§ 4201. — General provisions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC4201]
TITLE 7--AGRICULTURE
CHAPTER 73--FARMLAND PROTECTION POLICY
Sec. 4201. General provisions
(a) Congressional statement of findings
Congress finds that--
(1) the Nation's farmland is a unique natural resource and
provides food and fiber necessary for the continued welfare of the
people of the United States;
(2) each year, a large amount of the Nation's farmland is
irrevocably converted from actual or potential agricultural use to
nonagricultural use;
(3) continued decrease in the Nation's farmland base may
threaten the ability of the United States to produce food and fiber
in sufficient quantities to meet domestic needs and the demands of
our export markets;
(4) the extensive use of farmland for nonagricultural purposes
undermines the economic base of many rural areas;
(5) Federal actions, in many cases, result in the conversion of
farmland to nonagricultural uses where alternative actions would be
preferred;
(6) the Department of Agriculture is the agency primarily
responsible for the implementation of Federal policy with respect to
United States farmland, assuring the maintenance of the agricultural
production capacity of the United States, and has the personnel and
other resources needed to implement national farmland protection
policy; and
(7) the Department of Agriculture and other Federal agencies
should take steps to assure that the actions of the Federal
Government do not cause United States farmland to be irreversibly
converted to nonagricultural uses in cases in which other national
interests do not override the importance of the protection of
farmland nor otherwise outweigh the benefits of maintaining farmland
resources.
(b) Statement of purpose
The purpose of this chapter is to minimize the extent to which
Federal programs contribute to the unnecessary and irreversible
conversion of farmland to nonagricultural uses, and to assure that
Federal programs are administered in a manner that, to the extent
practicable, will be compatible with State, unit of local government,
and private programs and policies to protect farmland.
(c) Definitions
As used in this chapter--
(1) the term ``farmland'' includes all land defined as follows:
(A) prime farmland is land that has the best combination of
physical and chemical characteristics for producing food, feed,
fiber, forage, oilseed, and other agricultural crops with
minimum inputs of fuel, fertilizer, pesticides, and labor, and
without intolerable soil erosion, as determined by the
Secretary. Prime farmland includes land that possesses the above
characteristics but is being used currently to produce livestock
and timber. It does not include land already in or committed to
urban development or water storage;
(B) unique farmland is land other than prime farmland that
is used for production of specific high-value food and fiber
crops, as determined by the Secretary. It has the special
combination of soil quality, location, growing season, and
moisture supply needed to economically produce sustained high
quality or high yields of specific crops when treated and
managed according to acceptable farming methods. Examples of
such crops include citrus, tree nuts, olives, cranberries,
fruits, and vegetables; and
(C) farmland, other than prime or unique farmland, that is
of statewide or local importance for the production of food,
feed, fiber, forage, or oilseed crops, as determined by the
appropriate State or unit of local government agency or
agencies, and that the Secretary determines should be considered
as farmland for the purposes of this chapter;
(2) the term ``State'' means any of the fifty States, the
District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, the Trust Territory of
the Pacific Islands, or any territory or possession of the United
States;
(3) the term ``unit of local government'' means the government
of a county, municipality, town, township, village, or other unit of
general government below the State level, or a combination of units
of local government acting through an areawide agency under State
law or an agreement for the formulation of regional development
policies and plans;
(4) the term ``Federal program'' means those activities or
responsibilities of a department, agency, independent commission, or
other unit of the Federal Government that involve (A) undertaking,
financing, or assisting construction or improvement projects; or (B)
acquiring, managing, or disposing of Federal lands and facilities.
The term ``Federal program'' does not include construction or
improvement projects that on the effective date of this chapter are
beyond the planning stage and are in either the active design or
construction state; and
(5) the term ``Secretary'' means the Secretary of Agriculture.
(Pub. L. 97-98, title XV, Sec. 1540, Dec. 22, 1981, 95 Stat. 1341.)
References in Text
The effective date of this chapter, referred to in subsec. (c)(4),
is six months after Dec. 22, 1981, see Effective Date note below.
Effective Date
Section 1549 of Pub. L. 97-98 provided that: ``The provisions of
this subtitle [subtitle I (Secs. 1539-1549) of title XV of Pub. L. 97-
98, enacting this chapter] shall become effective six months after the
date of enactment of this Act [Dec. 22, 1981].''
Short Title
Section 1539 of Pub. L. 97-98 provided that: ``This subtitle
[subtitle I (Secs. 1539-1549) of title XV of Pub. L. 97-98, enacting
this chapter] may be cited as the `Farmland Protection Policy Act'.''
Termination of Trust Territory of the Pacific Islands
For termination of Trust Territory of the Pacific Islands, see note
set out preceding section 1681 of Title 48, Territories and Insular
Possessions.
Farmland Protection
Pub. L. 101-624, title XIV, ch. 2, Secs. 1465-1470B, Nov. 28, 1990,
104 Stat. 3616-3619, as amended by Pub. L. 102-237, title II,
Secs. 201(b), (c), 203, Dec. 13, 1991, 105 Stat. 1847, 1848, provided
that:
``SEC. 1465. SHORT TITLE, PURPOSE, AND DEFINITION.
``(a) Short Title.--This chapter may be cited as the `Farms for the
Future Act of 1990'.
``(b) Purpose.--It is the purpose of this chapter to promote a
national farmland protection effort to preserve our vital farmland
resources for future generations.
``(c) Definitions.--As used in this chapter:
``(1) Allowable interest rate.--The term `allowable interest
rate' refers to the interest rate that the State trust fund pays on
each eligible loan (including the interest paid by the State trust
fund, State, or State agency on bonds or other obligations described
in paragraph (2)).
``(2) Eligible loan.--The term `eligible loan' means each loan
made by lending institutions to each State trust fund, or to the
State acting in conjunction with the State trust fund, to further
the purposes of this chapter, and the proceeds from any issuance of
obligations, or other bonded indebtedness, of any eligible State,
the State trust fund, or any agency of an eligible State, except
that no eligible loan shall bear an interest rate in excess of 10
percent per year.
``(3) Eligible state.--The term `eligible State' means--
``(A) the State of Vermont; and
``(B) at the option of the Secretary and subject to
appropriations, any State that--
``(i) operates or administers a land preservation fund
that invests funds in the protection or preservation of
farmland for agricultural purposes; and
``(ii) works in coordination with the governing bodies
of counties, towns, townships, villages, or other units of
general government below the State level, or with private
nonprofit or public organizations, to assist in the
preservation of farmland for agricultural purposes.
``(4) Lending institution.--The term `lending institution' means
any Federal or State chartered bank, savings and loan association,
cooperative lending agency, other legally organized lending agency,
State government or agency, political subdivision of a State, or any
nonprofit conservation organization.
``(5) Program.--The term `program' means the farmland
preservation program established under this chapter to be known as
the `Agricultural Resource Conservation Demonstration Program'.
``(6) Secretary.--The term `Secretary' means the Secretary of
Agriculture.
``(7) State.--The term `State' means any State of the United
States, the Commonwealth of Puerto Rico, and the Virgin Islands of
the United States.
``(8) State trust fund.--The term `State trust fund' means any
trust fund or an account established by an eligible State, or other
public instrumentality of the eligible State, where such eligible
State is approved to participate by the Secretary in the program
under application procedures set forth in section 1466(j) or 1468.
``SEC. 1466. ESTABLISHMENT OF PROGRAM.
``(a) In General.--
``(1) Purpose.--The Secretary shall establish and implement a
program, to be known as the `Agricultural Resource Conservation
Demonstration Program', to provide Federal guarantees and interest
assistance for eligible loans described in section 1465(c)(2) made
to, or issued for the benefit of, State trust funds.
``(2) Assistance.--Under the program the Secretary shall
guarantee for a period of 10 years the timely payment of the
principal amount and interest due on each eligible loan described in
section 1465(c)(2) made to, or issued for the benefit of, State
trust funds and shall for each such 10-year period subsidize the
interest on such eligible loans at the allowable interest rate for
the first 5 years after the loan is made, or issued, and at no less
than 3 percentage points for the second 5 years under procedures
described in subsection (b).
``(b) Mandatory Assistance to Each State Trust Fund.--The Secretary
shall--
``(1) fully guarantee with the full faith and credit of the
United States each eligible loan described in section 1465(c)(2)
made to, or issued for the benefit of, each State trust fund under
procedures established by the Secretary;
``(2) annually pay to each State trust fund an amount calculated
by applying the allowable interest rate to the amount of each loan
described in section 1465(c)(2) made to, or issued for the benefit
of, each State trust fund during each of the first 5 years after the
date on which each such loan was made or issued; and
``(3) annually pay to each State trust fund, for each year
during the second 5-year period after each such eligible loan is
made to, or issued for the benefit of, the State trust fund, an
amount calculated by applying the interest rate difference, between
the rate of interest charged to borrowers of direct loans as
described in section 316(a)(2) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1946(a)(2)) and the allowable interest
rate, to the amount of each such loan made to, or issued for the
benefit of, the State trust fund, as determined under procedures
established by the Secretary.
``(c) Funding.--
``(1) Issuance of stock.--The Secretary of Agriculture shall
make and issue stock, in the same manner as notes are issued under
section 309(c) or 309A(d) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1929(c) or 1929a(d)), to the Secretary of
the Treasury for the purpose of obtaining funds from the Secretary
of the Treasury that are necessary for discharging the obligations
of the Secretary of Agriculture under this chapter. The stock shall
not pay dividends and shall not be redeemable.
``(2) Purchase of stock.--The Secretary of the Treasury shall
provide the funding necessary to implement this chapter. The
Secretary of the Treasury shall purchase any stock of the Secretary
of Agriculture issued to implement this chapter. The Secretary of
the Treasury shall use as a public debt transaction the proceeds
from the sale of any securities issued under chapter 31 of title 31,
United States Code. The purposes for which the securities may be
issued under such chapter are extended to include the raising of
funds to purchase stock issued by the Secretary of Agriculture to
implement this chapter with respect to each eligible State. The
Secretary of Agriculture shall make and issue such stock as is
necessary to fund this chapter to the Secretary of the Treasury who
shall promptly purchase the stock (within 60 days) being offered by
the Secretary of Agriculture.
``(3) Commodity credit corporation.--If the Secretary of
Agriculture fails to issue stock as required under this chapter, or
if funding is otherwise not provided as set forth in this chapter,
for the eligible State described in section 1465(c)(3)(A),
notwithstanding any other provision of law, the Secretary of
Agriculture shall use the funds, services and facilities of the
Commodity Credit Corporation to carry out the requirements of this
chapter. The procedure described in paragraph (2) shall be used to
reimburse the Corporation for funds expended to carry out this
paragraph.
``(d) Required Purchases of Stock.--The Secretary shall promptly
notify the Secretary of the Treasury, in writing, each time an
application of an eligible State is approved by the Secretary under this
chapter. The Secretary of the Treasury shall promptly purchase stock
(within 60 days) offered by the Secretary under subsection (c) and the
Secretary of Agriculture shall deposit the proceeds from each such sale
of stock in accounts created to administer the program.
``(e) Entitlements.--The Secretary is entitled to receive funds, and
shall receive funds, from the Secretary of the Treasury in an amount
equal to the total par-value of the stock issued to the Secretary of the
Treasury. Each State trust fund is entitled to receive, and the
Secretary of Agriculture shall promptly pay to each such trust fund,
amounts calculated under procedures described in subsection (b).
``(f) Regulations.--Except regarding the eligible State described in
section 1465(c)(3)(A), the Secretary shall promulgate proposed and final
regulations, under the prior public comment provisions of section 553 of
title 5, United States Code, setting forth--
``(1) the application procedures for eligible States;
``(2) the factors to be used in approving applicants;
``(3) procedures for the prompt payment of the obligations of
the Secretary under subsection (b);
``(4) recordkeeping requirements for approved State trust funds;
``(5) requirements to prevent program abuse and procedures to
recover improperly obtained funds;
``(6) rules permitting State trust funds to act as revolving
funds or to otherwise accumulate additional capital, based on
investments, to be subsequently used to promote the purposes of this
chapter; and
``(7) any other rules necessary and appropriate to carry out the
program.
``(g) Duration of Program.--The program established under this
chapter shall expire on September 30, 1996, except that any financial
obligations of the Secretary shall continue to be met as required by
this chapter.
``(h) Eligible Uses for Guaranteed Loan Funds.--
``(1) In general.--Funds from eligible loans (including proceeds
from the sale of bonds or other obligations described in section
1465(c)(2)) guaranteed under this chapter, and any earnings of the
State trust funds, may be used--
``(A) to purchase development rights, conservation easements
or other types of easements, or to purchase agricultural land in
fee simple or some lesser estate in land;
``(B) to pay all reasonable and customary costs including
appraisal, survey and engineering fees, and legal expenses;
``(C) to pay the costs of enforcing easements or land use
restrictions;
``(D) to cover the costs of complying with any regulations
issued by the Secretary under this program and the costs of
implementing the farmland plan of operation, except that the
guaranteed loan proceeds shall not be used to pay overhead
expenses of the State trust fund (rent, utilities, salaries,
wages, insurance premiums, and the like); and
``(E) to generate earnings (including through investments
not exceeding 10 years in duration for each eligible loan), to
be used for future farmland preservation efforts, through
investments in direct obligations of the United States or
obligations guaranteed by the United States or an agency thereof
or by depositing funds in any member bank of the Federal Reserve
System or any federally insured State nonmember bank.
``(2) Collateral for loans.--To the extent consistent with
relevant banking laws and practices, the investments or deposits
described in paragraph (1)(E) may serve as collateral for loans made
to, or on behalf of, the State trust fund.
``(i) State Use of Guaranteed Loan Funds.--The Secretary may issue
regulations or procedures requiring each State trust fund to report to
the Secretary regarding the uses of the eligible loans (described in
section 1465(c)(2)) guaranteed by the Secretary and the Secretary may
monitor the uses of the funds to ensure that the loans are used for
purposes related to this chapter. Neither the Secretary or [nor] the
lending institution shall have the power to require approval of each
specific use of the loans guaranteed by the Secretary, the specific
terms of each use of the loan funds, or the specific provisions of each
purchase or investment made with loans guaranteed by the Secretary. The
Secretary may require that each State trust fund provide a State
farmland preservation plan of operation to the Secretary setting forth
the plans for administering the program in the State and may require
each State trust fund to periodically report to the Secretary on the
purchases of interests in farmland and on other specific uses of the
funds.
``(j) Special Rules for the Pilot Project State.--Notwithstanding
any other provisions of this chapter, the following special rules shall
apply to the eligible State described in section 1465(c)(3)(A):
``(1) Provision of loan guarantee and interest assistance
agreement.--Within 30 days of the date any State trust fund in the
eligible State receives a commitment for each eligible loan from a
lending institution, the Secretary shall provide the lending
institution with the loan guarantee and the interest assistance
agreement so that the lending institution may disburse the full
amount of the loan proceeds to the State trust fund on the date of
loan closing to carry out this program. After the loan closing, the
lending institution shall have no obligation to monitor or approve
the use of loan proceeds by the State trust fund.
``(2) Approval of application.--The Secretary shall annually
approve the completed application from the eligible State within 30
days after receipt if the application sets forth the general goals
and policies of the State trust fund. The Secretary shall provide
the Federal assistance required under this chapter beginning on the
date the application or plan is approved.
``(3) Amount of guarantees.--The Secretary shall calculate the
total amount of guarantees to be provided for fiscal year 1992 in an
amount equal to double the sum of--
``(A) the amount that was made available in fiscal year 1991
to the State trust fund (the Vermont Conservation and Housing
Board regardless of whether the fund had been approved by the
Secretary in fiscal year 1991), by the State described in
section 1465(c)(3)(A), political subdivisions thereof,
charitable organizations, private persons, or any other entity,
in addition to the proceeds from the sale of obligations of the
State related to the purposes of the State trust fund and the
fair market value of donations of interests in land to the State
trust fund; and
``(B) the matching contribution calculated under section
1468(c) for fiscal year 1992 for the State.
``(k) Miscellaneous Provisions.--
``(1) Operation.--Each State trust fund may operate through
nonprofit corporations, municipalities, or other political
subdivisions of States in carrying out the purposes of the program
established in this chapter.
``(2) Earnings.--Earnings on funds of each State trust fund may
be used for any purposes related to carrying out the operations of
the trust fund in a manner not inconsistent with the requirements of
this chapter or the farmland preservation plan.
``SEC. 1467. FEDERAL ACCOUNTS AND COMPLIANCE.
``(a) Accounts.--To carry out the purposes of this chapter, the
Secretary may establish in the Treasury of the United States an account,
to be known as the `Agricultural Resource Conservation Revolving Fund'
(hereafter referred to in this chapter as the `Fund'), for the use by
the Secretary to meet the obligations of the Secretary under this
chapter.
``(b) Compliance.--If the Secretary determines that any State trust
fund is failing to comply, to a significant degree, with any
requirements of this chapter, the Secretary shall report the failure to
the Committee on Agriculture of the House of Representatives and to the
Committee on Agriculture, Nutrition, and Forestry of the Senate, shall
fully investigate the matter, may decline to provide additional Federal
guarantees or interest subsidies to the State trust fund, and shall take
other steps as may be appropriate to prevent the use of Federal
assistance in a manner not consistent with this chapter.
``SEC. 1468. APPLICATIONS AND ADMINISTRATION.
``(a) Applications.--In applying for assistance under this chapter
an eligible State described in section 1465(c)(3)(B) shall--
``(1) prepare and submit, to the Secretary, an application at
such time, in such manner, and containing such information as the
Secretary shall require;
``(2) agree that the State trust fund will use any funds
provided, or guaranteed, by the Secretary under this chapter in a
manner that is consistent with the chapter and the regulations
promulgated by the Secretary; and
``(3) agree to comply with any other requirements set forth in
agreements with the Secretary or as the Secretary may prescribe by
regulation.
``(b) Annual Applications.--Eligible States described in section
1465(c)(3)(B) may apply for Federal assistance under this chapter on an
annual basis. The Secretary shall approve or disapprove each application
for assistance, and notify the applicant of the action not later than 30
days after receipt of a complete application.
``(c) Match and Maximum Amount.--
``(1) In general.--The total amount of any guarantees provided
by the Secretary under this program for each eligible State shall
equal an amount that is equal to double the amount that is, or shall
be, made available to the trust fund (including matching funds
described in paragraphs (2) through (4)) in each such eligible State
by the State, political subdivisions thereof, charitable
organizations, private persons, or any other entity, for acquiring
interests in land to protect and preserve important farmlands for
future agricultural use but in no event shall the total Federal
share exceed $10,000,000 in any fiscal year for any given State.
``(2) Earnings.--Earnings of the State trust fund and funds
expended by the State or the State trust fund prior to loan closing
for purposes consistent with this chapter, and in the same fiscal
year, may be considered as matching funds.
``(3) Obligations.--Proceeds from the sale of tax-exempt general
obligation bonds, or other obligations, of the State or State trust
fund shall be an allowable source of matching funds under this
chapter for the same fiscal year.
``(4) Land.--The fair market value of any donation of an
interest in land to the State trust fund, or a charitable
organization working with the State trust fund, may be considered as
matching funds, for the same fiscal year, if--
``(i) the fair market value is based on an appraisal
determined to be adequate by the State trust fund; and
``(ii) the donation is consistent with the State farmland
preservation plan,
except that the value of land donated to charitable organizations by
the State trust fund shall not be included as part of the match.
``(d) Clarification of Federal Law.--Sellers of land, or of
interests in land, to any State trust fund are not, and shall not be
considered by the Secretary as, recipients or beneficiaries of Federal
assistance.
``SEC. 1469. REPORT.
``Not later than September 30, 1992, and annually thereafter, the
Secretary of Agriculture shall prepare and submit, to the Committee on
Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry of the Senate, a report concerning
the operation of the program established under this chapter.
``SEC. 1470. IMPLEMENTATION AND EFFECTIVE DATE.
``(a) In general.--This chapter shall become effective on October 1,
1990. Not later than December 30, 1990, the Secretary shall enter into
an agreement with the State of Vermont to provide Federal assistance
under this chapter to the State.
``(b) Regulations.--Not later than December 31, 1991, the Secretary
of Agriculture shall publish in the Federal Register interim final
regulations to implement this chapter. The regulations shall not require
each State's program to give a priority to the acquisition of land, or
interests in land, that is subject to significant urban pressure.
``SEC. 1470A. COMPTROLLER GENERAL REPORTS.
``On February 15 of 1992, and on December 1 of each of the years
1992 through 1996, the Comptroller General of the United States shall
report to the Committee on Agriculture of the House of Representatives
and the Committee on Agriculture, Nutrition, and Forestry of the Senate,
on whether the Secretary of Agriculture is complying with the
requirements of this chapter. The report shall include information
concerning loans guaranteed under this chapter and the steps the
Secretary of Agriculture has taken to comply with this chapter.
``SEC. 1470B. SPECIAL RULES FOR ISSUANCE OF STOCK FOR 1992.
``The Secretary shall issue the stock required to be issued to the
Secretary of [the] Treasury under this chapter with respect to the
eligible State described in section 1465(c)(3)(A), for fiscal year 1992,
on or before December 20, 1991.''
[Amendment by section 201(b), (c) of Pub. L. 102-237 to sections
1466 and 1470 of Pub. L. 101-624, set out above, effective as if
included in the provision of the Food, Agriculture, Conservation, and
Trade Act of 1990, Pub. L. 101-624, to which the amendment relates, see
section 1101(b)(1) of Pub. L. 102-237, set out as an Effective Date of
1991 Amendment note under section 1421 of this title.]
Pub. L. 102-341, title VII, Sec. 730, Aug. 14, 1992, 106 Stat. 909,
provided that: ``For loan guarantees authorized under sections 1465-1469
of Public Law 101-624 [set out above] for the Agricultural Resource
Conservation Demonstration Program, $10,000,000. For the cost, as
defined in section 502 of the Congressional Budget Act of 1974 [2 U.S.C.
661a], $3,644,000: Provided, That, hereafter, no other funds are
available in this or any other Act to carry out this program, other than
those provided for in advance in Appropriations Acts, except for the
cost of administering the program: Provided further, That such
limitation shall not apply with respect to the duties and obligations of
the Secretary regarding any loan or note guarantees, interest assistance
agreements, or other understandings entered into during fiscal year
1992, and the personnel of the Department shall carry out the duties and
obligations of the Secretary, and any other requirements imposed on the
Secretary regarding such Agricultural Resource Conservation
Demonstration Loan Program with respect to the loan made and guaranteed
in 1992.''
