Alan Simpson: “I rise to inquire of my friend, Senator Lugar of Indiana, about a provision in the Federal Agriculture Improvement and…”

“I rise to inquire of my friend, Senator Lugar of Indiana, about a provision in the Federal Agriculture Improvement and Reform Act [FAIR Act] which became law on April 4, 1996. Specifically, I am concerned with the way the U.S. Department of Agriculture has interpreted section 663, the section of the credit title that provides a transition period for elimination of the Leaseback/Buyback program. The statutory language says that only those borrowers who have submitted complete applications to acquire inventory property prior to the date of enactment will be considered for this form of loan servicing. The language is clear that applications must have been fully submitted on or before April 4, 1996, but a difficulty has arisen with regard to whether or not the property--on which the application is being made--must actually be in Federal inventory prior to the date of enactment. The statute is not clear on this point. The Department has interpreted the clause, ``Applications to acquire inventory property,'' to mean the property must already be in Federal inventory. This is called a ``post-acquisition'' application--``acquisition'' referring to when the Government takes ownership of the property. I am concerned that this ``brightline'' has stranded a number of ``pre-acquisition'' applicants in the pipeline.”