---
kind: "section"
citation: "7 U.S.C. § 1983b"
title: "7"
title_heading: "Agriculture"
number: "1983b"
heading: "Beginning farmer and rancher individual development accounts pilot program"
release: "119-102"
url: "https://uscodex.org/usc/7/1983b"
units:
  - "Chapter 50 — Agricultural Credit"
  - "Subchapter IV — Administrative Provisions"
---

# §1983b. Beginning farmer and rancher individual development accounts pilot program

- (a) **Definitions—** In this section:
  - (1) **Demonstration program—** The term “demonstration program” means a demonstration program carried out by a [qualified entity](#a-4-A) under the pilot program established in [subsection (b)(1)](#b-1).
  - (2) **Eligible participant—** The term “eligible participant” means a [qualified beginning farmer or rancher](/usc/7/1991.md?p=a-11) that—
    - (A) lacks significant financial resources or assets; and
    - (B) has an income that is less than—
      - (i) 80 percent of the median income of the [State](/usc/7/1991.md?p=a-6) in which the [farmer](/usc/7/1991.md?p=a-1) or rancher resides; or
      - (ii) 200 percent of the most recent annual Federal Poverty Income Guidelines published by the Department of Health and Human Services for the [State](/usc/7/1991.md?p=a-6).
  - (3) **Individual development account—** The term “individual development account” means a savings account described in [subsection (b)(4)(A)](#b-4-A).
  - (4) **Qualified entity—**
    - (A) **In general—** The term “qualified entity” means—
      - (i) 1 or more organizations—
        - (I) described in [section 501(c)(3) of title 26](/usc/26/501.md?p=c-3); and
        - (II) exempt from taxation under [section 501(a)](/usc/7/501.md) of such title; or
      - (ii) a [State](/usc/7/1991.md?p=a-6), local, or tribal government submitting an application jointly with an organization described in [clause (i)](#a-4-A-i).
    - (B) **No prohibition on collaboration—** An organization described in [subparagraph (A)(i)](#a-4-A-i) may collaborate with a financial institution or for-profit community development [corporation](/usc/7/1502.md?p=b-5) to carry out the purposes of this section.
- (b) **Pilot program—**
  - (1) **In general—** The Secretary shall establish a pilot program to be known as the “New [Farmer](/usc/7/1991.md?p=a-1) [Individual Development Accounts](#a-3) Pilot Program” under which the Secretary shall work through [qualified entities](#a-4-A) to establish [demonstration programs](#a-1)—
    - (A) of at least 5 years in duration; and
    - (B) in at least 15 [States](/usc/7/1991.md?p=a-6).
  - (2) **Coordination—** The Secretary shall operate the pilot program through, and in coordination with the farm loan programs of, the Farm Service Agency.
  - (3) **Reserve funds—**
    - (A) **In general—** A [qualified entity](#a-4-A) carrying out a [demonstration program](#a-1) under this section shall establish a reserve [fund](/usc/7/4531.md?p=5) consisting of a non-Federal match of 50 percent of the total amount of the grant awarded to the [demonstration program](#a-1) under this section.
    - (B) **Federal funds—** After the [qualified entity](#a-4-A) has deposited the non-Federal matching [funds](/usc/7/4531.md?p=5) described in [subparagraph (A)](#b-3-A) in the reserve [fund](/usc/7/4531.md?p=5), the Secretary shall provide the total amount of the grant awarded under this section to the [demonstration program](#a-1) for deposit in the reserve [fund](/usc/7/4531.md?p=5).
    - (C) **Use of funds—** Of the [funds](/usc/7/4531.md?p=5) deposited under [subparagraph (B)](#b-3-B) in the reserve [fund](/usc/7/4531.md?p=5) established for a [demonstration program](#a-1), the [qualified entity](#a-4-A) carrying out the [demonstration program](#a-1)—
      - (i) may use up to 10 percent for administrative expenses; and
      - (ii) shall use the remainder in making matching awards described in [paragraph (4)(B)(ii)(I)](#b-4-B-ii-I).
    - (D) **Interest—** Any interest earned on amounts in a reserve [fund](/usc/7/4531.md?p=5) established under [subparagraph (A)](#b-3-A) may be used by the [qualified entity](#a-4-A) as additional matching [funds](/usc/7/4531.md?p=5) for, or to administer, the [demonstration program](#a-1).
    - (E) **Guidance—** The Secretary shall issue guidance regarding the investment requirements of reserve [funds](/usc/7/4531.md?p=5) established under this paragraph.
    - (F) **Reversion—** On the date on which all [funds](/usc/7/4531.md?p=5) remaining in any [individual development account](#a-3) established by a [qualified entity](#a-4-A) have reverted under [paragraph (5)(B)(ii)](#b-5-B-ii) to the reserve [fund](/usc/7/4531.md?p=5) established by the [qualified entity](#a-4-A), there shall revert to the Treasury of the [United States](/usc/7/1991.md?p=a-6) a percentage of the amount (if any) in the reserve [fund](/usc/7/4531.md?p=5) equal to—
      - (i) the amount of Federal [funds](/usc/7/4531.md?p=5) deposited in the reserve [fund](/usc/7/4531.md?p=5) under [subparagraph (B)](#b-3-B) that were not used for administrative expenses; divided by
      - (ii) the total amount of [funds](/usc/7/4531.md?p=5) deposited in the reserve [fund](/usc/7/4531.md?p=5).
  - (4) **Individual development accounts—**
    - (A) **In general—** A [qualified entity](#a-4-A) receiving a grant under this section shall establish and administer [individual development accounts](#a-3) for [eligible participants](#a-2).
    - (B) **Contract requirements—** To be eligible to receive [funds](/usc/7/4531.md?p=5) under this section from a [qualified entity](#a-4-A), an [eligible participant](#a-2) shall enter into a [contract](/usc/7/518.md?p=4) with only 1 [qualified entity](#a-4-A) under which—
      - (i) the [eligible participant](#a-2) agrees—
        - (I) to deposit a certain amount of [funds](/usc/7/4531.md?p=5) of the [eligible participant](#a-2) in a personal savings account, as prescribed by the contractual agreement between the [eligible participant](#a-2) and the [qualified entity](#a-4-A);
        - (II) to use the [funds](/usc/7/4531.md?p=5) described in [subclause (I)](#b-4-B-i-I) only for 1 or more eligible expenditures described in [paragraph (5)(A)](#b-5-A); and
        - (III) to complete financial training; and
      - (ii) the [qualified entity](#a-4-A) agrees—
        - (I) to deposit, not later than 1 month after an amount is deposited pursuant to [clause (i)(I)](#b-4-B-i-I), at least a 100-percent, and up to a 200-percent, match of that amount into the [individual development account](#a-3) established for the [eligible participant](#a-2); and
        - (II) with uses of [funds](/usc/7/4531.md?p=5) proposed by the [eligible participant](#a-2).
    - (C) **Limitation—**
      - (i) **In general—** A [qualified entity](#a-4-A) administering a [demonstration program](#a-1) under this section may provide not more than $6,000 for each fiscal year in matching [funds](/usc/7/4531.md?p=5) to the [individual development account](#a-3) established by the [qualified entity](#a-4-A) for an [eligible participant](#a-2).
      - (ii) **Treatment of amount—** An amount provided under [clause (i)](#b-4-C-i) shall not be considered to be a gift or loan for mortgage purposes.
  - (5) **Eligible expenditures—**
    - (A) **In general—** An eligible expenditure described in this subparagraph is an expenditure—
      - (i) to purchase farmland or make a down payment on an accepted purchase offer for farmland;
      - (ii) to make mortgage payments on farmland purchased pursuant to [clause (i)](#b-5-A-i), for up to 180 days after the date of the purchase;
      - (iii) to purchase breeding stock, fruit or nut trees, or trees to harvest for timber; and
      - (iv) for other similar expenditures, as determined by the Secretary.
    - (B) **Timing—**
      - (i) **In general—** An [eligible participant](#a-2) may make an eligible expenditure at any time during the 2-year period beginning on the date on which the last matching [funds](/usc/7/4531.md?p=5) are provided under [paragraph (4)(B)(ii)(I)](#b-4-B-ii-I) to the [individual development account](#a-3) established for the [eligible participant](#a-2).
      - (ii) **Unexpended funds—** At the end of the period described in [clause (i)](#b-5-B-i), any [funds](/usc/7/4531.md?p=5) remaining in an [individual development account](#a-3) established for an [eligible participant](#a-2) shall revert to the reserve [fund](/usc/7/4531.md?p=5) of the [demonstration program](#a-1) under which the account was established.
- (c) **Applications—**
  - (1) **In general—** A [qualified entity](#a-4-A) that seeks to carry out a demonstration program under this section may submit to the Secretary an application at such time, in such form, and containing such information as the Secretary may prescribe.
  - (2) **Criteria—** In considering whether to approve an application to carry out a demonstration program under this section, the Secretary shall assess—
    - (A) the degree to which the demonstration program described in the application is likely to aid [eligible participants](#a-2) in successfully pursuing new [farming](/usc/7/1991.md?p=a-2) opportunities;
    - (B) the experience and ability of the [qualified entity](#a-4-A) to responsibly administer the demonstration program;
    - (C) the experience and ability of the [qualified entity](#a-4-A) in recruiting, educating, and assisting [eligible participants](#a-2) to increase economic independence and pursue or advance [farming](/usc/7/1991.md?p=a-2) opportunities;
    - (D) the aggregate amount of direct [funds](/usc/7/4531.md?p=5) from non-Federal public sector and private sources that are formally committed to the demonstration program as matching contributions;
    - (E) the adequacy of the plan of the [qualified entity](#a-4-A) to provide information relevant to an evaluation of the demonstration program; and
    - (F) such other factors as the Secretary considers to be appropriate.
  - (3) **Preferences—** In considering an application to conduct a demonstration program under this section, the Secretary shall give preference to an application from a [qualified entity](#a-4-A) that demonstrates—
    - (A) a track record of serving clients targeted by the program, including, as appropriate, socially disadvantaged [farmers](/usc/7/1991.md?p=a-1) or ranchers (as defined in [section 2003(e)(2) of this title](/usc/7/2003.md?p=e-2)); and
    - (B) expertise in dealing with financial management aspects of [farming](/usc/7/1991.md?p=a-2).
  - (4) **Approval—** Not later than 1 year after the date of enactment of this section, in accordance with this section, the Secretary shall, on a competitive basis, approve such applications to conduct demonstration programs as the Secretary considers appropriate.
  - (5) **Term of authority—** If the Secretary approves an application to carry out a demonstration program, the Secretary shall authorize the applicant to carry out the project for a period of 5 years, plus an additional 2 years to make eligible expenditures in accordance with [subsection (b)(5)(B)](#b-5-B).
- (d) **Grant authority—**
  - (1) **In general—** The Secretary shall make a grant to a [qualified entity](#a-4-A) authorized to carry out a demonstration program under this section.
  - (2) **Maximum amount of grants—** The aggregate amount of grant [funds](/usc/7/4531.md?p=5) provided to a demonstration program carried out under this section shall not exceed $250,000.
  - (3) **Timing of grant payments—** The Secretary shall pay the amounts awarded under a grant made under this section—
    - (A) on the awarding of the grant; or
    - (B) pursuant to such payment plan as the [qualified entity](#a-4-A) may specify.
- (e) **Reports—**
  - (1) **Annual progress reports—**
    - (A) **In general—** Not later than 60 days after the end of the calendar year in which the Secretary authorizes a [qualified entity](#a-4-A) to carry out a demonstration program under this section, and annually thereafter until the conclusion of the demonstration program, the [qualified entity](#a-4-A) shall prepare an annual report that includes, for the period covered by the report—
      - (i) an evaluation of the progress of the demonstration program;
      - (ii) information about the demonstration program, including the [eligible participants](#a-2) and the individual development accounts that have been established; and
      - (iii) such other information as the Secretary may require.
    - (B) **Submission of reports—** A [qualified entity](#a-4-A) shall submit each report required under [subparagraph (A)](#e-1-A) to the Secretary.
  - (2) **Reports by the Secretary—** Not later than 1 year after the date on which all demonstration programs under this section are concluded, the Secretary shall submit to Congress a final report that describes the results and findings of all reports and evaluations carried out under this section.
- (f) **Annual review—** The Secretary may conduct an annual review of the financial records of a [qualified entity](#a-4-A)—
  - (1) to assess the financial soundness of the [qualified entity](#a-4-A); and
  - (2) to determine the use of grant [funds](/usc/7/4531.md?p=5) made available to the [qualified entity](#a-4-A) under this section.
- (g) **Regulations—** In carrying out this section, the Secretary may promulgate regulations to ensure that the program includes provisions for—
  - (1) the termination of demonstration programs;
  - (2) control of the reserve [funds](/usc/7/4531.md?p=5) in the case of such a termination;
  - (3) transfer of demonstration programs to other [qualified entities](#a-4-A); and
  - (4) remissions from a reserve [fund](/usc/7/4531.md?p=5) to the Secretary in a case in which a demonstration program is terminated without transfer to a new [qualified entity](#a-4-A).
- (h) **Authorization of appropriations—** There is authorized to be appropriated to carry out this section $5,000,000 for each of fiscal years 2008 through 2023.

## Source credit

(Pub. L. 87–128, title III, § 333B, as added Pub. L. 110–234, title V, § 5301, May 22, 2008, 122 Stat. 1147, and Pub. L. 110–246, § 4(a), title V, § 5301, June 18, 2008, 122 Stat. 1664, 1908; amended Pub. L. 113–79, title V, § 5301, Feb. 7, 2014, 128 Stat. 839; Pub. L. 115–334, title V, § 5301, Dec. 20, 2018, 132 Stat. 4671.)

## Notes

### Editorial Notes

### References in Text

The date of enactment of this section, referred to in subsec. (c)(4), is the date of enactment of Pub. L. 110–246, which was approved June 18, 2008.

### Codification

Pub. L. 110–234 and Pub. L. 110–246 enacted identical sections. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246.

### Prior Provisions

A prior section 1983b, Pub. L. 87–128, title III, § 333B, as added Pub. L. 99–198, title XIII, § 1313(a), Dec. 23, 1985, 99 Stat. 1525; amended Pub. L. 100–233, title VI, § 608, Jan. 6, 1988, 101 Stat. 1667; Pub. L. 101–624, title XVIII, § 1812, Nov. 28, 1990, 104 Stat. 3821, related to appeals from adverse decisions under the Consolidated Farm and Rural Development Act, prior to repeal by Pub. L. 103–354, title II, § 281(c), Oct. 13, 1994, 108 Stat. 3233. See section 6991 et seq. of this title.

### Amendments

2018—Subsec. (h). Pub. L. 115–334 substituted “2023” for “2018”.

2014—Subsec. (h). Pub. L. 113–79 substituted “2018” for “2012”.

### Statutory Notes and Related Subsidiaries

### Effective Date

Enactment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as a note under section 8701 of this title.