433 
‘‘(c) HAZARD INSURANCE REQUIREMENT.—The Sec-
retary may not make a loan to a farmer under this chapter 
unless the farmer has, or agrees to obtain, hazard insur-
ance on any real property to be acquired or improved with 
the loan. 
‘‘SEC. 3103. CONSERVATION LOAN AND LOAN GUARANTEE 
PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary may make or 
guarantee qualified conservation loans to eligible bor-
rowers under this section. 
‘‘(b) DEFINITIONS.—In this section: 
‘‘(1) CONSERVATION
PLAN.—The term ‘con-
servation plan’ means a plan, approved by the Sec-
retary, that, for a farming operation, identifies the 
conservation activities that will be addressed with 
loan funds provided under this section, including— 
‘‘(A) the installation of conservation struc-
tures to address soil, water, and related re-
sources; 
‘‘(B) the establishment of forest cover for 
sustained yield timber management, erosion 
control, or shelter belt purposes; 
‘‘(C) the installation of water conservation 
measures; 
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‘‘(D) the installation of waste management 
systems; 
‘‘(E) the establishment or improvement of 
permanent pasture; 
‘‘(F) compliance with section 1212 of the 
Food Security Act of 1985 (16 U.S.C. 3812); 
and 
‘‘(G) other purposes consistent with the 
plan, including the adoption of any other 
emerging or existing conservation practices, 
techniques, or technologies approved by the Sec-
retary. 
‘‘(2) QUALIFIED
CONSERVATION
LOAN.—The 
term ‘qualified conservation loan’ means a loan, the 
proceeds of which are used to cover the costs to the 
borrower of carrying out a qualified conservation 
project. 
‘‘(3) QUALIFIED
CONSERVATION
PROJECT.— 
The term ‘qualified conservation project’ means con-
servation measures that address provisions of a con-
servation plan of the eligible borrower. 
‘‘(c) ELIGIBILITY.— 
‘‘(1) IN GENERAL.—The Secretary may make 
or guarantee loans to farmers. 
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‘‘(2) REQUIREMENTS.—To be eligible for a loan 
under this section, applicants shall meet the citizen-
ship and training and experience requirements of 
section 3101(b). 
‘‘(d) PRIORITY.—In making or guaranteeing loans 
under this section, the Secretary shall give priority to— 
‘‘(1) qualified beginning farmers and socially 
disadvantaged farmers; 
‘‘(2) owners or tenants who use the loans to 
convert to sustainable or organic agricultural pro-
duction systems; and 
‘‘(3) producers who use the loans to build con-
servation structures or establish conservation prac-
tices to comply with section 1212 of the Food Secu-
rity Act of 1985 (16 U.S.C. 3812). 
‘‘(e) LIMITATIONS APPLICABLE TO LOAN GUARAN-
TEES.—The portion of a loan that the Secretary may 
guarantee under this section shall not exceed 75 percent 
of the principal amount of the loan. 
‘‘(f) ADMINISTRATIVE PROVISIONS.—The Secretary 
shall ensure, to the maximum extent practicable, that 
loans made or guaranteed under this section are distrib-
uted across diverse geographic regions. 
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‘‘(g) CREDIT ELIGIBILITY.—The provisions of para-
graphs (1) and (3) of section 3406(a) shall not apply to 
loans made or guaranteed under this section. 
‘‘(h) AUTHORIZATION
OF APPROPRIATIONS.—For 
each of fiscal years 2013 through 2018, there are author-
ized to be appropriated to the Secretary such sums as are 
necessary to carry out this section. 
‘‘SEC. 3104. LOAN MAXIMUMS. 
‘‘(a) MAXIMUM.— 
‘‘(1) IN GENERAL.—The Secretary shall make 
or guarantee no loan under sections 3101, 3102, 
3103, 3106, and 3107 that would cause the unpaid 
indebtedness under those sections of any 1 borrower 
to exceed the lesser of— 
‘‘(A) the value of the farm or other secu-
rity, or 
‘‘(B)(i) in the case of a loan made by the 
Secretary, $300,000; or 
‘‘(ii) in the case of a loan guaranteed by 
the Secretary, $700,000 (as modified under 
paragraph (2)). 
‘‘(2) MODIFICATION.—The amount specified in 
paragraph (1)(B)(ii) shall be— 
‘‘(A) increased, beginning with fiscal year 
2000, by the inflation percentage applicable to 
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the fiscal year in which the loan is guaranteed; 
and 
‘‘(B) reduced by the amount of any unpaid 
indebtedness of the borrower on loans under 
chapter 2 that are guaranteed by the Secretary. 
‘‘(b) DETERMINATION OF VALUE.—In determining 
the value of the farm, the Secretary shall consider apprais-
als made by competent appraisers under rules established 
by the Secretary. 
‘‘(c) INFLATION PERCENTAGE.—For purposes of this 
section, the inflation percentage applicable to a fiscal year 
is the percentage (if any) by which— 
‘‘(1) the average of the Prices Paid By Farmers 
Index (as compiled by the National Agricultural Sta-
tistics Service of the Department) for the 12-month 
period ending on August 31 of the immediately pre-
ceding fiscal year; exceeds 
‘‘(2) the average of that index (as so defined) 
for the 12-month period ending on August 31, 1996. 
‘‘SEC. 3105. REPAYMENT REQUIREMENTS FOR FARM OWN-
ERSHIP LOANS. 
‘‘(a) PERIOD FOR REPAYMENT.—The period for re-
payment of a loan under this chapter shall not exceed 40 
years. 
‘‘(b) INTEREST RATES.— 
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