
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: 7USC1961]

 
                          TITLE 7--AGRICULTURE
 
                     CHAPTER 50--AGRICULTURAL CREDIT
 
                     SUBCHAPTER III--EMERGENCY LOANS
 
Sec. 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 
appropriation Acts to (1) established farmers, ranchers, or persons 
engaged in aquaculture, who are citizens of the United States and who 
are owner-operators (in the case of loans for a purpose under subchapter 
I of this chapter) or operators (in the case of loans for a purpose 
under subchapter II of this chapter) of not larger than family farms, 
and (2) farm cooperatives, private domestic corporations, partnerships, 
or joint operations (A) that are engaged primarily in farming, ranching, 
or aquaculture, and (B) in which a majority interest is held by 
individuals who are citizens of the United States and who are owner-
operators (in the case of loans for a purpose under subchapter I of this 
chapter) or operators (in the case of loans for a purpose under 
subchapter II of this chapter) of not larger than family farms (or in 
the case of such cooperatives, corporations, partnerships, or joint 
operations in which a majority interest is held by individuals 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 individual 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 natural disaster in the United States or by 
a major disaster or emergency designated by the President under the 
Disaster Relief and Emergency Assistance Act [42 U.S.C. 5121 et seq.]: 
Provided, That they have experience and resources necessary to assure a 
reasonable prospect for successful operation 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, private domestic corporations, partnerships, and joint 
operations, the family farm requirement of the preceding sentence shall 
apply as well to all farms in which the entity has an ownership and 
operator interest (in the case of loans for a purpose under subchapter I 
of this chapter) or an operator interest (in the case of loans for a 
purpose under subchapter II of this chapter). The Secretary shall accept 
applications from, and make or insure loans pursuant to the requirements 
of this subchapter to, applicants, otherwise eligible under this 
subchapter, that conduct farming, ranching, or aquaculture operations in 
any county contiguous to a county where the Secretary has found that 
farming, ranching, or aquaculture operations have been substantially 
affected by a natural disaster in the United States or by a major 
disaster or emergency designated by the President under the Disaster 
Relief and Emergency Assistance Act. The Secretary shall accept 
applications for assistance under this subchapter from persons affected 
by a natural disaster at any time during the eight-month period 
beginning (A) on the date on which the Secretary determines that 
farming, ranching, or aquaculture operations have been substantially 
affected by such natural disaster or (B) on the date the President makes 
the major disaster or emergency designation with respect to such natural 
disaster, as the case may be.

(b) Hazard insurance requirement

                           (1) In general

        After the Secretary makes the determination required by 
    paragraph (2), the Secretary may not make a loan to a farmer or 
    rancher under this subchapter to cover a property loss unless the 
    farmer or rancher had hazard insurance that insured the property at 
    the time of the loss.

                          (2) Determination

        Not later than 180 days after April 4, 1996, the Secretary shall 
    determine the appropriate level of insurance to be required under 
    paragraph (1).

                    (3) Loans to poultry farmers

        (A) Inability to obtain insurance

            (i) In general

                Notwithstanding any other provision of this subchapter, 
            the Secretary may make a loan to a poultry farmer under this 
            subchapter to cover the loss of a chicken house for which 
            the farmer did not have hazard insurance at the time of the 
            loss, if the farmer--
                    (I) applied for, but was unable, to obtain hazard 
                insurance for the chicken house;
                    (II) uses the loan to rebuild the chicken house in 
                accordance with industry standards in effect on the date 
                the farmer submits an application for the loan (referred 
                to in this paragraph as ``current industry standards'');
                    (III) obtains, for the term of the loan, hazard 
                insurance for the full market value of the chicken 
                house; and
                    (IV) meets the other requirements for the loan under 
                this subchapter.
            (ii) Amount

                Subject to the limitation contained in section 
            1964(a)(2) of this title, the amount of a loan made to a 
            poultry farmer under clause (i) shall be an amount that will 
            allow the farmer to rebuild the chicken house in accordance 
            with current industry standards.

        (B) Loans to comply with current industry standards

            (i) In general

                Notwithstanding any other provision of this subchapter, 
            the Secretary may make a loan to a poultry farmer under this 
            subchapter to cover the loss of a chicken house for which 
            the farmer had hazard insurance at the time of the loss, 
            if--
                    (I) the amount of the hazard insurance is less than 
                the cost of rebuilding the chicken house in accordance 
                with current industry standards;
                    (II) the farmer uses the loan to rebuild the chicken 
                house in accordance with current industry standards;
                    (III) the farmer obtains, for the term of the loan, 
                hazard insurance for the full market value of the 
                chicken house; and
                    (IV) the farmer meets the other requirements for the 
                loan under this subchapter.
            (ii) Amount

                Subject to the limitation contained in section 
            1964(a)(2) of this title, the amount of a loan made to a 
            poultry farmer under clause (i) shall be the difference 
            between--
                    (I) the amount of the hazard insurance obtained by 
                the farmer; and
                    (II) the cost of rebuilding the chicken house in 
                accordance with current industry standards.

(c) Family farm system

    The Secretary shall conduct the emergency loan program under this 
subchapter in a manner that will foster and encourage the family farm 
system of agriculture, consistent with the reaffirmation of policy and 
declaration of the intent of Congress contained in section 2266(a) of 
this title.

(d) Definitions

    For the purposes of this subchapter--
        (1) ``aquaculture'' means the husbandry of aquatic organisms 
    under a controlled or selected environment; and
        (2) ``able to obtain sufficient credit elsewhere'' means able to 
    obtain sufficient credit elsewhere to finance the applicant's actual 
    needs at reasonable rates and terms, taking into consideration 
    prevailing private and cooperative rates and terms in the community 
    in or near which the applicant resides for loans for similar 
    purposes and periods of time.

(Pub. L. 87-128, title III, Sec. 321, Aug. 8, 1961, 75 Stat. 311; Pub. 
L. 87-832, Oct. 15, 1962, 76 Stat. 958; Pub. L. 93-24, Secs. 2, 3, 6, 
Apr. 20, 1973, 87 Stat. 24, 25; Pub. L. 93-237, Sec. 10(a), (d), Jan. 2, 
1974, 87 Stat. 1025; Pub. L. 94-68, Secs. 2, 3, Aug. 5, 1975, 89 Stat. 
381; Pub. L. 95-334, title I, Sec. 118, Aug. 4, 1978, 92 Stat. 426; Pub. 
L. 96-302, title I, Sec. 120(a), July 2, 1980, 94 Stat. 841; Pub. L. 96-
438, Sec. 3(a), (b)(1), Oct. 13, 1980, 94 Stat. 1872; Pub. L. 97-35, 
title I, Sec. 161, Aug. 13, 1981, 95 Stat. 378; Pub. L. 98-258, title 
VI, Sec. 602(a), Apr. 10, 1984, 98 Stat. 138; Pub. L. 99-198, title 
XIII, Sec. 1308(a), (b)(1), Dec. 23, 1985, 99 Stat. 1522; Pub. L. 100-
707, title I, Sec. 109(c)(1), Nov. 23, 1988, 102 Stat. 4708; Pub. L. 
104-127, title VI, Sec. 621(a), Apr. 4, 1996, 110 Stat. 1091; Pub. L. 
106-387, Sec. 1(a) [title VIII, Sec. 833], Oct. 28, 2000, 114 Stat. 
1549, 1549A-61.)

                       References in Text

    The Disaster Relief and Emergency Assistance Act, referred to in 
subsec. (a), is Pub. L. 93-288, May 22, 1974, 88 Stat. 143, as amended, 
known as The Robert T. Stafford Disaster Relief and Emergency Assistance 
Act, which is classified principally to chapter 68 (Sec. 5121 et seq.) 
of Title 42, The Public Health and Welfare. For complete classification 
of this Act to the Code, see Short Title note set out under section 5121 
of Title 42 and Tables.


                               Amendments

    2000--Subsec. (b)(3). Pub. L. 106-387 added par. (3).
    1996--Subsec. (b). Pub. L. 104-127 added subsec. (b) and struck out 
former subsec. (b) which read as follows: ``An applicant shall be 
ineligible for financial assistance under this subchapter for crop 
losses if crop insurance was available to the applicant for such crop 
losses under the Federal Crop Insurance Act (7 U.S.C. 1501 et seq.).''
    1988--Subsec. (a). Pub. L. 100-707 substituted ``and Emergency 
Assistance Act'' for ``Act of 1974'' in two places.
    1985--Subsec. (a)(1). Pub. L. 99-198, Sec. 1308(a), inserted ``and 
who are owner-operators (in the case of loans for a purpose under 
subchapter I of this chapter) or operators (in the case of loans for a 
purpose under subchapter II of this chapter) of not larger than family 
farms'' after ``United States'' in cl. (1) of first sentence, extended 
applicability to joint operations, and substituted requirement that a 
majority interest be held by individuals who are citizens of the United 
States and who are owner-operators (in the case of loans for a purpose 
under subchapter I of this chapter) or operators (in the case of loans 
for a purpose under subchapter II of this chapter) of not larger than 
family farms (or in the case of such cooperatives, corporations, 
partnerships, or joint operations in which a majority interest is held 
by individuals who are related by blood or marriage, as defined by the 
Secretary, that such individuals must be either owners or operators of 
not larger than a family farm and at least one such individual must be 
an operator of not larger than a family farm) for requirement that a 
majority interest be held by members, stockholders or partners who are 
citizens of the United States, in cl. (2) of first sentence, and 
inserted provision extending the family farm requirement to all farms in 
which the entity has an ownership and operator interest (in the case of 
loans for a purpose under subchapter I of this chapter) or an operator 
interest (in the case of loans for a purpose under subchapter II of this 
chapter).
    Subsec. (b). Pub. L. 99-198, Sec. 1308(b)(1), amended subsec. (b) 
generally, substituting provision declaring a loan applicant ineligible 
for financial assistance for crop losses where crop insurance was 
available to the applicant for former provision which made applicants 
eligible for loans, though able to obtain credit elsewhere, subject to 
the other terms and conditions for loans under this subchapter and as 
prescribed under regulations by the Secretary.
    1984--Subsec. (a). Pub. L. 98-258 inserted provisions directing the 
Secretary to accept applications from, and make or insure loans pursuant 
to the requirements of this subchapter to, applicants, otherwise 
eligible under this subchapter, that conduct farming, ranching, or 
aquaculture operations in any county contiguous to a county where the 
Secretary has found that farming, ranching, or aquaculture operations 
have been substantially affected by a natural disaster in the United 
States or by a major disaster or emergency designated by the President 
under the Disaster Relief Act of 1974, and further directing the 
Secretary to accept applications for assistance under this subchapter 
from persons affected by a natural disaster at any time during the 
eight-month period beginning (A) on the date on which the Secretary 
determines that farming, ranching, or aquaculture operations have been 
substantially affected by such natural disaster or (B) on the date the 
President makes the major disaster or emergency designation with respect 
to such natural disaster, as the case may be.
    1981--Subsec. (a). Pub. L. 97-35 inserted provisions relating to 
requirement for advance appropriation of amounts.
    1980--Subsec. (a). Pub. L. 96-348, Sec. 3(a), (b)(1), repealed 
section 120 of Pub. L. 96-302 (see par. below) and amended section 
generally, designating existing provisions as subsec. (a) and, as so 
designated, restoring provision to proviso requiring loan recipients to 
be unable to obtain sufficient credit elsewhere.
    Pub. L. 96-302, Sec. 120(a) (see par. above), struck out from 
proviso requirement that persons to be eligible for loans be unable to 
obtain sufficient credit elsewhere to finance their actual needs at 
reasonable rates and terms, taking into consideration prevailing private 
and cooperative rates and terms in the community in or near which they 
reside for loans for similar purposes and periods of time.
    Subsecs. (b) to (d). Pub. L. 96-438, Sec. 3(b)(1), added subsecs. 
(b) to (d).
    1978--Pub. L. 95-334 struck out subsec. (a) which set forth 
provisions relating to designation of emergency areas and definition of 
term ``aquaculture'', and incorporated provisions of subsec. (b) as 
entire section and, as so incorporated, substituted provisions relating 
to criteria authorizing the Secretary to make and insure loans, for 
provisions relating to criteria authorizing the Secretary to make loans 
in designated areas.
    1975--Subsec. (a). Pub. L. 94-68, Sec. 2, substituted provisions 
authorizing the Secretary to designate an emergency area if he finds 
that a natural disaster has occurred in that area which substantially 
affected farming, ranching, or aquaculture operations for provisions 
authorizing the Secretary to designate an emergency area if he finds 
that there exists in that area a general need for agricultural credit 
and that the need for such credit in that area is the result of a 
natural disaster, and inserted definition of ``aquaculture''.
    Subsec. (b). Pub. L. 94-68, Sec. 3, extended the authority of the 
Secretary to make loans to areas designated by the President as 
``Emergency'' pursuant to Disaster Relief Act of 1970, substituted 
reference to persons engaged in aquaculture and aquaculture for 
reference to oyster planters and oyster planting respectively, struck 
out provision that such loans be made without regard to whether the 
required financial assistance is otherwise available from private, 
cooperative, or other responsible sources, inserted requirement that the 
loan applicant be unable to obtain credit elsewhere at reasonable rates 
and terms, and inserted sentence that the provisions of this subsection 
shall not apply to loan applications filed prior to July 9, 1975.
    1974--Subsec. (a). Pub. L. 93-237, Sec. 10(d), struck out ``which 
cannot be met for temporary periods of time by private, cooperative, or 
other responsible sources (including loans the Secretary is authorized 
to make or insure under subchapters I and II of this chapter or any 
other Act of Congress), at reasonable rates and terms for loans for 
similar purposes and periods of time'' after ``a general need for 
agricultural credit''.
    Subsec. (b). Pub. L. 93-237, Sec. 10(a), struck out ``, and are 
unable to obtain sufficient credit elsewhere to finance their actual 
needs at reasonable rates and terms, taking into consideration 
prevailing practice and cooperative rates and terms in the community in 
or near which the applicant resides for loans for similar purposes and 
periods of time'' after ``a reasonable prospect for successful operation 
with the assistance of such loan'' and inserted provision that the loans 
be made without regard to whether the required financial assistance is 
otherwise available from the private, cooperative, or other responsible 
sources.
    1973--Subsec. (a). Pub. L. 93-24, Secs. 2, 6, substituted in 
parenthetical text ``authorized to make or insure under subchapters I 
and II of this chapter'' for ``authorized to make under subchapter II of 
this chapter or to make or insure under subchapter I of this chapter'' 
and introductory words ``shall designate'' for ``may designate''.
    Subsec. (b). Pub. L. 93-24, Sec. 3, substituted introductory text 
``shall make loans in any such area designated by the Secretary in 
accordance with subsection (a) of this section and in any area 
designated as a major disaster by the President pursuant to the 
provisions of the Disaster Relief Act of 1970, as amended,'' for ``is 
authorized to make loans in any such area'' and ``: Provided, That'' for 
``provided'' before ``they have experience''.
    1962--Subsec. (b). Pub. L. 87-832 authorized loans to established 
oyster planters and to private domestic corporations or partnerships 
engaged primarily in oyster planting.


                    Effective Date of 1996 Amendment

    Section 621(b) of Pub. L. 104-127 provided that: ``Section 321(b)(1) 
of the Consolidated Farm and Rural Development Act [7 U.S.C. 1961(b)(1)] 
shall not apply until the Secretary of Agriculture makes the 
determination required by section 321(b)(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 1985 Amendment

    Section 1308(b)(2) of Pub. L. 99-198 provided that: ``The amendment 
made by paragraph (1) [amending this section] shall not apply to a 
person whose eligibility for an emergency loan is the result of damage 
to an annual crop planted or harvested before the end of 1986.''


                    Effective Date of 1984 Amendment

    Section 602(c) of Pub. L. 98-258 provided that: ``the amendments 
made by this section [amending this section and section 1964 of this 
title] shall be applicable to disasters occurring after May 30, 1983.''


                    Effective Date of 1980 Amendments

    Section 3(d) of Pub. L. 96-438 provided that: ``The amendments to 
subtitle C of the Consolidated Farm and Rural Development Act made by 
subsection (b) of this section [amending this section and sections 1962 
to 1964 and 1971 of this title] shall be effective with respect to loans 
approved by the Secretary of Agriculture under subtitle C [this 
subchapter] after the date of enactment of this Act [Oct. 13, 1980], 
except that, for borrowers with loans outstanding under subtitle C as of 
December 15, 1979--
        ``(1) the limits on loans under section 324 of the Consolidated 
    Farm and Rural Development Act [section 1964 of this title] made by 
    subsection (b)(1) of this section [amending this section and 
    sections 1962 to 1964 of this title], and
        ``(2) the reduction in the time limit on subsequent emergency 
    loans under section 330 of the Consolidated Farm and Rural 
    Development Act [section 1971 of this title] made by subsection 
    (b)(2) of this section [amending section 1971 of this title]
shall not apply to subsequent emergency loans under section 330 (as in 
effect on the date preceding the date of enactment of this Act) that are 
made to such borrowers for the disasters for which the borrowers 
obtained loans under subtitle C prior to December 16, 1979.''
    Amendment by Pub. L. 96-302 effective Oct. 1, 1980, see section 507 
of Pub. L. 96-302, set out as a note under section 631 of Title 15, 
Commerce and Trade.


                    Effective Date of 1974 Amendment

    Section 10(b) of Pub. L. 93-237 provided that: ``The provisions of 
subsection (a) of this section [amending this section] shall be given 
effect with respect to all loan applications and loans made in 
connection with a disaster occurring on or after April 20, 1973.''
    Section 10(d) of Pub. L. 93-237 provided in part that: ``The 
provisions of this subsection [amending this section] shall be given 
effect with respect to all loan applications and loans made in 
connection with a disaster occurring on or after December 27, 1972.''


                    Ineligibility for Emergency Loans

    Pub. L. 101-82, title III, Sec. 301, Aug. 14, 1989, 103 Stat. 581, 
provided that: ``Section 321(b) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1961(b)) shall not apply to a person who 
otherwise would be eligible for an emergency loan under subtitle C of 
such Act [7 U.S.C. 1961 et seq.], if such eligibility is the result of 
damage to an annual crop planted for harvest in 1989.''
    Similar provisions were contained in the following prior act:
    Pub. L. 100-387, title III, Sec. 311, Aug. 11, 1988, 102 Stat. 948.


  Ninety-Day Extension After January 2, 1974, of Deadline for Seeking 
 Assistance With Regard to Disasters Occurring on or After December 27, 
                                  1972

    Section 10(c) of Pub. L. 93-237 provided that: ``With regard to all 
disasters occurring on or after December 27, 1972, the Secretary of 
Agriculture shall extend for ninety days after the date of enactment of 
this section [Jan. 2, 1974] the deadline for seeking assistance under 
section 321 of the Consolidated Farm and Rural Development Act [this 
section] as amended by this section [amending this section].''

                  Section Referred to in Other Sections

    This section is referred to in sections 1964, 1991, 2008f, 2008h of 
this title; title 15 section 636; title 42 section 5154a.
