Agricultural Credit Improvement Act of 1992
PL 102-554 (H.R.6129), enacted 10/28/1992

106 STAT. 4142 
PUBLIC LAW 102-554—OCT. 28, 1992 
Public Law 102-554 
102d Congress 
An Act 
Oct. 28, 1992 
[H.R. 6129] 
Agricultural 
Credit 
Improvement 
Act of 1992. 
7 u s e 1921 note. 
To amend the Consolidated Farm and Rural Development Act to establish a program 
to aid beginning farmers and ranchers and to improve the operation of the 
Farmers Home Administration, and to amend the Farm Credit Act of 1971, 
and for other purposes. 
Be it enacted by the Senate and House of Representatives 
of 
the United States of 
America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—^This Act may be cited as the "Agricultural 
Credit Improvement Act of 1992". 
(b) TABLE OF CONTENTS.—^The table of contents of this Act 
is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. References to the Consolidated Farm and Rural Development Act. 
Sec. 3. Limitation on aggregate indebtedness. 
Sec. 4. Interest rate for loans sold into secondary market; guaranteed loan fees. 
Sec. 5. Federal-State beginning farmer partnership. 
Sec. 6. Grants for private business enterprises. 
Sec. 7. Down payment loan program. 
Sec. 8. Special assistance to certain qualified beginning farmers and ranchers. 
Sec. 9. Graduation of borrowers with operating loans or guarantees to private com-
mercial credit. 
Sec. 10. Consideration of borrowers for loan service programs. 
Sec. 11. Time period within which county committee is required to meet to consider 
applications for farm ownership and operating loans and guarantees and 
beginning farmer plans. 
12. Increase in period during which county committee loan eligibility certifi-
cation continues in effect. 
13. Processing of applications for farm operating loans. 
14. Graduation of seasoned direct loan borrowers to the loan guarantee pro-
gram. 
15. Simplified application for ^aranteed loans of $50,000 or less. 
16. Inventory lease or lease with option to purchase. 
17. Transfer of Indian lands pledged as collateral for FmHA loans. 
18. Debt service margin requirements; certified lenders program. 
19. Definition of qualified beginning farmer or rancher. 
20. Targeting of funds. 
21. Equal access to FmHA assistance by gender. 
22. State mediation programs. 
23. Regulations. 
24. Technical amendment. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
Sec. 
SEC. 
2. REFERENCES TO THE CONSOLIDATED FARM AND RURAL 
DEVELOPMENT ACT. 
Wherever in this Act an amendment or repeal is expressed 
in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section 
or other provision of the Consolidated Farm and Rural Development 
Act (7 UTS.C. 1921 et seq.), except to the extent otherwise specifi-
cally provided. 
SEC. 3. LIMITATION ON AGGREGATE INDEBTEDNESS. 
Section 305 (7 U.S.C. 1925) is amended by striking "and 310D 
of this title" and inserting "310D, and 310E". 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4143 
SEC. 4. INTEREST RATE FOR LOANS SOLD INTO SECONDARY MARKET; 
GUARANTEED LOAN FEES. 
Section 309(h) (7 U.S.C. 1929(h)) is amended— 
(1) by inserting "(1)" after "(h)"; and 
(2) by adding at the end the following new paragraphs: 
"(2) The interest rate payable by a borrower on the portion 
of a guaranteed loan that is sold by a lender to the secondary 
market under this title may be lower than the interest rate charged 
on the portion retained by the lender, but shall not exceed the 
average interest rate charged by the lender on loans made to 
farm and ranch borrowers. 
"(3) With regard to any loan guarantee on a loan made by 
a commercial or cooperative lender related to a loan made by 
the Secretary under section 310E— 
"(A) the Secretary shall not charge a fee to any person 
(including a lender); and 
"(B) a lender may charge a loan origination and servicing 
fee in an amount not to exceed 1 percent of the amount of 
the loan.". 
SEC. 5. FEDERAL-STATE BEGINNING FARMER PARTNERSHIP. 
Inter-
(a) COORDINATION OF ASSISTANCE FOR QUALIFIED BEGINNING relations^" ^ 
FARMERS AND RANCHERS.—Section 309 (7 U.S.C. 1929) is amended 
by adding at the end the following new subsection: 
"(i)(l) Not later than 60 days after any State expresses to 
the Secretary, in writing, a desire to coordinate the provision of 
financial assistance to qualified beginning farmers and ranchers 
in the State, the Secretary and the State shall conclude a joint 
memorandum of understanding that shall govern the coordination 
of the provision of the financial assistance by the State and the 
Secretary. 
"(2) The memorandum of understanding shall provide that if 
a State beginning farmer program makes a commitment to provide 
a qualified beginning farmer or rancher with financing to establish 
or maintain a viable farming or ranching operation, the Secretary 
shall, subject to applicable law, normal loan approval criteria, and 
the availability of funds provide the farmer or rancher with a 
down payment loan under section 310E or a guarantee of the 
financing provided by the State program, or both. 
"(3) The Secretary shall not charge any person (including a 
lender) any fee with respect to the provision of any guarantee 
under this subsection. 
"(4) The Secretary shall notify each State of the provisions 
of this subsection. 
"(5) As used in paragraph (1), the term 'State beginning farmer 
program' means any program that is— 
"(A) carried out by, or under contract with, a State; and 
"(B) designed to assist persons in obtaining the financial 
assistance necessary to enter agriculture and establish viable 
farming or ranching operations.". 
(b) ADVISORY COMMITTEE.— 
7 use 1921 note. 
(1) ESTABLISHMENT; PURPOSE.—Not later than 18 months 
after the date of enactment of this Act, the Secretary of Agri-
culture shall establish an advisory committee, to be known 
as the "Advisory Committee on Beginning Farmers and Ranch-
ers", which shall provide advice to the Secretary on— 
106 STAT. 4144 
PUBLIC LAW 102-554—OCT. 28, 1992 
(A) the development of the program of coordinated 
assistaiice to qualified beginning farmers and rcmchers 
under section 309(i) of the Consolidated Farm and Rural 
Development Act (as added by subsection (a) of this sec-
tion); 
(B) methods of maximizing the number of new farming 
and ranching opportimities created through the program; 
(C) methods of encouraging States to participate in 
the program; 
(D) the administration of the program; and 
(E) other methods of creating new farming or ranching 
opportimities. 
(2) MEMBERSHIP.—^The Secretary shall appoint the mem-
bers of the Advisory Committee. The Advisory Committee shall 
include representatives from the following: 
(A) The Farmers Home Administration. 
(B) State beginning farmer programs (as defined in 
section 309(iX5) of the (Jonsolidated Farm and Rural Devel-
opment Act (as added by subsection (a) of this section)). 
(C) Commercial lenders. 
(D) Private nonprofit organizations with active begin-
ning farmer or rancher programs. 
(E) The Cooperative Extension Service. 
(F) Community colleges or other educational institu-
tions witli demonstrated experience in training beginning 
farmers or ranchers. 
(G) Other entities or persons providing lending or tech-
nical assistance for qualified beginning farmers or ranchers. 
SEC. 6. GRANTS FOR PRIVATE BUSINESS ENTERPRISES. 
Section 310B(c) (7 U.S.C. 1932(c)) is amended— 
(1) by inserting "(1)" after "(c)"; and 
(2) by adding at the end the following new paragraph: 
"(2) The Secretary may make grants to qualified nonprofit 
organizations for the provision of technical assistance and training 
to rural communities for the purpose of improving passenger 
transportation services or facilities. Assistance provided under this 
paragraph may include on-site technical assistance to local and 
regional governments, public transit agencies, and related nonprofit 
and for-profit organizations in rural areas, the development of train-
ing materials, and the provision of necessary training assistance 
to 
local officials and agencies in rural areas.". 
SEC. 7. DOWN PAYMENT LOAN PROGRAM. 
(a) IN GENERAL.—Subtitle A (7 U.S.C. 1922 et seq.) is amended 
by adding at the end the following new section: 
7 use 1935. 
'9EC.310E. DOWN PAYBIENT LOAN PROGRAM. 
•*(a) IN GENERAL.— 
"(1) ESTABLISHMENT.—^Notwithstanding any other section 
of this subtitle, the Secretary shall establish, within the farm 
ownership loan program established under this subtitle, a pro-
gram under which loans shall be made imder this section 
to Qualified beginning farmers and ranchers for down payments 
on larm ownership loans. 
"(2) ADMINISTRATION.—The Secretary shall be the primary 
coordinator of credit supervision for the down payment loan 
program established under this section, in consultation with 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4145 
the commercial or cooperative lender and, if applicable, the 
contracting credit counseling service selected imder section 
360(c). 
"(b) LOAN TERMS.— 
"(1) PRINCIPAL.—^Each loan made under this section shall 
be in an amount equal to 30 percent of the purchase price 
or appraisal value, whichever is lower, of the farm or ranch 
to be acquired, unless the borrower requests a lesser amount. 
"(2) I
N
T
E
R
E
S
T R
A
T
E
.
—
^
T
h
e interest rate on any loan made 
by the Secretary under this section shall be 4 percent. 
"(3) DURATION.—^Each loan under this section shall be made 
for a period of 10 years or less, at the option of the borrower. 
''(4) REPAYMENT.—^Each borrower of a loan under this sec-
tion shall repay the loan to the Secretary in equal annual 
installments. 
"(5) NATURE OF RETAINED SECURITY INTEREST.—The Sec-
retary shall retain an interest in each farm or ranch acquired 
with a loan made under this section that shall— 
"(A) be secured by the farm or ranch; 
"(B) be junior only to such interests in the farm or 
ranch as may be conveyed at the time of acquisition to 
the person (including a lender) firom whom the borrower 
obtamed a lo€ui used to acquire the farm or ranch; and 
"(C) require the borrower to obtain the permission 
of the Secretary before the borrower may grant an addi-
tional security interest in the farm or rancn. 
"(c) LIMITATIONS.— 
"(1) BORROWERS REQUIRED TO MAKE MINIMUM DOWN PAY-
MENT.—^The Secretary shall not make a loan under this section 
to any borrower with respect to a farm or ranch if the contribu-
tion of the borrower to the down pavment on the farm or 
ranch will be less than 10 percent of the purchase price of 
the farm or ranch. 
"(2) MAXIMUM PRICE OF PROPERTY TO BE ACQUIRED.—The 
Secretary shall not make a loan under this section with respect 
to a farm or ranch for which the purchase price or apprtiisal 
value, whichever is lower, exceeds $250,000. 
**(3) PROHIBITED TYPES OF FINANCING.—The Secretaiy shall 
not make a loan under this section with respect to a farm 
or ranch if the farm or ranch is to be acquired with other 
financing that contains any of the following conditions: 
^(A) The financing is to be amortized over a period 
of less than 30 vears. 
"(B) A balloon payment will be due on the financing 
during the 10-year period beginning on the date the loan 
is to M made by the Secretaiy. 
"(d) ADMINISTRATION.—In carrying out this section, the Sec-
retary shall, to the maximum extent practicable— 
"(1) facilitate the transfer oi farms and ranches from retir-
ing farmers and ranchers to persons eligible for insured loans 
under this subtitle; 
"(2) make efforts to widely publicize the availability of Public 
loans under this section among— 
information. 
"(A) potentially eligible recipients of the loans; 
"(B) retiring farmers and ranchers; and 
"(C) applicants for farm ownership loans under this 
subtitle; 
106 STAT. 4146 
PUBLIC LAW 102-554—OCT. 28, 1992 
"(3) encourage retiring farmers and ranchers to assist in 
the siale of their farms and ranches to qualified beginning 
farmers and ranchers by providing seller financing; and 
"(4) coordinate the loan program established by this section 
with State programs that provide farm ownership or operating 
loans for beginning farmers and ranchers.", 
(b) AVAILABILITY OF FARM OwNERsrap LOANS AND LOAN 
GUARANTEES FOR CERTAIN BEGINNING FARMERS AND RANCHERS.— 
Subtitle A (7 U.S.C. 1922 et seq.) (as amended by subsection (a) 
of this section) is fiirther amended by adding at the end the follow-
ing new section: 
7 USE 1936. 
«SEC. 310F. AVAILABILNY OF FARM OWNERSHIP LOANS AND LOAN 
GUARANTEES FOR CERTAIN QUALIFIED BEGINNING 
FARMERS AND RANCHERS. 
"(a) ASSISTANCE PROHIBITED FOR A LIMITED PERIOD.—Except 
as otherwise provided in this section, if the Secretary approves 
the application of a qualified beginning farmer or rancher (referred 
to in this section as the 'applicant') for assistance under section 
318, the Secretary shall not make a loan under this subtitle to 
the applicant or provide a guarantee under section 309(h) with 
respect to any farm real estate lo£ui made to the applicant. 
"(b) 
AVAILABILITY OF DOWN PAYMENT LOANS.—After 
the 
applicable period, the Secretary may make an insured loan under 
this subtitle, or a down pajrment loan under section 310E, to an 
applicant i
f
— 
"(1) throughout the applicable period, the applicant con-
ducted an operation for which assistance is provided under 
section 318 in accordance with the plan for special assistance; 
and 
"(2) the applicant is otherwise eligible for the loan. 
*
*
(
c
) AVAILABILITY OF LOAN GUARANTEES.—Afl»r the applicable 
period, the Secretary may guarantee under section 309(h) the repay-
ment of a commercial or cooperative loan made to an applicant 
referred to in subsection (a) i
f
— 
"(1) throughout the applicable period, the applicant con-
ducted the operation for wnich assistance is provided under 
section 318 in accordance with the plan for special assistance; 
and 
"(2) the applic£uit is otherwise eligible for the loan 
guarantee. 
"(d) APPLICABLE PERIOD DEFINED.—AS used in this section, 
the term 'applicable period' means the first 5 years for which 
an applicant nas operated a farm or ranch, including the period 
of time the applicant is provided assist£uice imder section 318.". 
SEC. 8. SPECIAL ASSISTANCE TO CERTAIN QUALIFIED BEGINNING 
FARMERS AND RANCHERS. 
Subtitle B (7 U.S.C. 1941 et seq.) is amended by adding at 
the end the following new section: 
7 use 1948. 
<n3EC. 318. SPECIAL ASSISTANCE TO CERTAIN QUALIFIED BEGINNING 
FARMERS AND RANCHERS. 
"(a) IN GENERAL.—^The Secretary shall provide special assist-
ance in accordsmce with this section to enable a qualified beginning 
farmer or rancher who has not operated a farm or ranch, or who 
has operated a farm or ranch for not more than 5 years (referred 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4147 
to in this section as the 'applicant'), to conduct viable farming 
or ranching operations. 
"(b) SUBMISSION OF PLAN OF FARM OPERATION.—An applicant 
who desires to apply for special assistance iinder this section shall 
submit a plan, in coordination with activities conducted under sec-
tions 359, 360, 361, and 362, that— 
"(1) describes, for each of the first 5 years for which assist-
ance under this section is sought for the operation— 
"(A) how the operation is to be conducted; 
"(B) the types and quantities of commodities to be 
produced bv the operation; 
"(C) me production methods and practices to be 
employed by the operation; 
"(D) the conservation measures to be tcdcen in the 
operation; 
"(E) the equipment needed to conduct the operation 
(including any expected replacements for the equipment) 
and, with resp^t to each item of needed equipment, 
whether the applicant owns, leases, or otherwise has access 
to the item, or proposes to purchase, lease, or otherwise 
gain access to the item; 
"(F) the expected income and expenses of the operation; 
"(G) the expected credit needs of the operation, includ-
ing the types and amounts of assistance to be sought under 
tliis section; and 
"(H) the site or sites at which the operation is (or 
is to be) located; and 
"(2) projects the financial status of the operation after 
assistance imder this section has been provided for a period 
of not more than 10 years, consistent with section 319, as 
is necessary for the operation to become financially viable with-
out fiirther assistance fix)m the Secretary, including specific 
goals that the applicant projects to meet in order to progress 
toward graduation as expeditiously as possible. 
"(c) DETERMINATIONS BY THE COUNTY COMMITTEE; APPROVAL 
O
F PLAN.—^The county committee shall approve a plan submitted 
by an applicant in accordance with subsection (b) if the county 
committee determines that— 
"(1) the applicant has not operated a farm or ranch, or 
has operated a farm or ranch for not more than 5 years; 
"(2) during the 5-year period ending with the submission 
of the plan, the applicant has had sufficient education and 
experience to indicate that the applicant is able to conduct 
a successfiil farming or ranching operation, as the case may 
be; 
"(3) the applicant owns, leases, or has a commitment to 
have leased to the applicant the site or sites of the operation; 
"(4) there is, or will be, available to the applicant equipment 
sufficient to conduct the operation in accordance with the plan; 
"(5) the applicant agrees to participate in such loan assess-
ment, borrower training, and financial management programs 
as the Secretary may require; and 
"(6) the applicant is otherwise eligible for assistance under 
this title. 
"(d) DETERMINATION BY THE SECRETARY; APPROVAL OF APPUCA-
TiON F
O
R ASSISTANCE.—^The Secretary shall approve an application 
for assistance under this section for an operation described in 
106 STAT. 4148 
PUBLIC LAW 102-554—OCT. 28, 1992 
a plan approved by a county committee under this section if the 
S^ni^taiy determines that— 
"(1) the operation would generate income sufficient to cover 
the expenses of the operation, debt service, and adequate living 
expenses of the applicant, to the extent that other income 
would not cover the living expenses, if the operation received 
assistance under this section as provided for in the plan; and 
"(2) during the commitment period established in accord-
ance with subsection (eXD, the operation will be financially 
viable without further assistance nrom tiie Secretary and the 
identified goals are reasonable and practicable. 
*
*
(
e
) PROVISION O
F ASSISTANCE.— 
"(1) DETERMINATION OF COMMITMENT PERIOD.— 
"(A) INITIAL DETERMINATION.—In approving an applica-
tion under subsection (d), the Secretary shaU, subject to 
subparagraph (C), determine the period during which 
assistance under this section is to be provided for Hie 
operation described in the application (referred to in this 
subsection as the 'commitment period'). 
"(B) AUTHORITY TO EXTEND PERIOD; NO AUTHORITY TO 
R
E
D
U
C
E PERIOD.—At any time, the Secretary may, subject 
to subparagraph (C) and subisections (f) and (g), extend 
the duration or the commitment period. The Secretary shall 
not reduce the duration of 
the commitment period. 
"(C) LIMITATIONS.— 
"(i) IN G
E
N
E
R
A
L
.
—
^
T
h
e duration of any commitment 
period (including any extensions of tiie period) shall 
not exceed 10 years and shall be consistent with section 
319. 
"(ii) EUGIBILITY F
O
R I
N
S
U
R
E
D O
P
E
R
A
T
I
N
G LOANS.— 
During the commitment period, an applicant shall not 
be eligible to receive an msured operating loan under 
this lection after the date that is 8 years after the 
date on which the applicant first receives assistance 
under this section. 
"(2) OPERATING L
O
A
N
S
; L
O
A
N G
U
A
R
A
N
T
E
E
S
.
— 
"(A) IN G
E
N
E
R
A
L
.
—
^
T
o the extent that an applicant 
whose application is approved under subsection (d) is 
unable to obtain sufficient credit from commercial or 
cooperative lenders to finance the operation described in 
the application at reasonable rates and terms (taking into 
consideration prevailing private and cooperative rates, and 
terms in the community in which the operation is (or 
is to be) located, for loans for similar purposes and periods 
of time), tlie Secretary shall, subject to the availability 
of funds and to subsections (f) and (g) and consistent with 
sections 360 and 362, make a conditional commitment to 
the applicant for each of the years of the commitment 
period— 
"(i) to provide to any commercial or cooperative 
lender who makes a loan to the applicant that is within 
the credit needs of the operation (as specified in the 
plan contained in the application) a guarantee under 
section 309(h) for the repayment of 90 percent of the 
loan principal and interest; 
(iiXD to provide to any commercial or cooperative 
lender who makes a loan to the applicant that is within 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4149 
the credit needs of the operation (as specified in the 
plan contain^ in the application) a guarantee under 
section 309(h) for the repayment of 90 percent of the 
loan principal and interest and an interest subsidy 
payment in Ihe amount necessary to ensure that the 
applicant qualifies for such a loan but not more than 
the amount of interest assistance allowed by section 
351; or 
**(II) if during any of the first 4 years for which 
assistance is provided under this section the Secretary 
determines that the applicant will not qualify for a 
loan described in subclause (I), an interest subsidy 
payment sufficient to ensure that the efiTective rate 
of interest payable by the applicant on the loan equals 
the rate of interest charged to low income, limited 
resource borrowers on insured operating loans made 
under this subtitle that are of comparable size and 
maturity; or 
"(iii) to make an insured loan under this subtitle 
to the applicant, in the amount specified in the plan 
contained in the application, at an interest rate that 
is no higher than the interest rate charged to regular 
borrowers and no lower than the interest rate charged 
to low income, limited resource borrowers under mis 
subtitle. 
"(3) LOANS OR GUARANTEES FOR NEW OR IMPROVED EQUIP-
MENT.—^The Secretary shall make a commitment to any 
applicant whose apphcation is approved under subsection (d) 
to provide the applicant with loans under this subtitle or loan 
guarantees imder section 309(h) to finance the acquisition, 
improvement, or repair of equipment needed in the operation 
described in the application if the plan contained in the applica-
tion provides for the commitment, to the extent that the 
applicant is unable to obtain sufficient credit fit)m commercial 
or cooperative lenders for such purposes at reasonable rates 
and terms (taking into consideration prevailing private and 
cooperative rates and terms in the commimity in which the 
operation is, or is to be, located, for loans for similar purposes 
and periods of time). 
'(4) PRIORITY IN PURCHASE OF INVENTORY EQUIPMENT; 
LOANS OR GUARANTEES FOR THE PURCHASES IN CERTAIN CASES.— 
During the commitment period, the Secretary shall— 
"(A) accord the applic€uit whose application is approved 
under subsection (d) priority for the purchase of equipment 
in the inventory of the Farmers Home Administration nec-
essary for the success of the operation described in the 
application; and 
"(B) provide the applicant with loans imder this sub-
title or loan guarant^s imder section 309(h) to fijiance 
the purchases if the plan contained in the application pro-
vides for the assistance, to the extent that the appUctmt 
is unable to obtain sufficient credit fit>m commercial or 
cooperative lenders for such puipose at reasonable rates 
and terms (taking into consideration prevedUng private and 
cooperative rates, and terms in the community in which 
the operation is, or is to be, located, for loans for similar 
purposes and periods of time). 
106 STAT. 4150 
PUBLIC LAW 102-554—OCT. 28, 1992 
"(5) OTHER K
I
N
D
S O
F ASSISTANCE.—During the commitment 
period, the Farmers Home Administration, the Extension Serv-
ice, the Soil Conservation Service, and the other entities of 
the Department of Agriculture shall provide the applicant with 
such other assistance and information as may be needed in 
developing and implementing the operation described in the 
application. 
•*(6)FEES.— 
"(A) SECRETARY.—The Secretary shall not charge a 
fee to any person (including a lender) in connection with 
any loan guarantee provided in accordance with this 
section. 
"(B) LENDER.—A lender may charge a loan origination 
and servicing fee in connection with a loan or loan guaran-
tee provided in accordance with this section in an amount 
not to exceed 1 percent of the amount of the loan. 
"(D ANNUAL PLAN REVISIONS REQUIRED AS CONDITION OF 
CONTINUED ASSISTANCE.—^The Secretary shall not provide assist-
ance under this section for an operation for any particular year 
after the first year for which the assistance is provided, unless— 
"(1) not later than 60 days before the assistance is to 
be first provided for the particular year, the plan describing 
the operation has been revised, pursuant to section 360, based 
on the experience of the year preceding the particular year, 
to provide the information required by subsection (b) for the 
5-year period beginning with the ptuticular year (or, if shorter, 
the period beginning with the particular year and ending with 
the year in which the plan projects the operation as becoming 
financiallv viable); and 
"(2) the Secretary has approved the revised plan. 
"(g) EFFECTS OF AVOIDABLE FAILURE TO ACHIEVE GOALS.— 
"(1) TERMINATION OF COMMITMENTS.—The Secretary shall 
revoke commitment for assistance made to an applicant under 
this section if the operation of the applicant fails, for 2 consecu-
tive years, to meet the goals specnfied in the plan, unless 
the failure has not materially reduced the likelUiood of the 
operation becoming financially viable and is due to cir-
cumstances beyond the control of the applicant. 
"(2) SUSPENSION OF EUGIBIUTY FOR ASSISTANCE.—During 
the 3-year period that begins with the date a commitment 
made to an applicant is revoked under paragraph (1), the 
applicant shall not be eligible for assistance under this section.". 
SEC. 9. GRADUATION OF BORROWERS WITH OPERATING LOANS OR 
GUARANTEES TO PRIVATE COBIMERCIAL CREDIT. 
Subtitle B (7 U.S.C. 1941 et seq.) (as amended by section 
8 of this Act) is fiirther amended by adding at the end the following 
new section: 
7 use 1949. 
'nSEC. 319. GRADUATION OF BORROWERS WITH OPERATING LOANS OR 
GUARANTEES TO PRIVATE COMMERCIAL CREDIT. 
"(a) GRADUATION PLAN.—The Secretary shall establish a plan, 
in coordination with activities under sections 359, 360, 361, and 
362, to encourage each borrower with an outstanding loan under 
this subtitle or with respect to whom there is an outstanding 
guarantee under this subtitle to graduate to private commercisu 
or other sources of credit. 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4151 
*
*
0
>
) LIMITATION ON PERIOD FOR WHICH BORROWERS ARE 
EuGiBLE F
O
R ASSISTANCE UNDER THIS SUBTITLE.—Notwithstanding 
any other provision of this subtitle: 
"(1) GENERAL RULE.—^Except as provided in paragraph (2), 
the Secretary shall not— 
"(A) make a loan to a borrower under this subtitle 
for any year after the 10th year for which such a loan 
is made to the borrower; or 
"(B) guarantee for any year a loan made to a borrower 
for a purpose specified in this subtitle, after the 15th 
year for which loans under this subtitle are made to, or 
such a guarantee is provided with respect to, the borrower. 
"(2) TRANSITION RULE.—If, as of the date of enactment 
of this section, the Secretary has made a loan to a borrower 
under Uus subtitle for 5 or more years, or has provided a 
guarantee for 10 or more years wiUi respect to one or more 
loans made to the borrower for a purpose specified in this 
subtitle, the Secretary shall not make a loan to the borrower 
under tiiis subtitle, or provide such a guarantee with respect 
to a loan made to the borrower for a purpose specified in 
this subtitle, after the 5th year occurring after the date of 
enactment for which a loan is made under this subtitle to, 
or such a guarantee is provided with respect to, the borrower.". 
SEC. 10. CONSIDERATION OF BORROWERS FOR LOAN SERVICE PRO-
GRAMa 
The first sentence of section 331D(e) (7 U.S.C. 1981d(e)) is 
amended by inserting after "not later than 60 days after receipt 
of tiie notice required in this section" the following: "or, in extraor-
dinary circumstances as determined by the applicable State director, 
after the 60-day period". 
SEC. 11. TIME PERIOD WITHIN WHICH COUNTY COBIMITTEE IS 
REQUIRED TO MEET TO CONSIDER APPUCAHONS FOR 
FARM OWNERSHIP AND OPERATING LOANS AND GUARAN-
TEES AND BEGINNING FARMER PLANS. 
Section 332 (7 U.S.C. 1982) is amended— 
(1) in subsection (c), by striking The committee" and 
inserthig "Subject to subsection (e), the committee"; and 
(2) by adding at the end the following new subsection: 
"(e) The county committee shall meet to consider approval 
of an appUcation received by the committee for a loan under this 
title, a guarantee under section 309(h), or a plan of farm operation 
under section 318, not later than— 
"(1) 5 days after receipt of the application if at the time 
of the receipt there is at least one other such appUcation 
or plan pending; or 
"(2) 15 days after receipt of the application if at the time 
of the receipt there are no other such applications or plans 
pending.". 
SEC. 12. INCREASE IN PERIOD DURING WHICH COUNTY COMMITTEE 
LOAN EUGIBIUTY CERTIFICATION CONTINUES IN EFFECT. 
Section 333(2XAXiii) (7 U.S.C. 1983(2XAXiii)) is amended by 
striking "2 years" and inserting "5 years". 
59-194 O—93 
17:QL3(Pt5) 
106 STAT. 4152 
PUBLIC LAW 102-554—OCT. 28, 1992 
SEC. 18. PHOCE8SINO OF APPUCATION8 FOR FARM OPERATING 
LOANa 
Section 333A(aX2) (7 U.S.C. 1983a(aX2)) is amended— 
(1) by inserting "(Ar after'X2r; 
(2) by inserting 'pother than under subtitle B)" after 'Sinder 
this title ; and 
(3) by adding at the end the following new subparagraph: 
"(BXi) Not later than 10 calendar days afl»r the Se^etary 
receives an application for an operating loan or loan guarantee 
vinder subtitle B, the Secretary shall notify the applicant of any 
information requhred before a decision may be made on the applica-
tion. On receipt of an application, the Secretary shall request from 
other parties such information as may be needed in connection 
with the application. 
"(ii) Not later than 15 calendar days after the date an agency 
of the Department of Agriculture receives a request for information 
made pursuant to clause (i), the agency shall provide the Secretary 
with the requested information. 
"(iii) If, not later than 20 calendar days after the date a request 
is made pursuant to clause (i) with respect to an application, the 
Secretary has not received the information requested, the Secretary 
shall notify the applicant and the district office of the Farmers 
Home Adioinistration, in writing, of the outstanding information. 
"(iv) A county ofiGce shall notify the district office of the Farmers 
Home Administration of each application for an operating loan 
or loan guarantee imder subtitle B that is pending more than 
45 dajrs after receipt, and the reasons the application is pending. 
"(v) A district office that receives a notice provided under clause 
(iv) with respect to an application shall immediately take steps 
to ensure that final action is taken on the application not later 
than 15 days afl»r the date of the receipt of the notice. 
^poi^ 
*X^n) 'nie district office shall report to the Stete office of the 
Farmers Home Administration on each application for an operating 
loan or loan guarantee under subtitle B that is pending more 
than 45 days after receipt by the county committee, and the reasons 
the »>i>lication is pending. 
(yii) Each month, the Secretary shall notify the Committee 
on Agriculture of the House of Representetives and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate, on a Stete-
by-Stete basis, as to each application for an operating loan or 
loan guarantee under subtitle B on which final action had not 
been taken within 60 calendar days after receipt by the Secretary, 
and the reasons final action had not been taken. . 
SEC. 1
4
. 
GRADUATION 
OF 
SEASONED 
DIRECT 
LOAN 
BORROWERS 
TO 
THE 
LOAN 
GUARANTEE 
PROGRAM. 
Section 333A (7 U.S.C. 1983a) is amended by adding at the 
end the following new subsection: 
"(fXD As used in this subsection: 
"(A) The term 'approved lender* means a lender approved 
prior to the date of enactment of this subsection by the Sec-
retary under the approved lender proeram esteblished by 
exhibit A to subpart a of part 1980 or tiUe 7, Code of Federal 
Regulations (as in effect on January 1, 1991), or a lender 
certified under section 114. 
"(B) The term 'seasoned direct loan borrower' means a 
borrower receiving a direct loan under this title who has been 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4153 
classified as 'commercial' or 'stimdard' under subpart W of 
part 2006 of the Instruction Manual (as in effect on January 
1,1991). 
"(2) The Secretary, or a contracting third party, shall annually 
review under section 360 the loans of each seasoned loan borrower. 
If, based on the review, it is determined that a borrower would 
be able to obtain a loan, guaranteed by the Secretary, from a 
commercial or cooperative lender at reasonable rates and terms 
for loans for similar purposes and periods of time, the Secretary 
shall assist the borrower m appl3dng for the commercial or coopera-
tive loan. 
"(3) In accordance with section 362, the Secretary shall prepare 
a prospectus on each seasoned direct loan borrower determined 
eligible to obtain a guaranteed loan. The prospectus shall contain 
a description of the amounts of loan guarantee and interest assist-
ance tiiat the Secret£ury will provide to the seasoned direct loan 
borrower to enable the seasoned direct loan borrower to carry 
out a financially viable farming plan if a guaranteed loan is made. 
"(4) With the approval of me borrower, the Secretary shall 
provide the prospectus of the seasoned direct loan borrower to 
each approved lender whose lending area includes the location 
of the seasoned direct loan borrower. If the Secretary receives 
an offer from an approved lender to extend credit to the seasoned 
direct loan borrower under terms and conditions contained in the 
prospectus, the seasoned direct loan borrower shall not be eligible 
for an insured loan from the Secretary under subtitle A or B, 
except as otherwise provided in this subsection. 
(5) If the Secretary is unable to provide loan guarantees and, 
if necessary, interest assistance to the seasoned direct loan borrower 
under this subsection in amoimts sufficient to enable the seasoned 
direct loan borrower to borrow from commercial sources the amount 
required to cany out a financially viable farming plan, or if the 
Secretary does not receive an offer from an approved lender to 
extend credit to a seasoned direct loan borrower under the terms 
and conditions contained in the prospectus, the Secretary shall 
make an insured loan to the seasoned direct loan borrower under 
subtitle A or B, whichever is applicable. 
"(6) To the extent necessary for the borrower to obtain a loan, 
guaranteed by the Secretary, from a commercial or cooperative 
lender, the Secretary shall provide interest rate reductions as pro-
vided for under section 351. . 
SEC. 16. SIMPLIFIED APPUCATION FOR GUARANTEED LOANS OF 
$60,000 OR LES& 
Section 333A (7 U.S.C. 1983a) (as amended by section 14 of 
this Act) is further amended by adding at the end the following 
new subsection: 
"(gXD The Secretary shall provide to lenders a short, simplified 
application form for guarantees under this title of loans the prin-
cipal amount of which is $50,000 or less. 
"(2) In developing the application, the Secretary shall— 
"(A) consult with commercial and cooperative lenders; and 
"(B) ensure that— 
"(i) the form can be completed manually or electroni-
cally, at the option of the lender; 
"(ii) the form minimizes the documentation required 
to accompany the form; 
106 STAT. 4154 
PUBLIC LAW 102-554—OCT. 28, 1992 
"(iii) the cost of completing and processing the form 
is minimal; and 
"(iv) the form can be completed and processed in an 
expeditious manner.". 
SEC. 16. INVENTORY LEASE OR LEASE WITH OPTION TO PURCHASE. 
The fourth sentence of section 335(cXl) (7 U.S.C. 1985(cXl)) 
is amended— 
(1) by inserting "(A)" after "shall be"; and 
(2) by inserting before the period at the end the following: 
"or (B) leased to persons eligible for assistance under the provi-
sions of any law administered by the Fanners Home Adminis-
tration or the Rural Development Administration under an 
annual lease or a lease with an option to purchase, with a 
preference for sale". 
SEC. 17. TRANSFER OF INDIAN LANDS PLEDGED AS COLLATERAL FOR 
FmHALOANS. 
Section 335(eXl) (7 U.S.C. 1985(eXl)) is amended— 
(1) in subparagraph (DXi), by striking "IT and inserting 
"Except as provided in subparagraph (G), iT; and 
(2) by adding at the end the following new subp£u:agraph: 
"(GXi)If-
"(I) the real property described in subparagraph (AXi) is 
located within an Indian reservation; 
"(II) the borrower-owner is an Indian tribe that has jurisdic-
tion over the reservation in which the real property is located 
or the borrower-owner is a member of an Indian tribe; 
"(III) the borrower-owner has obtained a lo€ui made, 
insured, or guaranteed under this title; and 
"(IV) the borrower-owner and the Secretary have exhausted 
all of the procedures provided for in this title to permit a 
borrower-owner to retain title to the real property, such that 
it is necessary for the borrower-owner to relinquish title, 
the Secretary shall dispose of or administer the property only as 
provided in subparagraph (D), as modified by this subparagraph. 
"(ii) The Secretary shall provide the borrower-owner of real 
property that is described in clause (i) with written notice of— 
"(I) tiie right of the borrower-owner to voluntarily convey 
the real property to the Secretary; and 
"(II) the fact that real property so conveyed will be placed 
in the inventory of the Secretary. 
"(iii) The Secretary shall provide the borrower-owner of the 
real property with written notice of the rights and protections 
provided under this title to the borrower-owner, and the Indian 
tribe that has jurisdiction over the reservation in which the real 
property is located, from foreclosure or Uquidation of the real prop-
erty, including written notice of— 
"(I) the provisions of subparagraphs (CXi), (CXii), and (D), 
this subparagraph, and subsection (g)(6); 
"(II) if the borrower-owner does not voluntarily convey the 
real property to the Secretary, that— 
"(aa) the Secretary may foreclose on the property; 
"(bb) in the event of foreclosure, the property will be 
offered for s€de; 
"(cc) the Secretary must offer a bid for the property 
that is equal to the fair market value of the property 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4155 
or the outstanding principal and interest of the loan, which-
ever is higher; 
"(dd) the property may be purchased by another party; 
and 
"(ee) if the property is purchased by another party, 
the property will not be placed in the inventory of the 
Secretary and the borrower-owner will forfeit the rights 
and protections provided under this title; and 
"(III) the opportunity of the borrower-owner to consult with 
the Indian tribe that has jurisdiction over the reservation in 
which the real property is located or counsel to determine 
if State or tribal law provides rights and protections that are 
more beneficial than those provided the borrower-owner under 
this title. 
"(ivXD Except as provided in subclause (II), the Secretary shall 
accept the voluntary conveyance of real property described in clause 
(i). 
"(II) If a hazardous substance (as defined in section 101(14) 
of the Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (42 U.S.C. 9601(14))) is located on the propertv 
and the Secretary takes remedial action to protect human health 
or the environment if the property is taken into inventory, the 
Secretary shall accept the voluntary conveyance of the property 
only if the Secretary determines that it is in the best interests 
of the Federal Government. 
"(v) If a borrower-owner does not voluntarily convey to the 
Secretary real property described in clause (i), at least 30 days 
before a foreclosure sale of the property, the Secretary shall provide 
written notice to the Indian tribe that has jurisdiction over the 
reservation in which the real property is located of— 
"(I) the sale; 
"(II) the fair market value of the property; and 
"(III) the requirements of this subparagraph. 
"(vi)(I) Except as provided in subclause (II), at a foreclosure 
sale of real property described in clause (i), the Secretary shall 
offer a bid for the property that is equal to the higher of— 
"(aa) the fair market value of the property; or 
"(bb) the outstanding principal and interest of the loan. 
"(II) If a hazardous substance (as defined in section 101(14) 
of the Comprehensive Environmental Response, Compensation, and 
Liability Act of 1980 (42 U.S.C. 9601(14))) is located on the property 
and the Secretary takes remedial action to protect human health 
or the environment if the property is taken into inventory, subclause 
(I) shall apply only if the Secretary determines that it is in the 
best interests of the Federal Government.". 
SEC. 18. DEBT SERVICE MARGIN REQUIREMENTS; CERTIFIED LEND-
ERS PROGRAM. 
Section 339 (7 U.S.C. 1989) is amended— 
(1) by striking "SEC. 339. The" and inserting the following: 
"SEC. 339. RULES AND REGULATIONS. 
"(a) IN GENERAL.—The"; and 
(2) by adding at the end the following new subsections: 
"(b) DEBT SERVICE MARGIN REQUIREMENTS.—Notwithstanding 
subsection (a), in providing farmer program loan guarantees under 
this title, the Secretary shall consider the income of the borrower 
106 STAT. 4156 
PUBLIC LAW 102-554—OCT. 28, 1992 
adequate if the income is equal to or greater than the income 
necessary— 
(1) to make principal and interest payments on all debt 
obligations of the borrower, in a timely manner; 
"(2) to cover the necessary Uving expenses of the family 
of the borrower; and 
"(3) to pay all other obligations and expenses of the bor-
rower not financed through debt obligations referred to in para-
graph (1), including expenses of replacing capital items (deter-
mined aiier taking into account depreciation of the items). 
"(c) CERTIFIED LENDERS PROGRAM.— 
**(1) IN GENERAL.—^The Secretary shall establish a program 
under which the Secretary shall guarantee loans for any pur-
pose specified in subtitle B that are made by lending institu-
tions certified by the Secretary. 
**(2) CERTIFICATION REQUIREMENTS.—The Secretary shall 
certify a lending institution that meets such criteria as the 
Secretary majr prescribe in regulations, including the ability 
of the institution to properly make, service, and liquidate the 
loans of the institution. 
"(3) CONDITION OF CERTIFICATION.—AS a condition of the 
certification, the Secretary shall require the institution to 
undertake to service the loans guaranteed by the Secretary 
under this subsection, using standards that are not less strin-
gent than generedly accepted banking standards concerning 
loan servicing employed by prudent commercial or cooperative 
lenders. The Secretary shall, at least annually, monitor the 
performance of each certified lender to ensure that the condi-
tions of the certification are being met. 
"(4) EFFECT OF CERTIFICATION.—^Notwithstanding any other 
provision of law: 
"(A) The Secretary shall guarantee 80 percent of a 
loan made under this subsection by a certified lending 
institution as described in paragraph (1), subiect to county 
committee certification that the Dorrower of tne loan meets 
the eligibility requirements and such other criteria as may 
be applicable to loans guaranteed by the Secretary under 
other provisions of this title. 
"(B) With respect to loans to be guaranteed by the 
Secretary under this subsection, the Secretary shall permit 
certified lending institutions to make appropriate certifi-
cations (as provided by regulations 
issued by the 
Secretary)— 
"(i) relating to issues such as creditworthiness, 
repayment ability, adequacy of collateral, and feasibil-
ysr 
ity of farm operation; and 
"(ii) that the borrower is in compliance with all 
requirements of law, including regulations issued by 
the Secretary. 
"(C) The Secretary shall approve or disapprove a 
guarantee not later than 14 calendar days after the date 
that the lending institution applied to tiie Secretary for 
the guarantee. If the Secretary rejects the loan application 
within the 14-day period, the Secretary shall state, in writ-
ing, all of the reasons the application was rejected. 
"(5) RELATIONSfflP TO OTHER REQUIREMENTS.—Neither this 
subsection nor subsection (d) shall affect the responsibility of 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4157 
the Secretary to certify eligibility, review financial information, 
and otherwise assess an application. 
"(d) PREFERRED CERTIFIED LENDERS PROGRAM.— 
"(1) IN GENERAL.—Commencing not later than two years 
after the date of enactment of the Agriciiltural Credit Improve-
ment Act of 1992, the Secretary shall establish a Preferred 
Certified Lenders Program for lenders who establish their— 
"(A) knowledge of, and experience under, the program 
established under subsection (c); 
"(B) knowledge of the regulations concerning the 
guaranteed loan program; and 
"(C) proficiency related to the certified lender program 
requirements. 
The Secretary shall certify any lending institution as a Pre-
ferred Certified Lender that meets such criteria as the Sec-
retary may prescribe by regulation. 
"(2) REVOCATION OF DESIGNATION.—The designation of a 
lender as a Preferred Certified Lender shall be revoked at 
any time that the Secretary determines that such lender is 
not adhering to the rules and regulations applicable to the 
^ 
program or if the loss experiences of a Preferred Certified 
Lender are excessive as compared to other Preferred Certified 
Lenders, except that such suspension or revocation shall not 
affect any outstanding guarantee. 
"(3) CONDITION OF CERTIFICATION.—As a condition of such 
preferred certification, the Secretary shall require the institu-
tion to undertake to service the loans guaranteed by the Sec-
retary under this subsection using generally accepted banking 
standards concerning loan servicing employed by prudent 
commercial or cooperative lenders. The Secretary shall, at least 
annually, monitor the performance of each preferred certified 
lender to ensure that the conditions of such certification are 
being met. 
"(4) EFFECT OF PREFERRED LENDER CERTIFICATION.—Not-
withstanding any other provision of law, the Secretary shall— 
"(A) guarantee 80 percent of an approved loan made 
by a certified lending institution as described in this sub-
section, subject to county committee certification that the 
borrower meets the eligibility requirements or such other 
criteria as may be applicable to loans guaranteed by the 
Secretary under other provisions of this title; 
"(B) permit certified lending institutions to make all 
decisions, with respect to loans to be guaranteed by the 
Secretary under this subsection relating to credit worthi-
ness, the closing, monitoring, collection and liquidation of 
loans, and to accept appropriate certifications, as provided 
by regulations issued by the Secretary, that the borrower 
is in compliance with all requirements of law or regulations 
promulgated by the Secretary; and 
"(C) be deemed to have guaranteed 80 percent of a 
loan made by a preferred certified lending institution as 
described in paragraph (1), if the Secretary fails to approve 
or reject the application of such institution within 14 cal-
endar days after the date that the lending institution pre-
sented the application to the Secretary. If the Secretary 
rejects the application within the 14-day period, the Sec-
106 STAT. 4158 
PUBLIC LAW 102-554—OCT. 28, 1992 
retary shall state, in writing, the reasons the application 
was rejected.**. 
SEC. 19. DEFINITION 
OF 
QUALIFIED 
BEGINNING 
FARMER 
OR 
RANCHER. 
Section 343(a) (7 U.S.C.1991(a)) is amended— 
(1) by striking 'iiiis title (1) the term** and all that follows 
through fish farming," at the end of paragraph (1) and insert-
ing "this title: 
"(1) The term 'farmer* includes a person who is engaged 
in, or who, with assistance afforded imder this title, intends 
to engage in, fish farming.**; 
(2) oy indenting, and aligning the margins of, paragraphs 
(2) through (10) so as to align with paragraph (1) (as amended 
by paragraph (1)); 
(3) by striking "the** the first place it appears in each 
of such paragraphs and inserting'The**; 
(4) by striking the comma at the end of each of paragraphs 
(2) through (8) and inserting a period; 
(5) by striking ", and at the end of paragraph (9) and 
inserting a period; and 
(6) by adding at the end the following new paragraph: 
"(11) The term 'qualified beginning farmer or rancher* 
means an applicant— 
"(A) who is eligible for assistance under this title; 
"(B) who has not operated a farm or ranch, or who 
has operated a farm or ranch for not more than 10 years; 
"(C) in the case of a cooperative, corporation, partner-
ship, or joint operation, who has members, stockholders, 
partners, or joint operators who are all related to one 
another by blood or marriage; 
"(DXi) in the case of an owner and operator of a farm 
or ranch, who— 
"(I) in the case of a loan made to an individual, 
individually or with the immediate family of the 
applic€uit— 
"(aa) materially and substantially participates 
in the operation of the farm or ranch; and 
"(bb) provides substantial day-to-day labor and 
management of the farm or ranch, consistent with 
the practices in the State or county in which the 
farm or ranch is located; or 
"(IlXaa) in the case of a loan made to a cooperative, 
corporation, partnership, or joint operation, has mem-
bers, stockholders, partners, or joint operators, materi-
ally and substantially participate in the operation of 
the farm or ranch; and 
"(bb) in the case of a loan made to a corporation, 
h£is stockholders, all of whom are qualified beginning 
farmers or ranchers; and 
"(ii) in the case of an applicant seeking to ovm and 
operate a fann or ranch, who— 
"(I) in the case of a loan made to an individual, 
individually or with the immediate family of the 
applicant, will— 
"(aa) materially and substantially participate 
in the operation of the farm or ranch; and 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4159 
"(bb) provide substantial day-to-day labor and 
management of the farm or ranch, consistent with 
the practices in the State or county in which the 
farm or ranch is located; or 
"(nXaa) in the case of a loan made to a cooperative, 
corporation, partnership, or joint operation, will have 
members, stockholders, partners, or joint operators, 
materially and substantially participate in tne oper-
ation of the farm or ranch; and 
'Xbb) in the case of a loan made to a corporation, 
has stockholders, all of whom are qualified beginning 
farmers or ranchers; 
"(£) who agrees to participate in such loan assessment, 
borrower traimng, and 
financial 
management programs as 
Uie Secretary may require; 
"(F) who does not own land or who, directly or through 
interests in family farm corporations, owns land, the aggre-
gate acreage of which does not excised 15 percent of the 
median acreage of the farms or ranches, as the case may 
be, in the county in which the farm or ranch operations 
of the applicant are located, as reported in the most recent 
census of agriculture taken under section 142 of title 13, 
United States Code; and 
"(G) who demonstrates that the available resources 
of the applicant and spouse (if any) of the applicant are 
not sufiicient to enable the applicant to continue farming 
or ranching on a viable scale.". 
SEC. 20. TARGETING OF FUNDa 
(a) FARM OPERATING LOANS FOR BEGINNING FARMERS AND 
RANCHERS.—Section 346(b) (7 U.S.C. 1994(b)) is amended by adding 
at the end the following new paragraph: 
"(SXA) In expending fimds available for insured operating loans 
under subtitle B, including loans made under section 318— 
"(i) during the first 6 months of fiscal year 1994, the 
Secretary shaU reserve not less than 30 percent of the fiinds 
available for the fiscal year to make insured operating loans 
to qualified beginning farmers or ranchers; 
"(ii) during the first 6 months of eacn of fiscal years 1995 
and 1996, the Secretary shall reserve not less than 40 percent 
of the fimds available for the fiscal year to make insured 
operating loans to qualified beginning farmers or ranchers; 
and 
"(iii) during the first 6 months of each of fiscal years 
1997 and thereafter, the Secretary may reserve not more than 
50 percent of the funds available for the fiscal year to make 
insured operating loans to qualified beginning farmers or ranch-
ers. 
"(B) In each fiscal year described in subparagraph (A), with 
regard to the funds not reserved under subparagraph (A), a qualified 
beginning farmer or rancher may apply for insured operating loans, 
but shall not receive any preference as a result of status as a 
qualified beginning farmer or rancher.". 
(b) PORTIONS OF FARM OWNERSHIP LOAN GUARANTEE FUNDS 
TARGETED TO BEGINNING FARMERS OR RANCHERS.—Section 346(bX2) 
(7 U.S.C. 1994(bX2)) is amended by adding at the end the following 
new sentence: '?^ot less than 25 percent of the amounts appro-
106 STAT. 4160 
PUBLIC LAW 102-554—OCT. 28, 1992 
priated for guarantees of farm ownership loans for each of the 
fiscal years 1994, 1995, 1996, and 1997 shall be reserved by the 
Secretary during the first 6 months of the respective fiscal year 
for guarantees of farm ownership loans to beginning farmers or 
ranchers.". 
(c) FARM OWNERSHIP LOANS.— 
(1) PERCENTAGE OF INSURED FARM OWNERSHIP LOAN FUNDS 
RESERVED FOR BEGINNING FARMERS OR RANCHERS.—Section 
7 use 1994. 
346(bX3) is amended by adding at the end the following new 
subparagraph: 
"(D) To the extent that it is not inconsistent with an 
exercise of authority under section 355, in expending fiinds 
available for insured farm ownership loans— 
"(i) during fiscal year 1994, the Secretary shall reserve 
not less thtui 55 percent of the fimds available for the 
fiscal year to make insured farm ownership loans to quali-
fied beginning farmers or ranchers; 
"(ii) during fiscal year 1995, the Secretary shall reserve 
not more than 65 percent of the funds available for the 
fiscal year to make insured farm ownership loans to quali-
fied beginning farmers or ranchers; and 
"(iii) during each of fiscal years 1996 and thereafter, 
the Secretary may reserve not less than 65 percent and 
not more than 70 percent of the funds available for the 
fiscal year to make insured farm ownership loans to quali-
fied beginning farmers or ranchers.". 
(2) FUNDS RESERVED FOR DOWN PAYMENT LOAN PROGRAM.— 
Section 346(bX3) (as amended by paragraph (1) of this sub-
section) is fiirther amended by adding at the end the following 
new subparagraph: 
"(E) To me extent that it is not inconsistent with an exer-
cise of authority under section 355, the Secretary shall reserve 
not less than 60 percent of the amounts reserveid for qualified 
beginning farmers or ranchers under subparagraph (D) for any 
fiscal year for down payment loans under section 310E.". 
(3) CERTAIN UNOBUGATED DOWN PAYMENT LOAN PROGRAM 
FUNDS AVAILABLE FOR ANY TYPE OF INSURED FARM OWNERSHIP 
LOANS FOR 
BEGINNING 
FARMERS AND RANCHERS.—Section 
346(bX3) (as amended by paragraph (2) of this subsection) 
is farther amended by adding at tiie end the following new 
subparagraph: 
"(F) To the extent that it is not inconsistent with an exer-
cise of authority under section 355, to the maximum extent 
practicable, any funds reserved for down payment loans under 
section 310E for a fiscal year by reason of subparagraph (E) 
that are not obligated by the end of the second quarter of 
the fiscal year shall be available during the third quarter 
of the fisc£U year for any type of insured farm ownership loans 
to beginning farmers and ranchers.". 
(d) INTEREST RATE ASSISTANCE PROGRAM.—Section 346(bX3) 
(as amended by subsection (cX3) of this section) is further amended 
by adding at the end the following new subparagraph: 
"(G) Not less than 40 percent of the amounts available 
for the interest rate reduction program under section 351 shall 
be reserved for the first 6 months of each fiscal year for assist-
ance to beginning farmers or ranchers.". 
PUBLIC LAW 102-554—OCT. 28, 1992 
106 STAT. 4161 
(e) DOWN PAYMENT LOAN PROGRAM.—Section 346(b) (as 
amended by subsection (a) of this section) is further amended by 
adding at the end the following new paragraph: 
"(6) Notwithstanding any other provision of this title, at the 
end of the third quarter of each fiscal year, the Secretary shall 
transfer, and use to carry out section 310E, 75 percent of the 
amoimt that would otherwise be available for guaranteed operating 
loans.". 
SEC. 21. EQUAL ACCESS TO FmHA ASSISTANCE BY GENDER. 
(a) TARGET PARTICIPATION RATES.—Section 355(a) (7 U.S.C. 
2003(a)) is amended— 
(1) inparagraph (2), bjr striking I n establishing" and 
inserting 'Except as provided in paragraph (3), in establishing"; 
and 
(2) by adding at the end the following new paragraph: 
"(3) (JENDER.—^With respect to gender, target participation 
rates shall take into consideration the number of current and 
gotential socially disadvantaged farmers and ranchers in a 
tate in proportion to the totsu number of farmers and ranchers 
in the State.^. 
(b) TARGETING OF LOANS TO MEMBERS OF GROUPS WHOSE MEM-
BERS HAVE BEEN SUBJECTED TO GENDER PREJUDICE.—Section 
355(eXl) (7 U.S.C. 2003(eXl)) is amended by striking "or ethnic" 
and inserting ", ethnic, or gender". 
(c) RECORDKEEPING OP LOANS BY BORROWER'S GENDER.—Sub-
title D (7 U.S.C. 1981 et seq.) is amended by adding at the end 
the following new section: 
'^EC. 369. RECORDKEEPING OF LOANS BY BORROWER'S GENDER. 
The Secretary shall classify, by gender, records of applicants 
for loans and loan guarantees under this title.". 
SEC. 22. STATE MEDIATION PROGRAMS. 
Section 502 of the Agricultural Credit Act of 1987 (7 U.S.C. 
5102) is amended— 
(1) in subsection (bXD, by striking "50" and inserting "70"; 
and 
(2) in subsection (c), by inserting "with respect to which 
the amount was paid" before the period. 
SEC. 23. REGULATIONS. 
(a) INTERIM REGULATIONS.—Not later than 180 days after the 
date of enactment of this Act, the Secretary of A^culture shall 
issue such interim regulations as are necessary to implement this 
Act and the amendments made l^ this Act. 
(b) FINAL REGULATIONS.—Not later than October 1, 1993, the 
Secretary of Agriculture shall issue such final regulations as are 
necessary to implement this Act and the amencunents made by 
this Act. 
SEC. 24. TECHNICAL AMENDBIENT. 
Section 306C(aX2) is amended to read as follows: 
"(2) CERTAIN AREAS TARGETED.— 
"(A) IN GENERAL.—^Loans and grants under paragraph 
(1) shall be made only if the loan or grant mnds will 
be used primarily to provide water or waste services, or 
both, to residents of a county— 
7 use 2008d. 
7 u s e 1989 note. 
7 u s e 1926c. 
106 STAT. 4162 
PUBLIC LAW 102-554—OCT. 28, 1992 
"(i) the per capita income of the residents of which 
is not more than 70 percent of the national average 
per capita income, as determined by the Department 
of Commerce; and 
"(ii) the unemployment rate of the residents of 
which is not less than 125 percent of the national 
average unemployment rate, as determined by the 
Bureau of Labor Statistics. 
"(B) EXCEPTION.—^Notwithstanding subparagraph (A), 
loans and grants under paragraph (1) may also be made 
if the loan or grant funds will be used primarily to provide 
water or waste services, or both, to residents of a rural 
area that was recognized as a colonia as of October 1, 
1989.". 
Approved October 28, 1992. 
LEGISLATIVE HISTORY—H.R. 6129: 
CONGRESSIONAL RECORD, Vol. 138 (1992): 
Oct. 4, considered and passed House. 
Oct. 8, considered and passed Senate. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 28 (1992): 
Oct. 28, Presidential statement.