insure’’; and

25 (B) by striking ‘‘or insured’’.
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1 (6) Section 306(a)(15)(A) (7 U.S.C.

2 1926(a)(15)(A)) is amended—

3 (A) by striking ‘‘or insure’’; and

4 (B) by striking ‘‘or insured’’.

5 (7) Section 306C(a)(1) (7 U.S.C. 1926c(a)(1))

6 is amended by striking ‘‘or insure’’.

7 (8) Section 306C(b)(1) (7 U.S.C. 1926c(b)(1))

8 is amended by striking ‘‘or insure’’.

9 (9) Section 307(a)(6)(A) (7 U.S.C.

10 1927(a)(6)(A)) is amended by striking ‘‘or insured’’.

11 (10) Section 307(c) (7 U.S.C. 1927(c)) is

12 amended by striking ‘‘, insured,’’.

13 (11) Section 308 (7 U.S.C. 1928) is amended

14 by striking the 1st sentence.

15 (12) Section 309(f)(1) (7 U.S.C. 1929(f)(1)) is

16 amended—

17 (A) by striking ‘‘could be’’ and inserting

18 ‘‘(before the date of the enactment of the Farm

19 Credit and Rural Development Reform Act of

20 1995) could have been’’; and

21 (B) by striking ‘‘and insure’’.

22 (13) Section 309(f)(2) (7 U.S.C. 1929(f)(2)) is

23 amended by striking ‘‘or hereafter’’.

24 (14) Section 309A (7 U.S.C. 1929a) is amend25 ed in each of subsections (d) and (e) by striking ‘‘,
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1 guaranteed, or insured’’ and inserting ‘‘or guaran2 teed’’.

3 (15) Section 309A(g)(1) (7 U.S.C.

4 1929a(g)(1)) is amended—

5 (A) by striking ‘‘could be’’ and inserting

6 ‘‘(before the date of the enactment of the Farm

7 Credit and Rural Development Reform Act of

8 1995) could have been’’; and

9 (B) by striking ‘‘and insure’’.

10 (16) Section 309A(g) (7 U.S.C. 1929a(g)) is

11 amended in each of paragraphs (2) and (7) by strik12 ing ‘‘or hereafter’’.

13 (17) Section 310A (7 U.S.C. 1931) is repealed.

14 (18) Section 310B(a) (7 U.S.C. 1932(a)) is

15 amended—

16 (A) by striking ‘‘and insure’’; and

17 (B) by striking ‘‘, insured,’’.

18 (19) Section 310B(e)(1) (7 U.S.C. 1932(e)(1))

19 is amended by striking ‘‘insure and’’.

20 (20) Section 310B(e)(2) (7 U.S.C. 1932(e)(2))

21 is amended by striking ‘‘insure or’’.

22 (21) Section 310D(a) (7 U.S.C. 1934(a)) is

23 amended by striking ‘‘and insure’’.

24 (22) Section 311(c) (7 U.S.C. 1941(c)) is

25 amended by striking ‘‘or insured’’.
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1 (23) Section 313 (7 U.S.C. 1943) is amended

2 by striking ‘‘or insure’’.

3 (24) Section 316(a)(3) (7 U.S.C. 1946(a)(3)) is

4 amended by striking ‘‘or insured’’.

5 (25) Section 317 (7 U.S.C. 1947) is repealed.

6 (26) Section 322(a) (7 U.S.C. 1962(a)) is

7 amended by striking ‘‘or insure’’.

8 (27) Section 323 (7 U.S.C. 1963) is amended

9 by striking ‘‘or insured’’.

10 (28) Section 324(a) (7 U.S.C. 1964(a)) is

11 amended by striking ‘‘or insured’’.

12 (29) Section 324(b)(2) (7 U.S.C. 1964(b)(2)) is

13 amended—

14 (A) by striking clause (A); and

15 (B) by striking ‘‘(B)’’.

16 (30) Section 328 (7 U.S.C. 1968) is repealed.

17 (31) Section 333A (7 U.S.C. 1983a) is amend18 ed by striking subsection (b).

19 (32) Section 333A(f) (7 U.S.C. 1983a(f)) is

20 amended in each of paragraphs (4) and (5) by strik21 ing ‘‘an insured’’ and inserting ‘‘a’’.

22 (33) Section 335(e)(5)(A) (7 U.S.C.

23 1985(e)(5)(A)) is amended by striking ‘‘made or in24 sured’’.
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1 (34) Section 343(a)(4) (7 U.S.C. 1991(a)(4)) is

2 amended by striking ‘‘word ‘insure’ as used in this

3 title includes guarantee, which means’’ and inserting

4 ‘‘term ‘guarantee’ means’’.

5 (35) Section 343(a)(9) (7 U.S.C. 1991(a)(9)) is

6 amended by striking ‘‘or insured’’.

7 (36) Section 344 (7 U.S.C. 1992) is amended

8 by striking ‘‘insured, or made to be sold and in9 sured,’’.

10 (37) Section 346(a) (7 U.S.C. 1994(a)) is

11 amended by striking ‘‘and insured’’.

12 (38) Section 346(b)(1) (7 U.S.C. 1994(b)(1)) is

13 amended by striking ‘‘insured, made to be sold and

14 insured, or’’.

15 (39) Section 346(b)(3) (7 U.S.C. 1994(b)(3)),

16 as amended by sections 106(f)(3) and 107(b)(1) of

17 this Act, is amended by striking subparagraphs (B)

18 and (D) and redesignating subparagraphs (C) and

19 (E) as subparagraphs (B) and (C), respectively.

20 (40) Section 346(d)(1) (7 U.S.C. 1994(d)(1)) is

21 amended by striking ‘‘authorized to be insured, or

22 made to be sold and insured,’’ and inserting

23 ‘‘made’’.

24 (41) Section 348 (7 U.S.C. 1996) is amended—

25 (A) by striking ‘‘and insuring’’;
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1 (B) by striking ‘‘and insure’’; and

2 (C) by striking ‘‘or insured’’.

3 (42) Section 351(h)(8)(C) (7 U.S.C.

4 1999(h)(8)(C)) is amended by striking ‘‘, insured, ’’.

5 (43) Section 358 (7 U.S.C. 2006) is amended

6 by striking ‘‘, insure,’’.

7 CHAPTER 2—AMENDMENTS TO THE FARM

8 CREDIT ACT OF 1971

9 SEC. 151. REFERENCES.

10 Except as otherwise expressly provided, wherever in

11 this chapter an amendment or repeal is expressed in terms

12 of an amendment to, or repeal of, a section or other provi13 sion, the reference shall be considered to be made to a

14 section or other provision of the Farm Credit Act of 1971.

15 SEC. 152. REPEAL OF REQUIREMENTS RELATING TO RE16 VIEW OF DECISIONS TO DENY OR REDUCE

17 THE AMOUNT OF A LOAN.

18 (a) REPEAL.—Section 4.14 (12 U.S.C. 2202) is re19 pealed.

20 (b) CONFORMING AMENDMENTS.—

21 (1) Section 4.13B (12 U.S.C. 2201) is amended

22 in each of subsections (a) and (b)—

23 (A) by adding ‘‘and’’ at the end of para24 graph (1);
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1 (B) by striking ‘‘; and’’ at the end of para2 graph (2) and inserting a period; and

3 (C) by striking paragraph (3).

4 (2) Section 8.9 (12 U.S.C. 2279aa–9) is

5 amended by striking ‘‘4.14,’’ each place such term

6 appears.

7 SEC. 153. PROHIBITION AGAINST RESTRUCTURING OF RE8 STRUCTURED LOANS OR LOANS INVOLVED IN

9 BANKRUPTCY PROCEEDINGS.

10 (a) IN GENERAL.—Section 4.14A(a)(5) (12 U.S.C.

11 2202a(a)(5)) is amended by inserting ‘‘, which has not

12 been restructured under this section and with respect to

13 which the borrower has not filed a petition for bankruptcy

14 under title 11, United States Code’’ before the period.

15 (b) ELIMINATION OF REQUIRED REPORTS TO THE

16 FARM CREDIT ADMINISTRATION.—Section 4.14A (12

17 U.S.C. 2202a) is amended by striking subsections (g) and

18 (h) and inserting the following:

19 ‘‘(g) RESTRUCTURING POLICY.—

20 ‘‘(1) ESTABLISHMENT.—Within 60 days after

21 the date of the enactment of this paragraph, the

22 board of directors of each qualified lender shall de23 velop a policy that is consistent with this section, to

24 govern the restructuring of distressed loans.
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1 ‘‘(2) CONTENTS OF POLICY.—The policy estab2 lished under paragraph (1) shall include an expla3 nation of the procedure for submitting an applica4 tion for restructuring.’’.

5 (c) RELATED AMENDMENTS.—Section 4.14A (12

6 U.S.C. 2202a) is amended by striking subsections (k) and

7 (l).

8 (d) CONFORMING AMENDMENTS.—

9 (1) Section 4.14A (12 U.S.C. 2202a) is amend10 ed by redesignating subsections (i) and (j) as sub11 sections (h) and (i), respectively.

12 (2) Section 5.31 (12 U.S.C. 2267) is amended

13 by striking ‘‘4.14A(i)’’ and inserting ‘‘4.14A(h)’’.

14 (3) Section 5.32(h) (12 U.S.C. 2268(h)) is

15 amended by striking ‘‘4.14A(i)’’ and inserting

16 ‘‘4.14A(h)’’.

17 SEC. 154. REPEAL OF RULES GOVERNING EFFECT OF RE18 STRUCTURING ON BORROWER STOCK.

19 (a) REPEAL.—Section 4.14B (12 U.S.C. 2202b) is

20 repealed.

21 (b) CONFORMING AMENDMENTS.—

22 (1) Section 4.9A(b) (12 U.S.C. 2162(b)) is

23 amended—

24 (A) by adding ‘‘or’’ at the end of para25 graph (1);
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1 (B) by striking paragraph (2); and

2 (C) by redesignating paragraph (3) as

3 paragraph (2).

4 (2) Section 8.9 (12 U.S.C. 2279aa–9) is

5 amended by striking ‘‘4.14B,’’ each place such term

6 appears.

7 SEC. 155. REPEAL OF RULES GOVERNING REVIEW OF RE8 STRUCTURING DENIALS.

9 (a) REPEAL.—Section 4.14C (12 U.S.C. 2202c) is re10 pealed.

11 (b) CONFORMING AMENDMENTS.—Section 8.9 (12

12 U.S.C. 2279aa–9) is amended by striking ‘‘4.14C,’’ each

13 place such term appears.

14 SEC. 156. ELIMINATION OF CERTAIN REQUIREMENTS RE15 LATING TO LOANS PLACED IN NONACCRUAL

16 STATUS.

17 Section 4.14D (12 U.S.C. 2202d) is amended by

18 striking subsection (d).

19 SEC. 157. LIMITATIONS ON THE RIGHT OF FIRST REFUSAL.

20 Section 4.36 (12 U.S.C. 2219a) is amended—

21 (1) in subsection (a), by striking ‘‘or lease’’;

22 (2) in subsection (b)(1)—

23 (A) by striking ‘‘Within’’ and inserting

24 ‘‘Except as otherwise provided in subsection (c),

25 within’’; and
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1 (B) by inserting ‘‘by private sale,’’ after

2 ‘‘such real estate,’’;

3 (3) by striking subsection (c) and redesignating

4 subsections (d) through (g) as subsections (c)

5 through (f), respectively;

6 (4) by redesignating subsections (h) and (i) as

7 subsections (j) and (k), respectively; and

8 (5) by inserting after subsection (f) (as so re9 designated by paragraph (3) of this section) the fol10 lowing:

11 ‘‘(g) PREVIOUS OWNER DEFINED.—As used in this

12 section, the term ‘previous owner’ does not include a mort13 gagor or grantor of an equivalent lien interest in agricul14 tural real estate unless such person is also a borrower in

15 the transaction.

16 ‘‘(h) PERSONAL AND NONASSIGNABLE RIGHT.—The

17 right of first refusal arising under this section is personal

18 to, and not assignable by, the previous owner.

19 ‘‘(i) RULE OF INTERPRETATION.—This section shall

20 not be interpreted to preclude a borrower from voluntarily

21 waiving the right of first refusal arising under this section

22 in connection with a voluntary conveyance of agricultural

23 real estate in lieu of foreclosure.’’.
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1 Subtitle B—Rural Development

2 SEC. 201. CAPITALIZATION GRANTS TO STATES FOR RURAL

3 DEVELOPMENT.

4 The Rural Development Act of 1972 is amended by

5 adding at the end the following:

6 ‘‘TITLE VII—CAPITALIZATION

7 GRANTS TO STATES FOR

8 RURAL DEVELOPMENT

9 ‘‘SEC. 701. PURPOSES.

10 ‘‘The purpose of this title is to provide eligible States

11 and territories with a consolidated source of funding for

12 rural development, and to encourage States to establish

13 revolving funds through which rural development may be

14 financed permanently.

15 ‘‘SEC. 702. GRANTS.

16 ‘‘(a) GRANT AUTHORITY.—

17 ‘‘(1) IN GENERAL.—

18 ‘‘(A) GRANTS TO ELIGIBLE STATES.—Each

19 eligible State shall be entitled to receive from

20 the Secretary for each fiscal year a grant in an

21 amount equal to the applicable share of 99.25

22 percent of the amount (if any) appropriated

23 pursuant to this title for the fiscal year.

24 ‘‘(B) GRANTS TO ELIGIBLE TERRI25 TORIES.—Each eligible territory shall be enti-
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1 tled to receive from the Secretary for each fiscal

2 year a grant in an amount equal to the applica3 ble share of 0.75 percent of the amount (if any)

4 appropriated pursuant to this title for the fiscal

5 year.

6 ‘‘(C) SPECIAL RULES FOR FISCAL YEARS

7 1997 AND 1998.—In lieu of any grant under sub8 paragraph (A) or (B) for fiscal year 1997 or

9 1998, each eligible State and each eligible terri10 tory shall be entitled to receive from the Sec11 retary for each of such fiscal years a grant in

12 an amount equal to the applicable share of the

13 amount (if any) appropriated pursuant to this

14 title for the fiscal year.

15 ‘‘(2) SCHEDULE OF PAYMENTS.—On the 1st

16 day of each calendar quarter in a fiscal year, the

17 Secretary shall pay each jurisdiction to which a

18 grant is payable under paragraph (1) for the fiscal

year an amount equal to 1 19 ⁄4 of the amount of the

20 grant.

21 ‘‘(3) SUBJECT TO APPROPRIATIONS.—The au22 thority provided by this title shall be effective only

23 to such extent or in such amounts as are provided

24 in advance in appropriations Acts.
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1 ‘‘(4) LIMITATIONS ON AUTHORIZATION OF AP2 PROPRIATIONS.—For grants under paragraph (1),

3 there are authorized to be appropriated to the Sec4 retary not more than $836,025,000 for each fiscal

5 year.

6 ‘‘(b) LIMITATION ON FEDERAL AUTHORITY.—A ju7 risdiction to which funds are provided under subsection

8 (a) shall have sole discretion to determine how such funds

9 are to be expended and the entities to which such funds

10 are to be provided, subject to this title.

11 ‘‘(c) DEFINITIONS.—As used in this title:

12 ‘‘(1) ELIGIBLE STATE.—The term ‘eligible

13 State’ means a State that meets the following re14 quirements:

15 ‘‘(A) The State has established a rural de16 velopment revolving fund.

17 ‘‘(B) The State has established to the sat18 isfaction of the Secretary that the revolving

19 fund will be operated and administered in ac20 cordance with section 703(a).

21 ‘‘(C) The State has agreed that the State

22 agency responsible for administering the revolv23 ing fund shall—

24 ‘‘(i) consult with representatives of

25 local governments, businesses, nonprofit
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1 organizations, and with the State agency

2 with expertise in rural development and

3 agriculture, in implementing this title; and

4 ‘‘(ii) consult with general purpose

5 local governments in developing priorities

6 for funding activities from the revolving

7 fund, criteria for selecting recipients of as8 sistance from the revolving fund, and the

9 method of distributing funds from the re10 volving fund.

11 ‘‘(D)(i) The State has agreed to submit to

12 the Secretary biennial reports which describe

13 the manner in which the amounts paid to the

14 State under subsection (a) are used, and in15 clude evidence that, in each fiscal year covered

16 by the report, the State has expended for rural

17 development from State sources an amount

18 equal to not less than 20 percent of the total

19 amount paid to the State under subsection (a)

20 during the fiscal year.

21 ‘‘(ii) As used in clause (i), the term ‘rural

22 development’ includes—

23 ‘‘(I) rural infrastructure, including

24 water and sewer systems, highways, roads,

25 and bridges;
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1 ‘‘(II) rural education and job training,

2 including vocational and technical training;

3 ‘‘(III) rural health services; and

4 ‘‘(IV) rural housing assistance.

5 ‘‘(2) ELIGIBLE TERRITORY.—The term ‘eligible

6 territory’ means a territory that meets the following

7 requirements:

8 ‘‘(A) The territory has agreed to use the

9 funds provided to the territory under subsection

10 (a) only for qualified rural development pur11 poses.

12 ‘‘(B) The territory has agreed to submit to

13 the Secretary biennial reports which describe

14 the manner in which the amounts paid to the

15 territory under subsection (a) are used, and in16 clude evidence that, in each fiscal year covered

17 by the report, the territory has expended for

18 rural development from territory sources an

19 amount equal to not less than 20 percent of the

20 total amount paid to the territory under sub21 section (a) during the fiscal year.

22 ‘‘(3) STATE.—The term ‘State’ means the 50

23 States.

24 ‘‘(4) TERRITORY.—The term ‘territory’ means

25 the Commonwealth of Puerto Rico, the United
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1 States Virgin Islands, the Commonwealth of the

2 Northern Mariana Islands, Guam, American Samoa,

3 and the Trust Territory of the Pacific Islands.

4 ‘‘(5) SECRETARY.—The term ‘Secretary’ means

5 the Secretary of Agriculture.

6 ‘‘(6) APPLICABLE SHARE.—

7 ‘‘(A) IN GENERAL.—The term ‘applicable

8 share’ means, with respect to a jurisdiction, the

9 sum of—

‘‘(i) 1 10 ⁄2 of the rural population per11 centage of the jurisdiction;

‘‘(ii) 1 12 ⁄4 of the rural poverty percent13 age of the jurisdiction; and

‘‘(iii) 1 14 ⁄4 of the rural unemployment

15 percentage of the jurisdiction.

16 ‘‘(B) SPECIAL RULE FOR FISCAL YEARS

17 1997 AND 1998.—Notwithstanding subparagraph

18 (A), for purposes of grants under this title for

19 fiscal years 1997 and 1998, the term ‘applica20 ble share’ means, with respect to a jurisdic21 tion—

22 ‘‘(i) the total amount paid to the ju23 risdiction for fiscal year 1995 under the

24 provisions of law stricken or repealed by

25 sections 104(h)(2), 108(f)(25), and 202 of
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1 the Farm Credit and Rural Development

2 Reform Act of 1995; divided by

3 ‘‘(ii) the total amount paid to all

4 States and territories for fiscal year 1995

5 under such provisions of law.

6 ‘‘(7) RURAL POPULATION PERCENTAGE.—

7 ‘‘(A) FOR STATES.—The term ‘rural popu8 lation percentage’ means, with respect to a

9 State—

10 ‘‘(i) the number of individuals who re11 side in a rural area in the State (as deter12 mined by the Secretary on the basis of the

13 latest census data available); divided by

14 ‘‘(ii) the total number of individuals

15 who reside in a rural area in the States (as

16 determined by the Secretary on the basis

17 of the latest census data available).

18 ‘‘(B) FOR TERRITORIES.—The term ‘rural

19 population percentage’ means, with respect to a

20 territory—

21 ‘‘(i) the number of individuals who re22 side in a rural area in the territory (as de23 termined by the Secretary on the basis of

24 the latest census data available); divided by
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1 ‘‘(ii) the total number of individuals

2 who reside in a rural area in the territories

3 (as determined by the Secretary on the

4 basis of the latest census data available).

5 ‘‘(8) RURAL POVERTY PERCENTAGE.—

6 ‘‘(A) FOR STATES.—The term ‘rural pov7 erty percentage’ means, with respect to a

8 State—

9 ‘‘(i) the number of individuals residing

10 in a rural area in the State whose income

11 is at or below the poverty line (as deter12 mined by the Secretary on the basis of the

13 latest census data available); divided by

14 ‘‘(ii) the total number of individuals

15 residing in a rural area in the States

16 whose income is at or below the poverty

17 line (as determined by the Secretary on the

18 basis of the latest census data available).

19 ‘‘(B) FOR TERRITORIES.—The term ‘rural

20 poverty percentage’ means, with respect to a

21 territory—

22 ‘‘(i) the number of individuals residing

23 in a rural area in the territory whose in24 come is at or below the poverty line (as de-
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1 termined by the Secretary on the basis of

2 the latest census data available); divided by

3 ‘‘(ii) the total number of individuals

4 residing in a rural area in the territories

5 whose income is at or below the poverty

6 line (as determined by the Secretary on the

7 basis of the latest census data available).

8 ‘‘(9) RURAL UNEMPLOYMENT PERCENTAGE.—

9 ‘‘(A) FOR STATES.—The term ‘rural un10 employment percentage’ means, with respect to

11 a State—

12 ‘‘(i) the number of individuals residing

13 in a rural area in the State who are unem14 ployed (as determined by the Secretary on

15 the basis of the latest census data avail16 able); divided by

17 ‘‘(ii) the total number of individuals

18 residing in a rural area in the States who

19 are unemployed (as determined by the Sec20 retary on the basis of the latest census

21 data available).

22 ‘‘(B) FOR TERRITORIES.—The term ‘rural

23 unemployment percentage’ means, with respect

24 to a territory—
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1 ‘‘(i) the number of individuals residing

2 in a rural area in the territory who are un3 employed (as determined by the Secretary

4 on the basis of the latest census data avail5 able); divided by

6 ‘‘(ii) the total number of individuals

7 residing in a rural area in the territories

8 who are unemployed (as determined by the

9 Secretary on the basis of the latest census

10 data available).

11 ‘‘SEC. 703. STATE RURAL DEVELOPMENT REVOLVING

12 FUNDS.

13 ‘‘(a) REQUIREMENTS.—A State rural development

14 revolving fund shall be operated and administered in ac15 cordance with the following requirements:

16 ‘‘(1) GRANTS TO BE DEPOSITED INTO THE

17 FUND.—Any amount paid to the State under section

18 702(a) shall be immediately deposited into the fund.

19 ‘‘(2) USE OF AMOUNTS.—The amounts in the

20 fund may be used only for qualified rural develop21 ment purposes, except that amounts not immediately

22 to be so used may be invested in interest-bearing se23 curities.

24 ‘‘(3) LIMITATIONS ON TERM OF LOANS.—Loans

25 may be made from the fund at or below market in-
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1 terest rates (including interest-free), and shall not

2 be made for a period that exceeds the lesser of—

3 ‘‘(A) the life of the activities so financed;

4 or

5 ‘‘(B) 40 years.

6 ‘‘(4) CREDITING OF REPAYMENTS.—The fund

7 will be credited with all repayments of principal and

8 interest on loans and investments made by the fund.

9 ‘‘(5) LIMIT ON PERCENTAGE OF FEDERAL

10 FUNDS USED FOR GRANTS.—During any fiscal year,

11 not more than 30 percent of the total amount paid

12 to the State under section 702(a) during the fiscal

13 year may be used to make grants.

14 ‘‘(6) MINIMUM PERCENTAGE OF FUNDS USED

15 FOR SMALL COMMUNITIES.—Not less than 60 per16 cent of the amounts in the fund shall be used for the

17 benefit of communities with a population of fewer

18 than 10,000 individuals.

19 ‘‘(7) LIMIT ON PERCENTAGE OF FUNDS USED

20 FOR LARGE COMMUNITIES.—Not more than 40 per21 cent of the amounts in the fund may be used for the

22 benefit of communities with a population of more

23 than 10,000 but fewer than 25,000 individuals.

24 ‘‘(8) MINIMUM PERCENTAGE OF FEDERAL

25 FUNDS USED FOR TECHNICAL ASSISTANCE RELATED
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1 TO WATER AND WASTE DISPOSAL.—Not less than 1

2 percent of the amounts paid to the State under sec3 tion 702(a) during the fiscal year shall be used to

4 provide financing for technical assistance pursuant

5 to subsection (b)(2) of this section.

6 ‘‘(9) ACCOUNTING FOR FUNDS BY RECIPI7 ENTS.—An amount in the fund shall not be provided

8 to any entity unless, as a condition of providing the

9 amount, the entity agrees to account for the amount

10 in accordance with generally accepted accounting

11 principles.

12 ‘‘(10) REASONABLE ASSURANCE OF LOAN RE13 PAYMENT.—A loan shall not be made to an entity

14 from the fund unless the entity provides reasonable

15 assurance of a source of funds for repayment of the

16 loan.

17 ‘‘(11) CERTIFICATION BY LOCAL GOVERNMENTS

18 OF DIRECT BENEFIT TO LOCAL RESIDENTS.—An

19 amount in the fund shall not be provided to any en20 tity for any activity to be conducted in an area un21 less the entity has provided the State with a certifi22 cation from the unit of local government for the area

23 that the activity will directly benefit the residents of

24 the area.
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1 ‘‘(12) POWERS OF FUND ADMINISTRATOR.—

2 The fund shall be administered by an instrumental3 ity of the State with such powers as may be required

4 to operate the fund in accordance with this title.

5 ‘‘(b) QUALIFIED RURAL DEVELOPMENT PURPOSE.—

6 As used in this title, the term ‘qualified rural development

7 purpose’ means any of the following:

8 ‘‘(1) WATER AND WASTE DISPOSAL PRO9 GRAMS.—To make loans or grants to associations,

10 including corporations not operated for profit, In11 dian tribes on Federal and State reservations and

12 other federally recognized Indian tribes, and public

13 and quasi-public agencies, all primarily serving

14 farmers, ranchers, farm tenants, farm laborers,

15 rural businesses, and other rural residents—

16 ‘‘(A) to provide for the conservation, devel17 opment, use, and control of water, and the in18 stallation or improvement of drainage or waste

19 disposal facilities, and essential community fa20 cilities including necessary related equipment,

21 and to furnish financial assistance or other aid

22 in planning projects for such purposes; or

23 ‘‘(B) to finance specific projects for works

24 for the development, storage, treatment, purifi-
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•HR 2590 IH

1 cation, or distribution of water or the collection,

2 treatment, or disposal of waste in rural areas.

3 ‘‘(2) RURAL WATER AND WASTE DISPOSAL CIR4 CUIT RIDER TECHNICAL ASSISTANCE AND TRAINING

5 PROGRAM.—To make grants to associations de6 scribed in paragraph (1) for technical assistance and

7 training—

8 ‘‘(A) to identify, and evaluate alternative

9 solutions to, problems relating to the obtaining,

10 storage, treatment, purification, or distribution

11 of water or the collection, treatment, or disposal

12 of waste in rural areas;

13 ‘‘(B) to prepare applications to receive fi14 nancial assistance for any purpose specified in

15 paragraph (1) from any public or private

16 source; or

17 ‘‘(C) to improve the operation and mainte18 nance practices at any existing works for the

19 storage, treatment, purification, or distribution

20 of water or the collection, treatment, or disposal

21 of waste in rural areas.

22 ‘‘(3) RURAL BUSINESS AND INDUSTRY.—

23 ‘‘(A) IN GENERAL.—To make loans or

24 grants to public, private, or cooperative organi25 zations organized not for profit, to Indian tribes
50

•HR 2590 IH

1 on Federal and State reservations or other fed2 erally recognized Indian tribal groups, or to

3 guarantee the repayment of principal or interest

4 on loans made to private or cooperative organi5 zations organized for profit, for the purposes

6 of—

7 ‘‘(i) improving, developing, or financ8 ing business, industry, and employment

9 and improving the economic climate in

10 rural communities; or

11 ‘‘(ii) the conservation, development,

12 and use of water for aquaculture purposes

13 in rural areas.

14 ‘‘(B) INTERMEDIARY RELENDING.—To

15 make loans to nonprofit organizations for the

16 purpose of funding revolving loan funds oper17 ated in accordance with rules similar to the

18 rules governing the operation of the State rural

19 development revolving fund established pursu20 ant to section 702(c)(1)(A), or to guarantee the

21 repayment of principal or interest on loans

22 made by such revolving loan funds to organiza23 tions organized for profit for the purposes de24 scribed in subparagraph (A) of this paragraph.
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•HR 2590 IH

1 ‘‘(4) SOLID WASTE MANAGEMENT.—To make

2 loans or grants to nonprofit organizations for the

3 provision of regional technical assistance to local and

4 regional governments and related agencies for the

5 purpose of improving the planning and management

6 of solid waste disposal facilities.

7 ‘‘(5) RURAL BUSINESS ENTERPRISE.—To make

8 loans or grants to public bodies and private non9 profit corporations for measures designed to finance

10 and facilitate development of small and emerging

11 private business enterprises or the creation, expan12 sion, and operation of rural distance learning net13 works or rural learning programs that provide edu14 cational instruction or job training instruction relat15 ed to potential employment or job advancement to

16 adult students, including the development, construc17 tion or acquisition of land, buildings, plants, equip18 ment, access streets and roads, parking areas, utility

19 extensions, necessary water supply and waste dis20 posal facilities, refinancing, services and fees, or for

21 the purpose of demonstrating the effectiveness of

22 statewide nonprofit public television systems whose

23 coverage area is primarily rural in providing infor24 mation on agriculture and other issues of impor25 tance to farmers and other rural residents.
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•HR 2590 IH

1 ‘‘(6) RURAL TECHNOLOGY AND COOPERATIVE

2 DEVELOPMENT.—To make loans or grants to any

3 organization or institution, including an accredited

4 institution of higher education, no part of the net

5 earnings of which inures, or may lawfully inure, to

6 the benefit of any private shareholder or individual,

7 for the purpose of enabling the organization or insti8 tution to establish and operate centers for rural

9 technology or cooperative development—

10 ‘‘(A) the primary objective of which may

11 be to improve the economic condition of rural

12 areas by promoting the development (through

13 technological innovation, cooperative develop14 ment, and adaptation of existing technology)

15 and commercialization of—

16 ‘‘(i) new services and products that

17 can be produced or provided in rural areas;

18 ‘‘(ii) new processes that can be uti19 lized in the production of products in rural

20 areas; and

21 ‘‘(iii) new enterprises that can add

22 value to on-farm production through proc23 essing or marketing; and

24 ‘‘(B) the activities of which may include—
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•HR 2590 IH

1 ‘‘(i) programs for technology research,

2 investigations, and basic feasibility studies

3 in any field or discipline for the purpose of

4 generating principles, facts, technical

5 knowledge, new technology, or other infor6 mation that may be useful to rural indus7 tries, cooperatives, agribusinesses, and

8 other persons or entities in rural areas

9 served by such centers in the development

10 and commercialization of new products,

11 processes, or services;

12 ‘‘(ii) programs for the collection, in13 terpretation, and dissemination of prin14 ciples, facts, technical knowledge, new

15 technology, or other information that may

16 be useful to rural industries, cooperatives,

17 agribusinesses, and other persons in rural

18 areas served by the center in the develop19 ment and commercialization of new prod20 ucts, processes, or services;

21 ‘‘(iii) programs providing training and

22 instruction for individuals residing in rural

23 areas served by the center with respect to

24 the development (through technological in25 novation, cooperative development, and ad-
54

•HR 2590 IH

1 aptation of existing technology) and com2 mercialization of new products, processes,

3 or services;

4 ‘‘(iv) programs providing loans and

5 grants to individuals, small businesses, and

6 cooperatives in rural areas served by the

7 center for purposes of generating, evaluat8 ing, developing, and commercializing new

9 products, processes, or services;

10 ‘‘(v) programs providing technical as11 sistance and advisory services to individ12 uals, small businesses, cooperatives, and

13 industries in rural areas served by the cen14 ter for purposes of developing and commer15 cializing new products, processes, or serv16 ices; or

17 ‘‘(vi) programs providing research and

18 support to individuals, small businesses,

19 cooperatives, and industries in rural areas

20 served by the center for purposes of devel21 oping new agricultural enterprises to add

22 value to on-farm production through proc23 essing or marketing.

24 ‘‘(7) DISTANCE LEARNING AND MEDICAL

25 LINKS.—To make loans or grants to encourage and
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•HR 2590 IH

1 improve the use of telecommunications, computer

2 networks, and related advanced technologies, by per3 sons associated with end users of such facilities, in4 cluding students and teachers, medical professionals,

5 small businesses, and other residents living in rural

6 areas associated with rural community facilities in

7 rural areas.

8 ‘‘(8) PROVISION OF SECURITY FOR CERTAIN

9 STATE OBLIGATIONS USED TO RAISE FUNDS FOR

10 RURAL DEVELOPMENT.—To provide security for, or

11 to make principal or interest payments on revenue

12 or general obligation bonds issued by the State if the

13 proceeds from the sale of such bonds is deposited in

14 the State rural development revolving fund estab15 lished pursuant to section 702(c)(1)(A).

16 ‘‘(9) RURAL COMMUNITY FIRE PROTECTION.—

17 To make loans or grants to public or nonprofit asso18 ciations to organize, train, and equip local firefight19 ing forces.

20 ‘‘(10) GENERAL TECHNICAL ASSISTANCE.—To

21 provide loans or grants to enable any entity (other

22 than a State or territory) receiving funds provided

23 under section 702(a) to obtain technical assistance.

24 ‘‘(11) LIMITED ADMINISTRATIVE COSTS.—To

25 pay the costs of administering the State rural devel-
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•HR 2590 IH

1 opment revolving fund established pursuant to sec2 tion 702(c)(1)(A), except that amounts expended

3 from the fund during any fiscal year for this purpose

4 may not exceed 3 percent of the total amount paid

5 to the State under section 702(a) for the fiscal year.

6 ‘‘(12) FINANCIAL SUPPORT FOR LOCAL FINANC7 ING OF RURAL DEVELOPMENT.—To guarantee, or

8 purchase insurance for, local obligations the pro9 ceeds of which shall be used for another qualified

10 rural development purpose.

11 ‘‘(13) LOCAL SHARE REQUIREMENTS OF OTHER

12 FEDERAL GRANT-IN-AID PROGRAMS RELATED TO

13 RURAL DEVELOPMENT.—To pay the local share re14 quirements of another Federal grant-in-aid program

15 related to rural development to the extent not ex16 pressly prohibited by the law providing for the

17 grant-in-aid program.

18 ‘‘(14) INTERSTATE RURAL DEVELOPMENT AC19 TIVITIES.—To participate with other States or terri20 tories in arrangements for the financing of a quali21 fied rural development purpose which is of interstate

22 character.

23 ‘‘(15) ASSISTANCE TO OTHER STATES FOR

24 RURAL DEVELOPMENT.—To make loans to another
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•HR 2590 IH

1 State or territory for a qualified rural development

2 purpose.

3 ‘‘(c) OTHER DEFINITIONS.—

4 ‘‘(1) AQUACULTURE.—The term ‘aquaculture’

5 means the culture or husbandry of aquatic animals

6 or plants by private industry for commercial pur7 poses including the culture and growing of fish by

8 private industry for the purpose of creating or aug9 menting publicly owned and regulated stocks of fish.

10 ‘‘(2) RURAL; RURAL AREA.—

11 ‘‘(A) IN GENERAL.—The terms ‘rural’ and

12 ‘rural area’ means all area of a State or terri13 tory that is not within the outer boundary of

14 any city having a population of 50,000 or more

15 individuals and its immediately adjacent urban16 ized and urbanizing areas with a population

17 density of more than 100 individuals per square

18 mile, according to the latest census data avail19 able.

20 ‘‘(B) COLONIAS INCLUDED.—The terms

21 ‘rural’ and ‘rural area’ include any identifiable

22 community that—

23 ‘‘(i) is in the State of Arizona, Cali24 fornia, New Mexico, or Texas;
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•HR 2590 IH

1 ‘‘(ii) is in the United States-Mexico

2 border region;

3 ‘‘(iii) is determined to be a colonia on

4 the basis of objective criteria, including

5 lack of potable water supply, lack of ade6 quate sewage systems, and lack of decent,

7 safe, and sanitary housing; and

8 ‘‘(iv) was in existence as a colonia be9 fore October 1, 1989.

10 ‘‘SEC. 704. ENFORCEMENT PROVISIONS.

11 ‘‘(a) REVIEW AND MONITORING.—The Rural Eco12 nomic and Community Development Director of a jurisdic13 tion to which a payment is made under section 702(a)

14 shall review and monitor compliance by the jurisdiction

15 with this title.

16 ‘‘(b) ENFORCEMENT RECOMMENDATIONS.—If the

17 Rural Economic and Community Development Director of

18 a jurisdiction, after reasonable notice to the jurisdiction,

19 finds that there has been a failure by the jurisdiction to

20 comply substantially with any provision or requirement of

21 this title, the Director shall notify the Secretary of the

22 noncompliance and recommend that the Secretary take 1

23 or more of the following actions:

24 ‘‘(1) Suspend payments to the jurisdiction

25 under section 702(a) until the Director is satisfied
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1 that the noncompliance has ceased or that the non2 compliance will be corrected promptly.

3 ‘‘(2) Recover any funds expended in violation of

4 this title.

5 ‘‘(3) Limit further payment to the jurisdiction

6 under section 702(a) to activities not affected by the

7 noncompliance, until the Director is satisfied that

8 the noncompliance has ceased or that the noncompli9 ance will be corrected promptly.

10 ‘‘(4) Offset the amounts improperly expended

11 against any other amount that is or will be payable

12 to the jurisdiction under section 702(a).

13 ‘‘(5) Refer the matter to the Attorney General

14 of the United States.

15 ‘‘(6) Disqualify the jurisdiction from the receipt

16 of payments under section 702(a) for 12 months.

17 ‘‘(7) Reduce payments to the jurisdiction under

18 section 702(a) for 12 months.

19 ‘‘(c) IMPOSITION OF PENALTIES.—Within 90 days

20 after receiving notice and a recommendation from the

21 Rural Economic and Community Development Director of

22 a jurisdiction pursuant to subsection (b) and after provid23 ing reasonable notice to the jurisdiction and opportunity

24 for a hearing, the Secretary shall, pursuant to a written

25 ruling which shall be based on the recommendation of the
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1 Director and the hearing, take any action described in

2 subsection (b) as the Secretary deems appropriate.

3 ‘‘(d) RURAL ECONOMIC AND COMMUNITY DEVELOP4 MENT DIRECTOR.—As used in this section, the term

5 ‘Rural Economic and Community Development Director’

6 means, with respect to a jurisdiction, the officer or em7 ployee of the United States Department of Agriculture

8 who is holding such position with respect to the jurisdic9 tion.’’.

10 SEC. 202. ELIMINATION OF OTHER RURAL DEVELOPMENT

11 PROGRAMS.

12 (a) UNDER THE CONSOLIDATED FARM AND RURAL

13 DEVELOPMENT ACT.—

14 (1) Section 304 of the Consolidated Farm and

15 Rural Development Act (7 U.S.C. 1924), as amend16 ed by sections 102(a)(1)(B)(i) and 108(f)(3) of this

17 Act, is amended by striking subsection (b) and re18 designating subsection (c) as subsection (b).

19 (2) Section 306 of such Act (7 U.S.C. 1926),

20 as amended by sections 108(f)(5) and 108(f)(6) of

21 this Act, is repealed.

22 (3) Section 306A of such Act (7 U.S.C. 1926a)

23 is repealed.

24 (4) Section 306B of such Act (7 U.S.C. 1926b)

25 is repealed.
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1 (5) Section 306C of such Act (7 U.S.C. 1926c),

2 as amended by sections 108(f)(7) and 108(f)(8) of

3 this Act, is repealed.

4 (6) Section 310A of such Act (7 U.S.C. 1931),

5 as amended by section 108(f)(17) of this Act, is re6 pealed.

7 (7) Section 310B of such Act (7 U.S.C. 1932),

8 as amended by section 103(f)(2) and paragraphs

9 (18), (19), and (20) of section 108(f) of this Act, is

10 repealed.

11 (8) Section 312 of such Act (7 U.S.C. 1942),

12 as amended by sections 102(b)(1)(B)(i),

13 102(b)(1)(B)(ii), 102(b)(3), 103(c)(1), and 105(a)

14 of this Act, is amended—

15 (A) in the 1st sentence of subsection (a)—

16 (i) by striking clauses (5), (6), (10),

17 and (11);

18 (ii) by adding ‘‘or’’ at the end of

19 clause (8);

20 (iii) by striking the comma at the end

21 of clause (9) and inserting a period; and

22 (iv) by redesignating clauses (7), (8),

23 and (9) as clauses (5), (6), and (7), respec24 tively; and
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1 (B) by striking subsections (b), (c), and

2 (d) and redesignating subsection (e) as sub3 section (b).

4 (9) Section 365 of such Act (7 U.S.C. 2008) is

5 repealed.

6 (10) Section 366 of such Act (7 U.S.C. 2008a)

7 is repealed.

8 (11) Section 367 of such Act (7 U.S.C. 2008b)

9 is repealed.

10 (12) Section 368 of such Act (7 U.S.C. 2008c)

11 is repealed.

12 (b) UNDER THE FOOD, AGRICULTURE, CONSERVA13 TION, AND TRADE ACT OF 1990.—

14 (1) Section 2281 of the Food, Agriculture, Con15 servation, and Trade Act of 1990 (42 U.S.C. 5177a)

16 is repealed.

17 (2) Subtitle B of title XXIII of such Act (7

18 U.S.C. 2007–2007e) is repealed.

19 (3) Section 2322 of such Act (7 U.S.C.

20 1926–1) is repealed.

21 (4) Section 2324 of such Act (7 U.S.C. 1926

22 note) is repealed.

23 (5) Section 2348 of such Act (7 U.S.C. 2662a)

24 is repealed.
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1 (6) Section 2381 of such Act (7 U.S.C. 3125b)

2 is repealed.

3 (7) Section 2382 of such Act (13 U.S.C. 141

4 note) is repealed.

5 (8) Section 2385 of such Act (7 U.S.C.

6 950aaa–4 note) is repealed.

7 (9) Section 2391 of such Act (7 U.S.C. 2662

8 note) is repealed.

9 (10) Section 2392 of such Act (13 U.S.C. 141

10 note) is repealed.

11 (11) Section 2517 of such Act (104 Stat. 4077)

12 is repealed.

13 (c) INDIAN SUBSISTENCE FARMING DEMONSTRA14 TION GRANT PROGRAM.—Subtitle C of title IX of the

15 Food, Agriculture, Conservation, and Trade Act Amend16 ments of 1991 (7 U.S.C. 5930 note) is repealed.

17 (d) INTERMEDIARY RELENDING PROGRAM.—Section

18 407 of the Human Services Reauthorization Act of 1986

19 (42 U.S.C. 9812a) is repealed.

20 (e) UNDER THE FOOD SECURITY ACT OF 1985.—

21 Section 1323 of the Food Security Act of 1985 (7 U.S.C.

22 1932 note) is repealed.

23 (f) UNDER THE RURAL DEVELOPMENT ACT OF

24 1972.—
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1 (1) Title V of the Rural Development Act of

2 1972 (7 U.S.C. 2661–2669) is repealed.

3 (2) Section 603 of such Act (7 U.S.C. 2204a)

4 is amended by striking subsection (c).

5 (g) UNDER THE RURAL ELECTRIFICATION ACT OF

6 1936.—

7 (1) Section 3 of the Rural Electrification Act of

8 1936 (7 U.S.C. 903) is repealed.

9 (2) Section 5 of such Act (7 U.S.C. 905) is re10 pealed.

11 (3) Section 311 of such Act (7 U.S.C. 940a) is

12 repealed.

13 (4) Title V of such Act (7 U.S.C. 950aa–

14 950aa–1) is repealed.

15 SEC. 203. CONFORMING AMENDMENTS.

16 (a) CONSOLIDATED FARM AND RURAL DEVELOP17 MENT ACT AMENDMENTS.—

18 (1) Section 307(a)(3) of the Consolidated Farm

19 and Rural Development Act (7 U.S.C. 1927(a)(3))

20 is amended—

21 (A) by striking subparagraphs (A) and

22 (C); and

23 (B) in subparagraph (B)—

24 (i) by striking ‘‘(B)’’;
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1 (ii) by redesignating clauses (i) and

2 (ii) as subparagraphs (A) and (B), respec3 tively; and

4 (iii) by redesignating subclauses (I)

5 and (II) of subparagraph (A) (as so redes6 ignated by clause (ii) of this subparagraph)

7 as clauses (i) and (ii), respectively.

8 (2) Section 307(a) of such Act (7 U.S.C.

9 1927(a)) is amended by striking paragraph (4).

10 (3) Section 307(a)(5) of such Act (7 U.S.C.

11 1927(a)(5)) is amended—

12 (A) by striking ‘‘(A) Except as provided in

13 subparagraph (B), the’’ and inserting ‘‘The’’;

14 and

15 (B) by striking subparagraph (B).

16 (4) Section 307(a)(6)(B) of such Act (7 U.S.C.

17 1927(a)(6)(B)) is amended—

18 (A) by adding ‘‘and’’ at the end of clause

19 (i); and

20 (B) by striking clauses (ii), (iii), (iv), (v),

21 and (vi) and redesignating clause (vii) as clause

22 (ii).

23 (5) Section 307(c) of such Act (7 U.S.C.

24 1927(c)) is amended by striking ‘‘, and for obliga25 tions in connection with loans to associations under
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•HR 2590 IH

1 section 306, shall take liens on the facility or such

2 other security as he may determine to be necessary’’.

3 (6) Section 309(g)(1) of such Act (7 U.S.C.

4 1929(g)(1)) is amended by striking ‘‘the last sen5 tence of section 306(a)(1),’’.

6 (7) Section 309A(a) of such Act (7 U.S.C.

7 1929a(a)) is amended by inserting ‘‘(as in effect be8 fore the effective date of subtitle B of the Farm

9 Credit and Rural Development Reform Act of

10 1995)’’ after each of ‘‘304(b)’’, ‘‘306(a)(1)’’,

11 ‘‘306(a)(14)’’, ‘‘310B’’, and ‘‘312(b)’’.

12 (8) Section 309A(a) of such Act (7 U.S.C.

13 1929a(a)) is amended by inserting ‘‘prior to the re14 peal of such sections by the Farm Credit and Rural

15 Development Reform Act of 1995,’’ after ‘‘312(b),’’.

16 (9) Section 309A(g)(8) of such Act (7 U.S.C.

17 1929a(g)(8)) is amended—

18 (A) by striking ‘‘make grants under sec19 tions 306(a) and 310B of this title,’’; and

20 (B) by striking ‘‘including costs of the Sec21 retary incidental to guaranteeing rural develop22 ment loans under this title,’’.

23 (10) Section 310C(a) of such Act (7 U.S.C.

24 1933(a)) is amended—
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1 (A) by redesignating clauses (1), (2), and

2 (3) as clauses (A), (B), and (C), respectively;

3 (B) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

4 (C) by adding after and below the end the

5 following:

6 ‘‘(2) As used in paragraph (1), the terms ‘rural’ and

7 ‘rural area’ shall not include any area in any city or town

8 which has a population in excess of 10,000 inhabitants.’’.

9 (11) Section 316(a) of such Act (7 U.S.C.

10 1946(a)), as amended by section 108(f)(24) of this

11 Act, is amended by striking paragraph (3).

12 (12) Section 331(b) of such Act (7 U.S.C.

13 1981(b)) is amended—

14 (A) by adding ‘‘and’’ at the end of para15 graph (7);

16 (B) in paragraph (8), by striking ‘‘; and’’

17 and inserting a period; and

18 (C) by striking paragraph (9).

19 (13) Section 333A(a) of such Act (7 U.S.C.

20 1983a(a)) is amended by striking paragraph (4).

21 (14) Section 344 of such Act (7 U.S.C. 1992),

22 as amended by section 108(f)(36) of this Act, is re23 pealed.

24 (b) DEPARTMENT OF AGRICULTURE REORGANIZA25 TION ACT OF 1994 AMENDMENTS.—
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1 (1) Section 232(c) of the Department of Agri2 culture Reorganization Act of 1994 (7 U.S.C.

3 6942(c)) is amended by striking paragraphs (1) and

4 (2) and inserting the following:

5 ‘‘(1) Electric and telephone loan programs and

6 water and waste facility activities authorized by law,

7 including the Rural Electrification Act of 1936 (7

8 U.S.C. 901 et seq.).

9 ‘‘(2) Water and waste facility programs and ac10 tivities authorized by law, including the provisions of

11 sections 309 and 309A of the Consolidated Farm

12 and Rural Development Act (7 U.S.C. 1929 and

13 1929a) relating to assets, terms, and conditions of

14 water and sewer programs, and section 35 of the

15 Bankhead-Jones Farm Tenant Act (7 U.S.C.

16 1013a).’’.

17 (2) Section 233(b) of such Act (7 U.S.C.

18 6943(b)) is amended—

19 (A) by striking paragraph (2); and

20 (B) in paragraph (3)—

21 (i) by striking ‘‘(3)’’ and inserting

22 ‘‘(2)’’; and

23 (ii) by striking ‘‘programs authorized

24 by sections 365 through’’ and inserting

25 ‘‘activities under section’’.
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1 (3) Section 234(b) of such Act (7 U.S.C.

2 6944(b)) is amended—

3 (A) in paragraph (1)—

4 (i) by striking ‘‘and title V of’’; and

5 (ii) by striking ‘‘and 950aa et seq.’’;

6 and

7 (B) by striking paragraph (3).

8 (c) NORTH AMERICAN FREE TRADE AGREEMENT IM9 PLEMENTATION ACT AMENDMENT.—Section 321(h)(2) of

10 the North American Free Trade Agreement Implementa11 tion Act (19 U.S.C. 3391(h)(2)) is amended by inserting

12 ‘‘(as in effect before the effective date of subtitle B of the

13 Farm Credit and Rural Development Reform Act of

14 1995)’’ before the period.

15 (d) FOOD, AGRICULTURE, CONSERVATION, AND

16 TRADE ACT OF 1990 AMENDMENTS.—

17 (1) Section 2375(e) of the Food, Agriculture,

18 Conservation, and Trade Act of 1990 (7 U.S.C.

19 6613(e)) is amended by inserting ‘‘(as in effect be20 fore the effective date of subtitle B of the Farm

21 Credit and Rural Development Reform Act of

22 1995)’’ before the comma.

23 (2) Effective 5 years after the effective date of

24 this subtitle, section 2375 of the Food, Agriculture,
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1 Conservation, and Trade Act of 1990 (7 U.S.C.

2 6613) is amended by striking subsection (e).

3 (e) COOPERATIVE FORESTRY ASSISTANCE ACT OF

4 1978 AMENDMENT.—Section 10(b)(3) of the Cooperative

5 Forestry Assistance Act of 1978 (7 U.S.C. 2106(b)(3))

6 is amended by striking ‘‘the first clause of section

7 306(a)(7)’’ and inserting ‘‘section 310C(a)(2)’’.

8 (f) THE ROBERT T. STAFFORD DISASTER RELIEF

9 AND EMERGENCY ASSISTANCE ACT AMENDMENT.—Sec10 tion 310(a) of The Robert T. Stafford Disaster Relief and

11 Emergency Assistance Act (42 U.S.C. 5153(a)) is amend12 ed by striking paragraph (4) and redesignating para13 graphs (5) through (7) as paragraphs (4) through (6), re14 spectively.

15 (g) COMMUNITY ECONOMIC DEVELOPMENT ACT OF

16 1981 AMENDMENTS.—Section 628 of the Community

17 Economic Development Act of 1981 (42 U.S.C. 9817) is

18 amended—

19 (1) by striking ‘‘, as amended’’ and all that fol20 lows through ‘‘1972’’ and inserting ‘‘and the Con21 solidated Farm and Rural Development Act’’; and

22 (2) by redesignating paragraph (3) as para23 graph (2).

24 (h) AGRICULTURAL ACT OF 1970 AMENDMENT.—

25 Section 901(b) of the Agricultural Act of 1970 (42 U.S.C.
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1 3122(b)) is amended by striking ‘‘as defined in the private

2 business enterprise exception in section 306(a)(7) of the

3 Consolidated Farmers Home Administration Act of 1961,

4 as amended (7 U.S.C. 1926)’’ and inserting ‘‘(as defined

5 in section 703(c)(2)(A) of the Rural Development Act of

6 1972)’’.

7 (i) RURAL ELECTRIFICATION ACT OF 1936 AMEND8 MENTS.—

9 (1) Section 4 of the Rural Electrification Act of

10 1936 (7 U.S.C. 904) is amended—

11 (A) by inserting ‘‘(as in effect before the

12 effective date of subtitle B of the Farm Credit

13 and Rural Development Reform Act of 1995)’’

14 after ‘‘3(d) and 3(e)’’; and

15 (B) by striking ‘‘and section 5’’.

16 (2) Section 7 of such Act (7 U.S.C. 907) is

17 amended by striking ‘‘authorized in section 3 of’’

18 and inserting ‘‘appropriated to carry out’’.

19 (3) Section 12 of such Act (7 U.S.C. 912) is

20 amended—

21 (A) in subsection (a)—

22 (i) by inserting ‘‘(as in effect before

23 the effective date of subtitle B of the Farm

24 Credit and Rural Development Reform Act

25 of 1995)’’ after ‘‘section 5’’; and
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1 (ii) by inserting ‘‘(as in effect before

2 the effective date of subtitle B of the Farm

3 Credit and Rural Development Reform Act

4 of 1995)’’ before the period; and

5 (B) in subsection (b)(3)(D), by striking the

6 3rd sentence.

7 (4) Section 201 of such Act (7 U.S.C. 922) is

8 amended by striking ‘‘pursuant to section 3 of the

9 Rural Electrification Act of 1936, as amended,’’.

10 (5) Section 301(a) of such Act (7 U.S.C.

11 931(a)) is amended—

12 (A) in paragraph (2), by inserting ‘‘(as in

13 effect before the effective date of subtitle B of

14 the Farm Credit and Rural Development Re15 form Act of 1995)’’ after ‘‘5’’; and

16 (B) in paragraph (3), by striking ‘‘notwith17 standing section 3(a) of title I,’’.

18 (6) Section 302 of such Act (7 U.S.C. 932) is

19 amended—

20 (A) in each of subsections (a) and (b)(1),

21 by inserting ‘‘(before the effective date of sub22 title B of the Farm Credit and Rural Develop23 ment Reform Act of 1995)’’ after ‘‘5’’; and

24 (B) in subsection (b)(2), by striking ‘‘pur25 suant to section 3(a) of this Act’’ and inserting
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1 ‘‘before the effective date of subtitle B of the

2 Farm Credit and Rural Development Reform

3 Act of 1995’’.

4 (7) Section 406(a) of such Act (7 U.S.C.

5 946(a)) is amended in the 2nd sentence by inserting

6 ‘‘(as in effect before the effective date of subtitle B

7 of the Farm Credit and Rural Development Reform

8 Act of 1995)’’ before the period.

9 SEC. 204. SAVINGS PROVISION.

10 This subtitle and the amendments made by this sub11 title shall not be construed to affect any obligation entered

12 into before the effective date of this subtitle.

13 SEC. 205. EFFECTIVE DATE.

14 This subtitle and the amendments made by this sub15 title shall take effect on October 1, 1996.

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