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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4441 Introduced in Senate (IS)]

<DOC>

118th CONGRESS
  2d Session
                                S. 4441

To amend the Consolidated Farm and Rural Development Act to provide for 
 a pilot program under which development loans and loan guarantees may 
   be made to beginning farmers and ranchers, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              June 3, 2024

   Mr. Welch introduced the following bill; which was read twice and 
   referred to the Committee on Agriculture, Nutrition, and Forestry

_______________________________________________________________________

                                 A BILL

 
To amend the Consolidated Farm and Rural Development Act to provide for 
 a pilot program under which development loans and loan guarantees may 
   be made to beginning farmers and ranchers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Capital for Beginning Farmers and 
Ranchers Act of 2024''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) beginning farmers and ranchers often pursue business 
        models featuring diverse and specialized production and 
        marketing strategies;
            (2) diverse and specialized agricultural businesses 
        typically require substantial early-stage investments which 
        will benefit the operation for years to come; and
            (3) programs in effect as of 2024 often finance those 
        multi-year investments as annual operating loans, resulting in 
        beginning farmers and ranchers under-investing in critical 
        start-up capacities, limiting the ability of beginning farmers 
        and ranchers to accumulate working capital, and increasing the 
        difficulties faced by beginning farmers and ranchers in meeting 
        the terms of those loans.

SEC. 3. BEGINNING FARMER AND RANCHER DEVELOPMENT LOAN PILOT PROGRAM.

    Subtitle B of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1941 et seq.) is amended by adding at the end the following:

``SEC. 320. BEGINNING FARMER AND RANCHER DEVELOPMENT LOAN PILOT 
              PROGRAM.

    ``(a) Definition of Development Expenditure.--
            ``(1) In general.--In this section, the term `development 
        expenditure' means a capital investment that benefits a farming 
        or ranching business of a qualified beginning farmer or rancher 
        for more than 1 year.
            ``(2) Inclusions.--In this section, the term `development 
        expenditure' includes an expenditure--
                    ``(A) for the acquisition or development of--
                            ``(i) initial assets; or
                            ``(ii) intangible infrastructure;
                    ``(B) to increase long-term soil fertility, 
                establish perennials, or develop breeding stock;
                    ``(C) to establish an appropriate foundation of 
                small equipment, tools, or supplies;
                    ``(D) to develop branding and reputation, establish 
                commercial relationships with suppliers and key service 
                providers, access new markets, or refine product 
                offerings;
                    ``(E) to establish a bookkeeping system sufficient 
                to support invoicing multiple clients and managing 
                profitability with respect to diverse crops and 
                livestock;
                    ``(F) to establish payroll and implement legally 
                compliant labor practices;
                    ``(G) to establish other business management 
                practices relating to food safety, environmental, or 
                other regulatory compliance; or
                    ``(H) for such other items as the Secretary 
                determines appropriate.
    ``(b) Establishment.--Not later than 2 years after the date of 
enactment of this section, the Secretary shall establish a pilot 
program to make or guarantee development loans to qualified beginning 
farmers and ranchers to finance development expenditures.
    ``(c) Terms and Conditions.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, a development loan made or guaranteed under this section--
                    ``(A) shall have a repayment term of--
                            ``(i) not less than 3 years; and
                            ``(ii) not more than 10 years;
                    ``(B) may be used only to cover development 
                expenditures;
                    ``(C) shall not exceed $100,000;
                    ``(D) shall have a collateral requirement of not 
                more than 100 percent loan-to-value, subject to 
                paragraph (2);
                    ``(E) shall have an interest rate, determined by 
                the Secretary, of--
                            ``(i) not less than zero percent; and
                            ``(ii) not more than 3 percent;
                    ``(F) shall require the participating qualified 
                beginning farmer or rancher to make annual interest 
                payments for the full amount of interest due; and
                    ``(G) shall include flexible principal repayment, 
                subject to the condition that not less than 1 percent 
                of the remaining balance shall be due annually on a 
                date determined by the Secretary.
            ``(2) Collateral requirement.--The collateral requirement 
        described in paragraph (1)(D) may be reduced by the lender 
        based on the farming or ranching experience and expertise of 
        the borrower.
            ``(3) Treatment.--A development loan made or guaranteed 
        under this section--
                    ``(A) shall not count toward the limitations 
                described in subparagraphs (B) and (C) of section 
                311(c)(1);
                    ``(B) shall be considered to be--
                            ``(i) a direct operating loan or a 
                        guaranteed operating loan, as applicable, for 
                        purposes of section 346(b)(2); and
                            ``(ii) an operating loan under section 312 
                        for purposes of section 343(a)(10); and
                    ``(C) except as otherwise provided in this section, 
                shall be subject to all applicable provisions of law 
                relating to, as applicable--
                            ``(i) direct operating loans under this 
                        title;
                            ``(ii) guaranteed operating loans under 
                        this title; or
                            ``(iii) farmer program loans.
    ``(d) Borrower Training.--
            ``(1) In general.--The Secretary shall provide to borrowers 
        of development loans made or guaranteed under this section 
        comprehensive training and support addressing farm and ranch 
        management issues.
            ``(2) Requirements.--The training and support provided 
        under paragraph (1) shall address, to the maximum extent 
        practicable--
                    ``(A) bookkeeping, taxation, credit, and regulatory 
                compliance; and
                    ``(B) cash flow, profitability, and risk 
                management.
            ``(3) Provision.--The Secretary shall provide training and 
        support under paragraph (1) through--
                    ``(A) entities with which the Secretary has entered 
                into a contract under section 359;
                    ``(B) entities that receive funding through the 
                beginning farmer and rancher development grant program 
                established under section 2501(d) of the Food, 
                Agriculture, Conservation, and Trade Act of 1990 (7 
                U.S.C. 2279(d));
                    ``(C) entities that receive funding through the 
                risk management education program established under 
                section 524(a)(2) of the Federal Crop Insurance Act (7 
                U.S.C. 1524(a)(2)); or
                    ``(D) other relevant programs, as determined by the 
                Secretary, including qualified programs that request 
                such a determination.
    ``(e) Evaluation and Reports.--The Secretary shall--
            ``(1) evaluate the pilot program established under 
        subsection (b) on an ongoing basis; and
            ``(2) biennially submit to the Committee on Agriculture, 
        Nutrition, and Forestry of the Senate and the Committee on 
        Agriculture of the House of Representatives a written report 
        describing the operation and outcomes of the pilot program.''.
                                 <all>
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