7 U.S.C. § 1924 — Conservation loan and loan guarantee

Page 1061 TITLE 7—AGRICULTURE § 1924 ance on any real property to be acquired or improved with the loan. (2) Determination Not later than 180 days after April 4, 1996, the Secretary shall determine the appropriate level of insurance to be required under para- graph (1). (Pub. L. 87–128, title III, § 303, Aug. 8, 1961, 75 Stat. 307; Pub. L. 87–703, title IV, § 401(1), Sept. 27, 1962, 76 Stat. 631; Pub. L. 90–488, § 1, Aug. 15, 1968, 82 Stat. 770; Pub. L. 95–113, title XIV, § 1448(a), Sept. 29, 1977, 91 Stat. 1011; Pub. L. 96–438, § 1(1), Oct. 13, 1980, 94 Stat. 1871; Pub. L. 97–98, title XVI, § 1602, Dec. 22, 1981, 95 Stat. 1346; Pub. L. 104–127, title VI, § 602(a), Apr. 4, 1996, 110 Stat. 1085; Pub. L. 107–171, title V, § 5002, May 13, 2002, 116 Stat. 341.) Editorial Notes AMENDMENTS 2002—Subsec. (a)(1)(E). Pub. L. 107–171 added subpar. (E). 1996—Pub. L. 104–127 amended section generally, sub- stituting present provisions for provisions outlining preferences for loans made or insured under this sub- chapter and defining terms ‘‘improving farms’’ and ‘‘qualified non-fossil energy system’’. 1981—Subsec. (a). Pub. L. 97–98 substituted ‘‘who have dependent families’’ for ‘‘who are married or have de- pendent families’’. 1980—Subsec. (b)(1). Pub. L. 96–438 substituted ‘‘the acquisition, installation, and modification’’ for ‘‘the acquisition and installation’’ and struck out ‘‘in any residential structure’’ after ‘‘energy system’’. 1977—Pub. L. 95–113 designated existing provisions as subsec. (a) and added subsec. (b). 1968—Pub. L. 90–488 designated existing provisions as cls. (1), (2), (4), (5), and added cl. (3). 1962—Pub. L. 87–703 authorized loans to be made or in- sured for recreational uses and facilities. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–127, title VI, § 602(b), Apr. 4, 1996, 110 Stat. 1085, provided that: ‘‘Section 303(c)(1) of the Consoli- dated Farm and Rural Development Act [7 U.S.C. 1923(c)(1)] shall not apply until the Secretary of Agri- culture makes the determination required by section 303(c)(2) of the Act.’’ [The Secretary’s determination relating to hazard insurance under this provision was contained in interim rules published Mar. 3, 1997, and effective Mar. 24, 1997, see 62 F.R. 9351.] EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–98 effective Dec. 22, 1981, see section 1801 of Pub. L. 97–98, set out as an Effective Date note under section 4301 of this title. EFFECTIVE DATE OF 1977 AMENDMENT Amendment by Pub. L. 95–113 effective Oct. 1, 1977, see section 1901 of Pub. L. 95–113, set out as a note under section 1307 of this title. TRANSFER OF FUNCTIONS Powers, duties, and assets of agencies, offices, and other entities within Department of Agriculture relat- ing to rural development functions transferred to Rural Development Administration by section 2302(b) of Pub. L. 101–624. § 1924. Conservation loan and loan guarantee program (a) In general The Secretary may make or guarantee quali- fied conservation loans to eligible borrowers under this section. (b) Definitions In this section: (1) Qualified conservation loan The term ‘‘qualified conservation loan’’ means a loan, the proceeds of which are used to cover the costs to the borrower of carrying out a qualified conservation project. (2) Qualified conservation project The term ‘‘qualified conservation project’’ means conservation measures that address provisions of a conservation plan of the eligi- ble borrower. (3) Conservation plan The term ‘‘conservation plan’’ means a plan, approved by the Secretary, that, for a farming or ranching operation, identifies the conserva- tion activities that will be addressed with loan funds provided under this section, including— (A) the installation of conservation struc- tures to address soil, water, and related re- sources; (B) the establishment of forest cover for sustained yield timber management, erosion control, or shelter belt purposes; (C) the installation of water conservation measures; (D) the installation of waste management systems; (E) the establishment or improvement of permanent pasture; (F) compliance with section 3812 of title 16; and (G) other purposes consistent with the plan, including the adoption of any other emerging or existing conservation practices, techniques, or technologies approved by the Secretary. (c) Eligibility (1) In general The Secretary may make or guarantee loans to farmers or ranchers in the United States, farm cooperatives, private domestic corpora- tions, partnerships, joint operations, trusts, limited liability companies, or such other legal entities as the Secretary considers ap- propriate that are controlled by farmers or ranchers and engaged primarily and directly in agricultural production in the United States. (2) Requirements To be eligible for a loan under this section, applicants shall meet the requirements in sub- paragraphs (A) and (B) of section 1922(a)(1) of this title. (d) Priority In making or guaranteeing loans under this section, the Secretary shall give priority to— (1) qualified beginning farmers or ranchers and socially disadvantaged farmers or ranch- ers; Page 1062 TITLE 7—AGRICULTURE § 1924 (2) owners or tenants who use the loans to convert to sustainable or organic agricultural production systems; and (3) producers who use the loans to build con- servation structures or establish conservation practices to comply with section 3812 of title 16. (e) Limitations applicable to loan guarantees The portion of a loan that the Secretary may guarantee under this section shall be— (1) 80 percent of the principal amount of the loan; or (2) in the case of a producer that is a quali- fied socially disadvantaged farmer or rancher or a beginning farmer or rancher, 90 percent of the principal amount of the loan. (f) Administrative provisions The Secretary shall ensure, to the maximum extent practicable, that loans made or guaran- teed under this section are distributed across di- verse geographic regions. (g) Credit eligibility The provisions of paragraphs (1) and (3) of sec- tion 1983 of this title shall not apply to loans made or guaranteed under this section. (h) Authorization of appropriations There is authorized to be appropriated to the Secretary to carry out this section $150,000,000 for each of fiscal years 2014 through 2023. (Pub. L. 87–128, title III, § 304, Aug. 8, 1961, 75 Stat. 308; Pub. L. 90–488, § 2, Aug. 15, 1968, 82 Stat. 770; Pub. L. 92–419, title I, § 102, Aug. 30, 1972, 86 Stat. 657; Pub. L. 95–334, title I, § 102, Aug. 4, 1978, 92 Stat. 421; Pub. L. 101–624, title XVIII, § 1802(a), Nov. 28, 1990, 104 Stat. 3817; Pub. L. 102–237, title V, § 501(a), Dec. 13, 1991, 105 Stat. 1865; Pub. L. 104–127, title VI, § 603, Apr. 4, 1996, 110 Stat. 1085; Pub. L. 110–234, title V, § 5002, May 22, 2008, 122 Stat. 1142; Pub. L. 110–246, § 4(a), title V, § 5002, June 18, 2008, 122 Stat. 1664, 1904; Pub. L. 113–79, title V, §§ 5001(c)(1), 5002, Feb. 7, 2014, 128 Stat. 833; Pub. L. 115–334, title V, § 5102, Dec. 20, 2018, 132 Stat. 4669.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2018—Subsec. (h). Pub. L. 115–334 substituted ‘‘2023’’ for ‘‘2018’’. 2014—Subsec. (c)(1). Pub. L. 113–79, § 5002(a), sub- stituted ‘‘limited liability companies, or such other legal entities as the Secretary considers appropriate’’ for ‘‘or limited liability companies’’. Subsec. (c)(2). Pub. L. 113–79, § 5001(c)(1), substituted ‘‘subparagraphs (A) and (B) of section 1922(a)(1)’’ for ‘‘paragraphs (1) and (2) of section 1922(a)’’. Subsec. (e). Pub. L. 113–79, § 5002(b), substituted ‘‘shall be—’’ for ‘‘shall be 75 percent of the principal amount of the loan.’’ and added pars. (1) and (2). Subsec. (h). Pub. L. 113–79, § 5002(c), added subsec. (h) and struck out former subsec. (h). Prior to amendment, text read as follows: ‘‘For each of fiscal years 2008 through 2012, there are authorized to be appropriated to the Secretary such funds as are necessary to carry out this section.’’ 2008—Pub. L. 110–246, § 5002, amended section gen- erally, substituting provisions relating to conservation loans and loan guarantee programs for former provi- sions which related to, in subsec. (a), authority to make or insure loans for soil and water conservation and protection, in subsec. (b), priority of producers who would build conservation structures or establish con- servation practices to comply with section 3812 of title 16, and in subsec. (c), maximum amount of a loan. 1996—Pub. L. 104–127, § 603(2), inserted section catch- line. Subsec. (a). Pub. L. 104–127, § 603(2), (5), redesignated subsec. (a)(1) as (a), inserted heading, and redesignated subpars. (A) to (F) as pars. (1) to (6), respectively. Former pars. (2) and (3) redesignated subsecs. (b) and (c), respectively. Subsec. (b). Pub. L. 104–127, § 603(1), (3), redesignated subsec. (a)(2) as (b), inserted heading, substituted ‘‘guaranteeing loans’’ for ‘‘insuring loans’’, and struck out former subsec. (b) which read as follows: ‘‘Loans may also be made or insured under this subchapter to residents of rural areas without regard to the require- ments of clauses (2) and (3) of section 1922 of this title to acquire or establish in rural areas small business en- terprises to provide such residents with essential in- come.’’ Subsec. (c). Pub. L. 104–127, § 603(1), (4), (6), redesig- nated subsec. (a)(3) as (c), inserted heading, redesig- nated subpars. (A) and (B) as pars. (1) and (2), respec- tively, and struck out former subsec. (c) which read as follows: ‘‘Loans may also be made or insured under this subchapter to any farm owners or tenants without re- gard to the requirements of clauses (1), (2), and (3) of section 1922 of this title for the purposes of meeting Federal, State, or local requirements for agricultural, animal, or poultry waste pollution abatement and con- trol facilities, including the construction, modifica- tion, or relocation of farm or other structures nec- essary to comply with such pollution abatement re- quirements.’’ 1991—Subsecs. (a), (d). Pub. L. 102–237 redesignated subsec. (d) as (a) and moved it to appear before subsec. (b) and struck out former subsec. (a) which read as fol- lows: ‘‘Loans may also be made or insured under this subchapter to any farmowners or tenants without re- gard to the requirements of section 1922(1), (2), and (3) of this title for the purposes only of land and water de- velopment, use and conservation, not including rec- reational uses and facilities, and without regard to the requirements of section 1922(2) and (3) of this title, to farmowners or tenants to finance outdoor recreational enterprises or to convert to recreational uses their farming or ranching operations, including those here- tofore financed under this chapter.’’ 1990—Subsec. (d). Pub. L. 101–624 added subsec. (d). 1978—Subsec. (a). Pub. L. 95–334, § 102(1), struck out ‘‘individual’’ after ‘‘title, to’’. Subsec. (c). Pub. L. 95–334, § 102(2), added subsec. (c). 1972—Pub. L. 92–419 designated existing provisions as subsec. (a) and struck out item (a) and (b) designations appearing before ‘‘to any farmowners’’ and ‘‘without re- gard to’’, respectively, and added subsec. (b). 1968—Pub. L. 90–488 designated existing provisions as cl. (a), excluded recreational uses and facilities, and added cl. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. EFFECTIVE DATE OF 1991 AMENDMENT Amendment by Pub. L. 102–237 effective as if included in the provision of the Food, Agriculture, Conservation, and Trade Act of 1990, Pub. L. 101–624, to which the Page 1063 TITLE 7—AGRICULTURE § 1926 amendment relates, see section 1101(b)(3) of Pub. L. 102–237, set out as a note under section 1421 of this title. § 1925. Limitations on amount of farm ownership loans (a) In general The Secretary shall make or insure no loan under sections 1922, 1923, 1924, 1934, and 1935 of this title that would cause the unpaid indebted- ness under such sections of any one borrower to exceed the smaller of (1) the value of the farm or other security, or (2) in the case of a loan other than a loan guaranteed by the Secretary, $600,000, or, in the case of a loan guaranteed by the Secretary, $1,750,000 (increased, beginning with fiscal year 2019, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and reduced by the amount of any unpaid indebtedness of the borrower on loans under subchapter II that are guaranteed by the Secretary). (b) Determination of value In determining the value of the farm, the Sec- retary shall consider appraisals made by com- petent appraisers under rules established by the Secretary. (c) Inflation percentage For purposes of this section, the inflation per- centage applicable to a fiscal year is the per- centage (if any) by which— (1) the average of the Prices Paid By Farm- ers Index (as compiled by the National Agri- cultural Statistics Service of the Department of Agriculture) for the 12-month period ending on July 31 of the immediately preceding fiscal year; exceeds (2) the average of such index (as so defined) for the 12-month period that immediately pre- cedes the 12-month period described in para- graph (1). (Pub. L. 87–128, title III, § 305, Aug. 8, 1961, 75 Stat. 308; Pub. L. 91–620, § 1, Dec. 31, 1970, 84 Stat. 1862; Pub. L. 92–419, title I, § 103, Aug. 30, 1972, 86 Stat. 658; Pub. L. 91–524, title VIII, § 807, as added Pub. L. 93–86, § 1(27)(B), Aug. 10, 1973, 87 Stat. 237; Pub. L. 95–334, title I, § 103, Aug. 4, 1978, 92 Stat. 421; Pub. L. 102–554, § 3, Oct. 28, 1992, 106 Stat. 4142; Pub. L. 105–277, div. A, § 101(a) [title VIII, § 806(a)], Oct. 21, 1998, 112 Stat. 2681, 2681–39; Pub. L. 110–234, title V, § 5003, May 22, 2008, 122 Stat. 1144; Pub. L. 110–246, § 4(a), title V, § 5003, June 18, 2008, 122 Stat. 1664, 1905; Pub. L. 115–334, title V, § 5103, Dec. 20, 2018, 132 Stat. 4669.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. AMENDMENTS 2018—Subsec. (a)(2). Pub. L. 115–334, § 5103(1), sub- stituted ‘‘$600,000’’ for ‘‘$300,000’’, ‘‘$1,750,000’’ for ‘‘$700,000’’, and ‘‘2019’’ for ‘‘2000’’. Subsec. (c)(1). Pub. L. 115–334, § 5103(2)(A), substituted ‘‘July’’ for ‘‘August’’. Subsec. (c)(2). Pub. L. 115–334, § 5103(2)(B), substituted ‘‘that immediately precedes the 12-month period de- scribed in paragraph (1)’’ for ‘‘ending on August 31, 1996’’. 2008—Subsec. (a)(2). Pub. L. 110–246, § 5003, substituted ‘‘$300,000’’ for ‘‘$200,000’’. 1998—Pub. L. 105–277 inserted section catchline, des- ignated first sentence as subsec. (a), inserted heading, and substituted ‘‘$700,000 (increased, beginning with fis- cal year 2000, by the inflation percentage applicable to the fiscal year in which the loan is guaranteed and re- duced by the amount of any unpaid indebtedness of the borrower on loans under subchapter II that are guaran- teed by the Secretary)’’ for ‘‘$300,000’’, designated sec- ond sentence as subsec. (b) and inserted heading, and added subsec. (c). 1992—Pub. L. 102–554 inserted reference to section 1935 of this title. 1978—Pub. L. 95–334 substituted provisions setting forth requirements for loans under sections 1922, 1923, 1924, and 1934 of this title for provisions setting forth requirements for loans under sections 1922, 1923, and 1924 of this title. 1973—Pub. L. 91–524, § 807, as added by Pub. L. 93–86, substituted ‘‘$225,000’’ for ‘‘$100,000’’ in cl. (a), added cl. (b), and redesignated former cl. (b) as (c). 1972—Pub. L. 92–419 struck out ‘‘normal’’ before ‘‘value’’ in first and second sentences and before ‘‘mar- ket value’’ in last sentence. 1970—Pub. L. 91–620 substituted ‘‘$100,000’’ for ‘‘$60,000’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. § 1926. Water and waste facility loans and grants (a) In general (1) The Secretary is also authorized to make or insure loans to associations, including cor- porations not operated for profit, Indian tribes on Federal and State reservations and other fed- erally recognized Indian tribes, and public and quasi-public agencies to provide for the applica- tion or establishment of soil conservation prac- tices, shifts in land use, the conservation, devel- opment, use, and control of water, and the in- stallation or improvement of drainage or waste disposal facilities, recreational developments, and essential community facilities including necessary related equipment, all primarily serv- ing farmers, ranchers, farm tenants, farm labor- ers, rural businesses, and other rural residents, and to furnish financial assistance or other aid in planning projects for such purposes. The Sec- retary may also make or insure loans to com- munities that have been designated as rural em- powerment zones or rural enterprise commu- nities pursuant to part I of subchapter U of chapter 1 of title 26, or as rural enterprise com- munities pursuant to section 766 of the Agri- culture, Rural Development, Food and Drug Ad- ministration, and Related Agencies Appropria- tions Act, 1999 (Public Law 105–277; 112 Stat. 2681, 2681–37), to provide for the installation or improvement of essential community facilities including necessary related equipment, and to furnish financial assistance or other aid in plan- ning projects for such purposes. The Secretary may also make loans to any borrower to whom a loan has been made under the Rural Elec-