DISPOSITION OF SUITABLE PROPERTY.

SEC. 1813. DISPOSITION OF SUITABLE PROPERTY. (a) Holding Period.— The fourth sentence of section 335(c)(1) (7 U.S.C. 1985(c)(1)) is amended by striking “three years from the date of acquisition” and inserting “12 months from the date first published under paragraph (2)(D)”. (b) Random Selection Among Equally Qualified Applicants.— Section 335 (7 U.S.C. 1985) is amended— (1) in subsection (c)(2)(C), by inserting before the semicolon the following: “, except that if the committee determines that two or more applicants meet the loan eligibility criteria, the committee shall select between the qualified applicants on a random basis”; and (2) in subsection (e)(4)(C)— (A) by striking “shall, by majority vote,” and inserting “shall randomly”; and (B) by inserting before the period at the end the following: “, in accordance with subsection (c)(2)(B)(iii)”. (c) Property Subject to Borrower Purchase or Lease Option.— Section 335(e)(1)(A)(i) (7 U.S.C. 1985(e)(1)(A)(i)) is amended by striking “real property” and inserting “real farm or ranch property (including the principal residence of the borrower)”. (d) Right of First Refusal.— Section 335(e)(1)(A) (7 U.S.C. 1985(e)(1)(A)) is amended by adding at the end the following new clause: “(iv) In the case of real property described in clause (i) that was acquired by the Secretary before January 6, 1988, that is (or has104 STAT. 3822 been at any time during the 12-month period preceding the date of enactment of this clause) under lease to a person described in subparagraph (C), and that has not been conveyed (or contracted to be conveyed) by the Secretary prior to the date of enactment of this clause, the Secretary shall, during the 30-day period following the date of enactment of this clause, make the person an offer, to be held open for a period of 90 days, to purchase the property on the same terms and conditions that such offers are made in the case of property coming into inventory on or after the date of enactment of this clause.”. (e) Qualified Beginning Farmers or Ranchers.— (1) Suitable farmland.— Section 335(c)(2) (7 U.S.C. 1985(c)(2)) is amended— (A) by redesignating subparagraphs (A), (B), (C), and (D) as clauses (i), (ii), (iii), and (iv), respectively; and (B) by striking all that precedes clause (i) (as so redesignated by subparagraph (A) of this paragraph) and inserting the following: “(2) (A) Notwithstanding any other provision of law, the Secretary shall sell suitable farmland administered under this title to persons in the following order: “(i) Qualified beginning farmers or ranchers (as defined pursuant to section 343(a)(8)), as of the time immediately after such contract for sale or lease is entered into, as determined by the county committee. “(ii) Operators, as of the time immediately after such contract for sale or lease is entered into, of not larger than family sized farms, as determined by the county committee. “(B) In selling such land, the county committee shall—”. (2) Other property.— Section 335(e)(1)(C) (7 U.S.C. 1985(e)(1)(C)) is amended— (A) by redesignating clause (iv) as clause (v); and (B) by inserting after clause (iii) the following new clause: “(iv) Qualified beginning farmers or ranchers (as defined pursuant to section 343(a)(8)) as of the time immediately after such contract for sale or lease is entered into, of not larger than family-sized farm or ranching operations.”. (f) Indian Land in Inventory.— Section 335(e)(1)(D) (7 U.S.C. 1985(e)(1)(D)) is amended by adding at the end the following new clause: “(x) This subparagraph shall apply to all lands in the land inventory established under this title (as of the date of enactment of this clause) that were (immediately prior to such date) owned by an Indian borrower-owner described in clause (i) and that are situated within an Indian reservation (as defined in clause (ii)), regardless of the date of foreclosure or acquisition by the Secretary. The Secretary shall afford an opportunity to a tribal member, an Indian corporate entity, or the tribe to purchase or lease the real property as provided in clause (iii). If the right is not exercised or no expression of intent to exercise such right is received within 180 days after the date of enactment of this clause, the Secretary shall transfer the real property to the Secretary of the Interior as provided in clause (v).”. (g) Offering Price.— (1) In general.— Section 335(c)(2)(B)(ii) (7 U.S.C. 1985(c)(2)(B)(ii)), as amended by subsection (e)(i) of this section, is amended to read as follows: 104 STAT. 3823 “(ii) offer such land— “(I) for sales pursuant to subsection (e)(1)(C), at a price not greater than that which reflects the appraised market value of such farmland; and “(II) for all other sales, at a price not greater than that which reflects the fair market value of such land as determined by bids after advertising or by negotiated sale;”. (2) Conforming amendments.— Section 335(e)(4) (7 U.S.C. 1985(e)(4)) is amended— (A) by striking subparagraph (B); and (B) by redesignating subparagraph (C) as (B). (h) Conservation Easements on Wetlands on FmHA Inventory Property.— (1) In general.— Section 335 (7 U.S.C. 1985) is amended by adding at the end the following new subsection: “(g) (1) Subject to paragraphs (2) through (5), in the disposal of real property under this section, the Secretary shall establish perpetual wetland conservation easements to protect and restore wetlands or converted wetlands that exist on inventoried property, as determined by the Secretary in accordance with title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et seq.). “(2) In establishing the wetland conservation easements on land that is considered to be cropland as of the date of enactment of this subsection, the Secretary shall avoid, to the extent practicable, an adverse impact on the productivity of the croplands, as provided in this subsection. “(3) In order to avoid the adverse impact, the Secretary shall— “(A) not establish the wetland conservation easements with respect to wetlands that were converted prior to December 23, 1985, and that have been in cropland use, as determined by the Secretary, in excess of 10 percent of the existing cropland available for production of agricultural commodities on the particular parcel of inventoried property; “(B) not establish the wetland conservation easements with respect to wetlands that have been frequently planted to agricultural commodities and wetlands described in subparagraph (A), in excess of 20 percent of the existing cropland available for production of agricultural commodities on the particular parcel of inventoried property; “(C) ensure that the buffer area adjacent to the wetland is generally not more than 100 feet in average width; and “(D) ensure that access to other portions of the property for farming and other uses is provided. “(4) The wetland conservation easements shall be placed on wetlands that have a history of haying and grazing, as determined by the Secretary, except that in no case shall the quantity of the wetland subject to the easements exceed 50 percent of the existing forage lands on the parcel of inventoried property. All haying and grazing practices on the wetlands (including the timing and intensity of haying and grazing) shall conform to forage management standards designed to protect wetlands. “(5) If, despite the limitations contained in paragraph (3), wetland conservation easements established under paragraph (1) would prevent a particular parcel of inventoried property that is to be sold or leased to a borrower described in clause (i), (ii), or (iii) of subsection (e)(1)(C), or to a borrower who is a beginning farmer or rancher, from104 STAT. 3824 being a marketable agricultural production unit that is comparable to the parcel as acquired, the Secretary may— “(A) establish wetland conservation easements on wetland that was converted prior to December 23, 1985, in a quantity that is less than 10 percent of the existing croplands available for production of agricultural commodities on the particular parcel; and “(B) if the reduction provided in subparagraph (A) is not applicable, or is not sufficient to ensure that the particular parcel would be a marketable agricultural production unit, amend the wetland conservation easements established on the wetlands that have been frequently planted to agricultural commodities to permit the production of agricultural commodities (consistent with title XII of the Food Security Act of 1985) on the wetlands, to the extent necessary to maintain the parcel as a marketable agricultural production unit. “(6) The Secretary shall provide prior written notification to a borrower considering preservation loan servicing that a wetlands conservation easement may be placed on land for which the borrower is negotiating a lease option. “(7) The appraised value of the farm shall reflect the value of the land due to the placement of wetland conservation easements. “(8) Notwithstanding the limitations described under paragraphs (3) and (4), the limitations may be voluntarily, knowingly waived by any person with respect to real property described in paragraph (3) or (4).”. (2) Study and report on appropriate ceilings on the establishment of wetland conservation easements on existing cropland.— (A) Study.— Not later than January 31, 1991, the Administrator of the Farmers Home Administration shall study the appropriateness of the maximum percentages, in subparagraphs (A) and (B) of section 335(g)(3) of the Consolidated Farm and Rural Development Act, of the existing cropland available for production of agricultural commodities with respect to which perpetual wetland conservation easements are to be established under such section, taking into account— (i) the amount of land in the inventory of the Farmers Home Administration that may become subject to such an easement; and (ii) the costs and benefits associated with the making of such inventory land subject to such an easement. (B) Report.— Not later than January 31, 1991, the Administrator of the Farmers Home Administration 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 containing the recommendations of the Administrator as to the appropriate maximum percentages referred to in subparagraph (A) of this paragraph.