Page:United States Statutes at Large Volume 110 Part 1.djvu/1111

 PUBLIC LAW 104-127—APR. 4, 1996 110 STAT. 1087 "(B) in the case of a loan that is used for multiple purposes, the portion of the loan that refinances the principal and interest due on a direct loan made under this title that is outstanding on the date the loan is guaranteed. " (6) BEGINNING FARMER LOANS GUARANTEED UP TO 95 PER- CENT. —The Secretary may guarantee not more than 95 percent of— "(A) a farm ownership loan for acquiring a farm or ranch to a borrower who is participating in the down pay- ment loan program under section 3ICE; or "(B) an operating loan to a borrower who is participating in the down payment loan program under section 310E that is made during the period that the borrower has a direct loan outstanding under this subtitle for acquiring a farm or ranch.". Subtitle B—Operating Loans SEC. 611. LIMITATION ON DIRECT OPERATING LOANS. (a) IN GENERAL.— Section 311 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941) is amended by striking subsection (c) and inserting the following: "(c) DIRECT LOANS.— "(1) IN GENERAL.— Subject to paragraph (3), the Secretary may make a direct loan under this subtitle only to a farmer or rancher who— "(A) is a qualified beginning farmer or rancher who has not operated a farm or ranch, or who has operated a farm or ranch for not more than 5 years; "(B) has not received a previous direct operating loan made under this subtitle; or "(C) has received a previous direct operating loan made under this subtitle during 6 or fewer years. "(2) YOUTH LOAJ^JS.—In this subsection, the term 'direct operating loan' shall not include a loan made to a youth under subsection (b). "(3) TRANSITION RULE. —If, as of the date of enactment of this paragraph, a farmer or rancher has received a direct operating loan under this subtitle during each of 4 or more previous years, the borrower shall be eligible to receive a direct operating loan under this subtitle during 3 additional years after the date of enactment of this paragraph.". (b) YOUTH ENTERPRISES NOT FARMING OR RANCHING.— Section 311(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(b)) is amended by adding at the end the following: " (4) YOUTH ENTERPRISES NOT FARMING OR RANCHING. — The operation of an enterprise by a youth under this subsection shall not be considered the operation of a farm or ranch under this title.". SEC. 612. PURPOSES OF OPERATING LOANS. (a) IN GENERAL.— Section 312 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1942) is amended to read as follows:

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