Refinancing of guaranteed loans into direct loans

(a) In general Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture, acting through the Administrator of the Farm Service Agency (referred to in this section as the Secretary), shall promulgate regulations allowing certain loans guaranteed by the Farm Service Agency to be refinanced into direct loans issued by the Farm Service Agency, in accordance with this section. (b) Requirements (1) In general The regulations promulgated under subsection (a) shall provide that a guaranteed loan described in that subsection may be refinanced into a direct loan described in that subsection only if the Secretary determines that— (A) the guaranteed loan is distressed; (B) the borrower on that guaranteed loan has attempted to work with the lender and has been unsuccessful; (C) a reasonable chance for the success of the operation financed by the guaranteed loan exists; and (D) all other criteria established by the Secretary for purposes of this section to protect taxpayer funds and the loan programs of the Farm Service Agency have been satisfied. (2) Reasonable chance of success For purposes of paragraph (1)(C), the Secretary may determine that a reasonable chance for the success of an operation exists if the Secretary determines that— (A) all relevant problems with the operation financed by the guaranteed loan— (i) have been identified; and (ii) can be corrected; and (B) on correction of those problems, the operation can achieve, or be returned to, a sound financial basis. (c) No effect on subsidies In carrying out this section, the Secretary shall ensure that the refinancing of guaranteed loans into direct loans has no impact on the subsidy rate of— (1) loans guaranteed by the Farm Service Agency; or (2) direct loans issued by the Farm Service Agency. (d) Loan programs In making direct loans pursuant to the regulations promulgated under subsection (a), the Secretary may refinance a loan guaranteed under 1 program of the Farm Service Agency into a direct loan issued under another program of the Farm Service Agency, as the Secretary determines to be appropriate and in accordance with the laws applicable to the program under which the new direct loan is issued. (e) Maximum amount of direct refinancing loans A direct loan issued by the Farm Service Agency pursuant to the regulations promulgated under subsection (a) shall be subject to any otherwise applicable limitation on the maximum amount of a direct loan issued by the Farm Service Agency, including, if applicable, the limitations described in— (1) section 305 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1925); and (2) section 313 of that Act (7 U.S.C. 1943).