[Congressional Record (Bound Edition), Volume 152 (2006), Part 17]
[Senate]
[Pages 22793-22794]
[From the U.S. Government Publishing Office, www.gpo.gov]




      AMENDING THE FARM SECURITY AND RURAL INVESTMENT ACT OF 2002

  Mr. FRIST. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of S. 4093, introduced earlier 
today by Senator Harkin.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 4093) to amend the Farm Security and Rural 
     Investment Act of 2002 to extend a suspension of limitation 
     on the period for which certain borrowers are eligible for 
     guaranteed assistance.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. HARKIN. Mr. President, today I introduced along with several 
colleagues legislation that will extend the current waiver of the 15-
year term limit on USDA guaranteed loans which will expire on December 
31, 2006. Starting January 1, 2007, many producers nationwide will 
become ineligible for Farm Service Agency, FSA, guaranteed loans. These 
loan guarantees enable producers to obtain credit to purchase farmland, 
livestock, feed, seed, farm equipment, and fuel essential to their 
farming operations. Without the Government guarantee many farmers will 
be unable to secure operating credit and will be forced out of their 
livelihood.
  The FSA guarantee loan allows lenders to make agricultural credit 
available to farmers who may not meet the lenders' normal underwriting 
criteria. Borrowers apply for a guaranteed loan through an agricultural 
lender who then secures a guarantee from FSA. The guarantee covers up 
to 95 percent of the loss to the lender of principal and interest on a 
loan in case of default. Admirably, default rates on these loans are 
very low at 1.4 percent.
  While the 15-year limit on eligibility is intended to graduate 
producers to commercial credit, we have found that in many cases 
producers simply are unable to meet lenders' standards without the 
guarantee. Term limits on guaranteed loans do not adequately take into 
consideration economic and weather conditions. In recent years, many of 
America's producers have suffered through high energy costs, droughts 
and hurricanes. Without this legislation, producers who have suffered 
through bad years due to these weather and economic conditions will no 
longer be eligible for loan guarantees they need to continue their 
operations.
  Our bill will extend the term limit waiver until September 30, 2007. 
This step will help farmers and ranchers nationwide and allow Congress 
to address term limits on FSA guaranteed loans in the coming farm bill.
  Mr. FRIST. Mr. President, I ask unanimous consent that the bill be 
read three times and passed, the motion to reconsider be laid upon the 
table, with no intervening action or debate, and that any statements 
related to the bill be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 4093) was ordered to be engrossed for a third reading, 
was read the third time, and passed, as follows:

                                S. 4093

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

[[Page 22794]]



     SECTION 1. SUSPENSION OF LIMITATION ON PERIOD FOR WHICH 
                   BORROWERS ARE ELIGIBLE FOR GUARANTEED 
                   ASSISTANCE.

       Section 5102 of the Farm Security and Rural Investment Act 
     of 2002 (7 U.S.C. 1949 note; Public Law 107-171) is amended 
     by striking ``December 31, 2006'' and inserting ``September 
     30, 2007''.

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