BUSINESS AND INDUSTRY LOAN MODIFICATIONS.

SEC. 6017. BUSINESS AND INDUSTRY LOAN MODIFICATIONS. Section 310B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is amended by striking subsection (g) and inserting the following: “(g) Business and Industry Direct and Guaranteed Loans.— “(1) Definition of business and industry loan.—In this subsection, the term “business and industry loan’ means a business and industry direct or guaranteed loan that is made or guaranteed by the Secretary under subsection (a)(1). “(2) Loan guarantees for the purchase of cooperative stock.—116 STAT. 360 “(A) In general.—The Secretary may guarantee a business and industry loan to individual farmers or ranchers for the purpose of purchasing capital stock of a farmer or rancher cooperative established for the purpose of processing an agricultural commodity. “(B) Processing contracts during initial period.—A cooperative described in subparagraph (A) for which a farmer or rancher receives a guarantee to purchase stock under subparagraph (A) may contract for services to process agricultural commodities, or otherwise process value-added agricultural products, during the 5-year period beginning on the date of the startup of the cooperative in order to provide adequate time for the planning and construction of the processing facility of the cooperative. “(C) Financial information.—Financial information required by the Secretary from a farmer or rancher as a condition of making a business and industry loan guarantee under this paragraph shall be provided in the manner generally required by commercial agricultural lenders in the area. “(3) Loans to cooperatives.— “(A) In general.—The Secretary may make or guarantee a business and industry loan to a cooperative organization that is headquartered in a metropolitan area if the loan is used for a project or venture described in subsection (a) that is located in a rural area or a loan guarantee that meets the requirements of paragraph (6). “(B) Refinancing.—A cooperative organization that is eligible for a business and industry loan shall be eligible to refinance an existing business and industry loan with a lender if— “(i) the cooperative organization— “(I) is current and performing with respect to the existing loan; and “(II) is not, and has not been, in payment default, or the collateral of which has not been converted, with respect to the existing loan; and “(ii) there is adequate security or full collateral for the refinanced loan. “(4) Loan appraisals.—The Secretary may require that any appraisal made in connection with a business and industry loan be conducted by a specialized appraiser that uses standards that are similar to standards used for similar purposes in the private sector, as determined by the Secretary. “(5) Fees.—The Secretary may assess a 1-time fee for any guaranteed business and industry loan in an amount that does not exceed 2 percent of the guaranteed principal portion of the loan. “(6) Loan guarantees in nonrural areas.— “(A) In general.—The Secretary may guarantee a business and industry loan to a cooperative organization for a facility that is not located in a rural area if— “(i) the primary purpose of the loan guarantee is for a facility to provide value-added processing for agricultural producers that are located within 80 miles of the facility;116 STAT. 361 “(ii) the applicant demonstrates to the Secretary that the primary benefit of the loan guarantee will be to provide employment for residents of a rural area; and “(iii) the total amount of business and industry loans guaranteed for a fiscal year under this paragraph does not exceed 10 percent of the business and industry loans guaranteed for the fiscal year under subsection (a)(1). “(B) Principal amounts.—The principal amount of a business and industry loan guaranteed under this paragraph may not exceed $25,000,000. “(7) Intangible assets.—In determining whether a cooperative organization is eligible for a guaranteed business and industry loan, the Secretary may consider the market value of a properly appraised brand name, patent, or trademark of the cooperative. “(8) Limitations on loan guarantees for cooperative organizations.— “(A) Principal amount.— “(i) In general.—Subject to clause (ii), the principal amount of a business and industry loan made to a cooperative organization and guaranteed under this subsection shall not exceed $40,000,000. “(ii) Use.—To be eligible for a guarantee under this subsection for a business and industry loan made to a cooperative organization, the principal amount of the any such loan in excess of $25,000,000 shall be used to carry out a project— “(I) in a rural area; and “(II) that provides for the value-added processing of agricultural commodities. “(B) Applications.—If a cooperative organization submits an application for a guarantee under this subsection of a business and industry loan with a principal amount that is in excess of $25,000,000, the Secretary— “(i) shall review and, if appropriate, approve the application; and “(ii) may not delegate the approval authority. “(C) Maximum amount.—The total amount of business and industry loans made to cooperative organizations and guaranteed for a fiscal year under this subsection with principal amounts that are in excess of $25,000,000 may not exceed 10 percent of the business and industry loans guaranteed for the fiscal year under subsection (a)(1).”.