42 U.S.C. § 1440 — State housing finance and development

Page 4730 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1440 1983—Subsec. (a)(1). Pub. L. 98–181, § 201(a)(1), inserted provision following subpar. (B) requiring that funds be utilized to meet the needs and goals identified in the unit of local government’s housing assistance plan. Subsec. (d)(1). Pub. L. 98–181, § 201(a)(2), amended par. (1) generally, inserting provision respecting assistance approved in appropriation Acts for sections 9 and 17 of the United States Housing Act of 1937 uses, requiring allocation of assistance to be based on a formula con- tained in a regulation, making the relative needs provi- sion applicable to different States, striking out re- quirement that Secretary assure, in carrying out na- tional housing and community development objectives, that funds available for housing assistance programs be allocated or reserved in accordance with goals de- scribed in approved housing assistance plans, and strik- ing out provision respecting allocation of funds for non- metropolitan areas, which was reenacted as last sen- tence of par. (2). Subsec. (d)(2). Pub. L. 98–181, § 201(a)(2), amended par. (2) generally, inserting provision respecting allocation of nonmetropolitan area funds for use in connection with section 1490l of this title; reenacting as second sentence provision respecting amount of funds allo- cated for nonmetropolitan areas, which formerly con- stituted last sentence of par. (1); and striking out former provision respecting reservation of housing as- sistance funds for new community developments ap- proved under title IV of the Housing and Urban Devel- opment Act of 1968 and title VII of the Housing and Urban Development Act of 1970 for persons of low- and moderate-income. 1981—Subsec. (d)(4). Pub. L. 97–35 added par. (4). 1980—Subsec. (d)(1). Pub. L. 96–399 substituted ‘‘car- rying out section 14 of such Act’’ for ‘‘modernization of low-income housing projects’’. 1979—Subsec. (d)(1). Pub. L. 96–153 inserted provisions limiting allocation of assistance other than that ap- proved in appropriation acts for use on and after Oct. 1, 1979 for modernization of low-income housing projects and inserted provision that any amounts allo- cated to a State or to areas or communities within a State which are not likely to be utilized within a fiscal year shall not be reallocated for use in another State unless the Secretary determines that other areas or communities within the same State cannot utilize the amounts in accordance with the appropriate housing assistance plans within that fiscal year. 1977—Subsec. (d)(1). Pub. L. 95–128 inserted provision requiring the Secretary to assure that funds available for subsec. (a) housing assistance programs shall be al- located or reserved in accordance with goals described in local, State, or other housing assistance plans ap- proved by the Secretary pursuant to section 5304 of this title and shall be utilized to meet needs reflected in data referred to in the preceding sentence. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Amendment by title V of Pub. L. 105–276 effective and applicable beginning upon Oct. 1, 1999, except as other- wise provided, with provision that Secretary may im- plement amendment before such date, except to extent that such amendment provides otherwise, and with sav- ings provision, see section 503 of Pub. L. 105–276, set out as a note under section 1437 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–330 effective Oct. 1, 1997, except as otherwise expressly provided, see section 107 of Pub. L. 104–330, set out as an Effective Date note under section 4101 of Title 25, Indians. EFFECTIVE DATE OF 1990 AMENDMENT Amendment by section 801(b) of Pub. L. 101–625 effec- tive Oct. 1, 1991, with respect to projects approved on or after such date, and subject to issuance of regulations, see section 801(c) of Pub. L. 101–625, set out as a note under section 1701q of Title 12, Banks and Banking. Amendment by section 801(b) of Pub. L. 101–625 deemed enacted Nov. 5, 1990, see title II of Pub. L. 101–507, set out as a note under section 1701q of Title 12. EFFECTIVE DATE OF 1989 AMENDMENT Pub. L. 101–235, title I, § 104(b), Dec. 15, 1989, 103 Stat. 1998, provided that: ‘‘Any assistance made available under section 213(d)(4) of the Housing and Community Development Act of 1974 [42 U.S.C. 1439(d)(4)] before Oc- tober 1, 1990, or pursuant to a commitment for such as- sistance entered into before such date, shall be gov- erned by the provisions of section 213(d)(4) as such sec- tion existed before the date of the enactment of this Act [Dec. 15, 1989].’’ EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective Oct. 1, 1981, see section 371 of Pub. L. 97–35, set out as an Effective Date note under section 3701 of Title 12, Banks and Banking. § 1440. State housing finance and development agencies (a) Statement of purpose; participation by pri- vate and nonprofit developers in activities assisted It is the purpose of this section to encourage the formation and effective operation of State housing finance agencies and State development agencies which have authority to finance, to as- sist in carrying out, or to carry out activities designed to (1) provide housing and related fa- cilities through land acquisition, construction, or rehabilitation, for persons and families of low, moderate, and middle income, (2) promote the sound growth and development of neighbor- hoods through the revitalization of slum and blighted areas, (3) increase and improve employ- ment opportunities for the unemployed and un- deremployed through the development and rede- velopment of industrial, manufacturing, and commercial facilities, or (4) implement the de- velopment aspects of State land use and preser- vation policies, including the advance acquisi- tion of land where it is consistent with such policies. The Secretary of Housing and Urban Development shall encourage maximum partici- pation by private and nonprofit developers in ac- tivities assisted under this section. (b) Determination of eligibility for assistance; definitions (1) A State housing finance or State develop- ment agency is eligible for assistance under this section only if the Secretary determines that it is fully empowered and has adequate authority to at least carry out or assist in carrying out the purposes specified in clause (1) of subsection (a). (2) For the purpose of this section— (A) the term ‘‘State housing finance or State development agency’’ means any public body or agency, publicly sponsored corporation, or instrumentality of one or more States which is designated by the Governor (or Governors in the case of an interstate development agency) for purposes of this section; (B) the term ‘‘State’’ means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any terri- tory or possession of the United States; and (C) the term ‘‘Secretary’’ means the Sec- retary of Housing and Urban Development. Page 4731 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 1440 (c) Guarantee of obligations issued by agencies; grants to agencies for interest payments on obligations; maximum amount of grants; pre- requisites for guarantee; full faith and credit pledged for payment of guarantee; effect and validity of guarantee; fees and charges for guarantee; authorization of appropriations for grants; maximum amount of obligations guaranteed (1) The Secretary is authorized to guarantee, and enter into commitments to guarantee, the bonds, debentures, notes, and other obligations issued by State housing finance or State devel- opment agencies to finance development activi- ties as determined by him to be in furtherance of the purpose of clause (1) or (2) of subsection (a), except that obligations issued to finance ac- tivities solely in furtherance of the purpose of clause (1) of subsection (a) may be guaranteed only if the activities are in connection with the revitalization of slum or blighted areas under title I of this Act [42 U.S.C. 5301 et seq.] or under any other program determined to be acceptable by the Secretary for this purpose. (2) The Secretary is authorized to make, and to contract to make, grants to or on behalf of a State housing finance or State development agency to cover not to exceed 331⁄3 per centum of the interest payable on bonds, debentures, notes, and other obligations issued by such agency to finance development activities in furtherance of the purposes of this section. (3) No obligation shall be guaranteed or other- wise assisted under this section unless the inter- est income thereon is subject to Federal tax- ation as provided in subsection (h)(2), except that use of guarantees provided for in this sub- section shall not be made a condition to nor pre- clude receipt of any other Federal assistance. (4) The full faith and credit of the United States is pledged to the payment of all guaran- tees made under this section with respect to principal, interest, and any redemption pre- miums. Any such guarantee made by the Sec- retary shall be conclusive evidence of the eligi- bility of the obligation involved for such guar- antee, and the validity of any guarantee so made shall be incontestable in the hands of a holder of the guaranteed obligation. (5) The Secretary is authorized to establish and collect such fees and charges for and in con- nection with guarantees made under this section as he considers reasonable. (6) There are authorized to be appropriated such sums as may be necessary to make pay- ments as provided for in contracts entered into by the Secretary under paragraph (2) of this sub- section, and payments pursuant to such con- tracts shall not exceed $50,000,000 per annum prior to July 1, 1975, which maximum dollar amount shall be increased by $60,000,000 on July 1, 1975. The aggregate principal amount of the obligations which may be guaranteed under this section and outstanding at any one time shall not exceed $500,000,000. (d) Requirements for guaranteed obligations The Secretary shall take such steps as he con- siders reasonable to assure that bonds, deben- tures, notes, and other obligations which are guaranteed under subsection (c) will— (1) be issued only to investors approved by, or meeting requirements prescribed by, the Secretary, or, if an offering to the public is contemplated, be underwritten upon terms and conditions approved by the Secretary; (2) bear interest at a rate satisfactory to the Secretary; (3) contain or be subject to repayment, ma- turity, and other provisions satisfactory to the Secretary; and (4) contain or be subject to provisions with respect to the protection of the security inter- ests of the United States, including any provi- sions deemed appropriate by the Secretary re- lating to subrogation, liens, and releases of liens, payment of taxes, cost certification pro- cedures, escrow or trusteeship requirements, or other matters. (e) Revolving fund for payment of liabilities in- curred pursuant to guarantees and payment of obligations issued to Secretary of the Treasury; composition; availability, issuance of obligations to Secretary of the Treasury for implementation of guarantees; amount, maturity, rate of interest, and purchase by Secretary of the Treasury of obligations; pay- ment of expenses and charges (1) The Secretary is authorized to establish a revolving fund to provide for the timely pay- ment of any liabilities incurred as a result of guarantees under subsection (c) and for the pay- ment of obligations issued to the Secretary of the Treasury under paragraph (2) of this sub- section. Such revolving fund shall be comprised of (A) receipts from fees and charges; (B) recov- eries under security, subrogation, and other rights; (C) repayments, interest income, and any other receipts obtained in connection with guar- antees made under subsection (c); (D) proceeds of the obligations issued to the Secretary of the Treasury pursuant to paragraph (2) of this sub- section; and (E) such sums, which are hereby au- thorized to be appropriated, as may be required for such purposes. Money in the revolving fund not currently needed for the purpose of this sec- tion shall be kept on hand or on deposit, or in- vested in obligations of the United States or guaranteed thereby, or in obligations, participa- tions, or other instruments which are lawful in- vestments for fiduciary, trust, or public funds. (2) The Secretary may issue obligations to the Secretary of the Treasury in an amount suffi- cient to enable the Secretary to carry out his functions with respect to the guarantees author- ized by subsection (c). The obligations issued under this paragraph shall have such maturities and bear such rate or rates of interest as shall be determined by the Secretary of the Treasury. The Secretary of the Treasury is authorized and directed to purchase any obligations so issued, and for that purpose he is authorized to use a public debt transaction the proceeds from the sale of any securities issued under chapter 31 of title 31, and the purposes for which securities may be issued under such chapter are extended to include purchases of the obligations here- under. (3) Notwithstanding any other provision of law relating to the acquisition, handling, improve- ment, or disposal of real and other property by Page 4732 TITLE 42—THE PUBLIC HEALTH AND WELFARE the United States, the Secretary shall have power, for the protection of the interests of the fund authorized under this subsection, to pay out of such fund all expenses or charges in con- nection with the acquisition, handling, improve- ment, or disposal of any property, real or per- sonal, acquired by him as a result of recoveries under security, subrogation, or other rights. (f) Technical assistance to agencies for planning and execution of development activities The Secretary is authorized to provide, either directly or by contract or other arrangements, technical assistance to State housing finance or State development agencies to assist them in connection with planning and carrying out de- velopment activities in furtherance of the pur- pose of this section. (g) Labor standards All laborers and mechanics employed by con- tractors or subcontractors in housing or devel- opment activities assisted under this section shall be paid wages at rates not less than those prevailing on similar work in the locality as de- termined by the Secretary of Labor in accord- ance with sections 3141–3144, 3146, and 3147 of title 40: Provided, That this section shall apply to the construction of residential property only if such property is designed for residential use for eight or more families. No assistance shall be extended under this section with respect to any development activities without first obtain- ing adequate assurance that these labor stand- ards will be maintained upon the work involved in such activities. The Secretary of Labor shall have, with respect to the labor standards speci- fied in this subsection, the authority and func- tions set forth in Reorganization Plan Num- bered 14 of 1950 (64 Stat. 1267), and section 3145 of title 40. (h) Protection of guarantees issued by United States; inclusion by purchaser in gross in- come of interest paid on obligations issued by agencies (1) In the performance of, and with respect to, the functions, powers, and duties vested in him by this section, the Secretary, in addition to any authority otherwise vested to him, shall— (A) have the power, notwithstanding any other provision of law, in connection with any guarantee under this section, whether before or after default, to provide by contract for the extinguishment upon default of any redemp- tion, equitable, legal, or other right, title, or interest of a State housing finance or State development agency in any mortgage, deed, trust, or other instrument held by or on behalf of the Secretary for the protection of the secu- rity interests of the United States; and (B) have the power to foreclose on any prop- erty or commence any action to protect or en- force any right conferred upon him by law, contract, or other agreement, and bid for and purchase at any foreclosure or other sale any property in connection with which he has pro- vided a guarantee pursuant to this section. In the event of any such acquisition, the Sec- retary may, notwithstanding any other provi- sion of law relating to the acquisition, han- dling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and otherwise deal with, such property. Notwithstanding any other provision of law, the Secretary shall also have power to pursue to final collection by way of compromise or otherwise all claims acquired by him in connection with any secu- rity, subrogation, or other rights obtained by him in administering this section. (2) With respect to any obligation issued by a State housing finance or State development agency for which the issuer has elected to re- ceive the benefits of the assistance provided under this section, the interest paid on such ob- ligation and received by the purchaser thereof (or his successor in interest) shall be included in gross income for the purposes of chapter 1 of title 26. (Pub. L. 93–383, title VIII, § 802(a)–(h), Aug. 22, 1974, 88 Stat. 722–724; Pub. L. 98–479, title II, § 203(l)(4), Oct. 17, 1984, 98 Stat. 2231.) Editorial Notes REFERENCES IN TEXT This Act, referred to in subsec. (c)(1), is Pub. L. 93–383, Aug. 22, 1974, 88 Stat. 633, known as the Housing and Community Development Act of 1974. Title I of the Housing and Community Development Act of 1974 is classified principally to chapter 69 (§ 5301 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of this title and Tables. Reorganization Plan Numbered 14 of 1950, referred to in subsec. (g), is Reorg. Plan No. 14 of 1950, eff. May 24, 1950, 15 F.R. 3176, 64 Stat. 1267, which is set out in the Appendix to Title 5, Government Organization and Em- ployees. CODIFICATION In subsec. (g), ‘‘sections 3141–3144, 3146, and 3147 of title 40’’ substituted for ‘‘the Davis-Bacon Act, as amended (40 U.S.C. 276a—276a–5)’’ and ‘‘section 3145 of title 40’’ substituted for ‘‘section 2 of the Act of June 13, 1934 (40 U.S.C. 276c)’’ on authority of Pub. L. 107–217, § 5(c), Aug. 21, 2002, 116 Stat. 1303, the first section of which enacted Title 40, Public Buildings, Property, and Works. Section was enacted as part of the Housing and Com- munity Development Act of 1974, and not as part of the United States Housing Act of 1937 which comprises this chapter. AMENDMENTS 1984—Subsec. (e)(2). Pub. L. 98–479 substituted ‘‘chap- ter 31 of title 31’’ for ‘‘the Second Liberty Bond Act’’ and ‘‘such chapter’’ for ‘‘that Act’’. CHAPTER 8A—SLUM CLEARANCE, URBAN RENEWAL, AND FARM HOUSING SUBCHAPTER I—GENERAL PROVISIONS Sec. 1441. Congressional declaration of national housing policy. 1441a. National housing goals. 1441b. Plan for elimination of all substandard hous- ing and realization of national housing goal; report by President to Congress. 1441c. Omitted. 1442. Repealed. 1443. Provisions as controlling over other laws. 1444. Separability. 1445, 1446. Repealed or Transferred.