[Congressional Record Volume 144, Number 31 (Thursday, March 19, 1998)]
[Senate]
[Pages S2303-S2304]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROBB:
  S. 1803. A bill to reform agricultural credit programs of the 
Department of Agriculture, and for other purposes; to the Committee on 
Agriculture, Nutrition, and Forestry.


                THE AGRICULTURAL CREDIT RESTORATION ACT

  Mr. ROBB. Mr. President, every day small and minority farmers are 
struggling to survive. They struggle in the field as they try to grow a 
plentiful crop, they struggle with the ever unpredictable Mother 
Nature, and they struggle to compete with large farm operations. They 
have a very tough job, but they provide us, the consumers, with the 
abundant food supply we take for granted. Historically, when credit is 
unavailable from private sources, farmers have turned to USDA to 
finance land, seed, equipment and fertilizer, or for funds to offset 
disaster losses. USDA direct and guaranteed operating loan programs 
allow small farmers to be self-sustaining, successful, contributing 
members of their rural communities.
  But Mr. President, a little, unknown provision in the 1996 Farm Bill 
is prohibiting farmers and ranchers from receiving USDA loans if their 
farm debt has been written off, or forgiven, by the Department in the 
past for any reason. This provision constitutes a lifetime ban, is more 
severe than private sector lending policies, and particularly 
disadvantages small and minority farmers who often have difficulty 
securing credit. It is a one strike you're out policy and Mr. 
President, it is simply un-American.
  I believe this provision that prohibits farmers who have had their 
farm debt written-off or restructured from ever receiving a USDA loan 
again was probably added to the 1996 Farm bill to protect the public 
interest. However, it is actually forcing some small and minority 
farmers into impoverished retirement.
  That is why I rise today to introduce the Agricultural Credit 
Restoration Act of 1998. While safeguarding the integrity of USDA 
lending programs, this bill provides credit-worthy farmers and ranchers 
a second opportunity to participate in lending programs. The 
legislation, which was formulated by the USDA, eliminates the lifetime 
ban. It limits eligibility to two write-downs and farmers and ranchers 
are given a second opportunity to participate in USDA lending programs. 
Secondly, an exemption from the ban is included for one write-down that 
may result from a natural disaster or medical condition affecting 
farmers or their immediate family, or where discrimination by USDA has 
occurred. Thirdly, the bill gives the Secretary of Agriculture the 
authority to give loan funds for socially disadvantaged farmers to 
states where need is greatest.
  In my state, Virginia, and throughout the South, farmers have been 
denied or delayed loans by USDA local agents because of their race. 
This has been confirmed by USDA and acknowledged by Agriculture 
Secretary Dan Glickman and President Clinton. This discrimination has 
forced farmers into bankruptcy and statistics show that the black 
farmer is dwindling at three times the rate of other farmers in the 
United States.
  In the Dakotas, farmers were devastated by the great floods of 1997. 
Due to a terrible act by Mother Nature, they lost everything and had to 
declare bankruptcy.
  Whether it is a man-mad or a natural disaster, conditions beyond a 
farmer's control have left him or her in a desperate position. This 
does not mean these are bad farmers with bad business sense. They have 
simply experienced bad times, and USDA, the lender of last resort, 
should not be forbidden from lending these farmers a helping hand.
  Last year, responding to complaints by Virginia farmers, I added $50 
million in direct operating loan funding to the 1997 Supplemental 
Appropriations bill. Many deserving farmers were unable to access these 
funds because of the lifetime ban included in the 1996 Farm bill.
  Mr. President, it is time to repeal this unjust one strike you're out 
provision. We need to do so now, before another planting season goes by 
and farmers are denied the resources they need to get their corps in 
the ground.
  Small farmers are hardworking individuals with many daily struggles. 
The Federal government should be there to offer them a chance to 
survive, not forcing them to move out of the farming business.
  Mr. President, I ask unanimous consent that the full text of my bill 
be inserted in the Record, and I urge my fellow colleagues to support 
small farmers and pass this legislation.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1803

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Agricultural Credit 
     Restoration Act''.

     SEC. 2. AMENDMENTS TO THE CONSOLIDATED FARM AND RURAL 
                   DEVELOPMENT ACT.

       (a) Section 343(a)(12)(B) of the Consolidated Farm and 
     Rural Development Act (7 U.S.C. 1991(a)(12)(B)) is amended to 
     read as follows:
       ``(B) Exception.--The term `debt forgiveness' does not 
     include--
       ``(i) consolidation, rescheduling, reamortization, or 
     deferral of a loan;
       ``(ii) 1 debt forgiveness in the form of a restructuring, 
     write-down, or net recovery buy-out during the lifetime of 
     the borrower that is due to a financial problem of the 
     borrower relating to a natural disaster or a medical 
     condition of the borrower or of a member of the immediate 
     family of the borrower (or, in the case of a borrower that is 
     an entity, a principal owner of the borrower or a member of 
     the immediate family of such an owner); and
       ``(iii) any restructuring, write-down, or net recovery buy-
     out provided as a part of a resolution of a discrimination 
     complaint against the Secretary.''.
       (b) Section 353(m) of such Act (7 U.S.C. 2001(m)) is 
     amended by striking all that precedes paragraph (2) and 
     inserting the following:
       ``(m) Limitation on Number of Write-Downs and Net Recovery 
     But-Outs Per Borrower.--

[[Page S2304]]

       ``(1) In general.--The Secretary may provide a write-down 
     or net recovery but-out under this section or not more than 2 
     occasions per borrower with respect to loans made after 
     January 6, 1988.''.
       (c) Section 353 of such Act (7 U.S.C. 2001) is amended by 
     striking subsection (o).
       (d) Section 355(c)(2) of such Act (7 U.S.C. 2003(c)(2)) is 
     amended to read as follows:
       ``(2) Reservation and allocation.--
       ``(A) In general.--The Secretary shall, to the greatest 
     extent practicable, reserve and allocate the proportion of 
     each State's loan funds made available under subtitle B that 
     is equal to that State's target participation rate for use by 
     the socially disadvantaged farmers or ranchers in that State. 
     The Secretary shall, to the extent practicable, distribute 
     the total so derived on a county by county basis according to 
     the number of socially disadvantaged farmers or ranchers in 
     the county.
       ``(B) Reallocation of unused funds.--The Secretary may pool 
     any funds reserved and allocated under this paragraph with 
     respect to a State that are not used as described in 
     subparagraph (A) in a State in the first 10 months of a 
     fiscal year with the funds similarly not so used in other 
     States, and may reallocate such pooled funds in the 
     discretion of the Secretary for use by socially disadvantaged 
     farmers and ranchers in other States.''.
       (e) Section 373(b)(1) of such Act (7 U.S.C. 2008h(b)(1)) is 
     amended to read as follows:
       ``(1) In general.--Except as provided in paragraph (2), the 
     Secretary may not make or guarantee a loan under subtitle A 
     or B to a borrower who on, 2 or more occasions, received debt 
     forgiveness on a loan made or guaranteed under this title.''.
       (f) Section 373(c) of such Act (7 U.S.C. 2008h(c)) is 
     amended to read as follows:
       ``(c) No More Than 2 Debt Forgivenesses Per Borrower on 
     Direct Loans.--The Secretary may not, on 2 or more occasions, 
     provide debt forgiveness to a borrower on a direct loan made 
     under this title.''.

     SEC. 2. REGULATIONS.

       Not later than 90 days after the date of the enactment of 
     this Act, the Secretary of Agriculture shall promulgate 
     regulations necessary to carry out the amendments made by 
     this Act, without regard to--
       (1) the notice and comment provisions of section 553 of 
     title 5, United States Code; and
       (2) the statement of policy of the Secretary of Agriculture 
     relating to notices of proposed rulemaking and public 
     participation in rulemaking that became effective on July 24, 
     1971 (36 Fed. Reg. 13804).
                                 ______