Header:
UNITED STATES CODE SERVICE
TITLE 7. AGRICULTURE
CHAPTER 50. AGRICULTURAL CREDIT
EMERGENCY LOANS
Date:
01/19/2012
Document:
§ 1961. Eligibility for loans
(a) Persons eligible. The Secretary shall make and insure loans under this subtitle [7 USCS §§ 1961 et seq.] only to the extent and in such amounts as provided in advance in appropriation Acts to (1) established farmers or ranchers (including equine farmers or 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 subtitle A [7 USCS §§ 1922 et seq.]) or operators (in the case of loans for a purpose under subtitle B [7 USCS §§ 1941 et seq.]) of not larger than family farms, and (2) farm cooperatives, private domestic corporations, partnerships, joint operations, trusts, or limited liability companies (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 owner-operators (in the case of loans for a purpose under subtitle A [7 USCS §§ 1922 et seq.]) or operators (in the case of loans for a purpose under subtitle B [7 USCS §§ 1941 et seq.]) of not larger than family farms (or in the case of such cooperatives, corporations, partnerships, joint operations, trusts, or limited liability companies 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 quarantine imposed by the Secretary under the Plant Protection Act or the animal quarantine laws (as defined in section 2509 of the Food, Agriculture, Conservation, and Trade Act of 1990 [21 USCS § 136a]), 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 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, joint operations, trusts, and limited liability companies, 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 subtitle A [7 USCS §§ 1922 et seq.]) or an operator interest (in the case of loans for a purpose under subtitle B [7 USCS §§ 1941 et seq.]). The Secretary shall accept applications from, and make or insure loans pursuant to the requirements of this subtitle [7 USCS §§ 1961 et seq.] to, applicants, otherwise eligible under this subtitle [7 USCS §§ 1961 et seq.], 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 quarantine imposed by the Secretary under the Plant Protection Act or the animal quarantine laws (as defined in section 2509 of the Food, Agriculture, Conservation, and Trade Act of 1990 [21 USCS § 136a]), 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 Assistance Act (42 U.S.C. 5121 et seq.). The Secretary shall accept applications for assistance under this subtitle [7 USCS §§ 1961 et seq.] from persons affected by such a quarantine or 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 quarantine or 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 subtitle [7 USCS §§ 1961 et seq.] 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 the date of enactment of this paragraph [enacted 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 subtitle [7 USCS §§ 1961 et seq.], the Secretary may make a loan to a poultry farmer under this subtitle 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 subtitle [7 USCS §§ 1961 et seq.].
(ii) Amount. Subject to the limitation contained in section 324(a)(2) [7 USCS § 1964(a)(2)], 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 subtitle, the Secretary may make a loan to a poultry farmer under this subtitle [7 USCS §§ 1961 et seq.] 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 subtitle [7 USCS §§ 1961 et seq.].
(ii) Amount. Subject to the limitation contained in section 324(a)(2) [7 USCS § 1964(a)(2)], 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 subtitle [7 USCS §§ 1961 et seq.] 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 102(a) of the Food and Agriculture Act of 1977 [7 USCS § 2266(a)].
(d) Definitions. For the purposes of this subtitle [7 USCS §§ 1961 et seq.]
(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.
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