deposited in the individual development ac-
count. 
‘‘(F) TREATMENT OF FUNDS.— 
‘‘(i) IN GENERAL.—Of the funds de-
scribed in this paragraph, only the funds 
deposited by the eligible participant in a 
personal savings account under subpara-
graph (A)(i)(I) (including interest accruing 
on those funds) may be considered to be 
income. 
‘‘(ii) DETERMINATION OF ELIGIBILITY 
AND
AMOUNT.—For purposes of deter-
mining eligibility for, or the amount of as-
sistance provided under, any need-based 
Federal 
or 
federally-assisted 
program, 
amounts held in an individual development 
account shall be excluded. 
‘‘(5) ELIGIBLE EXPENDITURES.— 
‘‘(A) IN
GENERAL.—An eligible expendi-
ture described in this subparagraph is an ex-
penditure— 
‘‘(i) to purchase farmland; 
‘‘(ii) to make a down payment on an 
accepted purchase offer for farmland; 
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‘‘(iii) to make mortgage payments for 
up to 180 days after the date of purchase 
of farmland; 
‘‘(iv) to purchase farm equipment or 
production, storage, or marketing infra-
structure; 
‘‘(v) to purchase breeding stock; 
‘‘(vi) to purchase fruit or nut trees or 
trees to harvest for timber; 
‘‘(vii) to purchase other assets that 
improve the financial viability of the farm-
ing operation; 
‘‘(viii) to make a transition to organic 
production; 
‘‘(ix) to pay training or mentorship 
expenses to facilitate specific entrepre-
neurial agricultural activities; and 
‘‘(x) for other similar expenditures, as 
determined by the Secretary. 
‘‘(B) TIMING.— 
‘‘(i) IN
GENERAL.—An eligible ex-
penditure may be made at any time during 
the 2-year period beginning on the date on 
which the last matching funds are provided 
under paragraph (4)(B)(ii)(I). 
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‘‘(ii) UNEXPENDED
FUNDS.—Funds 
remaining in an individual development ac-
count after the period described in clause 
(i) shall revert to the reserve fund of the 
demonstration program. 
‘‘(c) APPLICATIONS.— 
‘‘(1) ANNOUNCEMENT
OF
DEMONSTRATION 
PROGRAMS.—Not later than 180 days after the date 
of enactment of this section, the Secretary shall— 
‘‘(A) publicly announce the availability of 
funding under this section for demonstration 
programs; and 
‘‘(B) ensure that applications to carry out 
demonstration programs are widely available to 
qualified entities. 
‘‘(2) SUBMISSION.—Not later than 270 days 
after the date of enactment of this section, a quali-
fied entity may submit to the Secretary an applica-
tion to carry out a demonstration program. 
‘‘(3) CRITERIA.—In considering whether to ap-
prove an application to carry out a demonstration 
program, the Secretary shall assess— 
‘‘(A) the degree to which the demonstra-
tion program described in the application is 
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likely to aid eligible participants in successfully 
pursuing new farming opportunities; 
‘‘(B) the experience and ability of the 
qualified entity to responsibly administer the 
project; 
‘‘(C) the experience and ability of the 
qualified entity in recruiting, educating, and as-
sisting eligible participants to increase economic 
independence and pursue or advance farming 
opportunities; 
‘‘(D) the aggregate amount of direct funds 
from non-Federal public sector and private 
sources that are formally committed to the 
demonstration program as matching contribu-
tions; 
‘‘(E) the adequacy of the plan for pro-
viding information relevant to an evaluation of 
the demonstration program; and 
‘‘(F) such other factors as the Secretary 
considers to be appropriate. 
‘‘(4) PREFERENCES.—In considering an appli-
cation to conduct a demonstration program under 
this part, the Secretary shall give preference to an 
application from a qualified entity that— 
‘‘(A) demonstrates— 
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‘‘(i) a track record of serving targeted 
clients; and 
‘‘(ii) expertise in dealing with finan-
cial management aspects of farming; or 
‘‘(B)(i) targets underserved and socially 
disadvantaged farmers or ranchers; and 
‘‘(ii) demonstrates a track record of reach-
ing and serving those clients. 
‘‘(5) APPROVAL.— 
‘‘(A) IN GENERAL.—Not later than 1 year 
after the date of enactment of this section, in 
accordance with this section, the Secretary 
shall, on a competitive basis, approve such ap-
plications to conduct demonstration programs 
as the Secretary considers appropriate. 
‘‘(B) DIVERSITY.—The Secretary shall en-
sure, to the maximum extent practicable, that 
approved applications involve demonstration 
programs for a range of geographic areas and 
diverse populations. 
‘‘(6) TERM OF AUTHORITY.—If the Secretary 
approves an application to carry out a demonstration 
program, the Secretary shall authorize the applying 
qualified entity to carry out the project for a period 
of 5 years, plus an additional 2 years for the making 
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of eligible expenditures in accordance with sub-
section (b)(5)(B). 
‘‘(d) GRANT AUTHORITY.— 
‘‘(1) IN GENERAL.—For each year during which 
a demonstration program is carried out under this 
section, the Secretary shall make a grant to the 
qualified entity authorized to carry out the dem-
onstration program. 
‘‘(2) MAXIMUM AMOUNT OF GRANTS.—The ag-
gregate amount of grant funds provided to a dem-
onstration program carried out under this section 
shall not exceed $300,000. 
‘‘(e) REPORTS.— 
‘‘(1) ANNUAL PROGRESS REPORTS.— 
‘‘(A) IN
GENERAL.—Not later than 60 
days after the end of the calendar year in which 
the Secretary authorizes a qualified entity to 
carry out a demonstration program, and annu-
ally thereafter until the conclusion of the dem-
onstration program, the qualified entity shall 
prepare an annual report that includes, for the 
period covered by the report— 
‘‘(i) an evaluation of the progress of 
the demonstration program; 
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‘‘(ii) information about the dem-
onstration program and eligible partici-
pants; 
‘‘(iii) the number and characteristics 
of individuals that have made 1 or more 
deposits into an individual development ac-
count; 
‘‘(iv) the amounts in the reserve fund 
established with respect to the program; 
‘‘(v) the amounts deposited in the in-
dividual development accounts; 
‘‘(vi) the amounts withdrawn from the 
individual development accounts and the 
purposes for which the amounts were with-
drawn; 
‘‘(vii) the balances remaining in the 
individual development accounts; 
‘‘(viii)(I) the development account 
characteristics (such as threshold amounts 
and match rates) required to stimulate 
participation in the demonstration pro-
gram; and 
‘‘(II) how the characteristics vary 
among different populations or commu-
nities; 
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‘‘(ix)(I) what service configurations of 
the qualified entity (such as peer support, 
structured planning exercises, mentoring, 
and financial management) increased the 
rate and consistency of participation in the 
demonstration program; and 
‘‘(II) how the configurations varied 
among different populations or commu-
nities; and 
‘‘(x) such other information as the 
Secretary may require. 
‘‘(B) SUBMISSION OF REPORTS.—A quali-
fied entity shall submit each report required 
under subparagraph (A) to the Secretary. 
‘‘(C) 5-YEAR EVALUATION.—In addition to 
the annual evaluations required under subpara-
graph (A)(i), not later than 5 years after the 
date on which a qualified entity begins to carry 
out a demonstration program, the qualified en-
tity shall submit to the Secretary a comprehen-
sive evaluation of the demonstration program. 
‘‘(2) REPORTS BY THE SECRETARY.— 
‘‘(A) INTERIM REPORTS.—Not later than 
90 days after the end of the calendar year in 
which the Secretary first authorizes a qualified 
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entity to carry out a demonstration program 
under this section, and annually thereafter until 
all demonstration programs are completed, the 
Secretary shall submit to Congress an interim 
report that describes the reports submitted by 
each demonstration program under paragraph 
(1). 
‘‘(B) FINAL REPORTS.—Not later than 1 
year after the date on which all demonstration 
programs under this section are concluded, the 
Secretary shall submit to Congress a final re-
port that describes the results and findings of 
all reports and evaluations carried out under 
this section. 
‘‘(f) REGULATIONS.—The Secretary shall promulgate 
regulations to carry out this section, including regulations 
relating to— 
‘‘(1) the termination of demonstration pro-
grams; 
‘‘(2) control of the reserve funds in the case of 
such a termination; 
‘‘(3) transfer of demonstration programs to 
other qualified entities; and 
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‘‘(4) remissions from a reserve fund in a case 
in which a demonstration program is terminated 
without transfer to a new qualified entity. 
‘‘(g) FUNDING.— 
‘‘(1) IN GENERAL.—On October 1, 2007, and 
on each October 1 thereafter through October 1, 
2012, out of any funds in the Treasury not other-
wise appropriated, the Secretary of the Treasury 
shall transfer to the Secretary to carry out this sec-
tion $5,000,000, to remain available until expended. 
‘‘(2) ADMINISTRATION AND TRAINING.—Of the 
total funds made available under paragraph (1), not 
more than 5 percent for administration and 5 per-
cent for training may be used by the Secretary— 
‘‘(A) to administer the pilot program; and 
‘‘(B) to provide training, or hire 1 or more 
consultants to provide training, to instruct 
qualified entities in carrying out demonstration 
programs, including payment of reasonable 
costs incurred with respect to that training 
for— 
‘‘(i) staff or consultant travel; 
‘‘(ii) lodging; 
‘‘(iii) meals; and 
‘‘(iv) materials. 
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‘‘(3) RECEIPT
AND
ACCEPTANCE.—The Sec-
retary shall be entitled to receive, shall accept, and 
shall use to carry out this section the funds trans-
ferred under paragraph (1), without further appro-
priation.’’. 
SEC. 4. DOWN PAYMENT LOAN PROGRAM. 
Section 310E of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1935) is amended— 
(1) in subsection (b)— 
(A) by striking paragraph (1) and insert-
ing the following: 
‘‘(1) PRINCIPAL.— 
‘‘(A) PURCHASE
PRICE
OF
$500,000
OR 
LESS.—Except as provided in subparagraph 
(C), each loan made under this section for a 
purchase price that is $500,000 or less, shall be 
in an amount that does not exceed 45 percent 
of the lesser of— 
‘‘(i) the purchase price; or 
‘‘(ii) the appraised value of the farm 
or ranch to be acquired. 
‘‘(B) PURCHASE
PRICE
GREATER
THAN 
$500,000.—Except as provided in subparagraph 
(C), each loan made under this section for a 
purchase price that is greater than $500,000, 
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shall be in an amount that does not exceed 45 
percent of the lesser of— 
‘‘(i) $500,000; or 
‘‘(ii) the appraised value of the farm 
or ranch to be acquired. 
‘‘(C) BORROWER
REQUEST.—A borrower 
may request a lower loan amount than an 
amount specified in subparagraph (A) or (B).’’; 
(B) by striking paragraph (2) and insert-
ing the following: 
‘‘(2) INTEREST
RATE.—The interest rate on 
any loan made by the Secretary under this section 
shall be a rate equal to the greater of— 
‘‘(A) the difference obtained by subtracting 
4 percent from the interest rate for regular 
ownership loans under this subtitle; or 
‘‘(B) 1 percent.’’; and 
(C) in paragraph (4)— 
(i) by striking ‘‘Each’’ and inserting 
the following: 
‘‘(A) IN GENERAL.—Each’’; and 
(ii) by adding at the end the fol-
lowing: 
‘‘(B) FIRST INSTALLMENT.—The first in-
stallment for a loan made under this section 
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shall be due 2 years after the date on which the 
loan is made, with annual installments being 
due thereafter.’’; 
(2) in subsection (c)— 
(A) by striking paragraph (2); and 
(B) by redesignating paragraph (3) as 
paragraph (2); and 
(3) in subsection (d)— 
(A) in paragraph (3), by striking the 
‘‘and’’ at the end; 
(B) in paragraph (4), by striking the pe-
riod at the end and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(5) establish annual performance goals to pro-
mote the use of the down payment loan program and 
other joint financing participation loans as the pre-
ferred choice for direct real estate loans made by 
any lender to a qualified beginning farmer or ranch-
er.’’. 
SEC. 5. BEGINNING FARMER OR RANCHER CONTRACT 
LAND SALES PROGRAM. 
Section 310F of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1936) is amended to read as 
follows: 
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‘‘SEC. 310F. BEGINNING FARMER OR RANCHER CONTRACT 
LAND SALES PROGRAM. 
‘‘(a) IN GENERAL.—Subject to subsection (c), the 
Secretary shall, in accordance with each condition de-
scribed in subsection (b), guarantee any loan made by a 
private seller of a farm or ranch to a qualified beginning 
farmer or rancher on a contract land sale basis. 
‘‘(b) CONDITIONS FOR GUARANTEE.—To receive a 
guarantee for a loan by the Secretary under subsection 
(a)— 
‘‘(1) the qualified beginning farmer or rancher 
shall— 
‘‘(A) on the date on which the contract 
land sale that is the subject of the loan is com-
plete, own or operate the farm or ranch that is 
the subject of the contract land sale; 
‘‘(B) have a credit history that— 
‘‘(i) includes a record of satisfactory 
debt repayment, as determined by the Sec-
retary; and 
‘‘(ii) is acceptable to the Secretary; 
and 
‘‘(C) demonstrate to the Secretary that the 
qualified beginning farmer or rancher is unable 
to obtain sufficient credit without a guarantee 
to finance any actual need of the qualified be-
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ginning farmer or rancher at a reasonable rate 
or term; 
‘‘(2) the loan made by the private seller of a 
farm or ranch to the qualified beginning farmer or 
rancher on a contract land sale basis shall meet ap-
plicable underwriting criteria, as determined by the 
Secretary; and 
‘‘(3) to carry out the loan— 
‘‘(A) a commercial lending institution shall 
agree to serve as an escrow agent; or 
‘‘(B) the private seller of a farm or ranch, 
in cooperation with the qualified beginning 
farmer or rancher, shall use an appropriate al-
ternate arrangement, as determined by the Sec-
retary. 
‘‘(c) LIMITATIONS.— 
‘‘(1) DOWN PAYMENT.—The Secretary shall not 
guarantee a loan made by a private seller of a farm 
or ranch to a qualified beginning farmer or rancher 
under subsection (a) if the contribution of the quali-
fied beginning farmer or rancher to the down pay-
ment for the farm or ranch that is the subject of the 
contract land sale would be an amount less than 5 
percent of the purchase price of the farm or ranch. 
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‘‘(2) MAXIMUM
PURCHASE
PRICE.—The Sec-
retary shall not guarantee a loan made by a private 
seller of a farm or ranch to a qualified beginning 
farmer or rancher under subsection (a) if the pur-
chase price or the appraisal value of the farm or 
ranch that is the subject of the contract land sale 
is an amount greater than $500,000. 
‘‘(d) PERIOD OF GUARANTEE.—The Secretary shall 
guarantee a loan made by a private seller of a farm or 
ranch to a qualified beginning farmer or rancher under 
subsection (a) for a 10-year period beginning on the date 
on which the Secretary guarantees the loan. 
‘‘(e) GUARANTEE PLANS.—A private seller of a farm 
or ranch who makes a loan to a qualified beginning farmer 
or rancher that is guaranteed by the Secretary under sub-
section (a) may select— 
‘‘(1) a prompt payment guarantee plan, which 
shall cover— 
‘‘(A) 3 amortized annual installments; or 
‘‘(B) an amount equal to 3 annual install-
ments (including an amount equal to the total 
cost of any tax and insurance incurred during 
the period covered by the annual installments); 
or 
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‘‘(2) a standard guarantee plan, which shall 
cover an amount equal to 90 percent of the out-
standing principal of the loan made by the private 
seller of a farm or ranch to the qualified beginning 
farmer or rancher.’’. 
SEC. 6. INVENTORY SALES PREFERENCES. 
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 the subparagraph heading, by 
inserting ‘‘; 
SOCIALLY
DISADVANTAGED 
FARMER OR RANCHER’’ after ‘‘OR RANCH-
ER’’; 
(ii) in clause (i), by inserting ‘‘or a so-
cially disadvantaged farmer or rancher’’ 
after ‘‘or rancher’’; 
(iii) in clause (ii), by inserting ‘‘or so-
cially disadvantaged farmer or rancher’’ 
after ‘‘or rancher’’; 
(iv) in clause (iii), by inserting ‘‘or a 
socially disadvantaged farmer or rancher’’ 
after ‘‘or rancher’’; and 
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(v) in clause (iv), by inserting ‘‘and 
socially disadvantaged farmers and ranch-
ers’’ after ‘‘and ranchers’’; and 
(B) in subparagraph (C), by inserting ‘‘or 
a socially disadvantaged farmer or rancher’’ 
after ‘‘or rancher’’; 
(2) in paragraph (5)(B)— 
(A) in clause (i)— 
(i) in the clause heading, by inserting 
‘‘; SOCIALLY DISADVANTAGED FARMER OR 
RANCHER’’ after ‘‘OR RANCHER’’; 
(ii) by inserting ‘‘or a socially dis-
advantaged farmer or rancher’’ after ‘‘a 
beginning farmer or rancher’’; and 
(iii) by inserting ‘‘or the socially dis-
advantaged farmer or rancher’’ after ‘‘the 
beginning farmer or rancher’’; and 
(B) in clause (ii)— 
(i) in the matter preceding subclause 
(I), by inserting ‘‘or a socially disadvan-
taged farmer or rancher’’ after ‘‘or ranch-
er’’; and 
(ii) in subclause (II), by inserting ‘‘or 
the socially disadvantaged farmer or ranch-
er’’ after ‘‘or rancher’’; and 
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(3) in paragraph (6)— 
(A) in subparagraph (A), by inserting ‘‘or 
a socially disadvantaged farmer or rancher’’ 
after ‘‘or rancher’’; and 
(B) in subparagraph (C)— 
(i) in clause (i)(I), by inserting ‘‘and 
socially disadvantaged farmers and ranch-
ers’’ after ‘‘and ranchers’’; and 
(ii) in clause (ii), by inserting ‘‘or so-
cially disadvantaged farmers or ranchers’’ 
after ‘‘or ranchers’’. 
SEC. 7. AGRICULTURAL LOANS. 
(a) DIRECT LOANS.—Section 302 of the Consolidated 
Farm and Rural Development Act (7 U.S.C. 1922) is 
amended by striking subsection (b) and inserting the fol-
lowing: 
‘‘(b) DIRECT LOANS.—The Secretary may make a di-
rect loan under this subtitle only to a farmer or rancher 
who has participated in the business operations of a farm 
or ranch for not less than 3 years.’’. 
(b) LIMITATIONS ON AMOUNT OF FARM OWNERSHIP 
LOANS.—Section 305(a)(2) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1925(a)(2)) is amended 
by striking ‘‘$200,000’’ and inserting ‘‘$300,000’’. 
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(c) LIMITATIONS
ON
AMOUNT
OF
OPERATING 
LOANS.—Section 311 of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1941) is amended by 
striking subsection (c). 
(d) LIMITATIONS
ON
AMOUNT
OF
OPERATING 
LOANS.—Section 313(a)(1) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1943(a)(1)) is amended 
by striking ‘‘$200,000’’ and inserting ‘‘$300,000’’. 
(e) TRANSITION
TO
PRIVATE
COMMERCIAL
OR 
OTHER SOURCES OF CREDIT.—Subtitle D of the Consoli-
dated Farm and Rural Development Act is amended by 
inserting after section 344 (7 U.S.C. 1992) the following: 
‘‘SEC. 345. TRANSITION TO PRIVATE COMMERCIAL OR 
OTHER SOURCES OF CREDIT. 
‘‘(a) IN GENERAL.—In making or insuring a farm 
loan under subtitle A or B, the Secretary shall establish 
a plan and promulgate regulations (including performance 
criteria) that promote the goal of transitioning borrowers 
to private commercial credit and other sources of credit 
in the shortest practicable period of time. 
‘‘(b) COORDINATION.—In carrying out this section, 
the Secretary shall integrate and coordinate the transition 
policy described in subsection (a) with— 
‘‘(1) the borrower training program established 
by section 359; 
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‘‘(2) the loan assessment process established by 
section 360; 
‘‘(3) the supervised credit requirement estab-
lished by section 361; 
‘‘(4) the market placement program established 
by section 362; and 
‘‘(5) other appropriate programs and authori-
ties, as determined by the Secretary.’’. 
SEC. 8. LOAN AUTHORIZATION LEVELS AND FUND SET- 
ASIDES. 
(a) AUTHORIZATION OF LOANS.—Section 346(b) of 
the Consolidated Farm and Rural Development Act (7 
U.S.C. 1994(b)) is amended— 
(1) in paragraph (1)— 
(A) in the matter preceding subparagraph 
(A), by striking ‘‘$3,796,000,000’’ and insert-
ing ‘‘$4,226,000,000’’; and 
(B) in subparagraph (A)— 
(i) in the matter preceding clause (i), 
by striking ‘‘$770,000,000’’ and inserting 
‘‘$1,200,000,000’’; 
(ii) 
in 
clause 
(i), 
by 
striking 
‘‘$205,000,000’’ 
and 
inserting 
‘‘$350,000,000’’; and 
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(iii) 
in 
clause 
(ii), 
by 
striking 
‘‘$565,000,000’’ 
and 
inserting 
‘‘$850,000,000’’; 
(2) in paragraph (2)— 
(A) in the paragraph heading, by striking 
‘‘AND RANCHERS’’ and inserting ‘‘OR RANCHERS 
OR
SOCIALLY
DISADVANTAGED
FARMERS
OR 
RANCHERS’’; 
(B) in subparagraph (A)— 
(i) in clauses (i)(I), (ii), and (iii), by 
striking ‘‘and ranchers’’ each place it ap-
pears and inserting ‘‘or ranchers or so-
cially disadvantaged farmers or ranchers’’; 
(ii) in clause (i)— 
(I) in subclause (I), by striking 
‘‘70 
percent’’ 
and 
inserting 
‘‘an 
amount that is not less than 75 per-
cent of the total amount made avail-
able under paragraph (1)’’; and 
(II) in subclause (II)— 
(aa) in the subclause head-
ing, by inserting ‘‘; PARTICIPA-
TION
LOANS’’ after ‘‘PAYMENT 
LOANS’’; 
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(bb) by striking ‘‘60 per-
cent’’ and inserting ‘‘an amount 
not less than 2⁄3 of the amount 
reserved under subclause (I)’’; 
and 
(cc) by inserting ‘‘and par-
ticipation loans’’ after ‘‘section 
310E’’; 
(iii) in clause (ii)(III), by striking 
‘‘2003 through 2007, 35 percent’’ and in-
serting ‘‘2008 through 2012, an amount 
that is not less than 50 percent of the total 
amount made available under paragraph 
(1)’’; and 
(iv) in clause (iii)— 
(I) in the clause heading, by 
striking ‘‘SEPTEMBER 1’’ and insert-
ing ‘‘AUGUST 15’’; and 
(II) by striking ‘‘September 1’’ 
and inserting ‘‘August 15’’; 
(C) in subparagraph (B)— 
(i) in clause (i), by striking ‘‘25 per-
cent’’ and inserting ‘‘an amount that is not 
less than 40 percent of the total amount 
made available under paragraph (1)’’; and 
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(ii) in clauses (i) and (ii), by striking 
‘‘farmers and ranchers’’ each place it ap-
pears and inserting ‘‘farmers or ranchers’’; 
and 
(D) in the subparagraph heading of sub-
paragraph (C), by striking ‘‘FARMERS
AND 
RANCHERS’’ 
and 
inserting 
‘‘FARMERS
OR 
RANCHERS’’; 
(3) by striking paragraph (3); and 
(4) by redesignating paragraph (4) as para-
graph (3). 
(b) REALLOCATION.—Section 346(b) of the Consoli-
dated Farm and Rural Development Act (7 U.S.C. 
1994(b)) (as amended by subsection (a)) is amended by 
adding at the end the following: 
‘‘(4) REALLOCATION.— 
‘‘(A) QUALIFIED BEGINNING FARMERS OR 
RANCHERS.—Any funds reserved and allocated 
under paragraph (2) for qualified beginning 
farmers or ranchers in a State but not used 
within the State as of the applicable date speci-
fied in subparagraph (A)(iii) or (B)(iii) of para-
graph (2), shall be redistributed by the Sec-
retary, in order of priority, to make or guar-
antee loans for— 
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‘‘(i) pending applications from quali-
fied beginning farmers or ranchers in other 
States for the same type and category of 
loan under this title as the unused funds 
were originally made available; 
‘‘(ii) pending applications from quali-
fied beginning farmers or ranchers within 
the State or in other States for farm own-
ership (including down payment loans) or 
operating loans or loan guarantees under 
this title; 
‘‘(iii) pending applications from so-
cially disadvantaged farmers or ranchers 
within the State or in other States for 
farm ownership (including down payment 
loans) or operating loans or loan guaran-
tees under this title; 
‘‘(iv) pending applications within the 
State for farm ownership (including down 
payment loans) or operating loans or loan 
guarantees under this title; and 
‘‘(v) pending applications for farm 
ownership (including down payment loans) 
or operating loans or loan guarantees 
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under this title in other States, as deter-
mined by the Secretary. 
‘‘(B) SOCIALLY DISADVANTAGED FARMERS 
OR RANCHERS.—Any funds reserved and allo-
cated under paragraph (2) for socially dis-
advantaged farmers or ranchers in a State but 
not used within the State as of the applicable 
date specified in subparagraph (A)(iii) or 
(B)(iii) of paragraph (2), shall be redistributed 
by the Secretary, in order of priority, to make 
or guarantee loans for— 
‘‘(i) pending applications from socially 
disadvantaged farmers or ranchers in other 
States for the same type and category of 
loan under this title as the unused funds 
were made available; 
‘‘(ii) pending applications from so-
cially disadvantaged farmers or ranchers 
within the State or in other States for 
farm ownership (including down payment 
loans) or operating loans or loan guaran-
tees under this title; 
‘‘(iii) pending applications from begin-
ning farmers or ranchers within the State 
or in other States for farm ownership (in-
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cluding down payment loans) or operating 
loans or loan guarantees under this title; 
‘‘(iv) pending applications within the 
State for farm ownership (including down 
payment loans) or operating loans or loan 
guarantees under this title; and 
‘‘(v) pending applications for farm 
ownership (including down payment loans) 
or operating loans or loan guarantees 
under this title in other States, as deter-
mined by the Secretary.’’. 
SEC. 9. SOIL AND WATER CONSERVATION AND PROTEC-
TION. 
Section 304 of the Consolidated Farm and Rural De-
velopment Act (7 U.S.C. 1924) is amended by striking 
subsections (b) and (c) and inserting the following: 
‘‘(b) PRIORITY.—In making or guaranteeing loans 
under this section, the Secretary shall give priority to— 
‘‘(1) qualified beginning farmers or ranchers; 
‘‘(2) socially disadvantaged farmers or ranch-
ers; 
‘‘(3) owners or tenants who use the loans to 
convert to sustainable or organic agricultural pro-
duction systems; and 
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‘‘(4) producers who use the loans to build con-
servation structures or establish conservation prac-
tices to comply with section 1212 of the Food Secu-
rity Act of 1985 (16 U.S.C. 3812).’’. 
SEC. 10. CONSERVATION RESERVE PROGRAM TRANSITION 
INCENTIVES. 
Section 1235(c) of the Food Security Act of 1985 (16 
U.S.C. 3835(c)) is amended— 
(1) in paragraph (1)(B)— 
(A) in clause (ii), by striking ‘‘or’’ at the 
end; 
(B) by redesignating clause (iii) as clause 
(iv); and 
(C) by inserting after clause (ii) the fol-
lowing: 
‘‘(iii) to facilitate a transition of land 
subject to the contract from a retired or 
retiring owner or operator to a beginning 
farmer or rancher or socially disadvan-
taged farmer or rancher for the purpose of 
returning some or all of the land into pro-
duction using sustainable grazing or crop 
production methods; or’’; and 
(2) by adding at the end the following: 
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‘‘(3) TRANSITION
OPTION
FOR
BEGINNING 
FARMERS OR RANCHERS AND SOCIALLY DISADVAN-
TAGED FARMERS OR RANCHERS.— 
‘‘(A) IN GENERAL.—In the case of a con-
tract modification approved in order to facili-
tate the transfer of land subject to a contract 
from a retired or retiring owner or operator to 
a beginning farmer or rancher or socially dis-
advantaged farmer or rancher under paragraph 
(1)(B)(iii), the Secretary shall— 
‘‘(i) beginning on the date that is 1 
year before the date of termination of the 
contract— 
‘‘(I) allow the beginning farmer 
or rancher or socially disadvantaged 
farmer or rancher, in conjunction with 
the retired or retiring owner or oper-
ator, to make conservation and land 
improvements; and 
‘‘(II) allow the beginning farmer 
or rancher or socially disadvantaged 
farmer or rancher, at the election of 
the farmer or rancher, to begin the 
certification process under the Or-
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ganic Foods Production Act of 1990 
(7 U.S.C. 6501 et seq.); 
‘‘(ii) beginning on the date of termi-
nation of the contract, allow the retired or 
retiring owner or operator to sell or lease 
(under a long-term lease or a lease with an 
option to purchase) to the beginning farm-
er or rancher or socially disadvantaged 
farmer or rancher the land subject to the 
contract for production purposes; 
‘‘(iii) require the beginning farmer or 
rancher or socially disadvantaged farmer 
or rancher to develop and implement a 
comprehensive 
conservation 
plan 
that 
meets such sustainability criteria as the 
Secretary may establish; 
‘‘(iv) provide to the beginning farmer 
or rancher or socially disadvantaged farm-
er or rancher an opportunity to enroll in 
the conservation security program estab-
lished under subchapter A of chapter 2 or 
the environmental quality incentives pro-
gram established under chapter 4 by not 
later than the date on which the farmer or 
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rancher takes possession, through owner-
ship or lease, of the land; and 
‘‘(v) continue to make annual pay-
ments to the retired or retiring owner or 
operator for not more than an additional 2 
years after the date of termination of the 
contract, if the retired or retiring owner or 
operator is not a family member (as de-
fined in section 1001A(b)(3)(B) of the 
Food Security Act of 1985 (7 U.S.C. 
1308–1(b)(3)(B)) of the beginning farmer 
or rancher or socially disadvantaged farm-
er or rancher. 
‘‘(B) 
REENROLLMENT.—The 
Secretary 
shall provide to a beginning farmer or rancher 
or socially disadvantaged farmer or rancher de-
scribed in subparagraph (A) the option to re-
enroll any applicable partial field conservation 
practice that is— 
‘‘(i) eligible for enrollment under the 
continuous signup requirement of section 
1231(h)(4)(B); and 
‘‘(ii) part of an approved comprehen-
sive conservation plan.’’. 
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SEC. 11. CONSERVATION COST SHARING. 
(a) CONSERVATION SECURITY PROGRAM.—Section 
1238C(b)(1) of the Food Security Act of 1985 (16 U.S.C. 
3838c(b)(1)) is amended in subparagraphs (C)(ii), (D)(ii), 
and (E)(ii), by striking ‘‘rancher, 90 percent’’ each place 
it appears and inserting ‘‘rancher, or a socially disadvan-
taged farmer or rancher, does not exceed the lesser of 90 
percent or an amount equal to 15 percent more than the 
rate offered to other farmers’’. 
(b) ENVIRONMENTAL QUALITY INCENTIVES PRO-
GRAM.—Section 1240B(d)(2) of the Food Security Act of 
1985 (16 U.S.C. 3839aa–2(d)(2)) is amended by striking 
subparagraph (A) and inserting the following: 
‘‘(A) BEGINNING FARMERS OR RANCHERS 
AND
SOCIALLY
DISADVANTAGED
FARMERS
OR 
RANCHERS.—The Secretary may increase the 
amount provided to a producer under para-
graph (1) that is a beginning farmer or rancher 
or a socially disadvantaged farmer or rancher, 
as determined by the Secretary, to an amount 
not more than the lesser of— 
‘‘(i) 90 percent; and 
‘‘(ii) 15 percent more than the rate 
offered to other farmers or ranchers.’’. 
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(c) CONSERVATION
INCENTIVES
AND
RESERVED 
FUNDING.—Section 1244 of the Food Security Act of 
1985 (16 U.S.C. 3844) is amended— 
(1) in subsection (a)— 
(A) by redesignating paragraphs (1) and 
(2) as subparagraphs (A) and (B), respectively, 
and indenting the subparagraphs appropriately; 
(B) by striking ‘‘In carrying out’’ and in-
serting the following: 
‘‘(1) IN GENERAL.—In carrying out’’; 
(C) in paragraph (1) (as designated by 
subparagraph (B)), by striking ‘‘and Indian 
tribes’’ and all that follows through ‘‘agricul-
tural producers’’ and inserting ‘‘, Indian tribes, 
and socially disadvantaged farmers or ranch-
ers’’; and 
(D) by adding at the end the following: 
‘‘(2) REQUIREMENTS.—In carrying out this 
subsection, the Secretary shall— 
‘‘(A) develop a definition of the term ‘be-
ginning farmer or rancher’ that— 
‘‘(i) is based, to the maximum extent 
practicable, on the definition of that term 
under section 343(a) of the Consolidated 
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Farm and Rural Development Act (7 
U.S.C. 1991(a)); and 
‘‘(ii) includes— 
‘‘(I) a fair and reasonable test of 
net worth; and 
‘‘(II) such other criteria as the 
Secretary determines to be appro-
priate; 
‘‘(B) develop and implement cooperative 
agreements with entities, including the Natural 
Resources Conservation Service, Extension enti-
ties, nongovernmental and community-based or-
ganizations, educational institutions, and pri-
vate technical service providers, with expertise 
in addressing the needs of beginning farmers or 
ranchers and socially disadvantaged farmers or 
ranchers to provide— 
‘‘(i) sustainable agricultural systems 
training and technical assistance; and 
‘‘(ii) comprehensive whole-farm con-
servation planning education and technical 
assistance; 
‘‘(C) offer to beginning farmers or ranch-
ers and socially disadvantaged farmers or 
ranchers a special incentive or bonus payment 
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for developing comprehensive whole-farm or 
-ranch resource management system conserva-
tion plans as part of participation in— 
‘‘(i) the conservation security program 
established under subchapter A of chapter 
2 of subtitle D; or 
‘‘(ii) the environmental quality incen-
tives program established under chapter 4 
of that subtitle; 
‘‘(D) provide a substantial number of 
ranking points— 
‘‘(i) for beginning farmers or ranchers 
and socially disadvantaged farmers or 
ranchers within each conservation program 
under this title that uses a ranking system 
to determine enrollment; and 
‘‘(ii) for detailed farm transition plan-
ning under the farmland protection pro-
gram established under subchapter B of 
chapter 2 of subtitle D; and 
‘‘(E) provide such other incentives and 
benefits as the Secretary determines to be ap-
propriate. 
‘‘(3) RESERVATION OF FUNDING.— 
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‘‘(A) IN GENERAL.—Of funds made avail-
able for a fiscal year to carry out this title, the 
Secretary shall reserve, for a period of not less 
than 120 days after the date on which the 
funds are made available— 
‘‘(i) not less than 10 percent for be-
ginning farmers or ranchers; and 
‘‘(ii) not less than 10 percent of funds 
for socially disadvantaged farmers or 
ranchers. 
‘‘(B) 
TECHNICAL
ASSISTANCE.—Of 
amounts reserved under subparagraph (A), the 
Secretary may provide to beginning farmers or 
ranchers and socially disadvantaged farmers or 
ranchers technical assistance at a rate that is 
not more than 15 percent higher than the rate 
that would otherwise apply to the farmers or 
ranchers. 
‘‘(4) EFFECT OF SUBSECTION.—Nothing in this 
subsection prohibits any beginning farmer or ranch-
er or any socially disadvantaged farmer or rancher 
from— 
‘‘(A) participating in any other program; 
or 
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‘‘(B) receiving funds made available under 
this title that are not reserved pursuant to 
paragraph (3)(A).’’. 
SEC. 12. RESEARCH PROGRAMS. 
(a) COMPETITIVE, SPECIAL, AND FACILITIES RE-
SEARCH GRANTS.—Section 2(b)(2) of the Competitive, 
Special, and Facilities Research Grant Act (7 U.S.C. 
450i(b)(2)) is amended— 
(1) in the first sentence of the matter preceding 
subparagraph (A), by striking ‘‘(F)’’ and inserting 
‘‘(G)’’; 
(2) in subparagraph (E), by striking ‘‘and’’ at 
the end; 
(3) in subparagraph (F), by striking the period 
at the end and inserting ‘‘; and’’; and 
(4) by adding at the end the following: 
‘‘(G) areas of concern to beginning farmers 
or ranchers, including— 
‘‘(i) farm transfer and farm entry; 
‘‘(ii) farm transition options for retir-
ing farmers or ranchers; 
‘‘(iii) land tenure; 
‘‘(iv) farm viability; 
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‘‘(v) socially disadvantaged farmers or 
ranchers and immigrant farmers or ranch-
ers; and 
‘‘(vi) production, marketing, conserva-
tion, and risk management alternatives rel-
evant to new and beginning farmers or 
ranchers.’’. 
(b) INITIATIVE
FOR FUTURE AGRICULTURE
AND 
FOOD SYSTEMS.—Section 401(c)(2)(F) of the Agricul-
tural Research, Extension, and Education Reform Act of 
1998 (7 U.S.C. 7621(c)(2)(F)) is amended— 
(1) by striking ‘‘including the viability’’ and in-
serting the following: ‘‘including— 
‘‘(i) the viability’’; and 
(2) by striking ‘‘operations.’’ and inserting the 
following: ‘‘operations; 
‘‘(ii) farm transition options for retir-
ing farmers or ranchers; and 
‘‘(iii) farm transfer and entry alter-
natives for beginning farmers or ranchers 
or socially disadvantaged farmers or ranch-
ers.’’. 
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SEC. 13. RISK MANAGEMENT EDUCATION FOR BEGINNING 
FARMERS OR RANCHERS. 
Section 524(a) of the Federal Crop Insurance Act (7 
U.S.C. 1524(a)) is amended— 
(1) by redesignating paragraph (4) as para-
graph (5); and 
(2) by inserting after paragraph (3) the fol-
lowing: 
‘‘(4) REQUIREMENTS.—In carrying out the pro-
grams established under paragraphs (2) and (3), the 
Secretary shall place special emphasis on risk man-
agement strategies, education, and outreach specifi-
cally targeted at— 
‘‘(A) beginning farmers or ranchers; 
‘‘(B) immigrant farmers or ranchers that 
are attempting to become established producers 
in the United States; 
‘‘(C) socially disadvantaged farmers or 
ranchers; 
‘‘(D) farmers or ranchers that— 
‘‘(i) are preparing to retire; and 
‘‘(ii) are using transition strategies to 
help new farmers or ranchers get started; 
and 
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‘‘(E) new or established farmers or ranch-
ers that are converting production and mar-
keting systems to pursue new markets.’’. 
Æ 
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