LINE-OF-CREDIT LOANS.

SEC. 614. LINE-OF-CREDIT LOANS. Section 316 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1946) is amended by adding at the end the following: “(c) Line-of-Credit Loans.— “(1) In general.— A loan made or guaranteed by the Secretary under this subtitle may be in the form of a line-of-credit loan. “(2) Term.— A line-of-credit loan under paragraph (1) shall terminate not later than 5 years after the date that the loan is made or guaranteed. “(3) Eligibility.— For purposes of determining eligibility for a farm operating loan under this subtitle, each year during which a farmer or rancher takes an advance or draws on a line-of-credit loan the farmer or rancher shall be considered to have received an operating loan for 1 year. 110 STAT. 1090 “(4) Termination of delinquent loans.— If a borrower does not pay an installment on a line-of-credit loan on schedule, the borrower may not take an advance or draw on the line-of-credit, unless the Secretary determines that— “(A) the borrower’s failure to pay on schedule was due to unusual conditions that the borrower could not control; and “(B) the borrower will reduce the line-of-credit balance to the scheduled level at the end of— “(i) the production cycle; or “(ii) the marketing of the borrower’s agricultural products. “(5) Agricultural commodities.— A line-of-credit loan may be used to finance the production or marketing of an agricultural commodity that— “(A) is eligible for a price support program of the Department of Agriculture; or “(B) was eligible for a price support program of the Department of Agriculture on the day before the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996.”.