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(iv) an assessment of the impact of
each fellow on the community.
(g) TRUST FUND.—
(1) ESTABLISHMENT.—There is established in
the Treasury of the United States a fund to be known
as the ‘‘Congressional Hunger Fellows Trust Fund’’,
consisting of—
(A) amounts appropriated to the Fund
under subsection (k);
(B) any amounts earned on investment of
amounts in the Fund under paragraph (2); and
(C) amounts received under subsection
(i)(3)(A).
(2) INVESTMENT OF AMOUNTS.—
(A) IN GENERAL.—
(i) AUTHORITY TO INVEST.—The Sec-
retary of the Treasury shall invest such por-
tion of the Fund as is not, in the judgment
of the Secretary of the Treasury, required to
meet current withdrawals.
(ii) TYPES
OF
INVESTMENTS.—Each
investment may be made only in an inter-
est-bearing obligation of the United States
or an obligation guaranteed as to principal
and interest by the United States that, as
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determined by the Secretary of the Treasury
in consultation with the Board, has a matu-
rity suitable for the Fund.
(B) ACQUISITION
OF
OBLIGATIONS.—For
the purpose of investments under subparagraph
(A), obligations may be acquired—
(i) on original issue at the issue price;
or
(ii) by purchase of outstanding obliga-
tions at the market price.
(C) SALE OF OBLIGATIONS.—Any obligation
acquired by the Fund may be sold by the Sec-
retary of the Treasury at the market price.
(D) CREDITS TO FUND.—The interest on,
and the proceeds from the sale or redemption of,
any obligations held in the Fund shall be cred-
ited to and form a part of the Fund.
(3) TRANSFERS OF AMOUNTS.—
(A) IN GENERAL.—The amounts required to
be transferred to the Fund under this subsection
shall be transferred at least monthly from the
general fund of the Treasury to the Fund on the
basis of estimates made by the Secretary of the
Treasury.
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(B) 
ADJUSTMENTS.—Proper 
adjustment
shall be made in amounts subsequently trans-
ferred to the extent prior estimates were in excess
of or less than the amounts required to be trans-
ferred.
(h) EXPENDITURES; AUDITS.—
(1) IN GENERAL.—The Secretary of the Treasury
shall transfer to the Program from the amounts de-
scribed in subsections (g)(2)(D) and (i)(3)(A) such
sums as the Board determines to be necessary to en-
able the Program to carry out this section.
(2) LIMITATION.—The Secretary may not trans-
fer to the Program the amounts appropriated to the
Fund under subsection (k).
(3) USE OF FUNDS.—Funds transferred to the
Program under paragraph (1) shall be used—
(A) to provide a living allowance for the fel-
lows;
(B) to defray the costs of transportation of
the fellows to the fellowship placement sites;
(C) to defray the costs of appropriate insur-
ance of the fellows, the Program, and the Board;
(D) to defray the costs of preservice and
midservice education and training of fellows;
(E) to pay staff described in subsection (i);
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(F) to make end-of-service awards under
subsection (f)(3)(D)(iii)(II); and
(G) for such other purposes as the Board de-
termines to be appropriate to carry out the Pro-
gram.
(4) AUDIT BY COMPTROLLER GENERAL.—
(A) IN GENERAL.—The Comptroller General
of the United States shall conduct an annual
audit of the accounts of the Program.
(B) BOOKS.—The Program shall make
available to the Comptroller General all books,
accounts, financial records, reports, files, and
other papers, things, or property belonging to or
in use by the Program and necessary to facilitate
the audit.
(C) REPORT
TO
CONGRESS.—The Comp-
troller General shall submit to the appropriate
congressional committees a copy of the results of
each audit under subparagraph (A).
(i) STAFF; POWERS OF PROGRAM.—
(1) EXECUTIVE DIRECTOR.—
(A) IN GENERAL.—The Board shall appoint
an Executive Director of the Program who
shall—
(i) administer the Program; and
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(ii) carry out such other functions con-
sistent with this section as the Board shall
prescribe.
(B) RESTRICTION.—The Executive Director
may not serve as Chairperson of the Board.
(C) COMPENSATION.—The Executive Direc-
tor shall be paid at a rate not to exceed the rate
payable for level V of the Executive Schedule
under section 5316 of title 5, United States Code.
(2) STAFF.—
(A) IN GENERAL.—With the approval of a
majority of the Board, the Executive Director
may appoint and fix the pay of such additional
personnel as the Executive Director considers
necessary to carry out this section.
(B) COMPENSATION.—An individual ap-
pointed under subparagraph (A) shall be paid at
a rate not to exceed the rate payable for level
GS–15 of the General Schedule.
(3) POWERS.—
(A) GIFTS.—
(i) IN GENERAL.—The Program may
solicit, accept, use, and dispose of gifts, be-
quests, or devises of services or property,
both real and personal, for the purpose of
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aiding or facilitating the work of the Pro-
gram.
(ii) USE OF GIFTS.—Gifts, bequests, or
devises of money and proceeds from sales of
other property received as gifts, bequests, or
devises shall—
(I) be deposited in the Fund; and
(II) be available for disbursement
on order of the Board.
(B) PROCUREMENT
OF
TEMPORARY
AND
INTERMITTENT
SERVICES.—To carry out this
section, the Program may procure temporary
and intermittent services in accordance with sec-
tion 3109(b) of title 5, United States Code, at
rates for individuals that do not exceed the daily
equivalent of the annual rate of basic pay pay-
able for level GS–15 of the General Schedule.
(C) CONTRACT AUTHORITY.—To carry out
this section, the Program may, with the approval
of a majority of the members of the Board, con-
tract with and compensate Government and pri-
vate agencies or persons without regard to sec-
tion 3709 of the Revised Statutes (41 U.S.C. 5).
(D) OTHER NECESSARY EXPENDITURES.—
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(i) IN
GENERAL.—Subject to clause
(ii), the Program may make such other ex-
penditures as the Program considers nec-
essary to carry out this section.
(ii) PROHIBITION.—The Program may
not expend funds to develop new or ex-
panded projects at which fellows may be
placed.
(j) REPORT.—Not later than December 31 of each year,
the Board shall submit to the appropriate congressional
committees a report on the activities of the Program carried
out during the preceding fiscal year that includes—
(1) an analysis of the evaluations conducted
under subsection (f)(4) during the fiscal year; and
(2) a statement of—
(A) the total amount of funds attributable
to gifts received by the Program in the fiscal
year under subsection (i)(3)(A); and
(B) the total amount of funds described in
subparagraph (A) that were expended to carry
out the Program in the fiscal year.
(k) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$18,000,000.
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(l) EFFECTIVE DATE.—This section takes effect on Oc-
tober 1, 2002.
SEC. 463. NUTRITION INFORMATION AND AWARENESS
PILOT PROGRAM.
(a) ESTABLISHMENT.—The Secretary of Agriculture
may establish, in not more than 15 States, a pilot program
to increase the domestic consumption of fresh fruits and
vegetables.
(b) PURPOSE.—The purpose of the program shall be
to provide funds to States to assist eligible public and pri-
vate sector entities with cost-share assistance to carry out
demonstration projects—
(1) to increase fruit and vegetable consumption;
and
(2) to convey related health promotion messages.
(c) PRIORITY.—To the maximum extent practicable,
the Secretary shall—
(1) establish the program in States in which the
production of fruits or vegetables is a significant in-
dustry, as determined by the Secretary; and
(2) base the program on strategic initiatives,
including—
(A) health promotion and education inter-
ventions;
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(B) public service and paid advertising or
marketing activities;
(C) health promotion campaigns relating to
locally grown fruits and vegetables; and
(D) social marketing campaigns.
(d) PARTICIPANT ELIGIBILITY.—In selecting States to
participate in the program, the Secretary shall take into
consideration, with respect to projects and activities pro-
posed to be carried out by the State under the program—
(1) experience in carrying out similar projects or
activities;
(2) innovation; and
(3) the ability of the State—
(A) to conduct marketing campaigns for,
promote, and track increases in levels of, produce
consumption; and
(B) to optimize the availability of produce
through distribution of produce.
(e) FEDERAL SHARE.—The Federal share of the cost
of any project or activity carried out using funds provided
under this section shall be 50 percent.
(f) USE OF FUNDS.—Funds made available to carry
out this section shall not be made available to any foreign
for-profit corporation.
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(g) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$25,000,000 for each of fiscal years 2002 through 2006.
SEC. 464. EFFECTIVE DATE.
Except as otherwise provided in this title, the amend-
ments made by this title take effect on September 1, 2002,
except that a State agency may, at the option of the State
agency, elect not to implement any or all of the amendments
until October 1, 2002.
TITLE V—CREDIT
Subtitle A—Farm Ownership Loans
SEC. 501. DIRECT LOANS.
Section 302(b)(1) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1922(b)(1)) is amended by strik-
ing ‘‘operated’’ and inserting ‘‘participated in the business
operations of’’.
SEC. 502. FINANCING OF BRIDGE LOANS.
Section 303(a)(1) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1923(a)(1)) is amended—
(1) in subparagraph (C), by striking ‘‘or’’ at the
end;
(2) in subparagraph (D), by striking the period
at the end and inserting ‘‘; or’’; and
(3) by adding at the end the following:
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‘‘(E) refinancing, during a fiscal year, a
short-term, temporary bridge loan made by a
commercial or cooperative lender to a beginning
farmer or rancher for the acquisition of land for
a farm or ranch, if—
‘‘(i) the Secretary approved an appli-
cation for a direct farm ownership loan to
the beginning farmer or rancher for acquisi-
tion of the land; and
‘‘(ii) funds for direct farm ownership
loans under section 346(b) were not avail-
able at the time at which the application
was approved.’’.
SEC. 503. LIMITATIONS ON AMOUNT OF FARM OWNERSHIP
LOANS.
Section 305 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1925) is amended by striking sub-
section (a) and inserting the following:
‘‘(a) IN GENERAL.—The Secretary shall not make or
insure a loan under section 302, 303, 304, 310D, or 310E
that would cause the unpaid indebtedness under those sec-
tions of any 1 borrower to exceed the lesser of—
‘‘(1) the value of the farm or other security; or
‘‘(2)(A) in the case of a loan made by the
Secretary—
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‘‘(i) to a beginning farmer or rancher,
$250,000, as adjusted (beginning with fiscal year
2003) by the inflation percentage applicable to
the fiscal year in which the loan is made; or
‘‘(ii) to a borrower other than a beginning
farmer or rancher, $200,000; or
‘‘(B) in the case of a loan guaranteed by the Sec-
retary, $700,000, as—
‘‘(i) adjusted (beginning with fiscal year
2000) by the inflation percentage applicable to
the fiscal year in which the loan is guaranteed;
and
‘‘(ii) reduced by the amount of any unpaid
indebtedness of the borrower on loans under sub-
title B that are guaranteed by the Secretary.’’.
SEC. 504. JOINT FINANCING ARRANGEMENTS.
Section 307(a)(3)(D) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1927(a)(3)(D)) is
amended—
(1) by striking ‘‘If’’ and inserting the following:
‘‘(i) IN
GENERAL.—Subject to clause
(ii), if’’; and
(2) by adding at the end the following:
‘‘(ii) 
BEGINNING
FARMERS
AND
RANCHERS.—The interest rate charged a be-
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ginning farmer or rancher for a loan de-
scribed in clause (i) shall be 50 basis points
less than the rate charged farmers and
ranchers that are not beginning farmers or
ranchers.’’.
SEC. 505. GUARANTEE PERCENTAGE FOR BEGINNING FARM-
ERS AND RANCHERS.
Section 309(h)(6) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1929(h)(6)) is amended by strik-
ing ‘‘GUARANTEED UP’’ and all that follows through ‘‘more
than’’ and inserting ‘‘GUARANTEED AT 95 PERCENT.—The
Secretary shall guarantee’’.
SEC. 506. GUARANTEE OF LOANS MADE UNDER STATE BE-
GINNING FARMER OR RANCHER PROGRAMS.
Section 309 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1929) is amended by adding at
the end the following:
‘‘(j) GUARANTEE OF LOANS MADE UNDER STATE BE-
GINNING FARMER
OR RANCHER PROGRAMS.—The Sec-
retary may guarantee under this title a loan made under
a State beginning farmer or rancher program, including
a loan financed by the net proceeds of a qualified small
issue agricultural bond for land or property described in
section 144(a)(12)(B)(ii) of the Internal Revenue Code of
1986.’’.
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SEC. 507. DOWN PAYMENT LOAN PROGRAM.
Section 310E of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1935) is amended—
(1) in subsection (b)—
(A) in paragraph (1), by striking ‘‘30 per-
cent’’ and inserting ‘‘40 percent’’; and
(B) in paragraph (3), by striking ‘‘10
years’’ and inserting ‘‘20 years’’; and
(2) in subsection (c)(3)(B), by striking ‘‘10-year’’
and inserting ‘‘20-year’’.
SEC. 508. BEGINNING FARMER AND RANCHER CONTRACT
LAND SALES PROGRAM.
Subtitle A of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1922 et seq.) is amended by adding
at the end the following:
‘‘SEC. 310F. BEGINNING FARMER AND RANCHER CONTRACT
LAND SALES PROGRAM.
‘‘(a) IN GENERAL.—Not later than October 1, 2002,
the Secretary shall carry out a pilot program in not fewer
than 10 geographically dispersed States, as determined by
the Secretary, to guarantee up to 5 loans per State in each
of fiscal years 2003 through 2006 made by a private seller
of a farm or ranch to a qualified beginning farmer or
rancher on a contract land sale basis, if the loan meets ap-
plicable underwriting criteria and a commercial lending
institution agrees to serve as escrow agent.
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‘‘(b) DATE OF COMMENCEMENT OF PROGRAM.—The
Secretary shall commence the pilot program on making a
determination that guarantees of contract land sales present
a risk that is comparable with the risk presented in the
case of guarantees to commercial lenders.’’.
Subtitle B—Operating Loans
SEC. 511. DIRECT LOANS.
Section 311(c)(1)(A) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1941(c)(1)(A)) is amend-
ed by striking ‘‘who has not’’ and all that follows through
‘‘5 years’’.
SEC. 512. AMOUNT OF GUARANTEE OF LOANS FOR TRIBAL
FARM OPERATIONS; WAIVER OF LIMITATIONS
FOR TRIBAL OPERATIONS AND OTHER OPER-
ATIONS.
(a) AMOUNT OF GUARANTEE OF LOANS FOR TRIBAL
OPERATIONS.—Section 309(h) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1929(h)) is
amended—
(1) in paragraph (4), by striking ‘‘paragraphs
(5) and (6)’’ and inserting ‘‘paragraphs (5), (6), and
(7)’’; and
(2) by adding at the end the following:
‘‘(7) AMOUNT
OF
GUARANTEE
OF
LOANS
FOR
TRIBAL OPERATIONS.—In the case of an operating
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loan made to a farmer or rancher who is a member
of an Indian tribe and whose farm or ranch is within
an Indian reservation (as defined in section
335(e)(1)(A)(ii)), the Secretary shall guarantee 95
percent of the loan.’’.
(b) WAIVER OF LIMITATIONS.—Section 311(c) of the
Consolidated Farm and Rural Development Act (7 U.S.C.
1941(c)) is amended—
(1) in paragraph (1), by striking ‘‘paragraph
(3)’’ and inserting ‘‘paragraphs (3) and (4)’’; and
(2) by adding at the end the following:
‘‘(4) WAIVERS.—
‘‘(A) TRIBAL
FARM
AND
RANCH
OPER-
ATIONS.—The Secretary shall waive the limita-
tion under paragraph (1)(C) or (3) for a direct
loan made under this subtitle to a farmer or
rancher who is a member of an Indian tribe and
whose farm or ranch is within an Indian res-
ervation (as defined in section 335(e)(1)(A)(ii))
if the Secretary determines that commercial cred-
it is not generally available for such farm or
ranch operations.
‘‘(B) OTHER
FARM
AND
RANCH
OPER-
ATIONS.—On a case-by-case determination not
subject to administrative appeal, the Secretary
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may grant a borrower a waiver, 1 time only for
a period of 2 years, of the limitation under
paragraph (1)(C) or (3) for a direct operating
loan if the borrower demonstrates to the satisfac-
tion of the Secretary that—
‘‘(i) the borrower has a viable farm or
ranch operation;
‘‘(ii) the borrower applied for commer-
cial credit from at least 2 commercial lend-
ers;
‘‘(iii) the borrower was unable to ob-
tain a commercial loan (including a loan
guaranteed by the Secretary); and
‘‘(iv) the borrower successfully has
completed, or will complete within 1 year,
borrower training under section 359 (from
which requirement the Secretary shall not
grant a waiver under section 359(f)).’’.
Subtitle C—Administrative
Provisions
SEC. 521. ELIGIBILITY OF LIMITED LIABILITY COMPANIES
FOR FARM OWNERSHIP LOANS, FARM OPER-
ATING LOANS, AND EMERGENCY LOANS.
(a) IN
GENERAL.—Sections 302(a), 311(a), and
321(a) of the Consolidated Farm and Rural Development
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Act (7 U.S.C. 1922(a), 1941(a), 1961(a)) are amended by
striking ‘‘and joint operations’’ each place it appears and
inserting ‘‘joint operations, and limited liability compa-
nies’’.
(b) CONFORMING AMENDMENT.—Section 321(a) of the
Consolidated Farm and Rural Development Act (7 U.S.C.
1961(a)) is amended by striking ‘‘or joint operations’’ each
place it appears and inserting ‘‘joint operations, or limited
liability companies’’.
SEC. 522. DEBT SETTLEMENT.
Section 331(b)(4) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1981(b)(4)) is amended by strik-
ing ‘‘carried out—’’ and all that follows through ‘‘(B) after’’
and inserting ‘‘carried out after’’.
SEC. 523. TEMPORARY AUTHORITY TO ENTER INTO CON-
TRACTS; PRIVATE COLLECTION AGENCIES.
(a) IN GENERAL.—Section 331 of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1981) is
amended by striking subsections (d) and (e).
(b) APPLICATION.—The amendment made by sub-
section (a) shall not apply to a contract entered into before
the effective date of this Act.
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SEC. 524. INTEREST RATE OPTIONS FOR LOANS IN SERV-
ICING.
Section 331B of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1981b) is amended—
(1) by striking ‘‘lower of (1) the’’ and inserting
the following: ‘‘lowest of—
‘‘(1) the’’; and
(2) by striking ‘‘original loan or (2) the’’ and in-
serting the following: ‘‘original loan;
‘‘(2) the rate being charged by the Secretary for
loans, other than guaranteed loans, of the same type
at the time at which the borrower applies for a defer-
ral, consolidation, rescheduling, or reamortization; or
‘‘(3) the’’.
SEC. 525. ANNUAL REVIEW OF BORROWERS.
Section 333 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1983) is amended by striking
paragraph (2) and inserting the following:
‘‘(2) except with respect to a loan under section
306, 310B, or 314—
‘‘(A) an annual review of the credit history
and business operation of the borrower; and
‘‘(B) an annual review of the continued eli-
gibility of the borrower for the loan;’’.
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SEC. 526. SIMPLIFIED LOAN APPLICATIONS.
Section 333A(g)(1) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1983a(g)(1)) is amended
by striking ‘‘of loans the principal amount of which is
$50,000 or less’’ and inserting ‘‘of farmer program loans
the principal amount of which is $100,000 or less’’.
SEC. 527. INVENTORY PROPERTY.
Section 335(c) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1985(c)) is amended—
(1) in paragraph (1)—
(A) in subparagraph (B)—
(i) in clause (i), by striking ‘‘75 days’’
and inserting ‘‘135 days’’; and
(ii) by adding at the end the following:
‘‘(iv) COMBINING
AND
DIVIDING
OF
PROPERTY.—To the maximum extent prac-
ticable, the Secretary shall maximize the op-
portunity for beginning farmers and ranch-
ers to purchase real property acquired by
the Secretary under this title by combining
or dividing inventory parcels of the prop-
erty in such manner as the Secretary deter-
mines to be appropriate.’’; and
(B) in subparagraph (C)—
(i) by striking ‘‘75 days’’ and inserting
‘‘135 days’’; and
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(ii) by striking ‘‘75-day period’’ and
inserting ‘‘135-day period’’;
(2) by striking paragraph (2) and inserting the
following:
‘‘(2) PREVIOUS LEASE.—In the case of real prop-
erty acquired before April 4, 1996, that the Secretary
leased before April 4, 1996, not later than 60 days
after the lease expires, the Secretary shall offer to sell
the property in accordance with paragraph (1).’’; and
(3) in paragraph (3)—
(A) in subparagraph (A), by striking ‘‘sub-
paragraph (B)’’ and inserting ‘‘subparagraphs
(B) and (C)’’; and
(B) by adding at the end the following:
‘‘(C) OFFER TO SELL OR GRANT FOR FARM-
LAND PRESERVATION.—For the purpose of farm-
land preservation, the Secretary shall—
‘‘(i) in consultation with the State
Conservationist of each State in which in-
ventory property is located, identify each
parcel of inventory property in the State
that should be preserved for agricultural
use; and
‘‘(ii) offer to sell or grant an easement,
restriction, development right, or similar
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legal right to each parcel identified under
clause (i) to a State, a political subdivision
of a State, or a private nonprofit organiza-
tion separately from the underlying fee or
other rights to the property owned by the
United States.’’.
SEC. 528. DEFINITIONS.
(a) QUALIFIED BEGINNING FARMER OR RANCHER.—
Section 343(a)(11)(F) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1991(a)(11)(F)) is amended by
striking ‘‘25 percent’’ and inserting ‘‘30 percent’’.
(b) DEBT FORGIVENESS.—Section 343(a)(12) of the
Consolidated Farm and Rural Development Act (7 U.S.C.
1991(a)(12)) is amended by striking subparagraph (B) and
inserting the following:
‘‘(B) EXCEPTIONS.—The term ‘debt forgive-
ness’ does not include—
‘‘(i) consolidation, rescheduling, re-
amortization, or deferral of a loan; or
‘‘(ii) any write-down provided as part
of a resolution of a discrimination com-
plaint against the Secretary.’’.
SEC. 529. LOAN AUTHORIZATION LEVELS.
Section 346 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1994) is amended—
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(1) in subsection (b)—
(A) by striking paragraph (1) and inserting
the following:
‘‘(1) IN GENERAL.—The Secretary may make or
guarantee loans under subtitles A and B from the Ag-
ricultural Credit Insurance Fund provided for in sec-
tion 309 for not more than $3,750,000,000 for each of
fiscal years 2002 through 2006, of which, for each fis-
cal year—
‘‘(A) $750,000,000 shall be for direct loans,
of which—
‘‘(i) $200,000,000 shall be for farm
ownership loans under subtitle A; and
‘‘(ii) $550,000,000 shall be for oper-
ating loans under subtitle B; and
‘‘(B) $3,000,000,000 shall be for guaranteed
loans, of which—
‘‘(i) $1,000,000,000 shall be for guar-
antees of farm ownership loans under sub-
title A; and
‘‘(ii) $2,000,000,000 shall be for guar-
antees of operating loans under subtitle B.’’;
and
(B) in paragraph (2)(A)(ii), by striking
‘‘farmers and ranchers’’ and all that follows and
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inserting ‘‘farmers and ranchers 35 percent for
each of fiscal years 2002 through 2006.’’; and
(2) in subsection (c), by striking the last sen-
tence.
SEC. 530. INTEREST RATE REDUCTION PROGRAM.
Section 351 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1999) is amended—
(1) in subsection (a)—
(A) by striking ‘‘PROGRAM.—’’ and all that
follows through ‘‘The Secretary’’ and inserting
‘‘PROGRAM.—The Secretary’’; and
(B) by striking paragraph (2);
(2) by striking subsection (c) and inserting the
following:
‘‘(c) AMOUNT OF INTEREST RATE REDUCTION.—
‘‘(1) IN GENERAL.—In return for a contract en-
tered into by a lender under subsection (b) for the re-
duction of the interest rate paid on a loan, the Sec-
retary shall make payments to the lender in an
amount equal to not more than 100 percent of the cost
of reducing the annual rate of interest payable on the
loan, except that such payments shall not exceed the
cost of reducing the rate by more than—
‘‘(A) in the case of a borrower other than a
beginning farmer or rancher, 3 percent; and
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‘‘(B) in the case of a beginning farmer or
rancher, 4 percent.
‘‘(2) BEGINNING FARMERS AND RANCHERS.—The
percentage reduction of the interest rate for which
payments are authorized to be made for a beginning
farmer or rancher under paragraph (1) shall be 1
percent more than the percentage reduction for farm-
ers and ranchers that are not beginning farmers or
ranchers.’’; and
(3) in subsection (e), by striking paragraph (2)
and inserting the following:
‘‘(2) MAXIMUM AMOUNT OF FUNDS.—
‘‘(A) IN
GENERAL.—The total amount of
funds used by the Secretary to carry out this sec-
tion 
for 
a 
fiscal 
year 
shall 
not 
exceed
$750,000,000.
‘‘(B) BEGINNING
FARMERS
AND
RANCH-
ERS.—
‘‘(i) IN GENERAL.—The Secretary shall
reserve not less than 25 percent of the funds
used by the Secretary under subparagraph
(A) to make payments for guaranteed loans
made to beginning farmers and ranchers.
‘‘(ii) DURATION OF RESERVATION OF
FUNDS.—Funds 
reserved 
for 
beginning
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farmers or ranchers under clause (i) for a
fiscal year shall be reserved only until April
1 of the fiscal year.’’.
SEC. 531. OPTIONS FOR SATISFACTION OF OBLIGATION TO
PAY RECAPTURE AMOUNT FOR SHARED AP-
PRECIATION AGREEMENTS.
(a) IN GENERAL.—Section 353(e)(7) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C.
2001(e)(7)) is amended—
(1) in subparagraph (C), by redesignating
clauses (i) and (ii) as subclauses (I) and (II), respec-
tively, and adjusting the margins appropriately;
(2) by redesignating subparagraphs (A) through
(C) as clauses (i) through (iii), respectively, and ad-
justing the margins appropriately;
(3) by striking the paragraph heading and in-
serting the following:
‘‘(7) OPTIONS FOR SATISFACTION OF OBLIGATION
TO PAY RECAPTURE AMOUNT.—
‘‘(A) IN GENERAL.—As an alternative to re-
paying the full recapture amount at the end of
the term of the shared appreciation agreement
(as determined by the Secretary in accordance
with this subsection), a borrower may satisfy the
obligation to pay the amount of recapture by—
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‘‘(i) financing the recapture payment
in accordance with subparagraph (B); or
‘‘(ii) granting the Secretary an agri-
cultural use protection and conservation
easement on the property subject to the
shared appreciation agreement in accord-
ance with subparagraph (C).
‘‘(B) 
FINANCING
OF
RECAPTURE
PAY-
MENT.—’’; and
(4) by adding at the end the following:
‘‘(C) AGRICULTURAL USE PROTECTION AND
CONSERVATION EASEMENT.—
‘‘(i) IN
GENERAL.—Subject to clause
(iii), the Secretary shall accept an agricul-
tural use protection and conservation ease-
ment from the borrower for all of the real
security property subject to the shared ap-
preciation agreement in lieu of payment of
the recapture amount.
‘‘(ii) TERM.—The term of an easement
accepted by the Secretary under this sub-
paragraph shall be 25 years.
‘‘(iii) 
CONDITIONS.—The 
easement
shall require that the property subject to the
easement shall continue to be used or con-
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served for agricultural and conservation
uses in accordance with sound farming and
conservation practices, as determined by the
Secretary.
‘‘(iv) REPLACEMENT
OF
METHOD
OF
SATISFYING OBLIGATION.—A borrower that
has begun financing of a recapture payment
under subparagraph (B) may replace that
financing with an agricultural use protec-
tion and conservation easement under this
subparagraph.’’.
(b) APPLICABILITY.—The amendments made by sub-
section (a) shall apply to a shared appreciation agreement
entered into under section 353(e) of the Consolidated Farm
and Rural Development Act (7 U.S.C. 2001(e)) that—
(1) matures on or after the date of enactment of
this Act; or
(2) matured before the date of enactment of this
Act, if—
(A) the recapture amount was reamortized
under section 353(e)(7) of the Consolidated Farm
and 
Rural 
Development 
Act 
(7 
U.S.C.
2001(e)(7)) (as in effect on the day before the
date of enactment of this Act); or
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(B)(i) the recapture amount had not been
paid before the date of enactment of this Act be-
cause of circumstances beyond the control of the
borrower; and
(ii) the borrower acted in good faith (as de-
termined by the Secretary) in attempting to
repay the recapture amount.
SEC. 532. WAIVER OF BORROWER TRAINING CERTIFICATION
REQUIREMENT.
Section 359 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 2006a) is amended by striking sub-
section (f) and inserting the following:
‘‘(f) WAIVERS.—
‘‘(1) IN GENERAL.—The Secretary may waive
the requirements of this section for an individual bor-
rower if the Secretary determines that the borrower
demonstrates adequate knowledge in areas described
in this section.
‘‘(2) CRITERIA.—The Secretary shall establish
criteria providing for the application of paragraph
(1) consistently in all counties nationwide.’’.
SEC. 533. ANNUAL REVIEW OF BORROWERS.
Section 360(d)(1) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 2006b(d)(1)) is amended by
striking ‘‘biannual’’ and inserting ‘‘annual’’.
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Subtitle D—Farm Credit
SEC. 541. REPEAL OF BURDENSOME APPROVAL REQUIRE-
MENTS.
(a) BANKS FOR COOPERATIVES.—Section 3.1(11)(B)
of the Farm Credit Act of 1971 (12 U.S.C. 2122(11)(B))
is amended—
(1) by striking clause (iii); and
(2) by redesignating clause (iv) as clause (iii).
(b) OTHER SYSTEM BANKS; ASSOCIATIONS.—Section
4.18A of the Farm Credit Act of 1971 (12 U.S.C. 2206a)
is amended—
(1) 
in 
subsection 
(a)(1), 
by 
striking
‘‘3.1(11)(B)(iv)’’ and inserting ‘‘3.1(11)(B)(iii)’’; and
(2) by striking subsection (c).
SEC. 542. BANKS FOR COOPERATIVES.
Section 3.7(b) of the Farm Credit Act of 1971 (12
U.S.C. 2128(b)) is amended—
(1) in paragraphs (1) and (2)(A)(i), by striking
‘‘farm supplies’’ each place it appears and inserting
‘‘agricultural supplies’’; and
(2) by adding at the end the following:
‘‘(4) DEFINITION OF AGRICULTURAL SUPPLY.—
In this subsection, the term ‘agricultural supply’
includes—
‘‘(A) a farm supply; and
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‘‘(B)(i) agriculture-related processing equip-
ment;
‘‘(ii) agriculture-related machinery; and
‘‘(iii) other capital goods related to the stor-
age or handling of agricultural commodities or
products.’’.
SEC. 543. INSURANCE CORPORATION PREMIUMS.
(a) REDUCTION IN PREMIUMS FOR GSE-GUARANTEED
LOANS.—
(1) IN
GENERAL.—Section 5.55 of the Farm
Credit Act of 1971 (12 U.S.C. 2277a–4) is amended—
(A) in subsection (a)—
(i) in paragraph (1)—
(I) in subparagraph (A), by strik-
ing ‘‘government-guaranteed loans pro-
vided for in subparagraph (C)’’ and
inserting ‘‘loans provided for in sub-
paragraphs (C) and (D)’’;
(II) in subparagraph (B), by
striking ‘‘and’’ at the end;
(III) in subparagraph (C), by
striking the period at the end and in-
serting ‘‘; and’’; and
(IV) by adding at the end the fol-
lowing:
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‘‘(D) the annual average principal out-
standing for such year on the guaranteed por-
tions of Government Sponsored Enterprise-guar-
anteed loans made by the bank that are in ac-
crual status, multiplied by a factor, not to exceed
0.0015, determined by the Corporation at the
sole discretion of the Corporation.’’; and
(ii) by adding at the end the following:
‘‘(4) DEFINITION OF GOVERNMENT SPONSORED
ENTERPRISE-GUARANTEED LOAN.—In this section and
sections 1.12(b) and 5.56(a), the term ‘Government
Sponsored Enterprise-guaranteed loan’ means a loan
or credit, or portion of a loan or credit, that is guar-
anteed by an entity that is chartered by Congress to
serve a public purpose and the debt obligations of
which are not explicitly guaranteed by the United
States, including the Federal National Mortgage Asso-
ciation, the Federal Home Loan Mortgage Corpora-
tion, the Federal Home Loan Bank System, and the
Federal Agricultural Mortgage Corporation, but not
including any other institution of the Farm Credit
System.’’; and
(B) in subsection (e)(4)(B), by striking
‘‘government-guaranteed loans described in sub-
section (a)(1)(C)’’ and inserting ‘‘loans described
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in subparagraph (C) or (D) of subsection
(a)(1)’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 1.12(b) of the Farm Credit Act
of 1971 (12 U.S.C. 2020(b)) is amended—
(i) in paragraph (1), by inserting
‘‘and Government Sponsored Enterprise-
guaranteed loans (as defined in section
5.55(a)(4)) provided for in paragraph (4)’’
after ‘‘government-guaranteed loans (as de-
fined in section 5.55(a)(3)) provided for in
paragraph (3)’’;
(ii) in paragraph (2), by striking
‘‘and’’ at the end;
(iii) in paragraph (3), by striking the
period at the end and inserting ‘‘; and’’;
and
(iv) by adding at the end the following:
‘‘(4) the annual average principal outstanding
for such year on the guaranteed portions of Govern-
ment Sponsored Enterprise-guaranteed loans (as so
defined) made by the association, or by the other fi-
nancing institution and funded by or discounted with
the Farm Credit Bank, that are in accrual status,
multiplied by a factor, not to exceed 0.0015, deter-
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mined by the Corporation for the purpose of setting
the premium for such guaranteed portions of loans
under section 5.55(a)(1)(D).’’.
(B) Section 5.56(a) of the Farm Credit Act
of 1971 (12 U.S.C. 2277a–5(a)) is amended—
(i) in paragraph (1), by inserting
‘‘and Government Sponsored Enterprise-
guaranteed loans (as defined in section
5.55(a)(4))’’ after ‘‘government-guaranteed
loans’’;
(ii) by redesignating paragraphs (4)
and (5) as paragraphs (5) and (6), respec-
tively; and
(iii) by inserting after paragraph (3)
the following:
‘‘(4) the annual average principal outstanding
on the guaranteed portions of Government Sponsored
Enterprise-guaranteed loans (as defined in section
5.55(a)(4)) that are in accrual status;’’.
(b) EFFECTIVE DATE.—The amendments made by sub-
section (a) take effect on the date on which Farm Credit
System Insurance Corporation premiums are due from in-
sured Farm Credit System banks under section 5.55 of the
Farm Credit Act of 1971 (12 U.S.C. 2277a–4) for calendar
year 2001.
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SEC. 544. BOARD OF DIRECTORS OF THE FEDERAL AGRI-
CULTURAL MORTGAGE CORPORATION.
Section 8.2(b) of the Farm Credit Act of 1971 (12
U.S.C. 2279aa–2(b)) is amended—
(1) in paragraph (2)—
(A) by striking ‘‘15’’ and inserting ‘‘17’’;
(B) in subparagraph (A), by striking ‘‘com-
mon stock’’ and all that follows and inserting
‘‘Class A voting common stock;’’;
(C) in subparagraph (B), by striking ‘‘com-
mon stock’’ and all that follows and inserting
‘‘Class B voting common stock;’’;
(D) by redesignating subparagraph (C) as
subparagraph (D); and
(E) by inserting after subparagraph (B) the
following:
‘‘(C) 2 members shall be elected by holders
of Class A voting common stock and Class B vot-
ing common stock, 1 of whom shall be the chief
executive officer of the Corporation and 1 of
whom shall be another executive officer of the
Corporation; and’’;
(2) in paragraph (3), by striking ‘‘(2)(C)’’ and
inserting ‘‘(2)(D)’’;
(3) in paragraph (4)—
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(A) in subparagraph (A), by striking ‘‘(A)
or (B)’’ and inserting ‘‘(A), (B), or (C)’’; and
(B) in subparagraph (B), by striking
‘‘(2)(C)’’ and inserting ‘‘(2)(D)’’;
(4) in paragraph (5)(A)—
(A) by inserting ‘‘executive officers of the
Corporation or’’ after ‘‘from among persons who
are’’; and
(B) by striking ‘‘such a representative’’ and
inserting ‘‘such an executive officer or represent-
ative’’;
(5) in paragraph (6)(B), by striking ‘‘(A) and
(B)’’ and inserting ‘‘(A), (B), and (C)’’;
(6) in paragraph (7), by striking ‘‘8 members’’
and inserting ‘‘Nine members’’;
(7) in paragraph (8)—
(A) in the paragraph heading, by inserting
‘‘OR
EXECUTIVE
OFFICERS
OF
THE
CORPORA-
TION’’ after ‘‘EMPLOYEES’’; and
(B) by inserting ‘‘or executive officers of the
Corporation’’ after ‘‘United States’’; and
(8) by striking paragraph (9) and inserting the
following:
‘‘(9) CHAIRPERSON.—
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‘‘(A) ELECTION.—The permanent board
shall annually elect a chairperson from among
the members of the permanent board.
‘‘(B) TERM.—The term of the chairperson
shall coincide with the term served by elected
members of the permanent board under para-
graph (6)(B).’’.
Subtitle E—General Provisions
SEC. 551. INAPPLICABILITY OF FINALITY RULE.
Section 281(a)(1) of the Department of Agriculture Re-
organization Act of 1994 (7 U.S.C. 7001(a)(1)) is
amended—
(1) by striking ‘‘This subsection’’ and inserting
the following:
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), this subsection’’; and
(2) by adding at the end the following:
‘‘(B) AGRICULTURAL CREDIT DECISIONS.—
This subsection shall not apply with respect to
an agricultural credit decision made by such a
State, county, or area committee, or employee of
such a committee, under the Consolidated Farm
and Rural Development Act (7 U.S.C. 1921 et
seq.).’’.
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SEC. 552. TECHNICAL AMENDMENTS.
(a) Section 321(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1961(a)) is amended by
striking ‘‘Disaster Relief and Emergency Assistance Act’’
each place it appears and inserting ‘‘Robert T. Stafford
Disaster Relief and Emergency Assistance Act (42 U.S.C.
5121 et seq.)’’.
(b) Section 336(b) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1986(b)) is amended in the sec-
ond sentence by striking ‘‘provided for in section 332 of this
title’’.
(c) Section 359(c)(1) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2006a(c)(1)) is amended
by striking ‘‘established pursuant to section 332,’’.
(d) Section 360(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 2006b(a)) is amended by
striking ‘‘established pursuant to section 332’’.
SEC. 553. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b) and section 543(b), this title and the amendments made
by this title take effect on October 1, 2001.
(b) BOARD OF DIRECTORS OF THE FEDERAL AGRICUL-
TURAL MORTGAGE CORPORATION.—The amendments made
by section 544 take effect on the date of enactment of this
Act.
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TITLE VI—RURAL DEVELOPMENT
Subtitle A—Empowerment of Rural
America
SEC. 601. NATIONAL RURAL COOPERATIVE AND BUSINESS
EQUITY FUND.
The Consolidated Farm and Rural Development Act
(7 U.S.C. 1921 et seq.) is amended by adding at the end
the following:
‘‘Subtitle G—National Rural Coop-
erative 
and 
Business 
Equity
Fund
‘‘SEC. 383A. SHORT TITLE.
‘‘This subtitle may be cited as the ‘National Rural Co-
operative and Business Equity Fund Act’.
‘‘SEC. 383B. PURPOSE.
‘‘The purpose of this subtitle is to revitalize rural com-
munities and enhance farm income through sustainable
rural business development by providing Federal funds and
credit enhancements to a private equity fund in order to
encourage investments by institutional and noninstitu-
tional investors for the benefit of rural America.
‘‘SEC. 383C. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) AUTHORIZED
PRIVATE
INVESTOR.—The
term ‘authorized private investor’ means an indi-
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vidual, legal entity, or affiliate or subsidiary of an
individual or legal entity that—
‘‘(A) is eligible to receive a loan guarantee
under this title;
‘‘(B) is eligible to receive a loan guarantee
under the Rural Electrification Act of 1936 (7
U.S.C. 901 et seq.);
‘‘(C) is created under the National Con-
sumer Cooperative Bank Act (12 U.S.C. 3011 et
seq.);
‘‘(D) is an insured depository institution
subject to section 383E(b)(2);
‘‘(E) is a Farm Credit System institution
described in section 1.2(a) of the Farm Credit
Act of 1971 (12 U.S.C. 2002(a)); or
‘‘(F) is determined by the Board to be an
appropriate investor in the Fund.
‘‘(2) BOARD.—The term ‘Board’ means the board
of directors of the Fund established under section
383G.
‘‘(3) FUND.—The term ‘Fund’ means the Na-
tional Rural Cooperative and Business Equity Fund
established under section 383D.
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‘‘(4) GROUP OF SIMILAR AUTHORIZED PRIVATE
INVESTORS.—The term ‘group of similar investors’
means any 1 of the following:
‘‘(A) Insured depository institutions with
total assets of more than $250,000,000.
‘‘(B) Insured depository institutions with
total assets equal to or less than $250,000,000.
‘‘(C) Farm Credit System institutions de-
scribed in section 1.2(a) of the Farm Credit Act
of 1971 (12 U.S.C. 2002(a)).
‘‘(D) 
Cooperative 
financial 
institutions
(other than Farm Credit System institutions).
‘‘(E) Private investors, other than those de-
scribed in subparagraphs (A) through (D), au-
thorized by the Secretary.
‘‘(F) Other nonprofit organizations, includ-
ing credit unions.
‘‘(5) INSURED
DEPOSITORY
INSTITUTION.—The
term ‘insured depository institution’ means any bank
or savings association the deposits of which are in-
sured under the Federal Deposit Insurance Act (12
U.S.C. 1811 et seq.).
‘‘(6) RURAL BUSINESS.—The term ‘rural busi-
ness’ means a rural cooperative, a value-added agri-
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cultural enterprise, or any other business located or
locating in a rural area.
‘‘SEC. 383D. ESTABLISHMENT.
‘‘(a) AUTHORITY.—
‘‘(1) IN GENERAL.—On certification by the Sec-
retary that, to the maximum extent practicable, the
parties proposing to establish a fund provide a broad
representation of all of the groups of similar author-
ized private investors described in subparagraphs (A)
through (F) of section 383C(4), the parties may estab-
lish a non-Federal entity under State law to purchase
shares of, and manage a fund to be known as the ‘Na-
tional Rural Cooperative and Business Equity Fund’,
to generate and provide equity capital to rural busi-
nesses.
‘‘(2) OWNERSHIP.—
‘‘(A) IN GENERAL.—To the maximum ex-
tent practicable, equity ownership of the Fund
shall be distributed among authorized private in-
vestors representing all of the groups of similar
authorized private investors described in sub-
paragraphs (A) through (F) of section 383C(4).
‘‘(B) EXCLUSION OF GROUPS.—No group of
authorized private investors shall be excluded
from equity ownership of the Fund during any
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period during which the Fund is in existence if
an authorized private investor representative of
the group is able and willing to invest in the
Fund.
‘‘(b) PURPOSES.—The purposes of the Fund shall be—
‘‘(1) to strengthen the economy of rural areas;
‘‘(2) to further sustainable rural business devel-
opment;
‘‘(3) to encourage—
‘‘(A) start-up rural businesses;
‘‘(B) increased opportunities for small and
minority-owned rural businesses; and
‘‘(C) the formation of new rural businesses;
‘‘(4) to enhance rural employment opportunities;
‘‘(5) to provide equity capital to rural busi-
nesses, many of which have difficulty obtaining eq-
uity capital; and
‘‘(6) to leverage non-Federal funds for rural busi-
nesses.
‘‘(c) ARTICLES OF INCORPORATION AND BYLAWS.—The
articles of incorporation and bylaws of the Fund shall set
forth purposes of the Fund that are consistent with the pur-
poses described in subsection (b).
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‘‘SEC. 383E. INVESTMENT IN THE FUND.
‘‘(a) IN GENERAL.—Of the funds made available under
section 383H, the Secretary shall—
‘‘(1) subject to subsection (b)(1), make available
to the Fund $150,000,000;
‘‘(2) subject to subsection (c), guarantee 50 per-
cent of each investment made by an authorized pri-
vate investor in the Fund; and
‘‘(3) subject to subsection (d), guarantee the re-
payment of principal of, and accrued interest on, de-
bentures issued by the Fund to authorized private in-
vestors.
‘‘(b) PRIVATE INVESTMENT.—
‘‘(1) MATCHING
REQUIREMENT.—Under sub-
section (a)(1), the Secretary shall make an amount
available to the Fund only after an equal amount has
been invested in the Fund by authorized private in-
vestors in accordance with this subtitle and the terms
and conditions set forth in the bylaws of the Fund.
‘‘(2) INSURED DEPOSITORY INSTITUTIONS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C)—
‘‘(i) an insured depository institution
may be an authorized private investor in
the Fund; and
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‘‘(ii) an investment in the Fund may
be considered to be part of the record of an
institution in meeting the credit needs of
the community in which the institution is
located under any applicable Federal law.
‘‘(B) INVESTMENT LIMIT.—The total invest-
ment in the Fund of an insured depository insti-
tution shall not exceed 5 percent of the capital
and surplus of the institution.
‘‘(C) REGULATORY AUTHORITY.—An appro-
priate Federal banking agency may, by regula-
tion or order, impose on any insured depository
institution investing in the Fund, any safeguard,
limitation, or condition (including an invest-
ment limit that is lower than the investment
limit under subparagraph (B)) that the Federal
banking agency considers to be appropriate to
ensure that the institution operates—
‘‘(i) in a financially sound manner;
and
‘‘(ii) in compliance with all applicable
law.
‘‘(c) GUARANTEE OF PRIVATE INVESTMENTS.—
‘‘(1) IN
GENERAL.—The Secretary shall guar-
antee, under terms and conditions determined by the
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Secretary, 50 percent of any loss of the principal of
an investment made in the Fund by an authorized
private investor.
‘‘(2) MAXIMUM TOTAL GUARANTEE.—The aggre-
gate potential liability of the Secretary with respect
to all guarantees under paragraph (1) shall not apply
to more than $300,000,000 in private investments in
the Fund.
‘‘(3) REDEMPTION OF GUARANTEE.—
‘‘(A) DATE.—An authorized private inves-
tor in the Fund may redeem a guarantee under
paragraph (1), with respect to the total invest-
ments in the Fund and the total losses of the au-
thorized private investor as of the date of
redemption—
‘‘(i) on the date that is 5 years after
the date of the initial investment by the au-
thorized private investor; or
‘‘(ii) annually thereafter.
‘‘(B) EFFECT
OF
REDEMPTION.—On re-
demption of a guarantee under subparagraph
(A)—
‘‘(i) the shares in the Fund of the au-
thorized private investor shall be redeemed;
and
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‘‘(ii) the authorized private investor
shall be prohibited from making any future
investment in the Fund.
‘‘(d) DEBT SECURITIES.—
‘‘(1) IN GENERAL.—The Fund may, at the dis-
cretion of the Board, generate additional capital
through—
‘‘(A) the issuance of debt securities; and
‘‘(B) other means determined to be appro-
priate by the Board.
‘‘(2) GUARANTEE OF DEBT BY SECRETARY.—
‘‘(A) IN
GENERAL.—The Secretary shall
guarantee 100 percent of the principal of, and
accrued interest on, debentures issued by the
Fund that are approved by the Secretary.
‘‘(B) MAXIMUM DEBT GUARANTEED BY SEC-
RETARY.—The outstanding value of debentures
issued by the Fund and guaranteed by the Sec-
retary shall not exceed the lesser of—
‘‘(i) the amount equal to twice the
value of the assets held by the Fund; or
‘‘(ii) $500,000,000.
‘‘(C) RECAPTURE
OF
GUARANTEE
PAY-
MENTS.—If the Secretary makes a payment on a
debt security issued by the Fund as a result of
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a guarantee of the Secretary under this para-
graph, the Secretary shall have priority over
other creditors for repayment of the debt secu-
rity.
‘‘(3) AUTHORIZED PRIVATE INVESTORS.—An au-
thorized private investor may purchase debt securities
issued by the Fund.
‘‘SEC. 383F. INVESTMENTS AND OTHER ACTIVITIES OF THE
FUND.
‘‘(a) INVESTMENTS.—
‘‘(1) IN GENERAL.—
‘‘(A) TYPES.—Subject to subparagraphs (B)
and (C), the Fund may—
‘‘(i) make equity investments in a
rural business that meets—
‘‘(I) the requirements of para-
graph (6); and
‘‘(II) such other requirements as
the Board may establish; and
‘‘(ii) extend credit to the rural business
in—
‘‘(I) the form of mezzanine debt or
subordinated debt; or
‘‘(II) any other form of quasi-eq-
uity.
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‘‘(B) LIMITATIONS ON INVESTMENTS.—
‘‘(i) TOTAL INVESTMENTS BY A SINGLE
RURAL
BUSINESS.—Subject to clause (ii),
investment by the Fund in a single rural
business shall not exceed the greater of—
‘‘(I) an amount equal to 7 percent
of the capital of the Fund; or
‘‘(II) $2,000,000.
‘‘(ii) WAIVER.—The Secretary may
waive the limitation in clause (i) in any
case in which an investment exceeding the
limits specified in clause (i) is necessary to
preserve prior investments in the rural
business.
‘‘(iii) 
TOTAL
NONEQUITY
INVEST-
MENTS.—Except in the case of a project to
assist a rural cooperative, the total amount
of nonequity investments described in sub-
paragraph (A)(ii) that may be provided by
the Fund shall not exceed 20 percent of the
total investments of the Fund in the project.
‘‘(C) LIMITATION.—Notwithstanding sub-
paragraph (B), the amount of any investment by
the Fund in a rural business shall not exceed the
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aggregate amount invested in like securities by
other private entities in that rural business.
‘‘(2) PROCEDURES.—The Fund shall implement
procedures to ensure that—
‘‘(A) the financing arrangements of the
Fund meet the Fund’s primary focus of pro-
viding equity capital; and
‘‘(B) the Fund does not compete with con-
ventional sources of credit.
‘‘(3) DIVERSITY OF PROJECTS.—The Fund—
‘‘(A) shall seek to make equity investments
in a variety of viable projects, with a significant
share of investments—
‘‘(i) in smaller enterprises (as defined
in section 384A) in rural communities of
diverse sizes; and
‘‘(ii) in cooperative and noncooperative
enterprises; and
‘‘(B) shall be managed in a manner that di-
versifies the risks to the Fund among a variety
of projects.
‘‘(4) LIMITATION
ON
RURAL
BUSINESSES
AS-
SISTED.—The Fund shall not invest in any rural
business that is primarily retail in nature (as deter-
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mined by the Board), other than a purchasing cooper-
ative.
‘‘(5) INTEREST RATE LIMITATIONS.—Returns on
investments in and by the Fund and returns on the
extension of credit by participants in projects assisted
by the Fund, shall not be subject to any State or Fed-
eral law establishing a maximum allowable interest
rate.
‘‘(6) REQUIREMENTS FOR RECIPIENTS.—
‘‘(A) OTHER INVESTMENTS.—Any recipient
of amounts from the Fund shall make or obtain
a significant investment from a source of capital
other than the Fund.
‘‘(B) SPONSORSHIP.—To be considered for
an equity investment from the Fund, a rural
business investment project shall be sponsored by
a regional, State, or local sponsoring or endors-
ing organization such as—
‘‘(i) a financial institution;
‘‘(ii) a development organization; or
‘‘(iii) any other established entity en-
gaging or assisting in rural business devel-
opment, including a rural cooperative.
‘‘(b) TECHNICAL
ASSISTANCE.—The Fund, under
terms and conditions established by the Board, shall use not
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less than 2 percent of capital provided by the Federal Gov-
ernment to provide technical assistance to rural businesses
seeking an equity investment from the Fund.
‘‘(c) ANNUAL AUDIT.—
‘‘(1) IN GENERAL.—The Board shall authorize
an annual audit of the financial statements of the
Fund by a nationally recognized auditing firm using
generally accepted accounting principles.
‘‘(2) AVAILABILITY OF AUDIT RESULTS.—The re-
sults of the audit required by paragraph (1) shall be
made available to investors in the Fund.
‘‘(d) ANNUAL REPORT.—The Board shall prepare and
make available to the public an annual report that—
‘‘(1) describes the projects funded with amounts
from the Fund;
‘‘(2) specifies the recipients of amounts from the
Fund;
‘‘(3) specifies the coinvestors in all projects that
receive amounts from the Fund; and
‘‘(4) meets the reporting requirements, if any, of
the State under the law of which the Fund is estab-
lished.
‘‘(e) OTHER AUTHORITIES.—
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‘‘(1) IN GENERAL.—The Board may exercise such
other authorities as are necessary to carry out this
subtitle.
‘‘(2) OVERSIGHT.—The Secretary shall enter in
to a contract with the Administrator of the Small
Business Administration under which the Adminis-
trator of the Small Business Administration shall be
responsible for the routine duties of the Secretary in
regard to the Fund.
‘‘SEC. 383G. GOVERNANCE OF THE FUND.
‘‘(a) IN GENERAL.—The Fund shall be governed by a
board of directors that represents all of the authorized pri-
vate investors in the Fund and the Federal Government and
that consists of—
‘‘(1) a designee of the Secretary;
‘‘(2) 2 members who are appointed by the Sec-
retary and are not Federal employees, including—
‘‘(A) 1 member with expertise in venture
capital investment; and
‘‘(B) 1 member with expertise in coopera-
tive development;
‘‘(3) 8 members who are elected by the authorized
private investors with investments in the Fund; and
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‘‘(4) 1 member who is appointed by the Board
and who is a community banker from an insured de-
pository institution that has—
‘‘(A) total assets equal to or less than
$250,000,000; and
‘‘(B) an investment in the Fund.
‘‘(b) LIMITATION
ON VOTING CONTROL.—No indi-
vidual investor or group of authorized investors may control
more than 25 percent of the votes on the Board.
‘‘SEC. 383H. AUTHORIZATION OF APPROPRIATIONS.
‘‘There are authorized to be appropriated such sums
as are necessary to carry out this subtitle.’’.
SEC. 602. RURAL BUSINESS INVESTMENT PROGRAM.
The Consolidated Farm and Rural Development Act
(as amended by section 601) is amended by adding at the
end the following:
‘‘Subtitle H—Rural Business
Investment Program
‘‘SEC. 384A. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) ARTICLES.—The term ‘articles’ means arti-
cles of incorporation for an incorporated body or the
functional equivalent or other similar documents
specified by the Secretary for other business entities.
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‘‘(2) DEVELOPMENTAL VENTURE CAPITAL.—The
term ‘developmental venture capital’ means capital in
the form of equity capital investments in Rural Busi-
ness Investment Companies with an objective of fos-
tering economic development in rural areas.
‘‘(3) EMPLOYEE WELFARE BENEFIT PLAN; PEN-
SION PLAN.—
‘‘(A) IN
GENERAL.—The terms ‘employee
welfare benefit plan’ and ‘pension plan’ have the
meanings given the terms in section 3 of the Em-
ployee Retirement Income Security Act of 1974
(29 U.S.C. 1002).
‘‘(B) INCLUSIONS.—The terms ‘employee
welfare 
benefit 
plan’ 
and 
‘pension 
plan’
include—
‘‘(i) public and private pension or re-
tirement plans subject to this subtitle; and
‘‘(ii) similar plans not covered by this
subtitle that have been established and that
are maintained by the Federal Government
or any State (including by a political sub-
division, agency, or instrumentality of the
Federal Government or a State) for the ben-
efit of employees.
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‘‘(4) EQUITY CAPITAL.—The term ‘equity cap-
ital’ means common or preferred stock or a similar
instrument, including subordinated debt with equity
features.
‘‘(5) LEVERAGE.—The term ‘leverage’ includes—
‘‘(A) debentures purchased or guaranteed by
the Secretary;
‘‘(B) participating securities purchased or
guaranteed by the Secretary; and
‘‘(C) preferred securities outstanding as of
the date of enactment of this subtitle.
‘‘(6) LICENSE.—The term ‘license’ means a li-
cense issued by the Secretary as provided in section
384D(c).
‘‘(7) LIMITED
LIABILITY
COMPANY.—The term
‘limited liability company’ means a business entity
that is organized and operating in accordance with a
State limited liability company law approved by the
Secretary.
‘‘(8) MEMBER.—The term ‘member’ means, with
respect to a Rural Business Investment Company that
is a limited liability company, a holder of an owner-
ship interest or a person otherwise admitted to mem-
bership in the limited liability company.
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‘‘(9) 
OPERATIONAL
ASSISTANCE.—The 
term
‘operational assistance’ means management, mar-
keting, and other technical assistance that assists a
rural business concern with business development.
‘‘(10) PARTICIPATION
AGREEMENT.—The term
‘participation agreement’ means an agreement, be-
tween the Secretary and a Rural Business Investment
Company granted final approval under section
384D(d), that requires the Rural Business Investment
Company to make investments in smaller enterprises
in rural areas.
‘‘(11) PRIVATE CAPITAL.—
‘‘(A) IN GENERAL.—The term ‘private cap-
ital’ means the total of—
‘‘(i) the paid-in capital and paid-in
surplus of a corporate Rural Business In-
vestment Company, the contributed capital
of the partners of a partnership Rural
Business Investment Company, or the eq-
uity investment of the members of a limited
liability company Rural Business Invest-
ment Company; and
‘‘(ii) unfunded binding commitments,
from investors that meet criteria established
by the Secretary to contribute capital to the
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Rural Business Investment Company, ex-
cept that unfunded commitments may be
counted as private capital for purposes of
approval by the Secretary of any request for
leverage, but leverage shall not be funded
based on the commitments.
‘‘(B) EXCLUSIONS.—The term ‘private cap-
ital’ does not include—
‘‘(i) any funds borrowed by a Rural
Business Investment Company from any
source;
‘‘(ii) any funds obtained through the
issuance of leverage; or
‘‘(iii) any funds obtained directly or
indirectly from the Federal Government or
any State (including by a political subdivi-
sion, agency, or instrumentality of the Fed-
eral Government or a State), except for—
‘‘(I) 50 percent of funds from the
National Rural Cooperative and Busi-
ness Equity Fund;
‘‘(II) funds obtained from the
business revenues (excluding any gov-
ernmental appropriation) of any feder-
ally chartered or government-sponsored
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enterprise established prior to the date
of enactment of this subtitle;
‘‘(III) funds invested by an em-
ployee welfare benefit plan or pension
plan; and
‘‘(IV) any qualified nonprivate
funds (if the investors of the qualified
nonprivate funds do not control, di-
rectly or indirectly, the management,
board of directors, general partners, or
members of the Rural Business Invest-
ment Company).
‘‘(12) QUALIFIED
NONPRIVATE
FUNDS.—The
term ‘qualified nonprivate funds’ means any—
‘‘(A) funds directly or indirectly invested in
any applicant or Rural Business Investment
Company on or before the date of enactment of
this subtitle, by any Federal agency, other than
the Department of Agriculture, under a provi-
sion of law explicitly mandating the inclusion of
those funds in the definition of the term ‘private
capital’; and
‘‘(B) funds invested in any applicant or
Rural Business Investment Company by 1 or
more entities of any State (including by a polit-
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ical subdivision, agency, or instrumentality of
the State and including any guarantee extended
by those entities) in an aggregate amount that
does not exceed 33 percent of the private capital
of the applicant or Rural Business Investment
Company.
‘‘(13) RURAL
BUSINESS
CONCERN.—The term
‘rural business concern’ means—
‘‘(A) a public, private, or cooperative for-
profit or nonprofit organization;
‘‘(B) a for-profit or nonprofit business con-
trolled by an Indian tribe on a Federal or State
reservation or other federally recognized Indian
tribal group; or
‘‘(C) any other person or entity;
that primarily operates in a rural area, as deter-
mined by the Secretary.
‘‘(14) RURAL
BUSINESS
INVESTMENT
COM-
PANY.—The term ‘Rural Business Investment Com-
pany’ means a company that—
‘‘(A) has been granted final approval by the
Secretary under section 384D(d); and
‘‘(B) has entered into a participation agree-
ment with the Secretary.
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‘‘(15) SMALLER ENTERPRISE.—The term ‘small-
er enterprise’ means any rural business concern that,
together with its affiliates—
‘‘(A) has—
‘‘(i) a net financial worth of not more
than $6,000,000, as of the date on which as-
sistance is provided under this subtitle to
the rural business concern; and
‘‘(ii) an average net income for the 2-
year period preceding the date on which as-
sistance is provided under this subtitle to
the rural business concern, of not more than
$2,000,000, after Federal income taxes (ex-
cluding any carryover losses) except that,
for purposes of this clause, if the rural busi-
ness concern is not required by law to pay
Federal income taxes at the enterprise level,
but is required to pass income through to
the shareholders, partners, beneficiaries, or
other equitable owners of the business con-
cern, the net income of the business concern
shall be determined by allowing a deduction
in an amount equal to the total of—
‘‘(I) if the rural business concern
is not required by law to pay State
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(and local, if any) income taxes at the
enterprise level, the net income (deter-
mined without regard to this clause),
multiplied by the marginal State in-
come tax rate (or by the combined
State and local income tax rates, as
applicable) that would have applied if
the business concern were a corpora-
tion; and
‘‘(II) the net income (so deter-
mined) less any deduction for State
(and local) income taxes calculated
under subclause (I), multiplied by the
marginal Federal income tax rate that
would have applied if the rural busi-
ness concern were a corporation; or
‘‘(B) satisfies the standard industrial classi-
fication size standards established by the Admin-
istrator of the Small Business Administration
for the industry in which the rural business con-
cern is primarily engaged.
‘‘SEC. 384B. PURPOSES.
‘‘The purposes of the Rural Business Investment Pro-
gram established under this subtitle are—
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‘‘(1) to promote economic development and the
creation of wealth and job opportunities in rural
areas and among individuals living in those areas by
encouraging developmental venture capital invest-
ments in smaller enterprises primarily located in
rural areas; and
‘‘(2) to establish a developmental venture capital
program, with the mission of addressing the unmet
equity investment needs of small enterprises located
in rural areas, by authorizing the Secretary—
‘‘(A) to enter into participation agreements
with Rural Business Investment Companies;
‘‘(B) to guarantee debentures of Rural Busi-
ness Investment Companies to enable each Rural
Business Investment Company to make develop-
mental venture capital investments in smaller
enterprises in rural areas; and
‘‘(C) to make grants to Rural Business In-
vestment Companies, and to other entities, for
the purpose of providing operational assistance
to smaller enterprises financed, or expected to be
financed, by Rural Business Investment Compa-
nies.
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‘‘SEC. 384C. ESTABLISHMENT.
‘‘In accordance with this subtitle, the Secretary shall
establish a Rural Business Investment Program, under
which the Secretary may—
‘‘(1) enter into participation agreements with
companies granted final approval under section
384D(d) for the purposes set forth in section 384B;
‘‘(2) guarantee the debentures issued by Rural
Business Investment Companies as provided in sec-
tion 384E; and
‘‘(3) make grants to Rural Business Investment
Companies, and to other entities, under section 384H.
‘‘SEC. 384D. SELECTION OF RURAL BUSINESS INVESTMENT
COMPANIES.
‘‘(a) ELIGIBILITY.—A company shall be eligible to
apply to participate, as a Rural Business Investment Com-
pany, in the program established under this subtitle if—
‘‘(1) the company is a newly formed for-profit
entity or a newly formed for-profit subsidiary of such
an entity;
‘‘(2) the company has a management team with
experience in community development financing or
relevant venture capital financing; and
‘‘(3) the company will invest in enterprises that
will create wealth and job opportunities in rural
areas, with an emphasis on smaller businesses.
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‘‘(b) APPLICATION.—To participate, as a Rural Busi-
ness Investment Company, in the program established
under this subtitle, a company meeting the eligibility re-
quirements of subsection (a) shall submit an application
to the Secretary that includes—
‘‘(1) a business plan describing how the company
intends to make successful developmental venture cap-
ital investments in identified rural areas;
‘‘(2) information regarding the community devel-
opment finance or relevant venture capital qualifica-
tions and general reputation of the management of
the company;
‘‘(3) a description of how the company intends
to work with community-based organizations and
local entities (including local economic development
companies, local lenders, and local investors) and to
seek to address the unmet equity capital needs of the
communities served;
‘‘(4) a proposal describing how the company in-
tends to use the grant funds provided under this sub-
title to provide operational assistance to smaller en-
terprises financed by the company, including infor-
mation regarding whether the company intends to use
licensed professionals, when necessary, on the staff of
the company or from an outside entity;
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‘‘(5) with respect to binding commitments to be
made to the company under this subtitle, an estimate
of the ratio of cash to in-kind contributions;
‘‘(6) a description of the criteria to be used to
evaluate whether and to what extent the company
meets the purposes of the program established under
this subtitle;
‘‘(7) information regarding the management and
financial strength of any parent firm, affiliated firm,
or any other firm essential to the success of the busi-
ness plan of the company; and
‘‘(8) such other information as the Secretary
may require.
‘‘(c) ISSUANCE OF LICENSE.—
‘‘(1) SUBMISSION OF APPLICATION.—Each appli-
cant for a license to operate as a Rural Business In-
vestment Company under this subtitle shall submit to
the Secretary an application, in a form and includ-
ing such documentation as may be prescribed by the
Secretary.
‘‘(2) PROCEDURES.—
‘‘(A) STATUS.—Not later than 90 days after
the initial receipt by the Secretary of an appli-
cation under this subsection, the Secretary shall
provide the applicant with a written report de-
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scribing the status of the application and any re-
quirements remaining for completion of the ap-
plication.
‘‘(B) APPROVAL OR DISAPPROVAL.—Within
a reasonable time after receiving a completed ap-
plication submitted in accordance with this sub-
section and in accordance with such require-
ments as the Secretary may prescribe by regula-
tion, the Secretary shall—
‘‘(i) approve the application and issue
a license for the operation to the applicant,
if the requirements of this section are satis-
fied; or
‘‘(ii) disapprove the application and
notify the applicant in writing of the dis-
approval.
‘‘(3) MATTERS CONSIDERED.—In reviewing and
processing any application under this subsection, the
Secretary—
‘‘(A) shall determine whether—
‘‘(i) the applicant meets the require-
ments of subsection (d); and
‘‘(ii) the management of the applicant
is qualified and has the knowledge, experi-
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ence, and capability necessary to comply
with this subtitle;
‘‘(B) shall take into consideration—
‘‘(i) the need for and availability of fi-
nancing for rural business concerns in the
geographic area in which the applicant is to
commence business;
‘‘(ii) the general business reputation of
the owners and management of the appli-
cant; and
‘‘(iii) the probability of successful oper-
ations of the applicant, including adequate
profitability and financial soundness; and
‘‘(C) shall not take into consideration any
projected shortage or unavailability of grant
funds or leverage.
‘‘(d) APPROVAL; DESIGNATION.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the Secretary may approve an applicant
to operate as a Rural Business Investment Company
under this subtitle and designate the applicant as a
Rural Business Investment Company, if—
‘‘(A) the Secretary determines that the ap-
plication satisfies the requirements of subsection
(b);
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‘‘(B) the area in which the Rural Business
Investment Company is to conduct its oper-
ations, and establishment of branch offices or
agencies (if authorized by the articles), are ap-
proved by the Secretary; and
‘‘(C) the applicant enters into a participa-
tion agreement with the Secretary.
‘‘(2) CAPITAL REQUIREMENTS.—
‘‘(A) IN
GENERAL.—Notwithstanding any
other provision of this subtitle, the Secretary
may approve an applicant to operate as a Rural
Business Investment Company under this sub-
title and designate the applicant as a Rural
Business Investment Company, if the Secretary
determines that the applicant—
‘‘(i) has private capital of less than
$2,500,000;
‘‘(ii) would otherwise be approved
under this subtitle, except that the applicant
does not satisfy the requirements of section
384I(c); and
‘‘(iii) has a viable business plan that
reasonably projects profitable operations
and that has a reasonable timetable for
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achieving a level of private capital that sat-
isfies the requirements of section 384I(c).
‘‘(B) LEVERAGE.—An applicant approved
under subparagraph (A) shall not be eligible to
receive leverage under this subtitle until the ap-
plicant satisfies the requirements of section
384I(c).
‘‘(C) GRANTS.—An applicant approved
under subparagraph (A) shall be eligible for
grants under section 384H in proportion to the
private capital of the applicant, as determined
by the Secretary.
‘‘SEC. 384E. DEBENTURES.
‘‘(a) IN GENERAL.—The Secretary may guarantee the
timely payment of principal and interest, as scheduled, on
debentures issued by any Rural Business Investment Com-
pany.
‘‘(b) TERMS AND CONDITIONS.—The Secretary may
make guarantees under this section on such terms and con-
ditions as the Secretary considers appropriate, except that
the term of any debenture guaranteed under this section
shall not exceed 15 years.
‘‘(c) FULL FAITH
AND CREDIT
OF
THE UNITED
STATES.—Section 381H(i) shall apply to any guarantee
under this section.
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‘‘(d) MAXIMUM GUARANTEE.—Under this section, the
Secretary may—
‘‘(1) guarantee the debentures issued by a Rural
Business Investment Company only to the extent that
the total face amount of outstanding guaranteed de-
bentures of the Rural Business Investment Company
does not exceed the lesser of—
‘‘(A) 300 percent of the private capital of
the Rural Business Investment Company; or
‘‘(B) $105,000,000; and
‘‘(2) provide for the use of discounted debentures.
‘‘SEC. 384F. ISSUANCE AND GUARANTEE OF TRUST CERTIFI-
CATES.
‘‘(a) ISSUANCE.—The Secretary may issue trust cer-
tificates representing ownership of all or a fractional part
of debentures issued by a Rural Business Investment Com-
pany and guaranteed by the Secretary under this subtitle,
if the certificates are based on and backed by a trust or
pool approved by the Secretary and composed solely of
guaranteed debentures.
‘‘(b) GUARANTEE.—
‘‘(1) IN GENERAL.—The Secretary may, under
such terms and conditions as the Secretary considers
appropriate, guarantee the timely payment of the
principal of and interest on trust certificates issued
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by the Secretary or agents of the Secretary for pur-
poses of this section.
‘‘(2) LIMITATION.—Each guarantee under this
subsection shall be limited to the extent of principal
and interest on the guaranteed debentures that com-
pose the trust or pool.
‘‘(3) PREPAYMENT OR DEFAULT.—
‘‘(A) IN GENERAL.—In the event a deben-
ture in a trust or pool is prepaid, or in the event
of default of such a debenture, the guarantee of
timely payment of principal and interest on the
trust certificates shall be reduced in proportion
to the amount of principal and interest the pre-
paid debenture represents in the trust or pool.
‘‘(B) INTEREST.—Interest on prepaid or de-
faulted debentures shall accrue and be guaran-
teed by the Secretary only through the date of
payment of the guarantee.
‘‘(C) REDEMPTION.—At any time during its
term, a trust certificate may be called for re-
demption due to prepayment or default of all de-
bentures.
‘‘(c) FULL FAITH
AND CREDIT
OF
THE UNITED
STATES.—Section 381H(i) shall apply to any guarantee of
a trust certificate issued by the Secretary under this section.
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‘‘(d) SUBROGATION AND OWNERSHIP RIGHTS.—
‘‘(1) SUBROGATION.—If the Secretary pays a
claim under a guarantee issued under this section, the
claim shall be subrogated fully to the rights satisfied
by the payment.
‘‘(2) OWNERSHIP RIGHTS.—No Federal, State, or
local law shall preclude or limit the exercise by the
Secretary of the ownership rights of the Secretary in
a debenture residing in a trust or pool against which
1 or more trust certificates are issued under this sec-
tion.
‘‘(e) MANAGEMENT AND ADMINISTRATION.—
‘‘(1) REGISTRATION.—The Secretary shall pro-
vide for a central registration of all trust certificates
issued under this section.
‘‘(2) 
CREATION
OF
POOLS.—The 
Secretary
may—
‘‘(A) maintain such commercial bank ac-
counts or investments in obligations of the
United States as may be necessary to facilitate
the creation of trusts or pools backed by deben-
tures guaranteed under this subtitle; and
‘‘(B) issue trust certificates to facilitate the
creation of those trusts or pools.
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‘‘(3) FIDELITY BOND OR INSURANCE REQUIRE-
MENT.—Any agent performing functions on behalf of
the Secretary under this paragraph shall provide a fi-
delity bond or insurance in such amount as the Sec-
retary considers to be necessary to fully protect the
interests of the United States.
‘‘(4) REGULATION OF BROKERS AND DEALERS.—
The Secretary may regulate brokers and dealers in
trust certificates issued under this section.
‘‘(5) ELECTRONIC
REGISTRATION.—Nothing in
this subsection prohibits the use of a book-entry or
other electronic form of registration for trust certifi-
cates issued under this section.
‘‘SEC. 384G. FEES.
‘‘(a) IN GENERAL.—The Secretary may charge such
fees as the Secretary considers appropriate with respect to
any guarantee or grant issued under this subtitle.
‘‘(b) TRUST
CERTIFICATE.—Notwithstanding sub-
section (a), the Secretary shall not collect a fee for any guar-
antee of a trust certificate under section 384F, except that
any agent of the Secretary may collect a fee approved by
the Secretary for the functions described in section
384F(e)(2).
‘‘(c) LICENSE.—
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‘‘(1) IN GENERAL.—The Secretary may prescribe
fees to be paid by each applicant for a license to oper-
ate as a Rural Business Investment Company under
this subtitle.
‘‘(2) USE
OF
AMOUNTS.—Fees collected under
this subsection—
‘‘(A) shall be deposited in the account for
salaries and expenses of the Secretary; and
‘‘(B) are authorized to be appropriated sole-
ly to cover the costs of licensing examinations.
‘‘SEC. 384H. OPERATIONAL ASSISTANCE GRANTS.
‘‘(a) IN GENERAL.—In accordance with this section,
the Secretary may make grants to Rural Business Invest-
ment Companies and to other entities, as authorized by this
subtitle, to provide operational assistance to smaller enter-
prises financed, or expected to be financed, by the entities.
‘‘(b) TERMS.—Grants made under this section shall be
made over a multiyear period (not to exceed 10 years)
under such other terms as the Secretary may require.
‘‘(c) USE OF FUNDS.—The proceeds of a grant made
under this section may be used by the Rural Business In-
vestment Company receiving the grant only to provide oper-
ational assistance in connection with an equity or prospec-
tive equity investment in a business located in a rural area.
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‘‘(d) SUBMISSION OF PLANS.—A Rural Business In-
vestment Company shall be eligible for a grant under this
section only if the Rural Business Investment Company
submits to the Secretary, in such form and manner as the
Secretary may require, a plan for use of the grant.
‘‘(e) GRANT AMOUNT.—
‘‘(1) RURAL
BUSINESS
INVESTMENT
COMPA-
NIES.—The amount of a grant made under this sec-
tion to a Rural Business Investment Company shall
be equal to the lesser of—
‘‘(A) 10 percent of the private capital raised
by the Rural Business Investment Company; or
‘‘(B) $1,000,000.
‘‘(2) OTHER ENTITIES.—The amount of a grant
made under this section to any entity other than a
Rural Business Investment Company shall be equal to
the resources (in cash or in kind) raised by the entity
in accordance with the requirements applicable to
Rural Business Investment Companies under this
subtitle.
‘‘SEC. 384I. RURAL BUSINESS INVESTMENT COMPANIES.
‘‘(a) ORGANIZATION.—For the purpose of this subtitle,
a Rural Business Investment Company shall—
‘‘(1) be an incorporated body, a limited liability
company, or a limited partnership organized and
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chartered or otherwise existing under State law solely
for the purpose of performing the functions and con-
ducting the activities authorized by this subtitle;
‘‘(2)(A) if incorporated, have succession for a pe-
riod of not less than 30 years unless earlier dissolved
by the shareholders of the Rural Business Investment
Company; and
‘‘(B) if a limited partnership or a limited liabil-
ity company, have succession for a period of not less
than 10 years; and
‘‘(3) possess the powers reasonably necessary to
perform the functions and conduct the activities.
‘‘(b) ARTICLES.—The articles of any Rural Business
Investment Company—
‘‘(1) shall specify in general terms—
‘‘(A) the purposes for which the Rural Busi-
ness Investment Company is formed;
‘‘(B) the name of the Rural Business Invest-
ment Company;
‘‘(C) the area or areas in which the oper-
ations of the Rural Business Investment Com-
pany are to be carried out;
‘‘(D) the place where the principal office of
the Rural Business Investment Company is to be
located; and
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‘‘(E) the amount and classes of the shares of
capital stock of the Rural Business Investment
Company;
‘‘(2) may contain any other provisions consistent
with this subtitle that the Rural Business Investment
Company may determine appropriate to adopt for the
regulation of the business of the Rural Business In-
vestment Company and the conduct of the affairs of
the Rural Business Investment Company; and
‘‘(3) shall be subject to the approval of the Sec-
retary.
‘‘(c) CAPITAL REQUIREMENTS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the private capital of each Rural Business
Investment Company shall be not less than—
‘‘(A) $5,000,000; or
‘‘(B) $10,000,000, with respect to each
Rural Business Investment Company authorized
or seeking authority to issue participating secu-
rities to be purchased or guaranteed by the Sec-
retary under this subtitle.
‘‘(2) EXCEPTION.—The Secretary may, in the
discretion of the Secretary and based on a showing of
special circumstances and good cause, permit the pri-
vate capital of a Rural Business Investment Com-
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pany described in paragraph (1)(B) to be less than
$10,000,000, but not less than $5,000,000, if the Sec-
retary determines that the action would not create or
otherwise contribute to an unreasonable risk of default
or loss to the Federal Government.
‘‘(3) ADEQUACY.—In addition to the require-
ments of paragraph (1), the Secretary shall—
‘‘(A) determine whether the private capital
of each Rural Business Investment Company is
adequate to ensure a reasonable prospect that the
Rural Business Investment Company will be op-
erated soundly and profitably, and managed ac-
tively and prudently in accordance with the ar-
ticles of the Rural Business Investment Com-
pany;
‘‘(B) determine that the Rural Business In-
vestment Company will be able to comply with
the requirements of this subtitle;
‘‘(C) require that at least 75 percent of the
capital of each Rural Business Investment Com-
pany is invested in rural business concerns and
not more than 10 percent of the investments shall
be made in an area containing a city of over
100,000 in the last decennial census and the
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Census Bureau defined urbanized area con-
taining or adjacent to that city;
‘‘(D) ensure that the Rural Business Invest-
ment Company is designed primarily to meet eq-
uity capital needs of the businesses in which the
Rural Business Investment Company invests and
not to compete with traditional small business fi-
nancing by commercial lenders; and
‘‘(E) require that the Rural Business In-
vestment Company makes short-term non-equity
investments of less than 5 years only to the ex-
tent necessary to preserve an existing investment.
‘‘(d) DIVERSIFICATION OF OWNERSHIP.—The Sec-
retary shall ensure that the management of each Rural
Business Investment Company licensed after the date of
enactment of this subtitle is sufficiently diversified from
and unaffiliated with the ownership of the Rural Business
Investment Company so as to ensure independence and ob-
jectivity in the financial management and oversight of the
investments and operations of the Rural Business Invest-
ment Company.
‘‘SEC. 384J. FINANCIAL INSTITUTION INVESTMENTS.
‘‘(a) IN GENERAL.—Except as otherwise provided in
this section and notwithstanding any other provision of
law, the following banks, associations, and institutions are
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eligible both to establish and invest in any Rural Business
Investment Company or in any entity established to invest
solely in Rural Business Investment Companies:
‘‘(1) Any bank or savings association the depos-
its of which are insured under the Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.)
‘‘(2) Any Farm Credit System institution de-
scribed in section 1.2(a) of the Farm Credit Act of
1971 (12 U.S.C. 2002(a)).
‘‘(b) LIMITATION.—No bank, association, or institu-
tion described in subsection (a) may make investments de-
scribed in subsection (a) that are greater than 5 percent
of the capital and surplus of the bank, association, or insti-
tution.
‘‘(c) LIMITATION ON RURAL BUSINESS INVESTMENT
COMPANIES CONTROLLED BY FARM CREDIT SYSTEM INSTI-
TUTIONS.—If a Farm Credit System institution described
in section 1.2(a) of the Farm Credit Act of 1971 (12 U.S.C.
2002(a)) holds more than 15 percent of the shares of a
Rural Business Investment Company, either alone or in
conjunction with other System institutions (or affiliates),
the Rural Business Investment Company shall not provide
equity investments in, or provide other financial assistance
to, entities that are not otherwise eligible to receive financ-
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ing from the Farm Credit System under that Act (12 U.S.C.
2001 et seq.).
‘‘SEC. 384K. REPORTING REQUIREMENTS.
‘‘(a) RURAL BUSINESS INVESTMENT COMPANIES.—
Each Rural Business Investment Company that partici-
pates in the program established under this subtitle shall
provide to the Secretary such information as the Secretary
may require, including—
‘‘(1) information relating to the measurement
criteria that the Rural Business Investment Company
proposed in the program application of the Rural
Business Investment Company; and
‘‘(2) in each case in which the Rural Business
Investment Company under this subtitle makes an in-
vestment in, or a loan or grant to, a business that is
not located in a rural area, a report on the number
and percentage of employees of the business who reside
in those areas.
‘‘(b) PUBLIC REPORTS.—
‘‘(1) IN GENERAL.—The Secretary shall prepare
and make available to the public an annual report on
the program established under this subtitle, including
detailed information on—
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‘‘(A) the number of Rural Business Invest-
ment Companies licensed by the Secretary dur-
ing the previous fiscal year;
‘‘(B) the aggregate amount of leverage that
Rural Business Investment Companies have re-
ceived from the Federal Government during the
previous fiscal year;
‘‘(C) the aggregate number of each type of
leveraged instruments used by Rural Business
Investment Companies during the previous fiscal
year and how each number compares to previous
fiscal years;
‘‘(D) the number of Rural Business Invest-
ment Company licenses surrendered and the
number of Rural Business Investment Compa-
nies placed in liquidation during the previous
fiscal year, identifying the amount of leverage
each Rural Business Investment Company has
received from the Federal Government and the
type of leverage instruments each Rural Business
Investment Company has used;
‘‘(E) the amount of losses sustained by the
Federal Government as a result of operations
under this subtitle during the previous fiscal
year and an estimate of the total losses that the
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Federal Government can reasonably expect to
incur as a result of the operations during the
current fiscal year;
‘‘(F) actions taken by the Secretary to
maximize recoupment of funds of the Federal
Government incurred to implement and admin-
ister the Rural Business Investment Program
under this subtitle during the previous fiscal
year and to ensure compliance with the require-
ments of this subtitle (including regulations);
‘‘(G) the amount of Federal Government le-
verage that each licensee received in the previous
fiscal year and the types of leverage instruments
each licensee used;
‘‘(H) for each type of financing instrument,
the sizes, types of geographic locations, and other
characteristics of the small business investment
companies using the instrument during the pre-
vious fiscal year, including the extent to which
the investment companies have used the leverage
from each instrument to make loans or equity
investments in rural areas; and
‘‘(I) the actions of the Secretary to carry
out this subtitle.
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‘‘(2) PROHIBITION.—In compiling the report re-
quired under paragraph (1), the Secretary may not—
‘‘(A) compile the report in a manner that
permits identification of any particular type of
investment by an individual Rural Business In-
vestment Company or small business concern in
which a Rural Business Investment Company
invests; and
‘‘(B) may not release any information that
is prohibited under section 1905 of title 18,
United States Code.
‘‘SEC. 384L. EXAMINATIONS.
‘‘(a) IN GENERAL.—Each Rural Business Investment
Company that participates in the program established
under this subtitle shall be subject to examinations made
at the direction of the Secretary in accordance with this
section.
‘‘(b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—An
examination under this section may be conducted with the
assistance of a private sector entity that has the qualifica-
tions and the expertise necessary to conduct such an exam-
ination.
‘‘(c) COSTS.—
‘‘(1) IN GENERAL.—The Secretary may assess the
cost of an examination under this section, including
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compensation of the examiners, against the Rural
Business Investment Company examined.
‘‘(2) PAYMENT.—Any Rural Business Investment
Company against which the Secretary assesses costs
under this paragraph shall pay the costs.
‘‘(d) DEPOSIT OF FUNDS.—Funds collected under this
section shall—
‘‘(1) be deposited in the account that incurred
the costs for carrying out this section;
‘‘(2) be made available to the Secretary to carry
out this section, without further appropriation; and
‘‘(3) remain available until expended.
‘‘SEC. 384M. INJUNCTIONS AND OTHER ORDERS.
‘‘(a) IN GENERAL.—
‘‘(1) APPLICATION
BY
SECRETARY.—Whenever,
in the judgment of the Secretary, a Rural Business
Investment Company or any other person has engaged
or is about to engage in any act or practice that con-
stitutes or will constitute a violation of a provision
of this subtitle (including any rule, regulation, order,
or participation agreement under this subtitle), the
Secretary may apply to the appropriate district court
of the United States for an order enjoining the act or
practice, or for an order enforcing compliance with
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the provision, rule, regulation, order, or participation
agreement.
‘‘(2) JURISDICTION; RELIEF.—The court shall
have jurisdiction over the action and, on a showing
by the Secretary that the Rural Business Investment
Company or other person has engaged or is about to
engage in an act or practice described in paragraph
(1), a permanent or temporary injunction, restrain-
ing order, or other order, shall be granted without
bond.
‘‘(b) JURISDICTION.—
‘‘(1) IN
GENERAL.—In any proceeding under
subsection (a), the court as a court of equity may, to
such extent as the court considers necessary, take ex-
clusive jurisdiction over the Rural Business Invest-
ment Company and the assets of the Rural Business
Investment Company, wherever located.
‘‘(2) TRUSTEE OR RECEIVER.—The court shall
have jurisdiction in any proceeding described in
paragraph (1) to appoint a trustee or receiver to hold
or administer the assets.
‘‘(c) SECRETARY AS TRUSTEE OR RECEIVER.—
‘‘(1) AUTHORITY.—The Secretary may act as
trustee or receiver of a Rural Business Investment
Company.
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‘‘(2) APPOINTMENT.—On the request of the Sec-
retary, the court shall appoint the Secretary to act as
a trustee or receiver of a Rural Business Investment
Company unless the court considers the appointment
inequitable or otherwise inappropriate by reason of
any special circumstances involved.
‘‘SEC. 384N. ADDITIONAL PENALTIES FOR NONCOMPLI-
ANCE.
‘‘(a) IN GENERAL.—With respect to any Rural Busi-
ness Investment Company that violates or fails to comply
with this subtitle (including any rule, regulation, order, or
participation agreement under this subtitle), the Secretary
may, in accordance with this section—
‘‘(1) void the participation agreement between
the Secretary and the Rural Business Investment
Company; and
‘‘(2) cause the Rural Business Investment Com-
pany to forfeit all of the rights and privileges derived
by the Rural Business Investment Company under
this subtitle.
‘‘(b) ADJUDICATION OF NONCOMPLIANCE.—
‘‘(1) IN
GENERAL.—Before the Secretary may
cause a Rural Business Investment Company to for-
feit rights or privileges under subsection (a), a court
of the United States of competent jurisdiction must
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find that the Rural Business Investment Company
committed a violation, or failed to comply, in a cause
of action brought for that purpose in the district, ter-
ritory, or other place subject to the jurisdiction of the
United States, in which the principal office of the
Rural Business Investment Company is located.
‘‘(2) PARTIES AUTHORIZED TO FILE CAUSES OF
ACTION.—Each cause of action brought by the United
States under this subsection shall be brought by the
Secretary or by the Attorney General.
‘‘SEC. 384O. UNLAWFUL ACTS AND OMISSIONS; BREACH OF
FIDUCIARY DUTY.
‘‘(a) PARTIES DEEMED TO COMMIT A VIOLATION.—
Whenever any Rural Business Investment Company vio-
lates this subtitle (including any rule, regulation, order, or
participation agreement under this subtitle), by reason of
the failure of the Rural Business Investment Company to
comply with this subtitle or by reason of its engaging in
any act or practice that constitutes or will constitute a vio-
lation of this subtitle, the violation shall also be deemed to
be a violation and an unlawful act committed by any per-
son that, directly or indirectly, authorizes, orders, partici-
pates in, causes, brings about, counsels, aids, or abets in
the commission of any acts, practices, or transactions that
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constitute or will constitute, in whole or in part, the viola-
tion.
‘‘(b) FIDUCIARY DUTIES.—It shall be unlawful for any
officer, director, employee, agent, or other participant in
the management or conduct of the affairs of a Rural Busi-
ness Investment Company to engage in any act or practice,
or to omit any act or practice, in breach of the fiduciary
duty of the officer, director, employee, agent, or participant
if, as a result of the act or practice, the Rural Business
Investment Company suffers or is in imminent danger of
suffering financial loss or other damage.
‘‘(c) UNLAWFUL ACTS.—Except with the written con-
sent of the Secretary, it shall be unlawful—
‘‘(1) for any person to take office as an officer,
director, or employee of any Rural Business Invest-
ment Company, or to become an agent or participant
in the conduct of the affairs or management of a
Rural Business Investment Company, if the person—
‘‘(A) has been convicted of a felony, or any
other criminal offense involving dishonesty or
breach of trust; or
‘‘(B) has been found civilly liable in dam-
ages, or has been permanently or temporarily en-
joined by an order, judgment, or decree of a
court of competent jurisdiction, by reason of any
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act or practice involving fraud, or breach of
trust; and
‘‘(2) for any person to continue to serve in any
of the capacities described in paragraph (1), if—
‘‘(A) the person is convicted of a felony, or
any other criminal offense involving dishonesty
or breach of trust; or
‘‘(B) the person is found civilly liable in
damages, or is permanently or temporarily en-
joined by an order, judgment, or decree of a
court of competent jurisdiction, by reason of any
act or practice involving fraud or breach of
trust.
‘‘SEC. 384P. REMOVAL OR SUSPENSION OF DIRECTORS OR
OFFICERS.
‘‘Using the procedures established by the Secretary for
removing or suspending a director or an officer of a Rural
Business Investment Company, the Secretary may remove
or suspend any director or officer of any Rural Business
Investment Company.
‘‘SEC. 384Q. CONTRACTING OF FUNCTIONS.
‘‘Notwithstanding any other provision of law, the Sec-
retary shall enter into an interagency agreement with the
Administrator of the Small Business Administration to
carry out, on behalf of the Secretary, the day-to-day man-
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agement and operation of the program authorized by this
subtitle.
‘‘SEC. 384R. REGULATIONS.
‘‘The Secretary may promulgate such regulations as
the Secretary considers necessary to carry out this subtitle.
‘‘SEC. 384S. FUNDING.
‘‘(a) IN GENERAL.—Not later than 30 days after the
date of enactment of this Act, out of any funds in the Treas-
ury not otherwise appropriated, the Secretary of the Treas-
ury shall transfer to the Secretary of Agriculture—
‘‘(1) such sums as may be necessary for the cost
of guaranteeing $350,000,000 of debentures under this
subtitle; and
‘‘(2) $50,000,000 to make grants under this sub-
title.
‘‘(b) RECEIPT AND ACCEPTANCE.—The Secretary shall
be entitled to receive, shall accept, and shall use to carry
out this section the funds transferred under subsection (a),
without further appropriation.
‘‘(c) AVAILABILITY
OF FUNDS.—Funds transferred
under subsection (a) shall remain available until ex-
pended.’’.
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SEC. 603. FULL FUNDING OF PENDING RURAL DEVELOP-
MENT LOAN AND GRANT APPLICATIONS.
(a) DEFINITION OF APPLICATION.—In this section, the
term ‘‘application’’ does not include an application for a
loan, loan guarantee, or grant that, as of the date of enact-
ment of this Act, is in the preapplication phase of consider-
ation under regulations of the Secretary of Agriculture in
effect on the date of enactment of this Act.
(b) ACCOUNT.—There is established in the Treasury of
the United States an account to be known as the ‘‘Rural
America Infrastructure Development Account’’ (referred to
in this section as the ‘‘Account’’) to fund rural development
loans, loan guarantees, and grants described in subsection
(d) that are pending on the date of enactment of this Act.
(c) FUNDING.—
(1) IN GENERAL.—Not later than 30 days after
the date of enactment of this Act, out of any funds in
the Treasury not otherwise appropriated, the Sec-
retary of the Treasury shall transfer to the Secretary
of Agriculture such sums as are necessary to carry
out this section, to remain available until expended.
(2) RECEIPT AND ACCEPTANCE.—The Secretary
shall be entitled to receive, shall accept, and shall use
to carry out this section the funds transferred under
paragraph (1), without further appropriation.
(d) USE OF FUNDS.—
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(1) ELIGIBLE PROGRAMS.—Subject to paragraph
(2), the Secretary shall use the funds in the Account
to provide funds for applications that are pending on
the date of enactment of this Act for—
(A) community facility direct loans under
section 306(a)(1) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926(a)(1));
(B) community facility grants under para-
graph (19), (20), or (21) of section 306(a) of that
Act (7 U.S.C. 1926(a));
(C) water or waste disposal grants or direct
loans under paragraph (1) or (2) of section
306(a) of that Act (7 U.S.C. 1926(a));
(D) rural water or wastewater technical as-
sistance and training grants under section
306(a)(14) of that Act (7 U.S.C. 1926(a)(14));
(E) emergency community water assistance
grants under section 306A of that Act (7 U.S.C.
1926a);
(F) business and industry guaranteed loans
authorized under section 310B(a)(1)(A) of that
Act (7 U.S.C. 1932(a)(1)(A)); and
(G) solid waste management grants under
section 310B(b) of that Act (7 U.S.C. 1932(b)).
(2) LIMITATIONS.—
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(A) APPROPRIATED
AMOUNTS.—Funds in
the Account shall be available to the Secretary to
provide funds for pending applications for loans,
loan guarantees, and grants described in para-
graph (1) only to the extent that funds for the
loans, loan guarantees, and grants appropriated
in the annual appropriations Act for fiscal year
2002 have been exhausted.
(B) PROGRAM
REQUIREMENTS.—The Sec-
retary may use the Account to provide funds for
a pending application for a loan, loan guar-
antee, or grant described in paragraph (1) only
if the Secretary processes, reviews, and approves
the application in accordance with regulations
in effect on the date of enactment of this Act.
SEC. 604. RURAL ENDOWMENT PROGRAM.
(a) IN GENERAL.—The Consolidated Farm and Rural
Development Act (7 U.S.C. 1921 et seq.) (as amended by
section 602) is amended by adding at the end the following:
‘‘Subtitle I—Rural Endowment
Program
‘‘SEC. 385A. PURPOSE.
‘‘The purpose of this subtitle is to provide rural com-
munities with technical and financial assistance to imple-
ment comprehensive community development strategies to
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reduce the economic and social distress resulting from pov-
erty, high unemployment, outmigration, plant closings, ag-
ricultural downturn, declines in the natural resource-based
economy, or environmental degradation.
‘‘SEC. 385B. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) COMPREHENSIVE
COMMUNITY
DEVELOP-
MENT STRATEGY.—The term ‘comprehensive commu-
nity development strategy’ means a community devel-
opment strategy described in section 385C(e).
‘‘(2) ELIGIBLE RURAL AREA.—
‘‘(A) IN GENERAL.—The term ‘eligible rural
area’ means an area with a population of 25,000
inhabitants or less, as determined by the Sec-
retary using the most recent decennial census.
‘‘(B) EXCLUSIONS.—The term ‘eligible rural
area’ does not include—
‘‘(i) any area designated by the Sec-
retary as a rural empowerment zone or
rural enterprise community; or
‘‘(ii) an urbanized area immediately
adjacent to an incorporated city or town
with a population of more than 25,000 in-
habitants.
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‘‘(3) ENDOWMENT FUND.—The term ‘endowment
fund’ means a long-term fund that an approved pro-
gram entity is required to establish under section
385C(f)(3).
‘‘(4) PERFORMANCE-BASED BENCHMARKS.—The
term ‘performance-based benchmarks’ means a set of
annualized goals and tasks established by a recipient
of a grant under the Program, in collaboration with
the Secretary, for the purpose of measuring perform-
ance in meeting the comprehensive community devel-
opment strategy of the recipient.
‘‘(5) PROGRAM.—The term ‘Program’ means the
Rural Endowment Program established under section
385C(a).
‘‘(6) PROGRAM ENTITY.—The term ‘program en-
tity’ means—
‘‘(A) a private nonprofit community-based
development organization;
‘‘(B) a unit of local government (including
a multijurisdictional unit of local government);
‘‘(C) an Indian tribe (as defined in section
4 of the Indian Self-Determination and Edu-
cation Assistance Act (25 U.S.C. 450b));
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‘‘(D) a consortium comprised of an organi-
zation described in subparagraph (A) and a unit
of local government; or
‘‘(E) a consortium of entities specified in
subparagraphs (A) through (D);
that serves an eligible rural area.
‘‘(7) 
PROGRAM-RELATED
INVESTMENT.—The
term ‘program-related investment’ means—
‘‘(A) a loan, loan guarantee, grant, pay-
ment of a technical fee, or other expenditure pro-
vided for an affordable housing, community fa-
cility, small business, environmental improve-
ment, or other community development project
that is part of a comprehensive community de-
velopment strategy; and
‘‘(B) support services relating to a project
described in subparagraph (A).
‘‘SEC. 385C. RURAL ENDOWMENT PROGRAM.
‘‘(a) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—The Secretary may establish
a program, to be known as the ‘Rural Endowment
Program’, to provide approved program entities with
assistance in developing and implementing com-
prehensive community development strategies for eli-
gible rural areas.
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‘‘(2) PURPOSES.—The purposes of the Program
are—
‘‘(A) to enhance the ability of an eligible
rural area to engage in comprehensive commu-
nity development;
‘‘(B) to leverage private and public re-
sources for the benefit of community development
efforts in eligible rural areas;
‘‘(C) to make available staff of Federal
agencies to directly assist the community devel-
opment efforts of an approved program entity or
eligible rural area; and
‘‘(D) to strengthen the asset base of an eligi-
ble rural area to further long-term, ongoing com-
munity development.
‘‘(b) APPLICATIONS.—
‘‘(1) IN
GENERAL.—To receive an endowment
grant under the Program, the eligible entity shall sub-
mit an application at such time, in such form, and
containing such information as the Secretary may re-
quire.
‘‘(2) REGIONAL APPLICATIONS.—
‘‘(A) IN GENERAL.—Where appropriate, the
Secretary shall encourage regional applications
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from program entities serving more than 1 eligi-
ble rural area.
‘‘(B) CRITERIA FOR APPLICATIONS.—To be
eligible for an endowment grant for a regional
application, the program entities that submit the
application shall demonstrate that—
‘‘(i) a comprehensive community devel-
opment strategy for the eligible rural areas
is best accomplished through a regional ap-
proach; and
‘‘(ii) the combined population of the el-
igible rural areas covered by the comprehen-
sive community development strategy is
75,000 inhabitants or less.
‘‘(C) WAIVER
FOR
INDIAN
TRIBES.—The
Secretary may, at the request of an Indian tribe,
waive the requirement under subparagraph
(B)(ii) with respect to an application submitted
by the Indian tribe for multiple eligible rural
areas under the jurisdiction of the Indian tribe.
‘‘(D) AMOUNT OF ENDOWMENT GRANTS.—
For the purpose of subsection (f)(2), 2 or more
program entities that submit a regional applica-
tion shall be considered to be a single program
entity.
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‘‘(3) PREFERENCE.—The Secretary shall give
preference to a joint application submitted by a pri-
vate, nonprofit community development corporation
and a unit of local government or Indian tribe.
‘‘(c) ENTITY APPROVAL.—The Secretary shall approve
a program entity to receive grants under the Program, if
the program entity meets criteria established by the Sec-
retary, including the following:
‘‘(1) DISTRESSED RURAL AREA.—The program
entity shall serve a rural area that suffers from eco-
nomic or social distress resulting from poverty, high
unemployment, outmigration, plant closings, agricul-
tural downturn, declines in the natural resource-based
economy, or environmental degradation.
‘‘(2) CAPACITY TO IMPLEMENT STRATEGY.—The
program entity shall demonstrate the capacity to im-
plement a comprehensive community development
strategy.
‘‘(3) GOALS.—The goals described in the applica-
tion submitted under subsection (b) shall be consistent
with this section.
‘‘(4) PARTICIPATION
PROCESS.—The program
entity shall demonstrate the ability to convene and
maintain a multi-stakeholder, community-based par-
ticipation process.
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‘‘(d) PLANNING
GRANTS
TO
CONDITIONALLY
AP-
PROVED PROGRAM ENTITIES.—
‘‘(1) IN GENERAL.—The Secretary may award
supplemental grants to approved program entities to
assist the approved program entities in the develop-
ment of a comprehensive community development
strategy under subsection (e).
‘‘(2) 
ELIGIBILITY
FOR
SUPPLEMENTAL
GRANTS.—In determining whether to award a supple-
mental grant to an approved program entity, the Sec-
retary shall consider the economic need of the ap-
proved program entity.
‘‘(3) LIMITATIONS
ON
AMOUNT
OF
GRANTS.—
Under this subsection, an approved program entity
may receive a supplemental grant in an amount of—
‘‘(A) not more than $100,000; or
‘‘(B) in the case of a regional application
approved under a waiver by the Secretary under
subsection (b)(2)(C), not more than $200,000.
‘‘(e) ENDOWMENT GRANT AWARD.—
‘‘(1) IN GENERAL.—To be eligible for an endow-
ment grant under the Program, an approved program
entity shall develop, and obtain the approval of the
Secretary for, a comprehensive community develop-
ment strategy that—
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‘‘(A) is designed to reduce economic or so-
cial distress resulting from poverty, high unem-
ployment, outmigration, plant closings, agricul-
tural downturn, declines in the natural resource-
based economy, or environmental degradation;
‘‘(B) addresses a broad range of the develop-
ment needs of a community, including economic,
social, and environmental needs, for a period of
not less than 10 years;
‘‘(C) is developed with input from a broad
array of local governments and business, civic,
and community organizations;
‘‘(D) 
specifies 
measurable 
performance-
based outcomes for all activities; and
‘‘(E) includes a financial plan for achieving
the outcomes and activities of the comprehensive
community development strategy that identifies
sources for, or a plan to meet, the requirement
for a non-Federal share under subsection
(f)(4)(B).
‘‘(2) FINAL APPROVAL.—
‘‘(A) IN GENERAL.—An approved program
entity shall receive final approval if the Sec-
retary determines that—
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‘‘(i) the comprehensive community de-
velopment strategy of the approved program
entity meets the requirements of this section;
‘‘(ii) the management and organiza-
tional structure of the approved program
entity is sufficient to oversee fund and de-
velopment activities;
‘‘(iii) the approved program entity has
established an endowment fund; and
‘‘(iv) the approved program entity will
be able to provide the non-Federal share re-
quired under subsection (f)(4)(B).
‘‘(B) CONDITIONS.—As part of the final ap-
proval, the approved program entity shall agree
to—
‘‘(i) achieve, to the maximum extent
practicable, performance-based benchmarks;
and
‘‘(ii) comply with the terms of the com-
prehensive community development strategy
for a period of not less than 10 years.
‘‘(f) ENDOWMENT GRANTS.—
‘‘(1) IN GENERAL.—Under the Program, the Sec-
retary may make endowment grants to approved pro-
gram entities with final approval to implement an
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approved 
comprehensive 
community 
development
strategy.
‘‘(2) AMOUNT OF GRANTS.—An endowment grant
to an approved program entity shall be in an amount
of not more than $6,000,000, as determined by the
Secretary based on—
‘‘(A) the size of the population of the eligible
rural area for which the endowment grant is to
be used;
‘‘(B) the size of the eligible rural area for
which the endowment grant is to be used;
‘‘(C) the extent of the comprehensive com-
munity development strategy to be implemented
using the endowment grant award; and
‘‘(D) the extent to which the community suf-
fers from economic or social distress resulting
from—
‘‘(i) poverty;
‘‘(ii) high unemployment;
‘‘(iii) outmigration;
‘‘(iv) plant closings;
‘‘(v) agricultural downturn;
‘‘(vi) declines in the natural resource-
based economy; or
‘‘(vii) environmental degradation.
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‘‘(3) ENDOWMENT FUNDS.—
‘‘(A) 
ESTABLISHMENT.—On 
notification
from the Secretary that the program entity has
been approved under subsection (c), the approved
program entity shall establish an endowment
fund.
‘‘(B) FUNDING
OF
ENDOWMENT.—Federal
funds provided in the form of an endowment
grant under the Program shall—
‘‘(i) be deposited in the endowment
fund;
‘‘(ii) be the sole property of the ap-
proved program entity;
‘‘(iii) be used in a manner consistent
with this subtitle; and
‘‘(iv) be subject to oversight by the Sec-
retary for a period of not more than 10
years.
‘‘(C) INTEREST.—Interest earned on Fed-
eral funds in the endowment fund shall be—
‘‘(i) retained by the grantee; and
‘‘(ii) treated as Federal funds are
treated under subparagraph (B).
‘‘(D) LIMITATION.—The Secretary shall
promulgate regulations on matching funds and
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returns on program-related investments only to
the extent that such funds or proceeds are used
in a manner consistent with this subtitle.
‘‘(4) CONDITIONS.—
‘‘(A) DISBURSEMENT.—
‘‘(i) IN
GENERAL.—Each endowment
grant award shall be disbursed during a pe-
riod not to exceed 5 years beginning during
the fiscal year containing the date of final
approval of the approved program entity
under subsection (e)(3).
‘‘(ii) MANNER
OF
DISBURSEMENT.—
Subject to subparagraph (B), the Secretary
may disburse a grant award in 1 lump sum
or in incremental disbursements made each
fiscal year.
‘‘(iii) 
INCREMENTAL
DISBURSE-
MENTS.—If the Secretary elects to make in-
cremental disbursements, for each fiscal
year after the initial disbursement, the Sec-
retary shall make a disbursement under
clause (i) only if the approved program
entity—
‘‘(I) has met the performance-
based benchmarks of the approved pro-
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gram entity for the preceding fiscal
year; and
‘‘(II) has provided the non-Fed-
eral share required for the preceding
fiscal year under subparagraph (B).
‘‘(iv) ADVANCE DISBURSEMENTS.—The
Secretary may make disbursements under
this paragraph notwithstanding any provi-
sion of law limiting grant disbursements to
amounts necessary to cover expected ex-
penses on a term basis.
‘‘(B) NON-FEDERAL SHARE.—
‘‘(i) IN GENERAL.—Except as provided
in clause (ii), for each disbursement under
subparagraph (A), the Secretary shall re-
quire the approved program entity to pro-
vide a non-Federal share in an amount
equal to 50 percent of the amount of funds
received by the approved program entity
under the disbursement.
‘‘(ii) LOWER NON-FEDERAL SHARE.—
In the case of an approved program entity
that serves a small, poor rural area or poor
Indian tribe (as determined by the Sec-
retary), the Secretary may—
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‘‘(I) reduce the non-Federal share
to not less than 20 percent; and
‘‘(II) allow the non-Federal share
to be provided in the form of in-kind
contributions.
‘‘(iii) BINDING COMMITMENTS; PLAN.—
For the purpose of meeting the non-Federal
share requirement with respect to the first
disbursement of an endowment grant award
to the approved program entity under the
Program, an approved program entity
shall—
‘‘(I) have, at a minimum, binding
commitments to provide the non-Fed-
eral share required with respect to the
first disbursement of the endowment
grant award; and
‘‘(II) if the Secretary is making
incremental disbursements of a grant,
develop a viable plan for providing the
remaining amount of the required non-
Federal share.
‘‘(C) LIMITATIONS.—
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‘‘(i) IN
GENERAL.—Subject to clause
(ii), of each disbursement, an approved pro-
gram entity shall use—
‘‘(I) not more than 10 percent for
administrative costs of carrying out
program-related investments;
‘‘(II) not more than 20 percent for
the purpose of maintaining a loss re-
serve account; and
‘‘(III) the remainder for program-
related investments contained in the
comprehensive community development
strategy.
‘‘(ii) LOSS RESERVE ACCOUNT.—If all
disbursed funds available under a grant are
expended in accordance with clause (i) and
the grant recipient has no expected losses to
cover for a fiscal year, the recipient may
use funds in the loss reserve account de-
scribed in clause (i)(II) for program-related
investments described in clause (i)(III) for
which no reserve for losses is required.
‘‘(g) FEDERAL AGENCY ASSISTANCE.—Under the Pro-
gram, the Secretary shall provide and coordinate technical
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assistance for grant recipients by designated field staff of
Federal agencies.
‘‘(h) PRIVATE TECHNICAL ASSISTANCE.—
‘‘(1) IN GENERAL.—Under the Program, the Sec-
retary may make grants to qualified intermediaries
to provide technical assistance and capacity building
to approved program entities under the Program.
‘‘(2) DUTIES.—A qualified intermediary that re-
ceives a grant under this subsection shall—
‘‘(A) provide assistance to approved pro-
gram entities in developing, coordinating, and
overseeing investment strategy;
‘‘(B) provide technical assistance in all as-
pects of planning, developing, and managing the
Program; and
‘‘(C) facilitate Federal and private sector
involvement in rural community development.
‘‘(3) ELIGIBILITY.—To be considered a qualified
intermediary under this subsection, an intermediary
shall—
‘‘(A) be a private, nonprofit community de-
velopment organization;
‘‘(B) have expertise in Federal or private
rural community development policy or pro-
grams; and
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‘‘(C) have experience in providing technical
assistance, planning, and capacity building as-
sistance to rural communities and nonprofit en-
tities in eligible rural areas.
‘‘(4) MAXIMUM AMOUNT OF GRANTS.—A quali-
fied intermediary may receive a grant under this sub-
section of not more than $100,000.
‘‘(5) FUNDING.—Of the amounts made available
under section 385D, the Secretary may use to carry
out this subsection not more than $2,000,000 for each
of not more than 2 fiscal years.
‘‘SEC. 385D. FUNDING.
‘‘(a) FISCAL YEARS 2002 AND 2003.—
‘‘(1) IN GENERAL.—Not later than 30 days after
the date of enactment of this subtitle, out of any funds
in the Treasury not otherwise appropriated, the Sec-
retary of the Treasury shall transfer to the Secretary
of Agriculture to carry out this subtitle $82,000,000
for the period of fiscal years 2002 and 2003, to re-
main available until expended.
‘‘(2) SCHEDULE
FOR
OBLIGATIONS.—Of the
amounts made available under paragraph (1)—
‘‘(A) not more than $5,000,000 shall be obli-
gated to carry out section 385C(d);
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‘‘(B) not less than $75,000,000 shall be obli-
gated to carry out section 385C(f); and
‘‘(C) not less than $2,000,000 shall be obli-
gated to carry out section 385C(h).
‘‘(3) RECEIPT AND ACCEPTANCE.—The Secretary
shall be entitled to receive, shall accept, and shall use
to carry out this subtitle the funds transferred under
paragraph (1), without further appropriation.
‘‘(b) FISCAL YEARS 2004 THROUGH 2006.—There are
authorized to be appropriated such sums as are necessary
to carry out this subtitle for each of fiscal years 2004
through 2006.’’.
SEC. 605. ENHANCEMENT OF ACCESS TO BROADBAND SERV-
ICE IN RURAL AREAS.
The Rural Electrification Act of 1936 (7 U.S.C. 901
et seq.) is amended by adding at the end the following:
‘‘TITLE VI—RURAL BROADBAND
ACCESS
‘‘SEC. 601. ACCESS TO BROADBAND TELECOMMUNICATIONS
SERVICES IN RURAL AREAS.
‘‘(a) PURPOSE.—The purpose of this section is to pro-
vide grants, loans, and loan guarantees to provide funds
for the costs of the construction, improvement, and acquisi-
tion of facilities and equipment for broadband service in
eligible rural communities.
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‘‘(b) DEFINITIONS.—In this section:
‘‘(1) 
BROADBAND
SERVICE.—The 
term
‘broadband service’ means any technology identified
by the Secretary as having the capacity to transmit
data to enable a subscriber to the service to originate
and receive high-quality voice, data, graphics, or
video.
‘‘(2) ELIGIBLE RURAL COMMUNITY.—The term
‘eligible rural community’ means any incorporated or
unincorporated place that—
‘‘(A) has not more than 20,000 inhabitants,
based on the most recent available population
statistics of the Bureau of the Census; and
‘‘(B) is not located in an area designated as
a standard metropolitan statistical area.
‘‘(c) GRANTS.—The Secretary shall make grants to eli-
gible entities described in subsection (e) to provide funds
for the construction, improvement, or acquisition of facili-
ties and equipment for the provision of broadband service
in eligible rural communities.
‘‘(d) LOANS AND LOAN GUARANTEES.—The Secretary
shall make or guarantee loans to eligible entities described
in subsection (e) to provide funds for the construction, im-
provement, or acquisition of facilities and equipment for
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the provision of broadband service in eligible rural commu-
nities.
‘‘(e) ELIGIBLE ENTITIES.—To be eligible to obtain a
grant, loan, or loan guarantee under this section, an entity
must—
‘‘(1) be able to furnish, improve, or extend a
broadband service to an eligible rural community;
and
‘‘(2) submit to the Secretary a proposal for a
project that meets the requirements of this section.
‘‘(f) BROADBAND SERVICE.—The Secretary shall, from
time to time as advances in technology warrant, review and
recommend modifications of rate-of-data transmission cri-
teria for purposes of the identification of broadband service
technologies under subsection (b)(1).
‘‘(g) TECHNOLOGICAL NEUTRALITY.—For purposes of
determining whether or not to make a grant, loan, or loan
guarantee for a project under this section, the Secretary
shall not take into consideration the type of technology pro-
posed to be used under the project.
‘‘(h) TERMS AND CONDITIONS FOR LOANS AND LOAN
GUARANTEES.—A loan or loan guarantee under subsection
(d) shall—
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‘‘(1) be made available in accordance with the
requirements of the Federal Credit Reform Act of
1990 (2 U.S.C. 661 et seq.);
‘‘(2) bear interest at an annual rate of, as deter-
mined by the Secretary—
‘‘(A) 4 percent per annum; or
‘‘(B) the current applicable market rate;
and
‘‘(3) have a term not to exceed the useful life of
the assets constructed, improved, or acquired with the
proceeds of the loan or extension of credit.
‘‘(i) USE OF LOAN PROCEEDS TO REFINANCE LOANS
FOR DEPLOYMENT
OF BROADBAND SERVICE.—Notwith-
standing any other provision of this Act, the proceeds of
any loan made by the Secretary under this Act may be used
by the recipient of the loan for the purpose of refinancing
an outstanding obligation of the recipient on another tele-
communications loan made under this Act if the use of the
proceeds for that purpose will further the construction, im-
provement, or acquisition of facilities and equipment for
the provision of broadband service in eligible rural commu-
nities.
‘‘(j) FUNDING.—
‘‘(1) IN GENERAL.—Not later than 30 days after
the date of enactment of this Act, and on October 1,
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2002, and each October 1 thereafter through October
1, 2005, out of any funds in the Treasury not other-
wise appropriated, the Secretary of the Treasury shall
transfer to the Secretary of Agriculture to carry out
this section $100,000,000, to remain available until
expended.
‘‘(2) RECEIPT AND ACCEPTANCE.—The Secretary
shall be entitled to receive, shall accept, and shall use
to carry out this section the funds transferred under
paragraph (1), without further appropriation.
‘‘(3) ALLOCATION OF FUNDS.—
‘‘(A) IN
GENERAL.—From amounts made
available for each fiscal year under paragraph
(1), the Secretary shall—
‘‘(i) establish a national reserve for
grants, loans, and loan guarantees to eligi-
ble entities in States under this section; and
‘‘(ii) allocate amounts in the reserve to
each State for each fiscal year for grants,
loans, and loan guarantees to eligible enti-
ties in the State.
‘‘(B) AMOUNT.—The amount of an alloca-
tion made to a State for a fiscal year under sub-
paragraph (A) shall bear the same ratio to the
amount of allocations made for all States for the
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fiscal year as the number of communities with a
population of 2,500 inhabitants or less in the
State bears to the number of communities with
a population of 2,500 inhabitants or less in all
States, as determined on the basis of the last
available census.
‘‘(C) 
UNOBLIGATED
AMOUNTS.—Any
amounts in the reserve established for a State for
a fiscal year under subparagraph (B) that are
not obligated by April 1 of the fiscal year shall
be available to the Secretary to make grants,
loans, and loan guarantees under this section to
eligible entities in any State, as determined by
the Secretary.
‘‘(k) GRANTS FOR PLANNING AND FEASIBILITY STUD-
IES ON BROADBAND DEPLOYMENT.—
‘‘(1) IN
GENERAL.—In addition to any other
grants, loans, or loan guarantees made under this sec-
tion, the Secretary shall make grants to eligible enti-
ties specified in paragraph (2) for planning and fea-
sibility studies carried out by those entities on the de-
ployment of broadband services in the areas served by
those entities.
‘‘(2) ELIGIBLE ENTITIES.—The entities eligible
for grants under this subsection are—
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‘‘(A) State governments;
‘‘(B) local governments (including consortia
of local governments);
‘‘(C) tribal governments;
‘‘(D) telecommunications cooperatives; and
‘‘(E) appropriate State and regional non-
profit entities (as determined by the Secretary).
‘‘(3) ELIGIBILITY CRITERIA.—
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish criteria for eligibility for grants under
this subsection, including criteria for the scope of
the planning and feasibility studies to be carried
out with grants under this subsection.
‘‘(B) CONTRIBUTION BY GRANTEE.—An en-
tity may not be awarded a grant under this sub-
section unless the entity agrees to contribute (out
of funds other than the grant amount) to the
planning and feasibility study to be funded by
the grant an amount equal to the amount of the
grant.
‘‘(4) APPLICATION.—An entity seeking a grant
under this subsection shall submit to the Secretary an
application for the grant that is in such form, and
that contains such information, as the Secretary shall
require.
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‘‘(5) USE OF GRANT AMOUNTS.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), an entity that receives a grant under
this subsection shall use the grant amount for
planning and feasibility studies on the deploy-
ment of broadband services in the area of—
‘‘(i) an Indian tribe;
‘‘(ii) a local government;
‘‘(iii) a State;
‘‘(iv) a region of a State; or
‘‘(v) a region of States.
‘‘(B) LIMITATION.—Grant amounts under
this subsection may not be used for the construc-
tion of buildings or other facilities, the acquisi-
tion or improvement of existing buildings or fa-
cilities, or the leasing of office space.
‘‘(6) LIMITATION ON GRANT AMOUNTS.—
‘‘(A) STATEWIDE GRANTS.—The amount of
the grants made under this subsection in or with
respect to any State in any fiscal year may not
exceed $250,000.
‘‘(B) LOCAL
GOVERNMENT, REGIONAL, OR
TRIBAL
GRANTS.—The amount of the grants
made under this subsection in or with respect to
any local government, region, or tribal govern-
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ment in any fiscal year may not exceed
$100,000.
‘‘(7) RESERVATION OF FUNDS FOR GRANTS.—
‘‘(A) IN GENERAL.—For each fiscal year, up
to 3 percent of the funds made available to carry
out this section for the fiscal year shall be re-
served for grants under this subsection.
‘‘(B) RELEASE.—Funds reserved under sub-
paragraph (A) for a fiscal year shall be reserved
only until April 1 of the fiscal year.
‘‘(8) SUPPLEMENT NOT SUPPLANT.—
‘‘(A) IN GENERAL.—Eligibility for a grant
under this subsection shall not affect eligibility
for a grant, loan, or loan guarantee under an-
other subsection of this section.
‘‘(B) 
CONSIDERATIONS.—The 
Secretary
shall not take into account the award of a grant
under this subsection, or the award of a grant,
loan, or loan guarantee under another subsection
of this section, in awarding a grant, loan, or
loan guarantee under this subsection or another
subsection of this section, as the case may be.
‘‘(l) TERMINATION OF AUTHORITY.—
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‘‘(1) IN
GENERAL.—No grant, loan, or loan
guarantee may be made under this section after Sep-
tember 30, 2006.
‘‘(2) EFFECT ON VALIDITY OF GRANT, LOAN, OR
LOAN GUARANTEE.—Notwithstanding paragraph (1),
any grant, loan, or loan guarantee made under this
section before the date specified in paragraph (1)
shall be valid.’’.
SEC. 606. VALUE-ADDED AGRICULTURAL PRODUCT MARKET
DEVELOPMENT GRANTS.
Section 231 of the Agricultural Risk Protection Act of
2000 (7 U.S.C. 1621 note; Public Law 106–224) is
amended—
(1) by redesignating subsections (b) through (d)
as subsections (c) through (e), respectively;
(2) by striking subsection (a) and inserting the
following:
‘‘(a) DEFINITION OF VALUE-ADDED AGRICULTURAL
PRODUCT.—The term ‘value-added agricultural product’
means any agricultural commodity or product that—
‘‘(1)(A) has undergone a change in physical
state; or
‘‘(B) was produced in a manner that enhances
the value of the agricultural commodity or product, as
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demonstrated through a business plan that shows the
enhanced value, as determined by the Secretary; and
‘‘(2) as a result of the change in physical state
or the manner in which the agricultural commodity
or product was produced—
‘‘(A) the customer base for the agricultural
commodity or product has been expanded; and
‘‘(B) a greater portion of the revenue de-
rived from the processing of the agricultural
commodity or product is available to the pro-
ducer of the commodity or product.
‘‘(b) GRANT PROGRAM.—
‘‘(1) PURPOSES.—The purposes of this subsection
are—
‘‘(A) to increase the share of the food and
agricultural system profit received by agricul-
tural producers;
‘‘(B) to increase the number and quality of
rural self-employment opportunities in agri-
culture and agriculturally-related businesses and
the number and quality of jobs in agriculturally-
related businesses;
‘‘(C) to help maintain a diversity of size in
farms and ranches by stabilizing the number of
small and mid-sized farms;
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‘‘(D) to increase the diversity of food and
other agricultural products available to con-
sumers, including nontraditional crops and
products and products grown or raised in a
manner that enhances the value of the products
to the public; and
‘‘(E) to conserve and enhance the quality of
land, water, and energy resources, wildlife habi-
tat, and other landscape values and amenities in
rural areas.
‘‘(2) GRANTS.—From amounts made available
under paragraph (6), the Secretary shall make award
competitive grants—
‘‘(A) to an eligible independent producer (as
determined by the Secretary) of a value-added
agricultural product to assist the producer—
‘‘(i) to develop a business plan for via-
ble marketing opportunities for the value-
added agricultural product; or
‘‘(ii) to develop strategies that are in-
tended to create marketing opportunities for
the producer; and
‘‘(B) to an eligible nonprofit entity (as de-
termined by the Secretary) to assist the entity—
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‘‘(i) to develop a business plan for via-
ble marketing opportunities in emerging
markets for a value-added agricultural
product;
‘‘(ii) to develop strategies that are in-
tended to create marketing opportunities in
emerging markets for the value-added agri-
cultural product; or
‘‘(iii) to create, expand, or operate
value-added processing in an area described
in paragraph (3)(B)(ii) in connection with
production agriculture.
‘‘(3) AMOUNT OF GRANT.—
‘‘(A) IN GENERAL.—The total amount pro-
vided under this subsection to a grant recipient
may not exceed $500,000.
‘‘(B) PRIORITY.—The Secretary shall give
priority to—
‘‘(i) grant proposals for less than
$200,000 submitted under this subsection;
and
‘‘(ii) grant proposals submitted by an
eligible nonprofit entity with a principal of-
fice that is located—
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‘‘(I) on land of an existing or
former Native American reservation;
and
‘‘(II) in a city, town, or unincor-
porated area that has a population of
no more than 5,000 inhabitants.
‘‘(4) GRANTEE STRATEGIES.—A grantee under
paragraph (2) shall use the grant—
‘‘(A) to develop a business plan or perform
a feasibility study to establish a viable mar-
keting opportunity for a value-added agricul-
tural product; or
‘‘(B) to provide capital to establish alliances
or business ventures that allow the producer of
the value-added agricultural product to better
compete in domestic or international markets.
‘‘(5) GRANTS FOR MARKETING OR PROCESSING
CERTIFIED ORGANIC AGRICULTURAL PRODUCTS.—
‘‘(A) IN
GENERAL.—Out of any amount
that is made available to the Secretary for a fis-
cal year under paragraph (2), the Secretary
shall use not less than 5 percent of the amount
for grants to assist producers of certified organic
agricultural products in post-farm marketing or
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processing of the products through a business or
cooperative ventures that—
‘‘(i) expand the customer base of the
certified organic agricultural products; and
‘‘(ii) increase the portion of product
revenue available to the producers.
‘‘(B) CERTIFIED
ORGANIC
AGRICULTURAL
PRODUCT.—For the purposes of this paragraph,
a certified organic agricultural product does not
have to meet the requirements of the definition of
‘value-added agricultural product’ under sub-
section (a).
‘‘(C) INSUFFICIENT APPLICATIONS.—If, for
any fiscal year, the Secretary receives an insuffi-
cient quantity of applications for grants de-
scribed in subparagraph (A) to use the funds re-
served under subparagraph (A), the Secretary
may use the excess reserved funds to make grants
for any other purpose authorized under this sub-
section.
‘‘(6) FUNDING.—
‘‘(A) IN GENERAL.—Not later than 30 days
after the date of enactment of this paragraph,
and on October 1, 2002, and each October 1
thereafter through October 1, 2005, out of any
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funds in the Treasury not otherwise appro-
priated, the Secretary of the Treasury shall
transfer to the Secretary of Agriculture to carry
out this subsection $75,000,000, to remain avail-
able until expended.
‘‘(B) RECEIPT AND ACCEPTANCE.—The Sec-
retary shall be entitled to receive, shall accept,
and shall use to carry out this subsection the
funds transferred under subparagraph (A), with-
out further appropriation.’’;
(3) in subsection (c)(1) (as redesignated)—
(A) by striking ‘‘subsection (a)(2)’’ and in-
serting ‘‘subsection (b)(2)’’;
(B) by striking ‘‘$5,000,000’’ and inserting
‘‘7.5 percent’’; and
(C) by striking ‘‘subsection (a)’’ and insert-
ing ‘‘subsection (b)’’; and
(4) in subsection (d) (as redesignated), by strik-
ing ‘‘subsections (a) and (b)’’ and inserting ‘‘sub-
sections (b) and (c)’’.
SEC. 607. NATIONAL RURAL DEVELOPMENT INFORMATION
CLEARINGHOUSE.
Section 2381 of the Food, Agriculture, Conservation,
and Trade Act of 1990 (7 U.S.C. 3125b) is amended to read
as follows:
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‘‘SEC. 2381. NATIONAL RURAL DEVELOPMENT INFORMA-
TION CLEARINGHOUSE.
‘‘(a) ESTABLISHMENT.—The Secretary shall establish
and maintain, within the rural development mission area
of the Department of Agriculture, a National Rural Devel-
opment Information Clearinghouse (referred to in this sec-
tion as the ‘Clearinghouse’) to perform the functions speci-
fied in subsection (b).
‘‘(b) FUNCTIONS.—The Clearinghouse shall collect in-
formation and data from, and disseminate information and
data to, any person or public or private entity about pro-
grams and services provided by Federal, State, local, and
tribal agencies, institutions of higher education, and pri-
vate, for-profit, and nonprofit organizations and institu-
tions under which a person or public or private entity re-
siding or operating in a rural area may be eligible for any
kind of financial, technical, or other assistance, including
business, venture capital, economic, credit and community
development assistance, health care, job training, education,
and emotional and financial counseling.
‘‘(c) MODES OF COLLECTION AND DISSEMINATION OF
INFORMATION.—In addition to other modes for the collec-
tion and dissemination of the types of information and data
specified under subsection (b), the Secretary shall ensure
that the Clearinghouse maintains an Internet website that
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provides for dissemination and collection, through vol-
untary submission or posting, of the information and data.
‘‘(d) FEDERAL AGENCIES.—On request of the Sec-
retary and to the extent permitted by law, the head of a
Federal agency shall provide to the Clearinghouse such in-
formation as the Secretary may request to enable the Clear-
inghouse to carry out this section.
‘‘(e) STATE, LOCAL, AND TRIBAL AGENCIES, INSTITU-
TIONS OF HIGHER EDUCATION, AND NONPROFIT AND FOR-
PROFIT
ORGANIZATIONS.—The Secretary shall request
State, local, and tribal agencies, institutions of higher edu-
cation, and private, for-profit, and nonprofit organizations
and institutions to provide to the Clearinghouse informa-
tion concerning applicable programs or services described
in subsection (b).
‘‘(f) PROMOTION OF CLEARINGHOUSE.—The Secretary
prominently shall promote the existence and availability of
the Clearinghouse in all activities of the Department of Ag-
riculture relating to rural areas of the United States.
‘‘(g) FUNDING.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), the
Secretary shall use to operate and maintain the
Clearinghouse not more than $600,000 of the funds
available to the Rural Housing Service, the Rural
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Utilities Service, and the Rural Business-Cooperative
Service for each fiscal year.
‘‘(2) LIMITATION.—Funds available to the Rural
Housing Service, the Rural Utilities Service, and the
Rural Business-Cooperative Service for the payment
of loan costs (as defined in section 502 of Federal
Credit Reform Act of 1990 (2 U.S.C. 661a)) shall not
be used to operate and maintain the Clearinghouse.’’.
Subtitle B—National Rural
Development Partnership
SEC. 611. SHORT TITLE.
This subtitle may be cited as the ‘‘National Rural De-
velopment Partnership Act of 2002’’.
SEC. 612. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.
Subtitle D of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1981 et seq.) is amended by adding
at the end the following:
‘‘SEC. 377. NATIONAL RURAL DEVELOPMENT PARTNERSHIP.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) AGENCY WITH RURAL RESPONSIBILITIES.—
The term ‘agency with rural responsibilities’ means
any executive agency (as defined in section 105 of
title 5, United States Code) that—
‘‘(A) implements Federal law targeted at
rural areas, including—
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‘‘(i) the Act of April 24, 1950 (com-
monly known as the ‘Granger-Thye Act’)
(64 Stat. 82, chapter 9);
‘‘(ii) the Intergovernmental Coopera-
tion Act of 1968 (82 Stat. 1098);
‘‘(iii) section 41742 of title 49, United
States Code;
‘‘(iv) the Rural Development Act of
1972 (86 Stat. 657);
‘‘(v) the Rural Development Policy Act
of 1980 (94 Stat. 1171);
‘‘(vi) the Rural Electrification Act of
1936 (7 U.S.C. 901 et seq.);
‘‘(vii) amendments made to section 334
of the Public Health Service Act (42 U.S.C.
254g) by the Rural Health Clinics Act of
1983 (97 Stat. 1345); and
‘‘(viii) the Rural Housing Amendments
of 1983 (97 Stat. 1240) and the amend-
ments made by the Rural Housing Amend-
ments of 1983 to title V of the Housing Act
of 1949 (42 U.S.C. 1471 et seq.); or
‘‘(B) administers a program that has a sig-
nificant impact on rural areas, including—
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‘‘(i) the Appalachian Regional Com-
mission;
‘‘(ii) the Department of Agriculture;
‘‘(iii) the Department of Commerce;
‘‘(iv) the Department of Defense;
‘‘(v) the Department of Education;
‘‘(vi) the Department of Energy;
‘‘(vii) the Department of Health and
Human Services;
‘‘(viii) the Department of Housing and
Urban Development;
‘‘(ix) the Department of the Interior;
‘‘(x) the Department of Justice;
‘‘(xi) the Department of Labor;
‘‘(xii) the Department of Transpor-
tation;
‘‘(xiii) the Department of the Treasury;
‘‘(xiv) the Department of Veterans Af-
fairs;
‘‘(xv) the Environmental Protection
Agency;
‘‘(xvi) the Federal Emergency Manage-
ment Administration;
‘‘(xvii) the Small Business Adminis-
tration;
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‘‘(xviii) the Social Security Adminis-
tration;
‘‘(xix) the Federal Reserve System;
‘‘(xx) the United States Postal Service;
‘‘(xxi) the Corporation for National
Service;
‘‘(xxii) the National Endowment for
the Arts and the National Endowment for
the Humanities; and
‘‘(xxiii) other agencies, commissions,
and corporations.
‘‘(2) COORDINATING COMMITTEE.—The term ‘Co-
ordinating Committee’ means the National Rural De-
velopment Coordinating Committee established by
subsection (c).
‘‘(3) PARTNERSHIP.—The term ‘Partnership’
means the National Rural Development Partnership
continued by subsection (b).
‘‘(4) STATE RURAL DEVELOPMENT COUNCIL.—
The term ‘State rural development council’ means a
State rural development council that meets the re-
quirements of subsection (d).
‘‘(b) PARTNERSHIP.—
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‘‘(1) IN GENERAL.—The Secretary shall continue
the National Rural Development Partnership com-
posed of—
‘‘(A) the Coordinating Committee; and
‘‘(B) State rural development councils.
‘‘(2) PURPOSES.—The purposes of the Partner-
ship are—
‘‘(A) to empower and build the capacity of
States and rural communities within States to
design unique responses to their own special
rural development needs, with local determina-
tions of progress and selection of projects and ac-
tivities;
‘‘(B) to encourage participants to be flexible
and innovative in establishing new partnerships
and trying fresh, new approaches to rural devel-
opment issues, with responses to rural develop-
ment that use different approaches to fit different
situations; and
‘‘(C) to encourage all partners in the Part-
nership (Federal, State, local, and tribal govern-
ments, the private sector, and nonprofit organi-
zations) to be fully engaged and share equally in
decisions.
‘‘(3) GOVERNING PANEL.—
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‘‘(A) IN GENERAL.—A panel consisting of
representatives of the Coordinating Committee
and State rural development councils shall be es-
tablished to lead and coordinate the strategic op-
eration, policies, and practices of the Partner-
ship.
‘‘(B) ANNUAL
REPORTS.—In conjunction
with the Coordinating Committee and State
rural development councils, the panel shall pre-
pare and submit to Congress an annual report
on the activities of the Partnership.
‘‘(4) ROLE OF FEDERAL GOVERNMENT.—The role
of the Federal Government in the Partnership shall be
that of a partner and facilitator, with Federal agen-
cies authorized—
‘‘(A) to cooperate with States to implement
the Partnership;
‘‘(B) to provide States with the technical
and administrative support necessary to plan
and implement tailored rural development strat-
egies to meet local needs;
‘‘(C) to ensure that the head of each agency
referred to in subsection (a)(1)(B) designates a
senior-level agency official to represent the agen-
cy on the Coordinating Committee and directs
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appropriate field staff to participate fully with
the State rural development council within the
jurisdiction of the field staff; and
‘‘(D) to enter into cooperative agreements
with, and to provide grants and other assistance
to, State rural development councils.
‘‘(5) ROLE OF PRIVATE AND NONPROFIT SECTOR
ORGANIZATIONS.—Private and nonprofit sector orga-
nizations are encouraged—
‘‘(A) to act as full partners in the Partner-
ship and State rural development councils; and
‘‘(B) to cooperate with participating gov-
ernment organizations in developing innovative
approaches to the solution of rural development
problems.
‘‘(c) NATIONAL RURAL DEVELOPMENT COORDINATING
COMMITTEE.—
‘‘(1) ESTABLISHMENT.—The Secretary shall es-
tablish a National Rural Development Coordinating
Committee.
‘‘(2) COMPOSITION.—The Coordinating Com-
mittee shall be composed of—
‘‘(A) 1 representative of each agency with
rural responsibilities that elects to participate in
the Coordinating Committee; and
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‘‘(B) representatives, approved by the Sec-
retary, of—
‘‘(i) national associations of State, re-
gional, local, and tribal governments and
intergovernmental and multijurisdictional
agencies and organizations;
‘‘(ii) national public interest groups;
‘‘(iii) other national nonprofit organi-
zations that elect to participate in the ac-
tivities of the Coordinating Committee; and
‘‘(iv) the private sector.
‘‘(3) DUTIES.—The Coordinating Committee
shall—
‘‘(A) provide support for the work of the
State rural development councils;
‘‘(B) facilitate coordination among Federal
programs and activities, and with State, local,
tribal, and private programs and activities, af-
fecting rural development;
‘‘(C) enhance the effectiveness, responsive-
ness, and delivery of Federal programs in rural
areas;
‘‘(D) gather and provide to Federal authori-
ties information and input for the development
and implementation of Federal programs im-
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pacting rural economic and community develop-
ment;
‘‘(E) notwithstanding any other provision
of law, review and comment on policies, regula-
tions, and proposed legislation that affect or
would affect rural areas;
‘‘(F) provide technical assistance to State
rural development councils for the implementa-
tion of Federal programs;
‘‘(G) notwithstanding any other provision
of law, develop and facilitate strategies to reduce
or eliminate administrative and regulatory im-
pediments; and
‘‘(H) require each State receiving funds
under this section to submit an annual report on
the use of the funds by the State, including a de-
scription of strategic plans, goals, performance
measures, and outcomes for the State rural devel-
opment council of the State.
‘‘(4) ELECTION NOT TO PARTICIPATE.—An agen-
cy with rural responsibilities that elects not to par-
ticipate in the Partnership and the Coordinating
Committee shall submit to Congress a report that
describes—
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‘‘(A) how the programmatic responsibilities
of the Federal agency that target or have an im-
pact on rural areas are better achieved without
participation by the agency in the Partnership;
and
‘‘(B) a more effective means of partnership-
building and collaboration to achieve the pro-
grammatic responsibilities of the agency.
‘‘(d) STATE RURAL DEVELOPMENT COUNCILS.—
‘‘(1) ESTABLISHMENT.—Notwithstanding chap-
ter 63 of title 31, United States Code, each State may
elect to participate in the Partnership by entering
into an agreement with the Secretary to establish a
State rural development council.
‘‘(2) STATE DIVERSITY.—Each State rural devel-
opment council shall—
‘‘(A) have a nonpartisan membership that
is broad and representative of the economic, so-
cial, and political diversity of the State; and
‘‘(B) carry out programs and activities in
a manner that reflects the diversity of the State.
‘‘(3) DUTIES.—A State rural development coun-
cil shall—
‘‘(A) facilitate collaboration among Federal,
State, local, and tribal governments and the pri-
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vate and nonprofit sectors in the planning and
implementation of programs and policies that
target or have an impact on rural areas of the
State;
‘‘(B) enhance the effectiveness, responsive-
ness, and delivery of Federal and State programs
in rural areas of the State;
‘‘(C) gather and provide to the Coordi-
nating Committee and other appropriate organi-
zations information on the condition of rural
areas in the State;
‘‘(D) monitor and report on policies and
programs that address, or fail to address, the
needs of the rural areas of the State;
‘‘(E) provide comments to the Coordinating
Committee and other appropriate organizations
on policies, regulations, and proposed legislation
that affect or would affect the rural areas of the
State;
‘‘(F) notwithstanding any other provision of
law, in conjunction with the Coordinating Com-
mittee, facilitate the development of strategies to
reduce or eliminate conflicting or duplicative ad-
ministrative or regulatory requirements of Fed-
eral, State, local, and tribal governments;
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‘‘(5) COMMENTS
OR
RECOMMENDATIONS.—A
State rural development council may provide com-
ments and recommendations to an agency with rural
responsibilities related to the activities of the State
rural development council within the State.
‘‘(6) ACTIONS OF STATE RURAL DEVELOPMENT
COUNCIL MEMBERS.—When carrying out a program
or activity authorized by a State rural development
council or this subtitle, a member of the council shall
be regarded as a full-time employee of the Federal
Government for purposes of chapter 171 of title 28,
United States Code, and the Federal Advisory Com-
mittee Act (5 U.S.C. App.).
‘‘(7) FEDERAL PARTICIPATION IN STATE RURAL
DEVELOPMENT COUNCILS.—
‘‘(A) IN GENERAL.—The State Director for
Rural Development of a State, other employees of
the Department of Agriculture, and employees of
other Federal agencies that elect to participate in
the Partnership shall fully participate in the
governance and operations of State rural devel-
opment councils on an equal basis with other
members of the State rural development councils.
‘‘(B) CONFLICTS.—A Federal employee who
participates in a State rural development coun-
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cil shall not participate in the making of any
council decision if the agency represented by the
Federal employee has any financial or other in-
terest in the outcome of the decision.
‘‘(C) FEDERAL
GUIDANCE.—The Office of
Government Ethics, in consultation with the At-
torney General, shall issue guidance to all Fed-
eral employees that participate in State rural
development councils that describes specific deci-
sions that—
‘‘(i) would constitute a conflict of in-
terest for the Federal employee; and
‘‘(ii) from which the Federal employee
must recuse himself or herself.
‘‘(e) ADMINISTRATIVE SUPPORT OF THE PARTNER-
SHIP.—
‘‘(1) DETAIL OF EMPLOYEES.—
‘‘(A) IN GENERAL.—In order to provide ex-
perience in intergovernmental collaboration, the
head of an agency with rural responsibilities
that elects to participate in the Partnership
may, and is encouraged to, detail an employee of
the agency with rural responsibilities to the
Partnership without reimbursement for a period
of up to 12 months.
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‘‘(B) CIVIL
SERVICE
STATUS.—The detail
shall be without interruption or loss of civil serv-
ice status or privilege.
‘‘(2) ADDITIONAL SUPPORT.—The Secretary shall
provide for any additional support staff to the Part-
nership as the Secretary determines to be necessary to
carry out the duties of the Partnership.
‘‘(f) FUNDING.—
‘‘(1) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(A) IN GENERAL.—There are authorized to
be appropriated such sums as are necessary to
carry out this section.
‘‘(B) AMOUNT OF FINANCIAL ASSISTANCE.—
In providing financial assistance to State rural
development councils, the Secretary and heads of
other Federal agencies shall provide assistance
that, to the maximum extent practicable, is—
‘‘(i) uniform in amount; and
‘‘(ii) targeted to newly created State
rural development councils.
‘‘(C) 
FEDERAL
SHARE.—The 
Secretary
shall develop a plan to decrease, over time, the
Federal share of the cost of the core operations of
State rural development councils.
‘‘(2) FEDERAL AGENCIES.—
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‘‘(A) IN
GENERAL.—Notwithstanding any
other provision of law limiting the ability of an
agency to provide funds to the Partnership with
other agencies, in order to carry out the purposes
described in subsection (b)(2), the Partnership
shall be eligible to receive grants, gifts, contribu-
tions, or technical assistance from, or enter into
contracts with, any Federal agency.
‘‘(B) ASSISTANCE.—Federal agencies are
encouraged to use funds made available for pro-
grams that target or have an impact on rural
areas to provide assistance to, and enter into
contracts with, the Partnership, as described in
subparagraph (A).
‘‘(3) CONTRIBUTIONS.—The Partnership may ac-
cept private contributions.
‘‘(4) FEDERAL FINANCIAL SUPPORT FOR STATE
RURAL
DEVELOPMENT
COUNCILS.—Notwithstanding
any other provision of law, a Federal agency may use
funds made available under paragraph (1) or (2) to
enter into a cooperative agreement, contract, or other
agreement with a State rural development council to
support the core operations of the State rural develop-
ment council, regardless of the legal form of organiza-
tion of the State rural development council.
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‘‘(g) MATCHING REQUIREMENTS FOR STATE RURAL
DEVELOPMENT COUNCILS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), a State rural development council shall
provide matching funds, or in-kind goods or services,
to support the activities of the State rural develop-
ment council in an amount that is not less than 33
percent of the amount of Federal funds received under
an agreement under subsection (d)(1).
‘‘(2) EXCEPTIONS TO MATCHING REQUIREMENT
FOR CERTAIN FEDERAL FUNDS.—Paragraph (1) shall
not apply to funds, grants, funds provided under con-
tracts or cooperative agreements, gifts, contributions,
or technical assistance received by a State rural devel-
opment council from a Federal agency that are
used—
‘‘(A) to support 1 or more specific program
or project activities; or
‘‘(B) to reimburse the State rural develop-
ment council for services provided to the Federal
agency providing the funds, grants, funds pro-
vided under contracts or cooperative agreements,
gifts, contributions, or technical assistance.
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‘‘(h) TERMINATION.—The authority provided under
this section shall terminate on the date that is 5 years after
the date of enactment of this section.’’.
Subtitle C—Consolidated Farm and
Rural Development Act
SEC. 621. WATER OR WASTE DISPOSAL GRANTS.
Section 306(a)(2) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)(2)) is amended—
(1) by striking ‘‘(2) The’’ and inserting the fol-
lowing:
‘‘(2) WATER, WASTE
DISPOSAL, AND
WASTE-
WATER FACILITY GRANTS.—
‘‘(A) AUTHORITY.—
‘‘(i) IN GENERAL.—The’’;
(2) by striking ‘‘$590,000,000’’ and inserting
‘‘$1,500,000,000’’;
(3) by striking ‘‘The amount’’ and inserting the
following:
‘‘(ii) AMOUNT.—The amount’’;
(4) by striking ‘‘paragraph’’ and in-
serting ‘‘subparagraph’’;
(5) by striking ‘‘The Secretary shall’’
and inserting the following:
‘‘(iii) GRANT
RATE.—The Secretary
shall’’; and
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(6) by adding at the end the following:
‘‘(B) REVOLVING
FUNDS
FOR
FINANCING
WATER AND WASTEWATER PROJECTS.—
‘‘(i) IN GENERAL.—The Secretary may
make grants to qualified private, nonprofit
entities to capitalize revolving funds for the
purpose of providing financing to eligible
entities for—
‘‘(I) predevelopment costs associ-
ated with proposed water and waste-
water projects or with existing water
and wastewater systems; and
‘‘(II) short-term costs incurred for
replacement equipment, small-scale ex-
tension services, or other small capital
projects that are not part of the regular
operations and maintenance activities
of existing water and wastewater sys-
tems.
‘‘(ii) ELIGIBLE ENTITIES.—To be eligi-
ble to obtain financing from a revolving
fund under clause (i), an eligible entity
shall be eligible to obtain a loan, loan guar-
antee, or grant under paragraph (1) or this
paragraph.
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‘‘(iii) MAXIMUM AMOUNT OF FINANC-
ING.—The amount of financing made to an
eligible entity under this subparagraph
shall not exceed—
‘‘(I) $100,000 for costs described
in clause (i)(I); and
‘‘(II) $100,000 for costs described
in clause (i)(II).
‘‘(iv) TERM.—The term of financing
provided to an eligible entity under this
subparagraph shall not exceed 10 years.
‘‘(v) ADMINISTRATION.—The Secretary
shall limit the amount of grant funds that
may be used by a grant recipient for ad-
ministrative costs incurred under this sub-
paragraph.
‘‘(vi) ANNUAL
REPORT.—A nonprofit
entity receiving a grant under this subpara-
graph shall submit an annual report to the
Secretary that describes the number and
size of communities served and the type of
financing provided.
‘‘(vii) AUTHORIZATION OF APPROPRIA-
TIONS.—There is authorized to be appro-
priated to carry out this subparagraph
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$30,000,000 for each of fiscal years 2002
through 2006.’’.
SEC. 622. RURAL BUSINESS OPPORTUNITY GRANTS.
Section 306(a)(11)(D) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926(a)(11)(D)) is
amended—
(1) by striking ‘‘$7,500,000’’ and inserting
‘‘$15,000,000’’; and
(2) by striking ‘‘2002’’ and inserting ‘‘2006’’.
SEC. 623. RURAL WATER AND WASTEWATER CIRCUIT RIDER
PROGRAM.
Section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)) is amended by added
at the end the following:
‘‘(22) RURAL WATER AND WASTEWATER CIRCUIT
RIDER PROGRAM.—
‘‘(A) IN GENERAL.—The Secretary shall es-
tablish a national rural water and wastewater
circuit rider program that is based on the rural
water circuit rider program of the National
Rural Water Association that (as of the date of
enactment of this paragraph) receives funding
from the Secretary, acting through the Rural
Utilities Service.
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‘‘(B) RELATIONSHIP
TO
EXISTING
PRO-
GRAM.—The program established under subpara-
graph (A) shall not affect the authority of the
Secretary to carry out the circuit rider program
for which funds are made available under the
heading ‘‘RURAL
COMMUNITY
ADVANCEMENT
PROGRAM’’ of title III of the Agriculture, Rural
Development, Food and Drug Administration,
and Related Agencies Appropriations Act, 2002.
‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated
to carry out this paragraph $15,000,000 for each
of fiscal years 2003 through 2006.’’.
SEC. 624. MULTIJURISDICTIONAL REGIONAL PLANNING OR-
GANIZATIONS.
Section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)) (as amended by section
623) is amended by added at the end the following:
‘‘(23) MULTIJURISDICTIONAL
REGIONAL
PLAN-
NING ORGANIZATIONS.—
‘‘(A) GRANTS.—The Secretary shall provide
grants to multijurisdictional regional planning
and development organizations to pay the Fed-
eral share of the cost of providing assistance to
local governments to improve the infrastructure,
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services, and business development capabilities of
local governments and local economic develop-
ment organizations.
‘‘(B) PRIORITY.—In determining which or-
ganizations will receive a grant under this para-
graph, the Secretary shall provide a priority to
an organization that—
‘‘(i) serves a rural area that, during
the most recent 5-year period—
‘‘(I) had a net out-migration of
inhabitants, or other population loss,
from the rural area that equals or ex-
ceeds 5 percent of the population of the
rural area; or
‘‘(II) had a median household in-
come that is less than the nonmetro-
politan median household income of
the applicable State; and
‘‘(ii) has a history of providing sub-
stantive assistance to local governments and
economic development organizations.
‘‘(C) FEDERAL SHARE.—A grant provided
under this paragraph shall be for not more than
75 percent of the cost of providing assistance de-
scribed in subparagraph (A).
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‘‘(D) MAXIMUM AMOUNT OF GRANTS.—The
amount of a grant provided to an organization
under this paragraph shall not exceed $100,000.
‘‘(E) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated
to carry out this paragraph $30,000,000 for each
of fiscal years 2003 through 2006.’’.
SEC. 625. CERTIFIED NONPROFIT ORGANIZATIONS SHAR-
ING EXPERTISE.
Section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)) (as amended by section
624) is amended by added at the end the following:
‘‘(24) CERTIFIED
NONPROFIT
ORGANIZATIONS
SHARING EXPERTISE.—
‘‘(A) CERTIFIED ORGANIZATIONS.—
‘‘(i) IN GENERAL.—To be certified by
the Secretary to provide technical assistance
in 1 or more rural development fields, an
organization shall—
‘‘(I) be a nonprofit organization
(which may include an institution of
higher education) with experience in
providing technical assistance in the
applicable rural development field;
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‘‘(II) develop a plan, approved by
the Secretary, describing the manner
in which grant funds will be used and
the source of non-Federal funds; and
‘‘(III) meet such other criteria as
the Secretary may establish, based on
the needs of eligible entities for the
technical assistance.
‘‘(iii) LIST.—The Secretary shall make
available to the public a list of certified or-
ganizations in each area that the Secretary
determines have substantial experience in
providing the assistance described in sub-
paragraph (B).
‘‘(B) GRANTS.—The Secretary may provide
grants to certified organizations to pay for costs
of providing technical assistance to local govern-
ments and nonprofit entities to improve the in-
frastructure, services, and business development
capabilities of local governments and local eco-
nomic development organizations.
‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated
to carry out this paragraph $20,000,000 for each
of fiscal years 2003 through 2006.’’.
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SEC. 626. LOAN GUARANTEES FOR CERTAIN RURAL DEVEL-
OPMENT LOANS.
(a) LOAN GUARANTEES FOR WATER, WASTEWATER,
AND ESSENTIAL COMMUNITY FACILITIES LOANS.—Section
306(a) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1925(a)) (as amended by section 625) is
amended by adding at the end the following:
‘‘(25) LOAN GUARANTEES FOR WATER, WASTE-
WATER, 
AND
ESSENTIAL
COMMUNITY
FACILITIES
LOANS.—
‘‘(A) IN
GENERAL.—The Secretary may
guarantee under this title a loan made to finance
a community facility or water or waste facility
project, including a loan financed by the net
proceeds 
of 
a 
bond 
described 
in 
section
144(a)(12)(B)(ii) of the Internal Revenue Code
of 1986.
‘‘(B) REQUIREMENTS.—To be eligible for a
loan guarantee under subparagraph (A), an in-
dividual or entity offering to purchase the loan
must demonstrate to the Secretary that the per-
son has—
‘‘(i) the capabilities and resources nec-
essary to service the loan in a manner that
ensures the continued performance of the
loan, as determined by the Secretary; and
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‘‘(ii) the ability to generate capital to
provide borrowers of the loan with the addi-
tional credit necessary to properly service
the loan.’’.
(b) LOAN GUARANTEES FOR CERTAIN LOANS.—Sec-
tion 310B of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1932) is amended by adding at the end
the following:
‘‘(h) LOAN GUARANTEE FOR CERTAIN LOANS.—The
Secretary may guarantee loans made in subsection (a) to
finance the issuance of bonds for the projects described in
section 306(a)(25).’’.
SEC. 627. RURAL FIREFIGHTERS AND EMERGENCY PER-
SONNEL GRANT PROGRAM.
Section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)) (as amended by section
626(a)) is amended by adding at the end the following:
‘‘(26) RURAL
FIREFIGHTERS
AND
EMERGENCY
MEDICAL PERSONNEL GRANT PROGRAM.—
‘‘(A) IN
GENERAL.—The Secretary may
make grants to units of general local government
and Indian tribes (as defined in section 4 of the
Indian Self-Determination and Education As-
sistance Act (25 U.S.C. 450b)) to pay the cost of
training firefighters and emergency medical per-
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sonnel in firefighting, emergency medical prac-
tices, and responding to hazardous materials and
bioagents in rural areas.
‘‘(B) USE OF FUNDS.—
‘‘(i) SCHOLARSHIPS.—
‘‘(I) IN GENERAL.—Not less than
60 percent of the amounts made avail-
able for competitively awarded grants
under this paragraph shall be used to
provide grants to fund partial scholar-
ships for training of individuals at
training centers approved by the Sec-
retary.
‘‘(II) 
PRIORITY.—In 
awarding
grants under this clause, the Secretary
shall give priority to grant applicants
with relatively low transportation costs
considering the location of the grant
applicant and the proposed location of
the training.
‘‘(ii) GRANTS
FOR
TRAINING
CEN-
TERS.—
‘‘(I) EXISTING CENTERS.—
‘‘(aa) IN GENERAL.—A grant
under subparagraph (A) may be
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used to provide financial assist-
ance to State and regional centers
that provide training for fire-
fighters and emergency medical
personnel for improvements to the
training facility, equipment, cur-
ricula, and personnel.
‘‘(bb) 
LIMITATION.—Not
more than $2,000,000 shall be
provided to any single training
center for any fiscal year under
this subclause.
‘‘(II) ESTABLISHMENT
OF
NEW
CENTERS.—
‘‘(aa) IN GENERAL.—A grant
under subparagraph (A) may be
used to provide the Federal share
of the costs of establishing a re-
gional training center for fire-
fighters and emergency medical
personnel.
‘‘(bb) FEDERAL SHARE.—The
amount of a grant under this sub-
clause for a training center shall
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not exceed 50 percent of the cost of
establishing the training center.
‘‘(C) FUNDING.—
‘‘(i) IN GENERAL.—Out of any funds
in the Treasury not otherwise appropriated,
the Secretary of the Treasury shall transfer
to the Secretary of Agriculture to carry out
this paragraph—
‘‘(I) not later than 30 days after
the date of enactment of this Act,
$10,000,000; and
‘‘(II) on October 1, 2002, and
each October 1 thereafter through Octo-
ber 1, 2005, $30,000,000.
‘‘(ii) RECEIPT AND ACCEPTANCE.—The
Secretary shall be entitled to receive, shall
accept, and shall use to carry out this sec-
tion the funds transferred under clause (i),
without further appropriation.
‘‘(iii) 
AVAILABILITY
OF
FUNDS.—
Funds transferred under clause (i) shall re-
main available until expended.’’.
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SEC. 628. TRIBAL COLLEGE AND UNIVERSITY ESSENTIAL
COMMUNITY FACILITIES.
Section 306(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)) (as amended by section
627) is amended by adding at the end the following:
‘‘(27) TRIBAL COLLEGE AND UNIVERSITY ESSEN-
TIAL COMMUNITY FACILITIES.—
‘‘(A) IN
GENERAL.—The Secretary may
make grants to tribal colleges and universities
(as defined in section 316 of the Higher Edu-
cation Act of 1965 (20 U.S.C. 1059c)) to provide
the Federal share of the cost of developing spe-
cific tribal college or university essential commu-
nity facilities in rural areas.
‘‘(B) FEDERAL SHARE.—
‘‘(i) IN GENERAL.—Except as provided
in clauses (ii) and (iii), the Secretary shall,
by regulation, establish the maximum per-
centage of the cost of the facility that may
be covered by a grant under this paragraph.
‘‘(ii) MAXIMUM AMOUNT.—The amount
of a grant provided under this paragraph
for a facility shall not exceed 75 percent of
the cost of developing the facility.
‘‘(iii) GRADUATED
SCALE.—The Sec-
retary shall provide for a graduated scale of
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the percentages of the cost covered by a
grant made under this paragraph, with
higher percentages for facilities in commu-
nities that have lower community popu-
lation and income levels, as determined by
the Secretary.
‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There is authorized to be appropriated
to carry out this paragraph $10,000,000 for each
of fiscal years 2003 through 2006.’’.
SEC. 629. EMERGENCY COMMUNITY WATER ASSISTANCE
GRANT PROGRAM.
Section 306A(i) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926a(i)) is amended by strik-
ing ‘‘2002’’ and inserting ‘‘2006’’.
SEC. 630. WATER AND WASTE FACILITY GRANTS FOR NA-
TIVE AMERICAN TRIBES.
Section 306C of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1926c(e)) is amended by striking
subsection (e) and inserting the following:
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—
‘‘(1) IN
GENERAL.—Subject to paragraph (2),
there is authorized to be appropriated—
‘‘(A) 
for 
grants 
under 
this 
section,
$30,000,000 for each fiscal year;
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‘‘(B) 
for 
loans 
under 
this 
section,
$30,000,000 for each fiscal year; and
‘‘(C) for grants under this section to benefit
Indian tribes (as defined in section 4 of the In-
dian Self-Determination and Education Assist-
ance Act (25 U.S.C. 450b)), $20,000,000 for each
fiscal year.
‘‘(2) EXCEPTION.—An entity eligible to receive
funding through a grant made under section 306D
shall not be eligible for a grant from funds made
available under subparagraph (1)(C).’’.
SEC. 631. WATER SYSTEMS FOR RURAL AND NATIVE VIL-
LAGES IN ALASKA.
Section 306D(d)(1) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926d(d)(1)) is amended
by striking ‘‘and 2002’’ and inserting ‘‘through 2006’’.
SEC. 632. RURAL BUSINESS ENTERPRISE GRANTS.
Section 310B(c)(1) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1932(c)(1)) is amended—
(1) by striking ‘‘The Secretary’’ and inserting
the following:
‘‘(A) GRANTS.—The Secretary’’; and
(2) by adding at the end the following:
‘‘(B) SMALL AND EMERGING PRIVATE BUSI-
NESS ENTERPRISES.—
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‘‘(i) IN GENERAL.—For the purpose of
subparagraph (A), a small and emerging
private business enterprise shall include (re-
gardless of the number of employees or oper-
ating capital of the enterprise) an eligible
nonprofit entity, or other tax exempt orga-
nization, with a principal office in an area
that is located—
‘‘(I) on land of an existing or
former Native American reservation;
and
‘‘(II) in a city, town, or unincor-
porated area that has a population of
no more than 5,000 inhabitants.
‘‘(ii) USE OF GRANT.—An eligible non-
profit entity, or other tax exempt organiza-
tion, described in clause (i) may use assist-
ance provided under this paragraph to cre-
ate, expand, or operate value-added proc-
essing in an area described in clause (i) in
connection with production agriculture.
‘‘(iii) PRIORITY.—In making grants
under this paragraph, the Secretary shall
give priority to grants that will be used to
provide assistance to eligible nonprofit enti-
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ties and other tax exempt organizations de-
scribed in clause (i).’’.
SEC. 633. RURAL COOPERATIVE DEVELOPMENT GRANTS.
Section 310B(e) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1932(e)) is amended—
(1) in paragraph (5)(F), before the period at the
end the following: ‘‘, except that the Secretary shall
not require non-Federal financial support in an
amount that is greater than 5 percent in the case of
a 1994 institution (as defined in section 532 of the
Equity in Educational Land-Grant Status Act of
1994 (7 U.S.C. 301 note; Public Law 103–382))’’;
and
(2) in paragraph (9), by striking ‘‘2002’’ and in-
serting ‘‘2006’’.
SEC. 634. GRANTS TO BROADCASTING SYSTEMS.
Section 310B(f) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1932(f)) is amended by adding
at the end the following:
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
this subsection $5,000,000 for each of fiscal years
2002 through 2006.’’.
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SEC. 635. BUSINESS AND INDUSTRY LOAN MODIFICATIONS.
Section 3l0B of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1932) is amended by striking sub-
section (g) and inserting the following:
‘‘(g) BUSINESS AND INDUSTRY DIRECT AND GUARAN-
TEED LOANS.—
‘‘(1) LOAN GUARANTEES FOR THE PURCHASE OF
COOPERATIVE STOCK.—
‘‘(A) 
NEW
AND
EXPANDING
COOPERA-
TIVES.—
‘‘(i) IN GENERAL.—The Secretary may
guarantee a loan under subsection (a) to
farmers, ranchers, or cooperatives for the
purpose of purchasing start-up capital stock
for the expansion or creation of a coopera-
tive venture that will process agricultural
commodities or otherwise process value-
added agricultural products.
‘‘(ii) FINANCIAL CONDITION.—In deter-
mining the appropriateness of a loan guar-
antee 
under 
this 
subparagraph, 
the
Secretary—
‘‘(I) shall fully review the feasi-
bility and other relevant aspects of the
cooperative venture to be established;
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‘‘(II) may not require a review of
the financial condition or statements of
any individual farmer or rancher in-
volved in the cooperative, other than
the applicant for a guarantee under
this subparagraph; and
‘‘(III) shall base any guarantee, to
the maximum extent practicable, on
the merits of the cooperative venture to
be established.
‘‘(iii) COLLATERAL.—As a condition of
making a loan guarantee under this sub-
paragraph, the Secretary may not require
additional collateral by a farmer or ranch-
er, other than stock purchased or issued
pursuant to the loan and guarantee of the
loan.
‘‘(iv) ELIGIBILITY.—To be eligible for
a loan guarantee under this subparagraph,
a farmer or rancher must produce the agri-
cultural commodity that will be processed
by the cooperative.
‘‘(v) PROCESSING CONTRACTS DURING
INITIAL
PERIOD.—The 
cooperative, 
for
which a farmer or rancher receives a guar-
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antee to purchase stock under this subpara-
graph, may contract for services to process
agricultural commodities, or otherwise proc-
ess value-added agricultural products, dur-
ing the 5-year period beginning on the date
of the startup of the cooperative in order to
provide adequate time for the planning and
construction of the processing facility of the
cooperative.
‘‘(B) EXISTING
COOPERATIVES.—The Sec-
retary may guarantee a loan under subsection
(a) to a farmer or rancher to join a cooperative
in order to sell the agricultural commodities or
products produced by the farmer or rancher.
‘‘(C) FINANCIAL INFORMATION.—Financial
information required by the Secretary from a
farmer or rancher as a condition of making a
loan guarantee under this paragraph shall be
provided in the manner generally required by
commercial agricultural lenders in the area.
‘‘(2) LOANS TO COOPERATIVES.—
‘‘(A) IN
GENERAL.—The Secretary may
make or guarantee a loan under subsection (a)
to a cooperative that is headquartered in a met-
ropolitan area if the loan is used for a project
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or venture described in subsection (a) that is lo-
cated in a rural area.
‘‘(B) REFINANCING.—A cooperative organi-
zation owned by farmers or ranchers that is eli-
gible for a business and industry loan under
made or guaranteed under subsection (a) shall be
eligible to refinance an existing loan with a
lender if—
‘‘(i) the cooperative organization—
‘‘(I) is current and performing
with respect to the existing loan; and
‘‘(II) is not, and has not been, in
payment default, or the collateral has
not been converted, with respect to the
existing loan; and
‘‘(ii) there is adequate security or full
collateral for the refinanced loan.
‘‘(3) BUSINESS AND INDUSTRY LOAN APPRAIS-
ALS.—The Secretary may require that any appraisal
made in connection with a business and industry
loan made or guaranteed under subsection (a) be con-
ducted by a specialized appraiser that uses standards
that are similar to standards used for similar pur-
poses in the private sector, as determined by the Sec-
retary.
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‘‘(4) FEES.—The Secretary may assess a 1-time
fee for any loan guaranteed under subsection (a) in
an amount that does not exceed 2 percent of the guar-
anteed principal portion of the loan.’’.
SEC. 636. VALUE-ADDED INTERMEDIARY RELENDING PRO-
GRAM.
Section 310B of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1932) (as amended by section
626(b)) is amended by adding at the end the following:
‘‘(i) VALUE-ADDED INTERMEDIARY RELENDING PRO-
GRAM.—
‘‘(1) IN GENERAL.—In accordance with this sub-
section, the Secretary shall make loans under the
terms and conditions of the intermediary relending
program established under section 1323(b)(2)(C) of
the Food Security Act of 1985 (7 U.S.C. 1932 note;
Public Law 99–198).
‘‘(2) LOANS.—Using funds made available to
carry out this subsection, the Secretary shall make
loans to eligible intermediaries to make loans to ulti-
mate recipients, under the terms and conditions of the
intermediary relending program, for projects to estab-
lish, enlarge, and operate enterprises that add value
to agricultural commodities and products of agricul-
tural commodities.
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‘‘(3) 
ELIGIBLE
INTERMEDIARIES.—Inter-
mediaries that are eligible to receive loans under
paragraph (2) shall include State agencies.
‘‘(4) PREFERENCE FOR BIOENERGY PROJECTS.—
In making loans using loan funds made available
under paragraph (2), an eligible intermediary shall
give preference to bioenergy projects in accordance
with regulations promulgated by the Secretary.
‘‘(5) COMPOSITION OF CAPITAL.—The capital for
a project carried out by an ultimate recipient and as-
sisted with loan funds made available under para-
graph (2) shall be comprised of—
‘‘(A) not more than 15 percent of the total
cost of a project; and
‘‘(B) not less than 50 percent of the equity
funds provided by agricultural producers.
‘‘(6) LOAN CONDITIONS.—
‘‘(A) TERMS OF LOANS.—A loan made to an
intermediary using loan funds made available
under paragraph (2) shall have a term of not to
exceed 30 years.
‘‘(B) INTEREST.—The interest rate on such
a loan shall be—
‘‘(i) in the case of each of the first 2
years of the loan period, 0 percent; and
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‘‘(ii) in the case of each of the remain-
ing years of the loan period, 2 percent.
‘‘(7) LIMITATIONS ON AMOUNT OF LOAN FUNDS
PROVIDED.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), an intermediary or ultimate
recipient shall be eligible to receive not more
than $2,000,000 of the loan funds made available
under paragraph (2).
‘‘(B) STATE AGENCIES.—Subparagraph (A)
shall not apply in the case of a State agency
with respect to loan funds provided to the State
agency as an intermediary.
‘‘(8) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
this subsection $15,000,000 for each of fiscal years
2003 through 2006.’’.
SEC. 637. USE OF RURAL DEVELOPMENT LOANS AND
GRANTS FOR OTHER PURPOSES.
Subtitle A of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1921 et seq.) (as amended by section
508) is amended by adding at the end the following:
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‘‘SEC. 310G. USE OF RURAL DEVELOPMENT LOANS AND
GRANTS FOR OTHER PURPOSES.
‘‘If, after making a loan or a grant described in section
381E(d), the Secretary determines that the circumstances
under which the loan or grant was made have sufficiently
changed to make the project or activity for which the loan
or grant was made available no longer appropriate, the Sec-
retary may allow the loan borrower or grant recipient to
use property (real and personal) purchased or improved
with the loan or grant funds, or proceeds from the sale of
property (real and personal) purchased with such funds, for
another project or activity that (as determined by the Sec-
retary)—
‘‘(1) will be carried out in the same area as the
original project or activity;
‘‘(2) meets the criteria for a loan or a grant de-
scribed in section 381E(d); and
‘‘(3) satisfies such additional requirements as are
established by the Secretary.’’.
SEC. 638. SIMPLIFIED APPLICATION FORMS FOR LOAN
GUARANTEES.
Section 333A of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1983a) (as amended by section
526) is amended by striking subsection (g) and inserting
the following:
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‘‘(g) SIMPLIFIED APPLICATION FORMS
FOR LOAN
GUARANTEES.—
‘‘(1) IN GENERAL.—The Secretary shall provide
to lenders a short, simplified application form for
guarantees under this title of—
‘‘(A) farmer program loans the principal
amount of which is $100,000 or less; and
‘‘(B) business and industry guaranteed
loans under section 310B(a)(1) the principal
amount of which is—
‘‘(i) in the case of a loan guarantee
made during fiscal year 2002 or 2003,
$400,000 or less; and
‘‘(ii) in the case of a loan guarantee
made during any subsequent fiscal year—
‘‘(I) $400,000 or less; or
‘‘(II) if the Secretary determines
that there is not a significant increased
risk of a default on the loan, $600,000
or less.
‘‘(2) WATER AND WASTE DISPOSAL GRANTS AND
LOANS.—The Secretary shall develop an application
process that accelerates, to the maximum extent prac-
ticable, the processing of applications for water and
waste disposal grants or direct or guaranteed loans
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under paragraph (1) or (2) of section 306(a) the
grant award amount or principal loan amount, re-
spectively, of which is $300,000 or less.
‘‘(3) ADMINISTRATION.—In developing an appli-
cation under this subsection, the Secretary shall—
‘‘(A) consult with commercial and coopera-
tive lenders; and
‘‘(B) ensure that—
‘‘(i) the form can be completed manu-
ally or electronically, at the option of the
lender;
‘‘(ii) the form minimizes the docu-
mentation required to accompany the form;
‘‘(iii) the cost of completing and proc-
essing the form is minimal; and
‘‘(iv) the form can be completed and
processed in an expeditious manner.’’.
SEC. 639. DEFINITION OF RURAL AND RURAL AREA.
(a) IN GENERAL.—Section 343(a) of the Consolidated
Farm and Rural Development Act (7 U.S.C. 1991(a)) is
amended by adding at the end the following:
‘‘(13) RURAL AND RURAL AREA.—
‘‘(A) IN
GENERAL.—Except as otherwise
provided in this paragraph, the terms ‘rural’
and ‘rural area’ mean a city, town, or unincor-
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porated area that has a population of 50,000 in-
habitants or less, other than an urbanized area
immediately adjacent to a city, town, or unin-
corporated area that has a population in excess
of 50,000 inhabitants.
‘‘(B) WATER AND WASTE DISPOSAL GRANTS
AND DIRECT AND GUARANTEED LOANS.—For the
purpose of water and waste disposal grants and
direct and guaranteed loans provided under
paragraphs (1) and (2) of section 306(a), the
terms ‘rural’ and ‘rural area’ mean a city, town,
or unincorporated area that has a population of
no more than 10,000 inhabitants.
‘‘(C) COMMUNITY
FACILITY
LOANS
AND
GRANTS.—For the purpose of community facility
direct and guaranteed loans and grants under
paragraphs (1), (19), (20), and (21) of section
306(a), the terms ‘rural’ and ‘rural area’ mean
a city, town, or unincorporated area that has a
population of no more than 50,000 inhabitants.
‘‘(D) BUSINESS AND INDUSTRY DIRECT AND
GUARANTEED LOANS.—For the purpose of busi-
ness and industry direct and guaranteed loans
under section 310B(a)(1), the terms ‘rural’ and
‘rural area’ mean any area other than a city or
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town that has a population of greater than
50,000 inhabitants and the immediately adjacent
urbanized area of such city or town.
‘‘(E) 
MULTIJURISDICTIONAL
REGIONAL
PLANNING ORGANIZATIONS; NATIONAL RURAL DE-
VELOPMENT
PARTNERSHIP.—In 
sections
306(a)(23) and 377, the term ‘rural area’
means—
‘‘(i) all the territory of a State that is
not within the boundary of any standard
metropolitan statistical area; and
‘‘(ii) all territory within any standard
metropolitan statistical area within a cen-
sus tract having a population density of less
than 20 persons per square mile, as deter-
mined by the Secretary according to the
most recent census of the United States as
of any date.
‘‘(F) RURAL ENTREPRENEURS AND MICRO-
ENTERPRISE
ASSISTANCE
PROGRAM; NATIONAL
RURAL
COOPERATIVE
AND
BUSINESS
EQUITY
FUND; 
RURAL
BUSINESS
INVESTMENT
PRO-
GRAM.—In section 378 and subtitles G and H,
the term ‘rural area’ means an area that is
located—
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‘‘(i) outside a standard metropolitan
statistical area; or
‘‘(ii) within a community that has a
population of 50,000 inhabitants or less.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 306(a) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926(a)) is amend-
ed by striking paragraph (7).
(2) Section 381A of the Consolidated Farm and
Rural 
Development 
Act 
(7 
U.S.C. 
2009) 
is
amended—
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) and
(3) as paragraphs (1) and (2), respectively.
(3) Section 735 of the Agriculture, Rural Devel-
opment, Food and Drug Administration, and Related
Agencies Appropriations Act, 1999 (112 Stat. 2681–
29) is repealed.
SEC. 640. RURAL ENTREPRENEURS AND MICROENTERPRISE
ASSISTANCE PROGRAM.
Subtitle D of the Consolidated Farm and Rural Devel-
opment Act (as amended by section 612) is amended by
adding at the end the following:
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‘‘SEC. 378. RURAL ENTREPRENEURS AND MICROENTER-
PRISE ASSISTANCE PROGRAM.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ECONOMICALLY
DISADVANTAGED
MICRO-
ENTREPRENEUR.—The term ‘economically disadvan-
taged microentrepreneur’ means an owner, majority
owner, or developer of a microenterprise that has the
ability to compete in the private sector but has been
impaired due to diminished capital and credit oppor-
tunities, as compared to other microentrepreneurs in
the industry.
‘‘(2) INDIAN TRIBE.—The term ‘Indian tribe’ has
the meaning given the term in section 4 of the Indian
Self-Determination and Education Assistance Act (25
U.S.C. 450b).
‘‘(3) INTERMEDIARY.—The term ‘intermediary’
means a private, nonprofit entity that provides
assistance—
‘‘(A) to a microenterprise development orga-
nization; or
‘‘(B) for a microenterprise development pro-
gram.
‘‘(4) LOW-INCOME INDIVIDUAL.—The term ‘low-
income individual’ means an individual with an in-
come (adjusted for family size) of not more than the
greater of—
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‘‘(A) 80 percent of median income of an
area; or
‘‘(B) 80 percent of the statewide nonmetro-
politan area median income.
‘‘(5) MICROCREDIT.—The term ‘microcredit’
means a business loan or loan guarantee of not more
than $35,000 provided to a rural entrepreneur.
‘‘(6) MICROENTERPISE.—The term ‘microenter-
prise’ means a sole proprietorship, joint enterprise,
limited liability company, partnership, corporation,
or cooperative that—
‘‘(A) has 5 or fewer employees; and
‘‘(B) is unable to obtain sufficient credit,
equity, or banking services elsewhere, as deter-
mined by the Secretary.
‘‘(7) MICROENTERPRISE DEVELOPMENT ORGANI-
ZATION.—
‘‘(A) IN GENERAL.—The term ‘microenter-
prise development organization’ means a non-
profit entity that provides training and tech-
nical assistance to rural entrepreneurs and ac-
cess to capital or another service described in
subsection (c) to rural entrepreneurs.
‘‘(B) INCLUSIONS.—The term ‘microenter-
prise development organization’ includes an or-
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ganization described in subparagraph (A) with a
demonstrated record of delivering services to eco-
nomically disadvantaged microentrepreneurs.
‘‘(8) MICROENTERPRISE
DEVELOPMENT
PRO-
GRAM.—The term ‘microenterprise development orga-
nization’ means a program administered by a organi-
zation serving a rural area.
‘‘(9) MICROENTREPRENEUR.—The term ‘micro-
entrepreneur’ means the owner, operator, or developer
of a microenterprise.
‘‘(10) PROGRAM.—The term ‘program’ means the
rural entrepreneur and microenterprise program es-
tablished under subsection (b)(1).
‘‘(11) QUALIFIED
ORGANIZATION.—The term
‘qualified organization’ means—
‘‘(A) a microenterprise development organi-
zation or microenterprise development program
that has a demonstrated record of delivering
microenterprise services to rural entrepreneurs,
as demonstrated by the development of an effec-
tive plan of action and the possession of nec-
essary resources to deliver microenterprise serv-
ices to rural entrepreneurs effectively, as deter-
mined by the Secretary;
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‘‘(B) an intermediary that has a dem-
onstrated record of delivery assistance to micro-
enterprise development organizations or micro-
enterprise development programs;
‘‘(C) a microenterprise development organi-
zation or microenterprise development program
that—
‘‘(i) serves rural entrepreneurs; and
‘‘(ii) enters into an agreement with a
local community, in conjunction with a
State or local government or Indian tribe,
to provide assistance described in subsection
(c);
‘‘(D) an Indian tribe, the tribal government
of which certifies to the Secretary that no micro-
enterprise development organization or micro-
enterprise development program exists under the
jurisdiction of the Indian tribe; or
‘‘(E) a group of 2 or more organizations or
Indian tribes described in subparagraph (A),
(B), (C), or (D) that agree to act jointly as a
qualified organization under this section.
‘‘(12) RURAL CAPACITY BUILDING SERVICE.—The
term ‘rural capacity building service’ means a service
provided to an organization that—
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‘‘(A) is, or is in the process of becoming, a
microenterprise development organization or
microenterprise development program; and
‘‘(B) serves rural areas for the purpose of
enhancing the ability of the organization to pro-
vide training, technical assistance, and other re-
lated services to rural entrepreneurs.
‘‘(13) RURAL ENTREPRENEUR.—The term ‘rural
entrepreneur’ means a microentrepreneur, or prospec-
tive microentrepreneur—
‘‘(A) the principal place of business of
which is in a rural area; and
‘‘(B) that is unable to obtain sufficient
training, technical assistance, or microcredit
elsewhere, as determined by the Secretary.
‘‘(14) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture, acting through the Rural
Business-Cooperative Service.
‘‘(15) TRAINING AND TECHNICAL ASSISTANCE.—
‘‘(A) IN GENERAL.—The term ‘training and
technical assistance’ means assistance provided
to rural entrepreneurs to develop the skills the
rural entrepreneurs need to plan, market, and
manage their own business.
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‘‘(B) INCLUSIONS.—The term ‘training and
technical assistance’ includes assistance provided
for the purpose of—
‘‘(i) 
enhancing 
business 
planning,
marketing, management, or financial man-
agement skills; and
‘‘(ii) obtaining microcredit.
‘‘(16) TRIBAL GOVERNMENT.—The term ‘tribal
government’ means the governing body of an Indian
tribe.
‘‘(b) ESTABLISHMENT.—
‘‘(1) IN GENERAL.—From amounts made avail-
able under subsection (h), the Secretary shall establish
a rural entrepreneur and microenterprise program.
‘‘(2) PURPOSE.—The purpose of the program
shall be to provide low- and moderate-income individ-
uals with—
‘‘(A) the skills necessary to establish new
small businesses in rural areas; and
‘‘(B) continuing technical assistance as the
individuals begin operating the small businesses.
‘‘(c) ASSISTANCE.—
‘‘(1) IN GENERAL.—The Secretary may make a
grant under this section to a qualified organization
to—
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‘‘(A) provide training, technical assistance,
or microcredit to a rural entrepreneur;
‘‘(B) provide training, operational support,
or a rural capacity building service to a quali-
fied organization to assist the qualified organiza-
tion in developing microenterprise training,
technical assistance, and other related services;
‘‘(C) assist in researching and developing
the best practices in delivering training, tech-
nical assistance, and microcredit to rural entre-
preneurs; and
‘‘(D) to carry out such other projects and
activities as the Secretary determines are con-
sistent with the purposes of this section.
‘‘(2) ALLOCATION.—
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (B) and (C), of the amount of funds
made available for a fiscal year to make grants
under this section, the Secretary shall ensure
that—
‘‘(i) not less than 75 percent of funds
are used to carry out activities described in
paragraph (1)(A); and
‘‘(ii) not more than 25 percent of the
funds are used to carry out activities de-
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scribed in subparagraphs (B) through (D)
of paragraph (1).
‘‘(B) LIMITATION ON GRANT AMOUNT.—No
single qualified organization may receive more
than 10 percent of the total funds that are made
available for a fiscal year to carry out this sec-
tion.
‘‘(C) 
ADMINISTRATIVE
EXPENSES.—Not
more than 15 percent of assistance received by a
qualified organization for a fiscal year under
this section may be used for administrative ex-
penses.
‘‘(d) SUBGRANTS.—Subject to such regulations as the
Secretary may promulgate, a qualified organization that
receives a grant under this section may use the grant to
provide assistance to other qualified organizations, such as
small or emerging qualified organizations.
‘‘(e) LOW-INCOME INDIVIDUALS.—The Secretary shall
ensure that not less than 50 percent of the grants made
under this section is used to benefit low-income individuals
identified by the Secretary, including individuals residing
on Indian reservations.
‘‘(f) DIVERSITY.—In making grants under this section,
the Secretary shall ensure, to the maximum extent prac-
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ticable, 
that 
grant 
recipients 
include 
qualified
organizations—
‘‘(1) of varying sizes; and
‘‘(2) that serve racially and ethnically diverse
populations.
‘‘(g) COST SHARING.—
‘‘(1) FEDERAL SHARE.—The Federal share of the
cost of a project carried out using funds from a grant
under this section shall be 75 percent.
‘‘(2) FORM OF NON-FEDERAL SHARE.—The non-
Federal share of the cost of a project described in
paragraph (1) may be provided—
‘‘(A) in cash (including through fees, grants
(including 
community 
development 
block
grants), and gifts); or
‘‘(B) in kind.
‘‘(h) FUNDING.—
‘‘(1) IN GENERAL.—Not later than 30 days after
the date of enactment of this Act, and on October 1,
2002, and each October 1 thereafter through October
1, 2005, out of any funds in the Treasury not other-
wise appropriated, the Secretary of the Treasury shall
transfer to the Secretary of Agriculture to carry out
this section $10,000,000, to remain available until ex-
pended.
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‘‘(2) RECEIPT AND ACCEPTANCE.—The Secretary
shall be entitled to receive, shall accept, and shall use
to carry out this section the funds transferred under
paragraph (1), without further appropriation.’’.
SEC. 641. RURAL SENIORS.
(a) INTERAGENCY COORDINATING COMMITTEE
FOR
RURAL SENIORS.—Subtitle D of the Consolidated Farm
and Rural Development Act (7 U.S.C. 1981 et seq.) (as
amended by section 640) is amended by adding at the end
the following:
‘‘SEC. 379. INTERAGENCY COORDINATING COMMITTEE FOR
RURAL SENIORS.
‘‘(a) IN GENERAL.—The Secretary shall establish an
interagency coordinating committee (referred to in this sec-
tion as the ‘Committee’) to examine the special problems
of rural seniors.
‘‘(b) MEMBERSHIP.—The Committee shall be com-
prised of—
‘‘(1) the Undersecretary of Agriculture for Rural
Development, who shall serve as chairperson of the
Committee;
‘‘(2) 2 representatives of the Secretary of Health
and Human Services, of whom—
‘‘(A) 1 shall have expertise in the field of
health care; and
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‘‘(B) 1 shall have expertise in the field of
programs under the Older Americans Act of 1965
(42 U.S.C. 3001 et seq.);
‘‘(3) 1 representative of the Secretary of Housing
and Urban Development;
‘‘(4) 1 representative of the Secretary of the Inte-
rior;
‘‘(5) 1 representative of the Secretary of Trans-
portation; and
‘‘(6) representatives of such other Federal agen-
cies as the Secretary may designate.
‘‘(c) DUTIES.—The Committee shall—
‘‘(1) study health care, transportation, tech-
nology, housing, accessibility, and other areas of need
of rural seniors;
‘‘(2) identify successful examples of senior care
programs in rural communities that could serve as
models for other rural communities; and
‘‘(3) not later than 1 year after the date of enact-
ment of this section, submit to the Secretary, the
Committee on Agriculture of the House of Representa-
tives, and the Committee on Agriculture, Nutrition,
and Forestry of the Senate recommendations for legis-
lative and administrative action.
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‘‘(d) FUNDING.—Funds available to any Federal agen-
cy may be used to carry out interagency activities under
this section.’’.
(b) GRANTS FOR PROGRAMS FOR RURAL SENIORS.—
Subtitle D of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1981 et seq.) (as amended by subsection
(a)) is amended by adding at the end the following:
‘‘SEC. 379A. GRANTS FOR PROGRAMS FOR RURAL SENIORS.
‘‘(a) IN GENERAL.—The Secretary shall make grants
to nonprofit organizations (including cooperatives) to pay
the Federal share of the cost of programs that—
‘‘(1) provide facilities, equipment, and tech-
nology for seniors in a rural area; and
‘‘(2) may be replicated in other rural areas.
‘‘(b) FEDERAL SHARE.—The Federal share of a grant
under this section shall be not more than 20 percent of the
cost of a program described in subsection (a).
‘‘(c) LEVERAGING.—In selecting programs to receive
grants under section, the Secretary shall give priority to
proposals that leverage resources to meet multiple rural
community goals.
‘‘(d) AUTHORIZATION OF APPROPRIATIONS.—There is
authorized to be appropriated to carry out this section
$25,000,000 for each of fiscal years 2003 through 2006.’’.
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(c) RESERVATION OF COMMUNITY FACILITIES PRO-
GRAM
FUNDS
FOR
SENIOR
FACILITIES.—Section
306(a)(19) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1926(a)(19)) is amended by adding at
the end the following:
‘‘(C) RESERVATION OF FUNDS FOR SENIOR
FACILITIES.—
‘‘(i) IN
GENERAL.—For each fiscal
year, not less than 12.5 percent of the funds
made available to carry out this paragraph
shall be reserved for grants to pay the Fed-
eral share of the cost of developing and con-
structing senior facilities, or carrying out
other projects that mainly benefit seniors, in
rural areas.
‘‘(ii) RELEASE.—Funds reserved under
clause (i) for a fiscal year shall be reserved
only until April 1 of the fiscal year.’’.
SEC. 642. CHILDREN’S DAY CARE FACILITIES.
Section 306(a)(19) of the Consolidated Farm and
Rural Development Act (7 U.S.C. 1926(a)(19)) (as amend-
ed by section 641(c)) is amended by adding at the end the
following:
‘‘(D) RESERVATION OF FUNDS FOR CHIL-
DREN’S DAY CARE FACILITIES.—
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‘‘(i) IN
GENERAL.—For each fiscal
year, not less than 10 percent of the funds
made available to carry out this paragraph
shall be reserved for grants to pay the Fed-
eral share of the cost of developing and con-
structing day care facilities for children in
rural areas.
‘‘(ii) RELEASE.—Funds reserved under
clause (i) for a fiscal year shall be reserved
only until April 1 of the fiscal year.’’.
SEC. 643. RURAL TELEWORK.
Subtitle D of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1981 et seq.) (as amended by section
641(b)) is amended by adding at the end the following:
‘‘SEC. 379B. RURAL TELEWORK.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) ELIGIBLE ORGANIZATION.—The term ‘eligi-
ble organization’ means a nonprofit entity, an edu-
cational institution, an Indian tribe (as defined in
section 4 of the Indian Self-Determination and Edu-
cation Assistance Act (25 U.S.C. 450b)), or any other
organization that meets the requirements of this sec-
tion and such other requirements as are established by
the Secretary.
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‘‘(2) INSTITUTE.—The term ‘institute’ means a
regional rural telework institute established using a
grant under subsection (b).
‘‘(3) TELEWORK.—The term ‘telework’ means the
use of telecommunications to perform work functions
at a rural work center located outside the place of
business of an employer.
‘‘(b) RURAL TELEWORK INSTITUTE.—
‘‘(1) IN GENERAL.—The Secretary shall make a
grant to an eligible organization to pay the Federal
share of the cost of establishing and operating a na-
tional rural telework institute to carry out projects
described in paragraph (4).
‘‘(2) ELIGIBLE ORGANIZATIONS.—The Secretary
shall establish criteria that an organization shall
meet to be eligible to receive a grant under this sub-
section.
‘‘(3) DEADLINE FOR INITIAL GRANT.—Not later
than 1 year after the date on which funds are first
made available to carry out this subsection, the Sec-
retary shall make the initial grant under this sub-
section.
‘‘(4) PROJECTS.—The institute shall use grant
funds obtained under this subsection to carry out a
5-year project—
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‘‘(A) to serve as a clearinghouse for telework
research and development;
‘‘(B) to conduct outreach to rural commu-
nities and rural workers;
‘‘(C) to develop and share best practices in
rural telework throughout the United States;
‘‘(D) to develop innovative, market-driven
telework projects and joint ventures with the pri-
vate sector that employ workers in rural areas in
jobs that promote economic self-sufficiency;
‘‘(E) to share information about the design
and implementation of telework arrangements;
‘‘(F) to support private sector businesses
that are transitioning to telework;
‘‘(G) to support and assist telework projects
and individuals at the State and local level; and
‘‘(H) to perform such other functions as the
Secretary considers appropriate.
‘‘(5) NON-FEDERAL SHARE.—
‘‘(A) IN GENERAL.—As a condition of re-
ceiving a grant under this subsection, an eligible
organization shall agree to obtain, after the ap-
plication of the eligible organization has been
approved and notice of award has been issued,
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contributions from non-Federal sources that are
equal to—
‘‘(i) during each of the first, second,
and third years of a project, 50 percent of
the amount of the grant; and
‘‘(ii) during each of the fourth and
fifth years of the project, 100 percent of the
amount of the grant.
‘‘(B) 
INDIAN
TRIBES.—Notwithstanding
subparagraph (A), an Indian tribe may use Fed-
eral funds made available to the tribe for self-
governance to pay the non-Federal contributions
required under subparagraph (A).
‘‘(C) FORM.—The non-Federal contributions
required under subparagraph (A) may be in the
form of in-kind contributions, including office
equipment, office space, and services.
‘‘(c) TELEWORK GRANTS.—
‘‘(1) IN GENERAL.—Subject to paragraphs (2)
through (5), the Secretary shall make grants to eligi-
ble entities to pay the Federal share of the cost of—
‘‘(A) obtaining equipment and facilities to
establish or expand telework locations in rural
areas; and
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‘‘(B) operating telework locations in rural
areas.
‘‘(2) ELIGIBLE ORGANIZATIONS.—To be eligible
to receive a grant under this subsection, an eligible
entity shall—
‘‘(A) be a nonprofit organization or edu-
cational institution in a rural area; and
‘‘(B) submit to, and receive the approval of,
the Secretary of an application for the grant
that demonstrates that the eligible entity has
adequate resources and capabilities to establish
or expand a telework location in a rural area.
‘‘(3) NON-FEDERAL SHARE.—
‘‘(A) IN GENERAL.—As a condition of re-
ceiving a grant under this subsection, an eligible
organization shall agree to obtain, after the ap-
plication of the eligible organization has been
approved and notice of award has been issued,
contributions from non-Federal sources that are
equal to 50 percent of the amount of the grant.
‘‘(B) 
INDIAN
TRIBES.—Notwithstanding
subparagraph (A), an Indian tribe may use Fed-
eral funds made available to the tribe for self-
governance to pay the non-Federal contributions
required under subparagraph (A).