H.R. 6169

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6169 Introduced in House (IH)]

<DOC>

119th CONGRESS
1st Session
H. R. 6169

To amend the Consolidated Farm and Rural Development Act to reform farm 
loans, to amend the Department of Agriculture Reorganization Act of 
1994 to reform the National Appeals Division process, and for other 
purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

November 20, 2025

Ms. Adams (for herself and Ms. McClellan) introduced the following 
bill; which was referred to the Committee on Agriculture

_______________________________________________________________________

A BILL

To amend the Consolidated Farm and Rural Development Act to reform farm 
loans, to amend the Department of Agriculture Reorganization Act of 
1994 to reform the National Appeals Division process, 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 ``Fair Credit for Farmers Act''.

SEC. 2. DEFERMENT OF PAYMENTS FOR BORROWERS OF FARM LOANS.

(a) Definitions.--In this section:
(1) Covered producer.--The term ``covered producer'' 
means--
(A) a limited resource farmer or rancher (as 
defined in section 718.2 of title 7, Code of Federal 
Regulations (as in effect on the date of enactment of 
this Act));
(B) a socially disadvantaged farmer or rancher (as 
defined in section 2501(a) of the Food, Agriculture, 
Conservation, and Trade Act of 1990 (7 U.S.C. 
2279(a)));
(C) a beginning farmer or rancher (as defined in 
that section); and
(D) a veteran farmer or rancher (as defined in that 
section).
(2) Eligible borrower.--The term ``eligible borrower'' 
means a borrower that is a farmer or rancher that is--
(A) delinquent, as described in the definition of 
the term ``delinquent borrower'' in section 761.2(b) of 
title 7, Code of Federal Regulations (as in effect on 
the date of enactment of this Act); or
(B) financially distressed, as described in the 
definition of the term ``financially distressed 
borrower'' in section 761.2(b) of title 7, Code of 
Federal Regulations (as in effect on the date of 
enactment of this Act).
(3) Farm loan.--The term ``farm loan'' means a direct or 
guaranteed--
(A) farm ownership loan under subtitle A of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 
1922 et seq.);
(B) operating loan under subtitle B of that Act (7 
U.S.C. 1941 et seq.); or
(C) emergency loan under subtitle C of that Act (7 
U.S.C. 1961 et seq.).
(4) Secretary.--The term ``Secretary'' means the Secretary 
of Agriculture.
(b) Deferment of Payments on Direct Farm Loans.--
(1) In general.--The Secretary shall--
(A) defer payments of principal and interest due on 
direct farm loans by eligible borrowers during the 2-
year period beginning on the date of enactment of this 
Act; and
(B) extend by 2 years the maturity date and 
repayment period of each direct farm loan the payments 
on which are deferred under subparagraph (A).
(2) Exclusion.--Paragraph (1) does not apply to a direct 
farm loan the term of which is 12 months or less.
(3) Authority to exceed loan maturity dates.--In extending 
a date under paragraph (1)(B), the Secretary may exceed by not 
more than 2 years--
(A) the maximum period of repayment described in 
section 307 of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1927) for a farm ownership 
loan under subtitle A of that Act (7 U.S.C. 1922 et 
seq.);
(B) the maximum period of repayment described in 
section 316(b) of that Act (7 U.S.C. 1946(b)) for an 
operating loan under subtitle B of that Act (7 U.S.C. 
1941 et seq.); and
(C) the maximum period of repayment described in 
section 324(d) of that Act (7 U.S.C. 1964(d)) for an 
emergency loan under subtitle C of that Act (7 U.S.C. 
1961 et seq.).
(c) Interest Rate During Deferral.--The Secretary shall modify each 
direct farm loan of an eligible borrower that is outstanding as of the 
date of enactment of this Act such that the interest rate on all 
remaining principal of the farm loan is 0.125 percent during the 2-year 
period beginning on that date of enactment.
(d) Waiver of Guaranteed Farm Loan Fees for Covered Producers.--
(1) In general.--The Secretary shall require lenders of 
guaranteed farm loans to covered producers to waive guarantee 
fees (as described in section 762.130(d)(4) of title 7, Code of 
Federal Regulations (as in effect on the date of enactment of 
this Act)) on those loans during the period--
(A) beginning on the date of enactment of this Act; 
and
(B) ending not earlier than 2 years after that date 
of enactment.
(2) Extension.--The Secretary may extend a deadline under 
paragraph (1)(B) by an additional 180 days if the Secretary 
determines the extension to be necessary.

SEC. 3. FARM LOAN REFORM.

(a) General Reforms.--
(1) In general.--Subtitle D of the Consolidated Farm and 
Rural Development Act is amended by inserting after section 374 
(7 U.S.C. 2008i) the following:

``SEC. 375. FARMER PROGRAM LOAN REFORM.

``(a) Definitions.--In this section:
``(1) Adverse decision.--The term `adverse decision' has 
the meaning given the term in section 271 of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 6991).
``(2) Principal residence.--The term `principal residence' 
means the principal residence (as determined by the Secretary) 
of a borrower of a farmer program loan, including a residence 
and not more than 10 acres of adjoining land possessed and 
occupied by the borrower.
``(b) Determination Letters and Adverse Decisions.--
``(1) In general.--In the case of any adverse decision 
relating to a farmer program loan, a Farm Service Agency 
program benefit, or the noninsured crop disaster assistance 
program established by section 196 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 U.S.C. 7333), the 
Secretary shall include in a determination letter provided to 
the applicant, to the maximum extent practicable--
``(A) a description of each reason known, or that 
reasonably should have been known, to the Secretary for 
that adverse decision;
``(B) a reference to each regulation and each 
relevant instruction in the Farm Loan Programs 
handbook, the Noninsured Crop Disaster Assistance 
Program handbook, or any other appropriate handbook 
published by the Farm Service Agency; and
``(C) instructions for accessing the Electronic 
Code of Federal Regulations and the handbooks described 
in subparagraph (B) online.
``(2) Effect of failure to state reasons.--If the Secretary 
issues any adverse decision relating to an application for a 
farmer program loan, a Farm Service Agency program benefit, or 
the noninsured crop disaster assistance program established by 
section 196 of the Federal Agriculture Improvement and Reform 
Act of 1996 (7 U.S.C. 7333) and does not include in a 
determination letter provided to the applicant a reason known 
or which should have reasonably been known to the Secretary for 
that adverse decision, the Secretary may not subsequently issue 
an adverse decision to that applicant on the basis of the same 
reason, known or which should have reasonably been known to the 
Secretary, unless the circumstances of the applicant have 
substantially changed since the issuance of the prior adverse 
decision.
``(c) Collateralization.--
``(1) Origination.--The Secretary may secure a direct 
farmer program loan with a principal residence only if the 
total value of other assets available to secure the farmer 
program loan does not provide adequate security (as defined in 
section 761.2(b) of title 7, Code of Federal Regulations (as in 
effect on the date of enactment of the Fair Credit for Farmers 
Act)) for the loan.
``(2) Partial release of principal residence security.--In 
the case of a farmer program loan secured in part by a 
principal residence, the Secretary shall initiate a partial 
release of the principal residence as security in accordance 
with subpart H of part 765 of title 7, Code of Federal 
Regulations (as in effect on the date of enactment of the Fair 
Credit for Farmers Act), without any action required by the 
borrower, when the total value of other assets securing the 
farmer program loan is equal to 100 percent of the remaining 
loan amount.
``(3) Loan servicing.--
``(A) In general.--In the case of a farmer program 
loan borrower who is delinquent prior to restructuring 
the farmer program loan, the borrower shall execute and 
provide to the Secretary a lien on assets necessary to 
achieve not more than 100 percent collateralization of 
the loan value.
``(B) Best lien.--Except as provided in section 
764.106 of title 7, Code of Federal Regulations (as in 
effect on the date of enactment of the Fair Credit for 
Farmers Act), the Secretary shall take the best lien 
obtainable on assets described in subparagraph (A), 
subject to the condition that a primary residence shall 
be the last option available to the Secretary to 
achieve 100 percent collateralization of the loan 
value.
``(4) Prohibition on additional security.--The Secretary 
may not secure a direct farmer program loan with any property 
that provides security in excess of the amount of security 
value equal to the loan amount.
``(d) Eligibility Requirements.--The Secretary shall not impose any 
limitation relating to the number of years in which a farmer program 
loan may be closed by a borrower.''.
(2) Conforming amendment.--Section 196(b) of the Federal 
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7333(b)) is amended by adding at the end the following:
``(5) Adverse decisions.--In the case of an adverse 
decision relating to an application under this subsection, 
section 375(b) of the Consolidated Farm and Rural Development 
Act shall apply.''.
(b) Farm Loan Eligibility.--
(1) Persons eligible for direct farm ownership loans.--
Section 302(b) of the Consolidated Farm and Rural Development 
Act (7 U.S.C. 1922(b)) is amended--
(A) by striking paragraph (1) and inserting the 
following:
``(1) In general.--The Secretary may make a direct loan 
under this subtitle only to a farmer or rancher who has at 
least 1 year of experience substantially participating in the 
management and business operations of a farm or ranch, as 
determined by the Secretary.''; and
(B) by striking paragraphs (3) and (4) and 
inserting the following:
``(3) Waiver authority.--In the case of a qualified 
beginning farmer or rancher, the Secretary may waive the 1-year 
requirement described in paragraph (1) if the qualified 
beginning farmer or rancher--
``(A) has an established relationship with an 
individual who has experience in farming or ranching, 
or with a local farm or ranch operator or organization, 
approved by the Secretary, that is committed to 
mentoring the qualified beginning farmer or rancher; or
``(B) has other acceptable education or experience 
for an appropriate period of time, as determined by the 
Secretary.''.
(2) Persons eligible for direct farm operating loans.--
Section 311 of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1941) is amended by striking subsection (c).
(c) Refinancing of Debt With Farm Loans.--
(1) Allowed purposes of farm ownership loans.--Section 
303(a)(1) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1923(a)(1)) is amended by striking subparagraph (E) and 
inserting the following:
``(E) refinancing the indebtedness of the farmer or 
rancher, if the farmer or rancher--
``(i) has used a direct loan under this 
subtitle to refinance indebtedness not more 
than 4 times previously; and
``(ii) is refinancing a debt obtained from 
a creditor other than the Secretary, including 
a guaranteed loan.''.
(2) Allowed purposes of direct operating loans.--Section 
312(a) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1942(a)) is amended by striking paragraph (9) and 
inserting the following:
``(9) refinancing the indebtedness of a borrower; or''.
(d) Effect of Preferred Lender Certification.--Section 339(d)(4)(B) 
of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1989(d)(4)(B)) is amended--
(1) by striking ``institutions to'' and inserting the 
following: ``institutions--
``(i) to''; and
(2) in clause (i) (as so designated)--
(A) by striking ``subsection relating'' and 
inserting ``subsection, relating'';
(B) by striking ``worthiness, the'' and inserting 
``worthiness or the''; and
(C) by striking ``collection and liquidation of 
loans, and to'' and inserting the following: ``or 
collection of loans; and
``(ii) to''.
(e) Loan Fund Set-asides for Beginning Farmers and Ranchers.--
Section 346(b)(2) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1994(b)(2)) is amended--
(1) in subparagraph (A)--
(A) in clause (i)(II), by inserting ``, to the 
extent practicable'' after ``April 1 of the fiscal 
year''; and
(B) in clause (iii), by inserting ``, to the extent 
practicable'' after ``September 1 of the fiscal year''; 
and
(2) in subparagraph (B)(iii), by inserting ``, to the 
extent practicable'' after ``April 1 of the fiscal year''.
(f) Removal of Eligibility Restriction Based on Previous Debt 
Write-down or Other Loss.--Section 373 of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2008h) is amended--
(1) in subsection (b)(2)(A)--
(A) by striking clause (i);
(B) in clause (ii), by striking ``chapters 11, 12, 
or 13 of Title 11 of the'' and inserting ``chapter 11, 
12, or 13 of title 11,''; and
(C) by redesignating clauses (ii) and (iii) as 
clauses (i) and (ii), respectively; and
(2) by striking subsection (c) and inserting the following:
``(c) Prohibition on Eligibility Restriction Based on Debt Write-
down or Other Loss.--The Secretary shall not restrict the eligibility 
of a borrower for a farm ownership or operating loan under subtitle A 
or B based on a previous debt write-down or other loss to the 
Secretary.''.
(g) Equitable Relief.--
(1) In general.--Section 366 of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2008a) is amended--
(A) in subsection (a)--
(i) in paragraph (1), by striking ``(1) 
received'' and inserting ``(1)(A) received'';
(ii) in paragraph (2)--
(I) by striking the period at the 
end and inserting ``; or''; and
(II) by striking ``(2) the 
Secretary'' and inserting ``(B) the 
Secretary''; and
(iii) by adding at the end the following:
``(2)(A) received a benefit under any other program 
administered by an agency (as defined in section 271 of the 
Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 
6991)); and
``(B) the Secretary determines is not in compliance with 
the requirements of the provisions of law that authorize that 
program.'';
(B) in subsection (b)(2), by inserting ``, 
including having made management or financial decisions 
for the farming or ranching operation of the farmer or 
rancher that were detrimental due to the erroneous 
nature of an official communication from the Department 
of Agriculture, regardless of whether a financial 
benefit was received or only promised'' before the 
period at the end;
(C) in subsection (c)(1), by striking ``(a)(2)'' 
and inserting ``(a)(1)(B)'';
(D) in subsection (e), by striking ``section'' in 
the matter preceding paragraph (1) and all that follows 
through ``shall not be'' in paragraph (2) and inserting 
``section shall be''; and
(E) by adding at the end the following:
``(f) Authority of National Appeals Division Hearing Officers.--
``(1) In general.--A hearing officer (as defined in section 
271 of the Department of Agriculture Reorganization Act of 1994 
(7 U.S.C. 6991)) may provide equitable relief under this 
section.
``(2) Review.--The Secretary may review a decision of a 
hearing officer (as so defined) to grant equitable relief 
pursuant to paragraph (1).
``(g) Cases in Which an Applicant Is Eligible.--
``(1) Definitions.--In this subsection:
``(A) Adverse decision.--The term `adverse 
decision' has the meaning given the term in section 271 
of the Department of Agriculture Reorganization Act of 
1994 (7 U.S.C. 6991).
``(B) Applicant.--The term `applicant' means a 
person who submitted to, or attempted to submit to, the 
Farm Service Agency an application for--
``(i) a direct farm ownership, operating, 
or emergency loan under this title; or
``(ii) a Farm Service Agency program 
benefit.
``(2) Denial based on feasibility.--
``(A) In general.--A loan applicant shall be 
eligible for equitable relief under this section if--
``(i) the National Appeals Division 
determines that the Farm Service Agency was in 
error in denying the loan, benefit, or payment 
based on feasibility;
``(ii) the National Appeals Division has 
confirmed the accuracy of the projected income 
and projected expenses described in the 
original application submitted by the 
applicant; and
``(iii) the original application submitted 
by the applicant is no longer feasible due to 
the delay caused by the erroneous denial by the 
Farm Service Agency and the length of the 
appeals process.
``(B) Amount.--The amount of equitable relief under 
subparagraph (A) shall be the amount equal to the 
difference between--
``(i) the projected income described in the 
application; and
``(ii) the projected expenses described in 
the application.
``(3) Denial based on eligibility.--A loan applicant shall 
be eligible for equitable relief under this section if--
``(A) feasibility was not listed as a reason for an 
adverse decision in the determination letter provided 
to the applicant;
``(B) eligibility was listed as a reason for an 
adverse decision in the determination letter provided 
to the applicant;
``(C) the National Appeals Division determines that 
the Farm Service Agency was in error in denying the 
loan based on eligibility; and
``(D) the original application submitted by the 
applicant is no longer feasible due to the delay caused 
by the erroneous denial by the Farm Service Agency and 
the length of the appeals process.
``(4) Subsequently withdrawn adverse decision.--An 
applicant shall be eligible for equitable relief under this 
section if--
``(A) the Farm Service Agency issued an adverse 
decision on an application that the Farm Service Agency 
subsequently withdrew; and
``(B) the original application submitted by the 
applicant is no longer feasible due to the delay caused 
by the adverse decision.
``(5) Promised program benefits not received.--An applicant 
shall be eligible for equitable relief under this section if--
``(A) the Farm Service Agency indicated in an 
official communication made after the date of enactment 
of this subsection that the applicant could expect the 
loan, benefit, or payment, and then reversed its 
decision; and
``(B) the applicant acted in good faith.''.
(2) Application.--Subsection (g) of section 366 of the 
Consolidated Farm and Rural Development Act (7 U.S.C. 2008a)--
(A) applies only with respect to applications 
submitted or attempted to be submitted, and decisions 
or communications made, after the date of enactment of 
this Act; and
(B) does not apply retroactively with respect to--
(i) any application submitted or attempted 
to be submitted, or decision or communication 
made, before that date of enactment; or
(ii) any action, inaction, or consequence 
resulting from a decision or communication made 
before that date of enactment.

SEC. 4. NATIONAL APPEALS DIVISION REFORM.

(a) Burden of Proof.--Section 277(c)(4) of the Department of 
Agriculture Reorganization Act of 1994 (7 U.S.C. 6997(c)(4)) is 
amended--
(1) by striking ``The appellant'' and inserting the 
following:
``(A) In general.--Except as provided in 
subparagraph (B), the appellant''; and
(2) by adding at the end the following:
``(B) Appellants below income threshold.--
``(i) In general.--In the case of an 
appellant described in clause (ii), the agency 
shall bear the burden of proving by substantial 
evidence that the adverse decision of the 
agency was not erroneous.
``(ii) Appellants described.--An appellant 
referred to in clause (i) is an appellant--
``(I) the adjusted gross income of 
which for the previous year is not more 
than $300,000; or
``(II) the average annual adjusted 
gross income of which for the previous 
5-year period is not more than 
$300,000.''.
(b) Implementation.--Section 280 of the Department of Agriculture 
Reorganization Act of 1994 (7 U.S.C. 7000) is amended--
(1) by redesignating subsection (b) as subsection (c); and
(2) by inserting after subsection (a) the following:
``(b) Requirement.--In implementing a final determination in 
accordance with subsection (a), the head of an agency shall use the 
information used by the Division to make the final determination, 
without requiring additional information on which implementation would 
be conditioned, except as otherwise provided in the decision letter 
relating to the final determination.''.
<all>