United States Code

USC most recently checked for updates: Mar 29, 2020

§ 1961.
Eligibility for loans
(a)
Persons eligible

The Secretary shall make and insure loans under this subchapter 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 (in the case of farm ownership loans in accordance with subchapter I) owner-operators or operators, or (in the case of loans for a purpose under subchapter II) operators of not larger than family farms, and (2) farm cooperatives, private domestic corporations, partnerships, joint operations, trusts, or limited liability companies, or such other legal entities as the Secretary considers appropriate (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 (in the case of farm ownership loans in accordance with subchapter I) owner-operators or operators, or (in the case of loans for a purpose under subchapter II) operators of not larger than family farms (or in the case of such cooperatives, corporations, partnerships, joint operations, trusts, or limited liability companies, or other legal entities 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 [7 U.S.C. 7701 et seq.] or the animal quarantine laws (as defined in section 136a of title 21), 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, limited liability companies, and such other legal entities, the family farm requirement of the preceding sentence shall apply as well to all farms in which the entity has an ownership or operator interest (in the case of loans for a purpose under subchapter I) or an operator interest (in the case of loans for a purpose under subchapter II). The Secretary shall accept applications from, and make or insure loans pursuant to the requirements of this subchapter to, applicants, otherwise eligible under this subchapter, 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 [7 U.S.C. 7701 et seq.] or the animal quarantine laws (as defined in section 136a of title 21), 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 subchapter 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. An entity that is an owner-operator or operator described in this subsection shall be considered to meet the direct ownership requirement imposed under this subsection if at least 75 percent of the ownership interests of each embedded entity of the entity is owned directly or indirectly by the individuals that own the family farm.

(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 subchapter 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 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 subchapter, the Secretary may make a loan to a poultry farmer under this subchapter 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 subchapter.
(ii)
Amount

Subject to the limitation contained in section 1964(a)(2) of this title, 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 subchapter, the Secretary may make a loan to a poultry farmer under this subchapter 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 subchapter.
(ii)
Amount
Subject to the limitation contained in section 1964(a)(2) of this title, 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 subchapter 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 2266(a) of this title.

(d)
Definitions
For the purposes of this subchapter—
(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.
(Pub. L. 87–128, title III, § 321, Aug. 8, 1961, 75 Stat. 311; Pub. L. 87–832, Oct. 15, 1962, 76 Stat. 958; Pub. L. 93–24, §§ 2, 3, 6, Apr. 20, 1973, 87 Stat. 24, 25; Pub. L. 93–237, § 10(a), (d), Jan. 2, 1974, 87 Stat. 1025; Pub. L. 94–68, §§ 2, 3, Aug. 5, 1975, 89 Stat. 381; Pub. L. 95–334, title I, § 118, Aug. 4, 1978, 92 Stat. 426; Pub. L. 96–302, title I, § 120(a), July 2, 1980, 94 Stat. 841; Pub. L. 96–438, § 3(a), (b)(1), Oct. 13, 1980, 94 Stat. 1872; Pub. L. 97–35, title I, § 161, Aug. 13, 1981, 95 Stat. 378; Pub. L. 98–258, title VI, § 602(a), Apr. 10, 1984, 98 Stat. 138; Pub. L. 99–198, title XIII, § 1308(a), (b)(1), Dec. 23, 1985, 99 Stat. 1522; Pub. L. 100–707, title I, § 109(c)(1), Nov. 23, 1988, 102 Stat. 4708; Pub. L. 104–127, title VI, § 621(a), Apr. 4, 1996, 110 Stat. 1091; Pub. L. 106–387, § 1(a) [title VIII, § 833], Oct. 28, 2000, 114 Stat. 1549, 1549A–61; Pub. L. 107–171, title V, §§ 5201(a), 5302, 5501(a), May 13, 2002, 116 Stat. 344, 351; Pub. L. 110–234, title V, § 5201, May 22, 2008, 122 Stat. 1146; Pub. L. 110–246, § 4(a), title V, § 5201, June 18, 2008, 122 Stat. 1664, 1908; Pub. L. 113–79, title V, § 5201, Feb. 7, 2014, 128 Stat. 838; Pub. L. 115–334, title V, § 5401(a)(1), Dec. 20, 2018, 132 Stat. 4674.)
cite as: 7 USC 1961