
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 7USC1929]

 
                          TITLE 7--AGRICULTURE
 
                     CHAPTER 50--AGRICULTURAL CREDIT
 
                     SUBCHAPTER I--REAL ESTATE LOANS
 
Sec. 1929. Agricultural Credit Insurance Fund


(a) Revolving fund

    The fund established pursuant to section 11(a) of the Bankhead-Jones 
Farm Tenant Act, as amended, shall hereafter be called the Agricultural 
Credit Insurance Fund and is hereinafter in this subchapter referred to 
as the ``fund''. The fund shall remain available as a revolving fund for 
the discharge of the obligations of the Secretary under agreements 
insuring loans under this subchapter and loans and mortgages insured 
under prior authority.

(b) Deposits of funds; investments; purchase of notes

    Moneys in the fund not needed for current operations shall be 
deposited in the Treasury of the United States to the credit of the fund 
or invested in direct obligations of the United States or obligations 
guaranteed by the United States. The Secretary may purchase with money 
in the fund any notes issued by the Secretary to the Secretary of the 
Treasury for the purpose of obtaining money for the fund.

(c) Notes; form and denominations; maturities; terms and conditions; 
        interest rate; purchase by Treasury; public debt transaction

    The Secretary is authorized to make and issue notes to the Secretary 
of the Treasury for the purpose of obtaining funds necessary for 
discharging obligations under this section and for authorized 
expenditures out of the fund. Such notes shall be in such form and 
denominations and have such maturities and be subject to such terms and 
conditions as may be prescribed by the Secretary with the approval of 
the Secretary of the Treasury. Such notes shall bear interest at a rate 
fixed by the Secretary of the Treasury, taking into consideration the 
current average market yield of outstanding marketable obligations of 
the United States having maturities comparable to the notes issued by 
the Secretary under this subchapter. The Secretary of the Treasury is 
authorized and directed to purchase any notes of the Secretary issued 
hereunder, and, for that purpose, the Secretary of the Treasury is 
authorized to use as a public debt transaction the proceeds from the 
sale of any securities issued under chapter 31 of title 31, and the 
purposes for which such securities may be issued under such chapter are 
extended to include the purchase of notes issued by the Secretary. All 
redemptions, purchases, and sales by the Secretary of the Treasury of 
such notes shall be treated as public debt transactions of the United 
States.

(d) Notes and security as part of fund; collection or sale of notes; 
        deposit of net proceeds in fund

    Notes and security acquired by the Secretary in connection with 
loans insured under this subchapter and under prior authority shall 
become a part of the fund. Notes may be held in the fund and collected 
in accordance with their terms or may be sold by the Secretary with or 
without agreements for insurance thereof at the balance due thereon, or 
on such other basis as the Secretary may determine from time to time. 
All net proceeds from such collections, including sales of notes or 
property, shall be deposited in and become a part of the fund.

(e) Deposit in fund of portion of charge on outstanding principal 
        obligations; availability of remainder of charge, and merger 
        with appropriations, for administrative expenses

    The Secretary shall deposit in the fund all or a portion, not to 
exceed one-half of 1 per centum of the unpaid principal balance of the 
loan, of any charge collected in connection with the insurance of loans; 
and any remainder of any such charge shall be available for 
administrative expenses of the Farmers Home Administration and the Rural 
Development Administration, in proportion to such charges collected in 
connection with the insurance of loans by such agency, to be transferred 
annually and become merged with any appropriation for administrative 
expenses for such agency.

(f) Utilization of fund

    The Secretary may utilize the fund--
        (1) to pay amounts to which the holder of the note is entitled 
    on loans heretofore or hereafter insured accruing between the date 
    of any payments made by the borrower and the date of transmittal of 
    any such payments to the lender. In the discretion of the Secretary, 
    payments other than final payments need not be remitted to the 
    holder until due or until the next agreed annual or semiannual 
    remittance date;
        (2) to pay to the holder of the notes any deferred or defaulted 
    installment or, upon assignment of the note to the Secretary at the 
    Secretary's request, the entire balance due on the loan;
        (3) to purchase notes in accordance with agreements previously 
    entered into;
        (4) to pay for contract services, taxes, insurance, prior liens, 
    expenses necessary to make fiscal adjustments in connection with the 
    application and transmittal of collections and other expenses and 
    advances authorized in connection with insured loans, including the 
    difference between interest payable by borrowers and interest to 
    which insured lenders or insured holders are entitled under 
    agreements with the Secretary included in contracts of insurance;
        (5) to pay the Secretary's costs of administration necessary to 
    insure, make grants, service, and otherwise carry out the programs 
    under this chapter not specifically covered by the Rural Development 
    Insurance Fund of section 1929a of this title, including costs of 
    the Secretary incidental to guaranteeing loans under this chapter, 
    either directly from the Fund or by transfers from the Fund to, and 
    merger with, any appropriations for administrative expenses.

(g) Transfer of funds from Farmers Home Administration direct loan 
        account and Emergency Credit Revolving Fund; abolition of such 
        account and fund; payments from Agricultural Credit Insurance 
        Fund; interest

    (1) The assets and liabilities of, and authorizations applicable to, 
the Farmers Home Administration direct loan account created by section 
1988(c) of this title (before the amendment made by section 749(a)(1) of 
the Federal Agriculture Improvement and Reform Act of 1996) and the 
Emergency Credit Revolving Fund referred to in section 1966 of this 
title are hereby transferred to the fund, and such account and such 
revolving fund are hereby abolished. Such assets and their proceeds, 
including loans made out of the fund pursuant to this section, shall be 
subject to the provisions of this section, the last sentence of section 
1926(a)(1), and the last sentence of section 1927 of this title.
    (2) From time to time, and at least at the close of each fiscal 
year, the Secretary shall pay from the fund into the Treasury as 
miscellaneous receipts interest on the value as determined by the 
Secretary, with the approval of the Comptroller General, of the 
Government's equity transferred to the fund pursuant to the first 
sentence of this subsection plus the cumulative amount of appropriations 
made available after enactment of this provision as capital and for 
administration of the programs financed from the fund, less the average 
undisbursed cash balance in the fund during the year. The rate of such 
interest shall be determined by the Secretary of the Treasury, taking 
into consideration the current average yield on outstanding marketable 
obligations of the United States with remaining periods to maturity 
comparable to the average maturities of loans made or insured from the 
fund, adjusted to the nearest one-eighth of 1 per centum. Interest 
payments may be deferred with the approval of the Secretary of the 
Treasury, but any interest payments so deferred shall themselves bear 
interest. If at any time the Secretary determines that moneys in the 
fund exceed present and any reasonably prospective future requirements 
of the fund, such excess may be transferred to the general fund of the 
Treasury.

(h) Guaranteed loans; interest rate for loans sold into secondary 
        market; loan fees

    (1) The Secretary may provide financial assistance to borrowers for 
purposes provided in this chapter by guaranteeing loans made by any 
Federal or State chartered bank, savings and loan association, 
cooperative lending agency, or other legally organized lending agency.
    (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 chapter 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 1935 of this title--
        (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.

    (4) Maximum guarantee of 90 percent.--Except as provided in 
paragraphs (5) and (6), a loan guarantee under this chapter shall be for 
not more than 90 percent of the principal and interest due on the loan.
    (5) Refinanced loans guaranteed at 95 percent.--The Secretary shall 
guarantee 95 percent of--
        (A) in the case of a loan that solely refinances a direct loan 
    made under this chapter, the principal and interest due on the loan 
    on the date of the refinancing; or
        (B) in the case of a loan that is used for multiple purposes, 
    the portion of the loan that refinances the principal and interest 
    due on a direct loan made under this chapter that is outstanding on 
    the date the loan is guaranteed.

    (6) Beginning farmer loans guaranteed up to 95 percent.--The 
Secretary may guarantee not more than 95 percent of--
        (A) a farm ownership loan for acquiring a farm or ranch to a 
    borrower who is participating in the down payment loan program under 
    section 1935 of this title; or
        (B) an operating loan to a borrower who is participating in the 
    down payment loan program under section 1935 of this title that is 
    made during the period that the borrower has a direct loan 
    outstanding under this subchapter for acquiring a farm or ranch.

(i) Coordination of assistance for qualified beginning farmers and 
        ranchers

    (1) 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 1935 of this title 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.

(Pub. L. 87-128, title III, Sec. 309, Aug. 8, 1961, 75 Stat. 309; Pub. 
L. 87-703, title IV, Sec. 401(3), Sept. 27, 1962, 76 Stat. 632; Pub. L. 
89-240, Sec. 2(b), (c), Oct. 7, 1965, 79 Stat. 932; Pub. L. 89-633, Oct. 
8, 1966, 80 Stat. 879; Pub. L. 90-488, Sec. 7, Aug. 15, 1968, 82 Stat. 
771; Pub. L. 92-419, title I, Sec. 115, Aug. 30, 1972, 86 Stat. 660; 
Pub. L. 95-113, title XV, Sec. 1510(a), Sept. 29, 1977, 91 Stat. 1022; 
Pub. L. 95-334, title I, Sec. 109(a), Aug. 4, 1978, 92 Stat. 423; Pub. 
L. 101-624, title XXIII, Sec. 2302(a)(2), Nov. 28, 1990, 104 Stat. 3980; 
Pub. L. 102-554, Secs. 4, 5(a), Oct. 28, 1992, 106 Stat. 4143; Pub. L. 
104-127, title VI, Secs. 606, 661(b), title VII, Secs. 744, 749(b)(1), 
Apr. 4, 1996, 110 Stat. 1086, 1106, 1125, 1129.)

                       References in Text

    Section 11(a) of the Bankhead-Jones Farm Tenant Act, as amended, 
referred to in subsec. (a), refers to section 11(a) of act July 22, 
1937, ch. 517, title I, as added Aug. 14, 1946, ch. 964, Sec. 5, 60 
Stat. 1072, which was classified to section 1005a of this title and was 
repealed by section 341(a) of Pub. L. 87-128.
    For definition of ``this chapter'', referred to in subsecs. (f)(5) 
and (h)(1), (2), (4), (5), see note set out under section 1921 of this 
title.
    Section 1988(c) of this title (before the amendment made by section 
749(a)(1) of the Federal Agriculture Improvement and Reform Act of 
1996), referred to in subsec. (g)(1), means subsec. (c) of section 1988 
of this title prior to repeal by section 749(a)(1) of Pub. L. 104-127.

                          Codification

    In subsec. (c), ``chapter 31 of title 31'' and ``such chapter'' 
substituted for ``the Second Liberty Bond Act, as amended'' and ``such 
Act, as amended,'' respectively, on authority of Pub. L. 97-258, 
Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which 
enacted Title 31, Money and Finance.


                               Amendments

    1996--Subsec. (f). Pub. L. 104-127, Sec. 744, redesignated pars. (2) 
to (6) as (1) to (5), respectively, and struck out former par. (1) which 
read as follows: ``to make loans which could be insured under this 
subchapter whenever the Secretary has reasonable assurance that they can 
be sold without undue delay, and may sell and insure such loans;''.
    Subsec. (g)(1). Pub. L. 104-127, Sec. 749(b)(1), inserted ``(before 
the amendment made by section 749(a)(1) of the Federal Agriculture 
Improvement and Reform Act of 1996)'' after ``section 1988(c) of this 
title''.
    Pub. L. 104-127, Sec. 661(b), struck out ``section 1928,'' after 
``provisions of this section,''.
    Subsec. (h)(4) to (6). Pub. L. 104-127, Sec. 606, added pars. (4) to 
(6).
    1992--Subsec. (h). Pub. L. 102-554, Sec. 4, designated existing 
provisions as par. (1) and added pars. (2) and (3).
    Subsec. (i). Pub. L. 102-554, Sec. 5(a), added subsec. (i).
    1990--Subsec. (e). Pub. L. 101-624 inserted ``and the Rural 
Development Administration, in proportion to such charges collected in 
connection with the insurance of loans by such agency'' and substituted 
``expenses for such agency'' for ``expenses''.
    1978--Subsec. (f)(1), (6). Pub. L. 95-334 in par. (1) struck out 
provisions limiting amount of loans outstanding at any one time, and 
added par. (6).
    1977--Subsec. (f)(3). Pub. L. 95-113 substituted ``any deferred or 
defaulted installment'' for ``any defaulted installment''.
    1972--Subsec. (f)(1). Pub. L. 92-419, Sec. 115(a)(1), substituted 
``$500,000,000'' for ``$100,000,000''.
    Subsec. (f)(2). Pub. L. 92-419, Sec. 115(a)(2), substituted 
``amounts'' for ``the interest'' and ``payments'' for ``prepayments'' in 
three places and inserted ``or until the next agreed annual or semi-
annual remittance date'' after ``until due''.
    Subsec. (f)(5). Pub. L. 92-419, Sec. 115(a)(3), (4), substituted 
``connection with insured loans, including the difference between 
interest payable to borrowers and interest to which insured lenders or 
insured holders are entitled under agreements with the Secretary 
included in contracts of insurance'' for ``section 1985(a) of this title 
in connection with insured loans,'' and provided payment for contract 
services.
    Subsecs. (g), (h). Pub. L. 92-419, Sec. 115(b), added subsecs. (g) 
and (h).
    1968--Subsec. (f)(1). Pub. L. 90-488 increased from $50,000,000 to 
$100,000,000 the aggregate amount of loans to be sold and insured and 
undisposed of at any one time.
    1966--Subsec. (f)(2). Pub. L. 89-633 substituted ``until due'' for 
``until the due date of the annual installment''.
    1965--Subsec. (e). Pub. L. 89-240, Sec. 2(b), substituted ``all or a 
portion, not to exceed one-half of 1 per centum of the unpaid principal 
balance of the loan of any charge collected in connection with the 
insurance of loans; and any remainder of any such charge'' for ``such 
portion of the charge collected in connection with the insurance of 
loans at least equal to a rate of one-half of 1 per centum per annum on 
the outstanding principal obligations and the remainder of such 
charge''.
    Subsec. (f)(1). Pub. L. 89-240, Sec. 2(c), substituted 
``$50,000,000'' for ``$25,000,000''.
    1962--Subsec. (f)(1). Pub. L. 87-703 increased from $10,000,000 to 
$25,000,000 the aggregate amount of loans to be sold and insured and 
undisposed of at any one time.


                    Effective Date of 1996 Amendment

    Amendment by section 606 of Pub. L. 104-127 effective 90 days after 
Apr. 4, 1996, and amendment by section 661(b) of Pub. L. 104-127 
effective Apr. 4, 1996, see section 663(a), (b) of Pub. L. 104-127, set 
out as a note under section 1922 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.


          Advisory Committee on Beginning Farmers and Ranchers

    Section 5(b) of Pub. L. 102-554 provided that:
    ``(1) Establishment; purpose.--Not later than 18 months after the 
date of enactment of this Act [Oct. 28, 1992], the Secretary of 
Agriculture shall establish an advisory committee, to be known as the 
`Advisory Committee on Beginning Farmers and Ranchers', which shall 
provide advice to the Secretary on--
        ``(A) the development of the program of coordinated assistance 
    to qualified beginning farmers and ranchers under section 309(i) of 
    the Consolidated Farm and Rural Development Act [7 U.S.C. 1929(i)] 
    (as added by subsection (a) of this section);
        ``(B) methods of maximizing the number of new farming and 
    ranching opportunities 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 
    opportunities.
    ``(2) Membership.--The Secretary shall appoint the members 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(i)(5) of the Consolidated Farm and Rural Development Act (as 
    added by subsection (a) of this section)).
        ``(C) Commercial lenders.
        ``(D) Private nonprofit organizations with active beginning 
    farmer or rancher programs.
        ``(E) The Cooperative Extension Service.
        ``(F) Community colleges or other educational institutions with 
    demonstrated experience in training beginning farmers or ranchers.
        ``(G) Other entities or persons providing lending or technical 
    assistance for qualified beginning farmers or ranchers.''


       Limitation on Sales From Agricultural Credit Insurance Fund

    Pub. L. 99-509, title I, Sec. 1002, Oct. 21, 1986, 100 Stat. 1875, 
provided that: ``During fiscal years 1987 through 1989, no note shall be 
sold out of the Agricultural Credit Insurance Fund, except in connection 
with transactions with the Secretary of the Treasury, without prior 
approval by Congress.''


                            Loans to Indians

    Authority of the Secretary of Agriculture to make loans to Indian 
tribes and tribal corporations to acquire land within reservations, see 
sections 488 to 492 of Title 25, Indians.

                  Section Referred to in Other Sections

    This section is referred to in sections 1929a, 1983a, 1991, 1994, 
1999, 6942 of this title; title 25 section 488; title 42 sections 1485, 
1487, 8813.
