7 U.S.C. § 1949 — Graduation of borrowers with operating

Page 1112 TITLE 7—AGRICULTURE §§ 1947, 1948 (c) Line-of-credit loans (1) In general A loan made or guaranteed by the Secretary under this subchapter may be in the form of a line-of-credit loan. (2) Term A line-of-credit loan under paragraph (1) shall terminate not later than 5 years after the date that the loan is made or guaranteed. (3) Eligibility For purposes of determining eligibility for a farm operating loan under this subchapter, each year during which a farmer or rancher takes an advance or draws on a line-of-credit loan the farmer or rancher shall be considered to have received an operating loan for 1 year. (4) Termination of delinquent loans If a borrower does not pay an installment on a line-of-credit loan on schedule, the borrower may not take an advance or draw on the line- of-credit, unless the Secretary determines that— (A) the borrower’s failure to pay on sched- ule was due to unusual conditions that the borrower could not control; and (B) the borrower will reduce the line-of- credit balance to the scheduled level at the end of— (i) the production cycle; or (ii) the marketing of the borrower’s agri- cultural products. (5) Agricultural commodities A line-of-credit loan may be used to finance the production or marketing of an agricul- tural commodity that— (A) is eligible for a price support program of the Department of Agriculture; or (B) was eligible for a price support pro- gram of the Department of Agriculture on the day before April 4, 1996. (Pub. L. 87–128, title III, § 316, Aug. 8, 1961, 75 Stat. 311; Pub. L. 90–488, § 10, Aug. 15, 1968, 82 Stat. 771; Pub. L. 95–334, title I, § 117, Aug. 4, 1978, 92 Stat. 426; Pub. L. 97–35, title I, § 160(b), Aug. 13, 1981, 95 Stat. 377; Pub. L. 98–258, title VI, § 604(b), Apr. 10, 1984, 98 Stat. 139; Pub. L. 101–624, title XVIII, § 1803(b), Nov. 28, 1990, 104 Stat. 3818; Pub. L. 104–127, title VI, §§ 614, 661(g), Apr. 4, 1996, 110 Stat. 1089, 1107; Pub. L. 113–79, title V, § 5106(b)(3), Feb. 7, 2014, 128 Stat. 838.) Editorial Notes REFERENCES IN TEXT Paragraph (3), referred to in subsec. (a)(1), was re- pealed by Pub. L. 104–127, title VI, § 661(g), Apr. 4, 1996, 110 Stat. 1107. Section 2279(e) of this title, referred to in subsec. (a)(2), was redesignated section 2279(a) of this title by section 12301(b)(3) of Pub. L. 115–334. AMENDMENTS 2014—Subsec. (a)(2). Pub. L. 113–79 inserted ‘‘a microloan to a beginning farmer or rancher or veteran farmer or rancher (as defined in section 2279(e) of this title), or’’ after ‘‘The interest rate on’’. 1996—Subsec. (a)(3). Pub. L. 104–127, § 661(g), struck out par. (3) which read as follows: ‘‘The interest rate on any loan (other than a guaranteed loan) made or in- sured under clause (5) of section 1942(a) of this title for activities that involve the use of prime farmland as de- fined in section 1927(a)(6)(C) of this title shall be the in- terest rate otherwise applicable under this section in- creased by 2 per centum per annum.’’ Subsec. (c). Pub. L. 104–127, § 614, added subsec. (c). 1990—Subsec. (a)(2). Pub. L. 101–624 amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘‘The interest rate on any loan (other than a guaran- teed loan) to a low-income, limited resource borrower under this subchapter shall be the interest rate other- wise applicable under this section reduced by 3 per cen- tum per annum.’’ 1984—Subsec. (b). Pub. L. 98–258 inserted ‘‘(or, in the case of loans for farm operating purposes, fifteen years)’’ and substituted ‘‘Except as otherwise provided for farm loans under section 1981b of this title, the in- terest rate’’ for ‘‘The interest rate’’. 1981—Subsec. (a). Pub. L. 97–35 redesignated existing provisions as par. (1), inserted reference to loans guar- anteed under pars. (2) and (3), and added pars. (2) and (3). 1978—Pub. L. 95–334 designated existing provisions as subsec. (a), inserted provisions relating to depositing of charges and provisions relating to interest rates on guaranteed loans, struck out provisions relating to payment and renewal of loans, and added subsec. (b). 1968—Pub. L. 90–488 substituted provisions for deter- mination of interest rate by taking into consideration current average market yield on outstanding market- able obligations of the United States with remaining periods to maturity comparable to the average matu- rities of the loans, adjusted to the nearest one-eighth of 1 per centum, plus not to exceed 1 per centum per annum as determined by the Secretary, for former pro- hibition of an interest rate exceeding 5 per centum per annum. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 applicable to loans made after Sept. 30, 1981, see section 160(c) of Pub. L. 97–35, set out as a note under section 1927 of this title. §§ 1947, 1948. Repealed. Pub. L. 104–127, title VI, §§ 615, 616(a), Apr. 4, 1996, 110 Stat. 1090 Section 1947, Pub. L. 87–128, title III, § 317, as added Pub. L. 92–419, title I, § 123, Aug. 30, 1972, 86 Stat. 665, re- lated to insured operating loans. Section 1948, Pub. L. 87–128, title III, § 318, as added Pub. L. 102–554, § 8, Oct. 28, 1992, 106 Stat. 4146, related to special assistance to certain qualified beginning farmers and ranchers. § 1949. Graduation of borrowers with operating loans or guarantees to private commercial credit The Secretary shall establish a plan, in coordi- nation with activities under sections 2006a, 2006b, 2006c, and 2006d of this title, to encourage each borrower with an outstanding loan under this subchapter or with respect to whom there is an outstanding guarantee under this subchapter to graduate to private commercial or other sources of credit. (Pub. L. 87–128, title III, § 319, as added Pub. L. 102–554, § 9, Oct. 28, 1992, 106 Stat. 4150; amended Pub. L. 104–127, title VI, § 617, Apr. 4, 1996, 110 Stat. 1090; Pub. L. 113–79, title V, § 5107, Feb. 7, 2014, 128 Stat. 838.) Editorial Notes AMENDMENTS 2014—Pub. L. 113–79 struck out subsec. (a) designation and heading before ‘‘The Secretary’’ and struck out Page 1113 TITLE 7—AGRICULTURE § 1961 subsec. (b) which related to limitation on period bor- rowers were eligible for guaranteed assistance under this subchapter and contained transition rule. 1996—Subsec. (b). Pub. L. 104–127 added subsec. (b) and struck out former subsec. (b) which provided for limita- tion on period for which borrowers were eligible for as- sistance under this subchapter and contained transi- tion rule. Statutory Notes and Related Subsidiaries SUSPENSION OF LIMITATION ON PERIOD FOR WHICH BOR- ROWERS ARE ELIGIBLE FOR GUARANTEED ASSISTANCE Pub. L. 107–171, title V, § 5102, May 13, 2002, 116 Stat. 343, as amended by Pub. L. 109–467, § 1, Dec. 22, 2006, 120 Stat. 3485; Pub. L. 110–234, title V, § 5103, May 22, 2008, 122 Stat. 1146; Pub. L. 110–246, § 4(a), title V, § 5103, June 18, 2008, 122 Stat. 1664, 1908, provided for the suspension of former 7 U.S.C. 1949(b) limitation on period bor- rowers were eligible for guaranteed assistance, begin- ning Jan. 1, 2002, and ending Dec. 31, 2010. SUBCHAPTER III—EMERGENCY LOANS Statutory Notes and Related Subsidiaries EMERGENCY AGRICULTURAL CREDIT Pub. L. 95–334, title II, §§ 201–211, Aug. 4, 1978, 92 Stat. 429–433, as amended by Pub. L. 96–220, § 1, Mar. 30, 1980, 94 Stat. 129; Pub. L. 97–98, title XVI, § 1605, Dec. 22, 1981, 95 Stat. 1346; Pub. L. 98–258, title VI, § 603, Apr. 10, 1984, 98 Stat. 139; Pub. L. 99–198, title XIII, § 1310(b), Dec. 23, 1985, 99 Stat. 1523, which authorized the Secretary of Agriculture to insure or guarantee loans to (1) bona fide farmers and ranchers who were primarily and di- rectly engaged in agricultural production and who were citizens of the United States and (2) farm cooperatives and private domestic corporations and partnerships that were primarily and directly engaged in agricul- tural production and in which a majority interest was held by members, stockholders, or partners, as applica- ble, who themselves were citizens of the United States and were primarily and directly engaged in agricul- tural production, if the applicant for such loan: (A) had the experience or training and resources necessary to assure a reasonable prospect for successful operation with the assistance of such loan; (B) needed such credit in order to maintain a viable agricultural production operation; and (C) was not able to obtain sufficient credit elsewhere due to economic stresses, such as a general tightening of agricultural credit or an unfavor- able relationship between production costs and prices received for agricultural commodities; and which pro- vided requirements as to purposes of loans, loan limits, interest rates, repayment period, loan certifications and conditions, loan security, funding, maximum amount of outstanding loans, full faith and credit of the United States, issuance of certificates of beneficial ownership, assignment of contracts of guarantee, geo- graphical availability, the conduct of a study and re- port on the program, and termination of authority to make new contracts of insurance or guarantee on Sept. 30, 1982, except with respect to the economic emergency loan program operated from Dec. 22, 1983, to Sept. 30, 1984, was repealed by Pub. L. 101–624, title XVIII, § 1851, Nov. 28, 1990, 104 Stat. 3837. EMERGENCY LIVESTOCK CREDIT Pub. L. 93–357, July 25, 1974, 88 Stat. 391, as amended by Pub. L. 94–35, § 1, June 16, 1975, 89 Stat. 213; Pub. L. 94–517, Oct. 15, 1976, 90 Stat. 2446; Pub. L. 95–334, title III, § 301, Aug. 4, 1978, 92 Stat. 433; Pub. L. 96–470, title I, § 102(d), Oct. 19, 1980, 94 Stat. 2237, authorized the Sec- retary of Agriculture to provide financial assistance to bona fide farmers and ranchers, including bona fide farmers or ranchers owning livestock that were fed in custom feedyards, who were primarily and directly en- gaged in agricultural production and who had substan- tial operations in breeding, raising, fattening, or mar- keting livestock, and to corporations or partnerships when a majority interest in such corporations or part- nerships was held by stockholders or partners who themselves were primarily and directly engaged in such agricultural production and required the Secretary to guarantee loans, including both principal and interest, made by any legally organized lending agency. The pro- visions also provided requirements as to loan limits, fees or charges, interest rates, repayment period, loan certifications and conditions, loan security, maximum amount of outstanding loans, exclusion from budget to- tals, full faith and credit of the United States, issuance of certificates of beneficial ownership, assignment of contracts of guarantee, rules and regulations, and ter- mination of authority to make new guarantees on Sept. 30, 1979. § 1961. Eligibility for loans (a) Persons eligible The Secretary shall make and insure loans under this subchapter only to the extent and in such amounts as provided in advance in appro- priation Acts to (1) established farmers or ranchers (including equine farmers or ranchers), or persons engaged in aquaculture, who are citi- zens of the United States and who are (in the case of farm ownership loans in accordance with subchapter I) owner-operators or operators, or (in the case of loans for a purpose under sub- chapter II) operators of not larger than family farms, and (2) farm cooperatives, private domes- tic corporations, partnerships, joint operations, trusts, or limited liability companies, or such other legal entities as the Secretary considers appropriate (A) that are engaged primarily in farming or ranching (including equine farming or ranching) or aquaculture, and (B) in which a majority interest is held by individuals who are citizens of the United States and who are (in the case of farm ownership loans in accordance with subchapter I) owner-operators or operators, or (in the case of loans for a purpose under sub- chapter II) operators of not larger than family farms (or in the case of such cooperatives, cor- porations, partnerships, joint operations, trusts, or limited liability companies, or other legal en- tities in which a majority interest is held by in- dividuals who are related by blood or marriage, as defined by the Secretary, such individuals must be either owners or operators of not larger than a family farm and at least one such indi- vidual must be an operator of not larger than a family farm), where the Secretary finds that the applicants’ farming, ranching, or aquaculture operations have been substantially affected by a quarantine imposed by the Secretary under the Plant Protection Act [7 U.S.C. 7701 et seq.] or the animal quarantine laws (as defined in sec- tion 136a of title 21), a natural disaster in the United States, or a major disaster or emergency designated by the President under the Robert T. Stafford Disaster Relief and Emergency Assist- ance Act (42 U.S.C. 5121 et seq.): Provided, That they have experience and resources necessary to assure a reasonable prospect for successful oper- ation with the assistance of such loan and are not able to obtain sufficient credit elsewhere. In addition to the foregoing requirements of this subsection, in the case of farm cooperatives, pri- vate domestic corporations, partnerships, joint operations, trusts, limited liability companies, and such other legal entities, the family farm