SHORT TITLE, PURPOSE, AND DEFINITION.
This chapter may be cited as the ‘Farms for the Future Act
It is the purpose of this chapter to promote a national farmland
protection effort to preserve our vital farmland
resources for future generations.
“(c)Definitions.—As used in this chapter:
“(1)Allowable interest rate.—
The term ‘allowable interest rate’ refers to the interest rate that the State
trust fund pays on each eligible loan (including the interest paid by the State
trust fund, State
, or State
agency on bonds or other obligations described in paragraph (2)).
The term ‘eligible loan’ means each loan made by lending institutions to each State
trust fund, or to the State
acting in conjunction with the State
trust fund, to further the purposes of this chapter, and the proceeds from any issuance of obligations, or other bonded indebtedness, of any eligible State
, the State
trust fund, or any agency of an eligible State
, except that no eligible loan shall bear an interest rate in excess of 10 percent per year.
“(3)Eligible state.—The term ‘eligible State’ means—
of Vermont; and
“(B) at the option of the Secretary and subject to appropriations, any State that—
operates or administers a land preservation fund that invests funds in the protection or preservation of farmland
for agricultural purposes; and
works in coordination with the governing bodies of counties, towns, townships, villages, or other units of general government below the State
level, or with private nonprofit or public organizations, to assist in the preservation of farmland
for agricultural purposes.
The term ‘lending institution’ means any Federal or State
chartered bank, savings and loan association, cooperative lending agency, other legally organized lending agency, State
government or agency, political subdivision of a State
, or any nonprofit conservation organization.
The term ‘program’ means the farmland
preservation program established under this chapter to be known as the ‘Agricultural Resource Conservation Demonstration Program’.
The term ‘State
’ means any State
of the United States
, the Commonwealth of Puerto Rico, and the Virgin Islands of the United States
“(8)State trust fund.—
The term ‘State
trust fund’ means any trust fund or an account established by an eligible State
, or other public instrumentality of the eligible State
, where such eligible State
is approved to participate by the Secretary
in the program under application procedures set forth in section 1466(j) or 1468.
ESTABLISHMENT OF PROGRAM.
“(a) In General.—
shall establish and implement a program, to be known as the ‘Agricultural Resource Conservation Demonstration Program’, to provide Federal guarantees and interest assistance for eligible loans described in section 1465(c)(2) made to, or issued for the benefit of, State trust funds.
Under the program the Secretary
shall guarantee for a period of 10 years the timely payment of the principal amount and interest due on each eligible loan described in section 1465(c)(2) made to, or issued for the benefit of, State trust funds and shall for each such 10-year period subsidize the interest on such eligible loans at the allowable interest rate for the first 5 years after the loan is made, or issued, and at no less than 3 percentage points for the second 5 years under procedures described in subsection (b).
“(b)Mandatory Assistance to Each State Trust Fund.—The Secretary shall—
fully guarantee with the full faith and credit of the United States
each eligible loan described in section 1465(c)(2) made to, or issued for the benefit of, each State
trust fund under procedures established by the Secretary
annually pay to each State
trust fund an amount calculated by applying the allowable interest rate to the amount of each loan described in section 1465(c)(2) made to, or issued for the benefit of, each State
trust fund during each of the first 5 years after the date on which each such loan was made or issued; and
annually pay to each State
trust fund, for each year during the second 5-year period after each such eligible loan is made to, or issued for the benefit of, the State
trust fund, an amount calculated by applying the interest rate difference, between the rate of interest charged to borrowers of direct loans as described in section 316(a)(2) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946(a)(2)
) and the allowable interest rate, to the amount of each such loan made to, or issued for the benefit of, the State trust fund, as determined under procedures established by the Secretary.
“(1)Issuance of stock.—
of Agriculture shall make and issue stock, in the same manner as notes are issued under section 309(c) or 309A(d) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(c)
or 1929a(d)), to the Secretary of the Treasury for the purpose of obtaining funds from the Secretary of the Treasury that are necessary for discharging the obligations of the Secretary of Agriculture under this chapter. The stock shall not pay dividends and shall not be redeemable.
“(2)Purchase of stock.—
of the Treasury shall provide the funding necessary to implement this chapter. The Secretary
of the Treasury shall purchase any stock of the Secretary
of Agriculture issued to implement this chapter. The Secretary
of the Treasury shall use as a public debt transaction the proceeds from the sale of any securities issued under chapter 31 of title 31,
United States Code. The purposes for which the securities may be issued under such chapter are extended to include the raising of funds to purchase stock issued by the Secretary of Agriculture to implement this chapter with respect to each eligible State. The Secretary of Agriculture shall make and issue such stock as is necessary to fund this chapter to the Secretary of the Treasury who shall promptly purchase the stock (within 60 days) being offered by the Secretary of Agriculture.
“(3)Commodity credit corporation.—
If the Secretary
of Agriculture fails to issue stock as required under this chapter, or if funding is otherwise not provided as set forth in this chapter, for the eligible State described in section 1465(c)(3)(A), notwithstanding any other provision of law, the Secretary
of Agriculture shall use the funds, services and facilities of the Commodity Credit Corporation to carry out the requirements of this chapter. The procedure described in paragraph (2) shall be used to reimburse the Corporation for funds expended to carry out this paragraph.
“(d)Required Purchases of Stock.—
shall promptly notify the Secretary
of the Treasury, in writing, each time an application of an eligible State is approved by the Secretary
under this chapter. The Secretary
of the Treasury shall promptly purchase stock (within 60 days) offered by the Secretary
under subsection (c) and the Secretary
of Agriculture shall deposit the proceeds from each such sale of stock in accounts created to administer the program.
is entitled to receive funds, and shall receive funds, from the Secretary
of the Treasury in an amount equal to the total par-value of the stock issued to the Secretary
of the Treasury. Each State trust fund is entitled to receive, and the Secretary
of Agriculture shall promptly pay to each such trust fund, amounts calculated under procedures described in subsection (b).
“(f)Regulations.—Except regarding the eligible State described in section 1465(c)(3)(A), the Secretary shall promulgate proposed and final regulations, under the prior public comment provisions of section 553 of title 5, United States Code, setting forth—
the application procedures for eligible States
the factors to be used in approving applicants;
procedures for the prompt payment of the obligations of the Secretary
under subsection (b);
recordkeeping requirements for approved State
requirements to prevent program abuse and procedures to recover improperly obtained funds;
rules permitting State
trust funds to act as revolving funds or to otherwise accumulate additional capital, based on investments, to be subsequently used to promote the purposes of this chapter; and
any other rules necessary and appropriate to carry out the program.
“(g)Duration of Program.—
The program established under this chapter shall expire on September 30, 1996, except that any financial obligations of the Secretary shall continue to be met as required by this chapter.
“(h) Eligible Uses for Guaranteed Loan Funds.—
“(1)In general.—Funds from eligible loans (including proceeds from the sale of bonds or other obligations described in section 1465(c)(2)) guaranteed under this chapter, and any earnings of the State trust funds, may be used—
to purchase development rights, conservation easements or other types of easements, or to purchase agricultural land in fee simple or some lesser estate in land;
to pay all reasonable and customary costs including appraisal, survey and engineering fees, and legal expenses;
to pay the costs of enforcing easements or land use restrictions;
to cover the costs of complying with any regulations issued by the Secretary
under this program and the costs of implementing the farmland plan of operation, except that the guaranteed loan proceeds shall not be used to pay overhead expenses of the State trust fund (rent, utilities, salaries, wages, insurance premiums, and the like); and
to generate earnings (including through investments not exceeding 10 years in duration for each eligible loan), to be used for future farmland
preservation efforts, through investments in direct obligations of the United States or obligations guaranteed by the United States or an agency thereof or by depositing funds in any member bank of the Federal Reserve System or any federally insured State nonmember bank.
“(2)Collateral for loans.—
To the extent consistent with relevant banking laws and practices, the investments or deposits described in paragraph (1)(E) may serve as collateral for loans made to, or on behalf of, the State
“(i)State Use of Guaranteed Loan Funds.—
may issue regulations or procedures requiring each State trust fund to report to the Secretary
regarding the uses of the eligible loans (described in section 1465(c)(2)) guaranteed by the Secretary
and the Secretary
may monitor the uses of the funds to ensure that the loans are used for purposes related to this chapter. Neither the Secretary
or [nor] the lending institution shall have the power to require approval of each specific use of the loans guaranteed by the Secretary
, the specific terms of each use of the loan funds, or the specific provisions of each purchase or investment made with loans guaranteed by the Secretary
. The Secretary
may require that each State trust fund provide a State farmland preservation plan of operation to the Secretary
setting forth the plans for administering the program in the State and may require each State trust fund to periodically report to the Secretary
on the purchases of interests in farmland and on other specific uses of the funds.
“(j)Special Rules for the Pilot Project State.—Notwithstanding any other provisions of this chapter, the following special rules shall apply to the eligible State described in section 1465(c)(3)(A):
“(1)Provision of loan guarantee and interest assistance agreement.—
Within 30 days of the date any State
trust fund in the eligible State
receives a commitment for each eligible loan from a lending institution, the Secretary
shall provide the lending institution with the loan guarantee and the interest assistance agreement so that the lending institution may disburse the full amount of the loan proceeds to the State trust fund on the date of loan closing to carry out this program. After the loan closing, the lending institution shall have no obligation to monitor or approve the use of loan proceeds by the State trust fund.
“(2)Approval of application.—
shall annually approve the completed application from the eligible State within 30 days after receipt if the application sets forth the general goals and policies of the State trust fund. The Secretary
shall provide the Federal assistance required under this chapter beginning on the date the application or plan is approved.
“(3)Amount of guarantees.—The Secretary shall calculate the total amount of guarantees to be provided for fiscal year 1992 in an amount equal to double the sum of—
the amount that was made available in fiscal year 1991 to the State
trust fund (the Vermont Conservation and Housing Board regardless of whether the fund had been approved by the Secretary
in fiscal year 1991), by the State described in section 1465(c)(3)(A), political subdivisions thereof, charitable organizations, private persons, or any other entity, in addition to the proceeds from the sale of obligations of the State related to the purposes of the State trust fund and the fair market value of donations of interests in land to the State trust fund; and
the matching contribution calculated under section 1468(c) for fiscal year 1992 for the State
“(k) Miscellaneous Provisions.—
trust fund may operate through nonprofit corporations, municipalities, or other political subdivisions of States
in carrying out the purposes of the program established in this chapter.
Earnings on funds of each State
trust fund may be used for any purposes related to carrying out the operations of the trust fund in a manner not inconsistent with the requirements of this chapter or the farmland
FEDERAL ACCOUNTS AND COMPLIANCE.
To carry out the purposes of this chapter, the Secretary
may establish in the Treasury of the United States an account, to be known as the ‘Agricultural Resource Conservation Revolving Fund’ (hereafter referred to in this chapter as the ‘Fund’), for the use by the Secretary
to meet the obligations of the Secretary
under this chapter.
If the Secretary
determines that any State trust fund is failing to comply, to a significant degree, with any requirements of this chapter, the Secretary
shall report the failure to the Committee on Agriculture of the House of Representatives and to the Committee on Agriculture, Nutrition, and Forestry of the Senate, shall fully investigate the matter, may decline to provide additional Federal guarantees or interest subsidies to the State trust fund, and shall take other steps as may be appropriate to prevent the use of Federal assistance in a manner not consistent with this chapter.
APPLICATIONS AND ADMINISTRATION.
“(a)Applications.—In applying for assistance under this chapter an eligible State described in section 1465(c)(3)(B) shall—
prepare and submit, to the Secretary
, an application at such time, in such manner, and containing such information as the Secretary
agree that the State
trust fund will use any funds provided, or guaranteed, by the Secretary
under this chapter in a manner that is consistent with the chapter and the regulations promulgated by the Secretary
agree to comply with any other requirements set forth in agreements with the Secretary
or as the Secretary
may prescribe by regulation.
described in section 1465(c)(3)(B) may apply for Federal assistance under this chapter on an annual basis. The Secretary
shall approve or disapprove each application for assistance, and notify the applicant of the action not later than 30 days after receipt of a complete application.
“(c) Match and Maximum Amount.—
The total amount of any guarantees provided by the Secretary
under this program for each eligible State shall equal an amount that is equal to double the amount that is, or shall be, made available to the trust fund (including matching funds described in paragraphs (2) through (4)) in each such eligible State by the State, political subdivisions thereof, charitable organizations, private persons, or any other entity, for acquiring interests in land to protect and preserve important farmlands for future agricultural use but in no event shall the total Federal share exceed $10,000,000 in any fiscal year for any given State.
Earnings of the State
trust fund and funds expended by the State
or the State
trust fund prior to loan closing for purposes consistent with this chapter, and in the same fiscal year, may be considered as matching funds.
Proceeds from the sale of tax-exempt general obligation bonds, or other obligations, of the State
trust fund shall be an allowable source of matching funds under this chapter for the same fiscal year.
“(4)Land.—The fair market value of any donation of an interest in land to the State trust fund, or a charitable organization working with the State trust fund, may be considered as matching funds, for the same fiscal year, if—
the fair market
value is based on an appraisal determined to be adequate by the State
trust fund; and
the donation is consistent with the Statefarmland
except that the value of land donated to charitable organizations by the State
trust fund shall not be included as part of the match.
“(d)Clarification of Federal Law.—
Sellers of land, or of interests in land, to any State
trust fund are not, and shall not be considered by the Secretary
as, recipients or beneficiaries of Federal assistance.
“Not later than September 30, 1992, and annually thereafter, the Secretary of Agriculture shall prepare and submit, to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, a report concerning the operation of the program established under this chapter.
IMPLEMENTATION AND EFFECTIVE DATE.
This chapter shall become effective on October 1, 1990. Not later than December 30, 1990, the Secretary shall enter into an agreement with the State of Vermont to provide Federal assistance under this chapter to the State.
Not later than December 31, 1991, the Secretary of Agriculture shall publish in the Federal Register interim final regulations to implement this chapter. The regulations shall not require each State’s program to give a priority to the acquisition of land, or interests in land, that is subject to significant urban pressure.
COMPTROLLER GENERAL REPORTS.
“On February 15 of 1992, and on December 1 of each of the years 1992 through 1996, the Comptroller General of the United States shall report to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate, on whether the Secretary of Agriculture is complying with the requirements of this chapter. The report shall include information concerning loans guaranteed under this chapter and the steps the Secretary of Agriculture has taken to comply with this chapter.
SPECIAL RULES FOR ISSUANCE OF STOCK FOR 1992.
“The Secretary shall issue the stock required to be issued to the Secretary of [the] Treasury under this chapter with respect to the eligible State described in section 1465(c)(3)(A), for fiscal year 1992, on or before December 20, 1991.”
“For loan guarantees authorized under sections 1465–1469 of Public Law 101–624
[set out above] for the Agricultural Resource Conservation Demonstration Program, $10,000,000. For the cost, as defined in section 502 of the Congressional Budget Act of 1974 [2 U.S.C. 661a
], $3,644,000: Provided
, That, hereafter, no other funds are available in this or any other Act
to carry out this program, other than those provided for in advance in Appropriations Acts,
except for the cost of administering the program: Provided further
, That such limitation shall not apply with respect to the duties and obligations of the Secretary
regarding any loan or note guarantees, interest assistance agreements, or other understandings entered into during fiscal year 1992, and the personnel of the Department shall carry out the duties and obligations of the Secretary,
and any other requirements imposed on the Secretary
regarding such Agricultural Resource Conservation Demonstration Loan Program with respect to the loan made and guaranteed in 1992.”