DISPOSITION AND LEASING OF FARMLAND.

SEC. 610. DISPOSITION AND LEASING OF FARMLAND. (a) Classification of Property.— Section 335(c) (7 U.S.C. 1985(c)) is amended— (1) by inserting “(1)” after the subsection designation; (2) by inserting after the first sentence the following new sentence: “The County Committee shall classify or reclassify real property (including real property administered by the Secretary on the date of the enactment of this sentence) that is farmland, as being suitable for farming operation for such disposition unless the property, including property subdivided in accordance with subsection (e)(5), cannot be used to meet any of the purposes of section 303 (including being used as a start-up or add-on parcel of farmland).”; and (3) by adding at the end thereof the following new paragraph: “(2) Notwithstanding any other provision of law, the Secretary shall sell suitable farmland administered under this subtitle to 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. In selling such land, the county committee shall— “(A) grant a priority to persons eligible for loans under subtitle A, including individuals approved for, but who, as of the date of the enactment of this paragraph, have not yet received, such loans; “(B) offer suitable land at a price not greater than that which reflects the appraised market value of such land; “(C) select from among qualified applicants the applicant who has the greatest need for farm income and best meets the criteria for eligibility to receive loans under subtitle A; and “(D) publish or caused to be published three consecutive weekly announcements at least twice annually of the availability of such farmland, in at least one newspaper that is widely circulated in the county in which the land is located until the property is sold.”. (b) Disposition and Leasing.— Section 335(e) (7 U.S.C. 1985(e)) is amended— (1) by striking out paragraph (1) and inserting in lieu thereof the following new paragraph: “(1) (A) (i) During the 180-day period beginning on the date of acquisition, or during the applicable period under State law, the Secretary shall allow the borrower from whom the Secretary acquired real property used to secure any loan made to the borrower under this title (hereinafter referred to in this paragraph as the ‘borrower-owner’) to purchase or lease such property. “(ii) The period for the purchase or lease of real property described under clause (i), by a person described in clauses (i) or (ii) of subparagraph (C), shall expire 190 days after the date of acquisition, or sifter the applicable period under State law. “(iii) The rights regarding the purchase or lease of real property provided by this paragraph and accorded a person described in subparagraph (C) may be freely and knowingly waived by such person. “(B) Any purchase or lease under subparagraph (A) shall be on such terms and conditions as are established in regulations promulgated by the Secretary. 101 STAT. 1670 “(C) The Secretary shall give preference in the sale or lease, with option to purchase, of property that has been foreclosed, purchased, redeemed, or otherwise acquired by the Secretary to persons in the following order: “(i) The immediate previous borrower-owner of the acquired property. “(ii) If actively engaged in farming— “(I) the spouse or child of the previous borrower-owner; or “(II) a stockholder in the corporation, if the borrower-owner is a corporation held exclusively by members of the same family. “(iii) The immediate previous family size farm operator of such acquired property. “(iv) Operators (as of the time immediately after such sale or lease is entered into) of not larger than family-size farms. “(D) (i) If— “(I) the real property described in subparagraph (A)(i) is located within an Indian reservation, “(II) the borrower-owner is the Indian tribe that has jurisdiction over the reservation in which the real property is located or the borrower-owner is a member of such Indian tribe, and “(III) the period in which the right to purchase or lease such real property provided in clauses (i) and (ii) of subparagraph (A) has expired, the Secretary shall dispose of or administer the property only as provided for in this subparagraph. “(ii) For purposes of this subparagraph, the term ‘Indian reservation’ means all land located within the limits of any Indian reservation under the jurisdiction of the United States, notwithstanding the issuance of any patent, and, including rights-of-way running through the reservation; trust or restricted land located within the boundaries of a former reservation of a federally recognized Indian tribe in the State of Oklahoma; or all Indian allotments the Indian titles to which have not been extinguished if such allotments are subject to the jurisdiction of a federally recognized Indian tribe. “(iii) The Secretary shall, within 90 days after the expiration of the period for which the right to purchase or lease real property described in clause (i) is provided in clauses (i) and (ii) of subparagraph (A), afford an opportunity to purchase or lease the real property in accordance with the order of priority established under clause (iv) by the Indian tribe having jurisdiction over the Indian reservation within which the real property is located or, if no order of priority is established by such Indian tribe under clause (iv), in the following order: “(I) to an Indian member of the Indian tribe that has jurisdiction over the reservation within which the real property is located; “(II) to an Indian corporate entity; “(III) to such Indian tribe. “(iv) The governing body of any Indian tribe having jurisdiction over an Indian reservation may revise the order of priority provided in clause (iii) under which lands located within such reservation shall be offered for purchase or lease by the Secretary under clause (iii) and may restrict the eligibility for such purchase or lease to— “(I) persons who are members of such Indian tribe, 101 STAT. 1671 “(II) Indian corporate entities that are authorized by such Indian tribe to lease or purchase lands within the boundaries of such reservation, or “(III) such Indian tribe itself. “(v) If real property described in clause (i) is not purchased or leased under clause (iii) and the Indian tribe having jurisdiction over the reservation within which the real property is located is unable to purchase or lease the real property, the Secretary shall transfer the real property to the Secretary of the Interior who shall administer the real property as if the real property were held in trust by the United States for the benefit of such Indian tribe. From the rental income derived from the lease of the transferred real property, and all other income generated from the transferred real property, the Secretary of the Interior shall pay those State, county, municipal, or other local taxes to which the transferred real property was subject at the time of acquisition by the Secretary, until the earlier of— “(I) the expiration of the 4-year period beginning on the date on which the real property is so transferred, or “(II) such time as the lands are transferred into trust pursuant to clause (viii). “(vi) At any time any real property is transferred to the Secretary of the Interior under clause (v), the Secretary of Agriculture shall be deemed to have no further responsibility under this Act for collection of any amounts with regard to the farm program loan which had been secured by such real property, nor with regard to any lien arising out of such loan transaction, nor for repayments of any amount with regard to such loan transactions or liens to the Treasury of the United States, and the Secretary of the Interior shall be deemed to have succeeded to all right, title and interest of the Secretary of Agriculture in such real estate arising from the farm program loan transaction, including the obligation to remit to the Treasury of the United States, in repayment of the original loan, those amounts provided in clause (vii). “(vii) After the payment of any taxes which are required to be paid under clause (v), all remaining rental income derived from the lease of the real property transferred to the Secretary of the Interior under clause (v), and all other income generated from the real property transferred to the Secretary of the Interior under clause (v), shall be deposited as miscellaneous receipts in the Treasury of the United States until the amount deposited is equal to the lesser of— “(I) the amount of the outstanding lien of the United States against such real property, as of the date the real property was acquired by the Secretary; “(II) the fair market value of the real property, as of the date of the transfer to the Secretary of the Interior; or “(III) the capitalized value of the real property, as of the date of the transfer to the Secretary of the Interior. “(viii) When the total amount that is required to be deposited under clause (vii) with respect to any real property has been deposited into the Treasury of the United States, title to the real property shall be held in trust by the United States for the benefit of the Indian tribe having jurisdiction over the Indian reservation within which the real property is located. “(ix) Notwithstanding any other clause of this subparagraph, the Indian tribe having jurisdiction over the Indian reservation within 101 STAT. 1672which the real property described in clause (i) is located may, at any time after the real property has been transferred to the Secretary of the Interior under clause (v), offer to pay the remaining amount on the lien, or the fair market value of the real property, whichever is less. Upon payment of such amount, title to such real property shall be held by the United States in trust for the tribe and such trust or restricted lands that have been acquired by the Secretary under foreclosure or voluntary transfer under a loan made or insured under this title and transferred to an Indian person, entity, or tribe under the provisions of this subparagraph shall be deemed to have never lost trust or restricted status. “(E) The rights provided in this subsection shall be in addition to any such right of first refusal under the law of the State in which the property is located.”; (2) in paragraph (3)— (A) by striking out subparagraph (A); (B) by redesignating subparagraphs (B), (C), and (D), as subparagraphs (A), (B), and (O, respectively; (C) in subparagraph (B) (as so redesignated), by striking out “give special consideration to a previous owner or operator of such land if such owner or operator” and inserting in lieu thereof “determine if the lessee”; and (D) by adding at the end thereof the following new subparagraph: “(D) The Secretary may enter into a contract with a borrower of a farmer program loan made or insured under this title, to provide for the subsequent sale or lease of land that will be acquired from the borrower in the future, before the Secretary takes possession of such land.”; (3) by amending subparagraph (A) of paragraph (5) to read as follows: “(A) If the Secretary determines that farmland administered under this chapter is not suitable for sale or lease to persons eligible for a loan made or insured under subtitle A because such farmland is in a tract or tracts that the Secretary determines to be larger than that necessary for such eligible persons, the Secretary shall, to the greatest extent practicable, subdivide such land into tracts suitable for sale under subsection (c). Such land shall be subdivided into parcels of land the shape and size of which are suitable for farming, the value of which shall not exceed the individual loan limits as prescribed under section 305.”; (4) in paragraph (6)— (A) by striking out “and” at the end of subparagraph (A); (B) by striking out the period at the end of subparagraph (B) and inserting in lieu thereof “; and”; and (C) by adding at the end thereof the following new subparagraph: “(C) provide written notice reasonably calculated to inform the immediate previous owner or immediate previous family-size farm operator of such farmland, of the availability of such farmland.”; and (5) by adding at the end thereof the following new paragraphs: “(9) Denials of applications for or disputes over terms and conditions of a lease or purchase agreement under this section are appealable under section 333B. “(10) In the event of any conflict between any provision of this subsection and any provision of the law of any State providing a 101 STAT. 1673right of first refusal to the owner of farmland or the operator of a farm before the sale or lease of land to any other person, such provision of State law shall prevail.”.