42 U.S.C. § 9812 — Development loan fund

Page 7827 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 9812 1 So in original. Probably should be ‘‘nonagricultural’’. 9807(a) of this title shall not exceed 90 percent of the cost of such program, including costs of ad- ministration, unless the Secretary determines that the assistance in excess of such percentage is required in furtherance of the purposes of this subchapter. Non-Federal contributions may be in cash or in kind, fairly evaluated, including but not limited to plant, equipment, and serv- ices. (2) The assistance referred to in paragraph (1) shall be made available (A) for deposit to the order of grantees which have demonstrated suc- cessful program performance, under conditions which the Secretary deems appropriate, within 30 days following approval of the grant agree- ment by the Secretary and such grantee; or (B) whenever the Secretary deems appropriate, in accordance with applicable rules and regulations prescribed by the Secretary of the Treasury, and including any other conditions which the Sec- retary of Health and Human Services deems ap- propriate, within 30 days following approval of the grant agreement by the Secretary and such grantee. (b) Property acquired as a result of capital in- vestments made by any community develop- ment corporation with funds granted as its Fed- eral share of the cost of programs carried out under this subchapter, and the proceeds from such property, shall become the property of the community development corporation and shall not be considered to be Federal property. The Federal Government retains the right to direct that on severance of the grant relationship the assets purchased with grant funds shall continue to be used for the original purpose for which they were granted. (Pub. L. 97–35, title VI, § 619, Aug. 13, 1981, 95 Stat. 493.) PART B—SPECIAL RURAL PROGRAMS § 9809. Statement of purpose It is the purpose of this part to meet the spe- cial economic needs of rural communities or areas with concentrations or substantial num- bers of low-income persons by providing support to self-help programs which promote economic development and independence, as a supplement to existing similar programs conducted by other departments and agencies of the Federal Gov- ernment. Such programs should encourage low- income families to pool their talents and re- sources so as to create and expand rural eco- nomic enterprise. (Pub. L. 97–35, title VI, § 620, Aug. 13, 1981, 95 Stat. 493.) § 9810. Financial assistance to low-income fami- lies, local cooperative associations, and local public or private nonprofit organizations or entities; amount, purposes, etc. (a) The Secretary is authorized to provide fi- nancial assistance, including loans having a maximum maturity of fifteen years and in amounts not resulting in an aggregate principal indebtedness of more than $3,500 at any one time, to any low-income rural family where, in the judgment of the Secretary, such financial assistance has a reasonable possibility of effect- ing a permanent increase in the income of such families, or will contribute to the improvement of their living or housing conditions, by assist- ing or permitting them to— (1) acquire or improve real estate or reduce encumbrances or erect improvements thereon; (2) operate or improve the operation of farms not larger than family sized, including but not limited to the purchase of feed, seed, fertilizer, livestock, poultry, and equipment; or (3) participate in cooperative associations, or finance nonagricultral 1 enterprises which will enable such families to supplement their income. (b) The Secretary is authorized to provide fi- nancial assistance to local cooperative associa- tions or local public and private nonprofit orga- nizations or agencies in rural areas containing concentrations or substantial numbers of low- income persons for the purpose of defraying all or part of the costs of establishing and operating cooperative programs for farming, purchasing, marketing, processing, and to improve their in- come as producers and their purchasing power as consumers, and to provide such essentials as credit and health services. Costs which may be defrayed shall include— (1) administrative costs of staff and over- head; (2) costs of planning and developing new en- terprises; (3) costs of acquiring technical assistance; and (4) initial capital where it is determined by the Secretary that the poverty of the families participating in the program and the social conditions of the rural area require such as- sistance. (Pub. L. 97–35, title VI, § 621, Aug. 13, 1981, 95 Stat. 493.) § 9811. Limitation on assistance No financial assistance shall be provided under this part unless the Secretary determines that— (1) any cooperative association receiving as- sistance has a minimum of fifteen active members, a majority of which are low-income rural persons; (2) adequate technical assistance is made available and committed to the programs being supported; (3) such financial assistance will materially further the purposes of this part; and (4) the applicant is fulfilling or will fulfill a need for services, supplies, or facilities which is otherwise not being met. (Pub. L. 97–35, title VI, § 622, Aug. 13, 1981, 95 Stat. 494.) PART C—DEVELOPMENT LOANS TO COMMUNITY ECONOMIC DEVELOPMENT PROGRAMS § 9812. Development loan fund (a) Authorities, scope, and purposes; conditions; interest rate; repayment The Secretary is authorized to make or guar- antee loans (either directly or in cooperation Page 7828 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 9812a 1 So in original. The comma probably should not appear. with banks or other organizations through agreements to participate on an immediate or deferred basis) to community development cor- porations, to families and local cooperatives and the designated supportive organizations of co- operatives eligible for financial assistance under this subchapter, to private nonprofit organiza- tions receiving assistance under chapter 106 of this title, or to public and private nonprofit or- ganizations or agencies, for business facilities and community development projects, including community development credit unions, which the Secretary determines will carry out the pur- poses of this part. No loans, guarantees, or other financial assistance shall be provided under this section unless the Secretary determines that— (1) there is reasonable assurance of repay- ment of the loan; (2) the loan is not otherwise available on reasonable terms from private sources or other Federal, State, or local programs; and (3) the amount of the loan, together with other funds available, is adequate to assure completion of the project or achievement of the purposes for which the loan is made. Loans made by the Secretary pursuant to this section shall bear interest at a rate not less than a rate determined by the Secretary of the Treasury taking into consideration the average market yield on outstanding Treasury obliga- tions of comparable maturity, plus such addi- tional charge, if any, toward covering other costs of the program as the Secretary of Health and Human Services may determine to be con- sistent with its purposes, except that, for the 5 years following the date in which funds are ini- tially available to the borrower, the rate of in- terest shall be set at a rate considered appro- priate by the Secretary in light of the particular needs of the borrower, which rate shall not be lower than 1 percent. All such loans shall be re- payable within a period of not more than 30 years. (b) Adjustment of interest rates, moratorium on principal and interest, etc. The Secretary is authorized to adjust interest rates, grant moratoriums on repayment of prin- cipal and interest, collect or compromise any obligations held by the Secretary, and to take such other actions in respect to such loans as the Secretary shall determine to be necessary or appropriate, consistent with the purposes of this section. (c) Establishment, funding, etc. (1) To carry out the lending and guaranty functions authorized under this part, there shall be established a Development Loan Fund con- sisting of two separate accounts, one of which shall be a revolving fund called the Rural Devel- opment Loan Fund and the other of which shall be a revolving fund called the Community De- velopment Loan Fund. The capital of each such revolving fund shall remain available until ex- pended. (2) The Rural Development Loan Fund shall consist of the remaining funds provided for in part A of title III of the Economic Opportunity Act of 1964 [42 U.S.C. 2841 et seq.], as in effect on September 19, 1972, and such amounts as may be deposited in such fund by the Secretary out of funds made available from appropriations for purposes of carrying out this part. The Sec- retary shall utilize the services of the Farmers Home Administration,1 or the Rural Develop- ment Administration in administering such fund. (3) The Community Development Loan Fund shall consist of such amounts as may be depos- ited in such fund by the Secretary out of funds made available from appropriations for purposes of carrying out this subchapter. The Secretary may make deposits in the Community Develop- ment Loan Fund in any fiscal year in which the Secretary has made available for grants to com- munity development corporations under this subchapter not less than $60,000,000 out of funds made available from appropriations for purposes of carrying out this subchapter. (Pub. L. 97–35, title VI, § 623, Aug. 13, 1981, 95 Stat. 494; Pub. L. 101–624, title XXIII, § 2303(f)(1), Nov. 28, 1990, 104 Stat. 3981.) Editorial Notes REFERENCES IN TEXT Chapter 106 of this title, referred to in subsec. (a), was in the original ‘‘subtitle B of this title’’, meaning sub- title B (§ 671 et seq.) of title VI of Pub. L. 97–35, Aug. 13, 1981, 95 Stat. 511, known as the Community Services Block Grant Act, which is classified generally to chap- ter 106 (§ 9901 et seq.) of this title. For complete classi- fication of this Act to the Code, see Short Title note set out under section 9901 of this title and Tables. The Economic Opportunity Act of 1964, referred to in subsec. (c)(2), is Pub. L. 88–452, Aug. 20, 1964, 78 Stat. 508. Part A of title III of the Economic Opportunity Act of 1964 was classified generally to part A (§ 2841 et seq.) of subchapter III of chapter 34 of this title prior to re- peal by Pub. L. 97–35, title VI, § 683(a), Aug. 13, 1981, 95 Stat. 519. For complete classification of this Act to the Code, see Tables. AMENDMENTS 1990—Subsec. (c)(2). Pub. L. 101–624 inserted ‘‘, or the Rural Development Administration’’ after ‘‘Farmers Home Administration’’. Statutory Notes and Related Subsidiaries TRANSFER OF FUNCTIONS Functions relating to administration of Community Development Credit Union Revolving Loan Fund trans- ferred from Secretary of Health and Human Services to National Credit Union Administration Board by Pub. L. 99–609, set out as a note under section 9822 of this title. § 9812a. Interest rates payable on certain rural development loans; assignment of loan con- tracts (a) Modification of interest rates Notwithstanding any other provision of law— (1) any outstanding loan made after Decem- ber 31, 1982, by the Secretary of Health and Human Services; or (2) any loan made after September 30, 1986; with moneys from the Rural Development Loan Fund established by section 9812(c)(1) of this title or with funds available (before October 27, 1998) under section 9910(a) of this title (as in ef-