II 111th CONGRESS 2d Session S. 3085 IN THE SENATE OF THE UNITED STATES March 5, 2010 Mr. Baucus introduced the following bill; which was read twice and referred to the Committee on Agriculture, Nutrition, and Forestry A BILL To amend the Consolidated Farm and Rural Development Act to improve the business and industry direct and guaranteed loan program of the Department of Agriculture.

1.

Short title

This Act may be cited as the Rural Access to Credit Act of 2010.

2.

Business and industry direct and guaranteed loans

(a)

Tangible equity requirements

Section 310B(d) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(d)) is amended by striking paragraph (6) and inserting the following: (6)

Equity

In the case of direct or guaranteed loans under this section, the Secretary shall use commercial lending standards in determining any equity requirement. . (b)

General terms

Section 310B(g) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(g)) is amended by adding at the end the following: (10)

General terms

(A)

Maximum loan guarantee amount

(i)

In general

Notwithstanding any other provision of this Act, during the period beginning on the date of enactment of this paragraph and ending on December 31, 2011, the Secretary shall guarantee up to 90 percent of a business and industry loan in an amount of up to $10,000,000 that is a high priority project, as determined based on published criteria of the Secretary that includes rural economic factors. (ii)

Subsequent fiscal years

Notwithstanding any other provision of this Act, beginning on January 1, 2012, the Secretary may guarantee up to 80 or 90 percent (as determined by the Secretary) of a business and industry loan in an amount of up to $10,000,000 that is a high priority project, as determined based on criteria described in clause (i). (B)

Line-of-credit loans

In guaranteeing business and industry loans, the Secretary shall guarantee line-of-credit loans in accordance with section 316(c). (C)

Refinancing

(i)

In general

A business and industry loan may be used by a small business to refinance debt in existence as of the day before the date on which the loan was made or guaranteed, if— (I)the project for which the debt was incurred is viable and will create or save jobs, as determined by the Secretary; and (II)as of the date of application for refinancing— (aa)the underlying loan has been current for at least 1 year; and (bb)the lender is providing better rates and longer terms than under the original loan. (ii)

Subordinated owner debt

Subordinated owner debt shall not be eligible for inclusion in debt described in clause (i). (D)

Audit standards

Notwithstanding any other provision of law, the Secretary— (i)shall not require audited financial statements consistent with generally accepted accounting principles for business and industry loans of less than $1,000,000; and (ii)may waive any requirement for audited financial statements consistent with generally accepted accounting principles for business and industry loans of at least $1,000,000. (E)

Calculation of delinquency rates

To allow accurate comparison of delinquency rates among Federal agencies, in calculating the delinquency rate for business and industry loans, the Secretary shall use the calculation method used by the Administrator of the Small Business Administration. . (c)

Sense of Congress relating to the rural microentrepreneur assistance program

It is the sense of Congress that in allocating discretionary funds of the Secretary of Agriculture, the Secretary of Agriculture should give priority to the rural microentrepreneur assistance program established under section 379E of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008s). (d)

Budgetary effects

The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go-Act of 2010, shall be determined by reference to the latest statement titled Budgetary Effects of PAYGO Legislation for this Act, submitted for printing in the Congressional Record by the Chairman of the Senate Budget Committee, provided that such statement has been submitted prior to the vote on passage.