Page:United States Statutes at Large Volume 99 Part 2.djvu/422

 99 STAT. 1532

PUBLIC LAW 99-198—DEC. 23, 1985 INTEREST RATE REDUCTION PROGRAM

Ante, p. 1531. Loans. 7 USC 1999. Contracts. Loans.

Contracts. Loans.

Contracts. Prohibition. Loans. 7 USC 1929. Prohibition.

SEC. 1320. Effective only for the period beginning on the date of enactment of this Act and ending September 30, 1988, the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding after the section added by section 1319 the following: "SEC. 351. (a) The Secretary shall establish and carry out in accordance with this section an interest rate reduction program for loans guaranteed under this title. "(b) Under such program, the Secretary shall enter into a contract with, and make payments to, a l ^ a l l y organized institution to reduce during the term of such contract the interest rate paid by a borrower on a guaranteed loan made by such institution if— "(1) the borrower— "(A) is unable to obtain sufficient credit elsewhere to finance the actual needs of the borrower at reasonable rates and terms, taking into consideration private and cooperative rates and terms for a loan for a similar purpose and period of time in the community in or near which the borrower resides; "(B) is otherwise unable to make payments on such loan in a timely manner; and "(C) has a total estimated cash income during the 12month period beginning on the date such contract is entered into (including all farm and nonfarm income) that will equal or exceed the total estimated cash expenses to be incurred by the borrower during such period (including all farm and nonfarm expenses); and "(2) the lender reduces during the term of such contract the annual rate of interest payable on such loan by a minimum percentage specified in such contract. "(c) In return for a contract entered into by a lender under subsection (b) for the reduction of the interest rate paid on a loan, the Secretary shall make pa3nnents to the lender in an amount equal to not more than 50 percent of the cost of reducing the annual rate of interest payable on such loan, except that such payments may not exceed the cost of reducing such rate by more than 2 percent. "(d) The term of a contract entered into under this section to reduce the interest rate on a guaranteed loan may not exceed the outstanding term of such loan, or 3 years, whichever is less. "(e)(1) Notwithstanding any other provision of this title, the Agricultural Credit Insurance Fund established under section 309 may be used by the Secretary to carry out this section. "(2) The total amount of funds lused by the Secretary to carry out this section may not exceed $490,000,000.". HOMESTEAD PROTECTION

Supra. 7 USC 2000.

SEC. 1321. The Consolidated Farm and Rural Development Act is amended by adding after the section added by section 1320 the following: "SEC. 352. (a) As used in this section: "(1) The term 'Administrator' means the Administrator of the Small Business Administration.

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