§ 1999. — Interest rate reduction program.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC1999]
TITLE 7--AGRICULTURE
CHAPTER 50--AGRICULTURAL CREDIT
SUBCHAPTER IV--ADMINISTRATIVE PROVISIONS
Sec. 1999. Interest rate reduction program
(a) Establishment of program
The Secretary shall establish and carry out in accordance with this
section an interest rate reduction program for loans guaranteed under
this chapter.
(b) Contracts with lenders
Under such program, the Secretary shall enter into a contract with,
and make payments to, a legally organized institution to reduce during
the term of such contract the interest rate paid by a borrower on a
guaranteed loan made by such institution if--
(1) the borrower--
(A) is unable to obtain sufficient credit elsewhere to
finance the actual needs of the borrower at reasonable rates and
terms, taking into consideration private and cooperative rates
and terms for a loan for a similar purpose and period of time in
the community in or near which the borrower resides;
(B) is otherwise unable to make payments on such loan in a
timely manner; and
(C) has a total estimated cash income during the 24-month
period beginning on the date such contract is entered into
(including all farm and nonfarm income) that will equal or
exceed the total estimated cash expenses to be incurred by the
borrower during such period (including all farm and nonfarm
expenses); and
(2) the lender reduces during the term of such contract the
annual rate of interest payable on such loan by a minimum percentage
specified in such contract.
(c) Payments to lenders
In return for a contract entered into by a lender under subsection
(b) of this section for the reduction of the interest rate paid on a
loan, the Secretary shall make payments to the lender in an amount equal
to not more than 100 percent of the cost of reducing the annual rate of
interest payable on such loan, except that such payments may not exceed
the cost of reducing such rate by more than 4 percent.
(d) Duration of contracts
The term of a contract entered into under this section to reduce the
interest rate on a guaranteed loan may not exceed the outstanding term
of such loan.
(e) Agricultural Credit Insurance Fund use limitation
(1) Notwithstanding any other provision of this chapter, the
Agricultural Credit Insurance Fund established under section 1929 of
this title may be used by the Secretary to carry out this section.
(2) Maximum amount of funds.--
(A) In general.--The total amount of funds used by the Secretary
to carry out this section for a fiscal year shall not exceed
$750,000,000.
(B) Beginning farmers and ranchers.--
(i) In general.--The Secretary shall reserve not less than
15 percent of the funds used by the Secretary under subparagraph
(A) to make payments for guaranteed loans made to beginning
farmers and ranchers.
(ii) Duration of reservation of funds.--Funds reserved for
beginning farmers or ranchers under clause (i) for a fiscal year
shall be reserved only until March 1 of the fiscal year.
(f) List of lender participants in guaranteed loan program
The Secretary shall make available to farmers, on request, a list of
lenders in the area that participate in guaranteed farm loan programs
and other lenders in the area that express a desire to participate in
such programs and that request inclusion in the list.
(g) Foreclosure action provision in farm loan guarantees
Notwithstanding any other provision of law, each contract of
guarantee on a farm loan entered into under this chapter after January
6, 1988, shall contain a condition that the lender of the guaranteed
loan may not initiate foreclosure action on the loan until 60 days after
a determination is made with respect to the eligibility of the borrower
thereof to participate in the program under this section.
(Pub. L. 87-128, title III, Sec. 351, as added Pub. L. 99-198, title
XIII, Sec. 1320, Dec. 23, 1985, 99 Stat. 1532; amended Pub. L. 100-233,
title VI, Sec. 613(b), (c), Jan. 6, 1988, 101 Stat. 1674; Pub. L. 101-
508, title I, Sec. 1202(b)(1), (c), Nov. 5, 1990, 104 Stat. 1388-10,
1388-11; Pub. L. 104-105, title II, Sec. 220, Feb. 10, 1996, 110 Stat.
184; Pub. L. 104-127, title VI, Sec. 643(a), Apr. 4, 1996, 110 Stat.
1102; Pub. L. 107-171, title V, Sec. 5313, May 13, 2002, 116 Stat. 347.)
References in Text
For definition of ``this chapter'', referred to in subsecs. (a)(1),
(e)(1), and (g), see note set out under section 1921 of this title.
Amendments
2002--Subsec. (a). Pub. L. 107-171, Sec. 5313(1), struck out par.
(1) designation and heading and struck out heading and text of par. (2).
Text read as follows: ``The authority provided by this subsection shall
terminate on September 30, 2002.''
Subsec. (e)(2). Pub. L. 107-171, Sec. 5313(2), added par. (2) and
struck out former par. (2) which read as follows: ``The total amount of
funds used by the Secretary to carry out this section may not exceed
$490,000,000.''
1996--Subsec. (a). Pub. L. 104-105 inserted heading, designated
existing provisions as par. (1) and inserted heading, and added par.
(2).
Subsec. (f). Pub. L. 104-127, Sec. 643(a)(1), substituted ``The
Secretary'' for ``Each Farmers Home Administration county supervisor''
and ``list of lenders'' for ``list of approved lenders'' and struck out
``the Farmers Home Administration'' before ``guaranteed farm loan
programs''.
Subsec. (h). Pub. L. 104-127, Sec. 643(a)(2), struck out subsec. (h)
which established a demonstration project during 4-year period beginning
Jan. 6, 1988, for purchase of Farm Credit System land.
1990--Subsec. (c). Pub. L. 101-508, Sec. 1202(b)(1)(A), substituted
``100 percent'' for ``50 percent'' and ``4 percent'' for ``2 percent''.
Subsec. (d). Pub. L. 101-508, Sec. 1202(b)(1)(B), struck out ``, or
3 years, whichever is less'' after ``term of such loan''.
Subsec. (h)(1). Pub. L. 101-508, Sec. 1202(c), substituted ``4-
year'' for ``3-year''.
1988--Subsec. (b)(1)(C). Pub. L. 100-233, Sec. 613(b)(1),
substituted ``24-month'' for ``12-month''.
Subsecs. (f), (g). Pub. L. 100-233, Sec. 613(b)(2), added subsecs.
(f) and (g).
Subsec. (h). Pub. L. 100-233, Sec. 613(c), added subsec. (h).
Effective Date of 1990 Amendment
Amendment by Pub. L. 101-508 effective Nov. 29, 1990, see section
1301 of Pub. L. 101-508, set out as a note under section 511r of this
title.
Effective and Termination Dates
That part of section 1320 of Pub. L. 99-198, as amended by Pub. L.
100-233, title VI, Sec. 613(a), Jan. 6, 1988, 101 Stat. 1674; Pub. L.
101-508, title I, Sec. 1202(b)(2), Nov. 5, 1990, 104 Stat. 1388-11,
which provided that this section was effective only for the period
beginning Dec. 23, 1985, and ending Sept. 30, 1995, was repealed by Pub.
L. 104-127, title VI, Sec. 643(b), Apr. 4, 1996, 110 Stat. 1103.
Section Referred to in Other Sections
This section is referred to in section 1983a of this title.
