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U.S. Code as of:
01/03/05
Section 1932. Rural industrialization assistance
(a) Loans for private business enterprises; pollution abatement and
control; aquaculture; solar energy; loan guarantees
The Secretary may also make and insure loans to public, private,
or cooperative organizations organized for profit or nonprofit, to
Indian tribes on Federal and State reservations or other federally
recognized Indian tribal groups, or to individuals for the purposes
of (1) improving, developing, or financing business, industry, and
employment and improving the economic and environmental climate in
rural communities, including pollution abatement and control, (2)
the conservation, development, and use of water for aquaculture
purposes in rural areas, (3) reducing the reliance on nonrenewable
energy resources by encouraging the development and construction of
solar energy systems and other renewable energy systems (including
wind energy systems and anaerobic digestors for the purpose of
energy generation), including the modification of existing systems,
in rural areas, and (4) to facilitate economic opportunity for
industries undergoing adjustment from terminated Federal
agricultural price and income support programs or increased
competition from foreign trade. For the purposes of this
subsection, the term "solar energy" means energy derived from
sources (other than fossil fuels) and technologies included in the
Federal Nonnuclear Energy Research and Development Act of 1974, as
amended [42 U.S.C. 5901 et seq.]. Such loans, when originated,
held, and serviced by other lenders, may be guaranteed by the
Secretary under this section without regard to paragraphs (1) and
(4) of section 1983 of this title. As used in this subsection, the
term "aquaculture" means the culture or husbandry of aquatic
animals or plants by private industry for commercial purposes
including the culture and growing of fish by private industry for
the purpose of creating or augmenting publicly owned and regulated
stocks of fish. No loan may be made, insured, or guaranteed under
this subsection that exceeds $25,000,000 in principal amount.
(b) Solid waste management grants
The Secretary may make grants to nonprofit organizations for the
provision of regional technical assistance to local and regional
governments and related agencies for the purpose of reducing or
eliminating pollution of water resources and improving the planning
and management of solid waste disposal facilities. Grants made
under this paragraph for the provision of technical assistance
shall be made for 100 percent of the cost of such assistance.
(c) Rural business enterprise grants
(1) Grants
(A) In general
The Secretary may also make grants, not to exceed $50,000,000
annually, to public bodies and private nonprofit corporations
for measures designed to finance and facilitate development of
small and emerging private business enterprises (including
nonprofit entities) or the creation, expansion, and operation
of rural distance learning networks or rural learning programs
that provide educational instruction or job training
instruction related to potential employment or job advancement
to adult students, including the development, construction or
acquisition of land, buildings, plants, equipment, access
streets and roads, parking areas, utility extensions, necessary
water supply and waste disposal facilities, refinancing,
services and fees.
(B) Small and emerging private business enterprises
(i) In general
For the purpose of subparagraph (A), a small and emerging
private business enterprise shall include (regardless of the
number of employees or operating capital of the enterprise)
an eligible nonprofit entity, or other tax-exempt
organization, with a principal office in an area that is
located -
(I) on land of an existing or former Native American
reservation; and
(II) in a city, town, or unincorporated area that has a
population of not more than 5,000 inhabitants.
(ii) Use of grant
An eligible nonprofit entity, or other tax exempt
organization, described in clause (i) may use assistance
provided under this paragraph to create, expand, or operate
value-added processing in an area described in clause (i) in
connection with production agriculture.
(iii) Priority
In making grants under this paragraph, the Secretary shall
give priority to grants that will be used to provide
assistance to eligible nonprofit entities and other tax
exempt organizations described in clause (i).
(2) Passenger transportation services or facilities
The Secretary may award grants on a competitive basis to
qualified nonprofit organizations for the provision of technical
assistance and training to rural communities for the purpose of
improving passenger transportation services or facilities.
Assistance provided under this paragraph may include on-site
technical assistance to local and regional governments, public
transit agencies, and related nonprofit and for-profit
organizations in rural areas, the development of training
materials, and the provision of necessary training assistance to
local officials and agencies in rural areas.
(3) Grants to aid industries in adjusting to terminated Federal
agricultural programs or increased foreign competition
The Secretary may make grants under this section to facilitate
economic opportunity for industries undergoing adjustment from
terminated Federal agricultural price and income support programs
or increased competition from foreign trade.
(d) Joint loans or grants for private business enterprises;
restrictions; system of certification for expeditious processing
of requests for assistance; prior approval of grant or loan;
equity investment as condition for loan commitment; issuance of
certificates of beneficial ownership of notes
(1) The Secretary may participate in joint financing to
facilitate development of private business enterprises in rural
areas with the Economic Development Administration, the Small
Business Administration, and the Department of Housing and Urban
Development and other Federal and State agencies and with private
and quasi-public financial institutions, through joint loans to
applicants eligible under subsection (a) of this section for the
purpose of improving, developing, or financing business, industry,
and employment and improving the economic and environmental climate
in rural areas or through joint grants to applicants eligible under
subsection (c) of this section for such purposes, including in the
case of loans or grants the development, construction, or
acquisition of land, buildings, plants, equipment, access streets
and roads, parking areas, utility extensions, necessary water
supply and waste disposal facilities, refining, service and fees.
(2) No financial or other assistance shall be extended under any
provision of this section, except for cases in which such
assistance does not exceed $1,000,000 or for cases in which direct
employment will not be increased by more than fifty employees, that
is calculated to or is likely to result in the transfer from one
area to another of any employment or business activity provided by
operations of the applicant, but this limitation shall not be
construed to prohibit assistance for the expansion of an existing
business entity through the establishment of a new branch,
affiliate, or subsidiary of such entity if the establishment of
such branch, affiliate, or subsidiary will not result in an
increase in unemployment in the area of original location or in any
other area where such entity conducts business operations unless
there is reason to believe that such branch, affiliate, or
subsidiary is being established with the intention of closing down
the operations of the existing business entity in the area of its
original location or in any other area where it conducts such
operations.
(3) No financial or other assistance shall be extended under any
provision of this section, except for cases in which such
assistance does not exceed $1,000,000 or for cases in which direct
employment will not be increased by more than fifty employees,
which is calculated to or likely to result in an increase in the
production of goods, materials, or commodities, or the availability
of services or facilities in the area, when there is not sufficient
demand for such goods, materials, commodities, services or
facilities, to employ the efficient capacity of existing
competitive commercial or industrial enterprises, unless such
financial or other assistance will not have an adverse effect upon
existing competitive enterprises in the area.
(4) No financial or other assistance shall be extended under any
provision of this section, except for cases in which such
assistance does not exceed $1,000,000 or for cases in which direct
employment will not be increased by more than fifty employees, if
the Secretary of Labor certifies within 30 days after the matter
has been submitted to him by the Secretary of Agriculture that the
provisions of paragraphs (2) and (3) of this subsection have not
been complied with. The Secretary of Labor shall, in cooperation
with the Secretary of Agriculture, develop a system of
certification which will insure the expeditious processing of
requests for assistance under this section.
(5) No grant or loan authorized to be made under this chapter
shall require or be subject to the prior approval of any officer,
employee, or agency of any State.
(6) No loan commitment issued under this section shall be
conditioned upon the applicant investing in excess of 10 per centum
in the business or industrial enterprise for which purpose the loan
is to be made unless the Secretary determines there are special
circumstances which necessitate an equity investment by the
applicant greater than 10 per centum.
(7) No provision of law shall prohibit issuance by the Secretary
of certificates evidencing beneficial ownership in a block of notes
insured or guaranteed under this chapter or Title V of the Housing
Act of 1949 [42 U.S.C. 1471 et seq.]; any sale by the Secretary of
such certificates shall be treated as a sale of assets for the
purposes of chapter 11 of title 31. Any security representing
beneficial ownership in a block of notes guaranteed or insured
under this chapter or Title V of the Housing Act of 1949 issued by
a private entity shall be exempt from laws administered by the
Securities and Exchange Commission, except sections 77q, 77v, and
77x of title 15; however, the Secretary shall require (i) that the
issuer place such notes in the custody of an institution chartered
by a Federal or State agency to act as trustee and (ii) that the
issuer provide such periodic reports of sales as the Secretary
deems necessary.
(e) Rural cooperative development grants
(1) Definitions
In this subsection:
(A) Nonprofit institution
The term "nonprofit institution" means any organization or
institution, including an accredited institution of higher
education, no part of the net earnings of which inures, or may
lawfully inure, to the benefit of any private shareholder or
individual.
(B) United States
The term "United States" means the several States, the
District of Columbia, the Commonwealth of Puerto Rico, the
Virgin Islands, Guam, American Samoa, and the other territories
and possessions of the United States.
(2) Grants
The Secretary shall make grants, effective October 1, 1996,
under this subsection to nonprofit institutions for the purpose
of enabling the institutions to establish and operate centers for
rural cooperative development.
(3) Goals
The goals of a center funded under this subsection shall be to
facilitate the creation of jobs in rural areas through the
development of new rural cooperatives, value added processing,
and rural businesses.
(4) Application
Any nonprofit institution seeking a grant under paragraph (2)
shall submit to the Secretary an application containing a plan
for the establishment and operation by the institution of a
center or centers for cooperative development. The Secretary may
approve the application if the plan contains the following:
(A) A provision that substantiates that the center will
effectively serve rural areas in the United States.
(B) A provision that the primary objective of the center will
be to improve the economic condition of rural areas through
cooperative development.
(C) A description of the activities that the center will
carry out to accomplish the objective. The activities may
include the following:
(i) Programs for applied research and feasibility studies
that may be useful to individuals, cooperatives, small
businesses, and other similar entities in rural areas served
by the center.
(ii) Programs for the collection, interpretation, and
dissemination of information that may be useful to
individuals, cooperatives, small businesses, and other
similar entities in rural areas served by the center.
(iii) Programs providing training and instruction for
individuals, cooperatives, small businesses, and other
similar entities in rural areas served by the center.
(iv) Programs providing loans and grants to individuals,
cooperatives, small businesses, and other similar entities in
rural areas served by the center.
(v) Programs providing technical assistance, research
services, and advisory services to individuals, cooperatives,
small businesses, and other similar entities in rural areas
served by the center.
(vi) Programs providing for the coordination of services
and sharing of information among the center.(!1)
(D) A description of the contributions that the activities
are likely to make to the improvement of the economic
conditions of the rural areas for which the center will provide
services.
(E) Provisions that the center, in carrying out the
activities, will seek, where appropriate, the advice,
participation, expertise, and assistance of representatives of
business, industry, educational institutions, the Federal
Government, and State and local governments.
(F) Provisions that the center will take all practicable
steps to develop continuing sources of financial support for
the center, particularly from sources in the private sector.
(G) Provisions for -
(i) monitoring and evaluating the activities by the
nonprofit institution operating the center; and
(ii) accounting for money received by the institution under
this section.
(5) Awarding grants
Grants made under paragraph (2) shall be made on a competitive
basis. In making grants under paragraph (2), the Secretary shall
give preference to grant applications providing for the
establishment of centers for rural cooperative development that -
(A) demonstrate a proven track record in administering a
nationally coordinated, regionally or State-wide operated
project;
(B) demonstrate previous expertise in providing technical
assistance in rural areas;
(C) demonstrate the ability to assist in the retention of
businesses, facilitate the establishment of cooperatives and
new cooperative approaches, and generate employment
opportunities that will improve the economic conditions of
rural areas;
(D) demonstrate the ability to create horizontal linkages
among businesses within and among various sectors in rural
areas of the United States and vertical linkages to domestic
and international markets;
(E) commit to providing technical assistance and other
services to underserved and economically distressed areas in
rural areas of the United States; and
(F) commit to providing greater than a 25 percent matching
contribution with private funds and in-kind contributions,
except that the Secretary shall not require non-Federal
financial support in an amount that is greater than 5 percent
in the case of a 1994 institution (as defined in section 532 of
the Equity in Educational Land-Grant Status Act of 1994 (7
U.S.C. 301 note; Public Law 103-382)).
(6) 1-year grants; authority to approve grant for 1 additional
year without application
The Secretary shall make grants under this subsection for a
period of 1 year. The Secretary shall evaluate programs receiving
assistance under this subsection. If the Secretary determines it
to be in the best interest of the program, the Secretary may
award an additional grant to the program for the immediately
succeeding year without application for the grant.
(7) Technical assistance to prevent excessive unemployment or
underemployment
In carrying out this subsection, the Secretary may provide
technical assistance to alleviate or prevent conditions of
excessive unemployment, underemployment, outmigration, or low
employment growth in economically distressed rural areas that the
Secretary determines have a substantial need for the assistance.
The assistance may include planning and feasibility studies,
management and operational assistance, and studies evaluating the
need for development potential of projects that increase
employment and improve economic growth in the areas.
(8) Grants to defray administrative costs
The Secretary may make grants to defray not to exceed 75
percent of the costs incurred by organizations and public bodies
to carry out projects for which grants or loans are made under
this subsection. For purposes of determining the non-Federal
share of the costs, the Secretary shall consider contributions in
cash and in kind, fairly evaluated, including premises,
equipment, and services.
(9) Authorization of appropriations
There are authorized to be appropriated to carry out this
subsection $50,000,000 for each of fiscal years 1996 through
2007.
(f) Grants to broadcasting systems
(1) "Statewide" defined
In this subsection, the term "statewide" means having a
coverage area of not less than 90 percent of the population of a
State and not less than 80 percent of the rural land area of the
State (as determined by the Secretary).
(2) Grants
The Secretary may make grants to statewide private nonprofit
public television systems, whose coverage area is predominately
rural, for the purpose of demonstrating the effectiveness of such
systems in providing information on agriculture and other issues
of importance to farmers and other rural residents. Grants
available under this paragraph may be used for capital equipment
expenditures, start-up and program costs, and other costs
necessary to the operation of such demonstrations.
(3) Authorization of appropriations
There is authorized to be appropriated to carry out this
subsection $5,000,000 for each of fiscal years 2002 through 2007.
(g) Business and industry direct and guaranteed loans
(1) Definition of business and industry loan
In this subsection, the term "business and industry loan" means
a business and industry direct or guaranteed loan that is made or
guaranteed by the Secretary under subsection (a)(1) of this
section.
(2) Loan guarantees for the purchase of cooperative stock
(A) In general
The Secretary may guarantee a business and industry loan to
individual farmers or ranchers for the purpose of purchasing
capital stock of a farmer or rancher cooperative established
for the purpose of processing an agricultural commodity.
(B) Processing contracts during initial period
A cooperative described in subparagraph (A) for which a
farmer or rancher receives a guarantee to purchase stock under
subparagraph (A) may contract for services to process
agricultural commodities, or otherwise process value-added
agricultural products, during the 5-year period beginning on
the date of the startup of the cooperative in order to provide
adequate time for the planning and construction of the
processing facility of the cooperative.
(C) Financial information
Financial information required by the Secretary from a farmer
or rancher as a condition of making a business and industry
loan guarantee under this paragraph shall be provided in the
manner generally required by commercial agricultural lenders in
the area.
(3) Loans to cooperatives
(A) In general
The Secretary may make or guarantee a business and industry
loan to a cooperative organization that is headquartered in a
metropolitan area if the loan is used for a project or venture
described in subsection (a) of this section that is located in
a rural area or a loan guarantee that meets the requirements of
paragraph (6).
(B) Refinancing
A cooperative organization that is eligible for a business
and industry loan shall be eligible to refinance an existing
business and industry loan with a lender if -
(i) the cooperative organization -
(I) is current and performing with respect to the
existing loan; and
(II) is not, and has not been, in payment default, or the
collateral of which has not been converted, with respect to
the existing loan; and
(ii) there is adequate security or full collateral for the
refinanced loan.
(4) Loan appraisals
The Secretary may require that any appraisal made in connection
with a business and industry loan be conducted by a specialized
appraiser that uses standards that are similar to standards used
for similar purposes in the private sector, as determined by the
Secretary.
(5) Fees
The Secretary may assess a 1-time fee for any guaranteed
business and industry loan in an amount that does not exceed 2
percent of the guaranteed principal portion of the loan.
(6) Loan guarantees in nonrural areas
(A) In general
The Secretary may guarantee a business and industry loan to a
cooperative organization for a facility that is not located in
a rural area if -
(i) the primary purpose of the loan guarantee is for a
facility to provide value-added processing for agricultural
producers that are located within 80 miles of the facility;
(ii) the applicant demonstrates to the Secretary that the
primary benefit of the loan guarantee will be to provide
employment for residents of a rural area; and
(iii) the total amount of business and industry loans
guaranteed for a fiscal year under this paragraph does not
exceed 10 percent of the business and industry loans
guaranteed for the fiscal year under subsection (a)(1) of
this section.
(B) Principal amounts
The principal amount of a business and industry loan
guaranteed under this paragraph may not exceed $25,000,000.
(7) Intangible assets
In determining whether a cooperative organization is eligible
for a guaranteed business and industry loan, the Secretary may
consider the market value of a properly appraised brand name,
patent, or trademark of the cooperative.
(8) Limitations on loan guarantees for cooperative organizations
(A) Principal amount
(i) In general
Subject to clause (ii), the principal amount of a business
and industry loan made to a cooperative organization and
guaranteed under this subsection shall not exceed
$40,000,000.
(ii) Use
To be eligible for a guarantee under this subsection for a
business and industry loan made to a cooperative
organization, the principal amount of the any such loan in
excess of $25,000,000 shall be used to carry out a project -
(I) in a rural area; and
(II) that provides for the value-added processing of
agricultural commodities.
(B) Applications
If a cooperative organization submits an application for a
guarantee under this subsection of a business and industry loan
with a principal amount that is in excess of $25,000,000, the
Secretary -
(i) shall review and, if appropriate, approve the
application; and
(ii) may not delegate the approval authority.
(C) Maximum amount
The total amount of business and industry loans made to
cooperative organizations and guaranteed for a fiscal year
under this subsection with principal amounts that are in excess
of $25,000,000 may not exceed 10 percent of the business and
industry loans guaranteed for the fiscal year under subsection
(a)(1) of this section.
(h) Loan guarantees for certain loans
The Secretary may guarantee loans made under subsection (a) of
this section to finance the issuance of bonds for the projects
described in section 1926(a)(24) of this title.
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