H. R. 2854—190
processors or any other person that would be affected by an
order may request the issuance of, and submit a proposal
for, an order.
(2) NOTICE AND COMMENT CONCERNING PROPOSED ORDER.—
Not later than 60 days after the receipt of a request and
proposal for an order under paragraph (1), or at such time
as the Secretary determines to propose an order, the Secretary
shall publish a proposed order and give due notice and oppor-
tunity for public comment on the proposed order.
(3) ISSUANCE OF ORDER.—After notice and opportunity for
public comment under paragraph (2), the Secretary shall issue
an order, taking into consideration the comments received and
including in the order such provisions as are necessary to
ensure that the order conforms to this subtitle. The order
shall be issued and become effective not later than 150 days
after the date of publication of the proposed order.
(c) AMENDMENTS.—The Secretary, as appropriate, may amend
an order. The provisions of this subtitle applicable to an order
shall be applicable to any amendment to an order, except that
an amendment to an order may not require a referendum to become
effective.
SEC. 575. REQUIRED TERMS IN ORDERS.
(a) IN GENERAL.—An order shall contain the terms and condi-
tions specified in this section.
(b) ESTABLISHMENT AND MEMBERSHIP OF POPCORN BOARD.—
(1) IN GENERAL.—The order shall provide for the establish-
ment of, and appointment of members to, a Popcorn Board
that shall consist of not fewer than 4 members and not more
than 9 members.
(2) NOMINATIONS.—The members of the Board shall be
processors appointed by the Secretary from nominations
submitted by processors in a manner authorized by the Sec-
retary, subject to paragraph (3). Not more than 1 member
may be appointed to the Board from nominations submitted
by any 1 processor.
(3) GEOGRAPHICAL
DIVERSITY.—In making appointments,
the Secretary shall take into account, to the extent practicable,
the geographical distribution of popcorn production throughout
the United States.
(4) TERMS.—The term of appointment of each member of
the Board shall be 3 years, except that the members appointed
to the initial Board shall serve, proportionately, for terms of
2, 3, and 4 years, as determined by the Secretary.
(5) COMPENSATION AND EXPENSES.—A member of the Board
shall serve without compensation, but shall be reimbursed for
the expenses of the member incurred in the performance of
duties for the Board.
(c) POWERS AND DUTIES OF BOARD.—The order shall define
the powers and duties of the Board, which shall include the power
and duty—
(1) to administer the order in accordance with the terms
and provisions of the order;
(2) to issue regulations to effectuate the terms and provi-
sions of the order;
(3) to appoint members of the Board to serve on an execu-
tive committee;
H. R. 2854—191
(4) to propose, receive, evaluate, and approve budgets,
plans, and projects of promotion, research, consumer informa-
tion, and industry information, and to contract with appropriate
persons to implement the plans or projects;
(5) to accept and receive voluntary contributions, gifts,
and market promotion or similar funds;
(6) to invest, pending disbursement under a plan or project,
funds collected through assessments authorized under sub-
section (f), only in—
(A) obligations of the United States or an agency of
the United States;
(B) general obligations of a State or a political subdivi-
sion of a State;
(C) an interest-bearing account or certificate of deposit
of a bank that is a member of the Federal Reserve System;
or
(D) obligations fully guaranteed as to principal and
interest by the United States;
(7) to receive, investigate, and report to the Secretary com-
plaints of violations of the order; and
(8) to recommend to the Secretary amendments to the
order.
(d) PLANS AND BUDGETS.—
(1) IN GENERAL.—The order shall provide that the Board
shall submit to the Secretary for approval any plan or project
of promotion, research, consumer information, or industry
information.
(2) BUDGETS.—The order shall require the Board to submit
to the Secretary for approval budgets on a fiscal year basis
of the anticipated expenses and disbursements of the Board
in the implementation of the order, including projected costs
of plans and projects of promotion, research, consumer informa-
tion, and industry information.
(e) CONTRACTS AND AGREEMENTS.—
(1) IN GENERAL.—The order shall provide that the Board
may enter into contracts or agreements for the implementation
and carrying out of plans or projects of promotion, research,
consumer information, or industry information, including con-
tracts with a processor organization, and for the payment of
the cost of the plans or projects with funds collected by the
Board under the order.
(2) REQUIREMENTS.—A contract or agreement under para-
graph (1) shall provide that—
(A) the contracting party shall develop and submit
to the Board a plan or project, together with a budget
that shows the estimated costs to be incurred for the plan
or project;
(B) the plan or project shall become effective on the
approval of the Secretary; and
(C) the contracting party shall keep accurate records
of each transaction of the party, account for funds received
and expended, make periodic reports to the Board of activi-
ties conducted, and make such other reports as the Board
or the Secretary may require.
(3) PROCESSOR ORGANIZATIONS.—The order shall provide
that the Board may contract with processor organizations for
any services required in addition to the services described in
H. R. 2854—192
paragraph (1). The contract shall include provisions comparable
to the provisions required by paragraph (2).
(f) ASSESSMENTS.—
(1) PROCESSORS.—The order shall provide that each proc-
essor marketing popcorn in the United States or for export
shall, in the manner prescribed in the order, pay assessments
and remit the assessments to the Board.
(2) DIRECT MARKETERS.—A processor that markets popcorn
produced by the processor directly to consumers shall pay and
remit the assessments on the popcorn directly to the Board
in the manner prescribed in the order.
(3) RATE.—
(A) IN GENERAL.—The rate of assessment prescribed
in the order shall be a rate established by the Board
but not more than $.08 per hundredweight of popcorn.
(B) ADJUSTMENT
OF
RATE.—The order shall provide
that the Board, with the approval of the Secretary, may
raise or lower the rate of assessment annually up to a
maximum of $.08 per hundredweight of popcorn.
(4) USE OF ASSESSMENTS.—
(A) IN GENERAL.—Subject to subparagraphs (B) and
(C) and subsection (c)(5), the order shall provide that the
assessments collected shall be used by the Board—
(i) to pay expenses incurred in implementing and
administering the order, with provision for a reason-
able reserve; and
(ii) to cover such administrative costs as are
incurred by the Secretary, except that the administra-
tive costs incurred by the Secretary (other than any
legal expenses incurred to defend and enforce the
order) that may be reimbursed by the Board may not
exceed 15 percent of the projected annual revenues
of the Board.
(B) EXPENDITURES
BASED
ON
SOURCE
OF
ASSESS-
MENTS.—In implementing plans and projects of promotion,
research, consumer information, and industry information,
the Board shall expend funds on—
(i) plans and projects for popcorn marketed in the
United States or Canada in proportion to the amount
of assessments collected on domestically marketed pop-
corn; and
(ii) plans and projects for exported popcorn in
proportion to the amount of assessments collected on
exported popcorn.
(C) NOTIFICATION.—If the administrative costs incurred
by the Secretary that are reimbursed by the Board exceed
10 percent of the projected annual revenues of the Board,
the Secretary shall notify as soon as practicable the
Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
(g) PROHIBITION ON USE OF FUNDS.—The order shall prohibit
any funds collected by the Board under the order from being used
to influence government action or policy, other than the use of
funds by the Board for the development and recommendation to
the Secretary of amendments to the order.
H. R. 2854—193
(h) BOOKS
AND RECORDS
OF
THE BOARD.—The order shall
require the Board to—
(1) maintain such books and records (which shall be avail-
able to the Secretary for inspection and audit) as the Secretary
may prescribe;
(2) prepare and submit to the Secretary, from time to
time, such reports as the Secretary may prescribe; and
(3) account for the receipt and disbursement of all funds
entrusted to the Board.
(i) BOOKS AND RECORDS OF PROCESSORS.—
(1) MAINTENANCE AND REPORTING OF INFORMATION.—The
order shall require that each processor of popcorn for the mar-
ket shall—
(A) maintain, and make available for inspection, such
books and records as are required by the order; and
(B) file reports at such time, in such manner, and
having such content as is prescribed in the order.
(2) USE OF INFORMATION.—The Secretary shall authorize
the use of information regarding processors that may be
accumulated under a law or regulation other than this subtitle
or a regulation issued under this subtitle. The information
shall be made available to the Secretary as appropriate for
the administration or enforcement of this subtitle, the order,
or any regulation issued under this subtitle.
(3) CONFIDENTIALITY.—
(A) IN GENERAL.—Subject to subparagraphs (B), (C),
and (D), all information obtained by the Secretary under
paragraphs (1) and (2) shall be kept confidential by all
officers, employees, and agents of the Board and the
Department.
(B) DISCLOSURE BY SECRETARY.—Information referred
to in subparagraph (A) may be disclosed if—
(i) the Secretary considers the information rel-
evant;
(ii) the information is revealed in a suit or adminis-
trative hearing brought at the request of the Secretary,
or to which the Secretary or any officer of the United
States is a party; and
(iii) the information relates to the order.
(C) DISCLOSURE TO OTHER AGENCY OF FEDERAL GOVERN-
MENT.—
(i) IN GENERAL.—No information obtained under
the authority of this subtitle may be made available
to another agency or officer of the Federal Government
for any purpose other than the implementation of this
subtitle and any investigatory or enforcement activity
necessary for the implementation of this subtitle.
(ii) PENALTY.—A person who knowingly violates
this subparagraph shall, on conviction, be subject to
a fine of not more than $1,000 or to imprisonment
for not more than 1 year, or both, and if an officer,
employee, or agent of the Board or the Department,
shall be removed from office or terminated from
employment, as applicable.
(D) GENERAL STATEMENTS.—Nothing in this paragraph
prohibits—
H. R. 2854—194
(i) the issuance of general statements based on
the reports of a number of persons subject to an order
or statistical data collected from the reports, if the
statements do not identify the information provided
by any person; or
(ii) the publication, by direction of the Secretary,
of the name of a person violating the order, together
with a statement of the particular provisions of the
order violated by the person.
(j) OTHER TERMS AND CONDITIONS.—The order shall contain
such other terms and conditions, consistent with this subtitle, as
are necessary to effectuate this subtitle, including regulations relat-
ing to the assessment of late payment charges.
SEC. 576. REFERENDA.
(a) INITIAL REFERENDUM.—
(1) IN GENERAL.—Within the 60-day period immediately
preceding the effective date of an order, as provided in section
574(b)(3), the Secretary shall conduct a referendum among
processors who, during a representative period as determined
by the Secretary, have been engaged in processing, for the
purpose of ascertaining whether the order shall go into effect.
(2) APPROVAL OF ORDER.—The order shall become effective,
as provided in section 574(b), only if the Secretary determines
that the order has been approved by not less than a majority
of the processors voting in the referendum and if the majority
processed more than 50 percent of the popcorn certified as
having been processed, during the representative period, by
the processors voting.
(b) ADDITIONAL REFERENDA.—
(1) IN GENERAL.—Not earlier than 3 years after the effective
date of an order approved under subsection (a), on the request
of the Board or a representative group of processors, as
described in paragraph (2), the Secretary may conduct addi-
tional referenda to determine whether processors favor the
suspension or termination of the order.
(2) REPRESENTATIVE GROUP OF PROCESSORS.—An additional
referendum on an order shall be conducted if the referendum
is requested by 30 percent or more of the number of processors
who, during a representative period as determined by the Sec-
retary, have been engaged in processing.
(3) DISAPPROVAL OF ORDER.—If the Secretary determines,
in a referendum conducted under paragraph (1), that suspen-
sion or termination of the order is favored by at least 2⁄3
of the processors voting in the referendum, the Secretary shall—
(A) suspend or terminate, as appropriate, collection
of assessments under the order not later than 180 days
after the date of determination; and
(B) suspend or terminate the order, as appropriate,
in an orderly manner as soon as practicable after the
date of determination.
(c) COSTS OF REFERENDUM.—The Secretary shall be reimbursed
from assessments collected by the Board for any expenses incurred
by the Secretary in connection with the conduct of any referendum
under this section.
H. R. 2854—195
(d) METHOD
OF CONDUCTING REFERENDUM.—Subject to this
section, a referendum conducted under this section shall be con-
ducted in such manner as is determined by the Secretary.
(e) CONFIDENTIALITY OF BALLOTS AND OTHER INFORMATION.—
(1) IN
GENERAL.—The ballots and other information or
reports that reveal or tend to reveal the vote of any processor,
or any business operation of a processor, shall be considered
to be strictly confidential and shall not be disclosed.
(2) PENALTY FOR VIOLATIONS.—An officer or employee of
the Department who knowingly violates paragraph (1) shall
be subject to the penalties described in section 575(i)(3)(C)(ii).
SEC. 577. PETITION AND REVIEW.
(a) PETITION.—
(1) IN GENERAL.—A person subject to an order may file
with the Secretary a petition—
(A) stating that the order, a provision of the order,
or an obligation imposed in connection with the order is
not established in accordance with law; and
(B) requesting a modification of the order or obligation
or an exemption from the order or obligation.
(2) STATUTE OF LIMITATIONS.—A petition under paragraph
(1) concerning an obligation may be filed not later than 2
years after the date of imposition of the obligation.
(3) HEARINGS.—The petitioner shall be given the oppor-
tunity for a hearing on a petition filed under paragraph (1),
in accordance with regulations issued by the Secretary.
(4) RULING.—After a hearing under paragraph (3), the Sec-
retary shall issue a ruling on the petition that is the subject
of the hearing, which shall be final if the ruling is in accordance
with applicable law.
(b) REVIEW.—
(1) COMMENCEMENT OF ACTION.—The district court of the
United States for any district in which a person who is a
petitioner under subsection (a) resides or carries on business
shall have jurisdiction to review a ruling on the petition, if
the person files a complaint not later than 20 days after the
date of issuance of the ruling under subsection (a)(4).
(2) PROCESS.—Service of process in a proceeding under
paragraph (1) may be made on the Secretary by delivering
a copy of the complaint to the Secretary.
(3) REMANDS.—If the court determines, under paragraph
(1), that a ruling issued under subsection (a)(4) is not in accord-
ance with applicable law, the court shall remand the matter
to the Secretary with directions—
(A) to make such ruling as the court shall determine
to be in accordance with law; or
(B) to take such further proceedings as, in the opinion
of the court, the law requires.
(c) ENFORCEMENT.—The pendency of proceedings instituted
under subsection (a) may not impede, hinder, or delay the Secretary
or the Attorney General from taking action under section 578.
SEC. 578. ENFORCEMENT.
(a) IN GENERAL.—The Secretary may issue an enforcement
order to restrain or prevent any person from violating an order
or regulation issued under this subtitle and may assess a civil
penalty of not more than $1,000 for each violation of the enforce-
H. R. 2854—196
ment order, after an opportunity for an administrative hearing,
if the Secretary determines that the administration and enforcement
of the order and this subtitle would be adequately served by such
a procedure.
(b) JURISDICTION.—The district courts of the United States
are vested with jurisdiction specifically to enforce, and to prevent
and restrain any person from violating, an order or regulation
issued under this subtitle.
(c) REFERRAL TO ATTORNEY GENERAL.—A civil action authorized
to be brought under this section shall be referred to the Attorney
General for appropriate action.
SEC. 579. INVESTIGATIONS AND POWER TO SUBPOENA.
(a) INVESTIGATIONS.—The Secretary may make such investiga-
tions as the Secretary considers necessary—
(1) for the effective administration of this subtitle; and
(2) to determine whether any person subject to this subtitle
has engaged, or is about to engage, in an act that constitutes
or will constitute a violation of this subtitle or of an order
or regulation issued under this subtitle.
(b) OATHS, AFFIRMATIONS, AND SUBPOENAS.—For the purpose
of an investigation under subsection (a), the Secretary may admin-
ister oaths and affirmations, subpoena witnesses, compel the attend-
ance of witnesses, take evidence, and require the production of
any records that are relevant to the inquiry. The attendance of
witnesses and the production of records may be required from
any place in the United States.
(c) AID OF COURTS.—
(1) REQUEST.—In the case of contumacy by, or refusal to
obey a subpoena issued to, any person, the Secretary may
request the aid of any court of the United States within the
jurisdiction of which the investigation or proceeding is carried
on, or where the person resides or carries on business, in
requiring the attendance and testimony of the person and the
production of records.
(2) ENFORCEMENT ORDER OF THE COURT.—The court may
issue an enforcement order requiring the person to appear
before the Secretary to produce records or to give testimony
concerning the matter under investigation.
(3) CONTEMPT.—A failure to obey an enforcement order
of the court under paragraph (2) may be punished by the
court as a contempt of the court.
(4) PROCESS.—Process in a case under this subsection may
be served in the judicial district in which the person resides
or carries on business or wherever the person may be found.
SEC. 580. RELATION TO OTHER PROGRAMS.
Nothing in this subtitle preempts or supersedes any other
program relating to popcorn promotion organized and operated
under the laws of the United States or any State.
SEC. 581. REGULATIONS.
The Secretary may issue such regulations as are necessary
to carry out this subtitle.
SEC. 582. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are
necessary to carry out this subtitle. Amounts made available under
H. R. 2854—197
this section or otherwise made available to the Department, and
amounts made available under any other marketing or promotion
order, may not be used to pay any administrative expense of the
Board.
Subtitle F—Miscellaneous
SEC. 591. MAINTENANCE OF RECORDS FOR HONEY PROMOTION PRO-
GRAM.
Section 9(f) of the Honey Research, Promotion, and Consumer
Information Act (7 U.S.C. 4608(f)) is amended by inserting ‘‘produc-
ers,’’ after ‘‘importers,’’.
TITLE VI—CREDIT
Subtitle A—Farm Ownership Loans
SEC. 601. LIMITATION ON DIRECT FARM OWNERSHIP LOANS.
Section 302 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1922) is amended by striking subsection (b) and
inserting the following:
‘‘(b) DIRECT LOANS.—
‘‘(1) IN GENERAL.—Subject to paragraph (3), the Secretary
may make a direct loan under this subtitle only to a farmer
or rancher who has operated a farm or ranch for not less
than 3 years and—
‘‘(A) is a qualified beginning farmer or rancher;
‘‘(B) has not received a previous direct farm ownership
loan made under this subtitle; or
‘‘(C) has not received a direct farm ownership loan
under this subtitle more than 10 years before the date
the new loan would be made.
‘‘(2) YOUTH LOANS.—The operation of an enterprise by a
youth under section 311(b) shall not be considered the operation
of a farm or ranch for purposes of paragraph (1).
‘‘(3) TRANSITION RULE.—
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and
(C), the Secretary may make a direct loan under this sub-
title to a farmer or rancher who has a direct loan outstand-
ing under this subtitle on the date of enactment of this
paragraph.
‘‘(B) LESS THAN 5 YEARS.—If, as of the date of enact-
ment of this paragraph, a farmer or rancher has had a
direct loan outstanding under this subtitle for less than
5 years, the Secretary shall not make a loan to the farmer
or rancher under subparagraph (A) after the date that
is 10 years after the date of enactment of this paragraph.
‘‘(C) 5 YEARS OR MORE.—If, as of the date of enactment
of this paragraph, a farmer or rancher has had a direct
loan outstanding under this subtitle for 5 years or more,
the Secretary shall not make a loan to the farmer or
rancher under subparagraph (A) after the date that is
5 years after the date of enactment of this paragraph.’’.
H. R. 2854—198
SEC. 602. PURPOSES OF LOANS.
(a) IN GENERAL.—Section 303 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1923) is amended to read as
follows:
‘‘SEC. 303. PURPOSES OF LOANS.
‘‘(a) ALLOWED PURPOSES.—
‘‘(1) DIRECT LOANS.—A farmer or rancher may use a direct
loan made under this subtitle only for—
‘‘(A) acquiring or enlarging a farm or ranch;
‘‘(B) making capital improvements to a farm or ranch;
‘‘(C) paying loan closing costs related to acquiring,
enlarging, or improving a farm or ranch; or
‘‘(D) paying for activities to promote soil and water
conservation and protection described in section 304 on
a farm or ranch.
‘‘(2) GUARANTEED LOANS.—A farmer or rancher may use
a loan guaranteed under this subtitle only for—
‘‘(A) acquiring or enlarging a farm or ranch;
‘‘(B) making capital improvements to a farm or ranch;
‘‘(C) paying loan closing costs related to acquiring,
enlarging, or improving a farm or ranch;
‘‘(D) paying for activities to promote soil and water
conservation and protection described in section 304 on
a farm or ranch; or
‘‘(E) refinancing indebtedness.
‘‘(b) PREFERENCES.—In making or guaranteeing a loan under
this subtitle for purchase of a farm or ranch, the Secretary shall
give preference to a person who—
‘‘(1) has a dependent family;
‘‘(2) to the extent practicable, is able to make an initial
down payment on the farm or ranch; or
‘‘(3) is an owner of livestock or farm or ranch equipment
that is necessary to successfully carry out farming or ranching
operations.
‘‘(c) HAZARD INSURANCE REQUIREMENT.—
‘‘(1) IN GENERAL.—After the Secretary makes the deter-
mination required by paragraph (2), the Secretary may not
make a loan to a farmer or rancher under this subtitle unless
the farmer or rancher has, or agrees to obtain, hazard insurance
on any real property to be acquired or improved with the
loan.
‘‘(2) DETERMINATION.—Not later than 180 days after the
date of enactment of this subsection, the Secretary shall deter-
mine the appropriate level of insurance to be required under
paragraph (1).’’.
(b) TRANSITIONAL PROVISION.—Section 303(c)(1) of the Consoli-
dated Farm and Rural Development Act shall not apply until the
Secretary of Agriculture makes the determination required by sec-
tion 303(c)(2) of the Act.
SEC. 603. SOIL AND WATER CONSERVATION AND PROTECTION.
Section 304 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1924) is amended—
(1) by striking subsections (b) and (c);
(2) by striking ‘‘SEC. 304. (a)(1) Loans’’ and inserting the
following:
H. R. 2854—199
‘‘SEC. 304. SOIL AND WATER CONSERVATION AND PROTECTION.
‘‘(a) IN GENERAL.—Loans’’;
(3) by striking ‘‘(2) In making or insuring’’ and inserting
the following:
‘‘(b) PRIORITY.—In making or guaranteeing’’;
(4) by striking ‘‘(3) The Secretary’’ and inserting the follow-
ing:
‘‘(c) LOAN MAXIMUM.—The Secretary’’;
(5) by redesignating subparagraphs (A) through (F) of sub-
section (a) (as amended by paragraph (2)) as paragraphs (1)
through (6), respectively; and
(6) by redesignating subparagraphs (A) and (B) of sub-
section (c) (as amended by paragraph (4)) as paragraphs (1)
and (2), respectively.
SEC. 604. INTEREST RATE REQUIREMENTS.
Section 307(a)(3) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1927(a)(3)) is amended—
(1) in subparagraph (B), by inserting ‘‘subparagraph (D)
and in’’ after ‘‘Except as provided in’’; and
(2) by adding at the end the following:
‘‘(D) JOINT FINANCING ARRANGEMENT.—If a direct farm
ownership loan is made under this subtitle as part of
a joint financing arrangement and the amount of the direct
farm ownership loan does not exceed 50 percent of the
total principal amount financed under the arrangement,
the interest rate on the direct farm ownership loan shall
be at least 4 percent annually.’’.
SEC. 605. INSURANCE OF LOANS.
Section 308 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1928) is amended to read as follows:
‘‘SEC. 308. FULL FAITH AND CREDIT.
‘‘(a) IN
GENERAL.—A contract of insurance or guarantee
executed by the Secretary under this title shall be an obligation
supported by the full faith and credit of the United States.
‘‘(b) CONTESTABILITY.—A contract of insurance or guarantee
executed by the Secretary under this title shall be incontestable
except for fraud or misrepresentation that the lender or any
holder—
‘‘(1) has actual knowledge of at the time the contract or
guarantee is executed; or
‘‘(2) participates in or condones.’’.
SEC. 606. LOANS GUARANTEED.
Section 309(h) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1929(h)) is amended by adding at the end
the following:
‘‘(4) MAXIMUM GUARANTEE OF 90 PERCENT.—Except as pro-
vided in paragraphs (5) and (6), a loan guarantee under this
title shall be for not more than 90 percent of the principal
and interest due on the loan.
‘‘(5) REFINANCED LOANS GUARANTEED AT 95 PERCENT.—The
Secretary shall guarantee 95 percent of—
‘‘(A) in the case of a loan that solely refinances a
direct loan made under this title, the principal and interest
due on the loan on the date of the refinancing; or
H. R. 2854—202
the Occupational Safety and Health Act of 1970 (29 U.S.C.
655) or a standard adopted by a State under a plan approved
under section 18 of the Act (29 U.S.C. 667), if the Secretary
determines that without assistance under this paragraph the
farmer or rancher is likely to suffer substantial economic injury
due to compliance with the standard;
‘‘(8) training a borrower under section 359; or
‘‘(9) providing other farm, ranch, or home needs, including
family subsistence.
‘‘(c) HAZARD INSURANCE REQUIREMENT.—
‘‘(1) IN GENERAL.—After the Secretary makes the deter-
mination required by paragraph (2), the Secretary may not
make a loan to a farmer or rancher under this subtitle unless
the farmer or rancher has, or agrees to obtain, hazard insurance
on the property to be acquired with the loan.
‘‘(2) DETERMINATION.—Not later than 180 days after the
date of enactment of this paragraph, the Secretary shall deter-
mine the appropriate level of insurance to be required by para-
graph (1).
‘‘(d) PRIVATE RESERVE.—
‘‘(1) IN GENERAL.—Notwithstanding any other provision of
this title, the Secretary may reserve a portion of any loan
made under this subtitle to be placed in an unsupervised bank
account that may be used at the discretion of the borrower
for the basic family needs of the borrower and the immediate
family of the borrower.
‘‘(2) LIMIT ON SIZE OF THE RESERVE.—The size of the reserve
shall not exceed the least of—
‘‘(A) 10 percent of the loan;
‘‘(B) $5,000; or
‘‘(C) the amount needed to provide for the basic family
needs of the borrower and the borrower’s immediate family
for 3 calendar months.’’.
(b) TRANSITIONAL PROVISION.—Section 312(c)(1) of the Consoli-
dated Farm and Rural Development Act shall not apply until the
Secretary of Agriculture makes the determination required by sec-
tion 312(c)(2) of the Act.
SEC. 613. PARTICIPATION IN LOANS.
Section 315 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1945) is repealed.
SEC. 614. LINE-OF-CREDIT LOANS.
Section 316 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1946) is amended by adding at the end the following:
‘‘(c) LINE-OF-CREDIT LOANS.—
‘‘(1) IN GENERAL.—A loan made or guaranteed by the Sec-
retary under this subtitle may be in the form of a line-of-
credit loan.
‘‘(2) TERM.—A line-of-credit loan under paragraph (1) shall
terminate not later than 5 years after the date that the loan
is made or guaranteed.
‘‘(3) ELIGIBILITY.—For purposes of determining eligibility
for a farm operating loan under this subtitle, each year during
which a farmer or rancher takes an advance or draws on
a line-of-credit loan the farmer or rancher shall be considered
to have received an operating loan for 1 year.
H. R. 2854—203
‘‘(4) TERMINATION OF DELINQUENT LOANS.—If a borrower
does not pay an installment on a line-of-credit loan on schedule,
the borrower may not take an advance or draw on the line-
of-credit, unless the Secretary determines that—
‘‘(A) the borrower’s failure to pay on schedule was
due to unusual conditions that the borrower could not
control; and
‘‘(B) the borrower will reduce the line-of-credit balance
to the scheduled level at the end of—
‘‘(i) the production cycle; or
‘‘(ii) the marketing of the borrower’s agricultural
products.
‘‘(5) AGRICULTURAL
COMMODITIES.—A line-of-credit loan
may be used to finance the production or marketing of an
agricultural commodity that—
‘‘(A) is eligible for a price support program of the
Department of Agriculture; or
‘‘(B) was eligible for a price support program of the
Department of Agriculture on the day before the date of
enactment of the Federal Agriculture Improvement and
Reform Act of 1996.’’.
SEC. 615. INSURANCE OF OPERATING LOANS.
Section 317 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1947) is repealed.
SEC. 616. SPECIAL ASSISTANCE FOR BEGINNING FARMERS AND
RANCHERS.
(a) IN GENERAL.—Section 318 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1948) is repealed.
(b) CONFORMING AMENDMENT.—Section 310F of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 1936) is repealed.
SEC. 617. LIMITATION ON PERIOD FOR WHICH BORROWERS ARE
ELIGIBLE FOR GUARANTEED ASSISTANCE.
Section 319 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1949) is amended by striking subsection (b) and
inserting the following:
‘‘(b) LIMITATION
ON PERIOD BORROWERS ARE ELIGIBLE
FOR
GUARANTEED ASSISTANCE.—
‘‘(1) GENERAL RULE.—Subject to paragraph (2), the Sec-
retary shall not guarantee a loan under this subtitle for a
borrower for any year after the 15th year that a loan is made
to, or a guarantee is provided with respect to, the borrower
under this subtitle.
‘‘(2) TRANSITION RULE.—If, as of October 28, 1992, a farmer
or rancher has received a direct or guaranteed operating loan
under this subtitle during each of 10 or more previous years,
the borrower shall be eligible to receive a guaranteed operating
loan under this subtitle during 5 additional years after October
28, 1992.’’.
H. R. 2854—204
Subtitle C—Emergency Loans
SEC. 621. HAZARD INSURANCE REQUIREMENT.
(a) IN GENERAL.—Section 321 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1961) is amended by striking
subsection (b) and inserting the following:
‘‘(b) HAZARD INSURANCE REQUIREMENT.—
‘‘(1) IN GENERAL.—After the Secretary makes the deter-
mination required by paragraph (2), the Secretary may not
make a loan to a farmer or rancher under this subtitle to
cover a property loss unless the farmer or rancher had hazard
insurance that insured the property at the time of the loss.
‘‘(2) DETERMINATION.—Not later than 180 days after the
date of enactment of this paragraph, the Secretary shall deter-
mine the appropriate level of insurance to be required under
paragraph (1).’’.
(b) TRANSITIONAL PROVISION.—Section 321(b)(1) of the Consoli-
dated Farm and Rural Development Act shall not apply until the
Secretary of Agriculture makes the determination required by sec-
tion 321(b)(2) of the Act.
SEC. 622. NARROWING OF AUTHORITY TO WAIVE APPLICATION OF
THE CREDIT ELSEWHERE TEST.
The second proviso of section 322(b) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1962(b)) is amended by strik-
ing ‘‘$300,000 or less’’ and inserting ‘‘$100,000 or less’’.
SEC. 623. LINKING OF EMERGENCY LOANS FOR CROP OR LIVESTOCK
CHANGES TO NATURAL DISASTERS.
Section 323 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1963) is amended by inserting ‘‘that are necessitated
by a natural disaster, major disaster, or emergency and that are’’
after ‘‘livestock changes’’.
SEC. 624. MAXIMUM EMERGENCY LOAN INDEBTEDNESS.
Section 324 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1964) is amended by striking ‘‘SEC. 324. (a) No
loan’’ and all that follows through the end of subsection (a) and
inserting the following:
‘‘SEC. 324. TERMS OF LOANS.
‘‘(a) MAXIMUM AMOUNT OF LOAN.—The Secretary may not make
a loan under this subtitle to a borrower who has suffered a loss
in an amount that—
‘‘(1) exceeds the actual loss caused by a disaster; or
‘‘(2) would cause the total indebtedness of the borrower
under this subtitle to exceed $500,000.’’.
SEC. 625. ESTABLISHMENT OF DATE FOR EMERGENCY LOAN ASSET
VALUATION.
The last sentence of section 324(d) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1964(d)) is amended by strik-
ing ‘‘value the assets’’ and all that follows through the period
and inserting ‘‘establish the value of the assets as of the day
before the occurrence of the natural disaster, major disaster, or
emergency that is the basis for a request for assistance under
H. R. 2854—205
this subtitle or the Robert T. Stafford Disaster Relief and Emer-
gency Assistance Act (42 U.S.C. 5121 et seq.).’’.
SEC. 626. INSURANCE OF EMERGENCY LOANS.
Section 328 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1968) is repealed.
Subtitle D—Administrative Provisions
SEC. 631. TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.
Section 331 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981) is amended by adding at the end the following:
‘‘(d) TEMPORARY AUTHORITY TO ENTER INTO CONTRACTS.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) ELIGIBLE
FINANCIAL
INSTITUTION.—The term
‘eligible financial institution’ means a financial institution
with substantial experience in farm, ranch, or aquaculture
lending that is regulated by the Comptroller of the Cur-
rency, the Farm Credit Administration, or a similar regu-
latory body.
‘‘(B) PILOT PROJECT.—The term ‘pilot project’ includes
services related to borrower loan documentation, financial
information, credit history, and appraisals of real estate
and chattel.
‘‘(2) AUTHORITY.—The Secretary may enter into a contract
with an eligible financial institution for servicing a farmer
program loan under this title, including 1 or more pilot projects.
‘‘(3) REPORT.—Not later than September 30, 1997, and
September 30 of each year thereafter, the Secretary shall report
to Congress on—
‘‘(A) the Secretary’s experience in using contracts under
paragraph (2); and
‘‘(B) recommendations for legislation related to this
subsection, if any.
‘‘(4) SAVINGS
CLAUSE.—Nothing in this subsection shall
limit the authority of the Secretary or an eligible financial
institution to contract for any services under this Act or any
other law.
‘‘(5) SUNSET PROVISION.—This subsection shall be effective
until September 30, 2002.’’.
SEC. 632. USE OF COLLECTION AGENCIES.
Section 331 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1981) (as amended by section 631) is amended by
adding at the end the following:
‘‘(e) PRIVATE COLLECTION AGENCY.—The Secretary may use
a private collection agency to collect a claim or obligation described
in subsection (b)(5).’’.
SEC. 633. NOTICE OF LOAN SERVICE PROGRAMS.
Section 331D(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1981d(a)) is amended by striking ‘‘180 days
delinquent in’’ and inserting ‘‘90 days past due on’’.
H. R. 2854—206
SEC. 634. CLARIFICATION OF WRITTEN STATEMENT REQUIRED OF
BORROWERS.
Section 333(1)(B) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1983(1)(B)) is amended by striking ‘‘a written
statement showing the applicant’s net worth’’ and inserting ‘‘an
appropriate written financial statement’’.
SEC. 635. ANNUAL REVIEW OF THE CREDIT HISTORY, BUSINESS OPER-
ATION, AND CONTINUED ELIGIBILITY OF A BORROWER.
(a) IN GENERAL.—Section 333 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1983) is amended—
(1) by redesignating paragraphs (2), (3), and (4) as para-
graphs (3), (4), and (5), respectively; and
(2) by inserting after paragraph (1) the following:
‘‘(2) except with respect to a loan under section 306, 310B,
or 314, the county or area committee established under section
8(b)(5)(B) of the Soil Conservation and Domestic Allotment
Act (16 U.S.C. 590h(b)(5)(B)) to certify in writing—
‘‘(A) that an annual review of the credit history and
business operation of the borrower has been conducted;
and
‘‘(B) that a review of the continued eligibility of the
borrower for the loan has been conducted;’’.
(b) CONFORMING AMENDMENT.—The third sentence of section
310B(a) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 1932(a)) is amended by striking ‘‘(3) of’’ and inserting
‘‘(4) of’’.
SEC. 636. EXTENSION OF VETERANS PREFERENCE.
Section 333 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1983) (as amended by section 635(a)) is amended
by striking paragraph (5) and inserting the following:
‘‘(5) the application of a person who is a veteran of any
war, as defined in section 101(12) of title 38, United States
Code, for a loan under subtitle A or B to be given preference
over a similar application from a person who is not a veteran
of any war, if the applications are on file in a county or
area office at the same time.’’.
SEC. 637. VERIFICATION OF THE CREDIT ELSEWHERE TEST.
Section 333A(f)(4) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1983a(f)(4)) is amended—
(1) by striking ‘‘(4) With’’ and all that follows through
‘‘seasoned’’ and inserting the following:
‘‘(4) VERIFICATION.—
‘‘(A) IN
GENERAL.—The Secretary shall provide a
prospectus of a seasoned’’; and
(2) by striking ‘‘If the Secretary’’ and inserting the follow-
ing:
‘‘(B) NOTIFICATION.—The Secretary shall notify each
borrower of a loan that a prospectus has been provided
to a lender under subparagraph (A).
‘‘(C) CREDIT EXTENDED.—If the Secretary’’.
SEC. 638. SALE OF PROPERTY.
Section 335 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1985) is amended—
H. R. 2854—207
(1) in subsection (b), by striking ‘‘subsection (e)’’ and insert-
ing ‘‘subsections (c) and (e)’’;
(2) by striking subsection (c) and inserting the following:
‘‘(c) SALE OF PROPERTY.—
‘‘(1) IN GENERAL.—Subject to this subsection and subsection
(e)(1)(A), the Secretary shall offer to sell real property that
is acquired by the Secretary under this title using the following
order and method of sale:
‘‘(A) ADVERTISEMENT.—Not later than 15 days after
acquiring real property, the Secretary shall publicly adver-
tise the property for sale.
‘‘(B) BEGINNING FARMER OR RANCHER.—
‘‘(i) IN
GENERAL.—Not later than 75 days after
acquiring real property, the Secretary shall offer to
sell the property to a qualified beginning farmer or
rancher at current market value based on a current
appraisal.
‘‘(ii) RANDOM SELECTION.—If more than 1 qualified
beginning farmer or rancher offers to purchase the
property, the Secretary shall select between the quali-
fied applicants on a random basis.
‘‘(iii) APPEAL OF RANDOM SELECTION.—A random
selection or denial by the Secretary of a beginning
farmer or rancher for farm inventory property under
this subparagraph shall be final and not administra-
tively appealable.
‘‘(C) PUBLIC SALE.—If no acceptable offer is received
from a qualified beginning farmer or rancher under
subparagraph (B) not later than 75 days after acquiring
the real property, the Secretary shall, not later than 30
days after the 75-day period, sell the property after public
notice at a public sale, and, if no acceptable bid is received,
by negotiated sale, at the best price obtainable.
‘‘(2) TRANSITIONAL RULES.—
‘‘(A) PREVIOUS
LEASE.—In the case of real property
acquired prior to the date of enactment of this subpara-
graph that the Secretary leased prior to the date of enact-
ment of this subparagraph, not later than 60 days after
the lease expires, the Secretary shall offer to sell the prop-
erty in accordance with paragraph (1).
‘‘(B) PREVIOUSLY IN INVENTORY.—In the case of real
property acquired prior to the date of enactment of this
subparagraph that the Secretary has not leased, not later
than 60 days after the date of enactment of this subpara-
graph, the Secretary shall offer to sell the property in
accordance with paragraph (1).
‘‘(3) INTEREST.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), any
conveyance of real property under this subsection shall
include all of the interest of the United States in the
property, including mineral rights.
‘‘(B) CONSERVATION.—The Secretary may for conserva-
tion purposes grant or sell an easement, restriction, devel-
opment right, or similar legal right to real property to
a State, a political subdivision of a State, or a private
nonprofit organization separately from the underlying fee
or other rights to the property owned by the United States.
H. R. 2854—208
‘‘(4) OTHER LAW.—The Federal Property and Administrative
Services Act of 1949 (40 U.S.C. 471 et seq.) shall not apply
to any exercise of authority under this title.
‘‘(5) LEASE OF PROPERTY.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
Secretary may not lease any real property acquired under
this title.
‘‘(B) EXCEPTION.—
‘‘(i) BEGINNING
FARMER
OR
RANCHER.—The Sec-
retary may lease or contract to sell to a beginning
farmer or rancher a farm or ranch acquired by the
Secretary under this title if the beginning farmer or
rancher qualifies for a credit sale or direct farm owner-
ship loan under subtitle A but credit sale authority
for loans or direct farm ownership loan funds, respec-
tively, are not available.
‘‘(ii) TERM.—The term of a lease or contract to
sell to a beginning farmer or rancher under clause
(i) shall be until the earlier of—
‘‘(I) the date that is 18 months after the date
of the lease or sale; or
‘‘(II) the date that direct farm ownership loan
funds or credit sale authority for loans becomes
available to the beginning farmer or rancher.
‘‘(iii) INCOME-PRODUCING
CAPABILITY.—In deter-
mining the rental rate on real property leased under
this subparagraph, the Secretary shall consider the
income-producing capability of the property during the
term that the property is leased.
‘‘(6) EXPEDITED DETERMINATION.—
‘‘(A) IN
GENERAL.—On the request of an applicant,
not later than 30 days after denial of the applicant’s
application, the appropriate State director shall provide
an expedited review and determination of whether the
applicant is a beginning farmer or rancher for the purpose
of acquiring farm inventory property.
‘‘(B) APPEAL.—The determination of a State Director
under subparagraph (A) shall be final and not administra-
tively appealable.
‘‘(C) EFFECTS OF DETERMINATIONS.—
‘‘(i) IN
GENERAL.—The Secretary shall maintain
statistical data on the number and results of deter-
minations made under subparagraph (A) and the effect
of the determinations on—
‘‘(I) selling farm inventory property to begin-
ning farmers and ranchers; and
‘‘(II) disposing of real property in inventory.
‘‘(ii) NOTIFICATION.—The Secretary shall notify the
Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate if the Secretary determines
that the review process under subparagraph (A) is
adversely affecting the selling of farm inventory prop-
erty to beginning farmers or ranchers or the disposing
of real property in inventory.’’; and
(3) in subsection (e)—
(A) in paragraph (1)—
H. R. 2854—209
(i) by striking subparagraphs (A) through (C);
(ii) by redesignating subparagraphs (D) through
(G) as subparagraphs (A) through (D), respectively;
(iii) in subparagraph (A) (as redesignated by clause
(ii))—
(I) in clause (i)—
(aa) in the matter preceding subclause (I),
by striking ‘‘(G)’’ and inserting ‘‘(D)’’;
(bb) by striking subclause (I) and inserting
the following:
‘‘(I) the Secretary acquires property under this title that
is located within an Indian reservation; and’’;
(cc) in subclause (II), by striking ‘‘, and’’
at the end and inserting a semicolon; and
(dd) by striking subclause (III); and
(II) in clause (iii), by striking ‘‘The Secretary
shall’’ and all that follows through ‘‘of subpara-
graph (A),’’ and inserting ‘‘Not later than 90 days
after acquiring the property, the Secretary shall’’;
and
(iv) in subparagraph (D) (as redesignated by clause
(ii))—
(I) in clause (i), by striking ‘‘(D)’’ in the matter
following subclause (IV) and inserting ‘‘(A)’’;
(II) in clause (iii)(I), by striking ‘‘subpara-
graphs (C)(i), (C)(ii), and (D)’’ and inserting
‘‘subparagraph (A)’’; and
(III) by striking clause (v) and inserting the
following:
‘‘(v) FORECLOSURE PROCEDURES.—
‘‘(I) NOTICE TO BORROWER.—If an Indian bor-
rower-owner does not voluntarily convey to the
Secretary real property described in clause (i), not
less than 30 days before a foreclosure sale of the
property, the Secretary shall provide the Indian
borrower-owner with the option of—
‘‘(aa) requiring the Secretary to assign the
loan and security instruments to the Secretary
of the Interior, if the Secretary of the Interior
agrees to an assignment releasing the Sec-
retary of Agriculture from all further respon-
sibility for collection of any amounts with
regard to the loan secured by the real property;
or
‘‘(bb) requiring the Secretary to assign the
loan and security instruments to the tribe hav-
ing jurisdiction over the reservation in which
the real property is located, if the tribe agrees
to the assignment.
‘‘(II) NOTICE TO TRIBE.—If an Indian borrower-
owner does not voluntarily convey to the Secretary
real property described in clause (i), not less than
30 days before a foreclosure sale of the property,
the Secretary shall provide written notice to the
Indian tribe that has jurisdiction over the reserva-
tion in which the real property is located of—
‘‘(aa) the sale;
H. R. 2854—210
‘‘(bb) the fair market value of the property;
and
‘‘(cc) the requirements of this subpara-
graph.
‘‘(III) ASSUMED
LOANS.—If an Indian tribe
assumes a loan under subclause (I)—
‘‘(aa) the Secretary shall not foreclose the
loan because of any default that occurred prior
to the date of the assumption;
‘‘(bb) the loan shall be for the lesser of
the outstanding principal and interest of the
loan or the fair market value of the property;
and
‘‘(cc) the loan shall be treated as though
the loan was made under Public Law 91–229
(25 U.S.C. 488 et seq.).’’;
(B) by striking paragraph (3);
(C) in paragraph (4)—
(i) by striking subparagraph (B);
(ii) in subparagraph (A)—
(I) in clause (i), by striking ‘‘(i)’’; and
(II) by redesignating clause (ii) as subpara-
graph (B); and
(iii) in subparagraph (B) (as redesignated by clause
(ii)(II)), by striking ‘‘clause (i)’’ and inserting ‘‘subpara-
graph (A)’’;
(D) by striking paragraphs (5), (6), and (9); and
(E) by redesignating paragraphs (4), (7), (8), and (10)
as paragraphs (3), (4), (5), and (6), respectively.
SEC. 639. EASEMENTS ON INVENTORIED PROPERTY.
Section 335(g) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1985(g)) is amended—
(1) in paragraph (1)—
(A) by striking ‘‘(g)(1) Subject to paragraphs (2) through
(5)’’ and inserting the following:
‘‘(g) EASEMENTS ON INVENTORIED PROPERTY.—
‘‘(1) IN GENERAL.—Subject to paragraph (2)’’; and
(B) by striking ‘‘, as determined’’ and all that follows
through ‘‘3801 et seq.)’’;
(2) by striking paragraph (2) and inserting the following:
‘‘(2) LIMITATION.—The Secretary shall not establish a wet-
land conservation easement on an inventoried property that—
‘‘(A) was cropland on the date the property entered
the inventory of the Secretary; or
‘‘(B) was used for farming at any time during the
period beginning on the date 5 years before the property
entered the inventory of the Secretary and ending on the
date the property entered the inventory of the Secretary.’’;
(3) by striking paragraphs (3), (4), (5), and (8);
(4) by striking ‘‘(6) The Secretary’’ and inserting the follow-
ing:
‘‘(3) NOTIFICATION.—The Secretary’’; and
(5) by striking ‘‘(7) The appraised’’ and inserting the follow-
ing:
‘‘(4) APPRAISED VALUE.—The appraised’’.
H. R. 2854—211
SEC. 640. DEFINITIONS.
Section 343(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1991(a)) is amended—
(1) in paragraph (11)—
(A) in the text preceding subparagraph (A), by striking
‘‘applicant—’’ and inserting ‘‘applicant, regardless of
whether the applicant is participating in a program under
section 310E—’’; and
(B) in subparagraph (F)—
(i) by striking ‘‘15 percent’’ and inserting ‘‘25 per-
cent’’; and
(ii) by inserting before the semicolon at the end
the following: ‘‘, except that this subparagraph shall
not apply to a loan made or guaranteed under subtitle
B’’; and
(2) by adding at the end the following:
‘‘(12) DEBT FORGIVENESS.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(B), the term ‘debt forgiveness’ means reducing or terminat-
ing a farmer program loan made or guaranteed under
this title, in a manner that results in a loss to the Sec-
retary, through—
‘‘(i) writing down or writing off a loan under section
353;
‘‘(ii) compromising, adjusting, reducing, or charg-
ing-off a debt or claim under section 331;
‘‘(iii) paying a loss on a guaranteed loan under
section 357; or
‘‘(iv) discharging a debt as a result of bankruptcy.
‘‘(B) LOAN
RESTRUCTURING.—The term ‘debt forgive-
ness’ 
does 
not 
include 
consolidation, 
rescheduling,
reamortization, or deferral.’’.
SEC. 641. AUTHORIZATION FOR LOANS.
Section 346 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1994) is amended—
(1) in the second sentence of subsection (a), by striking
‘‘with or without’’ and all that follows through ‘‘administration’’;
and
(2) by striking subsection (b) and inserting the following:
‘‘(b) AUTHORIZATION FOR LOANS.—
‘‘(1) IN GENERAL.—The Secretary may make or guarantee
loans under subtitles A and B from the Agricultural Credit
Insurance Fund provided for in section 309 in not more than
the following amounts:
‘‘(A) 
FISCAL
YEAR
1996.—For 
fiscal 
year 
1996,
$3,085,000,000, of which—
‘‘(i) $585,000,000 shall be for direct loans, of
which—
‘‘(I) $85,000,000 shall be for farm ownership
loans under subtitle A; and
‘‘(II) $500,000,000 shall be for operating loans
under subtitle B; and
‘‘(ii) $2,500,000,000 shall be for guaranteed loans,
of which—
‘‘(I) $600,000,000 shall be for guarantees of
farm ownership loans under subtitle A; and
H. R. 2854—216
(2) by striking subsection (h).
(b) TECHNICAL AMENDMENT.—Section 1320 of the Food Security
Act of 1985 (Public Law 99–198; 7 U.S.C. 1999 note) is amended
by striking ‘‘Effective only’’ and all that follows through ‘‘1995,
the’’ and inserting ‘‘The’’.
SEC. 644. HOMESTEAD PROPERTY.
Section 352(c) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2000(c)) is amended—
(1) in paragraph (1)(A), by striking ‘‘90’’ each place it
appears and inserting ‘‘30’’; and
(2) in paragraph (6)—
(A) in the first sentence, by striking ‘‘Within 30’’ and
all that follows through ‘‘title,’’ and insert ‘‘Not later than
the date of acquisition of the property securing a loan
made under this title (or, in the case of real property
in inventory on the date of enactment of the Federal Agri-
culture Improvement and Reform Act of 1996, not later
than 5 days after the date of enactment of the Act),’’;
and
(B) by striking the second sentence.
SEC. 645. RESTRUCTURING.
Section 353 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2001) is amended—
(1) in subsection (c)—
(A) in paragraph (3), by striking subparagraph (C)
and inserting the following:
‘‘(C) CASH FLOW MARGIN.—For the purpose of assessing
under subparagraph (A) the ability of a borrower to meet
debt obligations and continue farming operations, the Sec-
retary shall assume that the borrower needs up to 110
percent of the amount indicated for payment of farm operat-
ing expenses, debt service obligations, and family living
expenses.’’; and
(B) by striking paragraph (6) and inserting the follow-
ing:
‘‘(6) TERMINATION OF LOAN OBLIGATIONS.—The obligations
of a borrower to the Secretary under a loan shall terminate
if—
‘‘(A) the borrower satisfies the requirements of para-
graphs (1) and (2) of subsection (b);
‘‘(B) the value of the restructured loan is less than
the recovery value; and
‘‘(C) not later than 90 days after receipt of the notifica-
tion described in paragraph (4)(B), the borrower pays (or
obtains third-party financing to pay) the Secretary an
amount equal to the current market value.’’;
(2) by striking subsection (k); and
(3) by redesignating subsections (l) through (p) as sub-
sections (k) through (o), respectively.
SEC. 646. TRANSFER OF INVENTORY LAND FOR CONSERVATION PUR-
POSES.
Section 354 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2002) is amended—
(1) in the matter preceding paragraph (1), by striking ‘‘The
Secretary, without reimbursement,’’ and inserting the following:
H. R. 2854—217
‘‘(a) IN GENERAL.—Subject to subsection (b), the Secretary’’;
(2) by striking paragraph (2) and inserting the following:
‘‘(2) that is eligible to be disposed of in accordance with
section 335; and’’; and
(3) by adding at the end the following:
‘‘(b) CONDITIONS.—The Secretary may not transfer any property
or interest in property under subsection (a) unless—
‘‘(1) at least 2 public notices are given of the transfer;
‘‘(2) if requested, at least 1 public meeting is held prior
to the transfer; and
‘‘(3) the Governor and at least 1 elected county official
of the State and county where the property is located are
consulted prior to the transfer.’’.
SEC. 647. IMPLEMENTATION OF TARGET PARTICIPATION RATES.
Section 355 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2003) is amended by adding at the end the following:
‘‘(f) IMPLEMENTATION CONSISTENT WITH SUPREME COURT HOLD-
ING.—Not later than 180 days after the date of enactment of this
subsection, the Secretary shall ensure that the implementation
of this section is consistent with the holding of the Supreme Court
in Adarand Constructors, Inc. v. Federico Pena, Secretary of
Transportation, 115 S. Ct. 2097 (1995).’’.
SEC. 648. DELINQUENT BORROWERS.
(a) PAYMENT OF INTEREST AS A CONDITION OF LOAN SERVICING
FOR BORROWERS.—The Consolidated Farm and Rural Development
Act (7 U.S.C. 1921 et seq.) is amended by adding at the end
the following:
‘‘SEC. 372. PAYMENT OF INTEREST AS A CONDITION OF LOAN SERVIC-
ING FOR BORROWERS.
‘‘The Secretary may not reschedule or reamortize a loan for
a borrower under this title who has not requested consideration
under section 331D(e) unless the borrower pays a portion, as deter-
mined by the Secretary, of the interest due on the loan.’’.
(b) LOAN AND LOAN SERVICING LIMITATIONS.—The Consolidated
Farm and Rural Development Act (7 U.S.C. 1921 et seq.) (as amend-
ed by subsection (a)) is amended by adding at the end the following:
‘‘SEC. 373. LOAN AND LOAN SERVICING LIMITATIONS.
‘‘(a) DELINQUENT BORROWERS PROHIBITED FROM OBTAINING
DIRECT OPERATING LOANS.—The Secretary may not make a direct
operating loan under subtitle B to a borrower who is delinquent
on any loan made or guaranteed under this title.
‘‘(b) LOANS PROHIBITED FOR BORROWERS THAT HAVE RECEIVED
DEBT FORGIVENESS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the Secretary may not make or guarantee a loan under this
title to a borrower who received debt forgiveness on a loan
made or guaranteed under this title.
‘‘(2) EXCEPTION.—The Secretary may make a direct or
guaranteed farm operating loan for paying annual farm or
ranch operating expenses of a borrower who was restructured
with a write-down under section 353.
‘‘(c) NO MORE THAN 1 DEBT FORGIVENESS FOR A BORROWER
ON A DIRECT LOAN.—The Secretary may not provide to a borrower
debt forgiveness on a direct loan made under this title if the
H. R. 2854—218
borrower has received debt forgiveness on another direct loan made
under this title.’’.
SEC. 649. SHORT FORM CERTIFICATION OF FARM PROGRAM BOR-
ROWER COMPLIANCE.
The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) (as amended by section 648) is amended by adding
at the end the following:
‘‘SEC. 374. SHORT FORM CERTIFICATION OF FARM PROGRAM BOR-
ROWER COMPLIANCE.
‘‘The Secretary shall develop and utilize a consolidated short
form for farm program borrowers to use in certifying compliance
with any applicable provision of law (including a regulation) that
serves as an eligibility prerequisite for a loan made under this
title.’’.
SEC. 650. CREDIT STUDY.
(a) IN GENERAL.—The Secretary of Agriculture shall conduct
a study and report to the Committee on Agriculture of the House
of Representatives and the Committee on Agriculture, Nutrition,
and Forestry of the Senate on the demand for and availability
of credit in rural areas for agriculture, housing, and rural develop-
ment.
(b) PURPOSE.—The purpose of the study shall be to ensure
that Congress has current and comprehensive information to con-
sider as Congress deliberates on rural credit needs and the availabil-
ity of credit to satisfy the needs of rural areas of the United
States.
(c) ITEMS IN STUDY.—In conducting the study, the Secretary
shall base the study on the most current available data and ana-
lyze—
(1) rural demand for credit from the Farm Credit System,
the ability of the Farm Credit System to meet the demand,
and the extent to which the Farm Credit System provides
loans to satisfy the demand;
(2) rural demand for credit from the United States banking
system, the ability of banks to meet the demand, and the
extent to which banks provide loans to satisfy the demand;
(3) rural demand for credit from the Secretary, the ability
of the Secretary to meet the demand, and the extent to which
the Secretary provides loans to satisfy the demand;
(4) rural demand for credit from other Federal agencies,
the ability of the agencies to meet the demand, and the extent
to which the agencies provide loans to satisfy the demand;
(5) what measure or measures exist to gauge the overall
demand for rural credit, the extent to which rural demand
for credit is satisfied, and what the measures have dem-
onstrated;
(6) a comparison of the interest rates and terms charged
by the Farm Credit System Farm Credit Banks, production
credit associations, and banks for cooperatives with the rates
and terms charged by the banks of the United States for credit
of comparable risk and maturity;
(7) the advantages and disadvantages of the modernization
and expansion proposals of the Farm Credit System on the
Farm Credit System, the United States banking system, rural
H. R. 2854—219
users of credit, local rural communities, and the Federal
Government, including—
(A) any added risk to the safety and soundness of
the Farm Credit System that may result from approval
of a proposal; and
(B) any positive or adverse impacts on competition
between the Farm Credit System and the banks of the
United States in providing credit to rural users;
(8) the nature and extent of the unsatisfied rural credit
need that the Farm Credit System proposals are supposed
to address and what aspects of the present Farm Credit System
prevent the Farm Credit System from meeting the need;
(9) the advantages and disadvantages of the proposal by
commercial bankers to allow banks access to the Farm Credit
System as a funding source on the Farm Credit System, the
United States banking system, rural users of credit, local rural
communities, and the Federal Government, including—
(A) any added risk to the safety and soundness of
the Farm Credit System that may result from approval
of the proposal; and
(B) any positive or adverse impacts on competition
between the Farm Credit System and the banks of the
United States in providing credit to rural users; and
(10) problems that commercial banks have in obtaining
capital for lending in rural areas, how access to Farm Credit
System funds would improve the availability of capital in rural
areas in ways that cannot be achieved in the system in existence
on the date of enactment of this Act, and the possible effects
on the viability of the Farm Credit System of granting banks
access to Farm Credit System funds.
(d) INTERAGENCY TASK FORCE.—In completing the study, the
Secretary shall use, among other things, data and information
obtained by the interagency task force on rural credit.
Subtitle E—General Provisions
SEC. 661. CONFORMING AMENDMENTS.
(a) Section 307(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1927(a)) is amended—
(1) in paragraph (4), by striking ‘‘304(b), 306(a)(1), and
310B’’ and inserting ‘‘306(a)(1) and 310B’’; and
(2) in paragraph (6)(B)—
(A) by striking clauses (i), (ii), (iv), and (vii);
(B) in clause (v), by adding ‘‘and’’ at the end;
(C) in clause (vi), by striking ‘‘, and’’ at the end and
inserting a period; and
(D) by redesignating clauses (iii), (v), and (vi) as clauses
(i), (ii), and (iii), respectively.
(b) The second sentence of section 309(g)(1) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1929(g)(1)) is amended
by striking ‘‘section 308,’’.
(c) Section 309A of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1929a) is amended—
(1) in the second sentence of subsection (a), by striking
‘‘304(b), 306(a)(1), 306(a)(14), 310B, and 312(b)’’ and inserting
‘‘306(a)(1), 306(a)(14), and 310B’’; and
H. R. 2854—220
(2) in the first sentence of subsection (b), by striking ‘‘and
section 308’’.
(d) Section 310B(d) of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1932(d)) is amended—
(1) by striking ‘‘sections 304(b), 310B, and 312(b)’’ each
place it appears in paragraphs (2), (3), and (4) and inserting
‘‘this section’’; and
(2) in paragraph (6), by striking ‘‘this section, section 304,
or section 312’’ and inserting ‘‘this section’’.
(e) The first sentence of section 310D(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1934(a)) is amended
by striking ‘‘paragraphs (1) through (5) of section 303(a), or subpara-
graphs (A) through (E) of section 304(a)(1)’’ and inserting ‘‘section
303(a), or paragraphs (1) through (5) of section 304(a)’’.
(f) Section 311(b)(1) of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1941(b)(1)) is amended by striking ‘‘and for
the purposes specified in section 312’’.
(g) Section 316(a) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1946(a)) is amended by striking paragraph
(3).
(h) Section 343 of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1991) is amended—
(1) in subsection (a)(10), by striking ‘‘recreation loan (RL)
under section 304,’’; and
(2) in subsection (b)—
(A) in the matter preceding paragraph (1), by striking
‘‘351(h),’’; and
(B) by striking paragraph (4) and inserting the follow-
ing:
‘‘(4) PRESERVATION
LOAN
SERVICE
PROGRAM.—The term
‘preservation loan service program’ means homestead retention
as authorized under section 352.’’.
(i) The first sentence of section 344 of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1992) is amended by striking
‘‘304(b), 306(a)(1), 310B, 312(b), or 312(c)’’ and inserting ‘‘306(a)(1),
310B, or 312(c)’’.
(j) Section 353(l) of the Consolidated Farm and Rural Develop-
ment Act (as redesignated by section 645(3)) is amended by striking
‘‘and subparagraphs (A)(i) and (C)(i) of section 335(e)(1),’’.
SEC. 662. ELECTRONIC FILING OF EFFECTIVE FINANCING STATE-
MENTS UNDER THE CLEAR TITLE PROVISIONS OF THE
FOOD SECURITY ACT OF 1985.
Section 1324(c)(4) of the Food Security Act of 1985 (7 U.S.C.
1631(c)(4)) is amended—
(1) in subparagraph (A), by striking ‘‘thereof’’ and inserting
‘‘of the statement, or, in the case of a State which (under
the applicable State law provisions of the Uniform Commercial
Code) allows the electronic filing of financing statements with-
out the signature of the debtor, is an electronically reproduced
copy of the statement’’; and
(2) in each of subparagraphs (B) and (C), by inserting
‘‘other than in the case of an electronically reproduced copy
of the statement,’’ before ‘‘is’’.
H. R. 2854—223
‘‘(ii) neither retain from the proceeds of a loan
provided under subparagraph (A), nor assess a qualify-
ing entity under paragraph (1), any amount except
as may be required to pay the actual costs incurred
in administering the loan or making the system or
facility available.
‘‘(3) APPEAL.—If the Secretary rejects the application of
a borrower who applies for a cost of money loan or grant
under this section, the borrower may appeal the decision to
the Secretary not later than 10 days after the borrower is
notified of the rejection.
‘‘(4) ASSISTANCE TO PROVIDE OR IMPROVE SERVICES.—Finan-
cial assistance may be provided under this chapter for a facility
regardless of the location of the facility if the Secretary deter-
mines that the assistance is necessary to provide or improve
telemedicine services or distance learning services in a rural
area.
‘‘(d) PRIORITY.—The Secretary shall establish procedures to
prioritize financial assistance under this chapter considering—
‘‘(1) the need for the assistance in the affected rural area;
‘‘(2) the financial need of the applicant;
‘‘(3) the population sparsity of the affected rural area;
‘‘(4) the local involvement in the project serving the affected
rural area;
‘‘(5) geographic diversity among the recipients of financial
assistance;
‘‘(6) the utilization of the telecommunications facilities of
any telecommunications provider serving the affected rural
area;
‘‘(7) the portion of total project financing provided by the
applicant from the funds of the applicant;
‘‘(8) the portion of project financing provided by the
applicant with funds obtained from non-Federal sources;
‘‘(9) the joint utilization of facilities financed by other finan-
cial assistance;
‘‘(10) the coordination of the proposed project with regional
projects or networks;
‘‘(11) service to the greatest practical number of persons
within the general geographic area covered by the financial
assistance;
‘‘(12) conformity with the State strategic plan as prepared
under section 381D of the Consolidated Farm and Rural Devel-
opment Act; and
‘‘(13) other factors determined appropriate by the Secretary.
‘‘(e) MAXIMUM AMOUNT OF ASSISTANCE TO INDIVIDUAL RECIPI-
ENTS.—The Secretary may establish the maximum amount of finan-
cial assistance to be made available to an individual recipient
for each fiscal year under this chapter, by publishing notice of
the maximum amount in the Federal Register not more than 45
days after funds are made available for the fiscal year to carry
out this chapter.
‘‘(f) USE OF FUNDS.—Financial assistance provided under this
chapter shall be used for—
‘‘(1) the development and acquisition of instructional
programming;
‘‘(2) the development and acquisition, through lease or pur-
chase, of computer hardware and software, audio and visual
H. R. 2854—224
equipment, computer network components, telecommunications
terminal equipment, telecommunications transmission facili-
ties, data terminal equipment, or interactive video equipment,
or other facilities that would further telemedicine services or
distance learning services;
‘‘(3) providing technical assistance and instruction for the
development or use of the programming, equipment, or facilities
referred to in paragraphs (1) and (2); or
‘‘(4) other uses that are consistent with this chapter, as
determined by the Secretary.
‘‘(g) SALARIES AND EXPENSES.—Notwithstanding subsection (f),
financial assistance provided under this chapter shall not be used
for paying salaries or administrative expenses.
‘‘(h) EXPEDITING COORDINATED TELEPHONE LOANS.—
‘‘(1) IN GENERAL.—The Secretary may establish and carry
out procedures to ensure that expedited consideration and
determination is given to applications for loans and advances
of funds submitted by local exchange carriers under this chapter
and the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.) to enable the exchange carriers to provide advanced tele-
communications services in rural areas in conjunction with
any other projects carried out under this chapter.
‘‘(2) DEADLINE
IMPOSED
ON
SECRETARY.—Not later than
45 days after the receipt of a completed application for an
expedited telephone loan under paragraph (1), the Secretary
shall notify the applicant in writing of the decision of the
Secretary regarding the application.
‘‘(i) NOTIFICATION OF LOCAL EXCHANGE CARRIER.—
‘‘(1) APPLICANTS.—Each applicant for a grant for a
telemedicine or distance learning project established under this
chapter shall notify the appropriate local telephone exchange
carrier regarding the application filed with the Secretary for
the grant.
‘‘(2) SECRETARY.—The Secretary shall—
‘‘(A) publish notice of applications received for grants
under this chapter for telemedicine or distance learning
projects; and
‘‘(B) make the applications available for inspection.
‘‘SEC. 2334. ADMINISTRATION.
‘‘(a) NONDUPLICATION.—The Secretary shall ensure that facili-
ties constructed using financial assistance provided under this chap-
ter do not duplicate adequate established telemedicine services
or distance learning services.
‘‘(b) LOAN MATURITY.—The maturities of cost of money loans
shall be determined by the Secretary, based on the useful life
of the facility being financed, except that the loan shall not be
for a period of more than 10 years.
‘‘(c) LOAN SECURITY
AND FEASIBILITY.—The Secretary shall
make a cost of money loan only if the Secretary determines that
the security for the loan is reasonably adequate and that the
loan will be repaid within the period of the loan.
‘‘(d) ENCOURAGING CONSORTIA.—The Secretary shall encourage
the development of consortia to provide telemedicine services or
distance learning services through telecommunications in rural
areas served by a telecommunications provider.
H. R. 2854—225
‘‘(e) COORDINATION WITH OTHER AGENCIES.—The Secretary
shall coordinate, to the extent practicable, with other Federal and
State agencies with similar grant or loan programs to pool resources
for funding meritorious proposals in rural areas.
‘‘(f) INFORMATIONAL EFFORTS.—The Secretary shall establish
and implement procedures to carry out informational efforts to
advise potential end users located in rural areas of each State
about the program authorized by this chapter.
‘‘SEC. 2335. REGULATIONS.
‘‘Not later than 180 days after the date of enactment of the
Federal Agriculture Improvement and Reform Act of 1996, the
Secretary shall issue regulations to carry out this chapter.
‘‘SEC. 2335A. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated to carry out this
chapter $100,000,000 for each of fiscal years 1996 through 2002.’’.
SEC. 705. LIMITATION ON AUTHORIZATION OF APPROPRIATIONS FOR
RURAL TECHNOLOGY GRANTS.
Section 2347 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 104 Stat. 4034) is amended—
(1) by striking ‘‘(a) IN GENERAL.—’’; and
(2) by striking subsection (b).
SEC. 706. DEMONSTRATION PROJECTS.
Section 2348 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 2662a) is repealed.
SEC. 707. MONITORING THE ECONOMIC PROGRESS OF RURAL AMER-
ICA.
Section 2382 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 13 U.S.C. 141 note) is repealed.
SEC. 708. ANALYSIS BY OFFICE OF TECHNOLOGY ASSESSMENT.
Section 2385 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 7 U.S.C. 950aaa–4 note) is
repealed.
SEC. 709. RURAL HEALTH INFRASTRUCTURE IMPROVEMENT.
Section 2391 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 7 U.S.C. 2662 note) is repealed.
SEC. 710. CENSUS OF AGRICULTURE.
Section 2392 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 104 Stat. 4057) is repealed.
SEC. 711. STUDY OF THE TRANSPORTATION OF FERTILIZER AND AGRI-
CULTURAL CHEMICALS TO FARMERS.
Section 2517 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (Public Law 101–624; 104 Stat. 4077) is repealed.
CHAPTER 2—ALTERNATIVE AGRICULTURAL RESEARCH
AND COMMERCIALIZATION
SEC. 721. DEFINITIONS.
Section 1657(c) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 5901(c)) is amended—
(1) by striking paragraphs (3) and (4);
H. R. 2854—226
(2) by redesignating paragraph (5) as paragraph (3);
(3) by redesignating paragraphs (6) through (12) as para-
graphs (7) through (13), respectively; and
(4) by inserting after paragraph (3) (as redesignated by
paragraph (2)) the following:
‘‘(4) CORPORATE BOARD.—The term ‘Corporate Board’ means
the Board of Directors of the Corporation described in section
1659.
‘‘(5) CORPORATION.—The term ‘Corporation’ means the
Alternative Agricultural Research and Commercialization Cor-
poration established under section 1658.
‘‘(6) EXECUTIVE DIRECTOR.—The term ‘Executive Director’
means the Executive Director of the Corporation appointed
under section 1659(e).’’.
SEC. 722. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMER-
CIALIZATION CORPORATION.
(a) IN GENERAL.—Section 1658 of the Food, Agriculture, Con-
servation, and Trade Act of 1990 (7 U.S.C. 5902) is amended to
read as follows:
‘‘SEC. 1658. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMER-
CIALIZATION CORPORATION.
‘‘(a) ESTABLISHMENT.—To carry out this subtitle, there is cre-
ated a body corporate to be known as the Alternative Agricultural
Research and Commercialization Corporation, which shall be an
agency of the United States, within the Department of Agriculture,
subject to the general supervision and direction of the Secretary,
except as specifically provided for in this subtitle.
‘‘(b) PURPOSE.—The purpose of the Corporation is to—
‘‘(1) expedite the development and market penetration of
industrial, nonfood, nonfeed products from agricultural and
forestry materials; and
‘‘(2) assist the private sector in bridging the gap between
the results of research into nonfood, nonfeed products and
the commercialization of the research.
‘‘(c) PLACE OF INCORPORATION.—The Corporation shall be incor-
porated in the District of Columbia.
‘‘(d) CENTRAL OFFICE.—The Secretary shall provide facilities
for the principal office of the Corporation within the Washington,
D.C., metropolitan area.
‘‘(e) WHOLLY-OWNED GOVERNMENT CORPORATION.—The Cor-
poration shall be considered a wholly-owned government corporation
in accordance with chapter 91 of title 31, United States Code.
‘‘(f) GENERAL POWERS.—In addition to any other powers granted
to the Corporation under this subtitle, the Corporation—
‘‘(1) shall have succession in its corporate name;
‘‘(2) may adopt, alter, and rescind any bylaw and adopt
and alter a corporate seal, which shall be judicially noticed;
‘‘(3) may enter into any agreement or contract with a
person or private or governmental agency, except that the
Corporation shall not provide any financial assistance unless
specifically authorized by this subtitle;
‘‘(4) may lease, purchase, accept a gift or donation of, or
otherwise acquire, use, own, hold, improve, or otherwise deal
in or with, and sell, convey, mortgage, pledge, lease, exchange,
or otherwise dispose of, any property or interest in property,
as the Corporation considers necessary in the transaction of
H. R. 2854—227
the business of the Corporation, except that this paragraph
shall not provide authority for carrying out a program of real
estate investment;
‘‘(5) may sue and be sued in the corporate name of the
Corporation, except that—
‘‘(A) no attachment, injunction, garnishment, or similar
process shall be issued against the Corporation or property
of the Corporation; and
‘‘(B) exclusive original jurisdiction shall reside in the
district courts of the United States, but the Corporation
may intervene in any court in any suit, action, or proceed-
ing in which the Corporation has an interest;
‘‘(6) may independently retain legal representation;
‘‘(7) may provide for and designate such committees, and
the functions of the committees, as the Corporate Board consid-
ers necessary or desirable;
‘‘(8) may indemnify the Executive Director and other offi-
cers of the Corporation, as the Corporate Board considers nec-
essary and desirable, except that the Executive Director and
officers shall not be indemnified for an act outside the scope
of employment;
‘‘(9) may, with the consent of any board, commission,
independent establishment, or executive department of the Fed-
eral Government, including any field service, use information,
services, facilities, officials, and employees in carrying out this
subtitle, and pay for the use, which payments shall be trans-
ferred to the applicable appropriation account that incurred
the expense;
‘‘(10) may obtain the services and fix the compensation
of any consultant and otherwise procure temporary and inter-
mittent services under section 3109(b) of title 5, United States
Code;
‘‘(11) may use the United States mails on the same terms
and conditions as the Executive agencies of the Federal Govern-
ment;
‘‘(12) shall have the rights, privileges, and immunities of
the United States with respect to the right to priority of pay-
ment with respect to debts due from bankrupt, insolvent, or
deceased creditors;
‘‘(13) may collect or compromise any obligations assigned
to or held by the Corporation, including any legal or equitable
rights accruing to the Corporation;
‘‘(14) shall determine the character of, and necessity for,
obligations and expenditures of the Corporation and the manner
in which the obligations and expenditures shall be incurred,
allowed, and paid, subject to provisions of law specifically
applicable to Government corporations;
‘‘(15) may make final and conclusive settlement and adjust-
ment of any claim by or against the Corporation or a fiscal
officer of the Corporation;
‘‘(16) may sell assets, loans, and equity interests acquired
in connection with the financing of projects funded by the
Corporation; and
‘‘(17) may exercise all other lawful powers necessarily or
reasonably related to the establishment of the Corporation to
carry out this subtitle and the powers, purposes, functions,
duties, and authorized activities of the Corporation.
H. R. 2854—228
‘‘(g) SPECIFIC POWERS.—To carry out this subtitle, the Corpora-
tion may—
‘‘(1) make grants to, and enter into cooperative agreements
and contracts with, eligible applicants for research, develop-
ment, and demonstration projects in accordance with section
1660;
‘‘(2) make loans and interest subsidy payments and invest
venture capital in accordance with section 1661;
‘‘(3) collect and disseminate information concerning State,
regional, and local commercialization projects;
‘‘(4) search for new nonfood, nonfeed products that may
be produced from agricultural commodities and for processes
to produce the products;
‘‘(5) administer, maintain, and dispense funds from the
Fund to facilitate the conduct of activities under this subtitle;
and
‘‘(6) engage in other activities incident to carrying out the
functions of the Corporation.’’.
(b) 
WHOLLY-OWNED
GOVERNMENT
CORPORATION.—Section
9101(3) of title 31, United States Code, is amended—
(1) by redesignating subparagraph (N) (relating to the Ura-
nium Enrichment Corporation) as subparagraph (O); and
(2) by adding at the end the following:
‘‘(Q) 
the 
Alternative 
Agricultural 
Research 
and
Commercialization Corporation.’’.
(c) CONFORMING AMENDMENT.—Section 211(b)(5) of the Depart-
ment of Agriculture Reorganization Act of 1994 (7 U.S.C. 6911(b)(5))
is amended by striking ‘‘Alternative Agricultural Research and
Commercialization Board’’ and inserting ‘‘Corporate Board of the
Alternative Agricultural Research and Commercialization Corpora-
tion’’.
SEC. 723. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES.
(a) IN GENERAL.—Section 1659 of the Food, Agriculture, Con-
servation, and Trade Act of 1990 (7 U.S.C. 5903) is amended to
read as follows:
‘‘SEC. 1659. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES.
‘‘(a) IN GENERAL.—The powers of the Corporation shall be
vested in a Corporate Board.
‘‘(b) MEMBERS
OF
THE CORPORATE BOARD.—The Corporate
Board shall consist of 11 members as follows:
‘‘(1) The Under Secretary of Agriculture for Rural Develop-
ment.
‘‘(2) The Under Secretary of Agriculture for Research, Edu-
cation, and Economics.
‘‘(3) 5 members appointed by the Secretary, of whom—
‘‘(A) at least 1 member shall be a representative of
the leading scientific disciplines relevant to the activities
of the Corporation;
‘‘(B) at least 1 member shall be a producer or processor
of agricultural commodities;
‘‘(C) at least 1 member shall be a person who is pri-
vately engaged in the commercialization of new nonfood,
nonfeed products from agricultural commodities; and
‘‘(D) at least 1 member shall have expertise in financial
management.
H. R. 2854—229
A different member shall be appointed pursuant to each
subparagraph of this paragraph.
‘‘(4) 2 members appointed by the Secretary who—
‘‘(A) have expertise in areas of applied research relating
to the development or commercialization of new nonfood,
nonfeed products; and
‘‘(B) shall be appointed from a group of at least 4
individuals nominated by the Director of the National
Science Foundation if the nominations are made not later
than 60 days after the date a vacancy occurs.
‘‘(5) 2 members appointed by the Secretary who—
‘‘(A) have expertise in financial and managerial mat-
ters; and
‘‘(B) shall be appointed from a group of at least 4
individuals nominated by the Secretary of Commerce if
the nominations are made not later than 60 days after
the date a vacancy occurs.
‘‘(c) RESPONSIBILITIES OF THE CORPORATE BOARD.—
‘‘(1) IN GENERAL.—The Corporate Board shall—
‘‘(A) be responsible for the general supervision of the
Corporation and Regional Centers established under sec-
tion 1663;
‘‘(B) determine (in consultation with Regional Centers)
high priority commercialization areas to receive assistance
under section 1663;
‘‘(C) review any grant, contract, or cooperative agree-
ment to be made or entered into by the Corporation under
section 1660 and any financial assistance to be provided
under section 1661;
‘‘(D) make the final decision, by majority vote, on
whether and how to provide assistance to an applicant;
and
‘‘(E) develop and establish a budget plan and a long-
term operating plan to carry out this subtitle.
‘‘(2) AUTHORITY OF THE SECRETARY.—
‘‘(A) IN
GENERAL.—The Secretary shall vacate and
remand to the Corporate Board for reconsideration any
decision made pursuant to paragraph (1)(D) if the Secretary
determines that there has been a violation of subsection
(j), or any conflict of interest provisions of the bylaws
of the Corporate Board, with respect to the decision.
‘‘(B) REASONS.—In the case of any violation and referral
of a funding decision to the Corporate Board, the Secretary
shall inform the Corporate Board of the reasons for any
remand pursuant to subparagraph (A).
‘‘(d) CHAIRPERSON.—The members of the Corporate Board shall
select a Chairperson from among the members of the Corporate
Board. The term of office of the Chairperson shall be 2 years.
The members referred to in paragraphs (1) and (2) of subsection
(b) may not serve as Chairperson.
‘‘(e) EXECUTIVE DIRECTOR.—
‘‘(1) APPOINTMENT.—The Corporate Board shall appoint an
Executive Director, subject to the approval of the Secretary.
‘‘(2) DUTIES.—The Executive Director shall be the chief
executive officer of the Corporation, with such power and
authority as may be conferred by the Corporate Board.
H. R. 2854—230
‘‘(3) COMPENSATION.—The Executive Director shall receive
basic pay at the rate provided for level IV of the Executive
Schedule under section 5315 of title 5, United States Code.
‘‘(f) OFFICERS.—The Corporate Board shall establish the offices
and appoint the officers of the Corporation, including a Secretary,
and define the duties of the officers in a manner consistent with
this subtitle.
‘‘(g) MEETINGS.—The Corporate Board shall meet at least 3
times each fiscal year at the call of the Chairperson or at the
request of the Executive Director. The location of the meetings
shall be subject to approval of the Executive Director. A quorum
of the Corporate Board shall consist of a majority of the members.
The decisions of the Corporate Board shall be made by majority
vote.
‘‘(h) TERM; VACANCIES.—
‘‘(1) IN GENERAL.—The term of office of a member of the
Corporate Board shall be 4 years, except that the members
initially appointed shall be appointed to serve staggered terms.
A member appointed to fill a vacancy for an unexpired term
may be appointed only for the remainder of the term. A vacancy
on the Corporate Board shall be filled in the same manner
as the original appointment. The Secretary may remove a mem-
ber of the Corporate Board only for cause.
‘‘(2) TRANSITION MEASURE.—The Secretary may appoint to
the Corporate Board an individual who, on the day before
the date of enactment of the Federal Agriculture Improvement
and Reform Act of 1996, was serving on the former Alternative
Agricultural Research and Commercialization Board, for a term
that does not exceed the term for which the individual was
appointed to the former Board.
‘‘(i) COMPENSATION.—A member of the Corporate Board who
is an officer or employee of the United States shall not receive
any additional compensation by reason of service on the Corporate
Board. Any other member shall receive, for each day (including
travel time) the member is engaged in the performance of the
functions of the Corporate Board, compensation at a rate not to
exceed the daily equivalent of the annual rate in effect for Level
IV of the Executive Schedule. A member of the Corporate Board
shall be reimbursed for travel, subsistence, and other necessary
expenses incurred by the member in the performance of the duties
of the member.
‘‘(j) CONFLICT OF INTEREST; FINANCIAL DISCLOSURE.—
‘‘(1) CONFLICT OF INTEREST.—Except as provided in para-
graph (3), no member of the Corporate Board shall vote on
any matter respecting any application, contract, claim, or other
particular matter pending before the Corporation, in which,
to the knowledge of the member, the member, spouse, or child
of the member, partner, or organization in which the member
is serving as officer, director, trustee, partner, or employee,
or any person or organization with whom the member is nego-
tiating or has any arrangement concerning prospective employ-
ment, has a financial interest.
‘‘(2) VIOLATIONS.—Violation of paragraph (1) by a member
of the Corporate Board shall be cause for removal of the mem-
ber, but shall not impair or otherwise affect the validity of
any otherwise lawful action by the Corporation in which the
member participated.
H. R. 2854—231
‘‘(3) EXCEPTIONS.—The prohibitions contained in paragraph
(1) shall not apply if a member of the Corporate Board advises
the Corporate Board of the nature of the particular matter
in which the member proposes to participate, and if the member
makes a full disclosure of the financial interest, prior to any
participation, and the Corporate Board determines, by majority
vote, that the financial interest is too remote or too incon-
sequential to affect the integrity of the member’s services to
the Corporation in that matter. The member involved shall
not vote on the determination.
‘‘(4) FINANCIAL
DISCLOSURE.—A Board member shall be
subject to the financial disclosure requirements set forth in
subchapter B of chapter XVI of title 5, Code of Federal Regula-
tions (or any corresponding or similar regulation or ruling),
applicable to a special Government employee (as defined in
section 202(a) of title 18, United States Code).
‘‘(k) DELEGATION OF AUTHORITY.—
‘‘(1) IN GENERAL.—The Corporate Board may, by resolution,
delegate to the Chairperson, the Executive Director, or any
other officer or employee any function, power, or duty assigned
to the Corporation under this subtitle, other than a function,
power, or duty expressly vested in the Corporate Board by
subsections (c) through (n).
‘‘(2) PROHIBITION
ON
DELEGATION.—Notwithstanding any
other law, the Secretary and any other officer or employee
of the United States shall not make any delegation to the
Corporate Board, the Chairperson, the Executive Director, or
the Corporation of any power, function, or authority not
expressly authorized by this subtitle, unless the delegation
is made pursuant to an authority in law that expressly makes
reference to this section.
‘‘(3) REORGANIZATION ACT.—Notwithstanding any other law,
the President (through authorities provided under chapter 9
of title 5, United States Code) may not authorize the transfer
to the Corporation of any power, function, or authority in
addition to powers, functions, and authorities provided by law.
‘‘(l) BYLAWS.—Notwithstanding section 1658(f)(2), the Corporate
Board shall adopt, and may from time to time amend, any bylaw
that is necessary for the proper management and functioning of
the Corporation. The Corporate Board shall not adopt any bylaw
that has not been reviewed and approved by the Secretary.
‘‘(m) ORGANIZATION.—The Corporate Board shall provide a sys-
tem of organization to fix responsibility and promote efficiency.
‘‘(n) PERSONNEL AND FACILITIES OF CORPORATION.—
‘‘(1) APPOINTMENT
AND
COMPENSATION
OF
PERSONNEL.—
The Corporation may select and appoint officers, attorneys,
employees, and agents, who shall be vested with such powers
and duties as the Corporation may determine.
‘‘(2) USE OF FACILITIES AND SERVICES OF THE DEPARTMENT
OF AGRICULTURE.—Notwithstanding any other provision of law,
to perform the responsibilities of the Corporation under this
subtitle, the Corporation may partially or jointly utilize the
facilities of and the services of employees of the Department
of Agriculture, without cost to the Corporation.
‘‘(3) GOVERNMENT
EMPLOYMENT
LAWS.—An officer or
employee of the Corporation shall be subject to all laws of
the United States relating to governmental employment.’’.
H. R. 2854—232
(b) CONFORMING AMENDMENT.—Section 5315 of title 5, United
States Code, is amended by adding at the end the following:
‘‘Executive 
Director 
of 
the 
Alternative 
Agricultural
Research and Commercialization Corporation.’’.
SEC. 724. RESEARCH AND DEVELOPMENT GRANTS, CONTRACTS, AND
AGREEMENTS.
Section 1660 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5904) is amended—
(1) by striking ‘‘Center’’ each place it appears and inserting
‘‘Corporation’’;
(2) in subsection (c), by striking ‘‘Board’’ and inserting
‘‘Corporate Board’’; and
(3) in subsection (f), by striking ‘‘non-Center’’ and inserting
‘‘non-Corporation’’.
SEC. 725. COMMERCIALIZATION ASSISTANCE.
Section 1661 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5905) is amended—
(1) by striking ‘‘Center’’ each place it appears and inserting
‘‘Corporation’’;
(2) by striking ‘‘Board’’ each place it appears and inserting
‘‘Corporate Board’’;
(3) by striking subsection (c);
(4) by redesignating subsections (d), (e), and (f) as sub-
sections (c), (d), and (e), respectively; and
(5) in subsection (c) (as so redesignated)—
(A) in the subsection heading of paragraph (1), by
striking ‘‘DIRECTOR’’ and inserting ‘‘EXECUTIVE DIRECTOR’’;
and
(B) by striking ‘‘Director’’ each place it appears and
inserting ‘‘Executive Director’’.
SEC. 726. GENERAL RULES REGARDING THE PROVISION OF ASSIST-
ANCE.
Section 1662 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5906) is amended—
(1) by striking ‘‘Center’’ each place it appears (except in
subsection (b)) and inserting ‘‘Corporation’’;
(2) by striking ‘‘Board’’ each place it appears and inserting
‘‘Corporate Board’’; and
(3) in subsection (b)—
(A) in the second sentence, by striking ‘‘Board, a
Regional Center, or the Advisory Council’’ and inserting
‘‘Board or a Regional Center’’; and
(B) by striking the third sentence.
SEC. 727. REGIONAL CENTERS.
Section 1663 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5907) is amended—
(1) by striking ‘‘Board’’ each place it appears and inserting
‘‘Corporate Board’’;
(2) in subsection (e)(8), by striking ‘‘Center’’ and inserting
‘‘Corporation’’; and
(3) in subsection (f)—
(A) in paragraph (2), by striking ‘‘in consultation with
the Advisory Council appointed under section 1661(c)’’; and
H. R. 2854—233
(B) by striking paragraphs (3) and (4) and inserting
the following:
‘‘(3) RECOMMENDATION.—The Regional Director, based on
the comments of the reviewers, shall make and submit a rec-
ommendation to the Board, which shall not be binding on
the Board.’’.
SEC. 728. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMER-
CIALIZATION REVOLVING FUND.
Section 1664 of the Food, Agriculture, Conservation, and Trade
Act of 1990 (7 U.S.C. 5908) is amended to read as follows:
‘‘SEC. 1664. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMER-
CIALIZATION REVOLVING FUND.
‘‘(a) ESTABLISHMENT.—There is established in the Treasury of
the United States a revolving fund to be known as the Alternative
Agricultural Research and Commercialization Revolving Fund. The
Fund shall be available to the Corporation, without fiscal year
limitation, to carry out this subtitle.
‘‘(b) CONTENTS
OF FUND.—There shall be deposited in the
Fund—
‘‘(1) such amounts as may be appropriated or transferred
to support programs and activities of the Corporation;
‘‘(2) payments received from any source for products, serv-
ices, or property furnished in connection with the activities
of the Corporation;
‘‘(3) fees and royalties collected by the Corporation from
licensing or other arrangements relating to commercialization
of products developed through projects funded in whole or part
by grants, contracts, or cooperative agreements executed by
the Corporation;
‘‘(4) proceeds from the sale of assets, loans, and equity
interests made in furtherance of the purposes of the Corpora-
tion;
‘‘(5) donations or contributions accepted by the Corporation
to support authorized programs and activities; and
‘‘(6) any other funds acquired by the Corporation.
‘‘(c) FUNDING ALLOCATIONS.—Funding of projects and activities
under this subtitle shall be subject to the following restrictions:
‘‘(1) Of the total amount of funds made available for a
fiscal year under this subtitle—
‘‘(A) not more than the lesser of 15 percent or
$3,000,000 may be set aside to be used for authorized
administrative expenses of the Corporation;
‘‘(B) not more than 1 percent may be set aside to
be used for generic studies and specific reviews of individ-
ual proposals for financial assistance; and
‘‘(C) except as provided in subsection (e), not less than
84 percent shall be set aside to be awarded to qualified
applicants who file project applications with, or respond
to requests for proposals from, the Corporation under sec-
tions 1660 and 1661.
‘‘(2) Any funds remaining uncommitted at the end of a
fiscal year shall be credited to the Fund and added to the
total program funds available to the Corporation for the next
fiscal year.
‘‘(d) AUTHORIZED ADMINISTRATIVE EXPENSES.—For the purposes
of this section, authorized administrative expenses shall include
H. R. 2854—234
all ordinary and necessary expenses, including all compensation
for personnel and consultants, expenses for computer usage, or
space needs of the Corporation and similar expenses. Funds author-
ized for administrative expenses shall not be available for the
acquisition of real property.
‘‘(e) PROJECT MONITORING.—The Corporate Board may estab-
lish, in the bylaws of the Corporate Board, that a percentage
(which shall not exceed 1 percent) of the funds provided under
subsection (c) for any commercialization project shall be expended
to ensure that project funds are being utilized in accordance with
the project agreement.
‘‘(f) TERMINATION OF THE FUND.—On expiration of the authority
provided by this subtitle, all assets (after payment of all outstanding
obligations) of the Fund shall revert to the general fund of the
Treasury.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS; CAPITALIZATION.—
‘‘(1) AUTHORIZATION OF APPROPRIATION.—There are author-
ized to be appropriated to the Fund $75,000,000 for each of
fiscal years 1996 through 2002.
‘‘(2) CAPITALIZATION.—The Executive Director may pay in
as capital of the Corporation, out of dollar receipts made avail-
able through annual appropriations, $75,000,000 for each of
fiscal years 1996 through 2002. On the payment of an amount
of capital by the Executive Director, the Corporation shall
issue an equivalent amount of capital stock to the Secretary
of the Treasury.
‘‘(3) TRANSFER.—All obligations, assets, and related rights
and responsibilities of the former Alternative Agricultural
Research and Commercialization Center established under
former section 1658 of this Act (as in effect on the day before
the date of enactment of the Federal Agriculture Improvement
and Reform Act of 1996) are transferred to the Corporation.’’.
SEC. 729. PROCUREMENT PREFERENCES FOR PRODUCTS RECEIVING
CORPORATION ASSISTANCE.
Subtitle G of title XVI of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 5901 et seq.) is amended by
adding at the end the following:
‘‘SEC. 
1665. 
PROCUREMENT 
OF 
ALTERNATIVE 
AGRICULTURAL
RESEARCH AND COMMERCIALIZATION PRODUCTS.
‘‘(a) DEFINITION OF EXECUTIVE AGENCY.—In this section, the
term ‘executive agency’ has the meaning provided the term in
section 4(1) of the Office of Federal Procurement Policy Act (41
U.S.C. 403(1)).
‘‘(b) PROCUREMENT.—To further the achievement of the pur-
poses specified in section 1657(b), an executive agency may, for
any procurement involving the acquisition of property, establish
set-asides and preferences for property that has been commer-
cialized with assistance provided under this subtitle.
‘‘(c) SET-ASIDES.—Procurements solely for property may be set
aside exclusively for products developed with commercialization
assistance provided under section 1661.
‘‘(d) PREFERENCES.—Preferences for property developed with
assistance provided under this subtitle in procurements involving
the acquisition of property may be—
‘‘(1) a price preference, if the procurement is solely for
property, of not greater than a percentage to be determined
H. R. 2854—235
within the sole discretion of the head of the procuring agency;
or
‘‘(2) a technical evaluation preference included as an award
factor or subfactor as determined within the sole discretion
of the head of the procuring agency.
‘‘(e) NOTICE.—Each competitive solicitation or invitation for
bids selected by an executive agency for a set-aside or preference
under this section shall contain a provision notifying offerors where
a list of products eligible for the set-aside or preference may be
obtained.
‘‘(f) ELIGIBILITY.—Offerors shall receive the set-aside or pref-
erence required under this section if, in the case of products devel-
oped with financial assistance under—
‘‘(1) section 1660, less than 10 years have elapsed since
the expiration of the grant, cooperative agreement, or contract;
‘‘(2) paragraph (1) or (2) of section 1661(a), less than 5
years have elapsed since the date the loan was made or insured;
‘‘(3) section 1661(a)(3), less than 5 years have elapsed since
the date of sale of any remaining government equity interest
in the company; or
‘‘(4) section 1661(a)(4), less than 5 years have elapsed since
the date of the final payment on the repayable grant.’’.
SEC. 730. BUSINESS PLAN AND FEASIBILITY STUDY AND REPORT.
(a) BUSINESS PLAN.—Not later than 180 days after the date
of enactment of this Act, the Alternative Agricultural Research
and Commercialization Corporation established by section 1658 of
the Food, Agriculture, Conservation, and Trade Act of 1990 shall—
(1) develop a 5-year business plan pursuant to section
1659(c)(1)(E) of the Act; and
(2) submit the plan to the Secretary of Agriculture, the
Committee on Agriculture of the House of Representatives,
and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
(b) FEASIBILITY STUDY AND REPORT.—
(1) STUDY.—The Secretary of Agriculture shall conduct a
study of, and prepare a report on, the continued feasibility
of the Alternative Agricultural Research and Commercialization
Corporation. In conducting the study, the Secretary shall exam-
ine options for privatizing the Corporation and converting the
Corporation to a Government-sponsored enterprise.
(2) REPORT.—Not later than December 31, 2001, the Sec-
retary shall transmit the report required by paragraph (1)
to the Committee on Agriculture of the House of Representa-
tives and the Committee on Agriculture, Nutrition, and Forestry
of the Senate.
Subtitle B—Amendments to the Consoli-
dated Farm and Rural Development Act
CHAPTER 1—GENERAL PROVISIONS
SEC. 741. WATER AND WASTE FACILITY LOANS AND GRANTS.
(a) IN GENERAL.—Section 306(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926(a)) is amended—
H. R. 2854—236
(1) in the first sentence of paragraph (2), by striking
‘‘$500,000,000’’ and inserting ‘‘$590,000,000’’;
(2) by striking paragraph (7) and inserting the following:
‘‘(7) DEFINITION OF RURAL AND RURAL AREAS.—For the pur-
pose of water and waste disposal grants and direct and guaran-
teed loans provided under paragraphs (1) and (2), the terms
‘rural’ and ‘rural area’ mean a city, town, or unincorporated
area that has a population of no more than 10,000 inhabitants.’’;
(3) by striking paragraphs (9), (10), and (11) and inserting
the following:
‘‘(9) CONFORMITY
WITH
STATE
DRINKING
WATER
STAND-
ARDS.—No Federal funds shall be made available under this
section for a water system unless the Secretary determines
that the water system will make significant progress toward
meeting the standards established under title XIV of the Public
Health Service Act (commonly known as the ‘Safe Drinking
Water Act’) (42 U.S.C. 300f et seq.).
‘‘(10) CONFORMITY WITH FEDERAL AND STATE WATER POLLU-
TION CONTROL STANDARDS.—No Federal funds shall be made
available under this section for a water treatment discharge
or waste disposal system unless the Secretary determines that
the effluent from the system conforms with applicable Federal
and State water pollution control standards.
‘‘(11) RURAL BUSINESS OPPORTUNITY GRANTS.—
‘‘(A) IN GENERAL.—The Secretary may make grants,
not to exceed $1,500,000 annually, to public bodies, private
nonprofit community development corporations or entities,
or such other agencies as the Secretary may select to
enable the recipients—
‘‘(i) to identify and analyze business opportunities,
including opportunities in export markets, that will
use local rural economic and human resources;
‘‘(ii) to identify, train, and provide technical assist-
ance to existing or prospective rural entrepreneurs and
managers;
‘‘(iii) to establish business support centers and
otherwise assist in the creation of new rural
businesses, the development of methods of financing
local businesses, and the enhancement of the capacity
of local individuals and entities to engage in sound
economic activities;
‘‘(iv) to conduct regional, community, and local eco-
nomic development planning and coordination, and
leadership development; and
‘‘(v) to establish centers for training, technology,
and trade that will provide training to rural businesses
in the utilization of interactive communications tech-
nologies to develop international trade opportunities
and markets.
‘‘(B) CRITERIA.—In awarding the grants, the Secretary
shall consider, among other criteria to be established by
the Secretary—
‘‘(i) the extent to which the applicant provides
development services in the rural service area of the
applicant; and
H. R. 2854—237
‘‘(ii) the capability of the applicant to accomplish
the activities described in the relevant clauses of
subparagraph (A).
‘‘(C) COORDINATION.—The Secretary shall ensure, to
the maximum extent practicable, that assistance provided
under this paragraph is coordinated with and delivered
in cooperation with similar services or assistance provided
to rural residents by the Cooperative State Research, Edu-
cation, and Extension Service or other Federal agencies.
‘‘(D) AUTHORIZATION
OF
APPROPRIATIONS.—There are
authorized to be appropriated to carry out this paragraph
$7,500,000 for each of fiscal years 1996 through 2002.’’;
(4) by striking paragraphs (14) and (15);
(5) by redesignating paragraphs (16) through (20) as para-
graphs (14) through (18), respectively; and
(6) in paragraph (14) (as so redesignated)—
(A) by striking ‘‘(14)(A) The’’ and inserting the follow-
ing:
‘‘(14) RURAL WATER AND WASTEWATER TECHNICAL ASSIST-
ANCE AND TRAINING PROGRAMS.—
‘‘(A) IN GENERAL.—The’’;
(B) in subparagraph (A)—
(i) by striking ‘‘(i) identify’’ and inserting the follow-
ing:
‘‘(i) identify’’;
(ii) by striking ‘‘(ii) prepare’’ and inserting the
following:
‘‘(ii) prepare’’; and
(iii) by striking ‘‘(iii) improve’’ and inserting the
following:
‘‘(iii) improve’’;
(C) in subparagraph (B), by striking ‘‘(B) In’’ and insert-
ing the following:
‘‘(B) SELECTION PRIORITY.—In’’; and
(D) in subparagraph (C)—
(i) by striking ‘‘(C) Not’’ and inserting the following:
‘‘(C) FUNDING.—Not’’; and
(ii) by striking ‘‘2 per centum of any funds provided
in appropriations Acts’’ and inserting ‘‘3 percent of
any funds appropriated’’.
(b) CONFORMING AMENDMENT.—The second sentence of section
309A(a) of the Consolidated Farm and Rural Development Act
(7 U.S.C. 1929a(a)) (as amended by section 661(c)(1)) is amended
by striking ‘‘, 306(a)(14),’’.
SEC. 742. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PRO-
GRAM FOR SMALL COMMUNITIES.
Section 306A of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1926a) is amended—
(1) in subsection (e)—
(A) in paragraph (1)(A), by striking ‘‘15,000’’ and insert-
ing ‘‘10,000’’; and
(B) in paragraph (2), by striking ‘‘5,000’’ and inserting
‘‘3,000’’; and
(2) by striking subsection (i) and inserting the following:
H. R. 2854—239
undergoing adjustment from terminated Federal agricultural
price and income support programs or increased competition
from foreign trade.’’;
(4) by striking subsection (e) and inserting the following:
‘‘(e) RURAL COOPERATIVE DEVELOPMENT GRANTS.—
‘‘(1) DEFINITIONS.—In this subsection:
‘‘(A) NONPROFIT
INSTITUTION.—The term ‘nonprofit
institution’ means any organization or institution, including
an accredited institution of higher education, no part of
the net earnings of which inures, or may lawfully inure,
to the benefit of any private shareholder or individual.
‘‘(B) UNITED STATES.—The term ‘United States’ means
the several States, the District of Columbia, the Common-
wealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the other territories and possessions of the
United States.
‘‘(2) GRANTS.—The Secretary shall make grants under this
subsection to nonprofit institutions for the purpose of enabling
the institutions to establish and operate centers for rural
cooperative development.
‘‘(3) GOALS.—The goals of a center funded under this sub-
section shall be to facilitate the creation of jobs in rural areas
through the development of new rural cooperatives, value added
processing, and rural businesses.
‘‘(4) APPLICATION.—Any nonprofit institution seeking a
grant under paragraph (2) shall submit to the Secretary an
application containing a plan for the establishment and oper-
ation by the institution of a center or centers for cooperative
development. The Secretary may approve the application if
the plan contains the following:
‘‘(A) A provision that substantiates that the center
will effectively serve rural areas in the United States.
‘‘(B) A provision that the primary objective of the center
will be to improve the economic condition of rural areas
through cooperative development.
‘‘(C) A description of the activities that the center
will carry out to accomplish the objective. The activities
may include the following:
‘‘(i) Programs for applied research and feasibility
studies that may be useful to individuals, cooperatives,
small businesses, and other similar entities in rural
areas served by the center.
‘‘(ii) Programs for the collection, interpretation, and
dissemination of information that may be useful to
individuals, cooperatives, small businesses, and other
similar entities in rural areas served by the center.
‘‘(iii) Programs providing training and instruction
for individuals, cooperatives, small businesses, and
other similar entities in rural areas served by the
center.
‘‘(iv) Programs providing loans and grants to
individuals, cooperatives, small businesses, and other
similar entities in rural areas served by the center.
‘‘(v) Programs providing technical assistance,
research services, and advisory services to individuals,
cooperatives, small businesses, and other similar enti-
ties in rural areas served by the center.
H. R. 2854—240
‘‘(vi) Programs providing for the coordination of
services and sharing of information among the center.
‘‘(D) A description of the contributions that the activi-
ties are likely to make to the improvement of the economic
conditions of the rural areas for which the center will
provide services.
‘‘(E) Provisions that the center, in carrying out the
activities, will seek, where appropriate, the advice, partici-
pation, expertise, and assistance of representatives of busi-
ness, industry, educational institutions, the Federal
Government, and State and local governments.
‘‘(F) Provisions that the center will take all practicable
steps to develop continuing sources of financial support
for the center, particularly from sources in the private
sector.
‘‘(G) Provisions for—
‘‘(i) monitoring and evaluating the activities by
the nonprofit institution operating the center; and
‘‘(ii) accounting for money received by the institu-
tion under this section.
‘‘(5) AWARDING
GRANTS.—Grants made under paragraph
(2) shall be made on a competitive basis. In making grants
under paragraph (2), the Secretary shall give preference to
grant applications providing for the establishment of centers
for rural cooperative development that—
‘‘(A) demonstrate a proven track record in administer-
ing a nationally coordinated, regionally or State-wide oper-
ated project;
‘‘(B) demonstrate previous expertise in providing tech-
nical assistance in rural areas;
‘‘(C) demonstrate the ability to assist in the retention
of businesses, facilitate the establishment of cooperatives
and new cooperative approaches, and generate employment
opportunities that will improve the economic conditions
of rural areas;
‘‘(D) demonstrate the ability to create horizontal link-
ages among businesses within and among various sectors
in rural areas of the United States and vertical linkages
to domestic and international markets;
‘‘(E) commit to providing technical assistance and other
services to underserved and economically distressed areas
in rural areas of the United States; and
‘‘(F) commit to providing greater than a 25 percent
matching contribution with private funds and in-kind con-
tributions.
‘‘(6) 1-YEAR GRANTS; AUTHORITY TO APPROVE GRANT FOR
1 ADDITIONAL YEAR WITHOUT APPLICATION.—The Secretary shall
make grants under this subsection for a period of 1 year.
The Secretary shall evaluate programs receiving assistance
under this subsection. If the Secretary determines it to be
in the best interest of the program, the Secretary may award
an additional grant to the program for the immediately succeed-
ing year without application for the grant.
‘‘(7) 
TECHNICAL
ASSISTANCE
TO
PREVENT
EXCESSIVE
UNEMPLOYMENT OR UNDEREMPLOYMENT.—In carrying out this
subsection, the Secretary may provide technical assistance to
alleviate or prevent conditions of excessive unemployment,
H. R. 2854—241
underemployment, outmigration, or low employment growth
in economically distressed rural areas that the Secretary deter-
mines have a substantial need for the assistance. The assistance
may include planning and feasibility studies, management and
operational assistance, and studies evaluating the need for
development potential of projects that increase employment
and improve economic growth in the areas.
‘‘(8) GRANTS TO DEFRAY ADMINISTRATIVE COSTS.—The Sec-
retary may make grants to defray not to exceed 75 percent
of the costs incurred by organizations and public bodies to
carry out projects for which grants or loans are made under
this subsection. For purposes of determining the non-Federal
share of the costs, the Secretary shall consider contributions
in cash and in kind, fairly evaluated, including premises, equip-
ment, and services.
‘‘(9) 
AUTHORIZATION
OF
APPROPRIATIONS.—There 
are
authorized to be appropriated to carry out this subsection
$50,000,000 for each of fiscal years 1996 through 2002.’’;
(5) by striking subsections (f), (g), (h), and (i);
(6) by redesignating subsection (j) as subsection (f); and
(7) by adding at the end the following:
‘‘(g) LOAN GUARANTEES FOR THE PURCHASE OF COOPERATIVE
STOCK.—
‘‘(1) DEFINITION OF FARMER.—In this subsection, the term
‘farmer’ means any farmer that the Secretary determines is
a family farmer.
‘‘(2) LOAN
GUARANTEES.—The Secretary may guarantee
loans under this section to individual farmers for the purpose
of purchasing start-up capital stock of a farmer cooperative
established for the purpose of processing an agricultural
commodity.
‘‘(3) ELIGIBILITY.—To be eligible for a loan guarantee under
this subsection, a farmer must produce the agricultural
commodity that will be processed by the cooperative.’’.
(b) CONFORMING AMENDMENTS.—
(1) Clause (iii) of section 307(a)(6)(B) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1927(a)(6)(B)) (as
redesignated by section 661(a)(2)) is amended by striking ‘‘sub-
sections (d) and (e) of section 310B’’ and inserting ‘‘section
310B(d)’’.
(2) Section 232(c)(2) of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6942(c)(2)) is amended—
(A) by striking ‘‘310B(b)(2)’’ and inserting ‘‘310B(b)’’;
and
(B) by striking ‘‘1932(b)(2)’’ and inserting ‘‘1932(b)’’.
(3) Section 233(b) of the Department of Agriculture Reorga-
nization Act of 1994 (7 U.S.C. 6943(b)) is amended—
(A) by striking paragraph (2); and
(B) by redesignating paragraph (3) as paragraph (2).
SEC. 748. ADMINISTRATION.
Section 331(b)(4) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1981(b)(4)) is amended—
(1) by inserting after ‘‘claims’’ the following: ‘‘(including
debts and claims arising from loan guarantees)’’;
(2) by striking ‘‘Farmers Home Administration or’’ and
inserting ‘‘Consolidated Farm Service Agency, Rural Utilities
H. R. 2854—242
Service, Rural Housing Service, Rural Business-Cooperative
Service, or a successor agency, or’’; and
(3) by inserting after ‘‘activities under the Housing Act
of 1949.’’ the following: ‘‘In the case of a security instrument
entered into under the Rural Electrification Act of 1936 (7
U.S.C. 901 et seq.), the Secretary shall notify the Attorney
General of the intent of the Secretary to exercise the authority
of the Secretary under this paragraph.’’.
SEC. 749. AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—Section 338 of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1988) is amended—
(1) by striking subsections (b), (c), (d), and (e); and
(2) by redesignating subsection (f) as subsection (b).
(b) CONFORMING AMENDMENTS.—
(1) The first sentence of section 309(g)(1) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 1929(g)(1))
is amended by inserting after ‘‘section 338(c)’’ the following:
‘‘(before the amendment made by section 749(a)(1) of the Fed-
eral Agriculture Improvement and Reform Act of 1996)’’.
(2) Section 343(b) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1991(b)) is amended by striking
‘‘338(f),’’ and inserting ‘‘338(b),’’.
SEC. 750. TESTIMONY BEFORE CONGRESSIONAL COMMITTEES.
Section 345 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1993) is repealed.
SEC. 751. PROHIBITION ON USE OF LOANS FOR CERTAIN PURPOSES.
Section 363 of the Consolidated Farm and Rural Development
Act (7 U.S.C. 2006e) is amended by adding at the end the following:
‘‘This section shall not apply to a loan made or guaranteed under
this title for a utility line.’’.
SEC. 752. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM.
The Consolidated Farm and Rural Development Act is amended
by inserting after section 363 (7 U.S.C. 2006e) the following:
‘‘SEC. 364. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM.
‘‘(a) CERTIFIED LENDERS PROGRAM.—
‘‘(1) IN GENERAL.—The Secretary may establish a program
under which the Secretary may guarantee a loan for any rural
development program that is made by a lender certified by
the Secretary.
‘‘(2) CERTIFICATION
REQUIREMENTS.—The Secretary may
certify a lender if the lender meets such criteria as the Sec-
retary may prescribe in regulations, including the ability of
the lender to properly make, service, and liquidate the guaran-
teed loans of the lender.
‘‘(3) CONDITION OF CERTIFICATION.—As a condition of certifi-
cation, the Secretary may require the lender to undertake to
service the guaranteed loan using standards that are not less
stringent than generally accepted banking standards concerning
loan servicing that are used by prudent commercial or coopera-
tive lenders.
‘‘(4) GUARANTEE.—Notwithstanding any other provision of
law, the Secretary may guarantee not more than 80 percent
of a loan made by a certified lender described in paragraph