10 U.S.C. § 2875 — Investments

Page 2300 TITLE 10—ARMED FORCES § 2873 (1) rescind the contract pursuant to the terms of the contract; and (2) prohibit the offending party from enter- ing into a new contract or undertaking expan- sions of other existing contracts, or both, with the Secretary under this subchapter. (Added Pub. L. 116–92, div. B, title XXX, § 3033(a), Dec. 20, 2019, 133 Stat. 1936.) § 2873. Direct loans and loan guarantees (a) DIRECT LOANS.—(1) Subject to subsection (c), the Secretary concerned may make direct loans to an eligible entity in order to provide funds to the eligible entity for the acquisition or construction of housing units that the Secretary determines are suitable for use as military fam- ily housing or as military unaccompanied hous- ing. (2) The Secretary concerned shall establish such terms and conditions with respect to loans made under this subsection as the Secretary considers appropriate to protect the interests of the United States, including the period and fre- quency for repayment of such loans and the obli- gations of the obligors on such loans upon de- fault. (b) LOAN GUARANTEES.—(1) Subject to sub- section (c), the Secretary concerned may guar- antee a loan made to an eligible entity if the proceeds of the loan are to be used by the eligi- ble entity to acquire, or construct housing units that the Secretary determines are suitable for use as military family housing or as military unaccompanied housing. (2) The amount of a guarantee on a loan that may be provided under paragraph (1) may not exceed the amount equal to the lesser of— (A) the amount equal to 80 percent of the value of the project; or (B) the amount of the outstanding principal of the loan. (3) The Secretary concerned shall establish such terms and conditions with respect to guar- antees of loans under this subsection as the Sec- retary considers appropriate to protect the in- terests of the United States, including the rights and obligations of obligors of such loans and the rights and obligations of the United States with respect to such guarantees. (c) LIMITATION ON DIRECT LOAN AND GUAR- ANTEE AUTHORITY.—Direct loans and loan guar- antees may be made under this section only to the extent that appropriations of budget author- ity to cover their cost (as defined in section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) are made in advance, or author- ity is otherwise provided in appropriation Acts. If such appropriation or other authority is pro- vided, there may be established a financing ac- count (as defined in section 502(7) of such Act (2 U.S.C. 661a(7))), which shall be available for the disbursement of direct loans or payment of claims for payment on loan guarantees under this section and for all other cash flows to and from the Government as a result of direct loans and guarantees made under this section. (Added Pub. L. 104–106, div. B, title XXVIII, § 2801(a)(1), Feb. 10, 1996, 110 Stat. 545; amended Pub. L. 106–65, div. B, title XXVIII, § 2803(c), Oct. 5, 1999, 113 Stat. 849.) Editorial Notes AMENDMENTS 1999—Subsec. (a)(1). Pub. L. 106–65, § 2803(c)(1), sub- stituted ‘‘an eligible entity’’ for ‘‘persons in the private sector’’ and ‘‘the eligible entity’’ for ‘‘such persons’’. Subsec. (b)(1). Pub. L. 106–65, § 2803(c)(2), substituted ‘‘an eligible entity’’ for ‘‘any person in the private sec- tor’’ and ‘‘the eligible entity’’ for ‘‘the person’’. § 2874. Leasing of housing (a) LEASE AUTHORIZED.—The Secretary con- cerned may enter into contracts for the lease of housing units that the Secretary determines are suitable for use as military family housing or military unaccompanied housing. (b) USE OF LEASED UNITS.—The Secretary con- cerned shall utilize housing units leased under this section as military family housing or mili- tary unaccompanied housing, as appropriate. (c) LEASE TERMS.—A contract under this sec- tion may be for any period that the Secretary concerned determines appropriate and may pro- vide for the owner of the leased property to op- erate and maintain the property. (Added Pub. L. 104–106, div. B, title XXVIII, § 2801(a)(1), Feb. 10, 1996, 110 Stat. 546; amended Pub. L. 107–314, div. B, title XXVIII, § 2802(b)(1), (2), Dec. 2, 2002, 116 Stat. 2703.) Editorial Notes AMENDMENTS 2002—Pub. L. 107–314, § 2802(b)(2), in section catchline struck out ‘‘to be constructed’’ after ‘‘Leasing of hous- ing’’. Subsec. (a). Pub. L. 107–314, § 2802(b)(1)(B), added sub- sec. (a) and struck out heading and text of former sub- sec. (a). Text read as follows: ‘‘The Secretary concerned may enter into contracts for the lease of military fam- ily housing units or military unaccompanied housing units to be constructed under this subchapter.’’ Subsecs. (b), (c). Pub. L. 107–314, § 2802(b)(1), added subsec. (b) and redesignated former subsec. (b) as (c). § 2875. Investments (a) INVESTMENTS AUTHORIZED.—The Secretary concerned may make investments in an eligible entity carrying out projects for the acquisition or construction of housing units suitable for use as military family housing or as military unac- companied housing. (b) FORMS OF INVESTMENT.—An investment under this section may take the form of an ac- quisition of a limited partnership interest by the United States, a purchase of stock or other equity instruments by the United States, a pur- chase of bonds or other debt instruments by the United States, or any combination of such forms of investment. (c) LIMITATION ON VALUE OF INVESTMENT.—(1) The cash amount of an investment under this section in an eligible entity may not exceed an amount equal to 331⁄3 percent of the capital cost (as determined by the Secretary concerned) of the project or projects that the eligible entity proposes to carry out under this section with the investment. (2) If the Secretary concerned conveys land or facilities to an eligible entity as all or part of an investment in the eligible entity under this sec- tion, the total value of the investment by the Page 2301 TITLE 10—ARMED FORCES § 2878 Secretary under this section may not exceed an amount equal to 45 percent of the capital cost (as determined by the Secretary) of the project or projects that the eligible entity proposes to carry out under this section with the invest- ment. (3) In this subsection, the term ‘‘capital cost’’, with respect to a project for the acquisition or construction of housing, means the total amount of the costs included in the basis of the housing for Federal income tax purposes. (d) COLLATERAL INCENTIVE AGREEMENTS.—The Secretary concerned shall enter into collateral incentive agreements with eligible entities in which the Secretary makes an investment under this section to ensure that a suitable preference will be afforded members of the armed forces and their dependents in the lease or purchase, as the case may be, of a reasonable number of the housing units covered by the investment. (Added Pub. L. 104–106, div. B, title XXVIII, § 2801(a)(1), Feb. 10, 1996, 110 Stat. 546; amended Pub. L. 105–85, div. B, title XXVIII, § 2805, Nov. 18, 1997, 111 Stat. 1991; Pub. L. 106–65, div. B, title XXVIII, § 2803(d), (h)(1), Oct. 5, 1999, 113 Stat. 849; Pub. L. 108–136, div. A, title X, § 1031(a)(50), Nov. 24, 2003, 117 Stat. 1602; Pub. L. 113–66, div. B, title XXVIII, § 2805, Dec. 26, 2013, 127 Stat. 1008.) Editorial Notes AMENDMENTS 2013—Subsec. (e). Pub. L. 113–66 struck out subsec. (e). Text read as follows: ‘‘Amounts in the Department of Defense Family Housing Improvement Fund or the De- partment of Defense Military Unaccompanied Housing Improvement Fund may be used to make a cash invest- ment under this section in an eligible entity only after the end of the 30-day period beginning on the date the Secretary of Defense submits written notice of, and jus- tification for, the investment to the appropriate com- mittees of Congress or, if earlier, the end of the 14-day period beginning on the date on which a copy of the no- tice and justification is provided in an electronic me- dium pursuant to section 480 of this title.’’ 2003—Subsec. (e). Pub. L. 108–136 inserted before pe- riod at end ‘‘or, if earlier, the end of the 14-day period beginning on the date on which a copy of the notice and justification is provided in an electronic medium pur- suant to section 480 of this title’’. 1999—Pub. L. 106–65, § 2803(h)(1), struck out ‘‘in non- governmental entities’’ after ‘‘Investments’’ in section catchline. Subsec. (a). Pub. L. 106–65, § 2803(d)(1), substituted ‘‘an eligible entity’’ for ‘‘nongovernmental entities’’. Subsec. (c). Pub. L. 106–65, § 2803(d)(2), substituted ‘‘an eligible entity’’ for ‘‘a nongovernmental entity’’ in pars. (1) and (2) and ‘‘the eligible entity’’ for ‘‘the enti- ty’’ wherever appearing in pars. (1) and (2). Subsec. (d). Pub. L. 106–65, § 2803(d)(3), substituted ‘‘el- igible’’ for ‘‘nongovernmental’’. Subsec. (e). Pub. L. 106–65, § 2803(d)(4), substituted ‘‘an eligible entity’’ for ‘‘a nongovernmental entity’’. 1997—Subsec. (e). Pub. L. 105–85 added subsec. (e). § 2876. Rental guarantees The Secretary concerned may enter into agreements with eligible entities that acquire or construct military family housing units or mili- tary unaccompanied housing units under this subchapter in order to assure— (1) the occupancy of such units at levels specified in the agreements; or (2) rental income derived from rental of such units at levels specified in the agreements. (Added Pub. L. 104–106, div. B, title XXVIII, § 2801(a)(1), Feb. 10, 1996, 110 Stat. 546; amended Pub. L. 106–65, div. B, title XXVIII, § 2803(e), Oct. 5, 1999, 113 Stat. 849.) Editorial Notes AMENDMENTS 1999—Pub. L. 106–65 substituted ‘‘eligible entities’’ for ‘‘private persons’’ in introductory provisions. § 2877. Differential lease payments Pursuant to an agreement entered into by the Secretary concerned and a lessor of military family housing or military unaccompanied hous- ing to members of the armed forces, the Sec- retary may pay the lessor an amount in addition to the rental payments for the housing made by the members as the Secretary determines appro- priate to encourage the lessor to make the hous- ing available to members of the armed forces as military family housing or as military unaccom- panied housing. (Added Pub. L. 104–106, div. B, title XXVIII, § 2801(a)(1), Feb. 10, 1996, 110 Stat. 547; amended Pub. L. 106–65, div. B, title XXVIII, § 2803(f), Oct. 5, 1999, 113 Stat. 849.) Editorial Notes AMENDMENTS 1999—Pub. L. 106–65 substituted ‘‘a lessor’’ for ‘‘a pri- vate lessor’’. § 2878. Conveyance or lease of existing property and facilities (a) CONVEYANCE OR LEASE AUTHORIZED.—The Secretary concerned may convey or lease prop- erty or facilities (including ancillary supporting facilities) to eligible entities for purposes of using the proceeds of such conveyance or lease to carry out activities under this subchapter. (b) INAPPLICABILITY TO PROPERTY AT INSTALLA- TION APPROVED FOR CLOSURE.—The authority of this section does not apply to property or facili- ties located on or near a military installation approved for closure under a base closure law. (c) COMPETITIVE PROCESS.—The Secretary con- cerned shall ensure that the time, method, and terms and conditions of the reconveyance or lease of property or facilities under this section from the eligible entity permit full and free competition consistent with the value and na- ture of the property or facilities involved. (d) TERMS AND CONDITIONS.—(1) The convey- ance or lease of property or facilities under this section shall be for such consideration and upon such terms and conditions as the Secretary con- cerned considers appropriate for the purposes of this subchapter and to protect the interests of the United States. (2) As part or all of the consideration for a conveyance or lease under this section, the pur- chaser or lessor (as the case may be) shall enter into an agreement with the Secretary to ensure that a suitable preference will be afforded mem- bers of the armed forces and their dependents in the lease or sublease of a reasonable number of the housing units covered by the conveyance or lease, as the case may be, or in the lease of