I 

110TH CONGRESS 

1ST SESSION H. R. 2348 

To amend the Farm Security and Rural Development Act of 2002 to support 

beginning farmers and ranchers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 16, 2007 

Ms. HERSETH SANDLIN (for herself, Mr. WALZ of Minnesota, and Ms. 

MCCOLLUM of Minnesota) introduced the following bill; which was referred to the Committee on Agriculture 

A BILL 

To amend the Farm Security and Rural Development Act 

of 2002 to support beginning farmers and ranchers, 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, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

5 ‘‘Beginning Farmer and Rancher Opportunity Act of 

6 2007’’. 

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

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Beginning farmer and rancher development program. 

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Sec. 3. Beginning farmer and rancher individual development accounts pilot 

program. 

Sec. 4. Down payment loan program. 

Sec. 5. Beginning farmer or rancher contract land sales program. 

Sec. 6. Inventory sales preferences. 

Sec. 7. Agricultural loans. 

Sec. 8. Loan authorization levels and fund set-asides. 

Sec. 9. Soil and water conservation and protection. 

Sec. 10. Conservation Reserve Program transition incentives. 

Sec. 11. Conservation cost sharing. 

Sec. 12. Research programs. 

Sec. 13. Risk management education for beginning farmers or ranchers. 

1 SEC. 2. BEGINNING FARMER AND RANCHER DEVELOPMENT 

2 PROGRAM. 

3 (a) GRANTS.—Section 7405(c) of the Farm Security 

4 and Rural Investment Act of 2002 (7 U.S.C. 3319f(c)) 

5 is amended— 

6 (1) in paragraph (1)— 

7 (A) in subparagraph (I), by inserting ‘‘, in8 cluding energy conservation and efficiency’’ be9 fore the semicolon; and 

10 (B) in subparagraph (K), by inserting ‘‘, 

11 including transition to organic and other 

12 source-verified and value-added alternative pro13 duction and marketing systems’’; 

14 (2) by striking paragraph (3) and inserting the 

15 following: 

16 ‘‘(3) MAXIMUM TERM AND SIZE OF GRANT.— 

17 ‘‘(A) IN GENERAL.—A grant under this 

18 subsection shall— 

19 ‘‘(i) have a term that is not more than 

20 3 years; and 

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1 ‘‘(ii) be in an amount that is not more 

2 than $250,000 a year. 

3 ‘‘(B) CONSECUTIVE GRANTS.—An eligible 

4 recipient may receive consecutive grants under 

5 this subsection.’’; 

6 (3) by redesignating paragraphs (5) through 

7 (7) as paragraphs (9) through (11), respectively; 

8 (4) by inserting after paragraph (4) the fol9 lowing: 

10 ‘‘(5) EVALUATION CRITERIA.—In making 

11 grants under this subsection, the Secretary shall 

12 evaluate— 

13 ‘‘(A) relevancy; 

14 ‘‘(B) technical merit; 

15 ‘‘(C) achievability; 

16 ‘‘(D) the expertise and track record of the 

17 principal partners; 

18 ‘‘(E) the adequacy of plans for 

19 participatory evaluation process, outcome-based 

20 reporting, and the communication of findings 

21 and results beyond the immediate target audi22 ence; and 

23 ‘‘(F) other appropriate factors, as deter24 mined by the Secretary. 

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1 ‘‘(6) REGIONAL BALANCE.—In making grants 

2 under this section, the Secretary shall, to the max3 imum extent practicable, ensure geographic diver4 sity. 

5 ‘‘(7) ORGANIC CONVERSION.—The Secretary 

6 may make grants under this section to support 

7 projects that provide comprehensive technical assist8 ance to beginning farmers or ranchers who are in 

9 the process of converting to certified organic produc10 tion. 

11 ‘‘(8) PRIORITY.—In making grants under this 

12 section, the Secretary shall give priority to partner13 ships and collaborations that are led by or include 

14 non-governmental and community-based organiza15 tions with expertise in new farmer training and out16 reach.’’; and 

17 (5) in paragraph (9) (as redesignated by para18 graph (3))— 

19 (A) in subparagraph (B), by striking 

20 ‘‘and’’ at the end; 

21 (B) in subparagraph (C), by striking the 

22 period and adding ‘‘; and’’; and 

23 (C) by adding at the end the following: 

24 ‘‘(D) farmers or ranchers that are refugees 

25 or immigrants (as those terms are defined in 

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1 section 101(a) of the Immigration and Nation2 ality Act (8 U.S.C. 1101(a)).’’. 

3 (6) EDUCATION TEAMS.—Section 7405(d)(2) of 

4 the Farm Security and Rural Investment At of 2002 

5 (7 U.S.C. 3319f(d)(2)) is amended by inserting 

6 ‘‘and including sustainable and organic farming pro7 duction and marketing methods’’ before the period 

8 at the end. 

9 (b) STAKEHOLDER INPUT.—Section 7405(f) of the 

10 Farm Security and Rural Investment At of 2002 (7 

11 U.S.C. 3319f(f)) is amended— 

12 (1) by redesignating paragraphs (1) through 

13 (3) as subparagraphs (A) through (C), respectively, 

14 and indenting appropriately; 

15 (2) by striking ‘‘In carrying out’’ and inserting 

16 the following: 

17 ‘‘(1) IN GENERAL.—In carrying out’’; and 

18 (3) by adding at the end the following: 

19 ‘‘(2) REVIEW PANELS.—In forming review pan20 els to evaluate proposals submitted under this sec21 tion, the Secretary shall include individuals from the 

22 categories described in paragraph (1).’’. 

23 (c) FUNDING.—Section 7405(h) of the Farm Secu24 rity and Rural Investment At of 2002 (7 U.S.C. 3319f(h)) 

25 is amended to read as follows: 

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1 ‘‘(h) FUNDING.— 

2 ‘‘(1) IN GENERAL.—On October 1, 2007, and 

3 on each October 1 thereafter through October 1, 

4 2011, out of any funds in the Treasury not other5 wise appropriated, the Secretary of the Treasury 

6 shall transfer to the Secretary to carry out this sec7 tion $25,000,000, to remain available for 2 fiscal 

8 years. 

9 ‘‘(2) RECEIPT AND ACCEPTANCE.—The Sec10 retary shall be entitled to receive, shall accept, and 

11 shall use to carry out this section the funds trans12 ferred under paragraph (1), without further appro13 priation. 

14 ‘‘(3) LIMITATION.—The Secretary shall use not 

15 more than 10 percent of the total funds made avail16 able under paragraph (1) to carry out subsections 

17 (d) and (e).’’. 

18 SEC. 3. BEGINNING FARMER AND RANCHER INDIVIDUAL 

19 DEVELOPMENT ACCOUNTS PILOT PROGRAM. 

20 The Consolidated Farm and Rural Development Act 

21 is amended by adding after section 333A (7 U.S.C. 1983a) 

22 the following: 

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1 ‘‘SEC. 333B. BEGINNING FARMER AND RANCHER INDI2 VIDUAL DEVELOPMENT ACCOUNTS PILOT 

3 PROGRAM. 

4 ‘‘(a) DEFINITIONS.—In this section: 

5 ‘‘(1) DEMONSTRATION PROGRAM.—The term 

6 ‘demonstration program’ means a demonstration 

7 program carried out by a qualified entity under the 

8 pilot program established in subsection (b)(1). 

9 ‘‘(2) ELIGIBLE PARTICIPANT.—The term ‘eligi10 ble participant’ means a qualified beginning farmer 

11 or rancher that— 

12 ‘‘(A) has knowledge, experience, and a 

13 demonstrated commitment to agriculture; 

14 ‘‘(B) lacks significant financial resources 

15 or assets; and 

16 ‘‘(C) has an income that is less than— 

17 ‘‘(i) 80 percent of the median income 

18 of the area in which the eligible participant 

19 is located; or 

20 ‘‘(ii) 200 percent of the most recent 

21 Federal Poverty Income Guidelines pub22 lished by the Department of Health and 

23 Human Services. 

24 ‘‘(3) INDIVIDUAL DEVELOPMENT ACCOUNT.— 

25 The term ‘individual development account’ means a 

26 savings account described in subsection (b)(4)(A). 

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1 ‘‘(4) QUALIFIED ENTITY.— 

2 ‘‘(A) IN GENERAL.—The term ‘qualified 

3 entity’ means— 

4 ‘‘(i) 1 or more organizations— 

5 ‘‘(I) described in section 

6 501(c)(3) of the Internal Revenue 

7 Code of 1986; and 

8 ‘‘(II) exempt from taxation under 

9 section 501(a) of such Code; or 

10 ‘‘(ii) a State, local, or tribal govern11 ment submitting an application jointly with 

12 an organization described in clause (i). 

13 ‘‘(B) NO PROHIBITION ON COLLABORA14 TION.—An organization described in subpara15 graph (A)(i) may collaborate with a financial 

16 institution or for-profit community development 

17 corporation to carry out the purposes of this 

18 section. 

19 ‘‘(b) PILOT PROGRAM.— 

20 ‘‘(1) IN GENERAL.—The Secretary shall estab21 lish a pilot program to be known as the ‘New Farm22 er Individual Development Accounts Pilot Program’ 

23 under which the Secretary shall work through quali24 fied entities to establish demonstration programs— 

25 ‘‘(A) of at least 5 years in duration; and 

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1 ‘‘(B) in at least 15 States. 

2 ‘‘(2) COORDINATION.—The Secretary shall op3 erate the pilot program through, and in coordination 

4 with the farm loan programs of, the Farm Service 

5 Agency. 

6 ‘‘(3) RESERVE FUNDS.— 

7 ‘‘(A) IN GENERAL.—Each demonstration 

8 program shall establish a reserve fund con9 sisting of a non-Federal match of 25 percent of 

10 the total amount of the grant awarded to the 

11 demonstration program under this section. 

12 ‘‘(B) FEDERAL FUNDS.—After a dem13 onstration program has deposited in the reserve 

14 fund the non-Federal matching funds described 

15 in subparagraph (A), the Secretary shall pro16 vide to the demonstration program for deposit 

17 in the reserve fund the total amount of the 

18 grant awarded under this section. 

19 ‘‘(C) USE OF FUNDS.—Of the Federal 

20 funds deposited in a reserve fund under sub21 paragraphs (A) and (B), a demonstration pro22 gram— 

23 ‘‘(i) may use up to 20 percent for ad24 ministrative expenses; and 

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1 ‘‘(ii) shall use the remainder to make 

2 matching awards described in paragraph 

3 (4)(B)(ii)(I). 

4 ‘‘(D) INTEREST.—Any interest earned on 

5 amounts in a reserve fund established under 

6 subparagraph (A) may be used as additional 

7 matching funds for, or to administer, the dem8 onstration program. 

9 ‘‘(E) GUIDANCE.—The Secretary shall im10 plement guidance regarding the investment re11 quirements of reserve funds established under 

12 this paragraph. 

13 ‘‘(4) INDIVIDUAL DEVELOPMENT ACCOUNTS.— 

14 ‘‘(A) IN GENERAL.—A demonstration pro15 gram shall establish and administer an indi16 vidual development account for each eligible 

17 participant. 

18 ‘‘(B) CONTRACT REQUIREMENTS.—To be 

19 eligible to receive funds under this section, each 

20 eligible participant shall enter into a contract 

21 with a demonstration program under which— 

22 ‘‘(i) the eligible participant shall 

23 agree— 

24 ‘‘(I) to deposit a certain amount 

25 of funds of the eligible participant in 

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1 a personal savings account, as pre2 scribed by the contractual agreement 

3 between the eligible participant and 

4 the demonstration program; 

5 ‘‘(II) to use the funds described 

6 in subclause (I) only for 1 or more eli7 gible expenditures described in para8 graph (5)(A); 

9 ‘‘(III) to forfeit any right to 

10 amounts in the individual development 

11 account in any case in which the eligi12 ble participant is more than 1 month 

13 delinquent in fulfilling the obligation 

14 under subclause (I) or in which the el15 igible participant uses funds described 

16 in that subclause for a purpose other 

17 than an eligible expenditure; and 

18 ‘‘(IV) to complete qualified finan19 cial training; and 

20 ‘‘(ii) the demonstration program shall 

21 agree— 

22 ‘‘(I) to deposit not later than 1 

23 month after a deposit described in 

24 clause (i)(I) a 300-percent match of 

25 that amount into the individual develVerDate Aug 31 2005 02:23 May 18, 2007 Jkt 059200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2348.IH H2348
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1 opment account established for the el2 igible participant; 

3 ‘‘(II) to use the funds described 

4 in subclause (I) only for 1 or more eli5 gible expenditures selected by the eli6 gible participant; and 

7 ‘‘(III) to provide a financial edu8 cation course to all eligible partici9 pants. 

10 ‘‘(C) LIMITATION.— 

11 ‘‘(i) IN GENERAL.—A demonstration 

12 program may provide not more than 

13 $9,000 for each fiscal year in matching 

14 funds to any eligible participant. 

15 ‘‘(ii) TREATMENT OF AMOUNT.—An 

16 amount provided under clause (i) shall not 

17 be considered to be a gift or loan. 

18 ‘‘(D) FORFEITS.—Any amounts forfeited 

19 under subparagraph (B)(i)(III) shall be re20 turned to the reserve fund of the demonstration 

21 program. 

22 ‘‘(E) INTEREST.—Any interest earned on 

23 amounts in an individual development account 

24 shall be compounded with amounts otherwise 

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1 deposited in the individual development ac2 count. 

3 ‘‘(F) TREATMENT OF FUNDS.— 

4 ‘‘(i) IN GENERAL.—Of the funds de5 scribed in this paragraph, only the funds 

6 deposited by the eligible participant in a 

7 personal savings account under subpara8 graph (A)(i)(I) (including interest accruing 

9 on those funds) may be considered to be 

10 income. 

11 ‘‘(ii) DETERMINATION OF ELIGIBILITY

12 AND AMOUNT.—For purposes of deter13 mining eligibility for, or the amount of as14 sistance provided under, any need-based 

15 Federal or federally-assisted program, 

16 amounts held in an individual development 

17 account shall be excluded. 

18 ‘‘(5) ELIGIBLE EXPENDITURES.— 

19 ‘‘(A) IN GENERAL.—An eligible expendi20 ture described in this subparagraph is an ex21 penditure— 

22 ‘‘(i) to purchase farmland; 

23 ‘‘(ii) to make a down payment on an 

24 accepted purchase offer for farmland; 

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1 ‘‘(iii) to make mortgage payments for 

2 up to 180 days after the date of purchase 

3 of farmland; 

4 ‘‘(iv) to purchase farm equipment or 

5 production, storage, or marketing infra6 structure; 

7 ‘‘(v) to purchase breeding stock; 

8 ‘‘(vi) to purchase fruit or nut trees or 

9 trees to harvest for timber; 

10 ‘‘(vii) to purchase other assets that 

11 improve the financial viability of the farm12 ing operation; 

13 ‘‘(viii) to make a transition to organic 

14 production; 

15 ‘‘(ix) to pay training or mentorship 

16 expenses to facilitate specific entrepre17 neurial agricultural activities; and 

18 ‘‘(x) for other similar expenditures, as 

19 determined by the Secretary. 

20 ‘‘(B) TIMING.— 

21 ‘‘(i) IN GENERAL.—An eligible ex22 penditure may be made at any time during 

23 the 2-year period beginning on the date on 

24 which the last matching funds are provided 

25 under paragraph (4)(B)(ii)(I). 

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1 ‘‘(ii) UNEXPENDED FUNDS.—Funds 

2 remaining in an individual development ac3 count after the period described in clause 

4 (i) shall revert to the reserve fund of the 

5 demonstration program. 

6 ‘‘(c) APPLICATIONS.— 

7 ‘‘(1) ANNOUNCEMENT OF DEMONSTRATION

8 PROGRAMS.—Not later than 180 days after the date 

9 of enactment of this section, the Secretary shall— 

10 ‘‘(A) publicly announce the availability of 

11 funding under this section for demonstration 

12 programs; and 

13 ‘‘(B) ensure that applications to carry out 

14 demonstration programs are widely available to 

15 qualified entities. 

16 ‘‘(2) SUBMISSION.—Not later than 270 days 

17 after the date of enactment of this section, a quali18 fied entity may submit to the Secretary an applica19 tion to carry out a demonstration program. 

20 ‘‘(3) CRITERIA.—In considering whether to ap21 prove an application to carry out a demonstration 

22 program, the Secretary shall assess— 

23 ‘‘(A) the degree to which the demonstra24 tion program described in the application is 

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1 likely to aid eligible participants in successfully 

2 pursuing new farming opportunities; 

3 ‘‘(B) the experience and ability of the 

4 qualified entity to responsibly administer the 

5 project; 

6 ‘‘(C) the experience and ability of the 

7 qualified entity in recruiting, educating, and as8 sisting eligible participants to increase economic 

9 independence and pursue or advance farming 

10 opportunities; 

11 ‘‘(D) the aggregate amount of direct funds 

12 from non-Federal public sector and private 

13 sources that are formally committed to the 

14 demonstration program as matching contribu15 tions; 

16 ‘‘(E) the adequacy of the plan for pro17 viding information relevant to an evaluation of 

18 the demonstration program; and 

19 ‘‘(F) such other factors as the Secretary 

20 considers to be appropriate. 

21 ‘‘(4) PREFERENCES.—In considering an appli22 cation to conduct a demonstration program under 

23 this part, the Secretary shall give preference to an 

24 application from a qualified entity that— 

25 ‘‘(A) demonstrates— 

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1 ‘‘(i) a track record of serving targeted 

2 clients; and 

3 ‘‘(ii) expertise in dealing with finan4 cial management aspects of farming; or 

5 ‘‘(B)(i) targets underserved and socially 

6 disadvantaged farmers or ranchers; and 

7 ‘‘(ii) demonstrates a track record of reach8 ing and serving those clients. 

9 ‘‘(5) APPROVAL.— 

10 ‘‘(A) IN GENERAL.—Not later than 1 year 

11 after the date of enactment of this section, in 

12 accordance with this section, the Secretary 

13 shall, on a competitive basis, approve such ap14 plications to conduct demonstration programs 

15 as the Secretary considers appropriate. 

16 ‘‘(B) DIVERSITY.—The Secretary shall en17 sure, to the maximum extent practicable, that 

18 approved applications involve demonstration 

19 programs for a range of geographic areas and 

20 diverse populations. 

21 ‘‘(6) TERM OF AUTHORITY.—If the Secretary 

22 approves an application to carry out a demonstration 

23 program, the Secretary shall authorize the applying 

24 qualified entity to carry out the project for a period 

25 of 5 years, plus an additional 2 years for the making 

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1 of eligible expenditures in accordance with sub2 section (b)(5)(B). 

3 ‘‘(d) GRANT AUTHORITY.— 

4 ‘‘(1) IN GENERAL.—For each year during which 

5 a demonstration program is carried out under this 

6 section, the Secretary shall make a grant to the 

7 qualified entity authorized to carry out the dem8 onstration program. 

9 ‘‘(2) MAXIMUM AMOUNT OF GRANTS.—The ag10 gregate amount of grant funds provided to a dem11 onstration program carried out under this section 

12 shall not exceed $300,000. 

13 ‘‘(e) REPORTS.— 

14 ‘‘(1) ANNUAL PROGRESS REPORTS.— 

15 ‘‘(A) IN GENERAL.—Not later than 60 

16 days after the end of the calendar year in which 

17 the Secretary authorizes a qualified entity to 

18 carry out a demonstration program, and annu19 ally thereafter until the conclusion of the dem20 onstration program, the qualified entity shall 

21 prepare an annual report that includes, for the 

22 period covered by the report— 

23 ‘‘(i) an evaluation of the progress of 

24 the demonstration program; 

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1 ‘‘(ii) information about the dem2 onstration program and eligible partici3 pants; 

4 ‘‘(iii) the number and characteristics 

5 of individuals that have made 1 or more 

6 deposits into an individual development ac7 count; 

8 ‘‘(iv) the amounts in the reserve fund 

9 established with respect to the program; 

10 ‘‘(v) the amounts deposited in the in11 dividual development accounts; 

12 ‘‘(vi) the amounts withdrawn from the 

13 individual development accounts and the 

14 purposes for which the amounts were with15 drawn; 

16 ‘‘(vii) the balances remaining in the 

17 individual development accounts; 

18 ‘‘(viii)(I) the development account 

19 characteristics (such as threshold amounts 

20 and match rates) required to stimulate 

21 participation in the demonstration pro22 gram; and 

23 ‘‘(II) how the characteristics vary 

24 among different populations or commu25 nities; 

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1 ‘‘(ix)(I) what service configurations of 

2 the qualified entity (such as peer support, 

3 structured planning exercises, mentoring, 

4 and financial management) increased the 

5 rate and consistency of participation in the 

6 demonstration program; and 

7 ‘‘(II) how the configurations varied 

8 among different populations or commu9 nities; and 

10 ‘‘(x) such other information as the 

11 Secretary may require. 

12 ‘‘(B) SUBMISSION OF REPORTS.—A quali13 fied entity shall submit each report required 

14 under subparagraph (A) to the Secretary. 

15 ‘‘(C) 5-YEAR EVALUATION.—In addition to 

16 the annual evaluations required under subpara17 graph (A)(i), not later than 5 years after the 

18 date on which a qualified entity begins to carry 

19 out a demonstration program, the qualified en20 tity shall submit to the Secretary a comprehen21 sive evaluation of the demonstration program. 

22 ‘‘(2) REPORTS BY THE SECRETARY.— 

23 ‘‘(A) INTERIM REPORTS.—Not later than 

24 90 days after the end of the calendar year in 

25 which the Secretary first authorizes a qualified 

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1 entity to carry out a demonstration program 

2 under this section, and annually thereafter until 

3 all demonstration programs are completed, the 

4 Secretary shall submit to Congress an interim 

5 report that describes the reports submitted by 

6 each demonstration program under paragraph 

7 (1). 

8 ‘‘(B) FINAL REPORTS.—Not later than 1 

9 year after the date on which all demonstration 

10 programs under this section are concluded, the 

11 Secretary shall submit to Congress a final re12 port that describes the results and findings of 

13 all reports and evaluations carried out under 

14 this section. 

15 ‘‘(f) REGULATIONS.—The Secretary shall promulgate 

16 regulations to carry out this section, including regulations 

17 relating to— 

18 ‘‘(1) the termination of demonstration pro19 grams; 

20 ‘‘(2) control of the reserve funds in the case of 

21 such a termination; 

22 ‘‘(3) transfer of demonstration programs to 

23 other qualified entities; and 

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1 ‘‘(4) remissions from a reserve fund in a case 

2 in which a demonstration program is terminated 

3 without transfer to a new qualified entity. 

4 ‘‘(g) FUNDING.— 

5 ‘‘(1) IN GENERAL.—On October 1, 2007, and 

6 on each October 1 thereafter through October 1, 

7 2012, out of any funds in the Treasury not other8 wise appropriated, the Secretary of the Treasury 

9 shall transfer to the Secretary to carry out this sec10 tion $5,000,000, to remain available until expended. 

11 ‘‘(2) ADMINISTRATION AND TRAINING.—Of the 

12 total funds made available under paragraph (1), not 

13 more than 5 percent for administration and 5 per14 cent for training may be used by the Secretary— 

15 ‘‘(A) to administer the pilot program; and 

16 ‘‘(B) to provide training, or hire 1 or more 

17 consultants to provide training, to instruct 

18 qualified entities in carrying out demonstration 

19 programs, including payment of reasonable 

20 costs incurred with respect to that training 

21 for— 

22 ‘‘(i) staff or consultant travel; 

23 ‘‘(ii) lodging; 

24 ‘‘(iii) meals; and 

25 ‘‘(iv) materials. 

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1 ‘‘(3) RECEIPT AND ACCEPTANCE.—The Sec2 retary shall be entitled to receive, shall accept, and 

3 shall use to carry out this section the funds trans4 ferred under paragraph (1), without further appro5 priation.’’. 

6 SEC. 4. DOWN PAYMENT LOAN PROGRAM. 

7 Section 310E of the Consolidated Farm and Rural 

8 Development Act (7 U.S.C. 1935) is amended— 

9 (1) in subsection (b)— 

10 (A) by striking paragraph (1) and insert11 ing the following: 

12 ‘‘(1) PRINCIPAL.— 

13 ‘‘(A) PURCHASE PRICE OF $500,000 OR

14 LESS.—Except as provided in subparagraph 

15 (C), each loan made under this section for a 

16 purchase price that is $500,000 or less, shall be 

17 in an amount that does not exceed 45 percent 

18 of the lesser of— 

19 ‘‘(i) the purchase price; or 

20 ‘‘(ii) the appraised value of the farm 

21 or ranch to be acquired. 

22 ‘‘(B) PURCHASE PRICE GREATER THAN

23 $500,000.—Except as provided in subparagraph 

24 (C), each loan made under this section for a 

25 purchase price that is greater than $500,000, 

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1 shall be in an amount that does not exceed 45 

2 percent of the lesser of— 

3 ‘‘(i) $500,000; or 

4 ‘‘(ii) the appraised value of the farm 

5 or ranch to be acquired. 

6 ‘‘(C) BORROWER REQUEST.—A borrower 

7 may request a lower loan amount than an 

8 amount specified in subparagraph (A) or (B).’’; 

9 (B) by striking paragraph (2) and insert10 ing the following: 

11 ‘‘(2) INTEREST RATE.—The interest rate on 

12 any loan made by the Secretary under this section 

13 shall be a rate equal to the greater of— 

14 ‘‘(A) the difference obtained by subtracting 

15 4 percent from the interest rate for regular 

16 ownership loans under this subtitle; or 

17 ‘‘(B) 1 percent.’’; and 

18 (C) in paragraph (4)— 

19 (i) by striking ‘‘Each’’ and inserting 

20 the following: 

21 ‘‘(A) IN GENERAL.—Each’’; and 

22 (ii) by adding at the end the fol23 lowing: 

24 ‘‘(B) FIRST INSTALLMENT.—The first in25 stallment for a loan made under this section 

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1 shall be due 2 years after the date on which the 

2 loan is made, with annual installments being 

3 due thereafter.’’; 

4 (2) in subsection (c)— 

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

6 (B) by redesignating paragraph (3) as 

7 paragraph (2); and 

8 (3) in subsection (d)— 

9 (A) in paragraph (3), by striking the 

10 ‘‘and’’ at the end; 

11 (B) in paragraph (4), by striking the pe12 riod at the end and inserting ‘‘; and’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(5) establish annual performance goals to pro15 mote the use of the down payment loan program and 

16 other joint financing participation loans as the pre17 ferred choice for direct real estate loans made by 

18 any lender to a qualified beginning farmer or ranch19 er.’’. 

20 SEC. 5. BEGINNING FARMER OR RANCHER CONTRACT 

21 LAND SALES PROGRAM. 

22 Section 310F of the Consolidated Farm and Rural 

23 Development Act (7 U.S.C. 1936) is amended to read as 

24 follows: 

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1 ‘‘SEC. 310F. BEGINNING FARMER OR RANCHER CONTRACT 

2 LAND SALES PROGRAM. 

3 ‘‘(a) IN GENERAL.—Subject to subsection (c), the 

4 Secretary shall, in accordance with each condition de5 scribed in subsection (b), guarantee any loan made by a 

6 private seller of a farm or ranch to a qualified beginning 

7 farmer or rancher on a contract land sale basis. 

8 ‘‘(b) CONDITIONS FOR GUARANTEE.—To receive a 

9 guarantee for a loan by the Secretary under subsection 

10 (a)— 

11 ‘‘(1) the qualified beginning farmer or rancher 

12 shall— 

13 ‘‘(A) on the date on which the contract 

14 land sale that is the subject of the loan is com15 plete, own or operate the farm or ranch that is 

16 the subject of the contract land sale; 

17 ‘‘(B) have a credit history that— 

18 ‘‘(i) includes a record of satisfactory 

19 debt repayment, as determined by the Sec20 retary; and 

21 ‘‘(ii) is acceptable to the Secretary; 

22 and 

23 ‘‘(C) demonstrate to the Secretary that the 

24 qualified beginning farmer or rancher is unable 

25 to obtain sufficient credit without a guarantee 

26 to finance any actual need of the qualified beVerDate Aug 31 2005 02:23 May 18, 2007 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H2348.IH H2348
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1 ginning farmer or rancher at a reasonable rate 

2 or term; 

3 ‘‘(2) the loan made by the private seller of a 

4 farm or ranch to the qualified beginning farmer or 

5 rancher on a contract land sale basis shall meet ap6 plicable underwriting criteria, as determined by the 

7 Secretary; and 

8 ‘‘(3) to carry out the loan— 

9 ‘‘(A) a commercial lending institution shall 

10 agree to serve as an escrow agent; or 

11 ‘‘(B) the private seller of a farm or ranch, 

12 in cooperation with the qualified beginning 

13 farmer or rancher, shall use an appropriate al14 ternate arrangement, as determined by the Sec15 retary. 

16 ‘‘(c) LIMITATIONS.— 

17 ‘‘(1) DOWN PAYMENT.—The Secretary shall not 

18 guarantee a loan made by a private seller of a farm 

19 or ranch to a qualified beginning farmer or rancher 

20 under subsection (a) if the contribution of the quali21 fied beginning farmer or rancher to the down pay22 ment for the farm or ranch that is the subject of the 

23 contract land sale would be an amount less than 5 

24 percent of the purchase price of the farm or ranch. 

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1 ‘‘(2) MAXIMUM PURCHASE PRICE.—The Sec2 retary shall not guarantee a loan made by a private 

3 seller of a farm or ranch to a qualified beginning 

4 farmer or rancher under subsection (a) if the pur5 chase price or the appraisal value of the farm or 

6 ranch that is the subject of the contract land sale 

7 is an amount greater than $500,000. 

8 ‘‘(d) PERIOD OF GUARANTEE.—The Secretary shall 

9 guarantee a loan made by a private seller of a farm or 

10 ranch to a qualified beginning farmer or rancher under 

11 subsection (a) for a 10-year period beginning on the date 

12 on which the Secretary guarantees the loan. 

13 ‘‘(e) GUARANTEE PLANS.—A private seller of a farm 

14 or ranch who makes a loan to a qualified beginning farmer 

15 or rancher that is guaranteed by the Secretary under sub16 section (a) may select— 

17 ‘‘(1) a prompt payment guarantee plan, which 

18 shall cover— 

19 ‘‘(A) 3 amortized annual installments; or 

20 ‘‘(B) an amount equal to 3 annual install21 ments (including an amount equal to the total 

22 cost of any tax and insurance incurred during 

23 the period covered by the annual installments); 

24 or 

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1 ‘‘(2) a standard guarantee plan, which shall 

2 cover an amount equal to 90 percent of the out3 standing principal of the loan made by the private 

4 seller of a farm or ranch to the qualified beginning 

5 farmer or rancher.’’. 

6 SEC. 6. INVENTORY SALES PREFERENCES. 

7 Section 335(c) of the Consolidated Farm and Rural 

8 Development Act (7 U.S.C. 1985(c)) is amended— 

9 (1) in paragraph (1)— 

10 (A) in subparagraph (B)— 

11 (i) in the subparagraph heading, by 

12 inserting ‘‘; SOCIALLY DISADVANTAGED

13 FARMER OR RANCHER’’ after ‘‘OR RANCH14 ER’’; 

15 (ii) in clause (i), by inserting ‘‘or a so16 cially disadvantaged farmer or rancher’’ 

17 after ‘‘or rancher’’; 

18 (iii) in clause (ii), by inserting ‘‘or so19 cially disadvantaged farmer or rancher’’ 

20 after ‘‘or rancher’’; 

21 (iv) in clause (iii), by inserting ‘‘or a 

22 socially disadvantaged farmer or rancher’’ 

23 after ‘‘or rancher’’; and 

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1 (v) in clause (iv), by inserting ‘‘and 

2 socially disadvantaged farmers and ranch3 ers’’ after ‘‘and ranchers’’; and 

4 (B) in subparagraph (C), by inserting ‘‘or 

5 a socially disadvantaged farmer or rancher’’ 

6 after ‘‘or rancher’’; 

7 (2) in paragraph (5)(B)— 

8 (A) in clause (i)— 

9 (i) in the clause heading, by inserting 

10 ‘‘; SOCIALLY DISADVANTAGED FARMER OR

11 RANCHER’’ after ‘‘OR RANCHER’’; 

12 (ii) by inserting ‘‘or a socially dis13 advantaged farmer or rancher’’ after ‘‘a 

14 beginning farmer or rancher’’; and 

15 (iii) by inserting ‘‘or the socially dis16 advantaged farmer or rancher’’ after ‘‘the 

17 beginning farmer or rancher’’; and 

18 (B) in clause (ii)— 

19 (i) in the matter preceding subclause 

20 (I), by inserting ‘‘or a socially disadvan21 taged farmer or rancher’’ after ‘‘or ranch22 er’’; and 

23 (ii) in subclause (II), by inserting ‘‘or 

24 the socially disadvantaged farmer or ranch25 er’’ after ‘‘or rancher’’; and 

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1 (3) in paragraph (6)— 

2 (A) in subparagraph (A), by inserting ‘‘or 

3 a socially disadvantaged farmer or rancher’’ 

4 after ‘‘or rancher’’; and 

5 (B) in subparagraph (C)— 

6 (i) in clause (i)(I), by inserting ‘‘and 

7 socially disadvantaged farmers and ranch8 ers’’ after ‘‘and ranchers’’; and 

9 (ii) in clause (ii), by inserting ‘‘or so10 cially disadvantaged farmers or ranchers’’ 

11 after ‘‘or ranchers’’. 

12 SEC. 7. AGRICULTURAL LOANS. 

13 (a) DIRECT LOANS.—Section 302 of the Consolidated 

14 Farm and Rural Development Act (7 U.S.C. 1922) is 

15 amended by striking subsection (b) and inserting the fol16 lowing: 

17 ‘‘(b) DIRECT LOANS.—The Secretary may make a di18 rect loan under this subtitle only to a farmer or rancher 

19 who has participated in the business operations of a farm 

20 or ranch for not less than 3 years.’’. 

21 (b) LIMITATIONS ON AMOUNT OF FARM OWNERSHIP

22 LOANS.—Section 305(a)(2) of the Consolidated Farm and 

23 Rural Development Act (7 U.S.C. 1925(a)(2)) is amended 

24 by striking ‘‘$200,000’’ and inserting ‘‘$300,000’’. 

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1 (c) LIMITATIONS ON AMOUNT OF OPERATING

2 LOANS.—Section 311 of the Consolidated Farm and 

3 Rural Development Act (7 U.S.C. 1941) is amended by 

4 striking subsection (c). 

5 (d) LIMITATIONS ON AMOUNT OF OPERATING

6 LOANS.—Section 313(a)(1) of the Consolidated Farm and 

7 Rural Development Act (7 U.S.C. 1943(a)(1)) is amended 

8 by striking ‘‘$200,000’’ and inserting ‘‘$300,000’’. 

9 (e) TRANSITION TO PRIVATE COMMERCIAL OR

10 OTHER SOURCES OF CREDIT.—Subtitle D of the Consoli11 dated Farm and Rural Development Act is amended by 

12 inserting after section 344 (7 U.S.C. 1992) the following: 

13 ‘‘SEC. 345. TRANSITION TO PRIVATE COMMERCIAL OR 

14 OTHER SOURCES OF CREDIT. 

15 ‘‘(a) IN GENERAL.—In making or insuring a farm 

16 loan under subtitle A or B, the Secretary shall establish 

17 a plan and promulgate regulations (including performance 

18 criteria) that promote the goal of transitioning borrowers 

19 to private commercial credit and other sources of credit 

20 in the shortest practicable period of time. 

21 ‘‘(b) COORDINATION.—In carrying out this section, 

22 the Secretary shall integrate and coordinate the transition 

23 policy described in subsection (a) with— 

24 ‘‘(1) the borrower training program established 

25 by section 359; 

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1 ‘‘(2) the loan assessment process established by 

2 section 360; 

3 ‘‘(3) the supervised credit requirement estab4 lished by section 361; 

5 ‘‘(4) the market placement program established 

6 by section 362; and 

7 ‘‘(5) other appropriate programs and authori8 ties, as determined by the Secretary.’’. 

9 SEC. 8. LOAN AUTHORIZATION LEVELS AND FUND SET10 ASIDES. 

11 (a) AUTHORIZATION OF LOANS.—Section 346(b) of 

12 the Consolidated Farm and Rural Development Act (7 

13 U.S.C. 1994(b)) is amended— 

14 (1) in paragraph (1)— 

15 (A) in the matter preceding subparagraph 

16 (A), by striking ‘‘$3,796,000,000’’ and insert17 ing ‘‘$4,226,000,000’’; and 

18 (B) in subparagraph (A)— 

19 (i) in the matter preceding clause (i), 

20 by striking ‘‘$770,000,000’’ and inserting 

21 ‘‘$1,200,000,000’’; 

22 (ii) in clause (i), by striking 

23 ‘‘$205,000,000’’ and inserting 

24 ‘‘$350,000,000’’; and 

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1 (iii) in clause (ii), by striking 

2 ‘‘$565,000,000’’ and inserting 

3 ‘‘$850,000,000’’; 

4 (2) in paragraph (2)— 

5 (A) in the paragraph heading, by striking 

6 ‘‘AND RANCHERS’’ and inserting ‘‘OR RANCHERS

7 OR SOCIALLY DISADVANTAGED FARMERS OR

8 RANCHERS’’; 

9 (B) in subparagraph (A)— 

10 (i) in clauses (i)(I), (ii), and (iii), by 

11 striking ‘‘and ranchers’’ each place it ap12 pears and inserting ‘‘or ranchers or so13 cially disadvantaged farmers or ranchers’’; 

14 (ii) in clause (i)— 

15 (I) in subclause (I), by striking 

16 ‘‘70 percent’’ and inserting ‘‘an 

17 amount that is not less than 75 per18 cent of the total amount made avail19 able under paragraph (1)’’; and 

20 (II) in subclause (II)— 

21 (aa) in the subclause head22 ing, by inserting ‘‘; PARTICIPA23 TION LOANS’’ after ‘‘PAYMENT

24 LOANS’’; 

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1 (bb) by striking ‘‘60 per2 cent’’ and inserting ‘‘an amount 

not less than 2 3 ⁄3 of the amount 

4 reserved under subclause (I)’’; 

5 and 

6 (cc) by inserting ‘‘and par7 ticipation loans’’ after ‘‘section 

8 310E’’; 

9 (iii) in clause (ii)(III), by striking 

10 ‘‘2003 through 2007, 35 percent’’ and in11 serting ‘‘2008 through 2012, an amount 

12 that is not less than 50 percent of the total 

13 amount made available under paragraph 

14 (1)’’; and 

15 (iv) in clause (iii)— 

16 (I) in the clause heading, by 

17 striking ‘‘SEPTEMBER 1’’ and insert18 ing ‘‘AUGUST 15’’; and 

19 (II) by striking ‘‘September 1’’ 

20 and inserting ‘‘August 15’’; 

21 (C) in subparagraph (B)— 

22 (i) in clause (i), by striking ‘‘25 per23 cent’’ and inserting ‘‘an amount that is not 

24 less than 40 percent of the total amount 

25 made available under paragraph (1)’’; and 

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1 (ii) in clauses (i) and (ii), by striking 

2 ‘‘farmers and ranchers’’ each place it ap3 pears and inserting ‘‘farmers or ranchers’’; 

4 and 

5 (D) in the subparagraph heading of sub6 paragraph (C), by striking ‘‘FARMERS AND

7 RANCHERS’’ and inserting ‘‘FARMERS OR

8 RANCHERS’’; 

9 (3) by striking paragraph (3); and 

10 (4) by redesignating paragraph (4) as para11 graph (3). 

12 (b) REALLOCATION.—Section 346(b) of the Consoli13 dated Farm and Rural Development Act (7 U.S.C. 

14 1994(b)) (as amended by subsection (a)) is amended by 

15 adding at the end the following: 

16 ‘‘(4) REALLOCATION.— 

17 ‘‘(A) QUALIFIED BEGINNING FARMERS OR

18 RANCHERS.—Any funds reserved and allocated 

19 under paragraph (2) for qualified beginning 

20 farmers or ranchers in a State but not used 

21 within the State as of the applicable date speci22 fied in subparagraph (A)(iii) or (B)(iii) of para23 graph (2), shall be redistributed by the Sec24 retary, in order of priority, to make or guar25 antee loans for— 

37 

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1 ‘‘(i) pending applications from quali2 fied beginning farmers or ranchers in other 

3 States for the same type and category of 

4 loan under this title as the unused funds 

5 were originally made available; 

6 ‘‘(ii) pending applications from quali7 fied beginning farmers or ranchers within 

8 the State or in other States for farm own9 ership (including down payment loans) or 

10 operating loans or loan guarantees under 

11 this title; 

12 ‘‘(iii) pending applications from so13 cially disadvantaged farmers or ranchers 

14 within the State or in other States for 

15 farm ownership (including down payment 

16 loans) or operating loans or loan guaran17 tees under this title; 

18 ‘‘(iv) pending applications within the 

19 State for farm ownership (including down 

20 payment loans) or operating loans or loan 

21 guarantees under this title; and 

22 ‘‘(v) pending applications for farm 

23 ownership (including down payment loans) 

24 or operating loans or loan guarantees 

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1 under this title in other States, as deter2 mined by the Secretary. 

3 ‘‘(B) SOCIALLY DISADVANTAGED FARMERS

4 OR RANCHERS.—Any funds reserved and allo5 cated under paragraph (2) for socially dis6 advantaged farmers or ranchers in a State but 

7 not used within the State as of the applicable 

8 date specified in subparagraph (A)(iii) or 

9 (B)(iii) of paragraph (2), shall be redistributed 

10 by the Secretary, in order of priority, to make 

11 or guarantee loans for— 

12 ‘‘(i) pending applications from socially 

13 disadvantaged farmers or ranchers in other 

14 States for the same type and category of 

15 loan under this title as the unused funds 

16 were made available; 

17 ‘‘(ii) pending applications from so18 cially disadvantaged farmers or ranchers 

19 within the State or in other States for 

20 farm ownership (including down payment 

21 loans) or operating loans or loan guaran22 tees under this title; 

23 ‘‘(iii) pending applications from begin24 ning farmers or ranchers within the State 

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39 

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1 cluding down payment loans) or operating 

2 loans or loan guarantees under this title; 

3 ‘‘(iv) pending applications within the 

4 State for farm ownership (including down 

5 payment loans) or operating loans or loan 

6 guarantees under this title; and 

7 ‘‘(v) pending applications for farm 

8 ownership (including down payment loans) 

9 or operating loans or loan guarantees 

10 under this title in other States, as deter11 mined by the Secretary.’’. 

12 SEC. 9. SOIL AND WATER CONSERVATION AND PROTEC13 TION. 

14 Section 304 of the Consolidated Farm and Rural De15 velopment Act (7 U.S.C. 1924) is amended by striking 

16 subsections (b) and (c) and inserting the following: 

17 ‘‘(b) PRIORITY.—In making or guaranteeing loans 

18 under this section, the Secretary shall give priority to— 

19 ‘‘(1) qualified beginning farmers or ranchers; 

20 ‘‘(2) socially disadvantaged farmers or ranch21 ers; 

22 ‘‘(3) owners or tenants who use the loans to 

23 convert to sustainable or organic agricultural pro24 duction systems; and 

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1 ‘‘(4) producers who use the loans to build con2 servation structures or establish conservation prac3 tices to comply with section 1212 of the Food Secu4 rity Act of 1985 (16 U.S.C. 3812).’’. 

5 SEC. 10. CONSERVATION RESERVE PROGRAM TRANSITION 

6 INCENTIVES. 

7 Section 1235(c) of the Food Security Act of 1985 (16 

8 U.S.C. 3835(c)) is amended— 

9 (1) in paragraph (1)(B)— 

10 (A) in clause (ii), by striking ‘‘or’’ at the 

11 end; 

12 (B) by redesignating clause (iii) as clause 

13 (iv); and 

14 (C) by inserting after clause (ii) the fol15 lowing: 

16 ‘‘(iii) to facilitate a transition of land 

17 subject to the contract from a retired or 

18 retiring owner or operator to a beginning 

19 farmer or rancher or socially disadvan20 taged farmer or rancher for the purpose of 

21 returning some or all of the land into pro22 duction using sustainable grazing or crop 

23 production methods; or’’; and 

24 (2) by adding at the end the following: 

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1 ‘‘(3) TRANSITION OPTION FOR BEGINNING

2 FARMERS OR RANCHERS AND SOCIALLY DISADVAN3 TAGED FARMERS OR RANCHERS.— 

4 ‘‘(A) IN GENERAL.—In the case of a con5 tract modification approved in order to facili6 tate the transfer of land subject to a contract 

7 from a retired or retiring owner or operator to 

8 a beginning farmer or rancher or socially dis9 advantaged farmer or rancher under paragraph 

10 (1)(B)(iii), the Secretary shall— 

11 ‘‘(i) beginning on the date that is 1 

12 year before the date of termination of the 

13 contract— 

14 ‘‘(I) allow the beginning farmer 

15 or rancher or socially disadvantaged 

16 farmer or rancher, in conjunction with 

17 the retired or retiring owner or oper18 ator, to make conservation and land 

19 improvements; and 

20 ‘‘(II) allow the beginning farmer 

21 or rancher or socially disadvantaged 

22 farmer or rancher, at the election of 

23 the farmer or rancher, to begin the 

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42 

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1 ganic Foods Production Act of 1990 

2 (7 U.S.C. 6501 et seq.); 

3 ‘‘(ii) beginning on the date of termi4 nation of the contract, allow the retired or 

5 retiring owner or operator to sell or lease 

6 (under a long-term lease or a lease with an 

7 option to purchase) to the beginning farm8 er or rancher or socially disadvantaged 

9 farmer or rancher the land subject to the 

10 contract for production purposes; 

11 ‘‘(iii) require the beginning farmer or 

12 rancher or socially disadvantaged farmer 

13 or rancher to develop and implement a 

14 comprehensive conservation plan that 

15 meets such sustainability criteria as the 

16 Secretary may establish; 

17 ‘‘(iv) provide to the beginning farmer 

18 or rancher or socially disadvantaged farm19 er or rancher an opportunity to enroll in 

20 the conservation security program estab21 lished under subchapter A of chapter 2 or 

22 the environmental quality incentives pro23 gram established under chapter 4 by not 

24 later than the date on which the farmer or 

43 

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1 rancher takes possession, through owner2 ship or lease, of the land; and 

3 ‘‘(v) continue to make annual pay4 ments to the retired or retiring owner or 

5 operator for not more than an additional 2 

6 years after the date of termination of the 

7 contract, if the retired or retiring owner or 

8 operator is not a family member (as de9 fined in section 1001A(b)(3)(B) of the 

10 Food Security Act of 1985 (7 U.S.C. 

11 1308–1(b)(3)(B)) of the beginning farmer 

12 or rancher or socially disadvantaged farm13 er or rancher. 

14 ‘‘(B) REENROLLMENT.—The Secretary 

15 shall provide to a beginning farmer or rancher 

16 or socially disadvantaged farmer or rancher de17 scribed in subparagraph (A) the option to re18 enroll any applicable partial field conservation 

19 practice that is— 

20 ‘‘(i) eligible for enrollment under the 

21 continuous signup requirement of section 

22 1231(h)(4)(B); and 

23 ‘‘(ii) part of an approved comprehen24 sive conservation plan.’’. 

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1 SEC. 11. CONSERVATION COST SHARING. 

2 (a) CONSERVATION SECURITY PROGRAM.—Section 

3 1238C(b)(1) of the Food Security Act of 1985 (16 U.S.C. 

4 3838c(b)(1)) is amended in subparagraphs (C)(ii), (D)(ii), 

5 and (E)(ii), by striking ‘‘rancher, 90 percent’’ each place 

6 it appears and inserting ‘‘rancher, or a socially disadvan7 taged farmer or rancher, does not exceed the lesser of 90 

8 percent or an amount equal to 15 percent more than the 

9 rate offered to other farmers’’. 

10 (b) ENVIRONMENTAL QUALITY INCENTIVES PRO11 GRAM.—Section 1240B(d)(2) of the Food Security Act of 

12 1985 (16 U.S.C. 3839aa–2(d)(2)) is amended by striking 

13 subparagraph (A) and inserting the following: 

14 ‘‘(A) BEGINNING FARMERS OR RANCHERS

15 AND SOCIALLY DISADVANTAGED FARMERS OR

16 RANCHERS.—The Secretary may increase the 

17 amount provided to a producer under para18 graph (1) that is a beginning farmer or rancher 

19 or a socially disadvantaged farmer or rancher, 

20 as determined by the Secretary, to an amount 

21 not more than the lesser of— 

22 ‘‘(i) 90 percent; and 

23 ‘‘(ii) 15 percent more than the rate 

24 offered to other farmers or ranchers.’’. 

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1 (c) CONSERVATION INCENTIVES AND RESERVED

2 FUNDING.—Section 1244 of the Food Security Act of 

3 1985 (16 U.S.C. 3844) is amended— 

4 (1) in subsection (a)— 

5 (A) by redesignating paragraphs (1) and 

6 (2) as subparagraphs (A) and (B), respectively, 

7 and indenting the subparagraphs appropriately; 

8 (B) by striking ‘‘In carrying out’’ and in9 serting the following: 

10 ‘‘(1) IN GENERAL.—In carrying out’’; 

11 (C) in paragraph (1) (as designated by 

12 subparagraph (B)), by striking ‘‘and Indian 

13 tribes’’ and all that follows through ‘‘agricul14 tural producers’’ and inserting ‘‘, Indian tribes, 

15 and socially disadvantaged farmers or ranch16 ers’’; and 

17 (D) by adding at the end the following: 

18 ‘‘(2) REQUIREMENTS.—In carrying out this 

19 subsection, the Secretary shall— 

20 ‘‘(A) develop a definition of the term ‘be21 ginning farmer or rancher’ that— 

22 ‘‘(i) is based, to the maximum extent 

23 practicable, on the definition of that term 

24 under section 343(a) of the Consolidated 

46 

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1 Farm and Rural Development Act (7 

2 U.S.C. 1991(a)); and 

3 ‘‘(ii) includes— 

4 ‘‘(I) a fair and reasonable test of 

5 net worth; and 

6 ‘‘(II) such other criteria as the 

7 Secretary determines to be appro8 priate; 

9 ‘‘(B) develop and implement cooperative 

10 agreements with entities, including the Natural 

11 Resources Conservation Service, Extension enti12 ties, nongovernmental and community-based or13 ganizations, educational institutions, and pri14 vate technical service providers, with expertise 

15 in addressing the needs of beginning farmers or 

16 ranchers and socially disadvantaged farmers or 

17 ranchers to provide— 

18 ‘‘(i) sustainable agricultural systems 

19 training and technical assistance; and 

20 ‘‘(ii) comprehensive whole-farm con21 servation planning education and technical 

22 assistance; 

23 ‘‘(C) offer to beginning farmers or ranch24 ers and socially disadvantaged farmers or 

25 ranchers a special incentive or bonus payment 

47 

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1 for developing comprehensive whole-farm or 

2 -ranch resource management system conserva3 tion plans as part of participation in— 

4 ‘‘(i) the conservation security program 

5 established under subchapter A of chapter 

6 2 of subtitle D; or 

7 ‘‘(ii) the environmental quality incen8 tives program established under chapter 4 

9 of that subtitle; 

10 ‘‘(D) provide a substantial number of 

11 ranking points— 

12 ‘‘(i) for beginning farmers or ranchers 

13 and socially disadvantaged farmers or 

14 ranchers within each conservation program 

15 under this title that uses a ranking system 

16 to determine enrollment; and 

17 ‘‘(ii) for detailed farm transition plan18 ning under the farmland protection pro19 gram established under subchapter B of 

20 chapter 2 of subtitle D; and 

21 ‘‘(E) provide such other incentives and 

22 benefits as the Secretary determines to be ap23 propriate. 

24 ‘‘(3) RESERVATION OF FUNDING.— 

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1 ‘‘(A) IN GENERAL.—Of funds made avail2 able for a fiscal year to carry out this title, the 

3 Secretary shall reserve, for a period of not less 

4 than 120 days after the date on which the 

5 funds are made available— 

6 ‘‘(i) not less than 10 percent for be7 ginning farmers or ranchers; and 

8 ‘‘(ii) not less than 10 percent of funds 

9 for socially disadvantaged farmers or 

10 ranchers. 

11 ‘‘(B) TECHNICAL ASSISTANCE.—Of 

12 amounts reserved under subparagraph (A), the 

13 Secretary may provide to beginning farmers or 

14 ranchers and socially disadvantaged farmers or 

15 ranchers technical assistance at a rate that is 

16 not more than 15 percent higher than the rate 

17 that would otherwise apply to the farmers or 

18 ranchers. 

19 ‘‘(4) EFFECT OF SUBSECTION.—Nothing in this 

20 subsection prohibits any beginning farmer or ranch21 er or any socially disadvantaged farmer or rancher 

22 from— 

23 ‘‘(A) participating in any other program; 

24 or 

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1 ‘‘(B) receiving funds made available under 

2 this title that are not reserved pursuant to 

3 paragraph (3)(A).’’. 

4 SEC. 12. RESEARCH PROGRAMS. 

5 (a) COMPETITIVE, SPECIAL, AND FACILITIES RE6 SEARCH GRANTS.—Section 2(b)(2) of the Competitive, 

7 Special, and Facilities Research Grant Act (7 U.S.C. 

8 450i(b)(2)) is amended— 

9 (1) in the first sentence of the matter preceding 

10 subparagraph (A), by striking ‘‘(F)’’ and inserting 

11 ‘‘(G)’’; 

12 (2) in subparagraph (E), by striking ‘‘and’’ at 

13 the end; 

14 (3) in subparagraph (F), by striking the period 

15 at the end and inserting ‘‘; and’’; and 

16 (4) by adding at the end the following: 

17 ‘‘(G) areas of concern to beginning farmers 

18 or ranchers, including— 

19 ‘‘(i) farm transfer and farm entry; 

20 ‘‘(ii) farm transition options for retir21 ing farmers or ranchers; 

22 ‘‘(iii) land tenure; 

23 ‘‘(iv) farm viability; 

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1 ‘‘(v) socially disadvantaged farmers or 

2 ranchers and immigrant farmers or ranch3 ers; and 

4 ‘‘(vi) production, marketing, conserva5 tion, and risk management alternatives rel6 evant to new and beginning farmers or 

7 ranchers.’’. 

8 (b) INITIATIVE FOR FUTURE AGRICULTURE AND

9 FOOD SYSTEMS.—Section 401(c)(2)(F) of the Agricul10 tural Research, Extension, and Education Reform Act of 

11 1998 (7 U.S.C. 7621(c)(2)(F)) is amended— 

12 (1) by striking ‘‘including the viability’’ and in13 serting the following: ‘‘including— 

14 ‘‘(i) the viability’’; and 

15 (2) by striking ‘‘operations.’’ and inserting the 

16 following: ‘‘operations; 

17 ‘‘(ii) farm transition options for retir18 ing farmers or ranchers; and 

19 ‘‘(iii) farm transfer and entry alter20 natives for beginning farmers or ranchers 

21 or socially disadvantaged farmers or ranch22 ers.’’. 

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1 SEC. 13. RISK MANAGEMENT EDUCATION FOR BEGINNING 

2 FARMERS OR RANCHERS. 

3 Section 524(a) of the Federal Crop Insurance Act (7 

4 U.S.C. 1524(a)) is amended— 

5 (1) by redesignating paragraph (4) as para6 graph (5); and 

7 (2) by inserting after paragraph (3) the fol8 lowing: 

9 ‘‘(4) REQUIREMENTS.—In carrying out the pro10 grams established under paragraphs (2) and (3), the 

11 Secretary shall place special emphasis on risk man12 agement strategies, education, and outreach specifi13 cally targeted at— 

14 ‘‘(A) beginning farmers or ranchers; 

15 ‘‘(B) immigrant farmers or ranchers that 

16 are attempting to become established producers 

17 in the United States; 

18 ‘‘(C) socially disadvantaged farmers or 

19 ranchers; 

20 ‘‘(D) farmers or ranchers that— 

21 ‘‘(i) are preparing to retire; and 

22 ‘‘(ii) are using transition strategies to 

23 help new farmers or ranchers get started; 

24 and 

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1 ‘‘(E) new or established farmers or ranch2 ers that are converting production and mar3 keting systems to pursue new markets.’’. 

Æ