§ 1985. — Security servicing.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1985]
TITLE 7--AGRICULTURE
CHAPTER 50--AGRICULTURAL CREDIT
SUBCHAPTER IV--ADMINISTRATIVE PROVISIONS
Sec. 1985. Security servicing
(a) Preservation and protection of security, lien, or priority of lien
securing loan
The Secretary is authorized and empowered to make advances, without
regard to any loan or total indebtedness limitation, to preserve and
protect the security for or the lien or priority of the lien securing
any loan or other indebtedness owing to, insured by, or acquired by the
Secretary under this chapter or under any other programs administered by
the Farmers Home Administration or the Rural Development Administration;
to bid for and purchase at any execution, foreclosure, or other sale or
otherwise to acquire property upon which the United States has a lien by
reason of a judgment or execution arising from, or which is pledged,
mortgaged, conveyed, attached, or levied upon to secure the payment of,
any such indebtedness whether or not such property is subject to other
liens, to accept title to any property so purchased or acquired; and to
sell, manage, or otherwise dispose of such property as hereinafter
provided.
(b) Operation or lease of realty
Except as provided in subsections (c) and (e) of this section, real
property administered under the provisions of this chapter may be
operated or leased by the Secretary for such period or periods as the
Secretary may deem necessary to protect the Government's investment
therein.
(c) Sale of property
(1) In general
Subject to this subsection and subsection (e)(1)(A) of this
section, the Secretary shall offer to sell real property that is
acquired by the Secretary under this chapter using the following
order and method of sale:
(A) Advertisement
Not later than 15 days after acquiring real property, the
Secretary shall publicly advertise the property for sale.
(B) Beginning farmer or rancher
(i) In general
Not later than 135 days after acquiring real property,
the Secretary shall offer to sell the property to a
qualified beginning farmer or rancher at current market
value based on a current appraisal.
(ii) Random selection
If more than 1 qualified beginning farmer or rancher
offers to purchase the property, the Secretary shall select
between the qualified applicants on a random basis.
(iii) Appeal of random selection
A random selection or denial by the Secretary of a
beginning farmer or rancher for farm inventory property
under this subparagraph shall be final and not
administratively appealable.
(iv) Combining and dividing of property
To the maximum extent practicable, the Secretary shall
maximize the opportunity for beginning farmers and ranchers
to purchase real property acquired by the Secretary under
this chapter by combining or dividing inventory parcels of
the property in such manner as the Secretary determines to
be appropriate.
(C) Public sale
If no acceptable offer is received from a qualified
beginning farmer or rancher under subparagraph (B) not later
than 135 days after acquiring the real property, the Secretary
shall, not later than 30 days after the 135-day period, sell the
property after public notice at a public sale, and, if no
acceptable bid is received, by negotiated sale, at the best
price obtainable.
(2) Previous lease
In the case of real property acquired before April 4, 1996, that
the Secretary leased before April 4, 1996, not later than 60 days
after the lease expires, the Secretary shall offer to sell the
property in accordance with paragraph (1).
(3) Interest
(A) In general
Subject to subparagraph (B), any conveyance of real property
under this subsection shall include all of the interest of the
United States in the property, including mineral rights.
(B) Conservation
The Secretary may for conservation purposes grant or sell an
easement, restriction, development right, or similar legal right
to real property to a State, a political subdivision of a State,
or a private nonprofit organization separately from the
underlying fee or other rights to the property owned by the
United States.
(4) Other law
The Federal Property and Administrative Services Act of 1949 \1\
shall not apply to any exercise of authority under this chapter.
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\1\ See References in Text note below.
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(5) Lease of property
(A) In general
Subject to subparagraph (B), the Secretary may not lease any
real property acquired under this chapter.
(B) Exception
(i) Beginning farmer or rancher
The Secretary may lease or contract to sell to a
beginning farmer or rancher a farm or ranch acquired by the
Secretary under this chapter if the beginning farmer or
rancher qualifies for a credit sale or direct farm ownership
loan under subchapter I of this chapter but credit sale
authority for loans or direct farm ownership loan funds,
respectively, are not available.
(ii) Term
The term of a lease or contract to sell to a beginning
farmer or rancher under clause (i) shall be until the
earlier of--
(I) the date that is 18 months after the date of the
lease or sale; or
(II) the date that direct farm ownership loan funds
or credit sale authority for loans becomes available to
the beginning farmer or rancher.
(iii) Income-producing capability
In determining the rental rate on real property leased
under this subparagraph, the Secretary shall consider the
income-producing capability of the property during the term
that the property is leased.
(6) Expedited determination
(A) In general
On the request of an applicant, not later than 30 days after
denial of the applicant's application, the appropriate State
director shall provide an expedited review and determination of
whether the applicant is a beginning farmer or rancher for the
purpose of acquiring farm inventory property.
(B) Appeal
The determination of a State Director under subparagraph (A)
shall be final and not administratively appealable.
(C) Effects of determinations
(i) In general
The Secretary shall maintain statistical data on the
number and results of determinations made under subparagraph
(A) and the effect of the determinations on--
(I) selling farm inventory property to beginning
farmers and ranchers; and
(II) disposing of real property in inventory.
(ii) Notification
The Secretary shall notify the Committee on Agriculture
of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate if the
Secretary determines that the review process under
subparagraph (A) is adversely affecting the selling of farm
inventory property to beginning farmers or ranchers or the
disposing of real property in inventory.
(d) Easements; condemnations
With respect to any real property administered under this chapter,
the Secretary is authorized to grant or sell easements or rights-of-way
for roads, utilities, and other appurtenances not inconsistent with the
public interest. With respect to any rights-of-way over land on which
the United States has a lien administered under this chapter, the
Secretary may release said lien upon payment to the United States of
adequate consideration, and the interest of the United States arising
under any such lien may be acquired for highway purposes by any State or
political subdivision thereof in condemnation proceedings under State
law by service by certified mail upon the United States attorney for the
district, the State Director of the Farmers Home Administration for the
State in which the farm is located, and the Attorney General of the
United States: Provided, however, That the United States shall not be
required to appear, answer, or respond to any notice or writ sooner than
ninety days from the time such notice or writ is returnable or purports
to be effective, and the taking or vesting of title to the interest of
the United States shall not become final under any proceeding, order, or
decree until adequate compensation and damages have been finally
determined and paid to the United States or into the registry of the
court.
(e) Real property located within Indian reservation; conservation
practices; adverse effects prohibition
(1)(A)(i) Except as provided in subparagraph (D), if--
(I) the Secretary acquires property under this chapter that is
located within an Indian reservation; and
(II) the borrower-owner is the Indian tribe that has
jurisdiction over the reservation in which the real property is
located or the borrower-owner is a member of such Indian tribe;
the Secretary shall dispose of or administer the property only as
provided for in this subparagraph.
(ii) For purposes of this subparagraph, the term ``Indian
reservation'' means all land located within the limits of any Indian
reservation under the jurisdiction of the United States, notwithstanding
the issuance of any patent, and, including rights-of-way running through
the reservation; trust or restricted land located within the boundaries
of a former reservation of a federally recognized Indian tribe in the
State of Oklahoma; or all Indian allotments the Indian titles to which
have not been extinguished if such allotments are subject to the
jurisdiction of a federally recognized Indian tribe.
(iii) Not later than 90 days after acquiring the property, the
Secretary shall afford an opportunity to purchase or lease the real
property in accordance with the order of priority established under
clause (iv) by the Indian tribe having jurisdiction over the Indian
reservation within which the real property is located or, if no order of
priority is established by such Indian tribe under clause (iv), in the
following order:
(I) to an Indian member of the Indian tribe that has
jurisdiction over the reservation within which the real property is
located;
(II) to an Indian corporate entity;
(III) to such Indian tribe.
(iv) The governing body of any Indian tribe having jurisdiction over
an Indian reservation may revise the order of priority provided in
clause (iii) under which lands located within such reservation shall be
offered for purchase or lease by the Secretary under clause (iii) and
may restrict the eligibility for such purchase or lease to--
(I) persons who are members of such Indian tribe,
(II) Indian corporate entities that are authorized by such
Indian tribe to lease or purchase lands within the boundaries of
such reservation, or
(III) such Indian tribe itself.
(v) If real property described in clause (i) is not purchased or
leased under clause (iii) and the Indian tribe having jurisdiction over
the reservation within which the real property is located is unable to
purchase or lease the real property, the Secretary shall transfer the
real property to the Secretary of the Interior who shall administer the
real property as if the real property were held in trust by the United
States for the benefit of such Indian tribe. From the rental income
derived from the lease of the transferred real property, and all other
income generated from the transferred real property, the Secretary of
the Interior shall pay those State, county, municipal, or other local
taxes to which the transferred real property was subject at the time of
acquisition by the Secretary, until the earlier of--
(I) the expiration of the 4-year period beginning on the date on
which the real property is so transferred, or
(II) such time as the lands are transferred into trust pursuant
to clause (viii).
(vi) At any time any real property is transferred to the Secretary
of the Interior under clause (v), the Secretary of Agriculture shall be
deemed to have no further responsibility under this Act for collection
of any amounts with regard to the farm program loan which had been
secured by such real property, nor with regard to any lien arising out
of such loan transaction, nor for repayments of any amount with regard
to such loan transactions or liens to the Treasury of the United States,
and the Secretary of the Interior shall be deemed to have succeeded to
all right, title and interest of the Secretary of Agriculture in such
real estate arising from the farm program loan transaction, including
the obligation to remit to the Treasury of the United States, in
repayment of the original loan, those amounts provided in clause (vii).
(vii) After the payment of any taxes which are required to be paid
under clause (v), all remaining rental income derived from the lease of
the real property transferred to the Secretary of the Interior under
clause (v), and all other income generated from the real property
transferred to the Secretary of the Interior under clause (v), shall be
deposited as miscellaneous receipts in the Treasury of the United States
until the amount deposited is equal to the lesser of--
(I) the amount of the outstanding lien of the United States
against such real property, as of the date the real property was
acquired by the Secretary;
(II) the fair market value of the real property, as of the date
of the transfer to the Secretary of the Interior; or
(III) the capitalized value of the real property, as of the date
of the transfer to the Secretary of the Interior.
(viii) When the total amount that is required to be deposited under
clause (vii) with respect to any real property has been deposited into
the Treasury of the United States, title to the real property shall be
held in trust by the United States for the benefit of the Indian tribe
having jurisdiction over the Indian reservation within which the real
property is located.
(ix) Notwithstanding any other clause of this subparagraph, the
Indian tribe having jurisdiction over the Indian reservation within
which the real property described in clause (i) is located may, at any
time after the real property has been transferred to the Secretary of
the Interior under clause (v), offer to pay the remaining amount on the
lien, or the fair market value of the real property, whichever is less.
Upon payment of such amount, title to such real property shall be held
by the United States in trust for the tribe and such trust or restricted
lands that have been acquired by the Secretary under foreclosure or
voluntary transfer under a loan made or insured under this chapter and
transferred to an Indian person, entity, or tribe under the provisions
of this subparagraph shall be deemed to have never lost trust or
restricted status.
(x) This subparagraph shall apply to all lands in the land inventory
established under this chapter (as of November 28, 1990) that were
(immediately prior to November 28, 1990) owned by an Indian borrower-
owner described in clause (i) and that are situated within an Indian
reservation (as defined in clause (ii)), regardless of the date of
foreclosure or acquisition by the Secretary. The Secretary shall afford
an opportunity to a tribal member, an Indian corporate entity, or the
tribe to purchase or lease the real property as provided in clause
(iii). If the right is not exercised or no expression of intent to
exercise such right is received within 180 days after November 28, 1990,
the Secretary shall transfer the real property to the Secretary of the
Interior as provided in clause (v).
(B) The rights provided in this subsection shall be in addition to
any such right of first refusal under the law of the State in which the
property is located.
(C) As used in this paragraph, the term ``borrower-owner'' means--
(i) a borrower from whom the Secretary acquired real farm or
ranch property (including the principal residence of the borrower)
used to secure any loan made to the borrower under this chapter; or
(ii) in any case in which an owner of property pledged the
property to secure the loan and the owner is different than the
borrower, the owner.
(D)(i) If--
(I) the real property described in subparagraph (A)(i) is
located within an Indian reservation;
(II) the borrower-owner is an Indian tribe that has jurisdiction
over the reservation in which the real property is located or the
borrower-owner is a member of an Indian tribe;
(III) the borrower-owner has obtained a loan made, insured, or
guaranteed under this chapter; and
(IV) the borrower-owner and the Secretary have exhausted all of
the procedures provided for in this chapter to permit a borrower-
owner to retain title to the real property, such that it is
necessary for the borrower-owner to relinquish title,
the Secretary shall dispose of or administer the property only as
provided in subparagraph (A), as modified by this subparagraph.
(ii) The Secretary shall provide the borrower-owner of real property
that is described in clause (i) with written notice of--
(I) the right of the borrower-owner to voluntarily convey the
real property to the Secretary; and
(II) the fact that real property so conveyed will be placed in
the inventory of the Secretary.
(iii) The Secretary shall provide the borrower-owner of the real
property with written notice of the rights and protections provided
under this chapter to the borrower-owner, and the Indian tribe that has
jurisdiction over the reservation in which the real property is located,
from foreclosure or liquidation of the real property, including written
notice of--
(I) the provisions of subparagraph (A), this subparagraph, and
subsection (g)(6) \1\ of this section;
(II) if the borrower-owner does not voluntarily convey the real
property to the Secretary, that--
(aa) the Secretary may foreclose on the property;
(bb) in the event of foreclosure, the property will be
offered for sale;
(cc) the Secretary must offer a bid for the property that is
equal to the fair market value of the property or the
outstanding principal and interest of the loan, whichever is
higher;
(dd) the property may be purchased by another party; and
(ee) if the property is purchased by another party, the
property will not be placed in the inventory of the Secretary
and the borrower-owner will forfeit the rights and protections
provided under this chapter; and
(III) the opportunity of the borrower-owner to consult with the
Indian tribe that has jurisdiction over the reservation in which the
real property is located or counsel to determine if State or tribal
law provides rights and protections that are more beneficial than
those provided the borrower-owner under this chapter.
(iv)(I) Except as provided in subclause (II), the Secretary shall
accept the voluntary conveyance of real property described in clause
(i).
(II) If a hazardous substance (as defined in section 9601(14) of
title 42) is located on the property and the Secretary takes remedial
action to protect human health or the environment if the property is
taken into inventory, the Secretary shall accept the voluntary
conveyance of the property only if the Secretary determines that it is
in the best interests of the Federal Government.
(v) Foreclosure procedures.--
(I) Notice to borrower.--If an Indian borrower-owner does not
voluntarily convey to the Secretary real property described in
clause (i), not less than 30 days before a foreclosure sale of the
property, the Secretary shall provide the Indian borrower-owner with
the option of--
(aa) requiring the Secretary to assign the loan and security
instruments to the Secretary of the Interior, if the Secretary
of the Interior agrees to an assignment releasing the Secretary
of Agriculture from all further responsibility for collection of
any amounts with regard to the loan secured by the real
property; or
(bb) requiring the Secretary to assign the loan and security
instruments to the tribe having jurisdiction over the
reservation in which the real property is located, if the tribe
agrees to the assignment.
(II) Notice to tribe.--If an Indian borrower-owner does not
voluntarily convey to the Secretary real property described in
clause (i), not less than 30 days before a foreclosure sale of the
property, the Secretary shall provide written notice to the Indian
tribe that has jurisdiction over the reservation in which the real
property is located of--
(aa) the sale;
(bb) the fair market value of the property; and
(cc) the requirements of this subparagraph.
(III) Assumed loans.--If an Indian tribe assumes a loan under
subclause (I)--
(aa) the Secretary shall not foreclose the loan because of
any default that occurred prior to the date of the assumption;
(bb) the loan shall be for the lesser of the outstanding
principal and interest of the loan or the fair market value of
the property; and
(cc) the loan shall be treated as though the loan was made
under sections 488 to 494 of title 25.
(vi)(I) Except as provided in subclause (II), at a foreclosure sale
of real property described in clause (i), the Secretary shall offer a
bid for the property that is equal to the higher of--
(aa) the fair market value of the property; or
(bb) the outstanding principal and interest of the loan.
(II) If a hazardous substance (as defined in section 9601(14) of
title 42) is located on the property and the Secretary takes remedial
action to protect human health or the environment if the property is
taken into inventory, subclause (I) shall apply only if the Secretary
determines that it is in the best interests of the Federal Government.
(2) The Secretary shall not offer for sale or sell any such farmland
if the placing of such farmland on the market will have a detrimental
effect on the value of farmland in the area.
(3)(A) The Secretary may sell farmland administered under this
chapter through an installment sale or similar device that contains such
terms as the Secretary considers necessary to protect the investment of
the Federal Government in such land.
(B) The Secretary may subsequently sell any contract entered into to
carry out subparagraph (A).
(4) In the case of farmland administered under this chapter that is
highly erodible land (as defined in section 3801 of title 16), the
Secretary may require the use of specified conservation practices on
such land as a condition of the sale or lease of such land.
(5) Notwithstanding any other provisions of law, compliance by the
Secretary with this subsection shall not cause any acreage allotment,
marketing quota, or acreage base assigned to such property to lapse,
terminate, be reduced, or otherwise be adversely affected.
(6) In the event of any conflict between any provision of this
subsection and any provision of the law of any State providing a right
of first refusal to the owner of farmland or the operator of a farm
before the sale or lease of land to any other person, such provision of
State law shall prevail.
(f) Normal security income
(1) As used in this subsection, the term ``normal income security''
means all security not considered basic security, including crops,
livestock, poultry products, Agricultural Stabilization and Conservation
Service payments and Commodity Credit Corporation payments, and other
property covered by Farmers Home Administration liens that is sold in
conjunction with the operation of a farm or other business, but shall
not include any equipment (including fixtures in States that have
adopted the Uniform Commercial Code), or foundation herd or flock, that
is the basis of the farming or other operation, and is the basic
security for a Farmers Home Administration farmer program loan.
(2) The Secretary shall release from the normal income security
provided for such loan an amount sufficient to pay for the essential
household and farm operating expenses of the borrower, until such time
as the Secretary accelerates such loan.
(3) A borrower whose account was accelerated on or after November 1,
1985, and on or before May 7, 1987, but not thereafter foreclosed on or
liquidated, shall be entitled to the release of security income for a
period of 12 months, to pay the essential household and farm operating
expenses of such borrower in an amount not to exceed $18,000 over 12
months, if such borrower--
(A) as of October 30, 1987, continued to be actively engaged in
the farming operations for which the Secretary had made the farmer
program loan; and
(B) as of the deadline for responding to the notice provided for
under paragraph (5), requests restructuring of such loans pursuant
to section 2001 of this title.
(4) The county committee in the county in which borrower's land is
located shall determine whether the borrower has complied with the
requirements of paragraph (3)(A).
(5)(A) Within 45 days after January 6, 1988, the Secretary shall
provide to the borrowers described in paragraph (3) notice by certified
mail of the right of such borrowers to apply for the benefits under such
paragraph.
(B) Releases under such paragraph shall be made to qualified
borrowers who have responded to the notice within 30 days after receipt.
(C) Within 12 months after a borrower has requested restructuring
under section 2001 of this title, the Secretary shall make a final
determination on the request. Notwithstanding the 12-month limitation
provided for in paragraph (3), releases shall continue to be made to the
borrower until a denial or dismissal of the application of the borrower
for restructuring under section 2001 of this title is made. The amount
of essential household and farm operating expenses which may be released
to any borrower eligible for such releases after 12 months may exceed
$18,000, by an amount proportionate to the period of time beyond 12
months before a final determination is made by the Secretary.
(6) If a borrower is required to plan for or to report on how
proceeds from the sale of collateral property will be used, the
Secretary shall--
(A) notify the borrower of such requirement; and
(B) notify the borrower of the right to the release of funds
under this section and the means by which a request for the funds
may be made.
(7) The Secretary shall issue regulations consistent with this
section that--
(A) ensure the release of funds to each borrower; and
(B) establish guidelines for releases under paragraph (3),
including a list of expenditures for which funds will normally be
released.
(g) Easements on inventoried property
(1) In general
Subject to paragraph (2), in the disposal of real property under
this section, the Secretary shall establish perpetual wetland
conservation easements to protect and restore wetlands or converted
wetlands that exist on inventoried property.
(2) Limitation
The Secretary shall not establish a wetland conservation
easement on an inventoried property that--
(A) was cropland on the date the property entered the
inventory of the Secretary; or
(B) was used for farming at any time during the period
beginning on the date 5 years before the property entered the
inventory of the Secretary and ending on the date the property
entered the inventory of the Secretary.
(3) Notification
The Secretary shall provide prior written notification to a
borrower considering preservation loan servicing that a wetlands
conservation easement may be placed on land for which the borrower
is negotiating a lease option.
(4) Appraised value
The appraised value of the farm shall reflect the value of the
land due to the placement of wetland conservation easements.
(Pub. L. 87-128, title III, Sec. 335, Aug. 8, 1961, 75 Stat. 315; Pub.
L. 92-419, title I, Sec. 127, Aug. 30, 1972, 86 Stat. 666; Pub. L. 99-
198, title XIII, Secs. 1314(a), 1315, 1318(b)(1), Dec. 23, 1985, 99
Stat. 1526, 1528, 1531; Pub. L. 100-233, title VI, Secs. 610, 611, Jan.
6, 1988, 101 Stat. 1669, 1673; Pub. L. 101-624, title XVIII,
Secs. 1813(a)-(h)(1), 1816(e), title XXIII, Secs. 2303(c), 2388(g), Nov.
28, 1990, 104 Stat. 3821-3823, 3827, 3981, 4053; Pub. L. 102-237, title
V, Sec. 501(f), Dec. 13, 1991, 105 Stat. 1867; Pub. L. 102-552, title V,
Sec. 516(h)(1), Oct. 28, 1992, 106 Stat. 4138; Pub. L. 102-554,
Secs. 16, 17, Oct. 28, 1992, 106 Stat. 4154; Pub. L. 104-127, title VI,
Secs. 638, 639, Apr. 4, 1996, 110 Stat. 1093, 1097; Pub. L. 107-171,
title V, Sec. 5308, May 13, 2002, 116 Stat. 345.)
References in Text
For definition of ``this chapter'', referred to in text, see note
set out under section 1921 of this title.
The Federal Property and Administrative Services Act of 1949,
referred to in subsec. (c)(4), is act June 30, 1949, ch. 288, 63 Stat.
377, as amended. Except for title III of the Act, which is classified
generally to subchapter IV (Sec. 251 et seq.) of chapter 4 of Title 41,
Public Contracts, the Act was repealed and reenacted by Pub. L. 107-217,
Secs. 1, 6(b), Aug. 21, 2002, 116 Stat. 1062, 1304, as chapters 1 to 11
of Title 40, Public Buildings, Property, and Works.
This Act, referred to in subsec. (e)(1)(A)(vi), refers to the
Agricultural Act of 1961, Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 294, as
amended. For classification of this Act to the Code, see Short Title
note set out under section 1911 of this title and Tables. However, the
reference was probably intended to be ``this title'' meaning the
Consolidated Farm and Rural Development Act, title III of Pub. L. 87-
128, as amended, which is classified principally to this chapter. For
classification of this title to the Code, see Short Title note set out
under section 1921 of this title and Tables.
Subsection (g)(6) of this section, referred to in subsec.
(e)(1)(D)(iii)(I), was redesignated subsection (g)(3) of this section by
Pub. L. 104-127, title VI, Sec. 639(4), Apr. 4, 1996, 110 Stat. 1097.
Amendments
2002--Subsec. (c)(1)(B)(i). Pub. L. 107-171, Sec. 5308(1)(A)(i),
substituted ``135 days'' for ``75 days''.
Subsec. (c)(1)(B)(iv). Pub. L. 107-171, Sec. 5308(1)(A)(ii), added
cl. (iv).
Subsec. (c)(1)(C). Pub. L. 107-171, Sec. 5308(1)(B), substituted
``135 days'' for ``75 days'' and ``135-day period'' for ``75-day
period''.
Subsec. (c)(2). Pub. L. 107-171, Sec. 5308(2), added par. (2) and
struck out heading and text of former par. (2). Text read as follows:
``(A) Previous lease.--In the case of real property acquired prior
to April 4, 1996, that the Secretary leased prior to April 4, 1996, not
later than 60 days after the lease expires, the Secretary shall offer to
sell the property in accordance with paragraph (1).
``(B) Previously in inventory.--In the case of real property
acquired prior to April 4, 1996, that the Secretary has not leased, not
later than 60 days after April 4, 1996, the Secretary shall offer to
sell the property in accordance with paragraph (1).''
1996--Subsec. (b). Pub. L. 104-127, Sec. 638(1), substituted
``subsections (c) and (e)'' for ``subsection (e)''.
Subsec. (c). Pub. L. 104-127, Sec. 638(2), added subsec. (c) and
struck out former subsec. (c) which authorized Secretary to determine
whether real property administered under this chapter was suitable for
disposition to persons eligible for assistance under provisions of any
law administered by Farmers Home Administration or Rural Development
Administration.
Subsec. (e)(1)(A). Pub. L. 104-127, Sec. 638(3)(A)(i)-(iii),
redesignated subpar. (D) as (A), in cl. (i), substituted ``(D)'' for
``(G)'' in introductory provisions, added subcl. (I) and struck out
former subcl. (I) which read as follows: ``the real property described
in subparagraph (A)(i) is located within an Indian reservation,'', in
subcl. (II), substituted a semicolon for ``, and'' at end, and struck
out subcl. (III) which read as follows: ``the period in which the right
to purchase or lease such real property provided in clauses (i) and (ii)
of subparagraph (A) has expired,'', in cl. (iii), substituted ``Not
later than 90 days after acquiring the property, the Secretary shall''
for ``The Secretary shall, within 90 days after the expiration of the
period for which the right to purchase or lease real property described
in clause (i) is provided in clauses (i) and (ii) of subparagraph
(A),'', and struck out former subpar. (A) which authorized the
Secretary, during 180-day period beginning on date of acquisition, or
during applicable period under State law, to allow borrower-owner to
purchase or lease property, if such borrower-owner had acted in good
faith with the Secretary.
Subsec. (e)(1)(B). Pub. L. 104-127, Sec. 638(3)(A)(i), (ii),
redesignated subpar. (E) as (B) and struck out former subpar. (B) which
read as follows: ``Any purchase or lease under subparagraph (A) shall be
on such terms and conditions as are established in regulations
promulgated by the Secretary.''
Subsec. (e)(1)(C). Pub. L. 104-127, Sec. 638(3)(A)(i), (ii),
redesignated subpar. (F) as (C) and struck out former subpar. (C) which
authorized Secretary to give preference in sale or lease, with option to
purchase, of property that had been foreclosed, purchased, redeemed, or
otherwise acquired by the Secretary to persons in specified order.
Subsec. (e)(1)(D). Pub. L. 104-127, Sec. 638(3)(A)(ii), (iv),
redesignated subpar. (G) as (D), in cl. (i), substituted ``(A)'' for
``(D)'' in concluding provisions, in cl. (iii)(I), substituted
``subparagraph (A)'' for ``subparagraphs (C)(i), (C)(ii), and (D)'', and
added cl. (v) and struck out former cl. (v) which read as follows: ``If
a borrower-owner does not voluntarily convey to the Secretary real
property described in clause (i), at least 30 days before a foreclosure
sale of the property, the Secretary shall provide written notice to the
Indian tribe that has jurisdiction over the reservation in which the
real property is located of--
``(I) the sale;
``(II) the fair market value of the property; and
``(III) the requirements of this subparagraph.''
Former subpar. (D) redesignated (A).
Subsec. (e)(1)(E) to (G). Pub. L. 104-127, Sec. 638(3)(A)(ii),
redesignated subpars. (E) to (G) as (B) to (D), respectively.
Subsec. (e)(3). Pub. L. 104-127, Sec. 638(3)(B), (C), (E),
redesignated par. (4) as (3), struck out ``(i)'' before ``The Secretary
may sell'', redesignated cl. (ii) of subpar. (A) as subpar. (B) and
substituted ``subparagraph (A)'' for ``clause (i)'', struck out former
subpar. (B) which read as follows: ``If two or more qualified operators
of not larger than family-size farms desire to purchase, or lease with
an option to purchase, such land, the appropriate county committee shall
randomly select the operator who may purchase such land, on such basis
as the Secretary may prescribe by regulation, in accordance with
subsection (c)(2)(B)(iii) of this section.'', and struck out former par.
(3) which directed the Secretary to issue regulations providing for
leasing of real property, or leasing such property with option to
purchase, on fair and equitable basis.
Subsec. (e)(4). Pub. L. 104-127, Sec. 638(3)(E), redesignated par.
(7) as (4). Former par. (4) redesignated (3).
Subsec. (e)(5). Pub. L. 104-127, Sec. 638(3)(D), (E), redesignated
par. (8) as (5) and struck out former par. (5) which read as follows:
``(5)(A) If the Secretary determines that farmland administered
under this chapter is not suitable for sale or lease to persons eligible
for a loan made or insured under subchapter I of this chapter because
such farmland is in a tract or tracts that the Secretary determines to
be larger than that necessary for such eligible persons, the Secretary
shall, to the greatest extent practicable, subdivide such land into
tracts suitable for sale under subsection (c) of this section. Such land
shall be subdivided into parcels of land the shape and size of which are
suitable for farming, the value of which shall not exceed the individual
loan limits as prescribed under section 1925 of this title.
``(B) The Secretary shall dispose of such subdivided farmland in
accordance with this subsection.''
Subsec. (e)(6). Pub. L. 104-127, Sec. 638(3)(D), (E), redesignated
par. (10) as (6) and struck out former par. (6) which read as follows:
``If suitable farmland is available for disposition under this
subsection, the Secretary shall--
``(A) publish an announcement of the availability of such
farmland in at least one newspaper that is widely circulated in the
county in which the farmland is located;
``(B) post an announcement of the availability of such farmland
in a prominent place in the local office of the Farmers Home
Administration that serves the county in which the farmland is
located; and
``(C) provide written notice reasonably calculated to inform the
immediate previous owner or immediate previous family-size farm
operator of such farmland, of the availability of such farmland.''
Subsec. (e)(7), (8). Pub. L. 104-127, Sec. 638(3)(E), redesignated
pars. (7) and (8) as (4) and (5), respectively.
Subsec. (e)(9). Pub. L. 104-127, Sec. 638(3)(D), struck out par. (9)
which read as follows: ``Denials of applications for or disputes over
terms and conditions of a lease or purchase agreement under this section
are appealable under section 1983b of this title.''
Subsec. (e)(10). Pub. L. 104-127, Sec. 638(3)(E), redesignated par.
(10) as (6).
Subsec. (g). Pub. L. 104-127, Sec. 639(1)(A), inserted heading.
Subsec. (g)(1). Pub. L. 104-127, Sec. 639(1), inserted heading,
substituted ``Subject to paragraph (2)'' for ``Subject to paragraphs (2)
through (5)'', and struck out ``, as determined by the Secretary in
accordance with title XII of the Food Security Act of 1985 (16 U.S.C.
3801 et seq.)'' after ``inventoried property''.
Subsec. (g)(2). Pub. L. 104-127, Sec. 639(2), added par. (2) and
struck out former par. (2) which read as follows: ``In establishing the
wetland conservation easements on land that is considered to be cropland
as of November 28, 1990, the Secretary shall avoid, to the extent
practicable, an adverse impact on the productivity of the croplands, as
provided in this subsection.''
Subsec. (g)(3). Pub. L. 104-127, Sec. 639(3), (4), redesignated par.
(6) as (3), inserted heading, and struck out former par. (3) which read
as follows: ``In order to avoid the adverse impact, the Secretary
shall--
``(A) not establish the wetland conservation easements with
respect to wetlands that were converted prior to December 23, 1985,
and that have been in cropland use, as determined by the Secretary,
in excess of 10 percent of the existing cropland available for
production of agricultural commodities on the particular parcel of
inventoried property;
``(B) not establish the wetland conservation easements with
respect to wetlands that have been frequently planted to
agricultural commodities and wetlands described in subparagraph (A),
in excess of 20 percent of the existing cropland available for
production of agricultural commodities on the particular parcel of
inventoried property;
``(C) ensure that the buffer area adjacent to the wetland is
generally not more than 100 feet in average width; and
``(D) ensure that access to other portions of the property for
farming and other uses is provided.''
Subsec. (g)(4). Pub. L. 104-127, Sec. 639(3), (5), redesignated par.
(7) as (4), inserted heading, and struck out former par. (4) which read
as follows: ``The wetland conservation easements shall be placed on
wetlands that have a history of haying and grazing, as determined by the
Secretary, except that in no case shall the quantity of the wetland
subject to the easements exceed 50 percent of the existing forage lands
on the parcel of inventoried property. All haying and grazing practices
on the wetlands (including the timing and intensity of haying and
grazing) shall conform to forage management standards designed to
protect wetlands.''
Subsec. (g)(5). Pub. L. 104-127, Sec. 639(3), struck out par. (5)
which read as follows: ``If, despite the limitations contained in
paragraph (3), wetland conservation easements established under
paragraph (1) would prevent a particular parcel of inventoried property
that is to be sold or leased to a borrower described in clause (i),
(ii), or (iii) of subsection (e)(1)(C) of this section, or to a borrower
who is a beginning farmer or rancher, from being a marketable
agricultural production unit that is comparable to the parcel as
acquired, the Secretary may--
``(A) establish wetland conservation easements on wetland that
was converted prior to December 23, 1985, in a quantity that is less
than 10 percent of the existing croplands available for production
of agricultural commodities on the particular parcel; and
``(B) if the reduction provided in subparagraph (A) is not
applicable, or is not sufficient to ensure that the particular
parcel would be a marketable agricultural production unit, amend the
wetland conservation easements established on the wetlands that have
been frequently planted to agricultural commodities to permit the
production of agricultural commodities (consistent with title XII of
the Food Security Act of 1985) on the wetlands, to the extent
necessary to maintain the parcel as a marketable agricultural
production unit.''
Subsec. (g)(6), (7). Pub. L. 104-127, Sec. 639(4), (5), redesignated
pars. (6) and (7) as (3) and (4), respectively.
Subsec. (g)(8). Pub. L. 104-127, Sec. 639(3), struck out par. (8)
which read as follows: ``Notwithstanding the limitations described under
paragraphs (3) and (4), the limitations may be voluntarily, knowingly
waived by any person with respect to real property described in
paragraph (3) or (4).''
1992--Subsec. (c)(1). Pub. L. 102-554, Sec. 16, in fourth sentence,
inserted ``(A)'' after ``shall be'' and ``or (B) leased to persons
eligible for assistance under the provisions of any law administered by
the Farmers Home Administration or the Rural Development Administration
under an annual lease or a lease with an option to purchase, with a
preference for sale'' before period at end.
Subsec. (e)(1)(A)(i). Pub. L. 102-552, which, in amending directory
language of Pub. L. 102-237, Sec. 501(f)(1), directed the substitution
of ``the borrower-owner (as defined in subparagraph (F))'' for
``borrower-owner (as defined in subparagraph (F))'', was executed by
making the substitution in text which did not contain a closing
parenthesis after ``(F)'', to reflect the probable intent of Congress.
See 1991 Amendment note below.
Subsec. (e)(1)(D)(i). Pub. L. 102-554, Sec. 17(1), substituted
``Except as provided in subparagraph (G), if'' for ``If''.
Subsec. (e)(1)(G). Pub. L. 102-554, Sec. 17(2), added subpar. (G).
1991--Subsec. (e)(1)(A)(i). Pub. L. 102-237, Sec. 501(f)(1), as
amended by Pub. L. 102-552, substituted ``the borrower-owner (as defined
in subparagraph (F))'' for ``the borrower from whom the Secretary
acquired real farm or ranch property (including the principal residence
of the borrower) used to secure any loan made to the borrower under this
chapter (hereinafter referred to in this paragraph as the `borrower-
owner')''. See 1992 Amendment note above.
Subsec. (e)(1)(F). Pub. L. 102-237, Sec. 501(f)(2), added subpar.
(F).
1990--Subsec. (a). Pub. L. 101-624, Secs. 1813(a), 2303(c)(1),
inserted ``or the Rural Development Administration'' after ``Farmers
Home Administration'' and substituted ``12 months from the date first
published under paragraph (2)(D)'' for ``three years from the date of
acquisition''.
Subsec. (c)(1). Pub. L. 101-624, Sec. 2303(c)(2), inserted ``or the
Rural Development Administration'' after ``Farmers Home
Administration''.
Subsec. (c)(2)(A), (B). Pub. L. 101-624, Sec. 1813(e)(1), added
subpar. (A) and subpar. (B) introductory provisions, redesignated former
subpars. (A) through (D) as cls. (i) through (iv), respectively, of
subpar. (B), and struck out former introductory provisions which read as
follows: ``Notwithstanding any other provision of law, the Secretary
shall sell suitable farmland administered under this subchapter to
operators (as of the time immediately after such contract for sale or
lease is entered into) of not larger than family sized farms, as
determined by the county committee. In selling such land, the county
committee shall--''.
Subsec. (c)(2)(B)(ii). Pub. L. 101-624, Sec. 1813(g)(1), amended cl.
(ii) generally. Prior to amendment, cl. (ii) read as follows: ``offer
suitable land at a price not greater than that which reflects the
appraised market value of such land;''.
Subsec. (c)(2)(B)(iii). Pub. L. 101-624, Sec. 1813(b)(1), inserted
before semicolon ``, except that if the committee determines that two or
more applicants meet the loan eligibility criteria, the committee shall
select between the qualified applicants on a random basis''.
Subsec. (c)(2)(B)(iv). Pub. L. 101-624, Sec. 2388(g), substituted
``cause'' for ``caused''.
Subsec. (e)(1)(A)(i). Pub. L. 101-624, Sec. 1813(c), substituted
``real farm or ranch property (including the principal residence of the
borrower)'' for ``real property''.
Pub. L. 101-624, Sec. 1816(e)(1), inserted before period at end ``,
if such borrower-owner has acted in good faith with the Secretary, as
defined in regulations issued by the Secretary, in connection with such
loan''.
Subsec. (e)(1)(A)(iv). Pub. L. 101-624, Sec. 1813(d), added cl.
(iv).
Subsec. (e)(1)(C)(i). Pub. L. 101-624, Sec. 1816(e)(2), inserted
before period at end ``, if such borrower-owner has acted in good faith
with the Secretary, as defined in regulations issued by the Secretary,
in connection with the loan of such borrower-owner for which such
property served as security''.
Subsec. (e)(1)(C)(iv), (v). Pub. L. 101-624, Sec. 1813(e)(2), added
cl. (iv) and redesignated former cl. (iv) as (v).
Subsec. (e)(1)(D)(x). Pub. L. 101-624, Sec. 1813(f), added cl. (x).
Subsec. (e)(4)(B). Pub. L. 101-624, Sec. 1813(g)(2), redesignated
subpar. (C) as (B) and struck out former subpar. (B) which read as
follows: ``The Secretary shall offer such land for sale to operators of
not larger than family-size farms at a price that reflects the average
annual income that may be reasonably anticipated to be generated from
farming such land.''
Subsec. (e)(4)(C). Pub. L. 101-624, Sec. 1813(g)(2), redesignated
former subpar. (C) as (B).
Pub. L. 101-624, Sec. 1813(b)(2), substituted ``shall randomly'' for
``shall, by majority vote,'' and inserted ``, in accordance with
subsection (c)(2)(B)(iii) of this section''.
Subsec. (g). Pub. L. 101-624, Sec. 1813(h)(1), added subsec. (g).
1988--Subsec. (c). Pub. L. 100-233, Sec. 610(a), designated existing
provisions as par. (1), inserted provisions requiring the County
Committee to classify or reclassify real property that is farmland, as
being suitable for farming operation for such disposition unless
property cannot be used to meet any of the purposes of section 1923 of
this title, and added par. (2).
Subsec. (e)(1). Pub. L. 100-233, Sec. 610(b)(1), added par. (1) and
struck out former par. (1) which read as follows: ``The Secretary shall
to the extent practicable sell or lease farmland administered under this
chapter in the following order of priority:
``(A) Sale of such farmland to operators (as of the time
immediately before such sale) of not larger than family-size farms.
``(B) Lease of such farmland to operators (as of the time
immediately before such lease is entered into) of not larger than
family-size farms.''
Subsec. (e)(3). Pub. L. 100-233, Sec. 610(b)(2), redesignated
subpars. (B) to (D) as (A) to (C), respectively, in subpar. (B)
substituted ``Secretary shall determine if the lessee'' for ``Secretary
shall give special consideration to a previous owner or operator of such
land if such owner or operator'', added subpar. (D), and struck out
former subpar. (A) which read as follows: ``The Secretary shall consider
granting, and may grant, to an operator of not larger than a family-size
farm, in conjunction with paragraph (3), a lease with an option to
purchase farmland administered under this chapter.''
Subsec. (e)(5)(A). Pub. L. 100-233, Sec. 610(b)(3), amended subpar.
(A) generally. Prior to amendment, subpar. (A) read as follows: ``If the
Secretary determines that farmland administered under this chapter is
not suitable for sale or lease to an operator of not larger than a
family-size farm because such farmland is in a tract or tracts that the
Secretary determines to be larger than that necessary for family-size
farms, the Secretary shall subdivide such land into tracts suitable for
such operator.''
Subsec. (e)(6)(C). Pub. L. 100-233, Sec. 610(b)(4), added subpar.
(C).
Subsec. (e)(9), (10). Pub. L. 100-233, Sec. 610(b)(5), added pars.
(9) and (10).
Subsec. (f). Pub. L. 100-233, Sec. 611, amended subsec. (f)
generally. Prior to amendment, subsec. (f) read as follows:
``(1) As used in this subsection, the term `normal income security'
has the same meaning given such term in section 1962.17(b) of title 7,
Code of Federal Regulations (as of January 1, 1985).
``(2) Until such time as the Secretary accelerates a loan made or
insured under this chapter, the Secretary shall release from the normal
income security provided for such loan an amount sufficient to pay the
essential household and farm operating expenses of the borrower, as
determined by the Secretary.''
1985--Subsec. (b). Pub. L. 99-198, Sec. 1314(a)(1), substituted
``Except as provided in subsection (e) of this section, real property''
for ``Real property''.
Subsec. (c). Pub. L. 99-198, Sec. 1314(a)(2), substituted ``Except
as provided in subsection (e) of this section, the Secretary'' for ``The
Secretary'' and inserted sentence at end providing that notwithstanding
the preceding sentence, the Secretary may for conservation purposes
grant or sell an easement, restriction, development rights, or the
equivalent thereof, to a unit of local or State government or a private
nonprofit organization separately from the underlying fee or sum of all
other rights possessed by the United States.
Pub. L. 99-198, Sec. 1318(b)(1), which directed insertion of ``,
other than easements acquired under section 1997 of this title'' at end
of last sentence, was executed to fifth sentence of subsec. (c), and not
to sixth and last sentence as added by section 1314(a)(2)(B) of Pub. L.
99-198, to reflect the probable intent of Congress.
Subsec. (e). Pub. L. 99-198, Sec. 1314(a)(3), added subsec. (e).
Subsec. (f). Pub. L. 99-198, Sec. 1315, added subsec. (f).
1972--Subsec. (c). Pub. L. 92-419 substituted ``the provisions of
any law administered by the Farmers Home Administration'' for
``subchapter I of this chapter'' in first sentence and ``such
provisions'' for ``the provisions of subchapter I of this chapter'' in
second sentence, struck out from fourth sentence initial minimum 20 per
centum downpayment requirement and provision for payment of remainder in
not more than five annual installments, and provided in such fourth
sentence for interest rates and terms not more favorable than legally
permissible for eligible borrowers.
Effective Date of 1996 Amendment
Amendment by section 638 of Pub. L. 104-127 effective Apr. 4, 1996,
but not applicable with respect to complete application to acquire
inventory property submitted prior to Apr. 4, 1996, and amendment by
section 639 of Pub. L. 104-127 effective Apr. 4, 1996, see section
663(a), (c) of Pub. L. 104-127, set out as a note under section 1922 of
this title.
Effective Date of 1992 Amendment
Section 516(h)(2) of Pub. L. 102-552 provided that: ``The amendments
made by paragraph (1) of this subsection [amending section 501(f) of
Pub. L. 102-237, see 1992 Amendment note above] shall take effect
immediately after section 501(f) of the Food, Agriculture, Conservation,
and Trade Act of 1990 [probably should be Food, Agriculture,
Conservation, and Trade Act Amendments of 1991 [Pub. L. 102-237]] took
effect.''
Effective Date of 1990 Amendment
Amendment by section 1816 of Pub. L. 101-624 applicable to new
applications submitted under section 2001 of this title on or after Nov.
28, 1990, see section 1861 of Pub. L. 101-624, set out as a note under
section 2001 of this title.
Effective Date of 1985 Amendment
Section 1314(b) of Pub. L. 99-198 provided that: ``The Secretary of
Agriculture shall implement the amendments made by this section
[amending this section] not later than 90 days after the date of
enactment of this Act [Dec. 23, 1985].''
Completion of Sales of Farmers Home Administration Inventory Farms
Pub. L. 102-142, title VII, Sec. 740, Oct. 28, 1991, 105 Stat. 915,
provided that: ``Hereafter, the Secretary shall complete the sales of
Farmers Home Administration inventory farms, in accordance with the law
and regulations in effect before November 28, 1990, in situations in
which a County Committee, acting pursuant to section 335 of the
Consolidated Farm and Rural Development Act [7 U.S.C. 1985], had made
its initial selection of a buyer before November 28, 1990. Such sales
shall be completed as soon as the selection decision is administratively
final and all terms and conditions have been agreed to. In carrying out
sales of inventory property, priority shall be given to the former owner
and members of the immediate family.''
Farm Ownership Outreach Program to Socially Disadvantaged Individuals
Section 623 of Pub. L. 100-233, as amended by Pub. L. 101-624, title
XVIII, Sec. 1852, Nov. 28, 1990, 104 Stat. 3837, provided that:
``(a) In General.--The Secretary of Agriculture, in coordination
with the limited resource farmers' initiative in the office of the
Director of the Office of Advocacy and Enterprise, shall establish a
farm ownership outreach program for persons who are members of any group
with respect to which an individual may be identified as a socially
disadvantaged individual under section 8(a)(5) of the Small Business Act
(15 U.S.C. 637(a)(5)) to encourage the acquisition of inventory farmland
of the Farmers Home Administration by--
``(1) informing persons eligible for assistance under any other
provision of this Act [see Short Title of 1988 Amendment note set
out under section 2001 of Title 12, Banks and Banking] of--
``(A) the possiblity [sic] of acquiring such inventory
farmland; and
``(B) various farm ownership loan programs; and
``(2) providing technical assistance to such persons in the
acquisition of such inventory farmland.
``(b) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $2,500,000 for each of the fiscal
years 1991 through 1995.''
Section Referred to in Other Sections
This section is referred to in sections 1471, 1929a, 1991, 2002 of
this title.
