Sheep Center Act

Sec. 374

CONSOLIDATED FARM AND RURAL DEVELDPMENT ACT

1-110

SEC. 374. [7 U.S.C. 2008iJ SHORT FORM CERTIFICATION OF FARM PROGRAM BORROWEX COMPLIANCE.

The Secretary shall develop and utilize a consolidated short
form for farm program borrowers to use in certifying compliance
with any applicable provision of law (including a regulation) that
serves as an eligibility prerequisite for a loan made under this title.
SEC. 375. L7 U.S.C. 2008jJ NATIONAL SHEEP INDUSTRY IMPROVEMENT
CENTER.

(a) DEFINITIONS.--Inthis section:
(1) BoARD.-T~~term "Board" means the Board of Directors established under subsection (0.
(2) CENTER.-T~~term "Center" means the National
Sheep Industry Improvement Center established under subsection (b).
(3) ELIGIBLEENTITY.--T~~term "eligible entity" Aeans an
entity that promotes the betterment of the United States sheep
or goat industries and that is(A) a public, private, or cooperative organization;
(B) an association, including a corporation not operated for profit;
(C) a federally recognized Indian Tribe; or
(D) a public or quasi-public agency.
(4) FUND.-The term "Fund" means the National Sheep Industry Improvement Center Revolving Fund established under
subsection (el.
(5) INTERMEDIARY.-The
term "intermediary" means a financial institution receiving Center funds for establishing a revolving fund and relending to an eligible entity.
(b) ESTABLISHMENT
OF CENTER.-T~~
Secretary shall establish
a National Sheep Industry Improvement Center.
(c) PURPOSES.--The purposes of the Center shall be to(1) promote strategic development activities and collaborative efforts by private and State entities to maximize the impact of Federal assistance to strengthen and enhance production and marketing of sheep or goat products in the United
States;
(2) optimize the use of available human capital and resources within the sheep or goat industries;
(3) provide assistance to meet the needs of the sheep or
goat industry for infrastructure development, business development, production, resource development, and market and environmental research;
(4) advance activities that empower and build the capacity
of the United States sheep or goat industry to design unique
responses to the special needs of the sheep or goat industries
on both a regional and national basis; and
(5) adopt flexible and innovative approaches to solving the
long-term needs of the United States sheep or goat industry.
(dl STRATEGIC
PLAN.(1)IN GENERAL.-The Center shall submit to the Secretary
an annual strategic plan for the delivery of financial assistance
provided by the Center.
(2) REQUIREMENTS.-Astrategic plan shall identifyFebruary 13,2006

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CONSOLIDATE0 FARM AND RURAL DEVELOPMENT ACT

Sec. 375

(A) goals, methods, and a benchmark for measuring
the success of carrying out the plan and how the plan relates to the national and regional goals of the Center;
(B) the amount and sources of Federal and non-Federa1 funds that are available for carrying out the plan;
(C) funding priorities;
(D) selection criteria for funding; and
(E) a method of distributing funding.
(e) REVOLVING
FUND.(1)ESTABLISHMENT.-There
is established in the Treasury
the National Sheep Industry Improvement Center Revolving
Fund. The Fund shall be available to the Center, without fiscal
year limitation, to carry out the authorized programs and activities of the Center under this section.
(2) CONTENTS
OF FUND.--There shall be deposited in the
Fund(A) such amounts as may be appropriated, transferred,
or otherwise made available to support programs and activities of the Center;
(B) payments received from any source for products,
services, or property furnished in connection with the activities of the Center;
(C) fees and royalties collected by the Center from licensing or other arrangements relating to commercialization of products developed through projects funded, in
whole or part, by grants, contracts, or cooperative agreements executed by the Center;
(D) proceeds from the sale of assets, loans, and equity
interests made in furtherance of the purposes of the Center;
(E) donations or contributions accepted by the Center
to support authorized programs and activities; and
(F) any other funds acquired by the Center.
(3) USE OF FUND.(A) IN GENERAL.-T~~
Center may use amounts in the
Fund to make direct loans, loan guarantees, cooperative
agreements, equity interests, investments, repayable
grants, and grants to eligible entities, either directly or
through an intermediary, in accordance with a strategic
plan submitted under subsection (d).
(B) CONTINUED
EXISTENCE.--The Center shall manage
the Fund in a manner that ensures that sufficient
amounts are available in the Fund to carry out subsectiop
(c). The Fund is intended to furnish the initial capital for
a revolving fund that will eventually be privatized for the
purposes of assisting the United States sheep and goat industries.
(C) DIVERSEAREA.-The Center shall, to the maximum
extent practicable, use the Fund to serve broad geographic
areas and regions of diverse production.
(D) ADMINISTRATION.-T~~
Center may not use more
than 3 percent of the amounts in the portfolio of the Center for each fiscal year for the administration of the CenFebruary 13,2006

Sec. 375

CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

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ter. The portfolio shall be calculated at the beginning of
each fiscal year and shall include a total of(i) all outstanding loan balances;
(ii) the Fund balance;
(iii) the outstanding balance to intermediaries;
and
(iv) the amount the Center paid for all equity interests.
(E) INFLUENCING
LEGISLATION.-Noneof the amounts
in the Fund may be used to influence legislation.
(F) ACCOUNTING.-TObe eligible to receive amounts
from the Fund, an entity must agree to account for the
amounts using generally accepted accounting principles.
(G) USES O F F U N D . - T ~Center
~
may use amounts in
the Fund to(i) participate with Federal and State agencies in
financing activities that are in accordance with a strategic plan submitted under subsection (dl, including
participation with several States in a regional effort;
(ii) participate with other public and private funding sources in financing activities that are in accordance with the strategic plan, including participation in
a regional effort;
(iii) provide security for, or make principal or interest payments on, revenue or general obligation
bonds issued by a State, if the proceeds from the sale
of the bonds are. deposited in the Fund;
(iv) accrue interest;
(v) guarantee or purchase insurance for local obligations to improve credit market access or reduce interest rates for a project that is in accordance with the
strategic plan;
(vi) sell assets, loans, and equity interests acquired in connection with the financing of projects
funded by the Center; or
(vii) purchase equity interests.
(4) LOANS.(A) RATE.-A loan from the Fund may be made a t an
interest rate that is below the market rate or may be interest free.
(B) TERM.--The term of a loan may not exceed the
shorter of(i) the useful life of the activity financed; or
(ii) 40 years.
(C) SOURCEOF REPAYMENT.-The Center may not
make a loan from the Fund unless the recipient establishes an assured source of repayment.
(D) PROCEEDS.-A11payments of principal and interest
on a loan made from the Fund shall be deposited into the
Fund.
(5) MAINTENANCE
OF EFFORT.-The Center shall use the
Fund only to supplement and not to supplant Federal, State,
and private funds expended for rural development.
(6) FUNDING.February 13, 2006

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CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

Sec. 3 7 5

(A) DEPOSITOF FUNDS.-A11 Federal and non-Federal
amounts received by the Center to carry out this section
shall be deposited in the Fund.
(B) MANDATORYFUNDS.-OU~of any moneys in the
Treasury not otherwise appropriated, the Secretary of the
Treasury shall provide to the Center not to exceed
$27,998,000 to carry out this section.
(C) ADDITIONAL
FUNDS.-In addition to any funds provided under subparagraph (B), there is authorized to be
appropriated $30,000,000 to carry out this section.
(f) BOARDOF DIRECTORS.(1)IN GENERAL.-The management of the Center shall be
vested in a Board of Directors.
(2) POWERS.-The Board shall(A) be responsible for the general supervision of the
Center;
(B) review any contract, direct loan, loan guarantee,
cooperative agreement, equity interest, investment, repayable grant, and grant to be made or entered into by the
Center and any financial assistance provided to the Center;
(C) make the final decision, by majority vote, on
whether and how to provide assistance to an applicant;
and
(D) develop and establish a budget plan and a longterm operating plan to carry out the goals of the Center.
(3) COMPOSITION.-TheBoard shall be composed of(A) 7 voting members, of whom(i) 4 members shall be active producers of sheep
or goats in the United States;
(ii) 2 members shall have expertise in finance and
management; and
(iii) 1 member shall have expertise in lamb, wool,
goat, or goat product marketing; and
(B) 2 nonvoting members, of whom(i) 1 member shall be the Under Secretary of Agriculture for Rural Development; and
(ii) 1 member shall be the Under Secretary of Agriculture for Research, Education, and Economics.
(4) NOMINATION.(A) NOMINATING
BODY.--The Secretary shall appoint
the voting members of the Board from nominations submitted by organizations described in subparagraph (B).
(B) NATIONALORGANIZATIONS.-A
national organization is described in this subparagraph if the organization(i) consists primarily of active sheep or goat producers in the United States; and
(ii) has as the primary interest of the organization
the production of sheep or goats in the United States.
(5) TERMOF OFFICE.~ ~subparagraph
~C~
(B), the
(A) IN G E N E R A L . - ~ U to
term of office of a voting member of the Board shall be 3
years.
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CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

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(B) STAGGEREDINITIAL TERMS.-The initial voting
members of the Board (other t h a n the chairperson of the
initially established Board) shall serve for staggered terms
of 1, 2, and 3 years, as determined by the Secretary.
(C) REAPPOINTMENT.-A voting member may be reappointed for not more than one additional term.
(6) VACANCY.(A) IN GENERAL.-A vacancy on the Board shall be
filled in the same manner a s the original Board.
(B) REAPPOINTMENT.-A voting member appointed to
fill a vacancy for an unexpired term may be reappointed
for one full term.
(7) CHAIRPERSON.(A) IN GENERAL.-The Board shall select a chairperson
from among the voting members of the Board.
(Bj T E R M . - - T ~term
~
of office of the chairperson shall
be 2 years.
(8) ANNUALMEETING.(A) IN GENERAL.--The Board shall meet not less t h a n
once each fiscal year a t the call of the chairperson or a t
the request of the executive director appointed under subsection (g)(l).
(B) LOCATION.-The location of a meeting of t h e Board
shall be established by the Board.
(9) VOTING.(A) QUORUM.-A quorum of the Board shall consist of
a majority of the voting members.
(B) MAJORITYVOTE.-A decision of the Board shall be
made by a majority of the voting members of the Board.
(10) CONFLICTSOF INTEREST.(A) IN GENERAL.-Except a s provided in subparagraph
(D), a member of the Board shall not vote on any matter
respecting any application, contract, claim, or other particular matter pending before the Board in which, to the
knowledge of the member, a n interest is held by(i) the member;
(ii) any spouse of the member;
(iiij any child of the member;
(iv) any partner of the member;
(v) any organization in which the member is serving a s an officer, director, trustee, partner, or employee; or
(vi) any person with whom the member is negotiating or h a s any arrangement concerning prospective
employment or with whom the member h a s a financial
interest.
(B) R E M O V A L . - A ~action
~
by a member of the Board
t h a t violates subparagraph (A) shall be cause for removal
from the Board.
(C) VALIDITYO F ACTION.-An action by a member of
the Board t h a t violates subparagraph (Aj shall not impair
or otherwise affect the validity of any otherwise lawful action by the Board.
(D) DISCLOSURE.February 13, 2006

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CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

Sec. 375

(i) IN GENERAL.-If a member of the Board makes
a full disclosure of an interest and, prior to any participation by the member, the Board determines, by
majority vote, that the interest is too remote or too inconsequential to affect the integrity of any participation by the member, the member may participate in
the matter relating to the interest, except as provided
in subparagraph (E)(iii).
(ii) VOTE.-A member that discloses an interest
under clause (i) shall not vote on a determination of
whether the member may participate in the matter relating to the interest.
(E) REMANDS.(i) IN GENERAL.-The Secretary may vacate and
remand to the Board for reconsideration any decision
made pursuant to subsection (e)(3)(H) if the Secretary
determines that there has been a violation of this
aragraph or any conflict of interest provision of the
gylaws of the Board with respect to the decision.
(ii) REASONS.-In the case of any violation and remand of a funding decision to the Board under clause
(i), the Secretary shall inform the Board of the reasons
for the remand.
(iii) CONFLICTED
MEMBERS NOT TO VOTE ON REMANDED DECISIONS.-If a decision with respect to a
matter is remanded to the Board by reason of a conflict of interest faced by a Board member, the member
may not participate in any subsequent decision with
respect to the matter.
(11) COMPENSATION.(A) I N GENERAL.-A member of the Board shall not receive any compensation by reason of service on the Board.
(B) EXPENSES.-A member of the Board shall be reimbursed for travel, subsistence, and other necessary expenses incurred by the member in the performance of a
duty of the member.
(12) B y ~ ~ w s . - T h eBoard shall adopt, and may from time
to time amend, any bylaw that is necessary for the proper
management and functioning of the Center.
(13) PUBLICHEARINGS.-Not later than 1 year after the
date of enactment of this section, the Board shall hold public
hearings on policy
of the program
- objectives
- - established t n d e r
this section.
(14) ORGANIZATIONAL
SYSTEM.--The Board shall provide a
system of organization to fix responsibility and promote efficiency in carrving. out the functions of the Board.
6 5 ) USE" OFDEPARTMENT OF AGRICULTURE.-TheBoard
may, with the consent of the Secretary, utilize the facilities of
and the services of employees of the Department of Agriculture, without cost to the Center.
(g) OFFICERSAND EMPLOYEES.(1)EXECUTIVE
DIRECTOR.(A) IN GENERAL.-The Board shall appoint an executive director to be the chief executive officer of the Center.
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Sec. 375

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CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

(B) T E N U R E . - T ~executive
~
director shall serve a t the
pleasure of the Board.
(C) C 0 ~ ~ ~ ~ ~ ~ ~ 1 0 ~ . - C o m p efor
n s the
a t i oexecutive
n
director shall be established by the Board.
Board may se(2) OTHEROFFICERS AND EMPLOYEES.-T~~
lect and appoint officers, attorneys, employees, and agents who
shall be vested with such powers and duties as the Board may
determine.
(3) DELEGATION.-T~~
Board may, by resolution, delegate
to the chair~erson.the executive director. or anv other officer
or employe; any flnction, power, or d u t i of thk Board other
than voting on a grant, loan, contract, agreement, budget, or
annual strategic plan.
(h) CONSULTATION.-To
carry out this section, the Board may
consult with(1)State departments of agriculture;
(2) Federal departments and agencies;
(3) nonprofit development corporations;
(4) colleges and universities;
(5) banking and other credit-related agencies;
(6) agriculture and agribusiness organizations; and
(7) regional planning and development organizations.
(i) OVERSIGHT.(1) IN GENERAL.-T~~
Secretary shall review and monitor
compliance by the Board and the Center with this section.
(2) SANCTIONS.-If, following notice and opportunity for a
hearing, the Secretary finds that the Board or the Center is
not in compliance with this section, the Secretary may(A) cease making deposits to the Fund;
(B) suspend the authority of the Center to withdraw
funds from the Fund; or
(C) impose other appropriate sanctions, including
recoupment of money improperly expended for purposes
prohibited or not authorized by this Act and disqualification from receipt of financial assistance under this section.
OF SANCTIONS.-TheSecretary shall rescind
(3) RESCISSION
sanctions imposed under paragraph (2) on a finding by the Secretary that there is no longer any failure by the Board or the
Center to comply with thls section or that the noncompliance
will be promptly corrected.
( j) PRIVATIZATION.(1) IN GENERAL.-Privatization of a revolving fund for the
DurDoses of assistine the United States s h e e ~and goat indusirie'j shall occur on che earlier of(A) September 30,2006; or
(B) the date as of which a total of $30,000,000 has
been appropriated for the Center under subsection
(e)(6)(C).
(2) PRIVATIZATION
PROPOSAL.-On privatization of a revolving fund in accordance with paragraph (I), the Board shall
submit to the Secretary, for approval, a privatization proposal
that(A) delineates a private successor entity to the Center;
and
u

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CONSOLIDATED FARM AND RURAL DEVELOPMENT ACT

S ~ C 377
.

(B) establishes a transition plan.
(3) PRIVATESUCCESSOR ENTITY.--The private successor entity shall(A) have the purposes described in subsection (c);
(B) be organized under the laws of one of the States;
and
(C) be able to continue the activities of the Center.
(4) TRANSITION
PLAN.--The transition plan shall(A) identify any continuing role of the Federal Government with respect to the Center;
(B) provide for the transfer of all Center assets and liabilities to the private successor entity; and
(C) delineate the status of the Board and employees of
the Center.
(5) IMPLEMENTATION.(A) IN GENEFLAL.--O~
approval by the Secretary of the
private successor entity and the transition plan, the Center shall create the private successor entity and implement
the transition plan.
(B) AUTHORITY.-The Secretary shall have all necessary authority to implement the transition plan.
(6) TRANSFEROF FUNDS.-On creation of the private successor entity, all funds held by the Department of the Treasury
pursuant to this section shall be transferred to the private successor entity.
(7) REPEAL.-On the date the Secretary publishes notice in
the Federal Register that the transition plan is complete, this
section is repealed.
SEC. 376. [7 U.S.C. 2008kl MAKING AND SERVICING OF LOANS BY PERSONNEL OF STATE, COUNTY, OR AREA COMMITTEES.

The Secretary shall use personnel of a State, county or area
committee established under section 8(b)(5) of the Soil Conservation and Domestic Allotment Act (16 U.S.C 590h(b)(5)) to make and
service loans under this title to the extent the personnel have been
trained to do so.
SEC. 377. 17 U.S.C. 200811 ELIGIBILITY OF EMPLOYEES OF STATE,
COUNTY, OR AREA COMMITTEE FOR LOANS AND LOAN
GUARANTEES.

(a) IN GENEFLAL.-T~~
Secretary shall not prohibit an employee
of a State, county or area committee established under section
8(b)(5) of the Soil Conservation and Domestic Allotment Act (16
U.S.C. 590h(b)(5)) or an employee of the Department of Agriculture
from obtaining a loan or loan guarantee under subtitle A, B or C
of this title.
(b) APPROVALS.-(1)COUNTY
OR AREA OFFICE.--In the case of a loan application from an employee in a county or area office, the Farm
Service Agency State office shall be responsible for reviewing
and approving the application.
(2) STATEOFFICE.-I~ the case of a loan application from
an employee of a State office, the Farm Service Agency national office shall be responsible for reviewing and approving
the application.
February 13, 2006