LIMITATION ON DIRECT OPERATING LOANS.

SEC. 611. LIMITATION ON DIRECT OPERATING LOANS. (a) In General.— Section 311 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941) is amended by striking subsection (c) and inserting the following: “(c) Direct Loans.— “(1) In general.— Subject to paragraph (3), the Secretary may make a direct loan under this subtitle only to a farmer or rancher who— “(A) is a qualified beginning farmer or rancher who has not operated a farm or ranch, or who has operated a farm or ranch for not more than 5 years; “(B) has not received a previous direct operating loan made under this subtitle; or “(C) has received a previous direct operating loan made under this subtitle during 6 or fewer years. “(2) Youth loans.— In this subsection, the term ‘direct operating loan’ shall not include a loan made to a youth under subsection (b). “(3) Transition rule.— If, as of the date of enactment of this paragraph, a farmer or rancher has received a direct operating loan under this subtitle during each of 4 or more previous years, the borrower shall be eligible to receive a direct operating loan under this subtitle during 3 additional years after the date of enactment of this paragraph.”. (b) Youth Enterprises Not Farming or Ranching.— Section 311(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(b)) is amended by adding at the end the following: “(4) Youth enterprises not farming or ranching.— The operation of an enterprise by a youth under this subsection shall not be considered the operation of a farm or ranch under this title.”