Washington : Government Printing Office
It has been the policy of the Congress to assist wherever possible the States and their political subdivisions, and Indian tribes to provide the
services and facilities essential to the health and welfare of the people of the United States.
The Congress finds that in many instances municipalities, or other political subdivisions of States, and Indian tribes, which seek to provide essential public works or facilities (including mass transportation facilities and equipment), are unable to raise the necessary funds at reasonable interest rates.
It is the purpose of this chapter (subject to the limitations contained herein) to authorize the extension of credit to assist in the provision of certain essential public works or facilities by States, municipalities, or other political subdivisions of States, and Indian tribes, where such credit is not otherwise available on reasonable terms and conditions. (Aug. 11, 1955, ch. 783, title II, § 201, 69 Stat. 642; June 30, 1961, Pub. L. 87-70, title V, § 501(a), 75 Stat. 173; Oct. 15, 1962, Pub. L. 87-808, § 1, 76 Stat. 920.)
(a) Purchase of securities or obligations; loans; payment of operating expenses.
The Secretary of Housing and Urban Development is authorized (1) to purchase the securities and obligations of, or make loans to, municipalities and other political subdivisions and instrumentalities of one or more States (including public agencies and instrumentalities of one or more municipalities or other political subdivisions of one or more States), and Indian tribes to finance specific projects for public works or facilities under State, municipal, or other applicable law, and (2) to purchase the securities and obligations of, or make loans to, States, municipalities and other political subdivisions of States, public agencies and instrumentalities of one or more States, municipalities and political subdivisions of States, and public corporations, boards, and commissions established under the laws of any State, to finance the acquisition, construction, reconstruction, and improvement of facilities and equipment for use, by operation or lease or otherwise, in mass transportation service in urban areas, and for use in coordinating highway, bus, surface-rail, underground, parking and other transportation facilities in such areas. The facilities and equipment referred to in clause (2) may include land, but not public highways, and any other real or personal property needed for an economic, efficient, and coordinated mass transportation system. No such purchase or loan shall be made for payment of ordinary governmental or non-project operating expenses.
(b) Restrictions and limitations; interest.
The powers granted in subsection (a) of this section shall be subject to the following restrictions and limitations:
(1) No financial assistance shall be extended under this section unless the financial assistance applied for is not otherwise available on reasonable terms, and all securities and obligations purchased and all loans made under this section shall be of such sound value or so secured as reasonably to assure retirement or repayment, and such loans may be made either directly or in cooperation with banks or other lending institutions through agreements to participate or by the purchase of participations or otherwise.
(2) No securities or obligations shall be purchased, and no loans shall be made, including renewals or extensions thereof, which have maturity dates in excess of forty years. Subject to such maximum maturity, the Secretary in his discretion may provide for the postponement of the payment of interest on not more than 50 per centum of any financial assistance extended to an applicant under this section for a period up to ten years where (A) such assistance does not exceed 50 per centum of the development cost of the project involved, and (B) it is determined by the Secretary that such applicant will experience above-average populaton growth and the project would contribute to orderly community development, economy, and efficiency; and any amounts so postponed shall be payable with interest in annual installments during the remaining maturity of such assistance.
(3) Financial assistance extended under this section shall bear interest at a rate determined by the Secretary which shall be not more than the higher of (A) 3 per centum per annum, or (B) the total of one-half of 1 per centum per annum added to the rate of interest paid by the Secretary on funds obtained from the Secretary of the Treasury as provided in section 1493(a) of this title.
(4) (A) No financial assistance shall be extended under clause (1) of subsection (a) of this section to any municipality or other political subdivision having a population of fifty thousand or more (one hundred fifty thousand or more in the case of a community situated in an area designated as a redevelopment area under the Area Redevelopment Act or any Act supplementary thereto) according to the most recent decennial census, or; (B) to any public agency or instrumentality serving one or more municipalities, political subdivisions, or unincorporated areas in one or more States, unless each municipality, political subdivision, or unincorporated area to be served by the specific public work or facility for which assistance is sought under this section has a population less than the applicable figure under clause (A) according to such census. This paragraph shall not apply to any financial assistance to be extended under subsection (a) of this section for the purpose of financing any project for public works or facilities (i) in a community in or near which is located a research or development installation of the National Aeronautics and Space Administration, or (ii) to be initiated or accelerated as the result of a grant-in-aid from an allocation made by the President under section 2642 of this title, or (iii) to be provided in connection with the establishment of a new community approved under section 1749cc-1 of Title 12 or under sections 3901 to 3914 of this title or under part B of the Urban Growth and New Community Development Act of 1970.
(e) Priority to applications of smaller municipalities.
In the processing of applications for financial assistance under clause (1) of subsection (a) of this section the Secretary shall give priority to applications of smaller municipalities for assistance in the construction of basic public works (including works for the storage, treatment, purification, or distribution of water; sewage, sewage treatment, and sewer facilities; and gas distribution systems) for which there is an urgent and vital public need. As used in this section, a "smaller municipality" means an incorporated or unincorporated town, or other political subdivision of a State, which had a population of less than ten thousand inhabitants at the time of the last Federal census, or an Indian tribe. Notwithstanding any other provi-
sion of this chapter, the Secretary may extend financial assistance, as otherwise authorized by clause (1) of subsection (a) of this section, to any private nonprofit corporation to finance the construction of works for the storage, treatment, purification, or distribution of water or the construction of sewage, sewage treatment, and sewer facilities, if such works or facilities are needed to serve a smaller municipality or rural area, and there is no existing public body able to construct and operate such works or facilities.
(d) Loans for transportation facilities or equipment; termination date.
No loans may be made for transportation facilities or equipment, pursuant to clause (2) of subsection (a) of this section, unless the Secretary determines (1) that there is being actively developed (or has been developed) for the urban or other metropolitan area served by the applicant a program, meeting criteria established by him, for the development of a comprehensive and coordinated mass transportation system; (2) that the proposed facilities or equipment can reasonably be expected to be required for such a system; and (3) if such program has not been completed, that there is an urgent need for the provision of the facilities or equipment to be commenced prior to the time that the program could reasonably be expected to be completed: Provided, That no such loan shall be made, except under a prior commitment, after June 30, 1963.
(e) Grants-in-aid to public entities to accelerate public works; restrictions and limitations.
The Secretary is authorized to make a grant-in-aid from any allocation made for such purpose by the President under section 2642 of this title to any public entity described in clause (1) of subsection (a) of this section of not to exceed 50 per centum of the cost of construction of any project for public works or facilities, if such project would be eligible (without regard to the restrictions and limitations of subsections (b) and (c) of this section) for financial assistance under clause (1) of subsection (a) of this section in accordance with the rules and regulations of the Secretary (as in effect on September 14, 1962) relating to the types of public works and facilities to which such assistance may be extended.
(f) Assistance for cultural centers; restrictions and limitations.
The restrictions and limitations set forth in subsection (c) of this section shall not apply to assistance to municipalities, other political subdivisions and instrumentalities of one or more States, and Indian tribes, for specific projects for cultural centers, including but not limited to, museums, art centers and galleries, and theaters and other physical facilities for the performing arts, which would be of cultural, educational, and informational value to the communities and areas where the centers would be located. (Aug. 11, 1955, ch. 783, title II, § 202, 69 Stat. 643; June 30, 1961, Pub. L. 87-70, title V, § 501(b), (c), (d)(1), (e)—(g), 75 Stat. 173, 174; Sept. 5, 1962, Pub. L. 87-634, 76 Stat. 435; Sept. 14, 1962, Pub. L. 87-658, § 5, 76 Stat. 543; Oct. 15, 1962, Pub. L. 87-808, § 2, 76 Stat. 920; Oct. 15, 1962, Pub. L. 87-809, 76 Stat. 920; Sept. 2, 1964, Pub. L. 88-560, title VI, § 601, 78 Stat. 798; Aug. 10, 1965, Pub. L. 89-117, title XI, § 1107, 79 Stat. 503; Nov. 3, 1966, Pub. L. 89-754, title IV, § 407, title X, § 1009, 80 Stat. 1273, 1286; May 25, 1967, Pub. L. 90-19, § 12 (b), (c), 81 Stat. 23; Aug. 1, 1968, Pub. L. 90-448, title IV, § 416(a), 82 Stat. 518; Dec. 31, 1970, Pub. L. 91-609, title VII, § 727(b), 84 Stat. 1802.)
(a) In order to finance activities under this chapter, the Secretary is authorized and empowered to issue to the Secretary of the Treasury, from time to time and to have outstanding at any one time, notes and other obligations in an amount not to exceed $650,000,000: Provided, That, of the funds obtained through the issuance of such notes and other obligations, $600,000,000 shall be available only for purchases and loans pursuant to clause (1) of section 1492(a) of this title and $50,000,000 shall be available only for purchases and loans pursuant to clause (2) of such section. Such obligations shall be in such forms and denominations, have such maturities and be subject to such terms and conditions as may be prescribed by the Secretary, with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury which shall be not more than the higher of (1) 2 ½ per centum per annum, or (2) the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of the fiscal year next preceding the issuance by the Secretary and adjusted to the nearest one-eighth of 1 per centum. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Secretary to be issued hereunder and for such purpose the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of such notes and obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States.
(b) Funds borrowed under this section and any proceeds shall constitute a revolving fund which may be used by the Secretary in the exercise of his functions under this chapter. (Aug. 11, 1955, ch. 783, title II, § 203, 69 Stat. 643; Sept. 14, 1960, Pub. L. 86-788, § 2(c), 74 Stat. 1028; June 30, 1961, Pub. L. 87-70, title V, § 501 (d) (2), (h), (j), 75 Stat. 174, 175; May 25, 1967, Pub. L. 90-19, § 12(b), 81 Stat. 23. )
In the performance of, and with respect to, the functions, powers, and duties vested in him by this chapter the Secretary shall (in addition to any authority otherwise vested in him) have the functions, powers, and duties set forth in section 1749a of Title 12, except subsection (c) (2) of such section. Funds obtained or held by the Secretary in connection with the performance of his functions under this chapter shall be available for the administrative expenses of the Secretary in connection with the performance of such functions. (Aug. 11, 1955, ch. 783, title II, § 204, 69 Stat. 644; May 25, 1967, Pub. L. 90-19, § 12(b), 81 Stat. 23.)
As used in this chapter, the term "States" means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Trust Territory of the Pacific Islands, and the Territories and possessions of the United States. (Aug. 11, 1955, ch. 783, title II, § 206, as added Aug. 7, 1956, ch. 1029, title VI, § 603, 70 Stat. 1114, and amended Dec. 24, 1969, Pub. L. 91-152, title IV, § 403(b), 83 Stat. 395.)
The Secretary is authorized to establish technical advisory services to assist municipalities and other political subdivisions and instrumentalities, and Indian tribes in the budgeting, financing, planning, and construction of community facilities. There are authorized to be appropriated such sums as may be necessary, together with any fees that may be charged, to cover the cost of such services. (Aug. 11, 1955, ch. 783, title II, § 207, as added June 30, 1961, Pub. L. 87-70, title V, § 501(i), 75 Stat. 175; and amended Oct. 15, 1962, Pub. L. 87-808, § 3, 76 Stat. 920; May 25, 1967, Pub. L. 90-19, § 12 (b), 81 Stat. 23.)