,,ii #aaith ,,congress #ast ,session ,s4 #cabf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,november #f1 #bjbe ,mr4 ,welch 7for himself and ,mrs4 ,gillibrand7 introduced the following bill2 which was read twice and referred to the ,committee on ,agriculture1 ,nutrition1 and ,forestry ,a ,,bill ,to amend the ,consolidated ,farm and ,rural ,development ,act to reform farm loans1 to amend the ,department of ,agriculture ,reorganization ,act of #aiid to reform the ,national ,appeals ,division process1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,fair ,credit for ,farmers ,act of #bjbe4 #b4 ,deferment of payments for borrowers of farm loans 7a7 ,definitions ,in this section3 7#a7 ,covered producer ,the term covered producer means-- 7,a7 a limited resource farmer or rancher 7as defined in section #gah4b of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this ,act772 7,b7 a socially disadvantaged farmer or rancher 7as defined in section #beja7;a7 of the ,food1 ,agriculture1 ,conservation1 and ,trade ,act of #aiij 7#g ,u4,s4,c4 #bbgi7;a7772 7,c7 a beginning farmer or rancher 7as defined in that section72 and 7,d7 a veteran farmer or rancher 7as defined in that section74 7#b7 ,eligible borrower ,the term eligible borrower means a borrower that is a farmer or rancher that is-- 7,a7 delinquent1 as described in the definition of the term delinquent borrower in section #gfa4b7;b7 of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this ,act72 or 7,b7 financially distressed1 as described in the definition of the term financially distressed borrower in section #gfa4b7;b7 of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this ,act74 7#c7 ,farm loan ,the term farm loan means a direct or guaranteed-- 7,a7 farm ownership loan under subtitle ,a of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aibb et seq472 7,b7 operating loan under subtitle ,b of that ,act 7#g ,u4,s4,c4 #aida et seq472 or 7,c7 emergency loan under subtitle ,c of that ,act 7#g ,u4,s4,c4 #aifa et seq474 7#d7 ,secretary ,the term ,secretary means the ,secretary of ,agriculture4 7b7 ,deferment of payments on direct farm loans 7#a7 ,in general ,the ,secretary shall-- 7,a7 defer payments of principal and interest due on direct farm loans by eligible borrowers during the #b-year period beginning on the date of enactment of this ,act2 and 7,b7 extend by #b years the maturity date and repayment period of each direct farm loan the payments on which are deferred under subparagraph 7,a74 7#b7 ,exclusion ,paragraph 7#a7 does not apply to a direct farm loan the term of which is #ab months or less4 7#c7 ,authority to exceed loan maturity dates ,in extending a date under paragraph 7#a77;,b71 the ,secretary may exceed by not more than #b years-- 7,a7 the maximum period of repayment described in section #cjg of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aibg7 for a farm ownership loan under subtitle ,a of that ,act 7#g ,u4,s4,c4 #aibb et seq472 7,b7 the maximum period of repayment described in section #caf7;b7 of that ,act 7#g ,u4,s4,c4 #aidf7;b77 for an operating loan under subtitle ,b of that ,act 7#g ,u4,s4,c4 #aida et seq472 and 7,c7 the maximum period of repayment described in section #cbd7;d7 of that ,act 7#g ,u4,s4,c4 #aifd7;d77 for an emergency loan under subtitle ,c of that ,act 7#g ,u4,s4,c4 #aifa et seq474 7c7 ,interest rate during deferral ,the ,secretary shall modify each direct farm loan of an eligible borrower that is outstanding as of the date of enactment of this ,act such that the interest rate on all remaining principal of the farm loan is #j4abe percent during the #b-year period beginning on that date of enactment4 7d7 ,waiver of guaranteed farm loan fees for covered producers 7#a7 ,in general ,the ,secretary shall require lenders of guaranteed farm loans to covered producers to waive guarantee fees 7as described in section #gfb4acj7;d77#d7 of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of this ,act77 on those loans during the period-- 7,a7 beginning on the date of enactment of this ,act2 and 7,b7 ending not earlier than #b years after that date of enactment4 7#b7 ,extension ,the ,secretary may extend a deadline under paragraph 7#a77;,b7 by an additional #ahj days if the ,secretary determines the extension to be necessary4 #c4 ,farm loan reform 7a7 ,general reforms 7#a7 ,in general ,subtitle ,d of the ,consolidated ,farm and ,rural ,development ,act is amended by inserting after section #cgd 7#g ,u4,s4,c4 #bjjh;i7 the following3 #cge4 ,farmer program loan reform 7a7 ,definitions ,in this section3 7#a7 ,adverse decision ,the term adverse decision has the meaning given the term in section #bga of the ,department of ,agriculture ,reorganization ,act of #aiid 7#g ,u4,s4,c4 #fiia74 7#b7 ,principal residence ,the term principal residence means the principal residence 7as determined by the ,secretary7 of a borrower of a farmer program loan1 including a residence and not more than #aj acres of adjoining land possessed and occupied by the borrower4 7b7 ,determination letters and adverse decisions 7#a7 ,in general ,in the case of any adverse decision relating to a farmer program loan1 a ,farm ,service ,agency program benefit1 or the noninsured crop disaster assistance program established by section #aif of the ,federal ,agriculture ,improvement and ,reform ,act of #aiif 7#g ,u4,s4,c4 #gccc71 the ,secretary shall include in a determination letter provided to the applicant1 to the maximum extent practicable-- 7,a7 a description of each reason known1 or that reasonably should have been known1 to the ,secretary for that adverse decision2 7,b7 a reference to each regulation and each relevant instruction in the ,farm ,loan ,programs handbook1 the ,noninsured ,crop ,disaster ,assistance ,program handbook1 or any other appropriate handbook published by the ,farm ,service ,agency2 and 7,c7 instructions for accessing the ,electronic ,code of ,federal ,regulations and the handbooks described in subparagraph 7,b7 online4 7#b7 ,effect of failure to state reasons ,if the ,secretary issues any adverse decision relating to an application for a farmer program loan1 a ,farm ,service ,agency program benefit1 or the noninsured crop disaster assistance program established by section #aif of the ,federal ,agriculture ,improvement and ,reform ,act of #aiif 7#g ,u4,s4,c4 #gccc7 and does not include in a determination letter provided to the applicant a reason known or which should have reasonably been known to the ,secretary for that adverse decision1 the ,secretary may not subsequently issue an adverse decision to that applicant on the basis of the same reason1 known or which should have reasonably been known to the ,secretary1 unless the circumstances of the applicant have substantially changed since the issuance of the prior adverse decision4 7c7 ,collateralization 7#a7 ,origination ,the ,secretary may secure a direct farmer program loan with a principal residence only if the total value of other assets available to secure the farmer program loan does not provide adequate security 7as defined in section #gfa4b7;b7 of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of the ,fair ,credit for ,farmers ,act of #bjbe77 for the loan4 7#b7 ,partial release of principal residence security ,in the case of a farmer program loan secured in part by a principal residence1 the ,secretary shall initiate a partial release of the principal residence as security in accordance with subpart ,h of part #gfe of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of the ,fair ,credit for ,farmers ,act of #bjbe71 without any action required by the borrower1 when the total value of other assets securing the farmer program loan is equal to #ajj percent of the remaining loan amount4 7#c7 ,loan servicing 7,a7 ,in general ,in the case of a farmer program loan borrower who is delinquent prior to restructuring the farmer program loan1 the borrower shall execute and provide to the ,secretary a lien on assets necessary to achieve not more than #ajj percent collateralization of the loan value4 7,b7 ,best lien ,except as provided in section #gfd4ajf of title #g1 ,code of ,federal ,regulations 7as in effect on the date of enactment of the ,fair ,credit for ,farmers ,act of #bjbe71 the ,secretary shall take the best lien obtainable on assets described in subparagraph 7,a71 subject to the condition that a primary residence shall be the last option available to the ,secretary to achieve #ajj percent collateralization of the loan value4 7#d7 ,prohibition on additional security ,the ,secretary may not secure a direct farmer program loan with any property that provides security in excess of the amount of security value equal to the loan amount4 7d7 ,eligibility requirements ,the ,secretary shall not impose any limitation relating to the number of years in which a farmer program loan may be closed by a borrower4 4 7#b7 ,conforming amendment ,section #aif7;b7 of the ,federal ,agriculture ,improvement and ,reform ,act of #aiif 7#g ,u4,s4,c4 #gccc7;b77 is amended by adding at the end the following3 7#e7 ,adverse decisions ,in the case of an adverse decision relating to an application under this subsection1 section #cge7;b7 of the ,consolidated ,farm and ,rural ,development ,act shall apply4 4 7b7 ,farm loan eligibility 7#a7 ,persons eligible for direct farm ownership loans ,section #cjb7;b7 of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aibb7;b77 is amended-- 7,a7 by striking paragraph 7#a7 and inserting the following3 7#a7 ,in general ,the ,secretary may make a direct loan under this subtitle only to a farmer or rancher who has at least #a year of experience substantially participating in the management and business operations of a farm or ranch1 as determined by the ,secretary4 2 and 7,b7 by striking paragraphs 7#c7 and 7#d7 and inserting the following3 7#c7 ,waiver authority ,in the case of a qualified beginning farmer or rancher1 the ,secretary may waive the #a-year requirement described in paragraph 7#a7 if the qualified beginning farmer or rancher-- 7,a7 has an established relationship with an individual who has experience in farming or ranching1 or with a local farm or ranch operator or organization1 approved by the ,secretary1 that is committed to mentoring the qualified beginning farmer or rancher2 or 7,b7 has other acceptable education or experience for an appropriate period of time1 as determined by the ,secretary4 4 7#b7 ,persons eligible for direct farm operating loans ,section #caa of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aida7 is amended by striking subsection 7c74 7c7 ,refinancing of debt with farm loans 7#a7 ,allowed purposes of farm ownership loans ,section #cjc7;a77#a7 of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aibc7;a77#a77 is amended by striking subparagraph 7,e7 and inserting the following3 7,e7 refinancing the indebtedness of the farmer or rancher1 if the farmer or rancher-- 7i7 has used a direct loan under this subtitle to refinance indebtedness not more than #d times previously2 and 7ii7 is refinancing a debt obtained from a creditor other than the ,secretary1 including a guaranteed loan4 4 7#b7 ,allowed purposes of direct operating loans ,section #cab7;a7 of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aidb7;a77 is amended by striking paragraph 7#i7 and inserting the following3 7#i7 refinancing the indebtedness of a borrower2 or 4 7d7 ,effect of preferred lender certification ,section #cci7;d77#d77;,b7 of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aihi7;d77#d77;,b77 is amended-- 7#a7 by striking institutions to and inserting the following3 institutions-- 7i7 to 2 and 7#b7 in clause 7i7 7as so designated7-- 7,a7 by striking subsection relating and inserting subsection1 relating2 7,b7 by striking worthiness1 the and inserting worthiness or the2 and 7,c7 by striking collection and liquidation of loans1 and to and inserting the following3 or collection of loans2 and 7ii7 to 4 7e7 ,loan fund set-,asides for beginning farmers and ranchers ,section #cdf7;b77#b7 of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #aiid7;b77#b77 is amended-- 7#a7 in subparagraph 7,a7-- 7,a7 in clause 7i77,,ii71 by inserting 1 to the extent practicable after ,april #a of the fiscal year2 and 7,b7 in clause 7iii71 by inserting 1 to the extent practicable after ,september #a of the fiscal year2 and 7#b7 in subparagraph 7,b77iii71 by inserting 1 to the extent practicable after ,april #a of the fiscal year4 7f7 ,removal of eligibility restriction based on previous debt write-,down or other loss ,section #cgc of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #bjjh;h7 is amended-- 7#a7 in subsection 7b77#b77;,a7-- 7,a7 by striking clause 7i72 7,b7 in clause 7ii71 by striking chapters #aa1 #ab1 or #ac of ,title #aa of the and inserting chapter #aa1 #ab1 or #ac of title #aa12 and 7,c7 by redesignating clauses 7ii7 and 7iii7 as clauses 7i7 and 7ii71 respectively2 and 7#b7 by striking subsection 7c7 and inserting the following3 7c7 ,prohibition on eligibility restriction based on debt write-,down or other loss ,the ,secretary shall not restrict the eligibility of a borrower for a farm ownership or operating loan under subtitle ,a or ,b based on a previous debt write-down or other loss to the ,secretary4 4 7g7 ,equitable relief 7#a7 ,in general ,section #cff of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #bjjh;a7 is amended-- 7,a7 in subsection 7a7-- 7i7 in paragraph 7#a71 by striking 7#a7 received and inserting 7#a77;,a7 received2 7ii7 in paragraph 7#b7-- 7,i7 by striking the period at the end and inserting 2 or2 and 7,,ii7 by striking 7#b7 the ,secretary and inserting 7,b7 the ,secretary2 and 7iii7 by adding at the end the following3 7#b7 7,a7 received a benefit under any other program administered by an agency 7as defined in section #bga of the ,department of ,agriculture ,reorganization ,act of #aiid 7#g ,u4,s4,c4 #fiia772 and 7,b7 the ,secretary determines is not in compliance with the requirements of the provisions of law that authorize that program4 2 7,b7 in subsection 7b77#b71 by inserting 1 including having made management or financial decisions for the farming or ranching operation of the farmer or rancher that were detrimental due to the erroneous nature of an official communication from the ,department of ,agriculture1 regardless of whether a financial benefit was received or only promised before the period at the end2 7,c7 in subsection 7c77#a71 by striking 7a77#b7 and inserting 7a77#a77;,b72 7,d7 in subsection 7e71 by striking section in the matter preceding paragraph 7#a7 and all that follows through shall not be in paragraph 7#b7 and inserting section shall be2 and 7,e7 by adding at the end the following3 7f7 ,authority of ,national ,appeals ,division hearing officers 7#a7 ,in general ,a hearing officer 7as defined in section #bga of the ,department of ,agriculture ,reorganization ,act of #aiid 7#g ,u4,s4,c4 #fiia77 may provide equitable relief under this section4 7#b7 ,review ,the ,secretary may review a decision of a hearing officer 7as so defined7 to grant equitable relief pursuant to paragraph 7#a74 7g7 ,cases in which an applicant is eligible 7#a7 ,definitions ,in this subsection3 7,a7 ,adverse decision ,the term adverse decision has the meaning given the term in section #bga of the ,department of ,agriculture ,reorganization ,act of #aiid 7#g ,u4,s4,c4 #fiia74 7,b7 ,applicant ,the term applicant means a person who submitted to1 or attempted to submit to1 the ,farm ,service ,agency an application for-- 7i7 a direct farm ownership1 operating1 or emergency loan under this title2 or 7ii7 a ,farm ,service ,agency program benefit4 7#b7 ,denial based on feasibility 7,a7 ,in general ,a loan applicant shall be eligible for equitable relief under this section if-- 7i7 the ,national ,appeals ,division determines that the ,farm ,service ,agency was in error in denying the loan1 benefit1 or payment based on feasibility2 7ii7 the ,national ,appeals ,division has confirmed the accuracy of the projected income and projected expenses described in the original application submitted by the applicant2 and 7iii7 the original application submitted by the applicant is no longer feasible due to the delay caused by the erroneous denial by the ,farm ,service ,agency and the length of the appeals process4 7,b7 ,amount ,the amount of equitable relief under subparagraph 7,a7 shall be the amount equal to the difference between-- 7i7 the projected income described in the application2 and 7ii7 the projected expenses described in the application4 7#c7 ,denial based on eligibility ,a loan applicant shall be eligible for equitable relief under this section if-- 7,a7 feasibility was not listed as a reason for an adverse decision in the determination letter provided to the applicant2 7,b7 eligibility was listed as a reason for an adverse decision in the determination letter provided to the applicant2 7,c7 the ,national ,appeals ,division determines that the ,farm ,service ,agency was in error in denying the loan based on eligibility2 and 7,d7 the original application submitted by the applicant is no longer feasible due to the delay caused by the erroneous denial by the ,farm ,service ,agency and the length of the appeals process4 7#d7 ,subsequently withdrawn adverse decision ,an applicant shall be eligible for equitable relief under this section if-- 7,a7 the ,farm ,service ,agency issued an adverse decision on an application that the ,farm ,service ,agency subsequently withdrew2 and 7,b7 the original application submitted by the applicant is no longer feasible due to the delay caused by the adverse decision4 7#e7 ,promised program benefits not received ,an applicant shall be eligible for equitable relief under this section if-- 7,a7 the ,farm ,service ,agency indicated in an official communication made after the date of enactment of this subsection that the applicant could expect the loan1 benefit1 or payment1 and then reversed its decision2 and 7,b7 the applicant acted in good faith4 4 7#b7 ,application ,subsection 7g7 of section #cff of the ,consolidated ,farm and ,rural ,development ,act 7#g ,u4,s4,c4 #bjjh;a7-- 7,a7 applies only with respect to applications submitted or attempted to be submitted1 and decisions or communications made1 after the date of enactment of this ,act2 and 7,b7 does not apply retroactively with respect to-- 7i7 any application submitted or attempted to be submitted1 or decision or communication made1 before that date of enactment2 or 7ii7 any action1 inaction1 or consequence resulting from a decision or communication made before that date of enactment4 #d4 ,national appeals division reform 7a7 ,burden of proof ,section #bgg7;c77#d7 of the ,department of ,agriculture ,reorganization ,act of #aiid 7#g ,u4,s4,c4 #fiig7;c77#d77 is amended-- 7#a7 by striking ,the appellant and inserting the following3 7,a7 ,in general ,except as provided in subparagraph 7,b71 the appellant 2 and 7#b7 by adding at the end the following3 7,b7 ,appellants below income threshold 7i7 ,in general ,in the case of an appellant described in clause 7ii71 the agency shall bear the burden of proving by substantial evidence that the adverse decision of the agency was not erroneous4 7ii7 ,appellants described ,an appellant referred to in clause 7i7 is an appellant-- 7,i7 the adjusted gross income of which for the previous year is not more than #cjj1jjj2 or 7,,ii7 the average annual adjusted gross income of which for the previous #e-year period is not more than #cjj1jjj4 4 7b7 ,implementation ,section #bhj of the ,department of ,agriculture ,reorganization ,act of #aiid 7#g ,u4,s4,c4 #gjjj7 is amended-- 7#a7 by redesignating subsection 7b7 as subsection 7c72 and 7#b7 by inserting after subsection 7a7 the following3 7b7 ,requirement ,in implementing a final determination in accordance with subsection 7a71 the head of an agency shall use the information used by the ,division to make the final determination1 without requiring additional information on which implementation would be conditioned1 except as otherwise provided in the decision letter relating to the final determination4 4