I

104TH CONGRESS

1ST SESSION H. R. 54

To amend the Consolidated Farm and Rural Development Act to provide

greater access to credit for family farmers who grow specialty crops

or operate in high land cost areas, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. DOOLEY (for himself and Mr. POMBO) introduced the following bill; which

was referred to the Committee on Agriculture

A BILL

To amend the Consolidated Farm and Rural Development

Act to provide greater access to credit for family farmers

who grow specialty crops or operate in high land cost

areas, 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.

4 This Act may be cited as the ‘‘Agricultural Credit

5 Equity Act of 1995’’.
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1 SEC. 2. INDEXATION OF GUARANTEED LOAN LIMITS IN

2 COUNTIES WITH ABOVE AVERAGE LAND

3 COSTS.

4 (a) GUARANTEED REAL ESTATE LOANS.—Section

5 305 of the Consolidated Farm and Rural Development Act

6 (7 U.S.C. 1925) is amended—

7 (1) by inserting ‘‘(a)’’ before ‘‘The Secretary

8 shall make’’;

9 (2) by striking ‘‘$300,000’’ and inserting ‘‘the

10 lesser of $300,000 (multiplied by the adjustment

11 factor calculated under subsection (b) for the area in

12 which the borrower is located) or $600,000’’; and

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

14 ‘‘(b)(1) Upon the enactment of this subsection, and

15 not later than the date any Census of Agriculture is com16 pleted, the Secretary shall calculate—

17 ‘‘(A) the average value of land and buildings in

18 each defined area in the United States; and

19 ‘‘(B) the adjustment factor for each such area

20 in accordance with paragraph (2).

21 ‘‘(2) The adjustment factor for any defined area shall

22 be 1.00, plus an amount that is directly proportional to

23 the percentage (if any) by which the average value of land

24 and buildings in the defined area exceeds the average

25 value of land and buildings in the United States. The Sec-
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1 retary shall determine the proportion to be used in cal2 culating adjustment factors under this subsection.

3 ‘‘(3) As used in paragraph (1), the term ‘defined

4 area’ means—

5 ‘‘(A) a county; and

6 ‘‘(B) any other area if the Secretary deems it

7 appropriate to calculate a separate adjustment fac8 tor for the area to better serve the credit needs of

9 family farms in the area.’’.

10 (b) GUARANTEED OPERATING LOANS.—Section 313

11 of such Act (7 U.S.C. 1943) is amended—

12 (1) by inserting ‘‘(a)’’ before ‘‘The Secretary

13 shall make’’;

14 (2) by striking ‘‘$400,000’’ and inserting ‘‘the

15 lesser of $400,000 (multiplied by the adjustment

16 factor calculated under subsection (b) for the area in

17 which the borrower is located) or $600,000’’; and

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

19 ‘‘(b)(1) Upon the enactment of this subsection, and

20 not later than the date any Census of Agriculture is com21 pleted, the Secretary shall calculate—

22 ‘‘(A) the average value of land and buildings in

23 each defined area in the United States; and

24 ‘‘(B) the adjustment factor for each such area

25 in accordance with paragraph (2).
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1 ‘‘(2) The adjustment factor for any defined area shall

2 be 1.00, plus an amount that is directly proportional to

3 the percentage (if any) by which the average value of land

4 and buildings in the defined area exceeds the average

5 value of land and buildings in the United States. The Sec6 retary shall determine the proportion to be used in cal7 culating adjustment factors under this subsection.

8 ‘‘(3) As used in paragraph (1), the term ‘defined

9 area’ means—

10 ‘‘(A) a county; and

11 ‘‘(B) any other area if the Secretary deems it

12 appropriate to calculate a separate adjustment fac13 tor for the area to better serve the credit needs of

14 family farms in the area.’’.

15 (c) ELIMINATION OF CEILING ON PRICE OF PROP16 ERTY WHICH MAY BE ACQUIRED UNDER THE DOWN

17 PAYMENT LOAN PROGRAM.—Section 310E of such Act (7

18 U.S.C. 1935) is amended—

19 (1) in subsection (b)(1), by inserting ‘‘the lesser

20 of $75,000, or’’ before ‘‘30’’; and

21 (2) in subection (c), by striking paragraph (2)

22 and redesignating paragraph (3) as paragraph (2).
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1 SEC. 3. HIRED LABOR LIMITS.

2 (a) REAL ESTATE LOANS.—Section 302 of the Con3 solidated Farm and Rural Development Act (7 U.S.C.

4 1922) is amended by adding at the end the following:

5 ‘‘(c)(1) The primary factor to be considered in deter6 mining whether an applicant for a loan under this subtitle

7 is engaged primarily and directly in farming or ranching

8 shall be whether the applicant is participating in routine,

9 ongoing farm activities, and in overall decisionmaking with

10 regard to the farm or ranch.

11 ‘‘(2) The Secretary may not deny a loan under this

12 subtitle solely because more than 2 individuals are em13 ployed full-time in the farming operation for which the

14 loan is sought.’’.

15 (b) OPERATING LOANS.—Section 311 of such Act (7

16 U.S.C. 1941) is amended by adding at the end the follow17 ing:

18 ‘‘(d)(1) The primary factor to be considered in deter19 mining whether an applicant for a loan under this subtitle

20 is engaged primarily and directly in farming or ranching

21 shall be whether the applicant is participating in routine,

22 ongoing farm activities, and in overall decisionmaking with

23 regard to the farm or ranch.

24 ‘‘(2) The Secretary may not deny a loan under this

25 subtitle solely because more than 2 individuals are em-
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1 ployed full-time in the farming operation for which the

2 loan is sought.’’.

3 (c) EMERGENCY LOANS.—Section 321 of such Act (7

4 U.S.C. 1961) is amended by adding at the end the follow5 ing:

6 ‘‘(e)(1) The primary factor to be considered in deter7 mining whether an applicant for a loan under this subtitle

8 is engaged primarily and directly in farming or ranching

9 shall be whether the applicant is participating in routine,

10 ongoing farm activities, and in overall decisionmaking with

11 regard to the farm or ranch.

12 ‘‘(2) The Secretary may not deny a loan under this

13 subtitle solely because more than 2 individuals are em14 ployed full-time in the farming operation for which the

15 loan is sought.’’.

16 SEC. 4. AVAILABILITY OF CREDIT ELSEWHERE.

17 Sections 302(a)(4) and 311(a)(4) of the Consolidated

18 Farm and Rural Development Act (7 U.S.C. 1922(a)(4)

19 and 1941(a)(4)) are each amended by inserting ‘‘and the

20 availability of conventional sources of funds for lending to

21 agricultural producers in the community’’ before the

22 period.

23 SEC. 5. GROWER-SHIPPER AGREEMENTS.

24 (a) REAL ESTATE LOANS.—Section 302 of the Con25 solidated Farm and Rural Development Act (7 U.S.C.
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1 1922) is amended by adding after the subsection added

2 by section 3(a) of this Act the following:

3 ‘‘(d) This section shall not be construed to prohibit

4 the Secretary from making a loan under this subtitle to

5 an applicant therefor who has entered into an agreement

6 with a shipper of perishable commodities under which the

7 applicant and the shipper share in the proceeds of the sale

8 of an agricultural commodity if—

9 ‘‘(1) in the absence of such an agreement, the

10 applicant could not easily market the agricultural

11 commodity, or could not market the agricultural

12 commodity without incurring significant additional

13 risk; and

14 ‘‘(2) the agreement is clearly beneficial to the

15 applicant.’’.

16 (b) OPERATING LOANS.—Section 311 of such Act (7

17 U.S.C. 1941) is amended by adding after the subsection

18 added by section 3(b) of this Act the following:

19 ‘‘(e) This section shall not be construed to prohibit

20 the Secretary from making a loan under this subtitle to

21 an applicant therefor who has entered into an agreement

22 with a shipper of perishable commodities under which the

23 applicant and the shipper share in the proceeds of the sale

24 of an agricultural commodity if—
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1 ‘‘(1) in the absence of such an agreement, the

2 applicant could not easily market the agricultural

3 commodity, or could not market the agricultural

4 commodity without incurring significant additional

5 risk; and

6 ‘‘(2) the agreement is clearly beneficial to the

7 applicant.’’.

8 (c) EMERGENCY LOANS.—Section 321 of such Act (7

9 U.S.C. 1961) is amended by adding after the subsection

10 added by section 3(c) of this Act the following:

11 ‘‘(f) This section shall not be construed to prohibit

12 the Secretary from making a loan under this subtitle to

13 an applicant therefor who has entered into an agreement

14 with a shipper of perishable commodities under which the

15 applicant and the shipper share in the proceeds of the sale

16 of an agricultural commodity if—

17 ‘‘(1) in the absence of such an agreement, the

18 applicant could not easily market the agricultural

19 commodity, or could not market the agricultural

20 commodity without incurring significant additional

21 risk; and

22 ‘‘(2) the agreement is clearly beneficial to the

23 applicant.’’.

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