[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4129 Introduced in House (IH)]
103d CONGRESS
2d Session
H. R. 4129
To provide needed credit and financial services to rural residents,
public services, and business enterprises, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 24, 1994
Mrs. Clayton introduced the following bill which was referred to the
Committee on Agriculture
_______________________________________________________________________
A BILL
To provide needed credit and financial services to rural residents,
public services, and business enterprises, and for other purposes.
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 ``Rural Credit and Development Act of
1994''.
SEC. 2. REFERENCES TO THE FARM CREDIT ACT OF 1971.
Whenever in this Act an amendment or repeal is expressed in terms
of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.),
except to the extent otherwise provided.
TITLE I--CREDIT FOR RURAL BUSINESS ENTERPRISES
SEC. 101. PURCHASES OF LOANS FROM NON-SYSTEM LENDERS.
(a) Farm Credit Banks.--Section 1.5(16) U.S.C. 2013(16)) is amended
by--
(1) striking out ``sell to lenders that are not Farm Credit
System institutions interests in loans'' and inserting in lieu
thereof ``buy from and sell to entities that are not Farm
Credit System institutions loans and interests in loans that
the bank or the associations in its district are authorized to
make under this Act''; and
(2) inserting before the semicolon at the end the
following: ``: Provided, That the provisions of section 4.36
and part C of title IV shall not apply to loans and interests
in loans purchased from entities that are not Farm Credit
System institutions''.
(b) Production Credit Associations.--Section 2.2(11) (12 U.S.C.
2073(11)) is amended by--
(1) inserting ``and buy from entities that are not Farm
Credit System institutions loans and interests in loans that
the association is authorized to make under this title,'' after
``and nonvoting stock,''; and
(2) inserting before the semicolon at the end thereof the
following: ``: Provided, That the provisions of section 4.36
and part C of title IV shall not apply to loans and interests
in loans purchased from entities that are not Farm Credit
System institutions''.
(c) Exception to Stock Purchase Requirement.--Section
4.3A(c)(1)(E)(i) (12 U.S.C. 2154a(c)(1)(E)(i)) is amended by inserting
before the semicolon at the end thereof the following: ``: Provided,
That no voting stock or participation certificates shall be required
for loans or interests in loans purchased by the institution from
entities that are not Farm Credit System institutions''.
SEC. 102. IMPROVING THE AVAILABILITY OF CREDIT FOR FARM-RELATED
BUSINESSES.
(a) In General.--
(1) FCB borrower eligibility.--Section 1.9(2) (12 U.S.C.
2017(2)) is amended by striking out ``directly related to their
on-farm operating needs'' and by inserting ``goods and''
immediately before ``services''.
(2) FCB loan purchases.--Section 1.11(c) (12 U.S.C.
2019(c)) is amended by--
(A) in paragraph (1), striking out ``directly
related to their on-farm operating needs'' and by
inserting ``goods and'' immediately before ``services''
each place it appears; and
(2) in the title, inserting ``Goods and'' before
``Services.''.
(3) Production credit associations.--Section 2.4(a)(3) (12
U.S.C. 2075(a)(3)) is amended by striking out ``directly
related to their on-farm operating needs'' and by inserting
``goods and'' immediately before ``services''.
(b) Related Services.--
(1) Farm credit banks.--Section 1.12(a) (12 U.S.C. 2020(a))
is amended by striking out ``appropriate to their on-farm and
aquatic operations''.
(2) Production credit associations.--Section 2.5 (12 U.S.C.
2076) is amended by striking out ``appropriate to their on-farm
and aquatic operations''.
SEC. 103. COOPERATIVE-RELATED BUSINESS FINANCING.
Section 3.7(b) (12 U.S.C. 2128(b)) is amended by--
(1) redesignating paragraphs (2) and (3) as paragraphs (3)
and (4), respectively;
(2) inserting after paragraph (1) a new paragraph (2) as
follows:
``(2)(A) A bank for cooperatives is authorized to make or
participate in loans and commitment to, and extend other technical and
financial assistance to, any legal entity providing any of the farm-
related services or products of the type described in subparagraph (B)
when such loan, commitment, or assistance will provide a direct and
material benefit to an association that is an eligible cooperative
association under section 3.8(a): Provided, That any such loan or
commitment may be made, or assistance extended, to a legal entity only
if--
``(i) the eligible cooperative association certifies to the
satisfaction of the bank for cooperatives that a material
business relationship exists between it and the legal entity
and that it receives a direct and material benefit as a result
of that relationship; and
``(ii) the cumulative amount of all such loans,
commitments, and assistance to the legal entity do not exceed
10 percent of the bank's total capital,
``(B) The services or products provided by a legal entity that
shall enable such legal entity to be eligible for financing under
subparagraph (A) are those services or products involved in the
processing, preparing for market, handling, or marketing of farm or
aquatic products, or in the purchasing, testing, grading, process,
distributing, or furnishing of farm or aquatic supplies, or in the
furnishing of farm or aquatic business services to, or in other ways
adding value to the products or services of, eligible cooperative
associations.''; and
(3) in paragraph (4), as redesignated by paragraph (1),
striking out ``paragraphs (1) and (2)'' and inserting in lieu
thereof ``paragraphs (1) and (3)''.
TITLE II--CREDIT FOR RURAL INFRASTRUCTURE
SEC. 201. RURAL COMMUNITY FACILITY LENDING BY FARM CREDIT BANKS AND
DIRECT LONG-TERM LENDING ASSOCIATIONS.
(a) Lending Authority.--Section 1.7 (12 U.S.C. 2015) is amended by
adding at the end a new subsection as follows:
``(c) Community Facility Loans.--In order to facilitate needed
improvements in the infrastructure of rural United States, the Farm
Credit Banks may make and participate with other lenders in community
facility loans as described in section 1.11(d).''.
(b) Eligible Borrowers.--Section 1.9 (12 U.S.C. 2017), as amended
by section 102(a)(1) of this Act, is further amended by--
(1) striking out ``or'' at the end of paragraph (2);
(2) striking out the period at the end of paragraph (3) and
inserting in lieu thereof ``; or''; and
(3) adding at the end the following new paragraph:
``(4) persons or public and quasi-public agencies and
bodies, and other public and private entities, that, under
authority of State or local law, establish or operate water or
waste disposal facilities, pollution abatement and control
facilities and programs, or other essential community
facilities in rural areas.''.
(c) Loan Terms and Security.--Section 1.10 (12 U.S.C. 2018) is
amended by--
(1) in subsection (a)(2), striking out ``this section'' and
inserting in lieu thereof ``section 1.7(a)'';
(2) in subsection (b), inserting ``and loans made under the
authority of section 1.7(c)'' after ``other than real estate
loans''; and
(3) adding at the end a new subsection as follows:
``(c) Community Facility Loans.--Loans made under the authority of
section 1.7(c) shall be for such terms and on such security (if any) as
made be prescribed by policies adopted by the board of directors of the
bank.''.
(d) Purposes for Extension of Credit.--Section 1.11 (12 U.S.C.
2019) is amended by--
(1) in subsection (a)(1), inserting ``, other than loans
under section 1.7(c),'' after ``Loans'';
(2) in subsection (b)(2), striking out ``this title'' and
inserting in lieu thereof ``section 1.7(a)''; and
(3) adding at the end a new subsection as follows:
``(d) Community Facilities.--The Farm Credit Banks may make and
participate with other lenders in loans for the purpose of
constructing, installing, maintaining, expanding, improving, or
operating water or waste disposal facilities, pollution abatement and
control facilities and programs, or other essential community
facilities, including necessary related equipment, in rural areas:
Provided, That, for purposes of this subsection, the term ``rural
area'' means all territory of a State that is not within the outer
boundary of any city or town having a population of more than 20,000
based on the latest decennial census of the United States.''.
(e) Conforming Amendments.--Section 7.6 (12 U.S.C. 2279b) is
amended by--
(1) in the material preceding paragraph (1) of subsection
(a), inserting ``direct lending'' before ``authority'', and
striking out ``, to make and participate in long-term real
estate mortgage loans'';
(2) in paragraph (1) of subsection (b)--
(A) striking out ``long-term real estate mortgage
loan authority,'' and inserting in lieu thereof
``lending authority''; and
(B) inserting after ``transferring bank,'' the
following: ``and shall possess the powers described in
paragraphs (12) and (16) of section 1.5 in connection
with such lending authority,''; and
(3) adding at the end the following new subsection as
follows:
``(e) Transfers of Additional Authorities.--Whenever a transfer of
direct lending authority under subsection (a) or (d) has occurred prior
to the date of enactment of this subsection, including a transfer of
direct lending authority to an association resulting from a merger
under section 411 of the Agricultural Credit Act of 1987, any direct
lending authority conferred on any bank described in subsection (a) or
(d) on or after the date of enactment of this subsection shall
automatically transfer to the transferee association at the time the
authority is conferred on the bank.''.
SEC. 202. BANK FOR COOPERATIVE FINANCING OF UTILITY-RELATED SERVICES.
Section 3.7(a) (12 U.S.C. 2128(a)) is amended by adding before the
period at the end of the third sentence the following: ``; and each
bank may make or participate in loans or commitments and extend other
technical and financial assistance to other parties for electric power
generation and transmission operations and projects that provide, to
entities eligible to borrow from the bank under section 3.8, power,
power generation byproducts, or other related benefits or services that
are of material economic benefit to such eligible entities''.
TITLE III--CREDIT FOR RURAL HOUSING
SEC. 301. IMPROVING THE AVAILABILITY OF CREDIT FOR RURAL HOME BUYERS.
(a) Population Limitations.--
(1) Farm credit banks.--Section 1.11(b)(3) (12 U.S.C.
2019(b)(3)) is amended by striking out ``2,500 inhabitants''
and inserting in lieu thereof ``20,000 inhabitants''.
(2) Production credit associations.--Section 2.4(b)(3) (12
U.S.C. 2075(b)(3)) is amended by striking out ``2,500
inhabitants'' and inserting in lieu thereof ``20,000
inhabitants''.
(3) Conforming change.--Section 8.0(1)(B)(i) (12 U.S.C.
2279aa(1)(B)(i)) is amended by striking out ``2,500
inhabitants'' and inserting in lieu thereof ``20,000
inhabitants''.
(b) Percentage of Loan Portfolio.--
(1) Farm credit banks.--Section 1.11(b)(2) (12 U.S.C.
2019(b)(2)) is amended by striking out ``15 percent'' and
inserting in lieu thereof ``20 percent''.
(2) Production credit associations.--Section 2.4(b)(2) (12
U.S.C. 2075(b)(2)) is amended by striking out ``15 percent''
each place it appears and inserting in lieu thereof ``20
percent''.
(c) Home Equity Financing.--
(1) Farm credit banks.--
(A) First lien requirement.--Section 1.10(a)(2) (12
U.S.C. 2018(a)(2)), as amended by section 201(c)(1) of
this Act, is further amended by striking out ``All''
and inserting in lieu thereof ``Except with respect to
loans made to rural residents for personal, family, or
household needs other than rural housing financing,
all''.
(B) Lending authority.--Section 1.11(b)(1) (12
U.S.C. 2019(b)(1)) is amended by inserting ``and other
personal, family, or household needs'' after ``housing
financing''.
(2) Production credit associations.--Section 2.4(a)(2) (12
U.S.C. 2075(a)(2)) is amended by inserting ``and other
personal, family, or household needs'' after ``housing
financing''.
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