S. 3936

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 3936 Introduced in Senate (IS)]

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119th CONGRESS
2d Session
S. 3936

To amend the Consolidated Farm and Rural Development Act to expand 
eligibility for guaranteed and direct loans to individuals or entity 
members that hold at least a 50 percent interest and that are or will 
become qualified operators of the farm real estate acquired, improved, 
or supported with farm ownership, operating, or emergency loans, and 
for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

February 26, 2026

Mr. Tuberville (for himself and Mr. Husted) introduced the following 
bill; which was read twice and referred to the Committee on 
Agriculture, Nutrition, and Forestry

_______________________________________________________________________

A BILL

To amend the Consolidated Farm and Rural Development Act to expand 
eligibility for guaranteed and direct loans to individuals or entity 
members that hold at least a 50 percent interest and that are or will 
become qualified operators of the farm real estate acquired, improved, 
or supported with farm ownership, operating, or emergency loans, 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 ``USDA Loan Modernization Act''.

SEC. 2. PERSONS ELIGIBLE FOR REAL ESTATE LOANS.

Section 302(a) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1922(a)) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A), by 
striking ``a majority'' and inserting ``at least a 50 
percent''; and
(B) in subparagraph (C), by striking ``a majority'' 
and inserting ``at least a 50 percent''; and
(2) in paragraph (2), by striking subparagraphs (A) and (B) 
and inserting the following:
``(A) Eligibility of qualified operators.--
Qualified operators, as defined by the Secretary, shall 
be considered to meet the operator requirement of 
paragraph (1).
``(B) Eligibility of certain operating-only 
entities.--An applicant that is or will become only the 
operator of farm real estate acquired, improved, or 
supported with funds under this subtitle shall be 
considered to meet the owner-operator requirements of 
paragraph (1) if 1 or more of the individuals who is an 
owner of the farm real estate owns at least 50 percent 
(or such other percentage as the Secretary determines 
is appropriate) of the applicant.
``(C) Eligibility of certain embedded entities.--An 
entity that is an owner-operator described in paragraph 
(1), or an operator described in subparagraph (B) of 
this paragraph that is owned, in whole or in part, by 1 
or more other entities, shall be considered to meet the 
direct ownership requirement imposed under paragraph 
(1) if at least 75 percent of the total ownership 
interests of the embedded entity, or of the other 
entities, is owned, directly or indirectly, by 
qualified operators of the farm acquired, improved, or 
supported with funds under this subtitle.''.

SEC. 3. PERSONS ELIGIBLE FOR OPERATING LOANS.

Section 311(a) of the Consolidated Farm and Rural Development Act 
(7 U.S.C. 1941(a)) is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A), by 
striking ``a majority'' and inserting ``at least a 50 
percent''; and
(B) in subparagraph (C), by striking ``a majority'' 
and inserting ``at least a 50 percent''; and
(2) by amending paragraph (2) to read as follows:
``(2) Special rules.--
``(A) Eligibility of qualified operators.--
Qualified operators, as defined by the Secretary, shall 
be considered to meet the operator requirement of 
paragraph (1).
``(B) Eligibility of certain operating-only 
entities.--An entity that is an operator described in 
paragraph (1) that is owned, in whole or in part, by 
other entities, shall be considered to meet the direct 
ownership requirement imposed under paragraph (1) if at 
least 75 percent of the total ownership interests of 
the embedded entity, or of the other entities, is 
owned, directly or indirectly, by qualified operators 
of the farm improved or supported with funds under this 
subtitle.''.

SEC. 4. PERSONS ELIGIBLE FOR EMERGENCY LOANS.

Section 321 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1961) is amended--
(1) in subsection (a)--
(A) in the first sentence--
(i) by striking ``(A)'' and inserting 
``(i)'';
(ii) by striking ``(B)'' and inserting 
``(ii)'';
(iii) by striking ``(1)'' and inserting 
``(A)'';
(iv) by striking ``(2)'' and inserting 
``(B)''; and
(v) by striking ``a majority'' each place 
it appears and inserting ``at least a 50 
percent'';
(B) in the second sentence, by striking ``this 
subsection'' and inserting ``this paragraph'';
(C) by striking the fifth sentence; and
(D) by adding at the end the following:
``(2) Special rules.--
``(A) Eligibility of qualified operators.--
Qualified operators, as defined by the Secretary, shall 
be considered to meet the operator requirement of 
paragraph (1).
``(B) Eligibility of certain operating-only 
entities.--An applicant that is or will become only the 
operator of farm real estate acquired, improved, or 
supported with funds under this subtitle shall be 
considered to meet the owner-operator requirements of 
paragraph (1) if 1 or more of the individuals who is an 
owner of the real estate owns at least 50 percent (or 
such other percentage as the Secretary determines is 
appropriate) of the applicant.
``(C) Eligibility of certain embedded entities.--An 
entity that is an owner-operator described in paragraph 
(1), or an operator described in subparagraph (B) of 
this paragraph that is owned, in whole or in part, by 1 
or more other entities, shall be considered to meet the 
direct ownership requirement imposed under paragraph 
(1) if at least 75 percent of the total ownership 
interests of the embedded entity, or of the other 
entities, is owned, directly or indirectly, by 
qualified operators of the farm acquired, improved, or 
supported with funds under this subtitle.''; and
(2) by striking the section designation and all that 
follows through ``shall make and insure'' in the first sentence 
of the matter preceding paragraph (2) of subsection (a) and 
inserting the following:

``SEC. 321. ELIGIBILITY FOR LOANS.

``(a) In General.--
``(1) Eligibility requirements.--The Secretary shall make 
and insure''.
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